RemeGen Co., Ltd. - Proxy Solicitation & Information Statement 2021

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all you shares in Overseas Chinese Town (Asia) Holdings Limited (the “ Company ”), you should hand this circular 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 ACQUISITION ACQUISITION OF LAND USE RIGHTS IN HEFEI AIRPORT INTERNATIONAL TOWN

26 July 2021

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

DEFINITIONS

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

“2019 Acquisition”

the acquisition of land use rights of five parcels of land located in the first phase of the Hefei Airport International Town (being part of the Project) with a total site area of approximately 1,042 mu (approximately 694,667 square meters) by Hefei OCT Industry on 13 December 2019. Further information of the 2019 Acquisition is set out in the announcement of the Company dated 13 December 2019 and the circular of the Company dated 23 January 2020

“Board”
the board of directors of the Company
“Business Day(s)” a day on which licensed banks in the PRC are open for business
“Company”
Overseas Chinese Town (Asia) Holdings Limited (華僑城(亞洲)控股有限公司), an exempted company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the main board of the Stock Exchange
“Confirmation Letter” the auction confirmation letter (成交確認書) entered into between Hefei OCT Industry and Hefei Natural Resources and Planning Bureau on 17 June 2021 as a result of successfully winning the bid for the auction
“connected person(s)” has the meaning ascribed to it under the Listing Rules
“Consideration”
the consideration for the acquisition of the land use rights of the Land
“controlling shareholder”
has the meaning ascribed to it under the Listing Rules
“Director(s)” the director(s) of the Company

“Group”

the Company and its subsidiaries as at the Latest Practicable Date

“Hefei Airport International Town”
Hefei Airport International Town (合肥空港國際小鎮) located in Xinqiao Technology Innovation Demonstration Zone in Hefei, the PRC
“Hefei Natural Resources and Hefei Municipal Natural Resources and Planning Bureau (合肥市自 Planning Bureau” 然資源和規劃局)
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DEFINITIONS

“Hefei OCT Industry” Hefei OCT Industry Development Co., Ltd. (合肥華僑城實業發展有限公司), a company established in the PRC which is held by OCT Guanghua and Huaxing Investment as to 51% and 49%, respectively “HK$” the 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 “Huaxing Investment” Hefei Huaxing Konggang Investment Co., Ltd. (合肥華興空港投資有限公司), a company established in the PRC

“Independent Third Parties” an independent third party not connected with the Company and its subsidiaries, their respective directors, chief executives and substantial shareholders and any of their associates within the meaning of the Listing Rules
“Joint Venture Agreement” the joint venture agreement dated 20 June 2019 and entered into between OCT Ganghua and Huaxing Investment in relation to the establishment of Hefei OCT Industry, further information of which is set out in the circular of the Company dated 23 January 2020
“JV Partners” OCT Ganghua and Huaxing Investment
“Land” four parcels of land, located in the second phase of Hefei Airport International Town, with a total site area of approximately 913.05 mu (approximately 608,700 square meters)
“Land Acquisition” the acquisition of land use rights of the Land through public bidding process at the auction
“Land Use Right Grant Contracts” State-owned Construction Land Use Rights Grant Contracts (國有建設用地使用權出讓合同) dated 30 June 2021 (as supplemented and amended by such supplemental contract(s), if any) entered into pursuant to the Confirmation Letter
“Latest Practicable Date” 20 July 2021, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange
“OCT Ganghua” Shenzhen OCT Ganghua Investment Holdings Co., Ltd. (深圳華僑城港華投資控股有限公司), a company established in the PRC and a wholly-owned subsidiary of the Company
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DEFINITIONS

“OCT Group”	Overseas Chinese Town Company Limited (華僑城集團有限公司),
	a PRC state-owned company established in the PRC, and the
	holding company of OCT Ltd.
“OCT (HK)”	Overseas Chinese Town (HK) Company Limited, a company
	incorporated in Hong Kong with limited liability and wholly
	owned by OCT Ltd.
“OCT Ltd.”	Shenzhen Overseas Chinese Town Company Limited (深圳華僑城
	股份有限公司), a company established in the PRC, the shares of
	which are listed on the Shenzhen Stock Exchange
“Pacific Climax”	Pacific Climax Limited, a company incorporated in the British
	Virgin Islands with limited liability, is a controlling shareholder of
	the Company and is wholly-owned by OCT (HK)
“PRC”	the People’s Republic of China, and for the purpose of this circular,
	excludes Hong Kong, the Macau Special Administrative Region of
	the People’s Republic of China and Taiwan
“PRC Governmental Body”	has the meaning ascribed to it under Rule 19A.04 of the Listing
	Rules
“Project”	the entire project in respect of the development of Hefei Airport
	International Town
“RMB”	Renminbi, the lawful currency of the PRC
“Share(s)”	the share(s) of the Company
“Shareholder(s)”	the shareholder(s) of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“%”	per cent

Certain Chinese names of institutions, natural persons or other entities have been translated into English and included in this circular as unofficial translations for reference only. 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) Ocorian Trust (Cayman) Limited Ms. Xie Mei (Chief Executive Officer) Windward 3, Regatta Office Park Mr. Lin Kaihua PO Box 1350 Grand Cayman Non-executive Director: Cayman Islands

Non-executive Director: Mr. Wang Wenjin

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

26 July 2021

To the Shareholders

Dear Sir or Madam,

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

INTRODUCTION

Reference is made to the announcement of the Company dated 17 June 2021 in relation to a very substantial acquisition regarding the acquisition of land use rights in Hefei Airport International Town.

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

ACQUISITION OF LAND USE RIGHTS

On 17 June 2021, Hefei OCT Industry, an indirect non-wholly owned subsidiary of the Company, successfully won the bid of the land use rights of the Land. Hefei OCT Industry signed the Confirmation Letter with Hefei Natural Resources and Planning Bureau on 17 June 2021. The auction was organised by

LETTER FROM THE BOARD

Hefei Natural Resources and Planning Bureau, Hefei Public Resources Trading Supervision and Administration Bureau (合肥市公共資源交易監督管理局), and was co-organised by Anhui Hefei Public Resources Trading Centre (安徽合肥公共資源交易中心) and Hefei Land and Mineral Transactions Management Office (合肥市土地礦產交易管理辦公室). The auction was conducted at the auction hall of Anhui Hefei Public Resources Trading Centre (安徽合肥公共資源交易中心).

On 30 June 2021, Hefei OCT Industry entered into the Land Use Rights Grant Contracts with Hefei Natural Resources and Planning Bureau in relation to the Land Acquisition. The procedures for delivery of the Land will be arranged within 30 days after the entering into of the Land Use Right Grant Contracts.

Reference is also made to the announcement of the Company dated 13 December 2019 and the circular of the Company dated 23 January 2020 regarding a very substantial acquisition of the Company with respect to the acquisition of land use rights in the first phase of Hefei Airport International Town by Hefei OCT Industry (i.e. the 2019 Acquisition). The Land is adjacent to the five parcels of land acquired in the 2019 Acquisition, and all parcels are part of the Project.

CONSIDERATION

The Consideration, being the land premium payable for the land use rights of the Land amounting to approximately RMB2,805 million in aggregate (refundable bid deposit totaling RMB870 million has been paid before bidding, which shall be used to offset the corresponding portion of the Consideration for the Land Acquisition). The Consideration shall be settled in either one of the following manners:

(1) the full Consideration to be settled within 30 days from the date of entering into the Land Use Rights Grant Contract; or
(2) 50% of the Consideration to be settled by 29 July 2021, and the remainder of the Consideration to be settled by 29 September 2021 along with the interest accrued on the remainder of the Consideration (the interest rate of which shall be determined by the rate published by the People’s Bank of China (中國人民銀行) as at the date of the settlement of the first 50% of the Consideration).

Hefei OCT Industry may choose one of the above means of settlement. Hefei OCT Industry will choose the (2) option.

The Consideration was arrived at as a result of the successful bidding of the Land at the auction. In determining the Consideration, the Directors have taken into account, among other things:

i. the reference land price of the Land listed by Hefei Natural Resources and Planning Bureau, in particular, the reference land price for commercial area and residential area.

As further detailed in the paragraph headed “Information on the Land” below, approximately 323 mu (approximately 215,333 square meters) of the Land are commercial area, and approximately 530 mu (approximately 353,333 square meters) of the Land are residential area.

LETTER FROM THE BOARD

According to the reference land prices listed by Hefei Natural Resources and Planning Bureau, the reference land price listed for commercial usage is RMB1,700,000 per mu (approximately RMB2,550 per square meter) and that for residential usage ranges from RMB4,000,000 per mu (approximately RMB6,000 per square meter) to RMB4,050,000 per mu (approximately RMB6,075 per square meter). Based on the above reference land prices, the reference land price for the commercial area and the residential area alone in aggregate is close to RMB2,700 million (before considering the area for other usage). The Company considers that the Consideration is generally in line with the reference land price listed as corresponding to the area of its different land usage;

ii. the development potential of the Land. The Land is located in the heart of the Hefei Airport International Town and is connected to a large-scale integrated circuit base and a smart electric car industry park currently under construction. Hefei Airport International Town will provide ancillary living service facilities to such integrated circuit industry base, smart electric car industry park and relevant industries in the surrounding area. The Company believes that such ongoing development in the surrounding area will enhance the value of the Land; and
iii. the minimum bidding price of RMB2,746 million set by the Hefei Land Administration Committee (合肥市土地管理委員會).

With reference to the above, the Directors consider that the Consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

The Consideration will be settled by Hefei OCT Industry with its own funds, and with shareholders’ loan from its shareholders which will be provided in proportion to their shareholdings in Hefei OCT Industry. The portion of shareholders’ loan by OCT Ganghua is expected to be approximately RMB1,030 million.

LAND USE RIGHTS GRANT CONTRACTS

On 30 June 2021, Hefei OCT Industry entered into the Land Use Rights Grant Contracts with Hefei Natural Resources and Planning Bureau. Pursuant to the Land Use Rights Grant Contracts, if Hefei OCT Industry fails to settle the Consideration in accordance with the aforementioned payment terms, it is liable to a penalty amounting to 0.1% of the part of the Consideration that is due to pay for each day of delay. If the delay is over 60 days and if Hefei OCT Industry still fails to make the payment after Hefei Natural Resources and Planning Bureau’s request, Hefei Natural Resources and Planning Bureau has the right to terminate the Land Use Rights Grant Contracts; it may claim its loss from Hefei OCT Industry and Hefei OCT Industry has no right to request the refund of any deposit.

Furthermore, Hefei OCT Industry shall commence construction work in relation to the Land by 28 February 2022. Set out below is the expected completion date of the different parcels of land under its corresponding Land Use Rights Grant Contracts:

LETTER FROM THE BOARD

Expected date of completion of
construction work under the	Land parcels	Total site area
Relevant Land Use Rights	(for identification	(approximate, in	Key designated usage of
Grant Contracts	purposes only)	square meters)	relevant parcel
28 February 2023	Parcel 2	56,300	Commercial and residential
			(mixed usage)
28 February 2024	Parcels 3 & 4	265,500	Residential, ancillary living
			facilities and green land
28 August 2024	Parcel 1	286,900	Commercial and residential
			(mixed use), commercial
			and cultural

Save as agreed otherwise, if Hefei OCT Industry fails to meet the aforementioned target dates, it is liable to a penalty amounting to 0.1% of the Consideration for each day of delay. Idle land fee amounting to 20% of the Consideration will be imposed if the Land is left idle for 1 year or more and less than 2 years; and the Land may be reclaimed if left idle for 2 years or more.

INFORMATION ON THE LAND

The Land, which is part of the Project, is located in the heart of Hefei Airport International Town, and is the second phase of the Hefei Airport International Town listed for sale by Hefei Natural Resources and Planning Bureau.

The Project concerns the development of Hefei Airport International Town. Hefei Airport International Town is expected to cover a scope of 9.2 square kilometers and located in the core district of the Xinqiao Technology Innovation Demonstration Zone (新橋科技創新示範區) in Anhui Province of the PRC with a view to cultivating an industrial cluster with international competitiveness and to be developed in phases. Hefei Airport International Town will provide ancillary living service facilities to the integrated circuit industry base and the smart electric car industry park connected to the Land, and Hefei Airport International Town is planned to develop commercial offices, ecological green land, ancillary living facilities and integrated service centres.

As part of the Project, the Land occupies a total site area of approximately 913.05 mu (approximately 608,700 square meters), of which (including the proportionate area for mixed usage area) approximately 530 mu (approximately 353,333 square meters) are residential area, and approximately 323 mu (approximately 215,333 square meters) are commercial area. The Land has a total planned gross floor area of approximately 745,000 square metres. The Land is designated for commercial, residential and cultural and other usage with a term of 40, 70 and 50 years, respectively. The Land is planned to develop small high-rise buildings, bungalows and townhouses in the residential area, and commercial streets and business offices in the commercial area. The average selling price ceiling of the residential commodity housing (roughcast) of the Land specified by Hefei Natural Resources and Planning Bureau is RMB13,800 per square meter. As at the Latest Practicable Date, the Land is a vacant site without any properties on it. The Company currently expects that the estimated development costs by Hefei OCT Industry to the Land will be approximately RMB4,800 million.

LETTER FROM THE BOARD

INFORMATION ON HEFEI OCT INDUSTRY

Hefei OCT Industry was established for the development of the Hefei Airport International Town pursuant to the terms of Joint Venture Agreement, and is held by OCT Ganghua, an indirect wholly-owned subsidiary of the Company and Huaxing Investment as to 51% and 49%, respectively. Huaxing Investment is principally engaged in industrial investment and investment management. The ultimate beneficial owner of Huaxing Investment is the State-owned Asset Supervision and Administration Commission of Hefei Municipal People’s Government.

Hefei OCT Industry was established for the single purpose relating to the acquisition of land use rights and development in respect of the Project. As of the Latest Practicable Date, Hefei OCT Industry has a registered capital of RMB10 billion, out of which RMB1.47 billion have been paid up by the JV Partners. Further information of Hefei OCT Industry and the Joint Venture Agreement have been set out in the circular of the Company dated 23 January 2020.

INFORMATION ON THE GROUP

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

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

INFORMATION ON HEFEI NATURAL RESOURCES AND PLANNING BUREAU

Hefei Natural Resources and Planning Bureau is a PRC governmental authority and the seller of the Land. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, Hefei Natural Resources and Planning Bureau is an Independent Third Party.

FINANCIAL EFFECT OF THE LAND ACQUISITION

Hefei OCT Industry is a subsidiary of OCT Ganghua and an indirect subsidiary of the Company. The financial results, assets and liabilities of Hefei OCT Industry is consolidated into the consolidated financial statements of the Group in accordance with Hong Kong Financial Reporting Standard 10, Consolidated Financial Statements .

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

(i) an increase of the Group’s assets arising from the Land amounting to approximately RMB2,899 million. Such book value has taken into account the Consideration of the Land, and ancillary taxes and interests on payment of Consideration;
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LETTER FROM THE BOARD

(ii) an expected decrease of the Group’s net cash position by approximately RMB1,911 million;
(iii) an increase in borrowing of approximately RMB990 million from non-controlling interest; and
(iv) an insignificant effect on the earnings of the Group.

REASONS FOR AND BENEFITS OF THE LAND ACQUISITION

The Land is part of the Project, which will be developed in different phases. Through the 2019 Acquisition, the Group has been participating in Phase 1 of the Hefei Airport International Town, which is adjacent to the Land and has been progressing smoothly as of the Latest Practicable Date. Participating in Phase 2 by the Land Acquisition is in line with the Group’s overall planning of the Project in the early stage, and is expected to create synergies among two Phases. The adjacencies will allow a unified planning and coordination, which in turns could allow a more efficient and comprehensive use of land resources owned by the Group in the Project.

Further, in view of the location and surrounding development of the Land and as further illustrated in the paragraph headed “Consideration” above, the Company is optimistic about the growth potential of the Land. Approximately 353,333 square meters of the Land are expected to be for residential use and approximately 215,333 square meters of the Land is expected to be for commercial use (including the proportionate area for mixed usage area). The Land Acquisition will therefore bring in sales income from the sale of the small high-rise buildings, bungalows and townhouses in the residential area of the Land and the sale of office buildings and commercial buildings in the commercial area of the Land, and rental income from the operation of the commercial area.

The Directors believe that the Land Acquisition will provide a good investment opportunity and allow the Group to expand its land reserves and in turn enhance the Group’s income and business scale, and is in the interest of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

As one or more of the relevant applicable percentage ratios (as defined in the Listing Rules) in respect of the Land Acquisition are more than 100%, the Land Acquisition constitutes a very substantial acquisition of the Company under Chapter 14 of the Listing Rules.

The Group’s principal business activities include property development, the Company is therefore regarded as a “Qualified Issuer” under Rule 14.04(10B) of the Listing Rules. The Land Acquisition is regarded as a “Qualified Property Acquisition” under Rule 14.04(10C) of the Listing Rules as the Land Acquisition involves an acquisition of governmental land(s) in the PRC from a PRC Governmental Body through an auction governed by the PRC law (as defined in Rule 19A.04 of the Listing Rules). The Land Acquisition is undertaken by the Group in its ordinary and usual course of business. The Land Acquisition is undertaken by the Group and Huaxing Investment via Hefei OCT Industry on a joint basis. Hefei OCT Industry was established for the single purpose relating to the acquisition of land use rights and development in respect of the Project which is consistent with the purpose of the Land Acquisition according to the Joint Venture Agreement which is prepared on an arm’s length base and on normal commercial terms. The Joint Venture Agreement also contains clauses that Hefei OCT Industry must not, (i) without the unanimous

LETTER FROM THE BOARD

consent from OCT Ganghua and Huaxing Investment, change the nature or scope of Hefei OCT Industry’s business and its scope of business shall be at all times consistent with the requirements specified in documents relating to the Project; or (ii) enter into any transactions which are not on an arm’s length basis. Further details of the Joint Venture Agreement are set out in the circular of the Company dated 23 January 2020.

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

The Land Acquisition is subject to reporting, announcement and circular requirements, but is exempt from shareholders’ approval requirement pursuant to Rule 14.33A of the Listing Rules.

RECOMMENDATION

The Board is of the view that the Land Acquisition is in the ordinary and usual course of business of the Company and on normal commercial terms that are fair and reasonable, and in the interests of the Company and Shareholders as a whole.

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

ADDITIONAL INFORMATION

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

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

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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 2018, 2019 and 2020 were disclosed in the following documents:

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

The audited consolidated financial statements of the Group for the year ended 31 December 2019 has 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 audited consolidated financial statements of the Group for the year ended 31 December 2020 has been set out in pages 97 to 217 of the 2020 annual report of the Company which was posted on 20 April 2021 on the Stock Exchange’s website (https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0420/ 2021042001081.pdf).

2. INDEBTEDNESS STATEMENT

As at the close of business on 31 May 2021, being the date of this indebtedness statement prior to the printing of this circular, the Group had a total borrowings of approximately RMB5,716.14 million, comprising secured bank loan of approximately RMB982.50 million, guaranteed bank loans of approximately RMB2,816.50 million; and unsecured and unguaranteed bank and related party loans of approximately RMB1,917.14 million.

As at 31 May 2021, the Group’s secured or guaranteed bank loans: (i) were secured by other property, plant and equipment and interests in leasehold land held for own use with a total carrying value of approximately RMB1,764.10 million; or (ii) with guarantees provided by OCT Ltd. and OCT (HK), which are intermediate parents of the Company.

As at 31 May 2021, the Group had outstanding obligations under lease with carrying amount of approximately RMB17.66 million.

As at 31 May 2021, save for the guarantees of approximately RMB172.73 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 May 2021, Overseas Chinese Town (Shanghai) Land Company Limited, a non-wholly owned subsidiary of the Company, participate in a real estate investment trust (the “ REITS ”) programme. The funds raised under the REITS programme totals RMB2.15 billion, consist of preferential asset-backed securities which amounts to RMB1.935 billion from investors other than the Group, and secondary asset-

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

backed securities which amounts to RMB0.215 billion from the Group. The entire funds raised (after deducting the relevant fees and expenses) from the two kinds of securities remained in the Group in the form of loans from the investors to the Group as long-term liabilities.

Foreign currency amounts have been, for the purposes of this indebtedness statement, translated into Renminbi at the approximate rates of exchange applicable at the close of business on 31 May 2021.

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 May 2021, the Group did not have any other outstanding mortgages, charges, debentures or other loan capital, bank overdrafts or loans, other similar indebtedness, lease liabilities under finance lease and operating lease or hire purchase lease commitments, liabilities under acceptance or acceptance credit, guarantees or other material contingent liabilities.

3. WORKING CAPITAL

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

The Company has obtained the relevant confirmations as required under Rule 14.66(12) of the Listing Rules.

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 2020 up to the Latest Practicable Date.

5. FINANCIAL AND TRADING PROSPECT OF THE GROUP

For the year ended 31 December 2020, the Group realised revenue from continuing operations of approximately RMB1.31 billion, representing a decrease of approximately 36.9% compared to the same period of 2019. For the year ended 31 December 2020, profit attributable to equity holders of the Company was approximately RMB64 million, representing a decrease of approximately 76.1% compared to the same period of 2019. For the year ended 31 December 2020, the Group’s gross profit margin from the continuing operations was approximately 24.2% (2019: approximately 37.0%), representing a decrease of 12.8 percentage points compared to the same period of 2019. As at 31 December 2020, the Group’s total assets amounted to approximately RMB25.422 billion; the Group’s total equity amounted to approximately RMB13.225 billion.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Comprehensive Development Business

In 2021, with the establishment and implementation of a long-term mechanism for the real estate industry, it is expected that future policies will remain consistent, under the main tone of “houses are for inhabitation, not for speculation, and implementation policies according to local conditions”, strengthening risk control, cultivating core areas, and exerting brand and product strength will become the homeopathic way to maintain competitive advantage.

In 2021, the Group’s comprehensive development projects are planned as follows:

(1) Hefei Airport International Town Project (owned as to 51% by the Group)

The project is scheduled to promote the sales of residential and commercial area of approximately 201,000 square meters. The phase 1 land parcels of Hefei Airport International Town project is situated at the core of the Xinqiao Technology Innovation Demonstration Zone in Hefei. Hefei Airport Economic Demonstration Zone is a provincial project of Anhui province that has formed a cluster of integrated circuit, new energy automobiles, 5G, artificial intelligence and other high technology industries, and attracted the best of domestic and international talents. The OCT Hefei Airport International Town Project Exhibition Center was launched to show the development vision of “post-urbanisation development demonstration” and development idea of “technology innovation+culture and creativity”, building the project into an online celebrity check-in place in Hefei.

The Land Acquisition concerns phase 2 of the Hefei Airport International Town.

(2) Hefei OCT Bantang Hot Spring Town Project (owned as to 51% by the Group)

The project is scheduled to promote the sales of residential and commercial area of approximately 112,000 square meters. The hotel and certain commercial projects are planned to start at the second half of 2021. Situated at core tourism hotspots of Chaohu, the land parcel of the Hefei OCT Bantang Hot Spring Town Project is in close vicinity to the Chaohu Bantang Hot Spring Resort in Hefei City, the only national tourism resort in Anhui province. Since the start of the project, Hefei OCT Bantang Hot Spring Town has successively carried out activities such as “Small Town Life Aesthetics Season”, National Day Carnival, “Intangible Cultural Heritage Workshop” and other activities and cultural travel experiences, which have triggered the widespread dissemination of Chaohu culture.

(3) Zhongshan Yuhong Project (owned as to 21% by the Group)

The project is scheduled to continue to promote the high-rise residential sales plan, with a saleable area of approximately 92,600 square meters. Situated at the Zhongshan Torch Development Zone (中山市火炬開發區), the project enjoyed the geographical advantages as an important innovation base for the technology industry in the Guangdong-Hong Kong-Macao Greater Bay Area. The high-rise residential properties of Phase I of Zhongshan Yuhong Project commenced sales in October 2020.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(4) Shanghai Suhewan Project (owned as to 50.5% by the Group)

The project is schedule to continue to increase product sales. It is favourably situated at the junction of Suzhou River and Huangpu River banks and within the core district of the Inner Ring, Shanghai, adjoining the Bund and facing Lujiazui across the river, and possesses highly scarce landscape resources. The project is an integration of arts and humanities, fashion business, high-end residence and urban entertainment.

(5) Chongqing OCT Land Project (owned as to 49% by the Group)

The project is schedule to continue to increase product sales. It is located at Lijia Block, New North Zone, Chongqing City. The project overlooks the panorama of Jialing River with the Happy Valley theme park in the neighborhood.

The Group will accelerate the development process of high-quality characteristic comprehensive development projects, continue to promote the realisation of existing properties, accelerate asset turnover, finely manage costs, and improve the efficiency of capital utilization. At the same time, the Group will actively acquire low-cost land, reserving comprehensive development projects in core metropolitan areas such as the Yangtze River Delta and the Guangdong-Hong KongMacao Greater Bay Area.

Equity Investment and Fund Business

In 2021, the private equity investment industry will usher in a new round of development opportunities amid adjustments. With policies encouraging the entry of long-term funds such as those from banks and insurance, and increasing support, the private equity investment industry may have more resources. The implementation of the comprehensive registration system will be accelerated, and the exit channels will be smoother and more diverse. Meanwhile, an intensification of industry competition, increasing financial supervision, a return to value investment, a focus on risk control and strengthening post-investment management will lay the foundation for the development and prosperity of investment institutions. Benefiting from these, industrial capital will have a good time for investment allocations. In addition, as the downward pressure on the global economy will increase and uncertain factors will lead to increased risk aversion, mature companies in middle and late stages will also receive more capital attention.

In 2021, the Group will actively implement the established strategies. In terms of fundraising, the Group will continue to expand the scale of fund management with government-guided funds and high-quality enterprises in the industry as its main partners. In terms of investment, the Group will combine direct equity investment with industry funds, to reasonably match short-term, medium-term and long-term project investments.

The Group’s equity investment and fund business in 2021 has already started with the following:

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APPENDIX I

(1) Xiamen Qiaorun Investment Partnership (Limited Partnership)

On 23 February 2021, Shenzhen Huayou Investment Co., Ltd. (深圳市華友投資有限公司, “ Shenzhen Huayou ”) and Shenzhen OCT Gangya Holdings Development Co. Ltd. (深圳華僑城港亞控股發展有限公司, “ Shenzhen OCT Gangya ”), both of which are indirect wholly-owned subsidiaries of the Company, entered into the limited partnership agreement with Panxing Capital Management (Shenzhen) Co., Ltd. (潘興資本管理（深圳）有限公司), Shanghai Xuxiang Trading Co. Ltd. (上海煦翔貿易有限公司) and Xiamen Zhongmao Yitong Commerce Co., Ltd. (廈門中茂益通商貿有限公司) in relation to the establishment of a partnership for the purpose of investment. The total capital contribution to be subscribed by all partners to the partnership is RMB800,020,000. The partnership will continue to accelerate corporate equity investment in urbanization projects in the Guangdong-Hong Kong-Macao Greater Bay Area, the Yangtze River Delta Economic Zone and other regions. For further details, please refer to the circular of the Company dated 23 April 2021.

(2) OCT Tourism and Culture Technology Fund

In early 2021, the fund has invested in Liweijia (a home Internet platform) and Yidong Technology (a research and development and manufacturing company of marine electric drive system). The fund will actively seek high-quality companies with the potential to become a leader in the segment, and carefully select high-quality projects.

(3) Shenzhen Qiaoheng No. 1 Investment Enterprise (Limited Partnership)

On 26 April 2021, Shenzhen Huayou and Shenzhen OCT Gangya entered into the limited partnership agreement with Shenzhen Haomei Enterprise Co., Ltd. (深圳市好美實業有限公司) and Shenzhen Jingcheng Enterprise Co., Ltd. (深圳市靜成實業有限公司) in relation to the establishment of a partnership for the purpose of investment. The total capital contribution to be subscribed by all partners to the partnership is RMB959,000,000. For further details, please refer to the circular of the Company dated 26 May 2021.

(4) Investment in Semk Holdings International Limited

On 7 July 2021, City Legend entered into an investment agreement with Semk Holdings International Limited (“ Semk Holdings ”), Semk Global Investment Ltd and Mr. Hui Ha Lam, pursuant to which City Legend has conditional agreed to subscribe and acquire an aggregate of approximately 9.5% of the enlarged issued share capital of Semk Holdings at an aggregate consideration of HK$142,500,585. For further details, please refer to the announcement of the Company dated 7 July 2021.

(5) Nantong Suxitong Zijing Huaxin Venture Investment Partnership Enterprise (Limited Partnership)

On 19 July 2021, Shenzhen OCT Huaxin and Shenzhen OCT Gangya entered into a partnership agreement with Nantong Zijing Huatong Corporate Management Limited (南通紫荊華通企業管理有限公司), Nantong Industry Investment Master Fund Limited (南通市產業

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

投資母基金有限公司), Nantong Sutong Technology Industry Park Holding Development Limited (南通蘇通科技產業園控股發展有限公司) and Yiwu Finance Holding Limited (義烏市金融控股有限公司) in relation to the establishment of a limited partnership for the purpose of investment. The total capital contribution to be subscribed by all partners to the partnership is RMB1,000,000,000. For further details, please refer to the announcement of the Company dated 19 July 2021.

In terms of management, the Group will actively reserve high-quality equity investment projects, and strengthen the post-investment empowerment with the invested companies in the advantageous industries of OCT Group. At the same time, the Company will continue to optimize the post-investment management system, strengthen the risk identification and response capabilities of the investee enterprises to minimize investment risks. In terms of exit, the Group’s equity investment projects and fund investments will usher in partial exits, contributing investment income and bringing back capital.

Material Acquisitions and Disposals Since 1 January 2021 up to the Latest Practicable Date

Xiamen Qiaorun Investment Partnership (Limited Partnership)

On 23 February 2021, Shenzhen Huayou and Shenzhen OCT Gangya, both of which are indirect wholly-owned subsidiaries of the Company, entered into the limited partnership agreement with Panxing Capital Management (Shenzhen) Co., Ltd. (潘興資本管理（深圳）有限公司), Shanghai Xuxiang Trading Co. Ltd. (上海煦翔貿易有限公司) and Xiamen Zhongmao Yitong Commerce Co., Ltd. (廈門中茂益通商貿有限公司) in relation to the establishment of a partnership for the purpose of investment. The total capital contribution to be subscribed by all partners to the partnership is RMB800,020,000 (among which Shenzhen OCT Gangya and Shenzhen Huayou are required to contribute, RMB10,000 and RMB600,000,000, representing approximately 0.001% and 74.998% of the total capital of the partnership, respectively). For further details, please refer to the circular of the Company dated 23 April 2021.

Supplemental Agreement for Subscription of 49% Interest in the Cayman Fund and Disposal of Equity Interest of City Turbo

In December 2020, the Company and HNW Investment Fund Series SPC entered into the cooperation agreement in relation to (among others) (i) the subscription of not more than 49% interest of Serica segregated portfolio (“ Cayman Fund ”); (ii) the disposal of the entire issued shares of City Turbo Limited (港名有限公司) (“ City Turbo ”); and (iii) the granting of share repurchase options. For further details, please refer to the paragraph headed “Material Acquisitions and Disposals – For the year ended 31 December 2020 – Subscription of 49% Interest in the Cayman Fund and Disposal of Equity Interest of City Turbo” below in this Appendix I.

On 9 April 2021, the Company, City Legend, HNW Investment Fund Series SPC, CCB International Asset Management Limited, other investors, and City Turbo and Xi’an OCT Land entered into a supplemental agreement to the private placing memorandum under which, subject to all parties to amend the open period for the transfer or redemption of the fund shares of such Cayman Fund.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Shenzhen Qiaoheng No. 1 Investment Enterprise (Limited Partnership)

On 26 April 2021, Shenzhen Huayou and Shenzhen OCT Gangya entered into the limited partnership agreement with Shenzhen Haomei Enterprise Co., Ltd. (深圳市好美實業有限公司) and Shenzhen Jingcheng Enterprise Co., Ltd. (深圳市靜成實業有限公司) in relation to the establishment of a partnership for the purpose of investment. The total capital contribution to be subscribed by all partners to the partnership is RMB959,000,000 (among which Shenzhen OCT Gangya and Shenzhen Huayou are required to contribute, RMB10,000 and RMB719,240,000, representing approximately 0.001% and 74.999% of the total capital of the partnership, respectively). For further details, please refer to the circular of the Company dated 26 May 2021.

Disposal of Listed Securities of Tongcheng-Elong

Between 27 August 2020 and 25 February 2021, City Legend disposed an aggregate of 59,154,000 listed shares of Tongcheng-Elong Holdings Limited (“ Tongcheng Elong ”) through a series of on-market transactions. The Company has also obtained a mandate to further dispose of up to 46,925,080 Tongcheng Elong shares on-market. For further details, please refer to the announcements of the Company dated 17 February 2021, 25 February 2021, and the two circulars of the Company both dated 23 April 2021.

Acquisition of the Land

On 17 June 2021, Hefei OCT Industry successfully won the bid of the land use rights of the Land at the aggregate consideration of approximately RMB2,805 million.

Investment in Semk Holdings International Limited

Nantong Suxitong Zijing Huaxin Venture Investment Partnership Enterprise (Limited Partnership)

On 19 July 2021, Shenzhen OCT Huaxin and Shenzhen OCT Gangya, both of which are indirect wholly-owned subsidiaries of the Company, entered into a partnership agreement with Nantong Zijing Huatong Corporate Management Limited (南通紫荊華通企業管理有限公司), Nantong Industry Investment Master Fund Limited (南通市產業投資母基金有限公司), Nantong Sutong Technology Industry Park Holding Development Limited (南通蘇通科技產業園控股發展有限公司) and Yiwu Finance Holding Limited (義烏市金融控股有限公司) in relation to the establishment of a limited partnership for the purpose of investment. The total capital contribution to be subscribed by all partners to the partnership is RMB1,000,000,000 (among which Shenzhen

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APPENDIX I

OCT Huaxin and Shenzhen OCT Gangya are required to contribute RMB10,000,000 and RMB390,000,000, representing 1% and 39% of the total capital of the partnership, respectively). For further details, please refer to the announcement of the Company dated 19 July 2021.

Please also refer to the paragraphs headed “Comprehensive Development Business” and “Equity Investment and Fund Business” above for additional information.

6. MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

For the year ended 31 December 2018

The total equity of the Group as at 31 December 2018 was approximately RMB11.744 billion. As at 31 December 2018, the Group had current assets of approximately RMB11.566 billion and current liabilities of approximately RMB10.568 billion. The current ratio was approximately 1.09 as at 31 December 2018, representing a decrease of 0.62 as compared with that as at 31 December 2017 mainly due to inventory of approximately RMB1.96 billion being transferred from current assets to non-current assets and a number of additional long term equity investment projects during the period. The Group generally finances its operations with internally generated cash flow, credit facilities provided by banks and shareholder’s loans. As at 31 December 2018, the Group had outstanding bank and other loans of approximately RMB6.391 billion, without any fixed-rate loans.

As at 31 December 2018, the interest rates of bank and other loans of the Group ranged from 3.14% to 6.38% per annum. Some of those bank loans were secured by certain assets of the Group and corporate guarantees provided by certain related companies of the Company. The Group’s gearing ratio (being the total borrowings including bills payable and loans divided by total assets) was approximately 35.24% as at 31 December 2018, representing an increase of 8.31 percentage points as compared with approximately 26.93% 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 88.90% of the total amount of outstanding bank and other loans of the Group amounting to approximately RMB5.68 billion was in Hong Kong Dollars; approximately 11.10% of which amounting to approximately RMB708.50 million was in RMB; no outstanding bank and other loans were in United States Dollars.

As at 31 December 2018, the total cash and bank balance of the Group was approximately RMB3.223 billion, of which approximately 67.60% was denominated in United States Dollars, approximately 30.30% was denominated in RMB and approximately 2.10% was denominated in Hong Kong Dollars.

For the year ended 31 December 2019

The total equity of the Group as at 31 December 2019 was approximately RMB11.591 billion. As at 31 December 2019, the Group had current assets of approximately RMB9.564 billion and current liabilities of approximately RMB7.219 billion. The current ratio was approximately 1.32 as at 31 December 2019, representing an increase of 0.23 as compared with that as at 31 December 2018,

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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 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 Group had outstanding bank and other loans of approximately RMB8.116 billion, without any fixed-rate loans. As at 31 December 2019, the interest rates of bank and other loans of the Group ranged from 3.37% to 4.99% per annum. Some of those bank loans were secured by certain assets of the Group and corporate guarantees provided by certain related companies of the Company. The Group’s gearing ratio (being the total borrowings including bills payable and loans divided by total assets) was approximately 36.17% as at 31 December 2019, representing an increase of 0.93 percentage points as compared with approximately 35.24% as at 31 December 2018, mainly due to the increase in the amount of loans as at the end of the year ended 31 December 2019.

As at 31 December 2019, approximately 61.90% of the total amount of outstanding bank and other loans of the Group amounting to approximately RMB5.021 billion was denominated in Hong Kong Dollars and approximately 38.10% of which amounting to approximately RMB3.095 billion was denominated in RMB.

As at 31 December 2019, the total cash and bank balance of the Group was approximately RMB2.681 billion, of which approximately 58.50% was denominated in United States Dollars, approximately 32.90% was denominated in RMB and approximately 8.60% was denominated in Hong Kong Dollars.

For the year ended 31 December 2020

The total equity of the Group as at 31 December 2020 was approximately RMB13.186 billion. As at 31 December 2020, the Group had current assets of approximately RMB14.198 billion and current liabilities of approximately RMB4.634 billion. The current ratio was approximately 3.06 as at 31 December 2020, representing an increase of 1.74 as compared with that as at 31 December 2019, mainly due to mainly due to the Group having sold the Chengdu OCT Project and Xi’an OCT Land Project to revitalize existing funds in 2020. The Group generally finances its operations with internally generated cash flow, credit facilities provided by banks and shareholder’s loans.

As at 31 December 2020, the Group had outstanding bank and other loans of approximately RMB6.606 billion, approximately RMB2.078 billion was fixed-rate loans. As at 31 December 2020, the interest rates of bank and other loans of the Group ranged from 1.33% to 4.75% per annum. Some of those bank loans were secured by certain assets of the Group and corporate guarantees provided by certain related companies of the Company. The Group’s gearing ratio (being the total borrowings including bills payable and loans divided by total assets) was approximately 34.8% as at 31 December 2020, representing an increase of 0.4 percentage points as compared with approximately 34.4% as at 31 December 2019, which was approximate with that of the same period in 2019.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

As at 31 December 2020, approximately 53.8% of the total amount of outstanding bank and other loans of the Group amounting to approximately RMB3.556 billion was denominated in Hong Kong Dollars and approximately 46.2% of which amounting to approximately RMB3.050 billion was denominated in RMB.

As at 31 December 2020, approximately 0.4% of the total amount of cash and cash equivalents of the Group was denominated in United States Dollars, approximately 52.6% of which was denominated in Renminbi and approximately 47.0% of which was denominated in Hong Kong Dollars.

Funding and Treasury Policies

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

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

The Group considers that exchange rate fluctuations may have some effect on the overall financial performance of the Group but it is still at a manageable level. The Group will continue to monitor the situation and may consider entering into hedging arrangements in order to minimise foreign exchange risks, if and when necessary. As at 31 December 2018, 2019 and 2020, the Group had no material exposure under foreign exchange contracts or any other hedging instruments.

Interest Expenses

For the years ended 31 December 2018, 2019 and 2020, the interest expenses of the Group were approximately RMB144.88 million, RMB227.93 million and RMB183 million, respectively. A large portion of the interest expenses was incurred as a result of bank borrowings obtained by the Group for the development of integrated businesses.

Employees and Remuneration Policy

As at 31 December 2018, 2019 and 2020, the Group employed 600, 234 and 314 full-time employees, respectively. The basic remunerations of the employees of the Group are determined with reference to the industry’s remuneration benchmark, the employees’ experience and their performance, and equal opportunities will be offered to all staff members. Salaries of the employees are maintained at a competitive level and are reviewed annually, with reference to the relevant labour market and economic situation. Directors’ remuneration is determined based on a variety of factors such as market conditions and responsibilities assumed by each Director. Apart from the basic remuneration and statutory benefits, the Group also provides bonuses to the staff based upon the Group’s results and their individual performance.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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

Under the ordinary resolution passed at the extraordinary general meeting on 15 February 2011, the Board adopted a new share option scheme (the “ New Scheme ”). As at 2 March 2016, all share options granted under the New Scheme have expired, lapsed and cancelled. As at 31 December 2018, 2019 and 2020, no share option was granted, exercised, lapsed and cancelled.

Contingent Liabilities

As at 31 December 2018, 2019 and 2020, guarantees given to financial institutions for mortgages facilities granted to buyers of the Group’s properties amounted to approximately RMB823.99 million, RMB322.02 million and RMB100 million, respectively.

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

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

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

Significant Investments

For the years ended 31 December 2018 and 2019, the significant investments held by the Group which were classified as fair value through other comprehensive income (“ FVOCI ”) were as follows:

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

For the year ended 31 December 2018

							Size of the
							investment to the
	Number of	Approximate	Net gain/(loss)				value of the total
	shares held by	percentage of	for the year	Dividend			assets of the
	the Group as at	shareholding as	ended	received for the		Fair value as at	Group as at
	31 December	at 31 December	31 December	year ended 31		31 December	31 December
Name of investment	2018	2018	2018	December 2018	Investment cost	2018	2018
		%	RMB’000	RMB’000	RMB’000	RMB’000	%
*Equity securities*
*designated at*
*FVOCI*
Listed shares
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
	Number of	Approximate						investment to the
	shares held by	percentage of	Net gain/(loss)		Dividend			value of the total
	the Group as at	shareholding as		for the year	received for the		Fair value as at	assets of the
	31 December	at 31 December		ended 31	year ended 31		31 December	Group as at 31
Name of investment	2019	2019	December 2019		December 2019	Investment cost	2019	December 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%

Note:

The net movement is recognised in other comprehensive income.
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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

For the year ended 31 December 2020, the Group did not hold any significant investment which was classified as equity securities designated at FVOCI.

Going forward, the 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 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 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 International Limited (華昌國際有限公司, “ 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.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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.

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 (the “ 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.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Disposal of 51% equity interest in OCT Lakeside

On 24 December 2018, Chengdu Tianfu OCT Industry Development Company Limited (成都天府華僑城實業有限公司, “ Chengdu OCT ”), Zhongbao Investment Overseas Chinese Town (Shenzhen) Tourism Cultural City Renewal Equity Investment Fund Partnership (Limited Partnership) (中保投華僑城（深圳）旅遊文化城市更新股權投資基金合夥企業(有限合夥), “ Zhongbao Investment Fund ”) and Chengdu Tianfu OCT Lakeside Business Management Co. Ltd. (成都天府華僑城湖濱商業管理有限公司, “ OCT Lakeside ”) entered into an equity transfer agreement, pursuant to which Chengdu OCT agreed to sell 51% equity interest in OCT Lakeside to Zhongbao Investment Fund at the consideration of RMB60.53 million. Upon completion of the transfer, OCT Lakeside was owned as to 49% and 51% by the Chengdu OCT 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 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. Pursuant to such 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 such 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.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Finance lease and factoring framework agreements

On 7 May 2019, OCT Financial Leasing entered into 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 these finance lease and factoring framework agreements shall be effective for one year from the date of approval of these 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) (“ Shenzhen 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, Shenzhen OCT Gangya entered into a cooperation agreement with Hefei Guojia, pursuant to which Shenzhen OCT Gangya and Hefei Guojia agreed to establish a company (the “ Project Company ”), in which Shenzhen 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 such cooperation agreement shall not exceed RMB2,352,941,176, of which RMB1,200,000,000 and RMB1,152,941,176 is attributable to Shenzhen OCT Gangya and Hefei Guojia, respectively, in proportion to their respective shareholdings in the Project Company. For further details, please refer to the announcements of the Company dated 15 May 2019 and 3 June 2019, and the circular of the Company dated 24 June 2019.

Establishment of Xiamen Partnership

On 7 November 2019, Shenzhen OCT Huaxin Equity Investment Management Limited (深圳市華僑城華鑫股權投資管理有限公司, “ Shenzhen OCT Huaxin ”) and Shenzhen Huajing, both of which are indirect wholly-owned subsidiaries of the Company, entered into a limited partnership agreement with Shenzhen Qianhai Yuzhou Fund Management Co., Ltd. (深圳前海禹舟基金管理有限公司, “ Yuzhou Fund Management ”) and Xiamen Zhongmao Yitong Commerce Co., Ltd. (廈門中茂益通商貿有限公司, “ Xiamen Zhongmao ”) in relation to the establishment of Xiamen OCT Runyu Investment Partnership (Limited Partnership) (廈門華僑城潤禹投資合夥企業（有限合夥）, the “ Xiamen Partnership ”) with the total capital contribution of RMB1.5 billion. The capital contribution to be subscribed by Yuzhou Fund Management, Shenzhen OCT Huaxin, Shenzhen Huajing and Xiamen Zhongmao will be RMB1,000,000, RMB1,000,000, RMB1,168,000,000 and RMB330,000,000, respectively. For further details, please refer to the announcement of the Company dated 7 November 2019 and the circular of the Company dated 24 December 2019.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Acquisition of land use right in Heifei Airport International Town (2019 Acquisition)

Hefei OCT Industry successfully won the bid of the land use rights of the 5 parcels of land with a total site area of approximately 1,042 sq.m. located at the first phase of Hefei Airport International Town, 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 with Hefei Natural Resources and Planning Bureau in relation to the acquisition of such land use rights. 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 year ended 31 December 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 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 agreements with: (i) 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 annual caps for the above 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.

Entering into Finance Lease Agreement for Chengdu Happy Valley

On 13 August 2020, Chengdu Tianfu OCT Industry Development Co., Ltd. (成都天府華僑城實業發展有限公司, “ Chengdu OCT ”), an indirect non-wholly owned subsidiary of the Company, entered into a finance lease agreement with CMB Financial Leasing Co., Ltd. (招銀金融租賃有限公司), pursuant to which: (i) CMB Financial Leasing Co., Ltd. conditionally agreed to purchase certain amusement and ancillary facilities (such as roller coaster and waterpark facilities) used in Chengdu Happy Valley currently owned by Chengdu OCT, and (ii) following the acquisition, CMB Financial Leasing Co., Ltd. conditionally agreed to lease the leased assets to Chengdu OCT, for a lease term of 36 months. For further details, please refer to the announcement dated 13 August 2020 and the circular dated 30 September 2020 of the Company.

Assignment of 50.99% of Equity Interest and Debt in Chengdu OCT

Bantix International Limited (“ Bantix International ”) entered into the equity transfer agreement with OCT (Chengdu) Investment Co., Ltd. (華僑城（成都）投資有限公司, “ OCT Chengdu Investment ”) and Chengdu OCT on 4 September 2020 in relation to the transfer of 50.99% of the equity interest in Chengdu OCT to OCT Chengdu Investment at the consideration of RMB1,092 million; Bantix International, OCT Chengdu Investment and Chengdu OCT entered into

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

the debt transfer agreement on 4 September 2020 in relation to the assignment of the debt of RMB160 million from Bantix International to OCT Chengdu Investment. For further details, please refer to the announcement dated 4 September 2020 and the circular dated 30 September 2020 of the Company.

Subscription of 49% Interest in the Cayman Fund and Disposal of Equity Interest of City Turbo

The Company and HNW Investment Fund Series SPC entered into the cooperation agreement on 8 December 2020 in relation to (among others) (i) the subscription of not more than 49% interest of Serica segregated portfolio at the subscription amount of not more than HK$417 million; (ii) the disposal of the entire issued shares of City Turbo Limited (港名有限公司) (“ City Turbo ”) (including the entire assets, rights and liabilities of City Turbo) at the consideration of approximately HK$2,037 million; and (iii) the granting of share repurchase options to other investors in respect of their respective participating shares. For further details, please refer to the announcement dated 8 December 2020 and the circular dated 15 December 2020 of the Company.

Disposal of Listed Securities of Tongcheng-Elong

City Legend disposed on-market the listed securities of Tongcheng-Elong in a series of transactions. After six disposals, the Group held 70,549,880 of Tongcheng-Elong shares, accounting for approximately 3.25% of the issued share capital of Tongcheng-Elong as at 30 November 2020. For further details, please refer to the announcements dated 28 August 2020, 11 November 2020, 17 November 2020, 20 November 2020, 2 December 2020 and 18 December 2020 of the Company in relation to six disposals and the circular dated 31 December 2020.

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GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTEREST

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

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

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

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

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GENERAL INFORMATION

APPENDIX II

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

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

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

Notes:

(1) The interests held by Pacific Climax consist of interests (long position) in 530,894,000 Shares. Ms. Xie Mei and Mr. Lin Kaihua, both being executive Directors, and Mr. Zhang Jing, being a non-executive Director, are also directors of Pacific Climax.
(2) OCT (HK) is the beneficial owner of all the issued share capital in Pacific Climax. Therefore, OCT (HK) is deemed, or taken to be interested in all the Shares beneficially held by Pacific Climax for the purpose of the SFO. Ms. Xie Mei, being an executive Director, and Mr. Zhang Jing, being a non-executive Director, are also directors of OCT (HK).
(3) OCT Ltd. is the beneficial owner of all the issued share capital of OCT (HK), which is in turn the beneficial owner of all the issued share capital of Pacific Climax. OCT Ltd. is deemed, or taken to be interested in all the Shares which are beneficially owned by OCT (HK) and Pacific Climax pursuant to the SFO. OCT Ltd. is a company incorporated in the PRC, the shares of which are listed on the Shenzhen Stock Exchange. OCT Ltd. is a subsidiary of OCT Group.
(4) OCT Group is the holding company of OCT Ltd. and together with its wholly-owned subsidiary, 深圳華僑城資本投資管理有限公司 (Shenzhen OCT Capital Investment Management Company Limited), hold 47.97% of the issued shares of OCT Ltd., which is the beneficial owner of all the issued shares of OCT (HK) and in turn, the beneficial owner of all the issued share capital of Pacific Climax. Therefore, OCT Group is deemed, or taken to be interested in all the Shares which are beneficially owned by OCT Ltd., OCT (HK) and Pacific Climax for the purpose of the SFO.

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

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GENERAL INFORMATION

APPENDIX II

3. COMPETING INTERESTS

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

4. SERVICE CONTRACTS

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

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

As at the Latest Practicable Date, none of the Directors had any interest, direct or indirect, in any assets which have been, since 31 December 2020 (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 2020 (being the date to which the latest published accounts of the Company were made up) up to and including the Latest Practicable Date.

7. MATERIAL CONTRACTS

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

(a) the lease agreement dated 5 July 2019 entered into between Overseas Chinese Town (Shanghai) Land Company Limited (華僑城（上海）置地有限公司, “ OCT Shanghai Land ”) and Shanghai Huahe Real Estate Development Co., Ltd. (上海華合房地產開發有限公司, “ Shanghai Huahe ”) in relation to the lease of certain properties by OCT Shanghai Land to Shanghai Huahe for a term of 36 months from 1 August 2019 to 31 July 2022 at a monthly rent of RMB769,145;
(b) 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, “ Nanyang Bank ”), pursuant to which the Company agreed to
II-3 -

GENERAL INFORMATION

APPENDIX II

guarantee up to 49% of the loan (being RMB392,000,000) under a loan agreement dated 26 June 2019 and entered into between Chongqing OCT Real Estate Limited (重慶華僑城置地有限公司) and the Nanyang Bank;

(c) the limited partnership agreement dated 7 November 2019 entered into between Shenzhen Qianhai Yuzhou Fund Management Co., Ltd. (深圳前海禹舟基金管理有限公司), Shenzhen OCT Huaxin Equity Investment Management Limited (深圳市華僑城華鑫股權投資管理有限公司, “ Shenzhen OCT Huaxin ”), Shenzhen Huajing and Xiamen Zhongmao Yitong Commerce Co., Ltd. (廈門中茂益通商貿有限公司) in relation to the establishment of a limited partnership, pursuant to which Shenzhen OCT Huaxin and Shenzhen Huajing are required to contribute RMB1,000,000 and RMB1,168,000,000, representing 0.07% and 77.87% of the total capital of such partnership, respectively;
(d) five State-owned Land Use Rights Grant Contracts dated 27 December 2019 entered into between Hefei OCT Industry and Hefei Natural Resources and Planning Bureau in respect of the acquisition of the land use rights of 5 parcels of land with a total site area of approximately 1,042 mu located at the first phase of Hefei Airport International Town at the total consideration of approximately RMB2,644 million;
(e) the limited partnership agreement entered into between Shenzhen OCT Huaxin, Shenzhen Huayou Investment Limited (深圳市華友投資有限公司, “ Shenzhen Huayou”), Dongguan City Industrial Investment Parent Fund Co., Ltd. (東莞市產業投資母基金有限公司), Guangdong Province Yueke Songshan Lake Innovation Venture Capital Parent Fund Co., Ltd. (廣東省粵科松山湖創新創業投資母基金有限公司) and Dongguan City Multiplier Program Industrial M&A Parent Fund Partnership (Limited Partnership) (東莞市倍增計劃產業併購母基金合夥企業（有限合夥）) in relation to the establishment of a limited partnership (“ Dongguan Partnership ”) on 6 March 2020, pursuant to which Shenzhen OCT Huaxin and Shenzhen Huayou are required to contribute RMB3,000,000 and RMB132,000,000, representing approximately 1% and 44% of the total capital of the such partnership, respectively;
(f) the finance lease and factoring framework agreement entered into between OCT Financial Leasing Co., Ltd. (華僑城融資租賃有限公司, “ OCT Financial Leasing ”) and OCT Ltd. on 18 May 2020 in relation to the provision of finance lease and factoring services by OCT Financial Leasing to OCT Ltd. at an annual cap of RMB1,000,000,000 for one year from the date of independent shareholders’ approval;
(g) the finance lease and factoring framework agreement entered into between OCT Financial Leasing and OCT Group on 18 May 2020 in relation to the provision of finance lease and factoring services by OCT Financial Leasing to OCT Group at an annual cap of RMB1,000,000,000 for one year from the date of independent shareholders’ approval;
(h) the equity transfer agreement entered into between Shenzhen Huayou, Happy Valley Cultural Tourism Development Co., Ltd. (歡樂谷文化旅遊發展有限公司, “ Happy Valley Cultural Tourism ”) and the Dongguan Partnership on 12 June 2020, pursuant to which Shenzhen
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GENERAL INFORMATION

APPENDIX II

Huayou agreed to transfer 1% of the equity interest in the Dongguan Partnership, representing a capital contribution of RMB3,000,000 by Shenzhen Huayou, to Happy Valley Cultural Tourism at a consideration of RMB3,000,185.40;

(i) 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;
(j) the subscription agreement entered into between the Company, OCT Group and the joint lead managers on 8 July 2020 in relation to the issue of US$500,000,000 4.50% senior guaranteed perpetual capital securities by the Company;
(k) the finance lease agreement entered into between CMB Financial Leasing Co., Ltd. (招銀金融租賃有限公司, the “ Lessor ”) and the Chengdu Tianfu OCT Industry Development Co., Ltd. (成都天府華僑城實業發展有限公司) (“ Chengdu OCT ” or the “ Lessee ”) on 13 August 2020, pursuant to which: (i) the Lessor conditionally agreed to purchase the amusement and ancillary facilities (such as roller coaster and waterpark facilities) used in Chengdu Happy Valley currently owned by the Lessee (the “ Leased Assets ”), at a consideration of RMB500,000,000.00 (“ Purchase Consideration ”), and (ii) following the acquisition, the Lessor conditionally agreed to lease the Leased Assets to the Lessee for a term of 36 months starting from the date of the payment of the Purchase Consideration by the Lessor to the Lessee, at an aggregate estimated lease payment of approximately RMB549,401,142.48, and upon expiry of the lease, the Lessee shall purchase the Leased Assets at a repurchase consideration of RMB1.00;
(l) 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 to Hefei OCT Industry for the period from 17 August 2020 to 31 December 2022 at the annual caps of RMB9,000,000, RMB8,000,000 and RMB8,000,000 for the period from 17 August 2020 to 31 December 2020, the year ending 31 December 2021 and the year ending 31 December 2022, respectively;
(m) the subscription agreement entered into between the Company, OCT Group and the joint lead managers on 20 August 2020 in relation to the issue of US$300,000,000 4.50% senior guaranteed perpetual capital securities by the Company;
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APPENDIX II

GENERAL INFORMATION

(n) an equity transfer agreement entered into, on 4 September 2020, between Bantix International Limited (“ Bantix International ”), OCT (Chengdu) Investment Co., Ltd. (華僑城（成都）投資有限公司, “ OCT Chengdu Investment ”) and Chengdu OCT in respect of the transfer of the 50.99% equity interest in Chengdu OCT to OCT Chengdu Investment at a consideration of RMB1,092,103,600;
(o) a debt transfer agreement entered into on 4 September 2020, between Bantix International, OCT Chengdu Investment and Chengdu OCT in respect of the assignment of the debt in the amount of RMB160,364,475.51 from Bantix International to OCT Chengdu Investment;
(p) 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;
(q) 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;
(r) the tenancy agreement dated 28 September 2020 entered into between OCT Gangya and Shenzhen Overseas Chinese Town Entertainment Investment Company Limited (深圳華僑城都市娛樂投資公司) in relation to the lease of the premises located at Rooms 3-1 to 3-3, 3/F, Jacaranda International Business Center, No. 8 Baishiroad East, Nanshan District, Shenzhen, the PRC for a term from 1 October 2020 to 30 September 2023 at a monthly rent of RMB278,200.00;
(s) the cooperation agreement dated 8 December 2020 and entered into between the Company and HNW Investment Fund Series SPC in relation to, among other things, (i) the subscription of not more than 49% interest in the Serica Segregated Portfolio at a subscription amount of not more than HK$417 million, and (ii) the disposal of the entire issued shares of City Turbo Limited (“ City Turbo ”) (including the entire assets, rights and liabilities of City Turbo) at a total consideration of approximately HK$2,037 million;
(t) the limited partnership agreement entered into between Shenzhen OCT Gangya Holdings Development Co. Ltd. (深圳華僑城港亞控股發展有限公司, “ Shenzhen OCT Gangya ”), Shenzhen Huayou, both of which are indirect wholly-owned subsidiaries of the Company, 上海煦翔貿易有限公司 (Shanghai Xuxiang Trading Co. Ltd.), 潘興資本管理（深圳）有限公司 (Panxing Capital Management (Shenzhen) Co., Ltd.) and 廈門中茂益通商貿有限公司 (Xiamen Zhongmao Yitong Commerce Co., Ltd.) in relation to the establishment of a partnership (the “ Xiamen Partnership ”) on 23 February 2021, pursuant to which Shenzhen OCT Gangya and Shenzhen Huayou are required to contribute, RMB10,000 and RMB600,000,000, representing approximately 0.001% and 74.998% of the total capital of the Xiamen Partnership, respectively;
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APPENDIX II

GENERAL INFORMATION

(u) the supplemental agreement dated 9 April 2021 entered into between, among others, the Company, City Legend, HNW Investment Fund Series SPC and City Turbo to the private placing memorandum under which, subject to all parties to the said supplemental agreement obtaining all requisite approvals, the open period for the transfer or redemption of the fund shares of the Serica Segregated Portfolio is to be amended;
(v) the limited partnership agreement entered into between Shenzhen OCT Gangya, Shenzhen Huayou, both of which are indirect wholly-owned subsidiaries of the Company, Shenzhen Haomei Enterprise Co., Ltd. (深圳市好美實業有限公司), Shenzhen Jingcheng Enterprise Co., Ltd. (深圳市靜成實業有限公司), in relation to the establishment of the a partnership (the “ Shenzhen Qiaoheng Partnership ”) on 26 April 2021, pursuant to which Shenzhen OCT Gangya and Shenzhen Huayou are required to contribute, RMB10,000 and RMB719,240,000, representing approximately 0.001% and 74.999% of the total capital of the Shenzhen Qiaoheng Partnership, respectively;
(w) four State-owned Land Use Rights Grant Contracts dated 30 June 2021 (and their respective supplemental agreements dated 30 June 2021) entered into between Hefei OCT Industry and Hefei Natural Resources and Planning Bureau in respect of the acquisition of the land use rights of the 4 parcels of land with a total site area of approximately 913.05 mu located at the second phase of Hefei Airport International Town at the total consideration of approximately RMB2,805 million;
(x) the property service framework agreement entered into between Hefei OCT Industry and OCT Property (Hefei) on 7 July 2021, pursuant to which OCT Property (Hefei) will provide property services for Hefei Airport International Town Project and the office areas of Hefei OCT Industry to Hefei OCT Industry for the period from 7 July 2021 to 31 December 2022;
(y) the investment agreement entered into between City Legend, Semk Holdings International Limited (“ Semk Holdings ”), Semk Global Investment Ltd (“ Semk Global ”) and Mr. Hui Ha Lam dated 7 July 2021, in respect of the subscription and acquisition of an aggregate of approximately 9.5% of the enlarged issued share capital of Semk Holdings by City Legend at an aggregate consideration of HK$142,500,585;
(z) the amended and restated shareholders’ agreement relating to Semk Holding entered into among City Legend, Semk Holdings, Semk Global, Top Plenty Limited, Sky Planner Investments Limited, Wisdom Thinker Limited and Unite Way Investment Holding Limited dated 9 July 2021 in connection with the management and control of Semk Holdings and its subsidiaries, and the rights and interests of its shareholders; and
(aa) the partnership agreement entered into among Shenzhen OCT Huaxin, Nantong Zijing Huatong Corporate Management Limited (南通紫荊華通企業管理有限公司), Shenzhen OCT Gangya, Nantong Industry Investment Master Fund Limited (南通市產業投資母基金有限公司), Nantong Sutong Technology Industry Park Holding Development Limited (南通蘇通科技產業園控股發展有限公司) and Yiwu Finance Holding Limited (義烏市金融控股有限公司) on 19 July 2021 in relation to the establishment of a limited partnership, pursuant to which
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GENERAL INFORMATION

APPENDIX II

Shenzhen OCT Huaxin and Shenzhen OCT Gangya are required to contribute, RMB10,000,000 and RMB390,000,000, representing 1% and 39% of the total capital of the partnership, respectively.

8. LITIGATION

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

9. GENERAL

(a) The company secretary and the qualified accountant of the Company is Mr. Fong Fuk Wai, who is a fellow member of the Hong Kong Institute of Certified Public Accountants.
(b) The Company’s registered office is at Ocorian Trust (Cayman) Limited, Windward 3, Regatta Office Park, PO Box 1350, Grand Cayman KY1-1108, 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.

10. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of the following documents is available for inspection during normal business hours except on Saturday, Sunday and public holidays at the office of the Company in Hong Kong at 59/F., Bank of China Tower, 1 Garden Road, Hong Kong 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 years ended 31 December 2018, 2019 and 2020;
(c) the material contracts referred to in the paragraph headed “Material Contracts” in this Appendix;
(d) 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 2020 (being the date of which the last published accounts of the Company were made up); and
(e) this circular.
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AI assistant

RemeGen Co., Ltd. — Proxy Solicitation & Information Statement 2021

51206_rns_2021-07-23_5979c8fb-c01a-45ad-a67e-2bd4c293fae1.pdf

Overseas Chinese Town (Asia) Holdings Limited

(Stock Code: 03366)

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

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

Overseas Chinese Town (Asia) Holdings Limited

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

INTRODUCTION

ACQUISITION OF LAND USE RIGHTS

LETTER FROM THE BOARD

CONSIDERATION

LETTER FROM THE BOARD

LAND USE RIGHTS GRANT CONTRACTS

INFORMATION ON THE LAND

INFORMATION ON HEFEI OCT INDUSTRY

INFORMATION ON THE GROUP

INFORMATION ON HEFEI NATURAL RESOURCES AND PLANNING BUREAU

FINANCIAL EFFECT OF THE LAND ACQUISITION

LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE LAND ACQUISITION

LISTING RULES IMPLICATIONS

LETTER FROM THE BOARD

RECOMMENDATION

ADDITIONAL INFORMATION

1. FINANCIAL INFORMATION OF THE GROUP

2. INDEBTEDNESS STATEMENT

3. WORKING CAPITAL

4. CONTINGENT LIABILITIES

5. FINANCIAL AND TRADING PROSPECT OF THE GROUP

Comprehensive Development Business

(1) Hefei Airport International Town Project (owned as to 51% by the Group)

(2) Hefei OCT Bantang Hot Spring Town Project (owned as to 51% by the Group)

(3) Zhongshan Yuhong Project (owned as to 21% by the Group)

(4) Shanghai Suhewan Project (owned as to 50.5% by the Group)

(5) Chongqing OCT Land Project (owned as to 49% by the Group)

Equity Investment and Fund Business

APPENDIX I

(1) Xiamen Qiaorun Investment Partnership (Limited Partnership)

(2) OCT Tourism and Culture Technology Fund

(3) Shenzhen Qiaoheng No. 1 Investment Enterprise (Limited Partnership)

(4) Investment in Semk Holdings International Limited

(5) Nantong Suxitong Zijing Huaxin Venture Investment Partnership Enterprise (Limited Partnership)

APPENDIX I

Material Acquisitions and Disposals Since 1 January 2021 up to the Latest Practicable Date

Xiamen Qiaorun Investment Partnership (Limited Partnership)

Supplemental Agreement for Subscription of 49% Interest in the Cayman Fund and Disposal of Equity Interest of City Turbo

Shenzhen Qiaoheng No. 1 Investment Enterprise (Limited Partnership)

Disposal of Listed Securities of Tongcheng-Elong

Acquisition of the Land

Investment in Semk Holdings International Limited

Nantong Suxitong Zijing Huaxin Venture Investment Partnership Enterprise (Limited Partnership)

6. MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP

For the year ended 31 December 2018

For the year ended 31 December 2019

For the year ended 31 December 2020

Funding and Treasury Policies

Interest Expenses

Employees and Remuneration Policy

Contingent Liabilities

Significant Investments

For the year ended 31 December 2018

For the year ended 31 December 2019

Material Acquisitions and Disposals

For the year ended 31 December 2018

Disposal of Huali Packaging (Huizhou)

Acquisition of 5.11% equity interest in Tongcheng-Elong

Acquisition of Changshu Land

Cornerstone Investment in Tianli Education

Cornerstone Investment in E-House Enterprise

Acquisition of 9.98% equity interest in Yuzhou Properties

Sale and Leaseback Arrangement

Disposal of 51% equity interest in OCT Lakeside

Disposal of 100% equity interest in Zhongshan Huali

For the year ended 31 December 2019

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

RemeGen Co., Ltd. Proxy Solicitation & Information Statement 2021