Sheng Ye Capital : MATERIAL CHANGE OF TERMS OF THE PREVIOUSLY ANNOUNCED DISCLOSEABLE TRANSACTION - PROVISION OF GUARANTEE AND COUNTER GUARANTEE

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.

SHENG YE CAPITAL LIMITED

盛 業 資 本 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 6069)

MATERIAL CHANGE OF TERMS OF THE PREVIOUSLY

ANNOUNCED DISCLOSEABLE TRANSACTION -

PROVISION OF GUARANTEE AND COUNTER GUARANTEE

SUPPLEMENTAL GUARANTEE AGREEMENT

The Board hereby announces that on 3 January 2020, SY Factoring, an indirect wholly owned subsidiary of the Company, entered into the Supplemental Guarantee Agreement with Wuxi Tonghui and Wuxi Guojin pursuant to which the maximum amount of the Secured Obligations B was revised from not exceeding RMB500 million to not exceeding RMB1 billion.

LISTING RULES IMPLICATIONS

The Directors consider that the Supplemental Guarantee Agreement constitutes material change to the terms of its preceding agreement and the Company shall re-comply with the requirements under Chapter 14 of the Listing Rules. Further, since the Guarantee Agreement A and Guarantee Agreement B (as supplemented by the Supplemental Guarantee Agreement) were entered into with the same parties or their associates within 12 months, the transactions contemplated under the Guarantee Agreement A and Guarantee Agreement B (as supplemented by the Supplemental Guarantee Agreement) shall be aggregated under Rule 14.22 of the Listing Rules.

− 1 −

As the highest applicable percentage ratio for the Company as calculated under Rule 14.07 of the Listing Rules in relation to the provision of guarantee under each of the Guarantee Agreement A and Guarantee Agreement B (as supplemented by the Supplemental Guarantee Agreement) either on standalone basis or on aggregate basis exceeds 5% but is less than 25%, the entering into of each of the Guarantee Agreement A and Guarantee Agreement B (as supplemented by the Supplemental Guarantee Agreement) constitutes a discloseable transaction for the Company under the Listing Rules and is subject to the reporting and announcement requirements.

In addition, as the asset ratio (as defined in the Listing Rules) for the Guarantee Agreement A and Guarantee Agreement B (as supplemented by the Supplemental Guarantee Agreement) exceeds 8%, the Guarantee Agreement A and Guarantee Agreement B (as supplemented by the Supplemental Guarantee Agreement) are subject to the announcement requirements under Rule 13.15 of the Listing Rules.

INTRODUCTION

Reference is made to the announcement of the Company dated 17 May 2019 in relation to the Guarantee Agreements.

After entering into of the Guarantee Agreement B and up to the date of this announcement, Wuxi Guojin obtained loan facilities in an aggregate amount of RMB498,000,000 from Wuxi Tonghui or its associates or from third party(ies) with the consent of Wuxi Tonghui and SY Factoring.

SUPPLEMENTAL GUARANTEE AGREEMENT

The Board hereby announces that on 3 January 2020, SY Factoring entered into the Supplemental Guarantee Agreement with Wuxi Tonghui and Wuxi Guojin pursuant to which the maximum amount of the Secured Obligation B was revised from not exceeding RMB500 million to not exceeding RMB1 billion.

Based on the shareholding interest of Sheng Zhuo in Wuxi Guojin as at the date of this announcement, the maximum liability of SY Factoring under the Guarantee Agreement B (as supplemented by the Supplemental Guarantee Agreement) shall be RMB400 million.

Save as disclosed above, all the terms of the Guarantee Agreement B shall remain materially unchanged and in full force and effect and binding on the parties.

− 2 −

REASONS FOR THE SUPPLEMENTAL GUARANTEE AGREEMENT

The Group is principally engaged in the provision of enterprise financial services offering accounts receivable financing and other related solutions, mainly in the energy, construction and medical sectors in the PRC.

On 12 June 2018, Wuxi Tonghui and Sheng Zhuo (a subsidiary of SY Factoring in which SY Factoring owned 51% equity interest) established a joint venture, Wuxi Guojin, in the PRC to cooperate in the factoring business. Since the amount of loans from Wuxi Tonghui or its associates or from third party(ies) with the consent of Wuxi Tonghui and SY Factoring was reaching the maximum amount under the Guarantee Agreement B, to further finance the business operation of Wuxi Guojin, Wuxi Tonghui, SY Factoring and Wuxi Guojin entered into the Supplemental Guarantee Agreement.

Due to its state-owned enterprise background, Wuxi Tonghui can provide loans to Wuxi Guojin with lower financing costs as compared to the Group. Therefore, Wuxi Guojin may obtain financing from Wuxi Tonghui or its associates directly at a lower interest rate with SY Factoring providing guarantee in proportion to shareholding interest in Wuxi Guojin by Sheng Zhuo. The arrangement also avoids SY Factoring from injecting further capital into Wuxi Guojin. Wuxi Guojin may also obtain loans from a third party such as banks in the PRC and allows the Group to use its capital more flexibly in its factoring business. The Directors note that banks in the PRC may offer lower interest rates if the loans are guaranteed by state-owned enterprises. Wuxi Tonghui as a state-owned enterprise agrees to provide guarantee for the financing of Wuxi Guojin, and in consideration thereof SY Factoring agrees to provide counter guarantee in proportion to the shareholding interest in Wuxi Guojin by Sheng Zhuo.

Given that the Supplemental Guarantee Agreement is being conducted in the ordinary and usual course of business of the Group, is under normal commercial terms, and is beneficial to the Group in the business expansion and establishment of long term business relationship with Wuxi Tonghui, the Directors are of the view that the terms of the Supplemental Guarantee Agreement are fair and reasonable and are in the interests of the Company and Shareholders as a whole.

− 3 −

LISTING RULES IMPLICATIONS

The Directors consider that the Supplemental Guarantee Agreement constitutes material change to the terms of its preceding agreement and the Company shall re-comply with the requirements under Chapter 14 of the Listing Rules. Further, since the Guarantee Agreement A and Guarantee Agreement B (as supplemented by the Supplemental Guarantee Agreement) were entered into with the same parties or their associates within 12 months, the transactions contemplated under the Guarantee Agreement A and Guarantee Agreement B (as supplemented by the Supplemental Guarantee Agreement) shall be aggregated under Rule 14.22 of the Listing Rules.

As the highest applicable percentage ratio for the Company as calculated under Rule

14.07 of the Listing Rules in relation to the provision of guarantee under each of the Guarantee Agreement A and Guarantee Agreement B (as supplemented by the Supplemental Guarantee Agreement) either on standalone basis or on aggregate basis exceeds 5% but is less than 25%, the entering into of each of the Guarantee Agreement A and Guarantee Agreement B (as supplemented by the Supplemental Guarantee Agreement) constitutes a discloseable transaction for the Company under the Listing Rules and is subject to the reporting and announcement requirements.

In addition, as the asset ratio (as defined in the Listing Rules) for the Guarantee Agreement A and Guarantee Agreement B (as supplemented by the Supplemental Guarantee Agreement) exceeds 8%, the Guarantee Agreement A and Guarantee Agreement B (as supplemented by the Supplemental Guarantee Agreement) are subject to the announcement requirements under Rule 13.15 of the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following respective meanings.

"Board"	the board of Directors
"Company"	Sheng Ye Capital Limited, an exempted company
	incorporated in the Cayman Islands with limited
	liability, whose Shares are listed on the Stock
	Exchange (stock code: 6069)
"connected person(s)"	has the meaning ascribed to it under the Listing
	Rules

− 4 −

"Director(s)"	the director(s) of the Company
"Group"	the Company and its subsidiaries
"Guarantee Agreement A"	the guarantee agreement entered into among Wuxi
	Guojin, Wuxi Communications Industry Group Co.
	Ltd. and SY Factoring on 17 May 2019
"Guarantee Agreement B"	the guarantee agreement entered into among Wuxi
	Guojin, Wuxi Tonghui and SY Factoring on 17 May
	2019
"Guarantee Agreements"	collectively, the Guarantee Agreement A and the
	Guarantee Agreement B
"Hong Kong"	the Hong Kong Special Administrative Region of
	the PRC
"Independent Third	the independent third party(ies) who is/are, to the
Party(ies)"	best of the Directors' knowledge, information and
	belief having made all reasonable enquiries,
	independent of and not connected with the
	Company and the connected person(s) (as defined
	in the Listing Rules) of the Company
"Listing Rules"	the Rules Governing the Listing of Securities on
	the Stock Exchange
"PRC"	the People's Republic of China, for the purpose of
	this announcement only, excludes Hong Kong,
	Macau Special Administrative Region of the
	People's Republic of China and Taiwan
"RMB"	Renminbi, the lawful currency of the PRC

− 5 −

"Secured Obligations B"	the secured obligations that (1) if Wuxi Tonghui or
	its associates provides financing to Wuxi Guojin,
	SY Factoring shall provide guarantee to Wuxi
	Tonghui in proportion to the shareholding interest
	in Wuxi Guojin by Sheng Zhuo (being 40% as at
	the date of this announcement); or (2) if Wuxi
	Guojin obtains loan from a third party with the
	consent of Wuxi Tonghui and SY Factoring, and
	Wuxi Tonghui or its associates provides guarantee
	in respect of such loan, SY Factoring shall provide
	a counter guarantee to Wuxi Tonghui in relation to
	the security of the loan in proportion to the
	shareholding interest in Wuxi Guojin by Sheng
	Zhuo (being 40% as at the date of this
	announcement)
"Share(s)"	ordinary share(s) having a par value of HK$0.01
	each in the capital of the Company
"Shareholder(s)"	the holder(s) of Shares
"Sheng Zhuo"	Sheng Zhuo Factoring Limited, a company
	established in the PRC with limited liability and a
	subsidiary of the Group. SY Factoring owned 51%
	equity interest in Sheng Zhuo
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"subsidiary(ies)"	has the meaning ascribed to it under the Listing
	Rules
"Supplemental Guarantee	the supplemental guarantee agreement among SY
Agreement"	Factoring, Wuxi Guojin and Wuxi Tonghui dated 3
	January 2020
"SY Factoring"	盛業商業保理有限公司 (SY Factoring Limited*), a
	company established in the PRC and a subsidiary
	of the Company
"Wuxi Guojin"	無錫國金商業保理有限公司	(Wuxi	Guojin
	Factoring Limited*), a company established in the
	PRC with limited liability which principal business
	is, among other things, commercial factoring. Wuxi

Guojin is owned as to 60% by Wuxi Tonghui and 40% by Sheng Zhuo and is an associated company of the Company

− 6 −

"Wuxi Tonghui"無錫通匯投資有限公司 (Wuxi Tonghui Investment Company Limited*) a subsidiary of 無錫市交通產 業集團有限公司 (Wuxi Communications Industry Group Company Limited*), a state-owned enterprise established in the PRC with limited liability which principal business is, among other things, investment and investment management and is the holder of 60% equity interest in Wuxi Guojin. The identity of the ultimate beneficial owner of Wuxi Tonghui is 無錫市人民政府（Wuxi Municipal Government*). To the best knowledge, information and belief of the Directors having made all reasonable enquiries, the Wuxi Tonghui and its ultimate beneficial owner are Independent Third Parties.

"%"

per cent

By order of the Board

Sheng Ye Capital Limited

Tung Chi Fung

Chairman

Hong Kong, 3 January 2020

As at the date of this announcement, the Board comprises two executive Directors: Mr. Tung Chi Fung

and Mr. Chen Jen-Tse; and four independent non-executive Directors: Mr. Hung Ka Hai Clement, Mr. Loo Yau Soon, Mr. Twoon Wai Mun, Benjamin and Mr. Fong Heng Boo.

The English transliteration of the Chinese name(s) in this announcement, where indicated with "*", is included for information purpose only, and should not be regarded as the official English name(s) of such Chinese name(s).

If there is any inconsistency in this announcement between the Chinese and English versions, the English version shall prevail.

− 7 −