THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION 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. If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a licensed securities dealer or other registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in the Company, you should at once hand this circular and the accompanying form of proxy to the purchaser(s) or transferee(s) or to the 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). This circular is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company. New Sports Group Limited 新 體 育 集 團 有 限 公 司 (Incorporated in the Cayman Islands with limited liability) (Stock code: 299) (1) MAJOR ACQUISITION IN RELATION TO ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL IN YUE JIN ASIA LIMITED INVOLVING THE ISSUE OF CONSIDERATION SHARES UNDER SPECIFIC MANDATE; (2) ISSUE OF NEW SHARES UNDER SPECIFIC MANDATE; (3) PLACING OF NEW SHARES UNDER SPECIFIC MANDATE; (4) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL; AND (5) NOTICE OF GENERAL MEETING Financial Adviser to the Company CVP Capital Limited Placing Agent China Yinsheng Securities Limited A notice convening the EGM (as defined herein) of the Company to be held at Room 1804, 18/F, Tower 1, Admiralty Centre, 18 Harcourt Road, Admiralty, Hong Kong on 19 December 2016 10:30 a.m. is set out on pages EGM-1 to EGM-4 of this circular. Whether or not you are able to attend the meeting, please complete and return the accompanying form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar and transfer office of the Company in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, as soon as possible and in any event not less than 48 hours before the time fixed for the holding of the meeting or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting at the meeting or any adjournment thereof (as the case may be) should you so wish. 30 November 2016 CONTENTS Page DEFINITIONS .................................................................. 1 LETTER FROM THE BOARD .................................................. 9 APPENDIX I — FINANCIAL INFORMATION OF THE GROUP .......... I-1 APPENDIX II — ACCOUNTANTS’ REPORT ON THE TARGET GROUP . II-1 APPENDIX III — ACCOUNTANTS’ REPORT ON THETARGETPRCGROUP ............................ III-1 APPENDIX IV — MANAGEMENT DISCUSSIONS AND ANALYSIS AND OTHER FINANCIAL INFORMATION OF THETARGETGROUPAND THETARGETPRCGROUP ............................ IV-1 APPENDIX V — UNAUDITED PRO FORMA STATEMENT OF ASSETS AND LIABILITIES OF THE ENLARGED GROUP .............................. V-1 APPENDIX VI — VALUATION REPORT OF THE REAL PROPERTY ..... VI-1 APPENDIX VII — REPORTS IN RELATION TO THE PROFIT FORECAST MADE IN THE VALUATIONS OF THE BUSINESSES .................................. VII-1 APPENDIX VIII — VALUATION REPORT OF SHENZHEN DAPENG YACHT CLUB COMPANY LIMITED .................. VIII-1 APPENDIX IX — VALUATION REPORT OF SHENZHEN DAPENG INTERNATIONAL EDUCATION COMPANY LIMITED IX-1 APPENDIX X — GENERAL INFORMATION .............................. X-1 NOTICE OF EGM .............................................................. EGM-1 – i – DEFINITIONS In this circular, unless the context requires otherwise, the following expressions have the following meanings: ‘‘Acquisition’’ means the transactions contemplated under the Sale and Purchase Agreement ‘‘Acquisition Specific Mandate’’ means a specific mandate to be sought from the independent Shareholders at the EGM to satisfy the allotment and issue of the Consideration Shares ‘‘Announcement’’ the announcement of the Company dated 19 September 2016 in relation to, among other things, the Acquisition, the Subscriptions and the Placing ‘‘Board’’ means the board of Directors ‘‘Company’’ means New Sports Group Limited, a company incorporated under the laws of the Cayman Islands with limited liability andwhosesharesarelistedontheStockExchange ‘‘Completion’’ means the completion of the sale and purchase of the Target Share in the Target Company and the assignment of the Seller’s rights, title, interest and benefits in and to the Loan in accordance with the Sale and Purchase Agreement ‘‘Completion Date’’ means the date of Completion and Subscription Completion, which is the date within 10 business days after the date on which the Conditions Precedent under the Sale and Purchase Agreement and the Subscription Conditions Precedent under the Subscription Agreements are satisfied or waived or such other date as the parties to the Sale and Purchase Agreement and the Subscription Agreements may agree in writing ‘‘Conditions Precedent’’ means the conditions precedent to Completion under the Sale and Purchase Agreement ‘‘Consideration’’ means the total consideration for the sale and purchase of the Target Share and the assignment of the Loan, being initially HK$1,000,000,000, subject to adjustment as set out in the paragraph headed ‘‘Retained Consideration Adjustments’’ ‘‘Consideration Shares’’ means such number of Shares to be issued and allotted by the Company at the Issue Price as settlement of part of the Consideration under the Sale and Purchase Agreement – 1 – DEFINITIONS ‘‘Crystal Fount Investments means Crystal Fount Investments Limited (晶泉投資有限公 Limited’’ 司), a company incorporated in the British Virgin Islands, an investor of the Subscription Shares ‘‘CVP’’ CVP Capital Limited, the Company’s financial adviser in relation to the Acquisition ‘‘Director(s)’’ means the director(s) of the Company ‘‘EGM’’ means an extraordinary general meeting to be convened by the Company to consider and approve (i) the Sale and Purchase Agreement and the Acquisition contemplated thereunder and the Acquisition Specific Mandate; (ii) the Subscription Agreements and the Subscriptions contemplated thereunder and the Subscription Specific Mandate; (iii) the Placing Agreement and the Placing contemplated thereunder and the Placing Specific Mandate; and (iv) the Increase in Authorised Share Capital ‘‘Enlarged Group’’ means the Group together with the Target Group immediately after Completion ‘‘Group’’ means the Company and its subsidiaries ‘‘HK$’’ means Hong Kong dollars, the lawful currency of Hong Kong ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC ‘‘Increase in Authorised Share the proposed increase in the authorised share capital of the Capital’’ Company from HK$100,000,000 divided into 40,000,000,000 Shares to HK$200,000,000 divided into 80,000,000,000 Shares by the creation of an additional 40,000,000,000 Shares ‘‘Indemnified Person(s)’’ means the Purchaser, each member of the Target Group and their respective successors in title, officers, directors, employees, workers and agents ‘‘Independent Third Party’’ means a person independent of the Company and its connected persons (as defined in the Listing Rules) ‘‘Initial Consideration’’ means the part of the Consideration which shall be settled at Completion, being HK$850,000,000 ‘‘Issue Price’’ means the price per Share at which the Consideration Shares will be issued and initially at HK$0.062 per Share (subject to Issue Price Adjustment) – 2 – DEFINITIONS ‘‘Issue Price Adjustment’’ has the meaning given to it under the paragraph headed ‘‘Issue Price Adjustment’’ in this circular ‘‘Latest Practicable Date’’ 29 November, 2016, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained herein ‘‘Listing Approval’’ means the Stock Exchange having granted the listing of, and permission to deal in, the Consideration Shares on the Stock Exchange ‘‘Listing Rules’’ means the Rules Governing the Listing of Securities on the Stock Exchange ‘‘Loan’’ means the loan owing from Nayuan Development Limited, being a member of the Target Group, to the Seller as at the Completion Date (but immediately prior to Completion) in the amount of HK$882,000,000 ‘‘Long Stop Date’’ means 30 June 2017 or such other date as mutually agreed by the Purchaser and the Seller ‘‘Ms. Ai Qing’’ an investor of the Subscription Shares ‘‘Ms. Zheng Kuanjian’’ an investor of the Subscription Shares ‘‘Notified Claims’’ means the amount of any claim made by the Purchaser against the Seller under any of the Transaction Documents ‘‘Operation Entrustment means the agreement dated 27 August 2014 (as Agreement’’ supplemented and amended by a supplemental agreement dated 13 October 2014) entered into between Shenzhen Yuejin Investment Company Limited* (深圳粵錦投資有限 公司) (currently known as Shenzhen Yuejin Sports Company Limited* (深圳粵錦體育有限公司)), being a member of the Target Group and Shenzhen Dapeng New District Management Committee* (深圳市大鵬新區管理委 員會) in relation to the entrustment of operation of Shenzhen Marine Sports Base and Sailing School by Shenzhen