C&D INTERNATIONAL INVESTMENT GROUP LIMITED

C&D International Investment Group Limited

Equities

1908

KYG3165D1097

Real Estate Development & Operations

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C&D International Investment : 2020-12-22 Circulars - MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF (1) 100% EQUITY INTERESTS IN CHENGDU ZHAOXINLIN; (2) 100% EQUITY INTERESTS IN XIAMEN HUILONG; AND (3) 100% EQUITY INTERESTS IN XIAMEN JINGCHENGLONG AND NOTICE OF EXTRAORDINARY GENERAL MEETING

January 15, 2021 at 03:00 pm EST

THIS CIRCULAR IS IMPORTANT AND REQUEST 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 your stockbroker, licensed securities dealer, bank manager, solicitor, professional accountant or other professional advisers.

If you have sold or transferred all your shares in C&D International Investment Group Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser(s) or the transferee(s) or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s).

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.

C&D INTERNATIONAL INVESTMENT GROUP LIMITED

建發國際投資集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1908)

MAJOR AND CONNECTED TRANSACTION

IN RELATION TO THE ACQUISITION OF

100% EQUITY INTERESTS IN CHENGDU ZHAOXINLIN;
100% EQUITY INTERESTS IN XIAMEN HUILONG; AND
100% EQUITY INTERESTS IN XIAMEN JINGCHENGLONG AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Advisor to the Independent Board Committee

and the Independent Shareholders

A notice convening the EGM to be held at Office No. 3517, 35th Floor, Wu Chung House, 213 Queen's Road East, Wanchai, Hong Kong on Friday, 15 January 2021 at 2:30 p.m. is set out on pages N-1 to N-4 of this circular.

A form of proxy for use by the Shareholders at the EGM is enclosed with this circular for despatch to the Shareholders. Whether or not you intend to attend and/or vote at the EGM in person, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the Company's branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong as soon as practicable but in any event not later than 48 hours before the time specified for holding 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 should you so wish.

23 December 2020

	CONTENTS
		Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . .	33
LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR . . . . . . . . . . . . . . . .	34
APPENDIX I - FINANCIAL INFORMATION OF THE GROUP AND
	THE TARGET COMPANIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
APPENDIX IIA - ACCOUNTANTS' REPORT OF CHENGDU ZHAOXINLIN	IIA-1
APPENDIX IIB - ACCOUNTANTS' REPORT OF XIAMEN HUILONG . . . . . . .	IIB-1
APPENDIX IIC - ACCOUNTANTS' REPORT OF XIAMEN
	JINGCHENGLONG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	IIC-1
APPENDIX III - UNAUDITED PRO FORMA FINANCIAL INFORMATION
	OF THE ENLARGED GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . .	III-1
APPENDIX IV	- VALUATION REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	IV-1
APPENDIX V	- STATUTORY AND GENERAL INFORMATION . . . . . . . . . . .	V-1
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . .	N-1
PRECAUTIONARY MEASURES FOR THE EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	N-5

- i -

DEFINITIONS

In this circular, unless otherwise defined, the following expressions have the following meanings:

''Aggregated Transactions''	collectively, the transactions contemplated under the Equity
	Transfer Agreements and the Previous Transactions
''associate(s)''	has the meaning ascribed to it under the Listing Rules
''Auditor''	Grant Thornton Hong Kong Limited, the Company's auditor
''Board''	the board of Directors
''C&D Chengdu''	C&D Real Estate Group Chengdu Company Limited* (建發
	房地產集團成都有限公司), a company established with
	limited liability in the PRC and a wholly-owned subsidiary
	of C&D Real Estate
''C&D Real Estate''	C&D Real Estate Corporation Limited (建發房地產集團有
	限公司) , a c o n t r o l l i n g s h a r e h o l d e r w h i c h h o l d s
	approximately 64.34% of the issued share capital of the
	Company as at the Latest Practicable Date
''C&D Shanghai''	C&D Real Estate Corporation Shanghai Company Limited*
	(建發房地產集團上海有限公司), a company established
	with limited liability in the PRC and a wholly-owned
	subsidiary of C&D Real Estate
''Chengdu Land''	the land parcel located at Plots 3A and 3B, Shahebao
	South* (沙河堡南), Huaguo Village* (花果村), Sansheng
	Township* (三聖鄉), Jinjiang District* (錦江區), Chengdu,
	Sichuan Province, the PRC, with a site area of
	approximately 87,262 sq.m. and an estimated plot ratio
	floor area of not exceeding approximately 236,454 sq.m. for
	residential use
''Chengdu Zhaoxinlin''	Chengdu Zhaoxinlin Real Estate Development Company
	Limited* (成都兆欣麟房地產開發有限公司), a company
	established with limited liability in the PRC on 8 April
	2020
''Chengdu Zhaoxinlin Equity	the equity transfer agreement entered into between Yi Yue
Transfer Agreements''	and C&D Chengdu and the equity transfer agreement
	entered into between Xiamen Zhaoyirong and C&D
	Chengdu both on 28 September 2020, pursuant to which
	C&D Chengdu agreed to sell and Yi Yue and Xiamen
	Zhaoyirong agreed to purchase 95% and 5% equity interests
	in Chengdu Zhaoxinlin respectively

- 1 -

	DEFINITIONS

''Company''	C&D International Investment Group Limited (建發國際投
	資集團有限公司), a company incorporated in the Cayman
	Islands with limited liability and the Shares of which are
	listed on the main board of the Stock Exchange
''connected person(s)''	has the meaning ascribed to it under the Listing Rules
''controlling shareholder(s)''	has the meaning ascribed to it under the Listing Rules
''Cooperation Agreement''	the cooperation agreement entered into among Yi Yue,
	Taicang Qitai, Xiamen Yilong, C&D Real Estate, Xiamen
	Liyuan and C&D Shanghai on 31 October 2019, pursuant to
	which, among other things, C&D Real Estate and Xiamen
	Liyuan agreed to sell and the joint venture agreed to
	purchase 100% equity interests in Xiamen Yilong
''Directors''	the directors of the Company
''EGM''	an extraordinary general meeting to be held at Office No.
	3517, 35th Floor, Wu Chung House, 213 Queen's Road
	East, Wanchai, Hong Kong on Friday, 15 January 2021 at
	2:30 p.m. or any adjournment thereof (as the case may be),
	to approve, among other things, the transactions
	contemplated under the Equity Transfer Agreements
''Enlarged Group''	the Group including the Target Companies following the
	completion of the transactions contemplated under the
	Equity Transfer Agreements
''Equity Transfer Agreements''	the Chengdu Zhaoxinlin Equity Transfer Agreements, the
	Xiamen Huilong Equity Transfer Agreements and the
	Xiamen Jingchenglong Equity Transfer Agreements
''Group''	the Company and its subsidiaries
''Hong Kong''	the Hong Kong Special Administrative Region of the PRC
''Independent Board	an independent Board committee comprising all the
Committee''	independent non-executive Directors, which will be formed
	to advise the Independent Shareholders on the transactions
	contemplated under the Equity Transfer Agreements
''Independent Financial	Euto Capital Partners Limited, a licensed corporation
Advisor'' or ''Euto Capital''	permitted to carry on Type 6 (advising on corporate
	finance) regulated activity under the SFO, being the
	independent financial advisor appointed for the purpose of
	advising the Independent Board Committee and the
	Independent Shareholders as to the transactions
	contemplated under the Equity Transfer Agreements
''Independent Property Valuer''	Cushman & Wakefield Limited, an independent property
or ''C&W''	valuer

- 2 -

	DEFINITIONS

''Independent Shareholders''	Shareholders who, under the Listing Rules, are not required
	to abstain from voting for the resolutions approving the
	Equity Transfer Agreements and the transactions
	contemplated thereunder
''Lands''	the Chengdu Land, the Shanghai Land I and the Shanghai
	Land II
''Latest Practicable Date''	16 December 2020, being the latest practicable date prior to
	the printing of this circular for ascertaining certain
	information contained therein
''Listing Rules''	the Rules Governing the Listing of Securities on the Stock
	Exchange
''PRC''	the People's Republic of China, which for the purpose of
	this circular, excludes Hong Kong, the Macau Special
	Administrative Region and Taiwan
''Previous Transactions''	the transactions announced by the Company, whereby Yi
	Yue entered into (1) the Cooperation Agreement with
	Taicang Qitai, Xiamen Yilong, C&D Real Estate, Xiamen
	Liyuan and C&D Shanghai, pursuant to which, among other
	things, (a) Yi Yue and Taicang Qitai agreed to establish a
	joint venture, in which Yi Yue and Taicang Qitai shall own
	51% and 49% equity interests respectively; (b) C&D Real
	Estate and Xiamen Liyuan agreed to sell, and the joint
	venture agreed to purchase 100% equity interests in Xiamen
	Yilong at nil consideration; and (c) the registered capital of
	Xiamen Yilong shall increase from RMB1,000,000 to
	RMB900,000,000, and the joint venture shall subscribe for
	RMB899,000,000; and (2) the Supplemental Agreement
	with Taicang Qitai, Xiamen Yilong, C&D Real Estate,
	Xiamen Liyuan, C&D Shanghai and Taicang Jinyue,
	pursuant to which, among other things, Taicang Qitai
	agreed to transfer its entire rights and obligations under the
	Cooperation Agreement to Taicang Jinyue, while Taicang
	Jinyue assumed all rights entitled to and all obligations
	undertaken by Taicang Qitai under the Cooperation
	Agreement
''RMB''	Renminbi, the lawful currency of the PRC
''SFO''	the Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong), as amended from time to time

- 3 -

DEFINITIONS

''Shanghai Land I''	the land parcel located at P1 Parcel, 0012 Neighbourhood*
	(0012街坊), 11008	Street* (11008街道), Baoshan District*
	(寶山區), Shanghai, the PRC with a site area of
	approximately 57,954.7 sq.m. and an estimated plot ratio
	floor area of not exceeding approximately 115,909.4 sq.m.
	for residential use
''Shanghai Land II''	the land parcel located at P1 Parcel, 903 Neighbourhood*
	(903街坊), Pujiang Town* (浦江鎮), Minhang District* (閔
	行區), Shanghai, the PRC with a site area of approximately
	32,380.8 sq.m. and an estimated plot ratio floor area of not
	exceeding approximately 64,761.6 sq.m. for residential use
''Share(s)''	the ordinary share(s) of HK$0.1 each of the Company
''Shareholder(s)''	holder(s) of the Share(s)
''sq.m.''	square meter
''Stock Exchange''	The Stock Exchange of Hong Kong Limited
''Supplemental Agreement''	the supplemental agreement to the Cooperation Agreement
	dated 19 December 2019 entered into among Yi Yue,
	Taicang Qitai, Xiamen Yilong, C&D Real Estate, Xiamen
	Liyuan, C&D Shanghai and Taicang Jinyue
''Taicang Jinyue''	Taicang Jinyue Business Consultancy	Company	Limited*
	(太倉金躍商務諮詢有限公司), a company established with
	limited liability in the PRC
''Taicang Qitai''	Taicang Qitai Business Consultancy Company Limited* (太
	倉市栖泰商務諮詢有限公司), a company established with
	limited liability in the PRC
''Target Companies''	Chengdu Zhaoxinlin, Xiamen Huilong and Xiamen
	Jingchenglong
''Well Land''	Well Land International Limited (益能國際有限公司), a
	company limited liability incorporated in the British Virgin
	Islands
''Xiamen Huilong''	Xiamen Huilong Real Estate Development Company
	Limited* (廈門匯瓏房地產開發有限公司), a company
	established with	limited liability	in the	PRC on
	23 September 2019

- 4 -

	DEFINITIONS

''Xiamen Huilong Equity	the equity transfer agreement entered into between Yi Yue
Transfer Agreements''	and C&D Real Estate and the equity transfer agreement
	entered into between Xiamen Zhaoyirong and Xiamen
	Liyuan both on 28 September 2020, pursuant to which (a)
	C&D Real Estate agreed to sell and Yi Yue agreed to
	purchase 95% equity interests in Xiamen Huilong and (b)
	Xiamen Liyuan agreed to sell and Xiamen Zhaoyirong
	agreed to purchase 5% equity interests in Xiamen Huilong
''Xiamen Jingchenglong''	Xiamen Jingchenglong Real Estate Development Company
	Limited* (廈門景呈瓏房地產開發有限公司), a company
	established with limited liability in the PRC on 31 March
	2020
''Xiamen Jingchenglong Equity	the equity transfer agreement entered into between Yi Yue
Transfer Agreements''	and C&D Real Estate and the equity transfer agreement
	entered into between Xiamen Zhaoyirong and Xiamen
	Liyuan both on 28 September 2020, pursuant to which (a)
	C&D Real Estate agreed to sell and Yi Yue agreed to
	purchase 95% equity interests in Xiamen Jingchenglong and
	(b) Xiamen Liyuan agreed to sell and Xiamen Zhaoyirong
	agreed to purchase 5% equity interests in Xiamen
	Jingchenglong
''Xiamen Liyuan''	Xiamen Liyuan Investment Company Limited* (廈門利源投
	資有限公司), a company established with limited liability
	in the PRC and a wholly-owned subsidiary of C&D Real
	Estate
''Xiamen Qianyuan''	Xiamen Qianyuan Asset Valuation and Property Valuation
	Company Limited* (廈門乾元資產評估與房地產估價有限
	責任公司)
''Xiamen Yilong''	Xiamen Yilong Real Estate Development Company
	Limited* (廈門益瓏房地產開發有限公司), a company
	established with limited liability in the PRC
''Xiamen Yongda''	Xiamen Yongda Certified Public Accountants Co., Ltd.*
	(廈門永大會計師事務所有限公司)
''Xiamen Zhaoyirong''	Xiamen Zhaoyirong Property Development Company
	Limited* (廈門兆翊蓉房地產開發有限公司), a company
	established with limited liability in the PRC and an indirect
	wholly-owned subsidiary of the Company

- 5 -

	DEFINITIONS

''Yi Yue''	Xiamen Yi Yue Property Company Limited* (廈門益悅置
	業有限公司), a company established with limited liability
	in the PRC and an indirect wholly-owned subsidiary of the
	Company
''%''	per cent.

For identification purpose only. The English names are only translations of the official Chinese names. In case of inconsistency, the Chinese names prevail.

- 6 -

LETTER FROM THE BOARD

C&D INTERNATIONAL INVESTMENT GROUP LIMITED

建發國際投資集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1908)

Executive Directors:	Registered office:
Mr. Zhuang Yuekai (庄躍凱) (Chairman)	Second Floor, Century Yard
Ms. Zhao Chengmin (趙呈閩)	Cricket Square, P.O. Box 902
Mr. Lin Weiguo (林偉國) (Chief Executive Officer)	Grand Cayman, KY1-1103
	Cayman Islands
Non-executive Directors:
Mr. Huang Wenzhou (黃文洲)	Head office and principal place
Ms. Ye Yanliu (葉衍榴)	of business in Hong Kong:
Mr. Wang Wenhuai (王文懷)	Office No. 3517, 35th Floor
	Wu Chung House
Independent non-executive Directors:	213 Queen's Road East
Mr. Wong Chi Wai (黃羽也維)	Wanchai
Mr. Wong Tat Yan, Paul (黃達仁)	Hong Kong
Mr. Chan Chun Yee (陳振宜)
	23 December 2020
To the Shareholders
Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTION

IN RELATION TO THE ACQUISITION OF

100% EQUITY INTERESTS IN CHENGDU ZHAOXINLIN;
100% EQUITY INTERESTS IN XIAMEN HUILONG; AND
100% EQUITY INTERESTS IN XIAMEN JINGCHENGLONG AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Reference is made to the announcement of the Company dated 28 September 2020.

The purpose of this circular is (i) to provide the Shareholders with further information on the entering into of the Equity Transfer Agreements; (ii) to set out the recommendations from the Independent Board Committee in relation to the entering into of the Equity Transfer Agreements; (iii) to set out the letter from the Independent Financial Advisor to the Independent Board Committee and the Independent Shareholders; and (iv) to give the Shareholders a notice of the EGM and other information in accordance with the requirements of the Listing Rules.

- 7 -

LETTER FROM THE BOARD

INTRODUCTION

References are made to (1) the announcement of the Company dated 31 October 2019 whereby it was announced that Yi Yue, an indirect wholly-owned subsidiary of the Company, entered into the Cooperation Agreement with Taicang Qitai, Xiamen Yilong, C&D Real Estate, Xiamen Liyuan and C&D Shanghai, pursuant to which, among other things, (a) Yi Yue and Taicang Qitai agreed to establish a joint venture, in which Yi Yue and Taicang Qitai shall own 51% and 49% equity interests respectively; (b) C&D Real Estate and Xiamen Liyuan agreed to sell, and the joint venture agreed to purchase 100% equity interests in Xiamen Yilong at nil consideration; and (c) the registered capital of Xiamen Yilong shall increase from RMB1,000,000 to RMB900,000,000, and the joint venture shall subscribe for RMB899,000,000; and (2) the announcement of the Company dated 19 December 2019 whereby it was announced that Yi Yue entered into the Supplemental Agreement with Taicang Qitai, Xiamen Yilong, C&D Real Estate, Xiamen Liyuan, C&D Shanghai and Taicang Jinyue, pursuant to which, among other things, Taicang Qitai agreed to transfer its entire rights and obligations under the Cooperation Agreement to Taicang Jinyue, while Taicang Jinyue assumed all rights entitled to and all obligations undertaken by Taicang Qitai under the Cooperation Agreement.

The Board is pleased to announce that on 28 September 2020, Yi Yue and Xiamen Zhaoyirong, an indirect wholly-owned subsidiary of the Company, entered into the following agreements:

the Chengdu Zhaoxinlin Equity Transfer Agreements, pursuant to which C&D Chengdu agreed to sell and Yi Yue and Xiamen Zhaoyirong agreed to purchase 95% and 5% equity interests in Chengdu Zhaoxinlin respectively. The aggregate cash consideration under the Chengdu Zhaoxinlin Equity Transfer Agreements shall be RMB50,001,583.36, of which Yi Yue and Xiamen Zhaoyirong shall contribute RMB47,501,504.19 and RMB2,500,079.17 respectively. Yi Yue and Xiamen Zhaoyirong shall also repay the shareholder's loan (principal and interest) in the amount of RMB958,643,770.69 (subject to adjustment) previously advanced by C&D Chengdu to Chengdu Zhaoxinlin in accordance with the proportion of their respective equity interests in Chengdu Zhaoxinlin to be held by Yi Yue and Xiamen Zhaoyirong;
the Xiamen Huilong Equity Transfer Agreements, pursuant to which (a) C&D Real Estate agreed to sell and Yi Yue agreed to purchase 95% equity interests in Xiamen Huilong and (b) Xiamen Liyuan agreed to sell and Xiamen Zhaoyirong agreed to purchase 5% equity interests in Xiamen Huilong. The aggregate cash consideration under the Xiamen Huilong Equity Transfer Agreements shall be nil. Yi Yue and Xiamen Zhaoyirong shall repay the shareholder's loan (principal and interest) in the amount of RMB2,588,484,971.47 (subject to adjustment) previously advanced by C&D Real Estate to Xiamen Huilong in accordance with the proportion of their respective equity interests in Xiamen Huilong to be held by Yi Yue and Xiamen Zhaoyirong; and
the Xiamen Jingchenglong Equity Transfer Agreements, pursuant to which (a) C&D Real Estate agreed to sell and Yi Yue agreed to purchase 95% equity interests in Xiamen Jingchenglong and (b) Xiamen Liyuan agreed to sell and Xiamen Zhaoyirong agreed to purchase 5% equity interests in Xiamen Jingchenglong. The aggregate cash consideration under the Xiamen Jingchenglong Equity Transfer

- 8 -

LETTER FROM THE BOARD

Agreements shall be nil. Yi Yue and Xiamen Zhaoyirong shall repay the shareholder's loan (principal and interest) in the amount of RMB1,150,434,283.06 (subject to adjustment) previously advanced by C&D Real Estate to Xiamen Jingchenglong in accordance with the proportion of their respective equity interests in Xiamen Jingchenglong to be held by Yi Yue and Xiamen Zhaoyirong.

CHENGDU ZHAOXINLIN EQUITY TRANSFER AGREEMENTS

Date
28 September 2020
Parties
Vendor:	C&D Chengdu
Purchasers:	Yi Yue and Xiamen Zhaoyirong
Interests to be acquired

Pursuant to the Chengdu Zhaoxinlin Equity Transfer Agreements, C&D Chengdu agreed to sell and Yi Yue and Xiamen Zhaoyirong agreed to purchase 95% and 5% equity interests in Chengdu Zhaoxinlin respectively.

Consideration

The aggregate cash consideration under the Chengdu Zhaoxinlin Equity Transfer Agreements shall be RMB50,001,583.36, of which Yi Yue and Xiamen Zhaoyirong shall contribute RMB47,501,504.19 and RMB2,500,079.17 respectively. Yi Yue and Xiamen Zhaoyirong shall also repay the shareholder's loan (principal and interest) in the amount of RMB958,643,770.69 (subject to adjustment) previously advanced by C&D Chengdu to Chengdu Zhaoxinlin in accordance with the proportion of their respective equity interests in Chengdu Zhaoxinlin to be held by Yi Yue and Xiamen Zhaoyirong after the satisfaction of the conditions precedent under the Chengdu Zhaoxinlin Equity Transfer Agreements. The shareholder's loan provided to Chengdu Zhaoxinlin is for the acquisition and development of the Chengdu Land.

The cash consideration was determined based on arm's length negotiation among Yi Yue, Xiamen Zhaoyirong and C&D Chengdu with reference to the valuation of the total assets and liabilities of Chengdu Zhaoxinlin conducted by Xiamen Yongda and Xiamen Qianyuan, both of which are third parties independent of the Group, its connected persons and C&D Real Estate. As at 15 May 2020, (i) the total assets of Chengdu Zhaoxinlin was valued at approximately RMB1,013,916,017.69; (ii) the net assets of Chengdu Zhaominlin was valued at approximately RMB50,001,583.36; and (iii) the total liabilities of Chengdu Zhaominlin was valued at approximately RMB963,914,434.33. The valuation of Chengdu Zhaoxinlin has been prepared based on the asset-based approach, and assuming that Chengdu Zhaoxinlin will continue to operate and the assets and liabilities of Chengdu Zhaoxinlin will be evaluated by specific assessment method corresponding to such assets and liabilities. The assessed value of the

- 9 -

LETTER FROM THE BOARD

equity interests of Chengdu Zhaoxinlin was determined based on the difference between the assessed value of the total assets and the assessed value of total liabilities. On the other hand, the shareholder's loan of RMB958,643,770.69 (subject to adjustment) to be paid by Yi Yue and Xiamen Zhaoyirong is based on the total amount of shareholder's loan (principal and interests) previously advanced by C&D Chengdu to Chengdu Zhaoxinlin according to the audited accounts of Chengdu Zhaoxinlin as at 15 May 2020 and subject to adjustment for any actual amount incurred for the period after 15 May 2020 to the completion date of the Chengdu Zhaoxinlin Equity Transfer Agreements. As at the Latest Practicable Date, the shareholder's loan (principal and interests) previously advanced by C&D Chengdu to Chengdu Zhaoxinlin was approximately RMB5,272,292,000 as Chengdu Zhaoxinlin paid the total consideration of the Chengdu Land. The reason why the shareholder's loan previously advanced by C&D Chengdu to Chengdu Zhaoxinlin has increased as at the Latest Practicable Date was mainly due to (i) the additional borrowing from C&D Chengdu for the payment of the land consideration with relevant tax and expenses for the Chengdu Land and development cost and other expenditures (such as sales and administrative expenses) for the Chengdu Land paid from May to November 2020; and (ii) interest accrued on the principal of the shareholder's loan. Such adjustment will not result in the transactions contemplated under the Equity Transfer Agreements being categorised as very substantial acquisition under Chapter 14 of the Listing Rules. If the interest adjustment eventually results in the transactions contemplated under the Equity Transfer Agreements being categorised as very substantial acquisition under Chapter 14 of the Listing Rules, the Company will comply with the relevant provisions under the Listing Rules as applicable. As at the Latest Practicable Date, the aggregate consideration under the Chengdu Zhaoxinlin Equity Transfer Agreements (subject to adjustment) was RMB5,322,293,583.36.

The original purpose for Xiamen Yongda and Xiamen Qianyuan to prepare the valuation report of Chengdu Zhaoxinlin as at 15 May 2020 was to fulfil the regulatory requirement of C&D Real Estate in respect of the transactions contemplated under the Chengdu Zhaoxinlin Equity Transfer Agreements and to determine the cash consideration of the acquisition of 100% equity interests in Chengdu Zhaoxinlin as stipulated under the Chengdu Zhaoxinlin Equity Transfer Agreements. As the purpose of acquisition of Chengdu Zhaoxinlin was to acquire the Chengdu Land, the valuation report of Chengdu Zhaoxinlin as at 15 May 2020 conducted by Xiamen Yongda and Xiamen Qianyuan did not present the fair value of the Chengdu Land. The total assets of Chengdu Zhaoxinlin as at 15 May 2020 consisted of cash and amount due to C&D Chengdu, which were used to settle the part consideration of the Chengdu Land. As more shareholder's loan was granted to Chengdu Zhaoxinlin by C&D Chengdu after 15 May 2020, the valuation report of Chengdu Zhaoxinlin as at 15 May 2020 did not reveal the complete and accurate nature of the transactions contemplated under the Chengdu Zhaoxinlin Equity Transfer Agreements. Thus, to avoid any potential confusion, it is not appropriate to disclose the valuation report conducted by Xiamen Yongda and Xiamen Qianyuan in this circular.

Moreover, the Company engaged C&W, a third party independent of the Group, its connected persons and C&D Real Estate, to assess the appraised value of the Chengdu Land as at 31 October 2020. As at 31 October 2020, the appraised value of the Chengdu Land was RMB4,969,000,000. Since (i) the major asset held by Chengdu Zhaoxinlin is the Chengdu Land; (ii) the valuation report of the Chengdu Land was conducted by C&W more recently;

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LETTER FROM THE BOARD

and (iii) the more recent valuation of the Chengdu Land by C&W may be readily used to assess against the consideration contemplated under the Chengdu Zhaoxinlin Equity Transfer Agreements as (a) the purpose of the transactions contemplated under the Chengdu Zhaoxinlin Equity Transfer Agreements was to acquire the Chengdu Land; (b) Chengdu Zhaoxinlin has no other material assets other than the Chengdu Land; and (c) the valuation of the Chengdu Land is covered by the valuation conducted by C&W, but not by the valuation conducted by Xiamen Yongda and Xiamen Qianyuan, the Directors believed that it is sufficient and more appropriate to include the valuation report prepared by C&W in Appendix IV to this circular. Based on the above, the Directors considered that the Company complied with Rules 2.13(2) and 14A.70(7) of the Listing Rules such that this circular is accurate and complete in all material respects and not misleading or deceptive and could fulfil the relevant disclosure requirement.

When determining the aggregate consideration contemplated under the Chengdu Zhaoxinlin Equity Transfer Agreements, the Company had mainly taken into consideration of the Chengdu Land consideration. The Company also considered that: (i) the net valuation surplus of the Chengdu Land is approximately RMB14,264,000 (being the difference between the appraised value of the Chengdu Land as at 31 October 2020 of RMB4,969,000,000 minus the net book value of the Chengdu Land as at 31 August 2020 as set out in the accountants' report of Chengdu Zhaoxinlin of approximately RMB4,779,986,000 and the construction in process during the period from 31 August 2020 to 31 October 2020 (unaudited) of approximately RMB174,750,000); (ii) the Chengdu Land is at a premium location with high development potential; (iii) the appraised value of the Chengdu Land as at 31 October 2020 of RMB4,969,000,000 has increased by approximately 6.13% when compared to the acquisition cost of the Chengdu Land of approximately RMB4,682,000,000; (iv) the valuation conducted by Xiamen Yongda and Xiamen Qianyuan was only relevant to determine the structure and the cash consideration of the transactions contemplated under the Chengdu Zhaoxinlin Equity Transfer Agreements; and (v) the estimated market value for the Chengdu Land after completion of the development (as set out in Appendix IV to this circular) amounting to approximately RMB8,233 million exceeds the sum of estimated total construction cost of carrying out the development amounting to approximately RMB2,274.28 million and the total consideration under the transactions contemplated under the Chengdu Zhaoxinlin Equity Transfer Agreements amounting to approximately RMB5,322.29 million as at the Latest Practicable Date. Based on the above, the Directors believed that the aggregate consideration contemplated under the Chengdu Zhaoxinlin Equity Transfer Agreements did not represent a premium over the the value of the Chengdu Land; and the Directors considered that the aggregate consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

XIAMEN HUILONG EQUITY TRANSFER AGREEMENTS

Date
28 September 2020
Parties
Vendors:	C&D Real Estate and Xiamen Liyuan
Purchasers:	Yi Yue and Xiamen Zhaoyirong

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LETTER FROM THE BOARD

Interests to be acquired

Pursuant to the Xiamen Huilong Equity Transfer Agreements, (a) C&D Real Estate agreed to sell and Yi Yue agreed to purchase 95% equity interests in Xiamen Huilong and (b) Xiamen Liyuan agreed to sell and Xiamen Zhaoyirong agreed to purchase 5% equity interests in Xiamen Huilong.

Consideration

The aggregate cash consideration under the Xiamen Huilong Equity Transfer Agreements shall be nil. Yi Yue and Xiamen Zhaoyirong shall repay the shareholder's loan (principal and interest) in the amount of RMB2,588,484,971.47 (subject to adjustment) previously advanced by C&D Real Estate to Xiamen Huilong in accordance with the proportion of their respective equity interests in Xiamen Huilong to be held by Yi Yue and Xiamen Zhaoyirong after the satisfaction of the conditions precedent under the Xiamen Huilong Equity Transfer Agreements. The shareholder's loan provided to Xiamen Huilong is for the acquisition and development of the Shanghai Land I.

The cash consideration was determined based on arm's length negotiation among Yi Yue, Xiamen Zhaoyirong, C&D Real Estate and Xiamen Liyuan with reference to the valuation of the total assets and liabilities of Xiamen Huilong conducted by Xiamen Yongda and Xiamen Qianyuan, both of which are third parties independent of the Group, its connected persons and C&D Real Estate. As at 31 May 2020, (i) the total assets of Xiamen Huilong was valued at approximately RMB2,590,053,205.77; (ii) the net assets of Xiamen Huilong was valued at approximately RMB0; and (iii) the total liabilities of Xiamen Huilong was valued at approximately RMB2,590,053,205.77. The valuation of Xiamen Huilong has been prepared based on the asset-based approach, and assuming that Xiamen Huilong will continue to operate and the assets and liabilities of Xiamen Huilong will be evaluated by specific assessment method corresponding to such assets and liabilities. The assessed value of the equity interests of Xiamen Huilong was determined based on the difference between the assessed value of the total assets and the assessed value of total liabilities. On the other hand, the shareholder's loan of RMB2,588,484,971.47 (subject to adjustment) to be paid by Yi Yue and Xiamen Zhaoyirong is based on the total amount of shareholder's loan (principal and interests) previously advanced by C&D Real Estate to Xiamen Huilong according to the audited accounts of Xiamen Huilong as at 31 May 2020 and subject to adjustment for any actual amount incurred for the period after 31 May 2020 to the completion date of the Xiamen Huilong Equity Transfer Agreements. As at the Latest Practicable Date, the shareholder's loan (principal and interests) previously advanced by C&D Real Estate to Xiamen Huilong was approximately RMB2,662,930,000 as Xiamen Huilong paid the total consideration of the Shanghai Land I. The reason why the shareholder's loan previously advanced by C&D Real Estate to Xiamen Huilong increased as at the Latest Practicable Date was mainly due to (i) the additional borrowing from C&D Real Estate for the payment of development cost and other expenditures (such as sales and administrative expenses) for the Shanghai Land I paid from May to November 2020, and (ii) interest accrued on the principal of the shareholder's loan. Such adjustment will not result in the transactions contemplated under the Equity Transfer Agreements being categorised as very substantial acquisition under Chapter 14 of the Listing Rules. If the interest adjustment eventually results in the transactions contemplated under the Equity Transfer Agreements being

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LETTER FROM THE BOARD

categorised as very substantial acquisition under Chapter 14 of the Listing Rules, the Company will comply with the relevant provisions under the Listing Rules as applicable. As at the Latest Practicable Date, the aggregate consideration under the Xiamen Huilong Equity Transfer Agreements (subject to adjustment) was RMB2,662,930,000.

The original purpose for Xiamen Yongda and Xiamen Qianyuan to prepare the valuation report of Xiamen Huilong as at 31 May 2020 was to fulfil the regulatory requirement of C&D Real Estate in respect of the transactions contemplated under the Xiamen Huilong Equity Transfer Agreements and to determine the cash consideration of the acquisition of 100% equity interests in Xiamen Huilong as stipulated under the Xiamen Huilong Equity Transfer Agreements. As the purpose of acquisition of Xiamen Huilong was to acquire the Shanghai Land I, the valuation report of Xiamen Huilong as at 31 May 2020 conducted by Xiamen Yongda and Xiamen Qianyuan did not present the fair value of the Shanghai Land I. The total assets of Xiamen Huilong as at 31 May 2020 consisted of cash and amount due to C&D Real Estate, which were used to settle the total consideration of the Shanghai Land I on 9 June 2020 and constituted the carrying value of the Shanghai Land I. Based on the above, the valuation report of Xiamen Huilong as at 31 May 2020 did not reveal the complete and accurate nature of the transactions contemplated under the Xiamen Huilong Equity Transfer Agreements. Thus, to avoid any potential confusion, it is not appropriate to disclose the valuation report conducted by Xiamen Yongda and Xiamen Qianyuan in this circular.

Moreover, the Company engaged C&W, a third party independent of the Group, its connected persons and C&D Real Estate, to assess the appraised value of the Shanghai Land I as at 31 October 2020. As at 31 October 2020, the appraised value of the Shanghai Land I was RMB2,598,000,000. Since (i) the major asset held by Xiamen Huilong is the Shanghai Land I;

the valuation report of the Shanghai Land I was conducted by C&W more recently; and
the more recent valuation of the Shanghai Land I by C&W may be readily used to assess against the consideration contemplated under the Xiamen Huilong Equity Transfer Agreements as (a) the purpose of the transactions contemplated under the Xiamen Huilong Equity Transfer Agreements was to acquire the Shanghai Land I; (b) Xiamen Huilong has no other material assets other than the Shanghai Land I; and (c) the valuation of the Shanghai Land I is covered by the valuation conducted by C&W, but not by the valuation conducted by Xiamen Yongda and Xiamen Qianyuan, the Directors believed that it is sufficient and more appropriate to include the valuation report prepared by C&W in Appendix IV to this circular. Based on the above, the Directors considered that the Company complied with Rules 2.13(2) and 14A.70(7) of the Listing Rules such that this circular is accurate and complete in all material respects and not misleading or deceptive and could fulfil the relevant disclosure requirement.

When determining the aggregate consideration contemplated under the Xiamen Huilong Equity Transfer Agreements, the Company had mainly taken into consideration of the Shanghai Land I consideration. The Company also considered that: (i) the net valuation surplus of the Shanghai Land I is approximately RMB21,141,000 (being the difference between the appraised value of the Shanghai Land I as at 31 October 2020 of RMB2,598,000,000 minus the net book value of the Shanghai Land I as at 31 August 2020 as set out in the accountants' report of Xiamen Huilong of approximately RMB2,535,837,000 and the construction in process during the period from 31 August 2020 to 31 October 2020 (unaudited) of approximately RMB41,022,000); (ii) the Shanghai Land I is at a premium location with high development potential; (iii) the appraised value of the Shanghai Land I as at 31 October 2020 of

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LETTER FROM THE BOARD

RMB2,598,000,000 has increased by approximately 6.51% when compared to the acquisition cost of the Shanghai Land I of RMB2,439,100,000; (iv) the valuation conducted by Xiamen Yongda and Xiamen Qianyuan was only relevant to determine the structure and the cash consideration of the transactions contemplated under the Xiamen Huilong Equity Transfer Agreements; and (v) the estimated market value for the Shanghai Land I after completion of the development (as set out in Appendix IV to this circular) amounting to approximately RMB4,002 million exceeds the sum of estimated total construction cost of carrying out the development amounting to approximately RMB995.77 million and the total consideration under the transactions contemplated under the Xiamen Huilong Equity Transfer Agreements amounting to approximately RMB2,662.93 million as at the Latest Practicable Date. Based on the above, the Directors believed that the aggregate consideration contemplated under the Xiamen Huilong Equity Transfer Agreements did not represent a premium over the value of the Shanghai Land I; and the Directors considered that the aggregate consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

XIAMEN JINGCHENGLONG EQUITY TRANSFER AGREEMENTS

Date
28 September 2020
Parties
Vendors:	C&D Real Estate and Xiamen Liyuan
Purchasers:	Yi Yue and Xiamen Zhaoyirong
Interests to be acquired

Pursuant to the Xiamen Jingchenglong Equity Transfer Agreements, (a) C&D Real Estate agreed to sell and Yi Yue agreed to purchase 95% equity interests in Xiamen Jingchenglong and (b) Xiamen Liyuan agreed to sell and Xiamen Zhaoyirong agreed to purchase 5% equity interests in Xiamen Jingchenglong.

Consideration

The aggregate cash consideration under the Xiamen Jingchenglong Equity Transfer Agreements shall be nil. Yi Yue and Xiamen Zhaoyirong shall repay the shareholder's loan (principal and interest) in the amount of RMB1,150,434,283.06 (subject to adjustment) previously advanced by C&D Real Estate to Xiamen Jingchenglong in accordance with the proportion of their respective equity interests in Xiamen Jingchenglong to be held by Yi Yue and Xiamen Zhaoyirong after the satisfaction of the conditions precedent under the Xiamen Jingchenglong Equity Transfer Agreements. The shareholder's loan provided to Xiamen Jingchenglong is for the acquisition and development of the Shanghai Land II.

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LETTER FROM THE BOARD

persons and C&D Real Estate. As at 31 May 2020, (i) the total assets of Xiamen Jingchenglong was valued at approximately RMB1,150,434,283.06; (ii) the net assets of Xiamen Jingchenglong was valued at approximately RMB0 and; (iii) the total liabilities of Xiamen Jingchenglong was valued at approximately RMB1,150,434,283.06. The valuation of Xiamen Jingchenglong has been prepared based on the asset-based approach, and assuming that Xiamen Jingchenglong will continue to operate and the assets and liabilities of Xiamen Jingchenglong will be evaluated by specific assessment method corresponding to such assets and liabilities. The assessed value of the equity interests of Xiamen Jingchenglong was determined based on the difference between the assessed value of the total assets and the assessed value of total liabilities. On the other hand, the shareholder's loan of RMB1,150,434,283.06 (subject to adjustment) to be paid by Yi Yue and Xiamen Zhaoyirong is based on the total amount of shareholder's loan (principal and interests) previously advanced by C&D Real Estate to Xiamen Jingchenglong according to the audited accounts of Xiamen Jingchenglong as at 31 May 2020 and subject to adjustment for any actual amount incurred for the period after 31 May 2020 to the completion date of the Xiamen Jingchenglong Equity Transfer Agreements. As at the Latest Practicable Date, the shareholder's loan (principal and interests) previously advanced by C&D Real Estate to Xiamen Jingchenglong was approximately RMB1,229,570,000 as Xiamen Jingchenglong paid the total consideration of the Shanghai Land II. The reason why the shareholder's loan previously advanced by C&D Real Estate to Xiamen Jingchenglong has increased as at the Latest Practicable Date was mainly due to (i) the additional borrowing from C&D Real Estate for the payment of development cost and other expenditures (such as sales and administrative expenses) for the Shanghai Land II paid from May to November 2020; and (ii) interest accrued on the principal of the shareholder's loan. Such adjustment will not result in the transactions contemplated under the Equity Transfer Agreements being categorised as very substantial acquisition under Chapter 14 of the Listing Rules. If the interest adjustment eventually results in the transactions contemplated under the Equity Transfer Agreements being categorised as very substantial acquisition under Chapter 14 of the Listing Rules, the Company will comply with the relevant provisions under the Listing Rules as applicable. As at the Latest Practicable Date, the aggregate consideration under the Xiamen Jingchenglong Equity Transfer Agreements (subject to adjustment) was RMB1,229,570,000.

The original purpose for Xiamen Yongda and Xiamen Qianyuan to prepare the valuation report of Xiamen Jingchenglong as at 31 May 2020 was to fulfil the regulatory requirement of C&D Real Estate in respect of the transactions contemplated under the Xiamen Jingchenglong Equity Transfer Agreements and to determine the cash consideration of the acquisition of 100% equity interests in Xiamen Jingchenglong as stipulated under the Xiamen Jingchenglong Equity Transfer Agreements. As the purpose of acquisition of Xiamen Jingchenglong was to acquire the Shanghai Land II, the valuation report of Xiamen Jingchenglong as at 31 May 2020 conducted by Xiamen Yongda and Xiamen Qianyuan did not present the fair value of the Shanghai Land II. The total assets of Xiamen Jingchenglong as at 31 May 2020 consisted of cash and amount due to C&D Real Estate, which were used to settle the total consideration of the Shanghai Land II on 4 June 2020 and constituted the carrying value of the Shanghai Land

Based on the above, the valuation report of Xiamen Jingchenglong as at 31 May 2020 did not reveal the complete and accurate nature of the transactions contemplated under the Xiamen

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LETTER FROM THE BOARD

Jingchenglong Equity Transfer Agreements. Thus, to avoid any potential confusion, it is not appropriate to disclose the valuation report conducted by Xiamen Yongda and Xiamen Qianyuan in this circular.

Moreover, the Company engaged C&W, a third party independent of the Group, its connected persons and C&D Real Estate, to assess the appraised value of the Shanghai Land II as at 31 October 2020. As at 31 October 2020, the appraised value of the Shanghai Land II was RMB1,178,000,000. Since (i) the major asset held by Xiamen Jingchenglong is the Shanghai Land II; (ii) the valuation report of the Shanghai Land II was conducted by C&W more recently; and (iii) the more recent valuation of the Shanghai Land II by C&W may be readily used to assess against the consideration contemplated under the Xiamen Jingchenglong Equity Transfer Agreements as (a) the purpose of the transactions contemplated under the Xiamen Jingchenglong Equity Transfer Agreements was to acquire the Shanghai Land II; (b) Xiamen Jingchenglong has no other material assets other than the Shanghai Land II; and (c) the valuation of the Shanghai Land II is covered by the valuation conducted by C&W, but not by the valuation conducted by Xiamen Yongda and Xiamen Qianyuan, the Directors believed that it is sufficient and more appropriate to include the valuation report prepared by C&W in Appendix IV to this circular. Based on the above, the Directors considered that the Company complied with Rules 2.13(2) and 14A.70(7) of the Listing Rules such that this circular is accurate and complete in all material respects and not misleading or deceptive and could fulfil the relevant disclosure requirement.

When determining the aggregate consideration contemplated under the Xiamen Jingchenglong Equity Transfer Agreements, the Company had mainly taken into consideration of the Shanghai Land II consideration. The Company also considered that: (i) the net valuation surplus of the Shanghai Land II is approximately RMB12,379,000 (being the difference between the appraised value of the Shanghai Land II as at 31 October 2020 of RMB1,178,000,000 minus the net book value of the Shanghai Land II as at 31 August 2020 as set out in the accountants' report of Xiamen Jingchenglong of approximately RMB1,144,846,000 and the construction in process during the period from 31 August 2020 to 31 October 2020 (unaudited) of approximately RMB20,775,000); (ii) the Shanghai Land II is at a premium location with high development potential; (iii) the appraised value of the Shanghai Land II as at 31 October 2020 of RMB1,178,000,000 has increased by approximately 7.75% when compared to the acquisition cost of the Shanghai Land II of RMB1,093,300,000; (iv) the valuation conducted by Xiamen Yongda and Xiamen Qianyuan was only relevant to determine the structure and the cash consideration of the transactions contemplated under the Xiamen Jingchenglong Equity Transfer Agreements; and (v) the estimated market value for the Shanghai Land II after completion of the development (as set out in Appendix IV to this circular) amounting to approximately RMB3,156 million exceeds the sum of estimated total construction cost of carrying out the development amounting to approximately RMB585.35 million and the total consideration under the transactions contemplated under the Xiamen Jingchenglong Equity Transfer Agreements amounting to approximately RMB1,229.57 million as at the Latest Practicable Date. Based on the above, the Directors believed that the aggregate consideration contemplated under the Xiamen Jingchenglong Equity Transfer Agreements did not represent a premium over the value of the Shanghai Land II; and the Directors considered that the aggregate consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

CONDITIONS PRECEDENT UNDER THE EQUITY TRANSFER AGREEMENTS

Completion of the transactions contemplated under the Equity Transfer Agreements will be conditional upon the approval by the Independent Shareholders in respect of each of the transactions contemplated under the Equity Transfer Agreements.

The transactions contemplated under each of the Chengdu Zhaoxinlin Equity Transfer Agreements, the Xiamen Huilong Equity Transfer Agreements and the Xiamen Jingchenglong Equity Transfer Agreements are not inter-conditional to each other.

COMPLETION

With effect from completion of the transactions contemplated under the Equity Transfer Agreements, Yi Yue and Xiamen Zhaoyirong will hold 95% and 5% equity interests in each of Chengdu Zhaoxinlin, Xiamen Huilong and Xiamen Jingchenglong respectively. As such, each of Chengdu Zhaoxinlin, Xiamen Huilong and Xiamen Jingchenglong will become an indirect wholly-owned subsidiary of the Company and each of their financial results will be consolidated into the consolidated financial statement of the Company.

CAPITAL COMMITMENT OF YI YUE AND XIAMEN ZHAOYIRONG

The aggregate consideration under the Equity Transfer Agreements as at the Latest Practicable Date was RMB9,214,793,583.36 (subject to adjustment). Yi Yue and Xiamen Zhaoyirong will finance the aggregate consideration in the sum of approximately RMB9,214,793,583.36 (subject to adjustment) under the Equity Transfer Agreements by internal resources of the Company. The Company considered that it would have sufficient internal resources to settle the aggregate consideration under the Equity Transfer Agreements.

INFORMATION ABOUT CHENGDU ZHAOXINLIN

Chengdu Zhaoxinlin was established with limited liability in the PRC on 8 April 2020. Set out below is certain financial information of Chengdu Zhaoxinlin for the period from 8 April 2020 to 15 May 2020:

	As at
	15 May
	2020
	(audited)
	(in RMB)
Total assets	1,013,916,017.69
Net assets	50,001,583.36

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LETTER FROM THE BOARD

								For the
								period from
							8 April 2020 to
								15 May 2020
								(audited)
								(in RMB)
Net profit before taxation					2,111.15
Net profit after taxation					1,583.36
Shareholding structure
	Before the completion of the	Immediately after the
	acquisition of	completion of the acquisition of
	Chengdu Zhaoxinlin	Chengdu Zhaoxinlin
	Amount of the			Amount of the
	registered			registered
	capital of			capital of
Name of	Chengdu			Chengdu
shareholder	Zhaoxinlin	Percentage	Zhaoxinlin		Percentage
	(in RMB)			(in RMB)
C&D Chengdu	50,000,000		100%		-		-
Yi Yue	-	-	47,500,000	95%
Xiamen
Zhaoyirong	-		-		2,500,000	5%

Total:	50,000,000		100%	50,000,000	100%

Reconciliation of the valuation of the Chengdu Land

The Chengdu Land is revalued by C&W at RMB4,969,000,000 as at 31 October 2020. Details of the valuation are summarised in Appendix IV to this circular. In accordance with the Chengdu Zhaoxinlin's accounting policy, the Chengdu Land is stated at cost less accumulated depreciation. As such, there is a net revaluation surplus, representing the excess market value of the Chengdu Land over its book value plus consideration to be paid, of approximately RMB14,264,000, of which will not be included in Chengdu Zhaoxinlin's accounts for the period from 8 April 2020 (date of establishment) to 31 August 2020 under the accountants' report of Chengdu Zhaoxinlin in Appendix IIA to this circular.

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LETTER FROM THE BOARD

Disclosure of the reconciliation of the valuation of the Chengdu Land as required under Rule 5.07 of the Listing Rules is set out below:

	RMB'000
Valuation of the Chengdu Land as at 31 October 2020 as set out
in the valuation report included in Appendix IV	4,969,000
less: Net book value of the Chengdu Land as at 31 August 2020 as set
out in accountants' report included in Appendix IIA
- Properties under development for sale	4,779,986
less: Construction in process during the period from 31 August 2020 to
31 October 2020 (unaudited)	174,750
Net revaluation surplus	14,264

Financial effects of entering into of the Chengdu Zhaoxinlin Equity Transfer Agreements

Set out in Appendix III to this circular is the pro forma financial information of the Enlarged Group, with the bases of preparation, which illustrates the financial impact of the Chengdu Zhaoxinlin Equity Transfer Agreements on the assets and liabilities of the Group.

Upon completion of the transactions contemplated under the Chengdu Zhaoxinlin Equity Transfer Agreements, the Group will hold 100% equity interests of Chengdu Zhaoxinlin. Consequently, Chengdu Zhaoxinlin will become a subsidiary of the Company and the financial results and assets and liabilities of Chengdu Zhaoxinlin will be consolidated into the consolidated financial statements of the Company.

Earning

As at the Latest Practicable Date, the construction project has commenced on the Chengdu Land. As it generally takes more than one year to develop the property project before the completion, revenue can only be recognised upon completion of the construction project and the titles of the properties are passed to the customers in stages. Therefore, the earnings of Chengdu Zhaoxinlin would fluctuate from year to year.

Except for the professional fees incurred in relation to the transactions contemplated under the Chengdu Zhaoxinlin Equity Transfer Agreements, the amount of which will be recognised as expenses in the consolidated statements of profit or loss and other comprehensive income of the Company resulting a minor reduction in the Group's yearly earnings, the earnings for the year of the Group will not be significantly affected.

(ii) Cash flow

The Group had cash at bank and in hand of approximately RMB9,929 million as at 30 June 2020. Pursuant to the Chengdu Zhaoxinlin Equity Transfer Agreements, the cash consideration of RMB50,001,583.36 and the shareholder's loan (principal and interest) in the amount of approximately RMB5,272,292,000 (subject to adjustment) as at the Latest Practicable Date will be paid by Yi Yue and Xiamen Zhaoyirong to C&D Chengdu upon the fulfilment of conditions precedent under the Chengdu Zhaoxinlin Equity Transfer Agreements.

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LETTER FROM THE BOARD

(iii) Net asset value

The consolidated net asset of the Group as at 30 June 2020 was approximately RMB17,865 million. Upon the completion of the transactions contemplated under the Chengdu Zhaoxinlin Equity Transfer Agreements, in view that the surplus between the cash consideration under the Chengdu Zhaoxinlin Equity Transfer Agreements and the consolidated net asset value of Chengdu Zhaoxinlin will be offset by an equivalent increase in the properties under development for sale of the Group, the net asset of the Group will not be significantly changed.

(iv) Gearing

The gearing ratio of the Group as at 30 June 2020 was approximately 303.25%, as derived by dividing the total borrowings of the Group as at 30 June 2020 by the total equity of the Group as at 30 June 2020. Upon the completion of the transactions contemplated under the Chengdu Zhaoxinlin Equity Transfer Agreements, given that: (a) the Group intends to repay the shareholder's loan of Chengdu Zhaoxinlin via the Group's internal resources and therefore the total borrowings of the Group shall remain unchanged and (b) the net asset of the Group will not be significantly changed as illustrated in (iii) above, the gearing ratio will not be significantly changed.

Assets & Liabilities

The consolidated assets and liabilities of the Group as at 30 June 2020 was approximately RMB139,146 million and RMB121,281 million, respectively. Upon completion of the transactions contemplated under the Chengdu Zhaoxinlin Equity Transfer Agreements, both the assets and liabilities of the Group will be enlarged resulting from consolidating the assets and liabilities of Chengdu Zhaoxinlin into the Group consolidated account.

INFORMATION ABOUT XIAMEN HUILONG

Xiamen Huilong was established with limited liability in the PRC on 23 September 2019. Set out below is certain financial information of Xiamen Huilong for the period from 23 September 2019 to 31 December 2019 and for the five months ended 31 May 2020:

	As at	As at
	31 December	31 May
	2019	2020
	(audited)	(audited)
	(in RMB)	(in RMB)
Total assets	1,688,812.75	2,590,053,205.77
Net assets	1,266,107.06	-

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LETTER FROM THE BOARD

	For the
	period from	For the
	23 September	five months
	2019 to	ended
	31 December	31 May
	2019	2020
	(audited)	(audited)
	(in RMB)	(in RMB)
Net profit/(loss) before taxation	1,688,142.75	(1,564.17)
Net profit/(loss) after taxation	1,266,107.06	(1,564.17)

Shareholding structure
					Immediately after
	Before the completion of the	the completion of
	acquisition of	the acquisition of
	Xiamen Huilong	Xiamen Huilong
	Amount of the			Amount of the
	registered			registered
Name of	capital of			capital of
shareholder	Xiamen Huilong	Percentage	Xiamen Huilong	Percentage
	(in RMB)			(in RMB)
C&D Real Estate	950,000		95%		-	-
Xiamen Liyuan	50,000		5%		-	-
Yi Yue	-	-	950,000	95%
Xiamen
Zhaoyirong	-		-		50,000	5%

Total:	1,000,000		100%	1,000,000	100%

As at the Latest Practicable Date, the registered capital of Xiamen Huilong was not paid.

Reconciliation of the valuation of the Shanghai Land I

The Shanghai Land I is revalued by C&W at RMB2,598,000,000 as at 31 October 2020. Details of the valuation are summarised in Appendix IV to this circular. In accordance with the Xiamen Huilong's accounting policy, the Shanghai Land I is stated at cost less accumulated depreciation. As such, there is a net revaluation surplus, representing the excess market value of the Shanghai Land I over its book value, of approximately RMB21,141,000, of which will not be included in Xiamen Huilong's accounts for the eight months ended 31 August 2020 under the accountants' report of Xiamen Huilong in Appendix IIB to this circular.

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LETTER FROM THE BOARD

Disclosure of the reconciliation of the valuation of the Shanghai Land I as required under Rule 5.07 of the Listing Rules is set out below:

	RMB'000
Valuation of the Shanghai Land I as at 31 October 2020 as set out
in the valuation report included in Appendix IV	2,598,000
less: Net book value of the Shanghai Land I as at 31 August 2020 as
set out in accountants' report included in Appendix IIB
- Properties under development for sale	2,535,837
less: Construction in process during the period from 31 August 2020 to
31 October 2020 (unaudited)	41,022
Net revaluation surplus	21,141

Financial effects of entering into of the Xiamen Huilong Equity Transfer Agreements

Set out in Appendix III to this circular is the pro forma financial information of the Enlarged Group, with the bases of preparation, which illustrates the financial impact of the Xiamen Huilong Equity Transfer Agreements on the assets and liabilities of the Group.

Upon completion of the transactions contemplated under the Xiamen Huilong Equity Transfer Agreements, the Group will hold 100% equity interests of Xiamen Huilong. Consequently, Xiamen Huilong will become a subsidiary of the Company and the financial results and assets and liabilities of Xiamen Huilong will be consolidated into the consolidated financial statements of the Company.

Earning

As at the Latest Practicable Date, the construction project has commenced on the Shanghai Land I. As it generally takes more than one year to develop the property project before the completion, revenue can only be recognised upon completion of the construction project and the titles of the properties are passed to the customers in stages. Therefore, the earnings of Xiamen Huilong would fluctuate from year to year.

Except for the professional fees incurred in relation to the transactions contemplated under the Xiamen Huilong Equity Transfer Agreements, the amount of which will be recognised as expenses in the consolidated statements of profit or loss and other comprehensive income of the Company resulting a minor reduction in the Group's yearly earnings, the earnings for the year of the Group will not be significantly affected.

(ii) Cash flow

The Group had cash at bank and in hand of approximately RMB9,929 million as at 30 June 2020. Pursuant to the Xiamen Huilong Equity Transfer Agreements, the shareholder's loan (principal and interest) in the amount of approximately RMB2,662,930,000 (subject to

- 22 -

LETTER FROM THE BOARD

adjustment) as at the Latest Practicable Date will be paid by Yi Yue and Xiamen Zhaoyirong to C&D Real Estate upon the fulfilment of conditions precedent under the Xiamen Huilong Equity Transfer Agreements.

(iii) Net asset value

The consolidated net asset of the Group as at 30 June 2020 was approximately RMB17,865 million. Upon the completion of the transactions contemplated under the Xiamen Huilong Equity Transfer Agreements, in view that the surplus between the cash consideration under the Xiamen Huilong Equity Transfer Agreements and the consolidated net asset value of Xiamen Huilong will be offset by an equivalent increase in the properties under development for sale of the Group, the net asset of the Group will not be significantly changed.

(iv) Gearing

The gearing ratio of the Group as at 30 June 2020 was approximately 303.25%, as derived by dividing the total borrowings of the Group as at 30 June 2020 by the total equity of the Group as at 30 June 2020. Upon the completion of the transactions contemplated under the Xiamen Huilong Equity Transfer Agreements, given that: (a) the Group intends to repay the shareholder's loan of Xiamen Huilong via the Group's internal resources and therefore the total borrowings of the Group shall remain unchanged and (b) the net asset of the Group will not be significantly changed as illustrated in (iii) above, the gearing ratio will not be significantly changed.

Assets & Liabilities

The consolidated assets and liabilities of the Group as at 30 June 2020 was approximately RMB139,146 million and RMB121,281 million, respectively. Upon completion of the transactions contemplated under the Xiamen Huilong Equity Transfer Agreements, both the assets and liabilities of the Group will be enlarged resulting from consolidating the assets and liabilities of Xiamen Huilong into the Group consolidated account.

INFORMATION OF XIAMEN JINGCHENGLONG

Xiamen Jingchenglong was established with limited liability in the PRC on 31 March 2020. Set out below is certain financial information of Xiamen Jingchenglong for the period from 26 April 2020 to 31 May 2020:

	As at
	31 May
	2020
	(audited)
	(in RMB)
Total assets	1,150,434,283.06
Net assets	-

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LETTER FROM THE BOARD

For the period from 26 April 2020 to 31 May 2020 (audited)

(in RMB)

Net profit/(loss) before taxation					-
Net profit/(loss) after taxation					-
Xiamen Jingchenglong remained inactive from 31 March 2020 to 26 April 2020.
Shareholding structure
					Immediately after
	Before the completion of	the completion of
	the acquisition of	the acquisition of
	Xiamen Jingchenglong	Xiamen Jingchenglong
	Amount of the			Amount of the
	registered			registered
	capital of			capital of
Name of	Xiamen			Xiamen
shareholder	Jingchenglong	Percentage	Jingchenglong	Percentage
	(in RMB)			(in RMB)
C&D Real Estate	950,000		95%		-	-
Xiamen Liyuan	50,000		5%		-	-
Yi Yue	-	-	950,000	95%
Xiamen
Zhaoyirong	-		-		50,000	5%

Total:	1,000,000		100%	1,000,000	100%

As at the Latest Practicable Date, the registered capital of Xiamen Jingchenglong was not

paid.

Reconciliation of the valuation of the Shanghai Land II

The Shanghai Land II is revalued by C&W at RMB1,178,000,000 at 31 October 2020. Details of the valuation are summarised in Appendix IV to this circular. In accordance with the Xiamen Jingchenglong's accounting policy, the Shanghai Land II is stated at cost less accumulated depreciation. As such, there is a net revaluation surplus, representing the excess market value of the Shanghai Land II over its book value, of approximately RMB12,379,000, of which will not be included in Xiamen Jingchenglong's accounts for the period from 31 March 2020 (date of establishment) to 31 August 2020 under the accountants' report of Xiamen Jingchenglong in Appendix IIC to this circular.

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LETTER FROM THE BOARD

Disclosure of the reconciliation of the valuation of the Shanghai Land II as required under Rule 5.07 of the Listing Rules is set out below:

	RMB'000
Valuation of the Shanghai Land II as at 31 October 2020 as set out
in the valuation report included in Appendix IV	1,178,000
less: Net book value of the Shanghai Land II as at 31 August 2020 as
set out in accountants' report included in Appendix IIC
- Properties under development for sale	1,144,846
less: Construction in process during the period from 31 August 2020 to
31 October 2020 (unaudited)	20,775
Net revaluation surplus	12,379

Financial effects of entering into of the Xiamen Jingchenglong Equity Transfer Agreements

Set out in Appendix III to this circular is the pro forma financial information of the Enlarged Group, with the bases of preparation, which illustrates the financial impact of the Xiamen Jingchenglong Equity Transfer Agreements on the assets and liabilities of the Group.

Upon completion of the transactions contemplated under the Xiamen Jingchenglong Equity Transfer Agreements, the Group will hold 100% equity interests of Xiamen Jingchenglong. Consequently, Xiamen Jingchenglong will become a subsidiary of the Company and the financial results and assets and liabilities of Xiamen Jingchenglong will be consolidated into the consolidated financial statements of the Company.

Earning

As at the Latest Practicable Date, the construction project has commenced on the Shanghai Land II. As it generally takes more than one year to develop the property project before the completion, revenue can only be recognised upon completion of the construction project and the titles of the properties are passed to the customers in stages. Therefore, the earnings of Xiamen Jingchenglong would fluctuate from year to year.

Except for the professional fees incurred in relation to the transactions contemplated under the Xiamen Jingchenglong Equity Transfer Agreements, the amount of which will be recognised as expenses in the consolidated statements of profit or loss and other comprehensive income of the Company resulting a minor reduction in the Group's yearly earnings, the earnings for the year of the Group will not be significantly affected.

(ii) Cash flow

The Group had cash at bank and in hand of approximately RMB9,929 million as at 30 June 2020. Pursuant to the Xiamen Jingchenglong Equity Transfer Agreements, the shareholder's loan (principal and interest) in the amount of approximately RMB1,229,570,000

- 25 -

LETTER FROM THE BOARD

(subject to adjustment) as at the Latest Practicable Date will be paid by Yi Yue and Xiamen Zhaoyirong to C&D Real Estate upon the fulfilment of conditions precedent under the Xiamen Jingchenglong Equity Transfer Agreements.

(iii) Net asset value

The consolidated net asset of the Group as at 30 June 2020 was approximately RMB17,865 million. Upon the completion of the transactions contemplated under the Xiamen Jingchenglong Equity Transfer Agreements, in view that the surplus between the cash consideration under the Xiamen Jingchenglong Equity Transfer Agreements and the consolidated net asset value of Xiamen Jingchenglong will be offset by an equivalent increase in the properties under development for sale of the Group, the net asset of the Group will not be significantly changed.

(iv) Gearing

The gearing ratio of the Group as at 30 June 2020 was approximately 303.25%, as derived by dividing the total borrowings of the Group as at 30 June 2020 by the total equity of the Group as at 30 June 2020. Upon the completion of the transactions contemplated under the Xiamen Jingchenglong Equity Transfer Agreements, given that: (a) the Group intends to repay the shareholder's loan of Xiamen Jingchenglong via the Group's internal resources and therefore the total borrowings of the Group shall remain unchanged and (b) the net asset of the Group will not be significantly changed as illustrated in (iii) above, the gearing ratio will not be significantly changed.

Assets & Liabilities

The consolidated assets and liabilities of the Group as at 30 June 2020 was approximately RMB139,146 million and RMB121,281 million, respectively. Upon completion of the transactions contemplated under the Xiamen Jingchenglong Equity Transfer Agreements, both the assets and liabilities of the Group will be enlarged resulting from consolidating the assets and liabilities of Xiamen Jingchenglong into the Group consolidated account.

INFORMATION ABOUT THE LANDS

Chengdu Land

The Chengdu Land is the major asset held by Chengdu Zhaoxinlin. On 2 April 2020, C&D Chengdu entered into the transaction confirmation letter with Chengdu Planning and Natural Resources Bureau* (成都市規劃和自然資源局) (the ''Chengdu Planning Bureau'') and Chengdu City Public Resources Exchange Service Centre* (成都市公共資源交易服務中心), pursuant to which C&D Chengdu acquired the Chengdu Land at a total consideration of approximately RMB4,682,000,000 with provision to the government of the PRC by way of gratuitous construction of residential housing for a gross floor area of 16,600 sq.m.. On 17 April 2020, Chengdu Zhaoxinlin entered into the supplemental agreement to the land use rights grant contract with the Chengdu Planning Bureau, pursuant to which the land use rights of the Chengdu Land was transferred to Chengdu Zhaoxinlin. On 18 May 2020 and 17 July 2020,

- 26 -

LETTER FROM THE BOARD

Chengdu Zhaoxinlin paid RMB2,340,898,659 and RMB936,359,463.6, respectively to Chengdu Planning Bureau for the payment of the consideration of the Chengdu Land. The remaining consideration has been paid by Chengdu Zhaoxinlin on 19 October 2020.

The Chengdu Land is located at Plots 3A and 3B, Shahebao South* (沙河堡南), Huaguo Village* (花果村), Sansheng Township* (三聖鄉), Jinjiang District* (錦江區), Chengdu, Sichuan Province, the PRC, which is adjacent to Chunxi Road Commercial Circle* (春熙路商業圈), Chengdu Majiagou Primary School* (成都市馬家溝小學), the Affiliated High School of Sichuan Normal University* (四川師範大學附屬中學) and supported by all-round ancillary facilities and convenient transportation, with a site area of approximately 87,262 sq.m. and an estimated plot ratio floor area of not exceeding approximately 236,454 sq.m. for residential use. The term of the land use rights of the Chengdu Land is 70 years for residential use. The Chengdu Land is intended to be developed into high-rise residentials and stacked townhouses. The Chengdu Land would be developed in two phases. For the first phase, the construction has commenced, and the pre-sales will commence in or before July 2021, and it is expected that the construction will be completed in or before June 2023. For the second phase, the construction will commence in or before June 2021 and the pre-sales will commence in or before January 2022, and it is expected that the construction will be completed in or before November 2023. The actual schedule of construction, pre-sales and completion of each phase may vary in accordance with the actual market conditions.

Shanghai Land I

The Shanghai Land I is the major asset held by Xiamen Huilong. On 9 May 2020, Xiamen Huilong entered into the land use rights grant contract with Shanghai Baoshan District Planning and Natural Resources Bureau* (上海市寶山區規劃和自然資源局) (the ''Shanghai Baoshan Planning Bureau''), pursuant to which Xiamen Huilong acquired the Shanghai Land I at a total consideration of RMB2,439,100,000. On 9 May 2020 and 9 June 2020, Xiamen Huilong paid RMB487,820,000 and RMB1,951,280,000, respectively to Shanghai Baoshan Planning Bureau for the payment of the consideration of the Shanghai Land I. On 19 June 2020, Xiamen Huilong transferred the land use rights of the Shanghai Land I to its wholly- owned subsidiary, Shanghai Zhaoren Property Development Company Limited* (上海兆仁房地產開發有限公司).

The Shanghai Land I is located at P1 Parcel, 0012 Neighbourhood* (0012街坊), 11008 Street* (11008街道), Baoshan District* (寶山區), Shanghai, the PRC, which is adjacent to Meilan Lake Scenic Area* (美蘭湖景區) and the government of Luodian Town* (羅店鎮政府) and supported by convenient transportation, with a site area of approximately 57,954.7 sq.m. and an estimated plot ratio floor area of not exceeding approximately 115,909.4 sq.m. for residential use. The term of the land use rights of the Shanghai Land I is 70 years for residential use. The Shanghai Land I is intended to be developed into high-rise residentials and stacked townhouses. The Shanghai Land I would be developed in one phase. The construction has commenced and the pre-sales will commence in or before June 2021, and it is expected that the construction will be completed in or before January 2023. The actual schedule of construction, pre-sales and completion of the Shanghai Land I may vary in accordance with the actual market conditions.

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LETTER FROM THE BOARD

Shanghai Land II

The Shanghai Land II is the major asset held by Xiamen Jingchenglong. On 15 May 2020, Xiamen Jingchenglong entered into the land use rights grant contract with Shanghai Minhang District Planning and Natural Resources Bureau* (上海市閔行區規劃和自然資源局) (the ''Shanghai Minhang Planning Bureau''), pursuant to which Xiamen Jingchenglong acquired the Shanghai Land II at a total consideration of RMB1,093,300,000. On 19 May 2020 and 4 June 2020, Xiamen Jingchenglong paid RMB218,660,000 and RMB874,640,000, respectively to Shanghai Minhang Planning Bureau for the payment of the consideration of the Shanghai Land II. On 1 July 2020, Xiamen Jingchenglong transferred the land use rights of the Shanghai Land II to its wholly-owned subsidiary, Shanghai Zhaomin Property Development Company Limited* (上海兆閔房地產開發有限公司).

The Shanghai Land II is located at P1 Parcel, 903 Neighbourhood* (903街坊), Pujiang Town* (浦江鎮), Minhang District* (閔行區), Shanghai, the PRC, which is adjacent to Pujiang Wanda Plaza * (浦江萬達廣場), Lunan Road BRT station* (BRT魯南路站) and Huizhen Road Metro Station* (地鐵匯臻路站) and supported by all-round ancillary facilities and convenient transportation, with a site area of approximately 32,380.8 sq.m. and an estimated plot ratio floor area of not exceeding approximately 64,761.6 sq.m. for residential use. The term of the land use rights of the Shanghai Land II is 70 years for residential use. The Shanghai Land II is intended to be developed into high-rise residentials. The Shanghai Land II would be developed in one phase. The construction has commenced and the pre-sales will commence in or before July 2021, and it is expected that the construction will be completed in or before December 2022. The actual schedule of construction, pre-sales and completion of the Shanghai Land II may vary in accordance with the actual market conditions.

INFORMATION ABOUT THE PARTIES TO THE EQUITY TRANSFER AGREEMENTS

Yi Yue is a company established with limited liability in the PRC and is an indirect wholly-owned subsidiary of the Company. It is principally engaged in the property investment and development businesses.

Xiamen Zhaoyirong is a company established with limited liability in the PRC and is an indirect wholly-owned subsidiary of the Company. It is principally engaged in the property investment and development businesses.

C&D Real Estate is a company established with limited liability in the PRC and is a controlling shareholder of the Company holding 757,054,106 issued Shares, representing approximately 64.34% of the issued share capital of the Company as at the Latest Practicable Date. It is principally engaged in the businesses of real estate development, commercial operation, property management and investment, etc.. As at the Latest Practicable Date, C&D Real Estate was owned by Xiamen C&D Inc.* (廈門建發股份有限公司) (''C&D Inc.''), a company the shares of which are listed on the Shanghai Stock Exchange (stock code: 600153) and Xiamen C&D Corporation Limited* (廈門建發集團有限公司) (''Xiamen C&D'') as to 54.65% and 45.35% respectively. C&D Inc. was owned by its public shareholders and Xiamen C&D as to 52.15% and 47.85%, respectively. The State-owned Assets Supervision and Administration Commission of Xiamen Municipal People's Government (廈門市人民政府國有

- 28 -

LETTER FROM THE BOARD

資產監督管理委員會) is the ultimate shareholder of C&D Real Estate. C&D Inc. is principally engaged in supply chain operation, real estate development and industrial investment, etc.. Xiamen C&D is principally engaged in supply chain operation, real estate development, tourism and hotels, exhibitions, media and health care, urban public services, investment, etc..

C&D Chengdu is a company established with limited liability in the PRC and a direct wholly-owned subsidiary of C&D Real Estate. It is principally engaged in property development and operation.

Xiamen Liyuan is a company established with limited liability in the PRC and a direct wholly-owned subsidiary of C&D Real Estate. It is principally engaged in property investment management business in the PRC.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS CONTEMPLATED UNDER THE EQUITY TRANSFER AGREEMENTS

The Group is principally engaged in the businesses of real estate development, real estate industry chain investment services and investment in emerging industries in the PRC. Given that (i) each of the Chengdu Land, the Shanghai Land I and the Shanghai Land II is supported by full community services in good location with great development potential; and (ii) the acquisition of the Chengdu Land, the Shanghai Land I and the Shanghai Land II would further expand the scale of the Group's landbank and enhance the Group's brand influence in the PRC market, the Directors are of the view that the entering into of the Equity Transfer Agreements will benefit the expansion of the Group's principal business property development, and the terms of the Equity Transfer Agreements are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATION

As C&D Chengdu and Xiamen Liyuan are wholly-owned subsidiaries of C&D Real Estate and C&D Real Estate is the controlling shareholder of the Company, C&D Chengdu, Xiamen Liyuan and C&D Real Estate are connected persons of the Company. As such, the transactions contemplated under the Equity Transfer Agreements constitute connected transactions under Chapter 14A of the Listing Rules and are subject to the reporting, announcement and independent shareholders' approval requirements.

As announced by the Company on 31 October 2019, Yi Yue entered into the Cooperation Agreement with Taicang Qitai, Xiamen Yilong, C&D Real Estate, Xiamen Liyuan and C&D Shanghai, pursuant to which, among other things, (a) Yi Yue and Taicang Qitai agreed to establish a joint venture, in which Yi Yue and Taicang Qitai shall own 51% and 49% equity interests respectively; (b) C&D Real Estate and Xiamen Liyuan agreed to sell, and the joint venture agreed to purchase 100% equity interests in Xiamen Yilong at nil consideration; and

the registered capital of Xiamen Yilong shall increase from RMB1,000,000 to RMB900,000,000, and the joint venture shall subscribe for RMB899,000,000. On 19 December 2019, at the request of Taicang Qitai, Yi Yue, Taicang Qitai, Xiamen Yilong, C&D Real Estate, Xiamen Liyuan, C&D Shanghai and Taicang Jinyue entered into the Supplemental Agreement, pursuant to which, among other things, Taicang Qitai agreed to transfer its entire rights and obligation under the Cooperation Agreement to Taicang Jinyue, while Taicang

- 29 -

LETTER FROM THE BOARD

Jinyue assumed all rights entitled to and all obligation undertaken by Taicang Qitai under the Cooperation Agreement. Pursuant to Rule 14A.81 of the Listing Rules, the transactions contemplated under the Equity Transfer Agreements are required to be aggregated with the Previous Transactions. After aggregation, as one or more of the applicable percentage ratios in respect of the Aggregated Transactions is more than 25% but less than 100%, the Aggregated Transactions constitute major acquisition under Chapter 14 of the Listing Rules and are subject to the reporting, announcement and independent shareholders' approval requirements. An EGM will be held to seek approval from the Independent Shareholders for the transactions contemplated under the Equity Transfer Agreements.

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, none of the Directors have material interest in the transactions contemplated under the Equity Transfer Agreements or was required to abstain from voting at the Board meeting.

Well Land (which held 757,054,106 issued Shares, representing approximately 64.34% of the issued share capital of the Company as at the Latest Practicable Date), a subsidiary of C&D Real Estate, shall abstain from voting on the proposed resolutions to approve the transactions contemplated under the Equity Transfer Agreements at the EGM. Save for the aforesaid and to the best of the knowledge, information and belief of the Directors after having made all reasonable enquiries, as at the Latest Practicable Date, no other Shareholder was interested in the transactions contemplated under the Equity Transfer Agreements.

An Independent Board Committee consisting of all the independent non-executive Directors will be established to consider and advise the Independent Shareholders on the transactions contemplated under the Equity Transfer Agreements. The Independent Financial Advisor has been appointed by the Company to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Equity Transfer Agreements are fair and reasonable, and the transactions contemplated under the Equity Transfer Agreements are on normal commercial terms or better, in the ordinary and usual course of business of the Company, and in the interests of the Company and the Shareholders as a whole.

EXTRAORDINARY GENERAL MEETING

The EGM will be held by the Company at Office No. 3517, 35th Floor, Wu Chung House,

213 Queen's Road East, Wanchai, Hong Kong on Friday, 15 January 2021 at 2:30 p.m., to consider and if thought fit, to approve, among other things, the entering into of the Equity Transfer Agreements. A form of proxy for use at the EGM is enclosed with this circular.

Any Shareholder and his or her or its associates with a material interest in the resolutions will abstain from voting on the resolutions on the entering into of the Equity Transfer Agreements at the EGM. As Well Land, a subsidiary of C&D Real Estate, held 757,054,106 Shares (representing approximately 64.34% interest in the Company) as at the Latest Practicable Date, Well Land will be required to abstain from voting on the relevant resolutions at the EGM.

- 30 -

LETTER FROM THE BOARD

Save as disclosed above, to the best knowledge, information and belief of the Directors having made all reasonable enquires, no other Shareholders are required to abstain from voting on the relevant resolutions to be considered at the EGM as at the Latest Practicable Date.

The notice convening the EGM is set out on pages N-1 to N-4 of this circular.

For those who intend to direct a proxy to attend the EGM, please complete the form of proxy and return the same in accordance with the instructions printed thereon. In order to be valid, the above documents must be delivered to the Company's branch share registrar in Hong Kong, Tricor Investor Services Limited at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong not less than 48 hours before the time appointed for the EGM or any adjournment thereof. The register of members of the Company will be closed from Tuesday, 12 January 2021 to Friday, 15 January 2021 (both days inclusive), during which time no share transfers will be effected. In order to qualify for attending the EGM or any adjournment thereof, all transfers of Shares accompanied by the relevant share certificate(s) must be lodged with the Company's branch share registrar in Hong Kong at the above address by no later than 4:30 p.m. on Monday, 11 January 2021. The holders of the Shares whose names appear on the register of members of the Company on Monday, 11 January 2021 are entitled to attend and vote in respect of the resolutions to be proposed at the EGM.

You are urged to complete and return the form of proxy and reply slip whether or not you will attend the EGM. Completion and return of the form of proxy will not preclude you from attending and voting at the EGM (or any subsequent meetings following the adjournments thereof) should you wish to do so.

INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISOR

The Independent Board Committee comprising all independent non-executive Directors has been formed to advise the Independent Shareholders on the reasonableness and fairness in respect of the transactions contemplated under the Equity Transfer Agreements. Euto Capital, the Independent Financial Advisor, has been appointed by the Company to advise the Independent Board Committee and the Independent Shareholders on the above issues. The text of the letter from the Independent Board Committee is set out on page 33 of this circular and the text of the letter from the Independent Financial Advisor containing its advice is set out on pages 34 to 82 of this circular.

RECOMMENDATIONS

The Independent Board Committee, having taken into account the advice of the Independent Financial Advisor, is of the view that the transactions contemplated under the Equity Transfer Agreements are in the ordinary and usual course of business of the Group and on normal commercial terms, and the terms are fair and reasonable and in the interests of the Company and its Shareholders as a whole. As such, the Independent Board Committee recommends that all Independent Shareholders to vote in favour of the relevant resolutions to be proposed in the EGM.

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LETTER FROM THE BOARD

VOTE BY POLL

In accordance with the articles of association of the Company, all the votes in the EGM must be taken by poll. The methods of Shareholders' votes at the EGM will be conducted by the combination of on-site voting and online voting.

FURTHER INFORMATION

Your attention is drawn to the statutory and general information set out in Appendix V to this circular.

Yours faithfully,

By Order of the Board

C&D International Investment Group Limited

建發國際投資集團有限公司

Zhuang Yuekai

Chairman and Executive Director

- 32 -

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of the letter from the Independent Board Committee setting out its recommendations to the Independent Shareholders in connection with the entering into of the Equity Transfer Agreements for inclusion in this circular.

C&D INTERNATIONAL INVESTMENT GROUP LIMITED

建發國際投資集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1908)

23 December 2020

To the Independent Shareholders

Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTION

IN RELATION TO THE ACQUISITION OF

100% EQUITY INTERESTS IN CHENGDU ZHAOXINLIN;
100% EQUITY INTERESTS IN XIAMEN HUILONG; AND
100% EQUITY INTERESTS IN XIAMEN JINGCHENGLONG AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

We have been appointed to form the Independent Board Committee to consider and advise the Independent Shareholders as to our opinion on the entering into of the Equity Transfer Agreements, the details of which are set out in the circular issued by the Company to the Shareholders dated 23 December 2020 (the ''Circular''), of which this letter forms part. Terms defined in the Circular will have the same meanings when used herein unless the context otherwise requires. Euto Capital Partners Limited has been appointed as the Independent Financial Advisor to advise the Independent Board Committee. We wish to draw your attention to the letter from the Independent Financial Advisor as set out on pages 34 to 82 of the Circular.

Having taken into account (i) the reasons as disclosed in the paragraph headed ''Reasons for and benefits of the transactions contemplated under the Equity Transfer Agreements'' of the Circular; and (ii) the principal factors and reasons considered by the Independent Financial Advisor, and its conclusion and advice, we are of the view and concur with the opinion of the Independent Financial Advisor that the Equity Transfer Agreements were entered into in the ordinary and usual course of business of the Group and are on normal commercial terms, the terms are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolutions to be proposed at the EGM to approve the entering into of the Equity Transfer Agreements.

Yours faithfully

Independent Board Committee of

Mr. Wong Chi Wai

Mr. Wong Tai Yan, Paul

Mr. Chan Chun Yee

(Independent non-executive Directors)

- 33 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

The following is the full text of the letter of advice from the Independent Financial Advisor, Euto Capital Partners Limited, to the Independent Board Committee and the Independent Shareholders, which has been prepared for the purpose of inclusion in this circular.

Euto Capital Partners Limited	T +852 3106 2393
Room 2418, Wing On Centre,	F +852 3582 4722
111 Connaught Road Central,	www.eutocapital.com
Hong Kong
	23 December 2020

To the Independent Board Committee and

the Independent Shareholders of

C&D International Investment Group Limited

Dear Sirs and Madams,

MAJOR AND CONNECTED TRANSACTIONS

IN RELATION TO THE ACQUISITION OF

THE ENTIRE EQUITY INTERESTS IN CHENGDU ZHAOXINLIN;

THE ENTIRE EQUITY INTERESTS IN XIAMEN HUILONG; AND

THE ENTIRE EQUITY INTERESTS IN XIAMEN JINGCHENGLONG

INTRODUCTION

We refer to our appointment as the independent financial adviser (the ''Independent Financial Adviser'') to advise the Independent Board Committee and the Independent Shareholders in respect of the Equity Transfer Agreements and the transactions contemplated thereunder (the ''Transactions''), 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 23 December 2020 (the ''Circular''), of which this letter forms part. Unless the contest requires otherwise, capitalized terms used in this letter shall have the same meanings as ascribed to them under the section headed ''Definitions'' in this Circular.

Reference is made to the announcement of the Company dated 28 September 2020.

1. Background of the Transactions

On 28 September 2020, Yi Yue and Xiamen Zhaoyirong (collectively the ''Purchasers''), both of which are indirect wholly owned subsidiaries of the Company, entered into three (3) equity transfer agreements: being (i) Chengdu Zhaoxinlin Equity Transfer Agreements; (ii) Xiamen Huilong Equity Transfer Agreements; and (iii) Xiamen Jinchenglong Equity Transfer Agreements.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

1.1 The Chengdu Zhaoxinlin Equity Transfer Agreements

Pursuant to the Chengdu Zhaoxinlin Equity Transfer Agreements, C&D Chengdu agreed to sell, and each of Yi Yue and Xiamen Zhaoyirong agreed to acquire, 95% and 5% equity interests in Chengdu Zhaoxinlin, respectively (the ''Chengdu Acquisition''). The total cash consideration under the Chengdu Zhaoxinlin Equity Transfer Agreements shall be RMB50,001,583.36, of which Yi Yue and Xiamen Zhaoyirong shall contribute RMB47,501,504.19 and RMB2,500,079.17, respectively.

Further to the Chengdu Zhaoxinlin Equity Transfer Agreements, Yi Yue and Xiamen Zhaoyirong shall also repay a shareholder's loan previously advanced by C&D Chengdu to Chengdu Zhaoxinlin with an outstanding amount (including principal amount and accrued interest) of RMB958,643,770.69 (subject to adjustment) in accordance with each of its equity interests in Chengdu Zhaoxinlin immediately after completion of the Chengdu Acquisition.

1.2 The Xiamen Huilong Equity Transfer Agreements

Pursuant to the Xiamen Huilong Equity Transfer Agreements, (i) C&D Real Estate agreed to sell, and Yi Yue agreed to acquire, 95% equity interests in Xiamen Huilong; and (ii) Xiamen Liyuan agreed to sell, and Xiamen Zhaoyirong agreed to acquire, 5% equity interests in Xiamen Huilong (the ''Huilong Acquisition''). The total cash consideration to be paid by Yi Yue to C&D Real Estate and Xiamen Zhaoyirong to Xiamen Liyuan under the Xiamen Huilong Equity Transfer Agreements shall be nil.

Further to the Xiamen Huilong Equity Transfer Agreements, Yi Yue and Xiamen Zhaoyirong shall repay the shareholder's loan previously advanced by C&D Real Estate to Xiamen Huilong with an outstanding amount (including principal amount and accrued interest) of RMB2,588,484,971.47 (subject to adjustment) in accordance with each of its equity interests in Xiamen Huilong immediately after completion of the Huilong Acquisition.

1.3 The Xiamen Jingchenglong Equity Transfer Agreements

Pursuant to the Xiamen Jingchenglong Equity Transfer Agreements, (i) C&D Real Estate agreed to sell, and Yi Yue agreed to acquire, 95% equity interests in Xiamen Jingchenglong; and (ii) Xiamen Liyuan agreed to sell, and Xiamen Zhaoyirong agreed to acquire, 5% equity interests in Xiamen Jingchenglong (the ''Jingchenglong Acquisition''). The total cash consideration to be paid by Yi Yue to C&D Real Estate and Xiamen Zhaoyirong to Xiamen Liyuan under the Xiamen Jingchenglong Equity Transfer Agreement shall be nil.

Further to the Xiamen Jingchenglong Equity Transfer Agreements, Yi Yue and Xiamen Zhaoyirong shall repay the shareholder's loan previously advanced by C&D Real Estate to Xiamen Jingchenglong with an outstanding amount (including principal amount and accrued interest) of RMB1,150,434,283.06 (subject to adjustment) in accordance with each of its equity interests in Xiamen Jingchenglong immediately after completion of the Jingchenglong Acquisition.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

With effect from completion of the transactions contemplated under the Equity Transfer Agreements, Yi Yue and Xiamen Zhaoyirong will hold 95% and 5% equity interest in each of Chengdu Zhaoxinlin, Xiamen Huilong and Xiamen Jingchenglong, respectively. Accordingly, each of Chengdu Zhaoxinlin, Xiamen Huilong and Xiamen Jingchenglong will become an indirect wholly-owned subsidiary of the Company and each of their financial results will be consolidated into the consolidated financial statements of the Company.

2. Listing Rules implication

As at the date of the Equity Transfer Agreements, C&D Chengdu and Xiamen Liyuan are wholly-owned subsidiaries of C&D Real Estate, hence, each of C&D Chengdu and Xiamen Liyuan is an associate of C&D Real Estate. Accordingly, C&D Real Estate, which is a controlling Shareholder, together with C&D Chengdu and Xiamen Liyuan, are connected persons of the Company under Chapter 14A of the Listing Rules. As such, the transactions contemplated under the Equity Transfer Agreements constitute connected transactions of the Company under Chapter 14A of the Listing Rules.

Further, pursuant to Rule 14A.81 of the Listing Rules, the transactions contemplated under the Equity Transfer Agreements are required to be aggregated with the Previous Transactions. After aggregation, as one or more of the applicable percentage ratios in respect of the Aggregated Transactions is more than 25% but less than 100%, the Aggregated Transactions constitute major transactions under Chapter 14 of the Listing Rules and are subject to the reporting, announcement and independent shareholders' approval requirements.

For details information of the Previous Transactions, please refer to the announcements of the Company dated 31 October 2019 and 19 December 2019.

INDEPENDENT BOARD COMMITTEE

An Independent Board Committee comprising all the independent non-executive Directors, namely Mr. Wong Chi Wai, Mr. Wong Tat Yan, Paul and Mr. Chan Chun Yee, has been established to consider and advise the Shareholders as to whether the terms of the Equity Transfer Agreements and the transactions contemplated thereunder are (i) fair and reasonable;

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 Transactions. None of the members of the Independent Board Committee has any material interest in the Transactions.

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 Equity Transfer Agreements 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 Transactions.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

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 transactions 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 SFC since August 2019. Both 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 set out 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 Transactions.

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. During the past two years, we have been appointed as the independent financial adviser to the Company regarding (i) a connected transaction in relation to the proposed issue of perpetual convertible bond under specific mandate, of which the circular was dated 27 October 2018; and (ii) a major and connected transaction in relation to the acquisition of the entire equity interest in Taicang Jiancang Real Estate Development Company Limited, of which the circular was dated 15 July 2019. The professional fees in connections with the above appointments have been fully settled and we are not aware of or change in any circumstance that would affect our independence. Accordingly, we consider that we are eligible to give independent advise on the terms of the Equity Transfer Agreements and the transactions contemplated thereunder.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

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 terms of the Equity Transfer Agreements 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, the Management and its subsidiaries. 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 Company or its future prospects.

Based on the foregoing, we confirm that we have taken all reasonable steps, which are applicable to the Transactions, 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 Equity Transfer Agreements 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.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

PRINCIPAL FACTORS AND REASON 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 of the Transactions

On 28 September 2020, Yi Yue and Xiamen Zhaoyirong, both of which are indirect wholly-owned subsidiaries of the Company, entered into the Equity Transfer Agreements.

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

(a) Principal business of the Group

The Group is principally engaged in the business of real estate development, real estate industry chain investment services and investment in emerging industries in the PRC.

(b) Financial performance of the Group

Set out below is a summary of the Group's audited consolidated financial performance for the years ended 31 December 2018 and 2019 as extracted from the annual report of the Company for the year ended 31 December 2019 (''2019 Annual Report'') and the unaudited consolidated financial performance for the six months ended 30 June 2020 as extracted from the interim results of the Company for the six months ended 30 June 2020 (''2020 Interim Results'').

	For the six months	For the years ended
	ended 30 June	31 December
	2020		2019	2019	2018
	RMB'000	RMB'000	RMB'000	RMB'000
	(unaudited)	(unaudited)	(audited)	(audited)
Revenue
- Property development	2,377,133		900,069		17,105,290	11,516,938
- Property management	383,647		266,366	654,637		523,824
- Commercial assets management	64,861		77,521	122,182		166,082
- Entrusted construction services	20,760		28,868	91,792	149,005
- Unallocated	7,112		4,943	21,245		15,566

Total revenue	2,853,513		1,277,767		17,995,146	12,371,415

Profit for the period/year	115,482		189,376	1,997,571	1,577,902

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

For the year ended 31 December 2019

Revenue

As set out in the above table, the total revenue of the Group for the year ended 31 December 2019 increased by approximately RMB5.62 billion or 45.46% to approximately RMB18 billion, as compared with approximately RMB12.37 billion for the year ended 31 December 2018.

During the year 2019, the Group's revenue was mainly contributed from three business segments: (i) property development (sales of properties); (ii) property management; and (iii) commercial assets management.

As further noted in the above table, the main source of revenue generated by the Group was sales of properties. During the year 2019, the Group's revenue generated from sales of properties was approximately RMB17.11 billion, representing a year-on-year increase by approximately RMB5.59 billion as compared with the corresponding year and accounting for approximately 95.06% of the Group's total revenue. As disclosed in the 2019 Annual Report, the gross floor area (''GFA'') of delivered properties was approximately 1,267,100 square meters, representing an increase by approximately 466,800 square meters as compared with the corresponding year.

Apart from the sales of properties, the revenue generated from property management services also contributed approximately RMB654.64 million (2018: approximately RMB523.82 million). As at 31 December 2019, the property management segment of the Group has provided quality service for more than 132,000 property owners, spanning across 10 provinces, one municipality and 32 cities in the PRC, with contracted management area amounting to nearly 35,000,000 square meters.

For the commercial assets management business, the revenue generated during the year 2019 amounted to approximately RMB122.18 million (2018: RMB166.08 million). The Group's own leasing properties and third party leasing properties leased out through Shanghai C&D Asset Management Company Limited* (上海建發兆昱資產管理有限公司), are mainly located in Xingning District* (興寧區) and Xiciangtang District* (西鄉塘區) of Nanning and Putuo District* (普陀區), Yangpu District* (楊浦區) and Jiading District* (嘉定區) of Shanghai. As at 31 December 2019, the Group's retail units comprised an aggregate rentable GFA of approximately 118,387 square meters (as at 31 December 2018: approximately 118,480 square meters) in the PRC (including an underground parking area of approximately 3,954 square meters used as temporary parking areas of which an aggregate GFA of approximately 95,514 square meters in the PRC had been leased out.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Profit for the year

For the year ended 31 December 2019, the profit for the year increased by approximately RMB419.67 million or approximately 26.60% from approximately RMB1.58 billion for the year 2018 to approximately RMB2 billion for the year 2019. Such increase was mainly attribute to the cumulative effect of (i) an increase of revenue as mentioned above; (ii) a decrease of administrative expenses by approximately RMB60.15 million due to the reversal of a provision of property inventory made during the year 2018; and (iii) an increase in other gain from approximately RMB209.88 million for the year 2018 to approximately RMB308.76 million for the year 2019 due to an increase in interest income.

For the 6 months ended 30 June 2020 Revenue

As set out in the above table, the total revenue of the Group for the 6 months ended 30 June 2020 increased by approximately RMB1.58 billion or 123.32% to approximately RMB2.85 billion, as compared with approximately RMB1.28 billion for the 6 months ended 30 June 2019. As set out in the 2020 Interim Results, such increase was mainly attributable to the revenue realized from the delivery of several real estate development projects of the Group as compared with the corresponding period of the previous year.

During the 6 months ended 30 June 2020, the Group's revenue from sales of properties was approximately RMB2.38 billion, representing an increase of approximately RMB1.48 billion as compared with the corresponding period of the previous year and accounting for approximately 83.31% of the Group's total revenue. During the period, the GFA of the properties delivered was approximately 151,500 square meters, representing an increase of approximately 61,800 sq.m. as compared with the corresponding period of the previous year. Also during the Period, revenue from sales of properties recognized in Fujian and East China Districts contributed approximately 9.17% and 86.47% of the total revenue from sales of properties respectively. The average selling price for the properties delivered and recognized during the Period was approximately RMB15,695 per square meters, representing an increase of approximately RMB5,658 per square meters as compared with the corresponding period of the previous year.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

As regard to the property management service business, the revenue generated for the 6 months ended 30 June 2020 amounted to approximately RMB383.65 million (corresponding period of previous year: approximately RMB266.37 million). As at 30 June 2020, the property management segment of the Group has provided quality services for more than 137,000 property owners, spanning across 10 provinces, one municipality and 35 cities in the PRC, with contracted management area amounting to nearly 40,000,000 square meters.

For the commercial assets management business, during the 6 months ended 30 June 2020, the revenue from the Group's commercial assets management business amounted to approximately RMB64.86 million (corresponding period of the previous year: approximately RMB77.52 million). The location and the aggregate lettable GFA of the Group's own leasing properties and the third-party leasing properties have no difference as compared to that as at 31 December 2019.

Profit for the period

For the six months ended 30 June 2020, the profit for the period decreased by approximately RMB73.89 million or approximately 39.02% from approximately RMB189.38 million for the 6 months ended 30 June 2019 to approximately RMB115.48 million for the 6 months ended 30 June 2020. Such decrease was mainly attribute to the cumulative effect of (i) a decrease in gross profit margin from approximately 40.62% for the 6 months ended 30 June 2019 to approximately 21.89% for the 6 months ended 30 June 2020 due to lower gross profit margin level of individual projects delivered with income carried forward during the period than those for the corresponding period of the previous year; (ii) an increase in the total borrowing cost of approximately RMB891.32 million due to an increase in capital requirements raised by an increase in property projects; (iii) the recognition of a loss on changes in fair value of investment properties of approximately RMB4.61 million during the period; and (iv) an increase in selling expenses by approximately RMB234.97 million during the period primarily due to a significant increase in the number of sales projects during the period as compared with those for the corresponding period for the year 2018.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Financial position of the Group

Set out below is the Group's audited consolidated financial position as at 31 December 2019 as extracted from the 2019 Annual Report and unaudited consolidated financial position as at 30 June 2020 as extracted from the 2020 Interim Results.

	As at	As at
	30 June	31 December
	2020	2019
	RMB'000	RMB'000
	(unaudited)	(audited)
Non-current assets
- Property, plant and equipment	137,723		108,872
- Rights-of use assets	198,208		210,845
- Investment properties	1,255,630		1,255,730
- Interest in associates	5,231,460		6,436,704
- Interest in a joint venture	41,449		44,175
- Other financial assets	208,250		125,690
- Deposits for acquisition of land use rights	64,166		64,166
- Deferred tax assets	2,152,864		1,400,495
- Goodwill	577		-
Total non-current assets	9,290,327	9,646,677
Current assets

- Inventories of properties and other contract
costs	99,652,658		76,167,862
- Trade and other receivables	4,102,662		6,604,465
- Amounts due from non-controlling interests	6,681,034		8,474,646
- Other financial assets	50,000		448,990
- Deposits for acquisition of land use rights	8,448,797	2,195,933
- Prepaid taxes	991,562		487,979
- Cash at banks and on hand	9,929,115	11,562,270
Total current assets	129,855,828		105,942,145

Total assets	139,146,155		115,588,822

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

	As at	As at
	30 June	31 December
	2020	2019
	RMB'000	RMB'000
	(unaudited)	(audited)
Current liabilities
- Trade and other payables	6,794,901			8,099,577
- Contract liabilities	53,091,168		36,423,681
- Amounts due to related companies	2,304,762		2,553,834
- Amounts due to non-controlling interests	3,833,140			2,915,151
- Interest-bearing borrowings	1,774,570			3,263,480
- Income tax liabilities	1,718,810			1,883,024
- Lease liabilities	22,166			28,355
- Receipts under securitization and arrangements	-		2,498,155
Total current liabilities	69,539,517		57,665,257

Net current liabilities	60,316,311	48,276,888

Total assets less current liabilities	69,606,638			57,923,565
Non-current liabilities

- Loans from intermediate holding company	27,694,880			23,082,304
- Lease liabilities	105,809			109,739
- Receipts under securitization arrangements	2,918,850			902,774
- Interest-bearing borrowings	20,767,178			13,979,542
- Deferred tax liabilities	254,458			239,264
Total non-current liabilities	51,741,175	38,313,623

Net assets	17,865,463			19,609,942

As set out above, the Group's total assets as at 30 June 2020 increased by approximately RMB23.56 billion or approximately 20.38% from approximately RMB115.59 billion as at 31 December 2019 to approximately RMB139.15 billion as at 30 June 2020. As advised by the Management, such increase was mainly attributable to an increase in the deposit paid for acquisition of land use rights during the period which would be converted into land use rights, or properties under development when the rights to use have been obtained.

As further noted in the table above, the Group's total liabilities as at 30 June 2020 has also increased by approximately RMB25.3 billion or approximately 26.36% from approximately RMB95.98 billion as at 31 December 2019 to approximately RMB121.28 billion as at 30 June 2020. As advised by the Management, such increase was mainly

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

attributable to (i) the increase in contract liabilities arising from the forward sales and instalments received from customers based on the terms established in the property sale contracts; and (ii) the increase in interest bearing borrowings and loans from related parties due to an increase in capital requirements raised by an increase in property projects during the period.

Further, the Group's debt to equity ratio (total borrowings divided by total equity) increased to approximately 303.25% as at 30 June 2020 (as at 31 December 2019: approximately 234.70%) as the shareholder's loan and bank borrowings increased during the period.

1.2 Information of the Purchasers

Yi Yue

Yi Yue is a company established in the PRC with limited liability and is an indirectly wholly-owned subsidiary of the Company as at the Latest Practicable Date. As at the Latest Practicable Date, Yi Yue is principally engaged in the businesses of property investment and property development.

(b) Xiamen Zhaoyirong

Xiamen Zhaoyirong is a company established in the PRC with limited liability and is an indirect wholly-owned subsidiary of the Company as at the Latest Practicable Date. As at the Latest Practicable Date, Xiamen Zhaoyirong is principally engaged in the businesses of property investment and property development.

1.3 Information of C&D Chengdu, C&D Real Estate and Xiamen Liyuan (being the vendors under the respective Equity Transfer Agreements)

C&D Chengdu

C&D Chengdu is a company established in the PRC with limited liability and a subsidiary of the C&D Real Estate as at the Latest Practicable Date. As at the Latest Practicable Date, C&D Chengdu is principally engaged in the business of property development.

(b) C&D Real Estate

C&D Real Estate is a subsidiary of Xiamen C&D Inc. (廈門建發股份有限公司), a company listed on the Shanghai Stock Exchange (stock code: 600153) which, in turn, is a subsidiary of Xiamen C&D Corporation Limited (廈門建發集團有限公司), a state-owned group of companies under the supervision of Xiamen Municipal Government of the PRC. The Xiamen C&D Corporation Limited is a conglomerate state-owned enterprise and is principally engaged in business of industries of supply chain operations, real estate development, tourism and hotel, convention and exhibition, etc. in the PRC.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

C&D Real Estate is a company established in the PRC with limited liability, and is a controlling shareholder of the Company which holds 807,044,106 issued Shares, representing approximately 68.58% of the issued share capital of the Company as at the Latest Practicable Date. It is principally engaged in the businesses of real estate development, commercial operation, property management and investment.

Xiamen Liyuan

Xiamen Liyuan is a company established in the PRC with limited liability and is a subsidiary of C&D Real Estate. As at the Latest Practicable Date, Xiamen Liyuan is principally engaged in the business of property investment and property management in the PRC.

1.4 Information of Chengdu Zhaoxinlin, Xiamen Huilong and Xiamen Jingchenglong (being the target companies under the respective Equity Transfer Agreements)

Chengdu Zhaoxinlin
1. Shareholding structure of Chengdu Zhaoxinlin

Chengdu Zhaoxinlin is a company established in the PRC with limited liability on 8 April 2020. As at the Latest Practicable Date, the entire registered share capital of Chengdu Zhaoxinlin is owned by C&D Chengdu.

(ii) Principal asset of Chengdu Zhaoxinlin

As at the Latest Practicable Date, Chengdu Zhaoxinlin is a property investment holding company holding the entire interest in the Chengdu Land.

As set out in the Letter, the Chengdu Land is located at Plots 3A and 3B, Shahebao South* (沙河堡南), Huaguo Village* (花果村), Sansheng Township* (三聖鄉), Jinjiang District* (錦江區), Chengdu, Sichuan Province, the PRC, which is adjacent to Chunxi Road Commercial Circle* (春熙路商業圈), Chengdu Majiagou Primary School* (成都市馬家溝小學), The Affiliated High School of Sichuan University* (四川師範大學附屬中學) and supported by all-round ancillary facilities and convenient transportation, with a site area of approximately 87,262 sq.m. and an estimated plot ratio floor area of not exceeding approximately 236,454 sq.m. for residential use.

The term of the land use rights of the Chengdu Land is 70 years for residential use. The Chengdu Land is planned to be developed into high-rise residentials and stacked townhouses and the construction work of which is planned to be completed by two phases. For the first phase, the construction work has been commenced and is expected to be completed before June 2023. For the second phase, the construction work will be commenced before June 2021 and completed before November 2023. Based on such construction schedule, it is estimated that the first phase pre-sales exercise will start in or before July 2021 and the second phase pre-sales exercise will start in or before 2022.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

(iii) Background of the Chengdu Land

The land use rights of the Chengdu Land was acquired by C&D Chengdu on 2 April 2020.

On 2 April 2020, C&D Chengdu entered into a transaction confirmation letter with Chengdu Planning and Natural Resources Bureau* (成都市規劃和自然資源局) (the ''Chengdu Planning Bureau'') and Chengdu City Public Resources Exchange Service Centre* (成都市公共資源交易服務中心), pursuant to which C&D Chengdu acquired the Chengdu Land at a total consideration of approximately RMB4,682,000,000 with provision to the government of the PRC by way of gratuitous construction of residential housing for a gross floor area of 16,600 sq.m..

On 17 April 2020, Chengdu Zhaoxinlin entered into a supplemental agreement to the land use rights grant contract with the Chengdu Planning Bureau, pursuant to which the land use rights of the Chengdu Land were transferred to Chengdu Zhaoxinlin.

On 18 May 2020 and 17 July 2020, Chengdu Zhaoxinlin paid RMB2,340,898,659 and RMB936,359,463.6, respectively to Chengdu Planning Bureau for settlement of the consideration of the Chengdu Land.

On 19 October 2020, the remaining consideration of the Chengdu Land of RMB1,404,539,195.40 was settled by Chengdu Zhaoxinlin.

(iv) Financial information of Chengdu Zhaoxinlin

As advised by the Management, Chengdu Zhaoxinlin was set out for the sole purpose of holding the Chengdu Land. Since the date of incorporation on 8 April 2020, the Chengdu Zhaoxinlin has not conducted any business activities.

Set out below is the audited financial position of Chengdu Zhaoxinlin as at 31 August 2020 as extracted from Appendix IIA of the Circular.

	As at
	31 August
	2020
	RMB'000
	(audited)
Non-current assets
- Deferred tax assets	9,786
- Other receivables	129,500
Total non-current assets	139,286

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

	As at
	31 August
	2020
	RMB'000
	(audited)
Current assets
- Properties under development for sale	4,779,986
- Other receivables	41,974
- Amount due from an immediate holding company	18,500
- Bank balances	425
Total current assets	4,840,885

Total assets	4,980,171
Current liabilities

- Trade and other payables	1,412,490
- Amount due to an intermediate holding company	3,547,040
Total current liabilities	4,959,530

Net assets	20,641

As set out above, the total assets of Chengdu Zhaoxinlin as at 31 August 2020 amounted to approximately RMB4,980,171,000.

Out of the total assets, the carrying amount of properties under development for sale of approximately RMB4,779,986,000 contributed approximately 96.0% which refers to the aggregate amount of the total acquisition cost of the Chengdu Land of approximately RMB4,709,215,000 (including transaction cost) and the capitalised construction cost and finance cost of approximately RMB70,771,000.

Further, the total liabilities of Chengdu Zhaoxinlin as at 31 August 2020 amounted to approximately RMB4,959,530,000. Out of the total liabilities, approximately RMB3,547,040,000 refers to the outstanding amount advanced by C&D Cheungdu to Chengdu Zhaoxinlin for settlement of consideration for acquisition of the Chengdu Land (the ''Chengdu Loan''). As advised, such the Chengdu Loan are unsecured, interest bearing at rates at 5.5% per annum and repayable on demand.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Xiamen Huilong
1. Shareholding structure of Xiamen Huilong

Xiamen Huilong is a company established in the PRC with limited liability on 23 September 2019. As at the Latest Practicable Date, Xiamen Huilong is owned as to 95% by C&D Real Estate and 5% by Xiamen Liyuan.

(ii) Principal asset of Xiamen Huilong

As at the Latest Practicable Date, Xiamen Huilong is a property investment holding company holding the entire interest in the Shanghai Land I through its wholly-owned subsidiary, being Shanghai Zhaoren Property Development Company Limited * (上海兆仁房地產開發有限公司) (''Shanghai Zhaoren'').

As set out in the Letter, the Shanghai Land I is located at P1 Parcel, 0012 Neighbourhood* (0012街坊), 11008 Street* (11008街道), Baoshan District* (寶山區), Shanghai, the PRC, which is adjacent to Meilan Lake Scenic Area* (美蘭湖景區) and Government of Luodian Town* (羅店鎮政府) and supported by convenient transportation, with a site area of approximately 57,954.7 sq.m. and an estimated plot ratio floor area of not exceeding approximately 115,909.4 sq.m. for residential use.

The term of the land use rights of the Shanghai Land I is 70 years for residential use. The Shanghai Land I is planned to be developed into high-rise residentials and stacked townhouses and the construction work has been commenced and is expected to be completed before January 2023. Based on such construction schedule, it is estimated that the pre-sales exercise will be commenced in or before June 2021.

(iii) Background information of the Shanghai Land I

The land use right of the Shanghai Land I was acquired by Xiamen Huilong on 9 May 2020.

On 9 May 2020, Xiamen Huilong entered into the land use rights grant contract with Shanghai Baoshan District Planning and Natural Resources Bureau* (上海市寶山區規劃和自然資源局), pursuant to which Xiamen Huilong acquired the Shanghai Land I at a total consideration of RMB2,439,100,000.

On 9 May 2020 and 9 June 2020, Xiamen Huilong paid RMB487,820,000 and RMB1,951,280,000, respectively to Shanghai Baoshan District Planning and Natural Resources Bureau for the payment of the consideration of the Shanghai Land I.

On 19 June 2020, Xiamen Huilong transferred the land use rights of the Shanghai Land I to Shanghai Zhaoren.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

(iv) Financial information of Xiamen Huilong

As advised by the Management, Xiamen Huilong was set out for the sole purpose of holding the Shanghai Land I. Since the date of incorporation on 23 September 2019, the Xiamen Huilong has not conducted any business activities.

Set out below is the audited consolidated financial position of Xiamen Huilong as at 31 August 2020 as extracted from Appendix IIB of the Circular.

	As at
	31 August
	2020
	RMB'000
	(audited)
Non-current assets
Deferred tax assets	12,577
Current assets
- Properties under development for sale	2,535,837
- Other receivables	484
- Bank balances	1,137
Total current assets	2,537,458

Total assets	2,550,035
Current liabilities

- Trade and other payables	4,921
- Amounts due to related companies	2,579,938
- Income tax liabilities	925
Total current liabilities	2,585,784

Net liabilities	(35,749)

As set out above, the consolidated total assets of Xiamen Huilong as at 31 August 2020 amounted to approximately RMB2,550,035,000.

Out of the consolidated total assets, the carrying amount of the properties under development for sale of approximately RMB2,535,837,000 contributed approximately 99.9% which refers to the aggregate carrying amount of the total acquisition cost of the Shanghai Land I of RMB2,512,273,000 (including transaction cost) and the capitalised construction cost and finance cost of approximately RMB23,564,000.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Further, the consolidated total liabilities of Xiamen Huilong as at 31 August 2020 amounted to approximately RMB2,585,784,000. Out of the consolidated total liabilities, RMB2,579,881,000 refers to the outstanding amount advanced by C&D Real Estate to Xiamen Huilong for settlement of consideration for acquisition of the Shanghai Land I (the ''Huilong Loan''). As advised, the Huilong Loan are unsecured, bearing interest of 5.5% for annum and repayable on demand.

Xiamen Jingchenglong
1. Shareholding structure of Xiamen Jingchenglong

Xiamen Jingchenglong is a company established in the PRC with limited liability on 31 March 2020. As at the Latest Practicable Date, Xiamen Jingchenglong is owned as to 95% by C&D Real Estate and 5% by Xiamen Liyuan.

(ii) Principal asset of Xiamen Jingchenglong

As at the Latest Practicable Date, Xiamen Jingchenglong is a property investment holding company holding the entire interest in the Shanghai Land II through its wholly owned subsidiary, being Shanghai Zhaomin Real Estate Development Company Limited* (上海兆閔房地產開發有限公司) (''Shanghai

Zhaomin'').

As set out in the Letter, the Shanghai Land II is located at P1 Parcel, 903 Neighbourhood* (903街坊), Pujiang Town* (浦江鎮), Minhang District* (閔行區), Shanghai, the PRC, which is adjacent to Pujiang Wanda Plaza * (浦江萬達廣場), Lunan Road BRT station* (BRT魯南路站) and Huizhen Road Metro Station* (地鐵匯臻路站) and supported by all-round ancillary facilities and convenient transportation, with a site area of approximately 32,380.8 sq.m. and an estimated plot ratio floor area of not exceeding approximately 64,761.6 sq.m. for residential use.

The term of the land use rights of the Shanghai Land II is 70 years for residential use. The Shanghai Land II is planned to be developed into high-rise residentials and the construction work has been commenced and is expected to be completed before December 2022. Based on such construction schedule, it is estimated that the pre-sales exercise will be commenced before July 2021.

(iii) Background information of the Shanghai Land II

The land use right of the Shanghai Land II was acquired by Xiamen Jingchenglong on 15 May 2020.

On 15 May 2020, Xiamen Jingchenglong entered into the land use rights grant contract with Shanghai Minhang District Planning and Natural Resources Bureau* (上海市閔行區規劃和自然資源局), pursuant to which Xiamen Jingchenglong acquired the Shanghai Land II at a total consideration of RMB1,093,300,000.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

On 19 May 2020 and 4 June 2020, Xiamen Jingchenglong paid RMB218,660,000 and RMB874,640,000, respectively to Shanghai Minhang District Planning and Natural Resources Bureau for the payment of the consideration of the Shanghai Land II.

On 1 July 2020, Xiamen Jingchenglong transferred the land use rights of the Shanghai Land II to Shanghai Zhaomin.

(iv) Financial information of Xiamen Jingchenglong

As advised by the Management, Xiamen Jingchenglong was set out for the sole purpose of holding the Shanghai Land II. Since the date of incorporation on 31 March 2020, Xiamen Jingchenglong has not conducted any business activities.

Set out below is the audited consolidated financial position of Xiamen Jingchenglong as at 31 August 2020 as extracted from Appendix IIC of the Circular.

	As at
	31 August
	2020
	RMB'000
	(audited)
Non-current assets
Deferred tax assets	4,651
Current assets
- Properties under development for sale	1,144,846
- Other receivables	861
- Bank balances	266
Total current assets	1,145,973

Total assets	1,150,624
Current liabilities

- Trade payables	9,270
- Amount due to an immediate holding company	1,153,452
- Income tax liabilities	464
Total current liabilities	1,163,186

Net liabilities	(12,562)

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

As set out above, the consolidated total assets of Xiamen Jingchenglong as at 31 August 2020 amounted to approximately RMB1,150,624,000.

Out of the consolidated total assets, the carrying amount of the properties under development for sale of approximately RMB1,144,846,000 contributed approximately 99.9% which refers to the aggregate amount of the total acquisition cost the Shanghai Land II of RMB1,126,099,000 (including transaction cost) and the capitalised construction cost and finance cost of approximately RMB18,747,000.

Further, the total liabilities of Xiamen Jingchenglong as at 31 August 2020 amounted to RMB1,163,186,000. Out of the consolidated total liabilities, RMB1,153,452,000 of which are referred to the amount advanced by C&D Real Estate to Xiamen Jingchenglong for settlement of consideration for acquisition of the Shanghai Land II (the ''Jingchenglong Loan''). As advised, the Jingchenglong Loan are unsecured, bearing interest at 5.5% per annum and repayable on demand.

2. Transaction structure of each of the Chengdu Acquisition, Huilong Acquisition and Jingchenglong Acquisition

The diagrams below illustrate separately the shareholding structure of Chengdu Zhaoxinlin, Xiamen Huilong and Xiamen Jingchenglong immediately before and after completion of the transactions contemplated under the Equity Transfer Agreements.

Immediately before completion of the transactions contemplated under the Equity Transfer Agreements

C&D Chengdu			C&D Real Estate				Xiamen Liyuan

	100%		95%				5%

Chengdu Zhaoxinlin
		Xiamean Huilong		Xiamean Jingchenglong

	100%
						100%		100%

Chengdu Land
		Shangahi Zhaoren			Shanghai Zhaomin



						100%		100%

				Shanghai Land I			Shanghai Land II

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Immediately after completion of the transactions contemplated under the Equity Transfer Agreements

Yi Yue

95%

Xiamen Zhaoyirong


Chengdu Zhaoxinlin	Xiamean Huilong	Xiamean Jingchenglong

	100%		100%		100%

Chengdu Land	Shangahi Zhaoren	Shanghai Zhaomin

			100%		100%

		Shanghai Land I		Shanghai Land II

3. Reasons and benefits of entering into the Equity Transfer Agreements

As set out int the Letter, the Directors considered that (i) each of the Chengdu Land, the Shanghai Land I and the Shanghai Land II is supported by full community services in good location with great development potential; and (ii) acquisition of the Chengdu Land, the Shanghai Land I and the Shanghai Land II would further expand the scale of the Group's land bank and enhance the Group's brand influence in the PRC market, hence, the entering into of the Equity Transfer Agreements will benefit the expansion of the Group's principal business property development, and the terms of the Equity Transfer Agreements are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

3.1 Factors in assessing the fairness and reasonableness of entering into the Equity Transfer Agreements

In assessing the fairness and reasonableness of entering into the Equity Transfer Agreements, we have considered the following factors:

Overview of the overall PRC real estate market

In line with the growth of the PRC economy and the accelerated fixed assets investment, real estate investment in the PRC has increased rapidly. Consequently as a

result	of the	PRC's rapid urbanization process	and the	strong	investment	appetite
in real	estate,	the total investment in the PRC	property	market	has been	increased

from approximately RMB9,597.9 billion in 2015 to RMB13,219.4 billion in 2019,

representing a	compound annual	growth rate (''CAGR'') of approximately	6.61%,
as stated in	the website of	the National Bureau of Statistic of	China

(https://data.stats.gov.cn/easyquery.htm?cn=C01). Meanwhile, the investment in

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

residential properties in the PRC property market has been increased from approximately RMB6,459.5 billion in 2015 to RMB9,707.1 billion in 2019, representing a CAGR of approximately 8.49%.

Set out below is the table showing the relevant data relating to the property market in the PRC for the periods indicated under a statistics entitled ''Investment Completed by Enterprise for Real Estate Development by Use'' published by National Bureau of Statistics of China:

	2015	2016	2017	2018	2019
			RMB billion
Total real estate investment	9,597.9	10,258.1	10,979.9	12,016.5	13,219.4
Investment in residential
properties	6,459.5	6,870.0	7,514.8	8,512.4	9,707.1
Investment in commercial
properties	1,460.7	1,583.8	1,564.0	1,416.7	1,322.6

As noted from the statistics above, there is a growing trend in total real estate investment for the 5 years from 2015 to 2019 and in light of such growing trend, we consider that the growing economy of the PRC had, to a certain extent, driven the investment activities in real estates in the PRC.

(ii) Overview of the real estate market in Chengdu

As set out in the Letter, the Chengdu Land is located in Chengdu, Sichuan Province, the PRC. As one of the leading provinces in finance, education, technology, and tourism, with its capital in Sichuan, Chengdu witnessing strong market demands for commercial and residential properties. In order to assess the growth potential of commercial and residential properties in Chengdu in the coming years, we have conducted research from public domains in relation to the real estate development in Chengdu region.

Based on the data relating to Chengdu real estate development investment indicator (房地產投資主要指標) for the period from 2014 to 2019, available on the official website of the National Bureau of Statistics, we note that the total investment in real estate investment in Chengdu has been increased from approximately RMB221.55 billion in 2014 to approximately RMB261.19 billion in 2019, representing a CAGR of approximately 2.78%. In view of the above growing trend, we concluded that the real estate development market in Chengdu has maintained a steady growth.

Further, we have also noted that the sales of the residential properties in Chengdu has also increased from approximately RMB161.83 billion in 2014 to approximately RMB300.45 billion in 2019, representing a CAGR of approximately 10.86%.

After considering the above research results, we conclude that there is a growing trend in the development of commercial and residential properties in Chengudu of Sichuan Province showing a potential investment return to the Group upon completion of the Chengdu Acquisition.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

(iii) Overview of the real estate market in Shanghai

As further set out in the Letter, the Shanghai Land I and the Shanghai Land II are located on Shanghai, the PRC. Shanghai is one the China's economic and financial center and the gateway to other major business and trading regions in Central and Northern China. It maintains its leading position in economic development. With the high immigration rate in Shanghai, the increase income level of local residents and the introduction of tax relief by the local government, have resulted in the increase in the market demand for high-end property. In order to assess the growth potential of commercial and residential properties in Shanghai in the coming years, we have conducted research from public domains in relation to the real estate development in Shanghai region.

Based on the data relating to Shanghai real estate development investment indicator (房地產投資主要指標) for the period from 2014 to 2019, available on the official website of the National Bureau of Statistics, we note that the total investment in real estate investment in Shanghai has been increased from approximately RMB320.65 billion in 2014 to approximately RMB423.14 billion in 2019, representing a CAGR of approximately 4.73%. In view of the above growing trend, we concluded that the real estate development market in Shanghai has maintained a steady growth.

After considering the above research results, we conclude that there is a growing trend in the development of commercial and residential properties in Shanghai showing a potential investment return to the Group upon completion of each of the Huilong Acquisition and Jingchenglong Acquisition.

Conclusion

Having considered the results of the above research and the development plans of each of the Chengdu Land, Shanghai Land I and Shanghai Land II, we are of the view that the transactions contemplated under the Equity Transfer agreements is in line with the Group's long-term development strategy and it will provide the Group with a good investment opportunity to enhance long-term values of the Company and therefore is in the interests of the Company and the Shareholders as a whole.

4. Principal terms of the Equity Transfer Agreements

On 28 September 2020, Yi Yue and Xiamen Zhaoyirong, both of which are indirect wholly owned subsidiaries of the Company, entered into the Equity Transfer Agreements.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

4.1 The Chengdu Zhaoxinlin Equity Transfer Agreements

The principal terms of the Chengdu Zhaoxinlin Equity Transfer Agreements are summarized as follows:

Date:	28 September 2020
Parties:	(i)	C&D Chengdu as vendor; and
	(ii)	Yi Yue and Xiamen Zhaoyirong as purchasers.
Interests to be	C&D Chengdu agreed to sell, and Yi Yue and Xiamen Zhaoyirong
acquired:	agreed to acquire, 95% and 5% equity interests in Chengdu
	Zhaoxinlin, respectively.
Consideration:	Pursuant to the Chengdu Zhaoxinlin Equity Transfer Agreements,
	the total consideration is RMB1,008,645,354.05 (subject to
	adjustment of the Chengdu Loan (as defined below)), which
	consist of
	(i)	cash consideration of RMB50,001,583.36, of which Yi Yue
		and Xiamen Zhaoyirong shall contribute RMB47,501,504.19;
		and RMB2,500,079.17, respectively; and
	(ii)	repayment of the Chengdu Loan with an outstanding amount
		(including principal amount and accrued interest) of
		RMB958,643,770.69 as at 15 May 2020 (subject to
		adjustment for any actual amount incurred subsequent to 15
		May 2020 and up to the date of completion of the Chengdu
		Zhaoxinlin Equity Transfer Agreements).
	The Chengdu Loan shall be repaid by Yi Yue and Xiamen
	Zhaoyirong in accordance with each of its equity interests in
	Chengdu Zhaoxinlin immediately after completion of the Chengdu
	Acquisition.
	As	at the Latest Practicable Date, the outstanding amount of the
	C h e n g d u L o a n h a s b e e n u p d a t e d t o a p p r o x i m a t e l y
	RMB5,272,292,000, therefore, the total consideration under the
	Chengdu Zhaoxinlin Equity Transfer Agreements has been revised
	from RMB1,008,645,354.05 to RMB5,322,293,583.36, which
	consist of
	(i)	the cash consideration of RMB50,001,583.36; and
	(ii)	repayment of the Chengdu Loan with an outstanding amount
		(including principal amount and accrued interest) of
		RMB5,272,292,000 as at the Latest Practicable Date (subject
		to adjustment for any actual amount incurred subsequent to
		Latest Practicable Date and up to the date of completion of the
		Chengdu Zhaoxinlin Equity Transfer Agreements).

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Based on the above changes, we have reviewed the breakdown of the Chengdu Loan as at 15 May 2020 and the same as at the Latest Practicable Date, we noted that the increase in the Chengdu Loan is mainly attributable to (i) the additional borrowing from C&D Chengdu for the payment of the land consideration with relevant tax and expenses for the Chengdu Land and development cost and other expenditures (such as sales & administrative expenses) for the Chengdu Land paid during May to November 2020; and (ii) interest accrued on the principal of the shareholder's loan. Further, we have reviewed the underlying documents and considered the changes of the consideration under the Chengdu Zhaoxinlin Equity Transfer Agreements is fair and reasonable.

4.1.1 Basis of determination of the cash consideration under the Chengdu Zhaoxinlin Equity Transfer Agreements

As set out in the Letter, the total consideration under the Chengdu Zhaoxinlin Equity Transfer Agreements was determined based on arm's length negotiation among Yi Yue, Xiamen Zhaoyirong and C&D Chengdu with reference to (i) the outstanding amount of the Chengdu Loan of RMB958,643,770.69 (subject to adjustment); and (ii) the value of the total assets and liabilities of Chengdu Zhaoxinlin (the ''Chengdu Valuation'') which was conducted by Xiamen Yongda Certified Public Accountants Co., Ltd.* (廈門永大會計師事務所有限公司) (''Xiamen Yongda CPA'') and Xiamen Qianyuan Asset Valuation and Property Valuation Company Limited* (廈門乾元資產評估與房地產估價有限公司) (the ''Independent Valuer'') on 15 May 2020. To the best knowledge and information of the Directors, each of Xiamen Yongda CPA and the Independent Valuer is third parties independent of the Group, its connected persons and C&D Real Estate.

With reference to the valuation report dated 27 May 2020 prepared by the Independent Valuer in respect of the Chengdu Valuation (the ''Chengdu Valuation Report''), the result of the Chengdu Valuation was valued at an appraised net asset value of RMB50,001,583.36 as at 15 May 2020 (the ''Chengdu Valuation''). Such appraised net asset value was determined based on the difference between the appraised value of the total assets of RMB1,013,916,017.69 and the appraised value of the total liabilities of RMB963,914,434.33. As stated in the Chengdu Valuation Report, out of the total liabilities of RMB963,914,434.33, RMB958,643,770.69 represents the outstanding amount of the Chengdu Loan as at 15 May 2020.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

4.1.2 Evaluation on the basis of consideration

In assessing the fairness and reasonableness of the basis of determination of the total consideration under the Chengdu Zhaoxinlin Equity Transfer Agreements, we have conducted the following work done.

Review on the valuation approach of the Chengdu Valuation

As set out above, the total consideration under the Chengdu Zhaoxinlin Equity Transfer Agreements was determined based on the result of the Chengdu Valuation.

Based on our review on the Chengdu Valuation Report, we note that the Chengdu Valuation was prepared by the Independent Valuer based on the asset-based approach, which is a form of valuation that focuses on the value of a company's assets or the fair market value of its total assets after deducting liabilities.

In evaluating the aforesaid valuation approach, we noticed that the prepaid amount for acquisition of the land use rights of the Chengdu Land (i.e. RMB797,695,430) as stated in the audited financial position of Chengdu Zhaoxinlin as at 15 May 2020 represents the principal assets of Chengdu Zhaoxinlin, which accounted for approximately 78.67% of its total assets (i.e. RMB1,013,916,018). Given (i) the core asset of Chengdu Zhaoxinlin is the Chengdu Land; (ii) Chengdu Zhaoxinlin has not conduct any business activities since its incorporation; and (iii) the book value of each assets and liabilities of Chengdu Zhaoxinlin could be analysed, adjusted and appraised individually, we concur with the Independent Valuer that it is fair and reasonable to adopt the asset based approach on the Chengdu Valuation.

We have also considered the future cash flow approach, however, we considered that this is not appropriate because (i) the Chengdu Land is at its construction stage; (ii) Chengdu Zhaoxinlin has not commenced any business activities; and (iii) the basis and assumptions under the future cash flow approach involved uncertainties, after considered the above factors, we are of the view that the asset-based approach is an appropriate reference in determining the consideration under the Chengdu Zhaoxinlin Equity Transfer Agreements.

Details of the methodologies of assessing the fair market value of the assets and liabilities of Chengdu Zhaoxinlin are set out below.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Review on the valuation methodology and assumptions of the Chengdu Valuation

We have reviewed the Chengdu Valuation Report and noted that the result of the Chengdu Valuation is RMB50,001,583.36. Set out below is summary of the assets and liabilities of Chengdu Zhaoxinlin as at 15 May 2020 as set out in the Chengdu Valuation Report:

	As at
	15 May
	2020
	RMB
	(audited)
Current assets
- Prepayment	767,695,430
- Other receivables	190,949,294
- Cash at banks and on hand	55,271,294
Total current assets	1,013,916,018
Current liabilities

- Other payables	5,270,000
- Amount due to C&D Chengdu	958,643,771
- Tax payables	663
Total current liabilities	963,914,434

Net assets	50,001,583

The value of the land use rights of the Chengdu Land

We noticed that the Chengdu Valuation has not taken into consideration the fair market value of the Chengdu Land. As advised by the Independent Valuer, the prepaid land deposit was assessed based on the actual cost paid by Chengdu Zhaoxinlin to Chengdu Planning Bureau for settlement of part of the consideration of the Chengdu Land.

In order to assess the fair market value of the Chengdu Land, the Company has engaged Cushman & Wakefield Limited (the ''Property Valuer''), an independent property valuer, to conduct a valuation. With reference to the valuation report in respect of the market value of the Chengdu Land prepared by the Property Valuer on 31 October 2020, the Chengdu Land was revalued at RMB4,969,000,000 as at 31 October 2020 (the ''Chengdu Land Valuation'').

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

In order to assess the fairness and reasonableness of the Chengdu Land Valuation, we have further reviewed the underlying valuation basis and assumptions of the Chengdu Land Valuation and conducted the following work done.

Review on the valuation methodologies and assumptions

We have discussed with the Property Valuer regarding the methodologies adopted for and the basis and assumptions used in arriving at the market value of the Chengdu Land.

We note that the Chengdu Land Valuation was prepared by the Property Valuer using the direct comparison approach. In the course of our discussion with the Property Valuer, we understand that the Property Valuer has considered three generally accepted approaches, namely market approach (or the direct comparison approach), income approach and cost approach, in arriving at the market value of the Chengdu Land as at 31 August 2020. However, having considered that (i) the cost approach is not considered to be an appropriate approach for valuing income generating assets; and (ii) the income approach is not considered to be appropriate as it is not able to estimate the future economic benefits using reliable parameters and assumptions under the current operating stage. Based on the said discussion, given (i) the direct comparison approach referencing the comparable transactions of land parcels is commonly adopted and well recognized methodology in assessing the market value of property projects at early stages; and (ii) the availability of market comparables and the major assumptions made in connection with such valuation approach are reasonable, we concur with the Property Valuer that the direct comparison method, which consist of comparisons based on prices realized or current asking prices of comparables properties, is the most appropriate method adopted for the Chengdu Land Valuation.

During our discussion with the Property Valuer, we understand how the Chengdu Land Valuation was being derived and how the comparable lands of similar size, character and location were weighed against their respective advantage and drawbacks.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

and other characters between the comparables and the Changdu Land to arrive at an assumed unit rate. After reviewing the comparables by checking to the information of such comparables including but not limited to location, land use term, plot ratio and site area, we concur with the Property Valuer's view that the basis being adopted are appropriate, fair and reasonable. As further confirmed by the Property Valuer, it has been provided with a legal opinion on the title to the Chengdu Land which mainly contains, inter alia, the following information:

Chengdu Zhaoxinlin is the sole legal land user of the Chengdu Land; and
Chengdu Zhaoxinlin has obtained relevant approval for development of the Chengdu Land.

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

Review on the competency of the Property Valuer

For our due diligence purposes, we have reviewed and enquired into

the terms of engagement of the Property Valuer; (ii) the Property Valuer's qualification and experience in relation to the preparation of the Chengdu Land Valuation; and (iii) the steps and due diligence measures taken by the Property Valuer for conducting the Chengdu Land Valuation. We noted that the Property Valuer has over 20 years of experience in preparing the valuation of properties in the PRC. Based on the engagement letter and on our interview with the Property Valuer, we are satisfied with the terms of engagement of the Property Valuer as well as its qualification and experience for preparation of the Chengdu Land Valuation.

Review on the results of the Chengdu Land Valuation

During our discussion with the Property 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 Chengdu Land Valuation.

(ii) The value of other assets and liabilities

We note from the Chengdu Valuation that the value of other assets and liabilities (including prepayments and other receivables, cash and bank balances and other liabilities) are valued at its costs and without any adjustment, having considered the nature of such other assets and liabilities are not subject to market change and depreciation, we consider valuing such assets and liabilities at its carry amount is fair and reasonable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Review on the competency of the Independent Valuer

For our due diligence purpose, we have reviewed and enquired into (i) the terms of engagement of the Independent Valuer; (ii) the Independent Valuer's qualification and experience in relation to the preparation of the Chengdu Valuation Report; and

the steps and due diligence measures taken by the Independent Valuer for conducting the Chengdu Valuation. From the engagement letter and other relevant information provided by the Independent Valuer and based on our interview with it, we are satisfied with the terms of engagement of the Independent Valuer as well as its qualification and experience for preparation of the Chengdu Valuation Report.

(d) Result of the assessment in relation to the Chengdu Valuation

After considered the above, we considered that the Chengdu Valuation and the Chengdu Land Valuation is fair and reasonable.

4.1.3 Review on the outstanding amount of the Chengdu Loan

We understand that the outstanding balance of the Chengdu Loan as at the Latest Practicable Date is RMB5,272,292,000. As set out in the Chengdu Zhaoxinlin Equity Transfer Agreements, such amount is subject to adjustment for any actual amount incurred subsequent to the Latest Practicable Date and up to the date of completion of the Chengdu Zhaoxinlin Equity Transfer Agreements.

According to the audited financial statements of Chengdu Zhaoxinlin, the outstanding balance of the Chengdu Loan as at 31 August 2020 is approximately RMB3,547,040,000. As advised by the Directors, the Chengdu Loan is unsecured, carried an interest rate of 5.5% per annum and repayable on demand while the whole amount was utilised for payment of the acquisition cost and construction cost of the Chengdu Land. Having checked to the breakdown of the outstanding balance of the Chengdu Loan and the underlying documents, we considered that the determination of the Chengdu Loan is fair and reasonable.

Besides, we understand that the Company was entered into a framework agreement (as amended on 1 April 2020) with C&D Real Estate in relation to the grant of the shareholder loan of not exceeding RMB40,000,000,000 by C&D Real Estate and the annual interest rate of such loan is 5.5% (the ''C&D Loan''). It is advised by the Directors that the terms of the C&D Loan (as amended from time to time) are more favourable than the terms for the same type of unsecured loan offered to the Group by independent third party financial institutions in Hong Kong and the PRC. Based on this, we have (i) compared the annual interest rate under the C&D Loan with that of the Chengdu Loan; (ii) reviewed the terms of the Group's existing bank loans; and (iii) made enquiry with the Management regarding the consideration of any alternatives method, we noted that

the interest rate offered under the Chengdu Loan of 5.5% is equivalent to that of the C&D Loan;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

the finance cost of the Group's existing bank loan, which bearing an interest of effective interest rates ranging from 3.5% to 7.0% per annum, are either (a) secured by legal charges over the Group's property, plant and equipment, properties under development and investment properties; or (b) guaranteed by C&D Real Estate or subsidiaries of the Company;
the Management has approached several banks in the PRC regarding the possibility and feasibility of granting new credit line or loan to the Group, however, given (a) the loan amount is substantial; (b) no guarantees/or pledged assets could be offered; and (c) the high gearing ratio of the Group as stated in the Group's 2020 Interim Results, the interest rates offered would be higher than that offered under the Chengdu Loan (i.e. 5.5% per annum).

Based on the above, we concluded that the consideration of the Chengdu Loan adopted by the Management is justifiable and the terms of which are fair and reasonable and in the interest of the Shareholders and the Company as a whole.

4.1.4 Conclusion on the evaluation of the basis of consideration

Apart from reviewing the Chengdu Valuation and the Chengdu Land Valuation, we have also reviewed the unaudited financial statements of Chengdu Zhaoxinlin as at 31 October 2020 as provided by the Management. Based on such review, we noted the followings:

as per the unaudited financial statements of Chengdu Zhaoxinlin as at 31 October 2020, the unaudited net asset value of Chengdu Zhaoxinlin as at 31 October 2020 is approximately RMB45,439,000. Based on this, there is a decrease in the net asset value of Chengdu Zhaoxinlin by approximately RMB4,563,000 when compared to the same as at 15 May 2020 (i.e. approximately RMB50,002,000). After our enquiry and review on the breakdown of the said unaudited financial statements, we noted that such decrease was mainly attributable to the combined effect of the recognition of construction cost of the Chengdu Land and the increase in Chengdu Loan during the period from 16 May 2020 to 31 October 2020; and
the fair value of the Chengdu Land as at 31 October 2020 (i.e. RMB4,969,000,000) represents a revaluation surplus of approximately RMB14,264,000 as compared to the aggregate amount of RMB4,954,736,000 of
1. the carrying amount of the Chengdu Land as at 31 August 2020 (i.e. RMB4,779,986,000); and (b) the construction in process during the period from 31 August 2020 to 31 October 2020 (unaudited) of approximately RMB174,750,000.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

As a result, the fair value surplus as per above (i.e. RMB14,264,000) represents a premium over the difference between the net asset value as at 15 May 2020 and 31 October 2020 (i.e. RMB4,563,000).

Based on the above, despite the total consideration under the Chengdu Zhaoxinlin Equity Transfer Agreements was determined based on the Chengdu Valuation, which did not take into account (i) the financial position of Chengdu Zhaoxinlin as at 31 October 2020; and (ii) the fair value of the Chengdu Land, we understand that the Directors had considered (i) the fair value of the Chengdu Land as appraised by the Property Valuer where the fair value surplus is able to cover the loss on the changes in the net asset value; and (ii) the reasons and benefits as described in the sub-section headed ''Reasons and benefits of entering into the Equity Transfer Agreements'' of this letter, we concur with the Directors that the determination of the consideration under the Chengdu Zhaoxinlin Equity Transfer Agreements is fair and reasonable and is in the interest of the Company and the Shareholders as a whole.

4.2 The Xiamen Huilong Equity Transfer Agreements

The principal terms of the Xiamen Huilong Equity Transfer Agreements are summarized as follows:

Date:	28 September 2020
Parties:	(i) C&D Real Estate and Xiamen Liyuan as vendors; and
	(ii) Yi Yue and Xiamen Zhaoyirong as purchasers.
Interests to be	(i) C&D Real Estate agreed to sell, and Yi Yue agreed to acquire,
acquired:	95% equity interests in Xiamen Huilong; and
	(ii) Xiamen Liyuan agreed to sell, and Xiamen Zhaoyirong agreed
	to acquire, 5% equity interests in Xiamen Huilong.
Consideration:	Pursuant to the Xiamen Huilong Equity Transfer Agreements, the
	total consideration is RMB2,588,484,971.47, representing the
	repayment of the Huilong Loan with an outstanding amount
	( i n c l u d i n g p r i n c i p a l a m o u n t a n d a c c r u e d i n t e r e s t ) o f
	RMB2,588,484,971.47 as at 31 May 2020 (subject to adjustment
	for any actual amount incurred subsequent to 31 May 2020 and up
	to the date of completion of the Xiamen Huilong Equity Transfer
	Agreements).
	The Huilong Loan shall be repaid by Yi Yue and Xiamen
	Zhaoyirong in accordance with each of its equity interests in
	Xiamen Huilong immediately after completion of the Huilong
	Acquisition.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

As at the Latest Practicable Date, the outstanding amount of the H u i l o n g L o a n h a s b e e n u p d a t e d t o a p p r o x i m a t e l y RMB2,662,930,000, therefore, the total consideration under the Xiamen Huilong Equity Transfer Agreements has been revised from RMB2,588,484,971.47 to RMB2,662,930,000 (subject to adjustment for any actual amount incurred subsequent to Latest Practicable Date and up to the date of completion of the Xiamen Huilong Equity Transfer Agreements).

Based on the above changes, we have reviewed the breakdown of the Huilong Loan as at 31 May 2020 and the same as at the Latest Practicable Date, we noted that the increase in the Huilong Loan is mainly attributable to (i) the additional borrowing from C&D Real Estate for the payment of development cost and other expenditures (such as sales and administrative expenses) for the Shanghai Land I paid from May to November 2020, and (ii) interest accrued on the principal of the shareholder's loan. Further, we have reviewed the underlying documents and considered the changes of the consideration under the Xiamen Huilong Equity Transfer Agreements is fair and reasonable.

4.2.1 Basis of determination of the cash consideration under the Xiamen Huilong Equity Transfer Agreement

As set out in the Letter, the total consideration under the Xiamen Huilong Equity Transfer Agreements was determined based on arm's length negotiation among Yi Yue, Xiamen Zhaoyirong, C&D Real Estate and Xiamen Liyuan with reference to (i) the outstanding amount of the Huilong Loan of RMB2,588,484,971.47 as at 31 May 2020; and (ii) the value of the total assets and liabilities of Xiamen Huilong (the ''Huilong Valuation'') which was conducted by Xiamen Yongda CPA and the Independent Valuer on 31 May 2020.

With reference to the valuation report dated 24 June 2020 prepared by the Independent Valuer in respect of the Huilong Valuation (the ''Huilong Valuation Report''), the result of the Huilong Valuation was valued at an appraised net asset value of RMB0 as at 31 May 2020. Such appraised net asset value was determined based on the difference between the appraised value of the total assets of RMB2,590,053,205.77 and the appraised value of the total liabilities of RMB2,590,053,205.77. As stated in the Huilong Valuation Report, out of the total liabilities of RMB2,590,053,205.77, RMB2,588,484,971.47 represents the outstanding amount of the Huilong Loan as at 31 May 2020.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

4.2.2 Evaluation on the basis of consideration

In assessing the fairness and reasonableness of the basis of determination of the total consideration under the Xiamen Huilong Equity Transfer Agreements, we have conducted the following work done.

Review on the valuation approach of the Huilong Valuation

As set out above, the total consideration under the Xiamen Huilong Equity Transfer Agreements was determined based on the result of the Huilong Valuation.

Based on our review on the Huilong Valuation Report, we note that the Huilong Valuation was prepared by the Independent Valuer based on the asset-based approach.

In evaluating the aforesaid valuation approach, we noticed that the other receivables and bank balances which are used to finance the acquisition of the land use rights of the Shanghai Land I (i.e. RMB2,590,053,206) as stated in the audited financial position of Xiamen Huilong as at 31 May 2020 represents the entire assets of Xiamen Huilong. Given (i) the core asset of Xiamen Huilong is the Shanghai Land I; (ii) Xiamen Huiling has not conduct any business activities since its incorporation; and (iii) the book value of each assets and liabilities of Xiamen Huilong could be analysed, adjusted and appraised individually, we concur with the Independent Valuer that it is fair and reasonable to adopt the asset based approach on the Huilong Valuation.

We have also considered the future cash flow approach, however, we considered that this is not appropriate because (i) the Shanghai Land I is at its construction stage; (ii) Xiamen Huilong has not commenced any business activities; and (iii) the basis and assumptions under the future cash flow approach involved uncertainties, after considered the above factors, we are of the view that the asset- based approach is an appropriate reference in determining the consideration under the Xiamen Huiling Equity Transfer Agreements.

Details of the methodologies of assessing the fair market value of the assets and liabilities of Xiamen Huilong are set out below.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Review on the valuation methodology and assumptions of the Huilong Valuation

We have reviewed the Huiling Valuation Report and noted that the result of the Huilong Valuation is RMB0. Set out below is summary of the assets and liabilities of Xiamen Huilong as at 31 May 2020 as set out in the Huiling Valuation Report:

	As at
	31 May
	2020
	RMB
	(audited)
Current assets
- Other receivables	526,650,246
- Cash at banks and on hand	2,063,402,960
Total current assets	2,590,053,206
Current liabilities

- Other payables	1,568,234
- Amount due to C&D Real Estate	2,588,484,972
Total current liabilities	2,590,053,206

Net assets	0

The value of the land use rights of the Shanghai Land I

We noticed that the Huilong Valuation has not taken into consideration the fair market value of the Shanghai Land I. As advised by the Independent Valuer, the prepaid land deposit was assessed based on the actual cost paid by Xiamen Huilong to Shanghai Baoshan District Planning and Natural Resources Bureau for settlement of part of the consideration of the Shanghai Land I.

In order to assess the fair market value of the Shanghai Land I, the Company has engaged the Property Valuer to conduct a valuation. With reference to the valuation report in respect of the market value of the Shanghai Land I prepared by the Property Valuer on 31 October 2020, the Shanghai Land I was revalued at RMB2,598,000,000 as at 31 October 2020 (''Huilong Land Valuation'').

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

In order to assess the fairness and reasonableness of the Huilong Land Valuation, we have further reviewed the underlying valuation basis and assumptions of the Huilong Land Valuation and conducted the following work done.

Review on the valuation methodologies and assumptions

We have discussed with the Property Valuer regarding the methodologies adopted for and the basis and assumptions used in arriving at the market value of the Shanghai Land I.

We note that the Huilong Land Valuation was prepared by the Property Valuer using the direct comparison approach. In the course of our discussion with the Property Valuer, we understand that the Property Valuer has considered three generally accepted approaches, namely market approach (or the direct comparison approach), income approach and cost approach, in arriving at the market value of the Shanghai Land I as at 31 August 2020. However, having considered that (i) the cost approach is not considered to be an appropriate approach for valuing income generating assets; and (ii) the income approach is not considered to be appropriate as it is not able to estimate the future economic benefits using reliable parameters and assumptions under the current operating stage. Based on the said discussion, given (i) the direct comparison approach referencing the comparable transactions of land parcels is commonly adopted and well recognized methodology in assessing the market value of property projects at early stages; and (ii) the availability of market comparables and the major assumptions made in connection with such valuation approach are reasonable, we concur with the Property Valuer that the direct comparison method, which consist of comparisons based on prices realized or current asking prices of comparables properties, is the most appropriate method adopted for the Huilong Land Valuation.

During our discussion with the Property Valuer, we understand how the Huilong Land Valuation was being derived and how the comparable lands of similar size, character and location were weighed against their respective advantage and drawbacks.

We have further discussed with the Property Valuer on the valuation methodology applied, and reviewed the comparables provided by the Property Valuer, we note that the Property Valuer has identified and analyzed various relevant sales evidences in the locality, which have similar characteristics as the subject land, such as nature, use, site area, layout and accessibility of the land. The selected comparables are lands located close to the Shanghai Land I, which have transacted during 2020. The unit price of the comparables on gross floor area ranges from RMB19,876 to RMB23,760 per sq.m. Appropriate adjustments and analysis are considered to the differences in location, size and other characters between the comparables and the Shanghai Land I to arrive at an assumed unit rate. After reviewing the comparables by checking to the information of such comparables including but not limited to location, land use term,

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

plot ratio and site area, we concur with the Property Valuer's view that the basis being adopted are appropriate, fair and reasonable. As further confirmed by the Property Valuer, it has been provided with a legal opinion on the title to the Shanghai Land I which mainly contains, inter alia, the following information:

Shanghai Zhaoren has obtained the Real Estate Title Certificate of the Shanghai Land I and the Real Estate Title Certificate is valid and legal;
Shanghai Zhaoren is the sole legal land user of the Shanghai Land I; and
Shanghai Zhaoren has obtained relevant approval for development of the Shanghai Land I.

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

Review on the competency of the Property Valuer

Please refer to the sub-section headed ''Review on the competency of the Property Valuer'' under the section headed ''4.1. The Chengdu Zhaoxinlin Equity Transfer Agreement'' on page 57 of this letter.

Review on the results of the Huilong Land Valuation

(ii) The value of other assets and liabilities

We note from the Huilong Valuation that the value of other assets and liabilities (including prepayments and other receivables, cash and bank balances and other liabilities) are valued at its costs and without any adjustment, having considered the nature of such other assets and liabilities are not subject to market change and depreciation, we consider valuing such assets and liabilities at its carry amount is fair and reasonable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Review on the competency of the Independent Valuer

Please refer to the sub-section headed ''Review on the competency of the Independent Valuer'' under the section headed ''4.1. The Chengdu Zhaoxinlin Equity Transfer Agreement'' on page 57 of this letter.

(d) Result of the assessment in relation to the Huilong Valuation

After considered the above, we considered that the Huilong Valuation and the Huiling Land Valuation is fair and reasonable.

4.2.3 Review on the outstanding amount of the Huilong Loan

We understand that the outstanding balance of the Huilong Loan as at the Latest Practicable Date is RMB2,662,930,000. As set out in the Xiamen Huilong Equity Transfer Agreements, such amount is subject to adjustment for any actual amount incurred subsequent to the Latest Practicable Date and up to the date of completion of the Xiamen Huilong Equity Transfer Agreements.

According to the audited financial statements of Xiamen Huilong, the outstanding balance of the Huilong Loan as at 31 August 2020 is approximately RMB2,579,881,000. As advised by the Directors, the Huilong Loan is unsecured, carried an interest rate of 5.5% per annum and repayable on demand while the whole amount was utilised for payment of the acquisition cost and construction cost of the Shanghai Land I. Having considered the interest free terms, and checked to the breakdown of the outstanding balance of the Huilong Loan and the underlying documents, we considered that the determination of the Huilong Loan is fair and reasonable and favourable to the Company and the Shareholders as whole.

Besides, we have (i) compared the annual interest rate under the C&D Loan with that of the Huilong Loan; (ii) reviewed the terms of the Group's existing bank loans; and (iii) made enquiry with the Management regarding the consideration of any alternatives method, we noted that

the interest rate offered under the Huilong Loan of 5.5% is equivalent to that of the C&D Loan;
the finance cost of the Group's existing bank loan, which bearing an interest of effective interest rates ranging from 3.5% to 7.0% per annum, are either (a) secured by legal charges over the Group's property, plant and equipment, properties under development and investment properties; or (b) guaranteed by C&D Real Estate or subsidiaries of the Company;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

the Management has approached several banks in the PRC regarding the possibility and feasibility of granting new credit line or loan to the Group, however, given (a) the loan amount is substantial; (b) no guarantees/or pledged assets could be offered; and (c) the high gearing ratio of the Group as stated in the Group's 2020 Interim Results, the interest rates offered would be higher than that offered under the Huilong Loan (i.e. 5.5% per annum).

Based on the above, we concluded that the consideration of the Huilong Loan adopted by the Management is justifiable and the terms of which are fair and reasonable and in the interest of the Shareholders and the Company as a whole.

4.2.4 Conclusion on the evaluation of the basis of consideration

Apart from reviewing the Huilong Valuation and the Huilong Land Valuation, we have also reviewed the unaudited financial statements of Xiamen Huilong as at 31 October 2020 as provided by the Management. Based on such review, we noted the followings:

as per the unaudited consolidated financial statements of Xiamen Huilong as at 31 October 2020, the unaudited consolidated net asset value of Xiamen Huilong as at 31 October 2020 is approximately RMB830,000. Based on this, there is an increase in the consolidated net asset value of Xiamen Huilong by approximately RMB830,000 when compared to the same as at 31 May 2020 (i.e. RMB0). After our enquiry and review on the breakdown of the said unaudited financial statements, we noted that such increase was mainly attributable to the combined effect of the recognition of construction cost of the Shanghai Land I and the increase in Huilong Loan during the period from 31 May 2020 to 31 October 2020; and
the fair value of the Shanghai Land I as at 31 October 2020 (i.e. RMB2,598,000,000) represents a revaluation surplus of approximately RMB18,141,000 as compared to the aggregate amount of RMB2,579,859,000 of
1. the carrying amount of the Shanghai Land I as at 31 August 2020 (i.e. RMB2,535,837,000); and (b) and the construction in process during the period from 31 August 2020 to 31 October 2020 (unaudited) of approximately RMB41,022,000).

As a result, the fair value surplus as per above (i.e. RMB18,141,000) represents a premium on top of difference between the unaudited consolidated net asset value as at 31 May 2020 and 31 October 2020 (i.e. RMB830,000).

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Based on the above, despite the total consideration under the Xiamen Huilong Equity Transfer Agreements was determined based on the Huilong Valuation, we understand that the Directors had considered (i) the fair value of the Shanghai Land I as appraised by the Property Valuer which is a fair value surplus as compared to the original acquisition cost;

there is no material change on the net asset value of Xiamen Huilong as at 31 October 2020 as compared to that of 31 May 2020; and (iii) the reasons and benefits as described in the sub-section headed ''Reasons and benefits of entering into the Equity Transfer Agreements'' of this letter, we concur with the Directors that the determination of the consideration under the Xiamen Huilong Equity Transfer Agreements is fair and reasonable and is in the interest of the Company and the Shareholders as a whole.

4.3 The Xiamen Jingchenglong Equity Transfer Agreements

The principal terms of the Xiamen Jingchenglong Equity Transfer Agreements are

summarized as follows:

Date:	28 September 2020
Parties:	(i) C&D Real Estate and Xiamen Liyuan as vendors; and
	(ii) Yi Yue and Xiamen Zhaoyirong as purchasers.
Interests to be	(i) C&D Real Estate agreed to sell, and Yi Yue agreed to acquire,
acquired:	95% equity interests in Xiamen Jingchenglong; and
	(ii) Xiamen Liyuan agreed to sell, and Xiamen Zhaoyirong agreed
	to acquire, 5% equity interests in Xiamen Jingchenglong.
Considerations:	Pursuant to the Xiamen Jingchenglong Equity Transfer
	Agreements, the total consideration is RMB1,150,434,283.06,
	representing the repayment of the Jingchenglong Loan with an
	outstanding amount (including principal amount and accrued
	interest) of RMB1,150,434,283.06 as at 31 May 2020 (subject to
	adjustment for any actual amount incurred subsequent to 31 May
	2020 and up to the date of completion of the Xiamen
	Jingchenglong Equity Transfer Agreements).
	The Jingchenglong Loan shall be repaid by Yi Yue and Xiamen
	Zhaoyirong in accordance with each of its equity interests in
	Xiamen Jingchenglong immediately after completion of the
	Jingchenglong Acquisition.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

As at the Latest Practicable Date, the outstanding amount of the Jingchenglong Loan has been updated to approximately RMB1,229,570,000, therefore, the total consideration under the Xiamen Jingchenglong Equity Transfer Agreements has been revised from RMB1,150,434,283.06 to RMB1,229,570,000 (subject to adjustment for any actual amount incurred subsequent to Latest Practicable Date and up to the date of completion of the Xiamen Jingchenglong Equity Transfer Agreements).

Based on the above changes, we have reviewed the breakdown of the Jingchenglong Loan as at 31 May 2020 and the same as at the Latest Practicable Date, we noted that the increase in the Jingchenglong Loan is mainly due to (i) the additional borrowing from C&D Real Estate for the payment of development cost and other expenditures (such as sales & administrative expenses) for the Shanghai Land II paid from May to November 2020; and (ii) interest accrued on the principal of the shareholder's loan. Further, we have reviewed the underlying documents and considered the changes of the consideration under the Xiamen Jingchenglong Equity Transfer Agreements is fair and reasonable.

4.3.1 Basis of determination of the cash consideration under the Xiamen Jingchenglong Equity Transfer Agreements

As set out in the Letter, the total consideration under the Xiamen Jingchenglong Equity Transfer Agreements was determined based on arm's length negotiation among Yi Yue, Xiamen Zhaoyirong, C&D Real Estate and Xiamen Liyuan with reference to (i) the outstanding amount of the Jingchenglong Loan of RMB1,150,434,283.06 as at 31 May 2020; and (ii) the value of the total assets and liabilities of Xiamen Jingchenglong (the ''Jingchenglong Valuation'') which was conducted by Xiamen Yongda CPA and the Independent Valuer on 31 May 2020.

With reference to the valuation report dated 22 June 2020 prepared by the Independent Valuer in respect of the Jingchenglong Valuation (the ''Jingchenglong Valuation Report''), the result of the Jingchenglong Valuation was valued at an appraised net asset value of RMB0 as at 31 May 2020. Such appraised net asset value was determined based on the difference between the appraised value of the total assets of RMB1,150,434,283.06 and the appraised value of the total liabilities of RMB1,150,434,283.06. As stated in the Jingchenglong Valuation Report, the total liabilities of RMB1,150,434,283.06 represents the outstanding amount of the Jingchenglong Loan as at 31 May 2020.

4.3.2 Evaluation on the basis of consideration

In assessing the fairness and reasonableness of the basis of determination of the total consideration under the Xiamen Jingchenglong Equity Transfer Agreements, we have conducted the following work done.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Review on the valuation approach of the Jingchenglong Valuation

As set out above, the total consideration under the Xiamen Jingchenglong Equity Transfer Agreements was determined based on the result of the Jingchenglong Valuation.

Based on our review on the Jingchenglong Valuation Report, we note that the Jingchenglong Valuation was prepared by the Independent Valuer based on the asset- based approach.

In evaluating the aforesaid valuation approach, we noticed that the bank balances and other receivables which are used to finance the acquisition of the land use rights of the Shanghai Land II (i.e. RMB1,150,434,283) as stated in the audited financial position of Xiamen Jingchenglong as at 31 May 2020 represents the entire assets of Xiamen Jingchenglong. Given (i) the core asset of Xiamen Jingchenglong is the Shanghai Land II; (ii) Xiamen Jingchenglong has not conduct any business activities since its incorporation; and (iii) the book value of each assets and liabilities of Xiamen Jingchenglong could be analysed, adjusted and appraised individually, we concur with the Independent Valuer that it is fair and reasonable to adopt the asset based approach on the Jingchenglong Valuation.

We have also considered the future cash flow approach, however, we considered that this is not appropriate because (i) the Shanghai Land II is at its construction stage; (ii) Xiamen Jingchenglong has not commenced any business activities; and (iii) the basis and assumptions under the future cash flow approach involved uncertainties, after considered the above factors, we are of the view that the asset-based approach is an appropriate reference in determining the consideration under the Xiamen Jingchenglong Equity Transfer Agreements.

Details of the methodologies of assessing the fair market value of the assets and liabilities of Xiamen Jingchenglong are set out below.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Review on the valuation methodology and assumptions of the Jingchenglong Valuation

We have reviewed the Jingchenglong Valuation Report and noted that the results of the Jingchenglong Valuation is RMB0. Set out below is summary of the assets and liabilities of Xiamen Jingchenglong as at 31 May 2020 as set out in the Jingchenglong Valuation Report:

	As at
	31 May
	2020
	RMB
	(audited)
Current assets
- Other receivables	219,094,283
- Cash at banks and on hand	931,340,000
Total current assets	1,150,434,283
Current liabilities

- Amount due to C&D Real Estate	1,150,434,283
Total current liabilities	1,150,434,283

Net assets	0

The value of the land use right of the Shanghai Land II

We noticed that the Jingchenglong Valuation has not taken into consideration the fair market value of the Shanghai Land II. As advised by the Independent Valuer, the prepaid land deposit was assessed based on the actual cost paid by Xiamen Jingchenglong to Shanghai Minhang District Planning and Natural Resources Bureau for settlement of part of the consideration of the Shanghai Land II.

In order to assess the fair market value of the Shanghai Land II, the Company has engaged the Property Valuer. With reference to the valuation report in respect of the market value of the Shanghai Land II prepared by the Property Valuer on 31 October 2020, the Shanghai Land II was revalued at RMB1,178,000,000 as at 31 October 2020 (''Jingchenglong Land Valuation'').

In order to assess the fairness and reasonableness of the Jingchenglong Land Valuation, we have further reviewed the underlying valuation basis and assumptions of the Jingchenglong Land Valuation and conducted the following work done.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Review on the valuation methodologies and assumptions

We have discussed with the Property Valuer regarding the methodologies adopted for and the basis and assumptions used in arriving at the market value of the Shanghai Land II.

We note that the Jingchenglong Land Valuation was prepared by the Property Valuer using the direct comparison approach. In the course of our discussion with the Property Valuer, we understand that the Property Valuer has considered three generally accepted approaches, namely market approach (or the direct comparison approach), income approach and cost approach, in arriving at the market value of the Shanghai Land II as at 31 August 2020. However, having considered that (i) the cost approach is not considered to be an appropriate approach for valuing income generating assets; and (ii) the income approach is not considered to be appropriate as it is not able to estimate the future economic benefits using reliable parameters and assumptions under the current operating stage. Based on the said discussion, given (i) the direct comparison approach referencing the comparable transactions of land parcels is commonly adopted and well recognized methodology in assessing the market value of property projects at early stages; and (ii) the availability of market comparables and the major assumptions made in connection with such valuation approach are reasonable, we concur with the Property Valuer explained that the direct comparison method, which consist of comparisons based on prices realized or current asking prices of comparables properties, is the most appropriate method adopted for the Jingchenglong Land Valuation.

During our discussion with the Property Valuer, we understand how the Jingchenglong Land Valuation was being derived and how the comparable lands of similar size, character and location were weighed against their respective advantage and drawbacks.

We have further discussed with the Property Valuer on the valuation methodology applied, and reviewed the comparables provided by the Property Valuer, we note that the Property Valuer has identified and analyzed various relevant sales evidences in the locality, which have similar characteristics as the subject land, such as nature, use, site area, layout and accessibility of the land. The selected comparables are lands located close to the Shanghai Land II, which have transacted during the period from 2019 to 2020. The unit price of the comparables on gross floor area ranges from RMB16,232 to RMB19,173 per sq.m. Appropriate adjustments and analysis are considered to the differences in location, size and other characters between the comparables and the Shanghai Land II to arrive at an assumed unit rate. After reviewing the comparables by checking to the information of such comparables including but not limited to location, land use term, plot ratio and site area, we concur with the Property Valuer's view that the basis being adopted are appropriate, fair and reasonable. As further confirmed by the Property Valuer, it has been

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

provided with a legal opinion on the title to the Shanghai Land II which mainly contains, inter alia, the following information:

Shanghai Zhaomin has obtained the Real Estate Title Certificate of the Shanghai Land II and the Real Estate Title Certificate is valid and legal;
Shanghai Zhaomin is the sole legal land user of the Shanghai Land II; and
Shanghai Zhaomin has obtained relevant approval for development of the Shanghai Land II.

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

Review on the competency of the Property Valuer

Review on the results of the Jingchenglong Land Valuation

(ii) The value of other assets and liabilities

We note from the Jingchenglong Valuation that the value of other assets and liabilities (including prepayments and other receivables, cash and bank balances and other liabilities) are valued at its costs and without any adjustment, having considered the nature of such other assets and liabilities are not subject to market change and depreciation, we consider valuing such assets and liabilities at its carry amount is fair and reasonable.

Review on the competency of the Independent Valuer

(d) Result of the assessment in relation to the Jingchenglong Valuation

After considered the above, we considered that the Jingchenglong Valuation and the Jingchenglong Land Valuation is fair and reasonable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

4.3.3 Review on the outstanding amount of the Jingchenglong Loan

We understand that the outstanding balance of the Jingchenglong Loan as at the Latest Practicable Date is RMB1,229,570,000. As set out in the Xiamen Jingchenglong Equity Transfer Agreement, such amount is subject to adjustment for any actual amount incurred subsequent to the Latest Practicable Date and up to the date of completion of the Xiamen Jingchenglong Equity Transfer Agreements.

According to the audited financial statements of Xiamen Jingchenglong, the outstanding balance of the Jingchenglong Loan as at 31 August 2020 is approximately RMB1,153,452,000. As advised by the Directors, the Jingchenglong Loan is unsecured, carried an interest rate of 5.5% per annum and repayable on demand while the whole amount was utilised for payment of the acquisition cost and the construction cost of the Shanghai Land II. Having considered the interest free terms and checked to the breakdown of the outstanding balance of the Jingchenglong Loan and the underlying documents, we considered that the determination of the Jingchenglong Loan is fair and reasonable and is favourable to the Company and the Shareholders as a whole.

Besides, we have (i) compared the annual interest rate under the C&D Loan with that of the Jinchenglong Loan; (ii) reviewed the terms of the Group's existing bank loans; and

made enquiry with the Management regarding the consideration of any alternatives method, we noted that
1. the interest rate offered under the Jinchenglong Loan of 5.5% is equivalent to that of the C&D Loan;
2. the finance cost of the Group's existing bank loan, which bearing an interest of effective interest rates ranging from 3.5% to 7.0% per annum, are either (a) secured by legal charges over the Group's property, plant and equipment, properties under development and investment properties; or (b) guaranteed by C&D Real Estate or subsidiaries of the Company;
3. the Management has approached several banks in the PRC regarding the possibility and feasibility of granting new credit line or loan to the Group, however, given (a) the loan amount is substantial; (b) no guarantees/or pledged assets could be offered; and (c) the high gearing ratio of the Group as stated in the Group's 2020 Interim Results, the interest rates offered would be higher than that offered under the Jinchenglong Loan (i.e. 5.5% per annum).

Based on the above, we concluded that the consideration of the Jinchenglong Loan adopted by the Management is justifiable and the terms of which are fair and reasonable and in the interest of the Shareholders and the Company as a whole.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

4.3.4 Conclusion on the evaluation of the basis of consideration

Apart from reviewing the Jingchenglong Valuation and the Jingchenglong Land Valuation, we have also reviewed the unaudited financial statements of Xiamen Jingchenglong as at 31 October 2020 as provided by the Management. Based on such review, we noted the followings:

as per the unaudited consolidated financial statements of Xiamen Jingchenglong as at 31 October 2020, the unaudited consolidated net asset value of Xiamen Jingchenglong as at 31 October 2020 is approximately RMB934,000. Based on this, there is an increase in the consolidated net asset value of Xiamen Jingchenglong by approximately RMB934,000 when compared to the same as at 31 May 2020 (i.e. RMB0). After our enquiry and review on the breakdown of the said unaudited financial statements, we noted that such increase was mainly attributable to the combined effect of the recognition of construction cost of the Shanghai Land II and the increase in Jingchenglong Loan during the period from 31 May 2020 to 31 October 2020; and
the fair value of the Shanghai Land II as at 31 October 2020 (i.e. RMB1,178,000,000) represents a revaluation surplus of approximately RMB12,379,000 as compared to the aggregate amount of RMB1,165,621,000 of
1. the carrying amount of the Shanghai Land II as at 31 August 2020 (i.e. RMB1,144,846,000); and (b) and the construction in process during the period from 31 August 2020 to 31 October 2020 (unaudited) of approximately RMB20,775,000).

As a result, the fair value surplus as per above (i.e. RMB12,379,000) represents a premium on top of the difference between the unaudited consolidated net asset value as at 31 May 2020 and 31 October 2020 (i.e. RMB934,000).

Based on the above, despite the total consideration under the Xiamen Jingchenglong Equity Transfer Agreements was determined based on the Jingchenglong Valuation, we understand that the Directors had considered (i) the fair value of the Shanghai Land II as appraised by the Property Valuer which is a fair value surplus as compared to the original acquisition cost; (ii) there is no material change on the net asset value of Xiamen Jingchenglong as at 31 October 2020 as compared to that of 31 May 2020; and (iii) the reasons and benefits as described in the sub-section headed ''Reasons and benefits of entering into the Equity Transfer Agreements'' of this letter, we concur with the Directors that the determination of the consideration under the Xiamen Jingchenglong Equity Transfer Agreements is fair and reasonable and is in the interest of the Company and the Shareholders as a whole.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

5. Financial effects of the transactions contemplated under the Equity Transfer Agreements

With effect from the completion of the transactions contemplated under the Equity Transfer Agreements, Yi Yue and Xiamen Zhaoyirong will hold 95% and 5% equity interest in each of Chengdu Zhaoxinlin, Xiamen Huilong and Xiamen Jingchenglong, respectively. Accordingly, each of Chengdu Zhaoxinlin, Xiamen Huilong and Xiamen Jingchenglong will become an indirect wholly owned subsidiary of the Company and each of their financial results will be consolidated into the consolidated financial statements of the Company.

(a) Earnings

The construction work of each of the Chengdu Land, the Shangahi Land I and Shanghai Land II is not expected to be completed immediately following completion of the Transactions. Accordingly, the Chengdu Acquisition, Huilong Acquisition, Jingchenglong Acquisition would not immediately contribute turnover or profit to the Group upon Completion. As stated in the Letter, the construction works of the Chengdu Land, the Shangahi Land I and Shanghai Land II are scheduled to be completed before 2023. It is expected that once the said construction works have been completed, it would provide the Group with stable income in the long term.

(b) Net asset value

Set out in the Appendix III of the Circular is the unaudited pro forma statement of assets and liabilities of the Enlarged Group which illustrates the aggregate financial effects of the Chengdu Acquisition, the Huilong Acquisition and the Jinchenglong Acquisition assuming completion of the Transactions had taken place on 31 August 2020. Based on the unaudited pro forma financial information of the Enlarged Group, the total assets of the Group would increase from approximately RMB139,146,155,000 to approximately RMB140,578,458,000, and the liabilities of the Group would increase from approximately RMB121,280,692,000 to approximately RMB122,791,465,000. As a result, the net asset value of the Group would decrease by approximately RMB98,470,000.

RECOMMENDATION

Having taken into consideration the factors and reasons as stated above, we are of the opinion that the terms of the Equity Transfer Agreements are (i) in the ordinary and usual course of business of the Group; (ii) on normal commercial terms; (iii) fair and reasonable; and (iv) in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Accordingly, we recommend the Independent Board Committee to recommend the Independent Shareholders, to vote in favour of the resolution to be proposed at the EGM to approve the Transactions and we recommend the Independent Shareholders to vote in favour of the resolutions in this regard.

Yours faithfully	Yours faithfully
For and on behalf of	For and on behalf of
Euto Capital Partners Limited	Euto Capital Partners Limited
Felix Huen	Manfred Shiu
Assistant Director	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.

- 82 -

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP
	AND THE TARGET COMPANIES

1. FINANCIAL INFORMATION OF THE GROUP

Financial information of the Group for each of the three financial years ended 31 December 2019 and the six months ended 30 June 2020 are disclosed in the following documents which have been published on the websites of the Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.cndintl.com):

. annual report of the Company for the year ended 31 December 2017 published on 20 April 2018 (pages 84 to 179) and available at: https://www1.hkexnews.hk/listedco/ listconews/sehk/2018/0420/ltn20180420969.pdf

. annual report of the Company for the year ended 31 December 2018 published on 18 April 2019 (pages 110 to 239) and available at: https://www1.hkexnews.hk/listedco/ listconews/sehk/2019/0418/ltn20190418584.pdf

. annual report of the Company for the year ended 31 December 2019 published on 8 April 2020 (pages 111 to 238) and available at: https://www1.hkexnews.hk/listedco/ listconews/sehk/2020/0408/2020040800558.pdf

. interim report of the Company for the six months ended 30 June 2020 published on 14 September 2020 (pages 3 to 35) and available at: https://www1.hkexnews.hk/ listedco/listconews/sehk/2020/0914/2020091400499.pdf

2. STATEMENT OF INDEBTEDNESS Borrowings - Secured

At the close of business on 31 October 2020, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Enlarged Group had guaranteed and secured interest-bearing bank borrowings of approximately RMB16,237,141,000. Among the guaranteed and secured interest-bearing bank borrowings of the Enlarged Group, approximately RMB300,000,000 was secured by investment property and approximately RMB15,937,141,000 was secured by property under development.

Borrowings - Unsecured

At the close of business on 31 October 2020, the Enlarged Group had unsecured and guaranteed interest-bearing bank borrowings of approximately RMB9,943,765,000, unsecured and unguaranteed amounts due to non-controlling shareholders of the Enlarged Group amounting to approximately RMB4,782,085,000, unsecured and unguaranteed interest-bearing loan from the intermediate holding company of approximately RMB36,394,020,000, and unsecured lease liabilities of approximately RMB118,953,000.

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APPENDIX I	FINANCIAL INFORMATION OF THE GROUP
	AND THE TARGET COMPANIES

Receipts Under Securitisation Agreements

At the close of business on 31 October 2020, the Enlarged Group had receipts under securitisation arrangements of approximately RMB2,048,596,000, which collateralised by certain future trade receivables for the remaining payments of sales of properties and the remaining payments of property management fees.

Financial Guarantee Contracts

At the close of business on 31 October 2020, the Enlarged Group has provided guarantees to banks and financial institutions for mortgage facilities granted to purchasers of the Enlarged Group's properties amounting to approximately RMB36,778,398,000. Such guarantees are provided to secure obligations of those purchasers for repayments, the guarantee period would be started from the date of grant of the mortgage and terminated upon the earlier of (i) issuance of the real estate ownership certificate which will generally be available within an average period of two to three years upon the completion of guarantee registration; or (ii) the satisfaction of mortgaged loan by the purchasers of properties.

Capital Commitments

At the close of business on 31 October 2020, the Enlarged Group had capital commitments, which were contracted but not provided for, in respect of property, plant and equipment, properties under development and proposed development projects of approximately RMB5,770,000, RMB36,975,510,000 and RMB2,498,900,000 respectively.

Pledged Assets

As at 31 October 2020, bank borrowings are effectively secured by the underlying assets that consist of certain of the Enlarged Group's property, investment property with fair value of approximately RMB628,000,000 and properties under development for sale with a carrying amount of approximately RMB33,165,423,000.

Contingent Liabilities

As at the close of business on 31 October 2020, the Enlarged Group did not have any significant contingent liabilities.

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APPENDIX I	FINANCIAL INFORMATION OF THE GROUP
	AND THE TARGET COMPANIES

Disclaimer

Save as aforesaid in this section of the circular and apart from enlarged intra-group liabilities and normal trade payables in the ordinary course of business, as at the close of business on 31 October 2020, the Enlarged Group did not have any other debt securities issued and outstanding, or authorized or otherwise created but unissued, loans or any term loans (secured, unsecured, guaranteed or otherwise), any other borrowings or indebtedness in the nature of borrowing including bank overdrafts and any liabilities under acceptances (other than normal trade bills) or other similar indebtedness, acceptance credits, debentures, mortgages, charges, finance lease or hire purchase commitments, guarantees or other material contingent liabilities.

3. WORKING CAPITAL SUFFICIENCY

The Directors are of the opinion that, taking into account the financial resources and banking facilities available to the Enlarged Group, the Enlarged Group will have sufficient working capital to satisfy its present requirements for the next 12 months from the date of this circular in the absence of unforeseen circumstances.

4. FINANCIAL INFORMATION OF CHENGDU ZHAOXINLIN

The financial information of Chengdu Zhaoxinlin is presented in RMB, the currency of its primary economic environment in which Chengdu Zhaoxinlin operates (i.e. its functional currency). The accountants' report on Chengdu Zhaoxinlin as prepared by the Auditors has been set out in Appendix IIA in this circular.

Industry Analysis

The COVID-19 pandemic wreaking havoc across the globe and the intensifying disputes among major economies in the first half of 2020 have brought greater uncertainties to the economic outlook. Notwithstanding the strict prevention and control measures implemented by the PRC government to contain the domestic outbreak, Gross Domestic Product of the PRC still showed negative growth for the first time in the first quarter of 2020 before work and production began to resume in an orderly fashion in the second quarter of 2020. In order to address the impact of the pandemic, the PRC government has adopted the loose monetary policy and more proactive fiscal policy. Local governments have also relaxed their policies on purchase restrictions and price limitations. Demand in the real estate industry in the PRC suppressed by the pandemic in the first quarter of 2020 is gradually released, which showed signs of a turnaround in the second quarter of 2020.

It is expected that demand in the real estate market in the PRC will surge in the second half of 2020 under the overall direction of ''houses are for living in, not for speculation (房住不炒)''. Following the further resumption of residential functions, the competitiveness of real estate developers will be centered on product upgrades and quality control of their properties under development.

- I-3-

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP
	AND THE TARGET COMPANIES

Business Review

Chengdu Zhaoxinlin was established in the PRC with limited liability on 8 April 2020, the Chengdu Land is the major asset held by Chengdu Zhaoxinlin.

On 2 April 2020, C&D Chengdu entered into the transaction confirmation letter with Chengdu Planning Bureau and Chengdu City Public Resources Exchange Service Centre* (成都市公共資源交易服務中心), pursuant to which C&D Chengdu acquired the Chengdu Land at a total consideration of RMB4,682,000,000 with provision to the government of the PRC by way of gratuitous construction of residential housing for a gross floor area of 16,600 sq.m.. On 17 April 2020, Chengdu Zhaoxinlin entered into the supplemental agreement to the land use rights grant contract with the Chengdu Planning Bureau, pursuant to which the land use rights of the Chengdu Land was transferred to Chengdu Zhaoxinlin. On 18 May 2020 and 17 July 2020, Chengdu Zhaoxinlin paid RMB2,340,898,659 and RMB936,359,463.6, respectively to Chengdu Planning Bureau for the payment of the consideration of the Chengdu Land. The remaining consideration has been paid by Chengdu Zhaoxinlin on 19 October 2020.

Administrative Expenses

The administrative expenses of Chengdu Zhaoxinlin for the period from 8 April 2020 (date of establishment) to 31 August 2020 were approximately RMB2,382,000. The administrative expenses mainly consisted of advertising fees before the sale of the realty.

Other Income

The other income of Chengdu Zhaoxinlin for the period from 8 April 2020 (date of establishment) to 31 August 2020 were approximately RMB34,000. The other income mainly consisted of bank interest income.

- I-4-

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP
	AND THE TARGET COMPANIES

Finance Costs

The finance costs for the period from 8 April 2020 (date of establishment) to 31 August 2020 was approximately RMB36,797,000, mainly consisting of interest expenses. Chengdu Zhaoxinlin's loans mainly consist of interest-bearing loans from its intermediate holding company.

Income Tax Credit

The income tax credit for the period from 8 April 2020 (date of establishment) to 31 August 2020 were approximately RMB9,786,000 as a result of the recognition of deferred income tax assets.

Capital Structure

As at 31 August 2020, the registered and paid-up capital of Chengdu Zhaoxinlin was RMB50,000,000.

Financial Resources

As at 31 August 2020, Chengdu Zhaoxinlin's financing mainly relied on interest bearing loan from an intermediate holding company. No particular trend of seasonality was observed from Chengdu Zhaoxinlin's borrowing requirements from 8 April 2020 (date of establishment) to 31 August 2020.

Net Gearing Ratio

The net gearing ratio is calculated by dividing the net debt with equity attributable to owners of the parent. The net debt is defined as the difference between (i) amount due to an intermediate holding company and (ii) bank balances.

As at 31 August 2020, Chengdu Zhaoxinlin had amount due to an intermediate holding company of approximately RMB3,547,040,000.

As at 31 August 2020, Chengdu Zhaoxinlin's net gearing ratio was 17,182.38%.

Currently, Chengdu Zhaoxinlin's financing mainly relies on interest-bearing loan from shareholders.

Employees and Remuneration Policies

Chengdu Zhaoxinlin had no staff members as at 31 August 2020. Staff costs for the period from 8 April 2020 (date of establishment) to 31 August 2020 were RMBNil.

Chengdu Zhaoxinlin's remuneration policy is in line with the prevailing market practice on performance of individual staff and Chengdu Zhaoxinlin operates a bonus plan to reward the staff on a performance related basis.

- I-5-

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP
	AND THE TARGET COMPANIES

Foreign Exchange Risk

Chengdu Zhaoxinlin's operations are located in the PRC and its assets, liabilities and transactions are primarily denominated in RMB. Therefore, there is no significant foreign exchange risk. Chengdu Zhaoxinlin does not have any foreign exchange hedging arrangements.

Contingent Liabilities

Chengdu Zhaoxinlin had no significant contingent liabilities as at 31 August 2020.

Capital Commitments

As at 31 August 2020, capital commitments of Chengdu Zhaoxinlin amounted to RMB890,544,000.

5. FINANCIAL INFORMATION OF XIAMEN HUILONG

The financial information of Xiamen Huilong is presented in RMB, the currency of its primary economic environment in which Xiamen Huilong operates (i.e. its functional currency). The accountants' report on Xiamen Huilong as prepared by the Auditors has been set out in Appendix IIB in this circular.

Industry Analysis

- I-6-

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP
	AND THE TARGET COMPANIES

Business Review

Xiamen Huilong was established in the PRC with limited liability on 23 September 2019, the Shanghai Land I is the major asset held by Xiamen Huilong.

On 9 May 2020, Xiamen Huilong entered into the land use rights grant contract with Shanghai Baoshan Planning Bureau, pursuant to which Xiamen Huilong acquired the Shanghai Land I at a total consideration of RMB2,439,100,000. On 9 May 2020 and 9 June 2020, Xiamen Huilong paid RMB487,820,000 and RMB1,951,280,000, respectively to Shanghai Baoshan Planning Bureau for the payment of the consideration of the Shanghai Land I. On 19 June 2020, Xiamen Huilong transferred the land use rights of the Shanghai Land I to its wholly-ownedsubsidiary, Shanghai Zhaoren Property Development Company Limited* (上海兆仁房地產開發有限公司).

Administrative Expenses

The administrative expenses of Xiamen Huilong for the period from 23 September 2019 (date of establishment) to 31 December 2019 were approximately RMB1,000. The administrative expenses mainly consisted of bank handling fee.

The administrative expenses of Xiamen Huilong for the period from 1 January 2020 to 31 August 2020 were approximately RMB1,608,000. The administrative expenses mainly consisted of employee's remuneration and the stamp duty fees.

Other Income

The other income of Xiamen Huilong for the period from 23 September 2019 (date of establishment) to 31 December 2019 were approximately RMB1,689,000. The other income mainly consisted of bank interest income.

The other income of Xiamen Huilong for the period from 1 January 2020 to 31 August 2020 were approximately RMB2,492,000. The other income mainly consisted of bank interest income.

- I-7-

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP
	AND THE TARGET COMPANIES

Finance Cost

The finance costs for the period from 1 January 2020 to 31 August 2020 was approximately RMB48,709,000, mainly consisting of interest expenses. Xiamen Huilong's loans mainly consist of interest-bearing loans from an immediate holding company.

Income Tax Expense/Credit

The income tax expense for the period from 23 September 2019 (date of establishment) to 31 December 2019 were approximately RMB422,000 as a result of the tax effect of interest income.

The income tax credit for the period from 1 January 2020 to 31 August 2020 were approximately RMB11,956,000 as a result of the recognition of deferred income tax assets.

Capital Structure

As at 31 August 2020, the registered and paid-up capital of Xiamen Huilong were RMB1,000,000 and RMBNil respectively.

Financial Resources

As at 31 August 2020, Xiamen Huilong's financing mainly relied on the amount due to an immediate holding company. No particular trend of seasonality was observed from Xiamen Huilong's borrowing requirements from 1 January 2020 to 31 August 2020.

Net Gearing Ratio

As at 31 August 2020, Xiamen Huilong had amount due to an immediate holding company of approximately RMB2,579,881,000.

As at 31 August 2020, Xiamen Huilong's net gearing ratio was -7,213.47%.

Currently, Xiamen Huilong's financing mainly relies on the amount due to an immediate holding company.

Employees and Remuneration Policies

Xiamen Huilong had no staff and 7 staff members as at 31 December 2019 and 31 August 2020 respectively. Staff costs for the period from 23 September 2019 (date of establishment) to 31 December 2019 and for the period from 1 January 2020 to 31 August 2020 were RMBNil and RMB879,000 respectively.

- I-8-

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP
	AND THE TARGET COMPANIES

Xiamen Huilong's remuneration policy is in line with the prevailing market practice on performance of individual staff and Xiamen Huilong operates a bonus plan to reward the staff on a performance related basis.

Foreign Exchange Risk

Xiamen Huilong's operations are located in the PRC and its assets, liabilities and transactions are primarily denominated in RMB. Therefore, there is no significant foreign exchange risk. Xiamen Huilong does not have any foreign exchange hedging arrangements.

Contingent Liabilities

Xiamen Huilong had no significant contingent liabilities as at 31 August 2020.

Capital Commitments

As at 31 August 2020, capital commitments of Xiamen Huilong amounted to RMB479,596,000.

6. FINANCIAL INFORMATION OF XIAMEN JINGCHENGLONG

The financial information of Xiamen Jingchenglong is presented in RMB, the currency of its primary economic environment in which Xiamen Jingchenglong operates (i.e. its functional currency). The accountants' report on Xiamen Jingchenglong as prepared by the Auditors has been set out in Appendix IIC in this circular.

Industry Analysis

- I-9-

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP
	AND THE TARGET COMPANIES

Business Review

Xiamen Jingchenglong was established in the PRC with limited liability on 31 March 2020, the Shanghai Land II is the major asset held by Xiamen Jingchenglong.

On 15 May 2020, Xiamen Jingchenglong entered into the land use rights grant contract with Shanghai Minhang Planning Bureau, pursuant to which Xiamen Jingchenglong acquired the Shanghai Land II at a total consideration of RMB1,093,300,000. On 19 May 2020 and 4 June 2020, Xiamen Jingchenglong paid RMB218,660,000 and RMB874,640,000, respectively to Shanghai Minhang Planning Bureau for the payment of the consideration of the Shanghai Land II. On 1 July 2020, Xiamen Jingchenglong transferred the land use rights of the Shanghai Land II to its wholly-ownedsubsidiary, Shanghai Zhaomin Property Development Company Limited* (上海兆閔房地產開發有限公司).

Administrative Expenses

The administrative expenses of Xiamen Jingchenglong for the period from 31 March 2020 (date of establishment) to 31 August 2020 were approximately RMB570,000. The administrative expenses mainly consisted of the stamp duty fees.

Other Income

The other income of Xiamen Jingchenglong for the period from 31 March 2020 (date of establishment) to 31 August 2020 were approximately RMB1,856,000. The other income mainly consisted of bank interest income.

Finance Cost

The finance costs for the period from 31 March 2020 (date of establishment) to 31 August 2020 was approximately RMB18,035,000, mainly consisting of interest expenses. Xiamen Jingchenglong's loans mainly consist of interest-bearing loans from an immediate holding company.

- I-10-

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP
	AND THE TARGET COMPANIES

Income Tax Credit

The income tax credit for the period from 31 March 2020 (date of establishment) to 31 August 2020 were approximately RMB4,187,000 as a result of the recognition of deferred income tax assets.

Capital Structure

As at 31 August 2020, the registered and paid-up capital of Xiamen Jingchenglong was RMB1,000,000 and RMBNil respectively.

Financial Resources

As at 31 August 2020, Xiamen Jingchenglong's financing mainly relied on the amount due to an immediate holding company. No particular trend of seasonality was observed from Xiamen Jingchenglong's borrowing requirements from 31 March 2020 (date of establishment) to 31 August 2020.

Net Gearing Ratio

As at 31 August 2020, Xiamen Jingchenglong had amount due to an immediate holding company of approximately RMB1,153,452,000.

As at 31 August 2020, Xiamen Jingchenglong's net gearing ratio was -9,179.96%.

Currently, Xiamen Jingchenglong's financing mainly relies on the amount due to an immediate holding company.

Employees and Remuneration Policies

Xiamen Jingchenglong had no staff member as at 31 August 2020. Staff costs for the period from 31 March 2020 (date of establishment) to 31 August 2020 were RMBNil.

Xiamen Jingchenglong's remuneration policy is in line with the prevailing market practice on performance of individual staff and Xiamen Jingchenglong operates a bonus plan to reward the staff on a performance related basis.

Foreign Exchange Risk

Xiamen Jingchenglong's operations are located in the PRC and its assets, liabilities and transactions are primarily denominated in RMB. Therefore, there is no significant foreign exchange risk. Xiamen Jingchenglong does not have any foreign exchange hedging arrangements.

- I-11-

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP
	AND THE TARGET COMPANIES

Contingent Liabilities

Xiamen Jingchenglong had no significant contingent liabilities as at 31 August 2020.

Capital Commitments

As at 31 August 2020, capital commitments of Xiamen Jingchengling amounted to RMB264,952,000.

7. FINANCIAL AND TRADING PROSPECT OF THE ENLARGED GROUP

During the Period, there was no significant impact on the Company's overall operations and financial performance by the COVID-19 pandemic, save and except the construction and sales progress of individual projects were delayed for a short period of time. With the gradual control of the epidemic, the Company's operations resumed normal in every aspect; and the Company actively acquired lands and carried out sales projects throughout the PRC.

In the second half of 2020, with the focus on the idea of ''continuously expanding business scale, orderly improving operational efficiency, balancing the quality of growth, and improving and optimizing service quality'', the Company will continue to strengthen the planning and coordination of real estate development and real estate industrial chain investment services.

Enhancing the Enlarged Group's core competitiveness of the real estate development business

The Enlarged Group keeps abreast of the policy directions and market information to each of the key regional cities. By leveraging on the advantage of product development, project operation and brand promotion, the Enlarged Group will keep acquiring quality projects and will continuously expand the land bank so as to drive the growth of coordinated model of ''product + service''.

Improving the efficiency and quality of real estate industry chain services
1. Property management business: focusing on the concept of ''Smart community living'', the Enlarged Group will improve basic property services, integrate community and value-added collaborative services so as to continuously improve service quality, increase efforts to expand the market, and expand management area and business scale.
2. Commercial assets management business: the Enlarged Group will actively carry out a number of activities to increase the popularity of commercial assets, so as to maintain the ability to create cash flow and improve the effectiveness of commercial assets management business.

- I-12-

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP
	AND THE TARGET COMPANIES

3. Project operation and management (entrusted construction services): the Enlarged Group will optimise service processes of entrusted construction projects with adherence of high-efficiency and high-quality services, and will actively expand projects to boost revenue scale and level of profit.
Promoting the integration of emerging industries with principal businesses to create synergy
The Enlarged Group will continue to actively develop business in emerging

industries such as elderly and healthcare service and promotes the integration of emerging industries with other principal businesses, so as to facilitate the synergic development and grow together with creation of new growing points.

(IV) Strengthen interaction with the capital market and actively promoting corporate value

In the second half of 2020, the Enlarged Group will continue to actively communicate and interact with investors, and maintain investors' confidence in the Enlarged Group's growth in business development and core competitiveness so as to improve the capital market image with the corporate brand of ''C&D''.

The Enlarged Group shall benefit from the acquisition of the Lands for the following reasons: (i) each of the Lands has a prime position with good development prospect and is expected to contribute positively to the overall performance of the Enlarged Group; (ii) by acquiring the Lands the Enlarged Group could spread its brand further and enhance its influence in the local markets; and (iii) the acquisition of the Lands represents further active measures by the Enlarged Group to diversify and expand its land reserve. In summary, the Enlarged Group will actively exploit the advantages and opportunities brought by the acquisition of the Lands and constantly improve its competitiveness to enhance the continuing value creation process for the Shareholders.

- I-13-

APPENDIX IIA	ACCOUNTANTS' REPORT OF CHENGDU ZHAOXINLIN

The following is the text of a report prepared for the sole purpose of inclusion in this circular, received from the independent reporting accountants, Grant Thornton Hong Kong Limited, Certified Public Accountants, Hong Kong.

ACCOUNTANTS' REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE DIRECTORS OF C&D INTERNATIONAL INVESTMENT GROUP LIMITED

Introduction

We report on the historical financial information of Chengdu Zhaoxinlin Real Estate Development Company Limited (''Chengdu Zhaoxinlin'') set out on pages IIA-4 to IIA-22, which comprises the statement of financial position of Chengdu Zhaoxinlin as at 31 August 2020, and the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the period from 8 April 2020 (date of establishment of Chengdu Zhaoxinlin) to 31 August 2020 (the ''Relevant Period'') and a summary of significant accounting policies and other explanatory information (together, the ''Historical Financial Information''). The Historical Financial Information set out on pages IIA-4 to IIA-22 forms an integral part of this report, which has been prepared for inclusion in the circular of C&D International Investment Group Limited (the ''Company'') dated 23 December 2020 (the ''Circular'') in connection with the proposed acquisition of 100% equity interests in Chengdu Zhaoxinlin by the Company.

Directors' Responsibility for the Historical Financial Information

The directors of Chengdu Zhaoxinlin are responsible for the preparation of the Historical Financial Information that gives a true and fair view in accordance with the basis of preparation and presentation set out in Note 2.1 to the Historical Financial Information and for such internal control as the directors of Chengdu Zhaoxinlin determine is necessary to enable the preparation of the Historical Financial Information that is free from material misstatement, whether due to fraud or error.

Reporting Accountants' Responsibility

Our responsibility is to express an opinion on the Historical Financial Information and to report our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 200 ''Accountants' Reports on Historical Financial Information in Investment Circulars'' issued by the Hong Kong Institute of Certified Public Accountants (''HKICPA''). This standard requires that we comply with ethical standards and plan and perform our work to obtain reasonable assurance about whether the Historical Financial Information is free from material misstatement.

- IIA-1-

APPENDIX IIA	ACCOUNTANTS' REPORT OF CHENGDU ZHAOXINLIN

Our work involved performing procedures to obtain evidence about the amounts and disclosures in the Historical Financial Information. The procedures selected depend on the reporting accountants' judgement, including the assessment of risks of material misstatement of the Historical Financial Information, whether due to fraud or error. In making those risk assessments, the reporting accountants consider internal control relevant to the entity's preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of preparation and presentation set out in Note 2.1 to the Historical Financial Information in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Our work also included evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the Historical Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the Historical Financial Information gives, for the purpose of the accountants' report, a true and fair view of Chengdu Zhaoxinlin's financial position as at 31 August 2020, and of its financial performance and cash flows for the Relevant Period in accordance with the basis of preparation and presentation set out in Note 2.1 to the Historical Financial Information.

Report on matters under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Adjustments

In preparing the Historical Financial Information, no adjustments to the Underlying Financial Statements as defined on IIA-4 have been made.

- IIA-2-

APPENDIX IIA	ACCOUNTANTS' REPORT OF CHENGDU ZHAOXINLIN

Dividends

We refer to Note 10 to the Historical Financial Information which states that no dividend has been paid by Chengdu Zhaoxinlin in respect of the Relevant Period.

Grant Thornton Hong Kong Limited

Certified Public Accountants

Level 12

28 Hennessy Road

Wanchai

Hong Kong

23 December 2020

Lin Ching Yee Daniel

Practising Certificate Number: P02771

- IIA-3-

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C&D International Investment Group Ltd. published this content on 22 December 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 January 2021 19:59:00 UTC

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Company Profile

C&D International Investment Group Limited is an investment holding company principally engaged in the business of property development. The Company operates its business through four segments. The Property Development segment is engaged in the construction and sales of residential units, commercial shops and car parking spaces. The Commercial Assets Management segment is involved in the leasing of commercial units, residential units and commercial shops. In addition, this segment provides rendering of building management services. The Entrusted Construction Services segment offers the rendering of management and construction services. The Smart Construction Services segment provides the rendering of smart construction services.

Sector

Real Estate Development & Operations

Calendar

2024-08-22 - Q2 2024 Earnings Release (Projected)

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Sell

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Mean consensus

BUY

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Last Close Price

17.03 CNY

Average target price

17.74 CNY

Spread / Average Target

+4.17%

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