Major Transactions (1) Acquisition of Land Use Rights in Xiamen, the Prc; and (2) Acquisition of Land Use Rights in Nanchang, the Prc

THIS CIRCULAR IS FOR YOUR INFORMATION ONLY

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

If you have sold or transferred all your Shares in Joy City Property Limited, you should at once hand this circular together with the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

MAJOR TRANSACTIONS (1) ACQUISITION OF LAND USE RIGHTS IN XIAMEN, THE PRC; AND (2) ACQUISITION OF LAND USE RIGHTS IN NANCHANG, THE PRC

Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed ‘‘Definitions’’ in this circular.

A letter from the Board is set out on pages 5 to 22 of this circular.

Each of the Xiamen Acquisition and the Nanchang Acquisition is exempted from shareholders’ approval as it constitutes a Qualified Property Acquisition under the Listing Rules. This circular is being despatched to the Shareholders for information only.

25 January 2021 CONTENTS

Page

DEFINITIONS ...... 1

LETTER FROM THE BOARD ...... 5

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

APPENDIX II — GENERAL INFORMATION ...... II-1

–i– DEFINITIONS

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

‘‘Board’’ the board of Directors

‘‘COFCO Corporation’’ COFCO Corporation (中糧集團有限公司), a state-owned enterprise incorporated in the PRC in September 1952 under the purview of the State-owned Assets Supervision and Administration Commission of the State Council (國務院國有資產監督管理委員會), the holding company of Grandjoy Holdings Group and thus an indirect controlling shareholder of the Company

‘‘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)

‘‘Cooperation the cooperation agreement dated 18 December 2020 entered into Agreement’’ between Seaworld, Xiamen Metro Investment and Xiamen East Development in relation to the cooperation arrangements between the parties for their investment in the Project Company which is established for the development of the Xiamen Land

‘‘Directors’’ the directors of the Company

‘‘Grandjoy Holdings Grandjoy Holdings Group Co., Ltd.* (大悅城控股集團股份有限 Group’’ 公司), a company established in the PRC whose A shares are listed on the Shenzhen Stock Exchange (stock code: 000031.SZ) and a controlling shareholder of the Company, and thus a connected person of the Company, and a subsidiary of COFCO Corporation

‘‘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 Parcel I’’ the land parcel situated at Nanchang City, Jiangxi Province, the PRC, with a total site area of approximately 42,887 square meters, details of which are set out in the section headed ‘‘Results of the Bids’’ under ‘‘Acquisition of land use rights in Nanchang, the PRC’’ in the Letter from the Board of this circular

–1– DEFINITIONS

‘‘Land Parcel II’’ the land parcel situated at Nanchang City, Jiangxi Province, the PRC, with a total site area of approximately 20,153 square meters, details of which are set out in the section headed ‘‘Results of the Bids’’ under ‘‘Acquisition of land use rights in Nanchang, the PRC’’ in the Letter from the Board of this circular

‘‘Land Parcel III’’ the land parcel situated at Nanchang City, Jiangxi Province, the PRC, with a total site area of approximately 73,355 square meters, details of which are set out in the section headed ‘‘Results of the Bids’’ under ‘‘Acquisition of land use rights in Nanchang, the PRC’’ in the Letter from the Board of this circular

‘‘Latest Practicable 20 January 2021, being the latest practicable date prior to the Date’’ printing of this circular for ascertaining certain information in this circular

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

‘‘Nanchang the acquisition of land use rights of the Nanchang Land through Acquisition’’ public bidding process at the Nanchang Auction

‘‘Nanchang Auction’’ the public auction held by the Nanchang Natural Resources Bureau at which the Nanchang Land (comprising Land Parcel I, Land Parcel II and Land Parcel III) was offered for sale

‘‘Nanchang the confirmation letters (成交確認書) entered into between Confirmation Shanghai Pengli and Nanchang Real Estate Trading Center Letters’’ confirming the Nanchang Acquisition at the Nanchang Auction on 30 December 2020

‘‘Nanchang RMB1,795,753,520, being the aggregate price for the grant of the Consideration’’ land use rights of the Nanchang Land (comprising Land Parcel I, Land Parcel II and Land Parcel III)

‘‘Nanchang Jiayue’’ Nanchang Jiayue Real Estate Development Co., Ltd.* (南昌嘉悅房地產開發有限公司), a limited liability company incorporated in the PRC and an indirect wholly-owned subsidiary of the Company

‘‘Nanchang Land’’ comprises Land Parcel I, Land Parcel II and Land Parcel III, with an aggregate site area of approximately 136,395 square meters which was offered for sale at the Nanchang Auction

‘‘Nanchang Land Use the land use rights grant contracts (國有建設用地使用權出讓合 Rights Grant 同) to be entered into between Nanchang Jiayue and Nanchang Contracts’’ Natural Resources Bureau in relation to Land Parcel I, Land Parcel II and Land Parcel III, respectively

–2– DEFINITIONS

‘‘Nanchang Natural Nanchang Natural Resources Bureau (南昌市自然資源局) Resources Bureau’’

‘‘Nanchang Real Estate Nanchang Real Estate Trading Center (南昌市地產交易中心), a Trading Center’’ department of Nanchang Natural Resources Bureau

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

‘‘PRC Governmental has the meaning ascribed to it under the Listing Rules Body’’

‘‘PRC law’’ has the meaning ascribed to it under the Listing Rules

‘‘Project Company’’ Xiamen City Yueji Commercial Management Company Limited* (廈門市悅集商業管理有限公司), a limited liability company incorporated in the PRC which equity interest is held as to 51%, 24.5% and 24.5% by Seaworld, Xiamen Metro Investment and Xiamen East Development, respectively

‘‘Relevant Proportions’’ the relevant proportions of equity interests held by the Joint Bidders in the Project Company, being 51%, 24.5% and 24.5% held by Seaworld, Xiamen Metro Investment and Xiamen East Development, respectively

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

‘‘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

‘‘Shanghai Pengli’’ Shanghai Top Glory Real Estate Development Co., Ltd.* (上海鵬利置業發展有限公司), a limited liability company established in the PRC and an indirect wholly-owned subsidiary of the Company

‘‘Shareholders’’ the shareholders of the Company

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

‘‘Xiamen Acquisition’’ the acquisition of land use rights of the Xiamen Land through public bidding process at the Xiamen Auction

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

–3– DEFINITIONS

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

‘‘Xiamen RMB3,955,000,000, being the price for the grant of the land use Consideration’’ rights of the Xiamen Land

‘‘Xiamen East Xiamen East District Development Company Limited* (廈門市 Development’’ 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 Land’’ the plots of land described under the section headed ‘‘The Xiamen Confirmation Letter’’ under ‘‘Acquisition of land use rights in Xiamen, the PRC’’ in the Letter from the Board of this circular with a total site area of approximately 127,912 square meters which was offered for sale at the Xiamen Auction

‘‘Xiamen Land Use the land use rights grant contract (國有建設用地使用權出讓合同) Rights Grant entered into between the Joint Bidders and Xiamen Municipal Contract’’ Natural Resources and Planning Bureau in respect of the Xiamen Land on 18 December 2020

‘‘Xiamen Metro Xiamen Metro Upper Cover Investment Development Company Investment’’ 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

‘‘Xiamen Municipal Xiamen Municipal Natural Resources and Planning Bureau (廈 Natural Resources 門市自然資源和規劃局) and Planning Bureau’’

‘‘%’’ per cent

The shareholding of the respective Shareholder in the Company as disclosed in this circular refers to the percentage shareholding of such Shareholder to the issued share capital of the Company, without taking into account the non-redeemable convertible preference shares issued by the Company or the potential effect on the shareholding upon conversion of the non-redeemable convertible preference shares, unless otherwise stated.

In this circular, unless the context otherwise requires, the terms ‘‘connected person(s)’’, ‘‘controlling shareholder(s)’’, ‘‘percentage ratios’’, ‘‘subsidiary(ies)’’, ‘‘substantial shareholder(s)’’, ‘‘Qualified Issuer’’ and ‘‘Qualified Property Acquisition’’ shall have the meanings given to such terms in the Listing Rules, as modified by the Stock Exchange from time to time.

The English names of Chinese entities marked with ‘‘*’’ are translations of their Chinese names and are included in this circular for identification purpose only, and should not be regarded as their official English translation. In the event of any inconsistency, the Chinese name prevails.

–4– LETTER FROM THE BOARD

Executive Directors: Registered office: Mr. ZHOU Zheng (Chairman) Clarendon House Mr. CAO Ronggen 2 Church Street Hamilton HM11 Non-executive Directors: Bermuda Mr. MA Dewei Mr. ZHU Laibin Principal place of business in Hong Kong: Mr. JIANG Yong 33/F., COFCO Tower 262 Gloucester Road Independent non-executive Directors: Causeway Bay Mr.LAUHonChuen,AmbroseGBS, JP Hong Kong Mr. LAM Kin Ming, Lawrence Mr. CHAN Fan Shing

25 January 2021

To the Shareholders and holders of the convertible preference shares (for information only)

Dear Sir or Madam,

MAJOR TRANSACTIONS (1) ACQUISITION OF LAND USE RIGHTS IN XIAMEN, THE PRC; AND (2) ACQUISITION OF LAND USE RIGHTS IN NANCHANG, THE PRC

I. INTRODUCTION

References are made to the announcements of the Company dated 9 December 2020 and 23 December 2020 in relation to the acquisition of land use rights in Xiamen, the PRC and the acquisition of land use rights in Nanchang, the PRC.

The purpose of this circular is to provide you with, among other things, further details of the Xiamen Acquisition, the Nanchang Acquisition, and such other information as required under the Listing Rules.

–5– LETTER FROM THE BOARD

II. ACQUISITION OF LAND USE RIGHTS IN XIAMEN, THE PRC

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 Xiamen Confirmation Letter approving the bid of the land use rights of the Xiamen Land offered for sale by the Xiamen Municipal Natural Resources and Planning Bureau at the Xiamen Auction for RMB3,955,000,000. The Xiamen Confirmation Letter was entered into between the Joint Bidders and the Xiamen Municipal Natural Resources and Planning Bureau on 9 December 2020 and the Xiamen Land Use Rights Grant Contract in relation to the Xiamen Acquisition was entered into between the Joint Bidders and the Xiamen Municipal Natural Resources and Planning Bureau on 18 December 2020. As of the Latest Practicable Date, 50% of the Xiamen Consideration has been paid by the Joint Bidders and the security deposit for the Xiamen Auction of RMB600,000,000 has formed part of this payment, such amounts have been paid by the Joint Bidders in proportion to their respective Relevant Proportions. The Joint Bidders have jointly established the Project Company on 10 December 2020 to hold the interests in the Xiamen Land upon the completion of the Xiamen Acquisition for the purpose of development of the Xiamen Land. The equity interest of the Project Company is owned as to 51%, 24.5% and 24.5% by Seaworld (an indirect wholly-owned subsidiary of the Company), Xiamen Metro Investment and Xiamen East Development, respectively.

1. The Xiamen Confirmation Letter

Date : 9 December 2020

Parties : (1) the Joint Bidders; and

(2) Xiamen Municipal Natural Resources and Planning Bureau.

Location of the Xiamen : The Xiamen Land is located at the junction of Land 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) (lot numbers: A1–1 and A1–2) in Xiamen, the PRC

Total site area : approximately 127,912 square meters

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

Total gross floor area : approximately 367,033 square meters (inclusive of 232,190 square meters as ground land transfer area and 134,843 square meters as underground land transfer area)

Proposed use of the : Commercial and residential Xiamen Land

–6– LETTER FROM THE BOARD

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

Xiamen Consideration : RMB3,955,000,000, which was the bidding price of the Xiamen Land submitted by the Joint Bidders at the Xiamen Auction held by the Xiamen Municipal Natural Resources and Planning Bureau, which the Joint Bidders will pay on a pro rata basis based on their respective Relevant Proportions. Accordingly, the Group, Xiamen Metro Investment and Xiamen East Development will pay RMB2,017,050,000, RMB968,975,000 and RMB968,975,000, respectively.

2. Major Terms of the Xiamen Land Use Rights Grant Contract

Date : 18 December 2020

Parties : (1) the Joint Bidders (as the transferee); and

(2) Xiamen Municipal Natural Resources and Planning Bureau (as the transferor).

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

As of the Latest Practicable Date, 50% of the Xiamen Consideration has been paid by the Joint Bidders and the security deposit for the Xiamen Auction of RMB600,000,000 has formed part of this payment, such amounts have been paid by the Joint Bidders in proportion to their respective Relevant Proportions. Accordingly, the Group, Xiamen Metro Investment and Xiamen East Development has paid an aggregate amount of RMB1,008,525,000, RMB484,487,500 and RMB484,487,500, respectively, as of the Latest Practicable Date, of which the security deposit for the Xiamen Auction has formed RMB306,000,000, RMB147,000,000 and RMB147,000,000, respectively, of such payments.

–7– LETTER FROM THE BOARD

The remaining balance of 50% of the Xiamen Consideration will be paid by the Joint Bidders within six months of the date of the Xiamen Confirmation Letter.

Commencement of : On or before 18 September 2021, subject to the construction terms of the Xiamen Land Use Rights Grant Contract

Completion of : Onorbefore18June2024,subjecttothetermsof construction the Xiamen Land Use Rights Grant Contract

Conditions of the land : (a) the plot ratio shall be no more than 3; use right (b) the building height limit shall be 100 metres;

(d) the A1–1 land building density shall be no more than 60% and the A1–2 land building density shallbenomorethan40%.

3. Basis of the Xiamen Consideration

The Xiamen Consideration was arrived at as a result of successful bidding of the Xiamen Land by the Joint Bidders at the Xiamen Auction using the land use right online trading system of the Xiamen Municipal Natural Resources and Planning Bureau, which was conducted in accordance with the relevant PRC laws and regulations. The Joint Bidders set the bid price for the Xiamen Land after taking into account (i) the minimum bid price for the Xiamen Land listed by the Xiamen Municipal Natural Resources and Planning Bureau of RMB3,000,000,000; (ii) among the three bidding entities who participated in the Xiamen Auction (including the Joint Bidders), the last bidding price of RMB3,950,000,000 submitted by one of the bidders for the Xiamen Land, which was very close to the Xiamen Consideration; (iii) the current property market conditions in Jimei District of Xiamen; (iv) the strategic locationoftheXiamenLandintheprimeurbanareaofXiamenCityandatransport hub; (v) the Xiamen Land’s average floor area price is among the prices of land plots in the surrounding area auctioned recently; and (vi) the development potential of the Xiamen Land. In view of the factors above, the Directors consider that the Xiamen Consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

The aggregate costs relating to the Xiamen Acquisition is expected to be approximately RMB4,370,000,000, comprising the Xiamen Consideration and related tax (mainly value-added tax), administration and transitional costs, which is expected to be approximately RMB4,250,000,000, together with the land related tax (including

–8– LETTER FROM THE BOARD stamp duty and municipal facilities related tax), which is expected to be approximately RMB120,000,000. The aggregate costs relating to the Xiamen Acquisition will be funded by the Joint Bidders on a pro rata basis according to their Relevant Proportions. Accordingly, the total contribution by the Group is expected to be approximately RMB2,228,700,000, which is intended to be satisfied by internal resources of the Group.

4. The Project Company

Pursuant to the requirements from the Xiamen Municipal Natural Resources and Planning Bureau, the Joint Bidders jointly established the Project Company on 10 December 2020. The Project Company was established for the single purpose relating to the Xiamen Acquisition and the developmentofresidentialandcommercial properties on the Xiamen Land. The equity interest of the Project Company is owned as to 51%, 24.5% and 24.5% by Seaworld (an indirect wholly-owned subsidiary of the Company), Xiamen Metro Investment and Xiamen East Development, respectively.

On 18 December 2020, Seaworld, Xiamen Metro Investment and Xiamen East Development entered into the CooperationAgreementonanarm’slengthbasisandon normal commercial terms, pursuant to which (a) Seaworld, Xiamen Metro Investment and Xiamen East Development will initially contribute based on their Relevant Proportions in an aggregate amount of RMB1,400,000,000 in the registered capital of the Project Company (of which RMB714,000,000 has been contributed by the Group) for the establishment of the Project Company, which shall be used to settle part of the Xiamen Consideration, and (b) Seaworld, Xiamen Metro Investment and Xiamen East Development will jointly participate in the development of the Xiamen Land through the Project Company. The remaining balance of the aggregate costs relating to the Xiamen Acquisition in the amount of approximately RMB2,970,000,000 is intended to be funded by way of shareholders’ loans to the Project Company from Seaworld, Xiamen Metro Investment and Xiamen East Development according to the Relevant Proportions (of which approximately RMB1,514,700,000 will be contributed by the Group).

Pursuant to the Cooperation Agreement, (a) the board of directors of the Project Company will comprise of five directors, of which three directors will be appointed by Seaworld, one director will be appointed by Xiamen Metro Investment and one director will be appointed by Xiamen East Development, and the chairman of the board of directors will be appointed by Seaworld; (b) the Xiamen Consideration will be funded by the shareholders of the Project Company on a pro rata basis in proportion to their respective shareholding interests in the Project Company through shareholders’ loans and capital contribution and the construction costs for developing the Xiamen Land will be funded by the Project Company through external borrowings and/or funds from property sales with the remaining balance, if any, to be funded by the shareholders of the Project Company on a pro rata basis; (c) the dividends and distributions of the Project Company will be made to its shareholders on a pro rata basis in proportion to their respective shareholding interests in the Project Company; (d) the scope of business of the Project Company

–9– LETTER FROM THE BOARD may not be changed without the unanimous consent of the shareholders of the Project Company; and (e) the Project Company may not enter into any transactions which are not on an arm’s length basis without the unanimous consent of the shareholders of the Project Company. The Directors consider that the terms and conditions of the Cooperation Agreement are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

In accordance with the Xiamen Land Use Rights Grant Contract, the parties of the Xiamen Land Use Rights Grant Contract entered into a supplemental agreement with the Project Company on 21 December 2020, pursuant to which (a) the Joint Bidders transferred their rights and obligations under the Xiamen Land Use Rights Grant Contract to the Project Company, (b) the Project Company will hold the interests in the Xiamen Land upon completion of the Xiamen Acquisition for the purpose of development of the Xiamen Land and (c) save as amended by the supplemental agreement, all other terms and conditions of the Xiamen Land Use Rights Grant Contract shall apply mutatis mutandis. The Directors consider that the terms and conditions of the supplemental agreement are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

As the Project Company is owned as to 51%, 24.5% and 24.5% by Seaworld, Xiamen Metro Investment and Xiamen East Development, respectively, as of the Latest Practicable Date and an indirect non wholly-owned subsidiary of the Company, the financial results, assets and liabilities of the Project Company will be consolidated into the accounts of the Group.

5. The Development Plan of the Xiamen Land

It is expected that the Xiamen Land will be developed into residential buildings and commercial properties (such as shopping mall, commercial and underground facilities). The earliest time for commencement of construction on the Xiamen Land is expected to be around first quarter of 2021, the earliest time for completion of construction is expected to be around June 2024 and the earliest time for pre-sale of properties is expected to be around third quarter of 2021. The construction costs for developing the Xiamen Land is estimated to be not more than RMB2,151,000,000, which does not form part of the aggregate costs of the Xiamen Acquisition and is expected to be funded by external borrowings to be obtained by the Project Company with independent financial institutions and/or funds from property sales of the Project Company. As at the Latest Practicable Date, the Project Company has not yet commenced negotiation with the independent financial institutions for the external borrowings and the terms and conditions of the financial arrangements have yet to be determined, and therefore, on this basis, no guarantees from the shareholders of the Project Company are required as at the Latest Practicable Date. The Project Company will, in accordance with the practical market conditions, make adjustment to the actual arrangements of the construction and development of the Xiamen Land.

–10– LETTER FROM THE BOARD

6. Reasons for and Benefits of the Xiamen Acquisition

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

The Xiamen 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, with direct access to the interchange station of Xiamen Metro Line 1 (廈門地鐵1號線)andXiamenMetro Line 6 (廈門地鐵6號線) (under construction), which serves to connect the major new cities in its vicinity, therefore it is considered suitable for development of integrated commercial and residential properties. Further to the recovery of economic activities after the COVID-19 pandemic in the second half of the year in 2020, the sales of the residential properties in the first hand markets recorded a gross floor area of approximately 2,347,700 square meters, represented a year-on-year increase by approximately 37.1%, which equalled to the sales of residential properties in the amount of RMB93,811 million, represented a year-on-year increase by approximately 60.2%, and the average selling price per square meter of the residential properties was RMB39,959 per square meter, represented a year-on-year increase by approximately 16.9%. In general, the Xiamen property market in 2020 had a balanced supply and demand, where the volume had increased while the price remained steady. The property market in Xiamen has shown improved confidence in terms of sentiment.

Xiamen Metro Investment and Xiamen East Development and their shareholders have a long history and substantial experience in property development projects in Xiamen, the PRC. Notwithstanding that the Group does not have previous experience and development projects in Xiamen, the PRC, the Group believes that the cooperation with Xiamen Metro Investment and Xiamen East Development in the Xiamen Acquisition represents an opportunity to build a long term strategic cooperation relationship with each of Xiamen Metro Investment and Xiamen East Development which is considered as a strong partner to the Group in property development in Xiamen, the PRC, which is significant and beneficial to the Group’s future business development. Pursuant to the Xiamen Land Use Rights Grant Contract, the residential buildings and commercial properties for retail uses will be developed into properties for sale, while the shopping mall with gross floor area of approximately 100,100 square meters will be developed into properties for rental purpose or for operation to be managed by the Project Company, which is expected to generate sales profit and stable rental income to the Group.

In view of the location and the designated use of the Xiamen Land as disclosed above, it is expected to achieve high investment value after completion of the development of the Xiamen Land, and thus generate stable and satisfactory revenue and profit to the Group. The Directors consider that the Xiamen 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.

–11– LETTER FROM THE BOARD

The Directors consider the Xiamen Acquisition is in the Group’s ordinary and usual course of business and the Xiamen 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.

III. ACQUISITION OF LAND USE RIGHTS IN NANCHANG, THE PRC

On 23 December 2020, Shanghai Pengli (an indirect wholly-owned subsidiary of the Company) has been notified by the Nanchang Natural Resources Bureau that it has successfully bid for the land use rights of the Nanchang Land offered for sale by the Nanchang Natural Resources Bureau at the Nanchang Auction for an aggregate consideration of RMB1,795,753,520. The Nanchang Land consists of three parcels of land with an aggregate site area of approximately 136,395 square meters. The Nanchang Confirmation Letters were entered into between Shanghai Pengli and the Nanchang Real Estate Trading Center on 30 December 2020 and the Nanchang Land Use Rights Grant Contracts in relation to the Nanchang Acquisition, which were originally expected to be entered into on or before 11 January 2021, will be entered into on or before 31 January 2021 as agreed between Nanchang Jiayue and the Nanchang Natural Resources Bureau. An aggregate security deposit for the Nanchang Auction of RMB359,160,000 has been paid by Shanghai Pengli. Pursuant to the requirements from the Nanchang Natural Resources Bureau, Shanghai Pengli established a project company, Nanchang Jiayue, in Nanchang, the PRC on 31 December 2020, to hold the interests in the Nanchang Land upon the completion of the Nanchang Acquisition for the purpose of future development of the Land.

1. Results of the Bids

Summaries of the principal terms of the results of the bids are set out below. Unless otherwise indicated, the summaries of the principal terms apply to each of the Land Parcel I, Land Parcel II and Land Parcel III.

Date : 23 December 2020

Successful bidder : Shanghai Pengli, an indirect wholly-owned subsidiary of the Company

–12– LETTER FROM THE BOARD

Location of the : The Nanchang Land consists of three parcels of land Nanchang Land with an aggregate site area of approximately 136,395 square meters:

. Land Parcel I is located at east to Jinhuan Road, south to Yunjin Road, west to Yinhuan Road, north to Liangsanshu Road, Xihu District (西湖區東至金環路、南至雲錦路、西至銀環路、北至涼傘樹路) (lot number: D03–03) and east to Fusheng South Road, south to Yunjin Road, west to Planning Road, north to Jinhuan Road, Xihu District (西湖區東至撫生南路、南至雲錦路、西至規劃路、北至金環路) (lot number: D03–04), in Nanchang City, Jiangxi Province, the PRC, with a total site area of approximately 42,887 square meters and a total planned gross floor area of approximately 335,874 square meters. The proposed use of the land is commercial and the term of the land use right is 40 years for commercial use.

. Land Parcel II is located at east to Fusheng South Road, south to Guanzhou Street, west to Guizhou Road, north to empty land, Xihu District (西湖區東至撫生南路、南至觀洲街、西至規劃路、北至空地) (lot number: D05–09), in Nanchang City, Jiangxi Province, the PRC, with a total site area of approximately 20,153 square meters and a total planned gross floor area of approximately 148,018 square meters. The proposed use of the land is commercial and the term of the land use right is 40 years for commercial use.

. Land Parcel III is located at east of Qiushi Road, west of Fusheng Road, south of Yuntian Road, north of Jiuzhou Gaojia, Xihu District (西湖區秋實路以東、撫生路以西、雲天路以南、九洲高架以北) (lot number: A02–06–1), in Nanchang City, Jiangxi Province, the PRC, with a total site area of approximately 73,355 square meters and a total planned gross floor area of approximately 206,581 square meters. The proposed use of the land is commercial and residential and the term of the land use right is 40 years for commercial use and 70 years for residential use.

–13– LETTER FROM THE BOARD

Nanchang : RMB1,795,753,520, which was the aggregate bidding Consideration price of the Nanchang Land (comprising the bidding prices for Land Parcel I, Land Parcel II and Land Parcel III) submitted by Shanghai Pengli at the Nanchang Auction held by the Nanchang Natural Resources Bureau.

A security deposit for the Nanchang Auction of an aggregate amount of RMB359,160,000 (comprising the security deposits for Land Parcel I, Land Parcel II and Land Parcel III) has been paid by Shanghai Pengli, and the security deposit will form the payment of the Nanchang Consideration in relation to the Nanchang Acquisition.

2. The Nanchang Confirmation Letters

Summaries of the principal terms of the Nanchang Confirmation Letters are set out below. Unless otherwise indicated, the summaries of the principal terms apply to each of the Land Parcel I, Land Parcel II and Land Parcel III.

Date : 30 December 2020

Parties : (1) Shanghai Pengli, an indirect wholly-owned subsidiary of the Company; and

(2) Nanchang Real Estate Trading Center.

Location of the : The Nanchang Land consists of three parcels of land Nanchang Land with an aggregate site area of approximately 136,395 square meters:

–14– LETTER FROM THE BOARD

–15– LETTER FROM THE BOARD

3. The Nanchang Land Use Rights Grant Contracts

Summaries of the principal terms of the Nanchang Land Use Rights Grant Contracts are set out below. Unless otherwise indicated, the summaries of the principal terms apply to each of the Land Parcel I, Land Parcel II and Land Parcel III.

Date : On or before 31 January 2021

Parties : (1) Nanchang Jiayue, an indirect wholly-owned subsidiary of the Company; and

(2) Nanchang Natural Resources Bureau.

Payment terms of : The Nanchang Consideration of the Nanchang Land will the Nanchang be satisfied in the following manner: Consideration . For Land Parcel I, the bidding price was RMB457,386,300 and a security deposit in the amount of RMB91,480,000 has been paid by Shanghai Pengli. The initial instalment representing 50% of the bidding price of Land Parcel I less the security deposit already paid for Land Parcel I will be paid by Nanchang Jiayue within one month of the relevant land use rights grant contract for Land Parcel I and the remaining balance of 50% of the bidding price of Land Parcel I will be paid by Nanchang Jiayue within three months of the date of the relevant land use rights grant contract for Land Parcel I.

. For Land Parcel II, the bidding price was RMB324,972,500 and a security deposit in the amount of RMB65,000,000 has been paid by Shanghai Pengli. The initial instalment representing 50% of the bidding price of Land Parcel II less the security deposit already paid for Land Parcel II will be paid by Nanchang Jiayue within one month of the relevant land use rights grant contract for Land Parcel II and the remaining balance of 50% of the bidding price of Land Parcel II will be paid by Nanchang Jiayue within three months of the date of the relevant land use rights grant contract for Land Parcel II.

–16– LETTER FROM THE BOARD

. For Land Parcel III, the bidding price was RMB1,013,394,720 and a security deposit in the amount of RMB202,680,000 has been paid by Shanghai Pengli. The initial instalment representing 50% of the bidding price of Land Parcel III less the security deposit already paid for Land Parcel III will be paid by Nanchang Jiayue within one month of the relevant land use rights grant contract for Land Parcel III and the remaining balance of 50% of the bidding price of Land Parcel III will be paid by Nanchang Jiayue within six months of the date of the relevant land use rights grant contract for Land Parcel III.

Commencement of : On or before 30 May 2021, subject to the terms of the construction Nanchang Land Use Rights Grant Contracts

Completion of : On or before 30 December 2025, subject to the terms of construction the Nanchang Land Use Rights Grant Contracts

Conditions of the : . For Land Parcel I, the plot ratio shall be no more land use rights than 5.55, the building height limit for the D03–03 land shall be no less than 200 metres, the green space ratio shall be more than 10% and the building density shall be no more than 60%.

. For Land Parcel II, the plot ratio shall be no more than 6, the green space ratio shall be more than 15% and the building density shall be no more than 50%.

. For Land Parcel III, the plot ratio shall be more than 1 and no more than 2.2, the residential building height limit shall be 54 metres, the green space ratio shall be more than 35% and the building density shall be no more than 25%.

4. Basis of the Nanchang Consideration

The Nanchang Consideration was arrived at as a result of successful bidding of the Nanchang Land by Shanghai Pengli at the Nanchang Auction using the land use right online trading system of the Nanchang Natural Resources Bureau, which was conducted in accordance with the relevant PRC laws and regulations. Shanghai Pengli set the bid price for the Nanchang Land after taking into account (i) the minimum bid price for the Nanchang Land listed by the Nanchang Natural Resources Bureau of RMB1,795,753,520 (which is equivalent to the Nanchang Consideration); (ii) the current property market conditions in Xihu District of Nanchang; (iii) the strategic location of the Nanchang Land in the prime urban area of Nanchang City and a

–17– LETTER FROM THE BOARD transport hub; (iv) the Nanchang Land’s average floor area price is among the prices of land plots in the surrounding area auctioned recently; and (v) the development potential of the Nanchang Land. In view of the factors above, the Directors consider that the Nanchang Consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

The aggregate costs relating to the Nanchang Acquisition is expected to be approximately RMB1,918,420,000, comprising the Nanchang Consideration in the amount of RMB1,795,753,520 and related tax, administration and transitional costs in the amount of approximately RMB122,666,480, which will be solely funded by the Group. The Group will finance its capital commitment for the Nanchang Acquisition by its internal resources.

Pursuant to the requirements from the Nanchang Natural Resources Bureau, Shanghai Pengli established a project company, Nanchang Jiayue, in Nanchang, the PRC on 31 December 2020. Nanchang Jiayue was established for the single purpose relating to the Nanchang Acquisition and the development of residential and commercial properties on the Nanchang Land.

5. The Development Plan of the Nanchang Land

It is expected that the Nanchang Land will be developed into residential buildings and commercial properties (such as shopping mall, office buildings and service apartments). The earliest time for commencement of construction on the Nanchang Land is expected to be around May 2021, the earliest time for completion of construction is expected to be around June 2023 and the earliest time for pre-sale of properties is expected to be around August 2021. The construction costs for developing the Nanchang Land is estimated to be not more than RMB3,600,000,000, which is expected to be funded by external borrowings to be obtained by Nanchang Jiayue with independent financial institutions and/or funds from property sales of Nanchang Jiayue. As at the Latest Practicable Date, Nanchang Jiayue has not yet commenced negotiation with the independent financial institutions for the external borrowings and the terms and conditions of the financial arrangements have yet to be determined, and therefore, on this basis, no guarantee from the shareholder of Nanchang Jiayue is required as at the Latest Practicable Date. Nanchang Jiayue will, in accordance with the practical market conditions, make adjustment to the actual arrangements of the construction and development of the Nanchang Land.

6. Reasons for and Benefits of the Nanchang Acquisition

The Nanchang Land is located in a prime area of Nanchang, which is strategically located in the prime urban area of Nanchang City and a transport hub, within the vicinity of prestigious schools and with direct access to Nanchang Metro Line 4 (南昌地鐵4號線) (under construction) and Nanchang Metro Line 5 (南昌地鐵5號線) (expected to be completed at the end of 2021), which provides travelling coverage of the whole of Nanchang City, and therefore it is considered suitable for the investment and development of integrated commercial and residential properties. Despite the COVID-19 pandemic, the demand for land and newly developed properties remained

–18– LETTER FROM THE BOARD

strong and the total gross floor area for land sales in 2020 was approximately 18,050,000 square meters, representing an approximately 136% increase as compared with 2019, and the total gross floor area for sales of residential properties in first hand market was approximately 5,670,000 square meters, representing an increase of 11% as compared with 2019, and recorded an average sales price of approximately RMB12,634 per square meter. The overall demand and supply in the real estate market in Nanchang is balanced with steady sales price.

The Nanchang Acquisition is the prelude to the first major property development project of the Group in Nanchang and the development of the Nanchang Land is an important part of the local government’s development planning, and the Group believes that its participation in the development of the Nanchang Land provides a cooperation opportunity to cooperate with the local government and materialise into a long term working relationship, which is significant and beneficial to the Group’s future business development. Pursuant to the Nanchang Land Use Rights Grant Contract, the residential buildings and commercial properties for retail uses will be developed into properties for sale, while the shopping mall with gross floor area of approximately 125,000 square meters will be developed into properties for rental purpose or for operation to be managed by the Group, which is expected to generate sales profit and stable rental income to the Group.

In view of the location and the designated use of the Nanchang Land, it is expected to achieve high investment value after completion of the development of the Nanchang Land, and thus generate stable and satisfactory revenue and profit to the Group.

The Directors consider that the Nanchang 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 Nanchang Acquisition is in the Group’s ordinary and usual course of business and the Nanchang 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.

IV. 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 Project Company is a limited liability company incorporated in the PRC which equity interest is held as to 51%, 24.5% and 24.5% by Seaworld, Xiamen Metro Investment and Xiamen East Development, respectively. The Project Company was established for the purpose of the development of the Xiamen Land.

–19– LETTER FROM THE BOARD

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 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.

Shanghai Pengli is a company incorporated in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company. Shanghai Pengli is principally engaged in property development and investment in the PRC.

Nanchang Jiayue is a company established in the PRC with limited liability and is an indirect wholly-owned subsidiary of the Company. The principal activity of the Nanchang Jiayue is property development.

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

The Nanchang Natural Resources Bureau is a PRC governmental authority and the seller of the Nanchang Land. The Nanchang Real Estate Trading Center is a department of the Nanchang Natural Resources Bureau, which is also a PRC governmental authority.

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

–20– LETTER FROM THE BOARD

V. FINANCIAL EFFECTS OF THE XIAMEN ACQUISITION AND THE NANCHANG ACQUISITION OF THE COMPANY

In relation to the Xiamen Acquisition, as the Group is expected to finance its contribution to the Xiamen Consideration using its internal resources, the total investment properties and inventories of the Group was increased by approximately RMB4,370,000,000 and the net cash position was decreased by approximately RMB2,228,700,000 accordingly, and the remaining portion of the Xiamen Consideration will be contributed by Xiamen Metro Investment and Xiamen East Development based on the Relevant Proportions. As such, the total assets and the total liabilities of the Group did not have any material change as a result of the Xiamen Acquisition. Given that the Xiamen Land is yet to be developed, it is expected that the Xiamen Acquisition will not have any immediate material impact on the earnings of the Group.

In relation to the Nanchang Acquisition, as the Group is expected to finance its contribution to the Nanchang Consideration using its internal resources, the total investment properties and inventories of the Group was increased by approximately RMB1,918,420,000 and the net cash position was decreased by approximately RMB1,918,420,000 accordingly. As such, the total assets and the total liabilities of the Group did not have any material change as a result of the Nanchang Acquisition. Given that the Nanchang Land is yet to be developed, it is expected that the Nanchang Acquisition will not have any immediate material impact on the earnings of the Group.

VI. LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of each of the Xiamen Acquisition and the Nanchang Acquisition exceeds 25% but are all less than 100%, the transaction contemplated under each of the Xiamen Acquisition and the Nanchang 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 each of the Xiamen Acquisition and Nanchang 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, each of the Xiamen Acquisition and Nanchang Acquisition is (i) subject to reporting and announcement requirements and are exempt from shareholders’ approval requirements pursuant to Rule 14.33A of the Listing Rules; and (ii) exempt from the requirement to include a valuation report in the circular pursuant to Rule 14.33B of the Listing Rules.

VII. ADDITIONAL INFORMATION

The Directors believe that the terms of the Xiamen Confirmation Letter, the Xiamen Land Use Rights Grant Contract, the Nanchang Confirmation Letters, the Nanchang Land Use Rights Grant Contracts and the transaction contemplated thereunder are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. None of the Directors have any material interest in the Xiamen Confirmation Letter, the Xiamen Land Use Rights Grant Contract, the Nanchang Confirmation Letters and the Nanchang Land Use Rights Grant Contracts.

–21– LETTER FROM THE BOARD

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

By order of the Board JoyCityPropertyLimited Zhou Zheng Chairman

–22– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

1. CONSOLIDATED FINANCIAL STATEMENTS

Details of the financial information of the Group for each of the financial years ended 31 December 2017, 31 December 2018 and 31 December 2019 and the six months period ended30June2020aredisclosedinthefollowing documents which have been published on both the website of the Stock Exchange (http://www.hkex.com.hk) and the website of the Company (http://www.joy-cityproperty.com ):

. interim report of the Group for the six months period ended 30 June 2020 published on 14 September 2020 (pages 82 to 132) (available on: https:// www1.hkexnews.hk/listedco/listconews/sehk/2020/0914/2020091400687.pdf);

. annual report of the Group for the year ended 31 December 2019 published on 22 April 2020 (pages 141 to 295) (available on: https://www1.hkexnews.hk/listedco/ listconews/sehk/2020/0422/2020042200475.pdf);

. annual report of the Group for the year ended 31 December 2018 published on 23 April 2019 (pages 135 to 287) (available on: https://www1.hkexnews.hk/listedco/ listconews/sehk/2019/0423/ltn20190423590.pdf); and

. annual report of the Group for the year ended 31 December 2017 published on 12 April 2018 (pages 140 to 279) (available on: https://www1.hkexnews.hk/listedco/ listconews/sehk/2018/0412/ltn20180412311.pdf).

2. INDEBTEDNESS STATEMENT

Borrowings

As at 30 November 2020, being the latest practicable date for the purpose of determining the indebtedness of the Group prior to the printing of this circular, the Group had total borrowings amounting to approximately RMB37,362 million, details of which are as follows:

(i) Bank borrowings

RMB’000

Short term bank loans, unsecured and unguaranteed 5,138,576 Long term bank loans, secured and guaranteed 483,912 Long term bank loans, unsecured and guaranteed 8,434,032 Long term bank loans, secured and unguaranteed 9,288,965

23,345,485

(ii) Loans from fellow subsidiaries

As at 30 November 2020, the Group had outstanding unsecured loans from fellow subsidiaries of approximately RMB1,449 million, of which RMB1,062 million were unsecured and unguaranteed and RMB387 million was unsecured and guaranteed.

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

(iii) Loan from a non-controlling interest

As at 30 November 2020, the Group had outstanding amount loan from a non- controlling shareholder of a subsidiary of approximately RMB660 million, which was unsecured and unguaranteed.

(iv) Loans from third parties

As at 30 November 2020, the Group had outstanding loans from third parties of approximately RMB5,014 million, which was unsecured and unguaranteed.

(v) Bonds Payable

As at 30 November 2020, the Group had a total amount of outstanding bonds payable of RMB4,726 million, which were unsecured and unguaranteed.

As at the close of business on 30 November 2020, the Group had a total amount of authorised but unissued bonds of RMB2,500 million.

(vi) Amounts due to non-controlling interests

As at 30 November 2020, the Group had outstanding amounts due to non- controlling shareholders of a subsidiary of approximately RMB1,441 million, which was unsecured and unguaranteed.

(vii)Amount due to a fellow subsidiary

As at 30 November 2020, the Group had outstanding amounts due to a fellow subsidiary of approximately RMB231 million, which was unsecured and unguaranteed.

(viii) Amount due to an associate

As at 30 November 2020, the Group had outstanding amounts due to an associate of approximately RMB202 million, which was unsecured and unguaranteed.

(ix) Amounts due to joint ventures

As at 30 November 2020, the Group had outstanding amounts due to joint ventures of approximately RMB294 million, which was unsecured and unguaranteed.

Charges

As at 30 November 2020, the Group’s secured bank borrowings were secured by certain of the Group’s investment properties, property, plant and equipment, properties under development for sale, right-of-use assets (leased land), and accounts receivable.

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

Lease liabilities

As at 30 November 2020, the Group, as a lessee, had lease liabilities of carrying amounts of RMB141 million, which was unsecured and unguaranteed.

Contingent liabilities or guarantees

The Group has certain non-compliance incidents which are relating to the failure to comply with certain terms and conditions of the relevant construction works planning permits in respect of two projects, Chaoyang Joy City and Shenyang Joy City. The Group may be subject to a fine of up to 10% of the construction cost of the non- compliant structure or the excess area (as the case may be), demolishment of the relevant property and confiscation of any illegal revenue.

The construction costs of Chaoyang Joy City amounted to RMB3,357 million, including the cost for the non-compliant structure of RMB42 million. The non- compliant structure has been occupied as office and has not generated any revenue, and accordingly, the Directors believe that there would not be illegal revenue subject to confiscation. Chaoyang Joy City generated revenue since the year 2010 and it has not received any notification from the relevant authorities with respect to the non- compliant structure since the commencement of operation. The aggregate revenue of the shopping mall of Chaoyang Joy City since it generated revenue up to 30 November 2020 amounted to RMB5,258 million.

The construction costs of Shenyang Joy City amounted to RMB1,907 million, including an estimated cost for the excess area of RMB81 million. The excess area has been utilised as passageways for commercial use and has generated only a small percentage of the aggregate revenue of Shenyang Joy City. Shenyang Joy City generated revenue since the year 2009 and it has not received any notification from the relevant authorities with respect to the excess area since the commencement of operation, and accordingly, the Directors believe that the likelihood for the confiscation of any illegal revenue is low, and any action taken by the authorities will have minimal impact on the income and performance of Shenyang Joy City. The aggregate revenue of Shenyang Joy City since it generated revenue up to 30 November 2020 amounted to RMB2,503 million.

Based on the reasons and circumstances of these non-compliances and the PRC legal advice, the management of the Group considers that the risk of above losses is remote, and accordingly, no provision has been made. In addition, COFCO Corporation, the ultimate holding company of the Company, has undertaken to indemnify the Company against all penalties, losses and expenses in connection with the above non-compliances.

At 30 November 2020, the Group had provided guarantees to certain banks relating to mortgage facilities arranged for certain buyers of properties developed by the Group and the outstanding mortgage loans under these guarantees amounted to RMB4,458 million.

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

At 30 November 2020, the Group had provided guarantee to an associate relating to a bank loan and the guarantee was amounted to RMB540 million. In addition, an indirect wholly-owned subsidiary of the Company and the direct shareholder of the associate, also entered into a share pledge of its 30% equity interest in the associate in favour of the bank.

General

Save as aforesaid and apart from intra-group liabilities, the Group did not have any debt securities, issued and outstanding, and authorised or otherwise created but unissued, any other outstanding loan capital, any other borrowings or indebtedness in the nature of borrowing including bank overdrafts and liabilities under acceptance (other than normal trade bills) or similar indebtedness, debentures, mortgages, charges, loans, acceptance credits, hire purchase commitments, guarantees or other material contingent liabilities at 30 November 2020.

3. WORKING CAPITAL

The Directors are satisfied after due and careful consideration and taking into account the present internal financial resources available to the Group, the banking facilities presently available, the effect of the Xiamen Acquisition and the Nanchang Acquisition and in the absence of unforeseen circumstances, the Group will have sufficient working capital for its present requirements for at least twelve months from the date of this circular.

4. MATERIAL ADVERSE CHANGE

Based on the 2020 interim report of the Company, the Group’s consolidated profit for the six months ended 30 June 2020 decreased by 73.8% as compared to the Group’s consolidated profit for the six months ended 30 June 2019. Such decline in consolidated profit was mainly attributable to the following:

i. the overall fair value of the Group’s investment properties is expected to remain steady for the first half of 2020 resulting from the adverse impacts on commercial properties market conditions due to the COVID-19 pandemic, and there was no material increase in fair value;

ii. despite that the financial performance of the shopping malls and hotels has started to recover from May 2020, the retail and hospitality markets were adversely affected by the COVID-19 pandemic and the significant reduction in the number of tourists has led to a decrease in the customer flow in shopping malls, demand for hotel rooms and hotel occupancy rates. Further, the Group implemented rental reduction policy for tenants to reduce their operational burden for proactively fulfilling the Group’s social responsibility;

iii. the reduction in the settled gross floor area and settled unit price resulting from changes in the product structure settled by the Group as compared with the corresponding period in the previous year; and

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

iv. an increase in foreign exchange loss of approximately RMB67.6 million for the first half of 2020 as compared with the corresponding period in the previous year due to the impact of volatility of the exchange rate of Renminbi on the Group’s debts denominated in foreign currency.

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

5. FINANCIAL AND TRADING PROSPECTS

As disclosed in 2020 interim report of the Company, gross revenue of the Group amounted to RMB3,525,335,000 for the six months ended 30 June 2020, represented a decrease of approximately 47.6% compared to RMB6,732,035,000 for the six months ended 30 June 2019. Gross profit and net profit of the Group amounted to RMB2,106,251,000 and RMB443,353,000 respectively for the six months ended 30 June 2020, represented a decrease of approximately 41.1% and 73.8% respectively compared to RMB3,573,079,000 and RMB1,690,516,000 respectively for the six months ended 30 June 2019. Total assets and total equity amounted to approximately RMB115,100,774,000 and RMB48,961,611,000 respectively as at 30 June 2020, represented an increase of approximately 3.7% and a decrease of 1.8% respectively compared to RMB110,977,370,000 and RMB49,837,893,000 respectively for the year ended 31 December 2019.

The Group’s liquidity remained on a healthy level and financial resources were also reasonably distributed. As at 30 June 2020, the Group’s cash and bank balances, pledged deposits and restricted bank deposits totalled RMB14,134,170,000. The majority of the Group’s cash and bank balances, pledged deposits and restricted bank deposits are deposited with creditworthy banks with no recent history of default. As at 30 June 2020, the Group’s net gearing ratio was 46.2%, based on the division of net debt by total equity.

Save and except for the transactions already disclosed in announcements and circulars of the Company prior to the Latest Practicable Date and acquisitions, disposals and investments in joint ventures by the Group in its ordinary course of business which have not materialized into and/or constituted discloseable inside information of the Company as at the Latest Practicable Date, the Company did not have any intention, negotiation, agreement, arrangement and understanding (concluded or otherwise) about (i) the acquisition of any new business; (ii) any disposal, scaling-down and/or termination of its existing business and/or major operating assets; and (iii) the injection of any new business to the Group.

–I-5– APPENDIX II GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTEREST BY DIRECTORS

A. Interests of Directors

As at the Latest Practicable Date, the interests or short positions of the Directors and chief executive of the Company in the Shares, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO)whichare(i)requiredtobenotifiedtotheCompanyandtheStockExchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he/she has taken or deemed to have under such provisions of the SFO); (ii) required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies as set out in Appendix 10 to the Listing Rules (the ‘‘Model Code’’), to be notified to the Company and the Stock Exchange, were as follows:

Long Positions in the Shares, underlying shares and debentures of the Company and its associated corporations

Number of Approximate Company/name issued ordinary percentage of Name of Directors/ of associated shares held the issued chief executive corporations Capacity (Note 1) share capital

Mr. CAO Ronggen The Company Beneficiary of a trust 1,668,726 0.01% (Note 2) The Company Beneficiary owner 2,188,764 0.02% (Note 2) Mr. JIANG Yong The Company Beneficial owner 300,000 0.00% (Note 2) China Foods Limited Beneficial owner 50,000 0.00% (Note 3) Mr. LAM Kin Ming, The Company Beneficial owner 6,000 0.00% (Note 2) Lawrence Mr. CHAN Fan Shing The Company Beneficial owner 136,758 0.00% (Note 2)

Notes:

1. Long positions in the shares of the Company or its associated corporations, other than equity derivatives such as share options, warrants or convertible bonds.

–II-1– APPENDIX II GENERAL INFORMATION

2. The percentage (rounded to 2 decimal places) was calculated based on the total number of ordinary shares of the Company in issue as at the Latest Practicable Date, i.e. 14,231,124,858 ordinary shares.

3. The percentage (rounded to 2 decimal places) were calculated based on the total number of ordinary shares of China Foods Limited in issue as at 30 June 2020, i.e. 2,797,223,396 ordinary shares.

Save for those disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interest or short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which are (i) required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he/she has taken or was deemed to have under such provisions of the SFO); (ii) required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange.

As at the Latest Practicable Date, (i) Mr. Zhou Zheng is the deputy president of COFCO Corporation, the chairman of the board of Grandjoy Holdings Group and a director of both Vibrant Oak Limited (‘‘Vibrant Oak’’) and Achieve Bloom Limited (‘‘Achieve Bloom’’); (ii) Mr. Cao Ronggen is a director and general manager of Grandjoy Holdings Group; and (iii) Mr. Jiang Yong is an employee of COFCO Corporation and a director of Grandjoy Holdings Group.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company was a director or employee of a company which has an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

–II-2– APPENDIX II GENERAL INFORMATION

B. Interests of substantial shareholders

So far as it is known to the Directors of the Company, as at the Latest Practicable Date, the following persons (not being a Director or chief executive of the Company) had an interest or short position in the Shares or the underlying shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Approximate percentage of the Number of issued share capital Name of substantial shareholders Class of shares shares held (Note 1)

COFCO Corporation Ordinary shares 9,501,359,644 (L) 66.76% (Note 2) CPS 1,095,300,778 (L) 100% (Note 3) COFCO (Hong Kong) Limited Ordinary shares 9,501,359,644 (L) 66.76% (‘‘COFCO (HK)’’) (Note 2) CPS 1,095,300,778 (L) 100% (Note 3) Vibrant Oak Ordinary shares 9,133,667,644 (L) 64.18% (Note 2) Grandjoy Holdings Group Ordinary shares 9,133,667,644 (L) 64.18% Achieve Bloom Ordinary shares 367,692,000 (L) 2.58% CPS 1,095,300,778 (L) 100% GIC Private Limited Ordinary shares 1,135,920,000 (L) 7.98% (Note 4) Citigroup Inc. Ordinary shares 1,074,982,763 (L) 7.55% 8,000 (S) 0.00% 1,074,928,763 (P) 7.55%

Notes:

1. The percentages (rounded to 2 decimal places) of the ordinary shares were calculated based on the total number of ordinary shares in issue as at the Latest Practicable Date, i.e. 14,231,124,858 ordinary shares, and assuming that 1,095,300,778 CPS were not fully converted into 1,095,300,778 ordinary shares.

The percentages of CPS were calculated based on 1,095,300,778 CPS in issue as at the Latest Practicable Date.

2. Vibrant Oak, through its non-wholly owned subsidiary, Grandjoy Holdings Group, was deemed to be interested in 9,133,667,644 ordinary shares as at the Latest Practicable Date.

COFCO (HK), through its wholly-owned subsidiaries, Achieve Bloom and Vibrant Oak, and through its non-wholly owned subsidiary, Grandjoy Holdings Group, was deemed to be interested in 9,501,359,644 ordinary shares as at the Latest Practicable Date.

COFCO Corporation, through its wholly-owned subsidiary, COFCO (HK), was deemed to be interested in 9,501,359,644 ordinary shares as at the Latest Practicable Date.

–II-3– APPENDIX II GENERAL INFORMATION

3. COFCO (HK), through its wholly-owned subsidiary, Achieve Bloom, was deemed to be interested in 1,095,300,778 CPS as at the Latest Practicable Date.

COFCO Corporation, through its wholly-owned subsidiary, COFCO (HK), was deemed to be interested in 1,095,300,778 CPS as at the Latest Practicable Date.

4. GIC Private Limited held 1,135,920,000 ordinary shares as investment manager as at the Latest Practicable Date.

L. Indicates a long position.

S. Indicates a short position.

P. Indicates a lending pool.

Save as disclosed above, the Directors of the Company were not aware, as at the Latest Practicable Date, of any person (not being a Director or chief executive of the Company) who had an interest (or short position in the Shares or underlying shares) which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO.

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

4. DIRECTORS’ INTERESTS IN ASSETS OR CONTRACTS OR ARRANGEMENT

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which have since 31 December 2019, being the date to which the latest published audited consolidated financial statements of the Group were made up, been acquired or disposed of by, or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, none of the Directors were materially interested, directly or indirectly, in any subsisting contract or arrangement entered into by any member of the Group which was significant in relation to the business of the Group.

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5. MATERIAL CONTRACTS

The Group has entered into the following contracts (not being contracts entered into in the ordinary course of business) within the two years preceding the date of this circular which is or may be material:

(a) the framework agreement entered into between the Company, Spring Wisdom Limited (a wholly-owned subsidiary of the Company), Gain Success Limited (a wholly-owned subsidiary of the Company), Shanghai Gaoxing Property Limited (a wholly-owned subsidiary of the Company), Grand Favour Limited (a wholly- owned subsidiary of the Company), Bright Motion Limited (a wholly-owned subsidiary of the Company) and Garbo Commercial Property Fund L.P. (a limited partnership which the Group holds approximately 36.36% of the limited partnership interests) on 30 August 2019 in relation to (i) the transfer of the entire issued share capital in Spring Wisdom Limited by the Company to Grand Favour Limited and in consideration, Grand Favour Limited shall issue one share of US$1 to the Company; (ii) Grand Favour Limited shall transfer the entire issued share capital in Spring Wisdom Limited to Bright Motion Limited and in consideration, Bright Motion Limited shall issue one share of US$1 to Grand Favour Limited; and (iii) Bright Motion Limited shall transfer the entire issued share capital in Spring Wisdom Limited to Garbo Commercial Property Fund L.P. and in consideration, Spring Wisdom Limited will repay the due but outstanding related party’s loan, accrued loan interest and certain receivables in the amount of approximately RMB1.432 billion owed to the Company and/or its related parties;

(b) the framework agreement entered into between the Company, Glorious Run Limited (a wholly-owned subsidiary of the Company), Mark Creative Limited (a wholly-owned subsidiary of the Company), Xi’an Qin Han Tang International Plaza Management Company Limited (a subsidiary of the Company), Grand Favour Limited (a wholly-owned subsidiary of the Company), Bright Motion Limited (a wholly-owned subsidiary of the Company) and Garbo Commercial Property Fund L.P. (a limited partnership which the Group holds approximately 36.36% of the limited partnership interests) on 30 August 2019 in relation to (i) the transfer of the entire issued share capital in Glorious Run Limited by the Company to Grand Favour Limited and in consideration, Grand Favour Limited shall issue one share of US$1 to the Company as consideration; (ii) the transfer of the entire issued share capital in Glorious Run Limited by Grand Favour Limited to Bright Motion Limited and in consideration, Bright Motion Limited shall issue one share of US$1 to Grand Favour Limited; and (iii) the transfer of the entire issued share capital in Glorious Run Limited by Bright Motion Limited to Garbo Commercial Property Fund L.P. and in consideration, Mark Creative Limited and Glorious Run Limited will repay the due but outstanding related party’s loan, accrued loan interest and certain receivables in the amount of approximately RMB668.6 million owed to the Company and/or its related parties; and

–II-5– APPENDIX II GENERAL INFORMATION

(c) the acquisition agreement dated 11 June 2020 entered into by Shanghai Top Glory Real Estate Development Co., Ltd. (an indirect wholly-owned subsidiary of the Company) and COFCO Property Investment (Beijing) Co., Ltd. (a connected person of the Company), in connection to the acquisition of 50.1% equity interest in Suzhou City Xiang Zhi Yue Property Development Co., Ltd. at a consideration of RMB577,794,100.

6. LITIGATION AND CLAIMS

At as the Latest Practicable Date, the Group was not engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened by or against the Group.

7. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, so far as the Directors were aware, none of the Directors or their respective associates had any interest in a business which competed or might compete with the business of the Group, or had or might have any other conflicts of interest with the Group pursuant to Rule 8.10 of the Listing Rules.

8. GENERAL

The English text of this circular shall prevail over the Chinese text in case of inconsistency.

The company secretary of the Company is Ms. Ng Chi Man (ACG, ACS).

The registered office of the Company is at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda and its principal place of business in Hong Kong is at 33/F., COFCO Tower, 262 Gloucester Road, Causeway Bay, Hong Kong. The transfer office of the Company is Tricor Progressive Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

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9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours at the place of business of the Company in Hong Kong unless (i) a tropic cyclone warning signal number 8 or above is hoisted, or (ii) a black rainstorm warning signal is issued, except public holidays, for a period of 14 days from the date of this circular:

(a) the articles of association of the Company;

(b) the letter from the Board, the text of which is set out in the section headed ‘‘Letter from the Board’’ in this circular;

(c) the annual reports of the Company for the three years ended 31 December 2017, 31 December 2018 and 31 December 2019 and the interim report of the Company for the six months ended 30 June 2020;

(d) a copy of each of the material contracts referred to in the paragraph headed ‘‘Material Contracts’’ in this appendix; and

(e) this circular.

10. MISCELLANEOUS

The English text of this circular shall prevail over the Chinese text, in the event of inconsistency.

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