Beijing Enterprises Medical and Health Industry : DISCLOSEABLE AND CONNECTED TRANSACTION - ACQUISITION BY WAY OF LOAN CAPITALISATION AND NOTICE OF EXTRAORDINARY GENERAL MEETING

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 to be taken, you should consult a stockbroker or other registered dealer in securities, a bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Beijing Enterprises Medical and Health Industry Group Limited, you should at once hand this circular, together with the enclosed form of proxy, 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 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.

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2389)

DISCLOSEABLE AND CONNECTED TRANSACTION ACQUISITION BY WAY OF LOAN CAPITALISATION AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to

the Independent Board Committee and

the Independent Shareholders

Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed "Definitions" in this circular.

A letter from the Board is set out on pages 6 to 14 of this circular and a letter from the Independent Board Committee containing its recommendations to the Independent Shareholders is set out on pages 15 to 16 of this circular. A letter from Euto Capital Partners Limited, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, containing its advice to the Independent Board Committee and the Independent Shareholders, is set out on pages 17 to 38 of this circular.

A notice convening the EGM to be held at Unit 2704, 27/F., 909 Cheung Sha Wan Road, Cheung Sha Wan, Kowloon, Hong Kong on Tuesday, 25 August 2020 at 11:00 a.m. is set out on pages EGM-1 to EGM-2 of this circular. A form of proxy for use at the EGM is also enclosed. Such form of proxy is also published on the websites of Hong Kong Exchanges and Clearing Limited (http://www.hkexnews.hk) and the Company (http://www.bemh.com.hk).

Whether or not you are able to attend the EGM, you should complete and sign the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company's branch share registrar in Hong Kong, Union Registrars Limited, at Suites 3301-04, 33/F., Two Chinachem Exchange Square, 338 King's Road, North Point, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

PRECAUTIONARY MEASURES FOR THE EGM

To safeguard the health and safety of the attendees who will attend the EGM and to prevent the spreading of the coronavirus (COVID-19) pandemic, the following measures will be implemented at the EGM:

• mandatory body temperature check;
• compliance with the latest epidemic prevention policy requirement of the Hong Kong government and presentation of the corresponding health certificate;
• mandatory wearing of surgical face masks; and
• no refreshments for attendees.

The Company reserves the right to deny entry into or require any person to leave the EGM venue if such person: (i) refuses to comply with any of the above precautionary measures; (ii) is having a body temperature of over 37.4 degree Celsius; and/or (iii) has any flu-like symptoms. For the health and safety of shareholders of the Company, the Company would like to encourage shareholders of the Company to appoint the chairman of the EGM as their proxy to vote on the proposed resolution at the EGM, instead of attending the EGM in person.

6 August 2020

		CONTENTS
			Page
Precautionary Measures for the Extraordinary General Meeting . . . . . . . . . . .	1
Definitions . . . .	. . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Letter from the Board .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . .	15
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . .	17
Appendix I	-	Valuation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	39
Appendix II	-	General Information . . . . . . . . . . . . . . . . . . . . . . . . . . .	51
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

- i -

PRECAUTIONARY MEASURES FOR THE EXTRAORDINARY GENERAL MEETING

In view of the outbreak of coronavirus disease (COVID-19) pandemic (the "COVID-19Pandemic"), to safeguard the health and safety of shareholders of the Company who might be attending the EGM in person, the Company will implement the following precautionary measures at the EGM:

• Each attendee will be required to undergo a mandatory body temperature check before entering the EGM venue. Any person with a body temperature above 37.4 degree Celsius, or is exhibiting flu-like symptoms, may be denied entry into the EGM venue and be required to leave the EGM venue.
• Shareholders, proxies and other attendees are required to comply with the latest epidemic prevention policy requirements of the Hong Kong government and present the corresponding health certificate. Any person who does not comply with this requirement will be required to leave the EGM venue.
• Shareholders, proxies and other attendees are required to wear surgical face masks inside the EGM venue at all times. Any person who does not comply with this requirement will be required to leave the EGM venue.
• No refreshments will be served at the EGM.

Shareholders, proxies and other attendees who are feeling unwell are advised not to attend the EGM.

For the health and safety of shareholders of the Company, the Company would like to encourage shareholders to appoint the chairman of the EGM as their proxy to vote on the proposed resolution at the EGM, instead of attending the EGM in person.

As the COVID-19 Pandemic continues to evolve, the Company will closely monitor the situation and reserves the right to take further measures as appropriate in order to minimise any risk to the shareholders of the Company and others attending the EGM and to comply with any requirements or recommendations of any government agencies from time to time. Shareholders are advised to check the Company's website at http://www.bemh.com.hk for further announcements and updates on the EGM arrangements that may be issued.

The Company seeks the understanding and cooperation of all the shareholders to minimise the risk of community spread of COVID-19 Pandemic.

- 1 -

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have

the following meanings:

"1136601 BC Ltd."	a British Columbia company which is an investment
	holding company 100% beneficially owned by Mr. Yu
	Luning and which is, to the best knowledge,
	information and belief of the directors of the
	Company, independent of the Company and
	connected persons of the Company
"associate(s)"	has the meaning ascribed to it in the Listing Rules
"Board"	the board of directors of the Company
"CAD"	Canadian dollar, the lawful currency of Canada
"Company"	Beijing Enterprises Medical and Health Industry
	Group Limited 北控醫療健康產業集團有限公司, a
	company incorporated in Cayman Islands with
	limited liability and the shares of which are listed on
	the Main Board of the Stock Exchange (stock code:
	2389)
"Completion"	completion of the transactions contemplated under
	the Listco Loan Capitalisation Agreement including
	the issue of the Listco Capitalisation Shares to the
	Company or its nominee pursuant to the terms of the
	Listco Loan Capitalisation Agreement
"Completion Date"	the date on which Completion occurs
"connected person(s)"	has the meaning ascribed to it in the Listing Rules
"EGM" or "Extraordinary	the extraordinary general meeting to be convened to
General Meeting"	consider, and if thought fit, to approve the Listco
	Loan Capitalisation Agreement and the transactions
	contemplated thereunder, or any adjournment thereof
"Group"	the Company and its subsidiaries
"Hong Kong"	the Hong Kong Special Administrative Region of the
	People's Republic of China
"Independent Board	an independent Board committee comprising all the
Committee"	independent non-executive directors of the Company

- 2 -

	DEFINITIONS
"Independent Financial	Euto Capital Partners Limited, a corporation licensed
Adviser" or "Euto Capital"	to carry out Type 6 (advising on corporate finance)
	regulated activity under the SFO and the independent
	financial adviser of the Company to advise the
	Independent Board Committee and the Independent
	Shareholders in respect of the Listco Loan
	Capitalisation Agreement and the transactions
	contemplated thereunder
"Independent Shareholders"	the shareholders of the Company other than those
	who have a material interest in the Listco Loan
	Capitalisation Agreement and the transactions
	contemplated thereunder
"Jinfu"	Jinfu N.A. Real Estate Investment Limited, a company
	incorporated in Hong Kong with limited liability
"Latest Practicable Date"	3 August 2020, being the latest practicable date for the
	purpose of ascertaining certain information contained
	in this circular prior to its publication
"Listco Capitalisation Shares"	8,344,928 common shares of the Target Company to be
	issued to the Company or its nominee upon
	Completion
"Listco Loan Capitalisation	the agreement dated 9 July 2020 between the
Agreement"	Company and the Target Company pursuant to which
	the Loan and the interests accrued thereon shall be
	capitalised into the Listco Capitalisation Shares to be
	issued to the Company or its nominee
"Listing Rules"	the Rules Governing the Listing of Securities on The
	Stock Exchange of Hong Kong Limited
"Loan"	a three-year term loan in the principal amount of
	CAD13,400,000 provided by the Company to Jinfu
	under the Original Loan Agreement and which was
	subsequently novated and assigned to the Target
	Company pursuant to the terms of the Supplemental
	Loan Agreement
"Mr. Gu"	Mr. Gu Shan Chao, an executive director of the
	Company. Mr. Gu is a personal guarantor in respect of
	the Loan

- 3 -

	DEFINITIONS
"Mr. Jianxin Dong"	Mr. Jianxin Dong who is an affiliate of Mr. Yu Luning
	and who is, to the best knowledge, information and
	belief of the directors of the Company, independent of
	the Company and connected persons of the Company
"Mr. Liu"	Mr. Liu Xue Heng, an executive director of the
	Company. Mr. Liu is a personal guarantor in respect
	of the Loan
"Mr. Yu Guoning"	Mr. Yu Guoning, who is an affiliate of Mr. Yu Luning
	and who is, to the best knowledge, information and
	belief of the directors of the Company, independent of
	the Company and connected persons of the Company
"Mr. Yu Luning"	Mr. Yu Luning, who is, to the best knowledge,
	information and belief of the directors of the
	Company, independent of the Company and
	connected persons of the Company. Mr. Yu Luning is a
	personal guarantor in respect of the Loan
"Mr. Zhu"	Mr. Zhu Shi Xing, an executive director of the
	Company. Mr. Zhu is a personal guarantor in respect
	of the Loan
"Original Loan Agreement"	the loan agreement dated 17 July 2017 entered into by,
	among other parties, the Company and Jinfu in
	relation to the Loan
"Other Capitalisation Shares"	5,222,998 common shares of the Target Company to be
	issued to the Yu Parties, Jinfu or their respective
	nominees upon completion of the Other Loan
	Capitalisation Agreements
"Other Loan Capitalisation	the agreement dated 9 July 2020 between each of the
Agreements"	Yu Parties and Jinfu on the one hand, and the Target
	Company on the other hand, pursuant to which the
	loans outstanding principal and the interests accrued
	thereon (if applicable) in the aggregate amount of
	CAD10,916,065 shall be capitalised into the Other
	Capitalisation Shares to be issued to the Yu Parties,
	Jinfu or their respective nominees
"Property"	Royal Towers, a property located at 140 Sixth Street,
	New Westminster, British Columbia, Canada

- 4 -

	DEFINITIONS
"SFO"	the Securities and Futures Ordinance (Chapter 571 of
	the Laws of Hong Kong)
"Shareholders Agreement"	the agreement to be entered into by and among the
	Company, Jinfu, the Yu Parties and the Target
	Company upon Completion
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Subscription Price"	the subscription price of CAD2.09 per Listco
	Capitalisation Share
"Supplemental Loan	the supplemental loan agreement dated 20 July 2017
Agreement"	entered into by and among the Company, Jinfu and
	the Target Company in relation to the novation and
	assignment of the Loan from Jinfu as original
	borrower to the Target Company as new borrower
"Target Company"	1121695 BC Ltd., a British Columbia company
"Valuer"	BCS Real Estate
"Yu Parties"	1136601 BC Ltd., Mr. Jianxin Dong and Mr. Guoning
	Yu
"%"	per cent.

- 5 -

LETTER FROM THE BOARD

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2389)

Executive Directors:	Registered Office:
Mr. Zhu Shi Xing (Chairman)	Century Yard, Cricket Square
Mr. Liu Xue Heng (Joint Chief Executive Officer)	Hutchins Drive
Mr. Zhang Jing Ming (Joint Chief Executive Officer)	P.O. Box 2681 GT George Town
Mr. Gu Shan Chao	Grand Cayman
Mr. Siu Kin Wai	British West Indies
Mr. Wang Zheng Chun
Mr. Hu Shiang Chi	Head Office and Principal Place of
	Business in Hong Kong:
Independent Non-executive Directors:	Unit 2704, 27/F.
Mr. Gary Zhao	909 Cheung Sha Wan Road
Mr. Robert Winslow Koepp	Cheung Sha Wan
Mr. Tse Man Kit, Keith	Kowloon, Hong Kong
Mr. Wu Yong Xin
Mr. Zhang Yun Zhou
	6 August 2020
To the Shareholders
Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION ACQUISITION BY WAY OF LOAN CAPITALISATION AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

References are made to (i) the announcement of the Company dated 17 July 2017 in relation to the Loan provided by the Company to Jinfu pursuant to the terms of the Original Loan Agreement; (ii) the announcement of the Company dated 9 July 2020 in relation to the Listco Loan Capitalisation Agreement; (iii) the announcement of the Company dated 16 July 2020 in relation to the appointment of Euto Capital as the independent financial adviser of the Company to advise the Independent Board Committee and the Independent Shareholders in respect of the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder and (iv) the announcement of the Company dated 31 July 2020 in relation to the delay in despatch of this circular.

On 20 July 2017, the Company, Jinfu and the Target Company, a 78.4% owned subsidiary of Jinfu, entered into the Supplemental Loan Agreement pursuant to which Jinfu had novated all of its rights and obligations, and the Target Company had assumed all of Jinfu's rights and obligations, in and under the Original Loan Agreement.

- 6 -

LETTER FROM THE BOARD

As at the date of the Listco Loan Capitalisation Agreement, the Target Company was indebted to the Company in the principal amount of CAD13,400,000, with interest accrued thereon in the amount of CAD3,990,630.14. The maturity date of the Loan was 17 July 2020.

On 9 July 2020, the Company and the Target Company entered into the Listco Loan Capitalisation Agreement pursuant to which the Loan in the outstanding principal amount of CAD13,400,000 and the interests accrued thereon shall be capitalised into the Listco Capitalisation Shares to be issued to the Company or its nominee.

On 9 July 2020, each of the Yu Parties and Jinfu on the one hand, and the Target Company on the other hand, entered into the Other Loan Capitalisation Agreements, pursuant to which the loans outstanding principal amount and the interests accrued thereon (if applicable) in the aggregate amount of CAD10,916,065 shall be capitalised into the Other Capitalisation Shares to be issued to the Yu Parties, Jinfu or their respective nominees. The Listco Loan Capitalisation Agreement and the Other Loan Capitalisation Agreements are inter-conditional, and completion of the issuance of the Listco Capitalisation Shares under the Listco Loan Capitalisation Agreement will occur simultaneously with completion of the issue of the Other Capitalisation Shares under the Other Loan Capitalisation Agreements.

The purpose of this circular is to provide you with, among other things, (i) the details of the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder; (ii) the recommendations from the Independent Board Committee regarding the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder;

1. the letter of advice from the Independent Financial Adviser regarding the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder; (iv) property valuation report prepared by the Valuer in respect of the Property; (v) general information of the Group; and (vi) a notice convening the EGM.

THE LISTCO LOAN CAPITALISATION AGREEMENT

The principal terms of the Listco Loan Capitalisation Agreement are as follows:

Subject matter

The Loan in the outstanding principal amount of CAD13,400,000 and the interests accrued thereon shall be capitalised into the Listco Capitalisation Shares to be issued to the Company or its nominee on the Completion Date.

Pursuant to the Listco Loan Capitalisation Agreement, the Target Company has conditionally agreed to issue to the Company, and the Company has conditionally agreed to subscribe for, the Listco Capitalisation Shares at the issue price of CAD2.09 per Listco Capitalisation Share. The subscription amount payable by the Company under the Listco Loan Capitalisation Agreement shall be satisfied by capitalising the entire Loan and the interests accrued thereon.

- 7 -

LETTER FROM THE BOARD

The Listco Capitalisation Shares will represent 47.47% of the total issued shares of the Target Company as enlarged by the issue of the Listco Capitalisation Shares and Other Capitalisation Shares. Upon Completion, the Group will, by way of subscribing for the Listco Capitalisation Shares, acquire 47.47% equity interest in the Target Company. The principal asset of the Target Company is the Property.

Subscription Price

The subscription price of CAD2.09 per Listco Capitalisation Share represents a discount of approximately 15% to the adjusted net assets value per share of the Target Company of approximately CAD2.46 as at 31 May 2020.

The Subscription Price was determined after arm's length negotiation between the Company and the Target Company with reference to the fair value of the Property and taking into consideration the illiquidity of the Property. The directors of the Company (excluding Mr. Zhu, Mr. Liu and Mr. Gu who had abstained from voting at the Board resolutions approving the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder, but including the independent non-executive directors of the Company who have taken into consideration the advice of the Independent Financial Adviser) consider that the terms of the Listco Loan Capitalisation Agreement (including the Subscription Price) are fair and reasonable based on the current market conditions and in the interests of the Company and its shareholders as a whole.

Ranking of the Listco Capitalisation Shares

The Listco Capitalisation Shares and the Other Capitalisation Shares, when issued, shall rank pari passu in all respects with the shares of the Target Company in issue.

Conditions precedent

Completion of the Listco Loan Capitalisation Agreement is subject to the fulfilment of the following conditions:

1. the passing of all necessary resolutions by the Board and the shareholders of the Company who are not required to abstain from voting on the relevant resolutions under the Listing Rules and other applicable laws and regulations to approve the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder; and
2. all of the Other Loan Capitalisation Agreements becoming unconditional (except insofar as they each remain conditional on completion of the Listco Loan Capitalisation Agreement and the remaining Other Loan Capitalisation Agreements).

If the above conditions precedent are not fulfilled on or prior to 31 August 2020 or such later date as may be agreed between the Target Company and the Company, the Listco Loan Capitalisation Agreement shall terminate and neither party shall have any claim against the other for costs, damages, compensation or otherwise under the Listco Loan Capitalisation Agreement.

- 8 -

LETTER FROM THE BOARD

Completion

Subject to the fulfilment of the above conditions precedent, Completion shall take place on the third business day after the date on which the above conditions precedent are fulfilled or such other date and/or time as the parties may agree.

Upon Completion, the funds advanced to the Target Company by, or otherwise owing by the Target Company to, the Company under the Original Loan Agreement (as supplemented by the Supplemental Loan Agreement), for the avoidance of doubt, comprising the outstanding principal amount and the interest accrued thereon up to the Completion Date, shall be repaid or paid, as the case may be, in full and such indebtedness shall be fully satisfied and extinguished such that no further amount remains owing thereunder.

Upon completion of the Listco Loan Capitalisation Agreement and the Other Loan Capitalisation Agreements, the Target Company shall be held as to 47.47% by the Company and will become an associate company of the Company and accounted for under equity method (as defined in the Hong Kong Financial Reporting Standards) and its financial statements will not be consolidated into the financial statements of the Company.

SHAREHOLDING OF THE TARGET COMPANY AND THE SHAREHOLDERS

AGREEMENT

Upon completion of the Listco Loan Capitalisation Agreement and the Other Loan Capitalisation Agreements, the Target Company will be held as to 47.47%, 21.85% and 30.68% by the Group, the Yu Parties and Jinfu respectively.

The shareholding structure of the Target Company immediately before and immediately after Completion is set out below.

Immediately before Completion

Jinfu		1136601 BC Ltd.

78.40%21.60%

Target Company

Property

- 9 -

LETTER FROM THE BOARD

Immediately after Completion

Company		1136601 BC Ltd.		Mr. Jianxin Dong		Mr. Guoning Yu		Jinfu
	47.47%			8.45%			11.66%		1.73%		30.68%

Target Company

Property

Upon completion of the Listco Loan Capitalisation Agreement and the Other Loan Capitalisation Agreements, the Target Company, the Yu Parties, Jinfu and the Company shall enter into the Shareholders Agreement to regulate the shareholders' respective rights and obligations in respect of their shares in the Target Company. Pursuant to the Shareholders Agreement:

1. the board of directors of the Target Company shall be composed of three directors, of whom one will be nominated by the Yu Parties, one will be nominated by Jinfu and one will be nominated by the Company; and
2. subject to the terms of the Shareholders Agreement, no shareholder of the Target Company shall transfer any of its shares unless that shareholder first offers to each other shareholder the prior right to purchase, receive or otherwise acquire the shares.

REASONS FOR AND BENEFITS OF THE LISTCO LOAN CAPITALISATION

AGREEMENT

Under the Original Loan Agreement, the Target Company shall repay the outstanding principal amount of the Loan and the interests accrued thereon to the Company on 17 July 2020.

As the amount of the consideration (being the outstanding principal amount of the Loan and the interests accrued thereon) would represent discount to the financial position of the Target Company after completion of the Listco Loan Capitalisation Agreement and the Other Loan Capitalisation Agreements, the Board (excluding Mr. Zhu, Mr. Liu and Mr. Gu who had abstained from voting at the Board resolutions approving the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder, but including the independent non-executive directors of the Company who have taken into consideration the advice of the Independent Financial Adviser) is of the view that the terms of the Listco Loan Capitalisation Agreement and the transactions contemplated therein are fair and reasonable, on normal commercial terms and in the interests of the Company and its shareholders as a whole.

- 10 -

LETTER FROM THE BOARD

INFORMATION ON THE PARTIES TO THE LISTCO LOAN CAPITALISATION

AGREEMENT

The Group

The Company is an investment holding company and the Group is principally engaged in provision of medical care, health care and geriatric care related services and products.

The Target Company

As at the Latest Practicable Date, the Target Company is a 78.4% owned subsidiary of Jinfu, which is in turn held as to 25.5%, 25.5% and 28.1% by Mr. Zhu, Mr. Liu and Mr. Gu respectively, each an executive director of the Company.

Based on the unaudited financial statements of the Target Company, the unaudited net liabilities value of the Target Company as at 31 December 2019 was approximately CAD9,178,831. The financial information of the Target Company for the two years ended

31 December 2019 based on its unaudited financial statements is as follows:

	For the year ended
	31 December
	2019	2018
	CAD	CAD
Net loss before taxation and extraordinary items	4,266,526	5,683,996
Net loss after taxation and extraordinary items	4,266,526	5,683,996

The Loan had been provided by the Group to Jinfu initially, which subsequently novated its obligations under the Loan to the Target Company, for the acquisition of the Property, which had been acquired at the original cost of CAD50,000,000. As at the Latest Practicable Date, the principal asset of the Target Company is the Property located at 140 Sixth Street, New Westminster, British Columbia, Canada. The Property is a mixed-used complex comprised of 135 suite apartment building, 20,848 sf commercial component and

1.1 acre high-density development site. As at 2 June 2020, the fair value of the Property as assessed by independent valuer is CAD70,450,000.

Subject to and upon Completion, the Company would acquire 47.47% interest in the Target Company, whose principal asset is the Property. As at the Latest Practicable Date, the Company intended, and, to the best knowledge of the directors of the Company, the Yu Parties and Jinfu also intended, to procure the Target Company to dispose of the Property for a consideration of approximately equal to the fair value of the Property, subject to prevailing market circumstances and as and when suitable opportunities arise.

- 11 -

LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS

As at the Latest Practicable Date, the Target Company is a 78.4% owned subsidiary of Jinfu, which is in turn held as to 25.5%, 25.5% and 28.1% by Mr. Zhu, Mr. Liu and Mr. Gu respectively, each an executive director of the Company. The Target Company is an associate of the aforesaid directors of the Company and a connected person of the Company.

As one or more of the applicable percentage ratios (as defined under the Listing Rules) in respect of the Listco Loan Capitalisation Agreement is more than 5% and all of such ratios are less than 25%, the Listco Loan Capitalisation Agreement constitutes a discloseable and connected transaction for the Company and is subject to the reporting, announcement, circular and independent shareholders' approval requirements under the Listing Rules.

At the meeting of the Board held to approve the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder, each of Mr. Zhu, Mr. Liu and Mr. Gu is considered as having a material interest in the transactions contemplated under the Listco Loan Capitalisation Agreement. Accordingly, each of Mr. Zhu, Mr. Liu and Mr. Gu had abstained from voting on the relevant Board resolutions for approving the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder.

INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

An Independent Board Committee has been formed to consider and advise the Independent Shareholders as to whether the terms of the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder are fair and reasonable and are in the interests of the Company and its shareholders as a whole, and to advise the Independent Shareholders as to how to vote at the EGM.

Euto Capital has been appointed as the independent financial adviser of the Company to advise the Independent Board Committee and the Independent Shareholders in this regard.

EGM

The EGM will be convened and held at Unit 2704, 27/F., 909 Cheung Sha Wan Road, Cheung Sha Wan, Kowloon, Hong Kong on Tuesday, 25 August 2020 at 11:00 a.m., for the Independent Shareholders to consider and, if thought fit, to approve the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder.

A notice for convening the EGM to be held at Unit 2704, 27/F., 909 Cheung Sha Wan Road, Cheung Sha Wan, Kowloon, Hong Kong on Tuesday, 25 August 2020 at 11:00 a.m. is set out on pages EGM-1 to EGM-2 of this circular. A form of proxy for the EGM is also enclosed with this circular. Whether or not you are able to attend the EGM, you should complete and sign the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company's branch share registrar in Hong Kong, Union Registrars Limited, at Suites 3301-04, 33/F., Two Chinachem Exchange Square, 338 King's

- 12 -

LETTER FROM THE BOARD

Road, North Point, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

Pursuant to 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll. On a poll, every shareholder present in person or by proxy or (being a corporation) by its duly authorised representative shall have one vote for each share registered in his/her name in the register. A shareholder entitled to more than one vote needs not use all his/her votes or cast all the votes he/she uses in the same way.

As at the Latest Practicable Date, each of Mr. Zhu, Mr. Liu and Mr. Gu was interested in 30,000,000 underlying Shares, representing 0.49% of the issued shares of the Company, respectively. As each of Mr. Zhu, Mr. Liu and Mr. Gu is considered as having a material interest in the transactions contemplated under the Listco Loan Capitalisation Agreement, each of Mr. Zhu, Mr. Liu and Mr. Gu and his respective associates shall abstain from voting on the resolution approving the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder. To the best of the knowledge, information and belief of the directors of the Company, none of the other shareholders of the Company is required to abstain from voting at the EGM.

To the best knowledge, information and belief of the directors of the Company, having made all reasonable enquiries, there is (i) no voting trust or other agreement or arrangement or understanding entered into by or binding upon any shareholders of the Company; and (ii) no obligation or entitlement of any shareholders of the Company as at the Latest Practicable Date, whereby it/he has or may have temporarily or permanently passed control over the exercise of the voting right in respect of its/his shares to a third party, either generally or on a case-by-case basis.

CLOSURE OF REGISTER OF MEMBERS

For determining the entitlement to attend and vote at the EGM, the register of members of the Company will be closed from Thursday, 20 August 2020 to Tuesday, 25 August 2020, both days inclusive, during which period no transfer of shares of the Company will be registered. In order to attend and vote at the above meeting, unregistered holders of shares of the Company should ensure that all share transfer documents accompanied by the relevant share certificates must be lodged with the Company's branch share registrar of the Company in Hong Kong, Union Registrars Limited, at Suites 3301-04, 33/F., Two Chinachem Exchange Square, 338 King's Road, North Point, Hong Kong, for registration not later than 4:00 p.m. on Wednesday, 19 August 2020.

RECOMMENDATION

The directors of the Company (excluding Mr. Zhu, Mr. Liu and Mr. Gu who had abstained from voting at the Board resolutions approving the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder, but including the independent non-executive directors of the Company whose views have been set out in this circular after taking into consideration the advice of the Independent Financial Adviser) consider that the terms of the Listco Loan Capitalisation Agreement are fair and reasonable; and

- 13 -

LETTER FROM THE BOARD

entering into the of the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder are in the ordinary and usual course of business of the Group, on normal commercial terms, and in the best interests of the Company and its shareholders as a whole. Accordingly, the directors of the Company (excluding Mr. Zhu, Mr. Liu and Mr. Gu who had abstained from voting at the Board resolutions approving the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder, but including the independent non-executive directors of the Company who have taken into consideration the advice of the Independent Financial Adviser) recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM for approving the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder.

ADDITIONAL INFORMATION

Your attention is drawn to (i) the letter from the Independent Board Committee as set out on pages 15 to 16 of this circular; (ii) the letter from the Independent Financial Adviser as set out on pages 17 to 38 of this circular; and (iii) the additional information as set out in the appendix of this circular.

By order of the Board

Beijing Enterprises Medical and Health Industry Group Limited

Zhu Shi Xing

Chairman

- 14 -

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of the letter of recommendation from the Independent Board Committee, prepared for the purpose of inclusion in this circular.

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2389)

6 August 2020

To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION ACQUISITION BY WAY OF LOAN CAPITALISATION

We refer to the circular dated 6 August 2020 (the "Circular") issued by the Company to its shareholders of which this letter forms part. Unless the context requires otherwise, capitalised terms used in this letter shall have the same meanings as defined in the Circular.

We have been appointed by the Board as the Independent Board Committee to advise the Independent Shareholders as to whether, in our opinion, the terms of the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder are fair and reasonable, on normal commercial terms or better and in the ordinary and usual course of business of the Group and in the interests of the Company and its shareholders as a whole, and how the Independent Shareholders should vote at the EGM, after taking into account the recommendation of the Independent Financial Adviser.

Euto Capital has been appointed by the Board as the Independent Financial Adviser to advise the Independent Board Committee and Independent Shareholders in connection with the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder. Details of the advice from the Independent Financial Adviser, together with the reasons for its opinion, the key assumptions made and the principal factors taken into consideration in arriving at such advice, are set out in its letter on pages 17 to 38 of the Circular.

Your attention is also drawn to the letter from the Board set out on pages 6 to 14 of the Circular and the additional information set out in the appendices to the Circular.

- 15 -

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having considered the information as set out in the letter from the Board, the terms and conditions of the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder, the factors and reasons considered by, and the opinion of the Independent Financial Adviser as set out in its letter of advice, we consider that (i) the entering into of the Listco Loan Capitalisation Agreement is in the ordinary and usual course of business of the Company, on normal commercial terms and in the interests of the Company and its shareholders as a whole; and (ii) the terms of the Listco Loan Capitalisation Agreement are also fair and reasonable and in the interests of the Company and its shareholders as a whole.

Accordingly, we recommend the Independent Shareholders to vote in favour of the resolution approving the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder to be proposed at the EGM.

Yours faithfully

The Independent Board Committee of

Beijing Enterprises Medical and Health Industry Group Limited

Mr. Robert Winslow Koepp	Mr. Gary Zhou
Independent Non-executive Director	Independent Non-executive Director
Mr. Tse Man Kit, Keith	Mr. Wu Yong Xin
Independent Non-executive Director	Independent Non-executive Director
Mr. Zhang Yun Zhou
Independent Non-executive Director

- 16 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Euto Capital Partners Limited
Room 2418, Wing On Centre,	T	[phone]
111 Connaught Road Central,	F	[phone]
Hong Kong	www.eutocapital.com

6 August 2020

To the Independent Board Committee and the Independent Shareholders of

Beijing Enterprise Medical And Health Industry Group Limited

Dear Sirs and Madams,

DISCLOSEABLE AND CONNECTED TRANSACTION

IN RELATION TO

ACQUISITION BY WAY OF LOAN CAPITALISATION

INTRODUCTION

We refer to our appointment as the independent financial adviser (the "Independent Financial Adviser") of the Company to advise the Independent Board Committee and the Independent Shareholders in respect of the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder (the "Transaction"), particulars of which are set out in the section headed "Letter from the Board" (the "Letter") contained in the circular of the Company to the Shareholders dated 6 August 2020 (the "Circular"), of which this letter forms part. Unless the contest requires otherwise, capitalised terms used in this letter shall have the same meanings as ascribed to them under the section headed "Definitions" in the Circular.

1. Background of the Transaction

1.1 The Original Loan Agreement

Reference is made to the announcement of the Company dated 17 July 2017.

On 17 July 2017, the Company and Jinfu entered into the Original Loan Agreement, pursuant to which the Company conditionally agreed to provide the Loan to Jinfu in accordance with the terms of the Original Loan Agreement. Please refer to the section headed "Principal teams of the Original Loan Agreement" of this letter for principal terms of the Original Loan Agreement.

1.2 The Supplemental Loan Agreement

On 20 July 2017, the Company, Jinfu and the Target Company, being a 78.4% owned subsidiary of Jinfu, entered into the Supplemental Loan Agreement, pursuant to which Jinfu had novated all of its rights and obligations, and the Target Company had assumed all of Jinfu's rights and obligations, in and under the Original Loan Agreement.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1.3 The Listco Loan Capitalisation Agreement and the Other Loan Capitalisation Agreements

Reference is made to the announcement of the Company dated 9 July 2020 in relation to, among other things, the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder.

On 9 July 2020, the Company and the Target Company entered into the Listco Loan Capitalisation Agreement, pursuant to which the Loan in the outstanding principal amount of CAD13,400,000 and the interest accrued thereon shall be capitalised into the Loan Capitalisation Shares to be allotted and issued to the Company or its nominee.

On the same day, each of the Yu Parties and Jinfu on the one hand, and the Target Company on the other hand, entered into the Other Loan Capitalisation Agreements, pursuant to which the loans outstanding principal amount and the interest accrued thereon (if applicable) in the aggregate amount of CAD10,916,065 shall be capitalised into the Other Capitalisation Shares to be allotted and issued to each of the Yu Parties and Jinfu or each of their respective nominees.

The Listco Loan Capitalisation Agreement and the Other Loan Capitalisation Agreements are inter-conditional, and the Completion shall take place simultaneously with the completion of the transactions contemplated under the Other Loan Capitalisation Agreements.

2. Implications under the Listing Rules

As the application percentage ratios (as defined under the Listing Rules) in respect of the Transaction exceed 5% but all of which are less than 25%, the Transaction constitutes a discloseable transaction for the Company and is subject to the announcement and notification requirements under Chapter 14 of the Listing Rules.

As at the Latest Practicable Date, the Target Company is owned as to 78.4% by Jinfu, which in turn held as to 25.5%, 25.5% and 28.1% by Mr. Zhu, Mr. Liu and Mr. Gu, respectively, each an executive Director. Accordingly, the Target Company is an associate of the aforesaid Directors and a connected person of the Company under Chapter 14 of the Listing Rules. Therefore, the Transaction constitutes a connected transaction for the Company and is subject to the reporting, announcement, circular and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

- 18 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

INDEPENDENT BOARD COMMITTEE

An Independent Board Committee comprising all the independent non-executive Directors, namely Mr. Robert Winslow Koepp, Mr. Gary Zhou, Mr. Tse Man Kit, Keith, Mr. Wu Yong Xin and Mr. Zhang Yun Zhou, has been established to consider and advise the Independent Shareholders as to whether the terms of the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder are (i) fair and reasonable; (ii) on normal commercial terms or better and in the ordinary and usual course of business of the Company; (iii) in the interests of the Company and its shareholders as a whole; and

1. how the Independent Shareholders should vote in favour of the Transaction. None of the members of the Independent Board Committee has any material interest in the Transaction.

In our capacity as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders for the purpose of the Listings Rules, our role is to give an independent opinion to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder are (i) fair and reasonable; (ii) on normal commercial terms or better and in the ordinary and usual course of business of the Company; (iii) in the interests of the Company and its shareholders as a whole; and (iv) how the Independent Shareholders should vote in favour of the Transaction.

OUR INDEPENDENCE

We, Euto Capital Partners Limited ("Euto Capital"), have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this regard. Euto Capital is a licensed corporation licensed under the Securities and Futures Ordinance to conduct type 6 (advising on corporate finance) regulated activities, and participated in and completed various independent financial advisory transaction since 2015. Mr. Manfred Shiu ("Mr. Shiu") and Mr. Felix Huen ("Mr. Huen") are the persons jointly signing off the opinion letter from Euto Capital contained in the Circular. Mr. Shiu has been a responsible officer of Type 6 (advising on corporate finance) regulated activities under SFO since 2009, while Mr. Huen has been a responsible officer of Type 6 (advising on corporate finance) regulated activities under SFO since August 2019. Each of Mr. Shiu and Mr. Huen has been participated in and completed various independent financial advisory transactions in Hong Kong. As at the Latest Practicable Date, we confirmed that there is no relationship or interest between Euto Capital and the Company or any other parties that could be reasonably be regarded as hindrance to Euto Capital's independence as defined under Rule 13.84 of the Listing Rules to act as the Independent Financial Adviser to the Independent Board Committee and the Shareholders in respect of the Transaction.

- 19 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We are not associated with the Company, its subsidiaries, its associates or their respective substantial shareholders or associates, and accordingly, are eligible to give independent advice and recommendations. Apart from normal professional fees payable to us in connection with this appointment as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, no arrangement exists whereby we will receive any fees from the Company, its subsidiaries, its associates or their respective substantial shareholders or associates. We are not aware of the existence of or change in any circumstances that would affect our independence. Euto Capital did not provide any service to the Company in the last two years. Accordingly, we consider that we are eligible to give independent advice on the terms of the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder.

BASIS OF OUR OPINION AND RECOMMENDATION

In formulating our opinion and recommendation to the Independent Board Committee and the Independent Shareholders in relation to the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder, we have relied on the information, facts and representations contained or referred to in the Circular and the information, facts and representations provided by, and the opinions expressed by the Directors, management of the Company and its subsidiaries (the "Management"). We have assumed that all information, facts, opinions and representations made or referred to in the Circular were true, accurate and complete at the time they were made and continued to be true and that all expectations and intentions of the Directors and the Management, will be met or carried out as the case may be. We have no reason to doubt the truth, accuracy and completeness of the information, facts, opinions and representations provided to us by the Directors and the Management. The Directors jointly and severally accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in the Circular have been arrived at after due and careful consideration and there are no other facts not contained in the Circular, the omission of which would make any statement in the Circular misleading. We have also sought and received confirmation from the Directors that no material facts have been omitted from the information supplied and opinions expressed.

We consider that we have been provided with, and we have reviewed sufficient information to reach an informed view, to justify relying on the accuracy of the information contained in the Circular and to provide a reasonable basis for our opinion. We have no reason to doubt that any relevant material facts have been withheld or omitted from the information provided and referred to in the Circular or the reasonableness of the opinions and representations provided to us by the Directors and the Management. We have not, however, conducted any independent verification of the information provided, nor have we carried out any independent investigation into the business, financial conditions and affairs of the Group or its future prospects.

- 20 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Based on the foregoing, we confirm that we have taken all reasonable steps, which are applicable to the Transaction, as referred to in Rule 13.80 of the Listing Rules (including the notes thereof) in formulating our opinion and recommendation.

This letter is issued for the information for the Independent Board Committee and the Independent Shareholders solely in connection with their consideration of the terms of the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder, except for its inclusion in the Circular, is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes, without our prior written consent.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion to the Independent Board Committee and the Independent Shareholders, we have considered the following principal factors and reasons:

1. Background

On 9 July 2020, the Company and the Target Company entered into the Listco Loan Capitalisation Agreement.

1. Information of the Company and the Group

The Company is a company incorporated in the Cayman Islands with limited liability and the issued Shares of which have been listed on the Main Board of the Stock Exchange.

1. Principal business of the Company and the Group

The Company is an investment holding company and the holding company of the Group.

The Group is principally engaged in the provision of medical care, health care and geriatric care related services and products.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1. Financial performance of the Group

Set out below is the consolidated financial information of the Group for the two years ended 31 December 2018 and 31 December 2019 as extracted from the annual report of the Company for the year ended 31 December 2019 ("2019 Annual Report"):

Table 1: Summary of the audited consolidated financial performance of the Group

	For the years ended
	31 December
	2019	2018
	HK$'000	HK$'000
	(audited)	(audited)
Revenue	200,755	178,885
(Loss)/profit for the year before tax	(480,118)	91,157
(Loss)/profit for the year after tax	(476,082)	30,913
For the year ended 31 December 2019

For the year ended 31 December 2019, the audited consolidated total revenue of the Group mainly derived from the provision of medical care, health care and geriatric care related services and products, which is the only business segment of the Group.

As set out in the above table 1, the audited consolidated total revenue of the Group for the year ended 31 December 2019 was approximately HK$200,755,000, representing an increase of approximately 12.2% as compared to that of 2018 (i.e. HK$178,885,000). Such increase was mainly attributable to the contributions from newly contracted key projects in respect of the sale of medical and geriatric products, such as (a) the Baihe Baile Chaohu international healthcare general hospital of China Railway No. 4 Engineering, (b) the elderly-friendly furniture project of Shanghai Greenland, (c) the upgrade and reconstruction project for the second academic building of Tsinghua University; and (d) the academic building of Shanghai Jiao Tong University.

- 22 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As further set out in the table 1, the Group recorded a substantial audited consolidated total loss for the year ended 31 December 2019 of approximately HK$476,082,000. Such a substantial loss for the year was mainly attributable to the recognition of the followings:

1. a full impairment of goodwill of approximately HK$63,236,000 in relation to Fujian Fu Ling Golden Sun Health and Geriatric Company Limited due to its loss-making position and inadequate profits available in the foreseeable future;
2. the impairment of intangible assets of approximately HK$7,332,000 in relation to the geriatric care services brand names "Golden Sun";
3. the impairment of a property under development of approximately HK$18,087,000; and
4. the impairment of an investment in an associate of approximately HK$254,775,000 in relation to the Group's investment in Beijing Sports and Entertainment Industry Group Limited which was mainly due to a sharp decline in its share price during the year.

Table 2: Summary of the audited consolidated financial position of the Group

	As at 31 December
	2019	2018
	HK$'000	HK$'000
	(audited)	(audited)
Non-current assets	1,847,618		2,415,954
Current assets	1,216,950		1,336,764

Total assets	3,064,568	3,752,718
Current liabilities	393,924	350,637
Non-current liabilities	95,528	269,036
Total liabilities	489,452	619,673
Net current assets	823,026	986,127
Net assets	2,575,116	3,133,045

- 23 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As at 31 December 2019

• Non-currentassets and current assets

As set out in the table 2 above, as at 31 December 2019, non-current assets and current assets of the Group amounted to approximately HK$1,847,618,000 and HK$1,216,950,000 respectively. Set out below is the breakdown of the non-current assets and currents assets of the Group as at 31 December 2018 and 31 December 2019.

Table 3: Breakdown of the consolidated total assets of the Group

	As at 31 December
	2019	2018
	HK$'000	HK$'000
	(audited)	(audited)
Non-current assets
Property, plant and
equipment	107,740		78,500
Investment properties	101,362		471,239
Right-of-use assets	462,024		-
Prepaid land lease
payments	-	511,233
Properties under
development	79,979		183,949
Goodwill	-	7,929
Other intangible assets	9,646		9,374
Investments in joint
ventures	222,209		500,897
Investments in associates	222,209		500,897
Equity investments
designated at fair value
through other
comprehensive income	213,108		225,494
Prepayments and other
receivables	224,258		36,155
Deferred tax assets	986		-
Total non-current assets	1,847,618		2,415,954

- 24 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

	As at 31 December
	2019	2018
	HK$'000	HK$'000
	(audited)	(audited)
Current assets
Inventories	33,866		29,190
Trade receivables	41,427		37,565
Prepayments, other
receivables and
other assets	150,869		340,393
Due from a related party	99,549		88,435
Financial assets at fair
value through
profit or loss	65,934		65,308
Restricted bank balances	-	11,755
Cash and cash equivalents	442,371		764,118
	834,016		1,336,764
Assets and disposal group
classified as held for sale	382,934		-
Total current assets	1,216,950		1,336,764
Total assets	3,064,568		3,752,718

As at 31 December 2019, the non-current assets of the Group decreased from approximately HK$2,415,954,000 to approximately HK$1,847,618,000, representing a decrease of approximately HK$568,336,000. The decrease in non-current assets of the Group was mainly due to (i) the recognition of the full impairment of goodwill of approximately HK$63,236,000 in relation to Fujian Fu Ling Golden Sun Health and Geriatric Company Limited due to its loss-making position and inadequate profits available in the foreseeable future; (ii) the reclassification of the investment properties held by Beijing Dragon Ground Arts & Crafts Limited to be included in the disposal group of approximately HK$318,696,999; and (iii) the recognition of impairment of an investment in an associate of approximately HK$254,775,000 in relation to the Group's investment in Beijing Sports and Entertainment Industry Group Limited which was mainly due to a sharp decline in its share price during the year.

- 25 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Further set out in the above table 2, the current assets of the Group decreased from approximately HK$1,336,764,000 as at 31 December 2018 to approximately HK$1,216,950,000, representing a decrease of approximately HK$119,814,000. Such decrease was primarily due to a decrease in the cash and cash equivalents of approximately HK$321,747,000 resulted from (i) net cash flow used in operating activities of approximately HK$69,918,000, (ii) net cash flow used in investing activities of approximately HK$150,196,000; and (iii) net cash flow used in financing activities of approximately HK$109,452,000.

• Non-currentliabilities and current liabilities

As set out in the above table 2, as at 31 December 2019, non-current liabilities and current liabilities of the Group are amount to approximately HK$85,528,000 and approximately HK$393,924,000, respectively. Set out below is the breakdown of the non-current liabilities and current liabilities of the Group as at 31 December 2019 and 31 December 2018.

Table 4: Breakdown of the consolidated total liabilities of the Group

	As at 31 December
	2019	2018
	HK$'000	HK$'000
	(audited)	(audited)
Current liabilities
Trade payables	35,369		19,338
Other payables and
accruals	114,563		196,369
Interest-bearing bank and
other borrowings	109,843		69,595
Lease liabilities	6,224		-
Due to a related party	-	28,998
Tax payable	1,757		36,337
	267,756		350,637
Liabilities directly associated
with the assets classified as
held for sale	126,168		-
Total current liabilities
393,924		350,637

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

	As at 31 December
	2019	2018
	HK$'000	HK$'000
	(audited)	(audited)
Non-current liabilities
Interest-bearing bank
borrowings	-	117,553
Lease liabilities	5,887		-
Deferred tax liabilities	82,517		147,436
Other payables	7,124		4,047
Total non-current liabilities
95,528		269,036
Total liabilities	489,452		619,637

As set out in the above table 4, the current liabilities of the Group increased by approximately HK$43,287,000 from approximately HK$350,637,000 as at 31 December 2018 to approximately HK$393,924,000 as at 31 December 2019. The increase in current liabilities of the Group was mainly due to an increase of the advance from an interest bearing bank and other borrowings.

As further set out in the above table, the non-current liabilities of the Group were decreased by approximately HK$173,508,000 as at 31 December 2019 as compared to 31 December 2018. Such decrease was mainly due to the reclassification of the inter-bearing bank borrowings from non-current liabilities to current liabilities.

1. Information on the Target Company
2. 1. Shareholding structure of the Target Company

The Target Company is a company incorporated under the laws of British Columbia. As at the Latest Practicable Date, the Target Company is owned as to 78.4% by Jinfu and 21.6% by 1136601 BC Ltd.

1. Principal assets of the Target Company

The Target Company is principally engaged in property holding, with the Property as its principal asset.

As set out in the Letter, the Property is located at 140 Sixth Street, New Westminster, British Columbia, Canada and is a mixed-used complex comprised of 135 suite apartment building, 20,848 sf commercial component and 1.1 acre high-density development site. As at 2 June 2020, the fair value of the Property as assessed by an independent valuer is CAD70,450,000. For details of the valuation report in respect of the fair value of the Property, please refer to Appendix I of the Circular.

- 27 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As further set out in the Letter, the Property was acquired by the Target Company at an original cost of CAD50,000,000, which was partly financed by the Loan provided by the Company to Jinfu initially and subsequently novated its obligations under the Loan to the Target Company.

1. Financial information of the Target Company

Set out below is the summary of the unaudited annual financial performance of the Target Company for the years ended 31 December 2018 and 2019 and the unaudited latest financial position of the Target Company as at 31 May 2020 as extracted its unaudited management accounts for the year ended 31 December 2018 and 31 December 2019 and for the 5 months ended 31 May 2020:

Table 5: Summary of the unaudited financial performance of the Target Company

	For the years ended
	31 December
	2019	2018
	CAD	CAD
	(unaudited)	(unaudited)
Revenue	1,463,280	1,561,106
Net loss before taxation and
extraordinary items	4,266,526	5,683,996
Net loss after taxation and
extraordinary items	4,266,526	5,683,996

The Target Company's revenue represented the rental income generated from leasing of the Property. The loss after taxation and extraordinary items recognized for the years ended 31 December 2018 and 2019 were mainly attributable to the recognition of (i) the amortization of the pre-development cost; and (ii) the financial cost incurred from bank and other borrowings.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Table 6: Summary of the unaudited financial position of the Target Company

	As at 31 May
	2020
	CAD
	(unaudited)
Non-current assets
The Property	48,073,232
Other non-current assets	17,660
	48,090,893
Current assets
Trade and other receivables	663,431
Cash and cash equivalent	330,825
	964,256
Total liabilities
Other payables	1,097,824
Bank and other borrowings	60,478,389
	61,576,213
Net liabilities	12,521,064

As set out above, as at 31 May 2020, the principal asset of the Target Company was the Property, representing approximately 98% of the total assets of the Target Company, and the carrying amount of which was stated at cost and without any fair value adjustment. Apart from the Property, the bank and other borrowings referred to the mortgage loan granted over the Property and the loan due to the Group and the Yu Parties.

1. Information of Jinfu

Jinfu is a company incorporated in Hong Kong with limited liability and is principally engaged in investment in real estate project. As at the Latest Practicable Date, Jinfu is owned as to 25.5% by Mr. Zhu, 25.5% by Mr. Liu, 28.1% by Mr. Gu and the remaining 20.9% by several management team members of the Group and each of them hold less than 10% beneficial interest.

- 29 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1. Information of 1136601 BC Ltd.

1136601 BC Ltd. is a company incorporated under the laws of British Columbia. As at the Latest Practicable Date, 1136601 BC Ltd. is wholly owned by Mr. Yu Luning, a party independent of the Company and connected persons of the Company.

1. Transaction structure

The diagrams below set out separately the shareholding structure of the Target Company immediately before and after the Completion, assuming completion of the Other Loan Capitalisation Agreements have taken place simultaneously with the Completion.

1. The structure of the Target Company immediately before the Completion and as at the Latest Practicable Date

Jinfu		1136601 BC Ltd.

78.40%21.60%

Target Company

Property

1. The structure of the Target Company immediately after the Completion, assuming completion of the Other Loan Capitalisation Agreements have taken place simultaneously with the Completion

Company		1136601 BC Ltd.		Mr. Jianxin Dong		Mr. Guoning Yu		Jinfu
	47.47%			8.45%			11.66%		1.73%		30.68%

Target Company

Property

- 30 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1. Reasons for and benefits of entering into the Listco Loan Capitalisation Agreement

Set out below are the reasons for and benefits of entering into the Listco Loan

Capitalisation Agreement.

1. Background of entering into the Listco Loan Capitalisation Agreement

As set out in the Letter, under the Original Loan Agreement, the Target Company shall repay the outstanding principal amount of the Loan and the interests accrued thereon to the Company on 17 July 2020.

1. Intention of the Target Company in holding the Property

Following Completion, it is the intention of the Target Company to dispose the Property in short-term to realize cash and unlock the value in its investment in the Property at fair market value. Further, the net proceeds to be received by the Target Company from the potential disposal will be financed for distribution of dividend to its shareholders to realize each of their investment.

1. Intention of the Group to capitalise the Loan into the shares of the Target Company

It is advised by the Directors that it is the intention of the Company to recover the outstanding balance of the Loan. Having considered (a) the basis in determining the Subscription Price and the number of Listco Capitalisation Shares as explained in the section headed "V. Principal Terms of the Listco Loan Capitalisation Agreement" of this letter; (b) the above intention of the Target Company to dispose the Property, (c) the fair value of the Property as derived from the relevant valuation report set out in Appendix I of the Circular; and (d) the conditions of the property market in Canada as explained below, it is concluded that the capitalisation of the Loan into the shares of the Target Company is one of the options for the Company to recover its debt over the Target Company and minimize the relevant default risk, hence, we concur with the Directors that the entering into of the Listco Loan Capitalisation Agreement is in the interest of the Company and the Shareholders as a whole.

- 31 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1. Overview of the property market in British Columbia

As mentioned in the Letter, the Property is located at 140 Sixth Street, New Westminster, British Columbia, Canada. The Property represents a development site on the northwest corner of Royal Avenue Sixth Street in the downtown neighborhood of the City of New Westminster and is currently a six to eight-storey residential rental and retail building.

In assessing the fairness and reasonableness of the Subscription, the Board has also considered the overview of the property market in the areas where the Property is located. According to an article entitled "B.C. real estate outlook 2020: a forecast summary" dated 17 December 2019, the British Columbia Real Estate Association predicts that residential sales across the province will increase 10.9 per cent to 85,500 units in 2020, which would take the annual total to just below the 10-year annual average of 85,800 unit and the credit union is confident that British Columbia's median sale price across the whole year will break new records in 2020 forecasting a rise of 3.8 per cent.

However, according to the Real Estate Investment Network's (REIN) COVID-19 Special Edition: Real Estate Cycle Update report, all major real estate markets in British Columbia, Alberta, and Ontario are on a steady decline due to the economic impact of the pandemic shutdown and restriction measures. While the slump is generally characterized as market slowdown, the report suggests it can also be an excellent time for uniquely positioned investors to take advantage of the opportunities that are bound to hit the market sooner or late.

We have discussed with the Board and understand that it has further taken account the impact of the property market resulted from the outbreak of COVID-19 as mentioned above. The Board is of the view that in any event if the Property is not able to be disposed by the Target Company, it is the plan of the shareholders of the Target Company immediately after the Completion that the Target Company will continue its rental services which allow it to generate rental income and enhance its working capital for daily operations. In the meantime, the Target Company will keep monitoring the market conditions and will compromise a suitable timing for disposing the Property in return for a potential dividend income. We have reviewed the unaudited financial information of the Target Company and concur with the Directors that after minimising the finance cost incurred from the debt to the Company and the Yu Parties, the Company has retained enough working capital to maintain its operations, hence, we concur with the Directors that unless there is a potential decline in the property market in the second half of 2020, the Subscription still offer the Group an opportunities to minimize its default risk over the debt due by the Target Company and hold the Property for capital appreciation. Hence, we concur with the Directors that the entering into of the Listco Loan Capitalisation Agreement is fair and reasonable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Our view

Having taken into account the intention of the Target Company to hold the assets, we concur with the Directors' view that the entering into of the Listco Loan Capitalisation Agreement is in the interests of the Company and the Shareholders as a whole.

IV. Principal terms of the Original Loan Agreement and the Supplemental Loan

Agreement

As disclosed in the announcement of the Company dated 17 July 2017, the Company and Jinfu entered into the Original Loan Agreement on 17 July 2017, pursuant to which the Company conditionally agreed to provide the Loan to Jinfu pursuant to the terms of the Original Loan Agreement. The principal terms of the Original Loan Agreement are summarised as below.

Date	:	17 July 2017
Lender	:	The Company
Borrower	:	Jinfu
Principal amount	:	CAD13,400,000
Interest rate	: The interest shall accrue at the rate of 10% per annum.
		Interest shall be payable on the Repayment Date. The
		interest shall be calculated on the basis of actual
		number of days elapsed and on a 360-day per year
		basis.
Repayment date	: Three years from the Drawdown Date of the Original
		Loan Agreement

On 20 July 2017, the Company, Jinfu and the Target Company, being a subsidiary owned asto 78.4% by Jinfu, entered into the Supplemental Loan Agreement, pursuant to which Jinfu had novated all of its rights and obligations, and the Target Company had assumed all of Jinfu's rights and obligations, in and under the Original Loan Agreement.

1. Principal terms of the Listco Loan Capitalisation Agreement

On 9 July 2020, the Company and the Target Company entered into the Listco Loan Capitalisation Agreement, pursuant to which the Loan in the outstanding principal amount of CAD13,400,000 and the interest accrued thereon shall be capitalised into the Loan Capitalisation Shares to be allotted and issued to the Company or its nominee. The principal terms of the Listco Loan Capitalisation Agreement are summarised as below.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1. Subject matter

The Loan in the outstanding principal amount of CAD13,400,000 and the interests accrued thereon up to the Completion Date shall be capitalised into the Listco Capitalisation Shares to be allotted and issued to the Company or its nominee on the Completion Date.

Pursuant to the Listco Loan Capitalisation Agreement, the Target Company has conditionally agreed to allot and issue to the Company, and the Company has conditionally agreed to subscribe for, the Loan Capitalisation Shares at the issue price of CAD2.09 per Loan Capitalisation Share.

The subscription amount payable by the Company under the Loan Capitalisation Agreement shall be satisfied by capitalising the entire Loan.

1. Subscription Price

The subscription price of CAD2.09 per Loan Capitalisation Share represents a discount of approximately 15% over the adjusted net assets value per share of approximately CAD2.46 as at 31 May 2020.

1. Ranking of the Loan Capitalisation Shares

The Loan Capitalisation Shares and the Other Capitalisation Shares when allotted and issued, shall rank pari passu in all respects with the shares of the Target Company in issue.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

VI. Evaluation of the basis of the Subscription Price and the Listco Capitalisation

Shares

As stated in the Letter, the Subscription Price was determined after arm's length negotiation between the Company and the Target Company with reference to the fair value of the Property and consideration of the illiquidity of the Property.

Based on this, we have discussed with the Directors and further noted that the formula in calculating the number of Listco Capitalisation Shares (i.e. 8,344,928 common shares of the Target Company) to be allotted by the Target Company and subscribed by the Group are set out below:

Outstanding principal amount and the interests accrued thereon up to the Completion Date (i.e. CAD17,420,000)

Unaudited adjusted net asset value per share x (1 - discount of approximately 15%) of the Target Company as at 31 May 2020

In the above formula,

• unaudited net asset value per share of the Target Company as at 31 May 2020 of approximately CAD2.46 refers to unaudited adjusted net asset value of the Target Company as at 31 May 2020 after fair value adjustment (i.e. CAD9,855,703) ("Adjusted NAV") divided by the share capital of the Target company as at 31 May 2020; and
• The Adjusted NAV of CAD9,855,703 represents an aggregated value of
• 1. the unaudited net liabilities value of the Target Company as at 31 May 2020 of approximately CAD12,521,064; and
  2. the amount of (i) the valuation results of the fair value of the Property as at 2 June 2020 prepared by the Valuer (i.e. CAD70,450,000); less (ii) the unaudited carrying amount of the Property as at 31 May 2020 (i.e. CAD48,073,232).

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1. Basis of determining the Subscription Price and the number of Listco Capitalisation Shares

As mentioned above, we noted that the Subscription Price was determined with reference to the Adjusted NAV. Having made enquiry with the Directors on the above basis, it is agreed that by referencing to the Adjusted NAV, the book value of the assets and liabilities of the Target Company are analysed, adjusted and appraised individually by the Board. In evaluating the above basis of calculating the Subscription Price and the Listco Capitalisation Shares, we have considered the factors below:

1. the Property is the principal assets of the Target Company contributing approximately 98% of the total assets of the Target Company as at 31 May 2020; and
2. the Adjusted NAV has taken into account the fair value adjustment arising on the Property of approximately CAD22,376,768.

We have considered the future cash flow approach, however, we considered that this is not appropriate because (i) it is the intention of the Target Company and the shareholders of the Target Company to dispose the Property to realize the investment; and (ii) the basis and assumptions under the future cash flow approach involved uncertainties, after considered the above factors, we are of the view that the Adjusted NAV is an appropriate reference in determining the Subscription Price. Details of the methodologies of assessing the fair market value of the aforementioned assets and liabilities are set out below.

1. Assessing the fair value of the Property

As mentioned above, we are given to understand that the parties to the Listco Loan Capitalisation Agreement has taken into account the fair market value of the Property in determining the Subscription Price and the Listco Capitalisation Shares. In order to further assess the fairness and reasonableness of the valuation of the fair market value of the Property (the "Valuation"), we have discussed with the Management and obtained a copy of the valuation report in respect of the Valuation (the "Valuation Report"). The Valuation Report was prepared by BCS Real Estate (the "Valuer").

We have reviewed the Valuation Report and discussed with the Valuer regarding the methodologies adopted for and the basis and assumptions used in arriving at the fair value of the Property. In the course of our discussion with the Valuer, we noted that site inspection of the Property was carried out by the Valuer on 2 June 2020 and in the course of the aforesaid inspection, the Valuer did not notice any serious defect.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Review on the valuation methodology and assumption

The Valuation was prepared by the Valuer using the direct comparison approach by making reference to comparable sales transactions as available in the market and have also taken into account the costs that will be expended to complete the developments to reflect the quality of the completed developments.

We have reviewed and enquired into the Valuer regarding the methodology of, and basis and assumptions adopted for, the Valuation. The Valuer explained that they have adopted the direct comparison method which consist of comparisons based on prices realized or current asking prices of comparables properties. During our discussion with the Valuer, we understand how the Valuation was being derived and how the comparable properties of similar size, character and location were weighed against their respective advantage and drawbacks. We have discussed with the Valuer on the valuation methodology applied, and reviewed the comparables provided by the Valuer, we consider that the basis being adopted are appropriate, fair and reasonable. As further confirmed by the Valuer, it has been provided with a legal opinion on the title to the Property which state that the Property is free and clear of all liens or encumbrances, except as shown on the title search and interpreted herein, and on the assumption that the improvements do not encroach onto adjacent lands.

In view of the above, while we have taken reasonable steps to review on the Valuation, we have not used other valuation methodology to assess the fair value of the Property.

Information of the Valuer

For our due diligence purpose, we have reviewed and enquired into (i) the terms of engagement of the Valuer (ii) the Valuer 's qualification and experience in relation to the preparation of the Valuation Report; and (iii) the steps and due diligence measures taken by the Valuer for conducting the Valuation. From the engagement letter and other relevant information provided by the Valuer and based on our interview with it, we are satisfied with the terms of engagement of the Valuer as well as its qualification and experience for preparation of the Valuation Report.

Result of the assessment in relation to the Valuation

During our discussion with the Valuer, we have not identified any major factors which cause us to doubt the fairness and reasonableness of the principal bases and assumptions adopted for or the information used in the Valuation.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1. Assessing the value of other assets and liabilities of the Target Company

We note from the Directors that apart from the abovementioned, other assets and liabilities (including but not limited to property, accounts and other receivables, cash and cash equivalents and other liabilities) have been agreed and not adjusted by both the Target Company and the Company. Given that the value of the abovementioned assets and liabilities are recorded in the management accounts under dollar-to-dollar basis and are not subject to market change and depreciation, we consider adopting the book values of such assets and liabilities is reasonable.

1. Basis in determining the number of Other Capitalisation Shares

As set out in the Other Loan Capitalisation Agreement, the determination of the subscription price per Other Capitalisation Shares is the same as that of the Subscription Price of CAD 2.09. Having said that the basis of determination is equivalent, we consider that the Subscription Price is fair and reasonable.

VII. Potential financial effects of the Transaction

Upon completion of the Listco Loan Capitalisation Agreement and the Other Loan Capitalisation Agreements, the Target Company shall be held as to 47.47% by the Company and will become an associate company of the Company and accounted for under equity method (as defined in the Hong Kong Financial Reporting Standards) and its financial statements will not be consolidated into the financial statements of the Company.

The shareholding interest in the Target Company will be recorded as "interests in associate" on the balance sheet, and any profit and loss of Target Company will be disclosed as "share of profits and losses of associates" in the income statement of the Company. It is expected that the investments in Target Company will contribute positively to the results of the Group.

RECOMMENDATION

Having considered the principal factors and reasons referred to above, we are of the opinion that the terms of the Listco Loan Capitalisation Agreement are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole, although the Transaction is not conducted in the ordinary and usual course of business of the Company. Accordingly, we recommend the Independent Board Committee to advise, and ourselves recommend, the Independent Shareholders to vote in favor of the relevant resolution(s) to be proposed at the EGM to approve the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder.

Yours faithfully

For and on behalf of

Euto Capital Partners Limited

Manfred Shiu	Felix Huen
Director	Assistant Director

• For identification purpose only and should not be regarded as the official English translation of the Chinese names. In the event of any inconsistency, the Chinese names prevail.

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APPENDIX I	VALUATION REPORT

June 30, 2020

Our Ref: A2007-4431LA

Beijing Enterprises Medical and Health Industry Group Ltd.

Unit 2704, 27/F.,

909 Cheung Sha Wan Road,

Cheung Sha Wan,

Kowloon, Hong Kong

Re: CURRENT MARKET VALUE OF MIXED USE DEVELOPMENT SITE

140 SIXTH STREET, NEW WESTMINSTER, BC

Dear Sir:

We have completed our investigations and analyses of the above captioned property (the "Subject") in order to estimate the current market value of the mixed use development site at 140 Sixth Street, as of June 2, 2020. This letter is intended to provide an executive summary of the full narrative appraisal report contained within our files. This letter is intended to be used for reporting purposes; it may not be used for any other purpose. This report follows the International Valuation Standards published from time to time by the International Valuation Standards Council. The purpose of the report is to determine the current market value of the fee simple interest in the subject property as of the valuation date.

DEFINITION OF MARKET VALUE

"Market Value" is the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.

SCOPE OF INVESTIGATION

See Addendum A.

ASSUMPTIONS & LIMITING CONDITIONS

See Addendum B.

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APPENDIX I	VALUATION REPORT

Extraordinary Limiting Conditions and Assumptions:

• The property owner has provided a Preliminary Application Review from the City of New Westminster 's Land Use and Planning Committee dated December 3, 2018, supporting a proposed mixed use residential, retail and childcare development with building heights ranging from seven to 40 storeys. The most recent proposal reflects an overall density of 7.0 FSR, of which 6.63 FSR would be residential density, and also includes the provision of 76 non-market housing units and 108 market rental units (equivalent to an 80% replacement of existing market rental units on site). We note that the provision of a not-for-profit childcare could be considered a rationale for considering density above the maximum of this site. This would be consistent with the City of New Westminster 's Density Bonus Policy as it relates to 'super density' and has been applied to similar projects within Downtown New Westminster. The not-for-profit childcare component of 5,019 sq.ft. reflects a density of roughly 0.04 FSR, thus the total density inclusive of the aforementioned 'super density' reflects 7.0 FSR.
• We have held discussions with Michael Watson, Senior Planner at the City of New Westminster regarding the proposed development. Mr. Watson could not comment on the proposed development since a formal rezoning application has not been submitted by our client. However, Mr. Watson noted that the proposed daycare will be built at the cost of the developer which will be turned over to the City upon completion. Furthermore, Mr. Watson could not comment on whether an additional cash Community Amenity Contribution (CAC) will be required for the proposed development. As such, our analysis assumes that the cost to build the daycare, replacement of the existing rental density and the loss associated with building the non-market rental will be considered in lieu of a cash CAC payment. Should the City require an additional CAC payment, this will have an impact on value.
• The report assumes that there is no change in the physical or leasable status of the subject property between the valuation date, viewing date and date of this report. The subject property comprises a single lot which is improved with a six to eight-storey residential rental and retail building. The property represents a development site. Given the improvements are planned to be demolished in the short to medium term, an internal viewing of the improvements was not undertaken and our value has not considered demolition costs.

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APPENDIX I	VALUATION REPORT

• Values contained in this appraisal are based on market conditions as at the time of this report. This appraisal does not provide a prediction of future values. In the event of market instability and/or disruption, values may change rapidly, and such potential future events have NOT been considered in this report. As this appraisal does not and cannot consider any changes to the property appraised or market conditions after the effective date, readers are cautioned in relying on the appraisal after the effective date noted herein.
• As of the date of this report, Canada and the Global Community is experiencing unprecedented measures undertaken by various levels of government to curtail health-related impacts of the COVID-19 Pandemic. The duration of this event is not known. While there is potential for negative impact with respect to micro and macro-economic sectors, as well as upon various real estate markets, it is not possible to predict such impact at present, or the impact of current and future government counter-measures. There is some risk that the COVID-19 Pandemic increases the likelihood of a global recession, however, without knowledge of further anticipated government counter-measures at the national and global levels, it is not possible to predict any impact at this point in time. Accordingly, this point-in-time valuation assumes the continuation of current market conditions, and that current longer term market conditions remain unchanged. Given the market uncertainties of the COVID-19 pandemic, a force majeure event, we reserve the right to revise the value estimation set out in this report for a fee, with an update appraisal report under a separate appraisal engagement, incorporating market information available at that time.

STATISTICS OF THE PROPERTY HELD FOR DEVELOPMENT

Civic Address:	140 Sixth Street, New Westminster, BC.
Location:	The property is comprised of a single development
	site on the northwest corner of Royal Avenue and
	Sixth Street in the City of New Westminster.
Legal Identification:	140 Sixth Street, New Westminster, BC
	Parcel "A" (Reference Plan 12892) of that Parcel Lying
	Between Royal and Queens Avenues and Sixth and
	Seventh Streets Shown Marked "School" on Plan 2620.
	PID #004-346-203.
Site:
Total Area:	2.62 acres (113,965 sq. ft.).
Configuration:	Rectangular.

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APPENDIX I	VALUATION REPORT
Topography:	Modest downward slope from the northwest to the
	southeast.
Improvements:	The subject property is currently improved with a six-
	to eight-storey residential rental and retail building
	constructed circa 1950. This report concerns the
	underlying land as per the terms of the engagement
	and thus no descriptions of the improvements have
	been provided.
Summary:	The subject property provides a highly visible
	location on the northwest corner of Royal Avenue and
	Sixth Street in the Downtown neighbourhood of the
	City of New Westminster. The surrounding area
	features a wide array of amenities, from retail shops,
	parks, schools and transit. The close proximity to
	Douglas College, Fraser River Middle School,
	Friendship Garden, Simcoe Park, Tipperary Park and
	two rapid transit stations provide convenience.

ZONING AND LAND USE CONSIDERATIONS

Introduction:	The subject is zoned Community Commercial
	Districts (Restricted) (C-5). The intention of this
	zoning is to allow pedestrian-oriented commercial
	and residential uses, including hotels and charitable
	casinos. Further details of this zoning are available in
	the City of New Westminster Official Bylaws.
Zoning Classification:	Community Commercial Districts (Restricted) (C-5).
Maximum Density:	The total floor space ratio on any site shall not exceed
	a factor of 5.2 provided that the floor space ratio of all
	those portions of any building or buildings used for
	residential purposes shall not exceed a factor of 3.0.
Maximum Height:	A maximum height restriction is not indicated within
	the Community Commercial Districts (Restricted)
	(C-5) zoning bylaw.

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APPENDIX I		VALUATION REPORT
Permitted Uses:	Permitted Uses
	531.3	The following uses and no others shall be
		permitted in the (C-5) district:
	531.4	Child care in a non-residential building or
		portion of a non-residential building
	531.5	Home based businesses
	531.6	Hotels
	531.7	Housing units contained in a building not less
		than four storeys in height
	531.8	Libraries
	531.9	Office buildings containing business and
		professional offices
	531.10	Public assembly and entertainment uses
		including auditoriums, dance halls, bowling
		alleys, gymnasiums, meeting halls;
		(BYLAW 7273, 2008)
	531.11	Uses customarily incidental to any of the above
		uses such as personal service establishments
		including coffee shops and restaurants where
		these uses occupy no more than fifty percent
		(50%) of the ground floor
	531.12	Accessory buildings and uses

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APPENDIX I	VALUATION REPORT
OCP or Future Rezoning:	Our City 2041 New Westminster Official Community
	Plan.
	The Official Community Plan provides direction to
	realize New Westminster 's opportunities and manage
	assets and issues to ensure that the city remains one of
	the most liveable communities in Metro Vancouver. It
	describes the kind of community that the
	municipality wishes to evolve into and acknowledges
	the importance of shaping growth in a way that is
	responsive to the city's distinct circumstances.
	This plan provides a vision, goals and policies for
	New Westminster to the year 2041. Together, these
	elements connect the community's 'big picture'
	aspiration with the tools needed to achieve it,
	including specific actions, development permit
	guidelines and land use designations. This Plan is
	implemented by the City in various ways, including
	through policy initiatives, public programs, civic
	projects and bylaws. Implementation also occurs
	privately through avenues such as development and
	citizen action groups. The subject property is
	currently designated for Residential - High Rise use
	according to the land use designation map.

The property owner has provided a Preliminary Application Review from the City of New Westminster 's Land Use and Planning Committee dated December 3, 2018, supporting a proposed mixed use residential, retail and childcare development with building heights ranging from 7 to 40 storeys. Based on the most recent development statistics provided to us, the proposal reflects an overall density of 7.0 FSR, of which 6.63 FSR would be residential density, and also includes the provision of

40 non-market housing units and 108 market rental units (equivalent to an 80% replacement of existing market rental units on site). We note that the provision of a not-for-profit childcare could be considered a rationale for considering density above the maximum of this site. This would be consistent with the City of New Westminster 's Density Bonus Policy as it relates to 'super density' and has been applied to similar projects within Downtown New Westminster. The not-for-profit childcare component of 5,001 sq.ft. reflects a density of roughly 0.04 FSR, thus the total density inclusive of the aforementioned 'super density' reflects 7.0 FSR.

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APPENDIX I	VALUATION REPORT
CAC Discussion:	We have held discussions with Michael Watson,
	Senior Planner at the City of New Westminster
	regarding the proposed development. Mr. Watson
	could not comment on whether an additional cash
	Community Amenity Contribution (CAC) will be
	required for the proposed development since a formal
	rezoning application has not been submitted by our
	client at the time of this report. Notwithstanding the
	market and non-market rental components, a market
	density of 5.89 FSR is proposed for the subject
	property. According to the C-5 zoning district, a
	maximum density of 5.2 FSR is permitted including a
	maximum residential density of 3.0 FSR. Although the
	proposed market residential density is some 2.57 FSR
	higher than the C-5 guidelines, the total market
	density is only some 0.69 FSR higher than the
	maximum density set out in the existing C-5 zoning.
	As such, our analysis assumes that the cost to build
	the daycare, replacement of the existing rental density
	and the loss associated with building the non-market
	rental will be considered in lieu of a cash CAC
	payment. Should the City require an additional CAC
	payment, this will have an impact on.

HIGHEST & BEST USE

Real Estate is valued in terms of its optimum or "highest and best use". Highest and best use is defined as:

"The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value to the property".

As Improved:

Given the subject's location and surrounding developments, we are of the opinion that redevelopment to a residential mixed use project, and maximizing to the highest allowable density will deliver the greatest net return to the property.

As Vacant:

If the subject property was vacant and unimproved, and was able to be developed in today's market, it is our opinion that its highest and best use would be a mixed use development site, with primarily residential use with commercial at grade. The ownership structure would most likely be strata in nature to capitalize on the highest return to a developer.

Sales History

Contained within our files.

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APPENDIX I	VALUATION REPORT

APPROACHES TO VALUE

The Direct Comparison Approach is the generally preferred method of valuation. In instances where clear architectural plans are available for a proposed project, along with a detailed pro forma, the Residual Method can be applied. Detailed plans are still being finalized at the time of our analysis; therefore, we have only undertaken a cursory residual analysis as a support to value.

SUMMARY OF FINAL VALUE CONCLUSION

The full comparable sales and valuation analyses is contained within our files.

Final Value:	$70,450,000.
Exposure Time:	Four to eight months prior to the effective date of
	valuation.
Date of Value:	June 2, 2020.
Date of Viewing:	June 2, 2020.

CERTIFICATION

I certify, to the best of my knowledge and belief, that:

• I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved;
• compensation is not contingent upon the reporting of a predetermined value or direction in value that favours the cause of the client, the amount of the value estimate, the attainment of a stipulated result or the occurrence of a subsequent event;
• the reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions and conclusions;
• the statements of fact contained in this report are true and correct;
• my analyses, opinions and conclusions were developed, and this report has been prepared to the best of my knowledge and belief, in conformity with the Canadian Uniform Standards of Professional Appraisal Practice of the Appraisal Institute of Canada;
• I have the knowledge and experience to complete the assignment competently;
• I made a personal viewing of the subject property at 140 SIXTH STREET, NEW WESTMINSTER, BC on June 2, 2020 and estimate a value, subject to the assumptions contained in the attached report, as at June 2, 2020, of $70,450,000;

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APPENDIX I	VALUATION REPORT

• a detailed viewing to report building condition has not been carried out;
• I have fulfilled the requirements of the Appraisal Institute of Canada Mandatory Recertification Programme.

Tony Liu	Ryan H. Wong
B.Comm, AACI, P.App	B.Comm, AACI, P.App
AIC Membership # 910154	AIC Membership # 901127
Direct Line: [phone]	Direct Line: [phone]
email: [e-mail]	email: [e-mail]
Date: June 30, 2020
ADDENDUM A - SCOPE OF INVESTIGATION

The scope of the appraisal encompasses the necessary research and analysis to prepare an appraisal report in accordance with the intended use, the Ethics and Standard of Professional Practice, and the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) of the Appraisal Institute of Canada (AIC). CUSPAP was adopted on January 1, 2001 (Amended effective January 1, 2020) by the AIC, and is required to be followed by all members of the AIC for all appraisals.

In regard to the subject property, this involved the following steps:

1. Viewing of the subject property was undertaken on June 2, 2020. All photographs of the subject property were taken on that date.
2. Acquisition of Regional, City, District and Neighbourhood data from the City of New Westminster, Statistics Canada and other market sources.
3. Zoning and site information obtained from the City of New Westminster, the site plan and from a physical viewing of the property.
4. Review of information obtained from the City of New Westminster which includes such details on: taxes, building and development, regional and neighbourhood trends and land use policies.
5. Statistical data has also been reviewed from the Land Registry, Canada Mortgage and Housing, the Multiple Listing Service (Paragon) and information available from the British Columbia Assessment Authority.
6. Estimation of the highest and best use of the subject property.

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APPENDIX I	VALUATION REPORT

1. The Direct Comparison Approach and a Cursory Residual Approach were used to estimate the value of the subject property. The Income and Cost Approaches were not used.
2. In developing the Direct Comparison Approach and Cursory Residual Approach, market data was obtained from discussions with owners, managers and agents, municipal officials and others knowledgeable with properties similar to the subject or this sector of the market. This information is contained within our files.
3. Final Estimate of Market Value was prepared, subject to the Assumptions and Limiting Conditions of the Appraisal.
4. Completion of any technical surveys or investigations were not undertaken, such as:
5. • a survey of the site;
   • investigations into the load-bearing qualities of the soils;
   • an environmental review of the property;
   • environmental assessment of the land.
6. Final Value excludes all sub-surface (mineral, oil, etc.) rights, as well as timber rights, if any exist.

ADDENDUM B - ASSUMPTIONS & LIMITING CONDITIONS

• This letter is not valid unless original signatures are evident.
• The full appraisal report assumes that there is no change in the physical or leasable status of the subject property between the valuation date, viewing date and date of this report.
• A full narrative appraisal was prepared, dated June 2, 2020.
• It is assumed that there are no existing leases or financial encumbrances affecting the subject property as of the effective date of appraisal, unless expressly noted within this report.
• This summary letter has been prepared for the exclusive use of Beijing Enterprises Medical and Health Industry Group Ltd. Possession of this summary letter, or a copy thereof, does not carry with it the right to reproduction or publication, in whole or in part, nor may it be used for any purpose by any other than the recipient, without the written consent and approval of BCS Real Estate.

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APPENDIX I	VALUATION REPORT

• Neither all nor any part of the contents of this summary letter shall be disseminated or otherwise conveyed to the public through advertising media, public relations media, news media, sales media or any other media for public communication documentation without the prior written consent and approval of the firm, BCS Real Estate.
• The title search is attached as an addendum to the full report. The individual documents outlined in the title search have neither been provided nor reviewed and it is assumed that, unless specifically indicated within this report, they would not have an impact upon value. If there are any concerns regarding these documents, we would advise the reader to obtain appropriate legal advice.
• Nothing in this summary letter is intended as a legal opinion as to the state of the title. The full narrative report is prepared on the premise that the property is free and clear of all liens or encumbrances, except as shown on the title search and interpreted herein, and on the assumption that the improvements do not encroach onto adjacent lands.
• We are not environmental consultants or geotechnical engineers and have not been provided with any soils surveys or other environmental studies on the subject property. As such, we do not know if the subject site and improvements are free of soil contamination or environmental problems. For the purpose of this report, it is assumed that the subject does not suffer from any environmental or geotechnical problems. The reader is cautioned that if such a problem were to exist, it could have an impact on value.
• The author is not a qualified land surveyor and no legal survey concerning the subject property has been provided. Site dimensions, areas, diagrams and photographs, etc., are presented in this report for the limited purpose of illustration and are not to be relied upon in themselves.
• No investigation has been undertaken with the local zoning office, the fire department, the building inspector, the health department or any other government regulatory agency unless such investigations are expressly represented to have been made in this report. The subject property must comply with such government regulations and, if it does not comply, its non-compliance may affect market value. To be certain of compliance, further investigation may be necessary.
• The analysis set out in this report relied upon written and verbal information of market transactions, data and statistics obtained from a variety of sources we considered reliable. A concerted effort was made to verify the accuracy of the information herein contained. Since this appraisal is not intended to be used for court purposes or arbitration, some of the information set out in this report may not have been fully documented or confirmed by reference to primary sources.

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APPENDIX I	VALUATION REPORT

ADDENDUM C - CONDENSED TITLE SUMMARY

The following is a summary of all legal notations and charges, liens and interests registered against title to the Property as at June 2, 2020:

PID: 004-346-203

Parcel "A" (Reference Plan 12892) of that Parcel Lying Between Royal and Queens Avenues and Sixth and Seventh Streets Shown Marked "School" on Plan 2620.

The title search dated June 2, 2020 shows that the registered owner of the Property is 1052301 BC Ltd (the "Registered Owner").

1. Covenant P66447 filed 1978-07-12 in favour of City of New Westminster (Remarks: L.T.A Section 215).
2. Statutory Right of Way BB39752 filed 2010-01-15 in favour of Shaw Cablesystems Limited.
3. Lease CA3325648 filed 2013-08-30 with 972827 B.C. Ltd. (Remarks: Part shown on plan EPP34941).
4. Mortgage CA6484821 registered on 2017-12-01 in favour of Canadian Mortgage Servicing Corporation (Remarks: modified by CA6743882).
5. Assignments of Rents CA6484822 registered on 2017-12-01 in favour of Canadian Mortgage Servicing Corporation (Remarks: modified by CA6743882).
6. Priority Agreement CA6484926 filed 2017-12-01 (Remarks: Granting CA6484821 priority over CA3325648).
7. Priority Agreement CA6484927 filed 2017-12-01 (Remarks: Granting CA6484822 priority over CA3325648).
8. Modification CA6743881 filed 2018-04-18 (Remarks: Modification of CA6484821).
9. Modification CA6743882 filed 2018-04-18 (Remarks: Modification of CA6484822).

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APPENDIX II	GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the directors of the Company collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The directors of the Company, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

Interests of directors and chief executive of the Company

As at the Latest Practicable Date, the interests of the directors and the chief executive of the Company in the shares, underlying shares and debentures of the Company or its associated corporations, as defined in Part XV of the SFO and as recorded in the register required to be kept by the Company under Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO and the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") as contained in Appendix 10 to the Listing Rules were as follows:

Long position in the shares and underlying shares of the Company

						Approximate
						percentage of
				Interest in	the issued share
		Interest in		underlying	capital of the
Name of director	Capacity	Shares		Shares	Company
Mr. Wang Zheng Chun	Beneficial owner	5,468,750	30,000,000		0.58%
				(Note 3)
	Interest held by spouse	35,074,000		-	0.58%
		(Note 1)
	Interest held by controlled	64,811,000		-	1.07%
	corporation	(Note 2)
		105,353,750	30,000,000	2.23%
Mr. Zhu	Beneficial owner		30,000,000	0.49%
				(Note 3)
Mr. Liu	Beneficial owner		30,000,000	0.49%
				(Note 3)

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APPENDIX II		GENERAL INFORMATION
				Approximate
				percentage of
			Interest in	the issued share
		Interest in	underlying	capital of the
Name of director	Capacity	Shares	Shares	Company
Mr. Gu	Beneficial owner		30,000,000	0.49%
			(Note 3)
Mr. Zhang Jing Ming	Beneficial owner		20,000,000	0.33%
			(Note 3)
Mr. Hu Shiang Chi	Beneficial owner		15,000,000	0.25%
			(Note 3)
Mr. Siu Kin Wai	Beneficial owner		10,000,000	0.16%
			(Note 3)
Mr. Robert Winslow Koepp	Beneficial owner		7,000,000	0.12%
			(Note 3)
Mr. Wu Yong Xin	Beneficial owner		4,000,000	0.07%
			(Note 3)
Mr. Tse Man Kit, Keith	Beneficial owner		4,000,000	0.07%
			(Note 3)
Mr. Zhang Yun Zhou	Beneficial owner		2,000,000	0.03%
			(Note 3)

Notes:

1. Mr. Wang Zheng Chun is deemed to be interested in 35,074,000 shares, being the interests beneficially held by his spouse, Madam Shen Ling Zhao.
2. The 64,811,000 shares are held by Hillfame Holdings Limited, a company incorporated in the British Virgin Islands and the entire issued share capital of which is beneficially owned by Mr. Wang Zheng Chun.
3. The interests were derived from share options granted by the Company on 2 April 2015 and 28 January 2016 which entitled the holders thereof to subscribe for Shares at an exercise price of HK$0.61 and HK$0.53 per Share. First 30% of the share options granted will be vested in one year after 2 April 2015 and 28 January 2016 (as the case may be), second 30% of the share options granted will be vested in two years after 2 April 2015 and 28 January 2016 (as the case may be) and remaining 40% of the share options granted will be vested in three years after 2 April 2015 and 28 January 2016 (as the case may be). The share options are exercisable from the vesting date until 1 April 2025 and 27 January 2026 (as the case may be).

- 52 -

APPENDIX II	GENERAL INFORMATION

Save as disclosed above, as at the Latest Practicable Date, none of the directors of the Company or their associates had any interests and/or short position in the shares, underlying shares and debentures of the Company or any of its associated corporations as defined in Part XV of the SFO or as recorded in the register required to be kept by the Company under Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO and the Model Code.

Interests of Substantial Shareholders

As at the Latest Practicable Date, so far as known to the directors of the Company, the following persons, other than a director and the chief executive of the Company had, or were deemed to have, an interest or short positions in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO or as recorded in the register required to be kept under section 336 of the SFO:

			Approximate
			percentage of
			the issued
			share capital
		Number of	of the
Name of Shareholder	Capacity	Shares held	Company
Cosmic Stand International	Beneficial owner	945,000,000	15.55%
Limited	(Note 1)
Beijing Properties (Holdings)	Interest held by	945,000,000	15.55%
Limited	controlled
北京建設（控股）有限公司	corporation (Note 1)
Beijing Enterprises Real Estate	Interest held by	945,000,000	15.55%
(HK) Limited	controlled
北控置業（香港）有限公司	corporation (Note 1)
Beijing Enterprises Group	Interest held by	945,000,000	15.55%
Company Limited	controlled
北京控股集團有限公司	corporation (Note 1)
北京北控置業集團有限公司	Interest held by	945,000,000	15.55%
	controlled
	corporation (Note 1)
Beijing Financial Holdings	Interest held by	548,409,806	9.02%
Group Limited	controlled
北京金融控股集團有限公司	corporation (Note 2)

- 53 -

APPENDIX II	GENERAL INFORMATION
			Approximate
			percentage of
			the issued
			share capital
		Number of	of the
Name of Shareholder	Capacity	Shares held	Company
Beijing Financial Investment	Interest held by	548,409,806	9.02%
Holdings Limited	controlled
北京金融投資控股有限公司	corporation (Note 2)
Beijing Investment Co., Limited	Beneficial owner	548,409,806	9.02%
北京投資有限公司	(Note 2)
Ng Kin Nam	Beneficial owner	401,300,000	6.60%
吳健南
江河創建集團股份有限公司	Interest held by	324,684,000	5.34%
	controlled
	corporation (Note 3)

Notes:

1. These Shares were beneficially owned by Cosmic Stand International Limited. Cosmic Stand International Limited is wholly owned by Beijing Properties (Holdings) Limited. Beijing Properties (Holdings) Limited is owned as to 35.72% by Beijing Enterprises Real Estate (HK) Limited, 22.73% by Brilliant Bright Holdings Limited, 7.11% by Beijing Holdings Limited and 1.28% by Illumination Holdings Limited (a wholly owned subsidiary of Beijing Holdings Limited which is in turn a wholly owned subsidiary of Beijing Enterprises Group Company Limited). Beijing Enterprises Real Estate (HK) Limited is wholly owned by 北京北控置業集團有限公司 which is in turn wholly owned by Beijing Enterprises Group Company Limited. Accordingly, Beijing Properties (Holdings) Limited, Beijing Enterprises Real Estate (HK) Limited, 北京北控置業集團有限公司 and Beijing Enterprises Group Company Limited are deemed to be interested in the 945,000,000 Shares beneficially owned by Cosmic Stand International Limited under the SFO.
2. These Shares were beneficially owned by Beijing Investment Co., Limited. Beijing Investment Co., Limited is wholly owned by Beijing Financial Holdings Group Limited which is in turn wholly owned by Beijing Financial Investment Holdings Limited. Accordingly, these companies are deemed to be interested in the 548,409,806 Shares beneficially owned by Beijing Investment Co., Limited under the SFO.
3. 200,400,000 Shares were beneficially owned by Easy Glory Holding Limited, which is in turn wholly-owned by Gloryeild Enterprises Limited ("Gloryeild"). Gloryeild is wholly-owned by Sundart Holdings Limited and is indirectly wholly-owned by Jangho Curtain Wall Hong Kong Limited ("Jangho"). Jangho is wholly-owned by 江河創建集團股 份有限公司 ("Jianghe"). 124,284,000 Shares were beneficially owned by Advance Finding Investments Limited, which is in turn wholly-owned by Peacemark Enterprises Limited ("Peacemark"). Peacemark is wholly-owned by Jangho and is indirectly wholly-owned by Jianghe. Accordingly, Jianghe is deemed to be interested in 324,684,000 Shares under the SFO.

- 54 -

APPENDIX II	GENERAL INFORMATION

Save as disclosed above, so far as is known to the directors or the chief executive of the Company, no other persons (not being a director or chief executive of the Company) had, or were deemed to have, an interest or short position in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO or as recorded in the register required to be kept under section 336 of the SFO.

Save as disclosed below, no other Directors are directors or employees of a company which has an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Name of Director	Title	Company
Mr. Siu Kin Wai	Chief executive officer	Beijing Properties (Holdings) Limited
	Executive director	北京建設（控股）有限公司

3. DIRECTORS' INTERESTS IN ASSETS OF THE GROUP OR CONTRACTS OR ARRANGEMENT SIGNIFICANT TO THE GROUP

As at the Latest Practicable Date, none of the directors of the Company had any interest, direct or indirect, in any assets which had been acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2019, being the date to which the latest published audited consolidated financial statements of the Company were made up.

As at the Latest Practicable Date, there is no contract or arrangement entered into by a related party subsisting in which a director of the Company is materially interested and significant in relation to the business of the Group.

4. DIRECTORS' SERVICE CONTRACTS

As at the Latest Practicable Date, none of the directors of the Company had any existing or proposed service contracts with any member of the Group which is not expiring or determinable by such member of the Group within one year without payment of compensation (other than statutory compensation).

5. COMPETING INTERESTS OF DIRECTORS

As at the Latest Practicable Date, as far as the directors of the Company were aware, none of the directors of the Company or their respective close associates had interest in any business which competes or is likely to compete, either directly or indirectly, with the businesses of the Group as would be required to be disclosed under Rule 8.10 of the Listing Rules as if each of them was a controlling shareholder.

6. MATERIAL ADVERSE CHANGE

The directors of the Company confirm that, as at the Latest Practicable Date, there had been no material adverse change in the financial or trading position of the Group since 31 December 2019, the date to which the latest published audited consolidated financial statements of the Group were made up.

- 55 -

APPENDIX II	GENERAL INFORMATION

7. EXPERTS AND CONSENT

The following sets out the qualifications of the experts who have given its opinion or advice contained in this circular:

Name	Qualification
Euto Capital Partners	a corporation licensed to carry out Type 6 (advising
Limited	on corporate finance) regulated activity under the
	SFO and the independent financial adviser of the
	Company to advise the Independent Board
	Committee and the Independent Shareholders in
	respect of the Listco Loan Capitalisation Agreement
	and the transactions contemplated thereunder
BCS Real Estate	Professional Surveyors and Valuers

Each of the above experts has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter or report (as the case may be) and references to its name and logo, in the form and context in which they respectively appear.

As at the Latest Practicable Date, each of the above experts:

1. did not have any shareholding, either directly or indirectly, in the Company or any other member of the Group;
2. did not have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in the Company or any other member of the Group; and
3. did not have any interest, either directly or indirectly, in any assets which have been acquired or disposed of by or leased to any member of the Group, or which were proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2019 (the date to which the latest published audited accounts of the Company were made up).

The letter from Euto Capital dated 6 August 2020 set out on pages 17 to 38 in this circular and the valuation report prepared by the Valuer dated 30 June 2020 set out in Appendix I to this circular, were given for incorporation in this circular.

- 56 -

APPENDIX II	GENERAL INFORMATION

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours at the head office and principal place of business in Hong Kong at Unit 2704, 27/F., 909 Cheung Sha Wan Road, Cheung Sha Wan, Kowloon, Hong Kong from the date of this circular, up to and including the date of the EGM:

1. the Listco Loan Capitalisation Agreement;
2. the letter from the Independent Board Committee dated 6 August 2020, the text of which is set out on pages 15 to 16 of this circular;
3. the letter of advice from the Independent Financial Adviser dated 6 August 2020, the text of which is set out on pages 17 to 38 of this circular;
4. the valuation report prepared by the Valuer dated 30 June 2020, the text of which is set out in Appendix I to this circular;
5. the written consent of the Independent Financial Adviser dated 6 August 2020 as referred to in the above paragraph headed "7. Experts and Consent" in this appendix;
6. the written consent of BCS Real Estate dated 6 August 2020 as referred to in the above paragraph headed "7. Experts and Consent" in this appendix;
7. a copy of this circular.

9. MISCELLANEOUS

This circular and the accompanying proxy form have been prepared in both English and Chinese. In the event of discrepancies, the English text of this circular shall prevail over the Chinese text.

- 57 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2389)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the "EGM") of Beijing Enterprises Medical And Health Industry Group Limited (the "Company") will be held at Unit 2704, 27/F., 909 Cheung Sha Wan Road, Cheung Sha Wan, Kowloon, Hong Kong on Tuesday, 25 August 2020 at 11:00 a.m. for the purpose of considering and, if thought fit, passing with or without modifying the resolution set out below as ordinary resolution of the Company:

Unless the context requires otherwise, capitalised terms used in this notice and the following resolution shall have the same meanings as those defined in the circular of the Company dated 6 August 2020.

ORDINARY RESOLUTION

"THAT

1. the Listco Loan Capitalisation Agreement dated 9 July 2020 between the Company and the Target Company and the transactions contemplated thereunder be and is hereby approved, confirmed and ratified; and
2. any director(s) of the Company be and is/are hereby authorised, for and on behalf of the Company, to enter into any agreement, deed or instrument and/or to execute and deliver all such documents and/or do all such acts on behalf of the Company as he/she may consider necessary, desirable or expedient for the purpose of, or in connection with (i) the implementations and completion of the Listco Loan Capitalisation Agreement and transactions contemplated thereunder; and/or (ii) any amendment, variation or modification of the Listco Loan Capitalisation Agreement and the transactions contemplated thereunder upon such terms and conditions as the Board may think fit."

By order of the Board

Beijing Enterprises Medical and Health Industry Group Limited

Zhu Shi Xing

Chairman

Hong Kong, 6 August 2020

Notes:

1. All resolutions at the meeting will be taken by poll pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the results of the poll will be published on the websites of Hong Kong Exchanges and Clearing Limited and the Company in accordance with the Listing Rules.

- EGM-1 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

1. Any member of the Company entitled to attend and vote at the EGM is entitled to appoint a proxy (or more than one proxy if he holds two or more shares of the Company) to attend and on a poll, vote instead of him. A proxy need not be a member of the Company.
2. Where there are joint registered holders of any share of the Company, any one of such persons may vote at the EGM, either personally or by proxy, in respect of such share as if he/she were solely entitled thereto; but if more than one of such joint holders are present at the EGM personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.
3. For determining the entitlement to attend and vote at the EGM, the register of members of the Company will be closed from Thursday, 20 August 2020 to Tuesday, 25 August 2020, both days inclusive, during which period no transfer of shares of the Company will be registered. In order to attend and vote at the EGM, unregistered holders of shares of the Company should ensure that all share transfer documents accompanied by the relevant share certificates must be lodged with the Company's branch share registrar of the Company in Hong Kong, Union Registrars Limited, at Suites 3301-04, 33/F., Two Chinachem Exchange Square, 338 King's Road, North Point, Hong Kong, for registration not later than 4:00 p.m. on Wednesday, 19 August 2020.
4. In order to be valid, the form of proxy together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power of attorney or authority, must be deposited at the Company's branch share registrar in Hong Kong, Union Registrars Limited, at Suites 3301-04, 33/F., Two Chinachem Exchange Square, 338 King's Road, North Point, Hong Kong not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Delivery of the form of proxy shall not preclude a member of the Company from attending and voting in person at the EGM and, in such event, the instrument appointing a proxy shall be deemed to be revoked.
5. To safeguard the health and safety of the attendees who will attend the EGM and to prevent the spreading of the coronavirus (COVID-19) pandemic, the following measures will be implemented at the EGM:
6. • mandatory body temperature check;
   • compliance with the latest epidemic prevention policy requirement of the Hong Kong government and presentation of the corresponding health certificate;
   • mandatory wearing of surgical face masks; and
   • no refreshments for attendees.

The Company reserves the right to deny entry into or require any person to leave the EGM venue if such person: (i) refuses to comply with any of the above precautionary measures; (ii) is having a body temperature of over 37.4 degree Celsius; and/or (iii) has any flu-like symptoms. For the health and safety of shareholders of the Company, the Company would like to encourage shareholders of the Company to appoint the chairman of the EGM as their proxy to vote on the proposed resolution at the EGM, instead of attending the EGM in person.

As at the date of this notice, the board of directors of the Company comprises seven executive directors, namely Mr. Zhu Shi Xing, Mr. Liu Xue Heng, Mr. Gu Shan Chao, Mr. Siu Kin Wai, Mr. Hu Shiang Chi, Mr. Wang Zheng Chun and Mr. Zhang Jing Ming and five independent non-executive directors, namely Mr. Robert Winslow Koepp, Mr. Gary Zhou, Mr. Tse Man Kit, Keith, Mr. Wu Yong Xin and Mr. Zhang Yun Zhou.

- EGM-2 -