Perfection through

SUPERIOR CRAFTSMANSHIP

and REFINEMENT

Shanghai Industrial Urban Development Group Limited ("SIUD") currently has 26 real estate projects in 11 major cities in China, mainly located at Shanghai, Kunshan, Wuxi, Beijing, Shenyang, Tianjin, Xi'an, Chongqing, Changsha, Yantai and Shenzhen. Most of the projects are mid- to high-end residential projects which are under construction at full steam, presenting the Group with approximately 3.71 million square meters saleable floor areas and building a marvelous foundation for our long term development.

CONTENTS

1. Corporate Information
2. Financial Highlights
3. Chairman's Statement

6 Management Discussion and Analysis

12 Details of Properties

14 Key Projects Introduction

23 Other Information

1. Report on Review of Condensed Consolidated Financial Statements
2. Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

32 Condensed Consolidated Statement of Financial Position

34 Condensed Consolidated Statement of Changes in Equity

36 Condensed Consolidated Statement of Cash Flows

38 Notes to the Condensed Consolidated Financial Statements

2 SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020

CORPORATE INFORMATION

6 SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020

MANAGEMENT DISCUSSION AND ANALYSIS

PROPERTY MARKET REVIEW

Looking back to the first half of 2020, the aftershock of COVID-19 still lingered subsequent to the first quarter. Amidst the global economic slowdown, suppressed domestic property market and further polarised regional development, the growth trend slightly slackened on the whole. On the policy side, the central government persisted in the guiding principle that "houses are built to be inhabited, not for speculation" while repeatedly reiterating the idea of "not resorting to real estates as a short-term economic stimulus measure". Local authorities implemented city-based policies tailored to specific circumstances by relaxing certain policies on an appropriate scale to stabilise the property market and proposing favourable measures, including allowing developers to postpone the delivery of properties and land premium payment and to launch the pre-sale process in advance, as well as granting tax and fee remission. The government spared no effort in conducting the supply-side reform while strengthening its support to the market in view of the COVID-19 situation. On the supply side, the restrictions on purchase, loans and sale were relaxed on an appropriate scale. On the demand side, the supporting measures included adjusting and increasing the withdrawal amount of housing provident fund and lowering the threshold for home purchases. With the joint efforts of the central and local governments in stabilising the economy, the property market in first- and second-tier cities picked up quickly in the second quarter, demonstrating its strong resilience.

BUSINESS REVIEW

Overview

In the first half of 2020, in face of the outbreak of COVID-19, SIUD adopted a versatile approach by providing online property viewing and online sale services, etc. The outstanding sales performance of flagship projects, including Contemporary Splendour Villa in Shanghai, West Diaoyutai in Beijing and Urban Cradle in Shanghai, continued to bring in loads of stable revenue for the Group. During the period, as an operator in key urban areas, the Group remained focused on the metropolitan areas in Shanghai as well as other core first- and second-tier cities and kept capitalizing on its core development projects and strategic advantages in first- and second-tier cities. It also facilitated the co-development of a diversified business portfolio by focusing on four core business segments, namely, "residential property development + investment property development services + capital cooperation between industry and finance". During the period, SIUD paid continuous effort to refine the investment and operation of commercial assets in core urban areas and adhered to the policy of dual focus on leasing and sale in order to see stable increase in the rental income from its residential leasing operation. SIUD played an active role in facilitating the transformation and industrial upgrading of the Group and strove to diversify its operations in a sound manner with a view to fully covering the demand for quality housing of mainstream urban dwellers.

Contract Sales

During the six months ended 30 June 2020, benefited from the strong sales performance of Contemporary Splendour Villa, a newly launched high-end project in Shanghai, the contract sales from commodity housing of the Group increased 8.5% year-on-year to RMB3,706,390,000 (six months ended 30 June 2019: RMB3,414,670,000).

Total contract sales in terms of G.F.A. were 64,000 sq.m. during the period, down 35.4% year-on-year. The average selling price rose 67.8% to approximately RMB57,900 per sq.m. The Group took advantage of the market window to develop its WeChat mini programme, "U LIFE", as its online property sale office and quickened its pace in sales launches. Key projects such as Contemporary Splendour Villa in Shanghai, West Diaoyutai in Beijing, Urban Cradle and Contemporary Art Villa in Shanghai and Originally in Xi'an performed well in sales and became impressive principal sources of revenue of the Group, which delivered sales of RMB1,501,640,000, RMB1,024,060,000, RMB471,580,000, RMB316,280,000 and RMB303,100,000 respectively, accounting for approximately 40.5%, 27.6%, 12.7%, 8.5% and 8.2% of the total contract sales respectively.

MANAGEMENT DISCUSSION AND ANALYSIS

Property Development

During the six months ended 30 June 2020, the Group had 11 projects with a total G.F.A. of 2,767,000 sq.m. under construction, which primarily included TODTOWN, Binjiang U Center in Shanghai, Originally in Xi'an and Shangtou Baoxu in Shanghai. During the period, the Group delivered a total G.F.A of approximately 110,300 sq.m., which mainly came from Urban Cradle in Shanghai, Originally in Xi'an and Contemporary Art Villa in Shanghai.

Many of the Group's residential projects rolled out new housing units for sale, and the transaction volume and prices both went up. Not only did Contemporary Splendour Villa, a high-endlow-density villa project located in Minhang District, Shanghai, serve as an important driver for the development of SIUD in Shanghai, it also represented another milestone of SIUD's dual-focus strategy of developing residential as well as commercial properties. During the period, by virtue of its high reputation for quality, Contemporary Splendour Villa was well received by the market and sold out soon after being launched in January. Besides, Courtyard Villa, a classic project under this project, also ranked first in terms of total transaction volume among all the villa projects in Shanghai from January to May 2020. During the pre-sale of Emperor Seal (phase 3 of the West Diaoyutai project in Beijing) in the first half of 2020, its pre-sale price reached record high among all pre-sale properties in Beijing since 2016. This project brought steady sales and cashflows for the Group.

Investment Properties

As at 30 June 2020, the Group had several completed commercial projects in seven major developed cities, including Shanghai, Beijing, Tianjin, Chongqing, Shenyang, Kunshan and Shenzhen. The investment projects held by the Group had a total G.F.A. of approximately 816,000 sq.m. During the period, the overall rental income of the Group decreased 22.9% year-on-year to HK$290,288,000 (as at 30 June 2019: HK$376,670,000), which was mainly attributable to the drop in rental income during the period due to the rent remission policy adopted by local governments to remit rent of tenants for two to four months in response to the impact of COVID-19 during the first quarter. The completion of one of the land parcels under Binjiang U Center in Shanghai during the period brought approximately 26,000 sq.m. to the investment property portfolio of SIUD and the business solicitation and operation of its commercial and office areas progressed robustly. The project will drive the rental income of the Group in the future. The commercial asset efficiency of the Group went up steadily. More than one million sq.m. of commercial areas are expected to be completed in the next three to five years.

Besides, under the policy of dual focus on leasing and sale, the Group continued to enhance its residential leasing operation. The Group currently has three residential leasing projects on hand, namely Shanghai Shenzhicheng, Jinxiang and Chenglong, representing a total area of approximately 295,000 sq.m.. In the future, the Group will further develop more diversified strategic cooperation initiatives and expand its commercial property portfolio.

8 SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020

MANAGEMENT DISCUSSION AND ANALYSIS

FINANCIAL REVIEW

Revenue

During the six months ended 30 June 2020, the Group's revenue decreased by 31.1% year-on-year to HK$3,172,823,000 (six months ended 30 June 2019: HK$4,603,326,000), primarily due to the inability of the Group in settling the sales of certain properties during the period because of the impact of the outbreak of COVID-19 pandemic as implementation of quarantine and social distancing measures in the mainland China resulted in limitation on contract sales and delay in property delivery, coupled with a decrease in revenue from leasing. During the period, property sales remained as the Group's main source of revenue and amounted to HK$2,829,760,000 (six months ended 30 June 2019: HK$4,085,037,000), accounting for 89.2% (six months ended 30 June 2019: 88.7%) of the Group's total revenue. The revenue contribution from Urban Cradle in Shanghai, Originally in Xi'an and Contemporary Art Villa in Shanghai accounted for 47.9%, 33.3% and 16.1% of property sales, respectively.

Due to the impact of the COVID-19 outbreak, the Group's revenue from leasing, property management and services, and hotel operations recorded a decline. These three operations contributed a revenue of HK$290,288,000, HK$2,515,000 and HK$50,260,000 (six months ended 30 June 2019: HK$376,670,000, HK$3,377,000 and HK$138,242,000) respectively and accounted for 9.1%, 0.1% and 1.6% (six months ended 30 June 2019: 8.2%, 0.1% and 3.0%) of the total revenue, respectively.

Gross Profit and Gross Profit Margin

For the six months ended 30 June 2020, the Group's gross profit amounted to HK$1,432,178,000, down by 27.0% as compared to that of the same period in 2019. The gross profit margin rose 2.5 percentage points from 42.6% for the same period last year to 45.1%. The decrease in gross profit was mainly due to the decline in sales revenue under the impact of COVID-19 during the period. But since the sales came from high-margin projects in Shanghai, such as Urban Cradle and Contemporary Art Villa, the gross profit margin went up slightly.

Investment Property Revaluation

For the six months ended 30 June 2020, the Group recorded a net gain on revaluation of investment properties of approximately HK$173,682,000, which was mainly attributable to the revaluation gains arising from the transfer of certain properties held-for-sale under Binjiang U Center to investment properties.

Distribution and Selling Expenses

For the six months ended 30 June 2020, the Group's distribution and selling expenses decreased by 28.4% year-on-year to HK$99,200,000 (six months ended 30 June 2019: HK$138,506,000), which was mainly attributable to the drop in property sales and decrease in marketing expenses caused by the development of online property sales during the period.

MANAGEMENT DISCUSSION AND ANALYSIS

General and Administrative Expenses

For the six months ended 30 June 2020, the Group's general and administrative expenses increased by 12.5% year-on-year to HK$187,727,000 (six months ended 30 June 2019: HK$166,938,000), which was mainly attributable to the increase in expenses related to the increase in new investment property projects during the period.

Other Expenses, Gains and Losses, Net

For the six months ended 30 June 2020, the Group recorded a net loss of approximately HK$10,937,000 in other expenses, gains and losses (six months ended 30 June 2019: net gain of HK$2,218,000), which was mainly due to the change in exchange rates of Renminbi during the period.

Profit

During the six months ended 30 June 2020, the Group's profit decreased year-on-year by 53.6% to HK$355,072,000 (six months ended 30 June 2019: HK$765,162,000). During the first half of the year, profit attributable to owners of the Company was approximately HK$151,041,000 (six months ended 30 June 2019: HK$310,678,000), and the basic and diluted earnings per share amounted to 3.14 HK cents (six months ended 30 June 2019: basic and diluted earnings per share of 6.46 HK cents).

Liquidity and Capital Resources

The Group manages its capital to ensure that entities within the Group will be able to operate on a going concern while maximising the return to shareholders through optimisation of the debt and equity balance. The Group's overall strategy remains unchanged from prior year.

The capital structure of the Group consists of net debt, which includes bank and other borrowings, cash and cash equivalents, and equity attributable to owners of the Company (comprising issued share capital and reserves).

In mid-June 2020, a non-wholly owned subsidiary of SIUD, Shanghai Urban Development (Holdings) Co., Ltd., was permitted by the China Securities Regulatory Commission to issue corporate bonds amounting to not more than RMB1.7 billion. In June 2020, Shanghai Urban Development (Holdings) Co., Ltd. completed the public issuance of the corporate bonds (phase 1) with a term of three years at a coupon rate of 3.49%. The issuance successfully raised RMB550 million, which was intended to be used for the repayment of corporate bonds.

As at 30 June 2020, bank balances and cash of the Group were HK$7,740,449,000 (31 December 2019: HK$9,111,782,000). The net debt to total equity of the Group (net debt (total bank and other borrowings less bank balances and cash and restricted and pledged bank deposits) to total equity) increased from 29.1% as at the end of last year to 42.5% as at the period end. Current ratio dropped slightly to 1.8 times (31 December 2019: 1.9 times).

As at 30 June 2020, the total borrowings of the Group including bank borrowings, other borrowings and advanced bonds amounted to approximately HK$17,977,324,000 (31 December 2019: HK$16,712,302,000).

The Group maintained sufficient cash balance during the period. The management believes that the Group's financial resources and future revenue will be sufficient to support the current working capital requirements and future expansion of the Group.

10 SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020

MANAGEMENT DISCUSSION AND ANALYSIS

Foreign Exchange Risks

During the period, most of the Group's revenue and operating costs were denominated in Renminbi. Except for certain bank deposits and other borrowings denominated in foreign currencies, the Group's operating cash flow or liquidity is not directly subject to any other material exchange rate fluctuations. The Group did not enter into any foreign exchange hedging arrangements to control its exposure to exchange rate fluctuations as at 30 June 2020. However, the Group will adopt necessary measures whenever appropriate to minimise the impact arising from exchange rate fluctuations.

HUMAN RESOURCES AND REMUNERATION POLICIES

As at 30 June 2020, the Group employed 785 employees (including Hong Kong and PRC offices). The remuneration policies for the employees of the Group are determined according to the performance, qualification, experience and competence of the employees. The emoluments of the directors of the Company (the "Directors") are determined by the remuneration committee of the Company, having regard to the operating results of the Group, individual performance and comparable market statistics. Staff benefits include discretionary bonus payments which are linked to the profitability of the Group and individual performances and contributions to the Mandatory Provident Fund Schemes.

The Group had adopted a share option scheme as an incentive to the Directors and eligible employees. During the six months ended 30 June 2020, the Group provided training programs relating to work to employees. Activities aiming at building up team spirit were regularly organized for employees, so as to enhance the human capital of the Group and the sense of belonging of the staff.

LAND BANK

In the first half of 2020, SIUD continued with the expansion of its premium land bank. On 2 January 2020, SIUD successfully bid for the land plot (no. xh221-01) situated at Hong Mei Block, Xuhui District, Shanghai together with Shanghai Aerospace and Hongyi Group at a total price of RMB4,628,000,000. The land had a total site area of 91,100 sq.m. with 260,000 sq.m., 90,000 sq.m. and 60,000 sq.m. being planned to be developed for scientific research, residential leasing and below-ground commercial purposes, respectively. This move showed SIUD's persistence in the strategic development direction of joining forces to concentrate in the core areas in Shanghai and to prosper together with the city.

During the six months ended 30 June 2020, the Group's land bank was developed into 26 highly competitive property projects with great development potential located in 11 major cities in China, including Shanghai, Beijing, Tianjin, Xi'an, Chongqing, Kunshan, Wuxi, Shenyang, Yantai, Changsha and Shenzhen, and comprised medium to high class residential and commercial properties, most of which were under construction and development. The Group has a land bank with a future saleable planned G.F.A. of approximately 3,710,000 sq.m. to support its development plan for the next three to five years.

SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020 11

MANAGEMENT DISCUSSION AND ANALYSIS

OUTLOOK

Looking ahead to the second half of 2020, the national economy is expected to further turn around as the situation of the pandemic in the PRC improves. Guided by the "six stabilities and six guarantees" promulgated by the National Committee of the Chinese People's Political Consultative Conference and National People's Congress, the property market will stay on the track of stable and orderly development. The financial environment for the property market will remain relatively relaxing, which will be beneficial to the investment and financing of property developers. The policy effort will remain unchanged and the central and local governments will stay focused on the regulation of the property financing sector and supply-side adjustments. As the polarisation of urban and regional developments intensifies, the investment focus will be moved further to the core areas in popular cities and the housing improvement demand is expected to be released at a quicker pace. Against this background, the Group will take advantage of the sales window period to actively promote sales and enhance turnover strategy in the second half, in a bid to fulfil its annual performance target.

Looking forward, the Group will maintain its steadily progressing development strategy and its competitive strengths in developing high-quality medium to high end residence while actively exploring different types of operations and innovating its development path. During the challenging market window period, the Group will gear itself up and gain insights into market trends with an aim of expanding into the investment and operation of property financing and commercial asset sectors, which will provide an impetus for the sustainable high quality growth of the Group in the future. By taking advantage of its years of development experience and its diversified product strategy adopted in recent years, SIUD will continue to create greater value and returns for the shareholders.

12 SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020

DETAILS OF PROPERTIES

The Group has 26 projects in 11 cities, comprising mid- to high-end residential units, serviced apartments, commercial and office buildings. As at 30 June 2020, the total GFA of the future saleable land bank of the Group was approximately 3.71 million sq.m.

The Group has restructured its projects and will adopt

prudent strategies in future land acquisition.

As at 30 June 2020

SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020 13

DETAILS OF PROPERTIES

MAJOR INVESTMENT PROPERTIES

Notes:

1. Included in page 12 of this interim report.
2. Address: Yan'an West Road No. 2299 of Changning District, Shanghai
3. Address: Hongqiao Road No. 355 of Xuhui District, Shanghai
4. Address: Tianyaoqiao Road No.123 of Xuhui District, Shanghai

14 SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020

KEY PROJECTS INTRODUCTION

SIUD SHANGHAI PROJECTS

JadeVilla

Cradle is an all-engulfing showcase of architectural forms and brilliant products including international-grade apartments,

standalone villas, garden houses, deluxe mansions, modern commercial premises and green landscapes, bringing comfortable and stylish living together with commerce, entertainment, culture, education, and business and leisure pursuits.

SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020 23

OTHER INFORMATION

INTERIM DIVIDEND

The board of Directors (the "Board") does not recommend the payment of any interim dividend for the six months ended 30 June 2020 (for the six months ended 30 June 2019: Nil).

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities during the six months ended 30 June 2020.

PREEMPTIVE RIGHTS

There are no provisions for pre-emptive rights under the Company's Bye-laws, or the laws of Bermuda, which would oblige the Company to offer new shares on a pro-rata basis to the existing shareholders of the Company (the "Shareholders").

CORPORATE GOVERNANCE

During the six months ended 30 June 2020, the Company has complied with the code provisions as set out in the Corporate Governance Code (the "Code") contained in Appendix 14 to the Rules Governing the Listing of Securities (the "Listing Rules") on The Stock Exchange of Hong Kong Limited (the "Stock Exchange").

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted its own code of conduct regarding dealings in the securities of the Company by the Directors and the relevant employees (who are likely to be in possession of inside information relating to the Company or its securities) (the "Guidelines for Securities Transactions by Relevant Employees") on terms no less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") as set out in Appendix 10 to the Listing Rules. All Directors have confirmed, following specific enquiry by the Company, that they have complied with the required standards as set out in the Model Code and its code of conduct regarding directors' securities transactions throughout the six months ended 30 June 2020.

In addition, no incident of non-compliance of the Guidelines for Securities Transactions by Relevant Employees by the relevant employees of the Group was noted by the Company throughout the six months ended 30 June 2020.

LOAN AGREEMENT WITH SPECIFIC PERFORMANCE COVENANT ON THE CONTROLLING SHAREHOLDER

As disclosed in the Company's announcement dated 31 January 2019, the Company (as the borrower) entered into a facility letter (the "Facility Letter") with a bank (as the lender) for a revolving loan facility of up to HKD500,000,000 with maturity date being the date falling one year from the acceptance date of the Facility Letter (the "RL Facility"). The Facility Letter contains an undertaking by the Company that so long as the RL Facility or any sum thereunder are outstanding, Shanghai Industrial Holdings Limited ("SIHL") and/or Shanghai Industrial Investment (Holdings) Company Limited ("SIIC") (both being controlling shareholders of the Company) shall collectively directly or indirectly own not less than 51% of the total share capital of the Company and maintain management control of the Company (the "Shareholding and Management Covenant"). A breach of the Shareholding and Management Covenant will constitute a default under the Facility Letter.

24 SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020

OTHER INFORMATION

As disclosed in the Company's announcement dated 22 November 2019, the Company (as the borrower) entered into a loan agreement with a bank (as a lender) for a term loan facility in the amount of RMB1,690,000,000 for a term of eighteen months (the "Term Loan Facility"). The loan agreement provides that SIIC, being a controlling shareholder of the Company and SIHL, shall directly or indirectly own not less than 51% of the total share capital of the Company and maintain management control of the Company (the "Requisite Covenant"). A breach of the Requisite Covenant will constitute a default under the loan agreement.

As disclosed in the Company's announcement dated 17 June 2020, for the purpose of re-financing the Term Loan Facility, the Company (as the borrower) entered into a loan agreement with a bank as a lender (as a lender) for a term loan facility in the amount of RMB2,400,000,000 for a term of thirty-six months. The loan agreement provides for the Requisite Covenant and a breach of the Requisite Covenant will constitute a default under the loan agreement.

As at 30 June 2020, SIHL and SIIC are beneficially interested in approximately 48.45% and 64.63%, respectively, of the total issued share capital of the Company. Other than as disclosed above, there are no other events which are required to be disclosed by the Company under Rule 13.18 of the Listing Rules.

AUDIT COMMITTEE AND REVIEW OF INTERIM RESULTS

The audit committee of the Company (the "Audit Committee") currently consists of three independent non- executive Directors, namely Mr. Li Ka Fai, David (Committee Chairman), Mr. Doo Wai-Hoi, William, J.P. and Mr. Fan Ren Da, Anthony. The Audit Committee is primarily responsible for reviewing the accounting principles and practices adopted by the Group; reviewing the financial reporting process, risk management and internal controls system of the Group; and reviewing the independence and objectivity of the external auditor, the scope of audit services and related audit fees payable to the external auditor. During the six months ended 30 June 2020, the Audit Committee has reviewed the independence and objectivity of the external auditor, the scope of audit services and related audit fees payable to the external auditor for the Board's approval. The Audit Committee has also reviewed the unaudited interim financial statements of the Group for the six months ended 30 June 2020 and discussed with the management and the auditor of the Company on the accounting principles and practices adopted by the Group, risk management and internal controls matter, final results and financial statements and the terms of reference for the Audit Committee.

The Group's external auditor, Messrs. Deloitte Touche Tohmatsu, has reviewed the Company's unaudited condensed consolidated financial statements for the six months ended 30 June 2020 in accordance with the Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Hong Kong Institute of Certified Public Accountants.

SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020 25

OTHER INFORMATION

DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY AND ITS ASSOCIATED CORPORATIONS

As at 30 June 2020, the interests and short positions of the Directors and chief executives of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the "SFO")) which were notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO) and required to be entered in the register required to be kept by the Company pursuant to Section 352 of the SFO or which were required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange, were as follows:

1. Long positions in the shares and underlying shares of the Company

Notes:

1. These interests represent the interests in the underlying shares of the Company in respect of share options granted by the Company to these Directors as beneficial owners, details of which are set out in the section headed "SHARE OPTION SCHEME" of this interim report.

Save as disclosed herein, as at 30 June 2020, none of the Directors or chief executives of the Company had any interests or short positions in any shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept under section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO or pursuant to the Model Code.

SHARE OPTION SCHEME

Pursuant to ordinary resolutions passed by the Shareholders at its special general meeting held on 12 December 2002, the Company adopted a share option scheme (the "Share Option Scheme").

As at 30 June 2020, the Company granted 21,750,000 shares options to subscribe for up to a total of 21,750,000 ordinary shares of nominal value of HK$0.04 each in the capital of the Company under the Share Option Scheme, representing approximately 0.45% of the issued share capital of the Company as at 30 June 2020. The Share Option Scheme expired on 11 December 2012.

26 SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020

OTHER INFORMATION

The particulars and movements of the share options to subscribe for the Company's shares under the Share Option Scheme during the six months ended 30 June 2020 (the "Period") were as follows:

Notes:

1. Share options granted in September 2010 under the Share Option Scheme are exercisable during the period from 24 September

2010 to 23 September 2020 in three batches, being:

• 24 September 2010 to 23 September 2011 (up to 40% of the share options granted are exercisable)
• 24 September 2011 to 23 September 2012 (up to 70% of the share options granted are exercisable)
• 24 September 2012 to 23 September 2020 (all share options granted are exercisable)

Pursuant to ordinary resolutions passed by the Shareholders at its annual general meeting held on 16 May 2013 (the "Adoption Date"), the Company adopted a new share option scheme (the "New Share Option Scheme").

Reference was made to the circular of the Company dated 16 April 2013 in relation to the adoption of the New Share Option Scheme (the "Circular"). Unless the context requires otherwise, terms defined in the Circular shall have the same meanings when used in this interim report. As disclosed in the Circular, the New Share Option Scheme will be valid for ten years since the Adoption Date. The purpose of the New Share Option Scheme is to enable the Company to grant options to the eligible participants, as incentives and/or rewards for their contributions to the Group.

The eligible participants include the following classes of participants:

1. any employee (whether full time or part time, including any executive Director and non-executive director but excluding any independent non-executive director and (if applicable) any supervisors) of any member of the Group or any invested entity;
2. any independent non-executive directors and (if applicable) any supervisors of any member of the Group or any invested entity;

SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020 27

OTHER INFORMATION

1. any supplier of goods or services to any member of the Group or any invested entity;
2. any customer of any member of the Group or any invested entity;
3. any person or entity that provides research, development or other support (technical or otherwise) to any member of the Group or any invested entity;
4. any shareholder of any member of the Group or any invested entity or any holder of any securities issued by any member of the Group or any invested entity;
5. any adviser or consultant (professional or otherwise) to any area of business or business development of any member of the Group or any invested entity; and
6. any other group or classes of participants who have contributed or may contribute by way of joint venture, business alliance or other business arrangement to the development and growth of the Group.

For the purposes of the New Share Option Scheme, an offer may be made to any company wholly-owned by one or more eligible participants.

The Board considers that the New Share Option Scheme will provide the eligible participants with the opportunity to acquire shares of the Company and to encourage the eligible participants to work towards enhancing the value of the Company and for the benefit of the Company and its shareholders as a whole. The provisions of the New Share Option Scheme comply with the requirements of Chapter 17 of the Listing Rules. Further details of the New Share Option Scheme can be found in the Circular.

The Company had not granted any share options under the New Share Option Scheme since the Adoption Date up to 30 June 2020.

Save as disclosed herein, the Company had not granted any share options to any persons as required to be disclosed under Rule 17.07 of the Listing Rules during the six months ended 30 June 2020.

SUBSTANTIAL SHAREHOLDERS' AND OTHER PERSONS' INTERESTS IN THE SHARES AND UNDERLYING SHARES

As at 30 June 2020, substantial shareholders and other persons (other than the Directors and chief executives of the Company) who had interests or short positions in the shares and underlying shares of the Company which were notified to the Company and the Stock Exchange pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO and entered in the register required to be kept by the Company pursuant to Section 336 of the SFO, or otherwise notified to the Company were as follows:

Ordinary shares of HK$0.04 each of the Company

28 SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020

OTHER INFORMATION

Notes:

1. L denotes long positions.
2. These include 2,278,671,400 shares of the Company held by S.I. Smart Charmer Limited and 50,000,000 shares of the Company that are deemed to be held by Novel Good Limited under the pledge described in note 3 below. As S.I. Smart Charmer Limited and Novel Good Limited are both wholly-owned subsidiaries of SIHL, which is in turn controlled by SIIC, SIHL and SIIC are deemed or taken to be interested in the interests in the shares of the Company held by S.I. Smart Charmer Limited and Novel Good Limited.
3. These interests include 50,000,000 shares of the Company (short positions) held by Invest Gain Limited (a company beneficially and wholly owned by Mr. Li Song Xiao who ceased to be a substantial shareholder of the Company during the year ended 31 December 2011) which was pledged to Novel Good Limited. Therefore, SIHL and SIIC are deemed or taken to be interested in these 50,000,000 shares of the Company.
4. SIIC, through Shanghai Investment Holdings Limited (a subsidiary of SIIC) held approximately 55.13% of the shares of SIHL. Therefore, SIIC is deemed or taken to be interested in the 2,328,671,400 shares of the Company held by SHIL for the purpose of the SFO. On the other hand, SIIC is also deemed or taken to be interested in the 779,024,748 shares of the Company held by its subsidiaries, namely SIIC Trading Company Limited, Shanghai Industrial Financial Holdings (Hong Kong) Company Limited, SIIC CM Development Limited, SIIC Capital (B.V.I.) Limited and Shanghai Investment Holdings Limited.

Save as disclosed herein, as at 30 June 2020, the Company had not been notified by any persons (other than the Directors and chief executives of the Company) who had interests or short positions in the shares or underlying shares of the Company which fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company under Section 336 of the SFO.

CHANGES IN INFORMATION OF DIRECTORS

Pursuant to Rule 13.51B(1) of the Listing Rules, changes in information of directors of the Company are set out as follows:

Mr. Zeng Ming resigned as the chairman of the Board, an executive director and the chairman of the nomination committee of the Company with effect from 18 May 2020.

Mr. Fei Zuoxiang resigned as an executive director of the Company with effect from 18 May 2020.

Mr. Huang Haiping was appointed as the chairman of the Board, an executive director and the chairman of the nomination committee of the Company with effect from 18 May 2020.

Save as disclosed above, there is no other information required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules.

APPRECIATION

I would like to express my sincere gratitude to the Board, our management and all our staff for their dedicated efforts as well as to our customers, suppliers, business partners and shareholders for their continued enthusiastic support to our Group.

By order of the Board of

Shanghai Industrial Urban Development Group Limited

Huang Haiping

Chairman

Hong Kong, 27 August 2020

30 SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended 30 June 2020

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CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

32 SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED INTERIM REPORT 2020

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2020

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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION