Shimao Property Holdings Limited

Home , Luoyang Bridge, Nanping, Shimao Property, Yongtai County, Yuecheng District

2017 Annuals Results

(Stock Code: 813) www.shimaoproperty.com

27 March 2018 Content

1 Results Highlights

2 Financial Highlights

3 Business Review

4 Future Outlook

5 Experience Sharing

6 Conclusions

7 Appendix

2 Results Highlights Enhance Internal Management to Boost Business Growth

Entering the new phase with strong sales growth

Quality of inventory improved; Industry-leading profitability

Securing strategic land parcels; Expansion of a premium land bank

4 1 Strong Growth of Contracted Sales  Surpassing the contracted sales target of RMB88 billion after the upward adjustment in Aug 17, completion rate 2016 2017 reached 114.5% Contracted y-o-y Growth of Contracted Sales Sales RMB 68.12 47.9% RMB 100.77 billion billion

2016 2017

y-o-y Growth of Contracted ASP Contracted ASP RMB 13,850/ 20.0% RMB 16,623/ sq. m sq. m

2016 2017

Contracted y-o-y Growth of Contracted GFA GFA 4,918,453 23.3% 6,062,186 sq. m sq. m

5 2 Steady Increase in Revenue, Gross Profit and GPM

Gross profit margin increased significantly by 2.8p.p. y-o-y Growth of 18.8% RMB21.43 billion

Revenue Revenue RMB16.35 billion 30.4%

RMB 59.29 billion RMB 70.43 billion 27.6%

2016 2017

 Income from hotels, rentals and investment properties rose 17.5% y-o-y.

Income from Hotels, Rentals and Investment Properties

RMB3.63 billion RMB3.09 billion 2016 2017

Gross profit markedly 2016 2017 increased by 31.1% y-o-y

6 3 Substantial Growth in Core Profit Attributable to Shareholders with Outstanding Profit Margin

 Core Profit Attributable to Shareholder  Operating Profit

RMB y-o-y RMB y-o-y 6.93 Growth of 17.68 Growth of billion 10.9% billion 19.3%

 Excluding the net impact of  Profit Attributable to Shareholders the RMB634 million profit from the disposal of 23.4% RMB y-o-y Beijing Fortune Times y-o-y 7.84 Growth of in 2016 Growth billion 51.6%

 Core Net Profit Margin  Earnings per share

y-o-y y-o-y RMB Growth of Growth of 14.0% 2.324 1.2p.p. 54.3%

7 4 Included in Hang Seng High Dividend Yield Index with Steady Increase in Dividend

2016 2017

HK$1.00 HK76 cents Significant y-o-y per share per share Growth of 31.6%

 Including a final dividend of HK60 cents per share and an interim dividend of HK40 cents per share

Included in Solid Performance Hang Seng High & Dividend Policy Dividend Yield Index

8 5 Expanding Land Bank by Securing Strategic Land Parcels

Total land bank was approximately 47.90 million sq.m. Average land cost Full-year attributable was RMB5,108 new land acquisitions per sq.m. amounted to RMB67.9 billion

Secured strategic premium Sufficient land parcels in land bank in Longgang, Guangdong-Hong Shenzhen and Kong-Macao Cheung Sha Wan, Greater Bay Hong Kong, etc Area

9 6 Steady Growth in Revenue of Shanghai Shimao

In 2017, contracted sales of Shanghai Shimao grew sharply by 45% y-o-y to RMB21.6 billion

In 2017, revenue of Shanghai Shimao rose sharply by 36% y-o-y to RMB18.67 billion

In 2017, profit attributable toShanghai Shimao’s shareholders Increased by 5% y-o-y to RMB2.23 billion

Note : 1.All the data above are excerpted from Shanghai Shimao’s results announcement prepared accordingly to PRC GAAP. 2.The Group holds 58.92% equity interest in Shanghai Shimao. 3.Figures of 2016 have been restated due to restructuring. 10 Financial Highlights Prudent Financial Management with Outstanding Financial Metrics

Ensuring sufficient capital by strengthening cash collection

Maintaining solid capital structure through prudent financial policy

Stable gearing ratios; Improved credit ratings

Lowering financing costs via multiple financing channels

12 1 Increased Cash Collection

Cash Collection Ratio Management of Cash Collection  The Group improved cash collection through 80% clearing old receivables, increasing the cash payment ratio, and implementing quarterly performance rewards and penalties, to ensure it has sufficient capital for steady development. 2017

Cash Collection RMB80.7 billion

2016 Cash Collection RMB60.0 billion

13 2 Sufficient Cash Reserve

 Sufficient capital lays a solid foundation for sustainable growth of the Group.

Unutilised banking facilities approximately RMB20.0 billion

Cash on hand RMB33.0 billion, up 48.4% y-o-y

Approved but unutilised Panda Medium Term Notes

(MTN) RMB8.0 billion 14 3 Solid Debt Structure

RMB 18.2 billion short-term borrowings, accounted for 21% of total Balance of Borrowings RMB 87.5 30.7% billion 21% Up RMB 66.9 billion The structure of Short- and long-term borrowings has remained healthy

79%

RMB 69.3 billion long-term 2016 2017 borrowings, accounted for 79% of total

15 4 Net Gearing Ratio – Stable

65%

5.5 p.p.

60% 58.6% 58.9%  Net gearing ratio was 58.9%, 5.5 57.4% 58.1% p.p. higher than the end of 2016. 55.9% 55%  The Group secured premium 53.4% land parcels in strategic locations in 2017. Net gearing ratio increased mainly for 50% supporting the Group’s quality development.

 Net gearing ratio remained

45% below 60% for six consecutive years, laying a solid foundation for sustainable development of the Group amidst a complicated

40% economic and changing financial 2012 2013 2014 2015 2016 2017 environment. Note 1: Net gearing ratio was calculated based on: Total net borrowings (Total borrowings – Total cash and cash equivalents (including restricted cash)) / Total equity (excluding perpetual capital instruments). Note 2: If total equity includes appraisal increment of totals, adjusted net gearing ratio should be 50.5%, 4.9 p.p. higher than end-2016. 16 5 Increased Scale of Assets

Total Assets Fixed Assets* Total Equity

RMB’ billion RMB’ billion RMB’ billion 307.6

261.9 y-o-y 96.7 Growth 17.4% 88.2 55.7 y-o-y Growth 54.0 9.7% y-o-y Growth 3.2%

2016 2017 2016 2017 2016 2017

* Fixed assets = property and equipment + land use rights + investment properties. Through professional valuation, the market value of major investment properties and hotels reached RMB68.9 billion (end-2016: RMB64.2 billion)

17 6 Extensive Financing Channels Issue of US$1 billion senior notes in 2017 Issued five-year senior notes amounting to US$600 Approval of RMB8.0 billion Panda MTN million in June 2017, becoming one of the few real estate companies On 28 April 2017, the Group become one of the first to issue USD Senior Notes in 1H2017. private real estate companies approved by the National Association of Financial Market Tap issued five-year senior notes amounting to US$400 Institutional Investors (NAFMII) to issue million in December 2017. Panda MTNs. Coupon rate: 4.75% Registered amount was RMB8 billion. Issue of US$500 million senior Multiple notes in January 2018 Issued RMB6.5 billion Shanghai Financing Channels Issued seven-year senior notes amounting International Plaza ABN to Avoid Financial to US$500 million in January 2018 before Risks market fluctuations. On 13 September 2017, the 20-year Coupon rate: 5.2% Shanghai International Plaza ABN was issued at an average interest rate of 4.8%, the lowest in the industry at that time. Issue of RMB950 million senior China’s first-ever commercial property ABN notes in March 2018 for public placement in interbank market. Issued “dim sum bonds” for the first time. The good response reflected the confidence of the capital market in the Group’s business performance and future outlook Coupon rate: 5.75% Approval of US$680 million + HK$5.89 billion Offshore Syndicated Loan Facility A four-year US$680 million + HK$5.89 billion Early Redemption of high-yield senior offshore syndicated loan facility approved. notes

US$800 million and US$600 million of senior notes were redeemed early in Jan 2017 and Jan 2018 respectively. Early redemption of high yield USD senior notes to further lower average financing cost.

18 7 Reduced Financing Costs

2015 6.9%

5.8% 2016

2017 5.3%

 The Group is expanding multi-financing channels. Under multi-pronged measures of financing cost management, financing costs continue to be reduced year by year.

19 8 Improved Credit Ratings

Shimao Property Shimao Jianshe Shanghai Shimao

 In July 2017, Standard & Poor’s  In June 2017, Dagong Credit adjusted  In May 2017, United Ratings adjusted maintained its ‘BB+’ rating for Shimao the issuer rating of Shimao Jianshe from the issuer rating of Shanghai Shimao Property, and revised “AA+” to “AAA”. from “AA+” to “AAA”. its outlook from Negative to Stable. Stable AAA AAA

Negative AA+ AA+

Issuer Ratings of Shimao Property – Offshore Issuer Ratings of Shimao Property – Onshore

BB+ Stable AAA

Ba2 Stable AAA

BBB- Stable (Investment grade) AAA 20 Business Review Revenue Breakdown

Revenue Breakdown Recognized Sales by City* – RMB66.8 billion

RMB’ million

80,000 1,242 Pingtan 5.0% Tianjin 5.0% 680 Quanzhou 5.4% 70,426 1,708 Jinan 5.0% 70,000 66,796 913 Fuzhou 5.7% 710 Wuhan 4.6% 59,286 1,466 60,000 56,197 Zhangjiagang 3.7% Qingdao 6.2% 50,000 Chengdu 3.7%

40,000 Hangzhou 3.2% Beijing 7.3%

30,000 Hefei 3.1%

Chongqing 3.0% 20,000 Shaoxing 2.5% Xiamen 9.3%

Suzhou 2.4% 10,000

Xi’an 2.1% 0 Nanjing 12.3% Yinchuan 2.1% 2017 2016

Property sales Rental income Other 14 cities 8.4% Income from hotel operation Others

* Excluding attributable revenue from joint ventures & associated companies

22 Breakdown of Income from Hotel Operation and Investment Properties

For the Year Ended 31 December Turnover from Hotel Operation and Investment Properties

RMB’ million RMB’ million 2017 2016 Change(%) 4,000 3,630 3,500 Income from hotel operation 1,708 1,466 16.5% 3,089 3,000 34%

Rental income 680 710 -4.2% 2,500 30% 19% 2,000

Others 1,242 913 36.1% 23% 1,500

1,000 Total 3,630 3,089 17.5% 47% 47% 500 Excluding income from Beijing Fortune Times and Shanghai 3,593 2,918 23.1% 0 2017 2016 Shimao International Plaza Income from Rental income Others hotel operation

 Rental income decreased by 4.2% y-o-y because Shanghai Shimao sold Beijing Fortune Times to Leshi Holdings in May 2016, and Shanghai Shimao International Plaza has been under renovations since 2017.

 Other income is mainly derived from property management and rose by 36.1% y-o-y to RMB1,242 million in 2017.

 Excluding the impact of Beijing Fortune Times and Shanghai International Plaza, income from hotel operation, rentals and others rose by 23.1% y-o-y. 23 Hotel Operations

Turnover EBITDA Number of Month of Hotel (RMB’ million) (RMB’ million) Rooms Commencement 2017 2016 2017 2016 The Yuluxe Sheshan, Shanghai 325 Nov 2005 164 162 69 62 Le Royal Méridien Shanghai 770 Sep 2006 345 357 142 148 Hyatt on the Bund Shanghai 631 Jun 2007 388 368 154 141 Mudanjiang Holiday Inn 265 Dec 2010 33 30 10 8 Shaoxing Shimao Holiday Inn 284 Sep 2011 28 26 11 7 Hilton Nanjing Riverside 411 Dec 2011 98 92 27 21 DoubleTree by Hilton Hotel Wuhu 442 Oct 2013 63 59 13 8 Intercontinental Fuzhou 318 Jan 2014 97 97 26 17 Crowne Plaza Shaoxing 453 Mar 2014 73 88 18 23 Yuluxe Hotel Taizhou 262 Aug 2014 31 25 3 -1 Hilton Tianjin Eco City 301 Apr 2015 46 35 2 -3 DoubleTree by Hilton Ningbo Chunxiao 220 Dec 2015 25 18 1 1 Hilton Wuhan Riverside 338 Jul 2016 99 33 27 4 Conrad Xiamen 241 Aug 2016 133 34 39 4 Double Tree by Hilton Ningbo Beilun 194 Dec 2016 39 - 16 - Hilton Yantai 252 Aug 2017 18 - -1 - Others* 780 28 42 1 5 Total 6,487 1,708 1,466 558 445

 Turnover amounted to RMB 1,708 million in 2017, representing a y-o-y increase of 16.5%. The increase in turnover was primarily derived from the newly opened hotels in the past two years.  EBITDA of hotel operations amounted to RMB558 million, representing a y-o-y increase of 25.4%. EBITDA margin increased by 2.3p.p. from 30.4% to 32.7%.  In March 2017, Shimao and Starwood Capital signed a comprehensive strategic partnership agreement to explore boutique hotel market in China. Currently the partner hotels in operation mainly include MiniMax Hotel Shanghai Songjiang, MiniMax Premier Hotel Shanghai Hongqiao, MiniMax Hotel Xiamen Central and MiniMax Premier Chengdu Downtown. 24 Investment Properties – Commercial and Office Premises

Commercial and Total GFA Month of Turnover EBITDA Office Premises (m2) Commencement (RMB’ million) (RMB’ million) 2017 2016 2017 2016 Phase I – Dec 2004 Shanghai Shimao International Plaza 71,239 37 136 6 79 Phase II – May 2007 Changshu Shimao The Centre 43,357 Commercial – 1Q2009 23 17 9 8 Beijing Shimao Tower 70,175 Jul 2009 154 146 94 87 Wuhu Shimao Riviera Garden (Commercial) 19,963 Sep 2009 8 8 3 2 Beijing Fortune Times 49,147 2010 - 35 - 15 Shanghai Shimao Shangdu Tower 9,584 Nov 2010 35 32 13 9 Shaoxing Shimao Dear Town 181,605 May 2010 83 85 42 45 Suzhou Shimao Canal Scene 49,993 Jun 2010 33 34 15 12 Kunshan Shimao Plaza 88,249 Apr 2012 44 41 26 24 Xuzhou Shimao Dongdu (Commercial) 59,471 Jan 2012 14 15 5 4 Jinan Shimao International Plaza 280,641 May 2014 115 99 72 60 Nanjing Straits City (Commercial) 65,719 Dec 2014 29 20 7 10 Quanzhou Shishi Shimao Skyscraper City 156,335 Jan 2017 37 - 18 - Xiamen Shimao Straits Mansion (Commercial) 37,261 Jan 2017 25 - 13 - Miscellaneous rental Income 43 42 5 10 Total 680 710 328 365

Total (Excl. impact of Beijing Fortune Times and Shanghai Shimao International Plaza) 643 539 322 271

 Rental income from investment properties decreased by 4.2% to RMB680 million, mainly due to Shanghai Shimao‘s disposal of Beijing Fortune Times to Leshi Holdings in May 2016, causing a rental loss of RMB35 million. In addition, Shanghai Shimao International Plaza began renovation in 2017, resulting in a temporary decline in rental income of RMB99 million in 2017. Excluding the impact from Beijing Fortune Times and Shanghai Shimao International Plaza, rental income increased by 19.3% y-o-y.  Excluding the impact from Beijing Fortune Times and Shanghai Shimao International Plaza, EDBIDA from investment properties increased by 18.8% y-o-y to RMB322 million, with an EBITDA margin of 50%. 25 Nationwide Quality Land Reserve

Land reserve in 47 cities, 165 projects, covers a GFA of 47.90 million sq. m (as at 31 December 2017). The Group has sufficient reserves of salable resources in hot regions nationwide valued over RMB800 billion to meet the continuously growing demand in the future.

Western District Northern China District Shandong District

Chengdu Shimao City Yinchuan Yuehai Project Beijing Yinghai Project Beijing Xietieying Project Qingdao Shimao Jinan The Capital of Yuanshan Chongqing Runyijiang Project Xi’an Weiyang District Beichen Project Beijing Yidu Project Tianjin Eco-City •Harbin Noble Town Jinan Xiaoya Parcel Tianjin Wuqing Luxury Mansion Beijing Tongzhou Yangzhuang Project Jinan Shimao Jinan Huaiyin District Central China District Gu’an Project Beijing Shangzhuang Skyscraper City Meili Road Parcel

Wuhan Caidian Parcel Wuhan Shimao Carnival Tianjin Jinnan Project •Mudanjiang Jinan Zhangqiu District New #4 Jinan Zhangqiu District (46#, 1-3 parcel, new parcel) Changsha Plaza Middle School Parcel Nangaobu Parcel Hefei Gaoxin New Project Nanchang Shimao The Grand View Qingdao International Plaza Qingdao Shimao Noosa Bay Hefei Shimao Jade Mansion Wuhan Shimao Splendid River

Wuhan Shimao Cloud Value •Shenyang Nanjing District •Dalian •Beijing Southern China District NJ Shimao Bund New City NJ Jianye Jiangdong No. 5 •Tianjin SZ Quanhai Shimao Financial Centre Guangzhou Finance City Nanjing Jiangpu G24 Project Nanjing Pukou Royal Real •Yantai Foshan Green Island Lake •Jinan •Yinchuan •Qingdao Xuzhou Shimao Dongdu Nanjing Straits City Shenzhen Longgang Project Guangzhou Zengcheng

Foshan Qicha 03, 04 Parcel •Xuzhou Jiangsu and Shanghai District •Xi’an •Nanjing Fujian District Shanghai •Hefei Shanghai Luodian Project Shanghai Songjiang Project •Wuhan •Wuhu •Hangzhou Shishi Shimao Skyscraper City Pingtan Straits Future City •Ningbo •Chengdu Shanghai Luojing Project Nantong mixed-use project •Chongqing Xiamen Jimei Shine City Fuzhou Lianpan •Nanchang SZ Bronze Swallow Terrace SH Zhoupu Shimao Cloud Atlas •Changsha Quanzhou Luojiang Fuzhou Licuoshan Project Kunshan Parcel SZ Shimao Shihu Bay Quanzhou Quangang Project Fuzhou Changle Jinfeng 3-4 Parcels •Fuzhou Zhangjiagang Shimao Lake Palace •Quanzhou Fuzhou Fuqing 01, 03 Parcels Fuzhou Yongtai Project •Xiamen Zhejiang District Quanzhou Nan’an Fanhua Project Fuzhou Jinrong Street Project •Nanning •Guangzhou •Shenzhen Zhangzhou Changtai Longrengugin Xiamen Xiang’an XP13, XP14 Project •Hong Kong Jiaxing Science & Shaoxing Yuecheng District Cultural Village Technology City Qingdian Lake Project Fuzhou Guihu Longtou Jinjiang Dongshi Parcel Yuan Parcel II Hangzhou Gate of Zhejiang Shaoxing Didang Lake No.1 Hangzhou Pengbu Project Shaoxing Renmin Road Quanzhou Nan’an Guanqiao Quanzhou Luoyang Bridge Project •Wenchang Aileyufu Project Xiamen Tong’an T2017P01, 04 Parcels Ningbo Sunjia Hangzhou Born with Legend HKSAR Fuzhou Jin’an District Houlong Fuzhou City 108 Building Project Community Parcel II Quanzhou Jinjiang Project Kowloon Tai Wo Ping New Kowloon Inland Quanzhou Shimao Hi Dream Quanzhou Zimaoshan Project Tung Chung Project Lot No. 6549 Parcel Group HQ 26 Note: Only major projects are listed. Land Acquisitions in 2017

Attributable Land Cost Month of Group’s New Land Parcels Usage Land Cost Total Planned GFA per m2 Acquisition Interest (RMB’ million) (m2) (RMB/ m2 )

1. Shanghai Baoshan District Jan 2017 Commercial and 516 23.0% 136,852 16,405 Luodian Parcel Residential 2. Shanghai Baoshan Jan 2017 Residential 1,204 51.0% 100,556 23,469 Luojing Parcel 3. Xiamen Xiang’an District Feb 2017 Residential and 995 100.00% 34,300 29,009 XP13 Parcel Commercial Ancillary 4. Xiamen Xiang’an District Feb 2017 Residential and 972 100.0% 33,500 29,015 XP14 Parcel Commercial Ancillary 5. Guangzhou Zengcheng Mar 2017 Residential 1,436 33.0% 300,000 14,500 Zhangpo Village 6. Wuhan Caidian Parcel Apr 2017 Commercial Service 155 100.0% 50,924 3,040 7. Xi’an Weivang District Apr 2017 Residential 1,217 50.0% 811,000 3,000 Ljiun Future City Parcel 8. Fuzhou Guihu Longtou Apr 2017 Residential 557 100.0% 88,872 6,267 Yuan Parcel II 9. Quanzhou Luoyang River Project Apr 2017 Residential 392 100.0% 76,495 5,125 10. Beijing Tongzhou Xincheng May 2017 Residential and 1,374 100.0% 45,600 30,133 Yangzhuang No. 12 Project Public Facilities 11. Quanzhou Quangang Parcel May 2017 Residential 115 51.0% 306,336 734

12. Foshan Chan City May 2017 Residential, Commercial 1,049 100.0% 83,891 12,500 Green Island Lake Parcel and Office 13. Jiaxing Science and May 2017 Residential 540 40.0% 148,041 9,125 Technology City Parcel

27 Land Acquisitions in 2017 (cont’d)

Attributable Land Cost Month of Group’s New Land Parcels Usage Land Cost Total Planned GFA per m2 Acquisition Interest (RMB’ million) (m2) (RMB/ m2 )

14. Jianxing Xiuzhou District May 2017 Commercial and 479 30.0% 159,361 10,017 No.14 Parcel Residential 15. Kunshan Residential and May 2017 Residential, Commercial 1,275 51.0% 360,000 6,944 Commercial Parcel and Office 16. Kunshan Commercial Parcel May 2017 Commercial 84 51.0% 66,000 2,500 17. Fuzhou Changle Jinfeng Town May 2017 Residential 180 100.0% 52,705 3,415 No.3 Parcel 18. Fuzhou Changle Jinfeng Town May 2017 Residential and 390 100.0% 115,500 3,377 No.4 Parcel Commercial Ancillary 19. Wuvishan Project May 2017 Residential, Integrated 139 100.0% 27,795 4,991 Commercial and Residential, Golf Course 20. Foshan Chan City Jun 2017 Residential and 1,203 50.0% 192,530 12,500 Qicha 003 Parcel Commercial Ancillary 21. Fuzhou Fuqing 2017 Jun 2017 Residential and 540 100.0% 102,073 5,290 Pai-01 Parcel Commercial Ancillary 22. Fuzhou Fuqing 2017 Jun 2017 Residential 698 100.0% 137,841 5,067 Pai-03 Parcel 23. Chongqing Runyijiang Jun 2017 Residential, Commercial 2,928 100.0% 516,700 5,667 Zhishang Lianbang Project and Office 24. Jinjiang Dongshi Parcel Jun 2017 Residential 130 60.0% 177,295 1,222 25. Jinan Zhangqiu District Jun 2017 Residential 433 60.0% 112,399 6,415 Nangaobu Parcel 26. Zhangqiu District New No.4 Jun 2017 Residential 372 16.5% 424,406 5,312 Middle School Parcel

28 Land Acquisitions in 2017 (cont’d)

Attributable Land Cost Month of Group’s New Land Parcels Usage Land Cost Total Planned GFA per m2 Acquisition Interest (RMB’ million) (m2) (RMB/ m2 )

27. Suzhou Yuanhe Street Parcel Jun 2017 Residential 1,783 33.0% 280,298 19,280 28. Foshan Chan City Jun 2017 Residential and 500 50.0% 79,990 12,500 Qicha 004 Parcel Commercial Ancillary 29. Xiamen Tong’an Jun 2017 Commercial and 813 34.0% 119,160 20,074 T2017P01 Parcel Residential 30. Xiamen Tong’an Jun 2017 Residential and 885 50.0% 88,100 20,091 T2017P04 Parcel Commercial Ancillary 31. Zhangzhou Changtai Jun 2017 Residential 330 65.0% 97,382 5,213 Longrenguqin Cultural Village 32. Nanjing Pukou G24 Parcel Jul 2017 Residential 2,490 50.0% 251,206 19,824 33. Beijing Fengtai District Jul 2017 Commercial and 4,722 60.0% 193,846 40,599 Xitieying Village Parcel Residential 34. Shaoxing Yuecheng District Jul 2017 Commercial and 1,410 100.0% 294,411 4,789 YC-04 Unit (Xiguo District) A-09 Residential 35. Beijing Daxing District Jul 2017 Residential and 1,437 30.0% 133,506 35,879 Yinghai Town Parcel Educational 36. Fuzhou Jin’an District Jul 2017 Residential 148 100.0% 19,186 7,714 Houlong Community Parcel II 37. Beijing Laishui Parcel I Aug 2017 Residential 81 100.0% 104,403 775 38. Beijing Laishui Parcel II Aug 2017 Residential 3 100.0% 3,633 763 39. Shaoxing Didang Lake Sep 2017 Residential 595 25.2% 222,694 10,598 No.1 Parcel 40. Fuzhou Yongtai County Sep 2017 Residential, 1,399 80.0% 768,220 2,276 Scenery Legend Project Commercial and Hotel

29 Land Acquisitions in 2017 (cont’d)

Land Cost Total Planned GFA Land Cost Date of Group’s New Land Parcels Usage (Net of Interest) (before Interest) per m2 Acquisition Interest (RMB’ million) (m2) (RMB/ m2 )

41. Jiaxing Jingkai Sep 2017 Residential 386 50.0% 96,049 8,030 2017-14 Parcel

42. Quanzhou Nan’an Oct 2017 Commercial and 646 55.0% 403,132 2,912 downtown Fanhua Project Residential

43. Fuzhou City 108 Building Oct 2017 Commercial and 1,530 100.0% 313,698 4,877 Project Residential

44. Quanzhou Nan’an Guangiao Oct 2017 Residential and 307 51.0% 151,329 3,980 Aileyufu Project Commercial

45. HKSAR New Kowloon Mainland Nov 2017 Residential 3,296 22.5% 91,770 159,638 Lot No.6549 Parcel

46. Shanghai Jinshan Development Nov 2017 Residential 275 33.0% 87,219 9,569 Park Parcel

47. Shanghai Songjiang District Nov 2017 Residential 618 33.0% 69,289 27,046 Zhongshan Street Parcel

48. Jinan Huaiyin District Dec 2017 Residential 630 50.0% 131,625 9,573 Meili Road Parcel

49. Shenzhen Longgang Dec 2017 Commercial and 23,943 100.0% 1,364,500 17,547 Project Residential

50. Fuzhou No.2017-41 Taijiang Dec 2017 Commercial Service 86 20.0% 37,267 11,538 District Jinrong Street Parcel (Commercial and Office)

51. Changchun Lianhuashan Project Dec 2017 Residential 264 62.5% 539,269 784 No.82-87 Parcel

Total 67,949 10,602,153 10,861

Note: Data as at 31 December 2017. 30 Nationwide Quality Land Reserve

2 m As at 31 December 2017 Saleable Value of Reserve in Popular Regions

District Total GFA Attributable GFA Saleable Northern China District 8,465,879 7,518,750 Popular Region Value Key Cities (RMB’ billion) Zhejiang District 3,241,615 2,217,211 Shandong District 1,482,473 838,376 Yangtze River Delta 200 Shanghai, Hangzhou, Region Nanjing, Suzhou, Ningbo Jiangsu and Shanghai District 4,415,791 2,344,183 Nanjing District 1,992,065 1,5595,628 Guangdong-Hong Kong- 200 Hong Kong, Shenzhen, Macao Greater Bay Area Guangzhou, Foshan Central China District 2,909,684 2,194,518 Western District 4,243,942 3,635,002 Fujian 150 Fuzhou, Xiamen, Quanzhou Fujian District 9,085,748 7,325,356 Northern China Region 150 Beijing, Tianjin

Southern China District 2,971,278 2,259,670 Others 100 Chengdu, Xi’an, Wuhan, Sub-total (Districts directly 38,808,475 29,928,694 Hefei etc. under Shimao Property) Total 800 Shanghai Shimao (823) 4,428,334 3,793,796 Joint Venture 4,665,997 1,249,578 Total 47,902,807 34,972,068

As at 31 December 2017 (million m2)

Northern Completed and unsold Inventory / Held as China investment property (1.22+2.30) 3.52 Yangtze River Properties under construction 20.23 Delta

Future developments 27.67 Fujian Total GFA 47.90 Guangdong- Average attributable land cost (RMB/m2) 5,108 Hong Kong- Macao 31 Analysis of Operation – Costs Analysis

Development Investment Y-O-Y change RMB’ million 2017 2016 Properties (2017) Properties (2017) (%)

Selling & marketing costs 1,462 1,081 329 1,352 8.14%

Administrative expenses 2,990 2,019 868 2,743 9.00%

SG&A 4,452 3,100 1,197 4,095 8.72%

Recognized revenue 70,426 66,796 2,388 59,286 18.79%

SG&A / recognized revenue 6.32% 4.64% 50.13% 6.91% Down 0.59 p.p

SG&A 4,452 3,100 1,197 4,095 8.72%

Contracted sales 104,400 100,773 2,388 71,209 46.61%

SG&A / contracted sales 4.26% 3.08% 50.13% 5.75% Down 1.49 p.p

 In respect of development properties, the SG&A / recognized revenue ratio was 4.64% (5.12% in 2016), and the SG&A / contracted sales ratio was 3.08% (4.22% in 2016), which were attributable to the Group’s significant sales growth in 2017 and efficient internal cost controls. Such metrics highlight the Group’s competitiveness and advantage over its peers.

 In 2017, income from investment properties accounted for 3.39% of total recognized revenue. In terms of expenses, this segment accounted for 26.89% of total expenses, due to applicable accounting practices such as depreciation.

32 Future Outlook - Operations The Group’s 2018 Operation Targets

RMB’ million

2018 Annual Targets 2017 Actual 2017 Planned

Contracted sales 140,000 100,773 80,000

Cash collection and net rental income 112,000 80,712 70,400

Payment of land premium 75,000 67,616 32,200

Payment of construction cost 32,000 19,410 24,000

Other expenses 29,500 18,994 19,200 (including tax, interest and period costs)

Net Operating Cash flow -24,500 -25,308 -5,000

34 2018 Saleable Resources

Key Projects Available for Sale in 2018 worth over RMB1.5 billion Product Breakdown Districts Saleable GFA (m2) Quanzhou Nan’an Fanhua Project 241,824 Fuzhou Fuqing Shimao Shine City 95,504 Fujian District Fuzhou Lianpan 139,200 Xiamen Xiang’an New Project 85,934 Fuzhou Jinan New Project 149,319  Saleable resources will total approximately 13.73 million sq. m. in Shanghai Zhoupu Project 35,902 Jiangsu and Shanghai 2018 (excluding the resources from new land acquisitions in 2018). Wuxi Shimao The Capital 140,979 District Assuming a conservative ASP of RMB17,000/sq.m., the total value of Zhangjiangang Shimao Lake Palace 200,708 the saleable resources would be RMB233.5 billion. Based Beijing Yidu Project 210,272 on an expected sell-through rate of approximately 60%, the Group Northern China District Tianjin Jinnan Project 166,946 estimates its contracted sales to reach RMB140.0 billion in 2018.

Southern China District Guangzhou Zengcheng Project 28,149 Wuhan Dragon Bay New City 234,957 Central China District Hefei Gaoxin New Project 93,025 Nanjing Bund New City 164,268 Nanjing District Nanjing Hexi Jianye G11 Project 146,320

Ningbo Yaojiang New Town 85,590 Zhejiang District Jiaxing Science & Technology City Project 79,698 Hangzhou Pengbu Project 89,871 Historical Saleable GFA & Sell-through rates Chengdu Shimao City 266,541 Western China District Chongqing Runyijiang Project 217,772 Yinchuan Shiyue Mansion 166,987 million sq. m. Qingdao Noble Town 232,997 Shandong District 16 70% Jinan Xiaoya Project 78,492 14 60% Xiamen Jimei 34,978 12 50% Shanghai Shimao (823) Shenzhen Qianhai 44,096 10 Jinan Shimao Skycraper City 52,721 40% 8 30% 6 13.73 Key projects available for sale in 2018 worth over RMB1.5 billion 4,432,178 10.17 4 9.30 9.52 8.23 20% Key projects available for sale in 2018 worth below RMB1.5 billion 6,600,109 6.06 Completed inventory 1,221,083 2 5.55 4.92 10% Projects available for sale as at end December 2017 1,477,113 0 0% 2015 2016 2017 2018 Total 13,730,483 Saleable GFA Contracted GFA Sell through rate 35 New Corporate Structure of Regional Companies – Empowering and Nurturing “Incentive” and “ Scale Chain”

Service Centre Profit Centre

Setting Production & Design Target Execution Operations Cost Supervision, Investment & Biz Control & Alerts Group Regional Development Engineering Finance Companies Adjusting Nurturing Sales Guidelines Talent Audit Customer Resources Building Allocation Structure Staff

Roles and Responsibilities – Group Roles and Responsibilities – Regional Companies

 Service Provider – Brand, resources, profession,  Operator – Overall planning, self-financing & fair expertise shares of profits, decision-making

 Supervisor – Supervision, alerts, inspection, regulation

36 Regional Companies – Compete on the Same Stage, Eliminate the Weakest

 Adopting market-oriented approach, regional companies operate on a highly competitive platform. The weakest will be eliminated, so real “quality growth” can be achieved.

Capital Injection Regional Regional Regional Regional Company Vs Company Company Company

A B A Loan B

Same Land Parcel Same Land Parcel

Timing of Capital Injection: Loan: Receiving IRR Positive Margin Cash flow Share of Interest Interest Income

 Two regional companies compete with proposals and  Regional companies with sufficient capital may inject products at land acquisitions meetings. The Group will capital into or lend capital to other regional companies. assess on three main metrics: margin, IRR and timing They could either receive 10% interest income by of positive cash flow. The winner can participate in the lending or share the results and bonus by capital land acquisition. injection.

37 Sophisticated Subdivision of Operations – Principles of Assessment

 To nurture the operational mindset of regional companies: active and highly efficient, capabilities cultivation, fierce competition.

Management Statement of Regional Companies

Resources Profit “Resources Check” “Dynamic Effect” Available saleable resources Dynamic sales profit Bulk assets Dynamic booking profit

Receivables and capital Profit

To ensure it has sufficient Operational results should resources to achieve the match bonus awards target and sustainable High High development Turnover Efficiency

Assets Operations Pace Risks High Low Pace Quality Leverage “Cash Is King” “Resources Supply”

Determines whether it can Capital Strict control on various acquire land critical chains Capital available for land Standardization acquisitions

Development scale should match efficiency Strict control on critical paths to reach of capital the operational goals 38 Sophisticated Subdivision of Operations – Principles of Awarding Bonuses

 More incentives for regional companies due to changes in the bonus policy.

Business AgencyAgency Business BasicBasic BonusBonus andand SupplementarySupplementary ConstructionConstruction // Penalties Along BonusBonus Bonus Management Penalties Along Bonus Management + EntireEntire IndustrialIndustrial + + FeeFee Chain Chain

AgencyAgency ConstructionConstruction ManagementManagement FeeFee FeeFee

Constructed by internal Constructed by professional companies external companies (hotels, theme parks, commercial)

39 Introduction of Major Hotels under Shimao Group (1)

Conrad Xiamen

InterContinental Shanghai Wonderland (to be opened in 2018)

This hotel project attracts global spotlight, being the first super five-star “pit” hotel built 80 m below sea level, the lowest man-made in the world and first-of-its-kind in China. There are a total of 19 levels, with 17 levels below sea level, and 2 submerged in the water. The rooms under water are aquarium-like and give guests the experience of right there in the ocean. Laser water shows, helicopter rides, global renowned branded spa treatments, international luxury exhibits, theme park, rowing activities are all major attractions. No. of rooms: 336 Facilities: Aquarium-like under-water rooms & a 850 sq. m. ballroom

40 Introduction of Major Hotels under Shimao Group (2)

The Sheraton in Tung Chung, Hong Kong Conrad Xiamen (to be opened in 2019)

No. of rooms: 218

The Four Points in Tung Chung, Hong Kong (to be opened in 2019)

No. of rooms: 1,003

InterContinental Shanghai Wonderland

The two hotels in Tung Chung occupy a prime location along a beautiful waterfront promenade. To the North is the Hong Kong-Zhuhai-Macau Bridge, and to the South is a luxurious residential area Coastal Skyline. The hotels are just 15 minutes’ walk from Tung Chung MTR station and 5 minutes’ drive from the Hong Kong International Airport. There is a retail mall on 1st and 2nd level, and will bring first-class shopping experience to both business and leisure travelers alike.

The two hotels will be the single largest hotel unit under Shimao Group, and will also generate the highest revenue.

41 Introduction of Key Commercial Projects under Shimao Group (1)

Shimao’s commercial projects are mainly in prosperous coastal areas, and are also in economically developed inland cities. It has projects in CBD of first- and many second-tier cities. Newly added key projects in 2017 & 2018

Shenzhen Pingshan Shenzhen Longgang Universiade Fuzhou City 108 Building Project Project Project

800m new landmark in Shenzhen Shenzhen Longgang Universiade Fuzhou Minjiang North Bund CBD Pingshan New District CBD large-scale mixed-use project landmark building

Commercial Office Commercial Office Commercial Office

2 2 GFA: 30,100 m2 77,000 m2 GFA: 266,000 m2 433,000 m2 GFA: 40,000 m 200,000 m

Planned Launch: 2020.12 2022.5 Planned Launch: 2021.12 2022.10 Planned Launch: 2021.12 2023.12

42 Introduction of Key Commercial Projects under Shimao Group (2)

CommercialShishi Shimao Projects Jinan Shimao Commercial Projects Nanjing Shimao SCC

Skyscraper City Plaza (Commercial) Commercial

Shanghai Shimao Shaoxing Shimao ShaoxingInternational Shimao Plaza Shishi Shimao Jinan Shimao Plaza Plaza Plaza Skyscraper City

Commercial landmark in business area of Nanjing

East Road, Shanghai Office

Beijing Shimao Shenzhen Shanghai Tower Qianhai Shimao Binjiang Nanjing Shimao Center Building Shimao SCC (Office)

43 Future Outlook - Sales Review of 2017 – Sales Performance

 Contracted sales exceeded RMB100.0 billion in 2017, representing 114.5% of our target. We see notable improvement in quality of sales, with profit margin increasing by 2 p.p. to 17%. The growth in contracted sales reflects the Group’s entry into a high-growth phase.

Contracted Sales (RMB’ billion) Contracted Sales Profit Margin

Increased by 2 p.p.

48% 17% 100.8 15%

80.0 68.1

2016 2017 2017 2016 2017 Actual Planned Actual Target

45 Review of 2017 – Sales Performance

 Overall sell-through rate of saleable resources was 6p.p. higher than in 2016. Sell-through rates of new supply and inventory increased by 1p.p. y-oy and 3p.p. y-o-y, respectively.

Overall sell-through rate Sell-through rate of new supply of saleable resources

Increased by 6p.p. 75% 76% +1p.p.

65% 59% 2016 2017

Sell-through rate of inventory +6p.p.

46% 49% +3p.p.

2016 2017 2016 2017

46 Review of 2017 – Structure of Saleable Resources

 As at the end of 2017, the proportion of inventory of more than two years over total inventory dropped by 21%. The value of this segment dropped to RMB 15.1 billion.

 The structure of inventory at the beginning of 2018 continued to be optimized, with the segment within 1 year accounting for 46% of total. The supply structure is more reasonable and healthy.

Inventory Structure (RMB’ billion) New Supply / Inventory Ratio

RMB’ billion Within 1 year 43.5 1 - 2 years 41.2 More than 2 years New supply during the year 5 12.8 29% 2018 ≈ 5 Inventory at the 19.2 46% beginning of the year 11 5.7 13% New Supply / Inventory Ratio 6.9 17% 25.0 58% New supply 15.1 37% during the year 22 2017 ≈ Inventory at the 1 Inventory at Inventory at beginning of the year 1 the beginning the beginning of 2017 of 2018

47 Review of 2017 – Cash Collection

 In 2017, amidst banks’ tighter mortgage quota and the restrictions on online contract filing in certain cities, the Group’s cash collection still rose by 35% y-o-y to RMB80.7 billion. The percentage of cash payment increased by 10 p.p. to 63%. Cash collection ratio reached 80%, ranking high among peers.

Cash Collection Increased % of cash payment

Cash RMB’ billion Mortgage 80.7 100% 60.0

+35% RMB32.0 53% RMB50.8 billion 63% billion +10 p.p.

47% 37%

2016 2017 2016 2017

48 Sales Target for 2018

 Sales target for 2018 is RMB140.0 billion, 39% higher than in 2017.

 Given that more land parcels were acquired in 2017, the Group plans to increase its new supply to RMB192.3 billion in 2018.

 We are confident to beat the annual sales target of RMB140.0 billion if the overall sell-through rate in 2017 of 60% can be maintained.

Contracted Sales Target (RMB’ billion) Planned Saleable Resources (RMB’ billion)

Increased by 49%

233.5 41.2

192.3 140.0

100.8 39%

Total Value Inventory at New supply of Saleable the beginning 2017 2018 Resources of the year

49 Cash Collection Target for 2018

 Cash collection target for 2018 is RMB112.0 billion, 39% higher than in 2017. We aim to achieve a collection ratio of 80%, which is flattish from 2017.

 With regard to the cash collection target, RMB20.0 billion will come from receivables and RMB92.0 billion from new contracted sales. According to 2017’s cash collection performance, we are confident to meet the target.

Cash Collection Target Cash collection of Receivables (RMB’ billion) in 2018 (RMB’ billion)

Aim to lift Cash Collection by 49% 24.7 20.0

140.0 Receivables Cash collection 112.0 of receivables

80.7 Cash Collection from New Sales (RMB’ billion) 39% higher than 140.0 2017 92.0

Cash Cash Contracted collection in collection sales in 2017 in 2018 2018 New sales Cash collection

50 Sales Strategy for 2018 – Strategy 1: Focus on Key Cities

 In 2018, the overall supply will be evenly distributed. Sales from 1st and strong 2nd tier cities with good supply-demand dynamics are expected to account for around 60% of total sales, while weaker 2nd tier, 3rd and 4th tier cities around 40%.

 The Group expects the sales in 1st and 2nd tier cities to rebound in 2018. Each core city is expected to contribute more than RMB10.0 billion of sales, ensuring both the sales and profits targets to be met.

2018 Planned Contracted Sales by City-Tier 2018 Beijing RMB15.0 bn+

Fuzhou RMB15.0 bn+

22% st Guangzhou/Shenzhen RMB15.0 bn+ Weak 2nd tier cities + 1 tier cities + strong 2nd tier cities 3rd and 4th tier cities Xiamen RMB12.0 bn+ Total 60% Total 40% 40% Planned Quanzhou RMB12.0 bn+ contracted sales Nanjing RMB10.0 bn+

Shanghai RMB10.0 bn+ 38% Hangzhou RMB10.0 bn+

……

51 Sales Strategy for 2018 – Strategy 2: Continued Advancement of Product Competitiveness  In 2018, there will be 76 projects under our standard product series, which accounts for 78% of all projects. After the launch of “Shine” and “Classic Chinese Chic” product lines in 2017, two ultra luxury product lines “Glory” and “Royal” will be launched in 1H2018. The new product series launches boost Shimao’s brand awareness in the market, resulting in product price premiums and improved competitiveness. Coverage of Standard Product Series Rose New Product Launch Events (Shimao’s ultra luxury product lines)

Standard Product Series Standard Product Series Projects in 2017 Projects in 2018 MAY JUNE 52% of all projects 78% of all projects

22%

High-end Supreme 48% 52% apartments villas “Glory” “Royal” 78% Note: Standard Product Series Includes “Cloud”（雲系）, “Shine”（璀璨系）, “Glory”（天譽系）, “Classic Chinese Chic”（國風系）and Non-standard Products Standard Products “Royal”（龍胤系）etc.

52 Sales Strategy for 2018 – Showcase of “Shine” & “ Classic Chinese Chic” Already Launched

Jiaxing Shimao Shine City Beijing Gu’an Shimao Shine City

Xiamen Jimei Shimao Shine City Fuzhou Guling Shimao Classic Chinese Chic

Wuhan Shimao Classic Chinese Chic Fuzhou Shimao Classic Chinese Chic

53 Sales Strategy for 2018 – Showcase of Ultra Luxury “Glory” & “Royal”

Nanjing Shimao Glory Nanjing Shimao Glory

Hangzhou Shimao Qiantang Glory Hangzhou Shimao Qiantang Glory

Beijing Shimao Xishan Royal Suzhou Shimao Gusu Royal

54 Sales Strategy for 2018 – Strategy 3: Shimao “Big Brand Strategy”

 The Group implemented the “Shimao Big Brand Strategy” to continuously increase brand popularity. The strategy is circled around different dimensions including product competitiveness, diversified businesses, and strategic layouts, so as to upgrade brand image and value, ultimately resulting in brand premium.

Integrated Brand Shimao will present a series of key mind-blowing events in 2018 Promotion from 4 Companies and 9 Regions

Commercial

Trial-run of Re-opening of Launch of Launch of Opening of Opening of Hotels InterContinental Shanghai “Glory” product “Royal” product Shanghai Shimao Shanghai Hello Shanghai Shimao Int’l line line Binjiang Building Kitty Land Wonderland Plaza Theme Parks Architectural Traffic of over New wonders International 1 million; Presenting Scarce headquarter; Property Management attracting IP; New hip Landmark in metropolitan metropolitan LEED green global spot in SH Nanjing luxury & resources; building; new 9 Regions attention; to Shanghai; Road; New aesthetic luxury office become New tourist commercial quality lifestyle experience in Shanghai’s attraction benchmark in Lujiazui landmark Shanghai 55 Experience Sharing – Shimao Fujian Regional Company Experience Sharing – Content

1 Development of Shimao Fujian Regional Company

2 Reasons of Rapid Growth in 2017-2018

57 Development of Shimao Fujian Regional Company

 2003-2007: Era of Riviera The Bund

Super high-rise fitted residential property of highest unit price in Fuzhou

Photo of Fuzhou Shimao Riviera The Bund

Occupies a 116-acre site area, with total GFA of 270,000 sq. m., stretches about 1,200 m along the bund.

Total number of project: 1 58 Development of Shimao Fujian Regional Company

 2008-2010: Era of City Landmark Projects

Shimao Straits Mansion (2010)

Twin 300-meter sail-shaped towers set the new height standard in Fujian.

Fuzhou Shimao Skyscraper (2008)

270-meter-tall skyscraper defines the Fuzhou skyline.

Photo of Xiamen Shimao Straits Mansion

Shimao Lakeside Garden (2010)

A project with strong sales lasting three years and total sales exceeding RMB10 billion in Xiamen, setting the industry benchmark Photo of Fuzhou Shimao Skyscraper

Total number of projects: 4 Photo of Xiamen Shimao Lakeside Garden 59 Development of Shimao Fujian Regional Company

 2011-2016: Era of Urban Large Property Projects

2011 2012 2013 2014 2015 2016

Established South Fujian and Minhou Shimao Shishi Shimao South Fujian and North Fujian Dragon Bay Skyscraper City North Fujian combined into District Fujian District

Sales performance: Quanzhou Shimao Sales performance: Pingtan Straits City South Fujian RMB6.559 RMB10.7 billion Hi Dream billion North Fujian RMB2.353 billion Lianpan & Jimei RMB10 billion+ sales in Among top 10 in the PRC in Shimao Shine City three years 2014 in terms of sales Xiang’an Royal Villa Launch of “Shine” product series Jinjiang Shimao Dragon Bay A 2.50 million m2 mixed-use A large-scale tourism resort complex project

Shimao Zimaoshan Bestseller in Xiang’an 6 projects in Fuzou A large-scale >1,000-acre property project with splendid lake view 4 projects in Quanzhou Top mid-level luxury 4 projects residential property in in Xiamen Southern China Total number of projects: 14 60 An Eventful 2017

 Pursued internal reform to create growth momentum

Shimao achieved sales of RMB25.1 billion in Fujian, topping the best sales in Fujian

RMB billion 134% 60 140%

50 120%

100% 40 80% 30 25.1 60% 20 10.7 40% 8.9 10 20% 20% 0 0% 2015 2016 2017

Year 2015 2016 2017

Sales (RMB billion) 8.9 10.7 25.1

Growth y-o-y - 20% 134%

Sources: Third-party organizations including CRIC and EH Consulting 61 An Eventful 2017

 Pursued internal reform to create growth momentum

Added 20 new projects with saleable value of RMB65.4 billion

Total saleable value as at 31 December 2017 (including land bank and inventory)

RMB’ billion 200

180

160 153.2 Fuzhou 9 parcels 140

120

100 Putian 1 parcel 80 60.6 60 46.8 Quanzhou 5 parcels 40 33.6

20 11.6 Xiamen 4 parcels 0.6 0

Zhangzhou 1 parcel

62 Experience Sharing – Content

1 Development of Shimao Fujian Regional Company

2 Reasons of Rapid Growth in 2017-2018

63 An Even More Exciting Year in 2018

 A brand new incentive scheme; genuine corporate empowerment

2018 Strategic Objectives of Shimao Fujian Regional Company

Stay among the top three in Fuzhou, Xiamen and Quanzhou ≥ RMB50.0 billion ≥ RMB7.0 billion Make it into top three in Zhangzhou, Putian and Contracted sales Net profit Longyan target target Explore opportunities Best brand to enter Nanping, reputation in Sanming and Ningde Fujian ≥ RMB110.0 billion

Newly added saleable Ranked first in all value target functional industries in Fujian > 0 Most optimum Cash flow from > 60 management structure Operations for the full Full year project year (excluding financing) number Best collaboration platform in Fujian

64 An Even More Exciting Year in 2018

 A brand new incentive scheme; genuine corporate empowerment

As at mid-March 2018, sales already exceeded Sales RMB10.0 billion, leading in the market

Land As at mid-March 2018, saleable value of new land bank acquisitions reached RMB20.0 billion

Focus on developing quality land parcels in key urban areas and top county-level cities in the province

Fuzhou Cangshan 2017-49 Fuzhou Jin’an 2017-57 Fuzhou Jin’an Longyan 2017-58 Shanghang

Guanqiao Yuexin

Zhangzhou Danxia Zhangzhou 2017P08 project Zhangzhou 2017P11

65 Reasons of Rapid Growth in 2017-2018

1. Increase in land reserves: Most flexible and Diligently adhering to principle - Most flexible (2017 – 31 January 2018)

28 Parcels 5.05 million sq.m. RMB16.7 billion RMB72.6 billion

Number of land GFA of land Land Total saleable parcels acquired parcels acquisitions value of the acquired premium acquired lands

Percentage of Percentage of Land total saleable Joint total salable auctions on value: 16.39% Saleable value bidding value: 30.58% Saleable value one’s own RMB11.9 RMB22.2 9 land parcels at billion 7 land parcels at billion a land cost of a land cost of RMB4.65 billion RMB5.55 billion including

Percentage of Charging 3% total salable Construction & 2 land Stock management value: 53.03% Saleable value Construction & fee M&As SalesSales agentagent parcels value RMB38.5 Net profit at zero RMB1 RMB30 12 land parcels billion land billion million at a land cost of cost Risk free RMB4.25 billion 66 Reasons of Rapid Growth in 2017-2018

1. Increase in land reserves: Most flexible and Diligently adhering to principle - Diligently adhering to principle

Strict land selection standards + Comprehensive review of all cities in Fujian

Model for selecting county-level cities Current allocation of saleable value (as at 31 January 2018) Dehua Songxi …… Jian’ou Changtai Core area 9% Fuqing Sha Xianyou Licheng County Xinluo Pucheng Extension area 25% 39%

Economy Population Purchasing Spillover area 1. City fundamentals power

Top county-level cities 16% Effective Market 11% 2. Market fundamentals demand capacity Others Land Housing value to Reason- Long-term Short-term 3. Health of the market price to housing ableness inventory inventory income price of land to sales to sales Land acquisitions plan in 2018 ratio ratio supply ratio ratio Land premium Number of Variation 4. Ease of entry existing property of to base developers policies price

Market change Defensiveness Policy Flexible thinking factors Minority stake w/ operating rights & properties with price restriction 67 Reasons of Rapid Development in 2017-2018

1. Increase in land reserves: Most flexible and Diligently adhering to principle

- Diligently adhering to principle As at 31 January 2018 Fuzhou, Xiamen, Zhangzhou and Fuzhou, Xiamen, Zhangzhou and GFA Quanzhou contributing 99% Saleable value Quanzhou contributing 99%

Greater Fuzhou Greater Fuzhou 38% 27% Xiamen Xiamen 11% 1% 15% Greater Quanzhou Greater Quanzhou 0.4% Zhangzhou Zhangzhou 19% 14% 0.4% 0.3% Longyan Longyan 35% 38% Putian Putian

Luojiang Lianpan Nantong Defensiveness arises from diversified exposure Luojiang Jinjiang Shishi Pingan Yongtai Shishi Shishi Pingtan Jimei Quangang Fuqing Jimei Shishi Xiang’an Pingtan Luojiang Pingtan Shishi Dongshi Shishi

Mar Jun Sep Dec Loosened Fuzhou Strict policies in Fuzhou policies in Fuzhou

Downturn of Xiamen Extension of purchase restrictions in Xiamen Xiamen market

Strict price Quanzhou control in Quanzhou

Projects on sale Price restriction period Change of pre-sale Pingtan in Pingtan conditions in Pingtan Projects to be launched 68 Reasons of Rapid Development in 2017-2018

2. Quick turnover

Quick Turnover in 2017

Estimated Date of Efficient Turnover Time of Acquisition First Project Launch Positive Cashflow

Positive cashflow Yongtai Project 2017.09.26 2.2 months 2017.12.01 3.0 months for the entire project 2018.12.30

Dongshi Project 2017.06.11 5.7 months 2017.11.29 8.0 months 2018.02.05

Quangang Project 2017.05.09 6.8 months 2017.11.29 10.8 months 2018.03.30

Fuqing Project 2017.06.09 6.8 months 2017.12.30 12.9 months 2018.06.30

Nan’an Fanhua 2017.10.17 3.3 months 2018.01.28 11.3 months 2018.09.30

 The above five projects took 4.96 months on average from acquisition to project in 2017.

69 Reasons of Rapid Development in 2017-2018

2. Quick turnover

First Kick-off Meeting Cycle in 2017

1 3 1 3 3 2 6 No. of kick-off Total Meetings 19 Apr May Jun Jul Sep Nov Dec

4.0 Average cycle 3.0 (months) 3.0 2.4

2.0 1.8 1.8 1.7 1.3 1.0 1.0

0 Fuqing Quangang Changle Nan’an Yongtai Dongshi Nan’an Guanqiao Fanhua

 Kick-off meetings for 19 projects were held in 2017. The average cycle for projects holding their first kick-off meeting after land acquisition was 1.8 months. Thanks to the gradual improvement of efficiency from standardization, Nan’an Fanhua only took 1 month and Dongshi only 1.3 months.

70 Reasons of Rapid Development in 2017-2018

2. Quick turnover

Two rounds of growth Minimum Target

Land secured in Q1 brought to Land in third-and forth–tier A generate cash collection in June; cities acquired in Q1 must be launched and generate cash Cash collected in June to be used to collection in June and July. acquire new land, which generate B cash collection in Q4.

Assessment of Efficiency of Project Launch Cycle Assessment of Efficiency of (months) Kick-off Meeting Cycle (months)

6 1.0 Land acquisition- Land acquisition- Project launch kick-off meeting 5 1.5

Xiamen Five Districts in Fuzhou Standardized projects (90%) Quanzhou, Pan Xiamen & Fuzhou Other forth and fifth-tier cities Non-standardized projects (10%) 71 Reasons of Rapid Development in 2017-2018

3. High ratio of saleable value over land premium

2017-2018.1.31 Ratio of saleable value over land premium for new projects acquired

Ratio 1 : 5.8 28 land parcels of RMB12.56 billion Saleable value value paid before RMB72.60 RMB16.70 project launch billion billion

Land Joint Construction auctions on bidding M&As & one’s own Sales agent

Ratio 1 : 2 Ratio 1 : 4 Ratio 1 : 12 Ratio: ∞

No. of land parcels: 9 No. of land parcels: 7 No. of land parcels: 12 No. of land parcels: 2 Land cost: RMB4.65 billion Land cost: RMB6.60 billion Land cost: RMB5.40 billion Land cost: 0 Amount paid before project Amount paid before project Amount paid before project Amount paid before project launch: 0 launch: RMB4.65 billion launch: RMB5.55 billion launch: RMB 3.07 billion Saleable value: RMB1 Saleable value: RMB11.90 Saleable value: RMB22.20 Saleable value: RMB38.50 billion billion billion billion Management fee collected: RMB30 million 72 Reasons of Rapid Development in 2017-2018

3. High ratio of saleable value over land premium

Ratio of saleable value over land premium requirement for Quick turnover requirement in 2018 investment in 2018

Ratio Total saleable 1 : 7 value

Current year 1/6 contracted Postponed sales land cost 100 billion 1 : 3.3 1 : 0.6 Land Current year 24 new supply cost 30 billion billion

Capital 1 : 0.4 spent on 40 land 25 billion billion 1 : 1.7 acquisitions

15 billion

73 Reasons of Rapid Development in 2017-2018

4. Standardization

Intitial standardization and urban development in 2017

Landmark “Shine”

Fuzhou 108 Building 15%15% 85%85% InnovativeInnovative StandardizedStandardized productsproducts + projectsprojects

Changtai Town Project “Classic Small Town Chinese Chic”

Cloud Guling Project

Yongtai Hotspring Town 74 Reasons of Rapid Development in 2017-2018

4. Standardization

PAST Design Cycle 115d FUTURE Design Cycle 22d

115 days Target Pricing Match pricing of customers standard competing products

7 d

Product Standard Confirmation Premium

series layout of master plan strategy 115 days 115

15 d

Categorize Amenity List of Output product by standard costs blueprint grade

75 Reasons of Rapid Development in 2017-2018

5. Organizational structure – Maintain just, active and open competitive ecosystem in the region

Organic organizational growth – “6+N+40” strategy

Guling + Northern Fujian （Wuyishan, Guling）  Establish six potential city companies Contracted sales  Nurture teams for N city companies target: 1.31 billion Number of projects: 2  Nurture pool of about 40 project managers Fuzhou (Greater Fuzhou Contracted sales target: Implement “2.5 tier” management Area ) 12.74 billion Number of projects: 12 strategy Quanzhou （Greater Quanzhou Area） Contracted sales target: Draw up strategy, maintain competitive Regional core system 5.06 billion Contracted sales team and its All-round evaluation of business operational target: 10.62 billion Number of projects: 4 roles and capability Coastal areas responsibilities Number of projects: 8 surrounding Fuzhou Nurture staff to support regional business (Putian, Fuqing, development Pingtan, Changle） Eastern Xiamen Core teams Coordinate development Contracted sales target: Western Xiamen in city Expand foothold, realize same pace 5.58 billion companies growth in scale and earnings Number of projects: 4

Oversee on-site project quality Contracted sales target: Project Assure design plans are carried out as 8.01 billion managers in intended Number of projects: 12 city companies Maintain basic relationships with local governments 76 Reasons of Rapid Growth in 2017-2018

5. Organizational structure – Financial models of different teams under the competitive ecosystem

Financial models mainly focus on three areas: Positive cash flow, Contracted sales, land bank

Financial model of Quanzhou in 2018 Financial model of coastal areas of Financial model of Eastern Xiamen (hundred million) Fuzhou in 2018 (hundred million) in 2018 (hundred million)

300 30 150 5 150 30

0 20 200 20 100 100 -5 10 100 10 50 50 -10 0

0 0 0 -15 0 -10 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 Accumulative contracted sales Contracted sales Accumulative contracted sales Total saleable value Total saleable value Total saleable value Pro-forma net cash flow Pro-forma net cash flow Pro-forma net cash flow

Financial model of Pan-Xiamen district in Financial model of Northern Fujian+ Financial model of Fuzhou 2018 (hundred million) Guling in 2018 (hundred million) in 2018 (hundred million)

300 30 300 40 2.0 250 200 200 20 150 100 20 1.0 100 10 50 0 0 0 -100 0 0.0 -50 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 -100 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 Contracted sales Contracted sales Saleable value Total saleable value Contracted sales Total saleable value Net cash flow Pro-forma net cash flow Dynamic cash flow 77 Reasons of Rapid Development in 2017-2018

6. Setting up property research academy and extending core business areas

 Comprehensive studies on market,  Studies on emerging industries including investment, policies and competitors rental apartments, small town facilities, elderly services, joint offices + industrial  To provide support to regional company parks etc. in development of strategies  To provide support to regional company in planning of industry chain “Shine” Alliance in Fujian

Property research academy

Industry Property Market Urban and Knowledge academy monitoring research customer management research

Customer Interview Research Market base Replay with on urban monitoring change management industry planning icons and market Bench- Demand Best practice entry marking of research Seminars peers Knowledge Research Industry platform on segment Classical and and rotation and guidepost customer cycles analysis Big Data

78 Reasons of Rapid Development in 2017-2018

Vision of Shimao Fujian Regional Company: To be the top Regional Company in China

 Contracted sales target: Reaching RMB50 billion in 2018 and RMB80-100 billion in 2019.

 All-round industry-leading management is the key to support the growth of Shimao Fujian to a scale of RMB100 billion.

Strategic planning

RMB’ billion 1,000 900

720 Investment & Product financial competitiveness capability 500 500 400 Internal Turnover control capability capability

0 2018 2019 2018 2019 Brand Ancillary service reputation Contracted sales Cash collection capability

79 Conclusions Conclusions

1 In 2017, the real estate market has entered a period of adjustment. Nevertheless, both sales value and area of primary property market climbed to historical highs, reaching RMB13.37 trillion and 1.694 billion sq. m respectively. Our preliminary estimate for 2018 is that both contracted sales value and contracted area will decline slightly after reaching a record high in 2017 and overall sales are still expected to be over RMB12 trillion. Amidst the phasing out of the de-stocking policy, the 3rd- and 4th-tier cities will face greater pressure but the 1st- and 2nd-tier cities will see a rebound. Although there will be a slight drop in the market sales value, the top 20 real estate companies will manage to grow over 30%, and the industry consolidation will also be further enhanced;

2 In 2017, the Group achieved contracted sales of RMB100.77 billion (up by 48% y-o-y) and a contracted GFA of 6.06 million sq. m. The Group’s ASP increased from RMB13,850/sq. m in 2016 to RMB16,623/sq. m in 2017, with a sell-through rate of 65%. The Group’s supply structure has been further optimized and its estimated saleable resources will reach 13.73 million sq. m. Given the continued increase in ASP, total value of saleable resources is expected to exceed RMB233.5 billion in 2018. With a conservative assumption of sell-through ratio of around 60%, we are confident in beating our annual sales target of RMB140 billion for 2018;

81 Conclusions

3 Gross profit margin rose from 27.6% in 2016 to 30.4% in 2017. Excluding the gain from the disposal of Beijing Fortune Times in 2016, core profit attributable to shareholders in 2017 surged by 23.4% y-o-y. The growth in the Group’s gross profit margin and core profit are expected to continue in 2018 and 2019. Cash collection increased by 34.5% y-o-y from RMB60.0 billion in 2016 to RMB80.7 billion in 2017, with a cash collection ratio of approximately 80%. To mitigate the negative effects of government price caps, online contract filings and mortgage release etc, the Group enhanced cash collection through lifting the percentage of one-off payment and down payment ratio for its projects;

4 In 2017, the Group replenished 6.94 million sq. m of attributable quality land at RMB67.9 billion (2016: 3.22 million sq. m of attributable land at RMB30.3 billion), around 45% of which were obtained through base- price auctions, M&As and JVs. The Group has been stepping up efforts to acquire land by JVs, M&As and strategic acquisitions (including the Shenzhen Longgang strategic project at RMB24.0 billion). Our investment in quality land parcels also assures sustained rapid quality growth in the coming two years. Our investment in land in 2018 will be slightly more than that in 2017. At the end of 2017, total salable resources of the Group’s land bank exceeded RMB800 billion, including more than RMB150 billion in each of the Yangtze River Delta, Northern China, Fujian and the Guangdong-Hong Kong-Macao Greater Bay Area;

82 Conclusions

5 The Group maintained a prudent financial policy and optimized its capital structure rationally. Net gearing ratio was 58.9%, up by 5.5 p.p. as compared with 53.4% at the end of 2016, and maintained at below 60% for six consecutive years. The Group will devote greater efforts to replenish quality land in 2018 and the overall net gearing ratio for the year will be controlled to below 70%. We will also continue to maintain our low funding cost advantage. Our funding cost decreased from 5.8% for the full year of 2016 to 5.3% for the full year of 2017. Although onshore funding cost has increased slightly, the funding cost could be controlled through offshore financing.

6 Along with the continued growth in gross profit and core profit attributable to shareholders, the board has proposed a dividend for 2017 of HK100 cents per share, up by 31.58% when compared with HK76 cents in 2016 (up by 42.86% after deducting the special dividend of HK6 cents in 2016), reflecting the Company’s philosophy of sharing its operating success with shareholders. The payout ratio has stayed at a relatively high level of 30-40% in the past three years.

83 Conclusions

7 The Group’s recurrent income from hotels, commercial and others increased by 23.1% as compared with 2016 (excluding the impact of disposal of Beijing Fortune Times and the temporary closure of Shanghai International Plaza for refurbishment). With the opening of new hotels and quality commercial and office properties, total recurrent income will continue to improve. A number of quality hotels and commercial and office projects will commence operations in 2018 and 2019, including InterContinental Shanghai Sheshan Wonderland; Sheraton and Four Points in Tung Chung, Hong Kong; an office tower in Qianhai, Shenzhen; an office tower in Lujiazui, Shanghai; Shanghai Shimao International Plaza (housing Shimao’s Hello Kitty indoor theme park scheduled to be opened in October 2018) etc;

8 2017, 2018 and 2019 are “years of rapid quality growth’ for the Group. We have achieved substantial growth in sales, gross profit, net profit, project quality, product competitiveness and customer satisfaction. We believe that we can achieve sustainable growth going forward. In 2018, under a newly adjusted management structure, the Group will have more regional companies with higher level of delegation and enhanced long-term incentive scheme. It will allow the nine regional companies to compete with each other fiercely, enjoy profits and excess profits sharing, and operate under an independent accounting system, so that the regional companies will have the genuine sense of ownership.

84 Appendix Property Sales – Recognized Sales in 2017

Area Recognized Sales ASP (Excluding Tax) Project (m2) (RMB million) (m2 / RMB)

(a) Shimao Property

Beijing Tongzhou World Chamber of Commerce Centre 80,858 3,614 44,696 Fuzhou Pingtan Straits Future City 318,635 3,369 10,573 Tianjin Shimao Wetland Century 176,264 2,528 14,342 Zhangjiagang Shimao Lake Palace 164,248 2,497 15,203 Fuzhou Lianpan Shimao Shine City 84,964 2,460 28,953 Qingdao Shimao Noble Town 241,222 2,420 10,032 Hefei Shimao Jade Mansion 155,794 2,095 13,447 Chongqing Shimao Luxury Mansion 274,417 2,012 7,332 Chengdu Shimao City 262,824 2,004 7,625 Nanjing Straits City 68,455 1,931 28,208 Shaoxing Shimao Works of Time 122,076 1,653 13,541 Jinan Shimao The Capital of Yuanshan 160,036 1,650 10,310 Xi’an Shimao City 169,009 1,400 8,284 Suzhou Shimao Shihu Bay 56,637 1,364 24,083 Quanzhou Jinjiang Shimao Dragon Bay 199,153 1,260 6,327 Wuhan Baishazhou Shimao Cloud Value 121,627 1,123 9,233 Xiamen Shimao Royal Villa 35,665 1,089 30,534 Fuzhou Shimao Cloud Guling 45,760 1,073 23,448 Beijing Yidu Project 61,597 1,035 16,803 Hangzhou Shimao Above the Lake 45,907 1,029 22,415 Wuhan Shimao Splendid River 52,874 1,010 19,102 Hangzhou Shimao Born with Legend 19,580 958 48,927 Quanzhou Shimao Hi Dream 98,027 910 9,283

86 Property Sales – Recognized Sales in 2017 (cont’d)

Area Recognized Sales ASP (Excluding Tax) Project (m2) (RMB million) (m2 / RMB)

(a) Shimao Property (cont’d)

Hainan Wenchang Shimao Blooming Sea 105,565 872 8,260 Wuhan Shimao Lake Island 102,014 809 7,930 Changzhou Shimao Champagne Lake 72,936 748 10,256 Nanjing Shimao Merchants Mountain 29,941 738 24,648 Dalian Shimao Dragon Bay 69,090 662 9,582 Yinchuan Yuehai No.1 97,963 635 6,482 Shenyang Shimao Wulihe 40,480 383 9,461 Chengdu Jianyang Shimao Misty Lakeside 29,673 362 12,200 Quanzhou Shimao Ziman Mansion 19,281 329 17,063 Yinchuan Shiyue Mansion 46,051 313 6,797 Xuzhou Shimao Dongdu 33,762 305 9,034 Fuzhou Minhou Shimao Dragon Bay 30,161 275 9,118 Mudanjiang Shimao Holiday Landscape 65,928 266 4,035 Yinchuan Maoyue Mansion 19,363 260 13,428 Nanning Shimao Luxury Mansion 32,380 256 7,906 Nanchang Shimao The Grand View 19,430 250 12,867 Suzhou Shimao Canal Scene 9,541 222 23,268 Dalian Shimao Glory City 33,075 190 5,745 Beijing Shimao Salamanca 19,888 171 8,598 Yinchuan Flourishing Mansion 26,345 166 6,301 Nanjing Shimao Glory Villa 2,889 148 51,229 Hangzhou Shimao Riviera Garden 6,525 109 16,705 Jiangyin Shimao Dragon Bay 8,195 89 10,860

87 Property Sales – Recognized Sales in 2017 (cont’d)

Area Recognized Sales ASP (Excluding Tax) Project (m2) (RMB million) (m2 / RMB)

(a) Shimao Property (cont’d)

Chengdu Shimao Royal Bay 3,002 78 25,983 Beijing Shimao La Villa 3,271 56 17,120 Shanghai Shimao Riviera Garden 431 55 129,610 Wuhu Shimao Riviera Garden 3,258 42 12,891 Harbin Shimao Riviera New City 6,583 31 4,709 Wuhan Shimao Dragon Bay 2,517 26 10,330 Hangzhou Shimao East No.1 1,203 25 20,781 Ningbo Shimao The Capital 972 18 18,519 Fuzhou Shimao Skyscraper City 66 13 196,970 Xiamen Shimao Lakeside Garden 706 11 15,581 Shenyang Shimao Notting Hill 1,064 9 8,459 Nantong Shimao In The Park 1,381 8 5,793 Total (a) 3,960,559 49,414 12,477

88 Property Sales – Recognized Sales in 2017 (cont’d)

Area Recognized Sales ASP (Excluding Tax) Project (m2) (RMB million) (m2 / RMB)

(b) Shanghai Shimao

Xiamen Shimao Chine City 147,696 5,111 34,605 Nanjing Shimao Bund New City 130,376 3,503 26,868 Nanjing Yuhuatai Project 63,708 1,900 29,824 Qingdao Shimao Noosa Bay 156,769 1,730 11,035 Jinan Shimao Skyscraper City 83,788 1,115 13,307 Quanzhou Shishi Shimao Skyscraper City 132,743 1,095 8,249 Tianjin Wuqing Shimao Luxury Lansion 79,002 829 10,493 Changshu Shimao Royal Bay 73,516 763 10,379 Jinan Shimao International Plaza 21,574 549 25,447 Ningbo Shimao Riviera Garden 8,078 174 21,540 Nanchang Shimao APM 10,347 162 15,657 Ningbo Shimao Sunlake Centre 12,209 139 11,385 Changzhou Shimao Champagne Lake (Commercial) 17,870 116 6,491 Wuhan Shimao Carnival 5,257 60 11,413 Hangzhou Shimao Wisdom Tower 1,513 43 28,420 Xuzhou Shimao Dongdu (Commercial) 6,500 39 6,000 Suzhou Shimao Canal Scene (Commercial) 3,390 37 10,914 Qingdao Shimao International Plaza 1,137 9 7,916 Suzhou Shimao Royal Villa 209 5 23,923 Changshu Shimao The Centre (Commercial) 513 3 5,848 Total (b) 956,195 17,382 18,178

Sub-total (a) + (b) 4,916,754 66,796 13,585

89 Disclaimer

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