China Keli Announces Sale of Business

Vancouver, British Columbia--(Newsfile Corp. - July 25, 2018) - China Keli Electric Company Ltd. (TSXV: ZKL) (the "Company"), announces today the sale of its wholly owned subsidiary Creative Grace Limited ("Creative Grace") to Amax Deluxe Limited ("Amax"), for $120,000. Creative Grace wholly owns Zhuhai Keli Electronic Co., Ltd. and Zhuhai Qunhui Eletronic Equipment Co., Ltd., the Company's operating subsidiaries in China. As a result, the transaction will result in the sale of the Company's electrical equipment and components business (the "Business").

The transaction has been reviewed by a special committee of independent directors, and recommended to the board of directors of the Company for approval. The board of directors of the Company has also approved the transaction. The special committee and the board of directors of the Company took numerous factors into consideration, including the following:

• the review of the Company's strategic alternatives over the past several years did not result in any other viable transaction;
• the previous going private transaction lapsed without completion;
• a potential third party proposal also failed to result in any definitive agreement;
• the deteriorating financial position of the Company, including numerous consecutive years of losses, the continuing revenue decline, and the negative working capital position, all without a foreseeable turn-around;
• the cost and challenges of auditing the Company's business in China and maintaining a China based business within a Canadian listed issuer;
• the ability of the Company to seek new business opportunity following the sale of the Business; and
• the opinion of Stephen W. Semeniuk, CFA, an independent financial advisor, that the transaction is fair, from a financial point of view, to the Company and its shareholders.

The transaction is not a non arm's length or related party transaction, and there are no finder's fee to be paid. The transaction will be conditional upon the requisite approval of the shareholders of the Company, which will be sought at a special meeting of the Company expected to be held on or about August 27, 2018, and the approval of the TSX Venture Exchange ("TSXV"). In accordance with Section 5.2 of Policy 5.3 - Acquisitions and Dispositions of Non-Cash Assets of the TSXV, a copy of Form 5C — Transaction Summary Form is attached to this press release.

Subject to the receipt to the receipt of the requisite shareholder and TSXV approvals, the Company expects to complete the transaction on or prior to August 31, 2018.

About China Keli Electric Company Ltd.

China Keli Electric Company Ltd. specializes in the manufacturing and installation of electrical components and equipment, including pre-assembled mini substations, electrical controllers, pressurized and vacuumed switchgears and circuit breakers.

For further information, please contact:

CHINA KELI ELECTRIC COMPANY LTD.

Philip Lo, Chief Financial Officer
Tel. No.: (86) 13632 173732
Email: philip@zkl.cc

For further company information please access our website: www.zkl.cc

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

Form 5C Transaction Summary Form (link)

Agreement for the Purchase and Sale of Shares of Creative Grace Limited (link)