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THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of this circular or as to the action to be taken, you should consult a licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in Xiamen International Port Co., Ltd, you should at once hand this circular and the accompanying proxy form to the purchaser(s) or the transferee(s) or to the bank, the licensed securities dealer or registered institution or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s). Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 3378)

DISCLOSEABLE TRANSACTION AND CONNECTED TRANSACTION IN RELATION TO THE DEEMED ACQUISITION OF EQUITY INTEREST AND NOTICE OF THE THIRD EXTRAORDINARY GENERAL MEETING IN 2020 Independent Financial Adviser to the Independent Board Committee and Independent Shareholders

Capitalised terms used in this cover page have the same meanings as those defined in this circular. A letter from the Board is set out on pages 5 to 17 of this circular. A letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on pages 18 to 19 of this circular. A letter from the Independent Financial Adviser, First Shanghai, containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 20 to 36 of this circular. A notice dated 24 November 2020 convening the EGM to be held at 9:00 a.m. on Thursday, 10 December 2020 at 23rd Floor, Conference Room, No. 31 Donggang North Road, Xiamen, the PRC is set out on pages EGM-1 to EGM-2 in this circular. The proxy form for use at the EGM is enclosed with this circular and is also published on the website of the Stock Exchange (www.hkexnews.hk) and the website of the Company (www.xipc.com.cn). Whether or not you are able to attend the EGM, you are requested to complete and return as soon as possible the proxy form in accordance with the instructions printed thereon in any event not less than 24 hours before the time fixed for holding the EGM or any adjournment thereof (as the case may be). Completion and return of the proxy form will not preclude you from attending and voting at the EGM or any adjournment thereof in person if you so wish. 24 November 2020

* For identification purpose only CONTENTS

Pages Definitions ...... 1 Letter from the Board ...... 5 Introduction ...... 5 Discloseable Transaction and Connected Transaction in relation to the deemed acquisition of equity interest ...... 6 EGM ...... 16 Recommendation ...... 17 Additional Information ...... 17 Letter from the Independent Board Committee ...... 18 Letter from the Independent Financial Adviser ...... 20 Appendix I—Valuation Report of Xiamen Sunstone ...... I-1 Appendix II—Valuation Report of the Target Company ...... II-1 Appendix III—General Information ...... III-1 Notice of the EGM ...... EGM-1

i DEFINITIONS

In this circular, the following expressions have the meanings as set out below unless the context requires otherwise:

“associate(s)” has the meaning ascribed thereto under the Listing Rules

“Benchmark Assessment Date” 31 December 2019

“Board” the board of Directors of the Company

“Company” Xiamen International Port Co., Ltd.* (廈門國際港務股份有限公司), a joint stock limited company established in the PRC, the H Shares of which are listed on the Stock Exchange

“connected person(s)” has the meaning ascribed thereto under the Listing Rules

“controlling shareholder” has the meaning ascribed thereto under the Listing Rules

“Director(s)” the director(s) of the Company

“Domestic Shares” ordinary shares of nominal value of RMB1.00 each in the share capital of the Company, which are subscribed for in Renminbi by the PRC nationals and/or PRC corporate entities

“EGM” the third extraordinary general meeting of the Company in 2020 to be held on Thursday, 10 December 2020 to consider and, if thought fit, among other matters, approve the entering into of the Subscription Agreement and the Subscription contemplated thereunder

“Equity Transfer” the transfer of the Target Equity from Xiamen Port Development to Xiamen Sunstone pursuant to the Equity Transfer Agreement, which constitutes a discloseable transaction of the Company and its principal terms and conditions precedent are disclosed in the Company’s announcement dated 28 October 2020

“Equity Transfer Agreement” the equity transfer agreement dated 28 October 2020 entered into between Xiamen Port Development and Xiamen Sunstone, pursuant to which Xiamen Port Development has agreed to transfer the Target Equity to Xiamen Sunstone at the Equity Transfer Consideration

“Equity Transfer Completion” Completion of the Equity Transfer

“Equity Transfer Consideration” the agreed consideration for the Equity Transfer, being RMB129,580,000

“Group” the Company and its subsidiaries

“H Shares” foreign invested shares of nominal value in RMB1.00 each in the share capital of the Company, which are listed on the Stock Exchange and denominated in HK dollars

“HK$”or“HK dollars” Hong Kong dollar, the lawful currency of Hong Kong

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

1 DEFINITIONS

“Independent Board Committee” the independent committee of the Board comprising all of the independent non-executive Directors to advise the Independent Shareholders in respect of the Subscription Agreement and the Subscription contemplated thereunder

“Independent Financial Adviser”or First Shanghai Capital Limited, a corporation licensed to carry out “First Shanghai” Type 6 (advising on corporate finance) regulated activity under the SFO appointed by the Company to advise the Independent Board Committee and the Independent Shareholders in respect of the Subscription Agreement and the Subscription contemplated thereunder

“Independent Shareholders” Shareholders (other than Xiamen Port Holding and its associates) who are not interested or involved in the Subscription Agreement and the Subscription contemplated thereunder

“Individual Shareholders” the 22 individual shareholders of Xiamen Sunstone as at the Latest Practicable Date, none of whom is holding more than 0.5% equity interest in Xiamen Sunstone

“Internal Restructuring Disposal” the disposal of the entire equity interests held by the Target Company in its three non wholly-owned subsidiaries to another subsidiary of Xiamen Port Development as part of Xiamen Port Development’s internal restructuring before the Equity Transfer Completion

“Latest Practicable Date” 19 November 2020, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

“PRC” the People’s Republic of China, and for the purpose of this circular, excludes Hong Kong, Macau and Taiwan

“PRC Qualified Auditors” Xigema Certified Public Accountants (Limited Liabilities Partnership)* (希格瑪會計師事務所(特殊普通合夥)), which is qualified to undertake business audits relating to securities and futures in the PRC

“PRC Qualified Valuer” Xiamen Academic Asset Evaluation & Land and Real Estate Appraisal Co., Ltd.* (廈門市大學資產評估土地房地產估價有限責任公司), which is qualified to undertake asset appraisals in the PRC

“Relevant Ratios” the five ratios as set out in Rule 14.07 of the Listing Rules

“RMB” Renminbi, the lawful currency of the PRC

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

“Share(s)” shares of nominal value RMB1.00 each in the share capital of the Company

“Shareholder(s)” holder(s) of the Shares

2 DEFINITIONS

“Stock Exchange” The Stock Exchange of Hong Kong Limited

“Subscription” the subscription of the Subscription Shares by Xiamen Port Development pursuant to the Subscription Agreement

“Subscription Agreement” the subscription agreement dated 28 October 2020 entered into among Xiamen Port Development, Xiamen Sunstone and XRBG, pursuant to which Xiamen Port Development has agreed to subscribe for, and Xiamen Sunstone has agreed to issue and allot the Subscription Shares at the Subscription Consideration

“Subscription Completion” Completion of the Subscription

“Subscription Consideration” the agreed consideration for the Subscription, being RMB129,507,458

“Subscription Shares” a total of 8,854,000 new shares in Xiamen Sunstone to be issued and allotted to Xiamen Port Development at a nominal value of RMB1 per share and at the issue price of approximately RMB14.63 per share pursuant to the Subscription Agreement

“Supervisor(s)” the supervisor(s) of the Company

“Target Company” Xiamen Road & Bridge Construction Materials Co., Ltd.* (廈門市路橋建材有限公司), a non wholly-owned subsidiary of Xiamen Port Development

“Target Equity” the 95% equity interest in the Target Company to be transferred from Xiamen Port Development to Xiamen Sunstone pursuant to the Equity Transfer Agreement

“XRBG” Xiamen Road & Bridge Construction Group Co., Ltd.* (廈門路橋建設集團有限公司)

“XRBM” Xiamen Road & Bridge Construction Group Co., Ltd.* (廈門路橋工程物資有限公司), a wholly-owned subsidiary of XRBG

“Xiamen Port Development” Xiamen Port Development Co., Ltd.* (廈門港務發展股份有限公司), a joint stock limited company established in the PRC, which is a non-wholly owned subsidiary of the Company, whose A shares are listed on the Shenzhen Stock Exchange since April 1999 and is held by the Company as to approximately 61.89% as at the Latest Practicable Date

“Xiamen Port Holding” Xiamen Port Holding Group Co., Ltd.* (廈門港務控股集團有限公司), a wholly state-owned company established in the PRC and the controlling shareholder of the Company holding approximately 68.32% equity interest in the Company as at the Latest Practicable Date

“Xiamen SASAC” the State-owned Assets Supervision and Administration Commission of Xiamen Municipal People’s Government* (廈門市人民政府國有資產監督管理委員會), which is the authority for supervision and administration of state-owned assets in Xiamen

3 DEFINITIONS

“Xiamen Sunstone” Xiamen Road & Bridge Sunstone Co., Ltd.* (廈門路橋翔通股份有限公司), a non wholly-owned subsidiary of XRBG

“XPDC” Xiamen Port Development and Construction Co., Ltd.* (廈門港口開發建設有限公司), an indirect wholly-owned subsidiary of Xiamen Port Holding held through XPCG

“XPCG” Xiamen Port Construction Group Co., Ltd.* (廈門港務建設集團有限公司), a direct wholly-owned subsidiary of Xiamen Port Holding

“%” per cent.

* For identification purpose only

4 LETTER FROM THE BOARD

(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 3378)

Executive Directors: Registered office: Mr. Cai Liqun No. 439 Gangnan Road Mr. Chen Zhaohui Haicang District Mr. Lin Fuguang Xiamen City Mr. Chen Zhen Fujian Province PRC

Non-executive Directors: Principal place of business in Hong Kong: Mr. Chen Zhiping 31/F, Tower Two Mr. Fu Chengjing Times Square Mr. Huang Zirong 1 Matheson Street Ms. Bai Xueqing Causeway Bay Hong Kong

Independent non-executive Directors: Mr. Liu Feng Mr. Lin Pengjiu Mr. You Xianghua Mr. Jin Tao Mr. Ji Wenyuan

24 November 2020

To the Shareholders

Dear Sir or Madam, DISCLOSEABLE TRANSACTION AND CONNECTED TRANSACTION IN RELATION TO THE DEEMED ACQUISITION OF EQUITY INTEREST AND NOTICE OF THE THIRD EXTRAORDINARY GENERAL MEETING IN 2020

INTRODUCTION

Reference is made to the announcement of the Company dated 28 October 2020 in relation to, inter alia, the entering into of the Subscription Agreement and the Subscription.

* For identification purpose only

5 LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things, further information relating to the Subscription Agreement and the Subscription, which includes (i) a letter of recommendation from the Independent Board Committee to the Independent Shareholders regarding the Subscription Agreement and the Subscription; (ii) a letter of advice by the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders regarding the Subscription Agreement and the Subscription; (iii) other information as required to be disclosed under the Listing Rules; and (iv) the notice of the EGM.

DISCLOSEABLE TRANSACTION AND CONNECTED TRANSACTION IN RELATION TO THE DEEMED ACQUISITION OF EQUITY INTEREST Principal Terms and Conditions Precedent of the Subscription Agreement Date 28 October 2020

Parties (a) Xiamen Port Development as subscriber;

(b) Xiamen Sunstone as issuer; and

Subject matter Xiamen Port Development to subscribe in cash the 8,854,000 new shares in Xiamen Sunstone to be issued and allotted to it. Assuming that save for the Subscription there will be no change in the issued share capital of Xiamen Sunstone during the period between the date of the Subscription Agreement and the completion of the industrial and commercial registration changing procedures following the Subscription Completion, the Subscription Shares shall represent 8.10% of the enlarged total issued share capital of Xiamen Sunstone immediately after the Subscription Completion.

The Subscription Shares, when issued, will rank pari passu in all respects among themselves and with the shares in issue of Xiamen Sunstone on the date of issue of the Subscription Shares.

Consideration The consideration of RMB129,507,458 for the Subscription Shares was determined by Xiamen Port Development, Xiamen Sunstone and XRBG in good faith after arm’s length negotiation with reference to (i) the appraised value of the entire equity interest of Xiamen Sunstone of RMB1,462,700,000 as at the Benchmark Assessment Date appraised by the PRC Qualified Valuer and as approved by Xiamen SASAC, by adopting an income approach; (ii) the net asset value of Xiamen Sunstone of RMB691,053,867 as at 31 December 2019 as audited by the PRC Qualified Auditors pursuant to the Chinese Enterprise Accounting Standards; (iii) the conditions of the operating assets, as well as the profitability and funding needs of Xiamen Sunstone.

The valuation report of Xiamen Sunstone is set out in Appendix I to this circular.

Upon the Subscription Completion, out of the Subscription Consideration, RMB8,854,000 and RMB120,653,458 will be applied to the registered capital (on the basis of the nominal value per

6 LETTER FROM THE BOARD

Subscription Share at RMB1 and the issue price at approximately RMB14.63 per Subscription Share) and the capital reserve of Xiamen Sunstone respectively.

Payment terms Within 10 working days after notice by Xiamen Sunstone pursuant to the Subscription Agreement, Xiamen Port Development shall by way of bank transfer pay the Subscription Consideration in a lump-sum to Xiamen Sunstone. It is currently intended that the Subscription Consideration will be funded by RMB129,507,458 out of the proceeds from the Equity Transfer at RMB129,580,000. According to the current consensus of the parties to the Subscription Agreement, the Subscription will only be implemented after the Equity Transfer Completion.

The valuation report of the Target Company is set out in Appendix II to this circular, solely for reference purposes only.

Conditions precedent and supplemental The Subscription shall be subject to, among other things, the agreement satisfaction of the following conditions (all could not be waived, save for part of condition precedent numbered (iv) which may be waived by the unanimous agreement of the parties):

(i) the approval of the Subscription by the internal decision making body of Xiamen Sunstone;

(ii) the approval of the Subscription by the internal decision making body of Xiamen Port Development;

(iii) the approval of the Subscription by the Board and the Independent Shareholders at the EGM;

(iv) no existence of any prohibition or restriction on any party to complete the issue and subscription of the Subscription Shares under law, regulations or antecedent undertakings; and

(v) the approval of the matters related to the Subscription by Xiamen SASAC.

As at the Latest Practicable Date, (a) conditions precedent numbered (i), (ii) and (v) have been fulfilled; and (b) none of the parties has intention to waive any of the remaining conditions precedent.

In addition, the parties may separately enter into written supplemental agreement(s) for the need of the actual execution of the Subscription Agreement. The Company will promptly issue further announcement(s) as and when required pursuant to the Listing Rules in this regard.

Accrued profit arrangements Subsequent to the Subscription Completion, Xiamen Port Development shall be entitled to share the unallocated accrued profits of Xiamen Sunstone prior to the Subscription with other existing shareholders of Xiamen Sunstone on a pro-rata basis. In this regard, Xiamen Sunstone has undertaken that, during the period between the date of the Subscription Agreement and the completion of the industrial and commercial registration changing procedures following

7 LETTER FROM THE BOARD

the Subscription Completion, (i) it will not resolve to approve or conduct any form of profit allocation involving the interest of the shareholders; and (ii) save for the Subscription, no change will be made to the registered capital or the share capital structure of Xiamen Sunstone.

Completion The completion date of the Subscription shall fall on the date of payment of the Subscription Consideration by Xiamen Port Development, from thereon Xiamen Port Development shall entitled to the shareholders’ rights and perform the shareholders’ obligation in accordance with its equity proportion, and shall be entitled to nominate one director in accordance with the requirements under the new articles of Xiamen Sunstone. Xiamen Sunstone shall, within 15 working days from the completion date of the Subscription, complete the changing procedures regarding the Subscription (including the change of the industrial and commercial registration for the change of shareholders and the members of the board for the new term) or the filing procedures.

Assuming that save for the Subscription there will be no change in the issued share capital of Xiamen Sunstone between the date of the Subscription Agreement and the completion of the industrial and commercial changing registration following the Subscription Completion, the equity interest of Xiamen Sunstone will be owned by XRBG as to 75.74%, XPDC as to 12.07%, Xiamen Port Development as to 8.10%, the Individual Shareholders as to 3.66% and XRBM as to 0.43%, as XRBM will also subscribe for 466,000 new shares to be issued by Xiamen Sunstone as a pre-IPO internal restructuring transaction no later than the Subscription Completion.

Lock-up The Subscription Shares, once issued, will not be subject to any lock-up restriction at any time after the Subscription Completion.

Valuation of Xiamen Sunstone and the Target Company As the valuation of Xiamen Sunstone and the Target Company was prepared by the PRC Qualified Valuer based on an income approach, the valuation as set out in the relevant valuation reports is regarded as a profit forecast under Rule 14.61 of the Listing Rules and was based on certain key assumptions including, without limitation: (i) the assets to be valued are being transacted and the professional valuer simulates the market for appraisal according to the transaction conditions of the assets to be valued; (ii) the assets can be traded freely in a perfectly competitive market, the value of which depends on the value judgement of independent buyers and sellers under certain market demand and supply conditions; (iii) the operating entity to be valued will be operated as a going concern and will not cease or terminate to operate in the foreseeable and predictable future; (iv) there would be no material change to the prevailing political, legal, market or economic conditions in the PRC or other countries or areas which has a material impact on the business of the unit and its subsidiaries to be assessed;

8 LETTER FROM THE BOARD

(v) there would be no force majeure events or unpredictable factors to severely interrupt the operation and business of the unit and its subsidiaries to be assessed; (vi) the operation and management team of the unit and its subsidiaries to be assessed are diligent and there would be no material change to the existing scope of business, and its internal control system is effective and complete with sufficient and appropriate risk management measures; (vii) the primary information and financial information are true, accurate and complete, and the title of the assets under assessment are clear, legal and complete and are vested to the unit and its subsidiaries to be assessed; and (viii) the unit and its subsidiaries to be assessed are in full compliance of prevailing national and local laws and regulations and all licences, permits, consents and other legal or administrative authorisations issued by the relevant local and national governmental authorities and organisations necessary for its use of assets and operation are valid and effective in use as at the benchmark assessment date.

According to the valuation reports of Xiamen Sunstone and the Target Company, the respective appraised value of each of their entire equity interest as at the Benchmark Assessment Date by adopting the income approach and the asset-based approach are as follows (all in RMB): Xiamen Target Sunstone Company By income approach ...... 1,462,700,000 136,400,000 By asset-based approach ...... 1,201,861,400 132,232,000

As set out in the valuation report of Xiamen Sunstone, there is a difference of RMB260,838,600 between the valuation results of the entire equity interest of Xiamen Sunstone by adopting the income approach and the asset-based approach respectively, representing approximately 17.8% of the appraised value of the entire equity interest of Xiamen Sunstone. The Board understands from the PRC Qualified Valuer that the main reason for such discrepancy is that the assessment mentality of the asset-based approach is to reflect the replacement cost of the existing assets of an enterprise by first aggregating the appraised values of its asset and then deducting the appraised values of its liabilities, while the consideration of the income approach is to reflect the present quantitative value of the future comprehensive profitability of the entire assets of an enterprise after taken into account of intangible factors that may significantly affect its future income, such as production techniques, asset condition, operation and management capability, sale and distribution network and goodwill.

Xiamen Sunstone is the leading corporation in the concrete industry in Xiamen and Fujian Province and hence enjoys a competitive edge in the production of commodity concrete and

9 LETTER FROM THE BOARD manufacturing of cement and cement products in the local and provincial markets. The Board understands from the PRC Qualified Valuer that as (i) the operation, management and business performance of Xiamen Sunstone have steadily carried out year-by-year; (ii) the net profits of Xiamen Sunstone have demonstrated a significant upward trend over the last three years with the historical gross profit margin of approximately 16.6% for 2019 and with a projected average gross profit margin at approximately 16.7% for the commodity cement business from 2020 to 2024; and (iii) the main source of revenue and expected annual income of Xiamen Sunstone are recurring and are relatively stable, predictable and quantifiable with an expected growth rate of the operating revenue at approximately 0.7% to 2.7% per annum from 2020 to 2024 with a compound annual growth rate of about 1.7% and with no growth for the subsequent years until perpetual for the sake of prudent, the PRC Qualified Valuer considered that the adoption of the income approach (with a discount rate projected for future cash inflow at 12.18% after taken into account of certain relevant factors which are in line with PRC market practice as further elaborated in the letter from the Independent Financial Adviser set out on pages 20 to 36 of this circular) over the asset-based approach could better reflect the intrinsic value of Xiamen Sunstone in an objective manner and therefore the Board considers that (i) the above assumptions, considerations and projections by the PRC Qualified Valuer are fair and reasonable and are in line with the prevailing PRC market practice; and (ii) it is appropriate to adopt the income approach for the valuation of Xiamen Sunstone.

Waiver from the Stock Exchange Given that the Target Company is a non wholly-owned subsidiary of the Company as at the date of the Equity Transfer Agreement and hence the valuation of which for the Disposal constitutes a profit forecast under Rule 14.61 of the Listing Rules and shall be subject to the requirements under Rule 14.62 of the Listing Rules, the Company has applied for, and the Stock Exchange has granted a waiver from strict compliance of the requirements under Rules 14.60A, 14.62(2), 14.62(3) and Paragraph 29(2) of Appendix 1B of the Listing Rules regarding the valuation of the Target Company based on the following grounds: (i) under PRC regulations, the Equity Transfer constitutes a disposal or transfer of state- owned assets in Xiamen which requires a valuation conducted by a qualified PRC valuer as approved by Xiamen SASAC and hence the valuation report of the Target Company has to be issued as a mandatory requirement for the Equity Transfer and was therefore prepared solely by the PRC Qualified Valuer to fulfil this strict legal requirement to discharge the Group’s passive responsibility and was not made of its own initiative; (ii) the Group is not, and was not, involved in the preparation of the valuation report of the Target Company, save for providing certain historical financial information in respect of the Target Company to the PRC Qualified Valuer for their preparation of the said valuation report, which was a completely independent work done by the PRC Qualified Valuer with any additional input, instruction or guidance of any nature from any member of the Group; (iii) upon completion of the Equity Transfer and the Subscription, the Target Company will cease to be a subsidiary of the Group and therefore their results would not be consolidated with the Group. In addition, the Company’s 8.1% indirect equity interest in the Target Company via Xiamen Sunstone upon completion of the Equity Transfer and the Subscription as a whole would be insignificant to the economic and financial scale of the Group;

10 LETTER FROM THE BOARD

(iv) the PRC Qualified Valuer was introduced and recommended by Xiamen Sunstone for the preparation of the valuation of the Target Company for consistency purposes and was jointed appointed by Xiamen Sunstone and the Company with a fee split on an arm’s length basis based on the equity interest held by each parent company in the Target Company; and (v) in determining the Equity Transfer Consideration, the Board has considered other factors besides the valuation of the Target Company, including without limitation the net asset value of the Target Company.

For the avoidance of doubt, the abovementioned waiver does not applicable to the valuation of Xiamen Sunstone as it is not a subsidiary of the Company as at the date of the Subscription Agreement and will not become a subsidiary of the Group after the Subscription Completion.

Information of Xiamen Sunstone Xiamen Sunstone was established in the PRC in September 2003 and is principally engaged in, inter alia, (i) production of commodity concrete; and (ii) manufacturing of cement, cement products and building materials. As at the date of this circular, its equity interest is owned by XRBG as to 82.8%, XPDC as to 13.2% and the Individual Shareholders as to 4.0%.

According to the audited consolidated financial statements of Xiamen Sunstone which were prepared pursuant to the Chinese Enterprise Accounting Standards, (i) the consolidated net asset value of Xiamen Sunstone as at 31 December 2019 amounted to approximately RMB872,614,151; and (ii) the profits (both before and after taxation) of Xiamen Sunstone for the two years ended 31 December 2018 and 2019 are as follows:

For the year ended For the year ended 31 December 2018 31 December 2019 (in RMB) (in RMB) Profits before taxation ...... 117,371,651 208,090,474 Profits after taxation ...... 92,345,503 167,099,345

The original cost of the equity interests currently held by XRBG, XPDC and the Individual Shareholders amount to their respective aggregate capital contributions made into Xiamen Sunstone since the establishment of Xiamen Sunstone, which were approximately RMB82,800,000, RMB13,200,000 and RMB4,000,000. The Board is of the view that such original acquisition costs incurred by XRBG, XPDC and the Individual Shareholders have no relevancy to the determination of the Subscription Consideration.

Information of the Target Company The Target Company was established in the PRC in October 1995 and is principally engaged in, inter alia, manufacturing, processing and wholesale of cement, cement products and building materials. As at the date of this circular, its equity interest is owned by Xiamen Port Development as to 95% and XRBM as to 5%.

According to the audited consolidated financial statements of the Target Company which were prepared pursuant to the Chinese Enterprise Accounting Standards, (i) the consolidated net asset value of the Target Company as at 31 December 2019 amounted to approximately RMB128,839,818; and (ii)

11 LETTER FROM THE BOARD the profits (both before and after taxation) of the Target Company for the two years ended 31 December 2018 and 2019 are as follows: For the year ended For the year ended 31 December 2018 31 December 2019 (in RMB) (in RMB) Profits before taxation ...... 4,135,247 7,369,657 Profits after taxation ...... 3,856,102 5,584,210

Changes in Shareholding Structure of Xiamen Sunstone Assuming that save for the Subscription there will be no change in the issued share capital of Xiamen Sunstone between the date of the Subscription Agreement and the completion of the industrial and commercial changing registration following the Subscription Completion, the changes in the shareholding structures of Xiamen Sunstone as a result of the Subscription will be as follows:

As at the date of this Immediately after announcement Subscription Completion Number of shares % Number of shares % XRBG ...... 82,800,000 82.80 82,280,000 75.74 XPDC ...... 13,200,000 13.20 13,200,000 12.07 Xiamen Port Development ...... — — 8,854,000 8.10 Individual Shareholders ...... 4,000,000 4.00 4,000,000 3.66 XRBM ...... — — 466,000 0.43 Total: ...... 100,000,000 100.00 109,320,000 100.00

Financial Effect of the Equity Transfer and the Subscription Upon the Equity Transfer Completion and the Subscription Completion, (i) the entire equity interest of the Target Company will be owned by Xiamen Sunstone as XRBM will also transfer its 5% equity interest in the Target Company to Xiamen Sunstone as a pre-IPO internal restructuring transaction no later than the Equity Transfer Completion and therefore the Target Company will cease to be a subsidiary of the Group; and (ii) Xiamen Sunstone will remain as a non wholly-owned subsidiary of XRBG and its equity interest upon the Subscription Completion will be owned by XRBG as to 75.74%, XPDC as to 12.07%, Xiamen Port Development as to 8.10%, the Individual Shareholders as to 3.66% and XRBM as to 0.43%, as XRBM will also subscribe for 466,000 new shares to be issued by Xiamen Sunstone as another pre-IPO internal restructuring transaction no later than the Subscription Completion.

The Group expects to recognise a gain of approximately RMB32,880,000 as a result of the Equity Transfer before deduction of relevant expenses of approximately RMB388,500 arising therefrom to be incurred by Xiamen Port Development, representing the difference between the Equity Transfer Consideration and the carrying amount of the net asset value attributed to the Target Equity of approximately RMB96,704,243 as at 31 December 2019. It is currently intended that RMB129,507,458 out of the proceeds from the Equity Transfer at RMB129,580,000 will be entirely applied to fund the Subscription Consideration.

12 LETTER FROM THE BOARD

The simplified shareholding structure before and after the Equity Transfer Completion and the Subscription Completion is illustrated below:

Before the Equity Transfer Completion and the Subscription Completion

Xiamen SASAC

100% 100%

Xiamen Port Holding XRBG

68.32% 100%

The Company XPCG

61.89% 100% Individual XPDC Shareholders

13.2% 4.0% 82.8% 100% Xiamen Port Development Xiamen Sunstone XRBM

95% 5%

The Target Company

After the Equity Transfer Completion and the Subscription Completion

Xiamen SASAC

100% 100%

Xiamen Port Holding XRBG

68.32% 100%

The Company XPCG

61.89% 100% 100% Individual Xiamen Port XPDC Shareholders XRBM Development

8.10% 12.07% 3.66% 75.74% 0.43%

Xiamen Sunstone

100%

Target Company

13 LETTER FROM THE BOARD

Reasons for and benefits of the entering into of the Equity Transfer Agreement and the Subscription Agreement Given that the Target Company (which is a non wholly-owned subsidiary of the Group) and Xiamen Sunstone are both involving in the business of manufacturing, production and sale of commodity concrete and other cement-related products principally conducted in the region of Xiamen, the Board is of the view that the Equity Transfer and Subscription as a whole would in effect integrate the Target Company into Xiamen Sunstone and provide the following benefits to the Group:

A. Optimisation of investment structure and financial performance Given that (i) the Group expects to recognise a gain of approximately RMB32,880,000 from the Equity Transfer before deduction of relevant expenses arising therefrom to be incurred by Xiamen Port Development; and (ii) the Target Company’s profitability is lower than Xiamen Sunstone as the average net asset rates of return of the Target Company and Xiamen Sunstone for the three years between 2017 and 2019 amounts to approximately 5.5% and approximately 13.8% respectively, and therefore the profitability of the Target Company is lower than Xiamen Sunstone, the Board is of the view that, through the abovementioned integration, the Group expects to enhance its investment return and is able to secure a foreseeable and more stable source of income in reliance on the superior bargaining power of Xiamen Sunstone in Xiamen based on its sound, valuable and local hands-on commercial experience and significant economies of scale, as well as beneficial to the Group to further pool its resources for developing port-related business.

B. Enhancement of business competitiveness of the concrete and cement-related products The Group and XRBG intend to utilise Xiamen Sunstone as a unified platform to solidify its market position as the leading corporation in the concrete industry in Xiamen and Fujian Province and hence further improve its overall operating efficiency and competitiveness in the local and periphery commodity concrete and cement-related product market through optimisation of business structure and supply of quality and cost-effective products via reasonable resource integration and deployment in order to expand the concrete-related business in joint effort.

C. Obtaining future listing dividend of Xiamen Sunstone and promoting asset securitisation Xiamen Sunstone is planning its initial public offering and has been entered the pre-listing tutoring period since July 2018. In the event of the successful listing of Xiamen Sunstone, the Group could, by way of the Equity Transfer and Subscription, dispose of the Target Company (which has a lower profitability than Xiamen Sunstone) in exchange for its role as a pre-IPO strategic investor of Xiamen Sunstone so as to obtain the equity interest premium income that may be generated after the successful listing of Xiamen Sunstone in the future for promoting the asset securitisation of the members of the Group. To the best of the Board’s knowledge, information and belief, having made all reasonable enquiries, Xiamen Sunstone intends to strive for the lodging of a formal listing application at the China Securities Regulatory Commission by end of 2021.

The Directors (including all the independent non-executive Directors) have approved the entering into of the Subscription Agreement and the Subscription contemplated thereunder. Despite the

14 LETTER FROM THE BOARD

Equity Transfer and the Subscription as a whole shall be regarded as an one-off corporate restructuring exercise which would not fall within the ordinary and usual course of business of the Group, the Directors have considered the terms of the Subscription Agreement and are of the view that the same are on normal commercial terms, are fair and reasonable and are in the interests of the Group and the Shareholders as a whole.

Since (i) Mr. Cai Liqun and Mr. Chen Zhaohui, each being a deputy general manager of Xiamen Port Holding; (ii) Mr. Chen Zhiping, being the chairman of Xiamen Port Holding; (iii) Mr. Fu Chengjing, being a deputy general manager and the chief accountant of Xiamen Port Holding; (iv) Mr. Huang Zirong, being the chief engineer of Xiamen Port Holding, and (v) Ms. Bai Xueqing, being a deputy general manager of Xiamen Port Holding, are considered to have a material interest in the Subscription Agreement, each of them is required to abstain, and has abstained, from voting on the resolutions passed by the Board for approving the Subscription Agreement and the Subscription contemplated thereunder as required under the Listing Rules and the applicable rules and regulations.

Listing Rules implications Since (i) Xiamen Port Holding is the controlling shareholder of the Company and XPDC is its wholly-owned subsidiary and therefore both are connected persons of the Company under the Listing Rules; (ii) XPDC is a substantial shareholder of Xiamen Sunstone; and (iii) the highest applicable Relevant Ratio in respect of the Subscription is more than 5% but less than 25%, the Subscription constitutes (a) a discloseable transaction of the Company as a deemed acquisition of equity interest in Xiamen Sunstone from its existing shareholders and is subject to the requirements for notification and announcement under Chapter 14 of the Listing Rules; and (b) a connected transaction of the Company by virtue of Rule 14A.28 of the Listing Rules and is subject to the requirements for notification, announcement and approval by the Independent Shareholders at the EGM.

Information of the parties The Group is the largest port terminal operator in Xiamen, the PRC, and is also the only group providing full-scale port integrated logistics services in Xiamen. The Group is principally engaged in, inter alia, (i) container loading and unloading and storage for international and domestic trade; (ii) bulk/general cargo loading and unloading and storage for international and domestic trade; and (iii) port integrated logistics services, which mainly include shipping agency, tallying, tugboat-assisted berthing and unberthing and port-related logistics in Xiamen.

Xiamen Port Development is principally engaged in the provision of the loading/unloading and storage of bulk/general cargo, port integrated logistics services (including shipping agency, tugboat services, transportation services, tallying services and other ancillary logistics services), trading services of commodities, as well as the sale of building materials in Xiamen.

Xiamen Port Holding is the controlling shareholder of the Company. It is principally engaged in, inter alia, (i) management and operation of certain state-owned assets; (ii) investment in different areas such as port, terminal, logistics, information, real estate, hotel, property, tourism and trading; (iii) providing financing; (iv) investment in financial institutions; (v) port development; (vi) environmental consultancy services in respect of sea pollution; (vii) information products development; and (viii) providing other port-related services. To the best of the Board’s knowledge, information and belief, having made all reasonable enquiries, the ultimate beneficial owner of Xiamen Port Holding is Xiamen SASAC.

15 LETTER FROM THE BOARD

XPDC is an indirect wholly-owned subsidiary of the Xiamen Port Holding held through XPCG (a wholly-owned subsidiary of Xiamen Port Holding), which is principally engaged in, inter alia, (i) comprehensive land development; (ii) development and construction management of ports, roads and ancillary works; (iii) sale of building materials; and (iv) project construction management technical consultation, etc.

XRBG is a state-owned corporation established in Xiamen, which is principally engaged in, inter alia, (i) operation and management of authorised state-owned assets; (ii) operation and management of the construction and post-construction onshore and offshore large-scale and medium- scale bridges, intermediate or high-grade highways and roads, tunnels and ancillary works; (iii) construction and operation of high-speed railways and urban rail transits and other infrastructure projects; (iv) land development and construction; and (v) operation of real estate, etc. To the best of the Board’s knowledge, information and belief, having made all reasonable enquiries, the ultimate beneficial owner of XRBG is Xiamen SASAC.

XRBM is a wholly-owned subsidiary of XRBG, which is principally engaged in, inter alia, wholesale of a wide range of commodities (including, without limitation, metal materials, mechanical and electronic equipment, instrumentations and building materials).

The Individual Shareholders are management-level employees of Xiamen Sunstone who were invited to invest as shareholders.

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, Xiamen Sunstone, XRBG and XRBM, together with their respective ultimate beneficial owners, as well as the Individual Shareholders, are not connected persons of the Company and are third parties independent of the Company and its connected persons.

Independent Board Committee and the Independent Financial Adviser The Board has established the Independent Board Committee comprising all the independent non-executive Directors to consider and advise the Independent Shareholders as to whether the Subscription is conducted in the ordinary and usual course of business of the Company, and whether the terms of the Subscription Agreement and the Subscription contemplated thereunder are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole. A letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on pages 18 to 19 of this circular.

The Board has appointed First Shanghai as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the Subscription is conducted in the ordinary and usual course of business of the Company, and whether the terms of the Subscription Agreement and the Subscription contemplated thereunder are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole. A letter from First Shanghai containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 20 to 36 of this circular.

EGM A notice convening the EGM to be held at 9:00 a.m. on Thursday, 10 December 2020 at 23rd Floor, Conference Room, No. 31 Donggang North Road, Xiamen, the PRC together with the proxy

16 LETTER FROM THE BOARD form were issued and despatched to the Shareholders in accordance with the Listing Rules. At the EGM, among other things, resolutions will be proposed to consider, and if thought fit, the Subscription Agreement and the Subscription contemplated thereunder. Pursuant to Rule 13.39(4) of the Listing Rules, voting at the EGM will be conducted by poll. In addition, pursuant to Rule 14A.36 of the Listing Rules, Xiamen Port Holding and its close associates, which in aggregate hold 1,862,464,000 Shares (representing approximately 68.32% of the total issued Shares as at the Latest Practicable Date), will abstain from voting on the relevant resolution(s) at the EGM.

A notice convening the EGM is set out in this circular.

The proxy form for use at the EGM is enclosed herewith. Whether or not you are able to attend the EGM, you are requested to complete and return as soon as possible the proxy form in accordance with the instructions printed thereon but in any event no later than 24 hours before the time fixed for holding the EGM or any adjournment thereof (as the case may be). Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked.

RECOMMENDATION The Directors (including the independent non-executive Directors) consider that the Subscription Agreement and the Subscription contemplated thereunder are in the best interest of the Company and the Shareholders as a whole. Accordingly, the Directors (including the independent non-executive Directors) recommend the Shareholders to vote in favour of the relevant resolutions as set out in the notice of the EGM.

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

Yours faithfully, By order of the Board Xiamen International Port Co., Ltd Cai Changzhen Company Secretary

17 LETTER FROM THE INDEPENDENT BOARD COMMITTEE

(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 3378)

24 November 2020 To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION AND CONNECTED TRANSACTION IN RELATION TO THE DEEMED ACQUISITION OF EQUITY INTEREST

We refer to the circular of the Company dated 24 November 2020 (the “Circular”) of which this letter forms part. Capitalised terms defined in this letter shall have the same meaning as those defined in the Circular unless otherwise specified.

We have been appointed by the Board to form the Independent Board Committee to consider the terms of the Subscription Agreement and advise the Independent Shareholders whether, in our opinion, the terms of the Subscription Agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. First Shanghai has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

We wish to draw your attention to (i) the “Letter from the Board” set out on pages 5 to 17 of the Circular which contains, among others, information about the Subscription Agreement; (ii) the letter from First Shanghai set out on pages 20 to 36 of the Circular to the Independent Board Committee and the Independent Shareholders which contains its advice to us in relation to the Subscription Agreement and the Subscription contemplated thereunder; and (iii) additional information set out in the appendices to the Circular.

Having considered, among other matters, the advice of First Shanghai as stated in its letter of advice, we are of the view that despite that the Subscription shall be regarded as an one-off corporate restructuring exercise which would not fall within the ordinary and usual course of business of the Group, the terms of the Subscription Agreement and the Subscription contemplated thereunder are still on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

* For identification purpose only

18 LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution(s) to be proposed at the EGM to approve the Subscription Agreement and the Subscription contemplated thereunder.

Yours faithfully, For and on behalf of The Independent Board Committee

Liu Feng Lin Pengjiu You Xianghua Jin Tao Ji Wenyuan Independent Independent Independent Independent Independent non-executive non-executive non-executive non-executive non-executive Director Director Director Director Director

19 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of the letter to the Independent Board Committee and the Independent Shareholders from First Shanghai setting out their opinion regarding the proposed Subscription pursuant to the Subscription Agreement for the purpose of inclusion in this circular.

First Shanghai Capital Limited 19th Floor Wing On House 71 Des Voeux Road Central Hong Kong

24 November 2020

To the Independent Board Committee and the Independent Shareholders

Xiamen International Port Co., Ltd No. 439, Gangnan Road Haicang District Xiamen City Fujian Province China

Dear Sirs,

DISCLOSEABLE TRANSACTION AND CONNECTED TRANSACTION IN RELATION TO THE DEEMED ACQUISITION OF EQUITY INTEREST

INTRODUCTION

We refer to our engagement as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the proposed Subscription pursuant to the Subscription Agreement, details of which are set out in a circular dated 24 November 2020 (the “Circular”) to the Shareholders, of which this letter forms part. Terms used in this letter shall have the same meanings as those defined in the Circular unless the context requires otherwise.

On 28 October 2020, Xiamen Port Development (a non-wholly owned subsidiary of the Company) has concurrently entered into (i) the Equity Transfer Agreement with Xiamen Sunstone, pursuant to which Xiamen Port Development has agreed to transfer its entire equity interest in the Target Company to Xiamen Sunstone at a cash consideration of RMB129,580,000; and (ii) the Subscription Agreement with Xiamen Sunstone and XRBG, pursuant to which Xiamen Port Development has agreed to subscribe for, and Xiamen Sunstone has agreed to issue and allot the Subscription Shares at a cash consideration of RMB129,507,458.

LISTING RULES IMPLICATIONS Since (i) Xiamen Port Holding is the controlling shareholder of the Company and XPDC is its indirect wholly-owned subsidiary, and therefore both are connected persons of the Company under the

20 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Listing Rules; (ii) XPDC is a substantial shareholder of Xiamen Sunstone; and (iii) the highest applicable Relevant Ratio in respect of the Subscription is more than 5% but less than 25%, the Subscription constitutes (a) a discloseable transaction of the Company as a deemed acquisition of equity interest in Xiamen Sunstone from its existing shareholders and is subject to the requirements for notification and announcement under Chapter 14 of the Listing Rules; and (b) a connected transaction of the Company by virtue of Rule 14A.28 of the Listing Rules and is subject to the requirements for notification, announcement and approval by the Independent Shareholders at the EGM.

The Company is going to convene an EGM to consider and, if thought fit, to approve (by way of ordinary resolution(s) and voting will be by way of poll) the entering into of the Subscription Agreement and the Subscription contemplated thereunder. Pursuant to Rule 14A.36 of the Listing Rules, Xiamen Port Holding and its associates will abstain from voting on the relevant resolution(s) at the EGM.

THE INDEPENDENT BOARD COMMITTEE The Independent Board Committee, comprising the five independent non-executive Directors, namely Mr. Liu Feng, Mr. Lin Pengjiu, Mr. You Xianghua, Mr. Jin Tao and Mr. Ji Wenyuan, has been established to consider the Subscription Agreement and the transactions contemplated thereunder, and to advise the Independent Shareholders on the fairness and reasonableness in relation to the terms of the Subscription pursuant to the Subscription Agreement and the transactions contemplated thereunder.

As the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, our role is to give an independent opinion to the Independent Board Committee and the Independent Shareholders as to (i) whether or not the Subscription pursuant to the Subscription Agreement are conducted in the ordinary and usual course of business of the Group; (ii) whether or not the terms of the Subscription Agreement are on normal commercial terms, in the interests of the Company and the Shareholders as a whole, and fair and reasonable so far as the Independent Shareholders are concerned; and (iii) how the Independent Shareholders should vote in relation to the ordinary resolution(s) to be proposed for approving the Subscription Agreement and the transactions contemplated thereunder at the EGM.

OUR INDEPENDENCE Independent Shareholders should note that, within the past two years prior to the date of appointment of us for this present engagement, we were engaged as the independent financial adviser by the Company to provide independent financial advice to the Independent Board Committee and the Independent Shareholders for the following two occasions: (i) renewal of continuing connected transactions of the Company as detailed in the circular of the Company dated 13 November 2018; and (ii) the discloseable transaction and connected transaction in relation to proposed Capital Increase Agreement (as defined therein) as detailed in the circular of the Company dated 31 August 2020.

Given (i) our independent role in that previous two engagements; (ii) none of the members of our parent group is a direct party to the Subscription Agreement; and (iii) our independent financial advisory fees for this present engagement in addition to the previous two engagements represented an

21 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER insignificant percentage of revenue of our parent group, we consider that the previous two engagements would not affect our independence to form our opinion in respect of the discloseable transaction and connected transaction to be contemplated under the Subscription Agreement.

BASIS OF OUR ADVICE

In formulating our opinion, we have relied on the information, facts and representations contained or referred to in the Circular and the information, facts and representations provided by, and the opinions expressed by the Directors, the Company and the management of the Group (the “Management”). We have assumed that all statements, information, facts, opinions and representations made or referred to in the Circular were true, accurate and complete at the time they were made and continued to be true, accurate and complete as at the date of the Circular.

We consider that we have (i) obtained all information and documents of the Group, Xiamen Sunstone and the Target Company relevant to an assessment of the fairness and reasonableness of the terms of the Subscription; (ii) researched the relevant market and other conditions and trends relevant to the pricing of the Subscription; (iii) reviewed the fairness, reasonableness and completeness of any assumptions or projections relevant to the Subscription; and (iv) reviewed the opinions and valuations relevant to the Subscription provided by the PRC Qualified Valuer, namely 廈門市大學資產評估土地房地產估價有限責任公司 (Xiamen Academic Asset Evaluation & Land and Real Estate Appraisal Co., Ltd.) who being a qualified and independent expert to undertake the asset appraisal works (the “Appraisal”) in the PRC, in respect of the appraised value attributable to the Xiamen Sunstone (“Appraised Value”) as at 31 December 2019 (the “Appraisal Report”), the summary of which is set out in Appendix I to the Circular, including reviewing the terms of engagement (having particular regard to the scope of work, whether the scope of work is appropriate to the opinion required to be given and any limitations on the scope of work which might adversely impact on the degree of assurance given by the experts’ reports, opinions or statements). Based on the foregoing, we confirm that we have taken all reasonable steps, which are applicable to the Subscription, as referred to in Rule 13.80 of the Listing Rules (including the notes thereto).

We consider that we have reviewed sufficient information, including financial information of the Subscription that is to be ultimately acquired by the Group, to reach an informed view and to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation. We have no reason to doubt the truth, accuracy and completeness of the statements, information, facts, opinions and representations provided to us by the Directors, the Company and the Management. The Directors have confirmed to us that no material facts have been omitted from the information supplied and opinions expressed and we have no reason to doubt that any relevant material facts have been withheld or omitted from the information provided and referred to in the Circular, or the reasonableness of the opinions and representations provided to us by the Group. All the Directors jointly and severally accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable enquiries, that, to the best of their knowledge, opinions expressed in the Circular have been arrived at after due and careful consideration and that there are no other facts not contained in the Circular the omission of which would make any statement in the Circular misleading. We have relied on such information and opinions and have not however, conducted any independent investigation into the business, financial conditions and affairs or the future prospects of the Group, Xiamen Sunstone, the Target Company and Xiamen Port Holding.

22 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

PRINCIPAL FACTORS AND REASONS CONSIDERED In arriving at our opinion and recommendation in relation to the Subscription pursuant to the Subscription Agreement, we have considered the following principal factors and reasons:

1. Background of the Group The Group is the largest port terminal operator in Xiamen City, Fujian Province, the PRC. It is also the only group providing full-scale port integrated logistics services in Xiamen City. The Group is principally engaged in, inter alia, (i) container loading and unloading and storage for international and domestic trade; (ii) bulk/general cargo loading and unloading and storage for international and domestic trade; (iii) port integrated logistics services, including shipping agency, tallying, tugboat- assisted berthing and unberthing and port-related logistics; as well as (iv) the manufacturing, processing and selling of building materials and the trading of merchandise, in Xiamen City. The H Shares have been listed on the Main Board of the Stock Exchange since 19 December 2005.

Xiamen Port Development is a joint stock limited company established in the PRC, whose A shares are listed on the Shenzhen Stock Exchange since April 1999 and is currently held as to 61.89% by the Company as at the Latest Practicable Date. It is principally engaged in the provision of the loading/unloading and storage of bulk/general cargo, port integrated logistics services (including shipping agency, tugboat services, transportation services, tallying services and other ancillary extended services), trading services of commodities, as well as the sale of building materials in Xiamen City.

In respect of financial performance of the Group, the Group’s revenue amounted to approximately RMB13,933.1 million for the financial year ended 31 December (“FY(s)”) 2019, representing an increase of approximately 7.9% as compared to that of approximately RMB12,916.8 million in the FY 2018; while its net profit amounted to approximately RMB668.8 million for the FY 2019, representing an increase of approximately 20.6% as compared to that of approximately RMB554.4 million in the FY 2018. The profit attributable to owners of the Company amounted to approximately RMB279.7 million for the FY 2019, representing an increase of approximately 14.3% as compared to that of approximately RMB244.8 million in the FY 2018 mainly due to the increase in revenue from its merchandise trading business.

2. Background of Xiamen Port Holding Xiamen Port Holding Xiamen Port Holding is a wholly state-owned enterprise established in the PRC, and the controlling shareholder of the Company holding 1,862,464,000 Shares, representing approximately 68.32% shareholding interest in the Company as at the Latest Practicable Date.

It is principally engaged in, inter alia, (i) management and operation of certain state-owned assets; (ii) investment in different areas such as port, terminal, logistics, information, real estate, hotel, property, tourism and trading; (iii) providing financing; (iv) investment in financial institutions; (v) port development; (vi) environmental consultancy services in respect of sea pollution; (vii) information products development; and (viii) providing other port-related services.

To the best of the Board’s knowledge, information and belief, having made all reasonable enquiries, the ultimate beneficial owner of Xiamen Port Holding is the Xiamen SASAC, which is the

23 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER authority for supervision and administration of state-owned assets in Xiamen City, Fujian Province, the PRC.

XPDC XPDC is an indirect wholly-owned subsidiary of the Xiamen Port Holding held through XPCG (a wholly-owned subsidiary of Xiamen Port Holding), which is principally engaged in, inter alia, (i) comprehensive land development; (ii) development and construction management of ports, roads and ancillary works; (iii) sale of building materials; and (iv) project construction management technical consultation, etc..

3. Reasons for and benefits of entering into the Subscription Agreement As mentioned in the “Letter from the Board” of the Circular (the “Board Letter”), given that the Target Company (which is a non-wholly-owned subsidiary of the Group) and Xiamen Sunstone are both involving in the business of manufacturing, production and sale of commodity concrete and other cement-related products principally conducted in the region of Xiamen, the Board is of the view that the Equity Transfer and the Subscription as a whole would in effect integrate the Target Company into Xiamen Sunstone and provide the following benefits to the Group:

A. Optimisation of investment structure and financial performance Given that (i) the Group expects to recognise a gain of approximately RMB32,880,000 from the Equity Transfer before deduction of relevant expenses arising therefrom to be incurred by Xiamen Port Development; and (ii) the Target Company’s profitability is lower than Xiamen Sunstone as the average net asset rates of return of the Target Company and Xiamen Sunstone for the three years between 2017 and 2019 amounted to approximately 5.5% and 13.8% respectively, and therefore the profitability of the Target Company is lower than Xiamen Sunstone, the Board is of the view that, through the abovementioned integration, the Group expects to enhance its investment return and is able to secure a foreseeable and more stable source of income in reliance on the superior bargaining power of Xiamen Sunstone in Xiamen based on its sound, valuable and local hands-on commercial experience and significant economies of scale, as well as beneficial to the Group to further pool its resources for developing port-related business.

C. Obtaining future listing dividend of Xiamen Sunstone and promoting asset securitisation Xiamen Sunstone is planning its initial public offering (“IPO”) and has been entered the pre-listing tutoring period since July 2018. In the event of the successful listing of Xiamen Sunstone, the Group could, by way of the Equity Transfer and the Subscription, dispose of the Target Company (which has a lower profitability than Xiamen Sunstone) in exchange for its role as a pre-IPO strategic

24 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER investor of Xiamen Sunstone so as to obtain the equity interest premium income that may be generated after the successful listing of Xiamen Sunstone in the future for promoting the asset securitisation of the members of the Group. To the best of the Board’s knowledge, information and belief, having made all reasonable enquiries, Xiamen Sunstone intends to strive for the lodging of a formal listing application at the China Securities Regulatory Commission by end of 2021.

The Directors (including all the independent non-executive Directors) have approved the entering into of the Equity Transfer Agreement and the Subscription Agreement and the transactions contemplated thereunder. Despite the Equity Transfer and the Subscription as a whole shall be regarded as a one-off corporate restructuring exercise which would not fall within the ordinary and usual course of business of the Group, the Directors have considered the terms of the Equity Transfer Agreement and the Subscription Agreement and are of the view that the same are on normal commercial terms, fair and reasonable and in the interests of the Group and the Shareholders as a whole.

Based on the above background information, we are of the view that it is commercially justifiable for conducting the Subscription by way of a one-off corporate restructuring exercise between the Group and Xiamen Sunstone, which is in the interests of the Group and the Shareholders as a whole, even though the Subscription itself is not conducted in the ordinary and usual course of business of the Group.

4. Background of the Target Company and Xiamen Sunstone

Set out below is the background information of each of the Target Company and Xiamen Sunstone contemplated under the Equity Transfer Agreement and the Subscription Agreement, respectively:

Subject companies The Target Company Xiamen Sunstone

Date of establishment : 24 October 1995 2 September 2003

Principal business activities : • manufacturing, • production of processing and commodity concrete; wholesale of cement, and cement products and building materials • manufacturing of cement, cement products and other building materials

Equity/ share-holding structure prior to the : • 95% by Xiamen Port • 82.8% by XRBG; Equity Transfer Completion/ Subscription Development, and Completion • 13.2% by XPDC; and • 5% by XRBM

• 4.0% by Individual Shareholders

25 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Subject companies The Target Company Xiamen Sunstone

Equity/ share-holding structure immediately : • 100% by Xiamen • 75.74% by XRBG; upon the Equity Transfer Completion/ Sunstone Subscription Completion • 12.07% by XPDC;

• 8.10% by Xiamen Port Development;

• 3.66% by Individual Shareholders; and

• 0.43% by XRBM

Audited consolidated profit before taxation for the FYs (in RMB)

2018 : 4,135,247 117,371,651

2019 : 7,369,657 208,090,474

Audited consolidated profit after taxation for the FYs (in RMB)

2018 : 3,856,102 92,345,503

2019 : 5,584,210 167,099,345

Audited consolidated net asset value (excluding minority interest) as at 31 December of the FYs (in RMB)

2018 : 104,228,754 719,213,773

2019 : 107,068,655 863,183,714

Audited net asset value at company level as at : 105,858,020 691,053,867 31 December 2019 (in RMB)

Appraised Value concluded in the respective : 136,400,000 1,462,700,000 Appraisal Report as at 31 December 2019 (in RMB)

Gain on revaluation arisen between the : 30,541,980 771,646,133 Appraised Value and the net asset value as (28.9% over the net asset (111.7% over the net asset at 31 December 2019 (in RMB) value) value)

Consideration (in RMB) : 129,580,000 129,507,458

Price-to-earning ratio (times) (Note) : 24.4 8.8 Note: The calculation of price-to-earning ratio is based on their respective Appraised Value to be divided by audited consolidated profit after tax for the latest full FY 2019.

In accordance with the requirements under the Law of the PRC on the State-owned Assets of Enterprises (《中華人民共和國企業國有資產法》), a minimum transfer price for the Equity Transfer

26 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER shall be reasonably determined on the basis of the appraised value approved by Xiamen SASAC as it is regarded as a transfer of state-owned assets.

5. Principal terms and conditions of the Subscription Agreement Background On 28 October 2020, Xiamen Port Development (a non-wholly owned subsidiary of the Company) has concurrently entered into (i) the Equity Transfer Agreement with Xiamen Sunstone, pursuant to which Xiamen Port Development has agreed to transfer its entire equity interest in the Target Company to Xiamen Sunstone at a cash consideration of RMB129,580,000; and (ii) the Subscription Agreement with Xiamen Sunstone and XRBG, pursuant to which Xiamen Port Development has agreed to subscribe for, and Xiamen Sunstone has agreed to issue the Subscription Shares at a cash consideration of RMB129,507,458.

As at the Latest Practicable Date, (i) the equity interest of the Target Company is owned by Xiamen Port Development as to 95% and XRBM (a wholly-owned subsidiary of XRBG) as to 5%; and (ii) the equity interest of Xiamen Sunstone is owned by XRBG as to 82.8%, XPDC (an indirect wholly-owned subsidiary of Xiamen Port Holding) as to 13.2% and the Individual Shareholders as to 4.0%.

Upon the Equity Transfer Completion and the Subscription Completion, (i) the entire equity interest of the Target Company will be owned by Xiamen Sunstone as XRBM will also transfer its 5% equity interest in the Target Company to Xiamen Sunstone as a pre-IPO internal restructuring transaction no later than the Equity Transfer Completion and therefore the Target Company will cease to be a subsidiary of the Group; and (ii) Xiamen Sunstone will remain as a non-wholly-owned subsidiary of XRBG and its equity interest upon the Subscription Completion will be owned by XRBG as to 75.74%, XPDC as to 12.07%, Xiamen Port Development as to 8.10%, the Individual Shareholders as to 3.66% and XRBM as to 0.43%, as XRBM will also subscribe for 466,000 new shares to be issued by Xiamen Sunstone as another pre-IPO internal restructuring transaction no later than the Subscription Completion.

Subject matter Xiamen Port Development will subscribe in cash for the 8,854,000 new shares in Xiamen Sunstone to be issued and allotted to it. Assuming that save for the Subscription, there will be no change in the issued share capital of Xiamen Sunstone during the period between the date of the Subscription Agreement and the completion of the industrial and commercial registration changing procedures following the Subscription Completion, the Subscription Shares shall represent 8.10% of the enlarged total issued share capital of Xiamen Sunstone immediately after the Subscription Completion.

The Subscription Shares, when issued, will rank pari passu in all respects among themselves and with the shares in issue of Xiamen Sunstone on the date of issue of the Subscription Shares.

27 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Subscription Consideration The Subscription Consideration of RMB129,507,458 for the Subscription Shares was determined by Xiamen Port Development, Xiamen Sunstone and XRBG in good faith after arm’s length negotiation with reference to the following: (i) the appraised value of the entire equity interest of Xiamen Sunstone of RMB1,462,700,000 as at the Benchmark Assessment Date appraised by the PRC Qualified Valuer and as approved by Xiamen SASAC, by adopting an income approach; (ii) the net asset value of Xiamen Sunstone of RMB691,053,867 at company level as at 31 December 2019 as audited by the PRC Qualified Auditors pursuant to the Chinese Enterprise Accounting Standards; and (iii) the conditions of the operating assets, as well as the profitability and funding needs of Xiamen Sunstone.

Upon the Subscription Completion, out of the Subscription Consideration, RMB8,854,000 and RMB120,653,458 will be applied to the registered capital (on the basis of the nominal value per Subscription Share at RMB1.00 and the issue price at approximately RMB14.63 per Subscription Share) and the capital reserve of Xiamen Sunstone respectively.

Basis for determination of the Subscription Consideration The Subscription Consideration is basically consistent with the Appraised Value attributable to the 8.10% of the enlarged shareholding interest to be subscribed for by Xiamen Port Development.

The Appraisal Value was eventually calculated and arrived at based on the income approach and the general industry standards recognised and adopted nationally, which was further verified and approved by Xiamen SASAC. The PRC Qualified Valuer has considered, but did not adopt, the asset- based approach for evaluating the value of Xiamen Sunstone in view of its business nature as being principally engaged in (i) production of commodity concrete; and (ii) manufacturing of cement, cement products and building materials in the PRC, instead of an asset-based company. As such, we concur with the PRC Qualified Valuer’s decision not to adopt the asset-based approach for the Appraisal, and rather consider that the income approach is an appropriate methodology used in the Appraisal for Xiamen Sunstone. Please refer to the Board Letter and the Appraisal Report as set out in Appendix I to the Circular for fuller details of the underlying bases and assumptions adopted therein.

According to the appraisal reports of each of Xiamen Sunstone and the Target Company, the respective appraised value of each of their entire equity interest as at the Benchmark Assessment Date by adopting the income approach and the asset-based approach are as follows:

Xiamen Target Sunstone Company RMB RMB By income approach ...... 1,462,700,000 136,400,000 By asset-based approach ...... 1,201,861,400 132,232,000 Deviation ...... 260,838,600 4,168,000

As set out in the Appraisal Report as set out in Appraisal I to the Circular, there is a difference of RMB260,838,600 between the valuation results of the entire equity interest of Xiamen Sunstone by

28 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER adopting the income approach and the asset-based approach respectively, representing approximately 17.8% of the appraised value of the entire equity interest of Xiamen Sunstone. The Board understands from the PRC Qualified Valuer that the main reason for such discrepancy is that the assessment mentality of the asset-based approach is to reflect the replacement cost of the existing assets of an enterprise by first aggregating the appraised values of its asset and then deducting the appraised values of its liabilities, while the consideration perspective of the income approach is to reflect the present quantitative value of the comprehensive future profitability of the entire assets of an enterprise after taken into account of intangible factors that may significantly affect its future income, such as production techniques, asset condition, operation and management capability, sale and distribution network and goodwill.

In addition, to the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, as at the Latest Practicable Date, (i) the houses and buildings with incomplete or defective valuation information (such as ownership) as identified in each of the appraisal reports of Xiamen Sunstone and the Target Company (the “Defective Properties”) are occupied by the respective entity as leased properties merely used as ancillary infrastructure or fixtures, which would have no material impact on the production and business operation of Xiamen Sunstone or Target Company; and (ii) there has not been any dispute with, or any title claim by, any third party against the landlords as to the Defective Properties, which might affect the continuous occupation of the Defective Properties by Xiamen Sunstone or the Target Company. Accordingly, the Board considers that the normal business operations of Xiamen Sunstone after the Subscription Completion (including the Target Group) would not be affected without such land use right certificates and building ownership certificates in respect of the Defective Properties. Based on such consideration, we concur with the Directors’ view in this regard.

Xiamen Sunstone is the leading corporation in the concrete industry in Xiamen and Fujian Province and hence enjoys a competitive edge in the production of commodity concrete and manufacturing of cement and cement products in the local and provincial markets. The Board understands from the PRC Qualified Valuer that as (i) the operation, management and business performance of Xiamen Sunstone have steadily carried out year-by-year; (ii) the net profits of Xiamen Sunstone have demonstrated a significant upward trend over the last three years; and (iii) the main source of revenue and expected annual income of Xiamen Sunstone are recurring and are relatively stable, predictable and quantifiable, the PRC Qualified Valuer considered that the adoption of the income approach over the asset-based approach could better reflect the intrinsic value of Xiamen Sunstone in an objective manner.

Based on our independent due diligence work performed as detailed below, we concur with the PRC Qualified Valuer’s consideration and final selection of valuation approach and methodology to be adopted in the Appraisal Report.

We have independently reviewed the Appraisal Report on Xiamen Sunstone and understood from the PRC Qualified Valuer regarding, among other things, the bases and assumptions made and the methodology adopted by the PRC Qualified Valuer in conducting the appraisal for the business value as well as major assets of Xiamen Sunstone.

During the course of our independent review on the Appraisal Report and further understanding from/enquiry with the PRC Qualified Valuer, we have not identified any major factors which cause us to doubt the fairness and reasonableness of the principal bases and assumptions adopted for the asset appraisal works in relation to the Appraisal Report.

29 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Income approach is a valuation approach which discounts the expected future revenue of the target enterprise/ assets into present value with specific discount rates for the purpose of determining its/ their values. The inherit value of the target enterprise/ assets (i.e. their future profitability) is the basis of the income approach. The PRC Qualified Valuer considers that income approach is the most appropriate method in valuing Xiamen Sunstone as income approach focuses on the economic benefits generated by the income producing capability of an enterprise, and discounts these benefits to its present value using a discount rate appropriate for the risks associated with realising those benefits. Under the income approach, the discounted cash flow (“DCF”) method was adopted.

When applying DCF method to estimate the present market value of Xiamen Sunstone, it is necessary to determine an appropriate discount rate for the enterprise and its assets under review. Based on our independent review on the Appraisal Report and understanding from the PRC Qualified Valuer, the “weighted average cost of capital” (“WACC”) model has been used as the discount rate in the Appraisal. WACC is mainly comprised of two components, namely the cost of equity and the cost of debt. As mentioned in the Appraisal Report and advised by the PRC Qualified Valuer, the cost of debt amounts to 4.9%, which was the long-term (over 5 years) lending rate as stipulated by the People’s Bank of China as at the Benchmark Assessment Date (i.e. 31 December 2019).

With respect to the cost of equity, we were given to understand that the “capital asset pricing model” (“CAPM”) was used by the PRC Qualified Valuer. We understand that the CAPM technique is widely accepted in the investment and financial analysis communities for the purpose of estimating an enterprise’s required rate of return on equity. According to the CAPM, the cost of equity is equivalent to the risk-free rate plus the enterprise-specific risk adjustment co-efficient plus a linear function of a measure of systematic risk (“Beta”) times the market risk premium for the PRC. Based on our discussion with the PRC Qualified Valuer, it has adopted the applicable risk-free rate of approximately 3.14%, which was equivalent to the yield to maturity rate of PRC government bonds with remaining maturity of over 10 years as at the Benchmark Assessment Date.

According to the PRC Qualified Valuer, Beta, being a measure of the relationship between risk and the aggregate market, was determined after considering comparable companies identified by the PRC Qualified Valuer on its best effort and unbiased selection basis. After discussing with the PRC Qualified Valuer, we understand that it had researched for three listed companies, namely 深圳市天地(集團)股份有限公司 (Shenzhen Universe Group Co., Ltd.) (stock code: 000023), 中建西部建設股份有限公司 (China West Construction Group Co., Ltd.) (stock code: 002302) and 重慶三聖實業股份有限公司 (Chongqing Sansheng Industrial Co., Ltd.) (stock code: 002742), which are engaged in the manufacturing construction material industry in the PRC, and consistent with our independent searching results from the Bloomberg data portal. We have interviewed the PRC Qualified Valuer to assess the fairness and reasonableness of the Beta, and concur with its view that the factors for determining the Beta used in the Appraisal are in line with market practice. As such, we are of the view that it is fair and reasonable to derive Beta from these peer companies. With the above determining factors, the PRC Qualified Valuer has finally determined the discount rate projected for future cash inflow in the Appraisal as 12.18% (which is calculated as: 81.66% x 14.09% + 18.34% x (1 – 25%) x 4.90% = 12.18%), which we consider to be appropriate, fair and reasonable.

We note that the PRC Qualified Valuer has considered and relied to a considerable extent on the financial forecast provided by Xiamen Sunstone when preparing the Appraisal. Based on the discussion with the PRC Qualified Valuer, it has believed that the forecast of those data is reasonable after considering the market trend of the industry and historical performance of Xiamen Sunstone. We

30 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER have interviewed with the PRC Qualified Valuer regarding the basis of projecting financial data of Xiamen Sunstone and other relevant assumptions. Pursuant to Rule 13.80 of the Listing Rules, in order to review and understand fairness, reasonableness and completeness the relevant assumptions and projections used in the Appraisal, we have performed the following steps: (i) discussed with the PRC Qualified Valuer and reviewed on the major items of the projection (including but not limited to the forecast operating revenue, operating costs, selling expenses and management expenses) provided by Xiamen Sunstone; (ii) reviewed the projection schedules built by the PRC Qualified Valuer and the related breakdowns; (iii) reviewed the audited financial statements and unaudited management accounts of Xiamen Sunstone for the two years ended 31 December 2019 and for the eight months ended 31 August 2020 and the related financial breakdowns; (iv) discussed with the PRC Qualified Valuer and reviewed on the industry trend of commodity concrete and construction materials in the PRC; and (v) reviewed other relevant bases and assumptions adopted in the Appraisal.

We have noted that (i) the historical growth rate of operating revenue of Xiamen Sunstone; (ii) the historical cost structure and growth trend of operating costs of Xiamen Sunstone; and (iii) the industry trend of commodity concrete and construction materials in the PRC supported the projection of operating revenue and operating costs of the Appraisal.

In view of the projection of operating revenue of Xiamen Sunstone, we understand the projection from the Appraisal is based on the estimation of the revenue amount substantially derived from sales of commodity comment products in its core business operation. For the projected growth rate, the PRC Qualified Valuer had made reference to the historical operating revenue and the future development plan of Xiamen Sunstone, and that the financial resources and business operation will continue to maintain as in current conditions. The growth rate of the operating revenue for the first few Years from 2020 to 2024 is expected to steadily increase by approximately 0.7% to 2.7% per annum with a compound annual growth rate (“CAGR”) of about 1.7%, while the same for the following years until perpetual is anticipated to be routine and stable with no growth for prudent sake.

The main operating costs of Xiamen Sunstone are the cost on purchasing raw materials for production of commodity cement products for its core business. In view of the operating costs, we understand that the projection from the Appraisal was calculated based on the projected operating revenue and a stable gross profit margin at an average of approximately 16.7% for the commodity cement business for the five Years from 2020 to 2024, which is basically consistent with the historical gross profit margin of around 16.6% for the Year 2019, and therefore we consider to be appropriate, fair and reasonable.

We have further reviewed the underlying calculation and understand that the selling expenses and management expenses of Xiamen Sunstone are mainly comprised of staff costs and other office expenses. The projection from the Appraisal is based on either (i) a stable growth rate; or (ii) a stable ratio of the operating income. Such projection is based on historical financial data of Xiamen Sunstone and the discussion with the management of Xiamen Sunstone. Staff costs are mainly comprised of staff wages, employee benefits, social security costs and housing provident fund costs. The components of projected selling costs and management costs are consistent with those of the historical records for the

31 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER past five Years from 2015 to 2019. Based on our review of the Appraisal Report and understanding from the PRC Qualified Valuer, the projected growth rate of selling expenses and management expenses was estimated based on a CAGR of around 2.3% and 2.5%, respectively, per annum with reference to the prevailing inflation rate.

Based on our independent researches for statistical information as extracted from the official websites of 中華人民共和國國家統計局 (The National Bureau of Statistics of China) at http://www.stats.gov.cn and https://data.stats.gov.cn, we noted that the overall consumer price index of the PRC as a whole and Xiamen City accounted for around 2.9% and 3.0%, respectively, in the Year 2019. On such basis, we consider that the projected annual growth rates/ CAGR in respect of Xiamen Sunstone’s operating revenue, operating costs, selling expenses and management expenses are realistic and prudent, and therefore fair and reasonable. After reviewing the historical financial data and discussion with the PRC Qualified Valuer, we believe that the growth of the components of the selling expenses and management expenses are relatively stable and correlated. As a result, we concur with the bases and assumptions adopted in the Appraisal to be fair and reasonable.

Based on our independent due diligence work performed as set out above, we are not aware of any factors which would cause us to doubt the fairness, reasonableness and completeness on the relevant bases and assumptions and projections used in the Appraisal.

Pursuant to Rule 13.80 of the Listing Rules, in order to assess the expertise and independence of the PRC Qualified Valuer regarding to the Appraisal, we have performed the following steps: (i) obtained and reviewed the terms of engagement (having particular regard to the scope of work, whether the scope of work is appropriate to the opinion required to be given and any limitations on the scope of work which might adversely impact on the degree of assurance given by the Appraisal Report); (ii) interviewed the PRC Qualified Valuer as to their current or prior relationships with the Company, and their respective shareholders; (iii) reviewed and discussed with the PRC Qualified Valuer on its qualifications and experience in relation to the preparation of the Appraisal; and (iv) enquired into the steps and due diligence measures taken by the PRC Qualified Valuer for conducting the Appraisal.

Based on our independent research from the public website of 中國證券監督管理委員會 (China Securities Regulatory Commission of the PRC) (the “CSRC”) at http://www.csrc.gov.cn, we noted that the PRC Qualified Valuer is one of the 70 qualified asset appraisal firms authorised by the CSRC and 中華人民共和國財政部 (the Ministry of Finance of the PRC) to perform asset appraisal works in the PRC. It has possessed sufficient qualifications and experience in valuing assets similar to that of Xiamen Sunstone for listed companies in the PRC and Hong Kong over the years. The PRC Qualified Valuer has also confirmed that except for its current engagement in respect of the Appraisal, it has no current or prior relationships with the Group, Xiamen Port Holding, Xiamen Sunstone or their respective equity/share-holders. As such, we are satisfied with the terms of engagement of the PRC Qualified Valuer and are not aware of any matters that would cause us to doubt the PRC Qualified Valuer’s expertise and independence in conducting the Appraisal.

Based on the due diligence work performed as set out above, we consider that we have made adequate assessment on the Appraisal in respect of the Appraisal Report and the PRC Qualified Valuer

32 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER pursuant to Rule 13.80 of the Listing Rules. During the course of our independent review on the Appraisal Report and further understanding from/enquiry with the PRC Qualified Valuer, we have not identified any major factors which cause us to doubt the fairness and reasonableness of the principal bases and assumptions adopted for the asset appraisal works in relation to the Appraisal Report. Nevertheless, Independent Shareholders should note that since the Appraisal involves various bases and assumptions, it may or may not accurately reflect the actual value of Xiamen Sunstone in the foreseeable future.

Taking into account that the Consideration is basically consistent with (i) the share of the Appraised Value under the Subscription, whereby the Appraisal is fairly and reasonably estimated by the PRC Qualified Valuer; and (ii) the pro-rata basis for calculating the consideration of RMB6,816,182 payable by XRBM (which is an independent third party) to subscribe for 0.43% shareholding interest in Xiamen Sunstone in exchange for its original 5% equity holding in the Target Company, we are of the opinion that the basis for determination of the Consideration is on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned, and in the interests of the Group and the Shareholders as a whole.

Comparison with other companies in the similar industry As mentioned above, both the Target Company and Xiamen Sunstone are involving in the business of manufacturing, production and sale of commodity concrete and cement-related products principally in the Xiamen region, whilst the primary aim of the Equity Transfer and the Subscription, in substance, is a corporate restructuring exercise for enhancing their future business development potential.

In order to further assess the fairness and reasonableness of determining the Subscription Consideration, we have independently researched from the Bloomberg data portal and identified certain companies which are principally engaged in the construction material industry whose shares are listed on the Shanghai/ Shenzhen Stock Exchange of the PRC (the “Comparables”). However, having reviewed the` financial information and market capitalisation of such Comparables, we consider that direct comparison in terms of P/E Ratio and/or price-to-book ratio with such construction material companies listed on the Shanghai/ Shenzhen Stock Exchange with much larger operating scale would not be meaningful, or even misleading, on the grounds that Xiamen Sunstone’s scale of operation are relatively limited in financial and geographical terms, which we consider it not directly comparable with other sizeable listed construction material companies. Furthermore, since Xiamen Sunstone is not an asset-based company, we consider that price-to-book ratio and asset-based valuation approach shall not be applicable to Xiamen Sunstone.

Nevertheless, it has been the general market practice/ perception that it is better to buy shares in companies with a lower P/E Ratio among companies in the same industry, because this means an investor is paying less for every dollar of earnings that he/ she receives. In that sense, a lower P/E Ratio is like a lower price tag, making it attractive to investors looking for a bargain.

For our present case, in considering whether determination of the Equity Transfer Consideration and the Subscription Consideration are fair and reasonable, we noted that the respective imputed P/E Ratios for the Target Company and Xiamen Sunstone are approximately 24.4 times and 8.8 times based on their latest audited consolidated financial statements for the FY 2019 and Appraised Values as at 31 December 2019, it may imply that the Group is utilising a less profitable company (i.e.

33 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER the Target Company) with a higher valuation in terms of P/E Ratio in exchange for a much more profitable and promising company (i.e. Xiamen Sunstone) with lower P/E Ratio at almost the same consideration which seems to be favourable to the Group on the basis that the PRC Qualified Valuer has applied the same valuation approach (i.e. income approach) in valuing the total enterprise value of each of the Target Company and Xiamen Sunstone at the same time. We advise the Independent Shareholders to compare the P/E Ratios thereunder between each other, while the difference in proportion of equity/ shareholding interests that are being transferred/ subscribed for therein is not directly relevant for consideration. Upon the Subscription Completion, the Target Equity (i.e. being the 95% equity interest in the Target Company) should have been transferred to Xiamen Sunstone. Since the Target Company had net profit of approximately RMB5.6 million for the FY 2019, the P/E Ratio attributable to Xiamen Sunstone by consolidating the financial results of the Target Company upon the Subscription Completion would slightly decrease to approximately 8.5 times as the earning base would have been enlarged.

Based on the above analysis and consideration, we are of the view that determination of the Subscription Consideration by making reference to the Appraised Value is an appropriate and reliable appraisal basis for Xiamen Sunstone.

Payment terms Within 10 working days after notice by Xiamen Sunstone pursuant to the Subscription Agreement, Xiamen Port Development shall by way of bank transfer pay the Subscription Consideration in a lump-sum to Xiamen Sunstone. It is currently intended that the Subscription Consideration will be fully funded by RMB129,507,458 out of the proceeds from the Equity Transfer at RMB129,580,000. According to the current consensus of the parties to the Subscription Agreement, the Subscription will be implemented after the Equity Transfer Completion.

We consider the payment terms are commercially practicable, fair and reasonable.

Conditions precedent and approvals The Subscription shall be subject to, among other things, the satisfaction of the following conditions (all could not be waived, save for part of condition precedent numbered (iv) below which may be waived by the unanimous agreement of the parties): (i) the approval of the Subscription by the internal decision making body of Xiamen Sunstone; (ii) the approval of the Subscription by the internal decision making body of Xiamen Port Development; (iii) the approval of the Subscription by the Board and the Independent Shareholders at the EGM; (iv) no existence of any prohibition or restriction on any party to complete the issue and subscription of the Subscription Shares under law, regulations and antecedent undertakings; and (v) the approval of the matters related to the Subscription by Xiamen SASAC.

As at the Latest Practicable Date, (a) conditions precedent numbered (i), (ii) and (v) have been fulfilled; and (b) none of the parties has intention to waive any other of the above-mentioned conditions precedent.

34 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Others Please refer to the Board Letter for other immaterial terms of the Subscription Agreement.

Based on the above analysis and consideration, we are of the view that the Subscription contemplated under the Subscription Agreement are on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned, and are in the interests of the Company and the Shareholders as a whole.

6. Possible financial effects of the Subscription on the Group Earnings Upon the Subscription Completion, other than the immaterial relevant expenses to be directly incurred in the Subscription, there is no immediate material impact on earnings of the Group by the only reason of the Subscription itself. The Group expects to recognise a gain on disposal of approximately RMB32.9 million as a result of the Equity Transfer.

Working capital According to the Company’s interim report for the six months ended 30 June 2020 (the “Interim Report”), the Group had a working capital deficiency (i.e. total current assets of approximately RMB6,924 million, less total current liabilities of approximately RMB8,554 million) position and cash and cash equivalents as at 30 June 2020 amounted to approximately RMB1,631 million and RMB1,886 million respectively, representing a current ratio of about 80.9%, which showed that the Group’s working capital position as at 30 June 2020 was relatively tight.

As the Subscription Consideration of RMB129,507,458 will be entirely financed by the net proceeds from the Equity Transfer upon the Equity Transfer Completion, which therefore does not involve any additional cash outlay from the Group, its present working capital deficiency position would not deteriorate or be adversely affected by the Subscription only in material respect after the Subscription Completion.

Net asset value According to the Interim Report, the consolidated net asset value (excluding non-controlling interests) of the Group was approximately RMB5,695 million as at 30 June 2020. It is currently expected that there would not be material adverse impact solely as a result of the Subscription itself; whilst the gain on disposal of the Target Equity to be recognised upon the Equity Transfer Completion may enhance the consolidated net asset value of the Group.

35 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Gearing position

As at 30 June 2020, the Group had interest-bearing borrowings and net asset value (excluding non-controlling interests) of approximately RMB7,446 million and RMB5,695 million, respectively, representing a relatively higher gearing ratio (which is calculated as total interest-bearing borrowings divided by the net asset value of the Group) of approximately 130.8%.

As no material extra cash outlay and/or new interest-bearing borrowings would be involved to finance the Subscription because it would be fully financed by the net proceeds from the Equity Transfer, it is currently anticipated that the gearing position of the Group would not deteriorate.

Conclusion

The Group is, in substance, using the 95% equity-interest in the less profitable Target Company in exchange for a 8.10% shareholding interest in a much more profitable and promising company (i.e. Xiamen Sunstone), which, based on our understanding, is in the process of preparing for listing in the A share market of the Shenzhen/Shanghai Stock Exchange.

In light of the foregoing financial effects of the Subscription on the earnings, working capital, net asset value and gearing position of the Group as a whole, we are of the view that the Subscription is fair and reasonable so far as the Independent Shareholders are concerned, and in the interests of the Group and the Shareholders as a whole.

RECOMMENDATION

Having taken into account the above principal factors and reasons, we are of the view that although the Subscription is not conducted in the ordinary and usual course of business of the Group as which shall be regarded a one-off corporate restructuring exercise, the Subscription Agreement are entered into on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned, and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders, and the Independent Board Committee to advise the Independent Shareholders, to vote in favour of the ordinary resolution to approve the Subscription and the transactions contemplated thereunder pursuant to the Subscription Agreement at the EGM.

Yours faithfully, For and on behalf of First Shanghai Capital Limited Nicholas Cheng Director

Note:

Mr. Nicholas Cheng has been the Responsible Officer of Type 6 (advising on corporate finance) regulated activity under the SFO, and has extensive experience in corporate finance industry. He has participated in the provision of independent financial advisory services for, and completed, numerous connected transactions involving companies listed in Hong Kong.

36 APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

This Appendix I contains the English translation of the Valuation Report of Xiamen Sunstone and its equity interest prepared by the PRC Qualified Valuer, using income approach which is the basis of the determination of the Subscription Consideration. In case of discrepancy between the English translation and the Chinese version, the Chinese version shall prevail. All Equity Interests of Xiamen Road & Bridge Sunstone Co., Ltd. in Connection with Proposed Capital Increase by Xiamen Port Development Co., Ltd. in Xiamen Road & Bridge Sunstone Co., Ltd. Asset Valuation Report Text Da Xue Ping Gu Ping Bao Zi [2020] No. 840011 To: Xiamen Port Development Co., Ltd. and Xiamen Road & Bridge Sunstone Co., Ltd. Xiamen Academic Practice Valuer Co., Ltd. (廈門市大學資產評估土地房地產估價有限責任公司) accepts your engagement to conduct the appraisal on the market value as at 31 December 2019 of all equity interests of Xiamen Road & Bridge Sunstone Co., Ltd. in connection with the proposed capital increase by Xiamen Port Development Co., Ltd. in Xiamen Road & Bridge Sunstone Co., Ltd. in accordance with requirements under relevant laws, administrative regulations and asset valuation standards, in an independent, objective and fair manner, by using the asset-based approach and income approach and following necessary appraisal procedures. The information on asset valuation is set forth herein as follows:

I. Principals, Appraised Entity and Other Users of the Asset Valuation Report as stipulated in the Asset Valuation Commission Contract The principals of this valuation are Xiamen Port Development Co., Ltd. and Xiamen Road & Bridge Sunstone Co., Ltd. and the appraised entity is Xiamen Road & Bridge Sunstone Co., Ltd.

(I) General information about the principals 1. Principal—Xiamen Port Development Co., Ltd. (1) Particulars of Registration Company name and abbreviation: Xiamen Port Development Co., Ltd. (hereinafter referred to as “Port Development”) Unified social credit code: 913502007054097384 Domicile: 20th and 21st Floor, Gangwu Plaza, 31 Donggang North Road, Huli District, Xiamen, Fujian Legal representative: Chen Zhaohui Stock abbreviation: Xiamen Port Registered capital: RMB531,000,000 Business term: Until 20 April 2049 Business nature: Other joint stock limited company (listed) Business scope: 1. Cargo handling and warehousing services (excluding storage and loading and unloading of hazardous chemicals) on cargo ports, loading & unloading and transportation, terminal operations and other port facilities and services, and other unstated water transportation auxiliary activities (excluding activities that require a license); 2. domestic cargo transportation agency; 3. other warehousing services (excluding activities that require a license); 4. supply chain management; 5. all types of import and export of goods and technologies (no further attachment for catalog of import &

—I-1— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE export commodities), except those goods and technologies the State restricts companies to operate or prohibits to import and export; 6. trade agency, other trade brokerage and agency; 7. wholesale of metals and metal mines (excluding hazardous chemicals and monitoring chemicals), coal and coal products (excluding hazardous chemicals and monitoring chemicals), building materials and other chemical products (excluding hazardous chemicals and monitoring chemicals), non-metallic minerals and products (excluding hazardous chemicals and monitoring chemicals), other machinery equipment and electronics, electrical equipment, hardware products, clothes, textiles, knitwear and raw materials, other household goods, stationery, sports goods and equipment (excluding crossbows), crafts and collectibles (excluding cultural relics, ivory and products thereof), and other agricultural and animal husbandry products; 8. self-owned real estate business activities. (For business activities subject to examination and approval according to laws and regulations, relevant approval certificate shall be obtained).

(2) Basic information Xiamen Port Development Co., Ltd. is a company limited by shares which was changed from Xiamen Road & Bridge Co., Ltd. as a whole on 9 September 2004. Formally named Xiamen Road & Bridge Co., Ltd., it was a company limited by shares which was established by public offering of RMB ordinary shares (A shares) to the public on 3 February 1999 through restructuring of Xiamen Bridge Management Branch (a former subsidiary of Xiamen Road & Bridge Construction Investment Corporation) upon the sole initiation by Xiamen Road & Bridge Construction Investment Corporation. Xiamen Road & Bridge Co., Ltd. was listed on the Shenzhen Stock Exchange on 29 April 1999. After the completion of equity transfer and major asset replacement in 2004, the name of Xiamen Road & Bridge Co., Ltd. was changed to Xiamen Port Development Co., Ltd., with the stock abbreviation of “Xiamen Port” and stock code of “000905”.

The main businesses of Xiamen Port Development Co., Ltd. include port integrated logistics services, trade business and sales of building materials. Port integrated logistics services mainly include terminal operations, tugboat business, transportation business, tallying business, outreach logistics services, etc.

2. Principal—Xiamen Road & Bridge Sunstone Co., Ltd. (1) Particulars of Registration Company name and abbreviation: Xiamen Road & Bridge Sunstone Co., Ltd. (hereinafter referred to as “Sunstone”) Unified social credit code: 91350200751605000A Domicile: Shitou Village, Maxiang Town, Xiang’an District, Xiamen Legal representative: Wu Shengzhu Registered capital: RMB100,000,000 Business term: Until 1 September 2023 Business nature: Other joint stock limited company (unlisted)

Business scope: 1. commercial concrete production; 2. manufacturing of cement products and concrete structural components; 3. manufacturing of cement and other building materials; 4. wholesale and retail of building materials, coke, iron ore and non-metal ore; 5. warehousing services (excluding hazardous chemicals and monitoring chemicals); 6. technology R&D and consulting services in relation to building materials; 7. professional computer application software development; 8. real estate development; 9. wholesale of coal.

—I-2— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

(2) Basic information Controlled by Xiamen Road & Bridge Construction Group Co., Ltd., Xiamen Road & Bridge Sunstone Co., Ltd. is a modern state-owned building material company featuring integration of scientific research, industry and trade. The company was established in September 2003 with a registered capital of RMB100 million. By the end of 2019, its total assets reached RMB2.22 billion (consolidated), net assets reached RMB873 million (consolidated), and the total number of employees reached 1,500, with an annual output of more than 13 million m3 of ready-mixed concrete and more than 200,000 tons of admixtures.

(II) General information about the appraised entity 1. Corporate information Company name and abbreviation: Xiamen Road & Bridge Sunstone Co., Ltd. (hereinafter referred to as “Sunstone”) Unified social credit code: 91350200751605000A Domicile: Shitou Village, Maxiang Town, Xiang’an District, Xiamen Legal representative: Wu Shengzhu Registered capital: RMB100,000,000 Business term: Until 1 September 2023 Business nature: Other joint stock limited company (unlisted)

—I-3— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

2. Development history (1) Overview of the company’s equity and changes thereof Major changes in the company’s equity are set out in the chart below:

A registered capital of RMB20 million, with Xiamen Road & Bridge Establishment of Xiamen Road and Bridge Construction Investment Corporation holding 70% of shares and Concrete Engineering Co., Ltd. Xiamen Road and Bridge Building Materials Co., Ltd. holding on 2 September 2003 30% of shares.

A registered capital of RMB40 million, with Xiamen Road & Bridge Construction Investment Corporation holding 85% of shares and The first capital increase in July 2005 Xiamen Road and Bridge Building Materials Co., Ltd. holding 15% of shares.

After the transfer, Xiamen Road & Bridge Construction Group Co., Ltd. The first transfer of the limited company in (known as Xiamen Road & Bridge Construction Investment July 2007 Corporation before the restructuring) holds 100% of shares.

A registered capital of RMB81.67 million, with Xiamen Road & Bridge Construction Group Co., Ltd. holding 82.80% of shares, Xiamen The second capital increase in July 2007 Port Development & Construction Co., Ltd. holding 13.20% of shares and the rest 22 natural persons jointly holding 4.00% of shares.

Establishment of Xiamen Road & Bridge The company has a total share capital of RMB100 million Sunstone Co., Ltd. on 31 August 2007

Wu Shengzhu acquires 0.125% of shares held by Lin Jianping in the The first transfer of the joint stock company in joint stock company and the shareholding percentage of other November 2016 shareholders remains the same.

(2) Equity of appraised entity and changes thereof ① Establishment of the company in September 2003 On 8 August 2003, Xiamen Road & Bridge Construction Investment Corporation, the predecessor of Xiamen Road & Bridge Construction Group Co., Ltd., signed the Articles of Association of Xiamen Road and Bridge Concrete Engineering Co., Ltd. with Xiamen Road and Bridge Building Materials Co., Ltd. and jointly established Xiamen Road and Bridge Concrete Engineering Co., Ltd., the predecessor of Xiamen Road & Bridge Sunstone Co., Ltd. Xiamen Road and Bridge Concrete Engineering Co., Ltd. has a registered capital of RMB20 million, of which Xiamen Road & Bridge Construction Investment Corporation contributed RMB14 million in currency and Xiamen Road and Bridge Building Materials Co., Ltd. contributed RMB6 million in currency.

On 22 August 2003, Xiamen Shouxin Accounting Firm issued a Capital Verification Report (Xia Shou Xin Shi Yan Zi (2003) No. 076) to verify that as of 21 August 2003, Xiamen Road and Bridge Concrete Engineering Co., Ltd. had received a total of RMB20 million contributed by all shareholders to the registered capital, of which Xiamen Road & Bridge Construction Investment Corporation contributed RMB14 million in currency and Xiamen Road and Bridge Building Materials Co., Ltd. contributed RMB6 million in currency.

—I-4— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

On 2 September 2003, Xiamen Administration for Industry and Commerce issued a Business License of Enterprise as Legal Person (3502001006912). Xiamen Road and Bridge Concrete Engineering Co., Ltd. was established as a limited liability company with a registered capital of RMB20 million, with its legal representative being Huang Lingqiang and its domicile at Xiangxi Road, Maxiang Town, Tong’an District; its business scope is: 1. production, processing, wholesale and retail of ready-mixed commercial concrete and concrete products and building materials; 2. prefabrication of concrete components; 3. wholesale, retail and maintenance of electrical machinery and equipment; 4. warehousing; 5. coating application; 6. earthwork; 7. landscaping.

The equity structure of Xiamen Road and Bridge Concrete Engineering Co., Ltd. upon its establishment is:

Amount of Percentage of Form of contribution contribution No. Name of shareholder contribution (RMB’0,000) (%) 1 Xiamen Road & Bridge Construction Investment Corporation . . . Currency 1,400.00 70.00 2 Xiamen Road and Bridge Building Materials Co., Ltd...... Currency 600.00 30.00 Total ...... 2,000.00 100.00

② The first capital increase in July 2005 On 16 June 2005, Xiamen Road and Bridge Concrete Engineering Co., Ltd. passed a resolution of the general meeting, agreeing to increase the company’s registered capital from RMB20 million to RMB40 million, with all of the increased part invested in cash by the shareholder, Xiamen Road & Bridge Construction Investment Corporation. On the same day, the general meeting passed the resolution on the amendment to the articles of association.

On 4 July 2005, Xiamen Branch of Fujian Huamao Certified Public Accountants Co., Ltd. issued a Capital Verification Report (Min Hua Mao Yan Zi (2005) No. 3039) to verify that as of 30 June 2005, the company had received a total of RMB20 million paid in currency by Xiamen Road and Bridge Construction Investment Corporation for increasing the registered capital.

On 14 July 2005, Xiamen Road and Bridge Concrete Engineering Co., Ltd. completed the procedures for industrial and commercial change registration with Xiamen Administration for Industry and Commerce and obtained the changed Business License of Enterprise as Legal Person.

The equity structure of Xiamen Road and Bridge Concrete Engineering Co. Ltd. after completion of this capital increase is:

Amount of Percentage of Form of contribution contribution No. Name of shareholder contribution (RMB’0,000) (%) 1 Xiamen Road & Bridge Construction Investment Corporation .... Currency 3,400.00 85.00 2 Xiamen Road and Bridge Building Materials Co., Ltd...... Currency 600.00 15.00 Total ...... 4,000.00 100.00

③ The first equity transfer in July 2007 On 28 June 2007, Xiamen Road and Bridge Concrete Engineering Co., Ltd. passed a resolution of the general meeting, agreeing that shareholder Xiamen Road and Bridge Building Materials Co.,

—I-5— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

Ltd. transfers its 15% equity in Xiamen Road and Bridge Concrete Engineering Co., Ltd. to shareholder Xiamen Road & Bridge Construction Group Co., Ltd. (formerly known as Xiamen Road & Bridge Construction Investment Corporation). On 25 July 2007, Xiamen Road and Bridge Concrete Engineering Co., Ltd. passed the new articles of association.

On 15 July 2007, Xiamen Road and Bridge Building Materials Co., Ltd. and Xiamen Road & Bridge Construction Group Co., Ltd. signed an Equity Transfer Agreement, agreeing that Xiamen Road & Bridge Construction Group Co., Ltd. acquires the 15% equity held by Xiamen Road and Bridge Building Materials Co., Ltd. in Xiamen Road and Bridge Concrete Engineering Co., Ltd. at a price of RMB15,267,825.

On 24 July 2007, Xiamen SASAC issued the Reply on Xiamen Road and Bridge Building Materials Co., Ltd.’s Transfer of its 15% Equity in Xiamen Road and Bridge Concrete Engineering Co., Ltd. (Xia Guo Zi Chan [2007] No.353), permitting Xiamen Road and Bridge Building Materials Co., Ltd. to transfer its 15% equity in Xiamen Road and Bridge Concrete Engineering Co., Ltd. to Xiamen Road & Bridge Construction Group Co., Ltd. at a price by agreement based on the appraised value issued by the intermediary organ and approved by Xiamen SASAC.

On 25 July 2007, Xiamen Assets and Equity Exchange Center issued an appraisal [(07) Xia Chan Jian Zi No. 60], certifying that Xiamen Road and Bridge Building Materials Co., Ltd. has transferred its 15% equity in Xiamen Road and Bridge Concrete Engineering Co., Ltd. to Xiamen Road & Bridge Construction Group Co., Ltd.

On 26 July 2007, Xiamen Road and Bridge Concrete Engineering Co., Ltd. completed the procedures for industrial and commercial change registration with Xiamen Administration for Industry and Commerce and obtained the changed Business License of Enterprise as Legal Person.

The equity structure of Xiamen Road and Bridge Concrete Engineering Co., Ltd. after the completion of this equity transfer is:

Amount of Percentage of Form of contribution contribution No. Name of shareholder contribution (RMB’0,000) (%) 1 Xiamen Road & Bridge Construction Group Co., Ltd...... Currency 4,000.00 100.00 Total ...... 4,000.00 100.00

④ The second capital increase in July 2007 On 17 July 2007, Xiamen SASAC issued the Reply of the State-owned Assets Supervision and Administration Commission of Xiamen Municipal People’s Government on the Adjustment of Equity Structure and Change of Registered Capital of Xiamen Road and Bridge Concrete Engineering Co., Ltd. (Xia Guo Zi Chan [2007] No.340), permitting Xiamen Road & Bridge Construction Group Co., Ltd. to acquire 15% equity held by Xiamen Road and Bridge Building Materials Co., Ltd. in Xiamen Road and Bridge Concrete Engineering Co., Ltd. based on the asset valuation results approved by Xiamen SASAC and its plans on adjustment of equity structure and change of registered capital and shareholding plan of the management.

On 26 July 2007, Xiamen Road & Bridge Construction Group Co., Ltd. issued shareholders’ decisions: I. permitting Xiamen Road and Bridge Concrete Engineering Co., Ltd. to increase its

—I-6— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE registered capital from RMB40 million to RMB86.17 million; II. Xiamen Port Development & Construction Co., Ltd. should increase its capital in Xiamen Road and Bridge Concrete Engineering Co., Ltd. by way of the premium according to the Reply of the State-owned Assets Supervision and Administration Commission of Xiamen Municipal People’s Government on the Adjustment of Equity Structure and Change of Registered Capital of Xiamen Road and Bridge Concrete Engineering Co., Ltd. (Xia Guo Zi Chan [2007] No.340); III. the management employees should increase their capital in Xiamen Road and Bridge Concrete Engineering Co., Ltd. by way of the premium according to the Reply of the State-owned Assets Supervision and Administration Commission of Xiamen Municipal People’s Government on the Adjustment of Equity Structure and Change of Registered Capital of Xiamen Road and Bridge Concrete Engineering Co., Ltd. (Xia Guo Zi Chan [2007] No.340).

On 28 July 2007, Xiamen Road and Bridge Concrete Engineering Co., Ltd. held a general meeting and passed the resolutions: I. increase the capital and shares of the company. The company’s registered capital should be increased from RMB40 million to RMB86.17 million, with a newly added registered capital of RMB46.17 million, of which: (1) Xiamen Road & Bridge Construction Group Co., Ltd. should increase the registered capital with the company’s audited distributable profits of RMB31.35 million as of 31 March 2007; (2) Xiamen Port Development & Construction Co., Ltd. should make investment to hold shares by way of premium, with a contribution of RMB16.23 million in currency; (3) the management employees should make investment to hold shares by way of premium, with a total contribution of RMB4.92 million in currency; II. the company should be changed from a one-person limited company (wholly owned by a legal person) to a limited company; III. after the capital increase, the company should keep the operation management organization unchanged; IV. the re-enacted articles of association were passed.

The details of the capital increase are as follows:

Amount of contribution Consideration subscribed paid No. Name of enterprise/person Form of contribution (RMB’0,000) (RMB’0,000) 1 Xiamen Road & Bridge Construction Group Co., Ltd...... Undistributed profits 3,135.00 3,135.00 2 Xiamen Port Development & Construction Co., Ltd...... Currency 1,137.44 1,623 3 Liu Enfu ...... Currency 43.08 61.500 4 Xiao Meiyuan ...... Currency 38.77 55.350 5 Cai Fuming ...... Currency 34.45 49.200 6 Li Jinzhai ...... Currency 21.53 30.750 7 Zhuang Huiping ...... Currency 21.53 30.750 8 Yan Zhiyuan ...... Currency 12.92 18.450 9 Chen Meiling ...... Currency 12.92 18.450 10 Li Qinglian ...... Currency 12.92 18.450 11 Yang Shunrong ...... Currency 12.92 18.450 12 Wu Yang ...... Currency 12.92 18.450 13 Lin Jianping ...... Currency 10.77 15.375 14 Guo Jinshui ...... Currency 10.77 15.375 15 Chen Zhiyou ...... Currency 10.77 15.375 16 Zhu Pengcheng ...... Currency 10.77 15.375

—I-7— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

Amount of contribution Consideration subscribed paid No. Name of enterprise/person Form of contribution (RMB’0,000) (RMB’0,000) 17 Chen Lijian ...... Currency 10.77 15.375 18 Lin Kangpei ...... Currency 10.77 15.375 19 Li Ying ...... Currency 10.77 15.375 20 Chen Yuhui ...... Currency 10.77 15.375 21 Lin Jianxin ...... Currency 8.61 12.300 22 Lin Chunyan ...... Currency 8.61 12.300 23 CaiZhe...... Currency 8.61 12.300 24 Ke Fusheng ...... Currency 8.61 12.300 Total ...... 4,617.00 5,250

On 28 July 2007, Baker Tilly China Certified Public Accountants Co., Ltd. issued the Capital Verification Report (Tian Zhi Shen Yan Zi [2007] No. 160), verifying that as of 27 July 2007, Xiamen Road and Bridge Concrete Engineering Co., Ltd. had received RMB46.17 million newly contributed in monetary funds by shareholders, of which RMB14.82 million was contributed in currency by shareholders, and RMB31.35 million was converted from undistributed profits to the registered capital.

On 31 July 2007, Xiamen Road and Bridge Concrete Engineering Co., Ltd. completed the procedures for industrial and commercial change registration with Xiamen Administration for Industry and Commerce and obtained the changed Business License of Enterprise as Legal Person.

The equity structure of Xiamen Road and Bridge Concrete Engineering Co., Ltd. after the completion of this capital increase is:

Amount of Percentage of Form of contribution contribution No. Name of shareholder contribution (RMB’0,000) (%) 1 Xiamen Road & Bridge Construction Group Co., Currency and Ltd...... undistributed profits 7,135.00 82.800 2 Xiamen Port Development & Construction Co., Ltd. . . Currency 1,137.44 13.200 3 Liu Enfu ...... Currency 43.08 0.500 4 Xiao Meiyuan ...... Currency 38.77 0.450 5 Cai Fuming ...... Currency 34.45 0.400 6 Li Jinzhai ...... Currency 21.53 0.250 7 Zhuang Huiping ...... Currency 21.53 0.250 8 Yan Zhiyuan ...... Currency 12.92 0.150 9 Chen Meiling ...... Currency 12.92 0.150 10 Li Qinglian ...... Currency 12.92 0.150 11 Yang Shunrong ...... Currency 12.92 0.150 12 Wu Yang ...... Currency 12.92 0.150 13 Lin Jianping ...... Currency 10.77 0.125 14 Guo Jinshui ...... Currency 10.77 0.125 15 Chen Zhiyou ...... Currency 10.77 0.125 16 Zhu Pengcheng ...... Currency 10.77 0.125

—I-8— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

Amount of Percentage of Form of contribution contribution No. Name of shareholder contribution (RMB’0,000) (%) 17 Chen Lijian ...... Currency 10.77 0.125 18 Lin Kangpei ...... Currency 10.77 0.125 19 Li Ying ...... Currency 10.77 0.125 20 Chen Yuhui ...... Currency 10.77 0.125 21 Lin Jianxin ...... Currency 8.61 0.100 22 Lin Chunyan ...... Currency 8.61 0.100 23 CaiZhe...... Currency 8.61 0.100 24 Ke Fusheng ...... Currency 8.61 0.100 Total ...... 8,617.00 100.000

➄ Xiamen Road and Bridge Concrete Engineering Co., Ltd. was changed to a joint-stock company as a whole in August 2007 On 11 August 2007, Baker Tilly China Certified Public Accountants Co., Ltd. issued the Audit Report (Tian Zhi Shen Shen Zi [2007] No. 165), showing that upon audit, Xiamen Road and Bridge Concrete Engineering Co., Ltd. recorded a book value of net assets of RMB115,285,500 as of 31 July 2007.

On 25 August 2007, Zhongshen Certified Public Accountants Co., Ltd. issued the Asset Valuation Report (Zhong Shen Ping Zi [2007] No. 9029), confirming that Xiamen Road and Bridge Concrete Engineering Co., Ltd. recorded an appraised value of net assets of RMB124,162,000 as of 31 July 2007.

On 27 August 2007, Xiamen SASAC issued the Reply of the State-owned Assets Supervision and Administration Commission of Xiamen Municipal People’s Government on the Restructuring of Xiamen Road and Bridge Concrete Engineering Co., Ltd. and Definition of State-owned Equity (Xia Guo Zi Chan [2007] No.421), permitting Xiamen Road and Bridge Concrete Engineering Co., Ltd. to be restructured into a joint-stock company and defining 82.8 million shares contributed by Xiamen Road & Bridge Construction Group Co., Ltd. and 13.2 million shares contributed by Xiamen Port Development & Construction Co., Ltd. as state-owned legal person shares.

On 28 August 2007, Xiamen Road and Bridge Concrete Engineering Co., Ltd. held the 11th general meeting for 2017 cum the founding meeting of Xiamen Road & Bridge Sunstone Co., Ltd., deciding to change Xiamen Road and Bridge Concrete Engineering Co., Ltd. to a joint-stock company as a whole, and agreeing to convert the audited book value of net assets of RMB115,285,500 as of 31 July 2007 into 100 million shares, with the percentage of contribution by shareholders remaining unchanged.

On 28 August 2007, Beijing Zhongtian Law Firm issued the Legal Opinions on the 11th General Meeting for 2007 of Xiamen Road and Bridge Concrete Engineering Co., Ltd. cum the Founding Meeting of Xiamen Road & Bridge Sunstone Co., Ltd., confirming that the convening and convening procedure of this general meeting, qualifications of persons attending this general meeting and voting procedure of this general meeting were in compliance with the Company Law, the Articles of Association and other relevant laws and regulation and the resolutions passed at the meeting were legal and valid.

—I-9— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

On 29 August 2007, Baker Tilly China Certified Public Accountants Co., Ltd. issued the Capital Verification Report (Tian Zhi Shen Yan Zi [2007] No. 179), verifying the shares converted from net assets of the joint-stock company changed as a whole.

On 31 August 2007, the company registered the establishment with Xiamen Administration for Industry and Commerce and obtained the Business License of Enterprise as Legal Person (Business Registration No.350200100000865).

The equity structure of the company at the time of establishment of the joint-stock company is as follows:

Amount of Percentage of contribution contribution No. Name of shareholder Form of contribution (RMB’0,000) (%) 1 Xiamen Road & Bridge Construction Group Co., Ltd...... Netassets 8,280.00 82.800 2 Xiamen Port Development & Construction Co., Ltd. . . Net assets 1,320.00 13.200 3 Liu Enfu ...... Netassets 50.00 0.500 4 Xiao Meiyuan ...... Netassets 45.00 0.450 5 Cai Fuming ...... Netassets 40.00 0.400 6 Li Jinzhai ...... Netassets 25.00 0.250 7 Zhuang Huiping ...... Netassets 25.00 0.250 8 Yan Zhiyuan ...... Netassets 15.00 0.150 9 Chen Meiling ...... Netassets 15.00 0.150 10 Li Qinglian ...... Netassets 15.00 0.150 11 Yang Shunrong ...... Netassets 15.00 0.150 12 Wu Yang ...... Netassets 15.00 0.150 13 Lin Jianping ...... Netassets 12.50 0.125 14 Guo Jinshui ...... Netassets 12.50 0.125 15 Chen Zhiyou ...... Netassets 12.50 0.125 16 Zhu Pengcheng ...... Netassets 12.50 0.125 17 Chen Lijian ...... Netassets 12.50 0.125 18 Lin Kangpei ...... Netassets 12.50 0.125 19 Li Ying ...... Netassets 12.50 0.125 20 Chen Yuhui ...... Netassets 12.50 0.125 21 Lin Jianxin ...... Netassets 10.00 0.100 22 Lin Chunyan ...... Netassets 10.00 0.100 23 CaiZhe...... Netassets 10.00 0.100 24 Ke Fusheng ...... Netassets 10.00 0.100 Total ...... 10,000.00 100.000

—I-10— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

➅ The first transfer of Xiamen Road & Bridge Sunstone Co., Ltd. in November 2016

On 23 November 2016, Lin Jianping and Wu Shengzhu signed the Share Transfer Agreement of Xiamen Road & Bridge Sunstone Co., Ltd., under which the two parties agreed that shares should be transferred at a price of RMB4.9177 each with reference to the net assets as of 31 December 2015. Lin Jianping transferred 125,000 shares he held to Wu Shengzhu at a consideration of RMB614,713, accounting for 0.125% of the total shares of the joint-stock company.

On 19 January 2017, Xiamen Road & Bridge Sunstone Co., Ltd. issued the Register of Shareholders of Xiamen Road & Bridge Sunstone Co., Ltd., stating that the shares of Xiamen Road & Bridge Sunstone Co., Ltd. bore a par value of RMB1 each and the equity custodian was Xiamen Equity Exchange Co., Ltd. The details of shareholders after the change are as follows:

Percentage Amount of of contribution contribution No. Name of shareholder Form of contribution (RMB’0,000) (%) 1 Xiamen Road & Bridge Construction Group Co., Ltd...... Netassets 8,280.00 82.800 2 Xiamen Port Development & Construction Co., Ltd. . . . Net assets 1,320.00 13.200 3 Liu Enfu ...... Netassets 50.00 0.500 4 Xiao Meiyuan ...... Netassets 45.00 0.450 5 Cai Fuming ...... Netassets 40.00 0.400 6 Li Jinzhai ...... Netassets 25.00 0.250 7 Zhuang Huiping ...... Netassets 25.00 0.250 8 Yan Zhiyuan ...... Netassets 15.00 0.150 9 Chen Meiling ...... Netassets 15.00 0.150 10 Li Qinglian ...... Netassets 15.00 0.150 11 Yang Shunrong ...... Netassets 15.00 0.150 12 Wu Yang ...... Netassets 15.00 0.150 13 Wu Shengzhu ...... Netassets 12.50 0.125 14 Guo Jinshui ...... Netassets 12.50 0.125 15 Chen Zhiyou ...... Netassets 12.50 0.125 16 Zhu Pengcheng ...... Netassets 12.50 0.125 17 Chen Lijian ...... Netassets 12.50 0.125 18 Lin Kangpei ...... Netassets 12.50 0.125 19 Li Ying ...... Netassets 12.50 0.125 20 Chen Yuhui ...... Netassets 12.50 0.125 21 Lin Jianxin ...... Netassets 10.00 0.100 22 Lin Chunyan ...... Netassets 10.00 0.100 23 CaiZhe...... Netassets 10.00 0.100 24 Ke Fusheng ...... Netassets 10.00 0.100 Total ...... 10,000.00 100.000

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3. Equity Structure After several times of equity capital increase and equity transfer, as of the Benchmark Assessment Date, the paid-up capital of Xiamen Road & Bridge Sunstone Co., Ltd. was RMB100 million. The name of shareholder, amount of contribution and percentage of contribution are as follows:

Name of shareholder, amount of contribution and percentage of contribution

Amount of Percentage of contribution contribution No. Name of shareholder Form of contribution (RMB’0,000) (%) 1 Xiamen Road & Bridge Construction Group Co., Ltd...... Netassets 8,280.00 82.800 2 Xiamen Port Development & Construction Co., Ltd. . . Net assets 1,320.00 13.200 3 Liu Enfu ...... Netassets 50.00 0.500 4 Xiao Meiyuan ...... Netassets 45.00 0.450 5 Cai Fuming ...... Netassets 40.00 0.400 6 Li Jinzhai ...... Netassets 25.00 0.250 7 Zhuang Huiping ...... Netassets 25.00 0.250 8 Yan Zhiyuan ...... Netassets 15.00 0.150 9 Chen Meiling ...... Netassets 15.00 0.150 10 Li Qinglian ...... Netassets 15.00 0.150 11 Yang Shunrong ...... Netassets 15.00 0.150 12 Wu Yang ...... Netassets 15.00 0.150 13 Wu Shengzhu ...... Netassets 12.50 0.125 14 Guo Jinshui ...... Netassets 12.50 0.125 15 Chen Zhiyou ...... Netassets 12.50 0.125 16 Zhu Pengcheng ...... Netassets 12.50 0.125 17 Chen Lijian ...... Netassets 12.50 0.125 18 Lin Kangpei ...... Netassets 12.50 0.125 19 Li Ying ...... Netassets 12.50 0.125 20 Chen Yuhui ...... Netassets 12.50 0.125 21 Lin Jianxin ...... Netassets 10.00 0.100 22 Lin Chunyan ...... Netassets 10.00 0.100 23 CaiZhe...... Netassets 10.00 0.100 24 Ke Fusheng ...... Netassets 10.00 0.100 Total ...... 10,000.00 100.000

4. Operation management structure Controlled by XRBG, Xiamen Road & Bridge Sunstone Co., Ltd. is a modern state-owned building material company featuring integration of scientific research, industry and trade. The company was established in September 2003 with a registered capital of RMB100 million. The parent

—I-12— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE company has 3 branches. With 15 wholly-owned subsidiaries and branches, 3 controlling companies and 1 joint-stock company, the company operates its business in Xiamen, Zhangzhou, Quanzhou, Pingtan, Wenzhou and Nanchang. The company’s organizational structure is set out below:

General Meeting

Supervisory Party Committee Board of Directors Committee Strategy Committee

Remuneration and Nomination Committee

Audit Committee Management Team Department Department Department Department Department R&D Center Comprehensive Securities Affair Risk Management Audit Department Audit Party-masses Work Party-masses Enterprise Management Enterprise Financial Management Management Department Management

Wholly-owned Controlling Joint-stock Company Company Company Technology Co., Ltd. Co., Technology Technology Co., Ltd. Co., Technology Jiangxi Dite Technology Co., Ltd. Co., Technology Jiangxi Dite Xiamen Xiangyi Concrete Co., Ltd. Co., Xiamen Xiangyi Concrete Wenzhou Branch of Xiamen Road & Branch Wenzhou Longwen Branch of Zhangzhou Road & Branch Longwen Pingtan Sunstone Asphalt Concrete Co., Ltd. Co., Asphalt Concrete Pingtan Sunstone Bridge Sunstone Building Materials Co., Ltd. Sunstone Building Materials Co., Bridge Longhai Road & Bridge Sunstone Gravel Co., Ltd. Co., Sunstone Gravel Longhai Road & Bridge Fujian Road & Bridge Sunstone Building Materials Fujian Road & Bridge Xiamen Road & Bridge Sunstone Building Materials & Xiamen Road & Bridge Nanjing Sunstone Baoda Building Materials Co., Ltd. Nanjing Sunstone Baoda Building Materials Co., Longhai Sunstone Baoda Building Materials Co., Ltd. Longhai Sunstone Baoda Building Materials Co., Zhangpu Sunstone Baoda Building Materials Co., Ltd. Zhangpu Sunstone Baoda Building Materials Co., Zhangzhou Sunstone Baoda Building Materials Co., Ltd. Zhangzhou Sunstone Baoda Building Materials Co., Xiamen Sunstone Xingdeng Building Materials Co., Ltd. Ltd. Xiamen Sunstone Xingdeng Building Materials Co., Zhangzhou Road & Bridge Materials Development Co., Ltd. Co., Materials Development Zhangzhou Road & Bridge Bridge Sunstone Building Materials & Technology Co., Ltd. Co., Technology Sunstone Building Materials & Bridge Wutong Branch of Xiamen Road & Bridge Sunstone Co., Ltd. Sunstone Co., of Xiamen Road & Bridge Branch Wutong Haicang Branch of Xiamen Road & Bridge Sunstone Co., Ltd. Ltd. Sunstone Co., of Xiamen Road & Bridge Haicang Branch Xiang’an Branch of Xiamen Road & Bridge Sunstone Co., Ltd. Sunstone Co., of Xiamen Road & Bridge Xiang’an Branch Quanzhou Road & Bridge Sunstone Building Materials Co., Ltd. Sunstone Building Materials Co., Quanzhou Road & Bridge Zhangzhou Road & Bridge Sunstone Building Materials Co., Ltd. Sunstone Building Materials Co., Zhangzhou Road & Bridge

—I-13— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

5. Main business of Sunstone and its majority-owned subsidiaries

No. Company name Business scope Main business 1 Zhangzhou Sunstone Production and sale of Concrete production and sale Baoda Building building materials Materials Co., Ltd. 2 Quanzhou Road & Production and sale of Concrete production and sale Bridge Sunstone building materials Building Materials Co., Ltd. 3 Zhangzhou Road & Production and sale of Concrete production and sale Bridge Sunstone building materials Building Materials Co., Ltd. 4 Fujian Road & Bridge Production and sale of R&D, production and sale of concrete Sunstone Building building materials additives Materials Technology Co., Ltd. 5 Xiamen Sunstone Production and sale of Concrete production and sale Xingdeng Building building materials Materials Co., Ltd. 6 Longhai Sunstone Production and sale of Concrete production and sale Baoda Building building materials Materials Co., Ltd. 7 Zhangpu Sunstone Production and sale of Concrete production and sale Baoda Building building materials Materials Co., Ltd. 8 Nanjing Sunstone Production and sale of Concrete production and sale Baoda Building building materials Materials Co., Ltd. 9 Xiamen Road & Production and sale of R&D, production and sale of concrete Bridge Sunstone building materials additives Building Materials & Technology Co., Ltd. 10 Xiamen Xiangyi Production and sale of Concrete production and sale Concrete Co., Ltd. building materials 11 Jiangxi Dite Production and sale of R&D, production and sale of concrete Technology Co., Ltd. building materials additives 12 Pingtan Sunstone Production and sale of Production and sale of pitch and concrete Asphalt Concrete Co., building materials Ltd. 13 Longhai Road & Production and sale of Sale of gravels Bridge Sunstone building materials Gravel Co., Ltd.

6. Production process and equipment of Sunstone Sunstone’s parent company has 3 branches with a total of 3 production lines with a production capacity of 4.5m3, 2 production lines with a production capacity of 3m3 and 2 leased production lines with a production capacity of 3m3; and 130 mixer trucks with a loading capacity of 8m3, 3 pump trucks with a length of 56m and 1 automobile pump with a length of 52m.

Specifically, the production line with a production capacity of 4.5m3 can mix 60m3 of concrete per hour, and the production line with a production capacity of 3m3 can mix 50m3 of concrete per hour;

—I-14— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE the mixer truck can transport 8m3 of concrete every time, and the automobile pump can pump 40m3 of concrete per hour.

The flow diagram of major production processes is set out below:

Sand, stone and Water Admixtures cement

Feeding by feeding Weighing scale Dilution by diluting equipment equipment

Weighing scale Weighing scale

Mixing by mixer

Equipment transporting concrete mix

Chart 1 Production Process Flow Diagram of Concrete

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7. Assets and operations Sunstone registered total assets of RMB1,578,823,100, total liabilities of RMB887,769,300 and owner’s equity of RMB691,053,800 as of the Benchmark Assessment Date, i.e. 31 December 2019; and operating income of RMB757,462,100 and net profit of RMB92,351,000 in 2019 (All the above data are the data of the parent company). The company’s assets and financial conditions for the last two years and as of the Benchmark Assessment Date are set out as follows:

Assets, Liabilities and Financial Conditions of the Company

Unit: RMB’0,000 2017 2018 2019 Consolidated Parent Consolidated Parent Consolidated Parent Asset items amount company amount company amount company Total assets ..... 168,467.92 123,039.06 197,012.55 136,797.39 221,971.69 157,882.31 Liabilities ...... 104,341.73 81,488.51 124,288.42 74,795.14 134,710.28 88,776.93 Shareholders’ equity ...... 64,126.19 41,550.55 72,724.13 62,002.25 87,261.41 69,105.38

2017 2018 2019 Consolidated Parent Consolidated Parent Consolidated Parent Profit items amount company amount company amount company Operating income ...... 155,482.80 65,670.76 186,925.54 71,774.42 198,734.95 75,746.21 Total profit ..... 8,952.43 5,855.63 11,737.17 21,082.60 20,809.05 10,977.05 Net profit ...... 7,262.11 4,890.81 9,234.55 19,936.92 16,709.93 9,235.10 Audit Xigema Certified Public Xigema Certified Public Xigema Certified Public institution .... Accountant Accountant Accountant Audit opinion . . . Standard unqualified opinion Standard unqualified opinion Standard unqualified opinion

(II) Relationship between the principal and the appraised entity Xiamen Port Development Co., Ltd. intends to increase its capital in Xiamen Road & Bridge Sunstone Co., Ltd., so the relationship between the principal and the appraised entity is a relationship between an investor and an investee.

(III) Other Users of the Asset Valuation Report as stipulated in the Asset Valuation Commission Contract Users of the valuation report as stipulated in the commission contract include the principal, relevant functional government departments involved in the economic behaviour corresponding to the purpose of valuation and other users of the valuation report as stipulated by the state laws and regulations.

No institutions or individuals other than the report users as stipulated in the aforesaid commission contract shall be the users of the valuation report for their acquisition of the valuation report.

II. Purpose of Valuation Basis: Meeting Minutes Concerning Equity Integration Project of Road and Bridge Building Materials dated 28 November 2019 of Xiamen Port Development Co., Ltd. and Meeting Minutes for Leaders of Xiamen Road & Bridge Sunstone Co., Ltd. ([2020] No. 4) dated 6 March 2020 of Xiamen Road & Bridge Sunstone Co., Ltd.

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The purpose of this valuation is to give a fair view of the market value of all equity interests of shareholders of Xiamen Road & Bridge Sunstone Co., Ltd. as at the Benchmark Assessment Date and provide value reference basis for the economic behaviour of capital increment in Xiamen Road & Bridge Sunstone Co., Ltd. intended to be made by Xiamen Port Development Co., Ltd.

III. The Subject and Scope of Valuation (I) Subject of valuation Under the commission of Xiamen Port Development Co., Ltd. and Xiamen Road & Bridge Sunstone Co., Ltd., the subject of valuation is all equity interests of shareholders of Xiamen Road & Bridge Sunstone Co., Ltd.

(II) Scope of valuation The scope of valuation shall be in line with the valuation declaration form provided by the principal, and specifically covers:

1. The assets and liabilities presented in the Balance Sheet dated 31 December 2019 of Xiamen Road & Bridge Sunstone Co., Ltd., with details set out as follows:

Monetary unit: RMB Items Book value 1 Current assets ...... 649,365,337.41 2 Non-current assets ...... 929,457,811.37 3 Including: available-for-sale financial assets ...... — 4 Held-to-maturity investments ...... — 5 Long-term receivables ...... — 6 Long-term equity investments ...... 808,891,182.61 7 Investment properties ...... — 8 Fixed assets ...... 97,922,775.26 9 Construction in progress ...... — 10 Construction materials ...... — 11 Disposal of fixed assets ...... — 12 Productive biological assets ...... — 13 Oil and gas assets ...... — 14 Intangible assets ...... 8,657,330.53 15 Expenditures for development ...... — 16 Goodwill ...... — 17 Long-term deferred expenses ...... 374,448.90 18 Deferred income tax assets ...... 13,612,074.07 19 Other non-current assets ...... — 20 Total assets ...... 1,578,823,148.78 21 Current liabilities ...... 737,769,281.70 22 Non-current liabilities ...... 150,000,000.00 23 Total liabilities ...... 887,769,281.70 24 Net assets (owner’s equity) ...... 691,053,867.08

The above data related to the assets and liabilities have been audited by Xigema Certified Public Accountants (Special Ordinary Partnership) which issued the “Xi Kuai Shen Zi (2020) No. 2430” Audit Report. The valuation was conducted after the audit on the enterprise.

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2. Type and quantity of off-balance-sheet assets declared by the enterprise

No off-balance-sheet assets have been involved in this valuation according to the materials submitted by the enterprise.

(III) Reference to the asset type, quantity and carrying amount (or appraised value) involved in the report conclusion issued by other institutions In this valuation, Xigema Certified Public Accountants (Special Ordinary Partnership) audited the audit report on the benchmark date of Xiamen Road & Bridge Sunstone Co., Ltd. provided by the appraised entity, and issued the “Xi Kuai Shen Zi (2020) No. 2430” Audit Report with standard unqualified opinions on 17 April 2020. After audit by the audit report, Xiamen Road & Bridge Sunstone Co., Ltd. recorded total assets of RMB1,578,823,100, total liabilities of RMB887,769,300 and owner’s equity of RMB691,053,800 as of the benchmark date.

Except for the foregoing, no report conclusions issued by other institutions have been used.

IV. Type of Value and Its Definition The type of value of this asset valuation is market value.

Market value refers to the estimated amount of the value that can be realized by the valuation target under normal and fair transaction as at the Benchmark Assessment Date when the voluntary buyer and the voluntary seller act rationally without any coercion under proper market conditions.

The following factors have been considered in selecting market value as the type of value of the valuation conclusion in this valuation: (1) purpose of valuation: aiming at capital increment, this valuation is a normal market economic behaviour; (2) market condition: this valuation does not set any restrictions or requirements on the market condition; (3) subject of valuation: this valuation does not set any restrictions or requirements on the subject of valuation; (4) relevance between the type of value and valuation assumptions: valuation assumptions of this valuation are set based on a simulated fully open market with full competition to exclude the impact of non-market and abnormal factors on the valuation conclusion.

V. Benchmark Assessment Date The Benchmark Assessment Date of this asset valuation is 31 December 2019.

The Benchmark Assessment Date is determined by the principal according to the arrangements for equity transfer.

The definition of the asset valuation scope, determination of valuation price and selection of valuation parameters in this asset valuation are based on the internal financial statements of the enterprise, the external economic environment and market conditions on that day. All the pricing standards in the asset valuation report are the price standards effective on the Benchmark Assessment Date.

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VI. Valuation Basis The valuation basis followed in this asset valuation mainly includes the basis of economic behaviour, laws and regulations, valuation criterion and asset ownership, pricing basis adopted during valuation and calculation and other references, with details as follows:

(I) Basis for economic behaviour 1. Meeting Minutes Concerning Equity Integration Project of Road and Bridge Building Materials dated 28 November 2019 of Xiamen Port Development Co., Ltd.;

2. Meeting Minutes for Leaders of Xiamen Road & Bridge Sunstone Co., Ltd. ([2020] No.4) dated 6 March 2020 of Xiamen Road & Bridge Sunstone Co., Ltd.

(II) Basis for laws and regulations 1. Assets Appraisal Law of the People’s Republic of China (adopted at the 21st Meeting of the Standing Committee of the 12th National People’s Congress on 2 July 2016 and implemented as from 1 December 2016);

2. Securities Law of the People’s Republic of China (Order No. 43 of the President of the People’s Republic of China, revised and adopted at the 18th Meeting of the Standing Committee of the 10th National People’s Congress of the People’s Republic of China on 27 October 2005);

3. Administrative Measures for State-Owned Assets Assessment (Order No. 91 of the State Council, 1991);

4. Provisions on Several Issues concerning the Appraisal of State-owned Assets (Order No. 14 of the Ministry of Finance, promulgated on 31 December 2001);

5. Notice on Matters Related to Promoting the Transfer of State-owned Property Rights in Enterprises (Guo Zi Fa Chan Quan [2014] No. 95);

6. Measures for the Supervision and Administration of State-owned Assets Trading of Enterprises (Order No. 32 of the State-owned Assets Supervision and Administration Commission of the State Council and the Ministry of Finance, promulgated and implemented as from 24 June 2016);

7. Notice on Relevant Matters Concerning Strengthening the Administration of Valuation of State-owned Assets of Enterprises (Guo Zi Wei Chan Quan [2006] No. 274);

8. Measures for the Supervision and Administration of State-owned Assets of Enterprises in Xiamen (Order No. 157 of Xiamen Municipal People’s Government, implemented as from 1 February 2015);

9. Law of the People’s Republic of China on State-owned Assets of Enterprises (adopted at the 5th Meeting of the Standing Committee of the 11th National People’s Congress on 28 October 2008, and implemented as from 1 May 2009);

10. Company Law of the People’s Republic of China (adopted and revised at the Sixth Meeting of the Standing Committee of the 13th National People’s Congress, and implemented as from 26 October 2018);

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11. Regulation of the People’s Republic of China on the Administration of Company Registration (Order No. 666 of the State Council, revised on 6 February 2016);

12. Provisions on the Administration of Registration of the Registered Capital of Companies (Order No. 64 of the State Administration for Industry and Commenced on 20 February 2014);

13. Administrative Measures for the Registration of Capital Contributions Made with Equities (Issued by Order No. 39 of the State Administration for Industry and Commenced on 14 January 2009);

14. Law of the People’s Republic of China on the Administration of Urban Real Estate (revised in 2007);

15. Enterprise Income Tax Law of the People’s Republic of China (amended in accordance with the Decision of the Standing Committee of the National People’s Congress on Amending the Enterprise Income Tax Law of the People’s Republic of China at the 26th session of the Standing Committee of the 12th National People’s Congress of the People’s Republic of China on 24 February 2017);

16. Other laws, regulations and rules relating to the evaluation.

(III) Basis for standards 1. Basic Standards for Assets Valuation (Cai Zi [2017] No. 43);

2. Code of Professional Ethics for Asset Valuation (Zhong Ping Xie [2017] No. 30);

3. Practice Guidelines for Asset Valuation—Asset Valuation Procedures (Zhong Ping Xie [2018] No. 36);

4. Practice Guidelines for Asset Valuation—Asset Valuation Report (Zhong Ping Xie [2018] No. 35);

5. Practice Guidelines for Asset Valuation—Asset Valuation Approach (Zhong Ping Xie [2019] No. 35);

6. Practice Guidelines for Asset Valuation—Asset Valuation Authorization Contracts (Zhong Ping Xie [2017] No. 33);

7. Practice Guidelines for Asset Valuation—Asset Valuation Archives (Zhong Ping Xie [2018] No. 37);

8. Practice Guidelines for Asset Valuation—Using Expert Work and Related Reports (Zhong Ping Xie [2017] No. 35);

9. Practice Guidelines for Asset Valuation—Enterprise Value (Zhong Ping Xie [2018] No. 38);

10. Practice Guidelines for Asset Valuation—Intangible Assets (Zhong Ping Xie [2017] No. 37);

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11. Practice Guidelines for Asset Valuation-Real Estate (Zhong Ping Xie [2017] No. 38);

12. Practice Guidelines for Asset Valuation-Machinery and Equipment (Zhong Ping Xie [2017] No. 39);

13. Guidelines for the Asset Valuation Report of State-owned Assets of Enterprises (Zhong Ping Xie [2017] No. 42);

14. Guidelines for Business Quality Control of Asset Appraisal Institutions (Zhong Ping Xie [2017] No. 46);

15. Guiding Opinions on Value Types of Assets Valuation (Zhong Ping Xie [2017] No. 47);

16. Guiding Opinions on Legal Ownership of Assets Valuation Objects (Zhong Ping Xie [2017] No. 48);

as well as the relevant guidelines, instructions, guiding opinions and interpretations and explanations thereof.

(IV) Basis for property rights of assets 1. Driving licence;

2. Purchase invoice of equipment and relevant documentation of property rights;

3. Xiamen Land and Building Ownership Certificate.

(V) Pricing basis 1. Announcement on Matters Concerning Deepening the Value-Added Tax Reform (Announcement No. 15 in 2019 of the State Taxation Administration);

2. Statistic data, technical standard data and policy papers issued by the relevant government agencies;

3. Relevant inquiry information and parameters collected by the evaluation institution;

4. Handbook of Common Data and Parameters for Asset Evaluation (2nd Edition) (Beijing Science and Technology Press);

5. Vehicle Acquisition Tax Law of the People’s Republic of China (Order No. 19 of President of the People’s Republic of China);

6. Provisions on the Standards for Compulsory Retirement of Motor Vehicles (Order No. 12 in 2012 of the Ministry of Commerce, National Development and Reform Commission, the Ministry of Public Security, and the Ministry of Environmental Protection);

7. Provisions of the Ministry of Finance on the Financial Management of Capital Construction (Cai Jian [2002] No. 394);

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8. Provisions on Management of Charges for Project Survey and Design (Ji Jia Ge [2002] No. 10);

9. Administration Rules for Construction Project Supervision and Related Service Fees (Fa Gai Jia Ge [2007] No. 670);

10. Notice on Regulating Certain Issues concerning Advisory Charges for Environmental Impact (Ji Jia Ge [2002] No. 125);

11. Interim Provisions on Advisory Charges for Preliminary Work of Construction Projects (Ji Jia Ge [1999] No. 1283);

12. Loan Interest Rate Statement of the People’s Bank of China came into effect on 24 October 2015.

(VI) Other reference materials 1. Code for Real Estate Valuation (GB/T50291-2015);

2. Onsite survey records of the valuers;

3. Other relevant materials collected by Xiamen Academic Practice Valuer Co., Ltd.

VII. Valuation Approaches (I) Selection of valuation approaches According to Article 17 of the Practice Guidelines for Asset Valuation—Enterprise Value, when performing any appraisal of enterprise value, the suitability of the three basic asset valuation methods, namely, the income approach, the market approach and the cost approach (asset-based approach) shall be analyzed based on the purpose of valuation, the subject of valuation, the type of the value, and the availability of information.

1. Analysis of applicability of income approach The income approach in valuation of enterprise value refers to the valuation method whereby the value of the subject of valuation is determined by capitalising or discounting the expected income. The specific methods used by the income approach include the dividend discount method and the discounted cash flow method. The valuers shall appropriately take into consideration the suitability of the income approach in reference to the enterprise’s historical operating conditions, the predictability of future income, and the adequacy of information collected for valuation. The use of income approach for the valuation of an enterprise is subject to 3 pre-conditions:

(1) The future expected income of the enterprise is predictable and can be measured with currency;

(2) The risks assumed by the enterprise relating to the expected income are also predictable and can be measured with currency;

(3) The number of years with prospective earnings is predictable.

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In this valuation, future income and risks can be predicted according to the operation planning and operation capacity of the appraised entity, which meets the basic premises for adoption of income approach. Therefore, the income approach can be adopted for this valuation.

2. Analysis of applicability of market approach Market approach in valuation of enterprise value refers to the comparison between the subject of valuation and a comparable listed company or a comparable transaction in order to determine the value of the subject of valuation. Two commonly used methods in market approach are comparable listed company and comparable transaction.

Given that there are few transaction cases of enterprises in the same industry and of the same scale, and it is hard to obtain the operating and financial information of referential enterprises and cases, the market approach does not apply to this valuation.

3. Analysis of applicability of asset-based approach The asset-based approach in valuation of enterprise value is a valuation method by which the values of various assets and liabilities in and off the balance sheet of an enterprise are reasonably valuated based on the balance sheet of the appraised entity on the Benchmark Assessment Date so as to determine the value of the subject of valuation. According to the Practice Guidelines for Asset Valuation—Enterprise Value, in applying the asset-based approach, the valuer shall require the appraised entity to identify each asset and liability both on and off the balance sheet according to the accounting policies and business operation, and shall know that not every asset and liability can be identified and valued separately. The applicability of the asset-based approach should be considered when there are assets or liabilities which have a significant impact on the value of subject of valuation and are difficult to identify and value.

The assets of the appraised entity are common types of assets, and there are no assets or liabilities which have a significant impact on the value of subject of valuation and are difficult to identify and value. Given that the economic and technical parameters needed for the cost approach can be adequately drawn from the data collected, the asset-based approach can be adopted for this valuation. To sum up, the asset-based approach and income approach are adopted for this valuation.

(II) Introduction to asset-based approach Asset-based approach in valuation of enterprise value refers to a valuation approach that reasonably determines the value of the subject of valuation by evaluating the value of various assets and liabilities on and off the balance sheet of an enterprise on the basis of the balance sheet of the appraised entity on the Benchmark Assessment Date.

The valuation methods of various assets and liabilities are as follows:

1. Current assets (1) Monetary funds: including bank deposits For bank deposits, check the book balance with the bank statement, and issue a letter of inquiry to the bank to verify the correctness of the bank balance. The appraised value shall be determined according to the verified book value.

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(2) Receivables Regarding the evaluation of receivables, the valuers should, after the receivables are verified correctly and on the basis of historical data and information learned from the investigation, make a concrete analysis of the amount, debt time and reason, recovery of payments, and borrowers’ funds, credit and management status, and adopt specific identification and aging analysis to evaluate the risk loss; if there is every reason to believe that the current accounts of affiliated enterprises can be fully recovered, evaluate the risk loss to 0; if there is strong evidence that the amounts are irrecoverable or are aged, evaluate the risk loss to 100%; for amounts which are very likely to be irrecoverable or it is difficult to determine the irrecoverable amount, evaluate the risk loss with reference to the method adopted by enterprise accountants in calculating bad debt reserves according to the aging analysis method.

(3) Inventories For inventories, its quantity as at the Benchmark Assessment Date shall be determined by checking the consistency among those accounts, understanding the storage condition and internal control system and conducting the sample testing based on detailed breakdown provided by the appraised entity.

Approaches on valuation of raw materials:

① The appraised value of normally used raw materials is determined based on the objective market price on the Benchmark Assessment Date.

② It is learnt that most of the idle and sluggish raw materials are mixer truck parts and loader parts, including clutch plates, cylinder liner sealing ring parts, cylinder piston repair kits and water tank radiator assemblies, etc. From the enterprise’s inventory management personnel, the raw materials are mixer truck and loader parts used in the factories. As the corresponding machinery and equipment have been idle, the corresponding parts have no use value and no recyclable value. Therefore, the appraised value is calculated as zero.

Turnover materials in stock: determined based on the objective market price on the Benchmark Assessment Date. As the carrying amount can basically reflect the objective market price on the Benchmark Assessment Date, the appraised value of turnover materials in stock is determined based on the verified book value.

2. Non-current assets (1) Buildings Approaches on valuation of fixed assets of buildings generally include comparison approach, income approach, cost approach, and so on. The market approach is suitable for valuation of major similar real estate transactions; the income approach is suitable for valuation of real estate with gains or potential gains; the cost approach is suitable for valuation of real estate under the circumstances that it is not appropriate to adopt the market approach or income approach for valuation without market basis or in case of insufficient market basis;

Therefore, this valuation is conducted under the replacement cost approach based on the purpose of valuation and the characteristics of the appraised fixed assets of buildings and on the assumption of continuous use.

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The cost approach is a method to obtain the replacement price or reconstruction price of the subject of valuation at the time of valuation, and comprehensively determine the newness rate based on the service life of the buildings and on-site investigation of the buildings so as to estimate the reasonable price or value of the appraised buildings.

The calculation formula of the replacement cost approach is as follows:

Appraised value of buildings = complete replacement value × newness rate

(2) Fixed assets of equipment The valuers valuate most of the equipment under the replacement cost approach, and the vehicles under the replacement cost approach and market approach based on the investigation and analysis of data provided by the enterprise, the purpose of this valuation, the principle of continuous use, the market price as well as the characteristics of the appraised equipment.

① Approaches on valuation of equipment Appraised value = complete replacement value × newness rate

The complete replacement value of machinery and equipment consists of equipment purchase price, transportation and miscellaneous fees, installation and debugging cost, basic cost, other expenses, cost of capital, etc. According to the Circular of the Ministry of Finance and the State Administration of Taxation on Several Issues Concerning the Implementation of VAT Transformation Reform in China (Cai Shui [2008] No. 170), since 1 January 2009, the input tax incurred on purchase of fixed assets by general taxpayers of VAT may be credited from the output tax against special VAT invoices, special bills of payment of customs import VAT, and documents of settlement of transportation expenses in accordance with the relevant provisions of the Interim Regulations of the People’s Republic of China on Value-added Tax (No. 538 Decree of the State Council) and the Detailed Rules for Implementing the Interim Regulations of the People’s Republic of China on Value- added Tax (No. 50 Decree of the Ministry of Finance and the State Administration of Taxation). Therefore, the input VAT should be deducted from the complete replacement value of equipment.

The calculation formula of the complete replacement value:

Complete replacement value = equipment purchase price + transportation and miscellaneous input VAT מ fees + installation and debugging cost + basic cost + other expenses + cost of capital incurred on purchase of equipment

As the electronic equipment included in the scope of valuation does not need to be installed (or the seller is responsible for the installation) and the transportation cost is low, the complete replacement value is determined with reference to the purchase price of similar equipment under the prevailing market without considering the transportation and miscellaneous fees, installation cost, other expenses and cost of capital.

② Approaches on valuation of vehicles In this valuation on vehicles, the production vehicles and special operation vehicles are valuated under the cost approach according to the characteristics and usage of the vehicles; the

—I-25— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE passenger vehicles are valuated by analogy under the market approach. First, collect data through market surveys and take the market transaction prices of three or more comparable properties that are similar to the appraised subject as basis; then, make a comparative analysis according to the model, transaction date, transaction, usage, vehicle conditions, nature of work and other factors influencing the appraised subject and comparable properties, make technical adjustments to the differences to obtain the prices of the comparable properties of the appraised subject, and finally calculate the appraised value of the appraised subject via the arithmetic mean. The calculation formula is:

Prices of the comparable properties = transaction prices of the comparable properties × score of the model of the appraised vehicle/score of the models of the comparable properties × score of the transaction dates of the comparable properties/score of the transaction date of the appraised vehicle × score of the transaction of the appraised vehicle/score of the transaction of the comparable properties x score of the usage of the appraised vehicle/score of the usage of the comparable properties x score of the conditions of the appraised vehicle/score of the conditions of the comparable properties

(3) Construction in progress The valuers know the image progress of the construction in progress through on-site investigation, verify the various project expenditures incurred in the construction in progress according to the current quota standards for construction and installation projects, and know the payment progress. They also investigate the market prices of the main engineering materials consumed by the construction in progress, and think that the book expenditure amount is reasonable and the basis is sufficient, and the expenditure proportion is basically consistent with the image progress of the completion of the project. As the construction in progress included in the scope of this valuation has not officially commenced, the carrying amount is mainly the cost for purchase of some materials and design. The valuers take the residual value after removal of unreasonable expenditures as the appraised value upon verification of the accounts based on the composition of the book value.

After verification, there is no unreasonable part in the book value, thus the valuers confirm the appraised value according to the verified book value.

(4) Long-term equity investments There are 14 long-term equity investments included in the scope of this valuation. We first valuate all equity interests of shareholders of subsidiaries, and then multiply them by the shareholding ratio to obtain the appraised value of long-term equity investments.

(6) Long-term deferred expenses The valuers checked the relevant financial accounting records and obtained relevant materials including contracts and invoices. They take the verified book value as the appraised value.

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(7) Deferred income tax assets In valuation of deferred income tax assets, the valuers investigate and learn about the reasons for and formation of the difference, and verify whether the difference will result in a deductible amount when determining the taxable income during the period of asset recovery or payment of liabilities in the future and whether the calculated amount complies with the relevant provisions of the accounting system for business enterprises and tax law. They confirm the appraised value based on the deductible amount to be incurred on the precondition that the deferred income tax assets are true and complete upon verification.

3. Liabilities The scope of valuation covers various current liabilities declared in the enterprise valuation, including notes payable, accounts payable, advance receipts, employee compensation payable, taxes payable, dividends payable, other payables and other current liabilities. The valuer investigated and verified the enterprise’s liabilities, and took the amount of liabilities required to be actually borne as at the Benchmark Assessment Date as the appraised value of liabilities based on the verification.

(III) Introduction to income approach The income approach in valuation of enterprise value refers to the valuation method whereby the value of the subject of valuation is determined by capitalising or discounting the expected income. The specific methods used by the income approach include the dividend discount method and the discounted cash flow method.

Income approach is a method whereby the enterprise value is estimated by discounting the enterprise’s expected future cash flow to present value. In other words, the expected cash flow is discounted to present value by calculating the enterprise’s expected future cash flow and using a proper discount rate to attain the enterprise value. It is applied under the basic conditions that the enterprise has the foundation and condition for continuing operation with a stable correspondence between its operation and income, and its future incomes and risks are predictable and quantifiable. The key to use the discounted cash flow method lies in the prediction on the expected future cash flow, the objectivity and reliability of data collection and processing, etc. The valuation result is quite objective and easy to be accepted by the market when the predictions on the expected future cash flow are objective and fair and the discount rate is selected on a reasonable basis.

1. Valuation idea According to the situation of the due diligence and the asset composition and main business of the subject of valuation, the basic ideas of this valuation are:

(1) to calculate the expected income (net cash flow) of the assets and main business included in the scope of statements according to the changes in historical operating conditions and business types of recent years, and discount the same to attain the value of business assets;

(2) to separately calculate the value of surplus assets and other assets as at the benchmark date included in the scope of statements but not considered in the calculation of the expected income (net cash flow) and assets (liabilities) defined as non-operating assets (liabilities);

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(3) to attain the value of equity capital (all equity interests of shareholders) of the subject of valuation after deducting the value of interest-bearing liabilities from the enterprise value of the subject of valuation calculated by adding the value of the above two assets.

2. Income approach model

(1) Cash flow model

The specific methods commonly used by the income approach include the dividend discount method and the discounted cash flow method. Upon comprehensive analysis, discounted cash flow method and Discounted Cash Flow – Free Cash Flow for the Firm, i.e. DCF-FCFF model, are used in this valuation based on the income approach.

(2) Income period and predictive period

In this valuation, it is assumed that the appraised entity is operated on an on-going basis and relevant income period is determined as a perpetual period. In other words, the income period is the infinite operating period based on the assumption on continuing operation.

Generally, in contrast to the poor accuracy of the predictions on forward income, recent income of the enterprise can be predicted in a relatively accurate manner. In this valuation, staged income discount model is adopted based on the situation of the appraised enterprise to divide the enterprise’s income period into predictive period and perpetual period. First, the cash flow of the respective years in the preliminary stage (from 1 January 2020 to 31 December 2024) is estimated; then, it is estimated that the income for the years after 2025 remain unchanged as compared with the data for 2024; and finally, all the expected incomes are discounted and added.

3. Basic formula

Value of all equity interests of shareholders = overall enterprise value – value of interest- bearing liabilities.

Of which: overall enterprise value = present value of the FCFF + surplus assets + non-operating assets – non-operating liabilities

Of which: FCFF = net profit + depreciation and amortization + after-tax interests of interest- bearing liabilities – capital expenditure – increase of working capital

(1) Overall enterprise value

Overall enterprise value equals the sum of the value of all equity interests of shareholders and the value of interest-bearing liabilities. According the enterprise’s asset allocation and usage, the overall enterprise value is calculated according to the following formula:

Overall enterprise value = value of operating assets + value of surplus assets + value of non-operating assets and liabilities

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① Value of operating assets Operating assets refer to the assets and liabilities related to the enterprise production and operation and involved in the FCFF prediction after the Benchmark Assessment Date. Value of operating assets is calculated according to the following formula:

Of which: P: Value of the enterprise’s operating assets as at the Benchmark Assessment Date; th Ri: Expected FCFF for the i year after the Benchmark Assessment Date; Rn+1: FCFF during the perpetual period; r: Discount rate (weighted average cost of capital, WACC); n: Predictive period; i: The ith year of the predictive period.

② Non-consolidated-statement long-term equity investment Please refer to the appraised value determined based on the above valuation method of “Asset- based approach – Long-term equity investment”.

③ Value of surplus assets Surplus assets refer to the assets beyond the demand of the enterprise production and operation and not involved in the FCFF prediction as at the Benchmark Assessment Date.

④ Value of non-operating assets and liabilities Non-operating assets and liabilities refer to the assets and liabilities irrelevant to the enterprise production and operation and not involved in the FCFF prediction. It is analysed and calculated separately.

(2) Value of interest-bearing liabilities Interest-bearing liabilities refer to liabilities with interests required to be paid, including bank borrowings, securities issued, long-term payables under financial leases, etc. Interest-bearing liabilities also include some other financing capitals which should have had interests but no interests are paid due to the identity as a related party or for other reasons, such as other payables.

VIII. Implementation Process and Situation of Valuation Procedure Preliminary work for this valuation started from late February 2020, onsite inspection was conducted from March 2020 to April 2020, and valuation conclusion was made on 5 August 2020. The valuation procedure comprises five stages:

(I) Stage of preliminary preparation: clarify basic matters of the business, accept the engagement of the project, determine the purpose, subject and scope of valuation and Benchmark Assessment Date, and work out the valuation plan;

(II) Stage of asset inspection: direct the appraised entity to inspect the assets, prepare the valuation materials, conduct onsite inspection, collect and sort out the valuation materials and verify the assets and materials;

—I-29— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

(III) Stage of valuation and estimation: select proper valuation methods, collect market information and conduct the valuation and estimation;

(IV) Stage of summary of valuation and submission of report: summarize and analyse the valuation result, write the report and conduct internal audit; communicate with the principal on the contents of the report, work out the ultimate valuation conclusion after independent analysis, and submit to the principal a formal asset valuation report;

(V) Organization and collection of valuation archives.

IX. Valuation Assumptions In this valuation, the valuer has followed the following valuation assumptions:

(I) General assumptions 1. Transaction assumption Transaction assumption assumes that all assets to be valued are already in the process of transaction, and the professional asset valuer carries out a valuation based on the transaction conditions of the assets to be valued in a simulated market. It is the most essential prerequisite for asset valuation.

2. Open market assumption Open market assumption refers to the assumption that the price of assets which can be freely traded on a fully competitive market is determined based on the judgements on the asset value of the independent buyers and the sellers under the certain market conditions of supply. It is an assumed explanation or restriction on the conditions for proposed entry into the market and effects on the assets under comparatively perfect market conditions.

Open market refers to a fully competitive market with numerous buyers and sellers, where the buyers and sellers are equal in status and have opportunities and time to get enough market information and the transactions between the buyers and sellers are based on free will and rationality rather than mandatory or restricted conditions. Both the buyers and sellers can rationally judge the function, usage, transaction price, etc. of the assets. Open market assumption is based on the fact that the assets can be bought and sold openly in the market.

3. Assumption on continuing operation Assumption on continuing operation refers to the assumption that the operating activities of an operating entity will continue and will not be suspended or terminated in the foreseeable future.

If an operating entity is formed with some assets and liabilities for a specific purpose and a certain function, assumption on continuing operation means that the operating entity will continue to perform the said function for the said specific purpose in the foreseeable future.

(II) Special assumptions 1. There will be no major changes in the current political, legal, financial, market or economic conditions of Mainland China or countries or regions that have a significant impact on the business of the appraised entity and its subsidiaries.

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2. The operation and business of the appraised entity and its subsidiaries will not be severely interrupted by any force majeure event or uncontrollable and unpredictable factors, including but not limited to wars, military events, natural disasters or catastrophes (such as floods and typhoons), epidemics or serious accidents.

3. The management of the appraised entity and its subsidiaries are dutiful and responsible; there is no significant change in the existing scope of operation; the internal control system of the appraised entity and its subsidiaries is effective and complete, and the risk management measures are adequate and appropriate.

4. The basic information and financial information provided by the Principals is true, accurate and complete; each asset included in the scope of appraisal is true and accurate, and their ownership are clear, legal and complete and all belong to the appraised entity or its subsidiaries; the documents certifying ownership of the assets issued by the appraised entity and its subsidiaries are legal and valid.

5. The appraised entity and its subsidiaries have fully complied with the relevant national and local laws and regulations in force; all licenses, use permits, letters of consent or other legal or administrative authorization documents issued by relevant local and national government agencies or bodies for the use and operation of the assets of the appraised entity and its subsidiaries were used normally and in compliance with rules within the validity period as at the Benchmark Assessment Date.

6. All improvements made by the appraised entity to all relevant assets are in compliance with all relevant legal provisions and requirements under other legal, planning or engineering of the relevant competent authorities.

7. All significant and potential factors that may affect the value have been fully disclosed to us by the Principals.

In accordance with the requirements of asset appraisal, the asset appraisal professionals have determined that these assumptions are valid as at the Benchmark Assessment Date, and the appraisal professionals will not assume the responsibility of deriving different appraisal conclusions due to changes in the premises when the economic environment changes significantly in the future.

When the above assumptions are not established, the Asset Valuation Report shall be invalid except where the differences between the actual situation and the above assumptions are accurately quantifiable and easy to adjust, the Principals shall request the Appraisal Institution to make corresponding adjustments to the asset appraisal conclusion when the purpose of asset appraisal is achieved.

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X. Appraisal Conclusion

In accordance with the national laws, rules, regulations and valuation standards on asset appraisal, and in line with the principles of independence, impartiality, science and objectivity, we applied the statutory and necessary procedures for asset appraisal and adopted the asset-based approach and the income approach to conduct field survey, market investigation, confirmation and appraisal calculations on the assets of Xiamen Road & Bridge Sunstone Co., Ltd. included in the scope of appraisal and concluded as follows:

(I) Valuation results of asset-based approach

The audited book value of assets is RMB1,578,823,100, and the appraised value is RMB2,089,630,700, representing an increase in value of RMB510,807,600 and an increase in percentage of 32.35%.

The audited book value of liabilities is RMB887,769,300, and the appraisal value is RMB887,769,300, with no appraisal increase or decrease.

The audited book value of the entire equity of shareholders is RMB691,053,800, and the appraised value is RMB1,201,861,400 representing an increase in value of RMB510,807,600 and an increase in percentage of 73.92%.

The valuation results are summarized as follows: Amount unit: RMB’0,000

Value-added No. Item Book value Appraisal value Change rate % A B C=B-A D=C/A×100% 1 Current assets 64,936.53 65,854.19 917.66 1.41 2 Non-current assets 92,945.78 143,108.88 50,163.10 53.97 3 Among which: Long-term equity investment 80,889.12 127,560.78 46,671.66 57.7 4 Investment real estate — — — — 5 Fixed assets 9,792.28 11,873.24 2,080.96 21.25 6 Among which: Buildings 3,207.96 4,365.91 1,157.95 36.1 7 Equipment 6,584.31 7,507.33 923.02 14.02 8 Land — — — — 9 Construction in progress — — — — 10 Intangible assets 865.73 2,511.01 1,645.28 190.05 11 Among which: Land use right 454.58 2,099.85 1,645.27 361.93 12 Development expenditure — — — — 13 Goodwill — — — — 14 Long-term deferred expenses 37.44 37.44 — — 15 Deferred tax assets 1,361.21 1,126.40 -234.81 -17.25 16 Other non-current assets — — — — 17 Total assets 157,882.31 208,963.07 51,080.76 32.35 18 Current liabilities 73,776.93 73,776.93 — — 19 Non-current liabilities 15,000.00 15,000.00 — — 20 Total liabilities 88,776.93 88,776.93 —— 21 Net assets (Owner’s equity) 69,105.38 120,186.14 51,080.76 73.92

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(II) Valuation results of income approach The audited book value of the entire equity of shareholders is RMB691,053,800. Upon valuation by the income approach, the appraised value of the entire equity of shareholders is RMB1,462,700,000, representing an increase in value of RMB771,646,200 and an increase in percentage of 111.66%.

(III) Analysis of the difference in the valuation results of the two approaches The difference between the valuation results of the income approach and the asset-based approach is RMB260,838,600. The main reasons for the difference are as follows:

1. The asset-based approach refers to the appraisal idea of determining the value of the appraisal object on the basis of the reasonable valuation of the sub-item asset value and liabilities of the enterprise, that is, the method to add the appraised value of various element assets that constitute the enterprise, and deduct the appraised value of liabilities to obtain the equity value of shareholders of the enterprise. The valuation result reflects the replacement value of the enterprise based on existing assets and liabilities.

2. The income approach is used to comprehensively consider the impact of the enterprise’s various factors such as production technology, asset status, operation management, marketing network, and goodwill on the value of the enterprise based on the perspective of the enterprise’s future profitability. It reflects the enterprise’s comprehensive profitability of various assets.

(IV) Final selection of valuation results The asset-based approach is used to appraise the value of the enterprise by evaluating the value of individual assets and considering the relevant liabilities based on the perspective of asset replacement. The asset-based approach used this time has conducted an in-depth investigation of the enterprise’s various assets, and used appropriate valuation methods to evaluate various assets. On the whole, this asset-based approach is comprehensive for the overall valuation of the enterprise, and highlights the key points without major omissions. Therefore, the valuation result of this asset-based approach fully reflects the market value of entrusted assets to a certain extent.

The income approach reflects the comprehensive profitability of the enterprise’s various assets from the perspective of the enterprise’s future profitability. The results of the income approach include the value of intangible resources that are difficult to measure and quantify in the enterprise’s financial statements, such as platforms, services, marketing, teams, qualifications, and customers. It can objectively and comprehensively reflect the value of an enterprise.

Based on the comprehensive consideration of the quality and quantity of data used by different valuation methods, appraisers believe that the valuation results of the income approach is more convincing based on the purpose of this valuation, so the valuation results of the income approach are used as the valuation conclusion of the entire equity of shareholders, that is, the entire appraisal equity value of shareholders of Xiamen Road & Bridge Sunstone Co., Ltd. is RMB ONE BILLION FOUR HUNDRED AND SIXTY-TWO MILLION SEVEN HUNDRED THOUSAND Only (RMB1,462,700,000).

The users of this asset valuation report should pay attention to the impact of special matters on the valuation conclusion when applying this valuation conclusion.

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XI. Special Notes The users of this Asset Valuation Report should pay attention to the impact of special matters on the valuation conclusion, and the users of the asset valuation report are reminded to pay attention to this.

(I) Incomplete or defective valuation information such as ownership 1. Among the houses and buildings within the scope of valuation (including houses and buildings held by Xiamen Road & Bridge Sunstone Co., Ltd. and its subsidiaries): Name of Year of Gross floor No. building Ownership Structure completion Unit area 1 Dormitory Xiamen Road & Bridge Sunstone Co., Mixed 2006/12/1 m2 1,059.24 Phase II Ltd. (Xiang’an Branch) 2 Office Xiamen Road & Bridge Sunstone Co., Brick 2011/12/31 m2 618.60 building Ltd. (Wutong Branch) concrete 3 Security Xiamen Road & Bridge Sunstone Co., Brick 2011/12/31 m2 13.44 room Ltd. (Wutong Branch) concrete 4 Warehouse Xiamen Road & Bridge Sunstone Co., Brick 2011/12/31 m2 490.00 Ltd. (Wutong Branch) concrete 5 Stock bin Xiamen Road & Bridge Sunstone Co., Brick 2011/12/31 m2 2,190.50 Ltd. (Wutong Branch) concrete 6 Laboratory Xiamen Road & Bridge Sunstone Co., Brick 2011/12/31 m2 550.00 building Ltd. (Wutong Branch) concrete 7 Guard Fujian Road & Bridge Sunstone Reinforced 2019/6/1 m2 21.00 Room I Building Materials Technology concrete Company Limited (福建路橋翔通建材科技有限公司) 8 Guard Fujian Road & Bridge Sunstone Reinforced 2019/6/1 m2 21.00 Room II Building Materials Technology concrete Company Limited 9 Public Fujian Road & Bridge Sunstone Frame 2019/6/1 m2 1,024.00 works Building Materials Technology room Company Limited 10 Class B Fujian Road & Bridge Sunstone Frame 2019/6/1 m2 1,512.00 workshop Building Materials Technology Company Limited 11 Warehouse Fujian Road & Bridge Sunstone Frame 2019/6/1 m2 740.00 of raw Building Materials Technology materials Company Limited 12 Fire pump Fujian Road & Bridge Sunstone Reinforced 2019/6/1 m2 160.00 room Building Materials Technology concrete Company Limited 13 Reception Zhangpu Sunstone Baoda Building Reinforced 2011/6/1 m2 29.16 office Materials Co., Ltd. (漳浦翔通寶達建材 concrete 有限公司) 14 Laboratory Zhangpu Sunstone Baoda Building Reinforced 2011/6/1 m2 448.00 Materials Co., Ltd. concrete 15 Bathroom Zhangpu Sunstone Baoda Building Reinforced 2011/6/1 m2 78.00 Materials Co., Ltd. concrete 16 Power Zhangpu Sunstone Baoda Building Reinforced 2011/6/1 m2 110.00 distribution Materials Co., Ltd. concrete room and weighbridge room

—I-34— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

Name of Year of Gross floor No. building Ownership Structure completion Unit area 17 Duty Longhai Sunstone Baoda Building Brick 2011/7/31 m2 21.20 room Materials Co., Ltd. (龍海翔通寶達建材 concrete 有限公司) 18 Weighbridge Longhai Sunstone Baoda Building Brick 2011/7/31 m2 271.84 room Materials Co., Ltd. concrete 19 Power Longhai Sunstone Baoda Building Brick 2011/7/31 m2 49.60 distribution Materials Co., Ltd. concrete room 20 Public Longhai Sunstone Baoda Building Brick 2011/7/31 m2 36.75 toilet Materials Co., Ltd. concrete 21 Laboratory Longhai Sunstone Baoda Building Brick 2011/7/31 m2 238.92 Materials Co., Ltd. concrete 22 Office Pingtan Sunstone Asphalt Concrete Brick 2011/5/31 m2 732.00 building Co., Ltd. (平潭翔通瀝青混凝土有限 concrete and 公司) dormitory building 23 Power Pingtan Sunstone Asphalt Concrete Brick 2011/6/1 m2 distribution Co., Ltd. concrete room 100.00 24 Generator Pingtan Sunstone Asphalt Concrete Brick 2011/6/1 m2 room Co., Ltd. concrete 25 Laboratory Pingtan Sunstone Asphalt Concrete Brick 2011/6/2 m2 448.00 Co., Ltd. concrete 26 Gravel Pingtan Sunstone Asphalt Concrete Steel 2011/5/31 m2 8,010.00 storage Co., Ltd. structure room 27 Office Xiamen Xiangyi Concrete Co., Ltd. (廈 Reinforced 2004-09 m2 894.00 building 門翔義混凝土有限公司) concrete 28 Dormitory Xiamen Xiangyi Concrete Co., Ltd. Reinforced 2004-09 m2 710.00 concrete 29 Laboratory Xiamen Xiangyi Concrete Co., Ltd. Reinforced 2004-09 m2 570.46 concrete 30 Bulk Xiamen Xiangyi Concrete Co., Ltd. Simple 2004-09 m2 300.00 warehouse steel structure 31 Substation Xiamen Xiangyi Concrete Co., Ltd. Reinforced 2006-05 m2 98.00 concrete 32 Office Xiamen Road & Bridge Sunstone Co., Brick 2014/12/26 m2 618.60 building Ltd. concrete 33 Security Xiamen Road & Bridge Sunstone Co., Brick 2014/12/26 m2 13.44 room Ltd. concrete 34 Warehouse Xiamen Road & Bridge Sunstone Co., Brick 2014/12/26 m2 490.00 Ltd. concrete 35 Test Xiamen Road & Bridge Sunstone Co., Brick 2014/12/26 m2 550.00 building Ltd. concrete 36 Laboratory Nanjing Sunstone Baoda Building Brick 2016/06 m2 65.00 expansion Materials Co., Ltd. (南靖翔通寶達建材 concrete 有限公司) 37 Warehouse Nanjing Sunstone Baoda Building Brick 2010/10 m2 53.55 Materials Co., Ltd. concrete

—I-35— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

Name of Year of Gross floor No. building Ownership Structure completion Unit area 38 Weighbridge Nanjing Sunstone Baoda Building Brick 2010/10 m2 25.00 room Materials Co., Ltd. concrete 39 Laboratory Nanjing Sunstone Baoda Building Brick 2010/10 m2 149.23 maintenance Materials Co., Ltd. concrete room 40 Public Nanjing Sunstone Baoda Building Brick 2010/10 m2 49.99 toilet Materials Co., Ltd. concrete 41 Distribution Nanjing Sunstone Baoda Building Brick 2010/10 m2 51.72 room Materials Co., Ltd. concrete 42 Machine Nanjing Sunstone Baoda Building Brick 2012/01 m2 42.75 Repair Materials Co., Ltd. concrete Tool Room 43 Car wash Nanjing Sunstone Baoda Building Brick 2019/03 m2 120.00 room Materials Co., Ltd. concrete Total 23,774.99

We have not obtained the property ownership certificates of the above properties, and the appraised entity promises that the above properties belong to it. The disputes that may be caused by the ownership of this part of the assets have nothing to do with the valuation institution, and various types of payments for property ownership certificates have not been deducted from the appraisal value.

The area of the above-mentioned properties is declared by the appraised entity, and the appraisers conduct random checks and verifications based on the declared data of the appraised entity. If the actual area is inconsistent with the declared data, the valuation results should be modified accordingly.

2. The long-term equity investment within the scope of this valuation—Yuanlong Garden parking space recorded on the book by Xiamen Xiangyi Concrete Co., Ltd.. The original book value was RMB290,000.00, and the net book value was RMB8,700.00. As the relevant personnel of Xiamen Xiangyi Concrete Co., Ltd. failed to provide the ownership information of the parking space, the appraisers would not express opinions on the ownership and value of the parking space and only retained its book value.

(II) Other key information not provided by the principal None

(III) Pending matters, legal disputes and other uncertain factors 1. Funds involved in litigation As of the Benchmark Assessment Date, there are a total of 16 funds involved in litigation with a book value of more than RMB1 million. The details are as follows:

Appraised Date of Book balance value No. Name of debtor Business content occurrence (RMB) (RMB) 1 Fujian South Construction Amount of sale of 2019/12/31 2,907,007.55 — Industry Co., Ltd. (福建省南方 commodity 建設實業有限公司) concrete

—I-36— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

Date of Book balance Appraised value No. Name of debtor Business content occurrence (RMB) (RMB) 2 Yongtongchang Amount of sale of 2019/12/31 1,655,019.77 — Construction Group commodity Co., Ltd. (永同昌建設集 concrete 團有限公司) 3 Xiamen Jiehai Amount of sale of 2017/12/1 2,117,259.65 1,726,103.97 Construction Co., Ltd. commodity (廈門劼海建設有限公 concrete 司) 4 CSCEC Straits Amount of sale of 2019/5/1 12,756,014.85 11,499,485.33 Construction commodity Development Co., Ltd. concrete (中建海峽建設發展有限公司) 5 Fujian Huiwu Amount of sale of 2016/8/1 10,799,855.76 2,159,971.15 Construction commodity Engineering Co., Ltd. concrete (福建省惠五建設工程有限公司) 6 Quanzhou Mingcheng Amount of sale of 2014/6/1 7,347,701.00 — Construction commodity Engineering Co., Ltd. concrete (泉州市名城建設工程有限公司) 7 Fujian Longcheng Amount of sale of 2013/11/1 5,941,905.00 5,941,905.00 Construction Group commodity Co., Ltd. (福建省瀧澄建 concrete 設集團有限公司) (Hu Jiebin and Li Guoxing) 8 Hu Jiebin and Li Amount of sale of 2013/12/1 2,570,830.00 2,570,830.00 Guoxing commodity concrete 9 Zhangpu Shunming Amount of sale of 2019/12/1 1,596,060.00 177,483.30 Concrete Engineering admixture Co., Ltd. (漳浦順明混凝土工程有限公司) 10 Guangxi Construction Amount of sale of 2013/5/12 1,386,899.63 — Engineering Group commodity No. 2 Construction concrete Engineering Co., Ltd. (廣西建工集團第二建築工程有限責任公司) 11 China Construction Amount of sale of 2013/5/3 1,047,327.06 — Sixth Engineering commodity Bureau No. 2 Company concrete (中建六局二公司) 12 Jiujiang Huali Amount of sale of 2019/12/20 1,552,646.58 1,432,381.92 Commercial Concrete water reducing Co., Ltd. (九江華力商品 agent 混凝土有限公司) 13 Dacheng Engineering Amount of sale of 2017/12/19 5,754,397.00 4,199,667.20 Co., Ltd. (大成工程股份 asphalt concrete 有限公司)

—I-37— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

Date of Book balance Appraised value No. Name of debtor Business content occurrence (RMB) (RMB) 14 Dacheng Engineering Amount of sale of 2017/12/21 6,606,109.00 1,240,830.40 Construction Co., Ltd. asphalt concrete (大成工程建設有限公司) 15 Dacheng Engineering Amount of sale of 2017/12/21 3,742,308.00 580,695.20 Construction Co., Ltd. asphalt concrete (大成工程建設有限公司) 16 Shanxi Yuncheng Road Amount of sale of 2013/11/11 2,470,086.00 617,546.40 and Bridge Co., Ltd. asphalt concrete (山西運城路橋有限責任公司) Total 70,251,426.85 32,146,899.87

In this asset appraisal, the valuers estimate the appraisal risk loss only based on the collected specific information about the funds involved in litigation, the credit status of the debtors and the property preservation of the case and get the appraised value after deducting the appraisal risk loss from the book balance.

In case of other situations that affect the recovery of funds during the later trial or execution of the case, the valuation conclusions shall be adjusted accordingly.

2. Lease matters (1) Long-term equity investment—lease of land for business of Xiamen Xiangyi Concrete Co., Ltd. (廈門翔義混凝土有限公司)

Lessor Fujian Zhaoxiang Lingang Real Estate Co., Ltd. (福建兆祥臨港置業有限公司) Lessee Xiamen Xiangyi Concrete Co., Ltd. Land area 21,067m2 Land use Concrete workshop Use term Until 31 December 2021 Date of signing 1 January 2019

This valuation is made provided that Xiamen Xiangyi Concrete Co., Ltd. will continue to lease the land use right in the future, and its subsequent operations will not be affected.

(2) Lease of land for business of Wutong Branch of Xiamen Road & Bridge Sunstone Co., Ltd. (廈門路橋翔通股份有限公司五通分公司)

Lessor Xiamen Land Resources and Real Estate Administration Bureau Lessee Xiamen Road & Bridge Sunstone Co., Ltd. (廈門路橋翔通股份有限公司) Land area 23,367.452m2 Land use Industrial land Use term Until 23 April 2018 Date of signing 2 December 2016

According to the relevant instructions provided by Xiamen Road & Bridge Sunstone Co., Ltd., since Wutong Branch of Xiamen Road & Bridge Sunstone Co., Ltd. is currently undertaking the concrete supply project for the Second East Passage (Xiang’an Bridge) project, a key project in Xiamen, it is expected that the station will not be relocated before the completion of the project.

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According to instructions of Xiamen Road & Bridge Sunstone Co., Ltd., if the station is relocated after completion, its overall production will not be greatly affected, and the corresponding business can be transferred to other related companies for production during the relocation period.

(IV) Restricted evaluation procedure, the remedial measures taken by the evaluation organization and the impact on the evaluation conclusion None.

(V) Important use of expert work and related reports We used the unqualified Audit Report of “Xi Kuai Shen Zi (2020) No. 2430” audited and issued by Xigema Certified Public Accountants (Special Ordinary Partnership) to verify the authenticity, legality and integrity of the book value of various assets and liabilities in the scope of valuation provided by the Principal. Our assessment work cannot reduce, replace, or eliminate the possible accounting responsibilities of the Principal.

(VI) Major subsequent events 1. Matters that may have an impact on the evaluation conclusion from the Benchmark Assessment Date to the report date of asset evaluation

The Principal and the appraised entity didn’t provide, and we failed to learn or find major subsequent events that have an impact on the evaluation conclusion.

2. During the effective period of the report after the Benchmark Assessment Date, if the quantity and the pricing standards of assets change, it shall be processed by the following principles:

(1) If the quantity of assets changes, the amount of assets shall be adjusted accordingly in accordance with the original evaluation method;

(2) If the pricing standards of assets change and have a significant impact on the asset evaluation conclusion, the Principal shall promptly hire a qualified asset evaluation organization to redetermine the evaluation value;

(3) For changes in the quantity and the pricing standards of assets after the Benchmark Assessment Date, the Principal shall give full consideration to the actual valuation of the assets and make corresponding adjustments.

(VII) Defects in the economic activities relating to this asset valuation which may have a material effect on the valuation conclusion None.

(VIII) Other explanatory matters 1. The purpose of asset appraisers and appraisal institution performing asset appraisal business is to make professional judgments on the value of assets under the appraisal purpose stated in this report, and no judgment shall be made to the economic activity corresponding to the valuation purpose, and no confirmation or opinions on the legal ownership of the assessed object shall be made or expressed.

—I-39— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

2. The evaluation conclusion of this report is an objective and fair reflection of the entire equity value of the shareholders of the Company as valued on the base date of 31 December 2019. Our company takes no responsibility for any major changes in the entire equity value of the shareholders after this base date.

3. The premium generated by the controlling interest or the discount generated by the minority equity are not considered in this Asset Valuation Report when the long-term equity is appraised.

4. The impact of liquidity on the value of the assessed object is not considered in this Asset Valuation Report.

5. This report contains certain appendices, which constitute an important part of this report and have the same legal effect as the text of this report. The appendices are valid only when being used together with the text of the report.

Users of this Asset Valuation Report shall pay attention to the impact of special matters on the appraisal conclusion.

XII. Limitations of the Use of Asset Valuation Report (I) Scope of Use for the Asset Valuation Report 1. Users of the Asset Valuation Report

The Asset Valuation Report is only available to users of the Asset Valuation Report agreed in the Asset Valuation Commission Contract and stipulated by laws and administrative regulations.

2. Purpose of the Asset Valuation Report The Principal or other users of the Asset Valuation Report shall use the Asset Valuation Report in accordance with laws, administrative regulations, and the purpose and use specified in the Asset Valuation Report.

3. The validity period of the appraisal conclusion The Asset Valuation Report shall usually remain valid for one year, commencing from 31 December 2019, the Benchmark Assessment Date, to 30 December 2020. Generally, the Asset Valuation Report can only be used when the distance between the Benchmark Assessment Date and the economic behavior realization date is no more than one year. If it is more than one year, or although it is no more than one year, the price standard of the appraised asset fluctuates greatly, the conclusion of this Asset Valuation Report shall not be adopted.

4. Extraction, citation or disclosure of the Asset Valuation Report (1) Without the written permission of the Principal, the Asset Appraisal Institution and its asset appraisal professionals shall not provide the content of the Asset Valuation Report to a third party or disclose it to the public, unless otherwise provided by laws and administrative regulations. (2) Without the consent of the Asset Appraisal Institution, the contents of the Asset Valuation Report shall not be extracted, quoted or disclosed in the public media, except as stipulated by laws and administrative regulations and otherwise agreed by relevant parties.

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(II) If the Principal and other users of the Asset Valuation Report fail to use the Asset Valuation Report in accordance with the laws, administrative regulations and the scope of use stated in the Asset Valuation Report, the Asset Appraisal Institution and its asset appraisal professionals shall not be held liable.

(III) Except for the Principal, other users of Asset Valuation Report agreed in the Asset Valuation Commission Contract and users of Asset Valuation Report stipulated by laws and administrative regulations, no other institution or individual shall become users of Asset Valuation Report.

(IV) The user of the Asset Valuation Report shall correctly understand the appraisal conclusion, which is not equal to the realizable price of the appraisal object, and shall not be regarded as the guarantee of the realizable price of the appraisal object.

(V) The prerequisite for the establishment of this Asset Valuation Report is that this economic behavior complies with relevant provisions of national laws and regulations, and is approved by relevant departments.

(VI) The valuation conclusion reflects the fair valuation opinions on the subject of valuation put forward based on the principle of open market under the valuation assumptions set out in this report for the purpose of this valuation, without considering the mortgage and guarantee matters that may be undertaken in the future as well as the impact of the price lowered or an additional price paid by a special party on the appraisal price. When the above-mentioned conditions and valuation assumptions change, the valuation conclusion will generally become invalid. The valuation institution shall not bear the relevant legal responsibility for the invalidation of the valuation conclusions due to changes in these conditions.

(VII) The valuation institution has the final right to interpret this Asset Valuation Report.

XIII. Date of Asset Valuation Report The date of Asset Valuation Report is 5 August 2020, which is the formation date of the valuation conclusion.

The document number of this report is “Da Xue Ping Gu Ping Bao Zi [2020] No. 840011”. The appraised value of all equity interests of Xiamen Road & Bridge Sunstone Co., Ltd. (the subject of valuation) is RMB ONE BILLION FOUR HUNDRED AND SIXTY-TWO MILLION AND SEVEN HUNDRED THOUSAND ONLY (RMB1,462,700,000).

Xiamen Academic Practice Valuer Co., Ltd. Legal representative: Wang Jianqing Asset valuer: Zhao Deyong, Wang Zheng

5 August 2020

Note: Zhao Deyong has over 10 years of experience in asset appraisal and holds the certificate of asset valuer. Wang Zheng has over 6 years of experience in asset appraisal and holds the certificate of asset valuer.

—I-41— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

All Equity Interests of Xiamen Road & Bridge Sunstone Co., Ltd. in connection with Proposed Equity Increase in Xiamen Road & Bridge Sunstone Co., Ltd. by Xiamen Port Development Co., Ltd.

Asset Valuation Report

Appendix

(I) Economic behavior documents related to this valuation (photocopy);

(II) Special audit report of the appraised entity (photocopy);

(III) The main ownership certification materials involved in the subject of valuation (photocopy);

(IV) Commitment letter of the principal and the appraised entity (photocopy);

(V) Commitment letter of the signing valuer (photocopy);

(VI) Business licenses of the principal and the appraised entity (photocopy);

(VII) Qualification certificate of the Asset Valuation Institution (photocopy);

(VIII) Duplicate of the business license for legal person of the Valuation Institution (photocopy);

(IX) Qualification certificate of the asset valuer responsible for the appraisal business (photocopy);

(X) Breakdown of asset valuation;

(XI) Calculation table of income approach.

—I-42— APPENDIX I VALUATION REPORT OF XIAMEN SUNSTONE

Summary of Income Approach Results

Benchmark Assessment Date: 31 December 2019

Appraised entity: Xiamen Road & Bridge Sunstone Co., Ltd. (Consolidation of the parent company and branches ) Amount unit: RMB’0,000

Expected Data Perpetual Item 2020 2021 2022 2023 2024 Period Operating income ...... 80,566.99 82,778.77 84,599.05 85,181.96 86,033.51 86,033.51 Less: Operating costs ...... 65,996.24 68,251.49 70,442.29 71,806.45 72,646.32 72,312.35 Business taxes and surcharges ...... 390.91 396.40 401.37 400.75 404.04 404.04 Sales expenses ...... 391.56 400.58 410.80 419.52 428.85 428.40 Management expenses .... 4,249.31 4,463.61 4,567.62 4,641.62 4,697.80 4,514.84 Research and development expenses ...... —————— Financial expenses ...... 1,573.75 1,577.55 1,580.68 1,581.68 1,583.15 1,583.15 Asset impairment losses . . —————— Add: Net income from changes in fair value ...... —————— Investment income ...... —————— Other items affecting operating profits ...... —————— Operating profits ...... 7,965.22 7,689.12 7,196.29 6,331.94 6,273.36 6,790.74 Add: Non-operating income .... —————— Less: Non-operating expenses . . . —————— Total profits ...... 7,965.22 7,689.12 7,196.29 6,331.94 6,273.36 6,790.74 Less: Income tax ...... 2,002.71 1,933.60 1,810.44 1,594.37 1,579.75 1,709.09 Net profits ...... 5,962.51 5,755.53 5,385.85 4,737.57 4,693.62 5,081.65 Add: Interest expenses after taxation ...... 1,076.48 1,076.48 1,076.48 1,076.48 1,076.48 1,076.48 Depreciation and amortisation ...... 1,850.94 1,563.74 1,760.53 1,760.21 1,781.14 1,263.76 Less: Capital expenditure ...... 1,234.23 82.18 2,713.44 151.14 390.92 2,248.14 Increase in working capital ...... 2,633.33 243.37 15.53 -303.68 99.27 178.71 FCFF ...... 5,022.36 8,070.20 5,493.88 7,726.80 7,061.04 5,173.74 Discounting years ...... 1.00 2.00 3.00 4.00 5.00 — Discount rate ...... 12.18% 12.18% 12.18% 12.18% 12.18% 12.18% Discount factor ...... 0.89 0.79 0.71 0.63 0.56 4.62 Present value of the FCFF ...... 4,477.05 6,412.89 3,891.64 4,879.08 3,974.58 23,809.44 Total present value of the FCFF ... 47,444.68 Add: Surplus assets ...... 16,128.13 Non-consolidated long- term equity investment ...... 127,560.78 Non-operating assets ..... 4,672.72 Less: Non-operating liabilities . . 14,540.92 Interest-bearing liabilities ...... 35,000.00 Value of all equity interests of shareholders ...... 146,270.00

—I-43— APPENDIX II VALUATION REPORT OF THE TARGET COMPANY

This Appendix II contains the English translation of the Valuation Report of the Target Company and its equity interest prepared by the PRC Qualified Valuer, using income approach which is the basis of the determination of the Equity Transfer Consideration. In case of discrepancy between the English translation and the Chinese version, the Chinese version shall prevail. All Equity Interests of Xiamen Road and Bridge Building Materials Co., Ltd. in connection with Proposed Equity Transfer by Xiamen Port Development Co., Ltd. Asset Valuation Report Text Da Xue Ping Gu Ping Bao Zi [2020] No. 840010 To: Xiamen Port Development Co., Ltd. and Xiamen Road & Bridge Sunstone Co., Ltd. Xiamen Academic Practice Valuer Co., Ltd. (廈門市大學資產評估土地房地產估價有限責任公司) accepts your engagement to conduct the appraisal on the market value as at 31 December 2019 of all equity interests of Xiamen Road and Bridge Building Materials Co., Ltd. in connection with the proposed equity transfer by Xiamen Port Development Co., Ltd. in accordance with requirements under relevant laws, administrative regulations and asset valuation standards, in an independent, objective and fair manner, by using the asset-based approach and income approach and following necessary appraisal procedures. The information on asset valuation is set forth herein as follows: I. Principals, Appraised Entity and Other Users of the Asset Valuation Report as stipulated in the Asset Valuation Commission Contract The principals of this valuation are Xiamen Port Development Co., Ltd. and Xiamen Road & Bridge Sunstone Co., Ltd. and the appraised entity is Xiamen Road and Bridge Building Materials Co., Ltd. (I) General information about the principals 1. Principal—Xiamen Port Development Co., Ltd. (1) Particulars of Registration Company name and abbreviation: Xiamen Port Development Co., Ltd. (hereinafter referred to as “Port Development”) Unified social credit code: 913502007054097384 Domicile: 20th and 21st Floor, Gangwu Plaza, 31 Donggang North Road, Huli District, Xiamen, Fujian Legal representative: Chen Zhaohui Stock abbreviation: Xiamen Port Registered capital: RMB531,000,000 Business term: Until 20 April 2049 Business nature: Other joint stock limited company (listed) Business scope: 1. Cargo handling and warehousing services (excluding hazardous chemicals) on cargo ports, loading & unloading and transportation, terminal operations and other port facilities and services, and other unstated water transportation auxiliary activities (excluding activities that require a license); 2. domestic cargo transportation agency; 3. other warehousing services (excluding activities that require a license); 4. supply chain management; 5. all types of import and export of goods and technologies (no further attachment for catalog of import & export commodities), except those goods and technologies the State restricts companies to operate or prohibits to import and export; 6. trade agency, other trade brokerage and agency; 7. wholesale of metals and metal mines (excluding hazardous chemicals and monitoring chemicals), coal and coal products (excluding hazardous

— II-1 — APPENDIX II VALUATION REPORT OF THE TARGET COMPANY chemicals and monitoring chemicals), building materials and other chemical products (excluding hazardous chemicals and monitoring chemicals), non-metallic minerals and products (excluding hazardous chemicals and monitoring chemicals), other machinery equipment and electronics, electrical equipment, hardware products, clothes, textiles, knitwear and raw materials, other household goods, stationery, sports goods and equipment (excluding crossbows), crafts and collectibles (excluding cultural relics, ivory and products thereof), and other agricultural and animal husbandry products; 8. self-owned real estate business activities. (For business activities subject to examination and approval according to laws and regulations, relevant approval certificate shall be obtained).

The sales business of building materials of Port Development is mainly operated and managed by its subsidiary Xiamen Road and Bridge Building Materials Co., Ltd. (hereinafter referred to as “Road and Bridge Building Materials”). The main businesses of Road and Bridge Building Materials are production, processing, wholesale and retail of commercial concrete and building materials, etc.

— II-2 — APPENDIX II VALUATION REPORT OF THE TARGET COMPANY hazardous chemicals and monitoring chemicals); 6. technology R&D and consulting services in relation to building materials; 7. professional computer application software development; 8. real estate development; 9. wholesale of coal.

(2) Basic information Controlled by XRBG, Xiamen Road & Bridge Sunstone Co., Ltd. is a modern state-owned building material company featuring integration of scientific research, industry and trade. The company was established in September 2003 with a registered capital of RMB100 million. By the end of 2019, its total assets reached RMB2.22 billion, net assets reached RMB873 million, and the total number of employees reached 1,500, with an annual output of more than 13 million m3 of ready-mixed concrete and more than 200,000 tons of admixtures.

(II) Particulars of the appraised entity 1. Company profile Company name and abbreviation: Xiamen Road and Bridge Building Materials Co., Ltd. (hereinafter referred to as “Road and Bridge Building Materials”) Business License Registration No.: 91350200260145150A Address: No. 4 Haicang Bridge West, Xiamen Legal representative: Fang Chaojun Date of establishment: 24 October 1995 Registered capital: RMB70 million Paid-in capital: RMB70 million Business nature: State-owned enterprise

Main scope of business: 1. wholesale of building materials; 2. road cargo transportation (excluding transportation of dangerous goods); 3. mining of clay and other sand and gravel; 4. construction stone processing; 5. manufacturing of cement products; 6. manufacturing of concrete structural components; 7. manufacturing of other cement-like products; 8. wholesale of electrical equipment; 9. wholesale of other mechanical equipment and electronic products; 10. other warehousing industries (excluding items subject to permits and approval); 11. earthwork (excluding blasting); 12. landscape and greening engineering construction; 13. other unlisted civil engineering constructions (excluding items subject to permits and approval); 14. other human resource services (excluding items subject to permits and approval); 15. automobile rental (excluding operation); 16. construction decoration industry; 17. domestic freight agency; 18. promotion services for new material technology; 19. manufacturing of other special chemical products (excluding hazardous chemicals, restricted chemicals and non-pharmaceutical precursor chemicals); (Only the branch that has obtained the license can operate the above business scope which involves permits and approval).

2. Major historical evolution (1) Establishment of Road and Bridge Building Materials On 11 September 1995, Xiamen Municipal Administration for Industry and Commerce issued the Notice of Pre-approval of Enterprise Name (《企業名稱預先核准通知書》), pre-approving the registration and establishment of a company in the name of “Xiamen Road and Bridge Building Materials Co., Ltd.” by Pan Shijian.

— II-3 — APPENDIX II VALUATION REPORT OF THE TARGET COMPANY

On 11 October 1995, Xiamen Nongxin Accounting Firm (廈門農信會計師事務所) issued Xia Xin Kuai (Yan) Zi [1995] No. 467 Capital Verification Report, proving that, as of 27 September 1995, Xiamen Road and Bridge Building Materials received a registered capital of RMB5 million in total paid by all shareholders, all in currency. Of which, Xiamen Road and Bridge Construction Investment Corporation invested RMB4 million in currency capital, accounting for 80% of the registered capital; Xiamen Road and Bridge Engineering Materials Company (廈門市路橋工程物資公司) invested RMB1 million in currency capital, accounting for 20% of the registered capital.

On 24 October 1995, Xiamen Road and Bridge Building Materials established and registered with Xiamen Municipal Administration of Industry and Commerce, and received the Business License with the registration number of 350200100011396. At the time of its establishment, the name was “Xiamen Road and Bridge Building Materials Co., Ltd.”. The address was 8th floor, Jinxing Mansion, Hubin North Road. The legal representative was Pan Shijian. Its registered capital and paid-in capital were both RMB5 million. The company type was domestic joint venture with its business scope including “1. wholesale and retail of concrete, building materials, electrical machinery and equipment; 2. truck freight and storage”. The business term was from 24 October 1995 to 23 October 2015.

When Road and Bridge Building Materials was established, the shareholding structure of the company was as follows: Unit: RMB’0,000

Proportion in No. Name of shareholder Paid-in capital registered capital 1 Xiamen Road and Bridge Construction Investment Corporation (廈門市路橋建設投資總公司) ...... 400 80% 2 Xiamen Road and Bridge Engineering Materials Company (廈門市路橋工程物資公司)...... 100 20% Total ...... 500 100%

When Road and Bridge Building Materials was founded, in accordance with the requirements of the Company Law and other laws and administrative regulations, the shareholders’ general meeting, the board of directors, the manager and the supervisory committee and other organizations were set. Pan Shijian was the chairman; Zhong Xiaohui concurrently served as the director and general manager; Huang Lingqiang, Jiang Kongque, Hong Hexiang, Li Zhiwei and Xiao Zhongming were directors; Zhang Yaming, Ye Feng, and Liu Songqing were supervisors.

(2) Details of major changes after the establishment of Road and Bridge Building Materials are as follows:

No. Completion date Specific matters 1 May 1998 The registered capital increased to RMB20 million. 2 December 2000 Xiamen Road and Bridge Construction Investment Corporation transferred its 95% equity in Road and Bridge Building Materials to Xiamen Road and Bridge Co., Ltd. at a consideration of RMB45.6361 million. 3 November 2004 The name of the shareholder “Xiamen Road and Bridge Co., Ltd.” was changed to “Xiamen Port Development Co., Ltd.”. 4 May 2013 The registered capital increased to RMB70 million. 5 December 2015 The name of the shareholder “Xiamen Road and Bridge Engineering Materials Company” was changed to “ Xiamen Road & Bridge Engineering Material Co., Ltd.”.

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3. Shareholding structure After all previous capital increase and equity transfer, as of the Benchmark Assessment Date, the paid-in capital of Road and Bridge Building Materials was RMB70 million. The name of shareholder, the amount of capital contribution and capital contribution ratio are as follows:

Name of shareholder, the amount of capital contribution and capital contribution ratio

Amount of capital Capital contribution contribution ratio No. Name of shareholder (RMB’0,000) (%) 1 Xiamen Port Development Company Co., Ltd. (廈門港務發展股份有限公司)...... 6,650 95 2 Xiamen Road & Bridge Engineering Material Company (廈門路橋工程物資公司) ...... 350 5 Total ...... 7,000 100

4. Organization chart of Road and Bridge Building Materials Co., Ltd.

Shareholders’ General Meeting

General Party Branch Supervisory Committee Committee

Executive Director

General Manager

Corporate Investment and Human Safety Committee Finance Office Management Development Resources Office Department Department Department Department Department Technology Huli Branch (controlling) (controlling) Nan'an Branch Haicang Branch Hailuda Company Jinluqiao Business Company (investee) Jida Building Materials Supply Chain Company

— II-5 — APPENDIX II VALUATION REPORT OF THE TARGET COMPANY

5. Main business of Road and Bridge Building Materials and its holding subsidiaries

No. Company name Business scope Main business 1 Road and Bridge Production and sales of Production and sales of concrete Building Materials building materials 2 Xiamen Port Building Materials Warehousing, transiting and Transit trade of cement, mineral Supply Chain Co., Ltd. (廈門港務 sales of building materials powder and other powder materials 建材供應鏈有限公司) 3 Xiamen Port Hailuda Building Warehousing, transiting and Cement transit trade Materials Co., Ltd. (廈門港務海路 sales of building materials 達建材有限公司) 4 Xiamen Jida Building Materials R&D, manufacturing and R&D, manufacturing and sales of Technology Co., Ltd. (廈門集大建 sales of building materials concrete additives 材科技有限公司)

6. Main process flow chart of concrete production

Customer

Supply Demand

Production Department

Issuing, releasing production order and scheduling

Operating Laboratory Making production proportion of mixture room

Mineral powder warehouse

Bulk truck Cement or bag warehouse package Fly ash warehouse Expanding agent warehouse

Bulk truck or Incoming inspection Admixture proportion of mixture

barrel package warehouse Measured by production

Storage yard Gravel hopper

Pump room Reservoir

Mixing by blender Process inspection Unloading to transport vehicle Factory inspection Transporting to the site Delivery inspection Pumping or pouring

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7. Main production equipment and capacity As of the Benchmark Assessment Date, Xiamen Road and Bridge Building Materials Co., Ltd. had 2 3-cubic meter batching plants, 2 2-cubic meter batching plants and 20 9-cubic meter mixing trucks with an annual production and sales capacity of 1 million cubic meters of concrete.

8. Assets and operations As of the Benchmark Assessment Date, 31 December 2019, the total assets of Road and Bridge Building Materials was RMB250.4967 million, the total liabilities was RMB144.6387 million, and the owner’s equity was RMB105.858 million. In 2019, it realized an operating income of RMB289.0394 million and a net profit of RMB-47,900 (the above data are the data of the parent company). The assets and financial status of the company in the preceding two years and at the Benchmark Assessment Date are as follows:

Company assets, liabilities and financial status

Unit: RMB’0,000 2017 2018 2019 Combined Parent Combined Parent Combined Parent Asset item number company number company number company Total assets ...... 27,229.65 41,142.92 28,847.93 26,420.89 28,301.55 25,049.67 Liabilities ...... 15,833.88 29,623.32 17,257.37 15,830.30 15,417.56 14,463.87 Shareholders’ equity ...... 11,395.77 11,519.60 11,590.56 10,590.59 12,883.98 10,585.80

2017 2018 2019 Combined Parent Combined Parent Combined Parent Profit item number company number company number company Operating income ...... 37,140.23 37,592.53 38,864.23 29,996.03 44,260.61 28,903.94 Total profit ...... 1,424.25 1,246.02 413.52 172.23 736.97 -12.21 Net profit ...... 1,008.63 1,053.47 385.61 226.71 558.42 -4.79 Audit agency ...... Xigema Certified Xigema Certified Xigema Certified Public Accountants Public Accountants Public Accountants (Special Ordinary (Special Ordinary (Special Ordinary Partnership) Xiamen Partnership) Partnership) Branch Xiamen Branch Xiamen Branch Audit opinions ...... Standard unqualified Standard unqualified Standard unqualified opinion opinion opinion

(III) The relationship between the consigner and the valuated unit The consigner Xiamen Port Development Co., Ltd. holds 95% of Xiamen Road and Bridge Building Materials Co., Ltd. and is the controlling shareholder of Xiamen Road and Bridge Building Materials Co., Ltd.; the consigner Xiamen Road & Bridge Sunstone Co., Ltd. (廈門路橋翔通股份有限公司) intends to acquire the equity of the valuated entity Xiamen Road and Bridge Building Materials Co., Ltd.

(IV) Other Users of the Asset Valuation Report as stipulated in the Asset Valuation Commission Contract Users of the valuation report as stipulated in the commission contract include the principal, relevant functional government departments involved in the economic behaviour corresponding to the

— II-7 — APPENDIX II VALUATION REPORT OF THE TARGET COMPANY purpose of valuation and other users of the valuation report as stipulated by the state laws and regulations.

No institutions or individuals other than the report users as stipulated in the aforesaid commission contract shall be the users of the valuation report for their acquisition of the valuation report.

II. Purpose of Valuation According to Meeting Minutes Concerning Equity Integration Project of Road and Bridge Building Materials dated 28 November 2019 and Meeting Minutes for Leaders of Xiamen Road & Bridge Sunstone Co., Ltd. ([2020] No. 4) dated 6 March 2020 of Xiamen Road & Bridge Sunstone Co., Ltd., Xiamen Port Development Co., Ltd. intended to transfer its 95% equity interest in Xiamen Road and Bridge Building Materials Co., Ltd. to Xiamen Road & Bridge Sunstone Co., Ltd..

The purpose of this valuation is to give a fair valuation of the market value of all equity interests of Xiamen Road and Bridge Building Materials Co., Ltd. as at the Benchmark Assessment Date and provide value reference basis for the economic behavior of the proposed equity transfer by Xiamen Port Development Co., Ltd..

III. The Subject and Scope of Valuation (I) The subject of valuation According to the engagement of Xiamen Port Development Co., Ltd., the subject of this valuation is all equity interests of Xiamen Road and Bridge Building Materials Co., Ltd..

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(II) The scope of valuation The scope of this valuation was based on the valuation declaration form provided by principals. The scope of valuation specifically includes: 1. The assets and liabilities of Xiamen Road and Bridge Building Materials Co., Ltd. listed on the balance sheet as at 31 December 2019 are shown in the table below:

Monetary unit: RMB

Item Carrying value 1 Current assets 192,411,936.19 2 Non-current assets 58,084,794.96 3 Among which: Available-for-sale financial assets 4 Held-to-maturity investments 5 Long-term receivables 6 Long-term equity investments 29,615,244.96 7 Investment properties 8 Fixed assets 20,828,340.38 9 Construction in progress 1,236,618.69 10 Construction materials 11 Disposal of fixed assets 12 Productive biological assets 13 Oil and gas assets 14 Intangible assets 256,662.17 15 Expenditures for development 16 Goodwill 17 Long-term deferred expenses 533,223.68 18 Deferred income tax assets 5,614,705.08 19 Other non-current assets 20 Total assets 250,496,731.15 21 Current liabilities 144,638,711.04 22 Non-current liabilities — 23 Total liabilities 144,638,711.04 24 Net assets (owner’s equities) 105,858,020.11

The above data of assets and liabilities were audited by Xiamen Branch of Xigema Certified Public Accountants (Special Ordinary Partnership), with “Xi Xia Fen Shen Zi (2020) No. 0049” Audit Report issued and valuation being conducted on the assumption that the company was audited.

2. Type and number of off-balance-sheet assets declared by the company According to the information declared by the company, this valuation does not involve off-balance-sheet assets.

(III) Reference to the asset type, quantity and carrying amount (or appraised value) involved in the report conclusion issued by other institutions This valuation used the audit report of Xiamen Road and Bridge Building Materials Co., Ltd. as at benchmark date provided by the appraised entity as the basis for the valuation, which had been audited by Xiamen Branch of Xigema Certified Public Accountants (Special Ordinary Partnership), with “Xi Xia Fen Shen Zi (2020) No. 0049” audit report issued on 27 March 2020, and the report conclusion is a standard unqualified opinion. Total assets, total liabilities and owner’s equities of

— II-9 — APPENDIX II VALUATION REPORT OF THE TARGET COMPANY

Xiamen Road and Bridge Building Materials Co., Ltd. as at benchmark date as audited in the audit report are RMB250,496,731.15, RMB144,638,711.04 and RMB105,858,020.11, respectively.

Save for the above, this report takes no reference to report conclusions provided by other institutions.

IV. Type of Value and Its Definition The type of value of this asset valuation is market value.

The following factors have been considered in selecting market value as the type of value of the valuation conclusion in this valuation: (1) purpose of valuation: aiming at Equity Transfer, this valuation is a normal market economic behaviour; (2) market condition: this valuation does not set any restrictions or requirements on the market condition; (3) subject of valuation: this valuation does not set any restrictions or requirements on the subject of valuation; (4) relevance between the type of value and valuation assumptions: valuation assumptions of this valuation are set based on a simulated fully open market with full competition to exclude the impact of non-market and abnormal factors on the valuation conclusion.

V. Benchmark Assessment Date The Benchmark Assessment Date of this asset valuation is 31 December 2019.

The Benchmark Assessment Date is determined by the principal according to the arrangements for equity transfer.

(I) Basis for economic behaviour 1. Meeting Minutes Concerning Equity Integration Project of Road and Bridge Building Materials dated 28 November 2019 of Xiamen Port Development Co., Ltd.;

2. Meeting Minutes for Leaders of Xiamen Road & Bridge Sunstone Co., Ltd. ([2020] No. 4) dated 6 March 2020 of Xiamen Road & Bridge Sunstone Co., Ltd.

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