THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. INDUSTRY OVERVIEW The information and statistics set out in this section have been extracted and derived from various official government publications, publicly available sources and private publications, unless otherwise indicated. We believe that the sources of this information and statistics are appropriate sources for such information and statistics and reasonable care has been exercised by our Directors in extracting and reproducing such information and statistics. We have no reason to believe that such information and statistics are false or misleading or that any fact has been omitted that would render such information false or misleading. None of our Company, the Joint Sponsors, the [REDACTED] or our or their respective directors, advisors, except for JLL, and affiliates have independently verified such information and statistics. Accordingly, none of our Company, the Joint Sponsors, or our or their respective directors and advisors or any other parties involved in the [REDACTED], except for JLL, makes any representation as to the accuracy and completeness of such information and statistics. As such, the official and non-official sources contained herein should not be unduly relied upon. Furthermore, due to the inherent time-lag involved in collecting any industry and economic data, some of the data contained in this section may only represent the state of affairs at the time such data were collected. As such, you should also take into account subsequent movements in the industry and the PRC economy when you evaluate the information contained in this section. SOURCES OF INFORMATION In connection with the [REDACTED], we have commissioned JLL, an independent third party, to prepare the Industry Research Report with necessary information on the real estate markets in China and the cities where we operate. JLL has charged us a total fee of approximately RMB400,000 for the preparation of the Industry Research Report, which we believe is in line with the market rate for similar reports and the payment of such amount is not contingent upon the success of the [REDACTED] or the findings of the industry research report. JLL is an international professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. JLL has more than 280 corporate offices, operates in more than 80 countries and has a global workforce of more than 93,000 as of December 31, 2019. This section was prepared primarily by the designated market research team based on the information and statistics collected from various government publications, site visits and interviews, recognized research institutions, and the proprietary database of JLL. The information and statistics are considered reliable. The following sets out the main reasons JLL adopted the above sources of information and considers them as reliable: it is a general market practice to adopt official data and announcements from various Chinese government agencies, and JLL understands the data collection methodology and data source of its proprietary database and the subscribed database from Statista, CEIC Data and China Real Estate Index System (CREIS). While preparing this section, JLL has relied on the assumptions listed below: (i) all documents provided by the Group are true and correct; (ii) all published data by the relevant government authorities are true and correct; (iii) and where subscribed data is obtained from recognized research and public institutions, JLL will rely upon the apparent integrity and expertise of such institutions. Our directors confirm that, as of the Latest Practicable Date, to the best of their knowledge, after taking reasonable care, there is no material adverse change in the market information since the date of the Industry Research Report or the date of the relevant data contained in the Industry Research Report which may qualify, contradict or have an impact on the information in this section. –91– THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. INDUSTRY OVERVIEW OVERVIEW OF THE PRC ECONOMY AND POPULATION China’s economy has been maintaining its growth momentum, demonstrated by the increase of nominal GDP from RMB64,128 billion in 2014 to RMB99,087 billion in 2019, representing a compound annual growth rate (CAGR) of 9.1%. The average real GDP growth rate was 6.7% from 2014 to 2019. During the same period, per capita disposable income of urban residents in China increased from RMB28,844 to RMB42,359, with a CAGR of 8.0%, indicating a significant increase of purchasing power of urban residents in China that would in turn lead to a growing demand for property upgrades. China’s urbanization rate is keeping rising with support of favorable policies such as the New National Urbanization Plan (2014-2020) (《國家新型城鎮化規劃（2014- 2020）》). Meanwhile, China has promoted the reform of Hukou registration system, resulting in the migration of residents to urban areas, leading to an increase of housing demand. The table below sets out the selected major economic indicators in China for the years indicated: Major economic indicators in the PRC (2014-2019) 2014 2015 2016 2017 2018 2019(1) CAGR Nominal GDP (RMB billion) ................................ 64,128 68,599 74,006 82,075 90,031 99,087 9.1% Real GDP growth rate (%) .................................. 7.3 6.9 6.7 6.8 6.6 6.1 6.7(2) Fixed asset investment (RMB billion) ......................... 51,202 56,200 60,647 64,124 64,568 56,087(3) N/A Per capita disposable income of urban households (RMB) ......... 28,844 31,195 33,616 36,396 39,251 42,359 8.0% Urban population (million) .................................. 749 771 793 813 831 848 2.5% Urbanization rate (%) ...................................... 54.8 56.1 57.4 58.5 59.6 60.6 N/A Notes: (1) The preliminary figures (2) The arithmetic mean of the growth rates (3) The National Bureau of Statistics of China has revised the scope of fixed asset investment since The 4th Economic Census in 2019 Source: National Bureau of Statistics of China, Ministry of Commerce of China OVERVIEW OF THE REAL ESTATE MARKET IN THE PRC Overview of the Real Estate Market In line with rapid growth of domestic economy and fixed asset investment, the overall investment in real estate sector kept its increasing momentum with a CAGR of 6.8% from RMB9,504 billion in 2014 to RMB13,219 billion in 2019. The total gross floor area (GFA) sold rose to 1,501 million sq.m. in 2019 from 1,052 million sq.m. in 2014, or a CAGR of 7.4%, demonstrating an increasing demand in the real estate market. The average sales price of residential properties increased from RMB5,933 per sq.m. in 2014 to RMB9,287 per sq.m. in 2019, representing a CAGR of 9.4%. The table below sets out the major indicators of real estate sector in China for the years indicated: Selected real estate market indicators of the PRC (2014-2019) 2014 2015 2016 2017 2018 2019(1) CAGR Total real estate investment (RMB billion) ......................... 9,504 9,598 10,258 10,980 12,026 13,219 6.8% Real estate investment — residential (RMB billion) .................. 6,435 6,460 6,870 7,515 8,519 9,707 8.6% GFA of residential under construction (million sq.m.) ................ 5,151 5,116 5,213 5,364 5,700 6,277 4.0% GFA of residential properties newly commenced (million sq.m.) ........ 1,249 1,067 1,159 1,281 1,534 1,675 6.0% GFA of residential properties completed (million sq.m.) .............. 809 738 772 718 660 680 -3.4% GFA of residential properties sold (million sq.m.) ................... 1,052 1,124 1,375 1,448 1,479 1,501 7.4% ASP of residential properties (RMB per sq.m.) ...................... 5,933 6,473 7,203 7,614 8,544 9,287 9.4% –92– THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. INDUSTRY OVERVIEW Note: (1) The preliminary figures Source: National Bureau of Statistics of China Future Trends of Real Estate Industry in the PRC Besides the demand from the deepening of urbanization, the future demand of real estate market in the PRC is more likely from metropolitan clusters. The PRC has gradually established resource-sharing and economically-connected metropolitan clusters. Currently, the PRC has already formed three well-developed metropolitan clusters, namely the Pearl River Delta (珠江三角洲), the Yangtze River Delta (長江三角洲) and the Beijing-Tianjin-Hebei (京津冀). During the “13th Five-Year planning Period” (“十三五”規劃期間), the PRC is expected to form 19 regional metropolitan clusters in total, with each cluster comprising a nucleus city and neighboring satellite cities, through convenient transportation and telecommunication system. Further, according to the Guangdong-Hong Kong-Macau Greater Bay Area Development Plan (《粵港澳大灣區發展規劃綱要》) recently issued by the State Council of the PRC, the construction of the Greater Bay Area is expected to improve development quality of city clusters as well as regional residential market. Such efforts aim to improve the regional economic environment, and it is expected that further development of metropolitan clusters will enable lower-tier cities to benefit from the inflow of talents, construction of infrastructure and upgrade of industries, resulting in increasing housing demand in these cities. Recent Development of Real Estate Market Policies The real estate market in China is highly exposed to change of government regulations.