C&D Property Management Group Co., Ltd - Proxy Solicitation & Information Statement 2023

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 a licensed securities dealer or registered institution in securities, a bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in C&D Property Management Group Co., Ltd, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser(s) or transferee(s) or to the bank, 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.

C&D Property Management Group Co., Ltd 建發物業管理集團有限公司

(Incorporated in the British Virgin Islands with limited liability)

(Stock Code: 2156)

(1) PROPOSED ADOPTION OF 2023 RESTRICTED SHARE INCENTIVE SCHEME;

(2) GRANT OF RESTRICTED SHARES PURSUANT TO 2023 RESTRICTED SHARE INCENTIVE SCHEME; AND NOTICE OF THE EXTRAORDINARY GENERAL MEETING

A notice convening the EGM to be held at Room 3517, 35th Floor, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong on Thursday, 21 December 2023 at 10:00 a.m. is set out on pages N-1 to N-2 of this circular.

A form of proxy for use by the Shareholders at the EGM is enclosed with this circular for despatch to the Shareholders. Whether or not you intend to attend and/or vote at the EGM in person, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as practicable but in any event not later than 48 hours before the time specified for holding the EGM 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 in person at the EGM or any adjournment thereof should you so wish.

4 December 2023

CONTENTS

		Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		4
APPENDIX	— SUMMARY OF THE PRINCIPAL TERMS OF
	2023 RESTRICTED SHARE INCENTIVE SCHEME . . . . . . . . . . .	26
NOTICE OF	EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . .	N-1

– i –

DEFINITIONS

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

‘‘2021 Incentive Scheme’’ the 2021 Restricted Share Incentive Scheme and its implementation and evaluation measures approved by the Shareholders on 27 September 2021, as amended from time to time
‘‘2021 Restricted Shares’’
the restricted share(s) granted to incentive recipients by the Company under the 2021 Incentive Scheme
‘‘Announcement’’
the announcement of the Company dated 7 November 2023 in relation to, among other things, the proposed adoption of the Incentive Scheme
‘‘Board’’ the board of Directors of the Company
‘‘BVI’’
the British Virgin Islands
‘‘C&D International’’
C&D International Investment Group Limited (建發國際投資集團有限公司), a company incorporated in the Cayman Islands with limited liability and the shares of which are listed on the Main Board of the Stock Exchange and a controlling shareholder of the Company
‘‘Company’’
C&D Property Management Group Co., Ltd 建發物業管理集團有限公司, a BVI business company incorporated in the BVI with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange
‘‘Condition(s) for Lock-up Release’’
the condition(s) required to be fulfilled pursuant to the Incentive Scheme for the release of lock-up restrictions on the Restricted Shares
‘‘Condition(s) of Grant’’ the condition(s) required to be fulfilled pursuant to the Incentive Scheme for the Board to grant the Restricted Shares to the Incentive Recipients
‘‘connected person(s)’’
has the meaning ascribed to it under the Listing Rules
‘‘Deed of Trust’’
the deed of trust to be entered into between the Company and the Trustee, as supplemented and amended from time to time
‘‘Director(s)’’ the director(s) of the Company
‘‘Evaluation Period’’ each of the three years ending 31 December 2026

– 1 –

DEFINITIONS

‘‘EGM’’ or ‘‘Extraordinary General Meeting’’
an extraordinary general meeting to be held at Room 3517, 35th Floor, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong on Thursday, 21 December 2023 at 10:00 a.m. or any adjournment thereof (as the case may be) for the purpose of considering and, if thought fit, approving, among other things, the adoption of the Incentive Scheme
‘‘employee participant(s)’’
has the meaning ascribe to it under the Listing Rules
‘‘Grant Date’’
the date on which the Company allots and issues the Restricted Shares (as held by the Trustee on behalf of the Incentive Recipients) to the Incentive Recipients after approval for the implementation of the Incentive Scheme has been obtained, which must be a trading day
‘‘Grant Price’’
the price of each Restricted Share to be granted to the Incentive Recipient
‘‘Group’’ the Company and its subsidiaries
‘‘HK$’’
Hong Kong dollars, the lawful currency of Hong Kong
‘‘Hong Kong’’
the Hong Kong Special Administrative Region of the PRC
‘‘Incentive Recipient(s)’’
director(s), senior management and core staff of the Group to be granted with the Restricted Shares
‘‘Incentive Scheme’’
the 2023 Restricted Share Incentive Scheme and its implementation and evaluation measures proposed to be considered and adopted at the Extraordinary General Meeting, the principal terms of which are set out in the Appendix
‘‘Latest Practicable Date’’
24 November 2023, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein
‘‘Listing Committee’’
the Listing Committee of the Stock Exchange
‘‘Listing Rules’’
the Rules Governing the Listing of Securities on the Stock Exchange
‘‘Lock-up Period’’
the period from the Grant Date till the date when the Restricted Shares have satisfied the Conditions for Lock-up Release

– 2 –

DEFINITIONS

‘‘PRC’’ the People’s Republic of China, which for the purpose of this announcement only, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan
‘‘Remuneration Committee’’ the remuneration committee of the Board
‘‘Restricted Share(s)’’ the restricted Share(s) to be granted to Incentive Recipients by the Company under the Incentive Scheme
‘‘Repurchase Price’’ unless otherwise defined herein, a price not higher than the lower of the Grant Price and the market price of the Shares (i.e. the closing price of the Shares on the day of approval of such repurchase by the Board)
‘‘RMB’’ Renminbi, the lawful currency of the PRC
‘‘Share(s)’’ the ordinary share(s) of HK$0.01 each of the Company
‘‘Shareholder(s)’’ holder(s) of the Share(s) ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited
‘‘Trust’’ the trust to be constituted by the Deed of Trust
‘‘Trustee’’ BOCI Trustee (Hong Kong) Limited, the trustee to be appointed by the Board to hold the Restricted Shares for the benefits of the Incentive Recipient(s) and manage the Trust pursuant to the terms and conditions of the Deed of Trust
‘‘Well Land’’ Well Land International Limited (益能國際有限公司), a BVI business company incorporated in the BVI with limited liability and a controlling shareholder of each of C&D International and the Company as at the Latest Practicable Date
‘‘%’’ per cent.

– 3 –

LETTER FROM THE BOARD

C&D Property Management Group Co., Ltd 建發物業管理集團有限公司

(Incorporated in the British Virgin Islands with limited liability)

(Stock Code: 2156)

Executive Directors: Ms. Qiao Haixia (Chief Executive Officer) Mr. Huang Danghui

Non-executive Directors: Mr. Lin Weiguo (Chairman) Mr. Xu Yixuan

Independent non-executive Directors: Mr. Lee Cheuk Yin Dannis Mr. Li Kwok Tai James Mr. Wu Yat Wai

Registered offices: 2/F, Palm Grove House P.O. Box 3340 Road Town, Tortola BVI

Principal place of

business in Hong Kong: Room 3517, 35/F Wu Chung House 213 Queen’s Road East Wan Chai, Hong Kong

4 December 2023

To the Shareholders

Dear Sir/Madam,

(1) PROPOSED ADOPTION OF 2023 RESTRICTED SHARE INCENTIVE SCHEME;

(2) GRANT OF RESTRICTED SHARES PURSUANT TO 2023 RESTRICTED SHARE INCENTIVE SCHEME; AND NOTICE OF THE EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the Announcement. The purpose of this circular is (i) to provide the Shareholders with further information on the Incentive Scheme; and (ii) to give the Shareholders a notice of the Extraordinary General Meeting and other information in accordance with the requirements of the Listing Rules.

– 4 –

LETTER FROM THE BOARD

PROPOSED ADOPTION OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

On 7 November 2023, the Board approved the resolution in relation to the proposed adoption of the Incentive Scheme, which is subject to approval at the EGM and of the relevant regulatory authorities. Set out below are the principal terms of the Incentive Scheme:

Purpose

To establish and improve the Company’s medium to long-term incentive mechanism to collectively integrate interests of the Shareholders, the Company and the Company’s core team, fully motivate the management and core staff of the Company and gain interests from the parties on long term development of the Company.

Incentive Recipients

Directors and senior management of the Group who play a vital role in the medium to long-term development of the Company and the core staff (excluding independent nonexecutive Directors, Shareholders or de facto controllers of the Company who individually or collectively hold more than 5% of the issued Shares and their respective spouses, parents or children). The total number of Incentive Recipients under the Incentive Scheme shall be no more than 391 and the Directors and senior management of the Company selected as Incentive Recipients must be elected at a general meeting of the Company or appointed by the Board, and each Incentive Recipient must have entered into an employment contract or engagement contract with the Group during the Evaluation Period.

The list of qualified Incentive Recipients (the ‘‘List’’) shall be prepared by the Remuneration Committee in accordance with the relevant policies regulating the share incentive schemes of state-owned enterprises in the PRC after considering (i) the positions of the Incentive Recipients in the Group; and (ii) the tenure of the Incentive Recipients in the Group; which shall then be submitted to the Board for its consideration and approval. The Remuneration Committee has the right to make any corresponding adjustments to the final list of Incentive Recipients based on the actual level of subscription by the Incentive Recipients.

The Board has reviewed the List and was of the view that (i) in terms of positions, the Incentive Recipients consist of the majority of the Group’s key employees who assumed vital managerial and/or operational roles in the Group’s day-to-day operations, including but not limited to, executive Directors, directors and general managers of principal subsidiaries, directors and managers of key functional departments, etc.; and (ii) in terms of tenure, the Incentive Recipients consist of the majority of the Group’s long-serving and loyal employees who made sufficient contribution to the Group during their years of service and is expected to contribute to the Group’s development in the years ahead. Given the purpose of the Incentive Scheme is to establish and improve the Company’s medium to long-term incentive mechanism to collectively integrate interests of the Shareholders, the Company and the Company’s core team, fully motivate the management and core staff of the Company, and achieve high-quality development of the Company, the Board is of the view that the Remuneration Committee’s basis in determining the List aligns with the purpose of the Incentive Scheme.

– 5 –

LETTER FROM THE BOARD

Means of incentive and source of Restricted Shares

The incentive method of the Incentive Scheme is to grant Restricted Shares to the Incentive Recipients and the source of underlying Shares under the Incentive Scheme will be new Shares to be issued by the Company.

Number of Restricted Shares

Up to 40,000,000 Restricted Shares (the exact number is subject to the actual level of subscription) representing approximately 2.92% of the total issued Shares as at the date of the Announcement and approximately 2.83% of the total issued Shares as enlarged by the allotment and issue of Restricted Shares (assuming there will be no other changes to the shareholding structure of the Company).

The total number of Shares under all effective share scheme(s) of the Company (including the Incentive Scheme) do not exceed 10% of its total issued share capital as at the date of the Announcement. The total number of Restricted Shares to be granted to each Incentive Recipient under the Incentive Scheme, as well as all options and awards granted to such person (excluding any options and awards lapsed in accordance with the terms of the scheme) under all share scheme(s) of the Company shall not exceed 1.00% of the total share capital of the Company.

In the event of any capitalisation issue (such as capitalisation of capital reserves and bonus issue of Shares), sub-division, rights issue or share consolidation of the Company during the period from the date of the Announcement till the date of allotment and issue of Restricted Shares, the number of Restricted Shares and the Grant Price shall be adjusted accordingly. However, if the Company issues new Shares during such period, no adjustment shall be made to the number of Restricted Shares and the Grant Price.

Grant Price

HK$1.87 per Share, which is not less than the higher of:

(i) 50% of the closing price of the Shares as quoted on the Stock Exchange as at the date of the Announcement;
(ii) 50% of the average closing price of the Shares as quoted on the Stock Exchange for the five consecutive trading days immediately preceding the date of the Announcement; and
(iii) the nominal value of each Share.

– 6 –

LETTER FROM THE BOARD

The Grant Price was determined with reference to the Notice on Further Improving the Implementation of Equity Incentive Schemes by Central SOE-controlled Listed Companies (Guo Zi Fa Kao Fen Gui [2019] No. 102)《關於進一步做好中央企業控股上市公司股權激勵工作有關事項的通知》(國資發考分規[2019]102號) and Guidelines for the Implementation of Equity Incentive Schemes by Central SOE-controlled Listed Companies (Guo Zi Fa Kao Fen Gui [2020] No. 178)《中央企業控股上市公司實施股權激勵工作指引》(國資考分[2020]178 號) (the ‘‘Guidelines’’), which is also the mechanism generally adopted by state-owned listed companies. The Grant Price would be able to incentivize the Incentive Recipients to the greatest extent within the ambit of the Guidelines.

Within the period prescribed by the Company, the Incentive Recipients shall make payment for the subscription of the Restricted Shares by remitting the monies to the Company’s designated account, and default in payment shall be treated as renunciation of the Restricted Shares to be granted to the Incentive Recipients.

Validity Period

The validity period of the Incentive Scheme shall commence from the date of the approval of the Incentive Scheme at the EGM and end on the date on which all Restricted Shares are released from lock-up or all Restricted Shares are repurchased, which shall be no more than ten years.

Administration

The Board is the administrator of the Incentive Scheme and responsible for the implementation of the Incentive Scheme.

Lock-up Period and arrangement for lock-up release

The Restricted Shares shall not be transferred, used as guarantee or for repayment of debts during the Lock-up Period. Having been granted the Restricted Shares, the Incentive Recipients shall be entitled to the rights to dividends and rights issue. During the Lock-up Period, the Shares acquired by the Incentive Recipients as a result of capitalisation issue (such as capitalisation of capital reserves, bonus issue of Shares), rights issue, allotment of Shares to original Shareholders when allotting and issuing new Shares are also restricted from being sold in the secondary market or otherwise transferred, and the expiry date of the lock-up period for such Shares is the same as that for the Restricted Shares.

When the Company makes distribution by way of cash or scrip dividends, the Incentive Recipients shall be entitled to the cash or scrip dividends in respect of the Restricted Shares granted to them, and have the right to deal with the same freely.

– 7 –

LETTER FROM THE BOARD

Subject to fulfillment of the following conditions, the arrangement for lock-up release of the Restricted Shares under the Incentive Scheme is as follow:

			Condition(b):
			Individual	Percentage
Performance	Unlocking period/	Condition(a): Performance target	performance	of lock-up
period	Vesting period	of the Company	evaluation	release
Year ending 31	From the first	(1) Economic value added of the	The results of	40%
December 2024	trading day after 24	Company shall not be lower than	individual
	months from the	RMB180 million;	performance
	Grant Date to the		evaluation of
	last trading day	(2) Based on the total market value of	Incentive Recipients
	within 36 months	the Company for the year ended 31	is ‘‘qualified’’
	from the Grant Date	December 2022, the growth rate of
		total market value of the Company
		shall be not lower than 3% and not
		lower than the industry average or
		75% of the benchmark companies or
		based on the revenue of the Company
		for the year ended 31 December
		2022, the growth rate of operating
		revenue shall not be lower than 5%
		and not lower than the industry
		average or 75% of the benchmark
		companies; and
		(3) the operating profits of the Company
		shall not be lower than 75% of the
		total profits of the Company.
Year ending 31	From the first	(1) Economic value added of the	The results of	30%
December 2025	trading day after 36	Company shall not be lower than	individual
	months from the	RMB185 million;	performance
	Grant Date to the		evaluation of
	last trading day	(2) Based on the total market value of	Incentive Recipients
	within 48 months	the Company for the year ended 31	is ‘‘qualified’’
	from the Grant Date	December 2022, the growth rate of
		total market value of the Company
		shall be not lower than 6% and not
		lower than the industry average or
		75% of the benchmark companies or
		based on the revenue of the Company
		for the year ended 31 December
		2022, the growth rate of operating
		revenue shall not be lower than 10%
		and not lower than the industry
		average or 75% of the benchmark
		companies; and
		(3) the operating profits of the Company
		shall not be lower than 75% of the
		total profits of the Company.

– 8 –

LETTER FROM THE BOARD

			Condition(b):
			Individual	Percentage
Performance	Unlocking period/	Condition(a): Performance target	performance	of lock-up
period	Vesting period	of the Company	evaluation	release
Year ending 31	From the first	(1) Economic value added of the	The results of	30%
December 2026	trading day after 48	Company shall not be lower than	individual
	months from the	RMB190 million;	performance
	Grant Date to the		evaluation of
	last trading day	(2) Based on the total market value of	Incentive Recipients
	within 60 months	the Company for the year ended 31	is ‘‘qualified’’
	from the Grant Date	December 2022, the growth rate of
		total market value of the Company
		shall be not lower than 9% and not
		lower than the industry average or
		75% of the benchmark companies or
		based on the revenue of the Company
		for the year ended 31 December
		2022, the growth rate of operating
		revenue shall not be lower than 15%
		and not lower than the industry
		average or 75% of the benchmark
		companies; and
		(3) the operating profits of the Company
		shall not be lower than 75% of the
		total profits of the Company.

Notes:

‘‘Economic value added’’ represents the profit for the year attributed to the equity holders of the Company less average equity attributable to the equity holders of the Company multiplied by capital cost, where the capital cost is calculated at 6% and average equity attributable to the equity holders of the Company = (equity attributable to the equity holders of the Company at the beginning of the year+ equity attributable to the equity holders of the Company at the end of the year)/2; ‘‘total market value’’ represents the arithmetic average of the indicator of the first trading day and the last trading day in last month of the respective year; ‘‘Revenue’’ represents the audited revenue; ‘‘operating profits’’ represents audited ‘‘profits before income tax’’ less ‘‘other gains’’ (or equivalent item); ‘‘total profits’’ represents audited ‘‘profits before income tax’’.
Peer companies in the same industry are classified as ‘‘Real Estate operating company’’ according to the fourlevel industry classification of Wind and as ‘‘Property Services and Management’’ by the Stock Exchange, and the average value is calculated as an arithmetic average. Wind Information Co., Ltd.* (萬得信息技術股份有限公司) (‘‘Wind’’), is a leading financial software service company in the PRC, and it has developed a series of financial data professional analysis application terminals and a large-scale financial engineering and financial data warehouse.

Benchmark companies are selected from companies listed on the Stock Exchange or PRC stock exchanges in the industry similar to the Company’s principal business. During the annual evaluation, in the event of industrial peers or benchmark companies being delisted, prolonged suspension of trading or failure to disclose annual report when the board is considering the fulfilment of the Conditions for Lock-up Release for each tranche, or removed out of the above industry according to the industry classification standard of the Wind, major changes in the principal business, disposal or acquisition of assets with significant impact on operating income and net profit, major asset reorganization or deviation from the extreme value of the benchmarks, the Board will remove or replace the benchmarks during the year-end evaluation.

– 9 –

LETTER FROM THE BOARD

Performance targets of the Company are calculated by excluding the share-based payment expenses incurred as a result of the Incentive Scheme and any other schemes.

Upon satisfaction of the Conditions for Lock-up Release, the Company will procure lockup release collectively for the Restricted Shares that have satisfied the Conditions for Lock-up Release and they shall be vested simultaneously. In such case, the management expenses arising from the Incentive Scheme will be borne by the Company; the relevant personal income tax will be borne by the respective Incentive Recipients and paid by the Company on their behalf (if applicable). The Remuneration Committee shall assess whether performance target of the Company has been achieved through (a) reports prepared based on the Company’s audited financial statements; and (b) opinions issued by third-party financial advisor(s) on whether the Company achieved the performance targets.

None of the Restricted Shares has a vesting period which is less than 12 months. Pursuant to relevant policies regulating share incentive schemes of state-owned enterprises in the PRC, the lock up period of the Restricted Shares shall not be less than 24 months. The Lock-up Period therefore satisfies such requirement and shall prevent any possible short-sighted behaviors by the Incentive Recipients to boost the Group’s short-term performance at the expense of the Company’s long-term growth. The vesting period of the Incentive Scheme is in line with market practice whereby share awards are vested in batches over years based on the Company’s medium to long term development goals and the vesting mechanism of the Incentive Scheme would make the remuneration package of the Group more attractive such that the Group would be in a more advantageous position to retain talents to continuously serve the Group. As such, the Board is of the view that the Lock-up Period aligns with the purpose of the Incentive Scheme.

Further, performance targets of the Company are made after considering:

(a) the relevant policies regulating share incentive schemes of state-owned enterprises in the PRC, under which the performances targets shall reflect:
(i) sustainability of the Company’s growth, as measured by the growth rate of revenue or total market value;
(ii) the Company’s return to the shareholders and value creating ability, as measured by the economic value added; and
(iii) the Company’s earnings quality, as measured by the ratio of operating profits to total profits;
(b) the Company and benchmark companies’ historical performances;
(c) the Company’s pro forma financial information, which was projected based on the Company’s current operations; and
(d) the current and expected trends of the market and the industry movements.

– 10 –

LETTER FROM THE BOARD

Therefore, the performance targets of the Company under the Incentive Scheme remain feasible based on the Group’s current operating conditions and future potential, and at the same time pose challenges to the Group in light of competition within the industry and difficulties in the macroeconomic environment which shall motivate all Incentive Recipients to work towards the long term development of the Group as a whole. In order to achieve such performance target, the Group shall also outperform a number of benchmark companies, which can be done only through the Incentive Recipients’ dedicated effort. The individual performance evaluation requirement would also stimulate the enthusiasm of the Incentive Recipients, so that they can exert their maximum value through their roles and contribute to the realization of the Group’s long term business goals. Given the above, the Board is of the view that the performance targets aligns with the purpose of the Incentive Scheme.

The Restricted Shares not satisfying the Conditions for Lock-up Release shall not be released from the lock-up restrictions, and the Company will instruct the Trustee to repurchase the Restricted Shares of the Incentive Recipients not yet released from lock-up restrictions pursuant to the principles set out in the Incentive Scheme, and the repurchase price shall not be higher than the lower of the Grant Price and market price of the Shares (i.e. the closing price of the Shares as at the date of approval of such repurchase by the Board). The Trustee will dispose the Restricted Shares not yet released from lock-up and the related assigned interests, if any, and the Company will retain such proceeds.

Lapse

A. Lapse due to the Company’s Issues

(I) Termination of the Incentive Scheme

In the case that:

the Company does not engage an accountant firm to carry out audit work in accordance with the relevant procedures and requirements;
the certified accountant issues an adverse opinion or disclaimer opinion with respect to the Company’s annual report and internal control evaluation report;
the state-owned asset supervision and administration institution or audit department issues major objection to the Company’s performance or annual report;
the Company is subject to disciplinary actions by the securities regulatory and administrative institutions and other relevant bodies for major violation of rules and regulations; or
situations occur where laws and regulations prohibit the execution of share incentives;

– 11 –

LETTER FROM THE BOARD

the Incentive Scheme shall be terminated, and the Restricted Shares not yet released from lock-up shall not be released from lock-up and shall be repurchased by the Trustee at the instruction of the Company at the Repurchase Price.

Should the Company decide to terminate the Incentive Scheme even if such events did not occur, such proposal (including the treatment of Restricted Shares granted under the Incentive Scheme but not yet released from lock-up) shall be submitted to the general meeting for Shareholders’ approval.

(II) Merger, separate establishment, or change of control of the Company

In the case that any merger and/or separate establishment happens to the Company or there is any change of control of the Company, the Incentive Scheme shall be executed in normal.

(III) False Disclosure of the Company

If any Condition of Grant or Condition for Lock-up Release of the Restricted Shares is not met due to false records, misleading statements, or significant omissions, the Restrictive Shares not yet released from lock-up shall not be released from lock-up and shall be repurchased by the Trustee at the instruction of the Company at the Repurchase Price.

In relation to the vested Restricted Shares, all Incentive Recipients shall transfer such Shares to the Trustee at the Repurchase Price. The Incentive Recipients not responsible for the occurrence of the above and incurring losses for such returning of Shares may, in accordance with the relevant arrangements of the Incentive Scheme, claim compensations against the Company or the responsible Incentive Recipients. The Board shall recover all the profits gained by the Incentive Recipients in accordance with the relevant arrangements of the Incentive Scheme and shall not grant new Shares to the responsible Incentive Recipients.

B. Lapse due to the Incentive Recipients’s Issues

(I) Change of duties of Incentive Recipients

If an Incentive Recipient changes his/her job position but still works in the Group or is assigned by the Company, the Restricted Shares granted to him/her shall be subject to such procedures as stipulated in the Incentive Scheme which takes effect before the change of his/her position.
If an Incentive Recipient is reassigned to work in Xiamen C&D Corporation Limited and its subsidiaries and branches (apart from the Group) due to organizational arrangements, the Board has the right to make decisions on the handling of the interests granted to such Incentive Recipient based on his/her reassignment.

– 12 –

LETTER FROM THE BOARD

If an Incentive Recipient becomes an independent non-executive Director or other personnel who is not qualified to hold the Restricted Shares, the Restricted Shares having been released from lock-up shall maintain the status quo, and the Restricted Shares granted but not yet released from lock-up shall not be released from lock-up and shall be repurchased by the Trustee at the instruction of the Company at a price equal to the sum of the Grant Price plus the interest of the bank deposit for the same period calculated at the benchmark deposit interest rate announced by the People’s Bank of China at the time of repurchase.

(II) Departure of Incentive Recipients

If the employment contracts of Incentive Recipients have expired and are not renewed or the Incentive Recipients tender their resignation, or the Incentive Recipients leave the Company for reasons such as violation of laws and disciplines, failure to performance during contract period or termination of contracts by agreement, the Restricted Shares having been released from lockup shall maintain the status quo, and the Restricted Shares not released from lockup shall not be released from lock-up and shall be repurchased by the Trustee at the instruction of the Company at the Repurchase Price.
If the Incentive Recipients depart passively due to reasons such as layoff by the Company and did not fail in the performance appraisal, commit misconduct or breached any laws or regulations, the Restricted Shares having been released from lock-up shall maintain the status quo, and the Restricted Shares not released from lock-up shall not be released from lock-up and shall be repurchased by the Trustee at the instruction of the Company at a price equal to the sum of the Grant Price plus the interest of the bank deposit for the same period calculated at the benchmark deposit interest rate announced by the People’s Bank of China at the time of repurchase.

(III) Retirement of Incentive Recipients

If an Incentive Recipient leaves the Company due to retirement before the Board decides whether the Conditions for Lock-up Release has been fulfilled and the Incentive Recipient has passed his/her individual performance evaluation, the Restricted Shares not released from lock-up in relation to which the performance target of such year has been met may be exercised within half year from the date of the Board’s decision as to whether the conditions for lock-up release of the Restricted Shares has been fulfilled.

Alternatively, if an Incentive Recipient leaves the Company due to retirement after the Board decides whether the Conditions for Lock-up Release has been fulfilled, the Restricted Shares not released from lock-up in relation to which the performance target of such year has been met may be exercised within half year from the date of his/her departure. In all situations, Restricted Shares which do not satisfy performance target or those which are still subject to lock-up shall be repurchased

– 13 –

LETTER FROM THE BOARD

by the Trustee at the instruction of the Company at a price equal to the sum of the Grant Price plus the interest for the same period calculated at the benchmark deposit rate announced by the People’s Bank of China at the time of repurchase.

(IV) Incapacity of Incentive Recipients

In the case that an Incentive Recipient is incapacitated due to performance of duties and leaves the Company, the Restricted Shares granted shall be subject to such procedures as stipulated in the Incentive Scheme which takes effect before the occurrence thereof, and the personal performance evaluation results will no longer be included in the Conditions for Lock-up Release.
If an Incentive Recipient is not incapacitated while executing his/her duties and leaves the Company, the Restricted Shares having been released from lock-up shall maintain the status quo. By the time when the Incentive Recipient is incapacitated, if the Board has not decided whether the conditions for lock-up release of the Restricted Shares has been fulfilled and the Incentive Recipient has passed his/her individual performance evaluation, the Restricted Shares granted but not yet released from lock-up in relation to which the performance target of such year has been met may be exercised within half year from the date of the Board’s decision as to whether the conditions for lock-up release of the Restricted Shares has been fulfilled. Alternatively, if the Incentive Recipient is incapacitated after the Board decides whether the conditions for lock-up release of the Restricted Shares has been fulfilled, the Restricted Shares granted but not yet released from lock-up in relation to which the performance target of such year has been met may be exercised within half year from the date of his/ her departure. In all situations the Restricted Shares in relation to which the performance target has not been met shall not be released or those which are still subject to lock-up shall be repurchased by the Trustee at the instruction of the Company at a price equal to the sum of the Grant Price plus the interest for the same period calculated at the benchmark deposit rate announced by the People’s Bank of China at the time of repurchase.

(V) Death of Incentive Recipients

If an Incentive Recipient deceases due to performance of duties, the Restricted Shares granted to him/her shall be held by his/her appointed beneficiaries or lawful successors and shall be subject to such procedures as stipulated in the Incentive Scheme which takes effect before his/her death, and the personal performance evaluation requirement will no longer be included in the Conditions for Lock-up Release.
If an Incentive Recipient deceases due to reasons other than performance of duties, the interests granted to him/her shall be enjoyed by his/her appointed beneficiaries or lawful successors. By the time when the Incentive Recipient deceases, if the Board has not decided whether the conditions for lock-up release of the Restricted Shares has been fulfilled and the Incentive Recipient has passed his/her individual performance evaluation, the Restricted Shares

– 14 –

LETTER FROM THE BOARD

granted but not yet released from lock-up in relation to which the performance target of such year has been met may be exercised within half year from the date of the Board’s decision as to whether the conditions for lock-up release of the Restricted Shares has been fulfilled, thereafter the interest lapses. Alternatively, if the Incentive Recipient deceases after the Board decides whether the conditions for lock-up release of the Restricted Shares has been fulfilled, the Restricted Shares granted but not yet released from lock-up in relation to which the performance target of such year has been met shall be exercised by his/her appointed beneficiaries or lawful successors within half year from the date of occurrence of the situation (or exercisability), thereafter the interest lapses. In all situations the Restricted Shares in relation to which the performance target has not been met or those which are still subject to lockup shall not be released and shall be repurchased by the Trustee at the instruction of the Company at a price equal to the sum of the Grant Price plus the interest for the same period at the bench mark deposit rate announced by the People’s Bank of China, and the proceeds from the repurchase shall be received by his/her appointed beneficiaries or lawful successors.

(VI) Change of control of the subsidiaries where the Incentive Recipients work

If the Incentive Recipients work in the Company’s subsidiaries, and the Company loses control of such company while, the Restricted Shares having been released from lock-up shall maintain the status quo, and the Restricted Shares granted but not yet released from lock-up shall not be released from lock-up and shall be repurchased by the Trustee at the instruction of the Company at a price equal to the sum of the Grant Price plus the interest of the bank deposit for the same period calculated at the benchmark deposit interest rate announced by the People’s Bank of China at the time of repurchase.

(VII)Clawback Mechanism

If an Incentive Recipient whose job position has changed as a results of acts that are detrimental to the Company’s interests or reputation such as violation of laws, professional ethics, leak of confidential information of the Company, failure to discharge his/her duties or a willful misconduct, or termination of employment contract of the Incentive Recipient by the Company for any of the above reasons, the Restricted Shares having been released from lock-up shall maintain the status quo, and the Restricted Shares granted but not yet released from lock-up shall not be released from lock-up and shall be repurchased by the Trustee at the instruction of the Company at the Repurchase Price.

Further, if the Incentive Recipient is a Director or senior management of the Company and was involved in the abovementioned situations, Restricted Shares released from lockup and all profit realized from the Incentive Scheme shall be returned to the Company.

– 15 –

LETTER FROM THE BOARD

Conditions

Allotment and issue of Restricted Shares to the Incentive Recipients is conditional upon:

(i) the Incentive Scheme being reviewed and approved by the relevant regulatory authorities, including State-owned Assets Supervision and Administration Committee of Xiamen Municipal (or any institution(s) with its authorization);
(ii) the Incentive Scheme being approved by the Shareholders at the EGM; and
(iii) the Listing Committee granting the listing of, and permission to deal in the Restricted Shares.

The Company will apply to the Listing Committee for the listing of, and permission to deal in, up to 40,000,000 new Shares to be alloted and issued.

Others

Any modification of the Incentive Scheme after it has been approved at the EGM (including the termination of the Incentive Scheme before the end of the scheme’s life) shall be submitted to a general meeting for consideration, and shall not involve circumstances that will lead to acceleration of lock-up release and reduction of Grant Price. Save as (i) material terms of the Incentive Scheme; and (ii) provisions regarding the matters set forth in Rule 17.03 of the Listing Rules (including the termination of the Incentive Scheme before the end of the scheme’s life), the Board may amend any other terms of the Incentive Scheme.

There are no provisions for the cancellation of the Restricted Shares under the Incentive Scheme.

GRANT OF RESTRICTED SHARES PURSUANT TO THE INCENTIVE SCHEME

On 7 November 2023, the Board has approved, subject to (i) the approval of the Incentive Scheme at the EGM, and (ii) subscription of the Incentive Recipients and other conditions, the grant of not more than 40,000,000 Restricted Shares (the exact number is subject to the actual level of subscription) to a total of not more than 391 Incentive Recipients, of which (i) 38,800,000 Restricted Shares are proposed to be granted to 389 Incentive Recipients (excluding Directors); and (ii) 1,200,000 Restricted Shares are proposed to be granted to two Directors.

– 16 –

LETTER FROM THE BOARD

Further information regarding the Restricted Shares proposed to be granted pursuant to the Incentive Scheme is set out below:

Date which the Board approved the grant:

7 November 2023

Number of Restricted Shares granted:

Not more than 40,000,000 Restricted Shares (the exact number is subject to the actual level of subscription), representing approximately 2.92% of the total issued Shares as at the date of the Announcement, are proposed to be granted to 391 Incentive Recipients. Upon the grant of the Restricted Shares, no Shares are available for future grants under the Incentive Scheme. The Remuneration Committee has the right to make any corresponding adjustments to the final list of Incentive Recipients based on the actual level of subscription by the Incentive Recipients. The Company will comply with the relevant disclosure obligations in a timely manner in accordance with the Listing Rules. The maximum nominal value of the Restricted Shares is HK$400,000.

The above grant would not result in the Shares issued and to be issued in respect of all Restricted Shares and share awards granted to each Incentive Recipient in the 12-month period up to and including the date which the Board approved the grant in aggregate to be over 1% of the Shares in issue.

Grant of Restricted Shares:

The Board may grant the Restricted Shares to the Incentive Recipients only after the Conditions of Grant under the Incentive Scheme have been fulfilled. The grant of the relevant Restricted Shares to the Incentive Recipients is subject to, among other things, the payment of the relevant subscription monies at the Grant Price to the Company.

Grant Price:

HK$1.87 per Share

Lock-up period and performance target:

Please refer to the section headed ‘‘Lock-up Period and arrangement for lock-up release’’ above.

– 17 –

LETTER FROM THE BOARD

Clawback mechanism:

The Restricted Shares are subject to clawback mechanism as set out in the terms of the Incentive Scheme, in particular, the repurchase of the unvested Restricted Shares held by the Trustee at the Repurchase Price if the Incentive Recipient is in violation of laws, disobeys professional ethics, leaks confidential information of the Company, damages the interest or reputation of the Company as a result of his/her failure to discharge duties or wilful misconduct, or upon cessation of employment of the Incentive Recipient due to any of the abovementioned reasons. Further, if the Incentive Recipient is a Director or senior management of the Company and was involved in the abovementioned situations, Restricted Shares released from lockup and all profit realized from the Incentive Scheme shall be returned to the Company.

Market price of the Shares:

(i) The closing price of the Shares as quoted on the Stock Exchange on the date of the Announcement was HK$3.73 per Share, to which the Grant Price represents a discount of 49.87%; and (ii) the average closing price of the Shares for the five consecutive trading days immediately preceding the date of the Announcement as quoted on the Stock Exchange was HK$3.424 per Share, to which the Grant Price represents a discount of 45.39%.
Market value of Restricted Shares:
On the basis of the closing price of HK$3.73 per Share as quoted on the Stock Exchange on the date of the Announcement, the market value of 40,000,000 Restricted Shares will be HK$149,200,000.
Financial assistance:
The Group has not provided any financial assistance to the Incentive Recipients for the purchase of Shares under the Incentive Scheme.
Status of Restricted Shares:
The Restricted Shares, when issued and fully paid, shall rank pari passu with the Shares allotted and issued.
Identity of allottees:
The Trustee shall hold the Restricted Shares on trust for the relevant Incentive Recipients until such Restricted Shares are vested to the relevant Incentive Recipients under the Incentive Scheme.

The Board will appoint the Trustee, who shall be an independent third party, to hold the Restricted Shares and manage the Trust for the benefits of the Incentive Recipients and in accordance with the terms and conditions of the Deed of Trust.

– 18 –

LETTER FROM THE BOARD

The Trustee holding the unvested Restricted Shares shall abstain from voting on matters that require shareholders’ approval under the Listing Rules, unless otherwise required by law to vote in accordance with the beneficial owner’s direction and such a direction is given.

The Trustee is a wholly-owned subsidiary of BOC International Holdings Limited which is a group company of Bank of China Limited (stock code: 3988). The Trustee is a licensed trustee in Hong Kong (TCSP Licence No.: TC002392) to carry on a trust or company services business in Hong Kong. All current directors of the Trustee are employees of BOC International Holdings Limited or its subsidiaries and none of the directors has any interest in the Trustee. The Directors do not have any direct or indirect interest in the Trustee, or have any role or position in the Trustee.

Allocation of Restricted Shares

The Restricted Shares are proposed to be granted to the following Incentive Recipients:

Name Positions Tenure (years)* Roles & Responsibilities Ms. Qiao Haixia Executive Director and chief executive officer 3 Overall strategic planning and daily management of the Group Mr. Huang Danghui Executive Director 3 Daily management of the Group 389 Incentive Recipients Employees of the Group who are not a Director N/A N/A Total	Number of Restricted Shares to be granted (exact number subject to actual level of subscription) 600,000 600,000 38,800,000 40,000,000	Percentage in the issued share capital of the Company as the Latest Practicable Date 0.04% 0.04% 2.83%
		2.92%

The tenure was calculated from the date when the Company was listed on the Stock Exchange in December 2020.

– 19 –

LETTER FROM THE BOARD

Allocation of Restricted Shares to each Director was determined by the Remuneration Committee after considering (i) each of the executive Directors’ position, tenure, contributions, and responsibility; (ii) their managerial role in the Group’s normal and daily business course; (iii) the importance of each executive Director to the Board’s decision-making process as a whole; and (iv) the Incentive Scheme shall grant the majority of the Restricted Shares to midto base-level managers which excludes senior management of the Company.

Since each executive Director plays a vital role to the Group’s operation as well as the Board’s decision-making; and devoted their efforts and made vital and irreplaceable contributions to the Group, the Board is of the view that the proposed grant to each Director is fair and reasonable.

INFORMATION ABOUT THE COMPANY

The Company is a BVI business company incorporated in the BVI with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange. The Group is principally engaged in property management services, community value-added and synergy services, value-added services to non-property owners and commercial property operation management services in the PRC.

REASONS FOR AND BENEFITS OF PROPOSED ADOPTION OF INCENTIVE SCHEME AND GRANTING OF RESTRICTED SHARES

The Remuneration Committee has reviewed the Incentive Scheme and having considered (i) qualification of the Incentive Recipients; (ii) the total number of the Restricted Shares to be issued and the number to be allocated to each Incentive Recipient according to his/her eligibility; (iii) the Conditions for Lock-up; and (iv) similar incentive schemes of state owned enterprises, the Remuneration Committee is of the view that the terms of the Incentive Scheme are fair and reasonable and recommended the Board to approve the adoption of the Incentive Scheme.

The Board is of the view that the adoption of the Incentive Scheme the grant of Restricted Shares to the Incentive Recipients will facilitate the establishment and improvement of the Company’s medium to long-term incentive mechanism to integrate interests of the Shareholders, the Company and the Company’s core staff collectively, fully motivate the management and core staff of the Company, and achieve high-quality development of the Company. As such, the Board considers that the terms of the Incentive Scheme are fair and reasonable and in the interests of the Company and the Shareholders as a whole. The Directors (including the independent non-executive Directors) consider the granting of Restricted Shares to the Incentive Recipients (including Ms. Qiao Haixia and Mr. Huang Danghui) are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

– 20 –

LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS

Pursuant to Chapter 17 of the Listing Rules, the Incentive Scheme will constitute a share scheme involving the grant of new shares and share schemes involving the grant of new shares must be approved by the Shareholders at the EGM. Accordingly, the proposed adoption of the Incentive Scheme will be subject to the Shareholders’ approval at the EGM. The Company will convene the EGM to consider and, if thought fit, approve the adoption of the Incentive Scheme.

Pursuant to Rule 17.04(1) of the Listing Rules, the grant of Restricted Shares by the Company to any Director, chief executive, or substantial shareholder(s) of the Company or any of their respective associates must be approved by the independent non-executive Directors. The grant of Restricted Shares to Ms. Qiao Haixia and Mr. Huang Danghui has been reviewed and approved by the independent non-executive Directors accordingly.

SHAREHOLDING STRUCTURE OF THE COMPANY

The following table sets out the Company’s shareholding structure (i) as at the Latest Practicable Date; and (ii) immediately upon the allotment and issue of 40,000,000 Restricted Shares (assuming there will be no other changes to the shareholding structure of the Company from the Latest Practicable Date):

Name of Shareholder Well Land International Limited (益能國際有限公司) C&D International (Note 1) Diamond Firetail Limited (Note 2) Trustee — 2021 Restricted Shares (Note 3) — Restricted Shares Ms. Qiao Haixia (Note 4) Mr. Huang Danghui (Note 4) Public Shareholders Total	As at the Latest Practicable Date Number of issued Shares/ underlying Shares held Approximate percentage in the issued share capital of the Company 308,106,030 22.47% 521,211,364 38.02% 53,918,090 3.93% 23,090,000 1.68% — — 272,000 0.02% 240,000 0.02% 464,196,532 33.86% 1,371,034,016 100.00%	Immediately upon the allotment and issue of Restricted Shares Number of issued Shares/ underlying Shares held Approximate percentage in the issued share capital of the Company 308,106,030 21.84% 521,211,364 36.94% 53,918,090 3.82% 23,090,000 1.64% 40,000,000 2.83% 272,000 0.02% 240,000 0.02% 464,196,532 32.90% 1,411,034,016 100.00%	Immediately upon the allotment and issue of Restricted Shares Number of issued Shares/ underlying Shares held Approximate percentage in the issued share capital of the Company 308,106,030 21.84% 521,211,364 36.94% 53,918,090 3.82% 23,090,000 1.64% 40,000,000 2.83% 272,000 0.02% 240,000 0.02% 464,196,532 32.90% 1,411,034,016 100.00%
			100.00%

– 21 –

LETTER FROM THE BOARD

Note 1: Pursuant to the voting rights entrustment agreement dated 29 March 2022, Well Land entrusted C&D International to exercise voting rights of 219,945,505 Shares (adjusted after the issuance of 27,722,910 scrip shares on 7 July 2023 according to the Company’s 2022 Scrip Dividend Scheme) directly held by Well Land, while Well Land continues to beneficially own the said Shares and have rights to the dividends, distributions and all other rights and benefits attaching thereto.
Note 2: Diamond Firetail Limited is a wholly-owned subsidiary of Tricor Equity Trustee Limited (‘‘Tricor Equity Trustee’’). Tricor Equity Trustee is a trustee of a discretionary trust, while Mr. Lin Weiguo is one of the protectors of the said discretionary trust. Ms. Qiao Haixia, Mr. Huang Danghui and Mr. Xu Yixuan are beneficiaries of the said discretionary trust. Therefore, Mr. Lin Weiguo is deemed to be interested in the Shares held by Diamond Firetail by virtue of the SFO. As a beneficiary of the trust, each of Ms. Qiao Haixia, Mr. Huang Danghui and Mr. Xu Yixuan is deemed to be beneficially interested in the portion of the Shares held by Diamond Firetail corresponding to their respective beneficial interest.
Note 3: All incentive recipients under the 2021 Incentive Scheme are employee participants. Being the incentive recipients of the 2021 Incentive Scheme, each of Ms. Qiao Haixia and Mr. Huang Danghui is interested in 360,000 and 360,000 Shares held on trust by the Trustee respectively, which are subject to vesting.
Note 4: These shares are held by Ms. Qiao Haixia and Mr. Huang Danghui in their capacity as beneficial owner.
Note 5: Save as the Restricted Shares, no Shares may be issued pursuant to any share scheme of the Company.

The theoretical dilution effect of the issue of 40,000,000 Restricted Shares is approximately 1.84%, hence it will not result in a theoretical dilution effect of 25% or more under Rule 7.27B of the Listing Rules.

2021 Incentive Scheme

As of the Latest Practicable Date, the 2021 Incentive Scheme remains in force. The Company was allowed to grant 35,300,000 2021 Restricted Shares to incentive recipients thereunder, and the 2021 Restricted Shares were fully granted in two batches pursuant to a specific mandate. The validity period of the 2021 Incentive Scheme shall end on the date which all conditions for lock-up have been satisfied or all 2021 Restricted Shares were repurchased, which shall be no later than 26 September 2031.

On 4 November 2021 (the ‘‘First Grant Date’’), 28,250,000 restricted shares were granted to 168 incentive recipients (including two executive Directors). Restricted shares granted thereunder were subject to a lock-up period of two to four years from the First Grant Date, and they shall be released in three batches upon satisfaction of the Company’s performance target and individual performance evaluation. As at the Latest Practicable Date, 10,760,000 2021 Restricted Shares granted on the First Grant Date were released from lock-up, and 16,140,000 2021 Restricted Shares granted to 161 employee participants are still subject to lock-up.

On 28 March 2023 (the ‘‘Second Grant Date’’), 7,050,000 restricted shares were granted to 97 incentive recipients. Restricted shares granted thereunder were subject to a lock-up period of two to four years from the Second Grant Date, and they shall be released in three batches upon satisfaction of the Company’s performance target and individual performance evaluation. As at the Latest Practicable Date, 6,950,000 2021 Restricted Shares granted on the Second Grant Date to 96 employee participants are still subject to lock-up.

– 22 –

LETTER FROM THE BOARD

Persons who are incentive recipients under both the 2021 Restricted Incentive Scheme and the Incentive Scheme have subscribed for 32,900,000 2021 Restricted Shares (representing 2.40% of the issued share capital of the Company as at the Latest Practicable Date) and are entitled to subscribe 28,110,000 Restricted Shares (representing 2.05% of the issued share capital of the Company as at the Latest Practicable Date, and the exact number is subject to the actual level of subscription).

Having considered (i) the long-term benefits arising from the grant of the Restricted Shares, which is to promote the Group’s future growth and create value for Shareholders, and aligns with the interest of Shareholders as a whole outweigh the dilution effect as the maximum number of the Shares to be issued represent approximately 2.92% of the issued share capital as of the Latest Practicable Date, which only a has minor dilution effect on other Shareholders, and (ii) the Company’s objective to motivate its key employees to support its growth plans, the Board considers that the theoretical dilution effect to be reasonable and in the interest of the Shareholders as a whole.

DOCUMENT ON DISPLAY

A copy of the rules of the Incentive Scheme will be published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.cndservice.com) from the date of this circular up to 14 days (inclusive) thereafter.

EXTRAORDINARY GENERAL MEETING

The EGM will be held by the Company at Room 3517, 35th Floor, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong on Thursday, 21 December 2023 at 10:00 a.m., to consider and if thought fit, to approve, among other things, the Incentive Scheme. A form of proxy for use at the EGM is enclosed with this circular. As each of Ms. Qiao Haixia and Mr. Huang Danghui will be an Incentive Recipient if the Incentive Scheme is approved, each of them and Diamond Firetail will voluntarily abstain from voting on the resolution at the EGM. As of the Latest Practicable Date, Ms. Qiao Haixia and Mr. Huang Danghui (excluding each of their interest in Diamond Firetail) were interested in 272,000 and 240,000 Shares, respectively (representing approximately 0.02% and 0.02% of the issued share capital, respectively), and Diamond Firetail was interested in 53,918,090 issued Shares (representing approximately 3.93% of the issued share capital). Save as disclosed above and to the best knowledge of the Directors, as at the Latest Practicable Date, no Shareholder is required to abstain from the resolution to approve the Incentive Scheme proposed in the EGM.

The notice convening the EGM is set out on pages N-1 to N-2 of this circular.

– 23 –

LETTER FROM THE BOARD

For those who intend to direct a proxy to attend the EGM, please complete the form of proxy and return the same in accordance with the instructions printed thereon. In order to be valid, the above documents must be delivered to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong not less than 48 hours before the time appointed for the EGM or any adjournment thereof. The register of members of the Company will be closed from Monday, 18 December 2023 to Thursday, 21 December 2023 (both days inclusive), during which time no share transfers will be effected. In order to qualify for attending the EGM or any adjournment thereof, all transfers of Shares accompanied by the relevant share certificate(s) must be lodged with the Company’s branch share registrar and transfer office in Hong Kong at the above address by no later than 4:30 p.m. on Friday, 15 December 2023. The holders of the Shares whose names appear on the register of members of the Company on Thursday, 21 December 2023 are entitled to attend and vote in respect of the resolution to be proposed at the EGM.

You are urged to complete and return the form of proxy whether or not you will attend the EGM. Completion and return of the form of proxy will not preclude you from attending and voting at the EGM (or any subsequent meetings following the adjournments thereof) should you wish to do so. Attending and voting at the Extraordinary General Meeting or any adjournment thereof if you so wish and, in such event, the form of proxy shall be deemed to be revoked.

RECOMMENDATION

The Directors (including the independent non-executive Directors) consider that the adoption of the Incentive Scheme is in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of all the resolution to be proposed at the Extraordinary General Meeting.

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the 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 circular 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 circular misleading.

– 24 –

LETTER FROM THE BOARD

VOTE BY POLL

In accordance with the articles of association of the Company, all the votes in the EGM must be taken by poll. The methods of Shareholders’ votes at the EGM will be conducted by the combination of on-site voting and online voting.

FURTHER INFORMATION

Your attention is also drawn to the general information set out in the Appendix to this circular.

Yours faithfully,

By Order of the Board

C&D Property Management Group Co., Ltd 建發物業管理集團有限公司 Lin Weiguo

Chairman and Non-executive Director

– 25 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

The following is a summary of the principal term of the Incentive Scheme to be approved at the Extraordinary General Meeting. It does not form part of, nor is it intended to be part of, the rules of the Incentive Scheme and it should not be taken as affecting the interpretation of the rules of the Incentive Scheme.

KEY TERMS OF INCENTIVE SCHEME

1. PURPOSE

The purpose of the Incentive Scheme is to establish and improve the Company’s medium to long-term incentive mechanism to integrate interests of the Shareholders, the Company and the Company’s core team, fully motivate the management and core staff of the Company and achieve high-quality development of the Company. The Company has established the Incentive Scheme in accordance with relevant laws, regulations and regulatory documents, such as the Listing Rules, as well as its articles of association.

2. ADMINISTRATION AUTHORITIES

The EGM, as the highest authority of the Company, is responsible for considering and approving the implementation, modification and termination of the Incentive Scheme. The EGM may delegate some matters related to the Incentive Scheme to the Board within its authority.
The Board is the executive and management body of the Incentive Scheme and is responsible for the implementation of the Incentive Scheme. The remuneration committee of the Board is responsible for formulating and revising the Incentive Scheme and reporting to the Board of the Company for consideration; after consideration and approval of the Incentive Scheme by the Board, it will be submitted to the EGM of the Company for approval and relevant matters of the Incentive Scheme will be handled under authorization of the EGM.
The independent Directors are the supervisory body of the Incentive Scheme and shall express their opinions on whether the Incentive Scheme is conducive to the sustainable development of the Company and whether there are circumstances that are obviously prejudicial to the interests of the Company and all shareholders.

3. INCENTIVE RECIPIENTS

– 26 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

The list of qualified Incentive Recipients under the Incentive Scheme shall be determined by the Remuneration Committee and considered and approved by the Board. The Remuneration Committee has the right to make any corresponding adjustments to the final list of Incentive Recipients based on the actual level of subscription by the Incentive Recipients.

The Incentive Scheme intends to initially grant Restricted Shares to a total of not more than 391 Incentive Participants, including:

(1) Directors and senior management of the Company;
(2) Core staff of the Company;

Among the above Incentive Recipients, the Directors and senior management of the Company must be elected at a general meeting of the Company or appointed by the Board. Each Incentive Recipient must have entered into an employment contract or engagement contract with the Company or its subsidiaries during the Evaluation Period of the Incentive Scheme.

The following personnel are not qualified as Incentive Recipients:

(1) Personnel not working for the Company or its controlled subsidiaries or not assigned by the Company or its controlled subsidiaries;
(2) Personnel acting as independent non-executive Director;
(3) Shareholders or de facto controllers who individually or collectively hold more than 5% of Shares of the Company and their respective spouses, parents or children;
(4) Personnel prohibited to become Incentive Recipients under requirement of Stateowned assets supervision and administration agencies and securities supervision and administration agencies;
(5) Personnel not qualified as Incentive Recipients under the Listing Rules and relevant laws, regulations and regulatory documents, regarding implementation of equity incentives by the PRC State-controlled listed companies and the articles of association of the Company.

If any of the above circumstances occurs on Incentive Recipients during the implementation of the Incentive Scheme, the Company will terminate respective right to participate in the Incentive Scheme and instruct the Trustee to repurchase the Restricted Shares granted but not yet released from lock-up. After consideration and approval of the Incentive Scheme by the Board, the Company will announce internally the names and positions of the Incentive Recipients through the Company’s website or other means to fulfill the democratic supervision procedures.

– 27 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

4. INCENTIVE INSTRUMENT

The form of incentive adopted in the Incentive Scheme is Restricted Shares.

5. INCENTIVE SCALE

The number of Restricted Shares proposed to be granted to the Incentive Recipients under the Incentive Scheme is up to 40,000,000 Restricted Shares (the exact number is subject to the actual level of subscription) representing approximately 2.92% of the total issued Shares as at the date of the Announcement and approximately 2.83% of the total issued Shares as enlarged by the allotment and issue of Restricted Shares (assuming there will be no other changes to the shareholding structure of the Company).

The total number of Shares under all effective share scheme(s) of the Company do not exceed 10% of its total issued share capital as at the date of the Announcement. The total number of Restricted Shares to be granted to each Incentive Recipient under the Incentive Scheme, as well as all options and awards granted to such person (excluding any options and awards lapsed in accordance with the terms of the scheme) under all share scheme(s) of the Company to be granted to each Incentive Recipient shall not exceed 1.00% of the total share capital of the Company.

If the Incentive Recipients voluntarily renounce the granted interests for personal reasons, the Board shall adjust the amount of grant accordingly.

The Board is entitled to adjust the amount of interests to be granted within the cap, taking into account factors including the position level and length of service of the Incentive Recipient.

– 28 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

6. GRANT PRICE

The Grant Price of the Restricted Shares shall be determined in accordance with the principle of fair market price. The Grant Price of the Restricted Shares under the Incentive Scheme is HK$1.87 per share. The Grant Price shall not be not less than the higher of:

(1) 50% of the closing price of the Shares as quoted on the Stock Exchange as at the date of the Announcement;
(2) 50% of the average closing price of the Shares as quoted on the Stock Exchange for the five consecutive business days immediately preceding the date of the Announcement; and
(3) the nominal value of a Share.

The Grant Price was determined with reference to relevant policies on the implementation of equity incentive for state-controlled listed companies in the PRC.

7. TIME SCHEDULE

(1) Validity period

The validity period of the Incentive Scheme shall commence from the date of the approval at the Extraordinary General Meeting and end on the date on which all Restricted Shares are released from lock-up or all Restricted Shares are repurchased, which shall be no more than ten years.

(2) Grant Date

Subject to the approval of the Incentive Scheme by the State-Owned Assets Supervision and Administration Commission of the People’s Government of Xiamen Municipality (廈門市人民政府國有資產監督管理委員會) or its authorised units and the approval by the shareholders at the EGM of the Company, the Company will convene a board meeting in due course to complete the granting of interests to the Incentive Recipients in accordance with the relevant regulations.

The Grant Date shall be determined by the Board after approval of the Incentive Scheme at the EGM. The Grant Date must be a trading day, and the determination of the Grant Date shall comply with the relevant regulatory rules, including the Listing Rules, and shall not cause material risks (including but not limited to compliance risks) for the Company.

– 29 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

(3) Lock-up period

All the Restricted Shares granted to the Incentive Recipients are subject to different lock-up periods of 24 months, 36 months and 48 months respectively from the Grant Date.

(4) Arrangement of lock-up release

The following table shows the arrangement of lock-up release for Restricted Shares to be granted under the Incentive Scheme:

		Percentage of
Arrangement of		lock-up
lock-up release	Lock-up release period	release
First lock-up	From the first trading day after 24 months from	40%
release	the Grant Date to the last trading day within
	36 months from the Grant Date
Second lock-up	From the first trading day after 36 months from	30%
release	the Grant Date to the last trading day within
	48 months from the Grant Date
Third lock-up	From the first trading day after 48 months from	30%
release	the Grant Date to the last trading day within
	60 months from the Grant Date

– 30 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

8. PERFORMANCE TARGET FOR LOCK-UP RELEASE

(1) Performance target of the Company

The Restricted Shares shall be released from lock-up subject to the fulfillment of the following performance conditions by the Company:

For the Incentive Scheme, in the three accounting years from 2024 to 2026, the Company will evaluate its performance indicators of respective year to meet the performance evaluation target (as one of the Conditions for Lock-up Release of Incentive Recipients for the respective year), the specific evaluation conditions are as follows:

Arrangement of lock-up
release	Condition
First lock-up release	(1)	Economic value added of the Company shall
		not be lower than RMB180 million;

(2) Based on the total market value of the Company for the year ended 31 December 2022, the growth rate of total market value of the Company shall be not lower than 3% and not lower than the industry average or 75% of the benchmark companies, or based on the Company’s revenue for the year ended 31 December 2022, the growth rate of the Company’s revenue shall be not lower than 5% and not lower than the industry average or 75% of the benchmark companies; and
(3) the operating profits of the Company shall not be lower than 75% of the total profits of the Company.
Second lock-up release (1) Economic value added of the Company shall not be lower than RMB185 million;

– 31 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

(2) Based on the total market value of the Company for the year ended 31 December 2022, the growth rate of total market value of the Company shall be not lower than 6% and not lower than the industry average or 75% of the benchmark companies, or based on the Company’s revenue for the year ended 31 December 2022, the growth rate of the Company’s revenue shall be not lower than 10% and not lower than the industry average or 75% of the benchmark companies; and
(3) the operating profits of the Company shall not be lower than 75% of the total profits of the Company.

Third lock-up release

(1) Economic value added of the Company is not lower than RMB190 million;
(2) Based on the total market value of the Company for the year ended 31 December 2022, the growth rate of total market value of the Company shall be not lower than 9% and not lower than the industry average or 75% of the benchmark companies, or based on the Company’s revenue for the year ended 31 December 2022, the growth rate of the Company’s revenue shall be not lower than 15% and not lower than the industry average or 75% of the benchmark companies; and
(3) the operating profits of the Company attributes to not lower than 75% of the total profits of the Company.

– 32 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

Notes:

‘‘Economic value added’’ represents the profit for the year attributed to the equity holders of the Company less average equity attributable to the equity holders of the Company multiplied by capital cost, where the capital cost is calculated at 6% and average equity attributable to the equity holders of the Company = (equity attributable to the equity holders of the Company at the beginning of the year+ equity attributable to the equity holders of the Company at the end of the year)/2; ‘‘revenue’’ represents the audited revenue of the Company; ‘‘total market value’’ represents the arithmetic average of the indicator of the first trading day and the last trading day in last month of the respective year; ‘‘operating profits’’ represents audited ‘‘profits before income tax’’ less ‘‘other gains’’ (or equivalent item); ‘‘total profits’’ represents audited ‘‘profits before income tax’’.
Peer companies in the same industry are classified as ‘‘Real Estate operating company’’ according to the four-level industry classification of Wind and as ‘‘Property Services and Management’’ by the Stock Exchange, and the average value is calculated as an arithmetic average.

Performance targets of the Company are calculated by excluding the share-based payment expenses incurred as a result of the Incentive Scheme and any other schemes.

Upon satisfaction of the Conditions for Lock-up Release, the Company will procure lock-up release collectively for the Restricted Shares that have satisfied the Conditions for Lock-up Release. Management expenses arising thereunder will be borne by the Company; and the relevant individual income tax will be borne by the respective Incentive Recipients and paid by the Company on their behalf (if applicable).

The Restricted Shares not satisfying the Conditions for Lock-up Release shall not be released from the lock-up restrictions, and the Company will instruct the Trustee to repurchase such Shares pursuant to the principles set out in the Incentive Scheme, and the repurchase price shall not be higher than the Grant Price and market price of the Shares (i.e. the closing price of the Shares as at the date of approval of such repurchase by the Board), whichever is lower. The Trustee will dispose the Restricted Shares not released from lock-up and the related assigned interests, if any, and the Company will retain such proceeds.

– 33 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

(2) Selection of benchmark companies

Combining with the Company’s own situation and considering the historical performance of enterprises in the same industry and their relevance to the Company’s main business, the following companies were finally selected as the benchmark companies for the performance evaluation of the Incentive Scheme, as shown in the following table:

Serial	Stock Code	Stock short name
1	0108.HK	GR LIFE STYLE
2	0982.HK	HUAFA PPT SER
3	1778.HK	COLOUR LIFE
4	2869.HK	GREENTOWN SER
5	3319.HK	A-LIVING
6	603506.SH	NACITY SERVIC
7	1755.HK	S-ENJOY SERVICE
8	2168.HK	KAISA PROSPER
9	3316.HK	BINJIANG SER
10	1995.HK	CIFI ES SERVICE
11	3662.HK	AOYUAN HEALTHY
12	6093.HK	HEVOL SERVICES
13	002968.SZ	CHONGQING NEW DAZH
14	9928.HK	TIMES NEIGHBOR
15	9983.HK	CC NEW LIFE
16	1502.HK	FIN STREET PPT
17	1971.HK	RSUN SER
18	6958.HK	ZHENRO SERVICES
19	6989.HK	EXCELLENCE CM
20	0873.HK	SHIMAO SERVICES
21	9666.HK	JINKE SERVICES
22	3913.HK	KWG LIVING
23	1153.HK	JIAYUAN SER
24	6677.HK	SINO-OCEAN SERV
25	2146.HK	ROISERV
26	3658.HK	NEW HOPE SERV
27	6626.HK	YUEXIU SERVICES
28	0606.HK	SCE CM
29	1965.HK	LANDSEA LIFE
30	2215.HK	DEXIN SER GROUP
31	2205.HK	KANGQIAO SER
32	2207.HK	RONSHINE SERV
33	0816.HK	JINMAO SERVICES

– 34 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

(3) Targets of individual performance evaluation

The individual performance evaluation for Incentive Recipients is carried out according to the internal performance evaluation system. The individual performance evaluation results of the Incentive Recipients are divided into two levels: ‘‘qualified’’ and ‘‘unqualified’’, as shown in the below table with the corresponding factors for release from lock-up:

Results of performance evaluation	Qualified	Unqualified
Coefficient of lock-up release	100%	0%

Subject to fulfillment of the Company’s performance targets, if the results of individual performance evaluation of the Incentive Recipients in the previous year was ‘‘qualified’’, all the Restricted Shares of the Incentive Recipients that can be released from lock-up for the corresponding year of the evaluation would be released from lockup; if the results of individual performance evaluation of the Incentive Recipients in the previous year was ‘‘unqualified’’, all the restricted shares of the Incentive Recipients that can be released from lock-up for the corresponding year of the evaluation would not be released, and the Company will instruct the Trustee to repurchase shares, at the Repurchase Price.

9. SOURCE OF SHARES

The Company will issue ordinary Shares to the Incentive Recipients as the source of shares under the Incentive Scheme.

10. SOURCE OF FUND

The source of funds for the Incentive Recipients is the self-funding of the Incentive Recipients.

11. PROCEDURES FOR THE GRANT, LOCK-UP RELEASE AND MODIFICATION AND TERMINATION

(1) Procedures for grant of Restricted Shares

(i) From the date of approval of the Incentive Scheme at the general meeting of the Company, the Board shall hold a meeting to grant incentives to the Incentive Recipients.
(ii) Before granting interests to the Incentive Recipients, the Board shall consider and announce whether the Conditions of Grant set in the Incentive Scheme are fulfilled. The independent Directors shall express their clear opinions at the same time. The law firm shall issue a legal opinion on whether the conditions for the granting of interests to the Incentive Recipients are fulfilled.

– 35 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

(iii) The Company and the Incentive Recipients shall sign the Restricted Share Grant Agreement (限制性股份授予協議書), which stipulates the rights and obligations of both parties.
(iv) Within the period specified by the Company, the Incentive Recipients shall pay the subscription monies for the Restricted Shares to the designated account of the Company in accordance with the requirements of the Company, and default in payment shall be considered as renunciation of Restricted Shares granted to the Incentive Recipients.
(v) The Company shall submit an application to the Listing Committee for the issuance of Restricted Shares to the Incentive Recipients, and the Restricted Shares shall be listed only after approval by the Listing Committee.

(2) Procedures for lock-up release of Restricted Shares

(i) Before the lock-up release, the Company shall confirm whether the Incentive Recipients meet the Conditions for Lock-up Release. The Board shall consider whether the Conditions for Lock-up Release set in the Incentive Scheme are fulfilled, and the independent non-executive Directors shall express their clear opinions at the same time. The Company shall release the Incentive Recipients fulfilling the Conditions for Lock-up Release from lock-up. For Incentive Recipients not yet fulfilling the conditions, the Company shall instruct the Trustee to repurchase the Restricted Shares corresponding to the relevant lockup release.
(ii) The Incentive Recipients may transfer the Restricted Shares released from the lock-up, but the transfer of shares held by the Directors and senior management of the Company shall be conducted in accordance with the provisions of relevant laws, administrative regulations and regulatory documents.

(3) Procedures for modification and termination of the Incentive Scheme

(i) Procedures for modification of the Incentive Scheme
① If the Company can modify the Incentive Scheme before consideration and approval at the EGM, the modification shall be considered and approved by the Board. If the Company modifies the Incentive Scheme which has been considered and approved at the EGM, the modification shall be submitted to the EGM for consideration, and shall not involve circumstances that will lead to acceleration of lock-up release and reduction of Grant Price.

Save as material terms and conditions of the Incentive Scheme; and provisions regarding the matters set forth in Rule 17.03 of the Listing Rules, the Board may amend any terms of the Incentive Scheme.

– 36 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

② The Company shall promptly disclose the reasons and content of the modification, and the independent non-executive Directors shall express their view on whether the modified scheme is conducive to the sustainable development of the Company and whether there are circumstances that are obviously prejudicial to the interests of the Company and all shareholders. The law firm shall express its professional opinion as to whether the modified scheme is in compliance with the Listing Rules and relevant laws and regulations and whether there are circumstances that are obviously prejudicial to the interests of the Company and all shareholders.

(ii) Procedures for termination of the Incentive Scheme

① If the Company proposes to terminate the Incentive Scheme before approval at the EGM, it shall be approved and disclosed by the Board. If the Company terminates the implementation of the Incentive Scheme after the consideration and passing of the Incentive Scheme at the EGM, it shall be submitted to the Board and general meeting for consideration and make disclosure.
② The Company shall promptly disclose the announcement of the resolutions of the EGM or the meeting of the Board. The law firm shall express professional opinion on whether the termination of the Incentive Scheme by the Company is in compliance with the provisions of the Listing Rules and relevant laws and regulations, and whether there are circumstances that are obviously prejudicial to the interests of the Company and all shareholders.

12. HANDLING PROCEDURES FOR CHANGES

(1) Handling procedures for changes in the Company

(i) In case of the followings, the Incentive Scheme shall be terminated, and the Restricted Shares granted but not yet released from lock-up shall not be released from lock-up and shall be repurchased by the Trustee at the instruction of the Company at the Repurchase Price:
① the Company does not engage accountant firm to carry out audit work in accordance with the relevant procedures and requirements;
② the certified accountant issues an adverse opinion or disclaimer opinion with respect to the Company’s annual report or internal control evaluation report;
③ the state-owned asset supervision and administration institution or audit department issues major objection to the Company’s performance or annual report;

– 37 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

④ the Company is disciplined by the securities regulatory and administrative institutions and other relevant bodies for major violation of rules and regulations;
⑤ situations occur where laws and regulations prohibit the executing of share incentives.

(ii) In case of the followings, the Incentive Scheme shall be executed in normal:
① Change of control of the Company;
② Merger and/or separate establishment of the Company.
(iii) If any Condition of Grant or Condition for Lock-up Release is not met due to false records, misleading statements, or significant omissions in the Company’s public disclosure, the Restricted Shares not yet released from lock-up shall not be released from lock-up and shall be repurchased by the Trustee at the instruction of the Company at a price not higher than the lower of the Grant Price and the market price of the Shares.

In relation to the Restricted Shares released from lock-up, all Incentive Recipients shall return the interests granted. The Incentive Recipients not responsible for the occurrence of the above and incurring losses for such returning of Shares may, in accordance with the relevant arrangements of the Incentive Scheme, claim compensations against the Company or the responsible Incentive Recipients. The Board shall recover all the gains received by the Incentive Recipients in accordance with the abovementioned and the relevant arrangements of the Incentive Scheme and shall not grant new interests to the responsible Incentive Recipients.

(2) Handling procedures for changes in individual status of Incentive Recipients

(i) Change of duties of Incentive Recipients

① In the case that an Incentive Recipient has a change in job duties but still works for the Company or a branch or a subsidiary of the Company or is assigned by the Company, the Restricted Shares granted to him/her shall be subject to such procedures as stipulated in the Incentive Scheme which takes effect before the change of his/her duties.

– 38 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

② In the case that an Incentive Recipient is reassigned to work in Xiamen C&D Corporation Limited and its subsidiaries and branches due to organizational arrangements, the Board has the right to make decisions on the handling of the interests granted to such Incentive Recipient based on his/her reassignment.
③ In the case that an Incentive Recipient becomes an independent director or other personnel who is not qualified to hold the Restricted Shares, the Restricted Shares having been released from lock-up shall maintain the status quo, and the Restricted Shares granted but not yet released from lock-up shall not be released from lock-up and shall be repurchased by the Trustee at the instruction of the Company at a price equal to the sum of the Grant Price plus the interest for the same period calculated at the benchmark deposit rate announced by the People’s Bank of China at the time of repurchase.

(ii) Departure of Incentive Recipients

① In the case that the employment contracts of Incentive Recipients have expired and are not renewed or the Incentive Recipients tender their resignation, or the Incentive Recipients leave the Company for reasons such as breach of laws and disciplines, failure of performance during contract period or termination of contracts by agreement, the Restricted Shares having been released from lock-up shall maintain the status quo, and the Restricted Shares granted but not yet released from lock-up shall not be released from lock-up and shall be repurchased by the Trustee at the instruction of the Company at a price not higher than the lower of the Grant Price and the market price of the Shares.
② In the case that the Incentive Recipients depart passively due to reasons such as redundancy by the Company but do not fail in the performance appraisal or involve no misconduct or breach of laws and disciplines, the Restricted Shares having been released from lock-up shall maintain the status quo, and the Restricted Shares granted but not yet released from lock-up shall not be released from lock-up and shall be repurchased by the Trustee at the instruction of the Company at a price equal to the sum of the Grant Price plus interest for the same period calculated at the benchmark deposit rate announced by the People’s Bank of China at the time of repurchase.

(iii) Retirement of Incentive Recipients

In the case that an Incentive Recipient leaves the Company due to retirement, the Restricted Shares having been released from lock-up shall maintain the status quo, and the Restricted Shares granted but not yet released from lock-up in relation to which the performance target of such year has been met may be exercised within half year from the date of his/her departure (or exercisability), thereafter the interest

– 39 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

lapses; while the Restricted Shares which do not satisfy performance target are still subject to lock-up and shall be repurchased by the Trustee at the instruction of the Company at a price equal to the sum of the Grant Price plus the interest for the same period calculated at the benchmark deposit rate announced by the People’s Bank of China at the time of repurchase.

(iv) Incapacity of Incentive Recipients

① In the case that an Incentive Recipient is incapacitated and leaves the Company due to execution of duties, the Restricted Shares granted shall be subject to such procedures as stipulated in the Incentive Scheme which takes effect before the occurrence thereof, and the personal performance evaluation results will no longer be included in the Conditions for Lock-up Release.
② In the case that an Incentive Recipient leaves the Company, which is not due to the incapability due to execution of duties, the Restricted Shares having been released from lock-up shall maintain the status quo, and the Restricted Shares granted but not yet released from lock-up in relation to which the performance target of such year has been met may be exercised within half year from the date of his/her departure (or exercisability), thereafter the interest lapses; while the Restricted Shares in relation to which the performance target has not been met shall not be released and shall be repurchased by the Trustee at the instruction of the Company at a price equal to the sum of the Grant Price plus the interest for the same period calculated at the benchmark deposit rate announced by the People’s Bank of China at the time of repurchase.

(v) Death of Incentive Recipients

① In the case that an Incentive Recipient deceases due to performance of duties, the Restricted Shares granted to him/her shall be held by his/her appointed beneficiaries or lawful successors on his/her behalf and shall be subject to such procedures as stipulated in the Incentive Scheme which takes effect before his/her death, and the personal performance evaluation results will no longer be included in the Conditions for Lock-up Release.
② In the case that an Incentive Recipient deceases due to reasons other than performance of duties, the interests granted to him/her shall be enjoyed by his/her appointed beneficiaries or lawful successors on his/her behalf, and the Restricted Shares granted but not yet released from lock-up in relation to which the performance target of such year has been met shall be exercised by his/her appointed beneficiaries or lawful successors within half year from the date of occurrence of the situation (or exercisability), thereafter the interest lapses; while the Restricted Shares in relation to

– 40 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

which the performance target has not been met shall not be released and shall be repurchased by the Trustee at the instruction of the Company at a price equal to the sum of the Grant Price plus the interest for the same period at the bench mark deposit rate announced by the People’s Bank of China, and the proceeds from the repurchase shall be received by his/her appointed beneficiaries or lawful successors.

(vi) Change of control of the subsidiaries for which the Incentive Recipients work

In the case that the Incentive Recipients work in subsidiaries controlled by the Company, and if the Company loses control of the subsidiaries and the Incentive Recipients still work for such subsidiaries, the Restricted Shares having been released from lock-up shall maintain the status quo, and the Restricted Shares granted but not yet released from lock-up shall not be released from lock-up and shall be repurchased by the Trustee at the instruction of the Company at a price equal to the sum of the Grant Price plus the interest for the same period calculated at the benchmark deposit rate announced by the People’s Bank of China at the time of repurchase.

(vii) Clawback mechanism

In the case that an Incentive Recipient whose job position has changed as a results of acts that are detrimental to the Company’s interests or reputation such as violation of laws, professional ethics, leak of confidential information of the Company, failure to discharge his/her duties or a willful misconduct, or the Incentive Recipient’s employment contract was terminate by the Company for any of the above reasons, the Restricted Shares already released from lock-up shall maintain the status quo, and the Restricted Shares granted but not yet released from lock-up shall not be released from lock-up and shall be repurchased by the Trustee at the instruction of the Company at a price not higher than the lower of the Grant Price and the market price of the Shares. Further, if the Incentive Recipient is a Director or senior management and is involved in the abovementioned situations, Restricted Shares released from lockup and all profit realized from the Incentive Scheme shall be returned to the Company.

(viii) After the repurchase of the Restricted Shares not yet released from lock-up by the Company, the Company shall transfer the same.
(ix) Procedures for handling situations not stipulated herein shall be determined by the Board.
Note: Market price of the Shares refers to the closing price of the Shares on the date when the Board approved the repurchase.

– 41 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

13. ADJUSTMENTS

(1) Methods of Adjusting the number of Restricted Shares

In the event of any capitalization issue, bonus issue, subdivision of Shares, rights issue or share consolidation of the Company during the period from the date of the Announcement to the completion of registration of Restricted Shares by the Incentive Recipients, the number of Restricted Shares shall be adjusted accordingly. The adjustment methods are as follows:

(I) Capital reserve converted into share capital, bonus issue and subdivision of Shares

Q＝Q0×(1＋n)

Where: Q0 represents the number of Restricted Shares before the adjustment; n represents the ratio of increase per Share resulting from the issue of Shares by conversion of capital reserve, bonus issue or subdivision of Shares (i.e. the number of Shares increased per Share upon issue of Shares by conversion of capital reserve, bonus issue or subdivision of Shares); Q represents the adjusted number of Restricted Shares.

(II) Rights issue

Q＝Q0×P1×(1＋n)/(P1＋P2×n)

Where: Q0 represents the number of Restricted Shares before the adjustment; P1 represents the closing price as at the record date; P2 represents the price of the rights issue; n represents the ratio of the rights issue (i.e. the ratio of the number of Shares to be issued under the rights issue to the total share capital of the Company before the rights issue); Q represents the adjusted number of Restricted Shares.

(III) Share consolidation

Q＝Q0×n

Where: Q0 represents the number of Restricted Shares before the adjustment; n represents the ratio of consolidation of Shares (i.e. one Share shall be consolidated into n Shares); Q represents the adjusted number of Restricted Shares.

(IV) Issue of new Shares

In the event of issue of new Shares, no adjustment shall be made to the number of Restricted Shares.

– 42 –

SUMMARY OF THE PRINCIPAL TERMS OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

APPENDIX

(2) Method of Adjusting the Grant Price of the Restricted Shares

In the event that, from the date of the Announcement to the registration of the Restricted Shares by the Incentive Recipients, any issue of Shares by capitalization issue, bonus issue, subdivision of Shares, rights issue or consolidation of Shares has been made, an adjustment to the Grant Price of Restricted Shares shall be made by the Company accordingly. The adjustment methods are as follows:

(I) Capital reserve converted into share capital, bonus issue and subdivision of Shares
P＝P0÷(1＋n)

Where: P0 represents the Grant Price before the adjustment; n represents the ratio of increase per Share resulting from the issue of Shares by conversion of capital reserve, bonus issue and subdivision of Shares to each Share; P represents the adjusted Grant Price.

(II) Rights issue

P＝P0×(P1＋P2×n)/[P1×(1＋n)]

Where: P0 represents the Grant Price before the adjustment; P1 represents the closing price as at the record date; P2 represents the price of the rights issue; n represents the ratio of the rights issue (i.e. the ratio of the number of Shares to be issued under the rights issue to the total share capital of the Company before the rights issue); P represents the adjusted Grant Price.

(III) Share consolidation

P＝P0÷n

Where: P0 represents the Grant Price before the adjustment; n represents the ratio of consolidation of Shares; P represents the adjusted Grant Price.

(IV) Issue of new Shares

In the event of issue of new Shares, no adjustment shall be made to the Grant Price of Restricted Shares.

(3) Adjustment procedures for the Incentive Scheme

The Board shall adjust the number of Restricted Shares and the Grant Price based on the reasons set forth pursuant to the authorisation by Shareholders in the EGM. The Board shall notify the Incentive Recipients promptly should the Board adjust the number of Restricted Shares and the Grant Price pursuant to the above provisions.

– 43 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

C&D Property Management Group Co., Ltd 建發物業管理集團有限公司

(Incorporated in the British Virgin Islands with limited liability)

(Stock Code: 2156)

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the ‘‘Meeting’’) of C&D Property Management Group Co., Ltd (the ‘‘Company’’) will be held at Room 3517, 35th Floor, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong on Thursday, 21 December 2023 at 10:00 a.m., to consider, if thought fit, pass with or without modifications the following as an ordinary resolution of the Company:

ORDINARY RESOLUTION

‘‘THAT:

the 2023 Restricted Share Incentive Scheme (the ‘‘Incentive Scheme’’) be and is approved, confirmed and ratified and any one director of the Company be and is hereby authorized to do all things as they may in their absolute discretion consider necessary, expedient or desirable to implement the Incentive Scheme.’’

Yours faithfully,

By Order of the Board

C&D Property Management Group Co., Ltd 建發物業管理集團有限公司 Lin Weiguo

Chairman and Non-executive Director

Hong Kong, 4 December 2023

Registered office: 2/F, Palm Grove House P.O. Box 3340 Road Town, Tortola BVI

Principal place of business in Hong Kong: Room 3517, 35th Floor Wu Chung House 213 Queen’s Road East Wanchai, Hong Kong

Notes:

A shareholder of the Company (the ‘‘Shareholder’’) entitled to attend and vote at the Meeting is entitled to appoint another person as his/her proxy to attend and vote in his/her stead. A Shareholder who is the holder of two or more shares in the Company (the ‘‘Shares’’) may appoint more than one proxy to represent him/her and vote on his/her behalf at the Meeting. A proxy need not be a Shareholder.

– N-1 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

In the case of joint holders of Shares, any one of such joint holders may vote, either in person or by proxy, in respect of such Shares as if he/she were solely entitled thereto, but if more than one of such joint holders are present at the Meeting, personally or by proxy, that one of the said persons so present whose name stands first in the register of members of the Company in respect of such Shares shall alone be entitled to vote in respect thereof.
In order to be valid, the form of proxy must be in writing under the hand of the appointor or of his/her attorney duly authorized in writing, or if the appointor is a corporation, either under seal, or under the hand of an officer or attorney duly authorized, and must be deposited with the Company’s Hong Kong branch share registrar and transfer office, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong (together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy thereof) not less than 48 hours before the time fixed for holding of the Meeting (or any adjournment thereof).
The register of members of the Company will be closed from Monday, 18 December 2023 to Thursday, 21 December 2023 (both days inclusive), during which period no transfer of the Shares will be effected. In order to qualify for attending the Meeting or any adjournment thereof, all transfers of Shares accompanied by the relevant share certificate(s) must be lodged with the Company’s Hong Kong branch share registrar and transfer office at the above address for registration by no later than 4:30 p.m. on Friday, 15 December 2023.
Delivery of an instrument appointing a proxy should not preclude a Shareholder from attending and voting in person at the Meeting or any adjournment thereof and in such event, the instrument appointing a proxy shall be deemed to be revoked.
The Company reminds all Shareholders that physical attendance in person at the Meeting is not necessary for the purpose of exercising voting rights. Shareholders may appoint the chairman of the Meeting as their proxy to vote on the relevant resolution(s) at the Meeting instead of attending the Meeting in person, by completing and return the form of proxy.
If any Shareholder chooses not to attend the Meeting in person but has any question about any resolution or about the Company, or has any matter for communication with the board of directors of the Company, he/she is welcome to send such question or matter in writing to the head office and principal place of business in Hong Kong of the Company or by fax at (852) 2525 7890. If any Shareholder has any question relating to the Meeting, please contact Tricor Investor Services Limited, the Company’s Hong Kong branch share registrar and transfer office as follows:

Tricor Investor Services Limited 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong Email: [email protected] Tel: (852) 2980 1333 Fax: (852) 2810 8185

Certain director(s) of the Company may attend the Meeting through video conference or similar electronic means.

As at the date of this notice, the executive Directors are Ms. Qiao Haixia (Chief Executive Officer) and Mr. Huang Danghui; the non-executive Directors are Mr. Lin Weiguo (Chairman) and Mr. Xu Yixuan; and the independent non-executive Directors are Mr. Lee Cheuk Yin Dannis, Mr. Li Kwok Tai James and Mr. Wu Yat Wai.

This notice is prepared in both English and Chinese. In the event of inconsistency, the English text of the notice shall prevail over the Chinese text.

– N-2 –

AI assistant

C&D Property Management Group Co., Ltd — Proxy Solicitation & Information Statement 2023

50406_rns_2023-12-01_f8948d81-3f6d-4e13-8f85-e511a89d145d.pdf

C&D Property Management Group Co., Ltd 建發物業管理集團有限公司

(Stock Code: 2156)

(1) PROPOSED ADOPTION OF 2023 RESTRICTED SHARE INCENTIVE SCHEME;

(2) GRANT OF RESTRICTED SHARES PURSUANT TO 2023 RESTRICTED SHARE INCENTIVE SCHEME; AND NOTICE OF THE EXTRAORDINARY GENERAL MEETING

DEFINITIONS

DEFINITIONS

DEFINITIONS

C&D Property Management Group Co., Ltd 建發物業管理集團有限公司

(Stock Code: 2156)

(1) PROPOSED ADOPTION OF 2023 RESTRICTED SHARE INCENTIVE SCHEME;

(2) GRANT OF RESTRICTED SHARES PURSUANT TO 2023 RESTRICTED SHARE INCENTIVE SCHEME; AND NOTICE OF THE EXTRAORDINARY GENERAL MEETING

INTRODUCTION

PROPOSED ADOPTION OF 2023 RESTRICTED SHARE INCENTIVE SCHEME

Purpose

Incentive Recipients

Means of incentive and source of Restricted Shares

Number of Restricted Shares

Grant Price

LETTER FROM THE BOARD

Validity Period

Administration

Lock-up Period and arrangement for lock-up release

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Lapse

A. Lapse due to the Company’s Issues

(III) False Disclosure of the Company

B. Lapse due to the Incentive Recipients’s Issues

(I) Change of duties of Incentive Recipients

(II) Departure of Incentive Recipients

(III) Retirement of Incentive Recipients

(IV) Incapacity of Incentive Recipients

(V) Death of Incentive Recipients

(VI) Change of control of the subsidiaries where the Incentive Recipients work

(VII)Clawback Mechanism

Conditions

Others

GRANT OF RESTRICTED SHARES PURSUANT TO THE INCENTIVE SCHEME

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Allocation of Restricted Shares

LETTER FROM THE BOARD

INFORMATION ABOUT THE COMPANY

REASONS FOR AND BENEFITS OF PROPOSED ADOPTION OF INCENTIVE SCHEME AND GRANTING OF RESTRICTED SHARES

LISTING RULES IMPLICATIONS

SHAREHOLDING STRUCTURE OF THE COMPANY

2021 Incentive Scheme

LETTER FROM THE BOARD

DOCUMENT ON DISPLAY

EXTRAORDINARY GENERAL MEETING

LETTER FROM THE BOARD

RECOMMENDATION

RESPONSIBILITY STATEMENT

VOTE BY POLL

FURTHER INFORMATION

KEY TERMS OF INCENTIVE SCHEME

1. PURPOSE

2. ADMINISTRATION AUTHORITIES

3. INCENTIVE RECIPIENTS

4. INCENTIVE INSTRUMENT

5. INCENTIVE SCALE

6. GRANT PRICE

7. TIME SCHEDULE

(1) Validity period

(2) Grant Date

(3) Lock-up period

(4) Arrangement of lock-up release

8. PERFORMANCE TARGET FOR LOCK-UP RELEASE

(1) Performance target of the Company

(2) Selection of benchmark companies

(3) Targets of individual performance evaluation

9. SOURCE OF SHARES

10. SOURCE OF FUND

11. PROCEDURES FOR THE GRANT, LOCK-UP RELEASE AND MODIFICATION AND TERMINATION

(1) Procedures for grant of Restricted Shares

(2) Procedures for lock-up release of Restricted Shares

(3) Procedures for modification and termination of the Incentive Scheme

C&D Property Management Group Co., Ltd Proxy Solicitation & Information Statement 2023