Major transaction finance lease agreement and notice of extraordinary general meeting

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in New Concepts Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

NEW CONCEPTS HOLDINGS LIMITED ௴ ุ ණ ྠ€ છ ٰ Ϟ ࠢ ʮ ̡

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2221)

MAJOR TRANSACTION FINANCE LEASE AGREEMENT

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Capitalised terms used on this cover page shall have the same meanings as defined in this circular, unless the context requires otherwise.

A letter from the Board is set out on pages 6 to 17 of this circular. A notice convening the EGM to be held at Office B, 3/F, Kingston International Centre, 19 Wang Chiu Road, Kowloon Bay, Hong Kong on Wednesday, 23 April 2025 at 9:30 a.m. or any adjournment thereof is set out on pages EGM-1 to EGM-3 of this circular.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, you are advised to read the notice and complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Company's branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited at 17th Floor, Far East Finance Centre, No. 16 Harcourt Road, Hong Kong, being not less than 48 hours (i.e. Monday, 21 April 2025 at 9:30 a.m.) before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM should you so wish.

31 March 2025

In this circular, unless the context otherwise requires, the following words and expressions shall have the following meanings:

''Company'' or ''Guarantor C''

New Concepts Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the issued Shares of which are listed on the Main Board of the Stock Exchange (stock code: 2221)

''Director(s)'' the director(s) of the Company

''EGM''

the extraordinary general meeting of the Company to be convened and held at Office B, 3/F, Kingston International Centre, 19 Wang Chiu Road, Kowloon Bay, Hong Kong on Wednesday, 23 April 2025 at 9:30 a.m. for the purpose of considering and, if thought fit, approving the Finance Lease and Incidental Documentation and the transactions contemplated thereunder

''Finance Lease

Agreement''

the finance lease agreement dated 18 March 2025 and entered into between Jiangsu Leasing and the Lessee, which sets out the rights and obligations of the Lessee and Jiangsu Leasing in relation to the New Finance Lease Arrangement

''Finance Lease and

Incidental

Documentation''

the Finance Lease Agreement, the Transfer Agreement and the agreements thereto, including the Guarantee I, Guarantee II, Guarantee III, Guarantee IV, Assets Charge, Pledge over Account Receivable and Legal Charge

''First Instalment''

has the meaning ascribed thereto in the paragraph headed ''Letter from the Board - TRANSFER AGREEMENT AND FINANCE LEASE AGREEMENT - Purchase Price''

''Group'' the Company and its subsidiaries

''Guarantee I''

a guarantee executed by the Guarantor A in favour of Jiangsu Leasing as security for the due and punctual performance of the Lessee's obligations under the Finance Lease and Incidental Documentation

''Guarantee II''

a guarantee executed by the Guarantor B in favour of Jiangsu Leasing as security for the due and punctual performance of the Lessee's obligations under the Finance Lease and Incidental Documentation

''Guarantee III''

a guarantee executed by the Company in favour of Jiangsu Leasing as security for the due and punctual performance of the Lessee's obligations under the Finance Lease and Incidental Documentation

''Guarantee IV''

a guarantee executed by the Guarantor D in favour of Jiangsu Leasing as security for the due and punctual performance of the Lessee's obligations under the Finance Lease and Incidental Documentation

''Guarantees''

collectively, the Guarantee I, Guarantee II, Guarantee III and Guarantee IV

''Guarantor A''

''Guarantor B''

Fancy Ascent Limited (宜昇有限公司), a company incorporated in Hong Kong with limited liability and an indirect wholly-owned subsidiary of the Company 宜升（天津）環境技術有限公司 (for transliteration purpose only, Yisheng (Tianjin) Environmental Technology Company Limited*), a company established in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company

''Guarantor D''

Mr. Zhu Yongjun, the chairman of the Board and an executive Director

''Guarantors''

collectively, the Guarantor A, the Guarantor B, the Guarantor C and the Guarantor D

''Hong Kong'' the Hong Kong Special Administrative Region of the PRC

''Independent Third

Party''

any person or company and its ultimate beneficial owner(s), to the best of the Directors' knowledge, information and belief having made all reasonable enquiries, is/are not connected person(s) (as defined in the Listing Rules) of the Company and is/are third party(ies) independent of the Company and its connected person(s) in accordance with the Listing Rules

''Jiangsu Leasing''

Jiangsu Financial Leasing Co., Ltd. (江蘇金融租賃股份有限公 司), a state-owned non-banking financial institution established in the PRC with limited liability, the shares of which are listed on the Shanghai Stock Exchange (stock code: 600901)

''Latest Practicable

Date''

28 March 2025, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information for inclusion in this circular

''Leased Assets''

subject leased assets under the Finance Lease Agreement, which comprise certain kitchen waste treatment equipment and facilities of the Lessee situated in Hefei City, Anhui Province, the PRC

*

the English translation of Chinese names or words in this circular, where indicated, is included for information purpose only, and should not be regarded as the official English translation of such Chinese names or words

NEW CONCEPTS HOLDINGS LIMITED ௴ ุ ණ ྠ€ છ ٰ Ϟ ࠢ ʮ ̡

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2221)

MAJOR TRANSACTION FINANCE LEASE ARRANGEMENT

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcement of the Company dated 8 August 2024 in relation to, among other matters, the Previous Finance Lease Arrangements.

On 8 October 2022, the Lessee, being an indirect wholly-owned subsidiary of the Company, and the Previous Lessor entered into the 2022 Previous Finance Leases and Incidental Documentation, pursuant to which the Previous Lessor shall purchase the 2022 Previous Leased Assets for an aggregate purchase price of RMB50,000,000, and lease back the same to the Lessee for a lease consideration comprising the lease principal payment of an aggregate of RMB50,000,000 and other fees and expenses under the 2022 Previous Finance Leases and Incidental Documentation of approximately RMB9,774,000 for a lease period of five (5) years commencing from the payment date of the said consideration.

On 18 July 2024, the Lessee, being an indirect wholly-owned subsidiary of the Company, and the Previous Lessor entered into the 2024 Previous Finance Lease and Incidental Documentation, pursuant to which the Previous Lessor shall purchase the 2024 Previous Leased Assets for the purchase price of RMB15,000,000, and lease back the same to the Lessee for a lease consideration comprising the lease principal payment of RMB15,000,000 and other fees and expenses under the 2024 Previous Finance Lease and Incidental Documentation of approximately RMB3,031,000 for a lease period of five (5) years commencing from the payment date of the said consideration.

In or around February 2025, the Lessee has notified the Previous Lessor of its intention to early terminate the Previous Finance Lease Agreements in accordance with the terms and conditions set out therein. As disclosed in the announcement of the Company dated 8 August 2024 in relation to, among other things, the Previous Finance Lease Arrangements, the Lessee is entitled to terminate the Previous Finance Lease Agreements provided that the Lessee has settled all outstanding amounts due thereunder and a compensation equivalent to 20% of the total outstanding lease interest amount as at the time of early termination, which is expected to be in an amount not exceeding RMB710,000. As at the Latest Practicable Date, the Previous Finance Lease Agreements have not been terminated, the Lessee is in the course of finalising the detailed terms with the Previous Lessor in respect of the early termination of the Previous Finance Lease Agreements, including but not limited to the date of termination, the actual amount of compensation in connection with the early termination and the payment date of the outstanding principal amount and interest payable under the Previous Finance Lease Agreements. Further announcement(s) in respect of the early termination of the Previous Finance Lease Agreements will be made by the Company as and when appropriate in accordance with the requirements of the Listing Rules.

The purpose of this circular is to provide you with, among other things, (i) further information on the Finance Lease and Incidental Documentation and the respective transactions contemplated thereunder; (ii) other information as required under the Listing Rules; and (iii) a notice of the EGM.

NEW FINANCE LEASE ARRANGEMENT

On 18 March 2025, the Lessee, being an indirect wholly-owned subsidiary of the Company, entered into the Transfer Agreement with Jiangsu Leasing, pursuant to which Jiangsu Leasing shall purchase the Leased Assets from the Lessee for the Purchase Price of RMB56,000,000.

On the same date, the Lessee also entered into the Finance Lease Agreement with Jiangsu Leasing, pursuant to which Jiangsu Leasing shall lease back the Leased Assets to the Lessee for a lease consideration comprising the principal amount equivalent to the Purchase Price and the interest accrued thereon at a rate of 6.5067% per annum for a lease period of five (5) years.

As security for the due and punctual performance of the Lessee's obligations under the Finance Lease and Incidental Documentation, (i) Guarantor A executed the Guarantee I; (ii) Guarantor B executed the Guarantee II; (iii) Guarantor C executed the Guarantee III; (iv) Guarantor D executed the Guarantee IV; (v) the Lessee executed the Assets Charge; (vi) the Lessee executed the Pledge over Account Receivable; and (vii) Guarantor A executed the Legal Charge, each in favour of Jiangsu Leasing.

TRANSFER AGREEMENT AND FINANCE LEASE AGREEMENT

The principal terms of the Transfer Agreement and Finance Lease Agreement are as follows:

Transfer Agreement

Finance Lease Agreement

Date:

18 March 2025

18 March 2025

Parties:

• (i) Jiangsu Leasing (as purchaser); and

  • (i) Jiangsu Leasing (as lessor); and

• (ii) Lessee (as vendor) (ii) Lessee (as lessee)

Jiangsu Leasing is a state-owned non-banking financial institution established in the PRC with limited liability and the shares of which are listed on the Shanghai Stock Exchange (stock code: 600901). It is principally engaged in the provision of finance leasing as approved by the China Banking and Insurance Regulatory Commission, with a focus on green energy, high-end equipment, people's livelihood and intelligent connection in the PRC. To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, each of Jiangsu Leasing and its ultimate beneficial owner(s) is an Independent Third Party.

Sale and leaseback of the Leased Assets

The Lessee shall sell and Jiangsu Leasing shall purchase the Leased Assets for the Purchase Price of RMB56,000,000.

Jiangsu Leasing shall then lease back the Leased Assets to the Lessee for its use and possession for a lease period of five (5) years, which is a common and reasonable market practice under the finance lease arrangements in the PRC.

Leased Assets

The Leased Assets comprise certain kitchen waste treatment equipment and facilities of the Lessee situated in Hefei City, Anhui Province, the PRC. As at the Latest Practicable Date, the net book value of the Leased Assets was approximately RMB107,143,000.

The Lessee shall be responsible for keeping the Leased Assets in good condition, and bear any repair, maintenance, and other costs so incurred.