FDG Kinetic : Announcements and Notices - Voluntary Announcement - Business Update

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FDG Kinetic Limited 五龍動力有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 378)

VOLUNTARY ANNOUNCEMENT -

BUSINESS UPDATE

This is a voluntary announcement of FDG Kinetic Limited (the "Company").

Reference is made to the announcement of the Company dated 26 March 2018 (the "Announcement") in respect of the agreement entered into between FDG Kinetic (Chongqing), an indirect wholly owned subsidiary of the Company, and the Customer, whereby the Customer engaged FDG Kinetic (Chongqing) to use its production lines A1, A2, A3 and A4 to process and produce the Ternary Products during the period from 26 March 2018 to 31 December 2018. Unless otherwise defined herein, terms used herein shall have the same meanings as those defined in the Announcement.

Following completion of the construction of the new production lines A5 and A6 of FDG Kinetic (Chongqing) in December 2018, FDG Kinetic (Chongqing) and the Customer entered into a new agreement on 2 January 2019 (the "New Agreement"), whereby the Customer further engaged FDG Kinetic (Chongqing) to process and produce the Ternary Products using its six production lines.

The principal terms of the New Agreement are set out below.

Agreement	: From 1 January 2019 to 31 December 2019
Period
Form of	: FDG Kinetic (Chongqing) uses its production lines A1, A2, A3, A4,
Production	A5 and A6 to produce the Ternary Products in accordance with the
ternary product standards provided by the Customer

Guaranteed Quantity

: (i)Production lines A1 and A2 (with total production capacity of approximately 180 tonnes per month):

Total processing and production quantity of 180 tonnes per month

• (ii) Production lines A3 and A4 (with total production capacity of approximately 220 tonnes per month):

  Total processing and production quantity of 220 tonnes per month

• (iii) Production lines A5 and A6 (with total production capacity of approximately 120 tonnes per month):

  Confirmation of the total processing and production quantity per month is subject to completion of the prescribed tests by the Customer

Termination of the New Agreement

: Either party can terminate the New Agreement by giving written notice three months in advance

Subject to passing of the prescribed tests by production lines A5 and A6, it is estimated that all six production lines will operate at almost full capacity. The board of directors of the Company believes that entering into the New Agreement will provide the Group with stable source of income, and is in the interest of the Group and the shareholders of the Company as a whole.

On behalf of the Board

FDG Kinetic Limited

Jaime Che Executive Director

Hong Kong, 2 January 2019

As of the date of this announcement, the board of directors of the Company comprises Mr. Cao Zhong (Chairman), Mr. Miao Zhenguo (Chief Executive Officer) and Mr. Jaime Che as executive directors; and Mr. Hung Chi Yuen Andrew, Professor Sit Fung Shuen Victor and Mr. Toh Hock Ghim as independent non-executive directors.

Website:http://www.fdgkinetic.com