Sino-Ocean Group Holding Limited - 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 you should take, you should consult your stockbroker or other licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your Shares in Sino-Ocean Group Holding Limited, you should at once hand this circular to the purchaser or transferee or to a 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.

This circular appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company.

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.

==> picture [14 x 22] intentionally omitted <==

==> picture [10 x 19] intentionally omitted <==

==> picture [6 x 9] intentionally omitted <==

==> picture [9 x 16] intentionally omitted <==

==> picture [7 x 15] intentionally omitted <==

==> picture [8 x 19] intentionally omitted <==

==> picture [95 x 33] intentionally omitted <==

(1) MAJOR TRANSACTION IN RELATION TO DISPOSAL OF PROPERTY HOLDING COMPANIES,

(2) MAJOR TRANSACTION IN RELATION TO INVESTMENT IN A LIMITED PARTNERSHIP,

(3) RE-ELECTION OF RETIRING DIRECTORS,

AND

(4) NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial Adviser to the Company

Capitalised terms used in this cover page have the same meanings as defined in this circular.

A notice convening the EGM of Sino-Ocean Group Holding Limited to be held at Meeting Room, 31st Floor, Tower A, Ocean International Center, 56 Dongsihuanzhonglu, Chaoyang District, Beijing, PRC on Friday, 10 December 2021 at 9: 30 a.m. is set out on pages EGM-1 to EGM-3 of this circular.

A form of proxy for use at the EGM is enclosed to this circular and is also published on the websites of the Company (www.sinooceangroup.com) and the Stock Exchange (www.hkexnews.hk). If you intend to appoint a proxy to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s share registrar, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding the EGM (i.e., not later than 9: 30 a.m. on Wednesday, 8 December 2021 (Hong Kong Time)), or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish, the form of proxy previously submitted shall be deemed to be revoked.

PRECAUTIONARY MEASURES FOR THE EGM

To safeguard the health and safety of the Shareholders and to prevent the spreading of the COVID-19 pandemic, the following precautionary measures will be implemented at the EGM:

(1) Compulsory temperature screening/checks

(2) Wearing of surgical face mask Attendees who do not comply with the precautionary measures above may be denied entry to the EGM venue.

For the health and safety of the Shareholders, the Company would like to encourage the Shareholders to exercise their right to vote at the EGM by appointing the chairman of the EGM as their proxy instead of attending the EGM in person. Completion and return of the proxy form will not preclude the Shareholders from attending and voting in person at the EGM or any adjournment thereof should they so wish.

24 November 2021

PRECAUTIONARY MEASURES FOR THE EGM

To safeguard the health and safety of the Shareholders and to prevent the spreading of the COVID-19 pandemic, the following precautionary measures will be implemented at the EGM:

(1) Compulsory temperature screening/checks will be carried out on every attendee at the entrance of the EGM venue.
(2) Every attendee will be required to wear a surgical face mask throughout the EGM and sit at a distance from other attendees.

Attendees are requested to observe and practise good personal hygiene at all times at the EGM venue.

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

Due to the constantly evolving COVID-19 pandemic situation, the Company may be required to change the EGM arrangements when at appropriate. Shareholders should check the Company’s website (www.sinooceangroup.com) and/or the Stock Exchange’s website (www.hkexnews.hk) for future announcements and updates on the EGM arrangements.

– i –

			Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			8
APPENDIX I	—	FINANCIAL INFORMATION OF THE GROUP . . . . . . .	I-1
APPENDIX II	—	UNAUDITED PRO FORMA FINANCIAL
		INFORMATION OF THE GROUP . . . . . . . . . . . . . . . . . . .	II-1
APPENDIX III	—	VALUATION REPORTS OF THE SEED PROJECTS . .	III-1
APPENDIX IV	—	DETAILS OF THE RETIRING DIRECTORS TO BE
		RE-ELECTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	IV-1
APPENDIX V	—	GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .	V-1
NOTICE OF EGM		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

– ii –

DEFINITIONS

In this circular, unless the contents otherwise requires, the following expressions have the meanings as set out below.

‘‘Advances’’ the advances extended by the Onshore Seller to the Project Company on or prior to the Completion Date, the principal amount of which provided according to the pro forma closing consolidated financial statements of the Target Company amounted to approximately RMB1,038.54 million
‘‘Agreed Construction RMB2,550 million, being the costs for construction and Costs’’ development of Property A as agreed between the Sellers and the Purchasers
‘‘Agreed Value’’ RMB8,850 million, being the value of Property A as agreed between the Sellers and the Purchasers based on the Estimated Total GFA
‘‘Articles of the articles of association of the Company, as amended from Association’’ time to time
‘‘Audited Closing the audited consolidated financial statements of the Target Financial Company prepared as at the Completion Date by an auditor to Statements’’ be engaged jointly by the Sellers and the Purchasers
‘‘BAMS’’ Beijing Administration of Market Supervision or its local counterpart
‘‘Board’’
the board of Directors
‘‘Business Day’’ a day (other than a Saturday or Sunday) on which banks are open for general business in Hong Kong, the PRC and the British Virgin Islands
‘‘Company’’ Sino-Ocean Group Holding Limited (遠洋集團控股有限公司), a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 03377)
‘‘Completion’’ completion of the sale of the entire of the issued share capital of the Target Company (which in turn holds 99.9% of the equity interests in the Project Company) by the Offshore Seller to the Offshore Purchaser in accordance with the terms of the Sale and Purchase Agreement

– 1 –

DEFINITIONS

‘‘Completion Date’’
the date that is the fifth Business Day after the conditions precedent to Completion set out in the Sale and Purchase Agreement are satisfied or waived (as the case may be) but in no event shall the Completion Date be later than the earlier of (i) 31 March 2022 or (ii) the last Business Day of one month after the closing of the Partnership (or such other date as agreed in writing by the parties)
‘‘connected person(s)’’ has the meaning ascribed to it in the Listing Rules
‘‘Director(s)’’ the director(s) of the Company
‘‘Disposal’’ the disposal of the Sale Interests pursuant to the Sale and Purchase Agreement
‘‘Effective Net Rental Income’’
the effective net rental income (on an actual cash flow basis inclusive of tax) of Property A (including property management fee, car park fee and other income derived from Property A (if any)) in any trailing 12-month period
‘‘EGM’’ the extraordinary general meeting of the Company to be held at Meeting Room, 31st Floor, Tower A, Ocean International Center, 56 Dongsihuanzhonglu, Chaoyang District, Beijing, PRC on Friday, 10 December 2021 at 9: 30 a.m. to consider and, if thought fit, approve the Sale and Purchase Agreement, the Subscription Agreement, the Partnership Agreement, the transactions contemplated thereunder and the re-election of the retiring Directors
‘‘Estimated Net Asset a negative amount of approximately RMB1.77 million, being an Adjustment’’ estimate of the Net Asset Adjustment based on the pro forma closing consolidated financial statements of the Target Company
‘‘Estimated Total GFA’’ 105,500 sq.m., being an estimate of the Total GFA
‘‘Final Total GFA’’ the final Total GFA as reflected in the real estate title certificate of Property A
‘‘Fortune Joy’’ Fortune Joy Ventures Limited (瑞喜創投有限公司), a company incorporated in the British Virgin Islands with limited liability, which is directly or indirectly owned as to 49% by the Company, 25.5% by Huamao Focus Limited and 25.5% by Leading Bright Investment Limited
‘‘General Partner’’ Brilliant Day Limited (卓日有限公司), an exempted company incorporated under the laws of the Cayman Islands with limited liability and a wholly-owned subsidiary of Fortune Joy

– 2 –

DEFINITIONS

‘‘GFA’’

gross floor area

‘‘Group’’ the Company and its subsidiaries
‘‘HK$’’ or ‘‘HKD’’ Hong Kong dollars, the lawful currency of Hong Kong
‘‘HKFRS’’ Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants
‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC
‘‘Investment’’ the investment in the Partnership by the Sponsor Limited Partner pursuant to the Subscription Agreement and the Partnership Agreement
‘‘Investment the investment committee of the Partnership Committee’’
‘‘IRR’’ in respect of each Limited Partner, mean a compounded, cumulative net equity internal rate of return, calculated at the designated annual discount rate, which, when applied to each item of cash inflows and cash outflows of such Limited Partner, and discounted annually, produces a net present value of such cashflows equal to zero
‘‘Land’’ the land located at Plot Z6, the Core area of the Central Business District, East Third Ring Road, Chaoyang District, Beijing, the PRC (中國北京市朝陽區東三環商務中心區(CBD)核心區Z6地塊)
‘‘Latest Practicable 18 November 2021, being the latest practicable date for the Date’’ purpose of ascertaining certain information for inclusion in this circular
‘‘Limited Partners’’ the limited partners of the Partnership
‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange
‘‘Net Asset the adjustment for consolidated current assets and current Adjustment’’ liabilities of the Target Company (excluding the Advances, the Property B Deposit, the RMB1 billion due from the Offshore Seller to the Target Company and the item ‘‘Properties under Development’’ in the Audited Closing Financial Statements (i.e. the book value of assets including the apportioned Land corresponding to Property B))

– 3 –

DEFINITIONS

‘‘Net Property B Sale the net proceeds actually received by the Project Company in Proceeds’’ connection with the Property B Disposal and any other income actually received by the Project Company in connection with the Property B Disposal net of applicable taxes and expenses
‘‘Ocean Office Park’’ the grade-A office complex known as Ocean Office Park (遠洋光華國際) directly owned by 北京龍澤源置業有限公司 (Beijing Longzeyuan Real Estate Co., Ltd.[*] ) and located on a land parcel at No. 10–12, Jin Tong West Road, Chaoyang District, Beijing, the PRC (中國北京市朝陽區金桐西路10–12號) and No. 5, Jing Hua South Street, Chaoyang District, Beijing, the PRC (中國北京市朝陽區景華南街5號)
‘‘Offshore has the meaning as defined in the section headed ‘‘DISPOSAL Consideration’’ OF PROPERTY HOLDING COMPANIES — Consideration’’ of the letter from the Board in this circular
‘‘Offshore Purchaser’’ Jade Fortune Global Limited (翠運環球有限公司), a company incorporated in the British Virgin Islands with limited liability and a portfolio company wholly-owned by the Partnership
‘‘Offshore Seller’’ Fast Fame Capital Investment Limited (迅榮創富有限公司), a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company
‘‘Onshore has the meaning as defined in the section headed ‘‘DISPOSAL Consideration’’ OF PROPERTY HOLDING COMPANIES — Consideration’’ of the letter from the Board in this circular
‘‘Onshore Purchaser’’
北京遠睿企業管理諮詢有限公司 (Beijing Yuanrui Enterprise Management Consulting Co., Ltd.[*] ), a company established in the PRC with limited liability and a portfolio company wholly-owned by the Partnership
‘‘Onshore Seller’’ or Sino-Ocean Holding Group (China) Limited (遠洋控股集團（中 ‘‘Sino-Ocean China’’ 國）有限公司), a company established in the PRC with limited liability and a wholly-owned subsidiary of the Company
‘‘OOP Holding Company’’
Jovial Global Enterprises Limited (欣樂環球企業有限公司), a company incorporated in the British Virgin Islands with limited liability, which is wholly-owned by a property fund which a wholly-owned subsidiary of the Company is a 50% limited partner
‘‘Partnership’’
Sino-Ocean Prime Office Partners I LP, an exempted limited partnership formed under the laws of the Cayman Islands

– 4 –

DEFINITIONS

‘‘Partnership the amended and restated limited partnership agreement dated 13 Agreement’’ October 2021 entered into among the General Partner (for itself and acting as attorney for and on behalf of each of the Limited Partners (other than the Special Limited Partner)) and the Special Limited Partner in relation to the Partnership

‘‘PRC’’ the People’s Republic of China, excluding Hong Kong, the Macao Special Administrative Region of the PRC and Taiwan for the purpose of this circular
‘‘Project Company’’ 北京天江通睿置業有限公司 (Beijing Skyriver CBD Property Co., Ltd.[*] ), a company established in the PRC with limited liability and a wholly-owned subsidiary of the Company
‘‘Property’’ a grade-A office building being constructed by the Project Company on the Land, comprising Property A and Property B
‘‘Property A’’ floors 2 to 27, floor 1 (excluding the retail space of estimated floor area of 438 sq.m.) and the underground space (excluding 50 underground parking slots and the apportioned underground space corresponding to Property B) of the Property
‘‘Property B’’ floors 28 to 33 and certain retail space on floor 1 (with an estimated floor area of 438 sq.m.) of the Property, and 50 underground parking slots in the Property, which the Sellers and the Project Company contemplate to sell to an independent third party
‘‘Property B Deposit’’ the deposit in the amount of RMB1 billion paid by an independent third party to the Target Company in respect of the Property B Disposal
‘‘Property B Disposal’’ the disposal (sale or pre-sale) of Property B
‘‘Property B Total the costs incurred after the Completion Date in relation to the Cost’’ construction and development of Property B
‘‘Purchasers’’ collectively, the Offshore Purchaser and the Onshore Purchaser
‘‘Put Option’’ has the meaning as defined in the section headed ‘‘INVESTMENT IN A LIMITED PARTNERSHIP — Put Option’’ of the letter from the Board in this circular
‘‘RMB’’ Renminbi, the lawful currency of the PRC
‘‘Sale and Purchase the sale and purchase agreement dated 13 October 2021 entered Agreement’’ into among the Sellers, the Purchasers and the Project Company in relation to the Disposal

– 5 –

DEFINITIONS

‘‘Sale Interests’’

collectively, (i) the entire issued share capital of the Target Company (which in turn holds 99.9% of the equity interests in the Project Company); and (ii) the remaining 0.1% of the equity interests in the Project Company
‘‘Seed Projects’’ collectively, Property A and the Ocean Office Park
‘‘Sellers’’ collectively, the Offshore Seller and the Onshore Seller
‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
‘‘Share(s)’’ ordinary share(s) in the share capital of the Company
‘‘Shareholder(s)’’ shareholder(s) of the Company
‘‘Special Limited Soaring City Limited (騰城有限公司), an exempted company Partner’’ incorporated with limited liability under the laws of the Cayman Islands and a wholly-owned subsidiary of Fortune Joy
‘‘Sponsor Limited New Shine Global Limited (新耀環球有限公司), a company Partner’’ incorporated in the British Virgin Islands with limited liability, being a wholly-owned subsidiary of the Company and a limited partner of the Partnership
‘‘sq.m.’’

square metres

‘‘Stock Exchange’’

The Stock Exchange of Hong Kong Limited

‘‘Subscription Agreement’’
the subscription agreement between the Sponsor Limited Partner and the General Partner in relation to the investment in the Partnership by the Sponsor Limited Partner executed by the Sponsor Limited Partner on 13 October 2021 which shall be dated on the date of closing of the Partnership by the General Partner
‘‘Target Company’’ Super Goal Development Limited (崇高發展有限公司), a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company
‘‘Total Consideration’’ the aggregate of the Offshore Consideration and the Onshore Consideration
‘‘Total GFA’’ the sum of (i) the above-ground GFA of Property A and (ii) the retail portion of the underground GFA of Property A
‘‘US$’’ or ‘‘USD’’ United States dollars, the lawful currency of the United States of America

– 6 –

DEFINITIONS

‘‘%’’

per cent

For identification purposes only

– 7 –

LETTER FROM THE BOARD

==> picture [14 x 23] intentionally omitted <==

==> picture [10 x 20] intentionally omitted <==

==> picture [6 x 9] intentionally omitted <==

==> picture [9 x 16] intentionally omitted <==

==> picture [7 x 15] intentionally omitted <==

==> picture [8 x 18] intentionally omitted <==

==> picture [95 x 32] intentionally omitted <==

Executive Directors:

Mr. LI Ming (Chairman) Mr. WANG Honghui Mr. CUI Hongjie

Registered office: Suite 601, One Pacific Place 88 Queensway Hong Kong

Non-executive Directors:

Ms. HUANG Xiumei Mr. ZHAO Peng Mr. HOU Jun Mr. CHEN Ziyang Mr. ZHAN Zhong

Principal place of business: 31–33 Floor, Tower A Ocean International Center 56 Dongsihuanzhonglu Chaoyang District Beijing PRC

Independent non-executive Directors:

Mr. HAN Xiaojing Mr. SUEN Man Tak Mr. WANG Zhifeng

Mr. JIN Qingjun

Ms. LAM Sin Lai Judy

24 November 2021

To the Shareholders

Dear Sir or Madam,

(1) MAJOR TRANSACTION IN RELATION TO DISPOSAL OF PROPERTY HOLDING COMPANIES,

(2) MAJOR TRANSACTION IN RELATION TO INVESTMENT IN A LIMITED PARTNERSHIP,

(3) RE-ELECTION OF RETIRING DIRECTORS,

AND

(4) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to (i) the announcement of the Company dated 13 October 2021 in relation to, among others, the Sale and Purchase Agreement, the Subscription Agreement and the Partnership Agreement; and (ii) the announcements of the Company dated 24 July

– 8 –

LETTER FROM THE BOARD

2021 and 17 September 2021 respectively in relation to, among others, the appointment of Mr. ZHAO Peng, Mr. CHEN Ziyang and Mr. ZHAN Zhong as the non-executive Directors. The purpose of this circular is to provide you with, among others, (i) further details about the Sale and Purchase Agreement, the Subscription Agreement, the Partnership Agreement and the transactions contemplated thereunder; (ii) the valuation reports of the Seed Projects; (iii) information about the re-election of the retiring Directors; (iv) other information as required under the Listing Rules; and (v) the notice convening the EGM together with the proxy form.

THE DISPOSAL AND THE INVESTMENT

(i) Disposal of property holding companies: the Sellers (both of which are wholly-owned subsidiaries of the Company) as sellers entered into the Sale and Purchase Agreement with the Purchasers (both of which are wholly-owned portfolio companies of the Partnership) as purchasers and the Project Company on 13 October 2021 for the sale and purchase of the Sale Interests, comprising (a) the entire issued share capital of the Target Company (which in turn holds 99.9% of the equity interests in the Project Company); and (b) the remaining 0.1% of equity interests in the Project Company.

The Project Company is the sole owner of the Land on which the Property (comprising Property A and Property B) is being constructed. The nature of the transactions contemplated under the Sale and Purchase Agreement is a ‘‘forward purchase’’ of Property A by the Purchasers.

(ii) Investment in a limited partnership: the Sponsor Limited Partner (a wholly-owned subsidiary of the Company) executed the Subscription Agreement on 13 October 2021, pursuant to which the Sponsor Limited Partner shall contribute capital to the Partnership as a sponsor limited partner, together with other external Limited Partners, all being global sovereign wealth fund or government affiliated institutional investor. The Partnership primarily invests in prime office projects located in downtown locations in Beijing, the PRC, including the Seed Projects (which Property A forms a part of) and other property(ies).

DISPOSAL OF PROPERTY HOLDING COMPANIES

The principal terms of the Sale and Purchase Agreement are set forth below:

Date

13 October 2021

– 9 –

LETTER FROM THE BOARD

Parties

Sellers: The Offshore Seller and the Onshore Seller Purchasers: The Offshore Purchaser and the Onshore Purchaser Project Company: The Project Company

Subject Matter

The nature of the transactions contemplated under the Sale and Purchase Agreement is a ‘‘forward purchase’’ of Property A by the Purchasers, which is to be effected by way of the sale and purchase of the Sale Interests, comprising the following:

(a) the Offshore Seller shall sell to the Offshore Purchaser the entire issued share capital of the Target Company (which in turn holds 99.9% of the equity interests in the Project Company); and
(b) the Onshore Seller shall sell to the Onshore Purchaser 0.1% of the equity interests in the Project Company.

Prior to the entering into of the Sale and Purchase Agreement, the Target Company and the Project Company have been in negotiation and had entered into a cooperation agreement (the ‘‘Cooperation Agreement’’) with a third party (being a member of a well-known international banking and financial services organisation which is independent from the Company and the Purchasers) (the ‘‘Property B Purchaser’’) in connection with the Property B Disposal as an ordinary and usual course of business of the Group as a property developer, and the Property B Deposit has been received. Pursuant to the Cooperation Agreement, the Group and the Property B Purchaser have yet to agree on the final purchase price of Property B, which shall be subject to adjustment pursuant to the actual pre-sale agreement to be entered into in respect of the Property B Disposal. The pre-sale agreement in respect of the Property B Disposal, which shall set out the payment schedule for the purchase price, shall be entered into upon fulfillment of the conditions precedent as set out in the Cooperation Agreement, including, among others, the obtaining of the regulatory approval in respect of the pre-sale of Property B and other customary conditions such as the obtaining of internal approvals by the relevant parties and satisfaction of due diligence.

Pursuant to the Sale and Purchase Agreement, it is agreed that Property B is to be sold by the Project Company pursuant to the Cooperation Agreement and any net proceeds from the Property B Disposal are to be diverted back to the Group.

Consideration

The consideration comprises an offshore tranche (the ‘‘Offshore Consideration’’) and an onshore tranche (the ‘‘Onshore Consideration’’). The Offshore Consideration represents the consideration for Property A, while the Onshore Consideration in effect is to allow net proceeds from the Property B Disposal to be diverted back to the Group.

– 10 –

LETTER FROM THE BOARD

Offshore Consideration

The Offshore Consideration is estimated to be approximately RMB6,298.23 million based on the Agreed Value of Property A of RMB8,850 million (taking into consideration the Estimated Total GFA), deducting (a) the Agreed Construction Costs of RMB2,550 million and (b) the Estimated Net Asset Adjustment of approximately RMB1.77 million.

The final amount of the Offshore Consideration shall be subject to (a) an adjustment on the Agreed Value on a pro-rata basis based on the Final Total GFA as reflected in the real estate title certificate of Property A and (b) another adjustment on the Estimated Net Asset Adjustment on a dollar-for-dollar basis based on the final amount of the Net Asset Adjustment as reflected in the Audited Closing Financial Statements.

The Agreed Value of RMB8,850 million represents the value of Property A as agreed between the Sellers and the Purchasers and was arrived at after arm’s length negotiations between the parties with reference to, among other things, the Estimated Total GFA, the recent property market conditions in the PRC, the prevailing market price of grade-A office buildings located in the CBD area of Beijing, the PRC, the time value of money, the gross development value of Property A of approximately RMB8,710 million based on the preliminary valuation of the Land by an independent valuer and the prospect of Property A. The Agreed Construction Costs were determined with reference to, among other things, the construction specification and the expected construction costs of Property A, the prevailing market price for carrying out a construction of similar scale and complexity and the construction costs of other projects of the Group.

The Offshore Consideration shall be calculated on the basis of RMB and converted to and paid in USD, at the closing mid-point rate published by the People’s Bank of China on the date that is the 3rd Business Day preceding the date of the relevant payment.

Onshore Consideration

The Onshore Consideration, being the Net Property B Sale Proceeds minus (a) the Property B Total Cost and (b) the amount of the Advances outstanding as of the Completion Date, shall be paid by the Project Company on behalf of the Onshore Purchaser to the Onshore Seller.

It is estimated that the Onshore Consideration will be approximately RMB116.32 million with reference to, among other things, the Cooperation Agreement with respect to the Property B Disposal entered into with the independent third party, the estimated total GFA of Property B, the recent property market conditions in the PRC, the prevailing market price of grade-A office buildings located in the CBD area of Beijing, the PRC, the time value of money, the prospect of Property B, the estimated Property B Total Cost, the amount of the Advances outstanding according to the pro forma closing consolidated financial statements of the Target Company and the relevant tax expenses.

Based on the above, it is estimated that the Total Consideration will be approximately RMB6,414.55 million, and it is expected that the final amount of the Total Consideration will not lead to the Disposal being classified as a very substantial disposal of the Company

– 11 –

LETTER FROM THE BOARD

under Chapter 14 of the Listing Rules. The Company will make further announcement and comply with any additional disclosure requirements under the Listing Rules as soon as reasonably practicable if the actual amount of the Total Consideration results in the transactions contemplated under the Sale and Purchase Agreement to be a very substantial disposal of the Company under Chapter 14 of the Listing Rules.

Payment

Offshore Consideration

Taking into account that the nature of the transactions contemplated under the Sale and Purchase Agreement is a ‘‘forward purchase’’ of Property A, the Offshore Consideration shall be payable by the Offshore Purchaser to the Offshore Seller in tranches in the following manners:

(1) as to approximately RMB2,538.23 million (subject to adjustment based on the final amount of the Net Asset Adjustment as reflected in the Audited Closing Financial Statements), to be paid on the Completion Date;
(2) as to approximately RMB3,260 million (subject to adjustment based on the Final Total GFA as reflected in the real estate title certificate of Property A and the final amount of the first payment as referred to in sub-paragraph (1) above), to be paid within 15 Business Days after the day on which the Purchasers have received from the Sellers documents evidencing that the occupancy rate of Property A reaches 75%;
(3) as to RMB200 million, in the event that on the seventh anniversary of the date of the closing of the Partnership, (a) the occupancy rate of Property A reaches 75% and (b) the Effective Net Rental Income reaches RMB527 million (subject to adjustment on a pro-rata basis should the Final Total GFA be different from the Estimated Total GFA, which was determined with reference to the prevailing market rental of grade-A office buildings located in the CBD area of Beijing, the PRC) or above, to be paid within 15 Business Days after fulfilment of the above conditions; and
(4) as to RMB300 million, in the event that by no later than six months prior to the eighth anniversary of the date of the closing of the Partnership, the Effective Net Rental Income reaches RMB620 million (subject to adjustment on a pro-rata basis should the Final Total GFA be different from the Estimated Total GFA, which was determined with reference to the prevailing market rental of grade-A office buildings located in the CBD area of Beijing, the PRC) or above, to be paid within 15 Business Days after fulfilment of the above condition.

The threshold of occupancy rate of 75% as mentioned in sub-paragraphs (2) and (3) above were arrived at after arm’s length negotiation between the Sellers and the Purchasers taking into account, among other things, the incentive to the Group in its capacity as the development manager of the Property, the development plan as well as the operation plan of the Property which have been made reference to the extensive experience and deep

– 12 –

LETTER FROM THE BOARD

expertise of the Group as a leading large-scale property developer, the recent property market conditions in the PRC, the trend and prevailing market price and the occupancy rates of grade-A office buildings located in the CBD area of Beijing, the PRC, the time value of money and the expected return of the Purchasers. Having considered the above factors, it is expected that (i) the occupancy rate of Property A will reach the threshold of 75% around one to two years after commencement of its operation; and (ii) the Effective Net Rental Income will reach RMB527 million and RMB620 million (both subject to adjustment on a pro-rata basis should the Final Total GFA be different from the Estimated Total GFA) on or before the seventh anniversary of the date of the closing of the Partnership and six months prior to the eighth anniversary of the date of the closing of the Partnership, respectively, and the Board is of the view that the timeframe for the payments as mentioned in sub-paragraphs (2), (3) and (4) above are fair and reasonable and in the interest of the Company and the Shareholders as a whole.

Onshore Consideration

When the Project Company receives any instalment of proceeds in connection with the Property B Disposal, the Purchasers shall procure the Project Company to apply such proceeds for the repayment/payment of the Advances then outstanding and the Property B Total Cost.

Upon the handover of Property B to its purchaser, the Onshore Purchaser shall procure the Project Company to pay the amount of the Onshore Consideration then calculated (such amount may be subject to adjustment upon settlement of all construction costs in respect of the Property, as well as repayment of the development loan and settlement of tax in respect of Property B) within five Business Days after its receipt of the notification of such amount. Any further instalment of any Net Property B Sale Proceeds received after the aforementioned payment shall be paid in full by the Project Company to the Onshore Seller within five Business Days.

Conditions Precedent

Completion is subject to the following conditions precedent (unless otherwise waived by the Purchasers or the Sellers (as the case may be) in writing, except for condition (b) below which could not be waived):

(a) the closing of the Partnership;
(b) the Sellers having obtained Shareholders’ approval in respect of the entering into of the Sale and Purchase Agreement and the transactions contemplated thereunder;
(c) all of the representations and warranties made by the Purchasers pursuant to the Subscription Agreement shall be true and correct in all respects and not misleading in any respect as of the date of the Subscription Agreement and as of the Completion Date;

– 13 –

LETTER FROM THE BOARD

(d) each Purchaser has performed all its relevant covenants and obligations in all material respects on and prior to the Completion Date under the Subscription Agreement;
(e) all of the fundamental warranties under the Subscription Agreement shall be true and correct in all respects and not misleading in any respect as of the date of the Subscription Agreement and as of the Completion Date, and the other representations and warranties made by the Sellers pursuant to the Subscription Agreement shall be true and correct in all material respects and not misleading in any material respect as of the date of the Subscription Agreement and as of the Completion Date;
(f) each Seller has performed all its relevant covenants and obligations in all material respects on and prior to the Completion Date under the Subscription Agreement;
(g) the Sellers have delivered the following documents to the Purchasers:
(i) written evidence that the amended and restated articles of association of the Project Company (in form and substance agreed by the Purchasers and the Onshore Seller) has been registered with BAMS;
(ii) written documents evidencing that subject to the replacement of the legal representative of the Project Company, the authorized signatories of all the bank accounts of the Project Company listed in the Subscription Agreement have been replaced with such persons as designated by the Purchasers in writing;
(iii) original resignation letters from all of the existing legal representative, directors, supervisors and other officers of the Project Company to the Project Company in the form as agreed in the Subscription Agreement;
(iv) the replacement of the legal representative, directors, supervisor and officer of the Project Company with such persons as designated by the Purchasers has been registered with BAMS (if needed);
(v) the Project Company has obtained a new business license issued by BAMS confirming that the legal representative of the Project Company has been replaced with such person as nominated by the Purchasers; and
(vi) a copy of the title certificate of the Land;
(h) the Offshore Seller has provided the Offshore Purchaser with the wiring instruction and bank account details for receiving the Offshore Consideration; and

– 14 –

LETTER FROM THE BOARD

(i) finance documents in connection with the external financing to be obtained by the Offshore Purchaser and/or its offshore affiliates, which all or a portion of which shall be used to pay the Offshore Consideration, shall have been entered into, and conditions precedent to drawdown of such external financing shall have been fulfilled.

As at the Latest Practicable Date, none of the above conditions have been fulfilled.

Completion

Completion shall take place on the fifth Business Day after all the conditions precedent to Completion as set out in the Sale and Purchase Agreement have been fulfilled or waived (as the case may be) but in no event shall the Completion Date be later than the earlier of (i) 31 March 2022 or (ii) the last Business Day of one month after the closing of the Partnership (or such other date as agreed in writing by the parties). In addition, the legal ownership of 0.1% of the equity interests in the Project Company shall be transferred from the Onshore Seller to the Onshore Purchaser on the fifth Business Day after the delivery by the Onshore Seller of a written notice to the Onshore Purchaser.

Reciprocal Advances

Prior to the entering into of the Sale and Purchase Agreement, the Onshore Seller (a wholly-owned subsidiary of the Company) has been providing the Advances to the Project Company for the purpose of financing the capital requirements of the Project Company. The Advances is interest-free and repayable on demand. The principal amount of the Advances outstanding amounts to approximately RMB1,038.54 million according to the pro forma closing consolidated financial statements of the Target Company. Such principal amount was determined with reference to, among others, the Property B Deposit received by the Group and the capital requirements of the Project Company.

As mentioned in the section headed ‘‘DISPOSAL OF PROPERTY HOLDING COMPANIES — Payment — Onshore Consideration’’ above, when the Project Company receives any instalment of proceeds in connection with the Property B Disposal, the Purchasers shall procure the Project Company to apply such proceeds for, among other things, the repayment of the Advances then outstanding. Taking into account that (i) the Group shall act as the development manager of the Property following Completion whereby gaining access and monitoring to important financial information of the Target Company and the Project Company; (ii) Property B will be sold pursuant to the Cooperation Agreement entered into with the Property B Purchaser, which is a member of a well-known international banking and financial services organisation; and (iii) as of the Latest Practicable Date, the Property B Deposit has already been received, the Board is of the view that the Company’s interests in the Advance and its repayment have been safeguarded.

Following Completion, the Project Company will cease to be a subsidiary of the Company and will become a joint venture of the Company, while it is expected that the Onshore Seller will not demand repayment in full of the Advances immediately to avoid

– 15 –

LETTER FROM THE BOARD

unnecessary interruption to the operation of the Project Company and for the purposes of funding the construction of Property B. The continuation of the provision of the Advances constitutes a transaction of the Company under Chapter 14 of the Listing Rules.

Miscellaneous

The Group shall act as the development manager of the Property following Completion. It is currently expected that the construction of Property A shall be funded by a development loan to be obtained by the Project Company and any shortfall is to be funded by inter-company loan granted by any of the Purchasers or their affiliates to the Project Company. The construction of Property B, on the other hand, shall be funded by interest-free inter-company loan granted or to be granted by any of the Sellers or their affiliates to the Project Company (which shall include the Advances then outstanding) and/or, at the Sellers’ options and costs, the development loan to be obtained by the Project Company. It is currently estimated that the total amount of loan granted or to be granted by the Sellers or their affiliates to the Project Company for the purposes of financing the construction of Property B will not exceed the amount of the Advances outstanding according to the pro forma closing consolidated financial statements of the Target Company, i.e. approximately RMB1,038.54 million. The Company will further comply with the applicable requirements under the Listing Rules should any further loan is required from the Group.

Further, any compensations, refund or other remedies from relevant authority in connection with the Property (if any) shall belong to the Sellers.

INFORMATION ON THE TARGET COMPANY AND THE PROJECT COMPANY

The Target Company is a company incorporated in Hong Kong and is principally engaged in investment holding, while the Project Company is a company established in the PRC and is principally engaged in investment property development. Each of the Target Company and the Project Company is a subsidiary of the Company prior to completion of the Disposal.

As at the Latest Practicable Date, the Offshore Seller holds the entire issued share capital of the Target Company, which in turn holds 99.9% of the equity interests in the Project Company; and the Onshore Seller holds 0.1% of the equity interests in the Project Company. Upon completion of the Disposal, (i) the entire issued share capital of the Target Company will be held by the Offshore Purchaser, (ii) all of the equity interests in the Project Company will be, directly and indirectly, held by the Purchasers, and (iii) the Target Company and the Project Company will each cease to be a subsidiary of the Company.

– 16 –

LETTER FROM THE BOARD

The following table summarises the unaudited consolidated financial information of the Target Company prepared in accordance with HKFRS for the years ended 31 December 2019 and 2020 respectively:

		For the year ended	For the year ended
		31 December
		2020	2019
		(RMB’000)	(RMB’000)
Profit	before taxation	872	189,017
Profit	after taxation	385	141,373

The unaudited consolidated net asset value of the Target Company as at 30 June 2021 was approximately RMB433.18 million.

The principal asset of the Target Company is the 99.9% of the equity interests in the Project Company. The Project Company is the sole owner of the Land with a land plot area of approximately 11,007.36 sq.m. located at Plot Z6, the Core area of the Central Business District, East Third Ring Road, Chaoyang District, Beijing, the PRC (中國北京市朝陽區東三環商務中心區(CBD)核心區Z6地塊), on which the Property (comprising Property A and Property B), being a grade-A office building, is being constructed.

Upon completion of construction of the Property, Property A will be retained by the Project Company, while Property B is to be sold by the Project Company and any net proceeds from the Property B Disposal are to be diverted back to the Group pursuant to the Sale and Purchase Agreement.

FINANCIAL EFFECT OF THE DISPOSAL AND USE OF PROCEEDS

Upon Completion, the Target Company and the Project Company will cease to be subsidiaries of the Company, and the financial results of the Target Company and the Project Company will no longer be consolidated into the accounts of the Group. It is expected that a net gain of approximately RMB1,330.43 million (subject to audit) will be accrued to the Group as a result of the Disposal over the period of 9 years, which is calculated based on the estimated amount of the Total Consideration of approximately RMB6,414.55 million, less the estimated consolidated net asset value of the Target Company as of the Completion Date and the estimated expenses in connection with the Disposal. Upon Completion, it is expected that the total assets and the total liabilities of the Group will decrease by approximately RMB1,002.3 million and RMB1,333.8 million, respectively (subject to audit).

The aforementioned financial effects are shown for illustrative purpose only and the actual amount of gain or loss as a result of the Disposal to be recorded by the Company will be subject to the review and final audits by the auditors of the Company.

The net proceeds from the Disposal (after deducting direct and indirect expenses) are expected to be approximately RMB6,411.52 million, which will be applied by the Group for general working capital, repayment of indebtedness of the Group and/or the Investment.

– 17 –

LETTER FROM THE BOARD

INVESTMENT IN A LIMITED PARTNERSHIP

Pursuant to the Subscription Agreement executed by the Sponsor Limited Partner on 13 October 2021 which shall be dated on the date of closing of the Partnership by the General Partner, the Sponsor Limited Partner (a wholly-owned subsidiary of the Company) shall agree to, subject to the obtaining of the Shareholders’ approval in respect of the Investment under the Subscription Agreement and the Partnership Agreement, contribute a maximum of US$400 million as a sponsor limited partner to the Partnership and be subject to the terms of the Partnership Agreement dated 13 October 2021.

The principal terms of the Subscription Agreement and the Partnership Agreement are set forth below:

Description of Partnership

The name of the Partnership is ‘‘Sino-Ocean Prime Office Partners I LP’’, which is an exempted limited partnership formed under the laws of the Cayman Islands.

The business and purposes of the Partnership include to generate long-term capital appreciation by identifying, researching, negotiating, making, acquiring, holding, operating, realising and disposing of investments in prime office projects located in downtown locations in Beijing, the PRC.

General Partner

Brilliant Day Limited (卓日有限公司) (a wholly-owned subsidiary of Fortune Joy) shall be the general partner.

The management, operation and control of the Partnership and its business and the formulation of its investment policy shall be vested exclusively in the General Partner, subject to the terms and provisions of the Partnership Agreement.

The General Partner may from time to time engage an investment advisor for the Partnership.

– 18 –

LETTER FROM THE BOARD

Limited Partners

Sponsor Limited New Shine Global Limited (新耀環球有限公司) (a Partner: wholly-owned subsidiary of the Company), whose capital commitment shall be US$400 million, representing approximately 28.57% of the target fund size of the Partnership. The Sponsor Limited Partner shall maintain capital commitments of at least US$400 million throughout the term of the Partnership. The Sponsor Limited Partner will also have other obligations in relation to the Put Option and in the event the Partnership commences winding up in its capacity as a sponsor limited partner under the Partnership Agreement. Please refer to the sections headed ‘‘INVESTMENT IN A LIMITED PARTNERSHIP — Put Option’’ and ‘‘INVESTMENT IN A LIMITED PARTNERSHIP — Other arrangements in relation to Property A’’ below for details.
Special Limited Soaring City Limited (騰城有限公司) (a wholly-owned Partner: subsidiary of Fortune Joy and a fellow subsidiary of the General Partner), whose capital commitment shall be US$1.00 and will be entitled to share the external Limited Partner’s apportioned distribution in accordance with the Partnership Agreement. Please refer to the section headed ‘‘INVESTMENT IN A LIMITED PARTNERSHIP — Distributions’’ below for details.
External Limited Partners:
As at the Latest Practicable Date, three external Limited Partners with a capital commitment of US$400 million, US$400 million and US$200 million, respectively have also executed the subscription agreements.

The external Limited Partners are all global sovereign wealth fund(s) or government affiliated institutional investor(s).

Total Commitment

Pursuant to their respective subscription agreements, the Limited Partners (excluding the Special Limited Partner, whose capital commitment shall be US$1.00), subject to the obtaining of relevant regulatory approvals (including the anti-monopoly clearance), shall commit a total sum of US$1.4 billion, of which the Sponsor Limited Partner and the three other external Limited Partners shall contribute US$400 million, US$400 million, US$400 million and US$200 million, respectively, payable in USD from time to time in separate capital calls as requested by the General Partner for any shortfall of financing to be obtained at fund level. The Sponsor Limited Partner in its capacity as the sponsor limited partner shall maintain capital commitments of at least US$400 million throughout the term of the Partnership. The General Partner shall not accept the capital commitment of the Limited Partners and shall not date the subscription agreements (and thus closing of the Partnership will not occur) until the regulatory approvals (as applicable) of all Limited

– 19 –

LETTER FROM THE BOARD

Partners have been obtained and the target fund size of US$1.4 billion has been met. As at the Latest Practicable Date, the target fund size of US$1.4 billion has already been met, while the condition regarding regulatory approvals is yet to be fulfilled.

The amount of the capital commitment of each of the Limited Partners was arrived at after arm’s length negotiations between the parties with reference to, among other things, the anticipated capital requirements of the Partnership and their respective percentage of interests in the Partnership.

It is intended that the capital contribution requested by the General Partner to be payable by the Group to the Partnership will be funded by the internal resources of the Group.

The Group’s investment in the Partnership will be accounted for as a joint venture in the Group’s financial statements.

Term

Unless earlier terminated, the term of the Partnership shall be eight years from the date of the closing of the Partnership, which is currently expected to take place on or prior to 31 December 2021. The General Partner may extend the term of the Partnership for up to two additional one-year extensions subject to the approval of the Investment Committee.

Investment Strategy and Criteria

The Partnership will primarily focus on investment in the Seed Projects and other project(s) that meet, amongst others, the following principal investment criteria:

. such project is located in prime locations in downtown Beijing, the PRC;
. at least 50% of the equity interests will be held by the Partnership; and
. building specifications meet grade-A standard and are primarily for office use.

The Partnership shall have an annual business plan which shall be prepared by the General Partner (or the investment advisor engaged by the General Partner for the Partnership, if applicable). Such plan shall include details of general investment and operating strategies for the upcoming year and detailed budgets (including the forecast capital and administrative expenses, annual operating budget and forecast revenue) for each project owned by the Partnership. In particular, the annual business plan shall comprise the following:

(i) an executive summary of the business plan;
(ii) an overview of the operation of the Partnership including the expenses breakdown and subscription line status;
(iii) a market overview of the economy of the PRC and the property market trends;

– 20 –

LETTER FROM THE BOARD

(iv) an overview of the operating projects including (among others) their operating performance, financial status and budget and leasing status, plan and strategies;
(v) a status update for projects under constructions with their planning and current progress;
(vi) an overview of the pipeline projects for the Partnership;
(vii) matters to be approved by the Investment Committee; and
(viii) an environmental, social and corporate governance (ESG) overview.

Investment Committee

Prospective projects are required to be presented to the Investment Committee, which will comprise one representative from each Limited Partner with a fund commitment of at least US$200 million, for approval for investment. A representative from the Sponsor Limited Partner shall serve as the chairman of the Investment Committee.

The General Partner shall obtain the consent or approval of the Investment Committee prior to doing any act for which such consent or approval is required pursuant to the Partnership Agreement. Decisions by the Investment Committee shall be made by proportional voting with each member of the Investment Committee being entitled to cast a number of votes equal to its designating interest in the Partnership and the feeder vehicle(s).

Seed Projects

As of the Latest Practicable Date, the Partnership had entered into agreements for the acquisition of two Seed Projects, namely (a) Property A and (b) the Ocean Office Park, by way of acquisition of their respective holding companies, namely, the Target Company, the Project Company and the OOP Holding Company.

Distributions

The distributable cash income of the operation (not disposition) of the Partnership shall be made at least on a quarterly basis as determined by the General Partner in its sole discretion.

The cash distribution of the Partnership attributable to any of its investment shall be initially apportioned among the Limited Partners in proportion to their respective sharing percentages with respect to the investment. While the Sponsor Limited Partner shall be distributed its apportioned amount, the amount apportioned to each other external Limited Partners shall be distributed in the order of the following priority:

(i) first, 100% of the equal to the sum of the external Limited Partners’ cumulative capital contributions at such time;

– 21 –

LETTER FROM THE BOARD

(ii) second, if there is any remaining balance, 100% to the external Limited Partners until the cumulative amount distribution to such external Limited Partner (taking into account all prior distributions made to it) would provide such external Limited Partner with a pre-determined IRR of 10%; and
(iii) third, if there is any further remaining balance, be distributed among the external Limited Partners in accordance with the split arrangements between the external Limited Partners and the Special Limited Partner under the Partnership Agreement.

Pursuant to the distribution waterfall as structured under the Partnership Agreement, the Special Limited Partner would share a 20% to 30% of the remaining balance under (iii) above depending on the IRR achieved and/or the amount of distribution the external Limited Partners received and a portion of catch-up amount as agreed under the Partnership Agreement.

The General Partner shall use its commercially reasonable efforts to distribute no less than 90% of the audited consolidated net profit on an annual basis.

Fees

The Partnership shall bear and be charged with all reasonable third party costs and expenses pertaining to the organization, formation and startup of the Partnership, including those incurred prior to the closing of the Partnership up to a cap amount as specified in the Partnership Agreement, which was determined based on the amount incurred and expected to be incurred in relation to the setting up of the Partnership.

To the extent that the Group provide asset management services to the projects owned by the Partnership, the Group shall be entitled to receive an asset management fee at a pre-determined market rate according to the Partnership Agreement with reference to the net property operating income of such project.

The General Partner (or the investment advisor engaged by the General Partner for the Partnership, if applicable) shall be entitled to receive an annual investment advisory fee, which shall be payable quarterly and is calculated at pre-determined market rates with reference to the capital contribution of the Limited Partners for the Partnership’s investments, provided that with respect to Property A, prior to the occupancy rate of Property A reaches 75%, the advisory fee shall be calculated with reference to (a) the actual consideration paid in accordance with the Sale and Purchase Agreement and (b) the cumulative construction loans and/or any inter-company loan and/or capital contribution granted by any Purchaser or their affiliates to the Project Company.

The General Partner shall also be entitled to other fee (such as acquisition fee with respect to projects that are neither Seed Projects nor projects owned or controlled by the Company/leasing fee) at a pre-determined market rate according to the Partnership Agreement.

– 22 –

LETTER FROM THE BOARD

The aforementioned pre-determined market rates were determined based on the rates charged by similar core office funds in the region and other market comparables based on the Group’s sources and market intel, amongst which asset management fee typically ranges from 1% to 4.5% of the net property operating income of such project, management fee or investment advisory fee typically ranges from 0.3% to 1.5%, acquisition fee typically ranges from 0.5% to 1.75% of the value of the property acquired, and leasing fee typically ranges from 0.5 to 3 months of average rental. Taking into account that the fees to be charged under the Partnership Agreement are within the above range of fees, the Board is of the view that such fees are fair and reasonable and in the interest of the Company and the Shareholders as a whole.

Transfer of Partnership Interest

The Limited Partners may not transfer their respective partnership interest to any other Limited Partners or other qualified persons unless the requirements as specified in the Partnership Agreement (including those relating to right of first offer enjoyed by the other Limited Partners) are satisfied. The General Partner may not transfer its interest or withdraw from the Partnership, provided that it may transfer its interest to the Company and its affiliates.

Put Option

Each of the external Limited Partners shall have a put option (the ‘‘Put Option’’) to request that the Sponsor Limited Partner acquire all of its interests in the Partnership attributable to the Seed Projects if the construction of the Property (including Property A) is not completed on or prior to the sixth anniversary of the date of the closing of the Partnership, except that such failure to complete is caused by reasons including, but not limited to, the Project Company’s breach of the management agreement and force majeure. If there is a delay in the issuance of any approval or permit required for the construction of the Property due to, among others, the relevant governmental authority’s act, and the construction period of the Property is delayed for more than one year, the foregoing six-year period shall be extended for (a) the number of days that is necessary for the General Partner or its affiliates to spend to accommodate or otherwise cope with the relevant governmental authority’s act, omission, negligence, change of practice or policy, or fortuitous public event which causes a standstill of the relevant governmental authority and leads to delay in the issuance of any approval or permit in order to complete the construction of the Property minus (b) 365 days.

The purchase price of the Put Option shall be made in cash equal to an amount, when aggregated with all prior distributions made to the external Limited Partner, providing the external Limited Partner with an overall IRR of 11% on its capital contributions attributable to the Seed Projects.

Other arrangements in relation to Property A

In the event that the Partnership commences its winding-up upon expiration of its term and the occupancy rate of Property A has never reached 75%, the Partnership shall be dissolved and distribution shall be made as soon as reasonably practicable, whereby each of

– 23 –

LETTER FROM THE BOARD

the external Limited Partners shall receive an amount, when aggregate with all prior distributions made to the external Limited Partner, providing the external Limited Partner with an overall IRR of 11% on its capital contributions attributable to the Seed Projects, and the remaining liquidation proceeds shall be distributed to the Sponsor Limited Partner. In the event that the liquidation proceeds are not sufficient to provide the external Limited Partners with the 11% IRR, the Sponsor Limited Partner shall pay the shortfall. Taking into account the prime locations, the specifications, as well as the gross development value or market value of the Seed Projects, and the anticipated actual capital contribution of the external Limited Partners attributable to the Seed Projects, it is expected that the payment of such shortfall, when aggregate with the capital commitment of the Sponsor Limited Partner under the Subscription Agreement, will not lead to the Investment being classified as a very substantial acquisition of the Company under Chapter 14 of the Listing Rules. The Company will make further announcement and comply with any additional disclosure requirements under the Listing Rules as soon as reasonably practicable if the actual amount of such shortfall, when aggregate with the capital commitment of the Sponsor Limited Partner under the Subscription Agreement, results in the Investment to be a very substantial acquisition of the Company under Chapter 14 of the Listing Rules.

The IRR of 11% in both the Put Option and the other arrangement in relation to Property A is determined after arm’s length negotiation between the Group and the external Limited Partners with reference to the internal rate of return of other core funds in the market and the estimated internal rate of return attributable to the Seed Projects taking into account the internal rate of return of grade-A office buildings located in the CBD area of Beijing, the PRC, the future growth of the Beijing property market, as well as the prospect of the business of the Seed Projects and the synergies that may be created under the Partnership, which the Directors are of the view that such IRR is fair and reasonable and in the interest of the Company and the Shareholders as a whole.

INFORMATION ON THE SEED PROJECTS

Property A

Please refer to the section headed ‘‘INFORMATION ON THE TARGET COMPANY AND THE PROJECT COMPANY’’ above for further details.

Ocean Office Park

The Ocean Office Park refers to the grade-A office complex known as Ocean Office Park (遠洋光華國際) located on a land parcel at No. 10–12, Jin Tong West Road, Chaoyang District, Beijing, the PRC (中國北京市朝陽區金桐西路10–12號) and No. 5, Jing Hua South Street, Chaoyang District, Beijing, the PRC (中國北京市朝陽區景華南街5號), which is indirectly wholly-owned by the OOP Holding Company.

The OOP Holding Company is a company incorporated in the British Virgin Islands with limited liability whose principal activity is investment holding. The principal asset of the OOP Holding Company is the Ocean Office Park, which was completed in 2009 and is a grade-A office building located in the Core area of the Central Business District, Chaoyang District, Beijing, the PRC with a GFA of approximately 108,000 sq.m.

– 24 –

LETTER FROM THE BOARD

The following table summarises the unaudited consolidated financial information of the OOP Holding Company and its subsidiaries prepared in accordance with HKFRS for the years ended 31 December 2019 and 2020, respectively:

	For the year ended	For the year ended
	31 December
	2020	2019
	(RMB’000)	(RMB’000)
Profit before taxation	113,762	18,053
Profit/(loss) after taxation	67,467	(41,884)

The unaudited consolidated net asset value of the OOP Holding Company and its subsidiaries as at 30 June 2021 was approximately RMB1,518.42 million.

FINANCIAL EFFECT OF THE FORMATION OF THE PARTNERSHIP ON THE GROUP

After establishment of the Partnership, the Partnership will be accounted for as an investment in joint ventures in the consolidated statement of assets and liabilities of the Group in accordance with the Group’s accounting policies and HKFRS. Assuming that the transaction contemplated under the Partnership Agreement has been fully in effect, the immediate financial effect on the Group would be (1) an increase in the investment in interests in joint ventures by approximately RMB620,000,000; (2) an expected decrease in net cash of the Group by approximately RMB620,000,000; and (3) no significant impact on the earnings of the Group. The Put Option would have no significant financial impact on the Group.

INFORMATION ON THE PARTIES INVOLVED

The Group is a leading large-scale property developer with developments in key economic regions in the PRC, including the Beijing Region, the Bohai Rim Region, the Eastern Region, the Southern Region, the Central Region and the Western Region. Its core businesses include development of residential property, investment property development and operation, property services and whole-industrial chain construction services, along with synergic businesses in real estate financing, senior living service, logistics real estate and internet data center, etc.

The Offshore Seller is a company incorporated in Hong Kong with limited liability. The Onshore Seller is a company established in the PRC with limited liability. Each of the Offshore Seller and the Onshore Seller is a wholly-owned subsidiary of the Company. The principal business of each of the Offshore Seller and the Onshore Seller is investment holding.

– 25 –

LETTER FROM THE BOARD

The Offshore Purchaser is a company incorporated in the British Virgin Islands with limited liability. The Onshore Purchaser is a company established in the PRC with limited liability. Each of the Offshore Purchaser and the Onshore Purchaser is a wholly-owned subsidiary of the Partnership. The principal business of each of the Offshore Purchaser and the Onshore Purchaser is investment holding.

The Sponsor Limited Partner is a company incorporated in the British Virgin Islands with limited liability. Its principal business is investment holding. As at the Latest Practicable Date, it is wholly-owned by the Company.

The General Partner is an exempted company incorporated in the Cayman Islands with limited liability. Its principal business is to act as the general partner of the Partnership. As at the Latest Practicable Date, it is wholly-owned by Fortune Joy.

The Special Limited Partner is an exempted company incorporated in the Cayman Islands with limited liability. Its principal business is investment holding. As at the Latest Practicable Date, it is wholly-owned by Fortune Joy.

Fortune Joy is a company incorporated in the British Virgin Islands with limited liability whose principal activity is investment holding. Fortune Joy together with its subsidiaries are leading professional firms focusing on alternative asset management, whose business lines include real estate investment, private equity investment, structured investment, and strategic and innovative investment. As at the Latest Practicable Date, Fortune Joy is directly or indirectly owned as to 49% by the Company, 25.5% by Huamao Focus Limited and 25.5% by Leading Bright Investment Limited. Huamao Focus Limited is 87% owned by Huamao Property Holdings Ltd, which is in turn (i) 40.48% owned by Siberite Limited, a company ultimately owned as to 50% by Chia Seok Eng and 50% by Lin Minghan; (ii) 41.84% owned by RCA02, interests in the ordinary shares of which are all ultimately owned by the equity partners of international law firm Maples and Calder; and (iii) 17.68% owned by Risun Holdings Limited, a company owned as to 80% by Fang Chao and 20% by Liu Jun. Leading Bright Investment Limited is wholly-owned by Bright Success Limited Partnership, the general partner of which is ultimately beneficially owned by Ko Kwong Woon Ivan.

The other external Limited Partners are all reputable global sovereign wealth fund(s) or government affiliated institutional investor(s) with a longstanding track records of investment in various sectors including real estate globally to achieve long term capital appreciation and preservation. They have invested with various premium global private equity fund houses across multiple assets classes with sophisticated investment strategies.

Save as disclosed in this circular, to the best knowledge, information and belief of the Directors having made all reasonable enquiries, the General Partner, the Special Limited Partner, the other external Limited Partners, the Purchasers and each of their respective ultimate beneficial owners are third parties independent of the Company and its connected persons.

– 26 –

LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE DISPOSAL, THE INVESTMENT AND THE CONTINUATION OF PROVISION OF THE ADVANCES

The Group has been implementing an asset-light strategy. The Disposal acts as a step to further reinforcing such strategy and at the same time recognising an estimated gain through the Disposal as mentioned in the section headed ‘‘FINANCIAL EFFECT OF THE DISPOSAL AND USE OF PROCEEDS’’, thereby increasing the return for the Shareholders. The positive cash flow generated from the Disposal will also lower the leverage ratio and refine the financial indicators of the Group.

The Investment, on the other hand, allows the Group to retain an indirect stake in the Project Company for its potential opportunities in future. The introduction of the external Limited Partners, all being global sovereign wealth fund or government affiliated institutional investor, will be able to provide financial resources, valuable investment recommendation and advice which, combining and leveraging on the Group’s expertise in the project development and construction, operation and management, could maximise the value of Property A. The Company believes that such a partnership would create synergetic effect between the partners, thereby further enhancing the Group’s profile, sending a positive message to its stakeholders and representing the Group’s immense effort to succeed in the industry.

Meanwhile, prior to the entering into of the Sale and Purchase Agreement, the Onshore Seller (a wholly-owned subsidiary of the Company), has been providing the Advances to the Project Company for the purpose of financing its capital requirements. The continuation of such provision of the Advances will provide financial support for the construction of Property B and avoid unnecessary interruption to the operation of the Project Company which will in turn be beneficial to the Group.

Taking into account the aforesaid, the Directors are of the view that the terms of the Sale and Purchase Agreement, the Subscription Agreement, the Partnership Agreement and the transactions contemplated thereunder (including the Disposal, the Investment and the continuation of provision of the Advances) are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Each of Mr. LI Ming and Mr. WANG Honghui, being an executive Director, also acts a director of Fortune Joy as nominated by the Company. Taking into account that none of Mr. LI Ming and Mr. WANG Honghui and their respective close associates has any beneficial interests in the shares of Fortune Joy and that the presence of Mr. LI Ming and Mr. WANG Honghui on the board of directors of Fortune Joy, which comprises of a total of seven directors, is not predominating, the Board is of the view that none of the Directors has a material interest in the Sale and Purchase Agreement, the Subscription Agreement, the Partnership Agreement and the transactions contemplated thereunder and hence no Director has abstained from voting on the relevant Board resolutions.

– 27 –

LETTER FROM THE BOARD

IMPLICATIONS UNDER THE LISTING RULES

As one or more of the applicable percentage ratios in respect of the Disposal under the Sale and Purchase Agreement are more than 25% but all are less than 75%, the entering into of the Sale and Purchase Agreement and the Disposal contemplated thereunder constitutes a major transaction of the Company and is subject to the reporting, announcement, circular and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

Following Completion, each of the Target Company and the Project Company will cease to be a subsidiary of the Company and will become a joint venture of the Company, and the continuation of the provision of the Advances constitutes a transaction of the Company under Chapter 14 of the Listing Rules. As one or more of the applicable percentage ratios in respect of the Advances are more than 5% but all are less than 25%, the continuation of the provision of the Advances constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is subject to the reporting and announcement requirements under the Listing Rules.

Furthermore, as one or more of the applicable percentage ratios in respect of the Investment under the Subscription Agreement and the Partnership Agreement exceed 25% but are all less than 75%, the Investment under the Subscription Agreement and the Partnership Agreement constitutes a major transaction of the Company. Also, pursuant to Rule 14.76(1) of the Listing Rules, the grant (and presumed exercise) of the Put Option pursuant to the Partnership Agreement constitutes a possible major transaction of the Company as the discretion to exercise the Put Option vests on the external Limited Partner(s). Accordingly, the entering into of, and the Investment under, the Subscription Agreement and the Partnership Agreement are also subject to the reporting, announcement, circular and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

Pursuant to Rules 14.58(2), 14.60 and 14.66(4) of the Listing Rules, the identities of the external Limited Partners are required to be disclosed in this circular. As (i) each of the external Limited Partners has confirmed to the Group that they will not consent to the disclosure of their identities in the announcement of the Company and this circular, the Company encounters practical difficulty for the strict compliance of the aforesaid disclosure requirement; (ii) considering the background of the external Limited Partners and the relevant confidential, sensitivity and security reasons; and (iii) the Company has made alternative disclosures to provide additional and meaningful background of the external Limited Partners in this circular, the Company is of the view that the non-disclosure of the actual identities of the external Limited Partners would not be unduly prejudicial to the interests of the Shareholders in terms of their opportunity to obtain sufficient information to reach an informed decision on the voting in relation to approving, among others, the Subscription Agreement, the Partnership Agreement (including the Put Option) and the transactions contemplated thereunder. The Company has applied to the Stock Exchange for, and the Stock Exchange has granted, a waiver from strict compliance with Rules 14.58(2), 14.60 and 14.66(4) of the Listing Rules in this regard.

– 28 –

LETTER FROM THE BOARD

RE-ELECTION OF RETIRING DIRECTORS

As at the Latest Practicable Date, Mr. LI Ming, Mr. WANG Honghui and Mr. CUI Hongjie were the executive Directors; Ms. HUANG Xiumei, Mr. ZHAO Peng, Mr. HOU Jun, Mr. CHEN Ziyang and Mr. ZHAN Zhong were the non-executive Directors; and Mr. HAN Xiaojing, Mr. SUEN Man Tak, Mr. WANG Zhifeng, Mr. JIN Qingjun and Ms. LAM Sin Lai Judy were the independent non-executive Directors.

In accordance with Article 107 of the Articles of Association, each of Mr. ZHAO Peng, Mr. CHEN Ziyang and Mr. ZHAN Zhong, being appointed by the Board to fill a casual vacancy or as an addition to the Board, will retire at the EGM and, being eligible, will offer themselves for re-election as non-executive Directors at the EGM. Separate resolutions will be proposed for their re-elections at the EGM.

Details of the Directors proposed to be re-elected at the EGM that are required to be disclosed under the Listing Rules are set out in Appendix IV to this circular.

EGM AND VOTING AT THE EGM

The EGM will be convened and held for the Shareholders to consider and, if thought fit, approve the relevant resolutions in relation to the Sale and Purchase Agreement, the Subscription Agreement, the Partnership Agreement, the transactions contemplated thereunder and the re-election of retiring Directors.

A notice convening the EGM to be held on Friday, 10 December 2021 at 9: 30 a.m. at Meeting Room, 31st Floor, Tower A, Ocean International Center, 56 Dongsihuanzhonglu, Chaoyang District, Beijing, PRC is set out on pages EGM-1 to EGM-3 of this circular for the purpose of approving the Sale and Purchase Agreement, the Subscription Agreement, the Partnership Agreement, the transactions contemplated thereunder and the re-election of retiring Directors.

Pursuant to Rule 13.39(4) of the Listing Rules, all votes of the Shareholders at general meetings must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. In the case of an equality of votes on a poll, the chairman shall, subject to the Articles of Association, be entitled to casting vote in addition to any other vote he may have.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, no Shareholder has a material interest in the Sale and Purchase Agreement, the Subscription Agreement, the Partnership Agreement, the transactions contemplated thereunder and the re-election of retiring Directors and therefore no Shareholder is required to abstain from voting at the EGM for the proposed resolutions.

A form of proxy for use at the EGM is enclosed. Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s share registrar, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183

– 29 –

LETTER FROM THE BOARD

Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM (i.e., not later than 9: 30 a.m. on Wednesday, 8 December 2021 (Hong Kong Time)), or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

BOOK CLOSURE FOR EGM ATTENDANCE

In order to ascertain the right to attend and vote at the EGM, the register of members of the Company will be closed from Tuesday, 7 December 2021 to Friday, 10 December 2021 (both days inclusive) during which period no transfer of Shares will be registered. Shareholders are reminded that in order to be entitled to attend and vote at the EGM, all properly completed transfer forms accompanied by the relevant share certificates must be lodged with the Company’s share registrar, Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 4: 30 p.m. on Monday, 6 December 2021.

RECOMMENDATION

The Board considers that (i) the terms of the Sale and Purchase Agreement, the Subscription Agreement and the Partnership Agreement and the respective transactions contemplated thereunder are fair and reasonable; (ii) the entering into of the Sale and Purchase Agreement, the Subscription Agreement, the Partnership Agreement and the transactions contemplated thereunder; and (iii) the re-election of the retiring Directors are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors would recommend the Shareholders vote in favour of all the relevant resolutions to be proposed at the EGM as set out in the notice of the EGM.

ADDITIONAL INFORMATION

Your attention is also drawn to the other sections and appendices to this circular, which contain further information about the Group, the Seed Projects, the biography of the Directors to be re-elected and other information that need to be disclosed in accordance with the Listing Rules.

Yours faithfully, By order of the Board Sino-Ocean Group Holding Limited LI Ming Chairman

– 30 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

1. FINANCIAL INFORMATION OF THE GROUP

Financial information of the Group for the three years ended 31 December 2018, 2019 and 2020 and six months ended 30 June 2021 are disclosed on pages 114 to 272 of the annual report of the Company for the year ended 31 December 2018, pages 127 to 280 of the annual report of the Company for the year ended 31 December 2019, pages 128 to 270 of the annual report of the Company for the year ended 31 December 2020 and pages 60 to 101 of the interim report of the Company for the six months ended 30 June 2021, respectively, all of which are published on the website of the Stock Exchange at https://www.hkexnews.hk/, and the website of the Company at https://www.sinooceangroup.com/. Quick links to such financial information are set out below:

Annual report of the Company for the year ended 31 December 2018:

https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0410/ltn201904101035.pdf

Annual report of the Company for the year ended 31 December 2019:

https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0416/2020041600559.pdf

Annual report of the Company for the year ended 31 December 2020:

https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0408/2021040801034.pdf

Interim report of the Company for the six months ended 30 June 2021:

https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0909/2021090900319.pdf

2. INDEBTEDNESS

As at the close of business on 30 September 2021, being the latest practicable date for the purpose of ascertaining the indebtedness of the Group prior to the printing of the Circular, the Group had aggregate outstanding borrowings of approximately RMB93,733,670,000 comprising:

(a) outstanding bank borrowings of approximately RMB30,853,428,000, among which bank borrowings of RMB5,617,101,000 were secured by investment properties, properties under development, completed properties held for sale and equity interest in certain subsidiaries of the Group and bank borrowings of RMB25,236,327,000 were unsecured;
(b) other borrowings of approximately RMB8,342,135,000, among which other borrowings of RMB4,892,000,000 were secured by properties under development and equity interests in a certain subsidiary of the Group, and other borrowings of RMB3,450,135,000 were unsecured;
(c) corporate bonds of approximately RMB54,538,107,000;

– I-1 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

As at 30 September 2021, the Group provided guarantees amounted to approximately RMB1,862,350,000 for borrowings of its joint ventures.

As at 30 September 2021, the Group provided guarantees amounted to RMB10,041,610,000 to secure repayments obligations of mortgage loan for certain customers.

As at 30 September 2021, lease liabilities of the Group were amounted to RMB442,144,000 among which RMB78,420,000 were current and RMB363,724,000 were non-current.

Save as aforesaid or as otherwise disclosed herein, and apart from intra-group liabilities, at the close of business on 30 September 2021 the Group did not have any loan capital issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptable credits, debentures, mortgages, charges, hire purchase commitments, guarantees or other material contingent liabilities.

3. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2020, being the date to which the latest published audited consolidated financial statements of the Company were made up.

4. WORKING CAPITAL

The Directors, after due and careful considerations, are of the opinion that, after taking into account the financial resources presently available to the Group including the internally generated funds, the currently available banking and credit facilities and the effects of the Disposal and the Investment, the Group has sufficient working capital for its present requirements for at least the next twelve months from the date of this circular.

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

As at the Latest Practicable Date, the Group was principally engaged in property development and property investment in the PRC. Other operations as carried out by the Group mainly include property management services, property sales agency services, as well as upfitting services.

As disclosed in the published interim report of the Company for the six months ended 30 June 2021, the Board noticed that competition in the property development industry will continue to be fierce in the medium to long-term. Established enterprises will stay in a good position as less competent players are weeded out. Mergers and acquisitions and strategic partnerships will become even more common. At the same time, profitability will continue to decline as the industry becomes more ‘manufacture-like’ and ‘service-like’. Enterprises will persist on quality growth, enhance performance through streamlined management, upgrade core capabilities in the principal business and actively explore a second growth chart to support sustainable expansion.

– I-2 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Upon Completion, the Group will continue to be principally engaged in property development and property investment in the PRC. The Directors believe that the Disposal and the Investment can introduce the external Limited Partners to provide financial resources, valuable investment recommendation and advice which, combining and leveraging on the Group’s expertise in the project development and construction, operation and management, could maximise the value of the Project Company as well as the Group. The Company believes that such a partnership would create synergetic effect between the partners, thereby further enhancing the Group’s profile, sending a positive message to the stakeholders and representing the Group’s immense effort to succeed in the industry.

6. RECONCILIATION STATEMENT OF THE VALUE OF THE LAND

To comply with the Listing Rules, the Company has engaged Graval Consulting Limited, an independent professional valuer, to value, amongst others, the Land.

Details of the valuation reports are set out in Appendix III to this circular. Disclosure of the reconciliation of the net book value of the Land (comprising Property A under ‘‘Investment Properties’’ and Property B under ‘‘Properties under development’’) and the valuation as required under Rule 5.07 of the Listing Rules is set out below:

Net book value of the Land as at 30 June 2021 Valuation Surplus Net changes (i.e. land development costs) during the period from 1 July 2021 to 31 August 2021 Market value of the Land as at 31 August 2021	RMB’000 6,417,000 31,000 12,000
	6,460,000

– I-3 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

I. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

The following is an illustrative and unaudited pro forma consolidated balance sheet of the Group (the ‘‘Unaudited Pro Forma Financial Information’’), which has been prepared on the basis of the notes set out below for the purpose of illustrating the effect of (i) the disposal of 100% of the issued shares in Super Goal Development Limited (the ‘‘Target Company’’) which holds 99.9% of the equity interests in Beijing Skyriver CBD Property Co., Ltd. (the ‘‘Project Company’’) and 0.1% of the equity interest in the Project Company (collectively referred to as the ‘‘Disposal Group’’) by the Group to Sino-Ocean Prime Office Partners I LP (the ‘‘Partnership’’) (the ‘‘Disposal’’) and (ii) capital contribution to the Partnership as a sponsor limited partner for the amount of approximately 28.57% of the target fund size of the Partnership and the grant of Put Option to the external Limited Partners of the Partnership (hereinafter collectively referred to as the ‘‘Transactions’’), as if the Transactions had been taken place on 30 June 2021.

The Unaudited Pro Forma Financial Information has been prepared by the Directors based on the unaudited consolidated balance sheet of the Group as at 30 June 2021 as set out in the published interim report of the Company for the six months ended 30 June 2021, the unaudited statement of assets and liabilities of the Disposal Group as at 30 June 2021, and the unaudited pro forma adjustments prepared to reflect the effects of the Transactions as described in the accompanying notes.

This Unaudited Pro Forma Financial Information has been prepared for illustrative purposes only and because of its hypothetical nature, it may not give a true picture of the balance sheet of the Group had the Transactions been completed as of specific date or at any future dates.

The Unaudited Pro Forma Financial Information of the Group should be read in conjunction with other financial information included elsewhere in this circular.

The Unaudited Pro Forma Financial Information has been prepared using the accounting policies consistent with those of the Group as set out in the published annual report of the Group for the year ended 31 December 2020 and in the published interim report of the Group for the six months ended 30 June 2021.

– II-1 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Unaudited Pro Forma Financial Information of the Group

Unaudited consolidated balance sheet of the Group as at 30 June 2021 (Note 1) RMB’000 3,625,068 443,151 169,077 227,686 340,895 11,583,441 24,008,331 5,968,890 6,251,666 5,035,565 13,761,818 1,697,867	Unaudited statement of assets and liabilities of the Disposal Group as at 30 June 2021 Pro forma (Note 2) (Note 3) RMB’000 RMB’000 (53) — — — — — — — — — (5,100,000) — — 620,000 — — — — — — — — — — (5,100,053) 620,000 (1,311,311) — — — — — — — — — (1,008,201) — — — (2) — (844) (620,000) (2,320,358) (620,000) (7,420,411) —	Unaudited statement of assets and liabilities of the Disposal Group as at 30 June 2021 Pro forma (Note 2) (Note 3) RMB’000 RMB’000 (53) — — — — — — — — — (5,100,000) — — 620,000 — — — — — — — — — — (5,100,053) 620,000 (1,311,311) — — — — — — — — — (1,008,201) — — — (2) — (844) (620,000) (2,320,358) (620,000) (7,420,411) —	adjustments Unaudited pro forma consolidated balance sheet of the Group as at 30 June 2021 (Note 4) RMB’000 RMB’000 — 3,625,015 — 443,151 — 169,077 — 227,686 — 340,895 — 6,483,441 (166,567) 24,461,764 — 5,968,890 — 6,251,666 346,649 5,382,214 2,586,295 16,348,113 110,994 1,808,861 2,877,371 71,510,773 — 71,019,623 — 311,788 — 1,312,553 — 19,369,197 — 10,150 1,002,482 61,022,464 — 890,938 — 5,418,684 2,538,233 34,730,929 3,540,715 194,086,326 6,418,086 265,597,099	adjustments Unaudited pro forma consolidated balance sheet of the Group as at 30 June 2021 (Note 4) RMB’000 RMB’000 — 3,625,015 — 443,151 — 169,077 — 227,686 — 340,895 — 6,483,441 (166,567) 24,461,764 — 5,968,890 — 6,251,666 346,649 5,382,214 2,586,295 16,348,113 110,994 1,808,861 2,877,371 71,510,773 — 71,019,623 — 311,788 — 1,312,553 — 19,369,197 — 10,150 1,002,482 61,022,464 — 890,938 — 5,418,684 2,538,233 34,730,929 3,540,715 194,086,326 6,418,086 265,597,099	Pro forma adjustments assuming the Put Option were exercised immediately at the grant date Unaudited pro forma consolidated balance sheet of the Group assuming the Put Option were exercised immediately at the grant date (Note 5) RMB’000 RMB’000 53 3,625,068 — 443,151 — 169,077 — 227,686 — 340,895 5,100,000 11,583,441 (453,433) 24,008,331 — 5,968,890 — 6,251,666 (346,649) 5,035,565 (2,586,295) 13,761,818 (16,657) 1,792,204 1,697,019 73,207,792 1,311,311 72,330,934 — 311,788 — 1,312,553 — 19,369,197 — 10,150 5,719 61,028,183 — 890,938 2 5,418,686 (1,917,389) 32,813,540 (600,357) 193,485,969 1,096,662 266,693,761	Pro forma adjustments assuming the Put Option were exercised immediately at the grant date Unaudited pro forma consolidated balance sheet of the Group assuming the Put Option were exercised immediately at the grant date (Note 5) RMB’000 RMB’000 53 3,625,068 — 443,151 — 169,077 — 227,686 — 340,895 5,100,000 11,583,441 (453,433) 24,008,331 — 5,968,890 — 6,251,666 (346,649) 5,035,565 (2,586,295) 13,761,818 (16,657) 1,792,204 1,697,019 73,207,792 1,311,311 72,330,934 — 311,788 — 1,312,553 — 19,369,197 — 10,150 5,719 61,028,183 — 890,938 2 5,418,686 (1,917,389) 32,813,540 (600,357) 193,485,969 1,096,662 266,693,761
73,113,455	(5,100,053)	620,000	2,877,371	71,510,773	1,697,019	73,207,792
72,330,934 311,788 1,312,553 19,369,197 10,150 61,028,183 890,938 5,418,686 32,813,540			— — — — — 1,002,482 — — 2,538,233	71,019,623 311,788 1,312,553 19,369,197 10,150 61,022,464 890,938 5,418,684 34,730,929	1,311,311 — — — — 5,719 — 2 (1,917,389)	72,330,934 311,788 1,312,553 19,369,197 10,150 61,028,183 890,938 5,418,686 32,813,540
193,485,969	(2,320,358)	(620,000)	3,540,715	194,086,326	(600,357)	193,485,969
266,599,424	(7,420,411)	—	6,418,086	265,597,099	1,096,662	266,693,761

– II-2 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Unaudited Pro Forma Financial Information of the Group (continued)

Unaudited consolidated balance sheet of the Group as at 30 June 2021 Unaudited statement of assets and liabilities of the Disposal Group as at 30 June 2021 Pro forma (Note 1) (Note 2) (Note 3) RMB’000 RMB’000 RMB’000 27,329,232 — — (127,930) — — 104,800 — — 26,537,101 — — 53,843,203 — — 17,197,793 — — 71,040,996 — — 65,388,932 — — 371,268 — — 20,293 — — 3,546,810 (501,713) — 69,327,303 (501,713) — 20,305,779 — — 81,734 — — 55,695,635 (6,485,522) — 38,817,501 — — 11,047,553 — — 282,923 — — 126,231,125 (6,485,522) — 195,558,428 (6,987,235) — 266,599,424 (6,987,235) —	Unaudited consolidated balance sheet of the Group as at 30 June 2021 Unaudited statement of assets and liabilities of the Disposal Group as at 30 June 2021 Pro forma (Note 1) (Note 2) (Note 3) RMB’000 RMB’000 RMB’000 27,329,232 — — (127,930) — — 104,800 — — 26,537,101 — — 53,843,203 — — 17,197,793 — — 71,040,996 — — 65,388,932 — — 371,268 — — 20,293 — — 3,546,810 (501,713) — 69,327,303 (501,713) — 20,305,779 — — 81,734 — — 55,695,635 (6,485,522) — 38,817,501 — — 11,047,553 — — 282,923 — — 126,231,125 (6,485,522) — 195,558,428 (6,987,235) — 266,599,424 (6,987,235) —	Pro forma (Note 3) RMB’000 — — — —	adjustments (Note 4) RMB’000 — — — 331,483	Unaudited pro forma consolidated balance sheet of the Group as at 30 June 2021 Pro forma adjustments assuming the Put Option were exercised immediately at the grant date Unaudited pro forma consolidated balance sheet of the Group assuming the Put Option were exercised immediately at the grant date (Note 5) RMB’000 RMB’000 RMB’000 27,329,232 — 27,329,232 (127,930) — (127,930 104,800 — 104,800 26,868,584 (433,102) 26,435,482 54,174,686 (433,102) 53,741,584 17,197,793 — 17,197,793 71,372,479 (433,102) 70,939,377 65,388,932 — 65,388,932 371,268 — 371,268 20,293 — 20,293 3,045,097 501,713 3,546,810 68,825,590 501,713 69,327,303 20,305,779 — 20,305,779 81,734 — 81,734 54,667,584 1,028,051 55,695,635 38,817,501 — 38,817,501 11,243,509 — 11,243,509 282,923 — 282,923 125,399,030 1,028,051 126,427,081 194,224,620 1,529,764 195,754,384 265,597,099 1,096,662 266,693,761	Unaudited pro forma consolidated balance sheet of the Group as at 30 June 2021 Pro forma adjustments assuming the Put Option were exercised immediately at the grant date Unaudited pro forma consolidated balance sheet of the Group assuming the Put Option were exercised immediately at the grant date (Note 5) RMB’000 RMB’000 RMB’000 27,329,232 — 27,329,232 (127,930) — (127,930 104,800 — 104,800 26,868,584 (433,102) 26,435,482 54,174,686 (433,102) 53,741,584 17,197,793 — 17,197,793 71,372,479 (433,102) 70,939,377 65,388,932 — 65,388,932 371,268 — 371,268 20,293 — 20,293 3,045,097 501,713 3,546,810 68,825,590 501,713 69,327,303 20,305,779 — 20,305,779 81,734 — 81,734 54,667,584 1,028,051 55,695,635 38,817,501 — 38,817,501 11,243,509 — 11,243,509 282,923 — 282,923 125,399,030 1,028,051 126,427,081 194,224,620 1,529,764 195,754,384 265,597,099 1,096,662 266,693,761	Unaudited pro forma consolidated balance sheet of the Group assuming the Put Option were exercised immediately at the grant date RMB’000 27,329,232 (127,930 104,800 26,435,482
53,843,203 17,197,793	— —	— —	331,483 —	54,174,686 17,197,793
71,040,996	—	—	331,483	71,372,479	(433,102)	70,939,377
65,388,932 371,268 20,293 3,546,810	— — — (501,713)	— — — —	— — — —	65,388,932 371,268 20,293 3,045,097	— — — 501,713	65,388,932 371,268 20,293 3,546,810
69,327,303	(501,713)	—	—	68,825,590	501,713	69,327,303
20,305,779 81,734 55,695,635 38,817,501 11,047,553 282,923			— — 5,457,471 — 195,956 —	20,305,779 81,734 54,667,584 38,817,501 11,243,509 282,923	— — 1,028,051 — — —	20,305,779 81,734 55,695,635 38,817,501 11,243,509 282,923
126,231,125	(6,485,522)	—	5,653,427	125,399,030	1,028,051	126,427,081
195,558,428	(6,987,235)	—	5,653,427	194,224,620	1,529,764	195,754,384
266,599,424	(6,987,235)	—	5,984,910	265,597,099	1,096,662	266,693,761

– II-3 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

II. NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

The amounts are extracted from the unaudited condensed consolidated interim balance sheet of the Group as at 30 June 2021 as set out in the published interim report of the Company for the six months ended 30 June 2021.
The amounts represents the unaudited statement of assets and liabilities of the Disposal Group as at 30 June 2021 which are derived from the published unaudited condensed consolidated interim balance sheet of the Group as at 30 June 2021 without adjustment.
The adjustment represents the Group’s proposed capital injection to the Partnership as a sponsor limited partner. Pursuant to the Subscription Agreement, the Group has conditionally agreed to contribute US$400,000,000, representing approximately 28.57% of the target fund size of the Partnership. The adjustment amount for the capital injection represents the estimated phase one capital injection of US$95,974,000, equivalent to approximately RMB620,000,000 and is assumed had been paid on 30 June 2021 for the purpose of this unaudited pro forma financial information. The remaining contribution amount is not recorded in this unaudited pro forma financial information because the capital injection will be contributed from time to time in separate capital calls as requested by the general partner of the Partnership according to the status of the projects under the Partnership. The Partnership will be accounted for as an investment in joint venture and the remaining amount of capital injection will be disclosed as capital commitments to a joint venture in the consolidated financial statements of the Group in accordance with the Group’s accounting policies and Hong Kong Financial Reporting Standards (‘‘HKFRS’’).

– II-4 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

The adjustment represents the estimated net gain on the Disposal pursuant to the Sale and Purchase Agreement (the ‘‘Agreement’’) dated 13 October 2021 assuming the Disposal was completed on 30 June 2021, which is calculated as follows:

Total consideration pursuant to the Agreement (i)
Less: Difference between the fair value and the amount
of earn-out payments as set out in the Agreement (i)
Estimated total consideration
Less: Estimated unrealized financing income (ii)
Amount due to the Sellers prior to Completion (iii)
Estimated net proceeds to be received from the Disposal
Less: Net assets of the Disposal Group as at 30 June 2021 (iv)
Less: Unrealized gain from Transactions (v)
Income tax expense (vi)
Estimated net gain on the Disposal

RMB’000
6,414,546
(153,351)
6,261,195
(790,018)
(4,454,989)
1,016,188
(433,176)
583,012
(166,567)
(84,962)
331,483

(i) The Group proposed to dispose of 100% equity of the Disposal Group to the Partnership pursuant to the Agreement, at a total consideration of RMB6,414,546,000 which comprise of (i) offshore consideration of RMB6,298,233,000 (including RMB500,000,000 earn-out payments) and (ii) onshore consideration of RMB116,313,000. According to the Agreement, the payment will be settled in a few stages. In the first stage, the Partnership will pay an offshore consideration of RMB2,538,233,000. This first stage payment was assumed had been received by the Group on 30 June 2021 for the purpose of this unaudited pro forma financial information. The remaining consideration of RMB3,376,313,000 (excluding the RMB500,000,000 earn-out payments) is discounted by deducting an estimated unrealized financing income of RMB709,018,000. The discounted amount of RMB2,586,295,000 is accounted by the Group as long-term receivables on 30 June 2021 for the purpose of this unaudited pro forma financial information. The fair value of the earn-out payments is estimated to be RMB346,649,000, which was accounted by the Group as financial assets at fair value through profit or loss on 30 June 2021 for the purpose of this unaudited pro forma financial information. It is expected that a gain of approximately RMB1.18 billion will be accrued to the Group as a result of the Disposal over the period of 9 years, which is calculated based on the consideration, less the net assets of the Disposal Group as at 30 June 2021 and the estimated expenses in connection with the Disposal. It is also expected that there will be an unrealised gain of approximately RMB150 million to be realised at the exit of the Partnership or through disposal of our interest in the Partnership. Together with the gain on disposal of RMB1.18 billion stated above, the overall gain expected to be accrued to the Group at the exit of the Partnership or through disposal of our interest in the Partnership shall be approximately RMB1.33 billion. Upon completion of the Transactions, the Group will cease to consolidate the Disposal Group in accordance with the Group’s accounting policies and HKFRS.

– II-5 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

(ii) The amount represents the unrealized financing income due to discounting of the payments, which is calculated using a discount rate of 5.04%, the capitalization rate of Group as at 30 June 2021 and based on the proposed payment schedule pursuant to the Agreement.
(iii) The amount represents the liabilities of the Target Company due to the Sellers as at 30 June 2021 prior to the Completion, which will be settled in stages within the payments of the consideration pursuant to the Agreement.
(iv) The amount is extracted from the unaudited statement of assets and liabilities of the Disposal Group as at 30 June 2021.
(v) The amount represents the elimination adjustment for the unrealized gain from the disposal of the Disposal Group to the Partnership which the Group will invest in approximately 28.57% interest pursuant to the Subscription Agreement. The gains from the Disposal are recognized in the Group’s financial statements only to the extent of unrelated investors’ interests in the Partnership as the Disposal Group does not constitute a business, as defined in HKFRS 3 (Revised) ‘‘Business Combinations’’. The adjustment amount is calculated according to the estimated pre-tax net gain on the Disposal and the Group’s interest in the Partnership.
(vi) The amount represents the income tax expense to be incurred for the Transactions which will be borne by the Group and calculated at the tax rate of 10% (the applicable tax rate for the transfer of shares of domestic enterprise held by the non-resident enterprises). The details are as follows:

Current income tax (a)
Deferred income tax (b)
Income tax expense
(a)
Current income tax
Total consideration pursuant to the Agreement
Less: Amounts due to the Sellers prior to Completion
Taxable income
Current income tax calculated at the tax rate of 10%
(b)
Deferred income tax
Estimated unrealized financing income
Difference between the fair value and the amount of earn-out
payments as set out in the Agreement
Unrealized gain from Transactions
Total unrealized gain
Deferred income tax calculated at the tax rate of 10%

RMB’000
195,956
(110,994)
84,962
RMB’000
6,414,546
(4,454,989)
1,959,557
195,956
RMB’000
790,018
153,351
166,567
1,109,936
110,994

– II-6 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

(vii) The details of the adjustment to trade and other receivables and prepayments are as follow:

Non-current portion (a) Current portion (b) Total	RMB’000 2,586,295 1,002,482
	3,588,777

  - (a) The amount represents the discounted remaining consideration of RMB3,376,313,000 (excluding the RMB500,000,000 earn-out payments).

  - (b) The amount represents the Disposal Group’s receivable due from the Group prior to Completion, which is adjusted due to the deconsolidation of the Disposal Group.

(viii) The trade and other payables with the amount of RMB5,457,471,000 represents the Disposal Group’s payables due to the Group prior to Completion, which is adjusted due to the deconsolidation of the Disposal Group.
(ix) Pursuant to the Partnership Agreement, the Put Option will be granted to the three external Limited Partners (i.e. Limited Partners of the Partnership who are not a member of the Group), which will be recognised as a financial liability at fair value through profit or loss. The estimated fair value is close to nil at the grant date considering the possibility of the Put Option being exercised.
As the exercise of the Put Option is not at the Company’s discretion, for the purpose of this unaudited pro forma financial information, the Put Option is assumed had been exercised at the grant date. The adjustment represents that the Group repurchases the external Limited Partners’ interest in the Partnership and bears the income tax expense incurred for the Transactions. It is assumed that the significant assets or liabilities in the Partnership are those of the Disposal Group. Upon the exercise of the Put Option, the Company will obtain the control of the Partnership and re-consolidate the Disposal Group again, which constitutes an assets acquisition for the purpose of this unaudited pro forma financial information as the construction works have not yet been commenced. The fair value of the assets acquired is consistent with their fair value at the grant date of the Put Option. Since it is assumed that the Put Option would be exercised immediately at the grant date, no accrual is made for the guaranteed return at the overall IRR of 11% on the external Limited Partners’ capital contributions.
For the purpose of this unaudited pro forma financial information, the balances stated in United States dollars is converted into Renminbi at a rate of USD1.00 to RMB6.4601. No representation is made that United States dollars amounts have been, could have been or may be converted to Renminbi, or vice versa, at that rate.
Apart from the above, no other adjustment has been made to this unaudited pro forma financial information to reflect any trading results or other transactions of the Group entered into subsequent to 30 June 2021.

– II-7 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

The following is the text of a report on the unaudited pro forma financial information of the Group received from PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this circular.

==> picture [70 x 51] intentionally omitted <==

INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION

To the Directors of Sino-Ocean Group Holding Limited

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of Sino-Ocean Group Holding Limited (the ‘‘Company’’) and its subsidiaries (collectively the ‘‘Group’’) excluding Super Goal Development Limited (the ‘‘Target Company’’) and its subsidiary (the ‘‘Disposal Group’’) by the directors of the Company (the ‘‘Directors’’) for illustrative purposes only. The unaudited pro forma financial information consists of the unaudited pro forma consolidated balance sheet as at 30 June 2021 and related notes (the ‘‘Unaudited Pro Forma Financial Information’’) as set out on pages II-1 to II-7 of the Company’s circular dated 24 November 2021 (the ‘‘Circular’’), in connection with the proposed disposal of the Disposal Group and the proposed capital injection to Sino-Ocean Prime Office Partners I LP (the ‘‘Partnership’’) and the grant of put option to the external limited partners of the Partnership (the ‘‘Transactions’’) by the Company. The applicable criteria on the basis of which the Directors have compiled the Unaudited Pro Forma Financial Information are described on pages II-1 to II-7 of the Circular.

The Unaudited Pro Forma Financial Information has been compiled by the Directors to illustrate the impact of the Transactions on the Group’s financial position as at 30 June 2021 as if the Transactions had taken place at 30 June 2021. As part of this process, information about the Group’s financial position has been extracted by the Directors from the Group’s unaudited condensed consolidated financial statements for the six months ended 30 June 2021, on which a review report has been published.

Directors’ Responsibility for the Unaudited Pro Forma Financial Information

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

– II-8 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Our Independence and Quality Control

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

Our firm applies Hong Kong Standard on Quality Control 1 issued by the HKICPA and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountant’s Responsibilities

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

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus, issued by the HKICPA. This standard requires that the reporting accountant plans and performs procedures to obtain reasonable assurance about whether the Directors have compiled the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the Unaudited Pro Forma Financial Information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the Unaudited Pro Forma Financial Information.

The purpose of unaudited pro forma financial information included in a circular is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the entity as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the Transactions at 30 June 2021 would have been as presented.

– II-9 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

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

. The related pro forma adjustments give appropriate effect to those criteria; and
. The unaudited pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information.

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

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

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

Opinion

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled by the Directors on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

PricewaterhouseCoopers Certified Public Accountants Hong Kong, 24 November 2021

– II-10 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

The following is the text of letter and valuation report, prepared for the purpose of incorporation in this circular, received from Graval Consulting Limited, an independent property valuer, in connection with their valuation as at 31 August 2021 of the property interests held by the Group in the People’s Republic of China

Graval Consulting Limited 2401–02, 24/F, Shui On Centre 6–8 Harbour Road Wanchai, Hong Kong

24 November 2021

The Board of Directors Sino-Ocean Group Holding Limited 601, One Pacific Place, 88 Queensway, Hong Kong

Dear Sirs and Madams,

Re: Valuation of Lot No. Z6 in Central Business District, East 3rd Ring Road, Chaoyang District, Beijing City, the People’s Republic of China (中國北京市朝陽區東三環北京商務中心區(CBD)核心區Z6地塊) (the ‘‘Property’’)

INSTRUCTIONS

We refer to your instruction for us to value the property interests held by Sino-Ocean Group Holding Limited (the ‘‘Company’’) or its subsidiaries (together referred as the ‘‘Group’’) located in the People’s Republic of China (the ‘‘PRC’’). We confirm that we have carried out inspection, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the Property in existing state as at 31 August 2021 (the ‘‘Valuation Date’’) for the purpose of incorporation into the circular issued by the Company on the date hereof.

This letter which forms part of our valuation report explains the basis and methodology(ies) of valuation, clarifying assumptions, valuation considerations, title investigations and limiting conditions of this valuation.

BASIS OF VALUATION

The valuation is our opinion of the market value (‘‘Market Value’’) which is defined by the Hong Kong Institute of Surveyors as ‘‘the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently, and without compulsion’’.

– III-1 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

VALUATION METHODOLOGY(IES)

In valuing the Property, we have adopted the market approach on the basis that the Property will be developed and completed in accordance with the Company’s latest development proposal provided to us. In arriving at our opinion of value, we have adopted the market approach by making reference to comparable sales evidences as available in the relevant market and have also taken into account the development costs that will be expended to complete the developments to reflect the quality of the completed development. The ‘‘gross development value’’ represents our opinion of the aggregate selling prices of the saleable units of the development erected on the properties assuming that it had been completed and all sold out to independent third parties at their highest selling prices obtained as at the Valuation Date. The market approach is considered to be most reliable in valuing properties under development.

VALUATION STANDARDS

In valuing the property interests, we have complied with all the requirements contained in Chapter 5 and Practice Note 12 to the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited and the HKIS Valuation Standards 2020 Edition published by the Hong Kong Institute of Surveyors (‘‘HKIS’’) and the RICS Valuation — Global Standards (2020 Edition) published by the Royal Institution of Chartered Surveyors (‘‘RICS’’).

TITLE INVESTIGATION

We have been shown copies of various documents relating to the property interest. However, we have not examined the original documents to verify the existing title to the property interest or any amendment which does not appear on the copies handed to us. We have relied considerably on the information given by the Group’s PRC legal advisers, Beijing DHH Law Firm, concerning the validity of the title to the property interest located in the PRC.

AREA MEASUREMENT AND INSPECTION

Our Mr. Liang Zhi Peng, who is graduated with a bachelor degree with 3-years working experience in property valuation has conducted on-site inspections of the exteriors of the Property on 23 September 2021. In the course of our inspections, we did not note any serious structural defects. However, no structural survey has been made and we are therefore unable to report whether the Property is free from rot infestation or any other defects. No tests were carried out on any of the services. Moreover, we have not carried out investigations on site to determine the suitability of the ground conditions and the services etc., for any future development. Our valuation is prepared on the assumption that these aspects are satisfactory and no extraordinary expenses or delay will be incurred during the development period.

We have not carried out detailed on-site measurement to verify the correctness of the areas in respect of the Property but have assumed that the areas shown on the documents handed to us are correct. All dimensions, measurements and areas are approximate.

– III-2 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

We have not carried out investigation to determine the suitability of the ground conditions or the services for any property developments to be erected thereon. Our valuation is on the basis that these aspects are satisfactory and that no extraordinary expense or delay will be incurred during the construction period. Moreover, it is assumed that the utilization of the land and improvements will be within the boundaries of the sites held by the owner or permitted to be occupied by the owner. In addition, we assumed that no encroachment or trespass exits, unless noted in the valuation report.

VALUATION ASSUMPTION

Our valuations have been made on the assumption that the owner sells the Property in the market in its existing state without the benefit of deferred term contracts, leasebacks, joint ventures, management agreements or any similar arrangements which would serve to affect the value of the Property.

No allowance has been made in our valuation for any charges, mortgages or amounts owing on the property interest or for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the property interest is free from encumbrances, restrictions and outgoings of any onerous nature which could affect its value.

All consents, approvals and license from relevant government authorities for the property interest have been granted without any onerous conditions or undue time delay which might affect their values. All the required licenses, consents, or other legislative or administrative authority from any local, provincial, or national government, private entity or organization either have been or can be obtained or renewed for any use which the valuation report covers.

All applicable zoning and use regulations and restrictions have been complied with unless nonconformity has been stated, defined, and considered in the valuation report. However, we have assumed that the utilization of the property interest and improvements are within the boundaries of the property interest described and that no encroachment or trespass exists, unless noted in the valuation report.

LIMITING CONDITIONS

We have relied to a considerable extent on information provided by the Group and accepted advices given to us on such matters, in particular, but not limited to tenure, planning approvals, statutory notices, easements, particulars of occupancy, size and floor areas and all other relevant matters in the identification of the Property.

We have had no reason to doubt the truth and accuracy of the information provided to us by the Group. We have also been advised by the Group that no material fact has been omitted from the information supplied. We consider that we have been provided with sufficient information to reach an informed view, and we have no reason to suspect that any material information has been withheld.

– III-3 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

No environmental impact study has been ordered or made. Full compliance with applicable national, provincial and local environmental regulations and laws is assured unless otherwise stated, defined and considered in the valuation report.

As at the Valuation Date, we continue to be faced with an unprecedented set of circumstances caused by Novel Coronavirus (COVID-19) and an absence of relevant/sufficient market evidence on which to base our judgements. Our valuation of the Property is therefore reported as being subject to ‘‘material valuation uncertainty’’ as set out in VPS 3 and VPGA 10 of the RICS Valuation — Global Standards (2020 Edition).

Consequently, less certainty — and a higher degree of caution — should be attached to our valuation than would normally be the case. For the avoidance of doubt this explanatory note, including the ‘‘material valuation uncertainty’’ declaration, does not mean that the valuation cannot be relied upon. Rather, this explanatory note has been included to ensure transparency and to provide further insight as to the market context under which the valuation opinion was prepared. In recognition of the potential for market conditions to move rapidly in response to changes in the control or future spread of COVID-19 we highlight the importance of the Valuation Date. We do not accept responsibility or liability for any losses arising from such subsequent changes in value. Given the valuation uncertainty noted, we recommend that the user(s) of this report review this valuation periodically.

– III-4 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

REMARKS

Unless otherwise stated, all money amounts stated are in Renminbi (RMB). The exchange rate adopted in valuing the property interest in the PRC as at the Valuation Date was HK$1: RMB0.83. There has been no significant fluctuation in the exchange rate for this currency against Hong Kong Dollars between that date and the date of this letter.

The English transliteration of the Chinese name(s) in this valuation report, where indicated by an asterisk (*), is included for information purposes only, and should not be regarded as the official English name(s) of such Chinese name(s).

We enclose herewith our valuation report.

Yours faithfully, For and on behalf of Graval Consulting Limited

Lawrence Chan Ka Wah

MRICS MHKIS RPS(GP) MCIREA MHIREA RICS Registered Valuer Partner

Analysed and reported by: Cris K.L. Chan

Assistant Manager

Mr. Lawrence Chan Ka Wah is a member of the Royal Institution of Chartered Surveyors, a member of the Hong Kong Institute of Surveyors, Registered Professional Surveyors in the General Practice Section, a RICS Registered Valuer and a member of the China Institute of Real Estate Appraisers and Agents, who has over 18 years’ experience in the valuation of properties in Hong Kong, Macau, the PRC and the Asia-Pacific Region. Lawrence joined Graval Consulting Limited in 2020.

Mr. Cris K.L. Chan was graduated from The University of Hong Kong who has over 13 years’ experience in the valuation of property in Hong Kong, Macau, the PRC and the Asia-Pacific Region. Cris jointed Graval Consulting Limited in 2020.

– III-5 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

VALUATION REPORT

Property held by the Group in the PRC for development purpose

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 August 2021 RMB Lot No. Z6 in Central The Property comprises a The Property was under RMB6,460,000,000 Business District, parcel of land with a site area construction as at the East 3rd Ring Road, of approximately 11,007.36 Valuation Date. Chaoyang District, sq.m. which is proposed to be Beijing City, the PRC developed into a 33-storey According to the commercial building with a information provided, the (中國北京市朝陽區東三環 total gross floor area of Property is estimated to 北京商務中心區(CBD)核 approximately 127,543.48 be completed in June 心區Z6地塊) sq.m. (exclusive of a 6-storey 2026. basement with a total gross floor area of approximately 50,823.68 sq.m.) (the ‘‘Proposed Development’’). The land-use rights of the Property were granted for terms expiring on 29 August 2052 and 29 August 2062 for commercial and comprehensive uses respectively.

Notes:

Pursuant to a State Owned Land Use Rights Grant Contract (Contract No. Jing Di Chu (He) Zi (2012) No.0254) dated 30 August 2012 entered into between Beijing City State Owned Land Resource Bureau (the ‘‘Grantor’’) and the Group and other independent third parties (the ‘‘Grantees’’), the land use rights of the Property with a total site area of 11,007.36 sq.m. was granted from the Grantor to the Grantees for commercial and comprehensive uses. The salient terms related to the development conditions of the Property are as below:

Primary Permitted Use: C2 Commercial and Finance Total Gross Floor Area: Not more than approximately 190,000 sq.m. (above ground) Building Height Restriction: Between 300 to 350 metres

Pursuant to a Supplementary Agreement to the State Owned Land Use Rights Grant Contract, the Grantees is changed to Beijing Skyriver CBD Property Co., Ltd.* 北京天江通睿置業有限公司 (the ‘‘Project Company’’). Pursuant to a Letter regarding the Planning Opinions of Lot No. Z6 Central Business District Project (Document No. Jing Gui Zi Han (2020) No.240) issued by Beijing Municipal Commission of Planning and Natural Resources dated 12 February 2020, the building height restriction of the Property is revised to not higher than 160 metres.

– III-6 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

Pursuant to a Real Estate Ownership Certificate (Document No.: Jing (2018) Chao Bu Dong Chan Quan No.0000209) dated 30 September 2018, the land use rights of the Property with a total site area of 11,007.36 sq.m. was granted to the Project Company for terms expiring on 29 August 2052 and 29 August 2062 for commercial and comprehensive uses respectively.
According to information provided by the Company, the Property is proposed to be developed into a 33-storey office tower with a total gross floor area of approximately 127,543.48 sq.m. (exclusive of a 6-storey basement with a total gross floor area of approximately 50,823.68 sq.m.). The details are as follows:

Levels Proposed Use Basement Levels 2 to 5 Car Parking spaces and other ancillary facilities Basement Levels 1 and 1M Shop units and other ancillary facilities Levels 1 and 2 Shop units and lobby Levels 3 to 33 Office units Total	Approximate Total Gross Floor Area (sq.m.) 35,844.9 14,978.78 6,942.55 120,600.93
	127,543.48 (exclusive of basement with a total gross floor area of approximately 50,823.68 sq.m.)

According to information provided by the Company, one of the shop units on Level 1 and the office units on Levels 28 to 33 with a total estimated gross floor area of approximately 25,343.48 sq.m. and 50 basement car parking space of the Proposed Development (the ‘‘Portion B’’) shall be transferred to an independent third party in future. The remaining portion of the Proposed Development (the ‘‘Portion A’’) comprises a total estimated aboveground gross floor area of approximately 102,200 sq.m. (exclusive of shop units and ancillary facilities on Basement Levels 1 and 1M with a total estimated gross floor area of approximately 14,978.78 sq.m. and 285 car parking spaces and ancillary facilities on Basement Levels 2 to 5).
According to information provided by the Company, the incurred development cost and estimated total development cost (exclusive of the land cost) of the Property as at the Valuation Date are approximately RMB473,000,000 and RMB3,130,000,000 respectively. Of which, the incurred development cost and estimated total development cost (exclusive of the land cost) of the Portion A are approximately RMB332,000,000 and RMB2,550,000,000 respectively.

The Proposed Development is estimated to be completed in June 2026.

The Market Value in existing state and the Gross Development Value (Market Value after completion) of the Property as at the Valuation Date are RMB6,460,000,000 and RMB10,905,000,000. Of which, the Market Value in existing state and the Gross Development Value (Market Value after completion) of the Proposed Development for the Portion A as at the Valuation Date are RMB5,112,000,000 and RMB8,710,000,000 respectively.
The Property is situated at Central Business District of Beijing City, buildings in the locality are mainly medium to high-rise commercial buildings. Beijing Subway Guomao Station is approximately 10-minutes walking distance from the Property. Beijing Railway Station and Beijing Capital International Airport are about 20-minutes and 30-minutes driving distance from the Property respectively. Subway, taxis and buses are accessible to the Property.

– III-7 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

The accommodation value of similar commercial land parcels in the locality as at the Valuation Date is in the range of RMB15,000 per sq.m. to RMB60,000 per sq.m.
According to the information provided by the Group, the Project Company is a wholly-owned subsidiary of the Group.
We have been provided with a legal opinion on the Property prepared by the Company’s PRC legal adviser, Beijing DHH Law Firm, which contains, inter alia, the following information:
(a) the Property is free from any mortgages, orders and other legal encumbrances which may cause adverse effects to the ownership of the Property; and
(b) the Project Company is the sole owner of the Property and is entitled to occupy, transfer, lease, and mortgage the Property.

– III-8 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

Graval Consulting Limited 2401–02, 24/F, Shui On Centre 6–8 Harbour Road Wanchai, Hong Kong

24 November 2021

The Board of Directors Sino-Ocean Group Holding Limited 601, One Pacific Place, 88 Queensway, Hong Kong

Dear Sirs and Madams,

Re: Valuation of various shops and office units of Blocks AB and C and various and comprehensive service units of Block D, Ocean Office Park, No.10–11 Jin Tong West Road and No.5 Jing Hua South Street, Chaoyang District, Beijing City, the People’s Republic of China (中國北京市朝陽區金桐西路10至11號及景華南街5號遠洋．光華國際AB座及C座多個商舖及辦公室單元及D座多個綜合服務單元) (the ‘‘OOP Property’’)

INSTRUCTIONS

We refer to your instruction for us to value the property interests held by Sino-Ocean Group Holding Limited (the ‘‘Company’’) or its subsidiaries (together referred as the ‘‘Group’’) located in the People’s Republic of China (the ‘‘PRC’’). We confirm that we have carried out inspection, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the OOP Property in existing state as at 31 August 2021 (the ‘‘Valuation Date’’) for the purpose of incorporation into the circular issued by the Company on the date hereof.

– III-9 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

BASIS OF VALUATION

VALUATION METHODOLOGY(IES)

In valuing the OOP Property, we have adopted the income approach. Income Approach is an approach that provides an indication of value by converting future cash flows to a single current capital value. We have cross-checked against comparable sales evidence as available in the relevant market, transactions involving large scale properties of similar nature and tenancy structure in the locality are rare however. As the OOP Property generates rental income from letting/leasing agreements, we considered that income approach, which is commonly adopted in valuation of properties held for investment purpose, is the most reliable and popular approach in valuing the OOP Property.

VALUATION STANDARDS

TITLE INVESTIGATION

AREA MEASUREMENT AND INSPECTION

Our Mr Liang Zhi Peng, who is graduated with a bachelor degree with 3-years working experience in property valuation, has conducted on-site inspections of the exteriors of the OOP Property on 23 September 2021. In the course of our inspections, we did not note any serious structural defects. However, no structural survey has been made and we are therefore unable to report whether the OOP Property is free from rot infestation or any other defects. No tests were carried out on any of the services. Moreover, we have not carried out investigations on site to determine the suitability of the ground conditions and

– III-10 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

the services etc., for any future development. Our valuation is prepared on the assumption that these aspects are satisfactory and no extraordinary expenses or delay will be incurred during the development period.

We have not carried out detailed on-site measurement to verify the correctness of the areas in respect of the OOP Property but have assumed that the areas shown on the documents handed to us are correct. All dimensions, measurements and areas are approximate.

VALUATION ASSUMPTION

Our valuations have been made on the assumption that the owner sells the OOP Property in the market in its existing state without the benefit of deferred term contracts, leasebacks, joint ventures, management agreements or any similar arrangements which would serve to affect the value of the OOP Property.

– III-11 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

LIMITING CONDITIONS

As at the Valuation Date, we continue to be faced with an unprecedented set of circumstances caused by Novel Coronavirus (COVID-19) and an absence of relevant/sufficient market evidence on which to base our judgements. Our valuation of the OOP Property is therefore reported as being subject to ‘‘material valuation uncertainty’’ as set out in VPS 3 and VPGA 10 of the RICS Valuation — Global Standards (2020 Edition).

REMARKS

– III-12 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

We enclose herewith our valuation report.

Yours faithfully, For and on behalf of Graval Consulting Limited

Lawrence Chan Ka Wah

MRICS MHKIS RPS(GP) MCIREA MHIREA RICS Registered Valuer Partner

Analysed and reported by: Cris K.L. Chan

Assistant Manager

– III-13 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

VALUATION REPORT

Property held by the Group in the PRC for investment purpose

Property Description and tenure

Ocean Office Park (‘‘thethe Development’’)’’) is a commercial and apartment development with three 23 to 24-storey composite building (exclusive of a 4-storey basement) completed in 2008.

Various shops and office Ocean Office Park (‘‘thethe units of Blocks AB and C Development’’)’’) is a and various commercial and apartment comprehensive service development with three 23 to units of Block D, Ocean 24-storey composite building Office Park, No.10–11 Jin (exclusive of a 4-storey Tong West Road and basement) completed in 2008. No.5 Jing Hua South Street, Chaoyang District, The OOP Property comprises Beijing City, the PRC various shop units on Basement Level 1 and Levels (中國北京市朝陽區金桐西 1 and 2, various office units 路10至11號及景華南街5號 on Levels 3 to 28 (no 遠洋．光華國際AB座及C designation for Levels 4, 13, 座多個商舖及辦公室單元 14 and 24), various store 及D座多個綜合服務單元) rooms on Basement Levels 2 and 4 and a staff canteen on Basement Level 2 of the Development with a total gross floor area of the OOP Property is approximately 92,267.71 sq.m. (exclusive of basement of approximately 15,676.61 sq.m.).

Particulars of occupancy

Portion of the OOP Property was vacant and portion of the OOP Property was tenant-occupied for commercial, office and ancillary uses as at the Valuation Date.

The particulars of the tenancies were summarized in Note 5.

Market Value in existing state as at 31 August 2021 RMB

RMB5,787,000,000

The land-use rights of the Development were granted for various terms with the latest expiry date on 2 August 2073 for commercial, offices, apartments, basement shops and basement carpark uses.

– III-14 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

Notes:

Pursuant to 3 State Owned Land Use Rights Certificates, the land use rights of the Development were granted to Beijing Longzeyuan Real Estate Co., Ltd.* 北京龍澤源置業有限公司 (‘‘Longzeyuan’’) for various terms with the latest expiry date on 2 August 2073 for commercial, offices, apartments, basement shops and basement carpark uses. The details are as follows:

	State Owned Land Use	Approximate	Date of		Tenure Expiry
Block	Rights Certificates	Site Area	Certificates	Permitted Use	Date
	(Document Nos.)	(sq.m.)
AB	Jing Chao Guo Yong	7,369.79	15 May 2006	Office	25 August 2054
	(2006 Chu) No. 0097			Commercial	25 August 2044
C	Jing Chao Guo Yong	6,348.22	16 September	Office	24 July 2058
	(2008 Chu) No. 0281		2008	Commercial	24 July 2048
D	Jing Chao Guo Yong	7,761.03	11 May 2006	Apartments	2 August 2073
	(2004 Chu) No. 0179			Basement shops	2 August 2043
				Basement Car	2 August 2053
				parking space

Pursuant to 3 Building Ownership Certificates, the ownership of various office units, shop units and basement carparks of the Development with a total gross floor area of approximately 117,176.09 sq.m. (exclusive of basement with a total gross floor area of approximately 40,385.44 sq.m.) was vested in Longzeyuan. The details are as follows:

Building Ownership Approximate Total Block Certificates Gross Floor Area Permitted Use Date of Certificates (Document Nos.) (sq.m.) AB X Jing Fang Quan Zheng 59,694.93 Office and 13 November 2009 Chao Zi No. 755296 commercial C X Jing Fang Quan Zheng 57,481.16 Office and 20 November 2009 Chao Zi No. 759388 commercial D X Jing Fang Quan Zheng 40,385.44 Car parking 19 November 2009 Chao Zi No. 758389 spaces and ancillary uses Total: 117,176.09 (exclusive of basement with a total gross floor area of approximately 40,385.44 sq.m.)

According to the information provided by the Group, the office units on Levels 12, 13 and 15 to 22 of Block AB with a total gross floor area of approximately 24,908.38 sq.m. and 368 basement car parking spaces of Block D with a total gross floor area of approximately 24,708.83 sq.m. were sold. Hence, a total remaining gross floor area of approximately 92,267.71 sq.m. (exclusive of basement with a total gross floor area of approximately 15,676.61 sq.m.) is vested in Longzeyuan.

– III-15 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

The breakdown of the market value of the OOP Property are as follows:

Block Permitted Use AB & C Office Commercial D Basement Shops, staff canteen & Storerooms Total:	Approximate Total Gross Floor Area (sq.m.) 80,979.14 11,288.57 15,676.61 92,267.71 sq.m. (exclusive of basement with a total gross floor area of approximately 15,676.61 sq.m.)	Market Value in existing state as at the Valuation Date (RMB) 4,997,000,000 500,000,000 290,000,000
		5,787,000,000

According to the information provided by the Group, portion of the OOP Property with a total gross floor area of 84,816 sq.m. is subject to various tenancy agreements with the latest expiry date on 30 January 2029 at a total monthly rental of approximately RMB32,200,000.
The OOP Property is situated at Central Business District of Beijing City, buildings in the locality are mainly medium to high-rise commercial buildings. Beijing Subway Guomao Station is approximately 10-minutes walking distance from the OOP Property. Beijing Railway Station and Beijing Capital International Airport are about 20-minutes and 30-minutes driving distance from the OOP Property respectively. Subway, taxis and buses are accessible to the OOP Property.
The market yield of commercial and office premises in the locality as at the Valuation Date is in the range of 4% to 5%.
According to the information provided by the Group, Longzeyuan is a wholly-owned subsidiary of an investment fund, of which is joint controlled by the Group and an independent third party.
We have been provided with a legal opinion on the OOP Property prepared by the Company’s PRC legal adviser, Beijing DHH Law Firm, which contains, inter alia, the following information:
(a) pursuant to the information from Real Estate Registration Centre, the OOP Property was subject to a Real Estate Mortgage Agreement entered into between Longzeyuan and Shanghai Branch of HSBC Bank (China) Company Limited (HSBC) dated 21 December 2018. According to a Real Estate Mortgage Release Agreement entered into between Longzeyuan and HSBC dated 26 September 2021, the mortgage is released;
(b) pursuant to a Real Estate Mortgage Agreement entered into between Longzeyuan and HSBC dated 24 September 2021, the OOP Property is mortgaged to HSBC for a loan amount of RMB772,000,000 to repay the balance of the mortgage stated in Note 9(a);
(c) the OOP Property is free from any charges, orders and other legal encumbrances which may cause adverse effects to the ownership of the OOP Property, save and except the mortgages stated in Note 9(a) and (b);
(d) Longzeyuan is the sole owner of the OOP Property and is entitled to occupy, transfer, lease, and mortgage the OOP Property;

– III-16 –

APPENDIX III

VALUATION REPORTS OF THE SEED PROJECTS

(e) pursuant to the information from Real Estate Registration Centre, the registered site area of Blocks AB and D of the Development are both approximately 6,348.22 sq.m., which is different from the information from the State Owned Land Use Rights Certificates stated in Note 1. Longzeuan has applied for verification of the site area. Such difference will not affect the rights to occupy, transfer, lease, and mortgage the OOP Property;
(f) the tenancy agreements stated in Note 5 are legally binding.

– III-17 –

APPENDIX IV DETAILS OF THE RETIRING DIRECTORS TO BE RE-ELECTED

The following sets out the biographical details of the Directors who will retire and, being eligible, offer themselves for re-election at the EGM pursuant to the Articles of Association:

Non-executive Directors

Mr. ZHAO Peng (趙鵬)

Mr. ZHAO Peng (‘‘Mr. Zhao’’), aged 48, is a non-executive Director and a member of the audit committee of the Board. Mr. Zhao joined the Board in July 2021. Mr. Zhao is currently an assistant general manager and board secretary of Dajia Insurance Group Co., Ltd. (大家保險集團有限責任公司) (‘‘Dajia Insurance Group’’). Mr. Zhao has been appointed as a non-executive director of China Minsheng Banking Corp., Ltd. (a company listed on the Stock Exchange and the Shanghai Stock Exchange) since June 2021 and also has been appointed as a vice chairman of Financial Street Holdings Co., Ltd. (a company listed on the Shenzhen Stock Exchange) since August 2018. Mr. Zhao was a director of Beijing Tongrentang Co., Ltd. (a company listed on the Shanghai Stock Exchange) from 13 June 2018 to 12 June 2021. Mr. Zhao has extensive experience in insurance, banking and legal. Mr. Zhao had previously served as a deputy division director then the division director of the Development and Reform Department of the former China Insurance Regulatory Commission, as well as a member of the team designated by the China Banking and Insurance Regulatory Commission to take over Anbang Insurance Group. Mr. Zhao graduated from China University of Political Science and Law and obtained his doctorate in Economic Law in 2014. Mr. Zhao is an economist. Mr. Zhao is nominated by Dajia Life Insurance Co., Ltd. (大家人壽保險股份有限公司) (‘‘Dajia Life Insurance’’), a substantial Shareholder.

As at the Latest Practicable Date, Mr. Zhao did not have any interest in Shares within the meaning of Part XV of the SFO.

Pursuant to his letter of appointment, Mr. Zhao is appointed for a term of one year commencing from 25 July 2021, subject to retirement from office and re-election at the next general meeting of the Company in accordance with the Articles of Association. Mr. Zhao is currently entitled to receive a Director’s fee of HKD380,000 per annum, which was recommended by the remuneration committee of the Board and determined by the Board with reference to his experience, qualifications, responsibilities involved in the Company and the prevailing market conditions.

Save as disclosed above, as at the Latest Practicable Date, Mr. Zhao (i) does not have any other relationship with any Directors, senior management or substantial Shareholders or controlling Shareholders of the Company; (ii) does not have any interest in any shares or underlying shares or any debentures of the Company and its associated corporations within the meaning of Part XV of the SFO; (iii) does not hold any other directorships in public companies the securities of which are listed on any securities market in Hong Kong or overseas in the last three years nor other major appointments or professional qualifications; and (iv) does not hold any other positions with other members of the Group.

– IV-1 –

APPENDIX IV DETAILS OF THE RETIRING DIRECTORS TO BE RE-ELECTED

Save as disclosed above, Mr. Zhao has confirmed that there are no other matters that need to be brought to the attention of the Shareholders in connection with his re-election and there is no other information that is required to be disclosed pursuant to rule 13.51(2)(h) to (v) of the Listing Rules.

Mr. CHEN Ziyang (陳子揚)

Mr. CHEN Ziyang (‘‘Mr. Chen’’), aged 44, is a non-executive Director and a member of the strategic and investment committee of the Board. Mr. Chen joined the Board in July 2021. Mr. Chen is currently chief investment officer and general manager of the investment management department of Dajia Insurance Group. He is also an expert consultant of the Expert Consultation Committee on Solvency Regulation under the China Banking and Insurance Regulatory Commission, an expert on the Core Talent Experts’ Team for Assets and Liabilities Management under the Insurance Association of China, a member of the Assets and Liabilities Management Specialist Committee under the Insurance Asset Management Association of China. He has extensive experience in investment management and the management of assets and liabilities. Mr. Chen had previously served as the general manager of the Research and Allocation Department, general manager of the Accounts and Entrusted Management Department, deputy general manager of the Asset Allocation Department and deputy general manager of the Asset Management Department under the Asset Management Centre of China Pacific Life Insurance Co., Ltd.* (中國太平洋人壽保險股份有限公司). Mr. Chen graduated from Shanghai University of Finance and Economics and obtained a master’s degree in Finance in 2003. Mr. Chen is a CFA charterholder. Mr. Chen is nominated by Dajia Life Insurance, a substantial Shareholder.

As at the Latest Practicable Date, Mr. Chen did not have any interest in Shares within the meaning of Part XV of the SFO.

Pursuant to his letter of appointment, Mr. Chen is appointed for a term of one year commencing from 25 July 2021, subject to retirement from office and re-election at the next general meeting of the Company in accordance with the Articles of Association. Mr. Chen is currently entitled to receive a Director’s fee of HKD380,000 per annum, which was recommended by the remuneration committee of the Board and determined by the Board with reference to his experience, qualifications, responsibilities involved in the Company and the prevailing market conditions.

Save as disclosed above, as at the Latest Practicable Date, Mr. Chen (i) does not have any other relationship with any Directors, senior management or substantial Shareholders or controlling Shareholders of the Company; (ii) does not have any interest in any shares or underlying shares or any debentures of the Company and its associated corporations within the meaning of Part XV of the SFO; (iii) does not hold any other directorships in public companies the securities of which are listed on any securities market in Hong Kong or overseas in the last three years nor other major appointments or professional qualifications; and (iv) does not hold any other positions with other members of the Group.

– IV-2 –

APPENDIX IV DETAILS OF THE RETIRING DIRECTORS TO BE RE-ELECTED

Save as disclosed above, Mr. Chen has confirmed that there are no other matters that need to be brought to the attention of the Shareholders in connection with his re-election and there is no other information that is required to be disclosed pursuant to rule 13.51(2)(h) to (v) of the Listing Rules.

Mr. ZHAN Zhong (詹忠)

Mr. ZHAN Zhong (‘‘Mr. Zhan’’), aged 53, is a non-executive Director. Mr. Zhan joined the Board in September 2021. Mr. Zhan has been appointed the vice president of China Life Insurance Company Limited (‘‘China Life’’, a company listed on the New York Stock Exchange, the Stock Exchange and the Shanghai Stock Exchange) since July 2019. He served as the marketing director of China Life from 2017 to 2019 and a supervisor of China Life from 2015 to 2017. Mr. Zhan also served as the general manager of the Individual Insurance Division of China Life from 2014 to 2017 and the deputy general manager (responsible for daily operations) and the general manager of China Life’s Qinghai Branch from 2013 to 2014. From 2009 to 2013, he successively served as the deputy general manager and the general manager of the Individual Insurance Division of China Life. From 2005 to 2009, he successively served as the general manager of the Individual Insurance Division of China Life’s Guangdong Branch and an assistant to the general manager of China Life’s Guangdong Branch. Prior to 2005, he had successively served as the director of the Marketing Department of the Chengdu High-tech Sub-branch of Zhongbao Life Insurance Company (中保人壽保險有限公司), an assistant to the manager and the manager of the Marketing Department of the Chengdu Branch, and the deputy general manager of the Chengdu Branch of Taikang Life Insurance Company (泰康人壽保險公司). Mr. Zhan graduated from Kunming Institute of Technology in July 1989, majoring in industrial electric automation with a bachelor’s degree in Engineering. Mr. Zhan is nominated by China Life, a substantial Shareholder.

As at the Latest Practicable Date, Mr. Zhan did not have any interest in Shares within the meaning of Part XV of the SFO.

Pursuant to his letter of appointment, Mr. Zhan is appointed for a term of one year commencing from 18 September 2021, subject to retirement from office and re-election at the next general meeting of the Company in accordance with the Articles of Association. Mr. Zhan is currently entitled to receive a Director’s fee of HKD380,000 per annum, which was recommended by the remuneration committee of the Board and determined by the Board with reference to his experience, qualifications, responsibilities involved in the Company and the prevailing market conditions.

Save as disclosed above, as at the Latest Practicable Date, Mr. Zhan (i) does not have any other relationship with any Directors, senior management or substantial Shareholders or controlling Shareholders of the Company; (ii) does not have any interest in any shares or underlying shares or any debentures of the Company and its associated corporations within the meaning of Part XV of the SFO; (iii) does not hold any other directorships in public companies the securities of which are listed on any securities market in Hong Kong or overseas in the last three years nor other major appointments or professional qualifications; and (iv) does not hold any other positions with other members of the Group.

– IV-3 –

APPENDIX IV DETAILS OF THE RETIRING DIRECTORS TO BE RE-ELECTED

Save as disclosed above, Mr. Zhan has confirmed that there are no other matters that need to be brought to the attention of the Shareholders in connection with his re-election and there is no other information that is required to be disclosed pursuant to rule 13.51(2)(h) to (v) of the Listing Rules.

For identification purposes only.

– IV-4 –

APPENDIX V

GENERAL INFORMATION

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 INTERESTS

(a) Interests of the Directors and chief executives in the Company and its associated corporation

As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executives of the Company, including their respective associates in the Shares, underlying Shares and debentures of the Company or its associated corporations (within the meanings of Part XV of the SFO) which were required (a) to be 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 they were taken or deemed to have under the provisions of the SFO); (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules (the ‘‘Model Code’’) had been notified to the Company and the Stock Exchange were as follows:

(i) Long Position in Shares and underlying Shares

					Approximate
			No. of		percentage
		No. of	underlying		in the
		Shares held	Shares		Company’s
		(long	comprised in		issued share
Name of Directors	Nature of interest	position)	share options	Total	capital
			(Note i)		(Note iv)
Mr. LI Ming	Founder of	127,951,178	—	127,951,178	1.680%
	discretionary trust	(Note ii)
	Beneficiary of trust	14,914,200	—	14,914,200	0.196%
		(Note iii)
	Beneficial owner	65,445,000	75,000,000	140,445,000	1.844%
Mr. WANG Honghui	Beneficial owner	273,295	2,000,000	2,273,295	0.030%
Mr. CUI Hongjie	Beneficial owner	369,571	2,000,000	2,369,571	0.031%
Ms. HUANG Xiumei	—	—	—	—	—
Mr. ZHAO Peng	—	—	—	—	—
Mr. HOU Jun	—	—	—	—	—
Mr. CHEN Ziyang	—	—	—	—	—
Mr. ZHAN Zhong	—	—	—	—	—
Mr. HAN Xiaojing	Beneficial owner	460,000	1,800,000	2,260,000	0.030%
Mr. SUEN Man Tak	Beneficial owner	120,000	1,800,000	1,920,000	0.025%
Mr. WANG Zhifeng	Beneficial owner	120,000	1,800,000	1,920,000	0.025%
Mr. JIN Qingjun	Beneficial owner	120,000	1,800,000	1,920,000	0.025%
Ms. LAM Sin Lai Judy	Beneficial owner	—	2,300,000	2,300,000	0.030%

– V-1 –

APPENDIX V

GENERAL INFORMATION

Notes:

(i) The share options were granted pursuant to the share option schemes of the Company, the details of which are set out in the section headed ‘‘Share Option Schemes’’ in the 2021 interim report of the Company dated 19 August 2021.
(ii) The 127,951,178 Shares are held by a discretionary trust of which Mr. LI Ming is the founder.
(iii) The 14,914,200 Shares are held by a discretionary trust of which Mr. LI Ming, his spouse and his son are the beneficiaries.
(iv) Calculated based on the Company’s total number of issued Shares of 7,616,095,657 Shares as at the Latest Practicable Date.
(ii) Long Position in shares of associated corporation of the Company

			No. of	Approximate
			ordinary	percentage
			shares of	of total
			associated	issued share
	Name of		corporation	capital of
Name of	associated	Nature of	held (long	associated
Director	corporation	Interest	position)	corporation
				(Note)
Mr. WANG	Gemini	Beneficial	132,000	0.021%
Honghui	Investments	owner
	(Holdings)
	Limited

Note: Calculated based on Gemini Investments (Holdings) Limited’s total number of issued ordinary shares of 635,570,000 shares as at the Latest Practicable Date.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company or their close associates had any interests or short positions in the shares, underlying shares or debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which are required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which he is taken or deemed to have under such provisions of the SFO); (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) pursuant to the Model Code to be notified to the Company and the Stock Exchange.

– V-2 –

APPENDIX V

GENERAL INFORMATION

(b) Interests of substantial Shareholders

As at the Latest Practicable Date, according to the register kept by the Company pursuant to Section 336 of the SFO, the persons (other than a Director or chief executive of the Company or their respective close associates) or entities who had an interest or a short position in the Shares or the underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO were as follows:

				Approximate
				percentage in
				the
		Long/		Company’s
		short	No. of	issued share
Name of Shareholders	Capacity	position	Shares held	capital
				(Note iii)
China Life Insurance	Interest of	Long	2,253,459,151	29.59%
(Group) Company	controlled
(‘‘China Life	corporation
Insurance Group’’)
(Note i)
Dajia Insurance	Interest of	Long	2,252,646,115	29.58%
Group	controlled
(Note ii)	corporation

Notes:

(i) The 2,253,459,151 Shares were registered in the name of, and beneficially owned by, China Life. China Life Insurance Group was interested in 68.37% of China Life. China Life Insurance Group was deemed to be interested in these Shares by virtue of the SFO.
(ii) The 2,252,646,115 Shares were registered in the name of, and beneficially owned by, Dajia Life Insurance. Dajia Insurance Group was interested in 99.98% of Dajia Life Insurance. Dajia Insurance Group was deemed to be interested in these Shares by virtue of the SFO.
(iii) Calculated based on the Company’s total number of issued Shares of 7,616,095,657 Shares as at the Latest Practicable Date.

Save as disclosed herein, as at the Latest Practicable Date, the Directors were not aware any other person (other than a Director or chief executive of the Company) who had an interest or a short position in the Shares or the underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO.

– V-3 –

APPENDIX V

GENERAL INFORMATION

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, no Director had entered or proposed to enter into any service contract with any member of the Group which was not determinable by the employer within one year without payment of any compensation (other than statutory compensation).

4. INTERESTS IN ASSETS AND CONTRACTS AND COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors was materially interested in any subsisting contract or arrangement which is significant in relation to the business of the Group, and since 31 December 2020 (the date to which the latest published audited consolidated financial statements of the Group were made up), none of the Directors is directly or indirectly interested in any assets which have been acquired or disposed of by or leased to (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 or their respective close associates had any interests in businesses which compete or are likely to compete, either directly or indirectly, with the businesses of the Group.

5. QUALIFICATION AND CONSENT OF EXPERTS

The following are the qualification of the experts who have given advice, letter or opinion for incorporation and as contained in this circular:

Name Qualification PricewaterhouseCoopers Certified Public Accountants under Professional Accountants Ordinance (Chapter 50 of the Laws of Hong Kong) Graval Consulting Limited Independent professional valuer

– V-4 –

APPENDIX V

GENERAL INFORMATION

As at the Latest Practicable Date, each of the experts identified above has no shareholding, direct or indirect, in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

As at the Latest Practicable Date, each of the experts identified above had no direct or indirect interests in any assets which have been, since 31 December 2020 (the date to which the latest published audited consolidated financial statements of the Group 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.

Each of the experts identified above has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which they are included.

6. LITIGATION

So far as the Directors are aware, as at the Latest Practicable Date, no member of the Group was involved in any litigation or claim of material importance and there was no litigation or claim of material importance known to the Directors to be pending or threatened by or against any member of the Group.

7. MATERIAL CONTRACTS

The following contracts (not being contracts in the ordinary course of business of the Group) were entered into by member(s) of the Group within the two years immediately preceding the date of this circular which are or may be material:

(a) the legally binding memorandum of understanding dated 15 December 2020 entered into between Swire Properties China Holdings Limited (太古地產中國控股有限公司) (‘‘Swire China’’) and Sino-Ocean China (a wholly-owned subsidiary of the Company) in relation to the investment (the ‘‘XTTG Investment’’) in Beijing Xingtaitonggang Properties Company Limited[*] (北京星泰通港置業有限公司) (‘‘XTTG’’), details of which are set out in the announcement and circular of the Company dated 18 December 2020 and 24 February 2021, respectively;
(b) the shareholders’ agreement in relation to XTTG dated 18 December 2020 entered into between (i) Shiny Harbour Limited (the ‘‘JV Partner’’), being a wholly-owned subsidiary of Swire Properties Limited（太古地產有限公司）, (ii) Beijing Yingyu Enterprise Management Consulting Co., Ltd.[] (北京穎煜企業管理諮詢有限公司) and Tianjin Yigangtong Enterprise Management Co., Ltd.[] (天津頤港通企業管理有限公司), both being wholly-owned subsidiaries of the Company (collectively, the ‘‘Subsidiaries’’); and (iii) Beijing Xingtai Hongxin Asset Management Co., Ltd.[*] (北京星泰泓信資產管理有限公司), being a collective enterprise wholly-owned by the Jiangtai Township Government (the ‘‘Existing Shareholder’’), details of which are set out in the announcement and circular of the Company dated 18 December 2020 and 24 February 2021, respectively;

– V-5 –

APPENDIX V

GENERAL INFORMATION

(c) the capital increase agreement for the XTTG Investment dated 18 December 2020 entered into between the JV Partner, the Subsidiaries, the Existing Shareholder and XTTG, details of which are set out in the announcement and circular of the Company dated 18 December 2020 and 24 February 2021, respectively;
(d) the agreement dated 15 December 2020 entered into between, among others, Swire China and Sino-Ocean China in relation to (i) the grant of a call option in its 50% interest in Beijing Linlian Real Estate Company Limited[*] (北京麟聯置業有限公司) (‘‘INDIGO 1 Holding Company’’) held by Sino-Ocean China to Swire China; and (ii) the grant of a call option in its 50% interest in INDIGO 1 Holding Company held by Swire China to Sino-Ocean China, details of which are set out in the announcement and circular of the Company dated 18 December 2020 and 24 February 2021, respectively;
(e) the agreement dated 18 December 2020 entered into between the People’s Government of Jiangtai Township, Chaoyang District, Beijing (北京市朝陽區將台鄉人民政府) (‘‘Jiangtai Authority’’), Beijing Chaoyang Jiangtai Township Agriculture, Industry and Commerce General Office Division[*] (北京市朝陽將台鄉農工商總公司), the JV Partner, the Subsidiaries, the Existing Shareholder and XTTG with respect to the retention of certain property by the Existing Shareholder on behalf of the Jiangtai Authority, details of which are set out in the announcement and circular of the Company dated 18 December 2020 and 24 February 2021, respectively;
(f) the cooperation framework agreement dated 18 July 2021 entered into by Sino-Ocean China, Fortune Joy and Tianjin Yuanpu Enterprise Management Consulting Co., Ltd.[*] (天津遠璞企業管理諮詢有限公司) in relation to the capital contribution by Sino-Ocean China (or its subsidiary(ies) or fellow subsidiary(ies)) to Active Growth Ventures Limited (動發創投有限公司), details of which are set out in the announcement of the Company dated 18 July 2021;
(g) the Sale and Purchase Agreement;
(h) the Subscription Agreement;
(i) the Partnership Agreement; and
(j) the subscription agreement dated 19 November 2021 entered into between (i) Jovial Step International Limited (樂階國際有限公司) (‘‘Jovial Step’’), a wholly-owned subsidiary of the Company, (ii) Sino-Ocean Logistics Property Holding Limited (遠洋物流地產控股有限公司) (the ‘‘Logistics Property Company’’) and (iii) Ocean Thrive Global Limited (海昌環球有限公司) in relation to the subscription of 30,000 shares in the Logistics Property Company by Jovial Step, representing 30% of the enlarged issued share capital thereof, details of which are set out in the announcement of the Company dated 19 November 2021.

– V-6 –

APPENDIX V

GENERAL INFORMATION

SPECIFIC DISCLOSURE RELIEF IN RELATION TO CERTAIN INFORMATION IN THE SALE AND PURCHASE AGREEMENT, THE SUBSCRIPTION AGREEMENT AND THE PARTNERSHIP AGREEMENT

Pursuant to Rule 14.66(10) and paragraph 43(2)(c) of Appendix 1B of the Listing Rules, in the case of a notifiable transaction circular, any contracts pertaining to such transaction is required to be published on the websites of the Stock Exchange and the Company for a period of not less than 14 days from the date of the circular. Pursuant to Frequently Ask Questions No. 075–2021 issued by the Stock Exchange, if issuers do not wish certain information contained in documents on display to be disclosed, they may apply to the Stock Exchange for specific disclosure relief.

As noted below, the Sale and Purchase Agreement, the Subscription Agreement and the Partnership Agreement are contracts pertaining to the transactions which are required to be made available on display on the websites of the Stock Exchange and the Company.

The Company has made an application for, and the Stock Exchange has granted, specific disclosure relief so that certain provisions of the Sale and Purchase Agreement, the Subscription Agreement and the Partnership Agreement can be redacted from the version of the aforementioned agreements which are made available on display. The provisions which have been redacted include the followings:

(a) for the Sale and Purchase Agreement, provisions in relation to the identity and the relevant description of the Property B Purchaser and the agreements with the Property B Purchaser;
(b) for the Subscription Agreement, certain clauses that would reveal the identities of the external Limited Partners, including, among others, applicable regulations in the relevant jurisdictions; and
(c) for the Partnership Agreement, provisions in relation to (i) the identity and the relevant description of the Property B Purchaser and the agreements with the Property B Purchaser; (ii) the details of the distribution waterfall of the net distributable cash from operations of the Partnership among the Special Limited Partner and the external Limited Partners; (iii) the details of the amount of fees; and (iv) the template of the annual business plan illustrating the format and structure of the business plan to be prepared by the General Partner (or the investment advisor engaged by the General Partner for the Partnership, if applicable).

The grounds for the disclosure relief are as follows:

(a) each of the external Limited Partners and the Property B Purchaser has confirmed to the Group that they will not consent to the disclosure of their identities, the Company encounters practical difficulty for the strict compliance of the aforesaid disclosure requirement;

– V-7 –

APPENDIX V

GENERAL INFORMATION

(b) disclosure of highly confidential and business sensitive and trade secret information in relation to the distribution waterfall, amount of fees and the development plan of the Partnership under the Partnership Agreement allow competitors taking advantage from such data and information for free and create unfair competition which is seriously detrimental and competitive harmful to the Company; and
(c) this circular already contains all material information relating to the Sale and Purchase Agreement, the Subscription Agreement and the Partnership Agreement and the relevant provisions which have been redacted are not material to the Shareholders’ assessment of the Sale and Purchase Agreement, the Subscription Agreement and the Partnership Agreement and the transactions contemplated thereunder.

9. DOCUMENTS ON DISPLAY

A copy of the following documents will be published on the websites of the Company (www.sinooceangroup.com) and the Stock Exchange (www.hkexnews.hk) during the period of 14 days from the date of this circular:

(a) the Sale and Purchase Agreement;
(b) the Subscription Agreement;
(c) the Partnership Agreement;
(d) the report on the unaudited pro forma financial information of the Group, the text of which is set out in Appendix II to this circular;
(e) the valuation reports of the Seed Projects, the text of which is set out in Appendix III to this circular;
(f) the letters of consent from the experts identified in the section headed ‘‘Qualification and Consent of Experts’’ above in this appendix; and
(g) this circular.

10. GENERAL

(a) The registered office of the Company is Suite 601, One Pacific Place, 88 Queensway, Hong Kong.
(b) The principal place of business of the Company is 31–33 Floor, Tower A, Ocean International Center, 56 Dongsihuanzhonglu, Chaoyang District, Beijing, PRC.
(c) The company secretary of the Company is Mr. CHUNG Kai Cheong. He is currently a fellow of each of the Hong Kong Institute of Certified Public Accountants, The Hong Kong Chartered Governance Institute and The Chartered Governance Institute.

– V-8 –

APPENDIX V

GENERAL INFORMATION

(d) The Company’s share registrar is Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.
(e) This circular is prepared in both English and Chinese. In the event of inconsistency, the English text shall prevail over its Chinese text.

– V-9 –

NOTICE OF EGM

==> picture [14 x 23] intentionally omitted <==

==> picture [10 x 20] intentionally omitted <==

==> picture [6 x 9] intentionally omitted <==

==> picture [9 x 16] intentionally omitted <==

==> picture [7 x 15] intentionally omitted <==

==> picture [8 x 18] intentionally omitted <==

==> picture [95 x 32] intentionally omitted <==

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the ‘‘EGM’’) of Sino-Ocean Group Holding Limited (the ‘‘Company’’) will be held at Meeting Room, 31st Floor, Tower A, Ocean International Center, 56 Dongsihuanzhonglu, Chaoyang District, Beijing, PRC on Friday, 10 December 2021 at 9: 30 a.m. for the purpose of considering and, if thought fit, passing the following resolutions:

ORDINARY RESOLUTIONS

‘‘THAT:
(a) the sale and purchase agreement dated 13 October 2021 (the ‘‘Sale and Purchase Agreement’’) (a copy of which has been produced to the EGM marked ‘‘A’’ and initialed by the chairman of the EGM for the purpose of identification) entered into among among Fast Fame Capital Investment Limited (迅榮創富有限公司) and Sino-Ocean Holding Group (China) Limited (遠洋控股集團（中國）有限公司) (as sellers), Jade Fortune Global Limited (翠運環球有限公司) and 北京遠睿企業管理諮詢有限公司 (Beijing Yuanrui Enterprise Management Consulting Co., Ltd.[] ) (as purchasers) and 北京天江通睿置業有限公司 (Beijing Skyriver CBD Property Co., Ltd.[] ) (the ‘‘Project Company’’) in relation to the disposal of (i) the entire equity interests in Super Goal Development Limited (崇高發展有限公司) (which in turn holds 99.9% of the equity interests in the Project Company); and (ii) the remaining 0.1% of the equity interests in the Project Company, and the transactions contemplated under the Sale and Purchase Agreement be and are hereby approved, confirmed and ratified; and
(b) any director of the Company be and is hereby authorised to do all such further acts and things, negotiate, approve, agree, sign, initial, ratify and/or execute such further documents and take all steps which may be in his/her opinion necessary, desirable or expedient to implement and/or give effect to the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder.’’
‘‘THAT:
(a) (i) the subscription agreement (the ‘‘Subscription Agreement’’) (a copy of which has been produced to the EGM marked ‘‘B’’ and initialed by the chairman of the EGM for the purpose of identification) between New Shine Global Limited (新耀環球有限公司) (the ‘‘Sponsor Limited Partner’’) and

– EGM-1 –

NOTICE OF EGM

Brilliant Day Limited (卓日有限公司) (the ‘‘General Partner’’) executed by the Sponsor Limited Partner on 13 October 2021 in relation to the investment in Sino-Ocean Prime Office Partners I LP (the ‘‘Partnership’’) by the Sponsor Limited Partner; and (ii) the amended and restated limited partnership agreement dated 13 October 2021 (the ‘‘Partnership Agreement’’) (a copy of which has been produced to the EGM marked ‘‘C’’ and initialed by the chairman of the EGM for the purpose of identification) entered into among the General Partner (for itself and acting as attorney for and on behalf of each of the limited partners of the Partnership other than Soaring City Limited (騰城有限公司), being the ‘‘Special Limited Partner’’) and the Special Limited Partner in relation to the Partnership, and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified; and

(b) any director of the Company be and is hereby authorised to do all such further acts and things, negotiate, approve, agree, sign, initial, ratify and/or execute such further documents and take all steps which may be in his/her opinion necessary, desirable or expedient to implement and/or give effect to the terms of the Subscription Agreement, the Partnership Agreement and the transactions contemplated thereunder.’’
(A) To re-elect Mr. ZHAO Peng as a non-executive director of the Company and to authorise the board of directors of the Company (the ‘‘Board’’) to fix his remuneration.
(B) To re-elect Mr. CHEN Ziyang as a non-executive director of the Company and to authorise the Board to fix his remuneration.
(C) To re-elect Mr. ZHAN Zhong as a non-executive director of the Company and to authorise the Board to fix his remuneration.

By order of the Board

Sino-Ocean Group Holding Limited LI Ming Chairman

Hong Kong, 24 November 2021

For identification purposes only

Notes:

(a) The register of members of the Company will be closed from Tuesday, 7 December 2021 to Friday, 10 December 2021 (both dates inclusive), during which period no transfer of shares in the Company can be registered. In order to be entitled to attend and vote at the EGM, all properly completed transfer forms accompanied by the relevant share certificates must be lodged with the Company’s share registrar, Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 4: 30 p.m. on Monday, 6 December 2021.

– EGM-2 –

NOTICE OF EGM

(b) Any shareholder of the Company entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote on his behalf. A proxy need not be a shareholder. To be valid, a form of proxy in the prescribed form together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power or authority, must be deposited with the Company’s share registrar, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time fixed for holding the meeting (i.e., not later than 9: 30 a.m. on Wednesday, 8 December 2021 (Hong Kong Time)), or any adjourned meeting.
(c) In relation to the proposed ordinary resolution item 3 above, Mr. ZHAO Peng, Mr. CHEN Ziyang and Mr. ZHAN Zhong will retire from their offices as the non-executive directors of the Company and, being eligible, will offer themselves for re-election at the EGM. The re-election of these directors will be individually voted on by the shareholders of the Company. Details of the retiring directors to be re-elected were set out in Appendix IV to the circular of the Company dated 24 November 2021.
(d) As at the date of this notice, the Board comprises of three executive directors, namely, Mr. LI Ming, Mr. WANG Honghui and Mr. CUI Hongjie; five non-executive directors, namely, Ms. HUANG Xiumei, Mr. ZHAO Peng, Mr. HOU Jun, Mr. CHEN Ziyang and Mr. ZHAN Zhong; and five independent non-executive directors, namely, Mr. HAN Xiaojing, Mr. SUEN Man Tak, Mr. WANG Zhifeng, Mr. JIN Qingjun and Ms. LAM Sin Lai Judy.

– EGM-3 –

AI assistant

Sino-Ocean Group Holding Limited — Proxy Solicitation & Information Statement 2021

50828_rns_2021-11-23_5c07ef49-adb3-47c1-acf0-476e7adc67eb.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

(1) MAJOR TRANSACTION IN RELATION TO DISPOSAL OF PROPERTY HOLDING COMPANIES,

(2) MAJOR TRANSACTION IN RELATION TO INVESTMENT IN A LIMITED PARTNERSHIP,

(3) RE-ELECTION OF RETIRING DIRECTORS,

AND

(4) NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial Adviser to the Company

PRECAUTIONARY MEASURES FOR THE EGM

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

per cent

(1) MAJOR TRANSACTION IN RELATION TO DISPOSAL OF PROPERTY HOLDING COMPANIES,

(3) RE-ELECTION OF RETIRING DIRECTORS,

AND

(4) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

LETTER FROM THE BOARD

THE DISPOSAL AND THE INVESTMENT

DISPOSAL OF PROPERTY HOLDING COMPANIES

Date

Parties

Subject Matter

Consideration

Offshore Consideration

Onshore Consideration

Payment

Offshore Consideration

LETTER FROM THE BOARD

Onshore Consideration

Conditions Precedent

Completion

Reciprocal Advances

Miscellaneous

INFORMATION ON THE TARGET COMPANY AND THE PROJECT COMPANY

LETTER FROM THE BOARD

FINANCIAL EFFECT OF THE DISPOSAL AND USE OF PROCEEDS

INVESTMENT IN A LIMITED PARTNERSHIP

Description of Partnership

General Partner

Limited Partners

Total Commitment

Term

Investment Strategy and Criteria

Investment Committee

Seed Projects

Distributions

Fees

LETTER FROM THE BOARD

Transfer of Partnership Interest

Put Option

Other arrangements in relation to Property A

LETTER FROM THE BOARD

INFORMATION ON THE SEED PROJECTS

Property A

Ocean Office Park

FINANCIAL EFFECT OF THE FORMATION OF THE PARTNERSHIP ON THE GROUP

INFORMATION ON THE PARTIES INVOLVED

REASONS FOR AND BENEFITS OF THE DISPOSAL, THE INVESTMENT AND THE CONTINUATION OF PROVISION OF THE ADVANCES

IMPLICATIONS UNDER THE LISTING RULES

RE-ELECTION OF RETIRING DIRECTORS

EGM AND VOTING AT THE EGM

BOOK CLOSURE FOR EGM ATTENDANCE

RECOMMENDATION

ADDITIONAL INFORMATION

1. FINANCIAL INFORMATION OF THE GROUP

2. INDEBTEDNESS

3. MATERIAL ADVERSE CHANGE

4. WORKING CAPITAL

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

6. RECONCILIATION STATEMENT OF THE VALUE OF THE LAND

I. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Unaudited Pro Forma Financial Information of the Group

Unaudited Pro Forma Financial Information of the Group (continued)

II. NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Sino-Ocean Group Holding Limited Proxy Solicitation & Information Statement 2021