Proposed Acquisition Of 20,000 Ordinary Shares Representing The Entire Equity Interest In Hk Aerospace Beidou New Energy Industry Technology Co Ltd ("Hk Aerospace") For A Total Purchase Consideration Of Usd25.0 Million

SINO HUA-AN INTERNATIONAL BERHAD ("HUAAN") PROPOSED ACQUISITION OF 20,000 ORDINARY SHARES REPRESENTING THE ENTIRE EQUITY INTEREST IN HK AEROSPACE FOR A TOTAL PURCHASE CONSIDERATION OF USD25.0 MILLION - REPLY TO QUERY FROM BURSA MALAYSIA SECURITIES BERHAD ("BURSA SECURITIES") DATED 11 AUGUST 2020

We refer to HUAAN’s announcement dated 7 August 2020 in respect of the aforesaid matter.

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

1)      To state the reason(s) for the termination of the subscription agreement dated 3 July 2020.

2)      HK Aerospace and its subsidiaries’ date of commencement of business operations.

3)      To state the estimated total cost for the purchase, installation and commissioning of the new equipment and the source of fund.

4)       To quantify the estimated financial commitment from HUAAN to purchase the new equipment.

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

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

7)      To  state  whether  HK  Aerospace has control over Guangxi Aerospace Beidou New Energy Industry Technology Co Ltd.

8)      The principal markets for the products and services.

9)      HK Aerospace Group’s audited financial information (past 3 years or since incorporation, whichever is the later) and the latest interim results, if available, stating the turnover, profit before tax, 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.

10)    The basis of arriving at the total purchase consideration of USD25 million.

11)    The justifications for the total purchase consideration of USD25 million.

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

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

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

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

16)    To incorporate the prospects of HK Aerospace Group.

17)    To  state  the  effect  on  earnings per share for the financial year ending 31 December 2020 and 2021.

18)    To state whether the proposed acquisition of HK Aerospace will trigger diversification in operations pursuant to Paragraph 10.13 of the Main Market Listing Requirements

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

Yours faithfully

Listing

Regulation

cc: Market Surveillance Dept.  Securities Commission (via fax)