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. INDUSTRY OVERVIEW Certain information and statistics in this section and elsewhere in the document relating to the real-estate industry and the overall China economy are derived from various official and Independent Third Party sources and have been prepared on the basis of information made public by governmental entities and inter-governmental organizations and the commissioned research report from JLL. The information presented in this section and elsewhere in the document from these and other sources represents the most recent information that is currently available from those sources. We believe that the sources of the information in this section and elsewhere in this document are appropriate sources for such information and have taken reasonable care in extracting and reproducing such information. We have no reason to believe that such information is false or misleading in any material respect or that any fact has been omitted that would render such information false or misleading in any material respect. We, the Sole Sponsor, the [REDACTED], their respective directors, employees, agents, representatives, affiliates and advisers and all other parties other than JLL involved in the [REDACTED] have not independently verified, and make no representation as to, the accuracy of the information from official or other third-party sources. Such information may not be consistent with, and may not have been compiled with the same degree of accuracy or completeness as, other information compiled within or outside China. Accordingly, the official and other third-party sources contained or referred to herein may not be accurate and should not be unduly relied on. INTRODUCTION In connection with the [REDACTED], we have commissioned JLL, an Independent Third Party, for use in this document to prepare the Industry Research Report with necessary information on the real estate markets in China and the cities in which we operate. JLL has charged us a total fee of approximately RMB215,000 for the preparation of the Industry Research Report, which we believe is in line with the market rate for similar reports. JLL is an international professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. JLL has more than 330 corporate offices, operates in more than 80 countries and has a global workforce of more than 91,000. This section was prepared primarily by JLL’s designated market research team based on the followings and considered that the information and statistics provided are reliable: • data from various Chinese government publications; • site visits and interviews; • recognized research institutions; and • proprietary database of JLL. The following sets out the main reasons for JLL to adopt the above sources of information and consider them as reliable: • It is a general market practice to adopt official data and announcements from various Chinese government agencies; and • JLL understands the data collection methodology and data source of its proprietary database and the subscribed database from CREIS (中國指數研究院) While preparing this section, JLL has relied on the assumptions listed below: • all documents provided by the JLL Group are true and correct; • all published data by the relevant Chinese government authorities are true and correct; • JLL makes no warranty or representation that these forecasts will be achieved since the real estate market is constantly fluctuating and changing. JLL will not take any responsibility to predict or warrant the future conditions of real estate market; and • where subscribed data is obtained from recognized research and public institutions, JLL will rely upon the apparent integrity and expertise of such institutions. – 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. INDUSTRY OVERVIEW Our Directors confirm that, as of the Latest Practicable Date, after making reasonable enquiries, there was no material adverse change in the market information since the date of JLL Report or the date of the relevant data contained in the JLL Report which may qualify, contradict or have an impact on the information in this section. OVERVIEW OF THE PRC ECONOMY As the world’s second-largest economic entity, the PRC’s nominal GDP has increased from RMB68,886 billion in 2015 to RMB101,599 billion in 2020 representing a CAGR of 8.1% during the past years. Although under the pressure of U.S. tariffs, the real GDP of the PRC still grew at a rate of 6.1% in 2019. Population growth slowed down between 2015 and 2019. Meanwhile, fixed asset investment witnessed a slight decline from RMB56,200 billion in 2015 to RMB52,727 billion in 2020 with a CAGR of -1.3%. Actual utilization of foreign direct investment reached USD144.4 billion in 2020 representing a CAGR of 2.7%. The table below sets out selected economic indicators of the PRC for the years indicated: Major economic indicators in the PRC (2015-2020) CAGR 2015 2016 2017 2018 2019 2020 2015-2020 Permanent Population (million) 1,375 1,383 1,390 1,395 1,400 N/A N/A Nominal GDP (RMB billion) 68,886 74,640 83,204 91,928 99,087 101,599 8.1% Real GDP growth rate (%) 7.0 6.8 6.9 6.7 6.1 2.3 6.0* Fixed asset investment (RMB billion) 56,200 60,647 64,124 64,568 56,087 52,727 (1.3%) Fixed asset investment growth rate (%) 9.8 7.9 7.0 5.9 5.1 2.7 6.4* Actual utilization of foreign direct investment (USD billion) 126.3 126.0 131.0 135.0 138.1 144.4 2.7% Source: National Bureau of Statistics Notes: * is the arithmetic mean DRIVERS OF THE REAL ESTATE MARKET IN THE PRC Further Development of Metropolitan Clusters In terms of “2018 Development Report on the PRC Megalopolis”《 ( 2018年中國都市 圈發展報告》) issued by the Institute of China’s Sustainable Urbanization of Tsinghua University (清華大學中國新型城鎮化研究院), 77.8% of the total nominal GDP in the PRC was generated by 34 megalopolises. Specifically, as stated in “the Development Plan of Urban Agglomeration in the Yangtze River Delta”《長江三角洲城市群發展規劃》 ( )) issued by National Development and Reform Commission, Yangtze River Delta Megalopolis is formed by Shanghai, Nanjing, Hefei, Chuzhou and different tiers of cities in Jiangsu, Zhejiang and Anhui provinces. As one of the most recognized crucial megalopolises, Yangtze River Delta Megalopolis has enjoyed an increasing population and dynamic economic development in recent years. The nominal GDP of 26 cities in the Yangtze River Delta Megalopolis amounted to RMB20,513 billion, contributing to approximately 20.0% of the GDP in the PRC with an average GDP growth rate of 4.0%, which exceeded the 2.3% national level in 2020. The flourishing economic environment and increasing population has been driving a considerable housing demand in the Yangtze River Delta Megalopolis and other fast-growing city clusters. – 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. INDUSTRY OVERVIEW Government’s Encouragement in Rebuilding Urban Shanty Towns In recent years, all regions and relevant government agencies in the PRC have continuously reinforced efforts in rebuilding shanty towns in urban areas. According to the Ministry of Housing and Urban-Rural Development of the PRC, 2.1 million housing units were rebuilt in urban shanty towns in 2020. In addition, local governments have been replacing housing arrangements by providing monetary compensation to relocate residents. Therefore, residents with monetary compensation are likely to improve their housing conditions, which could result in a promising residential property market in the PRC. Population Migration Redirection According to the population statistics of selected cities from the National Bureau of Statistics, tier-1 cities such as Beijing are now experiencing a relatively low population growth. On the contrary, many prefecture-level cities with progressive industry and economic development have seen a moderate increase in population. One of the reasons is that higher-tier cities generally have relatively high residential property price and strict household registration policy. Therefore, the direction of population migration is gradually changing and as such, there are more strategical choices for property developers. Continuing Urbanization Under the reform of the HUKOU Policy (戶口政策), urban population in the PRC has maintained an increasing trend and reached 848 million in 2019. Correspondingly, the urbanization rate in the PRC has been increasing as well, from 54.8% in 2014 to 60.6% in 2019. According to the National Plan on New Urbanization (2014-2020)《國家新型城鎮化 ( 規劃(2014-2020)》) issued by the State Council of the PRC, the urbanization rate is expected to exceed 60% from 2020 onwards. The continuing urbanization is an important driving force of the real estate market. Increase in Disposable Income and Expenditure of Urban Households As a result of the rapid economic development, people’s living standards have been improving significantly. Both income and expenditure experienced steady growth in recent years. Per capita disposable income of urban households increased from RMB31,195 in 2015 to RMB43,834 in 2020 at a CAGR of 7.0%, while per capita consumption expenditure of urban households reached from RMB21,392 in 2015 to RMB27,007 in 2020, representing a CAGR of approximately 4.8% over the same period. The increasing domestic consumption encouraged people to pursue a higher living standard. OVERVIEW OF THE RESIDENTIAL PROPERTY MARKET IN THE PRC Major Indicators of the Residential Property Market in the PRC Accompanied with the rapid economic development and the growth of fixed asset investment, real estate investment in the PRC increased significantly.