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.

I.ODICIDG LONKING HOLDINGS LIMITED Jft lllli mtfim*itJ*

(lncorporated in the Cayman Islands with limited liability)

(Stock code: 3339)

CONTINUING CONNECTED TRANSACTIONS

On 31 December 2013, the Company and Shanghai Refined Machinery entered into the Master Sales Agreement, pursuant to which the Company has agreed to sell the Products to Shanghai Refined Machinery from time to time fora term commencing from l January 2014 and ending on

31 December 2014.

As at the date of this announcement, as Shanghai Refined Machinery is a company wholly owned by Refined Holdings, which is in turn wholly owned by Mr. Li Bin, the son of Mr. Li San Yim, an executive Director, the chairman and the controlling shareholder of the Company, it is an associate of Mr. Li San Yim. Thus, Shanghai Refined Machinery is a connected person of the Company under the Listing Rules. Accordingly, the Master Sales Agreement and the transactions contemplated thereunder constitute continuing connected transactions for the Company under the Listing Rules.

As each of the applicable ratios (other than the profits ratio) in respect of the continuing connected transactions contemplated under the Master Sales Agreement is on an annual basis expected to exceed more than 0.1% but less than 5%, such transactions constitute continuing connected transactions under Rule 14A.34 of the Listing Rules and are thus subject to the reporting and announcement requirements set out in Rules 14A.45 to 14A.47 of the Listing Rules, the annual review requirements set out in Rules 14A.37 to 14A.40 of the Listing Rules and the requirements set out in Rules 14A.35(1) and 14A.35(2) of the Listing Rules, but are exempt from the independent shareholders' approvai requirements under Chapter 14A of the Listing Rules.

The major terms of the Master Sales Agreement are set out below:

THE MASTER SALES AGREEMENT

Date 31 December 2013

* Far identification purposes only

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Term : 1 January 2014 to 31 December 2014 (both days inclusive) Parties : (a) the Company; and
(b) Shanghai Refined Machinery
Subject : The Company agrees to sell or procure its subsidiaries to sell the Products to Shanghai Refined Machinery and Shanghai Refined Machinery agrees to purchase the Products from the Company or its subsidiaries in accordance with the terms and conditions of the Master
Sales Agreement.
Price and Payment
Terms
: The sales price of the Products shall not be (i) higher than the price at which the Company or its subsidiaries would otherwise sell to its independent customers which purchase the Products of the same type and quality, and (ii) higher than the price at which Shanghai Refined Machinery would otherwise purchase from its independent supplies which supply the Products of the same type and quality.
The Company and Shanghai Refined Machinery shall enter into a rotary drilling rig chassis contract for each transaction of the sales of the Products based on the principal terms and conditions set out in the Master Sales Agreement. The sales price of Products for each transaction shall be settled in full within 30 business days after shipping of the
Products to customers by the Company.

Historical transaction records

For the period from 1 January 2013 and the eleven months ended on 30 November 2013, the aggregate amount of the Products sold by the Company to Shanghai Refined Machinery was approximately RMB3.3 million (equivalent to approximately HK$4.2 million). During such period, as each of the applicable percentage ratios (other than the profits ratio) in respect of the sales of the Products was on an annual basis less than 0.1%, the sales of the Products were regarded as de minimis transactions which were exempt from the reporting, announcement and independent shareholders' approval requirements under Rule 14A.33(3) of the Listing Rules.

Annual cap

The Directors estimate that the aggregate sales amount of the Products to Shanghai Refined Machinery pursuant to the transactions under the Master Sales Agreement for the financial year ending 31 December 2014 will not exceed RMB11 million (including value added tax) (equivalent to approximately HK$14 million). The annual cap was determined by the Company with reference to historical transaction records and the anticipated demand of the Products by the Company for the year ending 31 December 2014.

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REASONS FOR AND BENEFITS OF ENTERING INTO THE MASTER SALES AGREEMENT

The Company could further enhance its capabilities in products research and development and production manufacturing, as well as increase its profits through sales of the Products.

INFORMATION ON THE GROUP AND SHANGHAI REFINED MACHINERY

The Group is a leading manufacturer of wheel loaders and one of the major manufacturers of engineering machineries in the PRC. Its core business is the design, manufacture and sale of wheel loaders, excavators, forklifts and road rollers.
Shanghai Refined Machinery is a manufacturer and distributor of engineering machineries and components, including the Products, in the PRC. It is primarily engaged in the development, design and production of engineering machineries, construction machineries, diesel engines and their components, as well as the sale of self-manufactured products and the provision of after-sales services and technical consulting services.

LISTING RULES IMPLICATIONS

As at the date of this announcement, as Shanghai Refined Machinery is a company wholly owned by Refined Holdings, which is in turn wholly owned by Mr. Li Bin, the son of Mr. Li San Yim, an executive Director, the chairman and the controlling shareholder of the Company, it is an associate of Mr. Li San Yim. Thus, Shanghai Refined Machinery is a connected person of the Company under the Listing Rules. Accordingly, the Master Sales Agreement and the transactions contemplated thereunder constitute continuing connected transactions for the Company under the Listing Rules.
As each of the applicable ratios (other than the profits ratio) in respect of the continuing connected transactions contemplated under the Master Sales Agreement is on an annual basis expected to exceed more than 0.1% but less than 5%, such transactions constitute continuing connected transactions under Rule 14A.34 of the Listing Rules and are thus subject to the reporting and announcement requirements set out in Rules 14A.45 to 14A.47 of the Listing Rules, the annual review requirements set out in Rules 14A.37 to 14A.40 of the Listing Rules and the requirements set out in Rules
14A.35(1) and 14A.35(2) of the Listing Rules, but are exempt from the independent shareholders'
approval requirements under Chapter 14A of the Listing Rules.
At the Board meeting held to approve the Master Sales Agreement, Mr. Li San Yim, who is a controlling shareholder of the Company, an executive Director and the chairman of the Group, and Ms. Ngai, who is the spouse of Mr. Li San Yim and a non-executive Director and the deputy chairman of the Group, are considered to be interested in the transactions contemplated under the Master Sales Agreement and have abstained from voting in respect of the resolutions proposed to approve the Master Sales Agreement. Save for Mr. Li San Yim and Ms. Ngai who have abstained

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from voting for the resolutions because of their interests in the transactions, the Board, including all the independent non-executive Directors, have unanimously voted in favour of the resolutions proposed to approve the Master Sales Agreement.
The Directors (excluding Mr. Li San Yim and Ms. Ngai who have abstained from voting on the resolutions of the Board approving the Master Sales Agreement and the transactions contemplated thereunder, but including the independent non-executive Directors) consider that the transactions under the Master Sales Agreement are entered into in the usual and ordinary course of business of the Company, and the terms of the Master Sales Agreement have been negotiated and will be conducted on an arm's length basis and on normal commercial terms between the Company and Shanghai Refined Machinery. The Directors (excluding Mr. Li San Yim and Ms. Ngai who have abstained from voting on the resolutions of the Board approving the Master Sales Agreement and the transactions contemplated thereunder, but including the independent non-executive Directors) are of the view that, as far as the Company and the Shareholders are concerned, the Master Sales Agreement and the terms thereof are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

DEFINITIONS

Unless otherwise specified, the following terms have the following meanings in this announcement. "associate" has the meanings as given to it in the Listing Rules;
"Board" the board of Directors;
"Company" Lonking Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the main board of the Stock Exchange;
"connected person(s)" has the meaning ascribed to it under the Listing Rules; "controlling shareholder" has the meaning ascribed to it under the Listing Rules; "Director(s)" the director(s) of the Company;
"Group" the Company and its subsidiaries;
"HK$" Hong Kong dollar, the lawful currency of Hong Kong;
"Hong Kong" the Hong Kong Special Administrative Region of the People's
Republic of China;
"Listing Rules" the Rules Governing the Listing of Securities on the Stock
Exchange;

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"Mr. Li Bin"