Tungtex : MAJOR TRANSACTION IN RELATION TO DISPOSAL OF ASSETS

Date

29 November 2019

Parties

1)

the Vendor

2)

the Purchaser

Subject matter

Pursuant to the Disposal Agreement, the Vendor has agreed to sell,

and the Purchaser has agreed to acquire, the following assets located

in 中國廣東省東莞市清溪鎮漁梁圍村 :-

1)

the industrial land use rights with a total site area of 17,041.96

sq. m. until 31 March 2055;

2)

the buildings and ancillary facilities located thereon with a total

gross floor area of 20,473.03 sq. m., comprising:

a) a dormitory building with a total gross floor area of

6,296.78 sq. m.;

b) a dormitory building with a total gross floor area of

2,360.25 sq. m.; and

c) a factory building with a total gross floor area of 11,816.00

sq. m.

(collectively, the "Target Assets")

Consideration and

The

Consideration for the disposal of the Target Assets is

Payment

RMB70,500,000, inclusive of tax payable by the Vendor pursuant to

the terms of the Disposal Agreement.

The Consideration shall be paid by the Purchaser in the following

manner:-

1)

The Purchaser shall pay RMB30,000,000 into the Joint Account

within 2 working days after the Joint Account has been opened;

Certificate").

Notes:

1)

The Parties shall be responsible for their respective tax obligations under the

applicable laws and shall assist each other in handling the relevant tax matters

in respect of the Disposal.

2)

Taxes payable by the Vendor in respect of the Disposal shall be paid from

the Joint Account and the Purchaser shall duly provide to the Escrow Bank

the First Authorization Form and other necessary documents to facilitate the

Vendor's settlement of the aforementioned taxes.

3)

The Purchaser shall provide to the Vendor the Second Authorization Form at

the same time as the First Authorization Form is deposited with the Escrow

Bank, failing which the Vendor shall not be required to perform its tax

obligations.

Basis of Consideration

The

Consideration was determined after arm's length negotiations

between the Vendor and the Purchaser by reference to the valuation

of the Target Assets prepared by the Independent Property Valuer

engaged by the Company. The appraised value of the Target Assets is

approximately RMB60.06 million as at 28 November 2019.

Conditions Precedent

Completion of the Disposal is conditional upon the Company having

obtained approval of the Disposal Agreement and the transactions

contemplated thereunder from the Shareholders in accordance with the

Listing Rules and other applicable laws.

In the event that such Shareholders' approval cannot be obtained,

the Vendor shall immediately notify the Purchaser and relinquish

control of the Joint Account so that the funds therein may be released

to the Purchaser. The Disposal Agreement shall terminate and all

obligations and liabilities of the Vendor and the Purchaser to each

other thereunder shall cease immediately upon such termination.

Completion

The Target Assets shall be handed over to the Purchaser on the first

working day after the Vendor has received the Consideration in the

Vendor's Designated Account from the Joint Account.

"Escrow Agreement"

the escrow agreement entered into by and between the Parties and the

Escrow Bank on the same day the Disposal Agreement is entered into

"Escrow Bank"

the escrow bank appointed pursuant to the provisions of the Disposal

Agreement

"First Authorization

the payment authorization form to be provided by the Purchaser to the

Form"

Escrow Bank to facilitate the Vendor's settlement of its tax obligations

pursuant to the Disposal from the Joint Account

"Group"

the Company and its subsidiaries

"HK$"

Hong Kong dollars, the lawful currency of Hong Kong

"Hong Kong"

the Hong Kong Special Administrative Region of the PRC

"Independent Property

the independent property valuer engaged by the Company

Valuer"

"Independent Third

an independent third party not connected with the Company or its

Party(ies)"

connected persons (as defined under the Listing Rules)

"Joint Account"

an account jointly opened and administered by the Parties pursuant to

the Escrow Agreement

"Purchaser"

東莞市豐泰達科技有限公司 (Dongguan Feng Tai Da Technology Co.,

Ltd.*), a company established in the PRC with limited liability

"Purchaser's

the Purchaser's representative appointed pursuant to the provisions of

Representative"

the Disposal Agreement

"RMB"

renminbi yuan, the lawful currency of the PRC

"Second Authorization

the payment authorization form to be provided by the Purchaser to

Form"

the Vendor for the latter's presentation to the Escrow Bank together

with a copy of the Ownership Certificate, whereupon the Escrow

Bank shall release the funds in the Joint Account to the Vendor's

Designated Account pursuant to the terms of the Disposal Agreement

and the Escrow Agreement

"Vendor's Designated

the account designated by the Vendor to receive payments from the

Account"

Escrow Bank pursuant to the Disposal Agreement and the Escrow

Agreement

"%"

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