THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in 東原仁知城市運營服務集團股份有限公司 (Dowell Service Group Co. Limited*), you should at once hand this circular with the form of proxy to the purchaser or transferee or to the bank manager, licensed securities dealer or registered institution in securities 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.

东原仁知

DOWELL SERVICE

DOWELL SERVICE GROUP CO. LIMITED*

東原仁知城市運營服務集團股份有限公司

(A joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 2352)

(1) DISCLOSABLE AND CONNECTED TRANSACTION IN RELATION TO THE EQUITY TRANSFER AGREEMENT; AND (2) NOTICE OF EGM

Independent Financial Adviser to

the Independent Board Committee and the Independent Shareholders

Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed "Definitions" in this circular.

The letter from the Board is set out on pages 4 to 12 of this circular. A letter of recommendation from the Independent Board Committee to the Independent Shareholders is set out on pages 13 to 14 of this circular. A letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders is set out on pages 15 to 33 of this circular.

A notice convening the EGM to be held at 5th Floor, Building 2, Ping An Wealth Center, Shenchang Road, Minhang District, Shanghai, the PRC on Wednesday, 22 January 2025 at 10:00 a.m. is set out in this circular. Whether or not you intend to attend the EGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to Computershare Hong Kong Investor Services Limited, the H share registrar of the Company in Hong Kong, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, as soon as possible and in any event not later than 24 hours before the time appointed for holding the EGM (i.e. no later than 10:00 a.m. on Tuesday, 21 January 2025 (Hong Kong time)) or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

This circular together with the form of proxy are also published on the website of the Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.dowellservice.com). Reference to dates and times in this circular are to Hong Kong dates and times.

For identification purposes only

6 January 2025

CONTENTS

Page

DEFINITIONS ... 1
LETTER FROM THE BOARD ... 4
LETTER FROM THE INDEPENDENT BOARD COMMITTEE ... 13
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER ... 15
APPENDIX I – VALUATION REPORT ... I-1
APPENDIX II – GENERAL INFORMATION ... II-1
NOTICE OF EGM ... EGM-1

— i —

DEFINITIONS

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

“associate” has the meaning ascribed to it under the Listing Rules

“Board” the board of Directors

“Chengdu Dowell” Chengdu Dowell Haina Zhiye Co., Ltd.* (成都東原海納置業有限公司), a limited liability company established in the PRC and a wholly-owned subsidiary of Dima

“Chongqing Dowell” Chongqing Dowell Enterprise Management Consultation Co., Ltd.* (重慶東原仁知企業管理諮詢有限公司), a limited liability company established in the PRC and a wholly-owned subsidiary of the Company

“Chongqing Doyen” Chongqing Doyen Holdings Group Co., Ltd.* (重慶東銀控股集團有限公司), a limited liability company established in the PRC and a connected person of the Company

“Chongqing Shuorun” Chongqing Shuorun Petrochemical Company Limited* (重慶碩潤石化有限責任公司), a limited liability company established in the PRC and a connected person of the Company

“Company” 東原仁知城市運營服務集團股份有限公司(DOWELL SERVICE GROUP CO. LIMITED*), a joint stock company incorporated in the PRC with limited liability, the H Shares of which are listed on the Main Board of the Stock Exchange

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

“Consideration” consideration for the transaction contemplated under the Equity Transfer Agreement

“Dima” Dima Holdings Co., Ltd.* (重慶市迪馬實業股份有限公司), a limited liability company established in the PRC on 9 October 1997, one of the substantial shareholders of the Company and a connected person of the Company for the purpose of the Listing Rules

“Dima Group” Dima and companies formed by Dima and/or its subsidiary(ies) with other Independent Third Parties which Dima held a controlling interests

“Director(s)” the director(s) of the Company

— 1 —

DEFINITIONS

"EGM"
the extraordinary general meeting to be convened and held by the Company for the purpose of, among others, considering and, if thought fit, approving the Equity Transfer Agreement and the transaction contemplated thereunder

"Enlarged Group"
the Group and its subsidiaries upon completion of the Equity Transfer

"Equity Transfer"
the transfer of all equity interests in the Target Company from Chengdu Dowell (as vendor) to Chongqing Dowell (as purchaser)

"Equity Transfer Agreement"
the conditional equity transfer agreement dated 20 November 2024 and entered into among Chengdu Dowell (as vendor), Chongqing Dowell (as purchaser) and the Target Company in relation to the Equity Transfer

"Group"
collectively, the Company and its subsidiaries

"H Share(s)"
share(s) in the share capital of the Company with a nominal value of RMB1.00 each, which are listed on the Stock Exchange

"Independent Board Committee"
the independent board committee, comprising all independent non-executive Directors, formed to advise the Independent Shareholders in respect of the Equity Transfer Agreement and the transaction contemplated thereunder

"Independent Financial Adviser"
Pelican Financial Limited, a corporation licensed to carry on type 6 (advising on corporate finance) regulated activity under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), being the independent financial adviser of the Company to advise the Independent Board Committee and the Independent Shareholders in respect of, among other matters, the Equity Transfer Agreement and the transaction contemplated thereunder

"Independent Shareholders"
the Shareholders who are not required to abstain from voting at the EGM for the resolution in respect of, among other matters, the Equity Transfer Agreement and the transaction contemplated thereunder

"Independent Third Party(ies)"
a person, persons, company or companies which is or are independent of, and not connected with (within the meaning under the Listing Rules), any directors, chief executive or substantial shareholders of the Company, any of its subsidiaries or any of their respective associate(s)

"Latest Practicable Date"
27 December 2024, being the latest practicable date prior to the publication of this circular for the purpose of ascertaining certain information contained in this circular

— 2 —

DEFINITIONS

"Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange

"Long Stop Date" 28 February 2025 (or such later as the parties agree in writing)

"Mr. Lo" Mr. Lo Siu Yu, who owned approximately 77.78% of the equity interest in Chongqing Doyen as at the Latest Practicable Date and a connected person of the Company

"Ms. Chiu" Ms. Chiu Kit Hung, the spouse of Mr. Lo

"PRC" the People's Republic of China (and for the purpose of this circular, excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan)

"Property" 3rd to 11th Floor, Building 1, No. 4 of Xinhong North Branch Road, Chenghua District, Chengdu City, the PRC

"RMB" Renminbi, the lawful currency of the PRC

"Shareholder(s)" the holder(s) of H Shares

"Stock Exchange" The Stock Exchange of Hong Kong Limited

"substantial shareholder(s)" has the meaning ascribed to it under the Listing Rules

"Target Company" Chengdu Dongyuhong Commercial Management Co., Ltd.* (成都東煜宏商業管理有限公司), a company established in the PRC with limited liability and a wholly-owned subsidiary of Chengdu Dowell as at the Latest Practicable Date

"%" per cent.

For identification purposes only

— 3 —

LETTER FROM THE BOARD

东原仁知

DOWELL SERVICE

DOWELL SERVICE GROUP CO. LIMITED*

東原仁知城市運營服務集團股份有限公司

(A joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 2352)

Non-executive Directors:
Ms. Luo Shaoying (Chairman)
Ms. Yi Lin

Executive Directors:
Mr. Zhang Aiming (Vice chairman, Co-chief executive officer, employee Director)
Mr. Fan Dong (Co-chief executive officer, employee Director)

Independent non-executive Directors:
Ms. Cai Ying
Mr. Wang Susheng
Mr. Song Deliang

Registered office and headquarters:
Room 206, B1/F
No. 108 Baihe Road
Nanping Town
Nan'an District, Chongqing
The PRC

Principal place of business in Hong Kong
40/F, Dah Sing Financial Centre
No. 248 Queen's Road East
Wanchai
Hong Kong

6 January 2025

DISCLOSABLE AND CONNECTED TRANSACTION IN RELATION TO THE EQUITY TRANSFER AGREEMENT

To the Shareholders

Dear Sir or Madam,

I. INTRODUCTION

Reference is made to the announcement of the Company dated 20 November 2024.

The purpose of this circular is to provide you with, among other things, (i) details of the Equity Transfer Agreement and the transaction contemplated thereunder; (ii) a letter from the Independent Board Committee to the Independent Shareholders in relation to the Equity Transfer Agreement and the transaction contemplated thereunder; (iii) a letter from the Independent Financial Adviser in relation to the Equity Transfer Agreement and the transaction contemplated thereunder; and (iv) a notice convening the EGM, as well as any other information required to be disclosed under the Listing Rules.

LETTER FROM THE BOARD

II. THE EQUITY TRANSFER AGREEMENT

On 20 November 2024 (after trading hours), Chongqing Dowell (as purchaser), Chengdu Dowell (as vendor) and the Target Company entered into the Equity Transfer Agreement, pursuant to which Chongqing Dowell has conditionally agreed to acquire, and Chengdu Dowell has conditionally agreed to sell, the entire equity interests in the Target Company at the Consideration of RMB59.5 million.

Details of the major terms of the Equity Transfer Agreement are as follows:

Date: 20 November 2024

Parties:
1. Chongqing Dowell, as purchaser;
2. Chengdu Dowell, as vendor; and
3. the Target Company, as target company.

As at the Latest Practicable Date, Chengdu Dowell is a wholly-owned subsidiary of Dima, which is one of the Company’s substantial shareholders. Therefore, Chengdu Dowell is a connected person of the Company.

Subject matter

Pursuant to the Equity Transfer Agreement, Chongqing Dowell (as purchaser) has conditionally agreed to acquire, and Chengdu Dowell (as vendor) has conditionally agreed to sell, the entire equity interests in the Target Company. As at the Latest Practicable Date and immediately prior to completion of the Equity Transfer, the Target Company was wholly-owned by Chengdu Dowell, a wholly-owned subsidiary of Dima.

The Target Company was established by Chengdu Dowell. Accordingly, there was no original acquisition cost of the entire equity interests in the Target Company by Chengdu Dowell.

Consideration

The Consideration for the transaction contemplated under the Equity Transfer Agreement is RMB59.5 million, and shall be payable in three tranches in the following manner:

(1) 10% of the Consideration, i.e. RMB5.95 million, shall be payable within five business days from the date of the Equity Transfer Agreement as a deposit and partial payment (the “Deposit”);

(2) 40% of the Consideration, i.e. RMB23.8 million, shall be payable within five business days of:

(a) the fulfilment and/or waiver (if applicable) of all of the conditions precedent as set out in the paragraph headed “The Equity Transfer Agreement – Conditions precedent” below; and

— 5 —

LETTER FROM THE BOARD

(b) completion of the relevant industrial and commercial registration modification formalities (工商變更登記) and the Target Company obtaining a new business license renewed by the industrial and commercial registration authority (工商登記機關);

(3) the remaining balance of the Consideration, i.e. RMB29.75 million, shall be payable within five business days after completion of the transaction contemplated under the Equity Transfer Agreement.

If any of the conditions precedent as set out in the paragraph headed "The Equity Transfer Agreement – Conditions precedent" below is not fulfilled (or waived (if applicable)) on or before the Long Stop Date, the Deposit shall be refunded in full to Chongqing Dowell within five business days after the Long Stop Date.

Basis of consideration

The Consideration of RMB59.5 million was determined after arm's length negotiations between the parties to the Equity Transfer Agreement on normal commercial terms, taking into consideration of, among other things, (i) the net asset value of the Target Company; (ii) the valuation prepared by an independent valuer on the Property based on market approach, the text of which is set out in Appendix I to this circular; and (iii) other reasons for and benefits of the Equity Transfer Agreement as set out in the section headed "Reasons for and benefits of the Equity Transfer" below.

Conditions precedent

The Equity Transfer Agreement is conditional upon:

(a) Chongqing Dowell and the Company obtaining the necessary consents or approvals for the entering into of the Equity Transfer Agreement and the transaction contemplated thereunder, including but not limited to the approval by the Stock Exchange, the approval of the Securities and Futures Commission, any relevant governmental or regulatory authority and requirements under the laws of the PRC, or obtaining the applicable waivers from the Stock Exchange or the Securities and Futures Commission;

(b) the Company obtaining the approval from the Independent Shareholders of the Equity Transfer Agreement and the transaction contemplated thereunder at the EGM;

(d) Chengdu Dowell and the Target Company not breaching any terms under the Equity Transfer Agreement; and

(e) there being no material adverse change in respect of information regarding the Target Company as disclosed by Chengdu Dowell in the Equity Transfer Agreement.

— 6 —

LETTER FROM THE BOARD

Either Chongqing Dowell or Chengdu Dowell has the right to notify the other party in writing at any time to waive compliance with the abovementioned conditions precedent (c), (d) and/or (e). If the conditions precedent have not been fulfilled (or waived (if applicable)) on or before the Long Stop Date, the Equity Transfer Agreement shall cease to have effect, and no party shall have any claim against the other party except for any antecedent breach of the Equity Transfer Agreement.

Completion

Completion shall take place within three days after completion of the relevant industrial and commercial registration modification formalities (工商變更登記手續), reflecting the change of equity holder of the Target Company from Chengdu Dowell to Chongqing Dowell.

Upon completion, Chengdu Dowell shall ensure that various documents and assets of the Target Company, as agreed under the Equity Transfer Agreement, are delivered to a person designated by Chongqing Dowell.

Pursuant to the Equity Transfer Agreement, completion shall be deemed to take place upon:

(a) completion of all industrial and commercial registration modification formalities (工商變更登記手續) in relation to the Equity Transfer;

(b) (if required) Chengdu Dowell and the Target Company having completed the relevant alteration, repealing and remodelling of the company seals of the Target Company in accordance with the requirements of Chongqing Dowell, and such remodelled seals have been activated after the relevant alteration and repealing procedures have been completed;

(c) the articles of association of the Target Company having been amended according to the terms of the Equity Transfer Agreement, and the legal representatives, directors, supervisors and senior management personnel having all been changed to the persons designated by Chongqing Dowell, and the corresponding procedures for registration and filing of the industrial and commercial modification (工商變更) having been completed; and

(d) any other matters in relation to completion of the Equity Transfer.

Immediately upon completion of the Equity Transfer, the Target Company shall be an indirect wholly-owned subsidiary of the Company, and the financial results of the Target Company will be consolidated into the consolidated financial statements of the Group.

Information on the Group and Chongqing Dowell

The Group is a property management service provider that offers comprehensive services for a wide range of property projects in the PRC.

Chongqing Dowell is a company established in the PRC with limited liability and is principally engaged in business management consulting.

LETTER FROM THE BOARD

Information on Dima Group and Chengdu Dowell

Dima Group is principally engaged in (i) development and investment of residential and commercial properties in the PRC; and (ii) manufacturing of vehicles with various types of use.

As at the Latest Practicable Date, Dima was owned by Chongqing Doyen and Chongqing Shuorun as to approximately 35.55% and 3.01% respectively. Chongqing Shuorun was owned by Chongqing Doyen and Ms. Chiu as to approximately 98.96% and 1.04% respectively, while Chongqing Doyen was owned by Mr. Lo and Ms. Chiu as to approximately 77.78% and 22.22% respectively. As at the Latest Practicable Date, no other equity holder of Dima controls, directly or indirectly, 10% or more of the equity interests in Dima.

Chengdu Dowell is a company established in the PRC and is principally engaged in development of residential and commercial properties.

Information on the Target Company

The Target Company is a company established in the PRC with limited liability and is principally engaged in business management and real estate consulting. The Target Company holds approximately 83.48% of ownership of the Property, and the remaining approximately 16.52% of the Property is held by Chengdu Guangming Optoelectronics Co., Ltd.* (成都光明光電有限責任公司), a company principally engaged in manufacturing of instruments, which is indirectly wholly-owned by the State-owned Assets Supervision and Administration Commission of the State Council (國務院國有資產監督管理委員會). As at the Latest Practicable Date, the Property has a gross area of approximately 8,474.10 square metres, and was used as an elderly care centre.

Given the Target Company was established in September 2024, the financial information of the Target Company for previous financial years are not available.

The net asset value of the Target Company as at 18 November 2024 was approximately RMB59.5 million.

Risk of reversing of the Equity Transfer

On 11 November 2024, Chengdu Dowell, a subsidiary of Dima, entered into an agreement, pursuant to which it transferred approximately 83.48% ownership of the Property to the Target Company in consideration for capital increase in the Target Company ("Capital Increase").

LETTER FROM THE BOARD

Pursuant to Article 538 and Article 539 of the Civil Code of the PRC（《中華人民共和國民法典》）：

"Article 538: Where a debtor gratuitously disposes of his proprietary rights and interests by waiving his claims, waiving the security for his claims, or transferring his property without consideration, and the like, or maliciously extends the period of performance of his due claim, and hence, the enforcement of the creditor's claim is adversely affected, the creditor may request the people's court to revoke the debtor's act.

Article 539: Where a debtor transfers his property at an obviously unreasonably low price, takes another's property at an obviously unreasonably high price, or provides security for another's obligation, and hence, the enforcement of the creditor's claim is adversely affected, the creditor may request the people's court to revoke the debtor's act if the counterparty of the debtor knows or should have known such circumstance."

As far as the Directors are aware of, Chengdu Dowell is involved in various ongoing litigation matters, which involve Chengdu Dowell's creditors' claims against it. Given that (i) the Capital Increase resulting in the transfer of ownership of approximately 83.48% of the Property is internal restructuring of Chengdu Dowell, which would not affect its creditor's interests, while (ii) the Equity Transfer would affect such creditors' interests as it would effectively mean the Property is transferred to a third party, i.e. not Chengdu Dowell and its subsidiaries, in the event that the Equity Transfer is effected, the enforcement of the creditor(s) of Chengdu Dowell's claim may be adversely affected, and if the consideration for the equity transfer is at an obvious unreasonable low price, such creditors may request the People's court to revoke the Equity Transfer pursuant to Article 538 and 539 of the Civil Code of the PRC, which would result in the legal consequences of reversing the Equity Transfer.

The Directors are of the view that the legal consequences of reversing the Equity Transfer is remote as the Consideration was determined after arm's length negotiations between the parties to the Equity Transfer Agreement on normal commercial terms, taking into consideration of, among other things, (a) the net asset value of the Target Company; (b) the valuation prepared by an independent valuer on the Property based on market approach, the text of which is set out in Appendix I to the Circular; and (c) other reasons for and benefits of the Equity Transfer Agreement as set out in the section headed "Reasons for and benefits of the Equity Transfer" below. Accordingly, it would be farfetched that the Consideration would be viewed to be "an obviously unreasonably low price".

Reasons for and benefits of the Equity Transfer

The Target Company holds approximately 83.48% of ownership of the Property. The Property is currently leased to a subsidiary of the Company for the purposes of operating an elderly care centre. Such elderly care centre currently operates approximately 300 beds and generated approximately RMB9 million in revenue during the year ended 31 December 2023. The Group considered that it will be in its best interest to continue to use the Property going forward, as (i) there would be additional expenses for the re-location of the elderly care centre premises, due to specific renovation and equipment required in operating such elderly care centre; and (ii) the re-location would be time consuming and may impact the Group's operation of elderly care centre as the elderly persons residing in such care centres would need to be transported to the re-located elderly care centre. In addition, the acquisition of the Target Company will alleviate the Group's responsibility to pay a continuously increasing amount of rent pursuant to the

— 9 —

LETTER FROM THE BOARD

relevant tenancy agreement, the tenancy period of which extends to 2041. Further, if Chengdu Dowell disposes of the Property to an independent third party, additional costs may be incurred by the Group if such new landlord increases the rent or the Group may even be required to find another premises for the purpose of operating the elderly care centre in the future if such new landlord elects to lease the Property to others. As such, in order to have stability in the use of the Property for the long term, it would be in the interest of the Company to purchase the Target Company, which holds the Property, at fair market value. Further, as the Property is located in a prime area in Chengdu, which is adjacent to large commercial plazas and residential areas, and is considered to be a high quality asset with long-term investment value, the Directors also consider that the potential capital appreciation in the Property would allow the Group to have investment returns in future.

In light of the reasons stated above, the Directors (including the independent non-executive Directors) are of the view that, despite the entering into the Equity Transfer Agreement was not in the ordinary and usual course of business of the Group, the terms of the Equity Transfer Agreement and the transaction contemplated thereunder are on normal commercial terms after arm's length negotiations, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Since Ms. Luo Shaoying, being a non-executive Director, is a director and chief executive officer of Dima, and Ms. Yi Lin, being a non-executive Director, is a director and vice chief executive officer of Dima, for good corporate governance practice, each of Ms. Luo and Ms. Yi has abstained from voting on the relevant resolutions of the Board approving the Equity Transfer Agreement and the transaction contemplated thereunder. Save as disclosed, none of the other Directors had or may be regarded as having a material interest in the Equity Transfer Agreement and the transaction contemplated thereunder and therefore none of the other Directors had abstained from voting on the relevant Board resolutions approving the Equity Transfer Agreement and the transaction contemplated thereunder.

Listing Rules implications

As at the Latest Practicable Date, Chengdu Dowell is wholly-owned by Dima, which is one of the Company's substantial shareholders. Therefore, Chengdu Dowell is a connected person of the Company for the purpose of Chapter 14A of the Listing Rules. Accordingly, the transaction contemplated under the Equity Transfer Agreement constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules.

As one or more of the applicable percentage ratios under the Listing Rules in respect of the Equity Transfer Agreement exceed 5% but is less than 25%, the transaction contemplated under the Equity Transfer Agreement constitutes (i) a discloseable transaction for the Company that is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules; and (ii) a connected transaction for the Company that is subject to the reporting, announcement, circular and the Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

III. EGM

— 10 —

LETTER FROM THE BOARD

Whether or not you intend to attend the EGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to Computershare Hong Kong Investor Services Limited, the H Share Registrar of the Company in Hong Kong, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, as soon as possible and in any event not later than 24 hours before the time appointed for holding the EGM (i.e. no later than 10:00 a.m. on Tuesday, 21 January 2025) or any adjournment thereof. Completion and return of the forms of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

Pursuant to the Articles of Association, for the purpose of holding the EGM, the record date for determining the entitlement of members of the H Shares to attend and vote at the EGM will be fixed at the close of business of Tuesday, 14 January 2025. In order to be eligible to attend and vote at the EGM, all transfer documents accompanied by the relevant share certificate must be lodged with Computershare Hong Kong Investor Services Limited, the H Share Registrar of the Company in Hong Kong, at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for registration not later than 4:30 p.m. on Tuesday, 14 January 2025.

Pursuant to Rule 13.39(4) of the Listing Rules, all votes in respect of the resolution to be proposed at the EGM will be conducted by way of a poll except where the chairperson, in good faith, decides to allow a resolution relating to a procedural or administrative matter to be voted on by a show of hands. Therefore, the resolution proposed at the EGM will be voted by way of a poll.

To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, associate of Dima, namely Tianjin Chengfang, which hold 13,461,643 H Shares, representing approximately 20.09% of the issued H Shares as at the Latest Practicable Date, shall abstain from voting on the resolution approving the Equity Transfer Agreement and the transaction contemplated thereunder at the EGM. Save as disclosed above, as at the Latest Practicable Date, none of the other Shareholders are required to abstain from voting on the resolution in respect of the Equity Transfer Agreement and the transaction contemplated thereunder at the EGM.

IV. BAD WEATHER ARRANGEMENTS

Where gale warning (orange typhoon warning or above), rainstorm warning (orange rainstorm warning or above), extreme weather conditions or other similar event is or are in force at 8:00 a.m. on the date of the EGM, the EGM will be postponed. The Company will post an announcement on its website (www.dowellservice.com) and on the website of the Stock Exchange (www.hkexnews.hk) to notify the Shareholders of the date, time and place of the rescheduled meeting.

V. RECOMMENDATION

The Directors consider that all matters proposed to be approved at the EGM are in the interests of the Group and the Shareholders as a whole and accordingly recommend the Shareholders to vote in favour of the resolution to be proposed at the EGM.

— 11 —

LETTER FROM THE BOARD

VI. WARNING NOTICE

Completion of the transaction contemplated under the Equity Transfer Agreement is subject to the satisfaction of the conditions precedent. Therefore, the transactions contemplated under the Equity Transfer Agreement may or may not proceed. Shareholders and potential investors of the Company are advised to exercise caution when dealing in securities of the Company, and are recommended to consult their professional advisers if they are in any doubt about their position and as to actions that they should take.

Yours faithfully,

By order of the Board

DOWELL SERVICE GROUP CO. LIMITED*

東原仁知城市運營服務集團股份有限公司

Luo Shaoying

Chairman and non-executive Director

— 12 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of a letter from the Independent Board Committee setting out its recommendation to the Independent Shareholders in relation to the Agreement and the transactions contemplated thereunder:

东原仁知
DOWELL SERVICE

DOWELL SERVICE GROUP CO. LIMITED*
東原仁知城市運營服務集團股份有限公司
(A joint stock company incorporated in the People's Republic of China with limited liability)
(Stock Code: 2352)

To the Independent Shareholders

Dear Sirs or Madams,

DISCLOSABLE AND CONNECTED TRANSACTION
IN RELATION TO THE EQUITY TRANSFER AGREEMENT

We refer to the circular dated 6 January 2025 (the "Circular") to the Shareholders of which this letter forms part. Unless otherwise specified, terms defined in the Circular shall have the same meanings in this letter.

We have been appointed to form the Independent Board Committee to advise the Independent Shareholders in respect of the Equity Transfer Agreement and the transaction contemplated thereunder, details of which are set out in the "Letter from the Board" contained in the Circular. The Independent Financial Adviser has been appointed to advise the Independent Shareholders and us in this regard.

Details of the advice and the principal factors and reasons that the Independent Financial Adviser has taken into consideration in giving such advice are set out in the "Letter from the Independent Financial Adviser" in the Circular. Your attention is also drawn to the "Letter from the Board" in the Circular and the additional information set out in the appendices thereto.

Having taken into account the (i) terms of the Equity Transfer Agreement and the transaction contemplated thereunder; and (ii) the factors referred to in the "Letter from the Independent Financial Adviser" in the Circular, we are of the opinion that despite the entering into of the Equity Transfer Agreement was not in the ordinary and usual course of business of the Group, the terms of the Equity Transfer Agreement and the transaction contemplated thereunder are (a) fair and reasonable so far as the Shareholders (including the Independent Shareholders) are concerned; (b) on normal commercial terms; and (c) in the interests of the Group and the Shareholders as a whole.

— 13 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Accordingly, we would recommend you to approve the Equity Transfer Agreement and the transaction contemplated thereunder at the EGM.

Yours faithfully,

For and on behalf of

The Independent Board Committee

Ms. Cai Ying
Independent
non-executive Director

Mr. Wang Susheng
Independent
non-executive Director

Mr. Song Deliang
Independent
non-executive Director

— 14 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of the letter of advice from the Independent Financial Adviser setting out the advice to the Independent Board Committee and the Independent Shareholders in respect of the Equity Transfer Agreement and the transaction contemplated thereunder, which has been prepared for the purpose of inclusion in this circular.

PELICAN FINANCIAL LIMITED

28/F, Lee Garden Two, 28 Yun Ping Road, Causeway Bay, Hong Kong

6 January 2025

To the Independent Board Committee and the Independent Shareholders of Dowell Service Group Co. Limited

Dear Sir or Madam,

DISCLOSABLE AND CONNECTED TRANSACTION IN RELATION TO THE EQUITY TRANSFER AGREEMENT

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Equity Transfer Agreement and the transaction contemplated thereunder, details of which are set out in the letter from the Board (the "Board Letter") contained in the circular of the Company dated 6 January 2025 (the "Circular"), of which this letter forms a part. Terms used in this letter shall have the same meanings as those defined in the Circular unless the context requires otherwise.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios under the Listing Rules in respect of the Equity Transfer Agreements, in aggregate, exceed 5% but is less than 25%, the transaction contemplated under the Equity Transfer Agreements constitutes (i) a discloseable transaction for the Company that are subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules; and (ii) a connected transaction for the Company that is subject to the reporting, announcement, circular and the Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

As at the Latest Practicable Date, to the best of the Directors' knowledge, information and belief, and having made all reasonable enquiries, associate of Dima, namely Tianjin Chengfang, who hold 13,461,643 H Shares, representing approximately 20.09% of the issued H Shares as at the Latest Practicable Date, shall abstain from voting on the resolution approving the Equity Transfer Agreement and the transaction contemplated thereunder at the EGM. Save as disclosed above, as at the Latest Practicable Date, none of the other Shareholders are required to abstain from voting on the resolution in respect of the Equity Transfer Agreement and the transaction contemplated thereunder at the EGM.

THE INDEPENDENT BOARD COMMITTEE

The Company has established the Independent Board Committee comprising all independent non-executive Directors, namely Ms. Cai Ying, Mr. Wang Susheng and Mr. Song Deliang to advise the Independent Shareholders in respect of the Equity Transfer Agreement and the transaction contemplated thereunder. We have been appointed by the Company as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this respect and such appointment has been approved by the Independent Board Committee.

OUR INDEPENDENCE

Pelican Financial Limited ("Pelican") is not connected with the Directors, chief executive or substantial Shareholders of the Company or any of their respective associates and therefore is considered suitable to give independent advice to the Independent Board Committee and the Independent Shareholders. As at the Latest Practicable Date, there were no relationships or interests between us and the Group, Dima Group or any of their respective substantial shareholders, directors or chief executives, or their respective associates that could reasonably be regarded as a hindrance to our independence as defined under Rule 13.84 of the Listing Rules to act as the Independent Financial Adviser.

In the last two years, other than our engagements by the Company to act as its independent financial advisor in respect of its (i) continued connected transactions in relation to the New Dima Group Master Agreements and the proposed annual caps contemplated thereunder as disclosed in its circulars dated 21 November 2023; and (ii) discloseable and connected transaction in relation to the equity transfer agreement and the supplemental agreement as disclosed in its circular dated 3 June 2024, there was no other engagement between the Company and us.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Apart from normal professional fees payable to us in connection with our current appointment, no arrangement exists whereby Pelican will receive any fees or benefits from the Company or the Directors, chief executive or substantial Shareholders of the Company or any of their respective associates, and we are not aware of the existence of or change in any circumstances that would affect our independence. Accordingly, we consider that we are eligible to give independent advice on the Equity Transfer Agreement and the transaction contemplated thereunder.

Our role is to provide you with our independent opinion and recommendation as to (i) whether the Equity Transfer Agreement is carried out in the ordinary and usual course of business of the Group and is on normal commercial terms; (ii) whether the terms of the Equity Transfer Agreement and the transaction contemplated thereunder are fair and reasonable so far as the Independent Shareholders are concerned and whether they are in the interests of the Company and the Shareholders as a whole; and (iii) how the Independent Shareholders should vote in respect of the relevant resolution(s) to approve the Equity Transfer Agreement and the transaction contemplated thereunder at the EGM.

BASIS OF OUR OPINION

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have performed relevant procedures and those steps which we deemed necessary in forming our opinions which include, among other things, review of relevant agreements, documents as well as information provided by the Company and verified them, to an extent, with the relevant public information, statistics and market data, the relevant industry guidelines and rules and regulations as well as information, facts and representations provided, and the opinions expressed, by the Company and/or the Directors and/or the management of the Group (including those related to the Dima Group). The documents reviewed include the Equity Transfer Agreement, the valuation report prepared by Peak Vision Appraisals Limited in respect of the valuation of the 100% equity interest in Target Company (the "Valuation Report"), the annual report of the Company for the financial year ended 31 December 2023 (the "2023 Annual Report"), the interim report of the Company for the six months ended 30 June 2024 (the "2024 Interim Report"), and the Circular. We have assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Company, its management and/or the Directors, which have been provided to us.

The Directors jointly and severally accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in the Circular have been arrived at after due and careful consideration and there are no other facts not contained in the Circular, the omission of which would make any statement in the Circular misleading.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent verification of the information included in the Circular and provided to us by the Directors and the management of the Group nor have we conducted any form of in-depth investigation into the business and affairs or the future prospects of the Group.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

PRINCIPAL FACTORS TAKEN INTO CONSIDERATION

In formulating our opinion in respect of the Equity Transfer Agreement and the transaction contemplated thereunder, we have considered the following principal factors and reasons.

1. Information of the Company and the Group

The Company was incorporated in the PRC on 13 January 2015 as a limited liability company, and was converted into a joint stock company with limited liability under the Company Law of the PRC on 30 December 2020. The Group is a property management service provider that offers comprehensive services for a wide range of property projects in the PRC.

Set out below is a summary of the financial information of the Group for the six months ended 30 June 2023 and 30 June 2024 as extracted from the 2024 Interim Report, and for the two years ended 31 December 2023 as extracted from the 2023 Annual Report.

Table 1: Summarised financial results of the Group

	For the six months ended 30 June		For the year ended 31 December
	2024 RMB'000 (Unaudited)	2023 RMB'000 (Unaudited) (Restated)	2023 RMB'000 (Audited)	2022 RMB'000 (Audited) (Restated)
Revenue
City Operations Services	462,384	413,460	872,773	656,213
Lifestyle Services	115,530	117,480	222,028	259,455
FATH and Other Comprehensive Services	191,969	196,795	389,033	433,744
Total Revenue	769,883	727,735	1,483,834	1,349,412
Gross profit	125,761	131,241	211,777	278,512
Profit for the year/period	25,204	24,913	21,922	91,953

According to the 2024 Interim Report, the Group recorded a revenue of approximately RMB769.9 million, representing an increase of approximately RMB42.2 million or $5.8\%$ as compared with approximately RMB727.7 million for the six months ended 30 June 2023. The increase in revenue was mainly attributable to the continuous expansion of the Group's business of city operations services segment. The Group's cost of sales increased by approximately RMB47.6 million or approximately $8.0\%$ to approximately RMB644.1 million from approximately RMB596.5 million as compared with the same

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

period of 2023. The increase was mainly attributable to the increase in the Group’s subcontracting costs since the Group outsourced more labour-intensive services, such as cleaning and security services. As a result, the Group’s gross profit decreased by approximately 4.2% from approximately RMB131.2 million for the six months ended 30 June 2023 to approximately RMB125.8 million for the six months ended 30 June 2024. The Group’s net profit slightly increased by approximately 1.2%, from approximately RMB24.9 million for the six months ended 30 June 2023 to approximately RMB25.2 million for the six months ended 30 June 2024.

According to the 2023 Annual Report, the Group recorded a revenue of approximately RMB1,483.8 million for the year ended 31 December 2023, representing an increase of approximately RMB134.4 million or 10.0% as compared with approximately RMB1,349.4 million for the year ended 31 December 2022. The increase in revenue was mainly attributable to the Group’s expansion in its city operations services segment by approximately 33.0% from approximately RMB656.2 million to approximately RMB872.8 million between the two years ended 31 December 2023. Despite the revenue growth, the Group recorded a decline in gross profit of approximately RMB66.7 million or 24.0% for the year ended 31 December 2023 from approximately RMB278.5 million to approximately RMB211.8 million. The Group’s cost of sales increased by approximately RMB201.2 million or approximately 18.8% to approximately RMB1,272.1 million from approximately RMB1,070.9 million for the year ended 31 December 2022. The increase was mainly attributable to (i) the continuous expansion in the Group’s property management projects and GFA under management, resulting in an increase in the number of employees and corresponding employee costs; and (ii) the increase in the Group’s subcontracting costs as a result of the increased outsourcing of labour-intensive services, such as cleaning and security services. Consequently, the overall gross profit margin decreased from approximately 20.6% to 14.3% between the two years ending 31 December 2023. As a result, the Group’s net profit decreased by approximately RMB70.1 million or 76.2%, from approximately RMB92.0 million for the year ended 31 December 2022 to approximately RMB21.9 million for the year ended 31 December 2023.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The consolidated assets and liabilities of the Group as at 31 December 2023 and 30 June 2024 as extracted from the 2024 Interim Report are summarized as follows:

Table 2: Summarised financial position of the Group

	As at 30 June 2024 RMB'000 (Unaudited)	As at 31 December 2023 RMB'000 (Unaudited) (Restated)
Total assets
- non-current assets	484,120	494,309
- current assets	974,898	1,034,131
	1,459,018	1,528,440
Total liabilities
- non-current liabilities	95,023	99,429
- current liabilities	863,695	922,145
	958,718	1,021,574
Net current assets	111,203	111,986
Net assets	500,300	506,866

The Group's total assets were approximately RMB1,528.4 million and RMB1,459.0 million as at 31 December 2023 and 30 June 2024, respectively. As at 30 June 2024, the non-current assets of the Group amounted to approximately RMB484.1 million, mainly comprised of (i) intangible assets of approximately RMB293.3 million; (ii) right-of-use assets of approximately RMB76.8 million; (iii) property, plant and equipment of approximately RMB54.1 million; (iv) investments accounted for using the equity method of approximately RMB24.8 million; and (v) deferred income tax assets of approximately RMB17.8 million. Meanwhile, the Group's current assets amounted to approximately RMB974.9 million as at 30 June 2024, mainly consisted of (i) trade, bills and other receivables of approximately RMB747.3 million; (ii) cash and cash equivalents (including restricted cash balance) of approximately RMB134.8 million; (iii) inventories of approximately RMB41.4 million; (iv) prepayments of approximately RMB40.4 million; and (v) dividend receivables of approximately RMB9.9 million.

On the other hand, the Group recorded total liabilities of approximately RMB1,021.6 million and RMB958.7 million as at 31 December 2023 and 30 June 2024, respectively. The non-current liabilities of the Group as at 30 June 2024 amounted to approximately RMB95.0 million, comprised of (i) lease liabilities of approximately RMB75.0 million; (ii) deferred income tax liabilities of approximately RMB12.5 million; (iii) deferred revenue of approximately RMB6.5 million; and (iv) financial liabilities at fair value through profit or loss of approximately RMB1.0 million. As at 30 June 2024, the current liabilities of the Group amounted to approximately RMB863.7 million, which mainly comprised of (i) trade payables of approximately RMB289.8 million; (ii) accruals and other payables of approximately RMB290.8 million; (iii) contract liabilities of approximately RMB252.1 million; and (iv) lease liabilities of approximately RMB17.1 million.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As such, the consolidated net current assets and net assets of the Group as at 30 June 2024 amounted to approximately RMB111.2 million and RMB500.3 million respectively, which was slightly decreased by 0.7% and 1.3% from approximately RMB112.0 million and RMB506.9 million as at 31 December 2023 respectively, reflecting a relatively stable overall financial position of the Group.

2. Information on the Purchaser

The purchaser, Chongqing Dowell, is a company established in the PRC with limited liability and is principally engaged in business management consulting.

3. Information on the Vendor and the Target Company

3.1. Dima Group and Chengdu Dowell

Dima Group, one of the substantial shareholders of the Company, is principally engaged in (i) development and investment of residential and commercial properties in the PRC; and (ii) manufacturing of vehicles with various types of use.

The vendor, Chengdu Dowell, is a company established in the PRC with limited liability and is principally engaged in development of residential and commercial properties.

3.2. The Target Company

The Target Company is a company established in the PRC with limited liability and is principally engaged in business management and real estate consulting. The Target Company holds approximately 83.48% of ownership of the Property, and the remaining approximately 16.52% of the Property is held by Chengdu Guangming Optoelectronics Co., Ltd.⁸ (成都光明光電有限責任公司), a company principally engaged in manufacturing of instruments, which is indirectly wholly-owned by the State-owned Assets Supervision and Administration Commission of the State Council (國務院國有資產監督管理委員會). As at the Latest Practicable Date, the Property has a gross area of approximately 8,474.10 square metres, and was used as an elderly care centre.

Given the Target Company was established in September 2024, the financial information of the Target Company for previous financial years is not available.

The net asset value of the Target Company as at 18 November 2024 was approximately RMB59.5 million.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. Reasons for and benefits of the Equity Transfer

As stated in the Board Letter, the Target Company holds approximately 83.48% of ownership of the Property. The Property is currently leased to a subsidiary of the Company for the purposes of operating an elderly care centre. Such elderly care centre currently operates approximately 300 beds and generated approximately RMB9 million in revenue during the year ended 31 December 2023. We understand that the Group has expanded its business into elderly care services industry by acquiring a company engaged in this sector in the PRC, as disclosed in the Company’s announcement dated 19 April 2024.

China’s greying society

With the rapidly aging population in the PRC, the demand for medical care and elderly care services has significantly increased. Contrary to the common belief, the one-child policy was introduced in 1979, affecting those born in the 1980s and later. However, the cultural expectation for single children to care for their aging parents remains a challenge, as many are unable to provide the necessary care. Consequently, there is a growing reliance on the social elderly care system. The medical and elderly care market in the PRC has expanded rapidly, leading to the development of a comprehensive industry chain, various aspects of the elderly care sector, including planning, packaging, design and construction of elderly care facilities, along with the provision of elderly care products and services. Each component of this industry chain is experiencing rapid growth, reflecting the increasing need for structured elder care solutions.

According to the statistics from the National Bureau of Statistics, the population aged over 60 reached approximately 296.97 million in 2023, accounting for 21.1% of the total population, which was increased from approximately 280.04 million (representing 18.9% of the population) in 2022. Similarly, the population aged over 65 increased from approximately 200 million in 2021, representing 14.16% of the population, to approximately 216.76 million in 2023, accounting for 15.4% of the total population. This trend shows that there is a growing demographic shift towards an older population, reflecting a sustained increase in both the number and proportion of elderly residents year over year.

Policy support for the elderly care service

Under China’s 14th Five-Year Plan (2021-2025), the development of an efficient long-term care system is a government priority. The plan specifies major goals and tasks for the five years, including expanding the supply of elderly care services, improving the health support mechanism for the elderly, and advancing the innovative and integrated development of service models.

It lists nine major indicators, such as the number of elderly care beds and the ratio of nursing care beds in elderly care institutions, to mobilise society to actively respond to population ageing. China will step up institutional innovation and boost policy support and financial investment to enable the elderly to share in China’s development achievements.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In light of the above, the overall healthcare service market in China has witnessed a steady pace of development and expansion in recent years, with the total healthcare expenditure growing from RMB5,912.2 billion in 2018 to RMB8,484.7 billion in 2022 at a CAGR of 9.5%. Moreover, the total healthcare expenditure in China is forecasted to reach RMB11,826.9 billion in 2026 with a CAGR of 8.7% from 2022 to 2026, and further increase to RMB15,116.3 billion in 2030 with a CAGR of 6.3% from 2026 to 2030, according to Frost & Sullivan. The demand for healthcare services in China has been on the rise due to a combination of factors including, among others, a growing aging population as mentioned, the prevalence of chronic diseases, rising public health awareness and improved medical affordability. This trend highlights the increasing significance of the medical care and elderly care sectors, which are integral to the healthcare system. Given the ongoing demographic shift towards an aging population, these sectors are anticipated to experience substantial growth and heightened demand.

With the increasing occupancy rate of the Group's elderly care centres, the Group generated approximately 27.1 million from its comprehensive elderly care services for the six months ended 30 June 2024 according to the 2024 Interim Report, representing an increase of approximately 27.1% compared to approximately RMB21.3 million for the six months ended 30 June 2023.

In summary, the aforementioned trends regarding the aging population, government support policies, and the financial performance within the elderly care services sector indicate a promising prospect for elderly care services and justified why the Company intended to acquire the Target Company (which holds approximately 83.48% ownership of the Property) for its long term development.

Owning vs Renting

Regarding the reason why the Company decided to acquire the Target Company (which holds approximately 83.48% ownership of the Property) now instead of continuing rent as the tenancy will only expire on 31 March 2041, the reasons are as follows after our discussion with the Company:

(i) Building equity: Despite the coming years of rental cash outflow, the Company will still not own any equity interest in future. Considering the Company's confidence in the future prospects of elderly care services, along with a year-over-year revenue growth of approximately 27.1% in its elderly care services segment, an acquisition appears to be a reasonable decision. The acquisition of the Target Company (which holds approximately 83.48% ownership of the Property) will alleviate the Group's responsibility to pay a continuously increase amount of rent pursuant to the relevant tenancy agreement and enhance long-term profitability.

(ii) Flexibility: The ownership of the Property enable the Company to scale its operations more efficiently, with higher flexibility to make refurbishment and upgrade facilities to maintain competitiveness in long-term. Although the tenancy is up to 2041; however, it will eventually reach its conclusion. At that point, the Company may be required to relocate, a process that could be time-consuming and potentially disrupt the operations of the elderly care center. This is particularly concerning as the elderly residents at these facilities would need to be transported to the new location.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(iii) Interest income vs rental cost: The Group has been consistently achieved profit with an average annual profit after tax of RMB70M in the past five years. Taking into account of the very minimal (less than 1%) interest rate income in the PRC banks (cash inflow) comparing with the 7.5% market yield of Property (cash outflow), it is more value added to acquire the Property.

(iv) The Property is located in a prime area in Chengdu, which is adjacent to large commercial plazas and residential areas, and is considered to be a high quality asset with long-term investment value. It is considered that the potential capital appreciation in the Property (part of offsetting the inflation) would allow the Group to have investment returns in future.

In light of above, the Directors are of the view that, despite the entering into the Equity Transfer Agreement was not in the ordinary and usual course of business of the Group, the terms of the Equity Transfer Agreement and the transaction contemplated thereunder are on normal commercial terms after arm's length negotiations, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Taking into account the abovementioned reasons that highlight (i) the acquisition aligns with the Group's business strategic objectives; (ii) the acquisition enables the Group to maintain operational continuity for its elderly care services, mitigates the risks and costs associated with relocation, and secures long-term stability in the use of a prime asset; and (iii) the Property's potential for capital appreciation offers an opportunity for future financial returns, making this acquisition a prudent investment for the Group, we concur with the Directors that the Equity Transfer Agreement and the transaction contemplated thereunder is in the interests of the Company and the Shareholders as a whole.

5. The Equity Transfer Agreement

Set out below are the principal terms of the Equity Transfer Agreement.

5.1. Subject matter

Pursuant to the Equity Transfer Agreement, Chongqing Dowell (as purchaser) has conditionally agreed to acquire, and Chengdu Dowell (as vendor) has conditionally agreed to sell, the entire equity interests in the Target Company. As at the Latest Practicable Date and immediately prior to the completion of the Equity Transfer, the Target Company is wholly-owned by Chengdu Dowell, an indirect wholly-owned subsidiary of Dima.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Target Company was established by Chengdu Dowell. Accordingly, there was no original acquisition cost of all equity interests in the Target Company.

5.2. Consideration

The Consideration for the transaction contemplated under the Equity Transfer Agreement is RMB59.5 million, and shall be payable in three tranches in the following manner.

(1) 10% of the Consideration, i.e. RMB5.95 million, shall be payable within five business days from the date of the Equity Transfer Agreement as a deposit and partial payment (the "Deposit");

(2) 40% of the Consideration, i.e. RMB23.8 million, shall be payable within five business days of:

(a) the fulfilment and/or waiver (if applicable) of all of the conditions precedent as set out in the paragraph headed "The Equity Transfer Agreement – Conditions precedent" below; and

(b) completion of the relevant industrial and commercial registration modification formalities (工商變更登記手續) (and the Target Company obtaining a new business license renewed by the industrial and commercial registration authority (工商登記機關));

(3) the remaining balance of the Consideration, i.e. RMB29.75 million, shall be payable within five days after completion of the transaction contemplated under the Equity Transfer Agreement.

The Consideration of RMB59.5 million was determined after arm's length negotiations between the parties to the Equity Transfer Agreement on normal commercial terms, taking into consideration of, among other things, (i) the net asset value of the Target Company; (ii) the preliminary valuation prepared by an independent valuer on the Property as at 18 November 2024, indicating the appraised value of the Property being RMB71.6 million, based on market approach; and (iii) other reasons for and benefits of the Equity Transfer Agreement as set out in the section headed "Reasons for and benefits of the Equity Transfer" in the Board Letter.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

5.3. Conditions precedent

The Equity Transfer Agreement is conditional upon:

(b) the Company obtaining the approval from the Independent Shareholders of the Equity Transfer Agreement and the transaction contemplated thereunder at the EGM;

(d) Chengdu Dowell and the Target Company not breaching any terms under the Equity Transfer Agreement; and

(e) there being no material adverse change in respect of information regarding the Target Company as disclosed by Chengdu Dowell in the Equity Transfer Agreement.

Save for the conditions precedent c, d and e mentioned above, as at the Latest Practicable Date, none of the other conditions precedent have been fulfilled.

5.4. Completion

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Pursuant to the Equity Transfer Agreement, completion shall be deemed to take place upon:

(a) completion of all industrial and commercial registration modification formalities (工商變更登記手續) in relation to the Equity Transfer;

(b) (if required) Chengdu Dowell and the Target Company having completed the relevant alteration, repealing and remodelling of the company seal of the Target Company in accordance with the requirements of Chongqing Dowell, and such remodelled seal has been activated after the relevant alteration and repealing procedures have been completed;

(d) any other matters in relation to completion of the Equity Transfer.

6. Assessment of the Consideration

As at the Latest Practicable Date, the Target Company holds approximately 83.48% of ownership of the Property. In assessing the fairness and reasonableness of the Consideration, we have focused on analysing the valuation of the Property and the Valuation Report.

We have performed the works included (i) assessment of the Valuer’s experiences in valuing properties in the PRC similar to the Properties; (ii) obtaining information on the Valuer’s track records on other property valuations; (iii) inquiry on the Valuer’s current and prior relationship with the Group and other parties to the Equity Transfer Agreement; (iv) review of the terms of the Valuer’s engagement, in particular its scope of work, for the assessment of the Valuation Report; and (v) discussion with the Valuer regarding the bases, methodology and assumptions adopted in the Valuation Report.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

6.1. Valuer

We understand that Mr. Nick C. L. Kung (“Mr. Kung”), the director of Peak Vision Appraisals Limited (the “Valuer”) and the signor of the Valuation Report, among others, is a RICS Registered Valuer and a Registered Professional Surveyor who has over 20 years of experience in handling business valuation in Hong Kong and the PRC. We have also obtained information on the Valuer’s track records on other property valuations and noted that the Valuer had been the valuer for a wide range of companies in Hong Kong and PRC. In addition to the Valuer’s firm wide experience and expertise, we have obtained relevant qualifications and credentials of the specific team members involved in this valuation exercise. As such, we are of the view that the Valuer and Mr. Kung are qualified, experienced and competent in performing property valuations and providing a reliable opinion in respect of the valuation of the Property.

We have also enquired with the Valuer as to its independence from the Group and the parties to the Equity Transfer Agreement and were given to understand that the Valuer is an independent third party of the Group and its connected persons. The Valuer also confirmed to us that it was not aware of any relationship or interest between itself, the vendor side (Chengdu Dowell and Dima) and the purchaser side (the Group) or any other parties that would reasonably be considered to affect its independence to act as an independent valuer for the Company. The Valuer confirmed to us that apart from normal professional fees payable to it in connection with their engagement for the valuation, they had no other engagement with the Company.

Furthermore, we note from the engagement letter entered into between the Company and the Valuer that, the scope of work was appropriate for the Valuer to form the opinion required to be given and there were no limitations on the scope of work which might adversely impact the degree of assurance given by the Valuer in the Valuation Report.

6.2. Valuation standards and basis

We have reviewed the Valuation Report and understand that it was prepared in accordance with the HKIS Valuation Standards (2020 Edition) published by The Hong Kong Institute of Surveyors (the “HKIS”) and The International Valuation Standards (Effective 31 January 2022) published by the International Valuation Standards Council, and all the requirements set out in Chapter 5 of the Listing Rules issued by The Stock Exchange of Hong Kong Limited.

The valuation has been undertaken on the basis of market value, which is defined as “the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”. Since no unusual matters had come to our attention that led us to believe that the Valuation Report was not prepared on a reasonable basis, we believe that the valuation fairly represents the market value of the Property and forms a fair and reasonable basis for our further assessment on the Consideration.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

6.3. Valuation methodology

The Valuation Report indicates that the Valuer employed the investment method to assess the value of the Property. This approach estimates the value by capitalization the rental income of the Property. The market rent is derived from the rental of similar assets for which rental data is accessible. Adjustments were made to account for differences in various characteristics between the subject property and the rental comparables, leading to the determination of the adopted unit market rent.

According to our discussion with the Valuer, the investment method is similar to income approach, which is an approach focusing on the economic benefits generated by the income producing capability of a business entity. The underlying theory of the income approach is that the value of a business entity can be measured by the present worth of the economic benefits to be received over the life of the business entity. In this instance, since we are not assessing a business entity and there is no income projection involved, the investment method is employed. Investment method approach capitalizes on the rental income while taking into account the reversionary potential of the property at a suitable capitalization rate. Considering that the property produces rental income through leasing agreements and that pertinent rental comparables are easily accessible, we concur with the Valuer's view that the investment method is the most suitable approach for valuing the Property.

We noted that Valuer has adopted the average unit rent of approximately RMB52.76 per square meter and the market yield of the Property is about 7.5%. The market value of the Property as at 18 November 2024 (the "Valuation Date") is approximately RMB71.6 million. 83.48% interest in the Property attributable to the Target Company is RMB59.8 million.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Below are the details of the comparable transactions for the valuation of the Property ("Comparable Properties"):

No.	Location	Property type	Date of transaction	Unit rent (approximate) (RMB/sq.m./month)	Adjusted unit rent (approximate) (RMB/sq.m./month)
1	Level 7, Building No. 3, Runxin Apartment, No. 2 Jianshe Lane, Chenghua District	Commercial	18 November 2024	55.98	52.83
2	Level 4 and 7, Building No. 3, Runxin Apartment, No. 2 Jianshe Lane, Chenghua District	Commercial	30 October 2024	51.43	54.21
3	Level 3 to 4, Shengjin Building, No. 576, Cuijiadian Road, Chenghua District	Commercial	29 October 2024	39.00	50.57
4	Level 1 to 7, No. 45, Shuanglin Road, Xinhong Road Street, Chenghua District Average Assessed value of the Property (8,474.10 square meter)	Commercial	22 September 2024	40.00	53.42
					52.76 RMB71.6 million

Note:
Adjustments are made by the Valuer with reference to, among other things, to level, layout, time, size and location of the Comparable Properties.

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We have conducted a thorough examination of the lists of Comparable Properties and observed that the selection criteria for these properties were as follows: (i) retail units located in the same district of the Property, in Chenghua District, Chengdu City; and (ii) transactions that occurred within three months from the Valuation Date. We are of the view that the criteria of the Comparable Properties are fair and reasonable as they ensure a close resemblance to the Property in terms of location and recent market activity. We understand that the Valuer made adjustments based on its professional judgement and experience, considering various factors such as differences in transaction time, location, layout, level and size, among other things. We have reviewed these adjustments and discussed with the Valuer regarding the rationale and methodology behind them. We noted that certain comparable properties experienced relatively high adjustment rates. After further discussion with the Valuer, we learned that these adjustments were influenced by the following factors: (i) location adjustments, which account for the less favorable location of the comparable properties; and (ii) adjustments for property layout, condition and decoration, which take into account the physical state of the Comparable Properties, as well as the absence of decorations or improvements. From our analysis, the general principle of adjustment was that if the Property was superior to the Comparable Properties, an upward adjustment was applied, and vice versa.

We note that the Valuation is mainly based on the average unit rent of approximately RMB52.76 per square meter and the market yield of the Property is about 7.5%.

In the course of our independent work done, we performed a desktop search and identified seven comparable properties ("Rental Comparables") relevant to the subject Property from publicly accessible sources. The selection of these Rental Comparables was based on three criteria: (i) active rented price within six months prior to the Latest Practicable Date; (ii) similar nature of use of the Property (commercial buildings); and (iii) location within the same district, allowing for a thorough comparison with the adjusted unit rents provided by the Valuer. The unit rents for the Rental Comparables range from RMB44.9 per sq.m./month to RMB66.7 per sq.m./month, with an average of RMB52.3 per sq.m./month. It is noteworthy that the average unit rent of approximately RMB52.76 per sq.m./month, as adopted by the Valuer, falls within this range and close to the average of the Rental Comparables. We found that these adjustments align with the market practice and hence, consider them reasonable in deriving the valuation of the Property.

— 31 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In respect of the market yield adopted in the valuation the Property, we have discussed with the Valuer and obtained and examined the pertinent details for analysis of the market yield. We understand that the market yield adopted in the Property valuation is derived from the Valuer's assessment of the yields from properties of a similar usage type. The market yield is estimated with reference to the yields generally expected by the market for comparable properties of similar usage type, which implicitly reflect the type and quality of the properties, expectations of the potential future rental growth, capital appreciation and associated risk factors. Further, we have conducted independent research in the public domain to access the fairness and reasonableness of the adopted market yield. In the research, we identified seven comparables with a similar in usage type to the property ("Market Yield Comparables"). The yields from the Market Yield Comparables ranged from 6.43% to 8.42%, averaging 7.53%. Notably, the market yield of 7.5% that was adopted for the valuation of the Property aligns with this range. Based on our analysis and the alignment with the yields from Market Yield Comparables, we consider that the market yield adopted is reasonable and in line with the market norm having regard to the analysed yields of transactions of the relevant usage type.

6.4. Valuation assumptions

According to the Valuation Report, the valuation of the Property was made on the assumption that the owner sells the Property on the market in its existing states without the benefit of deferred terms contracts, leaseback, joint ventures, management agreements or any similar arrangement which would serve to affect the value of the Property. No forced sale situation in any manner is assumed in the valuation. The Valuer has not considered any option or right of pre-emption which would concern or affect the sale of the Property. In addition, the Valuer assumed that no allowance for any charges, mortgages or amounts owing on the property interests nor for any expenses or taxation may be incurred in effecting a sale. Unless otherwise stated, it is also assumed that the Property is free of encumbrances, restrictions, outgoings of an onerous nature and any third party rights that could affect its value in the Valuation Report. In this regard, we noted from the Valuer that these assumptions are commonly adopted in the valuation of properties. Given that we consider it objective and appropriate to appraise the Property the same way as other similar properties on the open market, and that nothing material has come to our attention, we are of the view that these valuation assumptions are fair and reasonable.

6.5. Section conclusion

Taking into account the above, we are of the view that the valuation of 100% equity in the Property at approximately RMB71.6 million as at 18 November 2024 is fair and reasonable. Accordingly, given that the Consideration of RMB59.5 million represents a discount to the value of the 83.48% interest in the Property attributable to the Target Company, which is approximately RMB59.8 million as assessed in the Valuation Report as at 18 November 2024, we are of the view that the Consideration is fair and reasonable.

— 32 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

7. Financial effects of the Transaction

Upon completion of the Equity Transfer, the Company will hold approximately 100% of the issued share capital of the Target Company. The Target Company will become an indirect wholly-owned subsidiary of the Company and the financial results of the Target Company will be consolidated into the consolidated financial statements of the Group.

As the Consideration of RMB59.5 million will be funded by the Group’s internal resources, the Group’s cash and bank balances are expected to decrease by the same amount which represents approximately 44.5% of the Group’s cash and cash equivalents balance as at 30 June 2024 of approximately RMB133.8 million. Further, it was noted that the Group had net cash (being cash and bank balances less total borrowings) of approximately RMB127.3 million and hence a zero net gearing ratio (being net debt divided by total equity) as at 30 June 2024. Therefore, it is expected that the Equity Transfer would not have any material adverse impact on the working capital and gearing ratio of the Group upon its completion.

RECOMMENDATION

Having considered the principal factors and reasons referred set above, we are of the opinion that, the entering into of the Equity Transfer Agreement and the transaction contemplated thereunder are on normal commercial terms, are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole. We further consider that although entering into the Equity Transfer Agreement is not in the ordinary and usual course of business of the Group, the acquisition of the Target Company is nevertheless in the interests of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the resolution(s) approving the Equity Transfer Agreement and the transaction contemplated thereunder at the EGM. We also recommend the Independent Shareholders to vote in favour of the resolution(s) relating to the Equity Transfer Agreement and the transaction contemplated thereunder at the EGM.

Yours faithfully,

For and on behalf of

Pelican Financial Limited

Charles Li*

Managing Director

Charles Li is a responsible person registered under the SFO to carry out Type 6 (advising on corporate finance) regulated activity for Pelican Financial Limited and has over 30 years of experience in the accounting and financial services industry.
For identification purposes only

— 33 —

APPENDIX I

VALUATION REPORT

The following is the text of a letter and property valuation report prepared for the purpose of incorporation in this circular received from Peak Vision Appraisals Limited, an independent property valuer, in connection with its opinion of market value of the Property as at 18 November 2024.

Peak Vision Appraisals Limited

Unit 702, 7th Floor, Capital Centre
No. 151 Gloucester Road
Wanchai, Hong Kong
www.peakval.com
Tel (852) 2187 2238
Fax (852) 2187 2239

6 January 2025

The Board of Directors
Dowell Service Group Co. Limited
Room 206, B1 Floor
No. 108 Baihe Road
Nanping Town, Nan’an District
Chongqing
The People’s Republic of China

Dear Sirs,

Re: Property interest of the whole of Level 3 to Level 11 of Building No. 1, No. 4 Xinhong Branch Road North, Chenghua District, Chengdu City, Sichuan Province, the People’s Republic of China

In accordance with the instruction from Dowell Service Group Co. Limited (the “Company”, together with its subsidiaries, the “Group”) for us to value the captioned property located in the People’s Republic of China (the “PRC”), we confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for providing you with our opinion of value of the property as at 18 November 2024 (the “Valuation Date”) for public documentation purpose.

This letter, forming part of our valuation report, identifies the property being valued, explains the basis and methodology of our valuation and lists out the assumptions and title investigations, which we have made in the course of our valuation, as well as the limiting conditions.

Our valuation is our opinion of market value which is defined to mean “the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”.

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APPENDIX I

VALUATION REPORT

As advised by the management of the Company, the tenancy agreement entered into between Chengdu Dowell Haina Zhiye Co., Ltd. (成都東原海納置業有限公司) (a connected party of the Group, "Chengdu Dowell"), and Chengdu Xuancheng Elderly Care Service Co., Ltd. (成都眩成養老服務有限公司) ("Chengdu Xuancheng"), now known as Chengdu Evergreen Xinhong Elderly Care Service Co., Ltd. (成都常青社新鴻養老服務有限公司) (a non-wholly owned subsidiary of the Company, "Chengdu Evergreen"), stipulated that start from 2026 the rental will be increased by 5% each year over the next few years until 2041. According to the management of the Company, this agreement is no longer beneficial. Therefore, by acquiring the property, the Company can effectively cancel the existing tenancy agreement, which will be advantageous in the long run. As such, the management has instructed us to adopt the special assumption that the Group will cancel the tenancy agreement. Given these circumstances, we consider the above special assumption to be reasonable and in accordance with the HKIS.

In valuing the property, we have adopted the investment method by taking into account the current rent(s) passing and the reversionary income potential of the property or, where appropriate, the direct comparison method assuming the property is capable of being sold in its existing state and by making reference to comparable sales evidence as available in the relevant market.

Our valuation has been made on the assumption that the owner sells the property on the open market in its existing state without the benefit of deferred terms contracts, leasebacks, joint ventures, management agreements or any similar arrangements which could serve to affect the value of the property. No forced sale situation in any manner is assumed in our valuation. In addition, we have not considered any option or right of pre-emption which would concern or affect the sale of the property.

No allowance has been made in our valuation for any charges, mortgages or amounts owing on the property nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the property is free from encumbrances, restrictions and outgoings of an onerous nature which could affect its value.

We have been provided by the Group with copies of documents in relation to the title to the property located in the PRC. We have not examined the original documents to verify the ownership and to ascertain the existence of any amendments which do not appear on the copies handed to us. In the course of our valuation, we have relied on the advice given by the Group and the legal opinions prepared by Ganus Law Firm, the Group's legal adviser on the PRC law (the "PRC Legal Adviser"), regarding the title to the property.

The property was inspected during October 2024 by Mr. Steven T. M. Wong*, a senior manager of our firm with 9 years of experience in the inspection of properties in Hong Kong and the PRC. We have inspected the exterior and, where possible, the interior of the property. In the course of our inspections, we did not note any serious defects. However, no structural survey has been made and we are therefore unable to report whether the property is free from rot, infestation or any other defects. No tests were carried out on any of the services.

We have not carried out on-site measurements to verify the correctness of the site and floor areas of the property but have assumed that the site and floor areas shown on the documents and floor plans available to us are correct. Dimensions, measurements and areas included in the attached property valuation report are based on information contained in the documents provided to us and are, therefore, only approximations.

Mr. Steven T. M. Wong is a member of CFA Institute and a member of the Royal Institution of Chartered Surveyors and has about 9 years of experience in the inspection of properties in Hong Kong and the PRC.

— I-2 —

APPENDIX I

VALUATION REPORT

We have relied to a considerable extent on the information provided by the Group and the PRC Legal Adviser regarding the title to the property, we have accepted advice on such matters as planning approvals, statutory notices, easements, tenures, particulars of occupancy, tenancy agreements, site and floor areas and all other relevant materials regarding the property.

We have had no reason to doubt the truth and accuracy of the information provided to us by the Group. We have also been advised by the Group that no material facts have been omitted from the information provided. We consider that we have been provided with sufficient information to reach an informed view, and we have no reason to suspect that any material information has been withheld. The management of the Company has reviewed and confirmed the factual content and has agreed to the assumptions and limiting conditions of this report.

In valuing the property, we have complied with all the requirements set out in Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the HKIS Valuation Standards 2020 published by the Hong Kong Institute of Surveyors (the "HKIS") and the International Valuation Standards (Effective 31 January 2022) published by the International Valuation Standards Council, where applicable, and under generally accepted valuation procedures and practices.

For the subject valuation, Peak Vision Appraisals Limited does not yet adopt a rotation policy, and instead, our valuation will be periodically reviewed by another member of the HKIS.

The proportion of total fees payable by the Company during the preceding year relative to the total fee income of Peak Vision Appraisals Limited is minimal.

Unless otherwise stated, all monetary amounts stated in this report are in Renminbi (RMB).

We hereby confirm that we have no material connection or involvement with the Group, the property or the value reported herein and that we are in a position to provide an objective and unbiased valuation.

Our property valuation report is enclosed herewith.

Yours faithfully,

For and on behalf of

Peak Vision Appraisals Limited

Nick C. L. Kung

MRICS, MHKIS, R.P.S. (GP),

RICS Registered Valuer, MCIREA

Director

Note: Mr. Nick C. L. Kung is a RICS Registered Valuer and a Registered Professional Surveyor (General Practice) who has over 20 years of experience in the valuation of properties in Hong Kong and the PRC.

APPENDIX I

VALUATION REPORT

Property Valuation Report

Property	Description and tenure	Particulars of occupancy	Market value in existing state as at 18 November 2024
The whole of Level 3 to Level 11 of Building No. 1, No. 4 Xinhong Branch Road North, Chenghua District, Chengdu City, Sichuan Province, the PRC	Building No. 1 (the “Building”), completed in about 2020, comprises an 11-storey commercial building, built over a 1-level basement carpark erected on a parcel of land with a registered site area of approximately 3,766.11 sq.m. It is located on the southwestern corner of the junction of Xinhong Branch Road North and Hongguang Road within Chenghua District, Chengdu City.	As advised by the Group, as at the Valuation Date, the property was subject to two tenancies yielding a total monthly rental of approximately RMB413,906 exclusive of management fees and all other outgoings, with the latest tenancy expiring on 31 March 2041. (See Notes iv) to viii) below)	RMB71,600,000 (RENMINBI SEVENTY ONE MILLION SIX HUNDRED THOUSAND ONLY) (83.48% interest attributable to Chengdu Dongyuhong: Rounded to RMB59,800,000 (RENMINBI FIFTY NINE MILLION EIGHT HUNDRED THOUSAND ONLY) (See Note i) below)
	The property comprises the whole of level 3 to level 11 of the Building, having a total gross floor area of approximately 8,474.10 sq.m. The land use rights of the property have been granted for a term expiring on 24 June 2058 for accommodation and catering uses.

Notes:

i) As advised by the management of the Company, the tenancy agreement entered into between Chengdu Dowell and Chengdu Xuancheng (now known as Chengdu Evergreen), stipulated that start from 2026 the rental will be increased by 5% each year over the next few years until 2041. According to the management of the Company, this agreement is no longer beneficial. Therefore, by acquiring the property, the Company can effectively cancel the existing tenancy agreement, which will be advantageous in the long run. As such, the management has instructed us to adopt the special assumption that the Group will cancel the tenancy agreement.

— I-4 —

APPENDIX I

VALUATION REPORT

ii) Pursuant to the Real Estate Title Certificate No. Chuan (2024) Cheng Du Shi Bu Dong Chan Quan Di 0334684 issued by Chengdu City Planning and Natural Resources Bureau dated 18 November 2024, 83.48% interest of the building ownership and land use rights of the property is vested in Chengdu Dongyuhong Commercial Management Co., Ltd. (成都東煙宏商業管理有限公司) (“Chengdu Dongyuhong”). The building ownership of the property, having a total gross floor area of approximately 8,474.10 sq.m. and the land use rights of the property with a site area of approximately 1,130.56 sq.m. are apportioned from the land use rights of the Building, having a site area of approximately 3,766.11 sq.m. have been granted for a term expiring on 24 June 2058 for accommodation and catering uses.

iii) Pursuant to the Real Estate Title Certificate No. Chuan (2022) Cheng Du Shi Bu Dong Chan Quan Di 0000691 issued by Chengdu City Planning and Natural Resources Bureau dated 28 February 2022, 16.52% interest of the building ownership and land use rights of the property is vested in Chengdu Guangming Optoelectronics Co., Ltd. (成都光明光電有限責任公司) (“Chengdu Guangming”). The building ownership of the property, having a total gross floor area of approximately 8,474.10 sq.m. and the land use rights of the property with a site area of approximately 1,130.56 sq.m. are apportioned from the land use rights of the Building, having a site area of approximately 3,766.11 sq.m. have been granted for a term expiring on 24 June 2058 for accommodation and catering uses.

iv) Pursuant to the tenancy agreement entered into between Chengdu Dowell and Chengdu Xuancheng (now known as Chengdu Evergreen), portion of level 4 and the whole of level 5 to level 11 of the property with a total gross floor area of approximately 7,074.47 sq.m. are subject to a tenancy for a term of 20 years from 1 April 2021 to 31 March 2041 at a monthly unit rent of RMB16.67 per sq.m. for year 1, RMB30.00 per sq.m. for year 2, RMB35.00 per sq.m. for year 3, RMB50.00 per sq.m. for year 4 to 5 and thereafter 5% increase for every year (the above rentals are exclusive of management fees and utilities).

v) Pursuant to the tenancy agreement and supplementary agreement (一) entered into between Chengdu Guangming and Chengdu Xuancheng dated 10 January 2020 and 31 March 2021 respectively, level 2 of the Building (not part of the property) and the whole of level 3 and the remaining portion of level 4 of the property with a total gross floor area of approximately 3,278.00 sq.m. are subject to a tenancy for a term of 5 years from 1 April 2021 to 31 March 2026 at a monthly unit rent of RMB51.50 per sq.m. for year 1 and thereafter 3% increase for every year (the above rentals are exclusive of management fees and utilities).

vi) Pursuant to the supplementary agreement (二) entered into between Chengdu Guangming and Chengdu Evergreen dated 21 September 2023, Chengdu Guangming agrees to waive three month rental of Chengdu Evergreen for the period from 1 October 2022 to 31 December 2022.

vii) Pursuant to the supplementary agreement (三) entered into between Chengdu Guangming and Chengdu Evergreen dated 21 September 2023, both parties agree to adjust downward the monthly unit rent during the period from 1 October 2023 to 31 December 2024 to RMB43.00 per sq.m.

viii) Pursuant to the agreement for change of contractual party (the “Agreement For Change of Contractual Party”) entered into among Chengdu Dowell, Chengdu Evergreen and Chengdu Dongyuhong dated 18 November 2024, from the effective date of this agreement (i.e. 18 November 2024), the lessor (Chengdu Dowell) of the original tenancy agreement (see note iv) has been changed to Chengdu Dongyuhong, and all the rights and obligations of the original tenancy agreement have been transferred to Chengdu Dongyuhong. Chengdu Dongyuhong shall continue fulfilling the obligations and terms set forth in the original tenancy agreement.

ix) We have been provided with a legal opinion on the property by the PRC Legal Adviser, which contains, inter alia, the following information which has been translated from Chinese. If there are any inconsistencies, the Chinese version shall prevail:

(a) The land premium and relevant taxes for the land use rights of the Building have been fully settled;

(b) 83.48% interest of the land use rights and building ownership of the property are legally held by Chengdu Dongyuhong and Chengdu Dongyuhong can occupy, utilize and dispose of 83.48% interest of the property in accordance with the law;

— I-5 —

APPENDIX I

VALUATION REPORT

(c) The Agreement For Change of Contractual Party is authentic, legal and valid, and Chengdu Dongyuhong is entitled to collect the rental income of the property from Chengdu Evergreen in accordance with the law;

(d) There are no property rights defects such as residence rights registration, notice registration, mortgage registration, seizure registration, etc. that may affect Chengdu Dongyuhong’s actual rights to occupy, utilize and dispose of the property;

(e) There is no potential risk of co-owners or tenants of the property asserting pre-emptive purchase rights.

(f) The portion of level 4 and the whole of level 5 to level 11 of the property is subject to a tenancy agreement, with the lessee being Chengdu Evergreen and lease term expiring on 31 March 2041. The lessor (Chengdu Dowell) of the tenancy agreement has been changed to Chengdu Dongyuhong;

(g) According to Article 538 of the Civil Code of the People's Republic of China, if a debtor disposes of their property rights without compensation or maliciously extends the performance period of their matured debt, thereby affecting the realization of the creditor's rights, the creditor may request the people's court to revoke the debtor's actions. According to Article 539 of the Civil Code of the People's Republic of China, if a debtor transfers property at an obviously unreasonable low price, purchases property at an obviously unreasonable high price, or provides a guarantee for another person's debt, thereby affecting the realization of the creditor's rights, and the counterparty of the debtor knew or should have known of this situation, the creditor may request the people's court to revoke the debtor's actions. If Chengdu Dowell transfers the equity interest of Chengdu Dongyuhong to a third party, Chongqing Dowell Enterprise Management Consultation Co., Ltd. (“Chongqing Dowell”), with Nil consideration or at an unreasonable low price, the creditors of Chengdu Dowell have the right to file for a revocation lawsuit, requesting the annulment of the transfer of equity interest of Chengdu Dowell. This would result in the legal consequences of reversing the equity transaction, meaning that the third party, Chongqing Dowell, would not be able to acquire 100% equity interest of Chengdu Dongyuhong.

x) In valuing the property, we have adopted the investment method. The investment method, also known as “term and reversion” method, estimates the value of the property by capitalizing the rental income on a fully leased basis having regard to the current passing rental income. In this method, the total rental income is divided into the term rental income and the reversionary rental income. The term value involves the capitalization of the current rental income over the existing lease term. The reversionary value is taken to be current market rental income upon the expiry of the lease and is capitalized on a fully leased basis and is discounted back to the valuation date. The investment method provides an indication of value by comparing the asset with identical or similar assets for which rental information is available. Adjustments were made to reflect the differences in various aspects between the subject property and the rental comparables to arrive at the adopted unit market rent of the property.

xi) In our valuation, we have adopted an average unit market rent of approximately RMB52.76 per sq.m. for the property. The term yield of the property is about 7.25% and the market yield of the property is about 7.5%.

In our valuation, we have made reference to rental comparables in the vicinity, i.e. rental comparables in Chenghua District, Chengdu City. These rental comparables are properties with the same use and transacted within 3 months* from the Valuation Date, which are deemed sufficient, appropriate and reasonable to derive a reliable opinion of value of the property as at the Valuation Date. The rental comparables are about RMB39.00 to RMB55.98 per sq.m./month for commercial properties. The unit rent adopted by us is consistent with the said comparable references after due adjustments. Due adjustments to those rental comparables have been made to reflect factors including but not limited to level, layout, time, size and location in arriving at our opinion of value.

Generally, comparables that are closer to the Valuation Date offer a more accurate reflection of market conditions as at the Valuation Date, and the time frame of comparables depends on the availability of relevant comparables. Typically, we incorporate more than 3 comparables in our valuations whenever possible. In the course of our valuation, given that transactions occurred within 3 months from the Valuation Date are sufficient to derive an objective and reliable opinion of value, we deemed the 3-month time frame to be reasonable.

— I-6 —

APPENDIX I

VALUATION REPORT

In our valuation, the rental comparables adopted for the property are exhaustive based on the selection criteria. We consider these comparables are located in the vicinity and are of the same uses, and thus are representative and comparable to the property. The details are as follows:

Comparable	1	2	3
Property Address	Building No. 3, Runxin Apartment, No. 2 Jianshe Lane, Chenghua District	Building No. 3, Runxin Apartment, No. 2 Jianshe Lane, Chenghua District	Shengjin Building, No. 576, Cuijiadian Road, Chenghua District
Level	7	4 and 7	3 to 4
Use	Commercial	Commercial	Commercial
Approximate Gross Floor Area (sq.m.)	1,120	3,500	2,400
Monthly Rental (RMB)	62,700	180,000	93,600
Unit Rent (RMB/sq.m./month)	55.98	51.43	39.00
Date	18 November 2024	30 October 2024	29 October 2024
Adjustments
Time	Similar with the property	Similar with the property	Similar with the property
Location	Superior to the property	Superior to the property	Inferior to the property
Level	Inferior to the property	Inferior to the property	Inferior to the property
Size	Superior to the property	Superior to the property	Superior to the property
Layout and condition	Inferior to the property	Inferior to the property	Inferior to the property
Comparable	4
Property Address	No. 45, Shuanglin Road, Xinhong Road Street, Chenghua District
Level	1 to 7
Use	Commercial
Approximate Gross Floor Area (sq.m.)	5,219
Monthly Rental (RMB)	208,760
Unit Rent (RMB/sq.m./month)	40
Date	22 September 2024
Adjustments
Time	Similar with the property
Location	Inferior to the property
Level	Inferior to the property
Size	Superior to the property
Layout and condition	Inferior to the property

— I-7 —

APPENDIX I

VALUATION REPORT

xii) Base on the above analysis, our calculation of the market value of the property is showed as follows:

Approximate

| Market value of the portion of level 4 and whole of level 5 to level 11
of the property | |
| --- | --- |
| Market annual rental | RMB4,529,200 |
| Market yield | 7.50% |
| Market value | RMB60,389,300 |
| Market value (A) rounded: (See Note 1 below) | RMB60,400,000 |
| Market value of the whole of level 3 and the remaining portion of level 4
of the property | |
| Term 1 (18 November 2024 to 31 December 2024) total rental | RMB78,100 |
| Term 1 value (present value @7.25%) (B) (See Note 2 below) | RMB75,100 |
| Term 2 (1 Jan 2025 to 31 March 2025) total rental | RMB211,500 |
| Term 2 value (present value @7.25%) (C) (See Note 2 below) | RMB200,700 |
| Term 3 (1 April 2025 to 31 March 2026) total rental | RMB890,900 |
| Term 3 value (present value @7.25%) (D) (See Note 2 below) | RMB809,700 |
| Market annual rental | RMB835,700 |
| Market yield | 7.50% |
| Reversion value (present value @7.50%) (E) | RMB10,095,300 |
| Market value (F=B+C+D+E) | RMB11,180,800 |
| Market value (F) rounded: | RMB11,200,000 |

Market value of the property

Market Value of the property (A+F) (See Note 3 below): RMB71,600,000

Note 1 As instructed by the Company, we have performed our valuation based on the special assumption (see note i) above) that the tenancy agreement of the portion of level 4 and the whole of level 5 to level 11 of the property has been disregarded and have valued the property on vacant possession basis.

Note 2 The whole of level 3 and the remaining portion of level 4 was under supplementary agreement (—) and supplementary agreement (三) (see notes v) and vii) above). The term value is simply the present value of rental to be derived from the abovementioned two supplementary agreements.

Note 3 For the portion of level 4 and the whole of level 5 to level 11 of the property, based on the special assumption that the property was vacant as at the Valuation Date, the market value of this portion of the property is directly derived from the market annual rental and market yield. As for the whole of level 3 and the remaining portion of level 4 of the property, since this portion of the property is subject to valid tenancy agreements, we first need to assess the term value. This involves calculating the value derived from the tenancy agreements (based on the rental income generated from the tenancy agreements and discounted back to present value), and then estimating the reversion value after the expiry of the tenancy agreements. As the reversion value is a future value (upon expiry of the tenancy agreements), it must be discounted to the present value.

— I-8 —

APPENDIX II

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 Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors' and chief executives' interests in the Company or its associated corporations

Save as disclosed below, as at the Latest Practicable Date, no Directors or chief executive of the Company had any interests and short positions in the H Shares, underlying H Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO or required, pursuant to section 352 of the SFO, to be entered in the register referred to therein or required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by the Directors (the "Model Code") set out in Appendix C3 to the Listing Rules:

(i) Long positions in Shares and underlying Shares

Name of Shareholder	Capacity/ Nature of interest	Number of H Shares held	Approximate percentage of issued share capital of the Company as at the Latest Practicable Date (Note 1)
Fan Dong	Interest in a controlled corporation	4,990,000 (Note 2)	7.45%

Notes:

The calculation is based on 66,990,867 H Shares in issue as at the Latest Practicable Date.
Mr. Fan Dong is interested in approximately 52.74% of the equity interest in Tianjin Shengyihe Management Consulting Partnership Enterprise (Limited Partnership)* (天津盛益合企業管理諮詢合夥企業(有限合夥)) ("Tianjin Partnership") and is therefore deemed to be interested in all H Shares held by Tianjin Partnership by virtue of the SFO.

— II-1 —

APPENDIX II

GENERAL INFORMATION

(ii) Interest in Tianjin Partnership

Name of Director	Capacity/ Nature of interest	Equity interest	Approximate percentage of the equity holding as at the Latest Practicable Date
Fan Dong	Beneficial owner	RMB1.05 million	52.74%

(b) Substantial Shareholders and other persons' interests in H Shares and underlying H Shares

As at the Latest Practicable Date, substantial Shareholders and other persons (other than Directors or chief executive of the Company) who had interests or short positions in the H Shares or underlying H Shares which would fall to be disclosed to the Company 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 under Section 336 of the SFO were as follow:

Long positions in Shares and underlying Shares

Name of Shareholder	Capacity/ Nature of interest	Number of Shares held	Approximate percentage of issued share capital of the Company as at the Latest Practicable Date (Note 2)
Tianjin Chengfang	Beneficial owner	13,461,643 (L)	20.09%
Chongqing Dima Ruisheng Co. Ltd.*
(重慶迪馬睿升實業有限公司) (“Dima Ruisheng”)	Interest in a controlled corporation (Note 3)	13,461,643 (L)	20.09%
Dima	Interest in a controlled corporation (Note 3)	13,461,643 (L)	20.09%

— II-2 —

APPENDIX II

GENERAL INFORMATION

Name of Shareholder	Capacity/Nature of interest	Number of Shares held	Approximate percentage of issued share capital of the Company as at the Latest Practicable Date (Note 2)
Chongqing Doyen Holdings Group Co., Ltd.* (重慶東銀控股集團有限公司) (“Chongqing Doyen”)	Interest in a controlled corporation (Note 3)	13,461,643 (L)	20.09%
Mr. Lo	Interest in a controlled corporation (Note 3)	13,461,643 (L)	20.09%
Ms. Chiu	Interest of spouse (Note 4)	13,461,643 (L)	20.09%
Chongqing Chaofenglian Materials Co., Ltd.* (重慶潮豐聯物資有限公司) (“Chongqing Chaofenglian”)	Beneficial owner	12,058,357 (L)	18.00%
Lin Zhiyao	Interest in a controlled corporation (Note 5)	12,058,357 (L)	18.00%
Tianjin Partnership	Beneficial owner	4,990,000 (L)	7.45%
Mr. Fan Dong	Interest in a controlled corporation (Note 6)	4,990,000 (L)	7.45%

— II-3 —

APPENDIX II

GENERAL INFORMATION

Name of Shareholder	Capacity/ Nature of interest	Number of Shares held	Approximate percentage of issued share capital of the Company as at the Latest Practicable Date (Note 2)
Ms. Xia Qing	Interest of spouse (Note 7)	4,990,000 (L)	7.45%
Mr. Liu Xing	Interest in a controlled corporation (Note 6)	4,990,000 (L)	7.45%
Ms. Ma Xuemei	Interest of spouse (Note 8)	4,990,000 (L)	7.45%
Kingdom Vast Limited	Beneficial owner	12,705,000 (L)	18.97%
RAF Capital Group Limited	Interest in a controlled corporation (Note 9)	12,705,000 (L)	18.97%
Mr. Wong Hao	Interest in a controlled corporation (Note 9)	12,705,000 (L)	18.97%
Ms. Zhang Xiangnong	Interest of spouse (Note 10)	12,705,000 (L)	18.97%
All Wealthy Investment Limited	Beneficial owner	6,685,000 (L)	9.98%
HEROIC COURAGE LIMITED	Interest in a controlled corporation (Note 11)	6,685,000 (L)	9.98%
Mr. Wong Wing Hung	Interest in a controlled corporation (Note 11)	6,685,000 (L)	9.98%

Notes:
1. The letter “L” denotes the person’s long position in such securities.
2. The calculation is based on 66,990,867 H Shares in issue as at the Latest Practicable Date.

— II-4 —

APPENDIX II

GENERAL INFORMATION

Tianjin Chengfang was owned by Dima Ruisheng as to approximately 98.99%, which Dima Ruisheng was in turn wholly-owned by Dima. As at the Latest Practicable Date, Dima was owned by Chongqing Doyen and Chongqing Shuorun as to approximately 35.55% and 3.01% respectively. Chongqing Shuorun was owned by Chongqing Doyen and Ms. Chiu as to approximately 98.96% and 1.04% respectively, while Chongqing Doyen was owned by Mr. Lo and Ms. Chiu as to approximately 77.78% and 22.22% respectively. By virtue of the SFO, each of Mr. Lo, Chongqing Doyen, Dima and Dima Ruisheng are deemed to be interested in all the H Shares held by Tianjin Chengfang.
Ms. Chiu is the spouse of Mr. Lo. By virtue of the SFO, Ms. Chiu is deemed to be interested in all the H Shares held by Mr. Lo.
Chongqing Chaofenglian was held as to approximately 90% by Lin Zhiyao. By virtue of the SFO, Lin Zhiyao is deemed to be interested in all the H Shares held by Chongqing Chaofenglian.
Tianjin Partnership’s equity interests were owned by Mr. Fan Dong and Mr. Liu Xing as to approximately 52.74% and 37.18% respectively. By virtue of the SFO, each of Mr. Fan Dong and Mr. Liu Xing is deemed to be interested in all the H Shares held by Tianjin Partnership.
Ms. Xia Qing is the spouse of Mr. Fan Dong. By virtue of the SFO, Mr. Xia Qing is deemed to be interested in all the H Shares held by Mr. Fan Dong.
Ms. Ma Xuemei is the spouse of Mr. Liu Xing. By virtue of the SFO, Ms. Ma Xuemei is deemed to be interested in all the H Shares held by Mr. Liu Xing.
Kingdom Vast Limited was wholly-owned by RAF Capital Group Limited, which was in turn wholly-owned by Mr. Wang Hao. By virtue of the SFO, each of RAF Capital Group Limited and Mr. Wang Hao is deemed to be interested in all the H Shares held by Kingdom Vast Limited.
Ms. Zhang Xiangnong is the spouse of Mr. Wang Hao. By virtue of the SFO, Ms. Zhang Xiangnong is deemed to be interested in all the H Shares held by Mr. Wang Hao.
All Wealthy Investment Limited was wholly-owned by HEROIC COURAGE LIMITED, which was in turn wholly-owned by Mr. Wong Wing Hung. By virtue of the SFO, each of HEROIC COURAGE LIMITED and Mr. Wong Wing Hung is deemed to be interested in all the H Shares held by All Wealthy Investment Limited.

Save as disclosed above, as at the Latest Practicable Date, the Company was not notified by any persons (other than Directors or chief executive of the Company as discussed above) who had interests or short positions in the H Shares or underlying H Shares of the Company which would fall to be disclosed to the Company 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 under Section 336 of the SFO.

COMPETING INTEREST

So far as the Directors are aware, none of the Directors or their respective associates had interest in any business which compete or is likely to compete, either directly or indirectly, with the businesses of the Group as at the Latest Practicable Date.

— II-5 —

APPENDIX II

GENERAL INFORMATION

4. DIRECTORS' SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered into any existing or proposed service contract with the Enlarged Group which was not determinable by the employer within one year without payment of compensation (other than statutory compensation).

5. DIRECTORS' INTERESTS IN CONTRACTS OR ASSETS

As at the Latest Practicable Date,

(i) there was no contract or arrangement subsisting in which any Director was materially interested and which was significant in relation to any business of the Enlarged Group; and

(ii) none of the Directors had any direct or indirect interest in any assets which had been since 31 December 2023 (being the date to which the latest published audited financial statements of the Group were made up) acquired or disposed of by or leased to any member of the Enlarged Group, or were proposed to be acquired or disposed of by or leased to any member of the Enlarged Group.

6. LITIGATION

As at the Latest Practicable Date, to the best of the Directors' knowledge information and belief, no member of the Group was engaged in any litigation, arbitration or claim of material importance and no litigation, arbitration or claim of material importance is known to the Directors to be pending or threatened against any member of the Group that would have a material adverse effect on the results of operations or financial conditions of the Group.

7. QUALIFICATION AND CONSENTS OF EXPERT

(a) The following sets out the qualifications of the experts who have given their respective opinions or advice or statements as contained in this circular:

Name	Qualification
Pelican Financial Limited	A corporation licensed to carry out type 6 (advising on corporate finance) regulated activity under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
Peak Vision Appraisals Limited	Independent valuer

(b) As at the Latest Practicable Date, the above experts had no shareholding in the Company or any other member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in the Company or any other member of the Group.

— II-6 —

APPENDIX II

GENERAL INFORMATION

(c) As at the Latest Practicable Date, the above experts had no direct or indirect interests in any assets which has been acquired or disposed of by or leased to any member of the Group since 31 December 2023 (the date to which the latest published audited consolidated financial statements of the Group were made up) or proposed to be so acquired, disposed of or leased to any member of the Group.

(d) As at the Latest Practicable Date, the above experts had given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of their respective reports or letters or their respective name and logo in the form and context in which they respectively appear.

8. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2023, being the date to which the latest published audited financial statements of the Group were made up.

9. DOCUMENTS ON DISPLAY

Copies of the following documents will be published and displayed on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.dowellservice.com) for a period of 14 days from the date of this circular (both days inclusive):

(a) the Equity Transfer Agreement;

(b) the letter from the Independent Financial Adviser as set out in this circular;

(d) the written consent from the Independent Financial Adviser referred to in the paragraph headed "7. Qualification and consents of experts" in this Appendix;

(e) the valuation report prepared by Peak Vision Appraisals Limited, the text of which is set out in Appendix I to this circular; and

(f) this circular.

NOTICE OF EGM

东原仁知

DOWELL SERVICE

DOWELL SERVICE GROUP CO. LIMITED*

東原仁知城市運營服務集團股份有限公司

(A joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 2352)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “EGM”) of Dowell Service Group Co. Limited*東原仁知城市運營服務集團股份有限公司(the “Company”) will be held at 5th Floor, Building 2, Ping An Wealth Center, Shenchang Road, Minhang District, Shanghai, the People’s Republic of China (the “PRC”) on Wednesday, 22 January 2025 at 10:00 a.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolution:

ORDINARY RESOLUTION

To consider and approve the following resolution:

"THAT:

(a) the transaction contemplated under the Equity Transfer Agreement, a copy of which has been produced to the meeting marked “A” and signed by the Chairman of the meeting for the purpose of identification, is hereby approved; and

(b) all acts done and things executed and all such documents or deeds entered into in connection with the implementation of the Equity Transfer Agreement and the transaction contemplated thereunder is hereby approved, and any one Director be and is hereby authorised to do all such acts and things and execute all such documents or deeds and to take all steps as the Director may in his/her discretion consider necessary, desirable or expedient in connection with the implementation of the Equity Transfer Agreement or the transaction contemplated thereunder and to make and agree to such variations, amendments or waivers of matters relating thereto, as are, in the opinion of the Director, necessary or desirable."

Yours faithfully,

By order of the Board

DOWELL SERVICE GROUP CO. LIMITED*

東原仁知城市運營服務集團股份有限公司

Luo Shaoying

Chairman and non-executive Director

Shanghai, People’s Republic of China, 6 January 2025

— EGM-1 —

NOTICE OF EGM

Notes:

Unless the context otherwise stated, capitalised terms used in this notice shall have the meaning as those defined in the circular of the Company dated 6 January 2025.
Any Shareholder entitled to attend and vote at the EGM is entitled to appoint one or more persons (whether such person is a shareholder or not) as his/her/its proxy or proxies to attend and vote on his/her/its behalf. A proxy need not be a Shareholder. If more than one proxy is appointed, the number of H Shares in respect of which each such proxy so appointed must be specified in the relevant proxy form. Every Shareholder present in person or by proxy shall be entitled to have one vote for each H Share held by him/her/it.
In order to be valid, the form of proxy together with the notarised power of attorney and other authorisation documents, if any, must be lodged at the Company's H share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong as soon as possible and in any event not later than 24 hours prior to the EGM (i.e. no later than 10:00 a.m. on Tuesday, 21 January 2025 (Hong Kong time)) or any adjournment thereof.

If the proxy is a legal person, its legal representative or any representative authorised by its board of directors or by other decision-making body shall attend the EGM on its behalf. If the Shareholder is a recognised clearing house (or its agent), the Shareholder may authorise one or more suitable persons to act as its representative at the EGM; however, if more than one person are authorised, the form of proxy shall clearly indicate the number and types of shares each person is authorised to represent. The persons after such authorisation may represent the recognised clearing house (or its agent) to exercise the rights, as if they were the individual Shareholders.

A vote made in accordance with the terms of a proxy shall be valid notwithstanding the death or loss of capacity of the appointor or revocation of the proxy or the authority under which the proxy was executed, or the transfer of the shares in respect of which the proxy is given, provided that the Company does not receive any written notice in respect of such matters before the commencement of the EGM.

The record date for determining the entitlement of members of the H Shares to attend and vote at the EGM will be fixed at the close of business of Tuesday, 14 January 2025. In order to be eligible to attend and vote at the EGM, all transfer documents accompanied by the relevant share certificates must be lodged with the Company's H share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong not later than 4:30 p.m. on Tuesday, 14 January 2025.
Completion and return of an instrument appointing a proxy will not preclude a Shareholder from attending and voting in person at the EGM and/or any adjournment thereof and in such event, the instrument appointing a proxy shall be deemed to be revoked.
As required under the Listing Rules, the above resolution will be decided by way of poll, except where the chairperson, in good faith, decides to allow a resolution relating to a procedural or administrative matter to be voted on by show of hands.
Shareholders attending the EGM shall be responsible for their own travel and accommodation expenses.
References to time and dates in this notice are to Hong Kong time.
Shareholders or their proxies shall present their identity documents when attending the EGM. If any attending Shareholder is a legal person, its legal representative or director or person authorised by other governing body shall present the copy of the resolution of the board of directors or other governing body of such Shareholder for appointing such person to attend the EGM.
Where gale warning (orange typhoon warning or above), rainstorm warning (orange rainstorm warning or above), extreme weather conditions or other similar event is or are in force at 8:00 a.m. on the date of the EGM, the EGM will be postponed. The Company will post an announcement on its website (www.dowellservice.com) and on the website of the Stock Exchange (www.hkexnews.hk) to notify the Shareholders of the date, time and place of the rescheduled meeting.

As of the date of this notice, the Board comprises Mr. Zhang Aiming and Mr. Fan Dong as executive directors and employee directors of the Company; Ms. Yi Lin and Ms. Luo Shaoying as non-executive Directors; and Ms. Cai Ying, Mr. Wang Susheng and Mr. Song Deliang as independent non-executive Directors.

— EGM-2 —

AI assistant

DOWELL SERVICE GROUP CO. LIMITED — Proxy Solicitation & Information Statement 2025

50543_rns_2025-01-06_c499887b-924c-4e1c-b978-91652efc1330.pdf

东原仁知

DOWELL SERVICE GROUP CO. LIMITED*

東原仁知城市運營服務集團股份有限公司

(1) DISCLOSABLE AND CONNECTED TRANSACTION IN RELATION TO THE EQUITY TRANSFER AGREEMENT; AND (2) NOTICE OF EGM

东原仁知

DOWELL SERVICE

DOWELL SERVICE GROUP CO. LIMITED*

東原仁知城市運營服務集團股份有限公司

DISCLOSABLE AND CONNECTED TRANSACTION IN RELATION TO THE EQUITY TRANSFER AGREEMENT

I. INTRODUCTION

II. THE EQUITY TRANSFER AGREEMENT

Subject matter

Consideration

Basis of consideration

Conditions precedent

Completion

Information on the Group and Chongqing Dowell

Information on Dima Group and Chengdu Dowell

Information on the Target Company

Risk of reversing of the Equity Transfer

Reasons for and benefits of the Equity Transfer

Listing Rules implications

III. EGM

IV. BAD WEATHER ARRANGEMENTS

V. RECOMMENDATION

VI. WARNING NOTICE

LISTING RULES IMPLICATIONS

THE INDEPENDENT BOARD COMMITTEE

OUR INDEPENDENCE

BASIS OF OUR OPINION

PRINCIPAL FACTORS TAKEN INTO CONSIDERATION

1. Information of the Company and the Group

2. Information on the Purchaser

3. Information on the Vendor and the Target Company

3.1. Dima Group and Chengdu Dowell

3.2. The Target Company

4. Reasons for and benefits of the Equity Transfer

China’s greying society

Policy support for the elderly care service

Owning vs Renting

5. The Equity Transfer Agreement

5.1. Subject matter

5.2. Consideration

5.3. Conditions precedent

5.4. Completion

6. Assessment of the Consideration

6.1. Valuer

6.2. Valuation standards and basis

6.3. Valuation methodology

6.4. Valuation assumptions

6.5. Section conclusion

7. Financial effects of the Transaction

RECOMMENDATION

Peak Vision Appraisals Limited

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

4. DIRECTORS' SERVICE CONTRACTS

5. DIRECTORS' INTERESTS IN CONTRACTS OR ASSETS

6. LITIGATION

7. QUALIFICATION AND CONSENTS OF EXPERT

8. MATERIAL ADVERSE CHANGE

9. DOCUMENTS ON DISPLAY

东原仁知

DOWELL SERVICE

DOWELL SERVICE GROUP CO. LIMITED*

東原仁知城市運營服務集團股份有限公司

NOTICE OF EXTRAORDINARY GENERAL MEETING

ORDINARY RESOLUTION

"THAT:

Notes:

More from DOWELL SERVICE GROUP CO. LIMITED

DOWELL SERVICE GROUP CO. LIMITED Proxy Solicitation & Information Statement 2025