Guangzhou R&F Properties Co., Ltd. — Proxy Solicitation & Information Statement 2006

May 12, 2006

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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in GUANGZHOU R&F PROPERTIES CO., LTD. , you should at once hand this circular and the accompanying proxy form to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company 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.

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

(Stock Code: 2777)

PROPOSED SHARE SUBDIVISION AND NOTICE OF SPECIAL GENERAL MEETING

A letter from the Board dated 12 May 2006 is set out on pages 5 to 9 of this circular.

Notices convening a special general meeting of Guangzhou R&F Properties Co., Ltd. to be held at 11:00 a.m. on 27 June 2006 at Room 1103 Yue Xiu Building, 160-174 Lockhart Road, Wanchai, Hong Kong, are set out on pages 10 to 11 of this circular. A proxy form for use at the special general meeting is enclosed with this circular. Whether or not you intend to attend the meeting, you are requested to complete and return the enclosed proxy form in accordance with the instructions printed thereon as soon as possible to the Company’s H share registrar, Computershare Hong Kong Investor Services Limited at Room 1712-1716, 17/F., Hopewell Centre,183 Queen’s Road East, Wanchai, Hong Kong and in any event not less than 48 hours before the time appointed for the holding of the special general meeting or any adjourned meeting. Completion and return of the proxy forms will not preclude you from attending and voting in person at the meeting or any adjourned meeting or meetings should you so desire.

12 May 2006

DEFINITIONS

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

“Board”	the board of Directors
“CCASS”	the Central Clearing and Settlement System established and
	operated by Hongkong Clearing
“Company”	Guangzhou R&F Properties Co., Ltd., a joint stock limited
	company incorporated in the People’s Republic of China with
	limited liability, the securities of which are listed on the main
	board of the Stock Exchange
“Conditions”	the conditions of the Share Subdivision set out in the section
	headed “Conditions” in the letter from the Board
“CSRC”	China Securities Regulatory Commission
“Directors”	the directors of the Company
“Domestic and H Shares”	Domestic Shares and H Shares
“Domestic Share(s)”	existing issued Domestic share(s) of RMB1.00 each in the
	share capital of the Company
“H Share(s)”	existing issued H share(s) with a nominal value of RMB1.00
	each in the share capital of the Company
“HK$”	Hong Kong dollars
“Hongkong Clearing”	Hong Kong Securities Clearing Company Limited
“Latest Practicable Date”	9 May 2006, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	referred to herein
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
“Mandatory Provisions”	Exchange (The Mandatory Provisions for
	Articles of Association of Companies to be Listed Overseas)
	(as amended and supplemented from time to time), for
	inclusion in the articles of association of companies
	incorporated in the PRC to be listed overseas, which were
	promulgated by the Securities Commission and the State
	Restructuring Commission on 27 August 1994
“PRC”	the People’s Republic of China
“RMB”	Renminbi, the lawful currency of the PRC

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	DEFINITIONS
“SGM”	the special general meeting of the Company to be held on 27
	June 2006 to consider and approve, among other things, the
	proposed Share Subdivision
“Share Subdivision”	the proposed subdivision of each of the issued Domestic
	Shares and H Shares into four Subdivided Domestic Shares
	and Subdivided H Shares respectively
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subdivided Domestic Share(s)”	Domestic share(s) of RMB0.25 each in the share capital of the
	Company Share(s) proposed to be created by the Share
	Subdivision
“Subdivided H Share(s)”	H Share(s) of RMB0.25 each in the share capital of the
	Company proposed to be created by the Share Subdivision
“Subdivided Share(s)”	Subdivided Domestic Share(s) and Subdivided H Share(s)

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EXPECTED TIMETABLE

Subject to the approval of the Share Subdivision by the shareholders of the Company at the SGM and the approval of the Share Subdivision by CSRC and the satisfying of the other conditions related to the Share Subdivision, it is currently expected that the Share Subdivision will become effective at 9:30 a.m. on 1 August 2006. The expected timetable for the implementation of the Share Subdivision and the associated trading arrangements are set out as follows:

SGM to approve the Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 June 2006
Submission of the Proposal to CSRC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 June 2006
Obtain approval from CSRC on the subdivision of H-Shares . . . . . . . . . . . . . . . . . . .31 July 2006
Obtain Listing Approval from SEHK on the subdivided
H-Shares (“Subdivided H-Shares”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 July 2006
Effective date of subdivision of H-Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 August 2006
Existing counter for trading in existing H-Shares
in board lots of 200 H-Shares temporarily closed . . . . . . . . . . . . . . .9:30 a.m. on 1 August 2006
Temporary counter for trading in Subdivided H-Shares
in board lots of 800 Subdivided H-Shares
(in the form of existing share certificates) opens . . . . . . . . . . . . . . . .9:30 a.m. on 1 August 2006
Existing counter for trading in Subdivided H-Shares
in board lots of 200 Subdivided H-Shares
(in the form of new share certificates) re-opens . . . . . . . . . . . . . . . .9:30 a.m. on 15 August 2006
Parallel trading of Subdivided H-Shares (in the form
of existing and new share certificates) commences . . . . . . . . . . . . .9:30 a.m. on 15 August 2006
Parallel trading of Subdivided H-Shares (in the form
of existing and new share certificates) ends . . . . . . . . . . . . . . . . .4:00 p.m. on 5 September 2006
Temporary counter for trading in Subdivided
H-Shares in board lots of 800 Subdivided
H-Shares (in the form of existing share
certificates) closes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4:00 p.m. on 5 September 2006
Free exchange of new share certificates
for the Subdivided Shares . . . . . . . . . . . . . . . . . . . . . .From 1 August 2006 to 7 September 2006

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CONTENTS

	page
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Share Subdivision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Trading arrangements for the Subdivided shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Responsibility statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Notice of Special General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10-11

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LETTER FROM THE BOARD

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

(Stock Code: 2777)

Executive Directors:

Mr. Li Sze Lim Mr. Zhang Li Mr. Zhou Yaonan Mr. Lu Jing

Non-executive Directors:

Ms. Zhang Lin Ms. Li Helen

Legal Address: 19 Jiaochang Road, East Guangzhou 510055 PRC

Principal Place of Business in Hong Kong: Room 1103,Yue Xiu Building, 160-174 Lockhart Road, Wanchai Hong Kong

Independent Non-executive Directors:

Mr. Huang Kaiwen Mr. Dai Feng

Mr. Lai Ming, Joseph

12 May 2006

To holders of the Domestic Shares and H Shares

Dear Sir or Madam,

PROPOSED SHARE SUBDIVISION

INTRODUCTION

The Board announced on 10 May 2006 a proposal for the Share Subdivision.

The purposes of this circular are to provide further details regarding the proposed Share Subdivision and the recommendation of the Board.

SHARE SUBDIVISION

The Board proposes that each of the Domestic Shares and H Shares with a nominal value of RMB1.00 each be subdivided respectively into four Subdivided Domestic Shares and Subdivided H Shares with a nominal value of RMB0.25 each. The Board believes that the reduced amount for investing in a board lot of subdivided H Shares as a result of the proposed Share Subdivision will improve the liquidity of the H Shares and help to widen the investor base of the Company.

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LETTER FROM THE BOARD

The Board is of the opinion that the Share Subdivision is in the interests of the Company and its shareholders, both the holders of Domestic Shares and H Shares, as a whole.

As at the Latest Practicable Date, the registered share capital of the Company was RMB763,291,836, which is divided into 551,777,236 Domestic Shares and 211,514,600 H Shares. Immediately upon completion of the Share Subdivision and on the basis that an aggregate of 763,291,836 Domestic and H Shares are in issue, a total of 3,053,167,344 Subdivided Shares will be created pursuant to the Share Subdivision. The 3,053,167,344 Subdivided Shares will comprise 2,207,108,944 Subdivided Domestic Shares and 846,058,400 Subdivided H Shares with a nominal value of RMB0.25 each.

The rights attaching to the Subdivided Shares will not be affected by the Share Subdivision. Other than the expenses incurred in relation to the Share Subdivision, the implementation of the Share Subdivision will not alter the underlying assets, business operations, management or financial position of the Company or interests of the shareholders. The Board considers that the Share Subdivision will not have any adverse effect on the financial position of the Company and its subsidiaries.

The proposed Share Subdivision is subject to, among other things, approval by the CSRC and approval by the holders of Domestic Shares and H Shares to the proposed amendments to the relevant provisions of the Articles of Association of the Company relating to the proposed change in the nominal value per Domestic Share and H Share.

Currently, the H Shares are traded in board lots of 200 H Shares. Upon fulfilment of the Conditions, the board lots of the Subdivided H Shares will remain unchanged.

CONDITIONS

The Share Subdivision is conditional upon, among other things:

• (a) the passing of a special resolution by the holders of the Domestic and H Shares of the Company at a SGM relating to the proposed Share Subdivision and amendment to the Articles of Association of the Company;

• (b) approval issued by the CSRC regarding the proposed Share Subdivision; and

• (c) the Listing Committee of the Stock Exchange granting the listing of and permission to deal in the Subdivided H Shares arising from the Share Subdivision.

An application will be made to the Stock Exchange for the listing of and permission to deal in such Subdivided H Shares.

Subject to the granting of listing of, and permission to deal in, the Subdivided H Shares on the Stock Exchange, the Subdivided H Shares will be accepted as eligible securities by Hongkong Clearing for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Subdivided H Shares on the Stock Exchange or such other date as determined by

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LETTER FROM THE BOARD

Hongkong Clearing. Settlement of transactions between members of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

TRADING ARRANGEMENTS FOR THE SUBDIVIDED SHARES

Only the H Shares are listed and dealt in on the Stock Exchange. No part of the Company’s securities are listed or dealt in on any other stock exchange, nor is listing or permission to deal in on any other stock exchange being or proposed to be sought. Dealings in the Subdivided H Shares will be subject to Hong Kong stamp duty.

1. Dealings

Subject to the Share Subdivision becoming unconditional, the arrangements proposed for dealings in the Subdivided H Shares are expected to be as follows:

• (a) From 1 August 2006, the existing counter for trading in the H Shares in board lots of 200 H Shares will be closed temporarily and a temporary counter for trading in the Subdivided Shares in board lots of 800 Subdivided H Shares will be set up.

Accordingly, one H Share will be deemed to represent four Subdivided H Shares. Existing H Share certificates may only be traded at the temporary counter.

• (b) With effect from 15 August 2006, the existing counter for trading in the H Shares will be reopened for trading in the Subdivided H Shares in board lots of 200 Subdivided H Shares.

• (c) During the period from 15 August 2006 to 5 September 2006 (both days inclusive), there will be parallel trading at the above two counters.

• (d) With effect from 10:00 a.m. on 6 September 2006, trading will only be in the Subdivided H Shares in board lots of 200 Subdivided H Shares and the temporary counter for trading in the Subdivided H Shares in board lots of 800 existing Subdivided H Shares will be removed. Dealings in the Subdivided H Shares represented by existing H Share certificates will cease after the close of trading on 5 September 2006.

Existing H Share certificates will only be valid for delivery and settlement in respect of dealings for the period up to 5 September 2006 and thereafter will not be accepted for dealing purposes. However, the existing H Share certificates will continue to be good evidence of legal title to the Subdivided H Shares on the basis of one H Share for four Subdivided H Shares and may be exchanged for new share certificates for the Subdivided H Shares at any time. Such holders of H Shares shall be entitled to tender their existing H Share certificates in exchange for new share certificates for the Subdivided H Shares in board lots of 200 Subdivided H Shares so that their shareholding may be accurately represented by the new share certificates for the Subdivided H Shares.

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LETTER FROM THE BOARD

1. Free exchange of share certificates

New share certificates for the Subdivided H Shares will be issued in blue in order to distinguish them from existing H Share certificates which are grey.

Holders of H Shares are urged to exchange their existing H Share certificates for new share certificates for the Subdivided H Shares as soon as possible on or after 1 August 2006. This may be done free of charge by delivering the existing H Share certificates to the Company’s H share registrar in Computershare Hong Kong Investor Services Limited at Room 1712-1716, 17/F., Hopewell Centre,183 Queen’s Road East, Wanchai, Hong Kong before 4:00 p.m. on 7 September 2006. Thereafter, existing H Share certificates will be accepted for exchange only on payment of a fee of HK$2.50 (or such higher amount as may from time to time be allowed by the Stock Exchange) for each new share certificate for the Subdivided H Shares. Holders of H Shares are entitled to aggregate his/her Shares registered in his/her name in order to obtain new share certificates for the Subdivided H Shares in board lot(s) of 200 Subdivided H Shares.

It is expected that new share certificates for the Subdivided H Shares will be available for collection on or after the tenth business day from the date of submission of existing H Share certificates to the Registrar at the above address for exchange. Unless instructed otherwise, new share certificates for the Subdivided H Shares will be issued in board lots of 200 Subdivided H Shares.

SPECIAL GENERAL MEETING

The notice of the Special General Meeting is set out on page 10 to 11 of this circular. At the Special General Meeting, a special resolution will be proposed for the holders of Domestic Shares and H Shares to approve the Share Subdivision and the proposed amendments to the Articles of Association of the Company by reason of the Share Subdivision.

A proxy form for use at the Special General Meeting of the Company to be held at 11:00 a.m. at Room 1103, Yue Xiu Building, 160-174 Lockhart Road, Wanchai, Hong Kong on 27 June 2006 is enclosed. Whether or not you intend to attend the Special General Meeting, you are requested to complete and return the proxy form to the Company’s H share registrar, Computershare Hong Kong Investor Services Limited at Room 1712-1716, 17/F., Hopewell Centre,183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for the holding of the Special General Meeting. Completion and return of the proxy form will not preclude you from attending and voting in person at the Special General Meeting or at any adjourned meeting should you so wish.

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LETTER FROM THE BOARD

RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purposes of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

RECOMMENDATION

The Directors are of the opinion that the Share Subdivision is in the interests of the Company and the holders of Domestic Shares and H Shares as a whole and recommend that the holders of Domestic Shares and H Shares vote in favour of the resolutions to be proposed at the Special General Meeting.

Yours faithfully, By order of the Board Li Sze Lim Chairman

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NOTICE OF SPECIAL GENERAL MEETING

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

(Stock Code: 2777)

NOTICE IS HEREBY GIVEN that a special general meeting (“the SGM”) of the holders of Domestic Shares and H Shares of Guangzhou R&F Properties Co., Ltd. (the “Company”) will be held at Room 1103, Yue Xiu Building, 160-174 Lockhart Road, Wanchai, Hong Kong on 27 June 2006 at 11:00 a.m. for the purpose of considering and, if thought fit, passing the following special resolution:

SPECIAL RESOLUTION

“ THAT subject to and conditional upon the Company obtaining the approvals of the relevant PRC authorities to the proposed subdivision of Domestic Shares and H Shares of the Company in issue and the Listing Committee of The Stock Exchange of Hong Kong Limited granting the listing of, and permission to deal in, the H Shares of the Company in their subdivided form:

• (a) every Domestic Share and H Share with a nominal or face value of RMB1.00 in the share capital of the Company be and is hereby subdivided into four Domestic Shares and H shares with a nominal or face value of RMB0.25 each respectively with effect from 1 August 2006 and the registered capital of the Company shall remain unchanged. The nominal value of all shares to be issued by the Company shall be RMB0.25; and

• (b) Articles 15, 18 and 19 of the Articles of Association of the Company be amended as follows:

• (i) by deleting Article 15 in its entirety and substituting therefor the following:

“Article 15 — All shares issued by the Company are shares with nominal value, the nominal value of the shares issued upon the incorporation of the Company was RMB1.00 per share. After obtaining the consents of CSRC and the Stock Exchange, the nominal value of all issued shares has been changed to RMB0.25 per share.”

• (ii) by deleting Article 18 in its entirety and substituting therefor the following:

“Article 18 — After obtaining the approvals from the approving authorities authorized by the State Council relating to the Company, the aggregate ordinary shares issued by the Company are 3,053,167,344 shares in which the Company has issued 2,207,108,944 ordinary shares to the promoters, representing 72.29% of the aggregate issued ordinary shares of the Company.”

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NOTICE OF SPECIAL GENERAL MEETING

• (iii) by deleting Article 19 in its entirety and substituting therefor the following:

“Article 19 — The Company has a total of 3,053,167,344 shares in issue. Among those 3,053,167,344 shares, holders of the domestic shares hold a total of 2,207,108,944 shares, representing 72.29% of the aggregate issued ordinary shares of the Company. Holders of the overseas listed foreign shares hold 846,058,400 overseas listed foreign shares, representing 27.71% of the aggregate issued ordinary shares of the Company.””

Yours faithfully, By order of the Board Li Sze Lim Chairman

Hong Kong, 12 May 2006

Principal Place of Business in Hong Kong

Room 1103,Yue Xiu Building, 160-170 Lockhart Road, Wanchai Hong Kong

Notes:

1. Any holder of Domestic Shares or H Shares entitled to attend and vote at the SGM convened by the above notice is entitled to appoint in written form one or more proxies to attend and vote at the SGM on his behalf. A proxy needs not be a holder of Domestic Shares or H Shares of the Company.

2. A voting proxy form for the SGM is enclosed. In order to be valid, the voting proxy form together with the power of attorney or other authority, if any, under which it is signed or a notarily certified copy of the power of attorney must be delivered to the Company’s H share registrar, Computershare Hong Kong Investor Services Limited at Room 1712-1716, 17/F., Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the SGM or any adjournment thereof.

3. Holders of Domestic Shares or H Shares who intend to attend the SGM should complete the enclosed REPLY SLIP FOR SPECIAL GENERAL MEETING and return it to the Company’s H share registrar, Computershare Hong Kong Investor Services Limited at Room 1712-1716, 17/F., Hopewell Centre,183 Queen’s Road East, Wanchai, Hong Kong on or before 7 June 2006. The reply slip may be delivered by hand, by post or by fax to the number (852)-2865 0990.

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