00311.HK And Shanghai Textile Renewal Framework Agreement

Luen Thai Holdings (00311.HK) issued a notice concerning the Shanghai Textile Group and group's purchase of textile and garment related products from the LTO group to the Shanghai Textile Group on the existing trading framework agreement, and the ongoing related transactions relating to the provision of a number of such services by the LTO group to the Shanghai Textile Group on the existing service framework agreement. The existing trading framework agreement and the existing service framework agreement will expire on December 31, 2019.

In December 19, 2019, LTO and Shanghai textile have entered into a new framework for the sale of textile and garment related products from LTO group to Shanghai Textile Group, and have entered into a new service framework agreement by the LTO group to provide some services to Shanghai textile group.

Shanghai Textile Group will sell it to LTO group on the basis of these orders, while LTO group will purchase textile and garment related products to Shanghai textile group. The contracting parties will set the price according to the normal business terms depending on individual circumstances. These orders should specify (including) the specifications, quantity and price, payment terms, and time and place of delivery for textile and garment related products.

The contracting parties will, from time to time, determine the price of textile and garment related products under each of these orders based on the fair consultation basis and the pricing policy based on industry practice of LTO group, which should be similar to the prevailing market price or similar to those offered by the independent third party. The term of the year will begin in January 1, 2020 and expire on December 31, 2022.

The group stated that the group is engaged in the manufacture and trade of garments and apparel accessories, and has regular demand for textile and garment related product categories provided by Shanghai textile group. The directors believe that the Shanghai Textile Group is a leader in China's textile manufacturing and trade, and can provide high-quality textile and garment related products at competitive prices, meeting the needs of the group business.