China Jinmao : ANNOUNCEMENT CONNECTED TRANSACTION AND DISCLOSEABLE TRANSACTION ACQUISITION OF EQUITY INTEREST IN WUHAN HUAZI

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.

China Jinmao Holdings Group Limited

中 國 金 茂 控 股 集 團 有 限 公 司

(Incorporated in Hong Kong with limited liability)

(Stock code: 00817)

ANNOUNCEMENT

CONNECTED TRANSACTION AND DISCLOSEABLE TRANSACTION

ACQUISITION OF EQUITY INTEREST IN WUHAN HUAZI

Reference is made to (i) the announcement of the Company dated 24 March 2017 in relation to the grant of an option by Wuhan Huazi to the Company whereby the Company may acquire 20% interests held by Wuhan Huazi in the Yangsi Port Project; (ii) the announcement of the Company dated 1 August 2017 in relation to the grant of an option by Wuhan Huazi to the Company whereby the Company may acquire 100% interests held by Wuhan Huazi in the Xiaowang Village Project; and (iii) the grant of an option by Wuhan Huazi to the Company on 25 October 2019 whereby the Company may acquire 100% interests held by Wuhan Huazi in the Five Land Parcels Project in China-Europe International City.

The Board hereby announces that the Company proposes to exercise the above three options to request Wuhan Huazi to dispose of its interests in the Projects. As Wuhan Huazi is not engaged in any business other than its investment in the Projects, the Company proposes to exercise the above three options by acquiring, through Yicheng Properties, an indirect wholly-owned subsidiary of the Company, 100% equity interests in Wuhan Huazi from Sinochem Asset, the shareholder of Wuhan Huazi. As such, on 12 March 2020, Yicheng Properties and Sinochem Asset entered into the Equity Transfer Agreement, pursuant to which Yicheng Properties has agreed to acquire 100% equity interests in Wuhan Huazi from Sinochem Asset at the Consideration of RMB6,850,000,000.

Upon completion of the Transaction, Wuhan Huazi will become an indirect wholly-owned subsidiary of the Company. Wuhan Huazi holds the entire interests in the Five Land Parcels Project in China-Europe International City through three wholly-owned subsidiaries, the entire interests in the Xiaowang Village Project through one wholly-owned subsidiary, and 20% interests in the Yangsi Port Project through one company with equity participation.

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LISTING RULES IMPLICATIONS

Sinochem Asset is a wholly-owned subsidiary of Sinochem Group, the ultimate controlling shareholder of the Company, and is therefore a connected person of the Company. Pursuant to Chapter 14A of the Listing Rules, the Transaction constitutes a connected transaction of the Company. As the applicable percentage ratios of the Transaction are more than 5%, the Transaction is subject to the reporting, announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules. In addition, as the applicable percentage ratios of the Transaction are more than 5% but less than 25%, the Transaction also constitutes a discloseable transaction of the Company and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

The Company will convene an extraordinary general meeting to seek the approval from the Independent Shareholders with respect to the Transaction. An Independent Board Committee has been formed to advise the Independent Shareholders on the Transaction. Somerley Capital Limited (a licensed corporation to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong) has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

A circular containing the details of the Transaction, a letter from the Independent Board Committee, a letter from the independent financial adviser and a notice convening the extraordinary general meeting will be despatched to the Shareholders on or before 31 March 2020.

BACKGROUND

Reference is made to (i) the announcement of the Company dated 24 March 2017 in relation to the grant of an option by Wuhan Huazi to the Company whereby the Company may acquire 20% interests held by Wuhan Huazi in the Yangsi Port Project; (ii) the announcement of the Company dated 1 August 2017 in relation to the grant of an option by Wuhan Huazi to the Company whereby the Company may acquire 100% interests held by Wuhan Huazi in the Xiaowang Village Project; and (iii) the grant of an option by Wuhan Huazi to the Company on 25 October 2019 whereby the Company may acquire 100% interests held by Wuhan Huazi in the Five Land Parcels Project in China-Europe International City.

The Projects are new business opportunities obtained by Sinochem Group. Sinochem Group informed the Company of the new business opportunities by written notices pursuant to the Non- compete Undertaking. Upon receipt of the written notices from Sinochem Group, the Company conducted feasibility studies on the Projects. Despite the prime and/or unique location of the Projects, the Company decided not to participate in the public tender of the Projects after taking into account its then financial position and resources. Thereafter, Wuhan Huazi acquired the Projects and granted the above three options to the Company pursuant to the Non-compete Undertaking whereby the Company may exercise the options at any time as it deems appropriate to acquire the interests held by Wuhan Huazi in the Projects at fair prices.

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The Board hereby announces that the Company proposes to exercise the above three options. As Wuhan Huazi is not engaged in any business other than its investment in the Projects, the Company proposes to exercise the above three options by acquiring, through Yicheng Properties, an indirect wholly-owned subsidiary of the Company, 100% equity interests in Wuhan Huazi from Sinochem Asset, the shareholder of Wuhan Huazi. As such, on 12 March 2020, Yicheng Properties and Sinochem Asset entered into the Equity Transfer Agreement, pursuant to which Yicheng Properties has agreed to acquire 100% equity interests in Wuhan Huazi from Sinochem Asset at the Consideration of RMB6,850,000,000.

Upon completion of the Transaction, Wuhan Huazi will become an indirect wholly-owned subsidiary of the Company. Wuhan Huazi holds the entire interests in the Five Land Parcels Project in China-Europe International City through three wholly-owned subsidiaries, the entire interests in the Xiaowang Village Project through one wholly-owned subsidiary, and 20% interests in the Yangsi Port Project through one company with equity participation.

PRINCIPAL TERMS OF THE EQUITY TRANSFER AGREEMENT

Date

12 March 2020

Parties

Vendor: Sinochem Asset

Purchaser: Yicheng Properties

Interests to be acquired

Pursuant to the Equity Transfer Agreement, Sinochem Asset has agreed to dispose of and Yicheng Properties has agreed to acquire 100% equity interests in Wuhan Huazi. Upon completion of the Transaction, Wuhan Huazi will become an indirect wholly-owned subsidiary of the Company.

Consideration and payment

The Consideration is RMB6,850,000,000, which was determined after arm' s length negotiation between the parties of the Equity Transfer Agreement with reference to the adjusted net assets value of Wuhan Huazi. As at 31 December 2019, the adjusted net assets value of Wuhan Huazi was approximately RMB7,609 million, which was arrived at based on the unaudited consolidated net assets value of Wuhan Huazi as at 31 December 2019, adjusted with the revaluation surplus arising from the valuation of the property interests held by Wuhan Huazi, net of estimated deferred tax associated with the revaluation surplus. The Consideration represents a discount of approximately 10% to the adjusted net assets value of Wuhan Huazi as at 31 December 2019.

Within 30 working days after obtaining the approval for the Transaction from the Independent Shareholders of the Company, Yicheng Properties shall pay the Consideration in one lump sum to the bank account designated by Sinochem Asset. The Consideration will be financed by internal resources of the Group.

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Validity

The Equity Transfer Agreement shall take effect upon obtaining the approval from the Independent Shareholders of the Company.

Pre-completion obligations

Under the Equity Transfer Agreement, Sinochem Asset has undertaken that:

1. from the date of signing of the Equity Transfer Agreement to the date of completion of the Transaction, Wuhan Huazi and its subsidiaries shall operate their business in a legitimate and compliant manner consistent with previous practices to maintain completeness and continuity in finance, operations, assets, business and personnel;
2. from the date of signing of the Equity Transfer Agreement to the date of completion of the Transaction, save for the liabilities incurred in their ordinary and usual course of business, Wuhan Huazi and its subsidiaries shall not, without the prior written consent from Yicheng Properties, incur any new liabilities or contingent liabilities including borrowings or guarantees, make profit distribution, dispose of or purchase material assets including equity interests or real estates, or do any act that may have material adverse impacts on their operating or financial conditions; and
3. save for the liabilities and contingent liabilities of Wuhan Huazi and its subsidiaries already disclosed to Yicheng Properties (including (i) interest-bearing bank borrowings of approximately RMB536 million, (ii) pledge of certain properties under development and land use right with an aggregate amount of approximately RMB1,807 million to secure the bank loans granted in relation to the Xiaowang Village Project, and (iii) total amount due to a shareholder and a related party of approximately RMB1,162 million, as at 31 December 2019) and the new liabilities and contingent liabilities incurred during the period from the date of signing of the Equity Transfer Agreement to the date of completion of the Transaction that are pre-approved by Yicheng Properties in writing, any liabilities and contingent liabilities of Wuhan Huazi and its subsidiaries incurred as a result of the matters or reasons occurred prior to the date of completion of the Transaction shall be borne by Sinochem Asset; Sinochem Asset shall take full responsibility for any third party claim against Wuhan Huazi and/or its subsidiaries with respect to the matters or reasons occurred prior to the date of completion of the Transaction.

If Sinochem Asset breaches its undertakings under the Equity Transfer Agreement which may, in the reasonable judgement of Yicheng Properties, have an adverse impact on the Transaction, Yicheng Properties shall have the right to terminate the Equity Transfer Agreement.

Completion

Sinochem Asset and Yicheng Properties shall use their best endeavours to procure Wuhan Huazi to complete the formalities in relation to the change of registration with the authority in charge of industrial and commercial administration for the Transaction within 30 working days from the date of payment of the Consideration by Yicheng Properties. Completion of the Transaction shall take place on the date when the change of registration with the authority in charge of industrial and commercial administration is completed.

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INFORMATION OF WUHAN HUAZI

Wuhan Huazi was established in November 2016 with a registered capital of RMB6,520 million. It is principally engaged in real estate information consulting and investment in the PRC. Wuhan Huazi is a wholly-owned subsidiary of Sinochem Asset as at the date of this announcement and will become an indirect wholly-owned subsidiary of the Company upon completion of the Transaction. Wuhan Huazi holds the entire interests in the Five Land Parcels Project in China- Europe International City through three wholly-owned subsidiaries, the entire interests in the Xiaowang Village Project through one wholly-owned subsidiary, and 20% interests in the Yangsi Port Project through one company with equity participation.

The Yangsi Port Project was won by a third party through public tender on 22 November 2016 at a total consideration of RMB11,065 million. Wuhan Huazi acquired 20% interests in the Yangsi Port Project through its capital injection of RMB20 million and provision of shareholder' s loan of approximately RMB2,220 million to the relevant project company pursuant to a joint development agreement entered into by Wuhan Huazi with the above successful bidder and other parties. The Yangsi Port Project is located in Hanyang District, Wuhan City and within the New Port Yangtze River City segment under planning. It has a site area of approximately 182,900 square metres and a planned gross floor area of approximately 814,300 square metres. It is developed for residential and community-oriented commercial purposes, comprising mainly super high-rise and high-rise residence. The construction of the Yangsi Port Project commenced in May 2017 and is carried out in phases with the construction of the whole project to be completed in November 2023. The total investment in the Yangsi Port Project is expected to be approximately RMB18,989 million, which will be financed by bank loans and sale proceeds.

The Xiaowang Village Project was won by Wuhan Huazi through public tender on 31 July 2017 at a total consideration of RMB3,150 million. The Xiaowang Village Project is located in Dongli District, Tianjin City. It has a site area of approximately 59,628 square metres and a planned gross floor area of approximately 119,300 square metres. It is developed for residential and community- oriented commercial purposes, comprising mainly small high-rise and townhouse residence. The construction of the Xiaowang Village Project commenced in February 2018 and is carried out in phases with the construction of the whole project to be completed in September 2023. The total investment in the Xiaowang Village Project is expected to be approximately RMB4,350 million, which will be financed by bank loans and sale proceeds.

The Five Land Parcels Project in China-Europe International City was won by Wuhan Huazi through public tender on 25 October 2019 at a total consideration of RMB1,773 million. The government' s requirement on the industry background of the bidders for the Five Land Parcels Project in China-Europe International City posed high uncertainty to the Company in winning the bid. As such, the Company did not participate in the public tender. On the other hand, Sinochem Group, with diversified business segments and abundant industry resources, had strong advantages in participating in the public tender, was able to accommodate the government' s requirement of strategic or emerging industry integration, and therefore acquired the lands at attractive prices. The Company considers that the overall conditions of the Five Land Parcels Project in China-

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Europe International City are satisfactory with appreciation potentials, and has therefore decided to exercise the option. The Five Land Parcels Project in China-Europe International City is located in High-tech Zone, Qingdao City with a site area of approximately 278,900 square metres. It is developed for urban residential and industrial purposes, comprising mainly high-rise residence. The planned gross floor area of the residential portion is approximately 448,900 square metres. The construction of the Five Land Parcels Project in China-Europe International City is expected to commence in June 2020 and will be carried out in phases with the construction of the whole project to be completed in March 2024. The total investment in the Five Land Parcels Project in China-Europe International City is expected to be approximately RMB5,416 million, which will be financed by bank loans and sale proceeds.

Based on the consolidated financial statements of Wuhan Huazi prepared under the China Accounting Standards for Business Enterprises, its audited total assets and audited net assets as at 31 December 2019 were approximately RMB8,745 million and RMB6,578 million, respectively. For the two years ended 31 December 2019, the audited profits of Wuhan Huazi were as follows:

	For the year ended 31	For the year ended 31
	December 2018	December 2019
	(approximate	(approximate
	RMB million)	RMB million)
Audited profit before tax	114	22
Audited profit after tax	75	16

REASONS FOR AND BENEFITS OF THE TRANSACTION

The Transaction is conducive to quickly expanding the land reserve of the Group in the three major cities, namely Qingdao, Tianjin and Wuhan, by leveraging on the strengths of the resources previously acquired by the controlling shareholder of the Company, which enables the Group to expand its market share in these cities, facilitates the overall advancement of the Group' s city operation projects, and provides strong support to the saleable value of the Group for the year. In addition, the Yangsi Port Project and the Xiaowang Village Project are projects under construction that have met the pre-sale conditions. Through the Transaction, the Group is able to enjoy the cash flow brought by the Yangsi Port Project and the Xiaowang Village Project, shorten the Group' s capital utilisation cycle and enhance its capital utilisation efficiency.

Following the outbreak of COVID-19 (the "Epidemic" ), the Company has conducted a prudent assessment on the impacts of the Epidemic on the Projects (especially the Yangsi Port Project in Wuhan) in aspects of construction and pre-sale progress, cost and cash flow. The period before and after the Chinese New Year is traditionally a low season for property development and sale in the PRC. Although the resumption of construction of the Projects after the Chinese New Year of 2020 was delayed as a result of the Epidemic, arrangements in the form of onsite working and remote working are being implemented to promote the resumption of construction of the Projects. As the Company has no pre-sale and completion plans for the Yangsi Port Project and the Xiaowang

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Village Project for the first quarter of 2020 and the construction of the Five Land Parcels Project in China-Europe International City has not yet commenced, the Company expects that the Epidemic will not have any material impact on the timetable of the pre-sale and delivery of the Projects. Despite the fact that the construction costs of the Projects are likely to increase in the near term due to the Epidemic, the Company intends to reasonably balance the construction progress and payment progress by capitalising on the means of payment in the supply chain. Furthermore, the governments in various regions of the PRC have successively promulgated preferential policies since February 2020, including deduction and exemption of taxation and expenses, as well as provision of subsidies. Based on the above, the Company considers that the Epidemic will not have a material adverse impact on the cash flow of the Projects.

The development of the Epidemic in the PRC is being contained and the ratio of resumption of work is gradually increasing. Recently, governments in many provinces and cities, including Xi' an, Wuxi, Shanghai, Nanchang, Hangzhou, Nanjing, Tianjin, Zhongshan, Suzhou, Yunnan and Dongguan, have successively introduced real estate front-end supportive policies under the framework of tailored policies according to the cities, including allowing postponement of payment for land grant fees or payment by instalment, reducing the percentage of security deposits for land bidding, deferring tax payments, moderately relaxing pre-sale conditions, postponing the construction commencement and completion time, promoting online approval services and providing credit support, so as to alleviate the liquidity pressure of property developers in the near term and safeguard the stability of the real estate market and economy. Based on the above, the Company considers that the Epidemic will not have a long-term and material impact on the real estate market in the PRC.

The Directors (excluding the independent non-executive Directors, whose opinions will be set out in the letter from the Independent Board Committee in the circular) consider that the terms of the Transaction are fair and reasonable, on normal commercial terms or better and in the interest of the Company and its Shareholders as a whole.

As Mr. NING Gaoning and Mr. YANG Lin are director and employee of Sinochem Group, respectively, they are deemed to have material interests in the Transaction. Accordingly, they have abstained from voting on the Board resolution approving the Transaction.

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LISTING RULES IMPLICATIONS

Sinochem Asset is a wholly-owned subsidiary of Sinochem Group, the ultimate controlling shareholder of the Company, and is therefore a connected person of the Company. Pursuant to Chapter 14A of the Listing Rules, the Transaction constitutes a connected transaction of the Company. As the applicable percentage ratios of the Transaction are more than 5%, the Transaction is subject to the reporting, announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules. In addition, as the applicable percentage ratios of the Transaction are more than 5% but less than 25%, the Transaction also constitutes a discloseable transaction of the Company and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

The Company will convene an extraordinary general meeting to seek the approval from the Independent Shareholders with respect to the Transaction. An Independent Board Committee has been formed to advise the Independent Shareholders on the Transaction. Somerley Capital Limited (a licensed corporation to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong) has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

A circular containing the details of the Transaction, a letter from the Independent Board Committee, a letter from the independent financial adviser and a notice convening the extraordinary general meeting will be despatched to the Shareholders on or before 31 March 2020.

INFORMATION OF THE PARTIES

The Company is a developer and operator of large-scale and quality real estate projects in the PRC. The Company is the platform enterprise of Sinochem Group in the development of real estate business. The Company is principally engaged in city operations, property development, commercial leasing, retail operations, hotel operations, as well as finance and services.

Yicheng Properties is an indirect wholly-owned subsidiary of the Company, and is principally engaged in real estate development and sales, project investment and property management in the PRC.

Sinochem Group is one of the central state-owned enterprises in the PRC with the approval of the SASAC to develop, invest in and manage real estate projects as one of its core businesses. The sole shareholder of Sinochem Group is the SASAC.

Sinochem Asset is a wholly-owned subsidiary of the Sinochem Group, and is principally engaged in asset management, investment management and real estate information consulting in the PRC.

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DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:

"Board"

"Company"

the board of Directors of the Company

China Jinmao Holdings Group Limited (中國金茂控股集團有 限公司), a company incorporated in Hong Kong with limited liability, whose shares are listed on the Stock Exchange

"connected person"	has the meaning ascribed to it under the Listing Rules
"Consideration"	the consideration of RMB6,850,000,000 for the Transaction
"controlling shareholder"	has the meaning ascribed to it under the Listing Rules
"Directors"	the directors of the Company
"Equity Transfer	the equity transfer agreement dated 12 March 2020 entered into
Agreement"	between Yicheng Properties and Sinochem Asset in connection
	with the Transaction
"Five Land Parcels	Nos. G-2019-011,G-2019-012,G-2019-013,G-2019-014 and
Project in China-Europe	G-2019-022 land parcels described in the announcement on the
International City"	assignment of use right of state-owned construction land (Qing
	Zi Ran Zi Gui Gao Zi (2019) No. 413), located in High-tech
	Zone, Qingdao City, the use of which is for urban residential and
	industrial purposes
"Group"	the Company and its subsidiaries
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"Independent Board	the independent committee of the Board comprising all
Committee"	independent non-executive Directors, namely, Mr. LAU Hon
	Chuen, Ambrose, Mr. SU Xijia and Mr. GAO Shibin
"Independent Shareholders"	Shareholders other than Sinochem Group and its associates
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange

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"Non-compete Undertaking"

"PRC"

"Projects"

"RMB"

"SASAC"

"Shareholders"

"Sinochem Asset"

"Sinochem Group"

"Stock Exchange" "subsidiary(ies)" "Transaction"

"Wuhan Huazi"

"Xiaowang Village Project"

the non-compete undertaking given by Sinochem Group to the Company pursuant to a non-compete agreement entered into between Sinochem Group and the Company on 26 July 2007

the People' s Republic of China, and for the purpose of this announcement, excluding Hong Kong, Macau Special Administrative Region and Taiwan

the Yangsi Port Project, the Xiaowang Village Project and the Five Land Parcels Project in China-Europe International City

Renminbi, the lawful currency of the PRC

the State-owned Assets Supervision and Administration Commission of the State Council of the PRC

registered holders of the ordinary shares of the Company

Sinochem Asset Management Co., Ltd. (中化資產管理有限公司), a company incorporated under the laws of the PRC with limited liability and a wholly-owned subsidiary of Sinochem Group

Sinochem Group Co., Ltd. (中國中化集團有限公司), a state- owned enterprise incorporated in the PRC, the ultimate controlling shareholder of the Company, which indirectly holds approximately 35.05% of the total number of issued shares of the Company

The Stock Exchange of Hong Kong Limited

has the meaning ascribed to it under the Listing Rules

the acquisition of 100% equity interests in Wuhan Huazi by Yicheng Properties from Sinochem Asset

Wuhan Huazi Enterprise Management Consulting Co., Ltd. (武漢 化資企業管理諮詢有限公司), a company incorporated under the

laws of the PRC with limited liability, which is wholly owned by Sinochem Asset as at the date of this announcement

Jin Dong Li Cheng (Gua) No. 2017-092 land parcel described in the announcement on the assignment of use right of state-owned construction land, located at the south side of Chengxin Road and the west side of Dieshan Road in Dongli District, Tianjin City, the use of which is for urban residential and commercial service purposes

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"Yangsi Port Project"

"Yicheng Properties"

Hong Kong, 12 March 2020

No. P(2016)118 land parcel described in the announcement on the assignment of use right of state-owned construction land (Wu Gao Zi (2016) No.18), located in the land lots F, G, J and K at the New Port Yangtze River City, Yangsi Port Area, Hanyang District, Wuhan City, the use of which is for residential, commercial service, park and greening purposes

Beijing Franshion Yicheng Properties Company Limited (北京方 興亦城置業有限公司), a company incorporated under the laws

of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company

By order of the Board

China Jinmao Holdings Group Limited

NING Gaoning

Chairman

As at the date of this announcement, the Directors of the Company are Mr. NING Gaoning (Chairman), Mr. YANG Lin and Mr. AN Hongjun as Non-executive Directors; Mr. LI Congrui, Mr. JIANG Nan and Mr. SONG Liuyi as Executive Directors; Mr. LAU Hon Chuen, Ambrose, Mr. SU Xijia and Mr. GAO Shibin as Independent Non-executive Directors.

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