THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in Yue Da International Holdings Limited, you should at once hand this circular to the purchaser(s) or transferee(s), or to the bank or licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected, for transmission to the purchaser(s) or transferee(s). Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular. YUE DA INTERNATIONAL HOLDINGS LIMITED 悅 達國際控股有限公司 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 629) MAJOR TRANSACTIONS – FACTORING AGREEMENTS AND SUPPLEMENTAL REVERSE FACTORING AGREEMENT Capitalised terms used in this cover page shall have the same meanings as those defined in this circular. A letter from the Board is set out on pages 4 to 13 of this circular. This circular will remain on the Stock Exchange’s website at www.hkexnews.hk and, in the case of this circular, on the ‘‘Latest Company Announcements’’ page for at least 7 days from the date of its posting. This circular will also be published on the Company’s website at www.yueda.com.hk. 5 August 2021 CONTENTS Page DEFINITIONS .................................................................. 1 LETTER FROM THE BOARD ................................................... 4 APPENDIX I – FINANCIAL INFORMATION OF THE GROUP ................. 14 APPENDIX II – GENERAL INFORMATION .................................... 16 – i – DEFINITIONS In this circular, unless the context otherwise requires, the following expressions have the following meanings: ‘‘Board’’ the board of Directors of the Company ‘‘Company’’ Yue Da International Holdings Limited, a company incorporated with limited liability in the Cayman Islands, whose Shares are listed on the of the Stock Exchange ‘‘connected person(s)’’ has the meaning ascribed to it under the Listing Rules ‘‘Director(s)’’ the director(s) of the Company ‘‘Factoring Agreements’’ The factoring agreements entered into between Yueda Commercial Factoring, with each of Haili Chemical, Guanhong Trading and Yancheng Harbour on 28 June 2021 and Yuehu Trading on 15 July 2021, collectively, and ‘‘Factoring Agreement’’ shall mean any of them ‘‘Group’’ the Company and its subsidiaries ‘‘Guanhong Trading’’ Xiangshui County Guanhong Trading Company Limited （響水縣灌宏貿易有限公司）, a company incorporated in the PRC, which is principally engaged in the business of trading of metals and construction materials ‘‘Haili Chemical’’ Jiangsu Haili Chemical Company Limited（江蘇海力化工 有限公司）, a company incorporated in the PRC, which is principally engaged in the business of manufacturing and sales of chemical products ‘‘HK$’’ Hong Kong Dollar, the lawful currency of Hong Kong ‘‘Hong Kong’’ The Hong Kong Special Administrative Region of the PRC ‘‘Independent ThirdParty(ies)’’ the independent third party(ies) who is/are, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, independent of and not connected with the Company and the connected person(s) (as defined in the Listing Rules) of the Company – 1 – DEFINITIONS ‘‘Jiangsu Yue Da’’ Jiangsu Yue Da Group Company Limited, a substantial shareholder of the Company interested in 100% interests in Yue Da HK and deemed interested in 69.22% of the issued share capital of the Company. Jiangsu Yue Da Group Company Limited is ultimately beneficially owned as to 100% by Yancheng City People’s Government. ‘‘Latest Practicable Date’’ 30 July 2021, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained therein ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on Main Board of The Stock Exchange of Hong Kong Limited ‘‘Parties’’ Haili Chemical, Guanhong Trading and Yancheng Harbour, Runyang and Yuehu Trading collectively ‘‘PRC’’ the People’s Republic of China, for the purpose of this circular only, excludes Hong Kong, Macau Special Administrative Region of the People’s Republic of China and Taiwan ‘‘RMB’’ Renminbi, the lawful currency of the PRC ‘‘Runyang’’ Jiangsu Runyang Yueda Sunshine Technology Company Limited（江蘇潤陽悅達光伏科技有限公司）, a company established in the PRC, which is principally engaged in the production and sales of solar energy products ‘‘SFO’’ the Securities and Future Ordinance ‘‘Shareholders’’ the holders of Shares ‘‘Shares’’ ordinary share(s) having a par value of HK$0.1 each in the capital of the Company ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘subsidiary(ies)’’ has the meaning ascribed to it under the Listing Rules – 2 – DEFINITIONS ‘‘Supplemental Reverse Factoring the supplemental reverse factoring agreement entered into Agreement’’ between Yueda Commercial Factoring and Runyang on 28 June 2021 ‘‘Yancheng Harbour’’ Jiangsu Yancheng Harbour Supply Chain Technology Group Company Limited（江蘇鹽城港供應鏈科技集團有 限公司）, a company incorporated in the PRC, which is principally engaged in the business of import and export of food and pesticide ‘‘Yueda Commercial Factoring’’ Yueda (Shenzhen) Commercial Factoring Co., Ltd., a company established in the PRC and a subsidiary of the Group, which principal business is, among other things, commercial factoring. ‘‘YueDaHK’’ Yue Da Group (H.K.) Co., Limited（悅達集團（香港）有限 公司）, a company incorporated under the laws of Hong Kong and a substantial shareholder of the Company ‘‘Yuehu Trading’’ Jianhu Yuehu Trading Development Company Limited（建 湖悅湖貿易發展有限公司）, a company incorporated in the PRC, which is principally engaged in the business of trading of foods and construction materials ‘‘%’’ per cent The English transliteration of the Chinese name(s) in this circular, where indicated with is included for information purpose only, and should not be regarded as the official English name(s) of such Chinese name(s). Unless otherwise stated, the conversion of RMB into HK$ is based on the approximate exchange rate of RMB1.00 to HK$1.20784 and is for information purpose only. Such conversion should not be construed as a representation that the relevant amounts have been, could have been, or could be converted at that or any other rate or at all. – 3 – LETTER FROM THE BOARD YUE DA INTERNATIONAL HOLDINGS LIMITED 悅 達國際控股有限公司 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 629) Executive Directors Registered Office Mr. Cai Baoxiang Cricket Square Mr. Bai Zhaoxiang Hutchins Drive Mr. Pan Mingfeng P.O. Box 2681 Grand Cayman, KY1-1111 Non-executive Director Cayman Islands Mr. Liu Debing Mr. Li Biao Head office and principal place of Mr. Hu Huaimin business in Hong Kong Office nos. 3321-3323 and 3325 Independent non-executive Directors 33/F, China Merchants Tower Mr. Cui Shuming Shun Tak Centre Dr. Liu Yongping No. 168-200 Connaught Road Central Mr. Cheung Ting Kee Sheung Wan Hong Kong 5 August 2021 To the Shareholders DearSirorMadam, MAJOR TRANSACTIONS – FACTORING AGREEMENTS AND THE SUPPLEMENTAL REVERSE FACTORING AGREEMENT INTRODUCTION References are made to the announcements of the Company dated 28 June 2021 and 15 July 2021 in relation to the entering into of the Factoring Agreements and the Supplemental Reverse Factoring Agreement. – 4 – LETTER FROM THE BOARD On 28 June 2021, Yueda Commercial Factoring, an indirect wholly owned subsidiary of the Company, entered into factoring agreements separately with Haili Chemical, Guanhong Trading and Yancheng Harbour, collectively, and the Supplemental Reverse Factoring Agreement pursuant to which Yueda Commercial Factoring agreed to provide accounts receivables financing, accounts receivable management services and accounts receivable collection services (the ‘‘Accounts Receivable Services’’) and granted revolving factoring loan credit limits and reverse revolving factoring loan credit limits to Haili Chemical, Guanhong Trading, Yancheng Harbour and Runyang. On 15 July 2021, Yueda Commercial Factoring, entered into a Factoring Agreement with Yuehu Trading, pursuant to which Yueda Commercial Factoring agreed to provide the Accounts Receivable Services and granted revolving factoring loan credit limits to Yuehu Trading. The principal terms of the Factoring Agreements and the Supplemental Reverse Factoring Agreement entered into between the Company and the Parties are set out below: A. Haili Chemical Factoring Agreement Date : 28 June 2021 Parties : (1) Haili Chemical (To the best knowledge, information and belief of the Directors having made all reasonable enquiries, Haili Chemical and its ultimate beneficial owner are Independent Third Parties.) (2) Yueda Commercial Factoring Revolving Credit limit : RMB50,000,000 (equivalent to approximately HK$60,392,000) Annual rate of return (composed :8.5%to10% of interest rate and factoring administration fees) Guarantor : Jinguang Paper Products (China) Investment Company Limited (‘‘Jinguang Paper’’（) 金光紙業 （中國）投資有限公司） Expiry date of the factoring : 27 June 2022 facilities – 5 – LETTER FROM THE BOARD The annual rate of return