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

If you have sold or transferred all your shares in Jinke Smart Services Group Co., Ltd., you should at once hand this circular, together with the accompanying proxy forms, to the purchaser or transferee or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or the 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.

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Jinke Smart Services Group Co., Ltd. 金科智慧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: 9666)

(1) RENEWAL OF CONTINUING CONNECTED TRANSACTION; (2) DISCLOSEABLE AND CONNECTED TRANSACTION; (3) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION; (4) PROPOSED APPOINTMENT OF NON-EXECUTIVE DIRECTORS; AND

(5) NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and Independent Shareholders

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Capitalised terms used on this cover shall have the same meanings as those defined in the section headed “Definitions” in this circular, unless the context requires otherwise.

A letter from the Board is set out on pages 5 to 23 of this circular. A letter from the Independent Board Committee is set out on page 24 of this circular. A letter from Independent Financial Adviser and its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 25 to 57 of this circular.

A notice convening the EGM to be held at Building A4, East Zone, Jinke Shiniancheng, No. 480, Panxi Road, Shimahe Street, Jiangbei District, Chongqing, PRC on Thursday, 18 August 2022 at 3 p.m. is set out on pages 70 to 72 of this circular. A proxy form for use at the EGM is also enclosed in this circular. Such proxy form for use at the EGM is also published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.jinkeservice.com).

Shareholders who intend to appoint a proxy to attend the EGM shall complete and return the enclosed proxy form in accordance with the instructions printed thereon not less than 24 hours before the time fixed for holding the EGM or any adjournment thereof (as the case may be). Completion and return of the proxy form will not preclude Shareholders from attending and voting in person at the EGM or any adjourned meeting thereof if they so wish.

1 August 2022

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
LETTER FROM THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . . .	24
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER . . . . . . . . . . . . .	25
APPENDIX I – GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .	58
APPENDIX II – PROPOSED AMENDMENTS TO THE ARTICLES OF
ASSOCIATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	61
NOTICE OF EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	70

– i –

DEFINITIONS

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

“2022 Master Property Management Services Agreement”
the new master property management services agreement entered into between the Company and Jinke Property on 29 July 2022 to renew the Master Property Management Services Agreement
“Articles of Association”
the articles of association of the Company currently in force
“associate”
has the meaning ascribed to it under the Listing Rules
“Board”
the board of Directors
“Charged Assets”

assets of the Jinke Property Group including not less than 42,000 units of car parking spaces and not less than 200 shops with an aggregated gross floor area of approximately 100,000 square metres charged or to be charged by the Jinke Property Group in favour of the Company pursuant to the Loan Agreement as a security for the Loan

“Company”

Jinke Smart Services Group Co., Ltd. (金科智慧服務集團股份有限公司), a joint stock company incorporated in the PRC with limited liability and the H Shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 9666)

“connected person”

has the meaning ascribed to it under the Listing Rules

“controlling shareholder(s)”

has the meaning ascribed to it under the Listing Rules

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

the extraordinary general meeting of the Company (or any adjournment thereof) to be convened and held on Thursday, 18 August 2022 at 3 p.m. for the purpose of considering and, if thought fit, approving the 2022 Master Property Management Services Agreement, the Loan Agreement, the transactions contemplated respectively thereunder, the Proposed Amendments, and the proposed appointment of Ms. Lin Ke and Mr. Wu Xiaoli as non-executive Directors

– 1 –

DEFINITIONS

“EGM Notice”
the notice convening the EGM set out on pages 70 to 72 of this circular
“Group” the Company and its subsidiaries
“H Share(s)”
the overseas listed foreign share(s) in the ordinary share capital of the Company with a nominal value of RMB1.00 each, which are subscribed for and traded in Hong Kong Dollars and listed on the Main Board of the Stock Exchange
“Hong Kong”
the Hong Kong Special Administrative Region of the PRC
“Hong Kong Dollars”
Hong Kong dollars, the lawful currency of Hong Kong
“Independent Board Committee”
the independent committee of the Board, comprising all the independent non-executive Directors namely Mr. Cao Guohua, Ms. Yuan Lin and Mr. Chan Chi Fung Leo, to advise the Independent Shareholders in respect of the 2022 Master Property Management Services Agreement and the Loan Agreement (including the proposed annual caps under the 2022 Master Property Management Services Agreement) and the transactions contemplated respectively thereunder
“Independent Financial Adviser”
Red Sun Capital Limited, a licensed corporation to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activity under the Securities and Futures Ordinance (Chapter 571 of Laws of Hong Kong), and appointed by the Company as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the 2022 Master Property Management Services Agreement, the Loan Agreement and the transactions contemplated respectively thereunder
“Independent Shareholders”

Shareholders who are not required to abstain from voting at the EGM for the relevant resolutions with respect to the 2022 Master Property Management Services Agreement and/or the Loan Agreement

– 2 –

DEFINITIONS

“Independent Third Party(ies)” a person, or in the case of a company, the company or its ultimate beneficial owner(s), who is independent of and not connected with the Group and its connected persons and their respective ultimate beneficial owner(s) or their respective associates
“Jinke Property” Jinke Property Group Co., Ltd.* (金科地產集團股份有限公司), a joint stock company established in the PRC with limited liability, listed on the Shenzhen Stock Exchange (stock code: 000656.SZ) and the controlling shareholder of the Company
“Jinke Property Group” Jinke Property and its subsidiaries and associates (but excluding the Group)
“Latest Practicable Date” 29 July 2022, being the latest practicable date for ascertaining certain information in this circular
“Listing”
the listing of the H Shares on the Main Board of the Stock Exchange on 17 November 2020
“Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
“Loan” the loan in the principal amount of RMB1,500 million advanced by the Company to Jinke Property pursuant to the Loan Agreement
“Loan Agreement” the loan agreement entered into between the Company as lender and Jinke Property as borrower dated 29 July 2022 in relation to the Loan
“Master Property Management Services Agreement”
the master property management services agreement entered into between the Company and Jinke Property on 29 October 2020 in relation to the provision of property management services by the Group to the Jinke Property Group
“Maturity Date”
20 December 2024, being the maturity date of the Loan
“Model Code”
the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules

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DEFINITIONS

“PRC” the People’s Republic of China, for the purpose of this circular, shall exclude Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and Taiwan
“Proposed Amendments” the proposed amendments to the Articles of Association, full version of which are set out in the appendix II to this circular
“Prospectus” the prospectus of the Company dated 5 November 2020
“RMB” Renminbi, the lawful currency of the PRC
“SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time
“Share(s)” share(s) in the share capital of the Company, with a nominal value of RMB1.00 each, comprising the H Shares only
“Shareholder(s)” holder(s) of Share(s)
“Specific Agreement(s)” the specific individual agreement(s) that may be entered into between members of the Group and members of the Jinke Property Group in accordance with the principles and terms of the 2022 Master Property Management Services Agreement
“Stock Exchange” The Stock Exchange of Hong Kong Limited “Supervisor(s)” the supervisor(s) of the Company “%” per cent

– 4 –

LETTER FROM THE BOARD

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Jinke Smart Services Group Co., Ltd. 金科智慧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: 9666)

Executive Directors: Headquarters in the PRC: Mr. Xia Shaofei (Chairman) Building A4, East Zone, Jinke Shiniancheng Mr. Xu Guofu No. 480, Panxi Road, Shimahe Street Jiangbei District, Chongqing, PRC Non-executive Directors: Mr. Luo Licheng Registered office in the PRC: Mr. Liang Zhongtai Jinke Huayuan, Wuhuang Road Wulidian Street, Jiangbei District Independent non-executive Directors: Chongqing, PRC Mr. Cao Guohua Ms. Yuan Lin Principal place of business in Hong Kong: Mr. Chan Chi Fung Leo 40th Floor Dah Sing Financial Centre No. 248 Queen’s Road East Wanchai, Hong Kong

1 August 2022

To the Shareholders

Dear Sir/Madam,

(1) RENEWAL OF CONTINUING CONNECTED TRANSACTION;

(2) DISCLOSEABLE AND CONNECTED TRANSACTION;

(3) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION; (4) PROPOSED APPOINTMENT OF NON-EXECUTIVE DIRECTORS; AND

(5) NOTICE OF EXTRAORDINARY GENERAL MEETING

1. INTRODUCTION

Reference is made to the announcement of the Company dated 29 July 2022 in relation to the 2022 Master Property Management Services Agreement, the Loan Agreement, the Proposed Amendments and the announcement of the Company dated 28 June 2022 in relation to the proposed appointment of each of Ms. Lin Ke and Mr. Wu Xiaoli as non-executive Directors.

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LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among others, (i) further details of the 2022 Master Property Management Services Agreement, the Loan Agreement, the Proposed Amendments and the proposed appointment of each of Ms. Lin Ke and Mr. Wu Xiaoli as non-executive Directors; (ii) a letter of recommendation from the Independent Board Committee in relation to the 2022 Master Property Management Services Agreement, the Loan Agreement and the transactions contemplated respectively thereunder; (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders; and (iv) a notice convening the EGM.

2. RENEWAL OF CONTINUING CONNECTED TRANSACTION

Reference is made to the Prospectus in relation to, among others, the continuing connected transactions under the Master Property Management Services Agreement.

As the Master Property Management Services Agreement will expire on 31 December 2022, and the Group is expected to carrying on the transactions contemplated thereunder upon its expiry, the Company entered into the 2022 Master Property Management Services Agreement with Jinke Property on 29 July 2022 (after trading hours).

Date: 29 July 2022

Parties: (1) the Company; and (2) Jinke Property.

Scope of service:

The Group has agreed to provide to the Jinke Property Group certain property management services, including but not limited to (i) property pre-delivery and after-sales services, including but not limited to (a) preliminary planning and design consultancy services; (b) management services for the display units and on-site sales office; (c) house inspection; (d) pre-delivery clean services; (e) pre-delivery preparation; and (f) after-sales repair and maintenance services; (ii) property management services for the properties owned or used by the Jinke Property Group, including but not limited to the unsold residential property units, car parking lots, office buildings and commercial properties; and (iii) other related services.

Term:

Commencing from 1 January 2023 and ending on 31 December 2025 (both days inclusive).

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LETTER FROM THE BOARD

Pricing and other terms:

The fees to be charged for the property management services under the 2022 Master Property Management Services Agreement shall be determined on arm’s length basis with reference to the pricing policy set out in the paragraph headed “Pricing Policy” below.

The parties to the 2022 Master Property Management Services Agreement have also agreed as follows:

(1) the parties shall enter into Specific Agreements which will set out the necessary terms and conditions for the relevant transactions contemplated under the 2022 Master Property Management Services Agreement in the ordinary course of business after arm’s length negotiations on normal commercial terms; and
(2) the Specific Agreements shall conform with the principles and provisions set out in the 2022 Master Property Management Services Agreement.
Historical annual caps The historical annual caps for the two years ended 31 and transaction December 2021 and the year ending 31 December 2022 are amounts: RMB738.5 million, RMB932.1 million and RMB1,172.7 million, respectively. For the two years ended 31 December 2021 and the three months ended 31 March 2022, the service fees paid to the Group under the Master Property Management Services Agreement amounted to approximately RMB720.4 million, RMB914.6 million and RMB114.3 million, respectively. More properties will be provided to the Group for management in the second half of 2022 as compared to the first half to make up for properties under development which were temporarily held up due to the impact of the COVID-19 pandemic in February and March 2022.

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LETTER FROM THE BOARD

Annual cap:

It is proposed that the annual caps for the transactions contemplated under the 2022 Master Property Management Services Agreement for the three years ending 31 December 2025 are expected not to exceed the following:

			2023		2024		2025
			RMB		RMB		RMB
		_(in _	millions)	_(in _	millions)	_(in _	millions)
Annual	caps		800		800		800

In arriving at the above annual caps, the Directors have considered the following reasonable factors:

(i) the historical transaction amounts under the Master Property Management Services Agreement;
(ii) the estimated project number for display units and sales offices to be managed by the Group for the year ending 31 December 2023 of approximately 110 based on the estimated gross floor area of the properties to be pre-sold by the Jinke Property Group for the year ending 31 December 2023 of approximately 10 million square metres;
(iii) the estimated gross floor area sold and to be delivered by the Jinke Property Group for the year ending 31 December 2023 of approximately 12 million square metres, for which the Group will be engaged to provide pre-delivery and after-sales services;
(iv) the estimated gross floor area of properties owned and occupied by the Jinke Property Group for the year ending 31 December 2023 of approximately 7 million square metres, for which the Group will be engaged to provide property management services;
(v) the estimated number of car parking lots owned and occupied by the Jinke Property Group for the year ending 31 December 2023 of approximately 100,000, for which the Group will be engaged to provide property management services;

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LETTER FROM THE BOARD

(vi) the estimated transaction amount for the year ending 31 December 2023 calculated based on the above factors and the pricing policy as more particularised in the section headed “Pricing Policy” below; and
(vii) an assumption that the gross floor area of the properties to be delivered or pre-sold by the Jinke Property Group will remain stable for the two years ending 31 December 2025.

Pricing Policy

As a general principle, the prices to be charged by the Group under the 2022 Master Property Management Services Agreement will be determined in accordance with the following pricing principles:

(i) for property pre-delivery and after-sales services other than management services for the display units and on-site sales office, the Group would charge the Jinke Property Group at a price determined with reference to:
(a) the Group’s other contemporaneous transactions of similar services (in terms of the scope and requirement of services, the size and condition of projects, and level of difficulty of planning and design, etc.) carried out with Independent Third Parties; and
(b) prices charged by other property management companies in the PRC of comparable transactions with independent third parties (if available);
(ii) for management services for the display units and on-site sales office, the Group would charge the Jinke Property Group at a price determined with reference to:
(a) the anticipated operation costs (including but not limited to labor costs, administration costs and costs of materials) to be incurred by the Group to provide such management services plus a reasonable profit margin rate of around 10% in accordance with the standard pricing terms maintained by the Group; and
(b) the Group’s other contemporaneous transactions of similar management services carried out with Independent Third Parties;

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LETTER FROM THE BOARD

(iii) for property management services for the properties owned or used by the Jinke Property Group, the Group would charge the Jinke Property Group at a fixed unit price per square meter or fixed amount per number determined with reference to:
(a) the Group’s other contemporaneous transactions of similar services (in terms of the scope and requirement of services, the location and condition of properties, and level of difficulty of management, etc.) carried out with Independent Third Parties;
(b) prices charged by other property management companies in the PRC of comparable transactions with independent third parties; and
(c) government-prescribed prices or guiding prices (if any) promulgated by the PRC government.

As at the Latest Practicable Date, and to the best knowledge, understanding and belief of the Directors, property management services for the properties owned or used by the Jinke Property Group in certain cities may be subject to government-prescribed prices or guiding prices promulgated by the PRC government, and the scope and applicability of such government-prescribed prices or guiding price standards may vary in different cities. If the Group considers that the government-prescribed prices or guiding price standards are not aligned with the market prices as mentioned in paragraph (iii)(a) and (iii)(b) above, the Group may charge such market prices subject to the registration with relevant local government authorities.

In determining the service prices chargeable and terms under the Specific Agreements, the prices and terms offered by the Jinke Property Group will be reviewed and evaluated by the relevant personnel of the finance department and the management of the Group and will be compared against the prices obtained through the monthly regular price research conducted by the Group based on historical transactions with Independent Third Party(ies). Where the prices and terms of an offer from the Jinke Property Group are no less favorable to the Group than those offered by other Independent Third Party(ies), the Group may enter into such Specific Agreement to provide the relevant services to the Jinke Property Group.

To this end, the business department of the Group will obtain at least three transactions for reference, and the heads of relevant operating departments, the chief financial officer of the Group, the executive Directors and chairman of the Board will review and approve the offer from the Jinke Property Group to ensure that the terms of the offer reflect the prevailing market conditions.

The Group will keep negotiating with the Jinke Property Group to ensure that the prices and terms of an offer from the Jinke Property Group are no less favorable to the Group than those available from Independent Third Party(ies) before entering into each Specific Agreement.

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LETTER FROM THE BOARD

The Directors consider that the above relevant procedures conducted by the Group in determining the service prices chargeable and terms under the Specific Agreement can ensure the transactions contemplated under the 2022 Master Property Management Services Agreement will be conducted on normal commercial terms and not prejudicial to the interest of the Company and Shareholders.

Internal Control Measures

The pricing policy for all the continuing connected transactions of the Group will be supervised and monitored by the relevant personnel and management of the Group in charge to ensure the relevant continuing connected transaction is conducted on normal commercial terms and will not be prejudicial to the interests of the Company and its Shareholders as a whole.

The relevant personnel and management of the Group will review and assess the terms before entering into the Specific Agreements to ensure they are consistent with the principles and provisions set out in the 2022 Master Property Management Services Agreement.

The finance department of the Company will closely monitor the aggregate transaction amounts and notify the management if the aggregate transaction amounts come close to 80% of the annual caps. Regular checks will be conducted on an annual basis to review and assess whether the transactions contemplated under the relevant continuing connected transactions are conducted in accordance with the terms of the respective agreements and the price charged for a specific transaction is fair and reasonable and in accordance with the aforesaid pricing policy.

The independent non-executive Directors will continue to review the management’s annual review reports on the transactions contemplated under the relevant continuing connected transactions and the auditors of the Company will also conduct an annual review on the pricing terms and annual cap thereof.

Accordingly, the Directors consider that the internal control mechanism is effective to ensure that the transactions contemplated under the 2022 Master Property Management Services Agreement have been and will be conducted on normal commercial terms and not prejudicial to the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

3. DISCLOSEABLE AND CONNECTED TRANSACTION

For reasons set forth in the section headed “Reasons for and Benefits of Entering into the 2022 Master Property Management Services Agreement and the Loan Agreement”, the Company as lender entered into the Loan Agreement with Jinke Property as borrower on 29 July 2022.

Date: 29 July 2022

Parties: (1) the Company; and (2) Jinke Property.

Principal amount: RMB1,500 million.

Interest rate:

8.6% per annum, accruing on the principal amount of the Loan from the date of its drawdown but excluding the Maturity Date and payable on a half-yearly basis commencing from 20 December 2022 with last payment on the Maturity Date.

The interest rate of 8.6% was a normal commercial term determined after arm’s length negotiations between the Company and Jinke Property with reference to (i) the loan prime rate mentioned in the paragraph headed “Reasons for and Benefits of Entering into the 2022 Master Property Management Services Agreement and the Loan Agreement”; and (ii) interest rate of three of the existing bank loans of the Jinke Property Group, being approximately 8.5% per annum.

Term:

A fixed term commencing from the date of drawdown and ending on the Maturity Date, i.e. 20 December 2024.

Drawdown and conditions precedent:

The Loan will be available for drawdown upon satisfaction of the conditions precedent below:

(1) all necessary approvals and registration procedures in respect of the Loan having been completed by Jinke Property;
(2) details of the bank accounts for drawdown and repayment of the Loan having been provided by Jinke Property;

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LETTER FROM THE BOARD

(3) there having been no breach of any term and condition of the Loan Agreement by Jinke Property and no event of default stipulated in the Loan Agreement having been occurred;
(4) no applicable laws and regulations and authorities having prohibited or restricting the Company to lend the Loan to Jinke Property; and
(5) the Loan Agreement having been approved by the Independent Shareholders at the EGM.

Repayment:

Default interest:

Jinke Property shall repay 20% of the principal amount of the Loan on 20 January 2023 and thereafter on a half-yearly basis commencing from 20 June 2023 (but with a two-month grace period for each repayment date) and repay the last instalment of the Loan on the Maturity Date.

In the event that Jinke Property fails to repay any sum payable under the Loan Agreement on or before expiry of the aforementioned two-month grace period, Jinke Property shall pay an extra default interest calculated on such overdue amount at 1.5 times of the standard interest rate of 8.6% per annum, i.e. 12.9% per annum, accruing on a daily basis until the full repayment of such overdue amount by Jinke Property.

The default ratio of 1.5 was a normal commercial term determined after arm’s length negotiations between the Company and Jinke Property with reference to the default ratio of 1.5 stipulated in the same three existing bank loans of the Jinke Property Group.

Security:

The Loan is secured by the Charged Assets. Pursuant to the Loan Agreement, Jinke Property is entitled to, subject to prior consent from the Company, sell the Charged Assets for repayment purpose, or for its self-use purpose on condition that substitute assets of equivalent value as acknowledged by the Company have been charged to the Company.

In any event, the total value of the Charged Assets from time to time shall be equal to the unpaid principal amount of the Loan divided by a charge rate of 60%, which was a commercial term determined on an arm’s length negotiations between the Company and Jinke Property with reference to the charge ratio in the range of 50% to 70% stipulated in the existing security documents of the Jinke Property Group.

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LETTER FROM THE BOARD

In the event that Jinke Property is default in repaying any overdue amount under the Loan Agreement, the Company shall be entitled to exercise its rights to realise the Charged Assets and the proceeds from such realization shall be applied to repay the overdue amount. Furthermore, the Company shall have the discretion to offset any overdue amount with (i) any dividend distributable to the Shares held by Jinke Property; and (ii) any fees or account payable by the Company to Jinke Property in the ordinary and usual course of business.

As at the Latest Practicable Date, the Charged Assets has an appraised market value of RMB2,700 million as valued by an independent and qualified valuer, AVISTA Valuation Advisory Limited, using market approach as at 31 May 2022.

Purpose:

For general working capital purpose.

4. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

In view of the business needs of the Group and pursuant to the Consultation Conclusions on Listing Regime for Overseas Issuers published by the Stock Exchange in November 2021 requiring listed issuers to adopt a uniform set of 14 “Core Standards” for shareholder protections for issuers, the Company intends to amend the Articles of Association. Full version of the Proposed Amendments are set out in the appendix II to this circular.

The legal advisers to the Company as to Hong Kong laws and the PRC laws have respectively confirmed that the revised Article of Association complies with the applicable requirements of Appendix 3 to the Listing Rules and do not violate the laws of the PRC. The Company also confirms that there is nothing unusual in the Proposed Amendments from the perspective of a PRC company listed on the Stock Exchange.

The Proposed Amendments are subject to the approval of the Shareholders by way of special resolution at the EGM. The Proposed Amendments will become effective upon approval by the Shareholders at the EGM.

The Articles of Association are prepared and written in Chinese without a formal English version. As such, any English translation shall be for reference only. In the event of any inconsistency, the Chinese version shall prevail. After the Proposed Amendments come into effect, the full text of the revised Articles of Association will be published on the websites of the Stock Exchange and the Company.

– 14 –

LETTER FROM THE BOARD

5. PROPOSED APPOINTMENT OF NON-EXECUTIVE DIRECTORS

As disclosed in the announcement of the Company dated 28 June 2022, the Board, with the recommendation of the nomination committee of the Company, has resolved to nominate each of Ms. Lin Ke (“ Ms. Lin ”) and Mr. Wu Xiaoli (“ Mr. Wu ”) as a candidate for the proposed appointment of non-executive Directors, subject to the approval by the Shareholders by way of an ordinary resolution at the EGM.

The biographical details of Ms. Lin and Mr. Wu are set out as follows:

Ms. Lin Ke (林可), aged 39, graduated from Beijing Foreign Studies University with a bachelor’s degree in economics in July 2005 and has been serving for Boyu Capital since January 2020 with her current position as managing director.

From July 2005 to June 2007, Ms. Lin worked at Jones Lang LaSalle with her last position as deputy manager. From July 2007 to December 2019, Ms. Lin worked at GIC Real Estate with her last position as vice president. Since April 2021, Ms. Lin has been serving as an executive director of Shanghai Jinjun Props Co., Ltd. (上海勁駿道具有限公司). Since September 2021, Ms. Lin has been serving a director of Taicang Anguang Supply Chain Management Co., Ltd. (太倉市安廣供應鏈管理有限公司). Since December 2021, Ms. Lin has been serving as an executive director of Ankuang Enterprise Management (Shanghai) Co., Ltd. (安鄺企業管理(上海)有限公司). Since January 2022, Ms. Lin has been serving as an executive director of Anxing Supply Chain Management (Shanghai) Co., Ltd. (安杏供應鏈管理(上海)有限公司).

Subject to the approval of the Shareholders by way of an ordinary resolution at the EGM, the Company will enter into a service contract with Ms. Lin. The initial length of service will commence from the date of the EGM and ends when the term of the first session of the Board expires. Subject to the terms of the service contract, Ms. Lin is entitled to a director’s fee of RMB180,000 per annum (before tax), which was determined by the Board on the recommendation of the remuneration committee of the Company with reference to her qualifications, experience, duties and responsibilities, and the prevailing market conditions.

Save as otherwise disclosed, Ms. Lin has confirmed that as at the Latest Practicable Date, (i) she did not hold any other positions with the Company and other members of the Group; (ii) she did not, nor did she in the past three years, hold any directorships in other public companies the securities of which are listed on any securities market in Hong Kong or overseas; (iii) she did not have any relationships with any Directors, supervisors, senior management, substantial shareholders or controlling shareholders of the Company; and (iv) she did not have any interest in the Shares within the meaning of Part XV of the SFO.

Save as disclosed above, Ms. Lin has confirmed that, there are no other matters relating to her proposed appointment that are required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Listing Rules and there are no other matters relating to her proposed appointment that need to be brought to the attention of the Shareholders.

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LETTER FROM THE BOARD

Mr. Wu Xiaoli (吳曉力), aged 47, graduated from Tsinghua University with a bachelor’s degree in biomedical engineering in July 1998. Mr. Wu received a Master of Engineering degree in bioengineering from Boston University in May 2002 and a Master of Business Administration degree from The Wharton School, University of Pennsylvania in May 2004. Mr. Wu has been serving for Boyu Capital since November 2011 with his current position as managing director.

From 1998 to 2000, Mr. Wu served as a consultant at International Business Machines Corporation (IBM). From 2005 to 2011, Mr. Wu worked at McKinsey & Company with his last position as associate principle. Since April 2021, Mr. Wu has been serving as a director of Genesis Medtech Group Limited.

Subject to the approval of the Shareholders by way of an ordinary resolution at the EGM, the Company will enter into a service contract with Mr. Wu. The initial length of service will commence from the date of the EGM and ends when the term of the first session of the Board expires. Subject to the terms of the service contract, Mr. Wu is entitled to a director’s fee of RMB180,000 per annum (before tax), which was determined by the Board on the recommendation of the remuneration committee of the Company with reference to his qualifications, experience, duties and responsibilities, and the prevailing market conditions.

Save as otherwise disclosed, Mr. Wu has confirmed that as at the Latest Practicable Date, (i) he did not hold any other positions with the Company and other members of the Group; (ii) he did not, nor did he in the past three years, hold any directorships in other public companies the securities of which are listed on any securities market in Hong Kong or overseas; (iii) he did not have any relationships with any Directors, supervisors, senior management, substantial shareholders or controlling shareholders of the Company; and (iv) he did not have any interest in the Shares within the meaning of Part XV of the SFO.

Save as disclosed above, Mr. Wu has confirmed that, there are no other matters relating to his proposed appointment that are required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Listing Rules and there are no other matters relating to his proposed appointment that need to be brought to the attention of the Shareholders. 6. REASONS FOR AND BENEFITS OF ENTERING INTO THE 2022 MASTER PROPERTY MANAGEMENT SERVICES AGREEMENT AND THE LOAN AGREEMENT

The Group has been providing space property management services and community value-added services, including but not limited to, properties developed by the Jinke Property Group. Such space property management services and community value-added services include cleaning, order maintenance, greening, repair and maintenance services, home-living services, community management services, home-decoration services and comprehensive living and traveling services and marketing referral and related marketing advertising services. As the Group is expected to carry on the transactions contemplated thereunder upon its expiry, the Board considers it beneficial to renew the Master Property Management Services Agreement to facilitate the continuous provision of such space property management services to the Jinke Property Group.

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LETTER FROM THE BOARD

The Group has a long and stable cooperative relationship with the Jinke Property Group. The Directors were given an understanding that the progress of certain property development projects, which represented a small portion of the Jinke Property Group’s portfolio of property development projects as a whole, was adversely affected by the impact of the COVID-19 pandemic and the Loan Agreement would give the Jinke Property Group more flexibility in the deployment of its overall short to medium term working capital to facilitate the timely delivery of its projects under development which may otherwise take longer to deliver due to the reallocation and deployment of capital required. Despite the need for a short to medium term working capital by the Jinke Property Group, the Directors believe that the overall daily operations of the Jinke Property Group are ongoing after reviewing the publications, such as announcements, issued by the Jinke Property Group up to the Latest Practicable Date. Thus, the Board considers that such temporary suspension does not have any material impact on the financial capability and credit worthiness of the Jinke Property Group. By entering into the Loan Agreement, the Jinke Property Group will be able to ensure the construction and delivery of properties projects under development which the Group will in turn be engaged to provide property management services for after those properties are delivered. This is beneficial to the long-term development of the Group. Meanwhile, the interest rate of 8.6% per annum contemplated under the Loan Agreement is higher than the one-year and five-year loan prime rates of 3.7% and 4.45% per annum, respectively, announced by the People’s Bank of China with effect from 20 May 2022, which will increase other incomes of the Group. In respect of the comparability of the interest rate of the existing bank loans of the Jinke Property Group (the “ Comparable Loans ”), the Directors are of the view that the Comparable Loans are comparable to the Loan on the following basis: (a) the purpose of the Comparable Loans is for general working capital purpose; (b) the maturity date of the Comparable Loans ranges from two to three years; (c) the interest rate of the Comparable Loans is 8.5% per annum determined with reference to the loan prime rate announced by the People’s Bank of China; (d) the default ratio of the Comparable Loans is 1.5 times of the corresponding interest rate of the Comparable Loans; and (e) the Comparable Loans are secured loans. Key terms of the Comparable Loans are substantially similar to the terms of the Loan and are summarised below:

				Interest		Security or
		Principal		rate per	Default	guarantee
Counter party	Date	amount	Term	annum	ratio	involved
		(RMB’
		million)
Bank A in the	November
PRC	2020	300	36 months	8.5%	1.5	Yes
Bank B in the	October
PRC	2020	260	24 months	8.5%	1.5	Yes
Bank C in the	January
PRC	2020	700	36 months	8.5%	1.5	Yes

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LETTER FROM THE BOARD

When selecting the Comparable Loans, the Company has adopted the following selection criterion: (i) the lender shall be a commercial bank in the PRC; (ii) the loan shall remain outstanding at the material time; (iii) the maturity date of the loan should range from two to three years; and (iv) the loan shall be a secured loan. The Board is of the view that the above selection criterion are fair and reasonable as (i) the lenders are all commercial banks in the PRC, who are representative in nature; and (ii) the characteristics of the Comparable Loans are similar to the Loan. Although there are other bank loans borrowed by the Jinke Property Group in 2021 and 2022, such loans either did not satisfy the relevant selection criterion or have an interest rate lower than the Comparable Loans. After reviewing all the existing bank loans of the Jinke Property Group that satisfied all the above selection criterion, the Directors consider that the highest interest rate of those bank loans (including the Comparable Loans) that were considered to be comparable to the Loan was 8.5% per annum. In respect of the external borrowing costs of the Jinke Property Group, based on the figures provided by the Jinke Property Group, the capitalised rate of borrowing cost of the Jinke Property Group and the average borrowing costs for non-bank loans of the Jinke Property Group for the year ended 31 December 2021 were 7.69% and 8.6%. Accordingly, the interest rate of 8.6% of the Loan is more favorable and comparable. Thus, having taken into account the factors disclosed above, the Directors consider that the interest rate of 8.6% per annum (including the default ratio of 1.5) contemplated under the Loan Agreement is fair and reasonable and on normal commercial terms, which is in line with market practice and favourable to the Group.

Furthermore, prior to entering into the Loan Agreement, the management of the Group has conducted due diligence and assessment on the repayment capability of Jinke Property by reviewing the consolidated financial statements and management accounts of Jinke Property. According to the published annual report of Jinke Property for the year ended 31 December 2021, the audited revenue and profit after taxation attributable to its shareholders amounted to approximately RMB112.3 billion and RMB3.6 billion, respectively. According to the quarterly report published by Jinke Property for the three months ended 31 March 2022, the unaudited net asset value attributable to its shareholders as at 31 March 2022 amounted to approximately RMB34,250.6 million. Such amount represents over 20 times of the principal amount of the Loan. In addition, the Directors have reviewed the information published by Jinke Property and did not note any material adverse matters in relation to Jinke Property which would materially impair its ability to fulfil its repayment obligations under the Loan Agreement as at the Latest Practicable Date. The finance department of the Company shall continue to monitor and prudently manage its operating cash inflows and outflows as well as its overall working capital requirements, and report to the senior management of the Company on a regular basis, who would act accordingly in a timely manner with an aim to ensure that the Company has sufficient working capital to fund its operations after the provision of the Loan. Based on the facts mentioned above, the Directors are of the view that Jinke Property has a sound credit worthiness and financial capacity as at the Latest Practicable Date.

Considering further that (a) the Company shall have the discretion to offset any overdue amount with (i) any dividend distributable to the Shares held by Jinke Property; and (ii) any fees or account payable by the Company to Jinke Property in the ordinary and usual course of business; and (b) the Loan is secured by the Charged Assets, the Directors are of the view that

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LETTER FROM THE BOARD

the risk of Jinke Property failing to repay the Loan and the accrued interests is controllable. The Company, pursuant to the Loan Agreement, shall be entitled to exercise its rights to realise the Charged Assets and the proceeds from such realization shall be applied to repay the overdue amount. The Company has the discretion to offset any overdue amount with (i) any dividend distributable to the Shares held by Jinke Property; and (ii) any fees or account payable by the Company to Jinke Property in the ordinary and usual course of business in the event of default by the Jinke Property Group. Furthermore, the Company may demand the Jinke Property Group to provide additional charge assets as considered appropriate by the Group pursuant to the Loan Agreement. Accordingly, the Company may take one or more of these actions against the Jinke Property Group if any default occurs.

The Loan will be funded by the internal resources of the Group and will not be funded by the net proceeds raised from the Listing.

After considering that (a) the Group has no material outstanding interest bearing bank borrowings as at 31 December 2021 based on its annual report for the year ended 31 December 2021; (b) the expected financial position, financial performance and working capital of the Group for the next 12 months after the provision of the Loan; (c) the primary objective of the Loan is to formalise the collection process in relation to the existing receivables and to facilitate the settlement of the aforesaid outstanding receivable balances due from the Jinke Property Group to the Group in an orderly manner; (d) the repayment mechanism to repay the principal amount of the Loan, together with interest, in five instalments commencing on 20 January 2023 and thereafter on a half-yearly basis from 20 June 2023 pursuant to the Loan Agreement; and (e) the measures to be taken by the Company to ensure the sufficient working capital need as disclosed above, the Directors are of the view that the Company has sufficient working capital for the next 12 months after the provision of the Loan.

For reasons set out above, the Directors (including the independent non-executive Directors whose views have been expressed in this circular) are of the view that the terms of each of the 2022 Master Property Management Services Agreement and the Loan Agreement including the interest rate of 8.6% were arrived at after arm’s length negotiations among the parties, and are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

7. INFORMATION ON JINKE PROPERTY AND THE GROUP

Jinke Property

Jinke Property is a joint stock company established in the PRC with limited liability, the shares of which are listed on the Shenzhen Stock Exchange (Stock Code: 000656.SZ). Jinke Property is one of the leading property developers in the PRC and is principally engaged in the development of large scale mixed-use property projects, with extensive presence in the businesses of property management, environmental protection, construction, real estate construction management and commercial.

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LETTER FROM THE BOARD

The Group

The Group is principally engaged in the provision of space property management services, community value-added services, local catering services and smart living technology solutions in the PRC.

8. LISTING RULES IMPLICATIONS

As at the Latest Practicable Date, Jinke Property is the controlling shareholder of the Company, holding approximately 30.33% of the issued share capital of the Company. Therefore, Jinke Property is a connected person of the Company under the Listing Rules.

As one or more of the applicable percentage ratios (other than the profits ratio) in respect of the highest amount of the annual caps under the 2022 Master Property Management Services Agreement exceed 5%, the transactions contemplated under the 2022 Master Property Management Services Agreement constitute a continuing connected transaction of the Company and are subject to the reporting, annual review, announcement, circular (including independent financial advice) and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

Furthermore, as one or more of the applicable percentage ratios in respect of the transactions contemplated under the Loan Agreement is over 5% but all of which are less than 25%, the transactions contemplated under the Loan Agreement constitute a discloseable and connected transaction for the Company and are subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules and are subject to the reporting, annual review, announcement, circular (including independent financial advice) and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

Board Approval

At the Board meeting held to approve the 2022 Master Property Management Services Agreement and the Loan Agreement, Mr. Luo Licheng and Mr. Liang Zhongtai who also hold management positions in Jinke Property, have abstained from voting on the relevant Board resolutions. Apart from Mr. Luo Licheng and Mr. Liang Zhongtai, none of the Directors has or is deemed to have a material interest in the 2022 Master Property Management Services Agreement and the Loan Agreement and is required to abstain from voting on the relevant Board resolutions approving the 2022 Master Property Management Services Agreement and the Loan Agreement.

Recommendation of the Independent Board Committee

The Independent Board Committee, having taken into account the advice of the Independent Financial Adviser, has been established and considers that (i) in respect of the 2022 Master Property Management Services Agreement, (a) the terms thereunder (including the proposed annual caps) are on normal commercial terms and are fair and reasonable; and (b) the transactions contemplated thereunder (including the proposed annual caps) are conducted in the ordinary and usual course of business of the Group and in the interests of the Company

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LETTER FROM THE BOARD

and the Shareholders as a whole; and (ii) in respect of the Loan Agreement, (a) the terms thereunder are on normal commercial terms and are fair and reasonable; and (b) although the transactions contemplated thereunder are not conducted in the ordinary and usual course of business of the Group, they are in the interests of the Company and the Shareholders as a whole. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the resolutions in relation to the 2022 Master Property Management Services Agreement and the Loan Agreement (including the proposed annual caps under the 2022 Master Property Management Services Agreement) proposed at the EGM. The text of the letter from the Independent Board Committee is set out on page 24 of this circular.

9. EGM AND PROXY ARRANGEMENT

The EGM will be convened and held at Building A4, East Zone, Jinke Shiniancheng, No. 480, Panxi Road, Shimahe Street, Jiangbei District, Chongqing, PRC on Thursday, 18 August 2022 at 3 p.m., for the purpose of considering and, if thought fit, passing the ordinary resolutions to approve the 2022 Master Property Management Services Agreement, the Loan Agreement, the transactions contemplated respectively thereunder, the Proposed Amendments and the proposed appointment of each of Ms. Lin and Mr. Wu as a non-executive Director. The EGM Notice is set out on pages 70 to 72 of this circular. A proxy form for use at the EGM is also enclosed in this circular.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, no Shareholder is required to abstain from voting on the ordinary resolutions in relation to the proposed appointment of each of Ms. Lin and Mr. Wu as a non-executive Director and the special resolution in relation to the Proposed Amendments. As at the Latest Practicable Date, Jinke Property, holding 197,977,875 Shares, representing approximately 30.33% of the issued share capital of the Company, shall abstain from voting at the EGM on the resolutions in relation to the 2022 Master Property Management Services Agreement and the Loan Agreement and the transactions respectively contemplated thereunder. Apart from the above, none of the other Shareholders has a material interest in the 2022 Master Property Management Services Agreement, the Loan Agreement and the transactions contemplated respectively thereunder and is required to abstain from voting on the relevant resolutions at the EGM.

If Shareholders intend to appoint a proxy to attend the EGM, Shareholders are required to complete and return the accompanying proxy form in accordance with the instructions printed thereon and return it by personal delivery or by post not less than 24 hours before the time fixed for holding the EGM or any adjournment thereof (as the case may be). The proxy form should be returned to the Company’s H share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong (if returning the completed proxy form before 15 August 2022) or 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong (if returning the completed proxy form on or after 15 August 2022). For holders of domestic shares of the Company, the proxy form should be returned to the Company’s headquarters in the PRC at Building A4, East Zone, Jinke Shiniancheng, No. 480, Panxi Road, Shimahe Street, Jiangbei District, Chongqing, PRC. Completion and return of the proxy form will not preclude the Shareholders from attending and voting in person at the EGM or at any other adjourned meeting thereof (as the case may be) if they so wish.

– 21 –

LETTER FROM THE BOARD

10. VOTING BY POLL

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll. Accordingly, the chairman of the EGM will exercise his power under the Articles of Association to demand a poll in relation to the proposed resolutions at the EGM.

11. CLOSURE OF REGISTER OF MEMBERS

For the purpose of determining the entitlement of the Shareholders to attend and vote at the EGM, the register of members of the Company will be closed from Monday, 15 August 2022 to Thursday, 18 August 2022 (both days inclusive), during which period no transfer of the Shares will be registered. In order to qualify for attending and voting at the EGM, H Shareholders whose transfer documents have not been registered are required to deposit all properly completed share transfer forms together with the relevant share certificates to the Company’s H shares registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong, for registration, no later than 4:30 p.m. on Friday, 12 August 2022.

12. RECOMMENDATION

The Board considers that the ordinary resolutions in relation to the proposed appointment of each of Ms. Lin Ke and Mr. Wu Xiaoli as a non-executive Director and the special resolution in relation to the Proposed Amendments to be proposed at the EGM are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of these resolutions to be proposed at the EGM.

Your attention is drawn to (i) the letter from the Independent Board Committee set out in this circular which contains the recommendation of the Independent Board Committee to the Independent Shareholders in relation to the 2022 Master Property Management Services Agreement and the Loan Agreement, and the proposed annual caps under the 2022 Master Property Management Services Agreement; and (ii) the letter from the Independent Financial Adviser set out in this circular which contains its advice to the Independent Board Committee and the Independent Shareholders in relation to the 2022 Master Property Management Services Agreement and the Loan Agreement, and the proposed annual caps under the 2022 Master Property Management Services Agreement, as well as the principal factors and reasons taken into account by the Independent Financial Adviser in arriving at its advice. Having taken into account the respective terms of the 2022 Master Property Management Services Agreement and the Loan Agreement, the information provided in the letter from the Board and the letter from the Independent Financial Adviser, the Independent Board Committee considers that (i) in respect of the 2022 Master Property Management Services Agreement, (a) the terms thereunder (including the proposed annual caps) are on normal commercial terms and are fair and reasonable; and (b) the transactions contemplated thereunder (including the proposed annual caps) are conducted in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole; and (ii) in respect of the Loan

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LETTER FROM THE BOARD

Agreement, (a) the terms thereunder are on normal commercial terms and are fair and reasonable; and (b) although the transactions contemplated thereunder are not conducted in the ordinary and usual course of business of the Group, they are in the interests of the Company and the Shareholders as a whole. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favor of the ordinary resolutions as set out in the EGM Notice and to be proposed at the EGM for approving the 2022 Master Property Management Services Agreement, the Loan Agreement and the transactions contemplated respectively thereunder.

By order of the Board Jinke Smart Services Group Co., Ltd. Xia Shaofei Chairman

– 23 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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Jinke Smart Services Group Co., Ltd. 金科智慧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: 9666)

1 August 2022

To the Independent Shareholders

Dear Sir/Madam,

RENEWAL OF CONTINUING CONNECTED TRANSACTION AND DISCLOSEABLE AND CONNECTED TRANSACTION

We refer to the circular issued by the Company to the Shareholders dated 1 August 2022 (the “ Circular ”) which this letter forms part. Terms used in this letter shall have the same meanings as those defined in the Circular unless the context otherwise requires.

We have been appointed by the Board as the members of the Independent Board Committee to consider the 2022 Master Property Management Services Agreement and the Loan Agreement and to advise you in respect of the 2022 Master Property Management Services Agreement, the Loan Agreement and the transactions contemplated respectively thereunder and the proposed annual caps under the 2022 Master Property Management Services Agreement, details of which are set out in the “Letter from the Board” on page 5 to 23 of the Circular. Red Sun Capital Limited has been appointed as the Independent Financial Adviser in this regard.

We wish to draw your attention to the “Letter from the Board” and the “Letter from Independent Financial Adviser” as set out in the Circular. Having considered the principal factors and reasons considered by, and the advice of, the Independent Financial Adviser as set out in their letter of advice, we are of the view that (i) in respect of the 2022 Master Property Management Services Agreement, (a) the terms thereunder (including the proposed annual caps) are on normal commercial terms and are fair and reasonable; and (b) the transactions contemplated thereunder (including the proposed annual caps) are conducted in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole; and (ii) in respect of the Loan Agreement, (a) the terms thereunder are on normal commercial terms and are fair and reasonable; and (b) although the transactions contemplated thereunder are not conducted in the ordinary and usual course of business of the Group, they are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend that the Independent Shareholders vote in favour of the ordinary resolutions for approving the 2022 Master Property Management Services Agreement, the Loan Agreement and the transactions contemplated respectively thereunder and the proposed annual caps under the 2022 Master Property Management Services Agreement at the EGM.

Yours faithfully, For and on behalf of the Independent Board Committee of Jinke Smart Services Group Co., Ltd.

Cao Guohua

Independent non-executive Director

Yuan Lin

Independent non-executive Director

Chan Chi Fung Leo Independent non-executive Director

– 24 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of the letter from the Independent Financial Adviser which sets out its advice to the Independent Board Committee and Independent Shareholders in relation to the 2022 Master Property Management Services Agreement (including the proposed annual caps), the Loan Agreement and the transactions contemplated respectively thereunder for inclusion in this circular.

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Unit 3303, 33/F, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong

Tel: (852) 2857 9208 Fax: (852) 2857 9100

1 August 2022

To: The Independent Board Committee and the Independent Shareholders of Jinke Smart Services Group Co., Ltd.

Dear Sirs,

(1) RENEWAL OF CONTINUING CONNECTED TRANSACTIONS; AND

(2) DISCLOSEABLE AND CONNECTED TRANSACTION

I. INTRODUCTION

We refer to our appointment as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders with regard to the 2022 Master Property Management Services Agreement (including the proposed annual caps (the “ Proposed Annual Caps ”), the Loan Agreement and the transactions contemplated respectively thereunder, details of which are contained in the letter from the Board (the “ Letter from the Board ”) as set out in the circular to the Shareholders dated 1 August 2022 (the “ Circular ”). Unless otherwise specified, terms defined in the Circular have the same meanings in this letter.

As disclosed in the Letter from the Board, as at the Latest Practicable Date, Jinke Property is the controlling shareholder of the Company, holding approximately 30.33% of the issued share capital of the Company. Therefore, Jinke Property is a connected person of the Company under the Listing Rules.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Management Services Agreement constitute continuing connected transactions of the Company and are subject to the reporting, annual review, announcement, circular (including independent financial advice) and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

In addition, as one or more of the applicable percentage ratios in respect of the transactions contemplated under the Loan Agreement is over 5% but all of which are less than 25%, the transactions contemplated under the Loan Agreement constitute a discloseable and connected transaction for the Company and are subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules and are subject to the reporting, annual review, announcement, circular (including independent financial advice) and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

II. THE INDEPENDENT BOARD COMMITTEE

The Independent Board Committee comprising all the independent non-executive Directors namely Mr. Cao Guohua, Ms. Yuan Lin and Mr. Chan Chi Fung Leo, has been formed to advise the Independent Shareholders in respect of the 2022 Master Property Management Services Agreement (including the Proposed Annual Caps), the Loan Agreement and the transactions contemplated respectively thereunder. We have been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

Our appointment has been approved by the Independent Board Committee. Our role as the independent financial adviser is to give our recommendation to the Independent Board Committee and the Independent Shareholders in respect of (i) the 2022 Master Property Management Services Agreement (including the Proposed Annual Caps); and (ii) the Loan Agreement, as to whether (a) the respective terms thereunder are on normal commercial terms and fair and reasonable; and (b) the respective transactions contemplated thereunder are conducted in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole, and how the Independent Shareholders should vote in respect of the relevant resolution to approve the transactions contemplated under the 2022 Master Property Management Services Agreement (including the Proposed Annual Caps) and the Loan Agreement at the EGM, respectively.

III. OUR INDEPENDENCE

As at the Latest Practicable Date, we were independent from and not connected with the Company, Jinke Property Group or any relevant parties in connection with the 2022 Master Property Management Services Agreement and the Loan Agreement. Accordingly, we are qualified to give independent advice to the Independent Board Committee and the Shareholders regarding the transactions contemplated under 2022 Master Property Management Services Agreement (including the Proposed Annual Caps) and the Loan Agreement.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In the last two years, save for our appointment as the independent financial adviser for the continuing connected transactions in relation to the provision of marketing services by the Group to the Jinke Property Group in respect of the sales of residential properties and car parking spaces by the Jinke Property Group in their development projects, details of which are set out in the circular of the Company dated 11 December 2021, we have not acted as independent financial adviser to independent board committee and/or independent shareholders of the Group.

Apart from normal professional fees paid or payable to us in connection with this appointment as the independent financial adviser and the engagement as stated above as the independent financial adviser, no arrangements exist whereby we have received or will receive any fees or benefits from the Group or any other parties that could reasonably be regarded as relevant to our independence. Accordingly, we consider that we are independent from the Group pursuant to Rule 13.84 of the Listing Rules.

IV. BASIS OF OUR ADVICE

In formulating our advice, we have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations provided to us by the Group, the Directors and/or senior management of the Company (the “ Management ”). We have assumed that all information, representations and opinions contained or referred to in the Circular or made, given or provided to us by the Company, the Directors and the Management, for which they are solely and wholly responsible, were true and accurate and complete in all material respects at the time when they were made and continue to be so as at the Latest Practicable Date. We have assumed that all the opinions and representations made by the Directors in the Circular have been reasonably made after due and careful enquiry. The Directors and the Management confirmed that no material facts have been omitted from the information provided and referred to in the Circular. In addition, pursuant to the relevant Listing Rules, we have taken reasonable steps to enable ourselves to reach an informed view so as to provide a reasonable basis for our opinion, which included, among others (i) obtained the 2022 Master Property Management Services Agreement and reviewed the terms thereunder; (ii) reviewed the contents as set out in the Letter from the Board, including the background of the proposed continuing connected transactions and the reasons for and benefits of the 2022 Master Property Management Services Agreement and the Loan Agreement; (iii) reviewed the information as set out in the 2020 Annual Report (defined hereafter) and the 2021 Annual Report (defined hereafter) for our analysis on the background and historical financial performance of the Group; (iv) conducted market research on the overview of the PRC economy and property sector; (v) obtained sampled transactions for the purpose of our fairness and reasonableness analysis; and (vi) conducted our analysis on the fairness and reasonableness of the 2022 Master Property Management Services Agreement (including the Proposed Annual Caps) and the terms under the Loan Agreement.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We have not, however, carried out any independent verification of the information provided, nor have we conducted any independent investigation into the financial position, business and affairs of the Group, the Jinke Property Group and, where applicable, their respective shareholder(s) and subsidiaries or affiliates, and their respective history, experience and track records, or the prospects of the markets in which they respectively operate.

We consider that we have been provided with sufficient information to enable us to reach an informed view and to provide a reasonable basis for our advice. We have no reason to doubt the truth, accuracy and completeness of the statements, information, opinions and representations provided to us by the Group, the Directors and/or the Management and their respective advisers or to believe that material information has been withheld or omitted from the information provided to us or referred to in the aforesaid documents.

This letter is issued to the Independent Board Committee and the Independent Shareholders solely for their consideration of the transactions contemplated under 2022 Master Property Management Services Agreement (including the Proposed Annual Caps) and the Loan Agreement, and, except for its inclusion in the Circular, is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes, without our prior written consent.

V. PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have taken into consideration the following principal factors and reasons:

1. Information of the Group

The Group is principally engaged in the provision of space property management services, community value-added services, local catering services and smart living technology solutions in the PRC.

The following sets out the financial information of the Group as extracted and summarised from the published annual report for the year ended 31 December 2021 (the “ 2021 Annual Report ”) and the published annual report for the year ended 31 December 2020 (the “ 2020 Annual Report ”).

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Summary of the consolidated statement of comprehensive income of the Group extracted from the 2021 Annual Report

	For the year ended	For the year ended
	31 December
	2021	2020
	RMB’000	RMB’000
	(audited)	(audited)
		(Restated)
Revenue
Recognised over time
– Space property management services	3,809,295	2,730,201
– Community value-added services	995,419	188,817
– Local catering services	33,347	12,934
– Smart living technology solutions	99,528	47,728
Recognised at a point in time
– Space property management services	90,900	155,686
– Community value-added services	499,314	35,613
– Local catering services	440,645	200,899
Total	5,968,448	3,371,878
Gross profit	1,846,434	1,009,289
Profit for the year attributable to
owners of the Company	1,057,182	616,616

Financial performance for the year ended 31 December 2020 (the “FY2020”) and the year ended 31 December 2021 (the “FY2021”)

As set out in the 2021 Annual Report, the Group’s revenue increased by approximately RMB2,596.5 million or 77.0% from approximately RMB3,371.9 million for FY2020 to approximately RMB5,968.4 million for FY2021. Such increase was mainly attributable to (i) revenue from space property management services increased by approximately 35.1% from approximately RMB2,885.9 million for the year ended 31 December 2020 to approximately RMB3,900.2 million for the year ended 31 December 2021 which was primarily driven by the Group’s business expansion, the gross floor area (the “ GFA ”) under management increased by approximately 52.3% from 156.2 million square metre (the “ sq.m. ”) as at 31 December 2020 to 237.9 million sq.m. as at 31 December 2021; (ii) revenue from community value-added services increased by approximately 566.1% from approximately RMB224.4 million for the year ended 31 December 2020 to approximately RMB1,494.7 million for the year ended 31 December 2021, which was primarily driven by (a) the continual rise in the penetration rate and repeat purchase rate of the community value-added services, and the effective community

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

ecosystem building; (b) the continuous improvement in professional capabilities in and the continuous expansion of portfolios of the community value-added services; (c) the addition of new businesses such as new housing marketing services and self-operated community media business; (iii) revenue from local catering services increased by approximately 121.7% from approximately RMB213.8 million for the year ended 31 December 2020 to approximately RMB474.0 million for the year ended 31 December 2021, which was primarily driven by (a) the substantial increase in comprehensive income resulting from the Group’s vigorous development of its catering business and the related supply chain operations; (b) fast-growing professional services capacity and segment revenue arising from internal incubation and external acquisitions of specialised catering companies; and (iv) revenue from smart living technology solutions increased by approximately 108.6% from approximately RMB47.7 million for the year ended 31 December 2020 to approximately RMB99.5 million for the year ended 31 December 2021, which was primarily driven by (a) the increase in digital and intelligent solutions that the Group developed for Independent Third Parties; and (b) the wider implementation of the Group’ digital and intelligent solutions such as the Home-Life system* (生命家系統) in smart on-site services.

Accordingly, the Group’s gross profit increased by approximately 82.9% from approximately RMB1,009.3 million for FY2020 to approximately RMB1,846.4 million for FY2021. The profit attributable to owners of the Company amounted to approximately RMB1,057.2 million for FY2021, representing an increase of approximately 71.5% as compared to approximately RMB616.6 million for FY2020.

Summary of the consolidated statement of comprehensive income of the Group extracted from the 2020 Annual Report

	For the year ended	For the year ended
	31 December
	2020	2019
	RMB’000	RMB’000
	(audited)	(audited)
		(Note)
Revenue
Recognised over time
– Property management services	2,024,034	1,465,792
– Value-added services to non-property owners	720,396	596,391
– Community value-added services	174,588	158,139
– Smart living technology solutions	47,728	26,871
Recognised at a point in time
– Value-added services to non-property owners	155,686	–
– Community value-added services	236,512	80,464
Total	3,358,944	2,327,657
Gross profit	997,354	635,678
Profit for the year attributable to owners of
the Company	617,594	366,452

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Note: As set out in the 2021 Annual Report, to reflect certain changes in business nature in 2021, the Group has made certain adjustments to the composition of its business lines, including: (i) value-added services to non-property owners was incorporated into property management services and the entire business line was reclassified as “space property management services”; and (ii) due to the merger and acquisition completed in 2021, catering services, which had previously been included under the “community value-added services”, were separated to become a standalone business line and classified as “local catering services”. The figures for FY2020 were also restated as if the business lines of the Group have been adjusted at the beginning of that period, to provide a consistent comparative basis in the 2021 Annual Report. On this basis, it is considered to be inappropriate to make a direct comparison using the classification of the FY2020 segment results stated in the 2021 Annual Report against that of FY2019 (defined hereafter) stated in the 2020 Annual Report as the composition of the respective segments are not comparable. In this regard, to enable comparison of a consistent nature, our analysis set out below is based on the information as set out in the 2020 Annual Report (i.e. on the basis before the relevant balances are restated).

Financial performance for the year ended 31 December 2019 (the “FY2019”) and the year ended 31 December 2020 (the “FY2020”)

As set out in the 2020 Annual Report, the Group’s revenue increased by approximately RMB1,031.2 million or 44.3% from approximately RMB2,327.7 million for FY2019 to approximately RMB3,358.9 million for FY2020. Such increase was mainly attributable to (i) the increase in revenue from property management services by approximately 38.1% from RMB1,465.8 million for the FY2019 to RMB2,024.0 million for FY2020, which was primarily driven by the Group’s business expansion, of which the GFA under management increased by approximately 29.6% from 120.5 million sq.m. as at 31 December 2019 to 156.2 million sq.m. as at 31 December 2020; (ii) the increase in revenue from value-added services to non-property owners by approximately 46.9% from RMB596.4 million for FY2019 to RMB876.1 million for FY2020, which was primarily driven by an increase in sales assistance services provided to property developers as a result of an increase in the number of sales offices; (iii) the increase in revenue from community value-added services by approximately 72.3% from RMB238.6 million for FY2019 to RMB411.1 million for FY2020, which was primarily driven by the increase in scale of the Group’s property management business and the expansion of the Group’s value-added service offerings to property owners; and (iv) the increase in revenue from smart living technology solutions by approximately 77.3% from RMB26.9 million for FY2019 to RMB47.7 million for FY2020, which was primarily driven by (i) the increase in smart solutions that the Group developed for Independent Third Parties; and (ii) the wider implementation of the Home-Life system* (生命家系統) in sales offices where the Group provides sales assistance services.

Accordingly, the Group’s gross profit increased by approximately 56.9% from approximately RMB635.7 million for FY2019 to approximately RMB997.4 million for FY2020. The profit attributable to owners of the Company amounted to approximately RMB617.6 million for FY2020, representing an increase of approximately 68.5% as compared to approximately RMB366.5 million for FY2019.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Summary of the consolidated statement of financial position of the Group extracted from the 2021 Annual Report

	As at 31	December
	2021	2020
	RMB’000	RMB’000
	(audited)	(audited)
		(Restated)
Non-current assets	983,506	109,416
Current assets	9,455,987	8,515,147
Non-current liabilities	193,249	46,082
Current liabilities	2,516,268	1,341,834
Net current assets	6,939,719	7,173,313
Equity attributable to the owners of the Company	7,657,005	7,198,336

Financial position as at 31 December 2020 and 2021

Total assets of the Group as at 31 December 2021 primarily comprised of (i) cash and cash equivalents balance, which amounted to approximately RMB4,922.3 million, representing a decrease of approximately 28.2% as compared to approximately RMB6,856.3 million as at 31 December 2020, primarily due to (a) the increase in performance guarantee deposits for acquisition of equity interests of approximately RMB600.0 million; (b) the increase in performance guarantee deposits for acquisition of the entity under common control of approximately RMB400.0 million; (c) dividend paid to shareholders of approximately RMB326.7 million during FY2021; (d) the acquisition of subsidiaries during FY2021 of approximately RMB331.6 million; (e) the increase in term deposits, not being part of the cash and cash equivalents balance, of approximately RMB245.2 million during FY2021, and partially offset by the increase in the Group’s net operating cash inflows; and (ii) trade and bills and other receivables and prepayments balance, which amounted to approximately RMB4,210.3 million, representing an increase of approximately RMB2,628.7 million as compared to approximately RMB1,581.6 million as at 31 December 2020, primarily attributable to (a) the increase in prepayments to third parties suppliers; (b) the increase in trade receivables from third parties; and (c) the increase in other receivables from related parties.

Total liabilities of the Group as at 31 December 2021 primarily comprised of (i) trade and bill and other payables, which amounted to approximately RMB1,725.5 million, representing an increase of approximately 96.3% as compared to approximately RMB879.2 million as at 31 December 2020, primarily attributable to the increase in trade payables and other payables to third parties; and (ii) contract liabilities balance, which amounted to approximately RMB586.2 million, representing an increase of approximately 51.5% as compared to approximately RMB386.9 million as at 31 December 2020.

As at 31 December 2021, the equity attributable to owners of the Company amounted to approximately RMB7,657.0 million, representing an increase of approximately RMB458.7 million or 6.4% as compared to approximately RMB7,198.3 million as at 31 December 2020.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Summary of the consolidated statement of financial position of the Group extracted from the 2020 Annual Report

	As at 31	December
	2020	2019
	RMB’000	RMB’000
	(audited)	(audited)
Non-current assets	60,178	1,191,346
Current assets	8,492,065	2,902,547
Non-current liabilities	4,361	1,148,468
Current liabilities	1,295,419	2,440,430
Net current assets	7,196,646	462,117
Equity attributable to the owners of the Company	7,214,152	482,700

Financial position as at 31 December 2019 and 2020

Total assets cash and cash equivalents of the Group as at 31 December 2020 amounted to approximately RMB6,840.3 million, representing an increase approximately 20 times as compared to approximately RMB333.1 million as at 31 December 2019, primarily attributable to the Company’s successful fund raising exercise in relation to the issuance of H shares on the Stock Exchange on 17 November 2020 (the “ H-share Listing ”).

The remaining total assets of the Group as at 31 December 2020 mainly comprised of trade and bills and other receivables and prepayments, which amounted to approximately RMB1,574.5 million, representing a decrease of approximately RMB913.4 million as compared to approximately RMB2,487.9 million as at 31 December 2019, primarily attributable to the decrease in other receivables from related parties.

As at 31 December 2020, total liabilities decreased to approximately RMB1,299.8 million from approximately RMB3,588.9 million as at 31 December 2019. Such decrease was mainly attributable to (i) the decrease in borrowings of approximately RMB1,830.0 million; and (ii) the decrease in trade and bill and other payables of approximately RMB564.0 million which primarily due to the decrease in other payables to related parties.

As at 31 December 2020, the equity attributable to owners of the Company amounted to approximately RMB7,214.2 million, representing an increase of approximately RMB6,731.5 million as compared to approximately RMB482.7 million as at 31 December 2019, which was primarily due to the funds raised from its H-share Listing and the finance results of the Group for the year ended 31 December 2019.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

2. Information of Jinke Property Group

As set out in the Letter from the Board, Jinke Property is a joint stock company established in the PRC with limited liability, the shares of which are listed on the Shenzhen Stock Exchange (Stock Code: 000656.SZ). Jinke Property Group is one of the leading property developers in the PRC and is principally engaged in the development of large scale mixed-use property projects, with extensive presence in the businesses of property management, environmental protection, construction, real estate construction management and commercial.

3. Overview of the PRC economy and property sector

According to information published on the website of the National Bureau of Statistics of the PRC ( http://data.stats.gov.cn ), the PRC recorded year-on-year growth in gross domestic product (“ GDP ”) in 2021 of approximately 8.1% (2020: 2.2%). However, there have been pockets of re-emergence of Coronavirus cases in parts of the PRC from time to time. In this connection, the PRC government has introduced various regulations and measures to manage and contain the re-emergence of Coronavirus cases, some of which may have temporarily affected the level of business activities in the subject area.

Pursuant to the 14th Five Year Plan (the “ 14th FYP ”) (十四五規劃) announced by the PRC government in March 2021, the target urbanisation rate of the resident population (常住人口城鎮化率) is set at 65.0% by 2025. In this connection, the PRC government had implemented policies to promote urbanisation in the PRC through to, among others, (i) accelerate the agricultural population urbanisation (加快農業轉移人口市民化) by implementing three main strategies, namely further reform of the household registration system (深化戶籍制度改革), implementation of the residence permit system (實施居住證制度) and improvement on the system for promoting urbanisation of agricultural population (健全促進農業轉移人口市民化的機制); and (ii) optimise urbanisation layout (優化城鎮化佈局和形態) by implementing three main strategies, namely the acceleration of the construction and advancement of urban agglomeration (加快城市群建設發展), enhance the drive of activities by central cities (增強中心城市輻射帶動功能) and speeding up of the development of small and medium-sized cities and characteristical towns (加快發展中小城市和特色鎮).

In addition, based on publication by the PRC government in relation to the 14th FYP, the PRC government will focus on enhancing the quality and efficacy of the overall economy with a view to attain sustainable and healthy development through, among others, (i) the improvement of supply chain modernisation (提升產業鏈供應鏈現代化水平); (ii) the development of strategical new industries (發展戰略性新興產業); (iii) the acceleration of modern service industries development (加快發展現代服務業); (iv) the coordination of infrastructure construction advancement (統籌推進基礎設施建設); and (v) the acceleration of the development of digitalisation* (加快數位化發展)[1] .

1 Publication of the State Council of the PRC titled “ 中共中央關於制定國民經濟和社會發展第十四個五年規劃和二零三五年遠景目標的建議 ” (Source: www.gov.cn/zhengce/2020-11/03/content_5556991.htm)

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The development of the PRC property market will continue to be influenced by changes in PRC government policies at a national and regional level, market environment as well as the overall economic development of the PRC. On this basis, it is expected that the increase in urbanisation rate in the PRC and continuous development of the PRC economy shall continue to drive the PRC property-related industries over time.

4. Reasons for and benefits of entering into the 2022 Master Property Management Services Agreement and the Loan Agreement

Based on information as set out in the Letter from the Board, we have summarised the reasons for and benefits of the entering into the 2022 Master Property Management Services Agreement and the Loan Agreement. As such, the following should be read in conjunction with the Letter from the Board.

The Group has a long and stable cooperative relationship with the Jinke Property Group. By entering into the Loan Agreement, the Jinke Property Group will be able to ensure the construction and delivery of properties projects under development which the Group will in turn be engaged to provide property management services for after those properties are delivered and is beneficial to the long-term development of the Group.

We understand from the Management that the progress of certain property development projects was adversely affected by the impact of COVID-19 and the Loan Agreement would give the Jinke Property Group more flexibility in the deployment of its overall short to medium term working capital to facilitate the timely delivery of its projects under development which may otherwise take longer to deliver due to the re-allocation and deployment of capital required. For further information considered by the Company in this connection, please refer to the Letter from the Board.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Meanwhile, the interest rate of 8.6% per annum contemplated under the Loan Agreement is higher than the one-year and five-year loan prime rates of 3.7% and 4.45% per annum, respectively, announced by the People’s Bank of China with effect from 20 May 2022, which will increase other incomes of the Group and is comparable to the interest rate of the existing bank loans (the “ Comparable Loans ”) of the Jinke Property Group, the key terms of which are substantially similar to the terms of the Loan. The following key terms of the Comparable Loans are extracted from the Letter from the Board and set out below:

				Interest		Securities/
		Principal		rate per	Default	guarantee
Counter party	Date	amount	Term	annum	ratio	provided
	(RMB’million)
Bank A in the PRC	November	300	36 months	8.5%	1.5	Yes
	2020
Bank B in the PRC	October 2020	260	24 months	8.5%	1.5	Yes
Bank C in the PRC	January 2020	700	36 months	8.5%	1.5	Yes

In respect of the comparability of the Comparable Loans, the Directors are of the view that such Comparable Loans are comparable to the Loan on the following basis: (i) the purpose of the Comparable Loans is for general working capital purpose; (ii) the maturity date of the Comparable Loans ranges from two to three years; (iii) the interest rate of the Comparable Loans is 8.5% per annum determined with reference to the loan prime rate announced by the People’s Bank of China; (iv) the default ratio of the Comparable Loans is 1.5 times of the corresponding interest rate of the Comparable Loans; and (v) the Comparable Loans are secured loans. Having considered the factors as set out in the Letter from the Board, the Directors consider that the interest rate (including the default ratio of 1.5) contemplated under the Loan Agreement is in line with market practice and is favourable to the Group.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In this connection, we have (i) discussed with and understood from the Management that the basis forming the selection criteria in respect of the Comparable Loans; and (ii) obtained and reviewed the documents in relation to the Comparable Loans, we concur with the Director’s view that the selection criteria of the Comparable Loans for the purpose of evaluating the interest rate under the Loan Agreement are reasonable.

Furthermore, prior to the entering into the Loan Agreement, the management of the Group has conducted due diligence and assessment on the repayment capability of Jinke Property by reviewing the consolidated financial statements and management accounts of Jinke Property. According to the published annual report of Jinke Property for the year ended 31 December 2021, the audited revenue and profit after taxation attributable to its shareholders amounted to approximately RMB112.3 billion and RMB3.6 billion, respectively. According to the quarterly report published by Jinke Property for the three months ended 31 March 2022, the unaudited net asset value attributable to its shareholder as at 31 March 2022 amounted to approximately RMB34,250.6 million. Such amount represents over 20 times of the principal amount of the Loan. In addition, the Directors have reviewed the information published by Jinke Property and did not note any material adverse matters in relation to Jinke Property which would materially impair its ability to fulfil its repayment obligations under the Loan Agreement as at the Latest Practicable Date. Based on the facts mentioned above, the Directors are of the view that Jinke Property has a sound credit worthiness and financial capacity as at the Latest Practicable Date.

In addition, (a) the Company shall have the discretion to offset any overdue amount with (i) any dividend distributable to the Shares held by Jinke Property; and (ii) any fees or account payable by the Company to Jinke Property in the ordinary and usual course of business; and (b) the Loan is secured by the Charged Assets, the Directors are of the view that the risk of Jinke Property failing to repay the Loan and the accrued interests is controllable. The Company, pursuant to the Loan Agreement, shall be entitled to exercise its rights to realise the Charged Assets and the proceeds from such realization shall be applied to repay the overdue amount, and has the discretion to offset any overdue amount with (i) any dividend distributable to the Shares held by Jinke Property; and (ii) any fees or account payable by the Company to Jinke Property in the ordinary and usual course of business in the event of default by the Jinke Property Group. Furthermore, the Company may demand the Jinke Property Group to provide additional charge assets as considered appropriate by the Group pursuant to the Loan Agreement. Accordingly, the Company may take one or more of these actions against the Jinke Property Group if any default occurs.

For reasons set out above, the Directors are of the view that the terms of each of the 2022 Master Property Management Services Agreement and the Loan Agreement including the interest rate of 8.6% were arrived at after arm’s length negotiations among the parties, and are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

5. 2022 Master Property Management Services Agreement

5.1 Principal terms of the 2022 Master Property Management Services Agreement

The principal terms of the 2022 Master Property Management Services Agreement have been extracted from the Letter from the Board and set out below:

Date: 29 July 2022

Parties: (1) the Company; and

(2) Jinke Property.
Scope of service: The Group has agreed to provide to the Jinke Property Group certain property management services, including but not limited to (i) property pre-delivery and after-sales services, including but not limited to (a) preliminary planning and design consultancy services; (b) management services for the display units and on-site sales office; (c) house inspection; (d) pre-delivery clean services; (e) pre-delivery preparation; and (f) after-sales repair and maintenance services; (ii) property management services for the properties owned or used by the Jinke Property Group, including but not limited to the unsold residential property units, car parking lots, office buildings and commercial properties; and (iii) other related services.

Term:

Commencing from 1 January 2023 and ending on 31 December 2025 (both days inclusive).

Pricing and other The fees to be charged for the property management services terms: under the 2022 Master Property Management Services Agreement shall be determined on arm’s length basis with reference to the pricing policy set out in the paragraph headed “Pricing Policy”.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The parties to the 2022 Master Property Management Services Agreement have also agreed as follows:

(1) the parties shall enter into Specific Agreements which will set out the necessary terms and conditions for the relevant transactions contemplated under the 2022 Master Property Management Services Agreement in the ordinary course of business after arm’s length negotiations on normal commercial terms; and
(2) the Specific Agreements shall conform with the principles and provisions set out in the 2022 Master Property Management Services Agreement.
Historical The historical annual caps for the two years ended 31 amounts: December 2021 and the year ending 31 December 2022 are RMB738.5 million, RMB932.1 million and RMB1,172.7 million, respectively. For the two years ended 31 December 2021 and the three months ended 31 March 2022, the service fees paid to the Group under the Master Property Management Services Agreement amounted to approximately RMB720.4 million, RMB914.6 million and RMB114.3 million, respectively. More properties will be provided to the Group for management in the second half of the 2022 as compared to the first half to make up for properties under development which were temporarily held up due to the impact of the COVID-19 pandemic in February and March 2022.

Annual cap: It is proposed that the annual caps for the transactions contemplated under the 2022 Master Property Management Services Agreement for the three years ending 31 December 2025 are expected not to exceed the followings:

For the year ending 31 December 2023 2024 2025 RMB RMB RMB (in millions) (in millions) (in millions) Annual caps 800 800 800

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In arriving at the above annual caps, the Directors have considered the following reasonable factors:

(i) the historical transaction amounts under the Master Property Management Services Agreement;
(ii) the estimated project number for display units and sales offices to be managed by the Group for the year ending 31 December 2023 of approximately 110 based on the estimated gross floor area of the properties to be pre-sold by the Jinke Property Group for the year ending 31 December 2023 of approximately 10 million square metres;
(iii) the estimated gross floor area sold and to be delivered by the Jinke Property Group for the year ending 31 December 2023 of approximately 12 million square metres, for which the Group will be engaged to provide pre-delivery and after-sales services;
(iv) the estimated gross floor area of properties owned and occupied by the Jinke Property Group for the year ending 31 December 2023 of approximately 7 million square metres, for which the Group will be engaged to provide property management services;
(v) the estimated number of car parking lots owned and occupied by the Jinke Property Group for the year ending 31 December 2023 of approximately 100,000, for which the Group will be engaged to provide property management services;
(vi) the estimated transaction amount for the year ending 31 December 2023 calculated based on the above factors and the pricing policy as more particularised in the section headed “ Pricing Policy ” below; and
(vii) an assumption that the gross floor area of the properties to be delivered or pre-sold by the Jinke Property Group will remain stable for the two years ending 31 December 2025.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Pricing policy

As a general principle, the prices to be charged by the Group under the 2022 Master Property Management Services Agreement will be determined in accordance with the following pricing principles:

(i) for property pre-delivery and after-sales services other than management services for the display units and on-site sales office, the Group would charge the Jinke Property Group at a price determined with reference to:
(a) the Group’s other contemporaneous transactions of similar services (in terms of the scope and requirement of services, the size and condition of projects, and level of difficulty of planning and design, etc.) carried out with Independent Third Parties; and
(b) prices charged by other property management companies in the PRC of comparable transactions with independent third parties (if available);
(ii) for management services for the display units and on-site sales office, the Group would charge the Jinke Property Group at a price determined with reference to:
(a) the anticipated operation costs (including but not limited to labor costs, administration costs and costs of materials) to be incurred by the Group to provide such management services plus a reasonable profit margin rate of around 10% in accordance with the standard pricing terms maintained by the Group; and
(b) the Group’s other contemporaneous transactions of similar management services carried out with Independent Third Parties.
(iii) for property management services for the properties owned or used by the Jinke Property Group, the Group would charge the Jinke Property Group at a fixed unit price per square meter or fixed amount per number determined with reference to:
(a) the Group’s other contemporaneous transactions of similar services (in terms of the scope and requirement of services, the location and condition of properties, and level of difficulty of management, etc.) carried out with Independent Third Parties;
(b) prices charged by other property management companies in the PRC of comparable transactions with independent third parties; and
(c) government-prescribed prices or guiding prices (if any) promulgated by the PRC government.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In determining the service prices chargeable and terms under the Specific Agreement for the purpose of the 2022 Master Property Management Services Agreement, the prices and terms offered by the Jinke Property Group will be reviewed and evaluated by the relevant personnel of the finance department and the management of the Group and will be compared against the prices obtained through the monthly regular price research conducted by the Group based on historical transaction with Independent Third Party(ies). Where the prices and terms of an offer from the Jinke Property Group are not less favorable to the Group than those offered by other Independent Third Party(ies), the Group may enter into such Specific Agreement to provide the relevant services to the Jinke Property Group.

The Group will keep negotiating with the Jinke Property Group to ensure the prices and terms of an offer from the Jinke Property Group are no less favorable to the Group than those available from Independent Third Party(ies) before entering into each Specific Agreement.

Having considered that (i) abovementioned specific pricing policies for each type of property management services; and (ii) the business department of the Group will obtain at least three transactions for reference, and, where applicable, the heads of relevant operating departments, the chief financial officer of the Group, the executive Directors and chairman of the Board will review and approve the offer from the Jinke Property Group to ensure that the terms of the offer reflecting the prevailing market conditions, the Directors consider, and we concur, that the above relevant procedures, if effectively implemented and carried out by the Group, can ensure the transactions contemplated under the 2022 Master Property Management Services Agreement to be fair and reasonable, no less favourable to the Company than those offered by independent customers and on normal commercial terms.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

5.2 Our analysis on the pricing basis and internal control procedures of the Group in respect of the 2022 Master Property Management Services Agreement

As set out in the Letter from the Board, the services under the 2022 Master Property Management Services Agreement primarily comprise of (i) property pre-delivery services; (ii) property management services for the properties owned or used by the Jinke Property Group, including but not limited to the unsold residential property units, car parking lots, office buildings and commercial properties; and (iii) other related services.

We understand from the Management that the fees to be charged for the property management services under the 2022 Master Property Management Services Agreement shall be determined on arm’s length basis with reference to (i) the size, location and positioning of the properties; (ii) the anticipated operation costs (including but not limited to labor costs, administration costs and costs of materials); and (iii) the prices charged by the Group for providing comparable services to Independent Third Parties.

In respect of the property pre-delivery services, we have obtained and reviewed of not less than 15 sampled transactions across the two years ended 31 December 2021 and the year ending 31 December 2022, which included transactions between the Group and (i) the Independent Third Parties (the “ Property Pre-delivery I3P Samples ”); and (ii) members of the Jinke Property Group (the “ Property Pre-delivery Connected Samples ”) to assess whether the service fees charged under Property Pre-delivery Connected Samples are comparable to those charged under the relevant Property Pre-delivery I3P Samples. Based on the transaction documents obtained, we noted that the rate of relevant service fees charged under the Property Pre-delivery Connected Samples were in line with those under the comparable Property Pre-delivery I3P Samples.

In respect of the property management services, we have obtained and reviewed not less than 10 sampled transactions across the two years ended 31 December 2021 and the year ending 31 December 2022, which included transactions between the Group and (i) the Independent Third Parties (the “ Property Management I3P Samples ”); and (ii) members of the Jinke Property Group (the “ Property Management Connected Samples ”) to assess whether the service fees charged under Property Management Connected Samples are comparable to those charged under the relevant Property Management I3P Samples. Based on the transaction documents obtained, we noted that the rate of relevant service fees charged under the Property Management Connected Samples were in line with those under the comparable Property Management I3P Samples and, where applicable, charged at rates prescribed by the PRC government and/or within the scope of the government guided prices.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In addition, we have discussed and understood from the Management that (i) the auditor of the Company will also conduct an annual review on the pricing terms and the annual caps under the 2022 Master Property Management Services Agreement; (ii) the finance department of the Company will closely monitor the aggregate transaction amounts and notify the management if the aggregate transaction amounts become close to 80% of the annual caps; (iii) regular checks will be conducted on an annually basis to review and assess whether the transactions contemplated under the relevant continuing connected transactions are conducted in accordance with the terms of the respective agreements and the price charged for a specific transaction is fair and reasonable and in accordance with the aforesaid pricing policy; and (iv) relevant personnel and management of the Group will review and assess the terms before entering into the Specific Agreements to ensure they are consistent with the principles and provisions set out in the 2022 Master Property Management Services Agreement. The Management has also confirmed that the transactions between the Group and Jinke Property Group under the Master Property Management Services Agreement have been in compliance with the relevant internal control procedures.

Based on our work and analysis performed and as set out above, including that, (i) the service fees of the sampled transactions with Jinke Property Group reviewed were in line with the service fees charged under the comparable Independent Third Parties samples; and (ii) where applicable, in accordance with the government guided prices, we are of the view that the effective implementation of the pricing policies and internal control measures are considered sufficient to ensure the continuing connected transactions under the 2022 Master Property Management Services Agreement are to be conducted on normal commercial terms that are fair and reasonable.

5.3 Proposed annual caps for the transactions contemplated under the 2022 Master Property Management Services Agreement

The proposed annual caps in respect of the services provided under the Master Property Management Services Agreement for the years ended 31 December 2020 and 2021 and the year ending 31 December 2022 were RMB738.5 million, RMB932.1 million and RMB1,172.7 million, respectively.

For each of the years ended 31 December 2020 and 2021 and the three months ended 31 March 2022, the total revenue generated by the Group for the provision of property management services to Jinke Property Group amounted to approximately RMB720.4 million, RMB914.6 million and RMB114.3 million, respectively. Such represented a utilisation rate of approximately 97.5%, 98.1% and 39.0%[2] on an annualised basis, respectively.

2 The annualised utilisation calculated based on the transaction amount for the three months ended 31 March 2022 is for illustration purposes only and does not purport the actual utilisation for the year ending 31 December 2022.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The table below sets out the Proposed Annual Caps of the service fees payable to the Group by Jinke Property Group under the 2022 Master Property Management Services Agreement for each of the three years ending 31 December 2025:

For the year ending 31 December 2023 2024 2025 RMB’million RMB’million RMB’million Proposed Annual Caps 800 (the “ 2023 800 (the “ 2024 800 (the “ 2025 Annual Cap ”) Annual Cap ”) Annual Cap ”)

Basis for determining the Proposed Annual Caps

As set out in the Letter from the Board, the Proposed Annual Caps were determined after taking into account:

(i) the historical transaction amounts under the Master Property Management Services Agreement;
(ii) the estimated project number for display units and sales offices to be managed by the Group for the year ending 31 December 2023 of approximately 110 based on the estimated gross floor area of the properties to be pre-sold by the Jinke Property Group for the year ending 31 December 2023 of approximately 10 million square metres;
(iii) the estimated gross floor area sold and to be delivered by the Jinke Property Group for the year ending 31 December 2023 of approximately 12 million square metres, for which the Group will be engaged to provide pre-delivery and after-sales services;
(iv) the estimated gross floor area of properties owned and occupied by the Jinke Property Group for the year ending 31 December 2023 of approximately 7 million square metres, for which the Group will be engaged to provide property management services;
(v) the estimated number of car parking lots owned and occupied by the Jinke Property Group for the year ending 31 December 2023 of approximately 100,000, for which the Group will be engaged to provide property management services;
(vi) the estimated transaction amount for the year ending 31 December 2023 calculated based on the above factors and the pricing policy as more particularised in the section headed “Pricing Policy” set out above; and
(vii) an assumption that the gross floor area of the properties to be delivered or pre-sold by the Jinke Property Group will remain stable for the two years ending 31 December 2025.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

5.4 Our analysis and work performed on the Proposed Annual Caps

As advised by the Management, the estimated demand of services to be provided by the Group under the 2022 Master Property Management Services Agreement is mainly driven by the progress and development of the relevant property projects of Jinke Property Group at the relevant time. In this connection, we have conducted background research on the business and operations of Jinke Property Group. With reference to the annual report for the year ended 31 December 2021 published by Jinke Property Group, the contracted GFA of Jinke Property Group increased from approximately 156 million sq.m. as at 31 December 2020 to approximately 240 million sq.m. as at 31 December 2021, representing an increase of approximately 53.8%. We also noted that the Group’s revenue increased by approximately 77.0% for the year ended 31 December 2021 as compared to those for the year ended 31 December 2020.

Based on the information as set out in the Letter from the Board, (i) the historical transaction amount under the Master Property Management Services Agreement for the years ended 31 December 2020 and 2021, represented a year-on-year growth of approximately 27.0%; and (ii) the calculated annualised transaction amount based on the three months ended 31 March 2022 of approximately RMB457.2 million as compared with that for the year ended 31 December 2021 represented a decline rate of approximately 50.0%. As advised by the Management, such decrease was mainly attributable to (i) the temporary effects caused by local Coronavirus prevention and/or containment policies in several cities which adversely affected the completion and handover of relevant properties; and (ii) the seasonality effect for certain services provided under the Master Property Management Services Agreement, as confirmed by the Management, attributable to the fact that the third quarter and fourth quarter of a calendar year are generally the peak season for the delivery of property units in the PRC property market which would in turn drive the need for property management services thereafter.

As the operations and scope of the property management services of the Group continues to expand, the 2023 Annual Cap, 2024 Annual Cap and 2025 Annual Cap of approximately RMB800 million each is at a comparable level to the full year historical transaction amount under the Master Property Management Services Agreement for each of the years ended 31 December 2020 and 2021, being approximately RMB720.4 million and RMB914.6 million, respectively.

Furthermore, the Management has, to the extent possible, factored in the aforesaid historical fluctuations as well as potential growth in demand with a view to avoid a situation whereby insufficient annual cap may lead to the possibility of a cessation of all relevant services in a short period of time and cause undue disruption to the subject projects. Such possible temporary cessation may be unduly burdensome and/or lengthy as it may subject to further administrative and/or approval procedures of two separate listed companies, such would not be in the interests of the Company’s operations as a whole.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

To further assess the reasonableness of the Proposed Annual Caps, we have obtained and reviewed a project schedule prepared by the Management in relation to the projects on hand, which may require relevant property services to be provided by the Group. We noted from the project schedule and advised by the Management that (i) there are not less than 100 projects, which may require the management services for display unit and on site sales office; (ii) there are over 600 projects up to 31 December 2025 that may require (a) house inspection services; (b) pre-delivery clean services; (c) pre-delivery preparation services; and (d) after-sales repair and maintenance services; (iii) there are approximately 250 projects relating to unsold residential property units, car parking lots, office buildings and commercial properties, up to 31 December 2025; (iv) the service fees to be charged under the government guided prices which is applicable to the property management services; (v) as at 31 December 2021, Jinke Property Group had a total saleable land resources with an aggregate estimated GFA of approximately 65.9 million sq.m. according to its annual report for the year ended 31 December 2021; and (vi) we understand that the project schedule as mentioned above were prepared based on information available as at the Latest Practicable Date and does not include any potential new projects from member(s) of Jinke Property Group, where the relevant information is not available as at the Latest Practicable Date, that may require property services to be provided by the Group during the three years ending 31 December 2023, 2024 and 2025 which may become available subsequently.

Having considered, among others, (i) the contracted GFA of Jinke Property Group increased by approximately 53.8% in 2021 as compared with that in 2020; (ii) the historical growth rate of the relevant transaction amounts between 2020 to 2021 was approximately 27.0% and that the actual transaction amount for the three months ended 31 March 2022 was relatively lower mainly due to Coronavirus related reasons which are temporary in nature and seasonality effect; (iii) the Proposed Annual Caps are at a comparable level to the full year historical transaction amount under the Master Property Management Services Agreement for each of the years ended 31 December 2020 and 2021, respectively; (iv) the Management has, to the extent possible, factored in the aforesaid historical fluctuations as well as potential growth in demand with a view to avoid a situation whereby the insufficient annual cap may lead to the possibility of a cessation of all relevant services in a short period of time and cause undue disruption to the subject projects; (v) the new/potential projects from Jinke Property Group as set out in the project schedule, of which the Group may provide certain property management services to; and (vi) the Group has the right but not the obligation to provide the relevant services to Jinke Property Group under the 2022 Master Property Management Services Agreement, we consider the basis for determining the Proposed Annual Caps to be fair and reasonable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

5.5 Our view on the 2022 Master Property Management Services Agreement

The Group has been providing property management services to Jinke Property Group for over 20 years since its establishment, through which the Group is familiar with the requirements and standards as expected from Jinke Property Group. It is therefore believed that the continuous cooperation between the Group and Jinke Property Group can foster growth of the Group in a cost-effective manner, the Management advised that as the Group has established communication channels with Jinke Property Group at different level of the organisation and understand the requirements of Jinke Property Group through collaboration in past projects, given the above, the Group will therefore be able to respond to the various requests of Jinke Property Group more efficiently and responsively than other new customers of the Group, thereby reducing the overall time and administrative costs.

Having considered the following factors, among others, (i) the continuing connected transactions under 2022 Master Property Management Services Agreement shall be conducted in accordance with the relevant pricing policy and in the ordinary and usual course of business of the Group; (ii) the Company shall continue to seek business opportunities from both Independent Third Parties and connected parties and assess such opportunities based on their merit as a whole; (iii) the continuing connected transactions under 2022 Master Property Management Services Agreement are a furtherance of the Group’s principal businesses; (iv) the Proposed Annual Caps, if approved, would facilitate the continuing connected transactions under 2022 Master Property Management Services Agreement to be conducted in an effective and efficient manner without the need for the Company to seek Shareholders’ approval on a transaction-by-transaction basis; and (v) the Group has the right but not the obligation to provide the relevant services to Jinke Property Group, which shall be on terms determined in accordance with the respective pricing policies, we concur with the Directors’ view that the continuing connected transactions under 2022 Master Property Management Services Agreement are in the interests of the Company as a whole.

6. Discloseable and connected transaction

The principal terms of the Loan Agreement with Jinke Property have been extracted from the Letter from the Board and summarised below:

Date: 29 July 2022 Parties: (1) the Company; and (2) Jinke Property. Principal amount: RMB1,500 million.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Interest rate:

The interest rate of 8.6% was a normal commercial term determined after arm’s length negotiations between the Company and Jinke Property with reference to (i) the loan prime rate mentioned in the paragraph headed “Reasons for and Benefits of Entering into the 2022 Master Property Management Services Agreement and the Loan Agreement”; and (ii) interest rate of the three of the existing bank loans of the Jinke Property Group, being approximately 8.5% per annum.

Term:

Drawdown and conditions precedent:

A fixed term commencing from the date of drawdown and ending on the Maturity Date, i.e. 20 December 2024.

The Loan will be available for drawdown upon satisfaction of the conditions precedent below:

(1) all necessary approvals and registration procedures in respect of the Loan having been completed by Jinke Property;
(2) details of the bank accounts for drawdown and repayment of the Loan having been provided by Jinke Property;
(3) there having been no breach of any term and condition of the Loan Agreement by Jinke Property and no event of default stipulated in the Loan Agreement having been occurred;
(4) no applicable laws and regulations and authorities having prohibited or restricting the Company to lend the Loan to Jinke Property; and
(5) the Loan Agreement having been approved by the Independent Shareholders at the EGM.

Repayment:

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Default interest:

Security:

As at the Latest Practicable Date, the Charged Assets has an appraised market value of at RMB2,700 million valued by an independent and qualified valuer, AVISTA Valuation Advisory Limited, using market approach as at 31 May 2022.

Purpose:

For general working capital purpose.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

6.1 Our analysis and work performed in connection with the Loan Agreement

(i) Nature of the Loan and the Loan amount

The Group is principally engaged in the provision of space property management services, community value-added services, local catering services and smart living technology solutions in the PRC. In its ordinary and usual of business, the Group has and shall continue to provide property management and related services to property owners and/or occupants who are independent third parties and connected parties, including the Jinke Property Group.

Based on the Letter from the Board, the Group has a long and stable co-operative relationship with the Jinke Property Group. By entering into the Loan Agreement, the Jinke Property Group will be able to ensure the construction and delivery of properties projects under development which the Group will in turn be engaged to provide property management services for after those properties are delivered and is beneficial to the long-term development of the Group. We understand from the Management that the progress of certain property development projects, which represented a small portion of the Jinke Property Group’s portfolio of property development projects as a whole and that the Jinke Property Group’s overall daily operations are ongoing based on our understanding with the Management as well as our review of the publications, such as its announcements, issued by the Jinke Property Group up to the Latest Practicable Date, was adversely affected by the impact of COVID-19 and the Loan Agreement would give the Jinke Property Group more flexibility in the deployment of its overall short to medium term working capital to facilitate the timely delivery of its projects under development which may otherwise take longer to deliver due to the re-allocation and deployment of capital required. According to the 2021 Annual Report, the revenue of the Group amounted to approximately RMB5,968.4 million for the year ended 31 December 2021, the revenue contribution from (a) the Jinke Property Group; (b) the respective joint ventures and associates of Jinke Property and the Company; and (c) other independent customers of the Group, accounted for approximately 17.2%, 2.4% and 80.4%, respectively. Having considered the aforesaid factors, the Directors considered, and we concurred that, the Jinke Property Group’s existing delivery progress of its property development projects does not have a prolonged material adverse effect on the daily operations of the Group.

According to the 2021 Annual Report, the total receivables balance of the Group which comprised of trade receivables, bill receivables and other receivables balances, amounted to approximately RMB5,745.6 million, in aggregate, as at 31 December 2021. Out of the above, approximately RMB1,117.1 million was amount due from the Jinke Property Group as at 31 December 2021. As the Group continued to provide a range of property management and related services to the Jinke Property

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Group during the year ending 31 December 2022, the abovementioned amount due from the Jinke Property Group in the form of receivables further increased by approximately RMB150 million during the three months ended 31 March 2022.

We understand from the Management that the facility amount under the Loan Agreement of RMB1,500 million is determined with reference to, among others, (a) the total outstanding receivables balances due from the Jinke Property Group as at the date of the Loan Agreement; and (b) potential receivable balances which may arise from the provision of property management and related services by the Group to the Jinke Property Group for the remaining months of 2022.

The Management further advised that the primary objective of the Loan is to formalise the collection process in relation to the existing receivables and to facilitate the settlement of the aforesaid outstanding receivable balances due from the Jinke Property Group to the Group in an orderly manner while reducing the credit risks associated with such outstanding receivable balances by securing the amount against the Charged Assets with an appraised value of approximately RMB2,700 million by the independent valuer, AVISTA Valuation Advisory Limited, as well as setting up a repayment schedule in instalments which Jinke Property shall repay 20% of the principal amount of the Loan on 20 January 2023 and thereafter on a half-yearly basis commencing from 20 June 2023 (but with a two-month grace period for each repayment date) and repay the last instalment of the Loan on the Maturity Date. Nonetheless, the Management advised that the finance department of the Company shall continue to monitor and prudently manage its operating cash inflows and outflows as well as its overall working capital requirements, and report to the senior management of the Company on a regular basis, whom shall act accordingly in a timely manner. In this connection, based on information on hand and barring unforeseen circumstances, we considered that the Company has sufficient measures in place to ensure that it has sufficient working capital to fund its operations for the next 12 months after the provision of Loan.

Having considered, among others, (a) the Group has no material outstanding interest bearing bank borrowings as at 31 December 2021 based on the 2021 Annual Report; (b) the Management’s expected financial position, financial performance and working capital of the Group for the next 12 months after the provision of the Loan; (c) the primary objective of the Loan is to formalise the collection process in relation to the existing receivables and to facilitate the settlement of the aforesaid outstanding receivable balances due from the Jinke Property Group to the Group in an orderly manner; (d) pursuant to the Loan Agreement, Jinke Property shall repay 20% of the principal amount of the Loan on 20 January 2023 and thereafter on a half-yearly basis commencing from 20 June 2023 (but with a two-month grace period for each repayment date) and repay the last instalment of the Loan on the Maturity Date; and (e) the aforementioned measures in place in connection with the ongoing monitoring of the Group’s working capital, the Directors are of the view, and we concur, that the Company has sufficient working capital for the next 12 months after the provision of the Loan.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(ii) Interest rate and tenure

The Management advised that the interest rate of 8.6% per annum pursuant to the Loan Agreement was determined after arm’s length negotiation between the parties. Jinke Property shall repay 20% of the principal amount of the Loan on 20 January 2023 and thereafter on a half-yearly basis commencing from 20 June 2023 (but with a two-month grace period for each repayment date) and repay the last instalment of the Loan on the Maturity Date.

In assessing the fairness and reasonableness of the interest rate and tenure under the Loan Agreement, we have reviewed and considered, among others, (a) the 1-year loan prime rate and 5-year loan prime rate announced by the People’s Bank of China (the “ PBOC Loan Prime Rate ”) of 3.7% and 4.45% as published in the website of the People’s Bank of China[3] ; (b) the cost of borrowing[4] of the Jinke Property Group amounted to approximately 7.69% per annum based on the annual report of Jinke Property Group for the year ended 31 December 2021; and (c) based on information as set out in the Letter from the Board, the analysis and work performed in relation to the Comparable Loans, the debt instruments of the Jinke Property Group as set out in the annual report of Jinke Property Group for the year ended 31 December 2021 as well as debt instrument issued by the Jinke Property Group during the first half of 2022 based on announcements published by the Jinke Property Group, the Jinke Property Group had various debt instruments outstanding, with (a) coupon ranging from 5.0% to 8.0% per annum; and (b) tenure of these debt instruments ranged from three years to five years.

Having considered the above, including (a) the interest rate of the Loan is higher than each of the 1-year PBOC Loan Prime Rate, the 5-year PBOC Loan Prime Rate, the costs of borrowing* of the Jinke Property Group of approximately 7.69% per annum as set out in the annual report of Jinke Property Group for the year ended 31 December 2021 and the range of coupon of 5.0% to 8.0% per annum of the existing debt instruments of the Jinke Property Group as analysed above; and (b) the tenure of the Loan is shorter than the tenure of the existing debt instruments of the Jinke Property Group as mentioned above, we are of the view that the interest rate and the tenure of the Loan are fair and reasonable.

(iii) Security

Pursuant to the Loan Agreement and as advised by the Management, Jinke Property Group shall charge assets with an aggregated appraised market value of RMB2,700 million as at 31 May 2022 (the “ Value of Charged Assets ”) in favour

3 People’s Bank of China website ( Source: http://www.pbc.gov.cn/zhengcehuobisi/125207/125213/ 125440/3876551/4559923/index.html )

4 Costs of borrowing is represented by the capitalisation rate of borrowing costs* (借款費用資本化金額的資本化率)

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

of the Company, which include not less than 42,000 units of car parking spaces and not less than 200 retail shop units, with an aggregated gross floor area of approximately 100,000 square metres, as security for the Loan to guarantee the repayment obligations under the Loan Agreement. The facility amount of RMB1,500 million represents approximately 55.6% of the Value of Charged Assets. We understand from the Management that the outstanding relevant receivables balance due from the Jinke Property Group, which will be converted into the loan amount under the Loan Agreement, are not currently secured against any assets.

(iv) Repayment capability and internal control

Prior to entering the Loan Agreement, the Management has conducted due diligence and assessment on the repayment capability of the Jinke Property Group, including the review of the consolidated financial statements and management accounts of the Jinke Property Group.

In this connection, we have considered that Jinke Property Group is sizeable and reputable corporation listed on the Shenzhen Stock Exchange with a market capitalisation in excess of RMB12 billion as at 15 July 2022. We also reviewed the published annual report of the Jinke Property Group for the year ended 31 December 2021 and noted that the audited revenue and profit after taxation attributable to the shareholders of the Jinke Property Group amounted to approximately RMB112.3 billion and RMB3.6 billion, respectively. According to the quarterly report published by the Jinke Property Group for the three months ended 31 March 2022 of the Jinke Property Group, the unaudited net asset value attributable to the shareholders as at 31 March 2022 amounted to approximately RMB34,250.6 million, such represents over 20 times the size of the facility amount of RMB1,500 million. In addition, based on our review of information published by the Jinke Property Group and as confirmed by the Management, we did not note any material adverse matters in relation to the Jinke Property Group which would materially impair its ability to fulfil its repayment obligations under the Loan Agreement as at the Latest Practicable Date.

In addition, as part of our work and analysis, we have obtained and reviewed a repayment schedule provided by the Management which supports how the repayment amount under the Loan can be satisfied (the “ Repayment Schedule ”). The repayment schedule was considered to be prepared on a relatively conservative basis as it did not take into account, among others, future external financing which may be available and/or obtained by the Jinke Property Group. The Repayment Schedule sets out how the repayment amount may be satisfied by a combination of funding sources in a non-exhaustive manner, such included (a) level of operating cash inflow expected to be generated from the Jinke Property Group during the relevant period; and (b) estimated dividends receivable by the Jinke Property Group from the Company.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Furthermore, we also reviewed the 2020 Annual Report and 2021 Annual Report and noted that profit attributable equity shareholders of the Company for the years ended 31 December 2020 and 2021 amounted to approximately RMB616.6 million and approximately RMB1,057.2 million, respectively, and that the equity attributable to equity shareholders of the Company amounted to approximately RMB7,657.0 million as at 31 December 2021.

Based on the Letter from the Board, we noted that Jinke Property is the controlling shareholder of the Company, holding approximately 30.33% of the issued share capital of the Company as at the Latest Practicable Date. Based on the closing price of HK$15.02 per Share as at 15 July 2022, the market value of the Shares held by the Jinke Property Group was in excess of HK$3,000.0 million.

As advised by the Management, the Group shall adopt the following risk control/internal control measures, including (a) the Group shall assign designated personnel to monitor and review the latest financial position, assess the default risks and payment ability of the Jinke Property Group on an ongoing basis and will report to the management of the Company regularly; and (b) the management of the Company will also report the default risks and corporate governance risks in association with the Jinke Property Group to the independent non-executive Directors during each of the audit committee meetings, if necessary.

Having considered, among other factors, including (a) the Jinke Property Group is a sizeable and reputable company listed on the Shenzhen Stock Exchange with over 30 years of track record; (b) the Loan is secured by the Charged Assets, which has an appraised value of RMB2,700 million, being notably higher than the Loan amount; (c) pursuant to the Loan Agreement, the total value of the Charged Assets shall in any event be equal to the unpaid principal amount of the Loan divided by a charge rate of 60%; (d) the Company shall be entitled to exercise its rights to realise the Charged Assets and the proceeds from such realization shall be applied to repay the overdue amount, and has the discretion to offset any overdue amount with any dividend distributable to the Shares held by Jinke Property, and any fees or account payable by the Company to Jinke Property in the ordinary and usual course of business in the event of default by the Jinke Property Group, pursuant to the Loan Agreement; (e) in the event that the repayment of loan by the Jinke Property Group becomes overdue, the Group is entitled to exercise its rights to enforce the Charged Assets pursuant to the applicable laws and regulations as well as demand the Jinke Property Group to provide additional charge assets as considered appropriate by the Group; (f) the unaudited net asset value attributable to the shareholders of the Jinke Property Group as at 31 March 2022 amounted to approximately RMB34,250.6 million, which is significantly higher than the Loan amount; (g) the Jinke Property Group recorded net operating cash inflow of approximately RMB14,204.1 million for the year ended 31 December 2021; (h) our work performed in connection with the credit worthiness and financial capability of the Jinke Property Group, including the Repayment Schedule, as detailed above; (i) the internal measures in place in connection with the ongoing monitoring of the Group’s working capital as detailed under paragraph headed “(i) Nature of the Loan

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

and the Loan amount” in this section above; and (j) the risk and internal control measures implemented by the Company, we considered, barring unforeseen circumstances, the Jinke Property Group’s credit worthiness and financial capability are reasonable in connection with the repayment of the Loan and that the Company has sufficient measures in place to protect its Shareholders’ interests in the event of a default of the Loan by the Jinke Property Group.

(v) Potential financial effects of the Loan Agreement

Earnings

According to the Management, the Group is expected to derive interest income at a rate of 8.6% per annum from the outstanding facility amount under the Loan Agreement over the tenure of the Loan.

Assets

Pursuant to the Loan Agreement, the amount outstanding will be repayable in accordance to the schedule stipulated thereunder. On this basis, the receivables balance will decrease and the Group’s cash balance will increase upon the settlement by the Jinke Property Group in instalments pursuant to the Loan Agreement.

(vi) Summary

Based on our analysis and work performed as set out above as well as the fact that the primary objective of the Loan is to formalise the collection process of the existing receivables and to facilitate the settlement of the outstanding receivable balances due from the Jinke Property Group to the Group in an orderly manner while reducing the credit risks associated with such outstanding receivable balances by securing it against the Charged Assets in the amount of approximately RMB2,700 million in addition to setting up a repayment schedule in instalments which Jinke Property shall repay 20% of the principal amount of the Loan on 20 January 2023 and thereafter on a half-yearly basis commencing from 20 June 2023 (but with a two-month grace period for each repayment date) and repay the last instalment of the Loan on the Maturity Date, we are of the view that the terms under the Loan Agreement to be fair and reasonable.

VI. RECOMMENDATION

In formulating our recommendation to the Independent Board Committee and the Independent Shareholders, we have considered the above principal factors and reasons, in particular:

(i) the reasons for and benefits of entering into the 2022 Master Property Management Services Agreement and the Loan Agreement;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(ii) the services to be provided by the Group under the 2022 Master Property Management Services Agreement are a furtherance of the Group’s businesses and shall broaden the income base of the Group;
(iii) the transactions contemplated under the 2022 Master Property Management Services Agreement shall be conducted on normal commercial terms that are fair and reasonable, detailed analysis of which have been set out under the sections headed “5.2 Our analysis on the pricing basis and internal control procedures of the Group in respect of the 2022 Master Property Management Services Agreement”;
(iv) our work and analysis on the basis for determining the Proposed Annual Caps; and
(v) the transactions contemplated under the Loan Agreement shall be conducted on normal commercial terms that are fair and reasonable, detailed analysis of which have been set out under the sections headed “6.1 Our analysis and work performed in connection Loan Agreement”,

we consider that (i) in respect of the 2022 Master Property Management Services Agreement, (a) the terms thereunder (including the Proposed Annual Caps) are on normal commercial terms and are fair and reasonable; and (b) the transactions contemplated thereunder (including the Proposed Annual Caps) are conducted in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole; and (ii) in respect of the Loan Agreement, (a) the terms thereunder are on normal commercial terms and are fair and reasonable; and (b) albeit the transactions contemplated thereunder are not conducted in the ordinary and usual course of business of Group, they are in the interests of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend, and we ourselves recommend, the Independent Shareholders to vote in favour of the relevant ordinary resolutions to be proposed at the EGM to approve the 2022 Master Property Management Services Agreement (including the Proposed Annual Caps) and the Loan Agreement.

Yours faithfully, for and on behalf of Red Sun Capital Limited Lewis Lai Managing Director

Mr. Lewis Lai is a licensed person registered with the SFC and a responsible officer of Red Sun Capital Limited to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO and has over 15 years of experience in the corporate finance industry.

For identification purposes only

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GENERAL INFORMATION

APPENDIX I

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

Directors’, Supervisors’ and Chief Executive’s Interests

As at the Latest Practicable Date, the interests and short positions of the Directors, supervisors and chief executive of the Company in the shares, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which were recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code are set out below:

(I) Interests and Short Position of the Directors, Supervisors and Chief Executive of the Company in the Shares and Underlying Shares of the Company and its Associated Corporations

Interests in the Company

As at the Latest Practicable Date, none of the Directors, supervisors or chief executive of the Company had any interests or short positions in the shares, underlying shares and debentures of the Company, which were recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

Interest in associated corporations of the Company

	Name of
	associated	Nature of	Interest in	Percentage
Name	corporation	interest	shares(1)	holding
				(approx.)
Xu Guofu (徐國富)	Jinke Property	Beneficial	1,126,993 (L)	0.02%
		owner
Luo Licheng (羅利成)	Jinke Property	Beneficial	9,737,909 (L)	0.18%
		owner
Yu Yong (余勇)	Jinke Property	Beneficial	100 (L)	0.0000019%
		owner

Note:

(1) The letter “L” denotes the person’s long position in the shares.

– 58 –

GENERAL INFORMATION

APPENDIX I

Save as disclosed above, as at the Latest Practicable Date, none of the Directors, supervisors and chief executive of the Company had interests or short positions in the shares, underlying shares and debentures of the Company’s associated corporations (within the meaning of Part XV of the SFO) which were recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

Save as disclosed above, none of the Directors is a director or employee of a company which has an interest in the Shares and underlying Shares of the Company which would fall to be disclosed under the provisions of Divisions 2 and 3 of Part XV of the SFO.

3. COMPETING BUSINESS

As at the Latest Practicable Date, so far as the Directors were aware, none of the Directors nor their respective close associates had any direct or indirect interests in any business that constitutes or may constitute a competing business of the Company.

4. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, no Director had entered into any service contract or letter of appointment with any member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

5. DIRECTORS’ INTEREST IN ASSETS/CONTRACTS AND OTHER INTERESTS

As at the Latest Practicable Date:

(a) none of the Directors had any direct or indirect interest in any assets which have been, since 31 December 2021 (being the date to which the latest published audited consolidated financial statements of the Group were made up), acquired, disposed of by, or leased to any member of the Group, or are proposed to be acquired, disposed of by, or leased to any member of the Group;
(b) none of the Directors was materially interested, directly or indirectly, in any contract or arrangement subsisting as at the Latest Practicable Date which is significant in relation to the business of the Group; and
(c) save for Mr. Luo Licheng and Mr. Liang Zhongtai, none of the other Directors is also an employee or director of any substantial shareholder of the Company.

– 59 –

GENERAL INFORMATION

APPENDIX I

6. QUALIFICATION OF EXPERT AND CONSENT

The qualification of the expert who has given an opinion or advice in this circular is as follow:

Name

Qualification

Red Sun Capital a licensed corporation to carry out Type 1 (dealing in securities) Limited and Type 6 (advising on corporate finance) regulated activity under the SFO

As at the Latest Practicable Date, the expert mentioned above (i) has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter or opinion and the references to its names included herein in the form and context in which it is respectively included; (ii) has no direct or indirect shareholding in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for shares in any member of the Group; and (iii) has no direct or indirect interests in any assets which have been, since 31 December 2021 (being the date to which the latest published audited consolidated financial statements of the Group were made up), acquired or disposed of by or leased to any member of the Group, or which are proposed to be acquired or disposed of by or leased to any member of the Group.

7. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors have confirmed that there is no material adverse change in the financial or trading position of the Company since 31 December 2021, being the date to which the latest published audited consolidated financial statements of the Group were made up.

8. DOCUMENTS ON DISPLAY

A copy of each of the following documents will be available on display online on the Stock Exchange’s website and on the Company’s website from the date of this circular up to and including the date of the EGM:

(a) the written consent of the Independent Financial Adviser, which was referred to in the section headed “Qualification of Expert and Consent” in this appendix;
(b) the 2022 Master Property Management Services Agreement; and
(c) the Loan Agreement.

– 60 –

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

APPENDIX II

The details of the Proposed Amendments are as follows (shown with strikethrough to denote text to be deleted and underline to denote text to be added):

Existing Existing Articles* Amended Articles Articles No. The scope of business of the Company: The scope of business of the Company: licensed items: labour dispatch services, licensed items: labour dispatch services, operational services on urban household operational services on urban household waste, the installment, modification and waste, the installment, modification and repairing of special equipment (for items repairing of special equipment (for items required to be approved by laws, operation required to be approved by laws, operation may be conducted only with the approval of may be conducted only with the approval of relevant departments, and specific licensed relevant departments, and specific licensed items should be determined by approval items should be determined by approval documentations or licenses issued by relevant documentations or licenses issued by relevant departments); general items: property departments); general items: property management (undertaking businesses based management (undertaking businesses based on the items approved in the license); parking on the items approved in the license); parking lot management services; property agency lot management services; property agency (excluding property appraisal); green (excluding property appraisal); green maintenance; seedling operation; construction maintenance; seedling operation; construction and management of green projects; delivery of and management of green projects; delivery of green materials; river channel clearing; green materials; river channel clearing; cleansing services; cleaning services; cleansing services; cleaning services; household management services; septic tank household management services; septic tank Article 12 cleaning services; external walls cleaning cleaning services; external walls cleaning services; catering management; nursing services; catering management; nursing services for patients; meeting services; indoor services for patients; meeting services; indoor and outdoor decoration; houses repairing and outdoor decoration; houses repairing services (the house structure shall not be services (the house structure shall not be changed); swimming pool management; changed); swimming pool management; logistics management services for companies; logistics management services for companies; hotel management; information consultancy hotel management; information consultancy services (excluding licensed information services (excluding licensed information consultancy services); human resources consultancy services); human resources management (excluding professional management (excluding professional intermediary activities); health consultancy intermediary activities); health consultancy services (excluding diagnosis and treatment services (excluding diagnosis and treatment services); services for the aged; urban parks services); services for the aged; urban parks management; urban green management; management; urban green management; etiquette services; construction of parks and etiquette services; construction of parks and green projects; heat generation and supply; green projects; heat generation and supply; forest pest prevention services; buildings forest pest prevention services; buildings cleaning services; household management services; hospital management; scenic spots management; scenic areas management;

– 61 –

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

APPENDIX II

			Existing	Existing	Articles*	Articles*					Amended Articles
cleaning		services;		household				management			municipal facilities management;
services; hospital management;								scenic spots			professional cleaning, washing and
management;			scenic		areas		management;				disinfection services; construction projects;
municipal		facilities management						(Except		for	general aviation services; aviation business
items	that		are	subject to			approval			in	services; aviation operation and support
accordance			with	the	laws, the				business		services; air transport cargo packing
activities should be conducted independently											services; road management and
with the business licenses						in accordance with					maintenance; conference and exhibition
the laws).											services; water-related consulting services;
											natural water collection and distribution;
The scope		of business			of	the Company shall					fire-fighting technical services; urban and
be the	scope of			business as			approved			by	rural amenities management; water
company registration authorities.											pollution control; business agency services;
											catering services; daily life services for
											residents; cultural venues management
											services; water resources management;
											accommodation services; organization of
											cultural and artistic exchange activities;
											marketing planning; commercial complex
											management services; information system
											integration services; environmental
											protection monitoring; business
											management consulting; furniture
											installation and repair services; residential
											interior decoration. (Except for items that
											are subject to approval in accordance with the
											laws, the business activities should be
											conducted independently with the business
											licenses in accordance with the laws).
											The scope of business of the Company shall
											be the scope of business as approved by
											company registration authorities.

– 62 –

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

APPENDIX II

Existing Articles No.	Existing Articles*	Amended Articles
	A shareholder of the Company is a person who	A shareholder of the Company is a person who
	lawfully holds shares of the Company and	lawfully holds shares of the Company and
	whose name (title) is recorded in the register	whose name (title) is recorded in the register
	of members.	of members.
	A shareholder shall enjoy relevant rights and	A shareholder shall enjoy relevant rights and
	assume relevant obligations in accordance	assume relevant obligations in accordance
	with the class and number of shares he/she	with the class and number of shares he/she
	holds. Shareholders holding the same class of	holds. Shareholders holding the same class of
	shares shall enjoy the same rights and assume	shares shall enjoy the same rights and assume
	the same obligations.	the same obligations.
	Holders of each class of shares of the	Shareholders are entitled to speak and vote
	Company shall enjoy equal rights in any	at general meetings (unless individual
	distribution of dividends or otherwise.	shareholders are required to abstain from
		voting on individual matters in accordance
	Where the shareholder of the Company is a	with applicable laws and regulations and
	legal person, its legal representative, the agent	the listing rules of the stock exchange where
	of its legal representative or a person	the Company’s shares are listed).
	authorised by the resolution of the board of
	directors or other decision-making authorities	Holders of each class of shares of the
Article 48	shall exercise its rights on its behalf.	Company shall enjoy equal rights in any
		distribution of dividends or otherwise.
	No powers shall be taken to freeze or
	otherwise impair any of the rights attaching to	Any shareholder is entitled to appoint a
	any shares by reason only that the person or	proxy, but such proxy need not be a
	persons who are interested directly or	shareholder of the Company. Where the
	indirectly therein have failed to disclose their	shareholder of the Company is a legal person,
	interests to the Company.	its legal representative, the agent of its legal
		representative or a person authorised by the
		resolution of the board of directors or other
		decision-making authorities shall exercise its
		rights on its behalf. If the legal person has
		appointed a representative to attend any
		meeting, he shall be deemed to be present in
		person.
		No powers shall be taken to freeze or
		otherwise impair any of the rights attaching to
		any shares by reason only that the person or
		persons who are interested directly or
		indirectly therein have failed to disclose their
		interests to the Company.

– 63 –

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

APPENDIX II

Existing Articles No.		Existing Articles*		Amended Articles
	Holders of the ordinary shares of the		Holders of the ordinary shares of the
	Company shall enjoy the following rights in		Company shall enjoy the following rights in
	accordance with applicable laws and the		accordance with applicable laws and the
	Articles of Association:		Articles of Association:
	(I)	the right to dividends and other profit	(I)	the right to dividends and other profit
		distributions in proportion to the		distributions in proportion to the
		number of shares held;		number of shares held;
	(II)	the right to propose, convene and	(II)	the right to propose, convene and
		preside over, to attend or appoint		preside over, to attend or appoint
		proxies to attend general meetings and		proxies to attend general meetings and
		to exercise the corresponding voting		to exercise the corresponding voting
		right;		right;
	(III)	the right to supervise, present proposals	(III)	the right to supervise, present proposals
		or raise enquiries about the Company’s		or raise enquiries about the Company’s
		business operations;		business operations;
	(IV)	the right to transfer, give as a gift or	(IV)	the right to transfer, give as a gift or
		pledge the shares in their possession in		pledge the shares in their possession in
		accordance with laws, administrative		accordance with laws, administrative
		regulations, departmental rules,		regulations, departmental rules,
		normative documents and the listing		normative documents and the listing
Article 49		rules of the stock exchange where the shares of the Company are listed and		rules of the stock exchange where the shares of the Company are listed and
		the Articles of Association;		the Articles of Association;
	(V)	the right to obtain relevant information	(V)	The Hong Kong branch register of
		in accordance with the Articles of		members must be available for
		Association, including:		inspection by shareholders, however,
	1.	The right to obtain a copy of the		the Company is allowed to close the
		Articles of Association, subject to		register of members on terms
		payment of a reasonable fee;		equivalent to section 632 of the
	2.	The right to inspect for free and copy,		Companies Ordinance (The Laws in
		subject to a payment of a reasonable		Hong Kong).
		fee:	(VI)	the right to obtain relevant information
	(1)	All parts of the register of members;		in accordance with the Articles of
	(2)	Personal particulars of each of the		Association, including:
		Company’s directors, supervisors,	1.	The right to obtain a copy of the
		general manager, and other senior		Articles of Association, subject to
		management, including:		payment of a reasonable fee;
	a)	present and former name or alias;	2.	The right to inspect for free and copy,
	b)	principal address (place of domicile);		subject to a payment of a reasonable
	c)	nationality;		fee:
	d)	full-time and all other part-time
		occupations and positions;
	e)	identity document and its number.

– 64 –

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

APPENDIX II

		Existing Articles*		Amended Articles
(3)		the state of the Company’s issued share	(1)	All parts of the register of members;
		capital and special resolution of the	(2)	Personal particulars of each of the
		shareholders;		Company’s directors, supervisors,
(4)		reports showing the aggregate par		general manager, and other senior
		value, quantity, the maximum and		management, including:
		minimum prices paid in respect of each	a)	present and former name or alias;
		class of shares repurchased by the	b)	principal address (place of domicile);
		Company since the end of the last	c)	nationality;
		financial year, and the aggregate	d)	full-time and all other part-time
		amount paid by the Company for this		occupations and positions;
		purpose;	e)	identity document and its number.
(5)		counterfoils of corporate bonds,	(3)	the state of the Company’s issued share
		minutes of general meetings,		capital and special resolution of the
		resolutions of the meetings of the board		shareholders;
		of directors, resolutions of the	(4)	reports showing the aggregate par
		Supervisory Committee meetings and		value, quantity, the maximum and
		financial and accounting reports;		minimum prices paid in respect of each
(6)		copy of the latest annual return filed		class of shares repurchased by the
		with the company registration		Company since the end of the last
		authorities of the PRC or other		financial year, and the aggregate
		competent authorities (if applicable).		amount paid by the Company for this
		The Company shall make the foregoing		purpose;
		documents available for inspection by	(5)	counterfoils of corporate bonds,
		shareholders at its domicile and at its		minutes of general meetings,
		place of business in Hong Kong.		resolutions of the meetings of the board
(VI)		in the event of the termination or		of directors, resolutions of the
		liquidation of the Company, the right to		Supervisory Committee meetings and
		participate in the distribution of the		financial and accounting reports;
		remaining property of the Company in	(6)	copy of the latest annual return filed
		proportion to the number of shares		with the company registration
		held;		authorities of the PRC or other
(VII)		such other rights conferred by		competent authorities (if applicable).
		laws, administrative regulations,		The Company shall make the foregoing
		departmental rules, normative		documents available for inspection by
		documents and the listing rules of the		shareholders at its domicile and at its
		stock exchange where the shares of the		place of business in Hong Kong.
		Company are listed and the Articles of	(VII)	in the event of the termination or
		Association.		liquidation of the Company, the right to
				participate in the distribution of the
If	a	shareholder asks to review the		remaining property of the Company in
information mentioned in the preceding				proportion to the number of shares
Article or makes a request for information, he				held;
or she		shall submit to the Company written	(VIII)	such other rights conferred by
documents evidencing the class and number				laws, administrative regulations,
of shares he or she holds. The Company shall				departmental rules, normative
provide the same as requested by the				documents and the listing rules of the
shareholder after authenticating his or her				stock exchange where the shares of the
identity.				Company are listed and the Articles of
				Association.

– 65 –

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

APPENDIX II

Existing Articles No.		Existing Articles*			Amended Articles
			If	a	shareholder asks to review the
			information mentioned in the preceding
			Article or makes a request for information, he
			or she shall submit to the Company written
			documents evidencing the class and number
			of shares he or she holds. The Company shall
			provide the same as requested by the
			shareholder after authenticating his or her
			identity.
	The	general meeting shall exercise the	The		general meeting shall exercise the
	following functions and powers:		following functions and powers:
	(I)	to decide on the operating policies and	(I)		to decide on the operating policies and
		investment plans of the Company;			investment plans of the Company;
	(II)	to elect and replace directors and to	(II)		to elect and replace directors and to
		decide on matters relating to their			decide on matters relating to their
		remuneration;			remuneration;
	(III)	to elect and replace non-employee	(III)		to elect and replace non-employee
		representative supervisors and to			representative supervisors and to
		decide on matters relating to their			decide on matters relating to their
		remuneration;			remuneration;
	(IV)	to consider and approve reports of the	(IV)		to consider and approve reports of the
		board of directors;			board of directors;
	(V)	to consider and approve reports of the	(V)		to consider and approve reports of the
		supervisory committee;			supervisory committee;
	(VI)	to consider and approve the annual	(VI)		to consider and approve the annual
		financial budgets and final accounts of			financial budgets and final accounts of
		the Company;			the Company;
	(VII)	to consider and approve the profit	(VII)		to consider and approve the profit
		distribution plans and loss recovery			distribution plans and loss recovery
		plans of the Company;			plans of the Company;
	(VIII)	to make resolutions on increasing or	(VIII)		to make resolutions on increasing or
Article 54		reducing the registered capital of the Company;			reducing the registered capital of the Company;
	(IX)	to make resolutions on the merger,	(IX)		to make resolutions on the merger,
		division, dissolution, liquidation or			division, dissolution,
		change in corporate form of the			liquidation/winding-up or change in
		Company;			corporate form of the Company;
	(X)	to make resolutions on the issuance of	(X)		to make resolutions on the issuance of
		corporate bonds;			corporate bonds;
	(XI)	to make resolutions on the engagement,	(XI)		to make resolutions on the engagement,
		dismissal or non-renewal of the			dismissal or non-renewal of the
		engagement of accounting firms by the			engagement of accounting firms by the
		Company;			Company;
	(XII)	to amend the Articles of Association;	(XII)		to amend the Articles of Association;
	(XIII)	to consider matters raised by a	(XIII)		to consider matters raised by a
		shareholder alone or shareholders			shareholder alone or shareholders
		together holding more than three			together holding more than three
		percent (including three percent) of the			percent (including three percent) of the
		shares of the Company;			shares of the Company;
	(XIV)	to consider other matters that required	(XIV)		to consider other matters that required
		to be resolved by the general meeting			to be resolved by the general meeting
		as prescribed by laws, administrative			as prescribed by laws, administrative
		regulations, departmental rules, the			regulations, departmental rules, the
		listing rules of the stock exchange			listing rules of the stock exchange
		where the shares of the Company are			where the shares of the Company are
		listed and the Articles of Association.			listed and the Articles of Association.

– 66 –

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

APPENDIX II

Existing Existing Articles* Amended Articles Articles No. When the Company is to hold a general When the Company is to hold a general meeting, it shall issue a written notice 20 clear meeting, it shall issue a written notice 20 ~~clear~~ business days prior to an annual general ~~business~~ days prior to an annual general meeting or the later of 10 business days or 15 meeting or ~~the later of 10 business days or~~ 15 days prior to an extraordinary general days prior to an extraordinary general meeting, informing all shareholders of the meeting, informing all shareholders of the Article 59 date, time and place of the meeting and the date, time and place of the meeting and the matters to be considered at the meeting and matters to be considered at the meeting and stating that shareholders may appoint a proxy stating that shareholders may appoint a proxy in writing to attend the meeting and vote on in writing to attend the meeting and vote on their behalf. Regarding the calculation of the their behalf. Regarding the calculation of the notice period, the date of the meeting shall not notice period, the date of the meeting shall not be included. be included. The instrument appointing a voting proxy The instrument appointing a voting proxy shall be deposited at the domicile of the shall be deposited at the domicile of the Company or at such other place as specified in Company or at such other place as specified in the notice of the meeting within 24 hours prior the notice of the meeting within 24 hours prior to the meeting at which the proxy is to the meeting at which the proxy is authorised to vote or 24 hours prior to the authorised to vote or 24 hours prior to the specified time of the vote. If the instrument is specified time of the vote. If the instrument is signed by another person authorised by the signed by another person authorised by the principal, the power of attorney or other principal, the power of attorney or other document authorizing the signature shall be document authorizing the signature shall be notarized. The notarized power of attorney or notarized. The notarized power of attorney or other authorizing document shall be deposited other authorizing document shall be deposited together with the instrument appointing the together with the instrument appointing the voting proxy at the domicile of the Company voting proxy at the domicile of the Company or at such other place as specified in the notice or at such other place as specified in the notice of the meeting. of the meeting.

The instrument appointing a voting proxy shall be deposited at the domicile of the Company or at such other place as specified in the notice of the meeting within 24 hours prior to the meeting at which the proxy is authorised to vote or 24 hours prior to the specified time of the vote. If the instrument is signed by another person authorised by the principal, the power of attorney or other document authorizing the signature shall be notarized. The notarized power of attorney or other authorizing document shall be deposited together with the instrument appointing the voting proxy at the domicile of the Company or at such other place as specified in the notice of the meeting.

If the principal is a legal person, its legal representative or the person authorised by a resolution of its board of directors or other Article 67 decision-making body shall attend the general meeting of the Company as the representative of such legal person.

If the principal is a legal person, its legal representative or the person authorised by a resolution of its board of directors or other decision-making body shall attend the general meeting of the Company as the representative of such legal person.

If the shareholder is a Recognized Clearing House (or an agent thereof) as defined in the relevant regulations under the Hong Kong laws in effect from time to time, one or more individuals that it deems suitable may be appointed by it to act as its representative(s) at any general meeting or any class shareholders’ meeting; however, if two or more individuals are appointed as representatives, their powers of attorney shall specify the number and class of shares involved in the appointment of each such individual. The individual(s) so appointed may exercise the rights of the Recognized Clearing House (or its agent) as if he, she or they was or were (an) individual shareholder(s) of the Company.

If the shareholder is a Recognized Clearing House (or an agent thereof) as defined in the relevant regulations under the Hong Kong laws in effect from time to time, one or more individuals that it deems suitable may be appointed by it to act as its representative(s) at any general meeting or any class shareholders’ meeting and creditors’ meeting; however, if two or more individuals are appointed as representatives, their powers of attorney shall specify the number and class of shares involved in the appointment of each such individual. The individual(s) so appointed may exercise the rights of the Recognized Clearing House (or its agent) as if he, she or they was or were (an) individual shareholder(s) of the Company.

– 67 –

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

APPENDIX II

Existing Articles No.	Existing Articles*	Amended Articles
	Decisions of the general meeting on any of the	Decisions of the general meeting on any of the
	following matters shall be adopted by special	following matters shall be adopted by special
	resolution:	resolution:
	(I) the increase or reduction of the	(I) the increase or reduction of the
	registered capital by the Company;	registered capital by the Company;
	(II) the issuance of corporate bonds;	(II) the issuance of corporate bonds;
	(III) the division, merger, dissolution,	(III) the division, merger, dissolution,
	liquidation or change in the corporate	liquidation/winding up or change in
	form of the Company;	the corporate form of the Company;
Article 76	(IV) the amendment of the Articles of	(IV) the amendment of the Articles of
	Association;	Association;
	(V) other matters which laws,	(V) other matters which laws,
	administrative regulations or the	administrative regulations or the
	Articles of Association require to be	Articles of Association require to be
	adopted by special resolution or which	adopted by special resolution or which
	the general meeting considers will have	the general meeting considers will have
	a material impact on the Company and	a material impact on the Company and
	therefore require, by an ordinary	therefore require, by an ordinary
	resolution, to be adopted by special	resolution, to be adopted by special
	resolution.	resolution.
	The Company shall have a board of directors	The Company shall have a board of directors
	which shall be accountable to the general	which shall be accountable to the general
	meetings. The board of directors shall consist	meetings. The board of directors shall consist
	of nine directors, including at least one-third	of nine directors, including at least one-third
	of the board of directors and no less than three	of the board of directors and no less than three
	independent directors. The board of directors	independent directors. The board of directors
	shall have a chairman and where it’s	shall have a chairman and where it’s
	necessary, shall have vice chairmen.	necessary, shall have vice chairmen.
	The term of office of a director shall be three	The term of office of a director shall be three
	years and is renewable upon re-election, but	years and is renewable upon re-election, but
	an independent non-executive Director shall	an independent non-executive Director shall
Article 88	be re-elected upon corresponding review	be re-elected upon corresponding review
	procedures in accordance with the listing rules	procedures in accordance with the listing rules
	of the stock exchange where the shares of the	of the stock exchange where the shares of the
	Company are listed if such director has served	Company are listed if such director has served
	in his/her position for more than nine years.	in his/her position for more than nine years.
	Directors shall be elected or replaced by	Directors shall be elected or replaced by
	general meetings, and may be dismissed by	general meetings, and may be dismissed by
	general meetings before the expiration of their	general meetings before the expiration of their
	term of office. The term of office of directors	term of office. The term of office of directors
	shall be three years and upon the maturity of	shall be three years and upon the maturity of
	the term of office, a director shall be eligible	the term of office, a director shall be eligible
	to offer himself for re-election.	to offer himself for re-election.

– 68 –

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

APPENDIX II

Existing Articles No.	Existing Articles*	Amended Articles
	The chairman and vice chairman shall be	Subject to the relevant laws and regulations
	elected and dismissed by over half of the	and the regulatory rules of the local
	directors (provided that such director’s rights	authority where the Company’s shares are
	to claim for relevant damages under any	listed, if the board of directors appoints a
	contract shall not be affected thereby). The	new director to fill a casual vacancy or as
	chairman and vice chairman shall have a term	an addition to the board of directors, the
	of three years and may be renewable upon	term of office of the appointed director
	re-election and re-appointment.	shall expire at the first annual general
		meeting upon his appointment and shall
		then be eligible for re-election.
		The chairman and vice chairman shall be
		elected and dismissed by over half of the
		directors (provided that such director’s rights
		to claim for relevant damages under any
		contract shall not be affected thereby). The
		chairman and vice chairman shall have a term
		of three years and may be renewable upon
		re-election and re-appointment.
	Where necessary, the board of directors may	Where necessary, the board of directors may
	establish relevant special committees such as	establish relevant special committees such as
	the audit committee, nomination committee,	the audit committee, nomination committee,
	remuneration committee and environmental,	remuneration committee, related party
	social and governance committee to provide	transaction control committee and
	advice and suggestions for the material	environmental, social and governance
Article 98	decisions of the board of directors and the	committee to provide advice and suggestions
	exercise of duties by the chairman of the	for the material decisions of the board of
	board of directors within the scope of	directors and the exercise of duties by the
	authorization of the board of directors. The	chairman of the board of directors within the
	board of directors shall formulate the	scope of authorization of the board of
	composition and duties and of meetings of	directors. The board of directors shall
	each of the special committees.	formulate the composition and duties and of
		meetings of each of the special committees.

The version of the Articles of Association as of 28 December 2021.

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NOTICE OF EGM

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Jinke Smart Services Group Co., Ltd. 金科智慧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: 9666)

NOTICE OF EXTRAORDINARY GENERAL MEETING TO BE HELD ON THURSDAY, 18 AUGUST 2022

NOTICE IS HEREBY GIVEN THAT the 2022 first extraordinary general meeting (the “ EGM ”) of Jinke Smart Services Group Co., Ltd. (the “ Company ”) will be convened and held at Building A4, East Zone, Jinke Shiniancheng, No. 480, Panxi Road, Shimahe Street, Jiangbei District, Chongqing, PRC on Thursday, 18 August 2022 at 3 p.m. for the purpose of considering and, if thought fit, passing the resolutions set out below as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

“ THAT
(a) the master property management services agreement entered into between the Company and Jinke Property on 29 July 2022 (the “ 2022 Master Property Management Services Agreement ”), a copy of which is tabled at the meeting and marked “A” and initialed by the chairman of the meeting for identification purpose, the terms thereof and the continuing connected transactions contemplated thereunder be and are hereby approved, ratified and confirmed;
(b) the proposed annual caps set out in the 2022 Master Property Management Services Agreement be and are hereby approved; and
(c) any one director of the Company be and is hereby authorised for and on behalf of the Company to execute all such other documents, instruments and agreements and to do all such acts or things deemed by him/her to be incidental to, ancillary to or in connection with the matters contemplated in the 2022 Master Property Management Services Agreement.”

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NOTICE OF EGM

“ THAT
(a) the loan agreement dated 29 July 2022 entered into between the Company and Jinke Property (the “ Loan Agreement ”), a copy of which is tabled at the meeting and marked “B” and initialed by the chairman of the meeting for identification purpose, the terms thereof and the connected transactions contemplated thereunder be and are hereby approved, ratified and confirmed; and
(b) any one director of the Company be and is hereby authorised for and on behalf of the Company to execute all such other documents, instruments and agreements and to do all such acts or things deemed by him/her to be incidental to, ancillary to or in connection with the matters contemplated in the Loan Agreement.”
To consider and approve the appointment of Ms. Lin Ke as a non-executive Director, and to authorize the Board to fix her remuneration.
To consider and approve the appointment of Mr. Wu Xiaoli as a non-executive Director, and to authorize the Board to fix his remuneration.

SPECIAL RESOLUTION

To consider and approve the Proposed Amendments, and to authorise the Directors to deal with on behalf of the Company the relevant application(s), approval(s), registration(s), filing(s) and other related procedures or issues and to make further amendment(s) (where necessary) pursuant to the requirements of the relevant governmental and/ or regulatory authorities arising from the Proposed Amendments.

By Order of the Board Jinke Smart Services Group Co., Ltd. Xia Shaofei Chairman

Chongqing, 1 August 2022

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NOTICE OF EGM

Notes:

The resolutions at the EGM will be taken by poll pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”). The results of the poll will be published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.jinkeservice.com) in accordance with the Listing Rules.
All shareholders of the Company are eligible for attending the EGM. Any shareholder of the Company entitled to attend and vote at the EGM convened by the above notice is entitled to appoint a proxy or more than one proxy to attend the EGM and vote instead of him/her. A proxy need not be a shareholder of the Company. If more than one proxy is appointed, the number of shares in respect of which each such proxy so appointed must be specified in the proxy form. Every shareholder of the Company present in person or by proxy shall be entitled to one vote for each share held by him/her.
In order to be valid, the proxy form together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy thereof, must be completed and returned to (i) the Company’s H share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong (if returning the completed proxy form before 15 August 2022) or 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong (if returning the completed proxy form on or after 15 August 2022) (for holders of H shares of the Company); or (ii) or the Company’s headquarters in the PRC at Building A4, East Zone, Jinke Shiniancheng, No. 480, Panxi Road, Shimahe Street, Jiangbei District, Chongqing, PRC (for holders of domestic shares of the Company), not less than 24 hours before the time appointed for the EGM or any adjournment thereof (as the case may be). Completion and return of the proxy form will not preclude a shareholder of the Company from attending and voting at the EGM or any adjourned meeting thereof should he/she so wish.
For determining the entitlement to attend and vote at the EGM, the register of members of the Company will be closed from Monday, 15 August 2022 to Thursday, 18 August 2022 (both dates inclusive), during which period no transfer of shares will be registered. In order to qualify for attending and voting at the EGM, holders of H shares of the Company whose transfer documents have not been registered are required to submit the share certificates together with the properly completed share transfer forms to the Company’s H share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong no later than 4:30 p.m. on Friday, 12 August 2022 for registration.
The instrument appointing the proxy must be in writing and signed by the appointer or his/her attorney duly authorised in writing, or if the appointer is a legal person, either under a legal person’s seal or signed by its director or an attorney duly authorised in writing.
The EGM (or any adjournment thereof) is expected to take no more than half a day. Shareholders of the Company or their proxies attending the EGM (or any adjournment thereof) shall bear their own travelling and accommodation expenses.

As at the date of this circular, the Board comprises Mr. Xia Shaofei and Mr. Xu Guofu as executive Directors, Mr. Luo Licheng and Mr. Liang Zhongtai as non-executive Directors, and Mr. Cao Guohua, Ms. Yuan Lin and Mr. Chan Chi Fung Leo as independent non-executive Directors.

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AI assistant

Jinke Smart Services Group Co., Ltd. — Proxy Solicitation & Information Statement 2022

51128_rns_2022-07-31_4b8ae55d-3465-46cd-ab48-9da5dc20c85b.pdf

Jinke Smart Services Group Co., Ltd. 金科智慧服務集團股份有限公司

(1) RENEWAL OF CONTINUING CONNECTED TRANSACTION; (2) DISCLOSEABLE AND CONNECTED TRANSACTION; (3) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION; (4) PROPOSED APPOINTMENT OF NON-EXECUTIVE DIRECTORS; AND

(5) NOTICE OF EXTRAORDINARY GENERAL MEETING

DEFINITIONS

DEFINITIONS

Jinke Smart Services Group Co., Ltd. 金科智慧服務集團股份有限公司

(1) RENEWAL OF CONTINUING CONNECTED TRANSACTION;

(2) DISCLOSEABLE AND CONNECTED TRANSACTION;

(3) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION; (4) PROPOSED APPOINTMENT OF NON-EXECUTIVE DIRECTORS; AND

(5) NOTICE OF EXTRAORDINARY GENERAL MEETING

1. INTRODUCTION

LETTER FROM THE BOARD

2. RENEWAL OF CONTINUING CONNECTED TRANSACTION

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Annual cap:

Pricing Policy

LETTER FROM THE BOARD

Internal Control Measures

3. DISCLOSEABLE AND CONNECTED TRANSACTION

Repayment:

Default interest:

Security:

LETTER FROM THE BOARD

4. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

5. PROPOSED APPOINTMENT OF NON-EXECUTIVE DIRECTORS

LETTER FROM THE BOARD

LETTER FROM THE BOARD

7. INFORMATION ON JINKE PROPERTY AND THE GROUP

Jinke Property

The Group

8. LISTING RULES IMPLICATIONS

Board Approval

Recommendation of the Independent Board Committee

9. EGM AND PROXY ARRANGEMENT

10. VOTING BY POLL

11. CLOSURE OF REGISTER OF MEMBERS

12. RECOMMENDATION

LETTER FROM THE BOARD

Jinke Smart Services Group Co., Ltd. 金科智慧服務集團股份有限公司

RENEWAL OF CONTINUING CONNECTED TRANSACTION AND DISCLOSEABLE AND CONNECTED TRANSACTION

Yours faithfully, For and on behalf of the Independent Board Committee of Jinke Smart Services Group Co., Ltd.

Cao Guohua

Yuan Lin

(1) RENEWAL OF CONTINUING CONNECTED TRANSACTIONS; AND

(2) DISCLOSEABLE AND CONNECTED TRANSACTION

I. INTRODUCTION

II. THE INDEPENDENT BOARD COMMITTEE

III. OUR INDEPENDENCE

IV. BASIS OF OUR ADVICE

V. PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Information of the Group

Summary of the consolidated statement of comprehensive income of the Group extracted from the 2020 Annual Report

Financial performance for the year ended 31 December 2019 (the “FY2019”) and the year ended 31 December 2020 (the “FY2020”)

Financial position as at 31 December 2020 and 2021

Financial position as at 31 December 2019 and 2020

2. Information of Jinke Property Group

3. Overview of the PRC economy and property sector

4. Reasons for and benefits of entering into the 2022 Master Property Management Services Agreement and the Loan Agreement

5. 2022 Master Property Management Services Agreement

5.1 Principal terms of the 2022 Master Property Management Services Agreement

Pricing policy

5.3 Proposed annual caps for the transactions contemplated under the 2022 Master Property Management Services Agreement

Basis for determining the Proposed Annual Caps

5.4 Our analysis and work performed on the Proposed Annual Caps

5.5 Our view on the 2022 Master Property Management Services Agreement

6. Discloseable and connected transaction

Interest rate:

Repayment:

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Purpose:

6.1 Our analysis and work performed in connection with the Loan Agreement

(i) Nature of the Loan and the Loan amount

(ii) Interest rate and tenure

(iii) Security

(iv) Repayment capability and internal control

Earnings

Jinke Smart Services Group Co., Ltd. Proxy Solicitation & Information Statement 2022