Altus Capital Limited

THIS document is important and requires your immediate attention

If you are in any doubt as to any aspect of the LF Offers, this Composite Document and/or the accompanying Form(s) of Acceptance or as to the action to be taken, you should consult a licensed securities dealer or registered institution in securities, a bank manager, solicitor, professional accountant or other professional adviser. If you have sold or otherwise transferred all your securities in Lai Fung Holdings Limited, you should at once hand this Composite Document and the accompanying Form(s) of Acceptance to the purchaser(s) or transferee(s), licensed securities dealer or registered institution in securities, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s). This Composite Document should be read in conjunction with the accompanying Form(s) of Acceptance, the contents of which form part of the terms and conditions of the LF Offers. This Composite Document is not for release, publication or distribution in or into any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this Composite Document and the accompanying Form(s) of Acceptance, make no representation as to their 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 Composite Document and the accompanying Form(s) of Acceptance. The LF Offers are being made for the securities of a company incorporated in the Cayman Islands and while the LF Offers are subject to Hong Kong disclosure and procedural requirements, investors should be aware that these requirements are different from those of the U.S. The financial statements included herein have been prepared in accordance with Hong Kong Financial Reporting Standards and thus may not be comparable to financial statements of U.S. companies.

Holy Unicorn Limited (Incorporated in the British Virgin Islands with limited liability)

COMPOSITE OFFER AND RESPONSE DOCUMENT

CONDITIONAL VOLUNTARY GENERAL CASH OFFERS BY HSBC ON BEHALF OF THE OFFEROR, A WHOLLY-OWNED SUBSIDIARY OF LSD, TO ACQUIRE ALL OF THE ISSUED SHARES OF LAI FUNG (OTHER THAN THOSE ALREADY OWNED OR AGREED TO BE ACQUIRED BY LSD, THE OFFEROR OR THE OTHER WHOLLY-OWNED SUBSIDIARIES OF LSD) AND TO CANCEL ALL THE OUTSTANDING SHARE OPTIONS OF LAI FUNG Financial Adviser to LSD and the Offeror

Independent Financial Adviser to the Lai Fung Independent Board Committee ALTUS CAPITAL LIMITED

Unless the context otherwise requires, capitalised terms used in this Composite Document (including this cover page) have the same meanings as those defined in the section headed “Definitions” in this Composite Document. A “Letter from HSBC” containing, among other things, the details of the terms and conditions of the LF Offers are set out on pages 12 to 41 of this Composite Document. A “Letter from the Lai Fung Board” is set out on pages 42 to 48 of this Composite Document. A “Letter from the Lai Fung Independent Board Committee” containing its recommendations to the Disinterested Shareholders and the LF Optionholders in respect of the LF Offers is set out on pages 49 to 50 of this Composite Document. A “Letter from the Lai Fung Independent Financial Adviser” containing its advice and recommendations to the Lai Fung Independent Board Committee in respect of the LF Offers is set out on pages 51 to 75 of this Composite Document. The procedures for acceptance and settlement of the LF Offers are set out in “Appendix I — Further Terms of the LF Offers” to this Composite Document and in the accompanying Form(s) of Acceptance. Acceptance of the LF Share Offer should be received by the Registrar and acceptance of the LF Option Offer should be received by the company secretary of Lai Fung by no later than 4:00 p.m. on Friday, 22 May 2020 or such later time(s) and/or date(s) as the Offeror may determine and announce, in accordance with the Takeovers Code. The LF Offer Shareholders and the LF Optionholders should inform themselves of and observe any applicable legal, tax or regulatory requirements. See “Important Notices” on pages vii and viii of this Composite Document. Any persons including, without limitation, custodians, nominees and trustees, who would, or otherwise intend to, forward this Composite Document and/or the accompanying Form(s) of Acceptance to any jurisdiction outside of Hong Kong should read the details in this regard which are contained in section 13 “Overseas LF Shareholders and LF Optionholders” in the “Letter from HSBC” in this Composite Document before taking any action. It is the responsibility of any overseas LF Offer Shareholders and overseas LF Optionholders wishing to take any action in relation to the LF Share Offer and the LF Option Offer, respectively, to satisfy themselves as to the full observance of the laws and regulations of the relevant jurisdictions in connection therewith, including obtaining all governmental, exchange control or other consents which may be required and compliance with all necessary formalities or legal requirements and the payment of any issue, transfer or other taxes payable by such overseas LF Offer Shareholders or overseas LF Optionholders in respect of the acceptance of the LF Offers (as applicable) in such jurisdiction. The overseas LF Offer Shareholders and the overseas LF Optionholders are advised to seek professional advice on deciding whether to accept the LF Offers (as applicable). This Composite Document is issued jointly by LSD, the Offeror and Lai Fung. The English texts of this Composite Document and the accompanying Form(s) of Acceptance shall prevail over their respective Chinese texts for the purpose of interpretation. 24 April 2020 CONTENTS

Page

Important Notices to all LF Offer Shareholders and LF Optionholders...... ii

Expected Timetable...... iv

Important Notices...... vii

Definitions...... 1

Letter from HSBC...... 12

Letter from the Lai Fung Board...... 42

Letter from the Lai Fung Independent Board Committee...... 49

Letter from the Lai Fung Independent Financial Adviser...... 51

Appendix I — Further Terms of the LF Offers...... I-1

Appendix II — Financial Information of the Lai Fung Group...... II-1

Appendix III — Property Valuation of the Lai Fung Group...... III-1

Appendix IV — General Information of LSD and the Offeror...... IV-1

Appendix V — General Information of Lai Fung...... V-1

Appendix VI — Form of LF Option Offer Letter...... VI-1

– i – Important Notices to all LF Offer Shareholders and LF Optionholders

The following information is important for all LF Offer Shareholders and LF Optionholders.

You are urged to read this entire Composite Document, including the appendices, and the Form(s) of Acceptance carefully.

• LF Share Offer Price: HK$8.99 in cash per LF Offer Share.

• LF Option Offer Price: Please refer to section 5 “The LF Option Offer and the LF Option Offer Price” in the “Letter from HSBC” in this Composite Document.

• How to accept the LF Offers: Please return the duly completed and signed WHITE Form of LF Share Offer Acceptance and the relevant documents to the Registrar (for the LF Share Offer) and/or the PINK Form of LF Option Offer Acceptance and the relevant documents to the company secretary of Lai Fung (for the LF Option Offer).

• Deadline for acceptance: The LF Offers will close for acceptance at 4:00 p.m. on Friday, 22 May 2020 (the first LF Share Offer Closing Date), unless otherwise revised or extended.

For details, please refer to “Appendix I — Further Terms of the LF Offers” to this Composite Document.

• Settlement: Payments in cash will be made within seven (7) Business Days following the later of: (i) the date on which the LF Offers become or are declared unconditional in all respects, and (ii) the date of receipt of your valid acceptance.

• Your prompt action is critical: Unless the LF Offers are otherwise revised or extended, the LF Offers will lapse if:

(i) insufficient valid acceptances of the LF Share Offer are received (and not, where permitted, withdrawn) to result in LSD, the Offeror and the other wholly-owned subsidiaries of LSD holding in aggregate more than 50% of the voting rights in Lai Fung by 4:00 p.m. on Friday, 22 May 2020; or

(ii) valid acceptances in respect of such number of LF Shares which (a) is less than 90% of the LF Offer Shares or (b) when aggregated with the total number of the Disinterested Shares (if any) purchased by the Offeror and the Offeror Concert Parties, would represent less than 90% of the Disinterested Shares, are received (and not, where permitted, withdrawn) by 4:00 p.m. on Friday, 22 May 2020 (unless the Offeror waives Condition (e) of the LF Share Offer (which is set out in paragraph (e) of section 6 “Conditions to the LF Offers” in the “Letter from HSBC” in this Composite Document)). You should therefore act promptly.

– ii – Important Notices to all LF Offer Shareholders and LF Optionholders

NEED HELP?

Please call the customer service hotline of the Registrar, Tricor Tengis Limited, at (852) 2980 1333 between 9:00 a.m. and 5:00 p.m. on Mondays to Fridays, excluding Hong Kong public holidays, if you have any enquiries concerning administrative matters, such as dates, documentation and procedures relating to the LF Share Offer.

The hotline cannot and will not provide advice on the merits of the LF Offers or give financial or legal advice. If you are in any doubt as to any aspect of this Composite Document or as to the action to be taken, you should consult a licensed securities dealer or registered institution in securities, a bank manager, solicitor, professional accountant or other professional adviser.

– iii – Expected Timetable

The timetable set out below is indicative only and may be subject to change. Further announcement(s) will be made in the event that there is any change to the following timetable.

Event Hong Kong Time

Despatch date of this Composite Document and the accompanying Form(s) of Acceptance...... Friday, 24 April 2020

Opening date of the LF Offers...... Friday, 24 April 2020

Special general meeting of eSun to seek the eSun Shareholders’ approval to which the LF Offers are subject (Note 1)...... 9:00 a.m. on Wednesday, 13 May 2020

General meeting of LSG to seek the LSG Shareholders’ approval to which the LF Offers are subject...... 10:30 a.m. on Wednesday, 13 May 2020

General meeting of LSD to seek the LSD Shareholders’ approval to which the LF Offers are subject (Note 1)...... 11:30 a.m. on Wednesday, 13 May 2020

First LF Share Offer Closing Date (Note 2)...... Friday, 22 May 2020

Latest time for acceptance of the LF Offers on the first LF Share Offer Closing Date (Note 3)...... 4:00 p.m. on Friday, 22 May 2020

Announcement of the results of the LF Offers as at the first LF Share Offer Closing Date, on the website of the Stock Exchange...... no later than 7:00 p.m. on Friday, 22 May 2020

Latest date for despatch of cheques for payment of the amounts due under the LF Offers in respect of valid acceptances received by the first LF Share Offer Closing Date, assuming that the LF Offers become or are declared unconditional on the first LF Share Offer Closing Date (Note 4)...... Tuesday, 2 June 2020

– iv – Expected Timetable

Latest time and date for acceptance of the LF Offers assuming that the LF Offers become or are declared unconditional in all respects on the first LF Share Offer Closing Date (Note 5)...... 4:00 p.m. on Friday, 5 June 2020

Latest time and date by which the LF Offers can become or be declared unconditional as to acceptances (Note 6)...... 7:00 p.m. on Tuesday, 23 June 2020

Notes:

(1) The relevant general meeting of LSG will take place at the specified time or, if later, immediately following the conclusion of the relevant special general meeting of eSun. The relevant general meeting of LSD will take place at the specified time or, if later, immediately following the conclusion of the relevant general meeting of LSG.

(2) In order to comply with the Takeovers Code (which requires the LF Offers to be open for acceptance for at least 21 days) and the relevant U.S. regulations (which require the LF Offers to open for at least twenty (20) U.S. Business Days), the LF Offers will close for acceptances at 4:00 p.m. on Friday, 22 May 2020 unless the Offeror revises or extends the LF Offers in accordance with the Takeovers Code. The Offeror has the right under the Takeovers Code to extend the LF Offers until such date as it may determine subject to compliance with the Takeovers Code (or as permitted by the Executive in accordance with the Takeovers Code). In the event that the LF Offers have not become or are not declared unconditional on the first LF Share Offer Closing Date, the Offeror will issue an announcement stating whether the LF Offers have lapsed or have been revised or extended. If the LF Offers are extended or revised, the announcement of such extension or revision will either state the next LF Share Offer Closing Date or, if the LF Offers have become or been declared unconditional as to acceptances, include a statement that the LF Offers will remain open until further notice. In the latter case at least fourteen (14) days’ notice in writing must be given, before the LF Offers are closed, to the LF Offer Shareholders and the LF Optionholders who have not accepted the relevant LF Offers. There is no obligation to extend the LF Offers if the Conditions are not met by the first LF Share Offer Closing Date or any subsequent LF Share Offer Closing Date. Any revised LF Offers must be kept open for at least fourteen (14) days or, if longer and to the extent required by applicable U.S. regulations (including where there is a change in the LF Share Offer Price), at least ten (10) U.S. Business Days following the date on which the revised Composite Document is posted, and shall not be closed earlier than Friday, 22 May 2020, being the first LF Share Offer Closing Date.

(3) If you wish to accept the LF Offers you should ensure your duly completed and signed Form(s) of Acceptance and the relevant documents arrive at the Registrar (for the LF Share Offer) or the company secretary of Lai Fung (for the LF Option Offer) not later than the prescribed time. If you choose to deliver the documents by post you should consider the timing requirements for postage.

Beneficial owners of the LF Offer Shares who hold their LF Offer Shares in CCASS directly as an investor participant or indirectly via a broker or custodian participant should note the timing requirements for causing instructions to be made to CCASS in accordance with the General Rules of CCASS and CCASS Operational Procedures.

All acceptances, instructions, authorisations and undertakings given by the LF Offer Shareholders in the WHITE Form of LF Share Offer Acceptance and by the LF Optionholders in the PINK Form of LF Option Offer Acceptance shall be irrevocable except as permitted under the Takeovers Code.

– v – Expected Timetable

(4) Payment of the consideration (after deducting the seller’s ad valorem stamp duty) for the LF Offer Shares tendered for acceptance under the LF Share Offer will be posted by ordinary post to the LF Offer Shareholders who accept the LF Share Offer at their own risk, and payment of the consideration for the LF Options surrendered for cancellation under the LF Option Offer will be delivered to the office of Lai Fung in Hong Kong at 11th Floor, Lai Sun Commercial Centre, 680 Cheung Sha Wan Road, Kowloon, Hong Kong for collection by the LF Optionholders. Payment will be made as soon as possible, but in any event within seven (7) Business Days following the later of (i) the date on which the LF Offers become or are declared unconditional in all respects; and (ii) the date of receipt by the Registrar (in respect of the LF Share Offer) or the company secretary of Lai Fung (in respect of the LF Option Offer) of all the relevant documents to render each acceptance under the relevant LF Offers complete and valid in accordance with the Takeovers Code, this Composite Document and the relevant accompanying Form(s) of Acceptance.

(5) Pursuant to Rule 15.3 of the Takeovers Code, the final LF Share Offer Closing Date should be no less than fourteen (14) days after the date on which the LF Offers become or are declared unconditional in all respects.

(6) In accordance with the Takeovers Code, except with the consent of the Executive, the LF Share Offer may not become or be declared unconditional as to acceptances after 7:00 p.m. on the 60th day after the day this Composite Document is posted. Accordingly, unless the LF Share Offer has previously become or been declared unconditional as to acceptances or has been extended with the consent of the Executive, the LF Offers will lapse at 7:00 p.m. on Tuesday, 23 June 2020.

Effect of bad weather on the latest time for acceptance of the LF Offers and/or the latest date for despatch of cheques

If there is a tropical cyclone warning signal number 8 or above, or a black rainstorm warning in force, in Hong Kong:

(a) at any time before 12:00 noon but no longer in force at or after 12:00 noon on the latest date for acceptance of the LF Offers and/or the latest date for despatch of cheques for the amounts due under the LF Offers in respect of valid acceptances (as the case may be), the latest time for acceptance of the LF Offers will remain at 4:00 p.m. on the same Business Day and/or the latest date for despatch of cheques will remain on the same Business Day; or

(b) at any time between 12:00 noon and 4:00 p.m. on the latest date for acceptance of the LF Offers and/or the latest date for despatch of cheques for the amounts due under the LF Offers in respect of valid acceptances (as the case may be), the latest time for acceptance of the LF Offers will be rescheduled to 4:00 p.m. on the following Business Day and/or the latest date for despatch of cheques will be rescheduled to the following Business Day.

– vi – Important Notices

NOTICE TO U.S. HOLDERS OF LF SHARES AND/OR LF OPTIONS

The LF Offers are being made for the securities of a company incorporated in the Cayman Islands with limited liability and are subject to Hong Kong disclosure and other procedural requirements, which are different from those of the USA. The financial information included in this Composite Document has been prepared in accordance with Hong Kong Financial Reporting Standards and thus may not be comparable to financial information of U.S. companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the USA. The LF Offers will be made in the USA pursuant to the applicable U.S. tender offer rules or certain available exemptions or exceptions therefrom and otherwise in accordance with the requirements of the SFO. Accordingly, the LF Offers will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments that are different from those applicable under U.S. domestic tender offer procedures and law.

The receipt of cash pursuant to the LF Offers by a U.S. holder of LF Shares and/or LF Options, respectively, may be a taxable transaction for U.S. federal income tax purposes and under applicable state and local, as well as foreign and other tax laws. Each holder of LF Shares and/or LF Options is urged to consult his/her/its independent professional adviser immediately regarding the tax consequences of acceptance of the LF Offers.

U.S. holders of LF Shares and/or LF Options may encounter difficulty enforcing their rights and any claims arising out of the U.S. federal securities laws, as each of the Offeror and Lai Fung is located in a country outside the USA and some or all of their respective officers and directors may be residents of a country other than the United States. U.S. holders of LF Shares and/or LF Options may not be able to sue a non-U.S. company or its officers or directors in a non-U.S. court for violations of U.S. securities laws. Further, U.S. holders of LF Shares and/or LF Options may encounter difficulty compelling a non-U.S. company and its affiliates to subject themselves to a U.S. court’s judgment.

In accordance with normal Hong Kong practice and pursuant to Rule 14e-5(b) of the U.S. Exchange Act, the Offeror hereby discloses that it or its affiliates, or its nominees, or their respective brokers (acting as agents) may from time to time make certain purchases of, or arrangements to purchase, LF Shares outside of the United States, other than pursuant to the LF Share Offer, before or during the period in which the LF Share Offer remains open for acceptance. In accordance with the Takeovers Code and Rule 14e-5(b) of the U.S. Exchange Act, HSBC and its affiliates may continue to act as exempt principal traders (where such statuses are granted to the relevant HSBC entities) in the LF Shares on the Stock Exchange. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices, provided that (i) any such purchase or arrangement complies with applicable law and is made outside the United States; and (ii) if applicable and required under the relevant exemption or exception (or the Takeovers Code), the LF Share Offer Price is increased to match any consideration paid in any such purchase or arrangement. Any information about such purchases will be reported to the SFC and, to the extent made public by the SFC, will be available on the website of the SFC at https://www.sfc.hk. To the extent that such information is required to be publicly disclosed in Hong Kong in accordance with applicable regulatory requirements, this information will, as applicable, also be publicly disclosed in the United States, by publishing it on the website of LSD at www.laisun.com.

– vii – Important Notices

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Composite Document includes certain “forward-looking statements”. These statements are based on the current expectations of the management of the Offeror, LSD and/or Lai Fung (as the case may be) and are naturally subject to uncertainty and changes in circumstances. The forward- looking statements contained in this Composite Document include statements about the expected effects of the LF Offers, the expected timing and scope of the LF Offers and all other statements in this Composite Document other than historical facts.

Forward-looking statements include, without limitation, statements typically containing words such as “intends”, “expects”, “anticipates”, “targets”, “estimates”, “envisages” and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, the satisfaction of the conditions to the LF Offers, as well as additional factors, such as general, social, economic and political conditions in the countries in which the relevant entity operates or other countries which have an impact on the relevant company’s business activities or investments, interest rates, the monetary and interest rate policies of the countries in which the relevant company operates, inflation or deflation, foreign exchange rates, the performance of the financial markets in the countries in which the relevant company operates and globally, changes in domestic and foreign laws, regulations and taxes, changes in competition and the pricing environments in the countries in which the relevant company operates, regional or general changes in asset valuations and disruptions or reductions in travel and operations due to natural or man-made disasters, pandemics, epidemics, or outbreaks of infectious or contagious diseases such as the novel coronavirus (COVID-19). Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements.

All written and oral forward-looking statements attributable to the Offeror, LSD and/or Lai Fung (as the case may be) or persons acting on behalf of any of them are expressly qualified in their entirety by the cautionary statements above. The forward-looking statements included herein are made only as of the Latest Practicable Date.

Any forward-looking statement contained in this Composite Document based on past or current trends and/or activities of the relevant company should not be taken as a representation that such trends or activities will continue in the future. No statement in this Composite Document is intended to be a profit forecast or to imply that the earnings of the relevant company for the current year or future years will necessarily be lower than, match or exceed its historical or published earnings. Each forward-looking statement speaks only as at the date of the particular statement. Subject to the requirements of the Takeovers Code and other applicable laws and regulations, each of the Offeror, LSD and Lai Fung expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in their expectations with regard thereto or any change in events, conditions of circumstances on which any such statement is based.

– viii – Definitions

In this Composite Document, the following expressions have the meanings set out below unless the context requires otherwise.

“Announcement Date” means 21 February 2020, being the date of the Joint Announcement;

“associate” has the meaning ascribed to it under the Takeovers Code;

“Business Day” has the meaning ascribed to it under the Takeovers Code;

“CCASS” means the Central Clearing and Settlement System established and operated by HKSCC;

“close associate” has the meaning ascribed to it under the Listing Rules;

“Companies Law” means the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands;

“Companies Ordinance” means the Companies Ordinance (Chapter 622 of the Laws of Hong Kong);

“Composite Document” means this composite offer and response document dated 24 April 2020 issued by LSD, the Offeror and Lai Fung to the LF Shareholders and the LF Optionholders in accordance with the Takeovers Code in relation to the LF Offers;

“Conditions” means the conditions to the LF Offers, as set out under section 6 “Conditions to the LF Offers” in the “Letter from HSBC” in this Composite Document;

“core connected person” has the meaning ascribed to it under the Listing Rules;

“disclosures of interests” means disclosures of interests pursuant to Part XV of the SFO or otherwise and the disclosures of dealings pursuant to Rule 22 of the Takeovers Code;

“Disinterested Shareholders” means the holders of the Disinterested Shares. For the avoidance of doubt, the Disinterested Shareholders include any member of the HSBC Group in respect of LF Shares of its non-discretionary investment clients where such client (a) has control over whether to tender acceptances to the LF Share Offer in respect of those LF Shares, (b) if acceptances of the LF Share Offer in respect of those LF Shares are to be tendered, gives instructions to tender them, and (c) is not the Offeror, LSD or any of the other Offeror Concert Parties;

– 1 – Definitions

“Disinterested Shares” means the LF Shares other than those owned by the Offeror or any of the Offeror Concert Parties;

“Dr. Peter Lam” means Dr. Lam Kin Ngok, Peter, an Offeror Director, a deputy chairman and an executive director of LSG, the chairman and an executive director of LSD and the ultimate controlling shareholder of LSG, LSD and the Offeror;

“Encumbrance” means any mortgage, charge, pledge, lien, equity, hypothecation or other encumbrance, priority or security interest, deferred purchase, title retention, leasing, sale-and- repurchase or sale-and-leaseback arrangement, rights of pre- emption or any other third party rights of any nature or any agreement for any of the same;

“eSun” means eSun Holdings Limited (豐德麗控股有限公司), an exempted company incorporated in Bermuda with limited liability, the issued shares of which are listed and traded on the Main Board of the Stock Exchange (Stock Code: 571);

“eSun Board” means the board of eSun Directors;

“eSun Circular” means the circular of eSun dated 24 April 2020 in respect of the eSun Disposal;

“eSun Directors” means the directors of eSun;

“eSun Disposal” means eSun’s disposal of all the LF Shares owned by it as a result of its acceptance of the LF Share Offer;

“eSun Group” means eSun and its subsidiaries (including, for the avoidance of doubt, the Lai Fung Group before completion of the eSun Disposal);

“eSun Shareholders” means the holders of the eSun Shares;

“eSun Shares” means the shares in the capital of eSun;

“Executive” means the Executive Director of the Corporate Finance Division of the SFC or any delegate of the Executive Director;

“Form of LF Option Offer means the PINK form of acceptance and cancellation in Acceptance” respect of the LF Option Offer accompanying this Composite Document;

– 2 – Definitions

“Form of LF Share Offer means the WHITE form of acceptance and transfer in Acceptance” respect of the LF Share Offer accompanying this Composite Document;

“Form(s) of Acceptance” means collectively, the Form of LF Share Offer Acceptance and the Form of LF Option Offer Acceptance, and “Form of Acceptance” shall mean either one of them;

“HK$” means Hong Kong dollars, the lawful currency of Hong Kong;

“HKSCC” means Hong Kong Securities Clearing Company Limited;

“Hong Kong” means the Hong Kong Special Administrative Region of the PRC;

“HSBC” means The Hongkong and Shanghai Banking Corporation Limited, being the financial adviser to LSD and the Offeror in relation to the LF Offers, a registered institution under the SFO, registered to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 5 (advising on futures contracts), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO and a licensed bank under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong);

“HSBC Facility” means the loan facility granted by HSBC (in its capacity as the lender) to the Offeror to finance part of the LF Offers;

“HSBC Group” means HSBC and persons controlling, controlled by or under the same control as HSBC;

“Independent eSun Shareholders” means the eSun Shareholders other than (a) Transtrend, (b) Dr. Peter Lam and Mr. Lester Lam, who, on the basis of their disclosures of interests in LSG, LSD and eSun as at the Latest Practicable Date, will be required under the Listing Rules to abstain from voting on the resolutions to be proposed at the special general meeting of eSun to approve the eSun Disposal as a very substantial disposal, and their respective close associates and (c) any other eSun Shareholder who has a material interest in such very substantial disposal and will be required under the Listing Rules to abstain from voting on the same resolutions and his close associates. For the avoidance of doubt, the Independent eSun Shareholders include the Yu Shareholders;

– 3 – Definitions

“Independent LSD Shareholders” means the LSD Shareholders other than (a) Mr. FA Chew and Mr. Julius Lau, who, on the basis of their disclosures of interests in LSG, LSD and Lai Fung as at the Latest Practicable Date, will be required under the Listing Rules to abstain from voting on the resolution to be proposed at the general meeting of LSD to approve the LF Offers as a major acquisition, and their respective close associates, (b) the Yu Shareholders, who, on the basis of their disclosures of interests in Lai Fung as at the Latest Practicable Date, will be required under the Listing Rules to abstain from voting on the same resolution, and their close associates and (c) any other LSD Shareholder who has a material interest in such major acquisition and will be required under the Listing Rules to abstain from voting on the same resolution and his close associates. For the avoidance of doubt, the Independent LSD Shareholders include LSG and Dr. Peter Lam;

“Independent LSG Shareholders” means the LSG Shareholders other than (a) Mr. FA Chew, who, on the basis of his disclosures of interests in LSG, LSD and Lai Fung as at the Latest Practicable Date, will be required under the Listing Rules to abstain from voting on the resolution to be proposed at the general meeting of LSG to approve the LF Offers as a major acquisition, and his close associates and (b) any other LSG Shareholder who has a material interest in such major acquisition and will be required under the Listing Rules to abstain from voting on the same resolution and his close associates. For the avoidance of doubt, the Independent LSG Shareholders include Dr. Peter Lam, Mr. Lester Lam and the Yu Shareholders;

“Joint Announcement” means the announcement dated 21 February 2020 jointly made by LSG, LSD, the Offeror, eSun and Lai Fung in relation to the LF Offers;

“Knight Frank” means Knight Frank Petty Limited, the independent property valuer appointed by Lai Fung;

“Lai Fung” means Lai Fung Holdings Limited (麗豐控股有限公司), an exempted company incorporated in the Cayman Islands with limited liability, the issued shares of which are listed and traded on the Main Board of the Stock Exchange (Stock Code: 1125);

“Lai Fung Board” means the board of Lai Fung Directors;

– 4 – Definitions

“Lai Fung Directors” means the directors of Lai Fung;

“Lai Fung Group” means Lai Fung and its subsidiaries;

“Lai Fung Independent Board means the independent board committee of Lai Fung Committee” established by the Lai Fung Board and comprising Mr. Lucas Ignatius Loh Jen Yuh, Mr. Puah Tze Shyang, Mr. Ku Moon Lun, Mr. Law Kin Ho, Mr. Mak Wing Sum, Alvin and Mr. Shek Lai Him, Abraham to make a recommendation to the Disinterested Shareholders and the LF Optionholders in respect of the LF Share Offer and the LF Option Offer, respectively;

“Lai Fung Independent Financial means Altus Capital Limited, the independent financial Adviser” or “Altus Capital” adviser of Lai Fung to advise the Lai Fung Independent Board Committee in connection with the LF Offers and a corporation licensed to carry out Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO;

“Laisun Creative Culture means the agreement dated 19 January 2020 entered into Subscription Agreement” between 珠海大橫琴置業有限公司 (Zhuhai Da Hengqin Real Estate Co., Ltd.) (“Zhuhai Da Hengqin”, a company established in the PRC with limited liability and a wholly- owned subsidiary of 珠海大橫琴集團有限公司 (Da Hengqin Group Co., Ltd.)), Zhuhai Hengqin Laisun Creative Culture City Co., Ltd (珠海橫琴麗新文創天地有限公司) (“Laisun Creative Culture”, a wholly-owned subsidiary of Winfield (defined later)) and Winfield Concept Limited (永輝基業有限公司) (“Winfield”, an indirect non-wholly-owned subsidiary of Lai Fung) in relation to, among other things, the subscription of 16.68% equity interest in and capital injection into Laisun Creative Culture by Zhuhai Da Hengqin in the amount of approximately RMB 948.4 million, and the grant of a put option and a call option in relation to shares issued in the capital of Laisun Creative Culture (details of which were disclosed in the joint announcement of LSG, LSD, eSun and Lai Fung dated 19 January 2020);

“Last Trading Date” means 21 February 2020, being (a) the last trading day which ended before the publication of the Joint Announcement and (b) the date of the Joint Announcement;

“Latest Practicable Date” means 21 April 2020, being the latest practicable date prior to the printing of this Composite Document for ascertaining certain information for inclusion in this Composite Document;

– 5 – Definitions

“LF Offer Period” has the meaning ascribed to it in the Takeovers Code which commenced on 21 February 2020, being the Announcement Date, and which will end on the later of (i) the date on which the LF Offers close for acceptances; and (ii) the date when the LF Offers lapse;

“LF Offer Shareholders” means the holders of the LF Offer Shares;

“LF Offer Shares” means the LF Shares which are subject to the LF Share Offer;

“LF Offers” means the LF Share Offer and the LF Option Offer;

“LF Option Offer” means the offer made by HSBC on behalf of the Offeror to the LF Optionholders in compliance with Rule 13 of the Takeovers Code to cancel all the LF Options;

“LF Option Offer Letter” means the letter dated 24 April 2020 issued by HSBC on behalf of the Offeror to the LF Optionholders in accordance with the Takeovers Code in relation to the LF Option Offer in the form set out in Appendix VI to this Composite Document;

“LF Option Offer Price” means, in relation to any LF Option, the price at which the LF Option Offer is made;

“LF Optionholders” means the holders of the LF Options;

“LF Options” means the share options, each relating to one LF Share, granted and outstanding under the Share Option Schemes from time to time, whether such options are vested or not;

“LF Share Offer” means the conditional voluntary general cash offer made by HSBC on behalf of the Offeror to acquire all of the issued shares of Lai Fung (other than those already owned or agreed to be acquired by LSD, the Offeror or the other wholly-owned subsidiaries of LSD);

“LF Share Offer Closing Date” means Friday, 22 May 2020, being the first offer closing date of the LF Share Offer or any subsequent offer closing date in the event that the LF Share Offer is extended or revised in accordance with the Takeovers Code;

“LF Share Offer Price” means HK$8.99 per LF Offer Share;

“LF Shareholders” means the holders of the LF Shares;

“LF Shares” means the shares in the capital of Lai Fung;

– 6 – Definitions

“Listing Rules” means the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited;

“LR associate” has the meaning ascribed to “associate” under Chapter 14A of the Listing Rules;

“LSD” means Lai Sun Development Company Limited (麗新發展有限公司), a company incorporated in Hong Kong with limited liability under the Companies Ordinance, the issued shares of which are listed and traded on the Main Board of the Stock Exchange (Stock Code: 488);

“LSD Board” means the board of LSD Directors;

“LSD Directors” means the directors of LSD;

“LSD Group” means LSD and its subsidiaries (including, for the avoidance of doubt, the eSun Group);

“LSD Shareholders” means the holders of the LSD Shares;

“LSD Shares” means the shares in the capital of LSD;

“LSG” means Lai Sun Garment (International) Limited (麗新製衣國際有限公司), a company incorporated in Hong Kong with limited liability under the Companies Ordinance, the issued shares of which are listed and traded on the Main Board of the Stock Exchange (Stock Code: 191);

“LSG Shareholders” means the holders of the LSG Shares;

“LSG Shares” means the shares in the capital of LSG;

“Macau” means the Macau Special Administrative Region of the PRC;

“Madam U” means Madam U Po Chu, an executive director of LSG and Lai Fung, a non-executive director of LSD and eSun and Dr. Peter Lam’s mother;

“Mr. FA Chew” means Mr. Chew Fook Aun, an Offeror Director, a deputy chairman and an executive director of LSG, the deputy chairman and an executive director of LSD, an executive director of eSun and the chairman and an executive director of Lai Fung;

– 7 – Definitions

“Mr. Julius Lau” means Mr. Lau Shu Yan, Julius, an Offeror Director and the chief executive officer and an executive director of LSD;

“Mr. Lam Bing Kwan” means Mr. Lam Bing Kwan, an independent non-executive director of LSG, LSD and Lai Fung;

“Mr. Lester Lam” means Mr. Lam Hau Yin, Lester, an Offeror Director, an executive director of LSG (and an alternate to Madam U as an executive director of LSG), an executive director of LSD, an executive director of eSun, the chief executive officer and an executive director of Lai Fung and Dr. Peter Lam’s son;

“Mr. Ronald Tham” means Mr. Tham Seng Yum, Ronald, an executive director of LSD and Lai Fung;

“Non-Connected eSun means, in respect of the eSun Disposal, which is a connected Shareholders” transaction of eSun subject to the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules, the eSun Shareholders other than (a) LSD, Transtrend and their respective LR associates and (b) any other eSun Shareholder who has a material interest in such connected transaction and will be required under the Listing Rules to abstain from voting on the resolution to be proposed at the special general meeting of eSun to approve such connected transaction. On the basis of their disclosures of interests in LSG, LSD, eSun and Lai Fung as at the Latest Practicable Date, Dr. Peter Lam, Mr. Lester Lam and their LR associates fall within (b) of this definition in respect of such connected transaction. For the avoidance of doubt, the Non-Connected eSun Shareholders include the Yu Shareholders;

“Non-Connected LSD means, in respect of the making of one or more of the LF Shareholders” Offers to any connected person of LSD which is a connected transaction of LSD subject to the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules (if there is any such connected transaction), the LSD Shareholders other than (a) such connected person and his LR associates and (b) any other LSD Shareholder who has a material interest in such connected transaction and will be required under the Listing Rules to abstain from voting on the resolution to be proposed at the general meeting of LSD to approve such connected transaction;

– 8 – Definitions

“Non-Connected LSG means, in respect of the making of one or more of the LF Shareholders” Offers to any connected person of LSG which is a connected transaction of LSG subject to the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules, the LSG Shareholders other than (a) such connected person and his LR associates and (b) any other LSG Shareholder who has a material interest in such connected transaction and will be required under the Listing Rules to abstain from voting on the resolution to be proposed at the general meeting of LSG to approve such connected transaction. On the basis of their disclosures of interests in LSG and Lai Fung as at the Latest Practicable Date, the making of the LF Share Offer to the Yu Shareholders is such connected transaction and the Yu Shareholders and their LR associates fall within (a) of this definition in respect of such connected transaction;

“Offeror” means Holy Unicorn Limited, a company incorporated in the British Virgin Islands with limited liability, being a wholly- owned subsidiary of LSD;

“Offeror Board” means the board of Offeror Directors;

“Offeror Concert Parties” means the persons who are acting in concert with the Offeror, as determined in accordance with the Takeovers Code (except for members of the HSBC Group which are exempt principal traders and/or exempt fund managers in their capacity as such, in each case recognised by the Executive as such for the purposes of the Takeovers Code), including, for the avoidance of doubt, (a) LSD, being the sole shareholder of the Offeror, (b) LSG, being a holding company of LSD, (c) Dr. Peter Lam, being their ultimate controlling shareholder and (d) eSun, being a subsidiary of LSD;

“Offeror Directors” means the directors of the Offeror;

“percentage ratio” has the meaning ascribed to it under the Listing Rules;

“PRC” means the People’s Republic of China (for the purpose of this Composite Document, excluding Hong Kong, Macau and Taiwan);

“public” has the meaning ascribed to it under the Listing Rules;

“Reassessed NAV” has the meaning ascribed to it in the Letter from the Lai Fung Independent Financial Adviser on page 61 of this Composite Document;

– 9 – Definitions

“Registrar” means Tricor Tengis Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong, the Hong Kong branch share registrar of the LF Shares;

“Relevant Period” means the period from 21 August 2019, being the date six months before the Announcement Date, up to and including the Latest Practicable Date;

“Remaining eSun Group” means eSun and its subsidiaries upon completion of the eSun Disposal;

“RMB” means Renminbi, the lawful currency of the PRC;

“SFC” means the Securities and Futures Commission;

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

“Share Option Schemes” means the share option schemes adopted by Lai Fung on 21 August 2003 (as amended on 8 August 2018) and on 18 December 2012, respectively;

“Stock Exchange” means The Stock Exchange of Hong Kong Limited;

“subsidiary” has the meaning ascribed to it under the Listing Rules;

“substantial shareholder” has the meaning ascribed to it under the Listing Rules;

“Takeovers Code” means the Hong Kong Code on Takeovers and Mergers;

“Transtrend” means Transtrend Holdings Limited, a company incorporated in Hong Kong with limited liability, being a wholly-owned subsidiary of LSD;

“United States”, “U.S.” or “USA” means the United States of America, its territories and possessions, any State of the United States and the District of Columbia;

“U.S. Business Day” means any day, other than Saturday, Sunday or a U.S. federal holiday, and consists of the time period from 12:01 a.m. through 12:00 midnight Eastern time;

“U.S. Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended;

– 10 – Definitions

“Yu Shareholders” means Mr. Yu Cheuk Yi and Ms. Yu Siu Yuk; and

“%” means per cent.

1. Except as otherwise specified, all times and dates contained in this Composite Document and the accompanying Form(s) of Acceptance refer to Hong Kong times and dates.

2. Certain amounts and percentage figures in this Composite Document have been subject to rounding adjustments.

3. Certain English translations of Chinese names or words or Chinese translations of English names or words in this Composite Document are included for the purposes of information and identification only and should not be regarded asan official English translation of such Chinese names or words or Chinese translation of such English names or words, respectively.

4. The singular includes the plural and vice versa, unless the context otherwise requires.

5. References to any appendix, paragraph and sub-paragraph are references to the appendices to, and paragraphs of, this Composite Document and any sub-paragraphs of them, respectively.

6. References to any statute or statutory provision include a statute or statutory provision which amends, consolidates or replaces the same whether before or after the date of this Composite Document.

7. Reference to one gender is a reference to all or any genders.

8. The English texts of this Composite Document and the accompanying Form(s) of Acceptance shall prevail over their respective Chinese texts for the purpose of interpretation.

– 11 – Letter from HSBC

24 April 2020

To the LF Offer Shareholders and the LF Optionholders

Dear Sir or Madam,

Reference is made to the Joint Announcement dated 21 February 2020 published by LSG, LSD, the Offeror, eSun and Lai Fung in respect of, among others, conditional voluntary general cash offers by HSBC on behalf of the Offeror, a wholly-owned subsidiary of LSD, to acquire all of the issued shares of Lai Fung (other than those already owned or agreed to be acquired by LSD, the Offeror or the other wholly-owned subsidiaries of LSD) and to cancel all the outstanding share options of Lai Fung.

This letter sets out, among other things, details of the terms of the LF Offers, the reasons for and benefits of the LF Offers, the intention of LSD with regard to the Lai Fung Group and information on LSD and the Offeror. Further details of the terms of the LF Offers are set out in “Appendix I — Further Terms of the LF Offers” to the Composite Document of which this letter forms part, and in the accompanying Form(s) of Acceptance. Terms used in this letter shall have the same meanings as those defined in the Composite Document unless the context otherwise requires.

The LF Offer Shareholders and the LF Optionholders are strongly advised to consider carefully the information contained in the “Letter from the Lai Fung Board”, the “Letter from the Lai Fung Independent Board Committee” and the “Letter from the Lai Fung Independent Financial Adviser”, the LF Option Offer Letter, the form of which is set out in the “Form of LF Option Offer Letter”, the accompanying Form(s) of Acceptance and the appendices which form part of the Composite Document.

1. INTRODUCTION TO THE LF OFFERS

– 12 – Letter from HSBC

For the avoidance of doubt, the LF Offer Shares include the LF Shares which are owned by the Offeror Concert Parties (other than those already owned or agreed to be acquired by LSD, the Offeror or the other wholly-owned subsidiaries of LSD), including the LF Shares owned by eSun.

2. THE LF SHARE OFFER

The LF Share Offer is being made by HSBC on behalf of the Offeror in compliance with the Takeovers Code on the basis set out below.

For each LF Offer Share...... HK$8.99 in cash

If any dividend and/or other distribution and/or other return of capital is announced, declared or paid in respect of the LF Shares at any time after the Announcement Date, the Offeror reserves the right to reduce the LF Share Offer Price by all or any part of the amount or value of such dividend, distribution and/or, as the case may be, return of capital, in which case any reference in the Joint Announcement, the Composite Document or any other announcement or document to the LF Share Offer Price will be deemed to be a reference to the LF Share Offer Price as so reduced (and the LF Option Offer Price shall be reduced accordingly). As at the Latest Practicable Date, there was no such dividend, distribution or other return of capital.

The LF Share Offer Price was determined after taking into account, among other things, (i) the historical trading prices of LF Shares as detailed in section 3 “LF Share Offer Price” below, in particular the average closing price of HK$8.68 per LF Share for the 180 trading days immediately prior to and including the Last Trading Date, over which the LF Share Offer Price represents a 3.57% premium approximately; (ii) the audited consolidated net asset value attributable to owners per LF Share of approximately HK$48.36 as at 31 July 2019 based on the total number of issued LF Shares as at 31 July 2019, to which the LF Share Offer Price represents a discount of 81.41% approximately, which is largely in line with the discounts resulting from the historical trading prices of LF Shares (the discount of the simple average closing price of LF Shares on the Stock Exchange (as obtained from Bloomberg) for Lai Fung’s five financial years ended 31 July 2019 to the net assets per LF Share as at the end of each such financial year was approximately 79.70%, 84.59%, 78.91%, 73.57% and 79.94% respectively); (iii) the low liquidity of the LF Shares (with an average daily trading volume of approximately 0.03 million shares or 0.01% of the issued share capital of Lai Fung during the one-year period ended on and including the Last Trading Date); (iv) the performance of the Hang Seng Index and volatility in the equity market amid the outbreak of the novel coronavirus (COVID-19) up to the Announcement Date; and (v) the decline in Lai Fung’s adjusted net profit attributable to owners of Lai Fung (excluding the effect of property revaluations) from HK$987.8 million for the year ended 31 July 2017 to HK$629.1 million for the year ended 31 July 2018 and to HK$263.7 million for the year ended 31 July 2019 despite the relatively steady turnover from the investment properties of Lai Fung.

Please refer to section 3 “The LF Share Offer Price” and section 17 “Reasons for and benefits of the LF Offers” of this “Letter from HSBC” for more detailed comparisons between the LF Share Offer Price and historical trading prices of LF Shares and historical discounts to net asset value attributable to owners per LF Share.

– 13 – Letter from HSBC

3. THE LF SHARE OFFER PRICE

The LF Share Offer Price of HK$8.99 per LF Offer Share under the LF Share Offer represents:

(a) a discount of approximately 7.61% to the closing price of HK$9.73 per LF Share as quoted on the Stock Exchange on the Last Trading Date;

(b) a discount of approximately 8.82% to the average closing price of HK$9.86 per LF Share, being the average closing price of LF Shares as quoted on the Stock Exchange for the 5 trading days immediately prior to and including the Last Trading Date;

(c) a discount of approximately 9.38% to the average closing price of HK$9.92 per LF Share, being the average closing price of LF Shares as quoted on the Stock Exchange for the 10 trading days immediately prior to and including the Last Trading Date;

(d) a discount of approximately 6.74% to the average closing price of HK$9.64 per LF Share, being the average closing price of LF Shares as quoted on the Stock Exchange for the 30 trading days immediately prior to and including the Last Trading Date;

(e) a discount of approximately 8.92% to the average closing price of HK$9.87 per LF Share, being the average closing price of LF Shares as quoted on the Stock Exchange for the 60 trading days immediately prior to and including the Last Trading Date;

(f) a premium of approximately 3.57% over the average closing price of HK$8.68 per LF Share, being the average closing price of LF Shares as quoted on the Stock Exchange for the 180 trading days immediately prior to and including the Last Trading Date;

(g) a premium of approximately 8.31% over the closing price of HK$8.30 per LF Share as quoted on the Stock Exchange on the Latest Practicable Date;

(h) a discount of approximately 81.41% to the audited consolidated net asset value attributable to owners per LF Share of approximately HK$48.36 as at 31 July 2019, based on the total number of issued LF Shares as at 31 July 2019;

(i) a discount of approximately 80.26% to the unaudited consolidated net asset value attributable to owners per LF Share of approximately HK$45.55 as at 31 January 2020, based on the total number of issued LF Shares as at 31 January 2020;

(j) a discount of approximately 85.13% to the Reassessed NAV per LF Share of approximately HK$60.44 as at 31 January 2020, based on the total number of issued LF Shares as at 31 January 2020; and

– 14 – Letter from HSBC

(k) a discount of approximately 84.96% to the Reassessed NAV per LF Share of approximately HK$59.79 as at 31 January 2020 based on the total number of issued LF Shares as at the Latest Practicable Date.

As shown in the audited consolidated statement of financial position as at 31 July 2019 and the unaudited consolidated statement of financial position as at 31 January 2020 of Lai Fung, a significant portion of Lai Fung’s assets consisted of property, plant and equipment, properties under development, investment properties and completed properties for sale. A valuation report on the property interests of the Lai Fung Group from an independent property valuer is in “Appendix III — Property Valuation of the Lai Fung Group” to the Composite Document pursuant to Rule 11 of the Takeovers Code. The value of those assets as stated in such consolidated statements of financial position or such property valuation report may or may not reflect their market value as at the date of the Composite Document.

4. HIGHEST AND LOWEST CLOSING PRICES OF LF SHARES

During the six-month period ended the Last Trading Date, the highest closing price of LF Shares as quoted on the Stock Exchange was HK$10.50 per LF Share on 11 February 2020 and the lowest closing price of LF Shares as quoted on the Stock Exchange was HK$6.48 per LF Share on 11 and 12 September 2019.

5. THE LF OPTION OFFER AND THE LF OPTION OFFER PRICE

As at the Latest Practicable Date, there were 11,124,526 LF Options (all of which vested on their respective dates of grant), each giving the LF Optionholder the right to subscribe for one new LF Share. The exercise of such LF Options in full would result in the issue of 11,124,526 new LF Shares, representing approximately 3.36% of the issued share capital of Lai Fung as at the Latest Practicable Date and approximately 3.25% of the issued share capital of Lai Fung as enlarged by the issue of such new LF Shares.

In accordance with Rule 13 of the Takeovers Code, HSBC, on behalf of the Offeror, is making an appropriate offer to all the LF Optionholders for the cancellation of every LF Option, whether vested or unvested, by way of the LF Option Offer.

– 15 – Letter from HSBC

Under the LF Option Offer, the Offeror is, in accordance with Rule 13 of the Takeovers Code, offering the LF Optionholders the LF Option Offer Price (which is the “see-through” price, being the LF Share Offer Price minus the exercise price of the relevant LF Option) in cash for the cancellation of each LF Option they hold, whether vested or unvested, provided that where the exercise price of any LF Option is equal to or greater than the LF Share Offer Price (such that the “see-through” price is zero or negative), the LF Option Offer Price is a nominal amount of HK$0.01 for every 100 LF Options (or, if lesser, any part thereof).

Number of LF Options as at the Latest Practicable LF Option Offer date (each carrying LF Option price per LF Share the right to subscribe exercise price (unless otherwise for one new exercise period of per LF Share indicated) LF Share) the LF Options (HK$) (HK$) (dd/mm/yyyy)

6.650 2.340 900,000 12/06/2012 to 11/06/2020

6.784 2.206 500,000 19/08/2019 to 18/08/2029

8.000 0.990 180,000 16/01/2015 to 15/01/2025

9.500 0.01 for every 100 220,000 26/07/2013 LF Options (or, to 25/07/2023 if lesser, any part thereof)

10.180 0.01 for every 100 580,000 22/01/2019 LF Options (or, to 21/01/2029 if lesser, any part thereof)

– 16 – Letter from HSBC

11.400 0.01 for every 100 8,294,526 18/01/2013 LF Options (or, to 17/01/2023 if lesser, any part thereof)

13.520 0.01 for every 100 450,000 19/01/2018 LF Options (or, to 18/01/2028 if lesser, any part thereof)

Further information on the LF Option Offer is set out in the LF Option Offer Letter to the LF Optionholders, which is being despatched on the same date as the despatch of the Composite Document.

If any LF Option is exercised in accordance with the terms of the relevant Share Option Scheme prior to the close of the LF Share Offer, any LF Shares issued as a result of such exercise will be subject to the LF Share Offer.

As Lai Fung is already a subsidiary of LSD, which wholly owns the Offeror, the LF Share Offer will not result in any change of control over Lai Fung under the terms of the Share Option Scheme adopted by Lai Fung on 21 August 2003 (as amended on 8 August 2018) and the Share Option Scheme adopted by Lai Fung on 18 December 2012. Accordingly, all LF Options shall remain valid and exercisable during their respective option periods in accordance with the terms of the relevant Share Option Scheme notwithstanding the LF Share Offer. Any unexercised LF Option will survive completion of the LF Offers provided that its option period will not expire before then.

6. condITIONS TO THE LF OFFERS

The LF Share Offer is subject to the fulfilment of the following Conditions:

(a) the approval:

(i) by the Independent LSD Shareholders of the LF Offers as a major acquisition of LSD; and

– 17 – Letter from HSBC

(ii) by the Non-Connected LSD Shareholders of the making of one or more of the LF Offers to any connected person of LSD which is a connected transaction of LSD subject to the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules (if there is any such connected transaction),

in each case, in accordance with the Listing Rules;

(b) the approval:

(i) by the Independent LSG Shareholders of the LF Offers as a major acquisition of LSG; and

(ii) by the Non-Connected LSG Shareholders of the making of one or more of the LF Offers to any connected person of LSG which is a connected transaction of LSG subject to the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules (if there is any such connected transaction),

in each case, in accordance with the Listing Rules;

(i) by the Independent eSun Shareholders as a very substantial disposal of eSun; and

(ii) by the Non-Connected eSun Shareholders as a connected transaction of eSun subject to the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules,

in each case, in accordance with the Listing Rules;

(d) valid acceptances of the LF Share Offer being received by 4:00 p.m. on the LF Share Offer Closing Date (and not, where permitted, withdrawn) in respect of such number of LF Shares which, together with LF Shares already (directly or indirectly) held or agreed to be acquired by LSD, the Offeror or any of the other wholly-owned subsidiaries of LSD, would result in LSD, the Offeror and the other wholly-owned subsidiaries of LSD holding in aggregate more than 50% of the voting rights in Lai Fung;

(e) valid acceptances of the LF Share Offer being received within four (4) months of the posting of the Composite Document (and not, where permitted, withdrawn) in respect of such number of LF Shares which (i) is not less than 90% of the LF Offer Shares and (ii) when aggregated with the total number of the Disinterested Shares (if any) purchased by the Offeror and the Offeror Concert Parties during the period of four (4) months after the posting of the Composite Document, would represent not less than 90% of the Disinterested Shares;

– 18 – Letter from HSBC

(f) the LF Shares remaining listed and traded on the Main Board of the Stock Exchange up to and including the LF Share Offer Closing Date (save for any temporary suspension of trading of the LF Shares pending any announcement in connection with the LF Offers) and no indication being received on or before the LF Share Offer Closing Date from the SFC and/or the Stock Exchange to the effect that the listing of the LF Shares on the Stock Exchange is or is likely to be withdrawn or suspended;

(g) no event having occurred which would make any of the LF Offers, the acquisition of any of the LF Offer Shares or the cancellation of the LF Options under the LF Offers void, unenforceable or illegal, would prohibit the implementation of any of the LF Offers or would impose any material conditions or obligations with respect to any of the LF Offers or their implementation in accordance with their respective terms;

(h) all necessary consents (including consents from the relevant lenders) in connection with the LF Offers and/or (in the event that the Offeror were to exercise the right (if any) to acquire compulsorily those LF Offer Shares not already owned or acquired by LSD, the Offeror or the other wholly-owned subsidiaries of LSD) the possible withdrawal of the listing of the LF Shares from the Stock Exchange which may be required under any existing contractual or other obligations of Lai Fung having been obtained and remaining in effect;

(i) no government, court or governmental, quasi-governmental, statutory or regulatory body or agency in Hong Kong, the Cayman Islands or any other jurisdiction having taken or instituted any action, proceeding, suit, investigation or enquiry (or enacted, made or proposed, and there not continuing to be outstanding, any statute, regulation, demand or order) that would make any of the LF Offers or their implementation in accordance with their respective terms void, unenforceable, illegal or impracticable (or which would impose any material conditions or obligations with respect to any of the LF Offers or their implementation in accordance with their respective terms);

(j) since the Announcement Date, there having been no material adverse change in the business, assets, financial or trading position or the prospects or conditions (whether operational, legal or otherwise) of the Lai Fung Group to an extent which is material in the context of the Lai Fung Group; and

(k) there having, since the Announcement Date, not been instituted any, and there remaining no outstanding, litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Lai Fung Group is a party (whether as plaintiff, defendant or otherwise), and no such proceedings having, since the Announcement Date, been threatened in writing against any such member (and no investigation by any government, court or governmental, quasi-governmental, statutory or regulatory body or agency in Hong Kong, the Cayman Islands or any other jurisdiction against or in respect of any such member or the business carried on by any such member having, since the Announcement Date, been threatened in writing, announced or instituted or remaining outstanding against or in respect of any such member), in each case, which is material and adverse in the context of the Lai Fung Group or in the context of the LF Offers.

– 19 – Letter from HSBC

On the basis of the disclosures of interests in LSD and Lai Fung as at the Latest Practicable Date, no connected transaction of LSD falls within paragraph (ii) of Condition (a).

On the basis of the disclosures of interests in LSG and Lai Fung as at the Latest Practicable Date, the making of the LF Share Offer to the Yu Shareholders is a connected transaction of LSG falling within paragraph (ii) of Condition (b).

The Offeror reserves the right to waive, in whole or in part, all or any of the Conditions (other than Conditions (a), (b), (c) and (d)). As at the Latest Practicable Date, the Offeror was not aware of any consent required under Condition (h) from any person who is not a lender.

As at the Latest Practicable Date, none of the Conditions had been fulfilled.

The LF Option Offer is subject to and conditional upon the LF Share Offer becoming or being declared unconditional in all respects.

Pursuant to Note 2 to Rule 30.1 of the Takeovers Code, the Offeror should not invoke any of the Conditions so as to cause the LF Offers to lapse unless the circumstances which give rise to the right to invoke such Condition are of material significance to the Offeror in the context of the LF Offers.

Pursuant to Rule 15.3 of the Takeovers Code, where the LF Offers become or are declared unconditional (whether as to acceptances or in all respects), they should remain open for acceptances for not less than fourteen (14) days thereafter.

Except with the consent of the Executive, all Conditions must be fulfilled (or, if permissible, waived) or the LF Offers must lapse within twenty-one (21) days of the first LF Share Offer Closing Date or of the date the LF Offers become or are declared unconditional as to acceptances, whichever is the later.

WARNING: The LF Offers are subject to the Conditions being fulfilled or waived. Accordingly, the LF Offers may or may not become unconditional. Shareholders and holders of options and other securities of and potential investors in LSG, LSD, eSun and Lai Fung should therefore exercise caution when dealing in the securities of LSG, LSD, eSun and Lai Fung. Persons who are in doubt as to the action they should take should consult their stockbroker, bank manager, solicitor or other professional advisers.

7. VALUE OF THE LF OFFERS

As at the Latest Practicable Date, there were (i) 331,033,443 LF Shares in issue, (ii) 331,015,933 LF Offer Shares and (iii) 11,124,526 LF Options (all of which vested on their respective dates of grant) entitling the LF Optionholders to subscribe for an aggregate of 11,124,526 LF Shares at an exercise price ranging from HK$6.650 to HK$13.520 per LF Share.

– 20 – Letter from HSBC

On the assumption that before the close of the LF Share Offer the number of LF Shares will not change (whether by way of any exercise of the LF Options or otherwise) and the number of LF Options will not change, the value of the LF Share Offer is approximately HK$2,975.8 million and the total amount required to satisfy the cancellation of all LF Options is approximately HK$3.4 million. On this basis, in aggregate, the LF Offers are valued at approximately HK$2,979.2 million.

On the assumption that before the close of the LF Share Offer no further LF Options will be granted and all of the LF Options will be exercised, Lai Fung will have to issue 11,124,526 new LF Shares, representing approximately 3.25% of the enlarged issued share capital of Lai Fung, upon such exercise of the LF Options. On this basis and on the assumption that the number of LF Shares will otherwise not change, there will be 342,140,459 LF Offer Shares (including the new LF Shares issued as a result of the exercise of the LF Options) and the value of the LF Share Offer will be approximately HK$3,075.8 million. In this case, no amount will be payable by the Offeror under the LF Option Offer.

8. poSSIBLE COMPULSORY ACQUISITION AND WITHDRAWAL OF LISTING OF LF SHARES

Subject to compliance with the other relevant requirements under Section 88 of the Companies Law, if the Offeror, within four (4) months of the posting of the Composite Document, has received valid acceptances in respect of not less than 90% of the LF Offer Shares, the Offeror will have the right under Section 88 of the Companies Law to acquire compulsorily those LF Offer Shares not already owned or acquired by LSD, the Offeror or the other wholly-owned subsidiaries of LSD. (For the avoidance of doubt, for the purposes of ascertaining whether the level of acceptances of the LF Share Offer reaches such prescribed threshold under Section 88 of the Companies Law, acceptances by the Offeror Concert Parties (other than LSD, the Offeror, the other wholly-owned subsidiaries or their respective nominees) will be included.)

Pursuant to Rule 2.11 of the Takeovers Code, except with the consent of the Executive, where the Offeror seeks to acquire or privatise Lai Fung by means of the LF Share Offer and the use of the compulsory acquisition right under the Companies Law, such right may only be exercised if, in addition to satisfying the requirements imposed by the Companies Law, acceptances of the LF Share Offer in respect of the Disinterested Shares and purchases of the Disinterested Shares made by the Offeror and the Offeror Concert Parties during the period of four (4) months after the posting of the Composite Document amount to not less than 90% of the Disinterested Shares.

– 21 – Letter from HSBC

If (a) the level of acceptances of the LF Share Offer reaches the prescribed threshold under Section 88 of the Companies Law so that the Offeror has the right to acquire compulsorily those LF Offer Shares not already owned or acquired by LSD, the Offeror or the other wholly-owned subsidiaries of LSD and (b) the Offeror is permitted under Rule 2.11 of the Takeovers Code to exercise such right, the Offeror may, but is not obliged to, exercise such right. If the Offeror does exercise such right and completes the compulsory acquisition, Lai Fung will become a wholly-owned subsidiary of LSD, an application will be made for the withdrawal of the listing of the LF Shares from the Stock Exchange pursuant to Rule 6.15 of the Listing Rules and a suspension of dealings in the LF Shares from the close of the LF Share Offer up to the withdrawal of listing of LF Shares from the Stock Exchange.

Pursuant to Rule 15.6 of the Takeovers Code, where the Offeror has stated in the Composite Document its intention to avail itself of any powers of compulsory acquisition, the LF Share Offer may not remain open for acceptance for more than four (4) months from the posting of the Composite Document unless the Offeror has by that time become entitled to exercise such right of compulsory acquisition available to it under the Companies Law, in which event the Offeror must do so without delay.

Reference is made to the announcement of Lai Fung dated 18 September 2019 relating to the shortfall in its public float arising from an increase in the Yu Shareholders’ holding of LF Shares. The Yu Shareholders became substantial shareholders and therefore core connected persons of Lai Fung as a result of such increase. On the basis of the Yu Shareholders’ latest disclosures of interests in Lai Fung, the public float of Lai Fung was approximately18.15 % as at the Latest Practicable Date, which is below the minimum prescribed by Rule 8.08(1)(a) of the Listing Rules (being 25%).

In the event that the LF Share Offer becomes unconditional in all respects and the Offeror does not effect the compulsory acquisition of the remaining LF Offer Shares, whether by reason of the level of acceptances of the LF Share Offer not reaching the prescribed thresholds under the Companies Law or the Takeovers Code or otherwise, the Offeror intends to continue the listing of the LF Shares on the Stock Exchange and will take appropriate steps to ensure that any shortfall in the public float of Lai Fung as a result of the LF Offers is restored after the close of the LF Offers as long as Lai Fung remains listed on the Stock Exchange.

In the event that the LF Share Offer does not become unconditional in all respects, Lai Fung will continue to consider steps to restore its public float in accordance with the Listing Rules. Further announcement(s) will be made by Lai Fung on the restoration of public float as and when appropriate.

– 22 – Letter from HSBC

The Stock Exchange has stated that if, upon the close of the LF Share Offer, less than the minimum prescribed percentage applicable to Lai Fung, being 25% of the issued LF Shares, are held by the public, or if the Stock Exchange believes that:

— a false market exists or may exist in the trading of the LF Shares; or

— that there are insufficient LF Shares in public hands to maintain an orderly market,

then the Stock Exchange will consider exercising its discretion to suspend dealings in the LF Shares.

The Offeror Directors have jointly and severally undertaken to the Stock Exchange that, in the event the LF Share Offer becomes unconditional in all respects and the Offeror does not effect the compulsory acquisition of the remaining LF Offer Shares, they will take appropriate steps to ensure that any shortfall in the public float of Lai Fung as a result of the LF Offers is restored after the close of the LF Offers as long as Lai Fung remains listed on the Stock Exchange.

9. LAI FUNG INDEPENDENT BOARD COMMITTEE AND LAI FUNG INDEPENDENT FINANCIAL ADVISER

According to the “Letter from the Lai Fung Board”, the Lai Fung Board has established the Lai Fung Independent Board Committee, comprising Mr. Lucas Ignatius Loh Jen Yuh, Mr. Puah Tze Shyang, Mr. Ku Moon Lun, Mr. Law Kin Ho, Mr. Mak Wing Sum, Alvin and Mr. Shek Lai Him, Abraham, to make a recommendation to the Disinterested Shareholders and the LF Optionholders as to whether the LF Offers are, or are not, fair and reasonable and as to acceptance.

Pursuant to Rule 2.8 of the Takeovers Code, the Lai Fung Independent Board Committee is required to comprise all the non-executive Lai Fung Directors who have no direct or indirect interest in the LF Offers other than as holders of the LF Shares and/or the LF Options. According to the “Letter from the Lai Fung Board”, Mr. Lam Bing Kwan, an independent non- executive Lai Fung Director, is also an independent non-executive director of LSG and LSD, both of which are holding companies of the Offeror. Accordingly, he is regarded as being interested in the LF Offers for the purposes of Rule 2.8 of the Takeovers Code and is not a member of the Lai Fung Independent Board Committee. All of the other non-executive Lai Fung Directors are members of the Lai Fung Independent Board Committee.

According to the “Letter from the Lai Fung Board”, Altus Capital, with the approval of the Lai Fung Independent Board Committee, has been appointed as the Lai Fung Independent Financial Adviser to advise the Lai Fung Independent Board Committee in connection with the LF Offers.

– 23 – Letter from HSBC

10. SHAREHOLDING STRUCTURE OF LAI FUNG

According to “Appendix V — General Information of Lai Fung”, as at the Latest Practicable Date, the authorised share capital of Lai Fung was HK$2,000,000,000 divided into 400,000,000 LF Shares and the issued share capital of Lai Fung was HK$1,655,167,215 divided into 331,033,443 LF Shares. There were no other classes of shares of Lai Fung in issue.

The following is a simplified structure chart summarising the shareholding relationship among LSG, LSD, the Offeror, eSun and Lai Fung as at the Latest Practicable Date:

LSG

56.30%

LSD

100% 100%

Transtrend The Offeror

74.62%

0.01% eSun

50.99%

Lai Fung

– 24 – Letter from HSBC

The table below sets out the shareholding structure of Lai Fung (1) as at the Latest Practicable Date and (2) immediately after completion of the LF Offers and the Offeror’s compulsory acquisition of the remaining LF Offer Shares in the event that (a) the level of acceptances of the LF Share Offer reaches the prescribed thresholds under the Companies Law and Rule 2.11 of the Takeovers Code and (b) the Offeror exercises the right of compulsory acquisition (on the assumption that there will be no change in the shareholding structure of Lai Fung (whether by way of any exercise of the LF Options or otherwise) before such completion):

Immediately after completion of the LF Offers and the Offeror’s compulsory acquisition As at the Latest Practicable Date of the remaining LF Offer Shares As a As a percentage of the percentage of the issued share capital issued share capital No. of LF Shares of Lai Fung No. of LF Shares of Lai Fung

Offeror 0 0% 331,015,933 99.99%

Offeror Concert Party whose LF Shares do not form part of the LF Offer Shares or the Disinterested Shares: — Transtrend (other than through eSun) 17,510 0.01% 17,510 0.01%

Offeror Concert Parties whose LF Shares form part of the LF Offer Shares and do not form part of the Disinterested Shares: — eSun 168,792,467 50.99% 0 0% — Mr. FA Chew (Note 1) 709,591 0.21% 0 0% — Mr. Julius Lau (Note 2) 235 0.00007% 0 0%

Aggregate number of LF Shares 169,519,803 51.21% 331,033,443 100% held by the Offeror and the Offeror Concert Parties

Total number of Disinterested Shares 161,513,640 48.79% 0 0%

Total number of LF Offer Shares 331,015,933 99.99% — —

Total number of LF Shares 331,033,443 100% 331,033,443 100%

– 25 – Letter from HSBC

Notes:

1. Mr. FA Chew, who is an Offeror Director, a deputy chairman and an executive director of LSG and the deputy chairman and an executive director of LSD, is acting in concert with the Offeror. As at the Latest Practicable Date, Mr. FA Chew was interested in 709,591 LF Shares and 900,000 LF Options (other than through his interests in LSG and LSD) with the exercise price of HK$6.650 per LF Share and the exercise period from 12 June 2012 to 11 June 2020.

2. Mr. Julius Lau, who is an Offeror Director and the chief executive officer and an executive director of LSD, is acting in concert with the Offeror. As at the Latest Practicable Date, Mr. Julius Lau was interested in 235 LF Shares and 965,754 LF Options (other than through his interests in LSD) with the exercise price of HK$11.400 per LF Share and the exercise period from 18 January 2013 to 17 January 2023.

The table below sets out the shareholding structure of Lai Fung (1) as at the Latest Practicable Date; (2) as at the Latest Practicable Date had all the LF Options been exercised on or before the Latest Practicable Date; and (3) immediately after completion of the LF Offers and the Offeror’s compulsory acquisition of the remaining LF Offer Shares in the event that (a) the level of acceptances of the LF Share Offer reaches the prescribed thresholds under the Companies Law and Rule 2.11 of the Takeovers Code and (b) the Offeror exercises the right of compulsory acquisition (on the assumption that no further LF Options will be granted after the Latest Practicable Date, that all of the LF Options will be exercised after the Latest Practicable Date but before the close of the LF Share Offer and that there will be no other change in the shareholding structure of Lai Fung before such completion):

– 26 – Letter from HSBC

As at the Latest Immediately after completion Practicable Date had of the LF Offers and all the LF Options been the Offeror’s compulsory As at the exercised on or before the acquisition of the remaining Latest Practicable Date Latest Practicable Date LF Offer Shares As a As a As a percentage of percentage of percentage of the issued the issued the issued No. of share capital No. of share capital No. of share capital LF Shares of Lai Fung LF Shares of Lai Fung LF Shares of Lai Fung

Offeror 0 0% 0 0% 342,140,459 99.99%

Offeror Concert Party whose LF Shares do not form part of the LF Offer Shares or the Disinterested Shares — Transtrend (other than through eSun) 17,510 0.01% 17,510 0.01% 17,510 0.01%

Offeror Concert Parties whose LF Shares form part of the LF Offer Shares and do not form part of the Disinterested Shares: — eSun 168,792,467 50.99% 168,792,467 49.33% 0 0% — Dr. Peter Lam (Note 1) 0 0% 321,918 0.09% 0 0% — Mr. Lester Lam (Note 2) 0 0% 3,219,182 0.94% 0 0% — Mr. FA Chew (Note 3) 709,591 0.21% 1,609,591 0.47% 0 0% — Mr. Julius Lau (Note 4) 235 0.00007% 965,989 0.28% 0 0% — Mr. Ronald Tham (Note 5) 0 0% 500,000 0.15% 0 0%

Aggregate number of LF Shares 169,519,803 51.21% 175,426,657 51.27% 342,157,969 100% held by the Offeror and the offeror Concert Parties

Total number of Disinterested Shares 161,513,640 48.79% 166,731,312 48.73% 0 0%

Total number of LF Shares 331,033,443 100% 342,157,969 100% 342,157,969 100%

Total number of LF Offer Shares 331,015,933 99.99% 342,140,459 99.99% — —

– 27 – Letter from HSBC

Notes:

1. Dr. Peter Lam, who is an Offeror Director, a deputy chairman and an executive director of LSG, the chairman and an executive director of LSD and the ultimate controlling shareholder of LSG, LSD and the Offeror, is acting in concert with the Offeror. As at the Latest Practicable Date, Dr. Peter Lam was not interested in any LF Shares and was interested in 321,918 LF Options (other than through his interests in LSG, LSD and eSun) with the exercise price of HK$11.400 per LF Share and the exercise period from 18 January 2013 to 17 January 2023.

2. Mr. Lester Lam, who is an Offeror Director, an executive director of LSG (and an alternate to Madam U as an executive director of LSG), an executive director of LSD and Dr. Peter Lam’s son, is acting in concert with the Offeror. As at the Latest Practicable Date, Mr. Lester Lam was not interested in any LF Shares and was interested in 3,219,182 LF Options (other than through his interests in LSG, LSD and eSun) with the exercise price of HK$11.400 per LF Share and the exercise period from 18 January 2013 to 17 January 2023.

3. Mr. FA Chew, who is an Offeror Director, a deputy chairman and an executive director of LSG and the deputy chairman and an executive director of LSD, is acting in concert with the Offeror. As at the Latest Practicable Date, Mr. FA Chew was interested in 709,591 LF Shares and 900,000 LF Options (other than through his interests in LSG and LSD) with the exercise price of HK$6.650 per LF Share and the exercise period from 12 June 2012 to 11 June 2020.

4. Mr. Julius Lau, who is an Offeror Director and the chief executive officer and an executive director of LSD, is acting in concert with the Offeror. As at the Latest Practicable Date, Mr. Julius Lau was interested in 235 LF Shares and 965,754 LF Options (other than through his interests in LSD) with the exercise price of HK$11.400 per LF Share and the exercise period from 18 January 2013 to 17 January 2023.

5. Mr. Ronald Tham, who is an executive director of LSD, is acting in concert with the Offeror. As at the Latest Practicable Date, Mr. Ronald Tham was not interested in any LF Shares and was interested in 500,000 LF Options (other than through his interests in LSD) with the exercise price of HK$6.784 per LF Share and the exercise period from 19 August 2019 to 18 August 2029.

11. eFFECT OF ACCEPTING THE LF SHARE OFFER

The LF Share Offer is subject to the term that acceptance of the LF Share Offer by any person constitutes a warranty by such person to the Offeror that the LF Shares sold by such person under the LF Share Offer are sold free from all Encumbrances and together with all rights attaching to them as at the LF Share Offer Closing Date or subsequently becoming attached to them, including the right to receive all dividends and distributions, if any, declared, made or paid on or after the LF Share Offer Closing Date.

– 28 – Letter from HSBC

12. HONG KONG STAMP DUTY

Seller’s ad valorem stamp duty at a rate of 0.1% of the market value of the LF Offer Shares or the consideration payable by the Offeror in respect of the relevant acceptances of the LF Share Offer, whichever is higher (rounded up to the nearest HK$1.00), will be deducted from the amount payable to the relevant holder of LF Offer Shares on acceptance of the LF Share Offer. The Offeror will bear its own portion of buyer’s ad valorem stamp duty at the rate of 0.1% of the market value of the LF Offer Shares or the consideration payable by the Offeror in respect of the relevant acceptances of the LF Share Offer, whichever is higher (rounded up to the nearest HK$1.00) and will be responsible to account to the Stamp Office of Hong Kong for all the stamp duty payable for the sale and purchase of the LF Shares which are validly tendered for acceptance under the LF Share Offer. No stamp duty is payable on the cancellation of any LF Option.

13. oVERSEAS LF SHAREHOLDERS AND LF OPTIONHOLDERS

The making of the LF Offers to LF Shareholders or, as the case may be, LF Optionholders who, in either case, are citizens, residents or nationals of jurisdictions outside Hong Kong may be subject to the laws or regulations of the relevant jurisdictions. The making of the LF Offers to such LF Shareholders and LF Optionholders and their acceptances of the LF Offers may be prohibited or affected by the laws or regulations of the relevant jurisdictions and it is the responsibility of each of such LF Shareholders and LF Optionholders who wishes to accept the LF Offers to satisfy himself/herself/itself as to the full observance of the laws and regulations of the relevant jurisdiction in connection therewith, including any requirement for any governmental, exchange control or other consents, any filing and registration requirements, any necessary formalities, any legal or regulatory requirements and any requirement for the payment by the accepting LF Shareholders or, as the case may be, LF Optionholders of any transfer or other taxes for which such accepting LF Shareholders or LF Optionholders are liable in respect of their acceptances.

Any acceptance of the LF Offers by any LF Shareholder or LF Optionholder will be deemed to constitute a representation and warranty from such LF Shareholder or, as the case may be, LF Optionholder to the Offeror and Lai Fung that all the laws and regulations of the relevant jurisdictions have been complied with and that the LF Share Offer can be accepted by such LF Shareholder, or, as the case may be, the LF Option Offer can be accepted by such LF Optionholder, lawfully under the laws and regulations of the relevant jurisdictions. LF Shareholders and LF Optionholders should consult their professional advisers if in doubt.

14. SETTLEMENT OF CONSIDERATION

Settlement of the consideration in respect of an acceptance of the LF Offers will be made as soon as possible and in any event within seven (7) Business Days of (i) the date of receipt of the complete and valid acceptance or (ii) the date on which the LF Offers become or are declared unconditional in all respects, whichever is the later.

– 29 – Letter from HSBC

15. deaLINGS AND INTERESTS IN LF SHARES AND DERIVATIVES OF LAI FUNG AND OTHER ARRANGEMENT

As at the Latest Practicable Date, the Offeror and the Offeror Concert Parties held 169,519,803 LF Shares in aggregate, representing approximately 51.21% of the total issued share capital of Lai Fung. (Please refer to section 10 “Shareholding structure of Lai Fung” in this “Letter from HSBC”.)

As at the Latest Practicable Date, the following Offeror Concert Parties held LF Options:

LF Option Relationship with the Offeror or Number of exercise price Exercise Name its holding companies LF Options per LF Share period (HK$) (dd/mm/yyyy)

Dr. Peter Lam Offeror Director, a deputy chairman and an executive 321,918 11.400 18/01/2013- director of LSG, the chairman and an executive 17/01/2023 director of LSD and the ultimate controlling shareholder of LSG, LSD and the Offeror

Mr. Lester Lam Offeror Director, an executive director of LSG 3,219,182 11.400 18/01/2013- (and an alternate to Madam U as an executive director 17/01/2023 of LSG), an executive director of LSD and Dr. Peter Lam’s son

Mr. FA Chew Offeror Director, a deputy chairman and an executive 900,000 6.650 12/06/2012- director of LSG and the deputy chairman and 11/06/2020 an executive director of LSD

Mr. Julius Lau Offeror Director and the chief executive officer and 965,754 11.400 18/01/2013- an executive director of LSD 17/01/2023

Mr. Ronald Tham an executive director of LSD 500,000 6.784 19/08/2019- 18/08/2029

Save as aforesaid, as at the Latest Practicable Date, neither the Offeror nor the Offeror Concert Parties held, controlled or had direction over any LF Shares or held any convertible securities, warrants, options or derivatives in respect of the LF Shares.

– 30 – Letter from HSBC

16. INFORMATION ON LSD AND THE OFFEROR

LSD is a company incorporated in Hong Kong with limited liability. The LSD Group is principally engaged in property investment, property development, investment in and operation of hotels and restaurants, media and entertainment, music production and distribution, films, video format products and television programmes production and distribution, cinema operation, cultural, leisure, entertainment and related facilities and investment holding.

The Offeror is a company incorporated in the British Virgin Islands with limited liability and is a wholly-owned subsidiary of LSD. The Offeror is engaged in investment holding.

As at the Latest Practicable Date, (i) LSG was interested in approximately 56.30% of the issued share capital of LSD and (ii) Dr. Peter Lam was interested in approximately 42.10% of the issued share capital of LSG.

17. reaSONS FOR AND BENEFITS OF THE LF OFFERS

The following sets out the Offeror’s reasons for the LF Offers and the benefits of the LF Offers for LSG and LSD and for eSun and the holders of the LF Offer Shares (as considered by the Offeror):

For LSD and LSG

Streamlining of the corporate structure of the LSD Group

The principal activities of the LSD Group include, among other activities, property investment, property development and investment in and operation of hotels (the “Property Businesses”). (Please refer to section 16 “Information on LSD and the Offeror” in this “Letter from HSBC” for further details of the LSD Group’s principal activities.)

Currently the Property Businesses are carried out both directly by LSD (in respect of properties in Hong Kong and overseas properties) and indirectly through the Lai Fung Group (in respect of properties in the PRC). Upon completion of the LF Offers, the Property Businesses will be directly aligned within the LSD Group.

Additionally, acceptance of the LF Share Offer by eSun, which owned an approximate 50.99% stake in Lai Fung as at the Latest Practicable Date, will enable the Remaining eSun Group to position itself as a pure-play cinema, media and entertainment operator and will provide eSun with the funding it needs to accelerate the development of these operations.

LSG, as the holding company of LSD, will in turn benefit from the enhancements to the operations and performance of the LSD Group. LSG itself is also engaged in investment property business in Hong Kong.

– 31 – Letter from HSBC

(a) Greater business coherence

The enhanced alignment within the LSD Group of the Property Businesses and, upon acceptance of the LF Share Offer by eSun, delineation of the cinema, media and entertainment businesses of the Remaining eSun Group will enable the performance of these businesses and the members of the LSD Group operating them to be better assessed as separate business lines and operators. It will facilitate investors to apply different valuation methodologies to the two business lines based on their respective earnings, cash flow and net asset value profiles as appropriate.

Acceptance of the LF Share Offer by the eSun Group and the transformation of the Remaining eSun Group into a pure-play cinema, media and entertainment business operator will also provide investors with clearer investment choices, allowing the existing investor base of the LSD Group to align itself better to the businesses of the LSD Group and providing the potential to attract new investors looking for specific investment opportunities.

(b) Enhanced management focus and resource allocation

Clearer alignment and delineation of the businesses of the LSD Group will enable management at the different group companies to focus on, and devote their time to, specific business lines. This will enable clearer assessment of management performance, and the rewarding of management, based on the performance of the specific business lines and enable better allocation of resources to such business lines.

Lai Fung will remain a subsidiary of LSD and continue to be consolidated in the financial statements of LSD (which in turn is consolidated in the financial statements of LSG) upon completion of the LF Offers. Depending on the level of acceptances of the LF Share Offer, LSD’s effective interest in Lai Fung may increase as a result of the LF Offers, which will reduce the non-controlling interest in Lai Fung in the financial statements of LSD (which, as a subsidiary of LSG, will continue to be consolidated in the financial statements of LSG). Completion of the LF Offers will not change the presentation of the property businesses of Lai Fung in the financial statements of LSG or LSD.

Other than the pro rata financing to the project company for Phase I of the Novotown project in Hengqin (which is 80% owned by the Lai Fung Group and 20% owned by LSD) since September 2019, LSD has not provided any financing to Lai Fung during the financial year ended 31 July 2019 and the 6 months ended 31 January 2020. Completion of the LF Offers will not change such pro rata financing.

– 32 – Letter from HSBC

For eSun

Transform the Remaining eSun Group into a pure-play cinema, media and entertainment company and provide it with funding to accelerate growth of these businesses

Acceptance of the LF Share Offer by eSun will transform the Remaining eSun Group into a pure-play cinema, media and entertainment company and provide it with the funding to reinforce its industry position and accelerate growth in its businesses of the development, operation of and investment in media and entertainment, music production and distribution, the investment in and production and distribution of television programmes, films and video format products and cinema operation.

Through its indirect non-wholly-owned subsidiary, Intercontinental Group Holdings Limited (“IGHL”), which is engaged in the operation of cinemas in Hong Kong, the distribution of films, DVDs, Blu-ray discs and video games, the provision of advertising services and the trading of merchandises and gaming products, the eSun Group is one of the leading film and video distribution companies in Hong Kong, releasing around 30 films every year and distributing a variety of video products. It is also one of the leading multiplex cinema operators in Hong Kong, operating a total of 13 cinemas in Hong Kong and the PRC. For the year ended 31 July 2019, the eSun Group’s cinema operation had a market share of 20.09% of the total box office takings of Hong Kong and it was the second largest cinema operator in Hong Kong in terms of total number of cinemas, box office sales and market share according to Hong Kong Box Office Limited, an independent organisation established to report on the daily Hong Kong box office revenue, details of latest movies and box office data analysis. In addition, through its indirect non-wholly-owned subsidiary Media Asia Group Holdings Limited (Stock Code: 8075), the eSun Group is involved in film production and distribution; organisation, management and production of concerts and live performances; artiste management; production and distribution of television programmes; music production and publishing; licensing of media contents and the provision of consultancy services in planning and management of cultural, entertainment and live performance projects.

While the eSun Board notes in the eSun Circular the challenges brought about by COVID-19 and the uncertainties as to the period for which the impacts of these challenges may last and the difficulty to assess such length of time and the eventual impact on the eSun Group’s business operations and financial performance at this stage, the eSun Board states in the eSun Circular that it is generally confident about the outlook for the media and entertainment industry and its media and entertainment businesses in the long run on the bases set out below:

(a) the eSun Group has continuously released albums and increased its music licensing revenue and has continuously expanded its television drama production and film production business with its strong artiste management team and a sizeable number of talents, which contributed to the modest segmental profit generated by the eSun Group’s media and entertainment business in recent years;

– 33 – Letter from HSBC

(b) the media and entertainment industry has been generally recession resistant and demand for entertainment is expected to sustain as a result of the growing middle class and rising per capita income in Hong Kong and the PRC. The eSun Group’s management is of the view that the business model of the media and entertainment businesses of the eSun Group and the industry outlook for eSun’s operations are favourable in the long run, and will generate stable future income streams for eSun; and

(c) the growing PRC market is believed to present significant business development and expansion opportunities for Hong Kong media and entertainment business operators including the eSun Group.

It is stated in the eSun Circular that, in recent years, the eSun Group has continued to invest in its film production and distribution and cinema operation businesses with a view to further solidifying its industry positioning and to capture the opportunities of the entertainment market in Hong Kong and the PRC as they might arise, so as to enhance and expand its media and entertainment businesses in Hong Kong and the PRC. It is however stated in the eSun Circular that, in view of the challenges brought about by the social and pandemic events to the industry, the uncertainties as to the period for which the impacts of these challenges may last and the difficulty for eSun to assess such length of time and the eventual impact on eSun Group’s business operations and financial performance at this stage, in the short term eSun will be cautious in pursuing aggressive business plans to accelerate growth of its fully-integrated media and entertainment platform but will stay alert and prepared to capture new opportunities when market activities return.

On the basis of the number of LF Shares owned by eSun as at the Latest Practicable Date, if the resolutions to be proposed at the special general meeting of eSun for approving the eSun Disposal are passed by the Independent eSun Shareholders and the Non-Connected eSun Shareholders, acceptance of the LF Share Offer by eSun will (subject to the LF Offers becoming unconditional in all respects) provide it with gross proceeds of approximately HK$1,517.4 million.

It is also stated in the eSun Circular that, as at the Latest Practicable Date, eSun was contemplating to utilise such proceeds in the manner set out below, subject to the cautious approach which eSun would continue to adopt in pursuing its business plans for developing the Remaining eSun Group into a pure-play cinema, media and entertainment company, and more importantly, subject to the overriding principle that such use of proceeds being in the interests of eSun and eSun Shareholders as a whole at the relevant time of utilisation:

(a) HK$250 million (representing approximately 16.5% of the gross proceeds of the eSun Disposal) for the repayment of shareholder loans of HK$250 million granted by LSD (and through its subsidiaries) to the Remaining eSun Group. As at the Latest Practicable Date, these shareholder loans of HK$200 million and HK$50 million are due within three months and in 2021, respectively;

(b) HK$180 million (representing approximately 11.9% of the gross proceeds of the eSun Disposal) for repayment of bank loans;

– 34 – Letter from HSBC

(c) HK$246 million (representing approximately 16.2% of the gross proceeds of the eSun Disposal) for the development and enhancement of eSun’s cinema operations. The Remaining eSun Group intends to continue to fund the operations of its existing cinemas, upgrading the facilities of its existing cinemas and seek to acquire new cinema sites to maintain and enhance its market share at appropriate time(s), subject to the then market conditions and circumstances of the media and entertainment industry. Such continuous investment is expected to be essential to the Remaining eSun Group’s strategy of positioning itself as one of the leading cinema operators in Hong Kong by securing cinemas sites in the relevant areas and not losing prime locations to its competitors in the long run. For the purpose of the long-term growth and development of the Remaining eSun Group’s business, such continuous expansion is also expected to create cross-segment synergies for the Remaining eSun Group’s film production and distribution segments since film producers consider distributors with cinema operations more favourably and the box office performance of a film being distributed is to an extent dependent on the number of cinemas it runs in.

If the eSun Disposal is not completed, it is currently expected that the eSun Group will be capable of financing the above funding requirement of its existing cinemas with its internal resources, the eSun Group’s presently available banking facilities and other borrowings and the expected refinancing of certain bank loans and other borrowings of the eSun Group;

(d) HK$670 million (representing approximately 44.2% of the gross proceeds of the eSun Disposal) for film and TV production and distribution and media and entertainment businesses. In line with eSun’s cautious approach in developing the Remaining eSun Group’s business, the Remaining eSun Group intends to invest prudently in the production of films and to adopt effective risk management approaches such as using joint ventures for producing larger budget films. Subject to the then market conditions and circumstances of the film industry, eSun also intends to develop its film distribution business, which already includes an output agreement with Storyteller Distribution Co., LLC (trading as “Amblin Partners”), which is a production company headquartered in the United States, which has granted eSun, for a term of two years expiring on 31 December 2020, the exclusive distribution rights for up to six motion pictures produced by Amblin Partners in Hong Kong and Macau each year. The Remaining eSun Group has in recent years expanded activities in production and investments in quality TV drama series in line with the continued strong demand for good programmes from internet platforms and TV stations in the PRC. A 52-episode romance drama series “New Horizon”, starring Zheng Kai and Chen Chiao-en, is in the post-production stage and projects under development include a 20-episode modern-day drama series namely “Who Sell Bricks in Hong Kong” tailor-made for ViuTV, featuring Ng Siu Hin, Fish Liew, Wu Tze Tung and Patrick Tam. The Remaining eSun Group is in discussion with various Chinese and overseas portals and video websites for new project development. The Remaining eSun Group believes that talent management is an instrumental part of its media and entertainment businesses and will continue to nurture new talented artistes. In October 2019, a new project called “Kre8 Music Lab” was launched to actively scout for new talented music artistes and successful candidates will be trained with a view to

– 35 – Letter from HSBC becoming artistes managed by the Remaining eSun Group. Such project provided an opportunity for the Remaining eSun Group to grow its pool of artistes organically and reduce costs associated with signing established artistes. The Remaining eSun Group has in recent years successfully produced and promoted a large number of concerts in Hong Kong and the PRC performed by prominent local, Asian and international artistes and will continue to work with prominent local and Asian artistes for concert promotion. Also, the Remaining eSun Group intends to continue to broaden the channels for the distribution of its music products and expects to increase its music product licensing revenue through new media distribution.

As at the Latest Practicable Date, assuming that COVID-19 does not have an unforeseen prolonged impact on the eSun Group and the film and TV production and distribution and media and entertainment industries, it is expected that approximately HK$670 million will be required for the further development in these areas. However, as announced by the Film Services Office (“FSO”), an organisation under the Commerce and Economic Development Bureau, for the protection of public health and filming crews, where a filming crew considers it of absolute necessity to conduct location filming involving a gathering of more than four persons, a “no-objection letter” must first be applied for and granted by the FSO, and the filming crew should also have notified and obtained the necessary consent(s) from other relevant government authorities before the location filming takes place. For the purpose of the application of the “no-objection letter”, if the public place(s) and timing(s) for the location filming would attract crowds, it should be justified to the FSO’s satisfaction that, among others, the location filming at that place/time is necessary, and a practical crowd control proposal should be submitted to the FSO for approval. According to the FSO’s website, the above measures taken by the FSO continued to be effective as at the Latest Practicable Date. As stated in the eSun Circular, eSun considers that these measures have created burdens for the eSun Group’s film and TV productions, and given the time required for the application of the FSO’s “no-objection letter” for location filming, the schedules of the eSun Group’s existing and proposed film and TV production projects may be substantially delayed. As at the Latest Practicable Date, it remained uncertain for how long the above measures taken by the FSO in respect of location filming will continue to be effective. In view of such uncertainties and the uncertainties on the ultimate and eventual impact of the abovementioned social and pandemic events on the eSun Group and the film and TV production and distribution and media and entertainment industries and the difficulties for eSun to assess such impact at current stage, and given eSun’s intention is to use and allocate proceeds from the eSun Disposal to the implementation of the above development plans only if such use of proceeds is considered to be in the interests of the eSun and eSun Shareholders as a whole at the relevant time of utilisation, the eSun Directors considered that it would be impracticable for eSun to propose a meaningful expected timeline on the development of these projects and on the allocation of the proceeds from the eSun Disposal to these projects as at the Latest Practicable Date. If the eSun Disposal is approved by Independent eSun Shareholders and Non-Connected eSun Shareholders at the special general meeting of eSun in respect of the eSun Disposal and eSun accordingly accepts the LF Share Offer and receives the proceeds from the eSun Disposal, eSun will disclose the progress of the usage of such proceeds in its annual report; and

– 36 – Letter from HSBC

(e) HK$171.4 million (representing approximately 11.2% of the gross proceeds of the eSun Disposal) to maintain sufficient working capital for the operations of the Remaining eSun Group disclosed above and for general corporate purposes.

Given the expansion and business plans as stated above, as at the Latest Practicable Date, save for the Laisun Creative Culture Subscription Agreement (details of which were disclosed in the joint announcement of LSG, LSD, eSun and Lai Fung dated 19 January 2020), eSun did not have any intention, and had not entered into any agreement, arrangement or understanding, to acquire or develop any new business or to dispose of or downsize the existing businesses or material operating assets of eSun after the eSun Disposal.

For the holders of the LF Offer Shares

An opportunity to realise value for the LF Offer Shareholders

The LF Share Offer offers the LF Offer Shareholders the opportunity to realise their investments in the LF Shares, which have consistently suffered from low levels of liquidity, particularly in light of the recent volatility in the equity market and uncertainties around the economy amid the outbreak of COVID-19.

(a) As compared to historical discount to NAV

The LF Share Offer Price represents (1) a discount of approximately 81.41% to the audited consolidated net asset value attributable to owners per LF Share of approximately HK$48.36 as at 31 July 2019, based on the total number of issued LF Shares and the consolidated net assets attributable to owners of Lai Fung as at 31 July 2019; (2) a discount of approximately 80.26% to the unaudited consolidated net asset value attributable to owners per LF Share of approximately HK$45.55 as at 31 January 2020, based on the total number of issued LF Shares and the consolidated net assets attributable to owners of Lai Fung as at 31 January 2020; (3) a discount of approximately 85.13% to the Reassessed NAV per LF Share of approximately HK$60.44 as at 31 January 2020, based on the total number of issued LF Shares as at 31 January 2020; and (4) a discount of approximately 84.96% to the Reassessed NAV per LF Share of approximately HK$59.79 as at 31 January 2020, based on the total number of issued LF Shares as at the Latest Practicable Date. Such discounts are largely in line with those resulting from the historical trading prices of LF Shares. The discount of the simple average closing price of LF Shares on the Stock Exchange (as obtained from Bloomberg) for Lai Fung’s five financial years ended 31 July 2019 and the six months ended 31 January 2020 to the net assets per LF Share as at the end of each such financial year was approximately 79.70%, 84.59%, 78.91%, 73.57%, 79.94% and 81.07%, respectively.

– 37 – Letter from HSBC

(b) In light of the low liquidity of the LF Shares

In light of the low liquidity of the LF Shares (with an average daily trading volume of approximately 0.03 million shares or 0.01% of the issued share capital of Lai Fung during the one-year period ended on and including the Last Trading Date), it would be difficult for a significant number of LF Offer Shares to be sold in the market without adversely affecting the market price of the LF Shares. The LF Share Offer affords the holders of the LF Offer Shares the opportunity to realise their investments in Lai Fung without such difficulty.

18. INTENTIONS OF LSD WITH REGARD TO THE LAI FUNG GROUP

LSD does not intend the Lai Fung Group to start any new business outside the property sector upon completion of the LF Offers. LSD may from time to time consider the need to fund further development of the businesses of the Lai Fung Group by debt and/or equity financing by the Lai Fung Group, subject to the Lai Fung Group’s business needs and prevailing market conditions. Save for the Laisun Creative Culture Subscription Agreement (details of which were disclosed in the joint announcement of LSG, LSD, eSun and Lai Fung dated 19 January 2020), LSD and the Offeror do not intend Lai Fung, and have not entered into any agreement, arrangement or understanding for Lai Fung, to acquire or develop any new business or to dispose of or downsize the existing businesses or material operating assets of Lai Fung or redeploy any of the fixed assets of Lai Fung. LSD does not intend to change the property development strategy of the LSD Group or the Lai Fung Group upon completion of the LF Offers.

It is also the intention of LSD that the employment of the existing employees of the Lai Fung Group and the directorship of the existing directors of the Lai Fung Group will be continued following completion of the LF Offers except for changes which may occur in the ordinary course of business. LSD and the Offeror do not intend to appoint new directors to the Lai Fung Board upon completion of the LF Offers.

19. conFIRMATION OF FINANCIAL RESOURCES

The funds required by the Offeror to satisfy the consideration payable under the LF Offers will be financed by a combination of the HSBC Facility and/or the internal resources of the LSD Group. The Offeror does not intend that the payment of interest on, repayment of or security for any liability (contingent or otherwise) of the HSBC Facility will depend to any significant extent on the business of the Lai Fung Group.

HSBC, being the financial adviser to LSD and the Offeror in respect of the LF Offers, is satisfied that sufficient financial resources are available to the Offeror to satisfy full acceptance of the LF Offers in accordance with their respective terms.

– 38 – Letter from HSBC

20. TAXATION AND INDEPENDENT ADVICE

LF Shareholders and LF Optionholders are recommended to consult their own professional advisers if they are in any doubt as to the taxation implications of accepting the LF Offers. It is emphasised that none of LSG, LSD, the Offeror, eSun, Lai Fung or HSBC, nor any of their respective directors, officers or associates or any other person involved in the LF Offers, accepts responsibility for any taxation effects on, or liabilities of, any persons as a result of their accepting or not accepting the LF Offers.

21. FURTHER TERMS OF THE LF OFFERS

The LF Offers are subject to the Conditions. If Conditions (a), (b), (c) and/or (d) are not satisfied on or before the LF Share Offer Closing Date, the LF Offers will lapse. If any other Conditions are not satisfied or waived on or before the LF Share Offer Closing Date, the LF Offers may lapse. The Offeror will issue an announcement stating whether the LF Offers have been revised or extended, have expired or have become or been declared unconditional (and, in such case, whether as to acceptances or in all respects), by 7:00 p.m. on the LF Share Offer Closing Date in accordance with the Takeovers Code. The latest time on which the Offeror can declare the LF Share Offer unconditional as to acceptances is 7:00 p.m. on the 60th day after the posting of the Composite Document, being Tuesday, 23 June 2020 (or such later date to which the Executive may consent).

If all the Conditions are satisfied (or waived, as applicable), the LF Offer Shareholders and the LF Optionholders will be notified by way of an announcement in accordance with the Takeovers Code and the Listing Rules as soon as practicable thereafter.

Please see “Appendix I — Further Terms of the LF Offers” to the Composite Document for further terms of the LF Offers.

22. LISTING RULES IMPLICATIONS OF THE LF OFFERS FOR LSD

As the highest applicable percentage ratio for LSD in respect of the LF Offers exceeds 25% and is less than 100%, the LF Offers constitute a major acquisition for LSD under Chapter 14 of the Listing Rules and are subject to approval by the Independent LSD Shareholders.

The making of the LF Offers constitutes a number of connected transactions for LSD under Chapter 14A of the Listing Rules, none of which is subject to approval by the Non- Connected LSD Shareholders on the basis of the disclosures of interests in LSD as at the Latest Practicable Date.

A circular containing, amongst other things, details of the LF Offers and the notice of general meeting of LSD to be held on Wednesday, 13 May 2020 to consider, and if thought fit, to approve the LF Offers as a major acquisition is being despatched to the LSD Shareholders on 24 April 2020.

– 39 – Letter from HSBC

23. LISTING RULES IMPLICATIONS OF THE LF OFFERS FOR LSG

As the highest applicable percentage ratio for LSG in respect of the LF Offers exceeds 25% and is less than 100%, the LF Offers constitute a major acquisition for LSG under Chapter 14 of the Listing Rules and are subject to approval by the Independent LSG Shareholders.

The making of the LF Offers constitutes a number of connected transactions for LSG under Chapter 14A of the Listing Rules, one of which is subject to approval by the Non-Connected LSG Shareholders.

A circular containing, amongst other things, details of the LF Offers and the notice of general meeting of LSG to be held on Wednesday, 13 May 2020 to consider, and if thought fit, to approve (by way of separate resolutions) (a) the LF Offers as a major acquisition and (b) the making of the LF Share Offer to the Yu Shareholders as a connected transaction subject to the independent shareholders’ approval requirements under Chapter 14A of the Listing Rules is being despatched to the LSG Shareholders on 24 April 2020.

24. LISTING RULES IMPLICATIONS OF THE eSUN DISPOSAL FOR eSUN

As the highest applicable percentage ratio for eSun in respect of the eSun Disposal exceeds 75%, the eSun Disposal constitutes a very substantial disposal for eSun under Chapter 14 of the Listing Rules and is subject to approval by the Independent eSun Shareholders.

The eSun Disposal constitutes a connected transaction for eSun under Chapter 14A of the Listing Rules and is subject to approval by the Non-Connected eSun Shareholders.

A circular containing, amongst other things, details of the LF Offers and the eSun Disposal and the notice of special general meeting of eSun to be held on Wednesday, 13 May 2020 to consider, and if thought fit, to approve (by way of separate resolutions) (a) the eSun Disposal as a very substantial disposal and (b) the eSun Disposal as a connected transaction subject to the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules is being despatched to the eSun Shareholders on 24 April 2020.

25. GENERAL

To ensure equality of treatment of all LF Offer Shareholders, those LF Offer Shareholders who hold the LF Offer Shares as nominees for more than one beneficial owner should, as far as practicable, treat the holding of each beneficial owner separately. In order for the beneficial owners of the LF Offer Shares whose investments are registered in nominee names to accept the LF Share Offer, it is essential that they provide instructions of their intentions with regard to the LF Share Offer to their nominees.

All documents and cheques for payment to the LF Offer Shareholders who accept the LF Share Offer will be sent to them by ordinary post at their own risk to their addresses as they appear in the register of members of Lai Fung or, in the case of joint LF Offer Shareholders, to the LF Offer Shareholder whose name appears first in the register of members of Lai Fung, as applicable.

– 40 – Letter from HSBC

All documents to the LF Optionholders and cheques for payment in respect of the LF Options surrendered for cancellation will be delivered to the office of Lai Fung in Hong Kong at 11th Floor, Lai Sun Commercial Centre, 680 Cheung Sha Wan Road, Kowloon, Hong Kong for collection by the LF Optionholders. None of LSG, LSD, the Offeror, eSun, Lai Fung, HSBC or any of their respective directors or any other person involved in the LF Offers will be responsible for any loss or delay in transmission or any other liabilities that may arise as a result thereof.

26. addITIONAL INFORMATION

Your attention is drawn to the “Letter from the Lai Fung Board”, the “Letter from the Lai Fung Independent Board Committee” (including the recommendations by the Lai Fung Independent Board Committee as set out on page 50 of this Composite Document), the “Letter from the Lai Fung Independent Financial Adviser” (including the recommendation by the Lai Fung Independent Financial Adviser as set out on page 74 of this Composite Document), the accompanying Form(s) of Acceptance and the additional information set out in the appendices which form part of the Composite Document.

Yours faithfully, For and on behalf of The Hongkong and Shanghai Banking Corporation Limited Che Ning Liu Vice Chairman, Global Banking

– 41 – Letter from the Lai Fung Board

Executive Directors: Registered Office: Mr. Chew Fook Aun (Chairman) P.O. Box 309 Dr. Lam Kin Ming (Deputy Chairman) Ugland House Mr. Lam Kin Hong, Matthew (Executive Deputy Chairman) Grand Cayman Mr. Lam Hau Yin, Lester (Chief Executive Officer) KY1-1104 Mr. Cheng Shin How Cayman Islands Mr. Lee Tze Yan, Ernest Mr. Tham Seng Yum, Ronald Principal Place of Business Madam U Po Chu in Hong Kong: 11th Floor Non-executive Directors: Lai Sun Commercial Centre Mr. Lucas Ignatius Loh Jen Yuh 680 Cheung Sha Wan Road Mr. Puah Tze Shyang Kowloon (also alternate to Mr. Lucas Ignatius Loh Jen Yuh) Hong Kong

Independent Non-executive Directors: Mr. Ku Moon Lun Mr. Lam Bing Kwan Mr. Law Kin Ho Mr. Mak Wing Sum, Alvin Mr. Shek Lai Him, Abraham

24 April 2020

To the LF Shareholders and the LF Optionholders

Dear Sir or Madam,

– 42 – Letter from the Lai Fung Board

1. INTRODUCTION

Reference is made to the Joint Announcement dated 21 February 2020 made by LSG, LSD, the Offeror, eSun and Lai Fung in respect of, among others, conditional voluntary general cash offers by HSBC on behalf of the Offeror, a wholly-owned subsidiary of LSD, to acquire all of the issued shares of Lai Fung (other than those already owned or agreed to be acquired by LSD, the Offeror or the other wholly-owned subsidiaries of LSD) and to cancel all the outstanding share options of Lai Fung.

The purpose of this Composite Document (of which this letter forms part) is to provide you with, among other things: (i) information relating to the Lai Fung Group, LSD, the Offeror and the LF Offers; (ii) a letter from HSBC containing, among other things, details of the LF Offers; (iii) a letter from the Lai Fung Independent Board Committee containing its recommendations to the Disinterested Shareholders and the LF Optionholders in relation to the LF Offers; and (iv) a letter from the Lai Fung Independent Financial Adviser containing its advice and recommendations to the Lai Fung Independent Board Committee in relation to the LF Offers.

2. LAI FUNG INDEPENDENT BOARD COMMITTEE AND LAI FUNG INDEPENDENT FINANCIAL ADVISER

The Lai Fung Board has established the Lai Fung Independent Board Committee, comprising of the non-executive Lai Fung Directors Mr. Lucas Ignatius Loh Jen Yuh and Mr. Puah Tze Shyang, and the independent non-executive Lai Fung Directors Mr. Ku Moon Lun, Mr. Law Kin Ho, Mr. Mak Wing Sum, Alvin and Mr. Shek Lai Him, Abraham, to make a recommendation to the Disinterested Shareholders and the LF Optionholders as to whether the LF Offers are, or are not, fair and reasonable and as to acceptance.

Pursuant to Rule 2.8 of the Takeovers Code, the Lai Fung Independent Board Committee comprises all the non-executive Lai Fung Directors who have no direct or indirect interest in the LF Offers other than as holders of the LF Shares and/or the LF Options. Mr. Lam Bing Kwan, an independent non-executive Lai Fung Director, is also an independent non-executive director of LSG and LSD, both of which are holding companies of the Offeror. Accordingly, he is regarded as being interested in the LF Offers for the purposes of Rule 2.8 of the Takeovers Code and is not a member of the Lai Fung Independent Board Committee. All of the other non- executive Lai Fung Directors are members of the Lai Fung Independent Board Committee.

Altus Capital, with the approval of the Lai Fung Independent Board Committee, has been appointed as the Lai Fung Independent Financial Adviser to advise the Lai Fung Independent Board Committee in connection with the LF Offers.

– 43 – Letter from the Lai Fung Board

3. THE LF OFFERS

As disclosed in the “Letter from HSBC” in this Composite Document, HSBC, on behalf of the Offeror, is making the LF Offers on the following basis:

LF Share Offer:

For each LF Offer Share...... HK$8.99 in cash

LF Option Offer:

number of LF Options as at the Latest Practicable LF Option LF Option date (each carrying the exercise price offer Price per LF Share right to subscribe for one exercise period of per LF Share (unless otherwise indicated) new LF Share) LF Options (HK$) (HK$) (dd/mm/yyyy)

6.650 2.340 900,000 12/06/2012 to 11/06/2020

6.784 2.206 500,000 19/08/2019 to 18/08/2029

8.000 0.990 180,000 16/01/2015 to 15/01/2025

9.500 0.01 for every 100 LF 220,000 26/07/2013 to Options (or, if lesser, any 25/07/2023 part thereof)

10.180 0.01 for every 100 LF 580,000 22/01/2019 to Options (or, if lesser, any 21/01/2029 part thereof)

11.400 0.01 for every 100 LF 8,294,526 18/01/2013 to Options (or, if lesser, any part 17/01/2023 thereof)

13.520 0.01 for every 100 LF 450,000 19/01/2018 to Options (or, if lesser, any 18/01/2028 part thereof)

– 44 – Letter from the Lai Fung Board

Further details of the LF Offers can be found in the “Letter from HSBC” and “Appendix I — Further Terms of the LF Offers” to this Composite Document and the accompanying Form(s) of Acceptance, which together set out the terms and conditions of the LF Offers and certain related information.

Please see sections 1.1 “Financial Information of Lai Fung Group” and 3.2 “Analysis of historical price performance of LF Shares” in the “Letter from the Lai Fung Independent Financial Adviser” in this Composite Document for further information in respect of the historical share prices, trading volume movement and financial performance of Lai Fung.

4. VALUE OF THE LF OFFERS

Your attention is drawn to the section headed “Value of the LF Offers” in the “Letter from HSBC” in this Composite Document which sets out the value of the LF Offers.

5. condITIONS TO THE LF OFFERS

Your attention is drawn to the section headed “Conditions to the LF Offers” in the “Letter from HSBC” in this Composite Document which sets out the conditions to the LF Offers.

6. reaSONS FOR AND BENEFITS OF THE LF OFFERS

Your attention is drawn to the section headed “Reasons for and benefits of the LF Offers” in the “Letter from HSBC” in this Composite Document which sets out the reasons for and the benefits of the LF Offers.

7. INTENTIONS WITH REGARD TO THE LAI FUNG GROUP

Your attention is drawn to the section headed “Intentions of LSD with regard to the Lai Fung Group” in the “Letter from HSBC” in this Composite Document which sets out the intentions of LSD with regard to the Lai Fung Group.

– 45 – Letter from the Lai Fung Board

The Lai Fung Board is aware of and welcomes LSD’s intentions as set out in the section headed “Intentions of LSD with regard to the Lai Fung Group” in the “Letter from HSBC” in this Composite Document that, among others, (i) LSD does not intend the Lai Fung Group to start any new business outside the property sector upon completion of the LF Offers; (ii) LSD may from time to time consider the need to fund further development of the businesses of the Lai Fung Group by debt and/or equity financing by the Lai Fung Group, subject to the Lai Fung Group’s business needs and prevailing market conditions; (iii) save for the Laisun Creative Culture Subscription Agreement (details of which were disclosed in the joint announcement of LSG, LSD, eSun and Lai Fung dated 19 January 2020), LSD and the Offeror do not intend Lai Fung, and have not entered into any agreement, arrangement or understanding for Lai Fung, to acquire or develop any new business or to dispose of or downsize the existing businesses or material operating assets of Lai Fung or redeploy any of the fixed assets of Lai Fung; (iv) LSD does not intend to change the property development strategy of the LSD Group or the Lai Fung Group upon completion of the LF Offers; (v) the employment of the existing employees of the Lai Fung Group and the directorships of the existing directors of the Lai Fung Group will be continued following completion of the LF Offers except for changes which may occur in the ordinary course of business; and (vi) LSD and the Offeror do not intend to appoint new directors to the Lai Fung Board upon completion of the LF Offers. The Lai Fung Board is willing to render reasonable cooperation with the Offeror and will continue to act in the best interests of the Lai Fung Group and the LF Shareholders as a whole.

Save for the Laisun Creative Culture Subscription Agreement (details of which were disclosed in the joint announcement of LSG, LSD, eSun and Lai Fung dated 19 January 2020), the Lai Fung Board does not have any intention, and has not entered into any agreement, arrangement or understanding, to acquire or develop any new business or to dispose of or downsize the existing businesses or material operating assets of Lai Fung.

8. INFORMATION ON LSD AND THE OFFEROR

Your attention is drawn to the section headed “Information on LSD and the Offeror” in the “Letter from HSBC” in this Composite Document for information on LSD and the Offeror.

9. INFORMATION ON THE LAI FUNG GROUP

Lai Fung is a company incorporated in the Cayman Islands with limited liability. The Lai Fung Group is principally engaged in property development for sale, property investment, and development and operation of and investment in cultural, leisure, entertainment and related facilities.

Please see section 1.2 “Outlook of Lai Fung Group” in the “Letter from the Lai Fung Independent Financial Adviser” in this Composite Document for further information in respect of the business development and financial and trading prospects of Lai Fung.

– 46 – Letter from the Lai Fung Board

Your attention is also drawn to the financial information of the Lai Fung Group set out in “Appendix II — Financial Information of the Lai Fung Group”, the property valuation of the Lai Fung Group set out in “Appendix III — Property Valuation of the Lai Fung Group” and general information of Lai Fung set out in “Appendix V — General Information of Lai Fung” to this Composite Document.

10. puBLIC FLOAT OF LAI FUNG

Your attention is drawn to the section headed “Possible compulsory acquisition and withdrawal of listing of LF Shares” in the “Letter from HSBC” in this Composite Document.

11. addITIONAL INFORMATION

You are advised to read the “Letter from HSBC”, “Appendix I — Further Terms of the LF Offers” to this Composite Document and the accompanying Form(s) of Acceptance for information relating to the LF Offers, the acceptance and settlement procedures of the LF Offers, the making of the LF Offers to the overseas LF Offer Shareholders and the overseas LF Optionholders and taxation. Your attention is also drawn to the additional information contained in the appendices to this Composite Document.

– 47 – Letter from the Lai Fung Board

12. RECOMMENDATIONS

Your attention is also drawn to the letter from the Lai Fung Independent Board Committee addressed to the Disinterested Shareholders and the LF Optionholders, the full text of which is set out on pages 49 to 50 of this Composite Document, and the letter from the Lai Fung Independent Financial Adviser addressed to the Lai Fung Independent Board Committee, the full text of which is set out on pages 51 to 75 of this Composite Document. You are advised to read both letters (including the recommendations by the Lai Fung Independent Board Committee as set out on page 50 of this Composite Document and the recommendation by the Lai Fung Independent Financial Adviser as set out on page 74 of this Composite Document) and the other information contained in this Composite Document carefully before taking any action in respect of the LF Offers.

The LF Offer Shareholders and the LF Optionholders are recommended to consult their own professional advisers as to the tax implications that may arise from accepting the LF Offers.

Yours faithfully, For and on behalf of the Board of Lai Fung Holdings Limited Cheng Shin How Executive Director

– 48 – Letter from the Lai Fung Independent Board Committee

24 April 2020

To the Disinterested Shareholders and the LF Optionholders

Dear Sir or Madam,

INTRODUCTION

We refer to the Composite Document dated 24 April 2020 issued jointly by LSD, the Offeror and Lai Fung of which this letter forms part. Unless the context requires otherwise, terms used in this letter shall have the same meaning as those defined in the Composite Document.

We have been appointed by the Lai Fung Board to form the Lai Fung Independent Board Committee to make recommendations to you as to whether, in our opinion, the terms of the LF Offers are fair and reasonable so far as the Disinterested Shareholders and the LF Optionholders are concerned and as to acceptances of the LF Offers.

We, being the members of the Lai Fung Independent Board Committee, have declared that we are independent and do not have any conflict of interest in respect of the LF Offers and are therefore able to consider the terms of the LF Offers and to make recommendations to the Disinterested Shareholders and the LF Optionholders. Pursuant to Rule 2.8 of the Takeovers Code, the Lai Fung Independent Board Committee comprises all the non-executive Lai Fung Directors who have no direct or indirect interest in the LF Offers other than as holders of the LF Shares and/or the LF Options. Mr. Lam Bing Kwan, an independent non-executive Lai Fung Director, is also an independent non-executive director of LSG and LSD, both of which are holding companies of the Offeror. Accordingly, he is regarded as being interested in the LF Offers for the purposes of Rule 2.8 of the Takeovers Code and is not a member of the Lai Fung Independent Board Committee.

– 49 – Letter from the Lai Fung Independent Board Committee

Altus Capital has been appointed, with our approval, as the Lai Fung Independent Financial Adviser to advise and make recommendations to us as to the terms and conditions of the LF Offers and as to acceptances of the LF Offers. The details of its advice and recommendations and the principal factors taken into consideration in arriving at its recommendations are set out in the “Letter from the Lai Fung Independent Financial Adviser” set out in the Composite Document.

We also wish to draw your attention to the “Letter from HSBC”, the “Letter from the Lai Fung Board” and the additional information set out in this Composite Document, including the appendices to the Composite Document and the accompanying Form(s) of Acceptance.

RECOMMENDATIONS

Having taken into account the advice and recommendations of the Lai Fung Independent Financial Adviser, in particular the factors, reasons and recommendations as set out in the “Letter from the Lai Fung Independent Financial Adviser”, we concur with the view of the Lai Fung Independent Financial Adviser and consider that:

(a) the terms of the LF Share Offer are not fair and not reasonable so far as the Disinterested Shareholders are concerned, and recommend the Disinterested Shareholders not to accept the LF Share Offer; and

(b) the terms of the LF Option Offer are not fair and not reasonable so far as the LF Optionholders are concerned, and recommend the LF Optionholders not to accept the LF Option Offer.

Notwithstanding our recommendations, the Disinterested Shareholders and the LF Optionholders are strongly advised to monitor the trading price and liquidity of the LF Shares during the period of the LF Offers and that their decision to realise or to hold their investment in Lai Fung depends on their own individual circumstances and investment objectives. If in any doubt, the Disinterested Shareholders and the LF Optionholders should consult their own professional advisers for professional advice.

Yours faithfully, The Lai Fung Independent Board Committee Lai Fung Holdings Limited

Lucas Ignatius Loh Jen Yuh Ku Moon Lun Non-executive Director Independent Non-executive Director

Puah Tze Shyang Law Kin Ho Non-executive Director Independent Non-executive Director

Mak Wing Sum, Alvin Independent Non-executive Director

Shek Lai Him, Abraham Independent Non-executive Director

– 50 – Letter from the Lai Fung Independent Financial Adviser

Set out below is the text of a letter received from Altus Capital, the independent financial adviser to the Lai Fung Independent Board Committee in respect of the LF Offers for the purpose of inclusion in this Composite Document.

Altus Capital Limited 21 Wing Wo Street Central Hong Kong

24 April 2020

To the Lai Fung Independent Board Committee

Lai Fung Holdings Limited 11th Floor Lai Sun Commercial Centre 680 Cheung Sha Wan Road Kowloon, Hong Kong

Dear Sir or Madam,

INTRODUCTION

We refer to our appointment as the independent financial adviser to advise the Lai Fung Independent Board Committee in respect of the LF Offers. Details of the LF Offers are set out in the “Letter from HSBC” contained in the Composite Document dated 24 April 2020 jointly issued by LSD, the Offeror and Lai Fung to the LF Shareholders and the LF Optionholders, of which this letter forms part. Terms used in this letter shall have the same meanings as those defined in the Composite Document unless the context requires otherwise.

HSBC, on behalf of the Offeror, a wholly-owned subsidiary of LSD, is making conditional voluntary general cash offers (i) to acquire all of the issued shares of Lai Fung not already owned or agreed to be acquired by LSD, the Offeror or the other wholly-owned subsidiaries of LSD and (ii) to cancel all the outstanding LF Options. For the avoidance of doubt, the LF Offer Shares include the LF Shares which are owned by the Offeror Concert Parties (other than those already owned or agreed to be acquired by LSD, the Offeror or the other wholly-owned subsidiaries of LSD), including the LF Shares owned by eSun.

– 51 – Letter from the Lai Fung Independent Financial Adviser

THE LAI FUNG INDEPENDENT BOARD COMMITTEE AND THE LAI FUNG INDEPENDENT FINANCIAL ADVISER

The Lai Fung Independent Board Committee, comprising Mr. Lucas Ignatius Loh Jen Yuh, Mr. Puah Tze Shyang, Mr. Ku Moon Lun, Mr. Law Kin Ho, Mr. Mak Wing Sum, Alvin and Mr. Shek Lai Him, Abraham, has been established to make a recommendation to the Disinterested Shareholders and the LF Optionholders as to whether the LF Offers are, or are not, fair and reasonable and as to acceptance.

As the independent financial adviser with respect to the LF Offers, our role is to provide the Lai Fung Independent Board Committee with an independent opinion and recommendation as to whether the terms of the LF Offers are, or are not, fair and reasonable as far as the Disinterested Shareholders and LF Optionholders are concerned, and whether the Disinterested Shareholders and the LF Optionholders should, or should not, accept the LF Offers.

We (i) are not associated or connected with Lai Fung or the Offeror, their respective controlling shareholders or any parties acting in concert with any of them; and (ii) have not acted as the independent financial adviser in relation to any transaction of Lai Fung in the last two years prior to the date of the Composite Document. Pursuant to Rule 13.84 of the Listing Rules and Rule 2 of the Takeovers Code, and given that (i) remuneration for our engagement to opine on the LF Offers is at market level and not conditional upon the outcome of the LF Offers; (ii) no arrangement exists whereby we shall receive any fees or benefits from Lai Fung or the Offeror (other than our said remuneration), their respective controlling shareholders or any parties acting in concert with any of them; and (iii) our engagement is on normal commercial terms, we are independent of Lai Fung and can act as the independent financial adviser to the Lai Fung Independent Board Committee in respect of the LF Offers.

BASIS OF OUR ADVICE

In formulating our opinion, we have reviewed, amongst others (i) the Composite Document; (ii) the annual report of Lai Fung for the year ended 31 July 2019 (“Annual Report”); (iii) the interim report of Lai Fung for the six months ended 31 January 2020 (“Interim Report ”); (iv) the Joint Announcement; and (v) announcements made by the Lai Fung Group during the two years up to the Latest Practicable Date.

We have relied on the statements, information, opinions and representations contained or referred to in the Composite Document and/or provided to us by Lai Fung, the Lai Fung Directors, the management of Lai Fung (the “Lai Fung Management”), the Offeror and the management of the Offeror (the “Offeror Management”). We have assumed that all statements, information, opinions and representations contained or referred to in the Composite Document and/or provided to us were true, accurate and complete at the time they were made and continued to be so as at the Latest Practicable Date. Should there be any material changes to the statements, information and/or representation affecting our opinion after the Latest Practicable Date, the Disinterested Shareholders and LF Optionholders would be notified as soon as possible in compliance with Rule 9.1 of the Takeovers Code.

– 52 – Letter from the Lai Fung Independent Financial Adviser

We have no reason to believe that any statements, information, opinions or representations relied on by us in forming our opinion is untrue, inaccurate or misleading, nor are we aware of any material fact the omission of which would render the statements, information, opinions or representations provided to us untrue, inaccurate or misleading. We have assumed that all the statements, information, opinions and representations for matters relating to Lai Fung contained or referred to in the Composite Document and/or provided to us by Lai Fung, the Lai Fung Directors and the Lai Fung Management have been reasonably made after due and careful enquiry. We have assumed that all the statements, information, opinions and representations for matters relating to the Offeror contained or referred to in the Composite Document and/or provided to us by the Offeror, the director(s) of the Offeror and the Offeror Management have been reasonably made after due and careful enquiry. We have relied on such statements, information, opinions and representations and consider that we have been provided with and have reviewed sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not conducted any independent investigation into the business, financial conditions and affairs or the future prospects of Lai Fung.

We have not considered the taxation implications on the Disinterested Shareholders nor the LF Optionholders arising from acceptance or non-acceptance of the LF Offers, if any, and therefore we will not accept responsibility for any tax effect or liability that may potentially be incurred by the Disinterested Shareholders and the LF Optionholders as a result of the LF Offers. In particular, the Disinterested Shareholders and the LF Optionholders who are subject to Hong Kong or overseas taxation on dealings in securities are urged to seek their own professional adviser on tax matters.

PRINCIPAL TERMS OF THE LF OFFERS

The LF Share Offer

The LF Share Offer is made by HSBC on behalf of the Offeror in compliance with the Takeovers Code. The LF Share Offer Price is HK$8.99 in cash for each LF Offer Share.

The LF Option Offer

As at the Latest Practicable Date, there were 11,124,526 LF Options (all of which were vested on their respective dates of grant), each giving the LF Optionholder the right to subscribe for one new LF Share. The exercise of such LF Options in full would result in the issue of 11,124,526 new LF Shares, representing approximately 3.36% of the issued share capital of Lai Fung as at the Latest Practicable Date and approximately 3.25% of the issued share capital of Lai Fung as enlarged by the issue of such new LF Shares.

– 53 – Letter from the Lai Fung Independent Financial Adviser

Number of LF Options LF Option Offer (each carrying LF Option exercise Price per LF Share the right to subscribe price per LF Share (unless otherwise indicated) for one new LF Share) (HK$) (HK$)

6.650 2.340 900,000 6.784 2.206 500,000 8.000 0.990 180,000 9.500 0.01 for every 100 LF Options 220,000 (or, if lesser, any part thereof) 10.180 0.01 for every 100 LF Options 580,000 (or, if lesser, any part thereof) 11.400 0.01 for every 100 LF Options 8,294,526 (or, if lesser, any part thereof) 13.520 0.01 for every 100 LF Options 450,000 (or, if lesser, any part thereof)

For further information on the LF Option Offer, please refer to “Letter from HSBC” in the Composite Document. If any LF Option is exercised in accordance with the terms of the relevant Share Option Schemes prior to the close of the LF Share Offer, any LF Shares issued as a result of such exercise will be subject to the LF Share Offer. As Lai Fung is already a subsidiary of LSD, which wholly owns the Offeror, the LF Share Offer will not result in any change of control over Lai Fung under the terms of the Share Option Scheme adopted by Lai Fung on 21 August 2003 (as amended on 8 August 2018) and the Share Option Scheme adopted by Lai Fung on 18 December 2012. Accordingly, all LF Options shall remain valid and exercisable during their respective option periods in accordance with the terms of the relevant Share Option Schemes notwithstanding the LF Share Offer. Any unexercised LF Option will survive the completion of the LF Offers provided that its option period will not expire before then.

– 54 – Letter from the Lai Fung Independent Financial Adviser

Conditions of the Offers

The LF Share Offer is subject to the fulfilment of certain Conditions, the details of which are set out in the “Letter from HSBC” in the Composite Document. In particular, we wish to draw your attention to the major conditions below:

(a) the approval:

(i) by the Independent LSD Shareholders of the LF Offers as a major acquisition of LSD; and

in each case, in accordance with the Listing Rules;

(b) the approval:

(i) by the Independent LSG Shareholders of the LF Offers as a major acquisition of LSG; and

in each case, in accordance with the Listing Rules;

(i) by the Independent eSun Shareholders as a very substantial disposal of eSun; and

(ii) by the Non-Connected eSun Shareholders as a connected transaction of eSun subject to the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules,

in each case, in accordance with the Listing Rules;

– 55 – Letter from the Lai Fung Independent Financial Adviser

(e) all necessary consents (including consents from the relevant lenders) in connection with the LF Offers and/or (in the event that the Offeror were to exercise the right (if any) to acquire compulsorily those LF Offer Shares not already owned or acquired by LSD, the Offeror or the other wholly-owned subsidiaries of LSD) the possible withdrawal of the listing of the LF Shares from the Stock Exchange which may be required under any existing contractual or other obligations of Lai Fung having been obtained and remaining in effect; and

(f) since the Announcement Date, there having been no material adverse change in the business, assets, financial or trading position or the prospects or conditions (whether operational, legal or otherwise) of the Lai Fung Group to an extent which is material in the context of the Lai Fung Group.

The Offeror reserves the right to waive, in whole or in part, all or any of the Conditions (other than Conditions (a), (b), (c) and (d)).

The LF Option Offer is subject to and conditional upon the LF Share Offer becoming or being declared unconditional in all respects.

As at the Latest Practicable Date, none of the Conditions had been fulfilled.

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background information of Lai Fung

Under the property development segment, Lai Fung owned a portfolio of completed properties held for sale with a gross floor area of approximately 494,000 square feet as at 31 January 2020. The portfolio mostly consisted of residential properties of Zhongshan Palm Spring and cultural studios of Hengqin Novotown Phase I.

– 56 – Letter from the Lai Fung Independent Financial Adviser

Under the rental segment, Lai Fung Group owned a rental portfolio (primarily located in Shanghai and Guangzhou, including office, commercial and hotel properties and serviced apartments) with a total gross floor area of approximately 4.5 million square feet as at 31 January 2020.

Lai Fung also held a portfolio of properties under development with a gross floor area of approximately 7.3 million square feet in Guangzhou, Zhongshan, Shanghai and Hengqin, in the PRC as at 31 January 2020. The Northgate Plaza redevelopment project with a gross floor area of approximately 693,600 square feet, located in Shanghai, is an office property for commercial and retail use currently under construction and is expected to be completed by the second half of 2020. Phase III and Phase IV of the Palm Spring project with a gross floor area of approximately 2.1 million square feet, located in Zhongshan, is a residential property for commercial and retail use currently under construction and is expected to be completed by the third quarter of 2020 and third quarter of 2021 respectively.

For further information on Lai Fung’s property portfolio, please refer to “Appendix III - Property Valuation of the Lai Fung Group” to the Composite Document.

1.1 Financial Information of Lai Fung Group

Set out below is a summary of the consolidated financial information of the Lai Fung Group (i) for each of the two years ended 31 July 2019 as extracted from the Annual Report; and (ii) for the six months ended 31 January 2020 (with comparative figures) as extracted from the Interim Report:

For the For the For the year ended For the year ended six months ended six months ended 31 July 2019 31 July 2018 31 January 2020 31 January 2019 (“FY2019”) (“FY2018”) (“1H2020”) (“1H2019”) (audited) (audited) (unaudited) (unaudited) HK$’000 HK$’000 HK$’000 HK$’000

Revenue 1,461,249 950,822 599,898 571,086 — Property development 613,322 184,633 175,186 145,668 — Property investment 847,927 766,189 424,712 425,418 Gross profit 917,472 679,317 312,049 359,137 Other income and gains 59,182 191,237 30,526 38,121 Fair value gains/(losses) on investment properties 634,810 860,037 (387,598) 109,692 Share of profits/(losses) of joint ventures (20,191) 440,221 (107) (18,305) Profit/(loss) for the year/period 740,055 1,291,471 (570,790) 82,686

– 57 – Letter from the Lai Fung Independent Financial Adviser

As at 31 January as at 31 July as at 31 January as at 31 July 2020 2019 2019 2018 (unaudited) (audited) (unaudited) (audited) HK$’000 HK$’000 HK$’000 HK$’000

Property, plant and equipment 3,632,349 3,627,227 3,075,024 2,409,449 Investment properties 20,447,565 20,455,200 19,913,529 18,207,822 Properties under development 591,227 711,362 588,712 407,899

Total non-current assets 25,139,873 24,825,442 23,867,909 22,887,253

Properties under development 1,123,906 1,811,683 1,625,237 1,718,163 Completed properties for sale 1,892,248 902,331 1,064,884 776,776 Cash and cash equivalents 1,249,053 1,923,484 2,525,259 1,364,285

Total current assets 6,123,143 6,484,185 7,133,260 5,341,011

Total assets 31,263,016 31,309,627 246,101,169 28,228,264 Interest-bearing bank loans (current portion) 1,049,407 433,536 414,225 200,669 Interest-bearing bank loans (non-current portion) 5,654,503 5,554,150 4,998,999 3,572,464 Total liabilities 16,141,039 15,127,944 14,858,627 12,439,940

Total equity 15,121,977 16,181,683 15,832,181 15,788,324

FY2019 compared to FY2018

In FY2019, revenue recognised for the property development segment significantly increased to approximately HK$613.3 million from approximately HK$184.6 million in FY2018. The significant increase was primarily driven by the sales performance of residential units of Zhongshan Palm Spring, cultural studios of Hengqin Novotown Phase I and car-parking spaces of Shanghai Regent’s Park during the year.

Income from building management operation was included in “Other income and gains” in FY2018 and reclassified to the property investment segment in FY2019. Considering the effect of the reclassification, revenue from the property investment segment in FY2019 slightly decreased by approximately 4.0% to approximately HK$847.6 million from approximately HK$883.1 million in FY2018. The decrease was mainly attributable to the depreciation of Renminbi as the annual average exchange rate was approximately 4.7% lower in FY2019 compared with FY2018. Excluding the effect of currency translation, the growth of revenue in RMB-terms was approximately 0.7%.

– 58 – Letter from the Lai Fung Independent Financial Adviser

In FY2019, Lai Fung Group recorded a profit of approximately HK$740.1 million compared to approximately HK$1,291.5 million in FY2018, representing a decrease of approximately 42.7%. The decrease was mainly attributable to (i) a lower revaluation gains on investment properties (FY2018: approximately HK$860.0 million; FY2019: approximately HK$634.8 million); and (ii) the share of loss of joint venture of approximately HK$20.02 million in FY2019 as compared to the share of profits of joint ventures of approximately HK$440.2 million in FY2018. The significantly higher profit contribution of joint venture in FY2018 was from the Guangzhou Dolce Vita project, where most of its remaining retail units were sold in FY2018. Lai Fung Group, through its wholly-owned subsidiaries, and CapitaLand China each has 50% equity interest in a joint venture company which in turn, owned 95% equity interest in the Guangzhou Dolce Vita project. As a result, Lai Fai Group and CapitaLand China each has an effective interest of 47.5% in the Guangzhou Dolce Vita project.

As at 31 July 2019 compared to 31 July 2018

As at 31 July 2019, Lai Fung Group’s gearing ratio increased to approximately 38% from approximately 32% as at 31 July 2018 and its balance of cash and cash-equivalents increased to approximately HK$1,923 million from approximately HK$1,364 million as at 31 July 2018.

1H2020 compared to 1H2019

In 1H2020, revenue for the property development segment increased to approximately HK$175.2 million from approximately HK$145.7 million in 1H2019. The increase was primarily driven by the sales performance of residential units of Zhongshan Palm Spring and cultural studios of Hengqin Novotown Phase I during the period.

Revenue from the property investment segment in 1H2020 slightly decreased by approximately 2.6% to approximately HK$410.8 million from approximately HK$425.4 million in 1H2019. The decrease was mainly attributable to the depreciation of Renminbi as the average exchange rate for the period was approximately 2.6% lower in 1H2020 compared with 1H2019. Excluding the effects of currency translation, the decline in revenue in RMB-terms was approximately 0.9%.

– 59 – Letter from the Lai Fung Independent Financial Adviser

In 1H2020, Lai Fung Group recorded a loss for the period of approximately HK$570.8 million compared to a profit for the period of approximately HK$82.7 million in 1H2019. The decline in profitability was mainly attributable to a revaluation loss compared to a revaluation gain on investment properties (1H2020: loss of approximately HK$387.6 million; 1H2019: gain of approximately HK$109.7 million). The gross profit margin of Lai Fung Group decreased from approximately 62.9% in 1H2019 to approximately 52% in 1H2020. The decrease in gross profit margin was mainly due to the construction cost of Hengqin Novotown theme park and hotel in 1H2020 and the revenue of the project only started to come in after its completion at the end of 2019.

As at 31 January 2020 compared to 31 July 2019

As at 31 January 2020, Lai Fung Group’s gearing ratio increased to approximately 50% from approximately 38% as at 31 July 2019. The increase in gearing ratio was mainly attributable to (i) the decrease of cash and cash equivalents to approximately HK$1,249 million from approximately HK$1,923 million; and (ii) the increase in interest-bearing bank loans (current portion) from approximately HK$433 million to approximately HK$1,049 million.

The decrease in cash and cash equivalents and the increase in bank borrowings were mainly due to the deployment of capital towards Lai Fung’s various projects such as the Northgate Plaza redevelopment project, Zhongshan Palm Spring and Hengqin Novotown Phase I & II.

Funding arrangement of Lai Fung Group

Lai Fung Group does not rely on its controlling shareholders to finance its funding needs, instead, it finances itself through (i) cash flow from its operation; (ii) project loans from banks; and (iii) other borrowings. According to the Lai Fung Management, there will be no impact on the prevailing financing methods if Lai Fung remains listed after the LF Offers.

– 60 – Letter from the Lai Fung Independent Financial Adviser

Reassessed NAV as at 31 January 2020

The net asset value (“NAV”) of Lai Fung Group was approximately HK$15,122 million as at 31 January 2020.

Set out below is the illustrative computation of the NAV having adjusted for the valuation surplus (the “Reassessed NAV”) to reflect the market value of the properties held by Lai Fung Group as set out in the valuation report prepared by Knight Frank as set out in Appendix III to the Composite Document.

HK$’000

Total market value of the properties held by Lai Fung Group as at 31 January 2020 32,358,300 Less: Carrying amount of the properties held by Lai Fung Group as at 31 January 2020 (27,687,295)

Valuation surplus (Note) 4,671,005

HK$’000

NAV as at 31 January 2020 15,121,977 Add: Valuation surplus 4,671,005

Reassessed NAV 19,792,982

Note: The calculation of the valuation surplus has not taken into account of the potential tax liabilities.

– 61 – Letter from the Lai Fung Independent Financial Adviser

1.2 Outlook of Lai Fung Group

The Lai Fung Management has observed that in addition to the ongoing trade war between the United States and the PRC, rising geopolitical tensions, and the outbreak of the COVID-19 epidemic which is spreading globally has caused tremendous burdens on the PRC’s economy. As a result, it has inevitably negatively affected the the PRC’s economy and in turn affected the wealth of the end-users of the PRC property market. This in turn may cause downward pressure to property prices, rental rates and occupancy rates.

With reference to the Interim Report, Lai Fung Group has a number of property projects at various stages of development in Shanghai, Guangzhou, Zhongshan and Hengqin with total gross floor area of approximately 7.3 million square feet. Lai Fung Group has a heavy allocation of properties under development towards its rental portfolio, in line with its rental-led strategy. This strategy is expected to demonstrate resilience despite the sluggish economy as the rental portfolio can continue to deliver a steady stream of income as long as occupancy rate remains high. Throughout the past years, the key properties of the rental portfolio have maintained a high occupancy rate and the occupancy rate as at 31 January 2020 was approximately 84.4%.

Most of the properties under development will be added to the rental portfolio and the portfolio is expected to increase from approximately 4.5 million square feet to approximately 9.3 million square feet by 31 July 2024. The gross floor area of properties for sale is expected to be approximately 384,000 square feet, 523,000 square feet and 1.6 million square feet for each of the three years ending 31 July 2022 respectively.

The Lai Fung Management is wary that the property development segment may be affected by the slowing Chinese economy and the uncertainties brought about by COVID-19 epidemic. While facing challenges in the near term, the Lai Fung Management believes that, in the long-run, stability and business confidence will be restored and the PRC’s property market will continue to grow.

Overall, we noted that the business of Lai Fung Group has remained steady in the past years and it is holding a sizeable portfolio of properties under development. Hence, we believe Lai Fung Group’s project pipeline and its rental-led strategy could enable it to achieve steady growth over a longer term. In the near term however, Lai Fung Group is likely to be affected by the slowdown of the PRC property market given the uncertainties brought about by the adverse factors above. In conclusion, we believe Lai Fung Group’s growth may slow down in the near term but its long-term outlook remains stable.

– 62 – Letter from the Lai Fung Independent Financial Adviser

2. Background information of the Offeror

2.1. The Offeror and its controlling shareholders

The Offeror is a company incorporated in the British Virgin Islands with limited liability and is a wholly-owned subsidiary of LSD. The Offeror is engaged in investment holding.

LSD, which in turn is controlled by LSG, are the parent companies of Lai Fung. As at the Latest Practicable Date, (i) LSG owned approximately 56.30% of the issued share capital of LSD, which owned approximately 74.62% of the issued share capital of eSun, which in turn owned approximately 50.99% of the issued share capital of Lai Fung; (ii) LSD also directly owned 0.01% of Lai Fung and (iii) Dr. Peter Lam is interested in approximately 42.10% of the issued share capital of LSG.

LSG is a company incorporated in Hong Kong with limited liability. The LSG Group is principally engaged in property investment, property development, investment in and operation of hotels and restaurants, media and entertainment, music production and distribution, films, video format products and television programmes production and distribution, cinema operation, cultural, leisure, entertainment and related facilities and investment holding.

2.2. The Offeror’s intention in relation to Lai Fung

LSD does not intend the Lai Fung Group to start any new business outside the property sector upon completion of the LF Offers. LSD may from time to time consider the need to fund further development of the businesses of the Lai Fung Group by debt and/or equity financing by the Lai Fung Group, subject to the Lai Fung Group’s business needs and prevailing market conditions. LSD and the Offeror do not intend Lai Fung, and have not entered into any agreement, arrangement or understanding for Lai Fung, to acquire or develop any new business or to dispose of or downsize the existing businesses or material operating assets of Lai Fung or redeploy any of the fixed assets of Lai Fung. LSD does not intend to change the property development strategy of the LSD Group or the Lai Fung Group upon completion of the LF Offers.

– 63 – Letter from the Lai Fung Independent Financial Adviser

Based on the above, it appears that there will not be any significant change to the business operations, focus and development of the Lai Fung Group after the close of the LF Offers.

2.3. Listing status of Lai Fung

— a false market exists or may exist in the trading of the LF Shares; or

— that there are insufficient LF Shares in public hands to maintain an orderly market,

then the Stock Exchange will consider exercising its discretion to suspend dealings in the LF Shares.

The Offeror Directors have jointly and severally undertaken to the Stock Exchange that, in the event the LF Share Offer becomes unconditional in all respects and the Offeror does not effect the compulsory acquisition of the remaining LF Offer Shares, they will take appropriate steps to ensure that sufficient public float exists in the LF Shares after the close of the LF Offers as long as Lai Fung remains listed on the Stock Exchange.

– 64 – Letter from the Lai Fung Independent Financial Adviser

Pursuant to Rule 15.6 of the Takeovers Code, where the Offeror has stated in the “Letter from HSBC” contained in the Composite Document its intention to avail itself of any powers of compulsory acquisition, the LF Share Offer may not remain open for acceptance for more than four months from the posting of the Composite Document unless the Offeror has by that time become entitled to exercise such right of compulsory acquisition available to it under the Companies Law, in which event the Offeror must do so without delay.

Disinterested Shareholders who wish to retain part or all of their investments in the LF Shares are reminded that should the Offeror exercises its right to compulsorily acquire those LF Offer Shares not already owned or to be acquired by LSD, the Offeror or the other wholly-owned subsidiaries of LSD, Disinterested Shareholders’ LF Shares will also be compulsorily acquired by the Offeror.

In the event that the LF Share Offer becomes unconditional in all respects and the Offeror does not effect the compulsory acquisition of the remaining LF Offer Shares, whether by reason of the level of acceptances of the LF Share Offer not reaching the prescribed thresholds under the Companies Law or the Takeovers Code or otherwise, the Offeror intends to continue the listing of the LF Shares on the Stock Exchange and will take such steps as are necessary to ensure, or procure Lai Fung to take such steps as are necessary to ensure, that Lai Fung will have an adequate public float so as to comply with the applicable requirements under the Listing Rules.

In the event that the LF Share Offer does not become unconditional in all respects, Lai Fung will continue to consider steps to restore its public float in accordance with the Listng Rules. Further announcement(s) will be made by Lai Fung on the restoration of public float as and when appropriate.

– 65 – Letter from the Lai Fung Independent Financial Adviser

3. LF Share Offer Price

3.1. Lai Fung Share Offer Price comparison

The LF Share Offer Price of HK$8.99 per LF Offer Share under the LF Share Offer represents:

(a) a discount of approximately 7.61% to the closing price of HK$9.73 per LF Share as quoted on the Stock Exchange on the Last Trading Date;

(g) a premium of approximately 8.31% over the closing price of HK$8.30 per LF Share as quoted on the Stock Exchange on the Latest Practicable Date;

– 66 – Letter from the Lai Fung Independent Financial Adviser

(j) a discount of approximately 85.13% to the Reassessed NAV per LF Share of approximately HK$60.44 as at 31 January 2020, based on the total number of issued LF Shares as at 31 January 2020; and

(k) a discount of approximately 84.96% to the Reassessed NAV per LF Share of approximately HK$59.79 as at 31 January 2020, based on the total number of issued LF Shares as at the Latest Practicable Date.

3.2. Analysis of historical price performance of LF Shares

Set out below is a chart showing the movement of the closing prices and trading volume of LF Shares during the period from 21 February 2019, being one year before the Last Trading Date, up to the Latest Practicable Date (the “Review Period”) to illustrate the general trend, level of movement of the closing prices and trading volume of the LF Shares.

Historical daily closing price and trading volume of LF Shares

$11.00 $10.50 600,000 $10.00 500,000 $9.50 $9.00 400,000 $8.50 300,000 $8.00 $7.50 200,000 $7.00 100,000 $6.50 $6.00 0

Trading volume Closing PriceLF Share Offer Price Announcement date Latest Practicable Date

Source: the Stock Exchange website (www.hkex.com.hk)

LF Shares trading price

Over the Review Period, the highest and lowest closing price of the LF Shares as quoted on the Stock Exchange were HK$10.50 on 11 February 2020, and HK$6.48 on 11 and 12 September 2019, respectively. The average closing price of the LF Shares over the Review Period is approximately HK$8.99. The LF Share Offer Price is HK$8.99.

From February 2019 to mid-May 2019

During the period from March to mid-May 2019, the LF Shares were trading at around HK$9.80 to HK$10.48 per LF Share.

– 67 – Letter from the Lai Fung Independent Financial Adviser

From mid-May 2019 to July 2019

The closing price of LF Shares dropped to below HK$9.00 on 21 May 2019, which was in line with the decline in the Hang Seng Index due mainly to the escalation of the US- China trade war. The price of the LF Shares continued to slide after Lai Fung issued a profit warning announcement on 28 June 2019, reaching its lowest closing price of HK$6.48 on 11 and 12 September 2019. Overall, the decline in price of LF Shares during this period was in line with the general market amidst concerns over global economic slowdown and social movements in Hong Kong.

From July 2019 to October 2019

From July 2019 up until Lai Fung issued its annual results announcement on 22 October 2019, the LF Shares’ closing price ranged between HK$6.48 and HK$8.80.

From October 2019 to Announcement Date

Subsequently, the LF Shares’ closing price rose back above the annual average of HK$9.00, and continued to trade at around HK$10.00 until the Announcement Date, except for a temporary slump during a few days at the end of January 2020, after market reacted negatively to the initial outbreak of the COVID-19 epidemic.

From Announcement Date to Latest Practicable Date

After the Announcement Date, the LF Shares’ closing price had hovered at around HK$9.50 until 12 March 2020. The closing price of LF Shares had dropped since then, following the overall trend of the Hang Seng Index amid the stock market turmoil caused by the global outbreak of the COVID-19 epidemic. The closing price of the LF Shares as at the Latest Practicable Date was HK$8.30.

We also noted the LF Shares had been trading at a substantial discount to Lai Fung’s net asset value over the Review Period.

LF Shares trading volume

As for the trading volume of the LF Shares, it has ranged from the highest of 482,248 LF Shares (approximately 0.1% of the total number of Lai Fung’s issued shares) to no trading being recorded in 116 days out of the 288 trading days throughout the Review Period. This is equivalent to approximately 40.3% of the total number of trading days during the Review Period. There were 182 trading days, equivalent to approximately 63.2% of the total number of trading days during the Review Period where the daily trading volume was less than 10,000 LF Shares. There were only 20 trading days throughout the Review Period, equivalent to approximately 6.9% of total number of trading days, where the daily trading volume exceeded 100,000 LF Shares. The average number of LF Shares traded per day over the Review Period is approximately 25,040, which was less than 0.01% of the total number of LF Shares as at the Latest Practicable Date.

– 68 – Letter from the Lai Fung Independent Financial Adviser

The LF Share Offer Price is close to the average closing price of LF Shares over the Review Period, and is lower than the closing price of LF Shares in most trading days over the past six months. From a market trading price perspective, the LF Share Offer Price is not attractive. Meanwhile, it has been observed that the trading volume of the LF Shares over the Review Period was low. Such low trading volume may render the market price of LF Shares not reflecting the value of the LF Shares.Further, the Disinterested Shareholders are reminded that given the low liquidity of the LF Shares, disposal of such shares in the market may exert a downward pressure on the price of the LF Shares. Public float Reference is made to the announcement of Lai Fung dated 18 September 2019 relating to the shortfall in its public float. On the basis of the latest disclosures of interests in Lai Fung by its substantial shareholders, the public float of Lai Fung was approximately 18.15% as at the Latest Practicable Date, which is below the minimum prescribed by Rule 8.08(1)(a) of the Listing Rules (being 25%). There is a possibility that the public will continue to hold less than 25% of the LF Shares upon closing of the LF Offers. In that case, the Offeror and Lai Fung intend to take appropriate steps to restore the public float of Lai Fung in compliance with the Listing Rules. It should be noted that such restoration steps (i.e. issuance or placing of shares at market price or lower) may, in theory, create downward pressure on the price of LF Shares in the short term. 3.3. Comparables comparison To assess the fairness and reasonableness of the LF Share Offer Price, we have conducted a comparable analysis through identifying listed companies on the Stock Exchange engaging in similar business of the Lai Fung Group with a similar scale (the “Comparable Companies”). The comparable analysis focuses on the P/B multiples of the Comparable Companies. We consider the P/B analysis to be appropriate as Lai Fung Group and its peers are mainly engaged in property development and investment, which is an asset-heavy business. The book-value of the properties (being the property development projects or the investment properties) is an important metric that reflects a property company’s earnings capacity and its underlying value. In the selection of the Comparable Companies, our selection criteria focuses on companies that (i) are listed on the Main Board of the Stock Exchange; (ii) have a net asset value of between approximately HK$8 billion and HK$20 billion (making reference to Lai Fung Group’s unaudited net asset value of HK$15.1 billion as at 31 January 2020); and (iii) engage mainly in property development and investment (contributing over 70% of their total revenue) with substantial presence in the PRC. Disinterested Shareholders and LF Optionholders should note that despite the aforesaid criteria, the business, scale of operation, trading prospect, location of projects and capital structure of Lai Fung are not exactly the same as those of the Comparable Companies, and we have not conducted any in-depth investigation into the businesses and operations of the Comparable Companies. The Comparable Companies below have been selected based on the above criteria, and have been identified through our research using public information. We believe it is an exhaustive list based on these criteria.

– 69 – Letter from the Lai Fung Independent Financial Adviser

market price to description of Net asset value capitalisation book ratio Company name Stock code principal businesses (HK$ billion) (HK$ billion) (“P/B Ratio”) (Note 1) (Note 2) (Note 3)

SRE Group Ltd. 1207 Engaged in the property development, property investment, hotel operation and property management and related services in the PRC. 8.49 0.62 0.073

Soundwill Holdings Ltd. 878 Engaged in property-related business including property development and property leasing in Hong Kong and the PRC. 20.46 1.97 0.096

Top Spring International 3688 Engaged in the sale of development and Holdings Ltd. sales of properties, operations of hotels and property management services in the PRC. 10.76 1.51 0.141

Hon Kwok Land Investment 160 Engaged in property businesses Co., Ltd. including development, sales and leasing of properties, and provision of property management services in Hong Kong and the PRC. 11.88 1.67 0.141

Zhong An Group Ltd. 672 Engaged in property businesses, including development and sales of residential properties, and development and sales, leasing, ownership and operations of commercial properties in the PRC. 8.68 1.33 0.154

Liu Chong Hing Investment Ltd. 194 Engaged in property development and rental in Hong Kong and the PRC. 12.39 2.92 0.236

Shanghai Industrial Urban 563 Engaged in development of residential Development Group Ltd. and commercial properties, property investment and hotel operation in the PRC. 13.25 3.51 0.265

Polytec Asset Holdings Ltd. 208 Engaged in property-related businesses, including development and investment of properties in the Greater Bay Area in the PRC. 13.75 3.73 0.271

Beijing Capital Land Ltd. 2868 Engaged in real estate development and investment, commercial real estate operation and the provision of property consulting services in the PRC. 8.26 2.57 0.311

Habour Centre Development Ltd. 51 Engaged in property development, property investment and hotel in the PRC and Hong Kong. 17.08 5.71 0.334

– 70 – Letter from the Lai Fung Independent Financial Adviser

market price to description of Net asset value capitalisation book ratio Company name Stock code principal businesses (HK$ billion) (HK$ billion) (“P/B Ratio”) (Note 1) (Note 2) (Note 3)

Sunshine 100 China 2608 Engaged in property development, Holdings Ltd. property investment, property management and hotel operation in the PRC. 10.23 3.55 0.347

C C Land Holdings Ltd. 1224 Engaged in the development and investment of properties in the PRC, United Kingdom, Australia and Hong Kong. 17.51 6.99 0.399

Guorui Properties Ltd. 2329 Engaged in the sale and development of properties, property management and related services in the PRC. 13.55 6.09 0.449

Fantasia Holdings Group 1777 Engaged in property development, Co., Ltd. property investment, property agency services, property operation segment and hotel operation segment in the PRC. 15.36 8.08 0.526

Ronshine China Holdings Ltd. 3301 Engaged in sale of properties, construction contracting businesses and rental of properties in the PRC 18.35 13.42 0.731

China SCE Group 1966 Engaged in property development, Holdings Ltd. property investment and property management in the PRC. 19.66 13.84 0.704

China Overseas Grand 81 Engaged in the investment and Oceans Group Ltd. development of properties, leasing of properties and provision of hotel operation services in the PRC. 19.45 15.68 0.806

LVGEM (China) Real Estate 95 Engaged in property business Investment Co. Ltd. including property development and sales, investment and operation of commercial properties, and hotel operation, property management in the PRC. 13.22 11.35 0.858

– 71 – Letter from the Lai Fung Independent Financial Adviser

market price to description of Net asset value capitalisation book ratio Company name Stock code principal businesses (HK$ billion) (HK$ billion) (“P/B Ratio”) (Note 1) (Note 2) (Note 3)

Central China Real 832 Engaged in development of Estate Ltd. properties projects for sales and rental in the PRC. 10.09 10.89 1.079

Jiayuan International 2768 Engaged in development and Group Ltd. sale of properties in the PRC. 11.03 12.23 1.109

Gemdale Properties and 535 Engaged in property development, Investment Corporation Ltd. property investment, property management and microfinance inthe PRC. 13.50 18.93 1.402

Maximum 1.402 Minimum 0.073 Mean: 0.497 Median: 0.347

Lai Fung 1125 Engaged in investment, development and operations of service apartments, residential, office and commercial properties in the PRC. 14.92 2.98 0.15-0.20 (Note 4) (Note 5) (Note 6)

Source: the Stock Exchange website (www.hkex.com.hk)

Notes:

1. Net asset value refers to net assets reported in the respective companies’ latest published annual report.

2. Calculated based on the closing share price and number of shares in issue as at the Latest Practicable Date sourced from the website of the Stock Exchange.

3. P/B Ratio is calculated based on the respective market capitalisation at the Latest Practicable Date sourced from the website of the Stock Exchange divided by their respective latest net asset value reported in the respective companies’ latest published annual report.

4. The market capitalisation of Lai Fung is implied by the LF Share Offer Price, which is the LF Share Offer Price times the number of issued LF Shares as at the Latest Practicable Date.

5. The implied P/B Ratio of Lai Fung of approximately 0.20 times is calculated based on the LF Share Offer Price divided by the net asset value per LF Share published in the Interim Report.

6. The P/B Ratio of Lai Fung based on the LF Share Offer Price and Reassessed NAV would be approximately 0.15 times.

– 72 – Letter from the Lai Fung Independent Financial Adviser

As shown in the table above, the P/B Ratios of the Comparable Companies range from approximately 0.07 times to 1.4 times, with the mean and median being approximately 0.50 times and 0.35 times respectively. The implied P/B Ratio of Lai Fung is approximately 0.20 times based on the LF Share Offer Price and approximately 0.15 times based on the Reassessed NAV and the LF Share Offer Price, which falls within the range of those of the Comparable Companies but is much lower than their mean or median. Henceforth, from a P/B ratio analysis standpoint, the LF Share Offer Price is not attractive as the implied valuation of Lai Fung based on this price is generally lower than those of the Comparable Companies.

We wish to supplement that we have not performed price-to-earnings ratio analysis on the Comparable Companies and Lai Fung due to their business nature given the project- by-project nature of property development businesses, which may lead to fluctuating revenue and profit for each reporting period. In turn, price-to-earnings ratios of the Comparable Companies and Lai Fung may vary significantly depending on each company’s development stage and sale schedule at that time, rendering such analysis not meaningful and potentially misleading.

4. LF Option Offer Price

For the summary of the number LF Options and their respective exercise price as at the Latest Practicable Date, please refer to the above paragraph headed “Principal terms of the LF Offers” in this letter.

Based on the LF Share Offer Price of HK$8.99, an aggregate of 1,580,000 Lai Fung Options (with exercise prices ranging from HK$6.65 to HK$8.00) were offered a see-through price, being the LF Share Offer Price minus the exercise price of the relevant LF Option (the “See- through Price LF Options”) while 9,544,526 Lai Fung Options (with exercise prices ranging from HK$9.500 to HK$13.520) were offered a nominal amount of HK$0.01 for every 100 LF Options (the “Nominal amount LF Options”) as they are out-of-money.

For the See-through Price LF Options as at the Latest Practicable Date, as we consider the LF Share Offer Price to be not attractive, the see-through price (which is based on the LF Share Offer Price) is also considered not attractive.

For the Nominal amount LF Options, the holders can only receive an aggregate amount of approximately HK$955 for accepting the Lai Fung Option Offer (the “Acceptance Consideration”). In comparison, although most of the Nominal amount LF Options were currently out-of-money (having exercise prices higher than the LF Share Offer Price and the LF Share price of HK$8.30 as at the Latest Practicable Date), the LF Optionholders could hold on to the Nominal amount LF Options for the possibility of gain if the LF Share price rises beyond the exercise prices in the future. Since the Acceptance Consideration is nominal while the Nominal amount LF Options carry time value of potential gain in future, we consider the Lai Fung Option Offer is not attractive to the LF Optionholders holding the Nominal amount LF Options.

– 73 – Letter from the Lai Fung Independent Financial Adviser

RECOMMENDATION

In summary, we have considered (i) the fact that the LF Share Offer Price is below the general market price of LF Share during the past few months and as at the Last Trading Day, and the fact that the market price has dropped below the LF Share Offer Price as at the Latest Practicable Date; (ii) Lai Fung’s relatively low implied P/B Ratio based on the LF Share Offer Price as compared to other P/B Ratios of the Comparable Companies; (iii) the substantial discount of approximately 80% to the audited consolidated net asset value attributable to owners per LF Share as at 31 July 2019 that the LF Share Offer Price implies; (iv) the even more substantial discount of approximately 85% taking into account the Reassessed NAV per share compared to the LF Share Offer Price; and (v) the generally steady business outlook of Lai Fung with its rental-led strategy, steady project pipeline and rental occupancy rates despite likely near term uncertainties due to global economic and market weaknesses, we are of the view that the LF Share Offer Price is not attractive, rendering the terms of the LF Share Offer not fair and not reasonable. Accordingly, we recommend the Lai Fung Independent Board Committee to advise the Disinterested Shareholders not to accept the LF Share Offer.

As the LF Share Offer Price is considered to be not attractive, the LF Option Offer is hence not fair and not reasonable for the LF Optionholders of the See-through Price LF Options. For the Nominal amount LF Options, instead of accepting the nominal Acceptance Consideration of approximately HK$955, it makes sense for the LF Optionholders of the Nominal amount LF Options to preserve their opportunities to capture the potential gain in the event of an increase in LF Share price in the future. Accordingly, we are of the view that the Lai Fung Option Offer is not fair and not reasonable for the LF Optionholders. We recommend the Lai Fung Independent Board Committee to advise the LF Optionholders not to accept the Lai Fung Option Offer.

Disinterested Shareholders and LF Optionholders who have decided to monetise their investments in the near term before the end of the LF Offers Period are reminded to closely monitor the prices and liquidity of the LF Shares, and may, having regard to their own circumstances, consider accepting the LF Offers, if the amount they can receive under the LF Offers is higher than the net proceeds from their sale of such LF Shares in the open market.

– 74 – Letter from the Lai Fung Independent Financial Adviser

As different Disinterested Shareholders or LF Optionholders would have different investment criteria, objectives or risk appetite and profiles, we recommend any Disinterested Shareholders or LF Optionholders who may require advice in relation to any aspect of the Composite Document, or as to the action to be taken, to consult a licensed securities dealer, bank manager, solicitor, professional accountant, tax adviser or other professional adviser.

Yours faithfully, For and on behalf of Altus Capital Limited

Chang Sean Pey Leo Tam Executive Director Assistant Director

Mr. Chang Sean Pey (“Mr. Chang”) is a Responsible Officer of Altus Capital Limited licensed to carry on Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO and permitted to undertake work as a sponsor. He is also a Responsible Officer of Altus Investments Limited licensed to carry on Type 1 (dealing in securities) regulated activity under the SFO. Mr. Chang has over 20 years of experience in banking, corporate finance advisory and investment management. In particular, he has participated in sponsorship work for initial public offerings and acted as financial adviser or independent financial adviser in various corporate finance advisory transactions.

Mr. Leo Tam (“Mr. Tam”) is a Responsible Officer of Altus Capital Limited licensed to carry on Type 6 (advising on corporate finance) regulated activity under the SFO and permitted to undertake work as a sponsor. He has over five years of experience in corporate finance and advisory in Hong Kong, in particular, he has participated in sponsorship work for initial public offerings and acted as financial adviser or independent financial adviser in various corporate finance transactions. Mr. Tam is a certified public accountant of the Hong Kong Institute of Certified Public Accountants.

– 75 – Appendix I Further Terms of the LF Offers

1. procedureS FOR ACCEPTANCE

To accept any of the LF Offers, you should duly complete and sign the relevant accompanying Form(s) of Acceptance in accordance with the instructions printed thereon, which instructions form part of the terms of the relevant LF Offers.

1.1 The LF Share Offer

(a) If the share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your LF Offer Shares is/are in your name, and you wish to accept the LF Share Offer in respect of your LF Offer Shares (whether in full or in part), you must deliver the duly completed and signed WHITE Form of LF Share Offer Acceptance together with the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the number of LF Offer Shares for which you intend to accept the LF Share Offer, by post or by hand, to the Registrar, Tricor Tengis Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong marked “Lai Fung Holdings Limited — LF Share Offer” on the envelope so as to reach the Registrar as soon as possible but in any event by no later than 4:00 p.m. on the LF Share Offer Closing Date or such later time(s) and/or date(s) as the Offeror may determine and announce in accordance with the Takeovers Code.

(b) If the share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your LF Offer Shares is/are in the name of a nominee company or a name other than your own, and you wish to accept the LF Share Offer in respect of your LF Offer Shares (whether in full or in part), you must either:

(i) lodge your share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the number of LF Offer Shares for which you intend to accept the LF Share Offer with the nominee company, or other nominee, and with instructions authorising it to accept the LF Share Offer on your behalf and requesting it to deliver the WHITE Form of LF Share Offer Acceptance duly completed and signed together with the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your LF Offer Shares to the Registrar; or

– I-1 – Appendix I Further Terms of the LF Offers

(ii) arrange for the LF Offer Shares to be registered in your name by Lai Fung through the Registrar, and deliver the duly completed and signed WHITE Form of LF Share Offer Acceptance together with the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the number of LF Offer Shares for which you intend to accept the LF Share Offer to the Registrar; or

(iii) if your LF Offer Shares have been lodged with your licensed securities dealer/registered institution in securities/custodian bank through CCASS, instruct your licensed securities dealer/registered institution in securities/ custodian bank to authorise HKSCC Nominees Limited to accept the LF Share Offer on your behalf on or before the deadline set by HKSCC Nominees Limited. In order to meet the deadline set by HKSCC Nominees Limited, you should check with your licensed securities dealer/registered institution in securities/custodian bank for the timing on the processing of your instruction, and submit your instruction to your licensed securities dealer/registered institution in securities/custodian bank as required by them; or

(iv) if your LF Offer Shares have been lodged with your investor participant’s account maintained with CCASS, give your instruction via the CCASS Phone System or the CCASS Internet System on or before the deadline set by HKSCC Nominees Limited.

(c) If you have lodged (a) transfer(s) of any of your LF Offer Shares for registration in your name or if you have exercised your LF Options and have not yet received your share certificate(s), and you wish to accept the LF Share Offer in respect of those LF Offer Shares, you should nevertheless duly complete and sign the WHITE Form of LF Share Offer Acceptance and deliver it to the Registrar together with the transfer receipt(s), if any, duly signed by yourself and/or other document(s) of title or entitlement in respect of the LF Options (as the case may be). Such action will constitute an irrevocable authority to the Offeror and/or HSBC and/or their respective agent(s) to collect from Lai Fung or the Registrar on your behalf the relevant share certificate(s) when issued and to deliver such share certificate(s) to the Registrar on your behalf and to authorise and instruct the Registrar to hold such share certificate(s), subject to the terms and conditions of the LF Share Offer, as if it was/they were delivered to the Registrar with the WHITE Form of LF Share Offer Acceptance.

– I-2 – Appendix I Further Terms of the LF Offers

(d) If the share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title in respect of your LF Offer Shares is/are not readily available and/or is/are lost, as the case may be, and you wish to accept the LF Share Offer in respect of any of your LF Offer Shares, the WHITE Form of LF Share Offer Acceptance should nevertheless be duly completed, signed and delivered to the Registrar together with a letter stating that you have lost one or more of your share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title in respect of your LF Offer Shares or that it is/they are not readily available. If you subsequently find such document(s) or if it/they become(s) available, the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title should be forwarded to the Registrar as soon as possible thereafter. If you have lost the share certificate(s) and/or transfer receipt(s) and/or other document(s) of title in respect of your LF Offer Shares, you should also write to the Registrar for a form of letter of indemnity which, when completed and signed in accordance with the instructions given, should be provided to the Registrar. The Offeror has absolute discretion to decide whether any LF Offer Shares in respect of which the share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title is/are not readily available and/or is/are lost will be taken up by the Offeror.

(e) Acceptance of the LF Share Offer will be treated as valid only if the duly completed and signed WHITE Form of LF Share Offer Acceptance is received by the Registrar on or before the latest time for acceptance of the LF Share Offer and is:

(i) accompanied by the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the number of LF Offer Shares for which you intend to accept the LF Share Offer and, if that/ those share certificate(s) and/or any other document(s) of title is/are not in your name, such other document(s) (e.g. a duly stamped transfer of the relevant LF Share(s) in blank or in favour of the acceptor executed by the registered holder) in order to establish your right to become the registered holder of the relevant LF Offer Shares; or

(ii) from a registered LF Offer Shareholder or his/her personal representative (but only up to the amount of the registered holding and only to the extent that the acceptance relates to the LF Offer Shares which are not taken into account under another sub-paragraph of this paragraph (e)); or

(iii) certified by the Registrar or the Stock Exchange,

and the Registrar has recorded that the acceptance and any relevant documents required by Note 1 to Rule 30.2 of the Takeovers Code have been so received.

– I-3 – Appendix I Further Terms of the LF Offers

(f) If the WHITE Form of LF Share Offer Acceptance is executed by a person other than the registered LF Offer Shareholder, appropriate documentary evidence of authority (e.g. grant of probate or certified copy of a power of attorney) to the satisfaction of the Registrar must be produced.

(g) If the LF Share Offer is invalid, withdrawn or lapses, the Offeror shall, as soon as possible but in any event within ten (10) days thereof, return by ordinary post at your own risk the share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the LF Offer Shares tendered for acceptance together with the duly cancelled WHITE Form of LF Share Offer Acceptance to the relevant LF Offer Shareholder(s).

(h) No acknowledgement of receipt of any WHITE Form of LF Share Offer Acceptance and/or share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your LF Offer Shares tendered for acceptance will be given.

1.2 The LF Option Offer

(a) If you are an LF Optionholder and you wish to accept the LF Option Offer in respect of your LF Options, you must deliver the duly completed and signed PINK Form of LF Option Offer Acceptance together with the relevant certificate(s), document(s) of title or entitlement in respect of the LF Options and/ or any other document(s) (if applicable) evidencing the grant of the LF Options to you (and/or any satisfactory indemnity or indemnities required in respect thereof) for your holding of the LF Options or if applicable, for not less than the number of the LF Options in respect of which you intend to accept the LF Option Offer, by post or by hand, to the company secretary of Lai Fung at 11th Floor, Lai Sun Commercial Centre, 680 Cheung Sha Wan Road, Kowloon, Hong Kong marked “Lai Fung Holdings Limited — LF Option Offer” on the envelope so as to reach the company secretary of Lai Fung as soon as possible but in any event by no later than 4:00 p.m. on the LF Share Offer Closing Date or such later time(s) and/ or date(s) as the Offeror may determine and announce in accordance with the Takeovers Code.

(b) If the PINK Form of LF Option Offer Acceptance is executed by a person other than the registered LF Optionholder, appropriate documentary evidence of authority (e.g. grant of probate or certified copy of a power of attorney) to the satisfaction of the company secretary of Lai Fung must be produced.

– I-4 – Appendix I Further Terms of the LF Offers

(c) If the LF Option Offer is invalid, withdrawn or lapses, the Offeror shall, as soon as possible but in any event within ten (10) days thereof, return by delivering the relevant certificate(s), document(s) of title or entitlement in respect of the LF Options, and/or any other document(s) (if applicable) evidencing the grant of the LF Options to you (and/or any satisfactory indemnity or indemnities required in respect thereof) together with the duly cancelled PINK Form of LF Option Offer Acceptance to the office of Lai Fung in Hong Kong for collection by the relevant LF Optionholders.

(d) No acknowledgement of receipt of any PINK Form of LF Option Offer Acceptance and/or the relevant certificate(s), document(s) of title or entitlement in respect of your LF Options and/or any other document(s) (if applicable) evidencing the grant of the LF Options to you (and/or any satisfactory indemnity or indemnities required in respect thereof) will be given.

2. SETTLEMENT UNDER THE LF OFFERS

2.1 The LF Share Offer

Subject to the LF Offers becoming or being declared unconditional in all respects and provided that a duly completed WHITE Form of LF Share Offer Acceptance and the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the relevant LF Offer Shares as required by Note 1 to Rule 30.2 of the Takeovers Code are complete and in good order in all respects and have been received by the Registrar before the close of the LF Share Offer, a cheque for the amount due to each of the LF Offer Shareholders who accepts the LF Share Offer less seller’s ad valorem stamp duty in respect of the LF Offer Shares tendered by him under the LF Share Offer will be despatched to such LF Offer Shareholder by ordinary post at his own risk as soon as possible but in any event within seven (7) Business Days following the later of (i) the date on which the LF Offers become or are declared unconditional in all respects; and (ii) the date of receipt of a duly completed WHITE Form of LF Share Offer Acceptance together with all of the relevant document(s) by the Registrar to render such acceptance under the LF Share Offer valid.

Settlement of the consideration to which any LF Offer Shareholder is entitled under the LF Share Offer will be implemented in full in accordance with its terms (save in respect of the payment of the seller’s ad valorem stamp duty) without regard to any lien, right of set-off, counterclaim or other analogous right to which the Offeror may otherwise be, or claim to be, entitled against such LF Offer Shareholder.

No fraction of a cent will be payable and the amount of consideration payable to an LF Offer Shareholder who accepts the LF Share Offer will be rounded down to the nearest cent.

– I-5 – Appendix I Further Terms of the LF Offers

Cheque(s) not presented for payment within six months from the date of issue of the relevant cheque(s) will not be honoured and be of no further effect, and in such circumstances cheque holders should contact the Offeror for payment.

2.2 The LF Option Offer

Subject to the LF Offers becoming or being declared unconditional in all respects and provided that a duly completed and signed PINK Form of LF Option Offer Acceptance and the relevant certificate(s), document(s) of title or entitlement in respect of the LF Options and/or any other document(s) (if applicable) evidencing the grant of the LF Options to you (and/or any satisfactory indemnity or indemnities required in respect thereof) are complete and in good order in all respects and have been received by the company secretary of Lai Fung before the close of the LF Option Offer, a cheque for the amount due to each of the LF Optionholders who accepts the LF Option Offer in respect of the LF Options surrendered by him in acceptance of the LF Option Offer will be available for collection at the office of Lai Fung in Hong Kong at 11th Floor, Lai Sun Commercial Centre, 680 Cheung Sha Wan Road, Kowloon, Hong Kong within seven (7) Business Days following the later of (i) the date on which the LF Offers become or are declared unconditional in all respects; and (ii) the date of receipt of a duly completed PINK Form of LF Option Offer Acceptance together with all the relevant document(s) by the company secretary of Lai Fung to render such acceptance, surrender and cancellation under the LF Option Offer valid.

Settlement of the consideration to which any LF Optionholder is entitled to under the LF Option Offer will be implemented in full in accordance with its terms, without regard to any lien, right of set-off, counterclaim or other analogous right to which the Offeror may otherwise be, or claim to be, entitled against such LF Optionholder.

No fraction of a cent will be payable and the amount of consideration payable to an LF Optionholder who accepts the LF Option Offer will be rounded down to the nearest cent.

3. accepTANCE PERIOD AND REVISIONS

Unless the LF Offers are revised or extended in accordance with the Takeovers Code, to be valid, the WHITE Form of LF Share Offer Acceptance must be received by the Registrar and the PINK Form of LF Option Offer Acceptance must be received by the company secretary of Lai Fung, in each case, in accordance with the instructions printed thereon and in this Composite Document by 4:00 p.m. on the LF Share Offer Closing Date.

– I-6 – Appendix I Further Terms of the LF Offers

If the LF Offers are revised or extended, the Offeror will issue an announcement in relation to such revision or extension of the LF Offers, which announcement will either state the next LF Share Offer Closing Date or, if the LF Offers have become or been declared unconditional as to acceptances, include a statement that the LF Offers will remain open until further notice. In the latter case, at least fourteen (14) days’ notice in writing must be given, before the LF Offers are closed, to those LF Offer Shareholders and LF Optionholders who have not accepted the relevant LF Offers. If, in the course of the LF Offers, the Offeror revises the terms of the LF Offers, all the LF Offer Shareholders and the LF Optionholders, whether or not they have already accepted the LF Offers, will be entitled to accept the revised LF Offers under the revised terms. Any revised LF Offers must be kept open for at least fourteen (14) days or, if longer and to the extent required by applicable U.S. regulations (including where there is a change in the LF Share Offer Price), at least 10 U.S. Business Days following the date on which the revised Composite Document is posted, and shall not be closed earlier than Friday, 22 May 2020. In any case where the LF Offers are revised, and the consideration offered under each of the revised LF Offers does not represent on such date a reduction in the value of the LF Offers in its original or any previously revised form(s), the benefit of such revised LF Offers will be made available as set out herein to acceptors of the LF Offers in its original or any previously revised form(s) (hereinafter called “previous acceptor(s)”). The execution by, or on behalf of, a previous acceptor of any Form of Acceptance shall be deemed to constitute acceptance of the LF Offers as so revised.

The Offeror may introduce new conditions to be attached to any revision to the terms of the LF Offers, or any subsequent revision thereof, but only to the extent necessary to implement the revised LF Offers and subject to the consent of the Executive.

If the LF Share Offer Closing Date is extended, any reference in this Composite Document and in the Forms of Acceptance to the LF Share Offer Closing Date shall, except where the context otherwise requires, be deemed to refer to the subsequent LF Share Offer Closing Date.

There is no obligation on the Offeror to extend the LF Offers if the Conditions are not satisfied by the first LF Share Offer Closing Date (beingFriday, 22 May 2020).

4. nomINEE REGISTRATION

To ensure equality of treatment of all the LF Offer Shareholders, those LF Offer Shareholders who hold LF Offer Shares as nominee on behalf of more than one beneficial owner should, as far as practicable, treat the holding of each beneficial owner separately. It is essential for the beneficial owners of the LF Offer Shares whose investments are registered in the names of nominees to provide instructions to their nominees of their intentions with regard to the LF Offers. Acceptance of the LF Share Offer by any nominee will be deemed to constitute a warranty by such nominee to the Offeror that the number of LF Offer Shares it has indicated in the Form of LF Share Offer Acceptance is the aggregate number of LF Offer Shares for which such nominee has received authorisations from the beneficial owners to accept the LF Share Offer on their behalf.

– I-7 – Appendix I Further Terms of the LF Offers

5. ANNOUNCEMENTS

An announcement will be made when the LF Offers become or are declared unconditional as to acceptances and when the LF Offers become or are declared unconditional in all respects.

By 6:00 p.m. on the LF Share Offer Closing Date (or such later time(s) and/or date(s) as the Executive may in exceptional circumstances permit), the Offeror must inform the Executive and the Stock Exchange of its decision in relation to the revision, extension, expiry or unconditionality of the LF Offers. The Offeror must publish an announcement in accordance with the Listing Rules on the Stock Exchange’s website by 7:00 p.m. on the LF Share Offer Closing Date stating the results of the LF Offers and whether the LF Offers have been revised, extended, expired or have become or been declared unconditional (whether as to acceptances or in all respects). The announcement will state the following:

(a) the total number of LF Offer Shares and LF Options for which acceptances of the LF Offers have been received;

(b) the total number of LF Offer Shares and LF Options held, controlled or directed by the Offeror and the Offeror Concert Parties before the LF Offer Period;

(c) the total number of LF Offer Shares and LF Options acquired or agreed to be acquired during the LF Offer Period by the Offeror and the Offeror Concert Parties; and

(d) details of any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) in Lai Fung which the Offeror and any of the Offeror Concert Parties have borrowed or lent, save for any borrowed LF Offer Shares which have been either on-lent or sold.

The announcement will specify the percentages of the issued share capital, and the percentages of voting rights, represented by these numbers of LF Offer Shares.

In computing the total number of LF Offer Shares and LF Options represented by acceptances, only valid acceptances that are complete, in good order and fulfil the conditions set out in this Appendix I, and which have been received by the Registrar or the company secretary of Lai Fung (as the case may be) by no later than 4:00 p.m. on the LF Share Offer Closing Date, being the latest time and date for acceptance of the LF Offers, shall be included.

As required under the Takeovers Code, all announcements in relation to the LF Offers will be made in accordance with the requirements of the Takeovers Code and the Listing Rules.

If any of the Offeror, the Offeror Concert Parties or their respective advisers make any statement during the LF Offer Period about the level of acceptances or the number or percentage of accepting LF Offer Shareholder or LF Optionholders, the Offeror must make an immediate announcement in compliance with Note 2 to Rule 19 of the Takeovers Code.

– I-8 – Appendix I Further Terms of the LF Offers

6. rIGHT OF WITHDRAWAL

The LF Share Offer is conditional upon the fulfilment of the Conditions set out in the “Letter from HSBC” in this Composite Document and the LF Option Offer is conditional upon the LF Share Offer becoming or being declared unconditional in all respects. Acceptances of the LF Offers tendered by the LF Offer Shareholders and the LF Optionholders, respectively, shall be irrevocable and cannot be withdrawn, except in the circumstances set out in this paragraph and the paragraph below. Rule 17 of the Takeovers Code provides that an acceptor of any of the LF Offers shall be entitled to withdraw his acceptance after twenty-one (21) days from the first LF Share Offer Closing Date (being Friday, 22 May 2020) if the LF Share Offer has not by then become unconditional as to acceptances and up to the earlier of such time as the LF Share Offer becomes or is declared unconditional as to acceptances and 4:00 p.m. on the 60th day from the date of despatch of this Composite Document (being Tuesday, 23 June 2020 (or the date beyond which the Offeror has stated that the LF Offers will not be extended, if applicable)).

Under Rule 19.2 of the Takeovers Code, if the Offeror is unable to comply with the requirements set out in section 5 “Announcements” in this Appendix I above, the Executive may require that the holders of LF Offer Shares and LF Options who have tendered acceptances to the relevant LF Offers be granted a right of withdrawal on terms that are acceptable to the Executive until the requirements set out in that section are met.

7. HONG KONG STAMP DUTY

Seller’s ad valorem stamp duty at a rate of 0.1% of the market value of the LF Offer Shares or consideration payable by the Offeror in respect of the relevant acceptances of the LF Share Offer, whichever is higher (rounded up to the nearest HK$1.00), will be deducted from the amount payable to the relevant LF Offer Shareholder on acceptance of the LF Share Offer. The Offeror will arrange for payment of the seller’s ad valorem stamp duty on behalf of the accepting LF Offer Shareholders in connection with the acceptance of the LF Share Offer and the transfer of the LF Offer Shares.

No stamp duty is payable in connection with the acceptances of the LF Option Offer and the cancellation of the LF Options.

8. GENERAL

(a) All communications, notices, Form(s) of Acceptance, share certificate(s), transfer receipt(s), document(s) of title or entitlement in respect of the LF Options and/or documentary evidence of authority (and/or any satisfactory indemnity or indemnities required in respect thereof) if delivered by or sent to or from the LF Offer Shareholders or the LF Optionholders or their designated agents by post, shall be posted at their own risk, and none of LSG, LSD, the Offeror, eSun, Lai Fung, HSBC and any of their respective directors, the Registrar or any other parties involved in the LF Offers and any of their respective agents accepts any liability for any loss or delay in postage or any other liabilities that may arise as a result thereof.

– I-9 – Appendix I Further Terms of the LF Offers

(b) The provisions set out in the Form(s) of Acceptance form part of the terms and conditions of the LF Offers.

(c) The accidental omission to despatch this Composite Document and/or Form(s) of Acceptance or any of them to any person to whom the LF Offers are made will not invalidate the LF Offers in any way.

(d) The LF Offers are, and all acceptances will be, governed by and construed in accordance with the laws of Hong Kong. Execution of a Form of Acceptance by or on behalf of any person will constitute the agreement of such person that the courts of Hong Kong shall have exclusive jurisdiction to settle any dispute which may arise in connection with LF Offers.

(e) Due execution of the Form(s) of Acceptance will constitute an authority to the Offeror, HSBC or such person or persons as the Offeror may direct to complete, amend and execute any document on behalf of the person or persons accepting the LF Offers and to do any other act that may be necessary or expedient for the purposes of vesting in the Offeror, or such person or persons as it may direct, the LF Offer Shares and/or cancelling the LF Options in respect of which such person or persons has/have accepted the LF Offers.

(f) Subject to the LF Offers becoming or being declared unconditional in all respects, acceptance of the LF Offers by any person will be deemed to constitute a representation and warranty by such person or persons to:

(i) LSG, LSD, the Offeror, Lai Fung and HSBC, that the LF Offer Shares sold by such person or persons to the Offeror are free from all Encumbrances and are sold together with all rights attaching to them as at the LF Share Offer Closing Date or subsequently becoming attached to them, including the right to receive all dividends and distributions, if any, declared, made or paid on or after the LF Share Offer Closing Date; and

(ii) LSG, LSD, the Offeror, Lai Fung and their respective advisers, including HSBC, the financial adviser to LSD and the Offeror in respect of the LF Offers, that if such LF Offer Shareholder/LF Optionholder accepting the LF Share Offer/LF Option Offer is a citizen, resident or national of a jurisdiction outside Hong Kong, he/she has observed and is permitted under all applicable laws and regulations to which such overseas LF Offer Shareholder/LF Optionholder is subject to receive and accept the LF Share Offer/LF Option Offer and any revision thereof, and that he/she has obtained all requisite governmental, exchange control or other consents and made all registrations or filings required in compliance with all

– I-10 – Appendix I Further Terms of the LF Offers

necessary formalities and regulatory or legal requirements, and all requirements for the payment by the accepting LF Offer Shareholders or, as the case may be, LF Optionholders of any transfer or other taxes in respect of their acceptances, and that he/she has not taken or omitted to take any action which will or may result in LSG, LSD, the Offeror, eSun, Lai Fung or their respective advisers, including HSBC, the financial adviser to LSD and the Offeror, or any other person acting in breach of the legal or regulatory requirements of any jurisdiction in connection with the LF Offers or his/her acceptance thereof and such acceptance, surrender and/or cancellation shall be valid and binding in accordance with all applicable laws and regulations.

(g) Subject to the LF Share Offer becoming or being declared unconditional in all respects, the acceptance of the LF Option Offer by an LF Optionholder will result in the cancellation of those relevant LF Options, together with all rights attaching thereto.

(h) Reference to any of the LF Offers in this Composite Document and in the Form(s) of Acceptance shall include any extension and/or revision thereof.

(i) In making their decisions with regard to the LF Offers, the LF Offer Shareholders and the LF Optionholders should rely on their own examination of LSD, the Offeror, the Lai Fung Group and the terms of the LF Offers, including the merits and risks involved. The contents of this Composite Document, including any general advice or recommendation contained herein, together with the Form(s) of Acceptance shall not be construed as any legal or business advice on the part of LSG, LSD, the Offeror, eSun, Lai Fung and/or HSBC. The LF Offer Shareholders and the LF Optionholders should consult their own professional advisers for professional advice.

(j) The English text of this Composite Document and the accompanying Form(s) of Acceptance shall prevail over their respective Chinese texts for the purpose of interpretation.

– I-11 – Appendix II Financial Information of the Lai Fung Group

I. FINANCIAL SUMMARY

The following summary financial information for each of the three financial years ended 31 July 2017, 31 July 2018 and 31 July 2019 and for the six months ended 31 January 2020 is extracted from the respective published audited consolidated financial statements of the Lai Fung Group as set forth in the annual reports for the years ended 31 July 2017, 31 July 2018 and 31 July 2019, respectively, and the interim report for the six months ended 31 January 2020 of the Lai Fung Group.

The auditors of Lai Fung did not issue any modified opinion nor any emphasis of matter or material uncertainty related to going concern contained in the auditors’ report of the Lai Fung Group for any of the three years ended 31 July 2017, 31 July 2018 and 31 July 2019. There are no exceptional items because of size, nature or incidence of the Lai Fung Group for each of the three years ended 31 July 2017, 31 July 2018 and 31 July 2019.

In this Appendix II, references to “the Company” shall mean Lai Fung.

Summary Consolidated Income Statement and Statement of Comprehensive Income

Six months ended 31 January Year ended 31 July 2020 2019 2018 2017 HK$’000 HK$’000 HK$’000 HK$’000 (Unaudited) (Audited) (Audited) (Audited)

TURNOVER 599,898 1,461,249 950,822 1,326,682 PROFIT/(LOSS) BEFORE TAX AND TAX INDEMNITY (365,378) 1,170,537 1,556,005 1,652,804 Tax (205,412) (430,482) (357,229) (556,156) Tax indemnity — — 92,695 493,936 PROFIT/(LOSS) FOR THE YEAR/PERIOD (570,790) 740,055 1,291,471 1,590,584 Attributable to: Owners of the Company (442,388) 668,556 1,180,117 1,477,452 Non-controlling interests (128,402) 71,499 111,354 113,132

EARNINGS/(LOSS) PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY Basic (HK$1.351) HK$2.043 HK$3.615 HK$4.547 Diluted (HK$1.351) HK$2.041 HK$3.600 HK$4.542

DIVIDEND Dividend per share — HK$0.20 HK$0.20 HK$0.20 Amount of dividends distributed to owners of the Company — 65,499 65,409 65,184

– II-1 – Appendix II Financial Information of the Lai Fung Group

Six months ended 31 January Year ended 31 July 2020 2019 2018 2017 HK$’000 HK$’000 HK$’000 HK$’000 (Unaudited) (Audited) (Audited) (Audited)

TOTAL COMPREHENSIVE INCOME/(EXPENSES) (995,610) 453,221 1,065,062 1,426,802 Attributable to: Owners of the Company (851,504) 391,002 964,858 1,314,396 Non-controlling interests (144,106) 62,219 100,204 112,406

Fair value gains/(losses) on investment properties (387,598) 634,810 860,037 800,104 Depreciation (111,996) (55,042) (78,433) (72,226) Foreign exchange differences, net 16,446 22,050 (31,509) (58,715) Fair value gains on cross currency swaps 3,742 18,050 38,049 111,657 Gain on disposal of assets classified as held for sale 47,587 — — — Gain on swap of properties — — 41,379 — Write-down of properties under development to net realisable value — — (38,222) —

Summary Consolidated Statement of Financial Position

31 January 31 July 2020 2019 2018 2017 HK$’000 HK$’000 HK$’000 HK$’000 (Unaudited) (Audited) (Audited) (Audited)

Total assets 31,263,016 31,309,627 28,228,264 25,220,279 Total liabilities (16,141,039) (15,127,944) (12,439,940) (10,450,915)

15,121,977 16,181,683 15,788,324 14,769,364

Equity attributable to owners of the Company Issued capital 1,637,483 1,636,935 1,635,221 1,628,509 Reserves 13,280,924 14,197,072 13,867,646 12,955,602 Non-controlling interests 203,570 347,676 285,457 185,253

15,121,977 16,181,683 15,788,324 14,769,364

– II-2 – Appendix II Financial Information of the Lai Fung Group

II. conSOLIDATED FINANCIAL STATEMENTS

Lai Fung is required to set out or refer to in this Composite Document the consolidated statement of financial position, consolidated statement of cash flows and any other primary statement as shown in (i) the audited consolidated financial statements of the Lai Fung Group for the year ended 31 July 2019 (the “2019 Financial Statements”) and (ii) the unaudited condensed consolidated interim financial statements of the Lai Fung Group for the six months ended 31 January 2020 (the “2020 Interim Financial Statements”), together with the notes to the relevant published accounts which are of major relevance to the appreciation of the above financial information.

The 2019 Financial Statements, together with significant accounting policies, are set out from page 98 to page 198 in the Annual Report 2019 of Lai Fung, which was published on 20 November 2019. The Annual Report 2019 is posted on Lai Fung’s website http://www.laisun. com/lai-fung-holdings/en-US/Pages/home. Please also see below a quick link to the Annual Report 2019:

http://www.laisun.com/files/E_1125_Annual-Report-2018-2019_20191120.pdf

The 2020 Interim Financial Statements, together with significant accounting policies, are set out from page 2 to page 25 in the Interim Report 2020 of Lai Fung, which was published on 9 April 2020. The Interim Report 2020 is posted on Lai Fung’s website http://www.laisun.com/ lai-fung-holdings/en-US/Pages/home. Please also see below a quick link to the Interim Report 2020:

http://www.laisun.com/files/E_1125_Interim-Report_20200409.pdf

The 2019 Financial Statements and the 2020 Interim Financial Statements (but not any other part of the Annual Report 2019 and Interim Report 2020 in which they respectively appear) are incorporated by reference into this Composite Document and form part of this Composite Document.

III. INDEBTEDNESS, CONTINGENCIES AND COMMITMENTS

As at 29 February 2020, being the latest practicable date for ascertaining certain information relating to this indebtedness statement, the Lai Fung Group had outstanding consolidated total borrowings (after intra-group elimination) of approximately HK$9,948 million comprising bank loans of approximately HK$6,750 million, unsecured guaranteed notes of approximately HK$2,714 million, unsecured and unguaranteed advances from a former substantial shareholder of approximately HK$52 million, unsecured and unguaranteed other borrowings of approximately HK$41 million, unsecured and unguaranteed loans from a fellow subsidiary of approximately HK$382 million and lease liabilities of approximately HK$9 million.

– II-3 – Appendix II Financial Information of the Lai Fung Group

As at 29 February 2020, the Lai Fung Group had bank loans of approximately HK$6,750 million in aggregate, of which approximately HK$3,722 million were secured while the remaining HK$3,028 million were unsecured. Certain properties (including investment properties, completed properties for sale and serviced apartments (including related leasehold improvements)) and certain bank balances were pledged to banks to secure bank loan facilities granted to the Lai Fung Group. Equity interests in certain subsidiaries of Lai Fung were pledged to banks to secure certain bank loan facilities granted to the Lai Fung Group. In addition, LSD (an intermediate holding company of Lai Fung), eSun (an intermediate holding company of Lai Fung), Lai Fung and certain of its subsidiaries have also provided corporate guarantees in favour of the banks in respect of certain bank loan facilities granted to the Lai Fung Group.

The Lai Fung Group had provided guarantees to certain banks in respect of mortgage loan facilities granted by such banks to certain end-buyers of property units developed by the Lai Fung Group. Pursuant to the terms of the guarantees, upon default in mortgage payments by these end-buyers, the Lai Fung Group will be responsible to repay the outstanding mortgage loan principal amounts together with accrued interest owed by the end-buyers in default. The Lai Fung Group’s obligation in relation to such guarantees has been gradually relinquished along with the settlement of the mortgage loans granted by the banks to the end-buyers. Such obligation will also be relinquished when the property ownership certificates for the relevant properties are issued and/or the end-buyers have fully repaid the mortgage loans. As at 29 February 2020, in respect of these guarantees, the contingent liabilities of the Lai Fung Group are estimated to be approximately HK$620 million.

Save as aforesaid and apart from intra-group liabilities, the Lai Fung Group did not, as at 29 February 2020, have any material outstanding (i) debt securities, whether issued and outstanding, authorised or otherwise created but unissued, or term loans, whether guaranteed, unguaranteed, secured (whether the security is provided by the Lai Fung Group or by third parties) or unsecured; (ii) other borrowings or indebtedness in the nature of borrowings including bank overdrafts and liabilities under acceptances (other than normal trade bills) or acceptance credits or hire purchase commitments, whether guaranteed, unguaranteed, secured or unsecured; (iii) mortgage or charges; or (iv) guarantees or other contingent liabilities.

– II-4 – Appendix II Financial Information of the Lai Fung Group

IV. maTERIAL CHANGES

The Lai Fung Directors confirm that save for the following matters, there has been no material change in the financial or trading position or outlook of the Lai Fung Group subsequent to 31 July 2019, the date to which the latest audited consolidated financial statements of Lai Fung were made up, up to and including the Latest Practicable Date:

(i) recognition of a fair value loss on investment properties for the six months ended 31 January 2020 arising from revaluation of Lai Fung Group’s investment properties, which negatively impacted Lai Fung Group’s results for the six months ended 31 January 2020; and

(ii) the decline in occupancy rates for Lai Fung Group’s commercial properties, in particular for hotels and service apartments, from approximately 78%-90% as at 31 July 2019 to approximately 31%-34% as at 31 March 2020, and the corresponding rental income thereof, as well as the interruptions of the construction and sales of properties caused by the outbreak of COVID-19 epidemic in the PRC from January to March 2020.

V. properTY INTERESTS AND PROPERTY VALUATION REPORT

Knight Frank, an independent valuer, has valued the property interests of the Lai Fung Group as at 31 January 2020. The text of the letter, summary of valuation and the valuation certificates are set out in Appendix III to this Composite Document.

– II-5 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

The following is the full text of the letter and valuation report prepared for the purpose of incorporation into this Composite Document received from Knight Frank Petty Limited, an independent valuer, in connection with the valuation as at 31 January 2020 of the market values of the property interests of Lai Fung, its subsidiaries and associated companies which it has a direct or indirect interest of 30% or more of the voting rights.

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

Board of Directors Lai Sun Garment (International) Limited 11th Floor Lai Sun Commercial Centre 680 Cheung Sha Wan Road Hong Kong

Board of Directors Lai Sun Development Company Limited 11th Floor Lai Sun Commercial Centre 680 Cheung Sha Wan Road Hong Kong

Board of Directors Holy Unicorn Limited 11th Floor Lai Sun Commercial Centre 680 Cheung Sha Wan Road Hong Kong

– III-1 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Board of Directors eSun Holdings Limited 11th Floor Lai Sun Commercial Centre 680 Cheung Sha Wan Road Hong Kong

Board of Directors Lai Fung Holdings Limited 11th Floor Lai Sun Commercial Centre 680 Cheung Sha Wan Road Hong Kong

24 April 2020

Dear Sirs

Various Property Interests in the People’s Republic of China and Hong Kong

In accordance with your instructions for us to value the property interests held by Lai Fung Holdings Limited (the “Company”) or its subsidiaries, associates or joint ventures (hereinafter together referred to as the “Group”) in the People’s Republic of China (the “PRC”) and Hong Kong, 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 values of the property interests as at 31 January 2020.

Basis of Valuation

Our valuation is our opinion of the market values of the property interests, 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.

– III-2 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

In preparing our valuation report, we have complied with “The HKIS Valuation Standards 2017” published by the Hong Kong Institute of Surveyors, all requirements contained in the provision 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 Rule 11 of the Code on Takeovers and Mergers published by the Securities and Futures Commission.

Valuation Methodology

In forming our opinion of the values of the property interests in Groups I and III which are held by the Group in the PRC for investment purpose and held by the Group in the PRC respectively, we have valued the properties by using “Income Approach — term and reversion method” by capitalization the net incomes shown on the tenancy schedules handed to us by the Group and made provisions for reversionary income potential. We have also made reference to sales evidence as available in the market.

We have valued the property interests in Groups II and V which are held by the Group in the PRC for sale purpose and held by the Group in Hong Kong for owner occupation purpose respectively by using Market Approach with reference to market comparable transactions/information and assumed sale of property interests with the benefit of vacant possession.

In valuing property interests in Group IV which are held under development by the Group in the PRC, we have valued the property interests on the basis that the properties will be developed and completed in accordance with the Group’s latest development proposals provided to us. We have assumed that approvals for the proposals have been obtained without any onerous condition which would affect the values of the property interests. In arriving at our opinion of values, we have made reference to comparable transactions/information in the locality and also taken into account the construction costs that will be expended to reflect the quality of the completed developments.

Due to the specific purpose for which the buildings and structures of property no 20 (Lionsgate portion) which is held by the Group in the PRC have been designed, there is no readily identifiable market comparable, we have thus valued it by Cost Approach with reference to the depreciated replacement cost. Depreciated replacement cost is defined as “the current cost of replacing an asset with its modern equivalent asset less deduction for physical deterioration and all relevant forms of obsolescence and optimization.” It is based on an estimate of the market value of the land in its existing use, plus the current cost of replacement of the improvements less allowance for physical deterioration and all relevant forms of obsolescence and optimization. In arriving at the value of the land portion, reference has been made to the sales evidence as available in the locality. The depreciated replacement cost of the property is subject to adequate potential profitability* of the business. It is assumed that the replacing of the property will be in compliance with the relevant laws and regulations and completed in timely fashion. In our valuation, it applies to the whole of the complex or development as a unique interest, and no piecemeal transactions of the complex or development is assumed.

* The assumption of adequate potential profitability of the business is the underlying assumption for application of the depreciated replacement cost while it is considered that depreciated replacement cost of a property could represent the market value of the property valued under the condition that the business conducting inside the property is profitable so that depreciated replacement cost of the property could prudently represent the market value of the property. Otherwise, without this assumption, adopting depreciated replacement cost of the property to represent market value of the property would be in doubt since business conducting inside the property is not having adequate potential profitability.

– III-3 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Title Documents and Encumbrances

We have caused land search to be made at the Land Registry for the Hong Kong property valued and have been provided by the Group with extracts of title documents relating to the property interests in the PRC. However, we have not inspected the original documents to ascertain any amendments which may not appear on the copies handed to us by the Group. In the course of our valuation, we have relied on the information and legal opinion given by the Group and its PRC legal advisers, Allbright Law Offices and Guangda Law Firm in April 2020, regarding the title and other legal matters relating to the properties in the PRC.

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

Source of Information

We have relied to a considerable extent on the information given by the Group and the legal opinion of the Group’s PRC legal advisers. We have no reason to doubt the truth and accuracy of the information provided to us by the Group and/or its PRC legal advisers 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, completion date of buildings, particulars of occupancy, tenancy summaries, joint-venture agreements, development schemes, construction costs, sites and floor areas. Dimension, measurements and areas included in the valuation report attached are based on information provided to us and are therefore only approximations. We have not been able to carry out on-site measurements to verify the correctness of sites and floor areas of the properties. We have exercised our due diligence in verifying the provided sites and floor areas by checking against the relevant documents provided. Meanwhile, for remaining portion of the properties without relevant supporting documents, we have further assumed that the sites and floor 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.

Inspection and Structural Condition

We have inspected the exterior and, where possible, the interior of the properties. The inspection was carried out by our Ocean Ruan, Moira Zhou and Beny Chan in February 2020. During our inspections, we noted that the properties appeared to be in a generally reasonable state of repair commensurate with their ages and uses. However, we have not carried out investigations on site to determine the suitability of the ground conditions and the services, etc for any future development. Our valuations are prepared on the assumption that these aspects are satisfactory. Moreover, no structural survey has been made, but in the course of our inspection, we did not note any serious defects. We are not, however, able to report that the properties are free from rot, infestation or any other structural defects, nor were any tests carried out to any of the services.

– III-4 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Identity of Property to be valued

We exercised reasonable care and skill to ensure that the properties, identified by the property addresses in your instructions, are the properties 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 valuations are prepared on the assumption that the properties are unaffected. Where contamination is suspected or confirmed, but adequate investigation has not been carried out and made available to us, then the valuations will be qualified.

Compliance with Relevant Ordinances and Regulations

We have assumed that the properties have 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 properties 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.

Remarks

In our valuation, we have prepared the valuation based on information and data available to us as at the valuation date. While the market is influenced by various policies and regulations, increasing complexity in international trade tensions, the recent regional health issue of outbreak of Novel Coronavirus is expected to bring additional fluctuations to the real estate market. It must be recognised that the regional health problem, change in policy direction, mortgage requirements and international trade tensions could have immediate and sweeping impact on the real estate market apart from typical market variations. It should therefore be noted that any market violation, policy, geographical or other unexpected circumstances after the valuation date may affect the values of the properties.

According to the information provided by the Group, the potential tax liability which would arise on the disposal of (i) property interest of Group V in Hong Kong is mainly stamp duty, normally borne by the purchaser and (ii) property interests of Groups I, II, III and IV in the PRC are mainly PRC land appreciation tax (at progressive rates from 30% to 60% on the appreciation amount) and PRC corporate income tax (at 25% on the gain).

– III-5 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Risk Factor

The current market is influenced by various policies and regulations, increasing complexity in international trade tensions and the recent regional health issue of outbreak of Novel Coronavirus. There may be a difference, be it material or not, between our estimation of market value based on the current market and the actual transaction price which will be affected by many other factors such as the above-mentioned.

Currency

Unless otherwise stated, all sums stated in our valuation reports are in Hong Kong dollars. The exchange rate adopted for conversion is HK$1 = RMB0.8993 as at the date of valuation.

Our summary of values and valuation reports are attached.

Yours faithfully For and on behalf of Knight Frank Petty Limited

Clement W M Leung Thomas H M Lam MFin MCIREA MHKIS MRICS RPS (GP) MCIREA FRICS FHKIS RPS (GP) RICS Registered Valuer RICS Registered Valuer Executive Director, Head of China Valuation Executive Director, Head of Valuation & Advisory & Advisory

Notes: Clement Leung is a qualified valuer who has27 years of experiences in property valuation and consultancy services in the PRC and Hong Kong.

Thomas Lam is a qualified valuer who has 20 years of extensive experiences in market research, valuation and consultancy in the PRC, Hong Kong, Macao and the Asia Pacific region.

– III-6 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

SUMMARY OF VALUES

market value M market value in in existing state existing state Interest attributable to as at attributable the Group as at property 31 January 2020 to the Group 31 January 2020

Group I — Property interests held by the Group in the PRC for investment purpose

1. Hong Kong Plaza HK$7,013,000,000 100% HK$7,013,000,000 282 & 283 Huaihaizhong Road Huangpu District, Shanghai The PRC (portion owned by Shanghai Li Xing Real Estate Development Co Ltd)

2. Various serviced apartment units in HK$1,193,000,000 100% HK$1,193,000,000 North Tower Hong Kong Plaza 282 Huaihaizhong Road Huangpu District, Shanghai The PRC (portion owned by Good Strategy Ltd)

3. B3 Hui Yi Garden HK$41,700,000 100% HK$41,700,000 No 18 of Alley 905, Huashan Road Xuhui District, Shanghai The PRC

4. Commercial portion of Regents Park HK$233,200,000 95% HK$221,540,000 88 Huichuan Road Changning District, Shanghai The PRC

5. Various portions of HK$1,102,500,000 100% HK$1,102,500,000 Shanghai May Flower Plaza the junction of Da Tong Road and Zhi Jiang Xi Road, Sujiaxiang Jing’an District, Shanghai The PRC

– III-7 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

market value M market value in in existing state existing state Interest attributable to as at attributable the Group as at property 31 January 2020 to the Group 31 January 2020

6. May Flower Plaza HK$2,057,000,000 100% HK$2,057,000,000 68 Zhongshanwu Road Yuexiu District, Guangzhou Guangdong Province The PRC

7. Commercial portion of West Point HK$329,000,000 100% HK$329,000,000 the junction of Zhongshan Qi Road and Guangfu Road Liwan District, Guangzhou Guangdong Province The PRC

8. Commercial portion of HK$123,300,000 100% HK$123,300,000 Stage I of Palm Spring Caihong Planning Area Western District, Zhongshan Guangdong Province The PRC

9. Lai Fung Tower HK$3,034,500,000 100% HK$3,034,500,000 787 Dongfeng East Road Yuexiu District, Guangzhou Guangdong Province The PRC

10. Various portions located at HK$3,802,900,000 80% HK$3,042,320,000 the east side of Yiwener Road south side of Caihong Road west side of Tianyu Road and north side of Hengqin Main Road Hengqin New Area Zhuhai, Guangdong Province The PRC

Sub-total: HK$18,930,100,000 HK$18,157,860,000

– III-8 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

market value M market value in in existing state existing state Interest attributable to as at attributable the Group as at property 31 January 2020 to the Group 31 January 2020

Group II — Property interests held by the Group in the PRC for sale purpose

11. Unsold car parking spaces of HK$164,800,000 95% HK$156,560,000 Regents Park 88 Huichuan Road Changning District, Shanghai The PRC

12. Unsold car parking spaces of HK$152,800,000 100% HK$152,800,000 Shanghai May Flower Plaza the junction of Da Tong Road and Zhi Jiang Xi Road, Sujiaxiang Jing’an District, Shanghai The PRC

13. Unsold car parking spaces of HK$83,900,000 100% HK$83,900,000 West Point the junction of Zhongshan Qi Road and Guangfu Road Liwan District, Guangzhou Guangdong Province The PRC

14. Unsold car parking spaces of HK$9,400,000 100% HK$9,400,000 King’s Park Nos 558-596/1006-1044 Donghua Dong Road Yuexiu District, Guangzhou Guangdong Province The PRC

15. Various portions of Stage I and HK$805,600,000 100% HK$805,600,000 II of Palm Spring Caihong Planning Area Western District, Zhongshan Guangdong Province The PRC

– III-9 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

market value M market value in in existing state existing state Interest attributable to as at attributable the Group as at property 31 January 2020 to the Group 31 January 2020

16. Unsold car parking spaces of HK$9,700,000 50% HK$4,850,000 Dolce Vita (Xunfeng Yujinsha Yuan) Jinshazhou, Heng Sha Baiyun District, Guangzhou Guangdong Province The PRC

17. Unsold car parking spaces of HK$13,200,000 100% HK$13,200,000 Phase V of Eastern Place 787 Dongfeng East Road Yuexiu District, Guangzhou Guangdong Province The PRC

18. Unsold villa (cultural studios) HK$668,600,000 80% HK$534,880,000 located at the east side of Yiwener Road south side of Caihong Road west side of Tianyu Road and north side of Hengqin Main Road Hengqin New Area Zhuhai, Guangdong Province The PRC

19. Various portions of a residential HK$1,109,700,000 100% HK$1,109,700,000 development located at Wuliqiao Road 104 Jie Fang Huangpu District, Shanghai The PRC

Sub-total: HK$3,017,700,000 HK$2,870,890,000

– III-10 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

market value M market value in in existing state existing state Interest attributable to as at attributable the Group as at property 31 January 2020 to the Group 31 January 2020

Group III — Property interests held by the Group in the PRC

20. Various portions located at the HK$519,800,000 80% HK$415,840,000 east side of Yiwener Road south side of Caihong Road west side of Tianyu Road and north side of Hengqin Main Road Hengqin New Area Zhuhai, Guangdong Province The PRC

21. Commercial portion of Eastern Place HK$50,600,000 100% HK$50,600,000 787 Dongfeng East Road Yuexiu District, Guangzhou Guangdong Province The PRC

Sub-total: HK$570,400,000 HK$466,440,000

Group IV — Property interests held under development by the Group in the PRC

22. A commercial development HK$2,005,500,000 100% HK$2,005,500,000 located at Tian Mu Road West and Da Tong Road Jing’an District, Shanghai The PRC

23. Haizhu Plaza HK$1,103,000,000 100% HK$1,103,000,000 Chang Di Main Road Yuexiu District, Guangzhou Guangdong Province The PRC

24. Phases 2-2 and 2-4 of Palm Spring HK$2,286,300,000 100% HK$2,286,300,000 Caihong Planning Area Western District, Zhongshan Guangdong Province The PRC

– III-11 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

market value M market value in in existing state existing state Interest attributable to as at attributable the Group as at property 31 January 2020 to the Group 31 January 2020

25. Various portions located at the HK$2,999,300,000 80% HK$2,399,440,000 east side of Yiwener Road south side of Caihong Road west side of Tianyu Road and north side of Hengqin Main Road Hengqin New Area Zhuhai, Guangdong Province The PRC

26. Two parcels of land located at the HK$1,346,000,000 100% HK$1,346,000,000 east side of Yiwener Road south side of Xiangjiang Road west side of Yiwenyi Road and north side of Zhishui Road Hengqin New Area Zhuhai, Guangdong Province The PRC

Sub-total: HK$9,740,100,000 HK$9,140,240,000

Group V — Property interest held by the Group in Hong Kong for owner occupation purpose

27. 20th Floor of May Tower II and HK$100,000,000 100% HK$100,000,000 Car Parking Space No 57 on Ground Floor of May Towers I and II Nos 5 and 7 May Road Mid-Levels Hong Kong

Sub-total: HK$100,000,000 HK$100,000,000

Grand Total: HK$32,358,300,000 HK$30,735,430,000

– III-12 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

VALUATION REPORT

Group I — Property interests held by the Group in the PRC for investment purpose

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

1 Hong Kong Plaza Hong Kong Plaza is a composite According to the information HK$7,013,000,000 282 & 283 development comprising a 32-storey provided, office and (HONG KONG Huaihaizhong office tower (known as South Tower) commercial portion of the DOLLARS Road and a 32-storey serviced apartment property with a total gross SEVEN BILLION Huangpu District tower (known as North Tower), each floor area of approximately AND THIRTEEN Shanghai surmounting a 7-level (including 3 28,233 sq m and a total MILLION ONLY) The PRC basement levels) commercial/car leasable area of approximately (portion owned by parking podium. The North Tower 22,396 sq m respectively is (Portion A: Shanghai Li Xing and South Tower are connected let under various tenancies HK$6,179,000,000 Real Estate together by a flyover. The property yielding a total monthly Development was completed in October 1997 and rental of approximately Portion B: Co Ltd) refurbished in 2011. RMB21,450,000 with the last HK$834,000,000) tenancy expiring on 30 June The property comprises various 2027 whilst the remaining (100% interest portions of Hong Kong Plaza owned portion of the property is attributable by Shanghai Li Xing Real Estate vacant or for owner-occupied. to the Group: Development Co Ltd with the gross HK$7,013,000,000) floor areas as follows: In addition, the whole serviced apartment portion (including (please see approximate the subject serviced apartment notes 6 and 7) South Tower Gross Floor Area portion and that stated in Use Floor sq m sq ft property no. 2 in this report) of the development is let Commercial B1 3,275.25 35,255 under various short term 1 4,174.85 44,938 tenancies and managed by 2 4,098.90 44,120 Ascott Property Management 3 4,702.15 50,614 (Shanghai) Co., Ltd. 4 4,812.51 51,802 yielding an annual gross Office 6-38 33,639.52 362,096 income of approximately

RMB102,200,000. Total: 54,703.18 588,825

– III-13 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

approximate North Tower Gross Floor Area Use Floor sq m sq ft

Commercial B1 2,958.93 31,850 1 3,952.47 42,544 2 3,970.76 42,741 3 4,636.30 49,905 4 4,622.00 49,751 Commercial/ Club House/ Restaurant 6-7 2,314.46 24,913 Serviced Apartment 8-38 13,332.28 143,509

Total: 35,787.20 385,213

The property also comprises a total of 350 car parking spaces in B1 to B3 levels of the podium and various advertising boards.

The land use rights of the property have been granted for a term from 16 September 1992 to 15 September 2042.

– III-14 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes:

1. Pursuant to two State-owned Land Use Right Certificates Nos 001161 and 001162 both issued by the Shanghai Real Estate Administration Bureau and dated 17 July 1995, the titles to the property with a total site area of 14,645 sq m are both held by Shanghai Li Xing Real Estate Development Co Ltd (“Shanghai Li Xing”), a 100% owned subsidiary of the Company, for a common term commencing from 16 September 1992 to 15 September 2042 for commercial and office uses.

2. Pursuant to five Real Estate Title Certificates Nos Hu Fang Di Shi Zi (1998) Di 002601, Hu Fang Di Shi Zi (2001) Di 007656, Hu Fang Di Lu Zi (2008) Di 002196, Hu Fang Di Lu Zi (2011) Di 000751 and Hu (2017) Huang Zi 001203 all issued by the Shanghai Real Estate Administration Bureau dated 25 June 1998, 10 October 2001, 31 August 2008, 29 March 2011 and 14 February 2017 respectively, the title to portion of the property with respective gross floor area of 69,731.66 sq m, 1,211.83 sq m, 130.91 sq m, 130.91 sq m and 130.91 sq m is held by Shanghai Li Xing for composite use (refer to whole South Tower of the property including basement). As advised by the Company, portion of the property under title certificate No. Hu Fang Di Shi Zi (1998) Di 002601 has been sold.

3. Pursuant to the Shanghai Certificate of Real Estate Ownership No Hu Fang Di Lu Zi (2011) Di 000021 issued by the Shanghai Planning, Land and Resources Administration Bureau dated 4 January 2011, the title to portion of the property with a total gross floor area of 44,132.55 sq m is held by Shanghai Li Xing for office, residential, commercial and others uses (refer to North Tower of the property including basement).

4. Pursuant to twenty three Shanghai Certificates of Real Estate Ownership all issued by the Shanghai Planning, Land and Resources Administration Bureau, the title to portion of the property with a total gross floor area of 2,192.45 sq m is held by Shanghai Li Xing for apartment use (refer to North Tower of the property). The details of which are listed as follows:

Certificate No Tower Unit Use Gross Floor Area

1. Hu Fang Di Lu Zi (2008) Di 002406 North 2612 Apartment 64.92 sq m 2. Hu Fang Di Lu Zi (2009) Di 003023 North 2807 Apartment 127.41 sq m 3. Hu Fang Di Lu Zi (2009) Di 003102 North 2805 Apartment 97.33 sq m 4. Hu Fang Di Lu Zi (2009) Di 004295 North 2512 Apartment 64.92 sq m 5. Hu Fang Di Lu Zi (2009) Di 004300 North 2804 Apartment 98.39 sq m 6. Hu Fang Di Lu Zi (2009) Di 004466 North 3107 Apartment 127.41 sq m 7. Hu Fang Di Lu Zi (2010) Di 000094 North 2810 Apartment 133.96 sq m 8. Hu Fang Di Lu Zi (2010) Di 000479 North 2205 Apartment 95.45 sq m 9. Hu Fang Di Lu Zi (2010) Di 000489 North 2306 Apartment 131.19 sq m 10. Hu Fang Di Lu Zi (2010) Di 000574 North 2501 Apartment 64.92 sq m 11. Hu Fang Di Lu Zi (2010) Di 000609 North 2811 Apartment 116.25 sq m 12. Hu Fang Di Lu Zi (2010) Di 000675 North 2604 Apartment 98.39 sq m 13. Hu Fang Di Lu Zi (2010) Di 000797 North 2209 Apartment 95.21 sq m 14. Hu Fang Di Lu Zi (2010) Di 001134 North 2505 Apartment 97.33 sq m 15. Hu Fang Di Lu Zi (2010) Di 001310 North 2212 Apartment 62.93 sq m 16. Hu Fang Di Lu Zi (2010) Di 001348 North 2608 Apartment 97.33 sq m 17. Hu Fang Di Lu Zi (2010) Di 001349 North 2812 Apartment 64.92 sq m 18. Hu Fang Di Lu Zi (2010) Di 001350 North 2801 Apartment 64.92 sq m 19. Hu Fang Di Lu Zi (2010) Di 002334 North 2705 Apartment 97.33 sq m 20. Hu Fang Di Huang Zi (2012) Di 052466 North 2202 Apartment 99.71 sq m 21. Hu Fang Di Huang Zi (2013) Di 052704 North 2304 Apartment 98.39 sq m 22. Hu Fang Di Huang Zi (2014) Di 051673 North 2504 Apartment 98.39 sq m 23. Hu Fang Di Huang Zi (2016) Di 052998 North 2208 Apartment 95.45 sq m

Total: 2,192.45 sq m

– III-15 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

5. Pursuant to the Business Licence with Unified Social Credit No 913100006072415998 dated 15 November 2018, Shanghai Li Xing was established with an operation period from 28 April 1993 to 27 April 2043.

6. Pursuant to the management agreement entered into between Shanghai Li Xing and Ascott Property Management (Shanghai) Co., Ltd. (“Ascott”) on 5 May 2009, Ascott agreed to provide certain management services to Shanghai Li Xing in relation to units of serviced apartments owned by the Group. The salient conditions stipulated in the management agreement are, inter-alia, listed as follows:

(i) Term : an initial term of 10 years commencing from the date when the official operations and leasing activity of the serviced apartments commence and renewable for two successive terms of five years at the option of Ascott and subject to the agreement of Shanghai Li Xing

(ii) Base management fee : 2% of total revenue + X% of gross operating profit (“GOP”) (X=4 if GOP margin is less than 50%; X=5 if GOP margin is less than 55% but more than or equal to 50%; X=5.5 if GOP margin is less than 60% but more than or equal to 55%; and X=6 if GOP margin is more than or equal to 60%)

(iii) Other service fee : — RMB160 per serviced apartment unit per month for provision of computer modular programs for use in connection with the management and operation of a serviced apartment

— RMB2,000,000 per annum adjusted annually from year 3 onwards in accordance with the Singapore Consumer Price Index subject to a cap of RMB2,500,000 per annum for global marketing services and use of the intellectual property rights of Ascott Group

In the course of our valuation, we have taken into account of the above-mentioned management agreement.

7. According to the Group’s specific terms of instruction to provide the breakdown of the market value of property, they are listed as follows:

M market value in existing state as at Portion property 31 January 2020

A. Commercial and office portion in South Tower, HK$6,179,000,000 Commercial portion in North Tower, 350 car parking spaces in B1 to B3 levels of the podium and advertising boards

B. Club house, restaurant and serviced apartment portion HK$834,000,000 in 6/F to 38/F of North Tower

HK$7,013,000,000

8. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Shanghai Li Xing legally owns the building ownership of the property; (ii) Portion of the property is subject to a mortgage and the mortgage is valid and enforceable; (iii) Shanghai Li Xing can sell, lease, transfer or re-mortgage the property according to the relevant laws and regulations and subject to approval from the mortgagee; and (iv) Except for the mortgage mentioned in note (8) (ii), the property is free from encumbrances.

– III-16 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

2 Various serviced Hong Kong Plaza is a composite The whole serviced apartment HK$1,193,000,000 apartment units development comprising a 32-storey portion (including the subject (HONG KONG in North Tower office tower (known as South property and the serviced DOLLARS Hong Kong Plaza Tower) and a 32-storey serviced apartment portion stated in ONE BILLION 282 Huaihaizhong apartment tower (known as North property no. 1 in this report) ONE HUNDRED Road Tower), surmounting a common of the development is let AND NINETY Huangpu District 7-level (including 3 basement levels) under various short term THREE MILLION Shanghai commercial/car parking podium. The tenancies and managed by ONLY) The PRC North Tower and South Tower are Ascott Property Management (portion owned connected together by a flyover. The (Shanghai) Co., Ltd. (100% interest by Good Strategy property was completed in October yielding an annual gross attributable Ltd) 1997 and refurbished in 2011. income of approximately to the Group: RMB102,200,000. HK$1,193,000,000) (please see note The property comprises various 2 for details) serviced apartment units in the North (please see note 3) Tower of Hong Kong Plaza owned by Good Strategy Ltd with a total gross floor area of approximately 19,672.77 sq m (211,758 sq ft). The gross floor area of each unit ranges from 60.70 sq m (653 sq ft) to 276.98 sq m (2,981 sq ft).

The land use rights of the property have been granted for a term commencing from 3 January 2000 to 15 September 2042.

– III-17 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes:

1. Pursuant to 181 Real Estate Title Certificates Nos Hu Fang Di Shi Zi (2000) Di 000372-000395, 000410-000451, 000454-000458, 000485-000507, 000510-000569, 000572-000597 and 000640 all issued by the Shanghai Real Estate and Land Administration Bureau, the property with a total gross floor area of approximately 19,672.77 sq m is held by Good Strategy Limited, a 100% owned subsidiary of the Company, for composite use.

2. The property comprises Unit Nos 1 to 13 on each of 15th to 21st floors and Unit Nos 1 to 6 on each of 34th to 36th floors, Unit Nos 3, 6, 7 and 10 on 22nd floor, Unit Nos 3, 7, 10 and 11 on 23rd floor, Unit Nos 3, 6, 7 and 11 on 25th floor, Unit Nos 2, 3, 6, 7, 10 and 11 on 26th floor, Unit Nos 2, 3, 6, 7, 10 and 11 on 27th floor, Unit Nos 2, 3, and 6 on 28th floor, Unit Nos 2, 3, 6, 7, 10 and 11 on 29th floor, Unit Nos 2, 3, 6 and 11 on 30th floor, Unit Nos 2, 3, 4, 6, 9, 10, 11 and 12 on 31st floor, Unit Nos 1, 2, 3, 4, 8, 10, 11 and 12 on 32nd floor and Unit Nos 1, 2, 3, 4, 9, 10, 11 and 12 on 33rd floor.

3. Pursuant to the management agreement entered into between Shanghai Li Xing Real Estate Development Co Ltd (“Shanghai Li Xing”) and Ascott Property Management (Shanghai) Co., Ltd. (“Ascott”) on 5 May 2009, Ascott agreed to provide certain management services to Shanghai Li Xing in relation to units of serviced apartments owned by the Group. The salient conditions stipulated in the management agreement are, inter-alia, listed as follows:

(iii) Other service fee : — RMB160 per serviced apartment unit per month for provision of computer modular programs for use in connection with the management and operation of a serviced apartment

In the course of our valuation, we have taken into account of the above-mentioned management agreement.

4. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Good Strategy Limited legally owns the building ownership of the property; (ii) The property is subject to a mortgage and the mortgage is valid and enforceable; (iii) Good Strategy Limited can sell, lease, transfer or re-mortgage the property according to the relevant laws and regulations and subject to approval from the mortgagee; and (iv) Except for the mortgage mentioned in note (4) (ii), the property is free from encumbrances.

– III-18 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

3 B3 Hui Yi Garden The property comprises a 3-storey As advised, the property is HK$41,700,000 No 18 of detached house, a garden and a car currently vacant. (HONG KONG Alley 905 parking lot all standing on a levelled DOLLARS Huashan Road site with an area of 415.98 sq m (4,478 FORTY ONE Xuhui District sq ft). MILLION Shanghai AND SEVEN The PRC The 3-storey detached house is of HUNDRED brick/reinforced concrete structure THOUSAND completed in 1993 with a total gross ONLY) floor area of approximately 317.80 sq m (3,421 sq ft) and the site area of (100% interest the garden is approximately 179 sq m attributable (1,927 sq ft). to the Group: HK$41,700,000) The land use rights of the property have been granted for an unspecified (please see note 2) term (please see note 2 below for details).

Notes:

1. Pursuant to the Real Estate Title Certificate No Hu Fang Di Shi Zi (2002) Di 010907 dated 30 October 2002 issued by the Shanghai Real Estate and Land Resources Administration Bureau, the title to the land with a common area of approximately 415.98 sq m and the 3-storey building with a gross floor area of approximately 317.80 sq m is vested in Canvex Limited, a 100% owned subsidiary of the Company, for residential use for an unspecified term.

2. As advised by the Company, land use rights of the property will be granted for a land use rights term of 70 years for residential use subject to a land premium of approximately RMB6,360,000 and we have deducted the aforesaid land premium in the course of our valuation.

3. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Canvex Limited legally owns the building ownership of the property;

(ii) The land use rights term of the property will be changed to a maximum of 70 years after paying a land premium according to the Notice on the issue of land premium about land use rights transfer of garden terrace and non-domestic housing and confirmation from Canvex Limited;

(iii) Canvex Limited can sell, lease, transfer or mortgage the property according to the relevant laws and regulations; and

(iv) The property is free from mortgage and other encumbrances.

– III-19 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

4 Commercial Regents Park (the “Development”) is According to the information HK$233,200,000 portion of a large-scale residential/commercial provided, the property (HONG KONG Regents Park composite development developed in is fully leased subject to DOLLARS 88 Huichuan two phases. various tenancies yielding TWO HUNDRED Road a total monthly rental of THIRTY THREE Changning The property comprises commercial approximately RMB1,580,000 MILLION AND District portion of the Development with a with last tenancy expiring on TWO HUNDRED Shanghai total gross floor area of approximately 15 March 2027. THOUSAND The PRC 7,623.79 sq m (82,062 sq ft) ONLY) completed in 2006. (95% interest The land use rights of the attributable Development have been granted for a to the Group: term of 70 years commencing from 4 HK$221,540,000) May 1996 for residential use.

Notes:

1. Pursuant to the Shanghai Real Estate Title Certificate No Hu Fang Di Chang Zi (2006) Di 010832 issued by the Shanghai Housing and Land Resources Administration Bureau dated 10 June 2006, the title to the Development (Phase I and basement car park) with a total gross floor area of 114,009.40 sq m is held by Shanghai Wa Yee Real Estate Development Co., Limited (“Shanghai Wa Yee”), a 95% owned subsidiary of the Company, for a land use rights term of 70 years from 4 May 1996 to 3 May 2066 for residential use. As advised by the Company, portion of the property under this Title Certificate has been sold.

2. Pursuant to the Business Licence with Unified Social Credit No 9131000060737771XE dated 3 June 2016, Shanghai Wa Yee was established with an operation period from 3 September 1997 to 19 August 2067.

3. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Shanghai Wa Yee legally owns the building ownership of the property; (ii) Shanghai Wa Yee can sell, lease, transfer or mortgage the property according to the relevant laws and regulations; and (iii) The property is free from mortgage and other encumbrances.

– III-20 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

5 Various portions Shanghai May Flower Plaza (the According to the information HK$1,102,500,000 of Shanghai “Development”) is a composite provided, commercial portion (HONG KONG May Flower Plaza development with residential and of the property with a total DOLLARS the junction of office apartment towers erected leasable area of approximately ONE BILLION Da Tong Road on a commercial podium. The 24,158 sq m is let under ONE HUNDRED and Zhi Jiang Development also comprises a various tenancies yielding TWO MILLION Xi Road 3-storey basement for car park use. a total monthly rental of AND FIVE Sujiaxiang approximately RMB2,110,000 HUNDRED Jing’an District The property comprises commercial with last tenancy expiring THOUSAND Shanghai portion and 239 office apartment units on 30 June 2034 whilst the ONLY) The PRC in Tower 4 of the Development with a remaining commercial portion total gross floor area of approximately of the property is vacant or (100% interest 29,757.87 sq m (320,314 sq ft) and owner-occupied. attributable 13,363.58 sq m (143,846 sq ft) to the Group: respectively completed in 2011 with The office apartment portion HK$1,102,500,000) gross floor areas as follows: of the property is currently operated as serviced (please see note 6) Approximate apartment. Gross Floor Area Use/Level sq m sq ft

Commercial (Basement 1) 11,961.06 128,749 Commercial (Level 1) 6,413.88 69,039 Commercial (Level 2) 7,260.09 78,148 Commercial (Level 3) 1,541.54 16,593 Commercial (Level 4) 1,639.54 17,648 Commercial (Level 5) 941.76 10,137 Office apartment 13,363.58 143,846

Total: 43,121.45 464,160

The land use rights of the Development have been granted for terms of 70 years for residential use, 40 years for commercial use and 50 years for office use commencing from 5 February 2007.

– III-21 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes:

1. Pursuant to the Shanghai Certificate of Real Estate Ownership Hu Fang Di Zha Zi No (2007) 017286 issued by the Shanghai Housing and Land Resources Administration Bureau dated 12 November 2007, the land use rights of the Development, having a site area of 19,742 sq m, is vested in Shanghai Hu Xin Real Estate Development Co., Ltd (“Shanghai Hu Xin”), a 100% owned subsidiary of the Company, for land use rights terms of 70 years for residential use, 40 years for commercial use and 50 years for office use commencing from 5 February 2007.

2. Pursuant to the Shanghai Certificate of Real Estate Ownership No Hu Fang Di Zha Zi (2012) Di 006136 issued by the Shanghai Planning, Land and Resources Administration Bureau dated 30 June 2012, the title to the Development with a total gross floor area of 137,129.94 sq m is held by Shanghai Hu Xin.

3. Pursuant to the Business Licence with Unified Social Credit No 91310000607350656K dated 4 March 2016, Shanghai Hu Xin was established with an operation period from 23 April 1995 to 22 April 2065.

4. Pursuant to the Construction Work Completion Recording Certificate No 2011SH0470 dated 13 December 2011, the construction work of the Development with a total gross floor area of 147,923 sq m was completed and recorded.

5. According to the Group’s specific terms of instruction to provide the breakdown of the market value of property, they are listed as follows:

Market value in existing state as at Portion 31 January 2020

Commercial portion HK$627,000,000

Office apartment units HK$475,500,000

HK$1,102,500,000

6. As per your specific terms of instruction, we have valued the office apartment portion of the property on vacant possession basis.

7. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Shanghai Hu Xin legally owns the building ownership of the property; (ii) Shanghai Hu Xin can sell, lease, transfer or mortgage the property according to the relevant laws and regulations; and (iii) The property is free from mortgage and other encumbrances.

– III-22 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

6 May Flower Plaza May Flower Plaza is erected on an According to the information HK$2,057,000,000 68 Zhongshanwu irregular-shaped site with an area of provided, office and retail (HONG KONG Road approximately 3,912.27 sq m (42,112 portion of the property DOLLARS Yuexiu District sq ft). (including cinema) with TWO BILLION Guangzhou a total gross floor area of AND FIFTY Guangdong The property comprises the whole approximately 39,307 sq m is SEVEN MILLION Province of May Flower Plaza including a subject to various tenancies ONLY) The PRC 13-storey office and commercial tower yielding a total monthly erected over four basement levels rental of approximately (100% interest completed in 2005 with approximate RMB7,160,000 with last attributable gross floor areas (excluding public tenancy expiring on 31 to the Group: ancillary facilities area of about October 2030 whilst the HK$2,057,000,000) 1,037.04 sq m) as follows: remaining portion of the property is vacant or owner- approximate occupied. Gross Floor Area Use Floor sq m sq ft

Car park B4 3,864.36 41,596 Car park B3 3,677.21 39,581 Retail/Car park B2 3,430.32 36,924 Retail/Car park B1 2,544.93 27,394 Retail L1 2,288.92 24,638 Retail L2 4,245.21 45,695 Retail L3 4,103.83 44,174 Retail L4 3,978.91 42,829 Retail L5 3,406.65 36,669 Cinema L6 3,310.88 35,638 Cinema/Office L7 1,732.81 18,652 Retail L8 3,363.03 36,200 Retail L9 2,140.67 23,042 Office L10 2,079.35 22,382 Office L11 1,760.05 18,945 Office L12 1,769.96 19,052 Office L13 1,769.96 19,052

Total: 49,467.05 532,463

The basement levels of the property accommodate a total of approximately 136 car parking spaces and the property also comprises various advertising boards.

The land use rights of the property have been granted for terms of 40 years for commercial use and 50 years for other uses commencing from 14 October 1997.

– III-23 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes:

1. Pursuant to nineteen Guangzhou Real Estate Title Certificates all issued by the Guangzhou Land Resources and Real Estate Administration Bureau in 2016, the title to the property with a total gross floor area of approximately 49,467.05 sq m is vested in Guangzhou Jieli Real Estate Co Ltd (“Guangzhou Jieli”), a 100% owned subsidiary of the Company. Details of which are as follows:

Certificate No Level Use Gross Floor Area (sq m)

1. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Basement 4 Car park 3,864.36 Di 00243486 2. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Basement 3 Car park 3,677.21 Di 00243505 3. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Basement 2 Commercial and catering 2,707.16 Di 00243488 4. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Basement 2 Car park 723.16 Di 00243489 5. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Basement 1 Commercial and catering 1,927.46 Di 00243490 6. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Basement 1 Car park 617.47 Di 00243491 7. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Level 1 Commercial 2,288.92 Di 00243492 8. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Level 2 Commercial and catering 4,245.21 Di 00243493 9. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Level 3 Commercial and catering 4,103.83 Di 00243494 10. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Level 4 Commercial 3,978.91 Di 00243503 11. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Level 5 Catering 3,406.65 Di 00243495 12. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Level 6 Cinema 3,310.88 Di 00243496 13. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Level 7 Cinema 1,732.81 Di 00243497 14. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Level 8 Catering 3,363.03 Di 00243498 15. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Level 9 Catering 2,140.67 Di 00243487 16. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Level 10 Office 2,079.35 Di 00243499 17. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Level 11 Office 1,760.05 Di 00243500 18. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Level 12 Office 1,769.96 Di 00243501 19. Yue (2016) Guangzhou Shi Bu Dong Chan Quan Level 13 Office 1,769.96 Di 00243502

Total: 49,467.05

2. Pursuant to the State-owned Land Use Rights Certificate No Sui Fu Guo Yong (1997) Zi Di Te 028 issued by the People’s Government of Guangzhou dated 14 October 1997, the title to the land with a site area of approximately 5,782 sq m is held by Guangzhou Jieli for land use rights terms of 70 years for residential use, 40 years for commercial uses and 50 years for other uses.

3. Pursuant to the Business Licence No Wai S0102014023301 dated 11 July 2016, Guangzhou Jieli was established with an operation period from 31 December 1993 to 31 December 2033.

4. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Guangzhou Jieli legally owns the property; (ii) The property is subject to a mortgage and the mortgage is valid and enforceable; (iii) Guangzhou Jieli can sell, lease or transfer the property according to the relevant laws and regulations and subject to approval from the mortgagee; and (iv) Except for the mortgage mentioned in note (4) (ii), the property is free from encumbrances.

– III-24 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

7 Commercial West Point (the “Development”) is a According to the information HK$329,000,000 portion composite development comprising a provided, the property with (HONG KONG of West Point residential tower and an office tower a total gross floor area of DOLLARS the junction of both erected on a 4-level commercial approximately 16,781 sq m is THREE Zhongshan Qi podium and a 2-level basement car subject to various tenancies HUNDRED AND Road park completed in about 2010. yielding a total monthly TWENTY NINE and Guangfu rental of approximately MILLION ONLY) Road The property comprises commercial RMB1,290,000 with last Liwan District portion on Level 1 to 4 of the tenancy expiring on 30 April (100% interest Guangzhou Development having a total gross floor 2024 whilst the remaining attributable Guangdong area of approximately 16,940.18 sq m portion of the property is to the Group: Province (182,344 sq ft) with gross floor areas vacant. HK$329,000,000) The PRC as follows:

approximate Gross Floor Area Use Level sq m sq ft

Retail Level 1 3,158.96 34,003 Retail Level 2 4,384.20 47,192 Retail Level 3 4,546.58 48,939 Retail Level 4 3,886.49 41,834

Sub-total: 15,976.23 171,968

Clubhouse and kiosk 963.95 10,376

Total: 16,940.18 182,344

The land use rights of the Development have been granted for terms of 70 years for residential use, 40 years for commercial, tourism and entertainment uses and 50 years for other use.

– III-25 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes:

1. Pursuant to seven Guangzhou Real Estate Title Certificates Nos Yue Fang Di Quan Zheng Sui Zi Di 0120285921 to 0120285927 all issued by the Guangzhou Land Resources and Real Estate Administration Bureau dated 11 November 2011, the title to the property with a total gross floor area of approximately 16,940.18 sq m is vested in Guangzhou Honghui Real Estate Development Co., Ltd. (“Guangzhou Honghui”), a 100% owned subsidiary of the Company.

2. Pursuant to the State-owned Land Use Rights Certificate No Sui Guo Yong (2005) Di 348 issued by the People’s Government of Guangzhou dated 11 January 2006, the title to the property with a site area of approximately 6,003 sq m is held by Guangzhou Honghui for land use rights terms of 70 years for residential use, 40 years for commercial, tourism and entertainment uses and 50 years for other use.

3. Pursuant to the Business Licence with Unified Social Credit No 91440101618416067K dated 14 November 2017, Guangzhou Honghui was established with an operation period from 11 February 1993 to 11 February 2022.

4. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Guangzhou Honghui legally owns the property; (ii) Guangzhou Honghui can sell, lease or transfer the property according to the relevant laws and regulations; and (iii) The property is free from mortgage and other encumbrances.

– III-26 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

8 Commercial Palm Spring (the “Development”) According to the information HK$123,300,000 portion of is a large-scale residential provided, the property (HONG KONG Stage I of development having a total site area with a total gross floor area DOLLARS Palm Spring of approximately 236,649.80 sq m of approximately 11,406 ONE HUNDRED Caihong Planning (2,547,298 sq ft). sq m is leased subject to TWENTY THREE Area various tenancies yielding MILLION Western District The Development is planned to be a total monthly rental of AND THREE Zhongshan developed by various stages with a approximately RMB300,000 HUNDRED Guangdong total gross floor area of approximately with last tenancy expiring THOUSAND Province 564,388 sq m (6,075,072 sq ft). on 31 October 2030 whilst ONLY) The PRC the remaining portion of the The property comprises various units property is vacant. (100% interest on Levels 1 to 3 of commercial centre attributable of Stage I of the Development with a to the Group: total gross floor area of 13,694.52 sq HK$123,300,000) m (147,408 sq ft) completed in 2012 and the gross floor area breakdowns are as follows:

Approximate Gross Floor Area Use sq m sq ft

Commercial (Level 1) 3,391.74 36,509 Commercial (Level 2) 6,080.56 65,451 Commercial (Level 3) 4,222.22 45,448

Total: 13,694.52 147,408

The land use rights of the property have been granted for various terms with the last term expiring on 30 March 2075 for commercial/ residential uses.

– III-27 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes:

1. Pursuant to twenty seven State-owned Land Use Rights Certificates Nos Zhong Fu Guo Yong (2013) Di 2000884, 2000885, 2000898 to 2000904 and 2000936 to 2000953 all issued by the People’s Government of Zhongshan dated 22 October 2013 and 5 November 2013, the title to the land portion of the property with a site area of approximately 22,824.96 sq m is held by 中山市寶麗房地產發展有限公司 (Zhongshan Bao Li Properties Development Co. Ltd.) (“Zhongshan Bao Li”), a 100% owned subsidiary of the Company for various terms expiring on 17 May 2074 and 30 March 2075 respectively for commercial/residential uses.

2. Pursuant to twenty seven Real Estate Title Certificates Nos Yue Fang Di Quan Zhong Fu Zi Di 0113018459, 0113018470, 0113019022, 0113019029, 0113019037, 0113019041, 0113019048, 0113019053, 0113019061, 0113021648, 0113021665, 0113021669, 0113021670, 0113021673, 0113021676, 0113021679, 0113021681, 0113021686, 0113021690, 0113021694, 0113021696, 0113021699, 0113021707, 0113021710, 0113021712, 0113021714 and 0113021739 all issued by the Zhongshan State Land and Resources Bureau dated 22 October 2013 and 5 November 2013, the title to the commercial portion of the Development with a total gross floor area of 16,825.23 sq m is vested in Zhongshan Bao Li.

3. Pursuant to the Business Licence with Unified Social Credit No 914420007480421393 dated 5 November 2015, Zhongshan Bao Li was established with an operation period from 17 April 2003 to 16 April 2053.

4. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Zhongshan Bao Li legally owns the property; (ii) Zhongshan Bao Li can sell, lease or transfer the property according to the relevant laws and regulations; and (iii) The property is free from mortgage and other encumbrances.

– III-28 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

9 Lai Fung Tower Eastern Place is a large-scale According to the information HK$3,034,500,000 787 Dongfeng commercial/residential composite provided, the property with (HONG KONG East Road development developed by phases. a total gross floor area of DOLLARS Yuexiu District approximately 64,456 sq m THREE BILLION Guangzhou The property comprises the whole of is let under various tenancies THIRTY FOUR Guangdong Lai Fung Tower in Phase V of Eastern yielding a total monthly MILLION AND Province Place with a total gross floor area of rental of approximately FIVE HUNDRED The PRC approximately 68,572.39 sq m RMB8,020,000 with last THOUSAND (738,113 sq ft) completed in 2015 tenancy expiring on ONLY) and 313 basement car parking spaces 14 January 2027 whilst the (including 216 mechanical car parking remaining portion of the (100% interest spaces). Gross floor areas are as property is vacant or owner- attributable follows: occupied. to the Group: HK$3,034,500,000) approximate Gross Floor Area Use Level sq m sq ft

Retail L1 3,447.17 37,105 Retail L2 2,371.19 25,524 Retail L3&4 4,613.83 49,663 Office L5-38 58,140.20 625,821

Total: 68,572.39 738,113

The land use rights of the property have been granted for terms of 70 years for residential use, 40 years for commercial, tourism and entertainment uses and 50 years for other use.

– III-29 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes:

1. Pursuant to the State-owned Land Use Rights Certificate No Sui Fu Guo Yong (2003) Di 309 issued by the People’s Government of Guangzhou dated 30 October 2003, the title to the land portion of the subject development with an area of approximately 17,293.00 sq m is held by Guangzhou Grand Wealth Properties Ltd (“Guangzhou Grand Wealth”), a 100% owned subsidiary of the Company, for land use rights terms of 70 years for residential use, 40 years for commercial, tourism and entertainment uses and 50 years for other use.

2. Pursuant to the Guangzhou Real Estate Title Certificate No Yue (2018) Guangzhou Shi Bu Dong Chan Quan Di 00162708 dated 5 November 2018, the title to portion of the property with a gross floor area of approximately 2,312.26 sq m is vested in Guangzhou Grand Wealth.

3. Pursuant to 145 Real Estate Title Certificates, the title to portion of the property with a total gross floor area of 66,260.13 sq m is vested in Guangzhou Grand Wealth.

4. Pursuant to 310 Real Estate Title Certificates, the title to 310 car parking spaces of the property is vested in Guangzhou Grand Wealth.

5. Pursuant to the Business Licence with Unified Social Credit No 91440101618425764J dated 4 June 2019, Guangzhou Grand Wealth was established with an operation period from 15 June 1994 to 15 June 2021.

6. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Guangzhou Grand Wealth legally owns the property; (ii) Portion of the property is subject to a mortgage and the mortgage is valid and enforceable; (iii) Guangzhou Grand Wealth should hold the retail portion with a total gross floor area of 2,312.26 sq m and 216 mechanical car parking spaces of the property and has the right to lease such portions and to grant the lessee to sublease; (iv) Save as abovementioned, Guangzhou Grand Wealth can sell, lease or transfer the property according to the relevant laws and regulations and subject to approval from the mortgagee; and (v) Except for the mortgage mentioned in note (6) (ii), the property is free from encumbrances.

– III-30 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

10 Various portions The development comprises two According to the information HK$3,802,900,000 located at the east parcels of adjacent land located at the provided, retail portion of (HONG KONG side of Yiwener east side of Yiwener Road, south side the property with a total DOLLARS Road, south side of Caihong Road, west side of Tianyu leasable area of approximately of Caihong Road, Road and north side of Hengqin Main 16,239 sq m is let under THREE west side of Road in Hengqin New Area of Zhuhai. various tenancies yielding a BILLION EIGHT Tianyu Road and The total site area is approximately total monthly base rental of HUNDRED TWO north side of 130,173.16 sq m. approximately RMB550,000 MILLION AND Hengqin Main with last tenancy expiring on NINE HUNDRED Road The development is located at 30 December 2034. THOUSAND Hengqin New Hengqin New Area which is situated ONLY) Area at the southern part of Zhuhai. The Hotel portion of the property Zhuhai locality is planned to be tourist and is currently under operation (80% interest Guangdong leisure area. It takes about 30 minutes whilst the remaining portion attributable Province to drive to city centre of Zhuhai. of the property is vacant. to the Group: The PRC The development is planned to be HK$3,042,320,000) developed into a comprehensive development including commercial, office, hotel, cultural development with a total plot ratio gross floor area of approximately 260,289.94 sq m (2,801,761 sq ft).

The property comprises a 4-storey shopping mall, hotel and three cultural halls of the development with a total gross floor area of approximately 118,620.57 sq m (1,276,832 sq ft) completed in about 2019 and the gross floor area breakdowns are as follows:

Approximate Gross Floor Area Use sq m sq ft

Shopping mall 48,877.43 526,117 Hotel 55,254.20 594,756 Cultural hall (multi-purpose) 3,720.00 40,042 Cultural hall (wedding) 617.00 6,641 Cultural hall (other) 10,151.94 109,276

Total: 118,620.57 1,276,832

The property also comprises 291 above ground car parking spaces and 1,553 basement car parking spaces.

The land use rights of the development have been granted for terms of 40 years for office, commercial and servicing, hotel uses and 50 years for other uses commencing from 31 December 2013.

– III-31 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes:

1. Pursuant to two Guangdong Province Real Estate Title Certificates Nos Yue Fang Di Quan Zheng Zhu Zi Di 0100244267 and 0100244268 both issued by the Zhuhai Real Estate Registration Centre dated 27 May 2014, the title to the development, having a total site area of 130,173.16 sq m, is held by 珠海橫琴麗新文創天地有限公司 (Zhuhai Hengqin Laisun Creative Cultural City Co., Ltd.) (“珠海橫琴”), an 80% indirectly owned subsidiary of the Company and 20% indirectly owned subsidiary of Lai Sun Development Company Limited for land use rights terms of 40 years for office, commercial and servicing, hotel uses and 50 years for other uses commencing from 31 December 2013.

2. Pursuant to an agreement entered into between 珠海大橫琴置業有限公司 (Zhuhai Da Hengqin Real Estate Co., Ltd) (the “Investor”), 珠海橫琴 and Winfield Concept Limited (“Winfield”), an 80% indirectly owned subsidiary of the Company and 20% indirectly owned subsidiary of Lai Sun Development Company Limited on 19 January 2020, the Investor has agreed to make a total capital contribution of approximately RMB948.4 million in 珠海橫琴. Upon completion of the registration of change in the equity interest held by Winfield and the Investor in珠海橫琴, 珠海橫琴 will be held as to approximately 83.32% by Winfield and approximately 16.68% by the Investor. The salient conditions stipulated in the agreement are, inter-alia, as follows:

(i) investment period will be thirty years from the issue date of the new business licence of 珠海橫琴 upon completion of the subscription.

(ii) the dividend distribution will be made out of distributable profits of 珠海橫琴 generated from the operations in respect of the self-owned portion only (as agreed between the Investor, 珠海橫琴 and Winfield) to the Investor and Winfield at a 30:70 ratio. The dividend distribution paid to the Investor in each financial year shall be not less than 0.5% per annum of its capital injection to 珠海橫琴 during the investment period.

(iii) the Investor has been granted the put option (but not an obligation) to require 珠海橫琴 or Winfield to acquire all equity interest held by the Investor in 珠海橫琴.

(iv) before the expiration of the investment period, 珠海橫琴 and/or Winfield have/has the right to (but not an obligation) to acquire the Investor’s equity interest in 珠海橫琴.

3. Pursuant to the Construction Land Use Planning Permit No Zhu Heng Xin Gui Tu (Di Gui) (2014) 13 issued by the Zhuhai Hengqin New District Management Committee — Land & Planning Bureau dated 11 March 2014, the development with a total site area of 130,137.16 sq m was permitted to be developed.

4. Pursuant to three Construction Engineering Planning Permits Nos Zhu Heng Xin Gui Tu (Jian) (2019) 028, 029 and 030 all issued by the Zhuhai Hengqin New District Management Committee — Land & Planning Bureau dated 11 April 2019, portion of the development with a total gross floor area of 349,107.95 sq m is permitted to be constructed.

5. Pursuant to three Construction Work Commencing Permits Nos 440410201611180101, 440410201611170101 and 440405201609300301 all issued by Zhuhai Hengqin New District Management Committee — Construction and Environmental Bureau in 2019, construction works of portion of the development with a total gross floor area of 349,107.95 sq m is permitted to be commenced.

6. According to the Group’s specific terms of instruction to provide the breakdown of the market value of property, they are listed as follows:

Market value in existing state as at Property 31 January 2020

Shopping mall, three cultural halls and 291 above ground car parking spaces and 1,553 basement car parking spaces HK$1,770,400,000

Hotel HK$2,032,500,000

HK$3,802,900,000

7. As advised by the Group, the property is under the sale restriction as mentioned in note (2) (x) of property no.25 as at the date of valuation. However, the sale restriction portion is not fixed and may be changed from time to time as long as the total countable plot ratio gross floor area under sale restriction is not less than 50% of that of the development.

– III-32 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

8. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) 珠海橫琴 legally owns the land use rights of the property; (ii) As mentioned in note (2) (x) of property no. 25, 50% of the total countable plot ratio gross floor area of the development is restricted for sale at the moment. 珠海橫琴 should hold such portion and has the right to lease such portion and to grant the lessee to sublease; (iii) After fulfilling relevant conditions for uplifting the sales restrictions as mentioned in note (8) (ii), 珠海橫琴 can sell, lease or transfer the property according to the relevant laws and regulations; and (iv) The property is free from mortgage and other encumbrances.

– III-33 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Group II — Property interests held by the Group in the PRC for sale purpose

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

11 Unsold car Regents Park (the “Development”) is As advised, the property is HK$164,800,000 parking spaces of a large-scale residential/commercial currently let on monthly basis. (HONG KONG Regents Park composite development developed in DOLLARS 88 Huichuan two phases. ONE HUNDRED Road SIXTY FOUR Changning The property comprises 247 basement MILLION AND District car parking spaces with a total gross EIGHT Shanghai floor area of approximately 7,960.81 HUNDRED The PRC sq m (85,690 sq ft) completed in 2006. THOUSAND ONLY) The land use rights of the Development have been granted for a (95% interest term of 70 years commencing from 4 attributable May 1996 for residential use. to the Group: HK$156,560,000)

(please see note 3)

Notes:

1. Pursuant to the Shanghai Real Estate Title Certificate No Hu Fang Di Chang Zi (2009) Di 003008 issued by the Shanghai Housing and Land Resources Administration Bureau dated 20 March 2009, the title to the property (406 basement car park) with a total gross floor area of 13,085.38 sq m is held by Shanghai Wa Yee Real Estate Development Co., Limited (“Shanghai Wa Yee”), a 95% owned subsidiary of the Company for a land use rights term of 70 years from 4 May 1996 to 3 May 2066 for residential use.

3. As advised by the Company, 3 car parking spaces of the property have been sold at a total consideration of approximately RMB1,800,000 prior to the date of valuation. As advised by the Company, title to the sold portions are held by Shanghai Wa Yee as at the valuation date and being duly reflected on relevant Shanghai Wa Yee’s financial statements. Consequently, we have included the sold portions in the valuation. The main reason for such situation to arise is due to the fact that transactions of the sold portions have not yet been completed and/or transferred to the purchasers. We have also made reference to the contracted consideration in the course of our valuation.

4. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Shanghai Wa Yee legally owns the property; (ii) Except for the sold portion as mentioned in note (3), Shanghai Wa Yee can sell, lease, transfer or mortgage the property according to the relevant laws and regulations; and (iii) The property is free from mortgage and other encumbrances.

– III-34 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

12 Unsold car Shanghai May Flower Plaza (the As advised, the property is HK$152,800,000 parking spaces of “Development”) is a composite currently subject to various (HONG KONG Shanghai May development with residential and licences with terms ranging DOLLARS Flower Plaza office apartment towers erected from one month to one year. ONE HUNDRED the junction of on a commercial podium. The FIFTY TWO Da Tong Road Development also comprises a MILLION and Zhi Jiang Xi 3-storey basement for car park use. AND EIGHT Road HUNDRED Sujiaxiang The property comprises 458 basement THOUSAND Jing’an District car parking spaces of the Development ONLY) Shanghai completed in 2011. The PRC (100% interest The land use rights of the attributable Development have been granted for to the Group: terms of 70 years for residential use, HK$152,800,000) 40 years for commercial use and 50 years for office use commencing from 5 February 2007.

Notes:

1. Pursuant to the Shanghai Certificate of Real Estate Ownership No Hu Fang Di Zha Zi (2012) Di 006136 issued by the Shanghai Planning, Land and Resources Administration Bureau dated 30 June 2012, the title to the Development with a total gross floor area of 137,129.94 sq m is held by Shanghai Hu Xin Real Estate Development Co., Ltd (“Shanghai Hu Xin”), a 100% owned subsidiary of the Company.

2. Pursuant to the Shanghai Certificate of Real Estate Ownership Hu Fang Di Zha Zi (2007) Di 017286 issued by the Shanghai Housing and Land Resources Administration Bureau dated 12 November 2007, the land use rights of the Development, having a site area of 19,742 sq m, is vested in Shanghai Hu Xin for land use rights terms of 70 years for residential use, 40 years for commercial use and 50 years for office use commencing from 5 February 2007.

3. Pursuant to the Business Licence with Unified Social Credit No 91310000607350656K dated 4 March 2016, Shanghai Hu Xin was established with an operation period from 23 April 1995 to 22 April 2065.

4. Pursuant to the Construction Work Completion Recording Certificate No 2011SH0470 dated 13 December 2011, construction work of the Development with a total gross floor area of 147,923 sq m is completed and recorded.

5. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Shanghai Hu Xin legally owns the property; (ii) Shanghai Hu Xin can sell, lease, transfer or mortgage the property according to the relevant laws and regulations; and (iii) The property is free from mortgage and other encumbrances.

– III-35 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

13 Unsold car West Point (the “Development”) is a As advised, the property is HK$83,900,000 parking spaces of composite development comprising a currently let on hourly basis. (HONG KONG West Point residential tower and an office tower DOLLARS the junction of both erected on a 4-level commercial EIGHTY THREE Zhongshan Qi podium and a 2-level basement car MILLION AND Road and park completed in about 2010. NINE HUNDRED Guangfu Road THOUSAND Liwan District The property comprises 121 ONLY) Guangzhou basement car parking spaces of the Guangdong Development. (100% interest Province attributable The PRC The land use rights of the to the Group: Development have been granted for HK$83,900,000) terms of 70 years for residential use, 40 years for commercial, tourism and entertainment uses and 50 years for other use. Notes:

1. Pursuant to 121 Guangzhou Real Estate Title Certificates issued in 2011, the title to the property is held by Guangzhou Honghui Real Estate Development Co., Ltd. (“Guangzhou Honghui”), a 100% owned subsidiary of the Company for car park use.

2. Pursuant to the State-owned Land Use Rights Certificate No Sui Guo Yong (2005) Di 348 issued by the People’s Government of Guangzhou dated 11 January 2006, the title to the Development with a site area of approximately 6,003 sq m is held by Guangzhou Honghui for land use rights terms of 70 years for residential use, 40 years for commercial, tourism and entertainment uses and 50 years for other use.

4. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

– III-36 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

14 Unsold car King’s Park (the “Development”) is a As advised, the property is HK$9,400,000 parking spaces of residential development erected on a currently vacant. (HONG KONG King’s Park roughly rectangular-shaped site with a DOLLARS Nos 558-596/ site area of approximately 2,405.00 NINE MILLION 1006-1044 sq m (25,887 sq ft). AND FOUR Donghua Dong HUNDRED Road The property comprises 13 basement THOUSAND Yuexiu District car parking spaces of the Development ONLY) Guangzhou completed in 2013. Guangdong (100% interest Province The land use rights of the attributable The PRC Development have been granted for to the Group: terms of 70 years for residential use, HK$9,400,000) 40 years for commercial, tourism and entertainment uses and 50 years for (please see note 4) composite and other uses.

Notes:

1. Pursuant to the State-owned Land Use Rights Certificate No Sui Fu Guo Yong (2012) Di 01100013 issued by the People’s Government of Guangzhou dated 6 April 2012, the title to the land, having a site area of 2,405 sq m, is held by Guangzhou Gentle Real Estate Co Ltd (“Guangzhou Gentle”), a 100% owned subsidiary of the Company, for land use rights terms of 70 years for residential use, 40 years for commercial, tourism & entertainment uses and 50 years for other use.

2. Pursuant to thirteen Guangzhou Real Estate Title Certificates, the title to the property is vested in Guangzhou Gentle.

3. Pursuant to the Business Licence No Wai S0102014021483 dated 12 July 2016, Guangzhou Gentle was established with an operation period from 15 June 2007 to 15 June 2027.

4. As advised by the Company, a car parking space of the property have been sold at a consideration of approximately RMB666,400 prior to the date of valuation. As advised by the Company, title to the sold portion is held by Guangzhou Gentle as at the valuation date and being duly reflected on relevant Guangzhou Gentle’s financial statements. Consequently, we have included the sold portion in the valuation. The main reason for such situation to arise is due to the fact that transaction of the sold portion has not yet been completed and/or transferred to the purchaser. We have also made reference to the contracted consideration in the course of our valuation.

5. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Guangzhou Gentle legally owns the property; (ii) Except for the sold portion as mentioned in note (4), Guangzhou Gentle can sell, lease or transfer the property according to the relevant laws and regulations; and (iii) The property is free from mortgage and other encumbrances.

– III-37 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

15 Various portions Palm Spring (the “Development”) According to the information HK$805,600,000 of Stage I and II is a large-scale residential provided, the property is either (HONG KONG of Palm Spring development having a total site area vacant or owner-occupied. DOLLARS Caihong Planning of approximately 236,649.80 sq m EIGHT Area (2,547,298 sq ft). HUNDRED FIVE Western District MILLION AND Zhongshan The Development is planned to be SIX HUNDRED Guangdong developed by various stages with a THOUSAND Province total gross floor area of approximately ONLY) The PRC 564,388 sq m (6,075,072 sq ft). (100% interest The property comprises various attributable unsold residential units, club house to the Group: and commercial centre of Stage I and HK$805,600,000) II of the Development with a total gross floor area of 29,346.23 sq m (please see note 16) (315,883 sq ft) completed in 2012 and 2017 respectively. The area details are listed as follows:

Approximate Gross Floor Area Use sq m sq ft

Residential (apartment) 11,552.66 124,353 Residential (terrace house) 12,695.90 136,659 Club house 1,966.96 21,172 Commercial centre 3,130.71 33,699

Total: 29,346.23 315,883

In addition, the property also comprises 1,215 basement car parking spaces of the Development. (As advised by the Company, 230 basement car parking spaces among the 1,215 car parking spaces cannot be sold and will be leased on long- term basis).

The land use rights of the property have been granted for various terms with the last term expiring on 30 March 2075 for commercial/ residential uses.

– III-38 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes:

1. Pursuant to the State-owned Land Use Rights Certificate No Zhong Fu Guo Yong Zhong Fu Guo Yong (2011) Di 2000745 issued by the People’s Government of Zhongshan, the title to portion of the Development with a site area of approximately 16,608.00 sq m is held by 中山市寶麗房地產發展有限公司 (Zhongshan Bao Li Properties Development Co. Ltd.) (“Zhongshan Bao Li”), a 100% owned subsidiary of the Company for various terms expiring on 30 March 2075 and 23 October 2073 respectively for commercial/residential uses.

2. Pursuant to twenty seven State-owned Land Use Rights Certificates Nos Zhong Fu Guo Yong (2013) Di 2000884, 2000885, 2000898 to 2000904 and 2000936 to 2000953 all issued by the People’s Government of Zhongshan dated 22 October 2013 and 5 November 2013, the title to the land portion of the property with a site area of approximately 22,824.96 sq m is held by Zhongshan Bao Li for various terms expiring on 17 May 2074 and 30 March 2075 respectively for commercial/residential uses.

3. Pursuant to the Real Estate Title Certificate No Yue (2017) Zhongshan Shi Bu Dong Chan Quan Di 0294136, the title to the club house portion of the Development with a total gross floor area of 1,966.96 sq m is vested in Zhongshan Bao Li.

4. Pursuant to twenty seven Real Estate Title Certificates Nos Yue Fang Di Quan Zhong Fu Zi Di 0113018459, 0113018470, 0113019022, 0113019029, 0113019037, 0113019041, 0113019048, 0113019053, 0113019061, 0113021648, 0113021665, 0113021669, 0113021670, 0113021673, 0113021676, 0113021679, 0113021681, 0113021686, 0113021690, 0113021694, 0113021696, 0113021699, 0113021707, 0113021710, 0113021712, 0113021714 and 0113021739 all issued by the Zhongshan State Land and Resources Bureau dated 22 October 2013 and 5 November 2013, the title to commercial portion of the Development with a total gross floor area of 16,825.23 sq m is vested in Zhongshan Bao Li.

5. Pursuant to two Real Estate Title Certificates Nos Yue (2017) Zhongshan Shi Bu Dong Chan Quan Di 0294133 and 0294136, the title to the residential (apartment) portion of the Development with a total gross floor area of 25,635.74 sq m is vested in Zhongshan Bao Li.

6. Pursuant to thirteen Real Estate Title Certificates, the title to residential (terrace house) portion of the Development with a total gross floor area of 12,660.04 sq m is vested in Zhongshan Bao Li.

7. Pursuant to two Real Estate Title Proof Nos 2013-011237 and 2013-011239, the title to the residential (terrace house) portion of the Development with a total gross floor area of 792.11 sq m is vested in Zhongshan Bao Li.

8. Pursuant to the Real Estate Title Proof No 2013-011052 dated 27 August 2013, the title to the Development (Tower 8) with a total gross floor area of approximately 9,169.60 sq m is vested in Zhongshan Bao Li.

9. Pursuant to two Real Estate Title Certificates Nos Yue (2017) Zhongshan Shi Bu Dong Chan Quan Di 0294244 and 0090718, the title to 896 car parking spaces of the Development is vested in Zhongshan Bao Li.

10. Pursuant to the Real Estate Title Proof No 2013-011235, the title to 29 car parking spaces of the Development is vested in Zhongshan Bao Li.

11. Pursuant to the Business Licence with Unified Social Credit No 914420007480421393 dated 5 November 2015, Zhongshan Bao Li was established with an operation period from 17 April 2003 to 16 April 2053.

12. Pursuant to the Construction Work Completion Recording No Zhong Jian Yan Zi 2017 Nian Di 720 and 1121 dated 17 March 2017 and 25 April 2017 issued by the Zhongshan Housing and Urban and Rural Construction Bureau, the construction work of portion of the Development with a total gross floor area of 175,327.06 sq m is completed and recorded.

13. Pursuant to two Zhongshan Commodity Housing Pre-sale Permits Nos Zhong Jian Fang (Yu) Zi Di 2011346 and 2011445 both issued by the Zhongshan Housing and Urban and Rural Construction Bureau, pre-sale of portion of the Development with a total gross floor area of 46,807.03 sq m is permitted.

14. Pursuant to four Zhongshan Commodity Housing Pre-sale Permits Nos Zhong Jian Fang (Yu) Zi Di 2011269, 2012024, 2012023 and 2012029 all issued by the Zhongshan Housing and Urban and Rural Construction Bureau, pre-sale of portion of the Development with a total gross floor area of 27,756.91 sq m is permitted.

15. Pursuant to four Zhongshan Commodity Housing Pre-sale Permits Nos Zhong Jian Fang (Yu) Zi Di 2015103, 2015115, 2015119 and 2016181 all issued by the Zhongshan Housing and Urban and Rural Construction Bureau, pre-sale of portion of the Development with a total gross floor area of 107,887.80 sq m is permitted.

– III-39 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

16. As advised by the Company, residential (apartment) portion and residential (terrace house) portion of the property with a total gross floor area of 1,814.59 sq m and 592.59 sq m have been sold at a total consideration of RMB27,659,862 and RMB18,042,857 respectively prior to the date of valuation. As advised by the Company, title to the sold portions are held by Zhongshan Bao Li as at the valuation date and being duly reflected on relevant Zhongshan Bao Li’s financial statements. Consequently, we have included the sold portions in the valuation. The main reason for such situation to arise is due to the fact that transactions of the sold portions have not yet been completed and/or transferred to the purchasers. We have also made reference to the contracted consideration in the course of our valuation.

17. According to the Group’s specific terms of instruction to provide the breakdown of the market value of property, they are listed as follows:

Market value in existing state as at Property 31 January 2020

Residential HK$774,400,000 (apartment, terrace house, club house and car parking spaces)

Commercial centre HK$31,200,000

HK$805,600,000

18. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Zhongshan Bao Li legally owns the property; (ii) Except for the sold portion as mentioned in note (16), Zhongshan Bao Li can sell, lease or transfer the property according to the relevant laws and regulations; and (iii) The property is free from mortgage and other encumbrances.

– III-40 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

16 Unsold car Dolce Vita (the “Development”) is a As advised, the property is HK$9,700,000 parking spaces residential development developed in currently vacant. (HONG KONG of Dolce Vita five phases. DOLLARS (Xunfeng NINE MILLION Yujinsha Yuan) The property comprises 35 car parking AND SEVEN Jinshazhou spaces of the Development completed HUNDRED Heng Sha in 2014 to 2017. THOUSAND Baiyun District ONLY) Guangzhou The land use rights of the Guangdong Development have been granted for (50% interest Province terms of 70 years for residential use, attributable The PRC 40 years for commercial, tourist and to the Group: entertainment uses and 50 years for HK$4,850,000) other use commencing from 14 October 2008.

Notes:

1. Pursuant to the State-owned Land Use Rights Certificate No Sui Fu Guo Yong (2008) Di 01100190 issued by the People’s Government of Guangzhou dated 17 October 2008, the title to the land, having a site area of 226,912.48 sq m, is held by Guangzhou Beautiwin Real Estate Development Co., Ltd. (“Guangzhou Beautiwin”, a 95% owned subsidiary of Beautiwin Limited (“Beautiwin”, a 50% owned joint venture of the Company)) for land use rights terms of 70 years for residential use, 40 years for commercial, tourist and entertainment uses and 50 years for other use commencing from 14 October 2008.

2. Pursuant to thirty five Guangzhou Real Estate Title Certificates all issued by the Guangzhou Land Resources and Real Estate Administration Bureau, the title to the car park potion of the property is vested in Beautiwin.

3. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Beautiwin legally owns the property; (ii) Beautiwin can sell, lease or transfer the property according to the relevant laws and regulations; and (iii) The property is free from mortgage and other encumbrances.

– III-41 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

17 Unsold car Eastern Place (the “Development”) is The property is currently HK$13,200,000 parking spaces a large-scale commercial/residential vacant. (HONG KONG of Phase V of composite development developed by DOLLARS Eastern Place phases. THIRTEEN 787 Dongfeng MILLION AND East Road The property comprises 13 basement TWO HUNDRED Yuexiu car parking spaces of Phase V of the THOUSAND District Development completed in 2015. ONLY) Guangzhou Guangdong The land use rights of the (100% interest Province Development have been granted for attributable The PRC terms of 70 years for residential use, to the Group: 40 years for commercial, tourism and HK$13,200,000) entertainment uses and 50 years for other use.

Notes:

2. Pursuant to twelve Real Estate Title Certificates, the title to the property is vested in Guangzhou Grand Wealth.

3. Pursuant to the Business Licence with Unified Social Credit No 91440101618425764J dated 4 June 2019, Guangzhou Grand Wealth was established with an operation period from 15 June 1994 to 15 June 2021.

4. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Guangzhou Grand Wealth legally owns the property; (ii) Guangzhou Grand Wealth can sell, lease or transfer the property according to the relevant laws and regulations; and (iii) The property is free from mortgage and other encumbrances.

– III-42 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

18 Unsold villa The development comprises two The property is currently HK$668,600,000 (cultural studios) parcels of adjacent land located at the vacant. (HONG KONG located at the east east side of Yiwener Road, south side DOLLARS side of Yiwener of Caihong Road, west side of Tianyu SIX HUNDRED Road, south side Road and north side of Hengqin Main SIXTY EIGHT of Caihong Road, Road in Hengqin New Area of Zhuhai. MILLION AND west side of The total site area is approximately SIX HUNDRED Tianyu Road and 130,173.16 sq m. THOUSAND north side of ONLY) Hengqin Main The development is located at Road Hengqin New Area which is situated (80% interest Hengqin New at the southern part of Zhuhai. The attributable Area locality is planned to be tourist and to the Group: Zhuhai leisure area. It takes about 30 minutes HK$534,880,000) Guangdong to drive to city centre of Zhuhai. Province (please see note 6) The PRC The development is planned to be developed into a comprehensive development including commercial, office, hotel, cultural development with a total plot ratio gross floor area of approximately 260,289.94 sq m (2,801,761 sq ft).

The property comprises unsold villa (cultural studios) of the development with a total gross floor area of 14,020.40 sq m (150,916 sq ft) completed in 2018.

The land use rights of the property have been granted for terms of 40 years for office, commercial and servicing, hotel uses and 50 years for other uses commencing from 31 December 2013.

– III-43 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes:

2. Pursuant to the Construction Land Use Planning Permit No Zhu Heng Xin Gui Tu (Di Gui) (2014) 13 issued by the Zhuhai Hengqin New District Management Committee — Land & Planning Bureau dated 11 March 2014, the development with a total site area of 130,137.16 sq m was permitted to be developed.

3. Pursuant to the Construction Engineering Planning Permit No Zhu Heng Xin Gui Tu (Jian) (2016) 008 issued by Zhuhai Hengqin New District Management Committee — Land & Planning Bureau in 2016, portion of the development with a total gross floor area of 35,508.99 sq m is permitted to be constructed.

4. Pursuant to the Construction Work Commencing Permit No 440405201605240101 issued by Zhuhai Hengqin New District Management Committee — Construction and Environmental Bureau in 2016, construction works of portion of the development with a total gross floor area of 35,508.99 sq m (above ground: 18,704.56 sq m and below ground: 16,804.43 sq m) is permitted to be commenced.

5. Pursuant to the Zhuhai Commodity Housing Pre-sale Permit No HQS2017009 dated 7 December 2017, pre-sale of portion of the development with a total gross floor area of 18,342.35 sq m was permitted.

6. As advised by the Company, portion of the property with a total gross floor area of 3,434.38 sq m have been sold at a total consideration of RMB147,144,600 prior to the date of valuation. As advised by the Company, title to the sold portions are held by 珠海橫琴 as at the valuation date and being duly reflected on relevant 珠海橫琴’s financial statements. Consequently, we have included the sold portions in the valuation. The main reason for such situation to arise is due to the fact that transactions of the sold portions have not yet been completed and/or transferred to the purchasers. We have also made reference to the contracted consideration in the course of our valuation.

7. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) 珠海橫琴 legally owns the land use rights of the property; (ii) Except for the sold portion as mentioned in note (6), 珠海橫琴 can sell, lease or transfer the property according to the relevant laws and regulations; and (iii) The property is free from mortgage and other encumbrances.

– III-44 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

19 Various portions The property comprises various The property is currently HK$1,109,700,000 of a residential portions of a residential development vacant. (HONG KONG development located at Wuliqiao Road in Huangpu DOLLARS located at District of Shanghai with a site area of ONE BILLION Wuliqiao Road approximately 6,885.20 sq m. ONE HUNDRED 104 Jie Fang NINE MILLION Huangpu District The property comprises various AND SEVEN Shanghai residential units, club house and HUNDRED The PRC basement car parks with a total gross THOUSAND floor area of approximately 11,937.92 ONLY) sq m (128,500 sq ft) completed in 2019. The area details are as follows: (100% interest attributable Approximate to the Group: Gross Floor Area HK$1,109,700,000) Use sq m sq ft

Residential 6,583.32 70,863 Residential (basement) 649.70 6,993 Club house (basement) 248.97 2,680 Car park (basement) 4,455.93 47,964

Total: 11,937.92 128,500

The land use rights of the property have been granted for a term of 70 years for residential use expiring on 24 March 2085.

– III-45 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes:

1. Pursuant to the Shanghai Certificate of Real Estate Ownership Hu Fang Di Huang Zi (2015) Di 053145 issued by the Shanghai Housing and Land Resources Administration Bureau dated 23 September 2015, the land use rights of the property, having a site area of 6,885.2 sq m, is held by 上海麗星房地產發展有限公司 (Shanghai Li Xing Property Development Co. Ltd) (“上海麗星”), a 100% owned subsidiary of the Company, for a land use rights term of 70 years for residential use commencing from 25 March 2015 and expiring on 24 March 2085.

2. Pursuant to the Business Licence with Unified Social Credit No 913100003105637739 dated 9 November 2015, 上海麗星 was established with an operation period from 16 September 2014 to 15 September 2064.

3. Pursuant to the Construction Land Use Planning Permit No Hu Gui De (2015) EA31000020154388 issued by the Shanghai Planning and Land Resources Administration Bureau dated 23 April 2015, the development with a total site area of 6,885.20 sq m was permitted to be developed.

4. Pursuant to the Construction Engineering Planning Permit No Hu Jing Jian (2017) FA31000020174306 issued by the Shanghai Planning and Land Administration Bureau dated 31 March 2017, piling work of the development was permitted to be constructed.

5. Pursuant to the Construction Engineering Planning Permit No Hu Jing Jian (2017) FA31000020174766 issued by the Shanghai Planning and Land Administration Bureau dated 24 July 2017, the development of with a total gross floor area of 15,798.04 sq m was permitted to be constructed.

6. Pursuant to the Construction Work Commencement Permit No 1601HP0003D01 issued by the Shanghai Housing and Rural & Urban Construction Management Committee dated 14 April 2017, piling work of the development was permitted to be commenced.

7. Pursuant to the Construction Work Commencement Permit No 1601HP0003D02 issued by the Shanghai Housing and Rural & Urban Construction Management Committee dated 16 August 2017, construction work of the development with a total gross floor area of 15,798.04 sq m was permitted to be commenced.

8. Pursuant to the Construction Work Comprehensive Completion Recording Notice No LS190500498YS001 dated 12 August 2019, construction work of the development with a total gross floor area of 15,741.6 sq m was completed and recorded.

9. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) 上海麗星 legally owns the building ownership and construction works of the property; (ii) The land use rights of the property is subject to a mortgage and the mortgage is valid and enforceable; (iii) 上海麗星 can sell, lease or transfer the land use rights and construction works of the property according to the relevant laws and regulations and subject to approval from the mortgagee; and (iv) Except for the mortgage mentioned in note (9) (ii), the property is free from encumbrances.

– III-46 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Group III — Property interests held by the Group in the PRC

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

20 Various portions The development comprises two According to the information HK$519,800,000 located at the east parcels of adjacent land located at the provided, Lionsgate portion (HONG KONG side of Yiwener east side of Yiwener Road, south side of the property is leased DOLLARS Road, south side of Caihong Road, west side of Tianyu under a tenancy for ten years FIVE HUNDRED of Caihong Road, Road and north side of Hengqin Main expiring on 30 July 2029 NINETEEN west side of Road in Hengqin New Area of Zhuhai. subject to turnover rent whilst MILLION Tianyu Road and The total site area is approximately National Geographic portion AND EIGHT north side of 130,173.16 sq m. of the property is leased HUNDRED Hengqin Main under a tenancy for ten years THOUSAND Road The development is located at yielding a monthly rental of ONLY) Hengqin New Hengqin New Area which is situated approximately RMB297,000 Area at the southern part of Zhuhai. The expiring on 8 September 2029. (80% interest Zhuhai locality is planned to be tourist and attributable Guangdong leisure area. It takes about 30 minutes to the Group: Province to drive to city centre of Zhuhai. HK$415,840,000) The PRC The development is planned to be (please see note 6) developed into a comprehensive development including commercial, office, hotel, cultural development with a total plot ratio gross floor area of approximately 260,289.94 sq m (2,801,761 sq ft).

The property comprises various portions of the development including cultural attractions (Lionsgate and National Geographic) with a total gross floor area of approximately 27,247.50 sq m (293,292 sq ft) completed in 2019 and the gross floor area breakdowns are as follows:

Approximate Gross Floor Area Use sq m sq ft

Cultural attractions 22,566.50 242,906 (Lionsgate) Cultural attractions (National Geographic) 4,681.00 50,386

Total: 27,247.50 293,292

The land use rights of the development have been granted for terms of 40 years for office, commercial and servicing, hotel uses and 50 years for other uses commencing from 31 December 2013.

– III-47 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes:

(i) investment period will be thirty years from the issue date of the new business licence of 珠海橫琴 upon completion of the subscription.

(iii) the Investor has been granted the put option (but not an obligation) to require 珠海橫琴 or Winfield to acquire all equity interest held by the Investor in 珠海橫琴.

(iv) before the expiration of the investment period, 珠海橫琴 and/or Winfield have/has the right to (but not an obligation) to acquire the Investor’s equity interest in 珠海橫琴.

4. Pursuant to two Construction Engineering Planning Permits Nos Zhu Heng Xin Gui Tu (Jian) (2019) 028 and 030 both issued by the Zhuhai Hengqin New District Management Committee — Land & Planning Bureau dated 11 April 2019, portion of the development with a total gross floor area of 258,618.12 sq m is permitted to be constructed.

5. Pursuant to two Construction Work Commencing Permits Nos 440410201611180101 and 440405201609300301 both issued by Zhuhai Hengqin New District Management Committee — Construction and Environmental Bureau in 2019, construction works of portion of the development with a total gross floor area of 258,618.12 sq m is permitted to be commenced.

6. Due to the specific purpose for which the buildings and structures of portion of the property (Lionsgate) have been designed, there is no readily identifiable market comparable, we have thus valued it by Cost Approach with reference to the depreciated replacement cost. Depreciated replacement cost is defined as “the current cost of replacing an asset with its modern equivalent asset less deduction for physical deterioration and all relevant forms of obsolescence and optimization.” It is based on an estimate of the market value of the land in its existing use, plus the current cost of replacement of the improvements less allowance for physical deterioration and all relevant forms of obsolescence and optimization. In arriving at the value of the land portion, reference has been made to the sales evidence as available in the locality. The depreciated replacement cost of the property is subject to adequate potential profitability* of the business. It is assumed that the replacing of the property will be in compliance with the relevant laws and regulations and completed in timely fashion. In our valuation, it applies to the whole of the complex or development as a unique interest, and no piecemeal transactions of the complex or development is assumed.

– III-48 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

8. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

– III-49 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

21 Commercial Eastern Place (the “Development”) is According to the information HK$50,600,000 portion of a large-scale commercial/residential provided, portion of the (HONG KONG Eastern Place composite development developed by property with a total gross DOLLARS 787 Dongfeng phases. floor area of approximately FIFTY MILLION East Road 787 sq m is let under AND SIX Yuexiu District The property comprises a 3-level various tenancies yielding HUNDRED Guangzhou commercial block of the Development a total monthly rental of THOUSAND Guangdong with a total gross floor area of 4,042 approximately RMB88,000 ONLY) Province sq m (43,508 sq ft) completed in 2000. with last tenancy expiring The PRC Details of gross floor area breakdown on 31 August 2022 whilst (100% interest are as follows: the remaining portion of the attributable property is vacant or owner- to the Group: approximate occupied. HK$50,600,000) Gross Floor Area Use Floor sq m sq ft

Retail 1 235 2,529 Retail 2 552 5,942 Office 2 874 9,408 Club house 1-2 2,358 25,381 Others 1-3 23 248

Total: 4,042 43,508

The land use rights of the property have been granted for a term of 50 years commencing from 30 September 1997 for composite use.

Notes:

1. Pursuant to the Guangzhou Real Estate Title Proof No A0001036 issued by the Guangzhou Land Resources and Real Estate Administration Bureau dated 8 June 2007, the title of the Development (club house and basement car park portion) with a total gross floor area of 12,369.26 sq m is vested in Guangzhou Grand Wealth Properties Ltd (“Guangzhou Grand Wealth”), a 100% owned subsidiary of the Company, for a term of 50 years commencing from 30 September 1997 for composite use.

2. Pursuant to the Business Licence with Unified Social Credit No 91440101618425764J dated 4 June 2019, Guangzhou Grand Wealth was established with an operation period from 15 June 1994 to 15 June 2021.

3. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Guangzhou Grand Wealth legally owns the property; (ii) According to registration of transfer of community club house in the minutes about the transfer of club house (2007) No. 2 issued by the Guangzhou Real Estate Transaction Registration Centre dated 1 November 2007, the property can be sold provided that, inter-alia, 1) prior to title transfer, there is a 15-day public notice within the Development; 2) no individual owners of the Development raise objection in the period of 15-day public notice; and 3) the nature of the property for club house use would not change; (iii) Save as abovementioned, Guangzhou Grand Wealth can sell, lease or transfer the property according to the relevant laws and regulations; and (iv) The property is free from mortgage and other encumbrances.

– III-50 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Group IV — Property interests held under development by the Group in the PRC

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

22 A commercial The property comprises a parcel of Superstructure works of the HK$2,005,500,000 development land with a site area of 9,961 sq m property is currently under (HONG KONG located at Tian (107,220 sq ft). construction and scheduled to DOLLARS Mu Road West be completed in third quarter TWO BILLION and Da Tong The property is planned to be of 2022. FIVE MILLION Road developed into a 33-storey office AND FIVE Jing’an District building erected upon a 3-level HUNDRED Shanghai commercial podium and three levels THOUSAND The PRC of car park basement with a total gross ONLY) floor area of approximately 100,255 sq m (1,079,145 sq ft). The area details (100% interest are listed as follows: attributable to the Group: Approximate HK$2,005,500,000) Gross Floor Area Use sq m sq ft (please see notes 1, 9 and 10) Office 55,688 599,426 Office (transfer to government) 5,392 58,039 Retail 8,749 94,174 Other 6,636 71,430 Car park (basement) 23,790 256,076

Total: 100,255 1,079,145

The land use rights of the property have been granted for terms of 40 years and 50 years from 30 September 2016 for commercial use and office use respectively.

– III-51 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes:

1. Pursuant to the Contract for Grant of Shanghai State-owned Construction Land Use Rights No Hu Jing Gui Tu (2016) Chu Rang He Tong Bu Zi Di 15 (the “Land Grant Contract”) entered into between the Shanghai Jing’an Planning, Land and Resources Administrative Bureau (“Party A”), Shanghai Hankey Real Estate Development Co Ltd (“Shanghai Hankey”) and Shanghai Zhabei Plaza Real Estate Development Co. Ltd (“Shanghai Zhabei”), wholly owned subsidiaries of the Company (collectively referred to as “Party B”) dated 30 September 2016, Party A agreed to grant the land use rights of a parcel of land to Party B. The said contract contains, inter-alia, the following salient conditions:

(i) Total site area : 9,961.30 sq m

(ii) Use : Commercial and office

(iii) Land use term : 40 years for commercial use and 50 years for office use commencing from 30 September 2016

(iv) Plot ratio : 7.1 (above ground)

(v) Total gross floor area : 70,557 sq m (above ground) (commercial gross floor area≤ 20% and office gross floor area ≥ 80%) and 23,790 sq m (below ground)

(vi) Building height : Not exceeding 180 m

(vii) Green area ratio : Not less than 20% of site area

(viii) Land grant fee : RMB91,114,703.98

(ix) Interest : Shanghai Hankey: 46% Shanghai Zhabei: 54%

(x) Building covenant : Construction works should be commenced on or before 30 September 2017 and construction works should be completed on or before 29 September 2021

(xi) Remarks: : — portion of the office portion of the property with a total gross floor area of 5,392 sq m will be transferred to the government at nil consideration upon completion.

— office and commercial portion of the property must be held by Party B for self- operation not less than 20 years from the date of real estate title registration.

— 150 basement car parking spaces of the property, upon completion, will be used by the government at nil rent.

2. Pursuant to the Real Estate Certificate No Hu (2017) Jing Zi Bu Dong Chan Quan Di 016752 issued by the Shanghai Real Estate Registration Bureau dated 25 September 2017, the land use rights of a site with site area of approximately 9,961 sq m have been granted to Shanghai Hankey and Shanghai Zhabei for a term of 40 years for commercial use and 50 years for office use commencing from 30 September 2016. The office and commercial portion of the property must be held by the Party B for self- operation not less than 20 years from the date of real estate title registration.

3. Pursuant to the Business Licences with Unified Social Credit Nos 91310000607242356N and 91310000607323391M dated 27 July 2017 and 6 August 2018, Shanghai Hankey and Shanghai Zhabei were established with an operation periods from 25 October 1993 to 24 October 2066 and from 12 September 1994 to 11 September 2067, respectively.

4. Pursuant to the Construction Land Use Planning Permit No Hu Jing De (2016) EA31010620165117 issued by the Shanghai Planning and Land Resources Administration Bureau dated 1 December 2016, the proposed development of the property with a total gross floor area of 70,557 sq m was permitted to be developed.

5. Pursuant to the Construction Engineering Planning Permit No Hu Jing Jian (2017) FA31010620174768 issued by the Shanghai Jing’an District Planning and Land Administration Bureau dated 27 July 2017, the proposed development of the property was permitted to be constructed.

– III-52 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

6. Pursuant to the Construction Engineering Planning Permit No Hu Jing Jian (2018) FA31010620187793 issued by the Shanghai Jing’an District Planning and Land Administration Bureau dated 3 November 2018, the proposed development of the property with a total gross floor area of 100,255 sq m was permitted to be constructed.

7. Pursuant to the Construction Work Commencement Permit No 1702JA0113D01 issued by the Shanghai Jing’an District Construction and Management Committee dated 26 September 2017, piling work of the proposed development of the property was permitted to be commenced.

8. Pursuant to the Construction Work Commencement Permit No 1702JA0113D02 issued by the Shanghai Jing’an District Construction and Management Committee dated 24 January 2019, construction work of the proposed development of the property with a total gross floor area of 100,255 sq m was permitted to be commenced.

9. According to note 1 (xi) as mentioned above, portion of the office portion of the property with a total gross floor area of 5,392 sq m will be transferred to the government at nil consideration upon completion. In addition, 150 basement car parking spaces of the property, upon completion, will be used by the government at nil rent. In the course of our valuation, we have not opined any market value to such portions.

10. As advised by the Company, the construction cost incurred, outstanding construction costs (including professional fees) and outstanding ancillary facilities cost of the property were approximately RMB354,400,000, RMB789,700,000 and RMB80,200,000 respectively as at the date of valuation. Accordingly, we have taken into account the said costs in our valuation. In our opinion, the gross development value of the proposed developments of the property, assuming it were complete as at the valuation date, was estimated approximately as RMB3,097,000,000.

11. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Shanghai Hankey and Shanghai Zhabei legally own the land use rights and construction works of the property; (ii) The land use rights of the property is subject to a mortgage and the mortgage is valid and enforceable; (iii) Shanghai Hankey and Shanghai Zhabei can transfer, lease or mortgage the land use rights and construction works of the property according to the relevant laws and regulations and subject to approval from the mortgagee and compliance of the Contract for Grant of Shanghai State-owned Construction Land Use Right as mentioned in note (1); (iv) According to the Contract for Grant of Shanghai State-owned Construction Land Use Rights as mentioned in note (1), there will be a monetary penalty of 0.1% of the land grant fee per day if the construction works of the property cannot be completed on or before 29 September 2021. However, Shanghai Hankey and Shanghai Zhabei can from time to time apply for postponement of the construction works completion in avoidance of the monetary penalty; and (v) Except for the mortgage mentioned in note (11) (ii), the property is free from encumbrances.

– III-53 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

23 Haizhu Plaza The property comprises an irregular- Foundation works of the HK$1,103,000,000 Chang Di Main shaped site with a site area of property is currently under (HONG KONG Road approximately 8,427 sq m construction and scheduled to DOLLARS Yuexiu District (90,708 sq ft). be completed in second quarter ONE BILLION Guangzhou of 2023. ONE HUNDRED Guangdong The property is planned to be AND THREE Province developed into a commercial MILLION ONLY) The PRC development with approximate gross floor areas listed as follows: (100% interest attributable Approximate to the Group: Gross Floor Area HK$1,103,000,000) Use sq m sq ft (please see note 6) Office 44,283 476,662 Retail 9,677 104,163 Historical building 1,990 21,421 Car park 15,846 170,566 Others 2,040 21,959

Total: 73,836 794,771

The land use rights of the property have been granted for terms of 40 years for commercial, tourism and entertainment uses and 50 years for other use.

Notes:

1. Pursuant to the Contract for Grant of State-owned Land Use Rights No Sui Guo Di Chu He (97) 155 entered into between Guangzhou State Land Bureau (“Party A”) and Guangzhou Guang Bird Property Development Ltd (“Guangzhou Guang Bird”), a 100% owned subsidiary of the Company (“Party B”) dated 29 April 1997, Party A agreed to grant the land use rights of a parcel of land to Party B. The said contract contains, inter-alia, the following salient conditions:

(i) Site area : 8,427 sq m

(ii) Use : Commercial

(iii) Land use term : 40 years for commercial, tourism and entertainment uses and 50 years for others use

(iv) Plot ratio : 12.46

(v) Total gross floor area : 104,500 sq m (6,650 sq m for commercial use, 96,650 sq m for office use and 1,200 sq m for club house)

(vi) Maximum/average height : 38 storeys

(vii) Land grant fee : RMB56,108,811

– III-54 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

2. Pursuant to the Business Licence No Wai S0102014005781 dated 8 July 2016, Guangzhou Guang Bird was established with an operation period from 18 September 1993 to 18 September 2023.

3. Pursuant to the Construction Land Use Planning Permit No Sui Gui Tu Gian Yong Zi (2006) Di 170 issued by the Guangzhou State Land Resources and Housing Administration Bureau dated 2 June 2006, the property with a site area of approximately 8,427 sq m was permitted to be developed from June 2006 to June 2008.

4. Pursuant to a letter for extension of construction period issued by the Guangzhou State Land Resources and Planning Committee dated 19 April 2018, commencement date and completion date for the construction works of the property (as mentioned in note 3) were permitted to extend to 19 April 2019 and 19 April 2021 respectively.

5. Pursuant to the Construction Engineering Planning Permit No Sui Guo Tu Gui Hua Jian Zheng (2019) 372 issued by the Guangzhou State Land Resources and Planning Committee dated 23 January 2019, portion of the property with a total gross floor area of 56,517.6 sq m (above ground) and 13,997.3 sq m (below ground) is permitted to be constructed.

6. As advised by the Company, the construction cost incurred, outstanding construction cost (including professional fees) and outstanding relocation cost, demolition cost and ancillary facilities cost of the property were approximately RMB38,700,000, RMB709,800,000 and RMB89,800,000 respectively as at the date of valuation. Accordingly, we have taken into account the said costs in our valuation. In our opinion, the gross development value of the proposed developments of the property, assuming it were complete as at the valuation date, was estimated approximately as RMB2,417,000,000.

7. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) The Contract for Grant of State-owned Land Use Rights and the Construction Land Use Planning Permit are legal and valid; (ii) Guangzhou Guang Bird legally owns the land use rights of the property; (iii) Guangzhou Guang Bird can obtain the Real Estate Certificate for the land use rights of the property within 30 days after application to relevant authority and Guangzhou Guang Bird has no legal obstacles in obtaining the Real Estate Certificate; (iv) Guangzhou Guang Bird can apply for the postponement of the construction works completion provided that there is no situation of non-permitted pending construction works. No penalty would arise under the aforesaid circumstance; (v) After obtaining the Real Estate Certificate, Guangzhou Guang Bird can sell, lease or transfer the land use rights of the property according to relevant laws and regulations; and (vi) The property is free from mortgage and other encumbrances.

– III-55 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

24 Phases 2-2 and Palm Spring (the “Development”) is Superstructure works of HK$2,286,300,000 2-4 of Palm a large-scale residential development the property is currently (HONG KONG Spring comprising four roughly rectangular- completed whilst the DOLLARS Caihong Planning shaped sites (namely plots A, B, C and remaining construction works TWO BILLION Area D) with a total area of approximately is scheduled to be completed TWO HUNDRED Western District 236,649.80 sq m (2,547,298 sq ft). in third quarter of 2020 to EIGHTY SIX Zhongshan second quarter of 2021. MILLION Guangdong The Development is planned to be AND THREE Province developed by various stages with a HUNDRED The PRC total gross floor area of approximately THOUSAND 564,388 sq m (6,075,072 sq ft). ONLY)

The property comprises phases 2-2 (100% interest and 2-4 of the Development with attributable a proposed total gross floor area of to the Group: 272,347 sq m (2,931,543 sq ft). The HK$2,286,300,000) area details are listed as follows: (please see notes Phase 2-2 8 to 10)

Approximate Gross Floor Area Use sq m sq ft

Residential (apartment) 137,639 1,481,546 Commercial 8,782 94,530 Others 2,949 31,743 Car park (basement) 44,936 483,691

Total: 194,306 2,091,510

Phase 2-4

Approximate Gross Floor Area Use sq m sq ft

Residential (apartment) 45,162 486,124 Commercial* 14,530 156,401 Others 1,330 14,316 Car park (basement)* 17,019 183,192

Total: 78,041 840,033

* The gross floor area of commercial and car park (basement) portions of Phase 2-4 of the Development as mentioned above includes ancillary facilities of 11,096 sq m and 3,997 sq m respectively.

The land use rights of the property have been granted for a term expiring on 30 March 2075 for commercial/ residential uses.

– III-56 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes:

1. Pursuant to two State-owned Land Use Rights Certificates Nos Zhong Fu Guo Yong (2005) Di 200204 and Zhong Fu Guo Yong (2011) Di 2000311 both issued by the People’s Government of Zhongshan, the title to portion of the Development with a site area of approximately 55,434.0 sq m and 31,614.9 sq m respectively are held by 中山市寶麗房地產發展有限公司 (Zhongshan Bao Li Properties Development Co. Ltd.) (“Zhongshan Bao Li”), a 100% owned subsidiary of the Company for a common term expiring on 30 March 2075 for commercial/residential uses.

2. Pursuant to the Business Licence with Unified Social Credit No 914420007480421393 dated 5 November 2015, Zhongshan Bao Li was established with an operation period from 17 April 2003 to 16 April 2053.

3. Pursuant to the Construction Land Use Planning Permit No De Zi Di 281222010030037(Bu) issued by the Zhongshan Planning Bureau dated 7 April 2010, portion of the Development with a site area of approximately 181,095.20 sq m was permitted to be developed.

4. Pursuant to two Construction Engineering Planning Permits Nos Jian Zi Di 281212017010039 and 281212017010038 both issued by the Zhongshan Urban and Rural Planning Bureau dated 19 June 2017, portion of the Development with a total gross floor area of approximately 272,347.90 sq m is permitted to be constructed.

5. Pursuant to two Construction Work Commencing Permits Nos 442000201712012201 and 442000201712051801 both issued by the Zhongshan Housing, Urban and Rural Construction Bureau dated 1 December 2017 and 5 December 2017 respectively, construction works of portion of the property with a total gross floor area of 272,347.90 sq m is permitted to be commenced, with respective contract dates of 809 days and 1214 days. As advised by the Company, the expiry dates for the construction works as stipulated in the aforesaid permits are 18 February 2020 and 2 April 2021 respectively.

6. Pursuant to the Zhongshan Commodity Housing Pre-sale Permit No Zhong Jian Fang (Yu) Zi Di 2019335 issued by the Zhongshan Housing and Urban and Rural Construction Bureau dated 17 September 2019, pre-sale of portion of the property with a total gross floor area of 24,350.73 sq m is permitted.

7. Pursuant to the Zhongshan Commodity Housing Pre-sale Permit No Zhong Jian Fang (Yu) Zi Di 2019452 issued by the Zhongshan Housing and Urban and Rural Construction Bureau dated 12 December 2019, pre-sale of portion of the property with a total gross floor area of 23,807.97 sq m is permitted.

8. The gross floor area of commercial and car park (basement) portions of Phase 2-4 of the Development as mentioned above includes ancillary facilities of 11,096 sq m and 3,997 sq m respectively. As advised by the Company, the aforesaid portions will be transferred to the government at nil consideration upon completion. Therefore, we have assigned no commercial value to these portions in the course of our valuation.

9. As advised by the Company, residential portion of Phase 2-4 of the Development with a total gross floor area of approximately 2,117 sq m have been pre-sold at a total consideration of RMB30,207,032 prior to the date of valuation. As advised by the Company, title to the pre-sold portions are held by Zhongshan Bao Li as at the valuation date and being duly reflected on relevant Zhongshan Bao Li’s financial statements. Consequently, we have included the pre-sold portions in the valuation. The main reason for such situation to arise is due to the fact that transactions of the pre-sold portions have not yet been completed and/or transferred to the purchasers. We have also made reference to the contracted consideration in the course of our valuation.

10. As advised by the Company, the construction cost incurred and outstanding construction cost (including professional fee) of the proposed development of the property were approximately RMB554,300,000 and RMB715,800,000 respectively as at the date of valuation. Accordingly, we have taken into account the said costs in our valuation. In our opinion, the gross development value of the proposed developments of the property, assuming it were complete as at the valuation date, was estimated approximately as RMB3,395,000,000.

11. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) Zhongshan Bao Li legally owns the property; (ii) Zhongshan Bao Li can apply for the postponement of the construction works completion provided that there is no situation of non-permitted pending construction works. No penalty would arise under the aforesaid circumstance; (iii) Zhongshan Bao Li can sell, lease or transfer the property according to the relevant laws and regulations; and (iv) The property is free from mortgage and other encumbrances.

– III-57 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

25 Various portions The development comprises two The construction works of the HK$2,999,300,000 located at the east parcels of adjacent land located at the property have been completed. (HONG KONG side of Yiwener east side of Yiwener Road, south side DOLLARS Road, south of Caihong Road, west side of Tianyu TWO BILLION side of Caihong Road and north side of Hengqin Main NINE HUNDRED Road, west side Road in Hengqin New Area of Zhuhai. NINETY NINE of Tianyu Road The total site area is approximately MILLION and north side of 130,173.16 sq m. AND THREE Hengqin Main HUNDRED Road The development is located at THOUSAND Hengqin New Hengqin New Area which is situated ONLY) Area at the southern part of Zhuhai. The Zhuhai locality is planned to be tourist and (80% interest Guangdong leisure area. It takes about 30 minutes attributable Province to drive to city centre of Zhuhai. to the Group: The PRC HK$2,399,440,000) The development is planned to be developed into a comprehensive (please see notes development including commercial, 13 and 14) office, hotel, cultural development with a total plot ratio gross floor area of approximately 260,289.94 sq m (2,801,761 sq ft).

The property comprises various portions of the development including office, serviced apartment(cultural workshops) and villa (cultural studios) with a total gross floor area of approximately 96,995.26 sq m (1,044,057 sq ft) and the area details are listed as follows:

Approximate Gross Floor Area Use sq m sq ft

Office 50,447.75 543,020 Serviced apartment (cultural workshops) 40,136.12 432,025 Villa (cultural studios) 4,410.55 47,475

Sub-total: 94,994.42 1,022,520

Car park (below ground) 2,000.84 21,537

Total: 96,995.26 1,044,057

The land use rights of the property have been granted for terms of 40 years for office, commercial and servicing, hotel uses and 50 years for other uses commencing from 31 December 2013.

– III-58 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes:

1. Pursuant to two Guangdong Province Real Estate Title Certificates Nos Yue Fang Di Quan Zheng Zhu Zi Di 0100244267 and 0100244268 both issued by the Zhuhai Real Estate Registration Centre dated 27 May 2014, the title to the development, having a total site area of 130,173.16 sq m, is held by 珠海橫琴麗新文創天地有限公司 (Zhuhai Hengqin Laisun Creative Cultural City Co., Ltd.) (“珠海橫琴”), an 80% indirectly owned subsidiary of the Company and 20% indirectly owned subsidiary of Lai Sun Development Company Limited (“LSD”) for land use rights terms of 40 years for office, commercial and servicing, hotel uses and 50 years for other uses commencing from 31 December 2013.

2. Pursuant to the Contract for Grant of State-owned Construction Land Use Rights No. 440401-2013-000023 (the “Land Grant Contract”) entered into between the Land and Resources Bureau of Zhuhai (“Party A”) and Winfield Concept Limited (永輝基業有限公司) (“Party B”) dated 27 September 2013, Party A agreed to grant the land use rights of two parcels of land to Party B. The said contract contains, inter-alia, the following salient conditions:

(i) Total site area : 130,173.16 sq m (Land parcel 1: 93,137.04 sq m, Land parcel 2: 37,036.12 sq m)

(ii) Use : Cultural/creative and commercial/servicing

(iii) Land use term : 50 years for cultural and creative uses and 40 years for commercial, office and hotel uses

(iv) Plot ratio : Not exceeding 2.0

(v) Total gross floor area : Not exceeding 260,346.32 sq m (Land parcel 1: 186,274.08 sq m, Land parcel 2: 74,072.24 sq m)

(vi) Building height : Not exceeding 100 m

(vii) Green area ratio : Not less than 30% of site area

(viii) Land grant fee : RMB523,296,103.2

(ix) Building covenant : Construction works should be commenced within twelve months since the handover of the land and construction works should be completed within forty-eight months since the handover of the land

(x) Remarks : — Gross floor areas allocation for commercial use and hotel and office uses should not be greater than 10% and 20% respectively whilst that for cultural use should not be less than 70%.

— Saleable gross floor area is restricted to 50% of total countable plot ratio gross floor area of thedevelopment .

3. Advised by the Company, Party B is an 80% indirectly owned subsidiary of the Company and 20% indirectly owned subsidiary of LSD.

4. Pursuant to the amendment of the Land Grant Contract in February 2014, the grantee of the two parcels of land was changed from Party B to 珠海橫琴. Party B has established 珠海橫琴 with Business Licence No 440003490000497 dated 3 January 2014 and 珠海橫琴 has obtained two Guangdong Province Real Estate Title Certificates as mentioned in note 1.

– III-59 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

5. Pursuant to an agreement entered into between 珠海大橫琴置業有限公司 (Zhuhai Da Hengqin Real Estate Co., Ltd) (the “Investor”), 珠海橫琴 and Party B on 19 January 2020, the Investor has agreed to make a total capital contribution of approximately RMB948.4 million in 珠海橫琴. Upon completion of the registration of change in the equity interest held by Party B and the Investor in 珠海橫琴, 珠海橫琴 will be held as to approximately 83.32% by Party B and approximately 16.68% by the Investor. The salient conditions stipulated in the agreement are, inter-alia, as follows:

(i) investment period will be thirty years from the issue date of the new business licence of 珠海橫琴 upon completion of the subscription.

(ii) the dividend distribution will be made out of distributable profits of 珠海橫琴 generated from the operations in respect of the self-owned portion only (as agreed between the Investor, 珠海橫琴 and Winfield) to the Investor and Party B at a 30:70 ratio. The dividend distribution paid to the Investor in each financial year shall be not less than 0.5% per annum of its capital injection to 珠海橫琴 during the investment period.

(iii) the Investor has been granted the put option (but not an obligation) to require 珠海橫琴 or Party B to acquire all equity interest held by the Investor in 珠海橫琴.

(iv) before the expiration of the investment period, 珠海橫琴 and/or Party B have/has the right to (but not an obligation) to acquire the Investor’s equity interest in 珠海橫琴.

6. Pursuant to the Construction Land Use Planning Permit No Zhu Heng Xin Gui Tu (Di Gui) (2014) 13 issued by the Zhuhai Hengqin New District Management Committee — Land & Planning Bureau dated 11 March 2014, the development with a total site area of 130,137.16 sq m was permitted to be developed.

7. Pursuant to the Construction Engineering Planning Permit No Zhu Heng Xin Gui Tu (Jian) (2016) 009 issued by the Zhuhai Hengqin New District Management Committee — Land & Planning Bureau in 2016, portion of the development with a total gross floor area of 8,623.48 sq m is permitted to be constructed.

8. Pursuant to the Construction Engineering Planning Permit No Zhu Heng Xin Gui Tu (Jian) (2019) 028 issued by the Zhuhai Hengqin New District Management Committee — Land & Planning Bureau dated 11 April 2019, potion of the development with a total gross floor area of 159,839.87 sq m is permitted to be constructed.

9. Pursuant to the Construction Work Commencing Permit No 440410201611180101 issued by Zhuhai Hengqin New District Management Committee — Construction and Environmental Bureau in 2019, construction works of portion of the development with a total gross floor area of 159,839.87 sq m is permitted to be commenced.

10. Pursuant to the Construction Work Commencing Permit No 440405201803090101 dated 4 September 2018 issued by Zhuhai Hengqin New District Management Committee — Construction and Environmental Bureau, construction works of portion of the development with a total gross floor area of 8,623.48 sq m is permitted to be commenced.

11. Pursuant to the Zhuhai Commodity Housing Pre-sale Permit No HQS2017009-1 dated 1 July 2019, pre-sale of portion of the development with a total gross floor area of 4,410.55 sq m was permitted.

12. Pursuant to the Zhuhai Commodity Housing Pre-sale Permit No HQS20190012 dated 9 December 2019, pre-sale of portion of the development with a total gross floor area of 78,251.53 sq m was permitted.

13. As advised by the Company, serviced apartment (cultural workshops) portion of the property with a total gross floor area of approximately 2,950 sq m have been pre-sold at a total consideration of RMB97,581,000 prior to the date of valuation. As advised by the Company, title to the pre-sold portions are held by 珠海橫琴 as at the valuation date and being duly reflected on relevant珠海橫琴’s financial statements. Consequently, we have included the pre-sold portions in the valuation. The main reason for such situation to arise is due to the fact that transactions of the pre-sold portions have not yet been completed and/or transferred to the purchasers. We have also made reference to the contracted consideration in the course of our valuation.

14. As advised by the Company, the construction cost incurred and outstanding construction cost (including professional fee) of the proposed development of the property were approximately RMB1,122,500,000 and RMB289,200,000 respectively as at the date of valuation. Accordingly, we have taken into account the said costs in our valuation. In our opinion, the gross development value of the proposed developments of the property, assuming it were complete as at the valuation date, was estimated approximately as RMB3,093,000,000.

– III-60 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

15. According to the Group’s specific terms of instruction to provide the breakdown of the market value of property, they are listed as follows:

Market value in existing state as at Property 31 January 2020

Office HK$1,624,600,000

Serviced apartment (cultural workshops) and villa (cultural studios) HK$1,374,700,000

HK$2,999,300,000

16. According to the information provided by the Company, although the property has been completed as at the valuation date, completion certificate has not yet been obtained. As advised, the property is thus classified as “property under development” for the purpose in aligning with the classification of the Company’s financial statement based on relevant accounting policy.

17. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

(i) 珠海橫琴 legally owns the land use rights of the property; (ii) As mentioned in note (2) (x), 50% of the total countable plot ratio gross floor area of the development is restricted for sale at the moment. 珠海橫琴 should hold such portion and has the right to lease such portion and to grant the lessee to sublease; (iii) After fulfilling relevant conditions for uplifting the sales restrictions as mentioned in note (17) (ii), 珠海橫琴 can sell, lease or transfer the property according to the relevant laws and regulations; and (iv) The property is free from mortgage and other encumbrances.

– III-61 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

26 Two parcels of The property comprises two parcels Superstructure works of HK$1,346,000,000 land located at the of adjacent land located at the east school portion of the property (HONG KONG east side of side of Yiwener Road, south side is currently completed whilst DOLLARS Yiwener Road, of Xiangjiang Road, west side of foundation works of the ONE BILLION south side of Yiwenyi Road and north side of remaining portion of property THREE Xiangjiang Road, Zhishui Road in Hengqin New Area is currently under construction HUNDRED AND west side of of Zhuhai. The total site area is and scheduled to be completed FORTY SIX Yiwenyi Road approximately 143,768.37 sq m. in fourth quarter of 2023. MILLION ONLY) and north side of Zhishui Road The property is located at Hengqin (100% interest Hengqin New New Area which is situated at the attributable Area southern part of Zhuhai. The locality to the Group: Zhuhai is planned to be tourist and leisure HK$1,346,000,000) Guangdong area. It takes about 30 minutes to drive Province to city centre of Zhuhai. (please see The PRC note 12) The property is planned to be developed into a comprehensive development including commercial, retail, school, cultural facilities with a total plot ratio gross floor area of approximately 287,536.74 sq m (3,095,045 sq ft).

The land use rights of the property have been granted for terms expiring on 28 December 2058 for retail, commercial, business and finance uses and 28 December 2068 for cultural facilities uses.

– III-62 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Notes: 1. Pursuant to two Real Estate Title Certificates Nos Yue (2019) Zhuhai Shi Bu Dong Chan Quan Di 0031510 and 0031511 both issued by the Zhuhai City State Land Bureau dated 8 April 2019, the title to the property, having a total site area of 143,768.37 sq m, is held by 珠海橫琴麗新創新方發展有限公司 (Zhuhai Hengqin Laisun Novotown Development Co., Ltd.) (“創新方發展”), a 100% owned subsidiary of the Company for land use rights terms expiring on 28 December 2058 for retail, commercial, business and finance uses and 28 December 2068 for cultural facilities uses. 2. Pursuant to the Contract for Grant of State-owned Construction Land Use Rights No. 440401-2018-000041 (the “Land Grant Contract”) entered into between the Land and Resources Bureau of Zhuhai (“Party A”) and Supreme Motion Limited (“Party B”) dated 29 December 2018, Party A agreed to grant the land use rights of two parcels of land to Party B. The said contract contains, inter-alia, the following salient conditions: (i) Total site area : 143,768.37 sq m (Land parcel 1: 56,132.69 sq m, Land parcel 2: 87,635.68 sq m) (ii) Use : Cultural facilities, retail, commercial, business and finance (iii) Land use term : 50 years for cultural facilities uses and 40 years for retail, commercial, business and finance uses (iv) Total plot ratio : Not exceeding 287,536.74 sq m (Land parcel 1: 112,265.38 sqm, Land parcel 2: gross floor area 175,271.36 sq m) (v) Building height : Land parcel 1: Not exceeding 80 m, Land parcel 2: Not exceeding 100 m (vi) Green area ratio : Not less than 30% of site area (vii) Land grant fee : RMB761,972,361 (viii) Building covenant : Construction works should be commenced before 29 December 2019 and construction works should be completed before 29 December 2023 (ix) Remarks : Saleable gross floor area is restricted to 50% of total plot ratio gross floor area of the property. 3. Pursuant to the Business Licence with Unified Social Credit No 91440400MA52Q4U87Q dated 2 January 2019,創新方發展 was established with an operation period of 50 years. 4. Pursuant to the amendment contract to the Land Grant Contract dated 31 January 2020, the grantee of the two parcels of land as mentioned in note 2 was changed from Party B to 創新方發展. 5. Pursuant to the Construction Land Use Planning Permit No Zhu Heng Xin Gui Tu (Di Gui) (2019) 005 issued by the Zhuhai Hengqin New District Management Committee — Land & Planning Bureau dated 18 February 2019, the property with a total site area of 143,768.37 sq m was permitted to be developed. 6. Pursuant to the Construction Engineering Planning Permit No Zhu Heng Xin Gui Tu (Jian) (2019) 024 issued by the Zhuhai Hengqin New District Management Committee — Land & Planning Bureau dated 12 December 2019, miscellaneous works of the property is permitted to be constructed. 7. Pursuant to the Construction Engineering Planning Permit No Zhu Heng Xin Gui Tu (Jian) (2020) 003 issued by the Zhuhai Hengqin New District Management Committee — Land & Planning Bureau dated 3 January 2020, portion of the property with a total gross floor area of 16,114.37 sq m is permitted to be constructed. 8. Pursuant to three Construction Engineering Planning Permits Nos Zhu Heng Xin Gui Tu (Jian) (2020) 012, 013 and 014 all issued by the Zhuhai Hengqin New District Management Committee — Land & Planning Bureau dated 5 March 2020, portion of the property (school) with a total gross floor area of 57,693.19 sq m is permitted to be constructed. 9. Pursuant to two Construction Work Commencing Permits Nos 440405201905310101-HQHK and 440405201909200101-HQHK both issued by Zhuhai Hengqin New District Management Committee – Construction and Environmental Bureau dated 11 March 2020, piling work of portion of the property is permitted to be commenced. 10. Pursuant to three Construction Work Commencing Permits Nos 440405201909120101-HQHK, 440405201909120102-HQHK and 440405202003200101-HQHK all issued by Zhuhai Hengqin New District Management Committee – Construction and Environmental Bureau dated 20 March 2020, construction works of portion of the property (school) with a total gross floor area of 57,693.19 sq m is permitted to be commenced. 11. Pursuant to the Construction Work Commencing Permit No 440405202003100101-HQHK issued by Zhuhai Hengqin New District Management Committee – Construction and Environmental Bureau dated 10 March 2020, construction works of a road of the property is permitted to be commenced. 12. As advised by the Company, the construction cost incurred (including professional fee) of the property was approximately RMB319,500,000 as at the date of valuation. Accordingly, we have taken into account the said cost in our valuation. In our opinion, the gross development value of the proposed developments of the property, assuming a total construction cost (including professional fee) of approximately RMB3,734,000,000 and it were complete as at the valuation date, was estimated approximately as RMB7,274,000,000.

– III-63 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

13. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following: (i) 創新方發展 legally owns the land use rights of the property; (ii) As mentioned in note (2) (ix), 50% of the total plot ratio gross floor area of the property is restricted for sale at the moment. 創新方發展 should hold such portion and has the right to lease such portion and to grant the lessee to sublease; (iii) The land use rights of the property is subject to a mortgage and the mortgage is valid and enforceable; (iv) After fulfilling relevant conditions for uplifting the sales restrictions as mentioned in note (13) (ii), 創新方發展 can sell, lease or transfer the property according to the relevant laws and regulations and subject to approval from the mortgagee; and (v) Except for the mortgage mentioned in note (13) (iii), the property is free from encumbrances.

– III-64 – APPENDIX III properTY VALUATION OF THE LAI FUNG GROUP

Group V — Property interest held by the Group in Hong Kong for owner occupation purpose

Market Value in existing state as at Property Description and tenure Particulars of occupancy 31 January 2020

27 20th Floor of May Tower II is a 26-storey centrally As advised, the property is HK$100,000,000 May Tower II air-conditioned apartment building currently owner-occupied. (HONG KONG and Car Parking surmounting a 3-storey carparking/ DOLLARS Space recreational podium completed in ONE HUNDRED No 57 on 1992. MILLION ONLY) Ground Floor of May Towers I The property comprises an apartment (100% interest and II unit within May Tower II with a gross attributable Nos 5 and 7 floor area of approximately 315.22 to the Group: May Road sq m (3,393 sq ft). The property also HK$100,000,000) Mid-Levels comprises a covered car parking space Hong Kong on Ground Floor.

35/2,480th shares The property is held from the of and in Inland Government under a Government Lot No 1772 and Lease and Conditions of Extension the Extension No 6018 for a term of 75 years thereto commencing from 8 April 1907 renewable for a further term of 75 years. The Government Rent payable for the whole lot and the Extension is HK$140,400 per annum.

Notes:

1. The registered owner of the property is South Hill Limited, a 100% owned subsidiary of the Company.

2. The property lies within an area zoned “Residential (Group B)” under Mid-Levels West Outline Zoning Plan No S/H11/15 as at the date of valuation.

3. The property was subject to the following encumbrances:

(i) Occupation Permit vide memorial no UB5225592 dated 12 March 1992.

(ii) Deed of Mutual Covenant and Management Agreement in favour of Kerry Real Estate Agency Limited “The Manager” vide memorial no UB5247138 dated 30 March 1992.

(iii) Permission Letter with plan (Re from District Lands Officer, Hong Kong West and South) vide memorial no 08042101880013 dated 19 March 2008.

– III-65 – APPENDIX IV General Information of LSD and the Offeror

1. reSPONSIBILITY STATEMENTS The issue of this Composite Document has been approved by the LSD Directors, who jointly and severally accept full responsibility for the accuracy of the information contained in this Composite Document (other than that relating to the Lai Fung Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this Composite Document (other than those expressed by the Lai Fung Group or the Lai Fung Directors) have been arrived at after due and careful consideration and there are no other facts not contained in this Composite Document the omission of which would make any statement in this Composite Document misleading. The issue of this Composite Document has been approved by the Offeror Directors, who jointly and severally accept full responsibility for the accuracy of the information contained in this Composite Document (other than that relating to the Lai Fung Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this Composite Document (other than those expressed by the Lai Fung Group or the Lai Fung Directors) have been arrived at after due and careful consideration and there are no other facts not contained in this Composite Document the omission of which would make any statement in this Composite Document misleading. 2. dISCLOSURES OF INTERESTS IN LAI FUNG’S SECURITIES For the purpose of paragraphs 2 and 3 in this Appendix IV to this Composite Document, “interested” has the same meaning as ascribed to that term in Part XV of the SFO. As at the Latest Practicable Date, save as disclosed in section 10 “Shareholding structure of Lai Fung” and section 15 “Dealings and Interests in LF Shares and Derivatives of Lai Fung and Other Arrangement” in the “Letter from HSBC” in this Composite Document: (a) the Offeror did not own any LF Shares, LF Options or convertible securities, warrants, options or derivatives in respect of LF Shares; (b) no Offeror Director was interested in any LF Shares, LF Options or convertible securities, warrants, options or derivatives in respect of LF Shares; and (c) no Offeror Concert Party owned or controlled any LF Shares, LF Options or convertible securities, warrants, options or derivatives in respect of LF Shares. 3. deaLINGS IN LAI FUNG’S SECURITIES During the Relevant Period, none of the Offeror, the Offeror Directors or the Offeror Concert Parties had dealt for value in any LF Shares, LF Options or convertible securities, warrants, options or derivatives in respect of LF Shares. For the avoidance of doubt, the allotment of 3,307,061 LF Shares to eSun Group and 343 LF Shares to Transtrend on 13 February 2020 pursuant to the scrip dividend scheme of Lai Fung (approved by the LF Shareholders at the annual general meeting of Lai Fung on 20 December 2019) in respect of the 2019 final dividend of Lai Fung for the financial year ended 31 July 2019 is not regarded as “dealing for value” for the purposes of the Takeovers Code.

– IV-1 – APPENDIX IV General Information of LSD and the Offeror

4. arranGEMENTS IN CONNECTION WITH THE LF OFFERS

As at the Latest Practicable Date,

(a) none of the Lai Fung Directors had been given any benefit as compensation for loss of office or otherwise in connection with the LF Offers;

(b) no agreement, arrangement or understanding (including any compensation arrangement) existed between the Offeror or any Offeror Concert Parties and any of the Lai Fung Directors or recent Lai Fung Directors, LF Shareholders or recent LF Shareholders having any connection with or was dependent upon the outcome of the LF Offers;

(c) no arrangement of the kind referred to in Note 8 to Rule 22 of the Takeovers Code had been entered into between the Offeror or any Offeror Concert Parties and any other person;

(d) no person who owned or controlled LF Shares, LF Options or convertible securities, warrants, options or derivatives in respect of LF Shares had irrevocably committed themselves to accept or reject the LF Offers;

(e) there were no LF Shares, LF Options or convertible securities, warrants, options or derivatives in respect of LF Shares which the Offeror or any Offeror Concert Parties had borrowed or lent, save for borrowed securities (if any) which have been either on-lent or sold;

(f) there was no agreement or arrangement to which the Offeror was a party which related to the circumstances in which it might or might not invoke or seek to invoke a condition to the LF Offers;

(g) the Offeror had no intention to transfer, charge or pledge any LF Shares acquired pursuant to the LF Offers to any other persons and had no agreement, arrangement or understanding with any third party to do so; and

(h) there was no understanding, arrangement or agreement which had been determined to constitute a special deal (as defined under Rule 25 of the Takeovers Code) between any LF Shareholders on the one hand, and the Offeror and the Offeror Concert Parties on the other hand.

– IV-2 – APPENDIX IV General Information of LSD and the Offeror

5. MISCELLANEOUS

(a) The Offeror is a company incorporated in the British Virgin Islands with limited liability and is a wholly-owned subsidiary of LSD. The address of the Offeror is 11th Floor, Lai Sun Commercial Centre, 680 Cheung Sha Wan Road, Kowloon, Hong Kong.

(b) The Offeror Board comprises four directors, namely Dr. Lam Kin Ngok, Peter and Messrs. Chew Fook Aun, Lau Shu Yan, Julius and Lam Hau Yin, Lester.

(c) LSD is a company incorporated in Hong Kong with limited liability. The address of the registered office of LSD is 11th Floor, Lai Sun Commercial Centre, 680 Cheung Sha Wan Road, Kowloon, Hong Kong.

(d) The LSD Board comprises five executive directors, namely Dr. Lam Kin Ngok, Peter (Chairman) and Messrs. Chew Fook Aun (Deputy Chairman), Lau Shu Yan, Julius (Chief Executive Officer), Lam Hau Yin, Lester and Tham Seng Yum, Ronald; two non-executive directors, namely Dr. Lam Kin Ming and Madam U Po Chu; and four independent non-executive directors, namely Messrs. Lam Bing Kwan, Leung Shu Yin, William, Ip Shu Kwan, Stephen and Leung Wang Ching, Clarence.

(e) The registered office of HSBC is situated at 1 Queen’s Road Central, Hong Kong.

– IV-3 – APPENDIX V General Information of LAI FUNG

1. reSPONSIBILITY STATEMENT

This Composite Document includes particulars given in compliance with the Takeovers Code for the purpose of giving information with regard to the Lai Fung Group.

The information contained in this Composite Document relating to the Lai Fung Group has been supplied by Lai Fung. The Lai Fung Directors jointly and severally accept full responsibility for the accuracy of the information contained in this Composite Document relating to the Lai Fung Group and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this Composite Document by the Lai Fung Group or Lai Fung Directors have been arrived at after due and careful consideration and there are no other facts not contained in this Composite Document the omission of which would make any statement in this Composite Document relating to the Lai Fung Group misleading.

2. SHARE CAPITAL OF LAI FUNG

As at the Latest Practicable Date:

(a) the authorised share capital of Lai Fung was HK$2,000,000,000 divided into 400,000,000 LF Shares;

(b) the issued share capital of Lai Fung was approximately HK$1,655,167,215 divided into 331,033,443 LF Shares;

(c) a total of 3,646,478 LF Shares had been issued since 31 July 2019, being the end of the last financial year of Lai Fung;

(d) all of the LF Shares ranked pari passu in all respects as regards rights to capital, dividends and voting;

(e) there were 11,124,526 LF Options. As set out in the table setting out the exercise price applicable to each LF Option in the section headed “The LF Option Offer and the LF Option Offer Price” in the “Letter from HSBC” in this Composite Document, if any LF Option is vested and is exercised in accordance with the terms of the relevant Share Option Scheme prior to the LF Share Offer Closing Date, any LF Shares issued as a result of the exercise of such LF Options prior to the LF Share Offer Closing Date will be subject to and eligible to participate in the LF Share Offer.

– V-1 – APPENDIX V General Information of LAI FUNG

(f) other than the LF Options, there are no other options, derivatives, warrants or other securities convertible or exchangeable into LF Shares which were issued by LSD, the Offeror or Lai Fung.

3. marKET PRICES

The table below sets out the closing price of the LF Shares on the Stock Exchange on (i) the last Business Day of each of the calendar months during the Relevant Period; (ii) the Last Trading Date; and (iii) the Latest Practicable Date:

Closing price Date for each LF Share (HK$)

2019 30 August 7.02 30 September 7.36 31 October 9.12 29 November 10.2 31 December 10.0

2020 31 January 8.80 21 February (Last Trading Date) 9.73 28 February 9.49 31 March 8.80 21 April (Latest Practicable Date) 8.30

During the Relevant Period, the highest closing price of LF Shares as quoted on the Stock Exchange was HK$10.50 per LF Share on 11 February 2020 and the lowest closing price of LF Shares as quoted on the Stock Exchange was HK$6.48 per LF Share on 11 September 2019 and 12 September 2019.

– V-2 – APPENDIX V General Information of LAI FUNG

4. dISCLOSURES OF INTERESTS

For the purpose of this paragraph, “interested” and “interests” have the same meanings as ascribed to those terms in Part XV of the SFO.

(i) Interests and short positions in the securities of Lai Fung and its associated corporations of the directors and chief executive of Lai Fung

As at the Latest Practicable Date, the interests or short positions of the directors and the chief executives of Lai Fung in the shares, underlying shares and debentures of Lai Fung and its associated corporations (within the meaning of Part XV of the SFO) which were required (a) to be notified to Lai Fung 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); (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules, to be notified to Lai Fung and the Stock Exchange, were as follows:

(A) Lai Fung

Long positions in LF Shares and underlying LF Shares

Number of Number of underlying approximate LF Shares LF Shares percentage of

Name of director or P personal corporate personal total issued chief executive of Lai Fung capacity interests interests interests Total LF Shares (Note 1) (Note 2)

Mr. FA Chew Beneficial owner/ Nil 709,591 900,000 1,609,591 0.49% Owner of controlled (Note 3) corporation

Mr. Lester Lam Beneficial owner Nil Nil 3,219,182 3,219,182 0.97%

Mr. Cheng Shin How Beneficial owner Nil Nil 643,836 643,836 0.19%

Mr. Lee Tze Yan, Ernest Beneficial owner Nil Nil 640,000 640,000 0.19%

Mr. Ronald Tham Beneficial owner Nil Nil 500,000 500,000 0.15%

– V-3 – APPENDIX V General Information of LAI FUNG

Notes:

1. These interests in underlying LF Shares represented interests in share options granted to the Lai Fung Directors under the Share Option Schemes, particulars of which are as follows:

Number of underlying LF Shares comprised in Exercise price Name of director Date of grant LF Options Option period per LF Share (HK$)

Mr. FA Chew 12/06/2012 900,000 12/06/2012- 6.65 11/06/2020

Mr. Lester Lam 18/01/2013 3,219,182 18/01/2013- 11.40 17/01/2023

Mr. Cheng Shin How 18/01/2013 643,836 18/01/2013- 11.40 17/01/2023

Mr. Lee Tze Yan, Ernest 18/01/2013 640,000 18/01/2013- 11.40 17/01/2023

Mr. Ronald Tham 19/08/2019 500,000 19/08/2019- 6.784 18/08/2029

2. The percentage has been compiled based on the total number of issued LF Shares as at the Latest Practicable Date (i.e. 331,033,443 LF Shares).

3. These LF Shares were held by The Orchid Growers Association Limited, the entire issued share capital of which was beneficially owned by Mr. FA Chew.

(B) Long positions in shares of associated corporation

(i) eSun

Long positions in eSun Shares

approximate Number of percentage of Name of eSun Shares total issued

director capacity personal interests eSun Shares (Note)

Mr. Lester Lam Beneficial owner 2,794,443 0.19%

Note: The percentage has been compiled based on the total number of issued eSun Shares as at the Latest Practicable Date (i.e. 1,491,854,598 eSun Shares).

– V-4 – APPENDIX V General Information of LAI FUNG

(ii) LSD

Long positions in LSD Shares and underlying LSD Shares

Number of Number of underlying approximate LSD Shares LSD Shares percentage of

Name of P personal corporate personal total issued director capacity interests interests interests Total LSD Shares (Note 1) (Note 2)

Mr. FA Chew Beneficial owner/ Nil 400,000 3,773,081 4,173,081 0.68% Owner of controlled (Note 3) corporation

Mr. Lester Lam Beneficial owner Nil Nil 4,173,081 4,173,081 0.68%

Mr. Lee Tze Yan, Beneficial owner Nil Nil 832,000 832,000 0.14% Ernest

Mr. Ronald Tham Beneficial owner Nil Nil 800,000 800,000 0.13%

Madam U Beneficial owner 26,919 Nil Nil 26,919 0.01%

Notes:

1. These interests in underlying LSD Shares represented interests in share options granted to the Lai Fung Directors under the share option schemes of LSD, particulars of which are as follows:

Number of underlying LSD Shares Exercise comprised in Option price per Name of director Date of grant share options period LSD Share (HK$)

Mr. FA Chew 05/06/2012 3,773,081 05/06/2012- 5.35 04/06/2022

Mr. Lester Lam 18/01/2013 4,173,081 18/01/2013- 16.10 17/01/2023

Mr. Lee Tze Yan, Ernest 18/01/2013 832,000 18/01/2013- 16.10 17/01/2023

Mr. Ronald Tham 19/08/2019 800,000 19/08/2019- 9.92 18/08/2029

– V-5 – APPENDIX V General Information of LAI FUNG

2. The percentage has been compiled based on the total number of issued LSD Shares as at the Latest Practicable Date (i.e. 610,268,025 LSD Shares).

3. These LSD Shares were held by The Orchid Growers Association Limited, the entire issued share capital of which was beneficially owned by Mr. FA Chew.

(iii) LSG

Long positions in LSG Shares and underlying LSG Shares

Number of underlying Number of LSG approximate LSG Shares Shares percentage of

Name of P personal corporate personal total issued director capacity interests interests interests Total LSG Shares (Note 1) (Note 2)

Mr. FA Chew Beneficial owner/ Nil 202,422 3,819,204 4,021,626 1.04% Owner of (Note 3) controlled corporation

Dr. Lam Kin Ming Beneficial owner 1,021,443 Nil Nil 1,021,443 0.26%

Mr. Lester Lam Beneficial owner 12,459,208 Nil 7,571,626 20,030,834 5.16%

Madam U Beneficial owner 825,525 Nil Nil 825,525 0.21%

Notes:

1. These interests in underlying LSG Shares represented interests in share options granted to the Lai Fung Directors under the share option schemes of LSG, particulars of which are as follows:

Number of underlying LSG Shares Exercise comprised in price per Name of director Date of grant share options Option period LSG Share (HK$)

Mr. FA Chew 19/06/2017 3,819,204 19/06/2017- 15.00 18/06/2027

Mr. Lester Lam 18/01/2013 3,752,422 18/01/2013- 6.05 17/01/2023

Mr. Lester Lam 19/06/2017 3,819,204 19/06/2017- 15.00 18/06/2027

– V-6 – APPENDIX V General Information of LAI FUNG

2. The percentage has been compiled based on the total number of issued LSG Shares as at the Latest Practicable Date (i.e. 388,482,959 LSG Shares).

3. These LSG Shares were held by The Orchid Growers Association Limited, the entire issued share capital of which was beneficially owned by Mr. FA Chew.

(iv) LSD Bonds (2017) Limited

Long position in the 4.6% guaranteed notes due 2022

Name of N nature of director Capacity interests principal amount

Mr. Mak Wing Beneficial Personal US$200,000 Sum, Alvin owner (Note)

Note: These notes were jointly held by Mr. Mak Wing Sum, Alvin and his spouse.

(ii) Interests of substantial shareholders of Lai Fung

As at the Latest Practicable Date, so far as it is known by or otherwise notified by any director or the chief executive of Lai Fung, the particulars of the corporations or individuals who had 5% or more interests in the following long positions in the shares and underlying shares of Lai Fung as recorded in the register required to be kept by Lai Fung pursuant to Section 336 of the SFO or were entitled to exercise, or control the exercise of, 10% or more of the voting power at any general meeting of Lai Fung (i.e. within the meaning of substantial shareholders of the Listing Rules) were as follows:

– V-7 – APPENDIX V General Information of LAI FUNG

(A) Long position in the LF Shares

Approximate percentage of Nature of number of total issued Name Capacity interests LF Shares LF Shares (Note 1)

Substantial Shareholders

eSun Owner of controlled Corporate 168,792,467 50.99% corporations (Note 2)

LSD Owner of controlled Corporate 168,809,977 50.99% corporations (Note 3)

LSG Owner of controlled Corporate 168,809,977 50.99% corporations (Note 3)

Dr. Peter Lam Owner of controlled Corporate 168,809,977 50.99% corporations (Note 4)

Merit Worth Limited (“MWL”) Beneficial owner and Corporate 168,792,467 50.99% owner of controlled (Note 5) corporation

Silver Glory Securities Limited (“SGS”) Beneficial owner Corporate 79,335,144 23.97% (Note 5)

CapitaLand China Holdings Pte Ltd Owner of controlled Corporate 64,400,000 19.45% (“CapitaLand China”) corporation (Note 6)

CapitaLand China Investments Limited Owner of controlled Corporate 64,400,000 19.45% (“CapitaLand Investments”) corporations (Note 6)

CapitaLand LF (Cayman) Holdings Beneficial owner Corporate 64,400,000 19.45% Co., Ltd. (“CapitaLand Cayman”)

CapitaLand Limited Owner of controlled Corporate 64,400,000 19.45% corporations (Note 6)

Temasek Holdings (Private) Limited Owner of controlled Corporate 64,400,000 19.45% (“Temasek”) corporations (Note 6)

Yu Cheuk Yi Beneficial owner Personal 34,729,037 10.49% (Note 7)

Yu Siu Yuk Beneficial owner Personal 34,729,037 10.49% (Note 7)

Other Person

Moerus Capital Management LLC Investment manager Corporate 26,189,425 7.91% (Note 8)

– V-8 – APPENDIX V General Information of LAI FUNG

Notes:

1. The percentage has been compiled based on the total number of issued LF Shares as at the Latest Practicable Date (i.e. 331,033,443 LF Shares).

2. These interests in Lai Fung represented all the LF Shares beneficially owned by MWL (89,457,323 LF Shares or approximately 27.02% of the total issued LF Shares) and SGS (79,335,144 LF Shares or approximately 23.97% of the total issued LF Shares), both being wholly-owned subsidiaries of eSun.

3. As at the Latest Practicable Date, LSG owned approximately 56.30% shareholding interests in LSD while LSD owned approximately 74.62% shareholding interests in eSun. As such, LSG and LSD were both deemed to be interested in the same 168,792,467 LF Shares in which eSun had interests.

Transtrend Holdings Limited (“Transtrend”, a wholly-owned subsidiary of LSD) owned 17,510 LF Shares. LSG and LSD were both deemed to be interested in the same 17,510 LF Shares owned by Transtrend.

4. As at the Latest Practicable Date, Dr. Peter Lam was deemed to be interested in 168,792,467 LF Shares held by eSun and 17,510 LF Shares held by Transtrend in the issued share capital of Lai Fung by virtue of his personal and deemed interests in approximately 42.10% (excluding share option) of the issued share capital of LSG, which in turn owned approximately 56.30% shareholding interests in LSD while LSD owned approximately 74.62% shareholding interests in eSun which in turn owned approximately 50.99% shareholding interests in Lai Fung.

5. As at the Latest Practicable Date, SGS was wholly owned by MWL which in turn was wholly owned by eSun. Therefore, MWL was deemed to be interested in the 79,335,144 LF Shares held by SGS and eSun was deemed to be interested in the 168,792,467 LF Shares held and deemed to be held by MWL.

6. These interests in Lai Fung represented the LF Shares beneficially owned by CapitaLand Cayman which was wholly owned by CapitaLand China which in turn was wholly owned by CapitaLand Investments while CapitaLand Investments was wholly owned by CapitaLand Limited, as at the Latest Practicable Date. Temasek was deemed to be interested in the same 64,400,000 LF Shares held by CapitaLand Cayman by virtue of its more than 50% indirect interest in the issued share capital of CapitaLand Limited.

7. On the basis of the Yu Shareholders’ latest disclosures of interests in Lai Fung, the Yu Shareholders held an aggregate of 34,729,037 LF Shares, representing approximately 10.49% of the total issued LF Shares.

8. Based on the latest disclosure of interests notices published on the website of the Stock Exchange, Moerus Capital Management LLC held 26,189,425 LF Shares in the capacity of investment manager.

– V-9 – APPENDIX V General Information of LAI FUNG

(B) Long positions in the underlying LF Shares

Approximate Number of percentage underlying of total issued Name Capacity LF Shares LF Shares (Note 1)

Dr. Peter Lam Beneficial Owner 321,918 0.10% (Note 2)

Notes:

1. The percentage has been compiled based on the total number of issued LF Shares as at the Latest Practicable Date (i.e. 331,033,443 LF Shares).

2. The interests in underlying LF Shares represented interests in a share option granted to Dr. Peter Lam under the Share Option Scheme adopted by Lai Fung on 18 December 2012.

Confirmations

Except as disclosed in this section headed “Disclosures of Interests” in this Appendix V, as at the Latest Practicable Date:

(a) neither Lai Fung nor any of the Lai Fung Directors was interested in the shares of the Offeror or any convertible securities, warrants, options or derivatives in respect of the shares of the Offeror;

(b) none of the Lai Fung Directors was interested in any LF Shares or any convertible securities, warrants, options or derivatives in respect of LF Shares;

(c) no subsidiary of Lai Fung, or any pension fund of Lai Fung or of any other member of the Lai Fung Group or any person who is presumed to be acting in concert with Lai Fung by virtue of class (5) of the definition of “acting in concert” under the Takeovers Code or who was an associate of Lai Fung by virtue of class (2) of the definition of “associate” under the Takeovers Code (excluding exempt principal traders and exempt fund managers) owned or controlled any LF Shares or any convertible securities, warrants, options or derivatives in respect of LF Shares;

(d) neither Lai Fung nor any person who is presumed to be acting in concert with Lai Fung by virtue of classes (1), (2), (3) and (5) of the definition of “acting in concert” under the Takeovers Code or who was an associate of Lai Fung by virtue of classes (2), (3) and (4) of the definition of “associate” under the Takeovers Code had an arrangement of the kind referred to in Note 8 to Rule 22 of the Takeovers Code with any person;

– V-10 – APPENDIX V General Information of LAI FUNG

(e) none of the non-exempt discretionary fund managers and principal traders connected with Lai Fung owned or controlled any LF Shares or any convertible securities, warrants, options or derivatives in respect of LF Shares;

(f) none of the Lai Fung Directors had expressed an intention, in respect of their own beneficial shareholdings in Lai Fung, to accept or reject the LF Offers;

(g) neither Lai Fung nor any of the Lai Fung Directors had borrowed or lent any LF Shares or any convertible securities, warrants, options or derivatives in respect of LF Shares;

(h) save as disclosed in the paragraph headed “4. Disclosures of Interests — (i) Interests and short positions in the securities of Lai Fung and its associated corporations of the directors and chief executive of Lai Fung” above, none of the Lai Fung Directors held any beneficial shareholdings in Lai Fung which would otherwise entitle them to accept or reject the LF Share Offer or the LF Option Offer; and

(i) there was no understanding, arrangement or agreement which had been determined to constitute a special deal (as defined under Rule 25 of the Takeovers Code) between any LF Shareholders on the one hand, and Lai Fung, its subsidiaries or associated companies on the other hand.

5. deaLINGS IN SHARES OF THE OFFEROR, LF SHARES AND LF OPTIONS

During the Relevant Period:

(a) neither Lai Fung nor any Lai Fung Director had dealt for value in any shares of the Offeror or any convertible securities, warrants, options or derivatives in respect of the shares of the Offeror; and

(b) none of the Lai Fung Directors had dealt for value in any LF Shares or any convertible securities, warrants, options or derivatives in respect of LF Shares.

During the LF Offer Period and up to the Latest Practicable Date:

(a) no subsidiary of Lai Fung, or any pension fund of Lai Fung or of any other member of the Lai Fung Group or any person who was presumed to be acting in concert with Lai Fung by virtue of class (5) of the definition of “acting in concert” under the Takeovers Code or who was an associate of Lai Fung by virtue of class (2) of the definition of “associate” under the Takeovers Code (excluding exempt principal traders and exempt fund managers) had dealt for value in any LF Shares or any convertible securities, warrants, options or derivatives in respect of LF Shares; and

(b) none of the non-exempt discretionary fund managers and principal traders connected with Lai Fung had dealt for value in any LF Shares or any convertible securities, warrants, options or derivatives in respect of LF Shares.

– V-11 – APPENDIX V General Information of LAI FUNG

6. LAI FUNG DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Lai Fung Directors had any existing or proposed service contract with Lai Fung or any of its subsidiaries or associated companies which (i) (including both continuous and fixed term contracts) had been entered into or amended within 6 months before the date of the commencement of the LF Offer Period; or (ii) was a continuous contract with a notice period of 12 months or more; or (iii) was a fixed term contract with more than 12 months to run irrespective of the notice period; or (iv) was not determinable by the employer within one year without payment of compensation (other than statutory compensation).

7. maTERIAL LITIGATION

As at the Latest Practicable Date, none of the members of the Lai Fung Group were engaged in any litigation, arbitration or claim of material importance, and no litigation, arbitration or claim of material importance is known to the Lai Fung Directors to be pending or threatened by or against any member of the Lai Fung Group.

8. maTERIAL CONTRACTS

The following material contracts (not being contracts entered into in the ordinary course of business) had been entered into by the Lai Fung Group after the date of two years before the Announcement Date and up to and including the Latest Practicable Date:

(a) the state-owned construction land use rights grant contract dated 29 December 2018 (國有建設用地使用權出讓合同) (“Land Use Rights Grant Contract”) in respect of two parcels of land located at east side of Yiwener Road, south side of Xiangjiang Road, west side of Yiwenyi Road and north side of Zhishui Road, Hengqin New Area, Zhuhai City, Guangdong Province of the PRC (中國廣東省珠海市橫琴新區藝文二道東側、香江路南側、藝文一道西側、智水路北側) with a total site area of 143,768.37 square metres and a maximum plot ratio of 2 times (“Land”) entered into between The Land and Resources Bureau of Zhuhai (“Zhuhai Land Bureau”) and Supreme Motion Limited (卓動有限公司) (“Supreme Motion”, an indirect wholly-owned subsidiary of Lai Fung) at a land use right transfer price of approximately RMB762 million;

(b) an agreement dated 31 December 2018 made among Rosy Commerce Holdings Limited (業佳控股有限公司) (“Rosy Commerce”, an indirect non-wholly-owned subsidiary of Lai Fung), China Cinda (HK) Asset Management Co., Limited (中國信達(香港)資產管理有限公司) (“Investor”, an indirect wholly-owned subsidiary of China Cinda Asset Management Co., Ltd. (中國信達資產管理股份有限公司), a joint stock company incorporated in the PRC and whose shares and preference shares are listed on the Main Board of the Stock Exchange (Stock Code: 1359; Preference Shares Stock Code:

– V-12 – APPENDIX V General Information of LAI FUNG

4607)) and Glorious Stand Limited (榮立有限公司) (“Glorious Stand”, an indirect non-wholly-owned subsidiary of Lai Fung), in relation to the sale and purchase and subscription of shares in Glorious Stand (“Glorious Stand Investment Agreement”) whereby:

(1) Rosy Commerce agreed to subscribe for nine new shares in Glorious Stand at the aggregate subscription price of US$9;

(2) the Investor agreed to acquire three shares in Glorious Stand from Rosy Commerce at the USD equivalent of approximately RMB7 million;

(3) the Investor agreed to subscribe for 27 new shares in Glorious Stand at the aggregate subscription price of the USD equivalent of approximately RMB50 million; and

(4) Rosy Commerce agreed to subscribe for 63 new shares in Glorious Stand at the aggregate subscription price of US$63;

(c) an agreement dated 31 December 2018 made among Rosy Commerce, the Investor and Harmonic Run Limited (和運有限公司) (“Harmonic Run”, an indirect non-wholly- owned subsidiary of Lai Fung) in relation to the subscription of shares in Harmonic Run (“Harmonic Run Investment Agreement”) whereby:

(1) the Investor agreed to subscribe for 30 new shares in Harmonic Run at the aggregate subscription price of the USD equivalent of RMB186 million; and

(2) Rosy Commerce agreed to subscribe for 69 new shares in Harmonic Run at the aggregate subscription price of the USD equivalent of approximately RMB314 million;

(d) a shareholders’ agreement dated 25 January 2019 entered into among Rosy Commerce, the Investor, Glorious Stand, Lai Fung and eSun in relation to Glorious Stand upon completion of the Glorious Stand Investment Agreement;

(e) a shareholders’ agreement dated 25 January 2019 entered into among Rosy Commerce, the Investor, Harmonic Run, Lai Fung and eSun in relation to Harmonic Run upon completion of the Harmonic Run Investment Agreement;

(f) an amendment contract to the Land Use Rights Grant Contract dated 31 January 2019 for the change of the grantee of the land use rights of the Land from Supreme Motion to 珠海橫琴麗新創新方發展有限公司 (“Project Company”, a company established as a wholly-foreign-owned enterprise in the PRC and a direct wholly-owned subsidiary of Supreme Motion) entered into among Project Company, Supreme Motion and Zhuhai Land Bureau;

– V-13 – APPENDIX V General Information of LAI FUNG

(g) the 2019 supplemental deed dated 8 March 2019 executed by Lai Fung in favour of LSG, LSD, the late Mr. Lim Por Yen, Dr. Lam Kin Ming and Dr. Peter Lam in relation to certain amendments to certain undertakings in the spin-off agreement entered into between LSD and Lai Fung, the deed of undertaking executed by LSD in favour of Lai Fung and the non-compete agreement entered into between LSG, Lai Fung, Dr. Peter Lam, Dr. Lam Kin Ming and the late Mr. Lim Por Yen; and

(h) Laisun Creative Culture Subscription Agreement.

9. quaLIFICATION OF EXPERTS

The following are the qualifications of each of the experts who have been named in this Composite Document or who have given their opinion or advice, which is contained in this Composite Document:

Name Qualification

HSBC a registered institution under the SFO, registered to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 5 (advising on futures contracts), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO and a licensed bank under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong)

Altus Capital a corporation licensed to carry out Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO

Knight Frank chartered surveyors and valuers

10. CONSENTS

Each of the experts named in the section headed “Qualifications of Experts” above has given and has not withdrawn its written consent to the issue of this Composite Document with the inclusion therein of the opinions, reports and/or letters and/or the references to its name and/or opinions, reports and/or letters in the form and context in which they respectively appear.

– V-14 – APPENDIX V General Information of LAI FUNG

11. MISCELLANEOUS

(a) As at the Latest Practicable Date, none of the existing Lai Fung Directors had been given any benefit as compensation for loss of office or otherwise in connection with the LF Offers.

(b) As at the Latest Practicable Date, there was no agreement or arrangement between any Lai Fung Director and any other person which was conditional on or dependent upon the outcome of the LF Offers or otherwise connected with the LF Offers.

(c) As at the Latest Practicable Date, except as disclosed in item (g) in the section headed “Material Contracts” above, there was no material contract entered into by the Offeror or LSD in which any of the Lai Fung Directors has a material personal interest.

(d) The registered office of Lai Fung is P.O. Box 309, Ugland House, Grand Cayman, KY1- 1104, Cayman Islands. The head office and principal place of business of Lai Fung in Hong Kong is 11th Floor, Lai Sun Commercial Centre, 680 Cheung Sha Wan Road, Kowloon, Hong Kong.

(e) The principal share registrar of Lai Fung is SMP Partners (Cayman) Limited, Royal Bank House — 3rd Floor, 24 Shedden Road, P.O. Box 1586, Grand Cayman, KY1- 1110, Cayman Islands.

(f) The Hong Kong branch share registrar and transfer office of Lai Fung is Tricor Tengis Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

(g) As at the Latest Practicable Date, the Lai Fung Board comprised (a) eight executive directors, namely Mr. FA Chew (Chairman), Dr. Lam Kin Ming (Deputy Chairman), Mr. Lam Kin Hong, Matthew (Executive Deputy Chairman), Mr. Lester Lam (Chief Executive Officer), Mr. Cheng Shin How, Mr. Lee Tze Yan, Ernest, Mr. Ronald Tham and Madam U, (b) two non-executive directors, namely, Mr. Lucas Ignatius Loh Jen Yuh and Mr. Puah Tze Shyang (also alternate to Mr. Lucas Ignatius Loh Jen Yuh), and (c) five independent non-executive directors, namely Mr. Ku Moon Lun, Mr. Lam Bing Kwan, Mr. Law Kin Ho, Mr. Mak Wing Sum, Alvin and Mr. Shek Lai Him, Abraham.

(h) The company secretary of Lai Fung is Ms. Yim Lai Wa, who is an associate member of The Hong Kong Institute of Chartered Secretaries and The Chartered Governance Institute (formerly known as The Institute of Chartered Secretaries and Administrators) in the United Kingdom.

(i) The principal place of business of Altus Capital is 21 Wing Wo Street, Central, Hong Kong.

– V-15 – APPENDIX V General Information of LAI FUNG

12. documenTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection (i) at the office of Lai Fung located at 11th Floor, Lai Sun Commercial Centre, 680 Cheung Sha Wan Road, Kowloon, Hong Kong during the business hours (i.e. from 9:30 a.m. to 12:30 p.m. and from 2:30 p.m. to 5:30 p.m.) on any weekday (Saturdays and public holidays excepted) unless (a) a tropical cyclone warning signal number 8 or above is hoisted; or (b) a black rainstorm warning signal is issued, (ii) on the website of Lai Fung at www.laifung.com and (iii) the website of the SFC at www.sfc.hk from 24 April 2020 until the earlier of: (1) the LF Share Offer Closing Date; and (2) the date on which the LF Offers are withdrawn or lapse, whichever is the earliest:

(a) the memorandum and articles of association of the Offeror;

(b) the amended and restated memorandum and articles of association of Lai Fung;

(d) the annual report of Lai Fung for the year ended 31 July 2019;

(e) the interim report of Lai Fung for the six months ended 31 January 2020;

(f) the “Letter from HSBC”, the text of which is set out on pages 12 to 41 of this Composite Document;

(g) the LF Option Offer Letter, the text of which is set out on pages VI-1 to VI-6 of this Composite Document;

(h) the “Letter from the Lai Fung Board”, the text of which is set out on pages 42 to 48 of this Composite Document;

(i) the “Letter from the Lai Fung Independent Board Committee”, the text of which is set out on pages 49 and 50 of this Composite Document;

(j) the “Letter from the Lai Fung Independent Financial Adviser”, the text of which is set out on pages 51 to 75 of this Composite Document;

(k) the written consents referred to in the section headed “Consents” in this Appendix V to this Composite Document;

(l) the material contracts referred to in the section headed “Material Contracts” in this Appendix V to this Composite Document; and

(m) the property valuation report of the Lai Fung Group (including the valuation certificates) prepared by Knight Frank, which is set out in “Appendix III — Property Valuation of the Lai Fung Group” to this Composite Document.

– V-16 – APPENDIX VI Form of LF Option Offer Letter

The following is the form of the Lai Fung Option Offer Letter being sent to the Lai Fung Optionholders in connection with the Lai Fung Option Offer.

24 April 2020

To the LF Optionholders

Dear Sir or Madam,

OPTION OFFER

IN RELATION TO THE CONDITIONAL VOLUNTARY GENERAL CASH OFFERS BY THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED ON BEHALF OF THE OFFEROR, A WHOLLY-OWNED SUBSIDIARY OF LAI SUN DEVELOPMENT COMPANY LIMITED, TO ACQUIRE ALL OF THE ISSUED SHARES OF LAI FUNG HOLDINGS LIMITED (OTHER THAN THOSE ALREADY OWNED OR AGREED TO BE ACQUIRED BY LAI SUN DEVELOPMENT COMPANY LIMITED, THE OFFEROR OR THE OTHER WHOLLY-OWNED SUBSIDIARIES OF LAI SUN DEVELOPMENT COMPANY LIMITED) AND TO CANCEL ALL THE OUTSTANDING SHARE OPTIONS OF LAI FUNG HOLDINGS LIMITED

A composite offer and response document dated the same date as this letter jointly issued by Lai Sun Development Company Limited (“LSD”), Holy Unicorn Limited (the “Offeror”) and Lai Fung Holdings Limited (“Lai Fung”) (the “Composite Document”) is enclosed with this letter. Terms used but not defined in this letter shall have the same meanings and construction as in the Composite Document. This letter should be read in conjunction with the Composite Document and the PINK Form of LF Option Offer Acceptance.

LSG, LSD, the Offeror, eSun and Lai Fung issued a joint announcement dated 21 February 2020 (the “Joint Announcement”) which stated that, among others, HSBC, on behalf of the Offeror, a wholly owned subsidiary of LSD, intended to make a conditional voluntary cash offer to acquire all of the LF Offer Shares. As stated in the Joint Announcement, as part of the LF Offers, the Offeror would make an appropriate offer, namely the LF Option Offer, to the LF Optionholders for the cancellation of all outstanding LF Options in accordance with Rule 13 of the Takeovers Code. The LF Option Offer is subject to and conditional upon the LF Share Offer becoming or being declared unconditional in all respects.

– VI-1 – APPENDIX VI Form of LF Option Offer Letter

This letter explains the actions you may take in relation to your outstanding LF Options. You are advised to refer to the Composite Document and the PINK Form of LF Option Offer Acceptance when considering them.

Your attention is also drawn to the terms and conditions of the Share Option Schemes.

TERMS OF THE LF OPTION OFFER

In accordance with Rule 13 of the Takeovers Code and on behalf of the Offeror, we are making the LF Option Offer to you at the LF Option Offer Price in cash for the cancellation of every LF Option, whether vested or unvested, pursuant to Rule 13 of the Takeovers Code.

The LF Option Offer Price represents the “see-through” price of the outstanding LF Options (being the LF Share Offer Price minus the exercise price of the relevant LF Option) for the cancellation of each LF Option, whether vested or unvested, provided that if the exercise price of any LF Option is equal to or greater than the LF Share Offer Price (such that the “see-through” price is zero or negative), the LF Option Offer Price is a nominal amount of HK$0.01 for every 100 LF Options (or, if lesser, any part thereof).

number of LF Options as at the LF Option LF Option Offer Price per Latest Practicable Date (each exercise price LF Share carrying the right to subscribe for exercise period of per LF Share (unless otherwise indicated) one new LF Share) the LF Options (HK$) (HK$) (dd/mm/yyyy)

6.650 2.340 900,000 12/06/2012 to 11/06/2020

6.784 2.206 500,000 19/08/2019 to 18/08/2029

8.000 0.990 180,000 16/01/2015 to 15/01/2025

9.500 0.01 for every 100 LF 220,000 26/07/2013 to Options (or, if lesser, 25/07/2023 any part thereof)

10.180 0.01 for every 100 LF 580,000 22/01/2019 to Options (or, if lesser, 21/01/2029 any part thereof)

11.400 0.01 for every 100 LF 8,294,526 18/01/2013 to Options (or, if lesser, 17/01/2023 any part thereof)

13.520 0.01 for every 100 LF 450,000 19/01/2018 to Options (or, if lesser, 18/01/2028 any part thereof)

– VI-2 – APPENDIX VI Form of LF Option Offer Letter

The LF Option Offer is subject to and conditional upon the LF Share Offer becoming or being declared unconditional in all respects. The Conditions are set out in section 6 “Conditions to the LF Offers” in the “Letter from HSBC” in the Composite Document.

All payments in respect of the LF Option Offer Price will be made by cheques in Hong Kong dollars (unless otherwise agreed between the Offeror and the relevant LF Optionholder(s)).

You are further advised to refer to section 13 “Overseas LF Shareholders and LF Optionholders” and section 20 “Taxation and independent advice” in the “Letter from HSBC” in the Composite Document, and section 4 “Nominee Registration” in “Appendix I — Further Terms of the LF Offers” to the Composite Document.

Your attention is drawn to the “Letter from the Lai Fung Independent Board Committee” to the Disinterested Shareholders and the LF Optionholders set out in the Composite Document and the “Letter from the Lai Fung Independent Financial Adviser” set out in the Composite Document, which contain the recommendations of the Lai Fung Independent Board Committee and of the Lai Fung Independent Financial Adviser, respectively, in relation to the LF Offers.

COURSES OF ACTION AVAILABLE TO THE LF OPTIONHOLDERS

In summary, the choices available to you in respect of your outstanding LF Options are:

(a) to the extent any of your outstanding LF Options (whether vested or unvested) is not exercised on or prior to the LF Share Offer Closing Date (being Friday, 22 May 2020 or such later date(s) as the Offeror may determine and announce), you may accept the LF Option Offer in accordance with its terms (as set out in the Composite Document and the PINK Form of LF Option Offer Acceptance) and receive the LF Option Offer Price if the LF Offers become or are declared unconditional in all respects, by allowing such unexercised outstanding LF Options to remain unexercised on or prior to the LF Share Offer Closing Date, and returning, duly completed and signed, the PINK Form of LF Option Offer Acceptance enclosed together with the relevant document(s) as soon as possible and in any event by no later than 4:00 p.m. (Hong Kong time) on the LF Share Offer Closing Date;

– VI-3 – APPENDIX VI Form of LF Option Offer Letter

(b) you may in accordance with the terms of the Share Option Schemes exercise all of your outstanding vested LF Options (to the extent not already exercised) or only some of them to the extent specified in your notice of exercise, by submitting a notice of exercise of LF Options to the company secretary of Lai Fung at any time after the date of this letter (being 24 April 2020) and up to the LF Share Offer Closing Date. Any LF Shares issued as a result of the exercise of such outstanding LF Options as mentioned above will be subject to and eligible to participate in the LF Share Offer. Please refer to the Composite Document for the details of the LF Share Offer in this regard; or

(c) do nothing, in which case, if the LF Offers become unconditional in all respects, your unexercised outstanding LF Options (whether vested or unvested) will remain valid and exercisable during their respective option periods in accordance with the terms of the relevant Share Option Scheme notwithstanding the LF Share Offer and you will not receive the LF Option Offer Price.

Each outstanding LF Option you hold is independent and you should make a separate decision for each one.

For further details, please refer to the remaining sections of this letter, the Composite Document, the PINK Form of LF Option Offer Acceptance and the terms and conditions of the Share Option Schemes.

LAPSED LF OPTIONS

Please note that nothing in this letter or the Composite Document serves to extend the life of an LF Option which lapses, will lapse, or has already lapsed under the terms of the Share Option Schemes. You cannot exercise or accept the LF Option Offer in respect of an LF Option once it lapses in accordance with its terms.

PROFESSIONAL ADVICE

The information provided in this letter is intended to give you factual details on which to base your decision as to the action you wish to take.

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

GENERAL

(a) All communications, notices, the PINK Form of LF Option Offer Acceptance, cheques, certificates and other documents of any nature, if delivered by or sent to or from you as an LF Optionholder or your designated agents by post, shall be posted at your own risk, and none of LSG, LSD, the Offeror, eSun, Lai Fung or HSBC and any of their respective directors, the Registrar and other parties involved in the LF Offers and any of their respective agents accepts any liability for any loss or delay in postage or any other liabilities that may arise as a result thereof.

– VI-4 – APPENDIX VI Form of LF Option Offer Letter

(b) The provisions set out in the Composite Document and the PINK Form of LF Option Offer Acceptance form part of the terms of the LF Option Offer.

(d) The due execution of a PINK Form of LF Option Offer Acceptance in respect of the LF Option Offer will constitute an authority to the Offeror, HSBC or such person(s) as any of them may direct (i) to complete on behalf of the accepting LF Optionholder the PINK Form of LF Option Offer Acceptance and any other document(s) and (ii) to do any other act that may be necessary or expedient for the purpose of cancelling all rights of the LF Optionholders in respect of the outstanding LF Options which are the subject of such acceptance.

(e) By completing the PINK Form of LF Option Offer Acceptance in respect of a particular outstanding LF Option, you irrevocably authorise the Offeror, HSBC and/or their respective agents to send a cheque for collection at the office of Lai Fung in Hong Kong specified in the Composite Document.

ACTIONS TO BE TAKEN FOR ACCEPTING THE LF OPTION OFFER

In order to accept the LF Option Offer, you must deliver the duly completed and signed PINK Form of LF Option Offer Acceptance together with the relevant certificate(s), document(s) of title or entitlement in respect of the LF Options, and/or any other document(s) (if applicable) evidencing the grant of the LF Options to you (and/or any satisfactory indemnity or indemnities required in respect thereof) for your holding of LF Options (or if applicable, for not less than the number of LF Options in respect of which you intend to accept the LF Option Offer), by post or by hand, to the company secretary of Lai Fung at 11th Floor, Lai Sun Commercial Centre, 680 Cheung Sha Wan Road, Kowloon, Hong Kong marked “Lai Fung Holdings Limited — LF Option Offer” on the envelope so as to reach the company secretary of Lai Fung as soon as possible but in any event by no later than 4:00 p.m. (Hong Kong time) on the first LF Share Offer Closing Date (or such later time(s) and/or date(s) as the Offeror may determine and announce in accordance with the Takeovers Code). If you do not return a duly completed and signed PINK Form of LF Option Offer Acceptance or exercise your LF Options, subject to and conditional upon the LF Offers becoming unconditional in all respects, your outstanding LF Options (whether vested or unvested) will remain valid and exercisable during their respective option periods in accordance with the terms of the relevant Share Option Scheme notwithstanding the LF Share Offer.

Before delivering the PINK Form of LF Option Offer Acceptance to the company secretary of Lai Fung, please ensure that you have signed the PINK Form of LF Option Offer Acceptance and that your signature has been witnessed.

Payment of the LF Option Offer Price is expected to be made within seven (7) Business Days following the later of (i) the date on which the LF Offers become or are declared unconditional in all respects; and (ii) the date of receipt of the duly completed PINK Form of LF Option Offer Acceptance and all relevant document(s) by the company secretary of Lai Fung to render such acceptance, surrender and cancellation under the LF Option Offer valid.

– VI-5 – APPENDIX VI Form of LF Option Offer Letter

No acknowledgment of receipt of any PINK Form of LF Option Offer Acceptance and/or LF Options relevant certificate(s) (if applicable) and/or any other document(s) evidencing the grant of the outstanding LF Options and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) will be given.

RESPONSIBILITY STATEMENTS

The directors of LSD jointly and severally accept full responsibility for the accuracy of the information contained in this letter (other than that relating to the Lai Fung Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this letter (other than those expressed by the Lai Fung Group or the Lai Fung Directors) have been arrived at after due and careful consideration and there are no other facts not contained in this letter the omission of which would make any statement in this letter misleading.

The directors of the Offeror jointly and severally accept full responsibility for the accuracy of the information contained in this letter (other than that relating to the Lai Fung Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this letter (other than those expressed by the Lai Fung Group or the Lai Fung Directors) have been arrived at after due and careful consideration and there are no other facts not contained in this letter the omission of which would make any statement in this letter misleading.

The Lai Fung Directors jointly and severally accept full responsibility for the accuracy of the information contained in this letter relating to the Lai Fung Group and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this letter by the Lai Fung Group or Lai Fung Directors have been arrived at after due and careful consideration and there are no other facts not contained in this letter the omission of which would make any statement in this letter relating to the Lai Fung Group misleading.

Yours faithfully, For and on behalf of The Hongkong and Shanghai Banking Corporation Limited Che Ning Liu Vice Chairman, Global Banking

The Hongkong and Shanghai Banking Corporation Limited is a registered institution under the SFO, registered to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 5 (advising on futures contracts), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO and a licensed bank under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong).

– VI-6 –