INTRODUCTION OF LISTING ON THE GEM OF THE

INTRODUCTION OF LISTING ON THE GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (“SEHK”) July 2018

LISTING REQUIREMENTS FOR GEM Cash Flow • Positive cash flow generated from operating activities in ordinary and usual course of business before changes in working capital and taxes paid of at least HK$30 million in aggregate for 2 financial years immediately preceding the issue of listing document [GEM LR 11. 12 A(1)] Market Capitalisation • At least HK$150 million at the time of listing [GEM LR 11. 23(6)] Mandatory Public Offering mechanism • Must include an offering to public of not less than 10% of all securities offered [Practice Note 6 item #4] Minimum Public float • At least 25% of the issuer’s total issued share capital or a minimum of HK$45 million are held by the public at all times [GEM LR 11. 23(9)] • Note: SEHK may accept lower public float between 15% and 25% for applicants with expected market capitalization of HK$10 billion, provided that the number of shares concerned and their distribution would enable the market operate properly with a lower percentage. [GEM LR 11. 23(10)] Number of shareholders • • Minimum 100 shareholders [GEM LR 11. 23(2)(b)] Not more than 50% of securities in public hands at the time of listing can be beneficially owned by 3 largest public shareholders [GEM LR 11. 23(8)] Management ownership and control • Continuity of ownership and control for the full financial year (immediately before issuing the listing document and up until the listing date) [GEM LR 11. 12 A(2)] Management continuity for at least 2 full financial years (immediately before issuing the listing document and up until the listing date) [GEM LR 11. 12 A(3)] •

LISTING REQUIREMENTS FOR GEM

SUITABILITY FOR LISTING ON GEM The following types of applicants which have been prescribed by SEHK as unsuitable are: (HKEX-GL 68 -13) a company which fails to comply with all applicable laws and regulations and where such non -compliance may affect the validity of the business; a company which is unable to carry on its business independently; a company whose business is heavily reliant on transactions with connected persons or related parties during the track record period and after listing; and a company whose assets consist wholly or substantially of cash or short-dated securities, e. g. , bills, short-term bonds or other investments with a maturity term of less than a year. (Note: This restriction is not applied to investment companies. GEM LR 11. 06)

LISTING PROCESS Step 1: Listing Preparation Evaluate the listing feasibility of the new applicant, Appointment of sponsor and other professional parties, confirmation on the listing group structure, and formulation of the listing timetable Step 2: Documents Preparation Conducting due diligence on business operation(s), legal and financial aspects, drafting prospectus, auditing work for 2 recent financial years, assets valuation, preparation of internal control report, 5 A Documents preparation, Drafting underwriting agreement Step 3: Listing Application Submit 5 A Listing Application Form, Reply SEHK & SFC queries, obtain listing approval upon listing committee hearing and select underwriting team members (marketing activities begin)

LISTING PROCESS Step 4: Share Offer Prepare marketing materials, research report, discuss & liaise with analysts and underwriting team, preroadshow, issue prospectus, pricing and decision on placement list, end of marketing activities, listing (Official trading of company’s shares commences) LISTING OF SHARES

MAJOR PROFESSIONAL PARTIES INVOLVED IN LISTING Parties Duties Sponsor • • Legal Advisers to the Company • • • Responsible for the submission of the listing application to the SEHK and the overall coordination Conducting due diligence Addressing all matters raised by the SEHK in relation to listing Accompanying the directors of the company to meetings with the SEHK Advising and guiding the directors through the listing process Advising on the corporate structure and steps required to effect a group reorganisation when necessary Drafting and preparing the listing documents Assisting the company in drafting responses to queries from the SEHK Advising on the negotiation of the various agreements entered into by the company with the banks and other parties Legal Advisers to the Sponsor • • • Drafting the underwriting agreements Conducting verification on the listing Assist the sponsor to conduct due diligence Reporting Accountants • Preparing accountants’ report and the unaudited pro forma financial information included in prospectus

MAJOR PROFESSIONAL PARTIES INVOLVED IN LISTING Parties Duties Financial Printer • • • Editing and printing prospectus and application forms Coordinating the translation of the prospectus into Chinese Providing conference rooms and business services to the working group during the drafting process Property Valuer • Determining the valuations of and providing information on certain property interests of the applicant for inclusion in the prospectus Internal Control Consultant • Conducting internal control reviews of the company’s internal control systems and procedures and providing recommendations Assisting the sponsor in assessing the company’s ability to meet the internal control requirements under Listing Rules • Independent Industry Consultant • Conducting market research study

IPO VETTING PROCEDURES (HKEX- GL 61 -13, APPENDIX(2)

POST-IPO OBLIGATIONS General obligations of immediate disclosure of price-sensitive information Answering queries made of the Company by the SEHK concerning unusual movements in the price or trading volume of the listed securities or any other matters Compliance with the prescribed minimum percentage of listed securities in public hands at all times Pre-emptive rights, being circumstances under which the directors of the listed company must obtain the consent of shareholders in general meeting prior to allotment, issue or grant of securities Arrangement of annual general meetings and board meetings Disclosure of financial information Inform the SEHK for any proposed changes of the Company’s Articles of Association, changes in directorate or supervisory committee, change in the rights attaching to any class of listed securities, change in its auditors or financial year and change in its secretary or registered address Submission of announcements, circulars or other documents to the SEHK for review Arrangement of trading and settlement Disclosure of directors’ dealings, service contracts, nominations and contact information.

POST-IPO OBLIGATIONS Obligations Details Appointment of Compliance adviser • Appointment of a compliance adviser acceptable to the SEHK for the period commencing on its listing date and ending on the date on which the listed issuer complies LR 18. 03 in respect of the publication of financial results for the second full financial years after listing. (GEM Listing Rules 6 A. 19) Fundamental change in the business nature • Upon the first 12 months after listing, a company may not effect any acquisition or disposal resulting in fundamental change in its principal business activities described in the prospectus. (GEM LR 19. 88) Note: the SEHK may grant a waiver from its requirements if the circumstances are exceptional and prior independent shareholders’ approval is obtained. (Controlling shareholders are not allowed to vote) (Please refer to GEM Listing Rule 19. 89 and 19. 90 for details) • Financial Disclosure • • Listed Companies are required to publish their financial results on a timely basis The SEHK will normally require suspension of trading in a Company’s securities if it fails to publish financial information according to the reporting timeframe as below: GEM issuers must publish: a) preliminary annual results not later than 3 months after the end of the financial years; and b) half-yearly results not later than 45 days after the end of that period of 6 months; and c) quarterly results not later than 45 days after the end of first 3 months and 9 months periods of the financial year (Please refer to GEM Listing Rules 18. 49, 18. 78 and 18. 79 for details)

POST-IPO OBLIGATIONS Obligations Details Lockups • A controlling shareholder at the time of listing cannot dispose of his/her shares for a period of 12 months from the date of listing and; • A controlling shareholder cannot, for the further period of 12 months, dispose any shares that would result in such person ceasing to be controlling shareholder of the company. (Please refer to GEM Listing Rule 13. 16 A) Restrictions on the • SEHK does not normally permit further issues of shares or securities convertible issue of new shares into equity securities of a listed issuer within 6 months of listing save for a number of exceptions. (Please refer to GEM Listing Rule 17. 29)