RemeGen Co., Ltd. — M&A Activity 2020

Jan 22, 2020

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all you shares in Overseas Chinese Town (Asia) Holdings Limited (the “ Company “), you should hand this circular together with the accompanying proxy form at once 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 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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Overseas Chinese Town (Asia) Holdings Limited 華僑城（亞洲）控股有限公司 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 03366)

VERY SUBSTANTIAL ACQUISITION ACQUISITION OF LAND USE RIGHTS IN HEFEI AIRPORT INTERNATIONAL TOWN

23 January 2020

CONTENTS

	Pages
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Appendix I – Financial Information of the Group. . . . . . . . . . . . . . . . . . .	I-1
Appendix II – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1

– i –

DEFINITIONS

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

• “Board” the board of directors of the Company “Business Day(s)” a day on which licensed banks in the PRC are open for business

• “Company” Overseas Chinese Town (Asia) Holdings Limited (華僑城(亞洲)控股有限公司), an exempted company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the main board of the Stock Exchange

• “Confirmation Letter” the auction confirmation letter (成交確認書) entered into between Hefei OCT Industry and the Hefei Natural Resources and Planning Bureau on 13 December 2019 as a result of successfully winning the bid for the auction

• “connected person(s)” has the meaning ascribed to it under the Listing Rules “Consideration” the consideration for the acquisition of the land use rights of the Land

• “controlling shareholder” has the meaning ascribed to it under the Listing Rules “Directors” the directors of the Company “Group” the Company and its subsidiaries as at the Latest Practicable Date

“Hefei Airport International Hefei Airport International Town (合肥空港國際小鎮) Town” located in Hefei Airport Economic Demonstration Zone in the PRC

• “Hefei Natural Resources and Hefei Municipal Natural Resources and Planning Bureau Planning Bureau” (合肥市自然資源和規劃局)

“Hefei OCT Industry” 合肥華僑城實業發展有限公司 (Hefei OCT Industry Development Co., Ltd.), a company established in the PRC which is held by OCT Ganghua and Huaxing Investment as to 51% and 49%, respectively

– 1 –

DEFINITIONS

• “HK$”

• “Hong Kong”

• “Huaxing Investment”

• “Independent Third Parties”

• “Joint Venture Agreement”

• “JV Partner(s)”

• “Land”

• “Land Acquisition”

• “Land Use Rights Grant Contracts”

• “Latest Practicable Date”

• “Listing Rules”

• “OCT Ganghua”

• the Hong Kong dollar(s), the lawful currency of Hong Kong

• the Hong Kong Special Administrative Region of the People’s Republic of China

• 合肥華興空港投資有限公司 (Hefei Huaxing Konggang Investment Co., Ltd.), a company established in the PRC

• an independent third party not connected with the Company and its subsidiaries, their respective directors, chief executives and substantial shareholders and any of their associates within the meaning of the Listing Rules

• the joint venture agreement dated 20 June 2019 and entered into between OCT Ganghua and Huaxing Investment in relation to the establishment of Hefei OCT Industry

• OCT Ganghua and Huaxing Investment

• five (5) parcels of land, located in the first phase of Hefei Airport International Town, with a total site area of approximately 1,042 mu

• the acquisition of land use rights of the Land through public bidding process at the auction

• State-owned Land Use Rights Grant Contracts (國有土地 使用權出讓合同) entered into pursuant to the Confirmation Letter on 27 December 2019

• 20 January 2020, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular

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

• 深圳華僑城港華投資控股有限公司 (Shenzhen OCT Ganghua Investment Holdings Co., Ltd.), a company established in the PRC and a wholly-owned subsidiary of the Company

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DEFINITIONS

“OCT Group”	Overseas Chinese Town Company Limited (華僑城集團 有限公司), a PRC state-owned company established in
	the PRC, and the holding company of OCT Ltd.
“OCT (HK)”	Overseas Chinese Town (HK) Company Limited, a
	company incorporated in Hong Kong with limited
	liability and wholly owned by OCT Ltd.
“OCT Ltd.”	Shenzhen Overseas Chinese Town Company Limited (深圳華僑城股份有限公司), a company established in the
	PRC, the shares of which are listed on the Shenzhen
	Stock Exchange
“Pacific Climax”	Pacific Climax Limited, a company incorporated in the
	British Virgin Islands with limited liability, is a
	Controlling Shareholder and is wholly-owned by OCT
	(HK)
“PRC”	the People’s Republic of China, and for the purpose of
	this circular, excludes Hong Kong, the Macau Special
	Administrative Region of the People’s Republic of China
	and Taiwan
“PRC Governmental Body”	has the meaning ascribed to it under the Listing Rules
“Project”	the entire project in respect of the development of Hefei
	Airport International Town
“RMB”	Renminbi, the lawful currency of the PRC
“Share(s)”	the share(s) of the Company
“Shareholder(s)”	the shareholders of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Transactions”	the Land Acquisition and the transactions contemplated
	under the Joint Venture Agreement
“%”	per cent

In this circular, the English names of the PRC entities or enterprises are translations of their Chinese names. In the event of any inconsistency, the Chinese names shall prevail.

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LETTER FROM THE BOARD

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Overseas Chinese Town (Asia) Holdings Limited 華僑城（亞洲）控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03366)

Executive Directors: Mr. He Haibin (Chairman) Ms. Xie Mei (Chief Executive Officer) Mr. Lin Kaihua

Non-executive Director: Mr. Zhang Jing

Registered Office: Clifton House 75 Fort Street PO Box 1350 GT George Town Grand Cayman Cayman Islands

Independent Non-executive Directors: Ms. Wong Wai Ling Professor Lam Sing Kwong Simon Mr. Chu Wing Yiu

Head office and principal place of business in Hong Kong: 59/F., Bank of China Tower 1 Garden Road Hong Kong

23 January 2020

To the Shareholders

Dear Sir or Madam,

VERY SUBSTANTIAL ACQUISITION ACQUISITION OF LAND USE RIGHTS IN HEFEI AIRPORT INTERNATIONAL TOWN

INTRODUCTION

Reference is made to the announcement of the Company dated 13 December 2019 in relation to a very substantial acquisition regarding the acquisition of land use rights in Hefei Airport International Town.

The purpose of this circular is, among other things, (i) to provide you with further details of the very substantial acquisition; and (ii) the financial information of the Group.

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LETTER FROM THE BOARD

ACQUISITION OF LAND USE RIGHTS

On 13 December 2019, Hefei OCT Industry, an indirect non-wholly owned subsidiary of the Company, successfully won the bid of the land use rights of the Land, being five parcels of land (i.e. the first phase of Hefei Airport International Town) at the total consideration of approximately RMB2,644 million. Hefei OCT Industry signed the Confirmation Letter with the Hefei Natural Resources and Planning Bureau on the same day.

On 27 December 2019, Hefei OCT Industry entered into the Land Use Rights Grant Contracts with Hefei Natural Resources and Planning Bureau in relation to the Land Acquisition.

CONSIDERATION

The Consideration, being the land premium payable for the land use rights of the Land amounting to approximately RMB2,644 million (a refundable bid deposit in the sum of RMB510 million has been paid by Hefei OCT Industry at the time of bidding and contributed by the JV Partners in proportion to their respective shareholdings in Hefei OCT Industry which shall be used to offset the corresponding portion of the Consideration for the Land Acquisition), shall be paid by Hefei OCT Industry in the following manner, either:

1. the Consideration shall be settled in full within 30 days from the date of entering into the Land Use Rights Grant Contracts; or

2. 50% of the Consideration shall be settled within 30 days from the date of entering into the Land Use Rights Grant Contracts and the remainder of the Consideration, along with the interest accrued on the remainder of the Consideration (the interest rate of which shall be determined by the rate published by the People’s Bank of China (中國人民銀行) as at the date of the settlement of the first 50% of the Consideration) shall be settled within 3 months from the date of entering into the Land Use Rights Grant Contracts.

In determining the Consideration, the Directors have taken into account of (i) the reference land price listed for the Land comprising five parcels of land (ranging from RMB1,300,000 to RMB2,900,000 per mu), and the ceiling auction price for the five parcels of the Land ranging from RMB1,860,000 to RMB4,140,000 per mu specified by the Hefei Natural Resources and Planning Bureau; (ii) the land selling price of six parcels of land sold since 2017 in the proximity of the Land ranging from RMB2,310,000 to RMB13,290,000 per mu (such price range is for reference only as the usage, ratio and location of the said six parcels of land may vary from that of the Land); and (iii) the development potential of the Land which is connected to Hefei Changxin Integrated Circuit Base (合肥長鑫集成電路基地) where there is a strong foundation of high-end industries with high-end industrial clusters. Details of the development of the Land are set out in the paragraph headed “Information of the Land” in this circular. Hefei Airport International Town will provide ancillary living service facilities to Hefei Changxin Integrated Circuit Industry Base (合肥長鑫集成電路基地) and the integrated circuit industry in the surrounding area, and the Company believes that the development of Hefei Airport International Town will enhance the value of the Land.

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LETTER FROM THE BOARD

Having considered the above factors, the Directors confirm that the Consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

The portion of the Consideration in proportion to the shareholding of OCT Ganghua in Hefei OCT Industry (approximately RMB1,348 million) will be financed by the Group’s internal resources and bank borrowings.

LAND USE RIGHTS GRANT CONTRACTS

On 27 December 2019, Hefei OCT Industry entered into the Land Use Rights Grant Contracts with Hefei Natural Resources and Planning Bureau in relation to the Land Acquisition. Pursuant to the Land Use Rights Grant Contracts, if Hefei OCT Industry fails to settle the Consideration in accordance with the aforementioned payment terms, it is liable to a penalty amounting to 0.1% of the part of the Consideration that is due to pay for each day of delay. If the delay is over 60 days and if Hefei OCT Industry still fails to make the payment after Hefei Natural Resources and Planning Bureau’s request, Hefei Natural Resources and Planning Bureau has the right to terminate the Land Use Rights Grant Contracts and it may claim its loss from Hefei OCT Industry and Hefei OCT Industry has no right to request the refund of any deposit.

Furthermore, Hefei OCT Industry shall commence construction work in relation to the Land by 26 April 2020 and complete by 26 April 2023. The terms of the land use rights are 70 years for residential use and 40 years for commercial use. Save as agreed otherwise, if Hefei OCT Industry fails to meet the aforementioned target dates, it is liable to a penalty amounting to 0.1% of the Consideration for each day of delay.

INFORMATION OF THE LAND

The Project concerns the development of Hefei Airport International Town. Hefei Airport International Town is expected to cover a scope of 13,800 mu and located in the core district of the Airport Economic Demonstration Zone (空港經濟示範區, the “ Demonstration Zone ”) of the North District of Hefei Economic and Technological Development Zone in Anhui Province of the PRC (中國安徽省合肥市經濟技術開發區北區) with a view to cultivating an industrial cluster with international competitiveness. Hefei Airport International Town will provide ancillary living service facilities to Hefei Changxin Integrated Circuit Industry Base (合肥長鑫集成電路基地), and is planned to develop commercial offices, ecological green land, ancillary living facilities and integrated service centres. The Land is part of the Project, and it occupies a total site area of approximately 1,042 mu, of which 832 mu are residential area. The Land, which has a planned total gross floor area of approximately 848,000 square metres, is designated for commercial and residential usage with a term of 40 and 70 years, respectively. As at the Latest Practicable Date, the Land is a vacant site without any properties on it. The Land is located in the heart of Hefei Airport International Town, which is the first batch of land parcels in Hefei Airport International Town listed for sale by the Hefei Natural Resources and Planning Bureau. The Group may participate in the tender of other land parcels in Hefei Airport International Town when other land parcels are listed for sale in the future if the Group finds the list-for-sale conditions suitable.

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LETTER FROM THE BOARD

INFORMATION ON HEFEI OCT INDUSTRY

Hefei OCT Industry was established for the development of the Hefei Airport International Town pursuant to the terms of Joint Venture Agreement, and is held by OCT Ganghua, an indirect wholly-owned subsidiary of the Company and Huaxing Investment as to 51% and 49%, respectively.

Registered capital

The total registered capital of Hefei OCT Industry is RMB10 billion, of which OCT Ganghua agreed to subscribe for RMB5.1 billion and Huaxing Investment agreed to subscribe for RMB4.9 billion, representing 51% and 49% of the total registered capital of Hefei OCT Industry, respectively. As at 31 December 2019, no capital contribution into Hefei OCT Industry has been made by the JV Partners.

The JV Partners will be required to pay up the amount of capital contribution in proportion to their respective equity holding according to the actual funding requirement of Hefei OCT Industry, and shall settle the capital contribution within 30 days upon receipt of the notice issued by Hefei OCT Industry.

The amount of the registered capital of Hefei OCT Industry was determined after valuation by the JV Partners with reference to (i) the Consideration (approximately RMB2,644 million); (ii) the estimated costs for the development of the Land of approximately RMB5.23 billiion; and (iii) the estimated costs of development for possible acquisition and development of other parcels of land in Hefei Airport International Town which may be rolled out in phases by the government in the future. As at the Latest Practicable Date, no plan has been announced by relevant governmental authorities for the list-for-sale of remaining parcels of land in Hefei Airport International Town.

The maximum capital contribution to be made to Hefei OCT Industry by OCT Ganghua, being RMB5.1 billion shall be funded by the Group’s internal resources, shareholders’ loan and banking borrowings. The actual amount of capital contribution will be subject to the actual funding requirement of the Project.

Financing of Hefei OCT Industry

(1) Land Acquisition Costs

Each of the JV Partners shall pay to Hefei OCT Industry, the balance of the land premium, the relevant tax as a result of the land acquisition in respect of the Project, ancillary fees for urban construction and other relevant expenses in proportion to their respective shareholdings in Hefei OCT Industry within three business days before the due date for payment in accordance with the terms of the land use rights grant contract(s) and relevant policies, and Hefei OCT Industry shall then pay the same to the Hefei Resources and Planning Bureau.

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LETTER FROM THE BOARD

The registered capital shall pay the Consideration in priority. To the extent that the amount of the registered capital is insufficient to cover the land costs, such shortfalls will be financed by shareholders’ loan in proportion to their respective shareholdings in Hefei OCT Industry.

(2) Development of the Project

The funding for the development of the Project shall be satisfied by, firstly, the registered capital, secondly, revenue of Hefei OCT Industry and thirdly, external loans from financial institutions. If the aforesaid fundings were insufficient to satisfy the funding requirement for the development plan of the Project as approved by the board of directors of Hefei OCT Industry, such shortfall will be financed by shareholders’ loan in proportion to their respective shareholdings in Hefei OCT Industry.

The JV Partners shall provide guarantee for the financing of Hefei OCT Industry in proportion to their respective shareholdings in Hefei OCT Industry if required by the financial institutions for external loans.

If any of the JV Partners fails to perform its obligations under the Joint Venture Agreement with regard to the aforesaid financing arrangement of Hefei OCT Industry and as a result thereof, Hefei OCT Industry fails to obtain normal financing or available funds for the operation of Hefei OCT Industry and the Project, the JV Partner who has performed its obligations:

• (1) may, by itself or its designated third party, acquire the equity interest of the defaulting JV Partner by way of subscription of capital or equity acquisition, and the price of the acquisition shall not be more than the appraised value of the equity interest concerned, and the defaulting JV Partner shall pay a default penalty equal to 20% of the appraised value of the equity interest concerned; or

• (2) has the right (but not an obligation) to perform the obligations (wholly or in part) of the defaulting JV Partner. If the defaulting JV Partner makes the repayment the other JV Partner within 20 days from the notice served by the other JV Partner to the defaulting JV Partner as regards the performance of such obligation, the defaulting JV Partner shall pay an interest at an annual interest rate of 12% and a guarantee fee at a rate of 12% of the amount of the guarantee. If the defaulting JV Partner fails to make the repayment 20 days after the service of the said notice, the other JV Partner shall have the right to determine the proportion of dividend, the equity interest holding and voting right according to the actual paid-up registered capital and the amount paid by the other JV Partner for the defaulting JV Partner. The defaulting JV Partner shall pay the interest at an annual interest rate of 12%, which will be accrued up to the adjustment of the proportion of dividend, equity interest and voting right, and the guarantee fee, and pay a default penalty equal to 12% of the amount which the defaulting JV Partner fails to settle according to the Joint Venture Agreement.

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LETTER FROM THE BOARD

The annual interest rate of 12% and guarantee fee rate of 12% is agreed by the JV Partners after arm’s length negotiation and with reference to the one-year benchmark lending rate of commercial banks in the PRC of 4.75% and the finance costs of each of the JV Partners. The Board is of the view that such rates are fair and reasonable.

The Company will comply with the requirements of reporting, announcement and shareholders’ approval (if required) under the Listing Rules if and when entering into any agreement in the future pursuant to the terms of the Joint Venture Agreement set out above.

Profit sharing

Hefei OCT Industry may distribute to the JV Partners, in proportion to their equity interest in Hefei OCT Industry, operating profits after tax after deducting the regulatory requirements on legal reserve and the working capital requirements of Hefei OCT Industry, and complying with the regulatory requirements on the distribution of profits.

Board

The board of directors of Hefei OCT Industry shall consist of five directors, three of whom shall be nominated by OCT Ganghua and two shall be nominated by Huaxing Investment. The chairman of the board of directors of Hefei OCT Industry shall be the director nominated by OCT Ganghua. Each of the director and chairman of the board of directors of Hefei OCT Industry shall be appointed for a term of three years and shall be eligible for re-election after the end of the three years.

Other terms

Hefei OCT must not:

• (i) without the unanimous consent of the JV Partners, change the nature or scope of its business, and if there are changes then they must still be consistent with the scope of the purpose specified in documents relating to the Land Acquisition; or

• (ii) enter into any transactions which are not on an arm’s length basis.

INFORMATION ON THE GROUP

The principal business activity of the Company is investment holding. The Company is principally engaged in the comprehensive development business (including the development and operation of tourism theme park, developed and sold residential properties, construction contract, development and management of properties, and property investment) and investment in the new urbanization industrial ecosphere business.

OCT Ganghua is a limited liability company established in the PRC and an indirect wholly-owned subsidiary of the Company, which is principally engaged in foreign investment as encouraged and permitted by the PRC Government, investment in and management of cultural tourism and sport facilities, provision of management services for industrial park, leasing self-owned properties and advisory services.

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LETTER FROM THE BOARD

INFORMATION ON THE PARTIES

Hefei Natural Resources and Planning Bureau is a PRC governmental authority and the seller of the Land.

Huaxing Investment is a limited liability company established in the PRC, which is principally engaged in industrial investment and investment management. The ultimate beneficial owner of Huaxing Investment is the State-owned Asset Supervision and Administration Commission of Hefei Municipal People’s Government.

The controlling shareholder of Huaxing Investment indirectly owns 49% equity interest in an insignificant subsidiary (as defined in the Listing Rules) of the Company.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, Hefei Natural Resources and Planning Bureau, Huaxing Investment and their respective ultimate beneficial owners are Independent Third Parties.

REASONS FOR AND BENEFITS OF THE TRANSACTION

The Land, which is part of the Project, is located in the heart of Hefei Airport International Town. It is planned to develop low-rise buildings, townhouses and high-rise buildings in the residential areas, and commercial blocks, business offices, hotels and exhibition centres in the commercial areas. The Directors believe that the Transactions may provide a good investment opportunity and allow the Group to expand its land reserves and in turn enhance the Group’s income and profitability and is in the interest of the Company and the Shareholders as a whole.

The controlling shareholder of Huaxing Investment is a financial holding group under the State-owned Assets Supervision and Administration Commission of Hefei Municipal People’s Government which has extensive experience in investment management and possesses capital strength. By collaboration with Huaxing Investment, the Group can unleash its years of experience in the development and operation of large-scale comprehensive development projects, expand its source of fund and achieve complimentary advantages.

The Directors confirm that Transactions are in the ordinary and usual course of business of the Company and on normal commercial terms which are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

FINANCIAL EFFECT OF THE ACQUISITION

Upon the establishment of Hefei OCT Industry, OCT Ganghua holds 51% of the equity interest in Hefei OCT Industry. The Company holds, indirectly through OCT Ganghua, 51% of the equity interest in Hefei OCT Industry. Since OCT Ganghua controls the majority of the board of directors and the voting rights in the shareholders’ meetings of Hefei OCT Industry, Hefei OCT Industry becomes a subsidiary of OCT Ganghua and an indirect subsidiary of the Company. As a result, the financial results, assets and liabilities of Hefei OCT Industry will be consolidated into the accounts of the Group in accordance with Hong Kong Financial Reporting Standard 10.

Assuming the Transactions had been fully effected, the financial effects upon the Group are:

• (i) an increase of inventory (from the Land) amounting to approximately RMB2,733 million;

• (ii) an expected decrease of the Group’s net cash position by approximately RMB1,394 million;

• (iii) an increase in equity (representing Huaxing Investment, a non-controlling shareholder) of approximately RMB1,339 million; and

• (iv) an insignificant effect on the earnings of the Group.

LISTING RULES IMPLICATIONS

The Land Acquisition is regarded as a qualified property acquisition under Rule 14.04(10C) of the Listing Rules as the Land Acquisition involves an acquisition of government land(s) from the PRC Governmental Body (as defined under the Listing Rules) through an auction governed by the PRC laws (as defined under the Listing Rules) in the PRC, which is undertaken by the Group in its ordinary and usual course of business.

The Land Acquisition is undertaken by the Group and Huaxing Investment via Hefei OCT Industry on a joint basis. According to the Joint Venture Agreement which is prepared on an arm’s length basis and on normal commercial terms, Hefei OCT Industry was established for the single purpose relating to the acquisition of land use rights and development in respect of the Project which is consistent with the purpose of the acquisition of the Land. The Joint Venture Agreement also contains clauses that Hefei OCT Industry must not, (i) without the unanimous consent from OCT Ganghua and Huaxing Investment, change the nature or scope of Hefei OCT Industry’s business and its scope of business shall be at all times consistent with the requirements specified in documents relating to the Project; or (ii) enter into any transactions which are not on an arm’s length basis.

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LETTER FROM THE BOARD

As one or more of the relevant applicable percentage ratios (as defined in the Listing Rules) in respect of the Transaction are more than 100%, the Transactions constitute a very substantial acquisition of the company of the company under Chapter 14 of the Listing Rules and subject to relevant reporting and announcement requirements but are exempt from shareholders’ approval requirement pursuant to Rule 14.33A of the Listing Rules.

RECOMMENDATION

The Board confirms that the Transactions are in the Group’s ordinary and usual course of business and that the Land Acquisition and the joint venture arrangement contemplated under the Joint Venture Agreement (including its financing and profit distribution arrangements) are on normal commercial terms, fair and reasonable and in the interests of the Company and Shareholders as a whole.

Although a general meeting will not be convened by the Company to approve the Transactions, if such a general meeting were to be convened by the Company, the Board would recommend the Shareholders to vote in favour of the resolutions to approve the Transactions.

ADDITIONAL INFORMATION

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

By order of the Board Overseas Chinese Town (Asia) Holdings Limited He Haibin Chairman

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

The Company is required to set out in this circular the financial information for the last three financial years with respect to the profits and losses, financial record and position, as a comparative table and the latest published statement of financial position together with the notes on the annual accounts for the last financial year for the Group.

The audited consolidated financial statements of the Group for the year ended 31 December 2016 has been set out in pages 77 to 172 of the 2016 annual report of the Company which was posted on 26 April 2017 on the Stock Exchange’s website (http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0426/LTN20170426481.pdf).

The audited consolidated financial statements of the Group for the year ended 31 December 2017 has been set out in pages 77 to 178 of the 2017 annual report of the Company which was posted on 13 April 2018 on the Stock Exchange’s website (http://www.hkexnews.hk/listedco/listconews/SEHK/2018/0413/LTN20180413403.pdf). The audited consolidated financial statements of the Group for the year ended 31 December 2018 has been set out in pages 97 to 230 of the 2018 annual report of the Company which was posted on 26 April 2019 on the Stock Exchange’s website (http://www3.hkexnews.hk/listedco/listconews/SEHK/2019/0426/LTN201904261057.pdf).

The unaudited consolidated financial statements of the Group for the six months ended 30 June 2019 has been set out in pages 29 to 76 of the 2019 interim report of the Company which was posted on 10 September 2019 on the Stock Exchange’s website (https://www.hkexnews.hk/listedco/listconews/sehk/2019/0829/ltn201908291194.pdf).

2. INDEBTEDNESS STATEMENT

As at the close of business on 30 November 2019, being the date of this indebtedness statement prior to the printing of this circular, the Group had total borrowings of approximately RMB8,386.06 million, comprising secured and guaranteed bank and related party loans of approximately RMB3,429.87 million, unsecured and unguaranteed bank and related party loans of approximately RMB4,956.19 million.

As at 30 November 2019, the Group’s secured and guaranteed bank loans were secured by: (i) pledged deposits with total carrying values of approximately RMB759.22 million and (ii) investment properties with total carrying value of approximately RMB1,993.94 million, and guarantees provided by Shenzhen Overseas Chinese Town Co., Ltd. and Overseas Chinese Town (HK) Co., Ltd., which are intermediate parents of the Company.

As at 30 November 2019, the Group had outstanding obligations under operating lease with carrying amount of approximately RMB80.94 million.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

As at 30 November 2019, save for the guarantees of approximately RMB709.25 million given to financial institutions for mortgage loan facilities granted to purchasers of the Group’s properties, the Group had no other material contingent liabilities.

As at 30 November 2019, Overseas Chinese Town (Shanghai) Land Company Limited, a non-wholly owned subsidiary of the Company, participate in a real estate investment trust (the “ REITS ”) programme. The funds raised under the REITS programme totals RMB2.15 billion, consist of preferential asset-backed securities which amounts to RMB1.935 billion from investors other than the Group, and secondary asset-backed securities which amounts to RMB0.215 billion from the Group. The entire funds raised (after deducting the relevant fees and expenses) from the two kinds of securities remained in the Group in the form of loans from the investors to the Group as long-term liabilities.

Foreign currency amounts have been, for the purposes of this indebtedness statement, translated into RMB at the approximate rates of exchange applicable at the close of business on 30 November 2019.

Save as aforesaid and apart from intra-group liabilities and normal trade payables in the ordinary course of business, at the close of business on 30 November 2019, the Group did not have any other outstanding mortgages, charges, debentures or other loan capital, bank overdrafts or loans, other similar indebtedness, lease liabilities under finance lease and operating lease or hire purchase lease commitments, liabilities under acceptance or acceptance credit, guarantees or other material contingent liabilities.

3. WORKING CAPITAL

The Directors are of the opinion that, taking into account the financial resources available to the Group including the internally generated funds and the present available bank facilities, and taking into account the impact of the Transactions, the Group will have sufficient working capital for its requirements for at least the next 12 months from the date of this circular.

4. CONTINGENT LIABILITIES

Save as disclosed in this circular, the Group has no other material contingent liabilities. The Group is not involved in any current material legal proceedings, nor is the Group aware of such material legal proceedings. The Group would record any loss contingencies when, based on information then available, it is probable that a loss had been incurred and the amount of the loss can be reasonably estimated. The Group confirms that there has not been any material change in the level of its contingent liabilities since 31 December 2018 up to the Latest Practicable Date.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

5. FINANCIAL AND TRADING PROSPECT OF THE GROUP

For the six months ended 30 June 2019, the Group recorded a continuing operations revenue of approximately RMB310.84 million, representing a decrease of approximately 54.3% over the same period of 2018, which was mainly due to the decrease in revenue of Project Chengdu OCT and Shanghai Suhewan projects, resulting from regulation and control policies such as purchase and sale restrictions in located areas. Profit attributable to equity holders of the Company was approximately RMB34.36 million, representing a decrease of approximately 43.0% over the same period of 2018. This was mainly due to the decrease in investment income from the urbanisation industrial ecosphere business. The basic loss per share attributable to shareholders of the Company was approximately RMB0.108, representing an increase of approximately 17.4% over the same period of 2018, mainly due to the increase in loss attributable to ordinary shareholders of the Company.

OCT Group, the controlling shareholder of the Group, participates in the national modern urbanisation construction with the innovative development mode of “culture + tourism + urbanisation”, and of “tourism + internet + finance”, through its five development focus, namely “cultural industry sector, tourism industry sector, new urbanisation, electronic industry sector and relevant business investment”.

As the Group is the only foreign listed company of its controlling shareholder, OCT Group, the Group’s new development mode will be based on the idea of “comprehensive development + investment in the urbanisation industrial ecosphere”. The Group will steadily develop the comprehensive development business by fully leveraging the Group’s brand and financial strengths, and by securing high-quality prime cities projects and OCT urbanisation projects. The Group will also actively leverage the domestic and overseas capital markets along with financial products to step up its project development effort and seek new investment opportunities through domestic and overseas investments, mergers and acquisitions, industrial funds, financial leasing and others methods. At the same time, the Group will actively rely on financial instruments and capital markets to revitalise its existing assets, improve liquidity and enhance efficiency in the use of funds.

Comprehensive Development Business

Under the premise of maintaining the stable operation of the real estate market, it is expected that the overall control policies will remain to be continuity- and stability-oriented, with the philosophy of “houses are for inhabitation, not for speculation” and “leasing and purchasing” remains unchanged. However, the differentiation of different urban policies under the philosophy of “implementation of policies according to local conditions” will be deepened. At the same time, the five mega city clusters will be China’s most promising regions with the most development potential in the future, especially the Beijing Tianjin-Hebei Area, Yangtze River Delta Area and Guangdong-Hong Kong-Macau Greater Bay Area, which are likely to develop into world-class city clusters with global influence.

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In the forthcoming year, the various comprehensive development projects of the Group are as follows: the construction for Hefei Chaohu Bantang Hot Spring Town project is scheduled to realise project pre-sale in the first half of 2020. The construction for Zhongshan Yuhong project has commenced since May 2019 and is scheduled to commence sale to the public in the second half of 2020. The remaining parts of the boutique business premises of Shanghai Suhewan project will remain available for purchase. As to the Chongqing OCT Land Project, the Group will step up its selling efforts for high-rise and multi-storey residential products. The construction for OCT (Changshu) Project is expected to be completed and put into operation by the first quarter of 2020 and is scheduled to be leased to the public. With combined location advantages and integrated surrounding resources, the Group will continue to proactively research innovative development modes for existing industrial lands, in order to explore and push forward timely planning, development and construction of idle lands.

The Group will also continue to adhere to advanced development philosophy and clear market orientation, and pay attention to development opportunities in the Yangtze Delta and Guangdong-Hong Kong-Macao Greater Bay Area, thereby steadily developing its comprehensive development business. We will stay on the outlook for diversified investment opportunities, strengthen strategic synergy and business cooperation with invested enterprises, and explore business synergy and resource complements. Through various ways such as mergers and acquisitions, cooperation and equity investment, we will acquire high quality lands at low cost to increase resource reserve for the projects.

Investment in the Urbanisation Industrial Ecosphere Business

In the future, aiming at key areas including culture, travel, education, consumption, healthcare and urbanisation, the investment business of the Group will continuously select high-quality projects that meet our strategic orientation with due care, and strive for new equity investment opportunities, so as to build the urbanisation industrial ecosphere and the industrial cooperation alliance while continuously enriching and expanding the urbanisation industrial ecosphere. In the future, the Group’s fund management companies will be based in Guangdong-Hong Kong-Macao Greater Bay Area, radiating outwards throughout China with its main focus on industries having strong synergy with urbanisation industrial ecosphere so as to reserve high quality resources for the Company.

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Finance Lease Business

The Group will continuously engage in the finance lease business in sectors such as theme parks and the manufacturing industry with a primary focus on customer base such as large to mid-scale state-owned enterprises and high-quality listed companies, improve its risk management and push forward the development of the business in order to achieve stable operating income.

The Board is very confident about the future development prospects of the Group. With the support of OCT Group, the Group will continue to forge ahead with innovative development and endeavor to general ideal investment returns for Shareholders.

6. MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

Set out below are the management discussion and analysis of the Group for each of the three financial years ended 31 December 2016, 2017 and 2018 as well as for the six months ended 30 June 2019.

For the year ended 31 December 2016

The total equity of the Group as at 31 December 2016 was approximately RMB6.77 billion. As at 31 December 2016, the Group had current assets of approximately RMB14.26 billion and current liabilities of approximately RMB8.46 billion. The current ratio was 1.68 as at 31 December 2016, decreased by 0.85 as compared to that as at 31 December 2015, which was mainly due to the repayment of certain related party loans and the transfer of part of the loans from non-current liabilities to current liabilities during the year ended 31 December 2016. The Group generally finances its operations with internally generated cash flow and credit facilities provided by banks and shareholder’s loan.

As at 31 December 2016, the Group had outstanding bank and other loans of approximately RMB4.28 billion, without any fixed-rate loans. As at 31 December 2016, the interest rates of bank and other loans of the Group ranged from 1.05% to 6.38% per annum. Some of those bank loans were secured by floating charges of certain assets of the Group and corporate guarantees provided by certain subsidiaries of the Company. The Group’s gearing ratio (being the total borrowings including bills payable and loans divided by total assets) was approximately 43.2% as at 31 December 2016, representing a decrease of 5.7 percentage points as compared to approximately 48.9% as at 31 December 2015, which was mainly due to the decrease in the amount of related party loans.

As at 31 December 2016, approximately 37.3% of the total amount of outstanding bank and other loans of the Group amounting to approximately RMB1.60 billion was in RMB(; approximately 50.6% of which amounting to approximately HK$2.42 billion was in Hong Kong Dollars, approximately 12.1% of which amounting to approximately US$74.80 million was in United States Dollars.

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As at 31 December 2016, the total cash and cash equivalents of the Group was approximately RMB2.08 billion, of which approximately 89.8% was in RMB, approximately 7.8% was in Hong Kong Dollars, and approximately 2.4% was in United States Dollars.

For the year ended 31 December 2017

The total equity of the Group as at 31 December 2017 was approximately RMB13.31 billion. As at 31 December 2017, the Group had current assets of approximately RMB15.77 billion and current liabilities of RMB9.22 billion. The current ratio of the Group was approximately 1.71 as at 31 December 2017, which is substantially the same comparing with that as at 31 December 2016 (31 December 2016: approximately 1.68). The Group generally finances its operations with internally generated cash flow, credit facilities provided by banks and shareholder’s loans.

As at 31 December 2017, the Group had outstanding bank and other loans of approximately RMB5.01 billion, without any fixed-rate loans. As at 31 December 2017, the interest rates of bank and other loans of the Group ranged from 1.28% to 6.38% per annum. Some of those bank loans were secured by floating charges of certain assets of the Group and corporate guarantees provided by certain subsidiaries of the Company. The Group’s gearing ratio (being the total borrowings including bills payable and loans divided by total assets) was approximately 27.0% as at 31 December 2017, representing a decrease of 16.2 percentage points as compared with approximately 43.2% as at 31 December 2016, mainly due to the issue of the Perpetual Capital Securities in the amount of US$800.00 million during the period, which resulted in the decrease in the amount of loans and the increase in liquidity.

As at 31 December 2017, approximately 81.6% of the total amount of outstanding bank and other loans of the Group amounting to approximately HK$4.89 billion was in Hong Kong Dollars; approximately 18.4% of which amounting to approximately RMB920.00 million was in RMB; no outstanding bank and other loans were in United States Dollars.

As at 31 December 2017, the total cash and bank balance of the Group was approximately RMB6.93 billion, of which approximately 54.4% was in United States Dollars, approximately 34.4% of which was in RMB and approximately 11.2% of which was in Hong Kong Dollars.

For the year ended 31 December 2018

The total equity of the Group as at 31 December 2018 was approximately RMB12.91 billion. As at 31 December 2018, the Group had current assets of approximately RMB11.57 billion and current liabilities of approximately RMB10.57 billion. The current ratio was approximately 1.09 as at 31 December 2018, representing a decrease of 0.62 as compared with that as at 31 December 2017 mainly due to inventory of approximately RMB1.96 billion being transferred from current assets to non-current assets and a number of additional long-term equity investment projects during the period. The Group generally finances its operations with internally generated cash flow, credit facilities provided by banks and shareholder’s loans.

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As at 31 December 2018, the Group had outstanding bank and other loans of approximately RMB6.39 billion, without any fixed-rate loans. As at 31 December 2018, the interest rates of bank and other loans of the Group ranged from 3.14% to 6.38% per annum. Some of those bank loans were secured by certain assets of the Group and corporate guarantees provided by certain related companies of the Company. The Group’s gearing ratio (being the total borrowings including bills payable and loans divided by total assets) was approximately 33.6% as at 31 December 2018, representing an increase of 6.6 percentage points as compared with approximately 27.0% as at 31 December 2017, mainly due to the increase in the amount of loans as at the end of the period.

As at 31 December 2018, approximately 88.9% of the total amount of outstanding bank and other loans of the Group amounting to approximately RMB5.68 billion was denominated in Hong Kong Dollars and approximately 11.1% of which amounting to approximately RMB708.50 million was denominated in RMB.

As at 31 December 2018, the total cash and bank balance of the Group was approximately RMB3.22 billion, of which approximately 67.6% was denominated in United States Dollars, approximately 30.3% was denominated in RMB and approximately 2.1% was denominated in Hong Kong Dollars.

For the six months ended 30 June 2019

The total equity of the Group as at 30 June 2019 was approximately RMB12.88 billion. As at 30 June 2019, the Group had current assets of approximately RMB11.06 billion and current liabilities of approximately RMB10.75 billion. The current ratio was approximately 1.03 as at 30 June 2019, representing a decrease of 0.06 as compared with that of approximately 1.09 as at 31 December 2018, mainly due to the decrease in cash at bank. The Group generally finances its operations with internally generated cash flow, credit facilities provided by banks and shareholders’ loans.

As at 30 June 2019, the Group had outstanding bank and other loans of approximately RMB5.74 billion, without any fixed rate loans. As at 30 June 2019, the interest rates of bank and other loans of the Group ranged from 3.43% to 6.38% per annum. Some of those bank loans were secured by certain assets of the Group and corporate guarantees provided by certain related companies of the Company. The Group’s gearing ratio (being the total borrowings including bills payable and loans divided by total assets) was approximately 34.0% as at 30 June 2019, which was approximate to 33.6% as at 31 December 2018.

As at 30 June 2019, approximately 87.4% of the total amount of outstanding bank and other loans of the Group was denominated in Hong Kong Dollars and approximately 12.6% of which was denominated in RMB.

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As at 30 June 2019, approximately 63.2% of the total amount of cash at bank and on hand of the Group was denominated in United States Dollars, approximately 35.3% of which was denominated in RMB and approximately 1.5% of which was denominated in Hong Kong Dollars.

Funding and Treasury Policies

The Group adopted prudent funding and treasury policies. Surplus funds are primarily maintained in the form of cash deposits with leading banks.

Acquisition and development of properties are financed partly by internal resources and partly by bank loans. Repayments of bank loans are scheduled to match asset lives and project completion dates. Bank loans are mainly denominated in Hong Kong dollars and RMB and bear interest at floating rates.

The Group considers that exchange rate fluctuations may have some effect on the overall financial performance of the Group but it is still at a manageable level. The Group will continue to monitor the situation and may consider entering into hedging arrangements in order to minimise foreign exchange risks, if and when necessary. As at 31 December 2016, 2017 and 2018, and 30 June 2019, the Group had no material exposure under foreign exchange contracts or any other hedging instruments.

Interest Expenses

For the years ended 31 December 2016 and 2017, the interest expenses of the Group were approximately RMB254.78 million and RMB190.96 million. For the years ended 31 December 2018, the Group’s interest expenses from the continuing operations of the Group were approximately RMB175.06 million. For the six months ended 30 June 2019, the Group’s interest expenses from the continuing operations were approximately RMB126.61 million. A large portion of the interest expenses were incurred as a result of bank borrowings interests obtained by the Group for the development of integrated businesses.

Employees and Remuneration Policy

As at 31 December 2016, 2017 and 2018, the Group employed 2,484, 2,188 and 1,735 full-time employees, respectively. As at 30 June 2019, the Group employed approximately 1,260 full-time staff in total. The basic remunerations of the employees of the Group are determined with reference to the industry’s remuneration benchmark, the employees’ experience and their performance, and equal opportunities will be offered to all staff members. Salaries of the employees are maintained at a competitive level and are reviewed annually, with reference to the relevant labour market and economic situation. Directors’ remuneration is determined based on a variety of factors such as market conditions and responsibilities assumed by each Director. Apart from the basic remuneration and statutory benefits, the Group also provides bonuses to the staff based upon the Group’s results and their individual performance.

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The Group has not experienced any significant problems with its employees or disruption to its operations due to labour disputes nor has it experienced any difficulty in the recruitment and retention of experienced staff. The Group maintains a good relationship with its employees. Most members of senior management have been working for the Group for many years.

Under the ordinary resolution passed at the extraordinary general meeting on 15 February 2011, the Board adopted a new share option scheme (the “New Scheme”). As at 2 March 2016, all share options granted under the New Scheme have expired, lapsed and cancelled. As at 31 December 2016 no share options were exercised. As at 31 December 2017 and 2018, and 30 June 2019, no share options was granted, exercised, lapsed and cancelled.

Contingent Liabilities

As at 31 December 2016, the Group did not have any significant contingent liabilities. As at 31 December 2017 and 2018, guarantees given to financial institutions for mortgages facilities granted to buyers of the Group’s properties amounts to approximately RMB427.788 million and RMB823.99 million, respectively.

As at 30 June 2019, guarantees given to financial institutions for mortgages facilities granted to buyers of the Group’s properties amounts to RMB682,204,000 (at 31 December 2018: RMB823,991,000).

The Group has entered into agreements with certain banks with respect to mortgage loans provided to buyers of the property units. Pursuant to the mortgage agreements signed between the Group and the banks, the guarantee will be released upon the issuance of the individual property ownership certificate. Should the mortgagors fail to pay the mortgage monthly installment before the issuance of the individual property ownership certificate; the banks can draw down the security deposits up to the amount of outstanding mortgage installments and demand the Group to repay the outstanding balance to the extent that the deposit balance is insufficient.

The amount of guarantee deposits required varies among different banks, but usually within a range of 0% to 5% of the mortgage loans granted to buyers, with prescribed capped amount.

The management does not consider it probable that the Group will sustain a loss under these guarantees as the bank has the rights to sell the property and recovers the outstanding loan balance from the sale proceeds if the property buyers default payment. The management also considers that the market value of the underlying properties is able to cover the outstanding mortgage loans guaranteed by the Group. No liabilities therefore are recognised in respect of these guarantees.

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Significant Investment, Material Acquisitions and Disposals

For the year ended 31 December 2016

Acquisition of Chengdu Baoxin Quansheng

On 7 March 2016, 成都華僑城創盈企業管理有限公司 (Chengdu OCT Chuang Ying Enterprise Management Company Limited) (“ Chengdu Chuang Ying ”) entered into a cooperation agreement with 成都保鑫投資有限公司 (Chengdu Baoxin Investment Company Limited) (“Chengdu Baoxin Investment”) to acquire 50% equity interest in 成都市保鑫泉盛房 地產開發有限公司 (Chengdu Baoxin Quansheng Real Estate Development Company Limited) (“ Chengdu Baoxin Quansheng ”) held by Chengdu Baoxin Investment at a consideration of RMB25 million. Chengdu Chuang Ying and Chengdu Baoxin Investment should provide shareholders’ loan to Chengdu Baoxin Quansheng in proportion to their respective equity interests in Chengdu Baoxin Quansheng and provide corporate guarantees required for the bank loan(s) to be obtained by Chengdu Baoxin Quansheng, the total amount of which shall not exceed RMB1.950 billion. Chengdu Baoxin Quansheng owned a land located in Jinniu District, Chengdu City with a total site area of approximately 58,300 sq.m. and total gross floor area not more than 174,900 sq.m.. For further details, please refer to the announcement of the Company dated 7 March 2016.

Investment in Capital Fortune Emerging Industry Funds

On 30 September 2016, Shenzhen Huayou Investment Co., Ltd. (深圳華友投資有限公司) (“ Huayou Investment ”), an indirect wholly-owned subsidiary of the Company, entered into a limited partnership agreement with Shenzhen Capital Fortune Investment Company Limited (深圳市遠致富海投資管理有限公司) (“ Capital Fortune Investment ”) and other several partners to establish Shenzhen Capital Fortune Investment New Industries Investment Enterprise (LLP) (深圳遠致富海新興產業投資企業(有限合夥)) (“ Capital Fortune Emerging Industry Funds ”) with an aggregate capital of RMB1 billion, of which RMB143 million was contributed by Huayou Investment, representing approximately 14.3% of the interest in the Capital Fortune Emerging Industry Funds. The investment scope of Capital Fortune Emerging Industry Funds covers emerging industries, such as new-energy automobiles, pharmacy and health, mobile internet, energy conservation and environmental protection.

For further details, please refer to the announcements of the Company dated 30 September 2016, 11 October 2016 and 24 October 2016 and the circular of the Company dated 27 October 2016.

Investment in Capital Fortune Fund No. 10

On 19 December 2016, Huayou Investment entered into a limited partnership agreement with Capital Fortune Investment and other several partners to establish Shenzhen Capital Fortune Investment No. 10 Investment Enterprise (LLP) (深圳遠致富海十號投資企業(有限合 夥)) (“ Capital Fortune Investment No. 10 Fund ”) in the total capital of RMB206 million, of

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

which RMB100 million was contributed by Huayou Investment. Capital Fortune Fund No. 10 engages in investment in the equity interest in a PRC securities firm. For further details, please refer to the announcement of the Company dated 19 December 2016.

Investment in NCI Fund

On 28 December 2016, City Legend International Limited (華昌國際有限公司) (“ City Legend ”), an indirect wholly-owned subsidiary of the Company has applied for investing in the total amount of US$50 million in the NCI Fund, a segregated Portfolio of New China Innovation Fund SPC. The investment objective of NCI Fund is to invest in equity securities in a high technology company whose operation is based in the PRC and propose to make initial public offering of its securities. For further details, please refer to the announcement of the Company dated 28 December 2016.

For the year ended 31 December 2017

Investment in Minsheng Education

On 6 March 2017, City Legend entered into the cornerstone investment agreement with, among others, Minsheng Education Group Company Limited (民生教育集團有限公司) (“ Minsheng Education ”), to subscribe for 332,000,000 shares of Minsheng Education at the offer price as part of the international offering of Minsheng Education Group Company Limited. The primary focus of Minsheng Education is to provide high-quality private formal higher education in the PRC dedicated to nurturing professional talents. This investment is expected to broaden the sources of profits of the Group. The subscription was completed on 21 March 2017 at a total effective subscription price of approximately HK$463 million, representing 8.26% of the total issued share capital of Minsheng Education. For further details, please refer to the announcement of the Company dated 6 March 2017.

Investment in Shanghai Libao Huachen Fund

On 17 March 2017, Huayou Investment entered into the limited partnership agreement with Shanghai Rongzheng Libao Investment Management Co., Ltd. (上海榮正利保投資管理有 限公司), Shanghai Rongzheng Investment Advisory Co., Ltd. (上海榮正投資諮詢有限公司), and other several partners to establish Shanghai Libao Huachen Investment Centre (LLP) (上 海利保華辰投資中心(有限合夥)) (“ Shanghai Libao Huachen Fund ”) with an aggregate capital of RMB400 million, among which Huayou Investment invested a total amount of RMB30 million. Shanghai Libao Huachen Fund principally invests in culture industry, including but not limited to segments of video and media, sports and entertainment, leisure and tourism as well as online education segment, and segments of upgrading and reconstruction of such industries through internet and mobile internet. For further details, please refer to the announcement of the Company dated 17 March 2017.

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APPENDIX I

Disposal of 100% equity interests in Shanghai Huali

On 20 September 2017, Barwin Development Company Limited (“ Barwin Development ”), the sole shareholder of Shanghai Huali Packaging Co., Ltd. (上海華勵包裝有 限公司) (“ Shanghai Huali ”) and a wholly-owned subsidiary of the Company, entered into the equity transfer agreement (the “ Shanghai Huali Equity Transfer Agreement ”) with Shanghai Huiyang Industry Co., Ltd. (上海匯陽實業有限公司) (“ Huiyang Industry ”), the winning bidder in the public tender conducted by the Shanghai United Assets and Equity Exchange. Pursuant to the Shanghai Huali Equity Transfer Agreement, Barwin Development disposed of 100% equity interests in Shanghai Huali to Huiyang Industry at a consideration of RMB164,673,100. The disposal was completed on 30 September 2017. For further details, please refer to the announcements of the Company dated 7 July 2017, 4 August 2017 and 20 September 2017.

Issue of perpetual capital securities in the amount of US$800.00 million

On 11 October 2017, the Company successfully issued the perpetual capital securities (“ Perpetual Capital Securities ”) in an aggregate principal amount of US$800.00 million, which is unconditionally guaranteed by OCT Group. The securities are listed on the Stock Exchange at an initial distribution rate of 4.3%. It represents the most narrowed margin from the guidance price of Perpetual Capital Securities issued in the Hong Kong capital market in 2017, which will serve as a strong capital support for the future development of the Company. The Company may, at its sole discretion, elect to defer a distribution pursuant to the terms of the securities. For further details, please refer to the announcements of the Company dated 28 September 2017, 29 September 2017 and 11 October 2017.

Disposal of 51% equity interests in Capital Converge

On 9 November 2017, the Company entered into the sale and purchase agreement and the supplemental agreement (the “ Capital Converge Sale and Purchase Agreement ”) with New China OCT Fund SPC (on behalf of New China Fund SP 1) (“ New China Fund ”), pursuant to which the Company disposed of 51% of the total issued share capital of Capital Converge Holdings Limited (“ Capital Converge ”) and 51% of the shareholder’s loan in Capital Converge to New China Fund, at the consideration in the sum equals to the US$ equivalent of approximately RMB1,395 million. Completion of the sale and purchase took place on 29 December 2017. Upon completion of the transaction, the Company indirectly held 49% equity interests in Chongqing OCT Real Estate Limited (重慶華僑城置地有限公司) through Capital Converge. For further details, please refer to the announcements of the Company dated 13 November 2017, 15 November 2017, 21 December 2017 and 29 December 2017, and the circular of the Company dated 6 December 2017.

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For the year ended 31 December 2018

Disposal of Huali Packaging (Huizhou) Co., Ltd.

Following the completion of transfer of 85% equity interest in Huali Packaging (Huizhou) Co., Ltd. (“ Huali Packaging (Huizhou) ”) in April 2018, the Group entered into an equity transfer agreement with the successful bidder in June 2018 to sell 15% equity interest in Huali Packaging (Huizhou) at the consideration of approximately RMB12.92 million. Upon completion of the disposal, the Group no longer held any equity interest in Huali Packaging (Huizhou). For further details, please refer to the announcement of the Company dated 15 June 2018.

Acquisition of 5.11% equity interest in Tongcheng-Elong

On 10 May 2018, City Legend, an indirect wholly-owned subsidiary of the Company, and Suzhou Wan Cheng Sheng Da Travel Development Limited (蘇州萬程晟達旅遊發展有限公司) (“ Suzhou Wancheng ”) entered into equity transfer agreements, pursuant to which City Legend agreed to acquire 5.11% equity interest in Tongcheng-Elong Holdings Limited at the consideration of approximately RMB1.18 billion. For further details, please refer to the announcements of the Company dated 10 May 2018 and 22 June 2018 and the circular of the Company dated 30 August 2018.

Acquisition of Changshu Land

On 25 June 2018, OCT (Changshu) Investment and Development Co., Ltd. (“ OCT Changshu ”), a non-wholly-owned subsidiary of the Company, won the bid for the land use rights of a land parcel located in Changshu City at the base bid price of approximately RMB18.78 million. OCT Changshu entered into a land transfer agreement with the Land and Resources Bureau to acquire the Changshu Land at the consideration of approximately RMB18.78 million. For further details, please refer to the announcement of the Company dated 27 June 2018.

Cornerstone Investment in Tianli Education

On 26 June 2018, City Legend entered into a cornerstone investment agreement with Tianli Education International Holdings Limited (“ Tianli Education ”), pursuant to which City Legend agreed to subscribe for the investor shares of Tianli Education at the offer price as part of the international offering. The subscription was completed on 12 July 2018 at a total effective subscription price of approximately HK$268.68 million, representing 4.82% of the issued share capital of Tianli Education after full exercise of over-allotment option. For further details, please refer to the announcement of the Company dated 26 June 2018.

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APPENDIX I

Cornerstone Investment in E-House Enterprise

On 5 July 2018, City Legend entered into a cornerstone investment agreement with E-House (China) Enterprise Holdings Limited (“ E-House Enterprise ”), pursuant to which City Legend agreed to acquire the investor shares of E-House Enterprise at the offer price as part of the international offering. The subscription was completed on 20 July 2018 at a total effective subscription price of approximately HK$1.07 billion, representing 4.99% of the issued share capital of E-House Enterprise. For further details, please refer to the announcement of the Company dated 5 July 2018 and the circular of the Company dated 24 September 2018.

Acquisition of 9.98% equity interest in Yuzhou Properties

On 31 August 2018, City Legend entered into a subscription agreement with Yuzhou Properties Company Limited (“ Yuzhou Properties ”), pursuant to which City Legend agreed to subscribe 9.90% of the enlarged issued share capital of Yuzhou Properties, at the aggregate subscription price of approximately HK$1.82 billion. For further details, please refer to the announcement of the Company dated 31 August 2018 and the circular of the Company dated 26 October 2018.

On 16 November 2018, Yuzhou Properties declared a scrip dividend scheme in relation to the interim dividend of 2018, and the Group selected for receiving the interim dividend wholly in new and fully paid shares in lieu of cash. The total shares of Yuzhou Properties held by the Group accounted for 9.98% of Yuzhou Properties’ issued share capital after the scrip dividend scheme.

Sale and Leaseback Arrangement

On 11 September 2018, OCT Financial Leasing entered into an acquisition agreement with Yibin Grace Co., Ltd. (“ Yibin Grace ”), pursuant to which OCT Financial Leasing agreed to acquire the equipment and machinery used for manufacturing textile related products (“ Equipment ”) at the consideration of RMB300.00 million. On the same date, OCT Financial Leasing also entered into a leaseback agreement with Yibin Grace, pursuant to which OCT Financial Leasing agreed to lease the Equipment to Yibin Grace at the interest rate of 5.45% per annum for a term of 60 months. The lease consideration payable by Yibin Grace to OCT Financial Leasing comprises a security deposit of RMB30.00 million, a service fee of RMB9.00 million and the aggregate lease payments amounting to approximately RMB342.90 million. For further details, please refer to the announcement of the Company dated 11 September 2018.

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Disposal of 51% equity interest in Chengdu Tianfu OCT Lakeside Business Management Co. Ltd.

On 24 December 2018, Chengdu Tianfu OCT Industry Development Company Limited (成都天府華僑城實業發展有限公司, “ Chengdu OCT ”), Zhongbao Investment Overseas Chinese Town (Shenzhen) Tourism Cultural City Renewal Equity Investment Fund Partnership (Limited Partnership) (中保投華僑城(深圳)旅遊文化城市更新股權投資基金合夥企業(有限合 夥), “ Zhongbao Investment Fund ”) and Chengdu Tianfu OCT Lakeside Business Management Co. Ltd. (成都天府華僑城湖濱商業管理有限公司, “ OCT Lakeside ”) (a whollyowned subsidiary of Chengdu OCT) entered into an equity transfer agreement, pursuant to which Chengdu OCT agreed to sell 51% equity interest in OCT Lakeside to Zhongbao Investment Fund at the consideration of approximately RMB60.53 million. For further details, please refer to the announcement of the Company dated 24 December 2018.

Disposal of 100% equity interest in Zhongshan Huali

On 27 December 2018, Wantex Investment Limited (榮添投資有限公司), an indirectly wholly-owned subsidiary of the Company, entered into an equity transfer agreement with the successful bidders in the public tender to dispose of 100% equity interest in Zhongshan Huali to the successful bidders at the total consideration of approximately RMB150.29 million. The disposal indicated that the Group has fully withdrawn from its paper packaging business. For further details, please refer to the announcements of the Company dated 25 October 2018, 23 November 2018 and 27 December 2018.

For the six months ended 30 June 2019

Acquisition of 21% of equity interest and debt interest in Zhongshan Yuhong Real Estate Development Limited

On 26 March 2019, Shenzhen Huajing Investment Limited (深圳市華京投資有限公司) (“ Shenzhen Huajing ”), a wholly-owned subsidiary of the Company, entered into the cooperation agreement (the “ Yuhong Cooperation Agreement ”) with Zhuhai Yiyun Real Estate Limited (珠海依雲房地產有限公司) (“ Zhuhai Yiyun ”), Xiamen Yuzhou Grand Future Real Estate Development Company Limited (廈門禹洲鴻圖地產開發有限公司) (“ Xiamen Yuzhou ”) and Zhongshan Yuhong Real Estate Development Limited (中山禹鴻房地產開發有 限公司) (“ Target Company ”), pursuant to which Shenzhen Huajing agreed to acquire and Xiamen Yuzhou agreed to sell (i) 21% equity interests in the Target Company at a consideration of RMB1,263,447; and (ii) the debt in the principal amount of RMB331,551,594.94 owing by the Target Company to Xiamen Yuzhou together with the interest at an annual rate of 8% accrued thereon (the “ Target Debt Interest ”) for a consideration equivalent to the amount of the Target Debt Interest (the “ Acquisition ”). Pursuant to the Yuhong Cooperation Agreement, the total capital commitment to the Target Company to be provided by the shareholders of the Target Company shall not exceed RMB4,500,000,000, of which RMB945,000,000 shall be

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

attributable to Shenzhen Huajing, which is in proportion to its equity interest to be held in the Target Company after the completion of the Acquisition. For further details, please refer to the announcement of the Company dated 26 March 2019 and the circular of the Company dated 24 April 2019.

Finance lease and factoring framework agreements

On 7 May 2019, OCT Financial Leasing Co., Ltd. (華僑城融資租賃有限公司) (“ OCT Financial Leasing ”), a direct wholly-owned subsidiary of the Company, entered into the finance lease and factoring framework agreements (the “ Finance Lease and Factoring Framework Agreements ”) with (1) OCT Group and (2) OCT Ltd., respectively, pursuant to which OCT Financial Leasing agreed to provide finance lease and factoring services to OCT Group and OCT Ltd., respectively. Each of the Finance Lease and Factoring Framework Agreements shall be effective for one year from the date of approval of the Finance Lease and Factoring Framework Agreements by the independent Shareholders at the extraordinary general meeting held on 19 June 2019. For further details, please refer to the announcement of the Company dated 7 May 2019 and the circular of the Company dated 23 May 2019.

Acquisition of land use rights in Chaohu, Hefei, Anhui Province, PRC

On 15 May 2019, Shenzhen OCT Gangya Holdings Development Co., Ltd. (深圳華僑城 港亞控股發展有限公司) (“ OCT Gangya ”), an indirect wholly-owned subsidiary of the Company, and Hefei Guojia Industry Capital Management Co., Ltd. (合肥國嘉產業資本管理有 限公司) (“ Hefei Guojia ”) have jointly bidded and won the bid for the land use rights of the land situated at Chaohu, Hefei, Anhui Province of the PRC (the “ Land ”) at the price of RMB1,131,548,600. On 3 June 2019, OCT Gangya entered into a cooperation agreement (the “ Land Cooperation Agreement ”) with Hefei Guojia, pursuant to which OCT Gangya and Hefei Guojia agreed to establish a company (the “ Project Company ”), in which OCT Gangya and Hefei Guojia shall own 51% and 49% of the equity interest respectively, for the development of the Land. The total capital commitment to the Project Company made in accordance with the Land Cooperation Agreement shall not exceed RMB2,352,941,176, of which RMB1,200,000,000 and RMB1,152,941,176 is attributable to OCT Gangya and Hefei Guojia, respectively, in proportion to their respective shareholdings in the Project Company. For further details, please refer to the announcements of the Company dated 15 May 2019 and 3 June 2019, and the circular of the Company dated 24 June 2019.

Save as disclosed above, as at 31 December 2016, 2017 and 2018, and 30 June 2019, there are no other matters applicable to the Group and required to be disclosed under the requirements of paragraph 32 of Appendix 16 to the Listing Rules.

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GENERAL INFORMATION

APPENDIX II

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 INTEREST

Directors’ and chief executive’s interests and short positions in the securities of the Company and its associated corporations

As at the Latest Practicable Date, interests and short positions in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (“ SFO ”)) of the Directors and chief executives of the Company which have been notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which were taken or deemed to have under such provisions of the SFO) or have been entered in the register maintained by the Company pursuant to section 352 of the SFO, or otherwise have been notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies (the “ Model Code ”) are as follows:

			Approximate %
			of issued share
		Number of	capital of
Name of Director	Capacity/Nature	Shares held	the Company
Lam Sing Kwong Simon	Beneficial owner	1,000,000	0.13%
		(long position)

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor chief executives of the Company had any interests or short positions in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept by the Company under section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

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GENERAL INFORMATION

APPENDIX II

Persons who have interests or short positions which are disclosable under Divisions 2 and 3 of Part XV of the SFO

As at the Latest Practicable Date, as far as is known to the Directors, the following persons (not being a Director or chief executive of the Company) had interests or short positions in the Shares or underlying Shares of the Company which fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO as recorded in the register required to be kept by the Company pursuant to section 336 of the SFO:

			Approximate %	Approximate %
			**of **	issued share
Name of Substantial		Number of		capital of
Shareholder	Capacity/Nature	Shares held	the Company
Pacific Climax	Beneficial owner_(note 1)_	530,894,000		70.94%
		(long position)
OCT (HK)	Interest of a controlled	530,894,000		70.94%
	corporation_(note 2)_	(long position)
OCT Ltd.	Interest of a controlled	530,894,000		70.94%
	corporation_(note 3)_	(long position)
OCT Group	Interest of a controlled	530,894,000		70.94%
	corporation_(note 4)_	(long position)

Notes:

• (1) The interests held by Pacific Climax consist of interests (long position) in 530,894,000 Shares. Ms. Xie Mei and Mr. Lin Kaihua, both being executive Directors, and Mr. Zhang Jing, being a non-executive Director, are also directors of Pacific Climax.

• (2) OCT (HK) is the beneficial owner of all the issued share capital in Pacific Climax. Therefore, OCT (HK) is deemed, or taken to be interested in all the Shares beneficially held by Pacific Climax for the purpose of the SFO. Ms. Xie Mei, being an executive Director, and Mr. Zhang Jing, being a non-executive Director, are also directors of OCT (HK).

• (3) OCT Ltd. is the beneficial owner of all the issued share capital of OCT (HK), which is in turn the beneficial owner of all the issued share capital of Pacific Climax. OCT Ltd. is deemed, or taken to be interested in all the Shares which are beneficially owned by OCT (HK) and Pacific Climax pursuant to the SFO. OCT Ltd. is a company incorporated in the PRC, the shares of which are listed on the Shenzhen Stock Exchange. OCT Ltd. is a subsidiary of OCT Group.

• (4) OCT Group is the beneficial owner of 46.99% of the issued shares of OCT Ltd., which is the beneficial owner of all the issued shares of OCT (HK) and in turn, the beneficial owner of all the issued share capital of Pacific Climax. Therefore, OCT Group is deemed, or taken to be interested in all the Shares which are beneficially owned by OCT Ltd., OCT (HK) and Pacific Climax for the purpose of the SFO.

Save as disclosed above, no other interests required to be recorded in the register kept under section 336 of the SFO have been notified to the Company as at the Latest Practicable Date.

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GENERAL INFORMATION

APPENDIX II

3. COMPETING INTERESTS

As at the Latest Practicable Date, so far as the Directors are aware, none of the Directors or their respective close associates has any interest in any business which competes or is likely to compete with the businesses of the Group.

4. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors has a service contract with any member of the Group which was nit determinable by the Group within one year without payment of compensation (other than statutory compensation).

5. INTEREST IN THE GROUP’S ASSETS OR CONTRACTS OR ARRANGEMENTS SIGNIFICANT TO THE GROUP

As at the Latest Practicable Date, none of the Directors had any interest, direct or indirect, in any assets which have been, since 31 December 2018 (being the date to which the latest published accounts of the Company were made up), acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group subsisting at the date of this circular and which is significant in relation to the businesses of the Group.

6. MATERIAL ADVERSE CHANGE

The Directors confirm that there had been no material adverse change in the financial or trading position of the Group since 31 December 2018 (being the date to which the latest published accounts of the Company were made up) up to and including the Latest Practicable Date.

7. MATERIAL CONTRACTS

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

• (a) the equity transfer agreements (together with the supplemental agreement thereto) entered into between City Legend International Limited (“ City Legend ”) and Suzhou Wancheng Shengda Travel Development Co., Ltd. (蘇州萬程晟達旅遊發展 有限公司 ) on 10 May 2018 in relation to the acquisition of 5.11% equity interest in Tongcheng-Elong Holdings Limited by City Legend at a consideration of approximately RMB1.18 billion;

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GENERAL INFORMATION

APPENDIX II

• (b) the cornerstone investment agreement entered into between City Legend and Tianli Education International Holdings Limited (“ Tianli Education ”) and China International Capital Corporation Limited on 26 June 2018 in relation to subscription at 4.82% of the issued share capital of Tianli Education at a subscription price of approximately HK$266 million;

• (c) the cornerstone investment agreement entered into among City Legend, E-House (China) Enterprise Holdings Limited and China International Capital Corporation Hong Kong Securities Limited on 5 July 2018 in relation to the subscription of 73,371,900 shares in the E-House (China) Enterprise Holdings Limited at the subscription price of approximately HK$1,055 million;

• (d) the subscription agreement entered into between City Legend and Yuzhou Properties Company Limited (“ Yuzhou Properties ”) on 31 August 2018 in relation to the subscription of 460,489,606 new shares in Yuzhou Properties at the aggregate subscription price of HK$1,823,538,839.76;

• (e) the acquisition agreement and leaseback agreement both dated 11 September 2018 entered into between OCT Financial Leasing Co., Ltd., a wholly-owned subsidiary of the Company, and Yibin Grace Co., Ltd, pursuant to which OCT Financing Leasing Co., Ltd. agreed to acquire certain equipment from Yibin Grace Co., Ltd. at the consideration of RMB300 million and leaseback such equipment to Yibin Grace Co., Ltd.;

• (f) the equity transfer agreement dated 24 December 2018 entered into between Chengdu Tianfu OCT Industry Development Company Limited (成都天府 華僑城實業發展有限公司, “ Chengdu OCT ”), a non-wholly owned subsidiary of the Company, Zhongbo Investment Overseas Chinese Town (Shenzhen) Tourism Cultural City Renewal Equity Investment Fund Partnership (Limited Partnership) (中保投華僑城(深圳)旅遊文化城市更新股權投資基金合夥企業(有限合 夥), “ Zhongbao Investment Fund ”) and Chengdu Tianfu OCT Lakeside Business Management Co. Ltd. (成都天府華僑城湖濱商業管理有限公司, “ OCT Lakeside ”) in relation to the disposal of 51% equity interest in OCT Lakeside by Chengdu OCT to Zhongbo Investment Fund at the consideration of approximately RMB60.53 million;

• (g) the equity transfer agreement dated 27 December 2018 entered into between Wantex Investment Limited (榮添投資有限公司),an indirectly wholly-owned subsidiary of the Company, and Shenzhen Quande Investment Company Limited (深圳市全德投 資有限公司) and Shenzhen Zhijie Investment Company Limited (深圳智捷投資有限 公司) in relation to the disposal of 100% equity interest in Zhongshan Huali Packaging Co., Ltd. (中山華力包裝有限公司 ) at the total consideration of approximately RMB150.29 million;

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GENERAL INFORMATION

APPENDIX II

• (h) the cooperation agreement entered into on 26 March 2019, between Zhuhai Yiyun Real Estate Limited (珠海依雲房地產有限公司) (“ Zhuhai Yiyuan ”), Xiamen Yuzhou Grand Future Real Estate Development Company Limited (廈門禹州鴻圖地 產開發有限公司) (“ Xiamen Yuzhou ”), Shenzhen Huajing and Zhongshan Yuhong Real Estate Development Limited (中山禹鴻房地產開發有限公司) (“ Zhongshan Yuhong ”) in relation to the acquisition of 21% of equity interest and debt interest in Zhongshan Yuhong at a total consideration of approximately RMB340,380,433;

• (i) the equity transfer agreement dated 26 March 2019 and entered into between Xiamen Yuzhou and Shenzhen Huajing in respect of the acquisition of 21% of equity interest in Zhongshan Yuhong at a total consideration of RMB1,263,447;

• (j) the debt transfer agreement dated 26 March 2019 and entered into between Xiamen Yuzhou and Shenzhen Huajing in respect of the acquisition of 21% of debt interest in Zhongshan Yuhong at a total consideration of approximately RMB339,116,986;

• (k) the finance lease and factoring framework agreement entered into between OCT Financial Leasing Co., Ltd. (華僑城融資租賃有限公司) (“ OCT Financial Leasing ”), a directly wholly-owned subsidiary of the Company and Shenzhen Overseas Chinese Town Company Limited (深圳華僑城股份有限公司) on 7 May 2019 in relation to provision of finance lease and factoring services from OCT Financing Leasing to OCT Ltd. At an annual cap of RMB2,500,000,000 for one year from the date of independent shareholders’ approval;

• (l) the finance lease and factoring framework agreement entered between OCT Financial Leasing and OCT group on 7 May 2019 in relation to the provision of finance lease and factoring services from OCT Financial Leasing to OCT Group at an annual cap of RMB1,000,000,000 for one year from the date of independent shareholders’ approval;

• (m) The cooperation agreement dated 3 June 2019 and entered into between Shenzhen OCT Gangya Holdings Development Co., Ltd. (深圳華僑城港亞控股發展有限公司, “ OCT Gangya ”) and Hefei Guojia Industry Capital Management Co., Ltd. (合肥國 嘉產業資本管理有限公司, “ Hefei Guojia ”), pursuant to which the parties agreed to establish a joint venture company (the “Project Company”) for the development of parcels of land in Hefei and the total capital commitment to be made to the Project Company shall not exceed RMB2,352,941,176, of which RMB1,200,000,000 and RMB1,152,941,176 is attributable to OCT Gangya and Hefei Guojia, respectively, in proportion to their respective shareholdings in the Project Company;

• (n) the lease agreement dated 5 July 2019 and entered into between Overseas Chinese Town (Shanghai) Land Company Limited (華僑城(上海)置地有限公司, “ OCT Shanghai Land ”) and Shanghai Huahe Real Estate Development Co., Ltd. (上海華

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GENERAL INFORMATION

APPENDIX II

合房地產開發有限公司, “ Shanghai Huahe ”) in relation to the lease of the certain properties by OCT Shanghai Land to Shanghai Huahe for a term of 36 months from 1 August 2019 to 31 July 2022 at a monthly rent of RMB769,145;

• (o) the maximum amount guarantee agreement dated 11 July 2019 entered into between the Company and Shenzhen branch of Nanyang Commercial Bank (China) Limited (南洋商業銀行(中國)有限公司深圳分行, the “ Bank ”), pursuant to which the Company agreed to guarantee up to 49% of the loan (being RMB392,000,000) under a loan agreement between Chongqing OCT Real Estate Limited (重慶華僑城置地有 限公司) and the Bank; and

• (p) the limited partnership agreement dated 7 November 2019 entered into among Shenzhen Qianhai Yuzhou Fund Management Co., Ltd. (深圳前海禹舟基金管理有限 公司), Shenzhen OCT Huaxin Equity Investment Management Limited (深圳市華僑 城華鑫股權投資管理有限公司), Shenzhen Huajing Investment Limited (深圳市華京 投資有限公司) and Xiamen Zhongmao Yitong Commerce Co., Ltd. (廈門中茂益通 商貿有限公司) in relation to the establishment of Xiamen OCT Runyu Investment Partnership (Limited Partnership) (廈門華僑城潤禹投資合夥企業(有限合夥)).

8. LITIGATION

As at the Latest Practicable Date, neither the Company nor any member of the Group was engaged in any litigation or arbitration or claim of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened by or against the Company or any member of the Group.

9. GENERAL

• (a) The company secretary and the qualified accountant of the Company is Mr. Fong Fuk Wai, who is a fellow member of the Hong Kong Institute of Certified Public Accountants.

• (b) The Company’s registered office is at Clifton House, 75 Fort Street, PO Box 1350 GT, George Town, Grand Cayman, Cayman Islands. The head office and principal place of business is at 59/F., Bank of China Tower, 1 Garden Road, Hong Kong.

• (c) The Hong Kong branch share registrar and transfer office of the Company is Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

• (d) The English text of this circular shall prevail over the Chinese text.

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GENERAL INFORMATION

APPENDIX II

10. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of the following documents is available for inspection during normal business hours except on Saturday, Sunday and public holidays at the office of the Company in Hong Kong at 59/F., Bank of China Tower, 1 Garden Road, Hong Kong from the date of this circular up to and including 6 February 2020.

• (a) the memorandum and articles of association of the Company;

• (b) the annual reports of the Company for the years ended 31 December 2016, 2017 and 2018;

• (c) the interim report of the Company for the six months ended 30 June 2019;

• (d) the material contracts referred to in the paragraph headed “Material Contracts” in this Appendix;

• (e) a copy of each circular issued pursuant to the requirements set out in Chapters 14 and/or 14A of the Listing Rules which has been issued since 31 December 2018 (being the date of which the last published accounts of the Company were made up); and

• (f) this circular.

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