JIANGSU YUEDA GROUP CO., LTD. (江蘇悅達集團有限公司 ) (Incorporated with Limited Liability in the PRC) U.S.$87,250,000 5.70 Per Cent

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

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities. This announcement does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state of the United States or any other jurisdiction, and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the Bonds are being offered and sold only outside the United States in offshore transactions in compliance with Regulation S under the Securities Act. This announcement and the information contained herein are not for distribution, directly or indirectly, in or into the United States. No public offer of the securities referred to herein is being or will be made in the United States.

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

Notice to Hong Kong investors: With respect to Bonds to be listed on the Stock Exchange of Hong Kong Limited, the Issuer confirms that the Bonds are intended for purchase by Professional Investors only and will be listed on the Stock Exchange of Hong Kong Limited on that basis. Accordingly, the Issuer confirms that the Bonds are not appropriate as an investment for retail investors in Hong Kong. Investors should carefully consider the risks involved.

JIANGSU YUEDA GROUP CO., LTD. (江蘇悅達集團有限公司 ) (incorporated with limited liability in the PRC) U.S.$87,250,000 5.70 per cent. Bonds due 2023 (THE “NEW BONDS”) (TO BE CONSOLIDATED AND FORM A SINGLE SERIES WITH THE U.S.$200,000,000 5.70 PER CENT. BONDS DUE 2023, TOGETHER WITH THE NEW BONDS, THE “BONDS”) (Stock Code: 40243) ISSUED BY JIANGSU YUEDA GROUP CO., LTD. (江蘇悅達集團有限公司) TABLE OF CONTENTS OFFERING CIRCULAR DATED 30 NOVEMBER 2020 ...... 1-360

IMPORTANT NOTICE

NOT FOR DISTRIBUTION INTO THE UNITED STATES IMPORTANT: You must read the following before continuing. The following applies to the offering circular (the “Offering Circular”) following this page, and you are therefore advised to read this carefully before reading, accessing or making any other use of the Offering Circular. In accessing the Offering Circular, you agree to be bound by the following terms and conditions, including any modifications to them any time you receive any information from the Issuer (as defined in the Offering Circular) as a result of such access. NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO. NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO. THE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR OTHER JURISDICTION AND THE SECURITIES MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE OR LOCAL SECURITIES LAWS. THIS OFFERING IS MADE SOLELY IN OFFSHORE TRANSACTIONS PURSUANT TO REGULATION S UNDER THE SECURITIES ACT. THE FOLLOWING OFFERING CIRCULAR MAY NOT BE FORWARDED OR DISTRIBUTED TO ANY OTHER PERSON AND MAY NOT BE REPRODUCED IN ANY MANNER WHATSOEVER, AND IN PARTICULAR, MAY NOT BE FORWARDED TO ANY U.S. ADDRESS. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS DOCUMENT, IN WHOLE OR IN PART, IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS. IF YOU HAVE GAINED ACCESS TO THIS TRANSMISSION CONTRARY TO ANY OF THE FOREGOING RESTRICTIONS, YOU ARE NOT AUTHORISED AND WILL NOT BE ABLE TO PURCHASE ANY OF THE SECURITIES DESCRIBED THEREIN. Confirmation of your Representation: In order to be eligible to view this Offering Circular or make an investment decision with respect to the securities, investors must be purchasing the securities outside the United States in an offshore transaction in reliance on Regulation S under the Securities Act. By accepting the e-mail and accessing the attached Offering Circular, you shall be deemed to have represented to the Joint Lead Managers (as defined in the Offering Circular) and the Issuer (as defined in the Offering Circular) (1) that you and any customers you represent are not, and that the electronic mail address that you gave the Issuer and to which this e-mail has been delivered is not, located in the United States and (2) that you consent to delivery of the attached Offering Circular and any amendments or supplements thereto by electronic transmission. You are reminded that the Offering Circular has been delivered to you on the basis that you are a person into whose possession the Offering Circular may be lawfully delivered in accordance with the laws of jurisdiction in which you are located and you may not, nor are you authorised to, deliver the Offering Circular to any other person. You should not reply by e-mail to this notice, and you may not purchase any securities by doing so. Any e-mail communications, including those you generate by using the “Reply” function on your e-mail software, will be ignored or rejected. The materials relating to any offering of securities described in the Offering Circular do not constitute, and may not be used in connection with, an offer or solicitation by or on behalf of any of the Issuer, the Joint Lead Managers in any place where offers or solicitations are not permitted by law. If a jurisdiction requires that the offering be made by a licensed broker or dealer and the Joint Lead Managers or any affiliate of the Joint Lead Managers are licensed brokers or dealers in that jurisdiction, the offering shall be deemed to be made by the Joint Lead Managers or such affiliate on behalf of the Issuer in such jurisdiction. The Offering Circular has been sent to you in an electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of electronic transmission and consequently neither the Joint Lead Managers or any person who controls the Joint Lead Managers nor any director, officer, employee nor agent of the Joint Lead Managers or affiliate of any such person accepts any liability or responsibility whatsoever in respect of any difference between the Offering Circular distributed to you in electronic format and the hard copy version available to you on request from the Joint Lead Managers. You are responsible for protecting against viruses and other destructive items. Your use of this e-mail is at your own risk and it is your responsibility to take precautions to ensure that it is free from viruses and other items of a destructive nature. The Offering Circular is being furnished in connection with an offering in offshore transactions outside the United States in compliance with Regulation S solely for the purpose of enabling a prospective investor to consider the purchase of the securities described in the Offering Circular. Actions that you may not take: If you receive this document by e-mail, you should not reply by e-mail to this document, and you may not purchase any securities by doing so. Any reply e-mail communications, including those you generate by using the “Reply” function on your e- mail software, will be ignored or rejected.

STRICTLY CONFIDENTIAL

JIANGSU YUEDA GROUP CO., LTD. (江蘇悅達集團有限公司) (incorporated with limited liability in the PRC)

U.S.$87,250,000 5.70 per cent. Bonds due 2023 To be consolidated and form a single series with the U.S.$200,000,000 5.70 per cent. Bonds due 2023

Issue Price: 100.00 per cent. Plus accrued interest in respect of the period from (and including) 4 December 2020 to (but excluding) 7 December 2020

The U.S.$87,250,000 5.70 per cent. bonds due 2023 (the “New Bonds”) will be issued by Jiangsu Yueda Group Co., Ltd. (江蘇悅達集團有限公司) (the “Issuer”), a company incorporated in the People’s Republic of China with limited liability, on 7 December 2020 (the “New Issue Date”) and will be consolidated and form a single series with the U.S.$200,000,000 5.70 per cent. bonds due 2023 (the “Existing Bonds”, which includes the U.S.$100,000,000 5.70 per cent. Bonds due 2023 of the Issuer (the “Original Bonds”) issued on 4 June 2020 (the “Original Issue Date”) and the U.S.$100,000,000 5.70 per cent Bonds due 2023 of the Issuer (the “October 2020 Bonds”) issued on 13 October 2020 (the “October 2020 Bonds Issue Date”), together with the New Bonds, the “Bonds”). The New Bonds will have the same terms and conditions (in all respects except for the issue date, the timing for complying with the Registration Conditions (as defined in the terms and conditions of the Bonds (the “Terms and Conditions”)) and making of the NDRC Post-issue Filing (as defined in the Terms and Conditions) and the Foreign Debt Registration (as defined below) and the filing of the Bonds under the Cross Border Financing Circular (as defined below)) as the Existing Bonds. The Existing Bonds are, and the New Bonds will be, constituted by, a trust deed dated 4 June 2020 (the “Original Trust Deed”), supplemented by a supplemented trust deed dated 13 October 2020 (the “Supplemental Trust Deed”), and as to be supplemented by a second supplemental trust deed dated on or about 7 December 2020 (the “Second Supplemental Trust Deed”), and as otherwise amended and/or supplemented and/or replaced from time to time (the “Trust Deed”). The Existing Bonds are, and the New Bonds will be, the subject of an agency agreement dated 4 June 2020 (the “Original Agency Agreement”), supplemented by a supplemental agency agreement dated 13 October 2020 (the “Supplemental Agency Agreement”), and as to be supplemented by a second supplemental agency agreement dated on or about 7 December 2020 (the “Second Supplemental Agency Agreement”), and as otherwise amended and/or supplemented and/or replaced from time to time (the “Agency Agreement”). References in this Offering Circular to the “Bonds” shall be to the Existing Bonds and the New Bonds collectively. Upon issuance of the New Bonds, the aggregate principal amount of outstanding Bonds will be U.S.$287,250,000. The New Bonds will bear interest on their outstanding principal amount from and including 4 December 2020 at the rate of 5.70 per cent. per annum. Interest on the Bonds is payable semi-annually in arrear in equal instalments on 4 June and 4 December in each year, commencing on 4 December 2020 (in the case of the Original Bonds and the October 2020 Bonds) or 4 June 2021 (in the case of the New Bonds). The Bonds constitute direct, unconditional, unsubordinated and (subject to Condition 4(a) (Negative Pledge) of the Terms and Conditions) unsecured obligations of the Issuer and shall at all times rank pari passu and without any preference among themselves. The payment obligations of the Issuer under the Bonds shall, save for such exceptions as may be provided by applicable legislation and subject to Condition 4(a) (Negative Pledge) of the Terms and Conditions, at all times rank at least equally with all its other present and future unsecured and unsubordinated obligations. Pursuant to the Circular on Promoting the Reform of the Administrative System on the Issuance by Enterprises of Foreign Debt Filings and Registrations (國家發展改革委關於推進企業發行外債備案登記制管理改革的通知 (發改外資[2015]2044 號)) (the “NDRC Circular”) issued by the National Development and Reform Commission of the PRC or its local counterparts (“NDRC”) on 14 September 2015 which came into effect on the same day, the Issuer has registered the issuance of the Bonds with the NDRC and obtained a certificate from NDRC on 30 May 2019 with an extension on 21 May 2020 evidencing such registration and intends to provide the requisite information on the issuance of the New Bonds to the NDRC within 10 Registration Business Days (as defined in the Terms and Conditions) after the New Issue Date. The Issuer undertakes that it shall (i) within 15 Registration Business Days after the Original Issue Date, the October 2020 Bonds Issue Date and the New Issue Date, respectively, register or cause to be registered with the State Administration of Foreign Exchange (the “SAFE”) the Bonds pursuant to the Administrative Measures for Foreign Debt Registration and its operating guidelines, effective as at 13 May 2013 (the “Foreign Debt Registration”), (ii) use its best endeavours to complete the Foreign Debt Registration and obtain a registration record from SAFE on or before the Registration Deadline (as defined in the Terms and Conditions), (iii) if applicable, as soon as practicable, and in any case as soon as required or requested to do so by any relevant governmental authority, file or cause to be filed with SAFE the Bonds pursuant to the Circular of the People’s Bank of China on Implementing Overall Macro Prudential Management System for Nationwide Cross-border Financing（中國人民銀行關於在全國範圍內實施全口徑跨境融資宏觀審慎管理的通知) (the “Cross Border Financing Circular”) and (iv) comply with all applicable PRC laws and regulations in relation to the Bonds, including but not limited to the Foreign Debt Registration and, if applicable, the Cross Border Financing Circular and any implementing measures promulgated thereunder from time to time. Unless previously redeemed, or purchased and cancelled, the Issuer will redeem each Bond at its principal amount on 4 June 2023 (the “Maturity Date”). At any time, on giving not less than 30 nor more than 60 days’ notice to the Bondholders (as defined below) (which notice shall be irrevocable), the Issuer may redeem the Bonds in whole, but not in part, at their principal amount (together with any interest accrued to but excluding the date fixed for redemption) if (i) the Issuer satisfies China Construction Bank (Asia) Corporation Limited as trustee (the “Trustee”) immediately prior to the giving of such notice that the Issuer has or will become obliged to pay Additional Tax Amounts (as defined in the Terms and Conditions) as a result of any change in, or amendment to, the laws or regulations of the PRC or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of, or the stating of an official position with respect to, such laws or regulations (including but not limited to any decision by a court of competent jurisdiction), which change or amendment becomes effective on or after 28 May 2020, and (ii) such obligation cannot be avoided by the Issuer taking reasonable measures available to it. At any time following the occurrence of a Relevant Event (as defined in the Terms and Conditions), each holder of Bonds (each a “Bondholder”) will have the right, at such Bondholder’s option, to require the Issuer to redeem all, but not some only, of that Bondholder’s Bonds on the Put Settlement Date (as defined in the Terms and Conditions) at 101 per cent. (in the case of a redemption for a Change of Control Event (as defined in the Terms and Conditions)) or 100 per cent. (in the case of a redemption for a No Registration Event (as defined in the Terms and Conditions)) of their principal amount, together in each case with accrued interests up to but excluding such Put Settlement Date. See “Terms and Conditions – Redemption and Purchase”. The New Bonds will be issued in denominations of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof. Investing in the Bonds involves risks. See “Risk Factors” beginning on page 13 for a discussion of certain factors to be considered in connection with an investment in the Bonds. The Bonds have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. For a description of these and certain further restrictions on offers and sales of the Bonds and the distribution of this Offering Circular, see “Subscription and Sale”. The Original Bonds have been listed on The Stock Exchange of Hong Kong Limited (“SEHK”) from 5 June 2020 (stock code: 40243) and the October 2020 Bonds have been listed on the SEHK from 14 October 2020. Application will be made for the listing of the New Bonds by way of debt issues to professional investors (as defined in Chapter 37 of the Rules Governing the Listing of Securities on SEHK) (together, “Professional Investors”) only. The Offering Circular is for distribution to Professional Investors only. Notice to Hong Kong investors: The Issuer confirms that the Bonds are intended for purchase by Professional Investors only and have been listed on SEHK on that basis. Accordingly, the Issuer confirms that the Bonds are not appropriate as an investment for retail investors in Hong Kong. Investors should carefully consider the risks involved. SEHK has not reviewed the contents of this document, other than to ensure that the prescribed form disclaimer and responsibility statements, and a statement limiting distribution of this document to Professional Investors only have been reproduced in this document. Listing of the Bonds on SEHK is not to be taken as an indication of the commercial merits or credit quality of the Bonds or the Issuer or quality of disclosure in this document. Hong Kong Exchanges and Clearing Limited and SEHK take no responsibility for the contents of this document, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document. The New Bonds will be represented by beneficial interests in a global certificate (a “ Global Certificate”) in registered form, which will be registered in the name of a nominee for, and shall be deposited on or about the New Issue Date with a common depositary for Euroclear Bank SA/NV (“Euroclear”) and Clearstream Banking S.A. (“Clearstream”). Beneficial interests in the Global Certificate will be shown on, and transfer thereof will be effected only through, records maintained by Euroclear and Clearstream. Except as described herein, certificates for the New Bonds will not be issued in exchange for interests in the Global Certificate. The New Bonds are expected to be rated “BBBg-” by China Chengxin (Asia Pacific) Credit Ratings Company Limited (“CCXAP”). A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency.

Joint Global Coordinators BOSC International China International Capital Corporation

Joint Bookrunners and Joint Lead Managers

BOSC International China International Capital Corporation Industrial Bank Co., Ltd. Dongxing Securities (Hong Kong) Hong Kong Branch

Offering Circular dated 30 November 2020

NOTICE TO INVESTORS

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

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

The Issuer has prepared this Offering Circular solely for use in connection with the proposed offering of the New Bonds described in this Offering Circular. This Offering Circular does not constitute an offer of, or an invitation by or on behalf of BOSC International Company Limited, China International Capital Corporation Hong Kong Securities Limited, Industrial Bank Co., Ltd. Hong Kong Branch and Dongxing Securities (Hong Kong) Company Limited (together, the “Joint Lead Managers” and each a “Joint Lead Manager”) or the Issuer to subscribe for or purchase any of the New Bonds. The distribution of this Offering Circular and the offering of the New Bonds in certain jurisdictions may be restricted by law. Persons into whose possession this Offering Circular comes are required by the Issuer and the Joint Lead Managers to inform themselves about and to observe any such restrictions. No action is being taken to permit a public offering of the New Bonds or the distribution of this Offering Circular in any jurisdiction where action would be required for such purposes. There are restrictions on the offer and sale of the New Bonds, and the circulation of documents relating thereto, in certain jurisdictions including the United States, the European Economic Area, the United Kingdom, Hong Kong, the PRC, Singapore and Japan and to persons connected therewith. For a description of certain further restrictions on offers and sales of the New Bonds, and distribution of this Offering Circular, see “Subscription and Sale”. By purchasing the New Bonds, investors represent and agree to all of those provisions contained in that section of this Offering Circular. This Offering Circular is personal to each offeree and does not constitute an offer to any other person or to the public generally to subscribe for, or otherwise acquire, New Bonds. Distribution of this Offering Circular to any other person other than the prospective investor and any person retained to advise such prospective investor with respect to its purchase is unauthorised. Each prospective investor, by accepting delivery of this Offering Circular, agrees to the foregoing and to make no photocopies of this Offering Circular or any documents referred to in this Offering Circular.

No person has been or is authorised to give any information or to make any representation concerning the Issuer or the New Bonds other than as contained herein and, if given or made, any such other information or representation should not be relied upon as having been authorised by the Issuer, the Joint Lead Managers, the Trustee or the Agents (as defined in the Terms and Conditions) or any of their respective directors, officers, employees, agents, representatives, affiliates or

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advisers or any person who controls any of them. Neither the delivery of this Offering Circular nor any offering, sale or delivery made in connection with the issue of the New Bonds shall, under any circumstances, constitute a representation that there has been no change or development reasonably likely to involve a change in the affairs of the Issuer since the date hereof or create any implication that the information contained herein is correct as at any date subsequent to the date hereof. This Offering Circular does not constitute an offer of, or an invitation by or on behalf of the Issuer, the Joint Lead Managers, the Trustee or the Agents or any of their respective directors, officers, employees, agents, representatives, affiliates or advisers or any person who controls any of them to subscribe for or purchase the New Bonds and may not be used for the purpose of an offer to, or a solicitation by, anyone in any jurisdiction or in any circumstances in which such offer or solicitation is not authorised or is unlawful.

None of the Joint Lead Managers, the Trustee or the Agents or any of their respective affiliates, directors, officers, employees, agents, representatives or advisers or any person who controls any of them has independently verified the information contained in this Offering Circular. Accordingly, no representation, warranty or undertaking, express or implied, is made or given and no responsibility or liability is accepted, by the Joint Lead Managers, the Trustee or the Agents or any of their respective affiliates, directors, officers, employees, agents, representatives or advisers or any person who controls any of them, as to the accuracy, completeness or sufficiency of the information contained in this Offering Circular or any other information supplied in connection with the New Bonds. Nothing contained in this Offering Circular is, or shall be relied upon as, a promise, representation or warranty by the Joint Lead Managers, the Trustee or the Agents or any of the respective affiliates, directors, officers, employees, agents, representatives or advisers or any person who controls any of them. This Offering Circular is not intended to provide the basis of any credit or other evaluation nor should it be considered as a recommendation by any of the Issuer, the Joint Lead Managers, the Trustee or the Agents or any of the respective affiliates, directors, officers, employees, agents, representatives or advisers or any person who controls any of them that any recipient of this Offering Circular should purchase the New Bonds. Each person receiving this Offering Circular acknowledges that such person has not relied on the Joint Lead Managers, the Trustee or the Agents or any of the respective affiliates, directors, officers, employees, agents, representatives or advisers or any person who controls any of them in connection with its investigation of the accuracy of such information or its investment decision, and each such person must rely on its own examination of the Issuer and the merits and risks involved in investing in the New Bonds. See “Risk Factors” for a discussion of certain factors to be considered in connection with an investment in the New Bonds.

To the fullest extent permitted by law, none of the Joint Lead Managers, the Trustee or the Agents or any of their respective affiliates, directors, officers, employees, agents, representatives or advisers or any person who controls any of them accepts any responsibility for the contents of this Offering Circular and assume no responsibility for the contents, accuracy, completeness or sufficiency of any such information or for any other statement, made or purported to be made by the Joint Lead Managers, the Trustee or the Agents or any of their respective affiliates, directors, officers, employees, agents, representatives or advisers or any person who controls any of them or on their behalf in connection with the Issuer or the issue and offering of the New Bonds. Each of the Joint Lead Managers, the Trustee and the Agents and their respective affiliates, directors, officers, employees, agents, representatives or advisers or any person who controls any of them accordingly disclaims all and any liability, whether arising in tort or contract or otherwise, which it might otherwise have in respect of this Offering Circular or any such statement. None of the Joint Lead Managers, the Trustee or the Agents or any of their respective affiliates, directors, officers, employees, agents, representatives or advisers or any person who controls any of them undertakes to review the results of operations, financial condition or affairs of the Issuer during the life of the arrangements contemplated by this Offering Circular nor to advise any investor or potential investor in the New Bonds of any information coming to the attention of the Joint Lead Managers, the Trustee or the Agents or any of their respective affiliates, directors, officers, employees, agents, representatives or advisers or any person who controls any of them.

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

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Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

IN CONNECTION WITH THIS OFFERING, EACH JOINT LEAD MANAGER WHICH IS APPOINTED AND ACTING IN ITS CAPACITY AS STABILISATION MANAGER (THE “STABILISATION MANAGER”) OR ANY PERSON(S) ACTING ON BEHALF OF THE STABILISATION MANAGER MAY OVER-ALLOT NEW BONDS OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE(S) OF THE NEW BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER, STABILISATION MAY NOT OCCUR. ANY STABILISATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE TERMS OF THE OFFER OF THE NEW BONDS IS MADE AND, IF BEGUN, MAY CEASE AT ANY TIME AND IN ANY EVENT MUST BE BROUGHT TO AN END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE DATE AND 60 DAYS AFTER THE DATE OF ALLOTMENT OF THE NEW BONDS. ANY STABILISATION ACTION OR OVER- ALLOTMENT MUST BE CONDUCTED IN ACCORDANCE WITH ALL APPLICABLE LAWS AND RULES. THESE ACTIVITIES WILL BE UNDERTAKEN SOLELY FOR THE ACCOUNT OF THE STABILISATION MANAGER AND NOT FOR OR ON BEHALF OF THE ISSUER.

This Offering Circular includes particulars given in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) for the purpose of giving information with regard to the Issuer and the Group. The Issuer accepts full responsibility for the accuracy of the information contained in this Offering Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

Listing of the New Bonds on SEHK is not to be taken as an indication of the merits of the Issuer or the New Bonds. In making an investment decision, investors must rely on their own examination of the Issuer and the terms of the offering of the New Bonds, including the merits and risks involved. See “Risk Factors” for a discussion of certain factors to be considered in connection with an investment in the New Bonds. The Issuer, the Joint Lead Managers, the Trustee and the Agents and their respective affiliates, officers, employees, directors, agents, representatives or advisers or any person who controls any of them are not making any representation to any purchaser of the New Bonds regarding the legality of any investment in the New Bonds by such purchaser under any legal investment or similar laws or regulations. Prospective investors should not construe anything in this Offering Circular as legal, business or tax advice. Each prospective investor should determine for itself the relevance of the information contained in this Offering Circular and consult its own legal, business and tax advisers as needed to make its investment decision and determine whether it is legally able to purchase the New Bonds under applicable laws or regulations.

Warning

The contents of this Offering Circular have not been reviewed by any regulatory authority of any jurisdiction. You are advised to exercise caution in relation to the offering of the New Bonds. If you are in any doubt about any of the contents of this Offering Circular, you should obtain independent professional advice.

Industry and Market Data

Market data and certain industry forecasts used throughout this Offering Circular have been obtained based on internal surveys, market research, publicly available information and industry publications. Industry publications generally state that the information that they contain has been obtained from sources believed by the Issuer to be reliable and accurate but that the accuracy and completeness of that information is not guaranteed. Similarly, internal surveys, industry forecasts and market research, while believed to be reliable, have not been independently verified, and none of the Issuer, the Joint Lead Managers or their respective directors, officers and advisers makes any representation as to the correctness, accuracy or completeness of that information. In addition, third-party information providers may have obtained information from market participants and such information may not have been independently verified.

Presentation of Financial Information

The Issuer prepares its consolidated financial statements in accordance with Accounting Standards for Business Enterprises

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(the “PRC GAAP”). There are certain differences between PRC GAAP and the International Financial Reporting Standards (the “IFRS”). For a summary of the differences, please see “Summary of Certain Differences between PRC Accounting Standards and International Financial Reporting Standards”. The Issuer has not prepared any reconciliation of such consolidated financial information between PRC GAAP and IFRS and has not quantified such differences. The Issuer’s audited consolidated financial information as at and for the years ended 31 December 2017, 2018 and 2019 have been extracted from the consolidated financial statements of the Issuer as at and for the years ended 31 December 2018 and 2019 (the “Issuer’s Audited Financial Statements”) audited by SuyaJincheng CPA (Limited Liability Partnerships) (“SuyaJincheng”), the independent auditor of the Issuer, included elsewhere in this Offering Circular, together with the auditor’s report in respect of the financial years ended 31 December 2018 and 2019.

iv 6

CERTAIN DEFINITIONS, CONVENTIONS AND CURRENCY PRESENTATION

All non-company specific statistics and data relating to the Issuer’s industry or the economies of pertinent jurisdictions, such as the PRC, have been extracted or derived from publicly available information and various government sources. The Issuer believes that the sources of this information are appropriate for such information and the Issuer has taken reasonable care in extracting and reproducing such information. The Issuer has no reason to believe that such information is false or misleading or that any fact has been omitted that would render such information false or misleading. However, such information has not been independently verified by the Issuer, the Joint Lead Managers, the Trustee or the Agents or by their respective affiliates, officers, employees, directors, advisers, representatives and agents or any person who controls any of them and none of the Issuer, the Joint Lead Managers, the Trustee or the Agents or their respective affiliates, officers, employees, directors, advisers, representatives and agents or any person who controls any of them makes any representation as to the correctness, accuracy or completeness of such information. In addition, third-party information providers may have obtained information from market participants and such information may not have been independently verified. Accordingly, such information should not be unduly relied upon.

This Offering Circular contains a translation of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise specified, where financial information in relation to the Issuer has been translated into U.S. dollars, it has been so translated, for convenience only, at the rate of CNY6.9618 to U.S.$1.00 (the noon buying rate in New York City on 31 December 2019 as set forth in the weekly H.10 statistical release of the Federal Reserve Board of the Federal Reserve Bank of New York). Further information regarding exchange rate is set forth in “Exchange Rate” in this Offering Circular. No representation is made that the Renminbi amounts referred to in this Offering Circular could have been or could be converted into U.S. dollars at any particular rate or at all.

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

Historical amounts translated into Renminbi have been translated at historical rates of exchange. Such translations should not be construed as representations that the amounts referred to herein could have been or could be converted into Renminbi at those rates or any other rate at all.

In this Offering Circular, unless otherwise specified or the context requires otherwise:

References herein to the “Issuer” are to Jiangsu Yueda Group Co., Ltd. (江蘇悅達集團有限公司), references herein to the “Group” are to the Issuer and its subsidiaries.

References herein to “China”, “mainland China” or the “PRC” are to the People’s Republic of China and, for the purpose of this Offering Circular only, exclude Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and Taiwan, and all references to “Hong Kong” are to the Hong Kong Special Administrative Region of the People’s Republic of China.

References herein to “Renminbi”, “RMB” or “CNY” are to the lawful currency of the PRC, references herein to “U.S. dollars”, “USD”, “U.S.$”, “US cents” or “US¢” are to the lawful currency of the United States of America, all references to the “United States” or “U.S.” are to the United States of America, and references herein to “PRC Accounting Standards” are to the Accounting Standards for Business Enterprises issued by the Ministry of Finance of the PRC on 15 February 2006 and the Application Guidance for Accounting Standards for Business Enterprises, Interpretations of Accounting Standards for Business Enterprises and other relevant regulations issued thereafter. References to “Dongfeng Yueda Kia” are to Dongfeng Yueda Kia Cars Co., Ltd. (東風悅達起亞汽車有限公司).

References to “GFA” are to gross floor area.

References to “Hunan Yueda Development” are to Hunan Yueda Development Investment Co., Ltd. ( 湖南悅達發展投

7 v

資有限公司).

References to “NDRC” are to the National Development and Reform Commission of the PRC or its local counterparts.

References to “PBOC” are to the People’s Bank of China, the central bank of the PRC.

References to “PRC Government” are to the central government of the PRC, including all political subdivisions (including provincial, municipal and other regional or local governmental entities) and instrumentalities thereof, or where the context requires, any of them.

References to “Yancheng SASAC” are to the State-owned Assets Supervision and Administration Commission of Yancheng Municipal Government.

References to “Yueda Auto Development” are to Yueda Auto Development Co., Ltd. (悅達汽車發展有限公司).

References to “Yueda Auto Parts” are to Jiangsu Yueda Auto Parts Co., Ltd. (江蘇悅達汽車配件有限公司).

References to “Yueda Auto Research” are to Jiangsu Yueda Automobile Research Institute Co., Ltd. (江蘇悅達汽車研究院有限公司).

References to “Yueda Capital” are to Yueda Capital Co., Ltd. (悅達資本股份有限公司).

References to “Yueda Da Sheng” are to Jiangsu Yueda Da Sheng Knitwear Co., Ltd. (江蘇悅達大聖針織服裝有限公司).

References to “Yueda Healthcare” are to Yueda Healthcare Industry Development Co., Ltd. (悅達健康產業發展有限公司).

References to “Yueda Hong Kong” are to Yue Da Group (H.K.) Co., Limited (悅達集團（香港）有限公司).

References to “Yueda International Holdings” are to Yue Da International Holdings Limited (悅達國際控股有限公司 ) (HK. 0629).

References to “Yueda Investment” are to Jiangsu Yueda Investment Co., Ltd. (江蘇悅達投資股份有限公司) (SH. 600805).

References to “Yueda Logistics” are to Jiangsu Yueda Logistics Co., Ltd. (江蘇悅達物流有限公司).

References to “Yueda New Industrial” are to Shanghai Yueda New Industrial Group Co., Ltd. (上海悅達新實業集團有限公司).

References to “Yueda New Energy Cars” are to Yancheng Yueda Zhi Chuang New Energy Cars Co., Ltd. (鹽城悅達智創新能源汽車有限公司).

References to “Yueda South” are to Jiangsu Yueda South Holding Co., Ltd. (江蘇悅達南方控股有限公司). References to “Yueda Textile” are to Jiangsu Yueda Textile Group Co., Ltd. (江蘇悅達紡織集團有限公司).

References to “Yueda Yellow Sea Tractor” are to Jiangsu Yueda Yellow Sea Tractor Manufacture Co., Ltd. (江蘇悅達黃海拖拉機製造有限公司) (formerly known as Jiangsu Yueda Yellow Sea Handheld Tractor Co., Ltd. (江蘇悅達黃海手扶拖拉機有限公司)).

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

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FORWARD-LOOKING STATEMENTS

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

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

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

 ability to successfully implement business plans and strategies;

 future developments, trends and conditions in the PRC modern services, automotive, mining and industrial manufacturing industries;

 business prospects;

 capital expenditure plans;

 the continued availability of capital and financing;

 the actions and developments of competitors;

 financial condition and performance;

 dividend policy;

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

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

 changes or volatility in interest rates, foreign exchange rates, equity prices or other rates or prices, including those pertaining to the PRC and the industries and markets in which the Issuer operates;

 various business opportunities that the Issuer may pursue;

 macroeconomic measures taken by the PRC Government to manage economic growth;

 changes in the global economic conditions and material changes in the global modern services, mining and industrial manufacturing industries; and  other factors, including those discussed in “Risk Factors”.

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The Issuer does not undertake any obligation to update or revise publicly any of the opinions or forward- looking statements expressed in this Offering Circular as a result of any new information, future events or otherwise.

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CONTENTS

Page NOTICE TO INVESTORS ...... i CERTAIN DEFINITIONS, CONVENTIONS AND CURRENCY PRESENTATION ...... v FORWARD-LOOKING STATEMENTS ...... vii SUMMARY ...... 1 THE OFFERING ...... 4 SUMMARY FINANCIAL INFORMATION ...... 8 RISK FACTORS ...... 13 EXCHANGE RATES ...... 46 USE OF PROCEEDS ...... 47 CAPITALISATION AND INDEBTEDNESS ...... 48 TERMS AND CONDITIONS OF THE BONDS ...... 49 SUMMARY OF PROVISIONS RELATING TO THE BONDS WHILE IN GLOBAL FORM ...... 67 DESCRIPTION OF THE GROUP ...... 68 DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT ...... 88 SUMMARY OF CERTAIN DIFFERENCES BETWEEN PRC ACCOUNTING STANDARDS AND INTERNATIONAL FINANCIAL REPORTING STANDARDS ...... 93 TAXATION ...... 94 SUBSCRIPTION AND SALE ...... 97 GENERAL INFORMATION ...... 101 INDEX TO FINANCIAL STATEMENTS ...... F-1

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SUMMARY

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

Overview

Founded in 1989, the Group has grown from a small scale coal procurement and distribution company to a leading conglomerate in Jiangsu Province with operations spanning through modern services, energy and mineral resources, industrial manufacturing and infrastructure investment. The Issuer is wholly owned and supervised by Yancheng SASAC with a registered capital of RMB5.0 billion as the date of this Offering Circular. According to World Brand Lab, the brand value of “Yueda” (“悅達”) amounted to approximately RMB50.8 billion as at year 2020, ranking 125th amongst the “Top 500 Valued Brands in China” (中國 500 最具價值品牌).

In recent years, centred around the mission of “Cultivating the industries for Yancheng; Seeking the future for Yueda” ( “ 為鹽城培產業,為悅達謀未來”), the Group has been focusing on automobile and intelligent manufacturing as its key areas of development, whilst also ensuring balanced and quality development of its diversified business segments. The collaboration with internationally reputable companies has further strengthened the Group’s market competitiveness and brand recognition. The successful transformation of the Group to a market-oriented, professional and internationalised modern enterprise has made great contributions to the development of Yancheng City and the revitalisation of northern Jiangsu Province, evidenced by the awards and recognitions won by the Group in the recent years.

As at 31 December 2017, 2018 and 2019, the consolidated total assets of the Group were RMB61,787.4 million, RMB67,910.4 million and RMB69,603.6 million, respectively. For the years ended 31 December 2017, 2018 and 2019, the total operating income of the Group was RMB18,340.0 million, RMB24,207.4 million and RMB23,590.2 million, respectively. For the same years, the consolidated net profits of the Group were RMB156.4 million, RMB684.9 million and RMB858.7 million, respectively.

The Group operates its wide range of businesses primarily centred around Yancheng City and Jiangsu Province through its over 50 subsidiaries and affiliates. Below sets forth a summary of the Group’s four principal business segments:

 Modern Services. Modern services is the most significant business segment of the Group. Under this segment, the Group operates commercial retailing and trading, logistics, hotel operations, real estate development, car dealership, car parts supply and other businesses including but not limited to asset management business and healthcare business. The operating income generated from this segment contributes a significant part to the Group’s total operating income. For the years ended 31 December 2017, 2018 and 2019, the operating income generated from the Group’s modern services business was RMB12,201.3 million, RMB14,908.4 million and RMB15,443.6 million, respectively, constituting approximately 66.5 per cent., 61.6 per cent. and 65.5 per cent. of the Group’s total operating income, respectively.

 Energy and Mineral Resources. Energy and mineral resources is the business segment of the Group with the longest operating history. This segment comprises the mining and sales of coal and non-ferrous metals such as lead, zinc, gold and iron. For the years ended 31 December 2017, 2018 and 2019, the Group’s operating income generated from its energy and mineral resources business was RMB3,975.8 million, RMB6,773.9 million and RMB5,694.5 million, respectively, representing 21.7 per cent., 28.0 per cent and 24.1 per cent. of the Group’s total operating income, respectively.

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 Industrial Manufacturing. The Group’s industrial manufacturing business covers manufacturing of tractors and specialised vehicles, production of textiles and others. For the years ended 31 December 2017, 2018 and 2019, the operating income of the Group’s industrial manufacturing business was RMB1,410.6 million, RMB1,669.7 million and RMB1,608.9 million, respectively, representing 7.7 per cent., 6.9 per cent. and 6.8 per cent. of the Group’s total operating income, respectively.

 Infrastructure Investment. The Group, through controlling shareholding or equity investment, operates five expressways. The Group is responsible for daily maintenance of the expressways and benefits from toll collection. For the years ended 31 December 2017, 2018 and 2019, the Group’s operating income from its infrastructure investment business was RMB752.3 million, RMB855.4 million and RMB843.2 million, respectively, representing 4.1 per cent., 3.5 per cent. and 3.6 per cent. of the Group’s total operating income, respectively.

Competitive Strengths

The Group believes that its competitive strengths outlined below distinguish it from its competitors and are important to its success and future development:

 Diversified business operations and specialised subsidiaries.

 Leading strategic conglomerate in Yancheng City with strong government support.

 High quality assets provide stable revenue.

 International and domestic strategic collaborations with quality enterprises strengthen the Group’s competitiveness.

 Experienced management team with support from a dedicated team of staff.

 Stringent internal control and prudent finance policies.

Business Strategies

As a leading conglomerate in Yancheng City and Jiangsu Province, the Group strives to continue to utilise the synergies amongst its business segments and strengthen its competitive advantages, to build a modern enterprise with strong financing capability and to attain sustainable development and healthy operations. The Group intends to focus on the following strategies to achieve these goals:

 Focusing on core business, enhancing core competitiveness through industrial restructuring.

 Developing new models of existing business, entering into new businesses.

 Achieve sound liquidity positions through prudent financial management, relying on capital market activities and utilising innovative financing models.

 Maintain efficient and effective operations under an experienced management team.

Recent Developments

2020 Third Quarter Financial Statements of the Issuer

The Issuer has published its third quarter financial information as at and for the nine months ended 30 September 2020, which was prepared according to PRC GAAP (the “Third Quarter Financial Information”). The Third Quarter Financial Information is not included in and does not form a part of this Offering Circular.

As at 30 September 2020, the Group’s current assets, current liabilities and non-current liabilities increased, whereas its non-current assets decreased as compared to 31 December 2019. In particular, as at 30 September 2020, the Group’s short- term borrowings increased and its non-current liabilities due within one year and long-term borrowings decreased as compared to 31 December 2019. For the nine months ended 30 September 2020, the Group’s operating income and operating cost both decreased as compared to the same period in 2019, and the Group recorded a significant decrease in its net profit as compared to the same period in 2019, primarily due to the novel coronavirus disease 2019 (“COVID-19”). In

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addition, for the nine months ended 30 September 2020, the Group recorded decreases in net cash flow from investing activities and net cash flow from operating as compared to the same period in 2019, while the Group’s net cash flow from financing activities increased as compared to the same period in 2019.

The Third Quarter Financial Information has not been audited or reviewed by the Group’s independent accountants, or any other independent accountants and may be subject to adjustments if audited and reviewed. Consequently, none of the Joint Lead Managers, or any Agent (or any of their respective affiliates, directors, officers, employees, representatives, advisers, agents and each person who controls any of them) makes any representation or warranty, express or implied, regarding the accuracy of such financial statements or their sufficiency for an assessment of, and potential investors must exercise caution when using such data to evaluate the Issuer’s and the Group’s financial conditions and results of operations. The Third Quarter Financial Information should not be taken as an indication of the expected financial condition, results of operations and results of the Issuer or the Group for the full financial year ending 31 December 2020.

Outbreak of COVID-19

The outbreak of COVID-19, which was first reported in Wuhan, Hubei Province, the PRC in late 2019, has caused substantial disruption in the PRC economy and markets, and has since spread to the international markets. In March 2020, the World Health Organisation declared COVID-19 as a global pandemic. The COVID-19 in the PRC, in particular in the first half of 2020, has resulted in business suspensions, widespread traffic disruptions, travel and other restrictions and quarantines in different places, which led to economic slowdown, labour shortages, supply or delivery chain constraints, price drops and counterparty defaults. Many other countries have implemented drastic measures, including travel bans and closing of borders to help contain the spread of COVID-19. The accelerated spread of COVID-19 has also caused extreme volatility in the global financial markets.

The Group’s business operations have been affected by the COVID-19 outbreak to different extents. In particular, its labour- intensive business segments, such as tractor manufacturing and textile manufacturing, were affected by quarantines and labour shortages, whereas its toll revenue generated from its expressways were affected by the nationwide policy-driven toll waiver from 17 February 2020 to 6 May 2020 in response to the COVID-19 outbreak. On the other hand, the Group’s service business segments, such as car dealership and car parts supply, hotels operations and commercial trading, have experienced business slowdowns, cancellations, as well as a decline in forward bookings and transient business in response to governmental travel advisories and lockdowns. The Group has generally resumed its normal business operations since early April 2020 and will continue to closely monitor the global development in respect of the COVID-19 pandemic. See also “Risk Factors – Risks Relating to the Group’s Business – The Group’s toll rates are subject to the regulation by the PRC Government”, “Risk Factors – Risks Relating to the Group’s Business – The Group’s operations are subject to force majeure events, natural disasters and outbreaks of contagious diseases” and “Risk Factors – Risks Relating to the Group’s Business – The global economy is facing significant uncertainties and disruptions caused by COVID-19” for more information.

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THE OFFERING

The following summary contains some basic information about the New Bonds and is qualified in its entirety by the remainder of this Offering Circular. Some of the terms described below are subject to important limitations and exceptions. Words and expressions defined in the Terms and Conditions and the “Summary of Provisions Relating to the Bonds while in Global Form” shall have the same meanings in this summary. For a complete description of the terms of the Bonds, see “Terms and Conditions of the Bonds” in this Offering Circular.

The offering of the New Bonds contemplated hereby will be made pursuant to the Subscription Agreement (as defined in “Subscription and Sale”).

Issuer ...... Jiangsu Yueda Group Co., Ltd. (江蘇悅達集團有限公司)

New Bonds ...... U.S.$87,250,000 in aggregate principal amount of 5.70 per cent. Bonds due 2023 to be consolidated and form a single series with the U.S.$200,000,000 5.70 per cent. Bonds due 2023 (which include the Original Bonds issued on 4 June 2020 and the October 2020 Bonds issued on 13 October 2020).

Issue Price ...... 100.00 per cent., plus accrued interest in respect of the period from (and including) 4 December 2020 to (but excluding) 7 December 2020.

Form and Denomination ...... The New Bonds will be issued in registered form in denominations of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof.

Interest ...... The New Bonds will bear interest on their outstanding principal amount from 4 December 2020 at the rate of 5.70 per cent. per annum. Interest on the Bonds is payable semi-annually in arrear in equal instalments on 4 June and 4 December in each year, commencing on 4 December 2020 (in the case of the Original Bonds and the October 2020 Bonds) or 4 June 2021 (in the case of the New Bonds).

Original Issue Date ...... 4 June 2020.

October 2020 Bonds Issue Date ...... 13 October 2020.

New Issue Date ...... 7 December 2020.

Maturity Date ...... 4 June 2023.

Status of the Bonds ...... The Bonds constitute direct, unconditional, unsubordinated and (subject to Condition 4(a) (Negative Pledge) of the Terms and Conditions) unsecured obligations of the Issuer and shall at all times rank pari passu and without any preference among themselves. The payment obligations of the Issuer under the Bonds shall, save for such exceptions as may be provided by applicable legislation and subject to Condition 4(a) (Negative Pledge) of the Terms and Conditions, at all times rank at least equally with all its other present and future unsecured and unsubordinated obligations.

Negative pledge ...... The Bonds will contain a negative pledge provision as further described in Condition 4(a) (Negative Pledge) of the Terms and Conditions.

Redemption at Maturity ...... Unless previously redeemed, or purchased and cancelled, the Bonds will be redeemed at their principal amounts on their Maturity Date.

Taxation ...... All payments of principal, premium (if any) and interest by or on behalf of the Issuer in respect of the Bonds shall be made free and clear of, and without withholding or deduction for or on account of, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or

15 4

assessed by the PRC or any political subdivision or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law.

Where such withholding or deduction is made by the Issuer by or within the PRC up to and including the aggregate rate applicable on 28 May 2020 (the “Applicable Rate”), the Issuer will increase the amounts paid by it to the extent required, so that the net amount received by Bondholders equals the amounts which would otherwise have been receivable by them had no such withholding or deduction been required.

If the Issuer is required to make a deduction or withholding by or within the PRC in excess of the Applicable Rate, the Issuer shall pay such additional amounts (the “Additional Tax Amounts”) as will result in receipt by the Bondholders of such amounts as would have been received by them had no such withholding or deduction been required, except that no Additional Tax Amounts shall be payable in the circumstances set out in Condition 8 (Taxation) of the Terms and Conditions.

Redemption for Taxation Reasons ...... The Bonds may be redeemed at the option of the Issuer in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days’ notice to the Bondholders (which notice shall be irrevocable) and in writing to the Trustee and the Principal Paying Agent, at their principal amount (together with any interest accrued to but excluding the date fixed for redemption) if, immediately prior to giving such notice, the Issuer satisfies the Trustee that:

(i) the Issuer has or will become obliged to pay Additional Tax Amounts as provided or referred to in Condition 8 (Taxation) of the Terms and Conditions as a result of any change in, or amendment to, the laws or regulations of the PRC or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of, or the stating of an official position with respect to, such laws or regulations (including but not limited to any decision by a court of competent jurisdiction), which change or amendment becomes effective on or after 28 May 2020; and

(ii) such obligation cannot be avoided by the Issuer taking reasonable measures available to it,

provided, however, that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such Additional Tax Amounts if a payment in respect of the Bonds were then due.

Redemption for Relevant Events ...... Following the occurrence of a Relevant Event, the Holder of any Bond will have the right (the “Relevant Event Put Right”), at such Holder’s option, to require the Issuer to redeem all, but not some only, of such Holders’ Bonds on the Put Settlement Date (as defined in Condition 6(c) (Redemption for Relevant Events) of the Terms and Conditions) at 101 per cent. (in the case of a redemption for a Change of Control Event (as defined in the Terms and Conditions)) or 100 per cent. (in the case of a redemption for a No Registration Event (as defined in the Terms and Conditions)) of their principal amount, together in each case with accrued interest up to but excluding the Put Settlement Date.

A “Change of Control Event” occurs when:

(i) The Municipal Government of Yancheng (as defined in the Terms and Conditions) and any other person directly or indirectly controlled by the Municipal Government of Yancheng ceases to directly or indirectly hold or own more than 75 per cent. of the issued share capital of the Issuer; or

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(ii) the Issuer consolidates with or merges into or sells or transfers all or substantially all of the Issuer’s assets to any other Person or Persons, unless the consolidation, merger, sale or transfer will not result in the other Person or Persons acquiring Control over the Issuer or the successor entity;

“Control” means (i) the ownership or control of more than 50 per cent. of the voting rights of the issued share capital of the relevant person or (ii) the right to appoint and/or remove all or the majority of the members of the relevant person’s board of directors or other governing body, whether obtained directly or indirectly, and whether obtained by ownership of share capital, the possession of voting rights, contract or otherwise; the term “Controlled” has meanings correlative to the foregoing; and

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

Events of Default ...... Upon the occurrence of certain events as described in Condition 9 (Events of Default) of the Terms and Conditions, the Trustee at its discretion may and, if so requested in writing by Holders of at least 25 per cent. of the aggregate principal amount of the Bonds then outstanding or if so directed by an Extraordinary Resolution, shall (provided in any such case that the Trustee shall have first been indemnified and/or secured and/or pre-funded to its satisfaction) give notice to the Issuer that the Bonds are, and they shall become immediately due and payable at their principal amount together (if applicable) with accrued but unpaid interest.

Cross-default ...... The Bonds will contain a cross-default provision as further described in Condition 9(c) (Cross-default) of the Terms and Conditions.

Clearing Systems ...... The New Bonds will be represented by beneficial interests in a Global Certificate in registered form, which will be registered in the name of a nominee of, and shall be deposited with, a common depository for Euroclear and Clearstream. Beneficial interests in the Global Certificate will be shown on and transfers thereof will be effected only through records maintained by Euroclear and Clearstream. Except in the limited circumstances described in the Global Certificate, owners of interests in the New Bonds represented by a Global Certificate will not be entitled to receive individual Certificates in respect of their individual holdings of the New Bonds. The New Bonds are not issued in bearer form.

Clearance and Settlement...... The New Bonds have been accepted for clearance by Euroclear and Clearstream under the following codes:

ISIN: XS2133329966.

Common Code: 213332996.

Governing Law ...... English law.

Trustee, Registrar, Principal Paying China Construction Bank (Asia) Corporation Limited. Agent and Transfer Agent ......

Listing ...... Application will be made for the listing of the New Bonds by way of debt issues to Professional Investors only and such permission is expected to become effective on or about 8 December 2020.

Further Issues ...... The Issuer may from time to time, without the consent of the Bondholders and in accordance with the Trust Deed, create and issue further bonds having the same terms and conditions as the Bonds in all respects (or in all respects save for the

17 6

issue date, the first payment of interest on them and the timing for complying with the Registration Conditions and making of the NDRC Post-issue Filing and the Foreign Debt Registration and the filing of the Bonds under the Cross Border Financing Circular), so that such further issue shall be consolidated and form a single series with the Bonds, as the case may be, as further described in Condition 15 (Further Issues) of the Terms and Conditions.

Rating...... The New Bonds are expected to be rated “BBBg-” by CCXAP. A security rating is not recommendations to buy, sell or hold the New Bonds. The rating is subject to revision or withdrawal at any time by the rating agency.

Use of Proceeds ...... See “Use of Proceeds”.

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SUMMARY FINANCIAL INFORMATION

The following table sets forth the Issuer’s summary financial information as at the dates and for the periods indicated.

The Issuer prepares its consolidated financial statements in accordance with Accounting Standards for Business Enterprises (the “PRC GAAP”). There are certain differences between PRC GAAP and the International Financial Reporting Standards (the “IFRS”). For a summary of the differences, please see “Summary of Certain Differences between PRC Accounting Standards and International Financial Reporting Standards”. The Issuer has not prepared any reconciliation of such consolidated financial information between PRC GAAP and IFRS and has not quantified such differences. The Issuer’s audited consolidated financial information as at and for the years ended 31 December 2017, 2018 and 2019 have been extracted from the consolidated financial statements of the Issuer as at and for the years ended 31 December 2017, 2018 and 2019 audited by SuyaJincheng, the independent auditor of the Issuer, included elsewhere in this Offering Circular, together with the auditor’s report in respect of the financial years ended 31 December 2018 and 2019.

Prospective investors should seek advice from their financial and tax advisers if they have doubts about the differences. Prospective investors should read the summary financial below in conjunction with the Issuer’s published audited consolidated financial statements and the related bonds included elsewhere in this Offering Circular. Historical results are not necessarily indicative of results that may be achieved in any future period.

Consolidated Balance Sheet

As at 31 December

2017 2018 2019

(RMB) (RMB) (RMB)

(audited) (audited) (audited) Assets Current assets: Cash at bank and on hand ...... 5,826,493,605.07 6,223,416,952.97 6,159,417,780.00 Financial assets measured at fair value through profit or loss .... 180,808,693.85 1,626,026.43 – Derivative financial assets ...... – – – Notes receivable and account receivable ...... 1,560,278,742.53 2,146,352,194.73 1,989,939,934.28 Advance payment ...... 1,491,773,934.91 1,976,653,681.40 1,647,119,273.95 Other receivables ...... 4,146,888,196.48 5,495,561,820.22 5,753,294,023.04 Inventory ...... 12,250,196,690.85 14,061,565,255.31 13,076,858,493.07 Assets held for sale ...... – 12,649,801.03 6,030,328.82 Non-current assets maturing within one year ...... 572,771,114.88 2,215,141,696.40 2,204,417,837.58 Other current assets ...... 4,679,248,707.19 3,172,124,976.70 3,031,979,739.09 Total current assets ...... 30,708,459,685.76 35,305,092,405.19 33,869,057,409.83 Non-current assets: Available for sale financial assets ...... 3,411,566,273.49 4,931,176,636.05 8,142,697,417.23 Held to maturity investment ...... – – 20,154,037.77 Long-term receivables ...... 5,115,564,338.99 5,271,016,314.68 2,982,294,461.64 Long term equity investment ...... 12,723,826,266.11 13,544,558,332.29 15,011,844,334.58 Investment properties ...... 7,282,321.33 604,713,109.71 616,188,504.02 Fixed assets ...... 2,552,981,312.85 2,433,552,288.57 3,128,914,147.79

As at 31 December

2017 2018 2019

(RMB) (RMB) (RMB)

(audited) (audited) (audited) Construction in progress ...... 114,329,454.53 127,965,914.26 468,767,634.54 Engineering materials ...... – – – Disposal of fixed assets ...... – – – Productive biological assets...... 1,137,255.45 1,152,255.45 – Oil and gas assets ...... – – – Loans and advances ...... 255,144,361.27 – – Intangible assets ...... 6,081,055,298.73 4,545,134,523.77 4,408,698,547.20 Development expenditure ...... 9,376,593.01 – 2,176,903.27 Goodwill ...... 107,768,437.59 105,318,437.59 126,318,437.59 Long term deferred expense ...... 107,570,922.35 212,154,645.60 295,974,462.23 Deferred tax assets...... 206,421,758.20 219,354,412.74 197,568,956.36 Other non-current assets ...... 384,933,635.48 609,162,868.15 332,912,164.82 Total non-current assets ...... 31,078,958,229.38 32,605,259,738.86 35,734,510,009.04 Total assets ...... 61,787,417,915.14 67,910,352,144.05 69,603,567,418.87 Liabilities and owner’s equity Current liabilities: Short term loan ...... 12,438,463,114.35 11,853,068,227.25 12,203,750,427.63 Deposit taking ...... 382,054,763.56 – – Derivative financial liabilities ...... – – – Notes payable and account payable ...... 6,367,882,710.89 8,308,641,293.13 10,473,590,726.90 Advance receipts ...... 884,637,513.04 1,088,616,811.34 977,497,872.68 Payroll payables ...... 286,074,967.04 337,002,096.50 312,351,031.40 Taxes payables ...... 255,207,039.27 327,326,253.41 407,874,799.43 Other payables ...... 5,391,326,682.74 3,221,910,621.37 1,975,267,421.27 Non-current liabilities due within one year ...... 5,780,982,887.30 4,868,052,961.80 4,809,569,006.84 Other current liabilities ...... 2,107,310,943.36 5,202,051,849.86 2,415,397,733.90 Total Current Liabilities ...... 33,893,940,621.55 35,206,670,114.66 33,575,299,020.05 Non-current liabilities: Long term loans ...... 4,936,301,912.26 3,815,275,747.08 3,822,563,759.59 Bonds payable ...... 5,503,003,366.00 4,530,000,000.00 4,930,000,000.00 Including: preferred shares ...... – – – Perpetual bonds ...... – – – Long term accounts payable ...... 435,320,699.92 3,572,303,243.47 2,540,825,865.56 Estimated liabilities ...... 28,793,080.81 36,072,531.48 29,432,704.90 Deferred income ...... 50,004,390.49 45,511,865.45 31,963,592.33 Deferred Tax Liability ...... 134,135,349.16 116,087,236.54 141,913,857.79 Other non-current liabilities...... – – –

As at 31 December

2017 2018 2019

(RMB) (RMB) (RMB)

(audited) (audited) (audited) Total non-current Liabilities ...... 11,087,558,798.64 12,115,250,624.02 11,496,699,780.17 Total liabilities ...... 44,981,499,420.19 47,321,920,738.68 45,071,998,800.22 Owner’s equity (or shareholder’s equity): Paid in capital (or share capital) ...... 1,000,000,000.00 1,000,000,000.00 1,000,000,000.00 Other equity instruments ...... 4,000,000,000.00 2,000,000,000.00 2,000,000,000.00 Including: preferred shares ...... – – – Perpetual bonds ...... 4,000,000,000.00 2,000,000,000.00 2,000,000,000.00 Capital reserve ...... 809,689,910.50 3,917,515,825.81 3,930,164,189.13 Less: treasury shares ...... – – – Other comprehensive income ...... 138,180,130.29 73,133,813.27 132,605,167.75 Special reserve ...... 12,361,963.86 10,782,354.22 10,666,436.46 Surplus reserves ...... 153,845,571.52 183,755,017.79 200,528,789.07 General risk reserve ...... – – – Undistributed profit ...... 4,659,947,460.05 4,781,534,046.09 4,997,060,924.21 Total owner’s equity attributable to the parent company...... 10,774,025,036.22 11,966,721,057.18 12,271,025,506.62 Minority interest ...... 6,031,893,458.73 8,621,710,348.19 12,260,543,112.03 Total owner’s equity ...... 16,805,918,494.95 20,588,431,405.37 24,531,568,618.65 Total liabilities and owners’ equity ...... 61,787,417,915.14 67,910,352,144.05 69,603,567,418.87

Consolidated Income Statement

For the year ended 31 December

Item 2017 2018 2019

(RMB) (RMB) (RMB)

(audited) (audited) (audited) 1. Operating income ...... 18,339,958,523.23 24,207,389,272.39 23,590,172,524.27 Less: operating cost ...... 16,289,691,897.08 21,606,260,743.48 20,769,967,311.53 Taxes and surcharges ...... 148,284,509.52 139,292,774.80 143,939,082.01 Selling expenses ...... 411,450,241.38 521,093,826.21 418,307,615.20 Management cost ...... 866,611,601.54 1,045,509,232.18 1,001,556,976.59 R & D expenses ...... 50,280,115.21 59,237,905.98 51,082,160.41 Financial cost...... 1,315,649,907.35 1,899,430,649.36 1,915,712,845.69 Including: interest expense ...... 1,368,813,843.96 1,868,113,528.22 2,152,818,675.93 Interest income ...... 262,074,016.66 305,002,616.45 571,351,135.43 Plus: other income ...... 40,409,001.23 20,346,020.49 49,747,473.46 Investment gain (loss expressed with “-”) ...... 1,403,846,034.48 1,784,846,407.94 1,888,685,071.22

For the year ended 31 December

Item 2017 2018 2019

(RMB) (RMB) (RMB)

(audited) (audited) (audited) Including: investment income from associated enterprises and joint ventures ...... 829,789,391.56 1,141,863,925.59 1,274,310,344.21 Assets impairment loss (loss expressed with “-”) ...... 568,497,542.89 -77,854,647.22 -5,839,647.28 Gain from changes in fair value (loss expressed with “-”) ...... -62,277,858.38 2,354,000.24 -9,760.73 Income from asset disposal (loss expressed with “-”) ...... 4,064,310.33 134,895,598.34 -84,398,135.74 2. Operating profit (loss expressed with “-”) ...... 75,534,195.92 801,151,520.17 1,137,791,533.77 Plus: non operating income ...... 220,951,664.99 259,613,696.23 192,890,871.83 Less: non operating expenses ...... 18,609,068.09 30,549,575.81 19,218,535.60 3. Total profit (total loss expressed with “-”) ...... 277,876,792.82 1,030,215,640.59 1,311,463,870.00 Less: income tax expense ...... 121,525,709.97 345,334,435.73 452,796,783.90 4. Net profit (net loss is indicated with “-”) ...... 156,351,082.85 684,881,204.86 858,667,086.10 (1) By business continuity: ...... 1. Net profit from continuing operations (net loss is indicated with “-”) ...... 156,351,082.85 684,881,204.86 858,667,086.10 2. Net profit from discontinued operations (net loss expressed with “-”) ...... – – – (2) Classification by ownership:...... 1. Total owner’s equity attributable to the parent company (loss expressed with “-”)...... 197,467,728.05 305,203,794.87 479,417,179.05 2. Minority interests (loss expressed with “-”) ...... -41,116,645.20 379,677,409.99 379,249,907.05 5. Net after tax of other comprehensive income ...... -100,599,458.90 -126,341,630.17 59,339,947.19 After tax net amount of other comprehensive income attributable to the owner of the parent company...... -100,575,462.27 -65,046,317.02 59,471,354.48 (1) Other comprehensive income that cannot be reclassified into profit and loss in the future ...... – – – 1.Remeasurement of changes in net liabilities or net assets of defined benefit plans ...... – – – 2.Share in other comprehensive income of the investee that cannot be reclassified into profit and loss under equity method ...... – – – (2) Other comprehensive income that will be reclassified into profit and loss in the future ...... -100,575,462.27 -65,046,317.02 59,471,354.48 1.Share of other comprehensive income that will be reclassified into profit and loss in the investee under equity method ...... 2,578,70931 2,590,629.54 77,430.97 2.Profit and loss from changes in fair value of available for sale financial assets ...... -102,979,073.67 -67,830,915.64 73,661,970.02 3.Profit and loss of held to maturity investment reclassified as available for sale financial assets ...... – – – 4.Effective part of cash flow hedging profit and loss ...... – – –

For the year ended 31 December

Item 2017 2018 2019

(RMB) (RMB) (RMB)

(audited) (audited) (audited) 5.Translation difference of foreign currency financial statements ...... -175,097.91 193,969.08 -14,268,046.51 6.Other ...... – – – After tax net amount of other comprehensive income attributable to minority shareholders ...... -23,996.63 -61,295,313.15 -131,407.29 6. Total comprehensive income ...... 55,751,623.95 558,539,574.69 918,007,033.29 Total comprehensive income attributable to the owners of the parent company ...... 96,892,265.78 240,157,447.85 538,888,533.53 Total comprehensive income attributable to minority shareholders ...... -41,140,641.83 318,382,096.84 379,118,499.76 7. Earnings per share ...... – – – (1) Basic earnings per share (yuan/share) ...... – – – (2) Diluted earnings per share (yuan/share) ...... – – –

Selected other financial data of the Group

As at and for the years ended 31 December

2017 2018 2019 Debt to Assets Ratio(1) ...... 72.80% 69.68% 64.76% EBITDA(2) (million RMB) ...... 2,098.12 3,400.08 3,995.33 EBITDA Interest Coverage Ratio(3) ...... 1.55 1.82 1.86

Notes: (1) Debt to assets ratio equals to total liabilities divided by total assets as at 31 December 2017, 2018 and 2019, respectively. (2) EBITDA equals to the sum of net profit, income tax expenses, interest expense, depreciation of fixed assets, amortisation of intangible assets and amortisation of long term deferred expense for the years ended 31 December 2017, 2018 and 2019, respectively. (3) EBITDA interest coverage ratio equals to EBITDA as at and for the years ended 31 December 2017, 2018 and 2019, respectively, divided by interest expense as at and for the years ended 31 December 2017, 2018 and 2019, respectively.

RISK FACTORS

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

The Issuer does not represent that the statements below regarding the risk factors of holding any Bonds are exhaustive. Prospective investors should also read the detailed information set out elsewhere in this Offering Circular and reach their own views prior to making any investment decision.

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

RISKS RELATING TO THE GROUP’S BUSINESS The Group’s businesses, financial condition, results of operations and prospects are heavily dependent on the overall growth of the PRC economy.

In recent years, the PRC has been one of the fastest-growing economies in terms of GDP growth. However, the growth of the PRC economy has slowed down. For example, according to the National Bureau of Statistics of China International Monetary Fund, the PRC’s GDP grew at 6.9 per cent. in 2017, 6.6 per cent. in 2018 and 6.1 per cent. in 2019. Moreover, the global economy may continue to experience uneven development going forward, which may have a negative impact on the Chinese economy. If economic growth slows down significantly or economic conditions deteriorate, the Group’s business, financial condition, results of operations and prospects may be materially and adversely affected. In recent years, the demand for coal and coke in the PRC decreased constantly, resulting from the effects of multiple factors such as the transformation in economic growth, economy and energy structure adjustment, energy conservation and green economy development in response to climate change.

Since the Group’s main business is closely correlated with the macro economy environment, if the PRC economic growth rate continues to slow down in the future, the demand for the Group’s products may further decrease, which may in turn have a material adverse effect on the Group’s business, financial condition, results of operations and prospects.

The Group may be adversely affected by cyclic fluctuations in the global economy and financial markets.

Some of the Group’s main operating business, including coal mining, textile, real estate development and non-ferrous metal mining are substantially affected by general global economic conditions and cyclic fluctuations. The outlook for the world economy and financial markets remains uncertain. The global financial crisis substantially affected overall industries performances especially in the textile and non-ferrous metal mining sectors. In June 2016, the United Kingdom held a remain-or-leave referendum on its membership within the European Union and the results favoured the withdrawal of the United Kingdom from the European Union (“Brexit”). The transition period of Brexit commenced on 31 January 2020. Whilst the withdrawal arrangements and the future terms of the United Kingdom’s relationship with the European Union have already been agreed, Brexit is expected to continue to create mid-to long-term economic uncertainty to not only the economies of the United Kingdom and the European Union but also globally. In Europe, several countries are facing difficulties in refinancing sovereign debt. In Asia and other emerging markets, some countries are expecting increasing inflationary pressure as a consequence of liberal monetary policy or excessive foreign fund inflow and outflow, or both. In the Middle East, Eastern Europe and Africa, political unrest in various countries has resulted in economic instability and

uncertainty. In addition, the tension between the United States and China and uncertain future policies of the United States government are likely to create uncertainties in the global economy and global financial markets.

The PRC economy is sensitive to global economic conditions, and it is impossible to predict how the PRC economy will develop in the future and whether it may slow down due to a global crisis or experience a financial crisis. Instability in the global economy may ultimately have a material and adverse impact on the Group’s business, financial condition and results of operations.

If the Group is unable to realise the collateral or guarantees securing its loans to cover the outstanding principal and interest balance of its loans, its financial condition and results of operations may be adversely affected.

A substantial portion of the Group’s shareholding interest in this listed subsidiary Yueda Investment are place under charge to secure loans obtained by the Group. If the Group is unable to fulfil its obligations under the loans, the Group may lose its control over Yueda Investment which may adversely affect the Group’s business, financial performance, results of operations and its future prospect.

The Group may not be successful in integrating and managing future investments and its expansion into new areas.

Apart from the Group’s current four main business segments, the Group is actively seeking expansions into new areas. The Group has started investing in these new businesses and has included them into its future business plans and strategies. However, there can be no assurance that the Group can successfully achieve strategic objectives for its investments in the new businesses and reach anticipated levels of profitability. The Group may face difficulties during the expansion, including: diversion of management’s attention from the Group’s existing businesses. Difficulties in integrating acquired businesses or investments into the Group’s existing operations, which may prevent it from achieving, or may reduce anticipated synergies; increases in the Group’s expenses and working capital requirements, which may reduce its return on invested capital increases in debt, which may increase the Group’s financing costs as a result of higher interest payments. Difficulties of expanding into different markets and challenges of operating in markets and industries that the Group does not have substantial experience in may exposure the Group to unanticipated contingent liabilities to acquired businesses.

The Group’s business requires significant capital expenditures and turnover period of such expenditures is relatively long.

Some of the Group’s main businesses, such as infrastructure investment and real estate development, are all capital intensive. The working capital requirements and capital expenditure were partly generated from the Group’s internal cash flow from operations and partly generated from its external financing through various channels, such as bank borrowings and debt issuances. Large amount of capital is needed to complete ongoing investment projects. Taking the future expansion of the Group’s business into consideration, the Group will continue to have significant capital expenditure demands in the foreseeable future, requiring substantial external financing.

The Group’s ability to obtain external financing in the future and the cost of such financing are subject to a variety of uncertainties. There can be no assurance that the Group can obtain sufficient financing on terms favourable to the Group. If the Group is unable to obtain financing on a timely basis and at a reasonable cost, it may not be able to undertake new projects or implement such projects as planned. This would further extend the turnover period of the Group’s operating costs and restrict the Group’s ability to grow and, over time, may reduce the quality and reliability of the services provided by the Group and adversely affect the Group’s business, results of operations and financial condition.

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

The Group’s results of operations and financial condition may be affected by changes in the regulations of the PRC Government concerning local government’s fiscal debts and the financing platforms of local governments from time to time.

For example, in accordance with the Guidance on Further Strengthening Adjustment of Credit Structure to Promote Fast and Smooth Development of National Economy (中國人民銀行、中國銀行業監督管理委員會關於進一步加強信貸結構調整促進國民經濟平穩較快發展的指導意見) issued jointly by the PBOC and the China Banking Regulatory Commission (which was merged with the China Insurance Regulatory Commission to form the China Banking and Insurance Regulatory Commission in April 2018) (the “CBRC”) on 18 March 2009, local governments are encouraged to establish financing platforms to issue financing instruments such as enterprise notes and medium-term notes. In order to strengthen the management of financing platforms and effectively prevent fiscal financial risks, the Circular of the State Council on Relevant Issues Concerning Strengthening the Management of Financing Platform Companies of Local Governments ( 國務院關於加強地方政府融資平台公司管理有關問題的通知) (“Circular 19”) and the Circular of the General Office of the NDRC on Relevant Issues Concerning Furthering Regulating the Issuance of Bonds of Local Government Investment and Financing Platform Enterprise (國家發展改革委辦公廳關於進一步規範地方政府投融資平台公司發行債券行為有關問題的通知) (“Circular 2881”) were separately promulgated on 10 June 2010 and 20 November 2010, respectively. In accordance with Circular 19, all levels of local governments shall clear up the debts of their respective financing platform. In accordance with Circular 2881, indebtedness of local governments will impact the financing platform’s issuance of enterprise notes. For example, an application for issuance of corporate bonds by a local government’s financing platform will not be accepted if (i) the operating income generated from the relevant local government’s investment in public welfare or quasi-public welfare projects accounts for more than 30 per cent. of such financing platform’s total operating income and (ii) the fiscal debt level of the relevant local government exceeds 100 per cent.

On 21 September 2014, the State Council released Several Opinions of the State Council on Strengthening the Administration of Local Government Debts (國務院關於加強地方政府性債務管理的意見) (“Circular 43”). In accordance with Circular 43, financing platform companies shall no longer function as a financing vehicle of the local government or incur new government debts. New public interest projects of a local government that are not for profit earning, such as infrastructure construction and primary land development, should not be financed by the investment vehicles of the local government in the form of corporate bond issuances. Instead, local governments should finance the development of such public interest projects by issuance of government bonds. Public interest projects that are profit earning, such as the construction of a non-toll free highway, may be developed either by private investors independently or by a special purpose company jointly set up by the local government and private investors. Such private investors and special purpose companies shall invest in accordance with market-oriented principles and development of the projects may be financed by bank loans, corporate bonds, project revenue bonds and asset-backed securitisation. Furthermore, private investors and the special purpose companies shall bear the obligation to repay their debts and the local government shall not be liable for any of the private investors’ or the special purpose companies’ debts. Circular 43 also sets forth the general principles of dealing with existing debts of financing platforms. Based on the auditing results of such debts run by local governments, the existing debts that should be repaid by local governments shall be identified, reported to the State Council for approval, and then included in the budget plan of local governments. There are a few stray cases where certain debts of the local financing platforms were classified as non-government debts since the release of Circular 43. However, whether the factual basis for such individual cases are comparable or relevant to other local governments’ financing platforms or not is unclear, and different local governments’ interpretation and application of Circular 43 may vary from one another. It is unclear what impact Circular 43 has on the existing government debts of the local financing platforms in the PRC.

In addition, on 23 October 2014, the Ministry of Finance (“MOF”) promulgated the Methods to Clear up and Clarify the Existing Fiscal Debt of Local Governments and Integrate it into Budgetary Management (地方政府存量債務納入預算管理清理甄別辦法) (“Circular 351”) based on Circular 43. Circular 351 further requires local governments to clear up the existing debts of the financing platforms of local governments and classify such existing fiscal debts of local governments into government debts and non-government debts. On 9 November 2016, the MOF promulgated the Circular on Local Government General Debt Budget Management ( 地方政府一般債務預算管理辦法) (“Circular 154”) and the Circular on Local Government Special Debt Budget Management (地方政府專項債務預算管理辦法) (“Circular 155”), which aim to realise the monitoring of the entire process of borrowing, using and repaying local governments debts, enhance the transparency of local government debts, and strengthen the supervision of local government debt management by the

central government. Circular 154 and Circular 155 clarify the upper limit of local government debt, budget preparation and approval process, and provide that debts that are not in the form of government bonds shall be included in budget management.

On 11 May 2015, the Opinion on the Proper Solution of the Follow-up Financing Issues for Projects under Construction of Financing Platform of Local Governments issued jointly by the MOF, the PBOC and the CBRC (財政部人民銀行銀監會關於妥善解決地方政府融資平台公司在建項目後續融資問題意見) (“Circular 40”) was promulgated by the General Office of the State Council. In accordance with Circular 40, local governments at all levels and banking financial institutions shall properly deal with follow-up financing issues for projects under construction of financing platform companies. Projects under construction refer to projects that have started construction upon the completion of examination, approval or filing procedures in accordance with relevant regulations manuscript by competent investment authorities before the date when Circular 43 was promulgated.

In addition, MOF, together with NDRC, PBOC, China Securities Regulatory Commission, CBIRC and the Ministry of Justice of the PRC, released the Notice concerning Further Regulation of Local Government Borrowing and Financing Conduct (關於進一步規範地方政府舉債融資行為的通知) to emphasise the principles and policies set out in Circular 43 in April 2017.

Also, the PRC Government issued the Circular of the Ministry of Finance on Issues relevant to the Regulation on the Financing Activities Conducted by Financial Institutions for Local Governments and State-owned Enterprises (財政部關於規範金融企業對地方政府和國有企業投融資行為有關問題的通知,財金[2018]23 號) (the “MOF Circular”) promulgated on 28 March 2018 and took effect on the same day, which aims to increase the responsibility of PRC state- owned financial institutions to investigate into the financial independence and liquidity level of local government financing vehicles that they assist in fundraising. The Circular of the National Development and Reform Commission and the Ministry of Finance on Improvement of Market Regulatory Regime and Strict Prevention of Foreign Debt Risks and Local Government Indebtedness Risks (國家發展改革委財政部關於完善市場約束機制嚴格防範外債風險和地方債務風險的通知) (the “Joint Circular”), which was promulgated on 11 May 2018 and took effect on the same day, reiterates the PRC Government’s position to isolate the debt of local government financing vehicles from the relevant local government and to control the increase of local governments’ debts. The Joint Circular requires companies that plan to borrow medium and long-term foreign debt to establish a sound and standardised corporate governance structure, management decision- making mechanism and financial management system. It further requires that the assets owned by such companies should be of good quality and clear ownership and it is forbidden to include public interest assets in corporate assets.

On 13 September 2018, the Guiding Opinions on Strengthening Asset-Liability Constraints on State-owned Enterprises ( 關於加強國有企業資產負債約束的指導意見) (the “Guiding Opinions”) was promulgated by the General Office of the CPC Central Committee and the General Office of the State Council and became effective on the same date. Pursuant to the Guiding Opinions, the average debt ratio of state-owned enterprises shall be reduced by approximately 2 percentage points starting from the end of 2017 and by the end of 2020, and thereupon the debt ratio of state-owned enterprises shall be maintained basically at the average level of enterprises of the same size in the same industry. The Guiding Opinions also set forth the basic principles and indicating standards of constraining the debt ratio of state-owned enterprises.

On 6 June 2019, the NDRC issued the General Office of the National Development and Reform Commission on Relevant Requirements for Record-filing and Registration of Issuance of Foreign Debts by Local State-owned Enterprises (國家發展改革委辦公廳關於對地方國有企業發行外債申請備案登記有關要求的通知) (“Circular 666”), which restated Joint Circular’s supervision requirement. According to Circular 666, local state-owned enterprises shall assume the responsibility of repaying foreign debts as independent legal persons, while local governments and departments thereof shall not directly repay or undertake to repay the foreign debts of local state-owned enterprises with fiscal funds, nor shall they provide guarantee for the issuance of foreign debts by local state-owned enterprises. Local state-owned enterprises that issue foreign debts shall strengthen information disclosure. In documents such as the bond prospectus, it is strictly prohibited to contain misleading promotional information that may be linked to government credit. Foreign debts issued by a local state-owned

enterprise undertaking local government financing function can be only used for repaying medium- and long-term foreign debts due within the future one year.

The PRC Government has released several additional regulations and rules relating to the financing vehicles of local governments in the PRC. The PRC Government may also continue to release new policies or amend existing regulations to control the increase in local government debts in the PRC. The implementation and interpretation of the legislations, regulations and rules by the PRC central government and different local governments may vary from one to the other. It is uncertain how they will be implemented and how it will affect the Group’s business and financial performance in the future. There is also no assurance that the Group’s financing model and business model will not be materially affected by future changes in the regulatory regime concerning local government fiscal debts and the financing platforms of local governments.

The PRC Government has no obligations under the Bonds or the Trust Deed if the Issuer fails to meet its obligations under the Bonds.

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

The PRC Government as the ultimate shareholder of the Issuer only has limited liability in the form of its equity contribution in the Issuer. As such, the PRC Government does not have any payment obligations under the Bonds. The payment obligations under the Bonds remain the sole obligation of the Issuer. Any ownership or control by the PRC Government (including the Yancheng Municipal Government) does not necessarily correlate to, or provide any assurance as to, the Issuer’s financial condition. If the Issuer does not fulfil its obligations under the Bonds and the Trust Deed, the Bondholders will only have recourse against the Issuer, and not the PRC Government.

Similar to other companies beneficially controlled by the PRC Government, the Issuer may be generally perceived to have access to liquidity support from its beneficial controlling shareholder in light of its ownership structure and the nature of its beneficial controlling shareholder, particularly in the event that the Issuer becomes financially distressed. However, the PRC Government as the ultimate shareholder of the Issuer only has limited liability in the form of its equity contribution in the Issuer or the Trust Deed if the Issuer fails to meet its obligations under these instruments, and, as a result, no financial support from any PRC governmental entity may materialise. The Issuer should rely upon the cash flow generated from its operations and external borrowings to satisfy its cash needs for servicing its outstanding indebtedness and for financing its operating activities. The Bonds are solely to be repaid by the Issuer as an obligor under the relevant transaction documents and as an independent legal person.

Potential liability for non-compliance with environmental laws and regulations.

The Group is subject to certain laws and regulations concerning the protection of the environment. Particular environmental laws and regulations that apply to each of the Group’s business segments vary according to its location, environmental factors associated with utility supplies, development, constructions and/or operations and current and future use of the land and properties. As PRC Government increases its focus on environmental protection, the Group’s businesses and projects may subject to stricter review and inspection, and the approval processes for future concession rights and projects may be prolonged. Compliance with environmental laws and conditions may result in delays, causing the Group to incur substantial compliance and other costs and prohibit or severely restrict the Group’s activity in environmentally-sensitive regions or areas.

The Group is heavily regulated by laws and regulations in some of the areas that it operates, including environmental regulations applicable to mining and manufacturing industries and laws regulating the production, sale, storage, transportation and usage of dangerous chemicals, the generation, storage, handling, use and transportation of waste materials, the emission and discharge of waste materials into soil, air or water, energy saving standards and the health and safety of employees. The Group is also responsible for clean-up in the event that its operations result in contamination at its production facilities, and may incur substantial costs for such clean-up, which may have a material adverse effect on its business, financial condition, results of operations and prospects. In addition, the particular environmental laws and

regulations that are applicable to each of the Group’s business segments vary according to their respective location, the environmental factors associated with their specific business operations. As at the date of this Offering Circular, the Group has adopted and implemented a significant number of environmentally friendly protection measures in its work, which allows the Group to adhere to environmental regulations and apply environmentally friendly technology to create green products.

There can be no assurance that future environmental investigations will not reveal material environmental liabilities of the Group, nor that the PRC Government will not change existing laws and regulations or impose additional or stricter laws or regulations, compliance with which may be onerous. If the Group is unable to effectively and promptly comply with these changes, the Group may incur significant costs and may be subject to fines or be forced to suspend or completely shut down certain operations, which could have a material adverse effect on the Group’s business, financial condition and results of operations.

The Group is subject to the risk of major safety and environmental accidents in the course of its mining business operations.

In the course of the Group’s operations, in particular its coal and non-ferrous metal mining operations, the Group stores, handles and transports volatile, flammable and/or hazardous liquid and gaseous chemical products (such as benzene, tar, sulphuric acid and coal gas) that are susceptible to the risks of fire, explosion and other hazards during the manufacture, storage and transportation processes. Improper handling of these materials and products can cause serious pollution, fires, explosions, personal injuries and possible legal liabilities. Any accidents resulting from improper handling of these materials may cause serious health and safety issues, or significant damages to the Group’s facilities and equipment, and may cause interruptions to the Group’s business and operation and cause adverse publicity for the Group. In addition, the Group’s coal mines and operating facilities may be damaged by water, gas, fire or cave-ins due to unstable geological structures, which may affect the safety of its workforce as well as its costs of producing coal, including without limitation, roof collapses, deterioration in the quality or variations in the thickness of coal seams, mine water discharge and flooding, inclement weather, explosions from methane gas or coal dust, ground falls and other mining hazards. Its coal and non- ferrous metal mining business operations also involve the use of heavy machinery which poses inherent risks. The Group or its third-party contractors may encounter accidents, maintenance or technical difficulties, mechanical failures or breakdowns during the exploration, mining and/or production processes.

Although the Group conducts geological assessments on mining conditions and adapt its mining plans to the mining conditions at each mine, adverse mining conditions may endanger its workforce, increase its production costs, reduce output or suspend its operations temporarily. The Group cannot guarantee safety incidents will not occur or that its insurance coverage will be sufficient to cover all losses in the future, including injuries sustained by its employees and/or employees of third parties to which it outsource the operation of the Group’s mining coals. See “– The insurance coverage of the Group may not adequately protect it against all operational risks or any potential liabilities or losses”.

If any of the foregoing safety or environmental accidents were to occur in the future, the Group’s business, financial condition, results of operations and prospects will be adversely affected as it would be subjected to potentially significant liabilities relating to personal injury, death or property damage, civil and/or criminal liabilities, including fines and the suspension or revocation of the Group’s mining and exploration permits. The Group may also face compensation claims from any parties, including, but not limited to, its employees, customers or governments or other entities or individuals situated next to or adjacent to it. In the worst-case scenario, the Group may be forced to suspend its operations, which may adversely affect its business, reputation, financial condition, results of operations and prospects.

The Group’s operations are subject to force majeure events, natural disasters and outbreaks of contagious diseases.

Force majeure events, natural disasters, catastrophe, contagious diseases (such as severe acute respiratory syndromes (“SARS”), avian influenza, Ebola virus disease and COVID-19) or other events could result in severe personal injury to the Group’s staff, property damage and environmental damage, which may curtail the Group’s operations, cause delays in estimated completion dates for the Group’s various construction and infrastructure projects and could in turn materially

and adversely affect the Group’s cash flows and accordingly, adversely affect its ability to repay any debt. For instance, the outbreak of COVID-19 in the PRC has resulted in business suspensions, widespread traffic disruptions, travel and other restrictions and quarantines in different places, which have led to economic slowdown, labour shortages, supply or delivery chain constraints, price discounting and counterparty defaults, which have already adversely affected the economic conditions of the PRC and the Group’s business operations, especially the labour-intensive business segments such as tractor manufacturing and textile manufacturing, and its service business segments such as hotel operations, car dealership and commercial trading.

In addition, the Group’s operations are mainly based in Jiangsu Province, which is exposed to potential natural disasters, most commonly, mudslides, floods, landslides, rainstorms, droughts, hails and earthquakes. If any of the Group’s developments is damaged by severe weather or any other disasters, accidents, catastrophes or other events, the Group’s operations may be significantly interrupted. The occurrence or continuance of any of such unforeseen events or similar events could increase the costs associated with the Group’s operations and reduce its ability to operate its businesses effectively, thereby reducing its operating income and profits.

The global economy is facing significant uncertainties and disruptions caused by COVID-19.

In March 2020, the World Health Organisation declared the COVID-19 to be a global pandemic. There have been widespread infections in the United States, Europe and other parts of the world and increased fatality rates in many countries. Many countries have declared state of emergency, closed their borders to international travellers, and restricted movements of their citizens with a view to contain the pandemic and there is no assurance that such measures will be effective. Several countries and territories have imposed strict quarantine measures, such as social distancing rules, closure of work sites, restaurants, bars and non-essential services, and even complete lock-downs of certain populations or areas, in an attempt to control the spread of the virus and mitigate the impact of the outbreak. Citizens in many affected countries and areas are being advised or required to stay at their homes subject to limited exceptions. The reduced consumption, commercial activities and industrial production may severely disrupt their economies and the global supply chain and may result in recessions in these economies.

There are indications that COVID-19 is continuing to spread across the globe so it is possible that many more countries may be affected. Due to disagreement between Saudi Arabia and Russia on their daily production outputs of crude oil, Saudi Arabia has significantly increased its daily output which has led to a significant decline in global crude oil prices. The oil price remains volatile, in spite of reports that a deal has been reached between the OPEC+ group, an alliance between OPEC and other oil producers, including Russia, to cut oil production. There has been extreme volatilities in the global markets across all asset classes: stocks, bonds, oil and metals in the recent weeks and these volatilities may continue.

Governments and central banks around the globe have introduced or are planning fiscal and monetary stimulus measures including tax cuts, direct subsidies, rates cuts, bond repurchase programmes and suspension or relaxation of prudential bank capital requirements. These measures aim to contain the economic impact of the pandemic, stabilise the markets and provide liquidity easing to the markets. There is no assurance that such measures may be introduced in time or will be sufficient or effective in delivering their policy objectives or be successful in containing the economic impact of the pandemic or stabilising the markets.

As a result, the global economy is facing significant uncertainties and the global financial markets are experiencing significant volatilities which may adversely affect the economy of the PRC, and in turn, affect the Group, its business and financial condition, as well as outlook and the value of the Bonds. Investors must exercise caution before making any investment decisions.

The insurance coverage of the Group may not adequately protect it against all operational risks or any potential liabilities or losses.

The Group faces various operational risks in connection with its business, including but not limited to construction interruptions caused by operational errors, electricity outages, raw material and construction material shortages, equipment failure and other operational risks; operating limitations imposed by environmental or other regulatory requirements; defective quality of the real estate property it develops; work-related personal injuries; on-site construction related

accidents; disruption in the global capital markets and the economy in general; loss on investments; environmental or industrial accidents; and catastrophic events such as mudslides, floods, landslides, rainstorms or other natural disasters.

The Group faces various risks in connection with its businesses and there can be no assurance that the insurance policies maintained by the Group will provide adequate coverage in all circumstances. The occurrence of any such incident for which the Group is uninsured or inadequately insured may have a material adverse effect on its business, financial condition and results of operations.

Historical consolidated financial information of the Group may not be indicative of its current or future results of operations and investors should exercise caution in comparing financial data between periods due to material acquisition, disposals or material changes to the list of consolidated subsidiaries.

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

The Group establishes, as well as acquires and disposes of equity interests in, portfolio companies from time to time in accordance with the Group’s business. For example, on 9 November 2017, in line with the transformation and upgrade strategies of Carrefour China Holdings N.V. (“Carrefour China”), the Issuer, Yueda South and Carrefour China entered into another agreement to give Carrefour China the operation rights of the supermarkets under the Group’s operation. As at 31 December 2017, the financial performance of these Carrefour supermarkets were no longer consolidated into the Group’s consolidated financial statements. Due to poor non-ferrous metal market conditions, starting from 2017, the Group started its series disposal of entities in the non-ferrous metals business. As a result, period-to-period comparisons of the Group’s historical operating results must be evaluated in light of the impact of such transactions.

The Group has substantial indebtedness and may incur substantial additional indebtedness in the future, which could adversely affect its future strategy and operation.

The Group currently has, and will continue to have in the foreseeable future, a substantial amount of indebtedness. The substantial level of existing indebtedness and incurrence of further indebtedness could have important consequences to the Group’s business. As at 31 December 2017, 2018 and 2019, the Group’s debt to assets ratio was 72.8 per cent., 69.7 per cent. and 64.8 per cent., respectively.

The total liabilities for the Group as at 31 December 2017, 2018 and 2019 were RMB44,981.5 million, RMB47,321.9 million and RMB45,072.0 million, respectively. The Group mainly finances through bank loans and debt securities and has substantial interest-bearing debt. As at 31 December 2019, the Group had interest-bearing debt of RMB38.3 billion, which represents 85.0 per cent. of its total liabilities, including short-term borrowings of RMB12,203.8 million, long-term borrowings of RMB3,822.6 million, non-current liabilities due within one year of RMB4,809.6 million and bonds payable of RMB4,930.0 million.

Comparing to the size of its liabilities, the Group’s operating income and net profits are of a relatively smaller size and it may face pressure to pay its short-term debt obligations. For the years ended 31 December 2017, 2018 and 2019, the Group’s operating income was RMB18,340.0 million, RMB24,207.4 million and RMB23,590.2 million, respectively, the Group’s net profits were RMB156.4 million, RMB684.9 million and RMB858.7 million, respectively, whilst as at 31 December 2017, 2018 and 2019 its total current liabilities were RMB33,893.9 million, RMB35,206.7 million and RMB33,575.3 million, respectively. If the financing cost substantially increases or the Group’s financial situation deteriorates significantly in the future, the Group’s ability to repay its debts will be materially and adversely effected, which will in turn have a material and adverse impact on the Group’s business, financial condition and results of operations.

The Group is exposed to risks in relation to the significant inventories it maintains and the decrease in value of its inventories.

The Group’s businesses require a large amount of capital investment and working capital prior to completion of its projects. As at 31 December 2017, 2018 and 2019, the Group’s inventories amounted to RMB12,250.2 million, RMB14,061.6 million and RMB13,076.9 million, respectively, representing 39.9 per cent., 39.8 per cent. and 38.6 per cent. of the Group’s total current assets, respectively. The Group’s inventories mainly comprised raw materials, semi-finished products, stock products and real estate projects. Given the significant amount of inventories the Group maintains, any major delays in sales or value decrease of its inventories materially affect the Group’s assets liquidity and cause a material and adverse impact on the Group’s business, financial condition and results of operations.

The Group’s results of operations may be affected by material fluctuations in the results of operations of its key business segments.

The Group’s business portfolio primarily consists of four segments where energy and mineral resources and modern services contribution to the majority of the Group’s operating income. As such, the Group’s results of operations may be affected by material fluctuations in the results of operations of its key business segments. For the year ended 31 December 2019, the operating income from each of energy and mineral resources and modern services was RMB5,694.5 million and RMB15,443.6 million, respectively, representing 24.1 per cent. and 65.5 per cent., respectively, of the Group’s total operating income.

The Group engages in diversified businesses and is exposed to a combination of risks and uncertainties associated with the operations of the relevant businesses and in the relevant industries. For instance, due to substantial price fluctuations of coal and non-ferrous metals, the Group’s profit margin is substantially affected. Therefore, it is difficult to estimate the future performance of the Group’s key business segments. Any material decline in the operating, operating profit or operating profit margin of any of the Group’s key business segments may have a material adverse impact on the Group’s total operating income, operating profit or operating profit margin in the future.

The Group’s net profit experienced significant fluctuations.

The Group’s net profit has fluctuated greatly in the past three years due to a significant loss in its car dealership, car parts supply business and the improving performance in its energy and mineral resources and infrastructure investment business. For the years ended 31 December 2017, 2018 and 2019, the Group’s net profits were RMB156.4 million, RMB684.9 million and RMB858.7 million, respectively. The net profit for the Group’s car dealership, car parts supply business, specifically, were affected by the Saad related controversies in 2017. In 2018, the net profit of the Group increased significantly compared to 2017, primarily due to the improvement in performance of the Group’s energy and mineral resources segment and the increase in the Group’s toll collection from its expressways. There is no guarantee that the Group will be able to maintain the same profitability. In the case that the Group fails to maintain a healthy level of net profits, the Group’s business, financial condition and results of operations could be materially affected.

The Group has a high ratio of restricted assets.

As at 31 December 2019, the restricted assets of the Group were at RMB13.7 billion, which represented 40.4 per cent. of the Group’s total current assets and 55.8 per cent. of its net assets as at the same date, respectively. The Group’s restricted assets mainly consist of the land use rights, property, shares in listed companies and its subsidiaries and expressway toll collection rights mortgaged by the Group to financial institutions for bank loans. In the event of default, the proceeds from the sales of the restricted assets will be used to pay off the bank loans prior to other creditors such as the Bondholders. In addition, the presence of the large amount of restricted assets may also limit the Group’s capacity to obtain future financing on favourable terms which could result in a material adverse effect on the Group’s business, financial condition and results of operations.

The Group requires various approvals, permits and licences to operate its businesses.

Pursuant to the applicable laws and regulations in the PRC, the Group is required to obtain or renew approvals, permits and licences with respect to its relevant operations, such as land use permit, construction permit and concession agreements

and rights for its mining, infrastructure investment, real property development, car dealership and car parts supply. For instance, the Group is required to renew approvals, permits and licences with respect to its existing coal mines, its expressways and its real estate projects. In addition, the Group is required to obtain or maintain land use rights certificates and building ownership certificates for property and mines that it owns, or leases the same from owners possess valid land use rights certificates or building ownership certificates. If any of these approvals, permits and licenses are revoked, not renewed or not obtained, the Group could be required to cease its operations, which may have a material adverse effect on the Group’s business, results of operations and financial condition. There can be no assurance that the Group will be able to obtain or renew all necessary approvals, permits and licences on a timely basis or at all. Failure to comply with the applicable laws and regulations or the inability to obtain the relevant approvals, permits and licences could expose the Group to the imposition of sanctions, fines, penalties, revocation of licence or other punitive actions, including suspension of the Group’s business operations or restrictions or prohibitions on certain of the Group’s business activities, which may adversely affect the Group’s financial condition and results of operations.

A decline in traffic volume may adversely affect the operating income and earnings of the Group’s infrastructure investment business.

Traffic volume is directly and indirectly affected by a number of factors, including the availability, quality, proximity and toll rate differences of alternative roads, the existence and availability of other means of transportation, including rail and waterway, fuel prices and environmental regulations and seasonality.

The increase in transport capacity of railways in recent years has impacted the overall highway transportation industry. Widening and expansion works of nearby highways and local roads, as well as openings of new roads, further expansion and improvement of the highway network, parallel roads or substitutive routes, have hindered traffic growth on the expressways of the Group and brings negative impact on the growth of toll revenue of the Group.

While the Group takes into account government planning when positioning its expressways, new competing roads due to changes in government planning may become operational to divert traffic and other existing competing roads or modes of transportation may significantly improve their services, and consequently materially adversely affecting the results of operations and financial condition of the Group’s infrastructure investment business.

Additionally, fluctuation in fuel prices may affect traffic volume on the Group’s expressways. To the extent that fuel shortages or increasing fuel prices reduce the volume of traffic, the Group’s business, results of operations and financial condition may be materially and adversely affected.

The Group’s toll rates are subject to the regulation by the PRC Government.

All toll rates charged by the Group’s expressways are determined by the relevant pricing department and relevant transportation department of the government authorities where the expressways pass through. It is possible that the relevant governmental authorities could mandate the Group to reduce the toll rates charged by its expressways or keep the toll rates at the present level despite the increases in construction and operation costs. If the toll rates of the expressways operated by the Group were to be reduced or fail to reflect the Group’s costs, it could adversely affect the Group’s operating income and results of operations.

In addition, the State Council promulgated the Notice on Approval and Forwarding of Toll-Free on Major Festivals and Holidays for Small Passengers Vehicles Implementation Policy Promulgated by the Ministry of Transport etc. (《關於批轉交通運輸部等部門重大節假日免收小型客車通行費實施方案的通知)) on 24 July 2012 with regard to the Toll-Free on Major Festivals and Holdings for Small Passenger Vehicles Implementation Policy ( 《重大節假日免收小型客車通行費實施方案)) (“Holiday Toll-Free Policy”). Pursuant to the Holiday Toll-Free Policy, small passenger vehicles with seven or fewer than seven seats would be entitled to use certain toll roads during major statutory holidays in the PRC free of charge. Due to the COVID-19 virus outbreak, the Ministry of Transport of the People’s Republic of China issues the Notice on Waiver of Tolls on Toll Roads During Containment of COVID-19 Pneumonia (Jiao Gong Lu Ming Dian [2020] No.62) (《關於新冠肺炎疫情防控期間免收收費公路車輛通行費的通知) (交公路明電[2020] 62 號)) (“COVID-19 Virus Toll-free Policy”) on 15 February 2020, pursuant to which, with the approval from the State Council, the Ministry

of Transport determined that tolls of toll expressways nationwide will be waived during the containment of pneumonia pandemic caused by COVID-19. Pursuant to the COVID-19 Virus Toll-free Policy, all tolls were waived commencing from 00:00 on 17 February 2020 till the end of the containment of the pandemic. The COVID-19 Virus Toll-free Policy ceased to be in force on 6 May 2020. The COVID-19 Virus Toll-free Policy has caused a significant decrease of the income generated from the Group’s toll road business. The Group’s total revenue and results of operations have not been significantly affected by the implementation of the Holiday Toll-Free Policy and the COVID-19 Virus Toll-free Policy to date. However, there can be no guarantee that the PRC Government will not adopt any other policies in the future which may have further negative impact on the Group’s toll revenue and results of operations.

The Group may not be able to maintain its income level currently generated from its infrastructure investment business.

The Group’s infrastructure investment business is centred around its expressway operations where it generates substantially all of its operating income for this segment. As at the date of this Offering Circular, the Group has toll rights to five expressways where the concession rights for two of the expressways namely Xi’an-Tongchuan Expressway and Xuzhou Tongda Expressway are expected to expire June 2021 and December 2020, respectively. For the years ended 31 December 2017, 2018 and 2019, these two expressways contributed 56.0 per cent., 51.7 per cent. and 55.8 per cent. to the Group’s operating income generated for its infrastructure investment business. The expiration of concession rights may substantially impact the Group’s toll revenue and have a material adverse effect on the Group’s results of its operations and financial condition.

The operations of the Group’s real estate development business, are subject to extensive governmental regulations, approvals and compliance requirements related to the relevant industries in the PRC, and the PRC Government may adopt further measures to slow down growth in the real estate sector, affecting the Group’s real estate development business.

The Group’s businesses, especially its real estate development business, are heavily regulated and are affected by changes in government policies and regulatory measures affecting the property market. As with other PRC property developers, the Group must comply with various requirements mandated by the relevant PRC laws and regulations, including the policies and procedures established by local authorities designed for the implementation of such laws and regulations. In particular, the PRC Government exerts considerable direct and indirect influence on the PRC property sector by imposing industry policies and other economic and fiscal measures, such as control over the supply of land for property development, foreign exchange, property financing, taxation and foreign investment.

From 2004 to the first half of 2008, in response to concerns over the scale of the increase in property investment and the overheating of the property sector in the PRC, the PRC Government introduced policies to restrict development in the property sector.

Since late 2009, the PRC Government has further adopted a series of new policies to cool down the property market, including, amongst other things:

 abolishing certain preferential treatments relating to business taxes payable upon transfers of residential properties by property owners and imposing more stringent requirements on the payment of land premium by property developers;

 imposing property purchase restrictions on non-local citizens, decreasing the maximum loan to value ratio of mortgage loans offered to borrowers;

 increasing the minimum down payment to at least 60 per cent. of the total purchase price for second-house purchases with a minimum lending interest rate of at least 110 per cent. of the benchmark rate;

 restricting purchasers, in certain targeted cities, from acquiring second (or further) residential properties and restricting non-residents who cannot provide proof of local tax or social security payments for more than a specified time period from purchasing any residential properties;

 levying business tax on the full amount of the transfer price if an individual owner transfers a residential property within five years of purchase;

 launching new property tax schemes in certain cities such as Shanghai and Chongqing on a trial basis, levying property tax on some of the individual residential properties in these two cities;

 urging provincial governments to implement home purchase restrictions to control property prices, and setting certain criteria for the implementation of restrictions and, in the second half of 2011, extending such home purchase restrictions to certain second-tier cities in addition to the first- and second-tier cities which had adopted home purchase restriction measures;

 strictly enforcing the idle land-related law and regulations; and

 restricting the grant or extension of revolving credit facilities to property developers holding a large amount of idle land and vacant commodity properties.

On 20 February 2013, the State Council announced five measures on the control of the PRC property market, including: (1) stabilising property prices. Each major city in China was required to compile and announce its target for 2013 on how to control the prices of newly completed commodity properties; (2) strictly limiting speculative purchase of properties. Restrictions on purchasing commodity properties should be strictly implemented; expand the scope of experimental taxation on residential properties held by individuals; (3) increasing the supply of small to medium-sized commodity properties and land; (4) accelerating the construction of housing for low-income individuals; and (5) strengthening the supervision of the property market.

On 26 February 2013, the General Office of State Council issued the Notice on Continuing Adjustment and Control of Property Markets (關於繼續做好房地產市場調控工作的通知) (the “Notice”) which, amongst other restrictive measures, provides that further restraining measures are to be adopted to strengthen the regulation of the property market. Major cities which have implemented the commodity housing purchase restrictions are required to enforce purchase restrictions in all administrative areas of the cities and restricted housing is to include new commodity housing and pre-owned housing. Non- local residents who have one or more residential properties and fail to provide one-year or longer tax payment certificates or social insurance payment certificates will be barred from purchasing any residential properties located in the administrative areas subject to restrictions. For cities where housing prices are increasing at an excessively high rate, local branches of the PBOC may further raise the down-payment rate and mortgage interest rate for the purchase of a second residential property. In addition, the Notice stipulates that a 20 per cent. income tax on individuals on profits from sales of properties will be strictly enforced. Financial institutions, subject to credit requirements, will prioritise requests for mortgages for ordinary commodity housing construction projects in which medium and small housing units constitute 70 per cent. or more of the total units in such construction projects.

The Group has had to adapt its property development operations to these austerity measures. There can be no assurance that the PRC Government will not adopt more stringent policies, regulations and measures in the future. If the Group fails to adapt its property development operations to new policies, regulations and measures that may come into effect from time to time with respect to the real estate industry, or such policy changes disrupt its business or cause it to incur additional costs, the Group’s business, financial condition, results of operations and prospects may be materially and adversely affected.

In addition, in order to develop a property and complete the development, the Group must obtain various permits, licences, certificates and other approvals from the relevant administrative authorities at various stages of property development and leasing, as well as for hotel operations, including, for example, land use rights documents, planning permits, construction permits, pre-sale permits and certificates or confirmation of completion and acceptance. Each approval is dependent on the satisfaction of certain conditions.

There can be no assurance that the Group will not encounter major problems in fulfilling the conditions precedent to the receipt of approvals or that the Group will be able to adapt itself to new laws, regulations or policies that may come into effect from time to time with respect to the real estate industry in general or particular processes with respect to the issuance

of such approvals. There may also be delays on the part of the administrative bodies in reviewing the Group’s applications and in granting approvals. The Group may also be subject to periodic delays in its respective property development projects due to building moratoria in any of the areas in which it operates or plans to operate. If the Group fails to obtain, or experiences material delays in obtaining, the requisite governmental approvals, or if a building moratorium is implemented at one or more of its project sites, the development and sale of its projects could be substantially disrupted. Further, implementation of the laws and regulations by the relevant authorities, or the interpretation or enforcement of such standards, could require the Group to incur additional operating or other costs, which could, as a consequence, materially and adversely affect the Group’s business, financial condition or results of operations.

The PRC property market is cyclical, and the Group’s property development activities are susceptible to significant fluctuations.

The PRC property market is, and is expected to continue to be, cyclical as a result of changes in market supply and demand. The rapid expansion of the property market in certain major cities in the PRC, including Guangzhou, Beijing and Shanghai, in the early 1990s culminated in an oversupply in the mid-1990s and a corresponding fall in property prices and rents in the second half of that decade. In addition, there was also a fall in property prices and rental yields during the economic downturn in 2008. Since the late 1990s, the number and price of residential property development projects have increased in major cities as a result of an increase in demand driven by domestic economic growth. In particular, prices of residential properties in major PRC cities such as Shanghai and Beijing have experienced rapid and significant growth. In recent years, however, risk of property oversupply is increasing in certain parts of China, where property investment, trading and speculation have become overly active. In the event of actual or perceived oversupply, together with the effect of the PRC Government policies to curtail the overheating of the property market, property prices may fall significantly and the operating income and results of operations of the Group could be adversely affected. The growth of the property market in the PRC has become relatively flat during last 12 months. It is uncertain what the effect of the lifting of various government regulations on the property market will be as, ultimately, property prices are driven by demand and supply. There can be no assurance that the problems of oversupply and a property prices crash will not recur in the PRC property market. Any recurrence of such risks could adversely affect the business and financial condition of the Group’s real estate development business, especially its property development projects.

The results of operations of the Group’s property development projects are subject to seasonality and may fluctuate from quarter to quarter. The number of properties that the Group could develop or complete during any particular period is subject to a number of factors, including, but not limited to, construction schedules, permit approvals and lengthy development periods before revenues and profits from developments are realised and recognised (in particular, for projects that are developed in multiple phases over the course of several years). Therefore, the cyclical property market in the PRC affects the timing of both the Group’s acquisition of sites and the Group’s sale of completed properties. This cyclicality, combined with the lead time required for the completion of projects and the sale of properties, means that the results of operations of the Group relating to property development activities may be susceptible to significant fluctuations from year to year.

To the extent that supply in the overall property market significantly exceeds demand, the Group may be subject to significant market downturns and disruptions. Alternatively, any serious downturn in regional or global market conditions could materially and adversely affect and disrupt the property market in the PRC, and the financial condition and results of operations of the Group could be materially and adversely affected.

Changes in the organisational structure of the Group may affect the Group’s financial condition and results of operations.

The Group may undergo certain organisational restructuring from time to time which may involve disposal certain subsidiaries and affect whether certain subsidiaries of the Group will be consolidated in the Group’s consolidated financial statements. For example, on 9 November 2017, in line with the transformation and upgrade strategies of Carrefour China, the Issuer, Yueda South and Carrefour China entered into another agreement to give Carrefour China the operation rights of the supermarkets under the Group’s operation. As at 31 December 2017, the financial performance of these Carrefour supermarkets were no longer consolidated into the Group’s consolidated financial statements. Despite the fact that de-

consolidation of Carrefour supermarkets had a positive effect to the Group’s overall financial performance due to continuous loss suffered from such business, there can be no assurance that any such future such organisational restructuring or changes in the Group’s shareholding structure will not have a material adverse effect on the Group’s business, financial condition, results of operations and prospects.

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

The Group may consider, although unlikely in the near future, expanding its business by acquiring certain interests in other companies. During the course of these transactions, the Group will conduct due diligence investigations with respect to the target companies, but the due diligence with respect to any acquisition opportunity may not reveal all relevant facts that are necessary or useful in evaluating such opportunity, which could subject the Group to unknown financial, legal and other risks and liabilities. When determining the consideration for any acquisition, the Group will consider various factors, including but not limited to the quality of the target business, estimated costs associated with the acquisition and the management of the target business, prevailing market conditions and intensity of competition. The Group will also face various issues arising from the acquisition after the relevant transaction is completed, such as integration of the business into its operations and allocation of internal resources. There can be no assurance that the Group will be able to address these issues effectively.

In addition, any major acquisition or transaction of similar nature may consume substantial management attention and financial resources of the Group or even cause the Group to incur significant indebtedness. Any material decreases in its financial resources may limit the Group’s ordinary operating activities and increase pressure on its liquidity, and in turn could adversely affect its business, financial condition and results of operations.

The Group’s success depends on the continuing efforts of its senior management team and other key personnel.

The Group is exposed to business, market and regulatory risks relating to different industries and markets, as the Group is expanding its businesses to new industries and markets such as medical industry and pension industry, in which it has limited operating experience. The Group needs to devote substantial resources to become familiar with, and monitor changes in, different operating environments so that it can succeed in its businesses.

In addition, as the Group has a number of subsidiaries, successful operation of the Group requires an effective management system. As the Group continues to grow its businesses and expand into various industries, the Group’s operations may become more complex, which would increase the difficulty of implementing its management system.

The Group’s future success depends heavily on the continuing services of the members of its senior management team. Competition for senior management and key personnel is intense while the pool of qualified candidates is very limited, and the Group may not be able to retain the services of senior executives or other key personnel, or attract and retain high- quality senior executives or other key personnel in the future. Furthermore, the Group may lose the services of senior executives or other key personnel if the Group’s controlling shareholders choose to shuffle the management teams of such shareholders’ subsidiaries or otherwise choose to change the composition of the Group’s management and key personnel team, the Group’s business may be disrupted and its financial condition, results of operations and prospects may be materially and adversely affected.

The Group may not be able to execute successfully or fully its business strategy with respect to assets, projects or subsidiaries in which the Group has minority interests.

The Group may not be able to execute successfully or fully its business strategy with respect to assets, projects or subsidiaries in which the Group has minority interests. Currently, the Group operates some of its modern services and infrastructure investment businesses jointly with other companies and the Group’s influence over such entities may be limited, with Dongfeng Yueda Kia as an example. The Group may fail to manage such assets or projects successfully. The Group’s involvements with such assets or projects are generally subject to the terms of applicable agreements and arrangements. The Group may not have any board representation, veto power or power to exercise control over the management, policies, business and affairs of certain of its subsidiaries in which the Group does not have majority interests.

In the event that the Group cannot agree with other shareholders on management decisions, this may result in a deadlock and may impede the further development of the relevant business in that they may delay or prevent critical decisions. In addition, the Group’s role as a non-controlling shareholder in these companies may also have an adverse impact on the Group’s return on investment, as management or other shareholders of these companies might institute or undertake transactions, strategies, policies or programs that result in a decrease in the value of these companies and, as a consequence, the Group’s return on investment. In addition, the Group’s results of operations could be materially and adversely affected if the Group takes any significant impairment charge on its investments in any such entity where such entity fails to perform financially as expected or otherwise.

The Group is subject to extensive regulatory requirements and the non-compliance of which would materially and adversely affect the Group’s financial condition and results of operations.

The Group is subject to extensive laws, policies and regulatory requirements issued by the relevant governmental authorities in the PRC and other jurisdictions, including but not limited to safety and health regulations. The Group is also subject to the supervision of a number of government ministries and departments, including NDRC, the Ministry of Housing and Urban-Rural Development, Ministry of Ecology and Environment of the PRC and the Ministry of Emergency Management of the PRC. Any breach of the laws or regulations to which the Group is subject to may result in the imposition of fines and penalties, the suspension or closure of its relevant operations or the suspension or revocation of its licences or permits to conduct its relevant businesses.

Given the magnitude and complexity of the laws and regulations to which the Group is subject to, compliance with such laws and regulations or the establishment of effective monitoring systems may be onerous or require a significant amount of financial and other resources. As at the date of this Offering Circular, the Group has not received any notice regarding any material non-compliance with the applicable safety regulations or requirements from any government authority. Although the Group is obliged to comply with all applicable laws and regulations, there can be no assurance that the Group will be in compliance at all times. Any failure to comply with applicable laws and regulations could subject the Group to, among other things, civil liabilities and penalties.

In addition, PRC laws and regulations are constantly evolving. There can be no assurance that the PRC Government will not impose additional or stricter laws or regulations, which may increase compliance costs of the Group and in turn, materially affect the Group’s financial condition.

The Group may be subject to legal, litigation and regulatory proceedings.

The Group may be involved, from time to time, in legal proceedings arising in the ordinary course of its operations. Litigation arising from any failure, injury or damage from the Group’s operations may result in the relevant member of the Group being named as defendant in lawsuits asserting large claims against such member of the Group or subject such member of the Group to significant regulatory penalties. These risks often may be difficult to assess or quantify and their existence and magnitude often remain unknown for a substantial period of time. Actions brought against the Group may result in settlements, injunctions, fines, penalties or other sanctions adverse to the Group’s reputation, financial condition and results of operations. Even if the Group is successful in defending against these actions, the costs associated with the Group’s defence may be significant. A significant judgment, arbitration award or regulatory action against the Group, or a disruption in the Group’s business arising from adverse adjudications in proceedings against the Group’s general manager, senior management or key employees, would materially and adversely affect the Group’s liquidity, business, financial condition, reputation, results of operations and prospects.

In addition, the Group may have disagreements with regulatory bodies in the course of its operations, which may subject it to administrative proceedings and unfavourable decrees that result in liabilities. Also, in the event that the Group makes any other investments or acquisitions in the future, there can be no assurance that the Group would not have any exposure to any litigation or arbitration proceedings or other liabilities relating to the acquired businesses or entities.

Future changes in laws, regulations or enforcement policies in the PRC could adversely affect the Group’s business.

Laws, regulations and enforcement policies in the PRC, including those regulating the land development industry and real estate industry are evolving and are subject to future changes. These changes could adversely impact the Group’s business operations. In addition, different regulatory authorities may have different interpretation and enforcement of the policies affecting the industries in which the Group operates, which requires companies to meet policies requirements issued by the relevant regulatory authorities from time to time, and obtain applicable approvals and complete filings in accordance with the relevant regulatory authorities’ interpretation and enforcement of such policies.

If applicable laws and regulations change adversely or the relevant regulatory authorities change their interpretation or enforcement of relevant policies in the future, the Group may be required to obtain further approvals or meet other additional regulatory requirements. In addition, if there are any future changes in applicable laws, regulations, administrative interpretations or regulatory documents, or stricter enforcement policies by the relevant PRC regulatory authorities, more stringent requirements could be imposed on the industries in which the Group is currently operating. Compliance with such new requirements could impose substantial additional costs or otherwise have a material adverse effect on the Group’s business, financial condition and results of operations. In addition, if the Group fails to meet such new rules and requirements relating to approval, construction, environmental or safety compliance of its operations, the Group may be ordered by the relevant PRC regulatory authorities to change, suspend construction of or close the relevant production facilities. Alternatively, these changes may also relax some requirements, which could be beneficial to the Group’s competitors or could lower market entry barriers and increase competition. As a result, the Group’s business, financial condition and results of operations could be materially and adversely affected.

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

The Group relies heavily on its quality control systems to ensure the safety and quality of its projects. Therefore, the Group needs to maintain an effective quality control system to monitor the quality and safety of its car dealership, car parts supply and real estate development activities as well as other operational activities. The effectiveness of the Group’s quality control system depends significantly on a number of factors, including the design of the system, the related training programme as well as its ability to ensure that the Group’s employees adhere to its quality control policies and guidelines. Any failure or deterioration of the Group’s quality control systems could result in defects in its projects, which in turn may subject the Group to contractual liability and other claims. Any such claims, regardless of whether they are ultimately successful, could cause the Group to incur significant costs, harm its business reputation and result in significant disruption to its operations. In addition, if any such claims were ultimately successful, the Group could be required to pay substantial monetary damages or penalties. There can be no assurance that failures in its quality control systems will not occur in the future, and any such failure could have an adverse effect on the Group’s business and operations.

The Group may be subject to risks related to tax law changes.

On 23 March 2016, MOF and the SAT issued the Circular of Full Implementation of Business Tax to Value-added Tax Reform (財政部、國家稅務總局關於全面推開營業稅改徵增值稅試點的通知) (“Circular 36”), which stipulates that, as at 1 May 2016, all payers of business tax, including taxpayers engaged in the construction and real estate industries, shall be included in the scope of a pilot programme and subject to value-added tax (“VAT”) instead of business tax. Circular 36 may have an impact on the Group’s business model as it may increase the tax burden of the Group. On 4 April 2018, MOF and the SAT issued the Notice of the Ministry of Finance and the State Administration of Taxation on Adjusting Value-added Tax Rates (財政部、稅務總局關於調整增值稅稅率的通知) (“Circular 32”), which stipulates that the tax rate for provision of construction services and transfer of land use rights shall be reduced from 11 per cent. to 10 per cent. from 1 May 2018 onwards. In addition, on 20 March 2019, MOF, the SAT and the General Administration of Customs issued the Announcement on Relevant Policies for Deepening Value-Added Tax Reform (關於深化增值稅改革有關政策的公告) (“Circular 39”), which stipulates that the tax rate for provision of construction services and transfer of land use rights shall be reduced from 10 per cent. to 9 per cent. from 1 April 2019 onwards.

As Circular 36, Circular 32 and Circular 39 are relatively new and given the limited volume of published decisions relating to their application, there are uncertainties as to the interpretation and enforcement of Circular 36, Circular 32 and Circular 39 and/or any tax-related laws and regulations which may be promulgated in the future from time to time. These tax law changes and the related uncertainties may have a material adverse effect on the Group’s operating income and could in turn materially and adversely affect the Group’s business, financial condition and results of operations.

The Issuer published and may continue to publish periodical financial information pursuant to applicable PRC regulatory rules. Investors should exercise caution and not place any reliance on financial information other than that disclosed in this Offering Circular.

The Issuer is a frequent debt issuer in the PRC. According to applicable PRC securities regulations on debt capital markets, the Issuer needs to publish its quarterly, semi-annual and annual financial information to satisfy its continuing disclosure obligations relating to its debt securities issued in the domestic capital markets. After the Bonds are issued, the Issuer is obligated by the terms of the Bonds, among others, to provide holders of the Bonds with its audited financial statements and certain unaudited periodical financial statements. The quarterly and semi-annual financial information published by the Issuer in the PRC is normally derived from the Issuer’s management accounts which have not been audited or reviewed by independent auditors. As such, save as disclosed in this Offering Circular, the financial information published in the PRC should not be referred to or relied upon by potential purchasers to provide the same quality of information associated with any audited or reviewed information. The Issuer is not responsible to holders of the Bonds for the unaudited and unreviewed financial information from time to time published in the PRC and therefore investors should not place any reliance on any such financial information.

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

Following the 18th Chinese Communist Party Congress in 2012 and the wide-reaching anti-corruption campaign in the PRC, the Central Leading Group for Inspection Work (the “Inspection Leading Group”), a co-ordination body set up under the Central Committee of the Chinese Communist Party for the purpose of managing party disciplinary inspections nationwide, has dispatched inspection teams to provinces and central government organs such as ministries and state-owned enterprises, including the Group, in the PRC to conduct inspection work on party disciplinary enforcement.

The Group believes that the inspection team’s findings will not materially and adversely affect the business, financial condition and results of operations of the Group. However, there can be no assurance that there will not be any further investigations or actions against the Group or its officers or employees resulting from the findings taken by the Inspection Leading Group or other governmental authorities or that such investigations or actions would not affect the Group as a result.

In addition, the Group may be exposed to fraud or other misconduct committed by its employees, representatives, agents, customers or other third parties that could subject it to financial losses and sanctions imposed by governmental authorities, which in turn affects its reputation. These misconducts could include: hiding unauthorised or unsuccessful activities, resulting in unknown and unmanaged risks or losses; intentionally concealing material facts, or failing to perform necessary due diligence procedures designed to identify potential risks, which are material to the Group in deciding whether to make investments or dispose assets; improperly using or disclosing confidential information; recommending products, services or transactions that are not suitable for the Group’s customers; misappropriation of funds; conducting transactions that exceed authorised limits; engaging in misrepresentation or fraudulent, deceptive or otherwise improper activities when marketing or selling products; engaging in unauthorised or excessive transactions to the detriment of the Group’s customers; making or accepting the bribery activities; conducting any inside dealing; or otherwise not complying with applicable laws or the Group’s internal policies and procedures.

In particular, the Group is required to comply with applicable anti-money laundering, anti-terrorism laws and other regulations in the PRC, Hong Kong and other relevant jurisdictions.

The Group’s internal control procedures are designed to monitor its operations and ensure overall compliance. In particular, the Group has adopted policies and procedures aimed at detecting and preventing the use of its business platforms to

facilitate money laundering activities and terrorist acts. However, such internal control procedures may be unable to identify all incidents of non-compliance or suspicious transactions in a timely manner, if at all. In addition, it is not always possible to detect and prevent fraud and other misconduct, and the precautions undertaken by the Group to prevent and detect such activities may not be effective. There can be no assurance that fraud or other misconduct will not occur in the future. If such fraud or other misconduct does occur, it may cause negative publicity as a result and the relevant government agencies may freeze its assets or impose fines or other penalties on the Group. Any of these may materially and adversely affect the Group’s reputation, financial condition and results of operations.

The Group may be adversely affected by the performance of third-party contractors.

The Group engages a large number of third-party contractors in connection with its various businesses. There can be no assurance that the services rendered by any of these independent contractors or subcontractors will always be satisfactory or meet its quality and safety standards. If the performance of any independent contractor is not satisfactory, the Group may need to replace such contractor or take other actions to remedy the situation, which could adversely affect the cost and construction progress of its projects and may have a material adverse effect on the Group’s business, financial condition and results of operations.

Government auctions of the land developed by the Group may not attract interest from prospective buyers or profits.

For the Group’s commercial housing business, the respective land use rights are sold through public auctions. The timing of the sale of land use rights is subject to the sales plan and the development strategies set by the local government. The local government determines the timing and scale of the sales after taking into account market conditions and the macroeconomic development plans of the local cities. The final prices at which land use rights are sold are ultimately determined by market forces through the auction bidding process. There can be no assurance about the exact timing of the sale of land use rights or the final price at which land use rights are sold.

As the developer of projects, the Group incurs significant costs and generally makes payments in connection with the commercial housing projects prior to the sale of the corresponding land use rights. In addition, as the public auctions, tenders and sale-by-listing are driven by market forces, there can be no assurance by the Group that sales of the land use rights to the developed land will attract interest or competitive bids from prospective investors.

There may not be sufficient demand for the land use rights to the Group’s commercial housing projects and the number of qualified bidders may be limited as the government authorities require certain qualifications before bidders may participate in land use rights tenders. If the public auctions, tenders or sale-by-listing for the land use rights to the Group’s commercial housing projects fail to attract interest from prospective buyers, the land use rights may be sold at prices below profit expectations. Accordingly, there can be no assurance by the Group that the construction costs of its projects will not exceed the revenue received in respect of such projects. In addition, there can be no assurance as to the exact timing of the sale of land use rights or the final price at which land use rights are sold. Failure or delays in the sale of land use rights may have a material adverse effect on the business, financial condition and results of operations of the Group’s business.

The Group is exposed to general risks associated with the ownership and management of real estate.

Real estate development is subject to risks incidental to the ownership and management of real properties, including, among other things, competition for purchasers and tenants, changes in market rents, inability to renew leases or re-let space as existing leases expire, inability to collect rent from tenants due to bankruptcy or insolvency of tenants or otherwise, inability to dispose of major investment properties for the values at which they are recorded in financial statements, increased operating costs and the need to renovate, repair and re-let space periodically and to pay the associated costs. Furthermore, investments in property are generally illiquid, which limits the ability of an owner or a developer to convert property assets into cash at short notice or requires a substantial reduction in the price that might otherwise be sought for such assets to ensure a quick sale. Such illiquidity may also limit the ability of the Group to vary its portfolio in response to changes in economic or other conditions, as well as present difficulty in obtaining timely and commercially favourable financing for properties that face weak market demand. Any of the above events could have a material adverse effect on the Group’s business, financial condition and results of operations.

Increasing competition in the PRC real estate market may adversely affect the Group’s business and financial condition.

The Group faces vigorous competition from large national and regional property developers, some of which may have stronger track records, greater financial and other resources and capabilities and/or name recognition than the Group.

Competition among property developers for land, financing, raw materials and skilled management and labour resources may result in increased costs for land acquisition and construction, an oversupply of properties in markets where such competition is particularly intense, a decrease in property prices, and delays in the government approval process. In addition, the property market in the PRC where the Group has operations have historically experienced cyclic fluctuations, which are expected to continue going forward. If the Group does not respond to changes in the competitive landscape in a timely and effective manner, there could be a material adverse effect on its business, financial condition and results of operations.

Price fluctuations and supply shortages of construction materials or utilities may cause a substantial disruption to the Group’s business and results of operations.

Due to the Group’s scale of operations, it requires large quantities of construction materials such as steel, cement and sand to support its housing projects and its infrastructure construction business and therefore it is important for the Group to secure reliable supplies of raw materials in order to complete its projects with a high-quality standard. The Group sources raw materials externally, and purchases these raw materials based on prevailing market prices. Price volatility caused by external conditions are beyond the Group’s control. These conditions include market price fluctuations or changes in government policies. There is no assurance that the Group’s key suppliers will continue to provide the Group with raw materials at reasonable prices or at the level of quality required by the Group’s affordable housing and infrastructure businesses. Any significant increase in the price of raw materials required for the Group’s construction projects or deterioration in the quality of the raw materials supplied to the Group, or material disruption to the supply of raw materials to the Group’s business could have a material adverse effect on the business, financial condition and results of operations of the Group’s businesses.

The Group’s business may be adversely affected by fluctuations in interest rates.

The Group’s borrowings are largely from domestic lenders in the PRC. While the Group’s domestic bonds are issued on a fixed interest rate basis, a substantial portion of the Group’s borrowings from banks are on a floating interest rate basis, which is subject to benchmark lending rates set by the People’s Bank of China (the “PBOC”). The PBOC may adjust the benchmark rates from time to time in response to macroeconomic conditions and developments, which would in turn affect the Group’s finance expenses and results of operations. Any increase in interest rates may not only raise the Group’s finance expenses but may also adversely affect market demand from property purchasers due to higher costs to obtain mortgages, which would negatively impact the Group’s sales revenues. Similarly, interest rate volatility can render it difficult for the Group to formulate concrete development plans and growth strategies. There can be no assurance that prevailing interest rates will not fluctuate significantly in the foreseeable future, and any significant increase may have a material adverse effect on the Group’s business, financial condition and results of operations.

RISKS RELATING TO THE PRC The Group’s business, financial condition, results of operations and prospects could be adversely affected by slowdowns in the Chinese economy.

The Group primarily engages in the business operations in Yancheng City and Jiangsu Province and substantially all of the Group’s operating income is derived from the PRC. The Group relies, to a significant degree, on domestic demand in the industries it operates in to achieve growth in operating income. Such domestic demand is materially affected by industrial development, growth of private consumption and overall economic growth in the PRC. The global crisis in financial services and credit markets in 2008 caused a slowdown in the growth of the global economy with a corresponding impact on the Chinese economy. Since 2015, the PRC Government has adopted intensive reforms with the primary aim of restructuring and rebalancing the PRC economy towards a more sustainable model by focusing more on domestic

consumption and away from investment and export fuelled growth. As a consequence of these reforms and the overall instability in the recovery of the global economy, the year-on-year rate of gross domestic product (“GDP”) growth in the PRC has generally been slower in the past several years after three decades of rapid growth.

In March 2016, Moody’s changed the PRC Government’s credit rating outlook to “negative” from “stable”, which highlighted the country’s surging debt burden and questioned the government’s ability to enact reforms. In May 2017, Moody’s downgraded the sovereign credit rating of the PRC from Aa3 to A1 and changed its outlook to “stable” from “negative”, reflecting Moody’s expectation that economy-wide debt in the PRC will continue to rise as potential growth slows. In September 2017, Standard & Poor’s downgraded the sovereign credit rating of the PRC from AA- to A+, citing its concerns over the level of economic and financial risks within the PRC.

The continuing effects of reform in the PRC and the sovereign debt crisis in Europe may have an adverse effect on the global and PRC economies resulting in ongoing uncertainty for their overall prospects in the coming years. Any slowdown of the PRC economy may create a credit-tightening environment, increase the Group’s financing costs, negatively affect the PRC Government’s fiscal income and investment in fixed assets or reduce government subsidies to the Group, resulting in a material adverse effect on its business, financial condition, results of operations and prospects.

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

The Group’s financial condition, results of operations and prospects are, to a material extent, subject to economic, political and social conditions and government policy developments in the PRC. The PRC economy differs from the economies of most developed countries in many respects, including with respect to government involvement, level of development, economic growth rate, economic and political structure, control of foreign exchange, regulation of capital investment and allocation of resources. The PRC economy has been transitioning from a planned economy to a more market-oriented economy. In recent years, the PRC Government has implemented a series of measures emphasising market forces for economic reform, the reduction of state ownership of productive assets and the establishment of sound corporate governance in business enterprises. However, there can be no assurance that the PRC Government will continue to pursue economic reforms or that any such reforms will not have a material adverse effect on the Group’s business.

In addition, a large portion of productive assets in China remain owned by the PRC Government. The PRC Government retains the power to implement macroeconomic policies affecting the PRC economy and continues to play a significant role in regulating industrial development, allocating resources, setting monetary policy, implementing measures on production, pricing, management and taxation and providing preferential treatment to particular industries or companies. For example, the PRC Government may decide to change its current policies with respect to the industries the Group operates in, and as such, this could have an adverse impact on the Group’s business and results of operations.

The operations of the Group may be affected by rising inflation rates within the PRC.

Inflation rates within the PRC have been on a sharp upward trend in recent years. Increasing inflationary rates are due to many factors beyond the Group’s control, such as rising food prices, rising production and labour costs, high lending levels, PRC and foreign governmental policy and regulations, and movements in exchange rates and interest rates. It is impossible to accurately predict future inflationary trends. As a result, further inflationary pressures within the PRC may have a material adverse effect on the Group’s business and results of operations, as well as its liquidity and profitability.

The PRC legal system has inherent uncertainties that may affect the Group’s business and results of operations as well as the interest of investors in the Bonds.

Substantially all of the Group’s business is conducted, and assets located, in the PRC, and its operations are generally affected by, and subject to, the PRC legal system and PRC laws and regulations.

Since 1979, the PRC Government has promulgated laws and regulations in relation to general economic matters, such as foreign investment, corporate organisation and governance, commerce, taxation, foreign exchange and trade, with a view to developing a comprehensive system of commercial law. In particular, legislation has significantly enhanced the protections afforded to various forms of foreign investment in the PRC. The legal system in the PRC is continuing to

evolve. Even where adequate laws exist in the PRC, the enforcement of existing laws or contracts based on existing laws may be uncertain and sporadic, and it may be difficult to obtain swift and equitable enforcement or to obtain enforcement of a judgment by a court of another jurisdiction. In addition, the PRC legal system is based on written statutes and their interpretation, where prior court decisions may be cited as reference but have limited weight as precedents. Furthermore, a large number of these written statutes and other regulations promulgated may be relatively new with a limited volume of published decisions and a lack of established practice available for reference. Accordingly, there exist uncertainties about their interpretation, implementation and enforcement, and such uncertainties may have a negative impact on the Group’s business. The administration of PRC laws and regulations may also be subject to a certain degree of discretion by the executive authorities. This has resulted in the outcome of dispute resolutions not being as consistent or predictable compared to more developed jurisdictions.

The PRC has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in the PRC. The relative inexperience of the PRC’s judiciary in many cases also creates additional uncertainty as to the outcome of any litigation. In addition, interpretation of statutes and regulations may be subject to government policies reflecting domestic political changes. The Group cannot predict the effect of future legal development in the PRC, including the promulgation of new laws and regulations, changes to existing laws or regulations or the interpretation or enforcement thereof, or the inconsistencies between local rules and regulations and national law. As a result, there is substantial uncertainty as to the legal protection available to the Group and investors in the Bonds. In addition, the PRC legal system is based in part on government policies and internal rules (some of which are not published on a timely basis or at all) that may have retroactive effect. As a result, the Group may not be aware of its violation of these policies and rules until some time after the violation has occurred. This may also limit the remedies available to investors and to the Group in the event of any claims or disputes with third parties.

Any litigation in the PRC may be protracted and result in substantial costs and diversion of the Group’s resources and management attention. Each of these factors may have a material adverse effect on the Group’s business, results of operations and financial condition and the interest of holders in the Bonds.

Investors may experience difficulties in effecting service of legal process and enforcing judgments against the Group and the Group’s management

The Issuer and substantially all of the Group’s subsidiaries are incorporated in the PRC and substantially all of the Group’s assets are located in the PRC. In addition, substantially all of the Issuer’s directors and senior management reside within the PRC and the assets of the Group’s directors and officers may be located within the PRC. As a result, it may not be possible to effect service of process outside the PRC upon such directors and senior management, including for matters arising under applicable securities law. The Issuer has irrevocably submitted to the exclusive jurisdiction of the Hong Kong courts in the transaction documents relating to the Bonds. Hong Kong and the PRC have entered into certain arrangements on the reciprocal recognition and enforcement of judgments in civil and commercial matters (the “Reciprocal Arrangements”) which allow for a final court judgment (relating to the payment of money or other civil or commercial proceeding) rendered by a Hong Kong court or PRC court (as the case may be) to be recognised and enforced in the PRC or Hong Kong (as the case may be), provided certain conditions are met. However, certain matters may be excluded under the Reciprocal Arrangements and a judgment may be refused to be recognised and enforced by the requested place in certain circumstances such as for public policy reasons or where the judgment was obtained by fraud. As a general matter, a judgment of a court of another jurisdiction may be reciprocally recognised or enforced if the jurisdiction has a treaty with the PRC or if judgments of the PRC courts have been recognised before in that jurisdiction, subject to the satisfaction of other requirements. The PRC signed the Hague Convention on Choice of Court Agreements (the “Hague Convention”) in September 2017 which is intended to promote the use of exclusive choice of court agreements in international contracts and facilitate the creation of a recognition and enforcement regime for court judgements between contracting States. However, the signing of the Hague Convention does not have currently have any legal effect until it is ratified by the PRC Government. The PRC has not entered into treaties or arrangements providing for the reciprocal recognition and enforcement of judgments of courts with numerous countries, including Japan, the United States and the United Kingdom. Therefore, it may be difficult for Bondholders to enforce any judgments obtained from such foreign courts against the Group, the Issuer or any of their respective directors or senior management in the PRC.

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

The Group’s functional currency is Renminbi, and substantially all of the Group’s operating income is denominated in Renminbi. The Group conducts a minority part of its business overseas, and these business contracts may be denominated in foreign currencies. In addition, a portion of the Group’s Renminbi reserves may be required to be converted into other currencies in order to meet the Group’s foreign currency needs, including cash payments on declared dividends, and interest on the Bonds.

However, the PRC Government may restrict future access to foreign currencies for current account transactions at its discretion. If this were to occur, the Group might not be able to pay interest to the holders of the Bonds in foreign currencies. Moreover, capital account transactions must be approved by, or registered with, the State Administration of Foreign Exchange (“SAFE”) or its local branch. If the foreign exchange control system prevents the Group from obtaining sufficient foreign currency to satisfy its currency demands, the Group’s capital expenditure plans, business operations and consequently its results of operations and financial condition, as well as its ability to satisfy its obligations under the Bonds, could be materially and adversely affected.

Future fluctuations in the value of the Renminbi could have an adverse effect on the Group’s financial condition and results of operations.

The Group is subject to risks associated with foreign currency exchange rate fluctuations on its foreign currency- denominated business.

The exchange rate of the Renminbi against the Hong Kong dollar, U.S. dollar and other currencies fluctuates and is affected by, among other things, changes in PRC and international political and economic conditions and the PRC Government’s fiscal and currency policies. Since 1994, the conversion of the Renminbi into foreign currencies, including the Hong Kong dollar and U.S. dollar, has been based on rates set daily by the People’s Bank of China (the “PBOC”), based on the previous business day’s inter-bank foreign exchange market rates and exchange rates in global financial markets. From 1994 to 20 July 2005, the official exchange rate for the conversion of Renminbi to U.S. dollars was generally stable. On 21 July 2005, the PRC Government adopted a more flexible managed floating exchange rate system to allow the value of Renminbi to fluctuate within a regulated band that is based on market supply and demand with reference to a basket of currencies. On 19 June 2010, the PBOC announced that the PRC Government would reform the Renminbi exchange rate regime and increase the flexibility of the exchange rate. On 16 April 2012, the PBOC enlarged the previous floating band of the trading prices of Renminbi against the U.S. dollar in the inter-bank spot foreign exchange market from 0.5 per cent. to 1 per cent. in order to further improve the managed floating Renminbi exchange rate regime based on market supply and demand with reference to a basket of currencies. In March 2014, the PBOC further enlarged the floating band for the trading price of Renminbi against the U.S. dollar on the inter-bank spot exchange market to 2.0 per cent. around the central parity rate. On 11 August 2015, the PBOC adjusted the mechanism for market makers to form the central parity rate by requiring them to consider the closing exchange rate of the last trading date, the supply and demand of foreign exchange and the rate change at primary international currencies. In January and February 2016, the Renminbi experienced further fluctuations in value against the U.S. dollar. In the first half of 2020, the Renminbi fluctuated against the U.S. dollar amidst an uncertain trade and global economic climate and may be subject to further fluctuation. With the development of the foreign exchange market and progress towards interest rate liberalisation and Renminbi internationalisation, the PRC Government may in the future announce further changes to the exchange rate system. Fluctuations in the value of the Renminbi could adversely affect the value of the Group’s foreign currency-denominated transactions along with the value of the cash flow generated from its foreign currency-denominated operations, thereby adversely affecting its profitability and results of operations. This may also have an adverse effect on the Group’s plans to expand its international operations.

Certain PRC regulations governing PRC companies are less developed than those applicable to companies incorporated in more developed countries.

Substantially all of the Group’s members are established in the PRC and are subject to PRC regulations governing PRC companies. These regulations contain certain provisions that are required to be included in the joint venture contracts, articles of association and other major operational agreements of these PRC companies and are intended to regulate the

internal affairs of these companies. These regulations, and in particular, the provisions for protection of shareholders’ rights and access to information, are less developed than those applicable to companies incorporated in Hong Kong, the United States, the United Kingdom and other developed jurisdictions. In addition, any control which the Group has over any PRC entities within the Group and the exercise of its corresponding shareholder rights are subject to their respective articles of association and PRC laws applicable to foreign-invested enterprises in the PRC. Such laws and the application thereof may be different from the laws of other developed jurisdictions.

Any force majeure events or natural disasters, including the outbreak, or threatened outbreak, of any severe communicable diseases in the PRC, could materially and adversely affect the Group’s business and results of operations.

Any force majeure events, including the outbreak, or threatened outbreak, of any severe communicable disease (such as COVID-19, severe acute respiratory syndrome or avian influenza) in the PRC could materially and adversely affect the overall business sentiment and environment in the PRC, particularly if such outbreak is inadequately controlled. This, in turn, could materially and adversely affect domestic consumption, labour supply and, possibly, the overall GDP growth of the PRC. The Group’s operating income is currently derived primarily from its PRC operations, and any labour shortages on a contraction or slowdown in the growth of domestic consumption in the PRC could materially and adversely affect the Group’s business, financial condition and results of operations. In addition, if any of the Group’s employees are affected by a severe communicable disease, it could adversely affect or disrupt production levels and operations at the relevant factories, warehouses and facilities (including the closure of the Group’s factories, warehouses and facilities to prevent the spread of the disease) and materially and adversely affect the Group’s business, financial condition and results of operations. The spread of any severe communicable disease in the PRC may also affect the operations of the Group’s customers and suppliers, which could materially and adversely affect the Group.

Similarly, acts of terrorism, wars, threats of war, social unrest and the corresponding heightened travel security measures instituted in response to such events, as well as geopolitical uncertainty and international conflict and tension, could affect economic development and the stability of the PRC economy, which in turn, could have a material adverse effect on the business, financial condition and results of operations of the Group. In addition, the Group may not be adequately prepared in terms of contingency planning or have recovery capabilities in place to deal with a major incident or crisis. As a result, operational continuity of the Group may be materially and adversely affected and the Group’s reputation may be negatively impacted.

The Group’s labour costs may increase for reasons such as the implementation of the PRC Labour Contract Law or inflation in the PRC.

The PRC Labour Contract Law (中華人民共和國勞動合同法) became effective on 1 January 2008 in the PRC and was amended on 28 December 2012. It imposes more stringent requirements on employers in relation to entry into fixed-term employment contracts and dismissal of employees. Pursuant to the PRC Labour Contract Law, the employer is required to make compensation payments to a fixed-term contract employee when the term of their employment contract expires, unless the employee does not agree to renew the contract even though the conditions offered by the employer for renewal are the same as or better than those stipulated in the current employment contract. In general, the amount of compensation payment is equal to the monthly wage of the employee multiplied by the number of full years that the employee has worked for the employer. A minimum wage requirement has also been incorporated into the PRC Labour Contract Law. In addition, unless otherwise prohibited by the PRC Labour Contract Law or objected to by the employees themselves, the employer is also required to enter into open-ended employment contracts with employees who have previously entered into fixed- term employment contracts for two consecutive terms or have been working for the employer for more than 10 years.

In addition, under the Regulations on Paid Annual Leave for Employees (職工帶薪年休假條例), which became effective on 1 January 2008, employees who have worked continuously for more than one year are entitled to paid annual leave ranging from five to 15 days, depending on the length of the employees’ work time. Employees who consent to waive such vacation at the request of employers shall be compensated with an amount equal to three times their normal daily salaries for each vacation day being waived. Under the National Leisure and Tourism Outline 2013-2020 (國民旅遊悠閒綱要

2013-2020) which became effective on 2 February 2013, workers shall receive paid annual leave by 2020. As a result of the PRC Labour Contract Law, the Regulations on Paid Annual Leave for Employees (職工帶薪年休假條例) and the National Leisure and Tourism Outline 2013-2020 (國民旅遊悠閒綱要 2013-2020), the Group’s labour costs (inclusive of those incurred by contractors) may increase. Furthermore, under the PRC Labour Contract Law, when an employer terminates its PRC employees’ employment, the employer may be required to compensate them with such amount which is determined based on their length of service with the employer, and the employer may not be able to terminate efficiently open-ended employment contracts under the PRC Labour Contract Law without cause. In the event that the Group decides to change or decrease its workforce significantly, the PRC Labour Contract Law could adversely affect its ability to effect these changes in a cost-effective manner or in the manner that the Group desires, which could result in an adverse impact on the Group’s businesses, financial condition and results of operations.

To further strengthen the protection on labour remuneration, rest and vacations, social insurance and other basic rights and interests of labourers, the Opinion of the Central Committee of the Communist Party of China and the State Council on Building Harmonious Labour Relationships (中共中央國務院關於構建和諧勞動關係的意見) was issued on 21 March 2015, which acts as a guideline on PRC labour legislation.

Furthermore, if there is a shortage of labour or for any reason the labour cost in the PRC rises significantly, the costs of production of the Group’s products are likely to increase. This may in turn affect the selling prices of the products and services, which may then affect the demand for such products and services and thereby adversely affect the Group’s sales and financial condition. In addition, inflation in the PRC has increased in recent years. Inflation in the PRC increases the costs of labour and the costs of raw materials the Group must purchase for production. Rising labour costs may increase the Group’s operating costs and partially erode the cost advantage of the Group’s PRC-based operations and therefore negatively impact the Group’s profitability.

RISKS RELATING TO THE BONDS The interpretation of the NDRC Circular may involve significant uncertainty, which may adversely affect the enforceability and/or effective performance of the New Bonds. Any failure to complete the relevant filings and/registration under the NDRC Circular and with SAFE within the prescribed time frames may have adverse consequences for the Issuer and/or the investors of the New Bonds.

The NDRC issued the NDRC Circular on 14 September 2015, which came into effect on the same day. According to the NDRC Circular, domestic enterprises and their overseas controlled entities shall procure the registration of any debt securities or medium- to long-term loans with a term over one year issued or incurred outside the PRC with the NDRC prior to the issue of the securities or drawings under the loans, and notify the particulars of the relevant issues or drawings within ten PRC working days after the completion of the relevant issue or drawing. The Issuer has registered the issuance of the Bonds with the NDRC and obtained a certificate from the NDRC on 30 May 2019 with an extension on 21 May 2020 evidencing such registration. The Issuer also undertakes to file or cause to be filed with the NDRC the requisite information and documents on the issuance of the New Bonds with the NDRC within 10 Registration Business Days (as defined in the Terms and Conditions) after the New Issue Date.

The interpretation of the NDRC Circular may involve significant uncertainty, which may adversely affect the enforceability and/or effective performance of the New Bonds. The NDRC Circular is silent on the legal consequences of non-compliance with the pre-issue and post-issue registration requirements. In the worst- case scenario, such non-compliance with the post- issue notification requirement under the NDRC Circular may result in it being unlawful for the Issuer to perform or comply with any of its obligations under the New Bonds and the New Bonds might be subject to enforcement as provided in Condition 9 (Events of Default) of the Conditions. In addition, the administration of the NDRC Circular may be subject to a certain degree of executive and policy discretion by the NDRC. There is also risk that the registration certificate with the NDRC may be revoked or amended in the future or that future changes in PRC laws and regulations may have a negative impact on the performance or validity and enforceability of the New Bonds in the PRC. Potential investors in the New Bonds are advised to exercise due caution when making their investment decisions.

Jiangsu Yueda Group Finance Co., Ltd. (江蘇悅達集團財務有限公司), as the sponsored enterprise of the Issuer, has filed

with the Jiangsu branch of SAFE pursuant to the Circular of the State Administration of Foreign Exchange on Issuing the Administrative Provisions on the Centralised Operation of Cross-border Funds of Multinational Companies (“Hui Fa [2019] No.7”) (國家外匯管理局關於印發《跨國公司跨境資金集中運營管理規定》的通知) and obtained a notice of record-filing (備案通知書) on 27 September 2019 and completed the foreign debt registration on 13 November 2019.

According to the Hui Fa [2019] No.7, multinational companies may, concentrate the foreign debt quota and/or overseas lending quota of domestic member enterprises, and carry out foreign debt borrowing business and/or overseas lending business on their own within the scale of the concentrated quota according to commercial practices. When the SAFE branch of the place where the sponsored enterprise is located issues a notice of record-filing to the sponsored enterprise, it will handle the one-off registration of foreign debts and/or overseas lending for the enterprise according to the consolidated quota which has been recorded, and the sponsoring enterprise will handle the registration of foreign debts and/or overseas lending on a case-by-case basis regardless of currency and creditor (or debtor).

The Bonds are unsecured obligations.

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

 the Issuer enters into bankruptcy, liquidation, reorganisation or other winding-up proceedings;

 there is a default in payment under the Issuer’s secured indebtedness or other unsecured indebtedness; or

 there is an acceleration of any of the Issuer’s indebtedness.

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

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

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

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

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

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

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

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

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

 be able to evaluate (either alone or with the help of a financial adviser) possible economic scenarios, such as interest

rate and other factors which may affect its investment and the ability to bear the applicable risks.

An active trading market for the New Bonds may not develop.

The Existing Bonds are listed and quoted on the SEHK. Application will be made to the SEHK for the listing of the New Bonds on the SEHK by way of debt issues to Professional Investors only. There can be no assurance that the Issuer will obtain or be able to maintain a listing of the New Bonds on the SEHK, or that, even if listed, a liquid trading market will develop. No assurance can be given as to the liquidity of, or the development and continuation of an active trading market for the New Bonds. If an active trading market does not develop or is not continued, the market price and liquidity of the New Bonds could be adversely affected. The liquidity of the Bonds will be adversely affected if the Bonds are held or allocated to limited investors. None of the Joint Lead Managers are obligated to make a market in the Bonds, and if the Joint Lead Managers do so, they may discontinue such market making activity at any time at their sole discretion. In addition, the New Bonds are being offered pursuant to exemptions from registration under the Securities Act and, as a result, the Bondholders will only be able to resell their New Bonds in transactions that have been registered under the Securities Act or in transactions not subject to or exempt from registration under the Securities Act.

The rating of the Bonds may be downgraded or withdrawn.

The New Bonds are expected to be assigned a rating of “BBBg-” by CCXAP. The rating represents only the opinions of the rating agency and its assessment of the ability of the Issuer to perform its obligations under the Bonds and its credit risks in determining the likelihood that payments will be made when due under the Bonds. A security rating is not a recommendation to buy, sell or hold the Bonds and may be subject to suspension, reduction or withdrawn at any time. There can be no assurance that the ratings assigned to any Bonds will remain in effect for any given period or that the ratings will not be lowered, suspended or withdrawn by the rating agency in the future if, in its judgement, the circumstances so warrant. The Issuer is not obligated to inform Bondholders of any such revision, downgrade or withdrawal. A suspension, reduction or withdrawal at any time of the rating assigned to the Bonds may materially and adversely affect the market price of the Bonds and the Issuer’s ability to access the debt capital markets.

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

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

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

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

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

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

could be adversely affected.

Changes in interest rates may have an adverse effect on the price of the Bonds.

The Bondholders may suffer unforeseen losses due to fluctuations in interest rates. Generally, a rise in interest rates may cause a fall in the prices of the Bonds, resulting in a capital loss for the Bondholders. However, the Bondholders may reinvest the interest payments at higher prevailing interest rates. Conversely, when interest rates fall, the prices of the Bonds may rise. The Bondholders may enjoy a capital gain but interest payments received may be reinvested at lower prevailing interest rates.

As the Bonds will carry a fixed interest rate, the trading price of the Bonds will consequently vary with the fluctuations in interest rates. If the Bondholders propose to sell their Bonds before their maturity, they may receive an offer lower than the amount they have invested.

The Issuer may be unable to redeem the Bonds.

Upon maturity, the Bonds will be redeemed at their principal amount, or following the occurrence of a Relevant Event (as defined in the Conditions), the Issuer may, at the option of any Bondholder, be required to redeem all, but not some only, of such Bondholder’s Bonds at 101 per cent. (in the case of a redemption for a Change of Control) or 100 per cent. (in the case of a redemption for a No Registration Event) of their principal amount, together with accrued interest to (but excluding) the date of redemption. See “Terms and Conditions of the Bonds – Redemption and Purchase”. On the Maturity Date or if such an event were to occur, the Issuer may not have sufficient cash in hand and may not be able to arrange financing to redeem the Bonds in time, or on acceptable terms, or at all. The ability to redeem the Bonds on the Maturity Date or in such event may also be limited by the terms of other debt instruments. The Issuer’s failure to redeem tendered Bonds could constitute an event of default under the Bonds, which may also constitute a default under the terms of the Issuer’s other indebtedness.

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

The Bonds will be structurally subordinated to any debt and other liabilities and commitments, including trade payables and lease obligations, of the Issuer’s existing and future subsidiaries, whether or not secured. The Bonds will not be guaranteed by any of the Issuer’s subsidiaries, and the Issuer may not have direct access to the assets of such subsidiaries unless these assets are transferred by dividend or otherwise to the Issuer. The ability of such subsidiaries to pay dividends or otherwise transfer assets to the Issuer is subject to various restrictions under applicable laws. The Issuer’s subsidiaries are separate legal entities that have no obligation to pay any amounts due under the Bonds or make any funds available therefore, whether by dividends, loans or other payments. The Issuer’s right to receive assets of any of the Issuer’s subsidiaries, respectively, upon that subsidiary’s liquidation or reorganisation will be effectively subordinated to the claim of that subsidiary’s creditors (except to the extent that the Issuer is creditor of that subsidiary). Consequently, the Bonds will be effectively subordinated to all liabilities, including trade payables and lease obligations, of any of the Issuer’s subsidiaries, other than the Issuer, and any subsidiaries that the Issuer may in the future acquire or establish.

The Bonds are the Issuer’s unsecured obligations and will (i) rank equally in right of payment with all the Issuer’s other present and future unsubordinated and unsecured indebtedness; (ii) be effectively subordinated to all of the Issuer’s present and future secured indebtedness to the extent of the value of the collateral securing such obligations; and (iii) be senior to all of the Issuer’s present and future subordinated obligations. As a result, claims of secured lenders, whether senior or junior, with respect to assets securing their loans will be prior with respect to those assets. In the event of the Issuer’s bankruptcy, insolvency, liquidation, reorganisation, dissolution or other winding up, or upon any acceleration of the Bonds, these assets will be available to pay obligations on the Bonds only after all other debt secured by these assets has been repaid in full. Any remaining assets will be available to the Bondholders rateably with all of the Issuer's other unsecured and unsubordinated creditors, including trade creditors. If there are not sufficient assets remaining to pay all these creditors, then all or a portion of the Bonds then outstanding would remain unpaid.

The Group’s ability to generate cash to service its indebtedness depends on many factors beyond its control.

The Group’s ability to make payments on and to refinance its indebtedness, including the Bonds, and to fund planned capital expenditures and project development will depend on its ability to generate cash. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond its control.

The Group’s business might not generate sufficient cash flow from operations to enable it to pay its indebtedness, including the Bonds, or to fund its other liquidity needs. The Group may need to refinance all or a portion of its indebtedness, including the Bonds, on or before maturity. The Group might not be able to refinance any of its indebtedness on commercially reasonable terms or at all. If the Group is unable to service its indebtedness or obtain refinancing on terms acceptable, the Group may be forced to adopt an alternative strategy that may include reducing or delaying capital expenditures, selling assets or seeking equity capital. These strategies may not be instituted on satisfactory terms, if at all.

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

The Issuer is incorporated under the laws of the PRC. Any bankruptcy proceeding relating to the Issuer would likely involve PRC bankruptcy laws, the procedural and substantive provisions of which may differ from comparable provisions of the local insolvency laws of jurisdictions with which the holders of the Bonds are familiar.

The Issuer’s subsidiaries, jointly controlled entities and associated companies may be subject to restrictions on the payment of dividends and the repayment of intercompany loans or advances to the Issuer, its jointly controlled entities and associated companies.

As a holding company, the Issuer will depend on the receipt of dividends and the interest and principal payments on intercompany loans or advances from its subsidiaries, jointly controlled entities and associated companies to satisfy its obligations under the Bonds. The ability of the Issuer’s subsidiaries, jointly controlled entities and associated companies to pay dividends and make payments on intercompany loans or advances to their shareholders is subject to, among other things, distributable earnings, cash flow conditions, restrictions contained in the articles of association of these companies, applicable laws and restrictions contained in the debt instruments of such companies. There can be no assurance that the Issuer’s subsidiaries, jointly controlled entities and associated companies will have distributable earnings or will be permitted to distribute their distributable earnings to it as it anticipates, or at all. In addition, dividends payable to it by these companies are limited by the percentage of its equity ownership in these companies. In particular, the Issuer does not maintain complete control over its jointly controlled entities or associates in which it might hold a minority interest. Further, if any of these companies raises capital by issuing equity securities to third parties, dividends declared and paid with respect to such shares would not be available to the Issuer to make payments under the Bonds. These factors could reduce the payments that the Issuer receives from its subsidiaries, jointly controlled entities and associated companies, which would restrict its ability to meet its payment obligations under the Bonds.

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

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

The Group may be able to amend certain commercial terms of the Bonds, including those relating to payment, with the consent of holders of not less than three-quarters in aggregate principal amount of the outstanding Bonds.

Under the terms of the Bonds, the Group may amend certain commercial terms of the Bonds with the consent of holders of not less than three-quarters in aggregate principal amount of the outstanding Bonds. These amendments include, among other things, changes in the maturity date of the Bonds, reductions in the principal amount of, or premium, if any or interest on the Bonds, and change of the currency of payments under the Bonds. If the Group obtain consent from holders of three- quarters or more in aggregate principal amount of the outstanding Bonds and make such amendments, they will be binding on all holders of the Bonds.

A change in English law which governs the Bonds may adversely affect holders of the Bonds.

The Terms and Conditions are governed by English law. No assurance can be given as to the impact of any possible judicial decision or change to English law or administrative practice after the date of issue of the Bonds.

Additional procedures may be required to be taken to bring English law governed matters or disputes to the Hong Kong courts and the holders of the Bonds would need to be subject to the exclusive jurisdiction of the Hong Kong courts. There is also no assurance that the PRC courts will recognise and enforce judgments of the Hong Kong courts in respect of English law governed matters or disputes.

The Terms and Conditions and the transaction documents are governed by English law, whereas parties to these documents have submitted to the exclusive jurisdiction of the Hong Kong courts. In order to hear English law governed matters or disputes, Hong Kong courts may require certain additional procedures to be taken. Under the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region Pursuant to Choice of Court Agreements between Parties Concerned (關於內地與香港特別行政區法院相互認可和執行當事人協議管轄的民商事案件判決的安排) (the “Choice of Court Arrangement”), judgments of Hong Kong courts are likely to be recognised and enforced by the PRC courts where the contracting parties to the transactions pertaining to such judgments have agreed to submit to the exclusive jurisdiction of Hong Kong courts.

However, recognition and enforcement of a Hong Kong court judgment could be refused if the PRC courts consider that the enforcement of such judgment is contrary to the social and public interest of the PRC or meets other circumstances specified by the Choice of Court Arrangement. On 18 January 2019, Hong Kong and the PRC entered into the Arrangement on Reciprocal Recognition and Enforcement of Judgements in Civil and Commercial Matters between the Courts of the Mainland and of the Hong Kong Special Administrative Region (關於內地與香港特別行政區法院相互認可和執行民商事案件判決的安排) (the “2019 Arrangement”), which seeks to establish a bilateral legal mechanism with greater clarity and certainty for recognition and enforcement of judgements in a wider range of civil and commercial matters between the courts of Hong Kong and the PRC. The 2019 Arrangement will be implemented by local legislation in Hong Kong and will take effect after both Hong Kong and the PRC have completed the necessary procedures to enable implementation and shall apply to judgements made by the courts of Hong Kong and the PRC on or after the date of the commencement of the 2019 Arrangement. Upon commencement of the 2019 Arrangement, the Choice of Court Arrangement shall be terminated, except for “choice of court” agreements in writing made between parties before the commencement of the 2019 Arrangement, in which case the Choice of Court Arrangement shall continue to apply. However, the recognition and enforcement of judgements rendered by a Hong Kong court in the PRC are subject to the provisions, limits, procedures and other terms and requirements of the 2019 Arrangement. There can be no assurance that investors can successfully effect service of process against the Issuer or its directors or senior management in the PRC and/or to seek recognition and enforcement for judgements rendered by a Hong Kong court in the PRC.

While it is expected that the PRC courts will recognise and enforce a judgment given by Hong Kong courts in respect of a dispute governed by English law, there can be no assurance that the PRC courts will do so for all such judgments as there is no established practice in this area. Compared to other similar debt securities issuances in the international capital markets where the relevant holders of the debt securities would not typically be required to submit to an exclusive jurisdiction, the holders of the Bonds will be deemed to have submitted to the exclusive jurisdiction of the Hong Kong courts, and thus the

holder’s ability to initiate a claim outside of Hong Kong will be limited.

The consolidated financial statements of the Issuer have been prepared and presented in accordance with PRC GAAP, which are different from IFRS in certain respects.

The consolidated financial statements of the Issuer included in this Offering Circular have been prepared and presented in accordance with PRC GAAP. PRC GAAP are substantially in line with IFRS, except for certain modifications which reflect the PRC’s unique circumstances and environment. For a summary of the differences, see “Summary of Certain Differences between PRC Accounting Standards and International Financial Reporting Standards”.

Each investor should consult its own professional advisers for an understanding of the differences between PRC GAAP and IFRS and/or between PRC GAAP and other generally accepted accounting principles, and how those differences might affect the financial information contained herein.

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

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

The Terms and Conditions also provide that the Trustee may (but is not obliged to), without the consent of the holders of the Bonds, agree to any modification of the Trust Deed, the Terms and Conditions and/or the Agency Agreement (other than in respect of a reserved matter) which in the opinion of the Trustee will not be materially prejudicial to the interests of the holders of the Bonds and to any modification of the Bonds, the Trust Deed or the Agency Agreement which is of a formal, minor or technical nature or is to correct a manifest error.

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

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

In certain circumstance (including without limitation the giving of notice pursuant to Condition 9 (Events of Default) of the Terms and Conditions and the taking of any actions and/or steps and/or the instituting of any proceedings pursuant to Condition 13 (Enforcement) of the Terms and Conditions), the Trustee may (in its sole discretion) request the Bondholders to provide an indemnity and/or security and/ or pre-funding to its satisfaction before it takes any action and/or steps and/or institutes proceedings on behalf of the Bondholders. The Trustee shall not be obliged to take any such actions and/or steps and/or institute proceedings if not indemnified and/or secured and/or pre-funding to its satisfaction. Negotiating and agreeing to an indemnity and/or security and/or pre-funding can be a lengthy process and may impact on when such actions or steps can be taken or when such proceedings can be instituted. The Trustee may not be able to take actions and/or steps and/or institute proceedings, notwithstanding the provision of an indemnity or security or pre-funding to it, in breach of the terms of the Trust Deed or the Terms and Conditions and in circumstances where there is uncertainty or dispute as to the applicable laws or regulations and, to the extent permitted by the agreements and the applicable law, it will be for the Bondholders to take such actions and/or steps and/or institute proceedings directly.

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

In relation to any Bond which has a principal amount consisting of a minimum specified denomination plus a higher integral

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

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

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

While the New Bonds are represented by the Global Certificate, the Issuer will discharge its payment obligations under the New Bonds by making payments to the common depositary for Euroclear and Clearstream for distribution to their account holders. A holder of a beneficial interest in a Global Certificate must rely on the procedures of the relevant Clearing System to receive payments under the New Bonds. The Issuer has no responsibility or liability for the records relating to, or payments made in respect of, beneficial interests in the Global Certificate.

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

Gains on the transfer of the Bonds may be subject to income tax under PRC tax laws.

Under the Enterprise Income Tax Law of the PRC (the “EIT Law”) which was last amended on 29 December 2018 and its implementation rules, any gains realised on the transfer of the Bonds by holders who are deemed under the EIT Law as non-resident enterprises may be subject to PRC enterprise income tax if such gains are regarded as income derived from sources within the PRC. Under the EIT Law, a “non- resident enterprise” means an enterprise established under the laws of a jurisdiction other than the PRC and whose actual administrative organisation is not in the PRC, which has established offices or premises in the PRC, or which has not established any offices or premises in the PRC but has obtained income derived from sources within the PRC. There remains uncertainty as to whether the gains realised on the transfer of the Bonds by enterprise holders would be treated as incomes derived from sources within the PRC and be subject to PRC enterprise income tax. In addition, under the Individual Income Tax Law of the PRC (中華人民共和國個人所得稅法) (the “IIT Law”) as last amended on 31 August 2018 and effective on 1 January 2019, and its implementation rules, any individual who has no domicile and does not live within the territory of the PRC or who has no domicile but has lived within the territory of China for less than 183 days in aggregate within a tax year shall pay individual income tax for any income obtained within the PRC. In addition, there is uncertainty as to whether gains realised on the transfer of the Bonds by individual holders who are not PRC citizens or residents will be subject to PRC individual income tax. If such gains are subject to PRC income tax, the ten per cent. enterprise income tax rate and 20 per cent. individual income tax rate will apply respectively unless there is an applicable tax treaty or arrangement that reduces or exempts such income tax. The taxable income will be the balance of the total income obtained from the transfer of the Bonds minus all costs and expenses that are permitted under PRC tax laws to be deducted from the income. According to the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (內地和香港特別行政區關於對所得避免雙重徵稅和防止偷漏稅的安排) (the “Arrangement”) which was promulgated on 21 August 2006 and became effective on 8 December 2006, Bondholders who are Hong Kong residents, including both enterprise holders and individual holders, will be exempted from

PRC income tax on capital gains derived from a sale or exchange of the Bonds if such capital gains are not connected with an office or establishment that the Bondholders have in the PRC and all the other relevant conditions are satisfied.

On 23 March 2016, the MOF and the State Administration of Taxation issued the Circular of Full Implementation of Replacing Business Tax with Value-Added Tax Reform (關於全面推開營業稅改徵增值稅試點的通知) (Caishui [2016] No. 36) (“Circular 36”), which introduced a new value added tax (“VAT”) from 1 May 2016. Under Circular 36, VAT is applicable where entities or individuals provide services within the PRC. The Issuer will be obligated to withhold VAT of 6 per cent. and certain surcharges (including a city maintenance and construction tax of 7 per cent., an educational surcharge of 3 per cent., a local educational surcharge of 2 per cent. and a local water conservation funds of 0.5 per cent.) on payments of interest and certain other amounts on the Bonds paid by the Issuer to Bondholders that are non-resident enterprises or individuals. VAT is unlikely to be applicable to any transfer of Bonds between entities or individuals located outside of the PRC and therefore unlikely to be applicable to gains realised upon such transfers of Bonds, but there is uncertainty as to the applicability of VAT if either the seller or buyer of Bonds is located inside the PRC. Circular 36 together with other laws and regulations pertaining to VAT are relatively new, the interpretation and enforcement of such laws and regulations involve uncertainties. If a Bondholder, being a non-resident enterprise or non-resident individual, is required to pay any PRC income tax on interest or gains on the transfer of the Bonds, the value of the relevant Bondholder’s investment in the Bonds may be materially and adversely affected.

The Issuer is a PRC resident enterprise for PRC tax purposes and certain withholding taxes will be applicable.

Under the EIT Law, as an enterprises established under PRC laws, the Issuer is a “resident enterprise” for PRC tax purposes. Pursuant to the EIT Law, the interest and other amounts may be regarded as being derived from sources within the PRC. As such, the Issuer will be obligated to withhold PRC income tax of up to 7 per cent. on payments of interest and certain other amounts on the Bonds to the holders that are Hong Kong resident enterprises and meet the beneficial ownership qualification, or 10 per cent. on payments of interest and certain other amounts on the Bonds to other enterprise investors in the event that there are no tax treaties between the PRC and the taxing jurisdiction of such other holders which exempt or reduce the liability for withholding PRC enterprise income tax. In addition, if the Issuer fails to do so, it may be subject to fines and other penalties.

According to Circular 36, the entities and individuals providing the services within China shall be subject to VAT. The services are treated as being provided within China where either the service provider or the service recipient is located in China. The services subject to VAT include the provision of financial services such as the provision of loans. It is further clarified under Circular 36 that the “loans” refers to the activity of lending capital for another’s use and receiving the interest income thereon. Based on the definition of “loans” under Circular 36, the issuance of Bonds is likely to be treated as the Bondholders providing loans to the Issuer, which thus shall be regarded as financial services subject to VAT. Further, given that the Issuer is located in the PRC, the holders of the Bonds would be regarded as providing the financial services within China and consequently, the holders of the Bonds shall be subject to VAT at the rate of 6 per cent. when receiving the interest payments under the Bonds.

The Bonds are redeemable in the event of certain withholding taxes being applicable.

There can be no assurance as to whether or not payments on the Bonds may be made without withholding taxes or deductions applying from the issue date on account of any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within the PRC or any subdivision or authority therein or thereof having power to tax. Although pursuant to the Terms and Conditions the Issuer is required to gross up payments on account of any such withholding taxes or deductions, the Issuer also has the right to redeem the Bonds at any time in the event (i) it has or will become obliged to pay additional tax amounts on account of any existing or future withholding or deduction for any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within the PRC in excess of the rate which is applicable on 28 May 2020, or any political subdivision or any authority therein or thereof having power to tax as a result of any change in, or amendment to, the laws or regulations of the PRC or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations (including a holding by a court of competent

jurisdiction), which change or amendment becomes effective on or after 28 May 2020, and (ii) such obligation cannot be avoided by the Issuer taking reasonable measures available to it.

The Issuer may issue additional Bonds in the future.

The Issuer may from time to time, without the consent of the Bondholders and in accordance with the Trust Deed, create and issue further bonds having the same terms and conditions as the Bonds in all respects (or in all respects save for the issue date, the first payment of interest on them and the timing for complying with the Registration Conditions and making of the NDRC Post-issue Filing and the Foreign Debt Registration and the filing of the Bonds under the Cross Border Financing Circular) so that such further issue shall be consolidated and form a single series with the Bonds. See “Terms and Conditions of the Bonds – Further Issues”. There can be no assurance that such future issuance or capital raising activity will not adversely affect the market price of the Bonds. The issue of any such debt securities may also reduce the amount recoverable by investors in the Bonds upon the Issuer’s bankruptcy, winding-up or liquidation.

EXCHANGE RATES

The PBOC sets and publishes daily a base exchange rate with reference primarily to the supply and demand of Renminbi against a basket of currencies in the market during the prior day. The PBOC also takes into account other factors, such as the general conditions existing in the international foreign exchange markets. On 21 July 2005, the PRC Government introduced a managed floating exchange rate system to allow the value of the Renminbi to fluctuate within a regulated band based on market supply and demand and by reference to a basket of currencies. Effective on 21 May 2007 the PBOC enlarged the floating band for the trading prices in the inter-bank spot exchange market of Renminbi against the U.S. dollar to allow the Renminbi to fluctuate against the U.S. dollar by up to 0.5 per cent. above or below the central parity rate published by the PBOC. The floating band was further widened to 1.0 per cent. on 16 April 2012 and 2.0 per cent. on 14 March 2014. Following an announcement by the PBOC on 11 August 2015 that authorised market-makers are to provide central parity quotations to the China Foreign Exchange Trading Centre daily before the opening of the interbank foreign exchange market, the Renminbi depreciated significantly against the U.S. dollar through the remainder of 2015 and 2016 before rebounding in 2017. Following the gradual appreciation against U.S. dollar in 2017, Renminbi experienced a recent depreciation in value against U.S. dollar followed by a fluctuation in 2018 and early 2019. On 5 August 2019, the PBOC set the Renminbi’s daily reference rate to above RMB7 per U.S. dollar for the first time in over a decade amidst an uncertain trade and global economic climate. The PRC Government may from time to time make further adjustments to the exchange rate system in the future.

The following table sets forth information concerning exchange rates between the Renminbi and the U.S. dollar for the periods presented: Renminbi per U.S. Dollar Noon Buying Rate(1) Period Period end Average(2) High Low (RMB per U.S.$1.00) 2013 ...... 6.0537 6.1412 6.2438 6.0537 2014 ...... 6.2046 6.1704 6.2591 6.0402 2015 ...... 6.4778 6.2869 6.4896 6.1870 2016 ...... 6.9430 6.6549 6.9580 6.4480 2017 ...... 6.5063 6.7569 6.9575 6.4830 2018 ...... 6.8755 6.6090 6.9737 6.2649 2019 ...... 6.9618 6.9081 7.1786 6.6822 2020 ...... April ...... 7.0622 7.0708 7.0989 7.0341 May ...... 7.1348 7.1016 7.1681 7.0622 June ...... 7.0651 7.0816 7.1263 7.0575 July ...... 6.9744 7.0041 7.0703 6.9744 August ...... 6.8474 6.9270 6.9799 6.8474 September ...... 6.7896 6.8106 6.8474 6.7529 October ...... 6.6919 6.7254 6.7898 6.6503 November (through 20 November) ...... 6.5608 6.6090 6.6899 6.5556

Notes:

(1) Exchange rates between Renminbi and U.S. dollar represent the noon buying rates as set forth in the H.10 statistical release of the Federal Reserve Board. (2) Annual averages are calculated from month-end rate. Monthly averages are calculated using the average of the daily rates during the relevant period.

USE OF PROCEEDS

The gross proceeds from this offering will be approximately U.S.$87.29 million. The Group intends to use the net proceeds from this offering, after deducting underwriting discounts, commissions and other estimated expenses payable in connection with the offering for onshore and offshore business development and refinancing of onshore indebtedness.

CAPITALISATION AND INDEBTEDNESS

The following table sets forth the Group’s consolidated capitalisation and indebtedness as at 31 December 2019 on an actual basis and on an adjusted basis after giving effect to the issuance of the Existing Bonds and the New Bonds prior to deducting the commissions and other estimated expenses payable in connection with this offering. The following table should be read in conjunction with the Issuer’s Audited Financial Statements and related notes included in this Offering Circular.

Actual As adjusted

RMB USD RMB USD

(in millions) (in millions) (in millions) (in millions) Current indebtedness: Short-term borrowings ...... 12,203.8 1,753.0 12,203.8 1,753.0 Notes payable ...... 8,737.3 1,255.0 8,737.3 1,255.0

Non-current liabilities due within one year 4,809.6 690.9 4,809.6 690.9 Total current indebtedness ...... 25,750.7 3,698.9 25,750.7 3,698.9 Non-current indebtedness: Long-term borrowings ...... 3,822.6 549.1 3,822.6 549.1 Bonds payable ...... 4,930.0 708.2 4,930.0 708.2 Existing Bonds issued ...... – – 1,392.4 200.0 New Bonds to be issued ...... – – 607.4 87.25 Total non-current indebtedness...... 8,752.6 1,257.2 10,752.4 1,544.6 Total indebtedness ...... 34,503.3 4,956.1 36,503.1 5,243.5 Total equity ...... 24,531.6 3,523.7 24,531.6 3,523.7 Total capitalisation ...... 59,034.9 8,479.8 61,034.7 8,767.2

After the completion of this offering, the Group may incur additional debt or borrowings, including Renminbi denominated borrowings or debt securities in China, in the ordinary course of business.

Since 31 December 2019, the Group repaid indebtedness in the amount of approximately RMB30,164 million and obtained borrowings in the amount of approximately RMB31,876 million.

Except as disclosed above, there has been no material adverse change in the Group’s consolidated capitalisation and indebtedness since 31 December 2019.

TERMS AND CONDITIONS OF THE BONDS

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

The U.S.$100,000,000 5.70 per cent. bonds due 2023 issued on 4 June 2020 (the “Original Issue Date”) (the “Original Bonds”), the U.S.$100,000,000 5.70 per cent. Bonds due 2023 issued on 13 October 2020 (the “October 2020 Issue Date”) (the “October 2020 Bonds”) and the U.S.$87,250,000 5.70 per cent. Bonds due 2023 issued on 7 December 2020 (the “New Issue Date”) (the “New Bonds” and, together with the Original Bonds and the October 2020 Bonds, the “Bonds”, which expression, unless the context requires otherwise, includes any further bonds issued pursuant to Condition 15 and to be consolidated and forming a single series therewith) of Jiangsu Yueda Group Co., Ltd (江蘇悅達集團有限公司) (the “Issuer”) are constituted by a trust deed dated 4 June 2020 (as supplemented by a supplemental trust deed dated 13 October 2020 and a second supplemental trust deed dated on or about 7 December 2020, and as otherwise amended and/or supplemented and/or replaced from time to time, the “Trust Deed”) made between the Issuer and China Construction Bank (Asia) Corporation Limited (中國建設銀行(亞洲)股份有限公司) (the “Trustee”, which expression shall include its successor(s)) and all persons for the time being trustee or trustees under the Trust Deed) as trustee for itself and the Bondholders (as defined below). The statements in these Conditions include summaries of, and are subject to, the detailed provisions of and definitions in the Trust Deed.

The issue of the Bonds was authorised by a resolution of the board of directors of the Issuer on 16 March 2019.

Copies of the Trust Deed and the agency agreement dated 4 June 2020 (as supplemented by a supplemental agency agreement dated 13 October 2020 and a second supplemental agency agreement dated on or about 7 December 2020, and as otherwise amended and/or supplemented and/or replaced from time to time, the “Agency Agreement”) made between the Issuer, the Trustee, China Construction Bank (Asia) Corporation Limited (中國建設銀行(亞洲)股份有限公司) as principal paying agent (the “Principal Paying Agent”, which expression shall include any successor thereof), as registrar (the “Registrar”, which expression shall include any successor thereof) and as transfer agent (the “Transfer Agent”, which expression shall include any successor thereof) and any other Agents appointed thereunder are available for inspection at all reasonable times during normal business hours (being between 9:00 a.m. (Hong Kong time) to 3:00 p.m. (Hong Kong time) from Monday to Friday (other than public holidays)) by the Bondholders at the principal office for the time being of the Trustee, being at the Original Issue Date at 20/F, CCB Tower, 3 Connaught Road Central, Central, Hong Kong and at the specified office of the Principal Paying Agent following prior written request and proof of holding and identity to the satisfaction of the Trustee or, as the case may be, the Principal Paying Agent. References herein to “Paying Agents” includes the Principal Paying Agent, and “Agents” means the Principal Paying Agent, the Registrar, the Transfer Agent and any other agent or agents appointed from time to time under the Agency Agreement with respect to the Bonds. The Bondholders are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and are deemed to have notice of those provisions of the Agency Agreement applicable to them.

All capitalised terms that are not defined in these terms and conditions (these “Conditions”) will have the meanings given to them in the Trust Deed.

1 FORM, SPECIFIED DENOMINATION AND TITLE

The Bonds are issued in the specified denomination of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof. The Bonds are represented by registered certificates (“Certificates”) and, save as provided in Condition 3(b), each Certificate shall represent the entire holding of Bonds by the same Holder (as defined below). The Bonds are offered only outside the United States in reliance on Regulation S under the United States Securities Act of 1933 and rules and regulation promulgated under such Act.

Title to the Bonds shall pass by transfer and registration in the Register as described in Condition 3. The Holder of any Bond shall (except as ordered by a court of competent jurisdiction or as otherwise required by law) be treated as its absolute owner for all purposes whether or not it is overdue and regardless of any notice of ownership,

trust or an interest in it, any writing on the Certificate (other than the endorsed form of transfer) representing it or the theft or loss of such Certificate and no person shall be liable for so treating the Holder.

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

Upon issue, the Bonds will be represented by one or more global certificates (the “Global Certificate”) registered in the name of a nominee of, and deposited with, a common depository for Euroclear Bank SA/NV (“Euroclear”) and Clearstream Banking S.A. (“Clearstream”). The Conditions are modified by certain provisions contained in the Global Certificate while any of the Bonds are represented by the Global Certificate. See “Summary of Provisions relating to the Bonds While in Global Form”.

2 STATUS

The Bonds constitute direct, unconditional, unsubordinated and (subject to Condition 4(a)) unsecured obligations of the Issuer and shall at all times rank pari passu and without any preference among themselves. The payment obligations of the Issuer under the Bonds shall, save for such exceptions as may be provided by applicable legislation and subject to Condition 4(a), at all times rank at least equally with all its other present and future unsecured and unsubordinated obligations.

3 TRANSFERS OF BONDS AND ISSUE OF CERTIFICATES

(a) Register

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

(b) Transfer

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

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

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

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

specified, unless such Holder requests otherwise and pays in advance to the relevant Transfer Agent or the Registrar (as the case may be) the costs of such other method of delivery and/or such insurance as it may specify. In this Condition 3(c), “business day” means a day, other than a Saturday, Sunday or public holiday, on which banks are generally open for business in the place of the specified office of the relevant Transfer Agent or the Registrar (as the case may be).

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

(d) Formalities Free of Charge

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

(e) Closed Periods

No Bondholder may require the transfer of a Bond to be registered (i) during the period of seven days ending on (but excluding) the due date for any payment of principal (or premium) in respect of that Bond; or (ii) during the period of seven days ending on (and including) any Record Date (as defined in Condition 7(a)); or (iii) after notice of redemption has been given pursuant to Condition 6(b); or (iv) after such Bond has been put for redemption pursuant to Condition 6(c).

(f) Regulations

All transfers of Bonds and entries on the Register will be made subject to the detailed regulations concerning transfer and registration of Bonds scheduled to the Agency Agreement. The regulations may be changed by the Issuer, with the prior written approval of the Registrar and the Trustee or by the Registrar, with the prior written approval of the Trustee. A copy of the current regulations will be mailed (free of charge to the Holders and at the Issuer’s expense) by the Registrar to any Holder who requests one in writing and provides proof of holding and identity to the satisfaction of the Registrar.

4 COVENANTS

(a) Negative Pledge

So long as any Bond remains outstanding (as defined in the Trust Deed), the Issuer will not, and the Issuer will ensure that none of its Subsidiaries (other than Listed Subsidiaries) will, create, or have outstanding, any mortgage, charge, lien, pledge or other security interest, upon the whole or any part of its present or future undertaking, assets or revenues (including any uncalled capital) to secure any Relevant Indebtedness or to secure any guarantee or indemnity in respect of any Relevant Indebtedness, without at the same time or prior thereto according to the Bonds the same security as is created or subsisting to secure any such Relevant Indebtedness, guarantee or indemnity or such other security as shall be approved by an Extraordinary Resolution (as defined in the Trust Deed) of the Bondholders.

(b) Notification to the NDRC

The Issuer undertakes that it will within 10 Registration Business Days after the Original Issue Date, the October 2020 Issue Date and New Issue Date, respectively, file or cause to be filed with the NDRC the requisite information and documents in accordance with the Circular on Promoting the Reform of the Administrative System on the Issuance by Enterprises of Foreign Debt Filings and Registrations (國家發展改革委關於推進企業發行外債備案登記制管理改革的通知(發改外資[2015]2044號)) issued by

the NDRC and effective 14 September 2015 and any implementation rules, reports, certificates, approvals or guidelines as issued by the NDRC from time to time (the “NDRC Post-issue Filing”).

The Issuer undertakes that it will (i) within 15 Registration Business Days after the Original Issue Date, the October 2020 Issue Date and the New Issue Date, respectively, register or cause to be registered with SAFE the Bonds pursuant to the Administrative Measures for Foreign Debt Registration and its operating guidelines, effective as of 13 May 2013 (the “Foreign Debt Registration”), (ii) use its best endeavours to complete the relevant Foreign Debt Registration and obtain a registration record from SAFE on or before the relevant Registration Deadline, (iii) if applicable, as soon as practicable, and in any case as soon as required or requested to do so by any relevant governmental authority, file or cause to be filed with SAFE the Bonds pursuant to the Circular of the People’s Bank of China on Implementing Overall Macro Prudential Management System for Nationwide Cross- border Financing (中國人民銀行關於在全國範圍內實施全口徑跨境融資宏觀審慎管理的通知 ) (the “Cross Border Financing Circular”) and (iv) comply with all applicable PRC laws and regulations in relation to the Bonds, including but not limited to the relevant Foreign Debt Registration and, if applicable, the Cross Border Financing Circular and any implementing measures promulgated thereunder from time to time.

(d) Notification of Completion of the NDRC Post-issue Filing and Foreign Debt Registration

The Issuer shall on or before the relevant Registration Deadline and within 10 Registration Business Days after the submission of the relevant NDRC Post-issue Filing and receipt of the registration form or filing evidence from SAFE (or any other document evidencing the completion of registration issued by SAFE), provide the Trustee in respect of the Original Bonds, the October 2020 Bonds or (as the case may be) the New Bonds, with (i) a certificate in English substantially in the form scheduled to the Trust Deed signed by an Authorised Signatory of the Issuer confirming (A) the completion of the relevant NDRC Post-issue Filing and the relevant Foreign Debt Registration and (B) no Change of Control Event, Event of Default or any event or circumstance which could, with the giving of notice, lapse of time, the issuing of a certificate and/or fulfilment of any other requirement provided for in Condition 9 become an Event of Default has occurred; and (ii) copies of the relevant documents evidencing the relevant NDRC Post-issue Filing (if any) and the relevant Foreign Debt Registration, each certified in English by an Authorised Signatory of the Issuer as a true and complete copy of the original (the items specified in (i) and (ii) together, the “Registration Documents”). In addition, the Issuer shall, within five Registration Business Days after the documents comprising the Registration Documents are delivered to the Trustee, give notice to the Bondholders (in accordance with Condition 16 and substantially in the form scheduled to the Trust Deed) confirming the completion of the relevant NDRC Post-issue Filing and the relevant Foreign Debt Registration.

The Trustee may rely conclusively on the Registration Documents and shall have no obligation to monitor or ensure the relevant Foreign Debt Registration with SAFE is completed as required by Condition 4(c) or the relevant NDRC Post-issue Filing is made as required by Condition 4(b) or to assist with either the relevant NDRC Post-issue Filing or the relevant Foreign Debt Registration or to verify the accuracy, validity and/or genuineness of any Registration Documents or to translate or procure the accuracy or completeness of any translation into English of any such certificate, confirmation or other document or to give notice to the Bondholders confirming the completion of the relevant NDRC Post-issue Filing and the relevant Foreign Debt Registration, and shall not be liable to Bondholders or any other person for not doing so.

(e) Financial Information

So long as any Bond remains outstanding (as defined in the Trust Deed) the Issuer will furnish the Trustee with (i) a Compliance Certificate (on which the Trustee may rely as to such compliance) and a copy of

the relevant Audited Financial Reports within 150 days of the end of each Relevant Period prepared in accordance with the Accounting Standards for Business Enterprises in China (“PRC GAAP”) (audited by a nationally or internationally recognised firm of independent accountants) of the Issuer and its subsidiaries (if any) and if such statements shall be in the Chinese language, together with an English translation of the same translated by (A) a nationally or internationally recognised firm of independent accountants or (B) a professional translation service provider and checked by a nationally recognised firm of independent accountants, together with a certificate in English signed by an Authorised Signatory of the Issuer certifying that such translation is complete and accurate; and (i) a copy of the Unaudited Financial Reports within 90 days of the end of each Relevant Period prepared on a basis consistent with the audited consolidated financial statements of the Issuer and its subsidiaries (if any) and if such statements shall be in the Chinese language, together with an English translation of the same and translated by (A) a nationally or internationally recognised firm of independent accountants or (B) a professional translation service provider and checked by a nationally or internationally recognised firm of independent accountants, together with a certificate in English signed by an Authorised Signatory of the Issuer certifying that such translation is complete and accurate.

(f) Definitions:

In these Conditions:

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

“Authorised Signatory” has the meaning set out in the Trust Deed;

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

(i) no Event of Default (as defined in Condition 9) or Potential Event of Default had occurred since the Certification Date of the last such certificate or (if none) the date of the Trust Deed or, if such an event had occurred, giving details of it; and

(ii) the Issuer has complied with all its obligations under the Trust Deed and the Bonds or, in the event of non-compliance, giving details of it;

“Listed Subsidiary” means, at any time, any Subsidiary of the Issuer the ordinary voting shares of which are at such time listed on The Stock Exchange of Hong Kong Limited or any other stock exchange, exchange or securities market located in the PRC on which the shares of the relevant Subsidiary are listed, quoted or admitted for trading;

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

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

“Potential Event of Default” means any event or circumstance which could, with the giving of notice, lapse of time, the issuing of a certificate and/or fulfilment of any other requirement provided for in Condition 9, become an Event of Default;

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

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

“Registration Deadline” means, in respect of the Original Bonds, the October 2020 Bonds or (as the case may be) the New Bonds, the day falling 90 Registration Business Days after the Original Issue Date, the October 2020 Issue Date or New Issue Date;

“Relevant Indebtedness” means any indebtedness outside the PRC which is in the form of, or represented or evidenced by, bonds, notes, debentures, loan stock or other securities which for the time being are, or are intended to be or capable of being, quoted, listed or dealt in or traded on any stock exchange or over-the- counter or other securities market (which, for the avoidance of doubt, does not include bi-lateral loans, syndicated loans or club loans);

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

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

“Subsidiary” means, with respect to any person, any corporation, association or other business entity (i) of which more than 50 per cent. of the voting power of the outstanding Voting Stock is owned, directly or indirectly, by such person and one or more other Subsidiaries of such person; or (ii) any corporation, association and other business entity which at any time has its accounts consolidated with those of that person or which, under the laws, regulations or generally accepted accounting principles of the jurisdiction of incorporation of such person from time to time, should have its accounts consolidated with those of that person;

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

“Voting Stock” means, with respect to any person, capital stock of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such person.

5 INTEREST

(a) Interest Rate and Interest Payment Dates

The Bonds bear interest on their outstanding principal amount from and including 4 June 2020 (in the case of the Original Bonds and the October 2020 Bonds) or 4 December 2020 (in the case of the New Bonds) at the rate of 5.70 per cent. per annum, payable semi-annually in arrear in equal instalments of U.S.$28.50 per Calculation Amount (as defined below) on 4 June and 4 December in each year (each an “Interest Payment Date”), commencing on 4 December 2020 (in the case of the Original Bonds and the October 2020 Bonds) or 4 June 2021 (in the case of the New Bonds).

(b) Interest Period

In these Conditions, the period beginning on and including the Original Issue Date and ending on but excluding the first Interest Payment Date and each successive period beginning on and including an Interest Payment Date and ending on but excluding the next succeeding Interest Payment Date is called an “Interest Period”.

Interest in respect of any Bond shall be calculated per U.S.$1,000 in principal amount of the Bonds (the

“Calculation Amount”). The amount of interest payable per Calculation Amount for each Interest Period (and for any period less than a complete Interest Period) shall be equal to the product of the rate of interest specified above, the Calculation Amount and the relevant day-count fraction determined on the basis of a 360-day year consisting of 12 months of 30 days each and, in the case of an incomplete month, the number of days elapsed, rounding the resulting figure to the nearest cent (half a cent being rounded upwards).

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

6 REDEMPTION AND PURCHASE

(a) Final Redemption

Unless previously redeemed, or purchased and cancelled, the Bonds will be redeemed at their principal amount on 4 June 2023 (the “Maturity Date”). The Bonds may not be redeemed at the option of the Issuer other than in accordance with this Condition 6.

(b) Redemption for Taxation Reasons

The Bonds may be redeemed at the option of the Issuer in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days’ notice (a “Tax Redemption Notice”) to the Bondholders in accordance with Condition 16 (which shall be irrevocable) and in writing to the Trustee and the Principal Paying Agent, at their principal amount (together with any interest accrued to but excluding the date fixed for redemption) if (i) the Issuer satisfies the Trustee immediately prior to the giving of such notice that the Issuer has or will become obliged to pay Additional Tax Amounts as provided or referred to in Condition 8 as a result of any change in, or amendment to, the laws or regulations of the PRC or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of, or the stating of an official position with respect to, such laws or regulations (including but not limited to any decision by a court of competent jurisdiction), which change or amendment becomes effective on or after 28 May 2020 and (ii) such obligation cannot be avoided by the Issuer taking reasonable measures available to it, provided that no Tax Redemption Notice shall be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such Additional Tax Amounts were a payment in respect of the Bonds then due.

Prior to the giving of any Tax Redemption Notice pursuant to this Condition 6(b), the Issuer shall deliver to the Trustee (A) a certificate signed by any Authorised Signatory of the Issuer stating that the obligation referred to in (i) above of this Condition 6(b) cannot be avoided by the Issuer taking reasonable measures available to it, and (B) an opinion, in form and substance satisfactory to the Trustee, of independent tax or legal advisers of recognised standing to the effect that the Issuer has or will become obliged to pay such Additional Tax Amounts as a result of such change or amendments and opinion. The Trustee shall be entitled (but shall not be obliged) to accept and rely upon such certificate and opinion as sufficient evidence of the satisfaction of the conditions precedent set out in (i) and (ii) above of this Condition 6(b), in which event they shall be conclusive and binding on the Bondholders.

Following the occurrence of a Relevant Event, the Holder of any Bond will have the right (the “Relevant

Event Put Right”), at such Holder’s option, to require the Issuer to redeem all, but not some only, of such Holder’s Bonds on the Put Settlement Date (as defined below in this Condition 6(c)) at 101 per cent. (in the case of a redemption for a Change of Control Event) or 100 per cent. (in the case of a redemption for a No Registration Event) of their principal amount, together in each case with accrued interest up to but excluding the Put Settlement Date. To exercise such right, the Holder of the relevant Bond must deposit at the specified office of the Principal Paying Agent or any other Paying Agent a duly completed and signed notice of redemption, in the form scheduled to the Agency Agreement, obtainable from the specified office of any Paying Agent (a “Put Exercise Notice”), together with the Certificate evidencing the Bonds to be redeemed, by not later than 30 days following a Relevant Event, or, if later, 30 days following the date upon which notice thereof is given to Bondholders by the Issuer in accordance with Condition 16.

The “Put Settlement Date” shall be the fourteenth day or, if such day is not a Business Day (as defined in Condition 7(f)), the next following Business Day after the expiry of such period of 30 days as referred to above.

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

Not later than 14 days (in the case of a Change of Control Event) or five days (in the case of a No Registration Event) following the day on which the Issuer becomes aware of a Relevant Event, the Issuer shall procure that notice regarding such Relevant Event shall be delivered to the Trustee in writing and to the Holders (in accordance with Condition 6) stating:

(i) the Put Settlement Date;

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

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

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

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

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

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

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

For the purpose of these Conditions:

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

(i) The Municipal Government of Yancheng, and any other person directly or indirectly controlled by the Municipal Government of Yancheng ceases to directly or indirectly hold or own more than 75 per cent. of the issued share capital of the Issuer; or

or the successor entity;

(B) “Control” means (i) the ownership or control of more than 50 per cent. of the voting rights of the issued share capital of the relevant person or (ii) the right to appoint and/or remove all or the majority of the members of the relevant person’s board of directors or other governing body, whether obtained directly or indirectly, and whether obtained by ownership of share capital, the possession of voting rights, contract or otherwise; the term “Controlled” has meanings correlative to the foregoing;

(D) a “No Registration Event” occurs when, in respect of the Original Bonds, the October 2020 Bonds or (as the case may be) the New Bonds, the relevant Registration Conditions are not satisfied on or before the relevant Registration Deadline;

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

(F) “Registration Conditions” means the receipt by the Trustee of the Registration Documents relating to the relevant Foreign Debt Registration as set forth in Condition 4(d); and

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

(i) there is a No Registration Event; or

(ii) there is a Change of Control Event.

(d) Notice of Redemption

All Bonds in respect of which any notice of redemption is given under this Condition 6 shall be redeemed on the date, in such place and in such manner as specified in such notice in accordance with this Condition 6. If there is more than one notice of redemption given in respect of any Bond (which shall include any notice given by the Issuer pursuant to Condition 6(b) and any Put Exercise Notice given by a Bondholder pursuant to Condition 6(c)), the notice given first in time shall prevail and in the event of two notices being given on the same date, the first to be given shall prevail. Neither the Trustee nor any of the Agents shall be responsible for calculating or verifying any calculations of any amounts payable under any notice of redemption or Put Exercise Notice, and none of them shall be liable to Holders, the Issuer or any other person for not doing so.

So long as the Bonds are represented by the Global Certificate, a right of a Bondholder to redemption of the Bonds following the occurrence of a Relevant Event will be effected in accordance with the rules of the relevant clearing systems.

(e) Purchase

The Issuer or any of its Subsidiaries may at any time purchase Bonds in the open market or otherwise at any price. The Bonds so purchased, while held by or on behalf of the Issuer or any such Subsidiary, shall not entitle the Holder to vote at any meetings of the Holders and shall not be deemed to be outstanding for certain purposes, including without limitation for the purpose of calculating quorums at meetings of the Holders or for the purposes of Condition 9, Condition 12(a) and Condition 13.

(f) Cancellation

All Certificates representing Bonds purchased by or on behalf of the Issuer and its Subsidiaries shall be

surrendered for cancellation to the Registrar and, upon surrender thereof, all such Bonds shall be cancelled forthwith. Any Certificates so surrendered for cancellation may not be reissued or resold and the obligations of the Issuer in respect of any such Bonds shall be discharged.

7 PAYMENTS

(a) Method of Payment:

(i) Payments of principal and premium (if any) shall be made (subject to surrender of the relevant Certificates at the specified office of any Transfer Agent or of the Registrar if no further payment falls to be made in respect of the Bonds represented by such Certificates) in the manner provided in Condition 7(a)(ii) below.

(ii) Interest on each Bond shall be paid to the person shown on the Register at the close of business on the fifth Payment Business Day before the due date for payment thereof (the “Record Date”). Payments of interest on each Bond shall be made in U.S. dollars by wire transfer to the registered account of the holder of such Bond. In this Condition 7, the “registered account” of a Bondholder means the U.S. dollar account maintained by or on behalf of it with a bank, details of which appear on the Register on the Record Date.

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

So long as the Global Certificate is held on behalf of Euroclear and Clearstream or any other clearing system, each payment in respect of the Global Certificate will be made to the person shown as the holder in the Register at the close of business of the relevant clearing system on the Clearing System Business Day before the due date for such payments, where “Clearing System Business Day” means a weekday (Monday to Friday, inclusive) except 25 December and 1 January.

(b) Payments subject to Fiscal Laws: Payments will be subject in all cases to (i) any fiscal or other laws and regulations applicable thereto in the place of payment, but without prejudice to the provisions of Condition 8 and (ii) any withholding or deduction required pursuant to an agreement described in Section 1471(b) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) or otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any regulations or agreements thereunder, any official interpretations thereof, or (without prejudice to the provisions of Condition 8) any law implementing an intergovernmental approach thereto. No commission or expenses shall be charged to the Bondholders in respect of such payments.

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

(d) Appointment of Agents: The Principal Paying Agent, the Registrar and the Transfer Agent initially appointed by the Issuer and their respective specified offices are listed below. The Principal Paying Agent, the Registrar and the Transfer Agent act solely as agents of the Issuer and do not assume any obligation

or relationship of agency or trust for or with any Bondholder. The Issuer reserves the right at any time with the prior written approval of the Trustee to vary or terminate the appointment of the Principal Paying Agent, the Registrar, any Transfer Agent or any of the other Agents and to appoint additional or other Agents, provided that the Issuer shall at all times maintain (i) a Principal Paying Agent, (ii) a Registrar with a specified office outside the United Kingdom, (iii) a Transfer Agent and (iv) such other agents as may be required by any other stock exchange on which the Bonds may be listed.

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

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

(f) Non-Payment Business Days: If any date for payment in respect of any Bond is not a Payment Business Day, the Holder shall not be entitled to payment until the next following Payment Business Day nor to any interest or other sum in respect of such postponed payment. In this Condition 7, “Payment Business Day” means a day (other than a Saturday, a Sunday or a public holiday) on which banks and foreign exchange markets are generally open for business in New York City and the place in which the specified office of the Principal Paying Agent is located.

8 TAXATION

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

If the Issuer is required to make a deduction or withholding by or within the PRC in excess of the Applicable Rate, the Issuer shall pay such additional amounts (“Additional Tax Amounts”) as will result in receipt by the Bondholders of such amounts as would have been received by them had no such withholding or deduction been required, except that no Additional Tax Amounts shall be payable in respect of any Bond:

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

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

References in these Conditions to principal, premium and interest shall be deemed also to refer to any Additional Tax Amounts which may be payable under this Condition 8 or any undertaking or covenant given in addition thereto or in substitution therefor pursuant to the Trust Deed.

“Relevant Date” in respect of any Bond means the date on which payment in respect of it first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which payment in full of the amount outstanding is made or (if earlier) the date seven days after that on which notice is duly given to the

Bondholders that, upon further surrender of the Certificate representing such Bond being made in accordance with these Conditions, such payment will be made, provided that payment is in fact made upon such surrender.

Neither the Trustee nor any Agent shall be responsible for paying any tax, duty, assessments, government charges, withholding or other payment referred to in this Condition 8 or otherwise in connection with the Bonds or for determining whether such amounts are payable or the amount thereof, and none of them shall be responsible or liable for any failure by the Issuer, any Bondholder or any third party to pay such tax, duty, charges, withholding or other payment in any jurisdiction or to provide any notice or information that would permit, enable or facilitate the payment of any principal, premium (if any), interest or other amount under or in respect of the Bonds without deduction or withholding for or on account of any tax, duty, assessment, government charge, withholding or other payment imposed by or in any jurisdiction.

9 EVENTS OF DEFAULT

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

An “Event of Default” occurs if:

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

(b) Breach of Other Obligations: the Issuer does not perform or comply with any one or more of its other obligations under the Bonds, the Trust Deed (other than where such default gives rise to a right of redemption pursuant to Condition 6(c)), which default is incapable of remedy or, if such default is capable of remedy, such default is not remedied within 30 days after notice of such default shall have been given to the Issuer by the Trustee; or

(c) Cross-Default: (i) any other present or future indebtedness of the Issuer or any of its Subsidiaries for or in respect of moneys borrowed or raised becomes (or becomes capable of being declared) due and payable prior to its stated maturity by reason of any actual or potential default, event of default or the like (howsoever described), or (ii) any such indebtedness is not paid when due or, as the case may be, within any originally applicable grace period, or (iii) the Issuer or any of its Subsidiaries fails to pay when due any amount payable by it under any present or future guarantee for, or indemnity in respect of, any moneys borrowed or raised provided that the aggregate amount of the relevant indebtedness, guarantees and indemnities in respect of which one or more of the events mentioned above in this Condition 9(c) have occurred equals or exceeds U.S.$30,000,000 or its equivalent (on the basis of the middle spot rate for the relevant currency against the U.S. dollar as quoted by any leading bank on the day on which this Condition 9(c) operates); or

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

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

(f) Insolvency: the Issuer or any of the Principal Subsidiaries is (or is deemed by law or a court of competent

jurisdiction to be) insolvent or bankrupt, or unable to pay its debts as and when such debts fall due, stops, suspends or threatens to stop or suspend payment of all or a material part of its debts, proposes or makes a general assignment or an arrangement or composition with or for the benefit of the relevant creditors in respect of any of such debts or a moratorium is agreed or declared in respect of or affecting all or a material part of the debts of the Issuer or any of the Principal Subsidiaries; or

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

(h) Nationalisation: (i) any step is taken by any person acting under the authority of any national, regional or local government with a view to the seizure, compulsory acquisition, expropriation or nationalisation of all or a material part of the undertaking, assets and revenues of the Issuer or any of the Principal Subsidiaries or (ii) the Issuer or any of the Principal Subsidiaries is prevented by any such person from exercising normal control over all or a material part of its undertaking, assets and revenues; or

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

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

(k) Analogous Events: any event occurs which under the laws of any relevant jurisdiction has an analogous effect to any of the events referred to in 9(d) to 9(j) of this Conditions 9.

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

(A) whose total revenue or (in the case of a Subsidiary which itself has Subsidiaries) consolidated total revenue, as shown by its latest audited income statement are at least 10 per cent. of the consolidated total revenue as shown by the latest published audited consolidated income statement of the Issuer and its Subsidiaries including, for the avoidance of doubt, the Issuer and its consolidated Subsidiaries’ share of profits of Subsidiaries not consolidated and of jointly controlled entities and after adjustments for minority interests; or

(B) whose net profit or (in the case of a Subsidiary which itself has Subsidiaries) consolidated net profit, as shown by its latest audited income statement are at least 10 per cent. of the consolidated net profit as shown by the latest published audited consolidated income statement of the Issuer and its Subsidiaries including, for the avoidance of doubt, the Issuer and its consolidated Subsidiaries’ share of profits of Subsidiaries not consolidated and of jointly controlled entities and after adjustments for minority interests; or

(C) whose total assets or (in the case of a Subsidiary which itself has Subsidiaries) consolidated total assets, as shown by its latest audited balance sheet are at least 10 per cent. of the consolidated total assets of the Issuer and its Subsidiaries as shown by the latest published audited consolidated balance sheet of the Issuer and its Subsidiaries including, the investment of the Issuer in each Subsidiary whose accounts are not

consolidated with the consolidated audited accounts of the Issuer and after adjustment for minority interests; or

(D) to which is transferred the whole or substantially the whole of the assets of a Subsidiary which immediately prior to such transfer was a Principal Subsidiary, provided that (x) the Principal Subsidiary which so transfers its assets shall forthwith upon such transfer cease to be a Principal Subsidiary and the Subsidiary to which the assets are so transferred shall forthwith become a Principal Subsidiary and (y) on or after the date on which the first published audited accounts (consolidated, if appropriate) of the Issuer prepared as of a date later than such transfer are issued, whether such transferor Subsidiary or such transferee Subsidiary is or is not a Principal Subsidiary shall be determined on the basis of such accounts by virtue of the provisions of paragraphs (A), (B) or (C) above of this definition;

provided that, in relation to paragraphs (A), (B) and (C) above of this definition:

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

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

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

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

10 PRESCRIPTION

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

11 REPLACEMENT OF CERTIFICATES

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

12 MEETINGS OF HOLDERS, MODIFICATION, WAIVER, AUTHORISATION, DETERMINATION AND ENTITLEMENT OF TRUSTEE

(a) Meetings of Holders

The Trust Deed contains provisions for convening meetings of the Bondholders to consider any matter affecting their interests, including the sanctioning by Extraordinary Resolution of a modification of any of these Conditions or any of the provisions of the Trust Deed. Such a meeting may be convened by the Trustee or the Issuer and shall be convened by the Trustee upon request in writing from Bondholders holding not less than 10 per cent. in aggregate principal amount of the Bonds for the time being outstanding and subject to the Trustee being indemnified and/or secured and/or pre-funded to its satisfaction against all costs and expenses. The quorum for any meeting convened to consider an Extraordinary Resolution will be two or more persons holding or representing more than 50 per cent. in aggregate principal amount of the Bonds for the time being outstanding, or at any adjourned meeting two or more persons being or representing Bondholders whatever the principal amount of the Bonds held or represented unless the business of such meeting includes the modification or abrogation of certain of the provisions of these Conditions and certain of the provisions of the Trust Deed, including consideration of proposals, inter alia, (i) to modify the maturity date of the Bonds or the dates on which interest is payable in respect of the Bonds, (ii) to reduce or cancel the principal amount of, any premium payable on redemption of, or interest on, the Bonds, (iii) to change the currency of payment of the Bonds or (iv) to modify the provisions concerning the quorum required at any meeting of Bondholders or the majority required to pass an Extraordinary Resolution, in which case the necessary quorum for passing an Extraordinary Resolution will be two or more persons holding or representing not less than 75 per cent., or at any adjourned such meeting not less than 25 per cent., in aggregate principal amount of the Bonds for the time being outstanding. Any Extraordinary Resolution duly passed shall be binding on Bondholders, whether or not they were present at the meeting at which such resolution was passed.

The Trust Deed provides that a resolution (A) in writing signed by or on behalf of the Bondholders of not less than 90 per cent. in aggregate principal amount of the Bonds for the time being outstanding (a “Written Resolution”) or (B) passed by Electronic Consent (as defined in the Trust Deed) shall for all purposes be as valid and effective as an Extraordinary Resolution passed at a meeting of Bondholders duly convened and held. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Bondholders. A Written Resolution and/or Electronic Consent will be binding on all Bondholders whether or not they participated in such Written Resolution and/or Electronic Consent, as the case may be.

(b) Modification, Waiver, Authorisation and Determination

The Trustee may (but shall not be obliged to) agree, without the consent of the Bondholders, to (i) any modification (except as mentioned in the Trust Deed) of, or to the waiver or authorisation of any breach or proposed breach of, or any failure to comply with any of these Conditions or any of the provisions of the Trust Deed which in its opinion is not materially prejudicial to the interest of the Bondholders, or (ii) to any modification which, in its opinion, is of a formal, minor or technical nature or to correct a manifest error or to comply with any mandatory provision of applicable law. Any such modification, waiver or authorisation shall be binding on the Bondholders and, unless the Trustee agrees otherwise, such modification, waiver or authorisation shall be notified to the Bondholders by the Issuer as soon as practicable thereafter in accordance with Condition 16.

In connection with the performance and exercise of its functions, rights, powers and/or discretions (including but not limited to those referred to in this Condition 12), the Trustee shall have regard to the interests of the Bondholders as a class and shall not have regard to the interests of, or be responsible for,

the consequences of such exercise for individual Bondholders and the Trustee shall not be entitled to require on behalf of any Bondholder, nor shall any Bondholder be entitled to claim, from the Issuer or the Trustee any indemnification or payment in respect of any tax consequence of any such exercise upon individual Bondholders.

13 ENFORCEMENT

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

14 INDEMNIFICATION OF THE TRUSTEE

Under the Trust Deed, the Trustee is entitled to be indemnified, secured and/or pre-funded to its satisfaction and to be relieved from responsibility including without limitation provisions relieving it from taking proceedings to enforce payment or taking other actions unless first indemnified and/or secured and/or pre-funded to its satisfaction and to be paid its fees, costs, expenses, indemnity payments, and other amounts in priority to the claims of the Bondholders.

The Trustee and its affiliates are entitled, inter alia, (a) to enter into business transactions with the Issuer and/or any related entity (directly or indirectly) to the Issuer without accounting for any profit, (b) to act as trustee for the holders of any other securities issued or guaranteed by, or relating to, the Issuer and/or any entity relating to the Issuer, (c) to exercise and enforce its rights, comply with its obligations and perform its duties under or in relation to any such transactions or, as the case may be, any such trusteeship without regard to the interests of, or consequences for, the Bondholders, and (d) to retain and not be liable to account for any profit made or any other amount or benefit received thereby or in connection therewith.

The Trustee may rely conclusively and without liability to Bondholders on any report, information, confirmation or certificate from or any opinion or advice of any accountants, auditors, lawyers, valuers, auctioneers, surveyors, brokers, financial advisers, financial institution or any other expert, whether or not addressed to it and whether their liability in relation thereto is limited (by its terms or by any engagement letter relating thereto entered into by the Trustee or any other person or in any other manner) by reference to a monetary cap, methodology or otherwise. The Trustee may accept and shall be entitled conclusively to rely on any such report, information, confirmation, certificate, opinion or advice, in which case such report, information, confirmation, certificate, opinion or advice shall be binding on the Issuer and the Bondholders. The Trustee shall not be responsible or liable to the Issuer, the Bondholders or any other person for any loss occasioned by acting on or refraining from acting on any such report, information, confirmation, certificate, opinion or advice.

Whenever the Trustee is required or entitled by the terms of the Trust Deed, the Agency Agreement or these Conditions to exercise any discretion or power, take any action, make any decision or give any direction, the Trustee is entitled, prior to exercising any such discretion or power, taking any such action, making any such decision or giving any such direction, to seek directions from the Bondholders by way of Extraordinary Resolution or clarification of any directions, and the Trustee shall not be responsible or liable for any loss or liability incurred by the Issuer, the Bondholders or any other person as a result of any delay in it exercising such discretion or power, taking such action, making such decision or giving such direction as a result of seeking such direction or clarification from the Bondholders or in the event that no direction or clarification is given to the Trustee by the Bondholders.

None of the Trustee or any Agent shall be liable to any Bondholder, the Issuer or any other person for any action taken by the Trustee or such Agent in accordance with the instructions of the Bondholders. The Trustee shall be

entitled to rely conclusively on any direction, request or resolution of Bondholders given by Bondholders holding the requisite principal amount of Bonds outstanding or passed at a meeting of Bondholders convened and held in accordance with the Trust Deed.

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

None of the Trustee or any of the Agents shall have any obligation to monitor whether an Event of Default or a Potential Event of Default or a Relevant Event has occurred, and none of them shall be liable to the Bondholders or any other person for not doing so.

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

15 FURTHER ISSUES

The Issuer may from time to time without the consent of the Bondholders to create and issue further bonds having the same terms and conditions as the Bonds in all respects (or in all respects save for the issue date, the first payment of interest on them and the timing for complying with the Registration Conditions and making of the NDRC Post-issue Filing and the Foreign Debt Registration and the filing of the Bonds under the Cross Border Financing Circular) and so that the same shall be consolidated and form a single series with the outstanding Bonds. References in these Conditions to the Bonds include (unless the context requires otherwise) any further bonds issued pursuant to this Condition 15. Any such further bonds shall be constituted by a deed supplemental to the Trust Deed.

16 NOTICES

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

So long as the Bonds are represented by the Global Certificate and the Global Certificate is held on behalf of Euroclear or Clearstream or the Alternative Clearing System (as defined in the form of the Global Certificate), notices to the Bondholders shall be validly given by the delivery of the relevant notice to Euroclear or Clearstream or the Alternative Clearing System, for communication by it to entitled accountholders in substitution for notification as required by the Conditions.

17 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

No person shall have any right to enforce any term or condition of the Bonds under the Contracts (Rights of Third Parties) Act 1999 but this shall not affect any right or remedy which exists or is available apart from such Act and is without prejudice to the rights of the Bondholders as set out in Condition 13.

18 GOVERNING LAW AND JURISDICTION

(a) Governing Law

The Trust Deed, the Agency Agreement and the Bonds and any non-contractual obligations arising out

of or in connection with them are governed by, and shall be construed in accordance with, English law.

(b) Jurisdiction

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

The Issuer has irrevocably appointed in the Trust Deed an agent in Hong Kong to receive service of process in any Proceedings in Hong Kong based on any of the Bonds.

(d) Waiver of Immunity

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

SUMMARY OF PROVISIONS RELATING TO THE BONDS WHILE IN GLOBAL FORM

The Global Certificate for the New Bonds contains provisions which apply to the New Bonds while they are in global form, some of which modify the effect of the Terms and Conditions set out in this Offering Circular. The following is a summary of certain of those provisions. The New Bonds will be represented by a Global Certificate which will be registered in the name of a nominee of, and deposited with, a common depositary on behalf of Euroclear and Clearstream. Under the Global Certificate, the Issuer, for value received, will promise to pay the amount payable upon redemption under the Terms and Conditions represented by the Global Certificate to the Bondholders in such circumstances as the same may become payable in accordance with the Terms and Conditions of the Bonds. The Global Certificate will become exchangeable in whole, but not in part, for individual Certificates if (a) Euroclear or Clearstream is closed for business for a continuous period of 14 days (other than by reason of legal holidays) or announces an intention permanently to cease business or (b) any of the circumstances described in Condition 9 (Events of Default) occurs. Whenever the Global Certificate representing the New Bonds is to be exchanged for individual Certificates, such individual Certificates will be issued in an aggregate principal amount equal to the principal amount of the Global Certificate within five business days of the delivery, by or on behalf of the registered Holder of the Global Certificate, Euroclear and/or Clearstream, to the Registrar of such information as is required to complete and deliver such individual Certificates (including, without limitation, the names and addresses of the persons in whose names the individual Certificates are to be registered and the principal amount of each such person’s holding) against the surrender of the Global Certificate at the Specified Office of the Registrar. Such exchange will be effected in accordance with the provisions of the Agency Agreement and the regulations concerning the transfer and registration of New Bonds scheduled thereto and, in particular, shall be effected without charge to any Holder or the Trustee, but against such indemnity as the Registrar may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such exchange. In addition, the Global Certificate will contain provisions that modify the Terms and Conditions of the Bonds as they apply to the New Bonds evidenced by such Global Certificate. The following is a summary of certain of those provisions: Payments on business days: In the case of all payments made in respect of the Global Certificate, “business day” means any day which is a day on which dealings in foreign currencies may be carried on in New York City. Payment Record Date: Each payment in respect of the Global Certificate will be made to the person shown as the Holder in the Register at the close of business (in the relevant clearing system) on the Clearing System Business Day before the due date for such payment (the “Record Date”) where “Clearing System Business Day” means a weekday (Monday to Friday, inclusive) except 25 December and 1 January. Exercise of put option: In order to exercise the option contained in Condition 6(c) (Redemption for Relevant Events) the Holder of the Global Certificate must, within the period specified in the Terms and Conditions of the Bonds for the deposit of the relevant Bond Certificate and put notice, give written notice of such exercise to the Principal Paying Agent specifying the principal amount of New Bonds in respect of which such option is being exercised. Any such notice will be irrevocable and may not be withdrawn. Notices: Notwithstanding Condition 16 (Notices), so long as the Global Certificate is held on behalf of Euroclear, Clearstream or any other clearing system (an “Alternative Clearing System”), notices to Holders of New Bonds represented by the Global Certificate may be given by delivery of the relevant notice to Euroclear, Clearstream or (as the case may be) such Alternative Clearing System.

DESCRIPTION OF THE GROUP

Overview

In recent years, centred around the mission of “Cultivating the industries for Yancheng; Seeking the future for Yueda” (“ 為鹽城培產業,為悅達謀未來”), the Group has been focusing on automobile and intelligent manufacturing as its key areas of development, whilst also ensuring balanced and quality development of its diversified business segments. The collaboration with internationally reputable companies has further strengthened the Group’s market competitiveness and brand recognition. The successful transformation of the Group to a market-oriented, professional and internationalised modern enterprise has made great contributions to the development of Yancheng City and the revitalisation of northern Jiangsu Province, evidenced by the awards and recognitions won by the Group in the recent years.

investment business was RMB752.3 million, RMB855.4 million and RMB843.2 million, respectively, representing 4.1 per cent., 3.5 per cent. and 3.6 per cent. of the Group’s total operating income, respectively.

Key Milestones

Below sets forth the key milestones in the development of the Group:

1979 Mr. Hu Youlin founded Shanxi Coal Blending Group from Yancheng Area, Jiangsu Province (江蘇省鹽城地區駐山西調煤組), which was the origin of the Issuer.

1989 The Issuer’s predecessor, Yancheng Materials and Industrials Corporation ( 鹽城物資實業總公司) was established with the approval of the Planned Economy Committee of Yancheng City

1991 Yancheng Yueda Industrials Group Company (鹽城悅達實業集團) was established based off Yancheng Materials and Industrials Corporation.

1992 In May, Yancheng Yueda Industrials Group Company changed its name to Jiangsu Yueda Industrials Group Company (江蘇悅達實業集團).

The Group commenced its tractor manufacturing business after the merger of Yancheng Tractor Factory.

1994 On 3 January, Yueda Investment was listed on the Shanghai Stock Exchange and commenced trading.

The Group first entered the ranking of Top 500 Industrial Enterprise in China.

1996 The Group invested in the construction of National Highway 204 and commenced its infrastructure investment business.

The Group was named as one of the 512 key state-owned enterprises of China.

1998 In December, Jiangsu Yueda Industrials Group Company changed to the Issuer’s current name and transformed to a wholly-state-owned enterprise with a registered capital of RMB141.5 million.

The Group commenced its strategic collaboration with Carrefour S.A. and commenced its commercial retailing business.

2001 On 29 November, Yueda International Holdings was listed on the Hong Kong Stock Exchange and commenced trading.

2003 The Group entered Top 20 Key Size Enterprises in Jiangsu Province and Top 10 Taxpayers in Jiangsu Province for the first time.

2004 The Group ranked 17th amongst key scale enterprises in Jiangsu Province.

2005 The Group acquired interest in Shanxi Zhongyang Junshan Coal Co., Ltd. and Shaanxi No.2 Huangling Coal Mine Co., Ltd., and commenced its coal mining business.

The Group ranked 13th amongst key scale enterprises in Jiangsu Province.

2006 The Group acquired non-ferrous metal mines in different areas in Yunnan Province and commenced its non-ferrous metals mining business.

The Group ranked 147th in Top 500 Enterprises in China.

2007 In November, the Issuer’s registered capital increased to RMB326.9 million.

The Group ranked 163rd in Top 500 Enterprises in China.

2008 In August, the Issuer’s registered capital increased to RMB341.0 million.

The Group ranked 116th in Top 500 Enterprises in China.

2009 The Group ranked 6th amongst key scale enterprises in Jiangsu Province and 109th in Top 500 Enterprises in China.

2010 The Group ranked 8th amongst key scale enterprises in Jiangsu Province and 133rd in Top 500 Enterprises in China.

2011 In December, the Issuer categorised its RMB659.0 million capital reserve to registered capital, and its registered capital increased to RMB1.0 billion.

The Group ranked 6th amongst key scale enterprises in Jiangsu Province and 141st in Top 500 Enterprises in China.

2012 The Group ranked 5th amongst key scale enterprises in Jiangsu Province and 135th in Top 500 Enterprises in China.

2013 The Group ranked 6th amongst key scale enterprises in Jiangsu Province.

2015 The Group ranked 4th in key industrial enterprises in Jiangsu Province and 130th in Top 500 Enterprises in China.

2016 The Group ranked 4th in key industrial enterprises in Jiangsu Province and 145th in Top 500 Enterprises in China.

2018 The Group ranked 4th in key industrial enterprises in Jiangsu Province and 200th in Top 500 Enterprises in China.

2020 The Issuer’s registered capital increased to RMB5.0 billion in September 2020.

Honours and Awards

The Group has received numerous awards and honours for its achievements, including the following:

Year of Grant Award/Recognition Primary Awarding Authorities

2019 Ranked 128th in “Top 500 Valued Brands in World Brand Lab China”

2018 “Outstanding Contributions to Reform and Jiangsu Provincial Government Opening Up – Entity Award”

2017 “Pilot Enterprise of the Integration of Ministry of Industry and Information Information Technology and Industrialisation” Technology

“Provincial Outstanding Enterprise in Jiangsu Provincial Government Management in accordance with Law and Honest Operation”

“The Provincial Top 50 Real Estate Jiangsu Real Estate Association Development Enterprises and Property Management Enterprises for the year 2016”

2016 “Jiangsu Charity Award” Jiangsu Provincial Government

“Outstanding Cooperation Enterprise” Ministry of Trade, Industry and Energy of the Republic of Korea

Mr. Wang Lianchun, Chairman of the board of Ministry of Trade, Industry and Energy of directors of the Issuer, was awarded “1st the Republic of Korea Anniversary of Chine-South Korea Free Trade Agreement Grand Prize for Outstanding Cooperation”

Nomination for “China Charity Award” Ministry of Civil Affairs of the PRC

2020 Brand value of “Yueda” (“悅達”) rose to World Brand Lab approximately RMB50.8 billion as at year 2020, ranking 125th amongst the “Top 500 Valued Brands in China”

Competitive Strengths

The Group believes that its competitive strengths outlined below distinguish it from its competitors and are important to its success and future development:

Diversified business operations and specialised subsidiaries.

The Group is a leading conglomerate in Jiangsu Province with operations spanning through modern services, energy and mineral resources, industrial manufacturing and infrastructure investment, involving in automobile and intelligence manufacturing, energy, healthcare, supply chain services, expressway operations, real estate development and many more businesses. The Group conducts its diversified businesses through various specialised subsidiaries in both traditional and modern industries. The combination of diversity and specialisation at an appropriate level helps the Group in reducing its concentration risk while still upholding its core development strategies. Through its diversified operations, the Group endeavours to integrate its business operations, highlight its core advantages and focus on investments in booming industries, which further allows the Group to optimise its resource structure, increase its reserve, and achieve high quality investment and stable growth.

Leading strategic conglomerate in Yancheng City with strong government support.

The Group is the largest operating state-owned enterprise in Yancheng City in terms of total assets. As at 31 December 2019, the consolidated total assets of the Group were RMB69,603.6 million, which contributed to approximately 24.3 per cent. of Yancheng City’s total state-owned assets. For the year ended 31 December 2019, the Group’s tax payment contributed to 8.44 per cent. of tax income of Yancheng City. As a state-owned enterprise with paramount strategic importance to Yancheng Municipal Government, the Group receives both strong financial support and policy support from the government.

In terms of financial support, Yancheng City has established a standby cash reserve of RMB1.0 billion as a pre-emptive measure in response to potential periodic debt liquidity risks faced by eight local state-owned enterprises including the Issuer. The Yancheng Municipal Government also has a system named “Yiqiyin” (易企銀) which helps enterprises with reducing and preventing funding risks. Specifically to the Group, the Yancheng Municipal Government has injected RMB700.0 million capital, allocated land use rights covering a total area of 68,000 mu, subsidised its loss-making automobile business and provided extensive support for new business development of the Group.

In terms of policy support, the Group’s future development strategies are backed up by Yancheng City’s municipal development plans. The Group’s automobile related business is one of the pillar businesses placed with strategic emphasis

by Yancheng City and fits closely into the development of Sino-Korea industry park located in Yancheng City. In addition, the Group’s expansion into the healthcare industry and its further development in manufacturing business caters to the development plans and the thirteenth five-year plan of Yancheng City.

High quality assets provide stable revenue.

The Group holds various high-quality assets including mine reserves, expressways, real estate projects and shares in high performing companies which have generated stable revenue. For example, the Group’s Shaanxi No.2 Huangling Coal Mine Co., Ltd. has an annual coal production capacity of 8.0 million tonnes which generated RMB1.05 billion investment return for the Group for the year ended 31 December 2019. The Group’s toll collection rights of the Beijing – Shanghai Expressway (Jiangsu section) generates over RMB200.0 million for the Group each year. For the year ended 31 December 2019, the Group’s net profits from its investment in real estate projects amounted to RMB364.0 million. In addition, investments in Jiangsu Runyang Solar Technology Co., Ltd. and CATARC Yancheng Automotive Testing Ground also generated significant return for the Group.

International and domestic strategic collaborations with quality enterprises strengthen the Group’s competitiveness.

The Group has a long-standing successful history of strategic collaborations with both domestic and international enterprises in various industries, including textile manufacturing, automobile research and production, real estate development and energy and mineral resources, in strengthening its competitiveness in the respective industries.

As part of the Group’s international strategic collaborations, the Group established three joint ventures in relation to its automobile-related businesses and two joint ventures in relation to its textile manufacturing business. The cross-border joint ventures include Dongfeng Yueda Kia, a company focused on the design, development and manufacturing of passenger cars. The Group’s subsidiary Yueda Investment and Dongfeng Motor Corporation (東風汽車公司) each holds 25 per cent. equity interest in Dongfeng Yueda Kia and Kia Motors Corporation, the second-largest automobile manufacturer in the Republic of Korea, holds the remaining 50 per cent. equity interest. The Group has also established a joint venture with Hyundai Mobis to provide professional services in the Group’s 4S car dealerships and to manufacture hybrid automobiles. The other automobile business related joint venture was established with Aunde Group SE to manufacture decorative textile products for motor vehicles. Aunde Group SE is a leading enterprise in decorative textile manufacturing for motor vehicles, whose major clients include Mercedes, BMW, Chrysler, Volkswagen, Toyota and other world-renowned car manufacturers. The Group’s joint venture with Triumph International, a leading female underwear manufacture from Germany, is the largest manufacturing plant in Southeast Asia for an internationally recognised female underwear brand. The Group started its strategic collaboration with Carrefour S.A. in 1998, for the opening and operation of Carrefour supermarkets in the area.

The Group’s domestic strategic collaborations include multiple joint ventures in all of the Group’s main business segments except for infrastructure investment. For energy and mineral resources, the Group invested in various projects along with several partners in Shanxi Province and Gansu Province. In addition, the Group signed a strategic agreement with Vanke Group to establish a joint venture to carry out some of the Group’s real estate development projects. As at the date of this Offering Circular, there are three real estate projects under construction resulting from the joint venture. The Group is also the second-largest shareholder in New Cooperation Trade Chain Group Co., Ltd., a company established by All China Federation of Supply and Marketing Cooperatives in facilitating product flows between rural and urban areas in the PRC. Furthermore, the Group invested in the new energy project established between Human Horizons Technology Co., Ltd. and Dongfeng Yueda Kia.

Experienced management team with support from a dedicated team of staff.

The Group is led by a highly-experienced team of management professionals with a deep understanding of the economic and political environment and socio-economic policies adopted by the government. The senior management team has in-depth experience in key areas relating to the Group’s businesses, such as car manufacturing, as well as accounting, finance and political relations. The Group’s leadership has demonstrated market-leading execution ability across different industries and markets. Under their guidance, the Group has navigated through various market and business cycles,

regulatory reforms and industry developments over its long operating history. The Group’s management has leveraged such experience to develop prudent corporate governance and risk management measures to ensure the Group’s responsiveness and adaptability to risks. The Group believes that as a result of its leadership’s in-depth industry expertise, market knowledge and experience and strong ties to the government, supported by the dedicated team of staff, the Group enjoys a strong competitive position under the framework of socio-economic development strategies of Yancheng City, Jiangsu Province and the PRC.

Stringent internal control and prudent finance policies.

The Group has established stringent internal control system and prudent finance policies in creating sound financial governance within the Group. In order to strengthen the Group’s control over its subsidiaries, the Group established a framework with three major procedures. Firstly, senior management responsible for operations of subsidiaries and projects are engaged under the assignment management system and governed by internal assignment policies. Secondly, all resolutions proposed by subsidiaries require a pre-approval from the Group and internal approvals from the respective subsidiaries’ shareholders, board of directors and board of supervisors. Thirdly, the Group conducts performance reviews in accordance with the annual performance target assigned to each subsidiary at the beginning of each year, which directly affects salaries for the staff of the relevant subsidiaries.

The Group created a financial management system involving comprehensive budget management, chief financial officer assignment and independent accounting with centralised credit control for its subsidiaries. The Group establishes budgets for its subsidiaries and monitors their execution. In addition, each chief financial officer of the Group’s subsidiaries is assigned by the Group’s finance department with periodic reporting duties. Moreover, the Group controls its credit facilities and liabilities with a centralised process where inflow and outflow of funds of the Group are subject to stringent approval processes.

Business Strategies

Focusing on core business, enhancing core competitiveness through industrial restructuring.

Adhering to the “1+2+1” development strategy, the Group aims to further strengthen its business operations by focusing on its core automobile and intelligent manufacturing business, entering into energy and healthcare businesses, as well as developing supply chain services business.

In relation to automobile and intelligent manufacturing, the Group intends to strengthen its core “three vehicles” (Dongfeng Yueda Kia Motors, Human Horizons new energy vehicles, electric refuse collectors and logistic vehicles) businesses along with further development of its intelligent agricultural equipment, high technology textile production line and intelligent processing centre to build a high-end manufacturing business operation. Centred around Dongfeng Yueda Kia, the Group intends to increase brand recognition in both the domestic and the international market via model upgrades and quality improvements. It also plans to accelerate adoption of hydrogen battery vehicles by adopting cutting edge technology in the domestic market through Jiangsu New Energy Automobile Research and Development Centre and Yueda New Energy Automobile Research and Development Centre. The Group established a joint venture with Human Horizons Technology Co., Ltd. to upgrade the existing production line technology.

In the field of intelligent manufacturing, the Group aims to solidify its leading position in high-power tractors among agricultural equipment to reach both the domestic and international markets. The Group will also further its strategic reformation to become a premium fabric supplier and branded operator and build its high-end textile industry chain. The Group also strives to deepen its strategic collaborations in establishing itself as a modern automation manufacturing solution supplier.

In terms of energy and resources, the Group through Yueda New Industry aims to develop full integration of coal mining and electricity supply, and factor its new energy production based on its deepened strategic collaboration with Shaanxi Coal and Chemical Industry Group Co., Ltd.

In terms of the healthcare industry, the Group via Yueda Healthcare will focus on the expansion of its kidney dialysis centre expansion by introducing strategic investors and professional operation teams to capture growth opportunities in the industry. It aims to become the top listed brand with over hundred outlets through further collaboration with reputable domestic and international medical institutions. The Group also actively seeks to attract pharmaceutical companies to establish their bases in Yancheng City to complete the industry chain.

In terms of supply chain services, the Group intends to emphasis Yueda Capital’s strategic positioning in developing financial services and strengthen Yueda Parent Industrial Fund. Yueda Trading is assigned to further develop its trading business around other main businesses within the Group.

Developing new models of existing business, entering into new businesses.

The Group aims to achieve business growth through reforming its existing business model on the one hand and entering into new businesses on the other hand. For instance, the Group will cease any further investments in expressway construction projects and shift its focus to the maintenance and sound operation of the Group’s existing expressway projects and generate steady income therefrom.

In relation to its energy and mineral resources business, the Group intends to further promote the upstream and downstream integration of coal, non-ferrous metals and other similar businesses, and actively promote the research and development of low pollution, low consumption, deep processing and clean energy technologies, bringing new development opportunities for traditional industries.

The Group has also been exploring new models of its existing real estate development businesses. It intends to boost sales rate of its existing properties and utilisation rate of its land reserves. The Group will further expand its investment in development of city complexes, community services centres and new industrial parks and explore opportunities in tourism real estate projects, healthcare real estate projects and elderly care real estate projects. In addition, the Group plans to actively expand into the healthcare industry centred around its healthcare complexes projects and to strengthen its capabilities in physical examination services, beauty services and kidney dialysis services.

On the other hand, to strengthen internal support of the Group’s core manufacturing business, the Group will increase its investment in finance industry to expand its involvement in factoring, leasing, asset management and internet finance and in formulating a comprehensive layout in the industry.

Achieve sound liquidity positions through prudent financial management, relying on capital market activities and utilising innovative financing models.

The Group will continue to strengthen its financing and cash flow management to support sustainable business growth. The Group intends to continue to maintain a prudent policy on financing management to enhance the Group’s liquidity and financial strength through accessing diversified financing channels in the capital and credit markets. Along with obtaining development loans at competitive interest rates, the Group will continue to rely on the proceeds from its debt issuances in onshore and offshore capital markets, and in addition, endeavours to diversify its financing channels and optimising its financing structure.

The Group will continue to enhance its financing management, strive to increase rate of capital turnover, reduce financial costs, optimise debt structure, and diversify financing risks. The Group believes that sound financing management will provide a solid foundation for the its healthy and stable long-term development.

Maintain efficient and effective operations under an experienced management team.

The Group believes that its experienced management team has been a key factor in contributing to its success, especially in achieving a leading position in the industries in which the Group operates. The Group will continue to build a professional management team with well-qualified and experienced personnel, carry out regular training so as to enable

the Group to continue to improve the efficiency of its operations and achieve its strategic goals through the expertise, and continuity, of the Group’s management team.

Structure Chart

Below sets forth a simplified structure chart of the Group as at the date of this Offering Circular:

Yancheng Municipal Government

100% State-owned Assets Supervision and Administration Commission of Yancheng The Issuer Municipal Government(1)

% % % % % % % % % % 5 5 7 3 5 % % % %

0 0 0 0 0 7 9 9 1 8 2 1 0 3 . . . . . 0 0 0 0 0 3 5 6 8 5 9 9 0 5 1 1 1 1 1 7 8 6 8 8

) 2

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______Notes:

(1) Exercise management functions on behalf of the Yancheng Municipal Government. (2) As at the date of this Offering Circular, Yueda Da Sheng and Hunan Yueda Development are undergoing liquidation.

Recent Developments

2020 Third Quarter Financial Statements of the Issuer

The Issuer has published the Third Quarter Financial Information. The Third Quarter Financial Information is not included in and does not form a part of this Offering Circular.

As at 30 September 2020, the Group’s current assets, current liabilities and non-current liabilities increased, whereas its non-current assets decreased as compared to 31 December 2019. In particular, as at 30 September 2020, the Group’s short- term borrowings increased and its non-current liabilities due within one year and long-term borrowings decreased as compared to 31 December 2019. For the nine months ended 30 September 2020, the Group’s operating income and operating cost both decreased as compared to the same period in 2019, and the Group recorded a significant decrease in its net profit as compared to the same period in 2019, primarily due to the COVID-19 outbreak. In addition, for the nine months ended 30 September 2020, the Group recorded decreases in net cash flow from investing activities and net cash flow from operating as compared to the same period in 2019, while the Group’s net cash flow from financing activities increased as compared to the same period in 2019.

Quarter Financial Information should not be taken as an indication of the expected financial condition, results of operations and results of the Issuer or the Group for the full financial year ending 31 December 2020.

Outbreak of COVID-19

Description of the Group’s Businesses

The Group’s business operations comprise four principal business segments, namely (i) modern services; (ii) energy and mineral resources; (iii) industrial manufacturing; and (iv) infrastructure investment.

The following table sets out a breakdown of the Group’s total operating income by business segment for the years ended 31 December 2017, 2018 and 2019:

For the year ended 31 December

2017 2018 2019

(RMB in (RMB in (RMB in millions) % millions) % millions) %

Operating income by business segment Modern Services ...... 12,201.3 66.5 14,908.4 61.6 15,443.6 65.5 Energy and Mineral Resources ...... 3,975.8 21.7 6,773.9 28.0 5,694.5 24.1 Industrial Manufacturing ...... 1,410.6 7.7 1,669.7 6.9 1,608.9 6.8 Infrastructure Investment ...... 752.3 4.1 855.4 3.5 843.2 3.6 Total ...... 18,340.0 100.0 24,207.4 100.0 23,590.2 100.0

Modern Services

Modern services is the most significant business segment of the Group. Under this segment, the Group operates commercial retailing and trading, logistics, hotel operations, real estate development and other businesses including but not limited to asset management business and healthcare business. The operating income generated from this segment contributes a significant part to the Group’s total operating income. For the years ended 31 December 2017, 2018 and 2019, the operating income generated from the Group’s modern services business was RMB12,201.3 million, RMB14,908.4 million and RMB15,443.6 million, respectively, constituting approximately 66.5 per cent., 61.6 per cent. and 65.5 per cent. of the Group’s total operating income, respectively.

Commercial retailing and trading

The Group operates its commercial retailing and trading businesses through its subsidiaries, primarily including Yueda South and Yueda New Industrial.

The year 2017 witnessed the rise of the Group’s commercial trading business and the phasing out of its commercial retailing business. The Group’s commercial retailing and commercial trading businesses are exemplified by its collaboration with the reputable brands of Carrefour and Suning, respectively.

In 1998, the Group established a strategic collaboration for thirty years with Carrefour S.A., for which Yueda South and Carrefour China established a joint venture for the opening and operation of Carrefour supermarkets in the area. Under the collaboration arrangements, the Group is the sole partner of Carrefour Group in Jiangsu, Anhui, Henan, Shanxi, Hebei, Shandong, Jiangxi, Chongqing and certain areas of Sichuan. The Group assists Carrefour Group in conducting pre-opening market research, site selection and supply chain arrangements. Besides, Yueda South is responsible for obtaining relevant approvals from local government authorities and the day-to-day operations of the supermarkets, including but not limited to budgeting and employment.

On 9 November 2017, in line with the transformation and upgrade strategies of Carrefour China, the Issuer, Yueda South and Carrefour China entered into another agreement to give Carrefour China the operation rights of the supermarkets under the Group’s operation. As at 31 December 2017, the financial performance of these Carrefour supermarkets was no longer consolidated into the Group’s consolidated financial statements.

The de-consolidation of these businesses resulted in a decrease in the Group’s sales expenses and an increase in net profits of the Group’s commercial retailing and trading business. On the other hand, the influence of such de-consolidation on the Group’s operating income was mitigated by the Group’s booming commercial trading business since 2017.

The Group expanded its commercial trading business rapidly through collaborations with Suning, a leading e-commerce platform in China, and Nanjing Qingya Trading Co., Ltd. (“Qingya”), Samsung’s general agent in Jiangsu Province and Anhui Province. The Group acts as the sales and distribution agent for Suning in selling Suning-exclusive communication devices and is one of the key distributors of Suning’s communication devices. The Group’s co-operation with Qingya focuses primarily on the sales and distribution of Samsung, Lenovo and Asus brand laptops. Since 2018, the Group further expanded its commercial trading businesses through co-operation with telecommunication companies such as China National Postal and Telecommunications Appliances Corporation, Potevio Group Corporation, China Telecom E-surfing, China Telling Telecom Co., Ltd. and Shenzhen Aisidi Co., Ltd., as well as general and tier-one agents for popular brands including Apple, Huawei and Xiaomi. Leveraging on its competitive advantages in connection with sales channels, capital resources and skilled trading teams, the Group sells electronic products, mainly mobile phones and computers, with smaller margins but high sales volumes.

For the years ended 31 December 2017, 2018 and 2019, the Group’s operating income generated from commercial retailing and trading business was RMB5,565.5 million, RMB6,378.7 million and RMB4,735.6 million, respectively, representing 30.3 per cent., 26.4 per cent. and 20.1 per cent. of the Group’s total operating income, respectively.

Logistics

The Group conducts its logistic business through its subsidiary Yueda Logistics. The Group’s logistics business provides ancillary logistic services for the Group’s car dealership, car parts supply and other businesses. For the years ended 31 December 2017, 2018 and 2019, the operating income generated from the Group’s logistics business was RMB280.2 million, RMB200.4 million and RMB266.0 million, respectively, representing 1.5 per cent., 0.8 per cent. and 1.1 per cent. of the Group’s total operating income, respectively.

Hotel Operations

The Group’s hotel operations business commenced in 1992. It owns the four-star Yueda International Hotel in Yancheng City, which is also the first hotel in the city to be awarded a star rating. Due to aging of the hotel property and substantial depreciation of the hotel assets, the Group has been suffering losses from its hotel operations business in recent years. In 2018, the hotel undertook substantial renovation and upgraded its dining and accommodation services. For the years ended 31 December 2017, 2018 and 2019, the operating income generated from the Group’s hotel operations business was RMB52.4 million, RMB77.6 million and RMB80.0 million, respectively, representing 0.3 per cent., 0.3 per cent. and 0.3 per cent. of the Group’s total operating income, respectively.

Real Estate Development

The Group conducts its real estate development business through its subsidiaries Yueda Real Estate Group Co., Ltd. (“Yueda Real Estate”) and Yancheng Yueda Dongfang Real Estate Company Limited (“Dongfang Real Estate”). The Group’s real estate development business focuses on residential properties and commercial shopping outlets development. All the Group’s real estate projects are self-developed.

Yueda Real Estate has completed eight projects, including Yueda Flower Garden, Luyi Kaixuangong, Yueda International Mansion, Yueda Huangpu Hebin Building and Yueda 889 Square in Shanghai and Yueda City Gardens (West Garden and East Garden) and Yueda New Village in Yancheng City. Dongfang Real Estate has completed one project in Yancheng City, namely the Tianshan Shuian Villa.

For the years ended 31 December 2017, 2018 and 2019, the Group’s operating income generated from its real estate development business was RMB2,197.5 million, RMB1,747.7 million and RMB1,992.4 million, respectively, representing 12.0 per cent., 7.2 per cent. and 8.5 per cent. of the Group’s total operating income, respectively.

The table below sets out the Group’s completed real estate projects as at the date of this Offering Circular:

Year of Name GFA Location Land Use Completion

2 m Yueda Flower Garden (悅達花苑) ...... Information Not Changning District, Residential 2000 Available Shanghai Luyi Kaixuangong (路易凱旋宮)...... Information Not Changning District, Residential 2004 Available Shanghai Yueda International Mansion (悅達國際 555,76 Putuo District, Shanghai Commercial 2005 大廈) ...... Yueda Huangpu Hebin Building Information Not Huangpu District, Residential 2006 (悅達黃浦河濱大廈) ...... Available Shanghai Yueda 889 Square (悅達 889 廣場) ...... 1,022,475 Jingan District, Shanghai Commercial 1999

Yueda City Gardens West Garden 150,000 Tinghu District, Residential 2008 (悅達都市花園西園) ...... Yancheng City

Year of Name GFA Location Land Use Completion

2 m Yueda City Gardens East Garden 150,000 Tinghu District, Residential 2013 (悅達都市花園東園) ...... Yancheng City Yueda New Village (悅達新村) ...... 100,000 Tinghu District, Residential 2009 Yancheng City Yue Hai Ming Di (悅海名邸) ...... 105,700 Chongchuan District, Commercial 2017 Nantong City Xiangyu International Plaza (翔宇國際 150,000 Huaiyin District, Huai’an Residential 2016 廣場) ...... City

As at the date of this Offering Circular, the Group has eight real estate projects under construction in Nantong City, Xi’an City, Huai’an City and Yancheng City, with total investment of approximately RMB11.1 billion and an aggregate GFA of approximately 2.1 million square metres.

The table below sets out the Group’s real estate projects under construction as at the date of this Offering Circular:

Total Name GFA Location Land Use Investment RMB in m2 billions Xiang Xi Garden (香溪花園) ...... 185,545 Tinghu District, Residential 1.3 Yancheng City Yueda Automobile Square Phase One 330,360 Tinghu District, Commercial 0.9 and Phase Two (悅達汽車廣場一期及 Yancheng City 第二期) ...... Xi’an Yuemei International Complex (西 545,975 Changan District, Xi’an Commercial 2.6 安悅美國際)...... City Superior Bay (悅龍灣) ...... 636,637 Tinghu District, Residential 3.0 Yancheng City Tian Shan Shui An Villa (天山水岸別 82,055 Tinghu District, Residential 0.7 墅) ...... Yancheng City Jun Yue Mansion (君悅府) ...... 47,957 Development District, Residential Information Huai’an City not available

Yue Tang Bay (悅棠灣) ...... 225,822 Development District, Residential Information Dongtai City not available

Hui Wen Yuan (匯文苑) ...... 151,700 Tinghu District, Residential 0.7 Yancheng City

In addition, in May 2018, the Group and the Vanke Group entered into a strategic co-operation agreement, under which Yueda Real Estate and Shanghai Vanke Real Estate Co., Ltd. established a joint venture (the “Yueda-Vanke Joint Venture”).

As at the date of this Offering Circular, the Yueda-Vanke Joint Venture has three real estate projects under construction, as set out in the table below:

Total Name GFA Location Land Use Investment

RMB in 2 m billions Emerald Palace (翡翠雲台)...... 366,640 South City District, Residential 3.1 Yancheng City Emerald College (翡翠書院)...... 112,406 Tinghu District, Residential 0.6 Yancheng City and Commercial Emerald International (翡翠國際) ...... 287,841 Tinghu District, Residential 0.7 Yancheng City

Car Dealership and Car Parts Supply

The Group’s car dealership and car parts supply business is conducted through various affiliates and subsidiaries, amongst which is the Group’s key joint venture, Dongfeng Yueda Kia. Established on 12 September 1992 with a registered capital of U.S.$290 million, Dongfeng Yueda Kia is a company focused on the design, development and manufacturing of passenger cars. It also provides post-sale services and parts supplies for passenger cars. The Group’s subsidiary Yueda Investment and Dongfeng Motor Corporation (東風汽車公司) each holds 25 per cent. equity interest in Dongfeng Yueda Kia and Kia Motors Corporation, the second-largest automobile manufacturer in the Republic of Korea, holds the remaining 50 per cent. equity interest in Dongfeng Yueda Kia. The major products of Dongfeng Yueda Kia include Kia Cachet, KX Cross, the new generation Kia 2, Kia K3, Kia K5, Kia K5 Hybrid, Kia KX3, Kia KX5, Kia KX7, and the Kia Sportage series SUV.

The Group conducts its car dealership business through various affiliates and subsidiaries. As at 31 December 2019, the Group had 12 Kia official 4S dealer shops managed by Shanghai Yueda Zhixing Automobile Service Co., Ltd. and Jiangsu Yueda Automobile Sale and Service Co., Ltd. The Group obtained sales and distribution licences from Dongfeng Yueda Kia for its sales of Kia brand vehicles. The Group’s automobile sales targets both family passenger cars and corporate use passenger cars for government entities, business corporations and taxi companies. Besides, Yueda South also engages in the sales and distribution of parallel-imported vehicles.

For the years ended 31 December 2017, 2018 and 2019, the Group’s operating income generated from its car dealership business was RMB1,335.8 million, RMB1,904.1 million and RMB2,462.0 million, respectively, representing 7.3 per cent., 7.9 per cent. and 10.4 per cent. of the Group’s total operating income, respectively.

The Group conducts its car parts supply business through Yueda Auto Parts. Yueda Auto Parts mainly engages in car parts import and export, sales and distribution and freight transportation. Yueda Auto Parts is also the sole supplier for Dongfeng Yueda Kia 4S dealer shops who procures car parts from Dongfeng Yueda Kia and sells to the 4S dealers. The business of Yueda Auto Parts has been growing steadily with the growth of Dongfeng Yueda Kia.

For the years ended 31 December 2017, 2018 and 2019, the Group’s operating income generated from its car parts supply business was RMB1,396.5 million, RMB1,324.8 million and RMB1,222.4 million, respectively, representing 7.6 per cent., 5.5 per cent. and 5.2 per cent. of the Group’s total operating income, respectively.

Others

The Group’s other businesses under its modern services segment primarily includes asset management business and healthcare business. The Group conducts its asset management business primarily through its subsidiary, Yueda Capital.

Yueda Capital actively explores development opportunities under its “1 + N” development model, for which “1” is to make Yueda Capital the management and operation platform of the Group’s finance businesses, and “N” is to develop a variety of financial service products through its shareholding in other companies. Through over seven years of development under the “1 + N” development model, Yueda Capital has established four primary business segments, namely (i) debt financing; (ii) equity financing; (iii) wealth management; and (iv) supply chain management, providing services across financial leasing, factoring, venture capital, equity funds, asset management and supply chain management.

The Group operates its healthcare business primarily through Yueda Healthcare. The Group’s healthcare business is centred around dialysis service provider chains, and operates across the fields of specialist hospitals, high-end physical examinations services, healthcare and elderly care, fitness squares and healthcare real estate. As at the date of this Offering Circular, the Group has eight dialysis centres, with future expansions in plan. The Group has also obtained 15 different licences in the healthcare industry, with 32 more under application.

Besides Yueda Capital’s asset management businesses and Yueda Healthcare’s healthcare business, the Group also generates a minority part of its operating income from its steel materials, finance company and internet technology businesses, as well as its brand usage royalties.

For the years ended 31 December 2017, 2018 and 2019, the Group’s operating income generated from its other businesses under the modern services segment was RMB1,373.4 million, RMB3,275.2 million and RMB4,685.3 million, respectively, representing 7.5 per cent., 13.5 per cent. and 19.9 per cent. of the Group’s total operating income, respectively.

Energy and Mineral Resources

Energy and mineral resources is the business segment of the Group with the longest operating history. This segment comprises the mining and sales of coal and non-ferrous metals such as lead, zinc, gold and iron. For the years ended 31 December 2017, 2018 and 2019, the Group’s operating income generated from its energy and mineral resources business was RMB3,975.8 million, RMB6,773.9 million and RMB5,694.5 million, respectively, representing 21.7 per cent., 28.0 per cent. and 24.1 per cent. of the Group’s total operating income, respectively.

Coal

The Group’s coal related business comprises of coal mining and coal sales. The Group conducts its coal mining and sales business primarily through the Issuer, Yueda New Industrial, Yueda South and Yueda Capital.

Established as a coal mining and sales company, the Group’s coal mining and sales segment has developed significantly over the years and maintained a solid market position. With resource bases in Shanxi, Shaanxi and Inner Mongolia, transport and sales centres in Qinhuangdao, Tangshan, Tianjin, Qingdao and Shanghai, the Group has established its integrated service line from coal mining and procurement to different means of transportation to service its client bases of power plants and steel mills located in Shanghai, Jiangsu and Guangdong.

The Group adopted two different sales models for its major long term clients and other clients to cater for their different needs. For major long term buyers, the Group will form long term contracts where terms are renewed annually to fix the quantity, unit price, payment date and payment methods. For other clients, the Group offers a more flexible option to specify only the quantity in the contract and adopt market price of coal upon settlement.

The table below sets out the details of the Group’s coal mines as at the date of this Offering Circular:

Remaining Group’s Total Minable Minable Annual Name Shareholding Reserve Reserve Period Capacity (million (million (million (%) tonnes) tonnes) (years) tonnes) Inner Mongolia Ximeng Yueda Energy Co., Ltd. (內蒙古西蒙悅達能源有限公司) ...... 43.7 131.84 76.4 26.6 1.8

Remaining Group’s Total Minable Minable Annual Name Shareholding Reserve Reserve Period Capacity (million (million (million (%) tonnes) tonnes) (years) tonnes) Shaanxi No.2 Huangling Coal Mine Co., Ltd. (陝西黃陵二號煤礦有限公司) ...... 46.0 821.0 558.0 54.0 10.0

Shaanxi Zhongneng Coalfield Co., Ltd., Yuandatan Coal Mine (陝西中能煤田有限公司袁大灘煤礦) . 26.6 1,235.0 890.0 62.5 5.0 Ordos City Ba Inmonk Coal Co., Ltd. (鄂爾多斯市巴音孟克煤炭有限公司) ...... 80.0 40.0 20.7 5.0 0.6 Hengshan Tianyun Coal Mine Co. Ltd. (橫山縣天雲煤礦有限公司) ...... 41.0 7.3 7.3 6.5 0.6 Pingliang Tianyuan Coal Chemical Co., Ltd. (平凉天元煤電化有限公司) ...... 40.0 1,966.0 1,966.0 98.0 11.4

Shanxi Hancheng Mining Wang Feng Coal Mine Co., Ltd. (陝西韓城石業王峰煤礦有限公司)...... 40.0 1010.0 310.0 73.9 3.0 Yulin City Yueda Huatong Coal Industry Co., Ltd. (榆林市悅達華通煤業有限公司)...... 40.0 90.6 45.0 37.5 1.2 Shanxi Yueda Junshan Coal Industry Co., Ltd. (山西悅達軍山煤業有限公司) ...... 30.2 35.8 18.0 21.0 0.9

For the years ended 31 December 2017, 2018 and 2019, the Group sold approximately 7.8 million tonnes, 11.7 million tonnes and 11.3 million tonnes of coal, respectively, with an average price of RMB485.4 per tonne, RMB566.7 per tonne and RMB482.2 per tonne, respectively.

For the years ended 31 December 2017, 2018 and 2019, the Group’s operating income generated from its coal mining and sales business was RMB3,887.1 million, RMB6,721.6 million and RMB5,671.0 million, respectively, representing 21.2 per cent., 27.8 per cent. and 24.0 per cent. of the Group’s total operating income, respectively.

Non-Ferrous Metals

The Group started to engage in minor non-ferrous metals business in the course of its business structure transformation. In 2006, Yueda International Holdings acquired Baoshan Feilong Nonferrous Metals Co., Ltd. (“Baoshan Feilong”), Yaoan Feilong Mining Co., Ltd. (“Yaoan Feilong”) and Tengchong Ruitu Mining and Technology Company Limited (“Tengchong Ruitu”) in Yunnan Province. In 2010, it also acquired Tong Ling Guan Hua Mining Company Ltd. (“Tongling Guan Hua”).

Due to poor non-ferrous metal market conditions, starting from 2017, the Group started its disposal of entities including Yaoan Feilong and Tenchong Ruitu. In September 2018, Tong Ling Guan Hua was transferred to Yueda Hong Kong. In July 2019, the Yueda International Holdings made an announcement on the proposed disposal of 100 per cent. shareholding in Baoshan Feilong. As at the date of this Offering Circular, such disposal is still ongoing.

On the other hand, Yueda International Holdings started to focus on factoring and other businesses. In August 2018, Yueda (Shenzhen) Commercial Factoring Co., Ltd. was established.

The table below sets out the details of the Group’s non-ferrous metal mines as at the date of this Offering Circular:

Group’s (1) Name Shareholding Mining Licence Process Capacity

Baoshan Feilong ...... 100% 2017.10.23-2019.10.23 500 tonnes per day Tong Ling Guan Hua ...... 70% 2019.8.19-2021.8.19 1.5 – 2.0 million tonnes per year

Note:

(1) As at the date of this Offering Circular, the mining licences of both mines are under renewal. The Group has suspended operation of both mines due to poor performance of the non-ferrous metal market.

For the years ended 31 December 2017, 2018 and 2019, the Group’s production and sale of various types of non-ferrous metals are 4.0 thousand tonnes, 2.6 thousand tonnes and 1.4 thousand tonnes, respectively.

For the years ended 31 December 2017, 2018 and 2019, the Group’s operating income generated from its non-ferrous metals business was RMB88.7 million, RMB52.3 million and RMB23.4 million, respectively, representing 0.5 per cent., 0.2 per cent. and 0.1 per cent. of the Group’s total operating income, respectively. As at the date of this Offering Circular, the Group has suspended operation of both mines due to poor performance of the non-ferrous metal market.

Industrial Manufacturing

The Group’s industrial manufacturing business covers manufacturing of tractors and specialised vehicles, production of textiles and others. For the years ended 31 December 2017, 2018 and 2019, the operating income of the Group’s industrial manufacturing business was RMB1,410.6 million, RMB1,669.7 million and RMB1,608.9 million, respectively, representing 7.7 per cent., 6.9 per cent. and 6.8 per cent. of the Group’s total operating income, respectively.

Tractor Manufacturing

The Group began manufacturing tractors in 1959. It is one of the tractor manufacturers in the PRC that offers a full range of direct-link all-gear wheel-type tractors. The Group’s tractor manufacturing business is conducted primarily through its indirect subsidiary Jiangsu Yueda Yancheng Tractor Manufacturing Co., Ltd. (“Yueda Tractor”). As at the date of this Offering Circular, Yueda Tractor has 16 production lines with 380 machines to manufacture and examine tractors. It has an annual production capacity of 30,000 wheel-type tractors.

The Group has six main series of tractors with close to 100 products sold in more than 20 provinces in the PRC. In 1997, the Group was one of the first in the industry to receive ISO9001 quality certification and the Group has maintained its certification status ever since. In September and November 2006, the Group’s “Yellow Sea Golden Horse” wheel-type tractor was awarded the “National Renowned Brand” and “National Inspection-Free Product”, respectively. In 2009, the Group established a joint venture with India’s Mahindra Group, namely Mahindra Yueda (Yancheng) Tractor Co., Ltd., in which the Group owned 49 per cent. equity interest. In late August 2017, the Group acquired an additional 47.88 per cent. of Mahindra Yueda (Yancheng) Tractor Co., Ltd. and renamed it to Jiangsu Intelligence Agriculture Machinery Co., Ltd., focusing on the manufacturing of next generation intelligent agriculture equipment.

For the years ended 31 December 2017, 2018 and 2019, the Group produced 1,832 units, 6,497 units and 4,896 units of tractors and relevant parts, respectively.

For the years ended 31 December 2017, 2018 and 2019, the Group’s operating income from its tractor manufacturing business was RMB73.5 million, RMB255.5 million and RMB226.2 million, respectively, representing 0.4 per cent., 1.1 per cent. and 1.0 per cent. of the Group’s total operating income, respectively.

Textile Manufacturing

The Group entered the textile manufacturing business in 2003, benefiting from its access to the abundant cotton resources and low labour cost in Yancheng City and its marketing capabilities. It further expanded its product lines into high value- added products including home textile products and decorative textile products for motor vehicles. The Group’s textile production business is conducted primarily through Yueda Textile. Yueda Textile imported a full range of Swiss-made testing equipment from Uster Technologies and various other manufacturing equipment from Germany, Italy and Japan and other countries. As at the date of this Offering Circular, Yueda Textile has formed a production line with a production capacity of 200,000 spindles of yarn, which include an annual production of 85,000 spindles of tight spinning and vortex spinning yarns and 25,000 tonnes of 32-180 thread count pure cotton comb yarns, specially blended yarns and other yarns.

In addition, the Group established a joint venture with Aunde Group SE to manufacture decorative textile products for motor vehicles. Aunde Group SE is a leading enterprise in decorative textile manufacturing for motor vehicles, whose major clients include Mercedes, BMW, Chrysler, Volkswagen, Toyota and other world-renowned car manufacturers.

For the years ended 31 December 2017, 2018 and 2019, the Group exported 16.9 per cent., 16.8 per cent. and 20.5 per cent. of its total textile production to various countries and regions including the United States, Vietnam and Hong Kong.

For the years ended 31 December 2017, 2018 and 2019, the Group’s operating income from its textile manufacturing business was RMB1,034.5 million, RMB1,230.9 million and RMB1,228.1 million, respectively, representing 5.6 per cent., 5.1 per cent. and 5.2 per cent. of the Group’s total operating income, respectively.

Specialised Vehicles Manufacturing

The Group operate its specialised vehicle manufacturing business through its subsidiary Jiangsu Yueda Special Vehicle Co., Ltd (“Yueda Special Vehicle”). Yueda Special Vehicle invested RMB189.0 million to import the technology for manufacturing compression refuse collectors from Subaru Corporation (formerly known as Fuji Heavy Industries Ltd.). Yueda Special Vehicle has an annual production capacity of 1,500 units of compression refuse collectors. The compression refuse collectors produced by the Group are designed in accordance with the environment protection regulations and motor vehicle industry policies and regulation of the PRC and cater to the domestic needs.

For the years ended 31 December 2017, 2018 and 2019, the Group produced 585 units, 557 units and 571 units of compression refuse collectors, respectively.

For the years ended 31 December 2017, 2018 and 2019, the Group’s operating income from its specialised vehicles manufacturing business was RMB278.0 million, RMB134.0 million and RMB159.9 million, respectively, representing 1.5 per cent., 0.6 per cent. and 0.7 per cent. of the Group’s total operating income, respectively.

Infrastructure Investment

The Group, through controlling shareholding or equity investment, operates five expressways. The Group is responsible for daily maintenance of the expressways and benefits from toll collection. After the expiration of the relevant concession periods, the toll collection rights will be transferred back to the local governments.

The table below sets out the details of the Group’s expressways and toll stations as at the date of this Offering Circular:

Concession Commencement Concession Name Group’s Shareholding Date Expiration Date

Beijing – Shanghai Expressway (Jiangsu section) (京滬高速公路(江蘇段)) (260 kilometres) ...... 21% 14 December 2000 14 December 2030

Concession Commencement Concession Name Group’s Shareholding Date Expiration Date

Beijing – Shanghai Expressway (Yangzhou West Bypass) (京滬高速公路( 揚州西繞城公路)) (34.96 kilometres) ...... 21% 12 October 2004 11 October 2034 Xi’an – Tongchuan Expressway (西銅高速公路) (100.81 kilometres) ...... 70% 1 January 2001 27 June 2021 Xuzhou Tongda Expressway (徐州通達路) (55.066 kilometres) ...... 80% 21 September 1999 31 December 2020 including: Zhangji Toll Station (張集站 ( 徐淮公路銅山收費站)) ...... 80% 21 September 1999 31 December 2020 Sanbao Toll Station (三堡站(206 國道三堡收費站)) ...... 80% 21 September 1999 31 December 2020 100% Beijing – Datong Expressway (Shanxi (the Issuer indirectly holds section) (京大高速(山西段)) (58.848 70% shareholding of the kilometres) ...... expressway.) 1 October 2005 1 October 2025 Fenyang – Pingyao Expressway (Fenyang to Pingyao section) (汾平高速(汾陽至平遙段)) (41.7 kilometres) ...... 70% 30 October 2010 29 October 2040

The toll collection rights for Xuzhuang Toll Station (徐莊站(323 省道徐莊收費站)), Xuhan Toll Station ( 徐韓站(104 國道徐韓段收費站)), Zhengji Toll Station (鄭集站(322 省道鄭集收費站)), Dapeng Toll Station (大彭站(310 國道大彭收費站)) and Jiahe Toll station (夾河站(311 國道夾河收費站)) expired on 31 August 2020.

The table below sets out the details of the traffic volume of the expressways controlled by the Group for the years ended 31 December 2017, 2018 and 2019:

For the year ended 31 December

Name 2017 2018 2019

(thousand vehicles/day)

Xi’an – Tongchuan Expressway (西銅高速公路) ...... 50.9 50.8 54.0

Xuzhou Tongda Expressway (徐州通達路) ...... 22.1 21.6 21.0 Beijing – Datong Expressway (Shanxi section) (京大高速( 山西段)) ...... 22.4 25.1 24.4 Fenyang – Pingyao Expressway (Fenyang to Pingyao section) (汾平高速(汾陽至平遙段)) ...... 14.0 20.3 19.4

For the years ended 31 December 2017, 2018 and 2019, the Group’s operating income from its infrastructure investment business was RMB752.3 million, RMB855.4 million and RMB843.2 million, respectively, representing 4.1 per cent., 3.5 per cent. and 3.6 per cent. of the Group’s total operating income, respectively.

Competition

The Group faces different degrees of competition in its various business sectors.

For instance, the commercial retailing and trading industry is a competitive industry with low entry barriers. The market competition intensifies with development of the national economy and general living standard. Companies will need to work scale and brand recognition to win an edge in the competition.

The other industry with low entry barrier is the real estate industry. The real estate industry in the PRC is highly market- oriented and concentrated. Larger real estate entities have an advantage in project acquisition, financing, as well as project development and management.

Looking at the car dealership and car parts supply business, the rapid and stable development of the national economy leads to continuous increase in demand for automobiles, resulting in the rapid expansion of production capacity of market participants and the intensified competition in the industry. On the other hand, the worsening urban traffic conditions, the rising fuel prices and the restrictive automobile consumption policies also pose challenges to automobile manufactures.

In terms of the Group’s energy and mineral resources business, the coal industry in the PRC has been a decentralised industry and there is a certain degree of excessive competition. Dispersed market structure and excessive competition have restricted the development of the coal industry and become an important external obstacle to the development of industry participants.

Employees

As at 31 December 2019, the Group had approximately 49,846 employees.

Employees of the Group participate in various basic pension fund plans and social insurance plans in the PRC whereby the Group is required to make monthly contributions at defined rates as stipulated by the relevant regulations.

As at the date of this Offering Circular, the Group has not experienced any strikes, work stoppages, labour disputes or actions which would have a material adverse effect on its overall business, financial condition or results of operations.

Insurance

The Group maintains a number of insurance policies for each of its business segments consistent with market norms and practices and PRC regulations in China. The Group purchases and maintains a number of insurance policies for its employees relating to personal injuries resulting from accidents, disability, illness and policies covering medical expenses. The Group purchases insurance policies relating to employee liability, public liability, property, risks of engine damage and business interruption and automobile for its travel and tourism businesses. Consistent with the industry practice, the Group purchases policies relating to building construction all risks insurance, third-party liability insurance, construction materials and equipment insurance. As at the date of this Offering Circular, the Group also requires its contractors to purchase workers’ accident insurance and policies relating to machinery and equipment.

Intellectual Property

The Group’s general policy is to seek intellectual property protection for those inventions and improvements likely to be utilised in its business activities or to obtain a competitive advantage. The Group relies on a variety of patents, copyrights, trade secrets, trademarks and proprietary information to maintain and enhance its competitive position. The Group has a total of 26 patents and 151 trademarks registered in the PRC as at the date of this Offering Circular.

Environment Matters

The Group’s operations are subject to various environmental laws. Compliance with such laws has not had, and, to the Group’s knowledge, is not expected to have, a material adverse effect upon the Group’s capital expenditures, earnings or

competitive position. As at the date of this Offering Circular, to the best knowledge of the Group, there are no current litigation, arbitration, administrative proceedings or claims, whether pending or threatened, in relation to environment matter, which could have a material adverse effect on the financial condition or results of operations of the Group or which are otherwise material in the context of this offering.

Legal Proceedings and Compliance

As at the date of this Offering Circular, the Group has obtained and maintained all permits, licences and certificates which are material to its operations.

The Group may from time to time become involved in disputes in the ordinary course of business with its suppliers, contractors, government authorities, agencies and other third parties. Some of the Group’s subsidiaries, associate companies, directors or senior officers have, in the past, been involved in legal proceedings, including claims, investigations, litigation or arbitration.

Although the Group cannot predict the outcome of these proceedings, the Group does not expect any such proceedings, if determined adversely against these subsidiaries or affiliates, to have a material adverse effect on its overall business, financial condition or results of operations.

DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

Directors

The Board of Directors of the Issuer consists of ten members, of which one is chairman, one is deputy chairman, seven are executive directors and one is external director. The chairman and deputy chairman were appointed by Yancheng SASAC of Jiangsu Province.

The table below sets out the information relating to the Issuer’s directors:

Name Age Position

WANG, Lianchun (王連春) ...... 50 Chairman

QI, Guangya (祁廣亞) ...... 50 Deputy Chairman

YANG, Yuqing (楊玉晴) ...... 55 Director

XU, Zhaojun (徐兆軍) ...... 54 Director

WANG, Shengjie (王聖傑)...... 54 Director

XIE, Zisheng (解子勝) ...... 55 Director

ZENG, Wei (曾瑋) ...... 49 Director

TANG, Rujun (唐如軍) ...... 49 Director

MAO, Daoliang (毛道良)...... 58 Director XU, Jinrong (徐錦榮) ...... 65 External Director

The following contains certain biographical information of each of the Issuer’s directors as at the date of this Offering Circular:

Mr. Wang, Lianchun (王連春), was born in 1970. Currently, Mr. Wang serves as the secretary of the Party Committee and the chairman of the board of directors of the Issuer. Previously, Mr. Wang served as the deputy secretary of the Party Committee of Yifeng Town, Yancheng City, the deputy secretary and secretary of the Party Committee, and town chief of Louwang Town, Yandu County, the director of Department of Propaganda, the executive vice-mayor and a member of the Standing Committee of Dafeng City, the deputy secretary of the Party Committee, acting county chief and county chief of Funing County, the deputy secretary general of Yancheng City, the director of the Administrative Committee and deputy secretary of the Party Working Committee of Yancheng Economic Development Zone and Yancheng Economic and Technological Development Zone, and the secretary of the Party Working Committee of Yancheng Comprehensive Bonded Area. Mr. Wang was elected as a member of the Standing Committee of Yancheng City for six times, as a representative at People’s Congress of Jiangsu Province for 12 times and as a representative at the National People’s Congress for 13 times. Mr. Wang holds a master’s degree.

Mr. Qi, Guangya (祁廣亞), was born in 1969. Currently, Mr. Qi serves as the deputy chairman of the board of directors, deputy secretary of the Party Committee and president of the Issuer. Previously, Mr. Qi served as the deputy chief of finance department Yancheng Automobile Factory (鹽城汽車總廠), the chief of finance department and chief financial officer of Yancheng Tractor Factory (鹽城拖拉機廠), and deputy chief and chief of the finance department, deputy head accountant, head accountant and vice president of the Issuer. Mr. Qi is a senior accountant and certified public accountant and holds a master’s degree.

Mr. Yang, Yuqing (楊玉晴), was born in 1965. Currently, Mr. Yang serves as a director and the deputy secretary of the Party Committee of the Issuer, the deputy chairman of the board of directors and secretary of the Party Committee of Yueda

Investment and the secretary of the Party Committee and vice president of Dongfeng Yueda Kia. Previously, Mr. Yang served as the deputy head and head of the president’s office, the assistant president, a member of the Party Committee and vice president of the Issuer. Mr. Yang is a senior economist and engineer and holds a bachelor’s degree.

Mr. Xu, Zhaojun (徐兆軍), was born in 1965. Currently, Mr. Xu serves as a director, member of the Party Committee, executive vice president and general counsel of the Issuer. Previously, Mr. Xu served as the deputy section chief of the finance section, section chief of the industry and trade section and director of budget section of the Department of Finance of Yancheng City, the head of the Central Treasury Payment Centre of Yancheng City, and the deputy head and a member of the Party Committee of Yancheng SASAC. Mr. Xu is a senior accountant and holds a master’s degree.

Mr. Wang, Shengjie (王聖傑), was born in 1968. Currently, Mr. Wang serves as a director of the Issuer, a director and the president of Yueda Investment, the chairman of the board of directors of Jiangsu Yueda Intelligent Agricultural Equipment Co., Ltd. (江蘇悅達智能農業裝備有限公司) and the chairman of the board of directors of Jiangsu Yueda Special Vehicle Co., Ltd. (江蘇悅達專用車有限公司). Previously, Mr. Wang served as the deputy head of the human resources department and the head of industry department of the Issuer, the chairman of Shanxi Yueda Jingda Expressway Company Limited ( 山西悅達京大高速公路有限公司), the chairman, president and general secretary of the Party Branch of Jiangsu Yueda Home Textile Co., Ltd. (江蘇悅達家紡有限公司), the deputy general manager, general manager, vice chairman and chairman of Jiangsu Yueda Textiles Co., Ltd. (江蘇悅達紡織有限公司) and the vice president of Yueda Investment. Mr. Wang is a senior engineer and holds a master’s degree.

Mr. Xie, Zisheng (解子勝), was born in 1965. Currently, Mr. Xie serves as a director of the Issuer and the general manager and deputy secretary of the Party Committee of Yueda Investment. Previously, Mr. Xie served as the manager of the domestic trading department, the assistant head, deputy head and executive deputy head of Yancheng Tractor Factory (鹽城拖拉機廠), and the head of the management department and the deputy general manager of Dongfeng Yueda Kia. Mr. Xie is research-fellow senior engineer and holds a master’s degree.

Ms. Zeng, Wei (曾瑋), was born in 1971. Currently, Ms. Zeng serves as a director, the chief economist and the head of human resources department of the Issuer. Previously, Ms. Zeng served as the deputy manager of international trade department of Yancheng Tractor Factory (鹽城拖拉機廠), the director of the general office and party office of Yancheng Tractor Company (鹽城拖拉機公司), and the deputy head and head of the industry department of the Issuer. Ms. Zeng is a senior engineer and senior registered human resource management specialist and holds a master’s degree.

Mr. Tang, Rujun (唐如軍), was born in 1971. Currently, Mr. Tang serves as a director of the Issuer and the general manager, vice chairman and deputy secretary of the Party Committee of Yueda South. Previously, Mr. Tang served as an accountant and the deputy chief of the finance department of Yancheng Tractor Factory (鹽城市拖拉機廠), the director of the finance department of Langfang Tongda Highway Company (廊坊通達公路公司), the chief financial officer and head of the finance department of Yancheng Chemical Fibre Group (鹽城化纖集團), the deputy head of the finance department of Yueda Investment, the head of the audit department and deputy secretary of the discipline committee of the Issuer, the vice president of Yueda Investment, and the acting deputy county chief of Xiangshui County. Mr. Tang is a senior accountant, senior economist, senior auditor and certified public accountant, and holds a master’s degree.

Mr. Mao, Daoliang (毛道良), was born in 1962. Currently, Mr. Mao serves as a director of the Issuer, a member of and the deputy secretary of the Party Committee, the vice chairman of the board of directors and the general manager of Yueda Energy. Previously, Mr. Mao served as the deputy head and head of Yancheng Nanzhuang Coal Mine (鹽城市南莊煤礦), the deputy general manager of Xinguang Group (新光集團), the head and secretary of the Party Committee of Xuzhou Jiawang Coal Mine (徐州賈汪煤礦), the deputy general manager and deputy secretary of the Party Committee of Shaanxi Huangling No. 2 Coal Mine (陝西黃陵二號煤礦), the vice president, general manager and a member of the Party Committee of Yueda New Industrial Group. Mr. Mao is a senior engineer and holds a bachelor’s degree.

100

Mr. Xu, Jinrong (徐錦榮), was born in 1955. Currently, Mr. Xu serves as an external director of the Issuer and the president of Jiangsu Coastal Innovation Capital Management Company (江蘇沿海創新資本管理公司). Previously, Mr. Xu served as the clerk, deputy section chief and deputy director of the enterprise finance section of the Department of Finance of Yancheng City, the deputy secretary of the Party Committee and executive deputy mayor of Binhai County, the head of commerce division and industry and trade division of the Department of Finance of Jiangsu Province, the deputy general manager of Jiangsu State-owned Assets Management (holding) Company (江蘇國有資產經營(控股)公司), the chairman of board of directors and general manager of Jiangsu Hongtu Electronic Information Group (江蘇宏圖電子信息集團), and the chairman of the board of directors and secretary of the Party Committee of Jiangsu Hi-tech Investment Group (江蘇高科技投資集團). Mr. Xu is a senior accountant and holds a college degree.

Supervisors

The Board of Supervisors of the Issuer consists of five members, of which one is chairman, two are appointed supervisors and two are elected employee representative supervisors. The table below sets out the information relating to the Issuer’s supervisors:

Name Age Position

CHENG, Yougui (成友貴) ...... 49 Chairman

LU, Xinyun (陸新雲) ...... 57 Supervisor

JI, Li (計力) ...... 32 Supervisor

SUN, Jianqiang (孫建強) ...... 58 Supervisor (Representative of Employees)

ZHANG, Hualiang (張華良) ...... 51 Supervisor (Representative of Employees)

The following contains certain biographical information of each of the Issuer’s supervisors as at the date of this Offering Circular:

Mr. Cheng, Yougui (成友貴), was born in 1971. Currently, Mr. Cheng serves as the chairman of the board of supervisors of the Issuer and the chairman of the Yancheng No.1 Municipal Level Enterprises Supervising Committee (鹽城市政府第一市屬企業監事會). Previously, Mr. Cheng served as a clerk of the industry and trade department (enterprise division) of the Department of Finance of Yancheng City, the deputy director of the Department of Financial Enterprise of Yancheng City, and the director of the Asset Management Department and the Reform and Development Department of Yancheng SASAC. Mr. Cheng holds a master’s degree.

Mr. Lu, Xinyun (陸新雲), was born in 1963. Currently, Mr. Lu serves as a supervisor of the Issuer and a supervisor with the Yancheng No.3 Municipal Level Enterprises Supervising Committee (鹽城市政府第三市屬企業監事會 ). Previously, Mr. Lu served as the cashier, financial reviewer, general ledger recorder and deputy chief of the finance department of Yancheng Wujiaohua Company (鹽城市五交化總公司), the deputy general manager and director of Yancheng Yuema Group (Yancheng Food Company) (鹽城躍馬集團) (鹽城食品總公司), the deputy section chief of the finance section of the Department of Trade of Yancheng City, the director of the reform and development department of Yancheng Commerce and Trade Asset Management Co., Ltd. ( 鹽城市商貿資產經營管理公司), the head of Commerce, Trade, Revolution and Development Office of Yancheng City, and an officer of Yancheng SASAC. Mr. Lu is a senior accountant and holds a bachelor’s degree.

Ms. Ji, Li (計力), was born in 1988. Currently, Ms. Ji serves as a supervisor of the Issuer and a supervisor with the Yancheng No.1 Municipal Level Enterprises Supervising Committee (鹽城市政府第一市屬企業監事會). Previously, Ms. Ji served as a clerk at the general office and of the Reform and Development department of Yancheng SASAC. Ms. Ji is an accountant and holds a bachelor’s degree.

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Mr. Sun, Jianqiang (孫建強), was born in 1962. Currently, Mr. Sun serves as a supervisor, the deputy secretary of the discipline committee and the director of the supervision office of the Issuer. Previously, Mr. Sun served as the finance manager of Yancheng Yuetai Electronics Company (鹽城悅泰電子公司), the chief financial officer of Yancheng Municipal Government’s representative office in Haikou City, the director of the finance department, deputy general manager and chief financial officer of Yueda South, the chief financial officer of Xuzhou Tongda Road Company Limited (徐州通達公路有限公司), and an auditor and head of the finance department of the Issuer. Mr. Sun is an accountant and holds a college degree.

Mr. Zhang, Hualiang (張華良), was born 1969. Currently, Mr. Zhang serves as a supervisor, the deputy secretary of the discipline committee and the head of the audit department of the Issuer. Previously, Mr. Zhang served as an accountant and deputy chief of the finance and accounting department of Yancheng Guomeng Glinting Factory ( 鹽城市郭猛軋花廠), an accountant and auditor of the finance and audit department of the Supply and Sales Cooperative of Yandu County (鹽都縣供銷合作總社), an accountant appointed by Yandu County Government, the finance section head and chief accountant of Yancheng No.2 Cotton and Linen Company (鹽城市第二棉麻公司), the chief financial officer of Shanxi Yueda Jingda Expressway Company Limited (山西悅達京大高速公路有限公司), and the deputy director of the finance department and the acting deputy director of the audit department of the Issuer. Mr. Zhang is a senior accountant, senior auditor, registered international internal auditor and holds a master’s degree.

Senior Management

The Senior Management of the Issuer consists of twelve members, of which one is president, one is executive vice president, five are other vice presidents, one chief accountant, one chief economist, one secretary general of the board of directors, one chief engineer and one president assistant.

The table below sets forth certain information in respect of each of the Issuer’s Senior Management:

Name Age Position

QI, Guangya (祁廣亞) ...... 50 President

XU, Zhaojun (徐兆軍) ...... 54 Executive vice president

LIU, Xunlong (劉訓龍) ...... 54 Vice president

ZENG, Wei (曾瑋) ...... 49 Chief Economist

CHEN, Jianming (陳劍明) ...... 54 Vice president

FU, Guixing (符貴興) ...... 49 Vice president

WANG, Chenlan (王晨瀾) ...... 50 Vice president

GUO, Rudong (郭如東) ...... 52 Chief Accountant

WANG, Junfeng (王峻峰) ...... 52 Secretary General of Board of Directors

FENG, Kaiyin (馮開銀) ...... 50 Chief Engineer

The following contains certain biographical information of the Issuer’s Senior Management as at the date of this Offering Circular:

Mr. Qi, Guangya (祁廣亞) – See “– Directors”.

Mr. Xu, Zhaojun (徐兆軍) – See “– Directors”.

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Mr. Liu, Xunlong (劉訓龍) – See “– Directors”.

Mr. Zeng, Wei (曾瑋) – See “– Directors”.

Mr. Chen, Jianming (陳劍明), was born in 1966. Currently, Mr. Chen serves as a vice president of the Issuer. Previously, Mr. Chen served as the deputy head of the Transportation Department of Funing County, the deputy head of the Transportation Department of Yancheng City, the union head of Yancheng Haixing Investment Company (鹽城海興投資公司), and the general manager of Yueda Investment. Mr. Chen is a senior economist and holds a bachelor’s degree.

Mr. Fu, Guixing (符貴興), was born in 1971. Currently, Mr. Fu serves as a vice president of the Issuer. Previously, Mr. Fu served as the secretary of the Youth League of Jiangling Automobile Engine Factory (江鈴汽車集團發動機廠) and the deputy county chief of Funing County, Jiangsu Province. Mr. Fu is a senior economist and holds a doctorate degree in industrial economics.

Ms. Wang, Chenlan (王晨瀾), was born in 1970. Currently, Ms. Wang serves as a vice president of the Issuer. Previously, Ms. Wang served as the deputy department manager of Haiyue Grand Hotel (海悅大酒店), an employee of the administration department, an employee and the deputy head of the public relations department, the deputy head of the president office and the head of outbound communication department of the Issuer, and assistant president of Yueda Investment. Ms. Wang is a senior economist and political worker and holds a bachelor’s degree.

Mr. Guo, Rudong (郭如東), was born 1968. Currently, Mr. Guo serves as the chief accountant of the Issuer. Previously, Mr. Guo served as the general ledger clerk, the deputy head and head of the finance department of the Issuer. Mr. Guo is a senior accountant and holds a master’s degree

Mr. Wang, Junfeng (王峻峰), was born in 1968. Currently, Mr. Wang serves as the secretary general and office head of the board of directors of the Issuer. Previously, Mr. Wang served as the deputy head of Yancheng Resource Trading Centre (鹽城市物資貿易中心) and the secretary, deputy head and head of the Party Committee Office of the Issuer. Mr. Wang holds a bachelor’s degree.

Mr. Feng, Kaiyin (馮開銀), was born in 1970. Currently, Mr. Feng serves as the head of the general manager’s office and chief engineer of the Issuer. Previously, Mr. Feng served as the deputy town chief of Hehai Town, Sheyang County, a sales manager of Dongfeng Yueda Kia, the deputy head of secretariat of the board of directors, the deputy head of the Party Committee Office of the Issuer. Mr. Feng holds a master’s degree.

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SUMMARY OF CERTAIN DIFFERENCES BETWEEN PRC ACCOUNTING STANDARDS AND INTERNATIONAL FINANCIAL REPORTING STANDARDS

Summary of certain differences between PRC GAAP and IFRS

The Issuer’s Financial Statements, the English translations of which are included in this Offering Circular, have been prepared and presented in accordance with PRC GAAP.

PRC GAAP are substantially in line with IFRS, except for certain modifications which reflect the PRC’s unique circumstances and environment. The following is a general summary of certain differences between PRC GAAP and IFRS on recognition and presentation as applicable to the Group. The Group is responsible for preparing the summary below. Since the summary is not meant to be exhaustive, there is no assurance regarding the completeness of the financial information and related footnote disclosure between PRC GAAP and IFRS and no attempt has been made to quantify such differences. Had any such quantification or reconciliation been undertaken by the Group, other potentially significant accounting and disclosure differences may have been required that are not identified below. Additionally, no attempt has been made to identify possible future differences between PRC GAAP and IFRS as a result of prescribed changes in accounting standards. Regulatory bodies that promulgate PRC GAAP and IFRS have significant ongoing projects that could affect future comparisons or events that may occur in the future.

Accordingly, no assurance is provided that the following summary of differences between PRC GAAP and IFRS is complete. In making an investment decision, each investor must rely upon its own examination of the Group, the terms of the offering and other disclosure contained herein. Each investor should consult its own professional advisers for an understanding of the differences between PRC GAAP and IFRS and/or between PRC GAAP and other generally accepted accounting principles, and how those differences might affect the financial information contained herein.

Reversal of an impairment loss

Under PRC GAAP, once an impairment loss is recognised for a long term asset (including fixed assets, intangible assets and goodwill, etc.), it shall not be reversed in any subsequent period. Under IFRS, an impairment loss recognised in prior periods for an asset other than goodwill could be reversed if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised.

Related Party Disclosures

Under PRC GAAP, government-related entities are not treated as related parties. Under IFRS, government- related entities are still treated as related parties.

Fixed assets and intangible assets

Under PRC GAAP, only the cost model is allowed. Under IFRS, an entity can choose either the cost model or the revaluation model as its accounting policy.

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TAXATION

The following summary of certain PRC and Hong Kong tax consequences of the purchase, ownership and disposition of the Bonds is based upon applicable laws, regulations, rulings and decisions in effect as at the date of this Offering Circular, all of which are subject to change (possibly with retroactive effect). This discussion does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase, own or dispose of the Bonds and does not purport to deal with consequences applicable to all categories of investors, some of which may be subject to special rules. Neither these statements nor any other statements in this Offering Circular are to be regarded as advice on the tax position of any holder of the Bonds or any persons acquiring, selling or otherwise dealing in the Bonds or on any tax implications arising from the acquisition, sale or other dealings in respect of the Bonds. Persons considering the purchase of the Bonds should consult their own tax advisers concerning the possible tax consequences of buying, holding or selling any Bonds under the laws of their country of citizenship, residence or domicile.

PRC

The following summary accurately describes the principal PRC tax consequences of ownership of the Bonds by beneficial owners who, or which, are not residents of mainland China for PRC tax purposes. These beneficial owners are referred to as non-PRC Bondholders in this “Taxation-PRC” section. In considering whether to invest in the Bonds, investors should consult their individual tax advisers with regard to the application of PRC tax laws to their particular situations as well as any tax consequences arising under the laws of any other tax jurisdiction. Reference is made to PRC taxes from the taxable year beginning on or after 1 January 2008.

EIT

Pursuant to the EIT Law of the PRC and its implementation regulations, IIT Law and its implementation regulations, an income tax is imposed on payment of interest by way of withholding in respect of debt securities, issued by PRC enterprises to non-PRC Bondholders, including non-PRC resident enterprises and non-PRC resident individuals. The current rates of such income tax are 10 per cent. for non-PRC resident enterprises and 20 per cent. for non-PRC resident individuals.

Such income tax shall be withheld by the Issuer that is acting as the obligatory withholder and such PRC enterprise shall withhold the tax amount from each payment or payment due. To the extent that the PRC has entered into arrangements relating to the avoidance of double-taxation with any jurisdiction, such as Hong Kong, that allow a lower rate of withholding tax, such lower rate may apply to qualified non-PRC resident enterprise Bondholders. The tax so charged on interests paid on the Bonds to non- PRC Bondholders who, or which are residents of Hong Kong (including enterprise holders and individual holders) as defined in the Arrangement will be 7 per cent. of the gross amount of the interest pursuant to the Arrangement and relevant interpretation of the Arrangement formulated by the State Administration of Taxation of China. To enjoy this preferential tax rate of 7 per cent., the Issuer could apply, on behalf of the Bondholders, to the State Administration of Taxation of the PRC for the application of the tax rate of 7 per cent. in accordance with the Arrangement on the interest payable in respect of the Bonds.

VAT

On 23 March 2016, the Ministry of Finance and the State Administration of Taxation issued Circular 36, confirming that business tax will be completely replaced by VAT from 1 May 2016. With effect from 1 May 2016, income derived from the provision of financial services which previously was subject to business tax will be entirely replaced by, and subject to, VAT.

According to Circular 36, entities and individuals providing services within PRC will be subject to VAT. Services are treated as being provided within the PRC where either the service provider or the service recipient is located in the PRC. Services subject to VAT include financial services, such as the provision of loans. It is further clarified under Circular 36 that “loans” refers to the activity of lending capital for another’s use and receiving the interest income thereon.

It is not clear whether Circular 36 would be interpreted to deem the issuance of Bonds by the Issuer as the provision of loans, and therefore services, provided within the PRC, which therefore the provision of financial services that could be

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subject to VAT. Furthermore, there can be no assurance that the Issuer would not be treated as a “resident enterprise” under the Enterprise Income Tax Law. PRC tax authorities could take the view that holders of Bonds are providing loans within the PRC because the Issuer is treated as a PRC tax resident. In such an interpretation, the issuance of the Bonds could be regarded as the provision of financial services within the PRC that is subject to VAT.

Further, given that the Issuer is located in the PRC, the holders of the Bonds would be regarded as providing the financial services within China and consequently, the holders of the Bonds shall be subject to VAT at the rate of 6 per cent. when receiving the interest payments under the Bonds. In addition, the holders of the Bonds shall be subject to the local levies at approximately 12 per cent. of the VAT payment and consequently, the combined rate of VAT and local levies would be around 6.72 per cent. Given that the Issuer pays interest income to Bondholders who are located outside of the PRC, the Issuer, acting as the obligatory withholder in accordance with applicable law, shall withhold VAT and local levies from the payment of interest income to Bondholders who are located outside of the PRC.

Where a Bondholder who is an entity or individual located outside of the PRC resells the Bonds to an entity or individual located outside of the PRC and derives any gain, since neither the service provider nor the service recipient is located in the PRC, theoretically Circular 36 does not apply and the Issuer does not have the obligation to withhold the VAT or the local levies. However, there is uncertainty as to the applicability of VAT if either the seller or buyer of Bonds is located inside the PRC.

Hong Kong Withholding tax

No withholding tax in Hong Kong is payable on payments of principal or interest with respect to the Bonds or in respect of any capital arising from the sale of Bonds.

Profits tax

Hong Kong profits tax is chargeable on every person carrying on a trade, profession or business in Hong Kong in respect of profits arising in or derived from Hong Kong from such trade, profession or business (excluding profits arising from the sale of capital assets).

Under the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong) (the “Inland Revenue Ordinance”) as it is currently applied by the Inland Revenue Department, interest on the Bonds may be deemed to be profits arising in or derived from Hong Kong from a trade, profession or business carried in Hong Kong in the following circumstances:

(a) interest on the Bonds is received by or accrues to a financial institution (as defined in the Inland Revenue Ordinance) and arises through or from the carrying on by the financial institution of its business in Hong Kong; or

(b) interest on the Bonds is derived from Hong Kong and is received by or accrues to a corporation (other than a financial institution) carrying on a trade, profession or business in Hong Kong; or

(c) interest on the Bonds is derived from Hong Kong and is received by or accrues to a person (other than a corporation) carrying on a trade, profession or business in Hong Kong and is in respect of the funds of the trade, profession or business. Sums derived from the sale, disposal or redemption of the Bonds will be subject to Hong Kong profits tax where received by or accrued to a person who carries on a trade, profession or business in Hong Kong and the sum has a Hong Kong source.

Sums received by or accrued to a financial institution by way of gains or profits arising through or from the carrying on by the financial institution of its business in Hong Kong from the sale, disposal and redemption of the Bonds will be subject to profits tax.

Stamp duty

No stamp duty is payable on the issue of the Bonds. Stamp duty may be payable on any transfer of the Bonds as the relevant transfer is required to be registered in Hong Kong, but stamp duty will not be payable if the Bonds constitute loan capital (as

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defined in the Stamp Duty Ordinance (Cap.117 of the Laws of Hong Kong)). The Bonds, under the present terms and conditions, constitute loan capital (as defined in the Stamp Duty Ordinance) and accordingly no Hong Kong stamp duty will be chargeable upon the issue, transfer or exchange of a Bond.

Estate duty

No Hong Kong estate duty is payable in respect of the Bonds.

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SUBSCRIPTION AND SALE

The Issuer has entered into a subscription agreement with the Joint Lead Managers dated 30 November 2020 (the “Subscription Agreement”), pursuant to which and subject to certain conditions contained therein, the Issuer has agreed to sell to the Joint Lead Managers, and the Joint Lead Managers have agreed to, severally but not jointly, subscribe and pay for or to procure subscribers to subscribe and pay for, the aggregate principal amount of the New Bonds indicated in the following table.

Principal amount of the New Bonds to be subscribed U.S.$ BOSC International Company Limited ...... 37,250,000 China International Capital Corporation Hong Kong Securities Limited ...... 30,000,000 Industrial Bank Co., Ltd. Hong Kong Branch ...... 10,000,000 Dongxing Securities (Hong Kong) Company Limited ...... 10,000,000 Total ...... 87,250,000

The Subscription Agreement provides that the Joint Lead Managers and their affiliates, and their respective directors, officers and employees will be indemnified against certain liabilities in connection with the offer and sale of the New Bonds. The Subscription Agreement provides that the obligations of the Joint Lead Managers are subject to certain conditions precedent, and entitles the Joint Lead Managers to terminate it in certain circumstances prior to payment being made to the Issuer.

The Joint Lead Managers and certain of their respective subsidiaries or affiliates have performed certain investment banking and advisory services for, and entered into certain commercial banking transactions with, the Issuer and/or its subsidiaries, from time to time, for which they have received customary fees and expenses. The Joint Lead Managers and their respective subsidiaries or affiliates may, from time to time, engage in transactions with and perform services for the Issuer and/or its subsidiaries in the ordinary course of business.

In connection with the offering of the New Bonds, the Joint Lead Managers and/or their respective affiliate(s) may act as an investor for its own account and may take up New Bonds in the offering and in that capacity may retain, purchase or sell for its own account such securities and any securities of the Issuer and may offer or sell such securities or other investments otherwise than in connection with the offering. Accordingly, references herein to the New Bonds being offered should be read as including any offering of the New Bonds to the Joint Lead Managers and/or their respective affiliates acting in such capacity. Such persons do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so. The Joint Lead Managers or their respective affiliates may purchase the New Bonds for its own account or for the accounts of its customers and enter into transactions, including credit derivative, such as asset swaps, repackaging and credit default swaps relating to the New Bonds and/or other securities of the Group and its subsidiaries or associates at the same time as the offer and sale of the New Bonds or in secondary market transactions. Such transactions would be carried out as bilateral trades with selected counterparties and separately from any existing sale or resale of the New Bonds to which this Offering Circular relates (notwithstanding that such selected counterparties may also be purchasers of the New Bonds). General

The distribution of this Offering Circular or any offering material and the offering, sale or delivery of the New Bonds is restricted by law in certain jurisdictions. Therefore, persons who may come into possession of this Offering Circular or any offering material are advised to consult their own legal advisers as to what restrictions may be applicable to them and to observe such restrictions. This Offering Circular may not be used for the purpose of an offer or invitation in any circumstances in which such offer or invitation is not authorised.

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No action has been or will be taken in any jurisdiction by the Issuer or the Joint Lead Managers that would permit a public offering, or any other offering under circumstances not permitted by applicable law, of the New Bonds, or possession or distribution of this Offering Circular, any amendment or supplement thereto issued in connection with the proposed resale of the New Bonds or any other offering or publicity material relating to the New Bonds, in any country or jurisdiction where action for that purpose is required. Accordingly, the New Bonds may not be offered or sold, directly or indirectly, and neither this Offering Circular nor any other offering material or advertisements in connection with the New Bonds may be distributed or published, by the Issuer or the Joint Lead Managers, in or from any country or jurisdiction, except in circumstances which will result in compliance with all applicable rules and regulations of any such country or jurisdiction and will not impose any obligations on the Issuer or the Joint Lead Managers. If a jurisdiction requires that an offering of New Bonds be made by a licensed broker or dealer and the Joint Lead Managers or any affiliate of the Joint Lead Managers is a licensed broker or dealer in that jurisdiction, such offering shall be deemed to be made by the Joint Lead Managers or such affiliate on behalf of the Issuer in such jurisdiction.

United States

The New Bonds have not been and will not be registered under the Securities Act and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Each Joint Lead Manager has represented, warranted and undertaken that it has not offered or sold, and will not offer or sell, any bonds constituting part of its allotment within the United States except in accordance with Rule 903 of Regulation S under the Securities Act and, accordingly, that neither it nor any of its affiliates (including any person acting on behalf of such Joint Lead Manager or any of its affiliates) has engaged or will engage in any directed selling efforts with respect to the New Bonds.

Terms used in the paragraph above have the meanings given to them by Regulation S under the Securities Act.

United Kingdom

Each of the Joint Lead Managers has represented, warranted and agreed that:

(a) it has only communicated or caused to be communicated, and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the “FSMA”)) received by it in connection with the issue or sale of any New Bonds in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer; and

(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the New Bonds in, from or otherwise involving the United Kingdom. Hong Kong

Each of the Joint Lead Managers has represented, warranted and undertaken that

(i) it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, any New Bonds other than (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong (the “SFO”) and any rules made under the SFO; or (b) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong (the “C(WUMP)O”) or which do not constitute an offer to the public within the meaning of the C(WUMP)O; and

(ii) it has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the New Bonds, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the New Bonds which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the SFO and any rules made under the SFO.

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The People’s Republic of China

Each of the Joint Lead Managers has represented, warranted and undertaken that the New Bonds are not being offered or sold and may not be offered or sold, directly or indirectly, in the PRC (for such purposes, not including the Hong Kong and Macau Special Administrative Regions or Taiwan), except as permitted by the securities laws of the PRC.

Singapore

Each of the Joint Lead Managers has acknowledged that this Offering Circular has not been and will not be registered as a prospectus with the Monetary Authority of Singapore. Accordingly, each of the Joint Lead Managers has represented, warranted and undertaken that it has not offered or sold any New Bonds or caused such New Bonds to be made the subject of an invitation for subscription or purchase, and will not offer or sell such New Bonds or cause such New Bonds to be made the subject of an invitation for subscription or purchase, and has not circulated or distributed, nor will it circulate or distribute this Offering Circular or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of such New Bonds, whether directly or indirectly, to any person in Singapore other than (i) to an institutional investor (as defined in Section 4A of the Securities and Futures Act (Chapter 289) of Singapore, as modified or amended from time to time (the “SFA”)) pursuant to Section 274 of the SFA, (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the New Bonds are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

(a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities or securities-based derivatives contracts (each term as defined in Section 2(1) of the SFA) of that corporation or the beneficiaries’ rights and interests (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the New Bonds pursuant to an offer made under Section 275 of the SFA except:

(1) to an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA; (2) where no consideration is or will be given for the transfer;

(3) where the transfer is by operation of law;

(4) as specified in Section 276(7) of the SFA; or

(5) as specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018.

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

Japan

The New Bonds have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Law No. 25 of 1948, as amended) (the “Financial Instruments and Exchange Act”) and, each of the Joint Lead Managers has represented, warranted and undertaken that it has not, directly or indirectly, offered or sold and will not, directly or

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indirectly, offer or sell any New Bonds in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised under the laws of Japan) or to others for re-offering or re-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with the Financial Instruments and Exchange Act and other relevant laws, regulations and ministerial guidelines of Japan.

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GENERAL INFORMATION

1. Clearing Systems: The Bonds have been accepted for clearance through Euroclear and Clearstream under Common Code number 213332996 and the International Securities Identification Number for the Bonds is XS2133329966.

2. LEI: The Legal Entity Identifier of the Issuer is 300300KDIZ11PV2GH547.

3. Authorisations: The Issuer has obtained all necessary consents, approvals and authorisations in connection with the issue and performance of its obligations under the New Bonds, the entry into the Second Supplemental Trust Deed and the Second Supplemental Agency Agreement. The issue of the New Bonds and the entry into the transaction documents in connection with the New Bonds were authorised by resolutions of the Board of Directors of the Issuer on 16 March 2019 and by resolutions of the shareholders of the Issuer on 28 March 2019.

4. No Material Adverse Change: Save as disclosed in the Offering Circular, there has been no material adverse change, or any development reasonably likely to involve an adverse change, in the financial or trading position, prospects or results of operations of the Issuer or the Group since 31 December 2019.

5. Litigation: Save as disclosed in the Offering Circular, none of the Issuer or any other member of the Group is involved in any litigation or arbitration proceedings that the Issuer, as the case may be, believes are material in the context of the Bonds, neither the Issuer is aware that any such proceedings are pending or threatened.

6. Available Documents: Copies of the Issuer’s audited consolidated financial statements as at and for the years ended 31 December 2017, 2018 and 2019, the Original Trust Deed, the Original Agency Agreement, the Supplemental Trust Deed, the Supplemental Agency Agreement, the Second Supplemental Trust Deed, the Second Supplemental Agency Agreement and the Articles of Association of the Issuer will be available for inspection in physical form from the New Issue Date at the Issuer’s principal office at No. 2 E. Century Avenue, Yancheng, Jiangsu Province, the People’s Republic of China during normal business hours, so long as any of the Bonds is outstanding.

7. Financial Statements: The Issuer’s audited consolidated financial information as at and for the years ended 31 December 2017, 2018 and 2019 have been extracted from the consolidated financial statements of the Issuer as at and for the years ended 31 December 2018 and 2019 audited by SuyaJincheng, the independent auditor of the Issuer, included elsewhere in this Offering Circular, together with the auditor’s report in respect of the financial years ended 31 December 2018 and 2019. The consolidated financial statements of the Issuer as at and for the three years ended 31 December 2017, 2018 and 2019 have been prepared in accordance with PRC GAAP. There are certain differences between PRC GAAP and IFRS. For a summary of the differences, please see “Summary of Certain Differences between PRC Accounting Standards and International Financial Reporting Standards”. These consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in other countries and jurisdictions.

8. Listing of Bonds: The Original Bonds have been listed on the SEHK from 5 June 2020 (stock code: 40243) and the October 2020 Bonds have been listed on the SEHK from 14 October 2020. Application will be made to the SEHK for the listing of, and permission to deal in, the New Bonds by way of debt issues to Professional Investor only and such permission is expected to become effective on or about 8 December 2020.

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INDEX TO FINANCIAL STATEMENTS

Audited consolidated financial statements of the Issuer as at and the year ended 31 December 2019

Auditor’s Report ...... …..F-2

Audited Consolidated Financial Statements ...... F-5

Notes to the Audited Consolidated Financial Statements ...... F-15

Audited consolidated financial statements of the Issuer as at and for the year ended 31 December 2018

Auditor’s Report ...... F-130

Audited Consolidated Financial Statements ...... F-133

Notes to the Audited Consolidated Financial Statements ...... F-142

F-1

113 114 F-2 115 F-3 116 F-4 117 F-5 118 F-6 119 F-7 120 F-8 121 F-9 122 F-10 123 F-11 124 F-12 125 F-13 126 F-14 127 F-15 128 F-16 129 F-17 130 F-18 131 F-19 132 F-20 133 F-21 134 F-22 135 F-23 136 F-24 137 F-25 138 F-26 139 F-27 140 F-28 141 F-29 142 F-30 143 F-31 144 F-32 145 F-33 146 F-34 147 F-35 148 F-36 149 F-37 150 F-38 151 F-39 152 F-40 153 F-41 154 F-42 155 F-43 156 F-44 157 F-45 158 F-46 159 F-47 160 F-48 161 F-49 162 F-50 163 F-51 164 F-52 165 F-53 166 F-54 167 F-55 168 F-56 169 F-57 170 F-58 171 F-59 172 F-60 173 F-61 174 F-62 175 F-63 176 F-64 177 F-65 178 F-66 179 F-67 180 F-68 181 F-69 182 F-70 183 F-71 184 F-72 185 F-73 186 F-74 187 F-75 188 F-76 189 F-77 190 F-78 191 F-79 192 F-80 193 F-81 194 F-82 195 F-83 196 F-84 197 F-85 198 F-86 199 F-87 200 F-88 201 F-89 202 F-90 203 F-91 204 F-92 205 F-93 206 F-94 207 F-95 208 F-96 209 F-97 210 F-98 211 F-99 212 F-100 213 F-101 214 F-102 215 F-103 216 F-104 217 F-105 218 F-106 219 F-107 220 F-108 221 F-109 222 F-110 223 F-111 224 F-112 225 F-113 226 F-114 227 F-115 228 F-116 229 F-117 230 F-118 231 F-119 232 F-120 233 F-121 234 F-122 235 F-123 236 F-124 237 F-125 238 F-126 239 F-127 240 F-128 241 F-129 242 F-130 243 F-131 244 F-132 245 F-133 246 F-134 247 F-135 248 F-136 249 F-137 250 F-138 251 F-139 252 F-140 253 F-141 254 F-142 255 F-143 256 F-144 257 F-145 258 F-146 259 F-147 260 F-148 261 F-149 262 F-150 263 F-151 264 F-152 265 F-153 266 F-154 267 F-155 268 F-156 269 F-157 270 F-158 271 F-159 272 F-160 273 F-161 274 F-162 275 F-163 276 F-164 277 F-165 278 F-166 279 F-167 280 F-168 281 F-169 282 F-170 283 F-171 284 F-172 285 F-173 286 F-174 287 F-175 288 F-176 289 F-177 290 F-178 291 F-179 292 F-180 293 F-181 294 F-182 295 F-183 296 F-184 297 F-185 298 F-186 299 F-187 300 F-188 301 F-189 302 F-190 303 F-191 304 F-192 305 F-193 306 F-194 307 F-195 308 F-196 309 F-197 310 F-198 311 F-199 312 F-200 313 F-201 314 F-202 315 F-203 316 F-204 317 F-205 318 F-206 319 F-207 320 F-208 321 F-209 322 F-210 323 F-211 324 F-212 325 F-213 326 F-214 327 F-215 328 F-216 329 F-217 330 F-218 331 F-219 332 F-220 333 F-221 334 F-222 335 F-223 336 F-224 337 F-225 338 F-226 339 F-227 340 F-228 341 F-229 342 F-230 343 F-231 344 F-232 345 F-233 346 F-234 347 F-235 348 F-236 349 F-237 350 F-238 351 F-239 352 F-240 353 F-241 354 F-242 355 F-243 356 F-244 357 F-245 358 F-246 359 F-247

ISSUER

Jiangsu Yueda Group Co., Ltd. (江蘇悅達集團有限公司) No. 2 E. Century Avenue Yancheng Jiangsu Province The People’s Republic of China

TRUSTEE, REGISTRAR, PRINCIPAL PAYING AGENT AND TRANSFER AGENT

China Construction Bank (Asia) Corporation Limited 28/F, CCB Tower 3 Connaught Road Central Central, Hong Kong

LEGAL ADVISERS TO THE ISSUER

As to English law As to PRC law

Linklaters Jiangsu C&T Partners Law Firm 11th Floor, Alexandra House 5/F, Building D Chater Road Jindie Technology Park 532-2 Central East Zhongshan Road Hong Kong Nanjing, Jiangsu PRC

LEGAL ADVISERS TO THE JOINT LEAD MANAGERS

As to English law and Hong Kong law As to PRC law

Jun He Law Offices Jingtian & Gongcheng Suite 3701-10, 37/F, Jardine House 34/F, Tower 3 1 Connaught Place, Central China Central Place Hong Kong 77 Jianguo Road Beijing, PRC

LEGAL ADVISERS TO THE TRUSTEE

Allen & Overy LLP 50 Collyer Quay, #09-01 OUE Bayfront, Singapore

INDEPENDENT AUDITOR OF THE ISSUER

SuyaJincheng CPA (Limited Liability Partnerships) F21-23 Nanjing Central International Plaza No. 105-6 North Zhongshan Rd, Nanjing Jiangsu Province, PRC

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