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.

SDMGROUPHOLDINGSLIMITED (Incorporated in the Cayman Islands with limited liability) (Stock Code: 8363)

DISCLOSEABLETRANSACTION ACQUISITIONOFENTIREISSUEDSHARECAPITAL OFTHETARGETGROUP

THEACQUISITION

The Board is pleased to announce that after trading hours on 12 November 2018, the Purchaser, an indirectly wholly-owned subsidiary of the Company, entered into the Sale and Purchase Agreement with the Vendors, pursuant to which the Purchaser has conditionally agreed to acquire for and the Vendors have conditionally agreed to sell the Sale Shares, which represent the entire issued share capital of each member of the Target Group, at a consideration of S$1,350,000 (equivalent to approximately HK$7,641,000).

GEMLISTINGRULESIMPLICATIONS

As the relevant applicable percentage ratios (as defined under Chapter 19 of the GEM Listing Rules) in respect of the Acquisition exceed 5% but are all less than 25%, the Acquisition constitutes a discloseable transaction under Rule 19.06(2) of the GEM Listing Rules and is subject to the reporting and announcement requirements under Chapter 19 of the GEM Listing Rules.

THESALEANDPURCHASEAGREEMENT

The principal terms of the Sale and Purchase Agreement are as follow:

Date: 12 November 2018 (after trading hours)

Parties:

(i) Purchaser: SDM Education Limited

(ii) Vendors: Ms. Charmaine Teo Shuet Lynn and Mr. Koh Hui Hua

– 1 – To the best of knowledge, information and belief of the Directors, after having made all reasonable enquiries, the Vendors are third parties independent of the Company and not connected persons of the Company.

Assets to be acquired

Pursuant to the Sale and Purchase Agreement, the Vendors have agreed to sell, and the Purchaser has agreed to purchase, the Sale Shares, representing the entire issued share capital of each member of the Target Group. The Target Group currently operates one pre- school under the brand ‘‘Between Two Trees Preschool’’ in Singapore, which has obtained the care centre licence issued by the ECDA, being the regulatory and developmental authority for the early childhood sector in Singapore.

Consideration

The Consideration for the Sale Shares is S$1,350,000 (equivalent to approximately HK$7,641,000), which shall be paid by the Purchaser in cash in the following manners:

(a) a deposit of S$67,500 (equivalent to approximately HK$382,050) (the ‘‘Deposit’’), representing 5% of the Consideration, was paid by the Purchaser upon the signing of a letter of intent dated 21 August 2018;

(b) S$1,215,000 (equivalent to approximately HK$6,876,900), representing 90% of the Consideration, shall be paid by the Purchaser to the Vendors upon Completion; and

(c) the remaining balance of S$67,500 (equivalent to approximately HK$382,050), representing 5% of the Consideration shall be paid by the Purchaser to the Vendors within one (1) month after the Completion subject to the satisfaction of the following conditions:

(i) delivery to the Purchaser of all of the equipment and assets at the premises of the preschool operated by the Target Group in good repair and condition and in satisfactory working order upon inspection of such premises;

(ii) delivery to the Purchaser of evidence showing that the relevant government authorities have been notified regarding the change of ownership;

(iii) delivery to the Purchaser of evidence showing that the bank signatories of all bank accounts of the Target Group has been changed to the person(s) designated by the Purchaser; and

(iv) delivery to the Purchaser of evidence showing that all liabilities in connection with the Target Group prior to the Completion Date have been settled and paid off (including without limitation payments, levy and any other payments).

The Consideration is determined after arm’s length negotiations between the Vendors and the Purchaser with reference to, among others, (i) the Group’s strategic plan to strengthen its development of its own early childhood brand and curriculum in Singapore; (ii) synergy effect arising from the combination of early childhood business and the extra curriculum of

– 2 – jazz and ballet and pop dance academy experience of the Group (e.g. the Group intends to promote and integrate its dancing programs into the childcare programs to enhance competitiveness); and (iii) the reasons for and benefits of the Acquisition as further discussed below.

The Directors consider that the Consideration is fair and reasonable after taking into account of the above factors. The Consideration shall be financed by internal financial resources of the Company.

Conditions precedent

Completion is conditional upon the satisfaction of the following conditions precedent:

(a) all necessary authorisations, consents and approval from and filing and registration with the Stock Exchange and other applicable government institutions and regulatory authorities in relation to the transactions contemplated under the Sale and Purchase Agreement having been obtained;

(b) passing by the Board and the Shareholders, where applicable, (other than those prohibited from voting under the Listing Rules, if applicable) resolutions at the Board meeting and general meeting of the Company approving the Sale and Purchase Agreement and the transactions contemplated thereunder;

(c) there being no applicable law, rule, regulation, order, injunction, decree or judgment of any court or other governmental authorities which prohibits, restricts or imposes conditions or limitations on, or is reasonably expected to operate to prohibit, restrict or impose conditions or limitations on, the consummation of any of the transactions contemplated under the Sale and Purchase Agreement;

(d) the Purchaser has completed and is satisfied with the results of due diligence review and investigation on the Target Group;

(e) the Vendors’ warranties contained in the Sale and Purchase Agreement remaining true and accurate and not misleading in any material respect as given as of the date of the Sale and Purchase Agreement and at all times up to and including the Completion Date;

(f) the Purchaser having received evidence showing that BTT Preschool is closed and all assets owned by BTT Preschool have been transferred to Lighthouse; and

(g) ECDA having granted the new licence for Between Two Trees Preschool to Lighthouse.

Neither of the parties shall be entitled to waive any of the conditions (a) to (c) above. The Purchaser may, at its absolute discretion, waive any of the conditions (d) to (g) above at any time by notice in writing to the Vendors and such waiver may be made subject to such terms are conditions as are agreed by the parties.

In the event that any of the above conditions is not fulfilled (and/or waived by the Purchaser, as the case may be) by the close of business of the Long Stop Date, neither party shall be obliged to proceed with the Acquisition and the Sale and Purchase Agreement shall be automatically terminated forthwith and the Vendors shall forthwith return the Deposit to

– 3 – the Purchaser without any deduction. Thereafter, the Sale and Purchase Agreement shall cease to be of any effect and the parties shall have no claim against each other arising out of or in connection with the Sale and Purchase Agreement save for any claims arising out of any antecedent breach of the Sale and Purchase Agreement.

Completion

Upon satisfaction (and/or waiver, as the case may be) of all the conditions precedent of the Sale and Purchase Agreement, the Completion shall take place on the Completion Date.

INFORMATIONONTHEVENDORSANDTHETARGETGROUP

The Vendors, comprising of Ms. Charmaine Teo Shuet Lynn and Mr. Koh Hui Hua, are citizens of Singapore, each holding (i) 95% and 5% of the entire issued share capital of Lighthouse respectively; and (ii) 95% and 5% of the entire issued share capital of BTT respectively as at the date of this announcement.

Lighthouse is a limited liability company incorporated in Singapore which is principally engaged in the business of operating and managing a childcare centre named ‘‘Between Two Trees Preschool’’ in Singapore, which has obtained the child care centre licence issued by the ECDA.

BTT is a limited liability company incorporated in Singapore which holds all the trademarks and other intellectual property rights in relation to the abovementioned Between Two Trees Preschool.

BTT Preschool is a sole proprietor wholly-owned by Lighthouse which will be closed and all assets of which will be transferred to the Target Group.

Financial information of the Target Group

Set out below is the unaudited financial information of Lighthouse for the financial years ended 31 May 2017 and 31 May 2018:

For the For the year ended year ended 31 May 2017 31 May 2018 (S$) (S$)

Revenue 1,245,924 1,237,359 Profit/(loss) before tax (66,783) (144,458) Profit/(loss) after tax (66,783) (144,458)

The unaudited net liabilities of Lighthouse as at 31 May 2018 were approximately S$923,259 (equivalent to approximately HK$5,226,000).

– 4 – Set out below is the unaudited financial information of BTT for (i) the period from 24 October 2016 (date of incorporation) to 30 September 2017 and (ii) the year ended 30 September 2018:

For the period from 24 October 2016 (date of incorporation) For the to year ended 30 September 30 September 2017 2018 (S$) (S$)

Revenue 30,000 132,196 Profit/(loss) before tax (27,908) (11,164) Profit/(loss) after tax (27,908) (11,164)

The unaudited net liabilities of BTT as at 30 September 2018 were approximately S$48,864 (equivalent to approximately HK$277,000).

REASONSFORANDBENEFITSOFTHEACQUISITION

The Group is principally engaged in (i) business of jazz and ballet and pop dance academy in Hong Kong and the PRC; and (ii) operation of day care centres, kindergartens and indoor theme-based kids clubs in Hong Kong, the PRC and Singapore.

The prospect of early childhood education sector in Singapore is promising as The has announced plans in August 2017 to double its annual spending on pre-schools in the next five years, where the annual spending on pre-schools have increased from approximately S$360 million in 2012 to approximately S$840 million in 2017.

As disclosed in the interim report of the Company for the six months ended 30 June 2018, the Group uses its endeavour to search for appropriate investment opportunities to expand its business scope and to diversify its existing business. In view of the immense growth in the early childhood education sector in Singapore, the Group has acquired several companies in the region which are principally engaged in the early childhood business since June 2018. The Group believes that such acquisitions provide an excellent development platform and opportunity to establishing its own early childhood brand and curriculum in Singapore, which will maximize return for the Group and the Shareholders as a whole in the long term.

As the child care centre operated by the Target Group (i) possesses all relevant licenses granted by the relevant authority; (ii) is well established in prime location in Singapore; and (iii) has obtained the child care centre licence issued by the ECDA, the Company considers that the Acquisition is in line with its strategic plan to expand its business and build up the Group’s presence in the early childhood business in Singapore local market.

– 5 – In addition, the Directors intend to promote and integrate the Group’s dancing programs into the childcare programs, and believe that there will be synergy effect arising from the combination of early child business and the extra curriculum of jazz and ballet and pop dance academy experience of the Group, which may further enhance competitiveness and profitability of the Group.

The Directors consider that the terms of the Sale and Purchase Agreement are fair and reasonable and on normal commercial terms and the Acquisition is in the interests of the Company and the Shareholders as a whole.

GEMLISTINGRULESIMPLICATIONS

As the relevant applicable percentage ratios (as defined under Chapter 19 of the GEM Listing Rules) in respect of the Acquisition exceed 5% but are all less than 25%, the Acquisition constitutes a discloseable transaction under Rule 19.06(2) of the GEM Listing Rules and is subject to the reporting and announcement requirements under Chapter 19 of the GEM Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:

‘‘Acquisition’’ the acquisition of the Sale Shares by the Purchaser pursuant to the Sale and Purchase Agreement

‘‘Board’’ the board of Directors

‘‘Business Day(s)’’ a day on which banks are generally open for business in Hong Kong and Singapore, except a Sunday, a Saturday, a public holiday, and a day on which a tropical cyclone warning signal no. 8 or above or a ‘‘black’’ rainstorm warning signal is hoisted in Hong Kong and Singapore at any time between 9:00 a.m. and 5:00 p.m.

‘‘BTT’’ Between Two Trees Pte. Ltd., a limited liability company incorporated in Singapore ‘‘BTT Preschool’’ Between Two Trees Preschool, a sole proprietor wholly- owned by Lighthouse

‘‘Company’’ SDM Group Holdings Limited, a company incorporated under the laws of the Cayman Islands with limited liability and the Shares of which are listed on the GEM

‘‘Completion Accounts’’ the unaudited financial statements of the Target Group for the period from 1 June 2018 for Lighthouse and from 1 October 2018 for BTT and both made up to the Completion Date

‘‘Completion’’ completion of the Acquisition in accordance with the terms and conditions of the Sale and Purchase Agreement

– 6 – ‘‘Completion Date’’ the fifth (5th) Business Days after the last condition precedent is fulfilled (or waived, as the case may be) or such other date as the Purchaser and the Vendors may mutually agree in writing

‘‘connected person(s)’’ has the meaning ascribed to it under the GEM Listing Rules

‘‘Consideration’’ S$1,350,000 payable by the Purchaser to the Vendors pursuant to the Sale and Purchase Agreement ‘‘Deposit’’ the deposit paid by the Purchaser upon signing of a letter of intent dated 21 August 2018

‘‘Director(s)’’ director(s) of the Company

‘‘ECDA’’ the Early Childhood Development Agency, which serves as the regulatory and developmental authority for the early childhood sector in Singapore

‘‘GEM’’ the GEM of the Stock Exchange ‘‘GEM Listing Rules’’ the Rules Governing the Listing of Securities on GEM

‘‘Group’’ the Company and its subsidiaries

‘‘HK$’’ Hong Kong dollar, the lawful currency of Hong Kong

‘‘Hong Kong’’ Hong Kong Special Administrative Region of the PRC ‘‘Lighthouse’’ The Lighthouse Keepers Pte. Ltd., a limited liability company incorporated in Singapore

‘‘Long Stop Date’’ 12 February 2019, being the date falling three months from the date of the Sale and Purchase Agreement (or such later date mutually agreed by the parties)

‘‘PRC’’ the People’s Republic of China, which for the purpose of this announcement, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

‘‘Purchaser’’ SDM Singapore Education Limited, a limited liability company incorporated in the British Virgin Islands and an indirectly wholly-owned subsidiary of the Company

‘‘S$’’ Singapore dollars, the lawful currency of Singapore ‘‘Sale Shares’’ the entire issued share capital of the Target Group

‘‘Sale and Purchase the conditional sale and purchase agreement dated 12 Agreement’’ November 2018 entered into between the Purchaser and the Vendors in relation to the Acquisition

– 7 – ‘‘Share(s)’’ ordinary share(s) of HK$0.10 each in the share capital of the Company

‘‘Shareholder(s)’’ holders of the Shares from time to time

‘‘Singapore’’ the Republic of Singapore ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

‘‘Target Group’’ Lighthouse, BTT and BTT Preschool

‘‘Vendors’’ Ms. Charmaine Teo Shuet Lynn and Mr. Koh Hui Hua

‘‘%’’ per cent

By order of the Board SDM Group Holdings Limited Mr. Chiu Ka Lok Chairman

Hong Kong, 12 November 2018

As at the date of this announcement, the executive Directors are Mr. Chiu Ka Lok, Mr. Chun Chi Ngon Richard, the non-executive Directors are Dr. Chun Chun and Ms. Yeung Siu Foon and the independent non-executive Directors are Mr. Lau Sik Yuen, Dr. Yuen Man Chun Royce and Mr. Lee Kwok Ho David.

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

This announcement will remain at www.hkgem.com on the ‘‘Latest Company Announcements’’ page of the GEM website for at least 7 days from the date of its posting and on the Company website at www.sdm.hk.

In the case of inconsistency, the English text of this announcement shall prevail over the Chinese text.

In this announcement, the conversion of S$ into HK$ has been made at the rate of S$1.00 = HK$5.66. Such conversion rate is included in this announcement for indicative purpose only.

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