Yuzhou : Stay Resilient and Steady Development First Full Compliance With the "Three Red Lines" Yuzhou Group (01628.HK) Announced 2021 Annual Results

【For Immediate Release】

Stay Resilient and Steady Development First Full Compliance With the "Three Red Lines"

Yuzhou Group (01628.HK) Announced 2021 Annual Results

FINANCIAL HIGHLIGHTS

For the year ended 31 December 2021:

• ➢ The total revenue was RMB27,071 million, increased by 160.01% year-on-year. Profit for the year was RMB1,283 million, increased by 462.15% year-on-year.

• ➢ Gross profit amounted to RMB4,061 million in 2021, increased 746.12% year on year. Gross profit margin was 15.00%.

• ➢ Interest bearing debt was RMB56,582 million, decreased by 11.45% year-on-year.

• ➢ Pre-sales received in advance achieved a rapid year-on-year growth of 75.36%, to RMB40,028 million, demonstrating a positive revenue prospect.

• ➢ Average finance costs was 6.96%, representing a decrease of 0.17 percentage point compared with that of 2021 interim.

• ➢ For the first time, the Group achieved full compliance with the "Three Red Lines", entering the "green-grade". The cash short-term debt ratio was 1.25, the net gearing ratio was 94.37%, and the debt-to-asset ratio after excluding advance receipts was 69.19%, which was down by 8.73 percentage points compared with that of 2020.

(31 March 2022, Hong Kong) Yuzhou Group Holdings Company Limited ("Yuzhou Group" or the "Company", together with its subsidiaries, the "Group", stock code: 01628.HK), one of China's top 40 real estate enterprises, announced the audited results for the year ended 31 December 2021 (the "Reporting Period").

2021 was an unusual year for the real estate industry. The real estate market quickly cooled down due to the intensive implementation of a series of meticulous financial control policies in 2021, including real estate loan concentration management, centralized supply of residential land in 22 major cities, strengthened mortgage loan approval and pre-sale funds supervision. At the same time, the worldwide spreading and domestic sporadic outbreak of COVID-19 epidemic dealt a continuous blow to international trade, home buyers' wait-and-see sentiments were further intensified. In the midst of the market downturn, since the endof the third quarter of 2021, the national policy, while keeping the keynote of "houses are for living in, not for speculation" unchanged, adheres to the goal of "stabilizing housing price, land premium and expectation", supports reasonable and normal financing for real estate enterprises, supports the commercial housing market to better meet the reasonable housing needs of home buyers, and promotes the healthy development and virtuous cycle of the real estate industry. During the year, Yuzhou Group continues to increase its revenue and optimize its debt management, achieving full compliance with the "Three Red Lines", entering the "green-grade" for the first time.

Perfectly Meet Revenue Target, Significant Increase In Cash Collection

During the year, full victory in the delivery battle, the total revenue of the Group was RMB27,071 million, up by 160.01% year-on-year compared with RMB10,412 million in 2020, perfectly meeting the delivery target set in early 2021. The Group's profit was RMB1,283 million, increased by 462.15% compared with RMB228 million in 2020. Gross profit amounted to RMB4,061 million in 2021, increased 746.12% year on year. Gross profit margin was 15.00%.

During the year, the Group delivered over 30,000 units and some projects even were delivered ahead of their contracted delivery dates. Among them, the delivery rate of Zhongshan Yuzhou Lang Garden, Nanjing Yuzhou Honor Galaxy, Xuzhou Yuzhou Lakeside Langham, Suzhou Yuzhou Blue Seasons, Xiamen Yuzhou Honor Mansion、Hefei Yuzhou Honor Mansion, etc., was nearly 100%. The revenue of the Group was mainly derived from four business categories, including property sales revenue, rental income from investment properties, property management fee income and hotel operation income. The property sales revenue was approximately RMB26,236 million, accounting for 96.92% of the total revenue; rental income from investment properties was approximately RMB303 million; property management fee income was approximately RMB520 million; and hotel operation income was approximately RMB12.11 million.

In 2021, under the development strategy of "Leading with locality development", the Group continuously developed in the six major metropolitan areas namely Yangtze River Delta Region, West Strait Economic Zone, Bohai Rim Region, Greater Bay Area, Central China Region and Southwest Region to ensure to achieve profit-oriented and quality growth. As of 31 December 2021, the Group's accumulated contracted sales amounted to approximately RMB105,021 million. The GFA of contracted sales amounted to 5,293,990 sq.m. and the contracted average selling price was approximately RMB19,838 per sq.m, up by 18.39% year-on-year as another record high. On the other hand, as of 2021, the Yuzhou Group's pre-sales received in advance achieved a rapid year-on-year growth of 75.36% to RMB40,028 million, demonstrating the Group's increasing ability to consolidate sales and carry forward expectations, with revenue growth expected in the future.

During the year, following the principle of "In-depth Cultivation", in view of the land auction market, the Group, after thorough research and analysis, obtained four high-quality land parcels at attractive prices in Suzhou, Zhengzhou and Jiangmen with a total GFA of approximately 547,871 sq.m.. The average land cost was RMB7,847 per sq.m.. All the above new projects were located in tier-1 and tier-2 and tier-2-to-be cities. As of 31 December 2021, the Group had land reserves amounting to approximately 20.42 million sq.m. of aggregate saleable GFA, with 179 projects located in 39 cities in the six metropolitan areas. The average land cost was approximately RMB6,646 per sq.m.. The Group believes that its land reserves currently held and managed are sufficient for its development over the next two years.

Full Compliance With the "Three Red Lines", Optimize and Upgrade Debt Management

The Group has been adopting a prudent financial policy for proactively conducting debt management and optimizing debt structure to balance financial risks and control the finance costs. During the year, the Group actively fulfilled its debtor obligations and used its own funds to repay debts and pay interest as they fell due. As at 31 December 2021, the Group had interest bearing debt of RMB56,582 million, of which certain loans were secured by certain investment properties, properties held for sale and properties under development of the Group, representing a decrease of 11.45% compared with RMB63,900 million in 2020.

Since the regulatory authorities proposed the new "Three Red Lines" financing regulations in August 2020, sound financial control has become the key to future development. As at 31 December 2021, the Group had cash of RMB17,520 million, the cash to short-term debts ratio was 1.25 times. Besides, the asset-liability ratio after excluding advance receipts was 69.19%, which was down by 8.73 percentage points as compared to that as at 31 December 2020; the net gearing ratio was 94.37%. Currently, Yuzhou Group's net debt ratio, cash to short-term debt ratio and asset-liability ratio after excluding advance receipts have been significantly better than the regulatory requirements. For the first time, the "Three Red Lines" have achieved full compliance with the "green-grade", demonstrating a healthy standard of debt management.

Practice the Concept of Green Development, High-Quality Craftsmanship Delivery Over the years, the Yuzhou Group has always adhered to the concept of low-carbon environmental protection and green development. The Group attached great importance to sustainable development and has taken the initiative to respond to the country's "dual-carbon" objective by creating green boutique projects with "ingenuity" and continuously increasing the practice of green buildings, striving to create a harmonious ecological community between human and nature. "Environmental protection and energy saving, building a green home" has always been one of Yuzhou Group's project developmentconcepts, as of the end of 2021, the Group has 145 property projects with approximately 20 million sq.m., that have achieved green building standards, of which approximately 5.55 million sq.m. have been granted two-star or above green building certification, either nationally or internationally. In 2021, 10 new projects have been granted green building certification with a total area of approximately 1.36 million sq.m.. Shenzhen Yuzhou Plaza, Shanghai Yuzhou Plaza and Xiamen Yuzhou Plaza were awarded the "US LEED CS Certification", and the project at No.48 Caine Road, Hong Kong, was awarded the highest platinum level of "BEAM Plus".

In addition, MSCI (Morgan Stanley Capital International) released the ESG (Environmental, Social and Governance) rating analysis report in June 2021, and the Group was rated as BBB again, maintaining the first level ESG rating of Chinese properties companies and ranking in the top among the Chinese properties companies.

While insisting on green development, the Group is committed to enhancing the product capabilities of each project, insisting on a people-oriented approach in the design process of the project products, analysing the modern design concept of human living in depth, taking care of every owner's needs in all aspects, and constructing high-quality ideal human living with dedication, interpreting the brand concept of "Building Cities with Heart, Building Homes with Love " with its strength. With the ultimate ingenious product capabilities, a number of the Group's projects were recognized for their design standards by winning many world-renowned industry awards, including the "International Property Award", the "REARD Global Design Award", the "Kinpan Award", and the "Idea-King Award". Yuzhou Group was also awarded the "Outstanding Enterprises in the Greater Bay Area-Social Sustainability Award (Sustainable Cities and Communities)" and "Outstanding Enterprises in the Greater Bay Area-Green Sustainability Award (Climate Action)" for its efforts to move forward on the path of green development.

Diversification of the Commercial Property Management, Property Management

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In 2021, The Group actively expanded its commercial property business, and covers a variety of commercial offerings, so as to meet the consumption needs of multiple groups in cities. Currently, the Yuzhou property investment projects cover areas of Shenzhen, Shanghai, Hangzhou, Xiamen, Suzhou, Nanjing, Hefei, Wuhan and Quanzhou. There were 29 projects under operation and 10 projects in preparation period, 39 projects in total with a commercial area of over 1.52 million sq.m., where shopping mall, office building and community commercial business accounted for 61%, 23% and 16% respectively. Operational projects covered over 1,000 cooperative brands and approximately 1,600 strategic alliance brands.

Yuzhou Commercial Company has focused on tier-1 and core tier-2 cities and has beenactively exploring ways to make a breakthrough, improving customers' experience with innovations in business type, model, design and capital, and gain industry recognition for its

ultimate product capabilities. Yuzhou Commercial Company won the "2020-2021 Commercial Property Excellence Enterprise" award at the "Golden Coordinate" award ceremony of the 16th China Commercial Real Estate Festival, and the "2021 Excellent Commercial Real Estate Operator" at the "Gold Star" award ceremony of China City

Commercial Power Summit Forum. In addition, our projects were on the Mall China Star

Awards list, including the "Mall China 2020 Shopping Centre Industry Adjustment Star Award" and "2021 High-Profile Commercial Real Estate Project Award" for Yuyueli in Lingjiao Lake in Wuhan and the "Mall China 2021 Shopping Centre Industry Potential Star Award" for

Yuyue World in Xiamen. The awards fully reflected the high level of recognition from the industry to the Group.

As of 31 December 2021, the total GFA of the managed projects of the Group was more than 21.88 million sq.m. and the total contracted area was more than 32.90 million sq.m..

The newly added area under management increased by 3.70 million sq.m., representing a growth rate of 20.35%. In terms of informatization construction, the Group was committed

to building "1+3+N" digital capabilities of Yuzhou Group, i.e., building the service capabilities of "N+ scenarios" to connect "three major service systems" based on the construction of "one core platform" (Uplus Smart Property Platform, which includes four major sections of

community services, commercial services, office services and intelligence services). It provides the technical basis for the digital connectivity of the Yuzhou Group's diversified business sectors.

Mr. Lam Lung On, J.P., the Chairman of the Board of Directors of Yuzhou Group stated,

"Since its establishment in 1994, Yuzhou Group has grown steadily and in tandem with the development policies of China's real estate market. Look forward to 2022, the government's policies insist on 'maintaining stability' and 'houses are for living in, not for speculation', the

Group will rely on its presence in and profound understanding of 1-and 2-tier major cities, to

strive for long-term 'survival' via a 'small and beautiful' development trail, and earnestly achieve 'three guarantees' ('guarantee delivery', 'guarantee sales', 'guarantee repayment'),

'three stabilities' (stabilizing finance, cash collection and operation). The Group will continue to adhere to the spirit of 'Building Cities with Heart, Building Homes with Love', we will remain dedicated to maximizing the value for our shareholders and investors, and creating the best returns."

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