Chuang China Investments : PROPOSALS INVOLVING (I) RE-ELECTION OF RETIRING DIRECTORS AND (II) GRANT OF GENERAL MANDATE TO REPURCHASE SHARES

THIS DOCUMENT IS IMPORTANT AND REQUIRES 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 a stockbroker or other registered dealer in securities, a bank manager, solicitor, professional accountant or other professional adviser.

If you have sold all your shares in Chuang's China Investments Limited, you should at once hand this circular and the accompanying 2020 Annual Report and form of proxy to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

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.

I

PROPOSALS INVOLVING (I) RE-ELECTION OF RETIRING DIRECTORS

AND

(II) GRANT OF GENERAL MANDATE TO REPURCHASE SHARES

PRECAUTIONARY MEASURES FOR THE ANNUAL GENERAL MEETING

Please take special note of note 5 to the notice of annual general meeting for the measures to be taken at the Annual General Meeting of the Company to reduce the risk of Covid-19 spreading. You are strongly encouraged to appoint the Chairman of the Annual General Meeting as your proxy to vote according to your indicated voting instructions as an alternative to attending the Annual General Meeting in person.

Subject to the development of Covid-19, the Company may implement further changes and precautionary measures and may issue further announcement(s) on such measures as appropriate.

28 July 2020

• Non-executivedirector
  # Honorary Chairman
  * Independent non-executive directors

28 July 2020

To the shareholders,

Dear Sir or Madam,

PROPOSALS INVOLVING (I) RE-ELECTION OF RETIRING DIRECTORS

AND

1. GRANT OF GENERAL MANDATE TO REPURCHASE SHARES

1. INTRODUCTION

It is proposed that at the annual general meeting (the ''Annual General Meeting'') of

Chuang's China Investments Limited (the ''Company'', together with its subsidiaries, the ''Group'') to be held at Chater Room, 2nd Floor, Mandarin Oriental, 5 Connaught Road, Central, Hong Kong, on Friday, 18 September 2020 at 10:00 a.m., resolutions will be proposed (i) to re-elect the retiring directors as directors of the Company (the ''Director(s)'') and (ii) to grant to the board of Directors (the ''Board'') of the Company a general mandate to repurchase shares of HK$0.05 each (the ''Shares'') of the Company. This circular gives the information reasonably necessary to enable shareholders of the Company (the ''Shareholder(s)'') to make an informed decision on whether to vote for or against the above resolutions. The Board has confirmed that having made all reasonable enquiries, no Shareholder is required to abstain from voting on any of the proposed resolutions under Rule

2.17 of the Rules Governing the Listing of Securities (the ''Listing Rules'') on The Stock Exchange of Hong Kong Limited (the ''Stock Exchange'').

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2. PROPOSED RE-ELECTION OF DIRECTORS

In accordance with Bye-law nos. 86(2) and 86(3) of the Bye-laws of the Company (the ''Bye-laws'') and Appendix 14 of the Listing Rules, four Directors, Mr. Sunny Pang Chun Kit, Mr. Dominic Lai, Mr. Abraham Shek Lai Him and Dr. Eddy Li Sau Hung (collectively, the ''Retiring Directors'') will retire at the Annual General Meeting and, being eligible, will offer themselves for re-election at the Annual General Meeting.

The Board has assessed the suitability of the Retiring Directors with reference to the selection criteria including, inter alia, diversity in all aspects (including but not limited to gender, age, cultural and educational background, professional experience and skills) as set out in the nomination policy of the Company and the benefits of having a diverse Board as set out in the board diversity policy of the Company through the nomination committee of the Company (the ''Nomination Committee''). The Board has endorsed the recommendation from the Nomination Committee and recommended the Retiring Directors to stand for re-election at the Annual General Meeting.

The Board has also assessed the independence of each of Mr. Abraham Shek Lai Him (''Mr. Abraham Shek'') and Dr. Eddy Li Sau Hung (''Dr. Eddy Li'') with reference to the independence criteria as set out in rule 3.13 of the Listing Rules. Each of Mr. Abraham Shek and Dr. Eddy Li has provided the confirmation of independence to the Board and the Board is satisfied that each of them remains independent.

Mr. Abraham Shek has acted as an independent non-executive Director for more than nine years. Throughout his directorship with the Company, Mr. Abraham Shek has participated in Board meetings to give impartial advice and exercise independent judgement, served on various committees of the Board but has never engaged in any executive management. Taking into consideration of the independent nature of his role and duties in the past years, the Board considers Mr. Abraham Shek to be independent under the Listing Rules although he has served the Company for more than nine years. The Board believes that the continuous appointment of Mr. Abraham Shek as an independent non-executive Director will help to maintain the stability of the Board as Mr. Abraham Shek has, over time, gained valuable insights into the business strategy and policies of the Group.

Mr. Abraham Shek currently holds more than six directorships in other listed companies in Hong Kong. Taking into account of the relevant expertise of Mr. Abraham Shek, his good track records in attending the Company's meetings and providing feedbacks to the Company's affairs from time to time; and he has provided a confirmation to the Company that he would ensure to devote sufficient time to the Board and the committees of the Company in which he is a member. The Board believes Mr. Abraham Shek would still be able to devote sufficient time to the Board.

Set out below are the biographical details of the four Retiring Directors proposed to be re-elected:

Mr. Sunny Pang Chun Kit (''Mr. Sunny Pang'') (aged 62), an executive Director, has over 42 years of experience in construction and real estate development business. He holds a Master of Science degree in Construction and Project Management and is a member of the Chartered Institute of Building and the Architects and Surveyors Institute, United Kingdom and an associate member of the Hong Kong Institution of Engineers. He joined the Group in 1992 and is a director of certain subsidiaries of the Company. As at 15 July 2020 (the ''Latest Practicable Date''), Mr. Sunny Pang held 930,000 Shares in the Company. Mr. Sunny Pang did not hold any other directorship in any other listed company in Hong Kong or overseas over the last three years.

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Mr. Dominic Lai1 (''Mr. Dominic Lai'') (aged 73), was appointed as a non-executive Director in December 2017. He is a practising solicitor in Hong Kong and is admitted as a solicitor in England and Wales, the Republic of Singapore and the States of New South Wales and Victoria, Australia. Mr. Dominic Lai is currently a non-executive director of NWS Holdings Limited (stock code: 659) and Oriental Press Group Limited (stock code: 18), both are listed on the Stock Exchange. During the last three years, Mr. Dominic Lai had been a non-executive director of Magnus Concordia Group Limited (''MCGL'', formerly known as Midas International Holdings Limited) (stock code: 1172). Save as disclosed herein, he did not hold any other directorship in any other listed company in Hong Kong or overseas over the last three years.

Mr. Abraham Shek2 G.B.S., J.P., (aged 75), was appointed as an independent non- executive Director of the Company in April 2008. He acted as the honorary chairman of the Company since 29 April 2019 following his retirement from his position as the chairman. Mr. Abraham Shek is the chairman of the audit committee, the nomination committee and the remuneration committee of the Company. He is currently a member of the Legislative Council for the Hong Kong Special Administrative Region, the Court of The Hong Kong University of Science & Technology, the Court and the Council of The University of Hong Kong, a non- executive director of the Mandatory Provident Fund Schemes Authority of Hong Kong and a member of the Advisory Committee on Corruption of the Independent Commission Against Corruption. He holds a Bachelor degree of Arts. He is also an independent non-executive director of Chuang's Consortium International Limited (''CCIL'', the ultimate holding company of the Company) (stock code: 367), Paliburg Holdings Limited (stock code: 617), Lifestyle International Holdings Limited (stock code: 1212), NWS Holdings Limited (stock code: 659), Country Garden Holdings Company Limited (stock code: 2007), SJM Holdings Limited (stock code: 880), ITC Properties Group Limited (stock code: 199), China Resources Cement Holdings Limited (stock code: 1313), Lai Fung Holdings Limited (stock code: 1125), Cosmopolitan International Holdings Limited (stock code: 120), Goldin Financial Holdings Limited (stock code: 530), Everbright Grand China Assets Limited (stock code: 3699), CSI Properties Limited (stock code: 497) and Far East Consortium International Limited (stock code: 35), all are listed on the Stock Exchange. Mr. Abraham Shek is also an independent non-executive director of Eagle Asset Management (CP) Limited, the manager of Champion Real Estate Investment Trust (stock code: 2778), and Regal Portfolio Management Limited, the manager of Regal Real Estate Investment Trust (stock code: 1881), both trusts are listed on the Stock Exchange. During the last three years, he had been an independent non-executive director of MCGL (stock code: 1172), Hop Hing Group Holdings Limited (stock code: 47), MTR Corporation Limited (stock code: 66), the shares of which are listed on the Stock Exchange. Save as disclosed herein, he did not hold any other directorship in any other listed company in Hong Kong or overseas over the last three years.

Dr. Eddy Li G.B.S., J.P., (aged 65), was appointed as an independent non-executive Director in December 2017. Dr. Eddy Li is a member of the audit committee and the remuneration committee of the Company. He has over 35 years of experience in the manufacturing business. He is the permanent honorary president of the Chinese Manufacturers' Association of Hong Kong and the president of Hong Kong Economic & Trade Association. Dr. Eddy Li holds a Master degree in Business Administration and a Ph.D. degree in Economics. He was the 1991 awardee of The Ten Outstanding Young Persons and the 1993 awardee of Young Industrialists of Hong Kong. He is currently an independent non- executive director of Oriental Watch Holdings Limited (stock code: 398) and Man Yue

1. also known as Dominic Lai Wing or Lai Hing Chiu
2. also known as Abraham Razack

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Technology Holdings Limited (stock code: 894), both are listed on the Stock Exchange. During the last three years, Dr. Eddy Li had been an independent non-executive director of MCGL (stock code: 1172). Save as disclosed herein, he did not hold any other directorship in any other listed company in Hong Kong or overseas over the last three years.

Mr. Sunny Pang has no service contract nor any specified length or proposed length of service with the Company. Mr. Sunny Pang has an employment contract with a subsidiary of the Company which can be terminated by either party giving to the other party 1 month written notice without payment of compensation (other than statutory compensation) and the annual remuneration for Mr. Sunny Pang is HK$2,762,000 which includes the Director's fee, salary and retirement scheme contribution and other benefits, if any, and is determined by the Board with reference to relevant Director's duty and experience as well as the prevailing market conditions.

Each of Mr. Abraham Shek, Mr. Dominic Lai and Dr. Eddy Li has a service contract with the Company for a term of 3 years subject to re-election. Mr. Abraham Shek (also being the honorary chairman of the Company) entitles to a Director's fee of HK$400,000 per annum and each of Mr. Dominic Lai and Dr. Eddy Li entitles to a Director's fee of HK$120,000 per annum, subject to adjustment as appropriate to be determined by the Board. The Directors' fees were determined by reference to the Directors' duties and experience as well as the related payments made by the Company in previous years. Mr. Abraham Shek (also being an independent non-executive director of CCIL) entitles to a director's fee of HK$150,000 per annum which was determined by CCIL.

All the Retiring Directors mentioned above are subject to retirement by rotation and re-election at least once every 3 years pursuant to Appendix 14 of the Listing Rules and the Bye-laws.

Except as mentioned above, all the Retiring Directors subject to re-election have no interest in the Shares of the Company and its associated corporations within the meaning of Part XV of the Securities and Futures Ordinance, no relationship with any other Directors, senior management, substantial or controlling Shareholders and no further information to be disclosed pursuant to any of the requirements of Rules 13.51(2)(h) to (v) of the Listing Rules, and there is no other matter that needs to be brought to the attention of the Shareholders.

3. GENERAL MANDATE TO REPURCHASE SHARES

At the Annual General Meeting, an ordinary resolution will be proposed that the Board be given a general mandate to exercise all powers of the Company to repurchase issued and fully paid Shares of the Company. Under such mandate, the number of Shares that the Company may repurchase shall not exceed 10 per cent. of the share capital of the Company in issue on the date of the passing of the resolution.

An explanatory statement to provide Shareholders with all the information reasonably necessary for them to make an informed decision in relation to this proposed resolution as required by the Listing Rules concerning the regulation of repurchases by companies of their own securities on the Stock Exchange is set out below.

As at the Latest Practicable Date, there were in issue an aggregate of 2,348,835,316 Shares. Exercising in full of the mandate, if so approved, on the basis that no further Shares shall be issued and repurchased prior to the date of the Annual General Meeting, could accordingly result in up to 234,883,531 Shares being repurchased by the Company. The mandate allows the Company to make or agree to make repurchases only during the period

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ending on the earliest of (i) the conclusion of the next annual general meeting of the Company, (ii) the date by which the next annual general meeting of the Company is required to be held by the Bye-laws or any applicable law or (iii) the revocation or variation of authority given under the ordinary resolution of the Shareholders in general meeting of the Company.

Reasons for the repurchases

The Board considers that the mandate will provide the Company with the flexibility to make Shares repurchases when appropriate and beneficial to the Company. Such repurchases may enhance the net asset value per Share and/or earnings per Share. As compared with the financial position of the Company as at 31 March 2020 (being the date of the latest published audited accounts of the Company), the Board considers that there may be adverse impact on the working capital and on the gearing position of the Company in the event that the proposed repurchases were to be carried out in full during the proposed repurchase period. However, the Board does not propose to exercise the repurchase mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or its gearing levels which in the opinion of the Board are from time to time appropriate for the Company.

Funding of the repurchases

The Company is empowered by its Memorandum of Association of the Company (''Memorandum of Association'') and the Bye-laws to repurchase its Shares and in repurchasing Shares, may only apply funds legally available for such purpose in accordance with its Memorandum of Association and the Bye-laws and the laws of Bermuda. Bermuda law provides that the amount of capital paid in connection with the share repurchases may only be paid out of either the capital paid up on the shares to be repurchased, the funds of the company otherwise available for distribution or the proceeds of a new issue of shares made for the purpose. The amount of premium payable on redemption may only be paid out of the funds of the Company otherwise available for dividend or distribution or out of the share premium or contributed surplus accounts of the Company. In accordance with the Listing Rules, the listing of all Shares which are repurchased by the Company (whether on the Stock Exchange or otherwise) shall be automatically cancelled upon repurchase and the Company would apply for listing of any further issue of Shares in the normal way.

Assuming that there is no further issue of Shares between the Latest Practicable Date and the date of repurchase, the exercise of the general mandate to repurchase Shares whether in whole or in part will not result in less than 25 per cent. of the issued share capital of the Company being held by the public as required by Rule 8.08 of the Listing Rules.

Directors, their close associates and core connected persons

None of the Directors nor, to the best of the knowledge of the Directors having made all reasonable enquiries, any of their close associates has any present intention, in the event that the proposal is approved by the Shareholders, to sell Shares to the Company or its subsidiaries.

No core connected person (as defined in the Listing Rules) of the Company has notified the Company that he/she has a present intention to sell Shares to the Company or its subsidiaries nor has he/she undertaken not to sell any of the Shares held by him/her to the Company or its subsidiaries in the event that the Company is authorized to make repurchases of Shares.

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Undertaking of the Board

The Board has undertaken to the Stock Exchange to exercise the power of the Company to make repurchases pursuant to the proposed resolution in accordance with the Listing Rules, the laws of Bermuda and in accordance with the regulations set out in the Memorandum of Association and the Bye-laws.

Effect of takeovers code

If, as a result of a share repurchase, a Shareholder's proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of The Codes on Takeovers and Mergers (''Takeovers Code'') and, if such increase results in a change of control, may in certain circumstances give rise to an obligation to make a mandatory offer for Shares under Rules 26 and 32 of Takeovers Code.

As at the Latest Practicable Date, CCIL, through its subsidiaries, held approximately

60.71 per cent. of the issued share capital of the Company. In the event that the Board were to exercise in full the power to repurchase Shares which is to be granted pursuant to the proposed resolution, the shareholding of CCIL would increase to approximately 67.46 per cent. of the issued share capital of the Company. Such increase would not give rise to an obligation to make a mandatory offer under the Takeovers Code.

Shares repurchase made by the Company

The Company had not made any purchase of its securities (whether on the Stock Exchange or otherwise) during the six months immediately preceding the Latest Practicable Date.

During each of the twelve months from July 2019 up to and including the Latest Practicable Date, the highest and lowest traded prices for the Shares on the Stock Exchange were as follows:

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4. 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 misleading.

5. ACTION TO BE TAKEN

A proxy form for use at the Annual General Meeting is enclosed in the annual report of the Company for the year ended 31 March 2020 despatched together with this circular. Whether or not you intend to attend the Annual General Meeting, you are requested to complete the said proxy form and return it to the Company's share registrar in Hong Kong, Tricor Progressive Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the Annual General Meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Annual General Meeting if you so desire.

6. VOTING AT THE ANNUAL GENERAL MEETING

Pursuant to Bye-law no. 65 of the Bye-laws and Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted by a show of hands.

7. RECOMMENDATION

The Board believes that (i) the re-election of the Retiring Directors and (ii) the grant of general mandate for the Board to repurchase Shares are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the proposed resolutions set out in the notice of the Annual General Meeting.

Yours faithfully,

For and on behalf of

Chuang's China Investments Limited

Chong Ka Fung

Managing Director

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