History, Reorganization and Corporate Structure
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THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. HISTORY, REORGANIZATION AND CORPORATE STRUCTURE OUR HISTORY AND DEVELOPMENT History Our history can be traced back to 1995, when Shinsun Property was established in the PRC by Mr. Chen, our Controlling Shareholder, our executive Director and chairman of our Board, and his spouse, Ms. Zhu Guoling. We commenced to develop residential properties in Shaoxing, Zhejiang Province in 1999 and have expanded our business into key cities in Zhejiang Province including Hangzhou, Wenzhou, Ningbo, Shaoxing, Quzhou and Huzhou through years of continuous development. While establishing a strong market position in Zhejiang Province, we have also strategically focused on the Pan-Yangtze River Delta Region since 2004. We entered into the markets of Jiangsu and Shanghai in 2004 and 2007, respectively, and since then we have established presence in other areas in the Pan-Yangtze River Delta Region such as Nanjing, Hefei, Suzhou, Nantong, Yangzhou, Wuhu and Jiujiang. Our success in the Pan-Yangtze River Delta Region laid a solid foundation for our strategic expansion in other economic regions of China. We expanded our business into Wuhan in 2007 and Hohhot in 2018. We have grown from a leading regional residential property developer to an established comprehensive real estate developer with national presence. Leveraging our brand and experience in developing quality residential properties, we commenced to develop non-residential properties in 2006 and since then, we have built a growing portfolio of diversified investment properties, covering office buildings, commercial complexes, community businesses and hotels. As of March 31, 2020, we had a total of 195 projects at various stages of development in 43 cities across 11 provinces with a total GFA attributable to us of 23,044,656 sq.m. According to the Enterprise Research Institute of the Development Research Center of the State Council, the Center for Real Estate of Tsinghua University and the China Index Academy, we have been consistently ranked among “China’s Top 100 Real Estate Developers” for ten consecutive years in terms of comprehensive capabilities since 2011, and our rapid expansion has improved our ranking from 92nd in 2011 to 27th in 2020. Business Development Milestones The following table sets out a summary of our Group’s major business development milestones: Year Milestone 1995 Shinsun Property was established in China. 1999 We developed our first residential project, namely Zhuji Shinsun Riverside Garden (諸暨祥生濱江花苑), in Shaoxing, Zhejiang Province. 2004 We strategically expanded our business into the Pan-Yangtze River Delta Region. – 138 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. HISTORY, REORGANIZATION AND CORPORATE STRUCTURE Year Milestone 2007 We developed our first residential project, namely Shanghai Shinsun Futian Yayuan (上海祥生福田雅園), in Shanghai. 2011 We were first ranked China’s Top 100 Real Estate Developers (中國房地 產百強企業) by China Real Estate Top 10 Research Team (中國房地產 TOP10研究組). 2014 We relocated our corporate headquarters to Hangzhou, Zhejiang Province. 2015 We were ranked 51st among China’s Real Estate Developers by China Real Estate Association (中國房地產業協會) and China Real Estate Appraisal Centre (中國房地產測評中心). 2016 We were ranked 50th among China’s Real Estate Developers by China Real Estate Association (中國房地產業協會) and China Real Estate Appraisal Centre (中國房地產測評中心). We adopted a “1+1+X” expansion strategy where we base our development in Zhejiang Province, deeply penetrate into the Pan-Yangtze River Delta Region, and expand into other regional cities with high economic growth potentials beyond this region. 2019 Our Shanghai Operation Center commenced operation. 2020 We were ranked 27th among China’s Real Estate Developers by China Real Estate Association (中國房地產業協會), Shanghai E-House Real Estate Research Institute (上海易居房地產研究院) and China Real Estate Appraisal Centre (中國房地產測評中心). OUR CORPORATE DEVELOPMENTS Our Company was incorporated in the Cayman Islands under the Cayman Islands Companies Law as an exempted company with limited liability on December 13, 2019, and became the holding company and [REDACTED] vehicle of our Group upon completion of the Reorganization. See “— Reorganization” below for details. – 139 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. HISTORY, REORGANIZATION AND CORPORATE STRUCTURE Our principal operating subsidiaries in the PRC As of the Latest Practicable Date, our business operations had been carried out by our operating subsidiaries established or acquired by our Group in the PRC. Our principal operating subsidiaries comprise major holding companies and/or subsidiaries which contributed a substantial amount of revenue and profit of our Group during the Track Record Period. Set out below are the major corporate developments including major changes in the equity interests in our principal operating subsidiaries. Shinsun Property Shinsun Property is the principal onshore holding company of our Group and the centralized management platform of our property development projects and an indirect wholly-owned subsidiary of our Company. It was established in the PRC with limited liability on January 4, 1995 with an initial registered capital of RMB6 million. As of the date of its establishment, Shinsun Property was owned as to 60% by Xiangsheng Industrial and 40% by Ms. Zhu Guoling (朱國玲), the spouse of Mr. Chen. Xiangsheng Industrial was owned as to 99% by Mr. Chen and 1% by Mr. Chen Hongni (陳弘倪), the son of Mr. Chen, our executive Director, chief executive officer and president. Subsequent to a series of capital injections and equity transfers as a result of the internal restructuring of the shareholding structure of Shinsun Property as part of the family arrangement of Mr. Chen, Ms. Zhu Guoling and Mr. Chen Hongni, as of September 18, 2017, Shinsun Property became owned as to approximately 97.5% by Zhuji Xiangshen and approximately 2.5% by Mr. Chen with a registered and paid-up capital of RMB1.18 billion. Zhuji Xiangshen was wholly owned by Mr. Chen at the relevant time. The registered capital of Shinsun Property was increased to RMB1.58 billion through capital injections of RMB100 million and RMB300 million by Zhuji Xiangshen on July 9, 2018 and December 31, 2018, respectively. Upon completion of such capital injections, Shinsun Property became owned as to 98.14% by Zhuji Xiangshen and 1.86% by Mr. Chen. Upon completion of a series of equity transfers as part of our Reorganization, Shinsun Property became wholly owned by Zhuji Zhuojie. See“— Reorganization — Acquisition of entire equity interest in Shinsun Property by Zhuji Zhuojie” below for further details. Taixing Xiangrui Taixing Xiangrui is the project company for our property development projects, namely Taixing Shinsun Guantang Mansion (泰興祥生觀棠府), Taixing Shinsun Tangyue Garden (泰興 祥生棠悅園) and Taixing Shinsun Future City Garden (泰興祥生未來城花園) and an indirect non-wholly owned subsidiary of our Company. It was established in the PRC with limited liability on January 22, 2015 with an initial registered and paid-up capital of RMB200 million. As of the date of its establishment, Taixing Xiangrui was owned as to 55% by Shinsun Property, 35% by Zhuji Xiangsheng Enterprise Management Consulting Co., Ltd. (諸暨市祥生 企業管理諮詢有限公司)(“Zhuji Xiangsheng Enterprise”), an indirect wholly-owned – 140 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. HISTORY, REORGANIZATION AND CORPORATE STRUCTURE subsidiary of our Company, and 10% by Zhuji Jiuku Investment Co., Ltd. (諸暨市九庫投資有 限公司)(“Zhuji Jiuku”). Zhuji Jiuku was owned as to 50% by Mr. Zhao Hongwei (趙紅衛), a director of Shinsun Property, and 50% by Ms. Chen Huiping (陳慧萍), the spouse of Mr. Zhao Hongwei. On June 2, 2016, Zhuji Xiangsheng Enterprise transferred 20% and 15% of its equity interest in Taixing Xiangrui to Zhuji Jiuku and Shinsun Property, respectively, at a total consideration of RMB70 million, which was determined based on the then registered capital of Taixing Xiangrui at the time of such transfers. Upon completion of such equity transfers, Taixing Xiangrui became owned as to 70% by Shinsun Property and 30% by Zhuji Jiuku. There has been no change in the equity interest in Taixing Xiangrui since then. Shinsun Plaza Trading Shinsun Plaza Trading is an indirect wholly-owned subsidiary of our Company which retains a portion of our commercial properties for investment purpose. It was established in the PRC with limited liability on May 26, 2006 with an initial registered and paid-up capital of RMB20 million. As of the date of its establishment, Shinsun Plaza Trading was owned as to 51% by Shinsun Property, 39% by Xiangsheng Industrial and 10% by Mr. Chen Hongni, the son of Mr. Chen and our executive Director. As a result of the internal restructuring of the shareholding structure of Shinsun Plaza Trading as part of the family arrangement of Mr. Chen and Mr. Chen Hongni, on December 27, 2007, Mr. Chen Hongni transferred his 10% equity interest in Shinsun Plaza Trading to Xiangsheng Industrial at a consideration of RMB2 million, which was determined based on the then registered and paid-up capital of Shinsun Plaza Trading. Upon completion of such equity transfer, Shinsun Plaza Trading became owned as to 51% by Shinsun Property and 49% by Xiangsheng Industrial. The registered capital of Shinsun Plaza Trading was increased to RMB50 million through capital injection of RMB15.3 million and RMB14.7 million by Shinsun Property and Xiangsheng Industrial, respectively, on December 12, 2019 which would be fully paid-up before 2025. Upon completion of the Reorganization, Shinsun Plaza Trading became wholly owed by Shinsun Property.