Announcement dated 3 July 2020 - Proposed Subscription of 8,000 Ordinary Shares and Acquisition of 20,000 Ordinary Shares Representing the Entire Equity Interest in HK Aerospace Beidou New Energy Industry Technology Co Ltd ("HK Aerospace") after the Enlargement of the Issued, Fully Diluted and Paid Up Share Capital of HK Aerospace for a Total Purchase Consideration of USD35.0 million

SINO HUA-AN INTERNATIONAL BERHAD ("HUAAN") PROPOSED SUBSCRIPTION OF 8,000 ORDINARY SHARES AND ACQUISITION OF 20,000 ORDINARY SHARES REPRESENTING THE ENTIRE EQUITY INTEREST IN HK AEROSPACE BEIDOU NEW ENERGY INDUSTRY TECHNOLOGY CO LTD ("HK AEROSPACE") AFTER THE ENLARGEMENT OF THE ISSUED, FULLY DILUTED AND PAID UP SHARE CAPITAL OF HK AEROSPACE FOR A TOTAL PURCHASE CONSIDERATION OF USD35.0 MILLION

- REPLY TO QUERY FROM BURSA MALAYSIA SECURITIES BERHAD ("BURSA SECURITIES") DATED 7 JULY 2020

We refer to HUAAN’s announcement dated 3 July 2020 in respect of the aforesaid matter.

In this connection, kindly furnish Bursa Securities with the following additional information for public release:

1)      HK Aerospace’s date of commencement of business operations.

2)      The principal markets for the products and services.

3)      HK Aerospace’s audited financial information (past 3 years or since incorporation, whichever is the later) and the last interim results, if available, stating turnover, profit before tax and profit after tax and non-controlling interest and where there is any material fluctuation in turnover or profits in any of the years, an explanation for the fluctuation.

4)      The basis of arriving at the total purchase consideration of USD35 million.

5)      The justifications for the total purchase consideration of USD35 million.

6)      A statement as to whether the profit guarantee provided is realistic, taking into consideration the historical performance and future prospects of HK Aerospace.

7)      Details of HUAAN’s right of recourse in the event the profit guarantee is not met.

8)      In relation to the liabilities to be assumed, to elaborate/clarify on “except those incurred in the ordinary course of business”.

9)      To state the source of funds for HK Aerospace to purchase the new equipment within 4 months of subscription.

10)    To state whether the new equipment to be purchased will be installed in HK Aerospace or otherwise.

11)    To state the expected production capacity and output of the products before and after the commission of the new equipment.

12)    To state the details of the risks associated with the business and operations of HK Aerospace and its mitigating factors.

13)    To incorporate the prospects of HK Aerospace.

14)    To state the effect on earnings per share for the financial year ending 31 December 2020.

15)    To state whether the Proposals will trigger diversification in operation pursuant to Paragraph 10.13 of the Main Market Listing Requirements

16)    To state the assumptions used in preparing the proforma effects on consolidated net assets and gearing.

Please furnish Bursa Securities with your reply within one (1) market day from the date hereof.

Yours faithfully

Listing

Regulation

c.c.: Market Surveillance Dept., Securities Commission (via fax)