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I.ODICIDG LONKING HOLDINGS LIMITED Jft lllli mtfim*itJ*

(lncorporated in the Cayman Islands with limited liability)

(Stock code: 3339)

RENEWAL OF

CONTINUING CONNECTED TRANSACTIONS

WITH HERKULES (SHANGHAI) AUTOMATION EQUIPMENT CO. LTD.

References are made to the announcements of the Company dated 11 Aprii 2012 and 31

December 2012 in reiation to the continuing connected transactions contempiated under the

Existing Master Purchase Agreement.

As the Existing Master Purchase Agreement will expire on 31 December 2013, the Company and Herkuies on 31 December 2013 entered into the Renewed Master Purchase Agreement to renew the terms of the Existing Master Purchase Agreement for a period of one year commencing from l January 2014 and ending on 31 December 2014.

As at the date of this announcement, as Herkuies is a company wholly owned by the son-in-Iaw of Mr. Li San Yim, an executive Director, the chairman and the controlling sharehoider of the Company, it is an associate of Mr. Li San Yim. Thus, Herkuies is a connected person of the Company under the Listing Ruies.

As each of the applicabie percentage ratios (other than the profits ratio) in respect of the continuing connected transactions contempiated under the Renewed Master Purchase Agreement is on an annuai basis expected to be more than 0.1 % but Iess than 5%, such transactions constitute continuing connected transactions under Ruie 14A.34 of the Listing Ruies and are thus subject to the reporting and announcement requirements set out in Ruies 14A.45 to 14A.47 of the Listing Ruies, the annuai review requirements set out in Ruies 14A.37 to 14A.40 of the Listing Ruies and the requirements set out in Ruies 14A.35(1) and 14A.35(2) of the Listing Ruies, but are exempt from the independent sharehoiders' approvai requirements under Chapter 14A of the Listing Ruies.

* Far identification purposes only

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References are made to the announcement of the Company dated 11 April 2012 and 31 December
2012 (the "Announcements") in relation to the continuing connected transactions contemplated under the Existing Master Purchase Agreement. Capitalized terms used in this announcement shall have the same meanings as those defined in the Announcements unless the context otherwise requires.

BACKGROUND

On 31 December 2012, the Company and Herkules entered into the Existing Master Purchase Agreement, pursuant to which the Group agreed to purchase the Automation Robot Products from Herkules from time to time for a term commencing from 1 January 2013 and ending on 31 December
2013.
The Existing Master Purchase Agreement will expire on 31 December 2013. RENEWAL OF THE EXISTING MASTER PURCHASE AGREEMENT The Renewed Master Purchase Agreement
Date : 31 December 2013
Parties : (1) the Company, as purchaser
(2) Herkules, as supplier
Subject : Pursuant to the Renewed Master Purchase Agreement, the Company will purchase the Automation Robot Products from Herkules from time to time during the term of the Renewed Master Purchase Agreement.
Term : The Renewed Master Purchase Agreement will take effect from 1 January 2014 and expire on 31 December 2014.
Price : The purchase price of the Automation Robot Products will be determined on arm's length negotiations between the Group and Herkules, based on the technical characteristics and configuration of the Group's products and will be on terms no less favourable to the Company than terms available from independent third parties.

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Payment terms : The purchase price of the Automation Robots Products shall be settled in cash or bank acceptance bills, and payable by the Company in the following manner:
(i) the first 30% of the aggregate purchase price shall be prepaid within 7 business days after signing the contract;
(ii) the second 30% of the aggregate purchase price shall be paid within 7 business days after receiving a written notice of delivery from Herkules, which shall arrange delivery on the 7th business day after receiving such
30% of the aggregate purchase price;
(iii) after installation and commissioning of the equipment and the acceptance and confirmation by both parties, another 35% of the aggregate purchase price shall be paid upon presentation of the 17% full VAT invoice; and
(iv) the remaining 5% shall be paid up within 7 business days after 1-year guarantee period expires.

Historical transaction records

For the year ended 31 December 2012 and the eleven months ended on 30 November 2013, the aggregate purchase amount (including value added tax) paid by the Group to Herkules for the purchase of the Automation Robot Products amounted to approximately RMB16 million and RMB2.3 million (equivalent to approximately HK$21 million and HK$2.9 million), respectively.

Annual cap

The Directors estimate that the aggregate purchase amount of the Automation Robot Products to be paid by the Group to Herkules pursuant to the transactions under the Renewed Master Purchase Agreement for the financial year ending 31 December 2014 will not exceed RMB35 million (including value added tax) (equivalent to approximately HK$45 million). The annual cap was determined by the Company with reference to the actual amount of Automation Robot Products purchased for the year ended 31 December 2012 and the eleven months ended on 30 November 2013 and the anticipated demand of the Automation Robot Products by the Company for the year ending
31 December 2014.

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REASONS FOR AND BENEFITS OF ENTERING INTO THE RENEWED MASTER PURCHASE AGREEMENT

The Group has been sourcing various products from Herkules since 1 January 2012. Given that Herkules will be able to offer the Automation Robot Products on terms no less favourable to the Company than terms available from independent third parties, the transactions contemplated under the Renewed Master Purchase Agreement are beneficial to the Company and its shareholders as a whole, as it is expected to widen the applicable range and raise the technical standard of the robot workstation, and enhance the competitive strength of the Group within the industry and its operational efficiency.

IMPLICATIONS UNDER THE LISTING RULES

As at the date of this announcement, as Herkules is a company wholly owned by the son-in-law of Mr. Li San Yim, an executive Director, the chairman and the controlling shareholder of the Company, it is an associate of Mr. Li San Yim. Thus, Herkules is a connected person of the Company under the Listing Rules.
As each of the applicable percentage ratios (other than the profits ratio) in respect of the continuing connected transactions contemplated under the Renewed Master Purchase Agreement is on an annual basis expected to be more than 0.1% but less than 5%, such transactions constitute continuing connected transactions under Rule 14A.34 of the Listing Rules and are thus subject to the reporting and announcement requirements set out in Rules 14A.45 to 14A.47 of the Listing Rules, the annual review requirements set out in Rules 14A.37 to 14A.40 of the Listing Rules and the requirements set out in Rules 14A.35(1) and 14A.35(2) of the Listing Rules, but are exempt from the independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
The Directors (including the independent non-executive Directors) consider that the transactions under the Renewed Master Purchase Agreement are entered into in the usual and ordinary course of business of the Group and the terms of the transactions have been negotiated and will be conducted on an arm's length basis and on normal commercial terms between the Company and Herkules. The Directors (including the independent non-executive Directors) are of the view that as far as the Company and the Shareholders are concerned, the transactions under the Renewed Master Purchase Agreement and the terms thereof are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Mr. Li San Yim and Ms. Ngai Ngan Yin, the spouse of Mr. Li San Yim, are considered to have a material interest in the transaction contemplated under the Renewed Master Purchase Agreement, and accordingly each of Mr. Li San Yim and Ms. Ngai Ngan Yin had abstained from voting on the resolutions of the Board approving the same.

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GENERAL

The Company is principally engaged in the manufacture of wheel loaders and other infrastructure machinery in the PRC. It also manufactures axles and transmission, which are critical components for wheel loaders.
Herkules is principally engaged in the research, development, production, and processing in industrial automation equipment, industrial robot systems, and components of the above products, and the sales of self-produced products.

DEFINITIONS

In this announcement, the following expressions shall have the meanings set out below unless the context requires otherwise:
"associate" has the meaning as given to it in the Listing Rules
"Automation Robot Products" non-standard and custom-made industrial robot welding stations together with its components, mainly used for the automated welding of the structural parts of the engineering machinery products
"Board" the board of Directors
"Company" Lonking Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the main board of the Stock Exchange
"connected person" has the meaning as given to it under the Listing Rules "controlling shareholder" has the meaning as given to it under the Listing Rules "Director(s)" the director(s) of the Company
"Existing Master Purchase
Agreement"
the master purchase agreement dated 31 December 2012 entered into between the Company and Herkules, pursuant to which the Company agreed to or would procure its subsidiaries to purchase the Automation Robots Products from Herkules from time to time for the period from 1 January 2013 to 31 December 2013
"Group" the Company and its subsidiaries

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"Herkules"