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 your 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)

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF 50.99% OF EQUITY INTEREST AND ASSIGNMENT OF DEBT IN THE TARGET COMPANY

Independent Financial Adviser to

the Independent Board Committee and the Independent Shareholders

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 at 59/F, Bank of China Tower, 1 Garden Road, Hong Kong on Wednesday, 21 October 2020 at 10:30 a.m. is set out on pages EGM-1 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 Hong Kong 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.

30 September 2020

		Pages
Precautionary Measures for the Extraordinary General Meeting . . . . . . . . . . . . . .	. . .	1
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . .	2
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . .	6
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . .	. . .	16
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . .	18
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 of the Remaining Group	. .	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, 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) Attendees may be asked about matters such as whether (a) he/she has travelled outside of Hong Kong within the 14-day period immediately before the EGM; and (b) he/she is currently subject to compulsory quarantine prescribed by the Hong Kong Government. Anyone who responds to any of these questions in the affirmative may be denied entry into the EGM venue or be required to leave the EGM venue.
(iv) No corporate gifts will be distributed and no refreshments will be served.
(v) 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, 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:

“associate(s)” has the meaning ascribed to it under the Listing Rules “Bantix International” Bantix International Limited (耀豪國際有限公司), a company incorporated in Hong Kong and is a wholly owned subsidiary of the Company

“Board” the board of directors of the Company “Chengdu OCT Project” a large comprehensive development project which is developed and managed by the Target Company and contain premium residential community, urban entertainment, commercial complex and a Happy Valley theme park on a plot of land located at both sides of Shaxi Line of Outer Sanhuan Road of the Jinniu District in Chengdu City in the Sichuan Province of the PRC

“close associate(s)” has the meaning ascribed to it under the Listing Rules “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” completion of the Disposal pursuant to the Transfer Agreements “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 “Debt” the debt owed by the Target Company to Bantix International in the amount of RMB160,364,475.51, being the unpaid dividends accrued up to 14 August 2020

“Debt Interest Consideration” the consideration for the assignment of the Debt in the sum of RMB160,364,475.51 pursuant to the Debt Transfer Agreement

“Debt Transfer Agreement” a debt transfer agreement entered into on 4 September 2020, amongst Bantix International, OCT Chengdu Investment and the Target Company in respect of the assignment of the Debt from Bantix International to OCT Chengdu Investment

“Directors”

the directors of the Company

DEFINITIONS

“Disposal”	the disposal of the Equity Interest in the Target Company pursuant
	to the Equity Transfer Agreement and the assignment of the Debt
	from Bantix International to OCT Chengdu Investment pursuant to
	the Debt Transfer Agreement
“EGM”	the extraordinary general meeting of the Company to be convened
	for approving the Disposal
“Equity Interest”	the 50.99% equity interests in the Target Company to be disposed
	by Bantix International to OCT Chengdu Investment pursuant to the
	Equity Transfer Agreement
“Equity Interest Consideration”	the consideration for the sale of the Equity Interest in the sum of
	RMB1,092,103,600 pursuant to the Equity Transfer Agreement
“Equity Transfer Agreement”	an equity transfer agreement entered into on 4 September 2020,
	amongst Bantix International, OCT Chengdu Investment and the
	Target Company in respect of the transfer of the Equity Interest
“Group”	the Company and its subsidiaries as at the Latest Practicable Date

“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 Board Committee”
the independent committee of the Board, comprising all the independent non-executive Directors, Ms. Wong Wai Ling, Professor Lam Sing Kwong Simon and Mr. Chu Wing Yiu, established for the purpose of making recommendations to the Independent Shareholders in respect of the Disposal
“Independent Financial Adviser” or “Opus Capital”
Opus Capital Limited, a corporation licensed under the SFO to conduct Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities, being the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Disposal
“Independent Shareholders” the Shareholders other than Pacific Climax and its associates who are not required to abstain from voting on resolutions approving the Disposal
“Independent Valuer”
Cushman & Wakefield Limited, an independent registered professional surveyor
“Latest Practicable Date” 24 September 2020, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular
3 -

DEFINITIONS

“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“normal commercial terms or	has the meaning ascribed to it under the Listing Rules
better”
“OCT Chengdu Investment”	華僑城（成都）投資有限公司(OCT (Chengdu) Investment Co.,
	Ltd.), a company established in the PRC and a wholly-owned
	subsidiary of OCT Ltd.
“OCT Group”	華僑城集團有限公司(Overseas Chinese Town Company Limited),
	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 Investments”	OCT Investments Limited, a company incorporated in the British
	Virgin Islands, and a wholly owned subsidiary of the Company
“OCT Ltd.”	深圳華僑城股份有限公司(Shenzhen Overseas Chinese Town
	Company Limited), a company established in the PRC, the shares
	of which are listed on the Shenzhen Stock Exchange
“OCT Real Estate”	深圳華僑城房地產有限公司(Shenzhen Overseas Chinese Town
	Real Estate Company Limited), a company established in the PRC
“Pacific Climax”	Pacific Climax Limited, a company incorporated in the British
	Virgin Islands with limited liability, which is a controlling
	shareholder of the Company
“Parties”	Bantix International, OCT Chengdu Investment and the Target
	Company, being the parties to the Transfer Agreements
“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
“Remaining Group”	the Group after completion of the Disposal
“RMB”	Renminbi, the lawful currency of the PRC
“SASAC”	The State-owned Assets Supervision and Administration
	Commission of the State Council
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong), as amended from time to time

DEFINITIONS

“Share(s)”	the share(s) of the Company
“Shareholder(s)”	the shareholder(s) of the Company
“sq.m.”	square metres
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“subsidiary(ies)”	has the meaning ascribed to it under the Listing Rules
“substantial shareholders”	has the meaning ascribed to it under the Listing Rules
“Target Company”	成都天府華僑城實業發展有限公司 (Chengdu	Tianfu	OCT
	Industry Development Co., Ltd.), a company established		under
	the laws of the PRC with limited liability
“Target Group”	the Target Company and its subsidiaries
“Transfer Agreements”	the Equity Transfer Agreement and the Debt Transfer Agreement
“United States”	United States of America
“US$”	United States dollar(s), the lawful currency of the	United States
“%”	per cent

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

LETTER FROM THE BOARD

Overseas Chinese Town (Asia) Holdings Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03366)

Executive Directors: Registered Office: Mr. Zhang Dafan (Chairman) Clifton House Ms. Xie Mei (Chief Executive Officer) 75 Fort Street Mr. Lin Kaihua PO Box 1350 GT George Town Non-executive Director: Grand Cayman Mr. Wang Wenjin Cayman Islands

Independent Non-executive Directors: Head office and principal place of Ms. Wong Wai Ling business in Hong Kong: Professor Lam Sing Kwong Simon 59/F., Bank of China Tower Mr. Chu Wing Yiu 1 Garden Road Hong Kong

30 September 2020

To the Shareholders

Dear Sir or Madam,

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF 50.99% OF EQUITY INTEREST AND ASSIGNMENT OF DEBT IN THE TARGET COMPANY

INTRODUCTION

Reference is made to the announcement of the Company dated 4 September 2020 in relation to a very substantial disposal and connected transaction regarding the disposal of 50.99% of equity interest and assignment of debt in the Target Company.

The purpose of this circular is to provide you with, among other things, (i) details of the Transfer Agreements and the Disposal; (ii) financial information of the Group; (iii) financial information of the Target Group; (iv) the unaudited pro forma financial information of the Remaining Group; (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.

LETTER FROM THE BOARD

On 4 September 2020 (after trading hours), Bantix International, an indirect wholly-owned subsidiary of the Company, entered into the Equity Transfer Agreement with OCT Chengdu Investment and the Target Company, pursuant to which Bantix International has conditionally agreed to sell, and OCT Chengdu Investment has conditionally agreed to acquire, the Equity Interest (being 50.99% of the equity interest in the Target Company beneficially owned by Bantix International) at the Equity Interest Consideration of RMB1,092,103,600. As a condition precedent to the Equity Transfer Agreement, the Parties also entered into the Debt Transfer Agreement, pursuant to which OCT Chengdu Investment has conditionally agreed to take up an assignment of the Debt of RMB160,364,475.51 owed by the Target Company to Bantix International at the Debt Interest Consideration of RMB160,364,475.51. The aggregate value of the consideration, being the sum of the Equity Interest Consideration and the Debt Interest Consideration, is RMB1,252,468,075.51.

Upon Completion, the Group will not hold any interest in the Target Group and the Target Group will cease to be the subsidiaries of the Company.

EQUITY TRANSFER AGREEMENT

The principal terms of the Equity Transfer Agreement are as follows:

Date

4 September 2020

Parties

(1) Bantix International, an indirect wholly-owned subsidiary of the Company, as vendor;
(2) OCT Chengdu Investment, as purchaser; and
(3) the Target Company.

Assets to be disposed

Pursuant to the terms of the Equity Transfer Agreement, Bantix International has conditionally agreed to sell, and OCT Chengdu Investment has conditionally agreed to acquire, the Equity Interest (being 50.99% of the equity interest in the Target Company beneficially owned by Bantix International) at the Equity Interest Consideration of RMB1,092,103,600.

For further information of the Target Company, please refer to the section headed “Information of the Target Company” in this letter below.

LETTER FROM THE BOARD

Payment of the Equity Interest Consideration

The Equity Interest Consideration shall be satisfied by OCT Chengdu Investment in the following manner:

(1) 50% of the Equity Interest Consideration shall be paid into a bank account designated by Bantix International within one (1) month from the effective date of the Equity Transfer Agreement; and
(2) the remaining 50% of the Equity Interest Consideration shall be paid into a bank account designated by Bantix International within three (3) months from the effective date of the Equity Transfer Agreement.

OCT Chengdu Investment shall pay a penalty at a rate of 0.02% per day of the due Equity Interest Consideration from the date when delay of payment has taken place. However, if such delay was due to the relevant state policy of the PRC, Bantix International may extend the due date of payment of the Equity Interest Consideration.

The Equity Interest Consideration was determined after arm’s length negotiations between Bantix International and OCT Chengdu Investment, and was determined with reference to, among others, (i) the value of the Equity Interest of approximately RMB1,085,067,200 (the “ Appraised Value ”), which is derived based on 50.99% of the preliminary appraised value of the entire equity interest in the Target Company as at 30 June 2020 by the Independent Valuer of RMB2,128,000,000 by using asset-based approach; (ii) the reasons for and benefits of the Disposal as stated in the section headed “Reasons for and benefits of the Disposal” in this letter; (iii) the financial position and performance of the Target Group; and (iv) the future prospects of the Chengdu OCT Project. For further information of the Chengdu OCT Project, please refer to the section headed “Information of the Target Company” in this letter. Considering: (i) Chengdu OCT Project has entered into the final stage of sale of the remaining saleable properties and car parking spaces; and (ii) the Target Company had a net loss after tax of approximately RMB66,196,000 for the six months ended 30 June 2020, the Parties, after arm’s length negotiations, agreed to add a premium of approximately RMB7,000,000 to the Appraised Value.

As regards the Appraised Value, the Independent Valuer has adopted the book value of two associates and one joint venture company that are all non-wholly owned by the Target Company for valuation. Having considered that these companies are insignificant to the Target Group in terms of total assets and there were no material changes in the book value of these companies, the Directors are of the view that the Equity Interest Consideration, which is determined with reference to, among others, the Appraised Value, is fair and reasonable. For details, please refer to page V-10 of this circular.

Completion

The date of Completion shall be the date of completion of the registration procedures for the transfer of the Equity Interest (the “ Registration ”) at the relevant registration, recordation and administration authority in the PRC. It will usually take approximately one month to complete the Registration. Bantix International shall, within five days of the effective date of the Equity Transfer Agreement, cooperate with OCT Chengdu Investment and the Target Company to attend to the Registration.

LETTER FROM THE BOARD

Conditions precedent

The Equity Transfer Agreement shall take effect upon the satisfaction of the following conditions:

(1) the Equity Transfer Agreement having been duly signed by the Parties;
(2) the Company having obtained all necessary approval, authorisations, consents and permit, and completed all relevant procedures in accordance with the Listing Rules and other applicable laws and regulations (including but not limited to the Independent Shareholders’ approval at the EGM);
(3) the Parties having entered into the Debt Transfer Agreement; and
(4) the transactions contemplated under the Equity Transfer Agreement having been approved by the relevant state-owned assets supervision and administration department or entity in the PRC.

No Party shall have the right to waive any of the above conditions. As at the Latest Practicable Date, the above conditions (1) and (3) had been satisfied.

Considering, among others, (i) the terms of the Equity Transfer Agreement and the usual time required for Registration in the PRC, 50% of the Equity Transfer Consideration expected to be paid to the Group before or at around the same time as Completion; (ii) the Equity Transfer Agreement containing penalty clause for delay in payment of Equity Transfer Consideration by OCT Chengdu Investment; and (iii) the background and status of OCT Chengdu Investment, in particular the fact that OCT Chengdu Investment is a state-owned enterprise and is wholly-owned by the Company’s controlling shareholder, the Directors believe that the settlement and completion mechanism of the Equity Transfer Agreement is sufficient to safeguard the Company’s assets and ensure the receipt of the full amount of the Equity Interest Consideration.

DEBT TRANSFER AGREEMENT

The principal terms of the Debt Transfer Agreement are as follows:

Date

4 September 2020

Parties

(1) Bantix International, an indirect wholly-owned subsidiary of the Company, as assignor;
(2) OCT Chengdu Investment, as assignee; and
(3) the Target Company.
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LETTER FROM THE BOARD

Debt to be assigned

Pursuant to the terms of the Debt Transfer Agreement, OCT Chengdu Investment has conditionally agreed to take up an assignment of the Debt, being the unpaid dividends accrued up to 14 August 2020 in the amount of RMB160,364,475.51, owed by the Target Company to Bantix International.

The Debt Interest Consideration of RMB160,364,475.51 represents the total amount of the Debt.

Payment of the Debt Interest Consideration

The Debt Interest Consideration shall be satisfied by OCT Chengdu Investment in the following manner:

(1) 50% of the Debt Interest Consideration shall be paid into a bank account designated by Bantix International within one (1) month from the effective date of the Debt Transfer Agreement; and
(2) the remaining 50% of the Debt Interest Consideration shall be paid into a bank account designated by Bantix International within three (3) months from the effective date of the Debt Transfer Agreement.

Conditions precedent

The Debt Transfer Agreement shall take effect upon the satisfaction of the following conditions:

(1) the Debt Transfer Agreement having been duly signed by the Parties; and
(2) the Company having obtained all necessary approval, authorisations, consents and permit, and completed all relevant procedures in accordance with the Listing Rules and other applicable laws and regulations (including but not limited to the Independent Shareholders’ approval at the EGM).

No Party shall have the right to waive any of the above conditions. As at the Latest Practicable Date, the above condition (1) had been satisfied.

INFORMATION OF THE GROUP AND BANTIX INTERNATIONAL

Bantix International is a wholly-owned subsidiary of the Company. The principal business activity of Bantix International is investment holding. The Group is principally engaged in the comprehensive development business (including the development and operation of tourism theme park, development and sale of residential properties, construction contract, development and management of properties, and property investment) and investment in the new urbanisation industrial ecosphere business.

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LETTER FROM THE BOARD

INFORMATION OF OCT CHENGDU INVESTMENT

OCT Chengdu Investment is a company established in the PRC, which is an indirect wholly-owned subsidiary of OCT Ltd. and is beneficially owned by the SASAC. It is principally engaged in real estate development and operation, and tourism services business.

OCT Ltd. is a public company listed on the Shenzhen Stock Exchange, and is governed by the Rules Governing the Listing of Shares on Shenzhen Stock Exchange and the relevant rules and regulations in the PRC. It is principally engaged in cultural tourism and real estate business. OCT Group is the holding company of OCT Ltd..

INFORMATION OF THE TARGET COMPANY

The Group had first acquired 25% interest in the Target Company through the acquisition of 49% and 51% interest in OCT Investments and the respective shareholders' loans owed by OCT Investments to OCT (HK) from OCT (HK), the holding company of Pacific Climax, at an aggregate consideration of HK$310,000,000 (the “ Previous Acquisitions ”). At the time of the Previous Acquisitions, OCT Investments held 100% interest in Bantix International and the sole asset of Bantix International was 25% equity interest in the Target Company. In September 2010, Bantix International had increased its interest in the Target Company from 25% to approximately 50.99% by solely contributing RMB588,000,000 into the Target Company pursuant to a capital increase agreement dated 9 April 2010 entered into amongst Bantix International, OCT Real Estate and OCT Ltd..

The Target Company is a company with limited liability established in the PRC with a total registered capital of RMB1,500,000,000, which has been fully paid-up. The equity holding of the Target Company as at the Latest Practicable Date and before Completion, are set out below:

Shareholders Bantix International OCT Real Estate OCT Ltd. Total:	Registered capital (RMB) 764,880,000 372,224,000 362,896,000 1,500,000,000	Approximate percentage of equity holding (%) 50.99 24.81 24.20
		100%

The Target Company is principally engaged in tourism and real estate development business, which includes the Chengdu OCT Project. Chengdu OCT Project is a large comprehensive development project located at both sides of Shaxi Line of Outer Sanhuan Road of the Jinniu District in Chengdu City in the Sichuan Province, and comprises a premium residential community, urban entertainment, commercial complex and a Happy Valley theme park, with a total site area of approximately 1,827,000 sq.m. and a total gross floor area of approximately 2,250,000 sq.m. As at the Latest Practicable Date, the Target Company had launched the final phase of the sale of the remaining saleable properties and car parking spaces under

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LETTER FROM THE BOARD

the Chengdu OCT Project, and there were only a few properties left for sale including multi-storey villas and residential properties with a total area of approximately 54,600 sq.m., high-end shops with a total area of approximately 6,600 sq.m. and parking lots with a total area of approximately 25,900 sq.m. The total gross floor area of the rentable commercial properties which had been completed between 2009 and 2019 is approximately 123,600 sq.m., such as ground floor shops, shops located in the pure waterfront street district and the square park, east coast clubhouse, and Hake Children Centre. In 2019, the contracted sales area and amount reached approximately 89,400 sq.m. and approximately RMB1,594 million, respectively, while the settled area and amount were approximately 55,400 sq.m. and approximately RMB1,036 million, respectively. The rentable area for commercial use was approximately 125,400 sq.m., of which approximately 96% had been leased. Chengdu Happy Valley had attracted approximately 3.27 million visitors during the year and achieved a revenue of approximately RMB261 million for the year ended 31 December 2019.

Financial information of the Target Group

Set out below is a summary of the consolidated financial information of the Target Group for the years ended 31 December 2018 and 31 December 2019, and the six months ended 30 June 2020, respectively, prepared in accordance with the Hong Kong Financial Reporting Standards:

	For the year ended	For the year ended	For the six months
	31 December		ended 30 June
	2018	2019	2020
	RMB	RMB	RMB
Revenue	654,018,000	1,383,753,000	213,710,000
Net Profit/(Loss) before tax	246,529,000	303,128,000	(39,961,000)
Net Profit/(Loss) after tax	90,680,000	(18,777,000)	(66,196,000)
	As at 31 December		As at 30 June
	2018	2019	2020
	RMB	RMB	RMB
Net assets attributable to owners	2,416,927,000	2,306,953,000	1,646,054,000

FINANCIAL EFFECTS OF THE DISPOSAL AND USE OF PROCEEDS

Upon Completion, the Group will not hold any interest in the Target Group and 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.

Earnings

It is expected that the Group will realise gain on the Disposal of approximately RMB233,348,181, which is calculated based on (i) the Equity Interest Consideration; (ii) the Debt Interest Consideration; (iii) the net asset of the Target Company as at 30 June 2020; and (iv) the estimated expenses in connection with the Disposal.

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LETTER FROM THE BOARD

Assets and Liabilities

The assets and liabilities of the Group are estimated to be decreased by approximately RMB3,930.62 million and decreased by approximately RMB3,356.54 million respectively after the Disposal. The estimated decrease 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 30 June 2020, assuming the Disposal took place on 30 June 2020, and the estimate net proceeds, tax provision and re-allocation of the loan to the Target Group arisen from the Disposal.

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.

Moreover, taking into account that the Equity Interest Consideration is determined based on the disposal of 50.99% of the issued share capital of the Target Company instead of the properties themselves, the excess of the Equity Interest Consideration over 50.99% of the net book value of the Target Company will amount to approximately RMB245,743,820.

Shareholders should note that the financial effects are shown for reference only and the actual amount of gain or loss as a result of the Disposal will be assessed based on the financial position of the Target Company as at Completion, and eventually be recognised in the audited consolidated financial statements of the Company.

Upon Completion, the net proceeds of the Disposal will be approximately RMB1,073,397,261 (after deducting the relevant tax expenses, and the relevant professional fees and does not include the Debt Interest Consideration). The Board intends to apply the net proceeds from the Disposal in the following ways: (i) approximately RMB100,000,000 as general working capital; (ii) the remaining portion for investment. The Group has all along been actively seeking investment opportunities and has identified certain potential investment targets, which includes an industry fund in the technology industry and an urbanisation project in Yangtze Delta Region, with a view to obtaining resources and projects with potential; 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.

EFFECT OF THE FINANCE LEASE AGREEMENT ENTERED INTO BY THE TARGET COMPANY ON THE DISPOSAL

As disclosed in the announcement of the Company dated 13 August 2020, the Target Company (as lessee) has entered into a finance lease agreement (the “ Finance Lease Agreement ”) with CMB Financial Leasing Co., Ltd. (as lessor, “ CMB Financial Leasing ”). Pursuant to the Finance Lease Agreement, CMB Financial Leasing conditionally agreed to purchase certain amusement and ancillary facilities (such as roller coaster and waterpark facilities) (the “ Leased Assets ”) used in Chengdu Happy Valley currently owned by the Target Company, at the purchase consideration of RMB500,000,000.00. Following the acquisition, CMB Financial Leasing conditionally agreed to lease the Leased Assets to the Target Company, for a lease term of 36 months at an aggregate estimated lease payment of approximately RMB549,401,142.48. Upon expiry of the said lease term, the Target Company shall purchase the Leased Assets at the repurchase consideration of RMB1.00.

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LETTER FROM THE BOARD

As: (i) the obligations under the Finance Lease Agreement are to be performed by the Target Company; and (ii) no guarantee or undertaking is required to be given by the Group, the Finance Lease Agreement therefore has no effect on the Disposal.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Chengdu OCT Project has currently entered into the final stage of sales of the remaining saleable properties and car parking spaces. Due to the impact of the real estate regulatory policies, the destocking of remaining properties slowed down. As the Group is developing its existing comprehensive development business and accelerating the development of its equity investment and fund management businesses, the Disposal, which revitalises the Group’s remnant assets and accelerates cash turnover, meets the strategic and operational needs of the Group by providing the necessary capital for the Group to develop its businesses. The net proceeds obtained from the Disposal will be applied in potential projects, so as to optimise resource allocation. Details of the use of proceeds are set out in the section headed “Financial effects of the Disposal and use of proceeds” above.

The Directors (including the independent non-executive Directors) are of the opinion that the terms of the Transfer Agreements (including the Equity Interest Consideration and the Debt Interest Consideration) and the Disposal are on normal commercial terms or better, and are fair and reasonable, and the Disposal is in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

As the highest applicable percentage ratio calculated pursuant to Chapter 14 of the Listing Rules in respect of the Disposal exceeds 75%, the Disposal, if materialised, will constitute a very substantial disposal of the Company under Chapter 14 of the Listing Rules.

Pacific Climax is a controlling shareholder of the Company, which, as at the Latest Practicable Date, held approximately 70.94% of the total issued share capital of the Company, and is indirectly wholly owned by OCT Ltd.. As OCT Chengdu Investment is directly wholly owned by OCT Ltd., OCT Chengdu Investment is therefore a connected person of the Company pursuant to Chapter 14A of the Listing Rules. Accordingly, the Disposal also constitutes a connected transaction of the Company and is subject to the relevant reporting, announcement, circular and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

Mr. Zhang Dafan, the chairman of the Board, who also acts as the executive director of OCT Chengdu Investment, is considered to have a material interest in the Disposal. Mr. Zhang Dafan has abstained from voting on the resolutions in relation to the Transfer Agreements proposed to the Board. Save as disclosed above, none of the Directors attended the Board meeting has a material interest in the Disposal.

EGM

At the EGM, a resolution will be proposed by the Company to seek the Independent Shareholders’ approval on the Transfer Agreements and the transactions contemplated thereunder. Pacific Climax and its associates, which in aggregate, held 530,894,000 Shares, being approximately 70.94% of the total issued

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LETTER FROM THE BOARD

share capital of the Company as at the Latest Practicable Date, will abstain from voting for the resolution regarding the Disposal at the EGM. The proposed resolution will be passed by way of ordinary resolution and voted on by way of poll in accordance with the requirement of the Listing Rules.

RECOMMENDATION

The Board confirms that the terms of the Transfer Agreements are on normal commercial terms or better, and are fair and reasonable, and the Disposal is in the interests of the Company and Shareholders as a whole. Therefore, the Directors recommend the Independent Shareholders to vote in favour of the relevant resolution to be proposed at the EGM.

ADDITIONAL INFORMATION

Your attention is also drawn to the letter from the Independent Board Committee set out on pages 16 and 17 of this circular, and the letter from Opus Capital to the Independent Board Committee and Independent Shareholders set out on pages 18 to 46 of this circular and the information set out in the appendices to this circular.

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

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of a letter from the Independent Board Committee setting out its recommendation to the Independent Shareholders in respect of the Disposal for the purpose of inclusion in this circular.

Overseas Chinese Town (Asia) Holdings Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03366)

30 September 2020

To the Independent Shareholders,

Dear Sir or Madam,

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF 50.99% OF EQUITY INTEREST AND ASSIGNMENT OF DEBT IN THE TARGET COMPANY

We refer to the circular of the Company dated 30 September 2020 (the “Circular ”), of which this letter forms part. Capitalised terms used herein have the same meanings as those defined in the Circular unless the context otherwise requires.

We have been appointed as members of the Independent Board Committee to consider the terms of the Transfer Agreements and the transactions contemplated thereunder and to advise you as to whether, in our opinion, the terms of the Transfer Agreements are on normal commercial terms or better, and are fair and reasonable so far as the Independent Shareholders are concerned, and the Disposal is conducted in the ordinary and usual course of business of the Group and is in the interests of the Company and the Shareholders as a whole.

Opus Capital has been appointed as the Independent Financial Adviser to advise us and you regarding the terms of the Transfer Agreements and the Disposal. Details of its advice, together with the principal factors and reasons it has taken into consideration in giving its advice, are contained in its letter set out on pages 18 to 46 of the Circular. Your attention is also drawn to the letter from the Board and the additional information set out in the appendices to the Circular.

Having considered the terms of the Transfer Agreements and the transactions contemplated thereunder and the advice from Opus Capital, we consider that the terms of the Transfer Agreements are on normal commercial terms or better, and are fair and reasonable so far as the Independent Shareholders are concerned, and the Disposal is conducted in the ordinary and usual course of business of the Group and is in

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Transfer Agreements and the transactions contemplated thereunder.

Yours faithfully,

Independent Board Committee of

Wong Wai Ling

Overseas Chinese Town (Asia) Holdings Limited Lam Sing Kwong Simon Independent non-executive Directors

Chu Wing Yiu

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Set out below is the text of a letter from Opus Capital, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Disposal, for the purpose of inclusion in this circular.

==> picture [249 x 45] intentionally omitted <==

18th Floor, Fung House 19-20 Connaught Road Central Central, Hong Kong

30 September 2020

To: the Independent Board Committee and the Independent Shareholders of Overseas Chinese Town (Asia) Holdings Limited

Dear Sirs or Madams,

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF 50.99% OF EQUITY INTEREST AND ASSIGNMENT OF DEBT IN THE TARGET COMPANY

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Disposal, details of which are set out in the letter from the Board (the “ Letter from the Board ”) contained in the circular dated 30 September 2020 (the “ Circular ”), of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular unless the context requires otherwise.

As at the Latest Practicable Date, Pacific Climax was a controlling shareholder of the Company, which held approximately 70.94% of the total issued share capital of the Company, and was indirectly wholly owned by OCT Ltd. As OCT Chengdu Investment is directly wholly owned by OCT Ltd. As OCT Chengdu Investment is directly wholly owned by Oct Ltd., OCT Chengdu Investment is a connected person

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

of the Company pursuant to Chapter 14A of the Listing Rules. Accordingly, the Disposal also constitutes a connected transaction of the Company and is subject to the relevant reporting, announcement, circular and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

Mr. Zhang Dafan, the chairman of the Board, who also acts as the executive director of OCT Chengdu Investment, is considered to have a material interest in the Disposal. Mr. Zhang Dafan has abstained from voting on the resolution in relation to the Disposal proposed to the Board. Save as disclosed above, none of the Directors attended the Board meeting has a material interest in the Disposal.

The EGM will be convened for the Independent Shareholders to consider and, if thought fit, to approve the Transfer Agreements and the transactions contemplated thereunder. In view of OCT Ltd.’s interests in the Disposal, Pacific Climax and its associates, which in aggregate, held 530,894,000 Shares, being approximately 70.94% of the total issued share capital of the Company as at the Latest Practicable Date, will abstain from voting from voting on the relevant resolution to be proposed at the EGM to approve the Transfer Agreements and the transactions contemplated thereunder.

THE INDEPENDENT BOARD COMMITTEE

The Independent Board Committee, comprising all the independent non-executive Directors, namely Ms. Wong Wai Ling, Professor Lam Sing Kwong Simon and Mr. Chu Wing Yiu, has been formed to consider whether the entering into the Transfer Agreements and the transactions contemplated thereunder is in the ordinary and usual course of business of the Group and in the interests of the Company and the Independent Shareholders as a whole, whether the terms of the Transfer Agreements and the transactions contemplated thereunder are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned, and to make recommendations to the Independent Shareholders in respect of the voting on the relevant resolution to be proposed at the EGM to approve the Transfer Agreements and the transactions contemplated thereunder. We, Opus Capital, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in the same regard.

OUR INDEPENDENCE

As at the Latest Practicable Date, we do not have any relationship with, or interest in, the Group, OCT Chengdu Investment or other parties that could reasonably be regarded as relevant to our independence. Apart from the normal professional fees paid or payable to us in connection with the current appointment as the Independent Financial Adviser, no arrangements exist whereby we had received or will receive any fees or benefits from the Company, OCT Chengdu Investment or other parties that could reasonably be regarded as relevant to our independence. Accordingly, we consider that we are independent pursuant to Rule 13.84 of the Listing Rules.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

BASIS OF OUR OPINION

In formulating our advice and recommendation to the Independent Board Committee and the Independent Shareholders, we have reviewed, amongst other things:

(i) the Company’s annual report (the “ 2019 Annual Report ”) for the year ended 31 December (“ FY ”) 2019 published on 5 May 2020;
(ii) the Company’s interim report (the “ 2020 Interim Report ”) for the six months ended 30 June (“ 1H ”) 2020 published on 17 September 2020;
(iii) the unaudited financial information of the Target Company as set out in Appendix II to the Circular;
(iv) the unaudited pro forma financial information of the Remaining Group as set out in Appendix III to the Circular;
(v) the property valuation report issued by the Independent Valuer on the property interests held by the Target Company as set out in Appendix IV to the Circular (the “ Property Valuation Report ”);
(vi) the business valuation report issued by the Independent Valuer on the valuation of the entire equity interest of the Target Company as set out in Appendix V to the Circular (the “Business Valuation Report ”);
(vii) the valuation working papers and supporting documents as provided by the Independent Valuer;
(viii) the Equity Transfer Agreement;
(ix) the Debt Transfer Agreement; and
(x) other information as set out in the Circular.

We have relied on the truth, accuracy and completeness of the statements, information, opinions and representations contained or referred to in the Circular and the information and representations made to us by the Company, the Directors and the management of the Company (collectively, the “ Management ”). We have assumed that all information and representations contained or referred to in the Circular and provided to us by the Management, for which they are solely and wholly responsible, are true, accurate and complete in all respects and not misleading or deceptive at the time when they were provided or made and will continue to be so up to the Latest Practicable Date. Shareholders will be notified of material changes as soon as possible, if any, to the information and representations provided and made to us after the Latest Practicable Date and up to and including the date of the EGM.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We have also assumed that all statements of belief, opinion, expectation and intention made by the Management in the Circular were reasonably made after due enquiries and careful consideration and there are no other facts not contained in the Circular, the omission of which make any such statement contained in the Circular misleading. We have no reason to suspect that any relevant information has been withheld, or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Management, which have been provided to us.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. However, we have not carried out any independent verification of the information provided by the Management, nor have we conducted any independent investigation into the business, financial conditions and affairs of the Group or its future prospects. We also have not considered the taxation implication on the Group as a result of the transactions contemplated under the Transfer Agreements.

The Directors jointly and severally accept full responsibility for the accuracy of the information disclosed and confirm, having made all reasonable enquiries that to the best of their knowledge and belief, there are no other facts not contained in this letter, the omission of which would make any statement herein misleading.

This letter is issued to the Independent Board Committee and the Independent Shareholders solely in connection for their consideration of the terms of the transactions contemplated under the Transfer Agreements, and except for its inclusion in the Circular, is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes without our prior written consent.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion and recommendation to the Independent Board Committee and the Independent Shareholders, we have taken into consideration, inter alia, the following principal factors and reasons:

1. Background information of the Group and Bantix International

Being OCT Group’s only offshore listed company and leveraging on OCT Group’s leading position in the culture and tourism industry, the Group is principally engaged in the comprehensive development business (the “ Comprehensive Development Business ”) (including the development and operation of tourism theme park, developed and sold residential properties, construction contract, development and management of properties, and property investment) and investment in the new urbanisation industrial ecosphere business.

Bantix International is a wholly-owned subsidiary of the Company. The principal business activity of Bantix International is investment holding.

The following table summarises the financial results of the Group for FY2018 and FY2019 as extracted from the 2019 Annual Report and 1H2019 and 1H2020 as extracted from the 2020 Interim Report:

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Table 1: Summarised financial results of the Group

	Unaudited	Unaudited	Audited	Audited
	1H2020	1H2019	FY2019	FY2018
	(RMB’000)	(RMB’000)	(RMB’000)	(RMB’000)
Revenue	343,510	310,840	2,071,903	1,984,952
Gross profit	20,522	39,125	765,729	644,043
Profit/(loss) for the year/period
attributable to the equity holders of
the Company	(55,652)	34,358	266,961	798,702

Sources: the 2019 Annual Report and the 2020 Interim Report

FY2019

As set out in the 2019 Annual Report, the Group recorded a revenue from continuing operations of approximately RMB2,071.9 million for FY2019, representing a year-on-year growth of approximately 30.7% when compared that of FY2018. The increase in the revenue was mainly attributable to the increase in saleable products of the Comprehensive Development Business, and in particular from the Chengdu OCT Project owned by the Target Company, as compared to the previous year. The sales revenue from the Chengdu OCT Project owned by the Target Company also yielded higher gross profit margins, which lifted the Group’s overall gross profit margin from the continuing operations for FY2019 from approximately 35.2% for FY2018 to approximately 37.0% for FY2019. The profit attributable to the equity holders of the Company for FY2019, however, amounted to approximately RMB267.0 million, representing a significant decrease of approximately RMB531.7 million or 66.6% compared to approximately RMB798.7 million for FY2018. As set out in the 2019 Annual Report, such decrease was primarily due to, among others, (i) the decrease in other net gains (which included, inter alia, gains arising from the disposal of subsidiaries/investments/ fixed assets and the net exchange gains) for FY2019 by approximately RMB142.9 million; (ii) the increase in finance costs for FY2019 by approximately RMB93.7 million; (iii) the decline in the share of profits from associates and joint ventures for FY2019 by approximately RMB350.3 million; and (iv) the increase in income tax for FY2019 by approximately RMB147.6 million of which a majority of the increase was related to provision for PRC land appreciation tax.

In terms of business segment performance, the profit attributable to the Comprehensive Development Business for FY2019 was approximately RMB108 million, representing a decrease of approximately 77.5% compared to that of FY2018, the substantial reduction in profit was mainly due to the significant decrease in profits of associates and joint ventures, in particular 成都保鑫泉盛房地產開發有限公司 (Chengdu Baoxin Quansheng Real Estate Development Company Limited) (“ Baoxin Quansheng ”) (which is held by the Target Company) and Capital Converge Holdings Limited. The profit attributable to the finance lease business for FY2019 was approximately RMB2.5 million, representing a decrease of approximately 42.7% compared to that of FY2018, the decrease mainly due to the increase in professional consultant fees. The business segment of the Group which contributed the most profit was the equity investment and fund business (the “ Investment and Fund Business* ”) which recorded a segment profit of approximately RMB150.7 million, representing an

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

increase of approximately 196.7% over that of FY2018. During FY2019, this segment generated significant investment returns from the partial disposal of the shares of Tianli Education International Holdings Limited.

1H2020

The Group recorded a revenue of approximately RMB343.5 million for 1H2020, representing an increase of approximately RMB32.7 million or 10.5% as compared to that of 1H2019. The increase in the revenue was mainly as a result of the increase in the sale of properties under Comprehensive Development Business of approximately RMB110.6 million, but offset by the decline in the sale of tickets of theme park of approximately RMB57.2 million and the decrease in the hotel revenue of approximately RMB25.5 million. During 1H2020, over 95% of the revenue was generated from the Comprehensive Development Business. The gross profit margin of the Group declined from approximately 12.6% for 1H2019 to approximately 6.0% for 1H2020. As disclosed in the 2020 Interim Report, such decline in the gross profit margin of the Group during 1H2020 was mainly due to: (i) the decrease in revenue of Shanghai Bvlgari Hotel; (ii) the operating expenses incurred at the initial stage of the launch of new projects; and (iii) the lower gross profit margin for new customers under the finance lease business of the Group. The Group recorded loss attributable to the equity holders of the Company of approximately RMB55.7 million for 1H2020, representing a substantial reduction in the profit compared to a profit attributable to the equity holders of the Company of approximately RMB34.4 million. As explained in the 2020 Interim Report, such significant reduction in profit attributable to the equity holders of the Company was mainly attributable to the impact of the COVID-19 pandemic (the “ Pandemic ”) on the operation of the hotel and culture tourism projects and the decrease in the share of profits of associates.

The following table summarises the financial position of the Group as at 31 December 2019 and as at 30 June 2020 as extracted from the 2020 Interim Report:

Table 2: Summarised financial position of the Group

	Unaudited	Audited
	As at	As at
	30 June	31 December
	2020	2019
	(RMB’000)	(RMB’000)
Non-current assets
– Investment property	5,245,832	5,285,739
– Other property, plant and equipment	1,962,893	2,017,431
– Interests in leasehold land held for own use	1,570,855	1,596,979
– Intangible assets	48,249	52,922
– Goodwill	570	570
– Interests in associates	5,473,588	5,410,696
– Interests in joint ventures	613,469	302,560
– Other financial assets	1,640,141	1,618,292
– Finance lease receivables	327,924	382,253

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

	Unaudited	Audited
	As at	As at
	30 June	31 December
	2020	2019
	(RMB’000)	(RMB’000)
– Trade and other receivables	1,623	1,623
– Deferred tax assets	209,948	222,012
Sub-total of non-current assets	17,095,092	16,891,077
Current assets
– Trading securities	–	118,480
– Inventories and other contract costs	8,749,170	5,767,090
– Finance lease receivables	110,375	117,206
– Trade and other receivables	548,928	880,060
– Cash at bank and on hand	2,769,270	2,681,489
Sub-total of current assets	12,177,743	9,564,325
Non-current liabilities	8,764,870	6,316,887
Current liabilities	6,878,242	7,219,067
Net asset value (“NAV”) attributable to the
equity holders of the Company	9,033,393	9,346,075

Source: the 2020 Interim Report

As at 30 June 2020, the total assets of the Group amounted to approximately RMB29.3 billion, representing an increase of approximately RMB 2.8 billion or 10.6% as compared of that as at 31 December 2019. The increase in the total assets was mainly attributable to the increase in the inventories and other contract costs balance by approximately RMB3.0 billion. The Group’s total assets were mainly made up of, among others, (i) inventories and other contract costs; (ii) interests in associates and joint ventures; (iii) investment property; and (iv) cash at bank and on hand. The total liabilities of the Group amounted to approximately RMB15.6 billion as at 30 June 2020, representing an increase of approximately 2.1 billion or 15.6% as compared to that as at 31 December 2019, such increment was mainly due to the increase in the related party loans of approximately RMB1.9 billion during 1H2020. The cash at bank and on hand increased slightly from approximately RMB2.7 billion as at 31 December 2019 to approximately RMB2.8 billion as at 30 June 2020. During 1H2020, the NAV attributable to the equity holders of the Company declined slightly from approximately RMB9.3 billion as at 31 December 2019 to approximately RMB9.0 billion as at 30 June 2020. The Group’s gearing ratio (being the total borrowings including bills payable and loans divided by total assets) was approximately 39.7% as at 30 June 2020, representing an increase of 5.4 percentage point as compared with approximately 34.3% as at 31 December 2019, mainly due to the increase in the amount of loans towards the end of 1H2020.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

2. Background information of OCT Ltd. and OCT Chengdu Investment

OCT Ltd. is a public company listed on the Shenzhen Stock Exchange (stock code: 000069), and is governed by the Rules Governing the Listing of Shares on Shenzhen Stock Exchange and the relevant rules and regulations in the PRC. It is principally engaged in cultural tourism and real estate business. OCT Group is the holding company of OCT Ltd. while OCT Ltd. is also an intermediary holding of the Company.

OCT Chengdu Investment is a company established in the PRC, which is an indirect wholly owned subsidiary of OCT Ltd. and beneficially owned by the SASAC. It principally engages in real estate development and operation, and tourism services business.

3. Background information of the Target Group

As disclosed in the Letter from the Board, the Group had first acquired 25% interest in the Target Company through the acquisition of 49% and 51% interest in OCT Investments and the respective shareholders’ loans owed by OCT Investments to OCT (HK) from OCT (HK), the holding company of Pacific Climax, at an aggregate consideration of HK$310,000,000 (the “ Previous Acquisitions ”). At the time of the Previous Acquisitions, OCT Investments held 100% interest in Bantix International and the sole asset of Bantix International was 25% equity interest in the Target Company. In September 2010, Bantix International had increased its interest in the Target Company from 25% to approximately 50.99% by solely contributing, RMB588,000,000 into the Target Company pursuant to a capital increase agreement dated 9 April 2010 entered into between Bantix International, OCT Real Estate and OCT Ltd..

Table 3: Equity holding structure of the Target Group

Shareholders Bantix International OCT Real Estate OCT Ltd. Total:	Registered capital (RMB’000) 764,880 372,224 362,896 1,500,000	Percentage of equity holding (%) 50.99 24.81 24.20
		100

Source: the Letter from the Board

As part of the Comprehensive Development Business of the Group, the Target Company is principally engaged in tourism and real estate development business, which mainly includes the Chengdu OCT Project. Chengdu OCT Project is a large comprehensive development project located at both sides of Shaxi Line of Outer Sanhuan Road of the Jinniu District in Chengdu City in the Sichuan Province, and comprises a premium residential community, urban entertainment, commercial complex and the Chengdu

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Happy Valley theme park, with a total site area of approximately 1,827,000 sq.m. and a total gross floor area (“ GFA ”) of approximately 2,250,000 sq.m. As at the Latest Practicable Date, the Target Company had launched the final phase of the sale of the remaining saleable properties and car parking spaces under the Chengdu OCT Project, and there were only a few properties left for sale including multi-storey villas and residential properties with a total area of approximately 54,600 sq.m., high-end shops with a total area of approximately 6,600 sq.m. and parking lots with a total area of approximately 25,900 sq.m. The total GFA of the rentable commercial properties which had been completed between 2009 and 2019 is approximately 123,600 sq.m., such as ground floor shops, shops located in the pure waterfront street district and the square park, east coast clubhouse, and Hake Children Centre. In 2019, the contracted sales area and amount reached approximately 89,400 sq.m. and approximately RMB1,594 million, respectively, while the settled area and amount were approximately 55,400 sq.m. and approximately RMB1,036 million, respectively. The rentable area for commercial use has approximately 125,400 sq.m., of which approximately 96% had been leased. The Chengdu Happy Valley theme park had attracted approximately 3.27 million visitors during FY2019 and achieved a revenue of approximately RMB261 million for FY2019.

Set out below is the discussion and analysis of the financial information of the Target Group for each of FY2017, FY2018, FY2019, 1H2019 and 1H2020 (the “ Financial Review Period ”):

(i) Financial performance

The following is an extract of the unaudited financial results of the Target Group during the Financial Review Period, prepared in accordance with the Hong Kong Financial Reporting Standards:

Table 4: Summarised financial results of the Target Group

	1H2020	1H2019	FY2019	FY2018	FY2017
	(RMB’000)	(RMB’000)	(RMB’000)	(RMB’000)	(RMB’000)
Revenue	213,710	160,464	1,383,753	654,018	1,397,369
Gross profit	26,538	16,671	563,042	172,177	564,562
Profit/(loss)
before
taxation	(39,961)	(83,653)	303,128	246,529	302,851
Profit/(loss) for
the year/
period
attributable to
the
shareholders
of the Target
Company	(66,196)	(127,499)	(18,777)	90,701	106,250

Source: Appendix II to the Circular

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

FY2018

During FY2018, the revenue of the Target Group plunged from approximately RMB1,397.4 million for FY2017 to approximately RMB654.0 million for FY2018, representing a drop of approximately 53.2%. The significant decrease was mainly attributable to the fall in the sale of properties of the Chengdu OCT Project from approximately RMB989.0 million for FY2017 to approximately RMB111.7 million for FY2018, representing a drop of approximately 88.7%. The cyclical decline of the sale of properties of the Chengdu OCT Project was due to the delayed granting of certificates of completion and acceptance by the local authorities. The sale of properties contributed approximately 78.1% of the total revenue of the Target Group for FY2017, but such contribution to the total revenue declined to approximately 19.4% for FY2018. The rest of the revenue for FY2018 was generated by the construction contracts business of approximately RMB151.3 million, the commercial leasing business of approximately RMB71.2 million and the tourism-related business of approximately RMB304.2 million.

While the revenue decreased significantly during FY2018, the income from the share of profit of associates and joint ventures recorded a surge of approximately RMB252.8 million from a loss of approximately RMB1.1 million for FY2017 to a gain of approximately RMB251.7 million for FY2018. As a result, the Target Group only recorded a slight decrease of profit attributable to the shareholders of the Target Company from approximately RMB106.3 million for FY2017 to approximately RMB90.7 million, representing a decrease of approximately 14.7%.

FY2019

With the regulatory approvals obtained from the local authorities in FY2019, the revenue of the Target Group bounced back to approximately RMB1,383.8 million for FY2019 from approximately RMB654.0 million for FY2018, representing a significant increase of approximately RMB729.8 million or 111.6%. The increase in the revenue of the Target Group was mainly attributable to the significant increase in the sale of properties of the Chengdu OCT Project of approximately RMB899.2 million while the revenue generated from the construction contracts business dropped from approximately RMB151.3 million for FY2018 to nil for FY2019. However, due to the significant surge in the income tax to approximately RMB321.9 million for FY2019, the Target Group recorded a loss attributable to the shareholders of the Target Company of approximately RMB18.8 million for FY2019. As advised by the Company, such significant increase in the income tax was attributable to the land appreciation tax incurred by the sale of the Chengdu OCT Project during the year.

1H2020

As compared to the revenue of the Target Group of approximately RMB160.5 million for 1H2019, the Target Group’s revenue for 1H2020 increased by approximately RMB53.2 million or 33.1% to approximately RMB213.7 million. Such increase was primarily attributable to the growth in the sale of residential properties of the Chengdu OCT Project by approximately RMB112.5 million which countered the drop in the revenue generated from the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

tourism-related business by approximately RMB56.6 million. As the Target Group still incurred various operating costs during 1H2020, the Target Group recorded a loss attributable to the shareholders of the Target Company of RMB66.2 million for 1H2020, representing a scale back of the loss of approximately 48.1% as compared to that of 1H2019.

(ii) Financial position

The following is an extract of the unaudited financial position of the Target Group as at 31 December 2019 and 30 June 2020, prepared in accordance with the Hong Kong Financial Reporting Standards.

Table 5: Summarised financial position of the Target Group

	As at	As at
	30 June	31 December
	2020	2019
	(RMB’000)	(RMB’000)
Non-current assets
– Investment property	1,265,054	1,248,056
– Other property, plant and equipment	956,148	991,096
– Interests in leasehold land held for own use	420,089	428,116
– Intangible assets	973	1,073
– Interests in associates	1,058,175	1,059,216
– Interests in joint ventures	282,193	279,174
– Trade and other receivables	1,623	1,623
– Finance lease receivables	22,283	22,959
– Deferred tax assets	113,856	155,651
Sub-total of non-current assets	4,120,394	4,186,964
Current assets
– Inventories and other contract costs	697,439	740,425
– Trade and other receivables	177,984	142,230
– Finance lease receivables	1,844	1,777
– Cash at bank and on hand	633,966	169,453
Sub-total of current assets	1,511,233	1,053,885
Non-current liabilities	542,499	47,659
Current liabilities	3,443,074	2,886,237
NAV attributable to the shareholders of the Target
Company	1,646,054	2,306,953

Source: Appendix II to the Circular

As at 30 June 2020, the total assets of the Target Group were approximately RMB5,631.6 million, increased by approximately RMB390.8 million or 7.5% compared to approximately RMB5,240.8 million as at 31 December 2019. The increase in the total assets was mainly attributable

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to the change in the current assets, as a result of the sale of properties of the Chengdu OCT Project which generated a significant increase in the cash at bank and on hand of the Target Group and the increase in the Target Group’s total liabilities to be discussed below.

The Target Group’s total liabilities were approximately RMB3,985.6 million as at 30 June 2020, representing an increase of approximately RMB1,051.7 million or 35.8% as compared to approximately RMB2,933.9 million as at 31 December 2019. Such increase was a result of, among others, (i) new bank and other loans of approximately RMB335.2 million; (ii) the increase in related party loans of approximately 524.4 million; and (iii) the increase in the trade and other payables of approximately RMB182.5 million.

The NAV attributable to the shareholders of the Target Company was approximately RMB1,646.1 million as at 30 June 2020, representing a decrease of approximately RMB660.9 million or 28.6% as compared to approximately RMB2,307.0 million as at 31 December 2019. The decrease in the NAV of the Target Group was mainly attributable to (i) the dividend approved during FY2019 of approximately RMB594.7 million deducted from the retained profits; and (ii) the loss attributable to the shareholders of the Target Company of approximately RMB66.2 million incurred during 1H2020.

4. Reasons for and benefits of the Disposal and use of proceeds

As disclosed in the Letter from the Board, the Chengdu OCT Project has currently entered into the final stage of sale of the remaining saleable properties and car parking spaces. Due to the impact of the real estate regulatory policies, the destocking of remaining properties slowed down. As the Group is developing its existing Comprehensive Development Business and accelerating the development of the Investment and Funds Business, the Disposal, which revitalises the Group’s remnant assets and accelerates cash turnover, meets the strategic and operational needs of the Group by providing the necessary capital for the Group to develop its businesses. The net proceeds obtained from the Disposal will be applied in potential projects, so as to optimise resources allocation.

We note the FY2020 is the fourth year the Group implemented what has been described as the “strategic transformation”. As set out in the 2019 Annual Report, through constant exits from investment projects, the business model cycle of “fundraising, investment, management and exit” (the “ Business Model Cycle ”) has been refined, so as to create a specialised investment group. It was also mentioned that 2020 marks the year for the Group to develop on a large scale to move toward “strategic transformation” in an allround manner. The Group will consolidate its strengths in the core businesses, establish remarkable investment capability, and strive to become a leading investment group with the core businesses of “culture, tourism, new urbanisation and industrial ecosphere investment” in the PRC. It is mentioned in the 2020 Interim Report that facing the more complex and changeable internal and external economic situation, the Group insists on advancing strategic transformation to transform and upgrade the Group with “culture, tourism, new urbanisation and industrial ecosphere investment” as its core business, exploring innovative development models in fields such as pan-tourism, pan-health, pan-technology and new urbanisation.

Upon Completion, the Company will not hold any interest in the Target Group and 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.

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With respect to new investment opportunities under the Comprehensive Development Business, the Company has announced during FY2019 a number of new high-quality strategic projects such as the Hefei OCT Bantang Hot Spring Town Project and the Hefei Airport International Town Project (first phase). On the other hand, under the Investment and Funds Business, the Company announced within the last two years the participations in the investments of, among others, Dongguan City OCT Lüwen Technology Investment Partnership (Limited Partnership), Xiamen OCT Runyu Investment Partnership (Limited Partnership) and Guangzhou Yueke Talent Entrepreneurship Investment Partnership (Limited Partnership). Likewise, the Group announced a number of disposals/exits of investments [(Note)] in recent years. These are all strong evidence of the Group adhering to the Business Model Cycle of “fundraising, investment, management and exit”.

Upon Completion, the net proceeds of the Disposal will be approximately RMB1,073,397,261 (after deducting the relevant tax expenses, and the relevant professional fees and does not include the Debt Interest Consideration). The Board intends to apply the net proceeds of the Disposal in the following ways: (i) as to approximately RMB100,000,000 for general working capital; (ii) as to the remaining portion for investment. The Group has all along been actively seeking investment opportunities and has identified certain potential investment targets, which include an industry fund in the technology industry and an urbanisation project in Yangtze Delta Region, with a view to obtaining resources and projects with potential; 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.

Based on the above, we are of the view that the Disposal is in line with the “strategic transformation” and Business Cycle Model of the Group and it is conducted in the ordinary and usual course of business of the Group.

5. Industry prospects

We have conducted an independent research on the tourism and real estate development industry in the PRC in understanding the Target Company’s industry performance.

The global outbreak of the Pandemic had significantly impacted the business of the Target Group as well as its industry for the first two quarters of 2020 as strict travel restrictions, airport closures and a range of quarantine and “social distancing” measures have been taken by governments globally. According to the Residential Report – Chengdu published in July 2020 by Savills (a leading global real estate services

Note: During the two years immediately prior to and including 4 September 2020, being the date of the Transfer Agreements, other notable disposals/exits announced by the Company included, among others, (a) the Company disposed of the 100% equity interest in 中山華力包裝有限公司 (Zhongshan Huali Packaging Co., Ltd.) as published in the announcements of the Company dated 25 October 2018, 23 November 2018, 27 December 2018; (b) the Company disposed of 51% equity interest in_ 成都天府華僑城湖濱商業管理有限公司 _(Chengdu Tianfu OCT Lakeside Business Management Co. Ltd.) as published in the announcement of the Company dated 24 December 2018; (c) the Company disposed of a block of 57,334,000 shares of Tianli Education International Holdings Limited (stock code: 1773) (“ Tianli Education ”) as published in the announcement of the Company dated 20 December 2019, which the cornerstone investment was announced by the Company on 26 June 2018, subsequently the Company disposed of another block of 42,666,000 shares in Tianli Education as disclosed in the announcement of the Company dated 3 January 2020; and (d) the Company disposed of an aggregate of 5,919,600 shares of Tongcheng-Elong Holdings Limited (stock code: 780) as disclosed in the announcement of the Company dated 28 August 2020.

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provider listed on the London Stock Exchange), during the second quarter of 2020, the average price of first hand residences in urban areas was approximately RMB19,700 per sq.m., representing a decrease of 7.5% quarter-on-quarter but an increase of 12.7% year-on year. The average price of residential land in suburban areas was approximately RMB7,900 per sq.m., decreased by 9.1% quarter-on-quarter but increased by 5.0% year-on-year. In the second quarter of 2020, the transaction volume of residential land in urban areas totalled 300,000 sq.m., representing an increase of 56.8% quarter-on-quarter, but a decrease by 26.7% year-on-year. It was reported by People’s Daily Online (a large scale information exchange platform established by People’s Daily, the largest national newspaper in the PRC) on 7 April 2020 that, it is estimated that in the first quarter of 2020 and the whole of 2020, the number of domestic tourist arrivals in the PRC will decrease by approximately 56.0% and 15.5% respectively as compared with the previous year. Similarly, it is estimated that in the first quarter of 2020 and the whole of 2020, the domestic tourism income will also decrease by approximately 69.0% and 20.6% respectively as compared with the previous year. As set out in the 2020 Interim Report, the Chengdu Happy Valley theme park and hotels of the Group were negatively affected by the Pandemic and their operating income fell sharply due to park closure during the Pandemic.

As a result of the Pandemic, the Ministry of Culture and Tourism of the PRC also issued《關於做好旅遊景區疫情防控和安全有序開放工作的通知》(“Notice on Prevention and Control of the Scenic Spot Outbreak and Safe and Orderly Opening Work”* on 13 April 2020, which stipulated that the number of tourists received by tourist scenic spots shall not exceed 30% of the maximum carrying capacity. As disclosed in the 2020 Interim Report, the Chengdu Happy Valley theme park and hotels of the Group were affected by the Pandemic and their operating income fell sharply. The park was closed during the Pandemic, and ticket revenue was greatly affected. According to the Global Attractions Attendance Report 2019 published by the Themed Entertainment (an international non-profit association founded in 1991 and encompasses over 1,600 members from businesses including theme parks, water parks, museums, zoos, casinos, resorts and hospitality, destination attractions) in 2020, it forecasts that the general market sentiment with the new health and safety measures, many attractions are predicted 30.0% to 50.0% of normal business volume for the second half of 2020. It may take one to several years to return to pre-Pandemic operating levels and the investment horizon of many owners may be altered due to cash flow loss. Given the current situation and the fact that the Target Group has recorded loss-making for FY2019 and 1H2020, the Directors are of the view that the Disposal will allow the Company to optimise and adjust its structure and to increase the liquidity of its assets, as well as allow the Company to improve the efficiency of the use of its assets and gain certain benefits therefrom.

Having considered that (i) the Target Group had been loss-making for FY2019 and 1H2020 and demonstrated a deteriorating financial performance in the last three financial years; (ii) the business prospects of the Target Group may not be optimistic due to the current global market condition, especially aggravated by the material adverse impact caused by the Pandemic; and (iii) the Disposal will improve the Group’s financial position and provide flexibility for its operations and potential business expansions through investment opportunities in areas such as cultural tourism, technology and new urbanisation, we concur with the Directors that the Disposal to be fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole.

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6. Principal terms of the Equity Transfer Agreement and the Debt Transfer Agreement

(A) Equity Transfer Agreement

The principal terms of the Equity Transfer Agreement are as follows:

Date 4 September 2020 Parties 1. Bantix International, an indirect wholly-owned subsidiary of the Company, as vendor;
1. OCT Chengdu Investment, as purchaser; and 3. the Target Company.

Assets to be disposed

Payment of the Equity Interest Consideration

The Equity Interest Consideration shall be satisfied by OCT Chengdu Investment in the following manner:

(i) 50% of the Equity Interest Consideration shall be paid to into a bank account designated by Bantix International within one (1) month from the effective date of the Equity Transfer Agreement; and
(ii) the remaining 50% of the Equity Interest Consideration shall be paid to into a bank account designated by Bantix International within three (3) months from the effective date of the Equity Transfer Agreement.

The Equity Interest Consideration was determined after arm’s length negotiations between Bantix International and OCT Chengdu Investment and was determined with reference to, among others, (i) the value of the Equity Interest of approximately RMB1,085,067,200 (the “ Appraised Value ”), which is derived based on 50.99% of the preliminary appraised value of the entire equity interest in the Target Company as at 30 June 2020 by the Independent Valuer of RMB2,128,000,000 by using asset-based approach; (ii) the reasons for and benefits of the

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Disposal as stated in the section headed “4. Reasons for and benefits of the Disposal and use of proceeds” in this letter above; (iii) the financial position and performance of the Target Group; and (iv) the future prospects of the Chengdu OCT Project. As discussed in the Letter from the Board, considering: (i) Chengdu OCT Project has entered into the final stage of sale of the remaining saleable properties and car parking spaces; and (ii) the Target Company had a net loss after tax of approximately RMB66,196,000 for 1H2020, the Parties, after arm’s length negotiations, agreed to add a premium of approximately RMB7,000,000 to the Appraised Value. Therefore, the Consideration RMB1,092,103,600 represents a premium of approximately over the Appraised Value of RMB1,085,067,200 of approximately 0.65%.

Completion

The date of Completion shall be the date of completion of the registration procedures for the transfer of the Equity Interest (the “Registration ”) at the relevant registration, recordation and administration authority in the PRC. It will usually take approximately one month to complete the Registration. Bantix International shall within five days of the effective date of the Equity Transfer Agreement, cooperate with OCT Chengdu Investment and the Target Company to attend to the Registration.

Conditions precedent

The Equity Transfer Agreement shall take effect upon the satisfaction of the following conditions:

(1) the Equity Transfer Agreement having been duly executed by the Parties;
(2) the Company having obtained all necessary approval, authorisations, consents and permit and completed all relevant procedures in accordance with the Listing Rules, and other applicable laws and regulations (including but not limited to the Independent Shareholders’ approval at the EGM);
(3) the Parties having entered into the Debt Transfer Agreement; and
(4) the transactions contemplated under the Equity Transfer Agreement having been approved by the relevant state-owned assets supervision and administration department or entity in the PRC.

No Party shall have the right to waive any of the above conditions. As at the Latest Practicable Date, the above conditions (1) and (3) had been satisfied.

As set out in the Letter from the Board, considering, among others, (i) the terms of the Equity Transfer Agreement and the usual time required for registration of equity transfers in the PRC, 50% of the Equity Transfer Consideration expected to be paid to the Group before or at around the same time as Completion; (ii) the Equity Transfer Agreement containing penalty clause for delay in payment of the Equity Transfer Consideration by OCT Chengdu Investment; and (iii) the background and status of OCT Chengdu Investment, in particular, the

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fact that OCT Chengdu Investment is a state-owned enterprise and is wholly-owned by the Company’s controlling shareholder, the Directors’ believe that the settlement and completion mechanism of the Equity Transfer Agreement is sufficient to safeguard the Company’s assets and ensure the receipt of the full amount of the Equity Interest Consideration.

(B) Debt Transfer Agreement

The principal terms of the Debt Transfer Agreement are as follows:

Date 4 September 2020 Parties 1. Bantix International, a wholly-owned subsidiary of the Company, as assignor;
OCT Chengdu Investment, as assignee; and
the Target Company.

Debt to be assigned

The Debt Interest Consideration of RMB160,364,475.51 represents the total amount of the Debt. We note that the Debt Interest Consideration was determined on a dollar-to-dollar basis which assignment of the Debt under the Debt Transfer Agreement simply means an assignment of the Debt from the Target Company to Bantix International on a dollar-to-dollar basis.

Payment of the Debt Interest Consideration

The Debt Interest Consideration shall be satisfied by OCT Chengdu Investment in the following manner:

(1) 50% of the Debt Interest Consideration shall be paid to into a bank account designated by Bantix International within one (1) month from the effective date of the Debt Transfer Agreement; and
(2) the remaining 50% of the Debt Interest Consideration shall be paid to into a bank account designated by Bantix International within three (3) months from the effective date of the Debt Transfer Agreement.
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Conditions precedent

The Debt Transfer Agreement shall take effect upon the satisfaction of the following conditions:

(1) the Debt Transfer Agreement having been duly signed by the Parties; and
(2) the Company having obtained all necessary approval, authorisations, consents and permit and completed all relevant procedures in accordance with the Listing Rules, and other applicable laws and regulations (including but not limited to the Independent Shareholders’ approval at the EGM).

No Party shall have the right to waive any of the above conditions. As at the Latest Practicable Date, the above condition (1) had been satisfied.

7. The Property Valuation and the Business Valuation

As discussed in the Letter from the Board, the Equity Interest Consideration was determined after arm’s length negotiations between Bantix International and OCT Chengdu Investment, and was determined with reference to, amongst others, the preliminary appraised value of the entire equity interest in the Target Company as at 30 June 2020 by the Independent Valuer of RMB2,128,000,000 by using asset-based approach. In the course of the business valuation of the Target Company, the Independent Valuer has adopted the appraised value of the properties held by the Target Company. The total appraised market value of the property interests attributable to the Target Company is approximately RMB3,877.5 million as at 30 June 2020.

The details of the property valuation and business valuation as at 30 June 2020 was prepared by the Independent Valuer. Details are set out in the Property Valuation Report and Business Valuation Report enclosed in Appendices IV and V to the Circular respectively. In performing the Property Valuation (as defined below), the Independent Valuer has complied with all the requirements in accordance with HKIS Valuation Standards 2017 published from time to time by The Hong Kong Institute of Surveyors (“ HKIS ”) and Chapter 5 and Practice Note 12 of the Listing Rules. In performing the Business Valuation (as defined below), the Independent Valuer has complied with all the requirements contained in the International Valuation Standards published from time to time by the International Valuation Standards Council.

We have reviewed the Property Valuation Report and the Business Valuation Report and the relevant valuation workings provided by the Independent Valuer and discussed with the relevant staff of the Independent Valuer with particular attention to, among others, (i) the Independent Valuer’s terms of engagement with the Company; (ii) the Independent Valuer’s qualification and experience in relation to the preparation of the Property Valuation (as defined below) and the Business Valuation (as defined below); and (iii) the steps and due diligence measures taken by the Independent Valuer in performing the Property Valuation (as defined below) and the Business Valuation (as defined below). For our review of the engagement letter between the Company and the Independent Valuer, we are satisfied that the terms of engagement between the Company and Independent Valuer are appropriate to the opinion the Independent Valuer is required to give. The Independent Valuer has confirmed that it is independent from the Company, the parties to the Disposal and their respective core connected persons, close associates and associates.

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Regarding the expertise of the Independent Valuer, we understand that the Independent Valuer is certified with the relevant professional qualifications required to perform the Property Valuation (as defined below) and the Business Valuation (as defined below). The person in-charge signing the Property Valuation Report has over 27 years of experience in conducting property valuation while the two persons in-charge signing the Business Valuation Report and each has over 27 years and 12 years of experience in conducting business valuation. In view of the above, we consider that the Independent Valuer is qualified and possesses sufficient relevant experience in performing the Property Valuation (as defined below) and the Business Valuation (as defined below).

We also note that the Independent Valuer mainly carried out its due diligence through management interviews and conducted its own proprietary research and has relied on publicly available information obtained through its own research as well as the financial information provided by the management of the Group. We are advised by Independent Valuer that it has assumed such information to be true, complete and accurate and has accepted it without verification.

Property Valuation

As stated in the Property Valuation Report, the total appraised market value of the property interests attributable to the Target Group as at 30 June 2020 is approximately RMB3,877.5 million.

(a) Valuation methodology

As set out in the Property Valuation Report and also based on our discussions with the Independent Valuer in relation to the valuation of the properties held by the Target Group (the “ Property Valuation ”), in deriving the appraised market value of each type of property assets, the Independent Valuer has adopted either direct comparison or income capitalisation approaches during the course of the Property Valuation. We also understand from the Independent Valuer that these valuation methodologies adopted are commonly used in the industry.

In valuing the properties held by the Target Group for sale and owner-occupation in the PRC, the Independent Valuer has adopted direct comparison approach by making reference to comparable sales evidence as available in the relevant market. Direct comparison approach is a commonly used method for properties held for sale and owner occupation, there are relevant comparable sales evidence for reference to arrive at the market values. This approach rests on the wide acceptance of the market evidence as the best indicator that can be extrapolated to similar properties, subject to allowances for variable factors.

In valuing the properties held by the Target Group for investment, the Independent Valuer has adopted income capitalisation approach by capitalising the rental derived from the existing tenancies with due provision of the reversionary rental potential of the properties, or where appropriate, by direct comparison approach by making reference to comparable sales evidences as available on the market. Income capitalisation approach is a commonly used method for investment properties, which takes into account the current tenancy details of the leased properties in the valuation. This approach estimates the values of the properties on a market basis, by capitalising the existing rental of all lettable units of each of the properties for the respective unexpired terms of contractual tenancies; whilst vacant units are assumed to be let at their respective market rents as at the valuation date.

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Upon expiry of the existing tenancies, each unit is assumed to be let at its market rent as at the valuation date, which is in turn capitalised for the unexpired term of the land use right under which the property is held. The summation of the capitalised value of the term rental for the leased portion, the capitalised value of the reversion market rental as appropriately deferred for the leased portion and the capitalised value of the vacant portion provides the market value of each of the properties.

In valuing the properties held by Target Group for operation in the PRC, the Independent Valuer has valued the property under the basis of going concern, and the Independent Valuer has adopted income capitalisation approach by making reference to its historical performance of the past years. During the course of the Property Valuation, the Independent Valuer has relied on the operating income generated from the operation during corresponding periods and made reference to the required rate of return of similar form of investment.

In valuing the properties held by the Target Group for development in the PRC, the Independent Valuer has valued them on the basis that they will be developed and completed in accordance with the Target Group’s latest development proposal provided to the Independent Valuer The Independent Valuer has adopted direct comparison approach by making reference to comparable sales evidence as available in the relevant market and where appropriate, the Independent Valuer has also taken into account the estimated total and expended construction costs as provided.

The Independent Valuer has provided and we have reviewed one sample of the property valuation working papers for each of the above property’s categories. The aggregate appraised value of the samples selected was approximately RMB2,346.2 million, representing over 60% of the total appraised value of the property interests attributable to the Target Group as at 30 June 2020 of approximately RMB3,877.5 million. We are of the view that the samples reviewed by us to be balanced, fair and representative to the entire population of the Property Valuation. For all of the samples selected, we have received all necessary working papers and supporting documents, where relevant. As part of our due diligence, we have arranged a number of conference calls with the Independent Valuer to conduct a review of the property valuation working papers and we have discussed with the staff of the Independent Valuer on the steps taken by them during the course of the Property Valuation. Based on the documents and explanations provided by the Independent Valuer, we have documented the details and explanations provided by the Independent Valuer until we fully understood and agreed with the valuation methodologies adopted by the Independent Valuer.

Based on the abovementioned documents and explanations provided by the Independent Valuer and the work performed by us, we are of the view that the Property Valuation was conducted in a reasonable manner which is in line with the abovementioned valuation methodologies.

(b) Review of the Property Valuation Report

We understand from the Independent Valuer that the direct comparison approach is a more preferential valuation approach when there are sufficient comparable properties transactions or price quotations around the subject property. The direct comparison approach directly reflects the market value of the subject property. The Independent Valuer chooses the comparable transactions or price quotation based on the following factors, amongst others, (i) the property nature and the use of property; (ii) the time of transaction; (iii) the distance between the comparable property and the

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subject property; (iv) the age of the comparable property; and (v) the fungibility of the comparable property. The Independent Valuer would take reference to three of the most suitable comparable properties based on their professional judgement and appraise the market value of the subject property. We have reviewed and discussed about the Independent Valuer’s workings on the selection of the comparable properties and the relevant adjustments made. We are of the view that the basis of the comparable properties selection and the adjustments, taking in to account various factors (i.e. the property nature, time of transaction, location, size, age and fungibility), made to reflect the value difference between the selected comparable properties and the appraised properties are reasonable and relevant for the purpose of establishing the market value.

The Independent Valuer further explained that for those subject properties which generate stable incomes over years, the income capitalisation approach would be adopted. The Independent Valuer would take reference to the rent of the comparable properties nearby to estimate the market rent of the subject property. Under the income capitalisation approach, the market value of the subject property was estimated by capitalising the total rental income to be generated with the appropriate discount rate under the length of the relevant land right use. As advised by the Independent Valuer, the discount rates adopted in capitalising the income to be generated was determined based on, among others, (i) the location of the subject property; (ii) the purpose of the subject property; and (iii) the market comparable discount rate. The Independent Valuer also took reference to their internal database to cross-check whether the discount rate adopted was in the reasonable range. We further understood that, due to the different status of the subject properties, such as properties under construction, the appraised values of those properties were further adjusted by taking into account the costs provided by the Target Company and cross-checked to the database maintained by the Independent Valuer.

We further noted that a substantial portion of the appraised value of the Property Valuation is attributable to the Chengdu Happy Valley theme park. The appraised market value of the Chengdu Happy Valley theme park of approximately RMB1,249.7 million was estimated under the income capitalisation approach plus the book value of an idle land. We have reviewed the valuation workings of the Chengdu Happy Valley theme park provided by the Independent Valuer and discussed with the relevant staffs of the Independent Valuer on the underlying assumptions, measures and steps taken in the course of valuation of the Chengdu Happy Valley theme park. We understood that the average of the net profit for the five and a half years ended 30 June 2020 was adopted as a proxy of the income to be generated under the length of the land right use of the Chengdu Happy Valley theme park. As explained by the Independent Valuer, five and a half years of historical income was adopted to reflect the recent impact caused by the Pandemic situation on the operational income of the Chengdu Happy Valley theme park. The income to be generated each year was then discounted by an appropriate required return rate. As advised by the Independent Valuer, the required rate of return was calculated based on, amongst others, (i) the location; (ii) the business nature; (iii) the required rate of return of investment similar to the Chengdu Happy Valley theme park; and (iv) the professional judgement of the Independent Valuer after the due diligence work done on the Chengdu Happy Valley theme park. In additional, the Independent Valuer advised that an idle land was included in the Chengdu Happy Valley theme park, the book value of the idle land was added into the appraised market value of the Chengdu Happy Valley theme park derived by the income capitalisation approach.

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Based on the above, we consider that the methodologies adopted are reasonable approaches in establishing the appraised value of the properties held by the Target Group.

Business Valuation

(a) Valuation methodology

During our review of the Business Valuation Report and as per our discussion with the Independent Valuer, in performing the business valuation of the entire equity interest of the Target Company (the “ Business Valuation ”), the Independent Valuer has considered the three generally accepted approaches to obtain the market value of the entire equity interest of the Target Group, namely the market approach, the income approach and the asset-based approach. According to the Business Valuation Report, in determining the selection of a valuation approach is based on, among others, the quantity and quality of information provided, access to available data, availability of relevant market transactions, type and nature of subject assets, purpose and objective of the valuation and professional judgment and technical expertise. Among the three approaches, the Independent Valuer considered that asset-based approach to be more appropriate for valuing the entire equity interest in Target Company as the major assets owned by Target Group are mainly real estate assets and interests in joint ventures and associates which run property development or investment operations. The asset-based approach is based on the general concept that the earning power of a business entity is derived primarily from its existing assets. The assumption of this approach is that when each of the elements of working capital, tangible and intangible assets is individually valued, their sum represents the value of a business entity and equals to the value of its invested capital. In particular, the equity value of the valuation target is arrived at by summing up the appraised values of each component asset forming the enterprise and then deducting the appraised values of its liabilities. In more simpler terms, the asset-based approach values each item of the business entity’s asset and liability with the end product being the appraised NAV of such business entity.

We also understand that the Independent Valuer had considered the merits and limitations of each of the aforesaid valuation methodologies as well as the nature and status of the Target Group business as at the valuation date, including, among others, (i) the lack of sufficient suitable direct market comparables for the purpose of adopting the market approach; (ii) when adopting the income approach, significant judgement will be exerted for the estimation of revenue and costs, which further increases the inherent uncertainties and risks in any projections derived for the purpose of the income approach; and (iii) the Target Group is capital intensive, fixed assets including completed properties, property under development and a theme park, and therefore the Independent Valuer considered the asset-based approach to be the most appropriate valuation methodology out of the three commonly adopted valuation methodologies as discussed above.

We concur with the Independent Valuer that the asset-based approach is the most appropriate method for valuing the equity interest of the Target Company.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(b) Review of the Business Valuation Report

We understand from the Independent Valuer that they have consistently adopted the assetbased approach to value the different consolidated assets and liabilities of the Target Company, and we have discussed with the Independent Valuer regarding the key items. Firstly, in terms of the asset side of the Target Group, the appraised value of cash and bank deposits is its book value as at 30 June 2020 taken from the unaudited financial information of the Target Group. As for the valuation of properties, the Independent Valuer took reference of the total appraised value of the property interests held by the Target Group as at 30 June 2020 of approximately RMB3,877.5 million and sorted them into three categories (i.e. inventories and other contract costs, investment properties and other property, plant and equipment) depending on their accounting classifications. We noted also that once the property interests are revalued upwards, relevant tax provisions (i.e. corporate income taxes, value-added taxes and land appreciation taxes were estimated as applicable) have been appropriately reflected. We have reviewed and discussed with the Independent Valuer the reconciliation between the abovementioned total appraised property value and the appraised values of the three categories of key asset items (i.e. inventories and other contract costs, investment properties and other property, plant and equipment) under the reassessed balance sheet of the Target Group as at 30 June 2020.

In valuing the long-term equity investment which mainly includes the Target Group’s investment in associates and joint ventures, the Independent Valuer reviewed the PRC legal opinion on the relevant investees in order to confirm the existence and shareholding percentages of equity interest in the investees. The Independent Valuer valued the assets and liabilities of the investees by adopting the asset-based approach, and appraised the value of such investment by taking into account the appraised net assets value of the investees and the shareholding percentages held by the Target Group in the investees. In most cases, after a detailed assessment on, among others, the business nature of the investees, the management accounts of the investees as at 30 June 2020, list of properties of the investees, the likely tax impacts of the any revaluation, the Independent Valuer would either opted for taking reference of the book value of the assets and liabilities of the investees or taking a deeper look at the assets and liabilities of the investees and to value the key identifiable assets separately and then multiply the relevant appraised value with the proportionate equity interest in the investees held by the Target Company. As disclosed in the Business Valuation Report, the Independent Valuer did not have full access to the properties and financial information of 成都文化旅遊發展股份有限公司 (Chengdu Culture & Tourism Development Holdings Co., Ltd.,) 成都體育產業有限責任公司 (Chengdu Sport Industry Co., Ltd., and Baoxin Quansheng) which are two associates and one joint venture company non-wholly owned by the Target Company, but they have endeavored to review the available information, such as property GFA and site area, recent years’ financial statements and recent inventory list. Each of Chengdu Culture & Tourism Development Holdings Co., Ltd. and Baoxin Quansheng accounted for approximately 4% of the total assets of the Target Company which are insignificant whilst Chengdu Sport Industry Co., Ltd. accounted for approximately 14% of the total assets of the Target Company, its lands are mainly allocated (劃撥) lands in nature and partly are pending for government planning due to the process of cultural relic protection measures, the Independent Valuer also reviewed that it is appropriate to consider their land book cost. The Independent Valuer considered there were no material changes from the book values of the aforementioned companies, therefore, the book values of the aforementioned companies were adopted. For liabilities and other asset balances, the Independent Valuer has mainly taken reference of the book value of the Target Group’s liabilities as at 30 June 2020.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Based on the Business Valuation Report, the Independent Valuer is of the opinion that the appraised value of the entire equity interest of the Target Company is RMB2,128,000,000 as at 30 June 2020. As the Company only holds 50.99% interest in the Target Company, the proportionate market value of 50.99% equity interest of the Target Company is approximately RMB1,085,067,200 (i.e. the Appraised Value). The Equity Interest Consideration of RMB 1,092,103,600 would represent a slight premium of approximately 0.6% over the Appraised Value.

Having discussed with the Independent Valuer and having performed our review as set out above, we considered the valuation methodology in establishing the Business Valuation to be in line with market practices to value businesses of a similar nature.

8. Industry Comparables analysis

We understand that the Target Group is principally engaged in the tourism and real estate development business, which mainly includes the Chengdu OCT Project, which is a large comprehensive development project located at Chengdu and comprises a premium residential community, urban entertainment and commercial complex and the Chengdu Happy Valley theme park.

For the purpose of an independent assessment of the fairness and reasonableness of the Equity Interest Consideration, we have compared the implied price-to-book multiple (“ P/B Multiple ”) of the Equity Interest Consideration against those of the Industry Comparables (as defined below). We consider P/B Multiple to be the most appropriate multiple as we noted that the Target Group was loss-making during FY2019 and 1H2020, so another commonly used multiple in the market approach, being price-to-earnings multiple, is not applicable. In addition, considering the Target Group is largely a property and investment business, the asset base of such company is important for its business expansion, which further affirming that P/B Multiple is the most suitable multiple for this comparable analysis.

In this regard, we have identified, on a best effort basis, a list of comparable companies (the “ Industry Comparables ”) which are engaged in similar principal business activities as those of the Target Group with the following selection criteria:

(i) they are currently listed on the Main Board of the Stock Exchange;
(ii) they are engaged in the property development or investment related business;
(iii) they are engaged in the theme park operation business;
(iv) over 15% of their latest reported annual revenue or latest published total assets were attributable to the theme park operation business; and
(v) over 50% of their latest reported annual revenue was generated from the property development or investment related business and the theme park operation business.

During the selection of the Industry Comparables, we have taken into account the business characteristics of the Target Group which is principally engaged in the property development and investment and tourism (i.e. theme park operations) businesses, but not purely a theme park operator. The majority of

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

the Target Group’s property projects were developed and situated around the Chengdu Happy Valley theme park. We are of the view that the Chengdu Happy Valley theme park is an important extension to the Target Group’s property development and investment business so we decided to find only those companies engaged in property development and investment business with theme park operation and not just any property developer and investors. We also noted that it is common for these type of companies (i.e. the Industry Comparables) that the portion of revenue and assets attributable to the property-related segment to be far higher than those attributable to the theme park operations because theme park ticket sales would not be as sizeable as property sales and rental revenue, thus we set the above criteria (iv) and (v) for identifying Hong Kong listed property developers and investors with at least some exposure in theme park operations.

Based on the above criteria, set out below are three Industry Comparables together with the relevant P/B Multiples, the information of which we consider, to the best of our knowledge and ability, to be an exhaustive, fair and representative sample for the purpose of arriving at a meaningful comparison to the Equity Interest Consideration.

Table 6: List of Industry Comparables

	Stock		Market
Name	code	Principal business activities	Capitalisation	P/B Multiple
			(HK$’ million)	(x)
				(Note 1)
Haichang Ocean Park Holdings	2255	The company develops, operates theme parks and other ancillary commercial	2,280	0.6
Limited		properties and manages museums, aquariums, theme parks, water theme
		parks, and other related properties. The company manages its parks
		throughout the PRC.
Overseas Chinese Town (Asia)	3366	The Company is an investment holding company. The Company’s principal	1,197	0.1
Holdings Limited		activities are its comprehensive development business: where it develops,
(i.e. the Company)		manages and sells residential properties; and the manufacturing and sale
(Note 2)		of paper cartons and products.
DreamEast Group Limited	593	The principal activity of DreamEast is investment holding. The principal	657	0.3
(“DreamEast”) (Note 3)		activities of the subsidiaries were provision of property development and
		leasing as well as tourism park operations and other services.
		Maximum		0.6
		Minimum		0.1
		Average		0.3
		Median		0.3
Target Company		The Target Company is principally engaged in tourism and real estate		1.3
		development business, which mainly includes the Chengdu OCT Project.		(Note 4)
		The Chengdu OCT Project is a large comprehensive development project
		located at Chengdu.

Sources: Bloomberg and the website of the Stock Exchange

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Notes:

The P/B Multiples of the Industry Comparables are calculated by dividing the respective market capitalisation of the Industry Comparable as at 4 September 2020, being the date of the Equity Transfer Agreement, by the most recently published NAV attributable to the shareholders of the Industry Comparables. For the above calculations, the NAV figures reported in RMB were converted into HK$ at the exchange rate of RMB1:HK$1.1327.
We noted that by applying the abovementioned selection criteria, the Company is also one of the Industry Comparables. We are of the view that the Company should rightfully be included in the Industry Comparables on the basis that: (i) it meets all the selection criteria of the Industry Comparables; and (ii) the fact the Target Company, being a non-wholly owned subsidiary of the Company, has quite similar principal business activities as the Company (i.e. the Comprehensive Development Business).
As stated in the Letter from the Board, the Equity Interest Consideration was determined with reference to, among others, the preliminary appraised value of the entire equity interest in the Target Company as at 30 June 2020 by the Independent Valuer of RMB2,128,000,000 by using asset-based approach. As such, the implied market capitalisation of the Target Company (the “ Implied Market Value ”) would be the same of its reassessed NAV. Based on the result of the comparable analysis, we noted that the market capitalisation of the Industry Comparables were significantly discounted to their respective NAVs as at the date of the Equity Transfer Agreement. As disclosed in the latest interim report of DreamEast published on 18 September 2020, the NAV of DreamEast was approximately HK$2,231.7 million as at 30 June 2020 which in fact was not significantly lower than the reassessed NAV of the Target Company of approximately RMB2,128 million (equivalent to approximately HK$2,438 million). Therefore, we consider DreamEast to be representative and reasonable for inclusion in the above analysis.
The implied P/B Multiple (the “ Implied P/B Multiple ”) of approximately 1.3 time is calculated by dividing the aforesaid Implied Market Value of approximately RMB2,128,000,000 by the NAV attributable to the shareholders of the Target Company as at 30 June 2020 of approximately RMB1,646,054,000.

The P/B Multiples of the Industry Comparables ranged from approximately 0.1 times to approximately 0.6 times while the average and median are approximately 0.3 times. The Implied P/B Multiple of approximately 1.3 times is significantly above the upper bound of that of the Industry Comparables and is more than four times of the average P/B Multiple of the Industry Comparables.

Although the NAVs of the Industry Comparables have not been reassessed like the way the Independent Valuer has come up with the business valuation of the Target Company using the asset based approach, we have also adopted the Impiled Market Value of the Target Company, which can be seen as the “reassessed NAV” of the Target Company, into our analysis for reference. The corresponding implied P/B Multiple (the “ Reassessed P/B Multiple ”) derived from the “reassessed NAV” of the Target Company would naturally be 1.0 time. We noted that the Reassessed P/B Multiple of 1.0 time nevertheless yield similar comparative results when compared to the P/B Multiples of the Industry Comparables.

Taking into account the fact that both the Implied P/B Multiple and the Reassessed P/B Multiple of approximately 1.3 times and 1.0 time, respectively, are significantly above the upper bound of that of the Industry Comparables, we consider the Equity Interest Consideration to be fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

9. Financial effects of the Disposal

Upon Completion, the Group will cease to hold any interest in the Target Group and 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 in the accounts of the Group.

The financial effects of the Disposal on the Group’s earnings, working capital and NAV are set out below. However, it should be noted that the analysis below is for illustrative purposes only and does not purport to represent the actual financial performance and position of the Group upon Completion. The actual amount of gain or loss as a result of the Disposal will be assessed based on the financial position of the Target Company as at Completion, and eventually be recognised in the audited consolidated financial statements of the Company.

Earnings

According to the unaudited pro forma financial information of the Remaining Group as set out in Appendix III to the Circular, assuming the Disposal had taken place on 30 June 2020, it is estimated that the Company would record a net gain of approximately RMB233.3 million from the Disposal, which is calculated based on subtracting the reassessed NAV attributable to the shareholders of the Target Company as at 30 June 2020 from the Equity Interest Consideration while taking into account any estimated tax effects in connection with gain on the Disposal. Shareholders should also note that since the Target Group was making a net loss attributable to the shareholders of the Target Company of approximately RMB18.8 million for FY2019, assuming the Disposal had taken place on 1 January 2019, the Company would have been better off deconsolidating the financial results of the Target Group.

Working capital

Since both the Equity Interest Consideration and the Debt Interest Consideration which amount to approximately RMB1,252.5 million will be settled in cash by OCT Chengdu Investment to the Company. According to the unaudited pro forma financial information of the Remaining Group as set out in Appendix III to the Circular, assuming the Disposal had taken place on 30 June 2020, the Group’s current assets would increase from approximately RMB12,177.7 million to approximately RMB12,367.5 million and hence its working capital position is expected to improve upon Completion.

Gearing

The Group’s gearing ratio (being the total borrowings including bills payable and loans divided by total assets) was approximately 39.7% as at 30 June 2020. According to the unaudited pro forma financial information of the Remaining Group as set out in Appendix III to the Circular, assuming the Disposal had taken place on 30 June 2020, the Group’s gearing ratio would increase to approximately 41.4%. Such increase was mainly due to the combined effect of: (i) the decrease in total asset by approximately 13.4%, from approximately RMB29,272.8 million to approximately RMB25,342.2

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

million; and (ii) the decrease in total borrowings by approximately 9.7%, from approximately RMB11,616.7 million to approximately RMB10,492.3 million. As a result, the percentage of decrease in total asset is steeper than the decrease in total borrowings.

NAV

As discussed above, both the Equity Interest Consideration and the Debt Interest Consideration will immediately increase the Group’s cash position upon Completion. This is expected to allow the Group to recognise a gain on the Disposal of approximately RMB233.3 million upon Completion and hence improve the Group’s NAV. According to the unaudited pro forma financial information of the Remaining Group as set out in Appendix III to the Circular, assuming the Disposal had taken place on 30 June 2020, the assets and liabilities of the Group are estimated to be decreased by approximately RMB3,930.6 million and decreased by approximately RMB3,356.5 million respectively with the NAV attributable to the equity holders of the Company would increase from approximately RMB9,033.4 million to approximately RMB9,266.7 million.

Based on the above analysis, we noted that the Disposal would have a positive effect on Group’s earnings, working capital position and NAV.

OPINION AND RECOMMENDATION

Having considered the principal factors and reasons referred to above, in particular that:

(i) the Group has been consolidating the deteriorating financial performance of the Target Group for FY2019 and 1H2020 owing to the tightening property market policies and the adverse impacts brought about by the Pandemic which had created adverse effects on operation of the hotel and culture tourism projects and the share of profits of associates. The financial results of the Target Group will no longer be consolidated into the accounts of the Group upon Completion;
(ii) the Group has been executing the Business Model Cycle of “fundraising, investment, management and exit” and actively pursuing a “strategic transformation” of the Group and the Disposal is an example of the Group conducting its ordinary and usual course of business;
(iii) the Disposal will improve the Group’s financial position and provide flexibility for its operations and potential business expansions through investment opportunities in areas such as technology and new urbanisation;
(iv) the Equity Interest Consideration was determined after arm’s length negotiations between Bantix International and OCT Chengdu Investment and with reference to, amongst others, the preliminary appraised value of the entire equity interest in the Target Company as at 30 June 2020 by the Independent Valuer of RMB2,128,000,000 by using asset-based approach, through review with the Independent Valuer, we consider the relevant appraised value was fairly appraised by the Independent Valuer under the Business Valuation for which we took comfort, while the Debt Interest Consideration was determined on a dollar-to-dollar basis;
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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(v) the Equity Interest Consideration of RMB 1,092,103,600 would represent a slight premium of approximately RMB7,000,000 or 0.6% over the Appraised Value of approximately RMB1,085,067,200;
(vi) both the Implied P/B Multiple and the Reassessed P/B Multiple of approximately 1.3 times and 1.0 time are significantly above the upper bound of that of the Industry Comparables; and
(vii) albeit gearing will increase slightly, the Disposal would have a positive effect on the Group’s earnings, working capital position and NAV,

we are of the opinion that the entering into the Transfer Agreements and the transactions contemplated thereunder is in the ordinary and usual course of business of the Group and is in the interests of the Company and the Shareholders as a whole, and the terms of the Transfer Agreements and the transactions contemplated thereunder are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, we recommend the Independent Board Committee to recommend, and we ourselves recommend, the Independent Shareholders to vote in favour of the relevant resolution to be proposed at the EGM in relation to the Transfer Agreements and the transactions contemplated thereunder.

Yours faithfully, For and on behalf of Opus Capital Limited Cheung On Kit Andrew Executive Director

Mr. Cheung On Kit Andrew is an Executive Director of Opus Capital and is licensed under the SFO as a Responsible Officer to conduct Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities. Mr. Cheung has over 12 years of corporate finance experience in Asia Pacific and has participated in and completed various financial advisory and independent financial advisory transactions.

For illustrative purpose only
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FINANCIAL INFORMATION OF THE GROUP

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 (http://www.hkexnews.hk/listedco/listconews/SEHK/2018/0413/LTN20180413403.pdf).

The audited consolidated financial statements of the Group for the year ended 31 December 2018 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 (http://www3.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 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 July 2020, being the date of this indebtedness statement prior to the printing of this circular, the Group had total borrowings of approximately RMB8,435.11 million, comprising secured and guaranteed bank and related party loans of approximately RMB2,930.21 million, unsecured and unguaranteed bank and related party loans of approximately RMB5,504.90 million.

As at 31 July 2020, the Group’s secured and guaranteed bank loans were secured by: (i) other property, plant and equipment and interests in leasehold land held for own use with total carrying value of approximately RMB1,814.72 million; and (ii) guarantees provided by OCT Ltd. and OCT (HK), which are intermediate parents of the Company.

As at 31 July 2020, the Group had outstanding obligations under lease with carrying amount of approximately RMB72.77 million.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

As at 31 July 2020, save for the guarantees of approximately RMB664.67 million given to financial institutions for mortgage loan facilities granted to purchasers of the Group’s properties, the Group had no other material contingent liabilities.

As at 31 July 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, consist 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 July 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 July 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 present available bank facilities, and taking into account the impact of the Disposal, the Group will have sufficient working capital for its requirements for at least the next 12 months from the date of this circular.

4. CONTINGENT LIABILITIES

Save as disclosed in this circular, the Group has no other material contingent liabilities. The Group is not involved in any current material legal proceedings, nor is the Group aware of such material legal proceedings. The Group would record any loss contingencies when, based on information then available, it is probable that a loss had been incurred and the amount of the loss can be reasonably estimated. The Group confirms that there has not been any material change in the level of its contingent liabilities since 31 December 2019 up to the Latest Practicable Date.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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 RMB10.888 billion. As at 31 December 2017, the Remaining Group had current assets of approximately RMB14.203 billion and current liabilities of RMB6.962 billion. The current ratio of the Remaining Group was approximately 2.04 as at 31 December 2017, which is substantially the same comparing with that as at 31 December 2016 (31 December 2016: approximately 1.68). The Remaining Group generally finances its operations with internally generated cash flow, credit facilities provided by banks and shareholder’s loans.

As at 31 December 2017, the Remaining Group had outstanding bank and other loans of approximately RMB5.715 billion, 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 total assets) was approximately 52.49% as at 31 December 2017, representing a decrease of 28.62 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 (“ 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 billion was in Hong Kong Dollars; approximately 5.54% of which amounting to approximately RMB240 million was in RMB; no outstanding bank and other loans were in United States Dollars.

As at 31 December 2017, the total cash and bank balance of the Remaining Group was approximately RMB6.292 billion, of which approximately 11.42% was in United States Dollars, approximately 27.84% of which was in RMB and approximately 60.73% of which was 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 RMB10.489 billion. As at 31 December 2018, the Remaining Group had current assets of approximately RMB10.137 billion and current liabilities of approximately RMB8.227 billion. The current ratio was approximately 1.23 as at 31 December 2018, representing a decrease of 0.81 as compared with that as at 31 December 2017 mainly due to inventory of approximately RMB1.96 billion being transferred from current assets to non-current assets and a number of additional long-

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

term equity investment projects during the period. The Remaining Group generally finances 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 billion, 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 total assets) was approximately 73.60% as at 31 December 2018, representing an increase of 21.11 percentage points as compared with approximately 52.49% as at 31 December 2017, mainly due to the increase in the amount of loans as at the end of the year ended 13 December 2018.

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 billion was denominated in Hong Kong Dollars.

As at 31 December 2018, the total cash and bank balance of the Remaining Group was approximately RMB3.223 billion, of which approximately 24.62% was denominated in United States Dollars, approximately 56.75% was denominated in RMB and approximately 18.63% 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 RMB10.612 billion. As at 31 December 2019, the Remaining Group had current assets of approximately RMB8.510 billion and current liabilities of approximately RMB4.333 billion. 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$2.25 billion from the Bank of China in 2019 in replacement of other short-term bank loans over the same period. The Remaining Group generally finances 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 billion, 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 total assets) was approximately 83.14% as at 31 December 2019, representing an increase of 9.54 percentage points as compared with approximately 73.60% as at 31 December 2018, mainly due to the increase in the amount of loans as at the end of the year ended 13 December 2019.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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 billion was denominated in Hong Kong Dollars and approximately 36.85% of which amounting to approximately RMB2.93 billion was denominated in RMB.

As at 31 December 2019, the total cash and bank balance of the Remaining Group was approximately RMB2.512 billion, of which approximately 29.99% was denominated in United States Dollars, approximately 29.86% was denominated in RMB and approximately 40.15% was denominated in Hong Kong Dollars.

For the six months ended 30 June 2020

The total equity of the Remaining Group as at 30 June 2020 was approximately RMB11.984 billion. As at 30 June 2020, the Remaining Group had current assets of approximately RMB10.667 billion and current liabilities of RMB3.435 billion. The current ratio of the Remaining Group was approximately 3.11 as at 30 June 2020. The Remaining Group generally finances 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 billion, 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 total assets) was approximately 87.55% as at 30 June 2020, representing an increase of 13.95 percentage points as compared with approximately 73.60% 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 billion was in Hong Kong Dollars; approximately 13.61% of which amounting to approximately RMB1.031 billion was in RMB; no outstanding bank and other loans were in United States Dollars.

As at 30 June 2020, the total cash and bank balance of the Remaining Group was approximately RMB2.135 billion, of which approximately 35.81% was in United States Dollars, approximately 34.99% of which was in RMB and approximately 29.20% of which was in Hong Kong Dollars.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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 interest 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.

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 interests 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 1,039, 600, 234 and 195 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 will be offered to all staff members. Salaries of the employees are maintained at a competitive level and are reviewed annually, with reference to the relevant labour market and economic situation. Directors’ remuneration is determined based on a variety of factors such as market conditions and responsibilities assumed by each Director. Apart from the basic remuneration and statutory benefits, the Remaining Group also provides bonuses to the staff based upon the Remaining Group’s results and their individual performance.

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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 and cancelled.

Contingent Liabilities

As at 31 December 2017, 2018 and 2019 and 30 June 2020, guarantees given to financial institutions for mortgages 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 installment before the issuance of the individual property ownership certificate, the banks can draw down the security deposits up to the amount of outstanding mortgage installments and demand the Remaining Group to repay the outstanding balance to the extent that the deposit balance is insufficient.

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

The management does not consider it probable that the Remaining Group will sustain a loss under these guarantees as the bank has the rights to sell the property and recovers the outstanding loan balance from the sale proceeds if the property buyers default payment. The management also considers that the market value of the underlying properties is able to cover the outstanding mortgage loans guaranteed by the 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:

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For the year ended 31 December 2018

							Size of the
							investment to
							the value of
	Number of	Approximate	Net gain/(loss)	Dividend			the total assets
	shares held by	percentage of	for the year	received for			of the Group
	the Group as	shareholding as	ended	the year ended		Fair value as	as at
	at 31 December	at 31 December	31 December	31 December	Investment	at 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 (note 2)	0	1,176,471	1,161,836	4.65%

Notes:

Tongcheng-Elong and its subsidiaries engage in provision of travel products and services in the China’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
	Number of	Approximate					the value of
	shares held by	percentage of	Net gain/(loss)	Dividend			the total assets
	the Group as	shareholding as	for the year	received for			of the Group
	at	at	ended	the year ended		Fair value as	as at
	31 December	31 December	31 December	31 December	Investment	at 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 (note 1)	0	1,176,471	1,328,434	5.02%

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FINANCIAL INFORMATION OF THE GROUP

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Note:

The net movement is recognised in other comprehensive income.

For the six months ended 30 June 2020

							Size of the
							investment to
	Number of	Approximate		Dividend			the value of
	shares held by	percentage of	Net gain/(loss)	received for			the total assets
	the Group as	shareholding as	for the year	the year ended		Fair value as	of the Group
	at 30 June	at 30 June	ended 30 June	30 June	Investment	at 30 June	as at 30 June
Name of investment	2020	2020	2020	2020	cost	2020	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 (note 1)	0	1,176,471	1,352,685	4.62%

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 is 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 International Limited (華昌國際有限公司) (“ City Legend ”), a wholly-owned subsidiary of the Company, entered into the cornerstone investment agreement with, among others, Minsheng Education Group Company Limited (民生教育集团有限公司) (“ 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.

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Investment in Shanghai Libao Huachen Fund

On 17 March 2017, Shenzhen Huayou Investment Limited (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 other several partners to establish Shanghai Libao Huachen Investment Centre (LLP) (上海利保華辰投資中心(有限合夥)) (“ Shanghai Libao Huachen Fund ”) with an aggregate capital of RMB400 million, among which 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 and the supplemental agreement (the “ Capital Converge Sale and Purchase Agreement ”) with New China OCT Fund SPC (on behalf of New China Fund SP 1) (“ New China Fund ”), pursuant to which the Company disposed of 51% of the total issued share capital of Capital Converge Holdings Limited (“ Capital Converge ”) and 51% of the shareholder’s loan in Capital Converge to New China Fund, at the consideration in the sum equals to the US$ equivalent of approximately RMB1,395 million.

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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) (“ Chongqing OCT Real Estate ”) 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.

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. (“ 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 the Land and Resources Bureau to acquire the Changshu Land at the consideration of approximately RMB18.78 million. For further details, please refer to the announcement of the Company dated 27 June 2018.

Cornerstone Investment in Tianli Education

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

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APPENDIX I

Cornerstone Investment in E-House Enterprise

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

Acquisition of 9.98% equity interest in Yuzhou Properties

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

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

Sale and Leaseback Arrangement

On 11 September 2018, OCT Financial Leasing 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, the Target Company, 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 the Target Company, entered into an equity transfer agreement, pursuant to which the Target Company agreed to sell 51% equity interest in OCT Lakeside to Zhongbao Investment Fund at the consideration

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APPENDIX I

of RMB60.53 million. Upon completion of the transfer, OCT Lakeside was owned as to 49% and 51% by the Target Company and Zhongbao Investment Fund, respectively, and ceased as a subsidiary of the Company. For details, please refer to the announcement of the Company dated 24 December 2018.

Disposal of 100% equity interest in Zhongshan Huali

On 27 December 2018, Wantex Investment Limited (榮添投資有限公司) (“ Wantex Investment ”), 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) (“ Zhongshan Huali ”) to the successful bidders at the total consideration of approximately RMB150.29 million. The disposal indicated that the Group has fully withdrawn from its paper packaging business. For further details, please refer to the announcements of the Company dated 25 October 2018, 23 November 2018 and 27 December 2018.

For the 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

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APPENDIX I

and Factoring Framework Agreements by the independent Shareholders at the extraordinary general meeting held on 19 June 2019. For further details, please refer to the announcement of the Company dated 7 May 2019 and the circular of the Company dated 23 May 2019.

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

On 15 May 2019, Shenzhen OCT Gangya Holdings Development Co., Ltd. (深圳華僑城港亞控股發展有限公司) (“ OCT Gangya ”), an indirect wholly-owned subsidiary of the Company, and Hefei Guojia Industry Capital Management Co., Ltd. (合肥國嘉產業資本管理有限公司) (“ Hefei Guojia ”) have jointly bidded and won the bid for the land use rights of the land situated at Chaohu, Hefei, Anhui Province of the PRC (the “ 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 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 (the “ Xiamen 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 Heifei 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 sq.m. 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

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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

Disposal of Listed Securities in Tianli Education

From 7 November 2019 to 20 December 2019, City Legend disposed of an aggregate of 57,334,000 shares (“ Tianli 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 will be 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.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Renewal of finance lease and factoring framework agreements

On 18 May 2020, OCT Financial Leasing entered into finance lease and factoring framework group 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 held on 19 June 2020 (the “ Effective Period ”). The annual caps for the Effective Period for each of financial 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.

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 RMB688.15 million, representing a year-on-year decrease of approximately 26.06%. For the year ended 31 December 2019, profit attributable to equity holders of the Company was approximately RMB267 million, representing a year-on-year decrease of approximately 66.58%. For the year ended 31 December 2019, the Remaining Group’s gross profit margin from the continuing operations was approximately 39.17%, representing an increase of 1.8 percentage points over the same period of 2018. As at 31 December 2019, the Remaining Group’s total assets amounted to approximately RMB21.214 billion, representing an increase of approximately 7.43% over that as at 31 December 2018; the Remaining Group’s total equity amounted to approximately RMB10.609 billion, which was approximately the same as 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 world economy will be in recession. Under the policy of “six stabilities and six guarantees”, China’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

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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 quality of projects. Meanwhile, the Remaining Group will improve liquidity, and speed up capital turnover by revitalizing 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.

I-17 -

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

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

			Area of land	Gross floor area	Percentage of
			(ten thousand m 2,	(ten thousand m 2,	interest owned
Name of project	Location	Use of Land	full caliber)	full caliber)	by the Company Status
OCT Bantang Hot	Hefei	Residential,	41.5	34.5	51% –	The first phase of residential
Spring Town Project		commercial,				development has already
		hotel and				commenced and is expected to
		waterpark				complete in the second half of
						2020

The first phase of construction of waterparks and hotels and development of partial commercial projects is expected to commence in the second half of 2020. It is expected that these facilities will commence operation in 2022

Hefei Airport	Hefei	Residential,	69.5	84.8	51% The construction of the first phase of
International Town		commercial and			the project is expected to commence
Project		hotel			in the second half of 2020
Zhongshan Yuhong	Zhongshan	Residential	9.1	27.2	21% Construction of phase I of the project
Project					has begun, and is expected to be
					launched to the market at the end of
					2020
Shanghai Suhewan	Shanghai	Residential,	7.1	43.0	50.5% Properties being marketed
Project		commercial and
		hotel
Chongqing OCT Land	Chongqing	Residential	18.0	44.0	49% Properties being marketed
Project
Industrial Park Projects	Jiangsu, Anhui	Leasing	40.0	14.7	100% In operation
	and
	Guangdong
Xi’an OCT Project	Xi’an	Residential	13.7	24.1	25% Final stage of property sale
Beijing Unique Garden	Beijing	Residential	7.3	18.2	33% Final stage of property sale
Project

I-18 -

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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 favored by more capital, and many small and medium-sized institutions will be difficult 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 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 OCT Runyu Fund under the Remaining Group will accelerate the promotion of equity investment of urbanisation projects companies in the GuangdongHong Kong-Macao Greater Bay Area, the Yangtze River Delta Economic Zone and other regions; the Dongguan Fund 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 while strictly controlling risks, and focusing on the main customer base consisting of large and medium state-owned enterprises, high quality listed companies to promote business expansion and increase operating income.

I-19 -

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 Chengdu Tianfu Oversea Chinese Town Co., Ltd. (the “ Target Company ”) and its subsidiaries (collectively referred to as the “ Target Group ”) as at 31 December 2017, 2018, 2019 and 30 June 2020 and the related unaudited consolidated statements of profit or loss and other comprehensive income, unaudited consolidated statements of changes in equity and unaudited consolidated cash flow statements for each of the years ended 31 December 2017, 2018, 2019 and for the six months ended 30 June 2019 and 2020, and explanatory notes (collectively referred to as the “ Financial Information ”). The Financial Information has been prepared by the Directors of the Company on the basis set out in note 2 to the Financial Statements and 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 in pages II-2 to II-16 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.

Based on their review, nothing has come to their attention that causes them to believe that the Financial Information of the Target Group for the relevant periods is not prepared, in all material respects, in accordance with the basis of preparation set out in note 2 below.

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 six months ended 30 June 2019 and 2020

(Expressed in Renminbi)

Revenue Cost of sales Gross profit Other income Other net (loss)/gain Distribution costs Administrative expenses Other operating expenses Profit/(loss) from operations Finance costs Share of profits/(loss) of associates Share of (loss)/profits of joint ventures Profit/(loss) before taxation Income tax Profit/(loss) and the comprehensive income for the year/period Attributable to: Shareholders of the Target Company Non-controlling interests Profit/(loss) and the comprehensive income for the year/period	Year ended 31 December 2017 2018 RMB’000 RMB’000 1,397,369 654,018 (832,807) (481,841) 564,562 172,177 8,813 3,091 (4,003) 89,610 (102,400) (88,117) (116,187) (150,670) (1,223) (1,077) 349,562 25,014 (45,628) (30,180) 7,239 20,377 (8,322) 231,318 302,851 246,529 (196,594) (155,849) 106,257 90,680 106,250 90,701 7 (21) 106,257 90,680	2019 RMB’000 1,383,753 (820,711) 563,042 1,641 (813) (67,912) (148,587) (409) 346,962 (40,805) 5,128 (8,157) 303,128 (321,905) (18,777) (18,777) – (18,777)	Six months ended 30 June 2019 2020 RMB’000 RMB’000 160,464 213,710 (143,793) (187,172) 16,671 26,538 558 650 1,171 (124) (17,912) (22,413) (80,602) (36,888) – – (80,114) (32,237) (17,107) (9,703) 13,886 (1,041) (318) 3,020 (83,653) (39,961) (43,846) (26,235) (127,499) (66,196) (127,499) (66,196) – – (127,499) (66,196)

II-2 -

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

At 31 December 2017, 2018, 2019 and 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 Interests in associates Interests in joint ventures Trade and other receivables Finance lease receivables Deferred tax assets Current assets Inventories and other contract costs Trade and other receivables Finance lease receivables Cash at bank and on hand Current liabilities Trade and other payables Contract liabilities Lease liabilities Bank and other loans Amount due to the Group Related party loans Current taxation	At 31 December 2017 2018 RMB’000 RMB’000 865,207 919,456 1,107,961 1,062,474 525,783 443,714 2,498,951 2,425,644 1,288 1,258 1,058,711 1,054,088 11,222 287,330 – 2,477 – – 99,646 132,132 3,669,818 3,902,929 816,405 1,117,952 116,928 153,637 – – 635,393 156,936 1,568,726 1,428,525 1,638,398 1,558,938 – 51,972 – – 120,000 134,500 206,115 206,115 – – 289,509 389,002 2,254,022 2,340,527	2019 RMB’000 1,248,056 991,096 428,116 2,667,268 1,073 1,059,216 279,174 1,623 22,959 155,651 4,186,964 740,425 142,230 1,777 169,453 1,053,885 1,276,031 441,118 13,673 164,830 306,874 100,000 583,711 2,886,237	At 30 June 2020 RMB’000 1,265,054 956,148 420,089
			2,641,291 973 1,058,175 282,193 1,623 22,283 113,856
			4,120,394
			697,439 177,984 1,844 633,966
			1,511,233
			1,458,575 380,223 13,673 – 614,860 624,406 351,337
			3,443,074

II-3 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Net current liabilities Total assets less current liabilities Non-current liabilities Deferred tax liabilities Bank and other loans Lease liabilities NET ASSETS CAPITAL AND RESERVES Share capital Reserves Total equity attributable to shareholders of the Target Company Non-controlling interests TOTAL EQUITY	At 31 December 2017 2018 RMB’000 RMB’000 (685,296) (912,002) 2,984,522 2,990,927 – – 560,000 574,000 – – 560,000 574,000 2,424,522 2,416,927 1,500,000 1,500,000 922,609 916,927 2,422,609 2,416,927 1,913 – 2,424,522 2,416,927	2019 RMB’000 (1,832,352) 2,354,612 896 – 46,763 47,659 2,306,953 1,500,000 806,953 2,306,953 – 2,306,953	At 30 June 2020 RMB’000 (1,931,841) 2,188,553 951 500,000 41,548 542,499 1,646,054 1,500,000 146,054 1,646,054 – 1,646,054

II-4 -

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 six months ended 30 June 2019 and 2020 (Expressed in Renminbi)

Balance at 1 January 2017 Changes in equity for 2017: Profit for the year Total comprehensive income Transfer to PRC statutory reserves Dividends approved in respect of the previous year Balance at 31 December 2017 Balance at 31 December 2017 Impact on initial application of HKFRS 15 Adjusted balance at 1 January 2018 Changes in equity for 2018: Profit for the year Total comprehensive income Dividends approved in respect of the previous year Disposal of subsidiaries Balance at 31 December 2018	Attributable to shareholders of the Target Company Share capital Capital reserve PRC statutory reserve Retained profits RMB’000 RMB’000 RMB’000 RMB’000 1,500,000 27,964 162,836 1,029,705 – – – 106,250 – – – 106,250 – – 9,474 (9,474) – – – (404,146) 1,500,000 27,964 172,310 722,335 1,500,000 27,964 172,310 722,335 – – – 496 1,500,000 27,964 172,310 722,831 – – – 90,701 – – – 90,701 – – – (96,879) – – – – 1,500,000 27,964 172,310 716,653	Total RMB’000 2,720,505 106,250 106,250 – (404,146) 2,422,609 2,422,609 496 2,423,105 90,701 90,701 (96,879) – 2,416,927	Non- controlling interests RMB’000 1,906 7 7 – – 1,913 1,913 – 1,913 (21) (21) – (1,892) –	Total equity RMB’000 2,722,411 106,257
				106,257
				– (404,146

				2,424,522
				2,424,522 496
				2,425,018 90,680
				90,680
				(96,879 (1,892

				2,416,927

II-5 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Attributable to shareholders of the Target Company

			PRC			Non-
	Share	Capital	statutory	Retained		controlling
	capital	reserve	reserve	profits	Total	interests	Total equity
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
Balance at 1 January 2019	1,500,000	27,964	172,310	716,653	2,416,927	–	2,416,927
Changes in equity for 2019:
Loss for the year	–	–	–	(18,777)	(18,777)	–	(18,777)
Total comprehensive income	–	–	–	(18,777)	(18,777)	–	(18,777)
Transfer to PRC statutory reserves	–	–	1,915	(1,915)	–	–	–
Dividends approved in respect of the
previous year	–	–	–	(91,197)	(91,197)	–	(91,197)

Balance at 31 December 2019	1,500,000	27,964	174,225	604,764	2,306,953	–	2,306,953
Balance at 1 January 2020	1,500,000	27,964	174,225	604,764	2,306,953	–	2,306,953
Changes in equity for the six months
ended 30 June 2020:
Loss for the period	–	–	–	(66,196)	(66,196)	–	(66,196)
Total comprehensive income	–	–	–	(66,196)	(66,196)	–	(66,196)
Dividends approved in respect of the
previous year	–	–	–	(594,703)	(594,703)	–	(594,703)

Balance at 30 June 2020	1,500,000	27,964	174,225	(56,135)	1,646,054	–	1,646,054
Balance at 1 January 2019	1,500,000	27,964	172,310	716,653	2,416,927	–	2,416,927
Changes in equity for the six months
ended 30 June 2019:
Loss for the period	–	–	–	(127,499)	(127,499)	–	(127,499)
Total comprehensive income	–	–	–	(127,499)	(127,499)	–	(127,499)

Balance at 30 June 2019	1,500,000	27,964	172,310	589,154	2,289,428	–	2,289,428

II-6 -

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

UNAUDITED CONSOLIDATED CASH FLOW STATEMENTS

For the years ended 31 December 2017, 2018, 2019 and six months ended 30 June 2019 and 2020

(Expressed in Renminbi)

Operating activities Cash generated from/(used in) operations Tax paid Interest element of lease rentals paid Interest paid Net cash generated from/ (used in) operating activities Investing activities Payment for purchase of property, plant and equipment and intangible assets Net cash flow from disposal of subsidiaries Decrease in amounts due from a joint venture Proceeds from disposal of property, plant and equipment and intangible assets Dividends received from an associate Redemption of other financial assets Net cash used in investing activities	Year ended 31 December 2017 2018 RMB’000 RMB’000 412,466 (190,319) (195,352) (88,841) – – (54,009) (50,409) 163,105 (329,569) (392,637) (183,370) – 58,586 125,587 69,500 89 43 – – 5,306 – (261,655) (55,241)	2019 RMB’000 856,558 (161,208) (4,128) (47,664) 643,558 (210,275) – – 21 25,000 – (185,254)	Six months ended 30 June 2019 2020 RMB’000 RMB’000 (121,413) (110,372) (115,452) (218,054) (2,143) (1,822) (19,813) (3,848) (258,821) (334,096) (94,851) (60,971) – – – – – – 25,000 – – – (69,851) (60,971)

II-7 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

Financing activities Proceeds from loans Repayment of loans Dividend paid to equity shareholders of the Target Company Net cash (used in)/ generated from 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 – 150,000 (120,000) (121,500) (97,803) (100,228) (217,803) (71,728) (316,353) (456,538) 922,537 606,184 606,184 149,646	2019 RMB’000 415,000 (858,670) – (443,670) 14,634 149,646 164,280	Six months ended 30 June 2019 2020 RMB’000 RMB’000 415,000 1,044,000 (54,670) (184,424) – – 360,330 859,576 31,658 464,509 149,646 164,280 181,304 628,789

II-8 -

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL INFORMATION OF THE TARGET GROUP

1 General information

Chengdu Tianfu Oversea Chinese Town Co., Ltd. (the “ Target Company ”) was incorporated with limited liability in the People’s Republic of China (“ PRC ”) on 31 October 2005. The Target Company’s immediate holding company is Bantix International Limited (“ Bantix International ”), a company incorporated in Hong Kong, which holds 50.99% of the Target Company’s equity interest. Shenzhen Overseas Chinese Town Company Limited and Shenzhen Overseas Chinese Town Real Estate Company Limited holds the remaining 24.82% and 24.19% of the Target Company’s equity interest respectively. The Target Company’s intermediate holding company is Overseas Chinese Town (Asia) Holdings Limited (the “ Company ”), a company 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’s ultimate shareholder is Overseas Chinese Town Group Co., Ltd., (“ OCT Group ”), a limited company incorporated in PRC. The Target Company and its subsidiaries (collectively referred to as the “ Target Group ”) are principally engaged in real estate development and operation, and tourism services business.

On 4 September 2020, Bantix International entered into an agreement with OCT (Chengdu) Investment Co., Ltd. (“ OCT Chengdu Investment ”), an indirect wholly-owned subsidiary of OCT Group, pursuant to which Bantix International agreed to sell, and OCT Chengdu Investment to acquire, 50.99% equity interest in the Target Company (“ the Disposal ”).

The particulars of the subsidiaries of the Target Company as at 30 June 2020 are set out below:

	Place and		Target
	date of		Group’s
	incorporation/	Particulars of	effective
Name of subsidiary	establishment	paid up capital	interest	Principal activities
Chengdu Tianfu OCT Wanhui Management	PRC 29 August	RMB10,000,000	100%	Real estate
Co., Ltd.*	2008			development
成都天府華僑城萬匯商城管理有限公司
Chengdu Tianfu OCT Park Plaza	PRC 29 August	RMB10,000,000	100%	Property investment
Management Co., Ltd.*	2008
成都天府華僑城公園廣場管理有限公司
Chengdu Tianfu OCT Chuangzhan Business	PRC 29 August	RMB10,000,000	100%	Consulting and
District Management Co., Ltd.*	2008			management of
成都天府華僑城創展商業區管理有限公司				entertainment
				project
Chengdu Tianfu OCT Commercial Plaza	PRC 29 August	RMB10,000,000	100%	Consulting and
Management Co., Ltd.*	2008			management of
成都天府華僑城商業廣場管理有限公司				entertainment
				project

II-9 -

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

	Place and		Target
	date of		Group’s
	incorporation/	Particulars of	effective
Name of subsidiary	establishment	paid up capital	interest	Principal activities
Chengdu Tianfu OCT Theater Management	PRC 29 August	RMB10,000,000	100%	Venue rental,
Co., Ltd.*	2008			management of
成都天府華僑城大劇院管理有限公司				entertainment
				project
Chengdu Tianfu OCT Riverside Business	PRC 29 August	RMB10,000,000	100%	Consulting and
Management Co., Ltd.*	2008			management of
成都天府華僑城純水岸商業管理有限公司				entertainment
				project
Chengdu Tianfu OCT Urban Entertainment	PRC 29 August	RMB10,000,000	100%	Consulting and
Co., Ltd.*	2008			management of
成都天府華僑城都市娛樂有限公司				entertainment
				project
Chengdu Tianfu OCT Hotel Management	PRC 29 August	RMB10,000,000	100%	Hotel management
Co., Ltd.*	2008			of entertainment
成都天府華僑城酒店管理有限公司				project

The English translation of the above subsidiaries’ names is for reference only. The official name of these companies is in Chinese.

Upon the completion of the Disposal, the Target Group will cease to be subsidiaries of the Company and the financial results of the Target Group will no longer be consolidated into the financial statements of the Group.

The Financial Information of the Target Group for the years ended 31 December 2017, 2018, 2019 and for the six months ended 30 June 2019 and 2020 (the “ Relevant Periods ”) is presented in Renminbi. All values are rounded to the nearest thousand except when otherwise indicated.

2 Basis of preparation of the Financial Information

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 30 June 2020 and the unaudited consolidated statements of profit or loss and other comprehensive income, unaudited consolidated statements of changes in equity and unaudited consolidated cash flow statements for the years ended 31 December 2017, 2018, 2019 and 30 June 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 this circular to be issued by the Company in connection with the Disposal.

II-10 -

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

The Financial Information has been prepared in accordance with the same accounting policies as those adopted by the Group in preparation of the consolidated financial statements of the Group for those respective years. Details of any changes in accounting policies are set out in note 3. The consolidated 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 ”).

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 or interim reports of the Company for the Relevant Periods.

As at 30 June 2020, the Target Group had net current liabilities of RMB1,932 million. The Target Company is dependent upon the financial support from its fellow subsidiary and its ability to generate sufficient cash flows from future operations to cover its operating costs and to meet its financing commitments.

The Directors of the Company have made an assessment and concluded that the Target Company is able to continue as a going concern for at least the next twelve months from 30 June 2020 and to meet its obligations, as and when they fall due, having regard to the fellow subsidiary, OCT West Investment Co., Ltd has confirmed to provide sufficient financial support to the Target Company so as to enable the Target Company to meet its liabilities and obligations as and when they fall due and to enable the Target Company to continue their business for twelve months after 30 June 2020. Consequently, the Directors of the Company consider it appropriate to prepare the Financial Information 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.

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 the 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.

II-11 -

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 three types of financial assets that are subject to HKFRS 9’s new expected credit loss model:

trade receivables
lease 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, 31 December 2018, 31 December 2019 and 30 June 2020, the identified impairment loss was immaterial.

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.

II-12 -

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

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

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.

The Target Group has elected to use the cumulative effect transition method and has recognised the cumulative effect of initial application as an adjustment to the opening balance of equity at 1 January 2018. Therefore, comparative information has not been restated and continues to be reported under HKAS 11 and HKAS 18. As allowed by HKFRS 15, the Target Group has applied the new requirements only to contracts that were not completed before 1 January 2018.

Revenue is recognised when a customer obtains control of goods or services and thus has the ability to direct the use and obtain the benefits from the goods or services.

The Target Group derives revenue from sales of properties, ticket sales from theme parks. The adoption of HKFRS 15 does not have a significant impact on when the Target Group recognises revenue from ticket sales from theme parks. The Target Group’s property development activities are mainly carried out in the PRC. Considering the contract terms, the Target Group’s business practice and the legal and regulatory environment in which the property development activities are taken place, the property sales contracts do not meet the criteria for recognising revenue over time and therefore revenue from property sales continues to be recognised at a point in time.

HKFRS 15 requires an entity to adjust the transaction price for the time value of money when a contract contains a significant financing component, regardless of whether the payments from customers are received significantly in advance of revenue recognition or significantly deferred.

Where payment schemes include a significant financing component, the transaction price is adjusted to separately account for this component. In the case of payments in advance, such adjustment results in interest expense being accrued by the Target Group to reflect the effect of the financing benefit obtained by the Target Group from the customers during the period between the payment date and the date delivered to the customers, This accrual increases the amount of the contract liability during the period of construction, and therefore increases the amount of revenue recognised when control of the completed property is transferred to the customer. The interest is expensed as accrued unless it is eligible to be capitalised under HKAS 23, Borrowing costs.

II-13 -

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

The Target Group considers, at the contract inception, that the period between when the entity transfers a property to a customer and when the customer pays for that property is less than one year, or the financing component of a specific contract is not significant. As a practical expedient, the Target Group needs not adjust the amount of consideration for the effects of a significant financing component. Therefore, this change in accounting policy had no significant impact on opening balances as at 1 January 2018.

3.3 Adoption of HKFRS 16

On adoption of HKFRS 16, the Target Group recognised lease liabilities in relation to leases which had previously been classified as “operating leases” under the principles of HKAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of 1 January 2019.

The recognised right-of-use assets were related to rentals of offices and measured at the amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the statement of financial position at 31 December 2018. There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at the date of initial application.

Practical expedients applied

In applying HKFRS 16 for the first time, the Target Group has used the following practical expedients permitted by the standard:

the use of a single discount rate to a portfolio of leases with reasonably similar characteristics;
the accounting for operating leases with a remaining lease term of less than 12 months as at 1 January 2019 as short-term leases; and
the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

The Target Group has also elected not to reassess whether a contract is or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date the Target Group relied on its assessment made applying HKAS 17 and HKFRIC 4 Determining whether an Arrangement contains a Lease.

The Target Group’s leasing activities and how these are accounted for

The Target Group leases various offices and store. Rental contracts are typically made for fixed periods of 1 to 3 years but may have extension options as described below. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.

II-14 -

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

Until the 2018 financial year, leases of property, plant and equipment were classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) were charged to profit or loss on a straight-line basis over the period of the lease.

From 1 January 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Target Group. The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

fixed payments (including in-substance fixed payments), less any lease incentives receivable;
variable lease payment that are based on an index or a rate;
amounts expected to be payable by the lessee under residual value guarantees;
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.

Right-of-use assets are measured at cost comprising the following:

the amount of the initial measurement of lease liability;
any lease payments made at or before the commencement date less any lease incentives received;
any initial direct costs; and
restoration costs

Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.

II-15 -

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

4 Non-adjusting events after the reporting period

(a) Finance lease of assets used in Chengdu Happy Valley

On 13 August 2020, the Target Company entered into a finance lease agreement with CMB Financial Leasing Company Limited (the “ Lessor ”), pursuant to which: (i) the Lessor conditionally agreed to purchase certain amusement and ancillary facilities (such as roller coaster and waterpark facilities) (“ Leased Assets ”) used in Chengdu Happy Valley currently owned by the Target Company, at the Purchase Consideration of RMB500,000,000, and (ii) following the acquisition, the Lessor conditionally agreed to lease the Leased Assets to the Target Company for Lease Term of 36 months, at an aggregate estimated payment of approximately RMB549,401,000. Upon expiry of the lease term, the Target Company shall purchase the Leased Assets at the repurchase consideration of RMB1.00.

(b) Disposal of equity of Chengdu OCT

On 4 September 2020, Bantix International entered into the equity transfer agreement with OCT Chengdu Investment Company Limited (“ OCT Chengdu Investment ”), which is a subsidiary of OCT Group, and the Target Company, pursuant to which Bantix International has conditionally agreed to sell, and OCT Chengdu Investment has conditionally agreed to acquire, the 50.99% equity interests in the Target Company beneficially owned by Bantix International at a consideration of RMB1,092,103,600. As a conditions precedent to the equity transfer agreement, Bantix International, OCT Chengdu Investment and the Target Company also entered into the debt transfer agreement, pursuant to which OCT Chengdu Investment has agreed to take up an assignment of the debt of RMB160,364,475.51 owed by the Target Company to Bantix International at a consideration of RMB160,364,000.

5 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. As far as the Target Group’s businesses are concerned, the outbreak mainly affected the Target Group’s operation of tourism theme park in relation to sales of tickets of theme park revenues.

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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THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

(A) THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

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 proposed disposal of Chengdu Tianfu Overseas Chinese Town Co., Ltd (the “ Target Company ”)(the “ Disposal ”) 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 consolidated statement of financial position of the Remaining Group as at 30 June 2020 as if the Disposal had been completed on 30 June 2020; and (ii) the consolidated statement of profit or loss of the Remaining Group, the consolidated statement of profit or loss and other comprehensive income of the Remaining Group, the consolidated cash flow statement of the Remaining Group for the year ended 31 December 2019 as if the Disposal had been completed on 1 January 2019.

The unaudited pro forma financial information of the Remaining 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 Disposal.

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 Remaining Group had the Disposal been completed as at the specified dates or any other dates.

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 for the year ended 31 December 2019 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.

III-1 -

APPENDIX III THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

2. Unaudited Pro Forma Consolidated Statement of Financial Position of the Remaining Group 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	The Group as at 30 June 2020 RMB’000 Note (a) 5,245,832 1,962,893 1,570,855 8,779,580 48,249 570 5,473,588 613,469 1,640,141 327,924 1,623 209,948 17,095,092 8,749,170 110,375 548,928 2,769,270 12,177,743	Pro forma adjustments RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Note((c) (i)) Note ((c) (ii)) Note ((c) (iii)) Note ((c) (iv)) Note (d) (1,265,054) (956,148) (420,089) (973) (1,058,175) (282,193) (22,283) (1,623) (113,856) (697,439) (2,156) (1,844) (177,984) 614,860 (160,364) (633,966) 160,364 1,088,308	The Remaining Group as at 30 June 2020 RMB’000 3,980,778 1,006,745 1,150,766
			6,138,289 47,276 570 4,415,413 331,276 1,640,141 305,641 – 96,092
			12,974,698
			8,049,575 108,531 825,440 3,383,976
			12,367,522

III-2 -

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

2. Unaudited Pro Forma Consolidated Statement of Financial Position of the Remaining Group at 30 June 2020

(Expressed in Renminbi)

Current liabilities Trade and other payables Contract liabilities Lease liabilities Bank and other loans Amount due to the Remaining Group Related party loans 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 RMB’000 Note (a) 2,794,882 477,924 27,667 1,598,015 – 1,486,806 492,948 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 9,033,393 4,596,330 13,629,723	Pro forma adjustments RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Note((c) (i)) Note ((c) (ii)) Note ((c) (iii)) Note ((c) (iv)) Note (d) (1,458,575) (380,223) (13,673) (614,860) 614,860 (624,406) (351,337) 14,910 (500,000) (951) (733) (41,548) 233,349 (807,428)	The Remaining Group as at 30 June 2020 RMB’000 1,336,307 97,701 13,994 1,598,015 – 862,400 156,521
			4,064,938

			8,302,584

			21,277,282
			6,602,361 1,429,510 185,939 3,828
			8,221,638

			13,055,644
			67,337 5,296,995 3,902,410
			9,266,742 3,788,902
			13,055,644

III-3 -

APPENDIX III THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

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

(Expressed in Renminbi)

Revenue Cost of sales Gross profit Other income Other net gains Distribution costs Administrative expenses Other operating expenses Profit from operations Finance costs Share of profits less losses of associates Share of losses of joint ventures Profit before taxation Income tax Profit for the year Attributable to: Equity holders of the Company Non-controlling interests Profit for the year	The Group for the year ended 31 December 2019 RMB’000 Note (a) 2,071,903 (1,306,174) 765,729 93,836 225,993 (103,200) (403,405) (4,014) 574,939 (268,732) 306,063 (8,150) 604,120 (354,514) 249,606 266,961 (17,355) 249,606	Pro forma adjustments RMB’000 RMB’000 RMB’000 RMB’000 Note ((e) (i)) Note ((e) (ii)) Note (f) Note (g) (1,383,753) 820,711 (1,641) 4,755 813 (148,766) 67,912 148,587 409 40,805 (4,755) (5,128) 8,157 321,905 18,777 (9,203) (148,766) 9,203	The Remaining Group for the year ended 31 December 2019 RMB’000 688,150 (485,463
			202,687 96,950 78,040 (35,288 (254,818 (3,605
			83,966 (232,682 300,935 7
			152,226 (32,609
			119,617
			127,769 (8,152
			119,617

III-4 -

APPENDIX III THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

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

Profit 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 RMB’000 Note (a) 249,606 166,598 (164,501) 11,246 (1,440) (154,695) 11,903 261,509 278,864 (17,355) 261,509	Pro forma adjustments RMB’000 RMB’000 RMB’000 RMB’000 Note ((e) (i)) Note((e) (ii)) Note (f) Note (g) 18,777 (148,766) 18,777 (9,203) (148,766) 9,203	The Remaining Group for the year ended 31 December 2019 RMB’000 119,617
			166,598 – (164,501 11,246 (1,440
			(154,695

			11,903

			131,520
			139,672 (8,152
			131,520

III-5 -

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

5. Unaudited Pro Forma Consolidated Cash Flow Statement of the Remaining Group for the year ended 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 a joint venture 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 from investing activities 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 Net cash generated from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at 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 RMB’000 Note (a) (114,308) (352,484) (5,105) (396,220) (868,117) (477,376) 2,971 150,289 (400,380) (23,379) 160,063 370,679 596,526 76,496 1,096 96,204 (6,930) 546,259 (24,140) 6,117,745 196,000 (5,570,571) 13,523 (4,826) (237,085) (144,829) 345,817 23,959 1,744,196 29,919 1,798,074	Pro forma adjustments RMB’000 RMB’000 RMB’000 Note (e) Note ((c) (iii)) Note (h) (856,558) 161,208 4,128 47,664 210,275 (21) 160,364 938,662 (25,000) (415,000) 858,670 (149,646) 149,646 (164,280)	The Remaining Group for the year ended 31 December 2019 RMB’000 (970,866 (191,276 (977 (348,556
			(1,511,675
			(267,101 2,950 1,249,315 (400,380 (23,379 160,063 370,679 596,526 51,496 1,096 96,204 (6,930
			1,830,539
			(24,140 5,702,745 196,000 (4,711,901 13,523 (4,826 (237,085 (144,829
			789,487

			1,108,351 1,744,196 29,919
			2,882,466

III-6 -

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

Notes to the Unaudited Pro Forma Financial Information of the Remaining Group:

(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 Equity Transfer Agreement and Debt Transfer Agreement entered into between the Group and OCT (Chengdu) Investment Co., Ltd (the “ Purchaser ”) on 4 September 2020, the consideration for the equity disposal and debt transfer of the Target Group is RMB1,092,103,600 and RMB160,364,475.51 respectively.
(c) The adjustments represent:
(i) the exclusion of assets and liabilities of the Target Group as if the Disposal had taken place on 30 June 2020 for the unaudited pro forma consolidated statement of financial position. The balances are extracted from the unaudited financial information of the Target Group as at 30 June 2020 as set out in Appendix II to this circular.
(ii) reversing the impact of fair value adjustments on properties when the Remaining Group first acquired control of the Target Group in 2010.

In September 2010, the Group increased its interest in the Target Company from 25% to approximately 50.99% by solely contributing, RMB588,000,000 into the Target Company pursuant to a capital increase agreement dated 9 April 2010.

The fair value adjustments represent the difference between the fair value of inventories and the book value of such inventories as at the date of capital injection. The fair value adjustments were amortised with such inventories sold, and the unamortised amount of inventories and deferred tax effect is RMB2,156,000 and RMB733,000 respectively on 30 June 2020.

(iii) reinstatement of the intragroup balance of RMB614,860,000 due to the Remaining Group by the Target Group as extracted from the financial information of the Target Group as at 30 June 2020 as set out in Appendix II.
(iv) pursuant to the Debt Transfer Agreement, RMB160,364,475.51 will be assigned to OCT Chengdu Investment, of which 50% of the Debt Interest Consideration will be settled within one month from the effective date of the Debt Transfer Agreement and the remaining 50% will be settled within three months from the effective date of the Debt Transfer Agreement.
(d) The adjustments represent:
(i) the consideration for the Target Group’s equity interest of RMB1,092,103,600 pursuant to the Equity Transfer Agreement (as stated above). The estimated tax effect of the Disposal amounted to RMB14,910,000, represents 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.
III-7 -

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

(ii) 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 (d)(i))
Less: Net assets of the Target Group as at 30 June 2020 attributable to equity holders of
the Company
Estimated professional costs directly attributable to the Disposal
Estimated gain on the Disposal
Estimated tax effects in relation with the gain on the Disposal calculated at the
applicable tax rates (Note (d)(i))
Net effect on the profit for the year and the equity attributable to equity holders of the
Company

Net assets of the Target Group as at 30 June 2020 attributable to the equity holders of
calculated as follows:
Net assets of the Target Group as at 30 June 2020 as set out in Appendix II
Add: Fair value adjustments on properties (Note (c)(ii))
Adjusted net assets of the Target Group as at 30 June 2020
Less: de-recognition of non-controlling interests in the Target Group (49.01% of
the adjusted net asset of the Target Group as at 30 June 2020)
Net assets of the Target Group attributable to the equity holders of the Company

RMB'000
1,092,104
(840,049)
(3,796)
248,259
(14,910)
233,349
the Company is
RMB'000
1,646,054
1,423
1,647,477
(807,428)
840,049

(e) The adjustments represent:
(i) 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 balances 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.
(ii) the results of the Target Group for the year ended 31 December 2019 which are attributable to non-controlling interests.
(f) The adjustments represent the interests accrued by the Remaining Group for the Target Group's amount due to the Remaining Group which have been eliminated in the consolidated financial statements of the Group for the year ended 31 December 2019, and would not have been eliminated if the Disposal had been completed on 1 January 2019.
III-8 -

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

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

Total consideration for the Disposal (Note (d)(i))
Less: Net assets of the Target Group as at 1 January 2019 attributable to equity holders of the
Company
Estimated professional costs directly attributable to the Disposal
Estimated loss on the Disposal
Estimated tax effects in relation with the loss on the Disposal calculated at the applicable tax
rates
Net effect on the loss for the year and the equity attributable to equity holders of the
Company

Net assets of the Target Group as at 1 January 2019 attributable to the equity holders of
calculated as follows:
Net assets of the Target Group as at 1 January 2019 as set out in Appendix II
Add: Fair value adjustments on properties
Less: Non-controlling interests in the Target Group
Net assets of the Target Group attributable to the equity holders of the Company

RMB'000
1,092,104
(1,237,074)
(3,796)
(148,766)
–
(148,766)
the Company is
RMB'000
2,416,927
9,183
(1,189,036)
1,237,074

** The net asset value of the Target Group has decreased significantly in 30 June 2020 as compared to 1 January 2019 due to two dividend distributions of RMB91,197,000 and RMB594,704,000 approved by the board of the Target Company in December 2019 and May 2020 respectively. 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 an estimated loss on Disposal if it had taken place on 1 January 2019.

(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 (d)(i)) 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 1,092,104 (149,646) (3,796) 938,662

(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 Remaining Group.

III-9 -

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

(j) The estimated gain on the Disposal, net cash inflows from the Disposal and the final consideration 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 Remaining 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) Issue of perpetual capital securities

On 8 July 2020 and 20 August 2020, the Company entered into the Subscription Agreement in relation to the issue of a total amount of US$800,000,000 4.50% senior guaranteed perpetual capital securities (“ the Securities ”). The Securities will be unconditionally and irrevocably guaranteed by Overseas Chinese Town Enterprises Limited Company.

(ii) Finance lease of assets used in Chengdu Happy Valley

On 13 August 2020, the Target Company, entered into a finance lease agreement with CMB Financial Leasing Company Limited (the “ Lessor ”), pursuant to which: (i) the Lessor conditionally agreed to purchase certain amusement and ancillary facilities (such as roller coaster and waterpark facilities) (“ Leased Assets ) used in Chengdu Happy Valley currently owned by the Target Company, at the Purchase Consideration of RMB500,000,000, and (ii) following the acquisition, the Lessor conditionally agreed to lease the Leased Assets to the Target Company for Lease Term of 36 months, at an aggregate estimated payment of approximately RMB549,401,000. Upon expiry of the lease term, the Target Company shall purchase the Leased Assets at the repurchase consideration of RMB1.00.

(iii) Repayment amount due to the Remaining Group

On 14 August 2020, the partial amount to RMB444,968,000 of amount due to the Remaining Group was settled by the Target Group. The partial amount to RMB160,364,000 will be assigned to OCT Chengdu Investment pursuant to the Debt Interest Consideration, and the remaining amount to RMB9,528,000 will be settled before the Disposal by the Target Group.

(iv) Disposal listed securities in Tongcheng-Elong

Between 27 August 2020 and 28 August 2020, City Legend International Limited, a wholly-owned subsidiary of the Company, disposed on market an aggregate of 5,919,600 Tongcheng-Elong Shares in a series of transactions, at the average selling price of HK$15.82 per Tongcheng-Elong Share. The aggregate gross sale proceeds from the Disposal were approximately HK$93.7 million(approximately RMB84.3 million) (excluding transaction costs).

(l) No adjustment has been made to reflect any trading results or other transaction of the Group 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.
III-10 -

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

(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 33] 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 30 September 2020 (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 proposed disposal of Chengdu Tianfu Overseas Chinese Town Co., Ltd (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 for the year ended 31 December 2019 as if the Proposed 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 report of 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 annual report 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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THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

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
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APPENDIX III

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

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

30 September 2020

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PROPERTY VALUATION REPORT

APPENDIX IV

The following is the text of a letter, summary of valuations and valuation reports prepared for the purpose of incorporation in this circular received from Cushman & Wakefield Limited, an independent property valuer, in connection with its opinion of market values in existing state of the Properties in the PRC as at 30 June 2020.

==> picture [93 x 38] intentionally omitted <==

16/F Jardine House 1 Connaught Place Central Hong Kong

30 September 2020

The Directors Overseas Chinese Town (Asia) Holdings Limited 59/F., Bank of China Tower 1 Garden Road Hong Kong

Dear Sirs,

INSTRUCTIONS, PURPOSE & VALUATION DATE

In accordance with your instructions for us to value the Properties of 成都天府華僑城實業發展有限公司 (Chengdu Tianfu OCT Industry Development Co., Ltd.) (the “ Target Company ”) and its subsidiaries and a joint venture (together referred to as the “ Target Group ”) in the People’s Republic of China (the “ PRC ”), we confirm that we have carried out inspection, made relevant enquiries and obtained such further information as we considered necessary for the purpose of providing you with our opinion of the market values in existing state of the Properties as at 30 June 2020 (the “ valuation date* ”).

DEFINITION OF MARKET VALUE

Our valuations of each of the Properties represent its Market Value which in accordance with HKIS Valuation Standards 2017 published by The Hong Kong Institute of Surveyors (“ HKIS ”) is defined as “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”.

VALUATION BASIS & ASSUMPTIONS

Our valuations exclude an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangement, special considerations or concessions granted by anyone associated with the sale, or any element of value available only to a specific owner or purchaser.

* For identification only

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APPENDIX IV

PROPERTY VALUATION REPORT

In the course of our valuation of the Properties situated in the PRC, with reference to the PRC Legal opinion of the legal adviser, V&T Law Firm (萬商天勤（深圳）律師事務所), we have prepared our valuation on the basis that transferable land use rights in respect of the Properties for its specific term at nominal annual land use fees have been granted and that any premium payable have already been fully paid. We have relied on the information and advice given by the Company and the PRC legal opinion of the Company’s legal adviser, dated 30 September 2020, regarding the title to the Properties and the interest in the Properties. In valuing the Properties, we have prepared our valuation on the basis that the owner has enforceable title to the Properties and have free and uninterrupted rights to use, occupy or assign the Properties for the whole of the unexpired terms as granted.

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

METHOD OF VALUATION

In valuing the Properties held by Target Group for sale and owner-occupation in the PRC, we have adopted Direct Comparison Approach by making reference to comparable sales evidence as available in the relevant market.

Direct Comparison Approach is a commonly used method for properties held for sale and owneroccupation, there are relevant comparable sales evidence for reference to arrive at the market values. This Approach rests on the wide acceptance of the market evidence as the best indicator that can be extrapolated to similar properties, subject to allowances for variable factors.

In valuing the Properties held by the Target Group for investment, we have adopted Income Capitalisation Approach by capitalising the rental derived from the existing tenancies with due provision of the reversionary rental potential of the Properties, or where appropriate, by Direct Comparison Approach by making reference to comparable sales evidences as available on the market.

Income Capitalisation Approach is a commonly used method for investment properties, which takes into account the current tenancy details of the leased Properties in the valuation. This Approach estimates the values of the Properties on a market basis, by capitalising the existing rental of all lettable units of each of the Properties for the respective unexpired terms of contractual tenancies; whilst vacant units are assumed to be let at their respective market rents as at the Valuation Date. Upon expiry of the existing tenancies, each unit is assumed to be let at its market rent as at the Valuation Date, which is in turn capitalised for the unexpired term of the land use right under which the Property is held. The summation of the capitalised value of the term rental for the leased portion, the capitalised value of the reversion market rental as appropriately deferred for the leased portion and the capitalised value of the vacant portion provides the market value of each of the Properties.

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PROPERTY VALUATION REPORT

APPENDIX IV

In valuing the Property held by Target Group for operation in the PRC, we have valued the Property under the basis of going concern, and we have adopted Income Capitalisation Approach by making reference to its historical performance of the past years. During the course of the valuation, we have relied on the operating income generated from the operation during corresponding periods and made reference to the required rate of return of similar form of investment.

In valuing the Properties held by the Target Group for development in the PRC, we have valued them on the basis that they will be developed and completed in accordance with the Target Group’s latest development proposal provided to us. We have adopted Direct Comparison Approach by making reference to comparable sales evidence as available in the relevant market and where appropriate, we have also taken into account the estimated total and expended construction costs as provided.

In valuing the Properties, which are held for investment in the PRC, we have adopted the Income Capitalisation Approach of valuation or where appropriate by the Direct Comparison Approach. Our key assumptions used in the Income Capitalisation Method Valuation are summarised as below:

Use	Market Rent	Yield
	(RMB/sq m)
Commercial	30 to 140	7.2% to 8.0%
Office	40 to 60	8.0% to 8.5%

We have prepared our valuation on the following basis and analysis:

In our Income Capitalisation Approach of valuation, we have made reference to some rent comparable in the Properties and nearby development. The unit rent of these comparable commercial units on the first floor basis range from about RMB30 to RMB139 per sq m per month. The unit market rent assumed by us are consistent with the said rent comparable.

In our Direct Comparison Approach of valuation, we have also made reference to some sales comparable in nearby development. The unit price of these comparable properties ranges from about RMB28,000 to RMB32,000 per sq m for commercial units on the first floor, RMB11,500 to RMB12,200 per sq m for office units and RMB60,000 to RMB300,000 per car parking space. The unit values of our valuation are consistent with the said sales comparable.

The rent and sales comparable selected by us are exhaustive.

In arriving at the key assumptions, appropriate adjustments and analysis are considered to the differences in several aspects including but not limited to time, location and physical characteristics between the Properties and the comparable properties. The general basis of adjustment is if the Properties are better than the comparable properties, an upward adjustment is made. Alternatively, if the Properties are inferior or less desirable than the comparable properties, a downward adjustment is made.

In valuing the Properties, we have 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 and HKIS Valuation Standards 2017.

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PROPERTY VALUATION REPORT

APPENDIX IV

SOURCE OF INFORMATION

In the course of our valuation, we have relied to a considerable extent on the information given by the Target Group and have accepted advice on such matters as planning approvals or statutory notices, easements, construction cost, tenure, identification of the Properties, site and floor areas and all other relevant matters.

Dimensions, measurements and areas included in the valuation reports are based on the information provided to us and are therefore only approximations. We have had no reason to doubt the truth and accuracy of the information provided to us by the Target Group which is material to the valuation. We were also advised by the Target Group that no material facts have been omitted from the information provided.

We would point out that the copies of documents provided to us are mainly compiled in Chinese characters and the transliteration into English represents our understanding of the contents. We would therefore advise the Company to make reference to the original Chinese edition of the documents and consult your legal adviser regarding the legality and interpretation of these documents.

TITLE INVESTIGATION

We have been provided by the Target Group with copies of documents in relation to the current title to the Properties. However, we have not been able to conduct searches to verify the ownership of the Properties; we have not inspected the original documents to ascertain any amendments which may not appear on the copies handed to us. We are also unable to ascertain the title of the Properties in the PRC and we have therefore relied on the advice given by the PRC Legal adviser and the Company.

SITE INSPECTION

Our Chengdu Office valuer, Yue Xiu (Member of 中國土地估價師與土地登記代理人協會會員 (China Real Estate Valuers and Agents Association) with 3 years of experience), has inspected the exterior and, wherever possible, the interior of the Properties in June 2020. However, no structural survey has been made, but in the course of our inspection, we did not note any serious defects. We are not, however, able to report whether the Properties are free of rot, infestation or any other structural defects. No tests were carried out to any of the services. Moreover, we have not carried out investigation on site to determine the suitability of the soil conditions and the services etc. for any future development. Our valuation is prepared on the assumption that these aspects are satisfactory and that no extraordinary costs or delays will be incurred during the construction period.

Unless otherwise stated, we have not carried out on-site measurements to verify the site and floor areas of the Properties and we have assumed that the areas shown on the copies of the documents handed to us are correct.

CURRENCY

Unless otherwise stated, all monetary amounts indicated herein our valuation are in Renminbi (RMB) which is the official currency of the PRC.

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PROPERTY VALUATION REPORT

APPENDIX IV

We attach herewith the summary of valuations and valuation reports.

Yours faithfully,

For and on behalf of

Cushman & Wakefield Limited

Philip C Y Tsang

Registered Professional Surveyor (General Practice) Registered China Real Estate Appraiser MSc, MHKIS Director

Note: Mr. Philip C Y Tsang is Registered Professional Surveyor who has over 27 years’ experience in the valuation of properties in the PRC.

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PROPERTY VALUATION REPORT

APPENDIX IV

SUMMARY OF VALUATIONS

Group A – Properties held by the Target Company

									Market value
									in existing
									state
			Market value in	existing state as at 30 June 2020				Interest	attributable
			Held for					attributable	to the Target
			owner-	Held for	Held for	Held for		to the Target	Group as at
No.	Property	Held for sale	occupation	operation	investment	development	Sub-total:	Group	30 June 2020
		RMB	RMB	RMB	RMB	RMB	RMB	%	RMB
A1	The unsold portion of Pure Water Shore	163,910,000	–	–	–	–	163,910,000	100%	163,910,000
	Phase I (No. 9 Xihua Avenue),
	Phase II (No. 66 Huafeng Road),
	Phase III (Building 68, No. 66 Huafeng Road),
	East Bank Phase I (No. 283, Jinfeng Road),
	East Coast Phase II (No. 333, Section 1,
	North Third Ring Road),
	East Coast Phase III (No. 393, No. 96, Section 1,
	North Third Ring Road), Yuanan Phase I
	(No. 393, Section 1, North Third Ring Road),
	Yuanan Phase IV (B plots on both sides of the
	Shaxi Line of Outer Sanhuan Road),
	Jinniu District, Chengdu, Sichuan Province,
	the PRC
A2	The unsold portion of Tianyu,	97,620,000	–	–	–	–	97,620,000	100%	97,620,000
	No. 9 Xihua Avenue on the outer side of
	Jiaodali Overpass,
	Building 130 and basement, No. 333, Section 1,
	North Third Ring Road, Jinniu District, Chengdu,
	Sichuan Province, the PRC
A3	2 office buildings in the land C within	–	35,580,000	–	–	–	35,580,000	100%	35,580,000
	the planned red line on both sides of the
	Shaxi Line of Outer Sanhuan Road,
	Jinniu District, Chengdu, Sichuan Province,
	the PRC
A4	Pure Water Shore Clubhouse,	–	29,000,000	–	–	–	29,000,000	100%	29,000,000
	No. 1, Level B1, 1 to 2, Building 67,
	No. 200 Jinfeng Road,
	Jinniu District, Chengdu, Sichuan Province,
	the PRC

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PROPERTY VALUATION REPORT

APPENDIX IV

									Market value
									in existing
									state
			Market value in	existing state as at 30 June 2020				Interest	attributable
			Held for					attributable	to the Target
			owner-	Held for	Held for	Held for		to the Target	Group as at
No.	Property	Held for sale	occupation	operation	investment	development	Sub-total:	Group	30 June 2020
		RMB	RMB	RMB	RMB	RMB	RMB	%	RMB
A5	Chengdu Happy Valley Theme Park,	–	–	1,249,700,000	–	–	1,249,700,000	100%	1,249,700,000
	No. 16 Xihua Avenue, Jinniu District,
	Chengdu, Sichuan Province, the PRC
A6	Unit Nos. 101-102, Level 1, Real Estate Phase V,	–	–	–	6,940,000	–	6,940,000	100%	6,940,000
	Building 120, No. 393, Section 3, Sanhuan,
	Jinniu District, Chengdu, Sichuan Province,
	the PRC
A7	Retail unit at Pure Water Shore,	–	–	–	22,970,000	–	22,970,000	100%	22,970,000
	No. 200 Huafeng Road, Jinniu District, Chengdu,
	Sichuan Province, the PRC
A8	Retail unit and carpark at Park Plaza,	–	–	–	379,000,000	–	379,000,000	100%	379,000,000
	Chengdu Happy Valley Outlet,
	No. 16 Xihua Avenue (three-ring side of the city)
	Jinniu District, Chengdu, Sichuan Province,
	the PRC
A9	East Coast Clubhouse in the land C within the	–	–	–	45,000,000	–	45,000,000	100%	45,000,000
	planned red line on both sides of the Shaxi Line,
	the Third Ring Road, Jinniu District, Chengdu,
	Sichuan Province, the PRC
A10	Overseas Chinese Town Children’s Living	–	–	–	85,000,000	–	85,000,000	100%	85,000,000
	Museum, No. 10 Xihua Avenue, Jinniu District,
	Chengdu, Sichuan Province, the PRC

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PROPERTY VALUATION REPORT

APPENDIX IV

No. Property A11 Retail at Overseas Chinese Town Life Plaza, Near Xihua Avenue, Jinniu District, Chengdu, Sichuan Province, the PRC A12 Shopping mall, land A on both sides of the Shaxi Line of Outer Sanhuan Road, Jinniu District, Chengdu, Sichuan Province, the PRC Sub-total:	Market value in existing state as Held for sale Held for owner- occupation Held for operation RMB RMB RMB – – – – – – 261,530,000 64,580,000 1,249,700,000	at 30 June 2020 Held for investment Held for development RMB RMB 22,020,000 – – 321,580,000 560,930,000 321,580,000	Sub-total: Interest attributable to the Target Group RMB % 22,020,000 100% 321,580,000 100% 2,458,320,000	Market value in existing state attributable to the Target Group as at 30 June 2020 RMB 22,020,000 321,580,000
				2,458,320,000

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PROPERTY VALUATION REPORT

APPENDIX IV

SUMMARY OF VALUATIONS

Group B – Properties held by 成都天府華僑城公園廣場管理有限公司 (Chengdu Tianfu OCT Park Plaza Management Co., Ltd.) (“OCT Park Plaza”), a wholly owned subsidiaries of the Target Company, in the PRC

No. Property B1 The unsold carparks portion of Pure Water Shore Phase I (No. 9 Xihua Avenue), Pure Water Shore Phase II (No. 260 Huafeng Road), Pure Water Shore Phase IV (BLDG 76, No. 66 Huafeng Road), East Coast Phase I, (No. 283, Jinfeng Road), East Coast Phase II (No. 333, Section 1, North Third Ring Road), Jinniu District, Chengdu, Sichuan Province, the PRC Sub-total:	Market value in existing state as Held for sale Held for owner- occupation Held for operation RMB RMB RMB 66,962,000 – – 66,962,000 – –	at 30 June 2020 Held for investment Held for development RMB RMB – – – –	Sub-total: Interest attributable to the Target Group RMB % 66,962,000 100% 66,962,000	Market value in existing state attributable to the Target Group as at 30 June 2020 RMB 66,962,000
				66,962,000

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PROPERTY VALUATION REPORT

APPENDIX IV

SUMMARY OF VALUATIONS

Group C – Properties held by 成都天府華僑城商業廣場管理有限公司 (Chengdu Tianfu OCT Commercial Plaza Management Co., Ltd.) (“OCT Commercial”), a wholly owned subsidiaries of the Target Company, in the PRC

No. Property C1 Creative Centre, No. 221, Section 1, North Third Ring Road, Jinniu District, Chengdu, Sichuan Province, the PRC C2 Creative Centre, No. 221, Section 1, North Third Ring Road, Jinniu District, Chengdu, Sichuan Province, the PRC C3 Creative Centre, No. 221, Section 1, North Third Ring Road, Jinniu District, Chengdu, Sichuan Province, the PRC Sub-total:	Market value in existing state as Held for sale Held for owner- occupation Held for operation RMB RMB RMB 15,555,000 – – – 17,079,000 – – – – 15,555,000 17,079,000 –	at 30 June 2020 Held for investment Held for development RMB RMB – – – – 171,281,000 – 171,281,000 –	Sub-total: Interest attributable to the Target Group RMB % 15,555,000 100% 17,079,000 100% 171,281,000 100% 203,915,000	Market value in existing state attributable to the Target Group as at 30 June 2020 RMB 15,555,000 17,079,000 171,281,000
				203,915,000

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PROPERTY VALUATION REPORT

APPENDIX IV

SUMMARY OF VALUATIONS

Group D – Properties held by 成都天府華僑城萬匯商城管理有限公司 (Chengdu Tianfu OCT Wanhui Management Co., Ltd.) (“OCT Wanhui), a wholly owned subsidiaries of the Target Company, in the PRC

No. Property D1 Happy Hui Plaza/Cloud Shore, 217 Huafeng Road, Jinniu District, Chengdu, Sichuan Province, the PRC D2 Sam’s Club, No. 223, Section 1, North Third Ring Road, Jinniu District, Chengdu, Sichuan Province, the PRC Sub-total:	Market value in existing state as Held for sale Held for owner- occupation Held for operation RMB RMB RMB 569,030,000 – – – – – 569,030,000 – –	at 30 June 2020 Held for investment Held for development RMB RMB – – 447,950,000 – 447,950,000 –	Sub-total: Interest attributable to the Target Group RMB % 569,030,000 100% 447,950,000 100% 1,016,980,000	Market value in existing state attributable to the Target Group as at 30 June 2020 RMB 569,030,000 447,950,000
				1,016,980,000

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PROPERTY VALUATION REPORT

APPENDIX IV

SUMMARY OF VALUATIONS

Group E – Property held by 成都天府華僑城湖濱商業管理有限公司 (Chengdu Tianfu OCT Lakeside Business Management Co., Ltd.) (“OCT Lakeside”), a 49% owned joint venture of the Target Company, in the PRC

No. Property E1 A piece of land at land A on both sides of the Shaxi Line of Outer Sanhuan Road, Jinniu District, Chengdu, Sichuan Province, the PRC Sub-total: Grand Total:	Market value in existing state as Held for sale Held for owner- occupation Held for operation RMB RMB RMB – – – – – – 913,077,000 81,659,000 1,249,700,000	at 30 June 2020 Held for investment Held for development RMB RMB – 268,090,000 – 268,090,000 1,180,161,000 589,670,000	Sub-total: Interest attributable to the Target Group RMB % 268,090,000 49% 268,090,000 4,014,267,000	Market value in existing state attributable to the Target Group as at 30 June 2020 RMB 131,364,100
				131,364,100 3,877,541,100

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PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION REPORT

Group A – Properties held by the Target Company

Properties held for sale in the PRC

						Market Value in
					Particulars	existing state as at
	Property	Description and tenure			of occupancy	30 June 2020
A1.	The unsold portion of	Pure Water Shore is a mixed-use development erected upon			The Property	RMB163,910,000
	Pure Water Shore	various parcels of land completed in 2008 and 2014.			was vacant.	(RENMINBI ONE
	Phase I					HUNDRED SIXTY
	(No. 9 Xihua Avenue),	The Property comprises the portion of Pure Water Shore,		East		THREE MILLION
	Phase II	Coast and Yunan with 438 carparks, 25 retail units and 5				NINE HUNDRED
	(No. 66 Huafeng Road),	residential units:				TEN THOUSAND)
	Phase III (Building 68,
	No. 66 Huafeng Road),		Gross Floor			(100% interest
	East Coast Phase I	Uses		Area		attributable to the
	(No. 283, Jinfeng Road),			(sq m)		Target Group:
	East Coast Phase II					RMB163,910,000
	(No. 333, Section 1,	15 Carparks at Pure Water Shore Phase I (unsold)		475.98		(RENMINBI ONE
	North Third Ring Road),	8 Carparks at Pure Water Shore Phase II (unsold)		265.08		HUNDRED SIXTY
	East Coast Phase III	1 Carparks at Pure Water Shore Phase III (unsold)		33.76		THREE MILLION
	(No. 393, No. 96, Section	28 Carpark at East Coast Phase I (pre-sold)	1,021.91			NINE HUNDRED
	1, North Third Ring Road),	6 Carparks at East Coast Phase II (unsold)		348.01		TEN THOUSAND)
	Yuanan Phase I	1 Carpark at East Coast Phase II (pre-sold)		54.57
	(No. 393, Section 1,	143 Carparks at East Coast Phase III (unsold)	5,184.19
	North Third Ring Road),	1 Carpark at East Coast Phase III (pre-sold)		37.05
	Yuanan Phase IV	7 Carparks at Yuanan Phase I (unsold)		216.11
	(B plots on both sides of	226 Carparks at Yuanan Phase IV (unsold)	8,113.02
	the Shaxi Line of Outer	2 Carparks at Yuanan Phase IV (pre-sold)		71.73
	Sanhuan Road),	25 Retail	6,535.95
	Jinniu District, Chengdu,	1 Residential unit at Yuanan Phase I (unsold)		89.63
	Sichuan Province,	2 Residential units at Yuanan Phase I (pre-sold)		245.16
	the PRC	2 Residential units at Yuanan Phase IV (pre-sold)		257.80
		Total:	22,949.95

(100% interest attributable to the Target Group: RMB163,910,000 (RENMINBI ONE HUNDRED SIXTY THREE MILLION NINE HUNDRED TEN THOUSAND))

The Property is planned for commercial and residential and carpark uses; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for commercial use and 28 September 2076 for residential use.

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PROPERTY VALUATION REPORT

APPENDIX IV

Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to the Target Company:

Certificate	No.	Use	Expiry Date	Site Area
				(sq m)
(2015)123		Commercial/Office	28 September 2046/28 September 2066	22,495.78

As advised by the Target Group, the Property is erected on part of the land.

(2) According to Building Ownership Certificates, the building ownership of the Property have been vested in the Target Company:

Certificate	Building	Gross Floor Area
		(sq m)
2358838	Pure Water Shore Phase I	18,537.48
2408796	Pure Water Shore Phase I	19,298.97
2831154	Pure Water Shore Phase II	9,298.85
2976107	Pure Water Shore Phase II	34,184.50
3313621	Pure Water Shore Phase III	4,790.49
3313785	East Coast Phase I	1,735.53
3313792	East Coast Phase I Group A2	38,065.87
3313783	East Coast Phase I Group A3	7,248.40
3691362	East Coast Phase II	22,290.43
4138218	East Coast Phase III	13,987.56
4733581	Yunan Phase I	43,650.72

As advised by the Target Group, the Property is part of the said buildings.

(3) According to the Target Group, 4 residential units and 4 carparks are pre-sold at a total consideration of RMB6,133,000. We have taken into account the said pre-sold consideration.
(4) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights and building ownership by the Target Company are legal and effective in accordance with the relevant laws and regulations; and
(ii) the Target Company legally holds the real estate interests including the land use rights and buildings, without the situation of right limitation, and can dispose of them according to law.
(5) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate Yes

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PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION REPORT

Properties held for sale in the PRC

						Market Value in
					Particulars of	existing state as at
	Property	Description and tenure			occupancy	30 June 2020
A2.	The unsold portion of	Tianyu is a mixed-use development			The Property was	RMB97,620,000
	Tianyu, No. 9 Xihua	completed in July 2018.			vacant.	(RENMINBI
	Avenue on the outer side					NINETY SEVEN
	of Jiaodali Overpass,	The Property comprises	the unsold			MILLION SIX
	Building 130 and	portion of Tianyu with 13				HUNDRED
	basement, No. 333,	apartments, 333 carparks and a				TWENTY
	Section 1, North Third	clubhouse:				THOUSAND)
	Ring Road, Jinniu
	District, Chengdu,		Gross	Floor		(100% interest
	Sichuan Province, the	Uses		Area		attributable to the
	PRC		(sq m)			Target Group:
						RMB97,620,000
		3 Apartments	1,200.14			(RENMINBI
		333 Carpark	14,642.01			NINETY SEVEN
		Clubhouse	895.01			MILLION SIX
						HUNDRED
						TWENTY
		Total:	16,737.16			THOUSAND))

The Property is planned for residential and carpark uses; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

The land use rights of the Property have been granted for a term due to expire on 28 September 2076 for residential use.

Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to the Target Company with details as follows:

Certificate No. Use Expiry Date Site Area (sq m) (2010)821 Urban mixed residential land Residential: 28 September 2076 85,112.18 Retail: 28 September 2046

As advised by the Target Group, the Property is erected on part of the land.

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PROPERTY VALUATION REPORT

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(2) According to the Building Ownership Certificates, the building ownership of the Property have been vested in the Target Company:

Certificate No.	Building	Number	Gross Floor Area
			(sq m)
(2014)0105572	Apartment	1	455.03
(2019)0129447	Apartment	1	346.46
(2019)0105155	Apartment	1	348.65
(2019)0129084	Tianyu Villa Carpark	348	15,361.52
(2019)0129085	Tianyu Villa	1	895.01

(3) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights and building ownership by the Target Company are legal and effective in accordance with the relevant laws and regulations;
(ii) the Target Company legally holds the real estate interests including the land use rights and buildings, without the situation of right limitation, and can dispose of them according to law.
(4) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate Yes

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PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION REPORT

Properties held for owner-occupation in the PRC

Market Value in Particulars of existing state as at Property Description and tenure occupancy 30 June 2020 A3. 2 office buildings in The Property comprises 2 office The Property is RMB35,580,000 the land C within buildings completed in 2014. owner-occupied. (RENMINBI the planned red line THIRTY FIVE on both sides of the Gross Floor MILLION FIVE Shaxi Line of Outer Uses Area HUNDRED EIGHTY Sanhuan Road, (sq m) THOUSAND) Jinniu District, Chengdu, Sichuan Province, Office Building 1,420.24 (100% interest the PRC Office Building 5,474.44 attributable to the Target Group: RMB35,580,000 Total: 6,894.68 (RENMINBI THIRTY FIVE The Property is planned for office MILLION FIVE uses; there is no environmental HUNDRED EIGHTY issues and there is THOUSAND))

The Property is planned for office uses; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for leisure land use.

Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to the Target Company with details as follows:

Certificate No. Use Expiry Date Site Area (sq m) (2008)1132 Leisure land 29 September 2046 466,977.02

As advised by the Target Group, the Property is erected on part of the land.

(2) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights of the land by the Target Company are legal and effective in accordance with the relevant laws and regulations;
(ii) the Target Company has legally obtained the approval and permission issued by the relevant government departments in the process of the development and construction of the land. The construction has completed the completion acceptance checking; and
(iii) the Target Company legally holds the real estate interests including the land use rights and buildings, without the situation of right limitation, and can dispose of them according to law.
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(3) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate No*

As the PRC legal opinion states that the Target Company legally holds the real estate interests including the land use rights and buildings; we consider this will not affect the legal title of the Property to the Target Company, we have prepared the valuation on good title basis.
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PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION REPORT

Properties held for owner-occupation in the PRC

Market Value in Particulars of existing state as at Property Description and tenure occupancy 30 June 2020 A4. Pure Water Shore Pure Water Shore is a mixed-use The Property is RMB29,000,000 Clubhouse, development completed in 2014. occupied as (RENMINBI No. 1, Level B1, 1 to 2, residential TWENTY NINE Building 67, No. 200 The Property comprises a residential clubhouse. MILLION) Jinfeng Road, Jinniu clubhouse in Pure Water Shore District, Chengdu, completed in 2014 with a total gross Portion with (100% interest Sichuan Province, the floor area of 4,949.39 sq m. 1,626.20 sq m is attributable to the PRC subject to various Target Group: The Property is planned for tenancies with the RMB29,000,000 residential ancillary use; there is no latest expiry in (RENMINBI environmental issues and litigation 2023 at total TWENTY NINE dispute; there is no plan for current monthly MILLION)) renovation or change the use of the rent of Property. RMB44,169.35. The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for commercial use and 28 September 2076 for residential use.

Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to the Target Company:

Certificate No.	Use	Expiry Date	Site Area
			(sq m)
(2008)679	Commercial	28 September 2046	296,770.54
As advised by the Target Group, the Property is erected on part of the land.

(2) According to Building Ownership Certificates, the building ownership of the Property have been vested in the Target Company:

Certificate	No.	Building	Gross Floor Area
			(sq m)
4525617		Pure Water Shore Clubhouse	4,949.39

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(3) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights and building ownership by the Target Company are legal and effective in accordance with the relevant laws and regulations; and
(ii) the Target Company legally holds the real estate interests including the land use rights and buildings, without the situation of right limitation, and can dispose of them according to law.
(4) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate Yes

IV-20 -

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION REPORT

Properties held for operation in the PRC

Property

Description and tenure

Particulars of occupancy

Market Value in existing state as at 30 June 2020

A5. Chengdu Happy Valley Theme Park, No. 16 Xihua Avenue, Jinniu District, Chengdu, Sichuan Province, the PRC
Chengdu Happy Valley Theme Park covers an area of 466,977.02 sq m and consists of more than 100 scenic spots including 陽光港 Sunshine Harbor, 歡樂時光 Happy Hour, 加勒比旋風 Caribbean Whirlwind, 巴蜀迷情 Bayu Love, 飛行島 Flying Island, 魔幻城堡 Magic Castle, 飛躍地中海 Leaping Mediterranean, 歡樂光年 Happy Light Year and 絲路傳奇 Silk Road Legend. There are various experience viewing projects, including entertainment facilities, humanistic ecological landscapes, artistic performances, theme games, golf and commercial facilities.

The Property is RMB1,249,700,000 operated as (RENMINBI ONE Chengdu Happy BILLION TWO Valley Theme HUNDRED FORTY Park. NINE MILLION SEVEN HUNDRED THOUSAND)

(100% interest attributable to the Target Group: RMB1,249,700,000 (RENMINBI ONE BILLION TWO HUNDRED FORTY NINE MILLION SEVEN HUNDRED THOUSAND))

Happy Valley chain brand, founded in 1998, is the country’s first batch of 5A-level tourist attractions. Chengdu Happy Valley officially opened in early 2009.

The Property is planned for theme park use; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for leisure land use.

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Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to the Target Company with details as follows:

Certificate No. Use Expiry Date Site Area (sq m) (2008)1132 Leisure land 28 September 2046 466,977.02

As advised by the Target Group, the Property is erected on part of the land.

(2) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights by the Target Company are legal and effective in accordance with the relevant laws and regulations;
(ii) the Target Company has legally obtained the approval and permission issued by the relevant government departments in the process of the development and construction of the land. The construction has completed the completion acceptance checking;
(iii) the Target Company legally holds the real estate interests including the land use rights and buildings, without the situation of right limitation, and can dispose of them according to law.
(3) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate No*

As the PRC legal opinion states that the Target Company legally holds the real estate interests including the land use rights and buildings; we consider this will not affect the legal title of the Property to the Target Company, we have prepared the valuation on good title basis.
IV-22 -

PROPERTY VALUATION REPORT

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VALUATION REPORT

Properties held for investment in the PRC

Property

Description and tenure

Particulars of occupancy

Market Value in existing state as at 30 June 2020

A6. Unit Nos. 101-102, Level Real Estate Phase V is a 1, Real Estate Phase V, commercial development completed Building 120, No. 393, in 2015. Section 3, Sanhuan, Jinniu District, Chengdu, The Property comprises retail units Sichuan Province, the with a total gross floor area of PRC 400.69 sq m. The Property is planned for commercial use; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property. The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for composite use.

The Property is RMB6,940,000 subject to a (RENMINBI SIX tenancy with MILLION NINE expiry in HUNDRED FORTY September 2021 THOUSAND) at current monthly rent of RMB (100% interest 9,120.95. attributable to the Target Group: RMB6,940,000 (RENMINBI SIX MILLION NINE HUNDRED FORTY THOUSAND))

Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to the Target Company:

Certificate No. Use Expiry Date (2010)823 Composite 28 September 2046

As advised by the Target Group, the Property is erected on part of the land.

(2) According to Building Ownership Certificates, the building ownership of the Property have been vested in the Target Company:

Certificate No. Building Gross Floor Area (sq m) 4733574 Real Estate Phase V community commercial 400.69

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(3) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights and building ownership by the Target Company are legal and effective in accordance with the relevant laws and regulations; and
(ii) the Target Company legally holds the real estate interests including the land use rights and buildings, without the situation of right limitation, and can dispose of them according to law.
(4) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate Yes

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PROPERTY VALUATION REPORT

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VALUATION REPORT

Properties held for investment in the PRC

Market Value in Particulars of existing state as at Property Description and tenure occupancy 30 June 2020 A7. Retail unit at Pure Water Shore is a mixed-use The Property is RMB22,970,000 Pure Water Shore, development completed in 2013. subject to various (RENMINBI No. 200 Huafeng Road, tenancies with TWENTY TWO Jinniu District, Chengdu, The Property comprises retail units latest expiry in MILLION NINE Sichuan Province, the with a total gross floor area of 2023 at total HUNDRED PRC 3,297.29 sq m. current monthly SEVENTY rent of RMB THOUSAND) The Property is planned for 144,809.15. commercial use; there is no (100% interest environmental issues and litigation attributable to the dispute; there is no plan for Target Group: renovation or change the use of the RMB22,970,000 Property. (RENMINBI TWENTY TWO The land use rights of the Property MILLION NINE have been granted for a term due to HUNDRED expire on 28 September 2046 for SEVENTY commercial use. THOUSAND))

Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to the Target Company:

Certificate No. Use Expiry Date Site Area (sq m) (2008)941 Commercial 28 September 2046 31,524.37

As advised by the Target Group, the Property is erected on part of the land.

(2) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights of the land by the Target Company are legal and effective, in accordance with the relevant laws and regulations; and
(ii) the Target Company has legally obtained the approval and permission issued by the relevant government departments in the process of the development and construction of the land. The construction has completed the completion acceptance checking; and
(iii) the Target Company legally holds the real estate interests including the land use rights and buildings, without the situation of right limitation, and can dispose of them according to law.
(3) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate No*

As the PRC legal opinion states that the Target Company legally holds the real estate interests including the land use rights and buildings; we consider this will not affect the legal title of the Property to the Target Company, we have prepared the valuation on good title basis.
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PROPERTY VALUATION REPORT

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VALUATION REPORT

Properties held for investment in the PRC

Property

A8. Retail unit and carpark at Park Plaza, Chengdu Happy Valley Outlet, No. 16 Xihua Avenue (three-ring side of the city) Jinniu District, Chengdu, Sichuan Province, the PRC

Particulars of occupancy

Description and tenure

Park Plaza is a mixed-use Portion of the development completed in between retail with 2009 and 2012. 37,242.47 sq m is subject to various The Property comprises retail and tenancies with the carpark in Park Plaza: latest expiry in 2029 at total Gross Floor current monthly Building Area rent of (sq m) RMB2,034,860.85. The remaining Retail 51,006.74 retail is vacant.

The Property comprises retail and carpark in Park Plaza: Gross Floor Building Area (sq m) Retail 51,006.74 876 Carparks 35,712.33 Total: 86,719.07

The carparks are licensed on monthly and hourly basis.

Market Value in existing state as at 30 June 2020

RMB379,000,000 (RENMINBI THREE HUNDRED SEVENTY NINE MILLION)

(100% interest attributable to the Target Group: RMB379,000,000 (RENMINBI THREE HUNDRED SEVENTY NINE MILLION))

The Property is planned for commercial and carparks uses; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for commercial use.

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Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to 成都天府華僑城公園廣場管理有限公司 (Chengdu Tianfu OCT Park Plaza Management Co., Ltd.):

Certificate	No.	Use	Expiry Date	Site Area
				(sq m)
(2008)937		Commercial	28 September 2046	79,202.28

As advised by the Target Group, the Property is erected on part of the land. The Property erected thereon is now held by the Target Company.

(2) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights and building ownership by the Target Company are legal and effective in accordance with the relevant laws and regulations;
(ii) the Target Company has legally obtained the approval and permission issued by the relevant government departments in the process of the development and construction of the land. The construction has completed the completion acceptance checking;
(iii) the Target Company legally holds the real estate interests including the land use rights and buildings, without the situation of right limitation, and can dispose of them according to law.
(3) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate No*

As the PRC legal opinion states that the Target Company legally holds the real estate interests including the land use rights and buildings; we consider this will not affect the legal title of the Property to the Target Company, we have prepared the valuation on good title basis.
IV-27 -

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION REPORT

Properties held for investment in the PRC

Market Value in Particulars of existing state as at Property Description and tenure occupancy 30 June 2020 A9. East Coast Clubhouse East Coast is a commercial Portion with RMB45,000,000 in the land C within the development completed in 2012. 1,000.00 sq m is (RENMINBI FORTY planned red line on both subject to a FIVE MILLION) sides of the Shaxi Line, The Property comprises the tenancy due to the Third Ring Road, residential clubhouse of East Coast expire in (100% interest Jinniu District, Chengdu, with a total gross floor area of December 2020 at attributable to the Sichuan Province, 7,992.51 sq m. current monthly Target Group: the PRC rent of RMB RMB45,000,000 The Property is planned for 38,095.24. (RENMINBI FORTY commercial uses; there is no FIVE MILLION)) environmental issues and litigation Portion of dispute; there is no plan for Property is renovation or change the use of the vacant. Property.

The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for commercial use.

Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to the Target Company:

Certificate No. Use Expiry Date Site Area (sq m) (2008)944 Commercial 28 September 2046 49,802.90

As advised by the Target Group, the Property is erected on part of the land.

(2) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights of the land by the Target Company are legal and effective, in accordance with the relevant laws and regulations; and
(ii) the Target Company has legally obtained the approval and permission issued by the relevant government departments in the process of the development and construction of the land. The construction has completed the completion acceptance checking;
(iii) the Target Company legally holds the real estate interests including the land use rights and buildings, without the situation of right limitation, and can dispose of them according to law.
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PROPERTY VALUATION REPORT

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(3) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate No*

As the PRC legal opinion states that the Target Company legally holds the real estate interests including the land use rights and buildings; we consider this will not affect the legal title of the Property to the Target Company, we have prepared the valuation on good title basis.
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PROPERTY VALUATION REPORT

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VALUATION REPORT

Properties held for investment in the PRC

Particulars of occupancy

Description and tenure

Property

Portion of the retail with 5,156.53 sq m is subject to various tenancies with the latest expiry in 2028 at total current monthly rent of RMB240,675.12. The remaining retail is vacant.

A10. Overseas Chinese Town Overseas Chinese Town Children’s Children’s Living Living Museum is a commercial Museum, development completed in 2013. No. 10 Xihua Avenue, Jinniu District, Chengdu, The Property comprises retail and Sichuan Province, the carpark in Overseas Chinese Town PRC Children’s Living Museum:

Uses Retail 590 Carparks Total:	Gross Floor Area (sq m) 12,444.26 6,701.30 19,145.56 rent of RMB240,675.12. The remaining retail is vacant. The carparks are licensed on monthly and hourlybasis

Market Value in existing state as at 30 June 2020

RMB85,000,000 (RENMINBI EIGHTY FIVE MILLION)

(100% interest attributable to the Target Group: RMB85,000,000 (RENMINBI EIGHTY FIVE MILLION))

The Property is planned for commercial and carparks uses; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for commercial use.

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PROPERTY VALUATION REPORT

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Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to the Target Company:

Certificate No. Use Expiry Date Site Area (sq m) (2013)127 Commercial 28 September 2046 44,607.86

As advised by the Target Group, the Property is erected on part of the land.

(2) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights of the land by the Target Company are legal and effective, in accordance with the relevant laws and regulations; and
(ii) the Target Company has legally obtained the approval and permission issued by the relevant government departments in the process of the development and construction of the land. The construction has completed the completion acceptance checking;
(iii) the Target Company legally holds the real estate interests including the land use rights and buildings, without the situation of right limitation, and can dispose of them according to law.
(3) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate No*

As the PRC legal opinion states that the Target Company legally holds the real estate interests including the land use rights and buildings; we consider this will not affect the legal title of the Property to the Target Company, we have prepared the valuation on good title basis.
IV-31 -

PROPERTY VALUATION REPORT

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VALUATION REPORT

Properties held for investment in the PRC

Property

A11. Retail at Overseas Chinese Town Life Plaza, Near Xihua Avenue, Jinniu District, Chengdu, Sichuan Province, the PRC

Particulars of occupancy

Description and tenure

Overseas Chinese Town Life Plaza is a commercial development completed in 2012.

Overseas Chinese Town Life Plaza The Property is is a commercial development subject to various completed in 2012. tenancies with the latest expiry in The Property comprises retail at 2031 at total Overseas Chinese Town Life Plaza: current monthly rent of Gross Floor RMB135,876.11. Uses Area (sq m) Retail 5,087.41 kindergarten 3,285.90

Market Value in existing state as at 30 June 2020

RMB22,020,000 (RENMINBI TWENTY TWO MILLION TWENTY THOUSAND)

(100% interest attributable to the Target Group: RMB22,020,000 (RENMINBI TWENTY TWO MILLION TWENTY THOUSAND))

The Property is planned for commercial, use; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for commercial use.

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Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to the Target Company:

Certificate No. Use Expiry Date Site Area (sq m) (2008)679 Commercial 28 September 2046 296,770.54

As advised by the Target Group, the Property is erected on part of the land.

(2) According to Building Ownership Certificates, the building ownership of the Property have been vested in the Target Company:

Certificate	No.	Building	Gross	Floor Area
				(sq m)
4576858		Kindergarten		3,285.9

Retail has not yet obtained the Building ownership certificate.

(3) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights of the land by the Target Company are legal and effective, in accordance with the relevant laws and regulations;
(ii) the Target Company has legally obtained the approval and permission issued by the relevant government departments in the process of the development and construction of the land. The construction has completed the completion acceptance checking;
(iii) the Target Company legally holds the real estate interests including the land use rights and buildings, without the situation of right limitation, and can dispose of them according to law.
(4) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate Partly*

As the PRC legal opinion states that the Target Company legally holds the real estate interests including the land use rights and buildings; we consider this will not affect the legal title of the Property to the Target Company, we have prepared the valuation on good title basis.
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PROPERTY VALUATION REPORT

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VALUATION REPORT

Properties held for development in the PRC

Property

Description and tenure

Particulars of occupancy

Market Value in existing state as at 30 June 2020

A12. Shopping mall, land A on both sides of the Shaxi Line of Outer Sanhuan Road, Jinniu District, Chengdu, Sichuan Province, the PRC

Shopping mall is a commercial development to be erected upon a parcel of land with a total site area of approximately 23,429.47 sq m.

The Property comprises under construction shopping mall with a planned total gross floor area of 109,223.24 sq m (in which 55,733.80 sq m above ground).

The Property is planned for commercial uses; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

The Property is RMB321,580,000 under construction (RENMINBI THREE and is scheduled HUNDRED to be completed TWENTY ONE in 2021. MILLION FIVE HUNDRED EIGHTY THOUSAND)

(100% interest attributable to the Target Group: RMB321,580,000 (RENMINBI THREE HUNDRED TWENTY ONE MILLION FIVE HUNDRED EIGHTY THOUSAND))

The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for catering, hotel and commercial uses.

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Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to the Target Company:

Certificate	No.	Use				Expiry Date	Site Area
							(sq m)
(2008)699		Catering,	hotel	and	commercial	28 September 2046	23,429.47

(2) According to the information provided by the Target Group, the estimated total construction cost to complete the development is approximately RMB639,668,000; a construction cost of approximately RMB189,810,000 has been expended for the development of the Property. In the course of our valuation, we have taken into account the above expended construction cost.
(3) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights of the land by the Target Company are legal and effective in accordance with the relevant laws and regulations;
(ii) the Target Company has legally obtained the approval and permission issued by the relevant government departments in the process of the development and construction of the land;
(iii) the Target Company legally holds the real estate interests including the land use rights of the land, construction in progress without the situation of right limitation, and can dispose of them according to law.
(4) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes*

As the PRC legal opinion states that has legally obtained the approval and permission issued by the relevant government departments in the process of the development and construction of the land; we have prepared the valuation on good title basis.
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VALUATION REPORT

Group B – Properties held by 成都天府華僑城公園廣場管理有限公司 (Chengdu Tianfu OCT Park Plaza Management Co., Ltd.) (“OCT Park Plaza”), a wholly owned subsidiaries of the Target Company, in the PRC

Properties held for sale in the PRC

					Market Value in
				Particulars	existing state as at
	Property	Description and tenure		of occupancy	30 June 2020
B1.	The unsold carparks	Park Plaza is a mixed-use development completed in between		The Property	RMB66,962,000
	portion of	2008 and 2012.		was vacant.	(RENMINBI SIXTY
	Pure Water Shore Phase I				SIX MILLION NINE
	(No. 9 Xihua Avenue),	The Property comprises 551 carparking spaces in Park Plaza:			HUNDRED SIXTY
	Pure Water Shore Phase II				TWO THOUSAND)
	(No. 260 Huafeng Road),		Gross Floor
	Pure Water Shore Phase IV	Building	Area		(100% interest
	(BLDG 76, No. 66		(sq m)		attributable to the
	Huafeng Road),				Target Group:
	East Coast Phase I,	12 carparks at Pure Water Shore Phase I (unsold)	271.80		RMB66,962,000
	(No. 283, Jinfeng Road),	4 carparks at Pure Water Shore Phase II & IV (pre-sold)	107.75		(RENMINBI SIXTY
	East Coast Phase II	393 carparks at East Coast Phase I (unsold)	15,895.88		SIX MILLION NINE
	(No. 333, Section 1,	3 carparks at East Coast Phase I (pre-sold)	105.97		HUNDRED SIXTY
	North Third Ring Road),	135 carparks at East Coast Phase II (unsold)	6,619.57		TWO THOUSAND))
	Jinniu District, Chengdu,	4 carparks at East Coast Phase II (pre-sold)	190.68
	Sichuan Province, the PRC
		Total:	23,191.65

The Property is planned for carpark uses; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for commercial use.

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PROPERTY VALUATION REPORT

APPENDIX IV

Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to OCT Park Plaza:

Certificate No. Use Expiry Date (2008)679, 872 Residential 28 September 2076 (2010)751, 742, 743, 823, 824

As advised by the Target Group, the Property is erected on part of the land.

(2) According to Building Ownership Certificates, the building ownership of the Property have been vested in OCT Park Plaza:

Certificate	Building	Gross Floor Area
		(sq m)
4232344	Pure Water Shore Phase I	1,744.8
4232357	Pure Water Shore Phase I	4,749.36
4232361	Pure Water Shore Phase II	6,536.26
4232366	Pure Water Shore Phase IV	10,755.83
4232358	East Coast Phase I, Group A2	23,152.05
4232347	East Coast Phase I, Group A3	3,992.7
4232375	East Coast Phase I, Group A4	1,066.97
4655995	East Coast Phase II	11,966.96

As advised by the Target Group, the Property is part of the said buildings.

(3) According to the Target Group, 11 carparks are pre-sold at a total consideration of RMB1,557,000. We have taken into account the said pre-sold consideration.
(4) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights and building ownership by OCT Park Plaza are legal and effective in accordance with the relevant laws and regulations; and
(ii) OCT Park Plaza legally holds the real estate interests including the land use rights and buildings, without the situation of right limitation, and can dispose of them according to law.
(5) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate Yes

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PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION REPORT

Group C – Properties held by 成都天府華僑城商業廣場管理有限公司 (Chengdu Tianfu OCT Commercial Plaza Management Co., Ltd.) (“OCT Commercial”), a wholly owned subsidiaries of the Target Company, in the PRC

Properties held for sale in the PRC

Market Value in existing state as at 30 June 2020

Particulars of existing state as at Property Description and tenure occupancy 30 June 2020 C1. Creative Centre, Creative Centre is a mixed-use The Property was RMB15,555,000 No. 221, Section 1, development completed in between vacant. (RENMINBI North Third Ring Road, 2015 and 2017. FIFTEEN MILLION Jinniu District, Chengdu, FIVE HUNDRED Sichuan Province, the The Property comprises 14 office FIFTY FIVE PRC units in Creative Centre: THOUSAND)

Uses 10 Office units (Unsold) 4 Office units (Pre-sold) Total:	Gross Floor Area (sq m) 918.31 567.48
	1,485.79

(100% interest attributable to the Target Group: RMB15,555,000 (RENMINBI FIFTEEN MILLION FIVE HUNDRED FIFTY FIVE THOUSAND))

The Property is planned for office uses; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for commercial use.

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PROPERTY VALUATION REPORT

APPENDIX IV

Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to OCT Commercial:

Certificate	No.	Use	Expiry Date	Site Area
				(sq m)
(2008)943		Commercial	28 September 2046	27,321.57

As advised by the Target Group, the Property is erected on part of the land.

(2) According to Building Ownership Certificates, the building ownership of the Property have been vested in OCT Commercial:

Certificate	Building	Floor Area
		(sq m)
4732005	Office	83,742.48
4731998	Carparks	33,742.02

As advised by the Target Group, the Property is part of the said building.

(3) According to the Target Group, 4 Office units are pre-sold at a total consideration of RMB6,126,000. We have taken into account the said pre-sold consideration.
(4) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights and building ownership by OCT Commercial are legal and effective in accordance with the relevant laws and regulations; and
(ii) OCT Commercial legally holds the real estate interests including the land use rights and buildings, without the situation of right limitation, and can dispose of them according to law.
(5) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate Yes

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PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION REPORT

Properties held for owner-occupation in the PRC

Property

C2. Creative Centre, No. 221, Section 1, North Third Ring Road, Jinniu District, Chengdu, Sichuan Province, the PRC

Description and tenure

Creative Centre is a mixed-use development completed in between 2015 and 2017.

The Property comprises 19 office units in Creative Centre:

Gross Floor Building Area (sq m) Office 1,970.05

The Property is planned for office uses; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

Particulars of occupancy

The Property was vacant.

Market Value in existing state as at 30 June 2020

RMB17,079,000 (RENMINBI SEVENTEEN MILLION SEVENTY NINE THOUSAND)

(100% interest attributable to the Target Group: RMB17,079,000 (RENMINBI SEVENTEEN MILLION SEVENTY NINE THOUSAND))

The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for commercial use.

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PROPERTY VALUATION REPORT

APPENDIX IV

Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to OCT Commercial:

Certificate	No.	Use	Expiry Date	Site Area
				(sq m)
(2008)943		Commercial	28 September 2046	27,321.57

As advised by the Target Group, the Property is erected on part of the land.

(2) According to Building Ownership Certificate, a total gross floor area of approximately 1,970.05 sq m, have been vested to 成都天府華僑城商業廣場管理有限公司 (OCT Commercial):

Certificate	No.	Building	Gross	Floor Area
				(sq m)
4732005		Office		83,742.48

As advised by the Target Group, the Property is part of the said building.

(3) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights and building ownership by OCT Commercial are legal and effective in accordance with the relevant laws and regulations; and
(ii) OCT Commercial legally holds the real estate interests including the land use rights and buildings, without the situation of right limitation, and can dispose of them according to law.
(4) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate Yes

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PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION REPORT

Properties held for investment in the PRC

Property

Description and tenure

Particulars of occupancy

Market Value in existing state as at 30 June 2020

C3. Creative Centre, No. 221, Section 1, North Third Ring Road, Jinniu District, Chengdu, Sichuan Province, the PRC

Creative Centre is a mixed-use development completed in between 2015 and 2017.

The Property comprises 52 retail units, 54 office units, 3 entertainment unit and 1 warehouse in Creative Centre:

Building Retail Office Entertainment 619 car parks Storage Total:	Gross Floor Area (sq m) 12,178.33 5,080.05 4,803.42 33,742.02 973.69
	56,777.51

Portion of the RMB171,281,000 Property is (RENMINBI ONE subject to various HUNDRED tenancies with SEVENTY ONE latest expiry in MILLION TWO 2027 at total HUNDRED EIGHTY current monthly ONE THOUSAND) rent of RMB 730,632.57. (100% interest attributable to the Target Group: RMB171,281,000 (RENMINBI ONE HUNDRED SEVENTY ONE MILLION TWO HUNDRED EIGHTY ONE THOUSAND))

The Property is planned for commercial and office uses; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for commercial use.

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PROPERTY VALUATION REPORT

APPENDIX IV

Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to OCT Commercial:

Certificate No.	Use	Expiry Date	Site Area
			(sq m)
(2008)943	Commercial	28 September 2046	27,321.57
As advised by the Target Group, the Property is erected on part of the land.
According to Building	Ownership Certificates, the building ownership of the Property have been vested in 成都天府華
僑城商業廣場管理有限公司(OCT Commercial):
Certificate No.	Building		Gross Floor Area
			(sq m)
4732001/4732005	Commercial		12,178.33
4732005	Office		5,080.05
4731997	Cultural		4,803.42
4732194	Storage		973.69

(2) According to Building Ownership Certificates, the building ownership of the Property have been vested in 成都天府華僑城商業廣場管理有限公司 (OCT Commercial):
(3) According to the PRC legal opinion:
(i) The procedures of obtaining the land use rights and building ownership by OCT Commercial are legal and effective in accordance with the relevant laws and regulations; and
(ii) OCT Commercial legally holds the real estate interests including the land use rights and buildings, without the situation of right limitation, and can dispose of them according to law.
(4) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate Yes

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PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION REPORT

Group D – Properties held by 成都天府華僑城萬匯商城管理有限公司 Chengdu Tianfu OCT Wanhui Management Co., Ltd. (“OCT Wanhui), a wholly owned subsidiaries of the Target Company, in the PRC

Properties held for sale in the PRC

Property

D1. Happy Hui Plaza/Cloud Shore, 217 Huafeng Road, Jinniu District, Chengdu, Sichuan Province, the PRC

			Particulars of
Description and tenure			occupancy
Happy Hui Plaza/Cloud	Shore	is a	The Property is
mixed-use development.			under construction
			and is scheduled
The Property comprises	under		to be completed
construction portion:			in October 2020.
	Planned
Building	Gross	Floor
		Area
		(sq m)
Office (Unsold)	24,612.07
Office (Pre-sold)	32,318.51
Carpark	29,509.56
Total:	86,440.14

Market Value in existing state as at 30 June 2020

RMB569,030,000 (RENMINBI FIVE HUNDRED SIXTY NINE MILLION THIRTY THOUSAND)

(100% interest attributable to the Target Group: RMB569,030,000 (RENMINBI FIVE HUNDRED SIXTY NINE MILLION THIRTY THOUSAND))

The Property is planned for commercial and office uses; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for catering, hotel and commercial uses.

IV-44 -

PROPERTY VALUATION REPORT

APPENDIX IV

Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to OCT Wanhui:

Certificate	No.	Use				Expiry Date	Site Area
							(sq m)
(2012)602		Catering,	hotel	and	commercial	28 September 2046	43,999.83

As advised by the Target Group, the Property is erected on part of the land.

(2) According to the information provided by the Target Group, the estimated outstanding construction cost to complete the development is approximately RMB4,332,000; a construction cost of approximately RMB368,950,000 has been expended for the development of the Property. In the course of our valuation, we have taken into account the above expended construction cost.
(3) According to the Target Group 32,318.51 sq m Office units are pre-sold at a total consideration of RMB441,587,000. We have taken into account the said pre-sold consideration. The Estimated Market Value as if completed of the Property is RMB729,902,000.
(4) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights of the land by OCT Wanhui are legal and effective in accordance with the relevant laws and regulations;
(ii) OCT Wanhui has legally obtained the approval and permission issued by the relevant government departments in the process of the development and construction of the land; and
(iii) OCT Wanhui holds the real estate interests including the land use rights of the land, buildings, construction in progress without the situation of right limitation, and can dispose of them according to law.
(5) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Surveying Report Yes

IV-45 -

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION REPORT

Properties held for investment in the PRC

Market Value in existing state as at 30 June 2020

					Particulars of
	Property	Description and tenure			occupancy
D2.	Sam’s Club,	Sam’s Club is a mixed-use			Retail (under
	No. 223, section 1, North	development completed	in	2018.	construction)
	Third Ring Road, Jinniu				construction an
	District, Chengdu,	The Property comprises	retail,		is scheduled to
	Sichuan Province, the	warehouse and carpark:			completed in
	PRC				October 2020.
			Gross Floor
		Building		Area	The remaining
				(sq m)	portion of the
					Property is
		Retail (under construction)		32,123.64	subject to vari
		Retail		30,490.62	tenancies with
		Storage		410.29	latest expiry in
		825 Carparks		25,666.95	2038 at total
					current monthl
					rent of RMB
		Total:		88,691.50

RMB447,950,000 (RENMINBI FOUR HUNDRED FORTY SEVEN MILLION NINE HUNDRED FIFTY THOUSAND)

Retail (under construction) construction and is scheduled to be completed in October 2020.

The remaining (100% interest portion of the attributable to the Property is Target Group: subject to various RMB447,950,000 tenancies with the (RENMINBI FOUR latest expiry in HUNDRED FORTY 2038 at total SEVEN MILLION current monthly NINE HUNDRED rent of RMB FIFTY 816,384.78. THOUSAND))

The Property is planned for commercial and carpark uses; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for catering, hotel and commercial uses.

IV-46 -

PROPERTY VALUATION REPORT

APPENDIX IV

Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to OCT Wanhui:

Certificate	No.	Use				Expiry Date	Site Area
							(sq m)
(2012)602		Catering,	hotel	and	commercial	28 September 2046	43,999.83

As advised by the Target Group, the Property is erected on part of the land.

(2) According to the information provided by the Target Group, the estimated outstanding construction cost to complete the Retail (under construction) is approximately RMB1,620,000; a construction cost of approximately RMB136,460,000 has been expended for the Retail (under construction). In the course of our valuation, we have taken into account the above expended construction cost.
(3) According to the PRC legal opinion:
(i) the procedures of obtaining the land use rights of the land by OCT Wanhui are legal and effective in accordance with the relevant laws and regulations;
(ii) OCT Wanhui has legally obtained the approval and permission issued by the relevant government departments in the process of the development and construction of the land. The construction has completed the completion acceptance checking;
(iii) OCT Wanhui holds the real estate interests including the land use rights of the land and buildings, without the situation of right limitation, and can dispose of them according to law.
(4) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Surveying Report Yes

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PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION REPORT

Group E – Property held by 成都天府華僑城湖濱商業管理有限公司 (Chengdu Tianfu OCT Lakeside Business Management Co., Ltd.) (“OCT Lakeside”), a 49% owned joint venture of the Target Company, in the PRC

Property held for development in the PRC

Property

Description and tenure

Particulars of occupancy

Market Value in existing state as at 30 June 2020

E1. A piece of land at land A on both sides of the Shaxi Line of Outer Sanhuan Road, Jinniu District, Chengdu, Sichuan Province, the PRC

The Property comprises a parcel of land with a total site area of approximately 22,501.70 sq m.

The Property has a planned total gross floor area of 106,110.87 sq m for commercial office uses.

The Property is planned for commercial and office uses; there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

The land use rights of the Property have been granted for a term due to expire on 28 September 2046 for catering, hotel and commercial uses.

The Property is a RMB268,090,000 vacant land under (RENMINBI TWO construction and HUNDRED SIXTY is scheduled for EIGHT MILLION completion in late NINETY 2020. THOUSAND)

(49% interest attributable to the Target Group: RMB131,364,100 ONE HUNDRED THIRTY ONE MILLION THREE HUNDRED SIXTY FOUR THOUSAND ONE HUNDRED))

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PROPERTY VALUATION REPORT

APPENDIX IV

Notes:

(1) According to Certificate for the Use of State-owned Land, the land use rights of the Property has been granted to OCT Lakeside:

Certificate	No.	Use				Expiry Date	Site Area
							(sq m)
(2008)940		Catering,	hotel	and	commercial	28 September 2046	22,501.70

(2) According to the information provided by the Target, a preparation cost of approximately RMB42,604,000 and a construction cost of about RMB84,760,000 has been expended for the Property. In the course of our valuation, we have taken into account the above expended preparation cost.
(3) According to the PRC legal opinion:
(i) The procedures of obtaining the land use rights of the land by 成都天府華僑城湖濱商業管理有限公司 (Chengdu Tianfu OCT Lakeside Business Management Co., Ltd.) are legal and effective in accordance with the relevant laws and regulations.
(4) The status of the title and grant of major approvals and licences in accordance with the information provided by the Target Group and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes

IV-49 -

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 Cushman & Wakefield Limited, an independent valuer, in connection with its valuation of the entire equity interest in the Target Company as at 30 June 2020.

==> picture [93 x 38] intentionally omitted <==

16/F Jardine House 1 Connaught Place Central Hong Kong

30 September 2020

The Directors Overseas Chinese Town (Asia) Holdings Limited 59/F., Bank of China Tower 1 Garden Road Hong Kong

Dear Sirs,

Re: Valuation of the entire equity interest in Chengdu Tianfu OCT Industry Development Company ( 成都天府華僑城實業發展有限公司 ) (referred to as the “Target Company”)

In accordance with the instructions from Overseas Chinese Town (Asia) Holdings Limited (hereinafter referred to as the “ Company ”) to us to conduct a valuation of the entire equity interest in the Target Company, we are pleased to report that we have made relevant enquiries and obtained necessary information for the purpose of providing our valuation as at 30 June 2020 (hereinafter referred to as the “ Valuation Date ”).

This report states the purpose and basis of valuation, scope of work, company background, source of information, major assumptions, valuation methodology, limiting conditions, and presents our opinion of value.

1. PURPOSE OF VALUATION

The purpose of this valuation is to value the entire equity interest in the Target Company for your acquisition reference purpose only.

We assume no responsibility whatsoever to any person other than the Company in respect of, or arising out of, the contents of this report. If any party chooses to rely in any way on the contents of this report, they do so entirely at their own risk.

V-1 -

BUSINESS VALUATION REPORT

APPENDIX V

2. BASIS OF VALUATION

We have carried out the valuation on the basis of market value in accordance with the International Valuation Standards. Market value is defined as “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”.

3. SCOPE OF WORK

Our valuation conclusion is based on the assumptions stated herein and on information provided by the management of the Company, and/or its representatives (together referred to as the “Management”).

In the course of our valuation work, the following processes had been conducted to evaluate the reasonableness of the adopted basis and assumptions provided by the Management:

Discussed with the Management and obtained relevant financial information in respect of the Target Company;
Examined the relevant bases and assumptions of the financial information in respect of the Target Company;
Conducted appropriate research to obtain sufficient market data and statistical figures and prepared the valuation based on generally accepted valuation procedures and practices; and
Presented the purpose and basis of valuation, scope of work, company background, source of information, major assumptions, valuation methodology and our opinion of value in this report.

4. COMPANY BACKGROUND

the Target Company has been established in the People’s Republic of China (the”PRC”) since 2005. It is principally engaged in a large comprehensive development project that located at both sides of Shaxi Line of Outer Sanhuan Road of the Jinniu District in Chengdu City in the Sichuan Province. This project comprises a premium residential community, urban entertainment and commercial complex and a Happy Valley theme park.

V-2 -

BUSINESS VALUATION REPORT

APPENDIX V

The subsidiaries and the long-term investments held by the Company are listed below:

No.		Subsidiary/Long term investment	Equity interest
1		Chengdu Tianfu OCT Park Plaza Management Co., Ltd.*	100%
		成都天府華僑城公園廣場管理有限公司
2		Chengdu Tianfu OCT Commercial Plaza Management Co., Ltd.	100%
		成都天府華僑城商業廣場管理有限公司
3		Chengdu Tianfu OCT Wanhui Management Co., Ltd.	100%
		成都天府華僑城萬匯商城管理有限公司
4		Chengdu Tianfu OCT Hotel Management Co., Ltd.	100%
		成都天府華僑城酒店管理有限公司
5		Chengdu Tianfu OCT Urban Entertainment Co., Ltd.	100%
		成都天府華僑城都市娛樂有限公司
6		Chengdu Tianfu OCT Theater Management Co., Ltd.	100%
		成都天府華僑城大劇院管理有限公司
7		Chengdu Tianfu OCT Riverside Business Management Co., Ltd.	100%
		成都天府華僑城純水岸商業管理有限公司
8		Chengdu Tianfu OCT Chuangzhan Business District Management	100%
		Co., Ltd.
		成都天府華僑城創展商業區管理有限公司
9		Chengdu Tianfu OCT Lakeside Business Management Co., Ltd.	49%
		成都天府華僑城湖濱商業管理有限公司
10		Chengdu Culture & Tourism Development Holdings Co., Ltd.*	33%
		成都文化旅遊發展股份有限公司
*	the	long-term investments held by 成都天府華僑城公園廣場管理有限公司Chengdu	Tianfu OCT Park Plaza
	Management Co., Ltd. are listed below:
	No.	Long term investment	Equity interest
	1	Chengdu Sport Industry Co., Ltd.	49%
		成都體育產業有限責任公司
	2	Chengdu Baoxin Quansheng Real Estate Development Company	50%
		Limited
		成都市保鑫泉盛房地產開發有限公司

V-3 -

BUSINESS VALUATION REPORT

APPENDIX V

The unaudited consolidated balance sheet of the Target Company as at 30 June 2020 provided by the Management was as follows:

As at 30 June 2020
Cash and cash at bank
Trade and other receivables
Finance lease receivables
Inventories and other contract costs
Total current assets
Interests in associate
Interests in joint ventures
Investment properties
Other property, plant and equipment
Interests in leasehold land held for own use
Intangible assets
Deferred tax assets
Trade and other receivables
Finance lease receivables
Total non-current assets
Total assets
Amount due to the Remaining Group
Related party loans
Trade and other payables
Contract liabilities
Lease liabilities
Current taxation
Total current liabilities
Deferred tax liabilities
Bank and other loans
Lease liabilities
Total non-current liabilities
Total liabilities

(in RMB’000)
633,966
177,984
1,844
697,439
1,511,233
1,058,175
282,193
1,265,054
956,148
420,089
973
113,856
1,623
22,283
4,120,394
5,631,627
(614,860)
(624,406)
(1,458,575)
(380,223)
(13,673)
(351,337)
(3,443,074)
(951)
(500,000)
(41,548)
(542,499)
(3,985,573)

V-4 -

BUSINESS VALUATION REPORT

APPENDIX V

5. SOURCE OF INFORMATION

In arriving at our assessment of the value of the entire equity interest in the Target Company, we have relied on the following information that was provided to us by the Management, as well as other publicly available information that we have gathered through our own research, including, but not limited to, the following:

Copies of business licenses and other relevant documents of the Target Company;
The unaudited financial statements of the Target Company as at 30 June 2020 provided by the Management; and
Other public information relating to the valuation.

6. MAJOR ASSUMPTIONS

We have adopted certain specific assumptions in our valuation and the major ones are as follows:

The information provided has been prepared on a reasonable basis after due and careful consideration by the Management;
There will be no major change in the current taxation laws in the localities in which the Target Company operates or intends to operate and that the rates of tax payable shall remain unchanged and that all applicable laws and regulations will be complied with;
There will be no major change in the political, legal, economic or financial conditions in the localities in which the Target Company operates or intends to operate, which would adversely affect the revenues attributable to and profitability of the Target Company;
The core business operation of the Target Company will not differ materially from those of present or expected; and
The information regarding the Target Company provided by the Management is true and accurate.

7. VALUATION METHODOLOGY

There are generally three accepted approaches to obtain the market value of the entire equity interest in the Target Company, namely the market approach, the income approach and the asset-based approach. Each of these approaches is appropriate in one or more circumstances, and sometimes, two or more approaches may be used together. Whether to adopt a particular approach will be determined by the most commonly adopted practice in valuing business entities that are similar in nature.

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Market Approach

The market approach values a business entity by comparing prices at which other business entities in a similar nature changed hands in arm’s length transactions. The underlying theory of this approach is that one would not pay more than one would have to for an equally desirable alternative. The market approach comprises two methods namely guideline (or comparable) company method and similar transaction method.

The guideline company method focuses on analyzing the data and valuation multiples of companies that can be considered comparable to those being valued. Adjustments are made to the comparable companies to compensate for differences between those companies and the company being valued. Finally, appropriate valuation multiples are applied to the subject company’s normalized financial data to arrive at an indication of the value of the subject company.

The similar transaction method measures value based on what other purchasers in the market have paid for companies that can be considered reasonably similar to those being valued. When the similar transaction method is utilized, data are collected on the prices paid for reasonably comparable companies. Adjustments are made to the comparable companies to compensate for differences between those companies and the company being valued. The application of the similar transaction method results in an estimate of the price reasonably expected to be realized from the sale of the company.

Income Approach

The income approach focuses on the economic benefits due to the income producing capability of the business entity. The underlying theory of this approach is that the value of the business entity can be measured by the present worth of the economic benefits to be received over the useful life of the business entity. Based on this valuation principle, the income approach estimates the future economic benefits and discounts them to their present values using a discount rate appropriate for the risks associated with realizing those benefits.

Alternatively, this present value can be calculated by capitalizing the economic benefits to be received in the next period at an appropriate capitalization rate. This is subject to the assumption that the business entity will continue to maintain stable economic benefits and growth rate.

Asset-Based Approach

The asset-based approach is based on the general concept that the earning power of a business entity is derived primarily from its existing assets. The assumption of this approach is that when each of the elements of working capital, tangible and intangible assets is individually valued, their sum represents the value of a business entity and equals to the value of its invested capital. In other words, the value of the business entity is represented by the money that has been made available to purchase the business assets needed.

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APPENDIX V

This money comes from investors who buy stocks of the business entity and investors who lend money to the business entity. After collecting the total amounts of money from equity and debt, and converted into various types of assets of the business entity for its operation, their sum equals the value of the business entity.

Selection of Valuation Methodology

The selection of a valuation approach is based on, among others, the quantity and quality of information provided, access to available data, availability of relevant market transactions, type and nature of subject assets, purpose and objective of the valuation and professional judgment and technical expertise. Among the three approaches, we consider that asset-based approach is more appropriate for valuing the entire equity interest in the Target Company as the major assets owned by the Target Company are real estate assets.

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APPENDIX V

Valuation Summary

The adopted values and valuation methodologies for each of the balance sheet items of the Target Company are listed below:

As at 30 June 2020
Cash and cash at bank
Trade and other receivables
Finance lease receivables
Inventories and other contract costs
Total current assets
Interests in associate
Interests in joint ventures
Investment properties
Other property, plant and equipment
Intangible assets
Deferred tax assets
Trade and other receivables
Finance lease receivables
Total non-current assets
Total assets
Amount due to the Remaining Group
Related party loans
Trade and other payables
Contract liabilities
Lease liabilities
Current taxation
Total current liabilities
Bank and other loans
Lease liabilities
Deferred tax liabilities
Provision for land appreciation tax
Total long-term liabilities
Total liabilities
Equity

Market Value
Remark
(in RMB’000)
633,966
1
177,984
1
1,844
1
986,633
2
1,800,427
1,058,175
3
296,608
3
1,535,162
4
1,349,110
5
1,640
6
102,184
7
1,623
1
22,283
1
4,366,785
6,167,212
(614,860)
1
(624,406)
1
(1,458,575)
1
(380,223)
1
(13,672)
1
(351,337)
1
(3,443,073)
(500,000)
1
(41,548)
1
(16,664)
8
(37,597)
9
(595,809)
(4,038,882)
2,128,000,000
(Rounded)

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APPENDIX V

Remarks:

Book values shown on the unaudited financial statements of the Target Company as at 30 June 2020 were stated as provided by the Management.
For inventories, the cost of sale was considered. The value of inventories is the property value after the cost to sale. For properties, please refer to the property valuation report prepared by Cushman & Wakefield Limited as set out in Appendix IV to this circular. For other contract costs, book values were adopted.
For valuing interests in associate and interests in joint ventures, the proportionate share of the net identifiable assets on the balance sheet of these interests was adopted. For those companies due to restricted conditions and limited information, after we have endeavored to review the restricted and limited information of those associate and joint ventures; we considered to adopt their book value.
For investment properties, please refer to the property valuation report prepared by Cushman & Wakefield Limited as set out in Appendix IV to this circular.
Other property, plant and equipment can be classified into properties and equipment. For properties, please refer to the property valuation report prepared by Cushman & Wakefield Limited as set out in Appendix IV to this circular.

For equipment, either the cost approach or the market approach was adopted in the valuation.

The market approach considers prices recently paid for similar assets, with adjustments made to the indicated market prices to reflect the condition and utility of the appraised machinery and equipment relative to the market comparative. Assets for which there is an established used market may be appraised by this approach.

The cost approach considers the cost to reproduce or replace in new condition the assets appraised in accordance with current market prices for similar assets, with allowance for accrued depreciation arising from condition, utility, age, wear and tear, or obsolescence present (physical, functional or economical), taking into consideration past and present maintenance policy and rebuilding history. The cost approach generally furnishes the most reliable indication of value for assets without a known used market.

Intangible assets can be classified into properties and software. For properties, the value of such properties has been included in the value of investment properties and other property, plant and equipment. Please refer to the property valuation report prepared by Cushman & Wakefield Limited as set out in Appendix IV to this circular.

For software, the cost approach was adopted in the valuation. The cost approach considers the cost to reproduce or replace in new condition the assets appraised in accordance with current market prices for similar assets, with allowance for accrued depreciation arising from condition, utility, age, wear and tear, or obsolescence present (physical, functional or economical), taking into consideration past and present maintenance policy and rebuilding history. The cost approach generally furnishes the most reliable indication of value for assets without a known used market.

The deferred tax assets were adopted at book values except for the portion recorded for purpose of accounting consolidation.
The value of deferred tax liabilities is the provision of the deferred tax on surplus arising from the valuation of inventories that were for sale purpose after provision for land appreciation tax (assuming a prevailing tax rate of 25%).
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The fair value of provision for land appreciation tax is the provision for tax on surplus arising from the valuation of inventories that were for sale purpose provided by the best estimate of the Management.
For interests in leasehold land held for own use, all of the interests in leasehold land held for own use have been included in the value of investment properties and value of other property, plant and equipment. Please refer to the property valuation report prepared by Cushman & Wakefield Limited as set out in Appendix IV to this circular.

8. LIMITING CONDITIONS

The valuation reflects facts and conditions existing at the Valuation Date. Subsequent events have not been considered and we are not required to update our report for such events and conditions.

To the best of our knowledge, all data set forth in this report are reasonable and accurately determined. The data, opinions, or estimates identified as being furnished by others that have been used in formulating this analysis are gathered from reliable sources; yet, no guarantee is made nor liability assumed for their accuracy.

We have relied to a considerable extent on information provided by the Management, including written information and oral representation, in arriving at our opinion of value. We are not in the position to verify the accuracy of all information provided to us. However, we have had no reason to doubt the truth and accuracy of the information provided to us and to doubt that any material facts have been omitted from the information provided. No responsibilities for the operation and financial information that have not been provided to us are accepted.

Although we do not have full access to the properties and financial information for Chengdu Culture & Tourism Development Holdings Co., Ltd. (成都文化旅遊發展股份有限公司), Chengdu Sport Industry Co., Ltd. (成都體育產業有限責任公司), and Chengdu Baoxin Quansheng Real Estate Development Company Limited (成都市保鑫泉盛房地產開發有限公司), which are two associates and one joint venture company non-wholly owned by the Target Company, we have endeavored to review the available information, such as property gross floor area and site area, recent years financial statements and recent inventory list. Each of Chengdu Culture & Tourism Development Holdings Co., Ltd. and Chengdu Baoxin Quansheng Real Estate Development Company Limited account for about 4% of the total asset of the Target Company which are insignificant; whilst Chengdu Sport Industry Co., Ltd. account for about 14% of the total asset of the Target Company; its land are mainly allocated (劃撥) land in nature and partly are pended for government planning due to the process of cultural relic protection measures, we also reviewed that it is appropriate to consider their land book cost; we considered there were no material changes from the book value of the forementioned companies; therefore, the book value of the aforementioned companies was adopted.

The recent outbreak of the Novel Coronavirus (COVID-19) has brought high volatility to global financial markets and uncertainty to the stock market. It is expected that valuation will be very sensitive to development of the pandemic and changes in the financial markets. The extents of impact on different sectors of the market are different and the time for marketing and negotiating sale of shares will be longer than normal. There will be less certainty as to how long a valuation may sustain and financial situation may fluctuate rapidly and materially over a short period of time. Our valuation is valid only at the valuation date and any subsequent changes in market conditions as well as the resulting impacts on share prices after the

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APPENDIX V

valuation date cannot be taken into account. If any party intends to make reference to our valuation when entering into any transaction, he must bear in mind the high market volatility during this period of time and that share prices may or may not have changed since the valuation date.

Our conclusion of the market value was derived from generally accepted valuation procedures and practices that rely substantially on the use of various assumptions and the consideration of many uncertainties, not all of which can be easily quantified or ascertained.

Neither the whole nor any part of this report or any reference hereto may be included in any published document, circular or statement, or published in any way, without our prior written approval of the form and context in which it may appear.

Finally and in accordance with our standard practice, we must state that this report and valuation are for the exclusive use only of the addressee and for the purpose stated herein. No responsibility is accepted to any third party for the whole or any part of its contents.

9. REMARKS

Unless otherwise stated, all monetary amounts stated in this valuation report are in Renminbi (RMB).

We hereby confirm that we have neither present nor prospective interests in the Company, the Target Company or the value reported herein.

10. OPINION OF VALUE

Based on the investigation and analysis stated above and on the valuation method employed, the market value of the entire equity interest in the Target Company as at the Valuation Date is, in our opinion, reasonably estimated as RMB2,128,000,000 (RENMINBI TWO BILLION ONE HUNDRED TWENTY EIGHT MILLION ONLY) .

Yours faithfully, For and on behalf of

Cushman & Wakefield Limited

Yours faithfully, For and on behalf of Cushman & Wakefield Limited

Philip C Y Tsang

Registered Business Valuer registered with the Hong Kong Business Valuation Forum MSc, MHKIS Director, Valuation & Advisory Services

Bruce Oong

CPA Director, Valuation & Advisory Services

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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 not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTEREST

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

As at the Latest Practicable Date, interests and short positions in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the 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
		1,000,000
Lam Sing Kwong Simon	Beneficial owner	(long position)	0.13%

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:

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APPENDIX VI

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

Notes:

(1) The interests held by Pacific Climax consist of interests (long position) in 530,894,000 Shares. Ms. Xie Mei and Mr. Lin Kaihua, both being executive Directors, and Mr. 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, being an executive Director, and Mr. Wang Wenjin, being a nonexecutive 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) and in turn, the beneficial owner of all the issued share capital of Pacific Climax. Therefore, OCT Group is deemed, or taken to be interested in all the Shares which are beneficially owned by OCT Ltd., OCT (HK) and Pacific Climax for the purpose of the SFO.

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

3. COMPETING INTERESTS

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

4. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors has a service contract with any member of the Group which was not determinable by the Group within one year without payment of compensation (other than statutory compensation).

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APPENDIX VI

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 each has been named in this circular or has given opinions or advice which are contained herein are set out below:

Name	Qualifications
Opus Capital	a corporation licensed under the SFO to conduct
	Type 1 (dealing in securities) and Type 6
	(advising on corporate finance) regulated
	activities, being the Independent Financial Adviser
KPMG	Certified Public Accountants
Cushman & Wakefield Limited	Registered Professional Surveyor, being the
	Independent Valuer

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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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 among the Target Company, Zhongbao Investment Fund and OCT Lakeside in relation to the disposal of 51% equity interest in OCT Lakeside by the Target Company to Zhongbao Investment Fund at the consideration of approximately RMB60.53 million;
(b) the equity transfer agreement dated 27 December 2018 entered into among Wantex Investment, 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 at the total consideration of approximately RMB150.29 million;
(c) the cooperation agreement dated 26 March 2019 entered among Zhuhai Yiyun, Xiamen Yuzhou, Shenzhen Huajing and Zhongshan Yuhong in relation to the acquisition of 21% of equity interest and debt interest in Zhongshan Yuhong at a total consideration of approximately RMB340,380,433;
(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 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 21% of debt interest in Zhongshan Yuhong at a total consideration of approximately RMB339,116,986;
(f) the finance lease and factoring framework agreement entered into between OCT Financial Leasing and OCT Ltd. on 7 May 2019 in relation to provision of finance lease and factoring services from 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 from OCT Financial Leasing to OCT Group at an annual cap of RMB1,000,000,000 for one year from the date of independent shareholders’ approval;
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APPENDIX VI

(h) the State-owned Land Use Rights Grant Contract dated 30 May 2019 entered by OCT Gangya and Hefei Guojia jointly with Hefei Planning Bureau in respect of the acquisition of the Chaohu Land at a consideration of approximately RMB1,129 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 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 is 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. (合肥空港投資有限公司) in relation to the establishment of 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 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 between Chongqing OCT Real Estate and the Nanyang Bank;
(m) the limited partnership agreement dated 7 November 2019 entered into among Yuzhou Fund Management, Shenzhen OCT Huaxin, Shenzhen Huajing and Xiamen Zhongmao in relation to the establishment of Xiamen Partnership, pursuant to which, among others, 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 Hefei Airport Land at the total consideration of approximately RMB2,644 million;
(o) the limited partnership agreement entered into among Shenzhen OCT Huaxin, Shenzhen Huayou, Dongguan Industrial Investment, Songshan Lake Venture Capital and Dongguan Industrial M&A 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 1% and 44% of the total capital of the Dongguan Partnership, respectively;
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GENERAL INFORMATION

(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 from OCT Financing 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 between OCT Financial Leasing and OCT Group on 18 May 2020 in relation to the provision of finance lease and factoring services from OCT Financial Leasing to OCT Group at an annual cap of RMB1,000,000,000 for one year from the date of independent shareholders’ approval;
(r) the equity transfer agreement entered into among Shenzhen Huayou, 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 the 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 among 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 (the “ Lessor ”) and the Target Company (the “ Lessee ”) on 13 August 2020, pursuant to which: (i) the Lessor conditionally agreed to purchase the Leased Assets used in Chengdu Happy Valley currently owned by the Lessee, 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 RMB549,401,142.47, 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
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APPENDIX VI

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 and the two years ending 31 December 2022, respectively;

(w) the subscription agreement entered into among 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) 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;
(y) 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;
(z) the Equity Transfer Agreement; and
(aa) the Debt Transfer Agreement.

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.
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APPENDIX VI

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:

(a) the memorandum and articles of association of the Company;
(b) the annual reports of the Company for the three 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 consents as referred to under the paragraph headed “Experts and Consents” in this Appendix;
(e) the letter from the Independent Board Committee, the text of which is set out on pages 16 to 17 of this circular;
(f) the letter from the Independent Financial Adviser, the text of which is set out on pages 18 to 46 of this circular;
(g) the report from 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;
(h) 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;
(i) the property valuation report from the Independent Valuer, the text of which is set out in Appendix IV to this circular;
(j) the business valuation report from the Independent Valuer, the text of which is set out in Appendix V to this circular;
(k) the material contracts referred to in the paragraph headed “Material Contracts” in this Appendix;
(l) a copy of each circular issued pursuant to the requirements set out in Chapters 14 and/or 14A of the Listing Rules which has been issued since 31 December 2019 (being the date of which the last published accounts of the Company were made up); and
(m) this circular.
VI-8 -

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 30 September 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 Hong Kong 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 an EGM of the Company will be held at the conference room of the Company at 59/F, Bank of China Tower, 1 Garden Road, Hong Kong on Wednesday, 21 October 2020 at 10:30 a.m. or any adjournment of such meeting for the purposes of considering and, if thought fit, passing the following resolutions, with or without modifications, as ordinary resolutions of the Company:

ORDINARY RESOLUTION

“ THAT

(a) (i) the equity transfer agreement dated 4 September 2020 and entered into 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 Tianfu OCT Industry Development Co., Ltd. (成都天府華僑城實業發展有限公司, the “ Target Company ”) in relation to the disposal of 50.99% of equity interest in the Target Company (the “ Equity Transfer Agreement ”) (a copy of which has been produced to the Meeting marked “A” and
EGM-1 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

initialed by the Chairman of the Meeting for the purpose of identification) and (ii) the debt transfer agreement dated 4 September 2020 and entered into between Bantix International, OCT Chengdu Investment and the Target Company in relation to the assignment of the debt in the Target Company (the “ Debt Transfer Agreement ”, together with the Equity Transfer Agreement, the “ Transfer Agreements ”) (a copy of which has been produced to the Meeting marked “B”, and initialed by the Chairman of the Meeting for the purpose of identification), and the transactions contemplated under the Transfer Agreements 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 Transfer Agreements and the transactions contemplated thereunder.”
The Chinese names have been translated into English for reference only.

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

Hong Kong, 30 September 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 record date for determining qualification for attendance and voting at the EGM shall be 21 October 2020. In order to qualify for attendance and voting at the meeting, 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 15 October 2020.
EGM-2 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

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.
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.
EGM-3 -

AI assistant

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

51206_rns_2020-09-29_ca6c3a32-a618-466b-afee-d9702fab42cf.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Overseas Chinese Town (Asia) Holdings Limited

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF 50.99% OF EQUITY INTEREST AND ASSIGNMENT OF DEBT IN THE TARGET COMPANY

PRECAUTIONARY MEASURES FOR THE EGM

CONTENTS

DEFINITIONS

DEFINITIONS

Overseas Chinese Town (Asia) Holdings Limited

(Stock Code: 03366)

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF 50.99% OF EQUITY INTEREST AND ASSIGNMENT OF DEBT IN THE TARGET COMPANY

INTRODUCTION

LETTER FROM THE BOARD

EQUITY TRANSFER AGREEMENT

Date

Parties

Assets to be disposed

LETTER FROM THE BOARD

Payment of the Equity Interest Consideration

Completion

LETTER FROM THE BOARD

Conditions precedent

DEBT TRANSFER AGREEMENT

Date

Parties

LETTER FROM THE BOARD

Debt to be assigned

Payment of the Debt Interest Consideration

Conditions precedent

INFORMATION OF THE GROUP AND BANTIX INTERNATIONAL

LETTER FROM THE BOARD

INFORMATION OF OCT CHENGDU INVESTMENT

INFORMATION OF THE TARGET COMPANY

LETTER FROM THE BOARD

Financial information of the Target Group

FINANCIAL EFFECTS OF THE DISPOSAL AND USE OF PROCEEDS

Earnings

LETTER FROM THE BOARD

Assets and Liabilities

EFFECT OF THE FINANCE LEASE AGREEMENT ENTERED INTO BY THE TARGET COMPANY ON THE DISPOSAL

LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE DISPOSAL

LISTING RULES IMPLICATIONS

EGM

RECOMMENDATION

ADDITIONAL INFORMATION

Overseas Chinese Town (Asia) Holdings Limited

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF 50.99% OF EQUITY INTEREST AND ASSIGNMENT OF DEBT IN THE TARGET COMPANY

Yours faithfully,

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF 50.99% OF EQUITY INTEREST AND ASSIGNMENT OF DEBT IN THE TARGET COMPANY

INTRODUCTION

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

THE INDEPENDENT BOARD COMMITTEE

OUR INDEPENDENCE

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

BASIS OF OUR OPINION

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background information of the Group and Bantix International

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

FY2019

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1H2020

2. Background information of OCT Ltd. and OCT Chengdu Investment

3. Background information of the Target Group

Source: the Letter from the Board

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(i) Financial performance

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

FY2018

FY2019

1H2020

(ii) Financial position

4. Reasons for and benefits of the Disposal and use of proceeds

5. Industry prospects

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(A) Equity Transfer Agreement

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