C&D INTERNATIONAL INVESTMENT GROUP LIMITED

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUEST YOUR IMMEDIATE ATTENTION 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 licensed securities dealer, bank manager, solicitor, professional accountant or other professional advisers. If you have sold or transferred all your shares in C&D International Investment Group Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser(s) or the transferee(s) or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s). Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular. C&D INTERNATIONAL INVESTMENT GROUP LIMITED (incorporated in the Cayman Islands with limited liability) (Stock Code: 1908) MAJOR TRANSACTION (I) ACQUISITION OF LAND USE RIGHTS IN XIAMEN, THE PRC; AND (II) JOINT VENTURE ARRANGEMENT IN RESPECT OF ACQUISITION OF LAND USE RIGHTS IN XIAMEN, THE PRC 25 July 2018

2 CONTENTS Page DEFINITIONS... 1 LETTER FROM THE BOARD... 4 APPENDIX I FINANCIAL INFORMATION OF THE GROUP APPENDIX II GENERAL INFORMATION i

3 DEFINITIONS In this circular, unless the context otherwise defined, the following expressions have the following meanings: associate Board Chengyi Land Company Confirmation Letter connected person(s) controlling shareholder Cooperation Agreement A Cooperation Agreement B has the meaning ascribed to it under the Listing Rules the board of Directors a piece of land located at Jimei New City ( ), Jimei District, Xiamen, Fujian Province, the PRC (Land Plot no.2018jp01), which is situated at the northeast side of the intersection of planned Chengyi Road West ( ) and planned Chengyi Road North ( ), with a total site area of approximately 30,534.5 sq.m. C&D International Investment Group Limited ( ), a company incorporated in the Cayman Islands with limited liability and the shares of which are listed on the Main Board of the Stock Exchange the auction confirmation letter ( ) entered into between Zhaoqilong and the Xiamen Land Bureau on 25 April 2018 as a result of successfully winning the bid for the auction has the meaning ascribed to it under the Listing Rules has the meaning ascribed to it under the Listing Rules the cooperation agreement dated 4 July 2018 entered into among Yi Yue, Zhaoqilong and Wuhan Real Estate regarding, among other things, the formation of the Joint Venture A the cooperation agreement dated 4 July 2018 entered into among Yi Yue, Zhaoyuelong and Wuhan Real Estate regarding, among other things, the formation of the Joint Venture B Cooperation Agreements means the Cooperation Agreement A and Cooperation Agreement B Directors Group HK$ Hong Kong the directors of the Company the Company and its subsidiaries Hong Kong Dollars, the lawful currency of Hong Kong the Hong Kong Special Administrative Region of the PRC 1

4 DEFINITIONS Joint Venture A Joint Venture B Land Acquisition Lands Land Use Rights Grant Contract Latest Practicable Date Listing Rules PRC RMB SFO Shareholders Share(s) sq.m. Stock Exchange Wuhan Real Estate Xiamen Land Bureau a joint venture to be established under the laws of the PRC under the Cooperation Agreement A a joint venture to be established under the laws of the PRC under the Cooperation Agreement B the acquisition of land use rights of the Lands through public bidding process at the auction means the Chengyi Land and the Xingjin Land the State-owned Land Use Rights Grant Contract ( ) to be entered into between Zhaoqilong and the Xiamen Land Bureau on 7 May 2018 regarding the acquisition of the Chengyi Land 23 July 2018, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained therein the Rules Governing the Listing of Securities on the Stock Exchange The People s Republic of China, which for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region and Taiwan Renminbi, the lawful currency of the PRC Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended from time to time holders of the Shares the ordinary share(s) of HK$0.1 each of the Company square metre(s) The Stock Exchange of Hong Kong Limited Wuhan Real Estate Holding Company Limited* ( ), a company established in the PRC with limited liability Xiamen Municipal Bureau of Land Resources and Property Management* ( ) 2

5 DEFINITIONS Xingjin Land Yi Yue a piece of land located at Jimei New City* ( ), Jimei District, Xiamen, Fujian Province, the PRC (Land Plot no.2017jp03), which is situated at the northeast side of the intersection of Xingjin Road ( ) and Haixiang Avenue ( ), with a total site area of approximately 20,176 sq.m. Xiamen Yi Yue Property Company Limited* ( ), a company established in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company Zhaoqilong Xiamen Zhaoqilong Property Development Company Limited* ( ), a company established in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company Zhaoyuelong Xiamen Zhaoyuelong Property Development Company Limited* ( ), a company established in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company % per cent * For identification purpose only. The English names are only translations of the official Chinese names. In case of inconsistency, the Chinese names prevail. 3

6 LETTER FROM THE BOARD C&D INTERNATIONAL INVESTMENT GROUP LIMITED (incorporated in the Cayman Islands with limited liability) (Stock Code: 1908) Executive Directors: Mr. Zhuang Yuekai ( ) (Chairman) Mr. Shi Zhen ( ) Ms. Zhao Chengmin ( ) Non-executive Directors: Ms. Wang Xianrong ( ) Ms. Wu Xiaomin ( ) Mr. Huang Wenzhou ( ) Independent non-executive Directors: Mr. Wong Chi Wai ( ) Mr. Wong Tat Yan, Paul ( ) Mr. Chan Chun Yee ( ) Registered office: P.O. Box 10008, Willow House, Cricket Square, Grand Cayman, KY Cayman Islands Head office and principal place of business in Hong Kong: Office No. 3517, 35th Floor Wu Chung House 213 Queen s Road East Wanchai, Hong Kong 25 July 2018 To the Shareholders Dear Sir or Madam, MAJOR TRANSACTION (I)ACQUISITION OF LAND USE RIGHTS IN XIAMEN, THE PRC; AND (II) JOINT VENTURE ARRANGEMENT IN RESPECT OF ACQUISITION OF LAND USE RIGHTS IN XIAMEN, THE PRC INTRODUCTION Reference is made to the announcements of the Company dated 25 April 2018 and 4 July 2018, respectively. The purpose of this circular is to provide the Shareholders with further information on the acquisition of the Lands and the joint venture arrangement in respect of the Land Acquisition. 4

7 LETTER FROM THE BOARD ACQUISITION OF LAND USE RIGHTS The Board is pleased to announce that Zhaoqilong, an indirectly wholly-owned subsidiary of the Company, entered into a Confirmation Letter with the Xiamen Land Bureau on 25 April 2018 to confirm that Zhaoqilong has successfully won the bid for the auction for the land use rights of the Chengyi Land which is located at Jimei New City ( ), Jimei District, Xiamen, Fujian Province, the PRC (Land Plot no. 2018JP01) for a total consideration of RMB2,392,000,000. As a result of the successfully winning the bid for the auction, the Land Use Rights Grant Contract was entered into on 7 May Major terms of the Confirmation Letter are set out as follows: Date 25 April 2018 Parties 1. Zhaoqilong 2. Xiamen Land Bureau, a local PRC government authority, which is in charge of, among other things, the sale of land use rights of lands in Xiamen Municipal, Fujian Province, the PRC. To the best of the Directors knowledge, information and belief, having made all reasonable enquiries, Xiamen Land Bureau and its ultimate beneficial owner(s) are third parties independent of and not connected with the Company and its connected person(s) (as defined in the Listing Rules). Consideration Zhaoqilong has won the bid for the auction for the land use rights of the Chengyi Land for a total consideration of RMB 2,392,000,000. As at the Latest Practicable Date, Zhaoqilong has paid in full the consideration for the Chengyi Land of RMB2,392,000,000. In determining the bid price, the Directors have taken into account of the minimum bid price, estimated profitability of the project, location of the Chengyi Land and the land price in the surrounding area. In view of: (i) the consideration of the Chengyi Land of RMB2,392,000,000 is below the ceiling price set by the Xiamen Land Bureau; (ii) the average selling price of the three residential properties located in the same area of Xiamen (Jimei New City) is above approximately RMB36,000 per sq.m., certain profit is expected from the development of the Chengyi Land; and (iii) the floor area price of the Chengyi Land is approximately RMB28,000 per sq.m., close to the average floor area price of five pieces of land auctioned in the same district since 2016, the Directors confirm that the consideration for the Chengyi Land is fair and reasonable and in the interests of the Company and the Shareholders as a whole. The Company did not take any independent valuation as reference for setting the auction bid price. 5

8 LETTER FROM THE BOARD The Group expected that it will finance the payment for the acquisition of the Chengyi Land by the shareholder s borrowing available to the Group. The public auction is subject to the relevant PRC laws and regulations. Source of funding for the acquisition of the Chengyi Land The Group expected that it will finance the payment for the acquisition of the Chengyi Land by the shareholder s borrowing available to the Group. Borrowings from controlling shareholder, being a financial assistance received by the Group from a connected person, constitute a connected transaction under Chapter 14A of the Listing Rules. As such, borrowings from controlling shareholder (i) will be conducted on normal commercial terms or better; and (ii) will not be secured by the assets of the Group, such borrowings from controlling shareholder will be fully exempted from shareholders approval, annual review and all disclosure requirements pursuant to Rule 14A.90 of the Listing Rules. The Directors, after due and careful enquiry, are of the opinion that, taking into account that (i) the cost of such borrowings from controlling shareholder is more advantageous than that of any other external financing; (ii) utilising the borrowings from controlling shareholder in the acquisition of the Chengyi Land allows flexibility for the Company to utilize internal resources of the Company for other business purpose; and (iii) since the prospect of the Chengyi Land is promising, the estimated return for the project is expected to be more than paying the financing cost of borrowings from the controlling shareholder, the use of the borrowing from controlling shareholder is proper and beneficial. Therefore, the Company considered that the use of borrowings from controlling shareholder as the source of funding is in the best interest of the Company and the Shareholders as a whole. Information about the Chengyi Land The Chengyi Land is located at Jimei New City ( ), Jimei District, Xiamen, Fujian Province, the PRC (Land Plot no.2018jp01). The Chengyi Land is situated at the northeast side of the intersection of planned Chengyi West Road ( ) and planned Chengyi North Road ( ), with convenient transportation and complete facilities planned around of better development potential. The total site area of the Chengyi Land is approximately 30,534.5 sq.m. and an estimated gross floor area of not exceeding approximately 85,500 sq.m. for residential use urban residential use (ordinary residential) and commercial and service use retail commercial use (commercial, fresh convenience store). The terms of the land use rights of the Chengyi Land are 70 years for residential use, 40 years for commercial use and 40 years for fresh convenience store use, respectively. Development plan of the Chengyi Land The Group anticipated the project would be developed in one phase. The construction will start in or before August The pre-sale will start in or before February 2019 and the completion is estimated to be before September The actual development plan may be adjusted to accommodate future market conditions. The Group intends to build residential high rises with shops on the lower level floor and townhouses. The estimated gross floor areas of residential high-rises, commercial units, and townhouses are approximately 79,700 sq.m., 700 sq.m., and 4,100 sq.m., respectively. The above are subject to possible adjustments under actual market conditions in the future. The remaining 6

9 LETTER FROM THE BOARD area is for public facilities (fire services, facilities, property management, etc.). Depending on the prevailing market conditions, the target selling price of residential unit is estimated to be approximately RMB43,000 per sq.m., and the target selling prices of commercial units and townhouses are estimated to be approximately RMB25,000 per sq.m. and RMB50,000 per sq.m., respectively. The target customers of the project are people with rigid demands or aiming for improvement. The Group will, in accordance with the practical market conditions, make adjustment to the actual arrangements of construction, sales schedule and selling prices. The expected development costs for the project is approximately RMB 663,680,000 (including estimated preliminary development, design and survey, and development expenses, subject to adjustments for actual disbursement). The expected development costs for each of the commercial units, townhouses and residential units are approximately RMB6,000 per sq.m., RMB7,500 per sq.m. and RMB5,600 per sq.m., respectively. The above mentioned estimation is arrived based on the experience of the Group in developing similar property projects, the details of which are as follows: Commercial units (RMB per sq.m., approximately) Unit Cost Townhouses (RMB per sq.m., approximately) Residential high rises (RMB per sq.m., approximately) Preliminary expenses Construction 3,500 5,000 3,100 Refined decoration 2,000 2,000 2,000 Utilities installation Total 6,000 7,500 5,600 The actual development costs might vary due to possible changes in material costs, taxation, policies etc. The future capital commitment for developing the Chengyi Land will be financed by bank borrowings for property development ( ). Financial effect of the acquisition of the Chengyi Land Immediately upon completion of the acquisition of the Chengyi Land and assuming RMB2,392,000,000 of the consideration is to be satisfied by loan from the controlling shareholder, the financial effects upon the Group are: (i) an increase of asset from the Chengyi Land amounting to RMB2,392,000,000; (ii) an increase in liabilities (representing the loan from the controlling shareholder) of RMB2,392,000,000; and (iii) an insignificant effect on the earnings of the Group. Reasons for the acquisition of the Chengyi Land The Group is principally engaged in the real estate development, real estate industry chain investment services and investment in emerging industries in the PRC and the acquisition of the Chengyi Land is conducted in the ordinary and usual course of business of the Group. The Chengyi Land is intended to be developed as a residential and commercial project. In view that: (i) the Chengyi Land is of great development potential with convenient transportation and complete facilities planned 7

10 LETTER FROM THE BOARD around; (ii) the Chengyi Land is in Xiamen, where the headquarter of the Company in the PRC locates, enabling convenient access to the relevant support of resources and brand; and (iii) the acquisition of the Chengyi Land will expand the land reserve of the Group, enhancing its sustainability for future development, the Board believes that the acquisition of the Chengyi Land provides a good investment opportunity and allows the Group to strengthen its position in the property market of Xiamen, the PRC. The Board confirms that the acquisition of the Chengyi Land is in the ordinary and usual course of business of the Company and on normal commercial terms which is fair and reasonable and in the interests of the Company and the Shareholders as a whole. JOINT VENTURE ARRANGEMENT IN RESPECT OF THE LAND ACQUISITION Reference is made to the announcement of the Company dated 25 April 2018, in which Zhaoqilong, an indirect wholly-owned subsidiary of the Company, has successfully won the bid for the auction for the land use rights of the Chengyi Land for a total consideration of RMB2,392,000,000. The total consideration of the Chengyi Land has been settled by Zhaoqilong as at the date of this announcement. Reference is also made to the announcement of the Company dated 15 September 2017, in which Zhaoyuelong, an indirect wholly-owned subsidiary of the Company, has successfully won the bid for the auction for the land use rights of the Xingjin Land for a total consideration of RMB1,722,000,000. The total consideration of the Xingjin Land has been settled by Zhaoyuelong as at the date of this announcement. The Board is pleased to announce that on 4 July 2018:- (a) Yi Yue, Zhaoqilong and Wuhan Real Estate entered into the Cooperation Agreement A, pursuant to which, among other things, Yi Yue and Wuhan Real Estate agreed to form the Joint Venture A for the acquisition of the land use rights of the Chengyi Land, in which Yi Yue and Wuhan Real Estate shall own 51% and 49% equity interests in the Joint Venture A, respectively; and (b) Yi Yue, Zhaoyuelong and Wuhan Real Estate entered into the Cooperation Agreement B, pursuant to which, among other things, Yi Yue and Wuhan Real Estate agreed to form the Joint Venture B for the acquisition of the land use rights of the Xingjin Land, in which Yi Yue and Wuhan Real Estate shall own 49% and 51% equity interests in the Joint Venture B, respectively. The Cooperation Agreement A Date 4 July 2018 Parties (a) (b) Yi Yue, an indirect wholly-owned subsidiary of the Company Zhaoqilong, an indirect wholly-owned subsidiary of the Company 8

11 LETTER FROM THE BOARD (c) Wuhan Real Estate Save as to that Wuhan Real Estate owned 70.26% equity interests in Wuhan Chengkai Real Estate Development Company Limited, which owned 51% equity interests of Wuhan Zhaoyuecheng Real Estate Development Company Limited, an associate of the Company, to the best of the Directors knowledge, information and belief, having made all reasonable enquiries, Wuhan Real Estate and its ultimate beneficial owner(s) are third parties independent of and not connected with the Company and its connected person(s). Setting up and capital contribution of the Joint Venture A Within 15 business days upon signing of the Cooperation Agreement A, Yi Yue shall be responsible for setting up the Joint Venture A. Upon the establishment of the Joint Venture A, the initial registered capital of the Joint Venture A shall be RMB2,300,000,000. Yi Yue and Wuhan Real Estate shall contribute RMB1,173,000,000 and RMB1,127,000,000, respectively, according to their respective proportion in the equity interests of the Joint Venture A. The registered capital of the Joint Venture A shall be used as fund to be provided by the Joint Venture A to Zhaoqilong for its repayment of the shareholder s loan previously advanced by Yi Yue for the acquisition of the Chengyi Land by Zhaoqilong. Acquisition of Zhaoqilong by the Joint Venture A Upon the establishment of the Joint Venture A and Yi Yue obtaining relevant regulatory approval regarding the transfer of the entire equity interests of Zhaoqilong, Yi Yue shall transfer 100% equity interests in Zhaoqilong to the Joint Venture A at the consideration which will be determined with reference to the valuation to be conducted by an independent third party valuer to be engaged by the consent of the parties. Shareholders loan to the Joint Venture A by Wuhan Real Estate In addition to the capital contribution, Wuhan Real Estate shall provide shareholder s loan to the Joint Venture A in accordance with the proportion of its equity interests in the Joint Venture A. Such shareholder s loan will be used as the capital contribution to Zhaoqilong by the Joint Venture A and fund to be provided to Zhaoqilong by the Joint Venture A for its repayment of the shareholder s loan previously advanced by Yi Yue to Zhaoqilong for the acquisition of the Chengyi Land. The parties to the Cooperation Agreement A agreed that the subsequent development of the Joint Venture A and/or Zhaoqilong should be preferentially self-financed. The amount of capital commitment payable by Yi Yue in the total sum of approximately RMB1,219,920,000 (51% of the total consideration of the Chengyi Land) was determined after arm s length negotiation among the parties to the Cooperation Agreement A with reference to the consideration of the Chengyi Land. Capital commitment payable by Yi Yue will be funded by borrowing from the controlling shareholder of the Company. 9

12 LETTER FROM THE BOARD Board composition Each of the board of directors of the Joint Venture A and Zhaoqilong will be comprised of five directors, three of whom will be appointed by Yi Yue and two of whom will be appointed by Wuhan Real Estate, respectively. Supervisor The Joint Venture A will not maintain a board of supervisors but instead will have two supervisors, each of whom will be appointed by Yi Yue and Wuhan Real Estate respectively. Zhaoqilong will not maintain a board of supervisors but instead will have two supervisors, each of whom will be appointed by Yi Yue and Wuhan Real Estate respectively. Shareholders voting mechanism At each of the shareholders meetings of the Joint Venture A and Zhaoqilong, specific matters under situation as described in the Cooperation Agreement A must be passed by 100% of the votes cast by the shareholders of the Joint Venture A and Zhaoqilong, respectively. Condition precedent The Cooperation Agreement A will be conditional upon the parties to the Cooperation Agreement A obtaining relevant approval from the relevant authorities. The Cooperation Agreement B Date 4 July 2018 Parties (a) (b) (c) Yi Yue, an indirect wholly-owned subsidiary of the Company Zhaoyuelong, an indirect wholly-owned subsidiary of the Company Wuhan Real Estate Setting up and capital contribution of the Joint Venture B Within 15 business days upon signing of the Cooperation Agreement B, Yi Yue shall be responsible for setting up the Joint Venture B. Upon the establishment of the Joint Venture B, the initial registered capital of the Joint Venture B shall be RMB10,000,000. Wuhan Real Estate and Yi Yue shall contribute RMB4,900,000 and RMB5,100,000, respectively. The amount of the capital commitment payable by Yi Yue (RMB5,100,000) was determined after arm s length negotiation among 10

13 LETTER FROM THE BOARD the parties to the Cooperation Agreement B. The capital contribution of the Joint Venture B by Yi Yue (RMB5,100,000) is only (i) part of the total capital contribution of Joint Venture B by Yi Yue (RMB843,780,000) and (ii) one of the steps (the setting up of the Joint Venture B) in the joint development of the Xingjin Land between Yi Yue and Wuhan Real Estate. Acquisition of Zhaoyuelong by the Joint Venture B Upon the establishment of the Joint Venture B and Yi Yue obtaining relevant regulatory approval regarding the transfer of the entire equity interests of Zhaoyuelong, Yi Yue shall transfer 100% equity interests in Zhaoyuelong to the Joint Venture B at the consideration which will be determined with reference to the valuation to be conducted by an independent third party valuer to be engaged by the consent of the parties. Capital increase of the Joint Venture B Within 10 business days upon the completion of the abovementioned equity transfer of Zhaoyuelong, the registered capital of the Joint Venture B shall be increased to RMB500,000,000, where Yi Yue and Wuhan Real Estate agreed to further contribute RMB239,900,000 and RMB250,100,000, respectively. Upon completion of the capital increase, Yi Yue and Wuhan Real Estate shall own 49% and 51% equity interests of the Joint Venture B, respectively. The registered capital of the Joint Venture B shall be used as fund to be provided by the Joint Venture B to Zhaoyuelong for its repayment of the shareholder s loan previously advanced by Yi Yue for the acquisition of the Xingjin Land by Zhaoyuelong. Shareholders loan to the Joint Venture B by Wuhan Real Estate In addition to the capital contribution, Wuhan Real Estate shall provide shareholder s loan to the Joint Venture B in accordance with the proportion of its equity interests in the Joint Venture B. Such shareholder s loan will be used as the capital contribution to Zhaoyuelong by the Joint Venture B and fund to be provided to Zhaoyuelong by the Joint Venture B for its repayment of the shareholder s loan previously advanced by Yi Yue to Zhaoyuelong for the acquisition of the Xingjin Land. The parties to the Cooperation Agreement B agreed that the subsequent development of the Joint Venture B and/or Zhaoyuelong should be preferentially self-financed. The amount of capital commitment payable by Yi Yue in the total sum of approximately RMB843,780,000 (49% of the total consideration of the Xingjin Land) was determined after arm s length negotiation among the parties to the Cooperation Agreement B with reference to the consideration of the Xingjin Land. Capital commitment payable by Yi Yue will be funded by borrowing from the controlling shareholder of the Company. Board composition Upon completion of capital increase of the Joint Venture B, each of the board of directors of the Joint Venture B and Zhaoyuelong will be comprised of five directors, two of whom will be appointed by Yi Yue and three of whom will be appointed by Wuhan Real Estate, respectively. 11

14 LETTER FROM THE BOARD Supervisor The Joint Venture B will not maintain a board of supervisors but instead will have two supervisors, each of whom will be appointed by Yi Yue and Wuhan Real Estate respectively. Zhaoyuelong will not maintain a board of supervisors but instead will have two supervisors, each of whom will be appointed by Yi Yue and Wuhan Real Estate respectively. Shareholders voting mechanism At each of the shareholders meetings of the Joint Venture B and Zhaoyuelong, specific matters under situation as described in the Cooperation Agreement B must be passed by 100% of the votes cast by the shareholders of the Joint Venture B and Zhaoyuelong, respectively. Condition precedent The Cooperation Agreement B will be conditional upon the parties to the Cooperation Agreement B obtaining relevant approval from the relevant authorities. Completion Upon completion of the transactions contemplated under the Cooperation Agreements, Yi Yue will hold 51% equity interests in the Joint Venture A and 49% equity interests in the Joint Venture B. The Joint Venture A will become an indirect subsidiary of the Company and its financial results will be consolidated into the consolidated financial statements of the Company. The Joint Venture B and Zhaoyuelong will become associates of the Company and its respective financial results will not be consolidated into the consolidated financial statements of the Company. Shareholding structures before and after the transactions contemplated under the Cooperation Agreements The shareholding structures of Zhaoqilong, Zhaoyuelong, the Joint Venture A and the Joint Venture B (i) before the completion of the transactions contemplated under the Cooperation Agreements; and (ii) immediately after the completion of the transactions contemplated under the Cooperation Agreements are as follows:- Before the completion of the transactions contemplated under the Cooperation Agreements: Yi Yue 100% Zhaoqilong Yi Yue 100% Zhaoyuelong 12

15 LETTER FROM THE BOARD Immediately after the completion of the transactions contemplated under the Cooperation Agreements: Yi Yue Wuhan Real Estate 51% 49% Joint Venture A 100% Zhaoqilong Yi Yue Wuhan Real Estate 49% 51% Joint Venture B 100% Zhaoyuelong Information relating to the Chengyi Land The Chengyi Land is located at Jimei New City* ( ), Jimei District, Xiamen, Fujian Province, the PRC (Land Plot no.2018jp01), which is situated at the northeast side of the intersection of planned Chengyi Road West ( ) and planned Chengyi Road North ( ), with a total site area of approximately 30,534.5 sq.m.. Please refer to page 6 of this circular for the further information relating to the Chengyi Land. Information relating to the Xingjin Land The Xingjin Land is located at Jimei New City* ( ), Jimei District, Xiamen, Fujian Province, the PRC (Land Plot no.2017jp03), which is situated at the northeast side of the intersection of Xingjin Road ( ) and Haixiang Avenue ( ), with a total site area of approximately 20,176 sq.m.. Please refer to the announcement of the Company dated 15 September 2017 and the circular of the Company dated 8 November 2017 for the further information relating to the Xingjin Land. Information about the parties to the Cooperation Agreements Yi Yue is a company established with limited liability in the PRC and is an indirect wholly-owned subsidiary of the Company. Yi Yue is principally engaged in the property investment and development business. Zhaoqilong is a company established with limited liability in the PRC and is an indirect wholly-owned subsidiary of the Company. Zhaoqilong is principally engaged in property development and operation and property management. 13

16 LETTER FROM THE BOARD Zhaoyuelong is a company established with limited liability in the PRC and is an indirect wholly-owned subsidiary of the Company. Zhaoyuelong is principally engaged in property development and operation and property management. Wuhan Real Estate is a company established with limited liability in the PRC and is principally engaged in property development, sales of commodity housing, property management and property lease. Financial effect of the transaction contemplated under the Cooperation Agreements Immediately upon completion of the establishment of the Joint Venture A and assuming that 51% of the consideration RMB2,300,000,000 and approximately RMB46,920,000 to be lent to the Joint Venture A are to be satisfied by loan from controlling shareholders, the financial effects upon the Group are: (i) an increase of asset from the Chengyi Land amounting to RMB2,392,000,000; (ii) an increase in liabilities (representing the loan from controlling shareholders) of approximately RMB1,219,920,000; (iii) an increase in liabilities (representing the loan from non-controlling shareholder) of approximately RMB45,080,000; (iv) an increase in equity (representing the non-controlling interest) of approximately RMB1,127,000,000; and (v) an insignificant effect on the earnings of the Group. Immediately upon completion of the establishment of the Joint Venture B and assuming that 49% of the consideration RMB500,000,000 and approximately RMB598,780,000 to be lent to the Joint Venture B are to be satisfied by loan from controlling shareholders, the financial effects upon the Group are: (i) an increase in interests in associates of approximately RMB245,000,000; (ii) an increase in trade and other receivables of approximately RMB598,780,000; (iii) an increase in liabilities (representing the loan from controlling shareholders) of approximately RMB843,780,000; and (iv) an insignificant effect on the earnings of the Group. Reasons for and benefits of the transactions contemplated under the Cooperation Agreements The Group is principally engaged in the business of property development, real estate industry chain investment services and investment in emerging industries in the PRC. The Directors are of the view that: (i) each of the Chengyi Land and the Xingjin Land is of scarce land parcel at advantageous location with promising development potential; (ii) participating in development of the Lands is conductive to the expansion of the Company s property development business as well as the improvement in business and asset structures; and (iii) introducing Wuhan Real Estate as a cooperation partner is beneficial for both parties to integrate their respective resources, forming a business model with complementary strengths, so as to further promote each party s brand recognition and influence in the real estate industry. The Directors are of the view that transactions contemplated under the Cooperation Agreements are in the ordinary and usual course of business of the Company and arrangement contemplated under the Cooperation Agreements are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole. 14

17 LETTER FROM THE BOARD LISTING RULES IMPLICATIONS As one or more of the applicable percentage ratios in respect of the acquisition of the Chengyi Land are more than 25% but less than 100%, the acquisition of the Chengyi Land constitutes a major transaction for the Company under Chapter 14 of the Listing Rules. The acquisition of the Chengyi Land is regarded as a qualified property acquisition under Rule 14.04(10C) of the Listing Rules as the acquisition of the Chengyi Land involves an acquisition of governmental land from a PRC Governmental Body (as defined under the Listing Rules) through a tender, auction or a listing-for-sale governed by the PRC law (as defined under the Listing Rules). The Board confirms that the acquisition of the Chengyi Land is undertaken on a sole basis by the Company in its ordinary and usual course of business and on normal commercial terms which is fair and reasonable and in the interests of the Company and its Shareholders as a whole. Accordingly, the acquisition of the Chengyi Land is subject to reporting, announcement and circular requirements but is exempt from shareholders approval requirement pursuant to Rule 14.33A of the Listing Rules. As one or more of the applicable percentage ratios in respect of the transactions contemplated under the Cooperation Agreements are more than 25% but less than 100%, the transactions contemplated under the Cooperation Agreements constitute major transactions for the Company under Chapter 14 of the Listing Rules and are subject to reporting, announcement, circular and shareholders approval requirement. To the best of the Directors knowledge, information and belief, after having made all reasonable enquiries, no Shareholder is required to abstain from voting if the Company were to convene a general meeting for approving the transactions contemplated under the Cooperation Agreements. A written Shareholder s approval dated 4 July 2018 has been obtained from Well Land International Limited (which as at the date of this announcement held 446,336,745 issued Shares of the Company, representing approximately 60.74% of the issued share capital of the Company) in respect of the transactions contemplated under the Cooperation Agreements. Such written approval has been accepted in lieu of holding a general meeting of the Company for approving the transactions contemplated under the Cooperation Agreements. Therefore, no general meeting of the Company will be convened for approving the transactions contemplated under the Cooperation Agreements pursuant to Rule of the Listing Rules. GENERAL Your attention is drawn to the financial information of the Group and general information set out in the appendices to this circular. Yours faithfully, By Order of the Board C&D International Investment Group Limited Zhuang Yuekai Chairman and Executive Director 15

18 APPENDIX I FINANCIAL INFORMATION OF THE GROUP 1. FINANCIAL INFORMATION OF THE GROUP Financial Information of the Group Financial information of the Group for each of the three financial years ended 31 December 2015, 2016 and 2017 are disclosed in the following documents which have been published on the websites of the Stock Exchange ( and the Company ( annual report of the Company for the year ended 31 December 2015 published on 11 April 2016 (pages 52 to 123); annual report of the Company for the year ended 31 December 2016 published on 7 April 2017 (pages 67 to 143); and annual report of the Company for the year ended 31 December 2017 published on 20 April 2018 (pages 84 to 179). Statement of Indebtedness Borrowings Secured At the close of business on 31 May 2018, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group had guaranteed and secured interest-bearing bank borrowings of RMB4,144,197,000. Among the guaranteed and secured interest-bearing bank borrowings of the Group, RMB1,831,000 was secured by certain property, plant and equipment, RMB236,000,000 was secured by investment property and RMB3,906,366,000 was secured by property under development for sale. Borrowings Unsecured At the close of business on 31 May 2018, the Group had unsecured and guaranteed interest-bearing bank borrowings of RMB2,445,725,000, unsecured and unguaranteed amounts due to non-controlling shareholders of the Group amounting to RMB2,510,057,000, and unsecured and unguaranteed interest-bearing loan from the intermediate holding companies of RMB13,701,413,000. Financial Guarantee Contracts At the close of business on 31 May 2018, the Group has provided guarantees to banks and financial institutions for mortgage facilities granted to purchasers of the Group s properties amounting to RMB4,975,777,000. Such guarantees are provided to secure obligations of those purchasers for repayments, the guarantee period would be started from the date of grant of the mortgage and terminated upon the earlier of (i) issuance of the real estate ownership certificate which will generally be available within an average period of two to three years upon the completion of guarantee registration; or (ii) the satisfaction of mortgaged loan by the purchasers of properties. 16

19 APPENDIX I FINANCIAL INFORMATION OF THE GROUP Capital Commitments At the close of business on 31 May 2018, the Group had capital commitments, which were contracted but not provided for, in respect of property, plant and equipment and properties under development and proposed development projects of RMB725,000, RMB5,976,795,000 and RMB216,800,000 respectively. Pledged Assets As at 31 May 2018, bank borrowings are effectively secured by the underlying assets that consist of certain of the Group s property, plant and equipment with a carrying amount of RMB9,734,000, investment property with a carrying amount of RMB142,082,000 and properties under development for sale with a carrying amount of RMB8,361,125,000. Contingent Liabilities As at the close of business on 31 May 2018, the Group did not have other significant contingent liabilities. Disclaimer Save as aforesaid in this section of the circular and apart from intra-group liabilities and normal trade payables in the ordinary course of business, as at the close of business on 31 May 2018, the Group did not have any other debt securities issued and outstanding, or authorised or otherwise created but unissued, loans or any term loans (secured, unsecured, guaranteed or otherwise), any other borrowings or indebtedness in the nature of borrowing including bank overdrafts and any liabilities under acceptances (other than normal trade bills) or other similar indebtedness, acceptance credits, debentures, mortgages, charges, finance lease or hire purchase commitments, guarantees or other material contingent liabilities. Working Capital Sufficiency The Directors are of the opinion that, taking into account the financial resources and banking facilities available to the Group, the Group will have sufficient working capital to satisfy its present requirements for the next twelve months from the Latest Practicable Date in the absence of unforeseen circumstances. 2. FINANCIAL AND TRADING PROSPECT OF THE GROUP Leveraging on the strong background of C&D Real Estate Corporation Limited ( C&D Real Estate ), as a state-owned enterprise and its abundant financial support, the Group will continue to acquire land efficiently at competitive prices and increase high-quality land reserves. The Company will increase its land reserves, so that the Company can sustainably and stably develop its real estate 17

20 APPENDIX I FINANCIAL INFORMATION OF THE GROUP business. For the purpose of business operations, the Group will make full use of the branding strength, operational excellence and financial advantages of C&D Real Estate and strive to make progress on (i) diversified business layout; (ii) construction and enhancement of profitability; and (iii) exploration for sustainable development path. The Company, while developing and marketing its properties, enjoys the branding strength of C&D Real Estate, which has been highly recognised over the 30 past years for its many projects developed across the PRC in the industry, so as to gain some advantages over its competitors. With respect to the positioning and planning of the Group, the Group will strive to be an Integrated Investment Service Provider in the Real Estate Industry Chain, always adhering to create an integral value for customers. While focusing on its principal business of property development, the Group will, based on the upstream and downstream industry chain of real estate, actively expand its business boundaries, extend business lines in the industrial chain, seek opportunities to speed up its business layout and nurture related industrial chain businesses, such as commercial operation management, entrusted construction consultancy services, consumption and industrial finance, cultural and creative industrial park, smart home and smart city. As a Hong Kong listed company leveraging on the strong background of C&D Real Estate, the Company will continuously improve its profitability for shareholder value creation, so as to achieve win-win solutions for the Group, the society and Shareholders. 18

21 APPENDIX II GENERAL INFORMATION 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 Company. The Directors having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading. 2. DISCLOSURE OF INTERESTS OF DIRECTORS AND CHIEF EXECUTIVE As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company in the Shares, underlying Shares and debentures of the Company and its associated corporation (within the meaning of Part XV of the SFO) which were required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they have taken or deemed to have under such provisions of the SFO); (ii) pursuant to Section 352 of the SFO, to be entered in the register of members of the Company; or (iii) pursuant to the Model Code for Securities Transactions by Directors of Listed Companies of the Listing Rules, to be notified to the Company and the Stock Exchange were as follows: Long positions Name of Directors Capacity/nature of interest Number of issued Shares/underlying Shares held Approximate percentage of shareholding in issued share capital (Note 1) Mr. Zhuang Yuekai Founder of a discretionary trust 58,346,000 (Note 2) 7.94% Mr. Shi Zhen Founder of a discretionary trust 58,346,000 (Note 2) 7.94% Ms. Zhao Chengmin Founder of a discretionary trust 58,346,000 (Note 2) 7.94% Notes: (1) The percentage of shareholding was calculated based on the Company s total issued share capital of 734,864,745 Shares as at the Latest Practicable Date. (2) These Shares were registered in the name of Diamond Firetail Limited ( Diamond Firetail ), a company incorporated in the British Virgin Islands. Diamond Firetail is a wholly-owned subsidiary of Equity Trustee Limited ( Equity Trustee ). Equity Trustee is a trustee of a discretionary trust and each of Mr. Zhuang Yuekai, Mr. Shi Zhen and Ms. Zhao Chengmin is one of the founders of the said discretionary trust. Therefore, Mr. Zhuang Yuekai, Mr. Shi Zhen and Ms. Zhao Chengmin are deemed to be interested in the Shares held by Diamond Firetail by virtue of the SFO. Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executives of the Company: 19

22 APPENDIX II GENERAL INFORMATION (a) was a director or employee of a company which had an interest or short position in the Shares and underlying Shares 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; or (b) had any interest or short position in the Shares, underlying Shares and debentures of the Company or any of its associated corporation(s) (within the meaning of Part XV of the SFO), which were required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they have taken or were deemed to have under such provisions of the SFO); (ii) pursuant to Section 352 of the SFO, to be entered in the register of members of the Company; or (iii) pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, to be notified to the Company and the Stock Exchange. 3. SUBSTANTIAL SHAREHOLDERS INTERESTS So far as the Directors were aware, as at the Latest Practicable Date, the persons other than a Director or senior management of the Company who have interests or short positions in the Shares or underlying Shares of the Company which are disclosable under Divisions 2 and 3 of Part XV of the SFO are as follows: Name of Shareholder Capacity/nature of interest Number of issued Shares/ underlying Shares held Approximate percentage of shareholding in issued share capital (Note 1) Well Land International Limited ( ) ( Well Land ) Well Honour International Limited ( ) ( Well Honour ) C & D Real Estate Corporation Limited ( ) ( C & D Real Estate ) Xiamen C&DInc. ( ) Xiamen C&DCorporation Limited ( ) ( Xiamen C&D ) Beneficial owner 446,336, % Interest of controlled corporation Interest of controlled corporations Interest of controlled corporations Interest of controlled corporations 446,336,745 (Note 2) 446,336,745 (Note 2) 446,336,745 (Note 2) 446,336,745 (Note 2) 60.74% 60.74% 60.74% 60.74% Diamond Firetail Beneficial owner 58,346, % Equity Trustee Interest of controlled 58,346, % corporation (Note 3) Ms. Zhang Yunxia Founder of a discretionary trust 58,346,000 (Note 3) 7.94% 20

23 APPENDIX II GENERAL INFORMATION Name of Shareholder Capacity/nature of interest Number of issued Shares/ underlying Shares held Approximate percentage of shareholding in issued share capital (Note 1) Ms. Cheng Bing Founder of a discretionary trust 58,346,000 (Note 3) 7.94% Viewforth Limited ( Viewforth ) Beneficial owner 60,000, % Fullshare Holdings Limited ( Fullshare ) Magnolia Wealth International Limited ( Magnolia Wealth ) Ji Changqun Interest of controlled corporation Interest of controlled corporations Interest of controlled corporations 60,000,000 (Note 4) 60,000,000 (Note 4) 60,000,000 (Note 4) 8.16% 8.16% 8.16% Notes: (1) The percentage of shareholding was calculated based on the Company s total issued share capital of 734,864,745 Shares in issue as at the Latest Practicable Date. (2) Well Land is a wholly-owned subsidiary of Well Honour. Well Honour is a wholly-owned subsidiary of C&D Real Estate. C&D Real Estate is owned as to 54.65% by Xiamen C&D Inc., the shares of which are listed on the Shanghai Stock Exchange (stock code: ). Xiamen C&D, a state-owned group of companies under the supervision of Xiamen Municipality, is interested in Xiamen C&D Inc. as to 45.89%. Therefore, Well Honour, C&D Real Estate, Xiamen C&D Inc. and Xiamen C&D are deemed to be interested in the Shares and the underlying Shares held by Well Land by virtue of the SFO. (3) These Shares were registered in the name of Diamond Firetail, a company incorporated in the British Virgin Islands. Diamond Firetail is a wholly-owned subsidiary of Equity Trustee. Equity Trustee is a trustee of a discretionary trust and Mr. Zhuang Yuekai, Mr. Shi Zhen, Ms. Zhao Chengmin, Ms. Zhang Yunxia and Ms. Cheng Bing are founders of the said discretionary trust. Therefore, Equity Trustee, Ms. Zhang Yunxia and Ms. Cheng Bing are deemed to be interested in the Shares held by Diamond Firetail by virtue of the SFO. The interests of Mr. Zhuang Yuekai, Mr. Shi Zhen and Ms. Zhao Chengmin are shown in the section headed Disclosure of interests of Directors and Chief Executive above. (4) These Shares were registered in the name of Viewforth, a company incorporated in the British Virgin Islands. Viewforth is a wholly-owned subsidiary of Fullshare. Fullshare is a controlled corporation of Magnolia Wealth. Magnolia Wealth is 100% beneficially owned by Mr. Ji Changqun. Therefore, Fullshare, Magnolia Wealth and Mr. Ji Changqun are deemed to be interested in the Shares held by Viewforth by virtue of the SFO. Save as disclosed above, as at the Latest Practicable Date, so far as was known to the Directors, the Directors and the chief executive of the Company were not aware of any other person (other than the Directors and the chief executive of the Company) who, had or was deemed to have, interests or short positions in the Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which would fall to be disclosed under provisions of Division 2 and 3 of Part XV of the SFO, or who was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the Group or any options in respect of such share capital. 21