Yuzhou Properties : SCRIP DIVIDEND SCHEME IN RELATION TO THE TOTAL INTERIM DIVIDEND FOR THE SIX MONTHS ENDED 30 JUNE 2019

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action should be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your Shares in Yuzhou Properties Company Limited, you should at once hand this circular, together with the accompanying Election Form, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

No shareholder receiving a copy of this circular and/or an Election Form in any territory outside Hong Kong may treat the same as an invitation to elect for Shares unless in the relevant territory such invitation could lawfully be made to that shareholder without Yuzhou Properties Company Limited having to comply with any registration or other legal requirements, governmental or regulatory procedures or any other similar formalities. It is the responsibility of any shareholder outside Hong Kong who wishes to receive the Scrip Shares under the Scrip Dividend Scheme to comply with the laws of the relevant jurisdictions including any applicable procedures or any other similar formalities.

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 01628)

Executive Directors:	Registered Office:
Mr. Lam Lung On	Cricket Square
(Chairman and Chief Executive Officer)	Hutchins Drive
Ms. Kwok Ying Lan	P.O. Box 2681
Mr. Lin Conghui	Grand Cayman KY1-1111
Ms. Lam Yu Fong	Cayman Islands
Non-executive Director:	Principal Place of Business in Hong Kong:
Ms. Xie Mei	6th Floor
	Yardley Commercial Building

Independent Non-executive Directors:	3 Connaught Road West
Mr. Lam Kwong Siu
Sheung Wan
Mr. Wee Henny Soon Chiang
Hong Kong
Dr. Zhai Pu
	23 October 2019
To the shareholders of Yuzhou Properties Company Limited
Dear Sir or Madam,

SCRIP DIVIDEND SCHEME IN RELATION TO

THE TOTAL INTERIM DIVIDEND FOR THE SIX MONTHS ENDED

30 JUNE 2019

INTRODUCTION

On 26 August 2019, it was announced that the board of directors (the "Board") of Yuzhou Properties Company Limited (the "Company") has resolved to declare an interim dividend of HK12 cents per ordinary share of HK$0.10 each of the Company (the "Share") and a special interim dividend of HK3 cents per Share (for the 10th anniversary of listing of the Company) for the six months ended 30 June 2019 (collectively, the "Total Interim Dividend") to eligible shareholders of the Company (the "Eligible Shareholders") whose names appear on the register of members of the Company (the "Register of Members") on 27 September 2019 (the "Record Date"), with an option to receive the Total Interim Dividend wholly or partly in new and fully paid Shares (the "Scrip Shares") in lieu of cash (the "Scrip Dividend Scheme").

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The purpose of this circular is to set out the procedures which apply in relation to the Scrip Dividend Scheme and the actions which should be taken by the Eligible Shareholders in relation thereto.

PARTICULARS OF THE SCRIP DIVIDEND SCHEME

Pursuant to the Scrip Dividend Scheme, the Eligible Shareholders have the following choices in respect of the Total Interim Dividend:

1. cash of HK15 cents for each Share held on the Record Date;
2. an allotment of the Scrip Shares credited as fully paid Shares and having an aggregate market value (calculated as described below) equal to, save for adjustment for fractions, the total amount of the Total Interim Dividend which such Eligible Shareholder would otherwise be entitled to receive in cash; or
3. partly in cash and partly in the Scrip Shares.

The number of the Scrip Shares to be allotted pursuant to the Scrip Dividend Scheme was calculated by reference to the market value of HK$3.202 per Share which was the average of the closing prices per Share (the "Average Closing Price") as quoted on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") for the five consecutive trading days commencing from, and including, 23 September 2019 (being the day when the Shares were first quoted ex-dividend). Accordingly, the number of the Scrip Shares which the Eligible Shareholders, who have elected for the Scrip Shares, are entitled to receive in respect of the existing Shares registered under their names as at the Record Date will be calculated as follows:

Number of the Scrip	Number of existing Shares		HK15 cents
= held on the Record Date and	×	(Total Interim Dividend per Share)
Shares to be received
elected for the Scrip Shares		HK$3.202 (Average Closing Price)

The Register of Members was closed from Wednesday, 25 September 2019 to Friday, 27 September 2019, both days inclusive, for the purpose of determining Eligible Shareholders who are entitled to receive the Total Interim Dividend.

The last day and time on which transfers were accepted for registration for participation in the Scrip Dividend Scheme was Tuesday, 24 September 2019 at 4:30 p.m. The number of the Scrip Shares to be issued to each Eligible Shareholder will be rounded down to the nearest whole number. Fractional entitlements to the Scrip Shares in respect of alternative (ii) above will be disregarded and the benefit thereof will accrue to the Company.

The Scrip Shares issued to the Eligible Shareholders pursuant to an election to receive all or part of their Total Interim Dividend in Scrip Shares may be allocated in odd lots (of fewer than a board lot of 1,000 Shares). No special dealing arrangements will be put in place by the Company to facilitate the trading or disposal of the Scrip Shares issued in odd lots. Eligible Shareholders should be aware that odd lots usually trade at a discount to the price of board lots.

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Based on 5,031,534,998 Shares in issue on the Record Date, if all the Eligible Shareholders choose to receive the Scrip Shares instead of cash in respect of the Total Interim Dividend, the Company will issue 235,705,886 Scrip Shares, representing approximately 4.68% of the existing issued share capital of the Company as at the Record Date and approximately 4.47% of the then issued share capital of the Company as enlarged by the issue of the Scrip Shares. The Scrip Shares to be issued pursuant to the Scrip Dividend Scheme will rank pari passu in all respects with the existing Shares except that they will not be entitled to the Total Interim Dividend.

As at 18 October 2019, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular (the "Latest Practicable Date"), there are outstanding options for subscription of 114,058,720 Shares under the share option scheme of the Company adopted on 24 May 2010. Save as disclosed above, as at the Latest Practicable Date, the Company has no other outstanding options, warrants or other securities in issue which are convertible into or giving rights to subscribe for, convert or exchange into, any Shares, as the case may be.

ADVANTAGES OF THE SCRIP DIVIDEND SCHEME

The Scrip Dividend Scheme will give the Eligible Shareholders the opportunity to increase their investment in the Company at the market value without incurring brokerage fees, stamp duty and related dealing costs. The Scrip Dividend Scheme will also benefit the Company to the extent that such cash which would otherwise have been paid to Eligible Shareholders who elect to receive the Scrip Shares will be retained for use as working capital by the Company.

EFFECT OF THE SCRIP DIVIDEND SCHEME

The Eligible Shareholders should note that the Scrip Shares to be issued pursuant to the Scrip Dividend Scheme may give rise to discloseable requirements under the provisions of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). The Eligible Shareholders, who are in any doubt as to whether these provisions would affect them as a result of their election of receiving the Total Interim Dividend in the form of the Scrip Shares, are recommended to seek their own professional advice.

ELECTION FORM

An election form in relation to the Scrip Dividend Scheme (the "Election Form") is enclosed for use by the Eligible Shareholders who wish to receive the Total Interim Dividend wholly or partly in the form of the Scrip Shares.

If you elect to receive the Total Interim Dividend wholly in cash, you do not need to take any action. Therefore, please do not return the Election Form.

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If you elect to receive the Total Interim Dividend wholly in the form of the Scrip Shares, you should complete and return the Election Form in accordance with the instructions printed thereon.

If you elect to receive the Total Interim Dividend partly in cash and partly in the form of the Scrip Shares, you should complete and return the Election Form in accordance with the instructions printed thereon. In particular, please enter in Box C of the Election Form with the number of Shares registered in your name on the Record Date for which you wish the Total Interim Dividend to be paid to you in the form of the Scrip Shares. If you do not specify the number of Shares for which you wish to receive the Total Interim Dividend in the form of the Scrip Shares or if your specified number is greater than your registered holding on the Record Date, in your signed and returned Election Form, you will be deemed to have elected to receive the Scrip Shares only in respect of ALL the Shares registered in your name on the Record Date, and you will receive the Total Interim Dividend in the Scrip Shares only.

The Election Form should be completed in accordance with the instructions printed thereon and returned to the Company's Branch Share Registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queens's Road East, Wan Chai, Hong Kong, not later than 4:30 p.m. on Thursday, 7 November 2019. Failure to complete and return the Election Form in accordance with the instructions printed thereon will result in the relevant Eligible Shareholder's Total Interim Dividend being paid wholly in cash. No acknowledgement of receipt of the Election Form will be issued. No elections in respect of the Total Interim Dividend may, after the relevant Election Forms are signed and returned to the Company's Branch Share Registrar, be in any way withdrawn, revoked, superseded or altered.

If there is a tropical cyclone warning signal number 8 or above, or a "black" rainstorm warning (either one of the warnings is referred to as the "Warning") in force, the above deadline for submission of the Election Form will be changed as follows:

1. If the Warning is in force in Hong Kong at any local time before 12:00 noon and no longer in force after 12:00 noon on Thursday, 7 November 2019: the deadline for submission of the Election Form will be 5:00 p.m. on Thursday, 7 November 2019.
2. If the Warning is in force in Hong Kong at any local time between 12:00 noon and 4:30 p.m. on Thursday, 7 November 2019: the deadline for submission of the Election Form will be rescheduled to 4:30 p.m. on the next business day which does not have any Warning in force at any time between 9:00 a.m. and 4:30 p.m.

SHAREHOLDERS RESIDING OUTSIDE HONG KONG

Based on the Register of Members as at the Record Date, there was one overseas Eligible Shareholder with registered address in the People's Republic of China (the "PRC") and there were no other Eligible Shareholders whose registered address is outside of Hong Kong.

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Based on the opinion of the Company's legal advisers on the laws of the PRC, the Company is advised that there are no legal restrictions under the laws or regulatory requirements of the PRC with respect to the issuing of the Scrip Shares and sending this circular and the Election Form to the Eligible Shareholder with registered address located in the PRC. Accordingly, no Eligible Shareholder will be excluded from the receipt of the Scrip Shares. However, it is the responsibility of any Eligible Shareholder receiving the Scrip Shares to satisfy itself as to full observance of the laws, regulations and requirements of any relevant territory, including obtaining any governmental or other consents which may be required.

No shareholder receiving a copy of this circular and/or an Election Form in any territory outside Hong Kong may treat the same as an invitation to elect for Shares unless in the relevant territory such invitation could lawfully be made to that shareholder without the Company having to comply with any registration or other legal requirements, governmental or regulatory procedures or any other similar formalities. It is the responsibility of any shareholder outside Hong Kong who wishes to receive the Scrip Shares under the Scrip Dividend Scheme to comply with the laws of the relevant jurisdictions including any applicable procedures or any other similar formalities. Persons who receive the Scrip Shares in lieu of the cash dividend must also comply with any restrictions on the transfer or sale of the Shares which may apply outside Hong Kong.

For the avoidance of doubt, the Scrip Shares are not being offered to the public and the Election Form is not transferable.

LISTING AND DEALINGS

The issuance of the Scrip Shares pursuant to the Scrip Dividend Scheme is conditional upon the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in the Scrip Shares to be allotted and issued pursuant to the Scrip Dividend Scheme. Application has been made to the Listing Committee of the Stock Exchange for a listing of and permission to deal in the Scrip Shares.

It is expected that the relevant dividend warrants and share certificates will be sent by ordinary post to the Eligible Shareholders on Thursday, 28 November 2019 and at the risk of the Eligible Shareholders. Dealing of the Scrip Shares on the Stock Exchange is expected to commence on Friday, 29 November 2019.

Subject to the granting of the listing of, and permission to deal in the Scrip Shares to be allotted and issued pursuant to the Scrip Dividend Scheme on the Stock Exchange, such Scrip Shares will be accepted as eligible securities by Hong Kong Securities Clearing Company Limited for deposit, clearance and settlement in the Central Clearing and Settlement System (the "CCASS"). All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. Dealing in the Scrip Shares may be settled through CCASS and you should seek the advice of your stockbroker or other professional adviser for details of these settlement arrangements and how such settlement arrangements will affect your rights and interests.

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The Shares are listed and dealt on the Stock Exchange and the following debt securities of the Company are listed on the Stock Exchange:

1. US$200 million 5.50% senior notes due 2020 issued in July 2019;
2. US$375 million 6.375% senior notes due 2021 issued in March 2018;
3. US$625 million 7.90% senior notes due 2021 issued in May and July 2018;
4. US$350 million 6.00% senior notes due 2022 issued in January 2017;
5. US$500 million 8.625% senior notes due 2022 issued in January 2019;
6. US$650 million 6.00% senior notes due 2023 issued in October 2016 and July 2019;
7. US$500 million 8.5% senior notes due 2023 issued in February 2019;
8. US$500 million 8.5% senior notes due 2024 issued in February 2019; and
9. US$300 million senior perpetual securities issued in September 2017.

Save as disclosed above, no part of the equity or debt securities of the Company is listed or dealt on any other stock exchange nor listing or permission to deal on any other stock exchange is being or proposed to be sought.

GENERAL

Whether it is to your advantage to receive the Scrip Shares or cash shall depend on your own individual circumstances, and the decision in this regard and all effects resulting therefrom are the responsibility of each Eligible Shareholder. Eligible Shareholders who are trustees are recommended to take professional advice as to whether the choice of receiving the Scrip Shares is within their powers and as to its effect having regard to the terms of the relevant trust instrument. All the Eligible Shareholders residing outside Hong Kong should consult their professional advisers as to whether they are permitted to receive the Total Interim Dividend in scrip form or whether any government or other consents are required or other formalities need to be observed. If you are in any doubt as to any aspect of this circular or as to the action should be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

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TIMETABLE

Set out below is a summary of the events in relation to the Scrip Dividend Scheme:

Event

Date

Last day of dealings in the Shares on

a cum-dividend basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 20 September 2019

Commencement of dealings in the Shares on

an ex-entitlement basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 23 September 2019

Fix the market value of a Scrip Share

(five consecutive trading day average) . . . . . . . . . . . . . . . . . . . Monday, 23 September 2019 to Friday, 27 September 2019 (both dates inclusive)

Latest time for lodging transfers of the Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4:30 p.m. on Tuesday, 24 September 2019

Closure of the Register of Members for the purpose of determining shareholders' respective entitlements to

the Total Interim Dividend. . . . . . . . . . . . . . . . . . . . . . . . . .Wednesday, 25 September 2019 to Friday, 27 September 2019 (both days inclusive)

Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 27 September 2019

Latest time and date for return of the Election Form . . . . . . . . . . . . . . . . . . . . . . . . .4:30 p.m. on Thursday, 7 November 2019

Expected despatch of Total Interim Dividend warrants or share certificates for Scrip Shares to

the Eligible Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 28 November 2019

Expected commencement of dealings in

the Scrip Shares on the Stock Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Friday, 29 November 2019

Notes:

1. References to time and dates in this circular are to Hong Kong time and dates.

Yours faithfully,

By order of the Board

Yuzhou Properties Company Limited

Lam Lung On

Chairman

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