Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. Hailan Holdings Limited 海 藍 控 股 有 限 公 司 (incorporated in the Cayman Islands with limited liability) (Stock code: 2278) MAJOR AND CONNECTED TRANSACTION IN RELATION TO ACQUISITION OF LAND PARCEL IN THE PRC AND FORMATION OF JOINT VENTURE ACQUISITION OF LAND PARCEL The Board is pleased to announce that Danzhou Shuanglian, an indirect subsidiary of the Company, Hailan Shiye Guangzhou, and Hunan Jinzhong Property won the bid in respect of the Land Parcel situated at Danzhou, Hainan Province, the PRC at the Auction at a consideration of RMB1,080 million. On 6 January 2021, Danzhou Shuanglian has received the confirmation notification from the auction company in relation to the Land Acquisition. The Asset Transfer Agreement in respect of the Land Acquisition is expected to be entered into on or about 7 January 2021. IMPLICATIONS UNDER THE LISTING RULES As one or more of the applicable percentage ratios calculated under Rule 14.07 of the Listing Rules in respect of the Land Acquisition and the formation of the JV Company exceeds 25% but is less than 100%, the Land Acquisition and the formation of the JV Company constitute a major transaction for the Company under Chapter 14 of the Listing Rules. – 1 – The Company has obtained the written approval for the Land Acquisition and the formation of the JV Company in accordance with Rule 14.44 of the Listing Rules from Zhong Jia (International) Investment Construction Company Limited, which is beneficially interested in 224,325,000 shares of the Company, representing 74.78% of the entire issued share capital of the Company as at the date of this announcement. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, no Shareholder has any material interest in the Land Acquisition and the formation of the JV Company and is required to abstain from voting if the Company is to convene an extraordinary general meeting for the approval of the Land Acquisition and the formation of the JV Company. As such, no extraordinary general meeting will be convened for the purpose of approving the Land Acquisition and the formation of the JV Company. As Hunan Jinzhong Property is the holding company of Zhongtou Zhiye, which is a substantial shareholder of Hailan Jinzhong, a subsidiary of the Company, both Zhongtou Zhiye and Hunan Jinzhong Property are connected persons of the Company at the subsidiary level under Chapter 14A of the Listing Rules, the Land Acquisition and the formation of the JV Company constitute connected transactions of the Company. The Board has approved the Land Acquisition and the formation of the JV Company, and the Directors (including the independent non-executive Directors) are of the view that the terms for the Land Acquisition and the formation of the JV Company are on normal commercial terms and fair and reasonable and is in the interests of the Company and its Shareholders as a whole. Therefore, the Land Acquisition and the formation of the JV Company are exempt from the circular, independent financial advice and shareholders’ approval requirements under Rule 14A.101 of the Listing Rules. GENERAL Pursuant to Rule 14.41(a) of the Listing Rules, a circular, containing among other things, details of the Land Acquisition and the formation of the JV Company are required to be despatched to the Shareholders within 15 Business Days after the publication of this announcement, which shall be on or before 27 January 2021. To allow for more time to prepare the information for inclusion in the circular, the Company will apply to the Stock Exchange for a waiver from strict compliance with Rule 14.41(a) of the Listing Rules, and will publish further announcement(s) in compliance with the requirement under the Listing Rules as and when appropriate. The circular will be despatched to the Shareholders on or before 31 March 2021. ACQUISITION OF LAND PARCEL The Board is pleased to announce that Danzhou Shuanglian, an indirect subsidiary of the Company, Hailan Shiye Guangzhou, and Hunan Jinzhong Property won the bid in respect of the Land Parcel situated at Danzhou, Hainan Province, the PRC at the Auction at a consideration of RMB1,080 million. On 6 January 2021, Danzhou Shuanglian has received the confirmation notification from the auction company in relation to the Land Acquisition. The Asset Transfer Agreement in respect of the Land Acquisition is expected to be entered into on or about 7 January 2021. – 2 – Details of the Land Acquisition are as follows: Tentative date of : On or about 7 January 2021 entering into the Asset Transfer Agreement Parties : (1) ManagementCommitteeofBinhaiNewDistrictof Danzhou (儋州濱海新區管理委員會); (2) Danzhou Shuanglian; (3) Hailan Shiye Guangzhou; and (4) Hunan Jinzhong Property Subject of Land : the Land Parcel which comprises land and properties Acquisition Location of the Land : the Land Parcel situated at Binhai New District, Baimajing Parcel Town, Danzhou, Hainan Province, the PRC Total gross floor area : 50,848.90 m2 Totalsitearea : 180,274.7m2 Consideration : RMB1,080million The Consideration will be contributed by the purchasers in the following proportion: Danzhou Shuanglian 50% HailanShiyeGuangzhou 35% HunanJinzhongProperty 15% Paymentterms : (i) RMB800 million as security deposit had been paid in proportion to the respective interest of the parties to the Danzhou Government which would be used as part of the Consideration; and (ii) RMB280 million being the remaining balance of the Consideration will be paid prior to 30 December 2021. Joint and several : The parties have accepted joint and several liability in liability purchasing the Land Parcel under the Asset Transfer Agreement – 3 – BASIS OF DETERMINATION OF THE CONSIDERATION The Consideration was determined by the successful bid of the Land Parcel by Danzhou Shuanglian, Hailan Shiye Guangzhou, and Hunan Jinzhong Property at the Auction which was conducted in accordance with the relevant PRC laws and regulations. The Group considered the bidding price for the Land Parcel was fair after taking into account, among other things, (i) the favourable tax policies of the PRC Government in Hailan Province will be beneficial to property development; (ii) the current property market conditions in Danzhou, Hainan Province, the PRC and areas nearby; and (iii) the location and development potential of the Land Parcel. No independent valuation has been taken as reference for setting the bidding price. The Group intends to finance the Consideration by internal resources and bank loans. Formation of JV Company For the purpose of acquiring the Land Parcel and the property development project, Danzhou Shuanglian, Hailan Shiye Guangzhou and Hunan Jinzhong Property are in the process of forming the JV Company. Set out below are the details of the articles of the JV Company being established: Parties to the JV : (i) Danzhou Shuanglian; Company (ii) Hailan Shiye Guangzhou; and (iii) Hunan Jinzhong Property Ownership of the JV : As to 50% by Danzhou Shuanglian; Company As to 35% by Hailan Shiye Guangzhou; and As to 15% by Hunan Jinzhong Property Scope of business of : Real estate development the JV Company – 4 – Capital contribution : The registered capital of the JV Company shall be RMB5 million which shall be contributed by the parties in cash in the following proportion: (i) RMB2.5 million, representing 50% of the registered capital of the JV Company, to be contributed by Danzhou Shuanglian; (ii) RMB1.75 million, representing 35% of the registered capital of the JV Company, to be contributed by Hailan Shiye Guangzhou; and (iii) RMB0.75 million, representing 15% of the registered capital of the JV Company, to be contributed by Hunan Jinzhong Property. Such amounts will be contributed in cash by 31 December 2050. The parties intend to increase the above registered capital contribution to RMB20 million which will be contributed in proportion to the above respective equity interest in the JV Company. Board of directors : Five directors Board of supervisors : Two supervisors REASONS FOR AND BENEFITS OF THE LAND ACQUISITION AND THE FORMATION OF JV COMPANY The Land Parcel, which is situated at Danzhou, Hainan Province, the PRC is for property development uses. It is located in close proximity to the other land parcel situated at Danzhou, Hainan Province which is currently under development and construction and the Land Acquisition is in line with the business development strategy of the Group in Hainan Province. It therefore creates synergy effect to the development planning of the Group in the same areas in Hainan Province, and enhances the brand reputation and value of the Group in the aspect of property development. The purpose of the formation of the JV Company, among others, real estate development, which will be beneficial to the parties as the shareholders of the JV Company will be able to reduce their risks through holding the JV Company, and allow the Company to benefit from the investment in the property development project in Danzhou through the JV Company. The Board is of the view that the Land Acquisition and the formation of the JV Company are in the Group’s ordinary and usual course of business, the terms of the Land Acquisition are fair and reasonable and the Land Acquisition is in the interests of the Company and its shareholders as a whole. – 5 – INFORMATION ON THE PARTIES TO THE ASSET TRANSFER AGREEMENT Information on the Group The Group is principally engaged in development and sales and lease of residential properties in the PRC.