Easyknit International : Announcement - DISCLOSEABLE TRANSACTION - PURCHASE OF EQUITY LINKED NOTE OF HSBC HOLDINGS PLC

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

EASYKNIT INTERNATIONAL HOLDINGS LIMITED 永義國際集團有限公司*

(incorporated in Bermuda with limited liability)

(Stock Code: 1218)

DISCLOSEABLE TRANSACTION PURCHASE OF EQUITY LINKED NOTE OF

HSBC HOLDINGS PLC

On 8 January 2018, the Group, through its wholly-owned subsidiary, has purchased an ELN of HSBC for a principal amount of HK$50,000,000.

The Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules, as certain applicable percentage ratio exceeds 5% but is less than 25%.

THE ACQUISITION

On 8 January 2018, the Group, through its wholly-owned subsidiary, has purchased an ELN of HSBC for a principal amount of HK$50,000,000 and the major terms of ELN of HSBC are listed below:

Major Terms of ELN

1.	Trade date:	8 January 2018
2.	Issuer:	J.P. Morgan Structured Products B.V.
3.	Linked equity:	HSBC
4.	Principal amount:	HK$50,000,000
5.	Issue price:	HK$80.3000
6.	Strike price:	HK$79.1437
7.	Tenor:	2 months
8.	1st Observation date:	22 February 2018
9.	2nd Observation date:	22 March 2018
10.	Coupon rate:	15.80% per annum

Save as the aforementioned, the Group does not have any ELN of HSBC outstanding as at the date of this announcement.

ELN are designated as financial assets at fair value gain through profit or loss. The ELN is subject to mandatory redemption clause at a strike price until maturity dates depending on the market price of the HSBC Share underlying the ELN.

* for identification purposes only

ELN has two payoff possibilities of which the Company shall receive the full face value of the ELN and the coupon interest on the fixing date (i.e. 1st observation date and/or 2nd observation date) if the underlying stock price closes at or above the strike price of the embedded option. Conversely if the underlying stock price closes below the strike price of the embedded option, the Company will be obliged to take delivery of the underlying shares at the strike price. The number of shares to be received on maturity is calculated by dividing the ELN's full face value by the strike price of the embedded put option.

The maximum risk exposure of the Company is at the time when the Company is obliged to take delivery of the underlying shares at the strike price, and the total amount of the funds for the acquisition of the underlying shares is limited to the principal amount of the ELN.

Principal Amount

The principal amount of the Acquisition shall be paid on 22 January 2018 and be satisfied in cash from internal resources of the Company.

REASONS AND BENEFITS OF THE PURCHASE OF ELN

The Group's principal activities are property investment, property development, securities investment and loan financing business.

The Board has a view that ELN is one of the investment options that can earn potentially higher interest income (in the form of interest rates) than normal market deposit; and ELN does not have any brokerage charges and clearing fees on the purchase of the underlying shares until the time when the underlying shares are delivered. By capitalising on share movements, it is an opportunity to maximise market opportunities by earning more attractive interest rate.Moreover, ELN has a flexible choice in terms of the share counters and tenors.

In consideration of the above factors and the terms of ELN, the present market conditions of the stock market and the track record of HSBC, the Board is of the view that the Acquisition is fair and reasonable, on normal commercial terms and in the interests of the Company and its Shareholders as a whole.

INFORMATION ON HSBC

HSBC is a company incorporated in England with limited liability and its shares are listed on the London, Hong Kong, New York, Paris and Bermuda stock exchanges. Based on its company profile made available on the website of the Stock Exchange, HSBC is principally engaged in the provision of a comprehensive range of banking and related financial services through an international network in the Asia-Pacific region, Europe, the Americas, the Middle East and Africa.

The following information is extracted from the published documents of HSBC:

For the nine months ended 30 September 2017

For the year ended

31 December 2016 2015

USD million

USD million USD million

Revenue

Profit before taxation Net profit after taxation attributable to shareholders of HSBC Total assets

48,502 14,863 10,746 2,526,214

59,836 71,092

7,112 18,867

2,479 13,522

2,374,986

2,409,656

LISTING RULES IMPLICATIONS

As certain applicable percentage ratio (as set out in Rule 14.07) of the Listing Rules of the Acquisition exceeds 5% but is less than 25%, the Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules.

As at the date of this announcement and to the best of the Directors' knowledge, information and belief, there is no Shareholder who has a material interest in the Acquisition.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms have the following meanings:

"Acquisition"	the purchase of an ELN of HSBC for a principal amount of
HK$50,000,000 by Ace Winner Investment Limited, a
wholly-owned subsidiary of the Company on 8 January 2018
"Board"	the board of Directors
"Company"	Easyknit International Holdings Limited, an exempted company
incorporated in Bermuda with limited liability, the shares of
which are listed on the main board of Stock Exchange
"Director(s)"	director(s) of the Company
"discloseable transaction"	as defined in the Listing Rules
"ELN"	an equity linked note issued by J.P. Morgan Structured Products
B.V.
"Group"	the Company and its subsidiaries
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
3

"HSBC"	HSBC Holdings plc, whose shares are listed on the main board
of the Stock Exchange (stock code: 00005)
"HSBC Share(s)"	shares in the share capital of HSBC listed on the main board of
the Stock Exchange and traded in Hong Kong dollars
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
Exchange
"percentage ratios"	as defined in the Listing Rules
"PRC"	the People's Republic of China
"Shareholder(s)"	holder(s) of shares of the Company
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"%"	per cent
Hong Kong, 11 January 2018

By Order of the Board

Easyknit International Holdings Limited

Tse Wing Chiu Ricky

President and Chief Executive Officer

As at the date hereof, the Board comprises Mr. Tse Wing Chiu Ricky, Ms. Lui Yuk Chu and Ms. Koon Ho Yan Candy as executive directors; and Mr. Tsui Chun Kong, Mr. Jong Koon Sang and Mr. Hon Tam Chun as independent non-executive directors.