Construction : UPDATE ON USE OF PROCEEDS AND SUPPLEMENTAL ANNOUNCEMENT TO 2019 ANNUAL REPORT

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CR Construction Group Holdings Limited

華 營 建 築 集 團 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1582)

UPDATE ON USE OF PROCEEDS AND

SUPPLEMENTAL ANNOUNCEMENT TO 2019 ANNUAL REPORT

References are made to the section headed ''Future Plans and Use of Proceeds'' of the prospectus of CR Construction Group Holdings Limited (the ''Company'', together with its subsidiaries, the ''Group'') dated 27 September 2019 (the ''Prospectus''), and the section headed ''Management Discussion and Analysis - Use of Proceeds'' in the 2019 annual report of the Company published on 28 April 2020 (the ''2019 Annual Report''). Unless otherwise defined, capitalized terms used herein shall have the same meanings as those defined in the Prospectus and the 2019 Annual Report, respectively.

The board (''Board'') of directors (the ''Directors'') of the Company would like to provide supplemental information to the 2019 Annual Report in relation to the use of listing proceeds from the listing (the ''Listing'') of the Company's securities on the Main Board of The Stock Exchange of Hong Kong Limited (the ''Stock Exchange'') on 16 October 2019 (the ''Listing Date'').

The net proceeds of the Listing (after deducting the underwriting fees and all related expenses in connection to the Listing) amounted to approximately HK$97.7 million (the ''Net Proceeds''). As at 31 December 2019, a total amount of approximately HK$1.6 million out of the Net Proceeds had been utilised by the Group according to the allocation set out in the Prospectus and the remaining balance of approximately HK$96.1 million of the Net Proceeds as at 31 December 2019 is expected to be fully utilised by the year ending 31 December 2021.

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In addition to the information disclosed in the section headed ''Management Discussion and Analysis - Use of Proceeds'' in the 2019 Annual Report, the Board would like to provide additional information pursuant to paragraph 11(8) of Appendix 16 to the Rules Governing the Listing of Securities on the Stock Exchange in relation to the use of Net Proceeds as follows:

			Planned use of	Actual use of
			proceeds from	proceeds from	Remaining
			the Listing	the Listing	Balance
	Planned use	Date to	Date to	as at	Expected timeline for
	of proceeds	31 December	31 December	31 December	utilising the unutilised
	in total	2019		2019	2019	net proceeds
	HK$'000	HK$'000	HK$'000	HK$'000
Financing the upfront	85,263		28,613		-	85,263	Expected to be fully
costs of potential									utilised on or before
new projects									31 December 2021
Strengthening	7,813		2,053		692	7,121	Expected to be fully
manpower									utilised on or before
									31 December 2020
Enhancing information	4,591		1,281		896	3,695	Expected to be fully
technology system									utilised on or before
									31 March 2021
	97,667		31,947		1,588	96,079

The net proceeds from the Listing Date to 30 June 2020 (the ''Relevant Period'') were utilised as follows:

			Planned use of	Actual use of
			proceeds from	proceeds from
			the Listing	the Listing	Remaining
	Planned use	Date to	Date to	Balance	Expected timeline for
	of proceeds	30 June	30 June	as at	utilising the unutilized
	in total	2020		2020	30 June 2020	net proceeds
	HK$'000	HK$'000	HK$'000	HK$'000
Financing the upfront	85,263		55,606		27,070	58,193	Expected to be fully
costs of potential									utilised on or before
new projects									31 December 2021
Strengthening	7,813		4,106		4,901	2,912	Expected to be fully
manpower									utilised on or before
									31 December 2020
Enhancing information	4,591		2,563		2,875	1,716	Expected to be fully
technology system									utilised on or before
									31 March 2021
	97,667		62,275		34,846	62,821

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The delay in utilisation of the remaining proceeds for upfront cost was due to the recent market climate and low number of successful tender applications for new residential projects during the relevant period. The application of the proceeds were subject to certain factors including but not limited to the actual development of the Group's business, industry and market conditions. As such, the Group will continue to consider new tender opportunities from time to time as and when appropriate. The Group expects to fully utilise the remaining proceeds to finance the upcoming newly awarded residential projects by the end of year 2021.

In addition, the Group utilised the proceeds regarding to strengthening manpower and enhancing information technology systems as planned and expect to fully utilise the relevant proceeds on or before 31 December 2020 and 31 March 2021, respectively.

The Board confirmed that there was no material change to the plan as to the use of Net Proceeds during the year ended 31 December 2019 and as at the date of this announcement according to the intentions set out in the Prospectus and it is considered that the revised expected timeline for the unutilised Net Proceeds will not have material adverse impact on operations of the Group. The supplementary information provided in this announcement does not affect any other information contained in the 2019 Annual Report and, save as disclosed above, the content of the 2019 Annual Report remains unchanged.

By order of the Board

CR Construction Group Holdings Limited

Guan Manyu

Chairman

Hong Kong, 19 August 2020

As at the date of this announcement, the Company has five executive directors, namely Mr. Guan Manyu, Mr. Li Kar Yin, Ms. Chu Ping, Mr. Law Ming Kin, Mr. Chan Tak Yiu; one non-executive director, namely Mr. Yang Haojiang; and three independent non-executive directors, namely The Honourable Tse Wai Chun Paul JP, Mr. Li Ka Fai David and Mr. Ho Man Yiu Ivan.

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