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    1735   KYG2006G1156

CENTRAL HOLDING GROUP CO. LTD.

(1735)
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Central : VOLUNTARY ANNOUNCEMENT IN RELATION TO THE ENTERING INTO OF THE HOTEL MANAGEMENT CONTRACT

08/20/2020 | 08:58am EDT

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.

CENTRAL HOLDING GROUP CO. LTD.

中 環 控 股 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1735)

VOLUNTARY ANNOUNCEMENT

IN RELATION TO THE ENTERING INTO OF

THE HOTEL MANAGEMENT CONTRACT

Draco Capital Limited

Financial Adviser to the Company

This announcement is made by Central Holding Group Co. Ltd. (the ''Company'') on a voluntary basis and does not constitute a notifiable transaction of the Company under Chapter 14 or a connected transaction of the Company under Chapter 14A of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ''Listing Rules'').

THE HOTEL MANAGEMENT CONTRACT

The board (the ''Board'') of directors (the ''Directors'') of the Company is pleased to announce that on 20 August 2020 (after trading hours), Zhejiang Xintianpu Agricultural Travel Development Co. Ltd* (浙江新田鋪農旅開發有限公司) (''Zhejiang Xintianpu''), an indirect wholly-owned subsidiary of the Company and Zhejiang Guoda Leidisen Restaurant Management Co.,Ltd. (浙江國大雷迪森酒店管理有限公司) (the ''Hotel Manager''), entered into a hotel management contract (the ''Management Contract'') in relation to the provision of hotel management services to Quzhou Zhonghuan Landison Retreat Hotel* (衢 州中環雷迪森庄園酒店) (the ''Hotel'') which is owned and under development by Zhejiang Xintianpu.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, as at the date of this announcement, the Hotel Manager and its ultimate beneficial owners is an Independent Third Party to the Company and its connected persons (as defined in the Listing Rules).

- 1 -

The principal terms of the Management Contract:

Parties

:

(i)

Zhejiang Xintianpu

(ii)

The Hotel Manager

Provision of hotel

:

Zhejiang Xintianpu shall appoint the Hotel Manager to provide

management

hotel management services to manage and operate the Hotel

services

with a view to establish the Hotel into a cultural themed resort

hotel with the ''LANDISON Hotels & Resorts'' brand (雷迪森

度假品牌) in accordance with the terms of the Management

Contract.

Term

:

10 years starting from the soft opening day (the ''Soft Opening

Day'') (being the day following the construction period which is

expected to be 2.5 years from the date of the Management

Contract (the ''Construction Period''))

Hotel

:

(i)

A fixed consulting management fee of RMB800,000 for the

management

Construction Period shall be charged by the Hotel Manager

Service Fee

to Zhejiang Xintianpu, of which

- 50% shall be payable within 7 business days from the

date of the signing of the Management Contract;

- 30% shall be payable within 7 business days from 12

months after the date of the signing of the Management

Contract;

- 20% shall be payable within 7 business days from the

Soft Opening Day.

(ii)

The basic management fee of a percentage of the revenue

derived by the Hotel per month shall be charged by the

Hotel Manager to Zhejiang Xintianpu and payable within

10 business days from the end of each month.

- 2 -

(iii) The GOP Ratio bonus management fee, which shall be

calculated based on the bonus percentage of the annual

gross operating profit (''GOP'') of the Hotel, which shall

be payable within 25 days of the first month of the

following year.

Other auxiliary

:

LANDISON central reservation system, ''YEARNING CLUB''

services

membership program, hotel management system, sales channels

via the Hotel Manager online flag stores and room reservation

channels

INFORMATION ABOUT ZHEJIANG XINTIANPU AND THE HOTEL MANAGER

Zhejiang Xintianpu is a company corporated in the People's Republic of China (the ''PRC'') in October 2019 with limited liability and an indirect wholly-owned subsidiary of the Company. It is principally engaged in the agricultural tourism development, research and development and sales of tourist products, tourist attraction development, construction and development, property development, residential construction and landscaping construction.

The Hotel Manager is a company incorporated in the PRC in October 2005 with limited liability and is principally engaged in the provision of hotel management, hospitality advisory service, property management and related consulting services. The Hotel Manager has established a well-known hotel and tourism group with the brands of ''LANDISON'' and ''YEARNING CLUB'' and is currently managing more than 100 hotel and tourism projects with more than 22,000 beds and providing advisory and consulting services to more than 20 hospitality projects in the PRC.

REASONS FOR ENTERING INTO THE CONTRACT

The Company always strives to improve the Company's business operations and financial position by proactively seeking business opportunities that would diversify the Company's existing business portfolio, broaden its source of income and enhance value to the shareholders. The Directors considers that entering into the Management Contract will enable the Company and the Hotel Manager to seize this cooperation opportunity and jointly develop the Hotel and its project zone into properties with the theme of ''Rural and Wellness Complex'' by leveraging the Hotel Manager's extensive experience in the hotel industry with the well-known brands of ''LANDISON'' and ''YEARNING CLUB'' which have been established for years and expertise in the development, management and operation of hotel projects.

The Directors are of the view that the entering into of the Management Contract is in the ordinary and usual course of business of the Company and considers that the terms of the Management Contract are fair and reasonable and in the interests of the Company and the Shareholders as a whole and have been negotiated on an arm's length basis and on normal commercial terms.

- 3 -

The Board wishes to state that no forecast or prediction of the profits of the Group has been made with regard to the Management Contract.

By Order of the Board

Central Holding Group Co. Ltd.

Yu Zhuyun

Chairman, Chief Executive Officer and

Executive Director

Hong Kong, 20 August 2020

As at the date of this announcement, the executive Directors are Mr. Yu Zhuyun (Chairman and Chief Executive Officer) and Mr. Li Menglin; the non-executive Directors are Mr. Qiao Xiaoge, Mr. Gao Jian and Ms. Zhu Yujuan; and the independent non-executive Directors are Dr. Li David Xianglin, Mr. Wang Wenxing and Dr. Zhou Chunsheng.

- 4 -

Disclaimer

Central Holding Group Co. Ltd. published this content on 20 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 August 2020 12:58:05 UTC


© Publicnow 2020
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Sales 2020 498 M 64,1 M 64,1 M
Net income 2020 -1,00 M -0,13 M -0,13 M
Net cash 2020 114 M 14,6 M 14,6 M
P/E ratio 2020 -3 810x
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Zhu Yun Yu Chairman & Chief Executive Officer
Kean Tat Che Chief Financial Officer & Vice President
Wong Kwong Ng Technical Director
Xiang Lin Li Independent Non-Executive Director
Chun Sheng Zhou Independent Non-Executive Director