Relationship with Our Controlling Shareholders

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 RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS

OVERVIEW

Our Controlling Shareholders are Mr. Zhang Bozhou (together with Jutong Medical Management), Ms. Zhang Xiaoli (together with Sihai Medical Management), Mr. Zhang Junfeng (together with Guangming Medical Management), Mr. Zhang Fengsheng (together with Xiwang Medical Management), Ms. Zhang Yumei (together with Sitong Medical Management) and Xiamen Juludazhou Equity Investment (being controlled by Mr. Zhang Bozhou as the sole general partner). As of the Latest Practicable Date, our Company was owned as to 14.41% by Jutong Medical Management, 15.71% by Sihai Medical Management, 11.18% by Guangming Medical Management, 11.18% by Xiwang Medical Management, 1.62% by Sitong Medical Management and 3.99% by Xiamen Juludazhou Equity Investment, respectively, which are holding companies wholly owned or controlled by Mr. Zhang Bozhou, Ms. Zhang Xiaoli, Mr. Zhang Junfeng, Mr. Zhang Fengsheng and Ms. Zhang Yumei. Since they joined the Group and during the Track Record Period, Mr. Zhang Bozhou, Ms. Zhang Xiaoli, Mr. Zhang Junfeng, Mr. Zhang Fengsheng and Ms. Zhang Yumei have jointly effected their control of our Group as a unified group of Shareholders. Pursuant to the acting-in-concert agreement dated June 3, 2019 among Mr. Zhang Bozhou, Ms. Zhang Xiaoli, Mr. Zhang Junfeng, Mr. Zhang Fengsheng and Ms. Zhang Yumei, they confirmed that they had been aligning their votes when exercising their voting rights at the shareholders meetings of our Group, and they further agreed that they will, for so long as they remain interested in the Shares, follow the directions of Mr. Zhang Bozhou when exercising their voting rights at the general meetings of our Company. Accordingly, our Controlling Shareholders together were entitled to exercise control over approximately 58.09% voting powers of our Company as of the Latest Practicable Date.

Immediately following the completion of the [REDACTED] and the [REDACTED], assuming the [REDACTED] is not exercised, our Controlling Shareholders will be entitled to exercise control over approximately [REDACTED]% voting powers of our issued share capital and thus, they will continue to be our controlling shareholders upon the [REDACTED].

As of the Latest Practicable Date, save and except for their interests in our Company and its subsidiaries, neither our Controlling Shareholders, our Directors, nor any of their close associates had any interests in any other companies which may, directly or indirectly, compete with or is likely to compete with our business which need to be disclosed pursuant to Rule 8.10 of the Listing Rules.

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NON-COMPETITION UNDERTAKINGS

On January 4, 2021, our Controlling Shareholders have entered into the Deed of Non-competition in favor of our Company (for itself and on behalf of its subsidiaries), pursuant to which each of our Controlling Shareholders has confirmed that he or she or it is not engaged in, or interested in any business which, directly or indirectly, competes or may compete with our business. In accordance with the non-competition undertakings set out in the Deed of Non-competition, each of our Controlling Shareholders has undertaken to our Company (for itself and on behalf of its subsidiaries) that during the period commencing from the date of signing of the deed and ending on the occurrence of the earliest of (i) the day on which our Shares cease to be listed on the Stock Exchange or other recognized stock exchange; (ii) the day on which our Controlling Shareholders, as a concerted group, ceases to hold or otherwise be interested in, whether directly or indirectly, 30% or more of the voting rights of our Company: • except if he/she/it is offered or becomes aware of any potential business opportunity directly or indirectly to engage or become interested in a Restricted Business, which for the avoidance of doubt, competes with our principal business in Hong Kong, the PRC or such other places from time to time (the “New Business Opportunity”), he/she/it: (a) shall refer such business opportunity to our Company by giving written notice (the “Offer Notice”) to the Company within 30 business days about all necessary and reasonably required information in respect of the New Business Opportunity (including, but not limited to, details of the nature and investment or acquisition cost of the New Business Opportunity) for the Company to consider (a) whether the relevant New Business Opportunity will compete with the business of the Group, and (b) whether taking up the New Business Opportunity is in the interest of our Company; (b) shall not pursue such New Business Opportunity unless it has been rejected by our independent board in writing or if the independent board fails to respond within the 30 Business Days’ period after receipt of the Offer Notice, and if there is any material change in the nature, terms of conditions of such New Business Opportunity pursued by the any of the Controlling Shareholders, the relevant Controlling Shareholders shall refer such revised New Business Opportunity to the Company again for consideration.

Each of our Controlling Shareholders have further undertaken, jointly and severally, to indemnify and keep indemnified our Company against any damage, loss or liability suffered by our Company arising out of or in connection with any breach of covenants and undertakings and/or any of the obligations of our Controlling Shareholders under the Deed of Non-competition, including any costs and expenses incurred as a result of such breach.

The implementation of the Deed of Non-competition will be governed and monitored as follows: • our independent board which is comprised solely our independent non-executive Directors will be responsible for deciding, without attendance by any executive Director (except as invited by our independent non-executive Directors to assist them or provide any relevant information but in no circumstances shall the participation of our executive Director(s) in such meeting(s) be counted towards the quorum should our executive Director(s) be allowed to vote in such meeting(s)), whether or not to take up a New Business Opportunity referred to us under the terms of the Deed of Non-competition; • in the event that our independent non-executive Directors decide not to proceed with any particular New Business Opportunity and that our Controlling Shareholders decide to proceed with such New Business Opportunity, we will announce such decision by way of an announcement setting out therein the basis and reasons for arriving at the decisions for us not taking the project or the New Business Opportunity;

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• our independent non-executive Directors will be granted full access of financial information and other information they request from the managers of our Company and Controlling Shareholders in order to make an informed decision. The independent non-executive Directors will make each decision based on any factors they consider appropriate and beneficial to our Group;

• our independent non-executive Directors may employ an independent financial advisor as they consider necessary to advise them on the terms of any New Business Opportunity;

• each of our Controlling Shareholders has undertaken to keep us informed of any New Business Opportunity and to provide all information reasonably required by the independent non-executive Directors to assist them in their consideration of any New Business Opportunity;

• our independent non-executive Directors will also review, on an annual basis, the implementation of the Deed of Non-competition and any decisions in relation to any New Business Opportunity referred to us, and state their basis and reasons for arriving at the decisions in our Company’s annual report;

• after the [REDACTED], our Directors will continue to disclose details of any potential competing interests (if any) in our annual reports to our Shareholders as per the relevant requirements under the Listing Rules; and

• in the event that any of our Directors and/or their respective close associates has material interest in any matter to be deliberated by our Board in relation to the compliance and enforcement of the Deed of Non-competition, he/she will abstain from voting on the resolutions of the Board approving the matter and shall not be counted towards the quorum for the voting pursuant to the applicable provisions in the articles of association of our Company.

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INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS

We believe that our Group is capable of conducting our business independently from our Controlling Shareholders and their respective associates (other than our Group) after the [REDACTED] for the following reasons:

Management Independence

We maintain an independent Board to oversee our Group’s business. Our Board comprises four executive Directors, four non-executive Directors and four independent non-executive Directors. We consider that our Board will function independently from our Controlling Shareholders because:

• our Board comprises 12 Directors and four of them are independent non-executive Directors, which represents one-third of the members of the Board. Such composition is in line with the current corporate governance best practices in Hong Kong according to the requirement under the Listing Rules. The four independent non-executive Directors have extensive experience in different areas and have been appointed to ensure that the decisions of the Board are made only after due consideration of independent and impartial opinions. As such, we believe our independent non-executive Directors are able to oversee the Board to ensure there is no potential conflict of interests or competition with our Controlling Shareholders;

• each Director is aware of his fiduciary duties as a director of our Company which requires, among other things, that he or she acts for the benefit and in the best interests of our Company and does not allow any conflict between his duties as a Director and his personal interest. Further, we believe our independent non-executive Directors have the depth and breadth of experience which will enable them to bring sound, independent, and impartial judgment to the decision-making process of our Board. Our independent non-executive Directors have been appointed in accordance with the requirements of the Listing Rules to ensure there is no actual or potential conflict of interest with our Controlling Shareholders;

• in the event that there is a potential conflict of interest arising out of any transaction to be entered into between our Company and our Directors or their respective associates, the interested Director(s) is/are obliged to declare and fully disclose such potential conflict of interest and shall abstain from voting at the relevant Board meetings of our Company in respect of such transactions and shall not be counted in the quorum;

• any connected transactions between our Group and our Controlling Shareholders or their respective associates are subject to the requirements under Chapter 14A of the Listing Rules, including the requirements of reporting, announcement and independent Shareholders’ approval (if applicable) for a connected transaction as appropriate; and

• we have established an internal control mechanism to identify connected transactions to ensure that our Shareholders or Directors with conflicting interests in a proposed transaction will abstain from voting on the relevant resolutions.

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Operational Independence

As of the Latest Practicable Date, we had our own independent operation capabilities and independent management systems. We are also in possession of all necessary relevant licenses, approvals and certificates, to carry on and operate our business and we have sufficient operational capacity in terms of capital and employees to operate and manage independently. We do not rely on any operational or administration resources of our Controlling Shareholders or their respective associates for our business development, staffing, marketing or sales activities. We have independent access to our customers, suppliers and an independent management team to handle our day-to-day operations. During the Track Record Period, our Company concluded certain leasing of properties with a number of associates of our Controlling Shareholders which are counted as one-off in nature according to IFRS 16. For details of those, please refer to the section headed “— Transactions Entered Into Before the [REDACTED] Which Would Otherwise Constitute Connected Transactions” below. Such transactions are entered into in the ordinary and usual course of business of our Company and our Directors confirm that the terms of such transactions are determined at arm’s length negotiations and are no less favourable to our Company than terms offered by Independent Third Parties. Our Directors believe that the continuing connected transactions between our Company and the associates of our Controlling Shareholders do not indicate any undue reliance by our Company on our Controlling Shareholders and are beneficial to our Company and our Shareholders as a whole.

Financial Independence

Our Board believe that we are able to operate financially independently from our Controlling Shareholders and their respective close associates as:

(a) we have our own accounting and financial department and an independent financial system and we make financial decisions independently according to our Group’s own business and operation needs;

(b) we have sufficient capital to operate our business independently, and have adequate internal resources and credit profile to support our daily operations;

(c) all loans, advances and non-trade balances due to and from our Controlling Shareholders or their respective close associates had been fully settled as of the Latest Practicable Date;

(d) we have our own treasury function and we have independent access to third party financing on market terms and conditions for our business operations as and when required; and

(f) we have independent bank accounts and do not share any of our bank accounts, loan facilities or credit facilities with our Controlling Shareholders or their respective close associates.

With respect to any future financial assistance to be provided to, or received from, our connected persons, including our Controlling Shareholders, our Company shall comply with the requirements under Chapter 14A of the Listing Rules, including the requirements of reporting, announcement and independent Shareholders’ approval as appropriate, and undertake to provide or receive such financial assistance on normal commercial terms or better.

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Based on the above, our Directors are satisfied that we are capable of conducting our business independently from our Controlling Shareholders (including their respective close associates) after the [REDACTED].

CORPORATE GOVERNANCE MEASURES

Our Company will adopt the following corporate governance measures to manage any potential or actual conflict of interests that may arise between our Group and our Controlling Shareholders and to safeguard the interests of our independent Shareholders:

• in the event that connected transactions, if any, between our Group and other business in which any of our Directors or their respective associates has any interest are submitted to the Board for consideration, the relevant interested Director will not be counted in the quorum and will abstain from voting on such matters, and majority votes by non-conflicted Directors are required to decide on such connected transactions;

• our independent non-executive Directors will review any options, pre-emptive rights or rights of first refusal to be granted by our Controlling Shareholders and our Directors in favor of us over their future competing businesses and decide whether to exercise these rights, should such New Business Opportunity arises;

• our Controlling Shareholders and our Directors undertake to provide all information necessary for the enforcement of the options, pre-emptive rights or rights of first refusal over future New Business Opportunities which may, directly or indirectly, compete with or is likely to compete with our business;

• our Company will disclose decisions on matters reviewed by our independent non-executive Directors relating to the exercise or non-exercise of options, pre-emptive rights or rights of first refusal either through the annual report, or by way of announcements to the public;

• we have appointed Haitong International Capital Limited as our compliance adviser to provide advice and guidance to us in respect of compliance with the applicable laws, rules, codes, guidelines and the Listing Rules;

• our Directors operate in accordance with the Articles which require the interested Director not to vote (nor be counted in the quorum) on any resolution of the Board approving any contract or arrangement or other proposal in which he or any of his associates is materially interested; and

• pursuant to the Corporate Governance Code, our Directors, including the independent non-executive Directors, will be able to seek independent professional advice from external parties in appropriate circumstances at our Company’s costs.

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TRANSACTIONS ENTERED INTO BEFORE THE [REDACTED] WHICH WOULD OTHERWISE CONSTITUTE CONNECTED TRANSACTIONS

We have entered into the following transactions with parties who will, upon the [REDACTED], become our connected persons. These transactions were entered into before the [REDACTED] and are accounted as one-off in nature under IFRS 16. If these transactions continued after the [REDACTED], such transactions would constitute connected transactions of our Group. Details of such transactions are set out below in order to facilitate potential investors to anticipate that we have, before the [REDACTED], entered into transactions which would otherwise be considered as connected transactions should our Company be listed on the Stock Exchange at the time of the relevant transactions.

Connected Persons

We have entered into a number of tenancy agreements with our Individual Shareholders, namely, Mr. Zhang Bozhou, Ms. Zhang Xiaoli, Mr. Zhang Junfeng and Mr. Zhang Fengsheng. In addition, upon the [REDACTED], the following parties, which have entered into the following tenancy agreements with our Group, will become our connected persons:

• Baotou City Chaoju Eye Medical Co. Ltd. (包頭市朝聚眼科醫療有限公司) is a company owned as to approximately 30% by Mr. Zhang Bozhou (being one of our Controlling Shareholders and an executive Director), Ms. Zhang Xiaoli (being one of our Controlling Shareholders and an executive Director), 20% by Mr. Zhang Fengsheng (being one of our Controlling Shareholders) and 20% by Mr. Zhang Junfeng (being one of our Controlling Shareholders and an executive Director), as at the Latest Practicable Date, hence an associate of our Controlling Shareholder and will therefore be a connected person of our Company upon the [REDACTED];

• Inner Mongolia Autonomous Region Red Cross Chifeng Chaoju Eye Hospital (內蒙古自治區紅十字會赤峰朝聚眼科醫院) is a private non-enterprise unit sponsored by the Individual Shareholders and others, hence an associate of our Controlling Shareholders and therefore be a connected person of our Company upon the [REDACTED]; and

• Hangzhou West Lake Chaoju Eye Hospital (杭州西湖朝聚眼科醫院) is a private non-enterprise unit solely sponsored by Inner Mongolia Jujing Rehabilitation Services Centre (內蒙古聚睛康復服務中心) as at the Latest Practicable Date, hence an associate of our Controlling Shareholder and therefore be a connected person of our Company upon the [REDACTED].

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Tenancy Agreements

As at the Latest Practicable Date, our Group has leased certain properties from our connected persons under various tenancy agreements (the “Tenancy Agreements”), details of which are set out as follows:

Date of tenancy Approximate Total annual Use of agreement Property address Parties GFA rental Term premises (sq.m.) (RMB ’000) 1. January 1, Shop 6, Wenming Road, Landlord: 15,710.15 6,388 January 1, 2017 — Hospital 2017 Shahe Town, Jiuyuan Baotou Chaoju Eye Medical December 31, District, Baotou City Co., Ltd. 2021 (包頭市九原區沙河鎮文明路6號商鋪) Tenant: Baotou City Chaoju Eye Hospital Co., Ltd.

2. January 1, Shop 6, Wenming Road, Landlord: 927 220 January 1, 2018 — Optical 2018 Shahe Town, Jiuyuan Baotou Chaoju Eye Medical December 31, Centre District, Baotou City Co., Ltd. 2022 (包頭市九原區沙河鎮文明路6號商鋪) Tenant: Baotou City Chaoju Optometry Correction Eyeglasses Co.,Ltd.

3. August 1, No.96, North Road, Landlord: 7,662.12 2,880 August 1, 2017 — Hospital 2017 Middle Section of Hada Inner Mongolia Autonomous July 31, 2022 Street, Hongshan Region Red Cross Chifeng District, Chifeng City Chaoju Eye Hospital (赤峰市紅山區哈達街中段路北96號) Tenant: Chifeng Hospital

4. January 1, No.96, North Road, Landlord: 650 223.2 January 1, 2018 — Optical 2018 Middle Section of Hada Inner Mongolia Autonomous December 31, Centre Street, Hongshan Region Red Cross Chifeng 2022 District, Chifeng City Chaoju Eye Hospital (赤峰市紅山區哈達街中段路北96號) Tenant: Chifeng Chaoju Eyeglasses Co., Ltd.

5. August 29, No.1629, Zhonghuan West Landlord: 3,950.18 1,644 August 29, 2019 — Hospital 2019 Road, Jiaxing Mr. Zhang Bozhou, Ms. Zhang August 28, 2024 Economic and Xiaoli, Mr. Zhang Junfeng and Technological Mr. Zhang Fengsheng Development Zone (嘉興市經濟技術開發 Tenant: 區中環西路1629號) Jiaxing Hospital

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Date of tenancy Approximate Total annual Use of agreement Property address Parties GFA rental Term premises (sq.m.) (RMB ’000) 6. January 1, Room 101, 1st Floor, 116 Landlord: 290 670 January 1, 2018 — Optical 2018 Wener Road, Xixi Hangzhou West Lake Chaoju December 31, Centre Street, Xihu District, Eye Hospital 2022 Hangzhou (杭州市西湖區西溪街道文二路116 Tenant: 號一樓101室) Hangzhou Chaoju Optical Eyeglasses Co., Ltd.

7. July 23, 2nd Floor, No.18, South Landlord: 106.24 36 July 23, 2019 — Clinic 2019 Row, Daxi Street, Ms. Zhang Xiaoli July 22, 2024 Saraqi Town, Tumote Right Banner, Baotou Tenant: City, Inner Mongolia Baotou Hospital (內蒙古自治區包頭市土默特右旗薩拉齊鎮大西街南排18號二樓)

8. August 20, 2nd Floor, No.18, South Landlord: 106.24 36 August 20, 2019 — Optical 2019 Row, Daxi Street, Ms. Zhang Xiaoli August 19, 2024 Centre Saraqi Town, Tumote Right Banner, Baotou Tenant: City, Inner Mongolia Tumb Right Banner Chaoju (內蒙古自治區包頭市 Optometry Eyeglasses 土默特右旗薩拉齊鎮大 Co., Ltd. 西街南排18號二樓)

9. August 12, 1st Floor, No.07 Base Landlord: 155.22 130 August 12, 2019 — Optical 2019 Shop, No. (內蒙古自治 Ms. Zhang Xiaoli August 11, 2024 Centre 區包頭市東河區南門外大街路西5號街坊07號 Tenant: 底店一樓) Baotou City Donghe District Chaoju Optometry Eyeglasses Co., Ltd.

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Basis in determining the rental payable

The rental rates were on normal commercial terms determined after arm’s length negotiations based on the prevailing market rates no less favourable to those offered by Independent Third Parties for similar properties at comparable locations.

Reasons for the transactions

Our Group has historically been using the properties under the Tenancy Agreements as our hospitals, eye clinics, optical centers, office and other commercial premises. Having considered that the rent of the properties under the Tenancy Agreements are comparable to the prevailing market rates of comparable properties in the locality, and the additional renovation and associated costs which we may incur if we move out of the properties under the Tenancy Agreements and relocate to another premises, our Directors consider that it is desirable and in the interests of our Company and the Shareholders as a whole to continue using the properties under the Tenancy Agreements.

Accounting treatment of the Tenancy Agreements

Our Group has early adopted IFRS 16 in the preparation of the financial information of our Group during the Track Record Period, pursuant to which, at the commencement date of a lease, our Group as lessee shall be recognized as a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. Accordingly, the lease transactions under the Tenancy Agreements would be regarded as acquisitions of assets by the tenant for the purpose of the Listing Rules.

Implication under the Listing Rules

The Tenancy Agreements were entered into for a term of five years since their respective commencement dates and are required to be aggregated pursuant to Rules 14.22 and 14A.81 of the Listing Rules. As one or more of the applicable percentage ratios (as defined in the Listing Rules) in respect of the aggregated value of the right-of-use of such premises under the relevant Tenancy Agreements was over 5% but less than 25%, the relevant transactions would have constituted (i) discloseable transactions for our Company under Chapter 14 of the Listing Rules; and (ii) connected transactions for our Company under Chapter 14A of the Listing Rules, and would be subject to the reporting, announcement, circular and independent shareholders’ approval requirements should our Company be listed on the Stock Exchange at the time of the relevant transactions.

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