KWG Property Holding Limited Announces 2013 Annual Results

Press Release [For Immediate Release]

Stay Tuned with Market Changes and Adopt Diversified Product Mix Strategy Recognize Needs of End-Users to Seize Favourable Market Opportunities Profit Attributable to Owners of the Group Posts a Substantial Growth of 14.3% to RMB2.7 Billion

Financial Highlights: Audited results for the year ended 31 December (RMB million) 2013 2012 Change Revenue 9,468.0 9,676.4 -2.2% Gross profit 3,432.0 3,535.9 -2.9% Profit attributable to owners of the Group 2,749.8 2,406.4 14.3% Earnings per share 95 83 14.5% - Basic and Diluted (RMB cents) Final dividend per share (RMB cents) 29 15 93.3%

(17 March 2014 – Hong Kong) KWG Property Holding Limited (“KWG Property” or the “Group”, 1813.HK), one of the leading property developers in Guangzhou, announced today its annual results for the year ended 31 December 2013.

During the year under review, the Group recorded total revenue of approximately RMB9,468.0 million. Gross profit reached approximately RMB3,432.0 million. Profit attributable to owners of the Group posted a substantial growth of 14.3% to approximately RMB2,749.8 million. Earnings per share were RMB95 cents. The Board of Directors recommended the payment of RMB29 cents per share as the final dividend for the year ended 31 December 2013.

In 2013, the China property market has witnessed a year of strong growth both in terms of transaction volume and average selling price (“ASP”). According to the report of National Bureau of Statistics as at 31 December 2013, sales of commodity properties for the year increased by 16.3% and 17.3% in terms of value and Gross Floor Area (“GFA”), respectively, as compared to the previous year. To curb growing property prices, the government introduced a number of austerity measures in the property space, including the promulgation of the “New Five Measures of the State Council” which comprises the imposition of a 20% individual income tax in order to restrain speculative trading in the secondary market. Later in the year, a number of cities have introduced detailed austerity measures, including regulations requiring a higher percentage of down payment to be paid for second homes. Transaction in primary market remained strong and purchases by end-users increased.

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Aiming to meet the needs of consumers, the Group introduced different types of products in a timely manner in response to market changes. The Group continued to promote The Summit in Guangzhou, which offers a diverse range of products such as fitted residential units with GFA of 88-210 sq.m., small serviced apartments with GFA of 45 sq.m. or below, as well as villas with GFA of 160-250 sq,m. Because of the desirable location, together with befitting layouts and competitive prices, these new batches were met with sound responses at their launch. Besides, the Group continued to market exquisitely fitted flats in Chengdu Cosmos, with GFA of 180-360 sq.m. To meet the increasing demand from end- users in Chengdu, fitted serviced apartments in Chengdu Cosmos with GFA of 37-123 sq.m. were also launched towards the end of the year since smaller units are becoming increasingly popular.

While actively identifying appropriate sites to replenish its land bank, the Group was always mindful of following a prudent land policy. In addition to bidding in auctions, the Group also endeavoured to cooperate with the government or third-party developers. During the year, the Group acquired 13 land parcels, located variously in Guangzhou, Suzhou, Nanning, Tianjin and Hangzhou, at reasonable prices to manage overall land acquisition costs. The Group entered into a joint-venture agreement with Shimao Properties to develop two sites in Fangshan of Beijing. The acquisition of several adjacent cities in Hangzhou Science City and Tianjin Shuanggang in the open market has generated synergies conducive to resource consolidation. As at 31 December 2013, the Group held a land bank with an aggregate GFA of approximately 10.0 million sq.m.

Whilst enhancing management of construction progress and cost control, the Group also sought to maintain a stable financial system with sufficient capital to meet development needs. During the year, the Group secured ample liquidity by tapping a variety of financial needs. In early 2013, the Group replenished its working capital in a timely manner to lower financial costs by issuing a USD300 million senior notes with a 7-year term at a lower coupon rate. The Group and its partner borrowed development loans of RMB1 billion and HKD2.7 billion for Jinnan New Town in Tianjin from offshore banks at reasonable interest rates in May and October 2013 respectively. The Group also borrowed RMB loans with lower interest rates from onshore banks and applied such funds to repay certain bank borrowings incurred at higher costs during the previous years.

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KWG Property Holding Limited Announces 2013 Annual Results Stay Tuned with Market Changes and Adopt Diversified Product Mix Strategy Recognize Needs of End-Users to Seize Favourable Market Opportunities Profit Attributable to Owners of the Group Posted a Substantial Growth of 14.3% to RMB2.7 Billion Page 3 The Group’s investment properties and hotel business saw steady growth during the year. For the year ended 31 December 2013, the turnover of the Group from the investment in office premises and leasing of retail properties amounted to approximately RMB144.7 million (2012: approximately RMB143.3million). Contribution from the Group’s hotels is steadily growing profitably. Apart from Four Points by Sheraton Guangzhou, Dongpu and Sheraton Guangzhou Huadu Resort, the Group’s high-end luxury hotel W Hotel, the first W Hotel in Mainland China, officially commenced operation in May 2013. W Hotel has won wide recognition among consumers for its unique and novel design, tailor-made premium services, relaxing environment and fine cuisines after nearly 7 months in operation. Also situated at the prestigious location at the heart of the Pearl River New Town in Guangzhou, International Finance Place (“IFP”), one of the Group’s major investment properties, has been very popular with banks and Guangzhou headquarters of multinational corporations since its opening in 2007. As at 31 December 2013, its occupancy rate stood at 99%. IFP is occupied by various domestic and international financial institutions such as Mizuho Bank, Bank of China, Industrial and Commercial Bank of China and the Italian Consulate, who have been attracted by its top-notch property management and services, premium office environment and convenient transportation.

Looking ahead, Mr. Kong Jian Min, Chairman of the Group stated that, “In 2014, we plan to launch a number of brand new projects including residential developments or mixed-use developments located at the centre of cities’ new districts as well as integrated projects in well-developed areas in our existing cities of operation, such as Beijing Apex, La Villa, Vision of the World in Shanghai, Top of World in Guangzhou, Hangzhou Science City I, The Core of Center in Nannning and Haidian Project in Beijing, etc. Supported by convenient transportation and full-fledged ancillary facilities, these new projects are expected to generate good pre-sales for the Group. At the same time, we will also launch the latter phases of 24 projects currently on sale to meet market demands. To optimise our resource allocation and enhance our operating efficiency, we will continue our efforts in cost and financial system upgrade and conversion, standardisation at further levels and centralised procurement. We will remain committed to the building of a better living environment, strengthening our brand and reputation with the introduction of new products featuring exquisite designs and premium quality. ”

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About KWG Property (HKSE stock code: 1813) Established in 1995, KWG Property is one of the leading property developers focusing on mid to high- end properties with premium quality in prime locations in Guangzhou. Going through 19 years of development, the Group has an efficient property development system, as well as a balanced product portfolio which includes mid- to high-end residential properties, serviced apartments, villas, office buildings, hotels and shopping malls. Currently, the Group has expanded to high potential markets outside of Guangzhou. A strategic development framework has been formed, with Guangzhou, Hainan and Nanning as its hub for South China, Suzhou, Shanghai and Hangzhou for East China, Chengdu for Southwest China, and Beijing and Tianjin for the Bohai Rim region.

Issued by Cornerstones Communications Ltd. on behalf of KWG Property Holding Limited. For further information, please contact: KWG Property Holding Limited Hoffman Tsui / Linda Wu Tel: (86) 20-8550 0828 / 8550 0262 Fax: (86) 20-8550 0990 / (852) 2878 7091 Email: [email protected] / [email protected]

Cornerstones Communications Ltd Harriet Lau / Kylie Yeung / Angel Ng / Tiffany Chan Tel: (852) 2903 9290 / 2903 9293 / 2903 9289 / 2903 9283 Fax: (852) 2887 1712 Email: [email protected] / [email protected] / [email protected] / [email protected]