Mingfa Group (International) Company Limited 明發集團（國際）有限公司

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 Mingfa Group (International) Company Limited,you should at once hand this circular 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.

Mingfa Group (International) Company Limited 明發集團（國際）有限公司 (incorporated in the Cayman Islands with limited liability) (Stock Code: 846)

MAJOR AND CONNECTED TRANSACTION — EQUITY TRANSFER AND COOPERATION AGREEMENT

24 August 2019 CONTENT

DEFINITIONS ...... 1

LETTER FROM THE BOARD ...... 5

APPENDIX I — FINANCIAL INFORMATION OF THE GROUP ...... I-1

APPENDIX II — PROPERTY VALUATION REPORT ...... II-1

APPENDIX III — GENERAL INFORMATION ...... III-1

–i– DEFINITIONS

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

‘‘Board’’ the board of Directors

‘‘Company’’ Mingfa Group (International) Company Limited (明發集團（國際）有限公司), a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange

‘‘connected person’’ has the meaning prescribed under the Listing Rules

‘‘Consideration’’ the aggregate consideration of RMB2,792,411,500 payable by the Purchaser to the Seller under the Equity Transfer and Cooperation Agreement

‘‘Development and development and construction costs of no less than Construction Costs’’ RMB4,274,813,500 in respect of the development of the Project Sites for which the Seller has agreed to provide valid and legal invoices under the Equity Transfer and Cooperation Agreement

‘‘Directors’’ the directors of the Company

‘‘Equity Transfer’’ thepurchasefromthe Company by the Purchaser of 51% interest in the Target Company subject to the terms and conditions of the Equity Transfer and Cooperation Agreement

‘‘Equity Transfer and the equity transfer and development cooperation agreement Cooperation dated 4 April 2019 entered into among the Company, Mingfa Agreement’’ Nanjing, the Purchaser, the Target Company, the Intermediate Companies and the Project Companies

‘‘Group’’ the Company and its subsidiaries

‘‘HK$’’ Hong Kong dollar(s), the lawful currency of Hong Kong

‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the People’s Republic of China

‘‘Intermediate collectively, Intermediate Company 1 and Intermediate Companies’’ Company 2

‘‘Intermediate Winning Orient Construction Group (Hong Kong) Limited (東勝 Company 1’’ 建設集團（香港）有限公司), a company incorporated in Hong Kong with limited liability and an indirect wholly-owned subsidiary of the Company

–1– DEFINITIONS

‘‘Intermediate Maanshan Ming Hua Industrial Co., Ltd.* (馬鞍山明華置業有限 Company 2’’ 公司), a company established under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company

‘‘Latest Practicable 21 August 2019, being the latest practicable date prior to the Date’’ printing of this circular for the purpose of ascertaining certain information for inclusion in this circular

‘‘Listing Rules’’ the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

‘‘Mingfa Nanjing’’ Mingfa Group Nanjing Real Estate Development Co., Ltd.* (明發集團南京房地產開發有限公司), a company established under the laws of the PRC with limited liability and an indirect wholly- owned subsidiary of the Company

‘‘PRC’’ the People’s Republic of China, excluding, for the purpose of this circular, Hong Kong, the Macao Special Administrative Region of the People’s Republic of China and Taiwan

‘‘Project Companies’’ collectively, Project Company 1, Project Company 2, Project Company 3, Project Company 4, Project Company 5 and Project Company 6

‘‘Project Company 1’’ Maanshan Ming Zhao Industrial Co., Ltd.* (馬鞍山明昭實業有限公司), a company established under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company as at the Latest Practicable Date

‘‘Project Company 2’’ Maanshan Mingzhang Industrial Co., Ltd.* (馬鞍山明章實業有限公司), a company established under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company as at the Latest Practicable Date

‘‘Project Company 3’’ Maanshan Ming Nan Industrial Co., Ltd.* (馬鞍山明楠實業有限公司), a company established under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company as at the Latest Practicable Date

‘‘Project Company 4’’ Maanshan Ming Shu Industrial Co., Ltd.* (馬鞍山明樹實業有限公司), a company established under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company as at the Latest Practicable Date

‘‘Project Company 5’’ Maanshan Ming Kun Industrial Co., Ltd.* (馬鞍山明坤實業有限公司), a company established under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company as at the Latest Practicable Date

–2– DEFINITIONS

‘‘Project Company 6’’ Maanshan Ming Lin Industrial Co., Ltd.* (馬鞍山明林實業有限公司), a company established under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company as at the Latest Practicable Date

‘‘Project Sites’’ the parcels of land held by the Project Companies, brief details of which are set out in the section headed ‘‘Information on the Target Company and the Project Companies — Information on the Project Sites’’ in the ‘‘Letter from the Board’’ in this circular

‘‘Purchaser’’ Up Chance Holdings Limited, a company incorporated in the BritishVirginIslandsandanindirect wholly-owned subsidiary of Shimao

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

‘‘Seller’’ collectively, the Company and Mingfa Nanjing

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

‘‘Shareholders’’ holders of the Shares

‘‘Shares’’ ordinary shares of a par value of HK$0.10 each in the capital of the Company

‘‘Shimao’’ Shimao Property Holdings Limited, a company incorporated in the Cayman Islands and the shares of which are listed on the Stock Exchange (stock code: 813)

‘‘Shimao Group’’ Shimao and its subsidiaries

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

‘‘substantial has the meaning prescribed under the Listing Rules shareholder’’

‘‘Target Company’’ Winning Orient Limited (東勝有限公司), a company incorporated in the British Virgin Islands

‘‘Transfer Date’’ the date on which the seals, certificates, agreements and on-site management are transferred to the Purchaser, which shall be the date of registration of the transfer of the 51% equity interest in the Target Company to the Purchaser and obtaining of new business registration license

‘‘US$’’ United States dollar(s), the lawful currency of the United States of America

–3– DEFINITIONS

‘‘%’’ per cent

* For identification purpose only

–4– LETTER FROM THE BOARD

Mingfa Group (International) Company Limited 明發集團（國際）有限公司 (incorporated in the Cayman Islands with limited liability) (Stock Code: 846)

Executive Directors: Registered office: Mr. Huang Qingzhu P.O. Box 31119 Mr. Huang Lianchun Grand Pavilion, Hibiscus Way Mr. Huang Li Shui 802 West Bay Road Mr. Liu Yuwei Grand Cayman, KY1-1205 Cayman Islands Non-Executive Director: Mr. Wong Wun Ming (Chairman) Head office in the PRC: Jiangsu Mingfa Business Park Independent Non-Executive Directors: No. 88 Pudong North Road Mr. Lau Kin Hon Pukou, Nanjing City Mr. Chu Kin Wang Peleus Jiangsu Province, PRC Dr.Lam,LeeG. Mr. Chan Sing Lai Principal place of business in Hong Kong: Units 6–8, 23/F., Greenfield Tower Concordia Plaza 1 Science Museum Road Tsim Sha Tsui Kowloon, Hong Kong

24 August 2019

To Shareholders

Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTION EQUITY TRANSFER AND COOPERATION AGREEMENT

1. INTRODUCTION

Reference is made to the announcement of the Company dated 4 April 2019 in relation to the Equity Transfer and Cooperation Agreement.

–5– LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things, (i) further details of the Equity Transfer; (ii) the financial information of the Group; and (iii) the valuation report on the property interests held by the Project Companies.

2. EQUITY TRANSFER AND COOPERATION AGREEMENT

The principal terms of the Equity Transfer and Cooperation Agreement are set forth below:

Date: 4 April 2019

Parties:

(a) the Company;

(b) Mingfa Nanjing;

(d) the Target Company;

(e) the Intermediate Companies; and

(f) the Project Companies

Subject Matter

Pursuant to the Equity Transfer and Cooperation Agreement, the Purchaser agreed to purchase from the Company its 51% equity interest in the Target Company for the consideration of RMB2,792,411,500 (equivalent to HK$3,261,536,632) in accordance with the terms and subject to the conditions of the Equity Transfer and Cooperation Agreement.

Upon completion of the Equity Transfer, the Company, Mingfa Nanjing and the Purchaser shall cooperate to develop the Project Sites.

Consideration and payment

The aggregate consideration of RMB2,792,411,500 payable by the Purchaser shall be satisfied in the following manner:

(a) Within three days of the signing of the Equity Transfer and Cooperation Agreement and subject to the satisfaction of certain conditions in relation to the approval of the cooperation plan between the Purchaser and the Seller and provision of guarantee for obligations of the Seller under the Equity Transfer and Cooperation Agreement by Mingfa Nanjing (an indirect wholly-owned subsidiary of the Company), the Purchaser shall pay to the Seller 20% of the Consideration, i.e. RMB558,482,300 (the ‘‘First Instalment’’).

–6– LETTER FROM THE BOARD

50% of the abovementioned First Instalment, which will be translated into HK$ or US$ at the central parity rate of the People’s Bank of China on the date of payment, shall be paid by the Purchaser to the Company in Hong Kong in HK$ or US$; and the remaining 50% shall be paid to the Project Companies by way of borrowings through a related company of the Purchaser. The Project Companies shall transfer the amount to the company designated by the Seller within one working day after the receipt of the amount for the payment of primary construction and development costs of auxiliary facilities or other development and construction expenses of the property project of the Project Companies borne by the Seller. If the abovementioned foreign currency payment is not made on time due to objective factors, the Seller agreed to receive onshore payment in RMB from the Purchaser instead.

As at the date of the Equity Transfer and Cooperation Agreement, shareholders’ loans in the amount of RMB1,200,500,000 was owed by the Project Companies to the Seller. The parties shall cooperate to use the First Instalment to replace 51% of the total loan amount of the aforementioned shareholder’s loans.

(b) Within 30 days of the signing of the Equity Transfer and Cooperation Agreement and subject to the completion by the Seller of the business registration of the transfer of 51% equity interest in the Target Company to the Purchaser, the Purchaser shall pay to the Seller 30% of the Consideration, i.e. RMB837,723,500 (the ‘‘Second Instalment’’).

50% of the abovementioned Second Instalment, which will be translated into HK$ or US$ at the central parity rate of the People’s Bank of China on the date of payment, shall be paid by the Purchaser to the Company in Hong Kong in HK$ or US$; and the remaining 50% shall be paid to the Project Companies by way of borrowings through a related company of the Purchaser. The Project Companies shall transfer the amount to the company designated by the Seller within one working day after the receipt of the amount for the payment of primary construction and development costs of auxiliary facilities or other development and construction expenses of the property project of the Project Companies borne by the Seller.

As at the Latest Practicable Date, the First Instalment and the Second Instalment had been paid by the Purchaser.

(c) Within six months of the signing of the Equity Transfer and Cooperation Agreement and subject to the satisfaction of the following conditions, the Purchaser shall pay to the Seller 50% of the Consideration, i.e. RMB1,396,205,800 (the ‘‘Remaining Instalment’’):

(i) the Seller and the Purchaser has commenced the development and operation of the Project Sites based on the purpose of the cooperation, and none of the major problems, such as restrictions or claims by

–7– LETTER FROM THE BOARD

government regulatory authorities or planning restrictions of the projects, disclosed or undisclosed by the Seller under the Equity Transfer and Cooperation Agreement, has occurred which resulted in the obstruction of the development of the projects or material economic burden or loss; and

(ii) the schedule for the development of the Project Sites, schedule plan, arrangement for payment and collection of tax receipt in relation to construction of auxiliary facilities beyond the boundary lines of the Project Sites under the land grant contracts and the grant announcements within or outside the scope of cooperation have been approved by the board resolutions of the Project Companies and have not been withheld or restricted by government regulatory authorities.

50% of the abovementioned Remaining Instalment, which will be translated into HK$ or US$ at the central parity rate of the People’s Bank of China on the date of payment, shall be paid by the Purchaser to the Company in Hong Kong in HK$ or US$; and the remaining 50% shall be paid to the Project Companies by way of borrowings through a related company of the Purchaser. The Project Companies shall transfer the amount to the company designated by the Seller within one working day after the receipt of the amount by the Project Companies for the payment of primary construction and development costs of auxiliary facilities or other development and construction expenses beyond the boundary lines of the land parcels of the Project Companies borne by the Seller.

Within 30 days after the date of receipt of the First Instalment by the Seller in accordance with the Equity Transfer and Cooperation Agreement, Mingfa Nanjing shall transfer 100% equity interest in each of the Project Companies to Intermediate Company2(the‘‘Reorganisation’’).

The Consideration payable by the Purchaser under the Equity Transfer and Cooperation Agreement of RMB2,792,411,500 was arrived at after arm’s length negotiations between the parties, based on the percentage of equity interest in the Target Company to be transferred (being 51%) multiplied by the estimated consideration for the cooperation in the development of the Project Sites (合作價款). The estimated cooperation consideration was determined to be RMB5,475,316,725, equivalent to the gross floor area of the Project Sites (being 1,888,040.25 sq.m., which was determined based on the aggregate of the plot ratio multiplied by the total area of the land parcels held by the Project Companies), multiplied by RMB2,900 per sq.m.. The estimated cooperation consideration was determined after arm’s length negotiations between the parties primarily with reference to (i) the amount of the payment of the land-use rights, land tax and other preliminary expenses and construction costs incurred and contributed by the Seller in respect of the Project Sites (being approximately RMB1,154,330,000); (ii) the settlement costs for the employees and personnel of the Project Companies and other estimated development and construction costs to be incurred for the Project Sites to be developed into the

–8– LETTER FROM THE BOARD presales stage (being approximately RMB4,274,813,500); and (iii) the existing debt and liabilities of the Project Companies as at the date of the Equity Transfer and Cooperation Agreement, mainly comprising inter-company loans, the amount of which is insignificant.

As disclosed in the section headed ‘‘Financial Effects of the Equity Transfer’’ in this circular, the Company intends to use the net proceeds from the Equity Transfer to fund the future construction costs of the Project Companies in respect of the development of the Project Sites. Hence, the Consideration payable by the Seller under the Equity Transfer and Cooperation Agreement can be considered as upfront financing for the development of the Project Sites. Based on the above and the terms of the cooperation as set out in the Equity Transfer and Cooperation Agreement and after arm’s length negotiations, the Company did not consider that any control premium in relation to the Equity Transfer is necessary.

The Consideration shall be adjusted in the event of any adjustment to the gross floor area of the Project Sites.

The payment schedule was determined after arm’s length negotiations between the parties, which are fair and reasonable and in the interests of the Company taking into account the following factors:

(i) The Group and Shimao Group, which is one of the largest property developers in the PRC, have a long history of cooperation and a long-term and stable business relationship.

(ii) The Group is confident of the ability of the Purchaser (the holding company of which is Shimao, a listed company on the Stock Exchange with good credit-worthiness and reputation) to duly perform its obligations under the Equity Transfer and Cooperation Agreement, including but not limited to the payment obligations.

(iii) The payment and completion arrangements would allow the parties to complete the transfer of the 51% equity interest in the Target Company as soon as practicable after the signing of the Equity Transfer and Cooperation Agreement, thereby allowing the cooperation as contemplated under the Equity Transfer and Cooperation Agreement to proceed.

(iv) In the unlikely event of the breach of the payment obligations by the Purchaser, the Seller can enforce their rights under the Equity Transfer and Cooperation Agreement pursuant to applicable PRC laws to safeguard the interests of the Company and the Shareholders.

–9– LETTER FROM THE BOARD

(v) As at the Latest Practicable Date, certain construction and development work had already commenced in respect of the Project Sites without major problems. Therefore, the Group is confident that the Remaining Instalment would be settled by the Purchaser within six months of the Equity Transfer and Cooperation Agreement in accordance with the payment schedule thereof.

The Seller shall provide valid and legal invoice in the amount of no less than RMB4,274,813,500 for expenses validly incurred in respect of the Project Sites (including demolition and re-location costs and compensation) and invoice of no less than RMB1,200,500,000 for the payment for the transfer of land-use rights, land tax and other preliminary expenses of the Project Companies validly incurred.

The amount of RMB4,274,813,500 were arrived at after arm’s length negotiations between the parties, based on the estimated development and construction costs required to be incurred for the Project Sites to be developed to the stage where presales of properties can commence, upon which the Project Companies can generate sufficient sales proceeds for financing its remaining development and construction costs to complete the projects.

The Development and Construction Costs are expected to comprise the costs for the foundation of the buildings, construction work to be contracted to third parties, as well as construction work to be sub-contracted to third parties in respect of the Project Sites.

The Development and Construction Costs had not been incurred as at the Latest Practicable Date. It is estimated that such costs will be incurred by the Project Companies within five to seven years from the date of the Equity Transfer and Cooperation Agreement.

As at the date of the Equity Transfer and Cooperation Agreement, the payment for the transfer of the land-use rights, land tax and other preliminary expenses of the Project Companies of no less than RMB1,200,500,000 had been made by the Seller. Pursuant to the above provision of the Equity Transfer and Cooperation Agreement, the Seller would be obliged to contribute an additional RMB4,274,813,500 to the development and construction costs of the Project Sites. If the Seller is unable to provide the valid invoices or such invoices cannot be used for the set-off of tax payable by the Project Companies, the Seller shall be liable for the losses in tax liability incurred by the Project Companies and the Purchaser.

The roles of the Seller and the Purchaser

The Seller and the Purchaser shall cooperate to develop the Project Sites upon the transfer of the 51% equity interests of the Target Company to the Purchaser.

TheSellerandthePurchasershallbeentitled to shareholders’ rights and be liable for shareholders’ liabilities in accordance with their proportion of shareholding interest in the Target Company.

–10– LETTER FROM THE BOARD

The Seller is responsible for, amongst other things:

(i) terminating the employment relationship between the non-retained staff (as determined after negotiations between the parties to the Equity Transfer and Cooperation Agreement) and the Target Company, the Intermediate Companies and the Project Companies and their respective compensation;

(ii) ensuring that the land transfer fee and property tax invoices in respect of the Project Sites are obtainable and approved by the county tax bureau as tax- deductible costs of the Project Companies; otherwise, the Seller shall be liable for any resulting loss caused to the Project Companies and the Purchaser;

(iii) the liabilities of the Project Companies, the Intermediate Companies and the Target Company prior to the Transfer Date or those which arose due to events or matters in existence prior to the Transfer Date; and

(iv) the Company shall be responsible for the demolition and relocation costs of the Project Sites, which shall be recorded as expenses of the Project Companies.

No demolition and relocation costs are expected to be required as the Project Sites had been cleared for development as at the date of the Equity Transfer and Cooperation Agreement.

The Purchaser is responsible for, amongst other things:

(i) appointing a team to take full control of the management of the Project Companies and the Project Sites;

(ii) appointing the general manager of the Project Companies, who shall be responsible for the appointment of management personnel; and

(iii) appointing a financial manager of the Project Companies and be fully responsible for the financial matters of the project.

Without the consent of the other shareholders and unless otherwise provided for in the Equity Transfer and Cooperation Agreement, each shareholder shall not transfer or pledge any of its equity interest in the Target Company, the Intermediate Companies and the Project Companies to any third party, other than pursuant to employee investment schemes.

Pursuant to the Equity Transfer and Cooperation Agreement, Shimao will become the majority shareholder of the Project Companies, whereas the Company will become the minority shareholder. The Project Companies will become subsidiaries of Shimao. Shimao will take primary responsibility for the management and operation of the Project Companies as the majority shareholder. The Company considers that the abovementioned respective roles and responsibilities of the Company and the

–11– LETTER FROM THE BOARD

Purchaser under the Equity Transfer and Cooperation Agreement are conducive to an efficient management and operation of the Project Sites, which will bring about benefits to both parties.

Sharing of revenue and costs

After deduction of development and operation costs and expenses from revenue in accordance with the financial management policies and the terms of the Equity Transfer and Cooperation Agreement, 49% of the profits from the operation of the projects shall be distributed to the Seller and 51% of the profits shall be distributed to the Purchaser. Each party shall bear its own taxes and fees arising from the profits distributed from the Project Companies.

The Company expects that distributable profit can only be generated when the Project Companies deliver properties to the buyers and the sales are recognized.

Management fees not exceeding 1.5% of total sales (including tax), and marketing expenses not exceeding 2.5% of the total sales (including tax) are expected to be payable by the Project Companies to third parties who provide management and marketing services. The parties have agreed that the Purchaser shall be liable to bear any excess in such fees and expenses and is entitled to collect any surplus thereof, which are payable or receivable on a quarterly basis.

Should further funding be required in the process of the construction and development of the Project Sites, according to the Equity Transfer and Cooperation Agreement, the Project Companies will first seek to obtain internal financing such as pre-sale proceeds and loan financing. If such financial resources are insufficient to satisfy the Project Companies’ funding requirements, the parties shall provide additional shareholder’s loan according to their respective shareholding interest in the Project Companies. The Company considers such funding arrangements to be fair and reasonable and in line with common industry practice.

Rightoftermination

The Seller has the right to terminate the Equity Transfer and Cooperation Agreement if the Purchaser delays payment to the Seller for over 30 days and the overdue amount exceeds 20% of the Consideration payable by the Purchaser under the Equity Transfer and Cooperation Agreement, and request the payment of 10% of the Consideration by the Purchaser as compensation.

The Purchaser has the right to terminate the Equity Transfer and Cooperation Agreement upon the occurrence of any of the following events:

(i) The Seller is responsible for handling any restrictions on above-ground and underground development of the Project Sites arising before the Transfer Date or caused by reasons arising before the Transfer Date. If construction cannot be properly carried out on the Project Sites (particularly on undemolished land) as a result, which creates significant impediments to

–12– LETTER FROM THE BOARD

the normal progress of construction which fail to be resolved within six months, the Purchaser shall have the right to terminate the Equity Transfer and Cooperation Agreement.

(ii) If the method of cooperation under the Equity Transfer and Cooperation Agreement violates the relevant agreements entered into between the local government of He County or the Land and Resources Bureau (國土資源局), or the prohibitions or restrictions under the Contract for State-Owned Construction Land Use Right Assignment (國有建設用地使用權出讓合同) and its amendment agreement with the He County Land and Resources Bureau (和縣國土資源局), thereby creating impediments to the development of the Project Sites which fail to be resolved by the Seller within 90 days, the Purchaser has the right to terminate the Equity Transfer and Cooperation Agreement.

(iii) If the Seller fails to complete the equity transfer of the Target Company in accordance with the conditions stipulated in the Equity Transfer and Cooperation Agreement, and the overdue period exceeds 30 days, the Purchaser has the right to terminate the Equity Transfer and Cooperation Agreement and demands the payment of 10% of the Consideration by the Seller as compensation.

Either party may terminate the Equity Transfer and Cooperation Agreement upon the occurrence of any of the following events:

(i) If any party fails to perform its obligations in accordance with the Equity Transfer and Cooperation Agreement, which seriously affects the normal development of the Project Sites and cannot to be resolved within 90 days after the other party’s written notice, the other party has the right to rescind the Equity Transfer and Cooperation Agreement.

(ii) If any party breaches the Equity Transfer and Cooperation Agreement, the defaulting party is liable to take active measures to perform its obligations and remove any obstacles. If, in addition to causing losses, such breach renders the cooperation objective unrealizable, the other party has the right to terminate the Equity Transfer and Cooperation Agreement.

The Company considers the respective termination rights to be fair and reasonable.

Completion

The parties shall proceed with the procedures in respect of the business registration of the transfer of the equity interest within 30 days of the signing of the Equity Transfer and Cooperation Agreement. Upon signing, the Company shall hand over to the Purchaser all the documents that are required for the business registration of the transfer of the 51% equity interest and the Purchaser shall submit such documents for the registration of transfer.

–13– LETTER FROM THE BOARD

Board of directors

The board of directors of each of the Project Companies shall comprise three directors, of which the Seller shall appoint one, and the Purchaser shall appoint two. The chairman of the board shall be appointed by the Seller, and the general manager and the legal representative shall be appointed by the Purchaser.

Based on the terms of the Equity Transfer and Cooperation Agreement as stipulated above, the Company considered it is fair and reasonable and in the interests of the Group as a whole.

3. FINANCIAL EFFECTS OF THE EQUITY TRANSFER

Upon completion of the Equity Transfer and the Reorganisation, the Company and the Purchaser will hold 49% and 51% of the issued share capital of the Target Company, respectively, and each of the Target Company, the Intermediate Companies and the Project Companies will cease to be a subsidiary of the Company and the accounts of which will no longer be consolidated with those of the Group.

It is estimated that the Group will not realize any net gain or loss upon completion of the Equity Transfer under the Equity Transfer and Cooperation Agreement after deducting from the Consideration the relevant book value of the Target Company and the Project Companies as at 28 February 2019 and related costs and expenses of the Equity Transfer, and the additional capital commitment by the Group under the Equity Transfer and Cooperation Agreement.

The Company intends to use the net proceeds from the Equity Transfer for its general working capital, namely, the payment of construction costs of the Project Companies in respect of the development of the Project Sites.

4. INFORMATION ON THE GROUP

The Company is one of the leading developers of integrated mixed-use commercial complexes and large-scale mixed-use residential properties in the PRC. The Group also develops hotels and industrial properties such as logistics centres and research and development centres. Geographically, the Group focuses on affluent second and third tier cities in the PRC where it sees the potential for substantial economic growth, such as Xiamen and Zhangzhou in Fujian Province, Nanjing, Wuxi and Yangzhou in Jiangsu Province and Wujiang, Hefei and Jinzhai in Anhui Province. Over its 23 years of operation, the Group has established strong market positions in Fujian Province in the Western Straits Economic Zone and Jiangsu Province in the Greater Yangtze River Delta.

5. INFORMATION ON THE PURCHASER

The Purchaser is incorporated in the British Virgin Islands and is principally engaged in investment holding. It is an indirect wholly-owned subsidiary of Shimao.

–14– LETTER FROM THE BOARD

6. INFORMATION ON THE TARGET COMPANY AND THE PROJECT COMPANIES

The Target Company is incorporated in the British Virgin Islands and is principally engaged in investment holding.

Each of the Project Companies is established in the PRC and is principally engaged in property development. As at the Latest Practicable Date, each of the Project Companies is an indirect wholly-owned subsidiary of the Company.

Set forth below are the simplified structure charts of the Target Company and the Project Companies prior to and upon completion of the Equity Transfer and the Reorganisation under the Equity Transfer and Cooperation Agreement:

(a) Prior to the completion of the Equity Transfer and the Reorganisation:

The Company

100% 100%

Target Company Mingfa Nanjing

100% 100%

Intermediate Company 1 Project Companies

100%

Intermediate Company 2

–15– LETTER FROM THE BOARD

(b) Upon completion of the Equity Transfer and the Reorganisation:

The Company Purchaser 49% 51%

Target Company

100%

Intermediate Company 1

100%

Intermediate Company 2

100%

Project Companies

Financial information of the Target Company and the Project Companies

The Target Company was incorporated in June 2018, and each of the Project Companies was incorporated in December 2017. Set forth below are the unaudited financial information of the Target Company and the Project Companies prepared in accordance with Hong Kong Financial Reporting Standards:

Netprofitfrom 6 June 2018 (date of incorporation) to Net asset as at 31 December 2018 31 December 2018 RMB RMB

The Target Company 0 0

Net loss before and after taxation for the year ended Net liability as at 31 December 2018 31 December 2018 RMB RMB

Project Company 1 417,326 417,326 Project Company 2 135,437 135,437 Project Company 3 680,671 680,671 Project Company 4 1,060,434 1,060,434 Project Company 5 1,308,674 1,308,674 Project Company 6 932,950 932,950

–16– LETTER FROM THE BOARD

Information on the Project Sites

As at the Latest Practicable Date, the Project Companies had obtained the land- use rights in relation to the Project Sites located in Silianpian District, Wujiang Town, He County, Maanshan City, Anhui Province (安徽省馬鞍山市和縣烏江鎮四聯片區), of a total gross floor area of 1,888,040.25 square metres. The project is expected to comprise residential and commercial properties.

Set out below are the details of the Project SitesasattheLatestPracticableDate:

Project Company Lot No. Site Area Plot Ratio Land Use (m2)

Project Company 1 He Tu Chu[2017]23 40,860.38 3 Residential He Tu Chu[2017]24 30,220.08 3 Residential

Project Company 2 He Tu Chu[2017]44 22,491.00 3.5 Residential

Project Company 3 He Tu Chu[2017]39 14,068.05 3 Commercial services He Tu Chu[2017]37 41,961.07 2.9 Residential He Tu Chu[2017]36 44,338.37 2.9 Residential He Tu Chu[2017]40 14,577.80 3 Commercial services

Project Company 4 He Tu Chu[2017]26 64,100.13 3 Residential He Tu Chu[2017]27 57,030.22 3 Residential He Tu Chu[2017]25 58,849.92 3 Residential

Project Company 5 He Tu Chu[2017]35 27,011.59 2.5 Residential He Tu Chu[2017]32 6,403.63 3 Residential He Tu Chu[2017]33 54,538.42 3 Residential He Tu Chu[2017]34 52,273.04 2.5 Residential He Tu Chu[2017]29 3,926.73 3 Residential He Tu Chu[2017]30 30,013.43 3 Residential He Tu Chu[2017]22 48,118.38 2.5 Residential

Project Company 6 He Tu Chu[2017]21 46,711.79 2.5 Residential

All of the land use rights were obtained on 29 January 2018 from the He County Land and Resources Bureau (和縣國土資源局) and all have an expiry date of 15 November 2087.

–17– LETTER FROM THE BOARD

It was planned that the Project Sites will be consolidated and developed into a sizable residential and commercial complex. The scope of the development work to be undertaken by the Project Companies include:

(i) obtaining governmental permits and/or certificates;

(ii) selecting and finalising the design of the complex;

(iii) engaging third-party construction companies through bidding;

(iv) ensuring internal quality control;

(v) engaging sales and marketing agency through tenders;

(vi) complying with pre-sale statutory requirements;

(vii) marketing and promotion;

(viii) obtaining completion certificates and deliver the properties to the buyers; and

(ix) setting up property management companies to provide property management services in the initial stage.

As at the Latest Practicable Date, the development of the Project Sites was in the planning stage, and construction had not commenced.

7. REASONS FOR AND BENEFITS OF THE EQUITY TRANSFER AND COOPERATION AGREEMENT

The cooperation between the Group and Shimao Group pursuant to the Equity Transfer and Cooperation Agreement would bring about synergy effects which are beneficial to the development of the Project Sites.

Shimao is one of the largest property developers in the PRC with a superior brand name and reputation in the industry. The cooperation can allow the Group to leverage on Shimao’s excellent brand name and reputation in the PRC property market in the sale of properties to be developed on the Project Sites, and its expertise and experience in the planning and development of premium quality property projects. On the other hand, the cooperation can also allow Shimao to explore a new market, and benefit from the Group’s experience and expertise in property development in the Maanshan area.

–18– LETTER FROM THE BOARD

By introducing Shimao as an investor and partner in the development of the Project Sites and the sales of the properties to be developed, it is expected that sales would be greatly enhanced and higher selling prices can be achieved, which would in turn generate significantly higher sales revenue to the Group than if the Company were the sole developer and operator of the Project Sites. In addition, the Group retains a number of projects in the nearby areas of the Project Sites (please refer to items 48, 49, 67 and 95 to 101 of the property table on pages I-7 to I-11 of this circular), with a total expected GFA of over 5 million square metres (excluding the Project Sites). The higher selling prices of the projects to be developed on the Project Sites as a result of Shimao’s participation could in turn result in higher selling prices and sales revenue for the Group for such other projects of the Group in the vicinity.

In addition, Shimao is one of the largest property developers in the PRC and has an investment grade credit rating. By becoming the majority shareholder of the Project Companies, it is expected that the future financing costs for the development of the Project Sites can be significantly reduced, compared to the situation where the Company were the sole shareholder of the Project Companies.

Therefore, although the Group would have sufficient working capital to develop the Project Sites on a standalone basis without entering into the Equity Transfer and Cooperation Agreement with funding from available external financing and internal resources generated from sales proceeds of its other property projects, the transactions contemplated under the Equity Transfer and Cooperation Agreement are in the best interests of the Company from a financial perspective and also enable the Company to increase its working capital.

The Directors (including the independent non-executive Directors) are of the view that the Equity Transfer and Cooperation Agreement was entered into in the ordinary and usual course of business of the Group and that the terms of the Equity Transfer and Cooperation Agreement and the transactions contemplated thereunder are on normal commercial terms which are fair and reasonable and in the best interests of the Company and the Shareholders as a whole.

None of the Directors has a material interest in the Equity Transfer and Cooperation Agreement and the transactions contemplated thereby and hence no Director has abstained from voting on the relevant Board resolution.

8. IMPLICATIONS UNDER THE LISTING RULES

As the highest applicable percentage ratio exceeds 25% but is less than 75%, the entering into of the Equity Transfer and Cooperation Agreement constitutes a major transaction for the Company under the Listing Rules, and is therefore subject to reporting, announcement and shareholders’ approval requirements pursuant to Chapter 14 of the Listing Rules.

–19– LETTER FROM THE BOARD

As of the Latest Practicable Date, the indirect sole shareholder of the Purchaser was Shimao, which was an indirect substantial shareholder of Nanjing Mingmao Real Estate Co., Ltd. (a subsidiary of the Company). Therefore, the Purchaser is a connected person of the Company at the subsidiary level. The entering into of the Equity Transfer and Cooperation Agreement constitutes a connected transaction of the Company and is subject to the annual review, reporting and announcement requirements under Chapter 14A of the Listing Rules but exempt from the circular, independent financial advice and shareholders’ approval requirements pursuant to Rule 14A.101 of the Listing Rules on the following grounds (but remains subject to the circular and shareholders’ approval requirements for a major transaction under Chapter 14 of the Listing Rules):

(a) the terms of the Equity Transfer and Cooperation Agreement are on normal commercial terms;

(b) the Board has approved the Equity Transfer and Cooperation Agreement and the transactions contemplated thereby; and

(c) the independent non-executive Directors have confirmed that the terms of the Equity Transfer and Cooperation Agreement and the transactions contemplated thereby are fair and reasonable, on normal commercial terms or better and in the interests of the Company and the Shareholders as a whole.

To the best of the knowledge, information and belief of the Directors and having made all reasonable enquiries, no Shareholder has a material interest in the Equity Transfer and Cooperation Agreement and the transactions contemplated thereunder and accordingly, no Shareholder is required to abstain from voting on the Equity Transfer and Cooperation Agreement and the transactions contemplated thereunder if a Shareholders’ meeting were to be convened.

Galaxy Earnest Limited, being the direct controlling Shareholder holding approximately 83.47% of the issued share capital of the Company as at the Latest Practicable Date, has given its written approval to the Equity Transfer and Cooperation Agreement and the transactions contemplated thereunder. Accordingly, the Company is exempted from the requirement to hold a general meeting to approve the Equity Transfer and Cooperation Agreement and the transactions contemplated thereby pursuant to Rule 14.44 of the Listing Rules.

If the Company were to convene a general meeting for the approval of the Equity Transfer and Cooperation Agreement and the transactions contemplated thereby, the Directors (including the independent non-executive Directors) would have recommended the Shareholders to vote in favour of the relevant resolution.

–20– LETTER FROM THE BOARD

Pursuant to Rule 14.41(a) of the Listing Rules, as the Equity Transfer and Cooperation Agreement and the transactions contemplated thereby were approved by way of written shareholders’ approval under Rule 14.44 of the Listing Rules, the Company is required to despatch the circular to the Shareholders within 15 business days after publication of the Announcement, which is on or before 30 April 2019. As additional time is required to prepare the information in the circular, the Company has applied to the Stock Exchange for, and the Stock Exchange has granted, a waiver from strict compliance with Rule 14.41(a) of the Listing Rules for an extension of the deadline for the despatch of this circular to 26 August 2019.

9. GENERAL INFORMATION

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

Yours faithfully, For and on behalf of the Board Mingfa Group (International) Company Limited Wong Wun Ming Chairman and Non-Executive Director

–21– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

1. FINANCIAL INFORMATION OF THE GROUP

The audited consolidated financial statements of the Group for the year ended 31 December 2016 are set out on pages 63 to 201 in the 2016 Annual Report of the Company, which was published on 11 July 2019. Please also see below a quick link to the 2016 Annual Report:

https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0711/ltn20190711373.pdf

The audited consolidated financial statements of the Group for the year ended 31 December 2017 are set out on pages 66 to 205 in the 2017 Annual Report of the Company, which was published on 11 July 2019. Please also see below a quick link to the 2017 Annual Report:

https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0711/ltn20190711391.pdf

The audited consolidated financial statements of the Group for the year ended 31 December 2018 are set out on pages 64 to 211 in the 2018 Annual Report of the Company, which was published on 11 July 2019. Please also see below a quick link to the 2018 Annual Report:

https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0711/ltn20190711403.pdf

2. INDEBTEDNESS OF THE GROUP

Borrowings

As at 30 June 2019, being the latest practicable date for the purpose of this statement of indebtedness prior to the printing of this circular, the Group had total bank and other borrowings of RMB8,876,544,000. The details of the Group’s total bank and other borrowings are set out as follows:

Borrowings RMB’000

Bank borrowings — secured 4,538,555 Bank borrowings — unsecured 184,880 Other borrowings — secured 922,000 Bonds payable — secured and guaranteed 343,735 Bonds payable — unsecured 2,887,374

–I-1– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

Contingent liabilities

As at 30 June 2019, the Group had material contingent liabilities arising in the ordinary course of business as follows:

RMB’000

Guarantees in respect of mortgage facilities for certain purchasers of the Group’s properties 6,908,117 Guarantees in respect of banking facilities granted to an associated company 196,000 Guarantees in respect of banking facilities granted to a joint venture 309,038

Total 7,413,155

Save as aforesaid or as otherwise disclosed herein, and apart from intra-group liabilities and normal accounts payable in the ordinary course of business, as of 30 June 2019, the Group did not have other outstanding mortgages, charges, debentures or other loan capital, bank overdrafts or loans, other similar indebtedness, finance lease or hire purchase commitments, liabilities under acceptance or acceptance credits, guarantees or other material contingent liabilities.

3. SUFFICIENCY OF WORKING CAPITAL

As at the Latest Practicable Date, after due enquiry and taking into account the internal resources of the Group and the borrowing facilities available to the Group, the Directors are of the opinion that the Group has sufficient working capital for its present requirement, that is for at least the next 12 months from the date of publication of this circular.

4. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

The Group is one of the leading property developers in the PRC and has established land banks in high growth cities such as Nanjing and Wujiang. The contracted sales of the Group increased sharply from RMB5.2 billion in 2015, to RMB14.0 billion in 2016, RMB12.5 billion in 2017, RMB16.4 billion in 2018 and RMB2.1 billion for the first quarter of 2019.

In view of the uncertainties arisen from the US-China trade war, the Group will remain prudent to acquire new lands to expand its business. The existing land bank is sufficient for future development of the Group for 5 to 7 years.

–I-2– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

Set out below are the details of the Group’s remaining projects (other than those held by the Project Companies) as at 31 December 2018:

Actual/ Estimated Approximate Gross Completion Leasable and Group’s Attributable Profit for No. Project Address Date Type of Property Status Site Area Saleable GFA Interest GFA Sales for 2018 2018 (m2)(m2)(m2)(m2) RMB’000 RMB’000

Completed projects (held for sale/leasing) (Note 1)

1. Xiamen Mingfa Seascape Located at Qianpu South 2 Road, Dec-2004 Residential/ Completed 18,247 450 100% 450 Garden Siming District, Xiamen, Fujian Commercial/Office Province

2. Xiamen Mingfa Noble Located at Jiangtou Residential, Dec-2004 Residential/ Completed 5,529 1,287 100% 1,287 Place Huli District, Xiamen, Fujian Commercial/Office Province

3. Xiamen Mingfa Garden Located at Huanhuli South, lvling Apr-2005 Residential/Commercial Completed 18,697 13,809 100% 13,809 Road, Siming District, Xiamen, Fujian Province

4. Xiamen Jianqun Elegant Located at Qianpu Lianqian East Apr-2005 Residential/Office Completed 10,257 1,418 100% 1,418 Garden Road North, Huli District, Xiamen, Fujian Province

5. Xiamen Mingfa Located at Qianpu Lianqian Road Feb-2002 Residential/ Completed 26,016 5,527 100% 5,527 International New Town South, Siming District, Xiamen, Commercial/Office Fujian Province

6. Xiamen Mingfa Shopping Located to the northwest of Jiahe Oct-2007 Commercial/Office/ Completed 166,775 26,750 70% 18,725 Mall Road and Lianqian Road, Hotel Siming District, Xiamen, Fujian Province

7. Xiamen Mingfa Town Located at lvling Road, Siming Jan-2008 Residential/Commercial Completed 12,879 14,930 100% 14,930 Industrial Park, Siming District, Xiamen, Fujian Province

8. Nanjing Pearl Spring Located in Pearl Spring Resort, Dec-2008 Residential/Hotel Completed 112,973 5,201 100% 5,201 5,050 116,849 89,009 Resort Pukou District, Nanjing, Jiangsu Province

9. Nanjing Mingfa Riverside Located in Taishan village, Pukou Nov-2009 Residential/Commercial Completed 1,072,182 67,084 100% 67,084 New Town District, Nanjing, Jiangsu Province

10. Nanjing Mingfa Shopping Located at the intersection of Dec-2010 Commercial/Office/ Completed 182,588 112,186 100% 112,186 Mall Dingqiang Road and Yulan Hotel Road in Yuhuatai District, Nanjing, Jiangsu Province

11. Wuxi Mingfa Shopping Located in Sitou Village and Dec-2011 Residential/ Completed 216,643 436,336 70% 305,435 Mall Tangtou Village, Yanqiao town, Commercial/Hotel Huishan District, Wuxi, Jiangsu Province

12. Hefei Mingfa Shopping Located along the northeast side of Dec-2011 Residential/ Completed 176,698 188,337 100% 188,337 Mall the junction of Silihe Road and Commercial/Office/ Dangshan Road, Luyang Hotel District, Hefei, Anhui Province

13. Yangzhou Mingfa Located at the south of Yunhe Dec-2011 Residential/ Completed 145,267 226,320 100% 226,320 Shopping Mall Road East and west of Baolin Commercial/Hotel Road, Guangling District, Yangzhou, Jiangsu Province

14. Nanjing Mingfa City Located on Dingshan Road, Pukou Dec-2012 Residential/ Completed 128,683 70,138 100% 70,138 Square District, Nanjing, Jiangsu Commercial/Office Province

–I-3– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

15. Honglai Mingfa Located at Honglai District, Jun-2012 Residential/Commercial Completed 27,065 11,726 100% 11,726 Commercial Center Nanan,Fujian Province

16. Xiamen Mingfa Xiang Wan Located at east part of Xiang’an Dec-2012 Residential/Commercial Completed 104,380 13,345 100% 13,345 Peninsula Road, Xiang’an, Fujian Province

17. Zhangzhou Mingfa Located at Longjiang Road East, Dec-2013 Residential/ Completed 223,589 238,023 100% 238,023 Shopping Mall Shuixian Street North, No. 6 Commercial/Office/ Road West, Xinpu Road South, Hotel Zhangzhou, Fujian Province

18. Xiamen Mingfa Harbor LocatedatsouthofWuYuanWan Dec-2013 Hotel Completed 58,952 136,972 100% 136,972 Resort Bridge,westofHuanWan Road, and along the seaview strip of Huli District, Xiamen, Fujian Province

19. Huaian Mingfa Shopping Located in Weihai East Road, Dec-2014 Residential Completed 51,345 10,506 100% 10,506 Mall (Block C) Huaian, Jiangsu Province

20. Nanjing Mingfa Pearl Located at Jiangpu Street, east to Sep-2017 Residential Completed 8,586 7,604 100% 7,604 2,131 68,985 43,383 River International Xianzhuang Road, south to (G11) Jiangpu Secondary School, north to South River, west to Guihua Road, Pukou District, Jiangsu Province

21. Nanjing Mingfa New City Located in New Town Business Dec-2017 Residential/Commercial Completed 59,042 166,839 100% 166,839 6,205 112,381 60,456 Finance Building Avenue North, Pukou District, Nanjing, Jiangsu Province

22. Nanjing Mingfa Cloud Located in along the mountain Sep-2017 Residential Completed 32,787 72,138 40% 28,855 6,002 141,044 73,383 Mansion road South, Jiangpu street, Nanjing, Jiangsu Province

23. Jinzhai Mingfa City Square Located at New Town District, Sep-2017 Residential/Commercial Completed 105,504 222,243 100% 222,243 325,519 1,668,530 359,262 Meishan Town, Jinzhai County, Hefei, Anhui Province

24. Jinzhai Mingfa City Square Located at New City, Meishan Dec-2017 Residential/Commercial Completed 62,885 58,221 100% 58,221 (Plot D) Town, Jinzhai County, Anhui Province

25. Wuxi Mingfa International Located south of Yanqiao town, Jun-2017 Residential/Commercial Completion certificate 258,297 117,933 100% 117,933 9,215 70,977 18,171 New Town Huishan District, Wuxi, Jiangsu had been granted for Province GFA of 519,938 sq.m. in December 2017. The remaining GFA of 29,623 sq.m. will be completed in December 2019

26. Jinzhai Mingfa City Square Located at New City, Meishan Jun-2018 Residential/Commercial Completed 203,406 233,182 100% 233,182 (Plot E, F) Town, Jinzhai County, Anhui Province

27. Beijing Mingfa Mall Located in Beizang Village, Daxing Dec-2018 Residential/Commercial Completed 45,414 112,640 100% 112,640 District, Beijing

28. Nanjing Dream Garden Located at Yuhuatai Economic Jul-2018 Residential Completed 58,914 154,394 51% 21,460 112,316 1,608,024 372,502 Development Zone, Nanjing, Jiangsu Province

–I-4– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

29. Xiamen Mingfeng Town Located at Lingdou Siming Jul-2018 Commercial Completed 19,190 120,595 100% 120,595 District, Xiamen, Fujian Province

30. Zhenjiang Mingfa Xinjin Located at east of the new road, Jan-2018 Residential/Commercial Completed 14,287 13,304 100% 13,304 Yuancheng Danbei Town, Danyang City

31. Shenzhen Mingfa Located at Tianliao Yulv Area, Dec-2018 Commercial Completed 4,109 12,320 100% 9,414 2,906 92,959 26,332 Guangming Xuan Guangming New District, Shenzhen

32. Nanjing Mingfa Located at Pukou South along the Oct-2018 Commercial Completed 31,455 40,754 100% 40,754 49,193 784,346 281,056 Yuejingyuan (G07) Mountain Road, east side Nanjing University of Technology Sub-total 3,662,637 2,912,512 2,594,463

Properties under development (Note 2)

33. Zhenjiang Jinxiu Yinshan Located in the centre of Zhenjiang Dec-2019 Residential/ Completion certificate 296,702 195,029 100% 195,029 15,052 72,672 19,711 City, Jiangsu Province Commercial/Hotel had been granted for GFA of 246,245 sq.m. in December 2017. The remaining GFA of 158,433 sq.m. will be completed in December 2019.

34. Huaian Mingfa Shopping Located in Shenzhen South Road, Dec-2020 Commercial Approximately 90% of 133,110 266,335 100% 266,335 Mall (Block A) Huaian, Jiangsu Province construction has been completed

35. Shenyang Mingfa Jinxiu Located in Shenbei Xinqu Daoyi Dec-2019 Residential/Commercial Completion certificate 61,222 175,275 100% 175,275 Hua City Development Zone, Liaoning had been granted for Province GFA of 280,040 sq.m. in December 2014. The remaining GFA of 26,070 sq.m. will be completed in December 2018

36. Yangzhou Mingfa Located at east of Xuzhuang Road, Dec-2019 Residential Completion certificate 158,238 11,121 100% 11,121 26,611 161,425 13,045 Jiangwan City north of Kaifa East Road, west had been granted for of Liaojiagou Road, south of GFA of 196,412 Ming Cheng Road,Yangzhou, sq.m. in December Jiangsu Province 2017. The remaining GFA of 25,120 sq.m. will be completed in December 2019

37. Taizhou Mingfa Located in Gaogang Distrct, Dec-2020 Residential/Commercial Completion certificate 292,487 401,777 100% 401,777 85,299 530,463 149,876 International Mall Taizhou, Jiangsu Province had been granted for (Phase 1) GFA of 417,064 sq.m. in December 2015. The remaining GFA of 361,737 sq.m. will be completed in December 2020

–I-5– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

38. Taizhou Mingfa Located in Gaogang Distrct, Oct-2020 Residential/Industrial Completion certificate 237,075 245,687 100% 245,687 International Mall Taizhou, Jiangsu Province had been granted for (Phase 2) GFA of 143,995 sq.m. in December 2018. The remaining GFA of 163,859 sq.m. will be completedinOctober 2020

39. Zhangzhou Longhai Located in Bangshan Town, Dec-2020 Residential/Commercial Completion certificate 78,622 239,221 100% 239,221 Mingfa Mall (2011G17, Kekeng Village, Longhai, had been granted for 2011G18 Phase 1) Zhangzhou, Fujian Province GFA of 39,734 sq.m. in December 2016. The remaining GFA of 244,449 sq.m. will be completed in December 2019

40. Shanghai Mingfa Shopping LocatedinHuYiHighwayEast, Dec-2019 Commercial Completion certificate 53,779 152,555 100% 152,555 Mall Baiyin Road of South, Boundary had been granted for of West, Gaotai Road North, GFA of 39,459 sq.m. Shanghai in December 2016. The remaining GFA of 121,079 sq.m. will be completed in December 2019

41. Pingliang Mingfa European LocatedinWaterBridgeWest, Dec-2021 Residential Approximately 75% of 117,594 122,163 60% 73,298 City Linjing Road North, Kongdong construction has District, Pingliang, Gansu been completed Province

42. Changsha Mingfa LocatedinStarChengTown, Dec-2021 Residential/Commercial Completion certificate 285,594 798,588 100% 798,588 927 5,836 3,415 Shopping Mall Wangcheng County, Changsha, had been granted for Hunan Province GFA of 74,461 sq.m. in December 2016. The remaining GFA of 843,189 sq.m. will be completed in December 2021

43. Huizhou Mingfa Gaobang Huizhou City West Train Station, Dec-2020 Residential Approximately 70% of 332,335 708,157 80% 566,526 New City Guangdong Province construction has been completed

44. Nanjing Mingfa Xiang Hill Located in along the mountain Dec-2019 Residential Completion certificate 115,876 116,409 100% 116,409 16,080 383,900 238,431 Garden road to the south, Caiba Road had been granted for East, Pukou District, Nanjing, GFA of 244,877 Jiangsu Province sq.m. in December 2017. The remaining GFA of 10,484 sq.m. will be completed in December 2019

45. Tianjin Binhai Mingfa Located in Tanggu Marine Hi-Tech Dec-2021 Commercial Completion certificate 209,048 369,547 100% 369,547 48,549 431,216 57,750 Shopping Mall Development Zone, Tianjin had been granted for GFA of 68,620 sq.m. in December 2018. The remaining GFA of 349,476 sq.m. will be completed in December 2021

–I-6– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

46. Nanjing Mingfa Wealth Located in NewCity Headquarters Dec-2019 Commercial/Office Approximately 40% of 56,694 283,470 100% 283,470 Center Avenue on the north side of 05 construction has Plots, Pukou District, Nanjing, been completed Jiangsu Province

47. Nanjing Rong Li Located at Jiangpu street, Puzhu Dec-2019 Residential Completion certificate 132,937 31,415 51% 16,022 105,363 2,433,583 1,060,580 Road North, Directional River had been granted for Road East, Pukou District, GFA of 200,563 Nanjing, Jiangsu Province sq.m. in December 2018. The remaining GFA of 642,626 sq.m. will be completed in December 2019

48. Wujiang Mingfa Jiangwan Located at Wujiang Town Four Dec-2019 Residential/Commercial Completion certificate 298,289 508,345 100% 508,345 201,558 1,005,192 124,874 New City (Phase 1) Lian, Hexian, Anhui Province had been granted for GFA of 269,628 sq.m. in December 2018. The remaining GFA of 440,275 sq.m. will be completed in December 2021

49. Wujiang Mingfa Jiangwan Located at Wujiang Town Four Dec-2021 Residential/Commercial Approximately 55% of 489,567 1,395,484 100% 1,395,484 New City (Phase 2) Lian, Hexian, Anhui Province construction has been completed

50. Quanzhou Mingfa Located at Neicuo Village, Dec-2021 Residential/Commercial Approximately 50% of 276,120 747,653 100% 747,653 20,260 103,271 23,898 International Huachang Guanqiao Town, Nanan, Fujian construction has City Province been completed

51. Guang’an Mingfa Mall Located in Bridge Group, Guanan, Dec-2020 Residential/Commercial Approximately 50% of 76,153 382,692 100% 382,692 (GC2013–45 Block) Sichuan Province construction has been completed

52. Shandong Zibo World Located in People’s road to the Dec-2021 Residential/Commercial Completion certificate 147,371 451,338 100% 451,338 167,619 1,068,073 195,998 Trade Center north, Shanghai Road to the had been granted for east, Zhangdian District, Zibo, GFA of 173,743 Shandong Province sq.m. in December 2018. The remaining GFA of 445,215 sq.m. will be completed in December 2021

53. Shenyang Creative Located in Shenbei Xinqu Daoyi Dec-2021 Residential/Commercial Approximately 70% of 154,024 462,072 100% 462,072 Industrial Estate Development Zone, Liaoning construction has Province been completed

54. Zhangzhou Longhai Located in Bangshan Town,Kekeng Jun-2021 Residential Approximately 50% of 63,127 189,381 100% 189,381 Mingfa Mall (2011G15, Village, Longhai, Zhangzhou, construction has 2012G15 Phase 2) Fujian Province been completed

55. Zhongao Town Buliding Located at south of Xiang’an Dec-2019 Commercial Approximately 50% of 11,870 98,104 51% 50,033 District, Xiamen, Fujian construction has Province been completed

–I-7– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

56. Jinzhai Mingfa City Square Located at Jinzhai County Meishan Dec-2019 Residential/Commercial Completion certificate 111,142 162,164 100% 162,164 (Plot AC) Town New Town, Hefei, Anhui had been granted for Province GFA of 67,864 sq.m. in December 2018. The remaining GFA of 372,411 sq.m. will be completed in December 2019

57. Mingfa MingBo Town Located at Bowang Town Bowang Dec-2019 Residential/Commercial Approximately 50% of 101,504 171,950 100% 171,950 District, Maanshan, Anhui construction has Province been completed

58. New project in Nanjing Pukou Jiangpu Street angle at Dec-2019 Residential Approximately 70% of 72,280 79,508 100% 79,508 Pukou G86 University Avenue and Flower construction has Industry been completed

59. Taoyuan New Town Located at Xianghe Town, Mar-2020 Residential Approximately 50% of 109,452 240,794 100% 240,794 Quanjiao, Anhui Province construction has been completed

60. New project in Nanjing LocatedinalongtheStreetHigh Nov-2022 Commercial Approximately 50% of 27,428 82,283 40% 32,913 Pukou G42 and New Technology Industrial construction has Development Zone, Nanjing, been completed Jiangsu Province

61. Taoyuan Mansion Located at Xianghe Town, Mar-2020 Residential Approximately 50% of 18,099 30,768 100% 30,768 Quanjiao, Anhui Province construction has been completed

62. Taoyuan Mingzhu Located in Shengzhouhu Road, Jun-2021 Residential Approximately 50% of 99,943 159,909 100% 159,909 Chizhou, Anhui Province construction has been completed

63. New project in Sihong LocatedinRadishLiRoadEast, Mar-2020 Residential/Commercial Approximately 40% of 84,200 193,660 100% 193,660 2017-A04 North of Sizhou Street, Sihong construction has County, Suqian, Jiangsu been completed Province

64. Jinse Shuian Located in North side of Huaihe Dec-2022 Residential/Commercial Approximately 40% of 289,236 336,769 100% 336,769 Road, Jinhu County, Huanan, construction has Jiangsu Province been completed

65. Taoyuan Xi’an Located in Gushi Town, Dangtu Dec-2020 Residential/Commercial Approximately 45% of 24,439 39,103 100% 39,103 County, Anhui Province construction has been completed

66. Taoyuan Guandi Located in south side of Taochang Dec-2020 Residential Approximately 45% of 43,868 74,576 100% 74,576 Road, Hanshan County, Anhui construction has Province been completed

67. Wujiang Mingfa Jiangwan Located at Wujiang Town Four Dec-2021 Residential/Commercial Approximately 30% of 613,287 1,665,440 100% 1,665,440 New City (Phase 3) Lian, Hexian, Anhui Province construction has been completed

68. New project in Nanjing Located in Software Service Center Dec-2021 Commercial Approximately 30% of 62,015 446,246 80% 356,997 Pukou G20 High Tech Development Zone, construction has Nanjing, Jiangsu Province been completed

69. Taoyuan Xiangsong Located in North New District, Jun-2020 Residential/Commercial Approximately 30% of 36,590 62,202 100% 62,202 Dongzhi County, Chizhou, construction has Anhui Province been completed

70. Taoyuan Fudi Located at Xianghe Town, Apr-2020 Residential Approximately 30% of 66,262 189,320 70% 132,524 Quanjiao, Anhui Province construction has been completed

–I-8– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

71. Taoyuan Guanlan Located at Xianghe Town, Apr-2020 Residential Approximately 30% of 55,481 118,889 70% 83,222 Quanjiao, Anhui Province construction has been completed

72. Mingfa North Station New LocatedinwestsideofChangjiang Jan-2020 Residential/Commercial Approximately 30% of 65,335 163,337 70% 114,336 Town road, Chahe Town, Laian county construction has been completed

73. Guang’an Mingfa Wealth Located in Binjiang Road, Dec-2021 Residential/Commercial Approximately 30% of 76,363 305,452 100% 305,452 Centre (ChaMa Road Guang’an District, Guanan, construction has B1–1 Block) Sichuan Province been completed

74. New project in Zhangpu Located in Houcai Village, May-2022 Residential/Commercial Approximately 30% of 46,885 204,457 100% 204,457 2017SG15 Qianting Town, Zhangpu construction has County, Zhangzhou, Fujian been completed Province

75. New project in Wuhu LocatedinNewCityeastof May-2022 Residential Approximately 30% of 64,607 129,214 100% 129,214 FT1714 Chengdong, Fanchang County, construction has Wuhu City, Anhui Province been completed

76. New project in Nanjing Located in the Channel of science Feb-2021 Industrial Approximately 30% of 119,564 95,652 100% 95,652 Pukou 2014GY04, and technology industrial park, construction has 2016GY020 Pukou district, Nanjing, Jiangsu been completed Province

77. Mingfa north station Located at Chahe Town, Laian, Jun-2021 Residential/Commercial Approximately 50% of 69,757 132,699 100% 132,699 center Anhui Province construction has been completed

78. Mingfa north station villas Located at Chahe Town, Laian, Jun-2021 Residential Approximately 50% of 66,350 383,664 100% 383,664 Anhui Province construction has been completed

79. Hecheng Shoufu Located at Liyang Town, Jan-2021 Residential Approximately 50% of 26,918 53,835 100% 53,835 Maanshan, Anhui Province construction has been completed

80. Mingfa Huguangshanse Located at Xiangquan Town May-2020 Residential/Commercial Approximately 30% of 68,688 82,426 100% 82,426 Yihao Maanshan, Anhui Province construction has been completed Located at Xiangquan Town May-2020 Residential/Commercial Approximately 30% of 63,674 76,409 100% 76,409 Maanshan, Anhui Province construction has been completed

81. New project in Nanjing LocatedinJinniuLakeStreet, Oct-2020 Residential Approximately 30% of 34,330 68,661 51% 35,017 Liuhe 2017G68 Liuhe District, Nanjing, jiangsu construction has Province been completed

82. New project in Jinzhai Located at Jinzhai County Meishan Jun-2021 Residential/Commercial Approximately 30% of 133,332 252,883 100% 252,883 (Plot 40, 41) Town New Town, Hefei, Anhui construction has Province been completed

83. New project in Nanjing LocatedinXinghuoRoadBus Nov-2022 Commercial/Office Approximately 20% of 7,025 21,145 40% 8,458 Pukou G01 station, Jiangbei New District, construction has Nanjing, jiangsu Province been completed

84. New project in Nanjing Located in Puzhu Road, Jiangpu Dec-2020 Commercial Vacant 26,530 66,325 100% 66,325 Pukou G22 Street, Pukou District, Nanjing, Jiangsu Province

–I-9– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

85. New project in Nanjing Located at Pukou north of Nanjing Jun-2020 Commercial Vacant 32,843 59,117 100% 59,117 Pukou G30 University of Technology, south along the mountain road

86. Taohua Yuanzhu (Phase 2) Located at Xingyuan Road Zibo, Oct-2022 Residential Vacant 75,474 135,853 100% 135,853 Shandong Province

Sub-total 6,870,734 14,636,527 14,056,153

Properties with land use rights certificate for future development (Note 3)

87. Nanjing Mingfa Furniture Located in Huangyao Village, Jun-2021 Industrial Vacant 41,434 103,585 100% 103,585 City Taishan Street, Pukou District, Nanjing, Jiangsu Province

88. Lanzhou Mingfa Zhongke Located in Weijia Village of Dec-2021 Residential Vacant 1,371,786 1,371,786 51% 699,611 Ecological park Southwest, Gansu Province

89. Taiwan Taoyuan 54 Block Located in Air Passenger Park, Jun-2021 Commercial Vacant 13,710 32,905 100% 32,905 Taoyuan, Taiwan

90. Taiwan Taoyuan 169 Block Located in Air Passenger Park, Jun-2021 Commercial Vacant 16,110 38,663 100% 38,663 Taoyuan, Taiwan

91. Shenyang Mingfa Wealth Located at Young Street, Heping Dec-2021 Commercial Vacant 5,468 54,677 100% 54,677 Center District, Shenyang, Liaoning Province

92. Shenyang Mingfa Square Located in Shenbei Xinqu Daoyi Jun-2021 Residential/Commercial Vacant 119,154 238,308 100% 238,308 Development Zone, Liaoning Province

93. Shenyang Mingfa Located at Zaohua Street, Yuhong Dec-2021 Residential Vacant 235,526 423,948 100% 423,948 Comprehensive District, Shenyang, Liaoning Technology Park Province

94. New project in Located in east side of silver Beach Apr-2021 Residential Vacant 50,458 75,687 100% 75,687 Lianyungang 2017G04 Road, Qingkou Town, Lianyungang, Jiangsu Province

95. New project in Maanshan Located at Wujiang Town Four Apr-2021 Residential Vacant 222,285 603,154 100% 603,154 Mingkun Lian, Hexian, Anhui Province

96. New project in Maanshan Located at Wujiang Town Four Apr-2021 Industrial Vacant 31,258 46,888 100% 46,888 MingPu Lian, Hexian, Anhui Province

97. New project in Maanshan Located at Wujiang Town Four Apr-2021 Residential Vacant 179,980 539,941 100% 539,941 Mingshu Lian, Hexian, Anhui Province

98. New project in Maanshan Located at Wujiang Town Four Apr-2021 Residential/Commercial Vacant 114,945 336,206 100% 336,206 Mingnan Lian, Hexian, Anhui Province

99. New project in Maanshan Located at Wujiang Town Four Apr-2021 Residential Vacant 71,080 213,241 100% 213,241 Mingzhao Lian, Hexian, Anhui Province

–I-10– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

100. New project in Maanshan Located at Wujiang Town Four Apr-2021 Residential/ Vacant 169,934 328,534 100% 328,534 MingLin Lian, Hexian, Anhui Province Commercial/ Industrial

101. New project in Maanshan Located at Wujiang Town Four Apr-2021 Residential Vacant 22,491 78,719 100% 78,719 Mingzhang Lian, Hexian, Anhui Province

102. Siyang Mingfa Located at Zhongxing Town Dec-2021 Residential/Commercial Vacant 64,173 320,865 70% 224,606 Shoufu2013E1 Plot Siyang, Suqian, Jiangsu Province

103. Siyang Mingfa Located at Zhongxing Town Dec-2021 Residential/Commercial Vacant 39,799 198,995 70% 139,297 Shoufu2013E2 Plot Siyang, Suqian, Jiangsu Province

104. Taohua Yuanzhu (Phase 2) Located at Xingyuan Road Zibo, Oct-2022 Residential Vacant 81,217 146,191 100% 146,191 Shandong Province

105. Mingfa Internet Industrial Located at Xingyuan Road Zibo, Oct-2022 Commercial Vacant 32,415 48,623 100% 48,623 Park (Phase 1) Shandong Province

106. Mingfa Internet Industrial Located at Xingyuan Road Zibo, Oct-2022 Commercial Vacant 34,741 52,112 100% 52,112 Park (Phase 2) Shandong Province

107. New project in Jurong Located at the east side of Aug-2022 Residential/Commercial Vacant 53,892 296,406 100% 296,406 2018-J2–1–15 Plot Ninghang North Road and the west side of Chigang Road Jurong, Jiangsu Province

108. Mingfa Huguangshanse Located at Xiangquan Town May-2021 Residential Vacant 108,972 108,972 100% 108,972 No.2 Maanshan, Anhui Province

109. New project in Jurong Located in Huanhu Road, Jurong, Apr-2021 Commercial Vacant 9,265 13,898 49% 6,810 2017–2–1–08 Jiangsu Provine

110. New project in Located in Baohua Town, Jurong, Apr-2021 Residential Vacant 8,378 20,945 51% 10,682 Jurong2017–2–1–15 Jiangsu Provine

Sub-total 3,098,473 5,693,248 4,847,763

Properties with signed land use rights contract for future development (Note 4)

111. Hong Six highway Located at Xixia Village, Honglai Dec-2022 Residential/Commercial Vacant 22,784 92,298 100% 92,298 rebuilding project Town, Nanan, Fujian Province

112. Zhangzhou Longhai Located in Bangshan Town, Dec-2022 Residential Vacant 105,188 315,564 100% 315,564 Mingfa Mall (Phase 3) Kekeng Village, Longhai, Zhangzhou, Fujian Province

113. Mingfa City Lights JZZB- LocatedinJinzhaiModern Mar-2021 Residential/Commercial Vacant 43,995 131,986 100% 131,986 GT-2018–37 Industrial Park, Anhui Province

–I-11– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

114. Mingfa City Lights JZZB- LocatedinJinzhaiModern Mar-2021 Residential Vacant 63,421 139,527 100% 139,527 GT-2018–38 Industrial Park, Anhui Provine

115. Kangyang Town Located in Jiangjun Road, Jinzhai, Sep-2021 Residential/Commercial Vacant 64,539 103,263 100% 103,263 Anhui Provine

116. New project in Jinniuhu Located in east of Changxing road Oct-2021 Residential/Commercial Vacant 48,073 96,145 100% 96,145 TP201813–3 and north of Nameless Road, Jinniu Lake New City, Tianchang, Anhui Provine

Sub-total 348,000 878,782 878,782

Others 42,207 263,888 97,194

Total 13,979,844 24,121,070 22,377,162 1,248,061 11,123,614 3,308,326

Notes:

1. Completed properties refer to the properties in respect of which (a) the certificates of completion, (b) the permits for commencement of construction works, and (c) the land use rights certificates had been obtained as at 31 December 2018.

2. Properties under development refer to the properties in respect of which (a) the permits for commencement of construction works and (b) the land use rights certificates had been obtained as at 31 December 2018.

3. The site area is in respect of the whole property (regardless of GFA that have been sold).

4. The approximate leasable and saleable GFA have excluded the GFA that have been sold/leased.

–I-12– APPENDIX II PROPERTY VALUATION REPORT

The following is the text of a letter, summary of values and valuation report prepared for the purpose of incorporation in this circular received from Knight Frank Petty Limited, an independent valuer, in connection with their opinion of values of the property interests held by the Project Companies as at 30 June 2019.

Knight Frank 4/F Shui On Centre 6–8 Harbour Road Wanchai Hong Kong

T +852 2840 1177 F +852 2840 0600 www.knightfrank.com.hk

24 August 2019

Board of Directors Mingfa Group (International) Company Limited Units 6–8, 23/F, Greenfield Tower Concordia Plaza 1 Science Museum Road Tsim Sha Tsui Kowloon, Hong Kong

Dear Sirs

VALUATION OF 18 PARCELS OF LAND, HE COUNTY, MA’ANSHAN, ANHUI PROVINCE, THE PEOPLE’S REPUBLIC OF CHINA (THE ‘‘PROPERTY’’)

In accordance with your instructions for us to value the Property held by Mingfa Group (International) Company Limited (the ‘‘Company’’), its subsidiaries, its associated company and its joint ventures (hereinafter together referred to as the ‘‘Group’’) in the People’s Republic of China (the ‘‘PRC’’), we confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the Property in existing state as at 30 June 2019 (the ‘‘Valuation Date’’).

–II-1– APPENDIX II PROPERTY VALUATION REPORT

BASIS OF VALUATION

Our valuation is our opinion of the market values of the Property, which we would define as intended to mean ‘‘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.’’

Market value is understood as the value of an asset or liability estimated without regard to costs of sale or purchase (or transaction), and without offset for any associated taxes or potential taxes.

Market value is also the best price reasonably obtainable by the seller and the most advantageous price reasonably obtainable by the buyer. This estimate specifically excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangements, special considerations or concessions granted by anyone associated with the sale, or any element of value available only to a specific owner or purchaser.

VALUATION METHODOLOGY

We have valued the Property by adopting Market Approach. Market Approach is the most common and reliable valuation approach for valuing property by referencing to market comparable transactions of similar properties. The rationale of this method is to directly relate the market comparable transactions with the property to determine the market value. Adjustments will be applied to the said comparable transactions to adjust for differences between the property and the comparable transactions.

TITLE DOCUMENTS AND ENCUMBRANCES

We have been provided with extracts of documents in relation to the titles to the Property. However, we have not inspected the original documents to ascertain any amendmentswhichmaynotappearonthecopieshandedtous.Wehavereliedonthe information provided by the Group and its PRC legal advisor, Global Law Office (Shenzhen), regarding the title of the Property.

No allowance has been made in our report for any charges, mortgages or amounts owing on any property nor for any expenses or taxation which may be incurred in affecting a sale. Unless otherwise stated, it is assumed that the Property is free from encumbrances, restrictions and outgoings of an onerous nature which could affect its value.

–II-2– APPENDIX II PROPERTY VALUATION REPORT

SOURCE OF INFORMATION

We have relied to a very considerable extent on the information given by the Group and the legal opinion of the Group’s PRC legal advisor. We have no reason to doubt the truth and the accuracy of the information provided by the Group which is material to the valuation. We have accepted advice given by the Group on such matters as planning approvals or statutory notices, easements, tenure, and site areas. Dimension, measurements and areas included in the attached valuation report are based on the information provided to us and are therefore only approximations. We have not been able to carry out detailed on-site measurements to verify the site areas of the Property and we have assumed that the areas shown on the documents handed to us are correct. We were also advised by the Group that no material facts have been omitted from the information provided.

We have inspected the Property and the inspection was carried out by Ocean Ruan, Real Estate Appraiser of China, in May 2019. He has over 16 years’ property market valuation experience in China. However, we have not carried out site investigations to determine the suitability of ground conditions and services, etc. Our valuation is prepared on the assumption that these aspects are satisfactory. No tests were carried out on any of the services.

IDENTITY OF PROPERTY TO BE VALUED

We exercised reasonable care and skill (but will not have an absolute obligation to the Group) to ensure that the properties, identified by the property addresses in your instructions, is the Property inspected by us and contained within our valuation report.

ENVIRONMENTAL ISSUES

We are not environmental specialists and therefore we have not carried out any scientific investigations of sites or buildings to establish the existence or otherwise of any environmental contamination, nor have we undertaken searches of public archives to seek evidence of past activities that might identify potential for contamination. In the absence of appropriate investigations and where there is no apparent reason to suspect potential for contamination, our valuation is prepared on the assumption that the Property is unaffected. Where contamination is suspected or confirmed, but adequate investigation has not been carried out and made available to us, then the valuation will be qualified.

COMPLIANCE WITH RELEVANT ORDINANCES AND REGULATIONS

We have assumed that the Property has been constructed, occupied and used in full compliance with, and without contravention of any Ordinances, statutory requirement and notices except only where otherwise stated. We have further assumed that, for any use of the Property upon which this report is based, any and all required licences, permits, certificates, consents, approvals and authorisation have been obtained, except only where otherwise stated.

–II-3– APPENDIX II PROPERTY VALUATION REPORT

REMARKS

In our valuations, Knight Frank has prepared the valuation based on information and data available to us as at the valuation date. It must be recognised that the real estate market is subject to market fluctuations, while changes in policy direction and social environment could be immediate and have sweeping impact on the real estate market. It should therefore be noted that any market violation, policy and social changes or other unexpected incidents after the valuation date may affect the value of the Property.

In preparing our valuation report, we have complied with the requirements contained within relevant provisions of Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited and The HKIS Valuation Standards 2017 published by the Hong Kong Institute of Surveyors.

CURRENCY

All sums stated in our valuation are in Renminbi.

Our valuation report is attached.

Yours faithfully For and on behalf of Knight Frank Petty Limited Clement W M Leung MFin MCIREA MHKIS MRICS RPS (GP) Executive Director Head of China Valuation & Advisory

Remarks: Clement W M Leung, MFin MCIREA, MHKIS, MRICS, RPS (GP), has been a qualified valuer and has about 25 years’ experience in the valuation of properties in Hong Kong, Macau and Asia Pacific Region and has 22 years’ experience in the valuation of properties in the PRC.

–II-4– APPENDIX II PROPERTY VALUATION REPORT

VALUATION REPORT

Market value in Particulars of existing state as at Property Description and tenure occupancy 30 June 2019

18 parcels of land, The Property comprises 18 parcels of land Asatthedateof RMB1,158,000,000 He County, located near the boundary between inspection, the (RENMINBI ONE Ma’anshan, Wujiang Town of Hexiang and Pukou Property was vacant BILLION ONE Anhui Province, District of Nanjing. Locality of the land pending for HUNDRED FIFTY The PRC Property is mainly of agricultural land future development. EIGHT MILLION with a few of residential developments. ONLY) (Please refer to note The Property comprises 18 parcels of land, (1) for breakdown 16 are for residential uses whilst the of value) remaining two are for commercial services use. The Property has a total site area of approximately 657,494.03 sq m.

The land use rights of the Property have been granted for term expiring on 15 November 2087 and 15 November 2057 for residential use and commercial services use, respectively.

Please refer to note (1) for the details of each parcel of land of the Property.

Notes:

1. Pursuant to 18 State-owned Land Use Rights Certificates, the land use rights of the Property with a total site area of 657,494.03 sq m have been granted to various companies with details listed as below.

Owner: 馬鞍山明林實業有限公司