History and Development

THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT HISTORY AND DEVELOPMENT OUR BUSINESS DEVELOPMENT Our business was first incepted in 1992 with the establishment of Henan Dadi, our principal operating subsidiary, the majority interests in which were subsequently acquired by Xuchang Hengda in 2005. Xuchang Hengda, our another principal operating subsidiary, was founded in 1998 by Mr. Li Dongfa, the father of Mr. Li (the executive Director and Chairman), as well as several other shareholders. Since Xuchang Hengda’s acquisition of the majority interests in Henan Dadi, we have been expanding through establishment and/or acquisition of equity interests in other operating companies. Upon completion of the Reorganisation, there are currently eight operating subsidiaries in the PRC within our structure. We commenced our property development business with a primary focus on Xuchang City, Henan Province. We implemented a development strategy of utilising Xuchang City as our home base and expanding into the surrounding areas such as Xinyang City and Zhengzhou City to capitalise on the fast-paced economic development of, and rapid-growing housing demand in, these regions. With a strong track record of more than 25 years in property development, we have built a strong presence in Henan Province, particularly in Xuchang City. The following is a summary of our key business development milestones: Late 1992 to 1993 Establishment of Henan Dadi and started to engage in the development of residential property projects in Henan Province. 1996 Hengdali Markets commenced operation – the first commercial property project of our Group 1998 Establishment of Xuchang Hengda – Participated in a focused Urban Development Scheme by Xuchang City – Chunqiu Garden (春秋花園) 2007 Establishment of Songji Dadi – Started the project named Xuchang Jian’an Mingjia (許昌建安名家) 2008 Establishment of Xinyang Hengda – expanded our footprint to Xinyang City and started the development of Xinyang Mingmen Shangju (信陽名門尚居) 2009 Establishment of Yuzhou Hengda – expanded our footprint to Yuzhou City and started the development of Yuzhou Sunshine City 2011 Establishment of Changge Hengda – expanded our footprint to Changge City and started the development of Changge Sunshine City Our Xuchang Hengda was recognised as “The State’s First-tier Quality Property Developer” 2013 Acquisition of Jiari Baocheng and started the development of King of the North Project, a focused project in Xuchang City 2016 Acquisition of Xuchang Hengmu Our Yuzhou Hengda was recognised as “The State’s First-tier Quality Property Developer” – 102 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT HISTORY AND DEVELOPMENT OUR CORPORATE DEVELOPMENT Introduction In preparation for the [REDACTED], our Company was incorporated in the Cayman Islands under the Cayman Companies Law as an exempted company with limited liability on 22 July 2016 as the [REDACTED] vehicle. Pursuant to the Reorganisation commenced in March 2012 following the incorporation of Dadi HK and as more particularly described in “Reorganisation” in this document, our Company became the holding company of our Group for the purpose of the [REDACTED]. Accordingly, our Company held, through Dadi BVI and Dadi HK as at the Latest Practicable Date, the shareholding in each of the eight operating subsidiaries of our Group (namely Henan Dadi, Songji Dadi, Xuchang Hengmu, Xuchang Hengda, Xinyang Hengda, Yuzhou Hengda, Changge Hengda and Jiari Baocheng). The following describes the corporate history of our Company and its subsidiaries which is material to our performance during the Track Record Period. Our Company We were incorporated on 22 July 2016 as an exempted company in the Cayman Islands. As a result of the Reorganisation and before the [REDACTED], our Company became the holding company of our Group, and entire issued share capital of our Company was held by Ever Enhancement BVI as to 95.00% and Ever Enrichment BVI as to 5.00%. Please refer to the section headed “Reorganisation” for further details. The principal business of our Company is investment holding. Group’s subsidiaries in the BVI and Hong Kong Dadi BVI Dadi BVI was incorporated on 10 June 2013 in the BVI with an authorised share capital of US$50,000 divided into 50,000 shares of US$1.00 each, of which one share was allotted and issued fully-paid on incorporation to Mr. Li, at par, for a consideration of US$1 being properly and legally completed and settled. As a result of the Reorganisation, Dadi BVI became a direct wholly owned subsidiary of our Company. Please refer to the section headed “Reorganisation” for further details. The principal business of Dadi BVI is investment holding. Dadi HK Dadi HK was incorporated on 14 March 2012 in Hong Kong with an authorised share capital of HK$10,000 divided into 10,000 shares of HK$1.00 each, of which 100 shares were allotted and issued fully-paid on incorporation to Mr. Li, at par, for a consideration of HK$100 being properly and legally completed and settled. – 103 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT HISTORY AND DEVELOPMENT As a result of the Reorganisation, Dadi HK became an indirect wholly owned subsidiary of our Company through Dadi BVI. Please refer to the section headed “Reorganisation” for further details. The principal business of Dadi HK is investment holding. Group’s subsidiaries in the PRC Henan Dadi As one of the principal operating subsidiaries of our Group in the PRC, Henan Dadi was established by three Independent Third Parties on as a sino-foreign joint venture (中外合資經營企業) and commenced its business operations on 29 July 1992, with an initial registered capital of US$2 million, which was fully paid up in cash. Henan Dadi first became interested by members of our Group in December 2004 as a result of Xuchang Hengda having acquired interests therein from Independent Third Parties. Notwithstanding a series of equity transfer and capital enlargement conducted since the date of establishment, during the Track Record Period there had been no change in the shareholding structure of Henan Dadi which remained to be wholly owned by Dadi HK. Following the completion of the Reorganisation and up to the Latest Practicable Date, Henan Dadi became the wholly owned subsidiary of Dadi HK and accordingly an indirect wholly owned subsidiary of our Company. The principal businesses of Henan Dadi are related to the development, sales, rental and other ancillary services in relation to properties set out in rural-urban development plans. Xuchang Hengda As another principal operating subsidiary of our Group in the PRC, Xuchang Hengda was founded by Li Dongfa, the father of Mr. Li, as well as several other individuals on 3 June 1998 as a limited liability company (有限責任公司) with an initial registered capital of RMB10 million, which was confirmed to have been fully paid up in cash and by way of transfer of properties on 2 June 1998. Xuchang Hengda first became interested by members of our Group in September 2013 as a result of Henan Dadi having acquired interests therein from Henan Hengda Investment. Notwithstanding a series of equity transfer and capital enlargement conducted since the date of establishment, during the Track Record Period there had been no change in the shareholding structure of Xuchang Hengda which remained to be wholly owned by Henan Dadi. Following the completion of the Reorganisation and up to the Latest Practicable Date, Xuchang Hengda became the wholly owned subsidiary of Henan Dadi and accordingly an indirect wholly owned subsidiary of each of Dadi BVI as well as our Company. The principal businesses of Xuchang Hengda are related to property development and management (with valid licence), property rental and market management services. – 104 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT HISTORY AND DEVELOPMENT Songji Dadi Songji Dadi was established as a limited liability company (有限責任公司) by Henan Dadi and an Independent Third Party and accordingly commenced its business operations on 7 November 2007, with an initial registered capital of RMB10 million, which was confirmed to have been fully paid up in cash on 1 November 2007. Notwithstanding a series of equity transfer and capital enlargement conducted since the date of establishment, during the Track Record Period there had been no change in the shareholding structure of Songji Dadi which remained to be wholly owned by Henan Dadi. Following the completion of the Reorganisation and up to the Latest Practicable Date, Songji Dadi became the wholly owned subsidiary of Henan Dadi and accordingly an indirect wholly owned subsidiary of each of Dadi BVI as well as our Company. The principal businesses of Songji Dadi are related to property development and management (with valid licence), property rental and market management services. Xinyang Hengda Xinyang Hengda was established as a limited liability company (有限責任公司)bytwo Independent Third Parties and Mr. Li and accordingly commenced its business operations on 5 March 2008, with an initial registered capital of RMB8.34 million, which was confirmed to have been fully paid up in cash on 28 February 2008. Xinyang Hengda first became interested by members of our Group in March 2013 as a result of Xuchang Hengda having subscribed its enlarged capital. Notwithstanding a series of equity transfer and capital enlargement conducted since the date of establishment, during the Track Record Period there had been no change in the shareholding structure of Xinyang Hengda which remained to be owned by Henan Dadi and an Independent Third Party as to 88.88% and 11.12% of the registered capital, respectively.

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