JOY CITY PROPERTY LIMITED 大悅城地產有限公司 (Incorporated in Bermuda with Limited Liability) (Stock Code: 207)

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JOY CITY PROPERTY LIMITED 大悅城地產有限公司 (incorporated in Bermuda with limited liability) (Stock code: 207)

MAJOR TRANSACTION ACQUISITION OF LAND USE RIGHTS IN XIAMEN, THE PRC

ACQUISITION OF LAND USE RIGHTS IN XIAMEN, THE PRC

The Board is pleased to announce that on 9 December 2020, the Joint Bidders, namely Seaworld (an indirect wholly-owned subsidiary of the Company), Xiamen Metro Investment and Xiamen East Development, obtained the Confirmation Letter approving the bid of the land use rights of the Land offered for sale by the Xiamen Municipal Natural Resources and Planning Bureau at the Auction for RMB3,955,000,000. The Land Use Rights Grant Contract in relation to the Acquisition is expected to be entered into on or before 18 December 2020. A security deposit for the Auction of RMB600,000,000 has been paid by the Joint Bidders according to the Relevant Proportions, of which the Group has paid RMB306,000,000. Pursuant to the requirements from the Xiamen Municipal Natural Resources and Planning Bureau, the Joint Bidders will jointly establish a project company in Xiamen, the PRC for future development of the Land.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Acquisition exceeds 25% but are all less than 100%, the transaction contemplated under the Acquisition constitutes a major transaction for the Company. As the Group’s principal businesses include property development, the Company is regarded as a “Qualified Issuer” and the Acquisition involves an acquisition of governmental land(s) from a PRC Governmental Body through auction governed by the PRC law and thus is regarded as a “Qualified Property Acquisition” under Rule 14.04(10B) and (10C) of the Listing Rules. As such, the Acquisition is subject to reporting and announcement requirements and are exempt from shareholders’ approval requirements pursuant to Rule 14.33A of the Listing Rules.

GENERAL

The circular containing the information required under the Listing Rules in relation to the Acquisition will be despatched to the Shareholders as soon as possible, which is expected to be on or before 29 January 2021, in order to allow sufficient time for the preparation of the financial and other information in the circular.

INTRODUCTION

THE CONFIRMATION LETTER

Date : 9 December 2020

Parties : (1) the Joint Bidders; and

(2) Xiamen Municipal Natural Resources and Planning Bureau.

Location of the Land : The Land is located at the junction of Xinglinwan Road and Chengyi Middle Road, 11-11 Jimei New City Area, Jimei District (集美區11-11集美新城片區杏林灣路與誠毅中路交叉口) in Xiamen, the PRC

Total site area : approximately 127,912 square meters

Total planned gross : approximately 232,190 square meters floor area

Proposed use of the : Commercial and residential Land

Term of the land use : 40 years for commercial use and 70 years for residential use right

Consideration : RMB3,955,000,000, which was the bidding price of the Land submitted by the Joint Bidders at the Auction held by the Xiamen Municipal Natural Resources and Planning Bureau, of which the Group will pay RMB2,017,050,000 in accordance with the Relevant Proportions.

A security deposit for the Auction of an amount of RMB600,000,000 has been paid by the Joint Bidders, of which the Group has paid RMB306,000,000 in accordance with the Relevant Proportions. The security deposit will form the payment of the total consideration in relation to the Acquisition.

50% of the Consideration less the security deposit will be paid by the Joint Bidders on or before 8 January 2021 and the remaining balance of 50% of the Consideration will be paid by the Joint Bidders within six months of the date of the Confirmation Letter.

Establishment of a : A project company, of which the equity interest is to be held as to 51%, 2 project company 24.5% and 24.5% by Seaworld, Xiamen Metro Investment and Xiamen East Development, respectively, will be established in Xiamen, the PRC for future development of the Land.

BASIS OF THE CONSIDERATION

The Consideration was arrived at as a result of successful bidding of the Land by the Joint Bidders at the Auction after taking into account the minimum bid price, current market conditions, location of the Land and the land price in the surrounding area. The aggregate costs relating to the Acquisition, including the Consideration and related tax, administration and transitional costs, is expected to be approximately RMB4,250,000,000, which will be funded by the Joint Bidders on a pro rata basis according to their Respective Proportions. Accordingly, the total contribution by the Group is expected to be approximately RMB2,167,500,000, which will be financed by its internal resources, shareholders’ loans and/or external borrowings.

REASONS FOR AND BENEFITS OF THE ACQUISITION

The Group is principally engaged in development, operation, sales, leasing and management of mixed-use complexes and commercial properties in the PRC.

The Land is located in a prime area of Xiamen, which is strategically located in the prime urban area of Xiamen City and a transport hub, therefore it is considered suitable for development of integrated commercial and residential properties. In view of the location and the designated use of the Land, it is expected to achieve high investment value after completion of the development of the Land, and thus generate stable and satisfactory revenue and profit to the Group. The Directors consider that the Acquisition is in line with the business development strategy and planning of the Group and will uphold the brand image of Joy City as a leading complex and commercial property developer and operator in the PRC, whilst leveraging on the resources of the Group.

The Directors consider the Acquisition is in the Group’s ordinary and usual course of business and the Acquisition is in the interests of the Company and the Shareholders as a whole, and the terms thereof are on normal commercial terms, which are fair and reasonable.

INFORMATION ON THE PARTIES

The Company is an investment holding company incorporated in Bermuda. The Group is principally engaged in development, operation, sales, leasing and management of mixed-use complexes and commercial properties in the PRC. The Group develops, holds and operates various property projects in the PRC and Hong Kong.

The Joint Bidders

Seaworld is a company incorporated in Hong Kong with limited liability and an indirect wholly-owned subsidiary of the Company. Seaworld is principally engaged in intermediate holding business for property development projects in the PRC.

Xiamen Metro Investment is a limited liability company incorporated in the PRC and is principally engaged in property development and property management in the PRC. It is wholly-owned by Xiamen Rail Transit Group Co., Ltd.* (廈門軌道交通集團有限公司), which is owned as to approximately 87.74% by the State-owned Assets Supervision and Administration Commission of Xiamen Municipal People's 3

Government* (廈門市人民政府國有資產監督管理委員會), a state-owned enterprise, and as to approximately 12.26% by China Development Fund Co., Ltd.* ( 國開發展基金有限公司), a wholly-owned subsidiary of China Development Bank (國家開發銀行).

Xiamen East Development is a limited liability company incorporated in the PRC and is principally engaged in property development and property management in the PRC. It is wholly-owned by Xiamen Housing Construction Group Co., Ltd.* (廈門住宅建設集團有限公司), which is in turn wholly-owned by the State-owned Assets Supervision and Administration Commission of Xiamen Municipal People's Government* (廈門市人民政府國有資產監督管理委員會), a state-owned enterprise.

The Xiamen Municipal Natural Resources and Planning Bureau is a PRC governmental authority and the seller of the Land.

To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, Xiamen Metro Investment, Xiamen East Development and the Xiamen Municipal Natural Resources and Planning Bureau and their respective ultimate beneficial owners are third parties independent of the Group and its connected persons.

LISTING RULES IMPLICATIONS

GENERAL

DEFINITIONS

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

“Acquisition” the acquisition of land use rights of the Land through public bidding process at the Auction

“Auction” the public auction held by the Xiamen Municipal Natural Resources and Planning Bureau at which the Land was offered for sale

“Board” the board of Directors

“Company” Joy City Property Limited ( 大悅城地產有限公司), a company incorporated under the laws of Bermuda with limited liability, the ordinary shares of which are listed on the Main Board of the Stock Exchange (Stock code: 207)

“Confirmation Letter” the confirmation letter (成交確認書) entered into between the Joint Bidders and the Xiamen Municipal Natural Resources and Planning Bureau confirming the Acquisition at the Auction on 9 December 2020

“Consideration” RMB3,955,000,000, being the price for the grant of the land use rights of the Land

“Directors” the directors of the Company

“Group” the Company and its subsidiaries

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

“Joint Bidders” Seaworld, Xiamen Metro Investment and Xiamen East Development

“Land” the plots of land described under the section headed “The Confirmation Letter” in this announcement with a total site area of approximately 127,912 square meters which was offered for sale at the Auction

“Land Use Rights Grant the land use rights grant contract (國有建設用地使用權出讓合同) to be Contract” entered into between the Joint Bidders and Xiamen Municipal Natural Resources and Planning Bureau in respect of the Land

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

“PRC” the People’s Republic of China, which shall, for the purpose of this announcement, exclude Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

“Relevant Proportions” the relevant proportions of equity interests to be held by the Joint Bidders in a project company to be established in Xiamen, the PRC for future development of the Land, of which the equity interest is to be held as to 51%, 24.5% and 24.5% by Seaworld, Xiamen Metro Investment and Xiamen East Development, respectively

“RMB” Renminbi, the lawful currency of the PRC

“Shareholders” the shareholders of the Company

“Seaworld” Seaworld Company Limited (斯威有限公司), a company incorporated in Hong Kong and an indirect wholly-owned subsidiary of the Company

“Stock Exchange” The Stock Exchange of Hong Kong Limited

“Xiamen Municipal Natural Xiamen Municipal Natural Resources and Planning Bureau (廈門市自然 Resources and Planning 資源和規劃局) Bureau” 5

“Xiamen East Development” Xiamen East District Development Company Limited* (廈門市東區開發有限公司), a limited liability company incorporated in the PRC and an independent third party of the Company

“Xiamen Metro Investment” Xiamen Metro Upper Cover Investment Development Company Limited* ( 廈門地鐵上蓋投資發展有限公司), a limited liability company incorporated in the PRC and an independent third party of the Company

“%” per cent

In this announcement, unless the context requires otherwise, the terms “connected person(s)”, “percentage ratio” and “subsidiary(ies)” shall have the meanings given to such terms in the Listing Rules.

* English translations of the names are provided for ease of reference only and they are not official English names of the companies and authority concerned.

By order of the Board Joy City Property Limited Zhou Zheng Chairman

The PRC, 9 December 2020

As at the date of this announcement, the Board comprises Mr. ZHOU Zheng (Chairman) and Mr. CAO Ronggen as Executive Directors; Mr. MA Dewei, Mr. ZHU Laibin and Mr. JIANG Yong as Non-executive Directors; and Mr. LAU Hon Chuen, Ambrose, GBS, JP, Mr. LAM Kin Ming, Lawrence and Mr. CHAN Fan Shing as Independent Non-executive Directors.