Macau E&M Holding Limited — M&A Activity 2015

Dec 21, 2015

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

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(Incorporated in Hong Kong with limited liability)

(Stock Code: 604)

DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO ACQUISITION OF APPROXIMATELY 95% OF THE ISSUED SHARE CAPITAL OF FAIRWIND POWER LIMITED

THE ACQUISITION

The Board is pleased to announce that on 21 December 2015 (after trading hours), the Company and the Vendor entered into the Sale and Purchase Agreement pursuant to which the Company has conditionally agreed to acquire and the Vendor has conditionally agreed to sell the Sale Shares, representing approximately 95% of the issued share capital of the Target Company.

The PRC Company is wholly owned by the Target Company through the HK Company and is a project company holding the Target Project, being a redevelopment project at Huangbeiling, Luohu District, Shenzhen, the PRC which is in progress.

The Consideration is RMB1,914,000,000 (equivalent to HK$2,264,233,290 based on the Agreed Exchange Rate) of which (i) HK$1,132,116,645 will be paid by the Company in cash at Completion and (ii) the balance of the Consideration, being HK$1,132,116,645 will be settled by the Promissory Note to be issued by the Company to the Vendor at Completion.

Upon Completion, the members of the Target Group will become non wholly-owned subsidiaries of the Company.

LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios for the Acquisition exceeds 5% but all of them are less than 25%, the Acquisition constitutes a discloseable transaction of the Company and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

As the Vendor is the direct controlling shareholder of the Company (it, together with its associates, holds approximately 60.68% of all issued Shares as at the date of this announcement), the Vendor is therefore a connected person of the Company. Accordingly, the Acquisition constitutes a connected transaction of the Company and is subject to the reporting, announcement and the independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

The Vendor and its associates are required to abstain from voting in respect of the resolution(s) approving the Acquisition at the EGM.

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INDEPENDENT BOARD COMMITTEE

In compliance with the Listing Rules, the Independent Board Committee has been established to consider the terms of the Acquisition and to advise the Independent Shareholders as to whether they are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole and to give its recommendation as to how the Independent Shareholders shall vote in respect of the resolution(s) to be proposed at the EGM for approving the Acquisition, after taking into account the recommendation of the Independent Financial Adviser. In this connection, the Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders regarding the terms of the Acquisition.

DESPATCH OF CIRCULAR

A circular containing, among other things, (i) further information on the Acquisition; (ii) the valuation report on the property interests of the Target Group; (iii) the recommendation of the Independent Board Committee regarding the terms of the Acquisition; (iv) the advice of the Independent Financial Adviser regarding the terms of the Acquisition; and (v) the notice of the EGM, will be despatched to the Shareholders as soon as possible. In order to allow sufficient time for preparation of the relevant information for inclusion in the circular, it is currently expected that the circular will be despatched, on or before 29 January 2016.

Completion is subject to the fulfillment and/or waiver of the conditions precedent under the Sale and Purchase Agreement and therefore, may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

(A) INTRODUCTION

The Board is pleased to announce that on 21 December 2015 (after trading hours), the Company and the Vendor entered into the Sale and Purchase Agreement pursuant to which the Company has conditionally agreed to acquire and the Vendor has conditionally agreed to sell the Sale Shares, representing approximately 95% of the issued share capital of the Target Company.

(B) THE ACQUISITION

The Sale and Purchase Agreement

Date: 21 December 2015 Parties: the Company (as purchaser); and the Vendor (as vendor)

The Vendor is an investment holding company. As at the date of this announcement, the Vendor is the direct controlling shareholder of the Company and it, together with its associates, is holding 4,480,478,142 Shares, representing approximately 60.68% of all issued Shares.

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Assets to be acquired

Pursuant to the Sale and Purchase Agreement, the Company has conditionally agreed to acquire from the Vendor the Sale Shares, representing approximately 95% of the issued share capital of the Target Company as at the date of this announcement.

Upon Completion, the members of the Target Group will become non wholly-owned subsidiaries of the Company.

The PRC Company is wholly-owned by the Target Company through the HK Company and is a project company holding the Target Project, being a redevelopment project on Land A and Land B at Huangbeiling, Luohu District, Shenzhen, the PRC which is in progress.

It is represented by the Vendor that the PRC Company is the lawful owner of the land use right and building ownership right of Land A. In respect of Land B, the PRC Company has not yet entered into a land grant contract with the relevant PRC government authority. Nonetheless, it is represented by the Vendor that the PRC Company has fully paid the land fee, and has obtained the construction land planning permit (建設用地規劃許可証), in respect of Land B. Completion of the Acquisition is conditional upon, among other things, a land use right grant contract having been entered into between the PRC Company and UPLRCS Bureau in respect of Land B, please refer to the section headed “Conditions precedent” below for further information. The Vendor has further agreed that, in the event that the land fee required under the land grant contract in respect of Land B is more than the land fee already paid by the PRC Company, the Vendor will fully indemnify the Company for the excess amount.

Brief details of Land A and Land B are set out in the table below:

Land A

Lot Number : H219-0041 Total land area : Approximately 48,434 sq. m. Total plot ratio-based GFA : Approximately 343,593 sq. m. (inclusive of the resettlement (計容積率建築面積) area (回遷面積)) Total GFA not included : Approximately 110,147.69 sq. m. in plot ratio (不計容積率建築面積) Use : Commercial and residential (Type II) Period of land use right : 70 years, commencing from 4 March 2013 until 3 March 2083

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Land B

Lot Number : H216-0030 Total land area : Approximately 6,750 sq. m. Use : Commercial Total GFA : 57,200 sq. m.

The Target Project, which is currently called “Shum Yip Dong Ling (深業東嶺)”, is a redevelopment project in Huangbeiling, Luohu District, Shenzhen, the PRC. The Target Project is situate at the junction of Feng Huang Road and Shennan East Road, which is an established residential area and central business district in Luohu District with access to Line No. 2, Line No. 5 and the planned Line No. 8 of the Shenzhen Metro.

Under the current plan, the Target Project will be developed into a comprehensive living complex comprising an open city commercial street, a metro shopping promenade, office towers, hotels and health-oriented residence. The redevelopment work of the Target Project commenced in 2011. The redevelopment of Land A is currently expected to be completed in 2017. The redevelopment of Land B is currently expected to be completed in 2018.

The Consideration

The Consideration is RMB1,914,000,000 (equivalent to HK$2,264,233,290 based on the Agreed Exchange Rate), which has been agreed after arm’s length negotiation between the Company and the Vendor. The Consideration has been determined with reference to, among other things, the Reassessed NAV, being the audited consolidated net asset value attributable to owners of the Target Company as at 30 June 2015 after having adjusted for (i) the preliminary valuation of the property interests held by the Target Group, using the direct comparison valuation approach to assess the land portion of the Target Project and having taking into account the incurred construction costs and the costs that will be incurred to complete the development to reflect the market value of the Target Project in its existing state, in the amount of approximately RMB6,500 million (equivalent to approximately HK$7,689 million); and (ii) the estimated potential tax liabilities of the Target Group. The Consideration represents a discount of approximately 3% to an amount representing 95% of the Reassessed NAV (being the value attributable to the Sale Shares).

The Consideration will be settled in HK$ in the following manner:

• (i) as to HK$1,132,116,645, being 50% of the Consideration, will be paid by the Company in cash at Completion; and

• (ii) as to HK$1,132,116,645, being the remaining 50% of the Consideration, will be settled by the Promissory Note to be issued by the Company to the Vendor at Completion.

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Promissory Note

The Promissory Note will be settled in cash by the Company within:

• (i) three months after the date of Completion; or

• (ii) 14 days after the date on which PRC Company has obtained the state-owned land use right certificate in respect of Land B

whichever is later but if the last date of the period determined as aforesaid is not a Business Day, then, the latest date to settle the Promissory Note will be the Business Day immediately after such last date.

Conditions precedent

Completion is subject to the following conditions being fulfilled (or, if applicable, waived):

• (i) the passing of an ordinary resolution by the Independent Shareholders at the EGM approving the Sale and Purchase Agreement and the transactions contemplated thereunder;

• (ii) the Vendor having provided all relevant documents and information of the Target Group as required by the Company from time to time; and the Company having completed due diligence on the Target Group (including but not limited to in respect of the establishment, approvals, legal, financial, engineering, land, property, management, labour, insurance, environmental protection, foreign exchange, lending and borrowing, guarantee and investment of relevant companies) and being reasonably satisfied with the results of the due diligence;

• (iii) the approvals having been obtained by the Vendor from Shenzhen SASAC for the sale and purchase of the Sale Shares pursuant to the Sale and Purchase Agreement;

• (iv) the representations, warranties and undertakings given by the Vendor under the Sale and Purchase Agreement remaining true and accurate in all material respects and not misleading in any material respect upon Completion;

• (v) the PRC Company and UPLRCS Bureau having entered into a legally enforceable land use right grant contract, pursuant to which UPLRCS Bureau granted the land use right of Land B to the PRC Company on terms and conditions satisfactory to the Company; and

• (vi) the PRC legal adviser engaged by the Company having issued a legal opinion to the reasonable satisfaction of the Company in respect of (including but not limited to) the due establishment and existence of the PRC Company and its business operations and scopes, and properties (including the PRC Company’s ownership of the land use right in respect of Land B).

The Company may waive conditions precedent (ii), (iv) and/or (vi) above by notice in writing to the Vendor. If the above conditions precedent are not fulfilled (or waived as aforesaid) on or before 31 March 2016 (or such other longer period as agreed by the Vendor and the Company in writing), the Sale and Purchase Agreement will be terminated automatically and whereupon none of the Vendor and the Company will have any obligations towards the other save and except for any antecedent breach and in respect of a few provisions in Sale and Purchase Agreement relating to, among other things, confidentiality.

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Completion

Upon fulfillment and/or (where relevant) waiver of all the conditions precedent set out above, Completion is required to take place on the Completion Date.

Indemnities

Under the Sale and Purchase Agreement, the Company and the Vendor have agreed to indemnify each other for losses, liabilities or expenses, directly or indirectly incurred by such other party, arising from, as a result of or based on its non-compliance of any provision of the Sale and Purchase Agreement including any terms, representations, undertakings and warranties.

Pursuant to the Sale and Purchase Agreement, the Vendor has agreed to indemnify the Company for losses, suffered by the Company due to, among others, (i) claims and proceedings arising from any causes or facts existing prior to Completion; and (ii) any breaches or non-compliance of the relevant laws and regulations of the PRC or contracts by members of the Target Group prior to Completion.

In addition, upon Completion, the Vendor is required to execute a tax indemnity deed in favour of the Company pursuant to which, among other things, the Vendor will undertake to indemnify the Company for, among others, (i) any loss incurred by the Target Group where the Target Group is required to bear any tax liabilities of the Vendor which may arise from the transactions pursuant to the Sale and Purchase Agreement; and (ii) any tax liabilities or claims due to or with reference to any income, profits or gains earned, accrued or received, transactions carried out by the Target Group prior to the Completion Date.

(C) INFORMATION ON THE TARGET GROUP

Information on the Target Group

The Target Company was incorporated in the BVI and, through the HK Company, wholly-owns the PRC Company. The principal activities of both the Target Company and the HK Company are investment holding. The PRC Company was established in the PRC and it is a project company holding the Target Project.

The Vendor acquired the Sale Shares in 2011. The total acquisition cost of the Sale Shares incurred by the Vendor was US$68 million (equivalent to approximately HK$527 million).

As at the date of this announcement, the Shum Yip Loans were owing by the Target Group to (i) Shum Yip Group, in the principal amount of RMB931 million; and (ii) the Vendor, in the principal amounts of approximately HK$222 million and approximately US$61 million. Out of the Shum Yip Loans, (a) the principal amount owing to Shum Yip Group carries interest at the interest rate of one-year bench mark lending rate and is repayable on 9 November 2016; and (b) the principal amounts owing to the Vendor carry interest which is to be calculated according to the actual borrowing costs payable by the Vendor to the relevant banks from which the relevant amounts were obtained by the Vendor and are repayable on 9 November 2016. The Shum Yip Loans are expected to remain after Completion until full repayment.

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As at the date of this announcement, the Shum Yip Guarantees provided by Shum Yip Group was and remains valid and effective. Pursuant to the Sale and Purchase Agreement, the Company and the Vendor will, after Completion and on the basis of not causing any material adverse effect on the Target Group, use their respective reasonable endeavours to procure the full and valid release of the Shum Yip Guarantees.

The provision of the Shum Yip Loans and the Shum Yip Guarantees by the Vendor and/or Shum Yip Group to the Target Group will constitute continuing connected transactions of the Company after Completion. As the Shum Yip Loans and the Shum Yip Guarantees were provided on normal commercial terms or better and were not secured by the assets of the Target Group, they will be fully exempted from shareholders’ approval, annual review and all disclosure requirements under Chapter 14A of the Listing Rules.

Shareholding structure of the Target Group

Set out below are the shareholding structure charts of the Target Group (i) as at the date of this announcement; and (ii) immediately after Completion:

(i) As at the date of this announcement

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----- Start of picture text -----

The Vendor Charm Peak
(Hong Kong) (BVI)
Approx. 95% Approx. 5%
Target Company
(BVI)
100%
HK Company
(Hong Kong)
100%
PRC Company
(PRC)
Target Project
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(ii) Immediately after Completion and assuming there will be no change in (1) the shareholding structure of the Company; and (2) Charm Peak’s shareholding in the Target Company

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The Vendor
(Hong Kong)
60.68%
The Company Charm Peak
(Hong Kong) (BVI)
Approx. 95% Approx. 5%
Target Company
(BVI)
100%
HK Company
(Hong Kong)
100%
PRC Company
(PRC)
Target Project
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Financial Information of the Target Group

Set out below is the unaudited consolidated financial information of the Target Group for the two years ended 31 December 2013 and 2014 respectively and for the 6 months ended 30 June 2015 as taken from the consolidated management accounts of the Target Group:

	For	For
	the year	the year	For
	ended 31	ended 31	the 6 months
	December	December	ended 30 June
	2013	2014	2015
	HK$’000	HK$’000	HK$’000
Loss before taxation	28,812	3,481	16,895
Loss after taxation	28,812	3,481	16,895

The audited consolidated net liability attributable to owners of the Target Company as at 30 June 2015 was RMB431 million.

(D) REASONS FOR AND BENEFITS OF THE ACQUISITION

The Group is principally engaged in property development, property investment and property management.

In recent years, the differentiation of the real estate industry has been accelerating, and the value of the assets in the core location of the first-tier cities in the PRC is gradually becoming prominent. The Group is optimistic about the long term development prospect of the real estate market in Shenzhen, a city acclaimed to be the capital of innovation of China with active economic activities. It is the Group’s strategy to “focus on the development in Shenzhen” and to continue to expand the land reserves in Shenzhen. The Target Group holds the Target Project which is located at the prime location of Luohu District, Shenzhen. The Directors consider that the Acquisition is in line with the Group’s development strategy and will further improve the Group’s profitability and facilitate the sustainable development of the Group in the long run.

It is expected that the Target Project will solidify and invigorate the prime location where it is situate at and maximize its value and function. As an important component to the business district in Luohu, the Target Project is expected to remodel the living area in the eastern part of Luohu and turn Huangbeiling into a central district which pools new culture and new means of exchange.

The Directors (excluding the members of the Independent Board Committee whose views will, after receiving the advice from the Independent Financial Adviser, be set out in the letter from the Independent Board Committee in the circular to be despatched to the Shareholders) are of the view that the terms of the Sale and Purchase Agreement (and the transactions contemplated thereunder) are on normal commercial terms, and the Acquisition are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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(E) LISTING RULES IMPLICATIONS

Listing Rules implications

As one of the applicable percentage ratios for the Acquisition exceeds 5% but all of them are less than 25%, the Acquisition constitutes a discloseable transaction of the Company and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

As the Vendor is the direct controlling shareholder of the Company (it, together with its associates, holds approximately 60.68% of the issued Shares as at the date of this announcement), the Vendor is a connected person of the Company. Accordingly, the Acquisition constitutes a connected transaction of the Company and is subject to the reporting, announcement and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

The Vendor and its associates are required to abstain from voting in respect of the resolution(s) approving the Acquisition at the EGM.

Independent Board Committee

In compliance with the Listing Rules, the Independent Board Committee has been established to consider the terms of the Acquisition and to advise the Independent Shareholders as to whether they are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole and to give its recommendation as to the voting in respect of the resolution(s) to be proposed at the EGM for approving the Acquisition, after taking into account the recommendation of the Independent Financial Adviser. In this connection, the Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders regarding the terms of the Acquisition.

(F) DESPATCH OF CIRCULAR

A circular containing, among other things, (i) further information on the Acquisition; (ii) the valuation report on the property interests of the Target Group; (iii) the recommendation of the Independent Board Committee regarding the terms of the Acquisition; (iv) the advice of the Independent Financial Adviser regarding the terms of the Acquisition; and (v) the notice of the EGM, will be despatched to the Shareholders as soon as possible. In order to allow sufficient time for preparation of the relevant information for inclusion in the circular, it is currently expected that the circular will be despatched on or before 29 January 2016.

Completion is subject to the satisfaction and/or waiver of the conditions precedent under the Sale and Purchase Agreement and therefore, may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

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(G) DEFINITIONS

In this announcement, the following expressions shall have the meanings set out below unless the context requires otherwise:

“Acquisition”	the proposed acquisition of the Sale Shares by the Company from the
	Vendor pursuant to the terms and conditions of the Sale and Purchase
	Agreement
“Agreed Exchange Rate”	the exchange rate of RMB1.0 = HK$1.182985, being the middle rate of
	the buying and selling rates of Offshore RMB against HK$ published
	by Bank of China (Hong Kong) Limited at about 11 a.m. on the date of
	the Sale and Purchase Agreement
“associate(s)”	has the same meaning as defined in the Listing Rules
“Board”	the board of the Directors
“Business Day”	a day (other than a Saturday, Sunday or a public holiday or a day on
	which tropical cyclone warning signal No. 8 or above or a “black” rain
	storm warning is in force in Hong Kong at any time between 9:00 a.m.
	and 5:00 p.m.) on which licensed banks are generally open for business
	in Hong Kong
“BVI”	the British Virgin Islands
“Charm Peak”	Charm Peak Investments Limited, a company incorporated in the BVI
	with limited liability and an independent third party of the Company.
	As at the date of this announcement, Charm Peak holds 5,037 shares of
	the Target Company, representing approximately 5% of the issued share
	capital of the Target Company
“Company”	Shenzhen Investment Limited, a company incorporated in Hong Kong
	with limited liability, the Shares of which are listed on the main board
	of the Stock Exchange
“Completion”	completion of the Acquisition
“Completion Date”	the date falling on the second Business Day after all the conditions
	precedent under the Sale and Purchase Agreement have been fulfilled
	and/or waived by the Company (or such other date as the Vendor and
	the Company may agree in writing)
“connected person(s)”	has the same meaning as defined in the Listing Rules
“Consideration”	the consideration in the amount of RMB1,914,000,000 (equivalent to
	HK$2,264,233,290 based on the Agreed Exchange Rate), payable by
	the Company to the Vendor for the Acquisition
“controlling shareholder”	has the same meaning as defined in the Listing Rules

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“Director(s)”	the director(s) of the Company
“EGM”	the extraordinary general meeting of the Company to be convened for
	the purpose of considering and, if thought fit, approving the Sale and
	Purchase Agreement and the transactions contemplated thereunder
“GFA”	gross floor area
“Group”	the Company and its subsidiaries from time to time
“HK$”	Hong Kong dollar(s), the lawful currency of Hong Kong
“HK Company”	Great Assets Development Limited, a company incorporated in Hong
	Kong with limited liability and a direct wholly-owned subsidiary of the
	Target Company
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s Republic
	of China
“Independent Board	an independent committee of the Board comprising all of the
Committee”	independent non-executive Directors, namely Mr. WU Wai Chung,
	Michael, Mr. LI Wai Keung and Dr. WONG Yau Kar David to advise
	the Independent Shareholders as regards the terms of the Acquisition
“Independent Financial	VMS Securities Limited, a licensed corporation to carry out Type 1
Adviser”	(dealing in securities), Type 4 (advising on securities),Type 6 (advising
	on corporate finance) and Type 9 (asset management) regulated
	activities under the Securities and Futures Ordinance, which is the
	independent financial adviser appointed to advise the Independent
	Board Committee and the Independent Shareholders in relation to the
	terms of the Acquisition
“Independent	the Shareholders other than the Vendor and its associates
Shareholders”
“Land A”	a land situated at the junction of Shennan East Road (深南東路) and
	Feng Huang Road (鳳凰路), Luohu District, Shenzhen, the PRC with
	lot number H219-0041, brief detail of which is set out under the section
	headed “The Acquisition – Assets to be acquired”
“Land B”	a land situated at the junction of Shennan East Road (深南東路) and
	Feng Huang Road (鳳凰路), Luohu District, Shenzhen, the PRC with
	lot number H216-0030, brief detail of which is set out under the section
	headed “The Acquisition – Assets to be acquired”
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“PRC” or “China”	the People’s Republic of China and, for the purpose of this
	announcement, excluding Hong Kong, Macau Special Administrative
	Region of the People’s Republic of China and Taiwan

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“PRC Company” 新旺實業發展（深圳）有限公司(Xin Wang Industry Development (Shenzhen) Limited*), a company established in the PRC and a direct wholly-owned subsidiary of the HK Company

• “Promissory Note” a promissory note in the principal amount of HK$1,132,116,645 to be issued by the Company to the Vendor at Completion in partial settlement of the Consideration

• “Reassessed NAV” RMB2,077 million (equivalent to approximately HK$2,457 million), being the audited consolidated net asset value attributable to owners of the Target Company as at 30 June 2015 after having adjusted for (i) the preliminary valuation of the property interests held by the Target Group (using the direct comparison valuation approach to assess the land portion of the Target Project and having taking into account the incurred construction costs and the costs that will be incurred to complete the development to reflect the market value of the Target Project in its existing state) in the amount of approximately RMB6,500 million (equivalent to approximately HK$7,689 million); and (ii) the estimated potential tax liabilities of the Target Group

• “RMB” Renminbi, the lawful currency of the PRC “Sale and Purchase the sale and purchase agreement entered into on 21 December 2015 Agreement” (after trading hours) between the Company and the Vendor in respect of the Acquisition

• “Sale Shares” 95,707 ordinary shares of the Target Company with a par value of US$1 each, representing approximately 95% of the entire issued share capital of the Target Company

• “Share(s)” the ordinary share(s) of the Company “Shareholder(s)” the holder(s) of the Share(s) “Shenzhen SASAC” 深圳市人民政府國有資產監督管理委員會 (Shenzhen Municipal People’s Government State-owned Assets Supervision and Administration Commission)

• “Shum Yip Group” 深業集團有限公司 (Shum Yip Group Limited*), a company established in the PRC and the holding company of the Vendor

• “Shum Yip Guarantees” the guarantees given by Shum Yip Group in favour of two lending banks in respect of bank loans granted to the PRC Company in the aggregate maximum principal amount of RMB1.7 billion under the loan agreements dated 28 May 2014 and 31 October 2014

• “Shum Yip Loans” the principal amounts owing to the Vendor and Shum Yip Group by the Target Group as described under the section headed “ Information on the Target Group – Information on the Target Group ”

“sq. m.”

square meter(s)

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“Stock Exchange” The Stock Exchange of Hong Kong Limited “Target Company” Fairwind Power Limited (富寶有限公司*), a company incorporated in the BVI held by the Vendor and Charm Peak as to approximately 95% and 5% respectively “Target Group” the Target Company and its subsidiaries (namely, the HK Company and the PRC Company) “Target Project” the work in progress redevelopment project on Land A and Land B at Huangbeiling, Luohu District, Shenzhen, the PRC

“Vendor” Shum Yip Holdings Company Limited (深業（集團）有限公司), a company incorporated in Hong Kong “UPLRCS Bureau” 深圳市規劃和國土資源委員會第一直屬管理局(the First Direct Administration Bureau of Urban Planning, Land and Resources Commission of Shenzhen) “US$” United States dollars, the lawful currency of the United States of America “%” per cent.

By order of the Board of Shenzhen Investment Limited LU Hua Chairman

Hong Kong, 21 December 2015

Unless otherwise specified, translations of US$ into HK$ in this announcement are based on the exchange rate of US$1 = HK$7.7530. No representation is made that any amounts in US$ or HK$ can be or could have been converted at the relevant dates at the above rate or any other rates at all.

As at the date of this announcement, the Board comprises 9 Directors, of which Mr. LU Hua, Mr. HUANG Wei, Mr. MOU Yong and Mr. LIU Chong are the executive directors of the Company, Dr. WU Jiesi and Mr. HUANG Yige are the non-executive directors of the Company and Mr. LI Wai Keung, Mr. WU Wai Chung, Michael and Dr. WONG Yau Kar David are the independent non-executive directors of the Company.

• For identification purpose only

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