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.

Overseas Chinese Town (Asia) Holdings Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03366)

(1) MAJOR TRANSACTION IN RELATION TO SUBSCRIPTION OF 49% INTEREST IN THE CAYMAN FUND

AND

(2) MAJOR TRANSACTION IN RELATION TO GRANT OF REPURCHASE OPTION

AND

(3) VERY SUBSTANTIAL DISPOSAL IN RELATION TO DISPOSAL OF THE ENTIRE EQUITY INTEREST OF THE TARGET COMPANY

Capitalised terms used in this cover page shall bear the same meanings as those defined in the section headed “Definitions” in this circular.

A notice convening the EGM to be held at the conference room of the Company on 3/F., Jacaranda IBC, OCT Harbour, Baishi Road, Nanshan District, Shenzhen, China on 31 December 2020, Thursday at 9:00 a.m. is set out on pages EGM1 to EGM-3 of this circular. A form of proxy for use at the EGM is enclosed with this circular. Whether or not you plan to attend the EGM, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

PRECAUTIONARY MEASURES FOR THE EGM

Please refer to page 1 of this circular for the measures to be implemented at the EGM by the Company to protect the attendees from the risk of infection of the novel coronavirus (“ COVID-19 ”), including:

(i) compulsory body temperature check and filling out the health declaration form; (ii) compulsory wearing of surgical face mask; and (iii) no distribution of corporate gifts and no serving of refreshments. Any person who does not comply with the precautionary measures or is subject to any PRC Government prescribed quarantine may be denied entry into the EGM venue. For the health and safety of the Shareholders, the Company strongly advises the Shareholders to appoint the chairman of the meeting as your proxy to vote on the relevant resolution at the EGM as an alternative to attending the EGM in person.

15 December 2020

CONTENT

		Pages
Precautionary measures for the Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . .		1
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2
Letter from the	Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix I –	Financial information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
Appendix II –	Financial information of the Target Group . . . . . . . . . . . . . . . . . . . . . . .	II-1
Appendix III –	Unaudited pro forma financial information . . . . . . . . . . . . . . . . . . . . . . .	III-1
Appendix IV –	Property valuation report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	IV-1
Appendix V –	Business valuation report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	V-1
Appendix VI –	General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	VI-1
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		EGM-1

PRECAUTIONARY MEASURES FOR THE EXTRAORDINARY GENERAL MEETING

In view of the ongoing COVID-19 pandemic, the Company will implement necessary preventive measures at the forthcoming EGM to protect attending Shareholders, proxies and other attendees from the risk of infection, including:

(i) compulsory body temperature check will be conducted on every Shareholder, proxy and other attendee at the entrance of the EGM venue and a health declaration form must be filled out. Any person with a body temperature of over 37.2 degrees Celsius will be denied entry into the EGM venue or be required to leave the EGM venue;
(ii) attendees are required to prepare his/her own surgical face masks and wear the same inside the EGM venue at all times, and to maintain a safe distance between seats. Therefore, the number of seats at the EGM venue will be subject to restrictions and if necessary, the Company may restrict the number of people attending the EGM to avoid overcrowding at the venue;
(iii) no corporate gifts will be distributed and no refreshments will be served; and
(iv) the number of management of the Company attending the EGM in person will also be subject to restrictions. The Directors who will not attend the EGM in person will participate by video conference.

To the extent permitted under law, the Company reserves the right to deny entry into the EGM venue or require any person to leave the EGM venue in order to ensure the safety of the attendees at the EGM.

In the interest of all attendees’ health and safety, the Company wishes to advise all Shareholders that physical attendance in person at the EGM is not necessary for the purpose of exercising voting rights. By using proxy forms with voting instructions duly completed, Shareholders may appoint the chairman of the EGM as their proxy to vote on the relevant resolution at the EGM as an alternative to attending the EGM in person.

If any Shareholder chooses not to attend the EGM in person but has any question about any resolution or about the Company, or has any matter for communication with the Board, he/she is welcome to send such question or matter to our email at [email protected].

Subject to the development of COVID-19 pandemic, the Company may implement further changes and precautionary measures and may issue further announcement on such measures as appropriate.

DEFINITIONS

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

“Agreements” the Cooperation Agreement and the Sale and Purchase Agreement “Articles” the articles of association of HNW Investment Fund “Bank Loan” a loan in an amount of not more than HK$1,200 million to be advanced from a commercial bank to the Target Company to discharge the Liabilities for the purpose of the Disposal
“Board” the board of directors of the Company “Business Day(s)” a day on which licensed banks in the Cayman Islands, Hong Kong and Shenzhen of the PRC are open to the general public for business
“Cayman Fund” Serica Segregated Portfolio, a segregated portfolio to be created by HNW Investment Fund in accordance with the Articles
“CCB International” CCB International Asset Management Limited (建銀國際資產管理有限公司), a company incorporated in Hong Kong and licensed under the SFO to conduct Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management) regulated activities
“Chengdu Disposal” the disposal of 50.99% equity interest in Chengdu Tianfu OCT Industry Development Co., Ltd. (成都天府華僑城實業發展有限公司), details of which are set out in the Company’s announcement dated 4 September 2020 and circular dated 30 September 2020
“City Legend” City Legend International Limited (華昌國際有限公司), a company incorporated under the laws of Hong Kong and an indirect wholly owned subsidiary of the Company
“close associate(s)” has the meaning ascribed to it under the Listing Rules
“Closing Date” the closing date in relation to the offer of shares in the Cayman Fund (i.e. 31 December 2020 or such other day as the Manager may determine)
“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
“Completion” the completion of the Disposal
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DEFINITIONS

“Completion Date”	the date of Completion pursuant to the Sale and Purchase
	Agreement
“connected person(s)”	has the meaning ascribed to it under the Listing Rules
“controlling shareholder(s)”	has the meaning ascribed to it under the Listing Rules
“Cooperation Agreement”	the cooperation agreement dated 8 December 2020 entered into
	between the Company and HNW Investment Fund in relation to the
	Transactions
“Directors”	the directors of the Company
“Disposal”	the disposal of the entire issued shares of the Target Company
	(including the entire assets, rights and liabilities of the Target
	Company)
“Disposal Consideration”	the total consideration for the Disposal in the sum of approximately
	HK$2,037 million
“EGM”	the extraordinary general meeting to be convened by the Company
	for the Shareholders to consider and, if thought fit, approve the Sale
	and Purchase Agreement, the Disposal, and the transactions
	contemplated thereunder
“Group”	the Company and its subsidiaries as at the Latest Practicable Date
“HNW Investment Fund”	HNW Investment Fund Series SPC, an exempted company
	registered as a segregated portfolio company under the laws of
	the Cayman Islands with limited liability
“HK$”	Hong Kong dollar(s), the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China
“Independent Third Party(ies)”	third party(ies) independent of and not connected with the
	Company and its connected persons
“Independent Valuer”	Savills Valuation and Professional Services Limited
“Investor(s)”	the Company and the Other Investor(s)
“Latest Practicable Date”	14 December 2020, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information in this
	circular

DEFINITIONS

“Liabilities”	approximately HK$1,824 million, being the sum of the
	consideration for the transfer of 100% equity interest in Xi’an
	OCT Land to the Target Company and the consideration for the
	assignment of the rights in the debt, owed by Xi’an OCT Land to
	City Legend, to the Target Company pursuant to an equity transfer
	agreement and an assignment agreement both dated 29 July 2020
	and entered into between City Legend and the Target Company,
	respectively, details of which are set out in the section headed “The
	Sale and Purchase Agreement – Consideration” in this circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Manager”	the manager of the Cayman Fund, being CCB International
“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 Co., Ltd. (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 (stock code: 000069)
“Other Investor(s)”	investor(s) of the Cayman Fund (other than the Company)
“Pacific Climax”	Pacific Climax Limited, a company incorporated in the British
	Virgin Islands with limited liability, which is a controlling
	Shareholder
“Parties”	the Company and HNW Investment Fund, being the parties to the
	Cooperation Agreement
“Participating Share(s)”	the participating shares of the Cayman Fund to be subscribed by the
	Investors
“Performance Target(s)”	the expected rental income of the Target Company, being not less
	than RMB85,000,000, RMB93,000,000 and RMB100,000,000 in
	the year 2021, 2023 and 2025 respectively, pursuant to the
	Cooperation Agreement and the Private Placing Memorandum

DEFINITIONS

“Phoenix Ocean”	Phoenix Ocean Developments Limited (華秦發展有限公司), a
	company incorporated in the British Virgin Islands and, as at the
	Latest Practicable Date, owns the entire issued shares of the Target
	Company
“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
“Private Placing Memorandum”	the private placing memorandum together with its appendix and
	ancillary document(s) setting out the terms of the operation of the
	Cayman Fund
“Purchaser’s Loan”	a loan to be advanced by the Cayman Fund to the Target Company
	to discharge the Liabilities for the purpose of the Disposal
“Purchaser’s Loan Agreement”	the loan agreement to be entered into between the Cayman Fund
	and the Target Company for the purpose of advancing the
	Purchaser’s Loan to the Target Company
“Remaining Group”	the Group after completion of the Chengdu Disposal and the
	Disposal
“Repurchase Price”	the repurchase price to be paid by the Company or its designated
	third party to the Other Investor(s) upon the exercise of the
	Repurchase Option by the Other Investor(s) pursuant to the
	Cooperation Agreement and the Private Placing Memorandum
“Repurchase Option”	the rights of the Investors to require the Company or its designated
	third party to repurchase their Participating Shares at the
	Repurchase Price
“RMB”	Renminbi, the lawful currency of the PRC
“Sale and Purchase Agreement”	the sale and purchase agreement to be entered into between Phoenix
	Ocean, the Company and the Cayman Fund in relation to the
	Disposal
“SFC”	Securities and Futures Commission
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong), as amended from time to time
“Share(s)”	the share(s) of the Company
“Shareholder(s)”	the shareholder(s) of the Company

DEFINITIONS

“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subscription”	the subscription of not more than 49% interest of the Cayman Fund
	by the Company
“Subscription Agreement”	the subscription agreement under the Private Placing Memorandum
	to be entered into by the Company in relation to the Subscription
“Subscription Amount”	the subscription amount of not more than HK$417 million for the
	Subscription
“subsidiary(ies)”	has the meaning ascribed to it under the Listing Rules
“substantial shareholder(s)”	has the meaning ascribed to it under the Listing Rules
“Target Company”	City Turbo Limited (港名有限公司), a company incorporated in
	Hong Kong with limited liability and an indirect wholly-owned
	subsidiary of the Company
“Target Group”	the Target Company and its subsidiaries
“Transactions”	the Subscription, the grant of the Repurchase Option and the
	Disposal
“USD”	United States dollar(s), the lawful currency of the United States of
	America
“Xi’an OCT Land”	Xi’an OCT Land Co., Ltd.* (西安華僑城置地有限公司), a
	company established in the PRC and an indirect wholly-owned
	subsidiary of the Company
“%”	per cent

Unless otherwise specified in this circular, the exchange rate of HK$1.00 = RMB0.90125, and HK$1.00 = USD0.12903 have been used, where applicable, for the purpose of illustration only and does not constitute a representation that any amount has been, could have been or may be exchanged at such a rate or at any other rates.

In this circular, if there is any inconsistency between the Chinese names of the entities or enterprises established in the PRC and their English translations, the Chinese names shall prevail. The English translation of names or any descriptions in Chinese which are marked with “*” is for identification purpose only.

LETTER FROM THE BOARD

Overseas Chinese Town (Asia) Holdings Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03366)

Executive Directors: Mr. Zhang Dafan (Chairman) Ms. Xie Mei (Chief Executive Officer) Mr. Lin Kaihua

Non-executive Director: Mr. Wang Wenjin

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 15 December 2020

To the Shareholders

Dear Sir or Madam,

(1) MAJOR TRANSACTION IN RELATION TO SUBSCRIPTION OF 49% INTEREST IN THE CAYMAN FUND AND

(2) MAJOR TRANSACTION IN RELATION TO GRANT OF REPURCHASE OPTION

AND

(3) VERY SUBSTANTIAL DISPOSAL IN RELATION TO DISPOSAL OF THE ENTIRE EQUITY INTEREST OF THE TARGET COMPANY

INTRODUCTION

Reference is made to the announcement of the Company dated 8 December 2020 in relation to, (i) a major transaction regarding the subscription of 49% interest in the Cayman Fund; (ii) a major transaction regarding the grant of Repurchase Option; and (iii) a very substantial disposal regarding the disposal of the entire equity interest of the Target Company.

LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things, (i) details of the Transactions; (ii) financial information of the Group; (iii) financial information of the Target Group; (iv) the unaudited pro forma financial information; (v) the property valuation report; (vi) the business valuation report; (vii) other information as required under the Listing Rules; and (viii) a notice convening the EGM.

THE COOPERATION AGREEMENT

On 8 December 2020 (after trading hours), the Company and HNW Investment Fund have entered into the Cooperation Agreement, pursuant to which:

(i) HNW Investment Fund conditionally agreed to set up the Cayman Fund and the Company, as an investor of the Cayman Fund, conditionally agreed to subscribe for not more than 49% interest (assuming the total size of the Cayman Fund is HK$850 million) of the Cayman Fund at the Subscription Amount of not more than HK$417 million. Other Investor(s), who will not be connected person(s) of the Company, will subscribe for not less than 51% interest of the Cayman Fund; and
(ii) after the inception of the Cayman Fund, the Parties will procure the Cayman Fund and Phoenix Ocean, the sole shareholder of the Target Company, to enter into a separate Sale and Purchase Agreement, pursuant to which Phoenix Ocean will sell and assign, and the Cayman Fund will purchase, the entire issued shares of the Target Company (including the entire assets, rights and liabilities of the Target Company) at the Disposal Consideration in the sum of approximately HK$2,037 million.

The Cooperation Agreement shall take effect upon:

(1) the Cooperation Agreement having been duly executed by the Parties;
(2) the Company having obtained all necessary approvals, authorisations, consents and permits and completed all relevant procedures in accordance with the Listing Rules, and other applicable laws and regulations (including but not limited to obtaining the Shareholders’ approval at the EGM);
(3) the Transactions having been approved and authorised by the decision-making body of HNW Investment Fund; and
(4) the transfer of the entire issued shares of the Target Company (including the entire assets, rights and liabilities of the Target Company) contemplated under the Cooperation Agreement having been approved by the competent state-owned assets supervisory department or entity in the PRC.
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LETTER FROM THE BOARD

THE SUBSCRIPTION

Subject matter

Upon obtaining the necessary approvals and authorisations, HNW Investment Fund expects to incorporate the Cayman Fund by 31 December 2020, and appoint CCB International as the Manager. The size of the Cayman Fund is tentatively HK$850 million. The Company will subscribe for not more than 49% of the Participating Shares and Other Investor(s), who will not be connected person(s) of the Company, will subscribe for not less than 51% of the Participating Shares.

Assuming the size of the Cayman Fund is HK$850 million and the Company subscribes for 49% of the Participating Shares, the Subscription Amount to be made by the Company to the Cayman Fund will be approximately HK$417 million. The Investors shall pay for the Subscription Amount within seven days after the issuance of the payment notice by the Manager. The Company expects to fund its subscription capital contribution by its internal resources.

The size of the Cayman Fund and the Subscription Amount are determined after arm’s length negotiations between the Parties with reference to the anticipated capital requirements of the Cayman Fund, in particular, the amount of Disposal Consideration minus the Bank Loan. For further details of the Disposal, please refer to the section headed “The Disposal” in this circular below.

Besides, considering: (i) the Company can obtain a relatively stable expected distribution during the term of investment in the Cayman Fund, which allows the Company to maintain steady business development; (ii) the Company is optimistic about the future appreciation of the properties held by Xi’an OCT Land; (iii) the experience in fund operation and capital market of the Manager; and (iv) the benefits of the Transactions set out in the section headed “Reasons for and benefit of entering into the Transactions” in this circular below, the Directors are of the view that the Subscription will be beneficial to the Company and the Shareholders and the Subscription Amount is fair and reasonable.

Term of the Cayman Fund

The term of the Cayman Fund will be seven years from the Closing Date. With the consent of the Investors, the Manager can extend the term of the Cayman Fund.

An open period of, tentatively 90 days, shall commence every two years after the Closing Date (the “ Open Period ”), during which, with the consent of the Manager, the Investors may opt for transferring in whole or in part their Participating Shares to an investor recognised by the Manager or redemption by the Cayman Fund. With the unanimous consent of the Investors, the Cayman Fund can be liquidated and terminated two years after the Closing Date. If the term of the Cayman Fund is not extended upon expiry, HNW Investment Fund may redeem all issued shares of the Cayman Fund and proceed to liquidate and terminate the Cayman Fund. The Target Group will be disposed of to other parties and the net proceeds thereof will be distributed to the Investors.

LETTER FROM THE BOARD

Purpose of the Cayman Fund

The current tentative size of the Cayman Fund is HK$850 million, which amount will be applied to the acquisition of the entire issued shares of the Target Company, which in turn holds the entire equity interest in Xi’an OCT Land. If the Disposal is consummated, all the subscription amount of the Cayman Fund paid by all the Investors will be fully utilised in the acquisition of the Target Group and the Cayman Fund will not have capital left for investments into other projects.

As the Subscription and the Disposal are not inter-conditional, in the event that the Disposal is not consummated for whatever reason, all the Investors shall have the right (but not obligation) to request for the termination of the subscription agreement in relation to the subscription of shares in the Cayman Fund, and all the shares in the Cayman Fund (if any) issued and allotted to the Investors will be compulsorily redeemed by HNW Investment Fund in accordance with the Articles. Subject to all applicable laws and the Articles, the Cayman Fund will (after deduction of all incurred fees and expenses of the Cayman Fund) return and distribute to the Investors without any interest an amount in proportion to their respective capital paid up to the Cayman Fund as soon as reasonably practicable.

If the Disposal is not consummated for whatever reason, the Manager will review and assess whether there are suitable commercial real estate investment opportunities that fulfill the requirements of the Cayman Fund. Such investments shall meet the following requirements:

1) it is located in a new first-tier city in the PRC, including Nanjing, Tianjin, Chengdu, Hangzhou, Wuhan, Shenyang, Suzhou, Xi’an, Chongqing, Changsha and Qingdao;
2) it has been in operation for more than two years; and
3) it has generated more than RMB50 million in EBITDA in the past two years from commercial real estate related equity, bonds, stock bonds, hybrid instruments and/or real estate trust units issued outside the PRC.

The Manager will provide details of such other projects to the Investors, and the Investors may (at their absolute discretion) consent in writing to accept the new terms of the new investment to be made by the Cayman Fund and remain to be the Investors. As at the Latest Practicable Date, no specific project nor the number of investment projects to be invested in by the Cayman Fund has been confirmed in case the Disposal is not consummated.

The Cayman Fund cannot engage in any revolving investment. However, with the consent of the Manager, the cash held by the Target Company and Xi’an OCT Land will be allowed to be used for wealth management investment with low-to-medium risk and high liquidity (such as deposits and investment grade bonds with good liquidity).

Expected income of the Cayman Fund

It is expected that the rate of distribution will be approximately 7.2% per year of the investment amount in proportion to the interest each Investor held in the Cayman Fund, which will be distributed semiannually to each Investor. Based on the amount of rental income of Xi’an OCT Land for the relevant

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LETTER FROM THE BOARD

financial year, if the annual net rental income (excluding tax) does not exceed RMB100,000,000, the rate of distribution will be 7.2% per year. The rate of distribution will increase by 0.05% for every increment of RMB15,000,000 of annual rental income afterwards. Such performance benchmark will be implemented from the second month after the issuance of the relevant audited report of Xi’an OCT Land.

The expected rate of distribution is determined after arm’s length negotiations by the Parties with reference to: (i) the range of rate of distribution, which is approximately 6% to 12%, of other funds with similar size and investment portfolios in the market, which is based on the annual reports on the PRC private equity and venture capital firms issued by a leading Chinese service provider of this sector and the experience of the investment team of the Group; and (ii) the realised cashflow for operation of Xi’an OCT Land of approximately RMB89 million for the financial year ended 31 December 2019.

Assuming the total size of the Cayman Fund is approximately HK$850 million and the interest of the Company held in the Cayman Fund is 49%, the amount of distribution which is expected to be received by the Company each year from the Cayman Fund will be not more than approximately HK$29.98 million.

If the Disposal is not completed, the existing expected rate of distribution will no longer apply. The size of the Cayman Fund would remain at HK$850 million even in such event, and the Manager will try to identify other suitable commercial real estate projects. The Manager will provide details of such other projects identified, including the new expected rate of distribution.

If, upon receiving the details of the new project(s), the Company is of the view that the sizes of the new projects identified by the Manager cannot utilise the size of the Cayman Fund as much as possible, or if the expected rate of distribution is less than 7%, the Company will request for termination of the Subscription Agreement. In view of the above and the expected rate of distribution, the Directors consider that the arrangement is fair and reasonable.

Establishment cost and operation fees of the Cayman Fund

The establishment cost of the Cayman Fund shall first be borne by the Manager, and shall later be deducted from the management fee charged by the Manager. However, if the Cayman Fund could not be established and invested due to any reason caused by the Company and/or any of its affiliates, the Company and/or any of its affiliates shall reimburse the Manager the actual fee incurred.

Unless otherwise stated in the Cooperation Agreement and the Private Placing Memorandum, the operation fee of the Cayman Fund shall be borne by the Manager.

Capital management

During the term of the Cayman Fund, the cash level in the offshore bank account of the Cayman Fund shall not be less than an amount between USD5.05 million and USD5.65 million (the actual amount to be determined according to the actual size of the Cayman Fund), or an equivalent amount in Hong Kong dollars. Such amount is to be used for payment of the expected income of the Investors for half a year and the management fee to the Manager for the first year. Such bank deposit could be used for purchasing wealth management products with high liquidity or entrusted to professional institutions for management.

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LETTER FROM THE BOARD

The management fee shall be paid annually (before 31 January of the respective year) and calculated based on a rate of up to 1.3% of the actual paid up capital of the Cayman Fund. The first management fee shall be paid within 10 working days after the completion of subscription of the Participating Shares by the Company and the Other Investors.

The rate of the management fee is determined after arm’s length negotiations between the Parties with reference to the management fee ranging from 1% to 2% offered in other funds of similar nature managed by the Manager.

The Company undertakes to procure (but not guarantee) that Xi’an OCT Land shall have at least RMB60 million in its PRC bank account for operation purpose (the “ Onshore Reserve Fund ”) immediately upon remittance of the sum of RMB150 million by Xi'an OCT Land to the designated bank account of the Cayman Fund or the Target Company, and shall remit an amount of not less than RMB60 million each year to the Cayman Fund for the first two years of the inception of the Cayman Fund (the “ Offshore Reserve Fund ”, together with the Onshore Reserve Fund, the “ Reserve Fund ”). If there is a shortfall of fund, Xi’an OCT Land may use the Reserve Fund. If utilisation of such Reserve Fund results in Xi’an OCT Land having difficulty in its operation, then the Company guarantees and undertakes to HNW Investment Fund, the Cayman Fund, the Other Investor(s) and the Manager that the Company will, or the Company will procure its designated third party to, advance any such shortfall amount to Xi’an OCT Land (the “ Financial Support ”). When Xi’an OCT Land has sufficient cashflow, it should first repay the Company or any of its designated third party such amount.

At least three months before the second anniversary of the inception of the Cayman Fund, the Parties and the Manager will negotiate regarding the Financial Support arrangement for such shortfall amount subsequent to the third year of the inception of the Cayman Fund, and such arrangement shall only be proceeded after the Company has completed all necessary procedures and obtained all necessary approvals (if required) pursuant to the Listing Rules and other applicable laws and regulations.

The Company undertakes to procure (but not guarantee) that Xi’an OCT Land shall have a net cash balance of not less than RMB210 million (the “ Cash Balance ”) at Completion, of which RMB150 million shall be transferred by Xi'an OCT Land (the “ Required Transfer ”) to the designated account of the Cayman Fund or the Target Company within a reasonable period after the Completion (not later than 15 Business Days after the Completion). The Company undertakes to provide a copy of proof showing the remittance and receipt of the sum of RMB150 million to the Cayman Fund.

The Directors are of the view that the above arrangement is fair and reasonable after taking into account the following reasons:

based on the past performance of Xi’an OCT Land, the Company expects that Xi’an OCT Land will have sufficient working capital for its operation in the coming years and it is unlikely that the Company will be required to provide the Financial Support or Xi’an OCT Land would fail to achieve the obligations in relation to the Reserved Fund, the Cash Balance and the Required Transfer;
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LETTER FROM THE BOARD

as for the Financial Support, even if the Company is required to provide the shortfall, Xi’an OCT Land shall first return such amount provided by the Company when Xi’an OCT Land has sufficient cashflow. Further, the Company will negotiate with the Manager, the Cayman Fund and the Other Investor(s) on the Financial Support arrangement from the third year of the inception of the Cayman Fund;
having considered that Xi’an OCT Land has all along been operated by the Company and the Company is familiar with the PRC foreign exchange rules and the relevant procedures, the Company agrees to assist Xi’an OCT Land to remit RMB150 million to the account of the Cayman Fund;
the maintenance of the Cash Balance by Xi’an OCT Land at Completion and the Required Transfer will ensure that both Xi’an OCT Land and the Cayman Fund will have sufficient capital for the operation of the Cayman Fund and Xi’an OCT Land after Completion;
given that the Group will sell the entire interest in the Target Group including Xi’an OCT Land to the Cayman Fund and Xi’an OCT Land has been operated and owned by the Group since its establishment, such undertakings, which are a normal term in a sale and purchase transaction, will give confidence to the Other Investor(s) that the Cayman Fund and the Target Company will maintain a reasonable level of capital at the Cayman Fund and the Target Company and at the same time Xi’an OCT Land will have sufficient working capital; and
with the confidence and support of the Other Investor(s) and HNW Investment Fund, the Directors believe that Xi’an OCT Land will continue to grow, and the Investors including the Company will be benefitted from it.

Decision-making mechanism of the Cayman Fund

The Manager will be responsible for the decision-making and the daily operation of the Cayman Fund including making investment decisions of the Cayman Fund. Other operation matters and aspects of the Cayman Fund will be executed by the Manager according to the Private Placing Memorandum and its appendices, the Subscription Agreement, the management agreement and other ancillary documents of the Cayman Fund. The decision-making mechanism of the Cayman Fund will remain unchanged even if the Disposal is not consummated.

Decision-making mechanism of the Target Company and Xi’an OCT Land

Upon Completion and provision of the Purchaser’s Loan, the board of directors of the Target Company will consist of five directors, of whom two will be nominated by HNW Investment Fund, one will be nominated by the Other Investors, and two will be nominated by the Company. The quorum of the board meeting shall be five directors, and a board resolution shall be passed by a vote of more than two-thirds of the directors. Details of the decision-making mechanism of the Target Company will be set out in its articles of association.

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The decision-making mechanism of Xi’an OCT Land will be executed in accordance with its articles of association. General operation and management matters will be decided autonomously by the operation management of Xi’an OCT Land (the Parties agreed to retain the current operation team for the time being) within the scope of authority as granted by the board of directors of Xi’an OCT Land, and major operation and management decisions (including but not limited to asset disposal, leasing policy, rental proposal, organisation structural setup, major maintenance, investment, financing and external guarantee) will be decided by the board of directors of Xi’an OCT Land. Other decisions that fall within the scope of authority of the shareholders of Xi’an OCT Land will be decided in a shareholders’ meeting of Xi’an OCT Land.

The board of directors of Xi’an OCT Land will consist of five directors, of whom two will be nominated by HNW Investment Fund, one will be nominated by the Other Investors, and two will be nominated by the Company. Unanimous consent from all directors of Xi’an OCT Land shall be obtained for specified matters (including but not limited to significant investment, financing, guarantee, pledge, acquisition, disposal of assets, change of business, declaration of dividend, change in shareholding structure and liquidation of Xi’an OCT Land). Other than the above specified matters, a resolution shall be passed by a vote of more than two-thirds of the directors of Xi’an OCT Land.

Other details of the operation and corporate governance matters of the Target Company and Xi’an OCT Land will be set out in their respective articles of association and other internal documents.

If the Disposal is not consummated, the above decision-making mechanism will not apply.

Rights of the Investors

The Performance Targets and the Repurchase Option

The Company undertakes that the annual rental income (excluding tax) of Xi’an OCT Land in 2021, 2023 and 2025 will not be less than RMB85,000,000, RMB93,000,000 and RMB100,000,000, respectively. If the annual rental income of the corresponding year is lower than the Performance Target, the repurchase mechanism will be triggered. Other Investors may request the Company, and the Company shall purchase or procure a third party to repurchase the respective Participating Shares in whole or in part (the “ Option Shares ”) held by the Other Investors (the “ Repurchase Investor(s) ”) or to require HNW Fund Investment to sell part or all of its holdings of the Target Company.

The Repurchase Investor(s) may exercise the Repurchase Option by giving notice in writing to the Company (the “ Repurchase Notice ”). The Repurchase Price will be determined with reference to the appraised value of the Cayman Fund to be agreed by the Repurchase Investor(s) or the Manager (if appointed by such Repurchase Investor(s)) and the Company. Such appraisal will be conducted by a qualified appraisal institution jointly appointed by the Repurchase Investor(s) or the Manager (if appointed by such Repurchase Investor(s)) and the Company. Besides, the Company further undertakes that the Company or its designated third party shall complete the repurchase of the Option Shares at an agreed Repurchase Price within 120 days from the date of the Repurchase Notice (the “ Transfer Period ”).

If, due to the failure on the part of the Company, (i) the Company and the Repurchase Investor(s) fail to reach an agreement on the Repurchase Price within 90 days from the date of the Repurchase Notice or (ii) the purchase and transfer of the Option Shares fails to complete within the Transfer Period, the Company

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shall pay to the Repurchase Investor(s) an amount equivalent to 0.03% per day of the subscription amount for the Option Shares originally paid by the Repurchase Investor(s) calculated from the date of the Repurchase Notice until completion of the transfer of Option Shares.

The Company will further comply with the requirements of the Listing Rules if and when the Repurchase Price results in the transaction falling within a higher classification of notifiable transaction as defined under the Listing Rules.

If the Disposal is not completed, the Repurchase Option including the undertaking of the Performance Targets will lapse accordingly.

Entrusted Sale

During the Open Period, if the Manager agrees, the Investor(s) who intends to sell its shares, in whole or in part, to any other Investor(s) or third party (the “ Selling Investor ”) may entrust other non-selling Investors or any financial institutions recommended by the Manager (the “ Selling Agent ”) to sell their Participating Share(s) (the “ Entrusted Sale ”). The selling price shall be determined with reference to the appraised value assessed by an appraisal institution jointly appointed by the Manager and the Selling Agent and the appraised value shall be mutually confirmed by the parties. The other Investor(s) and the institutions that accepted the recommendation of the Manager shall be obliged to accept the entrustment.

If the Entrusted Sale is completed by the closing date of the Open Period, then the Selling Agent may be entitled to an amount of not more than 0.1% of the proceeds of the Entrusted Sale as its remuneration. If the Entrusted Sale is not successful, the Selling Agent shall pay the Selling Investor(s) an amount equivalent to 0.04% of the subscription amount of the Selling Investor per day calculated from the date of the written notice served by the Selling Investor. The Selling Investor and the Selling Agent shall separately agree on the other details of the Entrusted Sale.

The Selling Investor has to submit its application for Entrusted Sale to the Cayman Fund and notify the Selling Agent at least eight months before the last day of the relevant Open Period. The Entrusted Sale shall complete at an agreed selling price on or before the last day of the relevant Open Period.

Pre-emptive right

The other Investors shall enjoy a pre-emptive right to purchase under the same conditions if any of the Investors wishes to sell their Participating Shares. In the process of the exercise of pre-emptive rights, the pricing of the Participating Shares shall be carried out according to the pricing mechanism of the Repurchase Price. Where the Investor(s) exercise pre-emptive right(s), they may follow the method of the Entrusted Sale and charge a fee of not more than 0.1% of the purchase amount. The detailed arrangement, including the decision-making mechanism of the Cayman Fund, the Target Company and Xi’an OCT Land, if applicable, shall be negotiated separately. Depending on, among other things, the decision-making mechanism to be agreed, the Company may or may not treat the Cayman Fund as its subsidiary when there is a change in shareholding of the Company in the Cayman Fund.

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Termination of the Cooperation Agreement

With the unanimous consent of the Parties, the Parties can vary the terms of the Cooperation Agreement or terminate the Cooperation Agreement. If the inception of the Cayman Fund or subscription of the Participating Shares cannot be completed within a reasonable period, or the Disposal cannot be completed due to the failure to obtain the Bank Loan or other financing by the Target Company or any other reason, the Parties shall have the right to rescind the Cooperation Agreement and other agreements (including the Subscription Agreement). The Manager shall, as soon as possible, return the Subscription Amount paid by the Company after deducting the relevant fees and expenses.

THE DISPOSAL

Subject matter

Pursuant to the Cooperation Agreement, after the inception of the Cayman Fund, the Parties will procure the Cayman Fund and Phoenix Ocean to enter into a separate Sale and Purchase Agreement, pursuant to which Phoenix Ocean will sell and assign, and the Cayman Fund shall purchase, the entire issued shares of the Target Company (including the entire assets, rights and liabilities of the Target Company) at the Disposal Consideration in the sum of approximately HK$2,037 million, which shall be settled by way of the Bank Loan, the Purchaser’s Loan and direct payment from the Cayman Fund to Phoenix Ocean.

The Target Company shall use the Purchaser’s Loan and the Bank Loan to settle the Liabilities within three Business Days upon receiving the Purchaser’s Loan and the Bank Loan.

Purchaser’s Loan

The Purchaser’s Loan of approximately HK$624 million will be an interest-free loan, which will be advanced by the Cayman Fund to the Target Company upon Completion. The Target Company shall repay the Purchaser's Loan amount to the Cayman Fund upon three business days’ prior written notice, or may at any time, by giving the Cayman Fund not less than three business days’ prior notice, prepay all or a portion of the Purchaser’s Loan. The Purchaser’s Loan Agreement shall be terminated automatically when the principal amount of the Purchaser’s Loan is fully repaid.

Bank Loan

The Company undertakes to procure (but not guarantee) the Target Company to borrow the Bank Loan. The amount of the Bank Loan shall not be more than HK$1,200 million and 65% of the sum of (i) the appraised value of the properties owned by Xi’an OCT Land (including Building No.2 and Building No.3 of Chang’an Metropolis Centre and 270 carpark spaces) of approximately RMB1,605 million as at 30 September 2020, and (ii) the cash and cash equivalent of the Target Company (including RMB150 million to be remitted to the Target Company by Xi’an OCT Land pursuant to the Cooperation Agreement), amounting to RMB1,755 million (equivalent to approximately HK$2,080 million, based on the exchange rate of RMB0.84381 to HK$1.00). Based on the above, it is expected that the amount of Bank Loan available will reach HK$1,200 million, and the settlement method of the Disposal Consideration will not change. The term of the Bank Loan shall not be less than five years and it shall be extensible for two years or replaceable by

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other loans. The interest of the Bank Loan shall not be higher than 3.5% per annum, with interests payable quarterly and principal repayable on the due date. The Cayman Fund and the Investors will not provide any guarantee and credit enhancement for the Bank Loan.

The interest rate of the Bank Loan (not more than 3.5%), is determined after arm’s length negotiations between the Parties with reference to the Company’s average financing cost of offshore banks for borrowings of one to three years (the “ Average Financing Cost ”) in 2019, which is approximately 3.23%. Considering the term of the Bank Loan (five years and extensible for two years) is longer than three years, and the interest rate is expected to be higher than the Average Financing Cost, the Directors are of the view that the interest rate of the Bank Loan, being not more than 3.5%, is fair and reasonable.

The Bank Loan of HK$1,200 million is crucial to the success of the Disposal. Pursuant to the Sale and Purchase Agreement, the Bank Loan shall be advanced to Phoenix Ocean within five Business Days of the Completion Date. In light of the tight time frame and that the Target Company remains the subsidiary of the Company before Completion, the Company assists the Target Company to borrow the Bank Loan from a bank which has a long-term relationship with the Company. It enables the Target Company to obtain the Bank Loan with favourable terms, thereby reducing the finance costs of the Target Company. The Directors believe that the above arrangement is beneficial to the Company as an investor of the Cayman Fund, and thus is fair and reasonable.

Further details of the Disposal are set out in the section headed “The Sale and Purchase Agreement” in this circular below.

THE SALE AND PURCHASE AGREEMENT

The principal terms of the Sale and Purchase Agreement to be entered into before the EGM are summarised as follows:

Parties

(1) Phoenix Ocean;
(2) the Company; and
(3) the Cayman Fund.
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Consideration

The total Disposal Consideration payable under the Sale and Purchase Agreement shall be approximately HK$2,037 million and payable in the following manner:

(1) approximately HK$213 million shall be paid by the Cayman Fund to Phoenix Ocean upon Completion;
(2) the Purchaser’s Loan of approximately HK$624 million shall be advanced by the Cayman Fund to the Target Company upon Completion for the sole purpose of discharging the Liabilities; and
(3) the Bank Loan of HK$1,200 million shall be advanced to the Target Company within five Business Days of the Completion Date for the sole purpose of discharging the Liabilities.

The Liabilities of HK$1,824 million comprise of (i) the consideration for the transfer of 100% equity interest in Xi’an OCT Land to the Target Company in the sum of approximately RMB526 million (equivalent to approximately HK$583 million) pursuant to an equity transfer agreement dated 29 July 2020 and entered into between City Legend and the Target Company; and (ii) the consideration for the assignment of the rights in the debt, owed by Xi’an OCT Land to City Legend, to the Target Company in sum of approximately USD160 million (equivalent to approximately HK$1,241 million) pursuant to an assignment agreement dated 29 July 2020 and entered into between City Legend and the Target Company.

Basis of the Disposal Consideration

The Disposal Consideration is determined after arm’s length negotiations between the Parties with reference to: (i) the appraised value of Xi’an OCT Land of approximately RMB714 million (equivalent to approximately HK$793 million); and (ii) the amount of debt of approximately USD160 million (equivalent to approximately HK$1,241 million) owed by Xi’an OCT Land to City Legend, a wholly-owned subsidiary of the Company, as at 31 July 2020.

Considering: (i) the Disposal Consideration is determined with reference to the appraised value of Xi’an OCT Land by the Independent Valuer; and (ii) the interest free debt of approximately USD160 million can be collected by the Company in full without impairment or bad debt, the Directors are of the view that the Disposal Consideration is fair and reasonable.

Conditions precedent of the Disposal

The Completion is conditional upon satisfaction (or waiver if applicable) of the following conditions (inter alia) on or before the day falling at the end of three months from the date of the Sale and Purchase Agreement or such other date as may be agreed between the parties (the “ Longstop Date ”):

(a) Phoenix Ocean has obtained all necessary approvals, consents and authorisations (including but not limited to the approval from the Board and the Shareholders) as required under the Listing Rules, the articles of association of the Company and other applicable laws, for the execution of the Sale and the Purchase Agreement and the performance of its obligations thereunder;
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(b) the Cayman Fund has obtained all necessary approvals, consents and authorisations (including but not limited to consent, approval and authorisation from the competent corporate body of the Cayman Fund and the Manager) for the execution of the Sale and Purchase Agreement and the performance of its obligations thereunder;
(c) Phoenix Ocean has provided evidence showing that the equity transfer for Xi’an OCT Land has completed and the Target Company is the sole legal owner of the entire registered capital of Xi’an OCT Land;
(d) the Purchaser’s Loan Agreement has been duly executed by the parties thereto;
(e) the terms of the agreement for the Bank Loan have been approved by the lender to the satisfaction of the Cayman Fund;
(f) Phoenix Ocean has provided a written statement confirming that any agreement to which the Target Company or Xi’an OCT Land is a party, the articles of association or the constitutional document of the Target Company or Xi’an OCT Land have been amended to the extent necessary to remove any restriction that prevents or prohibits payment of dividend or other distribution to their respective shareholders;
(g) Phoenix Ocean has provided evidence showing that all the outstanding receivables owed to Xi’an OCT Land by its related parties have been duly collected or otherwise irrevocably released and discharged with effect on or before Completion;
(h) the valuation report in respect of Xi’an OCT Land's assets arranged by Phoenix Ocean has been duly issued and signed;
(i) the Manager has completed an independent assessment of the Disposal Consideration (including its composition and amount and the valuation of the properties); and
(j) Phoenix Ocean has provided a written statement confirming that any shareholder loan, any other banking or credit facilities, loans or financial accommodation of the Target Company and any encumbrance provided by the Company and/or any other person in connection with the aforesaid banking or credit facilities, loans or financial accommodation had been released and discharged with effect on or before Completion and any and all outstanding amounts (including principal and interest thereon) had been repaid in full by the Target Company to Phoenix Ocean or any other person to whom they are owed (as the case may be) on or before Completion.

If any of the conditions precedent has not been satisfied or is otherwise waived on or before the Longstop Date, then:

(a) the parties may agree to postpone the Longstop Date to a date (being a Business Day) falling not more than 15 Business Days after the Longstop Date; or
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(b) the party which is not responsible for the satisfaction of the relevant conditions precedent may terminate the Sale and Purchase Agreement by giving written notice to the other parties.

INFORMATION OF THE CAYMAN FUND

The Cayman Fund will be a segregated portfolio of HNW Investment Fund and the Private Placing Memorandum will be registered with the Cayman Islands Monetary Authority in accordance with the applicable laws in the Cayman Islands. The principal terms of the Cayman Fund under the Private Placing Memorandum and the Subscription Agreement are set out below:

Name of the Cayman Fund: Serica Segregated Portfolio Target fund size: HK$800 million – HK$1,000 million Subscription Amount of the not more than HK$417 million Company:

Investment objective and To achieve steady and long-term returns through primarily restrictions: investing directly or indirectly, or through holding equity interest or issued share capital of any investment holding company, in commercial real estate projects in the PRC as identified by the Manager from time to time, which can meet the requirements set out in the section headed “The Subscription – Purpose of the Cayman Fund” in this circular above.

The Cayman Fund is subject to the following investment restrictions:

the Cayman Fund shall only invest in the Target Company and other commercial real estate projects in 11 cities in the PRC, including Nanjing, Tianjin, Chengdu, Hangzhou, Wuhan, Shenyang, Suzhou, Xi’an, Chongqing, Changsha and Qingdao; and
the weighted average loan-to-value ratio of any target commercial real estate projects before or after such acquisition shall not exceed 65%.

Any income received by the Cayman Fund shall not be reinvested.

The investment restrictions may not be altered or waived unless a prior written consent of all the Investors is obtained.

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Management and operation of the HNW Investment Fund is responsible for the overall Cayman Fund: management of the Cayman Fund, including but not limited to the investment of the assets of the Cayman Fund. CCB International Asset Management Limited has been appointed by HNW Investment Fund Series SPC as the Manager in respect of the Cayman Fund.

The Investors are only investors of the Cayman Fund who do not participate in the daily operation of the Cayman Fund.

For details of the terms of the Cayman Fund, please refer to the section headed “The Subscription” in this circular above.

INFORMATION OF THE GROUP

The principal business activity of the Company is investment holding. The Group is principally engaged in comprehensive development, equity investment and fund management. Equity investment and fund management involve direct equity investment and private equity fund investment in the primary market. Comprehensive development involves development and sale of residential properties, development and management of commercial properties, and development and operation of tourism projects.

INFORMATION OF HNW INVESTMENT FUND AND CCB INTERNATIONAL

HNW Investment Fund is an exempted company registered as a segregated portfolio company under the laws of the Cayman Islands with limited liability. Its ultimate beneficial owner is CCB International (Holdings) Limited and is principally engaged in direct investment, asset management, and the provision of sponsor and underwriting, financial advice and securities brokerage services.

CCB International, the Manager of the Cayman Fund, is a company incorporated in Hong Kong and licensed under the SFO to conduct Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management) regulated activities. It is principally engaged in asset management and investment businesses, covering various sectors such as healthcare, consumer and retail, energy and transportation, information technology, media and real estate. According to its website, the Manager is experienced in managing SFC-authorised funds and private equity funds. It has the capacity to invest in all major asset classes including private and public equities and fixed income products.

CCB International is wholly-owned by CCB International (Holdings) Limited, which is in turn an indirect wholly-owned subsidiary of China Construction Bank Corporation. China Construction Bank Corporation is a joint stock company incorporated in the PRC with limited liability and the shares of which are listed on the main board of the Stock Exchange (stock code: 00939) and the Shanghai Stock Exchange (stock code: 601939).

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INFORMATION OF THE TARGET GROUP

The Target Company is an investment holding company incorporated in Hong Kong. As at the Latest Practicable Date, the Target Company is wholly owned by Phoenix Ocean, an investment holding company and an indirect wholly-owned subsidiary of the Company.

As at the Latest Practicable Date, the Target Company holds the entire equity interest in Xi’an OCT Land, which is a company established in the PRC with limited liability and is principally engaged in the provision of property leasing and management services.

Xi’an OCT Land holds the entire interest of the OCT Chang’an Metropolis Project, which is located at the Bell Tower business district at the centre of Xi’an City and is a commercial landmark along Chang’an Road. The project occupies a total gross floor area of approximately 104,700 square metres, comprising high-end office properties such as Building No. 2 and Building No. 3 of Chang’an Metropolis Centre, as well as part of the car parking spaces. As at the Latest Practicable Date, the rent level of the project ranked at the forefront among office buildings in Xi’an City, with an overall letting rate of approximately 82.5%.

Financial information of the Target Group

Set out below is a summary of the unaudited financial information of the Target Group for the two years ended 31 December 2018 and 31 December 2019, and the seven months ended 31 July 2020 respectively, prepared in accordance with the Hong Kong Financial Reporting Standards:

	For the year ended	For the year ended	For the seven
		31 December	months ended
	2018	2019	31 July 2020
	RMB’000	RMB’000	RMB’000
Revenue	77,961	89,708	53,502
Net profit before tax	9	30,934	11,808
Net profit after tax	9	24,563	8,837

Note:

No financial information is available for the Target Company as it is incorporated on 12 June 2020. The financial information of the Target Group has been prepared and presented as a continuation of the consolidated financial statements of Xi'an OCT Land. For details, please refer to the note 2 to the unaudited financial information of the Target Group in Appendix II to this circular.

The net asset of the Target Group as at 31 July 2020 was approximately RMB534 million.

For further information, please refer to the Financial Information of the Target Group set out in Appendix II to this circular.

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FINANCIAL EFFECT OF THE SUBSCRIPTION AND THE DISPOSAL AND USE OF PROCEEDS

The Subscription

Upon completion of the Subscription, the Group will hold not more than 49% interest in the Cayman Fund and the Cayman Fund will not become a subsidiary of the Company.

The Disposal

Upon Completion, the Group will indirectly hold not more than 49% interest in the Target Group through the Cayman Fund. The Target Group will cease to be the subsidiaries of the Company, and the financial results of the Target Group will no longer be consolidated into the accounts of the Group.

It is expected that the Group will realise a gain of approximately RMB169 million (equivalent to approximately HK$187 million) upon the Completion, which is calculated based on: (i) the Disposal Consideration of approximately HK$2,037 million; (ii) the amount of debt of approximately USD160 million (equivalent to approximately HK$1,241 million) owed by Xi’an OCT Land to City Legend as at 31 July 2020; (iii) the net assets of the Target Group as at 31 July 2020 of approximately RMB534 million (equivalent to approximately HK$593 million); and (iv) the estimated expenses including tax in connection with the Disposal of approximately RMB13.78 million (equivalent to approximately HK$15.29 million). The excess of the Disposal Consideration over the net book value of the Target Company will amount to approximately RMB183 million.

Assets and Liabilities

The assets and liabilities of the Group are estimated to be increased by approximately RMB134 million and decreased by approximately RMB35 million respectively after the Disposal. The estimated increase in assets and decrease in liabilities of the Group after the Disposal are arrived at by exclusion of the assets and liabilities of the Target Group as at 31 July 2020, and inclusion of the estimate net proceeds by deducting related tax.

For details, please refer to note (c) and note (d) of the pro forma adjustments set out from page III-7 to page III-8 of the Appendix III to this circular.

Shareholders should note that the financial effect is shown for reference only and the actual amount of gain or loss on the Disposal will be assessed based on the financial position of the Target Group as at Completion, and eventually be recognised in the consolidated financial statements of the Company upon completion of the Subscription and the Disposal.

Upon Completion, the net proceeds of the Disposal will be approximately RMB1,212 million. The Board intends to apply the net proceeds from the Disposal in the following manner: (i) approximately 90% for future investments, which include fund investments in the industries of cultural tourism and technology as well as new urbanisation projects in Yangtze Delta Region. The Group has all along been actively seeking investment opportunities with a view to obtaining high-quality resources and businesses with growing

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potential; (ii) approximately 10% as working capital; and (iii) if no suitable investment opportunities can be identified, the portion of the net proceeds originally intended for future investments will be used to repay the bank loans of the Group.

REASONS FOR AND BENEFIT OF ENTERING INTO THE TRANSACTIONS

The Disposal will provide the necessary capital for the Group’s business development, revitalise the Group’s assets and accelerate cash turnover to meet the Group’s strategic and operational needs. At the same time, the Subscription will allow the Company to continue to hold the Target Group and share the profit from the Target Group in the future.

The Directors (including the independent non-executive Directors) are of the opinion that the terms of the Cooperation Agreement, the Sale and Purchase Agreement and the Transactions are fair and reasonable, and the Transactions are in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

The Subscription

As the highest applicable percentage ratio calculated pursuant to Chapter 14 of the Listing Rules in respect of the Subscription is more than 25% but less than 100%, the Subscription constitutes a major transaction of the Company and is subject to the reporting, announcement, circular and Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

The Repurchase Option

The exercise of the Repurchase Option is at the discretion of the Other Investor(s) if Xi’an OCT Land fails to meet any of the Performance Targets. As the actual monetary value of each of the premium, the exercise price, the value of the underlying assets and the profits and revenue attributable to such assets in relation to the Repurchase Option has not been determined, and the highest possible monetary value cannot be estimated, the Company has, in accordance with Rule 14.76(1) of the Listing Rules, classified the grant of the Repurchase Option as a major transaction of the Company under the Listing Rules and the grant of the Repurchase Option is subject to the reporting, announcement, circular and Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

The Disposal

As the highest applicable percentage ratio calculated pursuant to Chapter 14 of the Listing Rules in respect of the Disposal exceeds 75%, the Disposal constitutes a very substantial disposal of the Company and is subject to the reporting, announcement, circular and Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

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GENERAL

As no Shareholder has a material interest in the Subscription or the Repurchase Option, none of the Shareholders is required to abstain from voting if the Company were to convene a general meeting for the approval of the Subscription and the Repurchase Option. The Company has obtained a written approval from Pacific Climax, which, as at the Latest Practicable Date, held 530,894,000 Shares (representing approximately 70.94% of the issued share capital of the Company as at the Latest Practicable Date) for the approval of the Subscription and Repurchase Option in lieu of a resolution to be passed at a general meeting of the Company pursuant to Rule 14.44 of the Listing Rules. As such, no extraordinary general meeting will be convened by the Company to approve the Subscription and the Repurchase Option.

The EGM will be convened and held for the Shareholders to consider and, if thought fit, approve the Sale and Purchase Agreement, the Disposal, and the transactions contemplated thereunder.

To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, HNW Investment Fund, CCB International and their respective ultimate beneficial owners are Independent Third Parties. No Shareholder has a material interest in the Transactions and none of the Shareholders and their respective close associates is required to abstain from voting in respect of the ordinary resolution to approve the Sale and Purchase Agreement, the Disposal, and the transactions contemplated thereunder at the EGM.

RECOMMENDATION

The Board considers that the terms of the Sale and Purchase Agreement and the Disposal are fair and reasonable, and the entering into of the Sale and Purchase Agreement and the Disposal are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors would recommend the Shareholders to vote in favour of a resolution approving the Sale and Purchase Agreement, the Disposal, and the transactions contemplated thereunder at the EGM.

ADDITIONAL INFORMATION

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

By the order of the Board Overseas Chinese Town (Asia) Holdings Limited Zhang Dafan

Chairman

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APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

Financial information of the Group for the financial years ended 31 December 2017, 2018 and 2019, and for the six months ended 30 June 2020 were disclosed in the following documents:

The audited consolidated financial statements of the Group for the year ended 31 December 2017 have 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 (https://www1.hkexnews.hk/listedco/listconews/sehk/2018/ 0413/ltn20180413403.pdf).

The audited consolidated financial statements of the Group for the year ended 31 December 2018 have 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 (https://www1.hkexnews.hk/listedco/listconews/sehk/2019/ 0426/ltn201904261057.pdf).

The audited consolidated financial statements of the Group for the year ended 31 December 2019 have been set out in pages 113 to 242 of the 2019 annual report of the Company which was posted on 5 May 2020 on the Stock Exchange’s website (https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0505/ 2020050500961.pdf).

The unaudited consolidated financial statements of the Group for the six months ended 30 June 2020 have been set out in pages 37 to 72 of the 2020 interim report of the Company which was posted on 17 September 2020 on the Stock Exchange’s website (https://www1.hkexnews.hk/listedco/listconews/sehk/ 2020/0917/2020091700745.pdf).

2. INDEBTEDNESS STATEMENT

As at the close of business on 31 October 2020, being the date of this indebtedness statement prior to the printing of this circular, the Group had a total borrowings of approximately RMB8,332.75 million, comprising secured and guaranteed bank and related party loans of approximately RMB2,877.12 million, and unsecured and unguaranteed bank and related party loans of approximately RMB5,455.63 million.

As at 31 October 2020, the Group’s secured and guaranteed bank loans were secured and guaranteed by: (i) other property, plant and equipment and interests in leasehold land held for own use with a total carrying value of approximately RMB1,799.53 million; and (ii) guarantees provided by OCT Ltd. and OCT (HK), which are intermediate parents of the Company.

As at 31 October 2020, the Group had outstanding obligations under lease with a carrying amount of approximately RMB75.01 million.

As at 31 October 2020, save for the guarantees of approximately RMB634.88 million given to financial institutions for mortgage facilities granted to buyers of the Group’s properties, the Group had no other material contingent liabilities.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

As at 31 October 2020, Overseas Chinese Town (Shanghai) Land Company Limited (華僑城（上海）置地有限公司, “ OCT Shanghai Land ”), a non-wholly owned subsidiary of the Company, participated in a real estate investment trust (the “ REITS ”) programme. The funds raised under the REITS programme totalled RMB2,150.00 million, consisting of preferential asset-backed securities which amounted to RMB1,935.00 million from investors other than the Group, and secondary asset-backed securities which amounted to RMB215.00 million 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 31 October 2020.

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 31 October 2020, the Group did not have any other outstanding mortgages, charges, debentures or other loan capital, bank overdrafts or loans, other similar indebtedness, lease liabilities 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 presently 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 any 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 2019 up to the Latest Practicable Date.

5. MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

After the Disposal, the Remaining Group will continue to carry out the existing businesses. Set out below are the management discussion and analysis of the Remaining Group for each of the three financial years ended 31 December 2017, 2018 and 2019, and the six months ended 30 June 2020.

For the year ended 31 December 2017

The total equity of the Remaining Group as at 31 December 2017 was approximately RMB9,121 million. As at 31 December 2017, the Remaining Group had current assets of approximately RMB14,042 million and current liabilities of approximately RMB6,919 million. The current ratio of the Remaining Group was approximately 2.03 as at 31 December 2017, which was

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

substantially the same comparing with that as at 31 December 2016 (31 December 2016: approximately 1.68). The Remaining Group generally financed its operations with internally generated cash flow, credit facilities provided by banks and shareholder’s loans.

As at 31 December 2017, the Remaining Group had outstanding bank and other loans of approximately RMB5,715 million, without any fixed-rate loans. As at 31 December 2017, the interest rates of bank and other loans of the Remaining Group ranged from 1.28% to 5.225% per annum. Some of those bank loans were secured by floating charges of certain assets of the Remaining Group and corporate guarantees provided by certain subsidiaries of the Company. The Remaining Group’s gearing ratio (being the total borrowings including bills payable and loans divided by the total assets) was approximately 62.66% as at 31 December 2017, representing a decrease of 18.45 percentage points as compared with approximately 81.11% as at 31 December 2016, mainly due to the issue of the perpetual capital securities in the amount of US$800.00 million (the “ Perpetual Capital Securities ”) during the year ended 31 December 2017, which resulted in the decrease in the amount of loans and the increase in liquidity.

As at 31 December 2017, approximately 94.46% of the total amount of outstanding bank and other loans of the Remaining Group amounting to approximately RMB4,090 million was denominated in Hong Kong Dollars; approximately 5.54% of which amounting to approximately RMB240 million was denominated in RMB; and no outstanding bank and other loans were denominated in United States Dollars. As at 31 December 2017, the total cash and bank balance of the Remaining Group was approximately RMB6,173 million, of which approximately 11.64% was denominated in United States Dollars, approximately 26.45% was denominated in RMB and approximately 61.91% was denominated in Hong Kong Dollars.

For the year ended 31 December 2018

The total equity of the Remaining Group as at 31 December 2018 was approximately RMB8,721 million. As at 31 December 2018, the Remaining Group had current assets of approximately RMB10,039 million and current liabilities of approximately RMB8,181 million. The current ratio was approximately 1.23 as at 31 December 2018, representing a decrease of 0.8 as compared with that as at 31 December 2017 mainly due to inventory of approximately RMB1,960 million being transferred from current assets to non-current assets and a number of additional longterm equity investment projects during the period. The Remaining Group generally financed its operations with internally generated cash flow, credit facilities provided by banks and shareholder’s loans.

As at 31 December 2018, the Remaining Group had outstanding bank and other loans of approximately RMB7,720 million, without any fixed-rate loans. As at 31 December 2018, the interest rates of bank and other loans of the Remaining Group ranged from 3.14% to 5.00% per annum. Some of those bank loans were secured by certain assets of the Remaining Group and corporate guarantees provided by certain related companies of the Company. The Remaining Group’s gearing ratio (being the total borrowings including bills payable and loans divided by the total assets) was approximately 88.52% as at 31 December 2018, representing an increase of 25.85 percentage points as compared with approximately 62.66% as at 31 December 2017, mainly due to the increase in the amount of loans as 31 December 2018.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

As at 31 December 2018, approximately 100.00% of the total amount of outstanding bank and other loans of the Remaining Group amounting to approximately RMB5,682 million was denominated in Hong Kong Dollars.

As at 31 December 2018, the total cash and bank balance of the Remaining Group was approximately RMB3,168 million, of which approximately 23.83% was denominated in United States Dollars, approximately 53.19% was denominated in RMB and approximately 22.98% was denominated in Hong Kong Dollars.

For the year ended 31 December 2019

The total equity of the Remaining Group as at 31 December 2019 was approximately RMB10,087 million. As at 31 December 2019, the Remaining Group had current assets of approximately RMB8,396 million and current liabilities of approximately RMB4,283 million. The current ratio was approximately 1.96 as at 31 December 2019, representing an increase of 0.73 as compared with that as at 31 December 2018, mainly due to a drawdown of HK$2,250 million from the Bank of China in 2019 in replacement of other short-term bank loans over the same period. The Remaining Group generally financed its operations with internally generated cash flow, credit facilities provided by banks and shareholder’s loans.

As at 31 December 2019, the Remaining Group had outstanding bank and other loans of approximately RMB8,824 million without any fixed-rate loans. As at 31 December 2019, the interest rates of bank and other loans of the Remaining Group ranged from 3.37% to 4.24% per annum. Some of those bank loans were secured by certain assets of the Remaining Group and corporate guarantees provided by certain related companies of the Company. The Remaining Group’s gearing ratio (being the total borrowings including bills payable and loans divided by the total assets) was approximately 87.48% as at 31 December 2019, representing an increase of 1.04 percentage points as compared with approximately 88.52% as at 31 December 2018, mainly due to the increase in the amount of loans as at 31 December 2019.

As at 31 December 2019, approximately 63.15% of the total amount of outstanding bank and other loans of the Remaining Group amounting to approximately RMB5,021 million was denominated in Hong Kong Dollars and approximately 36.85% of which amounting to approximately RMB2,930 million was denominated in RMB.

As at 31 December 2019, the total cash and bank balance of the Remaining Group was approximately RMB2,435 million, of which approximately 30.94% was denominated in United States Dollars, approximately 27.65% was denominated in RMB and approximately 41.41% was denominated in Hong Kong Dollars.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

For the six months ended 30 June 2020

The total equity of the Remaining Group as at 30 June 2020 was approximately RMB11,466 million. As at 30 June 2020, the Remaining Group had current assets of approximately RMB10,558 million and current liabilities of RMB3,368 million. The current ratio of the Remaining Group was approximately 3.13 as at 30 June 2020. The Remaining Group generally financed its operations with internally generated cash flow, credit facilities provided by banks and shareholder’s loans.

As at 30 June 2020, the Remaining Group had outstanding bank and other loans of approximately RMB10,492 million, without any fixed-rate loans. As at 30 June 2020, the interest rates of bank and other loans of the Remaining Group ranged from 1.59% to 4.41% per annum. Some of those bank loans were secured by floating charges of certain assets of the Remaining Group and corporate guarantees provided by certain subsidiaries of the Company. The Remaining Group’s gearing ratio (being the total borrowings including bills payable and loans divided by the total assets) was approximately 91.51% as at 30 June 2020, representing an increase of 3.00 percentage points as compared with approximately 88.52% as at 30 June 2019, mainly due to the increase in loans.

As at 30 June 2020, approximately 86.39% of the total amount of outstanding bank and other loans of the Remaining Group amounting to approximately RMB6,545 million was denominated in Hong Kong Dollars; approximately 13.61% of which amounting to approximately RMB1,031 million was denominated in RMB; and no outstanding bank and other loans were denominated in United States Dollars.

As at 30 June 2020, the total cash and bank balance of the Remaining Group was approximately RMB2,065 million, of which approximately 37.03% was denominated in United States Dollars, approximately 32.77% was denominated in RMB and approximately 30.02% was denominated in Hong Kong Dollars.

Funding and treasury policies

The Remaining 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 interests at floating rates.

The Remaining Group considers that exchange rate fluctuations may have some effect on the overall financial performance of the Remaining Group but it is still at a manageable level. The Remaining 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 2017, 2018 and 2019 and 30 June 2020, the Remaining Group had no material exposure under foreign exchange contracts or any other hedging instruments.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Interest expenses

For the years ended 31 December 2017, 2018 and 2019, and the six months ended 30 June 2020, the interest expenses of the Remaining Group were approximately RMB142.31 million, RMB144.88 million, RMB227.93 million and RMB106.30 million, respectively. A large portion of the interest expenses was incurred as a result of bank borrowings obtained by the Remaining Group for the development of integrated businesses.

Employees and remuneration policy

As at 31 December 2017, 2018 and 2019 and 30 June 2020, the Remaining Group employed approximately 1,020, 578, 218 and 182 full-time employees, respectively. The basic remunerations of the employees of the Remaining Group are determined with reference to the industry’s remuneration benchmark, the employees’ experience and their performance, and equal opportunities are 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 Remaining Group also provides bonuses to the staff based upon the Remaining Group’s results and their individual performance.

The Remaining 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 Remaining Group maintains a good relationship with its employees. Most members of senior management have been working for the Remaining 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 2017, 2018 and 2019 and 30 June 2020, no share option was granted, exercised, lapsed or cancelled.

Contingent liabilities

As at 31 December 2017, 2018 and 2019 and 30 June 2020, guarantees given to financial institutions for mortgage facilities granted to buyers of the Remaining Group’s properties amounted to approximately RMB57.97 million, RMB139.28 million, RMB50.32 million and RMB35.82 million, respectively.

The Remaining 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 Remaining 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 instalment before the issuance of the individual property ownership certificate, the banks can draw

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

down the security deposits up to the amount of the outstanding mortgage instalments and demand the Remaining Group to repay the outstanding balance to the extent that the deposit balance is insufficient.

The amount of security deposits required varies among different banks, but usually within the 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 Remaining Group will sustain a loss under these guarantees as the banks have the rights to sell the property and recover the outstanding loan balance from the sale proceeds if the property buyers default on payment. The management also considers that the market value of the underlying properties is able to cover the outstanding mortgage loans guaranteed by the Remaining Group. No liabilities are therefore recognised in respect of these guarantees.

Significant investments

For the year ended 31 December 2017, the Remaining Group did not hold any significant investment which was classified as equity securities designated at fair value through other comprehensive income (“ FVOCI ”). For the years ended 31 December 2018 and 2019, and for the six months ended 30 June 2020, the significant investments held by the Remaining Group which were classified as FVOCI were as follows:

For the year ended 31 December 2018

							Size of the
							investment to
							the value of
	Number of	Approximate					the total assets
	shares held by	percentage of	Net gain/(loss)	Dividend			of the
	the Remaining	shareholding	for the year	received for		Fair value	Remaining
	Group as at	as at	ended	the year ended		as at	Group as at
	31 December	31 December	31 December	31 December	Investment	31 December	31 December
Name of investment	2018	2018	2018	2018	cost	2018	2018
		%	RMB’000	RMB’000	RMB’000	RMB’000	%
Equity securities
designated at FVOCI
Listed shares
Tongcheng-Elong Holdings
Limited
(stock code: 0780)
(“Tongcheng-Elong”)
(note 1)	106,079,480	5.09	14,635	0	1,176,471	1,161,836	4.65
			(note 2)

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Notes:

Tongcheng-Elong and its subsidiaries are principally engaged in the provision of travel products and services in the PRC’s online travel industry. Their products and services include accommodation reservation, transportation ticketing, attractions ticketing and various ancillary value-added products and services.
The net movement is recognised in other comprehensive income.

For the year ended 31 December 2019

							Size of the
							investment to
							the value of
	Number of	Approximate					the total assets
	shares held by	percentage of	Net gain/(loss)	Dividend			of the
	the Remaining	shareholding	for the year	received for		Fair value	Remaining
	Group as at	as at	ended	the year ended		as at	Group as at
	31 December	31 December	31 December	31 December	Investment	31 December	31 December
Name of investment	2019	2019	2019	2019	cost	2019	2019
		%	RMB’000	RMB’000	RMB’000	RMB’000	%
Equity securities
designated at FVOCI
Listed shares
Tongcheng-Elong	106,079,480	4.99	166,598	0	1,176,471	1,328,434	5.02
			(note 1)

Note:

The net movement is recognised in other comprehensive income.

For the six months ended 30 June 2020

							Size of the
							investment to
							the value of
	Number of	Approximate					the total assets
	shares held by	percentage of	Net gain/(loss)	Dividend			of the
	the Remaining	shareholding	for the year	received for		Fair value	Remaining
	Group as at	as at	ended	the year ended	Investment	as at	Group as at
Name of investment	30 June 2020	30 June 2020	30 June 2020	30 June 2020	cost	30 June 2020	30 June 2020
		%	RMB’000	RMB’000	RMB’000	RMB’000	%
Equity securities
designated at FVOCI
Listed shares
Tongcheng-Elong	106,079,480	4.95	24,252	0	1,176,471	1,352,685	4.62
			(note 1)

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Note:

The net movement is recognised in other comprehensive income.

Going forward, the Remaining Group will actively explore equity investment opportunities through the prudent selection of high-quality projects that are in line with its corporate development strategy specialising in culture, tourism, new urbanisation and industrial ecosphere investment. The Remaining Group will continue to adopt prudent capital management and liquidity risk management policies and practices to preserve adequate buffer to meet the challenges ahead.

Material acquisitions and disposals

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. 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, Shenzhen Huayou Investment Co., Ltd. (深圳市華友投資有限公司, “ Shenzhen Huayou ”) 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 several other 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 Shenzhen Huayou 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.

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

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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 million

On 11 October 2017, the Company successfully issued the Perpetual Capital Securities in an aggregate principal amount of US$800 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 with New China OCT Fund SPC (on behalf of New China OCT Fund SP 1) (“ New China Fund ”) and Capital Converge Holdings Limited (“ Capital Converge ”), as supplemented by a supplemental agreement dated 15 November 2017 and entered into between the Company, New China Fund and Capital Converge, pursuant to which the Company disposed of 51% of the total issued share capital of Capital Converge and 51% of the loan amounting to approximately RMB1,280 million owed by Honour Ray Co., Ltd to the Company, 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.

For the year ended 31 December 2018

Disposal of Huali Packaging (Huizhou)

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.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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) entered into equity transfer agreements, pursuant to which City Legend agreed to acquire 5.11% equity interest in Tongcheng-Elong 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. (華僑城（常熟）投資發展有限公司) (“ 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 (the “ Changshu Land ”) at the base bid price of approximately RMB18.78 million. OCT Changshu entered into a land transfer agreement with Changshu Land and Resources Bureau (常熟市國土資源局) 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, among others, Tianli Education International Holdings Limited (“ Tianli Education ”), pursuant to which City Legend agreed to subscribe for 5% of the total issued shares of Tianli Education immediately upon the listing of the shares of Tianli Education on the Stock Exchange (not taking into account the exercise of the any over-allotment option) at the offer price as part of the international offering of Tianli Education. 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.

Cornerstone investment in E-House Enterprise

On 5 July 2018, City Legend entered into a cornerstone investment agreement with, among others, E-House (China) Enterprise Holdings Limited (“ E-House Enterprise ”), pursuant to which City Legend agreed to acquire 73,371,900 shares of E-House Enterprise at the offer price as part of the international offering of E-House Enterprise. The subscription was completed on 20 July 2018 at a total effective subscription price of approximately HK$1.07 billion, representing approximately 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.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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 Co., Ltd. (華僑城融資租賃有限公司) (“ 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 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 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.

Disposal of 51% equity interest in OCT Lakeside

On 24 December 2018, Chengdu Tianfu OCT Industry Development Company Limited (成都天府華僑城實業有限公司, “ 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 wholly-owned 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. Upon completion of the transfer, OCT Lakeside was owned as to 49% and 51% by Chengdu OCT and Zhongbao Investment Fund, respectively, and ceased to be a subsidiary of the Company. For details, please refer to the announcement of the Company dated 24 December 2018.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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 Packaging Co., Ltd. (中山華力包裝有限公司) 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 year ended 31 December 2019

Acquisition of 21% of equity interest and debt interest in Zhongshan Yuhong

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) (“ Zhongshan Yuhong ”), pursuant to which Shenzhen Huajing agreed to acquire and Xiamen Yuzhou agreed to sell: (i) 21% equity interests in Zhongshan Yuhong at a consideration of RMB1,263,447; and (ii) the debt in the principal amount of RMB331,551,594.94 owing by Zhongshan Yuhong to Xiamen Yuzhou together with the interest at an annual rate of 8% accrued thereon (the “ Target Debt ”) for a consideration equivalent to the amount of the Target Debt (the “ Acquisition ”). Pursuant to the Yuhong Cooperation Agreement, the total capital commitment to Zhongshan Yuhong to be provided by the shareholders of Zhongshan Yuhong shall not exceed RMB4,500,000,000, of which RMB945,000,000 shall be attributable to Shenzhen Huajing, which is in proportion to its equity interest to be held in Zhongshan Yuhong 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 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., at an annual cap of RMB1,000,000,000 and RMB2,500,000,000, 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 of the Company 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.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Acquisition of land use rights in the Chaohu Land

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 “ Chaohu 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 joint venture 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 Chaohu 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.

Establishment of Xiamen Partnership

On 7 November 2019, 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 OCT Huaxin ”) and Shenzhen Huajing, both of which are indirect wholly-owned subsidiaries of the Company, entered into a limited partnership agreement with Shenzhen Qianhai Yuzhou Fund Management Co., Ltd. (深圳前海禹舟基金管理有限公司, “ Yuzhou Fund Management ”) and Xiamen Zhongmao Yitong Commerce Co., Ltd. (廈門中茂益通商貿有限公司, “ Xiamen Zhongmao ”) 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), the “ Xiamen Partnership ”) with the total capital contribution of RMB1.5 billion. The capital contribution to be subscribed by Yuzhou Fund Management, Shenzhen OCT Huaxin, Shenzhen Huajing and Xiamen Zhongmao will be RMB1,000,000, RMB1,000,000, RMB1,168,000,000 and RMB330,000,000, respectively. For further details, please refer to the announcement of the Company dated 7 November 2019 and the circular of the Company dated 24 December 2019.

Acquisition of land use right in Hefei Airport International Town

Hefei OCT Industry Development Co., Ltd. (合肥華僑城實業發展有限公司, “ Hefei OCT Industry ”), an indirect non-wholly owned subsidiary of the Company, has successfully won the bid of the land use rights of the five (5) parcel of land with a total site area of approximately 1,042 mu located at the first phase of Hefei Airport International Town (the “ Hefei Airport Land ”), at the total consideration of approximately RMB2,644 million. On 27 December 2019, Hefei OCT Industry entered into the State-owned Land Use Rights Grant Contracts (國有土地使用權出讓合同) with Hefei Municipal Natural Resources and Planning Bureau (合肥市自然資源和規劃局) in relation to the acquisition of land use rights of the Hefei Airport Land. For further details, please refer to the announcement of the Company dated 13 December 2019 and the circular of the Company dated 23 January 2020.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Disposal of Listed Securities in Tianli Education

Between 7 November 2019 and 20 December 2019, City Legend disposed of an aggregate of 57,334,000 shares of Tianli Education in a series of transactions on the market and through block trade. For further details, please refer to the announcement of the Company dated 20 December 2019.

For the six months ended 30 June 2020

Second disposals of listed securities in Tianli Education

On 3 January 2020, City Legend disposed on-market and through block trade an aggregate of 42,666,000 shares of Tianli Education in a series of transactions, at the average selling price of HK$3.10 per share of Tianli Education. The aggregate gross sale proceeds from the disposals are approximately HK$132.3 million (excluding transaction costs). After the disposal, the Group ceased to hold any shares of Tianli Education. For further details, please refer to the announcement of the Company dated 3 January 2020.

Investment in Dongguan Partnership

On 6 March 2020, Shenzhen OCT Huaxin and Shenzhen Huayou, both of which are indirect wholly-owned subsidiaries of the Company, entered into a limited partnership agreement with Dongguan City Industrial Investment Parent Fund Co., Ltd. (東莞市產業投資母基金有限公司) (“ Dongguan Industrial Investment ”), Guangdong Province Yueke Songshan Lake Innovation Venture Capital Parent Fund Co., Ltd. (廣東省粵科松山湖創新創業投資母基金有限公司) (“ Songshan Lake Venture Capital ”) and Dongguan City Multiplier Program Industrial M&A Parent Fund Partnership (Limited Partnership) (東莞市倍增計劃產業併購母基金合夥企業（有限合夥）) (“ Dongguan Industrial M&A ”) in relation to the establishment of Dongguan City OCT Lüwen Technology Investment Partnership (Limited Partnership) (東莞市華僑城旅文科技投資合夥企業（有限合夥）) (the “ Dongguan Partnership ”) for the purpose of the investment (the “ Limited Partnership Agreement ”). The total capital contribution to be subscribed by all partners to the Dongguan Partnership is RMB300 million. The capital contribution subscribed by Shenzhen OCT Huaxin, Shenzhen Huayou, Dongguan Industrial Investment, Songshan Lake Venture Capital and Dongguan Industrial M&A were RMB3,000,000, RMB132,000,000, RMB75,000,000, RMB60,000,000 and RMB30,000,000, respectively. For further details, please refer to the announcement of the Company dated 6 March 2020.

Renewal of finance lease and factoring framework agreements

On 18 May 2020, OCT Financial Leasing entered into finance lease and factoring framework agreements with: (1) OCT Group; and (ii) OCT Ltd., each being a connected person of the Company, respectively, pursuant to which OCT Financial Leasing agreed to provide finance lease and factoring services to OCT Group and OCT Ltd. Each of the finance lease and factoring framework agreements was effective for one year from the date of approval of the financial lease and factoring agreements by the independent Shareholders at the extraordinary general meeting of the Company held on 19 June 2020 (the “ Effective Period ”). The annual caps for the Effective Period for each of financial

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

lease and factoring agreements were RMB1,000,000,000. For further details, please refer to the announcements of the Company dated 7 May 2019, 19 June 2019 and 18 May 2020, and the circular of the Company dated 29 May 2020.

Transfer of 1% equity interest in Dongguan Partnership

On 12 June 2020, Shenzhen Huayou entered into an equity transfer agreement with Happy Valley Cultural Tourism Development Co., Ltd. (歡樂谷文化旅遊發展有限公司) (“ Happy Valley Cultural Tourism ”), a company held as to 60% by OCT Ltd. and a connected person of the Company, and the Dongguan Partnership, pursuant to which Shenzhen Huayou has agreed to transfer 1% of the equity interest in the Dongguan Partnership, representing a capital contribution of RMB3,000,000 by Shenzhen Huayou to Happy Valley Cultural Tourism at the consideration of RMB3,000,185.40. Upon completion of the transfer, Shenzhen Huayou owned 43% of the equity interest in the Dongguan Partnership with a total subscribed capital contribution of RMB129,000,000, and Happy Valley Cultural Tourism owned 1% of the equity interest in the Dongguan Partnership with a total subscribed capital contribution of RMB3,000,000. For further details, please refer to the announcement of the Company dated 12 June 2020.

Save as disclosed above, as at 31 December 2017, 2018, and 2019 and 30 June 2020, there are no other matters applicable to the Remaining Group and required to be disclosed under the requirements of paragraph 32 of Appendix 16 to the Listing Rules.

6. FINANCIAL AND TRADING PROSPECT OF THE REMAINING GROUP

For the year ended 31 December 2019, the Remaining Group recorded a continuing operation revenue of approximately RMB597.36 million, representing a year-on-year decrease of approximately 29.94%. For the year ended 31 December 2019, profit attributable to equity holders of the Company was approximately RMB253.57 million, representing a year-on-year decrease of approximately 62.92%. For the year ended 31 December 2019, the Remaining Group’s gross profit margin from the continuing operations was approximately 28.26%, representing a decrease of 14.03 percentage points over the same period of 2018. As at 31 December 2019, the Remaining Group’s total assets amounted to approximately RMB19.508 billion, representing an increase of approximately 8.78% over that as at 31 December 2018; and the Remaining Group’s total equity amounted to approximately RMB10.087 billion, representing a decrease of 15.66% over that as at 31 December 2018.

Comprehensive development

It is expected that in the second half of 2020, the epidemic will continue to spread globally and the global economy will be in recession. Under the policy of “six stabilities and six guarantees”, the PRC’s economy will recover ahead of the rest of the world and become the main driver of the global economic growth. As a crucial part of social fixed asset investment and household consumption, real estate will continue to play an important role as a social and economic stabiliser. It is expected that under the main tone of “housing is not for speculation”, the precise and efficient control policy of “taking measures in response to local conditions” will continue to deepen. In the second half of 2020, the Remaining Group will accelerate the sell-through of existing projects, and strive to overcome the impact of the epidemic, accelerate the progress of projects, and refine cost control while ensuring the

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

quality of projects. Meanwhile, the Remaining Group will improve liquidity, and speed up capital turnover by revitalising existing assets. On the other hand, the Remaining Group will seize the development opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area and the Yangtze River Delta Area to obtain low-cost and high-quality land in a timely manner so as to enrich its project resource reserves.

Details of the projects to be held and operated by the Remaining Group after the Chengdu Disposal and the Disposal are as follows:

			Area of land	Area of land	Gross floor	Percentage of
			(ten thousand		area (ten	interest
			m	2, full	thousand m,	owned by the
Name of project	Location	Use of land	caliber)		full caliber)	Company	Status
OCT Bantang Hot	Hefei	Residential,		41.5	34.5	51%	Properties being marketed
Spring Town		commercial,
Project		hotel and
		waterpark
Hefei Airport	Hefei	Residential,		69.5	84.8	51%	The first phase has released project display and
International		commercial					sample rooms and is expected to open sales
Town Project		and hotel					before the year end of 2020.
Zhongshan Yuhong	Zhongshan	Residential		9.1	27.2	21%	Properties being marketed
Project
Shanghai Suhewan	Shanghai	Residential,		7.1	43.0	50.5%	Properties being marketed
Project		commercial
		and hotel
Chongqing OCT	Chongqing	Residential		18.0	44.0	49%	Properties being marketed
Land Project

Equity investment and fund management

Looking forward to the second half of 2020, facing fundraising headwinds, government-guided funds will intensify the layout of equity investment. However, the growth rate will slow down, the leading institutions will be favoured by more capital, and it will be difficult for many small and medium-sized institutions to maintain operation. The polarisation will be more obvious, and the industrial capital that has industrial resource advantages and can provide empowerment for the investees is expected to be further recognised by high-quality enterprises. At the same time, due to the impact of the epidemic, corporate financing needs have increased substantially, and industrial capital will usher in good opportunities for investment and layout.

Being the only offshore listed company of OCT Group, the Remaining Group’s equity investment and fund management businesses will be based in the Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area, having culture, tourism, technology, education, consumption, mega healthcare, new urbanisation and other industries as its key investment areas. The

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Remaining Group will fully leverage on its strengths in industry capital investment and merger and acquisition, strengthen the effectiveness of investment management, explore channels to create synergy, and facilitate the rapid development of the investees.

In the second half of 2020, Xiamen Partnership under the Remaining Group will accelerate the promotion of equity investment of urbanisation projects companies in the Guangdong Hong KongMacao Greater Bay Area, the Yangtze River Delta Economic Zone and other regions. The Dongguan Partnership will actively seek for high-quality companies with the potential in the segment and carefully select high quality projects. In addition, the Remaining Group will continue to explore fund cooperation with high-quality capital contributors in the industry (such as government-guided funds and industry-leading enterprises) to strive to expand our fund management scale.

Finance lease

In the second half of 2020, in terms of financial leasing business, the Remaining Group will grasp the changes in the macro environment, follow the regulatory trend of the China Banking and Insurance Regulatory Commission, actively expand customer base and strictly control risks.

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APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

UNAUDITED FINANCIAL INFORMATION OF THE TARGET GROUP

Set out below are the unaudited consolidated statements of financial position of City Turbo Limited (the “ Target Company ”) and its subsidiary Xi’an OCT Land Limited (collectively referred to as the “ Target Group ”) as at 31 December 2017, 2018, 2019 and 31 July 2020 and the related unaudited consolidated statements of profit or loss and other comprehensive income, the unaudited consolidated statements of changes in equity and the unaudited consolidated cash flow statements for each of the years ended 31 December 2017, 2018, 2019 and for the seven months ended 31 July 2019 and 2020 (the “ Relevant Periods ”), and explanatory notes (collectively referred to as the “ Financial Information ”). The Financial Information has been prepared on the basis set out in note 2 to the Financial Statements and prepared in accordance with paragraph 14.68(2)(a)(i)(A) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”).

The Financial Information is prepared by the Directors solely for the purpose of inclusion in this Circular in connection with the Disposal. The Company’s auditors, KPMG, were engaged to reviewed the Financial Information of the Target Group set out on pages II-2 to II-11 in accordance with Hong Kong Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” and with reference to Practice Note 750, “Review of Financial Information under the Hong Kong Listing Rules for a Very Substantial Disposal”, issued by the Hong Kong Institute of Certified Public Accountants (“ HKICPA ”).

A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable the auditors to obtain assurance that the auditors would become aware of all significant matters that might be identified in an audit. Accordingly, the auditors do not express an audit opinion. The auditors have issued an unmodified review report.

II-1 -

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

UNAUDITED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the years ended 31 December 2017, 2018, 2019 and seven months ended 31 July 2019 and 2020 (Expressed in Renminbi)

Revenue Cost of sales Gross profit Other income Other net gain/(loss) Distribution costs Administrative expenses (Loss)/profit before taxation Income tax (Loss)/profit and total comprehensive income for the year/period	Year ended 31 December 2017 2018 RMB’000 RMB’000 62,741 77,961 (58,419) (64,797) 4,322 13,164 2,634 1,683 117 8 (4,268) (6,064) (9,391) (8,782) (6,586) 9 (431) – (7,017) 9	2019 RMB’000 89,708 (67,308) 22,400 6,807 10,023 (1,868) (6,428) 30,934 (6,371) 24,563	Seven months ended 31 July 2019 2020 RMB’000 RMB’000 56,659 53,502 (39,278) (39,672) 17,381 13,830 4,480 4,486 – (2,472) (1,150) (1,416) (4,079) (2,620) 16,632 11,808 (2,798) (2,971) 13,834 8,837

II-2 -

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

At 31 December 2017, 2018, 2019 and 31 July 2020

(Expressed in Renminbi)

Non-current assets Investment property Other property, plant and equipment Intangible assets Current assets Trade and other receivables Amount due from the Group Cash at bank and on hand Current liabilities Trade and other payables Amount due to the Group Current taxation Net current assets/(liabilities) Total assets less current liabilities NET ASSETS CAPITAL AND RESERVES Share capital Reserves TOTAL EQUITY	2017 RMB’000 1,554,526 13,939 36 1,568,501 43,110 80,000 119,138 242,248 43,267 206 – 43,473 198,775 1,767,276 1,767,276 1,766,001 1,275 1,767,276	At 31 December 2018 2019 RMB’000 RMB’000 1,511,186 1,456,806 14,335 16,098 25 13 1,525,546 1,472,917 43,431 37,798 190,211 195,712 54,973 76,672 288,615 310,182 46,526 48,141 350 1,206,255 – 3,046 46,876 1,257,442 241,739 (947,260) 1,767,285 525,657 1,767,285 525,657 1,766,001 588,667 1,284 (63,010) 1,767,285 525,657	At 31 July 2020 RMB’000 1,425,084 14,738 6 1,439,828 35,535 198,921 26,309 260,765 47,144 1,118,733 222 1,166,099 (905,334) 534,494 534,494 588,667 (54,173) 534,494

II-3 -

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the years ended 31 December 2017, 2018, 2019 and the seven months ended 31 July 2019 and 2020 (Expressed in Renminbi)

Balance at 1 January 2017 Changes in equity for 2017: Loss for the year Total comprehensive income Balance at 31 December 2017 Balance at 1 January 2018 Changes in equity for 2018: Profit for the year Total comprehensive income Balance at 31 December 2018 Balance at 1 January 2019 Changes in equity for 2019: Profit for the year Total comprehensive income Reduction of share capital Balance at 31 December 2019	Share capital RMB’000 1,766,001 – – 1,766,001 1,766,001 – – 1,766,001 1,766,001 – – (1,177,334) 588,667	PRC statutory reserve RMB’000 829 – – 829 829 – – 829 829 – – (829) –	Retained profits RMB’000 7,463 (7,017) (7,017) 446 446 9 9 455 455 24,563 24,563 (88,028) (63,010)	Total RMB’000 1,774,293 (7,017) (7,017) 1,767,276 1,767,276 9 9 1,767,285 1,767,285 24,563 24,563 (1,266,191) 525,657

II-4 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Balance at 1 January 2020 Changes in equity the seven months ended 31 July 2020: Profit for the period Total comprehensive income Balance at 31 July 2020 Balance at 1 January 2019 Changes in equity the seven months ended 31 July 2019: Profit for the period Total comprehensive income Balance at 31 July 2019	Share capital RMB’000 588,667 – – 588,667 1,766,001 – – 1,766,001	PRC statutory reserve RMB’000 – – – – 829 – – 829	Retained profits RMB’000 (63,010) 8,837 8,837 (54,173) 455 13,834 13,834 14,289	Total RMB’000 525,657 8,837
				8,837

				534,494
				1,767,285 13,834
				13,834

				1,781,119

II-5 -

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

UNAUDITED CONSOLIDATED CASH FLOW STATEMENTS

For the years ended 31 December 2017, 2018, 2019 and seven months ended 31 July 2019 and 2020 (Expressed in Renminbi)

Operating activities Cash generated from operations Tax paid Net cash generated from operating activities Investing activities Payment for purchase of property, plant and equipment and intangible assets Loan to the Group Advance to the Group Net cash used in investing activities Financing activities Reduction of share capital Net cash used in financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of the year/period Cash and cash equivalents at the end of the year/period	Year ended 31 December 2017 2018 RMB’000 RMB’000 55,245 65,874 – – 55,245 65,874 (65,392) (20,039) – (110,000) (80,000) – (145,392) (130,039) – – – – (90,147) (64,165) 209,285 119,138 119,138 54,973	2019 RMB’000 82,612 (2,978) 79,634 (7,935) – – (7,935) (50,000) (50,000) 21,699 54,973 76,672	Seven months ended 31 July 2019 2020 RMB’000 RMB’000 51,375 46,308 (1,366) (5,795) 50,009 40,513 (3,849) (876) – – – – (3,849) (876) – (90,000) – (90,000) 46,160 (50,363) 54,973 76,672 101,133 26,309

II-6 -

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

NOTES TO THE UNAUDITED FINANCIAL INFORMATION OF THE TARGET GROUP

1 General information

City Turbo Limited (the “ Target Company ”), an indirect wholly-owned subsidiary of Overseas Chinese Town (Asia) Holdings Limited (the “ Company ”), was incorporated in Hong Kong on 12 June 2020 and is an investment holding company which has not carried on any business since the date of its incorporation save for the reorganisation as described in note 2. The Company is incorporated in Cayman Islands with its shares listed on The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”). The Company and its subsidiaries hereinafter are collectively referred to as “the Group”. The Target Company and its subsidiary (together, the “ Target Group ”) are principally engaged in property investment in the People’s Republic of China (the “ PRC ”) (the “ Relevant Businesses ”).

On 8 December 2020, the Company and a third party fund, HNW Investment Fund, entered into a cooperation agreement, pursuant to which: (i) HNW Investment Fund conditionally agreed to set up a segregated portfolio named Cayman Fund and the Company conditionally agreed to subscribe for not more than 49% interest of the Cayman Fund. Other investors apart from the Company will subscribe for not less than 51% interest of the Cayman Fund; and (ii) after the incorporation of the Cayman Fund, the Company and HNW Investment Fund will procure the Cayman Fund and Phoenix Ocean Developments Limited (the “ Phoenix Ocean ”), the sole shareholder of the Target Company, to enter into a separate sale and purchase agreement, pursuant to which Phoenix Ocean will sell and assign, and the Cayman Fund will purchase, the entire issued shares of the Target Company (including the entire assets, rights and liabilities of the Target Company), at the total disposal consideration in the sum of approximately HK$2,037 million (the “ Disposal ”).

The particulars of the subsidiary of the Target Company is set out below:

			Target
	Place and date of		Group’s
	incorporation/	Registered and	effective	Principal
Name of subsidiary	establishment	paid up capital	interest	activities
Xi’an OCT Land	PRC	US$90,000,000	100%	Property
Limited.* 西安華僑	18 December			investment
城置地有限公司	2015

The English translation of the above subsidiary’ name is for reference only. The official name of the company is in Chinese.

Upon completion of the Disposal, the Target Group will cease to be the subsidiaries of the Company, and the Group will be indirectly interested in the Target Group through its 49% interest in the Cayman Fund.

II-7 -

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

2 Reorganisation and basis of preparation of the financial information

Prior to the incorporation of the Target Company, the Relevant Businesses were conducted by Xi’an OCT Land Limited (the “ Project Company ”), a project company established in PRC, which is indirectly controlled by the Company. To facilitate the proposed acquisition of the Project Company, the Target Group underwent a reorganisation (the “ Reorganisation ”), upon which the Target Company incorporated in Hong Kong entered into an agreement on 29 July 2020 with City Legend International Limited, the immediate shareholder of the Company pursuant to which City Legend International agreed to sell 100% equity interest and debt in the Project Company to the Target Company.

Upon completion of the Reorganisation on 29 July 2020, the Target Company became the holding company of the Target Group. The Reorganisation only involved incorporating and inserting the Target Company, which is a newly formed entity with no substantive operations, as holding company of the Project Company. There were no changes in the economic substance of the ownership and business carried out by the Project Company before and after the Reorganisation. Accordingly, the Financial Information has been prepared and presented as a continuation of the consolidated financial statements of the Project Company with the assets and liabilities of the Project Company recognised and measured at their historical carrying amount prior to the Reorganisation.

The financial information of the Target Group comprising the unaudited consolidated statements of financial position of the Target Group as at 31 December 2017, 2018, 2019 and 31 July 2020 and the unaudited consolidated statements of profit or loss and other comprehensive income, the unaudited consolidated statements of changes in equity and the unaudited consolidated cash flow statements for the years ended 31 December 2017, 2018, 2019 and for the seven months ended 31 July 2019 and 2020, and explanatory notes (the “ Financial Information ”) has been prepared in accordance with paragraph 14.68(2)(a)(i) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”), and solely for the purpose of inclusion in the circular to be issued by the Company in connection with the Disposal.

The unaudited consolidated statements of profit or loss and other comprehensive income, unaudited consolidated statements of changes in equity and unaudited consolidated statements of cash flows of the Target Group for the Relevant Periods include the financial performance and cash flows of the companies now comprising the Target Group as if the current group structure had been in existence and remained unchanged throughout the Relevant Periods. The unaudited consolidated statements of financial position of the Target Group as at 31 December 2017, 2018 and 2019 and 31 July 2020 as set out in this report have been prepared to present the financial position of the companies now comprising the Target Group as at those dates as if the current group structure had been in existence as at the respective dates.

The Financial Information has been prepared in accordance with the same accounting policies as those adopted by the Group in preparation of the financial statements of the Group for those respective years. Details of any changes in accounting policies are set out in Note 3. The financial statements of the Group have been prepared in accordance with the Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants (“ HKICPA ”).

II-8 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

The Financial Information does not contain sufficient information to constitute a complete set of financial statements as defined in Hong Kong Accounting Standard 1 (Revised), Presentation of Financial Statements , or an interim financial report as defined in Hong Kong Accounting Standard 34, Interim Financial Reporting , issued by the HKICPA and should be read in connection with the relevant published annual reports of the Company for the Relevant Periods.

As at 31 July 2020, the Target Group had net current liabilities of RMB905 million. The Target Group is dependent upon the financial support from its ability to generate sufficient cash flows from future operations to cover its operating costs and to meet its financing commitments. These conditions may cast significant doubt about the Target Group’s ability to continue as a going concern.

The Directors of the Company have made an assessment and concluded that the Target Group is able to continue as a going concern for at least the next twelve months from 31 July 2020 and to meet its obligations, as and when they fall due, having regard to that the Company has confirmed to provide sufficient financial support to the Target Group so as to enable the Target Group to meet its liabilities and obligations as and when they fall due and to enable the Target Group to continue their business before the Disposal. Subsequent to the Disposal, the Company or any of its designated third party shall be responsible for providing the deficit amount for the working capital of the Project Company if the Project Company has difficulty in its operation.

Consequently, the Financial Information has been prepared on a going concern basis. The Financial Information does not include any adjustments that would result should the Target Company be unable to operate as a going concern.

The Financial Information of the Target Group for the years ended 31 December 2017, 2018, 2019 and for the seven months ended 31 July 2019 and 2020 (the “ Relevant Periods ”) is presented in Renminbi. All values are rounded to the nearest thousand except when otherwise indicated.

3 Changes in accounting policies

The Target Group adopted HKFRS 9 Financial Instruments (“ HKFRS 9 ”) and HKFRS 15 Revenue from Contracts with Customers (“ HKFRS 15 ”) for the first time for the year ended 31 December 2018 and HKFRS 16 Leases (“ HKFRS 16 ”) for the first time for year ended 31 December 2019.

3.1 Adoption of HKFRS 9

HKFRS 9 replaces HKAS 39, Financial instruments: recognition and measurement . It sets out the requirements for recognizing and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items.

The Target Group has applied HKFRS 9 retrospectively to items that existed at 1 January 2018 in accordance with the transition requirements. Therefore, comparative information continues to be reported under HKAS 39. There is no impact to retained earnings and reserves at 1 January 2018 upon the transition to HKFRS 9.

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FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

Classification and measurement

The financial assets held by the Target Group mainly represents debt instruments previously classified as loans and receivables and measured at amortised cost, meet the conditions for classification at amortised cost under HKFRS 9. Accordingly, there is no impact on the Target Group’s accounting for financial assets.

There is no impact on the Target Group’s accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss and the Target Group does not have any such liabilities.

Credit losses

The Target Group has two types of financial assets that are subject to HKFRS 9’s new expected credit loss model:

trade receivables
other financial assets at amortised cost

The Target Group was required to revise its impairment methodology under HKFRS 9 for each of these classes of assets.

Trade receivables and lease receivables

The new impairment model requires the recognition of impairment provisions based on expected credit losses (“ ECL ”) rather than only incurred credit losses as is the case under HKAS 39. The Target Group applies the HKFRS 9 simplified approach to measuring ECL which uses a lifetime expected loss allowance for all trade receivables and lease receivables.

The Target Group established ECL model based on historical settlement records, experience and available forward-looking information. The Target Group has concluded that the expected credit loss as at 1 January 2018, the identified impairment loss was insignificant.

Other financial assets at amortised cost

For other financial assets at amortised cost, the expected credit loss is based on the 12month expected credit loss. It is the portion of lifetime expected credit loss that results from default events on a financial instrument that are possible within 12 months after the reporting date. However, when there has been a significant increase in credit risk since origination, the allowance will be based on the lifetime expected credit loss. Management has closely monitored the credit qualities and the collectability of the other financial assets at amortised cost and considers that the expected credit loss is immaterial.

While cash and cash equivalents are also subject to the impairment requirements of HKFRS 9, the identified impairment loss was immaterial.

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FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

3.2 Adoption of HKFRS 15

HKFRS 15 establishes a comprehensive framework for recognizing revenue and some costs from contracts with customers. It establishes principles for reporting information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers.

As the operating business of the Target Group is leasing out the investment property. The adoption of HKFRS15 has had a immaterial effect on how the Group’s results and financial position for the current or prior periods have been prepared or presented in this financial report.

3.2 Adoption of HKFRS 16

HKFRS 16 replaces HKAS 17, Leases, and the related interpretations, HK(IFRIC) 4, Determining whether an arrangement contains a lease, HK(SIC) 15, Operating leases – incentives, and HK(SIC) 27, Evaluating the substance of transactions involving the legal form of a lease. It introduces a single accounting model for lessees, which requires a lessee to recognise a right-of-use asset and a lease liability for all leases, except for leases that have a lease term of 12 months or less (“ short-term leases ”) and leases of low-value assets. The lessor accounting requirements are brought forward from HKAS 17 substantially unchanged.

As the Target Group has not entered into any lease contract that require the Target Group to recognise a right-of-use asset and a lease liability, and the lessor accounting requirements are brought forward from HKAS 17 substantially unchanged, the adoption of HKFRS16 has had a immaterial effect on how the Group’s results and financial position for the current or prior periods have been prepared or presented in this financial report.

4 Impacts of COVID-19 pandemic

The COVID-19 pandemic since early 2020 has brought about additional uncertainties in the Target Group’s operating environment and has impacted the Target Group’s operations and financial position.

In response to the outbreak of COVID-19, the Target Group has implemented various measures which aim to strike a balance between the resumption of work and the prevention of COVID-19. The Target Group strives to reduce the impact of the epidemic on performance, while sustaining the development of its various businesses and seizing the opportunities brought by the market’s restorative growth. The Group will continue to closely monitor the development of the epidemic, assess its impact on the Target Group’s operations and put in place contingency measures.

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APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION

UNAUDITED PRO FORMA FINANCIAL INFORMATION

(A) THE UNAUDITED PRO FORMA FINANCIAL INFORMATION

1. Introduction

The following is the unaudited pro forma financial information of Overseas Chinese Town (Asia) Holdings Limited (the “ Company ”) and its subsidiaries (collectively referred to as the “ Group ”), comprising the unaudited pro forma consolidated statement of financial position as at 30 June 2020 and the unaudited pro forma consolidated statement of profit or loss, unaudited pro forma consolidated statement of profit or loss and other comprehensive income, and the unaudited pro forma consolidated cash flow statement for the year ended 31 December 2019 and related notes (collectively, the “ unaudited pro forma financial information ”).

The unaudited pro forma financial information is prepared by the directors of the Company in accordance with Paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (“ HKICPA ”), for the purpose of illustrating the effect of the very substantial disposal in relation to disposal of the entire equity interest of City Turbo Limited (the “ Target Company ”) (the “ Transaction ”) as described in the section headed “Letter from the Board” in this circular.

The unaudited pro forma financial information presented below is prepared to illustrate (i) the financial position of the Group after completion of the Disposal (the “ Proforma Adjusted Group ”) as at 30 June 2020 as if the Transaction had been completed on 30 June 2020; and (ii) the statement of profit or loss of the Proforma Adjusted Group, the statement of profit or loss and other comprehensive income of the Proforma Adjusted Group, the cash flow statement of the Proforma Adjusted Group for the year ended 31 December 2019 as if the Transaction had been completed on 1 January 2019.

The unaudited pro forma financial information of the Proforma Adjusted Group is based upon the consolidated financial information of the Group for year ended 31 December 2019, which has been derived from the Company’s published annual report for the year ended and the consolidated financial information of the Group for the six months ended 30 June 2020, which has been derived from the Company’s published interim report for the period ended, after taking pro forma adjustments as summarised in the accompanying notes that are clearly shown explained, factually supportable and directly attributable to the Transaction.

The unaudited pro forma financial information has been prepared for illustrative purposes only and is based on certain assumptions, estimates and current available information. Accordingly, because of its hypothetical nature, it may not give a true picture of the financial results, cash flows and financial position of the Proforma Adjusted Group had the Transaction been completed as at the specified dates or any other dates.

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APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The unaudited pro forma financial information should be read in conjunction with the historical financial information of the Group as set out in the published annual report of the Company or the published interim report of the Company for the six months ended 30 June 2020 and other financial information included elsewhere in this circular.

2. Unaudited Pro Forma Consolidated Statement of Financial Position at 30 June 2020 (Expressed in Renminbi)

Non-current assets Investment property Other property, plant and equipment Interests in leasehold land held for own use Intangible assets Goodwill Interests in associates Interests in joint ventures Other financial assets Finance lease receivable Trade and other receivables Deferred tax assets Current assets Inventories and other contract costs Finance lease receivable Trade and other receivables Cash at bank and on hand Amount due from the Proforma Adjusted Group	The Group as at 30 June 2020 Pro forma adjustments RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Note(a) Note((c)(i)) Note((c)(ii)) Note((c)(iii)) Note((d)(i)) Note((d)(ii)) 5,245,832 (1,425,084) 1,962,893 (14,738) 1,570,855 8,779,580 48,249 (6) 570 5,473,588 613,469 375,371 1,640,141 327,924 1,623 209,948 17,095,092 8,749,170 110,375 548,928 (35,535) 2,769,270 (26,309) (198,921) 1,118,733 (375,371) 716,226 – (198,921) 198,921 12,177,743	The Proforma Adjusted Group as at 30 June 2020 RMB’000 3,820,748 1,948,155 1,570,855
		7,339,758 48,243 570 5,473,588 988,840 1,640,141 327,924 1,623 209,948
		16,030,635
		8,749,170 110,375 513,393 4,003,628 –
		13,376,566

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APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION

Current liabilities Trade and other payables Contract liabilities Lease liabilities Bank and other loans Related party loans Amount due to the Proforma Adjusted Group Current taxation Net current assets Total assets less current liabilities Non-current liabilities Bank and other loans Related party loans Deferred tax liabilities Lease liabilities NET ASSETS CAPITAL AND RESERVES Share capital Perpetual capital securities Reserves Total equity attributable to equity holders of the Company Non-controlling interests TOTAL EQUITY	The Group as at 30 June 2020 Pro forma adjustments RMB’000 RMB’000 RMB’000 RMB’000 Note(a) Note((c)(i)) Note((c)(iii)) Note((d)(ii)) 2,794,882 (47,144) 477,924 27,667 1,598,015 1,486,806 – (1,118,733) 1,118,733 492,948 (222) 12,857 6,878,242 5,299,501 22,394,593 7,102,361 1,429,510 187,623 45,376 8,764,870 13,629,723 67,337 5,296,995 3,669,061 168,875 9,033,393 4,596,330 13,629,723	The Proforma Adjusted Group as at 30 June 2020 RMB’000 2,747,738 477,924 27,667 1,598,015 1,486,806 – 505,583
		6,843,733

		6,532,833

		22,563,468
		7,102,361 1,429,510 187,623 45,376
		8,764,870

		13,798,598
		67,337 5,296,995 3,837,936
		9,202,268 4,596,330
		13,798,598

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APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION

3. Unaudited Pro Forma Consolidated Statement of Profit or Loss for the year ended 31 December 2019

(Expressed in Renminbi)

Revenue Cost of sales Gross profit Other income Other net gain Distribution costs Administrative expenses Other operating expenses Profit/(loss) from operations Finance costs Share of profits less losses of associates Share of loss of joint ventures Profit/(loss) before taxation Income tax Profit for the year from continuing operations Attributable to: Equity holders of the Company Non-controlling interests Profit/(loss) for the period	The Group for the year ended 31 December 2019 Pro forma adjustments RMB’000 RMB’000 RMB’000 RMB’000 Note(a) Note(e) Note(f) Note(g) 2,071,903 (89,708) (1,306,174) 67,308 765,729 93,836 (6,807) 225,993 (10,023) 67,234 (103,200) 1,868 (403,405) 6,428 (4,014) 574,939 (268,732) 306,063 (8,150) (14,487) 604,120 (354,514) 6,371 249,606 266,961 (24,563) 67,324 (14,487) (17,355) 249,606 (24,563) 67,324 (14,487)	The Proforma Adjusted Group for the year ended 31 December 2019 RMB’000 1,982,195 (1,238,866
		743,329 87,029 283,294 (101,332 (396,977 (4,014
		611,329 (268,732 306,063 (22,637
		626,023 (348,143
		277,880
		295,235 (17,355
		277,880

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APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION

4. Unaudited Pro Forma Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2019 (Expressed in Renminbi)

Profit/(loss) for the year Other comprehensive income for the year (after tax and reclassification adjustments) Item that will not be reclassified to profit or loss: Equity investments at FVOCI - net movement in fair value reserves (non- recycling) Items that may be reclassified subsequently to profit or loss: Exchange differences Share of other comprehensive income of associates Cumulative exchange differences reclassified to profit or loss upon disposal of an associate Other comprehensive income for the year Total comprehensive income for the year Attributable to: Equity holders of the Company Non-controlling interests Total comprehensive income for the year	The Group for the year ended 31 December 2019 Pro forma adjustments RMB’000 RMB’000 RMB’000 RMB’000 Note(a) Note(e) Note(f) Note(g) 249,606 (24,563) 67,324 (14,487) 166,598 (164,501) 11,246 (1,440) 11,903 261,509 278,864 (24,563) 67,234 (14,487) (17,355) 261,509	The Proforma Adjusted Group for the year ended 31 December 2019 RMB’000 277,880
		166,598 (164,501 11,246 (1,440
		11,903

		289,783
		307,138 (17,355
		289,783

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APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION

5. Unaudited Pro Forma Consolidated Cash Flow Statement for the year end 31 December 2019

(Expressed in Renminbi)

Operating activities Cash used in operations Tax paid Interest element of lease rentals paid Other interest paid Net cash used in operating activities Investing activities Payment for purchase of property, plant and equipment and intangible assets Proceeds from disposals of property, plant and equipment and intangible assets Net cash flow from disposals of subsidiaries Payment for acquisition of interests in associates Payment for acquisition of interest in joint ventures Proceeds from disposal of associates Repayment from associates Decrease in deposits with banks with maturity of more than three months Dividends received from associates Dividend received from unlisted equity securities Interest received New loans to an associate Net cash generated in investing activities	The Group for the year ended 31 December 2019 Pro forma adjustments RMB’000 RMB’000 RMB’000 RMB’000 Note(a) Note(e) Note((d)(i)) Note(h) (114,308) (82,612) (352,484) 2,978 (5,105) (396,220) (868,117) (477,376) 7,935 2,971 150,289 1,589,425 (400,380) (23,379) (375,371) 160,063 370,679 596,526 76,496 1,096 96,204 (6,930) 546,259	The Proforma Adjusted Group for the year ended 31 December 2019 RMB’000 (196,920 (349,506 (5,105 (396,220
		(947,751
		(469,441 2,971 1,739,714 (400,380 (398,750 160,063 370,679 596,526 76,496 1,096 96,204 (6,930
		1,768,248

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APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION

Financing activities Capital element of lease rentals paid Proceeds from loans Proceeds from capital contribution of non-controlling interest Repayment of loans Decrease in pledged deposits Increase of restricted cash for REIT programme Distribution to the holders of perpetual capital securities Dividend paid to shareholders of the Company Reduction of share capital Net cash generated in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Effect of foreign exchange rate changes Cash and cash equivalents at the end of the year	The Group for the year ended 31 December 2019 Pro forma adjustments RMB’000 RMB’000 RMB’000 RMB’000 Note(a) Note(e) Note((d)(i)) Note(h) (24,140) 6,117,745 196,000 (5,570,571) 13,523 (4,826) (237,085) (144,829) – 50,000 345,817 23,959 1,744,196 29,919 1,798,074	The Proforma Adjusted Group for the year ended 31 December 2019 RMB’000 (24,140 6,117,745 196,000 (5,570,571 13,523 (4,826 (237,085 (144,829 50,000
		395,817

		1,591,685 1,744,196 29,919
		3,365,800

Notes to the Unaudited Pro Forma Financial Information:

(a) The Group’s financial information is based upon the consolidated financial information of the Group for year ended 31 December 2019, which has been derived from the Company’s published annual report for the year then ended and the consolidated financial information of the Group for the six months ended 30 June 2020, which has been derived from the Company’s published interim report for the period then ended.
(b) Pursuant to the Sale and Purchase Agreement entered into between the Group and Cayman fund (the “ Purchaser ”) on 8 December 2020, the consideration for the entire issued shares disposal of the Target Group and the assignment of the corresponding debt in the Target Company is HK$2,037,033,000 (approximately to RMB1,835,877,000).
(c) The adjustments represent:
(i) the exclusion of assets and liabilities of the Target Group as if the Transaction had taken place on 30 June 2020 for the unaudited pro forma consolidated statement of financial position. For the purpose of the unaudited pro forma financial information, the balances are extracted from the unaudited financial information of the Target Group as at 31 July 2020 as set out in Appendix II to this circular.
(ii) cash paid by the Proforma Adjusted Group for the settlement of the amounts it due to Xi’an OCT Land according to the Sale and Purchase Agreement, the disposal of the entire issued shares of the Target Company and the assignment of the corresponding debt in the Target Company (“ the Disposal ”) is conditional upon the satisfaction of the condition that Xi’an OCT Land Co., Ltd. (“ Xi’an OCT Land ”) has cleared and collected all other receivables amounted to RMB198,921,000 from the Proforma Adjusted Group.
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APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION

(iii) cash received by the Proforma Adjusted Group for the settlement of the amounts it due from the Target Group. Pursuant to the Sale and Purchase Agreement, the amount of debt of approximately USD160,154,000 (equivalent to RMB1,118,733,000) owed by Xi’an OCT Land to the Group will be settled within 8 days from the effective date of the Sale and Purchase Agreement.
(d) The adjustments represent:
(i) the subscription of interest in the Cayman Fund pursuant to the Cooperation Agreement entered into between the Company and HNW Investment Fund. Under the Cooperation Agreement, HNW Investment Fund has conditionally agreed to set up the Cayman Fund and the Company has conditionally agreed to subscribe for not more than 49% interest (assuming the total size of the Cayman Fund is HK$850,000,000) of the Cayman Fund at a Subscription Amount of approximately HK$417,000,000 (equivalent to RMB375,371,000). For the purpose of the unaudited pro forma financial information, it is assumed that the Company will subscribe for 49% interest in the Cayman Fund.
(ii) the net effect of Disposal pursuant to the Sale and Purchase Agreement (as stated in Note(b)). The estimated tax effect of the Disposal amounted to RMB12,857,000, representing the PRC enterprise income tax which is calculated based on a tax rate of 10% and taxable disposal gain arising from the transfer of equity interest in the Target Company.

The estimated net gain on the Disposal as if it had taken place on 30 June 2020 is as follows:

Total consideration for the Disposal (Note(b))
Less: the amount of debt owed by Xi’an OCT Land to the Group
(Note(c)(iii))
Estimated professional costs directly attributable to the Disposal
Net consideration for the Disposal
Less: net assets of the Target Group as at 31 July 2020 attributable
to equity shareholder of the Company as set out in
Appendix II
Estimated gain on the Disposal
Estimated tax effects in relation with the gain on the Disposal
calculated at the applicable tax rates
Net effect on the profit for the year and the equity attributable to
equity shareholders of the Company

RMB’000
1,835,877
(1,118,733)
(918)
716,226
(534,494)
181,732
(12,857)
168,875

(e) The adjustment represents the exclusion of results and cash flows of the Target Group for the year ended 31 December 2019 as if the Disposal had been completed on 1 January 2019 for the unaudited pro forma consolidated statement of profit or loss, consolidated statement of profit or loss and other comprehensive income and consolidated cash flow statement. The amounts are extracted from the unaudited financial information of the Target Group for the year ended 31 December 2019 as set out in Appendix II to this circular.
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APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION

(f) The adjustments represent the estimated net gain on the Disposal as if it had taken place on 1 January 2019, which is as follows:

Total consideration for the Disposal (Note(b)) Less: the amount of debt owed by Xi’an OCT Land to the Group as set out in Appendix II net assets of the Target Group as at 1 January 2019 attributable to equity holders of the company as set out in Appendix II Estimated professional costs directly attributable to the Disposal Estimated gain on the Disposal*	RMB’000 1,835,877 (350) (1,767,285) (918) 67,324

The net asset value of the Target Group has decreased significantly at 31 July 2020 as compared to 1 January 2019 due to the reduction of share capital from the former shareholder, City Legend international Limited. Assuming no change in the agreed consideration, the higher net asset value of the Target Group as at 1 January 2019 would have led to a less estimated gain on Disposal if it had taken place on 1 January 2019.

(g) The adjustments represent the share of the results of the Cayman Fund for the year ended 31 December 2019, assuming the Disposal had taken place on 1 January 2019:

Profit for the year ended 31 December 2019 of the Target Group as set out
in Appendix II
Bank loan interest attributable to the Target Company*
The Cayman Fund's management fee, assuming the paid up capital of the
Cayman Fund is HK$850 million
The incremental depreciation as a result of fair value adjustments in relation
to the investment property disposal upon the Disposal
Estimated loss for the year ended 31 December 2019 of the Cayman Fund
Net loss of the Cayman Fund attributable to the equity holders of the
Company

RMB’000
24,563
(37,853)
(9,959)
(6,316)
(29,565)
(14,487)

Bank loan interest was calculated base on the assumption that the Target Company would borrow an amount of HK$1,200 million at a rate of 3.5% per annum, which is the maximum amount of loan and interest rate to be borrowed by the Target Company pursuant to the Cooperation Agreement.
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APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION

(h) The adjustments represent the net cash flow as if the Disposal had taken place on 1 January 2019:

Total consideration for the Disposal (Note(b)) Less: the amount of debt owed by Xi’an OCT Land to the Group as set out in Appendix II Amount due to the Target Group as set out in Appendix II Less: Cash and cash equivalents held by the Target Group as at 1 January 2019 Estimated professional costs directly attributable to the Disposal Net proceeds from the Disposal, net of cash disposed of	RMB’000 1,835,877 (350) (190,211) (54,973) (918) 1,589,425

(i) The adjustments in respect of the unaudited pro forma consolidated statement of profit or loss, unaudited pro forma consolidated statement of profit or loss and other comprehensive income and unaudited pro forma consolidated cash flow statement above are not expected to have a continuing effect on the Proforma Adjusted Group other than share of loss of joint venture.
(j) The estimated gain on the Disposal, net cash inflows from the Disposal and the net amounts due to the Remaining Group of the Target Group as illustrated above are subject to change. The actual carrying amount of the Target Group, the respective net amounts due to the Proforma Adjusted Group of the Target Group, cash and cash equivalents held by the Target Group and thus the gain on Disposal and net proceeds from the Disposal at the date of Completion will likely be different from those stated in the pro forma financial information.
(k) Material non-adjusting events after 30 June 2020 include the following:
(i) The Group had entered into an equity transfer agreement and a debt transfer agreement on 4 September 2020 respectively, among Bantix International Limited (“Bantix International”), 華僑城（成都）投資有限公司 (OCT (Chengdu) Investment Co., Ltd.) (“OCT Chengdu Investment”) and Chengdu OCT in respect of the transfer of the 50.99% equity interest in Chengdu OCT to OCT Chengdu Investment at a consideration of RMB1,092,103,600; and the assignment of the debt in the amount of RMB160,364,000 from Bantix International to OCT Chengdu Investment.

Upon Completion, the Group will not hold any interest in Chengdu OCT and Chengdu OCT will cease to be the subsidiaries of the Company, and the financial results of the Chengdu OCT will no longer be consolidated into the accounts of the Group. For further details, please refer to the announcements of the Company dated 4 September 2020 and the circular of the Company dated 30 September 2020. For the purpose of the unaudited pro forma financial information of the Proforma Adjusted Group, the financial impact of the above transaction was not adjusted.

(ii) Between 28 August 2020 and 2 December 2020, City Legend International Limited, a whollyowned subsidiary of the Company, disposed on market an aggregate of 31,122,000 shares of Tongcheng-Elong in a series of transactions, at the average selling price of HK$14.82 per share. The aggregate gross sale proceeds from a series of transactions were approximately HK$460.86 million (equivalent to RMB395.63 million) (excluding transaction costs).

For the purpose of the unaudited pro forma financial information of the Proforma Adjusted Group, the financial impact of the above transactions were not adjusted.

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APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION

(l) No adjustment has been made to reflect any trading results or other transaction of the Group including the Chengdu Disposal and disposal of shares of Tongcheng-Elong entered into subsequent to 30 June 2020 for the unaudited pro forma consolidated statement of financial position and 31 December 2019 for the unaudited pro forma consolidated statement of profit and loss, the unaudited pro forma consolidated statement of profit or loss and other comprehensive income and unaudited pro forma consolidated cash flow statement.
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APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION

(B) INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE COMPILATION OF PRO FORMA FINANCIAL INFORMATION

The following is the text of a report received from the reporting accountants, KPMG, Certified Public Accountants, Hong Kong, in respect of the Group’s pro forma financial information for the purpose in this circular.

==> picture [80 x 32] intentionally omitted <==

Independent Reporting Accountants’ Assurance Report on the Compilation of Pro Forma Financial Information

To the Directors of Overseas Chinese Town (Asia) Holdings Limited

We have completed our assurance engagement to report on the compilation of pro forma financial information of Overseas Chinese Town (Asia) Holdings Limited (the “ Company ”) and its subsidiaries (collectively the “ Group ”) by the directors of the Company (the “ Directors ”) for illustrative purposes only. The pro forma financial information consists of the unaudited pro forma consolidated statement of financial position as at 30 June 2020 and the unaudited pro forma consolidated statement of profit or loss, unaudited pro forma consolidated statement of profit or loss and other comprehensive income and pro forma consolidated cash flow statement for the year ended 31 December 2019 and related notes as set out in Part A of Appendix III to the circular dated 15 December (the “ Circular ”) issued by the Company. The applicable criteria on the basis of which the Directors have compiled the pro forma financial information are described in Part A of Appendix III to the Circular.

The pro forma financial information has been compiled by the Directors to illustrate the impact of the disposal of the entire equity interest of City Turbo Limited (the “ Target Company ”) (the “ Disposal ”) on the Group’s financial position as at 30 June 2020 and the Group’s financial performance and cash flows for the year ended 31 December 2019 as if the Disposal had taken place at 30 June 2020 and 1 January 2019, respectively. As part of this process, information about the Group’s financial position as at 30 June 2020 has been extracted by the Directors from interim financial report the Group for the six months ended 30 June 2020, on which no review report has been published. Information about the Group’s financial performance and cash flows for the year ended 31 December 2019 has been extracted by the Directors from the consolidated financial statements of the Group for the year ended 31 December 2019, on which an audit report has been published.

Directors’ Responsibilities for the Pro Forma Financial Information

The Directors are responsible for compiling the pro forma financial information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” (“ AG 7 ”) issued by the Hong Kong Institute of Certified Public Accountants (“ HKICPA ”).

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APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION

Our Independence and Quality Control

We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

The firm applies Hong Kong Standard on Quality Control 1 “Quality Control for Firms That Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements” issued by the HKICPA and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountants’ Responsibilities

Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the pro forma financial information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the pro forma financial information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements (“ HKSAE ”) 3420 “Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus” issued by the HKICPA. This standard requires that the reporting accountants plan and perform procedures to obtain reasonable assurance about whether the Directors have compiled the pro forma financial information in accordance with paragraph 4.29 of the Listing Rules, and with reference to AG 7 issued by the HKICPA.

For purpose of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the pro forma financial information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the pro forma financial information.

The purpose of pro forma financial information included in an investment circular is solely to illustrate the impact of a significant event or transaction on the unadjusted financial information of the Group as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the events or transactions at 30 June 2020 and 1 January 2019 would have been as presented.

A reasonable assurance engagement to report on whether the pro forma financial information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the Directors in the compilation of the pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether:

the related pro forma adjustments give appropriate effect to those criteria; and
III-13 -

APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION

the pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information.

The procedures selected depend on the reporting accountants’ judgement, having regard to the reporting accountants’ understanding of the nature of the Group, the event or transaction in respect of which the pro forma financial information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the pro forma financial information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion:

a) the pro forma financial information has been properly compiled on the basis stated;
b) such basis is consistent with the accounting policies of the Group, and
c) the adjustments are appropriate for the purposes of the pro forma financial information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

KPMG

Certified Public Accountants Hong Kong 15 December 2020

III-14 -

APPENDIX IV

PROPERTY VALUATION REPORT

The following is the text of a letter and valuation report prepared for the purpose of incorporation in this circular received from Savills Valuation and Professional Services Limited, an independent property valuer, in connection with their opinion of value of the Property as at 30 September 2020.

==> picture [72 x 72] intentionally omitted <==

Savills Valuation and The Directors Professional Services Limited Overseas Chinese Town (Asia) Holdings Limited 1208, Cityplaza One 59/F, Bank of China Tower 1111 King’s Road, Taikoo Shing 1 Garden Road Hong Kong Central Hong Kong T:(852) 2801 6100 F:(852) 2530 0756 15 December 2020 EA Licence: C-023750 savills.com

Dear Sirs,

RE: PORTION OF BLOCKS A, B, C AND D OF BUILDING NO. 2 AND PORTION OF BLOCK E OF BUILDING NO. 3 TOGETHER WITH 270 CAR PARKING SPACES OF CHANG’AN METROPOLIS CENTRE, NO. 88 NANGUANZHENG STREET, BEILIN DISTRICT, XI’AN, SHAANXI PROVINCE, THE PEOPLE’S REPUBLIC OF CHINA (THE “PROPERTY”)

INSTRUCTION

In accordance with the instructions from Overseas Chinese Town (Asia) Holdings Limited (the “ Company ”) for us to value the Property situated in the People’s Republic of China (the “ PRC ”), and held by Xi’an OCT Land Co., Ltd. (“ Xi’an OCT Land ”), we confirm that we have carried out an inspection, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of value of the Property as at 30 September 2020 (“ Valuation Date ”) for inclusion in the Company’s circular.

BASIS OF VALUATION

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

IV-1 -

PROPERTY VALUATION REPORT

APPENDIX IV

Moreover, market value is understood as the value of an asset or liability estimated without regard to costs of sale or purchase (or transaction) and without offset for any associated taxes or potential taxes.

Our valuation has been undertaken in accordance with the HKIS Valuation Standards 2017 of The Hong Kong Institute of Surveyors (“ HKIS ”), which incorporates the International Valuation Standards (“ IVS ”), and (where applicable) the relevant HKIS or jurisdictional supplement. We have also complied with the requirements set out in Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

IDENTIFICATION AND STATUS OF THE VALUER

The subject valuation exercise is handled by Mr Anthony C.K. Lau, who is a Director of Savills Valuation and Professional Services Limited (“ SVPSL ”) and a corporate member of HKIS with over 27 years’ experience in valuation of properties in the PRC and has sufficient knowledge of the relevant market, the skills and understanding to handle the subject valuation exercise competently.

Prior to your instructions for us to provide this valuation services in respect of the property, SVPSL had been involved in valuation of the Property in the last 12 months.

We are independent of the Company. We are not aware of any instances which would give rise to potential conflict of interest from SVPSL or Mr Lau in the subject exercise. We confirm SVPSL and Mr Lau are in the position to provide objective and unbiased valuation for the Property.

VALUATION METHODOLOGY

The Property is held by the Company for investment in the PRC. In valuing the retail and office portion of the Property, we have adopted the income capitalization approach by taking into account the rental income derived from the existing tenancies with due allowance for the reversionary income potential of such portion of the Property.

In valuing car parking spaces of the Property, as majority of the car parking spaces are occupied by owner and are not subject to tenancy, we have adopted the direct comparison approach by making reference to sales of comparables properties as available in the market.

TITLE INVESTIGATIONS

We have been provided with copies of title documents relating to the Property. However, we have not searched the original documents to verify ownership or to ascertain the existence of any amendments which may not appear on the copies provided to us. In the course of our valuation, we have relied to a very considerable extent on the information given by the Company and the legal opinion issued by the Company’s PRC legal adviser, AllBright Law Offices, regarding the titles to the Property in the PRC.

IV-2 -

PROPERTY VALUATION REPORT

APPENDIX IV

SOURCES OF INFORMATION

In the course of our valuation, we have relied to a considerable extent on information from the Company and also accepted advice given to us on such matters as planning approvals or statutory notices, easements, tenure, particulars of occupancy, tenancy details, site and floor areas and all other relevant matters. Dimensions, measurements and areas included in the valuation report are based on the information contained in the documents provided to us and are therefore only approximations. No on-site measurements have been taken. We have no reason to doubt the truth and accuracy of the information provided to us by the Company, which is material to our valuation. We are also advised by the Company that no material facts have been omitted from the information supplied. We consider that we have been provided with sufficient information to reach an informed view.

VALUATION ASSUMPTIONS

In valuing the Property in the PRC, unless otherwise stated, we have assumed that transferable land use rights of the Property for their specific terms at nominal annual land use fees have been granted and that any premium payable has already been fully paid. Unless otherwise stated, we have also assumed that the owner of the Property has a good legal title to the Property and has free and uninterrupted rights to occupy, use, transfer or lease the Property for the whole of the respective unexpired terms as granted.

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

SITE INSPECTION

We have inspected the exterior and where possible, the interior of the Property. The site inspection was carried out on 12 August 2020 by our Ms. June Yang, who is China registered real estate appraiser. During the course of our inspection, we did not note any serious defects. However, no structural survey has been made and we are therefore unable to report whether the Property is free from rot, infestation or any other defects. No tests were carried out on any of the services.

CURRENCY

Unless otherwise stated, all money amounts stated are in Renminbi (“ RMB ”).

We enclose herewith our valuation report.

Yours faithfully, For and on behalf of Savills Valuation and Professional Services Limited Anthony C.K. Lau MHKIS MRICS RPS(GP) Director

Note: Mr. Anthony C.K. Lau is a professional surveyor who has over 27 years’ experience in the valuation of properties in the PRC.

IV-3 -

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION REPORT

Property

Portion of Blocks A, B, C and D of Building No. 2 and Portion of Block E of Building No. 3 together with 270 Car Parking Spaces of Chang’an Metropolis Centre, No. 88 Nanguanzheng Street, Beilin District, Xi’an, Shaanxi Province, PRC

Description and tenure

Chang’an Metropolis Centre (the “ Development ”) is located in Beilin District of Xi’an. Developments in the vicinity are dominated by high-rise commercial and residential developments. It is located at about 5-minutes’ walk to the city centre and at about 50-minutes’ drive to Xi’an Xianyang International Airport.

Particulars of occupancy

As at the Valuation Date, portion of the Property with a total gross floor area of approximately 70,531.54 sq.m. was subject to various tenancies with the latest one due to expire in November 2028 at a total monthly rental of approximately RMB7,607,380 (inclusive of VAT but exclusive of management fees and other outgoings), whilst the remaining portion of the Property was vacant.

Market value in existing state as at 30 September 2020

RMB1,605,000,000 (Renminbi One Billion Six Hundred and Five Million)

The Development is a large-scale comprehensive office, residential, hotel and commercial complex, which is erected on two parcels of land with a total site area of approximately 19,875.70 sq m.

The Property comprises portion of Blocks A (Unit 1), B (Unit 2), C (Unit 4) and D (Unit 3) of Building No. 2, portion of Block E (Unit 5) of Building No. 3 and 270 car parking spaces of the Development.

According to the information provided by the Company, the Property comprises portion of the Development with a total gross floor area of approximately 104,665.94 sq m. The usage and breakdown of the gross floor area of the Property are as follows:

Property are as follows:
Use Retail Office Residential Car park (270 bays) Total:	Approximate Gross Floor Area (sq.m.) 508.47 40,027.61 47,827.56 16,302.30
	104,665.94

According to the supplied Building Ownership Certificates, Levels 2 to 22 of Block E were planned for residential use. Our inspection revealed that Level 2 of Block E was occupied for retail use whilst Levels 3 to 22 were occupied for office use.

As advised by the Company, the Property was completed in 2005.

The land use rights of the Property have been granted for two concurrent terms due to expire on 20 November 2037 and 20 November 2067 for commercial and residential uses respectively.

IV-4 -

PROPERTY VALUATION REPORT

APPENDIX IV

Notes:

(1) Pursuant to the State-owned Land Use Rights Certificate – Xi Bei Guo Yong (2004 Chu) Di No. 769 dated 22 October 2004, the land use rights of a parcel of land with a site area of approximately 5,658.40 sq.m. have been granted to Shaanxi Chang’an Construction & Investment Development Co., Ltd. (陝西長安建設投資開發有限責任公司) (“ Shaanxi Chang’an ”) for a term due to expire on 20 November 2067 for residential use.
(2) Pursuant to the State-owned Land Use Rights Certificate – Xi Bei Guo Yong (2008 Chu) Di No. 105 dated 20 February 2008, the land use rights of a parcel of land with a site area of approximately 14,217.30 sq.m. have been granted to Shaanxi Chang’an for a term due to expire on 20 November 2037 for commercial use.
(3) Pursuant to Building Ownership Certificate – Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1F201-1 Hao, the building ownership of Unit 1F201 of Unit 1 of Building No. 1 with a gross floor area of 16,302.30 sq.m. is vested in Xi’an OCT Land, which is a wholly-owned subsidiary of the Company, for other use.
(4) Pursuant to various Building Ownership Certificates, the building ownership of the Property with a total gross floor area of 88,363.64 sq.m. is vested in Xi’an OCT Land, which is a wholly-owned subsidiary of the Company. Details of the said certificates are listed as below:

Building No. 2

No. Blk Room Certificate Nos. Use 1 A 10401 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-10401-3 Hao office 2 A 10501 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-10501-3 Hao office 3 A 10601 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-10601-3 Hao office 4 A 10701 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-10701-3 Hao office 5 A 10801 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-10801-3 Hao office 6 A 10901 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-10901-3 Hao office 7 A 11001 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-11001-3 Hao office 8 A 11101 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-11101-3 Hao office 9 B 20402 Shan (2017) Xi An Shi Bu Dong Chan Quan Di 1099746 Hao office 10 B 20403 Shan (2017) Xi An Shi Bu Dong Chan Quan Di 1099747 Hao office 11 B 20501 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-20501-3 Hao office 12 B 20602 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-20602-3 Hao office 13 B 20701 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-20701-3 Hao office 14 B 20801 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-20801-3 Hao office 15 B 20901 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-20901-3 Hao office 16 B 21001 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-21001-3 Hao office 17 B 21101 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-21101-3 Hao office 18 D 30401 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-30401-1 Hao office 19 D 30501 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-30501-3 Hao office 20 D 30601 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-30601-3 Hao office 21 D 30701 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-30701-3 Hao office 22 D 30801 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-30801-3 Hao office 23 D 30901 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-30901-3 Hao office 24 D 31001 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-31001-3 Hao office 25 C 40401 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-40401-1 Hao office 26 C 40501 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-40501-1 Hao office 27 C 40601 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-40601-1 Hao office 28 C 40701 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-40701-1 Hao office 29 C 40801 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-40801-1 Hao office 30 C 40901 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-40901-1 Hao office Total	Gross Floor Area (sq.m.) 1,407.26 1,407.26 1,407.26 1,407.26 1,407.26 1,407.26 1,407.26 1,112.16 1,369.28 37.98 1,407.26 1,214.53 1,407.26 1,407.26 1,407.26 1,407.26 1,112.16 1,407.26 1,407.26 1,407.26 1,407.26 1,407.26 1,407.26 1,407.26 1,407.26 1,407.26 1,407.26 1,407.26 1,407.26 1,407.26
	40,027.61

No.
Blk
Room
Certificate Nos.
Use
1
A
10401
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-10401-3 Hao
office
2
A
10501
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-10501-3 Hao
office
3
A
10601
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-10601-3 Hao
office
4
A
10701
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-10701-3 Hao
office
5
A
10801
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-10801-3 Hao
office
6
A
10901
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-10901-3 Hao
office
7
A
11001
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-11001-3 Hao
office
8
A
11101
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-11101-3 Hao
office
9
B
20402
Shan (2017) Xi An Shi Bu Dong Chan Quan Di 1099746 Hao
office
10
B
20403
Shan (2017) Xi An Shi Bu Dong Chan Quan Di 1099747 Hao
office
11
B
20501
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-20501-3 Hao
office
12
B
20602
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-20602-3 Hao
office
13
B
20701
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-20701-3 Hao
office
14
B
20801
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-20801-3 Hao
office
15
B
20901
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-20901-3 Hao
office
16
B
21001
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-21001-3 Hao
office
17
B
21101
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-21101-3 Hao
office
18
D
30401
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-30401-1 Hao
office
19
D
30501
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-30501-3 Hao
office
20
D
30601
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-30601-3 Hao
office
21
D
30701
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-30701-3 Hao
office
22
D
30801
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-30801-3 Hao
office
23
D
30901
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-30901-3 Hao
office
24
D
31001
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-31001-3 Hao
office
25
C
40401
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-40401-1 Hao
office
26
C
40501
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-40501-1 Hao
office
27
C
40601
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-40601-1 Hao
office
28
C
40701
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-40701-1 Hao
office
29
C
40801
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-40801-1 Hao
office
30
C
40901
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020 I-30-1-40901-1 Hao
office
Total

Gross Floor Area
(sq.m.)
1,407.26
1,407.26
1,407.26
1,407.26
1,407.26
1,407.26
1,407.26
1,112.16
1,369.28
37.98
1,407.26
1,214.53
1,407.26
1,407.26
1,407.26
1,407.26
1,112.16
1,407.26
1,407.26
1,407.26
1,407.26
1,407.26
1,407.26
1,407.26
1,407.26
1,407.26
1,407.26
1,407.26
1,407.26
1,407.26

40,027.61

IV-5 -

APPENDIX IV

PROPERTY VALUATION REPORT

Building No. 3

No. Blk Room Certificate Nos. Use 1 E 50101 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50101-2 Hao commercial 2 E 50102 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50102-2 Hao commercial 3 E 50103 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50103-2 Hao commercial 4 E 50104 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50104-2 Hao commercial 5 E 50201 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50201-2 Hao residential 6 E 50301 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50301-2 Hao residential 7 E 50401 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50401-2 Hao residential 8 E 50501 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50501-2 Hao residential 9 E 50601 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50601-2 Hao residential 10 E 50701 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50701-2 Hao residential 11 E 50801 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50801-2 Hao residential 12 E 50901 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50901-2 Hao residential 13 E 51001 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51001-2 Hao residential 14 E 51101 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51101-2 Hao residential 15 E 51201 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51201-2 Hao residential 16 E 51301 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51301-2 Hao residential 17 E 51401 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51401-2 Hao residential 18 E 51501 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51501-2 Hao residential 19 E 51601 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51601-2 Hao residential 20 E 51701 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51701-2 Hao residential 21 E 51801 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51801-2 Hao residential 22 E 51901 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51901-2 Hao residential 23 E 52101 Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-52101-2 Hao residential Total	Gross Floor Area (sq.m.) 141.50 106.71 50.56 209.70 1,475.13 2,353.86 2,452.75 2,452.75 2,452.75 2,452.75 2,452.75 2,452.75 2,452.75 2,452.75 2,452.75 2,452.75 2,452.75 2,452.75 2,452.75 2,452.75 2,452.75 2,452.75 4,754.57
	48,336.03

No.
Blk
Room
Certificate Nos.
Use
1
E
50101
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50101-2 Hao
commercial
2
E
50102
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50102-2 Hao
commercial
3
E
50103
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50103-2 Hao
commercial
4
E
50104
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50104-2 Hao
commercial
5
E
50201
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50201-2 Hao
residential
6
E
50301
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50301-2 Hao
residential
7
E
50401
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50401-2 Hao
residential
8
E
50501
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50501-2 Hao
residential
9
E
50601
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50601-2 Hao
residential
10
E
50701
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50701-2 Hao
residential
11
E
50801
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50801-2 Hao
residential
12
E
50901
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-50901-2 Hao
residential
13
E
51001
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51001-2 Hao
residential
14
E
51101
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51101-2 Hao
residential
15
E
51201
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51201-2 Hao
residential
16
E
51301
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51301-2 Hao
residential
17
E
51401
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51401-2 Hao
residential
18
E
51501
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51501-2 Hao
residential
19
E
51601
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51601-2 Hao
residential
20
E
51701
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51701-2 Hao
residential
21
E
51801
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51801-2 Hao
residential
22
E
51901
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-51901-2 Hao
residential
23
E
52101
Xi An Shi Fang Quan Zheng Bei Lin Qu Zi Di 1100106020I-30-1-52101-2 Hao
residential
Total

Gross Floor Area
(sq.m.)
141.50
106.71
50.56
209.70
1,475.13
2,353.86
2,452.75
2,452.75
2,452.75
2,452.75
2,452.75
2,452.75
2,452.75
2,452.75
2,452.75
2,452.75
2,452.75
2,452.75
2,452.75
2,452.75
2,452.75
2,452.75
4,754.57

48,336.03

(5) In October 2015, City Legend International Limited (“ City Legend ”), a wholly-owned subsidiary of the Company, acquired the Property from Shaanxi Chang’an. As advised by the PRC legal advisers of the Company, according to Article 32 of Urban Real Estate Administration Law of the PRC 《中華人民共和國城市房地產管理法》( ), when transferring or mortgaging a real property, the title in that real property and the land use rights where the said real property occupies will also be transferred or mortgaged. Therefore, City Legend has acquired the legal title in the said Property and relevant land use rights when it acquired the said Property from Shaanxi Chang’an in 2015.
(6) We have been provided with a legal opinion on the title to the Property issued by the Company’s PRC legal adviser, which contains, inter alia, the following information:
(i) Xi’an OCT Land legally owns the Property and is entitled to dispose of the Property;
(ii) the Property is free from any encumbrances; and
(iii) pursuant to the Building Ownership Certificate, Xi’an Real Estate Registration Book and Commodity Housing Contract, 19 residential units on Level 2 or above of Block E are planned for residential use. According to Section 12 of Shaanxi Province Provisional Measures for Administration on Registration of Residence (Business Venue) (陝西省市場主體住所（經營場所）登記管理暫行辦法) (Shan Gong Shang Fa Chu (2015) 8 Hao, unit which is engaged in trading of online products, creative, design and production business, and activities which does not affect the daily life of other people, the occupier of the unit can be applied for registration as Residence (Business Venue) (住所（經營場所）) after obtaining consent from owner of the unit concerned. Pursuant to Section 77 of Property Laws of the PRC, an owner cannot change residential unit to operational unit which violates the laws, rules and administration regulations. If an owner wants to change its residential unit to business use, they need consent from the owners concerned in addition to observe the laws,
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APPENDIX IV

PROPERTY VALUATION REPORT

rules, and administration regulations. Based on the above, as the owner of the aforesaid units has agreed to change the residential use to business use, the occupiers of the aforesaid units can be applied for registration as Residence (Business Venue)) (住所（經營場所）) under the observance of the laws, rules and administration regulations, and the condition that daily life of other people concerned are not affected.

(7) We have prepared our valuation on the following basis and analysis:
(i) in undertaking our valuation, we have made reference to the recent lettings of the Property and other similar developments to determine the market rents of the retail and office portion of the Property. The monthly unit rents of these comparable ranged from RMB130-182 per sq.m. for retail units and RMB110-134 per sq.m. for office units. Appropriate adjustments have been made to reflect the differences in factors between the Property and comparable properties such as time, location, size, floor level and quality in arriving our key assumptions.
(ii) for the car parking spaces of the Property, we have identified and analysed various sale reference of car parking spaces which have characteristics to the Property. The unit price of these comparable properties ranged from RMB210,000 to RMB280,000 per car parking space. Appropriate adjustments have been made to reflect the differences in factors such as time, location, scale and floor level in arriving our key assumption.
(iii) The key assumptions of our valuation are set out below:

	Capitalisation Rate	Capitalisation Rate	Average Monthly Market Rent
			(RMB/sq.m.)
Retail		6.5%	117
Office	5.25%-6.75%		197
			Market Value
Car Parking Space			RMB230,000 per lot

(8) We have issued a valuation report to the Company for the valuation of the Property as at 31 July 2020 for internal reference purpose. The market value of the Property as at 31 July 2020 is RMB1,605,000,000.
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BUSINESS VALUATION REPORT

APPENDIX V

The following is the text of a valuation report prepared for the purpose of incorporation in this circular received from Savills Valuation and Professional Services Limited, an independent valuer, in connection with its valuation of the entire equity interest in the Target Company as at 31 July 2020.

==> picture [48 x 48] intentionally omitted <==

Savills Valuation and Professional Services Limited 1208, Cityplaza One 1111 King’s Road, Taikoo Shing Hong Kong T : (852) 2801 6100 F : (852) 2530 0756 EA Licence: C-023750 savills.com

The Board of Directors

Overseas Chinese Town (Asia) Holdings Limited 59/F, Bank of China Tower

1 Garden Road Central Hong Kong

15 December 2020

Dear Sirs,

RE: VALUATION OF 100% EQUITY INTEREST IN XI’AN OCT LAND LIMITED ( 西安華僑城置地有限公司 )

In accordance with your instructions, we have undertaken a valuation on behalf of Overseas Chinese Town (Asia) Holdings Limited (the “ Company ”) to determine the Market Value (as defined below) of 100% equity interest (the “ Equity ”) in Xi’an OCT Land Limited (the “ Target ”) as at 31 July 2020 (the “ Valuation Date ”).

1. PURPOSE OF VALUATION AND STANDARD OF VALUE

The purpose of this valuation is to express an independent opinion of the Market Value of 100% equity interest in the Target as at the Valuation Date stated above for your internal reference and public circular purpose.

According to International Valuation Standards (“ IVS ”), Market Value is defined as intended to mean “the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”.

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BUSINESS VALUATION REPORT

APPENDIX V

2. BACKGROUND OF THE TARGET

Based on the information provided by the Company, as at the Valuation Date, the Target held a real estate investment project in Xi’an City (the “ Project ”) as its primary asset. The Target is a company established in the PRC with limited liability and is principally engaged in the provision of property leasing and management services and holds the entire interest of the OCT Chang’an Metropolis Project, which is located at the Bell Tower business district at the centre of Xi’an City, a commercial landmark along Chang’an Road. The project occupies a total gross floor area of approximately 104,700 square metres, comprising high-end office properties such as Building No. 2 and Building No. 3 of Chang’an Metropolis Centre, as well as part of the car parking space.

3. VALUATION METHODOLOGY AND BASIS

In conducting the valuation, we have considered three generally accepted approaches, including income approach, market approach and cost approach (or asset approach). Each of these approaches is appropriate in one or more circumstances, and sometimes, two or more approaches may be used together. Selection of valuation approach will be determined by the specific characteristics of the subject of the valuation and commonly adopted practice.

3.1. Cost approach/Asset approach

According to the IVS, the cost approach provides an indication of value using the economic principle that a buyer will pay no more for an asset than the cost to obtain an asset of equal utility, whether by purchase or by construction, unless undue time, inconvenience, risk or other factors are involved. The approach provides an indication of value by calculating the current replacement or reproduction cost of an asset and making deductions for physical deterioration and all other relevant forms of obsolescence.

In the business valuation context, cost approach is often presented as summation method, in which Market Value of the business entity is derived from the sum of Market Value of its existing assets less the Market Value of its liabilities.

3.2. Market approach

According to the IVS, the market approach provides an indication of value by comparing the asset with identical or comparable (i.e. similar) assets for which price information is available.

In the business valuation context, the market approach valuation shall analyse recent transaction(s) in the equity interest of the valuation subject and/or comparable companies and benchmark the valuation subject with the selected comparable(s).

3.3. Income approach

According to the IVS, the income approach provides an indication of value by converting future cash flow to a single current value. Under the income approach, the value of an asset is determined by reference to the value of income, cash flow or cost savings generated by the asset. In

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BUSINESS VALUATION REPORT

APPENDIX V

the business valuation context, under income approach, value of the business entity is derived primarily from the present value (“ PV ”) of its future cash flow, typically through the use of discounted cash flow (“ DCF ”) method.

4. VALUATION ANALYSIS

Given that the value of the Target is mainly derived from its net assets, we have adopted summation method of cost approach to value its equity by valuing its assets and liabilities on the statement of financial position of the Target. As at the Valuation Date, the assets and liabilities held by the Target based on the unaudited statement of financial position of the Target (“ Unaudited Financial Information ”) are as follows:

4.1. Trade and other receivables, and amount due from the Group

For the trade and other receivables, and amount due from the Group, based on the evaluation performed by the Company there is no issues affecting the recovery of the receivables at book value. There is also no indication of existence of significant credit risk associated with the receivables which will lead to a decline of the Market Value of the receivables against their book value based on information provided to us. Furthermore, we understand that the Target has already made adequate provision on the receivables in the Unaudited Financial Information according to the applicable financial reporting standards. Therefore, we have adopted the book value shown in the Unaudited Financial Information as the Market Value in our valuation.

4.2. Cash at bank and on hand

For the cash at bank and on hand, we have adopted the book value shown in the Unaudited Financial Information as the Market Value in our valuation.

4.3. Investment property

For the investment property which is the Project, we have adopted the Market Value of RMB1,605 million as the Market Value of the investment property as at the Valuation Date. For the full details of the valuation of the investment property, please refer to our separate property valuation report (our ref: HK/2020/VPS/20489(a)/AL/CJ/fc).

4.4. Other property, plant and equipment

For the other property, plant and equipment which is not in our scope of property valuation, based on the discussion with the Company, other property, plant and equipment are currently in use in good conditions and the Company confirmed that there is no significant differences between its book value and Market value. As the balance of the other property, plant and equipment is immaterial to the net assets value of the Target, we have adopted the book value shown in the Unaudited Financial Information as the Market Value in our valuation.

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BUSINESS VALUATION REPORT

APPENDIX V

4.5. Intangible assets

For the intangible assets which are software, as the balance of the intangible assets is immaterial to the net assets value of the Target, we have adopted the book value shown in the Unaudited Financial Information as the Market Value in our valuation.

4.6. Trade and other payables, amount due to the Group, and current taxation

For the trade and other payables, amount due to the Group, and current taxation which are liabilities in nature and properly recorded in the Unaudited Financial Information, we have adopted the book value shown in the Unaudited Financial Information as the Market Value in our valuation.

4.7. Deferred tax liabilities

According to the Hong Kong Financial Reporting Standards (“ HKFRSs ”), increase in Market Value of the Project accounted as an investment property will lead to increase in deferred tax liabilities, which is an accounting item and not an actual incurred tax liability. Based on the discussion with the Company, the current transaction structure will not trigger any actual tax liability at Project level according to their tax advisor. The property valuation of the Project is also conducted on the basis that the Project will be transferred en-bloc which is consistent with the current transaction structure. As such, we have not considered the deferred tax liabilities arising from the value increase in the Project in our Equity valuation.

The Market Value adopted for each of the asset and liability item above is shown in appendix.

5. REMARKS

Unless otherwise stated, all monetary amounts are stated in Renminbi (“ RMB ”).

We have been provided with extracts of copies of relevant documents and financial information relating to the Target. We have relied upon the aforesaid information, and certain data from various databases in forming our opinion of the Market Value. However, we have not inspected the original documents to ascertain any amendments which may not appear on the copies handed to us. Our work does not constitute an audit and no assurance is given by us to the information supplied to us. We have no responsibility to doubt the truthfulness and accuracy of the said information which is material to the valuation. We have also been confirmed by the Company that no material facts related to this valuation have been omitted from the information provided. We have also made relevant inquiries and obtained further information as required for the purpose of this valuation.

We hereby confirm that we have neither present nor prospective interests in the Company, the Target, and their respective holding companies, subsidiaries and associated companies, or the value reported herein.

This report is issued subject to our Assumptions and Limiting Conditions as attached.

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BUSINESS VALUATION REPORT

APPENDIX V

We understand that the Company will perform additional separate due diligence before making any transaction decision related to the Target. The Company will not solely rely on our opinion regarding any transaction related to the Target. Our report will be used for the stated purposes only and cannot replace any managerial decision or judgment of the management of the Company. Our work does not constitute any buy or sell recommendation.

6. OPINION OF VALUE

Based on the method employed and analysis stated above and in the appendix, we are of the opinion that the Market Value of 100% equity interest in the Target as at the Valuation Date is RMB714,410,000 (RENMINBI SEVEN HUNDRED FOURTEEN MILLION FOUR HUNDRED AND TEN THOUSAND ONLY) .

The outbreak of the Novel Coronavirus (COVID-19), declared by the World Health Organisation as a ‘Global Pandemic’ on the 11th March 2020, has impacted many aspects of daily life and the global economy. Given the unknown future impact that COVID-19 might have on the real estate market and the difficulty in differentiating between short term impacts and long-term structural changes, we recommend that you keep the valuation contained within this report under frequent review.

Our opinion of value is made as at the Valuation Date only. Any value changes subsequent to the Valuation Date could be material depending on facts and circumstances.

Yours faithfully, For and on behalf of

Savills Valuation and Professional Services Limited

Wiley W.F. Pun

HKICPA CICPA (non-practising) PRM Director

Encl.

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BUSINESS VALUATION REPORT

APPENDIX V

ASSUMPTIONS

A number of assumptions have been made in the preparation of the reported figures. The major assumptions are set out below:

Financial and operational information provided and confirmed by the Company are accurate and we have relied to a considerable extent on such information in arriving at our opinion of value;
There are no hidden or unexpected conditions associated with the assets and liabilities of the Target that might adversely affect the reported value.
Deferred tax liabilities arising from value increase of the Project according to HKFRSs will not reduce the Market Value of the Equity on the assumption that the equity instead of the Project will be transferred from a market participant’s standpoint which is consistent with the valuation basis of the Market Value of the Project;
There will be no major changes in existing political, legal, technological, tax, fiscal or economic conditions in the country or district where the business is in operation;
The long-term inflation rate, interest rates and currency exchange rate will not differ materially from those presently prevailing;
The Target will retain sufficient management and technical personnel to maintain their ongoing operations;
There will be no major business disruptions through diseases, riots, international crisis, industrial disputes, industrial accidents or severe weather conditions that will significantly affect the existing business;
The value of the Target will not be significantly affected by any claim or litigation arising from its customers or businesses;
The Target’s businesses are unaffected by any statutory notice and the operation of the business gives, or will give, no rise to a contravention of any statutory requirements. All applicable laws and regulations were and will be complied with; and
The business is not and will not be subject to any unusual or onerous restrictions or encumbrances which may render the Target defaulted against its outstanding commitment or obligations.

LIMITING CONDITIONS

We have been provided with extracts of copies of relevant documents and financial information relating to the Target. Our work has relied to a considerable extent on the information provided by the Company and does not constitute an audit and no assurance is given by us to the information supplied to us.

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APPENDIX V

BUSINESS VALUATION REPORT

Details of our principal information sources are set out in the report and we have satisfied ourselves, so far as possible, that the information presented in our report is consistent with other information which was made available to us in the course of our work. We have made relevant inquiries and obtained further information as we considered necessary for the purpose of this valuation, we however cannot guarantee the reliability or accuracy of the information sources. We have no responsibility to doubt the truthfulness and accuracy of the said information which is material to the valuation.

No opinion is intended to be expressed for matters which require legal or other specialised expertise, which is beyond what is customarily expected on valuers’ capacity or expertise. We are not in a position to, nor have been instructed to, comment on the lawfulness of the businesses and the Target’s possession of the assets. In the course of our valuation, we have assumed that the assets have obtained all required registration and are freely transferable in the market without any significant obstacles.

The conclusion of value is based on accepted valuation procedures and practices that rely substantially on the use of numerous assumptions and the consideration of many uncertainties, not all of which can be easily quantified or ascertained. Furthermore, the assumptions adopted are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of the Company, the Target and us. While we have exercised our professional knowledge and cautions in adopting assumptions and other relevant key factors in our valuation, those factors and assumptions are still vulnerable to the change in one or more of these factors subsequent to the Valuation Date. We must emphasise that the realisation of any prospective financial information set out within our report is dependent on the continuing validity of the assumptions on which it is based. We accept no responsibility for the realisation of any prospective financial information. Actual results are likely to be different from those shown in the prospective financial information because events and circumstances frequently do not occur as expected, and the differences may be material.

The Company will appreciate that in providing the Company with our report, we shall have regard to market conditions as at the Valuation Date. Naturally, these are subject to change and it is therefore important that the Company takes account of any such change in conditions that may occur from the Valuation Date before making any binding decision in relation to the Target.

We shall be under no obligation to update our report in respect of events or information which come to our attention subsequent to the date of this report. Notwithstanding this, we reserve the right, should we consider it necessary, to revise our valuation in light of any information which existed at the Valuation Date but which becomes known to us subsequent to the date of this report.

This report is submitted to the Company and the valuation expressed herein is valid only for the stated purpose as of the Valuation Date. In accordance with our standard practice, we must state that this valuation report shall be for the use only of the party to whom it is addressed for the stated purpose and no responsibility is accepted to any other party for the whole or any part of its contents.

Neither the whole, nor any part of this report and valuation, nor any reference thereto may be included in any documents, circular or statement without our written approval of the form and context in which it will appear.

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BUSINESS VALUATION REPORT

APPENDIX V

We shall not testify or attend in court due to this exercise, with reference to the valuation described herein. Should there be any further services required, the corresponding expenses and provision of services will be reimbursed from the Company and such additional work may incur without prior notification.

MANAGEMENT CONFIRMATION OF FACTS

A draft of this report and our calculation has been sent to management of the Company. They have reviewed and orally confirmed to us that facts as stated in this report and calculation are accurate in all material respects and that they are not aware of any material matters relevant to our engagement which have been excluded.

APPENDIX – MARKET VALUE ADOPTED FOR EACH OF THE ASSET AND LIABILITY ITEM HELD BY THE TARGET

Current assets Trade and other receivables Amount due from the Group Cash at bank and on hand Total current assets Non-current assets Investment property Other property, plant and equipment Intangible assets Total non-current assets Liabilities Trade and other payables Amount due to the Group Current taxation Total liabilities Net assets	Book value (in RMB’000) 35,535 198,921 26,309 260,765 1,425,000 14,738 6 1,439,828 (47,144) (1,118,733) (222) (1,166,099) 534,494	Adjustment (in RMB’000) – – – – 179,916 – – 179,916 – – – – 179,916	Market Value (in RMB’000) 35,535 198,921 26,309 260,765 1,605,000 14,738 6 1,619,744 (47,144) (1,118,733) (222) (1,166,099) 714,410

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GENERAL INFORMATION

APPENDIX VI

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 is 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 executives’ 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 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 the
Name of Director	Capacity/Nature	Shares held	Company
Lam Sing Kwong	Beneficial owner	1,000,000	0.13%
Simon		(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.

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:

VI-1 -

GENERAL INFORMATION

APPENDIX VI

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

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. Wang Wenjin, 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. Mr. Zhang Dafan and Ms. Xie Mei, both being executive Directors, and Mr. Wang Wenjin, 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 for the purpose of 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), which is, 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.

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 had any interest in any business which competes or is likely to compete with the businesses of the Group.

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GENERAL INFORMATION

APPENDIX VI

4. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had a service contract with any member of the Group which was not 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 2019 (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 2019 (being the date to which the latest published accounts of the Company were made up) up to and including the Latest Practicable Date.

7. EXPERTS AND CONSENTS

The qualifications of the experts who have been named in this circular or have given opinions or advice which are contained herein are set out below:

Name	Qualification
KPMG	Certified Public Accountants
Savills Valuation and Professional	Independent professional valuer (Note)
Services Limited

Note: The property valuation is conducted by Savills Valuation and Professional Services Limited. The subject valuation is handled by Mr. Anthony C.K. Lau, who is an approved valuer of Hong Kong Institute of Surveyors for undertaking valuation for incorporation or reference in listing particulars and circulars.

As at the Latest Practicable Date, none of the experts had any shareholding in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

Each of the experts has given and has not withdrawn its written consent to the issue of this circular, with the inclusion of its report or letter (as the case may be) or references to its name in the form and context in which they are included.

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GENERAL INFORMATION

APPENDIX VI

None of the experts had any direct or indirect interest in any assets which have been, since 31 December 2019 (being the date to which the latest published audited financial statements of the Group were made up), acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

8. 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 agreement dated 24 December 2018 entered into between Chengdu Tianfu OCT Industry Development Co., Ltd. (成都天府華僑城實業發展有限公司, “ Chengdu OCT ”), 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;
(b) 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, 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;
(c) 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), 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 Investment Limited (深圳市華京投資有限公司, “ 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 by Shenzhen Huajing from Xiamen Yuzhou at a total consideration of approximately RMB340,380,433;
(d) the equity transfer agreement dated 26 March 2019 entered into between Xiamen Yuzhou and Shenzhen Huajing in respect of the acquisition of 21% of equity interest in Zhongshan Yuhong by Shenzhen Huajing from Xiamen Yuzhou at a total consideration of RMB1,263,447;
(e) the debt transfer agreement dated 26 March 2019 entered into between Xiamen Yuzhou and Shenzhen Huajing in respect of the acquisition of debt interest in Zhongshan Yuhong by Shenzhen Huajing from Xiamen Yuzhou at a total consideration of approximately RMB339,116,986;
VI-4 -

APPENDIX VI

GENERAL INFORMATION

(f) 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 ”) and OCT Ltd. on 7 May 2019 in relation to provision of finance lease and factoring services by OCT Financial Leasing to OCT Ltd. at an annual cap of RMB2,500,000,000 for one year from the date of independent shareholders’ approval;
(g) the finance lease and factoring framework agreement entered into between OCT Financial Leasing and OCT Group on 7 May 2019 in relation to the provision of finance lease and factoring services by 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;
(h) the State-owned Land Use Rights Grant Contract dated 30 May 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 ”) jointly with Hefei Municipal Natural Resources and Planning Bureau (合肥市自然資源和規劃局, “ Hefei Planning Bureau ”) in respect of the acquisition of the land use rights of the land situated at Chaohu, Hefei, Anhui Province of the PRC at a consideration of approximately RMB1,130 million;
(i) the cooperation agreement dated 3 June 2019 entered into between OCT Gangya and 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 Chaohu, 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 are attributable to OCT Gangya and Hefei Guojia, respectively, in proportion to their respective shareholdings in the Project Company;
(j) the joint venture agreement dated 20 June 2019 entered into between Shenzhen OCT Ganghua Investment Holdings Co., Ltd. (深圳華僑城港華投資控股有限公司, “ OCT Ganghua ”) and Hefei Huaxing Konggang Investment Co., Ltd. (合肥華興空港投資有限公司) in relation to the establishment of Hefei OCT Industry Development Co., Ltd. (合肥華僑城實業發展有限公司, “ Hefei OCT Industry ”), pursuant to which OCT Ganghua is required to contribute RMB5.1 billion, representing 51% of the registered capital of Hefei OCT Industry;
(k) the lease agreement dated 5 July 2019 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. (上海華合房地產開發有限公司, “ Shanghai Huahe ”) in relation to the lease of 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;
(l) 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 “ Nanyang Bank” ), pursuant to which the Company agreed to guarantee up to 49% of the loan (being RMB392,000,000) under a loan agreement dated 26 June 2019 and entered into between Chongqing OCT Real Estate Limited (重慶華僑城置地有限公司) and the Nanyang Bank;
VI-5 -

APPENDIX VI

GENERAL INFORMATION

(m) the limited partnership agreement dated 7 November 2019 entered into between 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 OCT Huaxin ”), Shenzhen Huajing 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 the Xiamen Partnership, pursuant to which Shenzhen OCT Huaxin and Shenzhen Huajing are required to contribute RMB1,000,000 and RMB1,168,000,000, representing 0.07% and 77.87% of the total capital of the Xiamen Partnership, respectively;
(n) the State-owned Land Use Rights Grant Contracts dated 27 December 2019 entered into between Hefei OCT Industry and Hefei Planning Bureau in respect of the acquisition of the land use rights of the five (5) parcel of land with a total site area of approximately 1,042 mu located at the first phase of Hefei Airport International Town at the total consideration of approximately RMB2,644 million;
(o) the limited partnership agreement entered into among Shenzhen OCT Huaxin, Shenzhen Huayou Investment Limited (深圳市華友投資有限公司, “ Shenzhen Huayou ”), Dongguan City Industrial Investment Parent Fund Co., Ltd. (東莞市產業投資母基金有限公司), Guangdong Province Yueke Songshan Lake Innovation Venture Capital Parent Fund Co., Ltd. (廣東省粵科松山湖創新創業投資母基金有限公司) and Dongguan City Multiplier Program Industrial M&A Parent Fund Partnership (Limited Partnership) (東莞市倍增計劃產業併購母基金合夥企業（有限合夥）) in relation to the establishment of the Dongguan Partnership on 6 March 2020, pursuant to which Shenzhen OCT Huaxin and Shenzhen Huayou are required to contribute RMB3,000,000 and RMB132,000,000, representing approximately 1% and 44% of the total capital of the Dongguan Partnership, respectively;
(p) the finance lease and factoring framework agreement entered into between OCT Financial Leasing and OCT Ltd. on 18 May 2020 in relation to the provision of finance lease and factoring services by OCT Financial Leasing to OCT Ltd. at an annual cap of RMB1,000,000,000 for one year from the date of independent shareholders’ approval;
(q) the finance lease and factoring framework agreement entered into between OCT Financial Leasing and OCT Group on 18 May 2020 in relation to the provision of finance lease and factoring services by 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;
(r) the equity transfer agreement entered into among Shenzhen Huayou, Happy Valley Cultural Tourism Development Co., Ltd. (歡樂谷文化旅遊發展有限公司, “ Happy Valley Cultural Tourism ”) and the Dongguan Partnership on 12 June 2020, pursuant to which Shenzhen Huayou agreed to transfer 1% of the equity interest in the Dongguan Partnership, representing a capital contribution of RMB3,000,000 by Shenzhen Huayou, to Happy Valley Cultural Tourism at a consideration of RMB3,000,185.40;
(s) the property management framework agreement entered into between Hefei OCT Huanchao Cultural Tourism Real Estate Development Co., Ltd (合肥華僑城環巢文旅置業發展有限公司) (“ Hefei OCT Huanchao ”) and Hefei branch office of OCT Property (Group) Co., Ltd. (華
VI-6 -

APPENDIX VI

GENERAL INFORMATION

僑城物業（集團）有限公司合肥分公司) (“ OCT Property (Hefei) ”) on 8 July 2020, pursuant to which OCT Property (Hefei) will provide property management services for the development project in respect of Hefei Chaohu Bantang Hot Spring Town (合肥巢湖半湯溫泉小鎮) and the office areas of Hefei OCT Huanchao to Hefei OCT Huanchao for the period from 8 July 2020 to 31 December 2020;

(t) the subscription agreement entered into between the Company, OCT Group and the joint lead managers on 8 July 2020 in relation to the issue of US$500,000,000 4.50% senior guaranteed perpetual capital securities by the Company;
(u) the finance lease agreement entered into between CMB Financial Leasing Co., Ltd. (招銀金融租賃有限公司, the “ Lessor ”) and the Chengdu OCT (the “ Lessee ”) on 13 August 2020, pursuant to which: (i) the Lessor conditionally agreed to purchase the amusement and ancillary facilities (such as roller coaster and waterpark facilities) used in Chengdu Happy Valley currently owned by the Lessee (the “ Leased Assets ”), at a consideration of RMB500,000,000.00 (“ Purchase Consideration ”), and (ii) following the acquisition, the Lessor conditionally agreed to lease the Leased Assets to the Lessee for a term of 36 months starting from the date of the payment of the Purchase Consideration by the Lessor to the Lessee, at an aggregate estimated lease payment of approximately RMB549,401,142.48, and upon expiry of the lease, the Lessee shall purchase the Leased Assets at a repurchase consideration of RMB1.00;
(v) the planning technical services framework agreement entered into between Hefei OCT Industry and Shenzhen OCT Innovation and Research Institute Co., Ltd. (深圳華僑城創新研究院有限公司) (“ OCT IRI ”) on 17 August 2020, pursuant to which OCT IRI will provide planning and project design technical services for the development project in respect of Hefei Airport International Town (合肥空港國際小鎮) to Heifei OCT Industry for the period from 17 August 2020 to 31 December 2022 at the annual caps of RMB9,000,000, RMB8,000,000 and RMB8,000,000 for the period from 17 August 2020 to 31 December 2020 the year ending 31 December 2021 and the year ending 31 December 2022, respectively;
(w) the subscription agreement entered into between the Company, OCT Group and the joint lead managers on 20 August 2020 in relation to the issue of US$300,000,000 4.50% senior guaranteed perpetual capital securities by the Company;
(x) an equity transfer agreement entered into, on 4 September 2020, between Bantix International Limited (“ Bantix International ”), OCT (Chengdu) Investment Co., Ltd. (華僑城（成都）投資有限公司, “ OCT Chengdu Investment ”) and Chengdu OCT in respect of the transfer of the 50.99% equity interest in Chengdu OCT to OCT Chengdu Investment at a consideration of RMB1,092,103,600;
(y) a debt transfer agreement entered into on 4 September 2020, between Bantix International, OCT Chengdu Investment and Chengdu OCT in respect of the assignment of the debt in the amount of RMB160,364,475.51 from Bantix International to OCT Chengdu Investment;
VI-7 -

APPENDIX VI

GENERAL INFORMATION

(z) the design and planning agreement entered into between Hefei OCT Huanchao and OCT IRI on 21 September 2020, pursuant to which OCT IRI will provide design and planning services in respect of phase I of the development project of Hefei Chaohu Bangtang Hot Spring Resort Waterpark (合肥巢湖半湯溫泉小鎮水公園), located in the Hefei Chaohu Bantang Hot Spring Town (合肥巢湖半湯溫泉小鎮) (the “ Waterpark Project ”) to Hefei OCT Huanchao, at a service fee of RMB4,516,600;
(aa) the design and planning agreement entered into between Hefei OCT Huanchao and OCT IRI on 21 September 2020, pursuant to which OCT IRI will provide design and planning services in respect of phase II of the Waterpark Project to Hefei OCT Huanchao, at a service fee of RMB1,336,000; and
(bb) the tenancy agreement dated 28 September 2020 entered into between OCT Gangya and Shenzhen Overseas Chinese Town Entertainment Investment Company Limited (深圳華僑城都市娛樂投資公司) in relation to the lease of the premises located at Rooms 3-1 to 3-3, 3/F, Jacaranda International Business Center, No. 8 Baishiroad East, Nanshan District, Shenzhen, the PRC for a term from 1 October 2020 to 30 September 2023 at a monthly rent of RMB278,200.00.

9. 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.

10. 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.

11. 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 for a period of 14 days from the date of this circular:

VI-8 -

GENERAL INFORMATION

APPENDIX VI

(a) the memorandum and articles of association of the Company;
(b) the annual reports of the Company for the years ended 31 December 2017, 2018 and 2019;
(c) the interim report of the Company for the six months ended 30 June 2020;
(d) the written consent as referred to under the paragraph headed “Experts and Consents” in this Appendix;
(e) the report from the reporting accountants, KPMG, in respect of the review of the unaudited consolidated financial statements of the Target Group, the text of which is set out in Appendix II to this circular;
(f) the report from the reporting accountants, KPMG, on the unaudited pro forma financial information of the Remaining Group, the text of which is set out in Appendix III to this circular;
(g) the property valuation report from the Independent Valuer, the text of which is set out in Appendix IV to this circular;
(h) the business valuation report from the Independent Valuer, the text of which is set out in Appendix V to this circular;
(i) the material contracts referred to in the paragraph headed “Material Contracts” in this Appendix;
(j) a copy of each circular issued pursuant to the requirements set out in Chapters 14 and/or 14A of the Listing Rules since 31 December 2019 (being the date of which the last published accounts of the Company were made up); and
(k) this circular.
VI-9 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

Overseas Chinese Town (Asia) Holdings Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03366)

NOTICE OF EXTRAORDINARY GENERAL MEETING

PRECAUTIONARY MEASURES FOR THE EXTRAORDINARY GENERAL MEETING

Please refer to page 1 of the circular of the Company dated 15 December 2020 for the measures to be implemented at the extraordinary general meeting (“ EGM ”) of Overseas Chinese Town (Asia) Holdings Limited (the “ Company ”) by the Company to protect the attendees from the risk of infection of the novel coronavirus, including:

(i) compulsory body temperate check and filing out the health registration form;
(ii) compulsory wearing of surgical face mask; and
(iii) no distribution of corporate gifts and no serving of refreshments.

Any person who does not comply with the precautionary measures or is subject to any PRC Government prescribed quarantine may be denied entry into the meeting venue. For the health and safety of the shareholders of the Company (the “ Shareholders ”), the Company strongly advises the Shareholders to appoint the chairman of the meeting as your proxy to vote on the relevant resolutions at the EGM as an alternative to attending the EGM in person.

NOTICE IS HEREBY GIVEN that the EGM will be held at the conference room of the Company on 3/F., Jacaranda IBC, OCT Harbour, Baishi Road, Nanshan District, Shenzhen, China on Thursday, 31 December 2020 at 9:00 a.m. or any adjournment of such meeting for the purposes of considering and, if thought fit, passing the following resolution, with or without modifications, as ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT

(a) the sale and purchase agreement (the “ Sale and Purchase Agreement ”) (a copy of which has been produced to the EGM marked “A” and initialed by the chairman of the EGM for the purpose of identification) entered into among Phoenix Ocean Developments Limited (華秦發展有限公司), the Company and HNW Investment Fund SPC acting for the account of and on behalf of Serica Segregated Portfolio in relation to the disposal of the entire issued shares of
EGM-1 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

City Turbo Limited (港名有限公司) (the “ Target Company ”) (including the entire assets, rights and liabilities of the Target Company) at the consideration in the sum of approximately HK$2,037 million, and the transactions contemplated under the Sale and Purchase Agreement be and are hereby approved, confirmed and ratified; and

(b) any director of the Company be and is hereby authorised to do all such further acts and things, negotiate, approve, agree, sign, initial, ratify and/or execute such further documents and take all steps which may be in their opinion necessary, desirable or expedient to implement and/or give effect to the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder.”

By order of the Board Overseas Chinese Town (Asia) Holdings Limited Zhang Dafan Chairman

Hong Kong, 15 December 2020

Notes:

Any member entitled to attend and vote at the EGM (and any adjournment of such meeting) shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares of the Company may appoint more than one proxy to represent him and vote on his behalf at the EGM (and any adjournment of such meeting). A proxy need not be a member of the Company. In addition, a proxy or proxies representing either a member who is an individual or a member which is a corporation shall be entitled to exercise the same powers on behalf of the member which he or they represent as such member could exercise.
The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person authorised to sign the same.
In order to be valid, the proxy form and the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power of attorney or authority, must be deposited with the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, as soon as possible and in any event not less than forty-eight (48) hours before the time appointed for holding the EGM (or any adjournment of such meeting) (as the case may be) at which the person named in the instrument proposes to vote.
The register of members of the Company will be closed from Monday, 28 December 2020 to Thursday, 31 December 2020 (both days included), for the purpose of determining the list of shareholders entitled to attend the EGM, during which period no transfer of shares of the Company will be registered. In order to qualify for attendance and voting at the EGM, all completed transfer documents accompanied by the relevant share certificates must be lodged with the Company’s share registrar in Hong Kong not later than 4:30 p.m. on Thursday, 24 December 2020.
Completion and return of the proxy form does not preclude a member from attending and voting in person at the EGM (or any adjournment of such meeting) and, in such event, the proxy form shall be deemed to be revoked.
EGM-2 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

Where there are joint holders of any shares of the Company, any one of such joint holders may vote, either in person or by proxy, in respect of such shares as if he were solely entitled thereto; but if more than one of such joint holders are present at the EGM (and any adjournment of such meeting), the most senior will alone be entitled to vote, whether in person or by proxy. For this purpose, seniority will be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

As at the date of this notice, the Board comprises seven Directors, namely: Mr. Zhang Dafan, Ms. Xie Mei and Mr. Lin Kaihua as executive Directors; Mr. Wang Wenjin as non-executive Director; Ms. Wong Wai Ling, Mr. Lam Sing Kwong Simon and Mr. Chu Wing Yiu as independent non-executive Directors.

EGM-3 -

AI assistant

RemeGen Co., Ltd. — Proxy Solicitation & Information Statement 2020

51206_rns_2020-12-14_44e29872-d023-4f30-8fb2-a42e55a9f3de.pdf

Overseas Chinese Town (Asia) Holdings Limited

(1) MAJOR TRANSACTION IN RELATION TO SUBSCRIPTION OF 49% INTEREST IN THE CAYMAN FUND

AND

(2) MAJOR TRANSACTION IN RELATION TO GRANT OF REPURCHASE OPTION

AND

(3) VERY SUBSTANTIAL DISPOSAL IN RELATION TO DISPOSAL OF THE ENTIRE EQUITY INTEREST OF THE TARGET COMPANY

PRECAUTIONARY MEASURES FOR THE EGM

CONTENT

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

Overseas Chinese Town (Asia) Holdings Limited

(Stock Code: 03366)

(1) MAJOR TRANSACTION IN RELATION TO SUBSCRIPTION OF 49% INTEREST IN THE CAYMAN FUND AND

(2) MAJOR TRANSACTION IN RELATION TO GRANT OF REPURCHASE OPTION

AND

(3) VERY SUBSTANTIAL DISPOSAL IN RELATION TO DISPOSAL OF THE ENTIRE EQUITY INTEREST OF THE TARGET COMPANY

INTRODUCTION

LETTER FROM THE BOARD

THE COOPERATION AGREEMENT

LETTER FROM THE BOARD

THE SUBSCRIPTION

Subject matter

Term of the Cayman Fund

Purpose of the Cayman Fund

Expected income of the Cayman Fund

LETTER FROM THE BOARD

Establishment cost and operation fees of the Cayman Fund

Capital management

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Decision-making mechanism of the Cayman Fund

Decision-making mechanism of the Target Company and Xi’an OCT Land

LETTER FROM THE BOARD

Rights of the Investors

The Performance Targets and the Repurchase Option

LETTER FROM THE BOARD

Entrusted Sale

Pre-emptive right

LETTER FROM THE BOARD

Termination of the Cooperation Agreement

THE DISPOSAL

Subject matter

Purchaser’s Loan

Bank Loan

LETTER FROM THE BOARD

THE SALE AND PURCHASE AGREEMENT

Parties

LETTER FROM THE BOARD

Consideration

Basis of the Disposal Consideration

Conditions precedent of the Disposal

LETTER FROM THE BOARD

LETTER FROM THE BOARD

INFORMATION OF THE CAYMAN FUND

LETTER FROM THE BOARD

INFORMATION OF THE GROUP

INFORMATION OF HNW INVESTMENT FUND AND CCB INTERNATIONAL

INFORMATION OF THE TARGET GROUP

Financial information of the Target Group

FINANCIAL EFFECT OF THE SUBSCRIPTION AND THE DISPOSAL AND USE OF PROCEEDS

The Subscription

The Disposal

Assets and Liabilities

REASONS FOR AND BENEFIT OF ENTERING INTO THE TRANSACTIONS

LISTING RULES IMPLICATIONS

The Subscription

The Repurchase Option

The Disposal

LETTER FROM THE BOARD

GENERAL

RECOMMENDATION

ADDITIONAL INFORMATION

1. FINANCIAL INFORMATION OF THE GROUP

2. INDEBTEDNESS STATEMENT

RemeGen Co., Ltd. Proxy Solicitation & Information Statement 2020