Strategic Cooperation with Kerry Logistics To Capture Opportunities along the “Belt and Road”

D&G Technology Holding Company Limited (“D&G Technology” or the “Group”; Stock code: 1301.HK), a leading medium-to-large scale asphalt mixing plant manufacturer and service provider in China, is pleased to announce that on 4 May 2018, the Group entered into an investment agreement with Kerry Logistics Network Limited (“Kerry Logistics”; stock code: 636.HK), which agreed to transfer approximately 28.57% of Topp Financial Leasing (Shanghai) Co., Ltd (“Target Company”), an indirect wholly-owned subsidiary of the Group ("Target Company") to Kerry Logistics in consideration for a cash payment of RMB1.37million and the assumption by Kerry Logistics of the obligation to contribute the registered capital attributable to such 28.57% equity interests in the amount of RMB20 million (the “Transfer”). In addition, Kerry Logistics agreed to increase the total amount of registered capital of the Target Company by RMB80 million (divided into two traches of RMB30 million and RMB50 million, respectively) (the “Subscription”). Upon completion of the Transfer and the Subscription, the Target Company will be held as to approximately 66.67% by Kerry Logistics and will cease to be a subsidiary of the Group.

Ms. Glendy Choi, CEO and Executive Director of the Group, said, “As a leading medium-to-large scale asphalt mixing plant manufacturer and service provider in China, we strive to expand our projects to countries along the “Belt and Road” by providing one-stop solution including design, manufacturing, sales, technical support, transportation and after-sales services. As a pioneer in the industry, we have our own patented technology to sustain our competitiveness, and also closely monitor the market trend in the favour of environmental protection by launching the nation’s first recycling and high environmental protection configuration asphalt plant and promoting green technology innovation. With our continuous efforts, the Group’s business has been expanding rapidly to the “Belt and Road” countries such as Russia, Kazakhstan, UAE, Saudi Arabia, Afghanistan, Turkmenistan, Mongolia, India, Brunei, Thailand, Malaysia, Indonesia etc. Among those, the “China-Pakistan Economic Corridor” construction project we have won earlier has laid a solid foundation for the development of overseas markets.”

Ms. Glendy Choi continued, “Through the strategic cooperation, the Group expects to generate significant business synergy with Kerry Logistics and enhance the development of its operations in the “Belt and Road” countries. Both Kerry Logistics and the Group consider the “Belt and Road” Initiative as an important strategic focus of their respective businesses and have been establishing and expanding their presence in the Belt and Road countries in recent years. Kerry Logistics’ investment in the Target Company will not only strengthen the capital position of the Group in the development of the finance leasing business, but will also serve as a first step for the two parties to further explore collaboration opportunities under the “Belt and Road” initiative. Looking ahead, D&G Technology will continue to pay close attention to potential strategic cooperation and grasp the opportunities brought by the “One Belt and One Road” initiative to further unleash the synergies between businesses and bring greater returns to the shareholders of the company.”

About D&G Technology Holding Company Limited (Stock Code 1301.HK)

D&G Technology is a leading medium-to-large scale asphalt mixing plant manufacturer and service provider in China. The Group’s core products include conventional hot-mix asphalt mixing plants and hot-mix asphalt mixing recycling plants. Asphalt mixtures produced by these plants are used in construction and maintenance of all grades of roads and highways. The Group also offers asphalt mixing plant customer services including sales of spare parts and components and provision of equipment modification services and leasing of asphalt mixing plants through operating leases. With headquarters in Hong Kong and a production base in Langfang, Hebei, D&G Technology is certified as a high-technology enterprise in Hebei and enjoys a preferential enterprise income tax rate of 15%. Its products are sold to most provinces, municipalities and autonomous regions in China. The Group has asphalt mixing plants projects in a total of 23 countries, including Australia, Russia, India, Thailand and Brunei, etc.

About Kerry Logistics Network Limited (Stock Code 0636.HK)

Kerry Logistics is an Asia-based, global 3PL with the strongest network in Asia. Its core competency is providing highly customised solutions to multinational corporations and international brands to enhance their supply chain efficiency, reduce overall costs and improve response time to market. It currently has more than 1,000 service points in 51 countries and territories, and is managing 52 million sq ft of land and logistics facilities worldwide, providing customers with high reliability and flexibility to support their expansion and long-term growth. Kerry Logistics Network Limited is listed on the Main Board of the Hong Kong Stock Exchange and is a selected Member of the Hang Seng Corporate Sustainability Index Series 2017-2018.

About Topp Financial Leasing (Target Company)

Established in 2016 in the China (Shanghai) Pilot Free Trade Zone, the Company is primarily engaged in the business of finance leasing of asphalt mixing plants and road construction equipment to D&G Technology’s customers in China.