sino-ocean land (perpetual finance) limited · 2013. 10. 28. · generally are open for business in...

Sino-Ocean Land (Perpetual Finance) Limited (Incorporated in British Virgin Island with limited liability)

The Board of Directors of Sino-Ocean Land (Perpetual Finance) Limited (the

“Company”) announces that Sino-Ocean Land Holdings Limited, the Company’s

parent company, has released a circular with notice of extraordinary general meeting

in relation to connected transactions and the circular as attached has been posted on

the websites of The Stock Exchange of Hong Kong Limited and Sino-Ocean Land

Holdings Limited.

By Order of the Board

Sino-Ocean Land (Perpetual Finance) Limited

SUM Pui Ying

Director

28 October 2013

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

If you have sold or transferred all your shares in Sino-Ocean Land Holdings Limited, you should at once hand this circularto the purchaser or transferee or to the bank, a licensed securities dealer or other agent through whom the sale or transfer waseffected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for thecontents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liabilitywhatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

(Stock Code: 03377)

(1) CONNECTED TRANSACTIONS —SUBSCRIPTION OF NEW SHARES BY CONNECTED PERSONS

UNDER SPECIFIC MANDATE

(2) DISCLOSEABLE AND CONNECTED TRANSACTION —ACQUISITION OF REMAINING INTERESTS IN TWO PROJECTS

Financial adviser to the Company

Independent Financial Adviser tothe Independent Board Committee and the Independent Shareholders

Anglo Chinese Corporate Finance, Limited

A letter from the Board is set out on pages 7 to 34 of this circular and a letter from the Independent Board Committee is setout on pages 35 to 36 of this circular. A letter from the Independent Financial Adviser containing its advice to the IndependentBoard Committee and the Independent Shareholders is set out on pages 37 to 59 of this circular.

A notice convening the EGM of the Company to be held at Salon Room VI, 3/F, JW Marriott Hotel, Pacific Place, 88Queensway, Hong Kong on Tuesday, 19 November 2013 at 10:00 a.m. is set out on pages 82 to 84 of this circular. Whether ornot you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with theinstructions printed thereon and return it to the Company’s share registrar, Computershare Hong Kong Investor Services Limitedat 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not lessthan 48 hours before the time appointed for holding the meeting or any adjournment thereof (as the case may be). Completionand return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournmentthereof (as the case may be) if you so wish.

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

28 October 2013

LR14A.58(3)(b)

LR14A.59(1)

LR13.51AApp 1, Part B 1

Page

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

LETTER FROM THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . . . . . . . . . . . 35

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER . . . . . . . . . . . . . . . . . . . . . 37

APPENDIX I — PROPERTY VALUATION REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . 60

APPENDIX II — GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

CONTENTS

— i —

In this circular, unless the context otherwise requires, the following terms shall have the

following meanings:

“Acquisition” the proposed acquisition of a 20% interests in the CBD

Project and approximately 10% interests in the Dalian Project

by the Company pursuant to the Master Acquisition

Agreement

“Acquisition Completion Date” the second Business Day following the date on which all

conditions precedent under the Master Acquisition Agreement

are fulfilled or waived or such other date as the parties may

agree

“Affiliate(s)” any person directly or indirectly controlling, controlled by or

under common control with the subject person, where

“control” means the possession, directly or indirectly, of the

power to direct or cause the direction of the management and

policies of a person, whether through the ownership of voting

securities, by contract or otherwise, and includes (a)

ownership directly or indirectly of more than 50% of the

shares in issue or other equity interests of such person, (b)

possession directly or indirectly of more than 50% of the

voting power of such person or (c) the power directly or

indirectly to appoint a majority of the members of the board

of directors or similar governing body of such person

“Announcement” the announcement dated 27 September 2013 issued by the

Company in relation to, among others, the Subscription

Agreements and the Master Acquisition Agreement and the

transactions contemplated thereunder

“associate(s)” having the meaning ascribed to such term in the Listing Rules

“Board” the board of Directors

“Business Day” any day (excluding Saturday and Sunday) on which banks

generally are open for business in Hong Kong

“BVI” the British Virgin Islands

“CBD Interests” the shares in Target Company One and the corresponding

shareholder’s loan advanced by the Nan Fung Group to Target

Company One proposed to be transferred by the Vendor to the

Purchaser under the Master Acquisition Agreement

DEFINITIONS

— 1 —

“CBD Project” a commercial property development project located on the

land with a site area of approximately 11,000 square metres

located at Plot Z6, Guanghua Road, Chaoyang District,

Beijing, the PRC, of which, the Group effectively owns 80%

and the Nan Fung Group effectively owns 20% as at the Latest

Practicable Date

“China Life” China Life Insurance Company Limited (中國人壽保險股份有限公司), a joint stock limited liability company established

under the laws of the PRC, the shares of which are listed on

the Main Board of the Stock Exchange (Stock Code: 2628)

“China Life Group” China Life Insurance (Group) Company, a company

established under the laws of the PRC and the controlling

shareholder of China Life

“China Life Subscription” the subscription of 635,941,967 Shares by China Life

pursuant to the terms of the China Life Subscription

Agreement

“China Life Subscription

Agreement”

the subscription agreement dated 27 September 2013 entered

into between the Company and China Life

“Company” Sino-Ocean Land Holdings Limited, a company incorporated

in Hong Kong with limited liability, the Shares of which are

listed on the Main Board of the Stock Exchange

“Completion” completion of the China Life Subscription or the Nan Fung

Subscription (as the case may be) in accordance with the

terms and conditions as set out in the relevant Subscription

Agreement

“Completion Date” the second Business Day following the date on which all

conditions precedent under the relevant Subscription

Agreement are fulfilled or waived or such other date as the

Company and the relevant Subscriber may agree

“connected person(s)” having the meaning ascribed to such term in the Listing Rules

“Dalian Interests” the shares in Target Company Two, Target Company Three,

Target Company Four and Target Company Five and the

corresponding shareholder’s loan advanced by the Nan Fung

Group to each of them which are proposed to be transferred

by the Vendor to the Purchaser under the Master Acquisition

Agreement

DEFINITIONS

— 2 —

“Dalian Project” a residential and retail complex development project located

on the land with a site area of approximately 749,000 square

metres located at Plots A, B, C and E, Ocean Diamond Bay,

East of Gongxing Street and Dongbei Road, South of

Dongfang Road, Ganjingzi District, Dalian, Liaoning

Province, the PRC of which, the Group effectively owns

approximately 90% and the Nan Fung Group effectively owns

approximately 10% as at the Latest Practicable Date

“Director(s)” director(s) of the Company

“DTZ” DTZ Debenham Tie Leung Limited, an independent property

valuer

“EGM” an extraordinary general meeting of the Company to be

convened and held at Salon Room VI, 3/F, JW Marriott Hotel,

Pacific Place, 88 Queensway, Hong Kong at 10:00 a.m. on

Tuesday, 19 November 2013, for the purpose of considering

and, if thought fit, approving (i) each of the Subscription

Agreements and the transactions contemplated thereunder,

including the grant of the Specific Mandate for the allotment

and issue of the Subscription Shares; and (ii) the Master

Acquisition Agreement and the transaction contemplated

thereunder

“Executive” the Executive Director of the Corporate Finance Division of

the Securities and Futures Commission of Hong Kong or any

delegate of the Executive Director

“Fame Gain” Fame Gain Holdings Limited (名得控股有限公司), a company

incorporated in BVI and an indirect wholly-owned subsidiary

of the Company

“Group” the Company and its subsidiaries

“HK$” Hong Kong dollars, the lawful currency of Hong Kong

“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the People’s

Republic of China

“Independent Board Committee” an independent board committee of the Company comprising

Mr. Tsang Hing Lun, Mr. Gu Yunchang, Mr. Han Xiaojing and

Mr. Zhao Kang, each an independent non-executive Director

DEFINITIONS

— 3 —

“Independent Financial Adviser”

or “Anglo Chinese”

Anglo Chinese Corporate Finance, Limited, a corporation

licensed to carry out Type 1 (dealing in securities), Type 4

(advising on securities), Type 6 (advising on corporate

finance) and Type 9 (asset management) regulated activities

under the SFO and the independent financial adviser of the

Company to advise the Independent Board Committee and the

Independent Shareholders in relation to the reasonableness

and fairness of the terms of the Subscription Agreements and

the Master Acquisition Agreement and the transactions

contemplated thereunder

“Independent Shareholders” the Shareholders other than those who have a material interest

in the relevant resolution to be proposed at the EGM

“Latest Practicable Date” 23 October 2013, being the latest practicable date prior to the

printing of this circular for the purpose of ascertaining certain

information contained in this circular

“Listing Rules” the Rules Governing the Listing of Securities on The Stock

Exchange of Hong Kong Limited

“Master Acquisition Agreement” the master acquisition agreement dated 27 September 2013

entered into between Fame Gain and Nan Fung China in

respect of the Acquisition

“Nan Fung China” Nan Fung Investment China Holdings Limited, a company

incorporated in the BVI and a member of the Nan Fung Group

“Nan Fung Group” a privately owned group of companies and business interests

under the control of the estate of Mr. Chen Din Hwa

(deceased) carrying on business under the trade name of “Nan

Fung” which, holds approximately 14.11% of the issued share

capital of the Company as at the Latest Practicable Date and

is a substantial shareholder of the Company, is principally

engaged in the business of property development, property

investment, construction, property management, investment

and financing and “a member of the Nan Fung Group” shall

mean any of them

“Nan Fung Subscription” the subscription of 686,611,211 Shares by Spring Glory

pursuant to the Nan Fung Subscription Agreement

“Nan Fung Subscription

Agreement”

the subscription agreement dated 27 September 2013 entered

into between the Company and Spring Glory

“Perpetual Convertible

Securities”

US$900 million (equivalent to approximately RMB5,508

million) perpetual subordinated convertible securities

callable 2015 issued by Sino-Ocean Land Capital Finance

Limited, a wholly-owned subsidiary of the Company, on 27

July 2010

DEFINITIONS

— 4 —

“PRC” the People’s Republic of China, which for the purpose of this

circular and unless the context suggests otherwise, shall

exclude Hong Kong, the Macau Special Administrative

Region and Taiwan

“Purchaser” Fame Gain or its nominee(s) whom it has procured to

purchase the CBD Interests and the Dalian Interests

“RMB” Renminbi, the lawful currency of the PRC

“SFO” Securities and Futures Ordinance (Chapter 571 of the laws of

Hong Kong), as amended or supplemented from time to time

“Share(s)” ordinary share(s) in the capital of the Company with nominal

value of HK$0.80 each

“Shareholder(s)” holder(s) of Share(s)

“Specific Mandate” the mandate to allot and issue the Subscription Shares to be

sought at the EGM

“Spring Glory” Spring Glory Investment Limited (源榮投資有限公司), a

company incorporated in Hong Kong and a member of the

Nan Fung Group

“Stock Exchange” The Stock Exchange of Hong Kong Limited

“Subscriber(s)” China Life and Spring Glory

“Subscriber Warranties” the representations and warranties of each Subscriber set forth

in the relevant Subscription Agreement

“Subscription(s)” the China Life Subscription and the Nan Fung Subscription

“Subscription Agreement(s)” the China Life Subscription Agreement and the Nan Fung

Subscription Agreement

“Subscription Price” HK$4.74 per Subscription Share

“Subscription Shares” a total of 1,322,553,178 Shares to be subscribed for by the

Subscribers under the Subscription Agreements

“Super Goal” Super Goal Development Limited (崇高發展有限公司), a

company incorporated in Hong Kong and a wholly-owned

subsidiary of Target Company One

“substantial shareholder” having the meaning ascribed to such term in the Listing Rules

“Target Company One” Sturdy Talent Limited, a company incorporated in the BVI

and a member of the Nan Fung Group as at the Latest

Practicable Date

DEFINITIONS

— 5 —

“Target Company Two” Neo Vast Limited (新浩有限公司), a company incorporated in

the BVI, which is approximately 14.29% held by the Nan

Fung Group and is an indirect non-wholly owned subsidiary

of the Company as at the Latest Practicable Date

“Target Company Three” Hero Field Investments Limited (英域投資有限公司), a

company incorporated in the BVI which is approximately

14.29% held by the Nan Fung Group and is an indirect

non-wholly owned subsidiary of the Company as at the Latest

Practicable Date

“Target Company Four” Triumph Source Limited, a company incorporated in the BVI

which is approximately 10.00% held by the Nan Fung Group

and is an indirect non-wholly owned subsidiary of the

Company as at the Latest Practicable Date

“Target Company Five” Alpha Anchor Limited, a company incorporated in the BVI

which is approximately 10.00% held by the Nan Fung Group

and is an indirect non-wholly owned subsidiary of the

Company as at the Latest Practicable Date

“Target Companies” Target Company One, Target Company Two, Target Company

Three, Target Company Four and Target Company Five

“Takeovers Code” The Hong Kong Code on Takeovers and Mergers

“US$” US dollars, the lawful currency of the United States of

America

“US Dollar Equivalent” in respect of any amount, the US$ equivalent thereof

calculated based upon the average rate of the mid-exchange

rates quoted by The Hongkong and Shanghai Banking

Corporation and Bank of China (Hong Kong) Limited on one

Business Day before the Completion Date

“Vendor” Nan Fung China or its nominee(s) whom it has procured to

sell the CBD Interests and the Dalian Interests

“Warranties” the representations and warranties of the Company set forth in

the relevant Subscription Agreement

“%” per cent.

Unless otherwise specified, amounts denominated in US$ and HK$ have been translated, for

illustration purposes only, into RMB in this circular at a rate of RMB6.12 : US$1.00 and HK$1.27 :

RMB1.00, respectively.

DEFINITIONS

— 6 —

(Stock Code: 03377)

Executive Directors:

Mr. Li Ming

Mr. Chen Runfu

Mr. Wen Hai Cheng

Non-executive Directors:

Ms. Liu Hui

Mr. Yang Zheng

Mr. Cheung Vincent Sai Sing

Independent non-executive Directors:

Mr. Tsang Hing Lun

Mr. Gu Yunchang

Mr. Han Xiaojing

Mr. Zhao Kang

Registered Office:

Suite 601, One Pacific Place

88 Queensway

Hong Kong

Principal place of business:

31-33 Floor, Tower A

Ocean International Center

56 Dongsihuanzhonglu

Chaoyang District

Beijing

PRC

28 October 2013

To the Shareholders

Dear Sir or Madam,




INTRODUCTION

Reference is made to the Announcement and the announcement of the Company dated 21 October

2013 regarding delay in despatch of circular.

LETTER FROM THE BOARD

— 7 —

LR2.14

The purpose of this circular is (i) to provide the Shareholders with further information on the

Subscription Agreements and the Master Acquisition Agreement and the transactions contemplated

thereunder; (ii) to set out the recommendations of the Independent Board Committee regarding the

Subscription Agreements and the Master Acquisition Agreement and the transactions contemplated

thereunder; (iii) to set out the letter from Anglo Chinese, the Independent Financial Adviser to the

Independent Board Committee and the Independent Shareholders, in respect of the reasonableness and

fairness of the terms and conditions of the Subscription Agreements and the Master Acquisition

Agreement and the transactions contemplated thereunder; and (iv) to give the Shareholders a notice

of the EGM and other information in accordance with the requirements of the Listing Rules.

SUBSCRIPTION AGREEMENTS

China Life Subscription Agreement

Date:

27 September 2013

Issuer:

The Company

Subscriber:

China Life

The Subscription Shares:

China Life shall subscribe for 635,941,967 Shares, representing approximately 10.68% of the

existing issued share capital of the Company as at the Latest Practicable Date, and approximately

8.74% of the issued share capital of the Company as enlarged by the allotment and issue of the

Subscription Shares (assuming no other Shares will be issued prior to Completion).

The Subscription Price:

The Subscription Price is HK$4.74 per Share. The US Dollar Equivalent of the aggregate

Subscription Price of HK$3,014,364,924 (equivalent to RMB2,373,515,688) will be payable by China

Life in cash at completion of the China Life Subscription on the Completion Date.


— 8 —

LR14A.58(1)

LA14A.59(2)(a)/(d)

LR14A.59(2)(b)/(c)App1, Part B(10)

Conditions of the China Life Subscription:

(A) The obligation of China Life to complete the China Life Subscription is subject to the

fulfillment, prior to or simultaneously with Completion, of the following conditions, any

one or more of which may be waived by China Life (except that conditions (iii) and (iv)

cannot be waived):

(i) there not having come to the attention of China Life at any time prior to Completion

any breach of, or any event rendering any of the Warranties untrue, incorrect or

misleading;

(ii) the Company having performed and complied in all respects with all of its agreements

and obligations contained in the China Life Subscription Agreement that are required

to be performed or complied with by it on or before Completion;

(iii) the Independent Shareholders having approved the China Life Subscription

Agreement and the transaction contemplated thereunder (including, among other

things, the allotment and issue of the Subscription Shares under the China Life

Subscription Agreement) at the EGM;

(iv) the Listing Committee of the Stock Exchange having granted listing of and permission

to deal in the Subscription Shares under the China Life Subscription Agreement (and

such grant of listing and permission to deal not subsequently being revoked prior to

the delivery of definitive share certificate(s) representing the Subscription Shares);

(v) there not having occurred any material adverse change, or development (including the

introduction of any new law or change in existing laws and regulations (or the judicial

interpretation thereof) or any other similar event) (whether or not permanent)

involving a prospective material adverse change, in the condition, financial or

otherwise, or in the earnings, business affairs, trading position or prospects of any

member of the Group or the Group as a whole, whether or not arising in the ordinary

course of business; and

(vi) there not having occurred any developments which may render Completion by China

Life pursuant to the terms of the China Life Subscription Agreement unlawful, in

breach of regulations or impossible (including the introduction of any new law or

change in existing laws and regulations (or the judicial interpretation thereof) or any

other similar event) (whether or not permanent).


— 9 —

(B) The Company’s obligation to complete the allotment and issue of the Subscription Shares

under the China Life Subscription Agreement is subject to the fulfillment by China Life,

prior to or simultaneously with Completion, of the following conditions, any one or more

of which may be waived by the Company:

(i) the total amount of gross proceeds to be received by the Company pursuant to the

China Life Subscription Agreement and other subscription agreements approved by

the Independent Shareholders at the EGM shall be no less than HK$5.5 billion

(equivalent to approximately RMB4.3 billion);

(ii) there not having come to the attention of the Company at any time prior to Completion

any breach of, or any event rendering any of the Subscriber Warranties given by China

Life untrue, incorrect or misleading;

(iii) China Life having performed and complied in all respects with all of its agreements

and obligations contained in the China Life Subscription Agreement that are required

to be performed or complied with by it on or before Completion; and

(iv) China Life having duly executed the application letter for Shares in the agreed form

addressed to the Company for the Subscription Shares to be issued and allotted to it.

If the conditions set out above are not fulfilled or waived in accordance with the terms of the

China Life Subscription Agreement on or before 27 November 2013 or such later date as may be

agreed between the parties, the obligations and liabilities of the Company and China Life in relation

to the China Life Subscription will (subject to limited exceptions) be terminated, and, unless otherwise

agreed by the parties, neither the Company nor China Life will have any claim against the other (save

for those arising out of antecedent breach).

The minimum gross proceeds of HK$5.5 billion (equivalent to approximately RMB4.3 billion)

as stated in condition (B)(i) above was determined after taking into account of (i) the Company’s

financial position and cash resources as at 30 June 2013, the full redemption of the Perpetual

Convertible Securities during the period from June to September 2013 and the available cash and bank

balance of the Group after such redemption; (ii) the financing needs for potential new projects of the

Company located in first and second tier cities including Beijing, Shenzhen and Zhongshan and the

estimated land acquisition and project development costs to be incurred in 2013 and 2014; and (iii)

the requirement to maintain the similar level of the Company’s debt-to-equity ratio, after the full

redemption of the Perpetual Convertible Securities, which was given an equity accounting treatment

in line with the applicable accounting standards.

Each of the Company and China Life will use its reasonable endeavours to fulfill the conditions

set out above. As at the Latest Practicable Date, to the best of the Company’s knowledge after due

enquiries, none of the parties had any intention to waive any conditions under the China Life

Subscription Agreement and none of the conditions in the China Life Subscription Agreement had

been fulfilled. The Company would only consider waiving condition (B)(i) above if and only if either

the China Life Subscription or the Nan Fung Subscription is not approved at the EGM and there are

uncontrollable market conditions arises such as a substantial decrease in the market price of the Shares


— 10 —

compared to the price per Share under the China Life Subscriptions. Further, in considering whether

to waive the above conditions, the Company will carefully consider the reason(s) of the inability to

fulfill such condition, the materiality of such non-fulfillment and the impact it will have on the

Company and the transactions under the China Life Subscription Agreement, and the decision to waive

any condition will only be made if the Board considers that it is in the best interest of the Company

and the Shareholders as a whole. The China Life Subscription is not conditional on the Nan Fung

Subscription, however the Company intends to complete the Subscriptions simultaneously.

Completion:

Completion of the China Life Subscription will take place on the Completion Date, being the

second Business Day following the date on which all conditions precedent in the China Life

Subscription Agreement as mentioned above are fulfilled or waived or such other date as the Company

and China Life may agree.

Restriction on disposal:

China Life has undertaken that it will not during the two-year period commencing on the

Completion Date, dispose of or otherwise create any options, rights, interests or encumbrances in

respect of, any of the 635,941,967 Shares subscribed under the China Life Subscription Agreement or

any beneficial or other interests therein, provided that China Life will not be prevented from

transferring such Shares to any of its wholly-owned subsidiaries (the “Permitted China LifeTransferees”) where:

(i) China Life shall only effect the proposed transfer to any Permitted China Life Transferee(s)

by giving a written notice to the Company with 14 Business Days in advance of the

proposed transfer date;

(ii) China Life will be responsible for ensuring that the Permitted China Life Transferees will

comply with the above restriction on disposal and undertake in writing to the Company that

they will be bound by the terms of the China Life Subscription Agreement as if they were

named as the subscriber therein; and

(iii) if at any time prior to the expiry of the two-year period commencing on the Completion

Date, any of the Permitted China Life Transferees ceases to be a wholly-owned subsidiary

of China Life, such Permitted China Life Transferee shall (and China Life shall procure that

it shall), before ceasing to be a wholly-owned subsidiary of China Life, fully and

effectively transfer its entire interest in any Subscription Shares to China Life.

Board representation:

Upon Completion, for so long as China Life directly or indirectly holds not less than 24% of the

total issued share capital of the Company, China Life will have the right to nominate (i) an executive

Director to the Board (in addition to the two non-executive Directors nominated by China Life to the

Board); and (ii) a member of senior management of the Company, subject to compliance with the

requirements for directors and senior management under the applicable laws, regulations, the Listing


— 11 —

Rules and the Takeovers Code. The Company will, subject to compliance with laws, regulations, the

Listing Rules, the Takeovers Code and the articles of association of the Company, procure such

persons nominated be appointed as a Director of the Board and a member of senior management of

the Company as soon as practicable. The shareholding of 24% that China Life shall maintain before

it can nominate the new executive Director and the senior management was a commercial decision

determined with reference to the existing shareholding structure of the Company prior to the

Subscriptions and based on arm’s length negotiations between the Company and China Life. Such

nomination rights of an executive Director and senior management are not in breach of the articles of

association of the Company.

The Directors consider that the right to nominate an executive Director and senior management

can help strengthen and diversify the composition of the Board and enhance oversight on the Board.

The Board is currently made up of Directors with backgrounds mainly from the property industry in

the PRC. Given that China Life is strong in areas of financing and fund-raising, with ample

knowledge, experiences and qualifications in the finance, insurance and banking sectors in the PRC,

the addition of an executive Director and senior management as nominated by China Life (if

appointed) who would be involved in the day-to-day management of the Company could greatly assist

the Board in those areas, and better equip the Board to manage the Company’s business, which is in

the best interest of the Company and the Shareholders as a whole.

The right to nominate an executive Director by China Life is the same right available to all

Shareholders as provided in the articles of association of the Company and thus the Directors do not

consider the granting of such right is a preferential treatment to China Life. The appointment of any

candidates nominated by China Life to the Board is still subject to compliance with the articles of

association of the Company, the applicable laws, regulations, the Listing Rules and the Takeovers

Code. In particular, pursuant to the Listing Rules and the articles of association of the Company, such

appointment of an executive Director will be subject to evaluation and recommendation of the

nomination committee of the Company according to its objective criteria, and subject to the approval

of the Board and re-election by the Shareholders at the first general meeting after appointment.

Further, such Director may also be removed by the Shareholders by ordinary resolution before his or

her term of office has expired. The appointment of senior management of the Company as nominated

by China Life would also be subject to the approval by the Board taking into account the suitability

of the candidate nominated. Shareholders other than the Nan Fung Group and China Life can also

nominate suitable candidates for Director and/or senior management for the Board’s consideration

should they so wish.

Undertaking with respect to repurchase of Shares:

The Company has undertaken to China Life that it shall not undertake any repurchase or

cancellation of Shares, if, purely based on the shareholding information of the Company as disclosed

in the disclosure of interests notices on the website of the Stock Exchange and the Company’s

calculation solely based on such information, such repurchase or cancellation of Shares would cause

the shareholding of China Life in the Company to exceed 30%, resulting in a mandatory general offer

obligation under the Takeovers Code.


— 12 —

Nan Fung Subscription Agreement

Date:

27 September 2013

Issuer:

The Company

Subscriber:

Spring Glory

The Subscription Shares:

Spring Glory shall subscribe for 686,611,211 Shares, representing approximately 11.53% of the

existing issued share capital of the Company as at the Latest Practicable Date, and approximately

9.43% of the issued share capital of the Company as enlarged by the allotment and issue of the

Subscription Shares (assuming no other Shares will be issued prior to Completion).

The Subscription Price:

The Subscription Price is HK$4.74 per Share. The US Dollar Equivalent of the aggregate

Subscription Price of HK$3,254,537,140 (equivalent to RMB2,562,627,669) will be payable by Spring

Glory in cash at completion of the Nan Fung Subscription on the Completion Date.

Conditions of the Nan Fung Subscription:

(A) The obligation of Spring Glory to complete the Nan Fung Subscription is subject to the

fulfillment, prior to or simultaneously with Completion, of the following conditions, any

one or more of which may be waived by Spring Glory (except that conditions (iii) to (v)

cannot be waived):

(i) there not having come to the attention of Spring Glory at any time prior to Completion

any breach of, or any event rendering any of the Warranties untrue, incorrect or

misleading;

(ii) the Company having performed and complied in all respects with all of its agreements

and obligations contained in the Nan Fung Subscription Agreement that are required

to be performed or complied with by it on or before Completion;

(iii) the Independent Shareholders having approved the Nan Fung Subscription Agreement

and the transaction contemplated thereunder (including, among other things, the

allotment and issue of the Subscription Shares under the Nan Fung Subscription

Agreement) at the EGM;


— 13 —

LR14A.58(1)LR14A.59(2)(a)/(d)

LA14A.59(2)(b)App1, Part B(10)

LR14A.59(2)(c)

(iv) the Listing Committee of the Stock Exchange having granted listing of and permission

to deal in the Subscription Shares under the Nan Fung Subscription Agreement (and

such grant of listing and permission to deal not subsequently being revoked prior to

the delivery of definitive share certificate(s) representing the Subscription Shares);

(v) the Acquisition pursuant to the Master Acquisition Agreement having been completed;

(vi) there not having occurred any material adverse change, or development (including the

introduction of any new law or change in existing laws and regulations (or the judicial

interpretation thereof) or any other similar event) (whether or not permanent)

involving a prospective material adverse change, in the condition, financial or

otherwise, or in the earnings, business affairs, trading position or prospects of any

member of the Group or the Group as a whole, whether or not arising in the ordinary

course of business; and

(vii) there not having occurred any developments which may render Completion by Spring

Glory pursuant to the terms of the Nan Fung Subscription Agreement unlawful, in

breach of regulations or impossible (including the introduction of any new law or

change in existing laws and regulations (or the judicial interpretation thereof) or any

other similar event) (whether or not permanent).

(B) The Company’s obligation to complete the allotment and issue of the Subscription Shares

under the Nan Fung Subscription Agreement is subject to the fulfillment by Spring Glory,

prior to or simultaneously with Completion, of the following conditions, any one or more

of which may be waived by the Company (except that condition (ii) cannot be waived):

(i) the total amount of gross proceeds to be received by the Company pursuant to the Nan

Fung Subscription Agreement and other subscription agreements approved by the

Independent Shareholders at the EGM shall be no less than HK$5.5 billion (equivalent

to approximately RMB4.3 billion);

(ii) the Acquisition pursuant to the Master Acquisition Agreement having been completed;

(iii) there not having come to the attention of the Company at any time prior to Completion

any breach of, or any event rendering any of the Subscriber Warranties given by

Spring Glory untrue, incorrect or misleading;

(iv) Spring Glory having performed and complied in all respects with all of its agreements

and obligations contained in the Nan Fung Subscription Agreement that are required

to be performed or complied with by it on or before Completion; and

(v) Spring Glory having duly executed the application letter for Shares in the agreed form

addressed to the Company for the Subscription Shares to be issued and allotted to it.


— 14 —

If the conditions set out above are not fulfilled or waived in accordance with the terms of the Nan

Fung Subscription Agreement on or before 27 November 2013 or such later date as may be agreed

between the parties, the obligations and liabilities of the Company and Spring Glory in relation to the

Nan Fung Subscription will (subject to limited exceptions) be terminated, and, unless otherwise

agreed by the parties, neither the Company nor Spring Glory will have any claim against the other

(save for those arising out of antecedent breach).

The minimum gross proceeds of HK$5.5 billion (equivalent to approximately RMB4.3 billion)

as stated in condition (B)(i) above was determined based on the reasons set out on page 10 of this

circular.

Each of the Company and Spring Glory will use its reasonable endeavours to fulfill the

conditions set out above. As at the Latest Practicable Date, to the best of the Company’s knowledge

and after due enquiries, none of the parties had any intention to waive any conditions under the Nan

Fung Subscription Agreement and none of the conditions in the Nan Fung Subscription Agreement had

been fulfilled. The Company would only consider waiving condition (B)(i) above if and only if either

the China Life Subscription or the Nan Fung Subscription is not approved at the EGM and there are

uncontrollable market conditions arises such as a substantial decrease in the market price of the Shares

compared to the price per Share under the Nan Fung Subscription. Further, in considering whether to

waive the above conditions, the Company will carefully consider the reason(s) of the inability to fulfill

such condition, the materiality of such non-fulfillment and the impact it will have on the Company and

the transactions under the Nan Fung Subscription Agreement, and the decision to waive any condition

will only be made if the Board considers that it is in the best interest of the Company and the

Shareholders as a whole. The Nan Fung Subscription is not conditional on the China Life Subscription,

however the Company intends to complete the Subscription simultaneously.

Completion:

Completion of the Nan Fung Subscription will take place on the Completion Date, being the

second Business Day following the date on which all conditions precedent in the Nan Fung

Subscription Agreement as mentioned above are fulfilled or waived or such other date as the Company

and Spring Glory may agree.

Restriction on disposal:

Spring Glory has undertaken that it will not during the two-year period commencing on the

Completion Date, dispose of or otherwise create any options, rights, interests or encumbrances in

respect of, any of the 686,611,211 Shares subscribed under the Nan Fung Subscription Agreement or

any beneficial or other interests therein, provided that Spring Glory will not be prevented from

transferring such Shares to any of its Affiliates (the “Permitted Nan Fung Transferees”) where:

(i) Spring Glory shall only effect the proposed transfer to any Permitted Nan Fung

Transferee(s) by giving a written notice to the Company with 14 Business Days in advance

of the proposed transfer date;


— 15 —

(ii) Spring Glory will be responsible for ensuring that the Permitted Nan Fung Transferees will

comply with the above restriction on disposal and undertake in writing to the Company that

they will be bound by the terms of the Nan Fung Subscription Agreement as if they were

named as the subscriber therein; and

(iii) if at any time prior to the expiry of the two-year period commencing on the Completion

Date, any of the Permitted Nan Fung Transferees ceases to be an Affiliate of Spring Glory,

such Permitted Nan Fung Transferee shall (and Spring Glory shall procure that it shall),

before ceasing to be an Affiliate of Spring Glory, fully and effectively transfer its entire

interest in any Subscription Shares to Spring Glory.

Board representation:

Upon Completion, for so long as Spring Glory together with its Affiliates hold no less than 16%

of the total issued share capital of the Company, Spring Glory will have the right to nominate an

executive Director to the Board (in addition to the non-executive Director nominated by the Nan Fung

Group to the Board), subject to compliance with the requirements for directors under the applicable

laws, regulations, the Listing Rules and the Takeovers Code. The Company will, subject to compliance

with laws, regulations, the Listing Rules, the Takeovers Code and the articles of association of the

Company, procure such person nominated be appointed as a Director of the Board as soon as

practicable. The shareholding of 16% that Spring Glory and its Affiliates shall maintain before it can

nominate the new executive Director was a commercial decision determined with reference to the

existing shareholding structure of the Company prior to the Subscriptions and based on arm’s length

negotiations between the Company and Spring Glory. Such nomination right of an executive Director

is not in breach of the articles of association of the Company.

The Directors consider that the right to nominate an executive Director can help strengthen and

diversify the composition of the Board and enhance oversight on the Board. The Board is currently

made up of Directors with backgrounds mainly from the property industry in the PRC, and the Nan

Fung Group is very experienced in developing high-end residential project in Hong Kong with well

managed site planning experience. The addition of an executive Director nominated by the Nan Fung

Group (if appointed) who would be involved in the day-to-day management of the Company could

greatly assist the Board by sharing his/her experience in high-end residential property projects in

Hong Kong.


— 16 —

The right to nominate an executive Director by Spring Glory is the same right available to all

Shareholders as provided in the articles of association of the Company and for the same reasons about

the nomination procedures and the retirement and appointment procedures as set out the in the section

“China Life Subscription Agreement — Board representation” above, the Directors do not consider

granting of such right is a preferential treatment to Spring Glory.

SPECIFIC MANDATE TO ISSUE THE SUBSCRIPTION SHARES

The Subscription Shares represent approximately 22.21% of the issued share capital of the

Company as at the Latest Practicable Date, and approximately 18.17% of the issued share capital of

the Company as enlarged by the allotment and issue of the Subscription Shares (assuming no other

Shares will be issued prior to Completion).

The Company will seek the Specific Mandate from the Independent Shareholders at the EGM for

the allotment and issue of the Subscription Shares.

The Subscription Price was determined with reference to the prevailing market price of the

Shares and was negotiated on an arm’s length basis between the Company and each of China Life and

Spring Glory respectively. The Subscription Price represents (i) a premium of approximately 1.72%

to the closing price of HK$4.66 per Share as quoted on the Stock Exchange on 27 September 2013,

being the date of the Subscription Agreements; (ii) a premium of approximately 1.41% to the average

closing price of HK$4.67 per Share as quoted on the Stock Exchange for the last five consecutive

trading days up to and including 27 September 2013; (iii) a premium of approximately 0.77% to the

average closing price of HK$4.70 per Share as quoted on the Stock Exchange for the last 20

consecutive trading days up to and including 27 September 2013; (iv) a discount of approximately

1.04% to the closing price of HK$4.79 per Share as quoted on the Stock Exchange as at the Latest

Practicable Date; and (v) a discount of approximately 38.91% to the net asset value of the Company

of HK$7.76 as at 30 June 2013.

APPLICATION FOR LISTING

Application will be made by the Company to the Stock Exchange for the listing of and

permission to deal in the Subscription Shares.


— 17 —

LR14A.59(2)(b)

EFFECTS ON SHAREHOLDING STRUCTURE OF THE COMPANY

Set out below is the shareholding structure of the Company (i) as at the Latest Practicable Date;

and (ii) immediately after completion of the Subscriptions (assuming no other Shares will be issued

prior to Completion):

Name of ShareholdersShareholding as at the Latest

Practicable DateShareholding immediately aftercompletion of the Subscriptions

Number of Shares Approximate % Number of Shares Approximate %

China Life (Note i) 1,477,595,944 24.81% 2,113,537,911 29.04%

Mr. Chen Din Hwa

(deceased) (Note ii) 840,158,610 14.11% 1,526,769,821 20.98%

Other Public Shareholders 3,637,603,382 61.08% 3,637,603,382 49.98%

Total 5,955,357,936 100.00% 7,277,911,114 100.00%

Notes:

i. The 1,477,595,944 Shares were registered in the name of, and beneficially owned by, China Life. China Life Group was

interested in 68.37% of China Life and was deemed to be interested in these Shares by virtue of the SFO.

ii. Mr. Chen Din Hwa (deceased) held a long position in 840,158,610 Shares comprising 707,147,893 Shares and

133,010,717 Shares were beneficially owned by Spring Glory and Gavast Estates Limited respectively. Both Spring

Glory and Gavast Estates Limited were wholly-owned by Keymark Associates Limited. Keymark Associates Limited was

wholly-owned by Golden Anchor Holdings Limited. Golden Anchor Holdings Limited was wholly-owned by Nan Fung

Group Holdings Limited. Nan Fung Group Holdings Limited was wholly-owned by Nan Fung International Holdings

Limited. Nan Fung International Holdings Limited was wholly-owned by Chen’s Group International Limited, which in

turn was wholly-owned by the estate of Mr. Chen Din Hwa (deceased).

The Directors have taken into account the dilution impact to the public Shareholders pursuant to

the Subscriptions and are satisfied that upon completion of the Subscriptions, the Company can still

meet its public float requirement under the Listing Rules. Further, although upon completion of the

Subscriptions, the net asset value per Share and the earnings per Share will be diluted, for the reasons

as disclosed in the section headed “Reasons for the Subscriptions” below, the Subscriptions will bring

strategic benefits to the Company and improve the capital structure of the Company which will help

the Company maintain a stable and sustainable growth and enhance the value of the Company in the

long term.

EQUITY FUND-RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

The Company has not conducted any equity fund-raising activities in the past twelve months

before the date of the Announcement.


— 18 —

REASONS FOR THE SUBSCRIPTIONS

Strengthen the financial position of the Company

Under prevailing market conditions, the Board believes that the Subscriptions will strengthen the

Company’s financial position and allow the Company to raise needed funds at a reasonable cost to

support the Group’s existing operations and enhance its flexibility to make further investments as and

when opportunities arise. The Subscriptions further optimizes the Group’s capital structure, which

could result in the improvement of the credit profile of the Company and lowering of the Group’s

future financing costs.

The Board believes that with greater support from the Company’s two largest Shareholders, it can

provide the Company with greater opportunities for property development projects and can benefit the

Company when it comes to both onshore and offshore external financing. The Board believes the

substantial increase in the shareholding in the Company by China Life (being one of the largest

state-owned enterprises in the PRC) and the Nan Fung Group (being a highly reputable property

developer in Hong Kong with strong and reputable financing background), can demonstrate to both

onshore and offshore banks that the Company has a strong and stable shareholding structure, which

the Board believes is conducive to enhancing the market image of the Company and providing greater

confidence to banks to provide the Company with the financing it needs on more favorable terms.

Strengthen the strategic relationship of the Shareholders

The Subscriptions would bring strategic value and business opportunities to the Company

through the development of closer ties with China Life and the Nan Fung Group. In particular, the

Board believes that the China Life Subscription would allow the Group to strengthen its strategic

cooperation with China Life in various areas. On 18 October 2013, the Company entered into a

non-legally binding memorandum of understanding (the “MOU”) with China Life Group for a period

of 5 years, in relation to exploring various potential areas of possible cooperation between the parties,

including but not limited to: (i) cooperation in strengthening the Company’s capital and debt structure;

(ii) cooperation in the real estate industry, whereby in the event China Life Group purchases

owner-occupied properties, projects developed by the Company would be firstly considered if China

Life Group’s requirements or needs are satisfied, and China Life Group and the Company shall further

explore the possibilities of cooperating in the construction of livelihood projects and urbanization

projects, and the joint investment and management of commercial real estate projects; and (iii)

cooperation in the elderly care industry, whereby the Company and China Life Group shall work

together to explore cooperation opportunities and share their experience in the elderly care industry.

The Directors believe that after the China Life Subscription, there will be greater opportunities

in the future where the Company can cooperate with China Life to enter into projects where the

Company can leverage on China Life’s expertise, experiences and reputation in financing negotiations

and give the Company greater bargaining power to obtain the best possible borrowing terms to meet

the financial needs for its future projects and help the Company reduce its finance costs.


— 19 —

LR14A.58(1)LR14A.59(13)

The Board believes that the Nan Fung Subscription will lead to greater strategic cooperation

between the Company and the Nan Fung Group in terms of the greater investment opportunities by the

Group in residential property development projects in Hong Kong and the PRC. With the Nan Fung

Group’s over 40 years of experience in real estate development in Hong Kong, in particular high-end

residential properties with well managed site planning, the Board believes that in respect of future

potential cooperation on a project level with the Nan Fung Group, the Company can leverage on the

Nan Fung Group’s experience in the residential property development and well-established

relationships with international designers and suppliers in the development of high-quality residential

properties in the PRC.

The Board believes that greater cooperation with China Life and the Nan Fung Group can

improve the Company’s market competitiveness and can develop a sustained long-term growth. The

Board believes that with China Life and the Nan Fung Group increasing their shareholding in the

Company from approximately 24.81% to 29.04% and from approximately 14.11% to 20.98%,

respectively, there would be greater alignment of interest between the China Life and the Company

and between the Nan Fung Group and the Company. China Life and the Nan Fung Group will have

greater incentive in achieving the sustained growth of the Group and enhancing Shareholders’ value

in the medium to long term by becoming more involved with the Company’s business, which can bring

about greater strategic value and provide more business opportunities for the Company.

In the event the Company and China Life or the Nan Fung Group agree to enter into specific

projects, the Company will enter into individual agreements with China Life or the Nan Fung Group

(as the case may be), and such transactions will constitute connected transactions for the Company

under Chapter 14A of the Listing Rules. The Company will comply with the applicable announcement

and/or shareholders’ approval requirements in respect of such transactions.

As at the Latest Practicable Date, the Company has no intention in issuing any further Shares to

each of China Life and the Nan Fung Group upon Completion. Other than the CBD Project and Dalian

Project, the Group have also entered into joint venture with 中國人壽資產管理有限公司 (China Life

Insurance Asset Management Company Limited) and 國壽投資控股有限公司 (China Life Investment

Holdings Limited), both a subsidiary of China Life Group, in relation to commercial property

development projects located at Central Business District, East Third Ring Road, Chaoyang District,

Beijing, the PRC. As at the Latest Practicable Date, save as disclosed in this circular, the Group has

not engaged in any specific joint venture with China Life or the Nan Fung Group.

The Subscriptions are the most suitable fund-raising method to the Company at this current time

The Directors have considered various other means of financing, including debt financings by

way of bank borrowings or issue of bonds and equity financings by way of placement of new Shares

to independent investors or a rights issue or open offer.


— 20 —

Debt financings

As bank borrowing or issue of bonds will generate additional finance costs to the Group, increase

the gearing ratio of the Group and affect adversely the cash flow position of the Group, the Directors

preferred equity financing to debt financing to maintain its capital structure at an optimal and

sustainable level.

Alternative equity financings

The Directors have also considered alternative equity financings which would not affect the debt

position of the Group, including a private placement of Shares to independent third party investors or

a rights issue or open offer to existing Shareholders.

The Directors expected the amount of fund raised through a private placement is limited,

especially given the Subscription Price was at premium over market price of the Shares prior to the

Announcement, which might not be attractive to independent third party investors since they could

purchase Shares on market at a lower price. In addition, a private placement has a similar dilutive

effect as the Subscriptions, as far as the Independent Shareholders are concerned. Moreover, a private

placement to third party investors could not bring strategic value and business opportunities to the

Company through the development of closer ties with China Life and the Nan Fung Group as the

Subscriptions does.

As regards to a rights issue or open offer, which will give an opportunity to all Shareholders to

participate in the subscription for new Shares to be issued by the Company on a pro rata basis, the

Directors have considered such factors as (i) the extra underwriting fees and arrangement costs; (ii)

the price of a rights issue or open offer normally involving a substantial discount to market price; (iii)

longer timetable to complete; and (iv) the lack of certainty in the successful implementation of a rights

issue or open offer. On this basis, the Company consider other equity financing methods to be less

optimal than the Subscriptions for the Group to raise additional fund for the development of the

Group.

Taking into account of (i) the potential strategic benefits as a result of increasing the

shareholding of China Life and the Nan Fung Group as the two largest Shareholders of the Company,

and (ii) the pros and cons of other alternative financing methods which the Directors have considered,

the Board believes that the fund raising by way of the Subscriptions is currently the best available

option of financing for the Company, and is fair and reasonable and in the interests of the Company

and the Shareholders as a whole.

The Board considers that China Life and the Nan Fung Group are the most suitable parties for

the Subscriptions because of the following reasons: (i) as the Subscription Shares will be issued at a

premium with a two year lock-up period, if the Subscription Shares were to be open to the public, it

may be difficult for the investors to accept those terms; and (ii) by issuing Shares to the two major

Shareholders of the Company, the Company can create greater synergy between the Company and each

of China Life and the Nan Fung Group as explained above which can be beneficial to the Company’s

future development.


— 21 —

In light of (i) the Company’s target to complete the Acquisition under the Master Acquisition

Agreement by December 2013; (ii) the increased working capital requirements of the Company as

financial year-end approaches to pay for, among other things, outstanding payables and salaries and

bonus payments to the Group’s employees; (iii) the Company’s plan to replenish its land bank in the

short-term in order to satisfy its development needs over the next few years; and (iv) favourable

market conditions, the Company considers that it is opportune time to conduct the Subscriptions.

USE OF PROCEEDS

The gross proceeds of the Subscriptions will be approximately US$808 million (equivalent to

approximately RMB4,945 million). The net proceeds (after deducting all applicable costs and

expenses of the Subscriptions) of approximately US$804 million (equivalent to approximately

RMB4,920 million) (being a net subscription price of approximately HK$4.72 per Share) from the

Subscriptions where the Board intends to use approximately one-third of the net proceeds in an amount

of US$265 million (equivalent to approximately RMB1,622 million) to acquire the remaining interests

in the CBD Project and the Dalian Project; approximately one-third of the net proceeds in an amount

of US$269 million (equivalent to approximately RMB1,646 million) for financing new potential

projects; and approximately one-third of the net proceeds in an amount of US$270 million (equivalent

to approximately RMB1,652 million) for general working capital purposes of the Group, which

include payment of interests, taxes, selling and marketing and other administrative expenses. The

Board is of the view that it is more cost-efficient for these non-project specific expenses to be settled

by the net proceeds from the Subscriptions, instead of through proceeds from sales of properties

(which are generally used for further funding of the projects and repayment of bank borrowings in

respect of the projects) or bank borrowings (which are normally project-specific).

The gross proceeds of the Subscriptions will be used to strengthen the Company’s equity in the

long run as well as ensure the Company’s stable operation. The Company had paid the amount of

US$574 million (equivalent to approximately RMB3,513 million) for redemption of all the

outstanding balance of Perpetual Convertible Securities as at 30 June 2013, by the end of September

2013, which has resulted in reduced available cash on hand and limited the Company’s development

in new projects. As at 30 September 2013, the Company had cash on hand of approximately RMB13.9

billion (including restricted bank deposits of approximately RMB8.3 billion). As such, the gross

proceeds from the Subscriptions will help the Company in maintaining a healthy financial level

required for the Company’s future investment in new projects while maintaining a relatively stable

gearing ratio.

When determining what new projects to be invested into by using the proceeds from the

Subscriptions, the Board will consider and look for the following factors: (i) strategic focus on cities

which the Company have entered and created an established local network such as those in first and

second tier cities like Beijing, Shenzhen and Zhongshan where the Company can gain more quality

land reserves for property operations and for the long term business structure of the Company; (ii)

medium size projects with gross floor area of approximately 500,000 square metres to 800,000 square

metres, that can have a higher asset turnover with better return and liquidity; and (iii) focus on new

urbanization and redevelopment of old towns that can create passive demands through land bidding

or collaboration with local partners.


— 22 —

As at the Latest Practicable Date, the Company had not engaged in any negotiations, had not

signed any contracts, had not identified any targets for new projects and had not made any specific

plans for new projects.

The aggregate nominal value of the Subscription Shares will be HK$1,058,042,542 (equivalent

to RMB833,104,364). The Subscription Shares, when fully paid, will rank pari passu in all respects

among themselves and with the Shares in issue on the date of allotment and issue of the Subscription

Shares.

(2) DISCLOSEABLE AND CONNECTED TRANSACTION - MASTER ACQUISITION

AGREEMENT

Date:

27 September 2013

Parties:

Fame Gain and Nan Fung China

Subject matter:

Subject to the terms and conditions of the Master Acquisition Agreement, Nan Fung China agreed

to sell or to procure the sale of, and Fame Gain agreed to purchase or to procure the purchase of:

(i) in respect of the CBD Project, 1,000 ordinary shares of US$1.00 per share of Target

Company One, representing the entire issued share capital of Target Company One, together

with the corresponding shareholder’s loan advanced by the Nan Fung Group to Target

Company One, free from any claims, encumbrances and third parties’ rights together with

all rights accrued thereto on the Acquisition Completion Date; and

(ii) in respect of the Dalian Project, (i) 24,667,288 ordinary shares of Target Company Two,

representing approximately 14.29% of the entire issued share capital of Target Company

Two, (ii) 21,550,621 ordinary shares of Target Company Three, representing approximately

14.29% of the entire issued share capital of Target Company Three, (iii) 26,166,124

ordinary shares of Target Company Four, representing approximately 10.00% of the entire

issued share capital of Target Company Four, and (iv) 21,850,038 ordinary shares of Target

Company Five, representing approximately 10.00% of the entire issued share capital of

Target Company Five, together with the corresponding shareholder’s loan advanced by the

Nan Fung Group to each of them, free from any claims and encumbrances and third parties’

rights together with all rights accrued thereto on the Acquisition Completion Date.


— 23 —

LR14A.59(2)(a)/(d)

LR14A.58(1)

Consideration:

The total consideration payable by the Purchaser to the Vendor for the CBD Interests and the

Dalian Interests on the Acquisition Completion Date is US$314 million (equivalent to approximately

RMB1,922 million), of which US$154 million (equivalent to approximately RMB942 million) is

payable for the CBD Interests and US$160 million (equivalent to approximately RMB979 million) is

payable for the Dalian Interests, and will be satisfied in cash received from proceeds of the

Subscriptions and from bank borrowings in the amount of US$265 million (equivalent to

approximately RMB1,622 million) and US$49 million (equivalent to approximately RMB300 million),

respectively.

Signing of Individual Agreements:

The parties to the Master Acquisition Agreement shall as soon as practicable execute (or procure

the Vendor and the Purchaser to execute) all individual supplemental agreements (“IndividualAgreements”) desirable in respect of the Acquisition upon and subject to the terms and conditions of,

and provided that they do not contradict, the Master Acquisition Agreement.

Conditions precedent:

Completion of the Acquisition shall be conditional upon:

(i) each of the representations and warranties made by the Vendor in respect of the Acquisition

in the Master Acquisition Agreement and/or in any Individual Agreement shall have been

accurate in all respects as at the date on which they are said to be made and shall be

accurate in all respects;

(ii) each of the covenants and obligations made by the Vendor in respect of the Acquisition or

the Target Company One in the Master Acquisition Agreement and/or in any Individual

Agreement that are required to comply with or perform at or prior to the completion of the

Acquisition shall have been complied with or performed in all respects;

(iii) each party to the Master Acquisition Agreement and/or any Individual Agreement shall have

performed in all material respects all other obligations and covenants required to be

performed by it under the Master Acquisition Agreement and/or such Individual Agreement

prior to or as of the Acquisition Completion Date;

(iv) all actions necessary to authorize the execution, delivery and performance of the Master

Acquisition Agreement and any Individual Agreement by each party thereto and the

consummation of the Acquisition shall have been duly and validly taken by such party and

such party shall have full power and right to consummate the Acquisition on the terms

provided in the Master Acquisition Agreement and any Individual Agreement;

(v) the Company has complied with all disclosure requirements under the Listing Rules in

respect of the Master Acquisition Agreement and the Acquisition;


— 24 —

LR14A.59(2)(b)/(c)

(vi) the Independent Shareholders having approved the Master Acquisition Agreement and the

Acquisition in the EGM;

(vii) the subscription of Shares pursuant to the Nan Fung Subscription Agreement has been

completed;

(viii) since the date of the Master Acquisition Agreement, there has not been any change, event

or development that, individually or in the aggregate, has had a material adverse effect on

the condition, financial or otherwise, or on the earnings, business affairs, trading position

or prospects of the Target Company One and Super Goal as a whole, whether or not arising

in the ordinary course of business;

(ix) the Purchaser shall have completed all business, legal, financial, regulatory and tax due

diligence of the Target Company One and Super Goal to its satisfaction in its sole discretion

and opinion; and

(x) all such other third party consents as may be required in connection with the transactions

described herein being duly obtained by the Nan Fung Group to the reasonable satisfaction

of the Purchaser.

The parties shall (and Fame Gain and Nan Fung China shall procure the parties to the Individual

Agreements to) use all of their reasonable endeavours to satisfy the conditions set out above and all

other conditions (if any) contained in the Individual Agreements on or before 27 November 2013 or

such later date as may be agreed between the parties. The Purchaser may in its sole discretion waive

in writing in whole or in part all or any of the conditions precedents set out above (save for conditions

(v) and (vi)).

As at the Latest Practicable Date, the Purchaser had no intention to waive any conditions under

the Master Acquisition Agreement and none of the conditions in the Master Acquisition Agreement had

been fulfilled. In considering whether to waive the above conditions, the Company will carefully

consider the reason(s) of the inability to fulfill such condition, materiality of such non-fulfillment and

the impact it will have on the Company and the transactions under the Master Acquisition Agreement,

and the decision to waive any condition will only be made if the Board considers that it is in the best

interest of the Company and the Shareholders as a whole.

Completion:

Completion of the Acquisition shall take place on the Acquisition Completion Date, being second

Business Day following the date on which all conditions precedent are fulfilled or waived or at such

other date as the parties may agree.


— 25 —

REASONS FOR AND BENEFITS OF THE MASTER ACQUISITION AGREEMENT

As at the Latest Practicable Date, (i) the Group and the Nan Fung Group effectively owns an

interest of 80% and 20% in the CBD Project, respectively; and (ii) the Group and the Nan Fung Group

effectively owns an interest of approximately 90% and 10% in the Dalian Project, respectively.

Pursuant to the Acquisition, the Group will effectively acquire from the Nan Fung Group its 20%

interests in the CBD Project and approximately 10% interests in the Dalian Project, thereby obtaining

100% control of the CBD Project and the Dalian Project. The Master Acquisition Agreement will allow

the Group to consolidate its position in one of the Group’s key commercial properties in CBD area of

Beijing and one of the Group’s flagship projects in Dalian in PRC. The Acquisition would also

increase the Group’s interest in land bank, improve the efficiency of the decision-making process and

the implementation of plans in respect of the CBD Project and the Dalian Project, which is in the

interests of the Company and the Shareholders as a whole.

The basis for the consideration for the Acquisition was determined by reference to the market

value of the CBD Project and the Dalian Project, plus a discount to the market value decided after an

arm’s length negotiation between the Group and the Nan Fung Group.

Upon completion of the Acquisition, should there be any additional development costs in regards

to the CBD Project or the Dalian Project, the Company expects to fund such additional development

costs primarily with bank development loans with supplement of a small amount of shareholders

entrusted loans.

DIRECTORS’ CONFIRMATION

The Directors (including the independent non-executive Directors) are of the view that the

Subscription Agreements (including the Subscription Price) and the Master Acquisition Agreement

have been entered into on normal commercial terms that are fair and reasonable and is in the interests

of the Company and the Shareholders as a whole.

Mr. Cheung Vincent Sai Sing, a non-executive Director nominated by the Nan Fung Group,

having material interest in the Nan Fung Subscription and the Acquisition, has abstained from voting

on the Board resolutions for considering and approving the Nan Fung Subscription Agreement and the

Master Acquisition Agreement and has voluntarily abstained from voting on the Board resolution for

considering and approving the China Life Subscription Agreement. Ms. Liu Hui and Mr. Yang Zheng,

being non-executive Directors nominated by China Life, having material interest in the China Life

Subscription, have abstained from voting on the Board resolutions for considering and approving the

China Life Subscription Agreement and have voluntarily abstained from voting on the Board

resolutions for considering and approving the Nan Fung Subscription Agreement and the Master

Acquisition Agreement. Save as disclosed above, none of the Directors has a material interest in the

Subscriptions or the Acquisition or is required to abstain from voting on the Board resolutions for

considering and approving the Subscription Agreements, the Master Acquisition Agreement and the

transaction contemplated thereunder pursuant to the Listing Rules and/or the articles of association of

the Company.


— 26 —

LR14A.58(1)

LR14A.59(13)

LR14A.59(18)

INFORMATION ON THE GROUP

The Group is one of the leading property developers in Beijing and the Pan-Bohai Rim and

actively accomplishing the Group’s national strategic plan with a coastal and riparian focus. The

Group focuses on developing mid-to-high end residential properties, high-end office premises and

retail properties.

INFORMATION ON THE SUBSCRIBERS AND NAN FUNG CHINA

China Life is a state-owned enterprise in the PRC under the supervision of China Insurance

Regulatory Commission, Organization Department of the Central Committee of the Communist Party

of the PRC (中共中央組織部中國保險監督管理委員會). China Life is listed on the Stock Exchange,

the New York Stock Exchange and the Shanghai Stock Exchange, respectively. It is the largest

insurance company in the PRC and is ranked 111th of the “Fortune 500” companies in 2013. It is also

one of the largest institutional investors in the PRC.

Each of Spring Glory and Nan Fung China is an investment holding company and a member of

the Nan Fung Group, which is principally engaged in the business of property development, property

investment, construction, property management, investment and financing.

To the best knowledge, information and behalf of the Directors, having made all reasonable

enquiries, other than China Life and the Nan Fung Group being Shareholders of the Company, there

is no relationship between China Life and the Nan Fung Group and/or their associates.

INFORMATION ON THE TARGET COMPANIES

Corporate information of the Target Companies

Each of the Target Companies is an investment holding company.

Target Company One holds 100% issued share capital of Super Goal, a company incorporated in

Hong Kong and which in turn holds 20% registered capital of 北京天江通睿置業有限公司 (Beijing

Skyriver CBD Property Co., Ltd.), which in turn is the legal owner of the CBD Project.

Target Company Two is the registered and beneficial owner of the entire issued share capital of

Always Win Holdings Limited, which in turn holds 70% registered capital of 大連新悅置業有限公司(Dalian Xinyue Properties Co., Ltd.). Target Company Three is the registered and beneficial owner of

the entire issued share capital of Champion Central Investment Limited, which in turn holds 70%

registered capital of 大連廣宇置業有限公司 (Dalian Guangyu Properties Co., Ltd.). Target Company

Four is the registered and beneficial owner of the entire issued share capital of Leader United Holdings

Limited, which in turn holds 100% registered capital of 大連潤峰置業有限公司 (Dalian Runfeng

Properties Co., Ltd.) and 大連聖基置業有限公司 (Dalian Shengji Properties Co., Ltd.). Target

Company Five is the registered and beneficial owner of the entire issued share capital of Stay Smart

Limited, which in turn holds 100% registered capital of 大連永圖置業有限公司 (Dalian Yongtu

Properties Co., Ltd.) and 大連至遠置業有限公司 (Dalian Zhiyuan Properties Co., Ltd.).


— 27 —

LR14A.59(2)(a)

LR14A.59(2)(b)

大連新悅置業有限公司 (Dalian Xinyue Properties Co., Ltd.), 大連廣宇置業有限公司 (Dalian

Guangyu Properties Co., Ltd.), 大連潤峰置業有限公司 (Dalian Runfeng Properties Co., Ltd.), 大連聖基置業有限公司 (Dalian Shengji Properties Co., Ltd.), 大連永圖置業有限公司 (Dalian Yongtu

Properties Co., Ltd.) and 大連至遠置業有限公司 (Dalian Zhiyuan Properties Co., Ltd.) collectively

are the legal owners of the Dalian Project.


interests in the CBD Project and approximately 10% interests in the Dalian Project.

Details of the CBD Project and the Dalian Project are set out below:

Project name Location of project Project descriptionTotal GFA(planned)

CBD Project Plot Z6, Guanghua Road,

Chaoyang District, Beijing,

the PRC

Commercial

properties

Approximately

250,000 sq.m.

Dalian Project Plots A, B, C and E, Ocean

Diamond Bay,

East of Gongxing Street and

Dongbei Road,

South of Dongfang Road,

Ganjingzi District, Dalian,

Liaoning Province, the PRC

Residential and retail

complex

Approximately

2,100,000 sq.m.

As at the Latest Practicable Date, in relation to the CBD Project, the properties are generally

either vacant sites pending for development or are at an early stage of construction. The land use rights

of the properties have been granted for commercial use for 40 years and for composite use for 50

years, commencing on the issue date of the land grant contract. The land premium has been fully

settled and the application of state-owned land use rights certificate has been submitted, which is

expected to be obtained in the first quarter of 2014. The Directors expect construction on the

properties of the CBD Project to commence before 1 August 2014 and construction to be completed

before 1 August 2017. In order to obtain the relevant state-owned land use rights certificate in respect

of the CBD Project, the relevant procedures described in Note (4) to the section “Properties held by

the Group under or for development in the PRC” on page 66 of the Property Valuation Report in

Appendix I to this circular must be complied with. Based on the advice of the Company’s PRC legal

adviser, Grandall Law Firm (Beijing), on the basis of such procedures being complied with, there is

no legal impediment in obtaining the state-owned land use rights certificate.


— 28 —

As at the Latest Practicable Date, in relation to the Dalian Project, Plots A and B have been

issued with state-owned land use rights certificates and are currently being developed, of which the

property located on Plots A1, A2, A3, B1 and B2 have been pre-sold. With regards to Plots C and E,

the Notifications of Confirmation of Successful Bid have been issued and part of the required land

premium and related fees have been paid, but developments have not yet begun and the remaining land

grant contracts, state-owned land use rights certificates and planning permits for construction use of

land are expected to be obtained in the first half of 2014. The Directors expect construction to be

completed on Plots A and B (except Plots A4, A5 and B4) in 2014 and 2015, respectively and with

regards to the remaining Plots, the Directors expect construction to commence in the second half of

2014 and to be completed at the end of 2017. Based on the advice of the Company’s PRC legal adviser,

Grandall Law Firm (Beijing), on the basis that the relevant procedures of applying for state-owned

land use rights certificates described in Note (13) to the section “Properties held by the Group under

or for development in the PRC” on page 75 of the Valuation Report in Appendix I to this circular, are

complied with, there will be no legal impediment in obtaining the land use rights certificates of Plots

C and E.

The shareholding structure of the Target Companies before the Acquisition Completion Date are

as follows:

Target Company One

100%

100%

20%

100%

80%

Nan Fung China

(BVI)Company

遠洋地產有限公司(Sino-Ocean

Land Limited)

(PRC)

北京天江通睿置業有限公司(Beijing Skyriver CBD Property Co., Ltd.)

(PRC)

CBD Project

Target Company One

(BVI)

Super Goal

(HK)


— 29 —

The

shar

ehol

ding

stru

ctur

eof

the

Tar

get

Com

pani

esbe

fore

the

Acq

uisi

tion

Com

plet

ion

Dat

ear

eas

foll

ows

(con

tinu

ed):

Tar

get

Com

pan

yT

wo,

Tar

get

Com

pan

yT

hre

e,T

arge

tC

omp

any

Fou

ran

dT

arge

tC

omp

any

Fiv

e

100%

100%

100%

100%

10

0%

10%

90%

10%

85

.71

%1

4.2

9%

90%

14.2

9%

85.7

1%

100%

100%

10

0%

10

0%

10

0%

10

0%

70

%3

0%

100%

100%

100%

100%

70

%3

0%

Sta

y S

mar

t

Lim

ited

(HK

)

Lea

der

Un

ited

Ho

ldin

gs

Lim

ited

(HK

)

Alw

ays

Win

Ho

ldin

gs

Lim

ited

(HK

)

Ch

amp

ion

Cen

tral

Inv

estm

ent

Lim

ited

(HK

)

Tar

get

Co

mp

any

Fiv

e

(BV

I)

Tar

get

Co

mp

any

Four

(BV

I)

Tar

get

Co

mp

any

Tw

o

(BV

I)

Tar

get

Co

mp

any

Thre

e

(BV

I)

Su

per

b J

oy

Lim

ited

(BV

I)

Ch

eer

Mo

tio

n

Lim

ited

(BV

I)

Tre

asu

re S

ou

rce

Gro

up

Ltd

.

(BV

I)

Th

e C

om

pan

yN

an F

un

g

Ch

ina

(BV

I)

Ach

iev

e R

ay

Lim

ited

(BV

I)

Neo

Lin

kag

e

Lim

ited

(BV

I)

北京市天麟房

地產開發有限公司

(Bei

jin

g T

ian

lin

Rea

l E

stat

eD

evel

op

men

tC

o.,

Ltd

.)(P

RC

)

北京遠坤房

地產開發有限公司

(Bei

jin

g Y

uan

ku

n

Rea

l E

stat

e D

evel

op

men

tC

o.,

Ltd

.)

(PR

C)

大連新悅置業

有限公司

(Dal

ian

Xin

yu

e

Pro

per

ties

Co

.,

Ltd

.)

(PR

C)

大連至遠置業

有限公司

(Dal

ian

Zh

iyu

an

Pro

per

ties

Co

.,

Ltd

.)

(PR

C)

大連永圖置業

有限公司

(Dal

ian

Yo

ng

tu

Pro

per

ties

Co

.,

Ltd

.)

(PR

C)

大連聖基置業

有限公司

(Dal

ian

Sh

eng

ji

Pro

per

ties

Co

.,

Ltd

.)

(PR

C)

大連潤峰置業

有限公司

(Dal

ian

Ru

nfe

ng

Pro

per

ties

Co

.,

Ltd

.)

(PR

C)

大連廣宇置業

有限公司

(Dal

ian

Gu

ang

yu

Pro

per

ties

Co

.,

Ltd

.)

(PR

C)

Dal

ian

Pro

ject

-Plo

t

A1/A2/A3/A4/A5

Dal

ian

Pro

ject

-Plo

t

E2/E4/E6

Dal

ian

Pro

ject

-Plo

t

E1/E3/E5

Dal

ian

Pro

ject

-Plo

t

C1/C2/C3

Dal

ian

Pro

ject

-Plo

t

C1/C5

Dal

ian

Pro

ject

-Plo

t

B1/B2/B3/B4/B5


— 30 —

Financial information of the Target Companies

Based on the unaudited consolidated accounts of the Target Companies prepared in accordance

with Hong Kong Financial Reporting Standards, the unaudited consolidated net assets or liabilities and

profit or loss of the Target Companies for the years ended 31 December 2011 and 2012 and the six

months ended 30 June 2013 are as follows:

For the financial year ended 31 December 2011:

Unauditedconsolidated

net assets/(liabilities)

(approx.

RMB thousand)


profit/(loss) beforetaxation and

extraordinary items(approx.

RMB thousand)


profit/(loss) aftertaxation and

extraordinary items(approx.

RMB thousand)

Target Company One (75) (65) (65)

Target Company Two 1,725,300 706 706

Target Company Three 1,506,172 (2,781) (2,781)

Target Company Four 2,614,725 (215) (215)

Target Company Five 2,183,417 (193) (193)

For the financial year ended 31 December 2012:



(approx.

RMB thousand)

Unauditedconsolidated loss

before taxation andextraordinary items

(approx.

RMB thousand)


after taxation andextraordinary items

(approx.

RMB thousand)

Target Company One (2,414) (2,339) (2,339)

Target Company Two 1,710,170 (19,897) (19,897)





— 31 —

For the six months ended 30 June 2013:



(approx.

RMB thousand)


before taxation andextraordinary items

(approx.

RMB thousand)


after taxation andextraordinary items

(approx.

RMB thousand)

Target Company One (4,150) (1,775) (1,775)

Target Company Two 1,702,211 (2,811) (2,811)




As at the Latest Practicable Date, the Nan Fung Group had advanced approximately HK$896

million (equivalent to approximately RMB706 million) as shareholder’s loan to Target Company One

and the Nan Fung Group had not advanced any shareholders’ loan to any of Target Company Two,

Target Company Three, Target Company Four or Target Company Five.

The original investment costs paid by the Vendor in relation to each of the CBD Project and the

Dalian Project amounts to approximately US$128 million (equivalent to approximately RMB783

million) and US$142 million (equivalent to approximately RMB869 million), respectively. As at 30

June 2013, the book value of the CBD Project and the Dalian Project amounts to RMB3,922 million

and RMB7,981 million, respectively. According to DTZ, as at 31 August 2013, the market value or the

valuation of the CBD Project and the Dalian Project amounts to RMB6,300 million and RMB11,850

million, respectively, as such the consideration represents a discount of 25.26% and 17.43%,

respectively.

IMPLICATIONS UNDER THE TAKEOVERS CODE

After completion of the Subscriptions, each of China Life and the Nan Fung Group will hold

more than 20% of the issued share capital of the Company as enlarged by the allotment and issue of

the Subscription Shares. Therefore, China Life and the Nan Fung Group may be considered as parties

“acting in concert” by virtue of being associated companies of the Company under the Takeovers

Code. In this regard, the Executive has confirmed that the presumed concert party relationship

between China Life and the Nan Fung Group in respect of the Company pursuant to class (1) of the

definition of acting in concert under the Takeovers Code which would arise as a result of the

completion of the Subscription(s) is rebutted and no mandatory general offer will be triggered on the

part of China Life or the Nan Fung Group as a result of the Subscriptions even though their aggregate

shareholding increases by more than 2%.


— 32 —

LR14A.59(14)

LISTING RULES IMPLICATIONS

As at the Latest Practicable Date, China Life held 1,477,595,944 Shares, representing

approximately 24.81% of the issued share capital of the Company and is a substantial shareholder of

the Company and therefore a connected person of the Company. As at the Latest Practicable Date, the

Nan Fung Group held 840,158,610 Shares, representing approximately 14.11% of the issued share

capital of the Company and is a substantial shareholder of the Company and therefore, Spring Glory,

being a member of the Nan Fung Group, is a connected person of the Company. Accordingly, each of

the Subscriptions constitutes a non-exempt connected transaction of the Company under the Listing

Rules and is subject to the reporting, announcement and independent shareholders’ approval

requirements pursuant to Chapter 14A of the Listing Rules.

Nan Fung China, being a member of the Nan Fung Group, is a connected person of the Company.

As one or more of the applicable percentage ratios of the Acquisition is more than 5% but are all less

than 25%, the Acquisition constitutes a discloseable and connected transaction of the Company under

the Listing Rules and is subject to the reporting, announcement and independent shareholders’

approval requirements pursuant to Chapter 14A of the Listing Rules.

EGM

A notice convening the EGM to be held on Tuesday, 19 November 2013 at 10:00 a.m. at Salon

Room VI, 3/F, JW Marriott Hotel, Pacific Place, 88 Queensway, Hong Kong is set out on pages 82 to

84 of this circular for the purpose of considering and, if thought fit, approve (i) each of the

Subscription Agreements and the transactions contemplated thereunder, including the grant of the

Specific Mandate for the allotment and issue of the Subscription Shares; and (ii) the Master

Acquisition Agreement and the transactions contemplated thereunder.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able

to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with

the instructions printed thereon and return it to the Company’s share registrar, Computershare Hong

Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai,

Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for

holding the meeting or any adjournment thereof (as the case may be). Completion and return of the

form of proxy will not preclude you from attending and voting in person at the meeting or any

adjournment thereof (as the case may be) if you so wish.

China Life and its associates, being connected persons of the Company and having material

interests in the China Life Subscription, and the Nan Fung Group and its associates, being connected

persons of the Company and having material interests in the Nan Fung Subscription and the

Acquisition (which are different from those of the Independent Shareholders), will abstain from voting

at the EGM on all three resolutions in this regard. As at the Latest Practicable Date, (i) China Life and

its associates held and controlled the voting rights of 1,477,595,944 Shares, representing

approximately 24.81% of the issued share capital of the Company; and (ii) the Nan Fung Group and

its associates held and controlled the voting rights of 840,158,610 Shares, representing approximately

14.11% of the issued share capital of the Company. The results of the voting will be announced in

accordance with Rule 2.07C of the Listing Rules after the EGM.


— 33 —

LR14A.59(2)(d)LR14A.59(2)(f)

LR2.17(1)LR14A.59(5)

To the best knowledge, information and belief of the Directors having made all reasonable

enquiries, other than China Life and the Nan Fung Group and their respective associates, there is no

connected person of the Company, any Shareholders or their respective associates with a material

interest in the relevant transactions under the Subscription Agreements and the Master Acquisition

Agreement required to abstain from voting at the EGM.

INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee has been established to advise the Independent Shareholders

as to whether the terms of the transactions contemplated under the Subscription Agreements and the

Master Acquisition Agreement are fair and reasonable and in the interests of the Company and the

Shareholders as a whole.

Anglo Chinese, the Independent Financial Adviser, has been appointed to advise the Independent

Board Committee and the Independent Shareholders in the same regard.

RECOMMENDATION

Based on the above, the Directors (including the independent non-executive Directors) consider

that the Subscription Agreements and the Master Acquisition Agreement are on normal commercial

terms, and the entering of the Subscription Agreements and the Master Acquisition Agreement are in

the ordinary and usual course of business of the Company, fair and reasonable and in the interests of

the Company and the Shareholders as a whole. Accordingly, the Directors recommend all the

Independent Shareholders to vote in favour of the ordinary resolutions as set out in the notice of the

EGM.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this

circular and the notice of the EGM.

Yours faithfully,

By order of the Board

Sino-Ocean Land Holdings LimitedLi Ming

Chairman


— 34 —

The following is the text of the letter from the Independent Board Committee setting out its

recommendation to the Independent Shareholders in connection with the Subscription Agreements and

the Master Acquisition Agreement and the transactions contemplated thereunder for inclusion in this

circular.

(Stock Code: 03377)

28 October 2013

To the Independent Shareholders

Dear Sir or Madam,



(2) AND CONNECTED TRANSACTION —ACQUISITION OF REMAINING INTERESTS IN TWO PROJECTS

We have been appointed to form the Independent Board Committee to consider and advise the

Independent Shareholders as to our opinion on, the terms of the Subscription Agreements and the

Master Acquisition Agreement and the transactions contemplated thereunder, the details of which are

set out in the circular issued by the Company to the Shareholders dated 28 October 2013 (the

“Circular”), of which this letter forms part. Terms defined in the Circular will have the same

meanings when used herein unless the context otherwise requires.

We wish to draw the attention of the Independent Shareholders to the letter from the Board and

letter of advice from Anglo Chinese, the Independent Financial Adviser, set out on pages 7 to 34 and

pages 37 to 59 of the Circular, respectively.

Having taken into account the principal factors and reasons considered by Anglo Chinese, its

conclusion and advice, we concur with the view of the Independent Financial Adviser and consider

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

— 35 —

LR14A.38(3)(c)LA14A.59(7)

that the Subscription Agreements and the Master Acquisition Agreement are on normal commercial

terms, and the entering of the Subscription Agreements and the Master Acquisition Agreement are in

the ordinary and usual course of business of the Company, fair and reasonable and in the interests of

the Company and the Independent Shareholders as a whole.

Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary

resolutions to be proposed at the EGM to approve the Subscription Agreements and the Master


Yours faithfully,

Independent Board Committee ofSino-Ocean Land Holdings Limited

Tsang Hing LunGu YunchangHan Xiaojing

Zhao KangIndependent non-executive Directors

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

— 36 —

The following is the text of the letter from Anglo Chinese to the Independent Board Committee

and the Independent Shareholders, prepared for the purpose of inclusion in this circular.

To the Independent Board Committee

and the Independent Shareholders

28 October 2013

Dear Sirs,




INTRODUCTION

We refer to our appointment as the independent financial adviser to advise the Independent Board

Committee and the Independent Shareholders in respect of the Subscription Agreements and the

Master Acquisition Agreement and the transactions contemplated thereunder. Details of which,

amongst other things, are set out in the letter from the Board contained in the circular of the Company

dated 28 October 2013, of which this letter forms part. Terms defined in this circular shall have the

same meanings when used in this letter unless the context requires otherwise.

Reference is made to the Announcement. On 27 September 2013, the Company entered into the

Subscription Agreements with each of China Life and Spring Glory (a member of the Nan Fung

Group), pursuant to which the China Life and Spring Glory conditionally agreed to subscribe for, and

the Company conditionally agreed to allot and issue, a total of 635,941,967 Shares and 686,611,211

Shares, respectively, at the Subscription Price of HK$4.74 per Share. The Subscription Shares are

subject to a lock-up period of two years commencing from the Completion Date.

On 27 September 2013, Fame Gain (an indirect wholly-owned subsidiary of the Company) and

Nan Fung China (a member of the Nan Fung Group) entered into the Master Acquisition Agreement,

pursuant to which Nan Fung China agreed to sell or procure the sale of, and Fame Gain agreed to

purchase or procure the purchase of, 20% interests of the CBD Project and approximately 10%

interests in the Dalian Project.

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

— 37 —

App1, Part B5(3)LR14A.59(8)

As at the Latest Practicable Date, China Life holds 1,477,595,944 Shares, representing

approximately 24.81% of the issued share capital of the Company and is a substantial shareholder of

the Company and therefore a connected person of the Company. As at the Latest Practicable Date, the

Nan Fung Group holds 840,158,610 Shares, representing approximately 14.11% of the issued share

capital of the Company and is a substantial shareholder of the Company and therefore, Spring Glory,

being a member of the Nan Fung Group, is a connected person of the Company. Accordingly, each of

the Subscriptions constitutes a non-exempt connected transaction of the Company under the Listing

Rules and is subject to the reporting, announcement and independent shareholders’ approval

requirements pursuant to Chapter 14A of the Listing Rules.

Nan Fung China, being a member of the Nan Fung Group, is a connected person of the Company.

As one or more of the applicable percentage ratios of the Acquisition is more than 5% but are all less

than 25%, the Acquisition constitutes a discloseable and connected transaction of the Company under

the Listing Rules and is subject to the reporting, announcement and independent shareholders’

approval requirements pursuant to Chapter 14A of the Listing Rules.

An Independent Board Committee comprising all independent non-executive Directors has been

formed to advise the Independent Shareholders in respect of the Subscription Agreements, the Master


Votes of the Independent Shareholders at the EGM shall be taken by poll. China Life, the Nan

Fung Group and their respective associates, being connected persons of the Company and having

material interests in the China Life Subscription, the Nan Fung Subscription and the Acquisition,

respectively, will abstain from voting at the EGM on all three resolutions. Save for the approval from

the Independent Shareholders at the EGM, the Subscription Agreements and the Master Acquisition

Agreement are also subject to the conditions precedent as set out on pages 9 to 11, 13 to 15 and 24

to 25 of this circular.

BASIS OF OUR OPINION

In formulating our opinion, we consider that we have reviewed sufficient and relevant

information and documents and have taken reasonable steps as required under Rule 13.80 of the

Listing Rules including the notes thereto to reach an informed view and to provide a reasonable basis

for our recommendation. We have relied on the information, statements, opinion and representations

contained or referred to in this circular and all information and representations which have been

provided by the Directors, for which they are solely and wholly responsible, are true and accurate at

the time when they were made and continue to be so at the date hereof. We have also assumed that

all statements of belief, opinion and intention of the Directors as set out in the letter from the Board

contained in this circular were reasonably made after due and careful inquiry. We have also sought and

obtained confirmation from the Company that no material facts have been omitted from the

information provided and referred to in this circular.

The Directors confirmed that they have provided us with all currently available information and

documents which are available under present circumstances to enable us to reach an informed view

and we have relied on the accuracy of the information contained in this circular so as to provide a

reasonable basis of our opinion. We have no reason to suspect that any material facts or information,


— 38 —

which is known to the Company, have been omitted or withheld from the information supplied or

opinions expressed in this circular nor to doubt the truth and accuracy of the information and facts,

or the reasonableness of the opinions expressed by the Company and the Directors which have been

provided to us. We have not, however, carried out any independent verification on the information

provided to us by the Directors, nor have we conducted any form of independent in-depth investigation

into the business and affairs or the prospects of the Company, China Life, the Nan Fung Group and

the Target Companies or any of their respective subsidiaries or associates.

Apart from normal professional fees for our services to the Company in connection with this

appointment, no arrangement exists whereby we will receive any benefits from the Company or any

of its associates.

PRINCIPLE FACTORS AND REASONS CONSIDERED

I. THE SUBSCRIPTION AGREEMENTS

In formulating and giving our opinion to the Independent Board Committee and the Independent

Shareholders in respect of the Subscription Agreements and the transactions contemplated thereunder,

we have taken into account the following principal factors:

1. Background of and reasons for the Subscription Agreements

Business and financial information of the Group

The Group is one of the leading property developers in Beijing and the Pan-Bohai Rim and

actively accomplishing its national strategic plan with a coastal and riparian focus. It focuses on

developing mid-to-high end residential properties, high-end office premises and retail properties.

Tabularised below is a summary of the consolidated financial results of the Group as extracted

from the Company’s annual report 2012 and interim report 2013:

Consolidated IncomeStatement

For the six monthsended 30 June

For the yearended 31 December

2013 2012 Change 2012 2011 Change

RMB’000 RMB’000 % RMB’000 RMB’000 %

(unaudited) (unaudited) (audited) (audited)

Revenue 9,097,781 6,758,766 35% 28,657,796 19,896,946 44%

Gross profit 2,187,484 2,057,922 6% 7,699,196 6,257,751 23%

Gross profit margin 24% 30% 27% 31%

Profit attributable owners

of the Company 1,417,056 1,206,489 17% 3,796,032 2,570,657 48%


— 39 —

As at30 June As at 31 December

Consolidated Balance Sheet 2013 2012 2011 Change

RMB’000 RMB’000 RMB’000 %

(unaudited) (audited) (audited)

Total assets 132,358,421 128,304,576 110,285,445 16%

Total equity 40,294,096 42,046,238 38,757,164 8%

Net asset value attributable to

owners of the Company 36,382,316 38,260,437 35,268,424 8%

Total borrowings 32,745,081 32,393,047 33,587,466 -4%

Cash and cash equivalents 7,469,765 10,747,479 8,647,794 24%

Gearing ratio (net debt/total capital) 39% 34% 39%

For the year ended 31 December 2012, the Group recorded revenue of approximately RMB28,658

million and profit attributable to owners of the Company of approximately RMB3,796 million,

representing year-on-year increases of approximately 44% and 48% respectively. For the six months

ended 30 June 2013, the Group recorded revenue of approximately RMB9,098 million and profit

attributable to owners of the Company of approximately RMB1,417 million, representing year-on-year

increases of approximately 35% and 17% respectively.

Business of China Life

China Life is a state-owned enterprise in the PRC under the supervision of China Insurance

Regulatory Commission, Organization Department of the Central Committee of the Communist Party

of the PRC (中共中央組織部中國保險監督管理委員會). China Life is listed on the Stock Exchange,

the New York Stock Exchange and the Shanghai Stock Exchange respectively. It is the largest

insurance company in the PRC and is ranked 111th of the “Fortune 500” companies in 2013. It is also

one of the largest institutional investors in the PRC. As at the Latest Practicable Date, China Life

holds 1,477,595,944 Shares, representing approximately 24.81% of the issued share capital of the

Company and is a substantial shareholder of the Company.

Business of the Nan Fung Group

Each of Spring Glory and Nan Fung China is an investment holding company and a member of

the Nan Fung Group, which is principally engaged in the business of property development, property

investment, construction, property management, investment and financing. As at the Latest Practicable

Date, the Nan Fung Group holds 840,158,610 Shares, representing approximately 14.11% of the issued

share capital of the Company.


— 40 —

2. Principal terms of the Subscription Agreements

On 27 September 2013, the Company entered into the Subscription Agreements with each of

China Life and Spring Glory, pursuant to which the China Life and Spring Glory conditionally agreed

to subscribe for, and the Company conditionally agreed to allot and issue, a total of 635,941,967

Shares and 686,611,211 Shares, respectively, at the Subscription Price of HK$4.74 per Share.

Conditions precedent

Completion of the China Life Subscription and the Nan Fung Subscription is conditional upon

the fulfilment or waiver of their respective conditions. For details, please pages 9 to 11 and pages 13

to 15 of the circular. Independent Shareholders should be noted that the Nan Fung Subscription is

conditional on the completion of the Acquisition and such condition could not be waived. In addition,

both China Life Subscription and Nan Fung Subscription are conditional on the total amount of gross

proceeds to be received by the Company pursuant to the Subscription Agreements no less than HK$5.5

billion, but such condition can be waived by the Company. The China Life Subscription and the Nan

Fung Subscription are not conditional on each other, however the Company intends to complete the

Subscriptions simultaneously.

Restriction on disposal

The Subscription Shares are subject to a lock-up period of two years commencing from the

Completion Date. For details, please pages 11 and 15 to 16 of the circular. The lock-up arrangement

indicated that two largest Shareholders are strategic investors who will participate in the long term

development of the Company and we are of the view that such arrangement is fair and reasonable and

in the interests of the Company and the Independent Shareholders as a whole.

Board representation

Upon completion of the Subscriptions, for so long as China Life and the Nan Fung Group directly

or indirectly holds not less than a specific percentage of the total issued share capital of the Company

as stipulated under the Subscription Agreements, each of them shall have the right to nominate one

additional executive Director to the Board and China Life shall also have the right to nominate a

member of senior management of the Company, details of which are set out on pages 11 to 12 and 16

to 17 of the circular.

We consider it is not unusual for major shareholders of a company to have nomination rights of

board members and senior management and such Board representation arrangement is in line with the

increase of shareholding of China Life and the Nan Fung Group. Such nomination rights arrangement

can further strengthen and diversify the composition of the Board and enhance oversight on the Board

based on their various industry experience, expertise and knowledge background. Such nomination

rights arrangement is also in line with the strategic rationale of the Subscriptions since the executive

Directors and senior management as nominated by China Life and the Nan Fung Group, if appointed,

would be involved in the day-to-day management of the Company and serve as the tie connecting each


— 41 —

of the two largest Shareholders with the Company and hence bring strategic benefits to the Company

through cooperation in various areas such as financing, pension and other healthcare services and new

commercial and residential property development projects. The appointment of any candidate

nominated by China Life and the Nan Fung Group to the Board is still subject to compliance with the

articles of association of the Company, the applicable laws, regulations, the Listing Rules and the

Takeovers Code. The appointment of senior management of the Company as nominated by China Life

would also be subject to the approval by the Board taking into account the suitability of the candidate

nominated. Such nomination right arrangement is not in breach of the articles of association of the

Company and Shareholders other than the Nan Fung Group and China Life can also nominate suitable

candidates for Director and/or senior management for the Board’s consideration should they so wish.

Based on above, we consider such nomination rights arrangement is fair and reasonable and in the

interest of the Company and the Shareholders as a whole, and would not be providing any preferential

treatment for China Life and the Nan Fung Group.

3. Evaluation of the Subscription Price

Basis of the Subscription Price

The Subscription Price was determined with reference to prevailing market price of the Shares

and has been arrived at after arm’s length negotiations between the Company and each of China Life

and the Nan Fung Group respectively. We consider such basis fair and reasonable.

Price comparison of the Subscription Price

The Subscription Price of HK$4.74 per Share represents:

(a) a discount of approximately 1.04% to the closing price of HK$4.79 per Share as quoted on

the Stock Exchange on the Latest Practicable Date;

(b) a premium of approximately 1.72% over the closing price of HK$4.66 per Share as quoted

on the Stock Exchange on 27 September 2013 (the “Last Trading Day”), being the last full

trading day of the Shares on the Stock Exchange prior to the publication of the

Announcement;

(c) a premium of approximately 1.41% over the average closing price of HK$4.674 per Share

as quoted on the Stock Exchange for the last 5 trading days up to and including the Last

Trading Day;

(d) a premium of approximately 0.49% over the average closing price of HK$4.717 per Share


Trading Day;


— 42 —

(e) a premium of approximately 2.13% over the average closing price of HK$4.641 per Share


Trading Day;

(f) a premium of approximately 7.90% over the average closing price of HK$4.393 per Share


Trading Day;

(g) a discount of approximately 41.91% to the net asset value per Share of approximately

HK$8.16 as at 31 December 2012 (based on a total of 5,955,357,936 Shares as at the Latest

Practicable Date, the Group’s audited net asset value attributable to the owners of the

Company of approximately RMB38,260 million as at 31 December 2012 and an exchange

rate of HK$1.27 to RMB1); and

(h) a discount of approximately 38.91% to the net asset value per Share of approximately

HK$7.76 as at 30 June 2013 (based on a total of 5,955,357,936 Shares as at the Latest

Practicable Date, the Group’s unaudited net asset value attributable to the owners of the

Company of approximately RMB36,382 million as at 30 June 2013 and an exchange rate of

HK$1.27 to RMB1).

We noted the Subscription Price represents significant discount to the Company’s net asset value

per Share as at 31 December 2012 and 30 June 2013, but Subscription Price was determined with

reference to prevailing market price of the Shares which presents the market view on the value of the

Shares. The shares of most listed property companies are traded at discount to their net asset value

as shown in the our analysis below under the section headed “Comparable company analysis” and most

of the recent comparable new shares issuances were issued at discount to closing price of shares prior

to the relevant announcements as shown in our analysis below under the section headed “Comparable

companies issuing new shares to connected persons under specific mandates”. Therefore, we consider

the Subscription Price is fair and reasonable and in line with market practice.


— 43 —

Analysis of historical Share price performance

The chart below illustrates the movement of the daily closing prices of the Shares and the Hang

Seng Index, during the period from 2 January 2013 up to and including the Latest Practicable Date (the

“Review Period”):

Historical Share price performance

0

1

2

3

4

5

6

7

2/1/

2013

2/2/

2013

2/3/

2013

2/4/

2013

2/5/

2013

2/6/

2013

2/7/

2013

2/8/

2013

2/9/

2013

2/10

/201

3

(HK$)

Closing price of the Shares Hang Seng Index (rebased)

The Subscription Price

Source: Bloomberg

As shown in the chart above, the price performance of the Shares is broadly in line with that of

the Hang Seng Index during the Review Period. During the Review Period, the closing prices of the

Shares ranged from HK$3.83 per Share to HK$6.26 per share and the average closing price was

approximately HK$4.87 per Share. We noted that the Share price increased to above the Subscription

Price after the Announcement, which was influenced by the overall market sentiment as well as the

investors’ reaction to the contents of the Announcement. As the Subscription Price of HK$4.74 per

Share lies within the range of the closing prices of the Shares during the Review Period, we are of the

view that the Subscription Price is fair and reasonable.

Comparable company analysis

The Group is principally engaged in developing mid-to-high end residential properties, high-end

office premises and retail properties in the PRC and the market capitalisation of the Company was

approximately HK$28,524 million as at the Latest Practicable Date. Consolidated net asset value

attributable to owners of the Company was approximately RMB38,260 million as at 31 December

2012 and the net asset value per Share was approximately HK$8.16 (based on a total of 5,955,357,936


— 44 —

Shares as at the Latest Practicable Date and an exchange rate of HK$1.27 to RMB1). Profit

attributable to owners of the Company was approximately RMB3,796 million for the year ended 31

December 2012 and earnings per Share was approximately HK$0.81 (based on a total of 5,955,357,936

Shares as at the Latest Practicable Date and an exchange rate of HK$1.27 to RMB1).

To assess the fairness and reasonableness of the Subscription Price, we have searched for

companies listed on the Stock Exchange, which are mainly engaged in real estate development in the

PRC with market capitalisation as at the Latest Practicable Date within the range of HK$14 billion to

HK$43 billion, being the range of 50% to 150% of the market capitalisation of the Company as at the

Latest Practicable Date. To the best of our knowledge and as far as we are aware of, there are 14

companies which is an exhaustive list of real estate companies based on the criteria mentioned above,

which we considered comparable to the Company in terms of their size, business and geographical

location and form a representative sample.

As real estate development is an asset based business, we have used price to book ratio implied

by the closing prices of the comparable companies on the Latest Practicable Date, which we consider

appropriate for this comparison purpose. As the Company has been profitable, we also use price to

earnings ratio implied by the closing prices of the comparable companies on the Latest Practicable

Date for this comparison purpose.


— 45 —

Based on the Subscription Price of HK$4.74 per Share, net asset value per Share of

approximately HK$8.16 as at 31 December 2012, and earnings per Share of approximately HK$0.81,

the implied price to book ratio is approximately 0.58 times and the implied price to earnings ratio is

approximately 5.86 times. Such valuation ratios are within the range of those comparable companies

as tabularised below:

Company nameGeographicallocation

Stockcode

Marketcapitalisation

Price tobook ratio

Price toearnings

ratio

(HK$ million) (times) (times)

Guangzhou R&F

Properties Co Ltd

PRC 2777 40,924 1.21 5.84

New World China Land

Ltd

PRC 917 34,498 0.63 7.47

SOHO China Ltd PRC 410 32,665 0.84 2.42

Greentown China Holdings

Ltd

PRC 3900 32,359 1.20 5.24

Agile Property Holdings

Ltd

PRC 3383 31,612 0.97 4.96

Franshion Properties China

Ltd

PRC 817 24,461 0.85 7.24

China Overseas Grand

Oceans Group Ltd

PRC and

Hong Kong

81 20,768 2.61 8.65

Yuexiu Property Co Ltd PRC,

Hong Kong

and overseas

123 20,116 0.71 6.36

Shui On Land Ltd PRC 272 20,724 0.52 8.02

Poly Property Group Co

Ltd

PRC and

Hong Kong

119 17,092 0.63 6.50

Shenzhen Investment Ltd PRC 604 16,543 0.94 7.67

Hopson Development

Holdings Ltd

PRC 754 21,217 0.50 7.11

Sunac China Holdings Ltd PRC 1918 16,861 1.39 5.08

KWG Property Holding

Ltd

PRC 1813 14,350 0.74 4.68

Maximum 40,924 2.61 8.65

Minimum 14,350 0.50 2.42

Average 24,585 0.98 6.23

Median 20,993 0.84 6.43

The Subscriptions 0.58 5.86

Source: Bloomberg


— 46 —

As both the implied price to book ratio and price to earnings ratio of the Subscriptions are within

the range of such ratios of comparable companies, we consider that the pricing of Subscriptions is in

line with market practice, fair and reasonable and the entering of the Subscriptions is in the interest

of the Group and the Shareholders as a whole. We have also analysed the financial impacts to the

Group before and after the completion of the Subscription Agreements under the section headed

“POSSIBLE FINANCIAL EFFECTS” below.

Comparable companies issuing new shares to connected persons under specific mandates

In assessing the fairness and reasonableness of the Subscription Price, we have also identified

an exhaustive list of companies listed on the Stock Exchange which announced the issuance of new

shares to connected persons for cash under specific mandates during the period from 1 January 2013

to the Latest Practicable Date. We are of the view that they represent a fair and representative sample

for the purpose of comparing the Subscription Price to their respective subscription prices.


— 47 —

For each of the nine identified companies issuing new shares, we compared the premium or

discount of its subscription price to (a) the closing price on the last trading day (the “LTD”), (b) the

5-day average closing price, and (c) the 10-day average closing price, prior to and including the LTD

before the release of the respective announcement, summarised in the following table:

Announcement date Company Stock code

Premium/(discount) of the

subscriptionprice over/to theclosing price on

the LTD


subscriptionprice over/to the

5-day averageclosing priceprior to and

including theLTD


subscriptionprice over/to the

10-day averageclosing priceprior to and

including theLTD

(Approx.) (Approx.) (Approx.)

22 October 2013 Beautiful ChinaHoldings CompanyLimited

706 (22.48%) (22.72%) (23.43%)

2 October 2013 New Times EnergyCorporation Limited

166 1.67% 0.66% 0.16%

30 September 2013 Guangzhou ShipyardInternationalCompany Limited

317 (5.32%) (5.62%) (6.04%)

18 August 2013 Gemdale Propertiesand InvestmentCorporation Limited

535 (9.43%) (6.61%) (6.43%)

2 June 2013 Yunbo Digital SynergyGroup Limited

8050 (15.09%) (26.71%) (18.24%)

24 May 2013 WinteamPharmaceuticalGroup Limited

570 (19.06%) (18.42%) (12.43%)

22 April 2013 Great China PropertiesHoldings Limited

21 (18.67%) (19.95%) (20.26%)

24 January 2013 China Bio-MedRegenerationTechnology Limited

8158 (1.20%) (2.94%) (1.20%)

23 January 2013 Jun Yang Solar PowerInvestments Limited

397 4.46%) (5.66%) (1.83%)

Maximum 1.67% 0.66% 0.16%Minimum (22.48%) (26.71%) (23.43%)

Average (10.45%) (12.00%) (9.97%)Median (9.43%) (6.61%) (6.43%)

The Subscriptions 1.72% 1.41% 0.49%

Source: www.hkexnews.com


— 48 —

As shown in the table above, we note that the premium of the Subscription Price to the closing

price on the Last Trading Day and the 5-day and 10-day average closing prices prior to and including

the Last Trading Day are higher than those of the comparable new shares issuances above. We are of

the view that the Subscription Price is fair and reasonable.

4. Use of proceeds and reasons for the entering into of the Subscription Agreements

As at 30 June 2013, the Company had cash on hand of approximately RMB13.1 billion (including

restricted bank deposits of approximately RMB5.6 billion), and the Company paid approximately

US$574 million for redemption of all the outstanding balance of Perpetual Convertible Securities as

at 30 June 2013 by the end of September 2013, which resulted in reduced available cash on hand and

limited the Company’s development in new projects. As at 30 September 2013, the Company had cash

on hand of approximately RMB13.9 billion (including restricted bank deposits of approximately

RMB8.3 billion). The Board intends to use approximately one-third of the net proceeds of

approximately US$804 million from the Subscriptions to satisfy the consideration of the Acquisition,

approximately one-third of the net proceeds for financing other new projects and approximately

one-third of the net proceeds for general working capital purposes of the Group including payment of

interests, taxes, selling and marketing and other administrative expenses. Although the Company has

not engaged in any negotiations, signed any contracts or identified any targets for new projects as at

the Latest Practicable Date, the Company has set clear criteria for determining new projects to be

invested in terms of location, size and type, details of which has been set out on page 22 of the

circular. The Company intends to complete the Acquisition under the Master Acquisition Agreement

by December 2013 and plans to replenish its land bank in the short-term in order to satisfy its

development needs over the next few years. Taken into account of the increased working capital

requirements of the Company for the payment of, among other things, outstanding payables and

salaries and bonus payments to the Group’s employees as financial year-end approaches and current

favourable market conditions, we concur with the Company that it is an appropriate timing to conduct

the Subscriptions. We are in the view that the proceeds from the Subscriptions will strengthen the

Company’s equity in the long run, ensure the Company’s stable operation, and help the Company

maintaining a healthy financial structure for the Company’s future investment projects.

Under prevailing market conditions, the Board believes that the Subscriptions will strengthen the

Company’s financial position and allow the Company to raise necessary funds at a reasonable cost to

support the Group’s existing operations and enhance its flexibility to make further investments as and

when opportunities arise. The Subscriptions further optimise the Group’s capital structure, which

could result in the improvement of the credit profile of the Company and lowering of the Group’s

future financing costs. The Subscriptions would bring strategic value and business opportunities to the

Company through the development of closer ties with China Life and the Nan Fung Group. Upon

completion of the Subscriptions, China Life and the Nan Fung Group will increase their shareholding

in the Company and there would be greater alignment of interest between the Company and each of

China Life and the Nan Fung Group and hence China Life and the Nan Fung Group will have greater

incentive in achieving the sustained growth of the Group and enhancing Shareholders’ value in the

medium to long term. In particular, the Board believes that the China Life Subscription would allow

the Group to strengthen its strategic cooperation with China Life in various areas including financing,

capital markets, commercial property development, pension and other healthcare services where

Company can leverage on China Life’s expertise, experiences and reputation in financing negotiations,


— 49 —

have greater bargaining power to obtain the best possible borrowing terms to meet the financial needs

for its future projects and reduce its finance costs. The Nan Fung Subscription will give a greater

strategic cooperation between the Company and the Nan Fung Group in terms of the greater

investment opportunities by the Group in residential property development projects by leveraging on

the Nan Fung Group’s over 40 years of experience in real estate development in Hong Kong, in

particular high-end residential properties with well managed site planning, and well-established

relationships with international designers and suppliers in the development of high-quality residential

properties in the PRC. On 18 October 2013, the Company entered into a non-legally binding

memorandum of understanding with China Life Group for a period of 5 years in relation to explore

various potential areas of possible cooperation between the parties, including but not limited to: (i)

cooperation in strengthening the Company’s capital and debt structure; (ii) cooperation in the real

estate industry; and (iii) cooperation in the elderly care industry. In addition to the CBD Project and

the Dalian Project, the Group have also entered into joint ventures with two subsidiaries of China Life

Group in relation to commercial property development projects located at Central Business District

(“CBD”) area in Beijing. We believe the Subscriptions could enhance the cooperation of the Company

with China Life and the Nan Fung Group and hence improve the Company’s market competitiveness

and maintain a sustainable long-term growth. Having considered the above, we are of the view that

the entering into the Subscription Agreements is in the interests of the Company and the Independent

Shareholders as a whole.

5. Alternative fund raising methods available

We understand from the Company that apart from the Subscriptions, the Company has also

considered various other means of financing, including debt financings by way of bank borrowings or

issue of bonds and equity financings by way of placement of new Shares to independent investors or

a rights issue or open offer.

Debt financings

As bank borrowing or issue of bonds will generate additional finance costs to the Group, increase

the gearing ratio of the Group and affect adversely the cash flow position of the Group, the Company

preferred equity financing to debt financing to maintain its capital structure at an optimal and

sustainable level.

Alternative equity financings

The Directors have also considered alternative equity financings which would not affect the debt

position of the Group, including a private placement of Shares to independent third party investors or

a rights issue or open offer to existing Shareholders.


— 50 —

The Company expected the amount of fund raised through a private placement is limited,

especially given the Subscription Price was at premium over market price of the Shares prior to the

Announcement and the Subscription Shares are subject to a two year lock-up period, which might not

be attractive to independent third party investors since they could purchase Shares on market at a

lower price. In addition, a private placement has a similar dilutive effect as the Subscriptions, as far

as the Independent Shareholders are concerned. Moreover, a private placement to third party investors

could not bring strategic value and business opportunities to the Company through the development

of closer ties with China Life and the Nan Fung Group as the Subscriptions do.

As regards a rights issue or open offer, which will give an opportunity to all Shareholders to

participate in the subscription for new Shares to be issued by the Company on a pro rata basis, the

Company has considered such factors as (a) the extra underwriting fees and arrangement costs; (b) the

price of a rights issue or open offer normally involving a substantial discount to market price; (c)

longer timetable to complete; and (d) the lack of certainty in the successful implementation of a rights

issue or open offer. On this basis, the Company consider other equity financing methods to be less

optimal than the Subscriptions for the Group to raise additional fund for the development of the

Group.

Taking into account (i) potential strategic benefits as a result of increasing the shareholding of

China Life and the Nan Fung Group as the two largest shareholders of the Company, (ii) the financial

position and future business plan of the Company; and (iii) the pros and cons of other alternative

financing methods, as discussed above, we are of the view that the fund raising by way of the

Subscriptions is currently the best available option of financing for the Company, and is fair and

reasonable and in the interests of the Company and the Shareholders as a whole.

6. Changes in shareholding structure of the Company

Assuming there is no change in the issued share capital of, and the shareholding in, the Company

from the Latest Practicable Date other than the allotment and issue of the Subscription Shares under

the Subscription Agreements, immediately after completion of the Subscriptions, China Life and the

Nan Fung Group will be respectively interested in 29.04% and 20.98% of the issued share capital of

the Company while the shareholding of the public Shareholders would be decreased from 61.08% to

49.98%, and the Company can still meet its public float requirement under the Listing Rules.

Further details of the potential change in shareholding structure of the Company are illustrated

on page 18 in this circular. Public Shareholders will face dilution impact upon completion of the

Subscriptions, which we have also analysed under the section headed “POSSIBLE FINANCIAL

EFFECTS” below, but in exchange, the Subscriptions will improve the capital structure of the

Company and bring strategic benefits to the Company through closer cooperation with two major

Shareholders, which will help the Company maintain stable and sustainable growth and enhance the

value of the Company in the long term. Based on the above, we are of the view that the Subscriptions

are fair and reasonable and in the interests of the Company and the Shareholders as a whole.


— 51 —

II. MASTER ACQUISITION AGREEMENT

In formulating and giving our opinion to the Independent Board Committee and the Independent

Shareholders in respect of the Master Acquisition Agreement and the transactions contemplated

thereunder, we have taken into account the following principal factors:

1. Business and financial information of the Target Companies

Each of the Target Companies is an investment holding company. As at the Latest Practicable

Date, the Group and the Nan Fung Group effectively owned an interests of 80% and 20% in the CBD

Project, respectively; and the Group and the Nan Fung Group effectively owned an interests of

approximately 90% and 10% in the Dalian Project, respectively. As at 30 June 2013, the book value

of the CBD Project and the Dalian Project amounts to RMB3,922 million and RMB7,981 million,

respectively. As at the Latest Practicable Date, the total investment costs paid by the Vendor in relation

to the CBD Project and the Dalian Project amounts to approximately USD270 million, and the Nan

Fung Group had advanced shareholder’s loan of approximately HK$896 million (equivalent to

approximately RMB706 million) to Target Company One.

Based on the unaudited consolidated accounts of the Target Companies prepared in accordance

with Hong Kong Financial Reporting Standards, none of the Target Companies recorded revenue and

profit for the years ended 31 December 2011 and 2012 and the six months ended 30 June 2013, and

the combined net asset value of the Target Companies attributable to the Nan Fung Group was

approximately RMB930 million as at 30 June 2013. For further details of the Target Companies and

the CBD Project and the Dalian Project, please refer to pages 27 to 32 of the circular and Appendix

I to the circular.

The unaudited adjusted combined net asset value of the Target Companies attributable to the Nan

Fung Group as at 30 June, 2013 was approximately RMB2,736 million, which is derived from the sum

of (i) the combined net asset value of the Target Companies attributable to the Nan Fung Group of

approximately RMB930 million as at 30 June 2013; (ii) the increase in value of the CBD Project and

the Dalian Project attributable to the Nan Fung Group of approximately RMB1,099 million; and (iii)

the shareholder’s loan advanced to Target Company One by the Nan Fung Group of approximately

HK$896 million (equivalent to approximately RMB706 million).


— 52 —

2. Overview of property industry in Beijing and Dalian

Gross Domestic Product (“GDP”) and GDP per

capita of Beijing from 2008 to 2012

1,111.5 1,215.31,411.4

1,625.21,787.9

64,491 66,94073,856

81,65887,475

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2008 2009 2010 2011 2012

GDP (RMB billion, left) GDP per capita (RMB, right)

Source: Beijing Municipal Bureau of Statistics (北京市統計局) (http://www.bjstats.gov.cn)

Beijing office overall average rent

200.46

217.07

227.75

237.51

253.89256.69 258.50

170

180

190

200

210

220

230

240

250

260

270

3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013

(RM

B per

squar

e m

eter

per

month

)

Source: Colliers International Beijing


— 53 —

As shown in the above charts, Beijing, being the capital and one of the first tier cities in the PRC,

has recorded a gradually growing trend for its GDP and GDP per capita during the last five years. The

overall average net effective rent of Beijing offices represented a fast growth since the third quarter

of 2011 and the CBD area maintained top two of the most expensive office submarkets in Beijing

during such period.

GDP and GDP per capita of Dalian from 2008 to 2012

385.8441.8

515.8

615.0700.3

63,198

71,833

87,96291,287

102,216

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

0

20,000

40,000

60,000

80,000

100,000

120,000

2008 2009 2010 2011 2012

GDP (RMB billion, left) GDP per capita (RMB, right)

Source: Dalian Municipal Bureau of Statistics (大連市統計局) (http://www.stats.dl.gov.cn)

Average selling price of residential properties

of Dalian from 2008 to 2012

5,6176,174

6,760

7,9297,584

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2008 2009 2010 2011 2012

(RMB)

Source: Dalian Municipal Bureau of Statistics (大連市統計局) (http://www.stats.dl.gov.cn)


— 54 —

As shown in the above charts, Dalian, being one of the major second tier cities in the PRC, has

recorded a gradually growing trend for its GDP and GDP per capita during the last five years. The

selling price of residential properties of Dalian from 2008 to 2011 maintained a stable growth with a

drop down in 2012 which was influenced by the tightening policy on property industry by the PRC

government.

Despite the global financial crisis and economic downturn that started in 2008, the PRC’s

economy has continued to sustain a comparatively high rate of growth with momentum seen in the

property market. It is generally expected that the PRC government will continue to maintain an

economic policy that will allow sustainable growth in the domestic consumption and local economy.

3. Principal terms of the Master Acquisition Agreement

On 27 September 2013, Fame Gain (an indirect wholly-owned subsidiary of the Company) and

Nan Fung China (a member of the Nan Fung Group) entered into the Master Acquisition Agreement,

pursuant to which Nan Fung China agreed to sell or procure the sale of, and Fame Gain agreed to

purchase or procure the purchase of, 20% interests of the CBD Project and approximately 10%

interests in the Dalian Project.

The consideration

The total consideration payable by the Purchaser to the Vendor for the CBD Interests and the

Dalian Interests on the Acquisition Completion Date is USD314 million in cash, of which USD154

million is payable for the CBD Interests and USD160 million is payable for the Dalian Interests. The

Company intends to satisfy the consideration by part of the proceeds of the Subscriptions and bank

borrowings in the amount of US$265 million and US$49 million, respectively.

The consideration of the Acquisition was determined by reference to the market value of the CBD

Project and the Dalian Project after an arm’s length negotiation between the Group and the Nan Fung

Group. The consideration effectively represents a discount of approximately 29.82% to the unaudited

adjusted net asset value of the Target Companies attributable to the Nan Fung Group.

In accordance with the valuation report set out in Appendix I to the circular, the market value

of the CBD Project and the Dalian Project in their existing states as at 31 August 2013 was estimated

at RMB6,300 million and RMB11,850 million respectively by DTZ, and hence the market value of the

CBD Project and the Dalian Project attributable to the Nan Fung Group as at 31 August 2013 was

estimated at RMB1,260 million and RMB1,185 million.

In assessing the consideration for the CBD Interests and the Dalian Interests, we have reviewed

the valuation report on the methodology of, and the bases and assumptions adopted for, the valuation

of the CBD Project and the Dalian Project. The valuation was carried out on the assumption that the

relevant title certificates had been obtained and all land premium and related fees for the grant of the

title certificates had been fully settled. Although certain land plots of the CBD Project and the Dalian

Project have not yet obtained the state-owned land use rights certificates, according to the legal

opinion by the Group’s PRC legal adviser, there will be no legal impediment in obtaining such

outstanding state-owned land use rights certificates on the basis of compliance with the relevant


— 55 —

procedures and the Company expects such outstanding state-owned land use rights certificates to be

obtained in the first half of 2014. Therefore we consider such assumption is reasonable and the

valuation based on such assumption is valid. For the purpose of valuation, DTZ has principally

adopted the direct comparison approach by making reference to comparable sales evidence as

available in the relevant market, and adjusted with the development costs expended and other costs

that will be expended to complete the development to arrive at the final value of the CBD Project and

the Dalian Project in their existing states. We are of the view that the methodology adopted by DTZ

is a reasonable approach in deriving the open market values of the CBD Project and the Dalian Project.

Shareholders are advised to make reference to the valuation report as set forth in the Appendix I to

the circular.

As shown from the above, the consideration of USD314 million represents a discount of

approximately 29.82% to unaudited adjusted combined net asset value of the Target Companies

attributable to the Nan Fung Group as at 30 June 2013 of approximately RMB2,736 million, which we

consider is fair and reasonable and in the interests of the Group and the Shareholders as a whole.

Conditions precedent

Completion of the Acquisition is conditional upon the fulfilment or waiver of all of its

conditions. For details, please pages 24 to 25 of the circular. Independent Shareholders should be

noted that the Acquisition is conditional on the completion of the Nan Fung Subscription but such

condition could be waived by the Purchaser.

4. Reasons for the Master Acquisition Agreement


interest in the CBD Project and approximately 10% interests in the Dalian Project, thereby obtaining

100% control of the CBD Project and the Dalian Project. The Master Acquisition Agreement will allow

the Group to consolidate its position in one of the Group’s key commercial properties in CBD, Beijing

and one of the Group’s flagship projects in Dalian in PRC. As analysed in the section “Overview of

property industry in Beijing and Dalian” above, both Beijing and Dalian are leading cities in the PRC

with steady growth of GDP, and it is expected the commercial properties in Beijing especially the CBD

area and the residential properties in Dalian will maintain their gradually growth trends. The

Acquisition will enable the Group to enjoy the growth of property sector in Beijing and Dalian through

the development of the CBD Project and the Dalian Project. The Acquisition would also increase the

Group’s interest in land bank, improve the efficiency of the decision-making process and the

implementation of plans in respect of the CBD Project and the Dalian Project, which is in the interests

of the Company and the Shareholders as a whole. Having considered the above, we are of the view

that the entering into the Master Acquisition Agreement is in the interests of the Company and the

Independent Shareholders as a whole.

5. Discussion

Since the Nan Fung Subscription is conditional on the completion of the Acquisition and such

condition could not be waived, the combination of the Nan Fung Subscription and the Acquisition is

actually an assets swap for the Company, exchanging 686,611,211 Shares at HK$4.74 per Share for

the CBD Interests and the Dalian Interests and cash of approximately USD106 million.


— 56 —

Reference is made to “Analysis of historical Share price performance” section above, we note

that the closing price of the Shares have been traded consistently at a discount to the underlying net

asset value per Share for all time during the Review Period.

Although the price to book discount represented by the Subscription Price of approximately

38.91% is higher than 29.82% as represented by the consideration of the Acquisition, we are of view

that the Subscription Price is referenced to the prevailing market price, which includes a valuation

over a basket of assets held by the Company, and the consideration of the Acquisition is referenced

to the valuation report by DTZ taken into account of the outlook of the CBD Project and the Dalian

Project. We are of the opinion that it is fair and reasonable.

We have also analysed the financial impacts to the Group before and after the completion of the

Subscription Agreements and the Master Acquisition Agreement under the section headed “POSSIBLE

FINANCIAL EFFECTS” below.

POSSIBLE FINANCIAL EFFECTS

The following analysis is based on the Company’s annual report 2012 and interim report 2013

and the unaudited consolidated financial statements of the Target Companies. As at the Latest

Practicable Date, Target Company Two, Target Company Three, Target Company Four and Target

Company Five are non wholly-owned subsidiaries of the Company and the accounts of such companies

have already been consolidated into the accounts of the Group. Upon completion of the Acquisition,

all Target Companies will become wholly-owned subsidiaries of the Company and the accounts of

Target Company One will also be consolidated into the accounts of the Group.

Effects on net asset value

According to the Company’s interim report 2013, the audited consolidated net asset value

attributable to owners of the Company was approximately RMB36,382 million as at 30 June 2013, and

the net asset value per Share was approximately RMB6.11. Upon completion of the Subscriptions, the

consolidated net asset value attributable to owner of the Company will be improved roughly by the

net proceeds from the Subscriptions of approximately USD804 million.


from the Latest Practicable Date other than the issue of Shares pursuant to the Subscription

Agreements, net asset value per Share would decrease to approximately RMB5.67, representing a

decrease of approximately 7%.

As the consideration of the Acquisition represents a discount to the unaudited adjusted combined

net asset value of the Target Companies attributable to the Nan Fung Group, we are of the view that

Acquisition will improve the consolidated net asset value attributable to owners of the Company.


— 57 —

Effects on earnings

The Group recorded profit attributable to owners of the Company of approximately RMB3,796

million and basic earnings per share attributable to owners of the Company of approximately

RMB0.64 for the year ended 31 December 2012. The Subscriptions would not have any impact on the

profitability of the Group.


from the Latest Practicable Date other than the issue of Shares pursuant to the Subscription

Agreements, earnings per Share attributable to owners of the Company would be diluted to

approximately RMB0.52, representing a dilution of approximately 18%.

As the Target Companies are investment holding companies and the CBD Project and the Dalian

Project remains under development, no immediate contribution to the Group’s earning is expected

upon completion of the Acquisition.

Effects on gearing and working capital

As at 30 June 2013, the Group’s total borrowings was approximately RMB32,745 million and the

gearing ratio, calculated as net debt divided by total capital, was approximately 39%. Upon

completion of the Subscriptions, the gearing ratio of the Group would be reduced to approximately

31%. Upon completion of the Acquisition, the Group will incur a net cash outflow of approximately

USD314 million, being the consideration of the Acquisition. The current liabilities of approximately

HK$896 million of Target Company One as at 30 June 2013 will also be consolidated into the net debts

of the Group’s accounts. The estimated gearing ratio will slightly increase to 41% after completion of

the Acquisition. We are of the view that the impact on the gearing ratio of the Group is insignificant.

The Group had cash and cash equivalents of approximately RMB7,470 million (not including

restricted bank deposits of approximately RMB5,645 million) and working capital of approximately

RMB50,370 million as at 30 June 2013. Upon completion of the Subscriptions, the liquidity of the

Group will be improved as the Subscriptions will raise net proceeds of approximately USD804

million. We are of the view that entering into the Subscription Agreements will enhance the cash

position and working capital position of the Group. Given the consideration of the Acquisition is

USD314 million and the committed capital expenditures of the CBD Project and the Dalian Project

have already been included in the financial statements of the Group as at 30 June 2013, we are of the

view that the Acquisition will not have significant adverse impact on the working capital position and

the normal operation of the Group following the Acquisition.


— 58 —

RECOMMENDATION

We have considered the above principal factors and reasons and particularly (i) the strategic

rationale of the Subscription Agreements and the Master Acquisition Agreement; (ii) the terms and the

consideration as discussed above; and (iii) the possible financial effects to the Group. The net asset

value per Share and the earnings per Share will be diluted upon completion of the Subscriptions, but

in exchange, the Subscriptions will improve the capital structure of the Company and bring strategic

benefits to the Company through closer cooperation with two major Shareholders, which will help the

Company maintain stable and sustainable growth and enhance the value of the Company in the long

term. Based on the above principal factors and reasons, we consider that the Subscription Agreements

and the Master Acquisition Agreement are on normal commercial terms, and the entering of the

Subscription Agreements and the Master Acquisition Agreement is in the ordinary and usual course of

business of the Company, fair and reasonable and in the interest of the Company and the Independent

Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend the

Independent Shareholders to vote in favour of the resolutions to be proposed at the EGM to approve

the Subscription Agreements and the Master Acquisition Agreement and the transactions contemplated

thereunder.

Yours faithfully,

for and on behalf of

Anglo Chinese Corporate Finance, LimitedMichael Fok

Director


— 59 —

The following is the text of a letter, summary of valuations and valuation certificates prepared

for the purpose of incorporation in this Circular received from DTZ Debenham Tie Leung Limited, an

independent property valuer, in connection with its opinion of value of the property interests of the

Company as at 31 August 2013.

16th Floor

Jardine House

1 Connaught Place

Central

Hong Kong

28 October 2013

The Directors

Sino-Ocean Land Holdings Limited

Unit 601, One Pacific Place

88 Queensway

Hong Kong

Dear Sirs,

Instructions, Purpose and Date of Valuation

In accordance with your instructions for us to value certain properties in which Sino-Ocean Land

Holdings Limited (referred to as the “Company”) and its subsidiaries (together referred to as the

“Group”) have interests in the People’s Republic of China (the “PRC”) and intend to acquire the

remaining interests of the corresponding project companies (as more particularly described in the

attached valuation certificates), we confirm that we have inspected the properties, made relevant

enquiries and obtained such further information as we consider necessary for the purpose of providing

you with our opinion of the values of such properties as at 31 August 2013.

Definition of Market Value

Our valuation of the each of the properties represents its market value which in accordance with

The HKIS Valuation Standards (2012 Edition) issued by The Hong Kong Institute of Surveyors is

defined as “the estimated amount for which an asset or liability should exchange on the date of

valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper

marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

APPENDIX I PROPERTY VALUATION REPORT

— 60 —

LR14A.59(6)App1, Part B 5(3)R5.03

R5.06(8)R5.07

Valuation Basis and Assumption

In valuing the properties, we have complied with the requirements set out in Chapter 5 and

Practice Note 12 of the Rules Governing the Listing of Securities published by The Stock Exchange

of the Hong Kong Limited and The HKIS Valuation Standards (2012 Edition) published by the Hong

Kong Institute of Surveyors.

Our valuations exclude any estimated price inflated or deflated by special terms or circumstances

such as atypical financing, sale and leaseback arrangement, special considerations or concessions

granted by anyone associated with the sale, or any element of special value.

The properties are generally either vacant sites pending for development or at the early stage of

construction. The Group is currently the majority stakeholder of the project companies of the

properties and is intending to acquire the remaining interests of the project companies. To facilitate

the transaction, we are specifically instructed to carry out the valuations on the assumption that the

relevant title certificates had been obtained and all land premium and related fees for the grant of the

title certificates had been fully settled.

In the course of our valuation of the properties in the PRC, we have assumed that, unless

otherwise stated, the transferable land use rights of the properties for their respective terms at nominal

annual land use fees have been granted and that any premium payable has already been fully paid. We

have relied on the information and advice given by the regarding the title to each of the properties and

the interests of the Group in the properties. In valuing the properties, we have assumed that the Group

has an enforceable title to each of the properties and has free and uninterrupted rights to use, occupy

or assign the properties for the whole of the respective unexpired land use term as granted.

In respect of the properties situated in the PRC, the status of titles and grant of major certificates

approvals and licences, in accordance with the information provided by the Group are set out in the

notes of the respective valuation certificate.

No allowance has been made in our valuations for any charges, mortgages or amounts owing on

the properties nor for any expenses or taxation which may be incurred in effecting a sale. Unless

otherwise stated, it is assumed that the properties are free from encumbrances, restrictions and

outgoings of an onerous nature which could affect their values.

Method of Valuation

In valuing the properties, we have used Direct Comparison Approach by making reference to

comparable sales evidence as available in the relevant market.

In respect of Property No. 2 part of which is under development, our valuation is carried out on

the basis that the property will be developed and completed in accordance with the Group’s latest

development proposals provided to us. We have assumed that all consents, approvals and licences from

relevant government authorities for the development proposal have been obtained without onerous


— 61 —

R5.05

R5.06(1)(t)

conditions or delays. We have also assumed that the design and construction of the developments are

in compliance with the local planning and other relevant regulations and have been or will be approved

by the relevant authorities. In valuing the property, we have used Direct Comparison Approach by

making reference to comparable sales evidence as available in the relevant market so as to assess the

market value when completed of the property. The market value when completed represents our

opinion of the aggregate value of the development assuming it would have been completed at the date

of valuation. In arriving at the final value of the property, we have also taken into account the

development costs expended and the costs that will be expended to complete the development.

Source of Information

We have been provided by the Group with extracts of documents in relation to the titles to the

properties. However, we have not inspected the original documents to ascertain any amendments

which may not appear on the copies handed to us.

In the course of our valuation, we have relied to a considerable extent on the information given

by the Group. We have been provided by the Group with extracts of documents in relation to the titles

to the properties. In the course of our valuation, we have relied to a very considerable extent on the

information given to us by the Group and its legal adviser, 國浩律師(北京)事務所 (Grandall Law Firm

(Beijing)), regarding the title to each of the properties and the interests of the Group in the properties.

We have also accepted advice given to us on such matters as planning approvals or statutory notices,

easements, tenure, identification of land and buildings, proposed development scheme, development

costs and time schedules, completion dates of buildings, number of units, particulars of occupancy,

site and floor areas, interests attributable to the Group and all other relevant matters.

Dimensions, measurements and areas included in the valuation certificates are based on the

information provided to us and are therefore only approximations. We have had no reason to doubt the

truth and accuracy of the information provided to us by the Group which is material to the valuations.

We were also advised by the Group that no material facts have been omitted from the information

provided.

Title investigation

We have been provided with extracts of documents relating to the titles of the properties in the

PRC, but no searches have been made in respect of the properties. We have not searched the original

documents to verify ownership or to ascertain any amendment which may not appear on the copies

handed to us. We are also unable to ascertain the title of the properties in the PRC and we have

therefore relied on the advice given by the Group and its legal adviser regarding the Group’s interests

in the PRC properties.


— 62 —

Site Inspection

Our valuers, Angie Ge, Yuhong Shi and Mary Liu, Registered China Real Estate Appraisers,

inspected the exterior and, wherever possible, the interior of each of the properties between 12

September 2013 and 13 September 2013. However, no structural survey has been made, but in the

course of our valuation, we did not note any serious defects. We are, however, not able to report that

the properties are free of rot, infestation or any other structural defects. No tests were carried out to

any of the services. Moreover, we have not carried out any soil investigations to determine the

suitability of the soil conditions and the services etc. for any future development. Our valuations are

prepared on the assumption that these aspects are satisfactory and that no extraordinary expenses or

delays will be incurred during the construction period.

Unless otherwise stated, we have not been able to carry out detailed on-site measurements to

verify the site and floor areas of the properties and we have assumed that the areas shown on the

documents handed to us are correct.

Currency

Unless otherwise stated, all sums stated in our valuations are in Renminbi, the official currency

of the PRC.

We enclose herewith a summary of our valuations and our valuation certificates.

Yours faithfully,

for and on behalf of

DTZ Debenham Tie Leung LimitedAndrew K.F. Chan

Registered Professional Surveyor (General Practice)

Registered China Real Estate Appraiser

MSc, MHKIS, MRICS

Senior Director, Valuation & Advisory Services

Note: Mr. Andrew K.F. Chan is a Registered Professional Surveyor who has over 26 years’ of experience in the valuation of

properties in the PRC.


— 63 —

R5.06(7)

PN12-4.2

SUMMARY OF VALUATIONS

Properties held by the Group under or for development in the PRC

Property

Market value inexisting stateassuming full

good title as at31 August 2013

Attributableinterest tothe Group


good title as at31 August 2013attributable to

the Group(RMB) (%) (RMB)

1. A piece of land known as Plot Z6,

Guanghua Road,

Chaoyang District,

Beijing,

the PRC

6,300,000,000 80 5,040,000,000

2. Plots A, B, C and E,

Ocean Diamond Bay,

East of Gongxing Street and

Dongbei Road,

South of Dongfang Road,

Ganjingzi District,

Dalian,

Liaoning Province,

the PRC

11,850,000,000 90 10,665,000,000

Total: 18,150,000,000 15,705,000,000

Notes:-

The properties are generally either vacant sites pending for development or at the early stage of construction. The Group is

currently the majority stakeholder of the project companies of the properties and is intending to acquire the remaining interests

of the project companies. To facilitate the transaction, we are specifically instructed to carry out the valuations on the

assumption that the relevant title certificates had been obtained and all land premium and related fees for the grant of the title

certificates had been fully settled.


— 64 —

R5.06(1)(t)

VALUATION CERTIFICATE

Properties held by the Group under or for development in the PRC

Property Description and tenureParticulars ofoccupancy


good title as at31 August 2013

1. A piece of land

known as Z6,

Guanghua Road,

Chaoyang District,

Beijing,

the PRC

The property comprises a piece of land with a

total site area of approximately 11,007 sq m.

The property is situated in the CBD of Beijing

where numerous commercial and financial

institutions are located. As the capital city of

the mainland, the Beijing CBD has attracted

both domestic and international corporations and

professionals to establish their headquarters.

Supply of prime office premises has been tight

in the past few years. Grade A office rents have

been climbing whilst vacancy rates have

maintained at low levels.

As advised by the Company, a composite project

with ancillary facilities is planned to be

developed on the site with a total planned gross

floor area of approximately 250,300 sq m.

The details of the planned gross floor areas are

summarized as follows:

Use Approximateplanned gross

floor area(sq m)

Aboveground

Office 141,000

Retail 10,000

Hotel 45,000

Basement

Retail 8,650

Car parking spaces 28,500

Ancillary facilities 17,150

Total 250,300

The land use rights of the property have been

granted for commercial use of 40 years and 50

years for composite use, commencing from the

issue date of Grant Contract of Land Use

Rights.

The property is

currently a

vacant land

pending for

construction.

RMB6,300,000,000

(80% interest

attributable to

the Group :

RMB5,040,000,000)

(see Note (1) below)


— 65 —

R5.06(1)

R5.06(4)R5.06(5)(a)

R5.10

Notes:-

(1) As advised by the Group, the State-owned Land Use Rights Certificates of the property have not been obtained

yet. However, the Grant Contract of Land Use Rights has been issued to the property and all land premium have

been paid. On the basis that all valid title certificates been issued to the property, all land premium and related

fees for the grant of the title certificates, costs of public utilities and ancillary infrastructure fees been fully

settled, the market value in existing state as at 31 August 2013 would be RMB6,300,000,000 (80% interest

attributable to the Group: RMB5,040,000,000).

(2) Pursuant to Grant Contract of Land Use Rights No. (2012) 0254 dated 30 August 2012, the land use rights of the

property with a site area of approximately 11,007 sq m have been contracted to be granted to the consortium of

遠洋地產有限公司, 香港上海滙豐銀行有限公司 and 崇高發展有限公司 (Sino-Ocean Land Limited, The

Hongkong and Shanghai Banking Corporation Limited and Super Goal Development Limited), and the details are

summarized as follows:-

(i) Lot No. : No. (2012)0254

(ii) Location : CBD, Guanghua Road, Chaoyang District, Beijing

(iii) Site area : 11,007 sq m

(iv) Usage : commercial and composite

(v) Land use term : 40 years for commercial, 50 years for composite, commencing from

the issue date of Grant Contract of Land Use Rights

(vi) Land grant fee : RMB3,807,030,000

(vii) Building covenant : Commencement before 1 August 2014

Construction completed before 1 August 2017

Pursuant to a Supplemental Agreement dated 27 August 2013, the grantee of the Grant Contract of Land Use

Rights No. (2012) 0254 has been changed to 北京天江通睿置業有限公司 (Beijing Skyriver CBD Property Co.,

Ltd.).

(3) According to Business Licence No. 110000450226944, 北京天江通睿置業有限公司 (Beijing Skyriver CBD

Property Co., Ltd.) was established with a registered capital of RMB3,923,144,415 as a limited company on 23

January 2013.

(4) We have been provided with and relied on a legal opinion on the property prepared by the Group’s PRC legal

adviser, which contains, inter alia, the following information:

(i) The consortium of 遠洋地產有限公司, 香港上海滙豐銀行有限公司 and 崇高發展有限公司 (Sino-Ocean

Land Limited, The Hongkong and Shanghai Banking Corporation Limited and Super Goal Development

Limited) has legally obtained the Notification of Confirmation of Successful Bid of the property, signed the

Grant Contract of Land Use Rights pursuant to the Notification of Confirmation of Successful Bid, lawfully

set up the project company, settled the land premium and related costs of the property, and signed the

relevant supplemental agreement pursuant to the Grant Contract of Land Use Rights.

(ii) Upon obtaining the State-owned Land Use Rights Certificate, the project company shall be in possession

of the proper legal land use rights of the property.

(iii) On the basis of compliance with the abovementioned procedures, there is no legal impediment for the

project company to obtain the State-owned Land Use Rights Certificate of the property.


— 66 —

PN12-5.1

PN12-5.2(b)

PN12-16

PN12-7PN12-8.2

(5) The status of title and grant of major approvals and licences in accordance with the information provided to us

by the Group are as follows:

State-owned Land Use Rights Certificate No

Grant Contract of Land Use Rights Yes

Business Licence Yes

As advised by the Company, the land premium has been fully settled and the Company has submitted the

application of State-owned Land Use Rights Certificate which is expected to be obtained in the first quarter of

2014.


— 67 —

VALUATION CERTIFICATE

Property Description and tenure

Particulars of

occupancy

Market value in

existing state

assuming full

good title as at

31 August 2013

2. Plots A, B, C and

E, Ocean Diamond

Bay,

East of Gongxing

Street and Dongbei

Road, South of

Dongfang Road,

Ganjingzi District,

Dalian,

Liaoning Province,

the PRC

The property comprises four plots namely A, B,

C and E.

Plots A, B and E are altogether planned to be

developed in seven phases:

• Phase 1 (Plots A1, A2, A3, B1 and B2)

• Phase 2 (Plots B3 and B5)

• Phase 4 (Plot B4)

• Phase 5 (Plots E1 to E4)

• Phase 6 (Plots E5 and E6)

• Phase 7 (Plot A5) and

• Phase 9 (Plot A4)

Plot C was vacant.

The site areas of the property are set out below:

Plot Site area

(sq m)

A 197,319.0

B 175,903.3

C 196,400.0

E 179,000.0

Total 748,622.3

The property as a famous scenic spot is situated

in Ganjingzi district with sea view.

The district is being converted from previous

industrial use to mixed land use with a focus on

cultural, recreational, tourist and resort

developments. The subject development is the

first mixed land use project sold by the local

government in 2010. Infrastructure facilities are

yet to be developed. It is about 30-40 minutes’

driving distance from the Dalian railway station.

As at the date

of valuation,

Phases 1 and 2

were under

construction and

scheduled for

completion in

2014 and 2015

respectively.

The remaining

phases were

vacant pending

for construction.

RMB11,850,000,000

(90% interest

attributable to

the Group:

RMB10,665,000,000)

(See Note (1) below)


— 68 —

R5.06(3)

R5.06(4)R5.06(5)(a)R5.10


Particulars of

occupancy

Market value in

existing state

assuming full

good title as at

31 August 2013

2. Cont’d According to the information provided by the

Company, the development schemes of the

various plots are summarized as follows:

Use Proposed

gross floor area

(sq m)

Plot A

Residential 225,448.00

Apartment 86,935.00

Office 176,760.00

Hotel 55,311.00

Commercial 13,374.00

Ancillary 3,483.34

Basement 166,817.62

Sub-total : 728,128.96

Plot B


Apartment —

Office —

Hotel —


Ancillary 3,776.00

Basement 116,132.63

Sub-total : 445,995.63

Plot C


Apartment 29,400.00

Office 80,000.00

Hotel —


Ancillary 3,170.00

Basement 113,060.00

Sub-total : 541,110.00

— —


— 69 —

R5.06(4)R5.06(5)(a)R5.10


Particulars of

occupancy

Market value in

existing state

assuming full

good title as at

31 August 2013

2. Cont’dUse Proposed

gross floor area

(sq m)

Plot E


Apartment 102,380.00

Office 35,000.00

Hotel —


Ancillary 1,700.00

Basement 97,344.00

Sub-total : 383,153.60

Overall (Plots A, B, C and E)


Apartment 218,715.00

Office 291,760.00

Hotel 55,311.00


Ancillary 12,129.34

Basement 493,354.25

Total : 2,098,388.19

The land use rights of Plots A and B have been

granted for terms due to expire on 30 May 2081

for residential use and due to expire on 30 May

2051 for commercial use.

We have not been provided with any title

documents relating to the land use rights of

Plots C and E.

— —

Notes:-

(1) Portions of the property, being Plots A and B, have been issued with State-owned Land Use Rights Certificates.

The other portions, being Plots C and E, of the property have been issued with Notifications of Confirmation of

Successful Bid and part of the required land premium and related fees has been paid. However, these plots have

not been issued with any Grant Contracts of Land Use Rights or State-owned Land Use Rights Certificates and


— 70 —

R5.06(4)R5.06(5)(a)R5.10

PN12-5.1

the remaining land premium is yet payable. However, on the assumption that all valid title certificates been issued

to these plots, all land premium and related fees for the grant of the title certificates been fully settled, the market

value of the whole property in existing state as at 31 August 2013 would be RMB11,850,000,000 (90% interest

attributable to the Group: RMB10,665,000,000).

(2) Pursuant to 5 State-owned Land Use Rights Certificates, the land use rights of Plot A of the property, comprising

a total site area of 197,319 sq m, have been vested in 大連新悅置業有限公司 (Dalian Xinyue Properties Co., Ltd.).

The details are as follows:

Certificate No. Plot Site area Use Expiry date

(sq m)

201204035 A1 49,118.90 Residential 30 May 2081



201204048 A4 31,433.10 Commercial 30 May 2051

201204049 A5 36,321.10 Commercial 30 May 2051

Total 197,319.00

Pursuant to 5 State-owned Land Use Rights Certificates, the land use rights of Plot B of the property, comprising

a total site area of 175,903.30 sq m, have been vested in 大連廣宇置業有限公司 (Dalian Guangyu Properties Co.,

Ltd.). The details are as follows:

Certificate No. Plot Site area Use Expiry date

(sq m)

201204037 B1 31,977.60 Residential 30 May 2081



201204047 B4 36,009.50 Commercial 30 May 2051


Total 175,903.30

(3) Pursuant to Grant Contract of Land Use Rights No. 21020112011A010 dated 9 August 2011, the land use rights

of Plot A, in which the property is located thereon, with a site area of approximately 197,319 sq m have been

contracted to be granted to 大連新悅置業有限公司 (Dalian Xinyue Properties Co., Ltd.) at a consideration of

RMB2,246,240,000. Construction should be completed before 29 September 2014.

Pursuant to Grant Contract of Land Use Rights No. 21020112011A009 dated 9 August 2011, the land use rights

of Plot B, in which the property is located thereon, with a site area of approximately 175,903.3 sq m have been

contracted to be granted to 大連廣宇置業有限公司 (Dalian Guangyu Properties Co., Ltd.) at a consideration of

RMB1,972,160,000. Construction should be completed before 29 September 2014.


— 71 —

PN12-5.2(a)

PN12-5.2(b)PN12-16

(4) According to Sales Confirmation of Plot C issued by 大連市國土資源和房產管理局 (Dalian State-owned Land

Resources and Housing Bureau), the site of a parcel of land with a site area of 196,400.00 sq m have been

confirmed to have been successfully tendered to 大連潤峰置業有限公司 (Dalian Runfeng Properties Co., Ltd.) and

大連聖基置業有限公司 (Dalian Shengji Properties Co., Ltd.) at a consideration of RMB2,382,730,000. The details

are as follows:

Plot Use Site area Plot ratio Gross floor area

(sq m) (sq m)

C1 Residential 41,500.00 1.8 74,700.00

C2 Residential 52,800.00 1.8 95,040.00

C3 Residential, Commercial 34,400.00 2.6 89,440.00

C4 Commercial 31,400.00 2.9 91,060.00

C5 Commercial 36,300.00 2.9 105,270.00

Total 196,400.00 2.32 455,510.00

According to Sales Confirmation of Plot E issued by 大連市國土資源和房產管理局 (Dalian State-owned Land

Resources and Housing Bureau), the site of a parcel of land with a site area of 179,000.00 sq m have been

confirmed to have been successfully tendered to 大連永圖置業有限公司 (Dalian Yongtu Properties Co., Ltd.) and

大連至遠置業有限公司 (Dalian Zhiyuan Properties Co., Ltd.) at a consideration of RMB1,983,420,000. The

details are as follows:

Plot Use Site area Plot ratio Gross floor area

(sq m) (sq m)

E1 Residential 32,100.00 1.8 57,780.00

E2 Residential 31,800.00 1.8 57,240.00

E3 Residential, Commercial 29,100.00 2.6 75,660.00

E4 Residential, Commercial 24,800.00 2.6 64,480.00

E5 Commercial 34,400.00 2.4 82,560.00

E6 Commercial 26,800.00 2.4 64,320.00

Total 179,000.00 2.25 402,040.00

(5) According to 3 Planning Permits for Construction Use of Land issued by 大連市規劃局 (Dalian Planning Bureau),

the construction site of three parcels of land with a total site area of 269,300.00 sq m is in compliance with the

urban planning requirements. The details are as follows:

Permit No. Plot Issue date Site area

(sq m)

210211201200012 A1, A2, A3 1 April 2012 129,500.00

210211201200013 B1, B2 1 April 2012 75,600.00

210211201300038 B3, B5 4 July 2013 64,200.00

Total 269,300.00


— 72 —

(6) According to 3 Planning Permits for Construction Works issued by 大連市規劃局 (Dalian Planning Bureau), the

construction works of the property, with a total gross floor area of 669,172.00 sq m, are in compliance with the

construction works requirements and have been approved. The details are as follows:

Permit No. Plot Issue date Gross floor area

(sq m)

210211201200029 A1, A2, A3 30 May 2012 325,946.00

210211201200030 B1, B2 30 May 2012 186,372.00

210211201300043 B3, B5 25 July 2013 156,854.00

Total 669,172.00

(7) According to 8 Permits for Commencement of Construction Works issued by 大連市城鄉建設委員會 (Dalian

Urban and Rural Construction Committee), the construction works of the development are permitted to commence

with a total gross floor area of 664,844.00 sq m with details as follows:-


(sq m)

210200201206290801 A1-1~15 29 June 2012 120,503.00

210200201206292301 A2-1~17 29 June 2012 138,448.00

210200201209182801 A3-1~15 18 September 2012 66,995.00

210200201206290901 B1-1~15 29 June 2012 59,130.00

210200201207062001 B2-1~17 6 July 2012 127,242.00

210200201309021901 B3-1~B3-6, B3-D1,

B3-S2, B3-S3

2 September 2013 58,699.00

210200201309022001 B5-1, 2, 5, 6, 9,

S1~S4, D1

2 September 2013 54,402.96

210200201309022101 B5-3, B5-4, B5-7,

B5-8, B5-D1

2 September 2013 39,424.04

Total 664,844.00

(8) According to 3 Pre-sale Permits, the permitted pre-sale area of portions of the property is 364,815.00 sq m with

details as follows:-


(sq m)

20120053 A1, A2 19 July 2012 190,266.00

20120073 A3 26 September 2012 40,156.00

20120052 B1, B2 19 July 2012 134,393.00

Total 364,815.00

(9) According to the information provided by the Company, the expended construction cost for Phases 1 and 2 of the

property as at 31 August 2013 was approximately RMB1,956,000,000. The estimated total construction cost for

Phases 1 and 2 of the property was approximately RMB3,465,000,000. In the course of our valuation, such costs

have been taken into account.


— 73 —

(10) The market value when completed of Phases 1 and 2 of the property as at 31 August 2013 was approximately

RMB8,860,000,000.

(11) According to Business Licence No. 210200400005173, 大連新悅置業有限公司 (Dalian Xinyue Properties Co.,

Ltd.) was established with a registered capital of USD241,000,000 (equivalent to RMB1,474,920,000) as a limited

company on 16 November 2010.

According to Business Licence No. 210200400005296, 大連廣宇置業有限公司 (Dalian Guangyu Properties Co.,

Ltd.) was established with a registered capital of USD213,200,000 (equivalent to RMB1,304,784,000) as a limited


According to Business Licence No. 210200400005181, 大連潤峰置業有限公司 (Dalian Runfeng Properties Co.,

Ltd.) was established with a registered capital of USD64,650,000 (equivalent to RMB395,658,000) as a limited


According to Business Licence No. 210200400005315, 大連聖基置業有限公司 (Dalian Shengji Properties Co.,



According to Business Licence No. 210200400005165, 大連永圖置業有限公司 (Dalian Yongtu Properties Co.,



According to Business Licence No. 210200400005307, 大連至遠置業有限公司 (Dalian Zhiyuan Properties Co.,



(12) We have been provided with and relied on a legal opinion on the property prepared by the Group’s PRC legal

adviser, which contains, inter alia, the following information:

(i) 大連新悅置業有限公司 (Dalian Xinyue Properties Co., Ltd.) and 大連廣宇置業有限公司 (Dalian Guangyu

Properties Co.,Ltd.) are in possession of the proper legal land use rights of Plots A and B respectively.

(ii) 大連潤峰置業有限公司 (Dalian Runfeng Properties Co., Ltd.), 大連聖基置業有限公司 (Dalian Shengji

Properties Co., Ltd.), 大連永圖置業有限公司 (Dalian Yongtu Properties Co., Ltd.) and 大連至遠置業有限公司 (Dalian Zhiyuan Properties Co., Ltd.) have legally obtained the Notification of Confirmation of

Successful Bid of Plots C and E respectively. The four companies have settled part of the contracted land

grant fees. The legal relationship for the grant of land use rights of Plots C and E is established. The four

companies are identified as the parties to be granted with the respective land use rights of Plots C and E.

On the basis that the project company will lawfully undergo the process of applying for State-owned Land

Use Rights Certificates, Planning Permits for Construction Use of Land, Planning Permits for Construction

Works, Permit for Commencement of Construction Works and Building Ownership Certificate, there will

be no legal impediment in obtaining the ownership of Plots C and E.

(iii) However, the four companies should proceed to sign the Grant Contract of Land Use Rights and settle all

land grant fees. Upon obtaining the State-owned Land Use Rights Certificate, the companies shall be in

possession of the respective proper legal land use rights of Plots C and E.


— 74 —

PN12-7PN12-8.2

(13) The status of title and grant of major approvals and licences in accordance with the information provided to us

by the Group are as follows:

State-owned Land Use Rights Certificate Yes (Plots A and B)

Grant Contract of Land Use Rights Yes (Plots A and B)

Sales Confirmation Yes (Plots C and E)

Planning Permit for Construction Use of Land Yes (Parts of Plots A and B)

Planning Permit for Construction Works Yes (Parts of Plots A and B)

Permit for Commencement of Construction Works Yes (Parts of Plots A and B)

Pre-sale Permit Yes (Parts of Plots A and B)

Business Licence Yes

As advised by the Company, the project companies have obtained the Notification of Confirmation of Successful

Bid of Plots C and E and settled part of the contracted land grant fees. In order to obtain the relevant State-owned

Land Use Rights Certificates, the project companies will have to comply with the following outstanding

procedures, namely settle the balance of the contracted land grant fees, which the Company expects to settle for

Plot E by early 2014 and for Plot C during the first half of 2014, sign the Grant Contracts of Land Use Rights,

apply for planning approvals and Planning Permits for Construction Use of Land, pay deed tax, obtain proof of

deed tax payments and apply for State-owned Land Use Rights Certificates, which the Company expects to do so

at the beginning of 2014. Pursuant to the Company’s schedule, the remaining State-owned Land Use Rights

Certificates and Planning Permits for Construction Use of Land are expected to be obtained in the first half of 2014

whilst the Planning Permits for Construction Works and Permits for Commencement of Construction Works are

planned to be obtained in the second half of 2014.


— 75 —

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 enquires, 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.

2. DISCLOSURE OF INTERESTS

(a) Directors and chief executive

As at the Latest Practicable Date, the interests and short position of each Director and the chief

executive of the Company in the Shares which were required to be notified to the Company and the

Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO, recorded in the register required

to be kept by the Company pursuant to section 352 of the SFO or as otherwise notified to the Company

and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed

Companies in Appendix 10 to the Listing Rules were as follows:

Long position in the Shares and the underlying Shares of equity derivatives of the Company

Name of DirectorNature ofinterest

No. of ordinaryshares held

No. ofunderlying

Sharescomprised inshare options

(Note i)

Restrictedshares

(Note ii)

Percentagein the

Company’sissued share

capital

Mr. Li Ming Founder ofdiscretionary trust

127,951,178(Note iii)

— — 2.149%

Beneficiary oftrust

1,920,680(Note iv)

— — 0.032%

Beneficial owner 3,000,000 10,560,000 2,905,930 0.276%

Mr. Chen Runfu Beneficial owner 454,832 4,320,000 514,268 0.089%

Mr. Wen Haicheng Beneficial owner 121,657 1,730,000 943,058 0.047%

Ms. Liu Hui Beneficial owner 51,000 400,000 69,000 0.009%

Mr. Yang Zheng Beneficial owner — 400,000 60,000 0.008%

Mr. Cheung Vincent Sai Sing Beneficial owner — 400,000 60,000 0.008%

Mr. Tsang Hing Lun Beneficial owner 151,000 800,000 69,000 0.017%

APPENDIX II GENERAL INFORMATION

— 76 —

App1, Part B 2

App1, Part B38(1)(a)/(b)/(c)

Name of DirectorNature ofinterest

No. of ordinaryshares held

No. ofunderlying

Sharescomprised inshare options

(Note i)

Restrictedshares

(Note ii)

Percentagein the

Company’sissued share

capital

Mr. Gu Yunchang Beneficial owner 151,000 800,000 69,000 0.017%

Mr. Han Xiaojing Beneficial owner 151,000 800,000 69,000 0.017%

Mr. Zhao Kang Beneficial owner 151,000 800,000 69,000 0.017%

Notes:

i. The share options were granted pursuant to the share option scheme of the Company.

ii. The restricted shares were granted pursuant to the restricted share award scheme of the Company.

iii. The 127,951,178 Shares were held by a discretionary trust of which Mr. Li Ming is the founder.

iv. The 1,920,680 Shares were held by a discretionary trust of which Mr. Li Ming, his spouse and his son are the

beneficiaries.

Long positions in the shares and the underlying shares of equity derivatives of associated

corporation(s)

Name of DirectorName of associatedcorporation

Nature ofinterest

No. ofordinary shares

of associatedcorporation

held

No. ofunderlying

shares ofassociated

corporationcomprised inshare options

Approximatepercentage of

total issuedshare capital of

associatedcorporation

Mr. LI Ming Gemini Investments

(Holdings) Limited

Beneficial

owner

— 4,000,000 0.898%

Mr. WEN Haicheng Gemini Investments

(Holdings) Limited

Beneficial

owner

70,000 — 0.016%

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief

executive and any other person had any long or short positions in the Shares, underlying Shares or

debentures of the Company or any of its associated corporations (defined in the SFO) as recorded in

the register required to be kept under section 352 of the SFO.


— 77 —

(b) Substantial Shareholders

As at the Latest Practicable Date, so far as was known to the Directors or the chief executive,

persons having interests and short positions in 5% or more in the Shares, underlying Shares and

debentures of the Company which would fall to be disclosed to the Company under the provisions of

Divisions 2 and 3 of Part XV of the SFO, and required to be recorded in the register of interests and

short positions required to be kept by the Company pursuant to section 336 of the SFO were as

follows:

Name of Shareholder CapacityLong/shortposition

Number ofShares held Percentage

China Life Group (Note i) Interest of controlled

corporation

Long 1,477,595,944 24.81%

Chen Din Hwa (deceased)

(Note ii)

Interest of controlled

corporation/Family interest

Long 840,158,610 14.11%

HSBC Trustee (Guernsey)

Limited (Note iii)

Interest of controlled

corporation

Long 411,284,187 6.91%

Notes:

i. The 1,477,595,944 Shares were registered in the name of, and beneficially owned by, China Life. China Life Group was

interested in 68.37% of China Life.

ii. Mr. Chen Din Hwa (deceased) held a long position in 840,158,610 Shares comprising 707,147,893 Shares and

133,010,717 Shares were beneficially owned by Spring Glory and Gavast Estates Limited respectively. Both Spring

Glory and Gavast Estates Limited were wholly-owned by Keymark Associates Limited. Keymark Associates Limited was

wholly-owned by Golden Anchor Holdings Limited. Golden Anchor Holdings Limited was wholly-owned by Nan Fung

Group Holdings Limited. Nan Fung Group Holdings Limited was wholly-owned by Nan Fung International Holdings

Limited. Nan Fung International Holdings Limited was wholly-owned by Chen’s Group International Limited, which in

turn was wholly-owned by the estate of Mr. Chen Din Hwa (deceased).

iii. The 362,411,187 Shares and 48,873,000 Shares were registered in the name of, and beneficially owned by Crystal Will

Holdings Limited and Grand Wave Enterprises Limited respectively. Crystal Will Holdings Limited was wholly-owned

by Wharf China Development Limited. Wharf China Development Limited was wholly-owned by Wharf China Holdings

Limited. Wharf China Holdings Limited was wholly-owned by The Wharf (Holdings) Limited. Grand Wave Enterprises

Limited was wholly-owned by Smart Bridge Investments Limited. Smart Bridge Investments Limited was wholly-owned

by Wharf Hong Kong Limited. Wharf Hong Kong Limited was wholly-owned by The Wharf (Holdings) Limited. WF

Investment Partners Limited was interested in 42.98% of The Wharf (Holdings) Limited. WF Investment Partners

Limited was wholly-owned by Wheelock Investments Limited. Wheelock Investments Limited was wholly-owned by

Wheelock and Company Limited. HSBC Trustee (Guernsey) Limited was interested in 48.98% of Wheelock and

Company Limited. HSBC Trustee (Guernsey) Limited was deemed to be interested in these shares by virtue of the SFO.


— 78 —

App1, Part B 34

3. DIRECTORS’ INTERESTS IN ASSETS OF THE GROUP

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any

assets which had been, since 31 December 2012, being the latest published audited accounts of the

Company were made up, acquired or disposed of by or leased to any member of the Group, or are

proposed to be acquired or disposed of by or leased to any member of the Group.

4. DIRECTORS’ INTERESTS IN CONTRACTS OF THE GROUP

As at the Latest Practicable Date, none of the Directors was materially interested in any contract

or arrangement subsisting as at the date of this circular and which is significant in relation to the

business of the Group.

5. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors or their respective associates had any

business or interest in a business which competes or is likely to compete, either directly or indirectly,

with the business of the Group.

6. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors has entered or proposed to enter into a

service contract with any member of the Group which will not expire or is not determinable by the

employer within one year without payment of compensation (other than statutory compensation).

7. LITIGATION

As at the Latest Practicable Date, neither the Company nor any member of the Group was

engaged in any litigation or arbitration of material importance and no litigation or claim of material

importance was known to the Directors to be pending or threatened by or against the Company or any

member of the Group.

8. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change

in the financial or trading position of the Group since 31 December 2012, being the date of the latest

published audited financial statements of the Company.


— 79 —

App1, Part B40(1)/(2)

LR14A.59(11)

App1, Part B 39

App1, Part B 32

9. EXPERTS

The following are the qualifications of the experts who have given opinion or advice which are

contained in this circular:

Name Qualifications

Anglo Chinese A corporation licensed to carry out Type 1 (dealing in

securities), Type 4 (advising on securities), Type 6 (advising

on corporate finance) and Type 9 (asset management)

regulated activities under the SFO

DTZ Property valuer

Grandall Law Firm (Beijing) PRC legal adviser to the Company

Each of Anglo Chinese, DTZ and Grandall Law Firm (Beijing) have given and has not withdrawn

its written consent to the issue of this circular with the inclusion herein of its letter or its name in the

form and context in which they respectively appear.

As at the Latest Practicable Date, each of Anglo Chinese, DTZ and Grandall Law Firm (Beijing)

did not have any shareholding in any member of the Group or the right (whether legally enforceable

or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

As at the Latest Practicable Date, each of Anglo Chinese, DTZ and Grandall Law Firm (Beijing)

did not have any direct or indirect interests in any assets which have been, since 31 December 2012

(the date to which the latest published audited financial statements of the Company were made up),

acquired or disposed of by or leased to any member of the Group, or which are proposed to be acquired

or disposed of by or leased to any member of the Group.

10. MISCELLANEOUS

(a) The registered office of the Company is at Suite 601, One Pacific Place, 88 Queensway,

Hong Kong. The principal place of business of the Company is 31-33 Floor, Tower A,

Ocean International Center, 56 Dongsihuanzhonglu, Chaoyang District, Beijing, the PRC.

(b) The company secretary of the Company is Mr. Sum Pui Ying, who is a fellow member of

the Hong Kong Institute of Certified Public Accountant and the Chartered Association of

Certified Accountants.

(c) The Company’s share registrar and transfer office is Computershare Hong Kong Investor

Services Limited, which is situated at Shops 1712-1716, 17th Floor, Hopewell Centre, 183

Queen’s Road East, Wanchai, Hong Kong.

(d) The English version of this circular shall prevail over the Chinese version in case of any

discrepancy.


— 80 —

App1, Part B5(1)/(2)/(3)

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the registered office of the

Company at Suite 601, One Pacific Place, 88 Queensway, Hong Kong during normal business hours

of the Company on any business day, from the date of this circular up to and including the date of the

EGM:

(a) the Subscription Agreements;

(b) the Master Acquisition Agreement;

(c) the letter from the Independent Board Committee, the text of which is set out under the

section headed “Letter from the Independent Board Committee” of this circular;

(d) the letter from Anglo Chinese, the Independent Financial Adviser, the text of which is set

out under the section headed “Letter from the Independent Financial Adviser” of this

circular;

(e) the property valuation report issued by DTZ, the text of which is set out in Appendix I to

this circular; and

(f) the consent letters from Anglo Chinese, DTZ and Grandall Law Firm (Beijing) referred to

in the paragraph headed “Experts” in this appendix.


— 81 —

App1, Part B 43(2)(a)/(c)

(Stock Code: 03377)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the “Meeting”) of

Sino-Ocean Land Holdings Limited (the “Company”) will be held at Salon Room VI, 3/F, JW Marriott

Hotel, Pacific Place, 88 Queensway, Hong Kong on Tuesday, 19 November 2013 at 10:00 a.m. for the

purpose of considering and, if thought fit, passing with or without modifications or amendments, the

following resolutions as ordinary resolutions of the Company to be taken by way of poll:

ORDINARY RESOLUTIONS

1. “THAT

(a) the subscription agreement dated 27 September 2013 (the “China Life SubscriptionAgreement”) and entered into between the Company and China Life Insurance Company

Limited (中國人壽保險股份有限公司) (“China Life”) in connection with the subscription

of 635,941,967 shares of HK$0.80 each in the issued share capital of the Company (the

“China Life Subscription Shares”) (a copy of which has been produced at the Meeting

marked “A” and signed by the chairman of the Meeting for the purpose of identification)

and the transactions contemplated thereunder be and are hereby approved, confirmed and

ratified in all respects;

(b) any one director of the Company (“Director”) be and is hereby authorized to do such acts

and things, to sign and execute such other documents and to take such steps as he in his

discretion consider necessary, appropriate, desirable or expedient to carry out or give effect

to or otherwise in connection with or in relation to the China Life Subscription Agreement

and the transactions contemplated thereunder; and

(c) the board of Directors be and is hereby authorized to allot and issue the China Life

Subscription Shares upon and subject to the terms and conditions of the China Life

Subscription Agreement.”

2. “THAT

(a) the subscription agreement dated 27 September 2013 (the “Nan Fung SubscriptionAgreement”) and entered into between the Company and Spring Glory Investment Limited

NOTICE OF EGM

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(“Nan Fung”) in connection with the subscription of 686,611,211 shares of HK$0.80 each

in the issued share capital of the Company (the “Nan Fung Subscription Shares”) (a copy

of which has been produced at the Meeting marked “B” and signed by the chairman of the

Meeting for the purpose of identification) and the transactions contemplated thereunder be

and are hereby approved, confirmed and ratified in all respects;

(b) any one Director be and is hereby authorized to do such acts and things, to sign and execute

such other documents and to take such steps as he in his discretion consider necessary,

appropriate, desirable or expedient to carry out or give effect to or otherwise in connection

with or in relation to the Nan Fung Subscription Agreement and the transactions

contemplated thereunder; and

(c) the board of Directors be and is hereby authorized to allot and issue the Nan Fung

Subscription Shares upon and subject to the terms and conditions of the Nan Fung

Subscription Agreement.”

3. “THAT

(a) the master acquisition agreement dated 27 September 2013 (the “Master Acquisition

Agreement”) and entered into between Fame Gain Holdings Limited and Nan Fung

Investment China Holdings Limited in connection with the proposed transfer of a 20%

interests in a commercial property development project located on the land with a site area

of approximately 11,000 square metres located at Plot Z6, Guanghua Road, Chaoyang

District, Beijing, the PRC and an approximately 10% interests in a residential property

development project located on the land with a site area of approximately 749,000 square

metres located at Plots A, B, C and E, Ocean Diamond Bay, East of Gongxing Street and

Dongbei Road, South of Dongfang Road, Ganjingzi District, Dalian, Liaoning Province, the

PRC (a copy of which has been produced at the Meeting marked “C” and signed by the

chairman of the Meeting for the purpose of identification) and the transactions

contemplated thereunder be and are hereby approved, confirmed and ratified in all respects;

and

(b) any one Director be and is hereby authorized to do such acts and things, to sign and execute

such other documents and to take such steps as he in his discretion consider necessary,

appropriate, desirable or expedient to carry out or give effect to or otherwise in connection

with or in relation to the Master Acquisition Agreement and the transactions contemplated

thereunder.”

By order of the Board

Sino-Ocean Land Holdings LimitedLi Ming

Chairman

Hong Kong, 28 October 2013

NOTICE OF EGM

— 83 —

Registered Office:

Suite 601, One Pacific Place

88 Queensway

Hong Kong

Notes:

1. A member entitled to attend and vote at the Meeting may appoint one or more proxies to attend

and, on a poll, to vote in his stead. A proxy need not be a member of the Company but must be

present in person to represent the member.

2. The instrument appointing a proxy shall be in writing under hand of the appointer or of his/her

attorney duly authorized in writing or, if the appointer is a corporation, either under its common

seal or under the hand of an officer, attorney or other person authorized to sign the same.

3. In the case of joint holders of any share, any one of such holders may vote at the Meeting, either

personally or by proxy, in respect of such share as if he were solely entitled thereto. However,

if more than one of such joint holders is present at the Meeting, personally or by proxy, the vote

of the joint holder whose name stands first in the register of members of the Company and who

tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of

the other joint holder(s).

4. In order to be valid, the form of proxy duly completed and signed in accordance with the

instructions printed on it together with the power of attorney or other authority, if any, under

which it is signed, or a notarially certified copy of it must be deposited at the office of the

Company’s share registrar, Computershare Hong Kong Investor Services Limited at 17M Floor,

Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any

event not less than 48 hours before the time appointed for holding of the Meeting or any

adjournment thereof.

5. Completion and return of the form of proxy will not preclude members from attending and voting

in person at the Meeting or at any adjournment thereof (as the case may be) if the members so

wish.

6. The register of members of the Company will be closed from Friday, 15 November 2013 to

Tuesday, 19 November 2013 (both days inclusive), during which period no transfer of shares will

be registered. In order to be entitled to attend the Meeting, all transfer documents together with

relevant share certificates must be lodged with the Company’s share registrar, Computershare

Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183

Queen’s Road East, Wanchai, Hong Kong, for registration not later than 4:30 p.m. on Thursday,

14 November 2013.

7. As at the date hereof, the board of Directors of the Company comprises three executive

Directors, namely, Mr. Li Ming, Mr. Chen Runfu and Mr. Wei Haicheng; three non-executive

Directors, namely, Ms. Liu Hui, Mr. Yang Zheng and Mr. Cheung Vincent Sai Sing; and four

independent non-executive Directors, namely, Mr. Tsang Hing Lun, Mr. Gu Yunchang, Mr. Han

Xiaojing and Mr. Zhao Kang.

NOTICE OF EGM

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sino-ocean land (perpetual finance) limited · 2013. 10. 28. · generally are open for business in...

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