Guangdong Investment : CONTINUING CONNECTED TRANSACTIONS - FRAMEWORK AGREEMENT IN RELATION TO PROPERTY MANAGEMENT SERVICES

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.

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00270)

CONTINUING CONNECTED TRANSACTIONS

FRAMEWORK AGREEMENT IN RELATION TO

PROPERTY MANAGEMENT SERVICES

On 10 May 2021, the Company and Yuehai Property Management (a direct wholly-owned subsidiary of Guangdong Holdings) entered into the Framework Agreement in relation to the provision of Property Management Services by the Yuehai Property Management Group to the Group.

The Caps for the transactions contemplated under the Framework Agreement for the period from 10 May 2021 to 31 December 2021, the year ending 31 December 2022, the year ending 31 December 2023, and the period from 1 January 2024 to 9 May 2024 are RMB18,000,000 (approximately HK$21,607,000), RMB120,000,000

(approximately HK$144,048,000), RMB130,000,000 (approximately HK$156,052,000) and RMB70,000,000 (approximately HK$84,028,000), respectively.

Guangdong Holdings (being the ultimate controlling shareholder of the Company) holds approximately 56.49% of the total number of shares of the Company in issue and therefore, is a connected person of the Company. Yuehai Property Management (being a direct wholly-owned subsidiary of Guangdong Holdings) and its subsidiaries (being subsidiaries of Guangdong Holdings) are associates of Guangdong Holdings, and hence connected persons of the Company pursuant to the Listing Rules. Accordingly, the transactions contemplated under the Framework Agreement between the Group and the Yuehai Property Management Group constitute continuing connected transactions of the Company under the Listing Rules.

As all applicable percentage ratios in respect of the Framework Agreement calculated pursuant to the Listing Rules exceed 0.1% but all of them are less than 5%, the Framework Agreement is therefore subject to the reporting, annual review and announcement requirements under the Listing Rules, but is exempt from the independent shareholders' approval requirement under Rule 14A.76(2) of the Listing Rules.

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THE FRAMEWORK AGREEMENT

On 10 May 2021, the Company and Yuehai Property Management entered into the Framework Agreement in relation to the provision of Property Management Services by the Yuehai Property Management Group to the Group.

A summary of the salient terms of the Framework Agreement is set out below:-

Date:	10 May 2021
Parties:	(1) The Company; and
	(2) Yuehai Property Management
Term:	10 May 2021 to 9 May 2024 (both days inclusive)
Scope of services:	In respect of the Group's properties (including property projects
	under development) such as shopping malls, office buildings and
	other properties from time to time, the Yuehai Property
	Management Group will provide the following property
	management services (the "Property Management Services")
	to the Group, including but not limited to:
	(i)	maintenance of properties and the relevant facilities and
		equipment, security, cleaning and gardening services,
		maintenance of public area, car parking lot management,
		and other related services;
	(ii)	preliminary planning and design consulting services
		(including reviewing drawings and services in relation to
		tendering), at the initial stages of property projects;
	(iii)	on-site consulting services and construction site
		management services during the construction of property
		projects;
	(iv)	inspection of the property units and public areas of the
		property project at the delivery stage of the property
		projects;
	(v)	providing assistance to the Group for the transfer and
		delivery of the relevant properties to property owners;
	(vi)	providing services in assisting the sales of property units
		and providing daily maintenance and related services, after
		completion of construction of the property projects; and
	(vii)	management services for the unsold properties and
		conference facilities, concierge services, and other
		temporary supplementary management services.

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Pricing and other The parties to the Framework Agreement have agreed as follows: terms:

1. the member(s) of the Group and the member(s) of the Yuehai Property Management Group may enter into Specific Agreements (for the provision of Property Management Services) which will set out the detailed terms for the relevant transactions contemplated under the Framework Agreement in the ordinary and usual course of business, after arm's length negotiation and on normal commercial terms or better;
2. the Specific Agreements shall conform with the principles and provisions set out in the Framework Agreement;
3. the terms and conditions of the Specific Agreements shall be no less favourable than those being offered by the Independent Third Parties to the Group for comparable services;
4. the fees for the provision of different Property Management Services by the Yuehai Property Management Group to the Group shall be based on the type and gross floor area of the relevant properties and shall be determined after arm's length negotiations, taking into account the size, location and conditions of the properties, the nature and standard of the services required and the anticipated operational costs (such as labour costs, material costs and administrative costs), and with reference to the fees for the provision of similar services to similar types of property under the relevant agreements entered into by the Group and Independent Third Parties or, if no such agreements, the standard prices promulgated by the relevant government authorities for similar services or the market rates of similar services for similar types of property (with reference to the relevant rates charged by at least two service providers who are Independent Third Parties); and
5. the fees for the Property Management Services shall be paid by the Group to the Yuehai Property Management Group on monthly, quarterly, half-yearly or yearly basis, in accordance with the relevant usual commercial practices and on fair and reasonable terms.

Caps and basis of determination

Historical transaction amounts

The table below summarises the historical amount of the service fees paid by the Group (including the fees paid by the Huiyang Yuehai group of companies which were acquired by the Group from the Guangdong Holdings Group in 2020 (see the joint announcement of the Company and GDL dated 29 October 2020 for details) before they

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became subsidiaries of the Company), to the Yuehai Property Management Group (including the fees paid to (i) the Teem Management Co group of companies which were disposed of by the Group to Yuehai Property Management in 2020 (see the announcement of the Company dated 1 September 2020 for details) and (ii) Yuehai Yueshenghuo which was disposed of by the Group to Yuehai Property Management in 2020 (see the announcement of GDL dated 19 November 2020 for details) while they were subsidiaries of the Company), in relation to the property management services provided during the two years ended 31 December 2020 (the "Previous Transaction(s)").

	For the year ended	For the year ended
	31 December 2019	31 December 2020
	(RMB)	(RMB)
Actual amount of service	49,228,485	71,727,538
fees under the Previous	(equivalent to	(equivalent to
Transactions	approximately	approximately
	HK$59,094,000)	HK$86,102,000
Caps and basis of determination

Pursuant to the Framework Agreement, the relevant caps ("Cap(s)") for the transactions contemplated under the Framework Agreement are as follows:

	For the period from	For the year	For the year	For the period from
	10 May 2021 to	ending 31	ending 31	1 January 2024 to
	31 December 2021	December 2022	December 2023	9 May 2024
	(RMB)	(RMB)	(RMB)	(RMB)
Caps	18,000,000	120,000,000	130,000,000	70,000,000
	(equivalent to	(equivalent to	(equivalent to	(equivalent to
	approximately	approximately	approximately	approximately
	HK$21,607,000)	HK$144,048,000)	HK$156,052,000)	HK$84,028,000)

The above Caps were determined after having taken into account the historical and pre-existing transaction amounts and the other factors set out below:

1. the actual amount of the service fees paid under the Previous Transactions;
2. the aggregated amounts of the service fees paid and estimated to be paid by the Group (including the Huiyang Yuehai group of companies) to the Yuehai Property Management Group (including the Teem Management Co group of companies and Yuehai Yueshenghuo) for each of the three years ending 31 December 2023 and the period from 1 January 2024 to 9 May 2024 are approximately RMB77,700,000 (equivalent to approximately HK$93,271,000), approximately RMB49,671,000 (equivalent to approximately HK$59,624,000), approximately RMB33,131,000 (equivalent to approximately HK$39,771,000) and approximately RMB2,958,000 (equivalent to approximately HK$3,551,000), respectively, pursuant to the agreements entered into between the Group and the Yuehai Property Management Group prior to the date of the Framework Agreement, in relation to the provision of the property management services by the Yuehai Property Management Group to the Group covering the aforementioned period or any part thereof (the "Previous CCT Agreements")

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(for details of the Previous CCT Agreements, please refer to the announcements of the Company dated 31 May 2019, 1 September 2020 and 26 March 2021, the joint announcement of the Company and GDL dated 29 October 2020 and the announcement of GDL dated 19 November 2020). (However, as the Previous CCT Agreements were entered into before the Framework Agreement, the abovementioned service fee amounts are not included in the relevant Caps under the Framework Agreement.)

For the avoidance of doubt, the two agreements both dated 10 May 2021 and entered into between GDL Zhuhai (a non-wholly owned subsidiary of the Company) and the Yuehai Property Management Group in relation to the provision of Property Management Services by the Yuehai Property Management Group to GDL Zhuhai (see the announcement of GDL dated 10 May 2021 for details) are Specific Agreements, and thus the amounts of their relevant transaction caps are included in the Caps;

1. the expected demand for Property Management Services by the Group based on (i) the amount of the service fees under the Previous Transactions for each of the two years ended 31 December 2020; (ii) the relevant gross floor area of the properties of the Group as at 31 December 2020; (iii) the expected number of the property projects under development by the Group during the term of the Framework Agreement; (iv) the estimated time of pre-sales and delivery of the property projects under development by the Group; (v) the locations and types of the aforementioned properties of and under development by the Group; (vi) the expected types of Property Management Services required; (vii) the expected renewal of certain Previous CCT Agreements upon their expiry during the term of the Framework Agreement; and (viii) a reasonable buffer to allow for increase in demand for the Property Management Services;
2. that:
3. 1. among the Previous CCT Agreements which are expected to be renewed upon their expiry during the term of the Framework Agreement, only one of them will expire before 31 December 2021 and majority of them will expire on 31 December 2021 or during the year ending 31 December 2022 and, as such, most renewed terms of such Previous CCT Agreements will not commence until the year ending 31 December 2022, and accordingly, as mentioned in paragraph (b) above, the relevant transaction amounts before the renewal of such Previous CCT Agreements are not included in the Caps (in particular the Cap for the period from 10 May 2021 and 31 December 2021) under the Framework Agreement; and
   2. the demand for Property Management Services by the Group in respect of the Group's property projects under development is expected to be higher for the year ending 31 December 2022 and thereafter, as, according to the Group's business plan that a greater number of property projects (to be developed on land parcels from the Group's land bank and the land parcels anticipated to be acquired by the Group) will commence during the year ending 31 December 2022, and based on the estimated time of pre-sales and delivery of such property projects under development,

therefore, the Caps set for the year ending 31 December 2022, the year ending 31

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