Pegasus International : GENERAL MANDATES TO REPURCHASE AND TO ISSUE SHARES, RE-ELECTION OF DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

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 disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon 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 stockbroker or other registered dealer in securities, a bank manager, solicitor, professional accountant or other professional adviser.

If you have sold all your shares in Pegasus International Holdings Limited, you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

PEGASUS INTERNATIONAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 676)

GENERAL MANDATES TO REPURCHASE AND TO ISSUE SHARES,

RE-ELECTION OF DIRECTORS

AND

NOTICE OF ANNUAL GENERAL MEETING

A notice convening the annual general meeting of Pegasus International Holdings Limited (the "Company") to be held at Pegasus Industrial Complex, No. 21 Lan He Avenue, Lan He Town, Nansha District, Guangzhou, the People's Republic of China on Friday, 28 May 2021 at 9:30 a.m. is set out on pages 10 to 13 of the circular. Whether or not you propose to attend the said meeting, you are requested to complete the proxy form enclosed with the instructions printed thereon and return the same to the head office and principal place of business of the Company at Unit 1110, New Kowloon Plaza, 38 Tai Kok Tsui Road, Tai Kok Tsui, Kowloon, Hong Kong, as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof.

27 April 2021

		CONTENTS
			Page
Definitions . . . . .	. . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix I	-	Explanatory Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Appendix II	-	Particulars of Director for Re-election . . . . . . . . . . . . . . . . . .	9
Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10

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DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

"Annual General Meeting"	the annual general meeting of the Company to be held at
	Pegasus Industrial Complex, No. 21 Lan He Avenue, Lan
	He Town, Nansha District, Guangzhou, the People's
	Republic of China on Friday, 28 May 2021 at 9:30 a.m.
"Bye-laws"	the bye-laws of the Company (as amended from time to
	time)
"CG Code"	Corporate Governance Code and Corporate Governance
	Report contained in Appendix 14 to the Listing Rules
"Companies Act"	the Companies Act 1981 of Bermuda
"Company"	Pegasus International Holdings Limited, a company
	incorporated in Bermuda, the Shares of which are listed
	on the Stock Exchange
"Directors"	all directors (including independent non-executive
	directors) of the Company
"Latest Practicable Date"	21 April 2021, being the latest practicable date prior to
	the printing of this circular
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange (as amended from time to time)
"Repurchase Proposal"	the proposal to approve the Repurchase Resolution to give
	a general mandate to the Directors to exercise all the
	powers of the Company to repurchase Shares up to a
	maximum of 10% of the issued share capital of the
	Company at the date of the Repurchase Resolution
"Repurchase Resolution"	the ordinary resolution granting to the Directors a general
	mandate to exercise all the powers of the Company to
	repurchase Shares up to a maximum of 10% of the issued
	share capital of the Company at the date of the
	Repurchase Resolution to be proposed at the Annual
	General Meeting (resolution no. (4A) set out in the
	Annual General Meeting notice)
"SFO"	the Securities and Future Ordinance (Chapter 571 of the
	laws of Hong Kong)

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	DEFINITIONS
"Share Buy Back Rules"	the relevant rules set out in the Listing Rules to regulate
	the repurchase by companies with primary listing on the
	Stock Exchange of their own securities on the Stock
	Exchange
"Share(s)"	share(s) in the share capital of the Company
"Shareholders"	holders of Shares
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Takeovers Code"	the Hong Kong Code on Takeovers and Mergers
"$" and "cents"	Hong Kong dollars and cents respectively, the lawful
	currency of Hong Kong Special Administrative Region of
	the People's Republic of China

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LETTER FROM THE BOARD

PEGASUS INTERNATIONAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

	(Stock Code: 676)
Executive Directors:	Head office and principal
Wu Chen San, Thomas	place of business:
Wu Jenn Chang, Michael	Unit 1110
Wu Jenn Tzong, Jackson	New Kowloon Plaza
Ho Chin Fa, Steven	38 Tai Kok Tsui Road
	Tai Kok Tsui
Independent non-executive directors:	Kowloon
Huang Hung Ching	Hong Kong
Liu Chung Kang, Helios
Lai Jenn Yang, Jeffrey
	27 April 2021
To the Shareholders
Dear Sir or Madam,

INTRODUCTION

This circular provides you with information relating to the proposed general mandates to be obtained by the Shareholders for the issue and repurchase of Shares, the proposed re-election of Directors and notice of annual general meeting.

GENERAL MANDATE TO REPURCHASE SHARES

At the annual general meeting of the Company held on 29 May 2020, a general mandate was given by the Company to the Directors to exercise the powers of the Company to repurchase Shares. Such mandate will lapse until the conclusion of the forthcoming annual general meeting of the Company (unless previously revoked or varied by ordinary resolution of the Shareholders). The Repurchase Resolution will be proposed at the Annual General Meeting and the Directors propose to seek your approval thereof. An explanatory statement as required under the Share Buy Back Rules to provide the requisite information on the Repurchase Proposal is set out in Appendix I to this circular.

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LETTER FROM THE BOARD

GENERAL MANDATE TO ISSUE SHARES

There will also be proposed at the Annual General Meeting two ordinary resolutions respectively granting to the Directors a general mandate to allot, issue and deal with Shares not exceeding 20% of the issued share capital of the Company as at the date of the passing of the resolution and adding to such general mandate any Shares representing the aggregate nominal amount of the Shares repurchased by the Company after the granting of the general mandate under the Repurchase Resolution.

RE-ELECTION OF DIRECTORS

In accordance with Bye-law 87(1), Messrs. Lai Jenn Yang, Jeffrey will retire as Director by rotation and, being eligible, will offer himself for re-election as Director by the Shareholders at the Annual General Meeting.

Mr. Lai Jenn Yang, Jeffrey, has served the Company for nine years as an independent non-executive Director. Pursuant to code provision A.4.3 of the CG Code which came into effect on 1 April 2012, if an independent non-executive director serves more than nine years, his further appointment should be subject to a separate resolution to be approved by shareholders, and the papers to shareholders accompanying that resolution should include the reasons why the board believes he is still independent and should be re-elected.

Mr. Lai Jenn Yang was appointed as an independent non-executive director on 22 June 2005. Mr. Lai has been able to fulfill all the requirements regarding independence of an independent non-executive director and provide annual confirmation of independence to the Company pursuant to Rule 3.13 of the Listing Rules. To the best knowledge of the directors, as at the date of this report, the Company is not aware of any matters or events that may occur and affect the independence of Mr. Lai.

During the tenure of office, Mr. Lai had performed his duties as an independent non-executive director to the satisfaction of the Board of Directors (the "Board"). The Board is of the opinion that Mr. Lai remains independent notwithstanding the length of his service and believes that his valuable knowledge and experience continue to generate significant contribution to the Board, the Company and the shareholders as a whole.

Pursuant to code provision A.4.3 of the CG Code, a separate ordinary resolution will be proposed at the Annual General Meeting to approve the re-election of each of Mr. Lai as an independent non-executive Director.

The Company will continue to review the independence of the independent non-executive Directors annually and take all appropriate measures to ensure compliance of relevant provisions regarding independence of independent non-executive Directors in the Listing Rules.

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LETTER FROM THE BOARD

Pursuant to Rule 13.74 of the Listing Rules, a listed issuer shall disclose the details required under Rule 13.51(2) of the Listing Rules of any directors proposed to be re-elected or proposed new director in the notice or accompanying circular to its shareholders of the relevant general meeting, if such re-election or appointment is subject to shareholders' approval at that relevant general meeting. Details of the retiring Directors are set out in Appendix II of this circular.

ACTION TO BE TAKEN

The Notice of Annual General Meeting is set out on pages 10 to 13 of this circular. A proxy form for use at the Annual General Meeting is enclosed and despatched together with this circular. Whether or not you propose to attend the Annual General Meeting, you are requested to complete the said proxy form and return it to the head office and principal place of business of the Company at Unit 1110, New Kowloon Plaza, 38 Tai Kok Tsui Road, Tai Kok Tsui, Kowloon, Hong Kong not less than 48 hours before the time appointed for holding the Annual General Meeting or any adjournment thereof. Completion and return of the proxy form will not prevent you from attending and voting at the Annual General Meeting if you so wish.

Pursuant to the amendments to the Listing Rules, which came into force on 1 January 2009, any vote of shareholders at a general meeting must be taken by poll. Accordingly, all resolutions will be put to vote by way of poll at the Annual General Meeting. An announcement on the poll vote results will be made by the Company after the Annual General Meeting in the manner prescribed under Rule 13.39(5) of the Listing Rules.

RECOMMENDATION

The Directors believe that the Repurchase Proposal and the general mandates to be granted to the Directors to issue new Shares and the proposed re-election of Directors are all in the best interests of the Company and its Shareholders. Accordingly, the Directors recommend that all Shareholders should vote in favour of the resolutions as set out in the notice of the Annual General Meeting.

By Order of the Board

Wu Chen San, Thomas

Chairman

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APPENDIX I

EXPLANATORY STATEMENT

This appendix serves as an explanatory statement, as required by the Share Buy Back Rules, to provide requisite information to you for your consideration of the proposal to permit the repurchase of Shares up to a maximum of 10% of the issued share capital of the Company as at the date of the Repurchase Resolution. For the purpose of the Share Buy Back Rules, "shares" is defined in the Listing Rules to mean shares of all classes and securities which carry a right to subscribe or purchase shares.

1. SHARE BUY BACK RULES

The Share Buy Back Rules permit companies with primary listing on the Stock Exchange to repurchase their fully paid up shares on the Stock Exchange subject to certain restrictions, of which repurchases must be made out of funds which are legally available for the purpose and in accordance with the company's constitutive documents and the laws of Bermuda.

2. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 730,650,000 Shares.

Subject to the passing of the Repurchase Resolution and on the basis that no further Shares are issued or repurchased prior to the Annual General Meeting, the Company would be allowed under the Repurchase Resolution to repurchase a maximum of 73,065,000 Shares, during the period ending on the earlier of the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required to be held by law or the date upon which such authority is revoked or varied by an ordinary resolution of the Shareholders in general meeting.

3. EXERCISE OF THE REPURCHASE MANDATE

Ordinary Resolution no. 4 set out in the Notice of Annual General Meeting will, if passed, give an unconditional general mandate to the Directors authorizing the repurchase by the Company until whichever is the first to occur of, either (i) the conclusion of the next annual general meeting of the Company, or (ii) the expiration of the period within which the next general meeting of the Company is required by the Bye-laws of the Company or any applicable law to be held, or (iii) the revocation or variation of Ordinary Resolution no. 4 by an ordinary resolution of the shareholders of the Company in general meeting (the "Relevant Period").

4. REASONS FOR REPURCHASES

The Directors believe that the Repurchase Proposal is in the best interests of the Company and its Shareholders. Repurchases may, depending on market conditions and funding arrangements at the time, lead to enhancement of the net assets and/or earnings per Share of the Company and will only be made when the Directors believe that such repurchases will benefit the Company and its Shareholders.

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APPENDIX I

EXPLANATORY STATEMENT

5. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its Memorandum of Association and Bye-laws, the Companies Act and the laws of Bermuda. Bermuda law provides that the amount of capital repaid in connection with a share repurchase may only be paid out of either the capital paid up on the relevant shares, or funds that would otherwise be available for dividend or distribution, or the proceeds of a fresh issue of shares made for the purpose. The amount of premium payable on repurchase may only be paid out of either the funds that would otherwise be available for dividend or distribution or out of the share premium account of the Company.

There might be an adverse impact on the working capital or gearing position of the Company as compared with the positions disclosed in the Company's Annual Report for the year ended 31 December 2020 in the event that the Repurchase Proposal was to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Repurchase Proposal to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the Company's gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

6. SHARE PRICES

The highest and lowest prices at which the Shares had been traded on the Stock Exchange during each of the previous twelve months prior to the Latest Practicable Date, were as follows:

	Shares
	Highest	Lowest
	$	$
2020
April	0.80	0.41
May	0.82	0.76
June	0.76	0.73
July	0.75	0.63
August	0.70	0.70
September	0.73	0.70
October	0.74	0.73
November	0.74	0.73
December	0.76	0.72
2021
January	0.76	0.72
February	0.75	0.72
March	0.80	0.75
April (up to the Latest Practicable Date)	0.80	0.80

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APPENDIX I

EXPLANATORY STATEMENT

7. UNDERTAKING

The Directors have undertaken to the Stock Exchange that, they will exercise the powers of the Company to make repurchases pursuant to the Repurchase Resolution and in accordance with the Listing Rules and the applicable laws of Bermuda.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, their associates, have any present intention to buy or to sell any Shares from or to the Company or its subsidiaries under the Repurchase Proposal if such is approved by the Shareholders.

No other connected persons (as defined in the Listing Rules) have notified the Company that they have a present intention to buy or to sell any Shares from or to the Company or its subsidiaries, or have undertaken not to do so, in the event that the Repurchase Proposal is approved by the Shareholders.

8. TAKEOVERS CODE

If on the exercise of the power to repurchase Shares pursuant to the Repurchase Resolution, a Shareholder's proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of Rule 32 of the Takeovers Code. As a result, a Shareholder or group of Shareholders acting in concert, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Takeovers Code.

As at the Latest Practicable Date, to the best of the knowledge and belief of the Company, Pegasus Footgear Management Limited, holding approximately 64.15% of the issued share capital of the Company, is the only substantial Shareholder holding more than 10% of the issued share capital of the Company. In the event that the Directors should exercise in full the power to repurchase Shares under the Repurchase Proposal, the shareholding of Pegasus Footgear Management Limited in the Company would be increased to approximately 71.28% of the issued share capital of the Company but such increase would not subject Pegasus Footgear Management Limited to make a mandatory offer under the Takeovers Code.

9. SHARES REPURCHASE MADE BY THE COMPANY

There was no repurchase by the Company, or any its subsidiaries, of any Shares (whether on the Stock Exchange or otherwise) during the six months proceeding the date of this circular.

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APPENDIX II PARTICULARS OF DIRECTOR FOR RE-ELECTION

The particulars of the Directors eligible for re-election at the Annual General Meeting are set out below:

1. Mr. Lai Jenn Yang, Jeffrey

Mr. Lai Jenn Yang, Jeffrey ("Mr. Lai"), aged 63, is currently an Executive Director of Nicematch International Co., Ltd, which is incorporated in Taiwan. Mr. Lai graduated from Tamkang University in Taiwan and obtained a bachelor degree in Civil Engineering. He also obtained a master degree in Engineering from Ohio State University, USA. Prior to joining to the Company, he had more than 20 years of experience in operation and engineering management.

As at the Latest Practicable Date, Mr. Lai did not have any interest in the Shares or underlying shares in the Company within the meaning of part XV of the SFO. Mr. Lai is not related to any Directors, senior management of the Company, substantial or controlling shareholders.

Mr. Lai entered into a service contract with the Company for a term of one year commencing 22 June 2005 and continuing thereafter until terminated by either party giving to the other party a period of one month is advance notice in writing. He is currently entitled to an annual director's fee of approximately US$8,000 as determined by the Board with regard to the expected time spent by Mr. Lai on the affairs of the Company.

GENERAL

Save as disclosed above, no information that is required to be disclosed pursuant to paragraphs (h) to (v) of Rules 13.51(2) of the Listing Rules and the Directors consider that there are no other matters which need to be brought to the attention of the Shareholders.

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NOTICE OF ANNUAL GENERAL MEETING

PEGASUS INTERNATIONAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 676)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at Pegasus Industrial Complex, No. 21 Lan He Avenue, Lan He Town, Nansha District, Guangzhou, the People's Republic of China on Friday, 28 May 2021 at 9:30 a.m. for the following purposes:

1. To receive and consider the audited financial statements and the directors' report and auditors' report for the year ended 31 December 2020.
2. To consider and approve, each as a separate resolution, if thought fit, the following resolutions:
3. 1. to re-elect retiring Mr. Lai Jenn Yang, Jeffrey as a Director;
   2. to authorise the remuneration committee to fix the remuneration of the Directors.
4. To re-appoint the Auditors and authorise the Board of Directors to fix their remuneration.

And, as special businesses, to consider and, if thought fit, pass the following resolutions as ordinary resolutions:

ORDINARY RESOLUTIONS

4. "THAT:

1. subject to paragraph (b) below, the exercise by the Directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to purchase shares in the capital of the Company, subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited as amended from time to time, be and is hereby generally and unconditionally approved;

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NOTICE OF ANNUAL GENERAL MEETING

1. the aggregate nominal amount of shares of the Company which may be purchased by the Company pursuant to the approval in paragraph (a) above shall not exceed 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing of this Resolution, and the said approval shall be limited accordingly; and
2. for the purpose of this Resolution,
   "Relevant Period" means the period from the passing of this Resolution until whichever is the earlier of:
3. 1. the conclusion of the next Annual General Meeting of the Company;
   2. the expiration of the period within which the next Annual General Meeting of the Company is required by the Bye-laws of the Company or any applicable law to be held; and
   3. the revocation or variation of authority given under this Resolution by an ordinary resolution of the shareholders of the Company in general meeting."

5. "THAT:

1. subject to paragraph (c) below, the exercise by the Directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company and to make or grant offers, agreements and options which would or might require the exercise of such powers, be and is hereby generally and unconditionally approved;
2. the approval in paragraph (a) above shall authorise the Directors of the Company during the Relevant Period to make or grant offers, agreements and options which would or might require the exercise of such powers after the end of the Relevant Period;
3. the aggregate nominal amount of the share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors of the Company pursuant to the approval in paragraph (a) above, otherwise than pursuant to (1) a Rights Issue (as hereinafter defined); (2) an issue of shares as scrip dividends pursuant to the Bye-laws of the Company; (3) an issue of shares by the exercise of options granted under the share option scheme of the Company, shall not exceed 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing of this Resolution, and the said approval shall be limited accordingly; and

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NOTICE OF ANNUAL GENERAL MEETING

1. for the purpose of this Resolution,
   "Relevant Period" means the period from the passing of this Resolution until whichever is the earlier of:
2. 1. the conclusion of the next Annual General Meeting of the Company;
   2. the expiration of the period within which the next Annual General Meeting of the Company is required by the Bye-laws of the Company or any applicable law to be held; and
   3. the revocation or variation of authority given under this Resolution by an ordinary resolution of the shareholders of the Company in general meeting; and

"Rights Issue" means an offer of shares open for a period fixed by the Directors of the Company to the holders of shares of the Company on the register on a fixed record date in proportion to their then holdings of such shares (subject to such exclusion or other arrangements as the Directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange, in any territory outside Hong Kong applicable to the Company)."

6. "THAT conditional upon the Resolutions numbered 4 and 5 set out in the notice convening this meeting being passed, the aggregate nominal amount of shares in the capital of the Company which is purchased by the Company under the authority granted to the Directors of the Company by Resolution numbered 4 (up to a maximum of 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing of such Resolution) shall be added to the aggregate nominal amount of shares in the capital of the Company that may be allotted or agreed conditionally or unconditionally to be allotted by the Directors of the Company pursuant to Resolution numbered 5 set out in the notice convening this meeting."

By Order of the Board

Lee Yiu Ming

Company Secretary

Hong Kong, 27 April 2021

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NOTICE OF ANNUAL GENERAL MEETING

Notes:

1. Any member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and, on a poll, vote instead of him. A proxy need not be a member of the Company.
2. In order to be valid, a form of proxy together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy thereof must be deposited at the head office and principal place of business of the Company at Unit 1110, New Kowloon Plaza, 38 Tai Kok Tsui Road, Tai Kok Tsui, Kowloon, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.
3. The register of members of the Company will be closed from Tuesday, 25 May 2021 to Friday, 28 May 2021, both days inclusive, during which no transfer of shares will be registered. In order to qualify for attending and voting at the forth coming annual general meeting, all transfer documents accompanied by the relevant share certificate must be lodged with the Company's Hong Kong Branch Share Registrar, Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong not later than 4:30 p.m. on Monday, 24 May 2021.

As at the date of this notice, the executive directors are Mr. Wu Chen San, Thomas, Mr. Wu Jenn Chang, Michael, Mr. Wu Jenn Tzong, Jackson and Mr. Ho Chin Fa, Steven. The independent non-executive directors are Mr. Huang Hung Ching, Mr. Lai Jenn Yang, Jeffrey and Mr. Liu Chung Kang, Helios.

The electronic version of this notice will be published on the website of the Stock Exchange of Hong Kong Limited (www.hkex.com.hk) and the website of the Company (www.pegasusinternationalholdings.com).

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