Tianjin Port Development Holdings Limited — Proxy Solicitation & Information Statement 2021

Jun 27, 2021

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Tianjin Port Development Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 03382)

MAJOR AND CONNECTED TRANSACTIONS IN RELATION TO

THE DISPOSAL OF 34.99% EQUITY INTEREST IN TIANJIN PORT CONTAINER AND

THE ACQUISITION OF ALL THE ISSUED SHARES OF COSCO SHIPPING PORTS EUROASIA

AND NOTICE OF EXTRAORDINARY GENERAL MEETING

A letter from the Board is set out on pages 7 to 23 of this circular.

A notice convening the EGM to be held at 24th Floor, Admiralty Centre, Tower I, 18 Harcourt Road, Hong Kong on Friday, 13 August 2021 at 3:00 p.m. is set out on pages 134 to 135 of this circular. A form of proxy for use at the EGM (or any adjournment thereof) is also enclosed.

Whether or not you are able to attend the EGM, please complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time scheduled for holding the EGM (or any adjournment thereof). Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM (or any adjournment thereof) should you so wish.

PRECAUTIONARY MEASURES FOR THE EGM

Please refer to page 1 of this circular for precautionary measures to be implemented at the EGM to prevent the spreading of Novel Coronavirus (COVID-19), including:

1. Compulsory body temperature checks

2. Submission of health declaration form

3. Compulsory wearing of surgical face mask

4. No provision of refreshments or drinks and no distribution of corporate gifts or coupons

Any person who does not comply with the precautionary measures may be denied entry into the EGM venue, at the absolute discretion of the Company as permitted by the laws of Hong Kong. The Company also encourages Shareholders to consider appointing the chairman of the EGM as their proxy to vote on the relevant resolution at the EGM as an alternative to attending the EGM in person.

Hong Kong, 28 June 2021

CONTENTS

Page

PRECAUTIONARY MEASURES FOR THE EXTRAORDINARY
GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
APPENDIX I – FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . . . . . . . . . . . .	24
APPENDIX II – VALUATION REPORT ON TIANJIN PORT CONTAINER . . . . . . . . . . .	26
APPENDIX III – VALUATION REPORT ON COSCO SHIPPING
PORTS EUROASIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	83
APPENDIX IV – GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	129
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	134

– i –

PRECAUTIONARY MEASURES FOR THE EXTRAORDINARY GENERAL MEETING

In view of the present Novel Coronavirus (COVID-19) pandemic and recent requirements (if any) for prevention and control of its spreading, to safeguard the health and safety of Shareholders who might be attending the EGM in person, the Company will implement the following precautionary measures at the EGM:

• (i) Compulsory body temperature checks will be conducted on every attendee at the entrance of the EGM venue. Any person with a body temperature of over 37.3 degrees Celsius, or has flu-like symptoms or is otherwise unwell will be denied entry into the EGM venue.

• (ii) Submission of health declaration form by all attendees at the entrance of the EGM venue.

• (iii) Compulsory wearing of surgical face masks by all attendees prior to admission to the EGM venue and throughout the EGM.

• (iv) Maintenance of a safe distance between seats. The Company may limit the number of attendees at the EGM as may be necessary to avoid over-crowding.

• (v) No provision of refreshments or drinks and no distribution of corporate gifts or coupons.

To the extent permitted by the laws of Hong Kong, 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.

Subject to the development of the COVID-19 situation, the Company may implement additional precautionary measures as and when appropriate.

In the interest of all stakeholders’ health and safety and consistent with recent COVID-19 guidelines for prevention and control, the Company reminds all Shareholders that physical attendance at the EGM is not necessary for the purpose of exercising voting rights. As an alternative to attending the EGM in person, Shareholders are encouraged to consider appointing the chairman of the EGM as their proxy to vote on the relevant resolution at the EGM by submitting the form of proxy with voting instructions inserted.

The form of proxy for the EGM is enclosed with this circular. Alternatively, the form of proxy can be downloaded from the Company’s website at www.tianjinportdev.com and the website of the Stock Exchange at www.hkexnews.hk.

If you are not a registered Shareholder (if your Shares are held via banks, brokers, custodians or the Hong Kong Securities Clearing Company Limited), you should consult directly with your banks, brokers or custodians (as the case may be) to assist you in the appointment of proxy.

– 1 –

DEFINITIONS

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

• ‘‘Acquisition’’

the acquisition of all the issued shares of COSCO SHIPPING Ports Euroasia by the Designated Subsidiary from COSCO SHIPPING Ports as contemplated under the COSCO SHIPPING Ports Euroasia Agreement, and thereby indirectly acquiring 30% of the equity interest in Euroasia International;

• ‘‘Acquisition Completion Date’’

• the date on which the updating of the register of members and register of directors of COSCO SHIPPING Ports Euroasia in respect of the Acquisition is completed;

• ‘‘Acquisition Transitional Period’’

• the period from the day following the Valuation Reference Date (inclusive of that date) to the Acquisition Completion Date;

• ‘‘APM Terminals’’

• APM Terminals Tianjin Company Limited, a limited liability company incorporated in Hong Kong and an existing shareholder of Euroasia International; to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the ultimate beneficial owner of APM Terminals is A.P. MollerMaersk A/S, a Denmark-based listed company and an independent third party of the Company;

• ‘‘Board’’ the board of Directors;

• ‘‘China Merchants’’

• China Merchants International Terminals (Tianjin) Limited, a limited liability company incorporated in the British Virgin Islands and an existing shareholder of Tianjin Port Container; to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the ultimate beneficial owner of China Merchants is China Merchants Group Limited, a PRC state-owned enterprise and an independent third party of the Company;

• ‘‘China Shipping Terminal’’

• 中海碼頭發展有限公司 (China Shipping Terminal Development Co., Limited*), a limited liability company incorporated in the PRC and a wholly-owned subsidiary of COSCO SHIPPING Ports;

• ‘‘China Tong Cheng’’

• 中通誠資產評估有限公司 (China Tong Cheng Assets Appraisal Co., Ltd.*), an independent PRC asset valuer;

• ‘‘Company’’

• Tianjin Port Development Holdings Limited, a company incorporated in the Cayman Islands with limited liability and the shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 03382);

– 2 –

DEFINITIONS

• ‘‘connected person(s)’’

has the meaning ascribed to it under the Listing Rules;

• ‘‘COSCO SHIPPING Corporation’’

• 中 國 遠 洋海 運 集 團 有 限 公 司 ( Ch in a C O SCO SH I PP I NG Corporation Limited*), a PRC state-owned enterprise which is the ultimate controlling shareholder of COSCO SHIPPING Ports;

• ‘‘COSCO SHIPPING Ports’’

COSCO SHIPPING Ports Limited, a company incorporated in Bermuda with limited liability, the shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 01199);

• ‘‘COSCO SHIPPING Ports Euroasia’’

• COSCO SHIPPING Ports (Tianjin Euroasia) Limited, a limited liability company incorporated in the British Virgin Islands and a wholly-owned subsidiary of COSCO SHIPPING Ports as at the Latest Practicable Date;

• ‘‘COSCO SHIPPING Ports Euroasia Agreement’’

• the agreement dated 28 April 2021 entered into between COSCO SHIPPING Ports (as transferor) and Tianjin Port Co in relation to the Acquisition, details of which are set out in the section headed ‘‘COSCO SHIPPING Ports Euroasia Agreement’’ in the ‘‘Letter from the Board’’ of this circular;

• ‘‘COSCO SHIPPING Ports Tianjin’’

• COSCO SHIPPING Ports (Tianjin) Limited, a limited liability company incorporated in the British Virgin Islands and a whollyowned subsidiary of COSCO SHIPPING Ports;

• ‘‘Designated Subsidiary’’

an offshore subsidiary to be designated by Tianjin Port Co for acquiring all the issued shares of COSCO SHIPPING Ports Euroasia in accordance with the COSCO SHIPPING Ports Euroasia Agreement;

• ‘‘Director(s)’’ the director(s) of the Company;

• ‘‘Disposal’’

• the disposal of 34.99% of the equity interest in Tianjin Port Container by Tianjin Port Co to COSCO SHIPPING Ports Tianjin as contemplated under the Tianjin Port Container Agreement;

• ‘‘Disposal Completion Date’’

• the date on which the industrial and commercial registration for the change in respect of the Disposal has been completed by Tianjin Port Container, and the new business licence of Tianjin Port Container has been issued by the industrial and commercial registration authority;

• ‘‘Disposal Transitional Period’’

the period from the Valuation Reference Date to the Disposal Completion Date;

– 3 –

DEFINITIONS

• ‘‘EGM’’ or ‘‘Extraordinary the extraordinary general meeting of the Company to be convened General Meeting’’ and held to consider and, if thought fit, to approve the Tianjin Port Container Agreement, the Disposal, the COSCO SHIPPING Ports Euroasia Agreement and the Acquisition;

• ‘‘Euroasia International’’ 天津港歐亞國際集裝箱碼頭有限公司 (Tianjin Port Euroasia International Container Terminal Co., Ltd.*), a limited liability company incorporated in the PRC which is held as to 40% by the Group as at the Latest Practicable Date;

• ‘‘Group’’ the Company and its subsidiaries;

• ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong;

• ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC;

• ‘‘Latest Practicable Date’’ 25 June 2021, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein;

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange;

• ‘‘PRC’’ the People’s Republic of China, which for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan;

• ‘‘Repayment Amount’’ the related accounts payables of COSCO SHIPPING Ports Euroasia in the aggregate amount of US$41,816,941.77 as at 31 December 2020, as set out in the audited financial statements of COSCO SHIPPING Ports Euroasia as at 31 December 2020;

• ‘‘RMB’’ Renminbi, the lawful currency of the PRC;

• ‘‘SFO’’ Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong);

• ‘‘Share(s)’’ ordinary share(s) of HK$0.10 each in the share capital of the Company;

• ‘‘Shareholder(s)’’ the shareholder(s) of the Company;

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited;

– 4 –

DEFINITIONS

• ‘‘substantial shareholder’’

• ‘‘Tianjin Port Co’’

• ‘‘Tianjin Port Container’’

• ‘‘Tianjin Port Container Agreement’’

• ‘‘Tianjin Port Group’’

• ‘‘Tianjin SASAC’’

• ‘‘Tianjin Zhonglian’’

• ‘‘US Dollars’’ or ‘‘US$’’

• ‘‘Valuation Reference Date’’

• ‘‘Valuation Report on COSCO SHIPPING Ports Euroasia’’

has the meaning ascribed to it under the Listing Rules;

• 天津港股份有限公司 (Tianjin Port Holdings Co., Ltd.), a limited liability company incorporated in the PRC and the shares of which are listed on the Shanghai Stock Exchange (Stock Code: 600717). As at the Latest Practicable Date, approximately 56.81% of its equity interest is indirectly held by the Company; 天津港集裝箱碼頭有限公司 (Tianjin Port Container Terminal Co., Ltd.), a limited liability company incorporated in the PRC, which is held as to 76.68% by the Group as at the Latest Practicable Date;

• the agreement dated 26 February 2021 entered into between Tianjin Port Co (as transferor), COSCO SHIPPING Ports Tianjin (as transferee) and COSCO SHIPPING Ports in relation to the Disposal, details of which are set out in the section headed ‘‘Tianjin Port Container Agreement’’ in the ‘‘Letter from the Board’’ of this circular;

• 天津港（集團）有限公司 (Tianjin Port (Group) Co., Ltd.*), an entity reorganised as a wholly state-owned enterprise in the PRC on 29 July 2004 and holding the business owned and operated by the former government regulatory body of the port of Tianjin; and the indirect holder of 53.5% of the issued share capital of the Company as at the Latest Practicable Date;

• the State-owned Assets Supervision and Administration Commission of Tianjin Municipal People’s Government;

• 天津中聯資產評估有限責任公司 (Tianjin Zhonglian Assets Appraisal Co., Ltd.*), an independent PRC asset valuer;

• United States dollars, the lawful currency of the United States of America;

• 31 December 2020, being the reference date for the valuation of the market value of the entire shareholders’ equity in Tianjin Port Container and in COSCO SHIPPING Ports Euroasia respectively;

• the valuation report dated 15 June 2021 issued by China Tong Cheng in relation to the valuation of the market value of the entire shareholders’ equity in COSCO SHIPPING Ports Euroasia as at the Valuation Reference Date in accordance with the relevant PRC laws, regulations and valuation standards, the text of which is set out in Appendix III to this circular;

– 5 –

DEFINITIONS

‘‘Valuation Report on the valuation report dated 15 April 2021 issued by Tianjin Tianjin Port Container’’ Zhonglian in relation to the valuation of the market value of the entire shareholders’ equity in Tianjin Port Container as at the Valuation Reference Date in accordance with the relevant PRC laws, regulations and valuation standards, the text of which is set out in Appendix II to this circular; and ‘‘%’’ per cent.

• For identification purposes only

Unless otherwise stated, in the event of any inconsistency, the English language text of this circular shall prevail over the Chinese language text.

– 6 –

LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03382)

Executive Directors: CHU Bin (Chairman) LUO Xunjie (Managing Director) SUN Bin XUE Xiaoli SHI Jing

Independent Non-executive Directors: Japhet Sebastian LAW CHENG Chi Pang, Leslie ZHANG Weidong

Registered Office: Windward 3, Regatta Office Park PO Box 1350 Grand Cayman KY1-1108 Cayman Islands

Principal Place of Business in Hong Kong: Suite 3904-3907, 39/F. Tower Two, Times Square 1 Matheson Street Causeway Bay, Hong Kong

28 June 2021

To the Shareholders

Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTIONS IN RELATION TO

THE DISPOSAL OF 34.99% EQUITY INTEREST IN TIANJIN PORT CONTAINER AND

THE ACQUISITION OF ALL THE ISSUED SHARES OF COSCO SHIPPING PORTS EUROASIA AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to (i) the announcement of the Company dated 26 February 2021 in relation to the Disposal and (ii) the announcement of the Company dated 28 April 2021 in relation to the Acquisition.

The purpose of this circular is to provide you with:

• (a) details of the terms of the Tianjin Port Container Agreement and the Disposal;

• (b) details of the terms of the COSCO SHIPPING Ports Euroasia Agreement and the Acquisition; and

• (c) a notice of EGM.

– 7 –

LETTER FROM THE BOARD

DISPOSAL OF 34.99% EQUITY INTEREST IN TIANJIN PORT CONTAINER

On 26 February 2021, Tianjin Port Co, a non wholly-owned subsidiary of the Group, entered into the Tianjin Port Container Agreement with COSCO SHIPPING Ports Tianjin and COSCO SHIPPING Ports, pursuant to which Tianjin Port Co agreed to transfer, and COSCO SHIPPING Ports Tianjin agreed to acquire, 34.99% of the equity interest in Tianjin Port Container.

1. Tianjin Port Container Agreement

Date

26 February 2021

Parties

Tianjin Port Co (as transferor) COSCO SHIPPING Ports Tianjin (as transferee) COSCO SHIPPING Ports

Subject matter

Tianjin Port Co agreed to transfer, and COSCO SHIPPING Ports Tianjin agreed to acquire, 34.99% of the equity interest in Tianjin Port Container.

Consideration and payment terms

The initial consideration is RMB1,348,371,228.15 (subject to adjustment as described below) which was arrived at after arm’s length negotiations between the parties with reference to the preliminary appraised value of RMB3,853,590,249.08 determined by Tianjin Zhonglian. Pursuant to the Valuation Report on Tianjin Port Container, the appraised value is RMB3,855,032,486.08. Tianjin Zhonglian adopted the asset-based approach for the valuation of the market value of the entire shareholders’ equity in Tianjin Port Container as at the Valuation Reference Date.

The board of directors of Tianjin Port Container had determined the profit distribution plan and made a distribution of the undistributed profit of Tianjin Port Container as at 31 December 2020 in the amount of RMB289,127,303.09. The consideration for the Disposal shall be adjusted by deducting therefrom the amount equivalent to 34.99% of the actual profit distribution determined under the profit distribution plan, being RMB101,165,643.35.

Based on the above, it is expected that the adjusted consideration shall be RMB1,247,710,223.53.

The Valuation Report on Tianjin Port Container is subject to filing with Tianjin SASAC (or its authorised department), and the final consideration for the Disposal shall be determined with reference to the final appraised value in the final Valuation Report on Tianjin Port Container as filed with Tianjin SASAC (or its authorised department). A supplemental agreement shall be entered into between Tianjin Port Co and COSCO SHIPPING Ports Tianjin to confirm the amount of the final consideration of the Disposal within 5 business days after the completion of the filing of the Valuation Report on Tianjin Port Container.

– 8 –

LETTER FROM THE BOARD

The adjusted final consideration shall be paid by COSCO SHIPPING Ports Tianjin to Tianjin Port Co in one lump sum in cash within 15 business days from the Disposal Completion Date.

Effectiveness of the Tianjin Port Container Agreement

The Tianjin Port Container Agreement shall become effective upon the fulfilment of the following conditions:

• (i) the respective legal representatives or authorised representatives of the parties having signed the Tianjin Port Container Agreement and having affixed their official stamps thereto;

• (ii) the parties having completed the relevant internal and external approval procedures for the signing and performance of the Tianjin Port Container Agreement in accordance with their respective articles of association in force and the applicable laws;

• (iii) the Company having complied with all applicable laws and regulations that may be required to be complied with in relation to the Disposal and the related matters (including compliance with applicable provisions under the Listing Rules);

• (iv) China Merchants and China Shipping Terminal having agreed in writing to the Disposal and having waived or are deemed to have waived their right of first refusal;

• (v) Tianjin Port Container having completed the relevant internal approval procedures for the Disposal in accordance with its articles of association in force and the applicable laws;

• (vi) the Disposal having been approved by the competent state-owned assets authority or its authorised department;

• (vii) the signing of the COSCO SHIPPING Ports Euroasia Agreement having been completed;

• (viii) the supplemental agreement in respect of the adjusted final consideration of the Disposal having been entered into by Tianjin Port Co and COSCO SHIPPING Ports Tianjin; and

• (ix) other necessary prior approval and registration procedures (if any) in respect of the Disposal having been obtained.

As at the Latest Practicable Date, the conditions under paragraphs (i) and (vii) above have been fulfilled.

Conditions precedent to completion

The implementation of the Disposal is conditional upon the fulfilment or waiver (as applicable) of the following conditions precedent:

• (i) the Tianjin Port Container Agreement having become effective;

• (ii) the statements, representations, warranties and undertakings of the parties in the Tianjin Port Container Agreement are true, accurate and complete at the time they are made, and remaining true, accurate and complete as of the Disposal Completion Date; the parties having actually fulfilled relevant obligations (if any) under the Tianjin Port Container Agreement to be performed on and before the Disposal Completion Date;

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LETTER FROM THE BOARD

• (iii) the anti-monopoly law enforcement agency having approved the concentration of business operators involved in the Disposal;

• (iv) there having been no changes with material adverse impact on Tianjin Port Container during the Disposal Transitional Period;

• (v) Tianjin Port Co, COSCO SHIPPING Ports Tianjin, China Shipping Terminal and China Merchants having duly entered into Tianjin Port Container’s joint venture contract, articles of association and relevant documents required for the industrial and commercial registration for the change in respect of the Disposal; the arrangement under the joint venture contract and the articles of association being able to facilitate the consolidation of the results of Tianjin Port Container into the financial statements of COSCO SHIPPING Ports;

• (vi) Tianjin Port Co having made appropriate arrangements for the resignation of the director(s) of Tianjin Port Container nominated by it and the senior management personnel of Tianjin Port Container appointed by it in accordance with the corporate governance structure in the Tianjin Port Container’s joint venture contract and articles of association following the completion of the Disposal, and such resignations shall be completed before the Disposal Completion Date; each of Tianjin Port Co, COSCO SHIPPING Ports Tianjin, China Shipping Terminal and China Merchants having duly executed the relevant decision-making documents in relation to the nomination of directors and the appointment of senior management personnel of Tianjin Port Container following the Disposal, and the documents required for the industrial and commercial registration for the change, such nomination and appointment shall be completed before the Disposal Completion Date; and

• (vii) Tianjin Port Container having performed appropriate notification obligations to banks and other financial institutions, bondholders, or other entities entitled to notification, regarding the Disposal; and the written consent (if applicable) having been obtained in respect of the Disposal in accordance with the agreements between Tianjin Port Container and the relevant creditors and notified entities.

The conditions precedent under paragraph (i) above (other than those relating to approvals by governmental bodies which cannot be waived) and under paragraph (ii) above may be waived by agreement of the parties. The conditions precedent under paragraphs (iv) to (vii) above may be waived by COSCO SHIPPING Ports Tianjin or COSCO SHIPPING Ports. The condition precedent under paragraph (iii) above cannot be waived.

As at the Latest Practicable Date, the condition precedent under paragraph (iii) above has been fulfilled.

In addition to the above conditions precedent, the Disposal shall only be implemented as and when all the conditions precedent of the Acquisition under the COSCO SHIPPING Ports Euroasia Agreement (as set out in paragraphs (i) to (vi) under the section headed ‘‘Acquisition of All the Issued Shares of COSCO SHIPPING Ports Euroasia – COSCO SHIPPING Ports Euroasia Agreement – Conditions precedent to completion’’ below) have been fulfilled or waived (as applicable). The completion of the Disposal and the completion of the Acquisition shall take place on the same date.

– 10 –

LETTER FROM THE BOARD

The parties shall use their best efforts and take all necessary actions to procure the fulfilment of the conditions precedent above and endeavour to complete the Disposal before 30 June 2021. If the Disposal is not completed before 30 September 2021, the parties should negotiate in good faith and actively seek reasonable and feasible solutions.

Completion

Within 10 business days after the fulfilment or waiver (as applicable) of all the conditions precedent as set out under ‘‘Conditions precedent to completion’’ above and the fulfilment or waiver (as applicable) of the conditions precedent of the Acquisition as set out under the section headed ‘‘Acquisition of All the Issued Shares of COSCO SHIPPING Ports Euroasia – COSCO SHIPPING Ports Euroasia Agreement – Conditions precedent to completion’’ below, or at such other time as agreed in writing by Tianjin Port Co and COSCO SHIPPING Ports Tianjin, Tianjin Port Co and COSCO SHIPPING Ports Tianjin shall actively cooperate with Tianjin Port Container to complete the industrial and commercial registration procedures for the change in respect of the Disposal.

Guarantee

COSCO SHIPPING Ports is jointly and severally liable to Tianjin Port Co for all obligations, declarations, warranties, undertakings and responsibilities of COSCO SHIPPING Ports Tianjin under the Tianjin Port Container Agreement and the supplemental agreement.

2. Shareholding Structure of Tianjin Port Container

The shareholding structure of Tianjin Port Container as at the Latest Practicable Date and immediately following the completion of the Disposal is as follows:

Tianjin Port Co COSCO SHIPPING Ports Tianjin China Shipping Terminal China Merchants Total	As at the Latest Practicable Date 76.68% 10.01% 6.00% 7.31% 100.00%	Immediately following the completion of the Disposal 41.69% 45.00% 6.00% 7.31%
		100.00%

3. Information on Tianjin Port Container

Tianjin Port Container is a limited liability company incorporated in the PRC with a registered capital of RMB2,408,312,700 and is principally engaged in containerised cargo handling business. As at the Latest Practicable Date, Tianjin Port Co holds 76.68% of the equity interest in Tianjin Port Container.

– 11 –

LETTER FROM THE BOARD

Upon completion of the Disposal, the Group will hold 41.69% of the equity interest in Tianjin Port Container, and Tianjin Port Container will cease to be a subsidiary of the Group, and will become an associate of the Group.

According to the financial statements of Tianjin Port Container prepared under the China Accounting Standards for Business Enterprises, the key financial information of Tianjin Port Container for the two years ended 31 December 2019 and 2020 and the three months ended 31 March 2021 are set out below:

	For the three
	months ended	For the year ended
	31 March	31 December
	2021	2020	2019
	RMB million	RMB million	RMB million
	(unaudited)	(audited)	(audited)
Revenue	312.15	1,380.47	899.18
Net profit before tax	56.85	407.23	174.62
Net profit after tax	42.64	304.34	131.31
	As at
	31 March	As at 31	December
	2021	2020	2019
	RMB million	RMB million	RMB million
	(unaudited)	(audited)	(audited)
Total assets	4,401.43	4,433.44	3,879.53
– Fixed assets, construction in progress and
intangible assets	3,652.19	3,595.41	3,176.49
Total liabilities	874.43	949.23	587.97
– Borrowings	628.00	609.00	368.00
Net assets	3,527.00	3,484.21	3,291.56

On 30 June 2019, Tianjin Port Container, 天津東方海陸集裝箱碼頭有限公司 (Tianjin Orient Container Terminals Co., Ltd.) (‘‘Tianjin Orient’’) and 天津五洲國際集裝箱碼頭有限公司 (Tianjin Five Continents International Container Terminal Co., Ltd.) (‘‘Tianjin Five Continents’’) (all were subsidiaries of the Company at the relevant time) entered into a merger agreement with Tianjin Port Co, COSCO SHIPPING Ports Tianjin, China Shipping Terminal and China Merchants, pursuant to which Tianjin Port Container would, as the surviving party, absorb and merge with Tianjin Orient and Tianjin Five Continents, and Tianjin Orient and Tianjin Five Continents would be dissolved (the ‘‘Merger’’). The Merger was completed in August 2019. Details of the Merger have been set out in the announcement of the Company dated 1 July 2019.

– 12 –

LETTER FROM THE BOARD

The financial results of Tianjin Port Container for the year ended 31 December 2019 did not include those of Tianjin Orient and Tianjin Five Continents for the period from 1 January 2019 to the merger date. Set out below are the unaudited financial results of Tianjin Orient and Tianjin Five Continents for the period from 1 January 2019 to the merger date:

		Tianjin Five
	Tianjin Orient	Continents
	RMB million	RMB million
	(unaudited)	(unaudited)
Revenue	250.36	313.36
Net profit before tax	77.50	66.53
Net profit after tax	58.13	49.90

The Board has reviewed the methodology of, and the bases and assumptions adopted for, the valuation of the market value of the entire shareholders’ equity in Tianjin Port Container as stated in the Valuation Report on Tianjin Port Container. Based on the review of the Valuation Report on Tianjin Port Container and having considered (i) that the valuation was conducted by Tianjin Zhonglian in compliance with the relevant PRC laws, regulations and valuation standards; (ii) the reasons for the adoption of the asset-based approach, the methodology and assumptions used for the valuation which are commonly adopted for valuating companies with similar results and of similar nature; and (iii) the independence, qualification and experience of Tianjin Zhonglian, the Board is of the view that (1) the valuation methods and major assumptions adopted by Tianjin Zhonglian are fair and reasonable, and (2) there is not expected to be a material adjustment on the final appraised value in the Valuation Report on Tianjin Port Container as filed with the Tianjin SASAC (or its authorised department).

As at the Latest Practicable Date, the Directors were not aware of any material change in the business operation and financial performance of Tianjin Port Container since the Valuation Reference Date.

ACQUISITION OF ALL THE ISSUED SHARES OF COSCO SHIPPING PORTS EUROASIA

On 28 April 2021, Tianjin Port Co, a non wholly-owned subsidiary of the Group, entered into the COSCO SHIPPING Ports Euroasia Agreement with COSCO SHIPPING Ports, pursuant to which Tianjin Port Co agreed to procure the Designated Subsidiary to acquire, and COSCO SHIPPING Ports agreed to transfer, all the issued shares of COSCO SHIPPING Ports Euroasia.

1. COSCO SHIPPING PORTS EUROASIA AGREEMENT

Date

28 April 2021

Parties

Tianjin Port Co COSCO SHIPPING Ports (as transferor)

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LETTER FROM THE BOARD

Subject matter

Tianjin Port Co agreed to procure the Designated Subsidiary to acquire, and COSCO SHIPPING Ports agreed to transfer, all the issued shares of COSCO SHIPPING Ports Euroasia.

Tianjin Port Co undertakes to use its best endeavour to identify the Designated Subsidiary as soon as possible, and will within 5 business days of the Designated Subsidiary having been identified, procure the Designated Subsidiary to enter into a supplemental agreement with COSCO SHIPPING Ports to be added as the transferee to the COSCO SHIPPING Ports Euroasia Agreement.

Consideration and payment terms

The initial consideration is RMB269,619,801.39 (subject to adjustment as described below) which was arrived at after arm’s length negotiations between the parties with reference to the preliminary appraised value of RMB269,619,801.39 determined by China Tong Cheng. Pursuant to the Valuation Report on COSCO SHIPPING Ports Euroasia, the appraised value is RMB269,619,801.39. China Tong Cheng adopted the asset-based approach for the valuation of the market value of the entire shareholders’ equity in COSCO SHIPPING Ports Euroasia as at the Valuation Reference Date.

The Valuation Report on COSCO SHIPPING Ports Euroasia is subject to filing by COSCO SHIPPING Corporation, and the final consideration for the Acquisition shall be determined with reference to the final appraised value in the final Valuation Report on COSCO SHIPPING Ports Euroasia as filed by COSCO SHIPPING Corporation. The final consideration shall be confirmed in the supplemental agreement to be entered into between the Designated Subsidiary and COSCO SHIPPING Ports within 5 business days of completion of the filing procedures and Tianjin Port Co having identified the Designated Subsidiary.

The final consideration shall be paid by the Designated Subsidiary to COSCO SHIPPING Ports in one lump sum within 15 business days after the Acquisition Completion Date. The consideration shall be settled in US Dollars, and the exchange rate shall be the central parity rate of RMB against US Dollars on the date of payment as published by the People’s Bank of China. Tianjin Port Co shall procure and guarantee the punctual performance of the payment obligation in full of the Designated Subsidiary under the COSCO SHIPPING Ports Euroasia Agreement.

The consideration will be funded by internal resources of the Group.

Repayment Amount

COSCO SHIPPING Ports shall assist and procure COSCO SHIPPING Ports Euroasia to consolidate the Repayment Amount before the Acquisition Completion Date, such that any Repayment Amount payable to those other than COSCO SHIPPING Ports will be consolidated to be payable to COSCO SHIPPING Ports.

Tianjin Port Co and the Designated Subsidiary will procure COSCO SHIPPING Ports Euroasia to, within 30 business days from (i) the Acquisition Completion Date or (ii) the date of completing the consolidation of the Repayment Amount (whichever is later), pay the Repayment Amount to COSCO SHIPPING Ports in the amount of not exceeding US$41,816,941.77.

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LETTER FROM THE BOARD

Effectiveness of the COSCO SHIPPING Ports Euroasia Agreement

The COSCO SHIPPING Ports Euroasia Agreement shall become effective upon the fulfilment of the following conditions:

• (i) the respective legal representatives or authorised representatives of the parties having signed the COSCO SHIPPING Ports Euroasia Agreement and having affixed their official stamp thereto;

• (ii) the Designated Subsidiary having entered into a supplemental agreement with COSCO SHIPPING Ports for the adding of the Designated Subsidiary to the COSCO SHIPPING Ports Euroasia Agreement as the transferee, and (if required) to confirm the final consideration for the Acquisition;

• (iii) the parties having completed the relevant internal and external approval procedures for the signing and performance of the COSCO SHIPPING Ports Euroasia Agreement in accordance with their respective articles of association in force and the applicable laws;

• (iv) the Company having complied with all applicable laws and regulations that may be required to be complied with in relation to the Acquisition and the related matters (including obtaining the necessary shareholders’ approval for the Acquisition in accordance with the applicable provisions under the Listing Rules);

• (v) Tianjin Port Group and APM Terminals having agreed in writing to the Acquisition and having waived or are deemed to have waived their right of first refusal;

• (vi) the Acquisition having been approved by or filed with the competent PRC authority for overseas investment management;

• (vii) the Tianjin Port Container Agreement having been entered into and signed; and

• (viii) other necessary prior approval and registration procedures (if any) in respect of the Acquisition having been obtained.

As at the Latest Practicable Date, the conditions under paragraphs (i), (v) and (vii) above have been fulfilled.

Conditions precedent to completion

The implementation of the Acquisition is conditional upon the fulfilment or waiver (as applicable) of the following conditions precedent:

• (i) the COSCO SHIPPING Ports Euroasia Agreement having become effective;

• (ii) the representations and warranties of the parties in the COSCO SHIPPING Ports Euroasia Agreement remaining true, accurate and complete in all aspects, and are true, accurate and complete as of the Acquisition Completion Date; the parties having actually fulfilled relevant obligations (if any) under the COSCO SHIPPING Ports Euroasia Agreement to be performed on and before the Acquisition Completion Date;

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LETTER FROM THE BOARD

• (iii) the Anti-Monopoly Bureau of the State Administration for Market Regulation of the PRC having completed the concentration of business operators/anti-monopoly review in respect of the Acquisition, and not having prohibited the Acquisition;

• (iv) there having been no changes with material adverse impact on COSCO SHIPPING Ports Euroasia during the Acquisition Transitional Period;

• (v) COSCO SHIPPING Ports having made appropriate arrangements for the resignation of the director(s) of COSCO SHIPPING Ports Euroasia nominated by it, the senior management personnel of COSCO SHIPPING Ports Euroasia appointed by it, and the director(s) and the senior management personnel appointed by COSCO SHIPPING Ports Euroasia to Euroasia International (if any), such resignations shall be effective on the Acquisition Completion Date; and

• (vi) COSCO SHIPPING Ports Euroasia having performed appropriate notification obligations to banks and other financial institutions, bondholders, or other entities entitled to notification, regarding the Acquisition; and the written consent (if applicable) from the relevant creditors and notified entities having been obtained in respect of the Acquisition.

The conditions precedent under paragraph (i) above (other than those relating to approvals by government bodies) and under paragraph (ii) above may be waived by agreement of both parties. The conditions precedent under paragraphs (iv) to (vi) above may be waived by the Designated Subsidiary. The condition precedent under paragraph (iii) above cannot be waived.

As at the Latest Practicable Date, none of the conditions precedent above have been fulfilled or waived (as the case may be).

In addition to the above conditions precedent, the Acquisition shall only be implemented as and when all the conditions precedent of the Disposal under the Tianjin Port Container Agreement (as set out in paragraphs (i) to (vii) under the section headed ‘‘Disposal of 34.99% Equity Interest in Tianjin Port Container – Tianjin Port Container Agreement – Conditions precedent to completion’’ above) have been fulfilled or waived (as applicable). The completion of the Acquisition and the completion of the Disposal shall take place on the same date.

The parties shall use their best efforts and take all necessary actions to procure the fulfilment of the conditions precedent above and endeavour to complete the Acquisition before 30 June 2021. If the Acquisition is not completed before 30 September 2021, the parties should negotiate in good faith and actively seek reasonable and feasible solutions.

Completion

Within 10 business days of fulfilment or waiver (as applicable) of all the conditions precedent as set out under ‘‘Conditions precedent to completion’’ above and the fulfilment or waiver (as applicable) of the conditions precedent of the Disposal as set out under the section headed ‘‘Disposal of 34.99% Equity Interest in Tianjin Port Container – Tianjin Port Container Agreement – Conditions precedent to completion’’ above, the register of members and register of directors of COSCO SHIPPING Ports Euroasia shall be updated in respect of the Acquisition in accordance with the progress of the industrial and commercial registration procedures for the change in respect of the Disposal, such that the Acquisition Completion Date would be the same as the Disposal Completion Date.

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LETTER FROM THE BOARD

Guarantee

Tianjin Port Co is jointly and severally liable to COSCO SHIPPING Ports for all obligations, declarations, warranties, undertakings and responsibilities of the Designated Subsidiary under the COSCO SHIPPING Ports Euroasia Agreement and the supplemental agreement.

2. Information on COSCO SHIPPING Ports Euroasia and Euroasia International

COSCO SHIPPING Ports Euroasia is a limited liability company incorporated in the British Virgin Islands with issued shares of US$1 and is principally engaged in investment holding. As at the Latest Practicable Date, COSCO SHIPPING Ports Euroasia is a wholly-owned subsidiary of COSCO SHIPPING Ports.

COSCO SHIPPING Ports Euroasia holds 30% of the equity interest in Euroasia International. Euroasia International is a limited liability company incorporated in the PRC with a registered capital of RMB1.26 billion and is principally engaged in containerised cargo handling business. As at the Latest Practicable Date, Euroasia International is held as to 40% by the Group, 25% by Tianjin Port Group and 5% by APM Terminals.

Based on the information provided by COSCO SHIPPING Ports, the original investment cost of COSCO SHIPPING Ports Euroasia was US$1, whereas the initial capital contribution by COSCO SHIPPING Ports Euroasia made into Euroasia International was RMB378,000,000.

Upon completion of the Acquisition, COSCO SHIPPING Ports Euroasia will become a whollyowned subsidiary of the Group, the Group’s equity interest in Euroasia International will increase from 40% to 70%, and Euroasia International will become a subsidiary of the Group.

According to the financial statements of COSCO SHIPPING Ports Euroasia prepared under the Hong Kong Financial Reporting Standards, the key financial information of COSCO SHIPPING Ports Euroasia for the two years ended 31 December 2019 and 2020 and the three months ended 31 March 2021 are set out below:

	For the three
	months ended	For the year	ended
	31 March	31 December
	2021	2020	2019
	US$ million	US$ million	US$ million
	(unaudited)	(audited)	(unaudited)
Revenue	0	1.29	1.48
Net profit before tax	0	1.63	1.21
Net profit after tax	0	1.50	1.07

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LETTER FROM THE BOARD

	As at
	31 March	As at 31	December
	2021	2020	2019
	US$ million	US$ million	US$ million
	(unaudited)	(audited)	(unaudited)
Total assets	51.09	51.09	51.09
– Investment in a joint venture	51.08	51.08	51.08
Total liabilities	41.82	41.82	43.32
Net assets	9.27	9.27	7.77

According to the financial statements of Euroasia International prepared under the China Accounting Standards for Business Enterprises, the key financial information of Euroasia International for the two years ended 31 December 2019 and 2020 and the three months ended 31 March 2021 are set out below:

	For the three
	months ended	For the year ended
	31 March	31 December
	2021	2020	2019
	RMB million	RMB million	RMB million
	(unaudited)	(audited)	(audited)
Revenue	107.52	471.41	432.45
Net profit before tax	15.70	94.56	68.38
Net profit after tax	11.77	70.59	50.85
	As at
	31 March	As at 31	December
	2021	2020	2019
	RMB million	RMB million	RMB million
	(unaudited)	(audited)	(audited)
Total assets	2,166.91	2,137.33	2,195.81
– Fixed assets, construction in progress and
intangible assets	1,937.80	1,964.67	2,066.55
Total liabilities	672.42	655.32	753.88
– Borrowings	611.00	611.00	704.80
Net assets	1,494.49	1,482.01	1,441.93

– 18 –

LETTER FROM THE BOARD

The Board has reviewed the methodology of, and the bases and assumptions adopted for, the valuation of the market value of the entire shareholders’ equity in COSCO SHIPPING Ports Euroasia as stated in the Valuation Report on COSCO SHIPPING Ports Euroasia. Based on the review of the Valuation Report on COSCO SHIPPING Ports Euroasia and having considered (i) that the valuation was conducted by China Tong Cheng in compliance with the relevant PRC laws, regulations and valuation standards; (ii) the reasons for the adoption of the asset-based approach, the methodology and assumptions used for the valuation which are commonly adopted for valuating companies with similar results and of similar nature; and (iii) the independence, qualification and experience of China Tong Cheng, the Board is of the view that (1) the valuation methods and major assumptions adopted by China Tong Cheng are fair and reasonable, and (2) there is not expected to be a material adjustment on the final appraised value in the Valuation Report on COSCO SHIPPING Ports Euroasia as filed by COSCO SHIPPING Corporation.

As at the Latest Practicable Date, the Directors were not aware of any material change in the business operation and financial performance of COSCO SHIPPING Ports Euroasia and Euroasia International since the Valuation Reference Date.

FINANCIAL EFFECT OF THE DISPOSAL AND THE ACQUISITION

It is estimated that the Group will record an unaudited gain before tax (after deducting non-controlling interests) from the Disposal of approximately RMB88.40 million, which is calculated using (i) approximately RMB155.60 million, being the difference between the expected consideration of the Disposal (i.e. RMB1,247,710,223.53) and 34.99% of the audited net asset value of Tianjin Port Container as at 31 December 2020 as adjusted by the distribution of undistributed profit of RMB289,127,303.09 and elimination of unrealised profit of approximately RMB73.87 million on property, plant and equipment of Tianjin Port Container transferred by the Group (being approximately RMB1,092.11 million), and deducting therefrom (ii) approximately RMB67.20 million, being the proportion of the said gain attributable to the 43.19% non-controlling interest of Tianjin Port Co (which is the transferor of the Disposal as well as a non wholly-owned subsidiary held as to 56.81% by the Group).

The actual gain of the Group arising from the Disposal is subject to audit, and can only be determined on or after the Disposal Completion Date.

Upon completion of the Disposal, the Group’s equity interest in Tianjin Port Container will be reduced from 76.68% to 41.69% and Tianjin Port Container will cease to be a subsidiary of the Group. The financial results, assets and liabilities of Tianjin Port Container will no longer be consolidated into the consolidated financial statements of the Group, and the Group’s remaining interest in Tianjin Port Container will be equity accounted for in the Group’s consolidated financial statements.

Upon completion of the Acquisition, Euroasia International will no longer be equity accounted for in the Group’s consolidated financial statements. It will become a 70% owned subsidiary of the Group, and its financial results, assets and liabilities will be consolidated into the Group’s consolidated financial statements.

The Group intends to use the proceeds from the Disposal as general working capital of the Group and/or funds for other potential investment opportunities in the future.

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LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE DISPOSAL AND THE ACQUISITION

The implementation of the Disposal and the Acquisition can, firstly, contribute to developing the port of Tianjin into the northern international shipping hub and accelerating the establishment of a world-class green and intelligent hub port. Secondly, it helps the development of new routes and the incremental expansion of key routes, the construction of a convenient, efficient, and low-cost container logistics service system, and the realisation of the leapfrog development of the container handling business of the Group. Thirdly, it is conducive to promoting cooperation with COSCO SHIPPING Ports in regional and overseas investment, and expanding the space for development.

Tianjin Port Container and Euroasia International are both principally engaged in containerised cargo handling business, and are the joint venture projects of the Group with COSCO SHIPPING Ports (together with other shareholders with a minority stake). While the terminals of Tianjin Port Container and Euroasia International are located in the Beijiang Port Area at the port of Tianjin and are close to each other, each of them operates different shipping routes and serves a different clientele. The Disposal together with the Acquisition allow the Group and COSCO SHIPPING Ports to rearrange the equity stakes at the affiliates level to optimise our operations in the Beijiang Port Area at the port of Tianjin.

Following completion of the Disposal and the Acquisition, the Group and COSCO SHIPPING Ports will cooperate closely to increase the efforts of market development and to improve the efficiency of the operation of the ships at the port and the stem-branch connections of COSCO SHIPPING Ports. With an increased stake in Tianjin Port Container, COSCO SHIPPING Ports promises to actively coordinate with its parent company, COSCO SHIPPING Corporation, to further optimise its shipping route structure, to increase the frequency of its trunk routes to the port of Tianjin. COSCO SHIPPING Ports will coordinate with COSCO SHIPPING Corporation such that starting from 2020, the average annual container throughput growth in respect of COSCO SHIPPING Corporation’s own container throughput at the port of Tianjin will be at a level of not less than the average container throughput growth of the port of Tianjin and strive for COSCO SHIPPING Corporation to, on the basis of its container throughput in 2020, achieve an annual container throughput growth rate of not less than 15% for 5 years, so as to ensure that Tianjin Port Container can continue to operate stably and well. The increase in container throughput can drive the growth of Tianjin Port Container and even increase the business volume of other container companies of the Group, which has an upward pulling effect on the operation of the Group.

Euroasia International is located in the Beijiang Port Area at the port of Tianjin, with superior marine transportation geographical conditions. Euroasia International has a terminal coastline of 1,100 metres in length, with two 100,000-tonne and one 70,000-tonne container berths. Container throughput handled by Euroasia International in 2020 was 3.06 million TEUs (2019: 2.86 million TEUs).

Currently, Euroasia International has established stable and long-term cooperative relations with multiple shipping companies, and opened multiple international routes to ports in the United States, Southeast Asia and other countries and regions worldwide. It also launched branch line business in Bohai Rim region and the coastal domestic shipment, covering both the domestic and foreign trade routes.

Following completion of the Disposal and the Acquisition, the Group also plans to further optimise the resource allocation in the port area, expand production scale, improve production efficiency, enhance customer satisfaction, and maximise profitability in order to reap greater benefits for the Group.

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LETTER FROM THE BOARD

INFORMATION ON THE PARTIES

The Group is principally engaged in containerised and non-containerised cargo handling services, sales and other port ancillary services at the port of Tianjin in the PRC, primarily through its subsidiaries and associated companies.

Tianjin Port Co is principally engaged in containerised and non-containerised cargo handling services, sales and other port ancillary services at the port of Tianjin in the PRC, primarily through its subsidiaries and associated companies.

COSCO SHIPPING Ports is principally engaged in investment holding. COSCO SHIPPING Ports and its subsidiaries are principally engaged in the businesses of managing and operating terminals, and related businesses.

COSCO SHIPPING Ports Tianjin is principally engaged in investment holding.

LISTING RULES IMPLICATIONS

COSCO SHIPPING Ports Tianjin is the substantial shareholder of Tianjin Port Container, a non whollyowned subsidiary of the Group, and COSCO SHIPPING Ports is the holding company of COSCO SHIPPING Ports Tianjin. Each of COSCO SHIPPING Ports and COSCO SHIPPING Ports Tianjin is therefore a connected person of the Company at the subsidiary level. Accordingly, each of the Disposal and the Acquisition constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

Since the Disposal and the Acquisition are inter-conditional, they will be regarded as one transaction involving both an acquisition and a disposal under Rule 14.24 of the Listing Rules. Therefore, the Disposal and the Acquisition will be classified by reference to the larger of the applicable percentage ratios (as defined in the Listing Rules) of the Disposal or the Acquisition. The highest percentage ratio (as defined in the Listing Rules) in respect of the Disposal is more than 25% but less than 75%, whereas the highest percentage ratio (as defined in the Listing Rules) in respect of the Acquisition is more than 5% but less than 25%. Accordingly, the Disposal and the Acquisition constitute major and connected transactions of the Company and are subject to the reporting, announcement, circular (including independent financial advice) and independent shareholders’ approval requirements under Chapter 14 and Chapter 14A of the Listing Rules.

Given (i) each of COSCO SHIPPING Ports and COSCO SHIPPING Ports Tianjin is a connected person of the Company at the subsidiary level; (ii) the Board has approved each of the Disposal and the Acquisition; and (iii) the independent non-executive Directors have confirmed that the terms of each of the Disposal and the Acquisition are fair and reasonable, on normal commercial terms, and in the interests of the Company and the Shareholders as a whole, each of the Disposal and the Acquisition is exempt from the independent financial advice and independent shareholders’ approval requirements under Rule 14A.101 of the Listing Rules.

The EGM will be convened and held for the Shareholders to consider and, if thought fit, to approve the Tianjin Port Container Agreement, the Disposal, the COSCO SHIPPING Ports Euroasia Agreement and the Acquisition.

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LETTER FROM THE BOARD

The Directors are of the view that each of the Disposal and the Acquisition is conducted on normal commercial terms, and the terms of the Tianjin Port Container Agreement, the Disposal, the COSCO SHIPPING Ports Euroasia Agreement and the Acquisition are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

None of the Directors has any material interest in the Disposal and the Acquisition. Accordingly, none of the Directors had abstained from voting on the resolutions of the Board for approving the Tianjin Port Container Agreement, the COSCO SHIPPING Ports Euroasia Agreement and the transactions contemplated thereunder.

To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, no Shareholders or any of their respective associates (as defined in the Listing Rules) have any material interest in the Disposal and the Acquisition. As such, no Shareholders are required to abstain from voting on the resolution approving the Tianjin Port Container Agreement, the COSCO SHIPPING Ports Euroasia Agreement and the transactions contemplated thereunder at the EGM.

Shareholders and potential investors of the Company should note that as the Disposal and the Acquisition are subject to the fulfilment or waiver (as applicable) of the conditions precedent under the Tianjin Port Container Agreement and COSCO SHIPPING Ports Euroasia Agreement respectively, the Disposal and the Acquisition may or may not proceed. Shareholders and potential investors of the Company are therefore advised to exercise caution when dealing in the securities of the Company.

EXTRAORDINARY GENERAL MEETING

A notice convening the EGM to be held at 24th Floor, Admiralty Centre, Tower I, 18 Harcourt Road, Hong Kong on Friday, 13 August 2021 at 3:00 p.m. at which an ordinary resolution will be proposed for the approval by the Shareholders of the Tianjin Port Container Agreement, the COSCO SHIPPING Ports Euroasia Agreement and the transactions contemplated thereunder is set out on pages 134 to 135 of this circular.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll except where the chairman of the meeting, 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. The chairman of the EGM will, therefore, exercise his power under Article 72 of the articles of association of the Company to put the resolution to be proposed at the EGM (as set out in the notice of EGM) to be voted by way of a poll. An announcement on the results of the poll will be made by the Company after the EGM in the manner prescribed under Rule 13.39(5) of the Listing Rules.

The register of members of the Company will be closed from Tuesday, 10 August 2021 to Friday, 13 August 2021 (both days inclusive), during which period no transfer of Shares will be registered. In order to be eligible 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 branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on Monday, 9 August 2021.

– 22 –

LETTER FROM THE BOARD

Whether or not you are able to attend the EGM, please complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time scheduled for holding the EGM (or any adjournment thereof). Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM (or any adjournment thereof) should you so wish.

RECOMMENDATION

The Directors consider that each of the Disposal and the Acquisition is fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Tianjin Port Container Agreement, the COSCO SHIPPING Ports Euroasia Agreement and the transactions contemplated thereunder.

ADDITIONAL INFORMATION

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

Yours faithfully, By Order of the Board Tianjin Port Development Holdings Limited Chu Bin Chairman

• For identification purposes only

– 23 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. INDEBTEDNESS

As at the close of business on 30 April 2021, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group together with COSCO SHIPPING Ports Euroasia and Euroasia International (collectively referred to as the ‘‘Enlarged Group’’) had outstanding borrowings of approximately HK$12,914 million. All borrowings of the Enlarged Group are unsecured. Except for borrowings of HK$2,200 million which are guaranteed by the Company, all remaining borrowings of the Enlarged Group are unguaranteed.

As at the close of business on 30 April 2021, the Enlarged Group had lease liabilities recognised on the application of Hong Kong Financial Reporting Standard 16 ‘‘Leases’’ of approximately HK$912 million. Except for lease liabilities of approximately HK$7 million which are secured by rental deposits paid in advance, all remaining lease liabilities of the Enlarged Group are unsecured. All lease liabilities of the Enlarged Group are unguaranteed.

Save as disclosed above and apart from intra-group liabilities, the Enlarged Group did not have any outstanding borrowings, debt securities issued and outstanding, and authorised or otherwise created but unissued, bank overdrafts, other borrowings or other similar indebtedness, liabilities under acceptance (other than normal trade bills) or acceptance credits, debentures, mortgages, charges, lease liabilities, hire purchases commitments, guarantees or contingent liabilities at the close of business on 30 April 2021.

2. WORKING CAPITAL

The Directors are of the opinion that, after taking into account the present available financial resources, the internally generated funds, the available banking facilities and other borrowings, and the completion of the Disposal and the Acquisition, the Group will have sufficient working capital to satisfy its present requirements for at least 12 months from the date of this circular.

3. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

2021 is the first year of the Fourteenth Five-Year Plan in China. It is also a critical year for the Group to promote reform and transformation to achieve high-quality development. To accomplish that, the Group will focus on improving port operating capabilities, enhancing service efficiency and optimising transportation routes networks. The Group will implement the green smart development concepts and carry out priority works comprehensively in a standardised, refined, scientific, systematic and intelligent way with quality and efficiency enhancement as the core.

In response to external changes such as economic situation, policy environment and competitive landscape, the Group will seize the opportunities arising from the major national strategies such as the development of the Belt and Road Initiative, the Xiong’an New Area and the Beijing-TianjinHebei region, integrate closely with the development of Tianjin as an international shipping hub in Northern China, strengthen reform and innovation, accelerate the upgrading of the industrial structure, and improve informatisation to reinforce the port of Tianjin’s status as the container hub port, with the aim of achieving high-quality, efficient and sustainable development of the Group.

– 24 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The Group has responded proactively to the novel coronavirus pandemic and has implemented a series of measures in our best endeavour to prevent and control the pandemic, protect the health and safety of customers and employees and ensure stable operation to sail through this difficult time. The Group will closely monitor the development of the pandemic, assess and respond actively to its impact on a continuous basis.

In the coming year, the Group will make concerted efforts to focus on market expansion and onsite service optimisation to increase market share and operational efficiency. Furthermore, the Group will continue to promote and reinforce intrinsic safety and green development through a solidified foundation and improved systems, promote automated production and intelligent service through innovations and technology, and improve governance and management capabilities through reform, innovations and market benchmarking. All these will establish a solid foundation for the long-term planning and sustainable development of the Group.

– 25 –

VALUATION REPORT ON TIANJIN PORT CONTAINER

APPENDIX II

The following is the text of the Valuation Report on Tianjin Port Container prepared by Tianjin Zhonglian for the purpose of, among others, incorporation in this circular.

The English version of this document is for reference only. In the event of any inconsistency between the Chinese and English versions, the Chinese version shall prevail.

This Report is prepared in accordance with the PRC Asset Valuation Standards

Asset Valuation Report on the Value of the

Entire Shareholders’ Equity of

Tianjin Port Container Terminal Co., Ltd. in Relation to the Proposed Equity Transfer by Tianjin Port Holdings Co., Ltd.

Zhonglian Ping Bao Zi [2021] No. A-0027 (Vol. 1 of 2)

Tianjin Zhonglian Assets Appraisal Co., Ltd.

15 April 2021

10/F, Block C, Marriott Building, 333 Binshui Xi Road, Nankai District, Tianjin City

– 26 –

VALUATION REPORT ON TIANJIN PORT CONTAINER

APPENDIX II

CONTENTS

Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28
Summary of the Asset Valuation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		29
Asset Valuation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		35
I.	Overview of Entrusting Party, Appraised Enterprise, and Other Users
	of the Valuation Report as Agreed in the Engagement Contract . . . . . . . . . . . . . . . . . . . . . .	35
II.	Purpose of the Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	40
III.	Valuation Target and Valuation Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	40
IV.	Type of Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	46
V.	Valuation Reference Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	47
VI.	Basis of Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	47
VII.	Valuation Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	52
VIII.	Process and Implementation of Valuation Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	68
IX.	Valuation Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	70
X.	Valuation Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	72
XI.	Notes on Specific Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	75
XII.	Notes on the Restrictions on the Use of the Asset Valuation Report . . . . . . . . . . . . . . . . . . . . .	79
XIII.	Date of the Asset Valuation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	80
List of Annexes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		81

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VALUATION REPORT ON TIANJIN PORT CONTAINER

APPENDIX II

DECLARATION

Tianjin Zhonglian Assets Appraisal Co., Ltd. accept the engagement by Tianjin Port Holdings Co., Ltd., has duly conducted thorough checking, verification, assessment and estimation of the assets and liabilities of Tianjin Port Container Terminal Co., Ltd. as at 31 December 2020 in relation to the economic activity of the proposed transfer of equity interest by Tianjin Port Holdings Co., Ltd. and formed an asset valuation report. We hereby declare that:

• I. This asset valuation report is prepared in accordance with the Basic Rules for Asset Appraisal issued by the Ministry of Finance and the Practice Guidelines for Asset Appraisal and the Professional Code of Ethics issued by the China Appraisal Society.

• II. The entrusting party or other users of the asset valuation report shall use the asset valuation report in accordance with the laws, administrative regulations and within the scope of use set out in this asset valuation report. This asset valuation agency and our asset valuers take no responsibility for any non-compliance with the above-mentioned requirements for the use of the asset valuation report by the entrusting party or other users of the asset valuation report.

This asset valuation report shall only be used by the entrusting party, other users of the asset valuation report as agreed in the Asset Valuation Engagement Contract and users of the asset valuation report as stipulated by laws and administrative regulations. Save for the above, any other institution and individual cannot become the user of the asset valuation report.

This asset valuation agency and our asset valuers advise that users of the asset valuation report should correctly construe the valuation conclusion. The valuation conclusion is not equivalent to the realisable value of the valuation target and the valuation conclusion should not be considered as a guarantee for the realisable value of the valuation target.

• III. This asset valuation agency and our asset valuers have complied with the laws, administrative regulations and asset valuation standards, abided by the principles of independence, objectivity and fairness, and have assumed responsibilities for the published asset valuation report in accordance with laws.

• IV. The lists of assets and liabilities related to the valuation target should be declared by the entrusting party (the appraised enterprise) and certified by signature, seal or other means permitted by laws. The entrusting party and other relevant parties shall be responsible for the truthfulness, completeness and legality of the materials provided by them in accordance with laws.

• V. This asset valuation agency and our asset valuers have no existing or expected relationship of interests with the valuation target in the asset valuation report, no existing or expected relationship of interests with the relevant parties, and have no prejudice against the relevant parties.

• VI. The asset valuers have conducted on-site inspection on the valuation target and the assets involved in the asset valuation report, and given necessary consideration to the legal ownership status of the valuation target and the assets involved, conducted verification on the information regarding the legal ownership of the valuation target and the assets involved.

• VII. The analyses, judgements and conclusion in the asset valuation report issued by us are subject to the assumptions and limitations in the asset valuation report. The users of the asset valuation report shall fully consider the assumptions, limitations and notes on specific matters set out in the asset valuation report and their impact on the valuation conclusion.

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VALUATION REPORT ON TIANJIN PORT CONTAINER

APPENDIX II

Tel: (022) 23733333 Fax: (022) 23718888 Address: 10/F, Marriott Building, 333 Binshui Xi Road, Nankai District, Tianjin City

The Value of the Entire Shareholders’ Equity of Tianjin Port Container Terminal Co., Ltd. in Relation to the Proposed Equity Transfer by Tianjin Port Holdings Co., Ltd. Summary of Asset Valuation Report

Zhonglian Ping Bao Zi [2021] No. A-0027

Tianjin Zhonglian Assets Appraisal Co., Ltd. accept the engagement by Tianjin Port Holdings Co., Ltd., has conducted a valuation on the market value of the entire shareholders’ equity of Tianjin Port Container Terminal Co., Ltd. in relation to the economic activity of the proposed transfer of equity interest by Tianjin Port Holdings Co., Ltd. in accordance with the PRC laws, regulations and valuation standards relevant to assets valuation and in adherence to the principles of independence, objectiveness and fairness with 31 December 2020 as the valuation reference date.

• I. Purpose of valuation: Equity transfer.

• II. Valuation target and valuation scope: The valuation target is the value of entire shareholders’ equity of Tianjin Port Container Terminal Co., Ltd. as at 31 December 2020; the valuation scope is all assets and liabilities of Tianjin Port Container Terminal Co., Ltd.

• III. Type of value: Market value.

• IV. Valuation reference date: 31 December 2020.

• V. Valuation methodology: The asset-based approach and the income approach.

• VI. Valuation conclusion: After the implementation of checking and verification, on-site inspection, market research and inquiry, assessment and estimation and other valuation procedures, the valuation conclusion of the entire shareholders’ equity of Tianjin Port Container Terminal Co., Ltd. as at the valuation reference date of 31 December 2020 is as follows:

Under the going concern assumption, the appraised values of total assets amounted to RMB4,799,493,600, total liabilities amounted to RMB944,461,100 and net assets amounted to RMB3,855,032,500. Please refer to the summary of assets valuation results for details.

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VALUATION REPORT ON TIANJIN PORT CONTAINER

APPENDIX II

Summary of Assets Valuation Results

Unit: RMB0’000

Items	Items	Items				Appreciation rate (%)	Appreciation rate (%)
	Items		Book value	Appraised value	Increase/ decrease in value	Appreciation rate (%)
			A	B	C = B – A	D = (B – A)/ A×100%
	Current assets	1	83,252.46	83,252.46	0	0
	Non-current assets	2	360,091.65	396,696.90	36,605.25	10.17
	Of which: Other equity instruments	3	49.5	71.87	22.37	45.19
	Long-term equity investments	6	328.52	990	661.48	201.35
	Fixed assets	8	275,327.57	299,498.52	24,170.95	8.78
	Construction in progress	9	22,501.67	22,501.67	0	0
	Intangible assets	14	61,711.38	73,581.09	11,869.71	19.23
	Deferred income tax assets	18	173.01	53.74	–119.27	–68.94
	Total assets	20	443,344.11	479,949.36	36,605.25	8.26
	Current liabilities	21	49,896.23	49,896.23	0	0
	Non-current liabilities	22	45,026.95	44,549.88	–477.07	–1.06
	Total liabilities	23	94,923.18	94,446.11	–477.07	–0.5
	Net assets (Owners’ equity)	24	348,420.93	385,503.25	37,082.32	10.64

VII. Validity period of the valuation conclusion: The assets valuation report shall be used after filing in accordance with the relevant provisions of the state-owned assets valuation administration. The filed valuation results shall be valid for one year, being from the valuation reference date of 31 December 2020 to 30 December 2021. Revaluation is necessary after the expiry of one year.

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APPENDIX II

VALUATION REPORT ON TIANJIN PORT CONTAINER

• VIII. The relevant parties shall pay attention to the following matters for the proper use of the valuation conclusion:

(I) Ownership

1. Failure to acquire certificates

As at the valuation reference date, relevant ownership certificates have not yet been acquired for the following buildings included in the valuation scope, details of which are shown below:

No.	No.						Book value	Book value	Book value
	No.	Certificate No.	Name of Building	Structure	Year and month of completion	Floor area/ volume (m2/m3)	Book value
							Original value	Net value
	1	No certificate acquired	Waiting corridor – waiting lounge		30/12/2013	311.92	1,318,285.76	1,237,001.44
	2	No certificate acquired	Cooler substation	Frame	10/2003	306.80	652,109.00	621,432.04
	3	No certificate acquired	Checking bridge	Steel structure	9/2003	2,380.00	8,738,757.76	8,251,253.76
	4	No certificate acquired	Duty room	Brick- concrete	11/2003	40.21	98,816.70	93,929.02
	5	No certificate acquired	Gate buffer service centre	Brick- concrete	7/2008	199.60	380,869.40	361,964.12
	6	No certificate acquired	Office building Stacking and interior decoration	Reinforced concrete	1/1999	496.00	2,208,836.00	220,885.09
	7	No certificate acquired	Sewage pump house	Brick- concrete	1/1986	31.00	44,880.00	4,632.37
	8	No certificate acquired	Management and Control Centre	Frame	10/2006	4,130.00	12,611,549.30	8,030,119.28
	9	No certificate acquired	Management and Control Centre Phase II	Frame	4/2010	4,769.40	16,845,086.10	11,658,420.66
	Total					12,664.93	42,899,190.02	30,479,637.78

The appraised enterprise declared that it has the ownership of the above-mentioned buildings and has all along been occupying such buildings. The floor area of the above-mentioned buildings is determined based on information including relevant construction contracts and drawings and the on-site inspection.

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APPENDIX II

VALUATION REPORT ON TIANJIN PORT CONTAINER

2. Right holders stated in ownership certificates

No.	No.							Notes	Notes
	No.	Property certificate No.	Location of the land	Date of acquisition	Area (m2)	Original book value	Book value	Notes
	1	Jin (2019) Binhai New Area Tanggu Immovable No. 1027400	North of Dongtudi, Beijiang, Tianjin Port, Tanggu District	3/2006	394,067.80	165,595,016.81	152,217,804.15	The right holder is Tianjin Five Continents International Container Terminal Co., Ltd.
	2	Tang Dan Guo Yong (2008) No. 499	Dongtudi, Beijiang, Tianjin Port	5/2008	34,726.10	14,041,500.32	12,883,809.73	The right holder is Tianjin Five Continents International Container Terminal Co., Ltd.
	3	Jin (2019) Binhai New Area Tanggu Immovable No. 1030239	No. 50 Donglian Road, Tanggu, Binhai New Area	31/8/2020	25,735.20	295,963,380.00	292,622,935.55	The right holder is Tianjin Port Holdings Co., Ltd.
	4	Jin (2019) Binhai New Area Tanggu Immovable No. 1027903	Annex 1, No. 5212, 2nd Road, Tanggu Port, Binhai New Area	31/8/2020	428,222.90			The right holder is Tianjin Port Holdings Co., Ltd.
	5	Jin (2019) Binhai New Area Tanggu Immovable No. 1027902	Nos. 4589-66, 2nd Road, Tanggu Port, Binhai New Area	31/8/2020	10,565.00			The right holder is Tianjin Port Holdings Co., Ltd.
	6	Jin (2019) Binhai New Area Tanggu Immovable No. 1024633	Dongtudi, 2nd Road, Tanggu Port, Binhai New Area	31/8/2020	1,553.20			The right holder is Tianjin Port Holdings Co., Ltd.
	Sub-total				894,870.20	475,599,897.13	457,724,549.43
	Total				894,870.20	475,599,897.13	457,724,549.43

The two items of land use rights with Tianjin Five Continents International Container Terminal Co., Ltd. being the holder of the above-mentioned certificates are assets acquired in the merger, and the four items of land use rights with Tianjin Port Holdings Co., Ltd. being the holder are acquired through asset acquisition. The appraised enterprise provided the relevant documents, contracts, payment vouchers and other information, and the appraised enterprise is handling the registration of the change of ownership.

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VALUATION REPORT ON TIANJIN PORT CONTAINER

3. Land area

No.	No.					Notes	Notes
	No.	Property certificate No.	Location of the land	Total area stated in ownership certificate (m2)	Plot area (m2)	Notes
	1	Jin (2020) Binhai New Area Tanggu Immovable No. 1018957	Beijiang, Tianjin Port, Tanggu District	11,976.20	1,411.20	It shares the area with the land Jin (2019) Binhai New Area Tanggu Immovable No. 1027902 and the shared area of this land is 1,411.2 square meters.
		Jin (2020) Binhai New Area Tanggu Immovable No. 1020087	Beijiang, Tianjin Port, Tanggu District	429,393.50	1,170.60	It shares the area with the land Jin (2019) Binhai New Area Tanggu Immovable No. 1027903 and the shared area of this land is 1,170.6 square meters.
	2	Jin (2019) Binhai New Area Tanggu Immovable No. 1027903	Annex 1, No. 5212, 2nd Road, Tanggu Port, Binhai New Area	429,423.60	428,222.90	The right holder is Tianjin Port Holdings Co., Ltd. It shares the area with the land Jin (2020) Binhai New Area Tanggu Immovable No. 1020087 and the shared area of this land is 428,222.9 square meters.
	3	Jin (2019) Binhai New Area Tanggu Immovable No. 1027902	Nos. 4589-66, 2nd Road, Tanggu Port, Binhai New Area	11,977.00	10,565.00	The right holder is Tianjin Port Holdings Co., Ltd. It shares the area with the land Jin (2020) Binhai New Area Tanggu Immovable No. 1018957 and the shared area of this land is 10,565 square meters.

The actual land use right area relating to the land use right certificate with the certificate number ‘‘Jin (2020) Binhai New Area Tanggu Immovable No. 1018957’’ is 1,411.20 square meters, but the registered area as shown in the certificate is 11,976.20 square meters. The difference of 10,565.00 square meters is the area relating to the land with the certificate number ‘‘Jin (2019) Binhai New Area Tanggu Immovable No. 1027902’’. The reasons for the above circumstance are as follows: The registered area of the above-mentioned two certificates are related to the same land parcel (the parcel number is 120107004012321000), but there were originally two right holders of the land parcel, namely Tianjin Orient Container Terminals Co., Ltd. and Tianjin Port Holdings Co., Ltd. In particular, Tianjin Orient Container Terminals Co., Ltd. shares 1,411.20 square meters, Tianjin Port Holdings Co., Ltd. shares 10,565.00 square meters, and the total area as shown in the certificate is 11,976.20 square meters. After the integration and acquisition of assets by the Company, as of the valuation reference date, the above-mentioned lands are registered under the name of Tianjin Port Container Terminal Co., Ltd. In 2020, the container company changed the land right holder shared by the original right holder Tianjin Orient Container Terminals Co., Ltd. into Tianjin Port Container Terminal Co., Ltd. The new certificate number is ‘‘Jin (2020) Binhai New Area Tanggu Immovable No. 1018957’’. As of the valuation reference date, the change of right holder for the land use right ‘‘Jin (2019) Binhai New Area Tanggu Immovable No. 1027902’’ with Tianjin Port Holdings Co., Ltd. as the right holder has not been completed.

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APPENDIX II

VALUATION REPORT ON TIANJIN PORT CONTAINER

The registered areas in the land use right certificate of ‘‘Jin (2020) Binhai New Area Tanggu Immovable No. 1018957’’ and the land use right certificate of ‘‘Jin (2019) Binhai New Area Tanggu Immovable No. 1027902’’ are related to the same land parcel. However, the difference between the total registered areas in the above-mentioned two certificates is 0.8 square meter, which is caused by the different coordinate systems used in the two surveying and mapping. The coordinate system used in surveying and mapping of the land use right certificate with the certificate number of ‘‘Jin (2020) Binhai New Area Tanggu Immovable No. 1018957’’ (for an area of 11,976.20 square meters) is Tianjin 2000 coordinate system, while the coordinate system used in surveying and mapping of the land use right certificate with the certificate number of ‘‘Jin (2019) Binhai New Area Tanggu Immovable No. 1027902’’ (for an area of 11,977.00 square meters) is the national 2000 coordinate system. The coordinate system currently used is Tianjin 2000 coordinate system. Based on the latest surveying and mapping results, the area of 11,976.20 square meters shown in the certificate as obtained in 2020 prevails.

The situation for the land use right certificate with the certificate number of ‘‘Jin (2020) Binhai New Area Tanggu Immovable No. 1020087’’ (for an area of 429,393.50 square meters) and the land use right certificate ‘‘Jin (2019) Binhai New Area Tanggu Immovable No. 1027903’’ (for an area of 429,423.60 square meters) is the same as above. In particular, the shared land area of the land use right certificate of ‘‘Jin (2020) Binhai New Area Tanggu Immovable No. 1020087’’ is 1,170.60 square meters, and that of the land use right certificate of ‘‘Jin (2019) Binhai New Area Tanggu Immovable No. 1027903’’ is 428,222.90 square meters. The difference between the total registered areas in the above-mentioned two certificates is 30.1 square meters, which is also caused by the different coordinate systems used in the two surveying and mapping, and the area of 429,393.50 square meters in total shown in the certificate as obtained in 2020 prevails.

• (II) The pier, pipeline and other concealed works included in this valuation scope could not be directly checked and verified by the valuers due to objective circumstances, such as being buried underground or covered by water. This valuation is based on the introduction made by the relevant personnel of the appraised enterprise as well as the information declared by the appraised enterprise, including construction contracts and drawings.

• (III) In the valuation using the asset-based approach, the appraised value of fixed assets excludes the value-added tax.

• (IV) This valuation does not consider the possible taxes related to the increase or decrease in value of the assets and liabilities appraised.

• Note: The above content is extracted from the asset valuation report. For details of this valuation and a proper understanding of the valuation conclusion, please read the full text of the valuation report carefully.

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VALUATION REPORT ON TIANJIN PORT CONTAINER

APPENDIX II

Asset Valuation Report on the Value of the Entire Shareholders’ Equity of Tianjin Port Container Terminal Co., Ltd. in Relation to the Proposed Equity Transfer by Tianjin Port Holdings Co., Ltd.

Zhonglian Ping Bao Zi [2021] No. A-0027

Tianjin Port Holdings Co., Ltd.,

Tianjin Zhonglian Assets Appraisal Co., Ltd. accepted the engagement by your company, has conducted a valuation on the market value of the entire shareholders’ equity of Tianjin Port Container Terminal Co., Ltd. as of 31 December 2020 in relation to the proposed equity transfer by Tianjin Port Holdings Co., Ltd. in accordance with the required valuation procedures, using the asset-based approach and income approach in accordance with the relevant laws, regulations, asset valuation standards, asset valuation principles, the actual situation of appraised asset and current price standard. The asset valuation is reported as follows:

• I. Overview of Entrusting Party, Appraised Enterprise, and Other Users of the Valuation Report as Agreed in the Engagement Contract

(I) Entrusting party

Unified social credit code: 911200001030643818

Name: Tianjin Port Holdings Co., Ltd.

Type: Joint-stock company (Sino-foreign equity joint venture, listed)

Domicile: Zone A, No. 1 Tongda Plaza, Tianjin Free Trade Zone (Tianjin Port Bonded Area)

Legal representative: Jiao Guangjun

Registered capital: RMB2,411,667,532.00

Date of incorporation: 29 September 1982

Term of business: from 29 September 1982 to long-term

Scope of business: Commodity storage; transhipment and motor transport; loading, unloading and moving; container handling, cargo handling, and relevant business; freight forwarder; labour service; commerce wholesale and retail of commercials and various goods and materials; economic information consultant (for matters that require approval according to the laws, the approval from relevant authorities must be obtained before operation); leasing of self-owned housing, goods yards, machinery, and equipment (for matters that require approval according to the laws, the approval from relevant authorities must be obtained before operation)

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VALUATION REPORT ON TIANJIN PORT CONTAINER

APPENDIX II

(II) Appraised enterprise

1. Basic information

The appraised enterprise is Tianjin Port Container Terminal Co., Ltd., details of which is as follows:

Unified social credit code: 911201166009142877

Name: Tianjin Port Container Terminal Co., Ltd.

Type: limited liability company (Sino-foreign equity joint venture)

Domicile: Suite 903, Kaili Building, No. 188 Tianbao Avenue, Tianjin Free Trade Zone (Tianjin Port Bonded Area)

Legal representative: Liu Jieqiang

Registered capital: RMB2,408,312,700.00

Date of incorporation: 25 October 1997

Term of business: from 25 October 1997 to 24 October 2047

2. History

Tianjin Port Container Terminal Co., Ltd. was formerly known as Tianjin Port Container Company. In October 1997, its asset restructuring was approved by the People’s Government of Tianjin City with Circular Jin Wai Zi Zi No. 0975 and became a wholly foreign-owned enterprise. The registered capital of Tianjin Port Container Terminal Co., Ltd. upon establishment was RMB362,885,300 with Tianjin Development Holdings Limited as the shareholder; the registered capital of the company was changed to RMB632,890,000 in March 2001; in October 2005, Tianjin Development Holdings Limited transferred the 100% equity it held to Ace Advantage Investments Limited (the British Virgin Islands); the company’s registered capital was changed to RMB672,890,000 in July 2006; the company’s registered capital was changed to RMB1,021,230,000 in July 2008; in August 2008, Ace Advantage Investments Limited (the British Virgin Islands) transferred the 100% equity it held to Champion Sky Enterprises Limited (Hong Kong).

Champion Sky Enterprises Limited (Hong Kong) transferred the 100% equity interest held by it to Tianjin Port Holdings Co., Ltd. in 2017.

On 29 June 2019, the fourth extraordinary meeting of the ninth session of the board of Tianjin Port Holdings Co., Ltd. was convened by way of communications. Nine directors should attend the meeting and nine directors actually attended the meeting. After careful consideration, the participating directors passed the ‘‘Resolution of Tianjin Port Holdings Co., Ltd. on the Merger of Tianjin Port Container Terminal Co., Ltd., Tianjin Orient Container Terminals Co., Ltd. and Tianjin Five Continents International Container Terminal Co., Ltd.’’ by way of poll.

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APPENDIX II

VALUATION REPORT ON TIANJIN PORT CONTAINER

In order to give full play to the synergy of container business of the company in Dongtudi, further improve the resource utilisation efficiency of piers and depots, etc., continuously enhance the competitiveness of container business segment of the company and create greater benefits for the company, the merger of Tianjin Port Container Terminal Co., Ltd., Tianjin Orient Container Terminals Co., Ltd. and Tianjin Five Continents International Container Terminal Co., Ltd. was approved, and Tianjin Port Container Terminal Co., Ltd. absorbed and merged the other two companies. After the merger, Tianjin Port Container Terminal Co., Ltd. subsisted, while Tianjin Five Continents International Container Terminal Co., Ltd. and Tianjin Orient Container Terminals Co., Ltd. were cancelled. As the company subsisting after the merger, Tianjin Port Container Terminal Co., Ltd. would assume all the assets, businesses, creditor’s rights, debts and employees of the other two companies.

Tianjin Orient Container Terminals Co., Ltd. was originally a Sino-foreign equity joint venture established by Tianjin Port Holdings Co., Ltd. and COSCO Ports (Tianjin) Limited. The registered capital of the company was US$29,200,000, with US$22,046,000 contributed by Tianjin Port Holdings Co., Ltd. (accounting for 75.5%) and US$7,154,000 contributed by COSCO Ports (Tianjin) Limited (accounting for 24.5%). Tianjin Five Continents International Container Terminal Co., Ltd. was originally a Sino-foreign equity joint venture established by Tianjin Port Holdings Co., Limited, COSCO Ports (Tianjin) Limited, China Shipping Terminal Development Co., Ltd. and China Merchants International Terminals (Tianjin) Limited. The registered capital of the company was RMB1,145,000,000, of which Tianjin Port Holdings Co., Limited contributed RMB593,728,300, China Shipping Terminal Development Co., Ltd. contributed RMB160,300,000, COSCO Ports (Tianjin) Limited contributed RMB195,485,850 and China Merchants International Terminals (Tianjin) Limited contributed RMB195,485,850.

On 30 June 2019, the three companies, namely Tianjin Port Container Terminal Co., Ltd., Tianjin Orient Container Terminals Co., Ltd. and Tianjin Five Continents International Container Terminal Co., Ltd. signed the merger agreement, pursuant to which Tianjin Port Container Terminal Co., Ltd. (as the subsisting party) absorbed and merged the two companies, namely Tianjin Orient Container Terminals Co., Ltd. and Tianjin Five Continents International Container Terminal Co., Ltd. After the merger, the registered capital was RMB2,408,312,700.00, with the shareholding structure shown below:

No.	No.			Shareholding percentage	Shareholding percentage
	No.	Name of investor	Investment (RMB)	Shareholding percentage
	1	Tianjin Port Holdings Co., Ltd.	1,846,694,178.36	76.68%
	2	COSCO Ports (Tianjin) Limited	241,072,101.27	10.01%
	3	China Shipping Terminal Development Co., Limited	144,498,762.00	6.00%
	4	China Merchants International Terminals (Tianjin) Limited	176,047,658.37	7.31%
	Total		2,408,312,700.00	100.00%

On 9 June 2020, the fourth meeting of the first session of the board of Tianjin Port Container Terminal Co., Ltd. passed the ‘‘Resolution on Amendments to the Articles of Association of Tianjin Port Container Terminal Co., Ltd.’’, in which the name of COSCO Ports (Tianjin) Limited, a shareholder, was changed to COSCO SHIPPING Ports (Tianjin) Limited. The names of shareholders and the shareholding structure after the change is shown below:

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APPENDIX II

VALUATION REPORT ON TIANJIN PORT CONTAINER

No.	No.			Shareholding percentage	Shareholding percentage
	No.	Name of investor	Investment (RMB)	Shareholding percentage
	1	Tianjin Port Holdings Co., Ltd.	1,846,694,178.36	76.68%
	2	COSCO SHIPPING Ports (Tianjin) Limited	241,072,101.27	10.01%
	3	China Shipping Terminal Development Co., Limited	144,498,762.00	6.00%
	4	China Merchants International Terminals (Tianjin) Limited	176,047,658.37	7.31%
Total	Total		2,408,312,700.00	100.00%

3. Shareholders of the company and their shareholding percentage

As of the valuation reference date, the paid-up capital of Tianjin Port Container Terminal Co., Ltd. was RMB Two Billion Four Hundred And Eight Million Three Hundred And Twelve Thousand Seven Hundred. Names of shareholders, the amount and proportion of their capital contribution are as follows:

Names of shareholders, amount and proportion of their capital contribution

Unit: RMB

No.	No.			Shareholding percentage	Shareholding percentage
	No.	Name of investor	Investment (RMB)	Shareholding percentage
	1	Tianjin Port Holdings Co., Ltd.	1,846,694,178.36	76.68%
	2	COSCO SHIPPING Ports (Tianjin) Limited	241,072,101.27	10.01%
	3	China Shipping Terminal Development Co., Limited	144,498,762.00	6.00%
	4	China Merchants International Terminals (Tianjin) Limited	176,047,658.37	7.31%
	Total		2,408,312,700.00	100.00%

4. Scope of business operations

The scope of business is loading and unloading, transfer, stacking, storage, transshipment, cargo transport within the port and relevant integrated services for containers and other cargoes; warehousing services (other than dangerous goods); electronic data exchange technical services; assembling and dissembling, repairing and cleaning of containers; international sea freight agent, international land freight agent, international air freight agent; customs declaration and inspection declaration agent; construction and operation of public terminal and yard facilities at ports; repairs of cranes (the operation of which is subject to the approval from the safety supervisory departments of special equipment); provision of labour services for enterprises; road freight; domestic freight agent (excluding domestic shipping agent); logistics information consultation services; loading, unloading and handling services; provision of integrated logistics and container management services; leasing of self-owned properties and yards; port operation (including operation of dangerous goods at the port, being subject to the approval under the port operation permit and its underlying certificate); quality inspection services; consultation services related to the aforesaid services; port services for ships. (Matters that are subject to approval in accordance with the laws may be carried out only after approval is obtained from the relevant authorities) (investments in the fields where foreign investment is prohibited by the ‘‘Negative List for the Access of Foreign Investment’’ are not allowed).

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VALUATION REPORT ON TIANJIN PORT CONTAINER

APPENDIX II

5. Assets, financial and operating overview

As of the valuation reference date (being 31 December 2020), the total assets of Tianjin Port Container Terminal Co., Ltd. amounted to RMB4,433,441,100, the total liabilities amounted to RMB949,231,800, the net assets amounted to RMB3,484,209,300, the realised revenue for 2020 amounted to RMB1,380,465,300, the net profit amounted to RMB304,344,500. The company’s assets and financial performance from 2018 to the valuation reference date are as follows:

The assets, liabilities and financial conditions of the company

	Unit: RMB0’000	Unit: RMB0’000	Unit: RMB0’000	Unit: RMB0’000
	Item	31/12/2018	31/12/2019	31/12/2020
	Total assets	149,692.83	387,953.44	443,344.11
	Liabilities	11,515.39	58,796.94	94,923.18
	Net assets	138,177.44	329,156.50	348,420.93
	Year	The year of 2018	The year of 2019	The year of 2020
	Revenue	56,064.64	89,917.59	138,046.53
	Operating expenses	34,923.53	59,550.96	83,060.50
	Total profit	10,529.09	17,461.56	40,723.47
	Net profit	7,863.19	13,130.95	30,434.45

The financial statements of the company as of the valuation reference date have been audited by 中審華會計師事務所（特殊普通合夥）(CAC CPA Limited Liability Partnership*) and it has issued audit reports with unqualified opinion.

• (III) Other users of the report other than the entrusting party as agreed in the Engagement Contract

In accordance with the ‘‘Asset Valuation Engagement Contract’’ entered into by the entrusting party and our company, other users of the report are the relevant regulators to which the valuation report shall be submitted for filing purpose in accordance with the relevant provisions of the stateowned assets administration.

Except as otherwise provided in the PRC laws and regulations, any institution or individual that has not been confirmed by the valuation agency and the entrusting party shall not become a user of the valuation report by obtaining the valuation report.

• (IV) Relationship between the entrusting party and the appraised enterprise

The entrusting party is a shareholder of the appraised enterprise and holds 76.68% of its shares.

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VALUATION REPORT ON TIANJIN PORT CONTAINER

APPENDIX II

II. Purpose of the Valuation

The purpose of this valuation is to reflect the market value of the entire shareholders’ equity of Tianjin Port Container Terminal Co., Ltd. as of the valuation reference date in order to provide a reference value for the proposed equity transfer for Tianjin Port Holdings Co., Ltd.

The economic activity has been approved by the following documents:

1. ‘‘Resolutions of the Third Board Meeting of 2021 of Tianjin Port (Group) Co., Ltd.’’ (20 February 2021).

2. ‘‘Resolutions of the 16th Extraordinary Meeting of the Ninth Session of the Board of Tianjin Port Holdings Co., Ltd.’’ (26 February 2021).

III. Valuation Target and Valuation Scope

• (I) Valuation target

The valuation target of this project is the value of the entire shareholders’ equity of Tianjin Port Container Terminal Co., Ltd. as of 31 December 2020.

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APPENDIX II

VALUATION REPORT ON TIANJIN PORT CONTAINER

(II) Valuation scope

In accordance with the ‘‘Asset Valuation Engagement Contract’’ and the detailed assets and liabilities valuation declaration form provided by the appraised enterprise, the scope of this valuation is all assets and liabilities of Tianjin Port Container Terminal Co., Ltd. as of 31 December 2020. The balance sheet involved in the above-mentioned declared assets and liabilities has been audited by CAC CPA Limited Liability Partnership which has issued the ‘‘Audit Report’’. The audited book values are as follows:

Unit: RMB

Name of Item	Name of Item			Net book value	Net book value
	Name of Item	Net book value	Name of Item	Net book value
	I. Total current assets	832,524,593.68	III. Total current liabilities	498,962,313.45
	Of which: Cash and cash equivalents	240,801,386.27	Of which: Short-term borrowings	100,000,000.00
	Accounts receivable	149,726,879.82	Accounts payable	217,263,751.93
	Prepayments	1,157,278.39	Advance receipts	23,296,879.96
	Other receivables	418,024,064.19	Employees’ remuneration payable	14,259,708.00
	Inventories	22,814,985.01	Tax payable	59,522,641.67
			Other payables	20,619,331.89
			Non-current liabilities due within one year	64,000,000.00
	II. Total non-current assets	3,600,916,485.44	IV. Total non-current liabilities	450,269,492.31
	Of which: Other equity instruments	495,000.00	Of which: Long-term borrowings	445,000,000.00
	Long-term equity investments	3,285,193.39	Deferred income	4,770,730.31
	Fixed assets	2,753,428,086.99	Other non-current liabilities	498,762.00
	Construction in progress	225,016,748.25
	Intangible assets	616,961,335.95
	Deferred income tax assets	1,730,120.86	Total liabilities	949,231,805.76
	Total assets	4,433,441,079.12	Entire owner’s equity (or shareholders’ equity)	3,484,209,273.36

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APPENDIX II

VALUATION REPORT ON TIANJIN PORT CONTAINER

1. Major physical assets included in the valuation scope are listed below:

No.	No.				Status and characteristics	Status and characteristics
	No.	Item	Carrying amount (RMB)	Quantity	Status and characteristics
	1	Inventories	22,814,985.01	4,778 items	Necessary raw materials, mainly stored in the warehouses of the company and with normal stock count
	2	Buildings	75,457,869.49	37 items	Located in the operating site of Tianjin Port Container Terminal Co., Ltd., and in normal use
	3	Structures and other ancillary facilities	1,810,649,269.14	118 items	Located in the operating site of Tianjin Port Container Terminal Co., Ltd., and in normal use
	4	Machinery equipment	800,943,982.92	584 items	Located in the operating site of Tianjin Port Container Terminal Co., Ltd., and in normal use
	5	Vehicles	4,667,244.37	65 items	Located in the operating site of Tianjin Port Container Terminal Co., Ltd., and in normal use
	6	Electronic equipment	61,557,294.48	3,424 items	Placed in the office area of the operating site of Tianjin Port Container Terminal Co., Ltd., and in normal use
	7	Construction in progress	225,016,748.25	58 items	The payment progress of the enterprise is basically consistent with the actual project progress

As at the valuation reference date, relevant ownership certificates have not yet been acquired for the following buildings included in the valuation scope, details of which are shown below:

No.	No.						Book value	Book value	Book value
	No.	Certificate No.	Name of Building	Structure	Year and month of completion	Floor area/ volume (m2/m3)	Book value
							Original value	Net value
	1	No certificate acquired	Waiting corridor – waiting lounge		30/12/2013	311.92	1,318,285.76	1,237,001.44
	2	No certificate acquired	Cooler substation	Frame	10/2003	306.80	652,109.00	621,432.04
	3	No certificate acquired	Checking bridge	Steel structure	9/2003	2,380.00	8,738,757.76	8,251,253.76
	4	No certificate acquired	Duty room	Brick-concrete	11/2003	40.21	98,816.70	93,929.02
	5	No certificate acquired	Gate buffer service centre	Brick-concrete	7/2008	199.60	380,869.40	361,964.12
	6	No certificate acquired	Office building stacking and interior decoration	Reinforced concrete	1/1999	496.00	2,208,836.00	220,885.09
	7	No certificate acquired	Sewage pump house	Brick-concrete	1/1986	31.00	44,880.00	4,632.37
	8	No certificate acquired	Management and Control Centre	Frame	10/2006	4,130.00	12,611,549.30	8,030,119.28
	9	No certificate acquired	Management and Control Centre Phase II	Frame	4/2010	4,769.40	16,845,086.10	11,658,420.66
	Total					12,664.93	42,899,190.02	30,479,637.78

The appraised enterprise declared that it has the ownership of the above-mentioned buildings and has all along been occupying such buildings. The floor area of the above-mentioned buildings is determined by the relevant information, including construction contracts and drawings and based on the on-site inspection.

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APPENDIX II

VALUATION REPORT ON TIANJIN PORT CONTAINER

1. Intangible assets included in the valuation scope – land use rights are listed below:

No.	No.						Notes	Notes
	No.	Property certificate No.	Location of the land	Area (m2)	Original book value	Book value	Notes
	1	Jin (2020) Binhai New Area Tanggu Immovable No. 1018957	Beijiang Port Area, Tianjin Port, Tanggu District	1,411.20	1,717,410.34	652,919.86
		Jin (2020) Binhai New Area Tanggu Immovable No. 1020087	Beijiang Port Area, Tianjin Port, Tanggu District	1,170.60
	2	Jin (2019) Binhai New Area Tanggu Immovable No. 1027400	North of Dongtudi, Beijiang, Tianjin Port, Tanggu District	394,067.80	165,595,016.81	152,217,804.15	The right holder of the certificate is Tianjin Five Continents International Container Terminal Co., Ltd.
	3	Tang Dan Guo Yong (2008) No. 499	Dongtudi, Beijiang, Tianjin Port	34,726.10	14,041,500.32	12,883,809.73	The right holder of the certificate is Tianjin Five Continents International Container Terminal Co., Ltd.
	4	Jin (2020) Binhai New Area Tanggu Immovable No. 1013165	Beijiang Port Area, Tianjin Port, Tanggu District	18,557.10	8,134,705.07	7,743,921.57
	5	Jin (2019) Binhai New Area Tanggu Immovable No. 1030239	No. 50 Donglian Road, Tanggu, Binhai New Area	25,735.20	295,963,380.00	292,622,935.55	The right holder of the certificate is Tianjin Port Holdings Co., Ltd.
	6	Jin (2019) Binhai New Area Tanggu Immovable No. 1027903	Annex 1, No. 5212, 2nd Road, Tanggu Port, Binhai New Area	428,222.90			The right holder of the certificate is Tianjin Port Holdings Co., Ltd.
	7	Jin (2019) Binhai New Area Tanggu Immovable No. 1027902	Nos. 4589-66, 2nd Road, Tanggu Port, Binhai New Area	10,565.00			The right holder of the certificate is Tianjin Port Holdings Co., Ltd.
	8	Jin (2019) Binhai New Area Tanggu Immovable No. 1024633	Dongtudi, 2nd Road, Tanggu Port, Binhai New Area	1,553.20			The right holder of the certificate is Tianjin Port Holdings Co., Ltd.
	9	Property Certificate Jin Zi No. 107050900723	North of Xingang 2nd Road, West of Dongdi Road Branch, Tianjin Port	73,138.20	38,058,421.10	24,499,146.09
	10	Property Certificate Jin Zi No. 107050900724	North of Xingang 2nd Road, West of Dongdi Road, Tianjin Port	35,090.60	18,259,853.69	11,754,319.02
	11	Property Certificate Jin Zi No. 107050900729	No. 3990 Xingang 2nd Road, Tianjin Port	137,921.70	71,769,364.53	46,199,713.37
	12	Property Certificate Jin Zi No. 107050900730	No. 3990 Xingang 2nd Road, Tianjin Port	177,519.50	92,374,598.83	59,463,811.85
	Total			1,339,679.10	705,914,250.69	608,038,381.19

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VALUATION REPORT ON TIANJIN PORT CONTAINER

APPENDIX II

The two items of land use rights with Tianjin Five Continents International Container Terminal Co., Ltd. being the holder of the above-mentioned certificates are assets acquired in the merger, and the four items of land use rights with Tianjin Port Holdings Co., Ltd. being the holder are acquired through asset acquisition. The appraised enterprise provided the relevant documents, contracts, payment vouchers and other information, and the appraised enterprise is handling the registration of the change of ownership.

The valuation target and valuation scope of this project are consistent with the valuation target and valuation scope involved with the economic activity.

(III) Type and quantity of off-balance sheet assets declared by the enterprise

As at the valuation reference date (being 31 December 2020), Tianjin Port Container Terminal Co., Ltd. declared 67 off-balance sheet patents, details of which are set out below:

No.	No.						Patent certificate No.	Patent certificate No.
	No.	Name of patent	Utility model	Date of application	Date of authorisation	Status of Patent	Patent certificate No.
	1	Safety device for floating tire inflation	Utility model	1/12/2011	25/7/2012	Valid	2315963
	2	Controllable DC converter for rubber-tired container gantry crane	Utility model	22/10/2012	17/4/2013	Valid	2858705
	3	Transmission structure for magnesium chloride spraying machine driven by pallet truck	Utility model	7/6/2013	4/12/2013	Valid	3293591
	4	Rail pincer of the maintenance depot and bridge rail	Utility model	25/12/2013	18/6/2014	Valid	3631933
	5	Laser assisted anti-collision device	Utility model	26/12/2013	18/6/2014	Valid	3630296
	6	CCTV automatic lifting device based on lifting high-pole lamp	Utility model	13/3/2014	13/8/2014	Valid	3736579
	7	An ultra-high hanging rack	Utility model	24/11/2014	15/4/2015	Valid	4236086
	8	An anti-collision system for vehicles working in the yard	Utility model	24/10/2014	14/1/2015	Valid	4066098
	9	Intelligent and coordinated transportation system for collection and dispatching process	Utility model	29/6/2015	18/11/2015	Valid	4764189
	10	An electric-hydraulic pusher for oil receiving	Utility model	19/8/2016	15/2/2017	Valid	5925546
	11	A e-tag case	Utility model	30/11/2016	31/5/2017	Valid	6183326
	12	An emergency windbreak bag	Utility model	30/11/2016	5/12/2017	Valid	6684203
	13	Horizontal container shipping carrier	Utility model	20/12/2017	10/7/2018	Valid	7585229
	14	A pull-type sensor	Utility model	20/12/2017	10/7/2018	Valid	7580115
	15	A load sensing connection structure	Utility model	20/12/2017	10/7/2018	Valid	7580114
	16	A port information display device	Utility model	30/11/2018	5/7/2019	Valid	9058260
	17	A new container trailer maintenance support	Utility model	21/12/2018	6/8/2019	Valid	9193584
	18	A new connection structure for container spreader and hanging rack	Utility model	20/12/2018	13/8/2019	Valid	9828211
	19	Safety inspect structure for the connection of rail bridge rack and spreader	Utility model	6/12/2017	13/11/2018	Valid	8070707
	20	A safety inspection device for rail bridge car chain	Utility model	6/12/2017	18/9/2018	Valid	7856592
	21	A mobile fire-extinguishing device for container terminal operation	Utility model	6/12/2017	18/9/2018	Valid	7865471

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APPENDIX II

VALUATION REPORT ON TIANJIN PORT CONTAINER

No.	No.						Patent certificate No.	Patent certificate No.
	No.	Name of patent	Utility model	Date of application	Date of authorisation	Status of Patent	Patent certificate No.
	22	A portable sliding device for vehicle scale	Utility model	1/9/2018	7/6/2019	Valid	8929324
	23	A new plug-type vehicle spacing adjustment device	Utility model	1/9/2018	7/6/2019	Valid	8937601
	24	A detection device for the abnormal opening of container door at the automatic container rail bridge	Utility model	12/9/2018	7/6/2019	Valid	8929705
	25	Exhaust purification device for non-road mobile machinery	Utility model	1/9/2018	20/8/2019	Valid	9261709
	26	Power supply cable leadfair for the onshore power supply system	Utility model	1/9/2018	20/8/2019	Valid	9265762
	27	Plate-type replaceable filter for onshore motor	Utility model	1/9/2018	20/8/2019	Valid	9263372
	28	An anti-lifting device for container truck at the automatic container rail bridge	Utility model	12/9/2018	20/9/2019	Valid	9396368
	29	Trailer reverse positioning device	Utility model	20/4/2012	21/11/2012	Valid	2513614
	30	Sweep template for container truck trailer	Utility model	27/9/2012	17/4/2013	Valid	2859560
	31	Twist lock structure for container twin-lifting spreader	Utility model	27/9/2012	17/4/2013	Valid	2860112
	32	Dual-power yard bridge transfer system based on super battery	Utility model	27/9/2012	17/4/2013	Valid	2859028
	33	Double-beam shore bridge device	Utility model	17/4/2013	6/11/2013	Valid	3237231
	34	Electric and mobile device for automatic container terminal integrated track guiding	Utility model	17/4/2013	18/12/2013	Valid	3324117
	35	Forklift dipper	Utility model	16/8/2013	19/2/2014	Valid	3413966
	36	Safety protection device for tire inflation	Utility model	16/8/2013	26/3/2014	Valid	3467541
	37	Automatic obstacle-navigation structure for snow shovel	Utility model	22/10/2014	18/3/2015	Valid	4182966
	38	Multi-point hanging rack for the unloading of an overloaded container	Utility model	22/10/2014	18/3/2015	Valid	4183414
	39	Comfortable cushion for driver’s seat of container crane	Utility model	22/10/2014	18/3/2015	Valid	4183243
	40	An electrically powered twist lock structure for container spreader	Utility model	4/2/2015	16/9/2015	Valid	4608820
	41	Spreader PLC module fixing device	Utility model	15/12/2015	29/6/2016	Valid	5325008
	42	Driving device for the shield of the sliding wire power-on car	Utility model	15/12/2015	6/7/2016	Valid	5344660
	43	Remote wireless container spreader monitoring device	Utility model	9/4/2016	7/9/2016	Valid	5524030
	44	Plate for fixing steel rope	Utility model	13/8/2016	12/4/2017	Valid	6073699
	45	A tool for installing the fire-proof stand of frequency converter	Utility model	6/9/2017	18/5/2018	Valid	7356778
	46	A windproof anchoring device for shore crane of container terminal under construction or old container terminal	Utility model	6/9/2017	18/5/2018	Valid	7358530
	47	A car for quick installation of wheels	Utility model	6/9/2017	18/5/2018	Valid	7358531
	48	A car mixed wheel structure for the crane at the container yard	Utility model	18/7/2018	23/4/2019	Valid	8757871
	49	A regular anti-skid device for rail lifting equipment	Utility model	18/7/2018	14/5/2019	Valid	8848125
	50	Modular power transformation system	Utility model	18/7/2018	14/5/2019	Valid	8848963
	51	A two-lane detection and recognition system for the automatic container rail bridge	Utility model	12/9/2018	27/9/2019	Valid	9427736
	52	A structure positioning device for the automatic container rail bridge	Utility model	11/9/2019	15/11/2019	Valid	9621428
	53	A container truck guiding device for the automatic container rail bridge	Utility model	11/9/2018	17/4/2020	Valid	10319714
	54	A cable buffer protection device for the crane spreader	Utility model	18/11/2019	22/9/2020	Valid	11519182

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APPENDIX II

VALUATION REPORT ON TIANJIN PORT CONTAINER

No.	No.						Patent certificate No.	Patent certificate No.
	No.	Name of patent	Utility model	Date of application	Date of authorisation	Status of Patent	Patent certificate No.
	55	The draft arm for the integrated control unit of the rubber-tired container crane	Utility model	18/11/2019	8/9/2020	Valid	11436937
	56	A spreader spacing interlocking detection device	Utility model	28/10/2019	8/9/2020	Valid	11427296
	57	An anti-swing device for the four-rope spreader of the automatic container rail bridge	Utility model	28/10/2019	8/9/2020	Valid	11418218
	58	Twin-lifting spreader electronic control system	Utility model	28/11/2019	8/9/2020	Valid	11439102
	59	An auxiliary device for replacing the wheel of towrope pulley of the yard bridge car	Utility model	28/11/2019	8/9/2020	Valid	11427809
	60	A safe lifting device for the container truck of the automatic container rail bridge	Utility model	21/10/2019	25/12/2020	Valid	12211399
	61	The waterproof switch box for the high-voltage cable of the container terminal	Invention	28/11/2011	3/8/2016	Valid	2156920
	62	Distribution centre type automatic container terminal loading and unloading system	Invention	29/6/2015	29/3/2017	Valid	2531790
	63	Multi-path rectangular-ambulatory-plane automatic container terminal transportation system	Invention	29/6/2015	31/5/2017	Valid	2498618
	64	A container loading and unloading system adopting double-lifting and parallel travelling crane	Invention	29/6/2015	25/8/2017	Valid	2588164
	65	The rope changing structure and method for the wrapping steel rope of the bracket car of shore bridge	Invention	19/7/2014	7/6/2019	Valid	3405801
	66	A contact-type automatic power-on device based on safe sliding wire power supply	Invention	25/8/2009	21/11/2012	Valid	1080955
67	67	An emergency life-saving device for the driver of rubber-tired gantry crane	Invention	13/8/2016	27/4/2018	Valid	2905640

• (IV) Type, quantity and carrying amount (or appraised value) of the assets involved in the conclusions of the reports issued by other agencies as reference

This valuation report made no reference to contents in the reports issued by other agencies.

IV. Type of Value

The type of value for the asset valuation refers to the value attribute of the asset valuation result and its form of manifestation.

For enterprise valuation, the general types of value for selection include market value, investment value (or specific investor value), value in use, liquidation value and residual value.

In accordance with the purpose of the valuation, valuation target and the market conditions at the time of valuation and other specific conditions, the type of value for this valuation is market value.

Market value refers to the estimated value of the valuation target in a normal fair trade on the valuation reference date by a willing buyer and a willing seller acting out of their own rationality and without any coercion.

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VALUATION REPORT ON TIANJIN PORT CONTAINER

APPENDIX II

V. Valuation Reference Date

The valuation reference date of this project is 31 December 2020. It was determined by the entrusting party based on the following reasons, with consideration given to the schedule of the proposed economic activity and nature of the economic activity:

1. The reference date is close to the date of implementation of the economic activity and can better reflect the status of the appraised assets.

2. The reference date is the accounting settlement date of Tianjin Port Container Terminal Co., Ltd. and is conducive to assets inspection and accurate presentation of the carrying amount of the appraised assets.

The valuation reference date is consistent with the valuation reference date set out in the ‘‘Asset Valuation Engagement Contract’’.

VI. Basis of Valuation

The basis of economic activity, basis of laws and regulations, basis of valuation standards, basis of ownership and basis of pricing followed in this valuation are mainly as follows:

(I) Basis of economic activity

1. ‘‘Resolutions of the Third Board Meeting of 2021 of Tianjin Port (Group) Co., Ltd.’’ (20 February 2021);

2. ‘‘Resolutions of the 16th Extraordinary Meeting of the Ninth Session of the Board of Tianjin Port Holdings Co., Ltd.’’ (26 February 2021).

(II) Basis of laws and regulations

1. ‘‘Asset Appraisal Law of the People’s Republic of China’’ (Adopted at the 21st Meeting of the Standing Committee of the Twelfth National People’s Congress on 2 July 2016);

2. ‘‘Company Law of the People’s Republic of China’’ (4th Amendment adopted at the 6th Meeting of the Standing Committee of the Thirteenth National People’s Congress on 26 October 2018);

3. ‘‘Law of the People’s Republic of China on Sino-foreign Equity Joint Ventures’’ (Presidential Decree No.48 of the People’s Republic of China);

4. ‘‘Regulations for the Implementation of the Law of the People’s Republic of China on Sinoforeign Equity Joint Ventures (Amended in 2014);

5. ‘‘Law of the People’s Republic of China on the State-Owned Assets of Enterprises’’ (Adopted at the 5th Meeting of the Standing Committee of the Eleventh National People’s Congress on 28 October 2008);

6. ‘‘Law of the People’s Republic of China on Ports’’ (Adopted at the 3rd Meeting of the Standing Committee of the Tenth National People’s Congress on 28 June 2003);

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VALUATION REPORT ON TIANJIN PORT CONTAINER

APPENDIX II

1. ‘‘Land Administration Law of the People’s Republic of China’’ (Adopted at the 11th Meeting of the Standing Committee of the Tenth National People’s Congress on 28 August 2004);

2. ‘‘Urban Real Estate Administration Law of the People’s Republic of China’’ (Adopted at the 29th Meeting of the Standing Committee of the Tenth National People’s Congress on 30 August 2007);

3. ‘‘Civil Code of the People’s Republic of China’’ (Adopted at the third meeting of the Thirteenth National People’s Congress and implemented from 1 January 2021);

4. ‘‘Administrative Measures for Assessment of State-owned Assets’’ (State Council Decree [1991] No. 91 of the People’s Republic of China);

5. ‘‘Notice of Ministry of Finance Forwarded by General Office of the State Council on Opinions Concerning Reforming the Administration of State-Owned Assets Valuation and Strengthening the Supervision and Administration of Assets Valuation’’ (General Office of the State Council G.B.F. [2001] No. 102) and relevant supporting documents promulgated by Ministry of Finance;

6. ‘‘Interim Measures for the Administration of Assessment of State-owned Assets of Enterprises’’ (State Council SASAC Decree No. 12);

7. ‘‘Notice on the Relevant Issues on Strengthening the Administration of State-owned Assets Assessment’’ (SASAC Property [2006] No. 274 of the SASAC of State Council);

8. ‘‘Measures for the Supervision and Administration of the Transactions of State-owned Assets of Enterprises’’ (Order No. 32 of the SASAC of the State Council and the Ministry of Finance);

9. ‘‘Interim Measures for the Supervision and Administration of State-owned Assets of Enterprises’’ (State Council Decree [2003] No. 378);

10. Notice of State-owned Assets Supervision and Administration Commission of Tianjin People’s Government on Releasing ‘‘Measures for the Administration of State-owned Assets Appraisal by the SASAC of Tianjin’’ (Jin Guo Zi [2018] No. 5);

11. ‘‘Notice on the Relevant Matters Concerning the Audit of Valuation Reports of State-owned Assets of Enterprises’’ (G.Z.C.Q [2009] No. 941);

12. ‘‘Tianjin Land Administration Regulations’’ (Announcement No. 86 promulgated by the Standing Committee of Tianjin Municipal People’s Congress);

13. ‘‘Notice on Several Issues Concerning the Value-added Tax Reform’’ (Cai Shui [2008] No. 170);

14. Notice of the Ministry of Finance and the State Administration of Taxation on Adjusting Value-added Tax Rates (Cai Shui [2018] No. 32);

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1. Notice on Implementing the Pilot Program of Replacing Business Tax with Value-added Tax in an All-round Manner (Cai Shui [2016] No. 36);

2. ‘‘Announcement on Relevant Policies for Deepening the Value-added Tax Reform’’ (Announcement [2019] No. 39 of the Ministry of Finance, the State Administration of Taxation and the General Administration of Customs);

3. Other relevant laws and regulations.

(III) Basis of valuation standards

1. Basic Rules for Asset Appraisal (Cai Zi [2017] No. 43);

2. Professional Code of Ethics for Asset Valuation (Zhong Ping Xie [2017] No. 30);

3. Practice Guidelines for Asset Valuation – Asset Valuation Methodology (Zhong Ping Xie [2019] No. 35);

4. Practice Guidelines for Asset Valuation – Asset Valuation Procedures (Zhong Ping Xie [2018] No. 36);

5. Practice Guidelines for Asset Valuation – Asset Valuation Report (Zhong Ping Xie [2018] No. 35);

6. Practice Guidelines for Asset Valuation – Asset Valuation Engagement Contract (Zhong Ping Xie [2017] No. 33);

7. Practice Guidelines for Asset Valuation – Asset Valuation Files (Zhong Ping Xie [2018] No. 37);

8. Practice Guidelines for Asset Valuation – Use of Expert Work and Relevant Report (Zhong Ping Xie [2017] No. 35);

9. Practice Guidelines for Asset Valuation – Enterprise Value (Zhong Ping Xie [2018] No. 38);

10. Standards for the Appraisal of Assets – Real Estate (Zhong Ping Xie [2017] No. 38);

11. Practice Guidelines for Asset Valuation – Intangible Assets (Zhong Ping Xie [2017] No. 37);

12. Practice Guidelines for Asset Valuation – Machinery and Equipment (Zhong Ping Xie [2017] No. 39);

13. Guidelines for the Assets Appraisal of Intellectual Property (Zhong Ping Xie [2017] No. 44);

14. Quality Control Guidance on the Business of Asset Valuation Agencies (Zhong Ping Xie [2017] No. 46);

15. Guiding Opinions on Types of Value under Asset Valuation (Zhong Ping Xie [2017] No. 47);

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1. Guiding Opinions on Legal Ownership of the Asset Valuation Target (Zhong Ping Xie [2017] No. 48);

2. Guiding Opinions on Appraisal of Patent Assets (Zhong Ping Xie [2017] No. 49);

3. Guidance on Valuation Report of State-owned Assets of Enterprises (Zhong Ping Xie [2017] No. 42);

4. Quality Control Guidance on the Business of Valuation Agencies (Zhong Ping Xie [2017] No. 38);

5. Code for Real Estate Appraisal (GB/T 50291-2015);

6. Regulations for Valuation on Urban Land (GB/T 18508-2014).

(IV) Basis of ownership

1. Detailed valuation schedule declared by the appraised enterprise;

2. Accounting statements, accounting ledgers, original vouchers, invoices and other accounting information;

3. Property ownership certificates provided by the appraised enterprise;

4. ‘‘Construction Works Planning Permit’’ provided by the appraised enterprise;

5. ‘‘Certificate of Filing Regarding the Commencement of Port Projects’’ provided by the appraised enterprise;

6. Acceptance certificate upon completion provided by the appraised enterprise;

7. ‘‘Land Use Right Transfer Contract’’ provided by the appraised enterprise;

8. ‘‘Motor Vehicle Driving Permit of the PRC’’ provided by the appraised enterprise;

9. ‘‘Motor Vehicle Ownership Registration Certificate of the PRC’’ provided by the appraised enterprise;

10. Other relevant explanatory information provided by the appraised enterprise.

(V) Basis of pricing

1. Asset valuation declaration information, relevant original vouchers and status description provided by the appraised enterprise;

2. Accounting statements, purchase contracts, invoices and other financial information provided by the appraised enterprise;

3. Tender and bidding documents, construction drawings, construction contracts and related information provided by the appraised enterprise;

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1. Tianjin Construction Project Budget Base Price (Year of 2020);

2. Tianjin Decoration and Renovation Project Budget Base Price (Year of 2020);

3. Tianjin Installation Project Budget Base Price (Year of 2020);

4. ‘‘Tianjin Municipal Project Budget Base Price’’ (Year of 2016);

5. ‘‘Tianjin Construction Project Pricing Methods’’ (DBD29-313-2020);

6. Tianjin Engineering Cost Information (December 2020);

7. ‘‘Stipulations on Compiling Estimate and Budget for Water Transportation Construction Engineering’’ (JTS/T 116-2019);

8. ‘‘Quota for Maritime Works in Seaport’’ (JTS/T 276-1-2019);

9. ‘‘Quota for Per-shift Cost of Ships and Machinery Used in Coastal Port Engineering’’ (JTS/T 276-2-2019);

10. ‘‘Reference Quota for Coastal Port Engineering’’ (JTS/T 276-3-2019);

11. ‘‘Quota for the Volume of Concrete and Mortar Used in Marine Traffic Engineering’’ (JTS/T 277-2019);

12. ‘‘Dredging Project Budget Quota’’ (JTS/T 278-1-2019);

13. ‘‘Unit Expense Quota for Ships of Dredging Engineering’’ (JTS/T 278-2-2019);

14. ‘‘Basic Price for Materials Used in Quota for Water Transportation Engineering’’ (2019);

15. Information related to land market transactions in Tianjin;

16. ‘‘Updated Results of the Benchmark Land Premium for Towns of Tianjin (Binhai New Area)’’;

17. ‘‘2020 China’s Mechanical and Electrical Products Price Database Query System’’;

18. Information acquired through price enquiries with equipment manufacturers;

19. Information acquired through price enquiries with equipment vendors;

20. RMB Loan Prime Rate (LPR) as at the valuation reference date;

21. ‘‘Notice of Municipal Bureau of State Land, Resources and Housing on the Announcement of Updated Results of Implementation of the Benchmark Land Premium for Towns’’ (Jin Guo Tu Fang Yong [2017] No. 19);

22. Other relevant information collected by valuers through on-site inspection, market research and other means.

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VII. Valuation Methodology

(I) Choices of Valuation Methodology

According to the requirements of assets valuation standards, three methods can be adopted in the valuation of the enterprise, namely the income approach, market approach and asset-based approach. The income approach is the quantification and capitalisation of the expected profitability of the overall assets of the enterprise, emphasising the overall expected profitability of the enterprise. The market approach assesses the current fair market value of the valuation target with reference to similar targets in the real market. The characteristics of this approach are that the valuation data comes directly from the market and the valuation results are convincing. The assetbased approach refers to the practice of determining the value of the valuation target based on the reasonable valuation of each of the assets and liabilities of the enterprise.

The appraised enterprise is an unlisted company, and listed companies in the same industry differ quite significantly from the appraised enterprise in business structure, operation model, enterprise scale, asset allocation and utilisation, operation stage, growth capability, operational risk and financial risk of the enterprise. On top of that, there are relatively few transactions from comparable enterprises in the same industry in the period close to the valuation reference date. Therefore, it is very difficult to collect relevant reliable operation and financial data of comparable transactions, which makes it impossible to measure the appropriate value ratio. Therefore, this valuation does not adopt the market approach.

The appraised enterprise has the foundation and condition to operate as a going concern, adequate historical operational and financial data and information and a relatively high profitability. Its future income and risks can be predicted and quantified. Therefore, this valuation adopts the income approach.

On-balance sheet and off-balance sheet assets and liabilities of the appraised enterprise for this valuation as at the valuation reference date are identifiable, and all these identifiable assets and liabilities can be assessed individually by adopting the appropriate valuation methods. The appraised enterprise does not have unidentifiable and unmeasurable assets and liabilities that have a significant impact on the valuation conclusion. Therefore, this valuation adopts the asset-based approach.

In conclusion, considering the valuation purpose and the characteristics of the valuation target, this valuation adopts the income approach and the asset-based approach. Taking into account the applicability of valuation methods and in order to fulfill the valuation purpose, the valuation result obtained by using the asset-based approach has been selected to be the final valuation result this time.

(II) Introduction of the asset-based approach

The asset-based approach takes the investment amount required for rebuilding an enterprise or an independent profit-making entity equivalent to the valuation target on the valuation reference date as the basis for determining the value of the overall assets, which specifically refers to a method of obtaining the enterprise value by deducting the sum of the appraised value of various elemental assets by the appraised value of liabilities.

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The valuation methods of different categories of assets and liabilities are as follows:

1. Current assets

The current assets included in the scope of this valuation include cash and cash equivalents, accounts receivable, prepayments, other receivables and inventories, which are described as follows:

• (1) Cash and cash equivalents

The cash and cash equivalents in this project include cash on hand and bank deposits.

For cash on hand, the book balance of cash on the valuation reference date is estimated according to cash count results and the amount of cash receipts and payments incurred from the cash count date to the valuation reference date. After it is checked against the carrying amount of the enterprise without variance, the appraised value is determined at the declared book value.

For bank deposits, the verified book value is determined as the appraised value after it is checked against the journal entry for cash deposited to banks with no error found and the deposit in transit is checked against the Bank Reconciliation Statement, and the deposit balance of the bank deposit account on the valuation reference date is confirmed by letter.

• (2) Receivables

Receivables of this project include accounts receivable and other receivables.

Firstly, based on verification of the accuracy of receivables and with the aid of historical information and current investigation and understanding, the valuers specifically analysed the amount, time and reason of the arrears, the recovery situation, the funds, credit and operation and management of the debtor. As to the external debts, the valuers verified the information by sending letters and reviewing relevant contracts according to the materiality and the characteristics of projects. When it is not appropriate to send letters due to special reasons, the valuers performed relevant alternative procedures during the valuation and examined the original evidence.

Secondly, the valuers further analysed the loss on bad debts on the basis of verification. By communicating with the enterprise’s accounting personnel and with the help of historical information and investigation results, the valuers analysed specifically the time and reasons of such receivables, the recovery of historical receivables and business conditions of the debtors, to make a judgement about the recoverability of receivables.

• (1) For receivables without obvious evidence that such amounts cannot be recovered, the valuers determined the valuation results by the declared book value.

• (2) For receivables related to lawsuits, this valuation recognised the appraised risk loss according to the court’s judgements and enforcement that indicated the parties had no enforceable assets.

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(3) Prepayments

Based on the verification of relevant financial information, the valuers analysed the time of occurrence and aging of each prepayment and the credit status of the debtor. In the absence of bankruptcy, contract cancellation, or inability to supply goods on time as according to the contract by the relevant debtor, the valuers considered that prepayments could be realised according to the purpose of such prepayments and determined the appraised value at the declared book value.

(4) Inventories

Inventories are raw materials normally used in the ordinary course of business. The book value of raw materials is composed of purchase prices and reasonable costs. Since the turnover of raw materials is relatively fast and most of the raw materials were recently purchased, the book value is relatively close to the market price, and the appraised value is determined as the actual quantity multiplied by the unit price in books.

2. Valuation of non-current assets

Non-current assets of this project include investments in other equity instruments, long-term equity investments, fixed assets, construction in progress, intangible assets and deferred income tax assets.

(1) Investments in other equity instruments

There are 2 items of long-term equity investment with an investment ratio of less than 20% in total. The valuers first verified the reasons and book values of such investments and, based on the review of the relevant information, determined the appraised values according to different conditions.

(2) Long-term equity investments

For long-term equity investments, the valuers first verified the reasons for formation, carrying amount, and actual status of long-term equity investments and determined the authenticity and completeness of long-term equity investments by reviewing the articles of association and relevant accounting records.

The valuation individually assessed Tianjin ShengGang Container Technology Development & Services Co., Ltd., the investee under the long-term equity investment, as a whole, and determined the appraised value by its share proportion.

In determining the appraised value of long-term equity investments, the valuers did not consider the premium and discount caused by factors such as controlling interest and minority interest.

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(3) Fixed assets

Fixed assets of this project include constructed assets and machineries, of which constructed assets include buildings, structures and other ancillary facilities; machineries include machinery equipment, vehicles and electronic equipment. The replacement cost approach was mainly used for valuation based on different conditions and characteristics of the assets.

The replacement cost approach refers to the deduction of the substantial devaluation, functional devaluation, and economic devaluation of the appraised asset from the total costs of re-purchasing or re-creating a new appraised asset on the valuation reference date, and the difference is used as a method for the valuation of the appraised asset.

For the retired machineries and those beyond service life, the appraised value is determined according to the actual condition of the machineries, at the recoverable net income or second-hand machinery price.

Constructed assets

• ① Buildings

A. Basic information

The buildings are specifically operating buildings and office buildings of the appraised enterprise, and there are 37 items in total. They are built between 1986 to 2020 with frames of building structure, reinforced concrete, brick-concrete etc., with a total floor area of 31,830.71 square meters, and are located on the operating site of Tianjin Port Container Terminal Co., Ltd.

• B. Selection of valuation methods and the reasons

The appraised constructions are industrial buildings and the land occupied is for industrial use. Through on-site inspection and investigations in the surrounding areas, no case of lease and sale of buildings occurred in this area. The market approach and income approach are not suitable. Therefore, this valuation adopts the replacement cost approach for the valuation of constructions.

C. Valuation process

Cost method takes the cost-of-production theory of value as its theoretical basis. The estimation formula is:

Appraised value of the appraised building = replacement cost (unit price) × gross floor area × integrated residue ratio

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a. Determination of replacement cost (unit price)

Based on on-site inspections and evaluation records, the engineering base price is determined by the estimate of relevant quota per unit of engineering quantity in accordance with ‘‘Tianjin Construction Project Budget Base Price (2020)’’, ‘‘Tianjin Decoration and Renovation Project Budget Base Price’’, ‘‘Tianjin Installation Project Budget Base Price’’, ‘‘Measures for the Pricing of Tianjin Construction Project’’ of 2020 and ‘‘Tianjin Engineering Cost Information’’ (December 2020) and with reference to as-built drawings, engineering budgets and final accounts and other relevant information provided by the appraised enterprises. On this basis, the valuers consider the relevant preliminary costs and other expenses, the capital cost and other aspects. The basic calculation formula is as follows:

Replacement cost = construction cost + preliminary costs and other expenses + capital cost – deductible VAT

Capital cost is the funding cost of the valuation target for using funds during the reasonable construction period. Its capital cost is calculated when the reasonable construction period exceeds 6 months. The calculation formula is as follows:

Capital cost = (Cost of construction and installation + preliminary costs and other expenses) × reasonable construction period × loan interest rate × 1/2

Loan interest rate is determined according to the RMB Loan Prime Rate (LPR) as at the valuation reference date. The input of capital is considered even in the construction period.

b. Determination of residue ratio

According to on-site inspection and the specific condition of the appraised buildings, the valuers determined the integrated residue ratio according to the observed residue ratio mainly as supplemented by the life-determined residue ratio, i.e.:

Integrated residue ratio = observed residue ratio × 60% ＋ life-determined residue ratio × 40%

Observed residue ratio

The observed residue ratio is determined mainly based on the actual condition of the buildings. Based on on-site inspection of the actual condition of the structure, storey height, eaves height, doors and windows, fixtures and decoration and the configuration of ancillary facilities of the buildings, and with consideration to the design, use, maintenance, repair and upkeep of the buildings, the valuers adopted the observation method to rate the structure, renovation and equipment of the buildings respectively as three sub-projects, and calculated the actual score of each sub-project respectively according to their respective weighting in the buildings. Finally, the valuers summed up the total scores and determined the observed residue ratio.

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Life-determined residue ratio

The life-determined residue ratio is calculated in accordance with the used life and economic useful life of the buildings.

Life-determined residue ratio = [(economic useful life – used life)/economic useful life] × 100%

• c. Determination of appraised value

Appraised value = ∑ [replacement cost × integrated residue ratio]

• ② Valuation on structures and other ancillary facilities

A. Basic information

There are a total of 118 items of the terminal, yard and yard ancillary facilities etc., which were completed between 1981 to 2020 respectively. Construction structures include the concrete structure, reinforced concrete structure, high pile beam etc., all of which were in normal use during the on-site inspection. They are located in the operating site of the appraised enterprise.

B. Valuation process

a. Replacement cost

In accordance with the asset inventory valuation schedule and the verification of the relevant financial information of the appraised structures, and with the cooperation of relevant personnel, the valuers conducted an onsite inspection of the location, form, surface conditions and intactness of structures, filled in the survey records, and reviewed the relevant construction contracts and completion reports, etc.

Based on on-site inspection and evaluation records, the valuers calculated the replacement cost of the structures according to prevailing criteria with consideration given to necessary expenses such as preliminary costs and other expenses and capital cost, in accordance with the current budget base price for construction and installation projects in Tianjin, the relevant hydraulic quota issued by Ministry of Transport, the current market price of building materials, and relevant information on engineering cost.

Capital cost is the funding cost of the valuation target for using funds during the reasonable construction period. Its capital cost is calculated when the reasonable construction period exceeds 6 months. The calculation formula is as follows:

Capital cost = (Cost of construction and installation work + preliminary costs and other expenses) × reasonable construction period × loan interest rate × 1/2

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Loan interest rate is determined according to the RMB Loan Prime Rate (LPR) as at the valuation reference date. The input of capital is considered even in the construction period.

• b. Determination of residue ratio

Based on on-site inspection and the specific condition of the appraised structures, the combination of life approach and observation approach is adopted to determine the integrated residue ratio. The basic formula is as follows:

Integrated residue ratio of structures = observed residue ratio × 60% ＋ lifedetermined residue ratio × 40%

• c. Determination of appraised value

Appraised value = ∑ (replacement cost × integrated residue ratio)

Machineries

According to the purpose of this valuation and the principle of continuous use, the replacement cost method is mainly adopted for the valuation based on the market price, with consideration given to the characteristics of the appraised machineries and the information collected.

The calculation formula is: appraised value = replacement cost × residue ratio

• ① Machinery equipment and electronic equipment

• A. Determination of replacement cost

The replacement cost of machinery equipment is composed of equipment purchase price, freight and miscellaneous charges, installation costs, other expenses and capital cost etc., with the input VAT incurred upon purchase being deducted.

Replacement cost = equipment purchase price + freight and miscellaneous charges and installation costs + preliminary costs and other expenses + capital costs – input VAT incurred upon purchase

In general, installation was not required for the electronic equipment with smaller value within the scope of valuation (or the installation was handled by the vendor), and the freight charges was low. Therefore, the replacement cost can be determined by reference to the prevailing market purchase price.

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APPENDIX II

The replacement cost of the equipment that has been eliminated or upgraded is determined using the market comparison approach value.

• i. Determination of equipment purchase price

For equipment in which the market price on the valuation reference date could be obtained by making inquiries with equipment manufacturers, agents and dealers, the purchase price is determined according to the market price. For the purchase price of equipment in which the market price cannot be obtained from by market inquiries, such price may be determined by reviewing the pricing information of mechanical and electrical products in 2020 and by online price enquiries. The value of self-made non-standard equipment is comprehensively determined mainly according to the material costs, freight and miscellaneous charges, labour costs and mechanical shift costs. The purchase price of imported equipment is determined by inquiring domestic agents or adopting domestic equipment alternative.

ii. Determination of freight and miscellaneous charges

Freight and miscellaneous charges are calculated based on the purchase price of the equipment and different freight and miscellaneous rates are applied according to the distance between the manufacturer and the equipment installation location. If the terms of supply specify that the supplier shall be responsible for the delivery and installation (which has been included in the purchase price), freight and miscellaneous charges shall be excluded.

iii. Determination of installation cost

Installation cost is calculated on the basis of tax-inclusive equipment purchase price and charged at different installation rates with reference to information such as ‘‘Tianjin Installation Project Budget Base Price’’, ‘‘Coastal Port Loading and Unloading Machinery and Equipment Installation Quota’’ and ‘‘Manual of Commonly Used Data and Parameters for Asset Valuation’’, and according to the characteristics, weight and the level of installation difficulty of the equipment.

For small equipment that requires no installation, installation cost is not taken into account.

• iv. Determination of VAT input tax incurred upon procurement of equipment

VAT input tax incurred upon procurement of equipment = purchase price of the equipment with taxes included × VAT rate/(1 + VAT rate) + freight and miscellaneous charges × corresponding VAT deduction rate

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v. Determination of other expenses

Other expenses include the construction enterprise management fees, survey and design fees, engineering supervision fees, tendering and bidding management fees and environmental assessment fees, and are calculated and charged according to the corresponding documents and the standard for other expenses of construction projects at the equipment’s location, i.e., Tianjin Port.

vi. Determination of capital cost

Capital cost is the cost for raising funds used by the valuation target in a reasonable construction period. For large and medium-sized equipment (with a purchase price above RMB1 million) with a reasonable construction period of more than 6 months, its capital cost shall be calculated according to the following formula:

Capital cost = (equipment purchase price + freight and miscellaneous charges and installation costs + other expenses) × reasonable construction period × loan interest rate × 1/2

Loan interest rate is determined according to the RMB Loan Prime Rate (LPR) as at the valuation reference date. The input of capital is considered to be even in the construction period.

B. Determination of residue ratio

For equipment with simple structure and relatively low value, the valuation of residue ratio adopts the life approach; for equipment purchased a relatively long time ago with relatively complex structure and relatively higher value, the valuation of residue ratio is determined using the integrated approach; for measuring equipment, the residue ratio is determined in accordance with the corresponding mandatory administration regulations provided in Metrology Law and the Rules for the Implementation of Metrology Law.

i. Life approach

The economic useful life of each type of equipment is reasonably determined by referring to the ‘‘Manual of Commonly Used Data and Parameters for Asset Valuation’’ and other information, combined with other relevant standards as the basis.

Calculation formula:

Residue ratio = (1 – used life/economic useful life) × 100%

The calculation formula for the equipment beyond service life is as follows:

Residue ratio = remaining life/(used life + remaining life) × 100%

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ii. Observation approach

Through on-site inspection, reviewing technical information and introduction by relevant personnel of the enterprise, the valuers rated each part of the equipment according to the mechanical performance and operation of the equipment, the depletion of its main components, its appearance, as well as the use, maintenance and upkeep of the equipment, and determined the observed residue ratio of the equipment with comprehensive consideration of equipment management, operating environment and other factors.

iii. Integrated approach

This approach determines the integrated residue ratio based on weighted summation of the residue ratio of on-site inspection technology valuation (evaluation) (or observed residue ratio), which is determined using the onsite inspection technology valuation (evaluation), and the residue ratio determined using the life approach. In general, the observation approach accounts for 60% and the life approach accounts for 40%.

Calculation formula:

Integrated residue ratio = observation approach weighting × observed residue ratio + life approach weighting × residue ratio determined by the life approach

• C. Determination of appraised value

Appraised value = replacement value × residue ratio

For the equipment purchased long time ago or disused, the appraised value is determined by adopting the recoverable net income or the second-hand machinery price.

• ② Vehicles

• A. Determination of replacement cost

Based on the fixed assets – vehicle valuation schedule and related information, the valuers conducted an on-site inspection of the appraised vehicles based on on-site inventory and verification, and determined the replacement cost based on the prevailing market price, taking into account vehicle purchase tax and vehicle license charges (including license charges and inspection charges) and deducting the deductible VAT.

Replacement cost = current purchase price + vehicle purchase tax + vehicle license charges – deductible VAT

The full replacement cost of the vehicles whose production has been halted or eliminated and upgraded was determined according to the market comparison approach value.

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B. Determination of residue ratio

In accordance with relevant regulations, the theoretical residue ratio is determined according to the principle of the lower of the two methods: the residue ratio determined by driving mileage and the residue ratio determined by the life approach; then the residue ratio is determined by the technical valuation approach by combining the rating of each part according to on-site inspection.

Residue ratio determined by the life approach = [(economic useful life – used life)/economic useful life] × 100%

Residue ratio determined by driving mileage = [(specified mileage – traveled mileage)/specified mileage] × 100%

Integrated residue ratio = theoretical residue ratio × 40% + residue ratio determined by the technical valuation approach × 60%

• C. Determination of appraised value

The basic calculation formula is: appraised value of vehicle = ∑ (replacement cost × residue ratio)

(4) Construction in progress

For construction in progress, the valuers understood the book value composition and the physical progress of construction through on-site inspection, the construction contracts and relevant information. The enterprise payment process was basically consistent with the actual physical progress of the construction in progress, and the actual payment was consistent with the book value. The book value basically reflected the total costs of reforming the completed workload of the construction in progress on the valuation reference date, and its appraised value was determined at book value.

(5) Intangible assets

Intangible assets of this project are 12 items of land use rights, 140 items of various application software, system software and patents purchased, and 67 items of offbalance sheet patents.

① Land use rights

The land use rights were obtained by the appraised enterprise by transfer, with an area of 1,339,709.10 square meters. Given the actual conditions of the appraised lands, this valuation adopted the market approach and the benchmark land premium coefficient correction approach for valuation with consideration given to the local real estate market development level and the relevant information collected by the valuers.

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VALUATION REPORT ON TIANJIN PORT CONTAINER

The benchmark land premium coefficient correction approach is a method that uses the urban benchmark land premium and the results of the land price correction system, compares the regional factor and individual factor of the land to be appraised with the factors of the benchmark land premium in accordance with the alternative principle, and then obtains the price of the land to be appraised at the valuation reference date by corrections. The formula for the price of land to be appraised under the benchmark land premium coefficient correction approach is as follows:

Land price per floor area under the benchmark land premium coefficient correction approach = benchmark land premium of the applicable grade × regional factor correction coefficient × plot ratio correction coefficient × term correction coefficient × transaction date correction coefficient × other factor correction coefficient ± development correction

Market comparison approach: a method to obtain the price of the land to be appraised by comparing it with similar piece of land traded around the valuation reference date according to the alternative principle, and then properly adjusting the known price of such similar piece of land based on the difference in trading condition, date, region, and specific elements of the two pieces of land to obtain the land price of the valuation target on the valuation date. The calculation formula of the market comparison approach is as follows:

PD = PB × A × B × D × E

In the formula:

PD = price of the land to be appraised

PB = price of comparable land

A = transaction condition correction coefficient

B = transaction date correction coefficient

D = regional factor correction coefficient

E = individual factor correction coefficient

Comparable transactions selected by the market approach are those conducted recently in the regions where the lands to be appraised are located, having strong comparability and relatively objective and reasonable correction system, and the assessment results are reliable. Accordingly, such results under the market comparison approach are adopted as the final results.

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• ② Other intangible assets – on-balance sheet

Other intangible assets are 140 items of various application software, system software and patents.

For the application software and system software, the valuers checked relevant books and original vouchers, learned their occurrence time, original amount and yield matching period, amortisation, and existing assets and rights, and after learning the market situation, the valuers determined the appraised value based on the current market price.

Patents included in this valuation scope are inventions and utility model patents, which are assessed by the cost approach in this valuation according to their characteristics.

• ③ Other intangible assets – off-balance sheet

Off-balance sheet patents included in this valuation scope are inventions and utility model patents, which are assessed by the cost approach in this valuation according to their characteristics.

• (6) Deferred income tax assets

For the deferred income tax assets corresponding to the provisions for the impairment of other equity instruments and government grants, the valuers verified their book value. The appraised value is determined at the declared value of the deferred income tax assets corresponding to the provisions for the impairment of other equity instruments, and the appraised value of of government grants is zero.

3. Liabilities

Liabilities included in this valuation scope include current liabilities and non-current liabilities. Current liabilities include short-term borrowings, accounts payable, advance receipts, employees’ remuneration payable, tax payable, interest payable, other payables and non-current liabilities due within one year. Non-current liabilities include long-term borrowings, deferred income and other non-current liabilities.

The valuers reviewed and verified the book value of liabilities mainly in accordance with the enterprise’s financial accounting system, and determined their appraised value at the amount of substantive liabilities of the enterprise in accordance with relevant provisions on asset valuation and with reference to the contents of liabilities accounts.

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(III) Income approach

1. Technical ideas

The income capitalisation approach is a method of reducing the estimated earnings of the enterprise from future operation into the amount of capital or investment on the reference date and then seeking the appraised value of the overall assets of the enterprise based on the idea of income reduction. In other words, it estimates the future expected cash flow of the enterprise and uses an appropriate discount rate to convert the expected cash flow into the current value to work out the enterprise value. The basic conditions for its application are as follows: the enterprise has the basis and conditions for continuous operation, there is a relatively stable relationship between operation and earnings, and the future earnings and risks are predictable and quantifiable. The key to using cash flow discounting method is the forecast of future expected cash flows, as well as the rather objectivity and reliability of data collection and processing. When the forecast of future expected cash flow is objective and fair and the discount rate selected is rather reasonable, the valuation results are relatively objective and well received by the market.

2. Valuation method

This valuation adopts the income approach to appraise the value of Tianjin Port Container Terminal Co., Ltd., based on the net cash flow of the enterprise in the next few years. The value of the entire shareholders’ equity is calculated by the adding the sum of value of operating assets calculated after discounting by appropriate discount rate with the value of surplus assets and the value of non-operating assets, then deducting the value of interestbearing debts. The valuation method is introduced briefly as follows:

(1) Valuation model

Considering the purpose of this valuation and the actual conditions of the valuation target, the valuers adopt the free cash flow discounting method of the enterprise to determine the value of operating assets of the enterprise, determine the overall value of the company by correction after analysing and considering the value of surplus assets and non-operating assets and liabilities, and determine the value of the entire shareholders’ equity by deducting interest-bearing debts of the company. The formula is as follows:

Value of the entire shareholders’ equity = enterprise value – interest-bearing debts

Enterprise value = value of operating assets + value of non-operating assets + value of surplus assets

The formula is as follows:

==> picture [206 x 25] intentionally omitted <==

In the formula:

E : value of the entire shareholders’ equity;

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• B : enterprise value;

• D : value of interest-bearing debts;

• P : value of operating assets;

• Ri : expected income in the ith year in the future (free cash flow);

• Rn : expected income in the perpetual period (free cash flow);

• r : discount rate;

• n : specific forecast period;

∑Ci: value of surplus assets and non-operating assets (excluding non-operating liabilities) subsisting at the valuation reference date

(2) Determination of income period and forecast period

This valuation assumes that the term of business of the company is perpetual period and adopts the sectioning method to forecast the income of the company, which separates future incomes of the company into incomes during the specific forecast period and incomes after the specific forecast period. The determination of the specific forecast period considers comprehensively the cycle of industry and products and the cycle of corporate development. According to the relevant introduction of the enterprise and the market research and forecast of the valuers, the trend of change in market demands will continue, and the operation is expected to stabilise within five years. Therefore, a detailed forecast from 2021 to 2025 is provided.

(3) Determination of income – cash flow

This valuation adopts the free cash flow of the enterprise to forecast the income, and determines the free cash flow of each period by forecasting the operating incomes and costs of the company during the future operation periods on the basis of the company’s operation history, current business operation, future development plans, market conditions, the macroeconomy and the overall industry development. The formula for free cash flow of the enterprise is as follows:

Free cash flow of the enterprise = net profit before interest and after tax + depreciation and amortisation – capital expenditure – net increase of working capital

(4) Determination of discount rate

Discount rate, also known as expected return on investment, is the rate discounting the expected future income of assets to the present value, and also an important parameter for determining the appraised value based on the discounted cash flow method. This valuation selects listed companies that are similar to the appraised enterprise and determines the discount rate according to the weighted average cost of capital (WACC).

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WACC refers to the rate of expected return of shareholders of an enterprise and the rate of expected return of interest-bearing creditors, the rate of expected return is determined based on the weighted average method using the proportion of the owners’ equity and interest-bearing debts in the capital structure of the enterprise. The formula is:

==> picture [295 x 23] intentionally omitted <==

In the formula:

WACC – weighted average cost of capital

Ke – cost of equity capital

Kd – cost of debt capital

T – income tax rate

D/E – capital structure

The cost of debt capital adopts the current average interest rate, and the weight is calculated by adopting the average debt composition of listed companies in the same industry.

The cost of equity capital is obtained by the international commonly used CAPM model, with the following formula:

Ke = Rf + β x ERP + Rs = Rf + β x (Rm – Rf) + Rs

Of which:

Ke – cost of equity capital

Rf – risk-free rate of return

Rm – market return

β – systematic risk coefficient

ERP – market risk premium

Rs – company-specific risk excess return

• (5) Determination of surplus assets and non-operating assets and liabilities

Non-operating assets (liabilities) represent assets that do not have direct ‘‘contribution’’ to the principal business or temporarily cannot make ‘‘contribution’’ to principal businesses. After analysis, the current accounts in other receivables, deferred income tax assets and other payables are unrelated to company’s core businesses. This valuation recognises such items as non-operating assets and liabilities.

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Surplus assets represent assets that are not necessary for production and operation, including surplus cash and other assets not related to the forecast of income and cash flow of the enterprise. The surplus assets of the company are determined by measuring the optimal balance of cash of the company and other assets not related to the forecast of income cash flow of the enterprise.

• (6) Determination of the appraised value of interest-bearing debts

Interest-bearing debts are the debt capital of the enterprise and represent debts requiring the appraised enterprise to make interest payments as at the valuation reference date. The valuation determines the appraised value of each corresponding item of interestbearing debt according to the asset-based approach.

• (7) Determination of the entire shareholders’ equity of the enterprise

According to the above-mentioned estimated data, the income approach formula is used to calculate and determine the appraised value of the entire shareholders’ equity of the enterprise.

VIII. Process and Implementation of Valuation Procedures

This valuation includes preliminary preparation work before the entrustment acceptance and valuation, on-site inspection and valuation estimation, summing up of analysis and writing of report and explanations, and issuance of asset valuation report.

(I) Entrustment acceptance

1. We accepted the entrustment to conduct a valuation on the value of the entire shareholders’ equity of Tianjin Port Container Terminal Co., Ltd., and after defining the valuation purpose, valuation target, valuation scope and valuation reference date, we signed an ‘‘Asset Valuation Engagement Contract’’ with the entrusting party.

2. In accordance with the agreed matters, we drafted the valuation project work plan, confirmed the valuers, set up the valuation team, entered the appraised enterprise and received its introduction of the appraised assets.

(II) Preliminary valuation preparation stage

After accepting the entrustment, the valuers guided the relevant financial and asset management personnel of the enterprise to fill in the ‘‘Asset Valuation Schedule’’ on the basis of asset inventory, and collected and prepared the information required for asset valuation.

(III) Valuation estimation stage

According to the relevant principles and provisions of asset valuation, the valuers conducted onsite inspection and valuation estimation, and performed the following procedures in respect of the appraised assets:

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1. Received the introduction of the overall situation of the enterprise and the history and status quo of the appraised assets by the entrusting party and the relevant personnel of the appraised enterprise, and learned about the enterprise’s financial system, operating conditions, fixed assets, technical status and so on.

2. Collected asset schedules and various financial, operational, sales information, conducted review and identification of the asset valuation declaration schedule provided by the enterprise, checked with relevant financial record and data of the enterprise, and collaborated with the enterprise to make adjustment to the issues identified; collected the property ownership certificates of the appraised assets and the documents that reflect performance, status, economic and technical indicators, etc. at the same time.

3. PricewaterhouseCoopers Zhong Tian LLP Tianjin Branch has audited the assets and liabilities included in the scope of this valuation and used the valuation reference date as the audit deadline, the appraised enterprise adopted the audited results as the declared book value of this asset valuation.

4. According to the asset valuation declaration schedule, the valuers conducted on-site inspection and verification of the assets, communicated with relevant personnel, learned about the operating and managing status of assets, learned about the detailed status of the specific targets within the scope of valuation through reviewing relevant information. A comprehensive verification of fixed assets was conducted, spot checks on the physical assets of inventory among current assets were carried out, and the asset valuation schedule was further refined according to on-site inspection results to ensure the schedule and statements are consistent with reality.

5. Verified property ownership certificate documents and investigated the property rights of the fixed assets included in the valuation scope to ensure that property ownership is clear.

6. According to the earnings forecast table, investigated and interviewed the management, made financial analysis and advised the company to adjust according to the information acquired; finally reached a consensus with the appraised enterprise regarding earnings forecast, and adopted the forecast data of the appraised enterprise.

(IV) Summarising the valuation stage

1. Collected and calculated various parameters according to the specific valuation methods and estimated the results of each valuation method used in this valuation. Required all valuers to adopt unified methods and standards in the process of valuation and estimation and carry out self-inspection and mutual inspection of valuation schedule, working papers and valuation descriptions.

2. Made comprehensive analysis, adjustment, modification and perfection of the preliminary valuation results of various valuation methods; analysed the rationality of the results of various valuation methods, and selected the appropriate valuation method results as the final valuation conclusion of the valuation report.

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(V) Valuation report submission stage

On the basis of the above-mentioned work, the valuers drafted the preliminary asset valuation report and internally reviewed the preliminary asset valuation report according to the valuation agency’s internal tri-review system and procedures for the asset valuation reports. On the condition that the independent judgement of valuation conclusion would not be affected, the valuers communicated with the entrusting party on the relevant content of the asset valuation report and issued the formal asset valuation report in the end after considering all relevant opinions.

IX. Valuation Assumptions

(I) General assumptions

1. Transaction assumption

The transaction assumption assumes that all assets to be appraised are in the process of the transaction. The valuer conducts the valuation according to the simulated market conditions such as the transaction conditions of the assets to be appraised. This is one of the most basic prerequisite assumptions for assets valuation.

2. Open market assumption

The open market assumption assumes that both parties of the transaction have equal status and both have the opportunity and time to obtain sufficient market information to make rational judgements on the function, purpose and transaction price of the assets (which are traded or intended to be traded on the market). This assumption is based on the fact that the assets can be traded on the open market.

3. Continue-to-use assumption

The continue-to-use assumption refers to the need that at the time of valuation, the valuation methods, parameters and basis shall be determined on the basis that the appraised assets would be used continuously according to the current purpose, usage, scale, frequency, environment and other circumstances, or used with certain changes.

4. Going concern assumption

It is a valuation assumption made taking all assets of an enterprise as the valuation target, under which the enterprise, as the main operating entity, continues to operate in the external environment in accordance with its business objectives. The business operator of the enterprise takes and is able to take the responsibility. The enterprise operates legally and is able to obtain adequate profits to maintain its ability to operate continuously.

(II) Special assumptions

1. There is no significant change in the relevant existing laws, regulations and policies of the PRC, or in the macroeconomic conditions of the PRC. There is no significant change in the political, economic and social environment in which the parties to this transaction are situated.

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1. It is assumed that the appraised enterprise can continue to operate in accordance with the planned business purpose and operation model, and its revenue can be predicted.

2. It is assumed that the management of the appraised enterprise is diligent and responsible and has adequate management skills and good professional ethics; the management risk, capital risk, market risk, technology risk, talent risk etc. of the appraised enterprise are in the controllable range or can be resolved effectively.

3. It is assumed that the asset scale and structure, principal businesses, the structure of revenues and costs, operating strategies and the cost control etc. of the appraised enterprise in future operation periods will continue in the way expected by the appraised enterprise, and will not have any material change. The assumption does not consider the possible profit or loss from the changes in the asset scale and structure and the principal businesses resulted from the changes of the management, operating strategies and the business environment in the future.

4. It is assumed that the enterprise involved with the valuation target will continue to operate with the existing management standard as at the valuation reference date, without the consideration of the impact of the management capability of future owners of the enterprise on the future revenues of the enterprise.

5. It is assumed that the financial structure and capital scale of the appraised enterprise in future operation periods will not change materially.

6. It is assumed that the targets and measures set by the appraised enterprise for the income period can be realised as scheduled according to the expected time period and progress, and expected benefits can be achieved; receivables can be recovered.

7. It is assumed that no other unexpected and force majeure factors will cause a material impact on the operation of the appraised enterprise.

8. It is assumed that revenues and costs of the appraised enterprise for the income period incur evenly within one year, without considering inflation.

9. Unless otherwise stated, business operations are assumed to be in full compliance with all relevant laws and regulations.

10. The accounting policies to be adopted in the future are assumed to be consistent in material aspects with the accounting policies adopted for the preparation of this report.

11. The scope and activities of the business are assumed to have no significant change from those on the valuation reference date on the basis of the existing management approaches and management performance level.

12. There is no significant change in interest rates, exchange rates, taxation bases and tax rates and policy-based levies.

13. There are no other force majeure factors and unforeseeable factors which would have a significant adverse impact on the enterprise.

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1. The company is assumed to maintain the same business model in the future. There is no consideration given to the impact of the changes in equity or restructuring on the enterprise’s operations and profitability after the valuation reference date. There is also no consideration given to the potential additional investments due to management, business strategies and expansion.

2. During the existence of the enterprise, there is no substantial amount of contingent liabilities caused by external guarantees and other matters.

3. Cash flow is assumed to be generated at the year end of each forecast period.

The valuation conclusion of this report is based on the above-mentioned valuation assumptions. The valuation conclusion of this report is rendered invalid if the above-mentioned valuation assumptions change.

X. Valuation Conclusion

1. Valuation conclusion using the asset-based approach

After the implementation of checking and verification, on-site inspection, market research and inquiry, estimation and other valuation procedures, the valuation conclusions of the entire shareholders’ equity of the appraised enterprise on the valuation reference date are as follows:

• (1) The book value of assets was RMB4,433,441,100 and the appraised value amounted to RMB4,799,493,600, representing an increase of RMB366,052,500 with an appreciation rate of 8.26%.

• (2) The book value of liabilities was RMB949,231,800 and the appraised value amounted to RMB944,461,100, representing a decrease of RMB4,770,700 with a depreciation rate of 0.5%.

• (3) The book value of net assets was RMB3,484,209,300 and the appraised value amounted to RMB3,855,032,500, representing an increase of RMB370,823,200 with an appreciation rate of 10.64%.

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Details of book value, appraised value, value increased/decreased and appreciation rate are set out in the summary of assets valuation results:

Summary of Assets Valuation Results

Unit: RMB0’000

Items	Items	Items				Appreciation rate (%)	Appreciation rate (%)
	Items		Book value	Appraised value	Increase/ decrease in value	Appreciation rate (%)
			A	B	C = B – A	D = (B – A)/ A×100%
	Current assets	1	83,252.46	83,252.46	0	0
	Non-current assets	2	360,091.65	396,696.90	36,605.25	10.17
	Of which: Other equity instruments	3	49.5	71.87	22.37	45.19
	Long-term equity investments	6	328.52	990	661.48	201.35
	Fixed assets	8	275,327.57	299,498.52	24,170.95	8.78
	Construction in progress	9	22,501.67	22,501.67	0	0
	Intangible assets	14	61,711.38	73,581.09	11,869.71	19.23
	Deferred income tax assets	18	173.01	53.74	–119.27	–68.94
	Total assets	20	443,344.11	479,949.36	36,605.25	8.26
	Current liabilities	21	49,896.23	49,896.23	0	0
	Non-current liabilities	22	45,026.95	44,549.88	–477.07	–1.06
	Total liabilities	23	94,923.18	94,446.11	–477.07	–0.5
	Net assets (Owners’ equity)	24	348,420.93	385,503.25	37,082.32	10.64

2. Valuation conclusion using the income approach

The value of the entire shareholders’ equity of the enterprise has been appraised by adopting the income approach after implementation of verification, on-site inspection, market research and inquiry, assessment and estimation and other valuation procedures. The book value of the net assets of Tianjin Port Container Terminal Co., Ltd. was RMB3,484,209,300 as at the valuation reference date of 31 December 2020. The appraised value of the entire shareholders’ equity was RMB3,139,000,000, representing an increase of RMB-345,209,300 with an appreciation rate of -9.91%.

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3. Comparison of conclusions under two approaches

The appraised value of the entire shareholders’ equity using the income approach for this valuation is RMB3,139,000,000, which is RMB716,032,500 or 18.57% lower than the value of the entire shareholders’ equity using the asset-based approach, being RMB3,855,032,500. The main reason for the difference using the two valuation methods is as follows:

The asset-based valuation approach adopts the replacement cost of assets as the value standard, reflecting the socially necessary labour consumed by the asset investment. The valuation results obtained by using the asset-based approach are usually the simple sum of the appraised value of the declared assets. While the income approach adopts the expected return on assets as the value standard, such method takes into full account the operating capability (profitability) in the future after the asset investment is completed as planned. This profitability is often affected by various factors such as the macro economy, government control and the efficient use of assets. Given the above, there is a variance between the results obtained by using these two methods.

4. Selection of the final valuation conclusion

The valuation conclusion using the income approach is formed based on a series of assumptions and mathematical models, which are affected by the actual economic environment, legal environment and policy environment. Its assumptions, future earnings and parameter selection will deviate from the actual situation; the appraised enterprise, as a terminal enterprise, is principally engaged in loading and unloading, stacking, and storage of containers and other cargoes. In recent years, the world economic situation has been severed and international economic and trade conflicts have intensified, which have a greater impact on the shipping market. Affected by the above factors, there is a certain degree of uncertainty in the future operation of the appraised enterprise; In addition, the appraised enterprise is in the port and wharf industry and is an asset-heavy enterprise. Most of its assets are physical assets. The adoption of asset-based approach for valuation can reflect the value of the enterprise in a more objective manner and it is easier to be accepted by report users. Therefore, the asset-based approach is finally adopted to evaluate the calculation results to determine the valuation conclusion.

Accordingly, the value of the entire shareholders’ equity of Tianjin Port Container Terminal Co., Ltd. as at the valuation reference date is RMB3,855,032,500.

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XI. Notes on Specific Matters

(I) Ownership

1. Failure to acquire certificates

As at the valuation reference date, relevant ownership certificates have not yet been acquired for the following buildings included in the valuation scope, details of which are shown below:

No.	No.						Book value	Book value	Book value
	No.	Certificate No.	Name of Building	Structure	Year and month of completion	Floor area/ volume (m2/m3)	Book value
							Original value	Net value
	1	No certificate acquired	Waiting corridor – waiting lounge		30/12/2013	311.92	1,318,285.76	1,237,001.44
	2	No certificate acquired	Cooler substation	Frame	10/2003	306.80	652,109.00	621,432.04
	3	No certificate acquired	Checking bridge	Steel structure	9/2003	2,380.00	8,738,757.76	8,251,253.76
	4	No certificate acquired	Duty room	Brick-concrete	11/2003	40.21	98,816.70	93,929.02
	5	No certificate acquired	Gate buffer service centre	Brick-concrete	7/2008	199.60	380,869.40	361,964.12
	6	No certificate acquired	Office building stacking and interior decoration	Reinforced concrete	1/1999	496.00	2,208,836.00	220,885.09
	7	No certificate acquired	Sewage pump house	Brick-concrete	1/1986	31.00	44,880.00	4,632.37
	8	No certificate acquired	Management and Control Centre	Frame	10/2006	4,130.00	12,611,549.30	8,030,119.28
	9	No certificate acquired	Management and Control Centre Phase II	Frame	4/2010	4,769.40	16,845,086.10	11,658,420.66
Total	Total					12,664.93	42,899,190.02	30,479,637.78

The appraised enterprise declared that it has the ownership of the above-mentioned buildings and has all along been occupying such buildings. The floor area of the above-mentioned buildings is determined based on information including relevant construction contracts and drawings and the on-site inspection.

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2. Right holders stated in ownership certificates

No.	No.							Notes	Notes
	No.	Property certificate No.	Location of the land	Date of acquisition	Area (m2)	Original book value	Book value	Notes
	1	Jin (2019) Binhai New Area Tanggu Immovable No. 1027400	North of Dongtudi, Beijiang, Tianjin Port, Tanggu District	3/2006	394,067.80	165,595,016.81	152,217,804.15	The right holder is Tianjin Five Continents International Container Terminal Co., Ltd.
	2	Tang Dan Guo Yong (2008) No. 499	Dongtudi, Beijiang, Tianjin Port	5/2008	34,726.10	14,041,500.32	12,883,809.73	The right holder is Tianjin Five Continents International Container Terminal Co., Ltd.
	3	Jin (2019) Binhai New Area Tanggu Immovable No. 1030239	No. 50 Donglian Road, Tanggu, Binhai New Area	31/8/2020	25,735.20	295,963,380.00	292,622,935.55	The right holder is Tianjin Port Holdings Co., Ltd.
	4	Jin (2019) Binhai New Area Tanggu Immovable No. 1027903	Annex 1, No. 5212, 2nd Road, Tanggu Port, Binhai New Area	31/8/2020	428,222.90			The right holder is Tianjin Port Holdings Co., Ltd.
	5	Jin (2019) Binhai New Area Tanggu Immovable No. 1027902	Nos. 4589-66, 2nd Road, Tanggu Port, Binhai New Area	31/8/2020	10,565.00			The right holder is Tianjin Port Holdings Co., Ltd.
	6	Jin (2019) Binhai New Area Tanggu Immovable No. 1024633	Dongtudi, 2nd Road, Tanggu Port, Binhai New Area	31/8/2020	1,553.20			The right holder is Tianjin Port Holdings Co., Ltd.
	Sub-total				894,870.20	475,599,897.13	457,724,549.43
	Total				894,870.20	475,599,897.13	457,724,549.43

The two items of land use rights with Tianjin Five Continents International Container Terminal Co., Ltd. being the holder of the above-mentioned certificates are assets acquired in the merger, and the four items of land use rights with Tianjin Port Holdings Co., Ltd. being the holder are acquired through asset acquisition. The appraised enterprise provided the relevant documents, contracts, payment vouchers and other information, and the appraised enterprise is handling the registration of the change of ownership.

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3. Land area

No.	No.					Notes	Notes
	No.	Property certificate No.	Location of the land	Total area stated in ownership certificate (m2)	Plot area (m2)	Notes
	1	Jin (2020) Binhai New Area Tanggu Immovable No. 1018957	Beijiang, Tianjin Port, Tanggu District	11,976.20	1,411.20	It shares the area with the land Jin (2019) Binhai New Area Tanggu Immovable No. 1027902 and the shared area of this land is 1,411.2 square meters.
		Jin (2020) Binhai New Area Tanggu Immovable No. 1020087	Beijiang, Tianjin Port, Tanggu District	429,393.50	1,170.60	It shares the area with the land Jin (2019) Binhai New Area Tanggu Immovable No. 1027903 and the shared area of this land is 1,170.6 square meters.
	2	Jin (2019) Binhai New Area Tanggu Immovable No. 1027903	Annex 1, No. 5212, 2nd Road, Tanggu Port, Binhai New Area	429,423.60	428,222.90	The right holder is Tianjin Port Holdings Co., Ltd. It shares the area with the land Jin (2020) Binhai New Area Tanggu Immovable No. 1020087 and the shared area of this land is 428,222.9 square meters.
	3	Jin (2019) Binhai New Area Tanggu Immovable No. 1027902	Nos. 4589-66, 2nd Road, Tanggu Port, Binhai New Area	11,977.00	10,565.00	The right holder is Tianjin Port Holdings Co., Ltd. It shares the area with the land Jin (2020) Binhai New Area Tanggu Immovable No. 1018957 and the shared area of this land is 10,565 square meters.

The actual land use right area relating to the land use right certificate with the certificate number ‘‘Jin (2020) Binhai New Area Tanggu Immovable No. 1018957’’ is 1,411.20 square meters, but the registered area as shown in the certificate is 11,976.20 square meters. The difference of 10,565.00 square meters is the area relating to the land with the certificate number ‘‘Jin (2019) Binhai New Area Tanggu Immovable No. 1027902’’. The reasons for the above circumstance are as follows: The registered area of the above-mentioned two certificates are related to the same land parcel (the parcel number is 120107004012321000), but there were originally two right holders of the land parcel, namely Tianjin Orient Container Terminals Co., Ltd. and Tianjin Port Holdings Co., Ltd. In particular, Tianjin Orient Container Terminals Co., Ltd. shares 1,411.20 square meters, Tianjin Port Holdings Co., Ltd. shares 10,565.00 square meters, and the total area as shown in the certificate is 11,976.20 square meters. After the integration and acquisition of assets by the Company, as of the valuation reference date, the above-mentioned lands are registered under the name of Tianjin Port Container Terminal Co., Ltd. In 2020, the container company changed the land right holder shared by the original right holder Tianjin Orient Container Terminals Co., Ltd. into Tianjin Port Container Terminal Co., Ltd. The new certificate number is ‘‘Jin (2020) Binhai New Area Tanggu Immovable No. 1018957’’. As of the valuation reference date, the change of right holder for the land use right ‘‘Jin (2019) Binhai New Area Tanggu Immovable No. 1027902’’ with Tianjin Port Holdings Co., Ltd. as the right holder has not been completed.

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The registered areas in the land use right certificate of ‘‘Jin (2020) Binhai New Area Tanggu Immovable No. 1018957’’ and the land use right certificate of ‘‘Jin (2019) Binhai New Area Tanggu Immovable No. 1027902’’ are related to the same land parcel. However, the difference between the total registered areas in the above-mentioned two certificates is 0.8 square meter, which is caused by the different coordinate systems used in the two surveying and mapping. The coordinate system used in surveying and mapping of the land use right certificate with the certificate number of ‘‘Jin (2020) Binhai New Area Tanggu Immovable No. 1018957’’ (for an area of 11,976.20 square meters) is Tianjin 2000 coordinate system, while the coordinate system used in surveying and mapping of the land use right certificate with the certificate number of ‘‘Jin (2019) Binhai New Area Tanggu Immovable No. 1027902’’ (for an area of 11,977.00 square meters) is the national 2000 coordinate system. The coordinate system currently used is Tianjin 2000 coordinate system. Based on the latest surveying and mapping results, the area of 11,976.20 square meters shown in the certificate as obtained in 2020 prevails.

The situation for the land use right certificate with the certificate number of ‘‘Jin (2020) Binhai New Area Tanggu Immovable No. 1020087’’ (for an area of 429,393.50 square meters) and the land use right certificate of ‘‘Jin (2019) Binhai New Area Tanggu Immovable No. 1027903’’ (for an area of 429,423.60 square meters) is the same as above. In particular, the shared land area of the land use right certificate of ‘‘Jin (2020) Binhai New Area Tanggu Immovable No. 1020087’’ is 1,170.60 square meters, and that of the land use right certificate of ‘‘Jin (2019) Binhai New Area Tanggu Immovable No. 1027903’’ is 428,222.90 square meters. The difference between the total registered areas in the above-mentioned two certificates is 30.1 square meters, which is also caused by the different coordinate systems used in the two surveying and mapping, and the area of 429,393.50 square meters shown in the certificate as obtained in 2020 prevails.

• (II) The pier, pipeline and other concealed works included in this valuation scope could not be directly checked and verified by the valuers due to objective circumstances, such as being buried underground or covered by water. The valuation is based on the introduction made by the relevant personnel of the appraised enterprise as well as the information declared by the appraised enterprise, including construction contracts and drawings.

• (III) In the valuation using the asset-based approach, the appraised value of fixed assets excludes the value-added tax.

• (IV) This valuation does not consider the possible taxes related to the increase or decrease in value of assets and liabilities appraised.

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VALUATION REPORT ON TIANJIN PORT CONTAINER

• (V) This valuation results presented by this report are formed based on the necessary information provided by the appraised enterprise. We have conducted necessary verifications of the legal ownership information and sources of information about the valuation target provided by the appraised enterprise, whereas the appraised enterprise bears the responsibilities for the authenticity, accuracy and completeness of the ownership information on which this report is based. Our responsibilities are to conduct the valuation of the valuation target on the valuation reference date and issue a professional opinion.

• (VI) The asset valuation, to a large extent, relies on the relevant information provided by the entrusting party and the appraised enterprise. Therefore, the valuation conclusions are formed under the circumstances that the documents, property ownership certificates and other information relevant to the economic activity provided by the entrusting party and the appraised enterprise are true and complete.

• (VII) We and the asset valuer who signed the report shall assume no responsibility for the consequences of possible deficiencies of the appraised entity and the assets that could affect the valuation conclusion, to the extent that such deficiencies were not known during the implemented valuation procedures.

• (VIII) This valuation results are based on the relevant assumptions set out in this report and the explanations herein. The data used in the valuation is subject to changes due to a variety of market factors. When the foregoing conditions and the principles followed in the valuation change, the valuation results will usually be invalidated.

• (IX) This valuation conclusion only reflects the value of the valuation target on the valuation reference date. The report user should reasonably determine the validity period for using this report according to the changes in asset status and market conditions after the valuation reference date. If there are significant changes in asset status and market conditions as compared with those on the valuation reference date, the entrusting party shall engage a valuation agency to appraise the updated business or re-valuate.

XII. Notes on the Restrictions on the Use of the Asset Valuation Report

(I) Restrictions on the Scope of Use

1. Users of the asset valuation report are the entrusting party and units and government authorities related to this economic activity. The asset valuation report shall only be used by the users stipulated in the engagement contract signed with the valuation agency and approved by laws and administrative regulations.

2. The asset valuation report is only for the economic activities pertaining to the purpose stated in this engagement contract.

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VALUATION REPORT ON TIANJIN PORT CONTAINER

APPENDIX II

1. The valuation conclusion of the asset valuation report is valid from 31 December 2020 to 30 December 2021. Users of the asset valuation report should use the asset valuation report reasonably within such validity period.

2. (II) The asset valuation agency and its asset valuers take no responsibility if the entrusting party or other users of this asset valuation report fail to use this asset valuation report in accordance with the provisions of laws and administrative regulations and the scope of use set out in this asset valuation report.

3. (III) Except for the entrusting party, the other users of this asset valuation report as agreed in the asset valuation engagement contract and those as stipulated in the laws and administrative regulations, other institution and individual shall not be the user of this asset valuation report.

4. (IV) Users of this asset valuation report should correctly interpret and use the valuation conclusion. The valuation conclusion is not equivalent to the realisable value of the valuation target and the valuation conclusion should not be considered as a guarantee for the realisable value of the valuation target.

XIII. Date of the Asset Valuation Report

15 April 2021.

Tianjin Zhonglian Assets Appraisal Co., Ltd. Legal Representative: Gong Bo Tianjin, the PRC Asset Valuer: Shi Jinsheng 15 April 2021 Asset Valuer: Yin Changjun

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VALUATION REPORT ON TIANJIN PORT CONTAINER

APPENDIX II

List of Annexes

(I) Asset valuation schedule.

• (II) Documents of the economic activity

• Resolutions of the Third Board Meeting of 2021 of Tianjin Port (Group) Co., Ltd. (20 February 2021).

• Resolutions of the 16th Extraordinary Meeting of the Ninth Session of the Board of Tianjin Port Holdings Co., Ltd. (26 February 2021).

(III) Information provided by the entrusting party

1. ‘‘Business License’’ of Tianjin Port Holdings Co., Ltd.;

2. ‘‘Ownership Registration Form of State-owned Assets’’ of Tianjin Port Holdings Co., Ltd.;

3. Letter of undertaking of the entrusting party of the asset valuation.

(IV) Information provided by the appraised enterprise

1. ‘‘Business License’’ of Tianjin Port Container Terminal Co., Ltd.;

2. ‘‘Ownership Registration Form of State-owned Assets’’ of Tianjin Port Container Terminal Co., Ltd;

3. Property ownership certificates provided by Tianjin Port Container Terminal Co., Ltd.;

4. ‘‘Motor Vehicle Ownership Registration Certificate of the PRC’’ and ‘‘Motor Vehicle Driving Permit of the PRC’’ provided by Tianjin Port Container Terminal Co., Ltd.;

5. ‘‘Audit Report’’ issued by CAC CPA Limited Liability Partnership;

6. Copy of the Merger Agreement in relation to Tianjin Port Container Terminal Co., Ltd., Tianjin Orient Container Terminals Co., Ltd. and Tianjin Five Continents International Container Terminal Co., Ltd. (30 June 2019);

7. Assets Transfer Agreement entered into between Tianjin Port Holdings Co., Ltd. and Tianjin Port Container Terminal Co., Ltd. (31 August 2020);

8. Letter of undertaking of the appraised enterprise of the asset valuation.

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VALUATION REPORT ON TIANJIN PORT CONTAINER

APPENDIX II

• (V) Information about the investees of the appraised enterprise

• ‘‘Business License’’ of Tianjin ShengGang Container Technology Development & Services Co., Ltd.;

• ‘‘Business License’’ of Tianjin Port Bay Occupational Skill Development Service Co., Ltd.;

• ‘‘Business License’’ of Baotou Shitong International Container Co., Ltd.

(VI) Information of the valuation agency

1. Letter of undertaking of the asset valuers;

2. Copies of the filing documents of the asset valuation agency;

3. Copy of the business license of the asset valuation agency;

4. Copies of the valuation qualification certificates for business in relation to securities and futures of the asset valuation agency;

5. Copies of the qualification certificates of personnel involved in the valuation.

(VII)Analysis of the difference between the appraised value and the book value.

(VIII) Copy of the Asset Valuation Engagement Contract.

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

APPENDIX III

The following is the text of the Valuation Report on COSCO SHIPPING Ports Euroasia prepared by China Tong Cheng for the purpose of, among others, incorporation in this circular.

The English version of this document is for reference only. In the event of any inconsistency between the Chinese and English versions, the Chinese version shall prevail.

This Report is prepared in accordance with the PRC Asset Valuation Standards

Asset Valuation Report on the Entire Equity Interest of COSCO SHIPPING Ports (Tianjin Euroasia) Limited Held and to be Transferred by COSCO SHIPPING Ports Limited

Zhong Tong Ping Bao Zi [2021] No. 12147 Vol. 1 of 1

China Tong Cheng Assets Appraisal Co., Ltd. 15 June 2021

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

APPENDIX III

CONTENTS

Declaration . . . . . . . . . . . . . . . . . . .	Declaration . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	85
Summary . . . . . . . . . . . . . . . . . . . . .		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	86
I.	Overview of the Entrusting Party, the Appraised Enterprise,
	and Other Users of the Valuation Report as Agreed in
	the Asset Valuation Engagement Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		91
II.	Purpose of Valuation . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	92
III.	Valuation Target and Scope	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	92
IV.	Type of Value and its Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		101
V.	Valuation Reference Date . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	101
VI.	Basis of Valuation . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	102
VII.	Valuation Methodology . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	104
VIII.	Process and Implementation of Valuation Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		119
IX.	Valuation Assumptions . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	120
X.	Valuation Conclusion . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	121
XI.	Notes on Specific Matters . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	122
XII.	Restrictions on the Use of the	Valuation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	125
XIII.	Date of the Valuation Report	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	125
Annexes . . . . . . . . . . . . . . . . . . . . . .		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	126
Letter of Undertaking from the Asset Valuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			127

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

APPENDIX III

DECLARATION

• I. This asset valuation report is prepared in accordance with the Basic Rules for Asset Appraisal issued by the Ministry of Finance and the Practice Guidelines for Asset Appraisal and the Professional Code of Ethics issued by the China Appraisal Society.

• II. The entrusting party or other users of the asset valuation report shall use the asset valuation report in accordance with the laws, administrative regulations and within the scope of use set out in this asset valuation report. This asset valuation agency and our asset valuers take no responsibility for any non-compliance with the above-mentioned requirements for the use of the asset valuation report by the entrusting party or other users of the asset valuation report. This asset valuation report shall only be used by the entrusting party, other users of the asset valuation report as agreed in the Asset Valuation Engagement Contract and users of the asset valuation report as stipulated by laws and administrative regulations. Save for the above, any other institutions and individuals cannot be the user of the asset valuation report.

This asset valuation agency and our asset valuers advise that users of the asset valuation report should correctly construe and use the valuation conclusion. The valuation conclusion is not equivalent to the realisable value of the valuation target and the valuation conclusion should not be considered as a guarantee for the realisable value of the valuation target.

• III. This asset valuation agency and our asset valuers have abided by the principles of independence, objectivity and impartiality, have complied with the laws, administrative regulations and asset valuation standards, and have assumed responsibilities for the issued asset valuation report in accordance with laws.

• IV. The lists of assets and liabilities related to the valuation target should be declared by the entrusting party and the appraised enterprise and certified by signature, seal or other means permitted by laws. The entrusting party and other relevant parties shall be responsible for the truthfulness, completeness and legality of the materials provided by them in accordance with laws.

• V. This asset valuation agency and our asset valuers have no existing or expected relationship of interests with the valuation target in the asset valuation report, no existing or expected relationship of interests with the relevant parties, and have no prejudice against the relevant parties.

• VI. The asset valuers have conducted on-site inspection on the valuation target and the assets involved in the asset valuation report, and given necessary consideration to the legal ownership status of the valuation target and the assets involved, conducted verification on the information regarding the legal ownership of the valuation target and the assets involved, made proper disclosure in respect of the issues identified, and requested the entrusting party and other relevant parties to consummate the titles in order to fulfil the requirements for the issuance of the asset valuation report.

• VII. The analyses, judgements and conclusion in the asset valuation report issued by this asset valuation agency are subject to the assumptions and restrictions in the asset valuation report. The users of the asset valuation report shall take into full account the assumptions, restrictions and notes on specific matters set out in the asset valuation report and their impact on the valuation conclusion.

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

APPENDIX III

SUMMARY

I. Corresponding Economic Activity under this Valuation

In connection with the proposed transfer of the entire equity interest of COSCO SHIPPING Ports (Tianjin Euroasia) Limited held by COSCO SHIPPING Ports Limited, it is required to conduct a valuation on the value of the entire shareholders’ equity of COSCO SHIPPING Ports (Tianjin Euroasia) Limited involved with the said economic activity.

The relevant economic activity documents are: ‘‘Notice on the Announcement of CHINA COSCO SHIPPING Investment Plan and Asset Disposal Plan 2021’’ (Zhong Yuan Hai Qi [2021] No. 28) published by China COSCO SHIPPING Corporation Limited.

‘‘Approval Regarding the Project of COSCO SHIPPING Ports to Consolidate the Equity of Container Terminal Company in Tianjin’’ (Zhong Yuan Hai Qi [2021] No. 52) issued by China COSCO SHIPPING Corporation Limited.

II. Purpose of Valuation

Due to the proposed transfer of the entire equity interest of COSCO SHIPPING Ports (Tianjin Euroasia) Limited held by COSCO SHIPPING Ports Limited, it is required to conduct a valuation on the value of the entire shareholders’ equity of COSCO SHIPPING Ports (Tianjin Euroasia) Limited involved with the said economic activity, for the purpose of providing a valuation reference for the equity transfer.

III. Valuation Target and Valuation Scope

The valuation target is the value of the entire shareholders’ equity of COSCO SHIPPING Ports (Tianjin Euroasia) Limited held and to be transferred by COSCO SHIPPING Ports Limited.

The valuation scope includes all the assets and liabilities of COSCO SHIPPING Ports (Tianjin Euroasia) Limited. The book value of total assets is US$51,089,600, the book value of the liabilities is US$41,821,700 and the book value of net assets is US$9,267,900.

IV. Type of Value

Market Value.

V. Valuation Reference Date

31 December 2020

VI. Valuation Methodology

This valuation adopts the asset-based approach for valuation and serves as the valuation conclusion.

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

APPENDIX III

VII. Valuation Conclusion and its Validity Period

The valuation conclusion is that the appraised value of the entire shareholders’ equity of COSCO SHIPPING Ports (Tianjin Euroasia) Limited is US$41,321,700. Translated at the central parity rate of 6.5249 published by the People’s Bank of China as at the valuation reference date, the appraised value of the entire shareholders’ equity of COSCO SHIPPING Ports (Tianjin Euroasia) Limited is RMB269,620,000.

The value of the entire equity interest of COSCO SHIPPING Ports (Tianjin Euroasia) Limited held and to be transferred by COSCO SHIPPING Ports Limited is US$41,321,700 (FORTY-ONE MILLION THREE HUNDRED TWENTY-ONE THOUSAND AND SEVEN HUNDRED UNITED STATES DOLLARS, rounding to the nearest hundred).

The validity period of the valuation conclusion indicated in the valuation report is one year, starting from 31 December 2020 (valuation reference date) to 30 December 2021.

VIII. Special Matters with Special Impacts on the Valuation Conclusion

(I) Significant Use of Expert Work and Related Report;

The financial statements corresponding to on-balance sheet assets and liabilities reported by the enterprise has been audited by PricewaterhouseCoopers, which has issued an audit report on 3 February 2021. The audit opinion is a standard audit report with an unqualified opinion. This valuation adopts the audited book value as the appraised book value.

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

APPENDIX III

(II) Incomplete or Defective Ownership Information;

1. Tianjin Port Euroasia International Container Terminal Co., Ltd. has issued the ownership statement on the properties without certificates, which undertakes that such assets are owned by Tianjin Port Euroasia International Container Terminal Co., Ltd. and have no ownership dispute. Details are set out below:

No.	No.					Book value	Book value	Book value
	No.	Name of the Building	Structure	Year and month of completion	Unit of measurement	Book value
						Original value	Net value
	1	Container house	Steel	7/2010	40 feet	45,000.00	28,935.00
	2	Eco-friendly restroom	Frame	7/2010	1 set	196,272.00	126,202.42
	3	Eco-friendly restroom	Frame	7/2010	1 set	196,272.00	126,202.42
	4	Container house	Steel	7/2010	40 feet	64,600.00	41,925.40
	5	Container house	Steel	7/2010	40 feet	64,600.00	41,925.40
	6	Container house	Steel	7/2010	20 feet	31,000.00	19,933.00
	7	Container house	Steel	7/2010	20 feet	25,000.00	16,075.00
	8	Container house	Steel	12/2011	20 feet	37,000.00	25,678.00
	9	Eco-friendly restroom	Frame	5/2012	1 set	206,895.00	146,688.57
	10	Security booth	Colour steel	12/2014	2m2.7m2.6m	27,829.91	42,215.27
	11	Container house	Steel	6/2014	40 feet	53,846.15	22,319.57
	12	Container house	Steel	9/2017	40 feet	16,447.86	14,819.64
	13	Security booth	Colour steel	1/2018	2m2.7m2.6m	27,777.78	25,361.21
	14	Security booth	Colour steel	1/2018	2m2.7m2.6m	27,777.78	25,361.21

Note: Among the above-mentioned assets, container houses under items no. 1, 4, 5, 6, 7, 8, 11 and 12 are assets converted from containers.

Save as disclosed above, assets included in this valuation scope have no other properties that have not acquired certificates. This valuation has not considered the impact of the lack of certificates on the valuation result.

1. The sea area use right for the sea area used by Tianjin Port Euroasia International Container Terminal Co., Ltd. is as follows:

Certificate No.	Certificate No.									Sea area right holder	Sea area right holder
	Certificate No.	Time of acquisition	Type of sea use		Sea area	Way of sea use		Termination date	Payment method	Sea area right holder
	Guo Hai Zheng No. 081100021	8/5/2008	First class	Sea for transportation	17.55 hectares	Permeable structures	4.55 hectares	8/5/2058	Payment on an annual basis	Tianjin Port (Group) Co., Ltd.
			Second class	Sea for ports		Harbour basin	13 hectares

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APPENDIX III

VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

After verification, Tianjin Port Euroasia International Container Terminal Co., Ltd. shall pay the sea area use fee to the Maritime Safety Administration on an annual basis, and Tianjin Port (Group) Co., Ltd. shall issue invoices at Maritime Safety Administration uniformly and then apportion them to Euroasia International. Since the holder of the sea area use right is Tianjin Port (Group) Co., Ltd., this valuation did not appraise such sea area use right.

The corresponding port shoreline of the port wharfs in this valuation scope consists of navigable waters in front of the pier and land areas. The sea area use right of the navigable waters in front of the pier is owned by Tianjin Port (Group) Co., Ltd. and is not included in this valuation scope. The value of the land areas has been reflected in the value of land area assets, which is not assessed separately.

1. The reimbursement expenses in the book value of the appraised enterprise included the shared reconstruction cost of the inner port section of the extended line of Beijing-TianjinTanggu Expressway. According to the audit report (Xin Gang Kuai Zhuan Shen Zi 【2008】 No. 019) provided by Euroasia International, the pro-rata share of cost of Euroasia International amounted to RMB44,636,413.75, and the ownership of the road to the port and the revenue generated therefrom belong to Tianjin Port, not Euroasia International. As a result, the reconstruction cost of the inner port section of the extended line of the expressway shared in the construction cost of the wharfs is not included in this valuation scope.

2. (III) Restrictions on Valuation Procedures;

Nil.

• (IV) Incomplete Valuation Materials;

Nil.

• (V) Pending Legal and Economic Matters etc. on the Valuation Reference Date;

Nil.

• (VI) Nature and Amount of Guarantees, Leases and its Contingent Liabilities (Contingent Assets) etc. and their Relationship with the Valuation Target;

Nil.

(VII)Significant Subsequent Matters;

Nil.

• (VIII) Deficiencies in the Economic Activity Corresponding to this Asset Valuation that May Have a Significant Impact on the Valuation Conclusion;

Nil.

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

APPENDIX III

(IX) Special Matters.

This valuation has not considered the impact of minority interest discount, as sufficient statistical data about relevant market transactions cannot be acquired and the basis of analysis and judgement in relation to the degree of impact of minority interest on the value of valuation target is lacking.

The above content is extracted from the main body of the valuation report. For details of the valuation and a proper understanding of the valuation conclusion, please read the main body of the valuation report.

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

APPENDIX III

Asset Valuation Report on the Entire Equity Interest of COSCO SHIPPING Ports (Tianjin Euroasia) Limited Held and to be Transferred by COSCO SHIPPING Ports Limited

Zhong Tong Ping Bao Zi [2021] No. 12147

COSCO SHIPPING Ports Limited,

Upon your engagement, we, China Tong Cheng Assets Appraisal Co., Ltd., have appraised the market value as at 31 December 2020 of the entire equity of COSCO SHIPPING Ports (Tianjin Euroasia) Limited involved with the proposed transfer of the entire equity interest of COSCO SHIPPING Ports (Tianjin Euroasia) Limited held by COSCO SHIPPING Ports Limited, by adopting the asset-based approach and carrying out necessary valuation procedures in accordance with laws, administrative regulations and asset valuation standards and adhering to the principles of independence, objectivity and fairness. We hereby report the details of the asset valuation as follows:

• I. Overview of the Entrusting Party, the Appraised Enterprise, and Other Users of the Valuation Report as Agreed in the Asset Valuation Engagement Contract

• (I) Overview of the Entrusting Party

Name: COSCO SHIPPING Ports Limited

Domicile: 49/F COSCO TOWER 183 QUEEN’S ROAD CENTRAL HK

Share capital: 3,161,958,830 shares

Principal businesses: terminal operation and related businesses.

Introduction: COSCO SHIPPING Ports Limited (formerly known as COSCO Pacific Limited) is an investment holding company principally engaged in terminal businesses. The principal businesses of the company include terminal operation and related businesses.

(II) Overview of the Appraised Enterprise

Name: COSCO SHIPPING Ports (Tianjin Euroasia) Limited

Address: P.O. Box 958, Pasea Estate, Road Town, Tortola, British Virgin Islands

Business scope: COSCO SHIPPING Ports (Tianjin Euroasia) Limited (Chinese name: 中遠海運港 口（天津歐亞）有限公司）(formerly known as COSCO Ports (Tianjin North Basin) Limited (Chinese name: 中遠碼頭（天津北港池）有限公司）) was incorporated in the British Virgin Islands on 24 May 2005, with an issued share capital of US$1. It is a holding company established for the purpose of holding the equity interest of Tianjin Port Euroasia International Container Terminal Co., Ltd., and the principal business is investment holding.

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APPENDIX III

VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

The audited financial position of COSCO SHIPPING Ports (Tianjin Euroasia) Limited for the historical years is as follows:

Unit: US$’0,000

Item	Item		2020	2020
	Item	2019	2020
	Current assets	0.92	0.92
	Non-current assets	5,108.04	5,108.04
	Total assets	5,108.96	5,108.96
	Total liabilities	4,331.91	4,182.17
	Net assets	777.05	926.79
	Revenue	148.45	128.85
	Total profit	121.20	162.62
	Net profit	106.67	149.73

The profits tax rate for COSCO SHIPPING Ports (Tianjin Euroasia) Limited is 16.5%.

(III) Relationship between the Entrusting Party and the Appraised Enterprise

The entrusting party holds 100% equity interest of the appraised enterprise.

(IV) Overview of Other Users of the Valuation Report

This report is only for the use by the users as agreed in the Asset Valuation Engagement Contract and as stipulated by laws and administrative regulations. Any other institutions and individuals shall not be the users of this asset valuation report.

II. Purpose of Valuation

Due to the proposed transfer of the entire equity interest of COSCO SHIPPING Ports (Tianjin Euroasia) Limited held by COSCO SHIPPING Ports Limited, it is required to conduct a valuation on the value of the entire shareholders’ equity of COSCO SHIPPING Ports (Tianjin Euroasia) Limited involved with the said economic activity, for the purpose of providing a valuation reference for the equity transfer.

III. Valuation Target and Scope

The appraised valuation target and valuation scope are consistent with the valuation target and valuation scope involved in the economic activity.

(I) Valuation Target

The valuation target is the value of the entire shareholders’ equity of COSCO SHIPPING Ports (Tianjin Euroasia) Limited held and to be transferred by COSCO SHIPPING Ports Limited.

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

APPENDIX III

(II) Valuation Scope

The valuation scope includes all the assets and liabilities of COSCO SHIPPING Ports (Tianjin Euroasia) Limited as at the valuation reference date, which is corresponding to the valuation target. The accounting statements corresponding to on-balance sheet assets and liabilities reported by the enterprise has been audited by PricewaterhouseCoopers, which has issued an audit report on 3 February 2021. The audit opinion is a standard audit report with an unqualified opinion. Details are set out in the table below:

Unit: US$

No.	No.		Book value	Book value
	No.	Item	Book value
	I	Total current assets	9,226
	1	Cash and cash equivalents	9,226
	II	Total non-current assets	51,080,383
	1	Long-term equity investments	51,080,383
	III	Total assets	51,089,608
	IV	Total current liabilities	41,821,715
	1	Other payables	41,821,715
	V	Total liabilities	41,821,715
	VI	Net assets	9,267,893

• Note: Audited figures provided by the auditor are rounded to the whole dollar. This valuation has reviewed the figures provided by the enterprise, and there are decimal fraction differences between the reported data and the audited data. This valuation has not considered the impact of decimal fraction differences on the valuation result.

(III) Layout and Characteristics of Physical Assets

COSCO SHIPPING Ports (Tianjin Euroasia) Limited is a holding company and has no physical assets.

The assets of the long-term equity investment – Tianjin Port Euroasia International Container Terminal Co., Ltd. are as follows:

I. Layout and Characteristics of Physical Assets

The physical assets included in the scope of this valuation include inventories and fixed assets. As at the valuation reference date, the specific layout is as follows:

1. Inventories are turnover materials in the warehouse, mainly including spare parts such as steel wire ropes, bearings, guide plate motors and oil pipes, which are mainly stored in the warehouse of the enterprise.

As at the valuation reference date, the book value of the inventories was RMB3,450,752.70, the provision for falling price was RMB0.00, and the net value was RMB3,450,752.70.

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

APPENDIX III

1. Fixed assets include two main categories, mainly buildings under fixed assets and equipment under fixed assets. As at the valuation reference date, the original book value of the buildings under fixed assets was RMB1,637,898,145.94 and the net book value was RMB1,226,215,612.48.

(1) Buildings under fixed assets

The appraised assets are located at No. 1698 Linhai Road, Tanggu District, Tianjin and are warehousing facilities at port terminal. The assets were built in the period from 2008 to 2014, and the method of acquisition was self building. The main assets consist of 3 container berths and supporting facilities.

① Buildings

There are a total of 10 appraised buildings, with a total floor area of 18,325.10 square meters, which are mainly composed of office building, inspection bridge, substation, maintenance workshop and construction waiting building, tool and material warehouse, auxiliary comprehensive building, inspection building, sewage treatment room, etc. The structures are mainly steel-concrete structures and steel structures.

The main buildings are summarized as follows:

Office building: 7-storey steel-concrete structure, with a floor area of 6,744.73 square meters, a floor height of 3.9 meters, and an eaves height of 27.6 meters. Structure style: The foundation applies cast-in-place piles, castin-place reinforced concrete beams, slabs and columns, aerated concrete enclosure walls, and coiled material waterproof and thermal insulation roofing. Decoration standards: exterior glass curtain wall, granite veneer, interior wall latex paint, colorful glazed floor tiles, granite floor, anti-static floor, sound-absorbing ceiling, etc., aluminum alloy sprayed full glass doors, full glass doors, revolving doors, fire doors, and plastic steel windows. Supporting facilities: water supply and drainage, power lighting, fire fighting, elevators, intelligence, etc.

Maintenance workshop and construction waiting building: 5-storey steelconcrete structure with a floor area of 4,698.31 square meters. The workshop is single storey; the office area has 5 storeys, of which the first storey is 4.5 meters high and the other storeys are 4.2 meters high. Structure form: The foundation applies cast-in-place piles, cast-in-place reinforced concrete beams, slabs and columns, aerated concrete enclosure walls, and coiled material waterproof and thermal insulation roofing. Decoration standards: exterior wall paint, 106 paint for interior wall, sound-absorbing panel ceiling, plywood doors, steel doors, fire doors, and plastic steel windows. Supporting facilities are provided for water supply and drainage, power lighting, fire fighting, and communications.

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Tool and material warehouse: steel structure with a floor area of 1,732.42 square meters. Structure form: The foundation applies cast-in-place piles, the part below 1.2 meters applies aerated concrete walls and the part above 1.2 meters applies color steel plate walls, color steel plate roofing, and steel beams and columns. Decoration standards: exterior wall paint for exterior wall, 106 paint for interior wall, cement mortar floor, rolling shutter doors and plastic steel windows. Supporting facilities: supporting facilities for water supply and drainage, power lighting, fire fighting, and communications etc. are complete.

Substation: Steel-concrete structure, substation 1# and substation 2#, with a floor area of 1,201.05 square meters and 1,059.00 square meters, respectively. Structure form: The foundation applies cast-in-place piles, castin-place reinforced concrete beams, slabs and columns, aerated concrete enclosure walls, and coiled material waterproof and thermal insulation roofing. Decoration standards: exterior wall paint for exterior wall, latex paint for interior wall, floor tiles, granite floor, aluminum alloy, mineral wool board ceiling, steel doors, wooden doors, fire doors, and aluminum alloy and steel shutters. Supporting facilities: supporting facilities for water supply and drainage, power lighting, fire fighting, and communications etc. are complete.

Inspection bridge: steel structure, steel grid frame is a welded hollow spherical grid frame with a floor area of 1,645.84 square meters.

② Structures

The appraised structures are mainly composed of wharfs, harbour basin dredging, connecting sections and other port facilities and storage yards, foundation treatment, roads, street lights, fences and other warehouse facilities.

The main assets are summarized as follows:

Container terminal: The terminal is 1,100 meters long and 73 meters wide, and has 3 container berths (two 100,000-ton level and one 70,000-ton level). The wharf structure adopts steel pipe pile, beam and slab structure, the front pile desk is 41 meters wide, and the rear pile platform is 32 meters wide. There are steel pipe piles with a diameter of 1,200 millimeters under the front and rear track beams. The upper structure applies prestressed beams. The track beams, connecting beams, panels and berthing members are connected using cast-in-place steel joints, and are equipped with two drums and one plate, 5Z rubber fenders and 1500KN bollard. The shore-connecting structure is backfilled with sand, and equipped with square plastic drainage boards with a spacing of 0.9 meter. Vacuum preloading is performed for the foundation, and the bank slope is excavated to obtain riprap for thickening the 1,200 millimeters reinforced concrete back sheet pile and steel pipe inclined top pile with a diameter of 1,200 millimeters.

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Harbour basin dredging: The wharf berth is dug to -15.5 meters, the berthing area is -16 meters, and the total dredging volume is 5.52 million square meters.

Storage yards: The full-container yard is paved with high-strength concrete interlocked blocks, with an area of approximately 424,000 square meters. The empty container yard applies high-strength concrete interlocked blocks, with an area of approximately 48,000 square meters. The asphalt concrete pavement has an area of 18,900 square meters.

The roads use asphalt concrete, with an area of 133,277.0 square meters.

Use condition:

According to on-site inspection, the appraised assets are maintained and used normally, and the use condition of the assets is relatively good.

Ownership: As at the valuation reference date, building ownership certificates have been obtained for the 10 buildings with a floor area of 18,325.10 square meters included in the scope of this valuation. The ownership registration is as follows:

Building Ownership Registration Form

No.	No.				Floor area (m2)	Floor area (m2)
	No.	Building Ownership Certificate No.	Name of Building	Structure	Floor area (m2)
	1	Fang Di Zheng Jin Zi No. 107011225044	Tool and material warehouse	Steel	1,732.42
	2		Auxiliary comprehensive building	Reinforced concrete	629.76
	3		Inspection building	Reinforced concrete	280.89
	4		Maintenance workshop and construction waiting building	Reinforced concrete	4,698.31
	5		Room for substation 1#	Reinforced concrete	1,201.05
	6		Room for substation 2#	Reinforced concrete	1,059.00
	7		Sewage treatment room	Reinforced concrete	333.10
	8		Office building	Reinforced concrete	6,744.73
	9		Inbound and outbound inspection bridge building	Steel	1,645.84
	10		Inbound and outbound inspection bridge structure	Steel
Sub-total	Sub-total				18,325.10

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

Ownership statement has been issued for the appraised units without ownership certificate. It is undertaken that the asset is owned by the appraised unit and there is no dispute over ownership. Details are as follows:

No.	No.					Book value	Book value	Book value
	No.	Name of building	Structure	Time of completion	Unit of measurement	Book value
						Original value	Net value
	1	Container house	Steel	7/2010	40 feet	45,000.00	28,935.00
	2	Eco-friendly restroom	Frame	7/2010	1 set	196,272.00	126,202.42
	3	Eco-friendly restroom	Frame	7/2010	1 set	196,272.00	126,202.42
	4	Container house	Steel	7/2010	40 feet	64,600.00	41,925.40
	5	Container house	Steel	7/2010	40 feet	64,600.00	41,925.40
	6	Container house	Steel	7/2010	20 feet	31,000.00	19,933.00
	7	Container house	Steel	7/2010	20 feet	25,000.00	16,075.00
	8	Container house	Steel	12/2011	20 feet	37,000.00	25,678.00
	9	Eco-friendly restroom	Frame	5/2012	1 set	206,895.00	146,688.57
	10	Security booth	Colored steel	12/2014	2m2.7m2.6m	27,829.91	42,215.27
	11	Container house	Steel	6/2014	40 feet	53,846.15	22,319.57
	12	Container house	Steel	9/2017	40 feet	16,447.86	14,819.64
	13	Security booth	Colored steel	1/2018	2m2.7m2.6m	27,777.78	25,361.21
	14	Security booth	Colored steel	1/2018	2m2.7m2.6m	27,777.78	25,361.21

Note: Among the above-mentioned assets, container houses under items nos 1, 4, 5, 6, 7, 8, 11 and 12 are assets converted from containers.

2. Equipment under fixed assets

The equipment under fixed assets reported by the enterprise for valuation include machinery and equipment, vehicles and electronic equipment with an original book value of RMB898,241,641.90 and the net book value of RMB384,578,738.46.

(1) Machinery and equipment

The machinery and equipment of Tianjin Port Euroasia International Container Terminal Co., Ltd., the owner of the assets, are mainly distributed in the Tianjin Port Euroasia International Terminal and the cargo yard under its jurisdiction, mainly including quay crane 101-65T-66M (11 sets), yard crane 301-41T (11 sets), yard crane 203-50T (22 sets), reach stacker SRSC45C30 (2 sets), single-beam crane 10t*16.5M9M, diesel water pump LDP20, 2.45M angle blade, sewage treatment system equipment, diesel generator BWJ31010KVA, network cable tester MS2-KIT, wireless meter reading system number, high pole light intelligent control system, truck scale SCS/ZCS-100PN, yard crane truck anti-collision system GALAXY IPC-CPS, wireless data transmission system for loading and unloading equipment

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PLANET WDAP-8350, generator set YGV-500M, 32 metres fixed communication tower, power cable bridge, power facilities for cold box site, ground source heat pump system equipment (3 ground source heat pump units, 10 water source heat pump units, 12 circulating water pumps, 441 solar vacuum tube collectors (39w), etc.), ABB transformer BS10-M-630/10, ABB transformer BS10-M-2000/10, totaling 149 items. The machinery and equipment are basically in good condition and are all in normal production and operation.

• (2) Vehicles

Vehicles are mainly Donfeng ZN6494H2N4 and there are a total of 2 vehicles. As at the valuation reference date, the vehicle with the license plate number of Jin MAJ569 is in idle and the vehicle with the license plate number of Jin RE4264 is in normal production and operation.

• (3) Electronic equipment

There are mainly various desktop computers, notebook computers, various air conditioners, printers, fax machines, copiers and network system equipment, etc. As at the valuation reference date, except for certain electronic equipment that are already over-aged, the rest of the electronic equipment are basically in normal use and in good condition.

II. Intangible Assets Accounted for as Declared by the Enterprise

1. The intangible assets accounted for as declared by the enterprise are land use rights and purchased software. Details are set out in the table below:

Statistics of Basic Information on Land Use Rights

Unit: RMB

No.	No.										Book value	Book value
	No.	Certificate No.	Registered owner	Date of acquisition	Nature of land	Use of land	Permitted years	Development level	Area (m2)	Original book value	Book value
	1	Fang Di Zheng Jin Zi No. 107011225044	Tianjin Port Euroasia International Container Terminal Co., Ltd.	2007/11/1	Transfer	Warehouse land	30 years	Six connections and one leveling	745,267.20	569,693,026.79	349,504,924.67

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APPENDIX III

Statistics of Basic Information on Purchased Software

Unit: RMB

No.	No.						Remark
	No.	Name and content	Date of acquisition	Statutory/ estimated useful life	Original book value	Book value
	1	Windows XP Professional Edition	2007/11/2	10	14,400.00	0.00
	2	Rising stand-alone version	2007/11/2	10	1,080.00	0.00	No longer used
	3	Intranet management software	2010/7/5	10	50,000.00	0.00
	4	System protection shield	2010/7/5	10	99,200.00	0.00
	5	Online antivirus software	2010/7/5	10	44,200.00	0.00
	6	ORACLE 10G	2010/7/5	10	754,312.00	0.00
	7	Visual Studio/MSDN Professional Edition	2010/7/5	10	11,000.00	0.00	No longer used
	8	Security Agent Management Center software	2010/7/5	10	121,000.00	0.00	No longer used
	9	Database interface software	2012/9/5	10	5,000.00	833.00
	10	Kingdee financial software	2007/12/5	10	30,000.00	0.00	Audit function kept
	11	Asset management software	2011/10/12	10	30,000.00	2,250.00
	12	Office 2007	2008/4/15	10	28,340.00	0.00
	13	Cad 2009	2008/4/9	10	26,830.00	0.00
	14	Rising Antivirus 2008	2008/4/9	10	8,100.00	0.00
	15	Wind detection system	2010/9/8	10	69,061.73	0.00
	16	OA system software	2011/5/10	10	198,000.00	6,600.00
	17	AutoCAD 2012	2011/8/9	10	28,500.00	1,662.50
	18	Office 2007	2011/8/9	10	45,000.00	2,625.00
	19	Windows XP	2011/8/9	10	20,000.00	1,166.29
	20	AutoCAD 2012	2012/10/10	10	9,900.00	1,732.50
	21	Yard management software	2010/7/5	10	200,000.00	0.00	No longer used
	22	Production management system	2010/12/6	10	2,200,000.00	0.00	Inquiry function kept
	23	Shift system	2012/5/10	5	50,000.00	0.00	No longer used
	24	VAT reform software	2013/8/16	10	255,895.04	66,106.10
	25	AUTO CAD 2013	2013/8/16	10	10,000.00	2,583.63
	26	VSTestPro MSDN	2013/11/18	10	20,512.82	5,811.98	No longer used
	27	Cloud communication software	2013/12/18	10	79,680.00	23,240.00
	28	Kingdee charging system interface software	2014/5/27	10	42,040.00	14,013.60
	29	Antivirus software	2015/9/14	10	25,641.03	11,965.51
	30	Attendance management software	2015/10/20	10	22,905.98	10,880.54
	31	HA logistics system software	2015/11/20	10	15,384.62	7,435.60
	32	MSDN enterprise edition	2016/9/12	10	68,205.13	38,649.37	No longer used
	33	Microsoft office 2016	2017/12/13	10	266,153.80	184,089.65
	34	Microsoft WIN SER STD 2016	2017/12/22	10	74,700.90	51,668.03
	35	Oracle Database software	2017/12/22	10	298,119.66	206,199.45
	36	Business peripheral system development project	2020/1/23	10	424,528.29	382,075.41
		Total:			5,647,691.00	1,021,588.16

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APPENDIX III

VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

1. As at the valuation reference date, the intangible assets not accounted for as declared by Tianjin Port Euroasia International Container Terminal Co., Ltd. include 17 patents and 2 computer software copyrights. Details are as follows:

No.	No.						Owner	Owner
	No.	Type of right	Certificate No.	Name and content	Date of application	Statutory/ estimated useful life	Owner
	1	Utility model	2018217466619	An elevator car pulley block for quay crane	2018/10/26	10	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	2	Utility model	2018217466943	An ultra-thin sling for 40-foot containers	2018/10/26	10	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	3	Utility model	2016210865568	A longitudinal limit device for truck scale	2016/9/28	10	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	4	Utility model	2016208998468	A limiting device for jacking oil cylinder on the top of trucks for yard crane	2016/8/17	10	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	5	Patent for invention	2015102455646	Anti-groove device for steel wire rope on upper shelf of yard crane hanger	2015/5/14	20	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	6	Utility model	2015203116122	Hand-held face mask with weld inspection cone	2015/5/14	10	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	7	Patent for invention	2014105665938	Cable torsion adjusting device suitable for quay crane	2014/10/22	10	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	8	Utility model	201420333591X	Container style sprinkling device	2014/6/20	10	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	9	Utility model	2014203344919	Snow blower suitable for yard crane	2014/6/20	10	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	10	Utility model	2013204611715	Anti-seepage valve	2013/7/30	10	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	11	Appearance design	2012300265790	Touch inquiry machine	2012/2/11	10	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	12	Utility model	2012200351273	Touch inquiry machine	2012/2/3	10	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	13	Utility model	2011202499270	Wind speed monitoring and alarm system	2011/7/15	10	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	14	Utility model	2011202501779	Container terminal buffer management control system	2011/7/15	10	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	15	Patent for invention	201710315218X	Cable torsion adjusting device suitable for quay crane	2014/10/22	20	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	16	Patent for invention	2017103152207	Easy-adjustable cable torsion adjustment device suitable for quay crane	2014/10/22	20	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	17	Patent for invention	2011202501779	Cable torsion adjusting device suitable for quay crane	2014/10/22	20	Tianjin Port Euroasia International Container Terminal Co., Ltd.

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The copyrights of computer software are as follows:

No.	No.						Owner	Owner
	No.	Certificate No.	Name and content	Development completion date	Date of publication	Statutory/ estimated useful life	Owner
	1	Ruan Zhu Deng Zi No. 0919065	Visualized logistics field control system for containers	2013/10/31	Unpublished	50	Tianjin Port Euroasia International Container Terminal Co., Ltd.
	2	Ruan Zhu Deng Zi No. 0919232	Wharf type cargo transshipment system	2014/2/17	Unpublished	50	Tianjin Port Euroasia International Container Terminal Co., Ltd.

• (IV) Intangible Assets Accounted for or Not Accounted for as Declared by the Enterprise

Nil.

• (V) Type and Quantity of Off-balance-sheet Assets Declared by the Enterprise (If Declared)

Nil.

• (VI) Type, Quantity and Book value (or Appraised Value) of Assets Involved in Making Reference to the Conclusions of Reports Issued by Other Institutions

Nil.

IV. Type of Value and its Definition

(I) Analysis of the Reasons for Selecting the Type of Value

The types of the appraised value include the market value and other types of value except for the market value. Other types of value except for the market value generally include, but are not limited to, the investment value, the value in use, the liquidation value and the residual value etc.. The purpose of this valuation is to provide a valuation reference for normal transaction, and there are no special restrictions and requirements on market conditions and the use of valuation target etc. Therefore, market value is selected as the type of value of this valuation according to industry practices.

(II) Definition of the Type of Value

Market value refers to the estimated value of the valuation target in an arm’s length transaction made in the ordinary course of business on the valuation reference date between a willing buyer and a willing seller who has each acted rationally and without compulsion.

V. Valuation Reference Date

The reference date of this valuation is 31 December 2020.

Major factors considered in determining the valuation reference date include the time requirement on the satisfaction of the implementation of the plan of the economic activity. It adopted the end of the accounting period to facilitate the defining of the valuation scope and the accurate and efficient stocktaking of assets.

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APPENDIX III

VI. Basis of Valuation

(I) Basis of Economic Activity

‘‘Notice on the Announcement of COSCO SHIPPING Investment Plan and Asset Disposal Plan 2021’’ (Zhong Yuan Hai Qi [2021] No. 28) published by China COSCO SHIPPING Corporation Limited.

‘‘Approval Regarding the Project of COSCO SHIPPING Ports Limited to Consolidate the Equity of Container Terminal Company in Tianjin’’ (Zhong Yuan Hai Qi [2021] No. 52) issued by China COSCO SHIPPING Corporation Limited.

(II) Legal Basis Provided by Laws and Regulations

1. The Asset Appraisal Law of the People’s Republic of China;

2. The Law of the People’s Republic of China on the State-owned Assets of Enterprises;

3. The Administrative Measures for State-owned Assets Appraisal (Order No. 91 of the State Council);

4. The Detailed Rules for the Implementation of the Administrative Measures for State-owned Assets Appraisal (Guo Zi Ban Fa [1992] No. 36);

5. The Provisional Regulations on the Supervision and Administration of State-owned Assets of Enterprises (Order No. 378 of the State Council);

6. The Opinions on Reforming the Administration of State-owned Assets Appraisal and Strengthening Supervision and Administration of Assets Appraisal (Guo Ban Fa [2001] No. 102);

7. The Interim Measures for the Administration of Appraisal of State-owned Assets of Enterprises (Order No. 12 of the SASAC of the State Council);

8. The Regulations on Certain Issues Concerning State-owned Assets Appraisal (Order No. 14 of the Ministry of Finance);

9. The Measures for the Supervision and Administration of the Transactions of State-owned Assets of Enterprises (Order No. 32 of the SASAC of the State Council and the Ministry of Finance);

10. The Notice on Issuing the Guidelines for the Filing for Recordation of the Appraisal Projects of State-owned Assets of Enterprises (Guo Zi Fa Chan Quan [2013] No. 64);

11. The Financial Supervision and Administration Measures on the Asset Appraisal Industry (Order No. 97 of the Ministry of Finance);

12. The Notice on Strengthening the Administration of State-owned Assets Appraisal of Enterprises (Guo Zi Wei Chan Quan [2006] No. 274).

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(III) Basis of Valuation Standards

1. Basic Rules for Asset Appraisal (Cai Zi [2017] No. 43);

2. Professional Code of Ethics for Asset Valuation (Zhong Ping Xie [2017] No. 30);

3. Practice Guidelines for Asset Valuation – Asset Valuation Procedures (Zhong Ping Xie [2018] No. 36);

4. Practice Guidelines for Asset Valuation – Asset Valuation Report (Zhong Ping Xie [2018] No. 35);

5. Practice Guidelines for Asset Valuation – Asset Valuation Engagement Contract (Zhong Ping Xie [2017] No. 33);

6. Practice Guidelines for Asset Valuation – Enterprise Value (Zhong Ping Xie [2018] No. 38);

7. Practice Guidelines for Asset Valuation – Machinery and Equipment (Zhong Ping Xie [2017] No. 39);

8. Practice Guidelines for Asset Valuation – Intangible Assets (Zhong Ping Xie [2017] No. 37);

9. Practice Guidelines for Asset Valuation – Real Estate (Zhong Ping Xie [2017] No. 38);

10. Practice Guidelines for Asset Valuation – Asset Valuation Files (Zhong Ping Xie [2018] No. 37);

11. Guidance on Valuation Report of State-owned Assets of Enterprises (Zhong Ping Xie [2017] No. 42);

12. Quality Control Guidance on the Business of Asset Valuation Agency (Zhong Ping Xie [2017] No. 46);

13. Guiding Opinions on Types of Value under Asset Valuation (Zhong Ping Xie [2017] No. 47);

14. Guiding Opinions on Legal Ownership of the Asset Valuation Target (Zhong Ping Xie [2017] No. 48);

15. Practice Guidelines for Asset Valuation – Asset Valuation Methodology (Zhong Ping Xie [2019] No. 35);

16. Practice Guidelines for Asset Valuation – Use of Expert Work and Relevant Report (Zhong Ping Xie [2017] No. 35).

(IV) Ownership Basis

1. Real Estate Title Certificates;

2. Motor vehicle driving certificates;

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1. Equipment purchase evidences;

2. Other relevant property certificates.

(V) Pricing Basis

1. Relevant agreements, contracts, invoices and other information;

2. Asset lists and declaration forms for assets appraisal provided by the enterprise;

3. Information recorded during the on-site inspection by the valuers;

4. Information of future income forecast provided by the appraised enterprise;

5. Relevant enquiry and reference information collected by the valuation agency;

6. Information related to the industry in which the appraised enterprise operates and the securities market collected by the valuers via public channels;

7. Other information related to this valuation.

VII. Valuation Methodology

(I) Selection of Valuation Method

In accordance with ‘‘Practice Guidelines for Asset Valuation – Enterprise Value’’, when performing the appraisal of enterprise value, the valuers shall analyse the applicability of the three basic approaches, namely the income approach, the market approach and the cost approach (assetbased approach), and select the valuation method based on the valuation purpose, the valuation target, the type of value, the information collected and other relevant conditions.

1. Market approach

There are limited channels for acquiring information in the domestic assets and equity trading market, and similar enterprises have significant differences in the product mix and the structure of principal businesses, which make it difficult to select comparable transactions of similar nature in the market. Therefore, this valuation does not adopt the market approach.

2. Income approach

Upon inquiry, we learn that the appraised enterprise is an investment holding company without operating income. Therefore, it is not appropriate for the valuation to adopt the income approach.

3. Asset-based approach

Each item of assets and liabilities of the appraised enterprise can be assessed separately and has the condition for the valuation by the asset-based approach. Therefore, this valuation adopts the asset-based approach.

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APPENDIX III

For a BVI company, a valuation method shall be adopted in accordance with the provisions under the ‘‘Practice Guidelines for Asset Valuation – Asset Valuation Methods’’ (Zhong Ping Xie [2019] No. 35). In accordance with Section 23 under Chapter V – Choices of Valuation Methods, in any of the following circumstances, asset appraisal professionals can adopt a valuation method:

• (I) One valuation method can be adopted in accordance with the relevant laws, administrative laws and regulations, and departmental rules of the Ministry of Finance;

• (II) Because the valuation target only meets the applicable conditions of one valuation method, thus one valuation method is adopted.

• (III) One valuation method is adopted due to restrictions of operating conditions. Restrictions of operating conditions shall generally not be ruled out by the usual practice methods of the asset appraisal industry, and the operating capabilities and conditions of individual asset appraisal agencies or individual asset appraisal professionals shall not be the criterion for judgment.

The main asset of the BVI company, as a management company, is its investment in Tianjin Euroasia, and it has no physical assets of its own. From the perspective of market approach, we cannot find comparable similar transactions for comparison; from the perspective of income approach, the enterprise has no main business income, so it is not suitable to adopt the income approach.

Based on the above analysis, the company meets the conditions under (II) of Section 23 as the valuation target only meets the applicable conditions of one valuation method, thus one valuation method is adopted.

(II) Asset-based Approach

The asset-based approach adopted to appraise the value of an enterprise refers to the valuation method that uses the balance sheet of the appraised enterprise as at the valuation reference date as basis and uses the value of all on-balance-sheet and identifiable off-balance-sheet assets and liabilities of the appraised enterprise to determine the value of the valuation target. In the valuation of an enterprise using the asset-based approach, the value of each item of assets is determined with an appropriate specific method according to the specific conditions of such asset.

The specific valuation methods applied in this valuation are as follows.

1. Current assets

On the basis of the statement of all items provided by the enterprise, the valuation determines the value of cash and cash equivalents included in current assets at the audited and verified book value.

1. Long-term equity investments: For long-term equity investments with actual controlling rights, the valuation assesses the appraised value of owners’ equity of investees at the valuation reference date through the overall valuation, and calculates the appraised value of such long-term equity investments with the share investment proportions. The valuation method selection process for long-term equity investments is as follows:

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APPENDIX III

In accordance with ‘‘Practice Guidelines for Asset Valuation – Enterprise Value’’, when performing the appraisal of enterprise value, the valuers shall analyse the applicability of the three basic approaches, namely the income approach, the market approach and the cost approach (asset-based approach), and select the valuation method based on the valuation purpose, the valuation target, the type of value, the information collected and other relevant conditions.

1. Asset-based approach

Each item of assets and liabilities of the appraised unit can be assessed individually and has the condition for the valuation by the asset-based approach. Therefore, this valuation adopts the asset-based approach.

2. Income approach

Upon inquiry, we learn that the appraised enterprise has independent profitability. There is a certain proportional relationship between assets and operating income, which can be quantified, and the future income can be predicted. Therefore, the income approach is adopted for valuation.

3. Market approach

There are domestic listed companies in the port industry. Therefore, the market approach is adopted for valuation.

Therefore, this valuation adopts the asset-based approach, the income approach and the market approach to assess long-term equity investments, with specific methods detailed below:

I. Asset-based approach

(1) Current assets (other than inventories)

Based on the details statement of all items provided by the enterprise, the valuation determines the value of cash and cash equivalents included in current assets at the audited and verified book value. For accounts receivable and other receivables, the valuation is determined in accordance with the statement of all items provided by the enterprise, uses the audited book value as the valuation basis, adopts the method of analysing the economic content and the ageing, and based on the recoverable amount of each item of receivables.

(2) Inventories

Inventories represent turnover materials in stock. They are mainly steel ropes, oil pipes, the motor of guide plate etc.. For raw materials, the appraised value is determined at the book value, as some raw materials have a large consumption and fast turnover rate, and most of the raw materials are procured in the recent period up to the valuation reference date, with the book value approximating the market price as at the valuation reference date.

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(3) Buildings under the fixed assets category

There are three valuation methods mainly adopted for buildings under the fixed assets category, namely replacement cost approach, market approach and income approach. The adoption of market approach is conditional on the existence of an active trading market where traded market prices can be obtained with relative accuracy; the adoption of income approach is on the condition that future returns and risks can be predicted and quantified relatively accurately; and the replacement cost approach is adopted when traded market prices are not available and future returns and risks cannot be accurately predicted and quantified.

Since the appraised assets are port facilities and sufficient information about market transactions and lease prices is not available in the regional market, and documents of the historical completion cannot be provided, the valuation adopts the cost approach.

The cost approach refers to a valuation method to determine the value of the appraised assets by estimating the replacement cost of the appraised assets first and then deducting the forecasted depreciation items existing in the appraised assets from the replacement cost.

Basic calculation formula: Appraised value = Full replacement cost × Residue ratio

① Full replacement cost

The full replacement cost is composed of three parts, namely construction and installation costs, preliminary and other expenses and capital costs.

A. Construction and installation project costs

Budgets (final accounts) adjustment method: Based on the final engineering quantity at the completion of the appraised buildings, the construction and installation project costs are determined by adjusting the current budgetary prices, rates and pricing procedures to the current levels.

Analogy method: Selects buildings that are recently settled with structure that is similar, construction that is basically the same, floor area, number of storeys, storey height, decoration standard and completeness of equipment and supporting facilities that are basically the same as the appraised buildings or takes the cost per square metre of similar buildings that are recently built as the reference, adjusts the construction and installation project costs of similar buildings to the costs as at the valuation reference date, and determines the construction and installation project costs by the comparison with the appraised buildings and the adjustment of construction characteristic differences with the ‘‘integrated correction coefficient’’.

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Price index method: Tianjin Engineering Cost Association has announced the per-unit engineering cost index for the period from 2008 to the valuation reference date. Therefore, this valuation adopts the price index method to assess general engineering projects.

B. Preliminary expenses and other expenses

Preliminary and other expenses of engineering projects mainly include: construction enterprise management fees, environmental impact consultation fees, safety assessment fees, feasibility report preparation fees, engineering survey and design fees, engineering construction supervision fees and bidding agent service fees etc..

Basing on the historical preliminary expenses, this valuation determines the reasonableness of expenses incurred, makes comparisons with the pricing standards of preliminary expenses incurred by similar projects, and notices minor differences. Therefore, this valuation recognises such expenses by the reviewed levels.

Items and Rates of Preliminary and Other Expenses

No.	No.					Reference	Reference
	No.	Item	Tax- inclusive rate	Tax- exclusive rate	Charging basis	Reference
	1	Construction enterprise management fees	0.750%	0.750%	Engineering cost	Ministry of Transport 2019 No. 57
	2	Feasibility study fees	1.916%	1.808%	Engineering cost	Pricing [1999] No. 1283
	3	Environmental impact assessment fees	0.013%	0.012%	Engineering cost	Pricing [2002] No. 125
	4	Safety assessment fees	0.007%	0.007%	Engineering cost	Tianjin Pricing Standards for Safety Assessment Fees
	5	Survey and design fees	3.110%	2.934%	Engineering cost	Ministry of Transport 2019 No. 57
	6	Bidding agent fees	0.020%	0.019%	Engineering cost	Ministry of Transport 2019 No. 57
	7	Engineering supervision fees	1.430%	1.349%	Engineering cost	Ministry of Transport 2019 No. 57
	8	Research and experiment fees	0.044%	0.042%	Engineering cost	Settlement on the actual cost basis
	9	Project insurance expenses	0.300%	0.283%	Engineering cost	Settlement on the actual cost basis
	10	Project cost audit fees	0.008%	0.008%	Engineering cost	Jin Jia Fang Di [1999] No. 136
	11	Joint trial operation fees	0.300%	0.300%	Engineering cost	Ministry of Transport 2019 No. 57
	12	Geologic disaster assessment fees	0.005%	0.005%	Engineering cost	Settlement on the actual cost basis
	13	Operation staff training fees	0.044%	0.044%	Engineering cost	Settlement on the actual cost basis
		Fees covering terminals	7.95%	7.56%
		Fees excluding terminals	7.65%	7.28%

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C. Capital costs

Capital costs represent the interests or opportunity costs incurred in the construction of buildings and are calculated based on the loan interest rates announced by banks in the relevant periods. The interest rate is subject to the Loan Prime Rate (LPR) as at the valuation reference date announced by National Interbank Funding Center with the authorisation of the People’s Bank of China. Capital costs are calculated at the capital inputs evenly incurred in the construction period.

② Determination of residue ratio

The useful life method and on-site investigation method are mainly used together to determine the residue ratio for the buildings in this valuation.

A. Useful life method

Useful life method is used to determine the remaining useful life based on the used life, usage condition and maintenance condition of the buildings as a whole, and finally to calculate the residue ratio.

Residue ratio under = Remaining useful life × 100% the useful life method Used life + Remaining useful life

• B. On-site investigation method

On-site investigation method is a method applied to determine the residue ratio of the appraised target based on its construction characteristics, design level, construction quality, usage condition and maintenance condition, as well as the proportion of each part in the appraised target, and through the valuers’ on-site appraisal, investigation and study.

• C. Integrated residue ratio

Integrated residue ratio = Residue ratio under the useful life method × 40% + Residue ratio under the on-site investigation method × 60%

• D. Residue ratio would be determined by adopting a reasonable method where:

• a. For the buildings which can be used normally and safely, its residue ratio would normally be not less than 30%;

• b. If the residue ratios calculated under the on-site investigation method and the useful life method differ comparatively significantly, after analysing the various factors by the valuers, the relatively reasonable ratio would prevail based on their previous experience;

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• c. For the project which cannot be observed due to certain constraints, the useful life method would be normally applied in determining the residue ratio.

• (4) Equipment under the fixed assets category

According to the purpose of this valuation and the characteristics of the appraised assets, and assuming the asset is continued to be used according to its current usage, the replacement cost approach would be adopted in this valuation on the basis of on-site investigation.

Basic formula: Appraised value = Full replacement costs × Residue ratio

As at the valuation reference date, the company was a VAT general taxpayer and the tax-free price was adopted to calculate the purchase cost of equipment in determining the full replacement costs.

• (1) Determination of full replacement costs

• ① Machinery and equipment

• A. Determination of full replacement costs

For equipment of which current market prices are available, the full replacement costs would be determined with reference to the selected prevailing market price after analysing and taking into account the transportation and miscellaneous fees as well as installation and commissioning fees; for those equipment of which current market prices are not available, the full replacement costs would be determined using the market price (to be adjusted correspondingly as the equipment purchase cost) of products with similar functions, plus the transportation and miscellaneous fees, installation and commissioning fees as well as other reasonable expenses. The calculation formula is as follows:

Full replacement costs = Equipment purchase cost + Transportation and miscellaneous fees + Installation and commissioning fees + Preliminary and other expenses + Capital costs

As at the valuation reference date, the company was a VAT general taxpayer and the tax-free price was adopted to calculate the purchase cost of equipment in determining the full replacement costs.

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• B. Determination of major pricing parameters

• a. Equipment purchase cost

Determination of equipment purchase cost would be mainly based on quotations from the equipment manufacturer and the latest transaction price of the same type of machinery and equipment purchased by the company.

• b. The rate of transportation and miscellaneous fees of equipment

Transportation and miscellaneous fees of equipment, consisting mainly of the transportation cost, loading and unloading expenses and insurance premium etc., would be determined generally based on the rate standard as stipulated by the ‘‘Manual of Data and Parameters Commonly Used in Asset Appraisal’’（資產評估常用 數據與參數手冊）in the course of valuation.

• c. Installation and adjustment fees of equipment

It would be determined based on the rate standard as stipulated by the ‘‘Manual of Data and Parameters Commonly Used in Asset ’’ Appraisal（資產評估常用數據與參數手冊）.

• d. Preliminary and other expenses

Preliminary and other expenses include construction enterprise management fees, engineering construction supervision fees, survey and design fees and bidding agent service fees etc.. The rates are determined by the scale of assets as at the valuation reference date in accordance with relevant national and local regulations.

• e. Capital costs

Capital costs represent the interests or opportunity costs incurred in the construction of buildings and are calculated based on the loan interest rates announced by banks in the relevant periods. The interest rate is subject to the Loan Prime Rate (LPR) as at the valuation reference date announced by National Interbank Funding Center with the authorisation of the People’s Bank of China. Capital costs are calculated at the capital inputs evenly incurred in the construction period.

The formula is as follows:

Capital cost = Equipment purchase price or construction cost × Applicable interest rate × Reasonable construction period/2

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② Vehicles

The full replacement cost is determined in accordance with the prevailing market price, combined with reasonable fees such as vehicle purchase taxes and vehicle license charges.

• ③ Electronic equipment

For the electronic equipment whose prevailing market price is available, the full replacement cost is determined directly by analysing the selected prevailing market price. For the electronic equipment whose prevailing market price is not available, the market price of alternative products with similar functions is used and is adjusted accordingly as the full replacement cost. For the electronic equipment purchased a relatively long time ago, the appraised value is determined according to the price available in the secondhand market.

• (2) Determination of the residue ratio

• ① For machinery and equipment, the observation method and the useful life method are mainly used to determine the residue ratio. The calculation formula is:

Residue ratio = Residue ratio under the observation method × 60% + Residue ratio under the useful life method × 40%

• A. Observation method. The observation method is applied to assess each major part of the appraised equipment from a technical perspective, and analyse factors such as design, manufacturing, usage, wear and tear, maintenance, repair, extensive repair, improvement and physical life of the asset on a consolidated basis. Impacts of wear and tear and natural deterioration on the function, efficiency of the asset will be assessed by comparing the valuation target with the one in new condition. As such, the residue ratio of the appraised equipment would be determined.

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• B. Useful life method. The calculation formula is as follows:

==> picture [310 x 36] intentionally omitted <==

Economic useful life refers to the term of an asset from the date of commencing service to the date of discontinuation when uneconomical.

• ② For vehicles, the observation method and the theoretical residue ratio are mainly adopted together, with the formula listed below:

Residue ratio = Residue ratio under the observation method × 60% + Theoretical residue ratio × 40%

• A. Observation method. The observation method is applied to assess each major part of vehicles through observation, and consider factors such as design, manufacturing, usage, wear and tear, maintenance, repair and physical life of the asset on a consolidated basis. Impacts of wear and tear and natural deterioration on the function, efficiency of the asset will be assessed by comparing the valuation target with the one in new condition. As such, the residue ratio of the appraised vehicles would be determined.

• B. For the theoretical residue ratio, the valuation adopts the lower of the useful life method and the mileage method in accordance with relevant standards set out in the Provisions on the Standards for Compulsory Retirement of Motor Vehicles (Order of the Ministry of Commerce, National Development and Reform Commission, the Ministry of Public Security, and the Ministry of Environmental Protection 2012 No. 12). The specific calculation is:

==> picture [310 x 36] intentionally omitted <==

The formula for residue ratio under the mileage method is:

==> picture [309 x 37] intentionally omitted <==

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③ Electronic equipment

The useful life method is mainly adopted to determine the residue ratio for electronic equipment, and the formula is:

Residue ratio under = Remaining useful life × 100% the useful life method Remaining useful life + Used life

If the residue ratio calculated under the observation method and the residue ratio calculated under the useful life method (or the theoretical residue ratio) differ comparatively significantly, the relatively reasonable one of the two may be selected based on experience and judgement after analysing the reasons. For the equipment which can be used normally, its residue ratio would normally be not less than 15%.

(5) Construction in progress

For equipment installation projects, the valuers review relevant contracts and determine the verified book value as the appraised value, as the commencement dates are close to the valuation reference date.

(6) Intangible Assets – land use rights

After conducting a detailed analysis on the available information and on-site investigation, the valuers have selected the market comparison approach and the benchmark land premium coefficient correction approach as the primary methods in this valuation in light of the feature of the land and actual condition of the land owned by the appraised target. The selection is based on the following considerations: firstly, the appraised target is located within the benchmark land premium area of Tianjin, and the benchmark land premium coefficient correction approach can be adopted for valuation; secondly, the land market in Tianjin is relatively developed and there are sufficient instances of alternative land transactions, and according to the valuers’ on-site investigations in the area where the appraised target is located and interviews with the local land and resources department, there are plenty of transaction cases; therefore, the market comparison approach can be selected for valuation.

① Market comparison approach

Market comparison approach is a method to estimate the objective and reasonable price of the appraised land parcel after comparing it with alternative similar real estate traded near the valuation reference date according to the alternative principle in the market, and then properly adjusting the transaction price of such similar real estate. The calculation formula is as follows:

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Price of the appraised land parcel = Price of comparable land parcel × Fact index of the appraised land parcel/Fact index of comparable land parcel × Land price index of the appraised land parcel as at the valuation reference date/Land price index of comparable land parcel as at the valuation reference date × Regional factor index of the appraised land parcel/Regional factor index of comparable land parcel × Individual factor index of the appraised land parcel/Individual factor index of comparable land parcel.

Based on the conditions of the appraised land parcel, the comparable land transaction cases to be selected shall meet the following requirements:

• A. have the same or similar type of use

• B. have the same transaction type

• C. be normal transactions

• D. have similar regional and individual conditions

• E. be developed to the same extent

For the purpose of this valuation, we selected three transaction precedents with the same land usage as the appraised land parcel for price comparison, combined with factors that affect the land pricing to conduct factor correction steps to arrive at the price of the appraised land parcel.

• ② Benchmark land premium coefficient correction approach

The benchmark land premium coefficient correction approach refers to an approach to determine the correction coefficients and correct the benchmark land premium according to the local benchmark land premium level when arriving at the price of the appraised land parcel, by referring to the land price standard and various correction factor explanation tables of such category of land in the same land grade or homogeneous area as the appraised land parcel, and judging from the differences in between in terms of regional conditions, individual conditions, land useful lives, market conditions of the land use right transfer related valuation market, plot ratio, micro location conditions, degree of land development, etc., thereby arriving at the land premium of the appraised land parcel. The basic formula is as follows:

Land premium of the land parcel = Benchmark land premium for the land grade that the land parcel falls within × K1 × K2 × K3 × (1 + ∑K) ± K4

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Wherein: K1 – date related correction coefficient

• K2 – land useful life related correction coefficient

• K3 – plot ratio related correction coefficient

• K4 – land development degree related correction coefficient

• ∑K – sum of correction coefficients related to regional factors and individual factors that have an impact on land premium

(7) Intangible assets – other intangible assets

Other intangible assets include 36 items of purchased software. In addition, the enterprise reports 16 items of other intangible assets not recorded in the financial statements, which include 14 patent rights and 2 computer software copyrights.

(1) Purchased software

For purchased software, the valuers determine the appraised value of computer software in regular use after online research and enquiries to local distributors. For some software that are not available for sale or whose sales price cannot be obtained via enquiries, the valuers determine the appraised value at the sales price of alternative software, taking account of reasonable update fees. For customised software whose sales price is difficult to be obtained via enquires, the valuers determine the tax-exclusive full replacement cost by the original value and the used life, remaining useful life, and calculate the appraised value according to the following formula. Appraised value = Tax-exclusive full replacement cost × (1- Depreciation rate), wherein, Depreciation rate = Used life/(Used life + Remaining useful life). For some purchased computer software not in use, the appraised value is zero.

(2) Patent rights, software copyrights, trademarks and domain names

In accordance with the operation procedures of intangible asset valuation, the valuation of technological intangible assets may adopt the cost approach, the income approach or the market approach on the basis of the preconditions for using such assets and the specific conditions of the valuation.

Generally, it is difficult to select comparable assets from the market given the exclusiveness of technological intangible assets; therefore, the market approach is not applicable. Furthermore, the application scope of technological intangible assets of the enterprise is relatively small, and the expected income and risks are subject to greater uncertainties; therefore, it is

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not appropriate for this valuation to adopt the income approach. Ultimately, this valuation adopts the cost approach to assess the technological intangible assets. The formula is shown below:

Appraised value = Replacement cost × (1 – Depreciation rate)

(8) Liabilities

Based on the verification, the appraised value of liabilities is the amount of liabilities the appraised enterprise actually assumes as at the valuation reference date. For the liability items the appraised enterprise no longer assumes after the realisation of valuation purpose, the appraised value is zero.

II. Income Approach

The income approach in the valuation of enterprise value is a valuation method that capitalises or discounts the expected income to determine the value of the valuation target. The specific methods frequently used by the income approach include the dividend discount method and the discounted cash flow method.

This valuation adopts the FCFF discount model in the discounted cash flow method. The specific steps are to take the Weighted Average Cost of Capital (WACC) as the discount rate, discount and aggregate the expected Free Cash Flow of Firm (FCFF) for each year in the future periods to determine the value of operating assets, further add the value of surplus assets and non-operating assets to such value to acquire the value of total assets of the enterprise, and then deduct the value of interest-bearing debts to determine the value of the entire shareholders’ equity. The basic formula is:

Value of the entire shareholders’ equity = Value of operating assets － Value of interest-bearing debts + Value of non-operating assets － Value of non-operating liabilities + Value of surplus assets

III. Market approach

The listed company comparison method of market approach is to determine the fair market value of the appraised enterprise by comparing the fair market value of a listed company in the same industry with the appraised enterprise. Typically, a listed company which operates in the same industry of the appraised enterprise and enjoys active trading is first selected as the comparable company, then the market value of the comparable company will be calculated based on the trading price of its shares. Meanwhile, one or more income, asset or special parameters of the comparable company, such as EBITDA, PE, PB, PS, would be selected as the ‘‘analysis parameters’’. The calculation is made regarding to the proportionate relation between the market value of the comparable company and corresponding analysis parameters, which is known as the ‘‘rate multiples’’. The above-mentioned rate multiples will be applied to the corresponding analysis parameters of the appraised enterprise to determine the market value of the appraised enterprise.

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We may obtain the rate multiples of income category and assets category by calculating the market value and analysis parameters of the comparable company. The value of the appraised enterprise is derived from making corrections to relevant rate multiples of each comparable company using the method of corrections to rate multiple coefficients, estimating the rate multiples of the appraised enterprise in a manner deemed most appropriate after comprehensive analysis and lastly, selecting one or more of these rate multiples of the appraised enterprise and apply the same to the appraised enterprise. Namely:

Final appraised value of equity = (Value ratio of equity investment × Corresponding parameters of the appraised enterprise) × (1 – Discount for lack of liquidity) × (1 + Control premium) + Non-operating assets + Surplus monetary funds – Non-operating liabilities

Basic steps for overall appraisal using the listed company comparison method are as follows:

• (1) Collect information on listed securities companies and select comparable companies;

• (2) Collect, analyze and make adjustments to the data contained in the financial reports of the comparable companies;

• (3) Select and calculate the value multiples of the comparable companies;

• (4) Make adjustments and corrections to the value multiples of the comparable companies;

• (5) Derive a value multiple from the value multiples of the comparable companies as the value multiple of the appraised enterprise;

• (6) Estimate relevant parameters of the appraised enterprise, calculate the corresponding appraisal results of each value multiple, and select the appraisal result which deemed most reasonable as the preliminary appraisal conclusion;

• (7) Consider whether it is necessary to make discount/premium adjustments;

• (8) Add back non-operating assets and surplus assets, less non-operating liabilities and reach the final conclusions of the appraisal.

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3. Liabilities

Based on the verification, the appraised value of liabilities is the amount of liabilities the appraised enterprise actually assumes as at the valuation reference date. For the liability items the appraised enterprise no longer assumes after the realisation of valuation purpose, the appraised value is zero.

VIII. Process and Implementation of Valuation Procedures

(I) Acceptance of Engagement

Understand the general conditions of the appraised assets and specify the valuation purpose, the valuation target and valuation scope, the valuation reference date and other basic matters in valuation after the discussions and communications with the entrusting party, accept the engagement after the comprehensive analysis on the professional capability, independence and risks of valuation, and enter into the asset valuation engagement contract. Determine the type of the appraised value, formulate the valuation plan and establish the working group on valuation based on specific conditions.

(II) On-site Inspection and Collection of Materials

Guide the appraised entity to conduct asset stocktaking and prepare valuation materials and carry out on-site inspection on the valuation target on such basis to collect required information for asset valuation, understand the asset, business and financial conditions of the valuation target, macro and regional economic factors affecting the operation of the enterprise and the current conditions and prospects of the industry etc. and pay attention to the legal ownership of the valuation target. Verify and validate the materials used in asset valuation in accordance with laws.

(III) Valuation and Estimation

Analyse, summarise and sort out the materials on valuation based on the specific conditions of the asset valuation and form the basis for the valuation and estimation and the preparation of the valuation report. Select the valuation methodology based on the valuation purpose, the valuation target, the type of value, the collection of materials and relevant conditions in accordance with the Practice Guidelines for Asset Valuation. Select the corresponding formula and parameters in analysis, calculation and judgement based on the valuation methodology adopted and analyse and judge valuation assumptions and restrictions which may affect the valuation and the valuation conclusion and arrive at the estimation results. Analyse and compare the estimation results from different methodologies and form the valuation conclusion.

(IV) Issuance of Report

The responsible persons of the project prepare the preliminary asset valuation report based on the valuation conclusion after valuation and estimation. The firm carries out an internal review on the preliminary asset valuation report in accordance with the laws, administrative regulations, asset valuation standards and the internal quality control system and issue the formal asset valuation report after conducting necessary communications on relevant contents of the valuation report with the entrusting party and other relevant parties.

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IX. Valuation Assumptions

Major asset valuation assumptions used in this valuation report include:

(I) Basic Assumptions

1. Transaction assumption. Under the transaction assumption, it is assumed that all assets to be appraised are in the process of transaction, and the valuers will conduct the valuation according to the simulated market such as the transaction conditions of the assets to be appraised.

2. Open market assumption. The open market assumption represents that assets may be traded freely in a highly competitive market and the price of which is determined based on the judgement of both independent trading parties over the value of assets under certain supply and demand conditions. An open market refers to a market that is highly competitive with many buyers and sellers. In this market, the buyers and sellers are on equal footing and have an opportunity and time to access adequate market information, and the transactions between buyers and sellers are conducted under voluntary, rational, non-compelled or unrestricted conditions.

3. In-use and continue-to-use assumption. Under the in-use and continue-to-use assumption, it is assumed that the assets in use and to be appraised would continue to be used in the current utility and way after the change of ownership or the occurrence of asset business.

(II) Specific Assumptions

1. There are no significant changes to the existing national and local laws, regulations and policies which the appraised enterprise complies with in its operation, and the macroeconomic situation of the country, no significant changes to the political, economic and social environment of the regions where parties of this transaction are located, and no material adverse impact arising from other unforeseeable factors and force majeure.

2. The current and future business managers of the appraised enterprise are assumed to be responsible, and its management of the company has the capability to assume and perform duties. The normal operation of the appraised enterprise can be maintained, and the development and production and operation plans can be basically realised as expected.

3. The appraised enterprise is assumed to be in full compliance with all relevant laws and regulations of the country, without any significant violation that would prejudice the corporate development and the revenue.

4. The accounting policies to be adopted in the future are assumed to be consistent with the accounting policies adopted in the preparation of this report in material aspect.

5. Based on the existing management approaches and management standards, the business scope and model of the company are assumed to remain consistent with the current orientation.

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1. Under the regulations of the country, it is assumed that there are no material changes to the requirements that are currently implemented or determined to be implemented regarding interest rates, exchange rates, taxation bases and tax rates, and policy-based levies etc..

2. It is assumed that the prescribed terms of all business qualifications of the company are renewable.

3. There are no other force majeure factors and unforeseeable factors which would have a significant adverse impact on the enterprise.

4. It is assumed that cash of the enterprise flow in and flow out evenly.

According to the requirements of the asset valuation, these assumptions are deemed to be established on the valuation reference date. We will not accept responsibility for different valuation conclusions resulting from changes in these assumptions when the economic environment changes significantly in the future.

X. Valuation Conclusion

(I) Valuation Results under the Asset-based Approach

As at the valuation reference date, 31 December 2020, the book value of assets of COSCO SHIPPING Ports (Tianjin Euroasia) Limited is US$51,089,600, the book value of liabilities is US$41,821,700 and the book value of the entire shareholders’ equity is US$9,267,900; the appraised value of assets is US$83,143,400, the appraised value of liabilities is US$41,821,700 and the appraised value of the entire shareholders’ equity is US$41,321,700. The appraised value of total assets represents an appreciation of US$32,053,800, with an appreciation rate of 62.75%; the appraised value of the entire shareholders’ equity represents an appreciation of US$32,053,800, with an appreciation rate of 345.86%. Details of the valuation conclusion are set out in the table below:

Asset Valuation Results Summary Table (Asset-based Approach) Valuation reference date: 31 December 2020

Appraised enterprise: COSCO SHIPPING Ports (Tianjin Euroasia) Limited Unit: US$’0,000

Items	Items	Items
	Items		Book value	Appraised value	Appreciation or depreciation	Appreciation rate
			A	B	C = B – A	D = C/A × 100%
	1	Current assets	0.92	0.92	0.00	0.00%
	2	Non-current assets	5,108.04	8,314.42	3,205.38	62.75%
	3	of which: long-term equity investments	5,108.04	8,314.42	3,205.38	62.75%
	4	Total assets	5,108.96	8,314.34	3,205.38	62.74%
	5	Current liabilities	4,182.17	4,182.17	0.00	0.00%
	6	Total liabilities	4,182.17	4,182.17	0.00	0.00%
	7	Net assets (Owners’ equity)	926.79	4,132.17	3,205.38	345.86%

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(II) Valuation Conclusion

The valuation conclusion is that the appraised value of the entire shareholders’ equity of COSCO SHIPPING Ports (Tianjin Euroasia) Limited is US$41,321,700. Translated by the central parity rate of 6.5249 announced by the People’s Bank of China as at the valuation reference date, the appraised value of the entire shareholders’ equity of COSCO SHIPPING Ports (Tianjin Euroasia) Limited is RMB269,620,000.

The value of the entire equity interest of COSCO SHIPPING Ports (Tianjin Euroasia) Limited held and to be transferred by COSCO SHIPPING Ports Limited is US$41,321,700 (FORTY-ONE MILLION THREE HUNDRED TWENTY-ONE THOUSAND AND SEVEN HUNDRED DOLLARS, rounding to the nearest one hundred).

The validity period of this valuation conclusion is one year, starting from 31 December 2020 (valuation reference date) to 30 December 2021.

This valuation has not considered the impact of minority interest discount and the impact of liquidity discount, as sufficient statistical data about relevant market transactions cannot be acquired and the basis of analysis and judgement about how minority interest factors would affect the value of valuation target is not available.

XI. Notes on Specific Matters

(I) Significant Use of Expert Work and Related Report;

The accounting statements corresponding to on-balance sheet assets and liabilities reported by the enterprise has been audited by PricewaterhouseCoopers, which has issued an audit report on 3 February 2021. This valuation adopts the audited book value as the appraised book value.

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(II) Incomplete or Defective Ownership Information;

Tianjin Port Euroasia International Container Terminal Co., Ltd. has issued the ownership statement on the properties without certificates, which confirms that such assets are owned by Tianjin Port Euroasia International Container Terminal Co., Ltd. and have no ownership dispute. Details are set out below:

No.	No.					Book value	Book value	Book value
	No.	Name of Building	Structure	Completion time	Unit of measurement	Book value
						Original value	Net value
	1	Container house	Steel	7/2010	40 feet	45,000.00	28,935.00
	2	Eco-friendly restroom	Frame	7/2010	1 set	196,272.00	126,202.42
	3	Eco-friendly restroom	Frame	7/2010	1 set	196,272.00	126,202.42
	4	Container house	Steel	7/2010	40 feet	64,600.00	41,925.40
	5	Container house	Steel	7/2010	40 feet	64,600.00	41,925.40
	6	Container house	Steel	7/2010	20 feet	31,000.00	19,933.00
	7	Container house	Steel	7/2010	20 feet	25,000.00	16,075.00
	8	Container house	Steel	12/2011	20 feet	37,000.00	25,678.00
	9	Eco-friendly restroom	Frame	5/2012	1 set	206,895.00	146,688.57
	10	Security booth	Colour steel	12/2014	2m2.7m2.6m	27,829.91	42,215.27
	11	Container house	Steel	6/2014	40 feet	53,846.15	22,319.57
	12	Container house	Steel	9/2017	40 feet	16,447.86	14,819.64
	13	Security booth	Colour steel	1/2018	2m2.7m2.6m	27,777.78	25,361.21
	14	Security booth	Colour steel	1/2018	2m2.7m2.6m	27,777.78	25,361.21

Note: Among the above-mentioned assets, container houses under items nos 1, 4, 5, 6, 7, 8, 11 and 12 are assets converted from containers.

Save as disclosed above, assets included in this valuation scope have no other properties that have not acquired certificates. This valuation has not considered the impact of the lack of certificates on the valuation result.

1. The sea area use right for the sea area used by Tianjin Port Euroasia International Container Terminal Co., Ltd. is as follows:

Certificate No.	Certificate No.									Sea area right holder	Sea area right holder
	Certificate No.	Time of acquisition	Type of sea use		Sea area	Way of sea use		Termination date	Payment method	Sea area right holder
	Guo Hai Zheng No. 081100021	8 May 2008	First class	Sea for transportation	17.55 hectares	Permeable structures	4.55 hectares	8 May 2058	Payment on an annual basis	Tianjin Port (Group) Co., Ltd.
			Second class	Sea for ports		Harbour basin	13 hectares

After verification, Tianjin Port Euroasia International Container Terminal Co., Ltd. shall pay the sea area use fee to the Maritime Safety Administration on an annual basis, and Tianjin Port (Group) Co., Ltd. shall issue invoices at Maritime Safety Administration uniformly and then apportion them to Euroasia International. Since the holder of the sea area use right is Tianjin Port (Group) Co., Ltd., this valuation did not cover the sea area use right.

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

APPENDIX III

The corresponding port shoreline of the port wharfs in this valuation scope consists of navigable waters in front of the pier and land areas. The sea area use right of the navigable waters in front of the pier is owned by Tianjin Port (Group) Co., Ltd. and is not included in this valuation scope. The value of the land areas has been reflected in the value of land area assets, which is not assessed separately.

1. The reimbursement expenses in the book value of the appraised enterprise included the shared reconstruction cost of the inner port section of the extended line of Beijing-TianjinTanggu Expressway. According to the audit report (Xin Gang Kuai Zhuan Shen Zi 【2008】 No. 019) provided by Euroasia International, the pro-rata share of cost of Euroasia International amounted to RMB44,636,413.75, and the ownership of the road to the port and the revenue generated therefrom belong to Tianjin Port, not Euroasia International. As a result, the reconstruction cost of the inner port section of the extended line of the expressway shared in the construction cost of the wharfs is not included in this valuation scope.

2. (III) Restrictions on Valuation Procedures;

Nil.

• (IV) Incomplete Valuation Materials;

Nil.

• (V) Pending Legal and Economic Matters etc. on the Valuation Reference Date;

Nil.

• (VI) Nature and Amount of Guarantees, Leases and its Contingent Liabilities (Contingent Assets) etc. and Their Relationship with the Valuation Target;

Nil.

(VII)Significant Subsequent Matters;

Nil.

• (VIII) Deficiencies in the Economic Activity Corresponding to this Asset Valuation that may have a Significant Impact on the Valuation Conclusion;

Nil.

(IX) Special Matters.

This valuation has not considered the impact of minority interest discount, as sufficient statistical data about relevant market transactions cannot be acquired and the basis of analysis and judgement about how the minority interest factor would affect the value of valuation target is not available.

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

APPENDIX III

XII. Restrictions on the Use of the Valuation Report

• (I) The scope of the use of this valuation report: this valuation report shall be used only for the valuation purpose and use set out in this valuation report;

• (II) The asset valuation agency and its professional asset valuers take no responsibility if the entrusting party or other users of this asset valuation report fail to use this asset valuation report in accordance with the provisions of laws and administrative regulations and the scope of use set out in this asset valuation report;

• (III) Except for the entrusting party, the other users of this asset valuation report as agreed in the asset valuation engagement contract and those as stipulated in the laws and administrative regulations, other institutions and individuals shall not be the users of this asset valuation report;

• (IV) Users of this asset valuation report should correctly interpret and use the valuation conclusion. The valuation conclusion is not equivalent to the realisable value of the valuation target and the valuation conclusion should not be considered as a guarantee for the realisable value of the valuation target.

XIII. DATE OF THE VALUATION REPORT

The date of the valuation report is 15 June 2021.

Asset Valuer: Wu Xiaoxia

Asset Valuer: Zhang Qian

15 June 2021

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

APPENDIX III

ANNEXES

• I. Economic Activity Documents Corresponding to the Purpose of Valuation

• II. The Special Audit Report of the Appraised Enterprise

• III. Legal Person Business Licenses of the Entrusting Party and the Appraised Enterprise

• IV. Major Ownership Proof Materials of the Valuation Target Involved

• V. Letters of Undertaking of the Entrusting Party and Other Relevant Parties

• VI. Letter of Undertaking of the Signatory Asset Valuers

• VII. The Announcement on the Filing by the Asset Valuation Agency

• VIII. Photocopy of the Legal Person Business License of the Valuation Agency

• IX. Qualification Certificates of the Asset Valuers Responsible for the Valuation

• X. The Asset Valuation Engagement Contract

• XI. Explanation on the Comparatively Significant Difference between the Book Value of Assets and the Valuation Conclusion

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

APPENDIX III

LETTER OF UNDERTAKING FROM THE ASSET VALUERS

COSCO SHIPPING Ports Limited,

Upon your engagement, we have conducted a valuation on the entire equity of COSCO SHIPPING Ports (Tianjin Euroasia) Limited involved with the proposed transfer of the entire equity interest of COSCO SHIPPING Ports (Tianjin Euroasia) Limited held by you, using 31 December 2020 as the reference date for the valuation, and have formed an asset valuation report. On the premises that the assumptions disclosed in this report are established, we hereby make the following undertakings:

• I. We have the relevant professional qualification;

• II. The valuation target and the valuation scope are consistent with those specified in the Asset Valuation Engagement Contract;

• III. We have made necessary verification of the valuation target and the assets involved;

• IV. We have adopted the valuation methodology in accordance with the asset valuation standards;

• V. We have fully considered the factors which may affect the appraised value;

• VI. The valuation conclusion is reasonable;

• VII. The valuation was carried out independently without any interference.

Signatures by the Asset Valuers: Wu Xiaoxia Zhang Qian

15 June 2021

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VALUATION REPORT ON COSCO SHIPPING PORTS EUROASIA

APPENDIX III

EXPLANATION ON THE COMPARATIVELY SIGNIFICANT DIFFERENCE BETWEEN THE BOOK VALUE OF ASSETS AND THE VALUATION CONCLUSION

As at the valuation reference date, being 31 December 2020, the book value of assets of COSCO SHIPPING Ports (Tianjin Euroasia) Limited was US$51,089,600, the book value of liabilities was US$41,821,700 and the book value of the entire shareholders’ equity was US$9,267,900; the appraised value of assets was US$83,143,400, the appraised value of liabilities was US$41,821,700 and the appraised value of the entire shareholders’ equity was US$41,321,700. The appraised value of total assets represented an appreciation of US$32,053,800, with an appreciation rate of 62.74%; the appraised value of the entire shareholders’ equity represented an appreciation of US$32,053,800, with an appreciation rate of 345.86%.

There is a comparatively significant difference between the book value of assets and the valuation conclusion. The main reason is that the appraised value of long-term equity investments held by COSCO SHIPPING Ports (Tianjin Euroasia) Limited represents an appreciation of US$32,053,800, with an appreciation rate of 62.74%. The main reason for such an appreciation is that the initial investment cost is recognised as the book value. After the overall valuation of the long-term equity investment, the overall valuation of the investee has appreciated, which leads to the appreciation of long-term equity investments.

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GENERAL INFORMATION

APPENDIX IV

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 OF DIRECTORS AND CHIEF EXECUTIVE

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the Shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) 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 such provisions of the SFO); or (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules, were as follows:

(a) Long position in the Shares

					Approximate
					percentage of
					issued share
				Number of	capital of
Name	of Director	Capacity	Nature of interest	Shares held	the Company
Japhet	Sebastian Law	Beneficial owner	Interest held jointly with	2,700,000	0.04%
			another person

(b) Long position in underlying shares of unlisted equity derivatives of the Company

The share option scheme of the Company was adopted pursuant to the written resolutions of the sole shareholder of the Company passed on 26 April 2006 under which the Directors may, at their discretion, invite any employees of the Group or Directors to take up options to subscribe for Shares subject to the terms and conditions stipulated in the share option scheme. The details of share options granted to the Directors which were outstanding as at the Latest Practicable Date were as follows:

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APPENDIX IV

GENERAL INFORMATION

Number of

	Number of
	share	Exercise	Grant	Exercisable	Exercisable
Name of Director	options held	price	date	from	until
		HK$
Shi Jing	1,100,000	1.514	16/09/2014	16/03/2015	15/09/2024
Japhet Sebastian Law	150,000	0.896	28/06/2012	28/12/2012	27/06/2022
Cheng Chi Pang, Leslie	150,000	0.896	28/06/2012	28/12/2012	27/06/2022
Zhang Weidong	450,000	0.896	28/06/2012	28/12/2012	27/06/2022

Save as disclosed above, as at the Latest Practicable Date, so far as was known to the Directors, none of the Directors and chief executive of the Company or their respective associates (as defined in the Listing Rules) had any interests or short positions in any Shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required 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 they were taken or deemed to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules, to be notified to the Company and the Stock Exchange.

As at the Latest Practicable Date, so far as was known to the Directors, the following Directors were also directors or employees of a company which has an interest or short position in the Shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Name of Director Name of company Position Chu Bin Tianjin Port Group director and chairman Luo Xunjie Tianjin Port Group director and vice president Xue Xiaoli Tianjin Port Group general manager of investment and development department Shi Jing 天津津聯投資控股有限公司 assistant to general manager and (Tianjin Tsinlien Investment supervisor Holdings Co., Ltd.*) Tsinlien Group Company Limited director Tianjin Development Holdings Limited assistant to general manager Leadport Holdings Limited director

– 130 –

GENERAL INFORMATION

APPENDIX IV

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with any member of the Group which do not expire or are not terminable within one year without payment of compensation (other than statutory compensation).

4. COMPETING INTEREST

Chu Bin, an executive Director and chairman of the Board, and Luo Xunjie, an executive Director and the managing Director, are directors of Tianjin Port Group. As the Board is independent of the board of directors of Tianjin Port Group (save for Chu Bin and Luo Xunjie who are the common directors in both companies) and Chu Bin and Luo Xunjie have no control over the Board, the Group is capable of carrying on its businesses independently of the businesses of Tianjin Port Group.

Save as disclosed above, as at the Latest Practicable Date, so far as the Directors were aware, none of the Directors or their respective close associates (as defined in the Listing Rules) had any interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

5. INTERESTS IN ASSETS AND/OR CONTRACTS AND OTHER INTERESTS

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been, since 31 December 2020, being the date to which the latest published audited consolidated financial statements of the Company were made up, 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 was materially interested in any contract or arrangement which was significant in relation to the business of the Group.

6. MATERIAL CONTRACTS

In the two years immediately preceding the date of this circular and up to the Latest Practicable Date, the following contracts, not being contracts entered into in the ordinary course of business, were entered into by the Company or any of its subsidiaries which are or may be material:

• (a) the Tianjin Port Container Agreement;

• (b) the COSCO SHIPPING Ports Euroasia Agreement;

• (c) the agreement dated 26 February 2021 entered into between Tianjin Port Co (as transferor) and 天津港經濟技術合作有限公司 (Tianjin Port Economic-Technological Cooperation Co., Ltd.) (‘‘Economic-Technological Co’’), a wholly-owned subsidiary of Tianjin Port Group (as transferee), pursuant to which Tianjin Port Co agreed to dispose of, and EconomicTechnological Co agreed to acquire, 53% of the equity interest in 天津中燃船舶燃料有限公 司 (CHIMBUSCO Marine Bunker (Tianjin) Co., Ltd.) for a consideration of RMB14,900,285.28;

– 131 –

GENERAL INFORMATION

APPENDIX IV

• (d) the agreement dated 15 December 2020 entered into between Mapletree Tianjin Free Port Development (HKSAR) Limited (‘‘Mapletree Tianjin’’) (as transferor) and Tianjin Port Co (as transferee), pursuant to which Mapletree Tianjin agreed to dispose of, and Tianjin Port Co agreed to acquire, 49% of the equity interest in 天津港海豐保稅物流有限公司 (Tianjin Port Haifeng Bonded Logistics Co., Ltd.*) for a consideration of RMB234,630,522; and

• (e) the merger agreement dated 30 June 2019 entered into between Tianjin Port Container, 天津 東方海陸集裝箱碼頭有限公司 (Tianjin Orient Container Terminals Co., Ltd.) (‘‘Tianjin Orient’’), 天津五洲國際集裝箱碼頭有限公司 (Tianjin Five Continents International Container Terminal Co., Ltd.) (‘‘Tianjin Five Continents’’), Tianjin Port Co, COSCO SHIPPING Ports Tianjin, China Shipping Terminal and China Merchants, pursuant to which Tianjin Port Container would, as the surviving party, absorb and merge with Tianjin Orient and Tianjin Five Continents.

7. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened against any member of the Group.

8. EXPERTS

The following is the qualification of the experts who have given opinion which is contained in this circular:

Name Qualification 天津中聯資產評估有限責任公司 Independent PRC asset valuer (Tianjin Zhonglian Assets Appraisal Co., Ltd.) 中通誠資產評估有限公司 Independent PRC asset valuer (China Tong Cheng Assets Appraisal Co., Ltd.)

As at the Latest Practicable Date, each of the above experts did not have any 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 above experts did not have any direct or indirect interest in any assets which had been, since 31 December 2020, being the date to which the latest published audited consolidated financial statements of the Company were made up, 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.

Each of the above experts has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter and/or summary and reference to its name in the form and context in which they appear.

– 132 –

GENERAL INFORMATION

APPENDIX IV

9. GENERAL

• (a) The registered office of the Company is at Windward 3, Regatta Office Park, PO Box 1350, Grand Cayman KY1-1108, Cayman Islands, and the principal place of business of the Company in Hong Kong is at Suite 3904-3907, 39/F., Tower Two, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong.

• (b) The Hong Kong branch share registrar and transfer office of the Company is Tricor Investor Services Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (c) The company secretary of the Company is Cheung Wah Lung, Warren who holds a bachelor’s degree in business administration and is a member of the American Institute of Certified Public Accountants and an associate member of the Hong Kong Institute of Chartered Secretaries.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at Suite 3904-3907, 39/F., Tower Two, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong during normal business hours within 14 days from the date of this circular:

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

• (b) the material contracts referred to in the section headed ‘‘Material Contracts’’ in this appendix;

• (c) the annual reports of the Company for the two financial years ended 31 December 2019 and 2020;

• (d) the Valuation Report on Tianjin Port Container, the text of which is set out in Appendix II to this circular;

• (e) the Valuation Report on COSCO SHIPPING Ports Euroasia, the text of which is set out in Appendix III to this circular;

• (f) the consent letters of each of the experts referred to in the section headed ‘‘Experts’’ in this appendix; and

• (g) this circular.

• For identification purposes only

– 133 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [209 x 32] intentionally omitted <==

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03382)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the ‘‘EGM’’) of Tianjin Port Development Holdings Limited (the ‘‘Company’’) will be held at 24th Floor, Admiralty Centre, Tower I, 18 Harcourt Road, Hong Kong on Friday, 13 August 2021 at 3:00 p.m. for the purposes of considering and, if thought fit, passing, with or without modification, the following resolution as ordinary resolution of the Company:

ORDINARY RESOLUTION

‘‘THAT

the Tianjin Port Container Agreement and the COSCO SHIPPING Ports Euroasia Agreement, each as defined and described in the circular of the Company dated 28 June 2021, and the transactions contemplated thereunder and any other ancillary documents be and are hereby approved, confirmed and/ or ratified; and THAT the directors of the Company be and are hereby authorised for and on behalf of the Company to sign, seal, execute, perfect, perform, deliver all such agreements, instruments, documents and deeds, and do all such acts, matters and things and take all such steps as they may in their discretion consider necessary, desirable or expedient to implement and/or to give effect to the Tianjin Port Container Agreement, the COSCO SHIPPING Ports Euroasia Agreement and all the transactions contemplated thereunder as they may in their discretion consider to be desirable and in the interests of the Company.’’

By Order of the Board Tianjin Port Development Holdings Limited Chu Bin Chairman

Hong Kong, 28 June 2021

Notes:

1. An eligible shareholder of the Company is entitled to appoint one or more proxies to attend and vote in his/her stead. A proxy does not need to be a shareholder of the Company.

2. In the case of joint registered holders of any share of the Company, any one of such persons may vote at the EGM (or any adjournment thereof), either in person or by proxy, in respect of such share as if he/she were solely entitled thereto, but the vote of the senior holder who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the vote(s) of the other joint holders and, for this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the relevant joint holding.

3. In order to be valid, the form of proxy, together with any power of attorney or other authority (if any) under which it is signed or a notarially certified copy thereof, must be deposited at the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time scheduled for holding the EGM (or any adjournment thereof).

– 134 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

1. Completion and return of the form of proxy will not preclude a shareholder of the Company from attending and voting in person at the EGM (or any adjournment thereof) should he/she so wish, and in such event, the form of proxy shall be deemed to be revoked.

2. The register of members of the Company will be closed from Tuesday, 10 August 2021 to Friday, 13 August 2021 (both days inclusive), during which period no transfer of shares of the Company will be registered. In order to be eligible 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 branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on Monday, 9 August 2021.

3. The resolution set out in this notice will be decided by poll at the EGM.

4. In order to facilitate the prevention and control of the spreading of the Novel Coronavirus (COVID-19) pandemic and to safeguard the health and safety of the shareholders of the Company, the Company encourages its shareholders to consider appointing the chairman of the EGM as his/her proxy to vote on the relevant resolution at the EGM as an alternative to attending in person.

As at the date of this notice, the board of directors of the Company comprises Mr. Chu Bin, Mr. Luo Xunjie, Mr. Sun Bin, Ms. Xue Xiaoli and Ms. Shi Jing as executive directors; and Professor Japhet Sebastian Law, Mr. Cheng Chi Pang, Leslie and Mr. Zhang Weidong as independent non-executive directors.

– 135 –