THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Shenyang Public Utility Holdings Company Limited, you should at once hand this circular together with the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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.

瀋陽公用發展股份有限公司

Shenyang Public Utility Holdings Company Limited
(a joint stock limited company incorporated in the People's Republic of China)
(Stock code: 747)

(1) GENERAL MANDATE TO ISSUE SHARES;
(2) PROPOSED RE-APPOINTMENT OF AUDITOR; AND
(3) VERY SUBSTANTIAL ACQUISITION
IN RELATION TO THE ACQUISITION OF
51% EQUITY INTEREST IN GUANGZHOU ZHUDAO
PROPERTY MANAGEMENT COMPANY LIMITED
AND
NOTICE OF ANNUAL GENERAL MEETING FOR 2024

Capitalised terms used in this cover page shall have the same meanings as defined in this circular. A letter from the Board is set out on pages 4 to 17 of this circular.

A notice convening the AGM to be held at 4809, Jinzhonghuan Main Business Building, No. 3037 Jintian Road, Futian, Shenzhen, PRC at 10:00 a.m. on Monday, 30 June 2025 is set out on pages AGM-1 to AGM-5 of this circular. A form of proxy for use at the AGM is enclosed with this circular. Whether or not you are able to attend the AGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong (for holders of H Shares only) or the Company's office at 4809, Jinzhonghuan Main Business Building, No. 3037 Jintian Road, Futian, Shenzhen, PRC (for holders of Domestic Shares only) as soon as possible and in any event not less than 24 hours before the time appointed for holding the AGM 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 AGM or any adjournment thereof (as the case may be) should you so wish, and in such event, the form of proxy previously submitted shall be deemed to be revoked.

4 June 2025

CONTENTS

Page

Definitions 1

Letter from the Board 4

Appendix I — Financial Information of the Group I-1

Appendix II — Financial Information of the Target Group II-1

Appendix III — Unaudited Pro Forma Financial Information of the Enlarged Group III-1

Appendix IV — Management Discussion and Analysis of the Group IV-1

Appendix V — Management Discussion and Analysis of the Target Group V-1

Appendix VI — General Information VI-1

Notice of AGM for 2024 AGM-1

DEFINITIONS

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

“Acquisition” the acquisition of the Sale Shares by the Purchaser from the Vendor pursuant to the Equity Transfer Agreement

“AGM” the annual general meeting of the Company for the financial year ended 31 December 2024 to be convened and held at 4809, Jinzhonghuan Main Business Building, No. 3037 Jintian Road, Futian, Shenzhen, PRC at 10:00 a.m. on Monday, 30 June 2025

“Auditor” the auditor of the Company

“Beijing Wanzhongrunhua” Beijing Wanzhongrunhua Engineering Management Consulting Company Limited (北京萬眾潤華工程管理諮詢有限公司), a limited company incorporated in the PRC, the ultimate beneficial owner of which is Mr. Hu Liming (胡利明先生)

“Board” the board of the Directors

“Company” Shenyang Public Utility Holdings Company Limited, a joint stock limited company incorporated in the PRC and its H Shares are listed on the Main Board of the Stock Exchange

“Completion” completion of the Acquisition in accordance with the terms and conditions of the Equity Transfer Agreement

“connected person(s)” has the same meaning ascribed to it in the Listing Rules

“Consideration” the consideration of the Acquisition, being RMB550,000

“Director(s)” the directors of the Company

“Domestic Share(s)” domestic share(s) of the Company with a nominal value of RMB1.00 each, and which are subscribed for in RMB

“Enlarged Group” the Group immediately after the Completion

“Equity Transfer Agreement” the equity transfer agreement dated 28 February 2025 entered into between the Purchaser and the Vendor in relation to the Acquisition

DEFINITIONS

“General Mandate” a new general mandate to issue Domestic Shares and H Shares representing up to the limit of 20% of each of the aggregate number of Domestic Shares and H Shares in issue respectively as at the date of passing the relevant resolution

“Group” the Company and its subsidiaries

“H Share(s)” overseas listed foreign ordinary share(s) of the Company, with a nominal value of RMB1.00 each, all of which are listed on the Main Board of the Stock Exchange, and subscribed for and traded in Hong Kong dollars

“Hong Kong” the Hong Kong Special Administrative Region of the PRC

“Latest Practicable Date” 28 May 2025, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

“PRC” the People’s Republic of China

“Purchaser” Shenzhen Wanzi Hotel Apartment Management Company Limited* (深圳市萬紫酒店公寓管理有限公司), a limited company incorporated in the PRC and an indirect wholly-owned subsidiary of the Company

“RMB” Renminbi, the lawful currency of the PRC

“Sale Shares” 51% equity interest of the Target Company to be acquired by the Purchaser and to be sold by the Vendor according to the Equity Transfer Agreement

“SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

“Share(s)” H Share(s) and/or Domestic Share(s) (as the case may be)

“Shareholder(s)” holder(s) of the Share(s)

“Shijiazhuang Runhua” Shijiazhuang Luquan District Runhua Property Service Company Limited* (石家莊市鹿泉區潤華物業服務有限公司), a limited company incorporated in the PRC and a non wholly-owned subsidiary of the Target Company

“Stock Exchange” The Stock Exchange of Hong Kong Limited

DEFINITIONS

“Target Company”
Guangzhou Zhudao Property Management Company Limited* (廣州市珠島物業管理有限公司), a limited company incorporated in the PRC

“Target Group”
the Target Company and Shijiazhuang Runhua

“Vendor”
Beijing Jiuzhou Technology Company Limited (北京九周科技有限公司), a limited company incorporated in the PRC, the ultimate beneficial owner of which is Mr. Jia Yancheng (賈燕成先生)

“Wanzhong Investment”
Wanzhong Investment Company Limited* (萬眾投資有限公司), a limited company incorporated in the PRC

“%”
per cent.

For identification purposes only
3 -

LETTER FROM THE BOARD

瀋陽公用發展股份有限公司

Shenyang Public Utility Holdings Company Limited

(a joint stock limited company incorporated in the People's Republic of China)

(Stock code: 747)

Executive Directors:
Mr. Zhang Jing Ming (Chairman)
Mr. Huang Chunfeng (Chief Executive Officer)
Mr. Leng Xiao Rong

Non-executive Director:
Mr. Chau Ting Yan

Independent non-executive Directors:
Mr. Luo Zhuo Qiang
Ms. Jiang Hai Ling
Mr. Mao Hai Bin

Registered office:
No. 1-4, 20A, Central Street,
Shenyang Economic and
Technological Development Zone,
PRC

Principal place of business
in the PRC:
Room 517, Building E03,
Shenyang International Software Park,
No. 861-3 Shangshengou Village,
Hunnan District, Shenyang,
PRC

Principal place of business
in Hong Kong:
Room 2507, 25/F.,
Tower 1, Lippo Centre,
89 Queensway,
Hong Kong

4 June 2025

To the Shareholders

Dear Sir or Madam,

LETTER FROM THE BOARD

INTRODUCTION

Reference is made to the announcement of the Company dated 28 February 2025 in relation to the Acquisition. The purpose of this circular is to provide you with information regarding the resolutions to be proposed at the AGM in relation to, among other things, (i) granting the Directors the General Mandate; (ii) re-appointment of Auditor; (iii) further details of the Acquisition; (iv) financial information of the Group; (v) financial information of the Target Group; (vi) unaudited pro forma financial information of the Enlarged Group; (vii) management discussion and analysis of the Group; (viii) management discussion and analysis of the Target Group; (ix) other information as required under the Listing Rules; and (x) the notice of AGM for 2024.

GENERAL MANDATE TO ISSUE SHARES

A special resolution will be proposed by the Company to give the Directors a general mandate to issue, allot and deal with Domestic Shares and H Shares separately or concurrently, not exceeding 20% of the aggregate number of Domestic Shares in issue and 20% of the aggregate number of H Shares in issue, in each case as at the date of approval of such resolution. As at the Latest Practicable Date, a total of 864,000,000 Domestic Shares and 605,376,000 H Shares were issued. Subject to the passing of the proposed resolution granting the Directors the General Mandate and on the basis that no Shares will be issued by the Company prior to the AGM, the Company will be allowed under the General Mandate to issue a maximum of 172,800,000 Domestic Shares and 121,075,200 H Shares. Any exercise of the power by the Directors under the General Mandate shall comply with the relevant requirements of the Listing Rules, the articles of association of the Company and the applicable laws and regulations of the PRC.

The General Mandate will, if granted, remain effective until the earliest of (i) the conclusion of the next annual general meeting of the Company; (ii) the expiration of the 12-month period following the passing of such resolution; and (iii) the revocation or variation by a special resolution of the Shareholders in general meeting.

RE-APPOINTMENT OF AUDITOR

Asian Alliance (HK) CPA Limited will retire as the Auditor at the AGM and, being eligible, offer itself for re-appointment. The Board, upon the recommendation of the audit committee of the Company, proposed to re-appoint Asian Alliance (HK) CPA Limited as the Auditor and to hold office until the conclusion of the next annual general meeting of the Company, and to authorise the Board to fix its remuneration.

THE ACQUISITION

On 28 February 2025 (after trading hours), the Purchaser, an indirect wholly-owned subsidiary of the Company and the Vendor entered into the Equity Transfer Agreement, pursuant to which the Purchaser has conditionally agreed to purchase and the Vendor has conditionally agreed to sell the Sale Shares, representing 51% equity interest in the Target Company, at the Consideration of RMB550,000.

LETTER FROM THE BOARD

THE EQUITY TRANSFER AGREEMENT

The principal terms of the Equity Transfer Agreement are set out as follows:

Date: 28 February 2025 (after trading hours)

Parties: Beijing Jiuzhou Technology Company Limited* (北京九周科技有限公司), as the Vendor; and

Shenzhen Wanzi Hotel Apartment Management Company Limited* (深圳市萬紫酒店公寓管理有限公司), as the Purchaser

(each a “Party” and collectively, the “Parties”)

As at the Latest Practicable Date, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, each of the Vendor and its ultimate beneficial owner is a third party independent of and not connected with the Company and its connected persons (as defined in Chapter 14A of the Listing Rules).

Subject matter of the Acquisition

Pursuant to the Equity Transfer Agreement, the Vendor conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Sale Shares, representing 51% equity interest in the Target Company.

Consideration

The Consideration is RMB550,000, which shall be payable in cash by the Purchaser to the Vendor in the following manner:

(i) the first instalment, being 50% of the Consideration (the amount of RMB275,000), shall be payable by the Purchaser to the Vendor within 3 business days after the execution of the Equity Transfer Agreement; and

(ii) the second instalment, being 50% of the Consideration (the amount of RMB275,000), shall be payable by the Purchaser to the Vendor within 5 business days from the date of the approval of the Acquisition by the Shareholders at the AGM.

LETTER FROM THE BOARD

The Consideration for acquiring 51% equity interest in the Target Company is RMB550,000, which was determined after arm's length negotiations between the Purchaser and the Vendor on normal commercial terms and with reference to the Comparables (as defined below). Referring to the unaudited consolidated financial statements of the Target Group as of 31 December 2024, the Target Group recorded a revenue of approximately RMB17.2 million and a profit after tax of approximately RMB1.7 million.

The Company has conducted the below detailed analysis comparing the Target Company's financial performance against 17 Hong Kong listed companies which principally engaged in residential property management in the PRC (the "Comparables").

Comparables in Property Management Industry

	Stock Code	Company name	P/E ratio
1	606	SCE Intelligent Commercial Management Holdings Limited	1.78
2	1538	Zhong Ao Home Group Limited	2.83
3	1755	S-Enjoy Service Group Co., Limited	5.15
4	1895	Xinyuan Property Management Service (Cayman) Ltd.	8.33
5	1995	Ever Sunshine Services Group Limited	6.78
6	2107	First Service Holding Limited	4.69
7	2146	Roiserv Lifestyle Services Co., Ltd.	4.29
8	2165	Ling Yue Services Group Limited	3.46
9	2205	Kangqiao Service Group Limited	17.06
10	2210	Beijing Capital Jiaye Property Services Co., Limited	4.46
11	2215	Dexin Services Group Limited	23.36
12	2271	Zhong An Intelligent Living Service Limited	4.76
13	2602	Onewo Inc.	12.46
14	2869	Greentown Service Group Co. Ltd.	15.73
15	3658	New Hope Service Holdings Limited	6.84
16	6093	Hevol Services Group Co. Limited	11.36
17	9608	Sundy Service Group Co. Ltd	67.51

P/E ratio data source: Bloomberg (As at 18 February 2025)

Among the Hong Kong listed companies in property management industry with valid pricing-to-earnings ("P/E") ratios, the criteria for selecting the Comparables include provision of property management services in the PRC accounting for at least 60% of the total revenue, with residential property management services accounting for also at least 60% of the revenue from property management services or the total area under management.

LETTER FROM THE BOARD

According to the above table, the Comparables' P/E ratios range from approximately 1.78 to 67.51, with an average of 11.81. The Consideration, being the price of the Acquisition, is RMB550,000, which is applied for acquiring 51% equity interest in the Target Company. It represents a price of RMB1,078,431 for the Target Company on a 100% basis. Based on the price of RMB1,078,431 and the net profit of the Target Group of approximately RMB1.7 million, the P/E ratio of the Target Group would be approximately 0.64 which is significantly lower than the P/E ratios of the applicable Comparables.

Referring to the unaudited consolidated financial statements of the Target Group as at 31 December 2024, the net liabilities was approximately RMB17.5 million. Given the stable cash inflow of the Target Group from property management operations of its unaudited annual revenue of approximately RMB17.2 million and a profit after tax of approximately RMB1.7 million for the year ended 31 December 2024, in addition to the potential growth of business by taking part in additional property management projects in the future, it is believed that the financial position of the Target Group will be improved in the future.

In view of the above, the Consideration aligns with market norms and in addition to the factors as set out in the paragraph headed "REASONS FOR AND BENEFITS OF THE ACQUISITION", the Board is of the view that the Acquisition is in the interests of the Group and the terms and conditions of the Equity Transfer Agreement (including the Consideration) are on normal commercial terms, which are fair and reasonable, and are in the interests of the Company and the Shareholders as a whole.

Conditions precedent

The Completion shall take place upon the fulfilment of the following conditions precedent:

(i) the Equity Transfer Agreement and the equity transfer thereunder having been approved by the shareholder of the Purchaser, the Board and the AGM;

(ii) the Equity Transfer Agreement and the equity transfer thereunder having been approved by the shareholders' meeting of the Vendor;

(iii) the change of registration procedures of the equity transfer under the Equity Transfer Agreement having been completed at the company registration authority and the Sale Shares having been registered in the Purchaser's name, and the articles of association of the Target Company having been amended and filed as agreed;

(iv) the Consideration as set out in the Equity Transfer Agreement having been paid off by the Purchaser; and

(v) the representations and warranties made by the Parties as set out in the Equity Transfer Agreement being true, accurate and complete.

LETTER FROM THE BOARD

If the above conditions precedent have not been fulfilled within 6 months after the execution of the Equity Transfer Agreement or within a period determined by the Parties through further negotiations, the Equity Transfer Agreement shall be terminated. Upon the termination of the Equity Transfer Agreement, if the Purchaser has paid the Consideration to the Vendor, the Vendor shall refund the Consideration being paid by the Purchaser under the Equity Transfer Agreement with the interest calculated based on the bank deposit interest rate for the same period within 10 days. If the change of registration in relation to the Sale Shares has been completed, the Purchaser shall, upon receipt of the Consideration refunded by the Vendor, assist the Target Company and the Vendor to restore the registration of the Sale Shares to the status at the time of signing the Equity Transfer Agreement.

As at the Latest Practicable Date, save for the condition precedent (ii), none of the other conditions precedent have been fulfilled.

Transition period

The period commencing from the date of signing of the Equity Transfer Agreement to the date of Completion (both days exclusive) shall be a transition period, during which the Vendor shall have the obligation of good management of the Target Company and its assets. The Vendor shall ensure and procure the normal operation of the Target Company, and the Vendor shall promptly notify the Purchaser of any material adverse impact on the Target Company during the transitional period and deal with it appropriately. During the transition period, the Vendor shall not sign, change, modify or terminate any contracts and transactions relating to the Target Company, or engage in any act that causes the Target Company to assume new burdens or debts, transfer or waive rights, or dispose of the assets of the Target Company, except for those that are part of the normal operation of the Target Company.

Completion

The Parties shall procure the fulfilment of the above conditions precedent for the Completion within 6 months from the effective date of the Equity Transfer Agreement, and any extension of time shall be negotiated by the Parties. Upon the Completion, the Target Company will be owned as to 51% equity interest by the Purchaser, 14% equity interest by the Vendor and 35% equity interest by Beijing Wanzhongrunhua. Upon the Completion, the Target Company and its non wholly-owned subsidiary, Shijiazhuang Runhua, will both become subsidiaries of the Company and accordingly, the financial results of the Target Group will be consolidated into the Group's consolidated financial statements.

The Parties unanimously agreed that, upon the Completion, when the shareholders' meeting of the Target Company re-elects the directors or appoints the general manager, the Parties unconditionally agree that the candidates appointed by the Purchaser will serve as the directors and general manager.

INFORMATION ON THE PURCHASER AND THE GROUP

The Purchaser is a company established under the laws of the PRC with limited liabilities and is an indirect wholly-owned subsidiary of the Company. It is principally engaged in the investment holding.

LETTER FROM THE BOARD

The Company was incorporated in the PRC with limited liability and the H Shares are listed on the Main Board of the Stock Exchange. The Company is an investment holding company and the Group is principally engaged in construction of infrastructure and development of properties, and property investment and leasing business.

INFORMATION ON THE VENDOR AND THE TARGET GROUP

Information on the Vendor

The Vendor is a company incorporated in the PRC with limited liability and belongs to the technology promotion and application services industry, with its scope of business including technology development, software services, design and branding, business consulting, advertising, market research, event planning, and scientific research across various fields, all in compliance with relevant regulations.

As at the Latest Practicable Date, the Vendor is wholly-owned by Mr. Jia Yancheng* (賈燕成先生).

Information on the Target Group

The Target Group comprises the Target Company and its non wholly-owned subsidiary, Shijiazhuang Runhua. The Target Company is a company incorporated in the PRC with limited liability, which holds 51% equity interest in Shijiazhuang Runhua.

Each of the Target Company and Shijiazhuang Runhua is principally engaged in property management services. The Target Company is currently engaged in providing property management services to Zhudao Garden (珠島花園) in Guangzhou, the PRC. Shijiazhuang Runhua is currently serving a high-end villa district, namely Xishan Yuyuan (西山禦園) in Shijiazhuang, the PRC.

As at the Latest Practicable Date, the Target Company is owned as to 65% equity interest by the Vendor and 35% equity interest by Beijing Wanzhongrunhua.

Beijing Wanzhongrunhua is a company incorporated in the PRC with limited liability and belongs to the professional and technical services industry, with its scope of business including engineering consulting services, general construction contracting, engineering cost consulting, engineering supervision services, labour subcontracting and engineering design.

As at the Latest Practicable Date, Beijing Wanzhongrunhua is wholly-owned by Mr. Hu Liming* (胡利明先生).

Upon the Completion, the Target Company will be owned as to 51% equity interest by the Purchaser, 14% equity interest by the Vendor and 35% equity interest by Beijing Wanzhongrunhua. The Target Company will become a non wholly-owned subsidiary of the Company and accordingly, the financial results of the Target Group will be consolidated into the Group's consolidated financial statements.

10 -

LETTER FROM THE BOARD

Set out below is the shareholding structure of the Target Group as at the Latest Practicable Date and prior to the Completion:

Set out below is the shareholding structure of the Target Group immediately after the Completion:

LETTER FROM THE BOARD

Financial Information of the Target Group

Set out below summaries the audited consolidated financial information of the Target Group for the two financial years ended 31 December 2023 and 2024:

	For the year ended 31 December
	2023	2024
	(RMB'000)	(RMB'000)
	(Audited)	(Audited)
Revenue	17,320	17,203
Net profit before taxation and extraordinary items	288	1,788
Net profit after taxation and extraordinary items	238	1,673

The audited net liabilities of the Target Group as at 31 December 2024 was approximately RMB17,515,000.

REASONS FOR AND BENEFITS OF THE ACQUISITION

The Group is principally engaged in construction of infrastructure and development of properties, and property investment and leasing business.

The Company is from time to time looking for appropriate opportunities in the construction of infrastructure business in the PRC. However, given the slow recovery of the domestic economy, it is anticipated that the expenditure of infrastructure from the government will remain limited. The Company will continue to explore suitable infrastructure projects aligned with national policies.

As disclosed in the annual report of the Company for the year ended 31 December 2024, for year 2023, the Group won the bidding of the rental right of a 3,000-square-metre vacant land in the Shenyun Cultural and Sports Park* (深雲文體公園) in Shenzhen for operating an entertainment project in the cultural and sports park. The venue has completed the renovation and began its operation in January 2025.

The Group's property investment and leasing business is mainly distributed in the cities such as Sanhe, Guangzhou, Beijing and Shennongjia Forestry District. The Company identifies potential properties for investment purposes from time to time to receive rental income and may enjoy potential property appreciation income in the future. The Group currently owns 11 shop units and 60 car parking spaces located in Sanhe, a shop unit in Guangzhou, 125 offices located in the Zhiying Commercial Center in Liangxiang Higher Education Park, Fangshan, Beijing and two commercial properties in Shunyi, Beijing, as well as Shennongjia Hotel (including hotel, an entertainment centre and commercial facilities) in Shennongjia Forestry District.

LETTER FROM THE BOARD

The business model in the property investment and leasing business is acquisition for selling and/or leasing, which the Company acquires suitable and potential properties which are ready for selling and leasing. As such, revenue can be recognised through earning the price difference between the buying and selling prices. The Group can also record rental incomes from leasing of the properties. The Group will continue to identify potential property investment projects.

The Shennongjia Hotel, a property development and property investment project of the Company, is a large-scale integrated tourism resort and business leisure project built in the Shennongjia scenic area. The Shennongjia Hotel includes courtyard houses as its property development project, and hotel, an entertainment centre, and commercial facilities as its property investment project. The project consists of a main building, an annex building, ten courtyard houses, a sports club, and a commercial street. The total floor area of this project exceeds 50,000 square metres and comprises over 500 hotel rooms. As at the Latest Practicable Date, the construction of the main building, the annex building and the courtyard houses have been basically completed. Initially, the hotel's design has been finalised, and renovation work has also started. The Company's hotel project team also considered managing and operating the hotel internally, led by its experienced senior management, while outsourcing the food and beverage operations to experienced management company to enhance service quality and cost efficiency.

However, with reference to the market research conducted by the Company, after the pandemics, the previously suppressed domestic tourism market surged. According to the data from The People's Government of Hubei Province, in 2023, Shennongjia's key scenic spots experienced a 48% increase in the number of tourists and a 35% growth in tourism revenue. In 2024, it also recorded a growth of 10% in both figures. It is also observed that demand for high-quality accommodations and hospitality services has continued to grow. To enhance service quality and operational standards to cater for the needs of tourists while maximising the return of the hotel project, the Group's management is now determined to engage a professional hotel management company to oversee the hotel operations instead of managing it internally.

However, these high-quality hotel management companies typically impose specific operational requirements, including adherence to their established operational frameworks, design preferences, and service standards. The current key challenge to the Group is that these operators require an almost completely different renovation style, necessitating extensive modifications to the design of the hotel, which would inevitably cause time delays.

As at the Latest Practicable Date, two hotel management companies have been shortlisted. The Company is evaluating how to balance these operational requirements with adequate financial resources and market positioning. Further cost assessments, budget planning, and market research are ongoing, within current construction budget, to determine the most viable strategy. While the hotel was initially scheduled to open in the second half of 2025, due to the aforementioned, the opening is expected to be postponed to 2026. The Company is using its best endeavour and targets to finalise the operation strategy of the Shennongjia Hotel on or before August 2025. Given that the summer season represents the peak travel period in the region, the Group aims to align the Shennongjia Hotel's opening in May 2026. In order to meet

LETTER FROM THE BOARD

the targeted opening schedule, essential interior infrastructure works, including the ventilation and drainage systems, the electrical supply system, and the elevators, are scheduled to commence in June 2025. These preliminary works will take place prior to the full renovation, which will reflect the hotel's design concept and begin after the operational model is finalised. The Company remains committed to ensuring that the final operational structure aligns with its long-term strategic objectives while maintaining service excellence and cost efficiency.

The Target Group is principally engaged in property management, managing approximately total 542,865 square metres gross floor area in first-tier and second-tier cities, ranging from large-scale community to high-end villa area.

The Group has been proactively exploring development opportunities in various formats within the property investment sector, such as the operation and management. With a proven track record in property development, construction, and commercial property management, the Group is well-positioned to leverage its expertise through the Acquisition. Moreover, the senior management of the Group possesses extensive relevant experiences that can be applied to the property management sector. Mr. Zhang Jing Ming, the executive Director and chairman of the Board, has proven management experience and strong business connections in the property and real estate sector. In addition, the Group has equipped a professional team in property leasing and property management to manage projects in different cities such as Beijing and Shenzhen. It is believed that the expertise and experience of the Group in the property management sector will contribute to the continued development of the Target Company following the Completion. By integrating the Group's experience with the Target Company's specialisation in residential property management, the Group can offer a more comprehensive suite of services. This synergy will enhance the Group's ability to manage diverse property types effectively, providing a platform for geographic expansion and improved service offerings.

As at 31 December 2024, the audited net liabilities of the Target Group amounted to approximately RMB17.5 million. Nevertheless, the cash inflow of the Target Group is very stable. According to the section headed "FINANCIAL INFORMATION OF THE TARGET GROUP" in Appendix II to this circular, the revenue ranged from approximately RMB17.0 million to RMB17.3 million from the financial year of 2022 to 2024. The Target Group recorded a profit after tax of approximately RMB1.67 million and RMB0.24 million for the years ended 31 December 2024 and 31 December 2023 respectively. In addition, the Target Company has good reputation in property management, particularly in Guangzhou. It serves as a valuable foundation for the Group. Combining with its extensive resources and network, the Group is well-positioned to secure additional property management contracts in the future. This partnership will enhance the Group's presence in the property management market and solidify its competitive advantage.

14 -

LETTER FROM THE BOARD

services, such as leasing support, facility upgrades, and concierge offerings. These services not only contribute to higher profitability but also foster stronger customer relationships, promoting long-term retention and growth.

FINANCIAL EFFECT OF THE ACQUISITION ON THE EARNINGS AND ASSETS AND LIABILITIES OF THE GROUP

Upon the Completion, the Group will hold 51% equity interest of the Target Company. The Target Company will become a non wholly-owned subsidiary of the Company and accordingly, the financial results of the Target Group will be consolidated into the Group's consolidated financial statements.

In order to illustrate the effect of the Acquisition on the Group, the accompanying unaudited pro forma consolidated statement of profit or loss of the Enlarged Group as set out in Appendix III to this circular are prepared as if the Acquisition had been completed on 1 January 2024 and the unaudited pro forma consolidated statement of financial position of the Enlarged Group as set out in Appendix III to this circular are prepared as if the Acquisition had been completed on 31 December 2024.

Earnings

Based on the unaudited pro forma consolidated statement of profit or loss of the Enlarged Group, the loss after tax of the Group would have increased from approximately RMB104.27 million to RMB105.16 million on a pro forma basis. As set out in the financial information of the Target Group in Appendix II to this circular, the net profit after tax of the Target Group for the year ended 31 December 2024 amounted to approximately RMB1.67 million. The increase in loss after tax of the Enlarged Group is mainly due to the pro forma adjustment arising from the provision of acquisition related costs of approximately RMB1.4 million and the pro forma adjustment arising from the provision of amortisation of approximately RMB1.16 million.

Asset and liabilities

Based on the unaudited pro forma consolidated statement of financial position of the Enlarged Group, the total assets of the Group would have increased from approximately RMB544.80 million to approximately RMB564.41 million on a pro forma basis, the total liabilities of the Group would have increased from approximately RMB224.66 million to RMB247.89 million on a pro forma basis, and the net assets of the Group would have decreased from approximately RMB320.14 million to RMB316.53 million on a pro forma basis.

Further details of the financial effect of the Acquisition together with the basis in preparing the unaudited pro forma financial information of the Enlarged Group are set out in Appendix III to this circular.

LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the Acquisition is more than 100%, the Acquisition constitutes a very substantial acquisition of the Company under Chapter 14 of the Listing Rules, and is therefore subject to the reporting, announcement, circular and Shareholders' approval requirements under Chapter 14 of the Listing Rules.

AGM

A form of proxy for use at the AGM is enclosed with this circular. Whether or not you are able to attend the AGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong (for holders of H Shares only) or the Company's office at 4809, Jinzhonghuan Main Business Building, No. 3037 Jintian Road, Futian, Shenzhen, PRC (for holders of Domestic Shares only) as soon as possible and in any event not less than 24 hours before the time appointed for holding the AGM 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 AGM or any adjournment thereof (as the case may be) should you so wish, and in such event, the form of proxy previously submitted shall be deemed to be revoked.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, as at the Latest Practicable Date, no Shareholder has a material interest in the Equity Transfer Agreement and the transactions contemplated thereunder. As such, no Shareholder will be required to abstain from voting on the resolution to be proposed at the AGM to approve the Equity Transfer Agreement and the transactions contemplated thereunder.

Each of the resolutions proposed to be approved at the AGM will be taken by poll and an announcement will be made by the Company after the AGM on the results of the AGM.

CLOSURE OF REGISTER OF MEMBERS

The registration in the register of members of the Company will be closed from Wednesday, 25 June 2025 to Monday, 30 June 2025, both days inclusive, during which period no transfer of Shares will be effected. For the identification of Shareholders who are qualified to attend and vote at the AGM, all transfer documents accompanied by the relevant H Share certificates must be lodged with the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong, not later than 4:30 p.m. on Tuesday, 24 June 2025 (for holders of H Shares only) or the Company's office at 4809, Jinzhonghuan Main Business Building, No.

16 -

LETTER FROM THE BOARD

3037 Jintian Road, Futian, Shenzhen, PRC, not later than 4:00 p.m. on Tuesday, 24 June 2025 (for holders of Domestic Shares only). Shareholders whose names appear on the register of members of the Company on Monday, 30 June 2025 will be entitled to attend the AGM.

RECOMMENDATION

The Board considers that (i) granting the Directors the General Mandate; (ii) reappointment of Auditor are in the interests of the Company and the Shareholders as a whole; and (iii) the terms and conditions of the Equity Transfer Agreement (including the Consideration) are on normal commercial terms, which are fair and reasonable, and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the relevant resolutions to be proposed at the AGM.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this circular.

Shareholders and potential investors of the Company should note that the Completion is subject to the fulfilment of the conditions precedent under the Equity Transfer Agreement. As the Acquisition may or may not proceed, Shareholders and potential investors of the Company are reminded to exercise caution when dealing in the securities of the Company.

Yours faithfully,

For and on behalf of the Board

Shenyang Public Utility Holdings Company Limited

Zhang Jing Ming

Chairman

17 -

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

1. FINANCIAL INFORMATION OF THE GROUP

Financial information of the Group for each of the three years ended 31 December 2022, 2023 and 2024 are disclosed in the following documents which have been published on the websites of the Stock Exchange at www.hkexnews.hk and the Company at www.shenyang747.com:

(i) on pages 54 to 267 of the annual report of the Company for the year ended 31 December 2022 published on 27 April 2023:

https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0427/2023042701359.pdf

(ii) on pages 54 to 224 of the annual report of the Company for the year ended 31 December 2023 published on 26 April 2024:

https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0426/2024042600730.pdf

(iii) on pages 58 to 222 of the annual report of the Company for the year ended 31 December 2024 published on 29 April 2025:

https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0429/2025042900727.pdf

2. INDEBTEDNESS STATEMENT

As at the close of business on 30 April 2025, being the latest practicable date for the purpose of ascertaining the information contained in this statement of indebtedness prior to the printing of this circular, the indebtedness of the Group and the Target Group is as follows:

Bank borrowings

The Group had a bank borrowing with principal amount of RMB5,000,000, which was interest-bearing at 5.5% per annum and maturing by January 2026, guaranteed by an independent third party.

The Target Group had a bank borrowing with principal amount of RMB15,000,000, which was interest-bearing at a floating rate calculated and adjusted annually by 1-year Loan Prime Rate ("LPR") +0.5% per annum and maturing by April 2029, secured by certain property, plant and equipment of an independent third party and corporate guarantees provided by two independent third parties.

Other borrowing

The Group had an unsecured other borrowing of approximately RMB7,215,000. Pursuant to the supplemental agreement dated 12 January 2024, the fixed monthly charges shall be calculated up to 31 December 2023 and the aggregate amount for principal and fixed monthly charges of RMB7,215,000 shall be repayable before 30 June 2024.

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Lease liabilities

The Group, as a lessee, had outstanding unpaid contractual lease liabilities of approximately RMB18,453,000 in relation to the remaining lease terms of right-of-use assets of a land, resorts and office premises, which are unsecured and unguaranteed.

Amounts due to shareholders

The Group had an outstanding balance of amount due to a shareholder of the Group of RMB2,448,000. The balance was non-trade in nature, unsecured, non-interest bearing and repayable on demand.

The Target Group had an outstanding balance of amount due to a shareholder of the Target Group of RMB3,552,000. The balance was non-trade in nature, unsecured, non-interest bearing and repayable on demand.

Amount due to a non-controlling interest

The Group had an outstanding balance of amount due to a non-controlling interest of RMB700,000. The balance was non-trade in nature, unsecured, non-interest bearing and repayable on demand.

Save as aforesaid or otherwise disclosed herein, and apart from intra-group liabilities and normal trade payables, as at the close of the business on 30 April 2025, being the latest practicable date for the purpose of this statement of indebtedness prior to printing of this circular, the Group and the Target Group did not have any debt securities issued and outstanding, and authorised or otherwise created but unissued, indebtedness in the nature of borrowing of the Group and the Target Group including bank overdrafts or liabilities under acceptances (other than normal trade bills) or hire purchase commitments, or outstanding mortgages and charges, or contingent liabilities or guarantees or liabilities not disclosed above in the statement of indebtedness.

3. SUFFICIENCY OF WORKING CAPITAL

The Directors, after due and careful enquiry, are of the opinion that taking into account (i) the Acquisition, (ii) the internal resources of the Group, (iii) the external financing facilities presently available and (iv) the forecast of future operating net cash inflow based on historical business performance and outlook of the business development, the Group has sufficient working capital for its present requirements for at least the next twelve months from the date of this circular, in the absence of unforeseen circumstances. The Company has obtained a letter on the working capital statement from the Auditor as required under Rule 14.66(12) of the Listing Rules.

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

4. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors confirmed that there had been no material adverse change in the financial or trading position or prospects of the Group since 31 December 2024, being the date to which the latest published audited consolidated financial statements of the Group were made up.

5. FINANCIAL AND TRADING PROSPECTS

The Group is principally engaged in construction of infrastructure and development of properties, and property investment and leasing business.

Construction of Infrastructure Business

The construction of infrastructure business is one of the principal businesses of the Group. The main infrastructure project of the Group is Zhongfang Chaozhou Jing Nan Industrial Park Project. The construction works of this project had already been done and the overall settlement of this project was also fully completed by the Chaozhou government in the PRC in 2024.

The Group will continue to firmly pursue its goal of steady development and promote the infrastructure project while actively responding to national policies and exploring other infrastructure projects with potential; at the same time, it will integrate the Group's resources to promote the construction and operation of various property projects to achieve profitability as soon as possible.

Development of Properties Business

The Shennongjia Hotel, a property development project of the Company, is a large-scale integrated tourism resort and business leisure project built in the Shennongjia scenic area. It includes hotel, courtyard houses, an entertainment centre, and commercial facilities. The project consists of a main building, an annex building, ten courtyard houses, a sports club, and a commercial street. The total floor area of this project exceeds 50,000 square metres and comprises over 500 hotel rooms. As at the Latest Practicable Date, the construction of the main building, the annex building and the courtyard houses have been basically completed. Initially, the hotel's design has been finalised, and renovation work has also started. The Company's hotel project team also considered managing and operating the hotel internally, led by its experienced senior management, while outsourcing the food and beverage operations to experienced management company to enhance service quality and cost efficiency.

I-3 -

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

while maximising the return of the hotel project, the Group's management is now determined to engage a professional hotel management company to oversee the hotel operations instead of managing it internally.

As at the Latest Practicable Date, two hotel management companies have been shortlisted. The Company is evaluating how to balance these operational requirements with adequate financial resources and market positioning. Further cost assessments, budget planning, and market research are ongoing, within current construction budget, to determine the most viable strategy. While the hotel was initially scheduled to open in the second half of 2025, due to the aforementioned, the opening is expected to be postponed to 2026. The Company remains committed to ensuring that the final operational structure aligns with its long-term strategic objectives while maintaining service excellence and cost efficiency.

During the year ended 31 December 2024, taking into account the business strategy of Shennongjia Hotel project, the Group transferred properties (including hotel, an entertainment centre and commercial facilities) with a carrying value of approximately RMB139,716,000 to investment properties.

The Group will from time to time explore suitable investment and construction projects through strong connections of the management and public and private tenders.

Property Investment and Leasing Business

The Group's property investment and leasing business is mainly distributed in the cities such as Sanhe, Guangzhou, Beijing and Shennongjia Forestry District. The Company identifies potential properties for investment purposes from time to time to receive rental income and may enjoy potential property appreciation income in the future. The Group currently owns 11 shop units and 60 car parking spaces located in Sanhe, a shop unit in Guangzhou, 125 offices located in the Zhiying Commercial Center in Liangxiang Higher Education Park, Fangshan, Beijing and a commercial property in Shunyi, Beijing as well as Shennongjia Hotel (including hotel, an entertainment centre and commercial facilities) in Shennongjia Forestry District.

I-4 -

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

The Group has equipped a professional team in property leasing and property management and will adjust the business strategy either for sale or for lease according to the market conditions from time to time.

Property Management Business

As abovementioned, the Group not only take part in property leasing but also property management for the investment properties of the Group. It possesses significant expertise in commercial property management.

With a proven track record in property development, construction, and commercial property management, the Group is well-positioned to leverage its expertise through the Acquisition. By integrating the Group's experience with the Target Company's specialisation in residential property management, the Group can offer a more comprehensive suite of services. This synergy will enhance the Group's ability to manage diverse property types effectively, providing a platform for geographic expansion and improved service offerings.

The Target Company has good reputation in property management, particularly in Guangzhou. It serves as a valuable foundation for the Group. Combining with its extensive resources and network, the Group is well-positioned to secure additional property management contracts in the future. This partnership will enhance the Group's presence in the property management market and solidify its competitive advantage.

Property management is a recurring revenue business. It offers predictable cash flows and reducing the Group's reliance on the cyclical nature of property development and construction. This business development is in line with the Group's long-term growth strategy and enhances its resilience in volatile market conditions. Additionally, the Target Company's operations in Guangzhou have the potential to generate supplementary revenue streams through value-added services, such as leasing support, facility upgrades, and concierge offerings. These services not only contribute to higher profitability but also foster stronger customer relationships, promoting long-term retention and growth.

I-5 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

The Board of Directors

Shenyang Public Utility Holdings Company Limited

No. 1-4, 20A, Central Street

Shenyang Economic and Technological Development Zone

People's Republic of China

ACCOUNTANTS' REPORT ON HISTORICAL FINANCIAL INFORMATION OF GUANGZHOU ZHUDAO PROPERTY MANAGEMENT COMPANY LIMITED AND ITS SUBSIDIARY TO THE DIRECTORS OF SHENYANG PUBLIC UTILITY HOLDINGS COMPANY LIMITED

久安(香港)會計師事務所有限公司
Asian Alliance (HK) CPA Limited

Introduction

We report on the historical financial information of Guangzhou Zhudao Property Management Company Limited (廣州市珠島物業管理有限公司) (the "Target Company") and its subsidiary (together, the "Target Group") set out on pages II-4 to II-45, which comprises the consolidated statements of financial position as at 31 December 2022, 31 December 2023 and 31 December 2024, and the consolidated statements of profit or loss and other comprehensive income, the consolidated statements of changes in equity and the consolidated statements of cash flows for three years ended 31 December 2022, 31 December 2023 and 31 December 2024 (the "Relevant Periods") and material accounting policy information and other explanatory information (together the "Historical Financial Information"). The Historical Financial Information set out on pages II-4 to II-45 forms an integral part of this report, which has been prepared for inclusion in the circular of Shenyang Public Utility Holdings Company Limited (the "Company") dated 4 June 2025 (the "Circular") in connection with the proposed acquisition of 51% equity interest in the Target Company by Shenzhen Wanzi Hotel Apartment Management Company Limited (深圳市萬紫酒店公寓管理有限公司), an indirect wholly-owned subsidiary of the Company.

Director's responsibility for the Historical Financial Information

The sole director of the Target Company is responsible for the preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of preparation and presentation set out in Note 2 to the Historical Financial Information, and for such internal control as the sole director determines is necessary to enable the preparation of Historical Financial Information that is free from material misstatement, whether due to fraud or error.

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Reporting Accountants' Responsibility

Our responsibility is to express an opinion on the Historical Financial Information and to report our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 200 “Accountants’ Reports on Historical Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). This standard requires that we comply with ethical standards and plan and perform our work to obtain reasonable assurance about whether the Historical Financial Information is free from material misstatement.

Our work involved performing procedures to obtain evidence about the amounts and disclosures in the Historical Financial Information. The procedures selected depend on the reporting accountants’ judgement, including the assessment of risks of material misstatement of the Historical Financial Information, whether due to fraud or error. In making those risk assessments, the reporting accountants consider internal control relevant to the entity’s preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of preparation and presentation set out in Note 2 to the Historical Financial Information, in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our work also included evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the sole director, as well as evaluating the overall presentation of the Historical Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the Historical Financial Information gives, for the purposes of the accountants’ report, a true and fair view of the Target Group’s financial position as at 31 December 2022, 31 December 2023 and 31 December 2024 and of its financial performance and cash flows for the Relevant Periods in accordance with the basis of preparation set out in Note 2 to the Historical Financial Information.

Material Uncertainty Related to Going Concern

We draw attention to Note 2 in the Historical Financial Information, which indicates that as of 31 December 2024, the Target Group’s current liabilities exceeded its current assets by approximately RMB2,903,000 and the Target Group has net liabilities of approximately RMB17,515,000. This condition along with other matters set forth in Note 2 to the Historical Financial Information, indicate that a material uncertainty exists that may cast significant doubt on the Target Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Report on Matters Under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Adjustments

In preparing the Historical Financial Information, no adjustment to the Underlying Financial Statements as defined on page II-4 for the Target Company have been made.

Asian Alliance (HK) CPA Limited
Certified Public Accountants (Practising)
Chung Chi Chiu
Practising Certificate Number: P06610

8/F Catic Plaza,
8 Causeway Road,
Causeway Bay,
Hong Kong

4 June 2025

II-3 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

I. HISTORICAL FINANCIAL INFORMATION OF THE TARGET GROUP

Preparation of Historical Financial Information

Set out below is the Historical Financial Information which forms an integral part of this accountants’ report.

The consolidated financial statements of the Target Group for the Relevant Periods, on which the Historical Financial Information is based, were audited by Asian Alliance (HK) CPA Limited in accordance with Hong Kong Standards on Auditing issued by HKICPA (“Underlying Financial Statements”).

The Historical Financial Information is presented in Renminbi (“RMB”) and all values are rounded to the nearest thousand (RMB’000) except when otherwise indicated.

II-4 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

	Notes	Year ended 31 December
		2022 RMB'000	2023 RMB'000	2024 RMB'000
Revenue — contracts with customers	7	17,019	17,320	17,203
Cost of sales		(12,884)	(12,090)	(11,848)
Gross profit		4,135	5,230	5,355
Other income	8	192	175	137
Administrative and operating expenses		(4,680)	(4,099)	(3,219)
Finance costs	9	(1,093)	(1,018)	(485)
(Loss) profit before tax		(1,446)	288	1,788
Income tax credit (expense)	10	32	(50)	(115)
(Loss) profit and total comprehensive (expense) income for the year	11	(1,414)	238	1,673
Attributable to:
— Owners of the Target Company		(1,171)	239	1,320
— Non-controlling interests	25	(243)	(1)	353
(Loss) profit and total comprehensive (expense) income for the year		(1,414)	238	1,673

– II-5 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

	Notes	At 31 December
		2022 RMB'000	2023 RMB'000	2024 RMB'000
NON-CURRENT ASSETS
Property, plant and equipment	15	186	142	378
Deferred tax assets		32	21	—
		218	163	378
CURRENT ASSETS
Trade receivables	16	1,525	1,579	757
Deposits and other receivables	17	371	432	398
Amount due from a holding company	23	—	—	1,001
Amount due from an immediate holding company	23	388	—	—
Cash and cash equivalents	18	1,449	4,103	3,174
		3,733	6,114	5,330
CURRENT LIABILITIES
Trade payables	19	193	48	83
Contract liabilities	20	1,196	1,288	1,416
Other payables and accruals	21	3,342	3,203	3,152
Bank and other borrowings	22	5,235	235	10
Amount due to a holding company	23	—	—	3,552
Amount due to an immediate holding company	23	8,946	16,439	—
Tax liabilities		—	22	20
		18,912	21,235	8,233
NET CURRENT LIABILITIES		(15,179)	(15,121)	(2,903)
TOTAL ASSETS LESS CURRENT LIABILITIES		(14,961)	(14,958)	(2,525)
NON-CURRENT LIABILITIES
Bank and other borrowings	22	4,465	4,230	14,990
NET LIABILITIES		(19,426)	(19,188)	(17,515)
CAPITAL AND RESERVES
Share capital	24	1,000	1,000	1,000
Reserves		(19,976)	(19,737)	(18,417)
Equity attributable to owners of the Target Company		(18,976)	(18,737)	(17,417)
Non-controlling interests	25	(450)	(451)	(98)
TOTAL DEFICITS		(19,426)	(19,188)	(17,515)

– II-6 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

	Attributable to owners of the Target Company
	Share capital RMB'000	Capital reserve (Note) RMB'000	Accumulated losses RMB'000	Sub-total RMB'000	Non-controlling interests RMB'000	Total RMB'000
At 1 January 2022	1,000	5,000	(23,805)	(17,805)	(207)	(18,012)
Loss and total comprehensive expense for the year	—	—	(1,171)	(1,171)	(243)	(1,414)
At 31 December 2022	1,000	5,000	(24,976)	(18,976)	(450)	(19,426)
Profit (loss) and total comprehensive income (expense) for the year	—	—	239	239	(1)	238
At 31 December 2023	1,000	5,000	(24,737)	(18,737)	(451)	(19,188)
Profit and total comprehensive income for the year	—	—	1,320	1,320	353	1,673
At 31 December 2024	1,000	5,000	(23,417)	(17,417)	(98)	(17,515)

Note:
Capital reserve represents a waiver of the loan amounted to RMB5,000,000 from a former immediate holding company during the year ended 31 December 2020, which is deemed as capital contribution.

II-7 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year ended 31 December
	2022 RMB'000	2023 RMB'000	2024 RMB'000
OPERATING ACTIVITIES
(Loss) profit for the year	(1,414)	238	1,673
Adjustments for:
Income tax (credit) expense	(32)	50	115
Depreciation of property, plant and equipment	78	66	56
Impairment loss recognised (reversed) on trade receivables, net	14	5	(18)
Impairment loss recognised on other receivables, net	2	—	9
Interest income	(4)	(2)	(3)
Finance cost	1,093	1,018	485
Operating cash flows before movements in working capital
(Increase) decrease in trade receivables	(263)	1,375	2,317
(Increase) decrease in deposit and other receivables	(566)	(59)	840
Increase in amount due from a holding company	(30)	(61)	25
Decrease in amount due from an immediate holding company	912	—	—
(Decrease) increase in trade payables	(21)	(145)	35
Increase (decrease) in other payables and accruals	273	(139)	(51)
(Decrease) increase in contract liabilities	(120)	92	128
Cash generated from operations	185	1,063	2,293
Income taxes paid	(12)	(17)	(96)
NET CASH FROM OPERATING ACTIVITIES	173	1,046	2,197
INVESTING ACTIVITIES
Interest received	4	2	3
Purchase of property, plant and equipment	(23)	(22)	(292)
NET CASH USED IN INVESTING ACTIVITIES	(19)	(20)	(289)

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

	Year ended 31 December
	2022	2023	2024
	RMB'000	RMB'000	RMB'000
FINANCING ACTIVITIES
(Repayment to) advance from an immediate holding company	(9,375)	7,881	(16,439)
Advance from a holding company	—	—	3,552
New bank and other borrowings raised	9,700	—	15,000
Interest paid	(1,093)	(1,018)	(485)
Repayment of bank and other borrowings	—	(5,235)	(4,465)
NET CASH (USED IN) FROM FINANCING ACTIVITIES	(768)	1,628	(2,837)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(614)	2,654	(929)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR	2,063	1,449	4,103
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR represented by bank balances and cash	1,449	4,103	3,174

II-9 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE TARGET GROUP

1. GENERAL INFORMATION

The Target Company was incorporated in the People's Republic of China (the “PRC”) and its registered office and principal place of business is located at Room 3, No.15 Guangan Road, Liwan District, Guangzhou city, Guangdong Province, the PRC.

The Target Company and its subsidiary are principally engaged in provision of property management service.

As at the end of the Relevant Periods and date of this report, the Target Company had direct equity interests in the following subsidiary, which is a private company, particulars of which are set out below:

Name of subsidiary	Place of incorporation and operations	Issued and fully paid up registered capital	Percentage of equity interest attributable to the Target Company			Principal activities
			Direct 2022	Direct 2023	Direct 2024
Shijiazhuang Luquan District
Runhua Property Service Company Limited*
(石家莊市鹿泉區潤華物業服務有限公司)	PRC	RMB3,000,000	51%	51%	51%	Property management service

For identification purpose only

2. BASIS OF PREPARATION AND PRESENTATION OF HISTORICAL FINANCIAL INFORMATION

The Historical Financial Information been prepared based on the HKFRS Accounting Standards issued by HKICPA. In addition, the Historical Financial Information includes the applicable disclosures required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”).

Going Concern

As at 31 December 2024, the Target Group's current liabilities exceeded its current assets by approximately RMB2,903,000 and the Target Group has net liabilities of approximately RMB17,515,000. These factors indicate the existence of a material uncertainty which may cast significant doubt about the Target Group's ability to continue as a going concern.

In view of such circumstances, the sole director of the Target Company (the “Sole Director”) has given careful consideration to the future liquidity and performance of the Target Group and its available sources of financing in assessing whether the Target Group will have sufficient financial resources to continue as a going concern after taking into consideration the followings:

(i) reviewing the business operations of the Target Group to improve their efficiency;

(ii) exploring new property management opportunities for setting up new business lines to generate additional net cash inflow;

(iii) implementing cost saving measures to control administrative and operating costs with a view to reduce the working capital requirements of the Target Group; and

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

(iv) obtaining a confirmation from a holding company not to demand repayment of the amount due from the Target Group of RMB3,552,000 as at 31 December 2024, unless the repayment would not affect the ability of the Target Group to repay other creditors in the normal course of business.

The Sole Director has reviewed the Target Group's cash flow projections prepared by the management, which covers a period of not less than twelve months from 31 December 2024, on the basis that the Target Group's aforementioned plans and measures will be successful, the Sole Director believes that the Target Group will have sufficient cash resources to satisfy its future working capital and other financing requirements as and when they fall due in the next twelve months from the end of the reporting period. Accordingly, the Sole Director believes that the Target Group will continue as a going concern and therefore consider it is appropriate to adopt a going concern basis in preparing the Historical Financial Information.

Amendments to HKFRS Accounting Standards that are mandatorily effective for the current year

In the current year, the Target Group has applied the following amendments to HKFRS Accounting Standards issued by HKICPA for the first time, which are mandatorily effective for the Target Group's annual period beginning on 1 January 2024 for the preparation of the Historical Financial Information:

Amendments to HKFRS 16	Lease Liability in a Sale and Leaseback
Amendments to HKAS 1	Classification of Liabilities as Current or Non-current and related amendments to Hong Kong Interpretation 5 (2020)
Amendments to HKAS 1	Non-current Liabilities with Covenants
Amendments to HKAS 7 and HKFRS 7	Supplier Finance Arrangements

The application of the amendments to HKFRS Accounting Standards in the current year has had no material impact on the Target Group's financial positions and performance for the Relevant Periods and/or on the disclosures set out in these Historical Financial Information.

New and amendments to HKFRS Accounting Standards in issue but not yet effective

The Target Group has not early applied the following new and amendments to HKFRS Accounting Standards that have been issued but are not yet effective:

Amendments to HKFRS 9 and HKFRS 7	Amendments to the Classification and Measurement of Financial Instruments^{3}
Amendments to HKFRS 10 and HKAS 28	Sale or Contribution of Assets between an Investor and its Associate or Joint Venture^{1}
Amendments to HKFRS Accounting Standards	Annual Improvements to HKFRS Accounting Standards — Volume 11^{3}
Amendments to HKAS 21	Lack of Exchangeability^{2}
HKFRS 18	Presentation and Disclosure in Financial Statements^{4}

Effective for annual periods beginning on or after a date to be determined.
Effective for annual periods beginning on or after 1 January 2025.
Effective for annual periods beginning on or after 1 January 2026.
Effective for annual periods beginning on or after 1 January 2027.

The Sole Director expects that the adoption of these new and amendments to HKFRS Accounting Standards will have no material impact on the Historical Financial Information in the foreseeable future.

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

3. MATERIAL ACCOUNTING POLICY INFORMATION

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Target Company and its subsidiary. Control is achieved when the Target Company:

has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.

The Target Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

Consolidation of a subsidiary begins when the Target Group obtains control over the subsidiary and ceases when the Target Group loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Target Group gains control until the date when the Target Group ceases to control the subsidiary.

Profit or loss and each item of other comprehensive income are attributed to the owners of the Target Company and to the non-controlling interest. Total comprehensive income of a subsidiary is attributed to the owners of the Target Company and to the non-controlling interest even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of the subsidiary to bring its accounting policies in line with the Target Group's accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Target Group are eliminated in full on consolidation.

Non-controlling interests in subsidiary are presented separately from the Target Group's equity therein, which represent present ownership interests entitling their holders to a proportionate share of net assets of the relevant subsidiary upon liquidation.

Revenue from contracts with customers

The Target Group recognises revenue when (or as) a performance obligation is satisfied, i.e. when "control" of the goods or services underlying the particular performance obligation is transferred to the customer.

A performance obligation represents a good or service (or a bundle of goods or services) that is distinct or a series of distinct goods or services that are substantially the same.

II-12 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Control is transferred over time and revenue is recognised over time by reference to the progress towards complete satisfaction of the relevant performance obligation if one of the following criteria is met:

the customer simultaneously receives and consumes the benefits provided by the Target Group's performance as the Target Group performs;
the Target Group's performance creates or enhances an asset that the customer controls as the Target Group performs; or
the Target Group's performance does not create an asset with an alternative use to the Target Group and the Target Group has an enforceable right to payment for performance completed to date.

Otherwise, revenue is recognised at a point in time when the customer obtains control of the distinct good or service.

A contract asset represents the Target Group's right to consideration in exchange for goods or services that the Target Group has transferred to a customer that is not yet unconditional. It is assessed for impairment in accordance with HKFRS 9. In contrast, a receivable represents the Target Group's unconditional right to consideration, i.e. only the passage of time is required before payment of that consideration is due.

A contract liability represents the Target Group's obligation to transfer goods or services to a customer for which the Target Group has received consideration (or an amount of consideration is due) from the customer.

A contract asset and a contract liability relating to the same contract are accounted for and presented on a net basis.

Over time revenue recognition: measurement of progress towards complete satisfaction of a performance obligation

Output method

The progress towards complete satisfaction of a performance obligation is measured based on output method, which is to recognise revenue on the basis of direct measurements of the value of the goods or services transferred to the customer to date relative to the remaining goods or services promised under the contract, that best depict the Target Group's performance in transferring control of goods or services.

As a practical expedient, if the Target Group has a right to consideration in an amount that corresponds directly with the value of the Target Group's performance completed to date, the Target Group recognises revenue in the amount to which the Target Group has the right to invoice.

Existence of significant financing component

In determining the transaction price, the Target Group adjusts the promised amount of consideration for the effects of the time value of money if the timing of payments agreed (either explicitly or implicitly) provides the customer or the Target Group with a significant benefit of financing the transfer of goods or services to the customer. In those circumstances, the contract contains a significant financing component. A significant financing component may exist regardless of whether the promise of financing is explicitly stated in the contract or implied by the payment terms agreed to by the parties to the contract.

For contracts where the period between payment and transfer of the associated goods or services is less than one year, the Target Group applies the practical expedient of not adjusting the transaction price for any significant financing component.

II-13 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Provision of property management services

For property management services, the Target Group bills a fixed amount for services provided on a monthly or an annually basis and recognises as revenue in the amount to which the Target Group has a right to bill and that corresponds directly with the value of performance completed. Revenue from providing property management services is recognised in the accounting period in which the services are rendered as the customer simultaneously receives and consumes the benefits provided by the Target Group's performance when the Target Group performs.

For property management services income from properties managed under lump sum basis, where the Target Group acts as principal and is responsible for providing the property management services to the property owners, the Target Group entitles to revenue at the value of property management services fee received or receivable and recognises all related property management costs as its cost of service.

Borrowing costs

All borrowing costs are recognised in profit or loss in the period in which they are incurred.

Government grants

Government grants are not recognised until there is reasonable assurance that the Target Group will comply with the conditions attaching to them and that the grants will be received.

Government grants related to income are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Target Group with no future related costs are recognised in profit or loss in the period in which they become receivable. Such grants are presented under "other income".

Employee benefits

Retirement benefits costs

Payments to state-managed retirement benefit schemes are recognised as an expense when employees have rendered service entitling them to the contributions.

Termination benefits

A liability for a termination benefit is recognised at the earlier of when the Target Group entity can no longer withdraw the offer of the termination benefit and when it recognises any related restructuring costs.

Short-term employee benefits

Short-term employee benefits are recognised at the undiscounted amount of the benefits expected to be paid as and when employees rendered the services. All short-term employee benefits are recognised as an expense unless another HKFRS Accounting Standards requires or permits the inclusion of the benefit in the cost of an asset.

A liability is recognised for benefits accruing to employees (such as wages and salaries, annual leave and sick leave) after deducting any amount already paid.

II-14 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Taxation

Income tax expense represents the sum of current and deferred income tax expense.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit/(loss) before tax because of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Target Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit and at the time of the transaction does not give rise to equal taxable and deductible temporary differences. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

Deferred tax liabilities are recognised for taxable temporary differences associated with investment in subsidiary except where the Target Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rate (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Target Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

II-15 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority on either:

(a) the same taxable entity; or
(b) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.

Property, plant and equipment

Property, plant and equipment are tangible assets that are held for use in the production or supply of goods or services, or for administrative purposes. Property, plant and equipment are stated in the consolidated statement of financial position at cost less subsequent accumulated depreciation and subsequent accumulated impairment losses, if any.

Depreciation is recognised so as to write-off the cost of assets less their residual values over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

Impairment of property, plant and equipment

At the end of the reporting period, the Target Group reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication that these assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the relevant asset is estimated in order to determine the extent of the impairment loss, if any.

The recoverable amount of property, plant and equipment are estimated individually. When it is not possible to estimate the recoverable amount individually, the Target Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

In testing a cash-generating unit for impairment, corporate assets are allocated to the relevant cash-generating unit when a reasonable and consistent basis of allocation can be established, or otherwise they are allocated to the smallest group of cash generating units for which a reasonable and consistent allocation basis can be established. The recoverable amount is determined for the cash-generating unit or group of cash-generating units to which the corporate asset belongs, and is compared with the carrying amount of the relevant cash-generating unit or group of cash-generating units.

II-16 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset (or a cash-generating unit) for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or a cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or a cash-generating unit) is reduced to its recoverable amount. For corporate assets or portion of corporate assets which cannot be allocated on a reasonable and consistent basis to a cash-generating unit, the Target Group compares the carrying amount of a group of cash-generating units, including the carrying amounts of the corporate assets or portion of corporate assets allocated to that group of cash-generating units, with the recoverable amount of the Target Group of cash-generating units. In allocating the impairment loss, the impairment loss is allocated first to reduce the carrying amount of any goodwill (if applicable) and then to the other assets on a pro-rata basis based on the carrying amount of each asset in the unit or the group of cash-generating units. The carrying amount of an asset is not reduced below the highest of its fair value less costs of disposal (if measurable), its value in use (if determinable) and zero. The amount of the impairment loss that would otherwise have been allocated to the asset is allocated pro-rata to the other assets of the unit or the group of cash-generating units. An impairment loss is recognised immediately in profit or loss.

Cash and cash equivalents

Cash and cash equivalents presented on the consolidated statement of financial position include:

(a) cash, which comprises of cash on hand, excluding bank balances that are subject to regulatory restrictions that result in such balances no longer meeting the definition of cash; and

(b) cash equivalents, which comprises of short-term (generally with original maturity of three months or less), highly liquid investments that are readily convertible to a known amount of cash and which are subject to an insignificant risk of changes in value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above.

Provisions

Provisions are recognised when the Target Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Target Group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material).

Financial instruments

Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions of the instrument. All regular way purchases or sales of financial assets are recognised and derecognised on a settlement date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the market place.

II-17 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Financial assets and financial liabilities are initially measured at fair value except for trade receivables arising from contracts with customers which are initially measured in accordance with HKFRS 15 Revenue from Contracts with Customers. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets or financial liabilities at fair value through profit or loss ("FVTPL")) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in profit or loss.

The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating interest income and interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts and payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Financial assets

Classification and subsequent measurement of financial assets

Financial assets that meet the following conditions are subsequently measured at amortised cost:

the financial asset is held within a business model whose objective is to collect contractual cash flows; and
the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

All other financial assets are subsequently measured at FVTPL.

A financial asset is held for trading if:

it has been acquired principally for the purpose of selling in the near term; or
on initial recognition it is a part of a portfolio of identified financial instruments that the Target Group manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.

In addition, the Target Group may irrevocably designate a financial asset that are required to be measured at the amortised cost or FVTOCI as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch.

i) Amortised cost and interest income

Interest income is recognised using the effective interest method for financial assets measured subsequently at amortised cost. Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit-impaired (see below). For financial assets that have subsequently become credit-impaired, interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset from the next reporting period. If the credit risk on the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest income is recognised by applying the effective interest rate to the gross carrying amount of the financial asset from the beginning of the reporting period following the determination that the asset is no longer credit-impaired.

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Impairment of financial assets subject to impairment assessment under HKFRS 9

The Target Group performs impairment assessment under expected credit loss ("ECL") model on financial assets (including trade and other receivables and bank balances) which are subject to impairment assessment under HKFRS 9. The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition.

Lifetime ECL represents the ECL that will result from all possible default events over the expected life of the relevant instrument. In contrast, 12-month ECL ("12m ECL") represents the portion of lifetime ECL that is expected to result from default events that are possible within 12 months after the reporting date. Assessments are done based on the Target Group's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current conditions at the reporting date as well as the forecast of future conditions.

The Target Group always recognises lifetime ECL for trade receivables.

For all other instruments, the Target Group measures the loss allowance equal to 12m ECL, unless there has been a significant increase in credit risk since initial recognition, in which case the Target Group recognises lifetime ECL. The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition.

(i) Significant increase in credit risk

In assessing whether the credit risk has increased significantly since initial recognition, the Target Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Target Group considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort.

In particular, the following information is taken into account when assessing whether credit risk has increased significantly:

an actual or expected significant deterioration in the financial instrument's external (if available) or internal credit rating;
significant deterioration in external market indicators of credit risk, e.g. a significant increase in the credit spread, the credit default swap prices for the debtor;
existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant decrease in the debtor's ability to meet its debt obligations;
an actual or expected significant deterioration in the operating results of the debtor;
an actual or expected significant adverse change in the regulatory, economic, or technological environment of the debtor that results in a significant decrease in the debtor's ability to meet its debt obligations.
II-19 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Irrespective of the outcome of the above assessment, the Target Group presumes that the credit risk has increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the Target Group has reasonable and supportable information that demonstrates otherwise.

The Target Group regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.

(ii) Definition of default

For internal credit risk management, the Target Group considers an event of default occurs when information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Target Group, in full (without taking into account any collaterals held by the Target Group).

Irrespective of the above, the Target Group considers that default has occurred when a financial asset is more than 90 days past due unless the Target Group has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.

(iii) Credit-impaired financial assets

A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about the following events:

(a) significant financial difficulty of the issuer or the borrower;

(b) a breach of contract, such as a default or past due event;

(c) the lender(s) of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;

(d) it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or

(e) the disappearance of an active market for that financial asset because of financial difficulties.

(iv) Write-off policy

The Target Group writes-off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, for example, when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings. Financial assets written-off may still be subject to enforcement activities under the Target Group's recovery procedures, taking into account legal advice where appropriate. A write-off constitutes a derecognition event. Any subsequent recoveries are recognised in profit or loss.

II-20 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

(v) Measurement and recognition of ECL

The measurement of ECL is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data and forward-looking information. Estimation of ECL reflects an unbiased and probability-weighted amount that is determined with the respective risks of default occurring as the weights. The Target Group uses a practical expedient in estimating ECL on trade receivables using a provision matrix taking into consideration historical credit loss experience and forward-looking information that is available without undue cost or effort.

Generally, the ECL is the difference between all contractual cash flows that are due to the Target Group in accordance with the contract and the cash flows that the Target Group expects to receive, discounted at the effective interest rate determined at initial recognition.

Lifetime ECL for certain trade receivables are considered on a collective basis taking into consideration past due information and relevant credit information such as forward-looking macroeconomic information.

For collective assessment, the Target Group takes into consideration the following characteristics when formulating the grouping:

Past-due status;
Nature, size and industry of debtors; and
External credit ratings where available.

The grouping is regularly reviewed by management to ensure the constituents of each group continue to share similar credit risk characteristics.

Interest income is calculated based on the gross carrying amount of the financial asset unless the financial asset is credit-impaired, in which case interest income is calculated based on amortised cost of the financial asset.

The Target Group recognises an impairment gain or loss in profit or loss for all financial instruments by adjusting their carrying amount, with the exception of trade receivables and other receivables where the corresponding adjustment is recognised through a loss allowance account.

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Derecognition of financial assets

The Target Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Target Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Target Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Target Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Target Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.

Financial liabilities and equity

Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

Repurchase of the Target Company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Target Company's own equity instruments.

Financial liabilities

All financial liabilities are subsequently measured at amortised cost using the effective interest method.

Financial liabilities at amortised cost

Financial liabilities including trade payable, other payables and accruals, bank and other borrowings and amount due to a holding company/ an immediate holding company are subsequently measured at amortised cost, using the effective interest method.

Derecognition of financial liabilities

The Target Group derecognises financial liabilities when, and only when, the Target Group's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

II-22 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

4. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Target Group’s accounting policies, which are described in Note 3 to the Historical Financial Information, the Sole Director required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying accounting policies

Going concern and liquidity

As explained in Note 2 to the Historical Financial Information, the financial performance and financial position of the Target Group indicates the existence of a material uncertainty which may cast significant doubt on the Target Group’s ability to continue as a going concern. The assessment of the going concern assumptions involves making judgement by the Sole Director, at a particular point of time, about the future outcome of events or conditions which are inherently uncertain. The Sole Director considers that the Target Group has ability to continue as a going concern and the major conditions that may cast significant doubt about the going concern assumptions are set out in Note 2 to the Historical Financial Information.

Key sources of estimation uncertainty

The followings are the key assumption concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

(i) Provision of ECL for trade receivables

The Target Group uses practical expedient in estimating ECL on trade receivables which are not assessed individually using a provision matrix. The provision rates are based on aging of debtors as groupings of various debtors taking into consideration the Target Group’s historical default rates and forward-looking information that is reasonable and supportable available without undue costs or effort. At every reporting date, the historical observed default rates are reassessed and changes in the forward-looking information are considered. Trade receivables of debtors with significant balances and credit-impaired are assessed for ECL individually.

The provision of ECL is sensitive to changes in estimates. The information about the ECL and the Target Group’s trade receivables are disclosed in Notes 6(b) and 16 respectively.

(ii) Provision of ECL for other receivables

The Target Group calculates the ECL for other receivables by using the general approach. The provision rates are based on internal credit ratings and taking into consideration forward-looking information that is reasonable and supportable available without undue costs or effort. At every reporting date, changes in the forward-looking information are considered.

The information about the ECL and the Target Group’s other receivables are disclosed in Notes 6(b) and 17 respectively.

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

(iii) Provision of ECL for due from a holding company/an immediate holding company

The loss allowance for amount due from due from a holding company/an immediate holding company is based on assumptions about risk of default and expected loss rates. The Target Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Target Group's past history, existing market conditions as well as forward-looking estimates at the end of each reporting period.

The information about the ECL and amounts due from a holding company/an immediate holding company are disclosed in Note 6(b) and 23 respectively.

5. CAPITAL RISK MANAGEMENT

The Target Group manages its capital to ensure that the Target Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance. The Group's overall strategy remains unchanged throughout the Relevant Periods.

The capital structure of the Target Group consists of net debts, which includes bank and other borrowings, amount due to a holding company/an immediate holding company, net of cash and cash equivalents and equity attributable to owners of the Target Group, comprising issued share capital, reserves and accumulated losses.

The Sole Director reviews the capital structure regularly. As part of this review, the Sole Director considers the cost of capital and the risk associates with each class of capital. Based on the recommendations of the Sole Director, the Target Group will balance its overall capital structure through the payment of dividends, new share issues as well as the issue of new debts.

6. FINANCIAL INSTRUMENTS

(a) Categories of financial instruments

	At 31 December
	2022	2023	2024
	RMB'000	RMB'000	RMB'000
Financial assets
Amortised cost:	3,421	5,842	5,099
Financial liabilities
Amortised cost:	22,181	24,155	21,787

(b) Financial risk management objectives and policies

The Target Group's major financial instruments include trade receivables, other receivables, amount due from a holding company/an immediate holding company, cash and cash equivalents, trade payables, other payables and accruals, bank and other borrowings and amount due to a holding company/an immediate holding company. Details of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments include market risk (interest rate risk), credit risk and liquidity risk. The policies on how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner.

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Market risk

Interest rate risk

The Target Group is exposed to fair value interest rate risk in relation to fixed-rate bank and other borrowings (Note 22).

The Target Group is exposed to cash flow interest rate risk in relation to variable-rate bank balances (Note 18) and variable-rate bank borrowing (Note 22).

The Target Group currently does not have any interest rate hedging policy. However, the management monitors interest exposure and will consider hedging significant interest rate exposure should the need arise.

Interest income from financial assets that are measured at amortised cost:

| | 2022
RMB'000 | 2023
RMB'000 | 2024
RMB'000 |
| --- | --- | --- | --- |
| Financial assets at amortised cost | 4 | 2 | 3 |
| Interest expense on financial liabilities not measured at FVTPL: | | | |
| | 2022
RMB'000 | 2023
RMB'000 | 2024
RMB'000 |
| Financial liabilities at amortised cost | 1,093 | 1,018 | 485 |

Sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to interest rates at the end of the reporting period. The analysis is prepared assuming the financial instruments outstanding at the end of the reporting period were outstanding for the whole year. A 100 basis point increase or decrease in variable-rate bank borrowing is used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates. Bank balances are excluded from sensitive analysis as the Sole Director considers that the exposure of cash flow interest rate risk arising from them is insignificant.

If the interest rate on variable-rate bank borrowing had been 100 basis points higher/lower and all other variables were held constant, the Target Group's profit after tax for the year ended 31 December 2024 would increase/decrease by RMB112,500.

Credit risk and impairment assessment

Credit risk refers to the risk that the Target Group's counterparties default on their contractual obligations resulting in financial losses to the Target Group. The Target Group's credit risk exposure is primarily attributable to trade receivables, other receivables and bank balances. The Target Group does not hold any collateral or other credit enhancements to cover its credit risk associated with its financial assets.

The Target Group performed impairment assessment for financial assets under ECL model. The Target Group considers whether there has been a significant increase in credit risk of financial assets on an ongoing basis throughout each reporting period by comparing the risk of a default occurring as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information.

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Information about the Target Group's credit risk management, maximum credit risk exposures and the related impairment assessment, if applicable, are summarised as below:

Trade receivables

Customer credit risk is managed by the Target Group's established policy, procedures and control relating to customer credit risk management. The Target Group utilises past due default experience and current past due exposure of debtors to assess customers' ability to settle in accordance with the contractual terms on a regular basis. Other monitoring procedures are in place to ensure that follow-up action is taken to recover overdue debts. Normally, the Target Group does not obtain collateral from customer.

The Target Group has a large number of individual customers from property management services and there is no concentration of credit risk.

In addition, the Target Group performs the impairment assessment under ECL model on trade receivables collectively, which are grouped under a provision matrix based on shared credit risk characteristics by reference to the Target Group's aging of outstanding balances.

Impairment loss, net of reversal, of approximately RMB14,000, RMB5,000 and reversal of impairment loss, net of impairment loss, of approximately RMB18,000 are recognised during the year ended 31 December 2022, 31 December 2023 and 31 December 2024 respectively. Details of the quantitative disclosures are set out below in this note.

Other receivables

The Sole Director makes periodic individual assessment on the recoverability of other receivables based on historical settlement records, past experience, and also quantitative and qualitative information that is reasonable and supportive forward-looking information. For those other receivables that the Sole Director believes that there is no significant increase in credit risk of these amounts since initial recognition and the Target Group provided impairment based on 12m ECL. For those other receivables that are past due or there is significant increase in credit risk since initial recognition, the Sole Director provide impairment based on lifetime ECL.

Impairment loss, net of reversal on other receivables of approximately RMB2,000, RMBNil and RMB9,000 was recognised during the year ended 31 December 2022, 31 December 2023 and 31 December 2024, respectively.

Bank balances

Credit risk on bank balances is limited because the counterparties are reputable banks with high credit ratings assigned by international credit-rating agencies. The Target Group assessed 12m ECL for bank balances by reference to information relating to probability of default and loss given default of the respective credit rating grades published by external credit rating agencies. Based on the average loss rates, the 12m ECL on bank balances is considered to be insignificant and therefore no loss allowance was recognised.

Amount due from a holding company/an immediate holding company

For amount due from a holding company/an immediate holding company, the Sole Director believes that there is no significant increase in credit risk since initial recognition and the Target Group provided impairment based on 12m ECL. For the year ended 31 December 2022, 31 December 2023 and 31 December 2024, the Target Group assessed the ECL for amount due from a holding company/an immediate holding company is insignificant and thus no loss allowance is recognised.

II-26 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

The Target Group's internal credit risk grading assessment comprises the follow categories:

Internal credit rating	Description	Trade receivables	Other financial assets
Low risk	The counterparty has a low risk of default and does not have any past-due amounts	Lifetime ECL — not credit-impaired	12m ECL
Watch list	Debtor frequently repays after due dates but usually settle in full	Lifetime ECL — not credit-impaired	12m ECL
Doubtful	There have been significant increases in credit risk since initial recognition through information developed internally or external resources	Lifetime ECL — not credit-impaired	Lifetime ECL — not credit-impaired
Loss	There is evidence indicating the asset is credit impaired	Lifetime ECL — credit-impaired	Lifetime ECL — credit-impaired
Write-off	There is evidence that the debtor is in severe financial difficulty and the Target Group has no realistic prospect of recovery	Amount is written off	Amount is written off

The table below details the credit risk exposures of the Target Group's financial assets, which are subject to ECL assessment:

	Note	External credit rating	Internal credit rating	12m or lifetime ECL	Gross carrying amount
					At 31 December 2022 RMB'000	At 31 December 2023 RMB'000	At 31 December 2024 RMB'000
Financial assets at amortised costs
Bank balances	18	A1-Aaa	N/A	12m ECL	1,343	4,027	3,172
Trade receivables	16	N/A	(Note a)	Lifetime ECL (not credit-impaired)	993	933	720
				Lifetime ECL (credit-impaired)	546	665	38
					1,539	1,598	758
Other receivables	17	N/A	(Note b)	12m ECL	59	160	77
				Lifetime ECL (credit-impaired)	2	2	101
					61	162	178
Amount due from a holding company	23	N/A	Low risk	12m ECL	—	—	1,001
Amount due from an immediate holding company	23	N/A	Low risk	12m ECL	388	—	—

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Notes:

(a) For trade receivables, the Target Group has applied the simplified approach in HKFRS 9 to measure the loss allowance at lifetime ECL. Except for debtors with significant outstanding balances or credit-impaired, the Target Group determines the ECL on these items on a collective basis, grouped by past due status.

As part of the Target Group's credit risk management, the Target Group uses aging analysis of trade receivables to assess the impairment for its customers in relation to its property management service operation because these customers consist of a large number of small customers with common risk characteristics that are representative of the customers' abilities to pay all amounts due in accordance with the contractual terms. The following table provides information about the exposure to credit risk for trade receivables which are assessed on a collective basis by using provision matrix within lifetime ECL.

	Current (not past due) RMB'000	1-90 days past due RMB'000	91-180 days past due RMB'000	180-270 days past due RMB'000	Over 270 days past due RMB'000	Total RMB'000
At 31 December 2022
Gross amount of trade receivables	244	192	282	275	546	1,539
Average loss rate	0.10%	0.14%	0.19%	0.19%	2.33%
Expected credit loss	—*	—*	1	1	12	14
At 31 December 2023
Gross amount of trade receivables	238	243	244	208	665	1,598
Average loss rate	0.12%	0.15%	0.23%	0.23%	2.69%
Expected credit loss	—*	—*	1	1	17	19
At 31 December 2024
Gross amount of trade receivables	238	105	114	263	38	758
Average loss rate	0.03%	0.04%	0.05%	0.05%	1.52%
Expected credit loss	—*	—*	—*	—*	1	1

Less than RMB1,000

The estimated loss rates are estimated based on historical observed default rates over the expected life of the debtors and are adjusted for forward-looking information that is available without undue cost or effort. The grouping is regularly reviewed by management to ensure relevant information about specific debtors is updated.

(b) For the purpose of internal credit risk management, the Target Group uses past due information to assess whether credit risk has increased significantly since initial recognition.

	Past due RMB'000	Not past due/no fixed repayment terms RMB'000	Total RMB'000
2022
Other receivables	2	59	61
2023
Other receivables	2	160	162
2024
Other receivables	101	77	178

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

The following table show reconciliation of loss allowances that has been recognised for trade receivables:

	Lifetime ECL (not credit-impaired) RMB'000	Lifetime ECL (credit-impaired) RMB'000	Total RMB'000
At 1 January 2022	—	—	—
Change due to financial instruments recognised as at 1 January 2022:
— Impairment losses recognised	—	13	13
New financial asset originated	1	—	1
At 31 December 2022	1	13	14
Change due to financial instruments recognised as at 1 January 2023:
— Impairment losses reversal	(2)	(7)	(9)
— Impairment losses recognised	—	11	11
New financial asset originated	3	—	3
At 31 December 2023	2	17	19
Change due to financial instruments recognised as at 1 January 2024:
— Impairment losses reversal	(3)	(17)	(20)
— Impairment losses recognised	—	1	1
New financial asset originated	1	—	1
At 31 December 2024	—	1	1

The following table show reconciliation of loss allowances that has been recognised for other receivables:

	12m ECL RMB'000	Lifetime ECL (credit-impaired) RMB'000	Total RMB'000
At 1 January 2022	—	—	—
Change due to financial instruments recognised as at 1 January 2022:
— Impairment losses recognised	1	1	2
At 31 December 2022	1	1	2
Change due to financial instruments recognised as at 1 January 2023:
— Impairment losses reversal	(1)	—	(1)
New financial asset originated	1	—	1
At 31 December 2023	1	1	2
Change due to financial instruments recognised as at 1 January 2024:
— Impairment losses reversal	(1)	—	(1)
— Impairment losses recognised	1	9	10
At 31 December 2024	1	10	11

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Liquidity risk

In the management of the liquidity risk, the Target Group monitors and maintains a level of cash and cash equivalents deemed adequate by the Sole Director to finance the Target Group's operations and mitigate the effects of fluctuations in cash flows.

The following table details the Target Group's remaining contractual maturity for its financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Target Group can be required to pay.

The table includes both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived based on management's best estimates at the end of the reporting period, taking into consideration interest rate curve, if available.

Liquidity tables

	Weighted average interest rate %	Repayable on demand or within 1 year RMB'000	2-5 years RMB'000	Total undiscounted cash flows RMB'000	Carrying amounts RMB'000
At 31 December 2022
Trade payables	N/A	193	—	193	193
Other payables and accruals	N/A	3,342	—	3,342	3,342
Bank and other borrowings — fixed rate	12.40%	5,574	4,843	10,417	9,700
Amount due to an immediate holding company	N/A	8,946	—	8,946	8,946
		18,055	4,843	22,898	22,181
At 31 December 2023
Trade payables	N/A	48	—	48	48
Other payables and accruals	N/A	3,203	—	3,203	3,203
Bank and other borrowings — fixed rate	6.45%	518	4,325	4,843	4,465
Amount due to an immediate holding company	N/A	16,439	—	16,439	16,439
		20,208	4,325	24,533	24,155
At 31 December 2024
Trade payables	N/A	83	—	83	83
Other payables and accruals	N/A	3,152	—	3,152	3,152
Bank and other borrowings — variable rate	3.95%	575	16,197	16,772	15,000
Amount due to a holding company	N/A	3,552	—	3,552	3,552
		7,362	16,197	23,559	21,787

(c) Fair value measurement of the financial instruments

The Sole Director considers that the carrying amount of financial assets and financial liabilities recorded at amortised cost in the Historical Financial Information approximate their fair values at the end of each of the Relevant Periods.

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

7. REVENUE AND SEGMENT INFORMATION

(i) Disaggregation of revenue from contracts with customers

For the Relevant Periods, all of the Target Group's revenue was arising from provision of properties management services in the PRC. All of the Target Group's revenue from provision of property management services was recognised over time.

(ii) Performance obligations for contracts with customers

The Target Group bills a fixed amount for services provided on a monthly or an annually basis and recognised as revenue in the amount to which the Target Group has right to invoice based on the value of performance completed. Advance consideration allocated to the properties management services is recognised as a contract liability and is released over the period of service. The normal credit term is 90 days upon service provided.

(iii) Transaction price allocated to the remaining performance obligation for contracts with customers

The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at the end of the Relevant Periods and the expected timing of recognising revenue are as follows:

	Properties management services
	2022	2023	2024
	RMB'000	RMB'000	RMB'000
Within one year	1,196	1,288	1,416

(iv) Operating segment

Information reported to the Sole Director, being the chief operating decision maker ("CODM"), for the purposes of resource allocation and assessment of segment performance focuses on types of goods or services delivered or provided. This is also the basis upon which the Target Group is organised and managed. The CODM has determined that the Target Group's only business of provision of properties management services as the sole operating and reportable segment throughout the reporting periods, as the Target Group and CODM manage the business as a whole and information reported to the CODM, for the purpose of resource allocation and assessment, are prepared as a whole of the sole business. No other discrete financial information was provided other than the Target Group's results and financial position as a whole.

Since this is the only operating and reportable segment of the Target Group, no further analysis thereof is presented. All the revenue of the Target Group is generated from provision of properties management services during the Relevant Periods.

Geographical information

The Target Group's operations are located in the PRC. All the Target Group's revenue from external customers during the Relevant Periods were derived from the PRC. All the non-current assets of the Target Group are located in the PRC. Accordingly, no geographical information is presented.

Information about major customers

No customer contributed over 10% of total revenue of the Target Group during the Relevant Periods.

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

8. OTHER INCOME

	Year ended 31 December
	2022	2023	2024
	RMB'000	RMB'000	RMB'000
Bank interest income	4	2	3
Other service income	126	159	104
Government grants	62	14	21
Others	—	—	9
	192	175	137

9. FINANCE COSTS

	Year ended 31 December
	2022	2023	2024
	RMB'000	RMB'000	RMB'000
Interests on other borrowings	900	720	—
Interests on bank borrowings	193	298	485
	1,093	1,018	485

10. INCOME TAX (CREDIT) EXPENSE

	Year ended 31 December
	2022	2023	2024
	RMB'000	RMB'000	RMB'000
Current tax
PRC Enterprise Income Tax	—	39	94
Deferred tax
Current year	(32)	11	21
Income tax (credit) expense	(32)	50	115

Under the Law of the PRC on Enterprise Income Tax (the "EIT Law") and Implementation Regulation of the EIT Law, the tax rate of PRC entities is 25% for the Relevant Periods.

The income tax (credit) expense for the Relevant Periods can be reconciled to the (loss) profit before tax per the consolidated statements of profit or loss and other comprehensive income as follows:

	Year ended 31 December
	2022	2023	2024
	RMB'000	RMB'000	RMB'000
(Loss) profit before tax	(1,446)	288	1,788
Tax at the domestic income tax rate of 25% (Note)	(361)	73	447
Tax effect of expenses not deductible for tax purpose	215	177	129
Tax effect of income not taxable for tax purpose	(16)	(3)	(5)
Effect of preferential tax of the Target Group	130	(197)	(456)
Income tax (credit) expense	(32)	50	115

Note: The domestic tax rate (which is the PRC EIT rate) represents the tax rate used in the jurisdiction where the operation of the Target Group is substantially based.

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

At 31 December 2022, 2023, and 2024, the Target Group had unused tax losses of RMB649,000, RMB421,000 and RMBNil respectively available for offset against future profits. Deferred tax assets have been recognised for these unused tax losses as at 31 December 2022 and 31 December 2023.

During each of the Relevant Periods, the Target Group was qualified as “Small Low-Profit Enterprise” pursuant to the relevant laws and regulation in the PRC. The Target Group can enjoy the preferential income tax treatment for the annual taxable income does not exceed RMB3,000,000 (inclusive) with the income tax rate of 20% and is eligible to the tax calculation based on 25% of taxable income amount.

11. (LOSS) PROFIT FOR THE YEAR

	Year ended 31 December
	2022 RMB'000	2023 RMB'000	2024 RMB'000
(Loss) profit for the years has been arrived at after charging (crediting):
Director's remuneration (Note 12)
Salaries and other benefits	139	139	135
Contributions to retirement benefits scheme	14	15	16
	153	154	151
Other staff costs:
Salaries and other benefits	7,539	6,818	6,131
Contributions to retirement benefits scheme	1,324	1,430	1,264
	8,863	8,248	7,395
Total staff costs (Note a)	9,016	8,402	7,546
Legal and professional fee	12	56	73
Depreciation of property, plant and equipment	78	66	56
Impairment loss recognised (reversed) on trade receivables, net	14	5	(18)
Impairment loss recognised on other receivables, net	2	—	9

Note a: Included in staff cost, RMB6,902,000, RMB6,474,000 and RMB6,095,000 are recognised in cost of sales for the years ended 31 December 2022, 2023 and 2024 respectively, RMB2,114,000, RMB1,928,000 and RMB1,451,000 are recognised in administrative and operating expenses for the years ended 31 December 2022, 31 December 2023 and 31 December 2024 respectively.

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

12. THE SOLE DIRECTOR'S EMOLUMENTS

The Sole Director's remuneration for the Relevant Periods are as follows:

	Year ended 31 December 2022			Year ended 31 December 2023			Year ended 31 December 2024
	Salaries and other benefits RMB'000	Contributions to retirement benefits scheme RMB'000	Total RMB'000	Salaries and other benefits RMB'000	Contributions to retirement benefits scheme RMB'000	Total RMB'000	Salaries and other benefits RMB'000	Contributions to retirement benefits scheme RMB'000	Total RMB'000
Executive Director: Mr. Ding Yucheng	139	14	153	139	15	154	135	16	151

Note:

Mr. Ding Yucheng was appointed as the executive director with effect from 31 May 2020.

During the Relevant Periods, no emoluments were paid by the Target Group to the Sole Director as an inducement to join or upon joining the Target Group or as compensation for loss of office.

The Sole Director's emoluments shown above were mainly for his services in connection with the management of the affairs of the Target Group. There was no arrangement under which the Sole Director waived or agreed to waive any remuneration during the Relevant Periods.

13. FIVE HIGHEST PAID EMPLOYEES

The five highest paid employees of the Target Group during the years ended 31 December 2022, 31 December 2023 and 31 December 2024 included the Sole Director, details of whose remuneration are set out in Note 12 to the Financial Information above. Details of the remuneration for the remaining 4 highest paid employees who are neither a director or a chief executive of the Target Group for the years ended 31 December 2022, 31 December 2023 and 31 December 2024, respectively, are as follows:

	Year ended 31 December
	2022	2023	2024
	RMB'000	RMB'000	RMB'000
Salaries and other benefits	407	389	385
Contributions to retirement benefits scheme	41	45	49
	448	434	434

14. DIVIDENDS

No dividend was paid or proposed for shareholders of the Target Company during the Relevant Periods, nor has any dividend been proposed since the end of the Relevant Periods.

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

15. PROPERTY, PLANT AND EQUIPMENT

	Furniture, fixtures and office equipment RMB'000	Motor vehicles RMB'000	Total RMB'000
COST
At 1 January 2022	936	302	1,238
Additions	23	—	23
At 31 December 2022	959	302	1,261
Additions	22	—	22
At 31 December 2023	981	302	1,283
Additions	52	240	292
At 31 December 2024	1,033	542	1,575
ACCUMULATED DEPRECIATION
At 1 January 2022	713	284	997
Provided for the year	76	2	78
At 31 December 2022	789	286	1,075
Provided for the year	66	—	66
At 31 December 2023	855	286	1,141
Provided for the year	56	—	56
At 31 December 2024	911	286	1,197
CARRYING VALUES
At 31 December 2022	170	16	186
At 31 December 2023	126	16	142
At 31 December 2024	122	256	378

The above items of property, plant and equipment, are depreciated on a straight-line basis at the following rates per annum:

Furniture, fixtures and office equipment 8-20%

Motor vehicles 25%

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

16. TRADE RECEIVABLES

	At 31 December
	2022	2023	2024
	RMB'000	RMB'000	RMB'000
Trade receivables — contract with customers (Note)	1,539	1,598	758
Less: Allowance for credit losses	(14)	(19)	(1)
Trade receivables, net	1,525	1,579	757

Note:
As at 1 January 2022, trade receivables from contracts with customers amounted to approximately RMB973,000.

The Target Group generally allows credit period of 90 days upon service provided to its customers.

The following is an analysis of trade receivables, net of allowance for credit losses, presented based on the date of rendering of services which approximated the respective dates on which revenue was recognised:

	At 31 December
	2022	2023	2024
	RMB'000	RMB'000	RMB'000
Within 90 days	244	238	238
91 to 180 days	192	243	105
181 to 365 days	555	450	377
1 to 2 years	530	311	24
More than 2 years	4	337	13
	1,525	1,579	757

As at 31 December 2022, 31 December 2023 and 31 December 2024, included in the Target Group's trade receivables balance are debtors with aggregate carrying amount of approximately RMB1,281,000, RMB1,341,000 and RMB519,000 respectively which are past due as at the reporting date. Out of the past due balances, RMB534,000, RMB648,000 and RMB37,000 respectively has been past due 270 days or more and are not considered as in default as counterparties have made partial settlement regularly.

Details of impairment assessment of trade receivables are set out in Note 6(b).

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

17. DEPOSITS AND OTHER RECEIVABLES

	At 31 December
	2022 RMB'000	2023 RMB'000	2024 RMB'000
Value-added tax (“VAT”) recoverables	260	267	218
Staff advance	9	14	40
Others	52	148	138
	321	429	396
Less: Allowance for credit losses	(2)	(2)	(11)
Other receivables, net	319	427	385
Deposits	52	5	13
Deposits and other receivables, net	371	432	398

Details of impairment assessment of other receivables are set out in Note 6(b).

18. CASH AND CASH EQUIVALENTS

Cash and cash equivalents include demand deposits for the purpose of meeting the Target Group’s short term cash commitments, which carry interest at market rates as follows:

	At 31 December
	2022	2023	2024
Range of interest rate per annum	0.25%–0.30%	0.20%–0.25%	0.10%–0.15%

At 31 December 2022, 2023 and 2024, cash and bank balances of the Target Group denominated in RMB and kept or deposited in banks in Mainland China amounted to RMB1,343,000, RMB4,027,000 and RMB3,172,000 respectively. The RMB is not freely convertible into other currencies. However, under Mainland China's Foreign Exchange Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the Target Group is permitted to exchange RMB for other currencies through bank authorised to conduct foreign exchange business.

Details of impairment assessment of bank balances are set out in Note 6(b).

19. TRADE PAYABLES

	At 31 December
	2022 RMB'000	2023 RMB'000	2024 RMB'000
Trade payables	193	48	83

Trade payables mainly represent payables arising from subcontracting services including cleaning and landscaping services provided by suppliers. The suppliers have not specified the credit period granted to the Target Group.

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

The following is an aged analysis of trade payables presented based on invoice date:

	At 31 December
	2022 RMB'000	2023 RMB'000	2024 RMB'000
Within 90 days	145	48	83
91 to 180 days	48	—	—
	193	48	83

20. CONTRACT LIABILITIES

	At 31 December
	2022 RMB'000	2023 RMB'000	2024 RMB'000
Current Liabilities
Provision of properties management services	1,196	1,288	1,416

As at 1 January 2022, contract liabilities amounted to approximately RMB1,316,000.

Contract liabilities, that are not expected to be settled within the Target Group's normal operating cycle, are classified as current and non-current liabilities based on the Target Group's earliest obligation to transfer services to the customers.

The following table shows how much of the revenue recognised relates to carried-forward contract liabilities and how much relates to performance obligations that were satisfied in prior periods.

	For the year ended 31 December
	2022	2023	2024
	RMB'000	RMB'000	RMB'000
Revenue recognised that was included in the contract liability balance at the beginning of the year	1,316	1,196	1,288

Payment term which impact on the amount of contract liabilities recognised is as follow:

When the Target Group receives advance payments made by customers while the underlying services are yet to be provided, this will give rise to contract liabilities upon payment received. The Target Group normally receives from a month to a year of property management service payments before the service commences.

21. OTHER PAYABLES AND ACCRUALS

	At 31 December
	2022	2023	2024
	RMB'000	RMB'000	RMB'000
Deposits received	2,739	2,770	2,415
VAT payable	358	381	415
Others	245	52	322
Other payables and accruals	3,342	3,203	3,152

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

22. BANK AND OTHER BORROWINGS

	At 31 December
	2022	2023	2024
	RMB'000	RMB'000	RMB'000
Bank borrowings — secured	4,700	4,465	15,000
Other borrowings — secured	5,000	—	—
	9,700	4,465	15,000

The carrying amounts of the above borrowings are analysed based on contractual repayment date as follow:

The carrying amounts of the above borrowings are repayable*:
Within one year	5,235	235	10
Within a period of more than one year but not exceeding two years	235	4,230	2,000
Within a period of more than two years but not exceeding five years	4,230	—	12,990
	9,700	4,465	15,000
Less: Amount due within one year shown under current liabilities	(5,235)	(235)	(10)
Amount shown under non-current liabilities	4,465	4,230	14,990

Notes:

In January 2022, the Target Group had drawn down a loan from a finance company with principal amount of RMB5,000,000 maturing by January 2023 and interest bearing at 18% per annum. The loan was repaid in full during the year ended 31 December 2023.

The borrowing had been secured by a personal guarantee provided by an independent third party and certain property, plant and equipment of a fellow subsidiary.

In April 2022, the Target Group had drawn down a secured bank loan with principal amount of RMB4,700,000 maturing by April 2025 and interest bearing at 6.45% per annum. An early settlement of RMB4,230,000 were made during the year ended 31 December 2024.

The bank borrowings had been secured by certain property, plant and equipment of a former fellow subsidiary and a corporate guarantee provided by a fellow subsidiary and personal guarantees provided by a director and an ultimate beneficial owner of a fellow subsidiary.

In April 2024, the Target Group had drawn down a bank loan with principal amount of RMB15,000,000, which is interest-bearing at a floating rate calculated and adjusted annually by 1-year Loan Prime Rate ("LPR") +0.5% per annum and maturing by April 2029.

The bank borrowings are secured by certain property, plant and equipment of a former fellow subsidiary and corporate guarantees provided by two former fellow subsidiaries.

As at 31 December 2022, 31 December 2023 and 31 December 2024, all bank and other borrowings are denominated in RMB.

Details of the relationship of former fellow subsidiaries are set out in Note 28.

II-39 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

23. AMOUNT DUE FROM/TO A HOLDING COMPANY / AN IMMEDIATE HOLDING COMPANY

The amount due from/to a holding company / an immediate holding company is unsecured, interest free and repayable on demand.

Year ended 31 December
2022	2023	2024
RMB'000	RMB'000	RMB'000

Maximum balance outstanding during the year:

Amount due from an immediate holding company	1,300	388	—
Amount due from a holding company	—	—	1,001

Details of ECL assessment of amount due from an immediate holding company/a holding company are set out in Note 6(b).

24. SHARE CAPITAL

RMB'000

Issued and fully paid:

At 1 January 2022, 31 December 2022, 31 December 2023 and 31 December 2024	1,000

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

25. NON-CONTROLLING INTERESTS

Details of the non-wholly owned subsidiary that has material non-controlling interests

The table below shows details of the non-wholly-owned subsidiary of the Target Group that has material non-controlling interests:

Name of subsidiary	Place of incorporation and principal place of business	Proportion of ownership interests and voting rights held by non-controlling interests At 31 December			(Loss) profit allocated to non-controlling interests Year ended 31 December			Accumulated non-controlling interests At 31 December
		2022	2023	2024	2022 RMB'000	2023 RMB'000	2024 RMB'000	2022 RMB'000	2023 RMB'000	2024 RMB'000
Shijiazhuang Luquan District Runhua Property Service Company Limited* (石家莊市鹿泉區潤華物業服務有限公司) (“Shijiazhuang Runhua”)	The PRC	49%	49%	49%	(243)	(1)	353	(450)	(451)	(98)
	At 31 December
---	---	---	---
	2022	2023	2024
	RMB'000	RMB'000	RMB'000
Current assets	2,169	4,092	2,474
Non-current assets	27	19	24
Current liabilities	(3,114)	(5,031)	(2,698)
Non-current liabilities	—	—	—
Equity attributable to owners of Shijiazhuang Runhua	(468)	(469)	(102)
Non-controlling interest of Shijiazhuang Runhua	(450)	(451)	(98)

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

	Year ended 31 December
	2022 RMB'000	2023 RMB'000	2024 RMB'000
Revenue	4,294	4,244	4,715
Expenses	(4,790)	(4,246)	(3,995)
(Loss) profit for the year	(496)	(2)	720
(Loss) profit and total comprehensive (expense) income attributable to owners of Shijiazhuang Runhua	(253)	(1)	367
(Loss) profit and total comprehensive (expense) income attributable to the non-controlling interests of Shijiazhuang Runhua	(243)	(1)	353
(Loss) profit and total comprehensive (expense) income for the year	(496)	(2)	720
	Year ended 31 December
	2022 RMB'000	2023 RMB'000	2024 RMB'000
Dividend paid to non-controlling interests of Shijiazhuang Runhua	—	—	—
Net cash (outflow) inflow from operating activities	(996)	(600)	1,787
Net cash inflow from investing activities	—	1	—
Net cash inflow (outflow) from financing activities	912	2,865	(3,478)
Net cash (outflow) inflow	(84)	2,266	(1,691)

For identification purpose only

26. RETIREMENT BENEFITS PLANS

The Target Group maintains various retirement schemes for its employees. The retirement scheme for employees of the Target Company and its PRC subsidiary is a mandatory central pension scheme organised by the PRC government, the assets of which are held separately from those of the Target Group. Contributions made are based on a percentage of the eligible employees' salaries and charged as expenses when the employees have rendered services entitling them to the contribution. The employer contributions vest fully once they are made.

The total expense recognised in profit or loss of approximately RMB1,338,000, RMB1,445,000 and RMB1,280,000 for the years ended 31 December 2022, 31 December 2023 and 31 December 2024, respectively, represents contributions paid and payable to these plans by the Target Group at rates specified in the rules of the plans.

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

27. RECONCILIATION OF LIABILITIES ARISING FROM FINANCIAL ACTIVITIES

The table below details changes in the Target Groups' liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Target Group's consolidated statement of cash flows as cash flows from financing activities.

	Bank and other borrowings RMB'000	Amount due to an immediate holding company RMB'000	Amount due to a holding company RMB'000	Total RMB'000
At 1 January 2022	—	18,321	—	18,321
Non-cash changes
Finance cost	1,093	—	—	1,093
Changes from cash flow
Repayment to an immediate holding company	—	(9,375)	—	(9,375)
New bank and other borrowings raised	9,700	—	—	9,700
Interest paid	(1,093)	—	—	(1,093)
	8,607	(9,375)	—	(768)
At 31 December 2022	9,700	8,946	—	18,646
Non-cash changes
Finance cost	1,018	—	—	1,018
Changes from cash flow
Advance from an immediate holding company	—	7,493	—	7,493
Interest paid	(1,018)	—	—	(1,018)
Repayment of bank and other borrowings	(5,235)	—	—	(5,235)
	(6,253)	7,493	—	1,240
At 31 December 2023	4,465	16,439	—	20,904
Non-cash changes
Finance cost	485	—	—	485
Changes from cash flow
Advance from a holding company	—	—	3,552	3,552
Repayment to an immediate holding company	—	(16,439)	—	(16,439)
New bank and other borrowings raised	15,000	—	—	15,000
Interest paid	(485)	—	—	(485)
Repayment of other borrowing	(4,465)	—	—	(4,465)
	10,050	(16,439)	3,552	2,837
At 31 December 2024	15,000	—	3,552	18,552

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

28. RELATED PARTY TRANSACTIONS

(a) Other than disclosed elsewhere in the Historical Financial Information, the Target Group had the following transactions during the Relevant Periods.

During the years ended 31 December 2022 and 31 December 2023, the Target Group's bank and other borrowings had been secured by a corporate guarantee and certain property, plant and equipment of a fellow subsidiary, 廣州市鵬達房地產開發有限公司 (“鵬達房地產”), which had been commonly controlled by 深圳市萬邦置業有限公司 (“深圳萬邦”), the immediate holding company of the Target Group and personal guarantees provided by a director and an ultimate beneficial owner of a fellow subsidiary 廣州市鵬達集團有限公司 (“鵬達集團”).

During the year ended 31 December 2024, the Target Group's bank borrowing has been secured by corporate guarantee provided by two fellow subsidiaries, 鵬達房地產 and 鵬達集團, which had been commonly controlled by 深圳萬邦 and certain property, plant and equipment of 鵬達房地產. 鵬達房地產 and 鵬達集團 ceased to be the fellow subsidiaries of the Target Group since 深圳萬邦 has sold its interest in the Target Company to the existing holding company on 11 November 2024.

Details of bank and other borrowings are set out in Note 22.

(b) Compensation of key management personnel, being the remuneration of the Sole Director during the Relevant Periods has been disclosed in Note 12 to the Historical Financial Information.

29. STATEMENT OF FINANCIAL POSITION AND RESERVES OF THE TARGET COMPANY

	At 31 December
	2022 RMB'000	2023 RMB'000	2024 RMB'000
NON-CURRENT ASSETS
Property, plant and equipment	159	123	354
Deferred tax assets	32	21	—
	191	144	354
CURRENT ASSETS
Trade receivables	209	220	312
Deposits and other receivables	96	154	135
Investments in subsidiaries	1,530	1,530	1,530
Cash and cash equivalents	1,259	1,648	2,409
	3,094	3,552	4,386
CURRENT LIABILITIES
Contract liabilities	—	294	56
Other payables and accruals	1,617	1,689	1,897
Bank and other borrowings	5,235	235	10
Amount due to a holding company	—	—	3,552
Amount due to an immediate holding company	8,946	13,964	—
Tax liabilities	—	22	20
	15,798	16,204	5,535
NET CURRENT LIABILITIES	(12,704)	(12,652)	(1,149)
TOTAL ASSETS LESS CURRENT LIABILITIES	(12,513)	(12,508)	(795)
NON-CURRENT LIABILITIES
Bank and other borrowings	4,465	4,230	14,990
NET LIABILITIES	(16,978)	(16,738)	(15,785)
CAPITAL AND RESERVES
Share capital	1,000	1,000	1,000
Reserves	(17,978)	(17,738)	(16,785)
TOTAL DEFICITS	(16,978)	(16,738)	(15,785)

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Movements in the Target Company's reserves

| | Capital reserve
RMB'000 | Accumulated losses
RMB'000 | Total
RMB'000 |
| --- | --- | --- | --- |
| At 1 January 2022 | 5,000 | (22,060) | (17,060) |
| Loss and total comprehensive expense for the year | — | (918) | (918) |
| At 31 December 2022 | 5,000 | (22,978) | (17,978) |
| Profit and total comprehensive income for the year | — | 240 | 240 |
| At 31 December 2023 | 5,000 | (22,738) | (17,738) |
| Profit and total comprehensive income for the year | — | 953 | 953 |
| At 31 December 2024 | 5,000 | (21,785) | (16,785) |

30. EVENTS AFTER REPORTING PERIOD

There is no significant event after the 31 December 2024 and up to the date of this circular.

31. SUBSEQUENT FINANCIAL STATEMENTS

No audited consolidated financial statements of the Target Group have been prepared in respect of any period subsequent to 31 December 2024 and up to the date of this report.

II-45 -

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

The following is the text of a report from Asian Alliance (HK) CPA Limited, the independent reporting accountant, in respect of the unaudited pro forma financial information of the Enlarged Group as set out in this Appendix and prepared for the sole purpose of inclusion in this circular.

久安(香港)會計師事務所有限公司
Asian Alliance (HK) CPA Limited

INDEPENDENT REPORTING ACCOUNTANT'S ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION

To the Board of Directors of Shenyang Public Utility Holdings Company Limited

We have completed our assurance engagement to report on the compilation of the unaudited pro forma financial information of Shenyang Public Utility Holdings Company Limited (the "Company") and its subsidiaries (collectively referred to as the "Group"), and Guangzhou Zhudao Property Management Company Limited* (廣州市珠島物業管理有限公司) (the "Target Company") and its subsidiary (collectively referred to as the "Target Group", together the Group are referred to as the "Enlarged Group") by the directors of the Company (the "Directors") for illustrative purposes only. The unaudited pro forma financial information consists of the unaudited pro forma consolidated statement of financial position as at 31 December 2024, the unaudited pro forma consolidated statement of profit or loss and the unaudited pro forma consolidated statement of cash flows for the year ended 31 December 2024 and related notes as set out on pages III-7 to III-16 of the circular issued by the Company dated 4 June 2025 (the "Circular") in connection with the proposed acquisition of 51% equity interest in the Target Company (the "Acquisition"). The applicable criteria on the basis of which the Directors have compiled the unaudited pro forma financial information are described on pages III-5 to III-16 of the Circular.

The unaudited pro forma financial information has been compiled by the Directors to illustrate the impact of the Acquisition on the Group's financial position as at 31 December 2024 and on the Group's financial performance and cash flows for the year ended 31 December 2024 as if the Acquisition had taken place at 31 December 2024 and 1 January 2024 respectively. As part of this process, information about the Group's financial position as at 31 December 2024, the Group's financial performance and cash flows for the year ended 31 December 2024 have been extracted by the Directors from the Group's audited consolidated financial statements for the year ended 31 December 2024 from the respective annual report of the Group, on which an audit report has been published.

Directors' Responsibility for the Unaudited Pro Forma Financial Information

The Directors are responsible for compiling the unaudited pro forma financial information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and with reference to

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

Accounting Guideline (“AG”) 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

Our Independence and Quality Management

We have complied with the independence and other ethical requirements of the “Code of Ethics for Professional Accountants” issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentially and professional behavior.

The firm applies Hong Kong Standard on Quality Management 1 (Revised) “Quality Management for Firms that Perform Audits and Reviews of Financial Statements, or Other Assurance or Related Services Engagements”, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountant’s Responsibilities

Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the unaudited pro forma financial information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the unaudited pro forma financial information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420 “Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus” issued by the HKICPA. This standard requires that the reporting accountant plans and performs procedures to obtain reasonable assurance about whether the Directors have compiled the unaudited pro forma financial information in accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the unaudited pro forma financial information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the unaudited pro forma financial information.

The purpose of the unaudited pro forma financial information included in the Circular is solely to illustrate the impact of the Acquisition on unadjusted financial information of the Group as if the Acquisition had occurred at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the Acquisition at 31 December 2024 or 1 January 2024 would have been as presented.

III-2 -

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

A reasonable assurance engagement to report on whether the unaudited pro forma financial information has been properly complied on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the Directors in the compilation of the unaudited pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the Acquisition, and to obtain sufficient appropriate evidence about whether:

The related pro forma adjustments give appropriate effect to those criteria; and
The unaudited pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information.

The procedures selected depend on the reporting accountant's judgement, having regard to the reporting accountant's understanding of the nature of the Enlarged Group, the Acquisition in respect of which the unaudited pro forma financial information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the unaudited pro forma financial information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

III-3 -

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

Opinion

In our opinion:

(a) the unaudited pro forma financial information has been properly compiled on the basis stated;

(b) such basis is consistent with the accounting policies of the Group; and

(c) the adjustments are appropriate for the purposes of the unaudited pro forma financial information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Asian Alliance (HK) CPA Limited
Certified Public Accountants (Practising)
Chung Chi Chiu
Practising Certificate Number: P06610

8/F, Catic Plaza
8 Causeway Road
Causeway Bay
Hong Kong

4 June 2025

For identification purpose only
III-4 -

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

INTRODUCTION OF THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

The following is an illustrative unaudited pro forma consolidated statement of financial position, unaudited pro forma consolidated statement of profit or loss and unaudited pro forma consolidated statement of cash flows (the "Unaudited Pro Forma Financial Information") of Shenyang Public Utility Holdings Company Limited (the "Company") and its subsidiaries (collectively referred to as the "Group") enlarged by the proposed acquisition (the "Acquisition") of 51% equity interest in Guangzhou Zhudao Property Management Company Limited* (廣州市珠島物業管理有限公司) (the "Target Company") and its subsidiary (the "Target Subsidiary") (collectively referred to as the "Target Group", together with the Group are referred to as the "Enlarged Group"), as if the Acquisition had been completed on 31 December 2024 for the unaudited pro forma consolidated statement of financial position of the Enlarged Group, and as if the Acquisition had been completed on 1 January 2024 for the unaudited pro forma consolidated statement of profit or loss and the unaudited pro forma consolidated statement of cash flows of the Enlarged Group.

The Unaudited Pro Forma Financial Information has been prepared by the directors of the Company (the "Directors") in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and with reference to Accounting Guideline ("AG") 7 "Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars" issued by the Hong Kong Institute of Certified Public Accountants, for the purpose of illustrating the effect of the Acquisition only, pursuant to the terms of the equity transfer agreement dated 28 February 2025 (the "Acquisition Agreement") entered into among the Group, Beijing Jiuzhou Technology Company Limited* (北京九周科技有限公司) (the "Vendor"), the Group agreed to conditionally acquire 51% equity interest in the Target Company held by the Vendor, based on the Directors' judgements, estimations, assumptions and currently available information. Because of its hypothetical nature, the Unaudited Pro Forma Financial Information may not give a true picture of the actual financial position, financial results and cash flows of the Enlarged Group that would have been attained had the Acquisition been completed as of the specified dates or any future date. Furthermore, the Unaudited Pro Forma Financial Information does not purport to predict the Enlarged Group's future financial position, financial results and cash flows upon the completion of the Acquisition.

The Unaudited Pro Forma Financial Information of the Enlarged Group is prepared based on (i) the audited consolidated statement of financial position of the Group as at 31 December 2024, the audited consolidated statement of profit or loss and the audited consolidated statement of cash flows of the Group for the year ended 31 December 2024 which has been extracted from the published annual report of the Group for the year ended 31 December 2024; (ii) the audited consolidated statement of financial position of the Target Group as at 31 December 2024, the audited consolidated statement of profit or loss and the audited consolidated statement of cash flows of the Target Group for the year ended 31 December 2024 which has been extracted from the accountants' report set out in Appendix II to this

III-5 -

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

circular; and (iii) after making to the pro forma adjustments that are (a) directly attributable to the Acquisition and not relating to future events or decisions; and (b) factually supportable, as described in the accompanying notes.

The Unaudited Pro Forma Financial Information should be read in conjunction with the financial information of the Group as set out in, (i) the published annual report of the Group for the year ended 31 December 2024, (ii) the accountant's report of the Target Group as set out in Appendix II to the circular and (iii) other financial information included elsewhere in this circular.

For identification purpose only
III-6 -

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION OF THE ENLARGED GROUP

	The Target Group		Pro Forma Adjustments				Enlarged Group As at 31 December 2024
	As at 31 December 2024 RMB'000 Note (1)	As at 31 December 2024 RMB'000 Note (2)	RMB'000 Note (3)(a)	RMB'000 Note (3)(b)	RMB'000 Note (5)	RMB'000 Note (6)	RMB'000
NON-CURRENT ASSETS
Property, plant and equipment	10,753	378	—	—	—	—	11,131
Right-of-use assets	17,974	—	—	—	—	—	17,974
Investment properties	409,277	—	—	—	—	—	409,277
Goodwill	—	—	—	4,269	—	—	4,269
Intangible assets	—	—	—	11,584	—	—	11,584
Equity instruments at fair value through other comprehensive income	20,413	—	—	—	—	—	20,413
Investment in subsidiaries	—	—	550	(550)	—	—	—
	458,417	378	550	15,303	—	—	474,648
CURRENT ASSETS
Properties under development for sale	61,250	—	—	—	—	—	61,250
Trade receivables	—	757	—	—	—	—	757
Deposit and other receivables	2,762	398	—	—	—	—	3,160
Amount due from a holding company	—	1,001	—	—	(1,001)	—	—
Amount due from a non-controlling interest	—	—	—	—	1,001	—	1,001
Restricted bank balances	17,922	—	—	—	—	—	17,922
Cash and cash equivalents	4,448	3,174	(550)	—	—	(1,400)	5,672
	86,382	5,330	(550)	—	—	(1,400)	89,762

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

	The Group As at 31 December 2024 RMB'000 Note (1)	The Target Group As at 31 December 2024 RMB'000 Note (2)	Pro Forma Adjustments				Enlarged Group As at 31 December 2024 RMB'000
			RMB'000 Note (3)(a)	RMB'000 Note (3)(b)	RMB'000 Note (5)	RMB'000 Note (6)
CURRENT LIABILITIES
Trade payables	149,989	83	—	—	—	—	150,072
Other payables and accruals	42,906	3,152	—	—	—	—	46,058
Contract liabilities	—	1,416	—	—	—	—	1,416
Lease liabilities — current portion	2,134	—	—	—	—	—	2,134
Bank and other borrowings	7,387	10	—	—	—	—	7,397
Amounts due to a shareholder	2,448	—	—	—	—	—	2,448
Amount due to a holding company	—	3,552	—	—	(3,552)	—	—
Amount due to a non-controlling interest	1,100	—	—	—	3,552	—	4,652
Tax liabilities	1,490	20	—	—	—	—	1,510
	207,454	8,233	—	—	—	—	215,687
NET CURRENT LIABILITIES
	(121,072)	(2,903)	(550)	—	—	(1,400)	(125,925)
TOTAL ASSETS LESS CURRENT LIABILITIES
	337,345	(2,525)	—	15,303	—	(1,400)	348,723

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

	The Group As at 31 December 2024 RMB'000 Note (1)	The Target Group As at 31 December 2024 RMB'000 Note (2)	Pro Forma Adjustments				Enlarged Group As at 31 December 2024 RMB'000
			RMB'000 Note (3)(a)	RMB'000 Note (3)(b)	RMB'000 Note (5)	RMB'000 Note (6)
NON-CURRENT LIABILITIES
Other payables and accruals	269	—	—	—	—	—	269
Lease liabilities — non-current portion	16,939	—	—	—	—	—	16,939
Bank and other borrowings	—	14,990	—	—	—	—	14,990
	17,208	14,990	—	—	—	—	32,198
NET ASSETS (LIABILITIES)	320,137	(17,515)	—	15,303	—	(1,400)	316,525
CAPITAL AND RESERVES
Share capital	1,469,376	1,000	—	(1,000)	—	—	1,469,376
Reserves	(1,124,707)	(18,417)	—	18,417	—	(1,400)	(1,126,107)
Equity attributable to owners of the Company	344,669	(17,417)	—	17,417	—	(1,400)	343,269
Non-controlling interest	(24,532)	(98)	—	(2,114)	—	—	(26,744)
TOTAL EQUITY (DEFICIT)	320,137	(17,515)	—	15,303	—	(1,400)	316,525

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF PROFIT OR LOSS OF THE ENLARGED GROUP

	The Group Year ended 31 December 2024	The Target Group Year ended 31 December 2024	Pro Forma Adjustments			Enlarged Group Year ended 31 December 2024
			RMB'000 Note (1)	RMB'000 Note (2)	RMB'000 Note (6)
Revenue
Contracts with customer	4,711	17,203	—	—	—	21,914
Leases	1,530	—	—	—	—	1,530
Total revenue	6,241	17,203	—	—	—	23,444
Cost of sales	(30,710)	(11,848)	—	—	—	(42,558)
Gross (loss) profit	(24,469)	5,355	—	—	—	(19,114)
Other income	8,876	137	—	—	—	9,013
Impairment losses under expected credit loss model, net of reversal	(12,031)	9	—	—	—	(12,022)
Impairment loss recognised in respect of deposits paid	(16,619)	—	—	—	—	(16,619)
Loss from changes in fair value of investment properties	(42,102)	—	—	—	—	(42,102)
Administrative and operating expenses	(16,789)	(3,228)	(1,400)	—	(1,159)	(22,576)
Finance costs	(1,124)	(485)	—	—	—	(1,609)
(Loss) profit before tax	(104,258)	1,788	(1,400)	—	(1,159)	(105,029)
Income tax expense	(11)	(115)	—	—	—	(126)
(Loss) profit for the year	(104,269)	1,673	(1,400)	—	(1,159)	(105,155)
(Loss) profit for the year attributable to:
— Owners of the Company	(89,243)	1,320	(1,400)	(647)	(517)	(90,487)
— Non-controlling interests	(15,026)	353	—	647	(642)	(14,668)
	(104,269)	1,673	(1,400)	—	(1,159)	(105,155)

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF CASH FLOWS OF THE ENLARGED GROUP

	The Group Year ended 31 December 2024	The Target Group Year ended 31 December 2024	Pro Forma Adjustments	Enlarged Group Year ended 31 December 2024
RMB'000 Note (1)	RMB'000 Note (2)	RMB'000 Note (3)(a)	RMB'000 Note (5)	RMB'000 Note (6)
OPERATING ACTIVITIES
(Loss) profit for the year	(104,269)	1,673	—	—
Adjustments for:
Income tax	11	115	—	—
Interest income	(10)	(3)	—	—
Gain on disposal of assets classified as held for sale	(6,900)	—	—	—
Dividends from equity investments	(1,686)	—	—	—
Depreciation of property, plant and equipment	173	56	—	—
Depreciation of right-of-use asset	1,995	—	—	—
Amortisation of intangible assets	—	—	—	—
Impairment losses recognised (reversed) on trade receivable	7,041	(18)	—	—
Impairment losses recognised on deposits and other receivables, net	4,990	9	—	—
Impairment loss recognised in respect of deposits paid	16,619	—	—	—
Write-down of properties under developments for sale	30,488	—	—	—
Loss from changes in fair value of investment properties	42,102	—	—	—
Finance costs	1,124	485	—	—

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

	The Group Year ended 31 December 2024	The Target Group Year ended 31 December 2024	Pro Forma Adjustments	Enlarged Group Year ended 31 December 2024
RMB'000 Note (1)	RMB'000 Note (2)	RMB'000 Note (3)(a)	RMB'000 Note (5)	RMB'000 Note (6)
Operating cash flows before movements in working capital	(8,322)	2,317	—	—
Increase in properties under development for sale	(24,253)	—	—	—
(Increase) decrease in trade receivables	(4,853)	840	—	—
Decrease in contract costs	4,112	—	—	—
Decrease in deposits and other receivables	15,805	25	—	—
Increase in amount due from a holding company	—	(1,001)	—	1,001
Increase in amount due from a non-controlling interest	—	—	—	(1,001)
Increase in trade payables	164	35	—	—
Increase/(decrease) in other payables and accruals	5,984	(51)	—	—
Increase in contract liabilities	—	128	—	—
Cash (used in) generated from operations	(11,363)	2,293	—	—
Income tax paid	(7)	(96)	—	—
NET CASH (USED IN) FROM OPERATING ACTIVITIES	(11,370)	2,197	—	—
INVESTING ACTIVITIES
Acquisition of subsidiaries	—	—	(550)	—
Interest received	10	3	—	—
Dividends received from equity investments	1,686	—	—	—
Proceed from disposal of assets classified as held for sale	4,700	—	—	—
Capital injection from non-controlling interests	400	—	—	—
Purchase of property, plant and equipment	(10,653)	(292)	—	—
Addition of right-of-use assets	(600)	—	—	—
Payment of partial remaining consideration for acquisition of completed properties I	(995)	—	—	—
NET CASH USED IN INVESTING ACTIVITIES	(5,452)	(289)	(550)	—

III-12 -

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

	The Group Year ended 31 December 2024	The Target Group Year ended 31 December 2024	Pro Forma Adjustments	Enlarged Group Year ended 31 December 2024
RMB'000 Note (1)	RMB'000 Note (2)	RMB'000 Note (3)(a)	RMB'000 Note (5)	RMB'000 Note (6)
FINANCING ACTIVITIES
Repayment to a shareholder	(6,860)	—	—	—
Advance from a holding company	—	3,552	—	(3,552)
Repayment to an immediate holding company	—	(16,439)	—	—
Advance from a non-controlling interest	1,100	—	—	3,552
Interest element of lease rentals paid	(952)	—	—	—
Decrease in restricted bank balances	24,585	—	—	—
Capital element of lease rentals paid	(309)	—	—	—
New bank and other borrowings raised	—	15,000	—	—
Interest paid	—	(485)	—	—
Repayment of bank and other borrowings	—	(4,465)	—	—
NET CASH FROM (USED IN) FINANCING ACTIVITIES
	17,564	(2,837)	—	—
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
	742	(929)	(550)	—
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR
	3,741	4,103	—	—
Effect of foreign exchange rates changes	(35)	—	—	—
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR, represented by bank balance and cash
	4,448	3,174	(550)	—

III-13 -

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

(1) For the purpose of the preparation of unaudited pro forma consolidated statement of financial position, unaudited pro forma consolidated statement of profit or loss and unaudited pro forma consolidated statement of cash flows, the amounts are extracted from the audited consolidated financial statements of the Group for the year ended 31 December 2024 as set out in the latest published annual report of the Group dated 27 March 2025.

(2) For the purpose of the preparation of unaudited pro forma consolidated statement of financial position, unaudited pro forma consolidated statement of profit or loss and unaudited pro forma consolidated statement of cash flows, the amounts extracted from the accountant's report on the Target Group for the year ended 31 December 2024 as set out in Appendix II to this circular.

(3) (a) The pro forma adjustment represents the recognition of the investment costs regarding the Acquisition. Pursuant to the Acquisition Agreement, the Group has conditionally agreed to acquire 51% equity interest in the Target Company at a consideration of RMB550,000.

(b) The Acquisition is accounted for as a business combination by using the acquisition method of accounting in accordance with Hong Kong Financial Reporting Standard 3 (Revised) “Business Combination” (“HKFRS 3”) issued by the HKICPA. Accordingly, the identifiable assets and liabilities of the Target Group will be accounted for in the Unaudited Pro Forma Financial Information of the Enlarged Group at fair value.

The pro forma adjustment represents:

(i) the elimination of the investment cost in the Target Company, share capital of the Target Company and pre-acquisition reserves of the Target Group;

(ii) Assets and liabilities recognised at the date of the Acquisition, based on the audited figures at 31 December 2024 as stated in the accountant's report set out in Appendix II, and the purchase price allocation (the "PPA") at 31 December 2024 performed by an independent professional valuer, Valtech Valuation Advisory Limited, are as follows:

	RMB'000
Property, plant and equipment	378
Intangible assets	11,584
Trade receivables	757
Deposit and other receivables	398
Amount due from a holding company	1,001
Cash and cash equivalents	3,174
Trade payables	(83)
Other payables and accruals	(3,152)
Contract liabilities	(1,416)
Bank and other borrowings	(15,000)
Amount due to a holding company	(3,552)
Tax liabilities	(20)

For the purpose of this Unaudited Pro Forma Financial Information of the Enlarged Group, the Directors had assessed whether there is any material fair value adjustment of the assets and liabilities being acquired based on their knowledge of the business of the Target Group as well as the PPA. Based on the currently available information and the PPA, recognition of an intangible asset, two license rights, of approximately RMB8,606,000 and RMB2,978,000, of the Target Company and the Target Subsidiary respectively.

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

Goodwill arising from the Acquisition:

	RMB'000
Consideration transferred	550
Add: Net liabilities acquired	5,931
Less: Net liabilities attributable to non-controlling interests of the Target Subsidiary	(98)
Less: Fair value adjustment attributable to non-controlling interests of the Target Subsidiary	1,459
	7,292
Less: Non-controlling interests of the Target Company	(3,573)
Goodwill	4,269

Non-controlling interest, representing 49% of equity interest in the Target Group, of approximately RMB2,212,000, recognised at the date of completion of the Acquisition, was measured by reference to the proportionate share of recognised amount of net liabilities of the Target Group.

(4) Goodwill arising from the Acquisition is tested for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable in accordance with the accounting policies of the Group and the requirements of Hong Kong Accounting Standard 36 — Impairment of Assets (“HKAS 36”). Goodwill will be allocated to the cash generating units (“CGUs”) that are expected to benefit from the synergies of the Acquisition for the purpose of impairment testing. The results of the Enlarged Group may be affected by impairment loss whenever the recoverable amount of CGUs is lower than the carrying amount.

Based on the existing business model of the Enlarged Group, the Directors have performed the necessary assessment on impairment in accordance with the requirements under HKAS 36. Property management business is the CGU for the purpose of impairment testing of the pro forma goodwill.

The Directors have conducted a review of the pro forma goodwill based on the business valuation performed by an independent valuer, Valtech Valuation Advisory Limited.

The recoverable amount of the pro forma goodwill has been determined by using business value. The business value was determined by discounting the cash flows generated from the continuing use of the CGU. Based on the impairment test of the pro forma goodwill, the Directors assessed that the recoverable amount of the CGU is determined to be higher than its carrying amount of the CGU.

The amounts of goodwill and the related impairment assessment are subject to change on the completion date due to the fair value assessment of the net assets of the Target Group, which may differ materially from the amounts disclosed above.

(5) The pro forma adjustment represents the reclassification of amount due from/to a holding company to amount due from/to a non-controlling interest, as the Vendor has been remained as the non-controlling shareholder of the Target Group upon the completion of the Acquisition.

(6) The pro forma adjustment represents the provision of acquisition related costs including legal, accountancy and other professional service charges, which are estimated to be approximately RMB1,400,000.

(7) The pro forma adjustment represents 49% share of profit attributable to the owners of the Target Group of approximately RMB1,320,000 to the non-controlling interests of the Enlarged Group for the year ended 31 December 2024 as if the Acquisition was completed on 1 January 2024.

III-15 -

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

(8) The pro forma adjustment represents the provision of amortisation of approximately RMB1,159,000 on the fair value adjustment of two intangible assets with 10 years contract period of approximately RMB11,584,000, and the share of amortisation to the non-controlling interests (49%) when the Target Group became indirectly held non-wholly-owned subsidiaries of the Company, as if the Acquisition was completed on 1 January 2024.

(9) The adjustments referred to notes (3)(a) and (6) do not have continuing financial effect on the consolidated statement of profit and loss and the consolidated statement of cash flows of the Enlarged Group.

(10) No adjustments have been made to the unaudited pro forma consolidated statement of financial position, to reflect any trading results or other transactions entered into subsequent to 31 December 2024 for the Group and for the Target Group where applicable and unaudited pro forma consolidated statement of profit or loss and unaudited pro forma consolidated statement of cash flows to reflect any trading results or other transaction entered into subsequent to 31 December 2024 for the Group and the Target Group where applicable.

III-16 -

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

Set out below are the management discussion and analysis on the Group for the three years ended 31 December 2022, 2023 and 2024.

FOR THE YEAR ENDED 31 DECEMBER 2022

Financial Review

Revenue

The revenue of the Group for the year ended 31 December 2022 amounted to RMB29,427,000 (the comparative figures for the year ended 31 December 2021: RMB47,022,000), representing a decrease of approximately 37.42% as compared with the year ended 31 December 2021. The decrease in revenue is mainly due to a decrease in the revenue generated from the construction of infrastructure and the development of properties in the PRC.

Loss Before Tax

Loss before tax of the Group for the year ended 31 December 2022 amounted to RMB75,824,000 comparing with loss before tax of RMB27,621,000 for the year ended 31 December 2021.

Business Review

Construction of Infrastructure and Development of Properties

(i) Construction of Infrastructure Business

The construction of infrastructure business is one of the principal businesses of the Group. Zhongfang Chaozhou Investment Development Company Limited* (中房潮州投資開發有限公司) (“Zhongfang Chaozhou”), a wholly-owned subsidiary of the Company, principally engages in construction of infrastructure in the PRC. Conventionally, the Group, being a contractor, will be responsible for (i) raising and financing the development cost of the construction projects; (ii) launching construction; and (iii) supervising the construction procedures and quality control. Upon completion of the construction project, the infrastructure will be repurchased by the government department or private company such that revenue can be recognised in this regard.

The settlement of the main portion of Zhongfang Chaozhou Jing Nan Industrial Park Project has not been completed during the year ended 31 December 2022 due to the parties have not reached an agreement on the review data. During the year ended 31 December 2022, the Group completed the acceptance and delivery of Xinxing Road and the transfer of the remaining communication tubes in the park, and a revenue of RMB27,959,000 was recorded by the Group from the construction of infrastructure business.

IV-1 -

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

(ii) Development of Properties

Shennongjia Da Jiu Hu Hotel Company Limited (神農架大九湖賓館有限公司), a non wholly-owned subsidiary of the Company, principally engages in development of properties, tourism and hotel services. Shennongjia Da Jiu Hu Hotel Company Limited (神農架大九湖賓館有限公司) holds the land use rights of two parcels of adjoining land, with a total site area of approximately 35,506 sq.m. located in Ping Qian Ancient Town, Da Jiu Hu, Shennongjia Forestry District, Hubei Province, PRC* (湖北省神農架林區大九湖坪阡古鎮) for commercial hotel service use.

As at 31 December 2022, the properties were under construction.

Property Investment Business

The Group's property investment business is mainly distributed in the cities such as Guangzhou, Beijing and Sanhe. The Company identifies potential properties for investment purposes from time to time to receive rental income and may enjoy potential property appreciation income in the future. The Group currently owns 125 offices located in the Zhiying Commercial Center in Liangxiang Higher Education Park, Fangshan, Beijing (the "Fangshan Project"), 11 shop units and 60 car parking spaces located in Sanhe, a shop unit in Guangzhou and a commercial property in Shunyi, Beijing which is under construction.

During the year ended 31 December 2022, certain properties of the Group have generated rental income and recorded rental income of RMB1,468,000 (for the year ended 31 December 2021: RMB947,000).

The Group has equipped a professional team in property leasing and property management for the Fangshan Project during the year ended 31 December 2022.

Liquidity, Financial Resources and Capital Structure

As at 31 December 2022, the Group's total assets amounted to RMB748,981,000 (31 December 2021: RMB883,277,000), representing a decrease of 15.20%. Non-current assets and current assets as at 31 December 2022 were RMB395,292,000 (31 December 2021: RMB428,740,000) and RMB353,689,000 (31 December 2021: RMB454,537,000) respectively.

With a prudent financial management policy and a solid financial position, the working capital of the Group is usually financed by its internally generated resources. As at 31 December 2022, the Group had net current assets of approximately RMB178,344,000 (31 December 2021: RMB224,576,000), including cash and cash equivalents of RMB6,557,000 (31 December 2021: RMB7,083,000).

As at 31 December 2022, the Group had no bank borrowings, but had other borrowings. The Group's current ratio (current assets/current liabilities) and gearing ratio (total liabilities/total assets) was 2.02 times (31 December 2021: 1.98 times) and 0.23 times (31 December 2021: 0.26 times), respectively.

IV-2 -

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

Material Acquisition and Disposal of Subsidiaries and Associates

Pre-acquisition of property in Beijing, PRC

On 15 November 2016, Beijing Shen Shang Investment & Consulting Company Limited (北京藩商投資諮詢有限公司) (“Beijing Shen Shang”), a wholly-owned subsidiary of the Company, being the subscriber, entered into the pre-acquisition agreement with Beijing Zhong Tou Chuang Zhan Property Limited (北京中投創展置業有限公司) (“Beijing Zhong Tou”), pursuant to which Beijing Zhong Tou agreed to sell and Beijing Shen Shang agreed to acquire a property at a total consideration of RMB152,800,000. The property is a commercial premise with the construction area of 2,800 sq.m., with the right to use its car parks of 5,000 sq.m. at the basement level two, being part of Phase 3 of the ancillary facility project of the Beijing International Zone Convention Centre (北京會展國際港展館) to be constructed in Beijing Shunyi District Tianzhu Airport Commercial Zone (北京市順義區天竺空港商務區) (the “Beijing Property”). Please refer to the announcement of the Company dated 15 November 2016 for details.

On 26 March 2018, Beijing Shen Shang and Beijing Zhong Tou entered into a supplemental agreement in relation to the pre-acquisition agreement to postpone the date of the acceptance and transfer of the Beijing Property to 31 December 2019. The pre-sale permit for the project has been obtained on 17 August 2018.

Significant Investments and Plans for Material Investments or Capital Assets

During the year ended 31 December 2022, save as disclosed above, the Company did not have any significant investments. There were no other plan for material investments or capital assets as at 31 December 2022.

Number of Employees, Emoluments, Training Schemes and Share Option Schemes

As at 31 December 2022, the Group employed a total of 49 employees (31 December 2021: 50). The Group has entered into employment contracts with all employees, and offered employment packages according to their positions, qualifications, experience and abilities. During the year ended 31 December 2022, the aggregate salaries and emoluments amounted to RMB6,845,000 (for the year ended 31 December 2021: RMB6,649,000). The Group also provides benefits to employees, such as contributions to endowment insurance, basic medical insurance and housing reserve in accordance with the relevant laws of the PRC. The Group has not adopted any share option scheme for any of its senior management or employees.

IV-3 -

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

Assets Secured/Pledged

As at 31 December 2022, no assets of the Group was secured or pledged (31 December 2021: Nil).

Currency Risks

Other than a subsidiary established in Hong Kong, the revenue and expenses of the Group are mainly denominated in RMB. The Group is exposed to foreign currency risk on transactions denominated in currencies other than the functional and reporting currency of the Group, which is RMB. The changes in the exchange rate of Hong Kong dollar against RMB will affect the results of the Group. An exchange gain of RMB17,000 (for the year ended 31 December 2021: gain of RMB1,193,000) was recorded in the results for the year ended 31 December 2022. The Group currently does not have hedging policy against foreign exchange risk. The management of the Company will consider hedging significant currency exposure in the future should the need arise.

Contingent Liabilities

As at 31 December 2022, the Group had no significant contingent liabilities (31 December 2021: Nil).

Capital Commitments

As at 31 December 2022, the total capital commitments of the Group amounted to RMB45,522,000 (31 December 2021: RMB59,721,000).

FOR THE YEAR ENDED 31 DECEMBER 2023

Financial Review

Revenue

The revenue of the Group for the year ended 31 December 2023 amounted to RMB1,498,000 (the comparative figures for the year ended 31 December 2022: RMB29,427,000), representing a decrease of approximately $94.91\%$ as compared with the year ended 31 December 2022. The decrease in revenue is mainly due to a decrease in the revenue generated from the construction of infrastructure and the development of properties in the PRC.

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

Loss Before Tax

Loss before tax of the Group for the year ended 31 December 2023 amounted to RMB146,593,000 comparing with loss before tax of RMB75,824,000 for the year ended 31 December 2022.

Business Review

Construction of Infrastructure and Development of Properties

(i) Construction of Infrastructure Business

The construction of infrastructure business is one of the principal businesses of the Group. Zhongfang Chaozhou, a wholly-owned subsidiary of the Company, principally engages in construction of infrastructure in the PRC. Conventionally, the Group, being a contractor, will be responsible for (i) raising and financing the development cost of the construction projects; (ii) launching construction; and (iii) supervising the construction procedures and quality control. Upon completion of the construction project, the infrastructure will be repurchased by the government department or private company such that revenue can be recognised in this regard.

The settlement of the overall construction of Zhongfang Chaozhou Jing Nan Industrial Park Project has not been completed during the year ended 31 December 2023, since a new review authority under the finance department of Chaozhou government has reviewed the assessment data issued by a third-party review agency. During the year ended 31 December 2023, no revenue was recorded by the Group from the construction of infrastructure business.

(ii) Development of Properties

As at 31 December 2023, the properties were under construction and it was expected that all construction would be completed and the renovation would begin in 2024.

IV-5 -

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

Property Investment Business

The Group's property investment business is mainly distributed in the cities such as Guangzhou, Beijing and Sanhe. The Company identifies potential properties for investment purposes from time to time to receive rental income and may enjoy potential property appreciation income in the future. The Group currently owns 125 offices located in the Zhiying Commercial Center in Liangxiang Higher Education Park, Fangshan, Beijing, 11 shop units and 60 car parking spaces located in Sanhe, a shop unit in Guangzhou and a commercial property in Shunyi, Beijing, the construction of which is completed.

During the year ended 31 December 2023, certain properties of the Group have generated rental income and recorded rental income of RMB1,498,000 (for the year ended 31 December 2022: RMB1,468,000).

The Group has equipped a professional team in property leasing and property management for the Fangshan Project during the year ended 31 December 2023.

Liquidity, Financial Resources and Capital Structure

As at 31 December 2023, the Group's total assets amounted to RMB632,689,000 (31 December 2022: RMB748,981,000), representing a decrease of 15.53%. Non-current assets and current assets as at 31 December 2023 were RMB344,283,000 (31 December 2022: RMB395,292,000) and RMB288,406,000 (31 December 2022: RMB353,689,000) respectively.

With a prudent financial management policy and a solid financial position, the working capital of the Group is usually financed by its internally generated resources. As at 31 December 2023, the Group had net current assets of approximately RMB79,002,000 (31 December 2022: RMB178,344,000), including cash and cash equivalents of RMB3,741,000 (31 December 2022: RMB6,557,000).

As at 31 December 2023, the Group had no bank borrowings, but had other borrowings of RMB7,215,000 (31 December 2022: RMB5,415,000). The Group's current ratio (current assets/ current liabilities) and gearing ratio (total liabilities/total assets) was 1.38 times (31 December 2022: 2.02 times) and 0.33 times (31 December 2022: 0.23 times), respectively.

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

Material Acquisition and Disposal of Subsidiaries and Associates

Pre-acquisition of property in Beijing, PRC

On 15 November 2016, Beijing Shen Shang, a wholly-owned subsidiary of the Company, being the subscriber, entered into the pre-acquisition agreement with Beijing Zhong Tou, pursuant to which Beijing Zhong Tou agreed to sell and Beijing Shen Shang agreed to acquire a property at a total consideration of RMB152,800,000. The property is a commercial premise with the construction area of 2,800 sq.m., with the right to use its car parks of 5,000 sq.m. at the basement level two, being part of Phase 3 of the ancillary facility project of the Beijing International Zone Convention Centre (北京會展國際港展館) to be constructed in Beijing Shunyi District Tianzhu Airport Commercial Zone (北京市順義區天竺空港商務區). Please refer to the announcement of the Company dated 15 November 2016 for details.

On 20 May 2020, Beijing Shen Shang and Beijing Zhong Tou entered into a supplemental agreement to further postpone the date of the completion of construction and delivery of the Beijing Property to 30 June 2021 due to the outbreak of the Covid-19 pandemic, and Beijing Shen Shang agreed to waive the penalty of Beijing Zhong Tou for the delay of the completion of construction. On 20 March 2022, Beijing Shen Shang received a further notice of extension of completion from Beijing Zhong Tou, stating that due to the impact of an important event and the Covid-19 pandemic, the completion date of the Beijing Property was expected to be extended to 31 December 2022. On 6 March 2023, Beijing Shen Shang received a third notice of completion delay from Beijing Zhong Tou. In 2022, due to the impact of the Covid-19 pandemic and the major meetings of the 20th National Congress, the construction progress of the Beijing Property was slowed down, and the completion date was expected to be delayed to 31 December 2023.

Disposal of 0.19% of the Total Issued Share Capital of Chaozhou Rural Commercial Bank ("Chaozhou Rural Sale Shares")

On 14 June 2023, Zhongfang Chaozhou, a wholly-owned subsidiary of the Company, entered into the share transfer agreements with an independent third party, (the "Chaozhou Rural Purchaser"), pursuant to which Zhongfang Chaozhou agreed to sell, and the Chaozhou Rural Purchaser has agreed to purchase, 5,000,000 shares of Chaozhou Rural Commercial Bank for a consideration of RMB12,000,000. The Chaozhou Rural Sale Shares represent approximately 0.19% of the total issued share capital of Chaozhou Rural Commercial Bank as at the date of the share transfer agreements.

IV-7 -

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

Upon further negotiation between Zhongfang Chaozhou and the Chaozhou Rural Purchaser (collectively, the “Disposal Parties”), on 14 December 2023, the Disposal Parties entered into a second supplemental agreement to the share transfer agreements, pursuant to which:

(1) the Disposal Parties agreed to extend the deadline for the completion to 31 March 2024. The Chaozhou Rural Purchaser shall pay liquidated damages for the late payment in accordance with the share transfer agreements. The liquidated damages shall be calculated from 25 October 2023 until the payment is made; and

(2) Zhongfang Chaozhou shall have the right to terminate the share transfer agreements if the Chaozhou Rural Purchaser fails to pay the remaining amount of RMB4,700,000 and the corresponding liquidated damages in accordance with the share transfer agreements before 31 March 2024.

The disposal was completed on 22 March 2024.

Please refer to the announcements of the Company dated 14 June 2023 and 14 December 2023 for details.

Significant Investments and Plans for Material Investments or Capital Assets

During the year ended 31 December 2023, save as disclosed above, the Company did not have any significant investments. There were no other plan for material investments or capital assets as at 31 December 2023.

Number of Employees, Emoluments, Training Schemes and Share Option Schemes

As at 31 December 2023, the Group employed a total of 48 employees (31 December 2022: 49). The Group has entered into employment contracts with all employees, and offered employment packages according to their positions, qualifications, experience and abilities. During the year ended 31 December 2023, the aggregate salaries and emoluments amounted to RMB6,167,000 (for the year ended 31 December 2022: RMB6,845,000). The Group also provides benefits to employees, such as contributions to endowment insurance, basic medical insurance and housing reserve in accordance with the relevant laws of the PRC. The Group has not adopted any share option scheme for any of its senior management or employees.

Assets Secured/Pledged

As at 31 December 2023, no assets of the Group was secured or pledged (31 December 2022: Nil).

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

Currency Risks

Other than a subsidiary established in Hong Kong, the revenue and expenses of the Group are mainly denominated in RMB. The Group is exposed to foreign currency risk on transactions denominated in currencies other than the functional and reporting currency of the Group, which is RMB. The changes in the exchange rate of Hong Kong dollar against RMB will affect the results of the Group. An exchange gain of RMB3,000 was recorded in the results for the year ended 31 December 2023 (for the year ended 31 December 2022: gain of RMB17,000). The Group currently does not have a hedging policy against foreign exchange risk. The management of the Company will consider hedging significant currency exposure in the future should the need arise.

Contingent Liabilities

As at 31 December 2023, the Group had no significant contingent liabilities (31 December 2022: Nil).

Capital Commitments

As at 31 December 2023, the total capital commitments of the Group amounted to RMB62,163,000 (31 December 2022: RMB45,522,000).

FOR THE YEAR ENDED 31 DECEMBER 2024

Financial Review

Revenue

The revenue of the Group for the year ended 31 December 2024 amounted to RMB6,241,000 (the comparative figures for the year ended 31 December 2023: RMB1,498,000), representing an increase of approximately $316.62\%$ as compared with the year ended 31 December 2023. The increase in revenue is mainly due to an increase in the revenue generated from the construction of infrastructure and development of properties in the PRC.

Loss Before Tax

Loss before tax of the Group for the year ended 31 December 2024 amounted to RMB104,258,000 comparing with loss before tax of RMB146,593,000 for the year ended 31 December 2023.

IV-9 -

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

Business Review

Construction of Infrastructure and Development of Properties

(i) Construction of Infrastructure Business

(ii) Development of Properties

The Shennongjia Hotel, a property development project of the Company, is a large-scale integrated tourism resort and business leisure project built in the Shennongjia scenic area. It includes hotel, courtyard houses, an entertainment centre, and commercial facilities. The project consists of a main building, an annex building, ten courtyard houses, a sports club, and a commercial street. The total floor area of this project exceeds 50,000 square meters and comprises over 500 hotel rooms. As at 29 April 2025, being the date of publication of the annual report of the Company for the year ended 31 December 2024, the construction of the main building, the annex building and the courtyard houses have been basically completed. Initially, the hotel's design has been finalised, and renovation work has also started. The Company's hotel project team also considered managing and operating the hotel internally, led by its experienced senior management, while outsourcing the food and beverage operations to experienced management company to enhance service quality and cost efficiency.

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

As at 29 April 2025, being the date of publication of the annual report of the Company for the year ended 31 December 2024, two hotel management companies have been shortlisted. The Company is evaluating how to balance these operational requirements with adequate financial resources and market positioning. Further cost assessments, budget planning, and market research are ongoing, within current construction budget, to determine the most viable strategy. While the hotel was initially scheduled to open in the second half of 2025, due to the aforementioned, the opening is expected to be postponed to 2026. The Company remains committed to ensuring that the final operational structure aligns with its long-term strategic objectives while maintaining service excellence and cost efficiency.

Property Investment and Leasing Business

During the year ended 31 December 2024, the property investment and leasing business of the Group recorded a rental income of RMB1,530,000 (for the year ended 31 December 2023: RMB1,498,000).

The Group has equipped a professional team in property leasing and property management.

Liquidity, Financial Resources and Capital Structure

As at 31 December 2024, the Group's total assets amounted to RMB544,799,000 (31 December 2023: RMB632,689,000), representing a decrease of 13.89%. Non-current assets and current assets as at 31 December 2024 were RMB458,417,000 (31 December 2023: RMB344,283,000) and RMB86,382,000 (31 December 2023: RMB288,406,000), respectively.

With a prudent financial management policy and a solid financial position, the working capital of the Group is usually financed by its internally generated resources. As at 31 December 2024, the Group had net current liabilities of approximately RMB121,072,000 (31 December 2023: net current assets of approximately RMB79,002,000), including cash and cash equivalents of RMB4,448,000 (31 December 2023: RMB3,741,000).

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

As at 31 December 2024, the Group had no bank borrowings, but had other borrowings of RMB7,387,000 (31 December 2023: RMB7,215,000). The Group's current ratio (current assets/ current liabilities) and gearing ratio (total liabilities/total assets) was 0.42 times (31 December 2023: 1.38 times) and 0.41 times (31 December 2023: 0.33 times), respectively.

Material Acquisition and Disposal of Subsidiaries and Associates

Pre-acquisition of property in Beijing, PRC

On 15 November 2016, Beijing Shen Shang, a wholly-owned subsidiary of the Company, being the subscriber, entered into a pre-acquisition agreement with Beijing Zhong Tou, pursuant to which Beijing Zhong Tou agreed to sell and Beijing Shen Shang agreed to acquire a property at a total consideration of RMB152,800,000. The property is a commercial premise with the construction area of 2,800 sq.m., with the right to use its car parks of 5,000 sq.m. at the basement level two, being part of Phase 3 of the ancillary facility project of Beijing International Zone Convention Center (北京會展國際港展館) to be constructed in Beijing Shunyi District Tianzhu Airport Commercial Zone (北京市順義區天竺空港商務區). Please refer to the announcement of the Company dated 15 November 2016 for details.

As at 30 December 2024, the acquisition of Beijing Property was completed and the Company has completed the related procedures.

IV-12 -

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

Disposal of 0.19% of the Total Issued Share Capital of Chaozhou Rural Commercial Bank ("Chaozhou Rural Sale Shares")

On 14 June 2023, Zhongfang Chaozhou, a wholly-owned subsidiary of the Company, entered into the share transfer agreements with the Chaozhou Rural Purchaser, pursuant to which Zhongfang Chaozhou agreed to sell, and the Chaozhou Rural Purchaser agreed to purchase, 5,000,000 shares of Chaozhou Rural Commercial Bank for a consideration of RMB12,000,000. The Chaozhou Rural Sale Shares represent approximately 0.19% of the total issued share capital of Chaozhou Rural Commercial Bank as at the date of the share transfer agreements.

On 14 December 2023, Zhongfang Chaozhou and the Chaozhou Rural Purchaser entered into a second supplemental agreement which both parties agreed to extend the completion deadline to 31 March 2024.

Please refer to the announcements of the Company dated 14 June 2023 and 14 December 2023 for details.

The disposal was completed on 22 March 2024 and gain on disposal of assets classified as held for sale of approximately RMB6,900,000 was recognised during the first half of 2024.

Significant Investments and Plans for Material Investments or Capital Assets

During the year ended 31 December 2024, save as disclosed above, the Company did not have any significant investments. There were no other plan for material investments or capital assets as at 31 December 2024.

Number of Employees, Emoluments, Training Schemes and Share Option Schemes

As at 31 December 2024, the Group employed a total of 35 employees (31 December 2023: 48). The Group has entered into employment contracts with all employees, and offered employment packages according to their positions, qualifications, experience and abilities. During the year ended 31 December 2024, the aggregate salaries and emoluments amounted to RMB5,882,000 (for the year ended 31 December 2023: RMB6,167,000). The Group also provides benefits to employees, such as contributions to endowment insurance, basic medical insurance and housing reserve in accordance with the relevant laws of the PRC. The Group has not adopted any share option scheme for any of its senior management or employees.

Assets Secured/Pledged

As at 31 December 2024, no asset of the Group was secured or pledged (31 December 2023: Nil).

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

Currency Risks

Other than a subsidiary established in Hong Kong, the revenue and expenses of the Group are mainly denominated in RMB. The Group is exposed to foreign currency risk on transactions denominated in currencies other than the functional and reporting currency of the Group, which is RMB. The changes in the exchange rate of Hong Kong dollar against RMB will affect the results of the Group. An exchange loss of RMB7,000 was recorded in the results for the year ended 31 December 2024 (for the year ended 31 December 2023: gain of RMB3,000). The Group currently does not have a hedging policy against foreign exchange risk. The management of the Company will consider hedging significant currency exposure in the future should the need arise.

Contingent Liabilities

As at 31 December 2024, the Group had no significant contingent liabilities (31 December 2023: Nil).

Capital Commitments

As at 31 December 2024, the total capital commitments of the Group amounted to RMB117,689,000 (31 December 2023: RMB62,163,000).

IV-14 -

APPENDIX V

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Set out below are the management discussion and analysis on the Target Group for the three years ended 31 December 2022, 2023 and 2024. The following financial information is based on accountant’s report of the Target Group set out in the Appendix II to this circular.

BUSINESS REVIEW

The Target Group primarily focuses on the residential property market and provides a range of property management services to property owners and residents, including property and facilities maintenance, security services, maintenance and cleaning services, landscaping services, household waste removal and other property management related services.

As at 31 December 2022, 2023 and 2024, the Target Group was engaged in providing property management services to a large-scale community, namely Zhudao Garden (珠島花園) in Guangzhou, the PRC and a high-end villa district, namely Xishan Yuyuan (西山禦園) in Shijiazhuang, the PRC.

FINANCIAL REVIEW

Revenue

For the year ended 31 December 2022, the Target Group recorded revenue of RMB17,019,000. The revenue was mainly derived from property management services in Zhudao Garden (珠島花園) and Xishan Yuyuan (西山禦園).

For the years ended 31 December 2023 and 2024, the Target Group recorded revenue of RMB17,320,000 and RMB17,203,000, which remained at a similar level, with a slight increase of RMB301,000 or 1.77% and a slight decrease of RMB117,000 or 0.68% compared to that for the year ended 31 December 2022 and 2023 respectively.

Gross Profit

For the years ended 31 December 2022, 2023 and 2024, the Target Group recorded gross profit of RMB4,135,000, RMB5,230,000 and RMB5,355,000 respectively, representing approximately 24.30%, 30.20% and 31.13% of the revenue in the corresponding year respectively.

Administrative and Operating Expenses

For the years ended 31 December 2022, 2023 and 2024, the Target Group recorded administrative and operating expenses of RMB4,680,000, RMB4,099,000 and RMB3,219,000 respectively, which mainly comprised salary related expenses.

V-1 -

APPENDIX V

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Finance Costs

For the years ended 31 December 2022, 2023 and 2024, the Target Group recorded finance costs of RMB1,093,000, RMB1,018,000 and RMB485,000 respectively, which mainly comprised interest expenses on bank borrowings.

(Loss) Profit and Total Comprehensive (Expense) Income for the Year

For the year ended 31 December 2022, the Target Group recorded loss and total comprehensive income after tax of RMB1,414,000. For the years ended 31 December 2023 and 2024, the Target Group recorded profit and total comprehensive income after tax of RMB238,000 and RMB1,673,000 respectively. The Target Group's turnaround from a loss to a profit followed by a further improvement in profitability, was mainly due to the effective control and reduction of cost of sales and administrative and operating expenses during these periods.

Liquidity, Financial Resources and Capital Structure

The Target Group primarily financed its operation by internally generated operating cash flow, borrowings from banks and a finance company, and amount due to a holding company or an immediate holding company. As at 31 December 2022, 31 December 2023 and 31 December 2024, the Target Group had net current liabilities of RMB15,179,000, RMB15,121,000 and RMB2,903,000, including cash and cash equivalents of RMB1,449,000, RMB4,103,000 and RMB3,174,000 respectively.

As at 31 December 2022, the Target Group had bank and other borrowings at fixed rate of RMB9,700,000 and amount due to an immediate holding company of RMB8,946,000. The Target Group's gearing ratio (total liabilities/total assets) was 5.92 times.

As at 31 December 2023, the Target Group had bank and other borrowings at fixed rate of RMB4,465,000 and amount due to an immediate holding company of RMB16,439,000. The Target Group's gearing ratio (total liabilities/total assets) was 4.06 times.

As at 31 December 2024, the Target Group had bank and other borrowings at variable rate of RMB15,000,000 and amount due to a holding company of RMB3,552,000. The Target Group's gearing ratio (total liabilities/total assets) was 4.07 times.

Material Acquisition and Disposal of Subsidiaries and Associates

During each year ended 31 December 2022, 2023 and 2024, the Target Group did not engage in any material acquisition or disposal of subsidiaries or associates.

V-2 -

APPENDIX V

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP

Significant Investments

As at 31 December 2022, 2023 and 2024, the Target Group did not have any significant investments.

Employees and Remuneration Policies

As at 31 December 2022, 2023 and 2024, the Target Group employed a total of 148, 141 and 122 employees respectively. The salary paid to the employees by the Target Group was determined according to their positions, qualifications, experience and abilities. The Target Group also provides benefits to employees, such as contributions to endowment insurance and basic medical insurance in accordance with the relevant laws of the PRC.

Assets Secured/Pledged

As at 31 December 2022, 2023 and 2024, no assets of the Target Group was secured or pledged.

Currency Risks

The revenue and expenses of the Target Group are mainly denominated in RMB. The Target Group may expose to foreign currency risk on transactions denominated in currencies other than the functional and reporting currency of the Target Group. The Target Group currently does not have a hedging policy against foreign exchange risk. The management of the Target Group will consider hedging significant currency exposure in the future should the need arise.

Contingent Liabilities

As at 31 December 2022, 2023 and 2024, the Target Group had no material contingent liabilities.

Capital Commitments

As at 31 December 2022, 2023 and 2024, the Target Group had no capital commitments.

Future Plans for Material Investments or Capital Assets

The Target Group did not have any plan for material investments or capital assets for the years ended 31 December 2022, 2023 and 2024.

APPENDIX VI

GENERAL INFORMATION

1. 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 Group. 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.

2. DISCLOSURE OF INTERESTS

(i) Directors', chief executives' and supervisors' interests and short positions in the Shares, underlying Shares and debentures of the Company or any of its associated corporations

As at the Latest Practicable Date, none of the Directors, chief executives and supervisors of the Company (the "Supervisor(s)") had interests or short positions in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO); or (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules to be notified to the Company and the Stock Exchange.

APPENDIX VI

GENERAL INFORMATION

(ii) Substantial Shareholders’ and other persons’ interests and short positions in the Shares and underlying Shares

As at the Latest Practicable Date, so far as is known to the Directors, chief executives and Supervisors, the following corporations and individuals, other than the Directors or chief executives or Supervisors, had interests and/or short positions in the Shares and underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company pursuant to section 336 of the SFO:

Interest owners	Shares	Approximate percentage of the total issued share capital (Note 5)
Beijing Hua Xia Ding Technology Company Limited* 北京華夏鼎科技有限公司	420,000,000
Domestic Shares	28.58%
Huang Guang Fu (Note 1)	420,000,000
Domestic Shares	28.58%
Beijing Lichuang Future Technology Company Limited* 北京力創未來科技有限公司	180,000,000
Domestic Shares	12.25%
Zhai Ming Yue (Note 2)	180,000,000
Domestic Shares	12.25%
Shenzhen Wan Zhong Run Long Investment Company Limited (now known as Shenzhen Wan Zhong Run Long Construction Material Co. Ltd) 深圳市萬眾潤隆投資有限公司 (現稱深圳市萬眾潤隆建材有限公司)	140,000,000
Domestic Shares	9.53%
Zhang Song (Note 3)	140,000,000
Domestic Shares	9.53%
HKSCC Nominees Limited (Note 4)	599,477,515
H Shares	40.80%

– VI-2 –

APPENDIX VI

GENERAL INFORMATION

Notes:

Huang Guang Fu is a PRC resident who holds 100% equity interests in Beijing Hua Xia Ding Technology Company Limited (北京華夏鼎科技有限公司). Pursuant to section 316 of the SFO, Huang Guang Fu is also deemed to be interested in the underlying Shares held by Beijing Hua Xia Ding Technology Company Limited (北京華夏鼎科技有限公司).
Zhai Ming Yue is a PRC resident who holds 100% equity interests in Beijing Lichuang Future Technology Company Limited (北京力創未來科技有限公司). Pursuant to section 316 of the SFO, Zhai Ming Yue is also deemed to be interested in the underlying Shares held by Beijing Lichuang Future Technology Company Limited (北京力創未來科技有限公司).
Zhang Song is a PRC resident who holds 100% equity interests in Shenzhen Wan Zhong Run Long Investment Company Limited (深圳萬眾潤隆投資有限公司). Pursuant to section 316 of the SFO, Zhang Song is deemed to be interested in the underlying Shares held by Shenzhen Wan Zhong Run Long Investment Company Limited (深圳萬眾潤隆投資有限公司).
As notified by HKSCC Nominees Limited, as at the Latest Practicable Date, the following participants of CCASS had interests amounting to 5.00% or more of the total issued H Shares as shown in the securities accounts in CCASS:

(i) Bank of China (Hong Kong) Limited as nominee holds 78,310,000 H Shares, representing approximately 12.93% of the issued H Shares.

(ii) The Hongkong and Shanghai Banking Corporation Limited as nominee holds 71,550,740 H Shares, representing approximately 11.81% of the issued H Shares.

(iii) Ever-long Securities Company Limited as nominee holds 32,064,000 H Shares, representing approximately 5.29% of the issued H Shares.

The approximate percentages of the total issued share capital in this table were calculated based on the number of issued share capital of the Company as at the Latest Practicable Date, being 1,469,376,000 Shares.

Save as disclosed above, as at the Latest Practicable Date, the Company has not been notified of any interests and/or short positions in the Shares and underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company pursuant to section 336 of SFO.

VI-3 -

APPENDIX VI

GENERAL INFORMATION

3. DIRECTORS' AND SUPERVISORS' INTERESTS IN ASSETS OR CONTRACTS OR ARRANGEMENT

As at the Latest Practicable Date:

(a) none of the Directors or Supervisors had entered, or proposed to enter into a service contract with any member of the Group which is not determinable by the Group within one year without payment of compensation, other than statutory compensation;

(b) none of the Directors or Supervisors had any interest, direct or indirect, in any assets which had been, since 31 December 2024, being the date to which the latest published audited consolidated accounts of the Group were made up, acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group; and

(c) none of the Directors or Supervisors nor any of their respective associates was materially interested in any contract or arrangement entered into by any member of the Group which was subsisting as at the Latest Practicable Date and was significant in relation to the business of the Group.

4. DIRECTORS' INTEREST IN COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors nor any of their respective close associate(s) had any interests in any business that competes or is likely to compete, either directly or indirectly, with the business of the Group pursuant to the Listing Rules.

5. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business) had been entered into by members of the Group within the two years immediately preceding the Latest Practicable Date and are or may be material:

(i) the share transfer agreement dated 14 June 2023 (the “2023 Share Transfer Agreement”) entered into between Zhongfang Chaozhou, a wholly-owned subsidiary of the Company, and Ms. Chen Xi Ci* (陳喜慈女士) (“Ms. Chen”), pursuant to which Zhongfang Chaozhou agreed to sell, and Ms. Chen agreed to purchase, 5,000,000 shares of Chaozhou Rural Commercial Bank for a consideration of RMB12,000,000 (the “Share Disposal”);

VI-4 -

APPENDIX VI

GENERAL INFORMATION

(ii) the second supplemental agreement to the 2023 Share Transfer Agreement dated 14 December 2023 entered into between Zhongfang Chaozhou and Ms. Chen in relation to the extension of the deadline for the completion of the Share Disposal; and
(iii) the Equity Transfer Agreement.

6. LITIGATION

In May 2024, two subcontractors (the "Plaintiffs") filed litigations to the Xiangqiao District People's Court of Chaozhou City against the Company, Zhongfang Chaozhou, a wholly-owned subsidiary of the Company, and Jiangsu Provincial Construction Holding Limited, the main contractor (as the independent third party), for outstanding liabilities of RMB5,261,000 and RMB3,019,000, respectively. The Plaintiffs applied court orders to freeze Zhongfang Chaozhou's bank balances of approximately RMB5,261,000 and RMB3,019,000, respectively under the restricted bank balances. In May 2024, the court orders were granted and the aforesaid bank balances would be frozen for one year.

In November 2024, the litigations were judged to repay the outstanding liabilities of the principal payment and the relevant interests accrued of approximately RMB4,626,000 and RMB3,076,000, respectively.

In December 2024, Zhongfang Chaozhou filed the appeals.

In March 2025, the litigations were mediated so that Zhongfang Chaozhou had to repay the outstanding liabilities of approximately RMB4,350,000 and RMB2,950,000, respectively, instead of repaying approximately RMB4,626,000 and RMB3,076,000, respectively, and the aforesaid frozen bank balances would be released. As at the Latest Practicable Date, the outstanding payables of RMB4,350,000 and RMB2,950,000 had been settled in full.

Save as disclosed above, as at the Latest Practicable Date, no member of the Group was or is engaged in any litigation, arbitration or claim of material importance and no litigation, arbitration or claim of material importance was or is known to the Directors to be pending or threatened by or against any member of the Group.

7. EXPERT'S QUALIFICATION AND CONSENT

The following is the qualification of the expert who has given its opinion or advice which is contained in this circular:

Name	Qualification
Asian Alliance (HK) CPA Limited	Certified Public Accountants

As at the Last Practicable Date, Asian Alliance (HK) CPA Limited has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and/or references to its name in the form and context in which it appears.

APPENDIX VI

GENERAL INFORMATION

As at the Latest Practicable Date, Asian Alliance (HK) CPA Limited did not have any direct or indirect interest in any asset which had been acquired, or disposed of by, or leased to any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group since 31 December 2024, being the date to which the latest published audited consolidated financial statements of the Group was made up; and was not beneficially interested in the share capital of any member of the Group and did not have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

8. GENERAL

(a) The registered office of the Company is located at No. 1-4, 20A, Central Street, Shenyang Economic and Technological Development Zone, PRC.

(b) The principal places of business of the Company in the PRC and in Hong Kong are located at Room 517, Building E03, Shenyang International Software Park, No. 861-3 Shangshengou Village, Hunnan District, Shenyang, PRC and Room 2507, 25/F., Tower 1, Lippo Centre, 89 Queensway, Hong Kong, respectively.

(c) The H Share registrar and the transfer office of the Company is Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong.

(d) The joint company secretaries of the Company are Ms. Qian Fang Fang and Mr. Chung Man Wai, Stephen. Ms. Qian Fang graduated from Northwest University majoring in accounting with a bachelor's degree in management in 2006, and was conferred a master's degree in management in 2008. Mr. Chung Man Wai, Stephen holds a bachelor's degree of science in applied accountancy from Oxford Brookes University in United Kingdom. He is a member of Hong Kong Institute of Certified Public Accountants and has extensive experience as a professional in the fields of accounting, auditing and company secretarial matters.

(e) In case of inconsistency, the English text of this circular shall prevail over the Chinese text.

VI-6 -

APPENDIX VI

GENERAL INFORMATION

9. DOCUMENTS ON DISPLAY

Copies of the following documents are on display and are published on the website of the Stock Exchange at www.hkexnews.hk and the website of the Company at www.shenyang747.com for a period of 14 days from the date of this circular:

(a) the annual reports of the Company for the years ended 31 December 2022, 2023 and 2024;

(b) the accountants' report of the Target Group prepared by Asian Alliance (HK) CPA Limited, the text of which is set out in Appendix II to this circular;

(c) the report of the unaudited pro forma financial information of the Enlarged Group prepared by Asian Alliance (HK) CPA Limited, the text of which is set out in Appendix III to this circular;

(d) the material contracts referred to in the paragraph headed “MATERIAL CONTRACTS” in this Appendix;

(e) the written consent from the expert referred to in the paragraph headed “EXPERT’S QUALIFICATION AND CONSENT” in this Appendix; and

(f) this circular.

For identification purposes only
VI-7 -

NOTICE OF AGM FOR 2024

瀋陽公用發展股份有限公司

Shenyang Public Utility Holdings Company Limited

(a joint stock limited company incorporated in the People's Republic of China)

(Stock code: 747)

NOTICE OF ANNUAL GENERAL MEETING FOR 2024

NOTICE IS HEREBY GIVEN that the annual general meeting for 2024 (the “AGM”) of Shenyang Public Utility Holdings Company Limited (the “Company”) will be held at 4809, Jinzhonghuan Main Business Building, No. 3037 Jintian Road, Futian, Shenzhen, PRC at 10:00 a.m. on Monday, 30 June 2025 for the following purposes:

I. BY ORDINARY RESOLUTIONS:

To consider and approve the report of the board (the “Board”) of directors (the “Director(s)”) of the Company for the year ended 31 December 2024;
To consider and approve the report of the supervisory committee of the Company for the year ended 31 December 2024;
To consider and approve the audited consolidated financial statements of the Company for the year ended 31 December 2024;
To consider and approve the report of the auditor of the Company for the year ended 31 December 2024;
To consider and approve the profit allocation and dividend distribution proposals of the Company for the year ended 31 December 2024;
To consider and approve the re-appointment of Asian Alliance (HK) CPA Limited as the auditor of the Company, and to authorise the Board to fix its remuneration; and

7. “THAT

(a) the equity transfer agreement dated 28 February 2025 (the “Equity Transfer Agreement”, a copy of which has been produced to the AGM marked “A” and signed by the chairman of the AGM for the purpose of identification) entered into between Shenzhen Wanzi Hotel Apartment Management Company Limited (深圳市萬紫酒店公寓管理有限公司), an indirect wholly-owned subsidiary of the Company as the purchaser and Beijing Jiuzhou Technology Company Limited (北京九周科技有限公司) as the vendor, in relation to, among others, the acquisition of 51% equity interest in Guangzhou Zhudao

AGM-1 -

NOTICE OF AGM FOR 2024

Property Management Company Limited* (廣州市珠島物業管理有限公司), at the consideration of RMB550,000 and the transactions contemplated thereunder, be and are hereby approved, ratified and confirmed; and

(b) any one or more Director(s) be and is/are hereby authorised to do all such acts and things, to sign and execute such documents or agreements on behalf of the Company and to take all such actions as he/she/they consider(s) necessary, appropriate, desirable and expedient for the purposes of giving effect to or in connection with the Equity Transfer Agreement and the transactions contemplated thereunder, and to agree to such variation, amendments or waiver or matters relating thereto (including any variation, amendments or waiver of such documents or any terms thereof, which are not fundamentally different from those as provided in the Equity Transfer Agreement) as are, in the opinion of such Director(s), in the interests of the Company and its shareholders as a whole."

II. BY SPECIAL RESOLUTION:

To consider and approve the grant to the Board a general and unconditional mandate to allot, issue and deal with new domestic shares (“Domestic Share(s)”) and overseas listed foreign shares (“H Share(s)”) of the Company (the “Share(s)”) independently or concurrently, according to the market conditions and the needs of the Company:

“THAT

(a) Subject to paragraphs (c) and (d) below and pursuant to the Company Law of the PRC (the “Company Law”) and the relevant regulatory stipulations (as amended from time to time) of the Rules Governing the Listing of Securities (the “Listing Rules”) on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”), the Board be granted a general and unconditional mandate to exercise the powers of the Company to allot, issue and deal with new Shares during the Relevant Period (as hereinafter defined) and to determine the terms and conditions for the allotment and issue of new Shares which include, without limitation, the following terms:

(i) class and number of new Shares to be issued;

(ii) price determination method of new Shares and/or issue price (including price range);

(iii) the starting and closing dates for the issue of new Shares;

AGM-2 -

NOTICE OF AGM FOR 2024

(iv) class and number of the new Shares to be issued to existing shareholders of the Company; and

(v) the making or granting of offers, agreements and options which might require the exercise of such powers.

(b) The approval in paragraph (a) shall authorise the Board during the Relevant Period (as hereinafter defined) to make or grant offers, agreements and options which would or might require the exercise of such powers after the end of the Relevant Period (as hereinafter defined).

(c) The aggregate number of the new Domestic Shares and new H Shares allotted, issued and dealt with conditionally or unconditionally (whether pursuant to an option or otherwise) by the Board pursuant to the approval in paragraph (a), other than the Shares issued pursuant to the Rights Issue (as hereinafter defined) or the rights to purchase the Shares under any option scheme or similar arrangement, shall not exceed 20% of each of the aggregate number of Domestic Shares and H Shares in issue respectively as at the date of passing of this resolution.

(d) In exercising the powers granted in paragraph (a), the Board must (i) comply with the Company Law and the Listing Rules; and (ii) obtain approval from China Securities Regulatory Commission and other relevant government departments of the PRC.

(e) For the purpose of this resolution:

“Relevant Period” means the period from the date of passing this resolution until the earliest of:

(i) the conclusion of the next annual general meeting of the Company;

(ii) the expiration of the 12-month period following the passing of this resolution; and

(iii) the revocation or variation of the mandate granted under this resolution by a special resolution of the shareholders of the Company (the “Shareholders”) in a general meeting.

“Rights Issue” means the allotment or issue of Shares or other securities which would or might require Shares to be allotted and issued pursuant to an offer made to all the Shareholders (excluding for such purpose any shareholder who is resident in a place where such offer is not permitted under the law of that place) and, where appropriate, the holders of other equity securities of the Company entitled to such offer, pro rata (apart from fractional entitlements) to their existing holdings of Shares or such other equity securities.

AGM-3 -

NOTICE OF AGM FOR 2024

(f) The Board, subject to the approval of the relevant authorities of the PRC and in accordance with the Company Law, be authorised to increase the registered capital of the Company to the required amount upon the exercise of the powers pursuant to paragraph (a) above.

(g) The Board be authorised to sign the necessary documents, complete the necessary formalities and take other necessary steps to complete the allotment, issue and listing of new Shares, provided that the same do not violate the relevant laws, administrative regulations, the relevant regulatory stipulations (as amended from time to time) of the place where the Company is listed and the articles of association of the Company.

(h) Subject to the requirement of the relevant PRC authorities, the Board be authorised to make appropriate and necessary amendments to the articles of association of the Company after completion of the allotment and issue of new Shares according to the method, type and amount of the allotment and issue of new Shares by the Company and the actual situation of the shareholding structure of the Company at the time of completion of the allotment and issue of new Shares in order to reflect the alteration of the share capital structure and registered capital of the Company pursuant to the exercise of this mandate.”

By Order of the Board
Shenyang Public Utility Holdings Company Limited
Zhang Jing Ming
Chairman

Shenyang, the PRC, 4 June 2025

Notes:

A Shareholder entitled to attend and vote at the AGM is entitled to appoint a proxy or proxies to attend and vote in his/her stead. A proxy need not be a Shareholder. In the case of joint holders of any Shares, only the person whose name appears first in the register of members of the Company shall be entitled to receive this notice, to attend and exercise all the voting powers attached to such Shares at the AGM, and this notice shall be deemed to be given to all joint holders of such Shares.
Where there are joint holders of any Shares, any one of such persons may vote at the AGM or any adjournment thereof (as the case may be), either personally or by proxy, in respect of such Shares as if he/she was solely entitled thereto; but if more than one of such joint holders are present at the AGM personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such Shares shall alone be entitled to vote in respect thereof.
To be valid, the form of proxy together with any power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power of attorney or authority must be deposited with the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong (for holders of H Shares only) or the Company's office at 4809, Jinzhonghuan Main Business Building, No. 3037 Jintian Road, Futian, Shenzhen, PRC (for holders of Domestic Shares only) as soon as possible and in any event not less than 24 hours before the time appointed for holding the AGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude a Shareholder from attending and voting in person at the AGM or any adjournment thereof (as the case may be) should the Shareholder so wish, and in such event, the form of proxy previously submitted shall be deemed to be revoked.
AGM-4 -

NOTICE OF AGM FOR 2024

The registration in the register of members of the Company will be closed from Wednesday, 25 June 2025 to Monday, 30 June 2025, both days inclusive, during which period no transfer of Shares will be effected. For the identification of Shareholders who are qualified to attend and vote at the AGM, all transfer documents accompanied by the relevant H Share certificates must be lodged with the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712–1716, 17/F, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong, not later than 4:30 p.m. on Tuesday, 24 June 2025 (for holders of H Shares only) or the Company's office at 4809, Jinzhonghuan Main Business Building, No. 3037 Jintian Road, Futian, Shenzhen, PRC, not later than 4:00 p.m. on Tuesday, 24 June 2025 (for holders of Domestic Shares only). Shareholders whose names appear on the register of members of the Company on Monday, 30 June 2025 will be entitled to attend the AGM.
Shareholders or their proxies attending the AGM shall produce their identification documents.
Pursuant to Rule 13.39(4) of the Listing Rules, each of the resolutions set out in this notice shall be voted by way of poll.
If a tropical cyclone warning signal no. 8 or above, or a black rainstorm warning signal or “extreme conditions” announced by the Hong Kong Government is/are in force in Hong Kong at or at any time after 7:00 a.m. on the date of the AGM, the AGM will be postponed. The Company will post an announcement on the websites of the Company at www.shenyang747.com and the Stock Exchange at www.hkexnews.hk to notify Shareholders of the date, time and place of the rescheduled meeting.

As at the date of this notice, the executive Directors are Mr. Zhang Jing Ming, Mr. Huang Chunfeng and Mr. Leng Xiao Rong; the non-executive Director is Mr. Chau Ting Yan; and the independent non-executive Directors are Mr. Luo Zhuo Qiang, Ms. Jiang Hai Ling and Mr. Mao Hai Bin.

For identification purposes only
AGM-5 -

AI assistant

CMON Limited — Proxy Solicitation & Information Statement 2025

50172_rns_2025-06-03_c5d78f47-348e-4418-b2d8-7bd0e04ae40e.pdf

瀋陽公用發展股份有限公司

瀋陽公用發展股份有限公司

Shenyang Public Utility Holdings Company Limited

INTRODUCTION

GENERAL MANDATE TO ISSUE SHARES

RE-APPOINTMENT OF AUDITOR

THE ACQUISITION

THE EQUITY TRANSFER AGREEMENT

Subject matter of the Acquisition

Consideration

Conditions precedent

Transition period

Completion

INFORMATION ON THE PURCHASER AND THE GROUP

INFORMATION ON THE VENDOR AND THE TARGET GROUP

Information on the Vendor

Information on the Target Group

Financial Information of the Target Group

REASONS FOR AND BENEFITS OF THE ACQUISITION

FINANCIAL EFFECT OF THE ACQUISITION ON THE EARNINGS AND ASSETS AND LIABILITIES OF THE GROUP

Earnings

Asset and liabilities

LISTING RULES IMPLICATIONS

AGM

CLOSURE OF REGISTER OF MEMBERS

RECOMMENDATION

ADDITIONAL INFORMATION

1. FINANCIAL INFORMATION OF THE GROUP

2. INDEBTEDNESS STATEMENT

Bank borrowings

Other borrowing

Lease liabilities

Amounts due to shareholders

Amount due to a non-controlling interest

3. SUFFICIENCY OF WORKING CAPITAL

4. MATERIAL ADVERSE CHANGE

5. FINANCIAL AND TRADING PROSPECTS

Construction of Infrastructure Business

Development of Properties Business

Property Investment and Leasing Business

Property Management Business

Introduction

Director's responsibility for the Historical Financial Information

Reporting Accountants' Responsibility

Opinion

Material Uncertainty Related to Going Concern

I. HISTORICAL FINANCIAL INFORMATION OF THE TARGET GROUP

Preparation of Historical Financial Information

II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE TARGET GROUP

1. GENERAL INFORMATION

2. BASIS OF PREPARATION AND PRESENTATION OF HISTORICAL FINANCIAL INFORMATION

Going Concern

Amendments to HKFRS Accounting Standards that are mandatorily effective for the current year

New and amendments to HKFRS Accounting Standards in issue but not yet effective

3. MATERIAL ACCOUNTING POLICY INFORMATION

Basis of consolidation

Revenue from contracts with customers

Over time revenue recognition: measurement of progress towards complete satisfaction of a performance obligation

Output method

Existence of significant financing component

Provision of property management services

Borrowing costs

Government grants

Employee benefits

Retirement benefits costs

Termination benefits

Short-term employee benefits

Taxation

Property, plant and equipment

Impairment of property, plant and equipment

Cash and cash equivalents

Provisions

Financial instruments

Financial assets

Classification and subsequent measurement of financial assets

i) Amortised cost and interest income

Derecognition of financial assets

CMON Limited Proxy Solicitation & Information Statement 2025