STRATEGIC COOPERATION MEMORANDUM IN RELATION TO THE POSSIBLE ACQUISITION OF INTERNET EDUCATION BUSINESS IN THE PRC

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1 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. (Incorporated in Bermuda with limited liability) (Stock Code: 559) STRATEGIC COOPERATION MEMORANDUM IN RELATION TO THE POSSIBLE ACQUISITION OF INTERNET EDUCATION BUSINESS IN THE PRC This announcement is made by the Company pursuant to Rule of the Listing Rules and the inside information provisions under Part XIVA of the SFO. The Board announces that on 5 July 2016 (after trading hours), the Company and the Vendors entered into a non-legally binding Memorandum in relation to the Possible Acquisition. Pursuant to the Memorandum, the Company (or its nominee) intends to acquire not less than 90% of the issued share capital of the Target Company such that the Company will indirectly hold not less than 51% equity interest in Zhongshan Bei Dou. The consideration for the Possible Acquisition will be subject to further negotiations and will be determined upon signing of the Formal Agreement. The Target Group is principally engaged in operating a system platform for the development of Bei Dou + Internet + Education business model in the PRC. The Board wishes to emphasise that no binding agreement in relation to the Possible Acquisition has been entered into by the Vendors and the Company as at the date of this announcement. As such, the Possible Acquisition may or may not proceed. Shareholders and investors are urged to exercise caution when dealing in the securities of the Company. Further announcement in respect of the Possible Acquisition will be made by the Company in compliance with the Listing Rules as and when appropriate. This announcement is made by the Company pursuant to Rule of the Listing Rules and the inside information provisions under Part XIVA of the SFO. The Board announces that on 5 July 2016 (after trading hours), the Company and the Vendors entered into a non-legally binding Memorandum in relation to the Possible Acquisition. 1

2 THE MEMORANDUM Date: 5 July 2016 (after trading hours) Parties: (1) Mr. Ng Victor; (2) Mr. Zheng Gang; and (3) the Company. Subject matter Pursuant to the Memorandum, the Company (or its nominee) intends to acquire not less than 90% of the issued share capital of the Target Company such that the Company will indirectly hold not less than 51% equity interest in Zhongshan Bei Dou. The consideration for the Possible Acquisition will be subject to further negotiations and will be determined upon signing of the Formal Agreement. Formal Agreement Pursuant to the Memorandum, the Vendors and the Company shall negotiate in good faith towards one another in ensuring that the Formal Agreement be entered into as soon as possible and in any event no later than 30 September 2016 or such later date as the Company and the Vendors may agree. The Formal Agreement shall contain, including but not limited to representations, warranties, undertaking and indemnifications which are generally given by vendor(s) under the transactions similar to the Possible Acquisition. If no Formal Agreement is entered into on or before 30 September 2016 (or such later date as the Company and the Vendors may agree), the Memorandum shall lapse. Due diligence The Company shall and shall procure that its advisers and agents shall, forthwith upon the signing of the Memorandum, conduct such review of the assets, liabilities, operations and affairs of the Target Group as it may consider appropriate and the Vendors shall provide and procure the Target Group and their agents to provide such assistance as the Company and its advisers and agents may require in connection with such review and shall procure that such due diligence review shall be completed on or before 30 September 2016 (or such later date as the Vendors and the Company may agree). Exclusivity Pursuant to the Memorandum, on or before 30 September 2016, the Vendors will not, and will procure that the Target Company and their respective directors, officers, employees, representatives and agents will not, directly or indirectly, (i) solicit, initiate or encourage inquiries or offers from, or (ii) initiate the provision of or furnish any information to, or (iii) enter into any agreement or letter of intent or memorandum of understanding with, any person or entity other than the Company with respect to the Possible Acquisition. 2

3 INFORMATION OF THE TARGET GROUP The Target Company was incorporated in Hong Kong with limited liability and is beneficially owned as to 50% by Mr. Ng Victor and 50% by Mr. Zheng Gang. To the best of the Directors knowledge, information and belief, having made all reasonable enquiries, each of the Vendors is an Independent Third Party. The Target Company is the beneficial owner of 70% equity interest of Bei Dou Shenzhen, which in turn owns 85% equity interest of Zhongshan Bei Dou. The Target Group is principally engaged in operating a system platform for the development of Bei Dou + Internet + Education in the PRC. Zhongshan Bei Dou was appointed as the sole operator of a personal safety system ( 人 身 安 全 保 障 系 統 ) under the demonstration construction project namely Zhongshan Bei Dou City ( 中 山 北 斗 城 市 建 設 示 範 項 目 ) by the General Armament Department of Central Military Commission ( 中 央 軍 委 總 裝 備 部 ) and the Guangdong Provincial Government ( 廣 東 省 政 府 ) and obtained the franchise of Bei Dou Civil Operation Services Branch Qualification ( 北 斗 民 用 分 理 運 營 服 務 資 質 ) in Guangdong, Guangxi, Hunan, Fujian and Hainan from 北 斗 九 億 信 息 科 技 產 業 ( 北 京 ) 有 限 公 司 (Bei Dou Jiuyi Information Technology Industry (Beijing) Limited*). The self-developed educational information exchange platform ( 學 互 通 ) has been approved by Zhongshan Municipal Bureau of Education ( 中 山 市 政 府 教 育 局 ) for promotion to primary school students in Zhongshan City. Currently, Zhongshan Bei Dou has signed cooperation agreements with three educational institutions to provide free home-school platform and signed strategic cooperation agreements with Beijing Normal University, Zhuhai ( 北 京 師 範 大 學 珠 海 分 校 ) and Aerospace Feeling Measuring & Control Technology Co., Ltd. ( 航 天 飛 鄰 測 控 技 術 公 司 ) to further develop its e-education business. REASONS FOR THE POSSIBLE ACQUISITION The Group is principally engaged in the businesses of manufacturing and trading of electric cycles, trading and distribution of liquor and wine, provision of money lending services and investments in listed securities. Following the abolishment of the One-child policy in the PRC in early 2016, the birth rate is expected to increase in the coming years. Due to higher education level and improved living standard, Chinese parents have become more willing to spend money on their children, especially on education and safety wise, which brings about investment opportunities in the development of education e-platforms. The Board foresees a good prospect with high and sustainable growth in the internet education sector. In consideration of the above, the Directors are of the view that the terms of the Memorandum are fair and reasonable and the Possible Acquisition is in the interests of the Company and Shareholders as a whole. GENERAL The Memorandum does not constitute legally-binding commitment in respect of the Possible Acquisition. The Possible Acquisition is subject to, among others, the execution and completion of the Formal Agreement. 3

4 The Board wishes to emphasise that no binding agreement in relation to the Possible Acquisition has been entered into by the Vendors and the Company as at the date of this announcement. As such, the Possible Acquisition may or may not proceed. Shareholders and investors are urged to exercise caution when dealing in the securities of the Company. Further announcement in respect of the Possible Acquisition will be made by the Company in compliance with the Listing Rules as and when appropriate. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings: Bei Dou Shenzhen Board Company connected person Director(s) Formal Agreement Group Hong Kong Independent Third Party Listing Rules Memorandum 北 斗 互 聯 網 教 育 科 技 ( 深 圳 ) 有 限 公 司 (Bei Dou Internet Education Technology (Shenzhen) Limited*), a company established in the PRC with limited liability, and is owned as to 70% and 30% by the Target Company and 中 山 北 斗 資 產 管 理 有 限 公 司 (Zhongshan Bei Dou Asset Management Limited*) respectively as at the date of this announcement the board of Directors DeTai New Energy Group Limited, a company incorporated in Bermuda with limited liability whose issued Shares are listed on the main board of the Stock Exchange has the meaning ascribed to it under the Listing Rules the director(s) of the Company the formal sale and purchase agreement to be entered into between the Vendors and the Company in relation to the Possible Acquisition the Company and its subsidiaries the Hong Kong Special Administrative Region of the PRC third party independent of and not connected with the Company and its connected persons the Rules Governing the Listing of Securities on the Stock Exchange the non-legally binding strategic cooperation memorandum of understanding dated 5 July 2016 and entered into between the Vendors and the Company setting out the preliminary understanding in relation to the Possible Acquisition 4

5 Possible Acquisition PRC SFO Share(s) Shareholder(s) Stock Exchange Target Company Target Group Vendor(s) Zhongshan Bei Dou HK$ the possible acquisition by the Company of not less than 90% equity interest of the Target Company as contemplated under the Memorandum the People s Republic of China, which for the purposes of this announcement excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) ordinary share(s) of HK$0.05 each in the share capital of the Company the holder(s) of issued Share(s) The Stock Exchange of Hong Kong Limited China Bei Dou Communications Technology Group Limited ( 中 國 北 斗 通 信 科 技 集 團 有 限 公 司 ), a company incorporated in Hong Kong with limited liability, which is owned as to 50% by each of the Vendors as at the date of this announcement the Target Company, Bei Dou Shenzhen and Zhongshan Bei Dou Mr. Ng Victor and Mr. Zheng Gang, as at the date of this announcement, each of them directly holds 50% of the issued share capital of the Target Company 中 山 北 斗 教 育 科 技 有 限 公 司 (Zhongshan Bei Dou Education Technology Limited*), a company established in the PRC with limited liability, and is owned as to 85% and 15% by Bei Dou Shenzhen and Mr. Lin Keliang respectively as at the date of this announcement Hong Kong dollars, the lawful currency for the time being of Hong Kong % per cent. * for identification purposes only By order of the Board DeTai New Energy Group Limited Wong Hin Shek Chairman and Executive Director Hong Kong, 5 July

6 As at the date of this announcement, the executive Directors are Mr. Wong Hin Shek and Mr. Chi Chi Hung, Kenneth; the non-executive Director is Mr. Chui Kwong Kau; and the independent non-executive Directors are Mr. Chiu Wai On, Mr. Man Kwok Leung and Dr. Wong Yun Kuen. 6