China Merchants Port : DISCLOSEABLE AND CONNECTED TRANSACTION DISPOSAL OF VARIOUS INTEREST IN LAND IN QIANHAI

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.

(Incorporated in Hong Kong with limited liability under the Companies Ordinance)

(Stock Code: 00144)

DISCLOSEABLE AND CONNECTED TRANSACTION

DISPOSAL OF VARIOUS INTEREST IN

LAND IN QIANHAI

LAND RESTRUCTURING AGREEMENT

On 24 December 2018, as part of an urban planning initiative driven by the Shenzhen People's Government, Ansujie and Antongjie (both being indirect wholly-owned subsidiaries of the Company) entered into the Land Restructuring Agreement with SZPL, QHSH, CMG, QHPF, CMSK, CMSA, CMSK Subsidiaries and the A2 Company to further coordinate and manage the various interest in land in Qianhai, Shenzhen, the PRC currently held by the CMG Group for the purpose of developing the Qianhai-Shekou Free Trade Zone with affiliates of QHSH through the establishment of another joint venture company.

Pursuant to the Land Restructuring Agreement, among others, the Land Holding Companies agree the Aggregate CM Land to be resumed by QHSH and be reclassified for the purpose of future development by the A2 Company and affiliates of QHSH.

The total consideration enjoyed by the CMG Group for the transactions contemplated by the Land Restructuring Agreement will be comprised of (i) the New Land (with a value of approximately RMB43.21 billion (equivalent to approximately HK$49.10 billion) to be granted to the A2 Company and (ii) another piece of land located in Dachan Bay Port Phase II (ɽᗟᝄಥਜɚಂ) with the same area and corresponding coastal length equivalent to the Exchange Land to be transferred to the Group.

Upon the Land Restructuring Agreement becoming effective, Antongjie and Ansujie will give up and cease to have interest in the CMP Land.

DEBT CONFIRMATION LETTER

On 24 December 2018, A2 Company entered into the Debt Confirmation Letter pursuant to which A2 Company agrees that it will pay to each of the Land Holding Companies an amount that is equal to the value of the New Land multiply by the corresponding proportion of land interest each Land Holding Company holds under the Aggregate CM Land.

The amount payable to each Land Holding Company will be subject to further negotiation between the A2 Company and the Land Holding Companies based on the valuation of the corresponding proportion of land interest each Land Holding Company holds as determined by the Valuation Consultation Report.

LISTING RULES IMPLICATONS

As CMSA, CMSK, CMSK Subsidiaries, QHPF, and A2 Company are subsidiaries of CMG, the ultimate holding company of the Company, they are therefore connected persons of the Company and the Land Restructuring Agreement constitutes a connected transaction of the Company under the Listing Rules.

Upon the Land Restructuring Agreement becoming effective, the CMP Land will be resumed by QHSH in exchange for the Dachan Bay Land. The New Land will be granted to the A2 Company and the A2 Company will owe Antongjie and Ansujie an amount to be finalized pursuant to the Debt Confirmation Letter. Since the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the Disposal are more than 5% but less than 25%, the Disposal constitutes a discloseable and connected transaction of the Company, and is subject to (1) the notification and announcement requirements under Chapter 14 of the Listing Rules and (2) the announcement, shareholders' approval, circular and annual reporting requirements under Chapter 14A of the Listing Rules.

INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee has been established to advise the Independent Shareholders and the Independent Financial Adviser has been engaged to advise the Independent Board Committee and the Independent Shareholders in respect of the Disposal.

EGM

The EGM will be convened to consider, and if thought fit, to approve the Land Restructuring Agreement. In accordance with the Listing Rules, CMG which is interested in approximately 62% shares in the Company as at the date of this announcement, and its associates are required to abstain from voting on the ordinary resolutions approving the Land Restructuring Agreement at the EGM.

DESPATCH OF CIRCULAR

A circular containing, among other things, (1) further information regarding the details of the Land Restructuring Agreement; (2) a letter of recommendation from the Independent Board Committee to the Independent Shareholders; (3) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders; (4) a valuation report from the Independent Property Valuer and (5) a notice of the EGM and other information as required under the Listing Rules will be sent to the Shareholders. In order to allow sufficient time for the Company to prepare the circular and pending finalisation of the valuation report to be issued by the Independent Property Valuer, the circular will be despatched more than 15 business days after the publication of this announcement and is expected be despatched to the Shareholders on or before 28 February 2019.

1. BACKGROUND

Reference is made to the announcement made by the Company on 28 July 2016 in relation to the establishment of the A1 Company. On 24 December 2018, as part of an urban planning initiative driven by the Shenzhen People's Government, Ansujie and Antongjie (both being indirect wholly-owned subsidiaries of the Company) entered into the Land Restructuring Agreement with SZPL, QHSH, CMG, QHPF, CMSK, CMSA, the CMSK Subsidiaries and A2 Company (QHPF, CMSK, CMSA, the CMSK Subsidiaries and A2 Company are all subsidiaries of CMG, the ultimate controlling shareholder of the Company) to further coordinate and manage the various interest in land in Qianhai, Shenzhen, the PRC currently held by the CMG Group for the purpose of developing the Qianhai-Shekou Free Trade Zone with affiliates of QHSH through the establishment of another joint venture company.

As at the date of this announcement, the Land Holding Companies hold various interest in land in Qianhai, Shenzhen, the PRC with an aggregate land area of 2,911,141.6 square meters, including the CMP Land held by Antongjie and Ansujie with an aggregate land area of 965,958.41 square meters.

Pursuant to the Land Restructuring Agreement, among others, the Land Holding Companies agree the Aggregate CM Land to be resumed by QHSH and the New Land, after the Reclassification, to be granted to A2 Company. The Land Restructuring Agreement further provides that any indebtedness between the Land Holding Companies and A2 Company arising from the transactions contemplated under the Land Restructuring Agreement shall be subject to further negotiation between the Land Holding Companies and A2 Company. Accordingly, on 24 December 2018, A2 Company entered intothe Debt Confirmation Letter pursuant to which A2 Company agrees that it will pay to each of the Land Holding Companies an amount that is equal to the value of the New Land multiply by the corresponding proportion of land interest each Land Holding Company holds under the Aggregate CM Land.

2. LAND RESTRUCTURING AGREEMENT

Date

24 December 2018

Parties

• (1) SZPL

• (2) QHSH

• (3) CMG

• (4) QHPF

• (5) Land Holding Companies (including Antongjie, Ansujie, CMSK, CMSA and CMSK Subsidiaries)

• (6) A2 Company

Subject Matter

Pursuant to the Land Restructuring Agreement, among others, the Land Holding Companies agree the Aggregate CM Land to be resumed by QHSH and be reclassified for commercial usage for the purpose of future development by A2 Company and affiliates of QHSH.

As a result of the Reclassification, the value of the Aggregate CM Land (excluding the Exchange Land) will be increased from approximately RMB13.00 billion (equivalent to approximately HK$14.77 billion) to RMB92.53 billion (equivalent to approximately HK$105.15 billion).

Consideration

In consideration of the resumption of the Aggregate CM Land under the Land Restructuring Agreement, the parties have agreed that the following compensation shall be payable to the Land Holding Companies:

(i) with respect to the Aggregate CM Land (excluding the Exchange Land), the parties agreed that the New Land (being new land after the Reclassificationwith an area of approximately 425,300 square meters and a value of approximately RMB43.21 billion (equivalent to approximately HK$49.10 billion)) will be granted by QHSH to A2 Company, a wholly-owned subsidiary of A1 Company; and

(ii) in addition to the New Land, another piece of land located in Dachan Bay

Port Phase II (ɽᗟᝄಥਜɚಂ) with the same area and corresponding coastal length equivalent to the Exchange Land will be transferred to the Group. The exact location of the Dachan Bay Land and the transfer arrangement is subject to further agreement between SZPL, CMG, Antongjie and Ansujie.

The value of the New Land of RMB43.21 billion mentioned in paragraph (i) is the summation of (i) the original value of the Aggregate CM Land (excluding the Exchange Land) of approximately RMB13.00 billion and (ii) an agreed portion of land appreciation value which the parties agreed the Land Holding Companies will enjoy and such portion is calculated based on the following formula:

Z = ((A - B) x 95% x 40%) - C

where:

"Z" is the agreed portion of land appreciation value to be enjoyed by the Land Holding Companies;

"A" is the value of the Aggregate CM Land (excluding the Exchange Land) following the Reclassification, being approximately RMB92.53 billion;

"B" is the original value of the Aggregate CM Land (excluding the Exchange Land) of approximately RMB13.00 billion; and

"C" is an amount of approximately RMB14.91 million (equivalent to approximately HK$16.94 million), being the amount of rental compensation previously agreed between QHSH and QHPF.

The compensation is negotiated and agreed by the parties on an arm's length basis. In particular: (i) the original value of the Aggregate CM Land (excluding the Exchange Land) was determined using the average of (x) such value appraised by the valuer appointed by SZPL and QHSH and (y) such value appraised by the valuer appointed by CMG, calculated based on the value of the Aggregate CM Land (excluding the Exchange Land) as at 1 January 2015; (ii) the value of the Aggregate CM Land (excluding the Exchange Land) following the Reclassification was determined using the value appraised by the valuer appointed by SZPL and QHSH; (iii) the formula for calculating the