China Evergrande : DISCLOSEABLE AND CONNECTED TRANSACTION - FURTHER CAPITAL INCREASE TO HENGDA REAL ESTATE

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

CHINA EVERGRANDE GROUP

中 國 恒 大 集 團

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 3333)

DISCLOSEABLE AND CONNECTED TRANSACTION

FURTHER CAPITAL INCREASE TO HENGDA REAL ESTATE

Reference is made to the previous disclosures of the Company in relation to the First Round Capital Increase and the Second Round Capital Increase.

On 6 November 2017, Kailong Real Estate and Hengda Real Estate, both being subsidiaries of the Company, together with Mr. Hui Ka Yan, the controlling shareholder of the Company, entered into the Third Round Investment Agreements with the Third Round Investors, pursuant to which, the Third Round Investors have agreed to subscribe RMB60.0 billion for new capital in Hengda Real Estate based on a pre-capital increase consideration for Hengda Real Estate of RMB365.19 billion, representing approximately 14.11% of the enlarged equity of Hengda Real Estate. Upon completion of the Third Round Capital Increase, the Investors will have subscribed for new capital in Hengda Real Estate in an aggregated amount of RMB130.0 billion, in return for an aggregate of approximately 36.54% of the enlarged equity interest of Hengda Real Estate. Kailong Real Estate will be interested in approximately 63.46% of the equity interest in Hengda Real Estate and Hengda Real Estate will remain a subsidiary of the Group.

Under the terms of the Third Round Investment Agreements, Kailong Real Estate and Hengda Real Estate have undertaken to the Third Round Investors that the net profit of Hengda Real Estate after deducting the non-recurring gains and losses for the three financial years of 2018, 2019 and 2020 will not be less than RMB50.0 billion, RMB55.0 billion and RMB60.0 billion, respectively. The successful completion of the three rounds of capital increase demonstrates the confidence of the Investors on the future prospects of Hengda Real Estate.

Earlier this year, the Company commenced its strategic transition, which proposed to firmly implement changes to the Company's development strategy and model. In its development strategy, the Company will shift from pursuing ''scale'' to pursuing ''scale + profitability'' and in its development model, the Company will change from the past high-debt, high-leverage, high-turnover and low-cost (''three-high and one-low'') development model to ''three-low and one high'' model,

i.e. low-debt, low-leverage, low-cost and high-turnover model. Benefiting from the three rounds of capital increase, the net debt ratio of Hengda Real Estate will be reduced significantly and its capital structure will be further improved. The capital and financial costs are expected to continue to decline. At the same time, the Company will continue to strengthen internal management and increase operation efficiencies to further reduce administrative and sales cost ratios, and continuously improve product quality and value, to deliver high quality growth, which will lay the foundation for accomplishing the performance undertaking and the continuous development of the Company.

In accordance with Chapter 14 of the Listing Rules, the Third Round Capital Increase constitutes a deemed disposal of the Company. As the applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the Third Round Capital Increase is more than 5% but less than 25%, the Third Round Capital Increase constitutes a discloseable transaction for the Company. As Mr. Hui Ka Yan, the controlling shareholder and a connected person of the Company, may replace Kailong Real Estate to repurchase the investment of the Investors under the terms of the Third Round Investment Agreements, the Third Round Capital Increase will constitute a connected transaction for the Company. The Third Round Capital Increase will be subject to the reporting, announcement and Independent Shareholders' approval requirements in accordance with Chapter 14A of the Listing Rules.

The Independent Board Committee comprising all the independent non-executive Directors has been established by the Company to advise the Independent Shareholders on the terms of the repurchase provisions under the Third Round Capital Increase. Gram Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

A circular containing, among other things, further details about the Third Round Capital Increase, the recommendation from the Independent Board Committee on the Third Round Capital Increase, a letter of advice from Gram Capital to the Independent Board Committee and the Independent Shareholders in respect of the repurchase provisions under the Third Round Capital Increase, and the notice convening the extraordinary general meeting to approve the Third Round Capital Increase will be despatched to the Shareholders on or before 8 November 2017.

The extraordinary general meeting of the Company for approving the Third Round Capital Increase is expected to be held at Salon 5, JW Ballroom, 3/F, JW Marriott Hotel Hong Kong, Pacific Place,

88 Queensway, Hong Kong on Thursday, 23 November 2017 at 10: 00 a.m. For determining the entitlement to attend and vote at the extraordinary general meeting, the register of members of the Company will be closed from Monday, 20 November 2017 to Thursday, 23 November 2017, both days inclusive, during which period no transfer of shares will be registered. In order to be eligible to attend and vote at the extraordinary general meeting, all transfer documents accompanied by the relevant share certificates must be lodged with the Company's branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Shops 1712 - 1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, for registration not later than 4: 30 p.m. on Friday, 17 November 2017.

INTRODUCTION

Reference is made to the disclosures of the Company in relation to the First Round Capital Increase and the Second Round Capital Increase. Save as otherwise amended as disclosed in this announcement, all other previous disclosures by the Company in relation to the First Round Capital Increase and the Second Round Capital Increase remain unchanged.

THE THIRD ROUND CAPITAL INCREASE

(1) Shandong Highway Group Investment Agreement

Date

6 November 2017

Parties to Shandong Highway Group Investment Agreement

1. Kailong Real Estate;

2. Hengda Real Estate;

3. Mr. Hui Ka Yan; and

4. 山東高速投資控股有限公司 (Shandong Highway Investment Group Co., Ltd.), 山東高速地產 集團有限公司 (Shandong Highway Property Group Co., Ltd.) and 濟南暢贏金程股權投資合 夥企業(有限合夥) (Jinan Changying Jincheng Equity Investment LLP) (together with 山東鐵 路發展基金有限公司 (Shandong Railway Development Fund Co., Ltd.), an investor in the

First Round Capital Increase, the ''Shandong Highway Companies'').

Shandong Highway Investment Group Co., Ltd. and Shandong Highway Property Group Co., Ltd. are subsidiaries of Shandong Highway Group, and Jinan Changying Jincheng Equity Investment LLP is an affiliate of Shandong Highway Group.

In accordance with the disclosure in its website, Shandong Highway Group is principally engaged in the investment, construction and operation of highways, bridges, railways, airports and the provision of logistics services. It is a large-scale state-owned conglomerate group. To the best knowledge of the Directors, having made all reasonable enquiries, the Shandong Highway Companies and their respective ultimate beneficial owners are independent of and not connected with the Company or its connected persons.

Amount of capital to be contributed under the Shandong Highway Group Investment Agreement

Pursuant to the terms of the Shandong Highway Group Investment Agreement, the Shandong Highway Companies involved in the Shandong Highway Group Investment Agreement will subscribe for new capital in Hengda Real Estate for RMB20,000,000,000, which together with the First Round Capital Increase, the Shandong Highway Companies will invest in aggregate RMB23,000,000,000 into the capital of Hengda Real Estate, representing approximately 5.6652% of the enlarged equity interest of Hengda Real Estate upon completion of the capital increase.

(2) Suning Electrical Appliances Group Investment Agreement

Date

6 November 2017

Parties to the Suning Electrical Appliances Group Investment Agreement

1. Kailong Real Estate;

2. Hengda Real Estate;

3. Mr. Hui Ka Yan; and

4. 南京潤恒企業管理有限公司 (Nanjing Runheng Enterprise Management Co., Ltd.).

Nanjing Runheng is a wholly-owned subsidiary of Suning Electrical Appliances Group Co., Ltd., a subsidiary of Suning Holdings Group. Suning Holdings Group is a diversified business holding company, with businesses covering retail, real estate, hotels, property management and other industries. To the best knowledge of the Directors, having made all reasonable enquiries, Nanjing Runheng and its ultimate beneficial owners are independent of and not connected with the Company or its connected persons.

Amount of capital to be contributed under the Suning Electrical Appliances Group Investment Agreement

Pursuant to the terms of the Suning Electrical Appliances Group Investment Agreement, Nanjing Runheng will subscribe for new capital in Hengda Real Estate for RMB20,000,000,000, representing approximately 4.7038% of the enlarged equity interest of Hengda Real Estate upon completion of the capital increase.