Appendix Iii Property Valuation Report

THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION IN THIS DOCUMENT MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT.

APPENDIX III PROPERTY VALUATION REPORT

The following is the text of a letter and valuation certificates, prepared for the purpose of incorporation in this document received from Jones Lang LaSalle Corporate Appraisal and Advisory Limited, an independent valuer, in connection with its valuation as at 30 November 2017 of the property interests held by the PRC Operating Entities.

[●] 2018 The Board of Directors Bojun Education Company Limited No. 288 Jingan Road Jinjiang District Chengdu, Sichuan Province PRC

Dear Sirs,

Jones Lang LaSalle Corporate Appraisal and Advisory Limited (“JLL” or “we”) is instructed by Bojun Education Company Limited (the “Company”) to provide valuation service on the property interests held by Jinjiang School, Tianfu School and Nanjiang Bojun (the “PRC Operating Entities”, the school sponsor’s interests are wholly-owned by Chengdu Mingxian Education Investment Company Limited and a consolidated affiliated entity of the Company), we confirm that we have carried out inspections, made relevant enquiries and searches and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the property interests as at 30 November 2017 (the “valuation date”).

Our valuation is carried out on a market value basis. Market value is defined as “the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”.

Due to the nature of the buildings and structures of the properties and the particular location in which they are situated, there are unlikely to be relevant market comparable sales readily available. The property interests have therefore been valued by the Cost Approach with reference to their depreciated replacement cost.

Depreciated replacement cost is defined as “the current cost of replacing an asset with its modern equivalent asset less deductions for physical deterioration and all relevant forms of obsolescence and optimization.” It is based on an estimate of the market value for the existing use of the land, plus the current cost of replacement (reproduction) of the improvements, less deductions for physical deterioration and all relevant forms of obsolescence and optimization. In arriving at the value of land portion, reference has been made to the sales evidence as available in the locality. The depreciated replacement cost of the property interest is subject to adequate potential profitability of the concerned

— III-1 — THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION IN THIS DOCUMENT MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT.

APPENDIX III PROPERTY VALUATION REPORT business. In our valuation, it applies to the whole of the complex or development as a unique interest, and no piecemeal transaction of the complex or development is assumed.

Our valuation has been made on the assumption that the seller sells the property interests in the market without the benefit of a deferred term contract, leaseback, joint venture, management agreement or any similar arrangement, which could serve to affect the value of the property interests.

No allowance has been made in our report for any charge, mortgage or amount owing on any of the property interests valued nor for any expense or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the properties are free from encumbrances, restrictions and outgoings of an onerous nature, which could affect their value.

In valuing the property interests, we have complied with all requirements contained in Chapter 5 and Practice Note 12 of the Rules Governing the [REDACTED] of Securities issued by the Stock Exchange of Hong Kong Limited; the RICS Valuation — Global Standards 2017 published by the Royal Institution of Chartered Surveyors; the HKIS Valuation Standards published by the Hong Kong Institute of Surveyors; and the International Valuation Standards published by the International Valuation Standards Council.

We have relied to a very considerable extent on the information given by the PRC Operating Entities and have accepted advice given to us on such matters as tenure, planning approvals, statutory notices, easements, particulars of occupancy, lettings, and other relevant matters.

We have been shown copies of various title documents including State-owned Land Use Rights Grant Contracts and Asset Transfer Agreement relating to the property interests and have made relevant enquiries. Where possible, we have examined the original documents to verify the existing title to the property interests in the PRC and any material encumbrance that might be attached to the property interests or any tenancy amendment. We have relied considerably on the advice given by the Company’s PRC Legal Advisors — Jingtian & Gongcheng Law Firm, concerning the validity of the property interests in the PRC.

We have not carried out detailed measurements to verify the correctness of the areas in respect of the properties but have assumed that the areas shown on the title documents and official site plans handed to us are correct. All documents and contracts have been used as reference only and all dimensions, measurements and areas are approximations. No on-site measurement has been taken.

We have inspected the exterior and, where possible, the interior of the properties. However, we have not carried out investigation to determine the suitability of the ground conditions and services for any development thereon. Our valuation has been prepared on the assumption that these aspects are satisfactory. Moreover, no structural survey has been made, but, in the course of our inspection, we did not note any serious defect. We are not, however, able to report whether the properties are free of rot, infestation or any other structural defect. No tests were carried out on any of the services.

Inspection of the properties was carried out in January 2018 by Ms. Cyndi Huang, who is a China Real Estate Appraiser and has more than 5 years’ experience in the valuation of properties in the PRC.

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We have had no reason to doubt the truth and accuracy of the information provided to us by the PRC Operating Entities. We have also sought confirmation from the Company that no material factors have been omitted from the information supplied. We consider that we have been provided with sufficient information to arrive an informed view, and we have no reason to suspect that any material information has been withheld.

Unless otherwise stated, all monetary figures stated in this report are in Renminbi (RMB).

Our valuation certificate is attached.

Yours faithfully, for and on behalf of Jones Lang LaSalle Corporate Appraisal and Advisory Limited Eddie T. W. Yiu MRICS MHKIS RPS (GP) Director

Note: Eddie T.W. Yiu is a Chartered Surveyor who has 24 years’ experience in the valuation of properties in Hong Kong and the PRC as well as relevant experience in the Asia-Pacific region.

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SUMMARY OF VALUE

GroupI-Property interests held and occupied by the PRC Operating Entities in the PRC

Market value in existing state as at No. Property 30 November 2017

RMB

1. Chengdu Jinjiang District No. 1 Experimental Middle School No Commercial Value attached to Sichuan Normal University (Jinjiang School), located at No. 288 Jingan Road, Jinjiang District, Chengdu City, Sichuan Province The PRC

Market value in existing state as at No. Property 30 November 2017

RMB

2. Chengdu New Tianfu District No. 1 Experimental Middle School No Commercial Value attached to Sichuan Normal University (Tianfu School), located at No. 19 Lushan Road Section 2, Tianfu New District, Chengdu City, Sichuan Province The PRC

Sub-total: Nil

Group II - Property interest contracted to be acquired by the Group in the PRC

Market value in existing state as at No. Property 30 November 2017

RMB

3. Nanjiang Bojun School, No Commercial Value located at A01 Qiaoheqiao, Nanjiang County, Bazhong City, Sichuan Province The PRC

Sub-total: Nil Grand total: Nil

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Notes:

(1) In the valuation of Property No. 1 we have attributed no commercial value to the property because of the leased land nature and the building are without Building Ownership Certificates. However, for reference purpose, we are of the opinion that the depreciate replacement cost of these buildings and structures (excluding land) as at the valuation date would be RMB58,560,000 assuming all relevant certificates have been obtained and they can be freely transferred and there is no legal impediment and onerous cost in obtaining the title certificates.

(2) We have attributed no commercial value to Property No. 2 which has not obtained Building Ownership Certificate as at the valuation date. However, for reference purpose, we are of the opinion that the market value of the completed buildings and various ancillary structures (including the land with a site area of approximately 19,186.57 sq.m.) as at the date of valuation would be RMB76,150,000 and the depreciated replacement cost of the CIP building (excluding the land) as at the valuation date would be RMB22,270,000, on condition that the relevant title certificates have been obtained by the PRC Operating Entities and the PRC Operating Entities is entitled to freely transfer, lease, mortgage or otherwise dispose of the property. The replacement cost of the CIP building of the property as if completed as at the valuation date according to the development proposal and which can be freely transferred in the market would be RMB74,220,000.

(3) Property No. 3 has not been assigned to the PRC Operating Entities and thus the title of the property has not been vested in the PRC Operating Entities. Therefore we have attributed no commercial value to the property.

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APPENDIX III PROPERTY VALUATION REPORT

VALUATION CERTIFICATE

GroupI–Property interests held and occupied by the PRC Operating Entities in the PRC

Market value in existing state as at No. Property Description and tenure Particulars of occupancy 30 November 2017 RMB

1. Chengdu Jinjiang The property comprises 5 parcels of land As at the valuation date, the No Commercial District No. 1 (collectively-owned land use rights nature) property was occupied by the Value Experimental Middle with a total site area of approximately PRC Operating Entities for School attached to 71.27 Mu (equivalent to 47,513.57 sq.m.) educational and ancillary Sichuan Normal and 13 buildings and various ancillary purposes. University (Jinjiang structures erected thereon which were School) located at completed between 1993 and 2011. No. 288 Jingan Road Jinjiang District, The buildings have a total gross floor area Chengdu City, of approximately 33,703 sq.m. Sichuan Province The PRC The buildings mainly include academic buildings, multifunctional classroom, office buildings, library, dormitories and canteens.

The structures mainly include ancillary facility, playground, walls and roads.

As advised by the Company, the land (collectively-owned land use rights nature) was leased from Jinxiangsi Village committee.

Notes:

1. Pursuant to 5 Land Lease Agreements, 5 parcels of land with a total site area of approximately 71.27 Mu (equivalent to 47,513.57 sq.m.) are leased to the Jinjiang School from Jinxiangsi village committee for various terms at a total prevailing annual rent of RMB322,308.

The prevailing contracted annual rent is set out as below:

No. Site Area Date of Commencement Date of Expiry Annual Rent (Mu) (RMB)

1. 60.41 1 June 1993 1 June 2043 289,968 2. 1.00 10 September 2006 10 September 2043 3,000 3. 7.66 26 April 2009 Until the date of land collection 22,980 4. 2.00 20 December 2009 Until the date of land collection 6,000 5. 0.20 1 October 2015 Until the date of land collection 360

2. For the buildings of the property, no building ownership certificates have been obtained for them.

3. In the valuation of this property, we have attributed no commercial value to the property because of the leased land nature and the buildings are without Building Ownership Certificates. However, for reference purpose, we are of the opinion that the depreciated replacement cost of the buildings and structures (excluding the land) as at the valuation date would be RMB58,560,000 assuming all relevant title certificates have been obtained and they could be freely transferred and there is no legal impediment and onerous cost in obtaining the title certificates.

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APPENDIX III PROPERTY VALUATION REPORT

4. We have been provided with a legal opinion regarding the property interest by the Company’s PRC Legal Advisors, which contains, inter alia, the following:

a. Jinjiang School has not obtained proper title certificate for the buildings mentioned in note 3, but the risk to be punished is low; and

b. Adequate compensation will be given by the Company’s Controlling Shareholders if Jinjiang School suffers any loss from the lack of building ownership certificate.

5. As the property is the major asset held by the PRC Operating Entities, we are of the view that the property is a material property.

Details of the material property

a) General description of location of the : The property is located at the western side of Jingan Road property of Jingjiang District which is in the eastern area of Chengdu City. It is around 0.3 km away from the subway station of Metro Line 7. Developments in the vicinity are mainly residential buildings. The site of the property is in regular shape.

b) Details of encumbrances, liens, : Nil. pledges, mortgages against the property

c) Environmental Issue : No environmental study has been carried out.

d) Details of investigations, notices, : 13 buildings with a total gross floor area of approximately pending litigation, breaches of law or 33,703 sq.m. have not obtained Building Ownership title defects Certificates.

e) Future plans for construction, : As advised by the PRC Operating Entities, there is no plan renovation, improvement or for new major development or renovation in the next 12 development of the property and months from the date of this document. estimated associated costs

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APPENDIX III PROPERTY VALUATION REPORT

VALUATION CERTIFICATE

Market value in existing state as at No. Property Description and tenure Particulars of occupancy 30 November 2017 RMB

2. Chengdu New Tianfu The property comprises a parcel of land As at the valuation date, the No Commercial District No. 1 with a site area of approximately 19,186.57 property was occupied by Value Experimental Middle sq.m., 2 completed buildings and various the PRC Operating Entities School attached to ancillary structures erected thereon which for educational and ancillary Sichuan Normal were completed in 2014. purposes. University (Tianfu School) located at No. The buildings have a total gross floor area 19 Lushan Road of approximately 13,472.08 sq.m. Section 2, Tianfu New District, Chengdu City, The buildings mainly include academic Sichuan Province building and ancillary building. The PRC The structures mainly include ancillary facility room, playground, walls and roads.

Apart from the completed buildings, there is a dormitory building which was under construction (the “CIP building”) as at the valuation date. The CIP building is erected on a parcel of land (collectively-owned land use rights nature) with a site area of approximately 10,432.78 sq.m. As advised by the Company, the CIP building is scheduled to be completed in June 2018. Upon completion, the CIP building will have a gross floor area of approximately 24,740.60 sq.m. The total construction cost is estimated to be approximately RMB71,000,000, of which approximately RMB10,500,000 had been paid as at the valuation date.

Notes:

1. Pursuant to an Asset Transfer Agreement, a Supplemental Agreement and several related agreements entered into between, among others, a property developer, a property investment company and Tianfu School (collectively, the “Asset Transfer Agreements”), a property which comprises a parcel of land with a site area of approximately 19,186.57 sq.m., two buildings with a total gross floor area of approximately 13,472.08 sq.m. and various ancillary structures were contracted to be transferred to Tianfu School.

2. According to a Cooperation Agreement, entered into between Shuangquan Village Committee of Wanan Street of Tianfu New District (the “Shuangquan Committee”) and Tianfu School, the Shaungquan Committee shall provide a parcel of land with a site area of approximately 10,432.78 sq.m. for the expansion of campus of Tianfu School. Under the agreement, Tianfu School shall finance the construction work of such expansion which mainly includes an under-construction dormitory building (the “CIP building”). Upon completion of the construction of the CIP building, the Shuangquan Committee shall be entitled to the ownership right of approximately 7,100.00 sq.m. of the CIP building and shall lease this portion of the CIP building to Tianfu School for a term commencing from 1 March 2018 and expiring on 28 February 2036 at a total rent for the entire duration of RMB24,750,000. Tianfu School shall be entitled to the ownership right of the remaining portion.

3. For the completed buildings of the property, no building ownership certificates have been obtained for them.

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APPENDIX III PROPERTY VALUATION REPORT

4. As at the valuation date, the property has not been assigned to the PRC Operating Entities and thus the title of the property has not been vested in the PRC Operating Entities. Therefore we have attributed no commercial value to the property. However, for reference purpose, we are of the opinion that the market value of the completed buildings and various ancilliary structures (including the land with a site area of approximately 19,186.57 sq.m.) as at the valuation date would be RMB76,150,000 and the depreciated replacement cost of the CIP building (excluding the land) as at the valuation date would be RMB22,270,000, on condition that the relevant title certificates have been obtained by the PRC Operating Entities and the PRC Operating Entities is entitled to freely transfer, lease, mortgage or otherwise dispose of the property.

5. The replacement cost of the CIP building of the property as if completed as at the valuation date according to the development proposal as described above and which can be freely transferred in the market would be RMB74,220,000.

6. We have been provided with a legal opinion regarding the property interest by the Company’s PRC Legal Advisors, which contains, inter alia, the following:

a. the property has conformed to the planning purposes described under the relevant construction and planning permits and the certificate of land use right;

b. the lack of the property ownership of the property does not constitute a material non-compliance issue to Tianfu School;

c. the development and construction of the CIP building has obtained necessary official approval from relevant departments.

7. As the property is the major asset held by the PRC Operating Entities, we are of the view that the property is a material property.

Details of the material property

a) General description of location of the : The property is located at the northern side of Lushan Road property Section 2 of Tianfu New District which is in the southern area of Chengdu City. Developments in the vicinity are mainly residential buildings. The site of the property is in regular shape.

b) Details of encumbrances, liens, pledges, : Nil. mortgages against the property

c) Environmental Issue : No environmental study has been carried out.

d) Details of investigations, notices, : 2 buildings with a total gross floor area of approximately pending litigation, breaches of law or 13,472.08 sq.m. have not obtained Building Ownership title defects Certificates.

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APPENDIX III PROPERTY VALUATION REPORT

VALUATION CERTIFICATE

Group II - Property interest contracted to be acquired by the Group in the PRC

Market value in existing state as at No. Property Description and tenure Particulars of occupancy 30 November 2017 RMB

3. Nanjiang Bojun The property comprises 2 parcels of land As at the valuation date, the No Commercial School, located at A01 with a total site area of approximately property was vacant. Value Qiaoheqiao, Nanjiang 93,649.45 sq.m. County, Bazhong City, Sichuan Province The land use rights of the property have The PRC been granted for a term of 50 years for educational facilities use.

Notes:

1. Pursuant to 2 State-owned Land Use Rights Grant Contracts - No.511702-2017-G-03-1 and No.511702-2017-G-03 dated 23 November 2017, the land use rights of 2 parcels of land with a total site area of approximately 93,649.45 sq.m. were contracted to be granted to Nanjiang Bojun Education Management Company Limited (“Nanjiang Bojun”, a consolidated affiliated entity of the Company) for a term of 50 years for educational facilities use. The total land premium was RMB35,118,544.

2. As at the valuation date, the property has not been assigned to the PRC Operating Entities and thus the title of the property has not been vested in the PRC Operating Entities. Therefore we have attributed no commercial value to the property.

3. We have been provided with a legal opinion regarding the property interest by the Company’s PRC Legal Advisors, which contains, inter alia, the following:

a. According to the relevant laws and regulations of China, Nanjiang Bojun will obtain the land use rights of the property after registration.

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