Tianjin Port Development Holdings Limited

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)

DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE TARGET ASSETS, RE-ELECTION OF DIRECTOR AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

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A letter from the Board is set out on pages 5 to 11 of this circular. A letter from the Independent Board Committee is set out on page 12 of this circular. A letter from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders is set out on pages 13 to 26 of this circular.

A notice convening the EGM to be held at Forum Room I, Basement 2, Regal Hongkong Hotel, No. 88 Yee Wo Street, Causeway Bay, Hong Kong on Wednesday, 3 March 2021 at 3:00 p.m. is set out on pages 64 to 65 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 and return the enclosed form of proxy in accordance with the instructions printed thereon 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 being taken to prevent the spreading of Novel Coronavirus (COVID-19) at the EGM, including:

Compulsory body temperature checks
Submission of health declaration form
Compulsory wearing of surgical face mask
No refreshments or drinks will be provided and no corporate gifts or cake coupons will be distributed

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 resolutions at the EGM as an alternative to attending the EGM in person.

Hong Kong, 29 January 2021

CONTENTS

	Page
PRECAUTIONARY MEASURES FOR THE EXTRAORDINARY
GENERAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
LETTER FROM THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . . . . . . . . . . .	12
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER. . . . . . . . . . . . . . . . . . . . .	13
APPENDIX I – HK VALUATION REPORT ON THE TARGET ASSETS. . . . . . . . . .	27
APPENDIX II – PRC VALUATION REPORT ON THE TARGET ASSETS. . . . . . . . .	33
APPENDIX III – GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	60
NOTICE OF EXTRAORDINARY GENERAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . .	64

– 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 flulike 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 refreshments or drinks will be provided and no corporate gifts or cake coupons will be distributed.

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 resolutions 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 HKEXnews website 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 the Target Assets by Tianjin Shipping Agency from TP International Logistics as contemplated under the Assets Transfer Agreement; “Assets Transfer Agreement” the assets transfer agreement dated 15 December 2020 entered into between TP International Logistics (as transferor) and Tianjin Shipping Agency (as transferee) in relation to the Acquisition, details of which are set out in the section headed “Discloseable and connected transaction – Principal terms of the Assets Transfer Agreement” in the “Letter from the Board” of this circular; “associate(s)” has the meaning ascribed to it under the Listing Rules; “Board” the board of Directors; “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); “connected person(s)” has the meaning ascribed to it under the Listing Rules; “controlling shareholder” has the meaning ascribed to it under the Listing Rules; “Director(s)” the director(s) of the Company; “EGM” or “Extraordinary the extraordinary general meeting of the Company to be General Meeting” convened and held to consider and, if thought fit, to approve (1) the Assets Transfer Agreement and the Acquisition; and (2) the re-election of Director; “Group” the Company and its subsidiaries; “HK Valuation Report” the valuation report issued by Roma dated 29 January 2021 in relation to the valuation of the Target Assets as at 30 November 2020 in accordance with the RICS Valuation – Global Standards, the HKIS Valuation Standards and the International Valuation Standards, the text of which is set out in Appendix I to this circular; “HK$” Hong Kong dollars, the lawful currency of Hong Kong; “Hong Kong” the Hong Kong Special Administrative Region of the PRC;

– 2 –

DEFINITIONS

“Independent Board the independent board committee comprising all of the Committee” independent non-executive Directors; “Independent Shareholders” Shareholders, other than Tianjin Port Group and its associates;

“Latest Practicable Date”
25 January 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;

“PRC Valuation Report”

the valuation report issued by China Tong Cheng dated 19 November 2020 in relation to the valuation of the Target Assets as at 31 August 2020 in accordance with the relevant PRC laws, regulations and valuation standards, the text of which is set out in Appendix II to this circular;

“Red Sun Capital” or “Independent Financial Adviser”

Red Sun Capital Limited, a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO, and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Assets Transfer Agreement and the Acquisition;

“RMB”

Renminbi, the lawful currency of the PRC;
“Roma”

Roma Appraisals Limited, an independent Hong Kong property valuer;

“SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong);

“Share(s)” the ordinary share(s) of HK$0.10 each in the issued share capital of the Company; “Shareholder(s)” the shareholder(s) of the Company;

“Stock Exchange”

The Stock Exchange of Hong Kong Limited;

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DEFINITIONS

“Target Assets”

Phase I of Tianjin Port Container Logistics Centre Depot, the details of which are set out in the section headed “Discloseable and connected transaction – Information on the Target Assets” in the “Letter from the Board” of this circular, which are owned by TP International Logistics and to be transferred to Tianjin Shipping Agency in accordance with the Assets Transfer Agreement;

“Tianjin Port Group”

天津港（集團）有限公司 (Tianjin Port (Group) Co., Ltd.*), an entity reorganised as a wholly state-owned company 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;

“Tianjin Shipping Agency”

中國天津外輪代理有限公司 (China Ocean Shipping Agency Tianjin Co., Ltd.*), a limited liability company incorporated in the PRC and a non wholly-owned subsidiary of the Group;

“TP International Logistics”
天津港國際物流發展有限公司 (Tianjin Port International Logistics Development Co., Ltd.*), a limited liability company incorporated in the PRC and a non wholly-owned subsidiary of Tianjin Port Group; 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.

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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

29 January 2021

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE TARGET ASSETS, RE-ELECTION OF DIRECTOR AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcement of the Company dated 15 December 2020 in relation to the Acquisition. Pursuant to the requirements under the Listing Rules, the Company will seek the Independent Shareholders’ approval in relation to the Assets Transfer Agreement and the Acquisition at the EGM.

Reference is also made to the announcement of the Company dated 15 December 2020 in relation to the appointment of an executive Director. Pursuant to the requirements under the articles of association of the Company, the Company will seek the Shareholders’ approval in relation to the reelection of an executive Director at the EGM.

– 5 –

LETTER FROM THE BOARD

The purpose of this circular is to provide you with:

(a) information on the discloseable and connected transaction of the Company, including:
(i) details of the terms of the Assets Transfer Agreement and the Acquisition;
(ii) a letter from the Independent Board Committee to the Independent Shareholders in respect of the Assets Transfer Agreement and the Acquisition;
(iii) a letter of advice from Red Sun Capital to the Independent Board Committee and the Independent Shareholders in respect of the Assets Transfer Agreement and the Acquisition;
(iv) the HK Valuation Report on the Target Assets issued by Roma; and
(v) the PRC Valuation Report on the Target Assets issued by China Tong Cheng;
(b) information on the re-election of an executive Director; and
(c) a notice of EGM.

DISCLOSEABLE AND CONNECTED TRANSACTION

On 15 December 2020, Tianjin Shipping Agency, a non wholly-owned subsidiary of the Group, entered into the Assets Transfer Agreement with TP International Logistics, pursuant to which Tianjin Shipping Agency agreed to acquire, and TP International Logistics agreed to transfer to Tianjin Shipping Agency, the Target Assets.

1. Principal Terms of the Assets Transfer Agreement

Date : 15 December 2020 Parties : TP International Logistics (as transferor) Tianjin Shipping Agency (as transferee) Assets to be acquired : The Target Assets, being Phase I of Tianjin Port Container Logistics Centre Depot, details of which are set out in the section headed “Information on the Target Assets” below. Consideration : The consideration for the Target Assets is RMB238,624,100 which was arrived at after arm’s length negotiations between Tianjin Shipping Agency and TP International Logistics with reference to the appraised value determined by China Tong Cheng, who carried out the valuation of the market value of the Target Assets as at the valuation reference date of 31 August 2020, and the appraised value was RMB238,624,100.

The consideration shall be paid in full by Tianjin Shipping Agency to TP International Logistics on 30 April 2021. The consideration will be funded by internal resources of the Group.

– 6 –

LETTER FROM THE BOARD

Effectiveness of the : The Assets Transfer Agreement shall become effective upon the Assets Transfer approval of the Acquisition at the extraordinary general meeting of Agreement the Company. Completion date : The Target Assets shall be transferred to Tianjin Shipping Agency by TP International Logistics on or before 31 March 2021. Tianjin Shipping Agency shall become the legal owner of the Target Assets with effect from the completion date, who shall be entitled to all rights and shall bear all obligations and liabilities in relation to the Target Assets.

2. Information on the Target Assets

The Target Assets, being Phase I of Tianjin Port Container Logistics Centre Depot, comprised of a land situated at No. 502, Yuejin Road, Tanggu Area, Tianjin, the PRC（中國天津市塘沽區躍進路502號）with a total site area of 168,736.70 square metres, together with all the buildings, structures and equipment thereon. The land use rights of the said land were granted under the Real Estate Title Certificate (Fang Di Zheng Jin Zi No. 107011010915)（房地證津字第 107011010915號）.

Based on the information provided by TP International Logistics, the original cost of the Target Assets is approximately RMB242,587,000 and the unaudited net book value of the Target Assets as at 31 August 2020 was approximately RMB155,362,000 as set out in the accounts of TP International Logistics. The difference between the original cost and the unaudited net book value of the Target Assets as at 31 August 2020 represents the accumulated depreciation and amortisation on the Target Assets.

TP International Logistics leased a portion of the Target Assets to a subsidiary of the Group for operation purpose for the year ended 31 December 2018 and all of the Target Assets for the year ended 31 December 2019, respectively, and the relevant rental expenses incurred by the Group and paid to TP International Logistics were approximately RMB11.98 million and RMB14.16 million, respectively.

The Board has reviewed the HK Valuation Report issued by Roma and the PRC Valuation Report issued by China Tong Cheng, and has taken into consideration (1) that each of Roma and China Tong Cheng has confirmed that (i) it is a commonly adopted approach in the market that the market comparison approach is used for valuing the land use rights, while the replacement cost approach is used for valuing the buildings and structures; and (ii) the assumptions adopted are similar to those generally adopted in valuation of a similar nature and which are necessary for arriving at a reasonable estimated value of the Target Assets; (2) the independence, qualification and experience of each of Roma and China Tong Cheng in relation to the respective valuation; and (3) that the valuations were respectively conducted (i) by Roma in accordance with the RICS Valuation – Global Standards, the HKIS Valuation Standards and the International Valuation Standards; and (ii) by China Tong Cheng in accordance with the relevant PRC laws, regulations and valuation standards.

Based on the above, the Directors are of the view that the valuation methods and major basis and assumptions used by each of Roma and China Tong Cheng are fair and reasonable.

– 7 –

LETTER FROM THE BOARD

3. Reasons for and Benefits of the Acquisition

Depot service is one of the essential functions of modern shipping agency companies and plays an important role in the stability of liner shipping agency business. Warehouses and depots are currently very scarce in supply at the port of Tianjin, especially in the Beijiang Port Area, as many pieces of land in the Beijiang Port Area that were originally used for warehouses and depots have been converted to commercial and residential use. Meanwhile, the container throughput of the port of Tianjin had been continuously rising during the past few years (from approximately 15.04 million TEUs in 2017 to approximately 17.30 million TEUs in 2019 and approximately 18.35 million TEUs in 2020 according to the statistics from the Ministry of Transport of the PRC). It is therefore expected that the demand for warehouses and depots will remain keen. Coupled with the scarce supply of available warehouses and depots in the Beijiang Port Area, it is likely the rents of warehouses and depots may further increase.

The Target Assets are situated in an ideal location for the Group, being approximately 5 kilometres only from the Group’s container berths at Beijiang Port Area, and approximately 12 kilometres only from the Group’s container berths at Dongjiang Port Area.

The sale of the Target Assets was initiated by TP International Logistics in June 2020, and the Group has commenced negotiations with TP International Logistics upon becoming aware of the proposed sale. Although the Acquisition will result in a one-off cash outflow for the Group upon its completion, it is believed that the Acquisition would be a better option compared to the continued renting of warehouses and depots in the Beijiang Port Area (whether of the Target Assets or other warehouses and depots in the vicinity). It is considered that the Acquisition will provide a good opportunity for the Group to not only acquire a high quality asset, but also to satisfy Tianjin Shipping Agency for the provision of depot service and to support its stable operation in a desirable location, as well as to eliminate uncertainties such as potential risks of failure to renew the lease or fluctuation in rents in the future, as elaborated above. In addition, it is considered that the Acquisition would allow Tianjin Shipping Agency the flexibility to carry out new planning and transformation of the Target Assets as and when considered appropriate according to its business needs to enhance suitability for its business development, thereby improving the overall operation of Tianjin Shipping Agency, which is in the interests of the Group as a whole.

4. 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 Group is the controlling shareholder of the Company. Its principal business includes port handling and stevedoring services, warehousing, logistics, and port area land development at the port of Tianjin in the PRC through its group companies.

Tianjin Shipping Agency is principally engaged in shipping agency services.

TP International Logistics is principally engaged in development of logistics properties.

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LETTER FROM THE BOARD

5. Listing Rules Implications

TP International Logistics is a non wholly-owned subsidiary of Tianjin Port Group (which is a controlling shareholder of the Company) and is therefore a connected person of the Company as defined in the Listing Rules. Accordingly, the Acquisition constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

As the applicable percentage ratios (as defined in the Listing Rules) in respect of the Acquisition are more than 5% but less than 25%, the Acquisition constitutes a discloseable and connected transaction of the Company and is 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.

An Independent Board Committee has been established to advise the Independent Shareholders on the terms of the Assets Transfer Agreement and the Acquisition. Red Sun Capital has been appointed to advise the Independent Board Committee and the Independent Shareholders in this connection.

The EGM will be convened and held for the Independent Shareholders to consider and, if thought fit, to approve, among other things, the Assets Transfer Agreement and the Acquisition. As Tianjin Port Group is a controlling shareholder of the Company and is materially interested in the Acquisition, Tianjin Port Group and its associates, together holding 3,294,530,000 Shares which represent 53.5% of the issued share capital of the Company as at the Latest Practicable Date, will abstain from voting in respect of the relevant resolution.

The Directors are of the view that the Acquisition is conducted in the ordinary and usual course of business of the Group, and on normal commercial terms, and the terms of the Assets Transfer 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 had a material interest in the Acquisition. In view of good corporate governance practices, Chu Bin, Luo Xunjie and Wang Junzhong, the Directors at the time the Acquisition was considered by the Board, abstained from voting in respect of such Board resolution in relation to the Acquisition.

RE-ELECTION OF DIRECTOR

Pursuant to article 112 of the articles of association of the Company and Code Provision A.4.2 in Appendix 14 to the Listing Rules, any Director appointed by the Board to fill a causal vacancy on the Board shall hold office only until the next general meeting of the Company and shall then be eligible for re-election.

Accordingly, Xue Xiaoli was appointed by the Board as an executive Director with effect from 15 December 2020 and shall hold office until the EGM. Ms. Xue, being eligible, offer herself for reelection at the EGM. A biography of Ms. Xue is set out below.

– 9 –

LETTER FROM THE BOARD

Xue Xiaoli, aged 49, holds a master’s degree in business administration and is a senior economist. Ms. Xue joined Tianjin Port Group since July 1994. Ms. Xue had served as the deputy division chief of investment management department, the chief of investment promotion of the investment promotion and investment service centre（招商投資服務中心）, the division chief and the deputy head of investment promotion department, the deputy head of investment department of Tianjin Port Group from December 2005 to April 2019. Ms. Xue had served as the chief of general office of the board of directors, the secretary to the board of directors and the general manager of investment department of Tianjin Port Holdings Co., Ltd.（天津港股份有限公司）(“Tianjin Port Co”), a non wholly-owned subsidiary of the Group whose shares are listed on the Shanghai Stock Exchange (Stock Code: 600717), from April 2019 to September 2020. Ms. Xue is currently the general manager of investment and development department of Tianjin Port Group, and a director and supervisor of certain subsidiaries of the Group. Ms. Xue has been a director of Tianjin Port Co since 24 December 2020.

Ms. Xue has entered into an appointment letter with the Company for a term of three years from 15 December 2020, which shall continue for further successive periods, subject to retirement by rotation and re-election at annual general meeting of the Company in accordance with the articles of association of the Company. Pursuant to the terms of the appointment letter, Ms. Xue is not entitled to any director’s fee or salary, while she is entitled to any discretionary bonus as determined by the Board and the remuneration committee of the Company in its discretion from time to time.

As at the Latest Practicable Date, Ms. Xue does not have any interests in the shares of the Company within the meaning of Part XV of the SFO.

Save as disclosed above, as at the Latest Practicable Date, Ms. Xue has no relationship with any other Directors, senior management, substantial or controlling shareholders (as defined in the Listing Rules) of the Company. She has not held any directorships in other public companies the securities of which are listed on any securities market in Hong Kong or overseas in the last three years.

Save as disclosed above, there are no other matters in relation to the re-election of Ms. Xue which need to be brought to the attention of the Shareholders and there is no other information that needs to be disclosed pursuant to Rule 13.51(2) of the Listing Rules.

EXTRAORDINARY GENERAL MEETING

A notice convening the EGM to be held at Forum Room I, Basement 2, Regal Hongkong Hotel, No. 88 Yee Wo Street, Causeway Bay, Hong Kong on Wednesday, 3 March 2021 at 3:00 p.m. at which ordinary resolutions will be proposed for (1) the approval by the Independent Shareholders of the Assets Transfer Agreement and the Acquisition; and (2) the approval by the Shareholders of the reelection of Xue Xiaoli as an executive Director is set out on pages 64 to 65 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, 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 resolutions to be proposed at the EGM to be voted by way of 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.

– 10 –

LETTER FROM THE BOARD

The register of members of the Company will be closed from Friday, 26 February 2021 to Wednesday, 3 March 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 transfer forms and 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 Thursday, 25 February 2021.

RECOMMENDATIONS

The Independent Board Committee, having taken into account the terms of the Assets Transfer Agreement and the Acquisition and the advice of Red Sun Capital, considers that the Acquisition is conducted in the ordinary and usual course of business of the Group, and on normal commercial terms, and the terms of the Assets Transfer Agreement and the Acquisition are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Assets Transfer Agreement and the Acquisition.

The Directors are of the view that the re-election of Xue Xiaoli as an executive Director is in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the relevant ordinary resolution to be proposed at the EGM.

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

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

For identification purposes only

– 11 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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

29 January 2021

To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE TARGET ASSETS

We refer to the circular of the Company dated 29 January 2021 (the “Circular”) to the Shareholders, of which this letter forms part. Terms defined in the Circular have the same meanings in this letter unless the context requires otherwise.

We have been appointed by the Board as the members of the Independent Board Committee to consider and to advise the Independent Shareholders as to whether the terms of the Assets Transfer Agreement and the Acquisition are fair and reasonable and in the interests of the Group and the Shareholders as a whole.

Red Sun Capital has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in relation to Assets Transfer Agreement and the Acquisition. The text of the letter of advice from Red Sun Capital to the Independent Board Committee and the Independent Shareholders is set out on pages 13 to 26 of the Circular.

We wish to draw your attention to the letter from the Board, as set out on pages 5 to 11 of the Circular.

Having taken into account the terms of the Assets Transfer Agreement and the Acquisition and the advice of Red Sun Capital, we consider that the Acquisition is conducted in the ordinary and usual course of business of the Group, and on normal commercial terms, and the terms of the Assets Transfer Agreement and the Acquisition are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Assets Transfer Agreement and the Acquisition.

Yours faithfully,

For and on behalf of the Independent Board Committee

Japhet Sebastian LAW

Independent Non-executive Director

CHENG Chi Pang, Leslie

Independent Non-executive Director

ZHANG Weidong

Independent Non-executive Director

– 12 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the Assets Transfer Agreement and the Acquisition for the purpose of incorporation in this circular.

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Unit 3303, 33/F, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong

Tel: (852) 2857 9208 Fax: (852) 2857 9100

29 January 2021

To: The Independent Board Committee and the Independent Shareholders of Tianjin Port Development Holdings Limited

Dear Sirs,

DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE TARGET ASSETS

I. INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the Assets Transfer Agreement and the Acquisition, details of which are set out in the letter from the Board (the “ Letter from the Board ”) contained in the circular of the Company to the Shareholders dated 29 January 2021 (the “ Circular ”), of which this letter forms part. Unless the context requires otherwise, capitalised terms used in this letter shall have the same meanings as those defined in the Circular.

– 13 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

II. THE INDEPENDENT BOARD COMMITTEE

The Board currently 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.

The Independent Board Committee, comprising all the aforementioned independent nonexecutive Directors, has been established to consider the terms of the Assets Transfer Agreement and the Acquisition, and to advise the Independent Shareholders as to (i) whether the terms of the Assets Transfer Agreement and the Acquisition are fair and reasonable; (ii) whether the Acquisition is conducted in the ordinary and usual course of business of the Group, on normal commercial terms, and in the interests of the Company and the Shareholders as a whole; and (iii) how the Independent Shareholders should vote on the Assets Transfer Agreement and the Acquisition.

We, Red Sun Capital, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in these respects and to give our opinion in relation to the terms of the Assets Transfer Agreement and the Acquisition, for the Independent Board Committee’s consideration when making their recommendation to the Independent Shareholders.

III. OUR INDEPENDENCE

As at the Latest Practicable Date, we were independent from and not connected with the Company, TP International Logistics or their respective core connected persons or close associates (all as defined in the Listing Rules) and accordingly, are qualified to give independent advice to the Independent Board Committee and the Independent Shareholders regarding the Assets Transfer Agreement and the Acquisition. Save for our appointment as the Independent Financial Adviser, we did not act as an independent financial adviser to the Company under the Listing Rules in the past two years.

Apart from the normal advisory fee payable to us in connection with this appointment, no arrangement exists whereby we shall receive any other fees or benefits from the Company or any other parties that could reasonably be regarded as relevant to our independence. Accordingly, we consider that we are independent pursuant to Rule 13.84 of the Listing Rules.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

IV. BASIS OF OUR ADVICE

In formulating our advice, we have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations provided to us by the Group and/or the Directors and/or senior management of the Company (the “ Management ”). We have assumed that all information, representations and opinions contained or referred to in the Circular or made, given or provided to us by the Company, the Directors and the Management and for which they are solely and wholly responsible, were true and accurate and complete in all material respects at the time when they were made and continue to be so as at the Latest Practicable Date. We have assumed that all the opinions and representations made by the Directors in the Circular have been reasonably made after due and careful enquiry. We have also sought and obtained confirmation from the Directors and/or the Management that no material facts have been omitted from the information provided and referred to in the Circular.

We have not, however, carried out any independent verification of the information provided, nor have we conducted any independent investigation into the financial position, business and affairs of the Group, TP International Logistics or their respective future prospects. We have also relied on the HK Valuation Report prepared by Roma commissioned by the Company.

We consider that we have been provided with sufficient information to enable us to reach an informed view and to provide a reasonable basis for our advice. We have no reason to doubt the truth, accuracy and completeness of the statements, information, opinions and representations provided to us by the Group and/or the Directors and/or the Management and their respective advisers or to believe that material information has been withheld or omitted from the information provided to us or referred to in the aforesaid documents. Shareholders should also note valuation involves various basis and assumptions and the appraised value may change if those basis and assumptions are modified.

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

V. PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion and recommendation on the Assets Transfer Agreement and the Acquisition, we have taken the following principal factors and reasons into consideration:

1. Information of the Group

1.1 Background of the Group

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1.2 Financial information of the Group

Set out below is a summary of the financial results of the Group, as extracted and summarised from the published annual report of the Group for the year ended 31 December 2019 (the “ 2019 Annual Report ”) and the interim report of the Group for the six months ended 30 June 2020 (the “ 2020 Interim Report ”):

	For the year ended	For the year ended	For the six months	For the six months	ended
	31 December		30 June
	2018	2019	2019		2020
	HK$’000	HK$’000	HK$’000		HK$’000
	(audited)	(audited)	(unaudited)	(unaudited)
Revenue	15,871,075	15,077,403	7,085,540		6,323,448
– Cargo handling	6,861,835	6,985,565	3,147,366		3,194,080
– Sales	6,465,721	5,908,197	2,850,134		2,128,374
– Other port ancillary services	2,543,519	2,183,641	1,088,040		1,000,994
Profit attributable to equity
holders of the Company	387,745	388,491	273,274		219,770

For the six months ended 30 June 2020 compared to the six months ended 30 June 2019

Based on the 2020 Interim Report, the Group’s revenue for the six months ended 30 June 2019 and 2020 was approximately HK$7.1 billion and HK$6.3 billion, respectively, representing a decrease of approximately 10.8%. Such decrease was mainly attributable to the decrease in revenue from sales business of approximately 25.3% during the period as a result of the drop in both sales volume and prices. The Group recorded a profit attributable to equity holders of the Company of approximately HK$273.3 million and HK$219.8 million for the six months ended 30 June 2019 and 2020, respectively. Such decrease was mainly attributable to the decrease in other income and gains as a result of the one-off gain of approximately HK$81.6 million recorded during the six months ended 30 June 2019 on remeasurement of the equity interest in Tianjin Five Continents International Container Terminal Co., Ltd. held by the Group in accordance with the relevant accounting standards.

For the year ended 31 December 2019 compared to the year ended 31 December 2018

Based on the 2019 Annual Report, the Group’s revenue for the year ended 31 December 2018 and 2019 was approximately HK$15.9 billion and HK$15.1 billion, respectively, representing a decrease of approximately 5.0%. Such decrease was mainly attributable to the decrease in revenue from sales business of approximately HK$558 million or 8.6% as compared with the corresponding prior year as a result of the decrease in sales volume. The profit attributable to equity holders of the Company for the year ended 31 December 2018 and 2019 was consistent and amounted to approximately HK$387.7 million and HK$388.5 million, respectively.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Set out below is a summary of the consolidated financial position of the Group, as extracted and summarised from the 2019 Annual Report and 2020 Interim Report:

	As at 31	December	As at 30 June
	2018	2019	2020
	HK$’000	HK$’000	HK$’000
	(audited)	(audited)	(unaudited)
Total assets	45,372,851	44,813,278	42,978,811
Total liabilities	19,581,570	18,309,693	16,631,329
Equity attributable to equity
holders of the Company	12,168,512	12,188,224	12,143,661

As at 30 June 2020, the Group recorded total assets of approximately HK$43.0 billion, which mainly comprised of (i) properties, plant and equipment of approximately HK$19.6 billion; (ii) right-of-use assets of approximately HK$6.5 billion; (iii) investments accounted for using the equity method of approximately HK$4.9 billion; (iv) trade and other receivables and notes receivables of approximately HK$3.3 billion; and (v) cash and cash equivalent of approximately HK$7.6 billion.

As at 30 June 2020, the Group recorded total liabilities of approximately HK$16.6 billion, which mainly comprised of (i) non-current borrowings of approximately HK$6.2 billion; (ii) trade and other payables and contract liabilities of approximately HK$3.6 billion; and (iii) current borrowings of approximately HK$5.5 billion.

The equity attributable to equity holders of the Company remained largely stable at approximately HK$12.1 billion as at 30 June 2020 compared to approximately HK$12.2 billion as at 31 December 2019.

2. Information on the Target Assets

As set out in the Letter from the Board, the Target Assets, being Phase I of Tianjin Port Container Logistics Centre Depot, comprised of a land situated at No. 502, Yuejin Road, Tanggu Area, Tianjin, the PRC（中國天津市塘沽區躍進路502號）with a total site area of 168,736.70 square metres, together with all the buildings, structures and equipment thereon. The land use rights of the said land were granted under the Real Estate Title Certificate (Fang Di Zheng Jin Zi No. 107011010915)（房地證津字第107011010915號）.

Based on the information provided by TP International Logistics, the original cost of the Target Assets is approximately RMB242,587,000 and the unaudited net book value of the Target Assets as at 31 August 2020 was approximately RMB155,362,000 as set out in the unaudited management accounts of TP International Logistics. The difference between the original cost and the unaudited net book value of the Target Assets as at 31 August 2020 represents the accumulated depreciation and amortisation on the Target Assets.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As set out in the Letter from the Board, the Board has reviewed the HK Valuation Report issued by Roma and the PRC Valuation Report issued by China Tong Cheng, and has taken into consideration (1) that each of Roma and China Tong Cheng has confirmed that (i) it is a commonly adopted approach in the market that the market comparison approach is used for valuing the land use rights, while the replacement cost approach is used for valuing the buildings and structures; and (ii) the assumptions adopted are similar to those generally adopted in valuation of a similar nature and which are necessary for arriving at a reasonable estimated value of the Target Assets; (2) the independence, qualification and experience of each of Roma and China Tong Cheng in relation to the respective valuation; and (3) that the valuations were respectively conducted (i) by Roma in accordance with the RICS Valuation – Global Standards, the HKIS Valuation Standards and the International Valuation Standards; and (ii) by China Tong Cheng in accordance with the relevant PRC laws, regulations and valuation standards.

For details of our analysis on the consideration of Target Assets, please refer to the section headed “6. Our analysis on the Acquisition and the Assets Transfer Agreement” in this letter below.

3. Overview of the economy in the PRC and the port of Tianjin

As extracted from the website of the National Bureau of Statistics of the PRC (http://data.stats.gov.cn), year-on-year growth in gross domestic product (“ GDP ”) for the PRC in 2020 was approximately 2.3% (2019: 6.0%) and year-on-year growth in the total value of imports and exports of the PRC in 2020 was approximately 1.9% (2019: 3.5%). With reference to the Thirteenth Five Year Plan*（十三五規劃）published by the PRC government, the target annual growth in GDP for the subsequent five years from 2016 was approximately 6.5%. However, affected by the ongoing development and impact of the COVID-19 outbreak, which is expected to have a temporary impact, the growth of GDP of the PRC for 2020 was lower than the growth in 2019. Nonetheless, despite the short-term challenging environment, the PRC economy achieved positive growth for 2020.

Furthermore, based on publication by the PRC government in relation to the Fourteenth Five Year Plan（十四五規劃）, the PRC government will focus on enhancing the quality and efficacy of the overall economy with a view to attain sustainable and healthy development through, among others, (i) the improvement of supply chain modernisation （提升產業鏈供應鏈現代化水平）; (ii) the development of strategical new industries （發展戰略性新興產業）; (iii) the acceleration of modern service industries development （加快發展現代服務業）; (iv) the coordination of infrastructure construction advancement （統籌推進基礎設施建設）; and (v) the acceleration of the development of digitalisation （加快數位化發展）[1] .

1 Publication of the State Council of the PRC titled “中共中央關於制定國民經濟和社會發展第十四個五年規劃和二零三五年遠景目標的建議” (Source: www.gov.cn/zhengce/2020-11/03/content_5556991.htm)

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As set out in the 2019 Annual Report, the port of Tianjin, located at the juncture of the Beijing-Tianjin city belt and the economic circle of the Bohai Rim Region, is the largest comprehensive port and an important foreign trade port in Northern PRC, serving 14 provinces, cities and autonomous regions and a hub connecting Northeast Asia with Midwest Asia. Moreover, it was the seventh largest port in terms of total cargo throughput and ranked the sixth in terms of total container throughput in the PRC in 2019.

The PRC government has announced certain policies in relation to the city of Tianjin in the past, including (i) the development strategy of Tianjin, including the plan relating to the construction of international shipping centre as set out in the Thirteenth Five Year Plan; (ii) the implementation of the One Belt, One Road initiative; (iii) the establishment of the China (Tianjin) Pilot Free-Trade Zone covering three areas, namely, Tianjin Port Area, Tianjin Airport Area and Binhai New Area Central Business District; and (iv) the Jing-JinJi integration programme. These policies provide impetus to the long-term development of the port of Tianjin and the operations of the Group should benefit from further development of the port of Tianjin.

4. Reasons for and benefits of the Acquisition

As set out in the Letter from the Board, depot service is one of the essential functions of modern shipping agency companies and plays an important role in the stability of liner shipping agency business. Warehouses and depots are currently very scarce in supply at the port of Tianjin, especially in the Beijiang Port Area, as many pieces of land in the Beijiang Port Area that were originally used for warehouses and depots have been converted to commercial and residential use. Meanwhile, the container throughput of the port of Tianjin had been continuously rising during the past few years (from approximately 15.04 million TEUs in 2017 to approximately 17.30 million TEUs in 2019 and approximately 18.35 million TEUs in 2020 according to the statistics from the Ministry of Transport of the PRC). It is therefore expected that the demand for warehouses and depots will remain keen. Coupled with the scarce supply of available warehouses and depots in the Beijiang Port Area, it is likely the rents of warehouses and depots may further increase.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Having considered that (i) the Target Assets could provide support to the port ancillary services of the Group; (ii) the scarcity of warehouse and depot supply at the port of Tianjin, especially in the Beijiang Port Area; (iii) the continuous growth of container throughput volume at the port of Tianjin; (iv) the Acquisition would enable the Group to eliminate future uncertainties such as failure in renewal of lease or potential increase in rental payment; (v) the Target Assets could be transformed by the Group in accordance with its business needs for future development; and (vi) our analysis as set out under the section headed “6. Our analysis on the Acquisition and the Assets Transfer Agreement” in this letter below, we concur with the Directors that the Acquisition is in line with the business development strategy and future plan of the Group and is in the interests of the Company and its Shareholders as a whole.

5. Principal terms of the Assets Transfer Agreement

Set out below is a summary of the principal terms of the Assets Transfer Agreement. For further details, please refer to the Letter from the Board.

Date

15 December 2020

Parties

TP International Logistics (as transferor) Tianjin Shipping Agency (as transferee)

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Assets to be acquired

The Target Assets, being Phase I of Tianjin Port Container Logistics Centre Depot, details of which are set out in the section headed “Information on the Target Assets” in the Letter from the Board.

Consideration

The consideration for the Target Assets is RMB238,624,100, which was arrived at after arm’s length negotiations between Tianjin Shipping Agency and TP International Logistics with reference to the appraised value determined by the independent valuer, China Tong Cheng, who carried out the valuation of the market value of the Target Assets as at the valuation reference date of 31 August 2020, and the appraised value was RMB238,624,100.

The consideration shall be paid in full by Tianjin Shipping Agency to TP International Logistics on 30 April 2021.

Effectiveness of the Assets Transfer Agreement

The Assets Transfer Agreement shall become effective upon the approval of the Acquisition at the extraordinary general meeting of the Company.

Completion Date

The Target Assets shall be transferred to Tianjin Shipping Agency by TP International Logistics on or before 31 March 2021. Tianjin Shipping Agency shall become the legal owner of the Target Assets with effect from the completion date, who shall be entitled to all rights and shall bear all obligations and liabilities in relation to the Target Assets.

6. Our analysis on the Acquisition and the Assets Transfer Agreement

6.1 Analysis on the Acquisition

(i) The Acquisition will facilitate the sustainable development of the Group’s business operations at the port of Tianjin

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. The Target Assets, being Phase I of Tianjin Port Container Logistics Centre Depot with a total site area of 168,736.70 square metres, were occupied by the Group for its operations up to the end of the relevant lease term, being October 2020, pursuant to the subject lease agreement. The Group has utilised the Target Assets for the provision of its other port ancillary services for over ten years. The Acquisition will provide the Group with more certainty in terms of costs management going forward and it will also enable the Group to secure the usage of the notable land area and facilities in the port of Tianjin, forming part of the Target Assets.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(ii) The Acquisition will reduce the risks associated with future renewal of lease and potential increase in lease expenses

As disclosed in the Letter from the Board, TP International Logistics leased a portion of the Target Assets to the Group for the year ended 31 December 2018 and all of the Target Assets for the year ended 31 December 2019 and the rental expenses were approximately RMB11.98 million and RMB14.16 million, respectively. Taking into account the historical inflation rate in the PRC, it is likely that the rent in relation to the Target Assets would increase further going forward.

Besides, as stated in the 2020 Interim Report, the Group’s cash and cash equivalents balance as at 30 June 2020 was approximately HK$7.6 billion. The consideration for the Target Assets of approximately RMB238,624,100 accounted for less than 3.5% of the Group’s cash and cash equivalents as at 30 June 2020, on this basis the Acquisition would not have any material impact on the financial sustainability of the Group.

Based on the above, the Acquisition is in line with the Group’s continuous development strategy to further enhance the competitiveness of the port of Tianjin.

(iii) The Acquisition will give rise to possible enhancement

The Target Assets are located at the port of Tianjin, being the principal location where the Group carries out its business activities in the PRC. In addition, as stated in the 2019 Annual Report, the Group is striving to build a world-class intelligent and green hub port, promote high-quality development, accelerate intelligent port facilities innovation, improve the intelligence level of port operations, and increase the efficiency in operation, service and management.

As discussed in the section headed “3. Overview of the economy in the PRC and the port of Tianjin” above, the implementation of, among others, the One Belt, One Road initiative and the Jing-Jin-Ji integration programme will continue to provide business opportunities for the Group, and to maintain its competitiveness, the Group intends to position itself as a world-class intelligent and green hub port. As such, additional land resources and related ancillary facilities would be essential for the success of attaining the Group’s objectives. In this connection, the Acquisition would enhance the land resources owned by the Group at its principal business location and also allow the Group to further enhance and extend its services by possible transformation and further development of the Target Assets in the future, where necessary.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

6.2 Analysis on the consideration

As set out in the Letter from the Board, the consideration for the Target Assets pursuant to the Assets Transfer Agreement is RMB238,624,100, which was arrived at after arm’s length negotiations between Tianjin Shipping Agency and TP International Logistics with reference to the appraised value of the Target Assets of RMB238,624,100 determined by the independent valuer, China Tong Cheng, as at the valuation reference date of 31 August 2020.

We understand from the Management that the Target Assets have been appraised by Roma, an independent firm of qualified valuer in Hong Kong, for Independent Shareholders’ reference purpose. According to the HK Valuation Report prepared by Roma, the value of the Target Assets was approximately RMB239,000,000 as at 30 November 2020, among which RMB132,000,000 was attributable to the buildings and structures and RMB107,000,000 was attributable to the land.

As part of our work performed, we have obtained and reviewed (i) the terms of engagement of Roma with the Company; (ii) Roma’s qualification in relation to the preparation of the HK Valuation Report; and (iii) the work scope of Roma for preparing the HK Valuation Report, we were satisfied with their qualification for the preparation of the HK Valuation Report. We also noted that the personnel in charge and signing the HK Valuation Report is a member of Royal Institution of Chartered Surveyors with over 21 years of valuation experience including over 13 years of experience in valuation of properties in the PRC. Roma also confirmed that they are independent to the Group and the transferor.

We noted from the HK Valuation Report that the Target Assets comprised of (i) the building and structure portion; and (ii) the land portion, and the value of the Target Assets was determined based on the sum of (i) the value of the building and structure portion on the depreciated replacement cost basis with certain adjustments; and (ii) the value of the land portion assessed by the market comparison approach.

We further reviewed and enquired into the methodology adopted and the basis and assumptions adopted in the HK Valuation Report with a view to further analyse the HK Valuation Report, details of which are set out in Appendix I of this Circular.

Roma appraised the building and structure portion of the Target Assets on the basis of its depreciated replacement cost. It is based on the assessment of cost required to replace or reproduce the existing buildings and structures of the Target Assets as at 30 November 2020 and adjusted with physical deterioration and all relevant forms of obsolescence and optimisation. As confirmed by Roma, market approach and income approach are other commonly adopted approaches for valuation of building and structure portion, which were also considered but was deemed to be less suitable compared to the adopted cost approach. As such, due to the specific purpose and unique nature of the building and structure portion of the Target Assets as well as the building and structure portion of the Target Assets was not directly income generating from independent third parties, such approaches were not selected for the valuation of building and structure portion of the Target Assets.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As part of our work performed, we also obtained the workings of the valuation for the buildings and structures and understood that the construction costs of the buildings and structures (having considered certain adjustments to reflect depreciation) were used to arrive the value of buildings and structures. In arriving the appraised value of buildings and structures, we noted that Roma has taken into account various factors including, among others, (i) gross floor area; (ii) estimated construction costs per square metre; (iii) relevant professional fees; (iv) construction period; (v) finance cost; and (vi) depreciation rates. We have discussed with Roma regarding the major factors taken into consideration in arriving the appraised value of buildings and structures, and noted that these factors are commonly used parameters when appraising the value of a subject building and structure by adopting depreciated replacement cost approach. In this regard, we have (i) reviewed the relevant source of information and calculations; (ii) discussed with Roma the basis and assumptions of the major factors considered; and (iii) noted that (a) the estimated construction costs per square metre for industrial and office buildings and structures in Tianjin were determined with reference to data published in a research report by an independent quantity surveying consultancy firm; and (b) the depreciation rates were determined with reference to the remaining useful life of the respective buildings and structures, which is in line with the industry practice.

On the other hand, in assessing the market value of the land portion of the Target Assets, Roma considered to adopt the market approach which was understood to be a common approach in evaluating the market value of a parcel of land. As advised by Roma, they considered there to be sufficient representative comparable transactions to conduct the valuation by adopting the market approach.

According to the HK Valuation Report, Roma has made reference to recent comparable land transactions in Tianjin city (the “ Land Comparables ”) in the subject and nearby development to value the land portion of the Target Assets. The selection criteria for the Land Comparables were, among others, (i) the land usage of the comparables was for storage use; (ii) the transaction was conducted through transfer of rights of use; (iii) the subject land is located at Tianjin city; (iv) the area of the subject land was between 20,000 square metres to 120,000 square metres; and (v) the transaction took place within one year from the date of the Assets Transfer Agreement, i.e. 15 December 2020.

In this connection, we obtained details of the Land Comparables used for the valuation, such as, the respective location, size, land use and agreement date. We also understood from Roma that the consideration of the Land Comparables (having considered the adjustments to the price per square metre with reference to reflect factors including time, location and size) were used to arrive the price per square metre of the land.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As part of our work performed, we further reviewed the Land Comparables used for the valuation and we noted that all of the Land Comparables have satisfied the selection criteria as mentioned above. As discussed with Roma, we noted that it is a common practice for valuers to set parameters for their selection of comparables under the market approach with a view to obtain comparable transactions to facilitate their appraisal of the subject valuation. Furthermore, we noted that the source data of the Land Comparables used by Roma is China Land Market*（中國土地市場網）which is a national platform containing land transaction details in the PRC market as well as the provision of services to, including but not limited to, land and real estate market consulting and research institutions, academic researchers and enterprises principally engaged in PRC property market. Taking into consideration that (i) the Land Comparables were selected based on the criteria set out above; (ii) the similarities of the Land Comparables to the Target Assets; and (iii) the source of the Land Comparables, we concur with Roma that the Land Comparables used for the adoption of the market approach are reasonable.

Furthermore, we understand from the Management that China Tong Cheng, being an independent valuer based in the PRC, was engaged by TP International Logistics to appraise the Target Assets. Based on our review of the PRC Valuation Report issued by China Tong Cheng, we noted that the valuation methodologies adopted in the PRC Valuation Report were in line with those adopted by Roma. We noted that there were no material differences between the market value of the Target Assets appraised by China Tong Cheng and the market value of the Target Assets appraised by Roma. On this basis, the PRC Valuation Report further supports our analysis that the appraised value as set out in the HK Valuation Report is an appropriate benchmark for assessing the fair and reasonableness of the consideration of the Target Assets under the Assets Transfer Agreement.

Having considered (i) the valuation methodology adopted by Roma for determining the fair value of the Target Assets is in line with market practice and the underlying basis and assumptions are reasonable; (ii) the appraised value as set out in the HK Valuation Report is an appropriate benchmark to assess the consideration of the Target Assets; (iii) the consideration of the Target Assets is slightly lower than the market value as appraised by Roma; and (iv) our work performed on the HK Valuation Report, we are of the view that the consideration of the Target Assets is fair and reasonable.

7. Financial impact of the Acquisition

As advised by the Management, the Target Assets will be used for the Group’s business operation after completion of the Acquisition. The total assets and net asset value of the Group are expected to broadly remain at a similar level as the increase in property, plant and equipment will be offset by the decrease in bank balances.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

VI. OPINION AND RECOMMENDATION

Having considered, among others,

(i) the Target Assets shall facilitate the Group to provide other port ancillary services, being one of the Group’s principal businesses;
(ii) the reasons for and the benefits of the Acquisition as set out in “4. Reasons for and benefits of the Acquisition” above;
(iii) our analysis on the Acquisition and the consideration as set out under section headed “6. Our analysis on the Acquisition and the Assets Transfer Agreement” above; and
(iv) the consideration represents a slight discount to the market value of the Target Assets based on the HK Valuation Report,

we consider that the Acquisition is conducted in the ordinary and usual course of business of the Group, and on normal commercial terms, and the terms of the Assets Transfer Agreement and the Acquisition are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole.

Accordingly, we advise the Independent Board Committee to recommend, and we ourselves recommend, the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Assets Transfer Agreement and the Acquisition.

Yours faithfully, for and on behalf of Red Sun Capital Limited Lewis Lai Managing Director

Mr. Lewis Lai is a licensed person registered with the SFC and a responsible officer of Red Sun Capital Limited to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO and has over 13 years of experience in the corporate finance industry.

For identification purposes only

– 26 –

HK VALUATION REPORT ON THE TARGET ASSETS

APPENDIX I

The following is the text of a letter and valuation report prepared for the purpose of incorporation in this circular received from Roma Appraisals Limited, an independent valuer, in connection with its valuation of the property interest to be acquired by the Group as at 30 November 2020. Terms defined in this appendix applies to this appendix only.

==> picture [103 x 60] intentionally omitted <==

22/F, China Overseas Building, 139 Hennessy Road, Wan Chai, Hong Kong Tel (852) 2529 6878 Fax (852) 2529 6806 E-mail [email protected] http://www.romagroup.com

29 January 2021

The Board of Directors

Suite 3904-3907, 39/F., Tower Two, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong

Dear Sirs/Madams,

INSTRUCTIONS, PURPOSE AND VALUATION DATE

In accordance with your instructions for us to assess the Market Value of the property interest to be acquired by Tianjin Port Development Holdings Limited (the “Company”) and/or its subsidiaries (together with the Company referred to as the “Group”) situated in the People’s Republic of China (the “PRC”), we confirm that we have carried out inspection, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the Market Value of the property interest as at 30 November 2020 (the “Valuation Date”) for public disclosure purpose.

VALUATION STANDARDS

— Our valuation is prepared in accordance with the RICS Valuation Global Standards published by the Royal Institution of Chartered Surveyors, HKIS Valuation Standards 2020 published by the Hong Kong Institute of Surveyors and the International Valuation Standards published by the International Valuation Standards Council; and complied with the requirements set out in Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited published by The Stock Exchange of Hong Kong Limited.

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HK VALUATION REPORT ON THE TARGET ASSETS

APPENDIX I

VALUATION BASIS

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

VALUATION METHODOLOGY

Due to the specific purpose and unique nature of the property and the property is not directly income generating, there is no readily available market evidence for adoption of market approach or income approach, and therefore cost approach was adopted. We have referenced to the depreciated replacement cost which is based on the assessment of cost required to replace or reproduce the existing buildings of the property as at the Valuation Date and adjusted with physical deterioration and all relevant forms of obsolescence and optimization, to arrive at the market value of the building and structure portion of the property. The value of the land portion of the property is assessed by market comparison approach. Market Value of the property is arrived at the sum of the values of the buildings and land portions.

VALUATION ASSUMPTIONS

Our valuation has been made on the assumptions that the owner sells the property in the market in its existing state without the benefit of deferred term contracts, leasebacks, joint ventures, management agreements or any similar arrangements which would serve to affect the value of the property interest. No account has been taken of any option or right of pre-emption concerning or affecting the sale of the property. No allowance has been made in our valuation for any charges, mortgages or amounts owing on the property nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, we have assumed that the property is free from encumbrances, restrictions and outgoings of an onerous nature which could affect its value. We assumed the property has complied with all the planning and building regulations as applicable.

SOURCE OF INFORMATION

In the course of our valuation, we have relied to a very considerable extent on the information provided by the Group and the Group’s PRC legal adviser, Grandall Law Firm (Tianjin)（國浩律師（天津）事務所）. We have accepted advice given to us on matters such as identification of the property, occupation particulars, floor areas, site areas, construction years and all other relevant matters which can affect the value of the property. All documents have been used for reference only. We have no reason to doubt the truth and accuracy of the information provided to us. We have also been advised that no material facts have been omitted from the information supplied. We consider that we have been provided with sufficient information to reach an informed view, and have no reason to suspect that any material information has been withheld. Wherever the information contained in this valuation report is referenced to or extracted from documents which are originally written in Chinese, when there is any doubt or discrepancy in the wordings or meanings, the original documents should prevail.

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APPENDIX I

TITLE INVESTIGATION

We have been provided with copies of extracts of title documents in relation to the property. However, under the current land registration system of the PRC, we are not able to conduct title search to verify the original of such documents have been registered with the relevant official authorities, and we have not scrutinized the original documents to verify any amendment which may not appear on the copies handed to us. Thus, we have relied on the advices and information regarding the property title status provided by the Group and the Group’s PRC legal adviser in the course of our valuation. All information of such documents disclosed in this report have been used for reference only and we do not accept any liability to any matters in relation to interpretation or the legality of such documents.

INSPECTION AND INVESTIGATIONS

We have inspected the exterior and endeavored to inspect the interior of the property where possible. During the course of our inspection, no structural survey has been made in respect of the property and we did not notice any serious defects. We are not able to report that the property is free from rot, infestation or any other structural defects. No test was carried out on any of the building services. We have not carried out any land investigation or environmental surveys but during our inspection we did not notice and have not been advised of any evidence of environmental concerns such as existing/potential contamination or any form of hazard, and therefore we assumed none of such exists. We have not carried out on-site measurement to verify the floor and site areas of the property but we have assumed that the area information shown on the documents handed to us are correct. Except as otherwise stated, all dimensions, measurements and areas reported in this valuation report are based on information contained in the documents provided to us by the Group and are therefore approximations.

MARKET AND VALUATION REMARK

The outbreak of COVID-19, declared by the World Health Organisation as a “Global Pandemic” on 11th March 2020, has and continues to impact many aspects of daily life and the global economy – with some real estate markets having experienced lower levels of transactional activity and liquidity. Travel, movement and operational restrictions have been implemented by many countries. In some cases, “lockdowns” have been applied to varying degrees and to reflect further “waves” of COVID-19; although these may imply a new stage of the crisis, they are not unprecedented in the same way as the initial impact. The pandemic and the measures taken to tackle COVID-19 continue to affect economies and real estate markets globally. Nevertheless, as at the Valuation Date, property market in the PRC are generally functioning again, with transaction volumes and other relevant evidence at levels where an adequate quantum of market evidence exists upon which to base opinions of value. Although the market is recovering from the impact of pandemic, there is still a certain degree of uncertainty and volatility in the market, therefore we have to state that our valuation is only relied on the information and the market condition available as at the Valuation Date. Any significant change in the real estate or economic market condition which may impact the valuation of the property existed after the Valuation Date might not have been considered in this valuation. We recommend any party whom may rely on our valuation of the property should seek regular review of our opinions.

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HK VALUATION REPORT ON THE TARGET ASSETS

APPENDIX I

CURRENCY

Unless otherwise stated, all monetary amounts stated in our valuation is in Renminbi (“RMB”), the lawful currency of the PRC.

Our Valuation Certificate is attached herewith.

Yours faithfully,

For and on behalf of

Roma Appraisals Limited

Frank F Wong

BA (Business Admin in Acct/Econ) MSc (Real Est) MRICS Registered Valuer MAusIMM ACIPHE

Director

Note: Mr. Frank F. Wong is a Chartered Surveyor, Registered Valuer, Member of the Australasian Institute of Mining & Metallurgy and Associate of Chartered Institute of Plumbing and Heating Engineering with over 21 years of valuation, transaction advisory and project consultancy experience of properties in Hong Kong and 13 years of experience in valuation of properties in the PRC as well as relevant experience in the Asia-Pacific region, Australia and OceaniaPapua New Guinea, Thailand, France, Germany, Poland, United Kingdom, United States, Abu Dhabi (UAE), Ukraine and Jordan.

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HK VALUATION REPORT ON THE TARGET ASSETS

APPENDIX I

VALUATION CERTIFICATE

Property interest to be acquired by the Group for owner occupation in the PRC

Property Description and Tenure

Phase I of Tianjin Port The property comprises a parcel of land with Container Logistics Centre all the buildings, structures and improvements Depot situated at No. 502, erected thereon for container storage yard, Yuejin Road, Tanggu Area, storage and logistic uses. Tianjin City, the PRC 中國天津市塘沽區 As per information provided by the Group, the 躍進路502號 buildings of the property have a total gross 天津港集裝箱物流中心 floor area (“GFA”) of approximately 15,027.08 堆場一期 sq.m. with various ancillary structures and improvements, mainly completed in 2004 with major renovation and expansion carried out in 2018. GFA breakdown of the buildings is as below:

Market Value in Existing State Particulars of as at Occupancy 30 November 2020 The property is RMB239,000,000 vacant as at the (Renminbi Two Valuation Date. Hundred Thirty-Nine Million)

Buildings High-bay Warehouse Fire Pump Room Comprehensive Building Canteen Guard Room Gatehouse Total:	GFA (sq.m.) 11,776.88 66.23 2,819.58 300.90 8.54 54.95
	15,027.08

Pursuant to the Real Estate Title Certificate, the land of the property has a site area of 168,736.70 sq.m. and the state owned land use right was granted for a term to be expired on 4 June 2057 for storage use.

Notes:

Pursuant to the Real Estate Title Certificate, Fang Di Zheng Jin Zi No. 107011010915（房地證津字第107011010915號） issued on 26 March 2010, the state owned land use right and the buildings ownership of the property have been granted to Tianjin Port International Logistics Development Co., Ltd.（天津港國際物流發展有限公司） (“TP International Logistics”), salient information is summarized as below:

State Owned Land Use Right

Location: Usage: Land Use Right Expiry Date: Site Area:

No.502, Yuejin Road, Tanggu Area Storage 4 June 2057 168,736.70 sq.m.

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HK VALUATION REPORT ON THE TARGET ASSETS

APPENDIX I

Buildings Ownership

The ownership of below buildings have been granted to TP International Logistics:

			Usage
Block No.	No. of Storey	GFA (sq.m.)	(as stated on the Certificate)	Current Usages
1	1	54.95	Non-domestic	Gatehouse
2	4	2,819.58	Non-domestic	Comprehensive Building
3	2	11,776.88	Non-domestic	High-bay Warehouse

As advised by the Group, TP International Logistics is a non wholly-owned subsidiary of Tianjin Port (Group) Co., Ltd. （天津港（集團）有限公司） (“Tianjin Port Group”). Tianjin Port Group is a wholly state-owned company in the PRC and an indirect holder of 53.5% of the issued share capital of the Company.
According to information advised by the Group, the property is subjected to a proposed transfer agreement dated 15 December 2020 between TP International Logistics (as transferor) and China Ocean Shipping Agency Tianjin Co., Ltd.

（中國天津外輪代理有限公司）, a non wholly-owned subsidiary of the Group, (as transferee), with a consideration of RMB238,624,100 to be completed on or before 31 March 2021.

We have been provided with a legal opinion issued by the Group’s PRC legal adviser, Grandall Law Firm (Tianjin), which contains, inter alia, the following:
i. TP International Logistics has fully settled the land premium of the property. It has legally and validly acquired and in possession of the state owned land use right and buildings ownership of the property as stated on the Real Estate Title Certificate (as detailed in Note 1), and therefore it is the sole legal owner of the property;
ii. TP International Logistics is legally entitled to lease, dispose, mortgage, or any other lawful means to manage or handle the property within the granted land use term and the permitted usages with all the legal requirements fulfilled;
iii. The property is not subject to any encumbrances, such as seizure, etc., which might limit or affect TP International Logistics’s right to use or occupy the property; and
iv. The canteen and guard room buildings have not been granted with title ownership yet. However, such buildings are not material to the operation of the property and their functions can be conveniently substituted, the impact of such matter to the operation and marketability of the property is negligible.
According to information provided by the Group, the canteen and guard room buildings with a total GFA of approximately 309.44 sq.m. are yet to obtain legal title of building ownership. In the course of this valuation, we have attributed no commercial value to these buildings. For reference purpose, by assuming these buildings have been granted with legal ownership title and therefore can be freely transfer in the open market, the value for reference as at the Valuation Date of these buildings is estimated at circa RMB320,000.
The property was inspected in December 2020 by our Mr. Jack J. J. Zhou whom has over 2 years property valuation experience in the PRC.
The property is situated in the Tanggu Area within Binhai New Area, where is a hub of international logistics and shipping centers and high-tech manufacturing industries located at the coastal area of eastern Tianjin city. The surrounding of the property is predominated by various logistics and storage centers, office buildings and residential developments. The property is situated about 15 minutes driving distance from the port of Tianjin, about 10 minutes driving distance from the Beijing-Tianjin Highway entrance and about an hour driving distance from Tianjin International Airport.

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PRC VALUATION REPORT ON THE TARGET ASSETS

APPENDIX II

The following is the text of the valuation report prepared by 中通誠資產評估有限公司 (China Tong Cheng Assets Appraisal Co., Ltd.*) in connection with the valuation of the Target Assets as at 31 August 2020.

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

This Report is prepared in accordance with PRC Asset Valuation Standards

Asset Valuation Report on the Project of Phase I of Tianjin Port Container Logistics Centre Depot Held and Proposed to be Transferred by Tianjin Port International Logistics Development Co., Ltd.

Zhong Tong Ping Bao Zi [2020] No. 12269 1 of 1

China Tong Cheng Assets Appraisal Co., Ltd.

19 November 2020

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APPENDIX II

Declaration of the Asset Valuers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	35
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	36
I. Overview of the Client, the Appraised Entity and Other Users of the
Valuation Report as Agreed in the Asset Valuation Engagement Contract . . . . . . .	40
II. Purpose of Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	41
III. Valuation Target and Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	41
IV. Type of Value and Its Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	44
V. Valuation Reference Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	44
VI. Basis of Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	44
VII. Valuation Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	47
VIII. Process and Implementation of Valuation Procedures . . . . . . . . . . . . . . . . . . . . . . .	54
IX. Valuation Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	55
X. Valuation Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	55
XI. Explanations to Special Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	56
XII. Restrictions on the Use of the Valuation Report . . . . . . . . . . . . . . . . . . . . . . . . . . .	57
XIII. Date of the Valuation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	57
Annexes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	58
Letter of Undertaking from the Asset Valuers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	59

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PRC VALUATION REPORT ON THE TARGET ASSETS

APPENDIX II

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 for Asset Appraisal issued by the China Appraisal Society.
II. The client or other users of the Asset Valuation Report shall use the Asset Valuation Report in accordance with the laws and 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 client or other users of the Asset Valuation Report.

This Asset Valuation Report shall only be used by the client, 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, 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 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.

III. This asset valuation agency and our asset valuers have abided by the principles of independence, objectivity and fairness, complied with the laws, administrative regulations and asset valuation standards, and have assumed responsibilities for the published Asset Valuation Report in accordance with laws.
IV. The lists of assets and liabilities and other relevant materials of the valuation target involved should be declared by the client and the appraised entity and certified by signature, seal or other means permitted by laws. The client 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 as set out 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 client 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, judgments, and conclusions in this 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 special notes specified in the Asset Valuation Report and their impact on the valuation conclusion.

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PRC VALUATION REPORT ON THE TARGET ASSETS

APPENDIX II

Summary

I. CORRESPONDING ECONOMIC ACTIVITY UNDER THIS VALUATION

In connection with the proposed transfer of the assets of the Project of Phase I of Tianjin Port Container Logistics Centre Depot held by Tianjin Port International Logistics Development Co., Ltd., it is required to conduct a valuation on the assets of the Project of Phase I of Tianjin Port Container Logistics Centre Depot involved in the said economic activity.

The relevant economic activity document is the twelfth board resolution of Tianjin Port (Group) Co., Ltd. of 2020.

II. PURPOSE OF VALUATION

Due to the proposed transfer of the assets of the Project of Phase I of Tianjin Port Container Logistics Centre Depot held by Tianjin Port International Logistics Development Co., Ltd., it is required to conduct a valuation on the assets of the Project of Phase I of Tianjin Port Container Logistics Centre Depot involved in the said economic activity, for the purpose of providing valuation reference for the transfer of assets.

III. VALUATION TARGET AND VALUATION SCOPE

The valuation target is the assets value of the Project of Phase I of Tianjin Port Container Logistics Centre Depot held and proposed to be transferred by Tianjin Port International Logistics Development Co., Ltd.

The valuation scope includes the assets of the Project of Phase I of Tianjin Port Container Logistics Centre Depot held and proposed to be transferred by Tianjin Port International Logistics Development Co., Ltd. corresponding to the valuation target. The details of the assets declared by the enterprise and included in the scope of this valuation are as follows:

1. Buildings

No.	Title Certificate No.	Name of Constructions	Structure	Completion Date	Unit of Measurement	Gross Floor Area (m2)	Unit Cost (RMB yuan/m2)	Book Value (RMB yuan)	Book Value (RMB yuan)
								Original	Net
1	Jin Zi No. 107011010915	Depot Phase I (high bay warehouse)	Steel frame	December 2004, September 2018	m2	11,776.88	2,023.49	23,830,431.56	23,226,727.32
2	Nil	Depot Phase I (fire pump room)	Brick concrete	December 2004	m2	66.23	10,447.08	691,910.29	394,236.61
3	Jin Zi No. 107011010915	Depot Phase I Comprehensive building	Frame	December 2004	m2	2,819.58	2,222.57	6,266,703.03	3,626,524.98
4	Nil	Canteen	Frame	November 2005	m2	300.90
5	Nil	Guard room	Brick concrete	December 2004	m2	8.54
6	Jin Zi No. 107011010915	Depot Phase I (gatehouse)	Mixed	December 2004	m2	54.95
Total								30,789,044.88	27,247,488.91

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APPENDIX II

Among which: the book values of No. 4 and No. 5 are included in No. 2 of Structures; the book value of No. 6 is included in No. 1 of Structures.

2. Structures

No.	Name	Structure	Completion Date	Length (m)	Width (m)	Unit of Measurement	Gross Floor Area (m2) or Volume (m3)	Book Value (RMB yuan)	Book Value (RMB yuan)
								Original	Net
1	Depot Phase I (gatehouse)	Steel frame	December 2004					1,408,986.54	704,536.19
1-1	Inbound gatehouse	Mesh	December 2004			m2	1,488.20
1-2	Outbound gatehouse	Mesh	December 2004			m2	1,349.46
1-3	Gatehouse square	Concrete	December 2004			m2	16,804.00
2	Depot Phase I (depot)	Concrete	December 2004					116,049,691.47	58,028,369.30
2-1	Depot and roads	Interlocking block, concrete	December 2004			m2	133,731.90
2-2	1000m3Pool	Concrete	December 2004			m3	1,000.00
2-3	Phase I foundation treatment		December 2004			m2	106,548.00
2-4	SBR waste water pond	Concrete	December 2004			m3	78.75
2-5	East expansion depot	Interlocking block, concrete	July 2010			m2	5,236.00
2-6	Outdoor-valve well 1200*1200	Concrete	August 2018	1.2	1.2	block
2-7	Outdoor-valve well 1400*1400	Concrete	August 2018	1.4	1.4	block
2-8	Outdoor-water pump splicer well	Concrete	August 2018			block
2-9	Outdoor-water meter well, cable well	Concrete	August 2018			block
2-10	Outdoor-electrical	Steel pipe, cable, concrete	August 2018	800m hot-dip galvanised steel pipe, 310m power cable, breaking and restoring 320m2steel fiber concrete cast-in-place slab
2-11	Outdoor-light current	Steel pipe, cable, concrete	August 2018	1200m hot-dip galvanised steel pipe, 1845m control cables, breaking and restoring 364m2steel fiber concrete cast-in-place slab, restoring 128m2asphalt concrete road base
2-12	Outdoor-fire control	Steel pipe, concrete	August 2018	3619m steel wire mesh skeleton composite water supply pipe, 37 valves, 21 fire hydrants. Breaking and restoring 5318m2steel fiber concrete cast-in-place slab, restoring 384m2asphalt concrete road base, restoring 1818.2m2interlocking block pavement
2-13	Outdoor-water supply	Steel pipe, concrete	August 2018	495m steel wire mesh skeleton composite water supply pipe, 13 valves, 2 water meters. Breaking and restoring 929m2steel fiber concrete cast-in-place slab
2-14	Outdoor-water drainage	Corrugated drainage pipe, concrete	August 2018	300m high-density polyethylene double-wall corrugated drainage pipe, breaking and restoring 300m2steel fiber concrete cast-in-place slab, 1420m3trenching soil
2-15	Fence	Ironwork	August 2018	1,234.9		m
2-16	External network within the plant: pipeline network	Pipeline, earthwork, well	August 2018	5,100		m
2-17	External network within the plant: cable trench	Steel concrete, earthwork	August 2018	4,000		m
2-18	External network within the plant: high–pole lights, box transformers, cables	Concrete, steel pipe	August 2018	26 courtyard lights and foundation, 8 high-pole lights and foundation, grounding device. Threading pipe and cable, earth excavation and backfill, one 800KVA box-type transformer.
3	Bicycle shed		November 2005	34	13	m
Total								117,458,678.01	58,732,905.49

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PRC VALUATION REPORT ON THE TARGET ASSETS

APPENDIX II

3. Equipment

No.	Equipment No.	Name of Equipment	Original Value (RMByuan)	Net Value (RMByuan)
1		Firepumproom equipment	949,970.00	47,498.50

4. Land use rights

Land Right Certificate No.	Name of Land Parcel	Land Location	Obtaining Date	Nature of Land	Usage of Land	Expiration Date for Use	Degree of Development	Area (m2)	Original Carrying Value (RMB yuan)	Book Value (RMB yuan)
Jin Zi No. 107011010915	Depot Phase I	Yuejin Road, Tanggu Area	June 2007	Transfer	Warehouse	4 June 2057	7 availabilities and 1 levelling	168,736.70	93,388,822.04	69,334,125.32

IV. TYPE OF VALUE

Market value.

V. VALUATION REFERENCE DATE

31 August 2020

VI. VALUATION METHODOLOGY

In this valuation, the cost approach is adopted to appraise buildings and equipment and the valuation result is taken as the valuation conclusion; the market approach and the benchmark land value approach are adopted to appraise the land use rights and the arithmetic mean of them is taken as the valuation conclusion.

VII. VALUATION CONCLUSION AND ITS VALIDITY PERIOD

The valuation conclusion is that the appraised value of the assets proposed to be transferred by Tianjin Port International Logistics Development Co., Ltd. is RMB238,624,100 (TWO HUNDRED THIRTY-EIGHT MILLION SIX HUNDRED TWENTY-FOUR THOUSAND ONE HUNDRED, rounding to the nearest one hundred).

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

VIII. SPECIAL MATTERS WITH SPECIAL IMPACTS ON THE VALUATION CONCLUSION

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

Nil.

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PRC VALUATION REPORT ON THE TARGET ASSETS

APPENDIX II

(II) Incomplete or Defective Ownership Information;

Among the assets declared by the enterprise, the fire pump room and the canteen have not yet applied for real estate title certificates. This valuation is based on the area declared by the enterprise which has been confirmed after the verification of on-site inspection. The construction cost of the canteen has been included in the depot. This valuation has not taken into consideration the impact of the lack of real estate title certificates.

(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 Material Effect on the Valuation Conclusion;

Nil.

(IX) Special Matters.

The appraised value of this valuation excludes the value-added tax.
This valuation has not taken into consideration the impact of relevant taxes in the process of property rights transactions on the appraised value. It is understood that the transfer of assets by Tianjin Port International Logistics Development Co., Ltd. may involve the payment of land value-added tax. This valuation has not taken into consideration the taxes required for the final settlement of the land value-added tax.
The land appraised value is deed tax-exclusive, and this valuation has not taken into consideration the impact of deed tax.

The above contents are extracted from the text of the Valuation Report. Please read the text of the Valuation Report to understand details of this valuation and to correctly comprehend the valuation conclusion.

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APPENDIX II

Asset Valuation Report on the Project of Phase I of Tianjin Port Container Logistics Centre Depot Held and Proposed to be Transferred by Tianjin Port International Logistics Development Co., Ltd.

Zhong Tong Ping Bao Zi [2020] No. 12269

To: Tianjin Port International Logistics Development Co., Ltd.

Upon your engagement, we, China Tong Cheng Assets Appraisal Co., Ltd., have appraised the market value as at 31 August 2020 of the assets of the Project of Phase I of Tianjin Port Container Logistics Centre Depot, which is involved in the proposed transfer of the assets of the Project of Phase I of Tianjin Port Container Logistics Centre Depot held by Tianjin Port International Logistics Development Co., Ltd., by adopting the cost approach, market approach and benchmark land value 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 CLIENT, THE OWNER OF PROPERTY RIGHTS AND OTHER USERS OF THE VALUATION REPORT AS AGREED IN THE ASSET VALUATION ENGAGEMENT CONTRACT
(I) Overview of the Client and the Owner of Property Rights

Name: Tianjin Port International Logistics Development Co., Ltd.

Unified social 911201167440479609 credit code: Domicile: Room 308, No. 98 Xingang Avenue, Tianjin Pilot Free Trade Zone (Tianjin Port Bonded Zone)

Type: Limited liability company

Registered capital: RMB450,000,000

Principal businesses: construction and related services of infrastructure, transfer and lease of facilities and equipment, loading and unloading, warehousing, packaging, processing and related business of containers and other goods, international freight forwarding services (sea, land and air), repair and cleaning of containers, international trade, information services, labour services, property management, intermediary services for various goods transactions, and consulting services in relation to the above items; management services of parking lots, import and export of goods and technology; sales of automobiles (excluding sedans); wholesale and retail of plastics, rubber and its products, metal materials, mechanical and electrical products (except sedans), chemical products and raw materials (except dangerous chemicals, highly toxic products and easily-produced toxic products) (projects that need to be approved according to laws can only be operated after being approved by relevant departments).

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PRC VALUATION REPORT ON THE TARGET ASSETS

APPENDIX II

(II) 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. Other institution and individual shall not be the user of this Asset Valuation Report.

II. PURPOSE OF VALUATION

The relevant economic activity document is the twelfth board resolution of Tianjin Port (Group) Co., Ltd. of 2020.

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

(II) Valuation Scope

1. Buildings

No.	Title Certificate No.	Name of Constructions	Structure	Completion Date	Unit of Measurement	Gross Floor Area (m2)	Unit Cost (RMB yuan/m2)	Book Value (RMB yuan)	Book Value (RMB yuan)
								Original	Net
1	Jin Zi No. 107011010915	Depot Phase I (high bay warehouse)	Steel frame	December 2004, September 2018	m2	11,776.88	2,023.49	23,830,431.56	23,226,727.32
2	Nil	Depot Phase I (fire pump room)	Brick concrete	December 2004	m2	66.23	10,447.08	691,910.29	394,236.61
3	Jin Zi No. 107011010915	Depot Phase I Comprehensive building	Frame	December 2004	m2	2,819.58	2,222.57	6,266,703.03	3,626,524.98
4	Nil	Canteen	Frame	November 2005	m2	300.90
5	Nil	Guard room	Brick concrete	December 2004	m2	8.54
6	Jin Zi No. 107011010915	Depot Phase I (gatehouse)	Mixed	December 2004	m2	54.95
Total								30,789,044.88	27,247,488.91

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Among which: the book values of No. 4 and No. 5 are included in No. 2 of Structures; the book value of No. 6 is included in No. 1 of Structures.

2. Structures

No.	Name	Structure	Completion Date	Length (m)	Width (m)	Unit of Measurement	Gross Floor Area (m2) or Volume (m3)	Book Value (RMB yuan)	Book Value (RMB yuan)
								Original	Net
1	Depot Phase I (gatehouse)	Steel frame	December 2004					1,408,986.54	704,536.19
1-1	Inbound gatehouse	Mesh	December 2004			m2	1,488.20
1-2	Outbound gatehouse	Mesh	December 2004			m2	1,349.46
1-3	Gatehouse square	Concrete	December 2004			m2	16,804.00
2	Depot Phase I (depot)	Concrete	December 2004					116,049,691.47	58,028,369.30
2-1	Depot and roads	Interlocking block, concrete	December 2004			m2	133,731.90
2-2	1000m3Pool	Concrete	December 2004			m3	1,000.00
2-3	Phase I foundation treatment		December 2004			m2	106,548.00
2-4	SBR waste water pond	Concrete	December 2004			m3	78.75
2-5	East expansion depot	Interlocking block, concrete	July 2010			m2	5,236.00
2-6	Outdoor-valve well 1200*1200	Concrete	August 2018	1.2	1.2	block
2-7	Outdoor-valve well 1400*1400	Concrete	August 2018	1.4	1.4	block
2-8	Outdoor-water pump splicer well	Concrete	August 2018			block
2-9	Outdoor-water meter well, cable well	Concrete	August 2018			block
2-10	Outdoor-electrical	Steel pipe, cable, concrete	August 2018	800m hot-dip galvanised steel pipe, 310m power cable, breaking and restoring 320m2steel fiber concrete cast-in-place slab
2-11	Outdoor-light current	Steel pipe, cable, concrete	August 2018	1200m hot-dip galvanised steel pipe, 1845m control cables, breaking and restoring 364m2steel fiber concrete cast-in-place slab, restoring 128m2asphalt concrete road base
2-12	Outdoor-fire control	Steel pipe, concrete	August 2018	3619m steel wire mesh skeleton composite water supply pipe, 37 valves, 21 fire hydrants. Breaking and restoring 5318m2 steel fiber concrete cast-in-place slab, restoring 384m2asphalt concrete road base, restoring 1818.2m2interlocking block pavement
2-13	Outdoor-water supply	Steel pipe, concrete	August 2018	495m steel wire mesh skeleton composite water supply pipe, 13 valves, 2 water meters. Breaking and restoring 929m2steel fiber concrete cast-in-place slab
2-14	Outdoor-water drainage	Corrugated drainage pipe, concrete	August 2018	300m high-density polyethylene double-wall corrugated drainage pipe, breaking and restoring 300m2steel fiber concrete cast-in-place slab, 1420m3trenching soil
2-15	Fence	Ironwork	August 2018	1,234.9		m
2-16	External network within the plant: pipeline network	Pipeline, earthwork, well	August 2018	5,100		m
2-17	External network within the plant: cable trench	Steel concrete, earthwork	August 2018	4,000		m
2-18	External network within the plant: high-pole lights, box transformers, cables	Concrete, steel pipe	August 2018	26 courtyard lights and foundation, 8 high-pole lights and foundation, grounding device. Threading pipe and cable, earth excavation and backfill, one 800KVA box-type transformer.
3	Bicycle shed		November 2005	34	13	m
Total								117,458,678.01	58,732,905.49

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3. Equipment

No.	Equipment No.	Name of Equipment	Original Value (RMByuan)	Net Value (RMByuan)
1		Firepumproom equipment	949,970.00	47,498.50

4. Land use rights

Land Right Certificate No.	Name of Land Parcel	Land Location	Obtaining Date	Nature of Land	Usage of Land	Expiration Date for Use	Degree of Development	Area (m2)	Original Carrying Value (RMB yuan)	Book Value (RMB yuan)
Jin Zi No. 107011010915	Depot Phase I	Yuejin Road, Tanggu Area	June 2007	Transfer	Warehouse	4 June 2057	7 availabilities and 1 levelling	168,736.70	93,388,822.04	69,334,125.32

(III) Layout and Characteristics of Physical Assets

1. Buildings (structures)

The original book value and the net book value of the fixed assets in the category of buildings included in this valuation is RMB148,247,722.89 and RMB85,980,394.40, respectively. There are 9 appraised assets in total, including buildings and structures, among which 6 are buildings with a gross floor area of 15,018.54 square meters, 3 are structures, namely gatehouse (including inbound and outbound gatehouse and gatehouse square of 16,804 square metres), depot with an area of 138,967.90 square meters and bicycle shed with a plane size of 33.5 metres in length and 13 metres in width.

The buildings were completed between 2004 and 2018, and the constructions mainly include the comprehensive building, high bay warehouse, fire pump room, guard room, transformer room and other buildings for the production and auxiliary to the Phase I of the depot. The constructions are mainly frame structure, mixed structure and portal frame structure. The structures mainly include the gatehouse, depots, fire fighting pools, roads, bicycle shed, fences, etc.

In 2017, the high bay three-dimensional center warehouse and fire pump room etc., which were affected and damaged by the 8.12 incident, were repaired and restored; at the same time, the supporting facilities were upgraded and renovated according to the new regulation requirements.

2. Equipment

The machinery and equipment are mainly dispersed in the plant where they are located, mainly being a set of fire pump room equipment, which is basically in good condition.

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

The intangible asset declared by the enterprise is a land use right of a land parcel located at Yuejin Road, Tanggu Area, Tianjin（天津市塘沽區躍進路）, with the land use right certificate number: Fang Di Zheng Jin Zi No. 107011010915, and an area of 168,736.70 square metres set out on the certificate, and the land is for storage land use, which was obtained in June 2007.

(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 Choosing 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 value 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 August 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.

VI. BASIS OF VALUATION

(I) Basis of Economic Activity

The twelfth board resolution of Tianjin Port (Group) Co., Ltd. of 2020.

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(II) Legal Basis Provided by Laws and Regulations

The Asset Appraisal Law of the People’s Republic of China;
The Law of the People’s Republic of China on the State-owned Assets of Enterprises;
The Administrative Measures for State-owned Assets Appraisal (Order No. 91 of the State Council);
The Detailed Rules for the Implementation of the Administrative Measures for Stateowned Assets Appraisal (Guo Zi Ban Fa [1992] No. 36);
The Provisional Regulations on the Supervision and Administration of State-owned Assets of Enterprises (Order No. 378 of the State Council);
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);
The Interim Measures for the Administration of Appraisal of State-owned Assets of Enterprises (Order No. 12 of the SASAC of the State Council);
The Regulations on Certain Issues Concerning State-owned Assets Appraisal (Order No. 14 of the Ministry of Finance);
The Measures for the Supervision and Administration of the Transactions of Stateowned Assets of Enterprises (Order No. 32 of the SASAC of the State Council and the Ministry of Finance);
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);
The Financial Supervision and Administration Measures on the Asset Appraisal Industry (Order No. 97 of the Ministry of Finance);
The Notice on Strengthening the Administration of State-owned Assets Appraisal of Enterprises (Guo Zi Wei Chan Quan [2006] No. 274);
Tianjin Land Administration Regulations (the second amendment was made on the thirty-fourth session of the Standing Committee of the fourteenth People’s Congress of Tianjin on 18 December 2006);
The Measures for the Administration of State-owned Assets Appraisal of Enterprises Supervised and Administrated by the SASAC of Tianjin (Jin Guo Zi [2018] No. 5);
The Detailed Rules for the Implementation of the Provisional Regulations on Valueadded Tax of the People’s Republic of China (Order No. 50 of the Ministry of Finance and State Administration of Taxation, and amended by Order No. 691 of the State Council);

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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).

(III) Basis of Valuation Standards

Basic Rules for Asset Appraisal (Cai Zi [2017] No. 43);
Professional Code of Ethics for Asset Valuation (Zhong Ping Xie [2017] No. 30);
Practice Guidelines for Asset Valuation – Asset Valuation Procedures (Zhong Ping Xie [2018] No. 36);
Practice Guidelines for Asset Valuation – Asset Valuation Report (Zhong Ping Xie [2018] No. 35);
Practice Guidelines for Asset Valuation – Asset Valuation Engagement Contract (Zhong Ping Xie [2017] No. 33);
Practice Guidelines for Asset Valuation – Machinery and Equipment (Zhong Ping Xie [2017] No. 39);
Practice Guidelines for Asset Valuation – Intangible Assets (Zhong Ping Xie [2017] No. 37);
Practice Guidelines for Asset Valuation – Real Estate (Zhong Ping Xie [2017] No. 38);
Practice Guidelines for Asset Valuation – Asset Valuation Files (Zhong Ping Xie [2018] No. 37);
Guidance on Valuation Report of State-owned Assets of Enterprises (Zhong Ping Xie [2017] No. 42);
Quality Control Guidance on the Business of Asset Valuation Agency (Zhong Ping Xie [2017] No. 46);
Guiding Opinions on Types of Value under Asset Valuation (Zhong Ping Xie [2017] No. 47);
Guiding Opinions on Legal Ownership of the Asset Valuation Target (Zhong Ping Xie [2017] No. 48);
Practice Guidelines for Asset Valuation – Asset Valuation Methodology (Zhong Ping Xie [2019] No. 35).

(IV) Ownership Basis

Real Estate Title Certificate;
Equipment purchase contract.

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(V) Pricing Basis

Project tender documents, final account information, acceptance certificates, change notices and others;
Assets list and declaration forms for assets appraisal provided by the enterprise;
Information recorded during the on-site inspection by the valuers;
Information on inquiries and references collected by the valuation agency;
Other information related to this valuation.

VII. VALUATION METHODOLOGY

(I) Selection of Valuation Methods

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

1. Buildings (structures)

There are three valuation methods mainly adopted for fixed assets under the buildings 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 more accurately predicted and quantified; 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.

As the appraised assets are storage facilities, on which sufficient information regarding market transaction cases and rental prices is not available in the same regional market, the income approach and market approach cannot be adopted for the valuation. In the course of checking-for-valuation, the enterprise provided relatively complete archival information on historical establishment, and thus, the cost approach was adopted in this valuation.

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

Basic calculation formula: the appraised value = full replacement cost × residue ratio

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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

The full replacement cost of the representative buildings of the appraised buildings in this valuation is determined by using budgets (final accounts) adjustment method. The per unit full replacement cost of other buildings is determined by using analogy method.

The ideology of the budgets (final accounts) adjustment method used in determining the full replacement cost is to calculate the estimated base price for direct fee and the construction and installation project costs of each project based on the budgets and final accounts related information on the buildings and the quota standard of the place where the buildings are located as provided by the enterprise, and the quantity of work stipulated in the budgets and final accounts of the buildings. Then, based on the market survey and the standards for preliminary expenses and other expenses of construction work as provided by the client, the preliminary expenses and other expenses of the buildings can be calculated, and added with the capital costs, the full replacement cost of the appraised buildings could be figured out.

The analogy method takes a representative building as a reference and makes comparison with similar buildings in terms of eaves height, storey height, span, materials used, fixtures, and etc., to identify differences as adjustment factors, and adjustments are made to calculate the per unit full replacement cost of the analogical buildings.

Construction and installation project costs, comprised of the total price for civil (decoration) works and installation works, are calculated using the budgets (final accounts) adjustment method. Based on the quantity of construction works determined according to the construction work information as well as the completion settlement-oriented audit report and completion settlement information published by the Engineering Cost Consultation Centre of China Construction Bank Corporation, Tianjin Branch, we calculated the total cost of the construction project by applying the prevailing “Tianjin Construction Work Pricing Method (Jin Zhu Jian Shi Han (2020) No. 30” and “Tianjin Construction Project Budget Base Price (2020)”, and by utilising “Tianjin Engineering Cost Information” (the prices published in August 2020).

B. Preliminary expenses and other expenses

Preliminary and other expenses include the construction expenses required and charged by local governments and other expenses incurred by the construction entity for the construction project, excluding the construction and installation costs.

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C. Capital costs

Capital costs are calculated based on the prevailing loan interest rate during the construction period as published by the People’s Bank of China on the valuation reference date. All investment funds are assumed to be injected evenly during the construction period.

Capital costs = (Construction and installation project costs (tax inclusive) + Preliminary expenses and other expenses of the construction project (tax inclusive)) × loan interest rate × reasonable construction period ÷ 2

2. Determination of residue ratio

The useful life method and on-site investigation method are mainly used 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 the useful life method =	Remaininguseful life ×100% 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 be normally not less than 30%;
b. If the residue ratios calculated under the on-site investigation method and the useful life method respectively differ 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.

2. Fixed assets under equipment 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 onsite 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.

Determination of full replacement costs
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 function, 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.

B. Determination of major price determination 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.

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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, 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

Upon verification, the equipment involves preliminary and other expenses, so preliminary and other expenses need to be considered.

e. Capital costs

Upon verification, the equipment is included in the whole project, therefore, capital costs need to be considered.

Determination of the residue ratio
For machinery and equipment, the observation method and the useful life method are mainly used to determine the residue ratio. The calculation formula is as follows:

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

Residue ratio under Remaining useful life the useful life method[=] Remaining useful life + Used life

×100%

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

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 significantly, the relatively reasonable one of the two may be selected based on experience and judgment after analysing related reasons. For the equipment which can be used normally, its residue ratio would be normally not less than 15%.

3. Intangible Assets – land use rights

After conducting a detailed analysis of 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 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’ onsite 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:

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.

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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.

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+ΣK)±K4

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

ΣK – sum of correction coefficients related to regional factors and individual factors that have an impact on land premium

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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 client, 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 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 as well as the Practice Guidelines for Asset Valuation. Select the corresponding formula and parameters in analysis, calculation and judgment 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 arrived at 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 internal review on the preliminary asset valuation report in accordance with 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 client and other relevant parties.

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IX. VALUATION ASSUMPTIONS

Major asset valuation assumptions used in this Valuation Report include:

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 make estimation in a simulated market according to the transaction conditions (among others) of assets to be appraised.
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 judgment of both independent trading parties over the value of assets under certain supply and demand conditions. An open market refers to a market which is highly competitive with various buyers and sellers, who are on equal footing and have opportunity and time to access adequate market information, and a market where transactions between buyers and sellers are conducted under voluntary, rational, non-compelled or unrestricted conditions.
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.

According to the requirements of the asset valuation, these assumptions are deemed to be established on the valuation reference date. We will not accept any responsibility for any different valuation conclusions resulting from any changes in these assumptions when the economic environment changes significantly in the future.

X. VALUATION CONCLUSION

(I) Valuation Results

On the valuation reference date, being 31 August 2020, the net book value of the assets proposed to be included in the transfer scope by Tianjin Port International Logistics Development Co., Ltd. is RMB155,362,000, and upon the valuation, the net appraised value of the assets proposed to be transferred is RMB238,624,100. The valuation of the assets represents an increase of RMB83,262,100 and an appreciation rate of 53.59% as compared to the carrying amount. Details of the valuation results are set out in the below table:

Asset Valuation Results Summary Table

Valuation reference date: 31 August 2020

Owner of property rights: Tianjin Port International Logistics Development Co., Ltd.

Unit: RMB’0,000

Items	Items	Book value	Appraised value	Appreciation or depreciation	Appreciation rate
		A	B	C=B-A	D=C/A×100%
1	Non-current assets	15,536.20	23,862.41	8,326.21	53.59%
2	of which: fixed assets	8,602.79	13,161.47	4,558.68	52.99%
3	intangible assets	6,933.41	10,700.94	3,767.53	54.34%

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(II) Valuation Conclusion

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

XI. EXPLANATIONS TO SPECIAL MATTERS

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

Nil.

(II) Incomplete or Defective Ownership Information;

Among the assets declared by the enterprise, the fire pump room and the canteen have not applied for real estate title certificates. This valuation is based on the area declared by the enterprise which has been confirmed after the verification of on-site inspection. The construction cost of the canteen has been included in the depot. This valuation has not taken into consideration the impact of the lack of real estate title certificates.

(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 the Asset Valuation that May Have a Material Effect on the Valuation Conclusion;

Nil.

– 56 –

PRC VALUATION REPORT ON THE TARGET ASSETS

APPENDIX II

(IX) Special Matters.

The appraised value of this valuation excludes the value-added tax.
This valuation has not taken into consideration the impact of relevant taxes in the process of property rights transactions on the appraised value. It is understood that the transfer of assets by Tianjin Port International Logistics Development Co., Ltd. may involve the payment of land value-added tax. This valuation has not taken into consideration the taxes required for the final settlement of the land value-added tax.
The land appraised value is deed tax-exclusive, and this valuation has not taken into consideration the impact of deed tax.

XII. RESTRICTIONS ON THE USE OF THE VALUATION REPORT

(I) For the scope of the use of this Valuation Report, it shall be used only for the valuation purpose and use set out in this Valuation Report;
(II) The asset valuation agency and its asset valuers take no responsibility if the client 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 client, the other users of this Asset Valuation Report as agreed in the Asset Valuation Engagement Contract and the users of this Asset Valuation Report as stipulated in the laws and administrative regulations, other institution and individual shall not be the user 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 19 November 2020.

Asset Valuer: Wu Xiaoxia Asset Valuer 11160070

Asset Valuer: Wu Wangbin Asset Valuer 11000546

19 November 2020

– 57 –

PRC VALUATION REPORT ON THE TARGET ASSETS

APPENDIX II

Annexes

I. Economic Activity Document Corresponding to the Purpose of Valuation
II. Legal Person Business Licenses of the Client and the Owner of Property Rights
III. Enterprise Property Rights Registration Form of the Client and the Owner of Property Rights
IV. Major Ownership Proof Materials of the Valuation Target Involved
V. Letters of Undertaking of the Client and the Owner of Property Rights
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

– 58 –

PRC VALUATION REPORT ON THE TARGET ASSETS

APPENDIX II

Letter of Undertaking from the Asset Valuers

To: Tianjin Port International Logistics Development Co., Ltd.

Upon your engagement, we have conducted a valuation on the assets of the Project of Phase I of Tianjin Port Container Logistics Centre Depot, which is involved in your proposed transfer of the assets of the Project of Phase I of Tianjin Port Container Logistics Centre Depot held by you, using 31 August 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: Asset Valuer Wu Xiaoxia 11160070

Asset Valuer Wu Wangbin 11000546

19 November 2020

– 59 –

GENERAL INFORMATION

APPENDIX III

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 the
Name of Director	Capacity	Nature of interest	Shares held	Company
Japhet Sebastian Law	Beneficial owner	Interest held jointly	2,700,000	0.04%
		with 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:

– 60 –

GENERAL INFORMATION

APPENDIX III

	Number of
	share options	Exercise	Grant	Exercisable	Exercisable
Name of Director	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 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
	(Tianjin Tsinlien Investment
	Holdings Co., Ltd.*)
	Tsinlien Group Company Limited	director
	Tianjin Development Holdings	assistant to general manager
	Limited
	Leadport Holdings Limited	director

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).

– 61 –

GENERAL INFORMATION

APPENDIX III

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 2019, 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 ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2019, being the date to which the latest published audited consolidated financial statements of the Company were made up.

7. EXPERTS

The following is the qualification of the experts who have given opinion or advice which are contained in this circular:

Name

Qualification

Red Sun Capital Limited A corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO

Roma Appraisals Limited Independent Hong Kong property valuer

Grandall Law Firm (Tianjin) PRC legal adviser

中通誠資產評估有限公司 (China Tong Cheng Assets Appraisal Co., Ltd.*)

Independent PRC asset valuer

– 62 –

GENERAL INFORMATION

APPENDIX III

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 2019, 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, report and/or opinion (as the case may be) and reference to its name in the form and context in which they appear.

The letter and/or report given by each of Red Sun Capital, Roma and China Tong Cheng is given as of the date of this circular for incorporation herein.

8. 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 Assets Transfer Agreement;
(b) the letter from the Independent Board Committee, the text of which is set out on page 12 of this circular;
(c) the letter from Red Sun Capital, the text of which is set out on pages 13 to 26 of this circular;
(d) the HK Valuation Report, the text of which is set out in Appendix I to this circular;
(e) the PRC Valuation Report, the text of which is set out in Appendix II to this circular; and
(f) the consent letters of each of the experts referred to in the section headed “Experts” of this appendix.

For identification purposes only

– 63 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [315 x 34] 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 Forum Room I, Basement 2, Regal Hongkong Hotel, No. 88 Yee Wo Street, Causeway Bay, Hong Kong on Wednesday, 3 March 2021 at 3:00 p.m. for the purposes of considering and, if thought fit, passing, with or without modification, the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

1. “ THAT

the Assets Transfer Agreement and the Acquisition, all as defined and described in the circular of the Company dated 29 January 2021, and all other transactions in connection therewith 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 Assets Transfer Agreement, the Acquisition and all other transactions thereby contemplated as they may in their discretion consider to be desirable and in the interests of the Company.”

2. “ THAT

Xue Xiaoli be re-elected as an executive director of the Company.”

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

Hong Kong, 29 January 2021

Notes:

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.
Where there are 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 was 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.

– 64 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

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).
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 (as the case may be) should he/she so wish, and in such event, the form of proxy shall be deemed to be revoked.
The register of members of the Company will be closed from Friday, 26 February 2021 to Wednesday, 3 March 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 Thursday, 25 February 2021.
The resolutions set out in this notice will be decided by poll at the EGM.

7. 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 resolutions 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; Professor Japhet Sebastian Law, Mr. Cheng Chi Pang, Leslie and Mr. Zhang Weidong as independent non-executive directors.

– 65 –

AI assistant

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

50831_rns_2021-01-28_e1e123cf-625c-45cc-ac4c-3d17266a4649.pdf

DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE TARGET ASSETS, RE-ELECTION OF DIRECTOR AND NOTICE OF EXTRAORDINARY GENERAL MEETING

PRECAUTIONARY MEASURES FOR THE EGM

DEFINITIONS

DEFINITIONS

DEFINITIONS

DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE TARGET ASSETS, RE-ELECTION OF DIRECTOR AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

DISCLOSEABLE AND CONNECTED TRANSACTION

1. Principal Terms of the Assets Transfer Agreement

2. Information on the Target Assets

3. Reasons for and Benefits of the Acquisition

4. Information on the Parties

5. Listing Rules Implications

RE-ELECTION OF DIRECTOR

LETTER FROM THE BOARD

EXTRAORDINARY GENERAL MEETING

LETTER FROM THE BOARD

RECOMMENDATIONS

DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE TARGET ASSETS

Japhet Sebastian LAW

CHENG Chi Pang, Leslie

ZHANG Weidong

DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE TARGET ASSETS

I. INTRODUCTION

II. THE INDEPENDENT BOARD COMMITTEE

III. OUR INDEPENDENCE

IV. BASIS OF OUR ADVICE

V. PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Information of the Group

1.1 Background of the Group

1.2 Financial information of the Group

2. Information on the Target Assets

3. Overview of the economy in the PRC and the port of Tianjin

4. Reasons for and benefits of the Acquisition

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

5. Principal terms of the Assets Transfer Agreement

Date

Parties

Assets to be acquired

Consideration

Effectiveness of the Assets Transfer Agreement

Completion Date

6. Our analysis on the Acquisition and the Assets Transfer Agreement

6.1 Analysis on the Acquisition

6.2 Analysis on the consideration

7. Financial impact of the Acquisition

VI. OPINION AND RECOMMENDATION