Guangxi Liuzhou Rail Transit Investment Development Group Co., Ltd

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities.

This announcement does not constitute or form a part of any offer of solicitation to purchase or subscribe for securities in the United States. The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), of the securities law of any state of the United States or other jurisdiction. The securities are being offered and sold outside the United States in reliance on Regulation S under the Securities Act and may not be sold within the United States absent registration or an exemption from registration under the Securities Act. No public offering of the securities will be made in the United States or in any other jurisdiction where such an offering is restricted or prohibited.

This announcement and the listing documents referred to herein are for information purposes only as required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and do not constitute an offer to sell or acquire or the solicitation of an offer to buy any securities. Neither this announcement nor anything referred to herein (including the listing documents) forms the basis for any contract or commitment whatsoever. For the avoidance of doubt, the publication of this announcement and the listing documents referred to herein shall not be deemed to be an offer of securities made pursuant to a prospectus issued by or on behalf of the Issuer (as defined below) for the purposes of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong nor shall it constitute an advertisement, invitation or document containing an invitation to the public to enter into or offer to enter into an agreement to acquire, dispose of, subscribe for or underwrite securities for the purposes of the Securities and Futures Ordinance (Cap. 571) of Hong Kong.

Notice to Hong Kong investors: The Issuer confirms that the Bonds (as defined below) are intended for purchase by professional investors (as defined in Chapter 37 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited) only and are listed on The Stock Exchange of Hong Kong Limited on that basis. Accordingly, the Issuer confirms that the Bonds are not appropriate as an investment for retail investors in Hong Kong. Investors should carefully consider the risks involved.

PUBLICATION OF OFFERING CIRCULAR

GUANGXI LIUZHOU RAIL TRANSIT INVESTMENT DEVELOPMENT GROUP CO., LTD. ( 廣西柳州市軌道交通投資發展集團有限公司) (Incorporated in the PRC with limited liability) (the “Issuer”)

U.S.$50,000,000 2.3 per cent. credit-enhanced bonds due 2024 backed by an irrevocable standby letter of credit issued by Hua Xia Bank Co., Limited Nanning Branch (the “Bonds”)

(Stock Code: 40819)

Lead Joint Global Coordinators

Guotai Junan International Hua Xia Bank Co., Limited Hong Kong Branch

Joint Global Coordinators, Joint Lead Managers and Joint Bookrunners

Guotai Junan Hua Xia Bank Co., Limited Zhongtai BG Securities International Hong Kong Branch International (HK) 1 This announcement is issued pursuant to Rule 37.39A of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

Please refer to the offering circular relating to the Bonds dated 23 August 2021 (the “Offering Circular”) appended herein. The Offering Circular is published in English only. No Chinese version of the Offering Circular has been published.

27 August 2021

As at the date of this announcement, the directors of the Issuer are Mr. Zhuo Liujun, Mr. Peng Zhichun, Mr. Chen Renguang, Ms.Ye Yuening and Ms. Gan Hui.

2 TABLE OF CONTENTS

Page

OFFERING CIRCULAR DATED 23 August 2021 ...... 5

3 IMPORTANT NOTICE

NOT FOR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES

IMPORTANT: You must read the following disclaimer before continuing. The following disclaimer applies to the offering circular (the “Offering Circular”) attached to this e-mail. You are therefore advised to read this disclaimer carefully before reading, accessing or making any other use of the Offering Circular. In accessing the Offering Circular, you agree to be bound by the following terms and conditions, including any modifications to them from time to time, each time you receive any information as a result of such access. You acknowledge that the access to the Offering Circular is intended for use by you only and you agree you will not forward or otherwise provide access to any other person.

NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO.

THE SECURITIES (THE “SECURITIES”) HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR OTHER JURISDICTION AND THE SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE OR LOCAL SECURITIES LAWS. THIS OFFERING IS MADE SOLELY IN OFFSHORE TRANSACTIONS PURSUANT TO REGULATION S UNDER THE SECURITIES ACT.

THE OFFERING CIRCULAR MAY NOT BE FORWARDED OR DISTRIBUTED TO ANY OTHER PERSON AND MAY NOT BE REPRODUCED IN ANY MANNER WHATSOEVER AND, IN PARTICULAR, MAY NOT BE FORWARDED TO ANY ADDRESS IN THE UNITED STATES. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS DOCUMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS.

Confirmation of Your Representation: You have accessed the attached document on the basis that you have confirmed to Guangxi Liuzhou Rail Transit Investment Development Group Co., Ltd. (廣西柳州市軌道交通投資發展集團有限公司) (the “Issuer”), Guotai Junan Securities (Hong Kong) Limited, Hua Xia Bank Co., Limited Hong Kong Branch, Zhongtai International Securities Limited and BG Securities (HK) Co., Limited (the “Joint Lead Managers”, and each a “Joint Lead Manager”) that: (1) you and any customers you represent are not in the United States, (2) the e-mail address that you gave us and to which this e-mail has been delivered is not located in the United States, (3) you consent to delivery of this document and any amendments or supplements by electronic transmission, and (4) to the extent you purchase the Securities, you will be doing so in an offshore transaction as defined in regulations under the Securities Act in compliance with Regulation S thereunder.

The Offering Circular is being furnished in connection with an offering in offshore transactions outside the United States in compliance with Regulation S under the Securities Act solely for the purpose of enabling a prospective investor to consider the purchase of the securities described in the Offering Circular.

The Offering Circular has been made available to you in electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of transmission and consequently neither the Issuer, the Joint Lead Managers, the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank or the Agents (as defined in the attached Offering Circular) nor any of their affiliates, directors, officers, employees, representatives, agents, advisers and each person who controls any of them accepts any liability or responsibility whatsoever in respect of any such alteration or change to the Offering Circular distributed to you in electronic format or any difference between the Offering Circular distributed to you in electronic format and the hard copy version.

Restrictions: The Offering Circular is being furnished in connection with an offering in offshore transactions outside the United States in compliance with Regulation S under the Securities Act solely for the purpose of enabling a prospective investor to consider the purchase of the Securities.

Nothing in this electronic transmission constitutes, and may not be used in connection with, an offer or an invitation by or on behalf of any of the Issuer or the Joint Lead Managers to subscribe or purchase any of the Securities, in any place where offers or solicitations are not permitted by law and access has been limited so that it shall not constitute in the United States or elsewhere directed selling efforts (within the meaning of Regulation S under the Securities Act). If a jurisdiction requires that the offering be made by a licensed broker or dealer and any Joint Lead Manager or any affiliate of a Joint Lead Manager is a licensed broker or dealer in that jurisdiction, the offering shall be deemed to be made by that Joint Lead Manager or such affiliate on behalf of the Issuer in such jurisdiction. Any Securities to be issued in respect thereof will not be registered under the Securities Act and may not be offered or sold in the United States unless registered under the Securities Act or pursuant to an exemption from such registration. Access has been limited so that it shall not constitute a general solicitation in the United States or elsewhere. If you have gained access to this transmission contrary to the foregoing restrictions, you will be unable to purchase any of the Securities.

You are reminded that you have accessed the Offering Circular on the basis that you are a person into whose possession the Offering Circular may be lawfully delivered in accordance with the laws of the jurisdiction in which you are located.

Actions that you may not take: If you receive the Offering Circular by e-mail, you should not reply by e-mail to this electronic transmission, and you may not purchase any securities by doing so. Any reply e-mail communications, including those you generate by using the “Reply” function on your e-mail software, will be ignored or rejected.

You are responsible for protecting against viruses and other destructive items. Your use of this e-mail is at your own risk and it is your responsibility to take precautions to ensure that it is free from viruses and other items of a destructive nature. Guangxi Liuzhou Rail Transit Investment Development Group Co., Ltd. (廣西柳州市軌道交通投資發展集團有限公司) (Incorporated with limited liability in the People’s Republic of China)

U.S.$50,000,000 2.3 per cent. Credit Enhanced Bonds due 2024 with the benefit of an irrevocable Standby Letter of Credit issued by Hua Xia Bank Co., Limited Nanning Branch

Issue Price: 100 per cent.

The 2.3 per cent. credit enhanced bonds in the aggregate principal amount of U.S.$50,000,000 due 2024 (the “Bonds”) will be issued by Guangxi Liuzhou Rail Transit Investment Development Group Co., Ltd. (廣西柳州市軌道交通投資發展集團有限公司) (the “Issuer”), a company incorporated under the laws of the People’s Republic of China (the “PRC”) with limited liability. Payments of principal and interest in respect of the Bonds will have the benefit of an irrevocable standby letter of credit (the “Standby Letter of Credit”) issued by Hua Xia Bank Co., Limited Nanning Branch (the “LC Bank”). See “Appendix A – Form of Irrevocable Standby Letter of Credit” for the form of the Standby Letter of Credit. The Bonds will bear interest on their outstanding principal amount from and including 26 August 2021 (the “Issue Date”) at the rate of 2.3 per cent. per annum, payable semi-annually in arrear in equal instalments of U.S.$11.5 per Calculation Amount (as defined in terms and conditions of the Bonds (the “Terms and Conditions”)) on 26 February and 26 August in each year, commencing on 26 February 2022. All payments of principal, premium (if any) and interest by or on behalf of the Issuer in respect of the Bonds shall be made free and clear of, or counterclaim and without withholding or deduction for or on account of, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within the PRC or any political subdivision or any authority therein or thereof having power to tax unless withholding or deduction is required by law. Application will be made to The Stock Exchange of Hong Kong Limited (the “SEHK”) for the listing of, and permission to deal in, the Bonds by way of debt issues to professional investors (as defined in Chapter 37 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited) (the “Professional Investors”) only. This Offering Circular is for distribution to Professional Investors only. Notice to Hong Kong investors: The Issuers confirm that the Notes are intended for purchase by Professional Investors only and, where they are listed on the SEHK, are so listed on that basis. Accordingly, the Issuers confirm that the Notes are not appropriate as an investment for retail investors in Hong Kong. Investors should carefully consider the risks involved. The SEHK has not reviewed the contents of this Offering Circular, other than to ensure that the prescribed form disclaimer and responsibility statements, and a statement limiting distribution of this Offering Circular to Professional Investors only have been reproduced in this Offering Circular. Listing of the Bonds on the SEHK is not to be taken as an indication of the commercial merits or credit quality of the Bonds or the Issuer or the Group or quality of disclosure in this Offering Circular. Hong Kong Exchanges and Clearing Limited and the SEHK take no responsibility for the contents of this document, 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 document. In accordance with the Circular on Promoting the Reform of the Administrative System on the Issuance by Enterprises of Foreign Debt Filings and Registrations (國家發展改革委關於推進企業發行外債備案登記制管理改革的通知(發改外資[2015]2044號)) (the “NDRC Circular”) issued by the National Development and Reform Commission of the PRC or its local branches (the “NDRC”) and which came into effect on 14 September 2015, the Issuer has registered the issuance of the Bonds with the NDRC and obtained a certificate from the NDRC on 7 April 2021 evidencing such registration. Pursuant to the requirements of the NDRC Circular, and any implementation rules as issued by the NDRC, the Issuer undertakes to (1) file or cause to be filed with the NDRC the requisite information and documents within the prescribed time period after the Issuer Date (the “NDRC Post-issue Filing”) as described in the Terms and Conditions, (2) complete the NDRC Post-issue Filing and provide such document(s) (if any) evidencing due filing with the NDRC within the prescribed timeframe pursuant to the Terms and Conditions. The Issuer undertakes that it will (i) within the prescribed time period after the Issue Date, register or cause to be registered with SAFE the Bonds pursuant to the Administrative Measures for Foreign Debt Registration (《外債登記管理辦法》) and its operating guidelines, effective as of 13 May 2013, and the Circular of the People’s Bank of China on Implementing Macro Prudential Management of Full-covered Cross-border Financing (《中國人民銀行關於全口徑跨境融資宏觀審慎管理有關事宜的通知》) and SAFE Operational Guideline on Capital Account (2020) (資本項目外匯業務操作指引) (2020) (the “Foreign Debt Registration”), (ii) use its best endeavours to complete the Foreign Debt Registration and obtain a registration record from SAFE on or before the Registration Deadline (as defined in the Terms and Conditions) and provide copies of relevant documents evidencing the Foreign Debt Registration within the required timeframes described in Condition 5(b) (Notification of Completion of the Foreign Debt Registration). The Bonds will constitute direct, unsubordinated, unconditional and unsecured obligations of the Issuer and shall at all times rank pari passu and without any preference among themselves. The payment obligations of the Issuer under the Bonds shall, save for such exceptions as may be provided by applicable law and regulations, at all times rank at least equally with all its other present and future unsecured and unsubordinated obligations. Unless previously redeemed, or purchased and cancelled, the Bonds will be redeemed at their principal amount on 26 August 2024 (the “Maturity Date”). The Bonds may be redeemed at the option of the Issuer in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days’ notice to the Bondholders (as defined in the Terms and Conditions) in writing to the Trustee and the Principal Paying Agent (which shall be irrevocable), at their principal amount (together with any interest accrued up to, but excluding, the date fixed for redemption), if the Issuer satisfies the Trustee immediately prior to giving such notice that (i) the Issuer has or will become obliged to pay Additional Tax Amounts (as defined in the Terms and Conditions) as a result of any change in, or amendment to, the laws or regulations of the PRC or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations (including but not limited to any decision by a court of competent jurisdiction), which change or amendment becomes effective on or after 23 August 2021, and (ii) such obligation cannot be avoided by the Issuer taking reasonable measures available to it, provided that no Tax Redemption Notice shall be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such Additional Tax Amounts were a payment in respect of the Bonds then due. Following the occurrence of a Relevant Event (as defined in the Terms and Conditions), the holder of any Bond will have the right, at such holder’s option, to require the Issuer to redeem all, but not some only, of that holder’s Bonds on the Put Settlement Date (as defined in the Terms and Conditions) at 100 per cent. (in the case of a redemption for a Change of Control or a No Registration Event) of their principal amount, together in each case with interest accrued up to, but excluding, the Put Settlement Date. See “Terms and Conditions of the Bonds – Redemption and Purchase”. For a more detailed description of the Bonds, see “Terms and Conditions of the Bonds” beginning on page 45. The Bonds will not be rated. The Bonds will be issued in the specified denomination of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof. Investing in the Bonds involves risks. See “Risk Factors” beginning on page 16 for a discussion of certain factors to be considered in connection with an investment in the Bonds. The Bonds and the Standby Letter of Credit have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the Bonds are being offered and sold only in offshore transactions outside the United States in reliance on Regulation S under the Securities Act. For a description of these and certain further restrictions on offers and sales of the Bonds, the Standby Letter of Credit and the distribution of this Offering Circular, see “Subscription and Sale”. The Bonds will be represented initially by interests in a global certificate (the “Global Certificate”) in registered form which will be registered in the name of a nominee of, and shall be deposited on or about the Issue Date, with, a common depositary for Euroclear Bank SA/NV (“Euroclear”) and Clearstream Banking S.A. (“Clearstream”). Beneficial interests in the Global Certificate will be shown on, and transfers thereof will be effected only through, records maintained by Euroclear and Clearstream. Except as described herein, certificates for Bonds will not be issued in exchange for beneficial interests in the Global Certificate. Lead Joint Global Coordinators Guotai Junan International Hua Xia Bank Co., Limited Hong Kong Branch Joint Global Coordinators, Joint Lead Managers and Joint Bookrunners Guotai Junan Hua Xia Bank Co., Limited Zhongtai BG Securities International Hong Kong Branch International (HK)

Offering Circular dated 23 August 2021 NOTICE TO INVESTORS

THIS OFFERING CIRCULAR DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE THE OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS OFFERING CIRCULAR NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES IMPLY THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE ISSUER OR ANY OF ITS SUBSIDIARIES (COLLECTIVELY, THE “GROUP”) OR THAT THE INFORMATION SET FORTH IN THIS OFFERING CIRCULAR IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.

This document includes particulars given in compliance with the Rules Governing the Listing of Securities on the SEHK for the purpose of giving information with regard to the Issuer and the Group. The Issuer accepts full responsibility for the accuracy of the information contained in this document and confirm, having made all reasonable enquiries, that to the best of its knowledge and belief there are no other facts the omission of which would make any statement herein misleading. Investors are advised to read and understand the contents of the Offering Circular before investing. If in doubt, investors should consult their advisers.

The Issuer accepts full responsibility for the accuracy of the information contained in this Offering Circular and confirms, having made all reasonable enquiries, that (i) this Offering Circular contains all information with respect to the Issuer, the Group and the Bonds and the Standby Letter of Credit which is material in the context of the issue and offering of the Bonds (including the information which is required by applicable laws and according to the particular nature of the Issuer, the Group, the Bonds and the Standby Letter of Credit and is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the Issuer and the Group and of the rights attaching to the Bonds and the Standby Letter of Credit), (ii) the statements contained in this Offering Circular relating to the Issuer, its affiliates, the Group, the Bonds and the Standby Letter of Credit and any other materials approval by the Issuer for use in connection with the offering of the Bonds relating to the Issuer and the Group are true and accurate and not misleading in all material respects, (iii) the opinions and intentions expressed in this Offering Circular are, honestly and reasonably held, have been reached after considering all relevant circumstances and are based on reasonable assumptions, (iv) there are no other facts in relation to the Issuer, the Group, the Bonds or the Standby Letter of Credit the omission of which would, in the context of the issue and offering of the Bonds, make any statement in this Offering Circular misleading in any material respect; (v) all reasonable enquiries have been made by the Issuer to ascertain such facts and to verify the accuracy of all such information and statements in this Offering Circular; (vi) the statistical, industry and market-related data and forward-looking statements included in this Offering Circular, are based on or derived or extracted from sources which the Issuer believes to be accurate and reliable in all material respects.

Notwithstanding the foregoing, the information included in this Offering Circular regarding the LC Bank is for information purposes only and is based on, or derived or extracted from, among other sources, publicly available information. The Issuer has taken reasonable care in the compilation and reproduction of the information. However, none of the Issuer, the Joint Lead Managers (as defined below), the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank and the Agents (in each case as defined herein) or their respective affiliates, directors, officers, employees, representatives, agents or advisers has independently verified such information. No representation or warranty, express or implied, is made or given by the Issuer, the Joint Lead Managers, the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank or the Agents or their respective affiliates, directors, officers, employees, representatives, agents or advisers as to the accuracy, completeness or sufficiency of such information. Accordingly, such information should not be unduly relied upon.

−i− This Offering Circular has been prepared by the Issuer solely for use in connection with the proposed offering of the Bonds and giving of the Standby Letter of Credit described in this Offering Circular. The distribution of this Offering Circular and the offering of the Bonds in certain jurisdictions may be restricted by law. Persons into whose possession this Offering Circular comes are required by the Issuer, Guotai Junan Securities (Hong Kong) Limited, Hua Xia Bank Co., Limited Hong Kong Branch, Zhongtai International Securities Limited and BG Securities (HK) Co., Limited (the “Joint Lead Managers”) to inform themselves about and to observe any such restrictions. No action is being taken to permit a public offering of the Bonds and giving of the Standby Letter of Credit or the distribution of this Offering Circular or any offering or publicity material relating to the Bonds in any jurisdiction where action would be required for such purposes. There are restrictions on the offer and sale of the Bonds and the circulation of documents relating thereto, in certain jurisdictions and to persons connected therewith. For a description of certain further restrictions on offers, sales and resales of the Bonds and distribution of this Offering Circular, see “Subscription and Sale”. By purchasing the Bonds, investors represent and agree to all of those provisions contained in that section of this Offering Circular. This Offering Circular is personal to each offeree and does not constitute an offer to any other person or to the public generally to subscribe for, or otherwise acquire, Bonds. Distribution of this Offering Circular to any other person other than the prospective investor and any person retained to advise such prospective investor with respect to its purchase is unauthorised. Each prospective investor, by accepting delivery of this Offering Circular, agrees to the foregoing and to make no photocopies of this Offering Circular or any documents referred to in this Offering Circular.

No person has been or is authorised to give any information or to make any representation not contained in or not consistent with this Offering Circular or any information supplied by the Issuer, the Group, the LC Bank or such other information as is in the public domain and, if given or made, such information or representation should not be relied upon as having been authorised by the Issuer, the Group, the LC Bank, the Joint Lead Managers, the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank or the Agents or their respective affiliates, directors, employees, agents, representatives, officers or advisers. Neither the delivery of this Offering Circular nor any offering, sale or delivery made in connection with the issue of the Bonds shall, under any circumstances, constitute a representation that there has been no change or development reasonably likely to involve a change in the affairs of the Issuer, the Group or the LC Bank or any of them since the date hereof or create any implication that the information contained herein is correct as at any date subsequent to the date hereof. This Offering Circular does not constitute an offer of, or an invitation by or on behalf of the Issuer, the Joint Lead Managers, the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank or the Agents or any of their respective affiliates, directors, employees, agents, representatives, officers or adviser to subscribe for or purchase the Bonds and may not be used for the purpose of an offer to, or a solicitation by, anyone in any jurisdiction or in any circumstances in which such offer or solicitation is not authorised or is unlawful.

None of the Joint Lead Managers, the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank or the Agents, or any person who controls any of them, or their respective directors, officers, employees, agents, representatives, advisers and affiliates has separately verified the information contained in this Offering Circular. None of the Joint Lead Managers, the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank or the Agents, or any person who controls any of them, or any director, officer, employee, agent, representative, adviser or affiliate of any such person, makes any representation, warranty or undertaking, express or implied, or accepts any responsibility or liability, with respect to the accuracy or completeness of any of the information contained in this Offering Circular or any information supplied in connection with the Bonds and the Standby Letter of Credit. Each person receiving this Offering Circular acknowledges that such person has not relied on the Joint Lead Managers, the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank or the Agents, or any person who controls any of them, or any of their respective directors, officers, employees, agents, representatives, adviser or affiliates in connection with its investigation of the accuracy of such information or its investment decision, and each such person must rely on its own examination of the Issuer, the Group, the LC Bank, the Standby Letter of Credit and the terms of the offering and the merits and risks involved in investing in the Bonds. See “Risk Factors” for a discussion of certain factors to be considered in connection with an investment in the Bonds.

−ii− To the fullest extent permitted by law, none of the Joint Lead Managers, the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank or the Agents, or any person who controls any of them, or any director, officer, employee, agent, representative, adviser or affiliate of any such person, accepts any responsibility for the contents of this Offering Circular or for any other statement made or purported to be made by a Joint Lead Manager, the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank or an Agent, or any person who controls any of them, or any director, officer, employee, agent, adviser, representative or affiliate of any such person or on its behalf, in connection with the Issuer, the Group, the LC Bank, the issue and offering of the Bonds or the giving of the Standby Letter of Credit. Each of the Joint Lead Managers, the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank and the Agents, and any person who controls any of them, and the directors, officers, employees, agents, representatives, advisers and affiliates of such persons accordingly disclaims all and any liability whether arising in tort or contract or otherwise which it might otherwise have in respect of this Offering Circular or any such statement. None of the Joint Lead Managers, the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank or the Agents, or any person who controls any of them, or any director, officer, employee, agent, representative, advisers or affiliate of any such person, undertakes to review the financial condition or affairs of the Issuer, the Group or the LC Bank during the life of the arrangements contemplated by this Offering Circular nor to advise any investor or potential investor in the Bonds of any information coming to the attention of the Joint Lead Managers, the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank or the Agents, or any person who controls any of them, or any director, officer, employee, agent, representative, advisers or affiliate of any such person.

This Offering Circular may not be used for the purpose of an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. This Offering Circular does not constitute an offer or an invitation to subscribe for or to purchase any Bonds, is not intended to provide the basis of any credit or other evaluation, and should not be considered as a recommendation by the Issuer, the Group, the LC Bank, the Joint Lead Managers, the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank, the Agents, or any person who controls any of them, or any of their respective affiliates, directors, employees, agents, representatives, officers or advisers that any recipient of this Offering Circular should subscribe for or purchase any Bonds. Each recipient of this Offering Circular shall be taken to have made its own investigation and appraisal of the condition (financial or otherwise) of the Issuer with its own tax, legal and business advisers as it deems necessary.

Singapore SFA Product Classification: In connection with Section 309B of the Securities and Futures Act (Chapter 289) of Singapore (the “SFA”) and the Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore (the “CMP Regulations 2018”), the Issuer has determined, and hereby notifies all relevant persons (as defined in Section 309A(1) of the SFA), that the Bonds are ‘prescribed capital markets products’ (as defined in the CMP Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

IN CONNECTION WITH THE ISSUE OF THE BONDS, ANY OF THE JOINT LEAD MANAGERS APPOINTED AND ACTING IN ITS CAPACITY AS STABILISATION MANAGER (THE “STABILISATION MANAGER”) (AND ANY PERSON ACTING ON ITS BEHALF) MAY OVER- ALLOT BONDS OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE BONDS AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT THE STABILISATION MANAGER(S) (OR ANY PERSON ACTING ON BEHALF OF ANY STABILISATION MANAGER) WILL UNDERTAKE STABILISATION ACTION. ANY STABILISATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE TERMS OF THE OFFER OF THE BONDS IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE DATE OF THE BONDS AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE BONDS. ANY STABILISATION ACTION OR OVER-ALLOTMENT MUST BE CONDUCTED BY THE RELEVANT STABILISATION MANAGER(S) (OR ANY PERSON ACTING ON BEHALF OF ANY STABILISATION MANAGER(S)) IN ACCORDANCE WITH ALL APPLICABLE LAWS AND RULES.

− iii − This Offering Circular is provided solely for the purpose of enabling the recipient to consider purchasing the Bonds. The investors or prospective investors should read this Offering Circular carefully before making a decision regarding whether or not to purchase the Bonds. This Offering Circular cannot be used for any other purpose and any information in this Offering Circular cannot be disclosed to any other person. This Offering Circular is personal to each prospective investor and does not constitute an offer to any other person or to the public generally to purchase or otherwise acquire the Bonds.

This Offering Circular summarises certain material documents and other information, and the Issuer, the LC Bank and the Joint Lead Managers refer the recipient of this Offering Circular to them for a more complete understanding of what is contained in this Offering Circular. None of the Issuer, the Group, the LC Bank, the Joint Lead Managers, the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank or the Agents, or any person who controls any of them, or any of their respective directors, officers, employees, agents, representatives, advisers or affiliates are making any representations regarding the legality of an investment in the Bonds under any law or regulation. The recipient of this Offering Circular should not consider any information in this Offering Circular to be legal, business or tax advice. Any investor or prospective investor should consult his/her/its own attorney, business adviser and tax adviser for legal, business and tax advice regarding an investment in the Bonds.

The contents of this Offering Circular have not been reviewed by any regulatory authority in the People’s Republic of China, Hong Kong or elsewhere. Investors are advised to exercise caution in relation to the offer. If any investor is in any doubt about any of the contents of this Offering Circular, that investor should obtain independent professional advice.

Industry and Market Data

Market data and certain industry forecasts used throughout this Offering Circular have been obtained based on, among other sources, internal surveys, market research, publicly available information and industry publications. Industry publications generally state that the information that they contain has been obtained from sources believed by the Issuer to be reliable and accurate but that the accuracy and completeness of that information is not guaranteed. Similarly, internal surveys, industry forecasts and market research, while believed to be reliable, have not been independently verified, and none of the Issuer, the LC Bank, the Joint Lead Managers, the Trustee, the Pre-funding Account Bank, the LC Proceeds Account Bank or the Agents or their respective affiliates, directors, employees, representatives, agents, officers or advisers makes any representation as to the correctness, accuracy or completeness of that information complied within or outside the PRC. In addition, third-party information providers may have obtained information from market participants and such information may not have been independently verified. Accordingly, such information should not be unduly relied upon.

Presentation of Financial Information

This Offering Circular contains the audited consolidated financial information of the Issuer as at and for the years ended 31 December 2018, 2019 and 2020 and the unaudited but reviewed consolidated financial information of the Issuer as at and for the three months ended 31 March 2020 and 2021.

The consolidated financial information of the Issuer as at and for the years ended 31 December 2018, 2019 and 2020 has been extracted from the Issuer’s consolidated financial statements as at and for the years ended 31 December 2019 and 2020 (the “Audited Financial Statements”). The consolidated financial information of the Issuer as at and for the three months ended 31 March 2020 and 2021 has been extracted from the Issuer’s unaudited but reviewed consolidated interim financial statements as at and for the three months ended 31 March 2021 (the “Interim Financial Statements”, together with the Audited Financial Statements, the “Historical Financial Statements”). The Historical Financial Statements were prepared and presented in accordance with the Accounting Standards for Business Enterprises in China (“PRC GAAP”). The Audited Financial Statements have been audited by RSM China CPA LLP (“RSM”), the Issuer’s independent auditor, in accordance with the Chinese Auditing Standards issued by the Ministry of Finance of the PRC (“MOF”).

−iv− The Interim Financial Statements have not been audited by the Issuer’s independent auditors. As a result, the Interim Financial Statements should not be relied upon by potential investors to provide the same quality of information associated with information that has been subject to an audit. Potential investors must exercise caution when using such data to evaluate the Issuer’s financial condition and results of operations. None of the Joint Lead Managers makes any representation or warranty, express or implied, regarding the sufficiency of the Interim Financial Statements for an assessment of, and potential investors must exercise caution when using such data to evaluate, the Issuer’s financial condition and results of operations. The Interim Financial Statements should not be taken as an indication of the expected financial condition and results of operations of the Issuer for the full financial year ending 31 December 2021.

PRC GAAP differs in certain respects from International Financial Reporting Standards (“IFRS”). For a discussion of certain differences between PRC GAAP and IFRS, see “Summary of Certain Differences Between PRC GAAP and IFRS”.

−v− CERTAIN TERMS AND CONVENTIONS AND CURRENCY PRESENTATION

In this Offering Circular, unless otherwise specified or the context otherwise requires, all references to “the Issuer”, “the Group”, “the company” refer to Guangxi Liuzhou Rail Transit Investment Development Group Co., Ltd. (廣西柳州市軌道交通投資發展集團有限公司), its predecessor entities and its subsidiaries; all references to “Liuzhou SASAC” are to the State-owned Assets Supervision and Administration Commission of Liuzhou City; all references to the “PRC”, “China” and “mainland China” are to the People’s Republic of China (excluding Hong Kong (as defined bellow), the Macau Special Administrative Region of the People’s Republic of China and Taiwan), all references to “SAFE” are to the State Administration of Foreign Exchange or its local branch, all reference to “PBOC” are to the People’s Bank of China, all reference to “sq.m” are to square metre, all reference to “mu” are to the traditional Chinese unit of area (畝), one mu is equivalent to approximately 666.67 sq.m., all references to the “United States” and “U.S.” are to the United States of America, all references to “Hong Kong” are to the Hong Kong Special Administrative Region of the People’s Republic of China, all references to “Renminbi”, “RMB” and “CNY” are to the lawful currency of the PRC, and all references to “U.S.$” and “U.S. dollars” are to the lawful currency of the United States of America.

Unless otherwise stated in this Offering Circular, all translations from Renminbi into U.S. dollars were made at the rate of RMB6.5518 to U.S.$1.00, the noon buying rate in New York City for cable transfers payable in Renminbi on 30 June 2021 as set forth in the weekly H.10 statistical release of the Board of Governors of the Federal Reserve System). All such translations in this Offering Circular are provided solely for investors’ convenience and no representation is made that the amounts referred to herein have been, could have been or could be converted into U.S. dollars or Renminbi, or vice versa, at any particular rate or at all. For further information relating to the exchange rates, see “Exchange Rate Information”.

Any discrepancies in the tables included herein between the listed amounts and the totals thereof are due to rounding.

In this Offering Circular, where information has been presented in thousands or millions of units, amounts may have been rounded up or down. Accordingly, totals of columns or rows of numbers in tables may not be equal to the apparent total of the individual items and actual numbers may differ from those contained herein due to rounding. References to information in billions of units are to the equivalent of a thousand million units.

The English names of the PRC nationals, entities, departments, facilities, laws, regulations, certificates, titles and the like are translations of their Chinese names and are included for identification purposes only. In the event of any inconsistency, the Chinese names shall prevail.

−vi− FORWARD-LOOKING STATEMENTS

The Issuer has made certain forward-looking statements in this Offering Circular. All statements other than statements of historical facts contained in this Offering Circular constitute “forward-looking statements”. Some of these statements can be identified by forward-looking terms, such as “anticipate”, “target”, “believe”, “can”, “would”, “could”, “estimate”, “expect”, “aim”, “intend”, “may”, “plan”, “will”, “would” or similar words. However, these words are not the exclusive means of identifying forward-looking statements. All statements regarding expected financial condition and results of operations, business plans and prospects are forward-looking statements. These forward-looking statements include but are not limited to statements as to the business strategy, revenue and profitability, planned projects and other matters as they relate to the Issuer, the Group or the LC Bank discussed in this Offering Circular regarding matters that are not historical fact. These forward-looking statements and any other projections contained in this Offering Circular (whether made by the Issuer, the Group or by any third party) involve known and unknown risks, including those disclosed under the caption “Risk Factors”, uncertainties and other factors that may cause the actual results, performance or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or other projections.

These forward-looking statements speak only as at the date of this Offering Circular. The Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward- looking statement contained herein to reflect any change in the Group’s expectations with regard thereto or any change of events, conditions or circumstances, on which any such statement was based.

The factors that could cause the actual results, performances and achievements of the Group to be materially different include, among others:

• general political and economic conditions, including those related to the PRC;

• any changes in the laws, rules and regulations of the central and local governments in the PRC and other relevant jurisdictions and the rules, regulations and policies of the relevant governmental authorities relating to all aspects of its business;

• its ability to successfully implement business plans and strategies;

• access and cost of capital and financing;

• its financial condition and performance;

• changes or volatility in interest rates, foreign exchange rates, equity prices or other rates or prices, including those pertaining to the PRC and the industry and markets in which it operates;

• various business opportunities that it may pursue;

• macroeconomic measures taken by the PRC government to manage economic growth; and

• other factors, including those discussed in “Risk Factors”.

Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to, those discussed in “Risk Factors” and elsewhere in this Offering Circular. The Issuer cautions investors not to place undue reliance on these forward-looking statements which reflect their managements’ view only as at the date of this Offering Circular.

Neither of the Issuer nor the Group undertakes any obligation to update or revise publicly any of the opinions or forward-looking statements expressed in this Offering Circular as a result of any new information, future events or otherwise.

− vii − TABLE OF CONTENTS

Page

SUMMARY ...... 1

THE ISSUE ...... 4

SUMMARY OF PAYMENT ARRANGEMENTS ON EACH SCHEDULED DUE DATE UNDER THE BONDS...... 10

SUMMARY FINANCIAL INFORMATION OF THE GROUP ...... 12

RISK FACTORS...... 16

TERMS AND CONDITIONS OF THE BONDS ...... 45

USE OF PROCEEDS ...... 69

CAPITALISATION AND INDEBTEDNESS ...... 70

DESCRIPTION OF HUA XIA BANK CO., LIMITED ...... 71

DESCRIPTION OF THE GROUP ...... 78

DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT ...... 102

PRC LAWS AND REGULATION ...... 105

EXCHANGE RATE INFORMATION...... 113

TAXATION ...... 114

SUMMARY OF PROVISIONS RELATING TO THE BONDS IN GLOBAL FORM ...... 117

SUBSCRIPTION AND SALE ...... 119

SUMMARY OF CERTAIN DIFFERENCES BETWEEN PRC GAAP AND IFRS ...... 123

GENERAL INFORMATION ...... 125

INDEX TO FINANCIAL STATEMENTS ...... F-1

APPENDIX A – FORM OF IRREVOCABLE STANDBY LETTER OF CREDIT ...... A-1

APPENDIX A-1 – FORM OF DEMAND ...... A-5

− viii − SUMMARY

The summary below is only intended to provide a limited overview of information described in more detail elsewhere in this Offering Circular. As it is a summary, it does not contain all of the information that may be important to investors and terms defined elsewhere in this Offering Circular shall have the same meanings when used in this summary. Prospective investors should therefore read this Offering Circular in its entirety, including the section entitled “Risk Factors”, before making an investment decision.

The Group is the leading state-owned integrated infrastructure developer in Liuzhou focusing on affordable housing and real estate development, primary land development, infrastructure construction, hotel operation, vehicle inspection and other ancillary businesses in Liuzhou. Directly wholly-owned by Liuzhou SASAC, the Group has, since its establishment in 2017, played an important role in implementing the Liuzhou Municipal Government’s blueprint for urban infrastructure construction, municipal development and rail transit construction in Liuzhou. The Group has leveraged financial and operational support provided by the Liuzhou Municipal Government, Liuzhou Finance Bureau and Liuzhou SASAC and the Group has established itself as one of the primary state-owned integrated infrastructure developers in Liuzhou and plays a key role in the urbanisation and rail transit construction of Liuzhou. As at the date of this Offering Circular, the Issuer has a registered capital of RMB1.0 billion.

As at 31 March 2021, the Group primarily operated its business through nine subsidiaries. For the years ended 31 December 2018, 2019 and 2020, and for the three months ended 31 March 2020 and 2021, respectively, the Group’s total operating income was approximately RMB1,062.8 million, RMB1,614.4 million, RMB2,600.6 million, RMB109.0 million and RMB486.0 million, respectively; and the Group’s operating profit for the same periods was approximately RMB159.5 million, RMB158.7 million, RMB353.3 million, RMB-29.5 million and RMB41.9 million, respectively. As at 31 December 2018, 2019 and 2020, and as at 31 March 2021, the Group had net assets of approximately RMB21.5 billion, RMB21.7 billion, RMB23.1 billion and RMB23.1 billion, respectively, and total assets of approximately RMB47.4 billion, RMB53.4 billion, RMB59.1 billion and RMB64.4 billion, respectively. The Group was supported by Liuzhou SASAC and the Liuzhou Municipal Government and the Group expanded its business rapidly across its principal business segments. Set forth below is an overview of the major business segments of the Group:

• Affordable housing and real estate development. The Group is one of the primary state-owned enterprises carrying out affordable housing and real estate development projects in Liuzhou. The Group is key to the implementation of the Liuzhou Municipal Government’s housing policies through the construction and development of affordable housing, including the redevelopment of shantytowns (棚戶區) and dangerous housing (危舊房). The Group has been engaged by the Liuzhou Municipal Government to undertake the construction and development of affordable housing in accordance with the Liuzhou Municipal Government’s annual affordable housing construction plan. The Group operates its affordable housing and real estate development business primarily through its wholly-owned subsidiary, Liuzhou Longjian Investment & Development Co., Ltd. (柳州市龍建投資發展有限責任公司). For the years ended 31 December 2018, 2019 and 2020, and for the three months ended 31 March 2020 and 2021, respectively, operating income generated from the Group’s affordable housing and real estate development business was approximately RMB241.3 million, RMB608.4 million, RMB336.8 million, RMB0.6 million and RMB2.4 million, respectively, representing approximately 22.7 per cent., 37.7 per cent., 13.0 per cent., 0.6 per cent., and 0.5 per cent., respectively, of the Group’s total operating income for the same periods.

−1− the years ended 31 December 2018, 2019 and 2020, and for the three months ended 31 March 2020 and 2021, respectively, operating income generated from the Group’s primary land development business was approximately RMB600.7 million, RMB728.2 million, RMB1,986.7 million, RMB54.4 million and RMB389.2 million, respectively, representing approximately 56.5 per cent., 45.1 per cent., 76.4 per cent., 49.9 per cent., and 80.1 per cent., respectively, of the Group’s total operating income for the same periods.

• Infrastructure construction. The Group undertakes infrastructure construction in Liuzhou through entering into agency agreements with property owners and government authorities. The Group’s infrastructure construction business primarily comprises the investment, development and construction of schools, transportation infrastructure, roads, and other public facilities. The Group mainly manages and operates its infrastructure construction business through Liuzhou Longjian Investment & Development Co., Ltd. (柳州市龍建投資發展有限責任公司). As at 31 March 2021, the Group had undertaken 20 key infrastructure construction projects, among which 17 projects have been completed with a total amount invested of approximately RMB2,484 million. For the years ended 31 December 2018, 2019 and 2020, and for the three months ended 31 March 2020 and 2021, respectively, operating income generated from the Group’s infrastructure construction business was approximately RMB9.2 million, RMB7.0 million, RMB7.3 million RMB1.1 million and RMB1.1 million, respectively, representing approximately 0.9 per cent., 0.4 per cent., 0.3 per cent., 1.0 per cent., and 0.2 per cent., respectively, of the Group’s total operating income for the same periods.

• Hotel operation. The Group’s hotel operation business primarily consists of the provision of hotel management, property management, catering services and entertainment services. The Group operates its hotel operation business through its wholly-owned subsidiary, Liuzhou Bishui Lotus Hotel Management Co., Ltd. (柳州碧水蓮花酒店管理有限公司). For the years ended 31 December 2018, 2019 and 2020, and the three months ended 31 March 2020 and 2021, operating income generated from the Group’s hotel operation business was approximately RMB49.8 million, RMB55.3 million, RMB47.0 million, RMB6.0 million and RMB9.8 million, respectively, representing approximately 4.7 per cent., 3.4 per cent., 1.8 per cent., 5.5 per cent. and 2.0 per cent., respectively, of the Group’s total operating income for the same periods.

• Vehicle inspection. The Group provides vehicle inspection services under its wholly-owned subsidiary, Liuzhou Ritong Industry Co., Ltd. (柳州市日通實業有限公司). For the years ended 31 December 2018, 2019 and 2020, and the three months ended 31 March 2020 and 2021, operating income generated from the Group’s vehicle inspection business was approximately RMB9.6 million, RMB8.7 million, RMB5.6 million, RMB0.9 million and RMB0.8 million, respectively, representing approximately 0.9 per cent., 0.5 per cent., 0.2 per cent., 0.9 per cent. and 0.2 per cent., respectively, of the Group’s total operating income for the same periods.

• Other businesses. The Group’s other businesses primarily include property leasing and others including consultation and sales of steels. For the years ended 31 December 2018, 2019 and 2020, and the three months ended 31 March 2020 and 2021, operating income generated from the Group’s other business was approximately RMB152.2 million, RMB206.8 million, RMB217.2 million, RMB45.9 million and RMB82.8 million, respectively, representing 14.3 per cent., 12.8 per cent., 8.4 per cent., 42.1 per cent. and 17.0 per cent., respectively, of the Group’s total operating income for the same periods.

−2− COMPETITIVE STRENGTHS

The Group believes that the following strengths are key to its consistent growth and enable the Group to compete successfully within the industries in which it operates:

• A leading state-owned enterprise for affordable housing construction and primary land development in Liuzhou

• Well-positioned to capitalize on the strategic location, economic growth and urbanisation of Liuzhou to achieve stable business growth

• Strong relationship with the Liuzhou Municipal Government and Liuzhou SASAC and various government support in the form of capital injections, subsidiaries and policies

• Diversified business model underpinned by stable financial performance

• Diversified funding channels to obtain sufficient capital for the Group’s business development

• Experienced senior management and sound corporate governance

BUSINESS STRATEGIES

The Group is determined to maintain its current competitive strengths and plans to implement the following business strategies in order to maintain constant business growth and further diversify its business portfolio:

• Speed up structural adjustment and transformation to form a three-level business pattern including core business, important business, and emerging business

• Continue to actively focus on primary land development and infrastructure construction and to support the urbanisation of Liuzhou

• Take full advantage of rail transit network development plans to develop resources along the rail transit network

• Continue to undertake affordable housing construction projects in Liuzhou

• Further transform and diversify its business model to create synergies among various business segments

• Continue to develop diversified financing channels to maintain well-capitalised growth

• Continue to strengthen management and internal control systems to improve business and cost efficiencies

−3− THE ISSUE

The following summary contains some basic information about the Bonds. Some of the terms described below are subject to important limitations and exceptions. Words and expressions defined in “Terms and Conditions of the Bonds” shall have the same meanings in this summary. For a more complete description of the terms and conditions of the Bonds, see “Terms and Conditions of the Bonds”.

Issuer ...... Guangxi Liuzhou Rail Transit Investment Development Group Co., Ltd. (廣西柳州市軌道交通投資發展集團有限公司)

LC Bank ...... HuaXiaBank Co., Limited Nanning Branch

Issue ...... U.S.$50,000,000 aggregate principal amount of 2.3 per cent. Credit Enhanced Bonds due 2024.

Issue Price...... 100percent. of the principal amount of the Bonds.

Form and Denomination ...... The Bonds will be issued in the specified denomination of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof.

Interest ...... TheBonds will bear interest on their outstanding principal amount from and including the Issue Date at the rate of 2.3 per cent. per annum, payable semi-annually in arrear in equal instalments of U.S.$11.5 per Calculation Amount (as defined below) on 26 February and 26 August in each year (each an “Interest Payment Date”), commencing on 26 February 2022.

Issue Date ...... 26August 2021.

Maturity Date ...... 26August 2024.

Use of Proceeds ...... Thenetproceeds from the offering of the Bonds will be used for projects and working capital. See “Use of Proceeds”.

Standby Letter of Credit ...... TheBonds will have the benefit of the Standby Letter of Credit in favour of the Trustee, on behalf of itself and the holders of the Bonds, issued by the LC Bank. The Standby Letter of Credit shall be drawable by the Trustee as beneficiary under the Standby Letter of Credit on behalf of itself and the holders of the Bonds upon the presentation of a demand by authenticated SWIFT (or by such other method of communication permitted under the Standby Letter of Credit) sent by or on behalf of the Trustee to the LC Bank in accordance with the Standby Letter of Credit (the “Demand”) stating that (i) the Issuer has failed to comply with Condition 4(b) in relation to pre-funding the amount that is required to be pre-funded under the Terms and Conditions and/or failed to provide the Required Confirmations (as defined below) in accordance with Condition 4(b), or (ii) an Event of Default (as defined in Condition 10) has occurred and the Trustee has given notice to the Issuer that the Bonds are immediately due and payable in accordance with Condition 10.

−4− Only one drawing under the Standby Letter of Credit is permitted.

Such drawing on the Standby Letter of Credit will be payable in U.S. dollars to or to the order of the Trustee at the time and to the account specified in the Demand presented to the LC Bank. Payment received by the Trustee in respect of the Demand will be deposited into the LC Proceeds Account.

The payment made under the Standby Letter of Credit in respect of any amount payable under the Terms and Conditions or in connection with the Bonds, the Trust Deed and/or the Agency Agreement shall, to the extent of the drawing paid to or to the order of the Trustee, satisfy the obligations of the Issuer in respect of such amount payable under the Terms and Conditions or in connection with the Bonds, the Trust Deed and/or the Agency Agreement.

The LC Bank’s liability under the Standby Letter of Credit shall be expressed and payable in U.S. dollars and shall not exceed U.S.$51,575,000. The Standby Letter of Credit expires at 6:00 p.m. (Hong Kong time) on 26 September 2024.

See “Terms and Conditions of the Bonds – Standby Letter of Credit and Pre-funding – Standby Letter of Credit”, and “Appendix A – Form of Irrevocable Standby Letter of Credit”.

Pre-funding ...... Inorder to provide for the payment of any amount in respect of the Bonds (other than the Relevant Amount (as defined in the Terms and Conditions)) as the same shall become due, the Issuer shall, in accordance with the Agency Agreement, by no later than 10:00 a.m. (London time) on the Business Day falling ten Business Days (the “Pre-funding Date”) prior to the due date for such payment under the Terms and Conditions:

(i) unconditionally pay or procure to be paid the Relevant Amount into the Pre-funding Account; and

(ii) deliver to the Trustee and the Principal Paying Agent by facsimile (x) a Payment and Solvency Certificate signed by any Authorised Signatory of the Issuer, and (y) a copy of the irrevocable payment instruction from the Issuer to the Pre-funding Account Bank requesting the Pre-funding Account Bank to pay the Relevant Amount which was paid into the Pre-funding Account on the Pre-funding Date in full to the Principal Paying Agent by no later than 10:00 a.m. (Hong Kong time) on the Business Day immediately preceding the due date for such payment (together, the “Required Confirmations”).

−5− The Pre-funding Account Bank shall notify the Trustee by 10:00 a.m. (London time) on the Business Day immediately following the Pre-funding Date upon the failure by the Issuer to pay the Relevant Amount into the Pre-funding Account in accordance with these Terms and Conditions. If the Relevant Amount has not been paid into the Pre-funding Account in full and the Pre-funding Account Bank has notified the Trustee of such failure, or the Trustee does not receive the Required Confirmations, in each case by 10:00 a.m. (London time) on the Business Day immediately following the Pre-funding Date (a “Pre-funding Failure”), the Trustee shall:

(A) send notice (the “Pre-funding Failure Notice”) to the Bondholders by the second Business Day immediately following the Pre-funding Date of (i) the Pre-funding Failure and (ii) the redemption of the Bonds in accordance with Condition 7(d) to occur as a result of the Pre-funding Failure; and

(B) by no later than 6:00 p.m. (Hong Kong time) on the second Business Day immediately following the Pre-funding Date issue a Demand to the LC Bank which shall be presented by the Trustee or on behalf of the Trustee in relation to the Standby Letter of Credit for the principal amount in respect of all of the Bonds then outstanding, together with interest accrued to, but excluding, the Mandatory Redemption Date (as defined in Condition 7(d)) and all fees, costs, expenses, indemnity payments and all other amounts payable by the Issuer under or in connection with the Bonds, the Agency Agreement, the Trust Deed and/or any other transaction document relating to the Bonds, provided that, in accordance with the Standby Letter of Credit, the Trustee need not physically present the Demand to the LC Bank and shall be entitled to submit the Demand by authenticated SWIFT (or, in certain limited circumstances set out in the Standby Letter of Credit, by way of such other means as permitted under the Standby Letter of Credit).

Following receipt by the LC Bank of such Demand by 6:00 p.m. (Hong Kong time) on a Business Day, the LC Bank shall by 10:00 a.m. (Hong Kong time) on the fourth Business Day immediately following such Business Day (or, if such Demand is received after 6:00 p.m. (Hong Kong time) on a Business Day, the fifth Business Day immediately following such Business Day), pay to or to the order of the Trustee the amount in U.S. dollars specified in the Demand to the LC Proceeds Account.

“Business Day” means a day (other than a Saturday or a Sunday or a public holiday) on which commercial banks and foreign exchange markets are open for business in Hong Kong, London, Beijing, and New York City.

See “Terms and Conditions of the Bonds – Standby Letter of Credit and Pre-funding – Pre-funding”, and “Appendix A – Form of Irrevocable Standby Letter of Credit”.

−6− Status of the Bonds ...... The Bonds constitute direct, unsubordinated, unconditional and unsecured obligations of the Issuer and shall at all times rank pari passu and without any preference among themselves. The payment obligations of the Issuer under the Bonds shall, save for such exceptions as may be provided by applicable law and regulations, at all times rank at least equally with all its other present and future unsecured and unsubordinated obligations.

Events of Default...... Upon the occurrence of certain events of default, as further described in “Terms and Conditions of the Bonds – Events of Default”, in respect of the Issuer and the LC Bank, the Trustee at its discretion may, and if so requested in writing by holders of at least 25 per cent. in aggregate principal amount of the Bonds then outstanding or if so directed by an Extraordinary Resolution, shall (provided in any such case that the Trustee shall have been first indemnified and/or secured and/or pre-funded to its satisfaction), give written notice to the Issuer that the Bonds are, and they shall immediately become, due and payable at their principal amount together (if applicable) with accrued but unpaid interest.

Cross-Acceleration...... TheBonds are subject to a Cross-Acceleration provision in relation to the Issuer or any of their respective Subsidiaries (as defined in Condition 10(a) and a cross-default in relation to the LC Bank or any of its Subsidiaries (as defined in Condition 10(b)) as further described in Condition 10(a)(iii) (Cross-Default) and Condition 10(b)(i) (Cross-Default) of the Terms and Conditions, respectively.

Taxation ...... Allpayments of principal, premium (if any) and interest by or on behalf of the Issuer in respect of the Bonds shall be made free and clear of, and withholding or deduction for or on account of, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by the PRC or any political subdivision or authority therein or thereof having power to tax, unless such withholding or deduction is required by law, as further described in Condition 9.

Where such withholding or deduction is made by the Issuer by or within the PRC at a rate up to and including the aggregate rate applicable on 23 August 2021 (the “Applicable Rate”), the Issuer will increase the amounts paid by it to the extent required, so that the net amount received by Bondholders equals the amounts which would otherwise have been receivable by them had no such withholding or deduction been required.

In the event that any such PRC deduction or withholding in excess of the Applicable Rate is required, the Issuer shall pay such additional amounts (“Additional Tax Amounts”) as will result in receipt by the Bondholders of such amounts as would have been received by them had no such withholding or deduction been required, except that no Additional Tax Amounts shall be payable in respect of any Bond. See “Terms and Conditions of the Bonds – Taxation”.

−7− Final Redemption ...... Unless previously redeemed, or purchased and cancelled, the Bonds will be redeemed at their principal amount on the Maturity Date. The Bonds may not be redeemed at the option of the Issuer other than redemption for tax reasons pursuant to Condition 7(b).

Redemption for Taxation The Bonds may be redeemed at the option of the Issuer in whole, Reasons ...... but not in part, at any time, on giving not less than 30 nor more than 60 days’ notice (a “Tax Redemption Notice”) to the Bondholders in accordance with Condition 17 and in writing to the Trustee and the Principal Paying Agent, at their principal amount (together with interest accrued up to, but excluding, the date fixed for redemption), if the Issuer satisfies the Trustee immediately prior to the giving of such notice that (i) the Issuer has or will become obliged to pay Additional Tax Amounts as provided or referred to in Condition 9 as a result of any change in, or amendment to, the laws or regulations of the PRC or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations (including but not limited to any decision by a court of competent jurisdiction), which change or amendment becomes effective on or after 23 August 2021, and (ii) such obligation cannot be avoided by the Issuer taking reasonable measures available to it, as further described in Condition 7(b). See “Terms and Conditions of the Bonds – Redemption and Purchase – Redemption for Taxation Reasons”.

Redemption for Relevant Event . . Following the occurrence of a Relevant Event, the holder of any Bond will have the right, at such holder’s option, to require the Issuer to redeem all, but not some only, of such holder’s Bonds on the Put Settlement Date (as defined in Condition 7(c)) at 100 per cent. of their principal amount, together with interest accrued up to, but excluding, the Put Settlement Date. See “Terms and Conditions of the Bonds – Redemption and Purchase – Redemption for Relevant Event”.

Mandatory Redemption upon The Bonds shall be redeemed at their principal amount on the Pre-funding Failure ...... Interest Payment Date immediately falling after the date the Pre-funding Failure Notice is given to the Bondholders in accordance with Condition 4(b) (the “Mandatory Redemption Date”), together with interest accrued up to, but excluding, the Mandatory Redemption Date, as further described in Condition 7(d).

−8− If the holder of any Bond shall have exercised its right to require the Issuer to redeem its Bond under Condition 7(c) and a Pre-funding Failure Notice is given to the Bondholders in accordance with Condition 4(b) as a result of the Pre-funding Failure relating to the amount payable pursuant to such redemption, such holder’s Bonds shall be redeemed in whole, but not in part, at their principal amount in accordance with Condition 7(d) on the Put Settlement Date, together with interest accrued up to, but excluding, such Put Settlement Date, provided that if such Pre-funding Failure occurs and a Pre-funding Failure Notice has been given or is given to the Bondholders in respect of a scheduled payment of principal or interest payable under Condition 6 or Condition 7(a), the Put Settlement Date shall be the Mandatory Redemption Date.

Clearing Systems ...... TheBonds will be evidenced by beneficial interests in the Global Certificate, which will be registered in the name of a nominee of, and deposited on the Issue Date with, a common depositary for Euroclear and Clearstream. Beneficial interests in the Global Certificate will be shown on and transfers whereof will be effected only through records maintained by Euroclear and Clearstream. Except as described herein, certificates for the Bonds will not be issued in exchange for beneficial interests in the Global Certificate.

ISIN ...... XS2378352558.

Common Code ...... 237835255.

Legal Entity Identifier...... 655600QA3TLAEUYJE442.

Governing Law and Jurisdiction. . English law.

Trustee ...... TheBank of New York Mellon, London Branch.

Principal Paying Agent ...... TheBank of New York Mellon, London Branch.

Registrar and Transfer Agent . . . The Bank of New York Mellon SA/NV, Dublin Branch.

Pre-funding Account Bank and The Bank of New York Mellon, London Branch. LC Proceeds Account Bank ...

Listing ...... Application will be made to the SEHK for the listing of, and permission to deal in, the Bonds by way of debt issues to Professional Investors only.

Selling Restrictions ...... TheBonds will not be registered under the Securities Act or under any state securities laws of the United States and will be subject to customary restrictions on transfer and resale. See “Subscription and Sale”.

−9− SUMMARY OF PAYMENT ARRANGEMENTS ON EACH SCHEDULED DUE DATE UNDER THE BONDS

The following diagram sets forth a summary of the pre-funding arrangements under the Bonds and the drawing arrangements in respect of the Standby Letter of Credit. The following diagram is not intended to be comprehensive. This diagram should be read in conjunction with “Terms and Conditions of the Bonds”, the Trust Deed, the Agency Agreement referred therein and the Standby Letter of Credit. Words and expressions defined in the “Terms and Conditions of the Bonds” shall have the same meaning in this summary.

By 10:00 a.m. (London time) By 10:00 a.m. (Hong Kong time) The Issuer shall • If the Demand is received by the LC Bank before 6:00 p.m. (Hong Kong time) on the date of the Demand, the LC Bank is to pay the amount of the Demand into the LC • unconditionally pay or procure to be By 10:00 a.m. (Hong Kong time) Before close of business Proceeds Account. (Hong Kong time) paid in clear, freely transferrable • The Pre-funding Account Bank is to funds the Relevant Amount into the By 10:00 a.m. (London time) pay the Relevant Amount to the • On this due date, the Pre-funding Account; • The LC Proceeds Account Bank to notify the Trustee of any amount received from Principal Paying Agent. Principal Paying Agent • (1) is to pay the amounts deliver the Required Confirmations the LC Bank in the LC Proceeds Account. OR to the Trustee and the Principal due on behalf of the Paying Agent by facsimile by no By 6:00 p.m. (Hong Kong time) • The LC Proceeds Account Bank is to Issuer, whether received from the Pre-funding later than this Business Day. • The Trustee is to instruct the LC Proceeds Account Bank to confirm to the Principal pay the amount of the Demand to the Account or the LC Paying Agent that the proceeds of the Demand will be paid to the Principal Paying Principal Paying Agent. Proceeds Account Agent by 10:00 a.m. (London time) on the Business Day preceding the due date for −10− the payment.

T-10 Business Days T-9 Business Days T-5 Business Days T-4 Business Days T-1 Business Days T Bond Pre-funding Date Pre-funding Failure Notification Standby Standby Letter of Credit Transfer Date Standby Letter of Credit Payment to Principal Payment Date Letter of Credit Demand Date Confirmation to Principal Paying Agent Transfer Date Paying Agent By 10:00 a.m. (London time): By 10:00 a.m. (Hong Kong time) • If the Relevant Amount has been received into the Pre-funding Account, the Pre-funding • The LC Bank to pay to or to the order of the Trustee the amount of the Demand to the LC Account Bank will confirm receipt of to each of the Trustee and the Principal Paying Proceeds Account following receipt by the Demands if the Demand is received after 6:00 Agent(2). p.m. (Hong Kong time) on the date of the Demand. OR On the Business Day immediately following the date payment is due to be made by the LC Bank If the Relevant Amount has not been paid into the Pre-funding Account in full, or the Trustee does not receive the Required Confirmations (each event, a Pre-funding“ Failure”), the By 10:00 a.m. (London time) Trustee shall give the Pre-funding Failure Notice to the Bondholders of (a) the Pre-funding • Failure and (b) the redemption of the Bonds as a result of the Pre-funding Failure. The LC Proceeds Account Bank to notify the Trustee of any amount received from the LC Bank in the LC Proceeds Account. By 6:00 p.m. (Hong Kong time): By 6:00 p.m. (Hong Kong time) (3) The Trustee shall issue a Demand to the LC Bank (and promptly notify the Principal Paying • Agent of the making of such Demand). The Trustee is to instruct the LC Proceeds Account Bank to confirm to the Principal Paying Agent that the proceeds of the Demand will be paid to the Principal Paying Agent by 10:00 a.m. (London time) on the Business Day preceding the due date for the payment. Notes:

(1) The Required Confirmations consist of: (x) a Payment and Solvency Certificate signed by any Authorised Signatory of the Issuer; and (y) a copy of the irrevocable payment instruction setting forth the request from the Issuer to the Pre-funding Account Bank requesting the Pre-funding Account Bank to pay the Relevant Amount which was paid into the Pre-funding Account on the Pre-funding Date in full to the Principal Paying Agent by no later than 10:00 a.m. (London time) on the Business Day immediately preceding the due date for such payment.

(2) The confirmation of receipt or notification of non-receipt, as the case may be, from the Pre-funding Account Bank to the Trustee and the Principal Paying Agent shall be by way of authenticated SWIFT or other means of communication as the Principal Paying Agent may agree with the Pre-funding Account Bank.

(3) The Trustee need not physically present the Demand under the Standby Letter of Credit to the LC Bank and shall be entitled to draw on the Standby Letter of Credit by way of a Demand by authenticated SWIFT. −11− SUMMARY FINANCIAL INFORMATION OF THE GROUP

The following tables set forth the Issuer’s summary consolidated financial information as at and for the periods indicated.

The summary audited consolidated financial information as at and for the years ended 31 December 2018, 2019 and 2020 and the three months ended 31 March 2020 and 2021 set forth below is extracted from the Historical Financial Statements, which have been prepared and presented in accordance with PRC GAAP. The Audited Financial Statements have been audited by, and the Interim Financial Statements have been reviewed by RSM, in accordance with the Chinese Auditing Standards issued by MOF.

The Interim Financial Statements have not been audited by the independent auditors. As a result, the Interim Financial Statements should not be relied upon by potential investors to provide the same quality of information associated with information that has been subject to an audit. Potential investors must exercise caution when using such data to evaluate the financial condition and results of operations of the Group. The Interim Financial Statements should not be taken as an indication of the expected financial condition and results of operations and prospect of the Group for the full financial year ending 31 December 2021. PRC GAAP differs in certain respects from IFRS. For a discussion of certain differences between PRC GAAP and IFRS, see “Summary of Certain Differences Between PRC GAAP and IFRS”.

The information set out below should be read in conjunction with, and is qualified in its entirety by reference to, the Historical Financial Statements and, including the notes thereto, included elsewhere in this Offering Circular.

SUMMARY CONSOLIDATED INCOME STATEMENT DATA

For the three months Year ended 31 December ended 31 March 2018 2019 2020 2020 2021 (Audited) (Audited) (Audited) (Reviewed) (Reviewed) (RMB) (RMB) (RMB) (RMB) (RMB)

I. Total Operating Income ...... 1,062,834,377.17 1,614,350,548.29 2,600,621,548.35 108,987,620.51 486,042,190.47 Include: Operating Income ...... 1,062,834,377.17 1,614,350,548.29 2,600,621,548.35 108,987,620.51 486,042,190.47 II. Total Operating Cost ...... 939,826,173.53 1,475,972,475.15 2,284,119,607.26 140,365,956.75 433,586,582.39 Including: Operating costs Operating costs ..... 699,457,424.69 1,047,547,119.91 1,806,579,999.80 54,050,644.02 315,877,721.30 Taxes and surcharges ...... 23,791,711.68 68,993,119.73 46,823,710.53 811,536.32 9,087,943.73 Sales expenses ...... 3,164,367.13 3,606,637.73 4,610,710.61 4,752,463.82 5,008,657.64 Administrative expenses ...... 63,112,858.47 70,860,992.52 91,622,418.82 15,950,615.36 22,590,424.42 Research and development costs ...... ––––– Finance expenses ...... 150,299,811.56 284,964,605.26 334,482,767.50 64,800,697.23 81,021,835.30 Including: Interest expenses...... 151,153,665.65 292,267,071.40 340,240,127.33 66,081,449.59 82,493,099.24 Interest income ...... 1,059,053.78 7,622,533.27 5,982,868.33 1,327,400.07 1,538,517.44 Add: Other income ...... 32,668,233.72 1,538,828.04 6,863,273.74 – – Investment income (“-” denotes losses) ...... 5,322,321.61 20,088,819.16 31,926,776.58 1,619,893.23 113,732.52 Including: Share of profits in associates and joint ventures ...... (1,034,832.44) (95,716.77) 2,706,776.58 – (9,746,647.53) Gains from changes in fair value (“-” denotes losses)...... ––––– Impairment loss of credit ...... ––––(1,000,815.43) Asset Impairment losses (“-” denotes losses) .... (1,407,353.40) (1,401,160.63) (2,069,383.69) 285,696.29 – Gain on disposal sf assets (“-” denotes losses) . . . (69,940.02) 69,830.48 74,772.87 – – III. Profit from operations (“-” denotes losses) . . 159,521,465.55 158,674,390.19 353,297,380.59 (29,472,746.72) 41,821,877.64 Add: Non-operating income...... 21,399.63 15,392.43 779,405.00 5.00 42,790.34 Less: Non-operating expenses...... 327,026.83 328,490.70 2,790,177.75 1,341,071.90 –

−12− For the three months Year ended 31 December ended 31 March 2018 2019 2020 2020 2021 (Audited) (Audited) (Audited) (Reviewed) (Reviewed) (RMB) (RMB) (RMB) (RMB) (RMB)

IV. Profit before tax (“-” denotes losses) ..... 159,215,838.35 158,361,291.92 351,286,607.84 (30,813,813.62) 41,864,667.98 Less: Income taxes ...... 55,160,081.95 75,971,251.90 132,047,630.40 1,922,291.95 24,379,795.13 V. Net profit for the year (“-” denotes losses) . . 104,055,756.40 82,390,040.02 219,238,977.44 (32,736,105.57) 17,484,872.85 (1) Classified as business continuity ...... 1. Net profit of Going concern (“-” denotes losses)...... 104,055,756.40 82,390,040.02 219,238,977.44 (32,071,522.07) 17,765,667.71 2. Net profit of discontinuing operation (“-” denotes losses)...... – – – (664,583.50) (280,794.86) (2) Classified as attribution of the ownership .... ––––– 1. Profit attributable to owners of the parent (“-” denotes losses)...... 103,888,909.81 83,151,625.21 222,090,111.31 (32,736,105.57) 17,484,872.85 2. *Minority Interests (“-” denotes losses) ..... 166,846.59 (761,585.19) (2,851,133.87) – – VI. Net of tax from other comprehensive income ...... 109,138.63 (109,138.63) – – – Net of tax from other comprehensive income attributable to owners of the parent...... 99,217.93 (99,217.93) – – – 1. Other comprehensive income cannot reclassified into the profit and loss ...... ––––– (1) Remeasure the variation of defined benefit plans ...... ––––– (2) Other comprehensive income that cannot be classified into profit and loss under equity method ...... ––––– 2. Other comprehensive income that will be reclassified into the profit and loss ...... 99,217.93 (99,217.93) – – – (1) Other comprehensive income that will be classified into profit and loss under equity method ...... ––––– (2) Changes in fair value through profit and loss of available-for-sale financial assets ...... 99,217.93 (99,217.93) – – – (3) Held-to-maturity investment reclassified into available-for-sale financial assets ...... ––––– (4) Effective part of cash-flow hedge profit and loss ...... ––––– (5) Currency translation differences in respect of foreign operations ...... ––––– (6) the fair value is greater than the carrying amount at the date when she owner-occupied property or inventories transfer to the investment property measured at fair value...... ––––– Net of tax front ether comprehensive income attributable to minority ...... 9,920.70 (9,920.70) – – – VII. Total comprehensive income ...... 104,164,895.03 82,280,901.39 219,238,977.44 (32,736,105.57) 17,484,872.85 Total comprehensive income attributable to shareholders of the parent ...... 103,988,127.74 83,052,407.28 222,090,111.31 (32,071,522.07) 17,765,667.71 Total comprehensive income attributable to minority interests ...... 176,767.29 (771,505.89) (2,851,133.87) (664,583.50) (280,794.86) VIII. Earnings per share ...... ––––– Basic earnings per share (one yuan per share) . . . ––––– Diluted earnings per share (one yuan per share) . . –––––

−13− SUMMARY CONSOLIDATED BALANCE SHEET DATA

As at 31 December As at 31 March 2018 2019 2020 2021 (Audited) (Audited) (Audited) (Reviewed) (RMB) (RMB) (RMB) (RMB)

Current assets: Currency Funds ...... 5,804,670,232.77 4,363,404,667.47 2,359,241,599.60 2,721,946,573.87 Financial assets at fair value through profit or loss ...... –––– Derivative financial assets...... –––– Notes receivable ...... – – 6,000,000.00 8,182,012.78 Accounts receivable ...... 142,940,657.64 273,169,989.62 22,437,984.86 27,635,822.80 Prepayments...... 753,013,304.80 269,140,689.85 31,061,507.10 27,114,045.83 Other receivables ...... 86,597,217.48 58,522,875.86 87,383,533.49 155,742,194.53 Dividend receivable ...... – – – 114,887,850.96 Inventories ...... 25,916,055,210.33 27,724,613,734.69 28,261,228,218.90 28,583,993,232.82 Assets classified as held for sale ...... –––– Non-current assets due within one year ..... –––– Other current assets ...... 303,504,081.00 1,418,009,456.43 1,759,540,720.43 2,609,282,616.54

Total current assets...... 33,006,780,704.02 34,106,861,413.92 32,526,893,564.38 34,133,896,499.17

Non-current assets: Debt investments ...... – – – 2,303,040,000.00 Available-for-sale financial assets ...... 1,891,491,113.85 2,418,826,712.64 2,298,682,911.47 – Held-to-maturity investments ...... –––– Long-term receivables ...... 3,486,800,000.00 3,606,326,439.78 3,768,793,686.43 3,788,949,229.52 Long-term equity investments...... 36,369,084.53 150,054,283.23 496,242,541.63 1,030,495,894.10 Other equity instrument Investments ...... – – – 1,424,405,016.74 Investment property ...... 192,456,306.33 188,363,465.44 254,785,045.44 252,565,872.04 Fixed assets ...... 1,413,992,269.72 1,446,623,748.94 2,724,293,952.55 2,707,170,385.85 Construction in progress...... 2,921,740,678.52 5,770,827,113.56 9,315,714,498.68 10,810,856,331.86 Productive assets ...... –––– Oil and gas assets ...... –––– Intangible assets ...... 1,067,737,243.23 1,162,218,774.16 1,307,084,956.70 1,298,317,185.22 Development costs ...... –––– Goodwill...... –––– Long-term deferred expenses ...... 19,870,337.12 17,114,620.15 11,133,530.22 9,851,613.52 Deferred tax assets ...... 884,332.81 807,715.47 1,296,731.77 1,443,741.96

Other non-current assets ...... 3,338,039,678.58 4,539,037,067.40 6,380,677,163.62 6,609,993,484.06

Total non-current assets ...... 14,369,381,044.69 19,300,199,940.77 26,558,705,018.51 30,237,088,754.87

Total assets ...... 47,376,161,748.71 53,407,061,354.69 59,085,598,582.89 64,370,985,254.04

Current liabilities: Short-term loans ...... 4,169,320.00 312,743,933.33 350,000,000.00 549,900,000.00 Financial liabilities at fair value through profit or loss ...... –––– Derivative financial liabilities...... –––– Notes payable ...... 9,719,800.00 19,657,960.48 229,971,441.64 213,933,446.92 Accounts payable...... 464,242,235.61 493,228,914.12 742,766,594.59 1,405,090,794.31 Advances from customers ...... 725,810,722.50 841,313,677.68 1,430,126,306.10 – Contractual Liabilities ...... – – – 3,553,726,730.08

−14− As at 31 December As at 31 March 2018 2019 2020 2021 (Audited) (Audited) (Audited) (Reviewed) (RMB) (RMB) (RMB) (RMB)

Employee benefits payable ...... 12,239,417.58 9,980,760.73 8,388,051.34 7,738,176.94 Taxes payable ...... 986,332,633.51 1,029,647,646.50 1,122,885,670.44 1,151,228,500.92 Other payable ...... 305,984,254.44 359,179,272.97 443,903,224.69 507,460,703.94 Liabilities classified as held for sale ...... –––– Dividend payables ...... –––– Non-current liabilities due within one year . . . 472,500,000.00 1,763,685,247.43 3,462,301,924.56 1,256,368,243.39 Other current liabilities ...... – 38,992,099.00 696,542,140.27 2,803,162,225.57

Total current liabilities...... 2,980,998,383.64 4,868,429,512.24 8,486,885,353.63 11,448,608,822.07

Non-current liabilities: Long-term loans ...... 5,996,200,000.00 6,741,447,920.00 8,928,000,000.00 9,364,000,000.00 Bonds payable ...... 6,316,083,102.52 8,851,150,418.86 7,835,040,587.70 9,608,157,589.57 Including: preference share perpetual bond . . . –––– Long-term payables ...... 1,307,880,300.00 2,044,878,917.65 1,484,190,131.87 1,581,366,193.39 Long-term Salaries payable ...... –––– Provisions ...... –––– Deferred income ...... 677,000,000.00 736,298,195.66 744,781,483.97 744,666,750.44 Deferred tax liabilities ...... 36,379.55 – – – Other non-current liabilities...... 8,618,970,000.00 8,489,130,000.00 8,520,030,000.00 8,520,030,000.00

Total non-current liabilities ...... 22,916,169,782.07 26,862,905,452.17 27,512,042,203.54 29,818,220,533.40

Total liabilities ...... 25,897,168,165.71 31,731,334,964.41 35,998,927,557.17 41,266,829,355.47

Shareholders’ equity: Share capital ...... 1,000,000,000.00 1,000,000,000.00 1,000,000,000.00 1,000,000,000.00 Other equity instruments ...... –––– Including: preferred shares ...... –––– perpetual bond ...... –––– Capital reserves...... 20,207,333,599.80 20,294,790,080.37 21,546,190,080.37 21,546,190,080.37 Less: Treasury shares ...... –––– Other comprehensive income ...... 99,217.93 – – – Specific reserve...... –––– Surplus reserves ...... 114,352.60 114,352.60 114,352.60 114,352.60 Retained earnings...... 219,631,863.72 294,778,914.25 498,421,894.90 516,187,562.61 Total shareholders equity attributable to the parent ...... 21,427,179,034.05 21,589,683,347.22 23,044,726,327.87 23,062,491,995.58 *Minority interest ...... 51,814,548.95 86,043,043.06 41,944,697.85 41,663,902.99

Total shareholders equity ...... 21,478,993,583.00 21,675,726,390.28 23,086,671,025.72 23,104,155,098.37

Total liabilities and shareholders equity ..... 47,376,161,748.71 53,407,061,354.69 59,085,598,582.89 64,370,985,254.04

−15− RISK FACTORS

Prior to making an investment decision, prospective investors should carefully consider the following risk factors, along with the other matters set out in this Offering Circular. PRC laws and regulations may differ from the laws and regulations in other countries. Additional risks not described below or not currently known to the Group or that it currently deems immaterial may also adversely affect its business, financial condition or results of operations or the value of the Bonds. The Group believes that the risk factors described below represent the principal risks inherent in investing in the Bonds, but its inability to pay interest, principal or other amounts on or in connection with any Bonds may occur for reasons which may not be considered as significant risks by the Group based on information currently available to the Group or which the Group may not currently be able to anticipate. All of these factors are contingencies which may or may not occur and the Group is not in a position to express a view on the likelihood of any such contingency occurring.

The Group makes no representation that the statements below regarding the risk factors of holding any Bonds are exhaustive. Prospective investors should also read the detailed information set out elsewhere in this Offering Circular and reach their own views prior to making any investment decision.

This Offering Circular also contains forward-looking statements that involve risks and uncertainties. The Group’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the considerations described below and elsewhere in this Offering Circular.

RISKS RELATING TO THE BUSINESS OF THE GROUP

The Group’s business is heavily dependent on the level of economic development in Liuzhou, Guangxi Zhuang Autonomous Region, the PRC.

The Group operates its business exclusively in Liuzhou of the Guangxi Zhuang Autonomous Region (“Guangxi”) in the PRC. Therefore, the Group’s business, financial condition, results of operations and prospects have been and will continue to be heavily dependent on the level of economic development in Liuzhou, Guangxi, the PRC.

Although the economy of the PRC experienced rapid growth in the past 30 years, there has been a slowdown in the growth of the PRC’s gross domestic product (“GDP”) since the second half of 2013 that has raised market concerns that the historic rapid growth of the economy of the PRC may not be sustainable. According to the National Bureau of Statistics of the PRC, growth rate of China’s GDP for the year of 2020 slowed down to 2.3 per cent. on a year-on-year basis compared to the growth rate of 6.1 per cent. for the year of 2019. The national economic condition of the PRC has a material effect on the performance of regional economies in the PRC. According to the Guangxi Zhuang Autonomous Region Statistics Bureau and the Liuzhou Bureau of Statistics, Guangxi’s GDP increased from approximately RMB1,445.0 billion in 2013 to approximately RMB2,215.7 billion in 2020, and Liuzhou’s GDP increased from approximately RMB202.0 billion in 2013 to approximately RMB317.7 billion in 2020. These changes were generally in line with the change in the PRC’s GDP growth rate during the same period. However, in line with and as a result of the deterioration of China’s macroeconomic conditions, the growth in fixed asset investment in Guangxi and Liuzhou also slowed down over the same period.

The future prospects of the economy of the PRC, Guangxi and Liuzhou depend on many different factors, most of which are beyond the Group’s control. It is uncertain how the economic condition and future development in Guangxi and Liuzhou will be affected by the slowdown in the growth of the PRC’s economy. The economies of Guangxi and Liuzhou may not continue to grow at historical growth rates. Continued slowdown in the economic growth in Guangxi or Liuzhou may affect the fiscal income and financial condition of the Liuzhou Municipal Government as well as its plans and budgets for urban construction and development. This may in turn decrease demand for the Group’s business and adversely affect the Group’s business, financial condition, results of operations and prospects.

−16− The Group’s business and prospects to a large extent depend upon the spending of the Liuzhou Municipal Government on infrastructure development and fixed asset investments.

The Group is tasked to implement the Liuzhou Municipal Government’s plans to develop Liuzhou, and the Group’s business and prospects are heavily affected by the spending of the Liuzhou Municipal Government on infrastructure development and fixed asset investments. The Group’s operating income from its construction projects is primarily derived from the construction fees paid by the Liuzhou Municipal Government and its controlled entities.

There are many factors affecting the amount, time and priority of the Liuzhou Municipal Government’s spending on infrastructure development and fixed asset investments. Such factors include national and regional policies affecting the development of different industries and fiscal and monetary policies. Government spending is also affected by government income and the general economic conditions in the PRC, Guangxi and Liuzhou. Any slowdown in the economic growth in the PRC, Guangxi and Liuzhou may adversely affect the financial condition and fiscal income of the Liuzhou Municipal Government, which may in turn cause the Liuzhou Municipal Government to reduce its spending on infrastructure development and fixed asset investments. See “Risks Relating to the PRC – China has experienced a slowdown in its economic development and the future performance of China’s economy is uncertain”. If the Liuzhou Municipal Government decreases its spending on infrastructure development and investment in fixed assets, the Group’s business, financial condition, results of operations and prospects may be materially and adversely affected.

The Liuzhou Municipal Government can exert influence on the Group that may not be in the Group’s best interest.

The Group is directly wholly-owned by Liuzhou SASAC which has the power to appoint, and has appointed, the Group’s supervisor. The Liuzhou Municipal Government, furthermore has the power to appoint, and has appointed, the Group’s senior management. As such, the Liuzhou Municipal Government is able to significantly influence the Group’s major business decisions and strategies, including the scope of its activities, investment decisions and dividend policy. The Liuzhou Municipal Government may take actions that are not in the Group’s best interests or that may not maximise the Group’s profits. For example, the Liuzhou Municipal Government could use its ability to influence the Group’s business and strategy in a manner beneficial to Guangxi as a whole, but which may not necessarily be in the Group’s best interests. The Liuzhou Municipal Government could also change its policies, plans, preferences, views, expectations, projections, forecasts and opinions as a result of changes in the PRC’s economic, political and social environment and growth projections, and any such changes may have a material effect on the Group’s business and prospects. In addition, any amendments, modifications or repeals of existing policies of the Liuzhou Municipal Government, if adverse to the Group, could have a material adverse effect on the Group’s business, financial condition, results of operations and prospects.

The Group faces risks associated with contracting with the Liuzhou Municipal Government and other public entities.

A majority of the Group’s business activities are conducted with the Liuzhou Municipal Government and its controlled entities, and the Liuzhou Municipal Government has in previous years provided financial subsidies to support the Group’s construction projects. In 2020, the Group received government grants and subsidies of approximately RMB18.1 million from the Liuzhou Municipal Government for its affordable housing and real estate development projects. In 2018, the Group received government grants and subsidies of approximately RMB677.0 million from the Liuzhou Municipal Government for its urban rail transit construction. The Group is exposed to certain inherent risks relating to dealing with public bodies, including the Liuzhou Municipal Government.

Although the Issuer believes that the Group currently maintains close working relationships with those governmental authorities and entities relevant to its businesses, these relationships may not continue. Local governments and their controlled entities may (i) have economic or business interests or consideration that are inconsistent with the Group’s; (ii) take actions contrary to the Group’s requests,

−17− policies or objectives; (iii) be unable or unwilling to fulfil their obligations; (iv) have financial difficulties; or (v) dispute certain contractual terms or other matters. If there are any material disagreements between the Group and these local governments or any of their controlled entities, the Group may not be able to successfully resolve them in a timely manner, and payments from the public bodies may be delayed as a result. Any of these adverse consequence associated with contracting with local governments and governmental entities could materially and adversely affect the Group’s business, financial condition, results of operations and prospects.

PRC regulations on the administration of the financing platforms of local governments may have a material impact on the Group’s business and sources of financing.

Various PRC government entities maintain and enforce regulations related to local government financing vehicles (“LGFV”). See “PRC Regulations – Regulations on the Administration of the Financing Platforms of Local Governments.” According to the “Guidance for Banking and Insurance Institutions to Further Improve the Prevention and Resolution of Hidden Debt Risks of Local Governments” issued by the China Banking and Insurance Regulatory Commission in 2021 (“Circular 15”). Before providing financing to clients related to local governments, banks and insurance institutions should consult the Ministry of Finance’s monitoring platform for financing platform company debts and medium and long-term expenditure matters (hereinafter referred to as “monitoring platform”) and implement classification management based on the query results. For customers who are not involved in local government hidden debts, banks and insurance institutions should implement the policy requirements of preventing and resolving the risk of local government hidden debts, and grant credit in accordance with market-oriented principles and in compliance with the law to prevent new local government hidden debts. For customers who undertake local government hidden debts, banks and insurance institutions should also comply with the following requirements: First, they should not provide new financing in the form of working capital loans or working capital loans. Second, they shall not provide supporting financing for their participation in local government special bond projects. As of the date of this Offering Circular, the Issuer is not on the list of LGFV maintained by CBRC or its successor CBIRC. However, other government entities, including MOF, may from time to time interpret relevant laws and regulations differently based on their own interpretation of the specific activities engaged in by enterprises such as the Group. There can be no assurance that certain regulations intended to apply to LGFV do not or will not apply to us or that such regulations will not be retrospectively applied to us, any of which could have a material impact on the Group’s business, financial condition, results of operations and prospects.

PRC regulations on the administration of local government debts will continue to impact the Group’s financing model and business model.

To strengthen the management of financing vehicles of China’s local governments and to manage the risks relating to China’s local government debt, the State Council of the PRC issued the Notice on Strengthening Management of Financing Platform of Local Government (國務院關於加強地方政府融資平臺公司管理有關問題的通知)(“Circular 19”) in June 2010 and the General Office of the NDRC issued the Notice on Further Regulating Issuance of Bonds by Financing Platform Companies Established by Local Governments (國家發展改革委辦公廳關於進一步規範地方政府投融資平臺公司發行債券行為有關問題的通知)(“Circular 2881”) in November 2010. According to Circular 19, all levels of local governments shall clear up the debts of their respective financing platforms. According to Circular 2881, the level of indebtedness of local governments will impact a financing platform’s issuance of enterprise bonds. In addition, Circular 2881 specifies additional requirements applicable to the provisions of Circular 19 restricting the granting of security interests over state-owned assets by local governments to secure indebtedness incurred by its local government financing vehicles. Such requirements may have a significant impact on the Group’s access to financing and operations.

In September 2014, the State Council of the PRC released the Opinion on Enhancing the Administration of Fiscal Debts of Local Governments (國務院關於加強地方政府性債務管理的意見)(“Circular 43”). According to Circular 43, local governments should finance the development of public interest projects by issuing government bonds, and financing vehicles are prohibited from functioning as the financing arm of the local government, may not incur new government debts and should carry on their operations and

−18− financing in accordance with market-oriented principles. Public interest projects that are profit earning, such as construction of non-toll free highways, may be developed either by private investors independently or by a special purpose company jointly set up by the local government and private investors. Private investors and such special purpose companies shall invest in accordance with market-oriented principles and may finance projects with bank loans, corporate bonds and asset-backed securitisation. Furthermore, local governments shall not be liable for any of the debts of private investors or special purpose companies.

In addition to Circular 43, MOF, the NDRC, the Ministry of Justice, PBOC, CBRC and the China Securities Regulatory Commission jointly issued the Circular on Further Regulating the Debt Financing Behaviours of Local Government (關於進一步規範地方政府舉債融資行為的通知)(“Circular 50”) on 26 April 2017, which reaffirmed that local government debts shall only be incurred through the issuance of local government bonds within the quota approved by the State Council, and the local governments and their departments are not permitted to use any other means for debt financing. The local governments and their departments are prohibited from requesting or ordering enterprises to issue debts for or on behalf of the local governments.

On 11 May 2018, the NDRC and MOF jointly issued the Circular of the National Development and Reform Commission and the Ministry of Finance on Improving the Market Restraint Mechanism and Taking Strict Precautions against Foreign Debt Risks and Local Debt Risks (國家發展改革委、財政部關於完善市場約束機制嚴格防範外債風險和地方債務風險的通知) (“Circular 706”). According to Circular 706, any enterprise that intends to incur medium and long-term foreign debt is prohibited from including in its assets public schools, public hospitals, public cultural facilities, parks, public squares, office buildings of government departments and public institutions, municipal roads, non-toll roads, non-operating water conservancy facilities, pipe network facilities, other public assets and the land use rights of reserve land. Circular 706 also reaffirms that the offering circulars of bonds issuances shall not disclose information that can implicitly or explicitly indicate the government’s endorsement of capital raising or conduct misleading publicity that implies an association with the government’s credit. In addition, the liability of the local government as the shareholder shall be limited to its agreed obligation to contribute to the registered capital of such enterprises, and the relevant foreign debts should be solely repaid by such enterprises as independent legal persons.

On 13 September 2018, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the “Guiding Opinion on Strengthening the Asset and Liability Constraints of State-Owned Enterprises” (中共中央辦公廳、國務院辦公廳《關於加強國有企業資產負債約束的指導意見》), which establishes targets for the reduction of the average debt-to-asset ratio of state-owned enterprises by 2020 and (consistent with Circular 43 and Circular 50) bans local governments from engaging in “disguised” borrowing by using state-owned enterprises to issue corporate debt on behalf of local governments.

The Group believes that the PRC government will continue to implement Circular 43, Circular 50, Circular 706 and other relevant regulations and opinions to control local government debts. Accordingly, the Group should rely on the cash flow generated from its operations and external borrowings to satisfy its cash needs for servicing its outstanding indebtedness and for financing its operating activities. For the avoidance of doubt, the Liuzhou Municipal Government has no obligation to repay any amount under the Bonds. If the Issuer does not fulfil its obligations under the Bonds, investors will only have recourse against the Group, and not the Liuzhou Municipal Government.

The Group’s business operations are capital intensive and any failure of the Group to obtain sufficient capital resources on acceptable terms or in a timely manner may adversely affect its business and prospects.

The Group’s business operations require substantial capital resources. The Group has in the past met its cash requirements through (i) the cash flow generated from its operating activities, (ii) government grants and subsidies, (iii) proceeds of bank and other borrowings, and (iv) issuance of bonds and commercial paper in the PRC capital markets.

−19− The Group believes that substantial capital resources will continue be required to support its business operations and expansion. For example, as at 31 March 2021, the Group has 3 affordable housing and real estate development projects under construction.

The ability of the Group to generate sufficient operating cash flow is affected by a number of factors, such as the Group’s ability to carry on its business activities in an efficient manner, the budget and spending of the Liuzhou Municipal Government on infrastructure development and fixed asset investments, due performance of the Group’s contractors, changes in the general market conditions and regulatory environment and competition in certain sectors in which the Group operates. Any adverse change in any of these factors may create a capital shortfall. There is no assurance that the Group’s operating activities will generate sufficient cash to satisfy its cash needs at all times.

A portion of the cash demand of the Group is satisfied through subsidies provided by the Liuzhou Municipal Government. In 2020, the Group received government grants and subsidies of approximately RMB18.1 million from the Liuzhou Municipal Government for its affordable housing and real estate development projects. In 2018, the Group received government grants and subsidies of approximately RMB677.0 million from the Liuzhou Municipal Government for its urban rail transit construction. There is no assurance that the Group will continue to receive the same government subsidies and grants from the Liuzhou Municipal Government. See “– A reduction or loss of government subsidies and grants could reduce the Group’s profits” below.

Insufficient cash flow generated from the Group’s operating activities will increase the Group’s reliance on external financing. As at 31 March 2021, the Group’s total interest-bearing indebtedness (comprising non-current liabilities due within one year, other current liabilities, long-term loans, bonds payables, long-term payables and other non-current liabilities) was approximately RMB33.1 billion. As at 31 March 2021, the Group had total credit facilities of approximately RMB71.8 billion, of which approximately RMB42.3 billion had not been utilised. The Group’s ability to arrange for external financing and the cost of such financing are dependent on numerous factors, including:

• general economic and capital market conditions;

• changes in monetary policies with respect to bank interest rates and lending policy;

• interest rates and credit availability from banks or other lenders;

• Group’s business achievements and investors’ confidence in the Group;

• the Group’s ability to obtain the PRC Government approvals required to access domestic or international financing;

• provisions of tax and securities laws that may be applicable to the Group’s efforts to raise capital; and

• political and economic conditions in the rest of the PRC generally.

There is no assurance that additional financing, either on a short-term or a long-term basis, will be available, or that such financing will be obtained on terms favourable to the Group. If the Group is unable to obtain financing on a timely basis and at a reasonable cost, it may not be able to undertake new projects. This would restrict the Group’s ability to grow and, over time, may reduce the quality and reliability of the service the Group provides and adversely affects the Group’s business, financial condition, results of operations and prospects. In addition, substantial indebtedness may in turn increase the pressure on the Group’s liquidity and cause additional operational risks. See “– Substantial indebtedness may restrict the Group’s business activities and increase the Group’s exposure to various operational risks” below.

−20− The Group has historically experienced net operating cash outflows, which may increase its reliance on external source of funding and financial vulnerability.

For the years ended 31 December 2018, 2019 and 2020, the Group had net operating cash outflows of approximately RMB343.2 million and RMB506.8 million and net operating cash inflows of approximately RMB1,956.0 million, respectively. For the three months ended 31 March 2020 and 2021, respectively, the Group had net operating cash inflows of approximately RMB672.3 million and RMB2,680.0 million, respectively. If the Group’s operating activities fail to generate sufficient cash to satisfy its cash requirements, the Group has to increase its reliance on external financing to satisfy its working capital and capital expenditure, thus increasing its financial vulnerability and adversely affecting its financial condition and results of operations.

The Group has historically experienced significant fluctuation in its net profit and any significant fluctuation in the future may have a material adverse impact on its business, financial condition and results of operations.

The Group has historically experienced significant fluctuation in its net profit. For the years ended 31 December 2018, 2019 and 2020, and as at and for the three months ended 31 March 2020 and 2021, respectively, the Group had the net profit of approximately RMB104.1 million, RMB82.4 million, RMB219.2 million, RMB-32.7 million and RMB17.5 million, respectively. The Group’s net profit may experience significant fluctuations from period to period due to a number of factors, including, among others, the changing needs of affordable housing in Liuzhou, the lengthy development periods before revenue and profit from the development projects are realized and recognized, the ability of the Group to raise funds through external financing, construction schedules and any volatility in costs or expenses. The Group’s future results of operations will also continue to be affected by and depend upon a number of factors, including social, political, economic, legal and other factors, most of which are beyond the Group’s control. There is no assurance that the Group will not continue to experience such negative trends of, or fluctuations in, net profit in the future. If the Group continues to experience significant fluctuation in its net profit, or have a net loss, the Group’s business, financial conditions and results of operations may be materially and adversely affected.

Some indebtedness may restrict the Group’s business activities and increase the Group’s exposure to various operational risks.

The Group relies on bank loans and proceeds from bond issuances to satisfy a portion of its capital requirements, and the Group has had a significant amount of outstanding indebtedness. As at 31 March 2021, the Group’s total interest-bearing indebtedness (comprising non-current liabilities due within one year, other current liabilities, long-term loans, bonds payables, long-term payables and other non-current liabilities) was approximately RMB33.1 billion, of which approximately RMB4.6 billion would become due within 12 months. As at 31 December 2018, 2019 and 2020, and as at 31 March 2021, the gearing ratio of the Group (representing the ratio of total indebtedness over total assets) was approximately 54.7 per cent., 59.4 per cent., 60.9 per cent. and 64.1 per cent., respectively. In addition, the Group had outstanding guarantees in a total amount of approximately RMB6,929.6 million as at 31 March 2021, which was mainly relating to borrowings of members of the Group and certain independent third-parties (mainly business counterparties of the Group).

Certain financing contracts entered into by members of the Group contain operational and financial restrictions that prohibit the borrower, including but not limited to, without the lender’s prior consent, from incurring additional indebtedness unless it is able to satisfy certain financial ratios, restrict the borrower from creating security or granting guarantees or prohibit the borrower from changing its business and corporate structure. Such restrictions may negatively affect the relevant companies’ ability to obtain future financing, thus affecting the relevant Group member’s ability to respond to changes in market conditions, pursue business opportunities, fund capital expenditures, or withstand a continuing or future downturn in its business. Any of these factors could materially and adversely affect the Group’s ability to satisfy its obligations under outstanding financial obligations, such as the Bonds after issuance.

−21− If the Issuer or any of its relevant subsidiaries is unable to comply with the restrictions (including restrictions on future investments) and covenants in its current or future debt obligations and other financing agreements, a default under the terms of such agreements may occur. In the event of a default under such agreements, the creditors may, depending on the provisions of the relevant agreements, be entitled to terminate their obligations to the Issuer or its subsidiaries, accelerate the debt and declare all amounts borrowed due and payable or terminate the agreements. Some financing agreements of the Group contain cross-acceleration or cross-default provisions, under which relevant creditors have the right to require the Group to immediately repay its loans or to declare a default as a result of the acceleration or default of other financing agreements by any other member of the Group. If any of these events occur, the Group may not be able to obtain a waiver from the relevant lender in a timely manner, the assets and cash flow of the Issuer or its subsidiaries may not be sufficient to repay in full all of their respective debts as they become due, and the Issuer or its subsidiaries may not be able to find alternative financing. Even if the Issuer and its subsidiaries could obtain alternative financing, there can be no assurance that such financing would be on terms favourable or acceptable to the Issuer or, as the case may be, its subsidiaries.

In addition, the Group mortgages some of its assets, primarily land use rights, to secure its bank borrowings for project development. As at 31 March 2021, the Group’s assets with a total book value of approximately RMB2.34 billion were provided as security to secure the loan facilities of the Group. Third-party security rights may limit the Group’s use of the underlying collateral assets and adversely affect the efficiency of its operations. If the Issuer and its subsidiaries are unable to service and repay their debts under such loan facilities, the assets mortgaged or charged to secure the Group’s bank loans may be foreclosed, which may adversely affect the Group’s business, financial condition, results of operations and prospects.

The Group is exposed to risks relating to its inventories.

The Group’s inventory level is affected by a number of factors, such as the Liuzhou Municipal Government’s ability, timetable and priority to pay the project construction fees and the Group’s ability to execute the development of its projects according to its business plan. These factors may also be affected by the PRC Government’s measures intended to control real property investment and development and the government’s macroeconomic and monetary policies.

As at 31 December 2018, 2019 and 2020, and as at 31 March 2021, the Group’s inventories were approximately RMB25.9 billion, RMB27.7 billion, RMB28.3 billion and RMB28.6 billion, respectively, representing approximately 54.7 per cent., 51.9 per cent., 47.8 per cent. and 44.4 per cent. of the Group’s total assets as at the corresponding dates. The Group’s inventories are mainly the development cost of the projects under construction and land to be developed. The Group’s inventories largely consist of projects under construction. Projects under construction are illiquid assets and may not be sold for cash in an efficient manner. This may limit the Group’s ability to respond to changing economic, financial and investment conditions. There is no assurance that the Group will be able to sell any of these real properties or infrastructure projects to other third-parties on terms satisfactory to them.

Any failure to effectively manage the Group’s inventory level will have a material impact on the Group’s cash flow and adversely affect its ability to carry on ordinary business activities and to serve its outstanding indebtedness, such as the Bonds, which in turn could materially and adversely affect the Group’s business, financial condition, results of operations and prospects.

The Group’s business operations are heavily regulated.

The Group needs to obtain a number of approvals, certificates, licenses and permits from different governmental authorities and to comply with extensive procedural requirements in order to carry on its business activities under PRC laws and regulations. For example, the Group is required to obtain a project approval and environmental assessment approval before it is permitted to commence construction of a project. As a project progresses, the Group needs to receive a land use right certificate (土地使用權證)or land use approval (用地批復), construction land planning permit (建設用地規劃許可證), construction project planning permit (建設工程規劃許可證) and construction permit (建築工程施工許可證).

−22− Governmental authorities in the PRC have broad discretion in implementing and enforcing applicable laws and regulations and in determining the grant of approvals, licences, permits and certificates necessary for the Group to conduct its business, and it normally takes six to 12 months to obtain all of the required approvals and certificates.

In addition, PRC governmental authorities will, from time to time, amend existing laws and regulations and release new policies which may affect the Group’s business operations. The Group may be unable to comply with such new laws, regulations or policies or may fail to respond to any changes in the regulatory environment in a timely manner. In addition, to ensure compliance with the restrictions and conditions of relevant business permits, licenses and certificates, governmental authorities conduct regular or special inspections, investigations and inquiries. If there is any material non-compliance of the Group or its business, the Group’s permits, licenses and certificates may be suspended or revoked, and fines or other penalties may be imposed, any of which could have a material adverse effect on the Group’s business, financial condition, results of operations and prospects.

As at the date of this Offering Circular, the Group has received or properly maintained all or in the process of obtaining the aforesaid requisite permits, licences or approvals. According to the PRC laws and regulations, the failure to obtain relevant permits or approvals could result in suspension or demolition of construction projects, fines, administrative penalties or other penalties, any of which could have a material adverse effect on the Group’s business, financial condition, results of operations and prospects.

The Group may not be able to complete its development projects on time or at all.

The Group’s affordable housing and real estate development, primary land development and infrastructure construction projects require substantial capital expenditures prior to and during the construction period, and a construction project may take several years before the Group receives payment through settlement. During this period the progress and cost for a development project can be adversely affected by many factors, including:

• delays in obtaining necessary licenses, permits or approvals from governmental agencies or authorities;

• relocation of existing residents and/or demolition of existing structures;

• shortages of materials, equipment, contractors and skilled labour;

• labour disputes;

• construction accidents;

• natural catastrophes;

• adverse weather conditions; and

• changes in city zoning, planning and plot ratios.

Construction delays or failure to complete the construction of a project according to its planned specifications, schedules or budgets as a result of the above factors may adversely affect the Group’s results of operations and financial position and may also cause reputational damage. There is no assurance that the Group will not experience such delays in delivery of its projects in the future or that they will not be subject to any liabilities for any such delays.

−23− The Group’s profit margin is sensitive to fluctuations in the cost of construction materials.

Contracting fees with third-party contractors are one of the predominant components of the Group’s operating cost. Contracting fees encompass all costs for the design and construction of a project, including payments to third-party contractors, costs of construction materials, foundation and substructure, fittings, facilities for utilities and related infrastructure such as roads and pipelines. Historically, material costs have been the principal driver of the contracting fees of the Group’s rail transit construction projects, affordable housing and real estate development, primary land development and infrastructure construction. However, as most of the material costs are often included in the contracting fees paid to the Group’s contractors, it has been difficult for the Group to estimate such costs.

Contracting fees may fluctuate as a result of the volatile price movement of construction materials such as steel and cement. The Group seeks to reduce its exposure to short-term price fluctuations of construction materials and limit project cost overruns by centralising its procurement to lower its purchase costs. The Group also manages the cost of outsourced construction work through a process of tenders which, among other things, takes into account procurement of principal construction materials such as steel and cement at fixed prices. In addition, the Group incorporates into its contracts with third-party contractors specific terms where the third-party contractors are generally responsible for any price fluctuations within five per cent., and any significant price fluctuations above or below five per cent. being subject to the specific price adjustment provision under each contract. The Group’s profit margin is sensitive to changes in market prices for construction materials and its profit margins will be materially and adversely affected if the Group is not able to pass all of the increased costs onto its customers.

Changes in government policies, zoning and design plans and land use rights sales plans with respect to primary land development in Liuzhou may adversely affect the Group’s development plans and the proceeds the Group is entitled to receive from the sales of land use rights.

The Group’s operating income from primary land development mainly derives from the land development fees payable by the Liuzhou Municipal Bureau of Finance, which is in turn generated from the land grant premium payable by real property developers in the granting of land use rights of the land developed by the Group. The Liuzhou Municipal Bureau of Finance determines the price, schedule and priority of the grant of land use rights by taking into consideration government income and budget, city development plans, the cost of primary development, the location of the land, policies and regulations affecting real property investment and development and macroeconomic conditions in Liuzhou. The Group has no control over the price, schedule and priority of the grant of land use rights. According to the Issuer’s accounting policies, the Issuer recognises the operating income from primary land development upon receipt of the payment of the land development fee. As a result, the Group’s operating income from primary land development may fluctuate significantly from time to time depending on the timing and price of the land grant and the time of payment of the land development fee by the Liuzhou Municipal Bureau of Finance.

Furthermore, government authorities may, without prior notice or consent from the Group, implement changes to existing policies and plans for primary land development in Liuzhou or implement new policies or plans, which may adversely affect the Group’s operations and/or require the Group to adjust its development plans. For example, the Liuzhou Municipal Bureau of Finance may adjust the timing of the land use rights sales, the number of the land parcels designated for sale and the land parcels to be prioritised for sale without consulting the Group or obtaining the Group’s consent. Any changes in government policies, zoning and design plans and land use rights sales plans with respect to primary land development in Liuzhou may adversely affect the Group’s development plans and the proceeds the Group is entitled to receive from the sales of land use rights for its primary land development projects.

−24− The Group’s primary land development activities are exposed to certain risks associated with the resettlement of local residents.

The Group’s primary land development activities are exposed to certain risks associated with the resettlement of local residents. Many of the Group’s primary land development projects involves resettlement of local residents and businesses. According to the land development arrangement between the Group and the Liuzhou Municipal Government, the Group is responsible for relocating the residents affected and paying the compensation in accordance with applicable PRC urban housing relocation regulations, although the compensation will be reimbursed by the Liuzhou Municipal Government and the Liuzhou Municipal Bureau of Finance as part of the payment of the land development fee. There is no assurance that the relocation of indigenous residents or businesses will proceed smoothly. It is possible that the local residents or businesses may disagree with the amount of the compensation and refuse to be relocated, and in this case the Liuzhou Municipal Government may be asked to resolve the dispute by reviewing the arrangement and amount of compensation. Such resistance or refusal to relocate may delay the timetable of, or increase the development costs of, the Group’s development projects. In addition, the Group pays such compensation calculated in accordance with formulas published by relevant governmental authorities. These formulas take into account the location, type of building subject to demolition, local income levels and many other factors. There is no assurance that the governmental authorities will not change or adjust their formulas from time to time without sufficient advance notice. If they do so, the land costs may be subject to a limited level of increases, which can adversely affect the Group’s cash flow, financial condition and results of operations.

The Group’s affordable housing and real estate development projects are public interest projects which typically generate no or minimal profit.

The Group’s affordable housing and real estate development projects are for general public interest and social welfare purposes and typically generate no or minimal profit. The Group had, in the past, received financial subsidies and other support from the Liuzhou Municipal Government for such government- sponsored projects. However, such financial subsidies may not always be available due to the government’s liquidity, budgeting priority and other considerations. Further, the Liuzhou Municipal Government may change the plans for such projects which may cause an increase in the investment after the construction begins. Additionally, it is uncertain whether the promulgation of Circular 43 and the Implementation Opinion on Circular 43 will affect the government’s ability to provide such financial subsidies. The Group is currently involved in several government projects and may continue to be required to participate in such projects from time to time. However, the Group has limited resources, and engagement in such projects may reduce its ability to participate in other profit-generating projects. There can be no assurance that the Group’s business, financial condition, results of operations and prospects will not be adversely affected as a result.

The Group’s financial condition and results of operations may be affected by material fluctuations of interest rates.

Most of the Group’s bank loans bear interest that accrues at rates linked to the benchmark lending rates published by the PBOC. A material fluctuation in the benchmark lending rate may have a material impact on the Group’s interest expenses and payables under its bank loans and in turn negatively affect its financing costs and results of operations. The PBOC from time to time adjusts interest rates as implementation of its economic and monetary policies. Since the outbreak of the global financial crisis in 2008, the PBOC started to lower the benchmark lending rates with an aim to encourage lending, increase liquidity in the market and promote the recovery of China’s economy. Since 2008, the PBOC decreased the benchmark one-year lending rate five times, from 7.20 per cent. to 5.31 per cent. in December 2008. Since then, the one-year lending rate was gradually increased to 6.56 per cent. on 7 July 2011 and onwards. In recent years, a perceivable slowdown in the growth of the economy of the PRC again caused the PRC Government to adopt more liberal monetary policies with the aim to stimulate the PRC’s economic development. Since 2012, the PBOC for a number of times reduced the benchmark one-year lending rate to 4.35 per cent. as at 24 October 2015 and onwards. Although the Group’s financial condition and results of operations may benefit from a low-interest environment, there is no assurance that this environment will continue. Any increase in the benchmark lending rate by the PBOC in the future will increase the Group’s financing costs and adversely affect its profitability, financial condition and results of operations.

−25− The Group relies on third-party contractors for certain services in its rail transit construction, affordable housing and real estate development, infrastructure construction and primary land development business.

The Group engages third-party contractors to provide various services, including construction, landscaping, gardening, mechanical and electrical installation and gas, water and other utilities installation. It generally selects third-party contractors through its standardised open tender process. The Group endeavours to employ companies with good reputations, strong track records, reliable performance and adequate financial resources, and the Group also implements quality control procedures and closely monitors the progress of construction. However, there is no assurance that the Group’s third-party contractors will always provide services of the quality required by the Group. If the performance of any third-party contractor fails to meet the requirements of the Group, the Group may need to replace such contractor or take other remedial actions, which could adversely affect the cost and development schedule of its projects. Moreover, the Group’s contractors may undertake projects for other enterprises operating similar business, engage in risky undertakings or otherwise encounter financial or other difficulties, which may adversely affect their ability to complete the Group’s projects on time, within budget or at all. All of these third-party related factors may have a material adverse impact on the quality of services provided by the Group’s contractors and the Group’s reputation, credibility, financial position and business operations.

A reduction or loss of government subsidies and grants could reduce the Group’s profits.

The Group had, in the past, received financial subsidies and other support from the Liuzhou Municipal Government. These supports come in various forms, including government grants and subsidies and capital contributions for its development projects. However, there can be no assurance that the Group will continue to receive the same government subsidies and grants, since the relevant government policies may change over time. Any loss or reduction in government subsidies and grants or other form of government support could have a material and adverse effect on the Group’s business, financial condition, results of operations and prospects.

The Group may not successfully implement its growth strategy.

The Group has historically been focused on affordable housing and real estate development, primary land development and infrastructure construction. Over the years, it has diversified its business into other ancillary businesses such as hotel operation, property leasing and vehicle inspection. As one of its strategies, the Group continues to develop other new business while maintaining sustainable growth of its existing business. Whether the Group could successfully implement this strategy depends to a certain extent on the Group’s ability to identify attractive projects, obtain required approvals from relevant regulatory authorities, obtain sufficient capital on acceptable terms in a timely manner and maintain close working relationships with various governmental authorities and agencies. The success of negotiations with respect to any particular project cannot be assured. There can be no assurance that the Group will be able to successfully implement this strategy, manage or integrate newly-acquired operations with its existing operations. Failure to implement the Group’s growth strategy could have a material adverse impact on its business, financial condition and results of operations.

Any failure of the Group to maintain an effective quality control system could have an adverse effect on the Group’s business and operations.

The Group relies on its quality control system to ensure the safety and quality of its projects. The effectiveness of the Group’s quality control system may be affected by a number of factors, such as the timely update of the quality control system to address changing business needs and the Group’s and its contractors’ willingness and ability to adhere to its quality control policies and guidelines. There is no assurance that the quality of the projects developed by the Group will not be undermined by the underperformance of the Group’s contractors. Any failure or deterioration of the Group’s quality control system could result in defects in its projects, which in turn may subject the Group to contractual, product liability and other claims. Any such claims, regardless of whether they are ultimately successful, could

−26− cause the Group to incur significant costs, harm its business reputation and result in significant disruption to its operations. If any of such claims were ultimately successful, the Group could be required to pay substantial monetary damages or penalties.

The insurance coverage of the Group may not adequately protect it against all operational risks.

The Group faces various operational risks in connection with its business, including but not limited to:

• mechanical production interruptions, electricity outages and equipment failure;

• operating limitations imposed by environmental or other regulatory requirements;

• work-related personal injuries;

• onsite occupational accidents;

• credit risks relating to the performance of customers or other contractual third-parties;

• disruption in the global capital markets and the economy in general;

• loss on investments;

• environmental or industrial accidents; and

• catastrophic events such as fires, earthquakes, explosions, floods or other natural disasters.

The Group maintains insurance policies that provide different types of risk coverage, which the Group believes to be consistent with applicable law and industry and business practice in the PRC. However, claims under the insurance policies may not be honoured fully or on time, or the insurance coverage may not be sufficient to cover costs associated with accidents incurred in the Group’s operations due to the above-mentioned operational risks. Certain types of losses (such as from wars, acts of terrorism or acts of God, business interruption, property risks and third-party (public) liability) are not insured in the PRC because they are either uninsurable or not economically insurable. To the extent that the Group suffers loss or damage that is not covered by insurance or that exceeds the limit of its insurance coverage, its business, financial condition, results of operations and cash flow may be materially and adversely affected.

Potential liability for environmental damages could result in outflow of the Group’s resources.

The Group is subject to a variety of laws and regulations concerning the protection of health and environment. The particular environmental laws and regulations that apply to any given project development site vary according to the site’s location, the site’s environmental condition, the present and former uses of the site, as well as adjoining properties. Efforts taken to comply with environmental laws and regulations may result in delays in development, cause the Group to incur compliance costs and can prohibit or severely restrict project development activity in environmentally-sensitive regions or areas.

As required by the PRC laws and regulations, each project the Group develops is required to undergo environmental assessments and the Group is required to submit an environmental impact assessment report to the relevant governmental authorities for approval before commencement of its construction. Although the environmental audits conducted by the relevant PRC environmental protection agencies to date have not revealed any environmental violations that the Group believes would have a material adverse effect on its business, financial condition or results of operations, it is possible that there are potential material environmental liabilities of which the Group is unaware. In addition, there is no assurance that the Group’s operations will not result in environmental liabilities or that the Group’s contractors will not violate any environmental laws and regulations in its operations that may be attributed to the Group.

−27− The Group is subject to various environmental, safety and health regulations in the PRC and any failure to comply with such regulations may result in penalties, fines, governmental sanctions, proceedings or suspension or revocation of its licenses or permits.

The Group is required to comply with extensive environmental, safety and health regulations in the PRC. Failure to comply with such regulations may result in fines or suspension or revocation of the Group’s licenses or permits to conduct its business. Given the volume and complexity of these regulations, compliance may be difficult or involve significant financial and other resources to establish efficient compliance and monitoring systems. There is no assurance that the Group will be able to comply with all applicable requirements or obtain these approvals and permits on a timely basis, if at all. As at the date of this Offering Circular, the Group has not received any notice regarding noncompliance with the applicable safety regulations or requirements from any governmental authority. In addition, PRC laws and regulations are constantly evolving. There can be no assurance that the PRC Government will not impose additional or stricter laws or regulations, which may increase compliance costs of the Group.

The Ministry of Land and Resources may impose fines or penalties on the Group or revoke the land use rights with respect to certain land held by the Group.

Under applicable PRC laws and regulations, the Ministry of Land and Resources may impose an idle land fee equal to 20.0 per cent. of the land premium or allocation fees if the Group does not commence development of the land held by the Group for more than one year after the date specified in the relevant land use rights grant contract, or the Group commences development on an area which is less than one-third of the area granted, or the capital invested in the development is less than one-fourth of the total investment approved for the development, or the development is suspended for more than one year without governmental approval. The Ministry of Land and Resources has the power to revoke the land use rights certificate without compensation if the Group does not commence development for more than two years after the date specified in the relevant land use rights grant contract without compelling causes. The State Council issued the Notice on Promoting the Saving and Intensification of Use of Land (國務院關於促進節約集約用地的通知) which states, among other things, that the Ministry of Land and Resources and other authorities are required to research and commence the drafting of implementation rules concerning the levy of land appreciation fees on idle land. Furthermore, the Ministry of Land and Resources issued in August 2009 the Notice on Restricting the Administration of Construction Land and Promoting the Use of Approved Land (國土資源部關於嚴格建設用地管理促進批而未用土地利用的通知) which reiterates its policy on idle land. Idle Land Disposal Measures (閒置土地處置辦法) became effective on 28 April 1999 and was amended on 22 May 2012, it stipulated the procedures for disposal of idle land.

Labour shortages, labour disputes or increases in labour costs of the Group’s third-party contractors could materially and adversely affect the Group’s business and results of operations.

The Group relies on third-party contractors to provide various services in its rail transit construction projects, affordable housing and real estate development, primary land development and infrastructure construction. In recent years, work stoppages, employee suicide and other similar events in certain cities in the PRC have caused the PRC Government to amend labour laws to enhance protection of employees’ rights. Increasing awareness of labour protection as well as increasing minimum wages is likely to increase the labour costs afforded by PRC enterprises in general, including the Group or the contractors participating in the Group’s projects. As such, labour shortages, labour disputes or increases in labour costs of the Group’s third-party contractors could cause an extension of the construction progress and an increase in the Group’s fees payable to the contractors, which could in turn materially and adversely affect the Group’s business and results of operations.

−28− The Group may not be able to fully detect money laundering and other illegal or improper activities in its business operations on a timely basis.

The Group is required to comply with applicable anti-money laundering, anti-terrorism laws and other regulations in the PRC and other relevant jurisdictions. The PRC’s anti-money laundering law requires financial institutions to establish sound internal control policies and procedures with respect to anti-money laundering monitoring and reporting activities. Such policies and procedures require the Group to, among other things, establish a customer identification system in accordance with the relevant rules, record the details of customer activities and report suspicious transactions to the relevant authorities. As at the date of this Offering Circular, the Group has not adopted policies and procedures aimed at detecting and preventing the use of its business vehicles to facilitate money laundering activities and terrorist acts. In the event that the Group fails to detect money laundering or other illegal or improper activities or fails to fully comply with applicable laws and regulations, the relevant government agencies may freeze its assets or impose fines or other penalties on it. Any of these may materially and adversely affect its business reputation, financial condition and results of operations.

The Group may not be able to detect and prevent fraud or other misconduct committed by its employees, representatives, agents, customers or other third-parties.

The Group may be exposed to fraud or other misconduct committed by its employees, representatives, agents, customers or other third-parties that could subject it to financial losses and sanctions imposed by governmental authorities, which in turn affects its reputation. Such misconduct could include:

• hiding unauthorised or unsuccessful activities, resulting in unknown and unmanaged risks or losses;

• intentionally concealing material facts, or failing to perform necessary due diligence procedures designed to identify potential risks, which are material to the Group in deciding whether to make investments or dispose of assets;

• improperly using or disclosing confidential information;

• recommending products, services or transactions that are not suitable for the Group’s customers;

• misappropriation of funds;

• conducting transactions that exceed authorised limits;

• engaging in misrepresentation or fraudulent, deceptive or otherwise improper activities when marketing or selling products;

• engaging in unauthorised or excessive transactions to the detriment of the Group’s customers;

• making or accepting bribes;

• conducting any inside dealing; or

• otherwise not complying with applicable laws or the Group’s internal policies and procedures.

The Group’s internal control procedures are designed to monitor its operations and ensure overall compliance. However, such internal control procedures may be unable to identify all incidents of noncompliance or suspicious transactions in a timely manner, if at all. Furthermore, it is not always possible to detect and prevent fraud and other misconduct, and the precautions the Group takes to prevent and detect such activities may not be effective. There is no assurance that fraud or other misconduct will not occur in the future. If such fraud or other misconduct does occur, it may cause negative publicity as a result.

−29− The Group’s business may be adversely affected if it is unable to retain and hire qualified employees.

The success of the Group’s business is dependent to a large extent on its ability to attract and retain key personnel who possess in-depth knowledge and understanding of investment, as well as the industries in which the Group invests or operates. These key personnel include members of the Group’s senior management, experienced investment managers and finance professionals, project development and management personnel, legal professionals, risk management personnel, information technology and other operation personnel. Competition for attracting and retaining these individuals is intensive. Such competition may require the Group to offer higher compensation and other benefits in order to attract and retain qualified professionals, which could materially and adversely affect the Group’s financial condition and results of operations. As a result, the Group may be unable to attract or retain these personnel to achieve its business objectives and the failure to do so could severely disrupt its business and prospects. For example, the Group may not be able to hire enough qualified personnel to support its new investment projects or business expansion. As the Group expands its business or hires new employees, the employees may take time to get accustomed to any new standard procedures and consequently may not comply with the standard procedures of any new business in an accurate and timely manner. The occurrence of any of the events discussed above could lead to unexpected loss to the Group and adversely affect its financial condition and results of operations.

The Group is exposed to litigation risks.

The Group may from time to time be involved in disputes with governmental entities, indigenous residents, contractors, suppliers, employees and other third-party service providers during the course of its daily operations. Claims may be brought against members of the Group based on a number of causes such as defective or incomplete work, personal injuries, property damages, breach of warranty or delay in completion and delivery projects. In addition, the Group may bring up claims against project contractors for additional costs incurred as a result of the contractors’ underperformance or non-performance, project defects or default by the contractors. If the disputes or claims are not resolved or settled through negotiation or mediation, the Group may be involved in lengthy and costly litigation or arbitration proceedings, which may distract the Group’s financial and managerial resources. In the event that the Group prevails in those legal proceedings, there is no assurance that the judgement or awards will be effectively enforced. If a judgment or award is rendered against the Group, the amounts payable by the Group may not be fully covered by the Group’s insurance, and the amounts could differ from the provisions made by the Group based on its estimates. Any material charges associated with claims brought against the Group and material write downs associated with the Group’s claims could have a material adverse impact on its financial condition, results of operations and cash flow. As at the date of this Offering Circular, there are no known litigation, arbitration or administrative proceedings against the Group or any of its directors that could have a material adverse effect on the Group’s business, results of operations or financial condition.

The Group faces competition in the markets in which it operates, which may adversely affect its business and results of operations.

The Group believes that the construction industry in the PRC is in a market-oriented open competition environment. The Group’s competition comes from various sources, including large state-owned enterprises of the PRC, privately-owned domestic companies, and leading international companies. As a result of the PRC’s accession to the World Trade Organisation, the PRC Government has opened up domestic markets to foreign competition, and foreign invested companies are now allowed to participate in various types of infrastructure projects. The Group also competes with both local and international companies in capturing new business opportunities in the PRC. Some of these companies have significant financial resources, marketing and other capabilities. In the PRC, some of the local companies have extensive local knowledge and business relationships and a longer operational track record in the relevant local markets than the Group. The international companies are able to capitalize on their overseas experience to compete in the PRC markets. The Group’s market position depends on its ability to anticipate and respond to various competitive factors, including pricing strategies adopted by competitors, changes in customer preferences, availability of capital and financing resources and the introduction of

−30− new or improved products and services. There can be no assurance that the Group’s current or potential competitors will not offer services or products comparable or superior to those that it offers at the same or lower prices or adapt more quickly than the Group does to evolving industry trends or changing market conditions. The Group may lose its customers to its competitors if, among other things, it fails to keep its prices at competitive levels or to sustain and upgrade its capacity and technology. Increased competition may result in price reductions, reduced profit margins and loss of market share.

There are risks associated with any future material acquisitions by the Group.

The Group has historically diversified its business portfolio by investing in other companies and may continue to do so in the future. Although the Group conducts due diligence investigations on the target companies, the due diligence may not reveal all facts that are necessary or material in evaluating the target company and the acquisition. Any failure to discover material risks and liabilities relating to the target company before the acquisition could increase the Group’s exposure to financial and legal risks and liabilities. When determining the price for any acquisition, the Group needs to consider various factors, including the quality of the target business, estimated costs associated with the acquisition and the management of the target business, prevailing market conditions and intensity of competition. The Group needs to address different issues arising from the acquisition after the relevant transaction is completed, such as business, operation and management integration. There is no assurance that the Group is able to address these issues effectively at all times. In addition, any major acquisition or transaction of similar nature may consume substantial management attention and financial resources of the Group or even cause the Group to incur significant indebtedness. Any material decrease in its financial resources may limit the Group’s ordinary operating activities and increase pressure on its liquidity, and in turn could adversely affect its business, financial condition and results of operations.

The Group is subject to joint venture risks.

Certain of the Group’s operations are conducted through jointly controlled entities and associated companies. Co-operation and agreement among the Group’s joint venture partners on its existing or any future projects are important factors for the smooth operation and financial success of such projects. The Group’s joint venture partners may (i) have economic or business interests or goals that are inconsistent with those of the Group; (ii) be unable or unwilling to fulfil their obligations under the relevant joint venture or other agreements; or (iii) experience financial or other difficulties. Further, the Group may not be able to control the decision-making process of the joint ventures as, in some cases, it does not have majority control of the joint venture. The Group does, however, through contractual provisions or representatives appointed by it, typically have the ability to influence certain material decisions. Although the Group has not experienced any significant problems with its partners to date, no assurance can be given that disputes among its partners will not arise in the future that could adversely affect such projects.

The Group’s operations are subject to force majeure events, natural disasters and outbreaks of contagious diseases, including the recent COVID-19 pandemic.

Force majeure events, natural disasters, catastrophe epidemics such as Middle East Respiratory Syndrome (MERS), Severe Acute Respiratory Syndrome (SARS), H5N1 avian flu, human swine flu (also known as Influenza A (H1N1)), H7N9 or Coronavirus disease 2019 (“COVID-19”) or other events could result in severe personal injury to the Group’s staff, property damage and environmental damage, which may curtail the Group’s operations, cause delays in estimated completion dates for projects and materially and adversely affect its cash flows and, accordingly, adversely affect its ability to service debt. In addition, the Group’s operations are subject to outbreaks of contagious diseases.

An outbreak of respiratory illness caused by a novel coronavirus, COVID-19, first emerged in Wuhan, Hubei Province, China in late 2019 and continues to expand within the PRC and globally. On 30 January 2020, the World Health Organisation (the “WHO”) declared the outbreak of COVID-19 a Public Health Emergency of International Concern and on 11 March 2020, the WHO characterised COVID-19 as a pandemic. As at the date of this Offering Circular, certain strains of COVID-19 are considered highly contagious, and the outbreak has resulted in a high number of fatalities and continues to be considered by

−31− public health authorities as a serious public health threat. The WHO is closely monitoring and evaluating the situation. Moreover, in the first quarter of 2020, public health authorities in the PRC had implemented strict measures to suppress the local transmission of COVID-19 and as a result, the PRC has recently experienced a significant drop in the number of new patients infected with COVID-19 each day. Public health authorities around the world have also intensified containment efforts, leading to a severe drop in business activity and curtailing global trade. However, it remains uncertain as to when the outbreak of COVID-19 will be contained. In the event that the outbreak of COVID-19 is not effectively controlled within a short timeframe, the Group’s business operations and financial condition may be materially and adversely affected as a result of the changes in the outlook of the property market, any slowdown in economic growth, negative business sentiment or other factors that the Group cannot foresee.

The occurrence or continuance of any of these or similar events could increase the costs associated with the Group’s operations and reduce its ability to operate its businesses effectively, thereby reducing its revenues. Insurance policies for civil liability and damages taken out by the Group could prove to be significantly inadequate, and there can be no assurance that the Group will always be able to maintain a level of cover at least equal to current cover levels and at the same cost. Such accidents could also lead to the shutdown of the Group’s affected operating facilities such as highways and railways and, potentially, similar facilities that may be considered to present the same risks.

The Group’s affordable housing and real estate development business may be adversely affected if mortgage financing becomes more costly, less attractive or less available for purchasers.

Some purchasers of the Group’s affordable housing properties fund their purchases with mortgages provided by PRC commercial banks. Real estate mortgage financing has been and is expected to continue to be heavily regulated in the PRC. In the past few years, different levels of the PRC Government introduced a number of policies and measures to control the rate of increasing property prices and to curtail the overheating property market in the PRC.

The PRC Government has also sought to control the development of the PRC property market by adjusting the benchmark lending interest rate. A material increase in the interest rate may significantly increase the cost of mortgage financing and may affect the affordability of the Group’s affordable housing properties. All of these policies and measures have had a material impact on the property sales and prices of property in the PRC, including in Liuzhou, which could in turn affect the ability of many of the Group’s prospective customers to purchase the affordable housing properties the Group develops. Accordingly, the Group’s affordable property construction business and its related financial condition and results of operations may be adversely affected.

The Group relies on information technology systems for its business and any information technology system limitations or failures could adversely affect its business, financial condition and results of operations.

The Group’s business depends on the integrity and performance of the business, accounting and other data processing systems at the holding company and at its subsidiaries. If the Group’s systems may not be able to effectively address the issues arising from an increased business or may otherwise fail to perform, the Group could experience unanticipated disruptions in business, slower response times and limitation on its ability to monitor and manage data and risk exposures, control financial and operation conditions, and keep accurate records. Although the Group’s systems have not experienced major systems failures and delays in the past, there is no assurance that the Group’s systems would not experience future systems failures and delays, or the measures taken by the Group to reduce the risk of system disruptions are adequate.

−32− The Issuer’s accounts were audited in accordance with PRC GAAP which may be different from IFRS. The Issuer’s auditors have limited international capital markets experience.

The Issuer’s audited consolidated financial statements as at and for the years ended 31 December 2019 and 2020, and the Issuer’s unaudited but reviewed financial statements as at and for the three months ended 31 March 2021 were prepared in accordance with the PRC GAAP. Although PRC GAAP are substantively in line with IFRS, PRC GAAP are, to a certain extent, different from IFRS. See “Summary of Certain Differences between PRC GAAP and IFRS”. There is no guarantee that the PRC GAAP will fully converge with IFRS or there will be no additional differences between the two accounting standards in the future. Prospective investors should consult their own professional advisers for an understanding of any differences that may exist between PRC GAAP and IFRS, and how those differences might affect the financial information included in this Offering Circular.

The Issuer’s independent auditors, RSM China CPA LLP, are registered members of The Chinese Institute of Certified Public Accountants and although they have significant audit experience in the PRC, they have limited international capital markets experience. Prospective investors should consider these factors prior to making any investment decision.

The Group’s historical financial information may not be directly comparable with its financial information.

The historical financial information of the Group is sometimes adjusted or restated to address subsequent changes in accounting standards, the Group’s accounting policies and/or applicable laws and regulations with retrospective impact on the Group’s financial reporting or to reflect the comments provided by the Group’s independent auditors during the course of their audit or review in subsequent financial periods. Such adjustment or restatement may cause discrepancies between the financial information with respect to a particular period or date contained in the Group’s historical financial statements and that contained in its future financial statements. For example, pursuant to the “Notice on Revising and Printing the Format of Financial Statements of General Enterprises (Caikuai [2019] No. 6)” and “Notice on Revising and Printing the Format of Consolidated Financial Statements (2019 Edition) (Caikuai [2019] No. 16)” issued by the MOF on 30 April 2019 and 19 September 2019, respectively, the Group had adjusted and restated retrospectively certain line items in the Audited Financial Statements in accordance with the new reporting requirements on financial statements. As such, the Group’s financial information contained in the Audited Financial Statements may not be directly comparable with its financial information in the previous period or a particular previous date. For details and impact of such restatements, see Note III-28 of the Audited Financial Statements which are included elsewhere in this Offering Circular.

Historical consolidated financial information of the Group may not be indicative of its current or future results of operations.

The historical financial information of the Group included in this Offering Circular is not indicative of its future financial results. This financial information is not intended to represent or predict the results of operations of any future periods. The Group’s future results of operations may change materially if its future growth does not follow the historical trends for various reasons, including factors beyond its control, such as changes in economic environment, PRC environmental rules and regulations and the domestic and international competitive landscape of the industries in which the Group operates its business.

RISKS RELATING TO THE PRC

China has experienced a slowdown in its economic development and the future performance of China’s economy is uncertain.

A substantial part of the Group’s assets are located in the PRC and a substantial part of its revenue is sourced from the PRC. Accordingly, the results of operations, financial position and prospects of the Group are subject, to a significant degree, to economic, political and legal developments and changes in the PRC.

−33− The economy of the PRC experienced rapid growth in the past 30 years. There has been a slowdown in the growth of the PRC’s GDP since the second half of 2013 and this has raised market concerns that the historic rapid growth of the economy of the PRC may not be sustainable. According to the National Statistics Bureau of China, the annual growth rate of China’s GDP in 2015 slowed down to 6.9 per cent. on a year-on-year basis compared to 7.3 per cent. in 2014, and it further decreased to 6.7 per cent. for 2016, which was the slowest annual GDP growth rate recorded in 26 years. For the years ended 31 December 2017, 2018 and 2019, China’s GDP growth rate was 6.9 per cent., 6.6 per cent. and 6.6 per cent. In May 2017, Moody’s changed China’s long-term sovereign credit rating and foreign currency issuer ratings to A1 from Aa3. In September 2017, S&P Global Ratings also downgraded China’s long term sovereign credit rating to A+ from AA-, citing increasing economic and financial risks from a prolonged period of strong credit growth. Further indication of the slowdown in the growth of China’s economy is evidenced by press reports of a recent increase in bond defaults by PRC corporate issuers.

The future performance of China’s economy is not only affected by the economic and monetary policies of the PRC government, but it is also exposed to material changes in global economic and political environments as well as the performance of certain major developed economies in the world, such as the United States and the European Union. There is substantial uncertainty relating to the implementation of the United Kingdom’s exit or its impact on the economic conditions of other part of the world, such as China’s, including but not limited to further decreases in global stock exchange indices, increased foreign exchange volatility (in particular a further weakening of the pound sterling and euro against other leading currencies) and a possible economic recession involving more countries and areas. Therefore, there exists continued uncertainty for the overall prospects for the global and the PRC economies this year and beyond.

Changes in the economic, political and social conditions in the PRC and government policies adopted by the PRC government may affect the Group’s business and prospects.

China’s economy differs from the economies of most developed countries in many respects, including with respect to government involvement, level of development, economic growth rate, control of foreign exchange and allocation of resources. China’s economy has been transitioning from a planned economy to a more market-oriented economy. In recent years, the PRC government has implemented a series of measures emphasising market forces for economic reform, the reduction of state ownership of productive assets and the establishment of sound corporate governance in business enterprises.

However, a large portion of productive assets in China remain owned by the PRC government. The PRC government continues to play a significant role in regulating industrial development, the allocation of resources, production, pricing and management, and there can be no assurance that the PRC government will continue to pursue the economic reforms or that any such reforms will not have an adverse effect on the Group’s business.

The operations and financial results of the Group may also be affected by changes in political, economic and social conditions or the relevant policies of the PRC government, such as changes in laws and regulations (or the interpretation thereof). In addition, infrastructure construction demand in China depends heavily on economic growth. If the China’s economic growth slows down or if China experiences an economic recession, the growth of development in China’s economic and technology development zones and infrastructure construction demand may also slow down, and the Group’s business prospects may be materially and adversely affected. The operations and financial results of the Group, as well as its ability to satisfy its obligations under the Bonds, could also be materially and adversely affected by changes to or introduction of measures to control changes in the rate or method of taxation and the imposition of additional restrictions on currency conversion.

Uncertainty with respect to China’s legal system may affect the Group.

As substantially all of the Group’s businesses are conducted, and substantially all of its assets are located, in the PRC, its operations are governed principally by laws and regulations of the PRC. The PRC’s legal system is based on written statutes while prior court decisions, in certain circumstances, may be cited as reference but have limited precedential value. Since 1979, the PRC government has promulgated laws and

−34− regulations in relation to economic matters such as foreign investment, corporate organisation and governance, commerce, taxation, foreign exchange and trade, with a view to enhancing the protections afforded to market participants in the PRC. However, the PRC has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in the PRC. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and their nonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, PRC’s legal system is based, in part, on government policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, the Group may not be aware of its violation of these policies and rules until sometime after the violation. Furthermore, the administration of PRC laws and regulations may be subject to a certain degree of discretion by the executive authorities. This has resulted in the outcome of dispute resolutions not being as consistent or predictable compared to more developed jurisdictions. In addition, any litigation in the PRC may be protracted and result in substantial costs and diversion of resources and management’s attention and it may be difficult to obtain a swift and equitable enforcement of laws in the PRC, or the enforcement of judgments by a court of another jurisdiction. These uncertainties relating to the interpretation and implementation of PRC’s laws and regulations may adversely affect the legal protections and remedies that are available to the Group in its operations and to the holders of the Bonds.

Investors may experience difficulties in effecting service of legal process and enforcing judgments against the Issuer and its management.

The Issuer is incorporated under the laws of the PRC. A majority of its assets are located in the PRC. In addition, all of its directors, supervisors and senior management reside within the PRC and the assets of its directors and officers are located within the PRC. As a result, it may not be possible for investors to effect service of process outside the PRC upon all of its directors, supervisors and senior management, including for matters arising under applicable securities law. A judgment of a court of another jurisdiction may be reciprocally recognised or enforced if the jurisdiction has a treaty with the PRC or if judgments of the courts in the PRC have been recognised before in that jurisdiction, subject to the satisfaction of other requirements. However, the PRC does not have treaties or arrangements providing for the reciprocal recognition and enforcement of judgments of courts with most other jurisdictions, including Japan, the United States and the United Kingdom. On 14 July 2006, Hong Kong and the PRC entered into the Arrangement on Reciprocal Recognition and Enforcement of Judgment in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region Pursuant to Choice of Court Agreements Between Parties Concerned (關於內地與香港特別行政區法院相互認可和執行當事人協議管轄的民商事案件判決的安排) (the “Arrangement”), pursuant to which a party with a final court judgment rendered by a Hong Kong court requiring payment of money in a civil and commercial case according to a “choice of court” agreement in writing may apply for recognition and enforcement of the judgment in the PRC. Similarly, a party with a final court judgment rendered by a PRC court requiring payment of money in a civil and commercial case pursuant to a “choice of court” agreement in writing may apply for recognition and enforcement of such judgment in Hong Kong. A “choice of court” agreement in writing is defined as any agreement in writing entered into between parties after the effective date of the Arrangement in which a Hong Kong court or a PRC court is expressly designated as the court having sole jurisdiction for the dispute. Therefore, it is not possible to enforce a judgment rendered by a Hong Kong court in the PRC if the parties in dispute do not enter into a “choice of court” agreement in writing. In addition, on 18 January 2019, the Supreme People’s Court of China (the “SPC”) and the Hong Kong Government signed the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region (關於內地與香港特別行政區法院相互認可和執行民商事案件判決的安排) (the “New Arrangement”). The New Arrangement extends the scope of judicial assistance, and the effective date shall be announced by SPC and the Hong Kong government after SPC issues the judicial interpretation and the Hong Kong legislature passes legislation implementing the New Arrangement. Upon commencement of the New Arrangement, the Arrangement shall be terminated. Therefore, it may be difficult or impossible for investors to recognise and enforce any judgments obtained from foreign courts against the Issuer, or its directors, supervisors or senior management in the PRC.

−35− Government control of currency conversion may adversely affect the value of investors’ investments.

A substantial portion of the operating revenue of the Group is denominated in Renminbi, which is also the reporting currency. Renminbi is not a freely convertible currency. A portion of the Group’s cash may be required to be converted into other currencies in order to meet its foreign currency needs, including cash payments on interests and principal, if any, on the Bonds. However, the PRC government may restrict future access to foreign currencies for current account transactions at its discretion. If this were to occur, the Issuer might not be able to pay interests and principal to the holders of the Bonds or any other foreign currency denominated debt, if any. On the other hand, foreign exchange transactions under capital account in the PRC continue to be not freely convertible and require the approval of SAFE. These limitations may affect the Group’s ability to obtain foreign currencies through equity financing, or to obtain foreign currencies for capital expenditures.

There can be no assurance of the accuracy or comparability of facts and statistics contained in this Offering Circular with respect to the PRC, its economy or the relevant industry.

Facts and other statistics in this Offering Circular relating to the PRC, its economy or the relevant industry in which the Group operates have been directly or indirectly derived from official government publications and certain other public industry sources and although the Issuer believes such facts and statistics are accurate and reliable, the Issuer cannot guarantee the quality or the reliability of such source materials. They have not been prepared or independently verified by the Issuer, the Group, the Joint Lead Managers, the Trustee or the Agents or any of the Group or their respective affiliates, directors, employees, agents, representatives, officers or advisers or any person who controls the Issuer, the Group, or any of them, and, therefore, the Issuer, the Group, the Joint Lead Managers, the Trustee and the Agents and each of their respective affiliates, directors, employees, agents, representatives, officers and advisers and any person who controls any of them makes no representation as to the completeness, accuracy or fairness of such facts or other statistics, which may not be consistent with other information compiled within or outside the PRC. Due to possibly flawed or ineffective collection methods or discrepancies between published information and market practice and other problems, the statistics herein may be incomplete, inaccurate or unfair or may not be comparable to statistics produced for other economies or the same or similar industries in other countries and should not be unduly relied upon. Furthermore, there is no assurance that they are stated or compiled on the same basis or with the same degree of accuracy as may be the case elsewhere. In all cases, investors should give consideration as to how much weight or importance they should attach to or place on such facts or other statistics.

The PRC government has no payment or other obligations under the Bonds.

The PRC government is not an obligor and shall under no circumstances have any obligation arising out of or in connection with the Bonds the Trust Deed or the Agency Agreement in lieu of the Issuer. This position has been reinforced by the Notice of the Ministry of Finance on Issues concerning Regulating the Investment and Financing Behaviours of Financial Enterprises for Local Governments and State-owned Enterprises (財政部關於規範金融企業對地方政府和國有企業投融資行為有關問題的通知)(“Circular 23”) promulgated on 28 March 2018 and took effect on the same day, and the Circular 706 promulgated on 11 May 2018 and took effect on the same day and the Notice on the Requirements relating to the Foreign Debt Issuance Filings and Registrations Application of local State-Owned Enterprises (關於對地方國有企業發行外債申請備案登記有關要求的通知(發改辦外資[2019]666號)) issued by the NDRC on 6 June 2019 which emphasised that local state-owned enterprises shall bear the responsibility for the repayment of foreign debt as independent legal persons, and local governments and their departments shall not pay the foreign debt of local state-owned enterprises directly or by committing to the payment of the foreign debt with financial funds, nor shall they provide guarantees for the issuance of foreign debt by local state-owned enterprises.

The PRC government as the ultimate equity holder of the Issuer only has limited liability in the form of its equity contribution in the Issuer. As such, the PRC government does not have any payment or other obligations under the Bonds, the Trust Deed or the Agency Agreement. Neither does the PRC government provide any assurance on the financial condition of the Issuer and the Group. The Bonds are solely to be repaid by the Issuer as an obligor under the relevant transaction documents and as an independent legal person.

−36− Therefore, investors should base their investment decision only on the financial condition of the Issuer and the Group and base any perceived credit risk associated with an investment in the Bonds only on the Group’s own financial information reflected in its financial statements.

RISKS RELATING TO THE BONDS AND THE STANDBY LETTER OF CREDIT

Any failure to complete the relevant filings under the relevant registration under SAFE within the prescribed time frame following the completion of the issue of the Bonds may have adverse consequences for the Issuer and/or the investors of the Bonds.

SAFE issued the Administrative Measures for Foreign Debt Registration (外債登記管理辦法) (the “Foreign Debt Registration Measures”) on 28 April 2013, which came into effect on 13 May 2013. According to the Foreign Debt Registration Measures, the debtor shall submit foreign debt registration when borrowing foreign debts in accordance with laws and regulations. For the domestic debtors besides financial institutions and banks (“Non-Bank Debtors”), they shall submit filing or registration procedures of foreign debts with the local counterparts of SAFE. According to the Operation Guidelines for Administration of Foreign Debt Registration (外債登記管理操作指引) promulgated together with Foreign Debt Registration Measures and the operational guidelines, if a domestic issuer issues bonds offshore, it shall register with the local branch of SAFE within fifteen working days after the closing date of such issuance. If the Issuer fails to complete the registration with the local branch of SAFE, the Issuer may have difficulty in remitting funds offshore to service payments in respect of the Bonds and investors may encounter difficulties in enforcing judgments obtained in the Hong Kong courts with respect to the Bonds and the Trust Deed in the PRC. In such circumstances, the value and secondary market price of the Bonds may be materially and adversely affected.

The Bonds are unsecured obligations.

As the Bonds are unsecured obligations of the Issuer, the repayment of the Bonds may be compromised if:

• it enters into bankruptcy, liquidation, reorganisation or other winding-up proceedings;

• there is a default in payment under its secured indebtedness or other unsecured indebtedness; or

• there is an acceleration of any of its indebtedness.

If any of these events were to occur, the Issuer’s assets and any amounts received from the sale of such assets may not be sufficient to pay amounts due on the Bonds.

The Bonds may not be a suitable investment for all investors.

The Bonds are complex financial instruments and may be purchased as a way to reduce risk or enhance yield with a measured and appropriate addition of risk to the investor’s overall portfolios. A potential investor should not invest in the Bonds unless they have the expertise (either alone or with the help of a financial adviser) to evaluate how the Bonds will perform under changing conditions, the resulting effects on the value of such Bonds and the impact this investment will have on the potential investor’s overall investment portfolio.

Additionally, the investment activities of certain investors are subject to legal investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its legal advisers to determine whether and to what extent (a) Bonds are legal investments for it, (b) Bonds can be used as collateral for various types of borrowing and (c) other restrictions apply to its purchase of any Bonds. Financial institutions should consult their legal advisers or the appropriate regulators to determine the appropriate treatment of Bonds under any applicable risk-based capital or similar rules.

−37− Each potential investor in the Bonds must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:

• have sufficient knowledge and experience to make a meaningful evaluation of the Bonds, the merits and risks of investing in the Bonds and the information contained or incorporated by reference in this Offering Circular or any applicable supplement;

• have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Bonds and the impact such investment will have on its overall investment portfolio;

• have sufficient financial resources and liquidity to bear all of the risks of an investment in the Bonds;

• understand thoroughly the terms of the Bonds and be familiar with the behaviour of any relevant indices and financial markets; and

• be able to evaluate (either alone or with the help of a financial adviser) possible economic scenarios, such as interest rate and other factors which may affect its investment and the ability to bear the applicable risks.

An active trading market for the Bonds may not develop.

The Bonds are a new issue of securities for which there is currently no trading market. There can be no assurance as to the liquidity of the Bonds or that an active trading market will develop. If such a market were to develop, the Bonds could trade at prices that may be higher or lower than the initial issue price depending on many factors, including prevailing interest rates, the Group’s operations and the market for similar securities. None of the Joint Lead Managers is obligated to make a market in the Bonds, and if it does so it may discontinue such market-making activity at any time without notice. Further, the Bonds may be allocated to a limited number of investors, in which case liquidity may be limited. In addition, the Bonds are being offered pursuant to exemptions from registration under the Securities Act and, as a result, the holders of the Bonds will only be able to resell the Bonds in transactions that have been registered under the Securities Act or in transactions not subject to or exempt from registration under the Securities Act. It is the obligation of investors to ensure that offers and sales of the Bonds within relevant countries comply with applicable securities laws.

The Issuer will follow the applicable corporate disclosure standards for debt securities listed on the SEHK, which standards may be different from those applicable to companies in certain other countries.

The Issuer will be subject to reporting obligations in respect of the Bonds to be listed on the SEHK. The disclosure standards imposed by the SEHK may be different than those imposed by securities exchanges in other countries or regions. As a result, the level of information that is available may not correspond to what Bondholders are accustomed to.

Investment in the Bonds may be subject to foreign exchange risks.

The Bonds are denominated and payable in U.S. dollars. An investor who measures investment returns by reference to a currency other than U.S. dollars would be subject to foreign exchange risks by virtue of an investment in the Bonds, due to, among other things, economic, political and other factors over which the Issuer has no control. Depreciation of the U.S. dollar against such currency could cause a decrease in the effective yield of the Bonds below their stated coupon rates and could result in a loss when the return on the Bonds is translated into such currency. In addition, there may be tax consequences for investors as a result of any foreign currency gains resulting from any investment in the Bonds.

−38− The liquidity and price of the Bonds following the offering may be volatile.

The price and trading volume of the Bonds may be highly volatile. Factors such as variations in the Issuer’s turnover, earnings and cash flows, proposals for new investments, strategic alliances and/or acquisitions, changes in interest rates, fluctuations in price for comparable companies, changes in government regulations and changes in general economic conditions nationally or internationally could cause the price of the Bonds to change. Any such developments may result in large and sudden changes in the trading volume and price of the Bonds. There is no assurance that these developments will not occur in the future.

Developments in other markets may adversely affect the market price of the Bonds.

The market price of the Bonds may be adversely affected by declines in the international financial markets and world economic conditions. The market for the Bonds is, to varying degrees, influenced by economic and market conditions in other markets, especially those in Asia. Although economic conditions are different in each country, investors’ reactions to developments in one country can affect the securities markets and the securities of issuers in other countries, including the PRC. Since the global financial crisis in 2008 and 2009, the international financial markets have experienced significant volatility. If similar developments occur in the international financial markets in the future, the market price of the Bonds could be adversely affected.

The Issuer may be unable to redeem the Bonds upon the due date for redemption thereof.

On the Maturity Date (as defined in the Terms and Conditions), the Bonds will be redeemed at their principal amount, or following the occurrence of a Relevant Event (as defined in the Terms and Conditions), the Issuer may, at the option of any Bondholder, be required to redeem all, but not some only, of such Bondholder’s Bonds at 100 per cent. of their principal amount, together in each case with any interest accrued to, but excluding, the Put Settlement Date. On the Maturity Date or if such an event were to occur, the Issuer may not have sufficient cash in hand and may not be able to arrange financing to redeem the Bonds in time, or on acceptable terms, or at all. The ability to redeem the Bonds on the Maturity Date or in such event may also be limited by the terms of other debt instruments. The Issuer’s failure to repay, repurchase or redeem the Bonds could constitute an event of default under the Bonds, which may also constitute a default under the terms of its other indebtedness.

The PRC Government has no obligations under the Bonds or the Trust Deed.

The PRC Government is not an obligor and shall under no circumstances have any obligation arising out of or in connection with the Bonds and the Trust Deed in lieu of the Issuer. This position has been reinforced by the MOF circular and the Joint Circular.

The Liuzhou SASAC, as the Issuer’s sole shareholder, only has limited liability in the form of its equity contribution in the Issuer. As such, the PRC Government does not have any payment or other obligations under the Bonds and the Trust Deed. The Bonds are solely to be repaid by the Issuer as an obligor under the relevant transaction documents and as an independent legal person.

The Bonds will be structurally subordinated to the existing and future indebtedness and other liabilities and commitments of the Issuer’s existing and future subsidiaries and effectively subordinated to its secured debt to the extent of the value of the collateral securing such indebtedness.

The Bonds will be structurally subordinated to any debt and other liabilities and commitments, including trade payables and lease obligations, of the Issuer’s existing or future subsidiaries, whether or not secured. The Bonds will not be guaranteed by any of the Issuer’s subsidiaries, and the Issuer may not have direct access to the assets of such subsidiaries unless these assets are transferred by dividend or otherwise to it. The ability of such subsidiaries to pay dividends or otherwise transfer assets to the Issuer is subject to various restrictions under applicable laws. The Issuer’s subsidiaries are separate legal entities that have no

−39− obligation to pay any amounts due under the Bonds or make any funds available therefore, whether by dividends, loans or other payments. The Issuer’s right to receive assets of any of its subsidiaries, respectively, upon that subsidiary’s liquidation or reorganisation will be effectively subordinated to the claim of that subsidiary’s creditors (except to the extent that the Issuer is creditor of that subsidiary). Consequently, the Bonds will be effectively subordinated to all liabilities, including trade payables and lease obligations, of any subsidiaries that the Issuer may in the future acquire or establish.

The Bonds are the Issuer’s unsecured obligations and will (i) rank at least equally in right of payment with all its other present and future unsecured and unsubordinated obligations; (ii) be effectively subordinated to all of its present and future secured indebtedness to the extent of the value of the collateral securing such obligations; and (iii) be senior to all of its present and future subordinated obligations. As a result, claims of secured lenders, whether senior or junior, with respect to assets securing their loans will be prior with respect to those assets. In the event of the bankruptcy, insolvency, liquidation, reorganisation, dissolution or other winding up of the Issuer, or upon any acceleration of the Bonds, these assets will be available to pay obligations on the Bonds only after all other debt secured by these assets has been repaid in full. Any remaining assets will be available to the Bondholders rateably with all of other unsecured and unsubordinated creditors of the Issuer, including trade creditors. If there are insufficient assets remaining to pay all these creditors, then all or a portion of the Bonds then outstanding would remain unpaid.

The insolvency laws of the PRC may differ from those of another jurisdiction with which the holders of the Bonds are familiar.

The Issuer is incorporated under the laws of the PRC. Any bankruptcy proceeding relating to the Issuer would likely involve PRC bankruptcy laws, the procedural and substantive provisions of which may differ from comparable provisions of the local insolvency laws of jurisdictions with which the holders of the Bonds are familiar. There is no assurance that the investors will be able to receive the same level of protection under the insolvency laws of the PRC as those in their respective home jurisdiction.

If the Issuer is unable to comply with the restrictions and covenants in its debt agreements (if any), or the Bonds, there could be a default under the terms of these agreements, or the Bonds, which could cause repayment of its debt to be accelerated.

If the Issuer is unable to comply with the restrictions and covenants in the Bonds, or current or future debt obligations and other agreements (if any), there could be a default under the terms of these agreements. In the event of a default under these agreements, the holders of the debt could terminate their commitments to lend to the Issuer, accelerate repayment of the debt, declare all amounts borrowed due and payable or terminate the agreements, as the case may be. Furthermore, some of the debt agreements of the Issuer, contain cross acceleration or cross default provisions. As a result, the default by the Issuer under one debt agreement may cause the acceleration of repayment of debt, including the Bonds, or result in a default under its other debt agreements, including the Bonds. If any of these events occur, there can be no assurance that the assets and cash flows of the Issuer would be sufficient to repay all of its indebtedness in full, or that the Issuer would be able to find alternative financing. Even if the Issuer could obtain alternative financing, there can be no assurance that it would be on terms that are favourable or acceptable to the Issuer.

Modifications and waivers may be made in respect of the Terms and Conditions and the Trust Deed by the Trustee or less than all of the holders of the Bonds, and decisions may be made on behalf of all holders of the Bonds that may be adverse to the interests of the individual holders of the Bonds.

The Terms and Conditions contain provisions for calling meetings of the holders of the Bonds to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Bondholders including those Bondholders who did not attend and vote at the relevant meeting and those Bondholders who voted in a manner contrary to the majority. There is a risk that the decision of the majority of holders of the Bonds may be adverse to the interests of individual holders of the Bonds.

−40− The Terms and Conditions also provide that the Trustee may (but shall not be obliged to), without the consent of the holders of the Bonds, agree to (i) any modification of the Trust Deed, the Terms and Conditions and/or the Agency Agreement and/or the Standby Letter of Credit; and (ii) any other modification (except as mentioned in the Trust Deed), and any waiver or authorisation of any breach or proposed breach, of any of the Terms and Conditions or any of the provisions of the Trust Deed, the Agency Agreement or the Standby Letter of Credit, which in the opinion of the Trustee will not be materially prejudicial to the interests of the holders of the Bonds and to any modification of the Bonds, the Trust Deed and/or the Agency Agreement which in the opinion of the Trustee is of a formal, minor or technical nature or is to correct a manifest error or to comply with any mandatory provision of applicable law.

In addition, the Trustee may (but shall not be obliged to), without the consent of the holders of the Bonds, authorise or waive any proposed breach or breach of the Bonds, the Trust Deed and/or the Agency Agreement and/or the Standby Letter of Credit (other than a proposed breach, or a breach relating to the subject of certain reserved matters) if, in the opinion of the Trustee, the interests of the holders of the Bonds will not be materially prejudiced thereby.

The Trustee may request holders of the Bonds to provide an indemnity and/or security and/or pre-funding to its satisfaction.

In certain circumstances (including without limitation the giving of notice pursuant to Condition 10 (Events of Default) of the Terms and Conditions and the taking of any actions and/or steps and/or the instituting of any proceedings pursuant to Condition 14 (Enforcement) of the Terms and Conditions), the Trustee may (in its sole discretion) request the Bondholders to provide an indemnity and/or security and/or pre-funding to its satisfaction before it takes any actions and/or steps and or institutes any proceedings on behalf of Bondholders. The Trustee shall not be obliged to take any such actions and/or steps and/or institute any such proceedings if not indemnified and/or secured and/or pre-funded to its satisfaction. Negotiating and agreeing to any indemnity and/or security and/or pre-funding can be a lengthy process and may impact on when such actions and/or steps can be taken and/or when such proceedings can be instituted. The Trustee may not be able to take actions and/or steps and/or institute such proceedings, notwithstanding the provision of an indemnity and/or security and/or pre-funding to it, in breach of the terms of the Trust Deed and in such circumstances, or where there is uncertainty or dispute as to the applicable laws or regulations, to the extent permitted by the agreements and the applicable law, it will be for the Bondholders to take such actions and/or steps and/or institute such proceedings directly.

Gains on the transfer of the Bonds and interest payable by the Issuer to overseas Bondholders may be subject to income tax and value-added tax under PRC tax laws.

Under the Enterprise Income Tax Law of the PRC (the “EIT Law”) which took effect on 1 January 2008 and was further amended on 24 February 2017 and 29 December 2018 and its implementation rules, any gains realised on the transfer of the Bonds by holders who are deemed under the EIT Law as non-resident enterprises may be subject to PRC enterprise income tax if such gains are regarded as income derived from sources within the PRC. Under the EIT Law, a “non-resident enterprise” means an enterprise established under the laws of a jurisdiction other than the PRC and whose actual administrative organisation is not in the PRC, which has established offices or premises in the PRC, or which has not established any offices or premises in the PRC but has obtained income derived from sources within the PRC. The gains realised on the transfer of the Bonds by non-resident enterprise Bondholders would be treated as incomes derived from sources within the PRC and be subject to PRC enterprise income tax. In addition, the gains realised on the transfer of the Bonds by individual holders who are not PRC citizens or residents will be subject to PRC individual income tax. If such gains are subject to PRC income tax, the 10 per cent. enterprise income tax rate and 20 per cent. individual income tax rate will apply respectively unless there is an applicable tax treaty or arrangement that reduces or exempts such income tax. The taxable income will be the balance of the total income obtained from the transfer of the Bonds minus all costs and expenses that are permitted under PRC tax laws to be deducted from the income. According to the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (內地和香港特別行政區關於對所得避免雙重徵稅和防止偷漏稅的安排) (the “Arrangement”) which was promulgated on 21 August 2006, Bondholders who are Hong Kong residents, including both enterprise holders and individual holders, will be exempted from PRC income tax on capital gains derived from a sale or exchange of the Bonds if such capital gains are not connected with an office or establishment that the Bondholders have in the PRC and all the other relevant conditions are satisfied.

−41− Pursuant to the EIT Law, the PRC Individual Income Tax Law (the “IIT Law”) which took effect on 30 June 2011 and was further amended on 31 August 2018 which became effective on 1 January 2019, and the implementation regulations in relation to both the EIT Law and IIT Law, PRC income tax at a rate of 10 per cent. or 20 per cent. is normally applicable to PRC-source income derived by non-resident enterprises or individuals respectively, subject to adjustment by applicable treaty. As the Issuer is a PRC resident enterprise for tax purposes, interest paid to non-resident Bondholders may be regarded as PRC-sourced, and therefore be subject to PRC income tax at a rate of 10 per cent. for non-resident enterprise Bondholders and at a rate of 20 per cent. for non-resident individual Bondholders (or a lower treaty rate, if any).

On 23 March 2016, the MOF and the State Administration of Taxation issued the Circular of Full Implementation of Replacing Business Tax with Value-Added Tax Reform (Caishui [2016] No. 36) (“Circular 36”), which introduced a new value-added tax (“VAT”) from 1 May 2016. VAT is applicable where entities or individuals provide services within the PRC. The issuance of the Bonds is likely to be treated as the Bondholders providing the loans to the Issuer, which thus shall be regarded as the financial services for VAT purposes. Therefore, the Bondholders may be regarded as providing the financial services within the PRC and consequently, the Issuer may be obligated to withhold VAT of 6 per cent. and certain surcharges on payments of interest and certain other amounts on the Bonds paid by the Issuer to Bondholders that are non-resident enterprises or individuals. VAT is unlikely to be applicable to any transfer of Bonds between entities or individuals located outside of the PRC and therefore unlikely to be applicable to gains realised upon such transfers of Bonds, but there is uncertainty as to the applicability of VAT if either the seller or buyer of Bonds is located inside the PRC. Circular 36 together with other laws and regulations pertaining to VAT are relatively new, the interpretation and enforcement of such laws and regulations involve uncertainties. Pursuant to the Interim Regulation of the PRC on City Maintenance and Construction Tax (中華人民共和國城市維護建設稅暫行條例(2011修訂)), the Interim Provisions on the Collection of Educational Surcharges (徵收教育附加費的規定(2011修訂)) and the Notice of the Ministry of Finance on the Relevant Matters regarding Unifying the Policies on Local Education Surcharges (財政部關於統一地方教育附加政策有關問題的通知), a city maintenance and construction tax of 7 per cent., an educational surcharge of 3 per cent. and a local educational surcharge of 2 per cent. will be applicable when entities and individuals are obliged to pay VAT (for an aggregate of 12 per cent. surcharge on any VAT payable).

If a Bondholder, being a non-resident enterprise or non-resident individual, is required to pay any PRC income tax on interest or gains on the transfer of the Bonds, the value of the relevant Bondholder’s investment in the Bonds may be materially and adversely affected.

The Bonds will be represented by the Global Certificate and holders of a beneficial interest in the Global Certificate must rely on the procedures of the Clearing Systems.

The Bonds will be represented by beneficial interests in the Global Certificate. Such Global Certificate will be registered in the name of a nominee for, and deposited with, a common depositary for Euroclear and Clearstream (the “Clearing Systems”). Except in the circumstances described in the Global Certificate, investors will not be entitled to receive definitive Certificates. The Clearing System will maintain records of the beneficial interests in the Global Certificate. While the Bonds are represented by the Global Certificate, investors will be able to trade their beneficial interests only through the Clearing Systems.

While the Bonds are represented by the Global Certificate, the Issuer will discharge its payment obligations under the Bonds by making payments to the relevant Clearing System for distribution to their accountholders with an interest in the Bonds.

A holder of a beneficial interest in the Global Certificate must rely on the procedures of the relevant Clearing System to receive payments under the Bonds. None of the Issuer, the Group, the Joint Lead Managers, the Trustee or the Agents or any of their respective affiliates, directors, employees, agents, representatives, officers or advisers or any person who controls any of them has any responsibility or liability for the records relating to, or payments made in respect of, beneficial interests in the Global Certificate.

−42− Bondholders of beneficial interests in the Global Certificate will not have a direct right to vote in respect of the Bonds. Instead, such Bondholders will be permitted to act only to the extent that they are enabled by the relevant Clearing System to appoint appropriate proxies.

Bondholders should be aware that a Definitive Certificate which has a principal amount that is not an integral multiple of the minimum specified denomination may be illiquid and difficult to trade.

In relation to any Bond which has a principal amount consisting of a minimum specified denomination plus a higher integral multiple of another smaller amount, it is possible that the Bonds may be traded in amounts in excess of the minimum specified denomination that are not integral multiples of such minimum specified denomination. In such a case, a Bondholder who, as a result of trading such amounts, holds a principal amount of less than the minimum specified denomination will not receive a definitive Certificate in respect of such holding (should definitive Certificates be printed) and would need to purchase a principal amount of Bonds such that it holds an amount equal to one or more minimum specified denominations. If definitive Certificates are issued, holders should be aware that a definitive Certificate which has a principal amount that is not an integral multiple of the minimum specified denomination may be illiquid and difficult to trade.

The Issuer may issue additional Bonds in the future.

The Issuer may, from time to time, and without prior consent of the Bondholders, create and issue further bonds having the same terms and conditions as the Bonds in all material respects (or in all material respects save for the issue date, first payment of interest on them and the timing for compliance with the Registration Conditions, for completing the Foreign Debt Registration (see Condition 16 (Further Issues) of the Terms and Conditions)) or otherwise raise additional capital through such means and in such manner as it may consider necessary. There can be no assurance that such future issuance or capital raising activity will not adversely affect the market price of the Bonds.

International financial markets and world economic conditions may adversely affect the market price of the Bonds.

The market price of the Bonds may be adversely affected by declines in the international financial markets and world economic conditions. The market for Bonds is, to varying degrees, influenced by economic and market conditions in other markets, especially those in Asia. Although economic conditions are different in each country, investors’ reactions to developments in one country can affect the securities markets and the securities of issuers in other countries, including the PRC. Since the subprime mortgage crisis in 2008, the international financial markets have experienced significant volatility. If similar developments occur in the international financial markets in the future, the market price of the Bonds could be adversely affected.

The LC Bank’s ability to perform its obligations under the Standby Letter of Credit is subject to the financial condition of Hua Xia Bank Co., Limited.

The LC Bank is not a separate and independent legal person but has capacity to carry on its activities within its scope of authorisation given by Hua Xia Bank Co., Limited, and if the assets of the LC Bank are not sufficient to meet the obligation of the LC Bank under the Standby Letter of Credit, Hua Xia Bank Co., Limited would have an obligation to satisfy the balance of the obligations under the Standby Letter of Credit. Therefore, the ability of the LC Bank to make payments under the Standby Letter of Credit will depend on the financial condition of Hua Xia Bank Co., Limited, which could be materially and adversely affected by a number of factors, including, but not limited to, the following:

Impaired loans and advances: Hua Xia Bank Co., Limited’s financial condition will be affected by its impaired loans. If Hua Xia Bank Co., Limited is unable to control effectively and reduce the level of impaired loans and advances in its current loan portfolio and in new loans Hua Xia Bank Co., Limited extends in the future, or Hua Xia Bank Co., Limited’s allowance for impairment losses on loans and advances is insufficient to cover actual loan losses, Hua Xia Bank Co., Limited’s financial condition could be materially and adversely affected.

−43− Collateral and guarantees: A certain portion of Hua Xia Bank Co., Limited’s loans is secured by collateral and backed by guarantees. If Hua Xia Bank Co., Limited is unable to realise the collateral or guarantees securing its loans to cover the outstanding principal and interest balance of such loans due to various factors, Hua Xia Bank’s financial condition could be materially and adversely affected.

Loans to real estate sector and government financing platforms: Hua Xia Bank Co., Limited’s loans and advances to the real estate sector primarily comprise loans issued to real estate companies and individual housing loans. The real estate market may be affected by many factors, including, without limitation, cyclical economic volatility and economic downturns. In addition, the PRC government has in recent years imposed macroeconomic control measures that are aimed at preventing the real estate market from over-heating. Such factors may adversely affect the growth and quality of its loans to the real estate industry and, consequently, Hua Xia Bank Co., Limited’s financial condition and results of operations. Loans to government financing platforms are a part of the loan portfolio of Hua Xia Bank Co., Limited. The government revenues are primarily derived from taxes and land premiums. Therefore, economic cycles and fluctuations in the real estate market may also adversely affect the quality of such loans.

In addition, as neither Hua Xia Bank Co., Limited nor the LC Bank has not waived sovereign immunity for the purpose of the Standby Letter of Credit, it is possible that such immunity is asserted at the time of enforcement of the Standby Letter of Credit.

The Standby Letter of Credit expires within certain days after the Maturity Date.

The Standby Letter of Credit will expire within certain days after the Maturity Date. In the event that the Trustee does not enforce the Standby Letter of Credit by this expiration date, Bondholders will not be able to benefit from the credit protection provided by the LC Bank.

−44− TERMS AND CONDITIONS OF THE BONDS

The following are the terms and conditions of the Bonds substantially in the form in which they (other than the text in italics) will be endorsed on the definitive Certificates and referred to in the Global Certificate.

The issue of U.S.$50,000,000 2.3 per cent. bonds due 2024 (the “Bonds”, which term shall include, unless the context requires otherwise, any further bonds issued pursuant to Condition 16 and to be consolidated and forming a single series therewith) was authorised by a resolution of the board of directors of Guangxi Liuzhou Rail Transit Investment Development Group Co., Ltd. (廣西柳州市軌道交通投資發展集團有限公司) (the “Issuer”) passed on 17 July 2020 and a resolution of the shareholders of the Issuer passed on 29 December 2020. The Bonds are constituted by a trust deed (as amended or supplemented from time to time, the “Trust Deed”) dated on or about 26 August 2021 (the “Issue Date”) between the Issuer and The Bank of New York Mellon, London Branch (the “Trustee”, which expression shall include its successors(s) and all persons for the time being the trustee or trustees under the Trust Deed) as trustee for itself and the Bondholders. These terms and conditions (these “Conditions”) include summaries of, and are subject to, the detailed provisions of the Trust Deed, which includes the form of the certificates evidencing the Bonds. The Bonds are the subject of an agency agreement (as amended or supplemented from time to time, the “Agency Agreement”) dated on or about 26 August 2021 relating to the Bonds among the Issuer, the Trustee, The Bank of New York Mellon, London Branch as principal paying agent (in such capacity, the “Principal Paying Agent”, which expression shall include any successor principal paying agent appointed from time to time in connection with the Bonds), The Bank of New York Mellon SA/NV, Dublin Branch as registrar (in such capacity, the “Registrar”, which expression shall include any successor registrar appointed from time to time in connection with the Bonds) and as transfer agent (in such capacity, the “Transfer Agent”, which expression shall include any successor transfer agent appointed from time to time in connection with the Bonds) and any other agents appointed thereunder, The Bank of New York Mellon, London Branch as the account bank (in such capacity, the “Pre-funding Account Bank”, which expression shall include any successor) with which the Pre-funding Account (as defined below) is held and as the account bank (in such capacity, the “LC Proceeds Account Bank”, which expression shall include any successor) with which the LC Proceeds Account (as defined below) is held. The Bonds will have the benefit of an irrevocable standby letter of credit (the “Standby Letter of Credit”) dated 26 August 2021 issued by Hua Xia Bank Co., Limited Nanning Branch (the “LC Bank”) in favour of the Trustee on behalf of itself and the holders of the Bonds.

Copies of the Trust Deed, the Agency Agreement and the Standby Letter of Credit are available for inspection at all reasonable times during normal business hours (being between 9:00 a.m. and 3:00 p.m., Monday to Friday (other than public holidays)) by the Bondholders (as defined below) at the principal office of the Trustee (being as at the Issue Date at One Canada Square, London E14 5AL, United Kingdom) and at the specified office of the Principal Paying Agent, in each case following prior written request and proof of identity and holding to the satisfaction of the Trustee or, as the case may be, the Principal Paying Agent. References herein to “Paying Agents” mean any paying agents appointed from time to time pursuant to the Agency Agreement with respect to the Bonds and includes the Principal Paying Agent, and references to “Agents” mean the Principal Paying Agent, any other Paying Agents, the Registrar, the Transfer Agent and any other agent or agents appointed from time to time pursuant to the Agency Agreement with respect to the Bonds. The Bondholders are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and are deemed to have notice of those provisions of the Agency Agreement and the Standby Letter of Credit applicable to them.

All capitalised terms that are not defined in these Conditions will have the meanings given to them in the Trust Deed.

1 FORM, SPECIFIED DENOMINATION AND TITLE

The Bonds are issued in the specified denomination of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof.

The Bonds are evidenced by registered certificates (the “Certificates”) and, save as provided in Condition 3(b), each Certificate shall evidence the entire holding of Bonds by the same Holder (as defined below).

−45− Title to the Bonds shall pass by transfer and registration in the Register as described in Condition 3. The Holder of any Bond shall (except as ordered by a court of competent jurisdiction or as otherwise required by law) be treated as its absolute owner for all purposes whether or not it is overdue and regardless of any notice of ownership, trust or an interest in it, any writing on the Certificate (other than the endorsed form of transfer) evidencing it or the theft or loss of such Certificate and no person shall be liable for so treating the Holder.

In these Conditions, “Bondholder” or, in relation to a Bond, “Holder” means the person in whose name a Bond is registered in the Register (or in the case of a joint holding, the first-named thereof).

Upon issue, the Bonds will be evidenced by a global certificate (the “Global Certificate”) registered in the name of a nominee of, and deposited with, a common depository for Euroclear Bank SA/NV and Clearstream Banking S.A.. The Conditions are modified by certain provisions contained in the Global Certificate while any of the Bonds are evidenced by the Global Certificate.

Except in the limited circumstances described in the Global Certificate, owners of interests in the Bonds evidenced by the Global Certificate will not be entitled to receive definitive Certificates in respect of their individual holdings of Bonds. The Bonds are not issuable in bearer form.

2 STATUS

The Bonds constitute direct, unconditional, unsubordinated and unsecured obligations of the Issuer and shall at all times rank pari passu and without any preference among themselves. The payment obligations of the Issuer under the Bonds shall, save for such exceptions as may be provided by applicable laws and regulations and at all times rank at least equally with all its other present and future unsecured and unsubordinated obligations.

3 TRANSFERS OF BONDS AND ISSUE OF CERTIFICATES

(a) Register

The Issuer will cause a register (the “Register”) to be kept at the specified office of the Registrar in accordance with the terms of the Agency Agreement, on which shall be entered the names and addresses of the Holders and the particulars of the Bonds held by them and of all transfers of the Bonds. Each Holder shall be entitled to receive only one Certificate in respect of its entire holding of Bonds, in accordance with the terms of the regulations concerning transfer of Bonds, the initial form of which is scheduled to the Agency Agreement.

(b) Transfer

Subject to the Agency Agreement and Conditions 3(e) and 3(f), a Bond may be transferred by surrendering the Certificate issued in respect of that Bond, with the form of transfer on the back of the Certificate duly completed and signed, at the specified office of the Registrar or the Transfer Agent and any other evidence as the Registrar or the Transfer Agent may require to prove the title of the transferor and the authority of the individuals who have executed such form of transfer.

In the case of a transfer of part only of a holding of Bonds evidenced by a Certificate, a new Certificate shall be issued to the transferee in respect of the part transferred and a further new Certificate in respect of the balance of the holding not transferred shall be issued to the transferor. In the case of a transfer of Bonds to a person who is already a Holder of Bonds, a new Certificate evidencing the enlarged holding shall only be issued against surrender of the Certificate evidencing the existing holding. No transfer of title to a Bond will be valid unless and until entered on the Register.

Transfers of interests in the Bonds evidenced by the Global Certificate will be effected in accordance with the rules of the relevant clearing systems.

−46− (c) Delivery of New Certificates

Each new Certificate to be issued upon transfer of Bonds pursuant to Condition 3(b) shall be made available for delivery within seven business days (as defined below) of receipt by the Registrar or, as the case may be, any Transfer Agent, of a duly completed form of transfer and surrender of the existing Certificate(s). Delivery of the new Certificate(s) shall be made at the specified office of the Transfer Agent or of the Registrar (as the case may be) to whom delivery or surrender of such form of transfer and Certificate shall have been made or, at the option of the Holder making such delivery or surrender as aforesaid and as specified in the relevant form of transfer or otherwise in writing, be mailed by uninsured post at the risk of the Holder entitled to the new Certificate to such address as may be so specified, unless such Holder requests otherwise and pays in advance to the Transfer Agent or the Registrar (as the case may be) the costs of such other method of delivery and/or such insurance as it may specify.

In this Condition 3(c), “business day” means a day, other than a Saturday, Sunday or public holiday, on which commercial banks are generally open for business in the place of the specified office of the Transfer Agent or the Principal Paying Agent or the Registrar (as the case may be).

Except in the limited circumstances described in the Global Certificate, owners of interests in the Bonds will not be entitled to receive physical delivery of Certificates. The Bonds are not issuable in bearer form.

(d) Formalities Free of Charge

Registration of a transfer of Bonds and issuance of new Certificates will be effected without charge by or on behalf of the Issuer or any Agent but upon (i) payment (or the giving of such indemnity and/or security and/or pre-funding as the Issuer or any Agent may require) in respect of any tax, duty or other governmental charges which may be imposed in relation to such transfer; (ii) the Registrar or the relevant Transfer Agent (as the case may be) being satisfied in its absolute discretion with the documents of title or identity of the person making the application and (iii) the Registrar or the relevant Transfer Agent (as the case may be) being satisfied that the regulations concerning transfer of Bonds have been complied with.

(e) Closed Periods

No Holder may require the transfer of a Bond to be registered (i) during the period of seven days ending on (but excluding) the due date for any payment of principal (or premium) in respect of that Bond; or (ii) during the period of seven days ending on (and including) any Record Date (as defined in Condition 8(a)); or (iii) after a Put Exercise Notice has been deposited in respect of such Bond in accordance with Condition 7(c).

(f) Regulations

All transfers of Bonds and entries on the Register will be made subject to the detailed regulations concerning transfer and registration of Bonds, the initial form of which is scheduled to the Agency Agreement. Such regulations may be changed by the Issuer from time to time, with the prior written approval of the Registrar and the Trustee, or by the Registrar, with the prior written approval of the Trustee. A copy of the current regulations will be mailed (free of charge to the Bondholders and at the Issuer’s expense) by the Registrar to any Bondholder who requests one in writing and provides proof of identity and holding to the satisfaction of the Registrar, and will also be made available for inspection by the Registrar to any Bondholder following prior written request and satisfactory proof of holding.

−47− 4 STANDBY LETTER OF CREDIT AND PRE-FUNDING

(a) Standby Letter of Credit: The Bonds will have the benefit of the Standby Letter of Credit issued in favour of the Trustee, on behalf of itself and the holders of the Bonds, by the LC Bank. The Standby Letter of Credit shall be drawable by the Trustee as beneficiary under the Standby Letter of Credit on behalf of itself and the holders of the Bonds upon the presentation of a demand by authenticated SWIFT (or by such method of communication otherwise permitted under the Standby Letter of Credit) sent by the Trustee or The Bank of New York Mellon, Hong Kong Branch acting as a delegate of and on behalf of the Trustee to the LC Bank in accordance with the Standby Letter of Credit (the “Demand”) stating that (i) the Issuer has failed to comply with Condition 4(b) in relation to pre-funding the amount that is required to be pre-funded under these Conditions and/or failed to provide the Required Confirmations (as defined below) in accordance with Condition 4(b) or (ii) an Event of Default (as defined in these Conditions) has occurred and the Trustee has given notice to the Issuer that the Bonds are immediately due and payable in accordance with these Conditions.

Only one drawing is permitted under the Standby Letter of Credit.

Such drawing on the Standby Letter of Credit will be payable in U.S. dollars to the Trustee. Payment received by the Trustee in respect of the Demand will be deposited into the LC Proceeds Account.

The payment made under the Standby Letter of Credit in respect of any amount payable under these Conditions or in connection with the Bonds, the Trust Deed and/or the Agency Agreement shall, to the extent of the drawing paid to or to the order of the Trustee, satisfy the obligations of the Issuer in respect of such amount payable under these Conditions or in connection with the Bonds, the Trust Deed and/or the Agency Agreement.

The LC Bank’s liability under the Standby Letter of Credit shall be expressed and payable in U.S. dollars and shall not exceed U.S.$51,575,000 (the “Maximum Limit”). The Standby Letter of Credit expires at 6:00 p.m. (Hong Kong time) on 26 September 2024.

(b) Pre-funding: In order to provide for the payment of any amount in respect of the Bonds (other than the amounts payable under Condition 7(d)) (the “Relevant Amount”) as the same shall become due, the Issuer shall, in accordance with the Agency Agreement, by no later than 10:00 a.m. (London time) on the Business Day falling ten Business Days (the “Pre-funding Date”) prior to the due date for such payment under these Conditions:

(i) unconditionally pay or procure to be paid the Relevant Amount into the Pre-funding Account; and

(ii) deliver to the Trustee and the Principal Paying Agent by facsimile (x) a Payment and Solvency Certificate signed by any Authorised Signatory of the Issuer, and (y) a copy of the irrevocable payment instruction from the Issuer to the Pre-funding Account Bank to pay the Relevant Amount which was paid into the Pre-funding Account on the Pre-funding Date in full to the Principal Paying Agent by no later than 10:00 a.m. (London time) on the Business Day immediately preceding the due date for such payment (together, the “Required Confirmations”).

If the Relevant Amount has not been paid into the Pre-funding Account in full, or the Trustee does not receive the Required Confirmations, in each case by 10:00 a.m. (London time) on the Business Day immediately following the Pre-funding Date (a “Pre-funding Failure”), the Trustee shall:

(i) give notice (the “Pre-funding Failure Notice”) to the Bondholders of (a) the Pre-funding Failure and (b) the redemption of the Bonds in accordance with Condition 7(d) to occur as a result of the Pre-funding Failure; and

−48− (ii) by no later than 6:00 p.m. (Hong Kong time) on the second Business Day immediately following the Pre-funding Date, issue a Demand to the LC Bank which shall be presented by the Trustee or by The Bank of New York Mellon, Hong Kong Branch acting as the Trustee’s delegate in relation to the Standby Letter of Credit for the principal amount in respect of all of the Bonds then outstanding, together with interest accrued to, but excluding, the Mandatory Redemption Date (as defined in Condition 7(d)) and all fees, costs, expenses, indemnity payments and all other amounts payable by the Issuer under or in connection with the Bonds, the Agency Agreement, the Trust Deed and/or any other transaction document relating to the Bonds, provided that, in accordance with the Standby Letter of Credit, the Trustee need not physically present the Demand to the LC Bank and shall be entitled to submit the Demand by authenticated SWIFT (or, in certain limited circumstances set out in the Standby Letter of Credit, by way of such other means as permitted under the Standby Letter of Credit).

Following receipt by the LC Bank of such Demand by 6:00 p.m. (Hong Kong time) on a Business Day, the LC Bank shall by 10:00 a.m. (Hong Kong time) on the fourth Business Day after the Business Day on which they receive such Demand (or, if such Demand is received after 6:00 p.m. (Hong Kong time) on a Business Day, the fifth Business Day after the Business Day on which they receive such Demand), pay to or to the order of the Trustee the amount in U.S. dollars specified in the Demand to the LC Proceeds Account.

For the purposes of these Conditions:

“Authorised Signatory” has the meaning given to it in the Trust Deed;

“Business Day” means a day (other than a Saturday or a Sunday or a public holiday) on which commercial banks are open for business in Hong Kong, Beijing, London and New York City;

“LC Proceeds Account” means a non-interest bearing U.S. dollar account established in the name of the Trustee with the LC Proceeds Account Bank;

“Payment and Solvency Certificate” means a certificate in substantially the form set forth in the Agency Agreement stating the Relevant Amount in respect of the relevant due date in respect of the Bonds and confirming that (i) payment for the Relevant Amount has been made by the Issuer to the Pre-funding Account in accordance with Condition 4(b) and (ii) the Issuer is solvent; and

“Pre-funding Account” means a non-interest bearing U.S. dollar account established in the name of the Issuer with the Pre-funding Account Bank and designated for the purposes specified above.

5 COVENANTS

(a) Undertakings relating to Foreign Debt Registration and applicable PRC laws

The Issuer undertakes that it will (i) within the prescribed time period after the Issue Date, register or cause to be registered with SAFE the Bonds pursuant to the Administrative Measures for Foreign Debt Registration (《外債登記管理辦法》) and its operating guidelines, effective as of 13 May 2013 and the Circular of the People’s Bank of China on Implementing Macro Prudential Management of Full-covered Cross-border Financing (《中國人民銀行關於全口徑跨境融資宏觀審慎管理有關事宜的通知》) and SAFE Operational Guideline on Capital Account (2020) (資本項目外匯業務操作指引) (2020) (the “Foreign Debt Registration”), (ii) use its best endeavours to complete the Foreign Debt Registration and obtain a registration record from SAFE on or before the Registration Deadline, and (iii) comply with all applicable PRC laws and regulations in relation to the Bonds.

−49− (b) Notification of Completion of the Foreign Debt Registration

The Issuer shall on or before the Registration Deadline and within ten Registration Business Days after the receipt of the registration form or filing evidence from SAFE (or any other document evidencing the completion of the Foreign Debt Registration), provide the Trustee with (A) a certificate in English substantially in the form scheduled to the Trust Deed signed by an Authorised Signatory (as defined in the Trust Deed) of the Issuer confirming the completion of the Foreign Debt Registration and confirming that each copy of the relevant documents as referred to in (B) of this Condition 5(b) is a true and complete copy of the relevant original; and (B) copies of the relevant documents evidencing the Foreign Debt Registration (the items specified in (A) and (B) of this Condition 5(b) together, the “SAFE Registration Documents”).

Within ten Registration Business Days after the SAFE Registration Documents are delivered to the Trustee, the Issuer shall give notice to the Bondholders (substantially in the form scheduled to the Trust Deed and in accordance with Condition 17) confirming the completion of the Foreign Debt Registration.

The Trustee may rely conclusively on the SAFE Registration Documents without further investigation or inquiry and without liability to the Bondholders or any other person for so relying on such SAFE Registration Documents and shall have no obligation or duty to monitor or ensure or to assist with the filing or registration of the Bonds with SAFE on or before the Registration Deadline or to verify the accuracy, validity and/or genuineness of any documents in relation to or in connection with the Foreign Debt Registration and/or the SAFE Registration Documents or to translate or procure the translation into English of any SAFE Registration Document which is in the Chinese language or to give notice to the Bondholders confirming the submission of the completion of the Foreign Debt Registration, and shall not be liable to Bondholders or any other person for not doing so.

The Issuer undertakes that it will within the prescribed time period after the Issue Date file or cause to be filed with the NDRC the requisite information and documents in accordance with the Circular on Promoting the Reform of the Administrative System on the Issuance by Enterprises of Foreign Debt Filings and Registrations (國家發展改革委關於推進企業發行外債備案登記制管理改革的通知(發改外資[2015]2044號)) issued by the NDRC and effective as of 14 September 2015 and any implementation rules as issued by the NDRC from time to time (the “NDRC Post-issue Filing”).

(d) Notification of Completion of the NDRC Post-Issue Filing

The Issuer shall within ten Registration Business Days after the submission of the NDRC Post-issue Filing provide the Trustee with (A) a certificate in English substantially in the form scheduled to the Trust Deed signed by an Authorised Signatory of the Issuer confirming the completion of the NDRC Post-issue Filing and confirming that each copy of the relevant documents as referred to in (B) (if any) is a true and complete copy of the relevant original; and (B) copies of the relevant documents evidencing the NDRC Post-issue Filing (if any) (the items specified in (A) and (B) together, the “NDRC Registration Documents”). In addition, the Issuer shall, within ten Registration Business Days after the documents comprising the NDRC Registration Documents are delivered to the Trustee, give notice to the Bondholders in the form scheduled to the Trust Deed (in accordance with Condition 17) confirming the completion of the NDRC Post-issue Filing.

−50− The Trustee may rely conclusively on the NDRC Registration Documents without further investigation or inquiry and without liability to the Bondholders or any other person for so relying on such NDRC Registration Documents and shall have no obligation or duty to monitor or ensure or to assist with the filing with the NDRC on or before the Registration Deadline or to verify the accuracy, validity and/or genuineness of any documents in relation to or in connection with NDRC Post-Issue Filing and/or the NDRC Registration Documents or to translate or procure the translation into English of any NDRC Registration Documents which is in the Chinese language or to give notice to the Bondholders confirming the submission of the NDRC Post-Issue Filing, and shall not be liable to Bondholders or any other person for not doing so.

(e) Financial Information

So long as any Bond remains outstanding (as defined in the Trust Deed) the Issuer will furnish the Trustee with:

(i) a Compliance Certificate (on which the Trustee may rely conclusively as to such compliance without investigation or inquiry and the Trustee shall not be liable to any Bondholder or any other person for such reliance) and a copy of the relevant Audited Financial Reports, in each case within 180 days of the end of each Relevant Period prepared in accordance with the Accounting Standards for Business Enterprises in China (“PRC GAAP”) (audited by a nationally recognised firm of independent accountants), and if such statements shall be in the Chinese language, together with an English translation of the same translated by (A) a nationally recognised firm of independent accountants or (B) a professional translation service provider and checked by a nationally recognised firm of independent accountants, together with a certificate in English signed by an Authorised Signatory of the Issuer certifying that such translation is complete and accurate;

(ii) a copy of the Unaudited Financial Reports in Chinese or English within 120 days of the end of each Relevant Period prepared on a basis consistent with the Audited Financial Reports, and if such statements shall be in the Chinese language, together with an English translation of the same translated by (A) a nationally recognised firm of independent accountants or (B) a professional translation service provider and checked by a nationally recognised firm of independent accountants, together with a certificate in English signed by an Authorised Signatory of the Issuer certifying that such translation is complete and accurate; and

(iii) a Compliance Certificate (on which the Trustee may rely conclusively as to such compliance without investigation or inquiry and the Trustee shall not be liable to any Bondholder or any other person for such reliance) within 14 days of any request therefor from the Trustee or otherwise within the date stated in such request of the Trustee.

(f) Definitions

In these Conditions:

“Audited Financial Reports” means for a Relevant Period, the annual audited consolidated balance sheet, income statement, statement of cash flows and statements of changes in owners’ equity of the Issuer together with any statements, reports (including any directors’ and auditors’ reports) and notes attached to or intended to be read with any of them;

−51− “Compliance Certificate” means a certificate in English of the Issuer signed by any Authorised Signatory of the Issuer certifying that, having made all reasonable enquiries, to the best of the knowledge, information and belief of the Issuer as at a date (the “Certification Date”) not more than five days before the date of the certificate:

(i) no Event of Default (as defined in Condition 10) or Potential Event of Default (as defined in the Trust Deed) had occurred since the Certification Date of the last such certificate or (if none) the date of the Trust Deed or, if such an event had occurred, giving details of it; and

(ii) the Issuer has complied with all its covenants and obligations under the Trust Deed and the Bonds or, if any non-compliance had occurred, giving details of the same;

“NDRC” means the National Development and Reform Commission of the PRC or its local branches;

“person” means any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organisation or government or any agency or political subdivision thereof;

“PRC” means the People’s Republic of China, which shall for the purpose of these Conditions only, exclude the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan;

“Registration Business Day” means a day, other than a Saturday, Sunday or public holiday, on which commercial banks are generally open for business in Beijing;

“Registration Deadline” means the day falling 120 calendar days after the Issue Date;

“Relevant Period” means (i) in relation to the Audited Financial Reports, each period of twelve months ending on the last day of the Issuer’s financial year (being 31 December of that financial year); and (ii) in relation to the Unaudited Financial Reports, each period of six months ending on the last day of the Issuer’s first half financial year (being 30 June of that financial year);

“SAFE” means the State Administration of Foreign Exchange of the PRC or its local branches;

a“Subsidiary” of any person means any entity whose financial statements at any time are required by law or in accordance with generally accepted accounting principles to be fully consolidated with those of that person; and

“Unaudited Financial Reports” means for a Relevant Period, the semi-annual unaudited consolidated balance sheet, income statement, statement of cash flows and statements of changes in owners’ equity of the Issuer together with any statements, reports (including any directors’ and auditors’ review reports, if any) and notes attached to or intended to be read with any of them, if any.

6 INTEREST

The Bonds bear interest on their outstanding principal amount from and including the Issue Date at the rate of 2.3 per cent. per annum, payable semi-annually in arrear in equal instalments of U.S.$11.5 per Calculation Amount (as defined below) on 26 February and 26 August in each year (each an “Interest Payment Date”), commencing on 26 February 2022.

−52− Each Bond will cease to bear interest from the due date for redemption unless, upon surrender of the Certificate evidencing such Bond, payment of principal or premium (if any) is improperly withheld or refused. In such event it shall continue to bear interest at such rate (both before and after judgment) until whichever is the earlier of (a) the day on which all sums due in respect of such Bond up to that day are received by or on behalf of the relevant holders, and (b) the day falling seven days after the Trustee or the Principal Paying Agent has notified Bondholders of receipt of all sums due in respect of all the Bonds up to that seventh day (except to the extent that there is failure in the subsequent payment to the relevant Holders under these Conditions).

If interest is required to be calculated for a period of less than a complete Interest Period (as defined below), the relevant day-count fraction will be determined on the basis of a 360-day year consisting of 12 months of 30 days each and, in the case of an incomplete month, the number of days elapsed. In these Conditions, the period beginning on and including the Issue Date and ending on but excluding the first Interest Payment Date and each successive period beginning on and including an Interest Payment Date and ending on but excluding the next succeeding Interest Payment Date is called an “Interest Period”.

Interest in respect of any Bond shall be calculated per U.S.$1,000 in principal amount of the Bonds (the “Calculation Amount”). The amount of interest payable per Calculation Amount for any period shall, save as provided above in relation to equal instalments, be equal to the product of the rate of interest specified above, the Calculation Amount and the day-count fraction for the relevant period, rounding the resulting figure to the nearest cent (half a cent being rounded upwards).

7 REDEMPTION AND PURCHASE

(a) Final Redemption

Unless previously redeemed, or purchased and cancelled, the Bonds will be redeemed at their principal amount on 26 August 2024 (the “Maturity Date”). The Bonds may not be redeemed at the option of the Issuer other than in accordance with this Condition 7.

(b) Redemption for Taxation Reasons

The Bonds may be redeemed at the option of the Issuer in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days’ notice (a “Tax Redemption Notice”) to the Bondholders in accordance with Condition 17 (which shall be irrevocable) and in writing to the Trustee and the Principal Paying Agent (which Tax Redemption Notice shall specify the date for redemption and the method by which payment shall be made to the Bondholders), at their principal amount (together with any interest accrued up to, but excluding, the date fixed for redemption) if the Issuer satisfies the Trustee immediately prior to the giving of such notice that (i) the Issuer has or will become obliged to pay Additional Tax Amounts as provided or referred to in Condition 9 as a result of any change in, or amendment to, the laws or regulations of the PRC or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of, such laws or regulations (including but not limited to any decision by a court of competent jurisdiction), which change or amendment becomes effective on or after 23 August 2021, and (ii) such obligation cannot be avoided by the Issuer taking reasonable measures available to it, provided that no Tax Redemption Notice shall be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such Additional Tax Amounts were a payment in respect of the Bonds then due. Prior to the giving of any Tax Redemption Notice pursuant to this Condition 7(b), the Issuer shall deliver to the Trustee (A) a certificate in English signed by an Authorised Signatory of the Issuer stating that the obligation referred to in (i) above of this Condition 7(b) cannot be avoided by the Issuer taking reasonable measures available to it, and (B) an opinion addressed to and in form and substance satisfactory to the Trustee, of independent tax or legal advisers of recognised standing to the effect that the Issuer has or will become obliged to pay such Additional Tax Amounts as a result of such change or amendments or statement. The

−53− Trustee shall be entitled (but shall not be obliged) to accept and rely upon such certificate and opinion (without further investigation or inquiry and without liability to the Bondholders or any other person for so accepting and relying on such certificate and opinion) as sufficient evidence of the satisfaction of the conditions precedent set out in (i) and (ii) above of this Condition 7(b), in which event they shall be conclusive and binding on the Bondholders.

Following the occurrence of a Relevant Event, the Holder of any Bond will have the right (the “Relevant Event Put Right”), at such Holder’s option, to require the Issuer to redeem all, but not some only, of such Holder’s Bonds on the Put Settlement Date (as defined below in this Condition 7(c)) at 100 per cent. of their principal amount, together in each case with any interest accrued up to, but excluding, the Put Settlement Date. To exercise such right, the Holder of the relevant Bond must deposit at the specified office of the Principal Paying Agent or any other Paying Agent a duly completed and signed notice of redemption substantially, in the form scheduled to the Agency Agreement, obtainable from the specified office of any Paying Agent (a “Put Exercise Notice”), together with the Certificate evidencing the Bonds to be redeemed, by not later than 30 days following a Relevant Event, or, if later, 30 days following the date upon which notice thereof is given to Bondholders by the Issuer in accordance with Condition 17.

The “Put Settlement Date” shall be the fourteenth day (in the case of a redemption for a Change of Control) or the tenth day (in the case of a redemption for a No Registration Event) after the expiry of such period of 30 days as referred to above.

A Put Exercise Notice, once delivered, shall be irrevocable and the Issuer shall redeem the Bonds which are the subject of the Put Exercise Notices delivered as aforesaid on the Put Settlement Date.

Not later than 14 days (in the case of a Change of Control) or five days (in the case of a No Registration Event) following the day on which the Issuer becomes aware of a Relevant Event, the Issuer shall procure that notice regarding such Relevant Event shall be delivered to the Trustee in writing and to the Holders (in accordance with Condition 17) stating:

(i) the applicable Put Settlement Date;

(ii) the date of the Relevant Event and, briefly, the events causing, as applicable, the Change of Control or No Registration Event;

(iii) the date by which the Put Exercise Notice must be given;

(iv) the redemption amount and the method by which such amount will be paid;

(v) the names and addresses of all Paying Agents;

(vi) the procedures that Holders must follow and the requirements that Holders must satisfy in order to exercise the Relevant Event Put Right; and

(vii) that a Put Exercise Notice, once validly given, may not be withdrawn.

Neither the Agents nor the Trustee shall be required to monitor or to take any steps to ascertain whether a Relevant Event or any event which could lead to a Relevant Event has occurred or may occur and none of them shall have any obligation or duty to verify the accuracy, validity and/or genuineness of any documents in relation to or connection with the Registration Conditions, and none of the Trustee or the Agents shall be liable to the Holders, the Issuer or any other person for not doing so.

−54− For the purpose of these Conditions:

(A) a “Change of Control” occurs when:

(i) the Controlling Person(s) cease to directly or indirectly have Control over the Issuer; or

(ii) the Issuer consolidates with or merges into or sells or transfers all or substantially all of the Issuer’s assets to any person or persons, except where such person(s) (in the case of asset sale or transfer) or the surviving entity (in the case of consolidation or merger) is/are directly or indirectly Controlled by the Controlling Person(s);

(B) “Control” means (where applicable), with respect to a person, either (i) or (ii) is satisfied: (i) the ownership or control of more than 80 per cent. of the Voting Rights of such person, whether obtained directly or indirectly, or (ii) the right to appoint and/or remove at least the majority of the members of such person’s board of directors or other governing body, whether obtained directly or indirectly, and whether obtained by ownership of share capital, the possession of Voting Rights, contract or otherwise; the term “Controlled” has a meaning correlative to the foregoing;

(C) “Controlling Person(s)” means (i) the State-owned Assets Supervision and Administration Commission of Liuzhou Municipal People’s Government (柳州市人民政府國有資產監督管理委員會) or (ii) the government of the PRC;

(D) a “No Registration Event” occurs when the Registration Conditions are not satisfied on or before the Registration Deadline;

(E) a “person” includes any individual company, corporation, firm, partnership, joint venture, undertaking, association, organisation, trust, state or agency of a state (in each case whether or not being a separate legal entity) but does not include the Issuer’s directors or any other governing board and does not include the Issuer’s wholly-owned direct or indirect subsidiaries;

(F) “Registration Conditions” means the receipt by the Trustee of the SAFE Registration Documents as set forth in Condition 5(b);

(G) a “Relevant Event” will be deemed to occur if:

(i) there is a No Registration Event; or

(ii) there is a Change of Control; and

(H) “Voting Rights” means the rights generally to vote at a general meeting of shareholders of a specified person.

(d) Mandatory Redemption upon Pre-funding Failure:

The Bonds shall be redeemed at their principal amount on the Interest Payment Date immediately falling after the date the Pre-funding Failure Notice is given to the Bondholders in accordance with Condition 4(b) (the “Mandatory Redemption Date”), together with interest accrued up to, but excluding, the Mandatory Redemption Date.

If the holder of any Bond shall have exercised its right to require the Issuer to redeem its Bond under Condition 7(c) and a Pre-funding Failure Notice is given to the Bondholders in accordance with Condition 4(b) as a result of the Pre-funding Failure relating to the amount payable pursuant to such redemption, such holder’s Bonds shall be redeemed in whole, but not

−55− in part, at their principal amount in accordance with this Condition 7(d) on the Put Settlement Date, together with interest accrued up to, but excluding, such Put Settlement Date, provided that if such Pre-funding Failure occurs and a Pre-funding Failure Notice has been given or is given to the Bondholders in respect of a scheduled payment of principal or interest payable under Condition 6 or Condition 7(a), the Put Settlement Date shall be the Mandatory Redemption Date.

(e) Notice of Redemption

All Bonds in respect of which any notice of redemption is given under this Condition 7 shall be redeemed on the date, in such place and in such manner as specified in such notice in accordance with this Condition 7. If there is more than one notice of redemption given in respect of any Bond (which shall include any notice given by the Issuer pursuant to Condition 7(b) and any Put Exercise Notice given by a Bondholder pursuant to Condition 7(c)), the notice given first in time shall prevail and in the event of two notices being given on the same date, the first to be given shall prevail. Neither the Trustee nor any of the Agents shall be responsible for calculating or verifying any calculations of any amounts payable under any notice of redemption or Put Exercise Notice and none of them shall be liable to Bondholders, the Issuer or any other person for not doing so.

(f) Purchase

The Issuer and/or its Subsidiaries may at any time purchase Bonds in the open market or otherwise at any price. The Bonds so purchased, while held by or on behalf of the Issuer or any of its Subsidiaries, shall not entitle the Holder to vote at any meetings of the Holders and shall not be deemed to be outstanding for certain purposes, including without limitation for the purpose of calculating quorums at meetings of the Bondholders or for the purposes of Condition 10, Condition 13(a) and Condition 14.

(g) Cancellation

All Certificates evidencing the Bonds purchased by or on behalf of the Issuer and/or its Subsidiaries may be held, resold or surrendered to the Registrar for cancellation. Any Certificates so surrendered for cancellation may not be reissued or resold and the obligations of the Issuer in respect of any such Bonds shall be discharged.

8 PAYMENTS

(a) Method of Payment:

(i) Payments of principal and premium (if any) shall be made (subject to surrender of the relevant Certificates at the specified office of the Principal Paying Agent or any other Paying Agent if no further payment falls to be made in respect of the Bonds evidenced by such Certificates) in the manner provided in Condition 8(a)(ii) below.

(ii) Interest on each Bond shall be paid on the due date for payment to the person shown on the Register at the close of business on the fifth Payment Business Day before the due date for payment thereof (the “Record Date”). Payments of interest on each Bond shall be made in U.S. dollar wire transfer to the registered account of the Bondholder. For the purposes of this Condition 8(a), a Bondholder’s “registered account” means the U.S. dollar account maintained by or on behalf of it with a bank that processes payments in U.S. dollars, details of which appear on the Register at the close of business on the Record Date.

−56− So long as the Bonds are evidenced by the Global Certificate and the Global Certificate is held on behalf of the relevant clearing system, each payment in respect of the Global Certificate will be made to the person shown as the Holder thereof in the Register at the close of business (in the relevant clearing system) on the Clearing System Business Day before the due date for such payment, where “Clearing System Business Day” means a weekday (Monday to Friday, inclusive) except 25 December and 1 January.

(iii) If the amount of principal being paid upon surrender of the relevant Certificate is less than the outstanding principal amount of such Certificate, the Registrar will annotate the Register with the amount of principal so paid and will (if so requested in writing by the Issuer or a Bondholder) issue a new Certificate with a principal amount equal to the remaining unpaid outstanding principal amount. If the amount of premium (if any) or interest being paid is less than the amount then due, the Registrar will annotate the Register with the amount of premium (if any) or interest so paid.

(b) Payments subject to Fiscal Laws: Payments will be subject in all cases to (i) any fiscal or other laws and regulations applicable thereto in the place of payment, but without prejudice to the provisions of Condition 9 and (ii) any withholding or deduction required pursuant to an agreement described in Section 1471(b) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) or otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any regulations or agreements thereunder, any official interpretations thereof, or (without prejudice to the provisions of Condition 9) any law implementing an intergovernmental approach thereto. No commission or expenses shall be charged to the Bondholders in respect of such payments.

(c) Payment Initiation: Payment instructions (for value on the due date or, if that is not a Payment Business Day, for value the first following day which is a Payment Business Day) will be initiated, on the due date for payment (or, if that date is not a Payment Business Day, on the first following day which is a Payment Business Day), or, in the case of payments of principal and premium (if any) where the relevant Certificate has not been surrendered at the specified office of any Transfer Agent or of the Registrar, on the first Payment Business Day on which the Principal Paying Agent is open for business and on or following which the relevant Certificate is surrendered.

(d) Appointment of Agents: The Principal Paying Agent, the Registrar and the Transfer Agent initially appointed by the Issuer and their respective specified offices are listed below. The Principal Paying Agent, the Registrar and the Transfer Agent act solely as agents of the Issuer and do not assume any obligation or relationship of agency or trust for or with any Bondholder. The Issuer reserves the right at any time with the prior written approval of the Trustee to vary or terminate the appointment of the Principal Paying Agent, the Registrar, any Transfer Agent or any of the other Agents and to appoint additional or other Agents, provided that the Issuer shall at all times maintain (i) a Principal Paying Agent, (ii) a Registrar, (iii) a Transfer Agent and (iv) such other agents as may be required by any other stock exchange on which the Bonds may be listed.

Notice of any such termination or appointment or any change of any specified office of an Agent shall promptly be given by the Issuer to the Bondholders.

(e) Delay in Payment: Bondholders will not be entitled to any interest or other payment for any delay after the due date in receiving the amount due on a Bond if the due date is not a Payment Business Day, or if the Bondholder is late in surrendering or cannot surrender its Certificate (if required to do so).

(f) Non-Payment Business Days: If any date for payment in respect of any Bond is not a Payment Business Day, the Holder shall not be entitled to payment until the next following Payment Business Day nor to any interest or other sum in respect of such postponed payment.

−57− In this Condition 8, “Payment Business Day” means a day (other than a Saturday, a Sunday or a public holiday) on which commercial banks and foreign exchange markets are generally open for business and settlement of U.S. dollars payments in Hong Kong and New York City and the place in which the specified office of the Principal Paying Agent is located, in the case of presentation of a Certificate, in the place in which the Certificate is presented.

9 TAXATION

All payments of principal, premium (if any) and interest by or on behalf of the Issuer in respect of the Bonds shall be made free and clear of, and without withholding or deduction for or on account of, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by the PRC or any political subdivision or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law.

Where such withholding or deduction is made by the Issuer for or on account of any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected withhold or assessed by or within the PRC at a rate up to and including the aggregate rate applicable on 23 August 2021 (the “Applicable Rate”), the Issuer will increase the amounts paid by it to the extent required, so that the net amount received by Bondholders equals the amounts which would otherwise have been receivable by them had no such withholding or deduction been required.

If the Issuer is required to make any deduction or withholding for or on account of any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected withhold or assessed by or within the PRC at a rate in excess of the Applicable Rate, the Issuer shall pay such additional amounts (“Additional Tax Amounts”) as will result in receipt by the Bondholders of such amounts as would have been received by them had no such withholding or deduction been required.

Notwithstanding other clauses in these Conditions, no Additional Tax Amounts shall be payable in respect of any Bond:

(a) Other connection: to a Holder (or to a third party on behalf of a Holder) who is liable to such taxes, duties, assessments or governmental charges in respect of such Bond by reason of his having some connection with the PRC other than the mere holding of the Bond; or

(b) Surrender more than 30 days after the Relevant Date: in respect of which the Certificate evidencing it is presented (where presentation is required) for payment more than 30 days after the Relevant Date except to the extent that the Holder of it would have been entitled to such Additional Tax Amounts on surrendering the Certificate evidencing such Bond for payment on the last day of such period of 30 days.

References in these Conditions to principal, premium (if any) and interest shall be deemed also to refer to any Additional Tax Amounts which may be payable under this Condition 9 or any undertaking or covenant given in addition thereto or in substitution therefor pursuant to the Trust Deed.

“Relevant Date” in respect of any Bond means the date on which payment in respect of it first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which payment in full of the amount outstanding is made or (if earlier) the date seven days after that on which notice is duly given to the Bondholders that, upon further surrender of the Certificate evidencing such Bond being made in accordance with these Conditions, such payment will be made, provided that payment is in fact made upon such surrender.

Neither the Trustee nor any Agent shall be responsible for paying any tax, duty, charges, assessments, government charges, withholding or other payment referred to in this Condition 9 in connection with the Bonds or for determining whether such amounts are payable or the amount thereof, and none of them shall be responsible or liable for any failure by the Issuer, any Bondholder or any other person

−58− to pay such tax, duty, charges, assessments, government charges, withholding or other payment in any jurisdiction or be responsible to provide any notice or information in relation to the Bonds in connection with payment of such tax, duty, charges, assessments, government charges, withholding or other payment imposed by or in any jurisdiction, including without limitation any notice or information to the Trustee or any Agent that would permit, enable or facilitate the payment of any principal, premium (if any), interest or other amount under or in respect of the Bonds without deduction or withholding for or on account of any tax, duty, charges, assessments, government charges, withholding or other payment imposed by or in any jurisdiction.

10 EVENTS OF DEFAULT

If an Event of Default (as defined below) occurs the Trustee at its discretion may, and if so requested in writing by Bondholders holding at least 25 per cent. of the aggregate principal amount of the Bonds then outstanding or if so directed by an Extraordinary Resolution shall (provided in any such case that the Trustee shall have first been indemnified and/or secured and/or pre-funded to its satisfaction), give written notice to the Issuer that the Bonds are, and they shall immediately become, due and payable at their principal amount together (if applicable) with any accrued and unpaid interest.

An “Event of Default” occurs if:

(a) With Respect to the Issuer:

(i) Non-Payment: there has been a failure to pay (i) the principal or premium (if any) of any of the Bonds when due or (ii) any interest on any of the Bonds when due and such failure continues for a period of seven days; or

(ii) Breach of Other Obligations: the Issuer does not perform or comply with any one or more of its obligations under the Bonds or the Trust Deed (other than an event which gives rise to a right of redemption pursuant to Condition 7(c)) and such default (A) is incapable of remedy or (B) being a default which is capable of remedy, remains unremedied for 30 days after notice of such default shall have been given to the Issuer by the Trustee; provided that if there has been a breach by the Issuer of its obligations to pre-fund any amount in respect of the Bonds in accordance with Condition 4(b) and such amount has subsequently been paid by the LC Bank following a drawing under the Standby Letter of Credit to or to the order of the Trustee and paid to holders of the Bonds, then such breach will not constitute an Event of Default under this Condition 10(a)(ii); or

(iii) Cross-Acceleration: (i) any other present or future indebtedness of the Issuer or any of its Subsidiaries for or in respect of moneys borrowed or raised becomes due and payable prior to its stated maturity by reason of any actual or potential default, event of default or the like (howsoever described), or (ii) any such indebtedness is not paid when due or, as the case may be, within any originally applicable grace period, or (iii) the Issuer or any of its Subsidiaries fails to pay when due any amount payable by it under any present or future guarantee for, or indemnity in respect of, any moneys borrowed or raised provided that the aggregate amount of the relevant indebtedness, guarantees and indemnities in respect of which one or more of the events mentioned above in this Condition 10(a)(iii) have occurred in aggregate equals or exceeds U.S.$30,000,000 or its equivalent (on the basis of the middle spot rate for the relevant currency against the U.S. dollar as quoted by any leading bank on the day on which this Condition 10(a)(iii) operates); or

(iv) Enforcement Proceedings: a distress, attachment, execution or other legal process is levied, enforced or sued out on or against any material part of the property, assets or revenues of the Issuer or any Principal Subsidiary and is not discharged or stayed for a period of 45 days; or

−59− (v) Security Enforced: any mortgage, charge, pledge, lien or other encumbrance, present or future, created or assumed by the Issuer or any Principal Subsidiary on the whole or any material part of its assets becomes enforceable and any step is taken to enforce it (including the taking of possession or the appointment of a receiver, manager or other similar person) and is not discharged within 45 days; or

(vi) Insolvency: the Issuer or any Principal Subsidiary is, or is deemed by law or a court to be, insolvent or bankrupt or unable to pay its debts as and when such debts fall due, stops, suspends or threatens to stop or suspend payment of all or a material part of its debts, proposes or makes any agreement for the deferral, rescheduling or other readjustment of all of its debts, proposes or makes a general assignment or an arrangement or composition with or for the benefit of the relevant creditors in respect of all or a material part of its debts or a moratorium is agreed or declared in respect of or affecting all or any material part of the debts of the Issuer or any Principal Subsidiary; or

(vii) Winding-up: an order of any court of competent jurisdiction is made or an effective resolution passed for the winding-up or dissolution of the Issuer or any Principal Subsidiary (except for any voluntary solvent winding-up), or the Issuer or any Principal Subsidiary ceases or threatens to cease to carry on all or substantially all of its business or operations, except for the purpose of and followed by a reconstruction, amalgamation, reorganisation, merger or consolidation (i) on terms approved by an Extraordinary Resolution of the Bondholders, or (ii) in the case of a Principal Subsidiary, whereby the undertaking and assets of such Subsidiary are transferred to or otherwise vested in the Issuer or another of its Subsidiaries, or (iii) a disposal of or by a Principal Subsidiary on an arm’s length basis and the considerations from such disposal shall be transferred to or otherwise vested in the Issuer or any of its Subsidiaries; or

(viii) Nationalisation: seizure, compulsory acquisition, expropriation or nationalisation by any person acting under the authority of any national, regional or local government of all or a substantial part of the assets of the Issuer or any Principal Subsidiary, which would have a material adverse effect on the Issuer’s ability to pay the principal or premium (if any) of, or the interest on, the Bonds; or

(ix) Authorisation and Consents: any action, condition or thing (including the obtaining or effecting of any necessary consent, approval, authorisation, exemption, filing, licence, order, recording or registration) at any time required to be taken, fulfilled or done in order (i) to enable the Issuer lawfully to enter into, exercise its rights and perform and comply with its obligations under the Bonds and the Trust Deed, (ii) to ensure that those obligations are legally binding and enforceable, and (iii) to make the Bonds and the Trust Deed admissible in evidence in the courts of Hong Kong is not taken, fulfilled or done; or

(x) Illegality: it is or will become unlawful for the Issuer to perform or comply with any one or more of its obligations under any of the Bonds or the Trust Deed; or

(xi) Standby Letter of Credit: the Standby Letter of Credit is not (or is claimed by the LC Bank not to be) enforceable, valid or in full force and effect; or

(xii) Analogous Events: any event occurs which under the laws of any relevant jurisdiction has an analogous effect to any of the events referred to in any of Conditions 9(d) to 9(h) (both inclusive).

−60− In this Condition 9, “Principal Subsidiary” means any Subsidiary of the Issuer:

(a) whose operating income or (in the case of a Subsidiary which itself has Subsidiaries) consolidated operating income, as shown by its latest audited income statement are at least five per cent. of the consolidated operating income as shown by the latest audited consolidated income statement of the Issuer and its Subsidiaries including, for the avoidance of doubt, the Issuer and its Subsidiaries’ share of profits of subsidiaries not consolidated and of jointly controlled entities; or

(b) whose operating profits or (in the case of a Subsidiary which itself has Subsidiaries) consolidated operating profit, as shown by its latest audited income statement are at least five per cent. of the consolidated operating profit as shown by the latest audited consolidated income statement of the Issuer and its Subsidiaries including, for the avoidance of doubt, the Issuer and its consolidated Subsidiaries’ share of profits of Subsidiaries not consolidated and of jointly controlled entities; or

(c) whose total assets or (in the case of a Subsidiary which itself has Subsidiaries) consolidated total assets, as shown by its latest audited balance sheet are at least five per cent. of the amount which equals the amount included in the consolidated total assets of the Issuer and its Subsidiaries as shown by the latest audited consolidated balance sheet of the Issuer and its Subsidiaries as being represented by the investment of the Issuer in each Subsidiary whose accounts are not consolidated with the consolidated audited accounts of the Issuer; or

(d) to which is transferred the whole or substantially the whole of the assets of a Subsidiary which immediately prior to such transfer was a Principal Subsidiary, provided that the Principal Subsidiary which so transfers its assets shall forthwith upon such transfer cease to be a Principal Subsidiary and the Subsidiary to which the assets are so transferred shall become a Principal Subsidiary at the date on which the first audited accounts (consolidated, if appropriate) of the Issuer prepared as of a date later than such transfer are issued unless such Subsidiary would continue to be a Principal Subsidiary on the basis of such accounts by virtue of the provisions of paragraphs (a), (b) or (c) above of this definition; provided that, in relation to paragraphs (a), (b) and (c) above of this definition:

(i) in the case of a corporation or other business entity becoming a Subsidiary after the end of the financial period to which the latest consolidated audited accounts of the Issuer relate, the reference to the then latest consolidated audited accounts of the Issuer for the purposes of the calculation above shall, until consolidated audited accounts of the Issuer for the financial period in which the relevant corporation or other business entity becomes a Subsidiary are available be deemed to be a reference to the then latest consolidated audited accounts of the Issuer adjusted to consolidate the latest audited accounts (consolidated in the case of a Subsidiary which itself has Subsidiaries) of such Subsidiary in such accounts;

(ii) if at any relevant time in relation to the Issuer or any Subsidiary which itself has Subsidiaries no consolidated accounts are prepared and audited, operating income, operating profit or total assets of the Issuer and/or any such Subsidiary shall be determined on the basis of pro forma consolidated accounts prepared for this purpose by the Issuer;

(iii) if at any relevant time in relation to any Subsidiary, no accounts are audited, its operating income, operating profit or gross assets (consolidated, if appropriate) shall be determined on the basis of pro forma accounts (consolidated, if appropriate) of the relevant Subsidiary prepared for this purpose by the Issuer; and

−61− (iv) if the accounts of any Subsidiary (not being a Subsidiary referred to in proviso (i) above of this definition) are not consolidated with those of the Issuer, then the determination of whether or not such Subsidiary is a Principal Subsidiary shall be based on a pro forma consolidation of its accounts (consolidated, if appropriate) with the consolidated accounts (determined on the basis of the foregoing) of the Issuer.

A certificate in English by any Authorised Signatory of the Issuer that in the opinion of the Issuer (making such adjustments (if any) as the Issuer shall deem appropriate) a Subsidiary is or is not or was or was not at any particular time or during any particular period a Principal Subsidiary shall, in the absence of manifest error, be conclusive and binding on the Issuer, the Trustee and the Bondholders.

(b) With respect to the LC Bank:

(i) Cross-Default:

(A) any Public External Indebtedness of the LC Bank or any of its Subsidiaries is not paid when due or, as the case may be, within any originally applicable grace period;

(B) any such Public External Indebtedness becomes (or becomes capable of being declared) due and payable prior to its stated maturity otherwise than at the option of the LC Bank or (as the case may be) the relevant Subsidiary or (provided that no event of default, howsoever described, has occurred) any person entitled to such Public External Indebtedness; or

(C) the LC Bank or any of its Subsidiaries fails to pay when due any amount payable by it under any guarantee or indemnity of any Public External Indebtedness,

provided that the aggregate amount of Public External Indebtedness referred to in Conditions 10(b)(i)(A) or 10(b)(i)(B) and/or the amount payable under any guarantee or indemnity referred to in Condition 10(b)(i)(C), individually or in the aggregate, exceeds U.S.$50,000,000 (or its equivalent in any other currency or currencies); or

(ii) Security Enforced: a secured party takes possession, or a receiver, manager or other similar officer is appointed, of the whole or any material part of the undertaking, assets and revenues of the LC Bank or any of its Material Subsidiaries; or

(iii) Insolvency: the LC Bank or any of its Material Subsidiaries is insolvent or bankrupt or unable to pay its debts as and when such debts fall due, stops or suspends payment of all or a material part of its debts, proposes or makes any agreement for the deferral, rescheduling or other readjustment of all or any material part of its debts, proposes or makes a general assignment or an arrangement or composition with or for the benefit of the relevant creditors in respect of all or any material part of such debts or a moratorium is agreed or declared in respect of or affecting all or any material part of the debts of the LC Bank; or

(iv) Winding-up: an order is made or an effective resolution is passed for the winding up or dissolution of the LC Bank or any of its Material Subsidiaries, except for any voluntary solvent winding up of any of its Material Subsidiaries; or

(v) Illegality: it is or will become unlawful for the LC Bank to perform or comply with any one or more of its obligations under the Standby Letter of Credit; or

(vi) Analogous Events: any event occurs which under the laws of the relevant jurisdiction has an analogous effect to any of the events referred to in any of Conditions 10(b)(ii) to 10(b)(v) (both inclusive).

−62− In this Condition 10(b):

“Public External Indebtedness” means any indebtedness of the LC Bank or any Subsidiary of the LC Bank, or any guarantee or indemnity by the LC Bank of indebtedness, for money borrowed which (i) is in the form of or represented by any bond, note, debenture, debenture stock, loan stock, certificate or other instrument which is issued outside the PRC and is, or is capable of being, listed, quoted or traded on any stock exchange or in any securities market (including, without limitation, any over-the-counter market) outside the PRC (without regard, however, to whether or not such instruments are sold through public offerings or private placement); and (ii) has an original maturity in excess of 365 days; and

“Material Subsidiary” means a Subsidiary of the LC Bank:

(A) whose gross revenue (consolidated in the case of a Subsidiary which itself has consolidated Subsidiaries), whose gross assets (consolidated in the case of a Subsidiary which itself has consolidated Subsidiaries, and including the investment of the LC Bank and its consolidated Subsidiaries in each Subsidiary whose accounts are not consolidated with the consolidated audited accounts of the LC Bank and of associated companies and after adjustment for minority interests) or whose net profit (consolidated in the case of a Subsidiary which itself has consolidated Subsidiaries, and including, for the avoidance of doubt, the LC Bank and its consolidated Subsidiaries’ share of profits of Subsidiaries not consolidated and of associated entities and after adjustments for minority interests) represent not less than ten per cent. of the consolidated gross revenue, the consolidated gross assets, or, as the case may be, the consolidated net profit of the LC Bank and its Subsidiaries taken as a whole, all as calculated respectively by reference to the latest audited or reviewed financial statements (consolidated or, as the case may be, unconsolidated) of the Subsidiary and the then latest audited or reviewed consolidated financial statements of the LC Bank, provided that:

(B) in the case of a Subsidiary acquired after the end of the financial period to which the then latest audited or reviewed consolidated financial statements of the LC Bank relate for the purpose of applying each of the foregoing tests, the reference to the LC Bank’s latest audited or reviewed consolidated financial statements shall be deemed to be a reference to such audited or reviewed financial statements as if such Subsidiary had been shown therein by reference to its then latest relevant audited or reviewed financial statements, adjusted as deemed appropriate by the auditor for the time being, after consultation with the LC Bank;

(C) if at any relevant time in relation to the LC Bank or any Subsidiary no financial statements are prepared and audited, its gross revenue, gross assets and net profit (consolidated, if applicable) shall be determined on the basis of pro forma consolidated financial statements (consolidated, if applicable) prepared for this purpose; and

(D) if the financial statements of any Subsidiary (not being a Subsidiary referred to in proviso (I) above) are not consolidated with those of the LC Bank, then the determination of whether or not such Subsidiary is a Material Subsidiary shall be based on a pro forma consolidation of its financial statements (consolidated, if appropriate) with the consolidated financial statements (determined on the basis of the foregoing) of the LC Bank; or

−63− (E) to which is transferred all or substantially all of the business, undertaking and assets of another Subsidiary which immediately prior to such transfer is a Material Subsidiary, whereupon (i) in the case of a transfer by a Material Subsidiary, the transferor Material Subsidiary shall immediately cease to be a Material Subsidiary and (ii) the transferee Subsidiary shall immediately become a Material Subsidiary, provided that on or after the date on which the relevant financial statements for the financial period current at the date of such transfer are published, whether such transferor Subsidiary or such transferee Subsidiary is or is not a Material Subsidiary shall be determined pursuant to the provisions of paragraph (A) of this definition above.

A certificate signed by an authorised signatory of the LC Bank that a Subsidiary is or is not or was or was not at any particular time or during any particular period a Material Subsidiary shall, in the absence of manifest error, be conclusive and binding on the Issuer, the Trustee and the Bondholders.

11 PRESCRIPTION

Claims against the Issuer for payment in respect of the Bonds shall be prescribed and become void unless made within 10 years (in the case of principal or premium (if any)) or five years (in the case of interest) from the appropriate Relevant Date in respect of them.

12 REPLACEMENT OF CERTIFICATES

If any Certificate is lost, stolen, mutilated, defaced or destroyed, it may be replaced, subject to applicable laws, regulations or other relevant regulatory authority regulations, at the specified office of the Registrar or such other Transfer Agent as may from time to time be designated by the Issuer for that purpose and notice of whose designation is given to Bondholders, in each case on payment by the claimant of the fees and costs incurred in connection therewith and on such terms as to evidence, security, indemnity, pre-funding and otherwise as the Issuer, the Registrar or the relevant Transfer Agent may require. Mutilated or defaced Certificates must be surrendered before replacements will be issued.

13 MEETINGS OF BONDHOLDERS, MODIFICATION, WAIVER, AUTHORISATION, DETERMINATION AND ENTITLEMENT OF TRUSTEE

(a) Meetings of Bondholders

The Trust Deed contains provisions for convening meetings of the Bondholders to consider any matter affecting their interests, including without limitation, the sanctioning by Extraordinary Resolution of a modification of any of these Conditions or any of the provisions of the Trust Deed, the Agency Agreement or the Standby Letter of Credit. Such a meeting may be convened by the Trustee or the Issuer and shall be convened by the Trustee if so requested in writing by Bondholders holding not less than 10 per cent. in aggregate principal amount of the Bonds for the time being outstanding and subject to the Trustee being indemnified and/or secured and/or pre-funded to its satisfaction against all costs and expenses. The quorum for any meeting convened to consider an Extraordinary Resolution will be two or more persons holding or representing more than 50 per cent. in aggregate principal amount of the Bonds for the time being outstanding, or at any adjourned meeting two or more persons being or representing Bondholders whatever the aggregate principal amount of the Bonds held or represented unless the business of such meeting includes consideration of proposals, inter alia, (i) to modify the Maturity Date of the Bonds or the dates on which interest is payable in respect of the Bonds, (ii) to reduce or cancel the principal amount of, any premium payable on redemption of, or interest on, the Bonds, (iii) to change the currency of payment of the Bonds, or (iv) to modify the provisions concerning the quorum required at any meeting of Bondholders or the majority required to pass an Extraordinary Resolution, or (v) to modify or release the Standby Letter of Credit (other than an amendment or supplement to, or a replacement of, the Standby Letter of

−64− Credit in connection with a further issue of bonds pursuant to Condition 16 or modification pursuant to Condition 13(b)), in which case the necessary quorum for passing an Extraordinary Resolution will be two or more persons holding or representing not less than 75 per cent., or at any adjourned such meeting not less than 25 per cent., in aggregate principal amount of the Bonds for the time being outstanding. Any Extraordinary Resolution duly passed shall be binding on Bondholders, whether or not they were present at the meeting and whether or not they voted, at which such resolution was passed.

The Trust Deed provides that a resolution (A) in writing signed by or on behalf of the Bondholders of not less than 90 per cent. in aggregate principal amount of the Bonds for the time being outstanding and who are entitled to receive notice of a meeting of Bondholders under the Trust Deed or (B) passed by Electronic Consent (as defined in the Trust Deed) shall for all purposes be as valid and effective as an Extraordinary Resolution passed at a meeting of Bondholders duly convened and held. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Bondholders.

(b) Modification of the Conditions, Trust Deed, Agency Agreement and Standby Letter of Credit

The Trustee may (but shall not be obliged to) agree, without the consent of the Bondholders, to (i) any modification of any of these Conditions or any of the provisions of the Trust Deed, the Agency Agreement or the Standby Letter of Credit that is, in its opinion, of a formal, minor or technical nature or is made to correct a manifest error or to comply with any mandatory provision of law; and (ii) any other modification (except as mentioned in the Trust Deed), and any waiver or authorisation of any breach or proposed breach, of any of these Conditions or any of the provisions of the Trust Deed, the Agency Agreement or the Standby Letter of Credit that is, in the opinion of the Trustee, not materially prejudicial to the interests of the Bondholders. Any such modification, authorisation or waiver shall be binding on the Bondholders and, unless the Trustee otherwise agrees, each such modification, authorisation or waiver shall be notified by the Issuer to the Bondholders in accordance with Condition 17 as soon as practicable

In connection with the exercise of its functions, rights, powers and/or discretions (including but not limited to those referred to in this Condition 13), the Trustee shall have regard to the interests of the Bondholders as a class and shall not have regard to the interests of, or be responsible for, the consequences of such exercise for individual Bondholders and the Trustee shall not be entitled to require on behalf of any Bondholder, nor shall any Bondholder be entitled to claim, from the Issuer or the Trustee any indemnification or payment in respect of any tax consequence of any such exercise upon individual Bondholders.

14 ENFORCEMENT

At any time after the Bonds become due and payable, the Trustee may, at its discretion and without further notice, take any such steps and/or actions and/or institute such proceedings against the Issuer and/or the LC Bank as it may think fit to enforce the terms of the Trust Deed and/or the Bonds and, where appropriate, to draw down on and enforce the Standby Letter of Credit, but it need not take any such steps and/or actions and/or institute any such proceedings unless (a) it shall have been so directed by an Extraordinary Resolution or so requested in writing by Bondholders holding at least 25 per cent. in aggregate principal amount of the Bonds outstanding, and (b) other than in the case of the making of a drawing under the Standby Letter of Credit, it shall have been indemnified and/or secured and/or pre-funded to its satisfaction. No Bondholder may proceed directly against the Issuer or the LC Bank unless the Trustee, having become bound so to proceed, fails to do so within a reasonable time and such failure is continuing.

−65− The Trustee may refrain from taking any step and/or action and/or initiating any proceeding in any jurisdiction if the taking of such step and/or action or initiating of such proceeding in that jurisdiction would, in its opinion, be contrary to any law of that jurisdiction. Furthermore, the Trustee may also refrain from taking any such step and/or action and/or initiating any such proceeding if it would otherwise render it liable to any person in that jurisdiction or if, in its opinion, it would not have the power to do the relevant thing in that jurisdiction by virtue of any applicable law in that jurisdiction or if it is determined by any court or other competent authority in that jurisdiction that it does not have such power.

15 INDEMNIFICATION OF THE TRUSTEE

Under the Trust Deed, the Trustee is entitled to be indemnified, secured and/or pre-funded to its satisfaction and to be relieved from responsibility in certain circumstances and to be paid its fees, costs, expenses, indemnity payments, and other amounts in priority to the claims of the Bondholders. In addition, the Trustee is entitled (i) to enter into business transactions with the Issuer, the LC Bank and/or any entity related (directly or indirectly) to the Issuer and/or the LC Bank without accounting for any profit and to act as trustee for the Bondholders of any other bonds issued by or relating to, the Issuer and any entity related to the Issuer, (ii) to exercise and enforce its rights, comply with its obligations and perform its duties under or in relation to any such transactions or, as the case may be, any such trusteeship without regard to the interests of, or consequences for, the Bondholders and (iii) to retain and not be liable to account for any profit made or any other amount or benefit received thereby or in connection therewith.

The Trustee and each Agent may rely without liability to Bondholders, the Issuer, the LC Bank or any other person on any report, confirmation, information or certificate from or any opinion or advice of any lawyers, accountants, financial advisers, financial institution or any other expert, whether or not addressed to it and whether their liability in relation thereto is limited (by its terms or by any engagement letter relating thereto entered into by the Trustee or any other person or in any other manner) by reference to a monetary cap, methodology or otherwise. The Trustee and each Agent may accept and shall be entitled to rely on any such report, confirmation, information, certificate, opinion or advice and, in such event, such report, confirmation, information, certificate, opinion or advice shall be binding on the LC Bank and the Bondholders, provided that such report, confirmation, information, certificate, opinion or advice shall be binding on the Issuer if it is procured or issued by the Issuer, or the Issuer expressly agrees to be bound by it. The Trustee and each Agent shall not be responsible or liable to the Issuer, the Bondholders or any other person for any loss occasioned by acting on or refraining from acting on such report, information, confirmation, certificate, opinion or advice.

None of the Trustee or any of the Agents shall be responsible or liable for the performance by the Issuer, the LC Bank and/or any other person appointed by the Issuer and/or the LC Bank in relation to the Bonds of the duties and obligations on their part expressed in respect of the same and, unless it has written notice from the Issuer and/or the LC Bank to the contrary, the Trustee and each Agent shall be entitled to assume that the same are being duly performed.

None of the Trustee or the Agents shall have any obligation to monitor compliance with the provisions of the Trust Deed, the Agency Agreement, the Standby Letter of Credit or these Conditions, or ascertain whether an Event of Default, a Potential Event of Default (as defined in the Trust Deed), a Pre-funding Failure or a Relevant Event has occurred, and they shall not be liable to the Bondholders or any other person for not doing so.

Whenever the Trustee is required or entitled by the terms of the Trust Deed, the Agency Agreement, the Standby Letter of Credit or these Conditions to exercise any discretion or power, take or refrain from any action, make any decision or give any direction, the Trustee is entitled, prior to its exercising any such discretion or power, taking or refraining from any such action, making any such decision, or giving any such direction, to seek directions or clarifications from the Bondholders by way of an Extraordinary Resolution, and the Trustee shall not be responsible for any loss or liability

−66− incurred by the Issuer, the LC Bank, the Bondholders or any other person as a result of any delay in it exercising such discretion or power, taking or refraining from such action, making such decision, or giving such direction where the Trustee is seeking such directions or clarifications from Bondholders or in the event that no such directions or clarifications are received by the Trustee.

None of the Trustee or any Agent shall be liable to any Bondholder, the Issuer, the LC Bank or any other person for any action taken by the Trustee or such Agent in accordance with the instructions of the Bondholders. The Trustee shall be entitled to rely on any direction, request or resolution of Bondholders given by Bondholders holding the requisite principal amount of Bonds outstanding or passed at a meeting of Bondholders convened and held in accordance with the Trust Deed.

Each Bondholder shall be solely responsible for making and continuing to make its own independent appraisal and investigation into the financial condition, creditworthiness, condition, affairs, status and nature of the Issuer and the LC Bank, and the Trustee shall not at any time have any responsibility or liability for the same and each Bondholder shall not rely on the Trustee in respect thereof.

16 FURTHER ISSUES

The Issuer may from time to time without the consent of the Bondholders create and issue further bonds having the same terms and conditions as the Bonds in all respects (or in all respects except for the issue date and the first payment of interest on them) and so that such further issue shall be consolidated and form a single series with the outstanding Bonds. References in these Conditions to the Bonds include (unless the context requires otherwise) any further bonds issued pursuant to this Condition 16. However, such further bonds may only be issued if a further or supplemental or replacement standby letter of credit is issued by the LC Bank (or an amendment is made to the Standby Letter of Credit) on terms that are substantially similar to the Standby Letter of Credit (including that the stated amount of such further or supplemental standby letter of credit represents an increase at least equal to the principal of and one interest payment due on such further bonds and any fees, costs, expenses, indemnity payments and all other amounts in connection with such issue (subject to a cap (if any) as agreed between the Issuer and the Trustee)); and such supplemental documents are executed and further opinions are obtained as the Trustee may require, as further set out in the Trust Deed. Any such further bonds shall be constituted by a deed supplemental to the Trust Deed. References to the Standby Letter of Credit shall thereafter include such further, supplemental, replacement or amended standby letter of credit.

17 NOTICES

Notices to Bondholders will be valid if made in writing in English and mailed to them by uninsured mail at the Issuer’s expense at their respective addresses in the Register and deemed to have been given on the fourth weekday (being a day other than a Saturday, Sunday or public holiday) after the date of mailing; The Issuer shall also ensure that notices are duly published in a manner that complies with the rules and regulations of any stock exchange or other relevant authority on which the Bonds are for the time being listed. Any such notice shall be deemed to have been given on the date of such publication or, if published more than once, on the first date on which publication is made.

So long as the Bonds are represented by the Global Certificate and the Global Certificate is held on behalf of Euroclear Bank SA/NV or Clearstream Banking S.A. or any Alternative Clearing System (as defined in the Global Certificate), notices to the holders of the Bonds shall be validly given by the delivery of the relevant notice to Euroclear Bank SA/NV or Clearstream Banking S.A. or such Alternative Clearing System, for communication by it to entitled accountholders in substitution for notification as required by these Conditions, and such notice shall be deemed to be received by the Bondholders on the date of delivery of such notice to Euroclear Bank SA/NV or Clearstream Banking S.A. or such Alternative Clearing System.

18 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

No person shall have any right to enforce any term or condition of the Bonds under the Contracts (Rights of Third Parties) Act 1999 but this shall not affect any right or remedy which exists or is available apart from such Act and is without prejudice to the rights of the Bondholders as set out in Condition 14.

−67− 19 GOVERNING LAW AND JURISDICTION

(a) Governing Law

The Trust Deed, the Agency Agreement, the Bonds, the Standby Letter of Credit and any non-contractual obligations arising out of or in connection with them are governed by, and shall be construed in accordance with, English law.

(b) Jurisdiction

The courts of Hong Kong are to have exclusive jurisdiction to settle any disputes that may arise out of or in connection with the Bonds, the Trust Deed, the Agency Agreement, the Standby Letter of Credit and accordingly any legal action or proceedings arising out of or in connection with any Bonds, the Trust Deed, the Agency Agreement or the Standby Letter of Credit (“Proceedings”) may be brought in such courts. The Issuer has in the Trust Deed irrevocably submitted to the exclusive jurisdiction of such courts and waived any objection to Proceedings in any such courts whether on the ground of venue or on the ground that the Proceedings have been brought in an inconvenient forum.

The Issuer has irrevocably appointed in the Trust Deed an agent in Hong Kong to receive service of process in any Proceedings in Hong Kong based on any of the Bonds or the Trust Deed. If for any reason the Issuer ceases to have such an agent in Hong Kong, it will promptly appoint a substitute process agent and deliver to the Trustee a copy of the agent’s acceptance of that appointment within 30 days of such cessation. Nothing herein shall affect the right to serve process in any other manner permitted by law.

(d) Waiver of Immunity

The Issuer has waived any right to claim sovereign or other immunity from jurisdiction or execution and any similar defence, and has irrevocably consented to the giving of any relief or the issue of any process, including, without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment made or given in connection with any Proceedings.

−68− USE OF PROCEEDS

The proceeds from the offering of the Bonds will be U.S.$50,000,000, before deducting commissions and other estimated expenses payable in connection with the offering of the Bonds. The Issuer intends to use the net proceeds for projects and working capital.

−69− CAPITALISATION AND INDEBTEDNESS

The following table sets forth the consolidated total indebtedness (both short-term and long-term portions), total owner’s equity and total capitalisation of the Issuer as at 31 March 2021 (i) on an actual basis, and (ii) on an adjusted basis to give effect to the issue of the Bonds before deducting the commissions and other estimated expenses payable in connection with the offering of the Bonds.

The summary consolidated financial information below should be read in conjunction with the Annual Audited Financial Statements and the notes to those financial statements included elsewhere in this Offering Circular.

As at 31 March 2021 Actual As adjusted (RMB) (U.S.$) (RMB) (U.S.$)

Short-term loan ...... 549,900,000.00 83,931,133.43 549,900,000.00 83,931,133.43 Non-current liabilities due within one year . . . 1,256,368,243.39 191,759,248.36 1,256,368,243.39 191,759,248.36 Other current liabilities ...... 2,803,162,225.57 427,846,122.53 2,803,162,225.57 427,846,122.53

Total short-term indebtedness ...... 4,609,430,468.96 703,536,504.32 4,609,430,468.96 703,536,504.32 Long-term loans ...... 9,364,000,000.00 1,429,225,556.34 9,364,000,000.00 1,429,225,556.34 Bonds payable ...... 9,608,157,589.57 1,466,491,283.25 9,608,157,589.57 1,466,491,283.25 Long-term payables ...... 1,006,616,193.39 153,639,640.01 1,006,616,193.39 153,639,640.01 Other non-current liabilities...... 8,520,030,000.00 1,300,410,574.19 8,520,030,000.00 1,300,410,574.19 Bonds to be issued(1)...... – – 327,590,000.00 50,000,000.00

Total long-term indebtedness ...... 28,498,803,782.96 4,349,767,053.79 28,826,393,782.96 4,399,767,053.79 Total indebtedness(2) ...... 33,108,234,251.92 5,053,303,558.11 33,435,824,251.92 5,103,303,558.11 Total owners’/shareholders’ equity ...... 23,104,155,898.57 3,526,382,963.24 23,104,155,898.57 3,526,382,963.24

Total capitalisation(3)...... 56,212,390,150.49 8,579,686,521.35 56,539,980,150.49 8,629,686,521.35

Notes:

(1) This amount represents the aggregate principal amount of the Bonds to be issued, before deducting the commissions and other estimated expenses payable by the Issuer in connection with the offering of the Bonds.

(2) Total indebtedness equals the sum of short-term indebtedness and long-term indebtedness.

(3) Total capitalisation equals the sum of total indebtedness and total owners’/shareholders’ equity.

Except as otherwise disclosed in this Offering Circular, there has been no material change in the Group’s indebtedness or capitalisation since 31 March 2021.

−70− DESCRIPTION OF HUA XIA BANK CO., LIMITED

The information included in this Offering Circular regarding Hua Xia Bank Co., Limited is for information purposes only and is based on, or derived or extracted from, among other sources, publicly available information. Any information available from public sources that are referenced in this Offering Circular but is not separately included in this Offering Circular shall not be deemed to be incorporated by reference to this Offering Circular. The Issuer has taken reasonable care in the compilation and reproduction of the information. However, none of the Issuer, the Joint Lead Managers, the Trustee or the Agents or any of their respective affiliates, directors, officers, employees, representatives, agents or advisers or any person who controls any of them has independently verified such information. No representation or warranty, express or implied, is made or given by the Issuer, the Joint Lead Managers, the Trustee or the Agents or any of their respective affiliates, directors, officers, employees, representatives, agents and advisers or any person who controls any of them as to the accuracy, completeness or sufficiency of such information. Accordingly, such information should not be unduly relied upon.

The Bonds will have the benefit of the Standby Letter of Credit which will be issued by Hua Xia Bank Co., Limited Nanning Branch as the LC Bank. Under PRC laws, the LC Bank is not a separate and independent legal person but has capacity to carry on its activities within its scope of authorisation given by Hua Xia Bank Co., Limited, and if the assets of the LC Bank are not sufficient to meet the obligations of the LC Bank under the Standby Letter of Credit, Hua Xia Bank Co., Limited would have an obligation to satisfy the remaining balance of the obligations under the Standby Letter of Credit.

OVERVIEW

Incorporated on 14 October 1992 and headquartered in Beijing, Hua Xia Bank Co., Limited (the “Hua Xia Bank”) is a nationwide commercial bank in the PRC. Hua Xia Bank was listed on the Shanghai Stock Exchange in September 2003 and is the fifth listed company in the PRC. In 2019, Hua Xia Bank has been granted a banking licence by the Hong Kong Monetary Authority.

As at 31 December 2020, Hua Xia Bank has set up 44 tier-1 branches, 79 tier-2 branches, 7 non-local branches and 1,022 outlets in 122 Chinese cities at prefecture level and above. During the year 2020, two tier-one branches were added in Hong Kong and Beijing Municipal Administrative Center, and six tier-two branches were added in Xingtai, Yan’an, Huizhou, Xiong’an, Sanya and Xiangtan.

Hua Xia Bank’s main business and operations are organised into the following segments: corporate banking, retail finance, financial markets business and FinTech.

In recognition of its innovative efforts and business strategies, Hua Xia Bank has received the following awards in the year 2020:

• “2020 Tianji Award for Bank Wealth Management Brand”, “2020 Tianji Award for Mobile Banking” and “2020 Tianji Award for Green Finance” by Securities Times;

• “Bank of the Year 2020 in Brand Building” and “Rising Star of the Year 2020 in Investment Banking” awards by the 21st Century Business Herald;

• “Excellent Financial Planner Incubator Award” by Sina Finance and Yinhua Fund Management;

• “Outstanding Green Bank in 2019” by the China Banking Association;

• “Bank of the Year 2020 in Trade Finance” by the Financial News;

• “Best Smart Banking Award” and the “Best Mobile Banking User Experience Award” by China Financial Certification Authority (CFCA); and

• “Best Bank in Wealth Management” and “Best Bank in Fixed Income Investment” by the Private Banking Committee of the China Banking Association.

−71− In addition, Hua Xia Bank implemented the five-pronged development philosophy, namely “Innovative, Coordinated, Green, Open and Shared”, continuously improved the corporate social responsibility management, performed its corporate social responsibility in a deep-going manner and contributed with resolve to the three critical battles in serving the economic and social development. Hua Xia Bank continued to create bigger value for stakeholders such as shareholders, government, customers, employees and communities and pursued its own sustainable development in harmony with the economy, society and environment.

PRINCIPAL BUSINESS ACTIVITIES

Hua Xia Bank’s main business and operations are organised into the following segments: corporate banking, retail finance, financial markets business and FinTech.

Corporate Banking

Corporate banking constitutes one of Hua Xia Bank’s principal business activities. Hua Xia Bank’s corporate banking consists primarily of corporate customer management, corporate deposits, corporate loans, investment banking, green finance business and trade finance.

In addition, Hua Xia Bank covers public deposit-taking, granting of short, medium and long-term loans, domestic and international settlement, bill acceptance and discount, issuance of financial bonds, issuance, encashment and underwriting of government bonds as an agent, trading of government bonds and financial bonds, interbank lending and borrowing, trading of foreign exchange on its own behalf and as an agent, bank card service, provision of letter of credit and letter of guarantee, collection and payment service as an agent, safety box service, foreign exchange settlement and sale, sideline insurance agency, leasing service and other services approved by China Banking and Insurance Regulatory Commission.

Hua Xia Bank pursues a customer-centric approach to manage customers more meticulously. While working harder to enhance its comprehensive financial service capacity, it rendered customers with a full package of financial services including loan and guarantee, investment banking, green finance, trade finance, and cash management, thus serving and supporting the development of real economy in a substantive way.

Retail Finance

Retail finance constitutes one of Hua Xia Bank’s principal business activities and consists primarily of personal deposits, personal loans, wealth management and private banking, debit cards and acquiring and payment services and credit card.

Hua Xia Bank adapted itself to market changes and regulatory policy developments in a proactive manner. The logic for personal deposit management and organization was reshaped on a customer-centric basis, putting focus on customer management, product innovation and organizational upgrading. Personal deposits were taken from a variety of sources and expanded steadily in size.

Staying true to the original aspirations for banking services, Hua Xia Bank strengthened the support for consumer-side supply. With technology-driven innovation in financial services, Hua Xia Bank sped up the smart, digital and agile transformation of personal loan products. It took the opportunity of post-pandemic recovery of consumption to help upgrade consumption and fulfill its corporate social responsibility.

Guided by the retail finance transformation strategy, Hua Xia Bank accelerated the construction of wealth management and private banking systems and mechanisms to enable real operation of the Wealth Management and Private Banking Department. The wealth management and private banking service brand was fostered by setting up a professional service team, stepping up innovation in products, enhancing the capability of wealth management service, exerting every effort to build the wealth management and private banking system and starting to set up a customer value added service system.

−72− Financial Markets Business

Financial markets constitute one of Hua Xia Bank’s principal business activities and consists primarily of providing asset management services and asset custody services. In response to the changes in external macro environment, including the global COVID-19 spreads and economic de-globalization, and domestic market changes including the new development pattern that takes the domestic market as the mainstay while letting domestic and foreign markets boost each other, Hua Xia Bank actively strengthened research and judgment on domestic and foreign macro-economic trends. Hua Xia Bank responded actively to bigger volatility of interest rate and exchange rate in the financial markets, adjusted investment and trading strategies promptly in line with market developments, managed risks well and kept improving the investment management capabilities.

FinTech

Hua Xia Bank adhered to the basic tone of seeking progress while maintaining stability, took “making the Bank stronger with technology” as strategic guidance, deepened the FinTech development results and kick-started the digital transformation process. It created an enterprise-level agile organization system, reengineered the underlying core system, upgraded service channels and deployed industrial digital finance. The digital financial services were leveraged to help enterprises resume business, support the real economy development and overcome difficulties together with customers and sought to break new ground amid seismic changes.

FINANCIAL INFORMATION

The summary consolidated financial information of Hua Xia Bank for the years ended 31 December 2018, 2019 and 2020 set forth in the tables below have been extracted from the audited consolidated financial statements contained in its annual reports for the years ended 31 December 2019 and 2020 and should be read in conjunction with the notes to the consolidated financial statements contained therein. The audited consolidated financial statements of Hua Xia Bank for the year ended 31 December 2019 and 2020 were audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP as Hua Xia Bank’s auditor in accordance with Chinese auditing standards.

Consolidated Statement of Financial Position

As at 31 December 2018 2019 2020 (In RMB millions)

Assets Cash on hand and balances with central banks ...... 210,204 192,911 204,082 Due from banks ...... 21,871 15,938 18,505 Placements with banks and other financial institutions ...... 40,663 23,461 36,470 Financial assets measured at fair value through profit or loss...... 12,470 – – Derivative financial assets...... 1,130 926 12,361 Financial assets purchased under agreements to resell ...... 1,723 24,050 24,776 Interest receivable ...... 17,350 – – Loans and advances to customers ...... 1,566,241 1,829,171 2,059,825 Financial investments Held-for-trading financial assets ...... – 89,783 123,848 Debt investments ...... – 675,286 702,909 Other debt investments ...... – 129,400 172,926 Other equity instrument investments ...... – 4,961 5,484

−73− As at 31 December 2018 2019 2020 (In RMB millions)

Available-for-sale financial assets ...... 125,265 – – Held-to-maturity investments...... 415,524 – – Investment receivables ...... 233,762 – – Long-term equity investments ...... – – – Fixed assets ...... 13,582 13,466 13,584 Intangible assets ...... 81 80 86 Deferred income tax assets ...... 7,410 8,574 10,155 Other assets ...... 13,304 12,782 14,805

Total assets ...... 2,608,580 3,020,789 3,399,816

Liabilities Due to central banks...... 171,064 143,617 131,036 Due to banks and other financial institutions ...... 293,072 302,337 434,992 Placements from banks and other financial institutions ...... 77,111 104,064 109,017 Derivative financial assets...... 1,054 1,802 12,365 Financial assets sold under-repurchase agreements . . . 14,378 93,774 49,155 Deposits taken ...... 1,492,492 1,671,276 1,837,020 Accrued payroll ...... 5,799 6,647 6,961 Taxes and dues payable...... 7,167 5,572 7,740 Interest payable ...... 19,151 – – Debt obligations payable...... 360,469 403,584 511,814 Projected liabilities ...... – 2,147 2,309 Other liabilities ...... 20,108 16,632 14,752

Total liabilities ...... 2,461,865 2,751,452 3,117,161 Equity Share capital ...... 15,387 15,387 15,387 Other equity instruments ...... 19,978 59,971 59,971 Of which: Preference shares ...... 19,978 19,978 19,978 Perpetual bonds ...... – 39,993 39,993 Capital reserve ...... 53,292 53,292 53,292 Other comprehensive income...... 625 1,084 (714) Surplus reserve...... 13,635 15,662 17,756 General risk reserve ...... 31,788 34,706 38,683 Retained profit ...... 82,436 87,486 96,238 Total equity attributable to shareholders of the parent company ...... 217,141 267,588 280,613

Minority shareholders’ equity ...... 1,574 1,749 2,042

Total shareholders’ equity ...... 218,715 269,337 282,655

Total liabilities and equity...... 2,680,580 3,020,789 3,399,816

−74− Consolidated Statement of Comprehensive Income

For the year ended 31 December 2018 2019 2020 (In RMB millions)

I. Operating income ...... 72,227 84,734 95,309 Net interest income...... 51,538 64,561 81,967 Interest income...... 116,036 128,437 147,239 Interest expense ...... (64,498) (63,876) (65,272) Net fee and commission income ...... 17,758 18,016 10,558 Fee and commission income ...... 20,129 21,081 14,207 Fee and commission expenses ...... (2,371) (3,065) (3,649) Investment gains/(losses)...... 4,068 1,231 1,870 Of which: Gains on derecognition of financial assets measured at amortized cost ...... – – – Gains/(losses) from the changes in fair value ...... (1,463) 823 503 Exchange gains ...... 204 (132) 192 Other operating income...... 107 192 192 Profit/loss from the disposal of assets ...... (14) 15 3 Other income ...... 29 28 24 II. Operating expenses ...... (45,539) (57,237) (68,158) Tax and surcharges ...... (867) (890) (1,076) General and administrative expenses ...... (23,533) (25,920) (26,622) Impairment losses on credit...... – (30,251) (40,010) Other impairment losses on assets ...... – (154) (421) Asset impairment losses ...... (21,117) – – Other business costs ...... (22) (22) (29) III. Operating profit ...... 26,688 27,497 27,151 Plus: Non-operating income ...... 167 168 160 Less: Non-operating expenses ...... (72) (102) (158) IV. Total profit ...... 26,783 27,563 27,153 Less: Income tax expense ...... (5,797) (5,448) (5,585) V. Net profit ...... – – – i. Classified by operational continuity ...... 20,986 22,115 21,568 Net profit from continuous operation ...... 20,986 22,115 21,568 Net profit from ceased operation ...... – – – ii. Classified by ownership affiliation...... – – – Net profit attributable to the parent company ...... 20,854 21,905 21,275 Minority shareholders’ gains/losses ...... 132 210 293 VI. After-tax other comprehensive income ...... 1,777 (69) (1,639) i. Other comprehensive income not to be classified as profit/loss ...... – (455) (215) 1. Change in fair value of other equity instruments. . . – (455) (215) ii. Other comprehensive income to be classified as profit/loss ...... 1,777 386 (1,424) 1. Change in fair value of financial assets measured at fair value through other comprehensive income. . – 95 (1,341) 2. Change in fair value of allowances for credit losses on investment in financial assets measured at fair value through other comprehensive income.... – 291 (83) 3. Change in fair value of available-for-sale financial assets ...... 1,777 – (1,639) After-tax other comprehensive income attributable to shareholders of the parent company ...... 1,777 (69) – After-tax other comprehensive income attributable to minority shareholders ...... – – – VII. Total comprehensive income ...... 22,763 22,046 19,929 Total comprehensive income attributable to shareholders of the parent company ...... 22,631 21,836 19,636 Total comprehensive income attributable to minority shareholders ...... 132 210 293 VIII. Earnings per share...... Basic earnings per share (RMB yuan) ...... 1.56 1.37 1.20

−75− Consolidated Statement of Cash Flows

For the year ended 31 December 2018 2019 2020 (In RMB millions)

Cash flows from operating activities Net increase in customer deposits and due to banks and other financial institutions ...... 120,301 172,057 294,341 Net decrease in balances with central banks and due from banks and other financial institutions ...... 37,879 28,528 2,134 Net increase in due to central banks ...... 55,045 – – Net increase in placements from banks and other financial institutions and financial assets purchased under agreements to resell ...... – 105,451 – Net decrease in placements with banks and other financial institutions and financial assets purchased under agreements to resell ...... – 14,752 – Net decrease in held-for-trading financial assets ..... – 1,141 –

Net increase in business debt obligations payable .... – 63,140 65,077

Proceeds from interest and fee & commission ...... 109,108 122,738 129,721 Other proceeds received related to operating activities...... 2,761 2,364 1,796 Sub-total of cash inflows from operating activities . . . 325,094 510,171 493,069 Net decrease in customer deposits and due to banks and other financial institutions ...... – – – Net increase in loans and advances to customers .... (231,100) (295,951) (266,629) Net decrease in placements from banks and other financial institutions and financial assets purchased under agreements to resell ...... (43,558) – (39,485) Net increase in balances with central banks and due from banks and other financial institutions .... – – – Net increase in placements with banks and other financial institutions and financial assets under agreements to resell...... (18,492) – (26,069) Net decrease in due to central banks ...... – (29,513) (11,654) Net decrease in business debt obligations payable.... (29,720) – – Net increase in held-for-trading financial assets ..... – – (9,324) Cash paid as interest and fee & commission expenses . . (59,334) (59,515) (61,653) Cash paid to and for employees...... (14,937) (15,381) (14,670) Taxes and dues paid ...... (12,933) (13,346) (12,296) Other cash paid related to operating activities ...... (15,955) (17,383) (16,530)

Sub-total of cash outflows from operating activities . . (426,029) (431,089) (458,310)

Net cash flows from operating activities ...... (100,935) 79,082 34,759

Cash flows from investing activities Proceeds from disposal of investments...... 1,166,355 518,775 498,658 Investment gains received ...... 34,765 34,851 36,797 Net gains on disposal of fixed assets, intangible assets and other long-term assets ...... 123 332 206

Sub-total of cash inflows from investing activities . . . 1,201,243 553,958 535,661

−76− For the year ended 31 December 2018 2019 2020 (In RMB millions)

Acquisition of investments ...... (1,185,730) (614,588) (596,099) Cash paid for acquisition of fixed assets, intangible assets and other long-term assets ...... (1843) (1,014) (1,266)

Net cash paid for capital increase in subsidiaries .... – – –

Sub-total of cash outflows from investing activities . . (1,187,573) (615,602) (597,365)

Net cash flows from investing activities...... 13,670 (61,644) (61,704)

Cash flows from financing activities ...... – – – Proceeds from disposal of investments...... 29,231 39,993 65,000 Of which: Cash received by subsidiaries from investment of minority shareholders ...... – – –

Proceeds from issuance of bonds ...... 20,500 2,500 65,000

Sub-total of cash inflows from financing activities . . . 49,731 42,493 65,000

Cash paid for debt repayment ...... – (25,000) (22,000)

Cash paid for dividends and profit distribution or interest repayment ...... (7,044) (8,663) (10,776)

Sub-total of cash outflows from financing activities . . (7,044) (33,663) (32,776)

Net cash flows from financing activities ...... 42,687 8,830 32,224

Effect of exchange rate changes on cash and cash equivalents ...... 591 195 (582)

Net change of cash and cash equivalents ...... (43,987) 26,463 4,697

Plus: Opening balance of cash and cash equivalents . . 110,191 66,204 92,667

Closing balance of cash and cash equivalents ...... 66,204 92,667 97,364

General Information

Hua Xia Bank’s registered office is located at Hua Xia Bank Mansion, No. 22 Jianguomennei Street, Dongcheng District, Beijing, PRC. Hua Xia Bank’s website address is www.hxb.com.cn. Information contained on the Hua Xia Bank’s website is subject to change from time to time and does not form part of this offering circular. No representation is made by the Issuer, the Joint Lead Managers, the Trustee, the Agents, or any of their affiliates, employees or professional advisers, and none of the Issuer, the Joint Lead Managers, the Trustee, the Agents, or any of their affiliates, employees or professional advisers, take any responsibility for any information contained on Hua Xia Bank’s website.

−77− DESCRIPTION OF THE GROUP

OVERVIEW

• Primary land development. The Group is one of the designated entities entrusted by the Liuzhou Municipal Government to conduct primary land development in major districts of Liuzhou, including Chengzhong District (城中區), Yufeng District (魚峰區) and Liunan District (柳南區). The Group operates its primary land development business primarily through the Liuzhou Longjian Investment &Development Co., Ltd. (柳州市龍建投資發展有限責任公司). Primary land development generally involves demolition of buildings, relocation and resettlement of residents, land clearance and construction of electricity, water, transportation, telecommunication, sewer, gas and heat networks thereby transforming the land into a condition ready for secondary real property development. For the years ended 31 December 2018, 2019 and 2020, and for the three months ended 31 March 2020 and 2021, respectively, operating income generated from the Group’s primary land development business was approximately RMB600.7 million, RMB728.2 million, RMB1,986.7 million, RMB54.4 million and RMB389.2 million, respectively, representing approximately 56.5 per cent., 45.1 per cent., 76.4 per cent., 49.9 per cent., and 80.1 per cent., respectively, of the Group’s total operating income for the same periods.

−78− • Infrastructure construction. The Group undertakes infrastructure construction in Liuzhou through entering into agency agreements with property owners and government authorities. The Group’s infrastructure construction business primarily comprises the investment, development and construction of schools, transportation infrastructure, roads, and other public facilities. The Group mainly manages and operates its infrastructure construction business through its wholly-owned subsidiary, Liuzhou Longjian Investment & Development Co., Ltd. (柳州市龍建投資發展有限責任公司). As at 31 March 2021, the Group had undertaken 20 key infrastructure construction projects, among which 17 projects have been completed with a total amount invested of approximately RMB2,484 million. For the years ended 31 December 2018, 2019 and 2020, and for the three months ended 31 March 2020 and 2021, respectively, operating income generated from the Group’s infrastructure construction business was approximately RMB9.2 million, RMB7.0 million, RMB7.3 million RMB1.1 million and RMB1.1 million, respectively, representing approximately 0.9 per cent., 0.4 per cent., 0.3 per cent., 1.0 per cent., and 0.2 per cent., respectively, of the Group’s total operating income for the same periods.

COMPETITIVE STRENGTHS

The Group believes that the following strengths are key to its consistent growth and enable the Group to compete successfully within the industries in which it operates:

A leading state-owned enterprise for affordable housing construction and primary land development in Liuzhou

The Group is one of the primary state-owned enterprises carrying out affordable housing construction and real estate development projects in Liuzhou. The Group has been engaged by the Liuzhou Municipal Government to undertake the construction and development of affordable housing in accordance with the Liuzhou Municipal Government’s annual affordable housing construction plan through the redevelopment of shantytowns (棚戶區) and dangerous housing (危舊房). For the years ended 31 December 2018, 2019 and 2020, and for the three months ended 31 March 2020 and 2021, respectively, operating income generated from the Group’s affordable housing and real estate development business was approximately

−79− RMB241.3 million, RMB608.4 million, RMB336.8 million, RMB0.6 million and RMB2.4 million, respectively; and operating income generated from the Group’s primary land development business was approximately RMB600.7 million, RMB728.2 million, RMB1,986.7 million, RMB54.4 million and RMB389.2 million, respectively.

The Group was established in 2017 under the approval of Liuzhou SASAC. The Liuzhou Municipal Government has historically awarded a significant number of its annual planned affordable housing construction projects to the Group. As at 31 March 2021, the Group had completed 12 affordable housing and real estate development projects with a total amount invested of approximately RMB5,954 million, and had a total of 3 affordable housing and real estate development projects under construction with an estimated total investment amount of approximately RMB4,700 million. The Group is also one of the designated entities entrusted by the Liuzhou Municipal Government to conduct primary land development in Liuzhou. As at 31 March 2021, the Group had conducted primary land development in major districts of Liuzhou, including Chengzhong District (城中區), Yufeng District (魚峰區) and Liunan District (柳南區). As at 31 March 2021, the Group had invested approximately RMB6,559 million in its primary land development projects.

Well-positioned to capitalize on the strategic location, economic growth and urbanisation of Liuzhou to achieve stable business growth

Liuzhou, also known as the Dragon City, is an important industrial base and transportation hub for Guangxi. Liuzhou’s strength in various key industries and geographic location have enabled it to seize opportunities presented by economic growth in the central region of China to steadily grow its economy. According to the Guangxi Zhuang Autonomous Region Statistics Bureau and the Liuzhou Bureau of Statistics, Guangxi’s GDP increased from approximately RMB1,445.0 billion in 2013 to approximately RMB2,215.7 billion in 2020, and Liuzhou’s GDP increased from approximately RMB202.0 billion in 2013 to approximately RMB317.7 billion in 2020. A key component of Liuzhou’s growth has been urbanisation. Under the Thirteenth Five-Year Plan, Liuzhou realised high economic growth by focusing on the investment in and construction of urban infrastructure. The Liuzhou Municipal Government develops plans for such urban infrastructure growth, and the Group has played an important role in implementing the Liuzhou Municipal Government’s blueprint for urban infrastructure construction, municipal development and rail transit construction in Liuzhou.

The Group has established itself as one of the primary state-owned integrated infrastructure developers in Liuzhou and plays a key role in the urbanisation and construction of rail transit of Liuzhou. Given its important role in the development of Liuzhou, the Group believes that its businesses and operations are of key strategic importance to the economic development and growth plans of the Liuzhou Municipal Government, and the Group’s businesses have benefited, and will continue to benefit, from the development and growth of Liuzhou.

Strong relationship with the Liuzhou Municipal Government and Liuzhou SASAC and various government support in the form of capital injections, subsidiaries and policies

Since its establishment in 2017, the Group has received various government support in the form of capital injections, subsidiaries and policies from the Liuzhou Municipal Government and Liuzhou SASAC to support the Group’s operation and development. In addition to contracting the Group to undertake construction and development projects, the Liuzhou Municipal Government and Liuzhou SASAC have provided to the Group, among others, capital contributions, grants and subsidies each of which is described further below. This support has enhanced the Group’s ability to invest in capital-intensive and large-scale projects and maintain consistent growth:

• Capital contributions. As at the date of this Offering Circular, the Group had received total capital contributions of approximately RMB1.0 billion from Liuzhou SASAC under the approval of the Liuzhou Municipal Government. For the years ended 31 December 2018, 2019 and 2020, the Group received capital contributions of approximately RMB264.0 million, RMB50.0 million and RMB1,252.0 million, respectively, from the Liuzhou Municipal Government and Liuzhou SASAC. See “– History and Development” below for further information.

−80− • Land injection and land development fund allocation. In 2018, the Group received land injection of approximately RMB5,739.9 million. For the years ended 31 December 2018, 2019 and 2020, the Group received the capital injection of approximately RMB264.0.0 million, RMB50.0 million and RMB1,252.0 million, respectively, from the Liuzhou Municipal Government and Liuzhou SASAC. See Note 33 to the Audited Financial Statements included elsewhere in this Offering Circular for details of the capital injection and other contribution received by the Group from the Liuzhou Municipal Government and Liuzhou SASAC for the years ended 31 December 2018, 2019 and 2020, respectively.

• Government grants and subsidies. In 2020, the Group received government grants and subsidies of approximately RMB18.1 million from the Liuzhou Municipal Government for its affordable housing and real estate development projects. In 2018, the Group received government grants and subsidies of approximately RMB677.0 million from the Liuzhou Municipal Government for its urban rail transit construction. See Note 51 to the Audited Financial Statements and Note 52 to the Reviewed Financial Statements included elsewhere in this Offering Circular for details of the government grants and subsidies received by the Group for the years ended 31 December 2018, 2019 and 2020, and for the three months ended 31 March 2021, respectively.

• Policy support. The Liuzhou Municipal Government provides support to the Group on various aspects such as land resources, financial support and rail transit construction, including but not limited to the Liuzhou Urban Rail Transit Land Resources Development and Utilization Management Measures (《柳州城市軌道交通土地資源開發利用管理辦法》), which supports the Group’s land development work from a policy perspective, The Opinions of the People’s Government of Liuzhou on the Implementation of Funding Support for the Recent Construction of Liuzhou Urban Rail Transit (《柳州市人民政府關於柳州城市軌道交通近期建設資金支持的實施意見》), which states that the local government will finance project construction, and the fund gap for operation and maintenance will be bridged by the municipal urban rail transit specific fund amounting to not less than RMB400 million per year, The Opinions of the People’s Government of Liuzhou on Implementation of the Acceleration of the Construction of Urban Rail Transit (《柳州市人民政府關於加快推進城市軌道交通建設的實施意見》), which states that the local government will deepen the management of urban rail transportation construction and the utilization of the resources along the urban rail and The Letter of Intention from China Development Bank, Guangxi Zhuang Autonomous Region Branch for the Loan of Liuzhou Urban Rail Transit Planning (《國家開發銀行廣西壯族自治區分行關於柳州市城市軌道交通線網規劃項目貸款意向的函》), under which China Development Bank, Guangxi Zhuang Autonomous Region Branch will extend the loan amounting to approximately RMB39 billion not exceeding 29 years.

• Operational support. The Liuzhou Municipal Government issues a list of planned affordable housing construction projects annually and assigns the related investment and construction responsibilities to certain state-owned enterprises which assume independent responsibility for the financing of the projects. The Group, being one of the leading state-owned enterprises for affordable housing construction in Liuzhou, undertakes and is responsible for a significant portion of such projects every year. Furthermore, the Group is assigned by the Liuzhou Municipal Government to carry out primary land development, operation functions and rail transit construction in Liuzhou. The Group generally funds the assigned affordable housing projects, conducts primary land development for the land assigned to it under the relevant government approvals and urban rail transit construction with funds raised through internal working capital and external financing, including bank loans or issuance of corporate bonds. See “– Funding Sources” for details.

In addition, the Liuzhou Municipal Government and Liuzhou SASAC have the power to appoint, and as at the date of this Offering Circular had appointed, the Group’s executive director and senior management team and the Group’s supervisor, respectively. The Group believes that its strong relationship with the Liuzhou Municipal Government and Liuzhou SASAC, as well as the public’s recognition of its achievements in its businesses, has contributed to the Group’s stable asset expansion and underpins the Group’s significance in Liuzhou’s social and economic development.

−81− Diversified business model underpinned by stable financial performance

The Group has historically been focused on affordable housing and real estate development, primary land development, infrastructure construction, hotel operation, vehicle inspection business. Moreover, the Group is currently carrying out on behalf of the Liuzhou Municipal People’s Government, the investment and construction of the rail transit system. For the years ended 31 December 2018, 2019 and 2020, and for the three months ended 31 March 2020 and 2021, respectively, the Group’s total operating income was approximately RMB1,062.8 million, RMB1,614.4 million, RMB2,600.6 million, RMB109.0 million and RMB486.0 million, respectively; and the Group’s operating profit for the same periods was approximately RMB159.5 million, RMB158.7 million, RMB353.3 million, RMB-29.5 million and RMB41.9 million, respectively. With support from Liuzhou SASAC and the Liuzhou Municipal Government, the Group has expanded its business rapidly across its various business segments. The Group has also implemented prudent financial management policies to ensure a healthy financial profile and stable cash flow. The Group has a management control system that encompasses its financial management of the entire business process, including capital, liquidity risk management and investment. The Group has maintained a net profit since its establishment as its business model generally supports the recovery of all construction and other costs from the Liuzhou Municipal Government while obtaining a profit margin from its development and construction projects. See “Risk Factors – Changes in government policies, zoning and design plans and land use rights sales plans with respect to primary land development in Liuzhou may adversely affect the Group’s development plans and the proceeds the Group is entitled to receive from the sales of land use rights” in this Offering Circular.

Diversified funding channels to obtain sufficient capital for the Group’s business development

The Group funds its operation with external financing sources, including bank loans, corporate bonds, trust, financial leasing and other financing means. The Group maintains close relationships with reputable PRC banks, including but not limited to China Development Bank, Industrial and Commercial Bank of China, China Construction Bank, Bank of Communications, Agricultural Bank of China, China Everbright Bank, China Minsheng Bank, China Citic Bank, Huaxia Bank, Industrial Bank Co., Ltd., Shanghai Pudong Development Bank, Guilin Bank, Guangxi Beibu Gulf Bank and Bank of Liuzhou. As at 31 March 2021, the Group had total credit facilities of approximately RMB71.8 billion, of which approximately RMB42.3 billion had not been utilised. In July 2020, the Group received an “AA+” credit rating from China Chengxin Credit Rating Group (中誠信國際信用評級有限責任公司), a PRC domestic rating agency. As at 31 March 2021, the Group had total interest-bearing indebtedness in the amount of approximately RMB33.1 billion, including corporate bonds of approximately RMB9.9 billion, bank borrowings of approximately RMB10.3 billion and other borrowings of approximately RMB12.9 billion, respectively, representing approximately 30.0 per cent., 31.1 per cent. and 38.9 per cent., respectively, of the Group’s total interest-bearing indebtedness. As at 31 March 2021, the Group had issued 25 domestic bonds with a total outstanding principal amount of approximately RMB9.9 billion, including medium-term notes with a total outstanding principal amount of approximately RMB0.7 billion, enterprise bonds with a total outstanding principal amount of approximately RMB1.5 billion and private placement notes (including non-public corporate bonds) with a total outstanding principal amount of approximately RMB6.8 billion.

The Group has been exploring other channels for low-cost capital to further enhance its diversified financing structure, such as issuing bonds in the international capital markets. With its diverse sources of funding, the Group believes that it will continue to have access to sufficient capital to support its business operations and expansion.

−82− Experienced senior management and sound corporate governance

The Group’s board and senior management team combines extensive operating experience with a deep understanding of the markets in which the Group operates. The Group believes that a significant factor in its success is its experienced board members and senior management team, which include Mr. Zhuo Liujun (卓柳軍), Mr. Peng Zhichun (彭志春), Mr. Chen Renguang (陳仁廣), Ms. Ye Yuening (葉粵寧), Ms. Gan Hui (甘慧), Mr. Li Jidong (李積棟), Mr. Wu Qiyue (吳啟越) and Mr. Li Jiping (李繼平). Mr. Zhuo Liujun, the Group’s chairman of the Board, has more than 30 years of management experience in the real estate development construction industry. The Group’s board and senior management team are sensitive to commercial considerations and have a proven track record of capitalising on opportunities to maximise the Group’s profitability and improve cost efficiencies and synergies.

The Group has also established a sound and effective corporate governance structure which is in line with modern corporate governance practices. Its corporate governance system covers various aspects of the Group’s daily operations, such as safety, risk management and capital management. The Group has set up 17 departments, namely the Party Group Working Department (黨群工作部), the Human Resources Department (人力資源部), the General Office (綜合辦公室), the Discipline and Inspection Department (紀檢監察部), the Contract and Legal Department (合約法規部), the Engineering Department (工程部), the Asset Management Department (資產管理部), the Chief Engineering Office (總工辦), the Safety and Quality Supervision Department (安全質量監督部), the Audit Department (審計部), the Enterprise Management Department (企業管理部), the Resource Reservation and Development Department (資源儲備開發部), the Strategy Development Department (戰略發展部), the Finance Management Department (財務管理部), the Capital Operation Department (資本運作部), the Rail Construction Department (軌道建設部) and the Operation Branch (運營分公司). In addition, the Group has established comprehensive risk management and internal control systems to ensure that the Group’s daily operations comply with applicable laws and internal risk control mechanisms.

BUSINESS STRATEGIES

Speed up structural adjustment and transformation to form a three-level business pattern including core business, important business, and emerging business

During the 14th Five-Year Plan period, the Group will take public rail transit investment, construction and operation as the core, and form a three-level business pattern of core business, important business and emerging business through the development of public rail transit in cooperation with industrial investment, urban renewal, resource asset management and financial services.

• Core business. The first level of the business pattern is the core business, which helps the Group to achieve its mission and the social benefit that the Group should achieve. The core business includes public rail transportation business, covering, among others, railroad investment, rail construction, rail operation, trams and urban buses, integrated feeder interchange construction.

• Important business. The second level of the business pattern is the important business, which is the main profit source of the Group. The important business consists of industrial investment and urban renewal, such as rail transportation equipment manufacturing, modern logistics and postal express industry, science and technology innovation and professional services, industrial park operation, industrial finance, land development, TOD comprehensive development and rail town construction.

• Emerging business. The third level of the business pattern is the emerging business, which is the future growth point of the Group. The emerging business comprises resource asset operation and financial services, including utility operation, urban infrastructure and public service facility operation, hotel operation, trading, real estate investment trust, industrial fund investment and supply chain finance.

−83− Furthermore, the Group’s development strategy follows the “13558” pattern as set forth below to achieve the 2035 goal during the 14th Five-Year Plan period, under which the Group will build a “rail plus” industry development, provide new core functions like state-owned asset investment and operation as well as social responsibility fulfilment. The Group expects to realize a new pattern of the integration of industry, urban and human being and the sustainable development.

• One Orientation. The Group will grow as a comprehensive operator focusing on the business of rail transportation, industrial investment and urban renewal.

• Three Goals. The Group will aim at three directions, which include operating the high-quality public rail transportation investment and construction, building rail transportation industry cluster and enlarging the range of urban renewal and resource asset operation.

• Five Paths. The Group will develop mainly through five paths. i.e., innovation-driven, investment- driven, rail-driven, urban-rural integration development-driven and reform-driven paths.

• Five Business. The Group will operate five main businesses, consisting of public rail transportation business, industrial investment business, urban renewal business, resource asset operation business and financial services business.

• Eight Safeguards. The Group’s development strategy will be equipped with eight safeguards, which are the insistence of the leadership of the Communist Party, the enhancement of the innovation of technology, the innovation of financing channels, the shape of talented team, the optimisation of organization management, the promotion of information construction, the building of risk firewall and the endeavour of attracting policy support funds.

Continue to actively focus on primary land development and infrastructure construction and to support the urbanisation of Liuzhou

The Group plans to continue to leverage its existing experience and competitive strengths in primary land development and infrastructure construction to contribute further to the urbanisation of Liuzhou in support the municipal planning of the Liuzhou Municipal Government. During the Thirteenth Five-Year Plan period, Liuzhou implemented a coordinated development strategy to promote comprehensive and advanced urbanisation and the urbanisation rate of Liuzhou has reached more than 64.0 per cent. The Group will continue to actively focus on its core businesses of primary land development and infrastructure construction and in Liuzhou by undertaking development projects that will drive this urbanisation. As at the date of this Offering Circular, the Group is currently responsible for the construction of various key development projects including Liuxi Water Factory Entry and Exit Road Project (柳西水廠進出口道路工程), Jinglan District Underground Integrated Pipeline Corridor (靜蘭片區地下綜合管廊) and District from Binjiang West Road Huxi Bridge to Bailu Bridge (濱江西路壺西大橋至白露大橋段項目).

Take full advantage of rail transit network development plans to develop resources along the rail transit network

As part of the rail transit development projects and municipal planning of Liuzhou, the Group will continue conducting certain primary land development projects in alignment with the rail transit development projects undertaken by the Group. See “Competitive Strengths – Well-positioned to capitalize on the strategic location, economic growth and urbanisation of Liuzhou to achieve stable business growth” above. The Group will continue to follow closely the relevant government policies when undertaking rail transit construction, primary land development and infrastructure construction projects. The Group will continue to operate, strengthen and expand its existing businesses in alignment with the municipal planning of Liuzhou.

−84− In addition, the Group is currently carrying out on behalf of the Liuzhou Municipal People’s Government, the investment and construction of the rail transit system in Liuzhou through the subsidiary Liuzhou Longjian Investment & Development Co., Ltd. (柳州市龍建投資發展有限責任公司). The funding sources for the Group’s rail transit construction are funds raised by itself, such as proprietary cash and external financing, as well as government grants, of which government grants account for no less than 40%. As the rail transit construction business of the Group is at early stage, there are no revenue generated from such business for the time being. The revenue generated from the sale of rail transit tickets and the advertisement will be the primary source of the Group’s operating income from such business in the future.

Moreover, the Group supplies rail beams and accessories, such as PC rail beams, straining beams and shield tunnel segment through Liuzhou Rail Transit Engineering Co., Ltd. (柳州市軌道交通工程有限責任公司), a joint venture of the Group. The Group will take active steps to engage in urban rail transit construction and provide operation and maintenance service in Guangxi in the future.

As a domestic first-class rail transit advanced equipment manufacturing service base integrating R&D and design, vehicle and supporting equipment manufacturing, maintenance services, training and other functions, the Group and its subsidiaries are based in Liuzhou, serving Guangxi Province, oriented to Southwest China and radiating the Association of Southeast Asian Nations.

Continue to undertake affordable housing construction projects in Liuzhou

The Group intends to continue to undertake the development of affordable housing projects in Liuzhou. In recent years, the PRC Government has frequently emphasised the priority and importance of developing affordable housing and improving housing conditions for low-income households. The Group believes that the demand for housing, especially from the low-income segment of the population, will remain strong. During the period of Liuzhou’s Thirteenth Five-Year Development Plan (2016-2020), the Liuzhou Municipal Government constructed more than 139,300 units of affordable housing. In alignment with Liuzhou’s Thirteenth Five-Year Development Plan (2016-2020), the Group constructed a total planned GFA of approximately 2.8 million sq.m. of affordable housing at a total investment amount of approximately RMB10.9 billion. As a key developer and supplier of affordable housing in Liuzhou, the Group will strive to undertake affordable housing construction projects, particularly among Bifurong plot, Jinglan plot and Shuinan plot by taking advantage of its proven track record in affordable housing and real estate development.

Further transform and diversify its business model to create synergies among various business segments

To achieve an integrated and diversified business model with synergies, the Group intends to further consolidate and utilise its resources across its various business segments and further develop the fostering businesses of asset management and warehousing logistics services. The Group also plans to gradually transform itself into an integrated urban infrastructure resources developer and operator. Leveraging the strategic location of Liuzhou and the competitive edges of the Group’s core businesses, the Group will continue to explore new business opportunities. The Group will also continue to maximise its existing resources across its various business segments in order to generate stable cash flows, optimise its asset structure and consolidate the Group’s competitive strengths in its core businesses, and thus achieving sustainable and long-term business growth of the Group.

Continue to develop diversified financing channels to maintain well-capitalised growth

As the Group’s business operation in affordable housing and real estate development, primary land development and infrastructure construction are capital-intensive, the Group plans to explore and employ new financing channels, such as conducting bond issuances in international capital markets. In addition, the Group is seeking to build and reinforce close cooperative relationships with financial institutions to secure funding on more favourable terms to better support the Group’s financing needs for development and maintain a reasonable and balanced debt structure. The Group expects to further leverage its strong financing capability to facilitate organic growth.

−85− Continue to strengthen management and internal control systems to improve business and cost efficiencies

The Group intends to continue to streamline and rationalize its business operations and internal control systems in order to improve its operating margins, including through the implementation of stringent financial control and budget reporting policies, and cost-saving initiatives. In addition, the Group will strive to improve its cost of capital through actively monitoring its financing activities with the objective of lowering its cost of funds. In addition, the Group considers effective management to be critical in enhancing its overall operational efficiency. The Group will also allocate more resources to the Group’s research and development for construction, new technologies, resources integration, brand name, and project and operation management, while gradually implementing a centralised management system over its assets.

HISTORY AND DEVELOPMENT

The Issuer was incorporated on 6 March 2017 under approval of the Liuzhou SASAC. As at the date of this Offering Circular, the Issuer has a registered capital of RMB1.0 billion.

The table below sets forth selected key milestones in the Group’s history and development:

Year Events

2017 ...... In March 2017, the Liuzhou SASAC issued the “Approval for the Establishment of Guangxi Liuzhou Rail Transit Investment Development Group Co., Ltd.” (Liu Zhengxun [2002] No. 28) (《柳州市人民政府國有資產監督管理委員會關於組建廣西柳州市軌道交通投資發展集團有限公司的批覆》(柳國資覆[2017]20號)).

In May 2017, Liuzhou Rail Transit Industrial Development Co., Ltd. (柳州軌道交通產業發展有限公司) and Chongqing Mono Rail Transit Engineering Co., Ltd. (重慶單軌交通工程有限責任公司) jointly set up Liuzhou Rail Transit Engineering Co., Ltd. (柳州市軌道交通工程有限責任公司).

2018 ...... InJune 2018, the Group and China Railway Siyuan Survey and Design Group Co., Ltd. (中鐵第四勘察設計院集團有限公司) jointly set up Guangxi Liuzhou Intelligent Transportation Research and Design Institute Co. Ltd. (廣西柳州智能交通研究設計院有限公司).

In December 2018, the Operating Branch (運營分公司) of the Issuer was incorporated.

2019 ...... InNovember 2019, the Group and its partners, CRRC Group Co., Ltd. (中國中車集團有限公司) and Minsheng Securities Co., Ltd. (民生證券股份有限公司), launched Liuzhou Minsheng Modern Manufacturing Investment Fund (柳州民生現代製造投資基金).

−86− AWARDS AND RECOGNITIONS

The Group has received various honours and awards in recognition of, among others, the Group’s overall strengths and reputation in the industries in which it operates. The table below sets forth the Group’s major honours and awards received as at 31 March 2021:

Year Awards Awarding Body

2017...... Liuzhou City High-quality Development of Liuzhou Housing Demolition Supervision the New Era and New Role as an Advanced and Administration Office (中共柳州市委 Collective (柳州市高質量發展新時代新擔當員會) and Liuzhou Housing Demolition 新作為先進集體) Association (柳州市人民政府)

2018...... Certificate of Labor and Skill Competition Housing and Urban-Rural Development for Key Project Construction (全區重點工 Department of Guangxi Zhuang 程建設勞動和技能競賽優勝證書) Autonomous Region (廣西壯族自治區住房和城鄉建設廳) and Guangxi Zhuang Autonomous Region Federation of Trade Unions (和廣西壯族自治區總工會)

2019...... NewEraandNew Role as an Advanced Liuzhou Housing Demolition Supervision Collective (新時代新擔當新作為先進集體) and Administration Office (中共柳州市委員會) and Liuzhou Housing Demolition Association (柳州市人民政府)

2020...... The National Civilization Unit (全國文明 The Central Spiritual Civilization 單位) Construction Guidance Committee (中央精神文明建設指導委員會)

The Fourth Batch of Autonomous Region The CPC Guangxi Zhuang Autonomous (第四批自治區民族團結進步示範單位) Region Committee Publicity Department (中共廣西壯族自治區委員會宣傳部), The CPC Guangxi Zhuang Autonomous Region Committee United Front Work Department (中共廣西壯族自治區委員會統戰部) and Guangxi Zhuang Autonomous Region Ethnic and Religious Affairs Committee (廣西壯族自治區民族宗教事務委員會)

2021...... TheModel Grassroots Party Branch (樣板 Liuzhou SASAC 黨支部) and “Five-star” Party Branch (“五星級”黨支部)

−87− CORPORATE STRUCTURE

The chart below illustrates the corporate structure of the Group as at the date of this Offering Circular:

Liuzhou State-owned Assets Supervision and Administration Commission (㞛ⶆⶪ㓧⹄⚳㚱屯䓊䚋䜋䭉䎮⥼⒉㚫)

100%

Guangxi Liuzhou Rail Transit Investment Development Group Co., Ltd. (⺋大㞛ⶆⶪ年忻Ṍ忂㈽屯䘤⯽普⛀㚱旸℔⎠) (The Issuer)

65% 100% 90.91% 100% 100% 100% 100% 51%

Guangxi Liuzhou Intelligent Guangxi Liuzhou Liuzhou Longjian Liuzhou Longxing Liuzhou Bishui Liuzhou Xintai Liuzhou Rail Transportation Longtie Investment Investment Investment Lotus Hotel Real Estate Liuzhou Ritong Transit Industry Research and Development Development Development Management Development Industry Co., Ltd. Development Design Institute Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. (㞛ⶆⶪ㖍忂⮎㤕㚱 Group Co., Ltd. Co., Ltd. (⺋大㞛ⶆⶪ漵揝㈽ (㞛ⶆⶪ漵⺢㈽屯䘤 (㞛ⶆⶪ漵冰㈽屯䘤 (㞛ⶆ䡏㯜咖惺⸿䭉 (㞛ⶆⶪ搓㲘㇧⛘䓊旸℔⎠) (㞛ⶆ年忻Ṍ忂䓊㤕 (⺋大㞛ⶆ㘢傥Ṍ 屯䘤⯽㚱旸℔⎠) ⯽㚱旸屔ả℔⎠) ⯽㚱旸屔ả℔⎠) 䎮㚱旸℔⎠) 攳䘤㚱旸屔ả℔⎠) 䘤⯽㚱旸℔⎠) 忂䞼䨞姕妰昊㚱旸℔⎠)

BUSINESS

The Group is the leading state-owned independent commercial integrated urban resources developer focusing on affordable housing and real estate development and primary land development, infrastructure construction other ancillary businesses, including hotel operation, property leasing and vehicle inspection, in Liuzhou. Directly wholly-owned by Liuzhou SASAC, the Group since its establishment in 2017 has played an important role in implementing the Liuzhou Municipal Government’s blueprint for urban infrastructure construction and municipal development in Liuzhou. Leveraging financial and operational support provided by the Liuzhou Municipal Government, Liuzhou Finance Bureau and Liuzhou SASAC, the Group has established itself as one of the primary state-owned integrated infrastructure developers in Liuzhou and plays a key role in the urbanisation of Liuzhou. As at the date of this Offering Circular, the Issuer has a registered capital of RMB1.0 billion.

The Group primarily engaged in six business segments, namely affordable housing and real estate development, primary land development, infrastructure construction, hotel operation, vehicle inspection and other ancillary businesses including property leasing and consultation and sales of steels.

−88− The table below sets forth the Group’s operating income by business segment, each expressed as a percentage of the Group’s total operating income, for the periods indicated:

For the three months ended Year ended 31 December 31 March 2018 2019 2020 2020 2021 Amount % Amount % Amount % Amount % Amount % (RMB in millions, except for percentages)

Affordable housing and real estate development ...... 241.3 22.7 608.4 37.7 336.8 13.0 0.61 0.6 2.4 0.5 Primary land development .... 600.7 56.5 728.2 45.1 1,986.7 76.4 54.4 49.9 389.2 80.1 Infrastructure construction .... 9.2 0.9 7.0 0.4 7.3 0.3 1.1 1.0 1.1 0.2 Hotel Operation ...... 49.8 4.7 55.3 3.4 47.0 1.8 6.0 5.5 9.8 2.0 Vehicle Inspection ...... 9.63 0.9 8.7 0.5 5.60 0.2 0.9 0.9 0.8 0.2 Other businesses(1) ...... 152.2 14.3 206.8 12.8 217.2 8.4 45.9 42.1 82.8 17.0

Total...... 1,062.8 100.0 1,614.4 100.0 2,600.6 100.0 109.0 100.0 486.0 100.0

Note:

(1) For the years ended 31 December 2016, 2017 and 2018, and for the three months ended 31 March 2020 and 2021, respectively, operating income generated under other businesses segment primarily includes property leasing and other business, such as consultation and sales of steels. The relevant income was allocated under other businesses segment in accordance with the relevant accounting methods for the relevant period.

The table below sets forth the Group’s gross profit by business segment, each expressed as a percentage of the Group’s total operating income, for the periods indicated:

For the three months ended Year ended 31 December 31 March 2018 2019 2020 2020 2021 Amount % Amount % Amount % Amount % Amount % (RMB in millions, except for percentages)

Affordable housing and real estate development ...... 32.1 8.8 185.0 32.6 137.8 17.4 0.3 0.5 1.1 0.7 Primary land development .... 234.0 64.4 252.6 44.6 531.1 66.9 20.3 37.0 101.0 59.4 Infrastructure construction .... 9.2 2.5 7.0 1.2 7.3 0.9 1.1 1.9 1.1 0.6 Hotel Operation ...... (45.6) (12.5) (45.5) (8.0) (54.4) (6.8) (5.3) (9.6) (12.4) (7.3) Vehicle Inspection ...... 5.8 1.6 3.2 0.6 1.3 0.2 (0.5) (0.9) (0.2) (0.1) Other businesses(1) ...... 127.9 35.2 164.5 29.0 170.9 21.5 39.0 71.0 79.6 46.8

Total...... 363.4 100.0 566.8 100.0 794.0 100.0 54.9 100.0 170.2 100.0

Note:

(1) For the years ended 31 December 2016, 2017 and 2018, and for the three months ended 31 March 2020 and 2021, respectively, gross profit generated under other businesses segment primarily includes property leasing and other business, such as consultation and sales of steels. The relevant gross profit was allocated under other businesses segment in accordance with the relevant accounting methods for the relevant period.

−89− Affordable Housing and Real Estate Development

Overview

The Group is one of the leading state-owned enterprises investing in, financing and carrying out affordable housing and real estate development projects in Liuzhou. The Group is key to the implementation of the Liuzhou Municipal Government’s housing policies through the construction and development of affordable housing, including the redevelopment of shantytowns (棚戶區) and dangerous housing (危舊房). The Group has been engaged by the Liuzhou Municipal Government to undertake the construction and development of affordable housing in accordance with the Liuzhou Municipal Government’s annual affordable housing construction plans. Pursuant to the “Opinions of the Liuzhou Municipal Government on the Implementation of Concentrated Reconstruction of Dangerous Housing for Employees of Restructured Enterprises” (Liu Zheng Fa [2008] No. 28) (《柳州市人民政府關於改制企業職工危舊房集中改造工程實施意見》(柳政發[2008]28號)), the enterprises wholly owned by Liuzhou SASAC act as the primary entities for the reconstruction of dangerous housing for employees of restructured enterprises, which includes undertaking the financing and construction of these projects. The Group operates its affordable housing and real estate development business primarily through its wholly-owned subsidiary, Liuzhou Longjian Investment & Development Co., Ltd. (柳州市龍建投資發展有限責任公司).

For the years ended 31 December 2018, 2019 and 2020, and for the three months ended 31 March 2020 and 2021, respectively, operating income generated from the Group’s affordable housing and real estate development business was approximately RMB241.3 million, RMB608.4 million and RMB336.8 million, RMB0.61 million and RMB2.4 million, respectively, representing approximately 22.7 per cent., 37.7 per cent. and 13.0 per cent., 0.6 per cent., and 0.5 per cent., respectively, of the Group’s total operating income for the same periods.

Business Model

The Liuzhou Municipal Government issues a list of planned affordable housing construction projects annually and assigns the related investment and construction responsibilities to certain state-owned enterprises which assume independent responsibility for the financing of the projects. As one of the primary state-owned enterprises engaging in affordable housing construction in Liuzhou, the Group undertakes and is responsible for a significant portion of such projects every year. The Group usually funds its affordable housing and real estate development projects with its internal cash and external funding, such as bank loans or bonds issuance. The Liuzhou Municipal Government and Liuzhou Municipal Bureau of Finance also provides government grants and subsidies to the Group for construction of the affordable housing and real estate development projects. See “– Funding Sources” for details about external financing and government grants and subsidies received by the Group as at and for the years ended 31 December 2018, 2019 and 2020, and as at and for the three months ended 31 March 2020 and 2021, respectively.

The Group classifies its affordable housing construction projects into two types, namely (i) resettlement housing, under which the Group purchases the land use right, and (ii) low-rent housing, under which the relevant government department transfer the land use right to the Group. Liuzhou Longjian Investment & Development Co., Ltd. (柳州市龍建投資發展有限責任公司) is primarily responsible for construction of the Group’s resettlement housing projects and low-rent housing projects.

The Group will enter into a repurchase contract for each resettlement housing and a construction contract for each low-rent housing project, respectively, with the Liuzhou Land Reserve Centre (柳州市土地儲備中心) or the Liuzhou Municipal Government. Following the completion and transfer of affordable housing construction by the Group, the Liuzhou Municipal Bureau of Finance pays the Group the construction fees, which cover the Group’s costs of construction and a profit margin with reference to a certain percentage ranging from 5% to 15%. The Group generally receives payment of the affordable housing from the Liuzhou Municipal Bureau of Finance from one to three years. Also, the Group may sell the affordable housing to the public under the approval of the relevant governmental department.

−90− Projects Description

Completed Projects

As at 31 March 2021, the Group had completed 12 affordable housing and real estate development projects with a total GFA of approximately 1.66 million sq.m. and a total amount invested of approximately RMB5,954 million. The table below sets forth particulars of the Group’s completed affordable housing and real estate development projects as at 31 March 2021:

Total Date of Date of Amount No. Project Commencement Completion GFA Invested (RMB in (sq.m. in ’000) 100 millions)

1. Wenting Xinju (文庭新居) 2015 2018 153.30 8.08 2. Shuinan Garden (Phase 1) 2014 2017 75.10 3.50 (水南華庭一期) 3. Juxian Garden (聚賢佳苑) 2012 2014 161.50 4.00 4. Liuyun Huafu (柳韻華府) 2014 2018 26.00 2.60 5. Yiju Garden (宜居馨苑) 2014 2018 135.90 7.81 6. Duxiu Garden (Phase 1) 2011 2013 56.31 2.00 (獨秀苑一期) 7. Duxiu Garden (Phase 2) 2012 2014 326.00 7.60 (獨秀苑二期) 8. Pingshang City (品尚名城) 2012 2015 220.75 7.00 9. Ruyi Mingdi (如意名邸) 2012 2015 173.80 4.70 10. Xihu Garden (西壺苑) 2008 2009 24.37 0.85 11. Xingyuan Ju (星源居) 2012 2014 9.23 0.40 12. Meijing Garden (美景華庭) 2013 2018 296.00 11.00

Total 1,658.26 59.54

Projects under Construction

As at 31 March 2021, the Group had three affordable housing and real estate development projects under construction with a total planned GFA of approximately 0.92 million sq.m. and an estimated total investment amount of approximately RMB4,700 million, among which the amount of approximately RMB2,622 million was invested. The table below sets forth particulars of the Group’s affordable housing and real estate development projects under construction as at 31 March 2021:

Estimated Expected Total Total Date of Date of Investment Amount No. Project Commencement Completion Planned GFA Amount Invested (RMB in (RMB in (sq.m. in ’000) 100 millions) 100 millions)

1. Bifurong (碧芙蓉) 2017 2021 360.0 20.0 10.60 2. Shuinan Garden (Phase 2) (水南華庭(二期)) 2017 2021 307.0 14.0 3.89 3. Duxiu Garden (Phase 3) (獨秀苑三期) 2017 2021 255.0 13.0 11.73

Total 922.0 47.0 26.22

−91− Pipeline Projects

As at 31 March 2021, the Group did not have any pipeline of affordable housing and real estate development projects.

Primary Land Development

Overview

The Group is one of the designated entities entrusted by the Liuzhou Municipal Government to conduct primary land development in Liuzhou. The Group commenced primary land development in major districts of Liuzhou, including Chengzhong District (城中區), Yufeng District (魚峰區) and Liunan District (柳南區). The Group operates its primary land development business primarily through Liuzhou Longjian Investment & Development Co., Ltd. (柳州市龍建投資發展有限責任公司). Primary land development generally involves demolition of buildings, relocation and resettlement of residents, land clearance and construction of electricity, water, transportation, telecommunication, sewer, gas and heat networks thereby transforming the land into a condition ready for secondary real property development. As one of the main urban development and construction entities in Liuzhou, the Group benefits from good business continuity and engages in primary land development projects and supporting facilities projects of a total area of approximately 10,630 mu with a total investment amount of RMB8.42 billion and invested amount of RMB7.72 billion.

For the years ended 31 December 2018, 2019 and 2020, and for the three months ended 31 March 2020 and 2021, respectively, operating income generated from the Group’s primary land development business was approximately RMB600.7 million, RMB728.2 million, RMB1,986.7 million, RMB54.4 million and RMB389.2 million, respectively, representing approximately 56.5 per cent., 45.1 per cent. and 76.4 per cent., 49.9 per cent., and 80.1 per cent., respectively, of the Group’s total operating income for the same periods.

Business Model

Pursuant to the “Notice on Issuing the Trial Implementation of Land Consolidation and Operation of State-owned Assets Investment and Financing Platform Companies” (Liu Zheng Ban [2008] No. 74) (《關於印發國有資產投融資平台公司土地整理及運行試行辦法的通知》(柳政辦[2008]74號)) and other documents, the Group is assigned by the Liuzhou Municipal Government to carry out primary land development and operation functions in Liuzhou. The Group commenced primary land development in major districts of Liuzhou, including Chengzhong District (城中區), Yufeng District (魚峰區) and Liunan District (柳南區).

The Group operates its primary land development business primarily through Liuzhou Longjian Investment & Development Co., Ltd. (柳州市龍建投資發展有限責任公司). The Liuzhou Municipal Government initially provides land as capital contribution and grant of the relevant land use rights to the Group through the Liuzhou Land Reserve Centre (柳州市土地儲備中心). The Liuzhou Municipal Government also allocates land, without the grant of the land use rights, to the Group to conduct primary land development works. The Group then conducts primary land development (including demolition of buildings, relocation and resettlement of residents, land clearance and other supporting infrastructure construction such as construction of electricity and water networks) for the land assigned to it under the relevant government approvals with internal cash and funds raised through external financing, such as bank loans or issuance of corporate bonds. See “– Funding Sources” for details. The Group will sign the contract in relation to each project with the Liuzhou Land Reserve Centre (柳州市土地儲備中心). Upon completion of the development of a parcel of land, the Group transfers such land parcel back to the Liuzhou Land Reserve Centre for sale to the public through public tender and bidding processes and proceeds from sale of land will be deposited into a special account. Following the submission of a project settlement report prepared by the Group, the Liuzhou Municipal Bureau of Finance pays the Group the land development fees, which cover the Group’s costs of development (such as quota fee, plan and design fee, maintenance fee and demolition fee), and a profit margin.

−92− On 2 February 2016, MOF, Ministry of Land and Resources, China Banking Regulatory Commission and the People’s Bank of China promulgated the Notice on Regulating Land Banking and Fund Management Related Issues (Cai Zong [2016] No. 4) (關於規範土地儲備和資金管理等相關問題的通知(財綜[2016]4 號)) (“Circular 4”), which requires developers such as the Group to carry out primary land development in accordance with project buyback agreements to be entered between members of the Group and the relevant government authority. Pursuant to Circular 4, the land resources, finance and administrative bureaus of local governments shall be required to publish project information in respect of primary land development projects, including project plans, details of contractors or suppliers, performance evaluation standards, final results and achievements. Primary land developers or the designated contractors or suppliers are not permitted to completely sub-contract the development works to be carried out by them to third parties, and remuneration payable to primary land developers such as the Group may not be linked to the auction price.

Projects Description

Completed Projects

Since 2017 and as at 31 March 2021, the Group had completed one primary land development project with a total GFA of approximately 932 mu and a total amount invested of approximately RMB1,500 million. The table below sets forth particulars of the completed primary land development projects of the Group since 2017 and as at 31 March 2021:

Total Year of Amount No. Project Completion Land Area Invested (RMB in (mu.) millions)

1. Shuinan District (水南片區) 2017 932 1,500

Total 932 1,500

Projects under Construction

As at 31 March 2021, the Group had four primary land development projects under construction with a total planned GFA of approximately 9,698 mu and an estimated total investment amount of approximately RMB6,420 million, among which the Group had invested approximately RMB5,059 million. The table below sets forth particulars of the Group’s primary land development projects under construction as at 31 March 2021:

Estimated Total Total Planned Investment Amount No. Project Land Area Amount Invested (RMB in (RMB in (mu) millions) millions)

1. Jing Lan District (靜蘭片區) 8,000 4,800 4,000 2. Bifurong District (碧芙蓉片區) 275 700 529 3. South Coast of Xiangshui River (響水河南岸) 163 400 220 4. Western River District (河西片區) 1,260 520 310

Total 9,698 6,420 5,059

−93− Infrastructure Construction

Overview

The Group undertakes infrastructure construction in Liuzhou through entering into agency agreements with property owners and government authorities. The Group’s infrastructure construction business primarily comprises the investment, development and construction of urban infrastructure projects, such as the construction and development of schools, transportation infrastructure, roads and other public facilities. The Group mainly manages and operates its infrastructure construction business through Liuzhou Longjian Investment & Development Co., Ltd. (柳州市龍建投資發展有限責任公司).

In recent years, the Group has undertaken numerous large-scale infrastructure construction projects, such as Liuxi Water Factory Entry and Exit Road Project (柳西水廠進出口道路工程), Liuzhou Xueyuan Road Middle School (柳州市學院路中學), A and B District from Binjiang West Road Huxi Bridge to Bailu Bridge Project (濱江西路虎溪大橋至白露大橋AB段工程), and Jinglan District Underground Integrated Pipeline Corridor (靜蘭片區地下綜合管廊). As at 31 March 2021, the Group had undertaken 20 key infrastructure construction projects, and among which 17 projects were completed with a total amount invested of approximately RMB2,484 million. For the years ended 31 December 2018, 2019 and 2020, and for the three months ended 31 March 2020 and 2021, respectively, operating income generated from the Group’s infrastructure construction business was approximately RMB9.2 million, RMB7.0 million, RMB7.3 million, RMB1.1 million and RMB1.1 million, respectively, representing approximately 0.9 per cent., 0.4 per cent., 0.3 per cent., 1.0 per cent., and 0.2 per cent., respectively, of the Group’s total operating income for the same periods.

Business Model

The Group’s infrastructure construction projects are conducted under a construction agency model. Under the construction agency model, the Group carries out construction work in accordance with agency agreements entered between members of the Group and the principal, which are generally the property owners and government authorities. These agreements typically provide for the Group to be responsible for the planning, management and construction of the infrastructure project and specifies, among other things, the construction timeline, the total approved project investment budget and the instalment payment arrangements. The construction agency model typically allows the Group to be paid the actual project costs, including management costs, finance costs, taxes and other project related expenses, and an additional profit margin calculated on the total investment costs for an individual project (as specified in the relevant agency agreement).

The principal of the agency agreements provides funding for the construction projects prior to commencement of the projects and during various stages of construction upon its review and approval of the relevant payment and construction progress reports submitted by the Group. Prior to project completion, the Liuzhou Municipal Bureau of Finance reviews and determines the total investment costs and income to be received by the Group for each infrastructure construction project. Upon completion of an infrastructure construction project and the inspection and acceptance of such project by the Liuzhou Municipal Bureau of Finance and the respective property owners, the Group submits its final investment costs for the completed project to the property owners and the relevant government authorities for review and approval. Property owners and the relevant government authorities are then required to make payments to the Group in accordance with the “Notice of the Ministry of Finance on Printing and Distributing the Regulations on the Construction Cost of Capital Construction Projects” (Cai Jianjian [2016] No. 504) (“財政部關於印發《基本建設項目建設成本管理規定》的通知”(財建[2016]504號文)).

−94− Construction Management and Third-Party Contractors

The Group is required to comply with applicable PRC laws and regulations governing the construction contracts for public infrastructure or government sponsored development projects. Pursuant to such laws and the Laws on Bids and Tenders (中華人民共和國招標投標法) issued by the Standing Committee of the National People’s Congress (the “SCNPC”), the Group is required to award construction contracts for the development and construction of its infrastructure development projects pursuant to competitive tenders open to public participation. As such, the Group primarily engages independent third-party contractors for the actual project engineering, design and construction works via competitive public tender and bidding processes. The public tender and bidding processes generally take into account a number of factors when selecting third-party contractors, such as the third-party contractor’s track record, reputation, cost, qualification and proposed schedule. The Group retains overall management and supervisory oversight over all of its infrastructure construction projects.

Third-party contractors are required to enter into contractor agreements with the Group. The principal terms of the contractor agreements include the scope of work, timetable for construction, fees and payment terms and warranties with respect to quality and timely completion of the construction. The value of the contractor agreements is determined primarily by the cost of labour and material as well as construction progress, subject to adjustments set forth in the agreements. Third-party contractors are in charge of selecting suppliers in line with relevant laws and regulations as well as standards and policies set by the Group. The Group typically makes payments at certain milestones in accordance with the contractor agreement and generally settles approximately 97 per cent. of the total payment upon completion of the project. The Group retains the remaining payment to cover any contingent expenses incurred as a result of construction defects discovered subsequently. In the event of a delay in construction or a breach of warranty, the Group may seek penalties or other remedies against the third-party contractor. The Group’s third-party contractors are generally large construction companies with high grade and comprehensive qualifications, such as China Construction Third Engineering Bureau Group Company Limited and China Construction Fifth Engineering Division Corporation Limited.

The construction materials used in the Group’s infrastructure construction projects, such as concrete, tar and pipes, are generally procured by third-party contractors. The Group and its contractors typically agree on a fixed fee for construction work completed within a specified scope. However, in the event of significant fluctuation in the price of construction materials, the contractors are generally responsible for any price fluctuations within five per cent., and any significant price fluctuations above or below five per cent. being subject to the specific price adjustment provision under each contract. The Group does not engage in any hedging activities with respect to price fluctuations of construction materials for its infrastructure projects.

−95− Projects Description

Completed Projects

As at 31 March 2020, the Group had completed 17 key infrastructure construction projects with a total amount invested of approximately RMB2,484 million. The table below sets forth particulars of the completed infrastructure construction projects of the Group as at 31 March 2021:

Total Date of Date of Amount No. Project Commencement Completion Invested (RMB in 100 millions)

1. Jinglan Primary School (靜蘭小學) June 2011 December 2015 0.59 2. Guiliu Road Middle School (桂柳路中學) April 2015 June 2017 1 3. Xueyuan Road Middle School December 2016 December 2018 0.84 (學院路中學) 4. Qianmao Middle School (前茅中學) June 2016 December 2018 1.12 5. East Section of Xianglan Middle Road April 2016 December 2017 2.92 (香蘭中路東段) 6. East Section of Paotuan Road (炮團路東段) July 2015 December 2017 3.3 7. Liusheng Road (柳盛路) May 2015 August 2016 0.65 8. Louti Mountain District Road Network May 2015 June 2016 0.55 (樓梯山片區路網) 9. Hongxi Road (紅西路) January 2013 September 2015 0.23 10. Liuzhou Rail Transit PC Rail Beams February 2017 May 2018 1 Fabrication Yard (Phase 1) (柳州市軌道交通PC軌道梁預製場(一期) 11. Liusheng Road Urban Underground January 2016 July 2018 1.13 Integrated Pipeline Corridor (柳盛路城市地下綜合管廊) 12. Qiantan Landscape Project (前灘景觀工程) August 2016 December 2019 2.71 13. Liuzhou Martyrs’ Memorial Hall August 2017 December 2018 0.2 (柳州市烈士紀念館) 14. Riverside Landscape Avenue March 2012 December 2018 6.7 (濱江景觀大道) 15. The Renovation of Heping Road March 2016 December 2017 0.4 (和平路改造) 16. The Renovation of Hongyan Road April 2016 December 2017 0.2 (紅岩路改造) 17. The Construction of West Square of September 2015 December 2017 1.3 Liuzhou Station (柳州站西廣場工程建設)

Total 24.84

−96− Projects under Construction

As at 31 March 2021, the Group had 3 key infrastructure construction projects under construction with an estimated total investment amount of approximately RMB2,602 million, among which the investment amount of approximately RMB625 million was invested. The table below sets forth particulars of the Group’s infrastructure construction projects under construction as at 31 March 2021:

Estimated Expected Total Total Year of Year of Investment Amount No. Project Commencement Completion Amount Invested (RMB in (RMB in 100 millions) 100 millions)

1. Liuxi Water Factory Entry and December 2017 December 6.36 1.5 Exit Road Project (柳西水廠 2019 進出口道路工程) 2. Jinglan District Underground August 2018 December 12.77 0.30 Integrated Pipeline Corridor 2021 (靜蘭片區地下綜合管廊) 3. District from Binjiang West August 2018 December 6.89 4.45 Road Huxi Bridge to Bailu 2019 Bridge (濱江西路壺西大橋至白露大橋段項目)

Total 26.02 6.25

Hotel Operation

The Group’s hotel operation business primarily consists of the provision of hotel management, property management, catering services and entertainment services. The Group operates its hotel operation business through its wholly-owned subsidiary, Liuzhou Bishui Lotus Hotel Management Co., Ltd. (柳州碧水蓮花酒店管理有限公司). For the years ended 31 December 2018, 2019 and 2020, and the three months ended 31 March 2020 and 2021, operating income generated from the Group’s hotel operation business was approximately RMB49.8 million, RMB55.3 million, RMB47.0 million, RMB6.0 million and RMB9.8 million, respectively, representing approximately 4.7 per cent., 3.4 per cent., 1.8 per cent., 5.5 per cent. and 2.0 per cent., respectively, of the Group’s total operating income for the same periods.

Business Model

Liuzhou Bishui Lotus Hotel Management Co., Ltd. (柳州碧水蓮花酒店管理有限公司) delegates Guangzhou White Swan Hotel Management Company (廣州白天鵝酒店管理公司) to operate its property, Lotus Mountain (蓮花山莊). Located by Liujiang River, Lotus Mountain has a total floor area of more than 100,000 square meters and consists of 343 guest rooms, the Chinese restaurant, the Western restaurant, the specialty restaurant, ballrooms and six meeting rooms. The soft opening of Lotus Mountain was in September 2017, and the Group’s hotel operation business achieved operating income of approximately RMB700 million in 2017. In 2018, the operating income generated from the Group’s hotel operation business was approximately RMB49.8 million. The income from the hotel operation will make substantial contribution to the Group’s total operating income in the future. In 2020, the occupancy rate of Lotus Mountain was 53.21 per cent. and the average price of the hotel is RMB411.93 per night.

−97− Vehicle inspection

The Group provides vehicle inspection services under its wholly-owned subsidiary, Liuzhou Ritong Industry Co., Ltd. (柳州市日通實業有限公司). For the years ended 31 December 2018, 2019 and 2020, and the three months ended 31 March 2020 and 2021, operating income generated from the Group’s vehicle inspection business was approximately RMB9.6 million, RMB8.7 million, RMB5.6 million, RMB0.9 million and RMB0.8 million, respectively, representing approximately 0.9 per cent., 0.5 per cent., 0.2 per cent., 0.9 per cent. and 0.2 per cent., respectively, of the Group’s operating income generated from the Group’s other businesses for the same periods.

Business Model

The Group engages in motor vehicle safety technical inspection, motor vehicle emission inspection, comprehensive performance testing and other automotive inspection services.

Other Businesses

As at the date of this Offering Circular, the Group’s other businesses primarily include property leasing and others including consultation and sales of steels. For the years ended 31 December 2018, 2019 and 2020, and the three months ended 31 March 2020 and 2021, operating income generated from the Group’s other business was approximately RMB152.2 million, RMB206.8 million, RMB217.2 million, RMB45.9 million and RMB82.8 million, respectively, representing 14.3 per cent., 12.8 per cent., 8.4 per cent., 42.1 per cent. and 17.0 per cent., respectively, of the Group’s total operating income for the same periods.

FUNDING SOURCES

The Group’s primary businesses follow a business model whereby high upfront capital requirements are gradually offset by earnings along the process of each project. Therefore, a certain amount of working capital must come from external financing sources. At present, the Group has established diversified, market-oriented and commercialised funding channels that serve the Group’s business expansion and satisfy the Group’s working capital demands. The Group primarily invests in and finances its operations with both internal working capital and external financing sources.

• Capital contributions. Since its establishment in 2017, the Group has received capital contribution from Liuzhou SASAC under the approval of the Liuzhou Municipal Government. As at the date of this Offering Circular, the Group had received total capital contributions of RMB1.0 billion from Liuzhou SASAC under the approval of the Liuzhou Municipal Government. See “– History and Development” above for further information.

• External financing. The Group also funds its operations with external financing sources, including bank loans, corporate bonds, trust, financial leasing and other financing means. The Group maintains close relationships with reputable PRC banks, including but not limited to China Development Bank, Industrial and Commercial Bank of China, China Construction Bank, Bank of Communications, Agricultural Bank of China, China Everbright Bank, China Minsheng Bank, China Citic Bank, Huaxia Bank, Industrial Bank Co., Ltd., Shanghai Pudong Development Bank, Guilin Bank, Guangxi Beibu Gulf Bank and Bank of Liuzhou. As at 31 March 2021, the Group had total credit facilities of approximately RMB71.8 billion, of which approximately RMB42.3 billion had not been utilised.

−98− As at 31 March 2021, the Group had total interest-bearing indebtedness in the amount of approximately RMB33.1 billion, including corporate bonds of approximately RMB9.9 billion, bank borrowings of approximately RMB10.3 billion, and other borrowings of approximately RMB12.9 billion, respectively, representing approximately 30.0 per cent., 31.1 per cent. and 38.9 per cent., respectively, of the Group’s total interest-bearing indebtedness. As at 31 March 2021, the Group had issued 25 domestic bonds with a total outstanding principal amount of approximately RMB9.9 billion, including medium-term notes with a total outstanding principal amount of approximately RMB0.7 billion, enterprise bonds with a total outstanding principal amount of approximately RMB1.5 billion and private placement notes (including non-public corporate bonds) with a total outstanding principal amount of approximately RMB6.8 billion.

GOVERNMENT REGULATIONS

The operations of the Group are subject to the various laws and regulations of the jurisdictions in which it operates. See “PRC Regulations” in this Offering Circular for further details. The Group’s properties are subject to routine inspections by government officials with regard to various safety and environmental issues. As of the date of this Offering Circular, the Group believes that it is in compliance in all material respects with government regulations currently in effect in the jurisdictions in which it operates. As of the date of this Offering Circular, the Group is not aware of significant problems experienced by any member of the Group with respect to compliance with government regulations in relation to its operations which could materially adversely affect its properties or operations, nor is it aware of any pending government legislation that might have a material adverse effect on its properties or operations.

INTERNAL CONTROLS

As an integral part of overall risk management, the Group places great importance on internal control. The Group formulated strong internal control mechanism to oversee and manage the personnel, projects, financing and investments of its subsidiaries. The shareholder representatives, directors and supervisors of the Group and its subsidiaries are nominated and appointed by Liuzhou SASAC in order to effectively oversee and manage the operation of the Group. The Group established a material information reporting system, requiring its subsidiaries to provide timely reporting to the Issuer of matters that would have a significant impact on the Group. The Group also implements a contact system for the management of its controlled subsidiaries, through which it assigns specific contacts of the Group by departments and by business lines for internal control reporting.

In order to improve overall operational efficiency, the Group has established a management structure in a four-tiered system comprising the board of directors, the general manager, the deputy general manager and 17 departments with strict supervision by its supervisor. See “Directors, Supervisors and Senior Management” in this Offering Circular for further details.

RISK MANAGEMENT

The Group has established a risk management system to ensure compliance with regulatory requirements and to implement risk control measures to lower operational and investment risks. The risk management system covers different aspects of the Group’s operations, including budget management, invested projects finance management, guarantee management, remuneration management, safety production, subsidiaries management, investment and financing management, connected transaction, information disclosure and incidents management. Each level and department of the Group is informed of the Group’s internal control and risk management policies. The systematic approach adopted by the Group has helped the Group to manage its business in a disciplined manner.

−99− QUALITY CONTROL

The Group has established comprehensive quality control procedures and conducts its constructions and supervises its subcontractors in accordance with such procedures to ensure quality and compliance with contract requirements. The following is a summary of the key quality control measures currently in place:

• Inspection of raw materials. The Group inspects raw materials in accordance with its quality standards. The Group examines the raw material before receipt and payment as well as after delivery of the raw material.

• On-site inspection and spot inspection. The Group conducts periodic inspections and spot inspections on its construction projects and requires personnel to implement rectification measures if any quality control issues are identified. Furthermore, the Liuzhou Municipal Government and other relevant government authorities will also conduct periodic inspections and spot inspections of the construction projects.

• Completion inspection. Before the completed projects are delivered, such projects must pass inspection by the Liuzhou Municipal Government and other relevant government authorities.

OCCUPATIONAL SAFETY AND ENVIRONMENTAL PROTECTION

The Group adopts a comprehensive work safety system to ensure employee safety. The Group has established safety protocols and also implemented guidelines setting out the responsibilities of safety officers. The safety officer is involved in the planning and implementation of each project to ensure that safety objectives are met and plays a key role in monitoring the effectiveness of the safety measures, educating project members on the safety requirements, handling any infractions, ensuring safety records are properly kept and managing onsite safety and emergency incidents. The Group believes that as of the date of this Offering Circular, it is in compliance in all material respects with applicable safety regulations.

The Group is subject to environmental laws and regulations governing air pollution, noise emissions, hazardous substances, water and waste discharge and other environmental matters issued by various governmental authorities in Liuzhou. The Group believes that as of the date of this Offering Circular, it is in compliance in all material respects with applicable environmental laws and regulations. As at the date of this Offering Circular, the Group is not in breach of any applicable environmental laws and regulations which have led to material penalties imposed on the Group by environmental authorities and there are no existing material legal proceedings, arbitrations or administrative penalties against the Group or investigations to which it is or might become a party.

INSURANCE

The Group purchases pension insurance, unemployment insurance, medical insurance, maternity insurance and personal injury insurance for its employees according to the relevant PRC laws and regulations. The Group maintains insurance coverage in amounts that it believes are commensurate with its risk of loss and industry practice. Consistent with what the Group believes to be customary practice in the PRC, it does not carry any business interruption insurance, key-man insurance, insurance covering potential environmental damage claims and contractors all-risk and third-party liability insurance. There is a risk that the Group does not have sufficient insurance coverage for losses, damages and liabilities should any of such arise from its business operation. See “Risk Factors – The insurance coverage of the Group may not adequately protect it against all operational risks” in this Offering Circular.

− 100 − EMPLOYEES

As at 31 March 2021, the Group had approximately 65 employees, among which approximately 92.3 per cent. of the Group’s employees had a bachelor’s diploma or above.

In accordance with the applicable regulations of local government in Liuzhou where the Group has business operations, the Group makes contributions to the pension contribution plan, medical insurance, unemployment insurance, maternity insurance and personal injury insurance. The amount of contributions is based on the specified percentages of employees’ aggregate salaries as required by relevant government authorities in Liuzhou. The Group also makes contributions to an employee housing fund according to applicable PRC regulations. In addition to statutory contributions, the Group provides annual bonuses to its employees. The Group enters into an employment contract with each of its employees in accordance with applicable PRC laws. Such contracts include provisions on wages, vacation, employee benefits, training programs, health and safety, confidentiality obligations and grounds for termination.

LEGAL PROCEEDINGS

The Group is from time to time involved in disputes and legal proceedings arising in the ordinary course of its business.

To the best knowledge of the Issuer, as at the date of this Offering Circular, there are no current litigation, arbitration or administrative proceedings against the Group or any of its directors that could have a material adverse effect on its business, results of operations or financial condition.

− 101 − DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

DIRECTORS

In accordance with the articles of association of the Issuer, the board of directors (the “Board”) of the Issuer shall consist of four directors, among which there is one employee director. Currently, the Board of the Issuer consists of five directors, including one chairman and four directors. The Board is primarily responsible for, among others, implementing the decisions adopted by the Liuzhou Municipal Government and Liuzhou SASAC, determining the business plans and investment proposals, making the annual financial budget plans and determining the management structure of the Issuer.

The following table sets forth certain information concerning the Issuer’s directors as at the date of this Offering Circular:

Name Age Title

Mr. Zhuo Liujun (卓柳軍)...... 58 Director and Chairman of the Board Mr. Peng Zhichun (彭志春)...... 42 Director Mr. Chen Renguang (陳仁廣)...... 55 Director and Deputy General Manager Ms. Ye Yuening (葉粵寧)...... 55 Director and Deputy General Manager Ms. Gan Hui (甘慧) ...... 53 Employee Director

Mr. Zhuo Liujun (卓柳軍) is the chairman and a secretary of the party committee of the Issuer, an engineer and a member of the Communist Party of China (the “CPC”). Mr. Zhuo also currently serves as a director of Liuzhou Bank Co., Ltd. (柳州銀行股份有限公司). Prior to joining the Issuer, Mr. Zhuo previously served as a project manager of Liubei District First Construction Engineering Company (柳北區第一建築工程公司), a deputy manager of the Sixth Branch of Liuzhou Real Estate Development Co., Ltd., (柳州市房地產開發有限責任公司第六分公司), an office director, a director of engineering, a deputy general manager, a general manager of the tertiary industry, a general manager and a secretary of the party committee of Liuzhou Real Estate Development Co., Ltd. (柳州市房地產開發有限責任公司), a construction worker of a construction company in Liuzhou, and a deputy chief of administration of Liuzhou Vegetable Wholesale Food Company (柳州市蔬菜副食品總公司). Mr. Zhuo obtained his bachelor’s degree in industrial and civil construction from Guangxi University School of Civil Engineering and Architecture (廣西大學土木建築工程學院).

Mr. Peng Zhichun (彭志春) is a director, a deputy secretary of the party committee of the Issuer, an assistant engineer and a member of the CPC. Mr. Peng also currently serves as a director of Liuzhou Bank Co., Ltd. (柳州銀行股份有限公司). Prior to joining the Issuer, Mr. Peng previously served as an inspector of Guangxi Urban Construction Consulting Co., Ltd. (廣西城市建設諮詢有限公司), a business host of the engineering department, a deputy manager of the investment department and the planning and development department of Liuzhou Dongrun (Yanghe) Investment Development Co., Ltd. (柳州東潤(陽和)投資開發有限公司), a manager, an assistant to the general manager and a deputy general manager of the planning and development department of Liuzhou Dongtong Investment & Development Co., Ltd. (柳州東通投資發展有限公司) (while serving as a section chief of the Fixed Assets Investment Department of Liuzhou SASAC (柳州市發改委固定資產投資科). Mr. Peng obtained his masters’ degree in logistics engineering from Sichuan University (四川大學).)

Mr. Chen Renguang (陳仁廣) is a director and the deputy general manager of the Issuer. Mr. Chen also currently serves as an executive director and the general manager of Liuzhou Longjian Investment & Development Co., Ltd. (柳州市龍建投資發展有限責任公司). Prior to joining the Issuer, Mr. Chen previously served as a deputy chief engineer and a deputy general manager of Real Estate Company of Shi Yi Ye Construction Group Co., Ltd. (十一冶建設集團有限責任公司房地產公司), an assistant to the general manager, a deputy general manager and a director of Liuzhou City Investment and Construction Development Co., Ltd. (柳州市城市投資建設發展有限公司), and a director and a general manager of Liuzhou Sewage Treatment Co., Ltd. (柳州市污水治理有限責任公司).

Ms. Ye Yuening (葉粵寧) is a director and the deputy general manager of the Issuer, a senior engineer and a member of the CPC. Prior to joining the Issuer, Ms. Ye previously served as an assistant engineer, an engineer and a senior engineer of the Survey Design Institute and Building Planning Division of the Liuzhou Railway Bureau (柳州鐵路局勘測設計院房建規劃科) and a senior engineer of the Investment Development Department of Liuzhou Investment Holding Co., Ltd. (柳州市投資控股有限責任公司投資發展部). Ms. Ye obtained her bachelor’s degree in industrial and civil construction from Guangxi University School of Civil Engineering and Architecture (廣西大學土木建築工程學院).

− 102 − Ms. Gan Hui (甘慧) is an employee director and the office chief of the Issuer. Prior to joining the Issuer, Ms. Gan previously served as the company secretary of Liuzhou Municipal Engineering Corporation (柳州市政工程總公司), an office chief of Guangxi Liuzhou Local Products Company (廣西柳州地區土產公司), an office chief, a director of the planning and development department and a director of the party group working department of Guangxi Liuzhou Municipal Construction Investment Development Co., Ltd. (廣西柳州市建設投資開發有限責任公司), a vice chairman of the labor union and a manager of the comprehensive management department of Liuzhou Longjian Investment & Development Co., Ltd. (柳州市龍建投資發展有限責任公司) and a director of the discipline inspection and supervision office of the Issuer.

SUPERVISORS

The Issuer currently has five supervisors as at the date of this Offering Circular. The Issuer’s supervisors are responsible for monitoring the Issuer’s financial matters and overseeing the actions of the executive director and the senior management of the Issuer.

The table below sets forth information regarding the Issuer’s supervisors as at the date of this Offering Circular:

Name Age Title

Mr. He Kaiqi (何開琦) ...... 54 Chairman of the Supervisory Board Mr. Yan Xiaoming (嚴小明)...... 58 Supervisor Ms. Chen Lianping (陳戀萍)...... 40 Supervisor Mr. Yuan Shuai (袁帥) ...... 34 Supervisor Ms. Tian Fangji (田芳佶)...... 40 Supervisor

Mr. He Kaiqi (何開琦) is the chairman of the supervisory board of the Issuer. Prior to joining the Issuer, Mr. He previously served as a director of the Merchants Bureau, a director of the Party and Government Office, a member of the Party Working Committee and a deputy director of the Management Committee of Liudong New District in Liuzhou, and a chairman and a secretary of the party committee of Guangxi Liuzhou Small and Medium-sized Enterprises Credit Guarantee Co., Ltd. (廣西柳州中小企業信用擔保有限公司). Mr. He holds a bachelor’s degree.

Mr. Yan Xiaoming (嚴小明) is a supervisor of the Issuer. Prior to joining the Issuer, Mr. Yan previously served as a secretary of the Communist Youth League Committee, a youth member of the party working committee, a deputy director of the Department of Industry and Finance, a deputy director and a director of the Off-budget Department and a deputy director and a director of the Infrastructure and Construction Department of the Liuzhou Municipal Finance Bureau, a deputy secretary of the Communist Youth League Committee of Liuzhou Municipal Authorities, and a director officer and a first-level director officer of Liuzhou SASAC. Mr. Yan holds a bachelor’s degree.

Ms. Chen Lianping (陳戀萍) is a supervisor of the Issuer. Ms. Chen is one of the “Ten-Hundred-Thousand” Top Accounting Talents in Liuzhou and one of the “Ten-Hundred-Thousand” Top Accounting Training Targets in Guangxi. Prior to joining the Issuer, Ms. Chen previously served as a cashier, an accountant, a comprehensive administrator and a risk manager of Bank of Communications, Liuzhou branch, and a finance director of Liuzhou Municipal Finance Director Management Centre (柳州市財務總監管理中心). Ms. Chen holds a bachelor’s degree.

Mr. Yuan Shuai (袁帥) is a supervisor and a deputy manager of the capital operation department of the Issuer, an economist and a member of the CPC. Mr. Yuan also currently serves as the chairman of the supervisory board of the Issuer. Mr. Yuan previously served as a deputy general manager of Liuzhou Yitong Xinhe Industrial Investment Development Co., Ltd. (柳州益通馨和實業投資發展有限公司). Mr. Yuan obtained his bachelor’s degree in business administration from Beijing University of International Business and Economics (北京對外經濟貿易大學).

− 103 − Ms. Tian Fangji (田芳佶) is a supervisor and a deputy manager of the asset management department of the Issuer. Ms. Tian previously served as a staff member of Liuzhou Vegetable Technology Promotion Station (柳州市蔬菜技術推廣站), a supervisor of the onsite sales of Liuzhou Real Estate Development Co., Ltd. (柳州市房地產開發有限責任公司), an employee of the asset management department of Liuzhou Longjian Investment & Development Co., Ltd. (柳州市龍建投資發展有限責任公司), and an employee of the asset management department of the Issuer. Ms. Tian holds a bachelor’s degree.

SENIOR MANAGEMENT

The table below sets forth information regarding the Issuer’s senior management team as at the date of this Offering Circular:

Name Age Title

Mr. Li Jidong (李積棟)...... 34 General Manager Mr. Chen Renguang (陳仁廣)...... 55 Deputy General Manager Ms. Ye Yuening (葉粵寧)...... 55 Deputy General Manager Mr. Wu Qiyue (吳啟越)...... 56 Deputy General Manager Mr. Li Jiping (李繼平) ...... 43 Deputy General Manager

Mr. Li Jidong (李積棟) is a senior engineer and a general manager of the Issuer. Mr. Li previously served as a post-doctoral fellow in the transportation engineering major jointly trained by Beijing University of Technology and the technology center of China Construction Engineering Co., Ltd. (中國建築股份有限公司技術中心) and a senior R&D engineer and a member of discipline inspection committee of Party Branch in the technology center of China Construction Engineering Co., Ltd. (中國建築股份有限公司技術中心). Mr. Li holds a bachelor’s degree in civil engineering from Shandong University of Science and Technology (山東科技大學) and a doctorate degree in civil engineering from Beijing University of Technology (北京工業大學).

Mr. Chen Renguang (陳仁廣) serves as a deputy general manager of the Issuer. For Mr. Chen’s biography, see “– Directors” above.

Ms. Ye Yuening (葉粵寧) serves as a deputy general manager of the Issuer. For Ms. Ye’s biography, see “– Directors” above.

Mr. Wu Qiyue (吳啟越) is a deputy general manager and the general consultant of the Issuer, an engineer and a member of the CPC. Mr. Wu previously served as a deputy manager, a manager of the General Department, a manager of the Planning and Development Department, a manager of the Engineering Department, an assistant to the general manager and a manager of the Project Management Department of Liuzhou Dongtong Investment & Development Co., Ltd. (柳州東通投資發展有限公司). Mr. Wu obtained his bachelor’s degree in industrial and civil construction from Guangxi University School of Civil Engineering and Architecture (廣西大學土木建築工程學院).

Mr. Li Jiping (李繼平) is an engineer and a deputy general manager of the Issuer. Mr. Li previously served as an employee of Liuzhou Lianjian Engineering Company (柳州市聯建工程公司), the head of Planning Department of Liuzhou Tongjian Real Estate Development Co., Ltd. (柳州市通建房地產開發有限責任公司), the staff of the General Department, business head, manager of Technical Department and director of General Engineering Office of Liuzhou Dongtong Investment & Development Co., Ltd. (柳州東通投資發展有限公司). He then served as a deputy general manager and the project commander of the railway area, and the deputy general manager of Wenxin Real Estate Development Co., Ltd. (溫馨房地產開發有限責任公司), the director of the Chief Engineering Office and the manager of the Project Management Department of the Issuer and the deputy general manager of Liuzhou Longjian Investment & Development Co., Ltd. (柳州市龍建投資發展有限責任公司). Mr. Li holds a bachelor’s degree in civil engineering from Guangxi Institute of Technology (廣西工學院) and a master’s degree in business administration from the School of Economics and Management in Guangxi Normal University (廣西師範大學經濟管理學院).

− 104 − PRC LAWS AND REGULATION

This section summarises the principal PRC laws and regulations which are relevant to the business and operations of the Group. As this is a summary, it does not contain a detailed analysis of the PRC laws and regulations which are relevant to the business and operations of the Group.

Main Regulatory Authorities and Contents of Supervision

China’s building and construction industry implements a regulatory system with the combination of comprehensive supervision and professional supervision. Government supervision over the building and construction industry mainly includes three aspects: the management on the competency and qualification of market players, the whole process management on the construction projects, and the management on the economic and technical standards of construction projects. The main regulatory authorities include:

• Ministry of Housing and Urban-Rural Development of the People’s Republic of China (“MOHURD”) (formerly Ministry of Construction of the People’s Republic of China, “MOC”) and the competent local departments of MOHURD at various levels are responsible for the comprehensive supervision over the construction industry as well as the real estate development qualifications. Such management mainly includes: management on the competency and qualification of market players, approval and verification of the qualifications of various construction enterprises for access to market, examination and approval of occupational qualifications of individuals in the construction industry, supervision over and management on construction projects, and establishment of industrial standards, etc.

• Ministry of Transport of the People’s Republic of China (“MOT”) and the competent local departments of MOT at various levels are responsible for the construction projects of ports and highways nationwide.

• Ministry of Environmental Protection of the People’s Republic of China (formerly State Environmental Protection Administration, “SEPA”) and the competent local departments of environmental protection at various levels are responsible for the environmental protection management of construction projects.

Major Laws and Regulations

Regulation on Fiscal Debts of Local Governments

In accordance with Guidance on Strengthening Fiscal Financial Management of Government Invested Projects Construction Agency System (財政部關於切實加強政府投資專案代建制財政財務管理有關問題的指導意見) issued by the Ministry of Finance of the PRC on 16 September 2004, the construction agency established (or authorised to be established) by the government can be deemed as a department of the government and can directly prepare the annual investment plan and annual budget for city infrastructure construction. In accordance with Guidance on Further Strengthening Adjustment of Credit Structure to Promote Fast and Smooth Development of National Economy (中國人民銀行、中國行業監督管理委員會關於進一步加強信貸結構調整促進國民經濟平穩較快發展的指導意見) issued jointly by PBOC and CBRC in March 2009, local governments are encouraged to establish financing platforms to issue financing instruments such as enterprise bonds and medium term notes. In order to strengthen the management of financing platforms and effectively prevent fiscal financial risks, Circular 19 and Circular 2881 were promulgated in June 2010 and November 2010, respectively. In accordance with Circular 19, all levels of local governments shall clear up the debts of their respective financing platforms. In accordance with Circular 2881, the level of indebtedness of local governments will impact a financing platform’s issuance of enterprise bonds.

− 105 − On 21 September 2014, Circular 43 was promulgated by the State Council. Circular 43 aims at regulating the financing system of local government and three channels are presented. In accordance with Circular 43, financing platforms shall no longer serve the fiscal financing functions nor incur new government debts. Public interest projects may be funded by the government through issuing government bonds, since the new Budget Law of the PRC, which took effect on 29 December 2018, empowers local governments to issue government bonds, and public interest projects with income generated, such as city infrastructure construction, may be operated independently by social investors or jointly by the government and social investors through the establishment of special purpose companies. Social investors or such special purpose companies shall invest in accordance with market-oriented principles and may be funded by, among other market-oriented approaches, bank loans, enterprise bonds, project revenue bonds and asset-backed securitisation. Social investors or the special purpose companies shall bear the obligation to pay off such debts and the government shall not be liable for any of the social investors’ or special purpose companies’ debts. Circular 43 also sets forth the general principles of dealing with existing debts of financing platforms. Based on the auditing results of such debts run by the local governments, the existing debts that should be repaid by the local governments shall be identified, reported to State Council for approval, and then included in the budget plan of local governments.

On 11 May 2015, Opinion on the Proper Solution of the Follow-up Financing Issues for Projects under Construction of Financing Platform of Local Governments issued jointly by the Ministry of Finance of the PRC, PBOC and the CBRC (財政部人民銀行銀監會關於妥善解決地方政府融資平台公司在建專案後續融資問題的意見)(“Circular 40”) was promulgated by the General Office of the State Council of the PRC. In accordance with Circular 40, local governments at all levels and banking financial institutions shall properly deal with follow-up financing issues for projects under construction of financing platform companies. Projects under construction refer to projects that have started construction upon the completion of examination, approval or filing procedures in accordance with relevant regulations by competent investment authorities before the date when the Circular 43 was promulgated.

Regulation on the Agency Construction

On 16 November 2004, the Ministry of Construction published the “Pilot Measures for the Administration of Construction Projects” (建設工程項目管理試行辦法) (the “Pilot Measures”), which became effective on 1 December 2004. The Pilot Measures provides for stipulations with regard to the carrying out of management activities for construction projects in the PRC. According to the Pilot Measures, project management enterprises shall possess one or more qualifications such as project inspection, design, construction, supervision, cost consultancy, invitation for tender agency, etc. The owner of construction projects can choose project management enterprises by public tender or other methods, and shall sign agency contract with the chosen project management enterprise in writing. Where project inspection enterprises, design enterprises and supervision enterprises, etc., undertake the roles of management as well as project inspection, design and supervision (within its scope of qualification) for the same construction project at the same time, those enterprises shall be chosen through public tender if required by the relevant laws and regulations. Construction enterprises shall not engage in both project management and project construction for the same project.

Qualification of Construction Enterprises

In accordance with the Construction Law of the People’s Republic of China (中華人民共和國建築法) amended by Standing Committee of the National People’s Congress (the “SCNPC”) on 23 April 2019 and became effective on 23 April 2019, Regulations on Qualification Management of Construction Enterprises (建築業企業資質管理規定) promulgated by MOHURD on 22 January 2015 which became effective on 1 March 2015 and last amended on 22 December 2018 which amendment became effective on the same day. Detailed Rules of Regulations on Qualification Management and Implementing Opinions of Qualification Standard of Construction Enterprises (建築業企業資質管理規定和資質標準實施意見) issued by MOHURD on 31 January 2015 and became effective on 1 March 2015 and last amended on 22 December 2018 which amendment became effective on the same day, Criterion for Qualification of Construction Enterprises (建築業企業資質標準) promulgated by MOHURD on 6 November 2014 which became effective on 1 January 2015, and Criterion for Premium Qualification of Construction General Contracting

− 106 − Enterprises (施工總承包企業特級資質標準) issued by MOC on 13 March 2007 and became effective on the same date, Provisions on the Management of Survey and Design Qualification of Construction Projects (建設工程勘察設計資質管理規定) promulgated by MOC on 26 June 2007 which became effective on 1 September 2007 and last amended on 22 December 2018 which amendment became effective on the same day, Detailed Rules of Provisions on the Management of Survey and Design Qualification of Construction Projects (建設工程勘察設計資質管理規定實施意見) issued by MOC on 21 August 2007 and became effective on the same date and amended on 1 August 2013, Provisions on Qualification Management of Project Supervision Enterprises (工程監理企業資質管理規定) promulgated by MOC on 26 June 2007 and became effective on 1 August 2007 and last amended on 22 December 2018 which amendment became effective on the same day, Detailed Rules of Provisions on Qualification Management of Project Supervision Enterprises (工程監理企業資質管理規定實施意見) issued by MOC on 31 July 2007 and became effective on the same date and amended on 16 June 2016, as well as other relevant laws and regulations, enterprises engaging in the business of construction, survey, design and supervision of construction projects may only carry out construction activities within the scope of their qualification grade certificates.

In accordance with the Regulations on Qualification Management of Construction Enterprises, construction enterprises shall apply for their qualifications according to their assets, professionals, projects completed, and technical equipment. Qualifications of construction enterprises include the qualification of general contractor, the qualification of professional contractor and the qualification of construction labour service.

Any enterprise that has obtained the qualification of a general contractor may enter into a contract to undertake general contracting work for the whole project or main works. The enterprise undertaking the general contracting work may carry out the whole construction project by itself or subcontract the work other than the main work or the labour service to other construction enterprises that have requisite qualifications.

Any enterprise that has obtained the qualification of a professional contractor may undertake the professional work subcontracted by the general contractor or the professional work contracted by a construction unit. A professional contracting enterprise may carry out construction by itself or subcontract the labour service work to a labour service enterprise that has the corresponding qualification.

Bidding and Tendering Management

Bidding and tendering of various construction projects have been provided in the Bidding and Tendering Law of the People’s Republic of China (中華人民共和國招標投標法) promulgated by the SCNPC on 30 August 1999 which became effective on 1 January 2000 and amended by SCNPC on 27 December 2017 and becoming effective on 28 December 2017, Regulation on the Implementation of the Bidding and Tendering Law of the People’s Republic of China (中華人民共和國招標投標法實施條例) promulgated by State Council on 20 December 2011 which became effective on 1 February 2012 and amended on 2 March 2019 which amendment became effective on the same day, Measures for the Construction Bidding and Tendering of Construction Projects (工程建設項目施工招標投標辦法) jointly promulgated by NDRC, MOC, MOR, MOT, Ministry of Information Industry of the People’s Republic of China, Ministry of Water Resources of the People’s Republic of China, and Civil Aviation Administration of China in 8 March 2003 which became effective on 1 May 2003, amended on 11 March 2013 which amendment became effective on 1 May 2013, Administrative Measures for the Bidding and Tendering of Design of Construction Projects (建築工程設計招標投標管理辦法) issued by MOHURD on 24 January 2017 and became effective on 1 May 2017, Administrative Measures for the Bidding and Tendering of Housing Construction and Municipal Infrastructure Work (房屋建築和市政基礎設施工程施工招標投標管理辦法) issued by MOC on 1 June 2001 and became effective on the same date and amended on 13 March 2019 and became effective on the same day.

− 107 − In accordance with the Bidding and Tendering Law of the People’s Republic of China, certain types of projects shall go through bidding processes during phases, including project survey, design, construction, supervision and procurement of the essential equipment and materials relating to the project construction. Such projects include projects relating to social public interests and public security, including large infrastructure and utilities; projects invested by using state-owned fund or financed by the government in whole or in part; projects using loans or aid funds of international organisations or foreign government, etc.

The process of bidding and tendering consists of five stages including bid invitation, tendering, bid opening, bid evaluation and bid award. The principle of openness, fairness and equal competition shall be followed in the bidding and tendering for construction project contracting, and the contractor shall be chosen after evaluation. After the contractor is determined, the tenderee shall issue the notification to the successful bidder. The notification is legally binding on both the tenderee and the bid winner.

In accordance with the Bidding and Tendering Law of the People’s Republic of China and Measures for the Construction Bidding and Tendering of Construction Projects, if any project that shall undergo bidding as required by law fails to go through the bidding process, or the items subject to bidding are broken up into pieces or the bidding requirement is otherwise evaded, the relevant administrative supervision department shall order rectification within a specified period, and may impose a fine of 0.5 per cent. up to 1 per cent. of the contract amount of the project. For projects using the state-owned funds in whole or in part, the project approval authority may suspend the implementation of the project or suspend the fund appropriation, and impose punishment on the person direct in charge of the entity or other person directly liable. Further, in accordance with the provisions of the Interpretations of the Supreme People’s Court on Issues of Law Application during the Trial of Construction Contracts for Building Projects (I) (最高人民法院關於審理建設工程施工合同糾紛案件適用法律問題的解釋(一)) issued by the Supreme People’s Court on 29 December 2020 and became effective on 1 January 2021, if any project that is required to undergo a bidding process fails to go through the bidding process or the bid award is invalid, the construction contract for building projects shall become invalid.

Quality Management

Laws and regulations on project quality mainly include Construction Law of the People’s Republic of China, Regulation on Quality Management of Construction Projects (建設工程質量管理條例) amended by the State Council on 23 April 2019 and became effective on the same date, Administrative Measures for Quality Management of Construction Project Survey (建設工程勘察質量管理辦法) amended by MOC on 22 November 2007 and became effective on the same date, Interim Measures for the Administration of Quality Warranty Funds of Construction Projects (建設工程質量保證金管理辦法) issued jointly by MOHURD and MOF on 20 June 2017 and became effective on 1 July 2017, Administrative Measures for Completion Acceptance Record of Building Construction and Municipal Infrastructure Projects (房屋建築和市政基礎設施工程竣工驗收備案管理辦法) amended by MOHURD on 19 October 2009 and became effective on the same date, Measures for Completion (Delivery) Acceptance of Highway Works (公路工程竣(交)工驗收辦法) promulgated by MOT on 31 March 2004 and became effective on 1 October 2004, and its Implement which is promulgated on 1 May 2010.

According to the Regulation on Quality Management of Construction Projects, all the building, surveying, designing, construction and supervision units shall be responsible for the quality of the construction projects. The competent administrative department of construction at or above county level is the competent authority for quality supervision and management of construction projects.

Work Safety Management

Major laws and regulations on work safety during the project contracting process include Work Safety Law of the People’s Republic of China (中華人民共和國安全生產法) promulgated by the SCNPC on 29 June 2002 which became effective on 1 November 2002, and last amended on 10 August July 2021 which amendment will become effective on 1 September 2021, Regulation on Work Safety Management of Construction Projects (建設工程安全生產管理例) promulgated by State Council on 24 November 2003

− 108 − which became effective on 1 February 2004, Regulation on Work Safety Licences (安全生產許可證例) by State Council on 13 January 2004 and became effective on the same date, and amended on 29 July 2014 which amendment became effective on the same date. Provisions on Fine Penalties for Work Safety Accidents (for Trial Implementation) (生產安全事故罰款處罰規定(試行)) promulgated by State Administration of Work Safety (dissolved) on 2 April 2015 which became effective on 1 May 2015, and Administrative Provisions on Work Safety Licences of Construction Enterprises (建築施工企業安全生產授權管理規定) issued by MOC on 5 July 2004 and became effective on the same date and amended on 22 January 2015.

In accordance with the Work Safety Law of the People’s Republic of China, Regulation on Work Safety Licences and other related regulations, the state implements the work safety license system to construction enterprises. Any enterprise failing to obtain the work safety license shall not carry out production activity. In accordance with the Regulation on Work Safety Management of Construction Projects, all the building, surveying, designing, construction and supervision units shall be responsible for the work safety of construction projects. For general contracting projects, the general contractor shall assume full responsibility for the work safety of the construction site, and the subcontractor shall be jointly liable for the work safety of the subcontracted portions of work.

Environmental Protection Management

Major laws and regulations on environmental protection during the project construction process include the Environmental Protection Law of the People’s Republic of China (中華人民共和國環境保護法) amended by SCNPC on 24 April 2014 which became effective on 1 January 2015, Law on Environmental Impact Assessment of the People’s Republic of China (中華人民共和國環境影響評價法) promulgated by SCNPC on 28 October 2002 which became effective on 1 September 2003 and last amended on 29 December 2018 which amendment became effective on the same date, Administrative Regulations on Environmental Protection of Construction Projects (建設項目環境保護管理條例) issued by State Council on 29 November 1998 which became effective on the same date and amended on 16 July 2017 which amendment became effective on 1 October 2017.

In accordance with the provisions of the Administrative Regulations on Environmental Protection of Construction Projects, the PRC government implements the system of environmental impact assessment on construction projects. After the completion of a construction project, the competent administrative department of environmental protection will undergo an environmental protection acceptance process and assess whether the construction project has met the requirements for environmental protection.

Qualification of a Real Estate Developer

Under the Provisions on Administration of Qualifications of Real Estate Developers (房地產開發企業資質管理規定) promulgated by MOC on 29 March 2000 and amended by MOHURD on 22 December 2018 which amendment became effective on the same date, a real estate developer must apply for a qualification classification certificate. An enterprise may not engage in the development and operation of properties without a qualification classification certificate for real estate development. MOC is in charge of monitoring the qualifications of all real estate developers within the PRC, and local real estate development authorities at or above the county level are in charge of monitoring the qualifications of local real estate developers.

Engaging in real estate development and operation by a developer without obtaining the required provisional or formal qualification certificate, or by overstepping its qualification class, may result in a fine ranging from RMB50,000 to RMB100,000. If the developer fails to rectify within the specified time limit, the authorities shall revoke the qualification certificate, and submit the matters to administrative authorities for industry and commerce for the revocation of the business license. Pursuant to the Provisions on Administration of Qualifications, the qualification of a real estate developer should be annually inspected.

− 109 − Labour

Employment Contracts

The Labour Contract Law (勞動合同法), promulgated by the SCNPC on 29 June 2007, which became effective on 1 January 2008 and was amended on 28 December 2012 and became effective on 1 July 2013, governs the relationship between employers and employees and provides for specific provisions in relation to the terms and conditions of an employee contract. The Labour Contract Law stipulates that employee contracts shall be in writing and signed. It imposes more stringent requirements on employers in relation to entering into fixed-term employment contracts, hiring of temporary employees and dismissal of employees. Pursuant to the Labour Contract Law, employment contracts lawfully concluded prior to the implementation of the Labour Contract Law and continuing as at the date of its implementation shall continue to be performed. Where an employment relationship was established prior to the implementation of the Labour Contract Law, but no written employment contract was concluded, a contract shall be concluded within one month after its implementation.

Employee Funds

Under applicable PRC laws, regulations and rules, including the Social Insurance Law (社會保險法), promulgated by the SCNPC on 28 October 2010, which became effective on 1 July 2011 and amended on 29 December 2018 which amendment became effective on the same date, the Interim Regulations on the Collection and Payment of Social Insurance Premiums (社會保險費徵繳暫行條例), promulgated by the State Council on 22 January 1999, which became effective on 22 January 1999 and amended on 24 March 2019 which amendment became effective on the same date,, and Administrative Regulations on the Housing Provident Fund (住房公積金管理條例), promulgated by the State Council on 3 April 1999, which became effective on 3 April 1999 and as amended on 24 March 2019, employers are required to contribute, on behalf of their employees, to a number of social security funds, including funds for basic pension insurance, unemployment insurance, basic medical insurance, occupational injury insurance, maternity leave insurance, and to housing provident funds. These payments are made to local administrative authorities and any employer who fails to contribute may be fined and ordered to pay the outstanding amount within a stipulated time period.

Regulations Regarding Overseas Investment, Financing and Acquisition Activities

NDRC Supervision

On 14 September 2015, the NDRC issued the Circular on Promoting the Administrative Reform of the Filing and Registration System for the Issuance of Foreign Debts by Enterprises (Fa Gai Wai Zi [2015] No. 2044) (國家發展改革委關於推進企業發行外債備案登記制管理改革的通知) (the “NDRC Circular”), which became effective on the same day. In order to encourage the use of low-cost capital in the international capital markets in promoting investment and steady growth and to facilitate cross-border financing, the NDRC Circular abolishes the case-by-case quota review and approval system for the issuance of foreign debts by PRC enterprises and sets forth the following measures to promote the administrative reform of the issuance of foreign debts by PRC enterprises or overseas enterprises and branches controlled by PRC enterprises:

• steadily promote the administrative reform of the filing and registration system for the issuance of foreign debts by enterprises;

• increase the size of foreign debts issued by enterprises, and support the transformation and upgrading of key sectors and industries;

• simplify the filing and registration of the issuance of foreign debts by enterprises; and

• strengthen the supervision during and after the process to prevent risks.

−110− For the purposes of the NDRC Circular, “foreign debts” means RMB-denominated or foreign currency- denominated debt instruments with a maturity of one year or above which are issued offshore by PRC enterprises and their controlled offshore enterprises or branches and for which the principal and interest are repaid as agreed, including offshore bonds and long-term and medium-term international commercial loans, etc. According to this definition, offshore bonds issued by both PRC enterprises and their controlled offshore enterprises or branches shall be regulated by the NDRC Circular.

Pursuant to the NDRC Circular, an enterprise shall apply to the NDRC for the filing and registration procedures prior to the issuance of the bonds. The materials to be submitted by an enterprise shall include an application report and an issuance plan, setting out details such as the currency, size, interest rate, term, use of proceeds and remittance details. The NDRC shall decide whether to accept an application within 5 working days of receipt and shall issue a Certificate for Filing and Registration of the Issuance of Foreign Debts by Enterprises within 7 working days of accepting the application.

To issue foreign debts, an enterprise shall meet the following basic conditions:

• have a good credit history with no default in its issued bonds or other debts;

• have sound corporate governance and risk prevention and control mechanisms for foreign debts; and

• have a good credit standing and relatively strong capability to repay its debts.

According to Measures for the Administration of Overseas Investment of Enterprises (企業境外投資管理辦法) effective from 1 March 2018, the procedure of approval and filing shall be respectively applied to different overseas investment projects. Sensitive projects conducted by investors directly or through overseas enterprises controlled by them shall be subject to confirmation management. The confirmation authority is the NDRC. Non-sensitive projects directly conducted by investors, namely, non-sensitive projects involving investors’ direct contribution of assets or rights and interests or provision of financing or security, shall be subject to recordation management. Among the projects subject to recordation management, if the investor is an enterprise managed by the Central Government (including financial enterprises managed by the Central Government and enterprises directly managed by the State Council or the agencies of the State Council), the recordation authority is the NDRC; if the investor is a local enterprise, and the amount of Chinese investment is not less than U.S.$300 million, the recordation authority is the NDRC; and if the investor is a local enterprise, and the amount of Chinese investment is less than U.S.$300 million, the recordation authority is the development and reform department of the provincial government at the place of registration of the investor. Investment projects to be carried out in Hong Kong and/or Macau shall be governed by the Measures for the Administration of Overseas Investment by Enterprises.

MOFCOM Supervision

MOFCOM issued the new version of the Overseas Investment Administration Rules (境外投資管理辦法) on 6 September 2014, effective from 6 October 2014 (the “New Overseas Investment Rules”). Under the New Overseas Investment Rules, a domestic enterprise intending to carry out any overseas investment shall report to the competent department of commerce for verification or filing and the competent department of commerce shall, with regard to an enterprise so verified or filed, issue thereto an Enterprise Overseas Investment Certificate (企業境外投資證書). If two or more enterprises make a joint investment to establish an overseas enterprise, the larger (or largest) shareholder shall be responsible for the verification or filing procedure after obtaining written consent of other investing parties.

An enterprise that intends to invest in a sensitive country or region or a sensitive industry shall apply for the verification by MOFCOM. “Sensitive countries and regions” mean those countries without a diplomatic relationship with the PRC, or subject to the UNSC sanctions or otherwise under the list of verified countries and regions published by MOFCOM from time to time. “Sensitive industries” mean those industries involving the products and technologies which are restricted from being exported, or affecting the interests of more than one country (or region). In accordance with the New Overseas

− 111 − Investment Rules, a central enterprise shall apply to MOFCOM for verification and MOFCOM shall, within 20 working days after accepting such application, decide whether or not the verification is granted. For a local enterprise, it shall apply through the provincial department of commerce to MOFCOM for such verification. The provincial department of commerce shall give a preliminary opinion within 15 working days after accepting such local enterprise’s application and submit all application documents to MOFCOM, while MOFCOM shall decide whether or not the verification is granted within 15 working days of receipt of such preliminary opinion from the provincial department of commerce. Upon verification, the Enterprise Overseas Investment Certificate shall be issued to the investing enterprise by MOFCOM.

Other than those overseas investments subject to MOFCOM verification as described above, all other overseas investments are subject to a filing procedure. The investing enterprise shall complete the filing form through the Overseas Investment Management System, an online system maintained by MOFCOM and print out a copy of such filing form for stamping with the company chop, and then submit such stamped filing form together with a copy of its business licence, for filing at MOFCOM (for a central enterprise (中央企業)) or the provincial department of commerce (for a local enterprise) respectively.

MOFCOM or the provincial department of commerce shall accept the filing and issue the Enterprise Overseas Investment Certificate within three working days of receipt of such filing form.

The investing enterprise must carry out the investment within two years of the date of the relevant Enterprise Overseas Investment Certificate, otherwise such certificate will automatically become invalid and a new filing or verification application has to be made by the investing enterprise. In addition, if any item specified in such certificate is changed, the investing enterprise shall make the change of registration at MOFCOM or the provincial department of commerce (as the case may be).

If an overseas invested company carries out a re-investment activity offshore, the investing enterprise shall report such re-investment activity to MOFCOM or the provincial department of commerce (as the case may be) after the legal process of the investment is completed offshore. The investing enterprise shall complete and print out a copy of the Overseas Chinese-invested Enterprise Re-investment Report Form (境外中資企業再投資報告表) from the Overseas Investment Management System and stamp and submit such form to MOFCOM or the provincial department of commerce.

Foreign Exchange Administration

SAFE issued the Administrative Measures for Foreign Debt Registration (外債登記管理辦法) on 28 April 2013, which came into effect on 13 May 2013 and its operating guidelines and other applicable rules issued by SAFE or from time to time(the “Foreign Debt Registration Measures”). According to the Foreign Debt Registration Measures, the debtor shall submit foreign debt registration when borrowing foreign debts in accordance with laws and regulations. For the domestic debtors besides financial institutions and banks (“Non-Bank Debtors”), they shall submit filing or registration procedures of foreign debts with the local counterparts of SAFE. According to the Operation Guidelines for Administration of Foreign Debt Registration (外債登記管理操作指引) promulgated together with Foreign Debt Registration Measures and the operational guidelines, if a domestic issuer issues bonds offshore, it shall register with the local branch of SAFE within fifteen working days after the closing date of such issuance.

According to Notice of the State Administration of Foreign Exchange on Further Simplifying and Improving the Foreign Exchange Management Policies for Direct Investment (國家外匯管理局關於進一步簡化和改進直接投資外匯管理政策的通知) effective from 1 June 2015 and amended on 30 December 2019, the banks will review and carry out foreign exchange registration under overseas direct investment directly, and the SAFE and its branches shall implement indirect supervision over foreign exchange registration of direct investment via the banks. The domestic institution may select the banks in the places where they are registered for carrying out foreign exchange registration before proceeding with such operations as opening of the direct investment related account and fund remittance/settlement (including outbound remittance or inbound remittance of profits and dividends).

−112− EXCHANGE RATE INFORMATION

The People’s Bank of China sets and publishes daily a base exchange rate with reference primarily to the supply and demand of Renminbi with reference to a basket of currencies in the market during the prior day. On 21 July 2005, the PRC government introduced a managed floating exchange rate system to allow the value of the Renminbi to fluctuate within a regulated band based on market supply and demand and by reference to a basket of currencies. The PRC government has since made and in the future may make further adjustments to the exchange rate system. On 18 May 2007, the PBOC enlarged, effective on 21 May 2007, the floating band for the trading prices in the interbank foreign exchange spot market of Renminbi against the U.S. dollar from 0.3 per cent. to 0.5 per cent. around the central parity rate. This allows the Renminbi to fluctuate against the U.S. dollar by up to 0.5 per cent. above or below the central parity rate published by the PBOC. On 20 June 2010, the PBOC announced that it intended to further reform the Renminbi exchange rate regime by allowing greater flexibility in the Renminbi exchange rate and on 16 April 2012, the band was expanded to 1.0 per cent. The band was further expanded to 2.0 per cent. on 14 March 2014. On 11 August 2015, the PBOC announced to improve the central parity quotations of Renminbi against the U.S. dollar by authorising market-makers to provide central parity quotations to the China Foreign Exchange Trading Centre (the “CFETS”) daily before the opening of the interbank foreign exchange market with reference to the interbank foreign exchange market closing rate of the previous day, the supply and demand for foreign exchange as well as changes in major international currency exchange rates. Following the announcement by the PBOC on 11 August 2015, Renminbi depreciated significantly against the U.S. dollar. On 11 December 2015, CFETS, a sub-institutional organisation of the PBOC, published the CFETS Renminbi exchange rate index for the first time which weighs the Renminbi based on 13 currencies, to guide the market in order to measure the Renminbi exchange rate from a new perspective. In January and February 2016, Renminbi experienced further fluctuations in value against the U.S. dollar. From 1 January 2017, according to the sampling rule of “CNY versus FX currency pair listed on CFETS”, CFETS will add 11 currencies newly listed on CFETS in 2016 and the number of basket currencies will increase from 13 to 24. Following the gradual appreciation against U.S. dollar in 2017, Renminbi experienced a recent depreciation in value against U.S. dollar followed by a fluctuation in 2018 and early 2019. On 5 August 2019, the PBOC set the Renminbi’s daily reference rate above RMB7 per U.S. dollar for the first time in over a decade amidst an uncertain trade and global economic climate. The PRC government may adopt further reforms of its exchange rate system, including making the Renminbi freely convertible in the future.

The following table sets forth the exchange rate of the Renminbi against the U.S. dollar for the periods presented. Noon Buying Rate(1) Period End Average(2) High Low (RMB per U.S.$1.00)

2015 ...... 6.4778 6.2869 6.4896 6.1870 2016 ...... 6.9430 6.6549 6.9580 6.4480 2017 ...... 6.5063 6.7350 6.9575 6.4773 2018 ...... 6.8755 6.6292 6.9737 6.2649 2019 ...... 6.9618 6.9014 7.1786 6.6822 2020 ...... 6.5250 6.8874 7.1681 6.5208 2021 January...... 6.4282 6.4672 6.4822 6.4282 February ...... 6.4730 6.4601 6.4869 6.4344 March...... 6.5518 6.5108 6.5716 6.4648 April ...... 6.4749 6.5186 6.5649 6.4710 May...... 6.3674 6.4321 6.4749 6.3674 June ...... 6.4566 6.4250 6.4811 6.3796 July ...... 6.4609 6.4763 6.5104 6.4562

Notes:

1. Exchange rates between Renminbi and U.S. dollar represent the noon buying rates as set forth in the H.10 statistical release of the Federal Reserve Board.

2. Annual averages have been calculated from month-end rate. Monthly averages have been calculated using the average of the daily rates during the relevant period.

−113− TAXATION

The following summary of certain tax consequences of the purchase, ownership and disposition of the Bonds is based upon applicable laws, regulations, rulings and decisions in effect as at the date of this Offering Circular, all of which are subject to change (possibly with retroactive effect). This discussion does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase, own or dispose of the Bonds and does not purport to deal with consequences applicable to all categories of investors, some of which may be subject to special rules. Neither these statements nor any other statements in this Offering Circular are to be regarded as advice on the tax position of any Bondholder or any persons acquiring, selling or otherwise dealing in the Bonds or on any tax implications arising from the acquisition, sale or other dealings in respect of the Bonds. Persons considering the purchase of the Bonds should consult their own tax advisors concerning the possible tax consequences of buying, holding or selling any Bonds under the laws of their country of citizenship, residence or domicile.

Hong Kong

Withholding Tax

No withholding tax is payable in Hong Kong in respect of payments of principal or interest on the Bonds or in respect of any capital gains arising from the sale of the Bonds.

Profits Tax

Hong Kong profits tax is chargeable on every person carrying on a trade, profession or business in Hong Kong in respect of profits arising in or derived from Hong Kong from such trade, profession or business (excluding profits arising from the sale of capital assets).

Interest on the Bonds may be deemed to be profits arising in or derived from Hong Kong from a trade, profession or business carried on in Hong Kong in the following circumstances:

(i) interest on the Bonds is derived from Hong Kong and is received by or accrues to a corporation carrying on a trade, profession or business in Hong Kong;

(ii) interest on the Bonds is derived from Hong Kong and is received by or accrues to a person, other than a corporation, carrying on a trade, profession or business in Hong Kong and is in respect of the funds of that trade, profession or business;

(iii) interest on the Bonds is received by or accrues to a financial institution (as defined in the Inland Revenue Ordinance (Cap. 112) of Hong Kong (the “IRO”)) and arises through or from the carrying on by the financial institution of its business in Hong Kong; or

(iv) interest on the Bonds is received by or accrues to a corporation, other than a financial institution, and arises through or from the carrying on in Hong Kong by the corporation of its intra-group financing business (within the meaning of section 16(3) of the IRO).

Sums received by or accrued to a financial institution by way of gains or profits arising through or from the carrying on by the financial institution of its business in Hong Kong from the sale, disposal and redemption of Bonds will be subject to Hong Kong profits tax. Sums received by or accrued to a corporation, other than a financial institution, by way of gains or profits arising through or from the carrying on in Hong Kong by the corporation of its intra-group financing business (within the meaning of section 16(3) of the IRO) from the sale, disposal or other redemption of Bonds will be subject to Hong Kong profits tax.

−114− Sums derived from the sale, disposal or redemption of Bonds will be subject to Hong Kong profits tax where received by or accrued to a person, other than a financial institution, who carries on a trade, profession or business in Hong Kong and the sum has a Hong Kong source unless otherwise exempted. The source of such sums will generally be determined by having regard to the manner in which the Bonds are acquired and disposed of.

In certain circumstances, Hong Kong profits tax exemptions (such as concessionary tax rates) may be available. Investors are advised to consult their own tax advisors to ascertain the applicability of any exemptions to their individual position.

Stamp Duty

No Hong Kong stamp duty will be chargeable upon the issue or transfer of a Bond.

PRC

The following summary accurately describes the principal PRC tax consequences of ownership of the Bonds by beneficial owners who, or which, are not residents of mainland China for PRC tax purposes. These beneficial owners are referred to as non-PRC Bondholders in this “Taxation – PRC” section. In considering whether to invest in the Bonds, investors should consult their individual tax advisors with regard to the application of PRC tax laws to their particular situations as well as any tax consequences arising under the laws of any other tax jurisdiction. Reference is made to PRC taxes from the taxable year beginning on or after 1 January 2008.

EIT and IIT

Pursuant to the EIT Law, the IIT Law and the implementation regulations in relation to both the EIT Law and the IIT Law, PRC income tax at a rate of 10 per cent. or 20 per cent. is normally applicable to PRC-source income derived by non-resident enterprises or individuals, respectively, subject to adjustment by applicable treaty. As the Issuer is a PRC resident enterprise for tax purposes, interest paid to non-resident Bondholders may be regarded as PRC-sourced, and therefore be subject to PRC income tax at a rate of 10 per cent. for non-resident enterprise Bondholders and at a rate of 20 per cent. for non-resident individual Bondholders (or a lower treaty rate, if any).

Such income tax shall be withheld by the Issuer that is acting as the obligatory withholder and such PRC enterprise shall withhold the tax amount from each payment or payment due. To the extent that the PRC has entered into arrangements relating to the avoidance of double taxation with any jurisdiction, such as Hong Kong, that allow a lower rate of withholding tax, such lower rate may apply to qualified non-PRC resident enterprise Bondholders.

Under the EIT Law and its implementation rules, any gains realised on the transfer of the Bonds by holders who are deemed under the EIT Law as non-resident enterprises may be subject to PRC enterprise income tax if such gains are regarded as income derived from sources within the PRC. Under the EIT Law, a “non-resident enterprise” means an enterprise established under the laws of a jurisdiction other than the PRC and whose actual administrative organisation is not in the PRC, which has established offices or premises in the PRC, or which has not established any offices or premises in the PRC but has obtained income derived from sources within the PRC. There remains uncertainty as to whether the gains realised on the transfer of the Bonds by enterprise holders would be treated as incomes derived from sources within the PRC and be subject to PRC enterprise income tax. In addition, under the IIT Law, any individual who has no domicile and does not live within the territory of the PRC or who has no domicile but has lived within the territory of China for less than 183 days cumulatively within a tax year shall pay individual income tax for any income obtained within the PRC. There is uncertainty as to whether gains realised on the transfer of the Bonds by individual holders who are not PRC citizens or residents will be subject to PRC individual income tax. If such gains are subject to PRC income tax, the 10 per cent. enterprise income tax rate and 20 per cent. individual income tax rate will apply respectively unless there is an applicable tax treaty or arrangement that reduces or exempts such income tax. The taxable income will be the balance

−115− of the total income obtained from the transfer of the Bonds minus all costs and expenses that are permitted under PRC tax laws to be deducted from the income. According to the Arrangement, Bondholders who are Hong Kong residents, including both enterprise holders and individual holders, will be exempted from PRC income tax on capital gains derived from a sale or exchange of the Bonds if such capital gains are not connected with an office or establishment that the Bondholders have in the PRC and all the other relevant conditions are satisfied.

VAT

On 23 March 2016, the MOF and the State Administration of Taxation (the “SAT”) issued the Circular of Full Implementation of Business Tax to VAT Reform (關於全面推開營業稅改徵增值稅試點的通知, Caishui [2016] No. 36, “Circular 36”), which confirms that business tax will be completely replaced by VAT from 1 May 2016. Since then, the income derived from the provision of financial services which attracted business tax will be entirely replaced by and be subject to VAT.

According to Circular 36, entities and individuals providing services within the PRC are subject to VAT. The services potentially subject to VAT include the provision of financial services such as the provision of loans. Although the issuance of the Bonds is likely to be treated as financial services for VAT purposes, Circular 36 stipulates that services are treated as being provided within the PRC where either the service provider or the service recipient is located in the PRC. In connection with the issue of the Bonds, none of the Issuer and/or the Bondholders is located in the PRC.

However, Circular 36 and laws and regulations pertaining to VAT are relatively new, the interpretation and enforcement of such laws and regulations involve uncertainties, and the above statement may be subject to further change upon the issuance of further clarification rules and/or different interpretation by the competent tax authority. There is uncertainty as to the application of Circular 36.

Stamp Duty

No PRC stamp duty will be imposed on non-PRC Bondholders either upon issuance of the Bonds or upon a subsequent transfer of Bonds to the extent that the register of holders of the Bonds is maintained outside the PRC and the issuance and the sale of the Bonds is made outside of the PRC.

FATCA

Pursuant to certain provisions of the U.S. Internal Revenue Code of 1986, commonly known as FATCA, a “foreign financial institution” may be required to withhold on certain payments it makes (“foreign passthru payments”) to persons that fail to meet certain certification, reporting, or related requirements. The Issuer may be a foreign financial institution for these purposes. A number of jurisdictions (including Hong Kong and the PRC) have entered into, or have agreed in substance to, intergovernmental agreements with the United States to implement FATCA (“IGAs”), which modify the way in which FATCA applies in their jurisdictions. Certain aspects of the application of the FATCA provisions and IGAs to instruments such as the Bonds, including whether withholding would ever be required pursuant to FATCA or an IGA with respect to payments on instruments such as the Bonds, are uncertain and may be subject to change.

Even if withholding would be required pursuant to FATCA or an IGA with respect to payments on instruments such as the Bonds, such withholding would not apply prior to the date that is two years after the publication of the final regulations defining “foreign passthru payment”. Holders should consult their own tax advisors regarding how these rules may apply to their investment in the Bonds. In the event any withholding would be required pursuant to FATCA or an IGA with respect to payments on the Bonds, no person will be required to pay additional amounts as a result of the withholding.

−116− SUMMARY OF PROVISIONS RELATING TO THE BONDS IN GLOBAL FORM

The Global Certificate contains provisions which apply to the Bonds in respect of which the Global Certificate is issued, some of which modify the effect of the Terms and Conditions of the Bonds set out in this Offering Circular. Terms defined in the Terms and Conditions of the Bonds have the same meaning in the paragraphs below. The following is a summary of those provisions:

The Bonds will be represented by the Global Certificate in registered form, which will be registered in the name of a nominee of, and deposited with, a common depositary for Euroclear and Clearstream.

Under the Global Certificate, the Issuer, for value received, promises to pay such principal and interest on the Bonds to the holder of the Bonds on such date or dates as the same may become payable in accordance with the Terms and Conditions of the Bonds, save that the calculation is made in respect of the total aggregate amount of the Bonds represented by the Global Certificate. So long as the Bonds are represented by a Global Certificate and the relevant Global Certificate is held on behalf of a clearing system, the Issuer has promised, inter alia, to pay interest in respect of such Bonds from the Issue Date in arrear at the rates, on the dates for payment, and in accordance with the method of calculation provided for in the Terms and Conditions, save that the calculation is made in respect of the total aggregate amount of the Bonds represented by such Global Certificate.

Owners of interests in the Bonds in respect of which the Global Certificate is issued will be entitled to have title to the Bonds registered in their names and to receive individual definitive Certificates if either Euroclear or Clearstream or any other clearing system (an “Alternative Clearing System”) is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so. In such circumstances, the Issuer will cause sufficient individual definitive Certificates to be executed and delivered to the Registrar for completion, authentication and despatch to the relevant holders of the Bonds. A person with an interest in the Bonds in respect of which the Global Certificate is issued must provide the Registrar not less than 30 days’ notice at its specified office of such holder’s intention to effect such exchange and a written order containing instructions and such other information as the Issuer and the Registrar may require to complete, execute and deliver such individual definitive Certificates.

Payment

So long as the Bonds are represented by the Global Certificate, each payment in respect of the Global Certificate will be made to, or to the order of, the person whose name is entered on the Register at the close of business on the Clearing System Business Day immediately prior to the due date for such payments, where “Clearing System Business Day” means a weekday (Monday to Friday inclusive) except 25 December and 1 January.

Trustee’s Powers

In considering the interests of the Bondholders whilst the Global Certificate is registered in the name of a nominee for a clearing system, the Trustee may, to the extent it considers it appropriate to do so in the circumstances, but without being obliged to do so, (a) have regard to any information as may have been made available to it by or on behalf of the relevant clearing system or its operator as to the identity of its accountholders (either individually or by way of category) with entitlements in respect of the Bonds and (b) may consider such interests on the basis that such account holders were the holder of the Bonds in respect of which such Global Certificate is issued.

−117− Notices

So long as the Bonds are represented by the Global Certificate and the Global Certificate is held on behalf of Euroclear or Clearstream or any Alternative Clearing System, notices to holders of the Bonds shall be validly given by delivery of the relevant notice to Euroclear or Clearstream or such Alternative Clearing System, for communication by it to accountholders entitled to an interest in the Bonds in substitution for notification as required by the Terms and Conditions of the Bonds and shall be deemed to have been given at the time of delivery to the relevant clearing systems.

Issuer’s Redemption

The Issuer’s redemption option in Condition 7(b) shall be exercised by the Issuer giving notice to the Bondholders within the time limits set out in and containing the information required by the Terms and Conditions.

Bondholder’s Redemption

The Bondholder’s redemption option in Condition 7(c) may be exercised by the holder of the Global Certificate giving notice to the Principal Paying Agent of the principal amount of Bonds in respect of which the option is exercised within the time limits specified in the Terms and Conditions.

Transfers

Transfers of beneficial interests in the Bonds represented by the Global Certificate will be effected through the records of Euroclear and Clearstream (or any Alternative Clearing System) and their respective participants in accordance with the rules and procedures of Euroclear and Clearstream (or any Alternative Clearing System) and their respective direct and indirect participants.

Cancellation

Cancellation of any Bond by the Issuer following its redemption or purchase by the Issuer and any of its Subsidiaries subsidiaries will be effected by reduction in the principal amount of the Bonds in the register of the Bondholders whereon the Registrar shall procure the making of an appropriate entry on the Schedule to the Global Certificate.

Meetings

For the purposes of any meeting of Bondholders, the holder of the Bonds represented by the Global Certificate shall be treated as two persons for the purposes of any quorum requirements of a meeting of Bondholders and as being entitled to one vote in respect of each U.S.$1,000 in principal amount of the Bonds.

The Global Certificate and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English Law.

The Global Certificate shall not become valid for any purpose until authenticated by or on behalf of the Registrar.

−118− SUBSCRIPTION AND SALE

The Issuer has entered into a subscription agreement with the Joint Lead Managers dated 23 August 2021 (the “Subscription Agreement”), pursuant to which and subject to certain conditions contained therein, the Issuer has agreed to sell to the Joint Lead Managers, and the Joint Lead Managers have agreed to, severally but not jointly, subscribe and pay for, or to procure subscribers to subscribe and pay for, the aggregate principal amount of the Bonds indicated in the following table.

Principal amount of the Bonds to be subscribed U.S.$

Guotai Junan Securities (Hong Kong) Limited ...... 50,000,000 Hua Xia Bank Co., Limited Hong Kong Branch ...... 0 Zhongtai International Securities Limited ...... 0 BG Securities (HK) Co., Limited...... 0

Total ...... 50,000,000

The Subscription Agreement provides that the Joint Lead Managers and their respective affiliates, and their respective directors, officers and employees will be indemnified against certain liabilities in connection with the offer and sale of the Bonds. The Subscription Agreement provides that the obligations of the Joint Lead Managers are subject to certain conditions precedent, and entitles the Joint Lead Managers to terminate it in certain circumstances prior to payment being made to the Issuer.

In connection with the issue of the Bonds, any of the Joint Lead Managers appointed and acting in its capacity as a Stabilisation Manager or any person acting on behalf of the Stabilisation Manager may, to the extent permitted by applicable laws and directives, over-allot the Bonds or effect transactions with a view to supporting the market price of the Bonds at a level higher than that which might otherwise prevail, but in so doing, the Stabilisation Manager or any person acting on behalf of the Stabilisation Manager shall act as principal and not as the Issuer’s agent. However, there is no assurance that the Stabilisation Manager or any person acting on behalf of the Stabilisation Manager will undertake stabilisation action. Any stabilisation action may begin on or after the date on which adequate public disclosure of the terms of the Bonds is made and, if begun, may be ended at any time, but must end after a limited period. Any loss or profit sustained as a consequence of any such over-allotment or stabilisation shall be for the account of the Stabilisation Manager.

In connection with the offering of the Bonds, the Joint Lead Managers and/or their respective affiliate(s) may act as an investor for its own account and may take up Bonds in the offering and in that capacity may retain, purchase or sell for its own account such securities and any securities of the Issuer and may offer or sell such securities or other investments otherwise than in connection with the offering of the Bonds. Accordingly, references herein to the Bonds being “offered” should be read as including any offering of the Bonds to the Joint Lead Managers and/or their respective affiliates acting in such capacity. Such persons do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any applicable legal or regulatory requirements. The Joint Lead Managers or their respective affiliates may purchase the Bonds for its own account or for the accounts of their customers and enter into transactions, including credit derivative, such as asset swaps, repackaging and credit default swaps relating to the Bonds and/or other securities of the Issuer at the same time as the offer and sale of the Bonds or in secondary market transactions. Such transactions would be carried out as bilateral trades with selected counterparties and separately from any existing sale or resale of the Bonds to which this Offering Circular relates (notwithstanding that such selected counterparties may also be purchasers of the Bonds). Should any of the foregoing transactions occur the trading price and liquidity of the Bonds may be impacted.

−119− Furthermore, it is possible that a significant proportion of the Bonds may be initially allocated to, and subsequently held by, a limited number of investors. If this is the case, the trading price and liquidity of trading in the Bonds may be constrained. The Issuer and the Joint Lead Managers are under no obligation to disclose the extent of the distribution of the Bonds amongst individual investors, otherwise than in accordance with any applicable legal or regulatory requirements.

In the ordinary course of their various business activities, the Joint Lead Managers and their respective affiliates make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the Issuer, including the Bonds and could adversely affect the trading price and liquidity of the Bonds. The Joint Lead Managers and their affiliates may make investment recommendations and/or publish or express independent research views (positive or negative) in respect of the Bonds or other financial instruments of the Issuer, and may recommend to their clients that they acquire long and/or short positions in the Bonds or other financial instruments of the Issuer.

General

The distribution of this Offering Circular or any offering material and the offering, sale or delivery of the Bonds is restricted by law in certain jurisdictions. Therefore, persons who may come into possession of this Offering Circular or any offering material are advised to consult their own legal advisers as to what restrictions may be applicable to them and to observe such restrictions. This Offering Circular may not be used for the purpose of an offer or invitation in any circumstances in which such offer or invitation is not authorised.

No action has been or will be taken in any jurisdiction by the Issuer or the Joint Lead Managers that would permit a public offering, or any other offering under circumstances not permitted by applicable law, of the Bonds, or possession or distribution of this Offering Circular, any amendment or supplement thereto issued in connection with the proposed resale of the Bonds or any other offering or publicity material relating to the Bonds, in any country or jurisdiction where action for that purpose is required. Accordingly, the Bonds may not be offered or sold, directly or indirectly, and neither this Offering Circular nor any other offering material or advertisements in connection with the Bonds may be distributed or published, by the Issuer or the Joint Lead Managers, in or from any country or jurisdiction, except in circumstances which will result in compliance with all applicable rules and regulations of any such country or jurisdiction and will not impose any obligations on the Issuer or the Joint Lead Managers. If a jurisdiction requires that an offering of Bonds be made by a licensed broker or dealer and the Joint Lead Managers or any affiliate of the Joint Lead Managers is a licensed broker or dealer in that jurisdiction, such offering shall be deemed to be made by the Joint Lead Managers or such affiliate on behalf of the Issuer in such jurisdiction.

United States

The Bonds have not been and will not be registered under the Securities Act and, subject to certain exceptions, may not be offered or sold within the United States.

The Bonds are being offered and sold outside the United States in reliance on Regulation S.

In addition, until 40 days after the commencement of the offering of the Bonds, an offer or sale of Bonds within the United States by any dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act.

− 120 − United Kingdom

Each of the Joint Lead Managers has represented, warranted and agreed that:

(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the “FSMA”)) received by it in connection with the issue or sale of the Bonds in circumstances in which Section 21(1) of the FSMA does not apply to us; and

(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Bonds in, from or otherwise involving the United Kingdom.

Hong Kong

Each of the Joint Lead Managers has represented, warranted and undertaken that:

(i) it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, any Bonds other than (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong (the “SFO”) and any rules made under the SFO; or (b) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong (the “C(WUMP)O”) or which do not constitute an offer to the public within the meaning of the C(WUMP)O; and

(ii) it has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Bonds, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the Bonds which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the SFO and any rules made under the SFO.

PRC

Each of the Joint Lead Managers has represented, warranted and undertaken that the Bonds are not being offered or sold and may not be offered or sold, directly or indirectly, in the PRC (for such purposes, not including Hong Kong and the Macau Special Administrative Region or Taiwan), except as permitted by applicable laws of the PRC. This Offering Circular does not constitute an offer to sell or the solicitation of an offer to buy any securities in the PRC to any person to whom it is unlawful or make the offer or solicitation in the PRC.

Singapore

Each of the Joint Lead Managers has acknowledged that this Offering Circular has not been and will not be registered as a prospectus with the Monetary Authority of Singapore. Accordingly, each of the Joint Lead Managers has represented, warranted and undertaken that it has not offered or sold any Bonds or caused the Bonds to be made the subject of an invitation for subscription or purchase and will not offer or sell any Bonds or cause the Bonds to be made the subject of an invitation for subscription or purchase, and has not circulated or distributed, nor will it circulate or distribute, this Offering Circular or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Bonds, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor (as defined in Section 4A of the Securities and Futures Act (Chapter 289) of Singapore, as modified or amended from time to time (the “SFA”)) pursuant to Section 274 of the SFA, (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

− 121 − Where the Bonds are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

(a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities or securities-based derivatives contracts (each term as defined in Section 2(1) of the SFA) of that corporation or the beneficiaries’ rights and interests (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Bonds pursuant to an offer made under Section 275 of the SFA except:

(i) to an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;

(ii) where no consideration is or will be given for the transfer;

(iii) where the transfer is by operation of law;

(iv) as specified in Section 276(7) of the SFA; or

(v) as specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018.

Singapore SFA Product Classification: In connection with Section 309B of the SFA and the Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore (the “CMP Regulations 2018”), the Issuer has determined, and hereby notifies all relevant persons (as defined in Section 309A(1) of the SFA), that the Bonds are ‘prescribed capital markets products’ (as defined in the CMP Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

Japan

The Bonds have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended, the “Financial Instruments and Exchange Act”). Accordingly, each of the Joint Lead Managers has represented, warranted and undertaken that it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sell any Bonds in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised under the laws of Japan) or to others for re-offering or re-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Act and other relevant laws and regulations of Japan.

− 122 − SUMMARY OF CERTAIN DIFFERENCES BETWEEN PRC GAAP AND IFRS

The Group’s consolidated financial statements included in this Offering Circular were prepared and presented in accordance with PRC GAAP. PRC GAAP are substantially in line with IFRS, except for certain modifications, between PRC GAAP and IFRS. The following is a general summary of certain differences between PRC GAAP and IFRS on recognition and presentation as applicable to the Issuer. The Issuer is responsible for preparing the summary below. Since the summary is not meant to be exhaustive, there is no assurance regarding the completeness of the financial information and related footnote disclosure between PRC GAAP and IFRS and no attempt has been made to quantify such differences. Had any such quantification or reconciliation been undertaken by the Issuer, other potentially significant accounting and disclosure differences may have required that are not identified below. Additionally, no attempt has been made to identify possible future differences between PRC GAAP and IFRS as a result of prescribed changes in accounting standards. Regulatory bodies that promulgate PRC GAAP and IFRS have significant ongoing projects that could affect future comparisons or events that may occur in the future. Accordingly, no assurance is provided that the following summary of differences between PRC GAAP and IFRS is complete.

In making an investment decision, each investor must rely upon its own examination of the Issuer, the terms of the offering and other disclosure contained herein. Each investor should consult its own professional advisers for an understanding the differences between PRC GAAP and IFRS and/or between PRC GAAP and other generally accepted accounting principles, and how those differences might affect the financial information contained herein.

Accounting Year

Under the PRC GAAP, the accounting year shall run from 1 January to 31 December.

IFRS requires financial statements to be presented at least annually. However, it does not specify the start or end of the financial reporting period and permits an entity to change its reporting date.

Government Grant

Under PRC GAAP, an assets-related government grant is only required to be recognised as deferred income, and evenly amortised to profit or loss over the useful life of the related asset. However, under IFRS, such assets-related government grants are allowed to be presented in the statement of financial position either by setting up the grant as deferred income or by deducting the grant in arriving at the carrying amount of the asset.

Under PRC GAAP, the relocation compensation for public interests is required to be recognised as special payables. The income from compensation attributable to losses of fixed assets and intangible assets, related expenses, losses from production suspension incurred during the relocation and reconstruction period and purchases of assets after the relocation are transferred from special payables to deferred income and accounted for in accordance with the government grants standard. The surplus reached after deducting the amount transferred to deferred income shall be recognised in capital reserve.

Under IFRS, if an entity relocates for reasons of public interests, the compensation received shall be recognised in profit or loss.

Reversal of an Impairment Loss

Under PRC GAAP, once an impairment loss is recognised for a long-term asset (including fixed assets, intangible assets and goodwill, etc.) it shall not be reversed in any subsequent period.

Under IFRS, an impairment loss recognised in prior periods for an asset other than goodwill could be reversed if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised.

− 123 − Classification of Expenses in the Income Statement/Statement of Comprehensive Income

Under the PRC GAAP, expenses must be classified based on their function in the income statement.

Under IFRS, enterprises may classify expenses either based on the nature of the expenses or their function in the statement of comprehensive income, depending on which format is considered reliable and more relevant.

Related Party Disclosures

Under PRC GAAP, government-related entities are not treated as related parties.

Under IFRS, government-related entities are still treated as related parties.

Fixed Assets and Intangible Assets

Under PRC GAAP, only the cost model is allowed.

Under IFRS, an entity can choose either the cost model or the revaluation model as its accounting policy.

Available-for-sale Financial Assets

Under PRC GAAP, an enterprise shall measure available-for-sale financial assets at their fair values. If the available-for-sale financial assets do not have a quoted market price in an active market, and their fair value cannot be reliably measured, cost model shall be applied.

Under IFRS, available-for-sale financial assets are measured at fair value.

− 124 − GENERAL INFORMATION

1. Clearing System: The Bonds have been accepted for clearance through Euroclear and Clearstream under Common Code 237835255, the ISIN XS2378352558 and the Legal Entity Identifier 655600QA3TLAEUYJE442.

2. Authorisations: The Issuer has obtained all necessary consents, approvals and authorisations in connection with the issue and performance of its obligations under the Bonds, the Trust Deed and the Agency Agreement. The issue of the Bonds was authorised by a resolution of its board of directors dated 17 July 2020 and a resolution of its shareholder dated 29 December 2020.

3. No Material and Adverse Change: Save as disclosed in this Offering Circular, there has been no material adverse change, or any development or event involving a prospective change, in the condition (financial or other), prospects, results of the Group’s operations or general affairs since 31 March 2021.

4. Litigation: The Group is not involved in any litigation or arbitration proceedings which could have a material and adverse effect on their businesses, results of operations and financial condition nor is it aware that any such proceedings are pending or threatened.

5. Available Documents: Copies of the Trust Deed and the Agency Agreement will be available for inspection at all reasonable times during normal business hours (being between 9.00 a.m. and 3.00 p.m., Monday to Friday (other than public holidays)) by the Bondholders at the principal office of the Trustee (being as at the date of this Offering Circular at One Canada Square. London, E145AL, United Kingdom) and at the specified office of the Principal Paying Agent, in each case following prior written request and proof of identity and holding to the satisfaction of the Trustee or, as the case may be, the Principal Paying Agent.

6. Financial Statements: The Audited Financial Statements, which are included elsewhere in this Offering Circular, have been audited, and the Interim Financial Statements, which are included elsewhere in this Offering Circular, have been reviewed, by RSM, the Issuer’s independent auditor, as stated in its report appearing herein.

7. Listing of Bonds: Application will be made to the SEHK for the listing of, and permission to deal in, the Bonds by way of debt issues to Professional Investors (as defined in the Chapter 37 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited) only and such permission is expected to become effective on 27 August 2021.

− 125 − INDEX TO FINANCIAL STATEMENTS

UNAUDITED BUT REVIEWED CONSOLIDATED FINANCIAL STATEMENTS OF THE ISSUER AS AT AND FOR THE SIX MONTHS ENDED 31 MARCH 2021

Auditor’s Review Report ...... F-4

Consolidated Balance Sheet ...... F-6

Consolidated Income Statement ...... F-7

Consolidated Cash Flow Statement ...... F-9

Consolidated Statement of Changes in Shareholders’ Equity ...... F-10

Balance Sheet of the Company ...... F-12

Income Statement of the Company ...... F-13

Cash Flow Statement of the Company ...... F-15

Statement of Changes in Shareholders’ Equity of the Company ...... F-16

Notes to the Financial Statements ...... F-18

AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE ISSUER AS AT AND FOR THE YEARS ENDED 31 DECEMBER 2018, 2019 AND 2020

Auditor’s Report...... F-132

Consolidated Balance Sheet...... F-136

Consolidated Income Statement ...... F-138

Consolidated Cash Flow Statement ...... F-139

Consolidated Statement of Changes in Shareholder’s Equity ...... F-140

Balance Sheet of the Company ...... F-143

Income Statement of the Company ...... F-144

Cash Flow Statement of the Company ...... F-145

Statement of Changes in Shareholders’ Equity of the Company ...... F-146

Notes to the Audited Financial Statements ...... F-149

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FM: HUA XIA BANK CO., LIMITED NANNING BRANCH (SWIFT: HXBKCNBJ240)

ADDRESS: BLOCK B, CHINA RESOURCES BUILDING, NO. 136 MINZU AVENUE, QING XIU DISTRICT, NANNING, GUANGXI, CHINA

DATE: [DATE] 2021

TO BENEFICIARY: THE BANK OF NEW YORK MELLON, LONDON BRANCH (THE “TRUSTEE”, WHICH EXPRESSION SHALL INCLUDE ANY SUCCESSOR OR CO-TRUSTEE), WHOSE PRINCIPAL OFFICE AS AT THE DATE HEREOF IS SITUATED AT ONE CANADA SQUARE LONDON, E14 5AL, UNITED KINGDOM, IN ITS CAPACITY AS TRUSTEE FOR AND ON BEHALF OF THE HOLDERS (THE “BONDHOLDERS”) (OR ITS DELEGATE (AS DEFINED BELOW) WITH SWIFT: IRVTHKHX) OF THE U.S.$50,000,000 2.3 PER CENT. CREDIT ENHANCED BONDS DUE 2024 (THE “BONDS”), TO BE ISSUED BY GUANGXI LIUZHOU RAIL TRANSIT INVESTMENT DEVELOPMENT GROUP CO., LTD. (廣西柳州市軌道交通投資發展集團有限公司) (THE “ISSUER”), WHOSE REGISTERED OFFICE AS AT THE DATE HEREOF IS SITUATED AT NO.232-1, DONGHUAN AVENUE, LIUZHOU, GUANGXI, CHINA AND TO BE CONSTITUTED BY A TRUST DEED DATED ON 26 AUGUST 2021 (THE “ISSUE DATE”) BETWEEN THE ISSUER AND THE TRUSTEE (AS AMENDED AND/OR SUPPLEMENTED FROM TIME TO TIME, THE “TRUST DEED”).

DEAR SIRS,

RE: OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. [NUMBER]

AT THE REQUEST OF OUR CUSTOMER, THE ISSUER, WE, HUA XIA BANK CO., LIMITED NANNING BRANCH (THE “ISSUING BANK,” “OUR,” “US”OR“WE”), HEREBY ISSUE OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. [NUMBER] IN YOUR FAVOUR, AND FOR THE ACCOUNT OF THE ISSUER, IN RESPECT OF AND IN CONNECTION WITH THE TERMS AND CONDITIONS OF THE BONDS APPENDED TO THE TRUST DEED (THE “CONDITIONS”) AND THE TRUST DEED. THIS IRREVOCABLE STANDBY LETTER OF CREDIT IS MADE AVAILABLE BY US FOR PAYMENT AGAINST OUR RECEIPT OF A DEMAND SUBSTANTIALLY IN THE FORM SET OUT IN APPENDIX A1 (A “DEMAND”) PRESENTED IN ACCORDANCE WITH THIS IRREVOCABLE STANDBY LETTER OF CREDIT STATING THAT (1) THE ISSUER HAS FAILED TO COMPLY WITH CONDITION 4(B) OF THE CONDITIONS (THE “PRE-FUNDING CONDITION”) IN RELATION TO PRE-FUNDING THE AMOUNT THAT IS REQUIRED TO BE PRE-FUNDED UNDER THE CONDITIONS AND/OR FAILED TO PROVIDE THE REQUIRED CONFIRMATIONS (AS DEFINED IN THE CONDITIONS) IN ACCORDANCE WITH THE PRE-FUNDING CONDITION OR (2) AN EVENT OF DEFAULT (AS DEFINED IN THE CONDITIONS) HAS OCCURRED AND THE BENEFICIARY, AS TRUSTEE FOR THE BONDHOLDERS, HAS GIVEN NOTICE TO THE ISSUER THAT THE BONDS ARE IMMEDIATELY DUE AND PAYABLE IN ACCORDANCE WITH CONDITION 10 OF THE CONDITIONS.

SUBJECT TO THE TERMS OF THIS IRREVOCABLE STANDBY LETTER OF CREDIT, WE UNCONDITIONALLY AND IRREVOCABLY UNDERTAKE TO YOU THAT, ON OR AFTER THE ISSUE DATE AND PRIOR TO 26 SEPTEMBER 2024 (THE “EXPIRY DATE”) AND FOLLOWING RECEIPT BY US OF A DEMAND PRESENTED BY THE TRUSTEE OR BY THE BANK OF NEW YORK MELLON, HONG KONG BRANCH (SWIFT: IRVTHKHX), WHOSE ADDRESS AT THE BOND ISSUE DATE IS AT LEVEL 26, THREE PACIFIC PLACE, 1 QUEEN’S ROAD EAST, HONG KONG, ACTING AS THE DELEGATE OF AND ON BEHALF OF THE TRUSTEE IN RELATION TO THIS IRREVOCABLE STANDBY LETTER OF CREDIT (THE “DELEGATE”) IN ACCORDANCE WITH THIS IRREVOCABLE STANDBY LETTER OF CREDIT BY 6:00 P.M. (HONG KONG TIME) ON A BUSINESS DAY, WE SHALL BY 10:00 A.M. (HONG KONG TIME) ON THE FOURTH BUSINESS DAY AFTER THE BUSINESS DAY ON WHICH WE RECEIVE SUCH DEMAND (OR IF SUCH DEMAND IS RECEIVED AFTER 6:00 P.M. (HONG KONG TIME) ON A BUSINESS DAY, THEN ON

− A-1 − THE FIFTH BUSINESS DAY AFTER THE BUSINESS DAY ON WHICH WE RECEIVE SUCH DEMAND), PAY TO OR TO THE ORDER OF THE BENEFICIARY THE AMOUNT IN U.S. DOLLARS SPECIFIED IN THE DEMAND IN IMMEDIATELY AVAILABLE FUNDS TO THE ACCOUNT SPECIFIED IN THE DEMAND. “BUSINESS DAY” MEANS A DAY (OTHER THAN A SATURDAY OR A SUNDAY OR A PUBLIC HOLIDAY) ON WHICH COMMERCIAL BANKS ARE OPEN FOR BUSINESS IN HONG KONG, BEIJING, LONDON AND NEW YORK CITY.

OUR AGGREGATE LIABILITY UNDER THIS IRREVOCABLE STANDBY LETTER OF CREDIT SHALL BE EXPRESSED AND PAYABLE IN U.S. DOLLARS AND SHALL NOT IN ANY CIRCUMSTANCES EXCEED U.S.$51,575,000 (THE “MAXIMUM LIMIT”), WHICH INCLUDES AN AMOUNT REPRESENTING (I) THE AGGREGATE PRINCIPAL AMOUNT OF U.S.$50,000,000 OF THE BONDS PLUS INTEREST PAYABLE FOR ONE INTEREST PERIOD IN ACCORDANCE WITH THE CONDITIONS PLUS (II) U.S.$1,000,000 BEING THE MAXIMUM AMOUNT PAYABLE UNDER THIS IRREVOCABLE STANDBY LETTER OF CREDIT FOR ANY FEES, EXPENSES AND ALL OTHER AMOUNTS PAYABLE BY THE ISSUER UNDER OR IN CONNECTION WITH THE BONDS, THE TRUST DEED AND THE AGENCY AGREEMENT (AS DEFINED IN THE CONDITIONS).

SUBJECT TO THE TERMS OF THIS IRREVOCABLE STANDBY LETTER OF CREDIT, OUR OBLIGATION TO PAY TO YOU IS UNCONDITIONAL AND ABSOLUTE AND ANY DEMAND BY YOU UNDER THIS IRREVOCABLE STANDBY LETTER OF CREDIT SHALL BE HONOURED WITHOUT ANY FURTHER ENQUIRY AS TO YOUR RIGHTS TO MAKE SUCH DEMAND.

THIS IRREVOCABLE STANDBY LETTER OF CREDIT TAKES EFFECT FROM THE DATE HEREOF AND SHALL REMAIN VALIDAND IN FULL FORCE UNTIL 6:00 P.M. (HONG KONG TIME) ON THE EXPIRY DATE AND SHALL EXPIRE AT THE PLACE OF THE ISSUING BANK.

PAYMENT WILL BE EFFECTED AFTER OUR RECEIPT OF A DEMAND PRESENTED IN ACCORDANCE WITH THIS IRREVOCABLE STANDBY LETTER OF CREDIT, WHICH IS PRESENTED ON OR AFTER THE ISSUE DATE AND ON OR BEFORE 6:00 P.M. (HONG KONG TIME) ON THE EXPIRY DATE.

ANY DEMAND UNDER THIS IRREVOCABLE STANDBY LETTER OF CREDIT IS TO BE PRESENTED BY WAY OF AN AUTHENTICATED SWIFT PRESENTED BY THE TRUSTEE OR ON BEHALF OF THE TRUSTEE BY THE DELEGATE FOR THE BONDHOLDERS TO US (SWIFT: HXBKCNBJ240) WITHOUT THE NEED TO PHYSICALLY PRESENT AN ORIGINAL OF THAT DEMAND AT OUR COUNTER; PROVIDED THAT IN THE EVENT THAT THE SWIFT SYSTEM IS NOT AVAILABLE FOR ANY REASON, YOU (THE BENEFICIARY) MAY INSTEAD PRESENT A COPY OF THE DEMAND TO US VIA FACSIMILE TRANSMISSION AT (86)07712520840 AND SUCH DEMAND SHALL BE SIGNED BY YOU AS TRUSTEE. IN THE CASE OF A PRESENTATION OF A DEMAND BY WAY OF FACSIMILE TRANSMISSION IN THE CIRCUMSTANCE STATED ABOVE, YOU SHALL ARRANGE FOR THE ORIGINAL DEMAND TO BE DELIVERED AS SOON AS PRACTICABLE THEREAFTER VIA COURIER AT OUR COUNTER AT OUR ADDRESS (AS SPECIFIED ABOVE) ON OR AFTER THE ISSUE DATE AND ON OR BEFORE 6:00 P.M. (HONG KONG TIME) ON THE EXPIRY DATE. FOR THE AVOIDANCE OF DOUBT, FOR THE PURPOSES OF THIS IRREVOCABLE STANDBY LETTER OF CREDIT, THE DEMAND SHALL BE DEEMED TO BE RECEIVED BY US, AND WE SHALL START PROCESSING SUCH DEMAND, UPON OUR RECEIPT OF SUCH DEMAND SENT TO US BY WAY OF FACSIMILE TRANSMISSION.

ONLY ONE DRAWING UNDER THIS IRREVOCABLE STANDBY LETTER OF CREDIT IS PERMITTED.

ALL CHARGES ARE FOR THE ACCOUNT OF THE ISSUER AND, FOR THE AVOIDANCE OF DOUBT, ARE NOT FOR THE ACCOUNT OF THE BENEFICIARY.

− A-2 − NOTWITHSTANDING THE MAXIMUM LIMIT, ALL PAYMENTS UNDER THIS IRREVOCABLE STANDBY LETTER OF CREDIT SHALL BE MADE IN U.S. DOLLARS AND FOR VALUE ON THE DATE SPECIFIED IN THE DEMAND IN IMMEDIATELY AVAILABLE FUNDS WITHOUT ANY DEDUCTION OR WITHHOLDING ON ACCOUNT OF TAX, SET-OFF, COUNTERCLAIM OR OTHERWISE. IN THE EVENT THAT ANY DEDUCTION OR WITHHOLDING IS REQUIRED, THE ISSUING BANK SHALL PAY SUCH ADDITIONAL AMOUNTS AS WILL RESULT IN RECEIPT BY THE TRUSTEE FOR THE BONDHOLDERS OF SUCH AMOUNTS AS WOULD HAVE BEEN RECEIVED BY IT HAD NO SUCH DEDUCTION OR WITHHOLDING BEEN SO REQUIRED.

THE BENEFICIARY’S RIGHTS UNDER THIS IRREVOCABLE STANDBY LETTER OF CREDIT MAY BE TRANSFERRED OR RE-TRANSFERRED IN WHOLE OR IN PART TO ANY ADDITIONAL OR REPLACEMENT TRUSTEE APPOINTED AS CONTEMPLATED IN THE TRUST DEED IN RESPECT OF THE BONDS SUBJECT ONLY TO AT LEAST 15 DAYS’ NOTICE PRIOR TO THE EXPIRY DATE HAVING BEEN GIVEN TO US BY OR ON BEHALF OF YOU AS TRUSTEE FOR THE BONDHOLDERS BY AUTHENTICATED SWIFT, OR IN THE EVENT THAT THE SWIFT SYSTEM IS NOT AVAILABLE FOR ANY REASON VIA FACSIMILE TRANSMISSION TO US AT (86)07712520840. MULTIPLE TRANSFERS ARE PERMITTED, SUBJECT TO AS PROVIDED IN THIS PARAGRAPH.

WE MAY NOT ASSIGN, TRANSFER OR NOVATE ANY OF OUR OBLIGATIONS UNDER THIS IRREVOCABLE STANDBY LETTER OF CREDIT.

NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS IRREVOCABLE STANDBY LETTER OF CREDIT, IN THE UNEXPECTED EVENT THAT WE ARE CLOSED FOR ANY REASON WHEN YOU WISH TO PRESENT A DEMAND HEREUNDER ON THE DAY AND AT THE TIME A DEMAND IS ABLE TO BE PRESENTED IN ACCORDANCE WITH THIS IRREVOCABLE STANDBY LETTER OF CREDIT, WE AGREE THAT YOU CAN PRESENT THE DEMAND BY AUTHENTICATED SWIFT OR, IN THE EVENT THAT THE SWIFT SYSTEM IS NOT AVAILABLE FOR ANY REASON, BY PRESENTING A COPY OF THE DEMAND VIA FACSIMILE TRANSMISSION AT (86)07712520840 TO OUR OFFICE FROM THE DATE OF OUR RESUMPTION OF OUR BUSINESS; PROVIDED THAT IF WE ARE CLOSED ON THE EXPIRY DATE, THE EXPIRY DATE SHALL BE AUTOMATICALLY EXTENDED BY, AND SUCH PRESENTATION SHALL BE MADE WITHIN, FIVE BUSINESS DAYS AFTER THE DATE ON WHICH WE NOTIFY YOU BY AUTHENTICATED SWIFT OR, IN THE EVENT THAT THE SWIFT SYSTEM IS NOT THEN AVAILABLE FOR ANY REASON VIA FACSIMILE TRANSMISSION (USING THE SWIFT ADDRESS OR, AS THE CASE MAY BE, THE FACSIMILE NUMBER SET OUT ABOVE FOR YOU AS BENEFICIARY) OF OUR RESUMPTION OF OUR BUSINESS. FOR THE AVOIDANCE OF DOUBT, FOR THE PURPOSES OF THIS IRREVOCABLE STANDBY LETTER OF CREDIT, THE DEMAND SHALL BE DEEMED TO BE RECEIVED BY US, AND WE SHALL START PROCESSING SUCH DEMAND, UPON OUR RECEIPT OF SUCH DEMAND SENT TO US BY WAY OF FACSIMILE TRANSMISSION.

ANY SETTLEMENT OR DISCHARGE BETWEEN US AS ISSUING BANK AND YOU AS TRUSTEE FOR THE BONDHOLDERS AND BENEFICIARY SHALL BE CONDITIONAL UPON NO PAYMENT TO YOU BY THE ISSUER OR ANY OTHER PERSON ON BEHALF OF THE ISSUER BEING AVOIDED (BY VIRTUE OF ANY LAWS RELATING TO BANKRUPTCY, INSOLVENCY, LIQUIDATION OR SIMILAR LAWS OF GENERAL APPLICATION FOR THE TIME BEING IN FORCE) AND, IN THE EVENT OF ANY SUCH PAYMENT BEING SO AVOIDED, YOU SHALL BE ENTITLED TO RECOVER THE AMOUNT BY WHICH SUCH PAYMENT IS SO AVOIDED FROM US SUBSEQUENTLY AS IF SUCH SETTLEMENT OR DISCHARGE HAD NOT OCCURRED.

EXCEPT TO THE EXTENT IT IS INCONSISTENT WITH THE EXPRESS TERMS OF THIS IRREVOCABLE STANDBY LETTER OF CREDIT, THIS IRREVOCABLE STANDBY LETTER OF CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (2007 REVISION), INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 600.

− A-3 − THIS IRREVOCABLE STANDBY LETTER OF CREDIT, AND ANY NON-CONTRACTUAL OBLIGATIONS ARISING OUT OF OR IN CONNECTION WITH IT, SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, ENGLISH LAW. THE COURTS OF HONG KONG HAVE EXCLUSIVE JURISDICTION TO SETTLE ANY DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS IRREVOCABLE STANDBY LETTER OF CREDIT (INCLUDING ANY NON-CONTRACTUAL OBLIGATIONS ARISING OUT OF OR IN CONNECTION WITH THIS IRREVOCABLE STANDBY LETTER OF CREDIT) (A “DISPUTE”) AND THE COURTS OF HONG KONG ARE THE MOST APPROPRIATE AND CONVENIENT COURTS TO SETTLE ANY DISPUTE AND, ACCORDINGLY, THAT WE WILL NOT ARGUE THAT ANY OTHER COURTS ARE MORE APPROPRIATE OR CONVENIENT. WE AGREE THAT ANY SERVICE OF PROCESS IN ANY LEGAL ACTION OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS IRREVOCABLE STANDBY LETTER OF CREDIT AND ANY OTHER DOCUMENTS REQUIRED TO BE SERVED IN RELATION TO SUCH ACTION OR PROCEEDINGS MAY BE RECEIVED BY US BY BEING DELIVERED TO US AT UNIT B, 1/F, LIPPO LEIGHTON TOWER 103 LEIGHTON RD, CAUSEWAY BAY, HONG KONG. IF FOR ANY REASON WE CEASE TO HAVE SUCH ADDRESS IN HONG KONG, WE WILL PROMPTLY APPOINT A SUBSTITUTE PROCESS AGENT AND NOTIFY THE BENEFICIARY OF SUCH APPOINTMENT WITHIN 30 DAYS OF SUCH CESSATION. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

− A-4 − APPENDIX A-1

FORM OF DEMAND

To: HUA XIA BANK CO., LIMITED NANNING BRANCH (SWIFT: HXBKCNBJ240)

BLOCK B, CHINA RESOURCES BUILDING, NO. 136 MINZU AVENUE, QING XIU DISTRICT, NANNING, GUANGXI, CHINA

收件人:華夏銀行股份有限公司南寧分行 (SWIFT: HXBKCNBJ240)

廣西壯族自治區南寧市青秀區民族大道136號華潤大廈B座 [DATE]

Dear Sirs

RE: DEMAND UNDER THE IRREVOCABLE STANDBY LETTER OF CREDIT NO. [NUMBER]IN RESPECT OF THE U.S.$50,000,000 2.3 PER CENT. CREDIT ENHANCED BONDS DUE 2024 (THE “BONDS”) ISSUED BY GUANGXI LIUZHOU RAIL TRANSIT INVESTMENT DEVELOPMENT GROUP CO., LTD. (廣西柳州市軌道交通投資發展集團有限公司) (THE “ISSUER”)

The undersigned is a duly authorised person of The Bank of New York Mellon, London Branch or The Bank of New York Mellon, Hong Kong Branch which is hereby making a demand as delegate of and on behalf of The Bank of New York Mellon, London Branch as Trustee for the Bondholders (the “Beneficiary”) under your Irrevocable Standby Letter of Credit No. [NUMBER] (the “Irrevocable Standby Letter of Credit”). Capitalised terms used herein but not defined shall have the meanings given to them in the Irrevocable Standby Letter of Credit.

1. This Demand is made in connection with the following:

• The Issuer has failed to comply with the Pre-Funding Condition in relation to pre-funding the amount that is required to be pre-funded under the Conditions and/or failed to provide the Required Confirmations (as defined in the Conditions) in accordance with the Pre-Funding Condition. OR

• An Event of Default (as defined in the Conditions) has occurred and the Beneficiary, as Trustee for the Bondholders, has given notice to the Issuer that the Bonds are immediately due and payable in accordance with Condition 10 of the Conditions.

2. We hereby demand you to pay U.S.$[AMOUNT] representing the aggregate of (i) interest accrued up to the date when the Bonds cease to bear interest pursuant to the Conditions, (ii) the principal amount of the outstanding Bonds and (iii) all fees, costs, expenses, indemnity payments and other amounts in connection with the Bonds, the Trust Deed and/or the Agency Agreement now outstanding as at the date hereof.

3. We hereby request you to pay the amounts stated in paragraph 2 above after you receive this Demand in accordance with the Irrevocable Standby Letter of Credit.

4. The proceeds of the drawing under this Demand are to be credited to the following account:

[Insert account details]

− A-5 − For and behalf of

[The Bank of New York Mellon, London Branch as Trustee] or [The Bank of New York Mellon, Hong Kong Branch as delegate of the Trustee]

By:

Name: Title:

− A-6 − ISSUER

Guangxi Liuzhou Rail Transit Investment Development Group Co., Ltd. (廣西柳州市軌道交通投資發展集團有限公司) No. 232-1 Donghuan Avenue Liuzhou, Guangxi

TRUSTEE PRINCIPAL PAYING AGENT

The Bank of New York Mellon, The Bank of New York Mellon, London Branch London Branch One Canada Square One Canada Square London, E14 5AL London, E14 5AL United Kingdom United Kingdom

REGISTRAR AND TRANSFER AGENT PRE-FUNDING ACCOUNT BANK AND LC PROCEEDS ACCOUNT BANK

The Bank Of New York Mellon SA/NV, The Bank of New York Mellon, London Branch Dublin Branch One Canada Square Riverside Two London, E14 5AL Sir John Rogerson’s Quay United Kingdom Grand Canal Dock Dublin 2 Ireland

LEGAL ADVISERS

To the Issuer To the Issuer as to English law as to PRC law

Linklaters Allbright Law Offices 11/F Alexandra House 9th, 11th and 12th Floor, Shanghai Tower Chater Road 501 Yincheng Middle Road Hong Kong Pudong New Area, Shanghai

To the Joint Lead Managers To the Joint Lead Managers as to English law as to PRC law

Mayer Brown Jingtian & Gongcheng 16th-19th Floors, Prince’s Building 34/F, Tower 3, China Central Place 10 Chater Road 77 Jianguo Road Central, Hong Kong Beijing 100025 People’s Republic of China

To the Trustee as to English law

K&L Gates 1 New Change, London EC4M 9AF United Kingdom

AUDITORS OF THE ISSUER

RSM China CPA LLP Suite 920-926, No.22 Fu Cheng Men Wai Street Wai Jing Mao Building, Xicheng District Beijing, China