Zhong An Real Estate : Circulars - Proposed Bonus Issue of Shares Proposed Increase in Authorised Share Capital and Notice of Extraordinary General Meeting

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional advisers.

If you have sold or transferred all your shares in Zhong An Real Estate Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

ZHONG AN REAL ESTATE LIMITED 眾安房產有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 672) PROPOSED BONUS ISSUE OF SHARES PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL AND NOTICE OF EXTRAORDINARY GENERAL MEETING

All capitalized terms used in this circular have the meanings ascribed to them in the section headed "Definitions" of this circular.

A letter from the Board is set out in pages 5 to 11 of this circular.

A notice convening the EGM to be held at Conference Room 4, 4/F., Holiday Inn Xiaoshan Hangzhou, 688 Shanyin Road, Xiaoshan District, Hangzhou, Zhejiang Province, the PRC at 10:00 a.m. on Wednesday, 27 September 2017 is set out on pages N-1 to N-3 of this circular.

The form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM or any adjournment thereof, you are requested to read the notice, complete the form of proxy in accordance with the instructions printed thereon and return the duly completed form of proxy to the Hong Kong Share Registrar, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong as soon as possible and, in any event, not less than 48 hours before the time appointed for the holding of the EGM (i.e. at or before 10:00 a.m. on Monday,

25 September 2017 (Hong Kong time)) or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM (or any adjournment thereof) should you so wish and, in such event, the instrument appointing a proxy shall be deemed to be revoked.

8 September 2017

Page

RESPONSIBILITY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . N-1 RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

In this circular, unless the context requires otherwise, the following expressions shall have the following meanings:

"Board" the board of Directors

"Bonus Issue" the proposed bonus issue of Shares on the basis of one Bonus Share for every one existing Share held by the Qualifying Shareholders on the Record Date

"Bonus Share(s)" the new Share(s) to be allotted and issued by way of Bonus Issue by the Company as described in this circular

"Company" Zhong An Real Estate Limited（眾安房產有限公司）, an exempted company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on the Main Board of the Stock Exchange

"Director(s)" the director(s) of the Company

"EGM" the extraordinary general meeting of the Company to be convened and held for approving, among others, the Bonus Issue and the Increase in Authorised Share Capital (or any adjournment thereof)

"Group" the Company and its subsidiaries

"Hong Kong Share Registrar" Tricor Investor Services Limited, the Hong Kong

branch share registrar and transfer office of the Company, at Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong

"Hong Kong" the Hong Kong Special Administrative Region of the People's Republic of China

"Increase in Authorised Share Capital"

the proposed increase in the authorised share capital of the Company from HK$400,000,000 comprising 4,000,000,000 Shares to HK$1,000,000,000 comprising 10,000,000,000 Shares by the creation of an additional 6,000,000,000 Shares

"Latest Practicable Date" 5 September 2017, being the latest practicable date

prior to the printing of this circular for ascertaining certain information contained herein

"Listing Committee" the listing sub-committee of the board of the Stock

Exchange

"Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange

"Non-Qualifying Shareholders" those Overseas Shareholder(s) (if any) whom the

Directors, after making relevant enquiries, consider necessary or expedient to be excluded from the Bonus Issue on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place

"Overseas Shareholder(s)" Shareholder(s) whose address(es) as recorded in the

register of members of the Company as at the close of business on the Record Date is/are outside Hong Kong

"PRC" the People's Republic of China

"Qualifying Shareholder(s)" Shareholder(s) whose name(s) appear(s) in the register

of members of the Company as at the close of business on the Record Date, other than the Non-Qualifying Shareholder(s)

"Record Date" Wednesday, 4 October 2017, being the date for ascertaining the entitlement of the Shareholders to the Bonus Issue

"Share(s)" ordinary share(s) of HK$0.10 each in the share capital of the Company

"Shareholder(s)" the registered holder(s) of Share(s) in issue

"Share Option(s)" the option(s) granted by the Company pursuant to the Share Option Scheme which give the holders thereof the rights to subscribe for new Shares

"Share Option Scheme" the share option scheme adopted by the Company on

15 May 2009 and currently in force

"Stock Exchange" The Stock Exchange of Hong Kong Limited

"HK$" Hong Kong dollar, the lawful currency of Hong Kong

"%" per cent.

Set out below is the expected timetable for the Bonus Issue:

Event

Latest time for lodging transfers of Shares

for registration in order to attend and vote at the EGM . . . . . . . . . . 4:30 p.m. on Friday,

22 September 2017

Closure of register of members of the Company for determination of eligibility of Shareholders

to attend and vote at the EGM (both days inclusive) . . . . Monday, 25 September 2017 to

Wednesday, 27 September 2017

Latest time to return form of proxy for the EGM . . . . . . . . . . . . . . 10:00 a.m. on Monday,

25 September 2017

EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:00 a.m. on Wednesday,

27 September 2017 Announcement of the EGM poll results . . . . . . . . . . . . . . . Wednesday, 27 September 2017

Last day of dealing in the Shares on a

cum-entitlement basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 28 September 2017 First day of dealing in the Shares on an ex-entitlement basis . . . Friday, 29 September 2017

Latest time for lodging transfer of Shares

with the Hong Kong Share Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on

Tuesday, 3 October 2017

Closure of register of members of the Company for determining the Shareholders' entitlement

under the Bonus Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 4 October 2017

Record date for determining the Shareholders'

entitlements under the Bonus Issue . . . . . . . . . . . . . . . . . . . . Wednesday, 4 October 2017 Register of members of the Company re-open . . . . . . . . . . . . . . . . . Friday, 6 October 2017 Despatch of share certificates for the Bonus Shares . . . . . . . . . Thursday, 12 October 2017

Commencement of trading of the Bonus Shares . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on

Friday, 13 October 2017

All the time and dates herein refer to Hong Kong local time and dates. Such time and dates are indicative only, and may be extended or varied. Should there be any change in the said timetable, the Company will notify the Shareholders by way of announcement as and when appropriate.

ZHONG AN REAL ESTATE LIMITED 眾安房產有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 672)

Executive Directors:

Mr Shi Kancheng Ms Wang Shuiyun Ms Shen Tiaojuan Mr Zhang Jiangang Mr Jin Jianrong

Non-executive Director:

Ms Shen Li

Independent non-executive Directors:

Professor Pei Ker Wei Dr Loke Yu

Mr Zhang Huaqiao

To the Shareholders

Dear Sir or Madam

Registered office:

Cricket Square Hutchins Drive

P.O. Box 2681

Grand Cayman KY1-1111 Cayman Islands

Principal place of business in Hong Kong:

Room 4006, 40/F.,

China Resources Building 26 Harbour Road

Wanchai

Hong Kong

8 September 2017

PROPOSED BONUS ISSUE OF SHARES PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL AND NOTICE OF EXTRAORDINARY GENERAL MEETING INTRODUCTION

Reference is made to the announcement of the Company dated 30 August 2017 in respect of the proposed Bonus Issue and the proposed Increase in Authorised Share Capital.

The purpose of this circular is to provide you with further information relating to the resolutions to be proposed at the EGM for the approval of the Bonus Issue and the Increase in Authorised Share Capital together with the notice of the EGM.

PROPOSED BONUS ISSUE OF SHARES Basis of the Bonus Issue

The Board has resolved, subject to fulfillment of the conditions set out in the sub-section headed "Conditions of the Bonus Issue", to recommend the Bonus Issue on the basis of one Bonus Share for every one existing Share held by Qualifying Shareholders whose names are on the register of members of the Company on the Record Date.

The Bonus Shares will be credited as fully paid at par (HK$0.10) by way of capitalisation of an application of an amount of HK$291,829,840 in the share premium account of the Company.

Effect to the shareholding on the Bonus Issue

On the basis of 2,918,298,400 Shares in issue as at the Latest Practicable Date, and assuming no further Shares are issued or bought back before the Record Date, 2,918,298,400 Bonus Shares will be issued pursuant to the Bonus Issue.

After completion of the Bonus Issue, there will be a total of 5,836,596,800 Shares in the enlarged issued share capital of the Company.

Status of the Bonus Shares

The Bonus Shares will rank equally in all respects with the existing Shares then in issue, including any entitlement to dividends and other distributions the record date for which is on or after the date of allotment and issue of the Bonus Shares.

Application of Listing

Application will be made to the Listing Committee for the listing of, and permission to deal in, the Bonus Shares.

Conditions of the Bonus Issue

The Bonus Issue is conditional upon:

1. the approval of the Bonus Issue by an ordinary resolution of the Shareholders at the EGM;

2. the approval of the Increase in Authorised Share Capital by an ordinary resolution of the Shareholders at the EGM;

3. the Listing Committee granting the approval for the listing of, and permission to deal in, the Bonus Shares; and

4. compliance with the applicable legal procedures and requirements (if any) under the applicable laws of the Cayman Islands and the articles of association of the Company to effect the Bonus Issue and the Increase in Authorised Share Capital.

Certificates for the Bonus Shares

Subject to fulfillment of the conditions precedent to the Bonus Issue, certificates for the Bonus Shares are expected to be despatched to the Shareholders at their own risk on Thursday, 12 October 2017.

Reasons for the Bonus Issue

The Directors consider that the Bonus Issue will allow the Shareholders to enjoy a pro-rata increase in the number of Shares held by them without incurring any significant costs. It has the propensity to enhance the liquidity of the Shares in the market as the number of Shares in issue will increase following the Bonus Issue. As the Bonus Issue will also lower the price of the board lot of Shares, this will encourage ownership and is beneficial to the Company and the Shareholders.

Overseas Shareholders

The issue and allotment of Bonus Shares to Overseas Shareholders under the Bonus Issue may be subject to the laws and/or regulations of the relevant jurisdiction outside Hong Kong. Overseas Shareholders who are citizens, residents or nationals of any jurisdiction outside Hong Kong should keep themselves informed about and observe any applicable legal and/or regulatory requirements and, if in doubt as to any aspect of the Bonus Issue and/or the implications thereof on them, seek advice from the relevant professional adviser(s). It is the responsibilities of the Overseas Shareholders to satisfy themselves as to the full observance of the laws and regulations of the relevant jurisdictions in connection with their entitlements to the Bonus Issue (including but not limited to the obtaining of any governmental or other consent or payment of any transfer or other taxes due in respect of such jurisdictions). The Company is not responsible or liable for the legality and/or liability of any Overseas Shareholder's receipt and/or holding of the Bonus Share(s) to be allotted and issued and the Overseas Shareholder will bear such responsibility or liability personally.

As at the Latest Practicable Date, the Company had one Overseas Shareholder whose address as shown on the register of members of the Company is in the PRC.

Having made reasonable enquiries of the legal and regulatory requirements for extending the Bonus Issue to the Overseas Shareholder with registered address in the PRC and taking into account the opinion from the PRC legal advisers to the Company, the Directors are of the view that, it would not be impracticable or too burdensome for the Company to extend the Bonus Issue to the Overseas Shareholder whose address (as recorded in the register of members of the Company) is in the PRC. Accordingly, such Overseas Shareholder shall be Qualifying Shareholders.

In the event that there are as at the Record Date any Overseas Shareholder(s) with registered address(es) (in addition to the PRC) outside Hong Kong, the Company will consider the rights of such additional Overseas Shareholder(s) and the relevant arrangement in respect of the Bonus Issue for such Overseas Shareholder(s), including whether it is feasible to extend the Bonus Issue to such additional Overseas Shareholder(s). If, having considered the advice provided by foreign legal advisers, the Directors are of the view that it is necessary or expedient on account of either restrictions under the laws of the relevant place(s) or the requirements of the relevant regulatory body(ies) or stock exchange(s) in such place(s) not to issue the Bonus Shares to such Overseas Shareholder(s) who are otherwise entitled thereto, such Oversea Shareholder(s) will become Non-Qualifying Shareholder(s). Accordingly, those Non-Qualifying Shareholders(s) (if any) will not receive any Bonus Shares under the Bonus Issue.

Arrangements will be made for the Bonus Shares which would otherwise be transferred to such Non-Qualifying Shareholder(s) to be sold in the market as soon as possible after the Bonus Issue, and the proceeds from the sale thereof, after deduction of expenses and duties, will be distributed in Hong Kong dollars to the relevant Non-Qualifying Shareholder(s) in proportion to their respective entitlements provided that the relevant individual Shareholder's proportionate entitlement thereto exceeds HK$100. The Company will retain individual amounts of HK$100 or less for its own benefit. Payment for the above-mentioned proceeds will be made by cheques in Hong Kong dollars sent to the relevant Non-Qualifying Shareholders according to their addresses as recorded in the register of members of the Company as at the Record Date by ordinary post at their own risk.

Trading arrangements

Subject to (i) the granting of the listing of and permission to deal on the Stock Exchange and (ii) the compliance with the stock admission requirements of HKSCC, the Bonus Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date on which dealings in the Bonus Shares commence on the main board of the Stock Exchange or such other date as shall be determined by HKSCC. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Settlement of transactions between members of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter.

Subject to fulfillment of the conditions of the Bonus Issue, it is expected that certificates for the Bonus Shares will be despatched to Shareholders (except the Overseas Shareholders) at their own risk on Thursday, 12 October 2017 and the first day of dealing in the Bonus Shares will be on or about Friday, 13 October 2017.

Stamp duty in Hong Kong will be payable in respect of dealings in the Bonus Shares.

PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

In order to provide flexibility to accommodate future expansion and growth of the Group and in contemplation of the Bonus Issue, an ordinary resolution will be proposed at the EGM to approve an increase in the authorised share capital of the Company from HK$400,000,000 comprising 4,000,000,000 Shares to HK$1,000,000,000 comprising 10,000,000,000 Shares by the creation of an additional 6,000,000,000 Shares.

The Increase in Authorised Share Capital is not conditional upon the Bonus Issue being approved by Shareholders at the EGM.

ADJUSTMENT TO THE SHARE OPTIONS GRANTED UNDER THE SHARE OPTION SCHEME

The implementation of the Bonus Issue may lead to adjustments to (a) the number of Shares subject to the Share Options so far as unexercised; and/or (b) the subscription price; and/or (c) the maximum number of Shares available for subscription by the grantees of the Share Options granted by the Company. As the exact number of Bonus Shares will not be determined until the Record Date, the Company will notify the respective holders of the Share Options regarding the adjustments to be made, if any, pursuant to the respective terms and conditions of the Share Options.

CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company will be closed during the following periods:

1. for the purpose of determining Shareholders who are entitled to attend and vote at the EGM, the register of members will be closed from Monday, 25 September 2017 to Wednesday, 27 September 2017 (both days inclusive), during which period no transfer of Shares will be effected. In order to qualify for attending and voting at the EGM, all transfers of Shares, accompanied by the relevant share certificates, must be duly lodged with the Hong Kong Share Registrar, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong for registration no later than 4:30 p.m. on Friday, 22 September 2017; and

2. for the purpose of determining Shareholders who are qualified for the entitlement to the Bonus Issue, the register of members will be closed on Wednesday, 4 October 2017 during which no transfer of Shares will be effected. In order to qualify for the entitlement to the Bonus Issue, all transfers of Shares, accompanied by the relevant share certificates, must be duly lodged with the Hong Kong Share Registrar, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong for registration no later than 4:30 p.m. on Tuesday, 3 October 2017.

EGM

Set out on pages N-1 to N-3 of this circular is a notice convening the EGM at which resolutions will be proposed to approve the proposals relating to (a) the Bonus Issue and (b) the Increase in Authorised Share Capital.

A form of proxy for use at the EGM is also enclosed with this circular. If you are not able to attend the EGM, you may appoint a proxy/proxies to attend and vote at the EGM on your behalf by completing the form of proxy enclosed in accordance with the instructions printed thereon and return the duly completed form of proxy to the Hong Kong Share Registrar, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong as soon as practicable but in any event not less than 48 hours before the time appointed for holding the EGM (i.e. at or before 10:00 a.m. on Monday, 25 September 2017 (Hong Kong time)) or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM (or any adjournment thereof) if you so wish.

Having made all reasonable enquiries, to the best knowledge, information and belief of the Directors, apart from the pro-rata entitlements to the Bonus Issue as disclosed in this circular, no Shareholder has a material interest in the Bonus Issue or the Increase in Authorised Share Capital and no Shareholder is required to abstain from voting on any resolution to be proposed at the EGM.

VOTING BY POLL

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Accordingly, all the resolutions put to vote at the EGM will be taken by way of poll.

After the conclusion of the EGM, the poll results will be published on the respective websites of the Stock Exchange and the Company.

RECOMMENDATIONS

The Board considers that the ordinary resolutions to be proposed at the EGM are in the interests of the Company and the Shareholders as a whole and recommends the Shareholders to vote in favour of such resolutions at the EGM.