HKC : (1) PROPOSED PRIVATISATION OF HKC (HOLDINGS) LIMITED BY GENESIS VENTURES LIMITED BY WAY OF A SCHEME OF ARRANGEMENT UNDER SECTION 99 OF THE COMPANIES ACT 1981 OF BERMUDA (2) PROPOSED DECLARATION OF SECOND INTERIM DIVIDEND AND (3) PROPOSED WITHDRAWAL OF LISTING OF HKC (HOLDINGS) LIMITED

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in HKC (Holdings) Limited, you should at once hand this Scheme Document and the accompanying forms of proxy to the purchaser or transferee or to the licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected 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 the contents of this Scheme Document, 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 Scheme Document.

This Scheme Document appears for information purposes only and does not constitute an invitation or offer to purchase or subscribe for securities of the Offeror or HKC (Holdings) Limited.

Genesis Ventures Limited 華 創 創 業 投 資 有 限 公 司

(Stock code: 190)

(website: www.hkcholdings.com)

(1) PROPOSED PRIVATISATION OF HKC (HOLDINGS) LIMITED

BY

GENESIS VENTURES LIMITED

BY WAY OF A SCHEME OF ARRANGEMENT

UNDER SECTION 99 OF THE COMPANIES ACT 1981 OF BERMUDA

1. PROPOSED DECLARATION OF SECOND INTERIM DIVIDEND AND
2. 1. PROPOSED WITHDRAWAL OF LISTING OF

HKC (HOLDINGS) LIMITED

Financial Adviser to the Offeror

SOMERLEY CAPITAL LIMITED

Independent Financial Adviser to the Independent Board Committee

Unless the context otherwise requires, capitalised terms used in this Scheme Document have the meanings set out in Part I of this Scheme Document.

A letter from the Board is set out in Part III of this Scheme Document. A letter from the Independent Board Committee containing its advice to the Disinterested Scheme Shareholders in respect of the Proposal and as to voting is set out in Part IV of this Scheme Document. A letter from Anglo Chinese, the Independent Financial Adviser to the Independent Board Committee, containing its advice to the Independent Board Committee in respect of the Proposal and as to voting is set out in Part V of this Scheme Document. An Explanatory Statement regarding the Proposal is set out in Part VI of this Scheme Document.

Notices convening the Court Meeting and the SGM to be held at Lower Level 1, Kowloon Shangri-La, 64 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on Friday, 23 April 2021 at 10 : 00 a.m. and 10 : 30 a.m. (or immediately after the conclusion or adjournment of the Court Meeting) respectively are set out in Appendix V and Appendix VI to this Scheme Document respectively. Whether or not you are able to attend the Court Meeting and/or the SGM, you are strongly urged to complete and sign the enclosed pink form of proxy in respect of the Court Meeting and the enclosed white form of proxy in respect of the SGM, in accordance with the instructions printed on them respectively, and to deposit them at the 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 but in any event not later than the respective times and dates as stated under the section headed ''IMPORTANT NOTICE AND ACTIONS TO BE TAKEN'' of this Scheme Document. The white form of proxy in respect of the SGM will not be valid if it is not so lodged. The pink form of proxy in respect of the Court Meeting may alternatively be handed to the chairman of the Court Meeting at the Court Meeting if it is not so deposited and the chairman shall have absolute discretion as to whether or not to accept it. If you attend and vote at the Court Meeting and the SGM, the authority of your proxy will be deemed to be revoked.

This Scheme Document is issued jointly by Genesis Ventures Limited and HKC (Holdings) Limited.

In case of any inconsistency, the English language text of this Scheme Document and the accompanying forms of proxy shall prevail over the Chinese language text.

• For identification purposes only

1 April 2021

PRECAUTIONARY MEASURES FOR THE COURT MEETING AND THE SGM

Please see the notices of Court Meeting and SGM set out in Appendices V and VI of this Scheme Document for measures being taken with a view to preventing and controlling the spread of the Coronavirus Disease 2019 (''COVID-19'') at the Court Meeting and the SGM, including:

. compulsory body temperature checks will be conducted for every Shareholder, proxy or other attendee at each entrance of the meeting venue. Any person with a body temperature of over 37.3 degrees Celsius may be denied entry into the meeting venue or be required to leave the meeting venue, but will be able to vote by submitting a voting slip to the scrutineer at the entrance of the venue;

. each attendee is required to wear a surgical face mask properly throughout the meeting and inside the meeting venue, and seating in the venue will also be arranged so as to allow for appropriate social distancing;

. no refreshment will be served, and there will be no corporate gift; and

. each attendee may be asked whether (a) he/she travels outside of Hong Kong within the 14-day period immediately before the Court Meeting/SGM; and (b) he/she is subject to any Hong Kong Government prescribed quarantine. Anyone who responds positively to any of these questions may be denied entry into the meeting venue or be required to leave the meeting venue, but will be able to vote by submitting a voting slip to the scrutineer at the entrance of the venue.

Any person who does not comply with the precautionary measures or is subject to any Hong Kong Government prescribed quarantine may be denied entry into the meeting venue, but will be able to vote by submitting a voting slip to the scrutineer at the entrance of the venue to the extent practicable. In view of the Regulation and the requirements for social distancing to ensure the health and safety of attendees, there will be limited capacity for Shareholders to attend the Court Meeting and/or the SGM and only Shareholders and/or their proxies and relevant Court Meeting and/or SGM staff will be allowed entry into Court Meeting and/or SGM venue and the attending Shareholders (or their proxies) will be admitted to the main conference room at the venue on a ''first-come-first-served'' basis, whereas other attending Shareholders (or their proxies) will be accommodated in other room(s) at the venue after the main conference room is fully occupied. The Company may limit the number of attendees at the Court Meeting and/or the SGM as may be necessary to avoid overcrowding.

The Company reminds all Shareholders that physical attendance in person at the Court Meeting and/or the SGM is not necessary for the purpose of exercising voting rights. Shareholders may appoint the chairman of the Court Meeting or of the SGM (as the case may be) as their proxy to vote on the relevant resolution(s) instead of attending the meetings in person by completing and returning the forms of proxy enclosed with this Scheme Document.

The Company will closely monitor and ascertain the regulations and measures introduced or to be introduced by the Hong Kong Government, and if necessary, will make further announcements in case of any update regarding the precautionary measures to be carried out at the Court Meeting and/or the SGM.

- i -

IMPORTANT NOTICE AND ACTIONS TO BE TAKEN

ACTIONS TO BE TAKEN BY SHAREHOLDERS

A pink form of proxy for use in connection with the Court Meeting and a white form of proxy for use in connection with the SGM are enclosed with this Scheme Document sent to the Shareholders.

Whether or not you are able to attend the Court Meeting and/or the SGM, you are strongly urged to complete and sign the enclosed pink form of proxy in respect of the Court Meeting and the enclosed white form of proxy in respect of the SGM in accordance with the instructions printed on them respectively, and to deposit them at the Share Registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong.

In order to be valid, the pink form of proxy for use in connection with the Court Meeting should be lodged not later than 10 : 00 a.m. on Wednesday, 21 April 2021. The pink form of proxy may alternatively be handed to the chairman of the Court Meeting at the Court Meeting who shall have absolute discretion as to whether or not to accept it. The white form of proxy for use in connection with the SGM must be lodged not later than 10 : 30 a.m. on Wednesday, 21 April 2021, failing which it will not be valid. The completion and return of the relevant form of proxy will not preclude you from attending and voting in person at the relevant meeting or any adjournment thereof should you so wish and in such event, the relevant form of proxy will be revoked by operation of law.

If you do not appoint a proxy and you do not attend and vote at the Court Meeting and/or the SGM, you will still be bound by the outcome of the Court Meeting and/or the SGM. You are therefore strongly encouraged to attend and vote at the Court Meeting and/ or the SGM in person or by proxy.

Voting at the Court Meeting and the SGM will be taken by poll.

Announcement of results of Court Meeting and the SGM

An announcement will be made by the Company in relation to the results of the Court Meeting and the SGM. If all of the requisite resolutions are passed at those meetings, further announcement(s) will be made in relation to, among other things, the results of the Court Hearing of the petition to sanction the Scheme, the Effective Date and the date of withdrawal of the listing of the Shares on the Stock Exchange.

Shareholders who have sold/transferred Shares should hand this Scheme Document and forms of proxy to purchaser/transferee

If you have sold or transferred all of your Shares, you should at once hand this Scheme Document and the accompanying forms of proxy to the purchaser or the transferee or to the licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

- ii -

IMPORTANT NOTICE AND ACTIONS TO BE TAKEN

Shareholders and potential investors of the Company are advised to read this Scheme Document carefully, in particular, (i) the letter from the Independent Board Committee in Part IV of this Scheme Document; and (ii) the letter from Anglo Chinese in Part V of this Scheme Document, before voting at the Court Meeting and/or the SGM.

Actions to be taken by Beneficial Owners whose Shares are deposited in CCASS

If you are a Beneficial Owner whose Shares are deposited in CCASS and registered under the name of HKSCC Nominees Limited, you should, unless you are admitted to participate in CCASS as an Investor Participant:

1. contact your broker, custodian, nominee or other relevant person who is, or has in turn deposited such Shares with, a CCASS participant regarding voting instructions to be given to such persons; or
2. arrange for some or all of such Shares to be withdrawn from CCASS and transferred into your own name by lodging all the transfer documents with relevant share certificates on or before 4 : 30 p.m. on Monday, 19 April 2021 with Computershare Hong Kong Investor Services Limited, if you wish to attend and vote (in person or by proxy) at the Court Meeting and/or the SGM.

The procedures for voting by the Investor Participants and other CCASS Participants with respect to Shares registered under the name of HKSCC Nominees Limited shall be in accordance with the ''Operating Guide for Investor Participants'', the ''General Rules of CCASS'' and the ''CCASS Operational Procedures'' in effect from time to time.

Actions to be taken by Beneficial Owners whose Shares are held by a Registered Owner other than HKSCC Nominees Limited

No person shall be recognised by the Company as holding any Shares on trust.

If you are a Beneficial Owner whose Shares are registered in the name of a nominee, trustee, depositary or any other authorised custodian or third party (other than HKSCC Nominees Limited), you should contact such Registered Owner to give instructions to and/ or to make arrangements with such Registered Owner as to the manner in which the Shares beneficially owned by you should be voted at the Court Meeting and/or the SGM.

If you are a Beneficial Owner who wishes to attend and vote at the Court Meeting and/ or the SGM personally, you should:

1. contact the Registered Owner directly to make the appropriate arrangements with the Registered Owner to enable you to attend and vote at the Court Meeting and/ or the SGM and, for such purpose, the Registered Owner may appoint you as its proxy; or

- iii -

IMPORTANT NOTICE AND ACTIONS TO BE TAKEN

1. arrange for some or all of the Shares registered in the name of the Registered Owner to be transferred into your own name by lodging all the transfer documents with relevant share certificates on or before 4 : 30 p.m. on Monday, 19 April 2021 with Computershare Hong Kong Investor Services Limited, if you wish to attend and vote (in person or by proxy) at the Court Meeting and/or the SGM.

Instructions to and/or arrangements with the Registered Owner should be given or made in advance of the relevant latest time for the lodgement of forms of proxy in respect of the Court Meeting and the SGM in order to provide the Registered Owner with sufficient time to complete his/her/its forms of proxy accurately and to submit them by the deadline. To the extent that any Registered Owner requires instructions from or arrangements to be made with any Beneficial Owner at a particular date or time in advance of the relevant latest time for the lodgement of forms of proxy in respect of the Court Meeting and the SGM, any such Beneficial Owner should comply with the requirements of such Registered Owner.

EXERCISE YOUR RIGHT TO VOTE

If you are a Shareholder or a Beneficial Owner whose Shares are held by a Registered Owner (including HKSCC Nominees Limited), you are strongly encouraged to exercise your right to vote (in the case of a Shareholder) or to give instructions to the relevant Registered Owner (in the case of a Beneficial Owner) to vote in person or by proxy at the Court Meeting and/or the SGM. If you keep any Shares in a share lending programme, you are encouraged to recall any outstanding Shares on loan to avoid market participants using borrowed stock to vote.

If you are a Beneficial Owner whose Shares are deposited in CCASS, you are strongly encouraged to withdraw at least some of your Shares from CCASS and become a registered holder of such Shares and exercise your right to vote, in person or by proxy, at the Court Meeting and/or the SGM. You should contact your broker, custodian, nominee or other relevant person in advance of the latest time for lodging transfers of Shares into your name so as to qualify to attend and vote at the Court Meeting and/or the SGM, in order to provide such broker, custodian, nominee or other relevant person with sufficient time to withdraw the Shares from CCASS and register them in your name.

In respect of any Shares of which you are the Beneficial Owner and which remain in CCASS, you are encouraged to contact your broker, custodian, nominee or other relevant person regarding voting instructions in relation to the manner in which those Shares should be voted at the Court Meeting and/or the SGM without delay.

Only Disinterested Scheme Shareholders whose Scheme Shares are registered in their own names in the register of members of the Company on the Meeting Record Date may vote at the Court Meeting and will be counted as members of the Company for the purpose of calculating whether or not a majority in number of members of the Company have approved the Scheme at the Court Meeting under Section 99 of the Companies Act. In view of the interest of the Offeror and the Offeror Concert Parties, any and all Scheme Shareholders who are acting in concert with the Offeror are not entitled to, and will not, vote at the Court Meeting in respect of the resolution to approve the Scheme to be proposed at the Court Meeting. Accordingly, the 29,982,969 Scheme Shares held by the Offeror Concert Parties will not be voted at the Court Meeting. Any other Scheme Shares held by any other person acting in

- iv -

IMPORTANT NOTICE AND ACTIONS TO BE TAKEN

concert with the Offeror will also not be voted at the Court Meeting. In accordance with the direction from the Court, HKSCC Nominees Limited will be counted as one Scheme Shareholder and may vote for or against the Scheme according to the majority of voting instructions as represented by the Scheme Shares it receives. The number of votes cast in favour of the Scheme and the number of CCASS Participants on whose instructions they are cast and the number of votes cast against the Scheme and the number of CCASS Participants on whose instructions they are cast will be disclosed to the Court and may be taken into account in deciding whether or not the Court should exercise its discretion to sanction the Scheme. Beneficial Owners who wish to individually vote or be counted for purposes of calculating whether or not a majority in number of members of the Company have approved the Scheme at the Court Meeting under Section 99 of the Companies Act should make arrangements to be registered as a members of the Company in their own names by lodging all the transfer documents with relevant share certificates on or before 4 : 30 p.m. on Monday, 19 April 2021 with Computershare Hong Kong Investor Services Limited.

If you are a Registered Owner holding Shares on behalf of Beneficial Owners, you should inform the relevant Beneficial Owner(s) about the importance of exercising their right to vote and that Beneficial Owners should consider transferring some or all their Shares into their names if they wish to be counted individually for the purposes of the headcount test.

NOTICE TO OVERSEAS SCHEME SHAREHOLDERS

The making of the Proposal to certain Scheme Shareholders may be subject to the laws of jurisdictions other than Hong Kong. Scheme Shareholders and Beneficial Owners residing in jurisdictions other than Hong Kong should inform themselves about and observe all legal and regulatory requirements applicable to them. It is the responsibility of Scheme Shareholders and Beneficial Owners to satisfy themselves as to the full observance of the laws of the relevant jurisdictions applicable to them in connection with the Proposal, as the case may be, including obtaining any governmental, exchange control or other consents which may be required, and compliance with other necessary formalities and the payment of any issue, transfer or other taxes due in such jurisdictions.

Any action taken by such Scheme Shareholders or Beneficial Owners in respect of the Proposal will be deemed to constitute a representation and warranty from such persons to the Company and the Offeror that those local laws and requirements have been complied with.

Scheme Shareholders and Beneficial Owners residing in jurisdictions other than Hong Kong should consult their professional advisers if they are in any doubt as to the potential applicability of, or consequence under, any provision of law or regulation or judicial or regulatory decisions or interpretations in any jurisdictions, territory or locality therein or thereof and, in particular, whether there will be any restriction or prohibition on the acquisition, retention, disposal or otherwise with respect to the Shares, as the case may be.

Overseas Scheme Shareholders and Beneficial Owners are advised to read the section headed ''17. Overseas Scheme Shareholders'' in the Explanatory Statement in Part VI of this Scheme Document for further information.

- v -

IMPORTANT NOTICE AND ACTIONS TO BE TAKEN

PAST PERFORMANCE AND FORWARD-LOOKING STATEMENTS

The performance and the results of operations of the Group contained in this Scheme Document are historical in nature and past performance is not a guarantee of the future results of the Group. This Scheme Document may contain forward-looking statements and opinions that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements and opinions and you should not place undue reliance on such forward-looking statements and opinions. Subject to the requirements of applicable laws, rules and regulations, including the Takeovers Code, none of the Offeror, the Company, Somerley, Anglo Chinese, any of their respective directors, officers, employees, agents, affiliates or advisers or any other person involved in the Proposal assumes any obligation to correct or update the forward-looking statements or opinions contained in this Scheme Document.

- vi -

LETTER FROM THE OFFEROR

1 April 2021

To the Shareholders

Dear Sir or Madam,

As a director of the Offeror, which is a company ultimately beneficially owned as to 50% by me and 50% by my wife, Mrs. OEI Valonia Lau, and your long-serving chief executive/chairman of the Company, I felt I should write you a personal note to explain why the Offeror is putting forward the Proposal to privatise the Company. This was a very difficult decision for me. The Company has approximately 1,600 registered Shareholders, many of which are long-standing Shareholders and I have greatly appreciated your loyalty and support all along. I have made significant efforts throughout my time with the Company to improve the value of the Company and to increase liquidity so that Shareholders can realise the value of their Shares when they decide to exit. I would like to take this opportunity to recap key initiatives I have taken to try to develop the Company and why I (through the Offeror) put forward the present Proposal to you.

In 2004, after some years of losses, the Company encountered severe financial difficulties and was in need of a 'white knight'. Some HK$2.2 billion of indebtedness had to be restructured and by in effect converting much of this debt to equity, I became the ultimate controlling shareholder of the Company. I was an early believer in property development in the PRC and had built up the Company's interests in that field. In 2007, I made substantial Share subscriptions to show my commitment to the Company. I also took steps to introduce noted international investors, Cerberus Asia Capital Management, LLC and Penta Investment Advisers Ltd., to the Company, and both became substantial Shareholders. My hope was, among other things, that this would attract institutional investors and achieve a wider shareholder base for the Company. At the same time, I decided to diversify the Company's activities into renewable energy (wind farms), and the Company became one of the companies listed in Hong Kong to embrace green policies. In 2010, I attempted to make the Group's structure more attractive by effectively spinning off our renewable energy assets. Despite these steps, my attempts to increase the value and trading liquidity of the Shares did not succeed. In 2015, I bought out Cerberus Asia Capital Management, LLC which triggered a mandatory general offer under the Takeovers Code, at a price equivalent to HK$6.25 per Share (calculated based on the Share consolidation which was implemented by the Company on 7 October 2016).

The mandatory general offer had the unintended effect of reducing the number of Shares in public hands. In recent years, I have tried to continue my support by purchasing Shares myself and sponsoring measures introduced by the Board for Share buyback which are generally considered shareholder friendly and which I hoped would provide a source of liquidity and strength for the Share price. Unfortunately, these efforts have achieved only intermittent and short-lived success. I can no longer continue such measures in any significant manner as the number of Shares in public hands is now only approximately 0.24% above the minimum required level of 25%.

- vii -

LETTER FROM THE OFFEROR

Given these circumstances, I believe the Cancellation Price of HK$8.00 per Share, which is more than double the price level before the Proposal was announced, is an attractive exit opportunity for you. Uncertainties such as those created by the Sino-US tension and COVID-19 pandemic, as well as the Chinese government policies that restrict property developers, such as imposing limits on leverage that makes property development more difficult, continue to be discouraging factors, resulting in lower valuations for property developers listed in Hong Kong. I still believe the Company has a good future but I cannot predict how long the present difficulties will last.

For these reasons, I have decided, as your chairman and controlling shareholder of the Company, to put forward the Proposal. After the privatisation, I believe the Company will have greater flexibility to deal with its commercial challenges and will save on administrative costs. I have no intention to list the Company on any other exchange.

As this is a more personal note, I urge you to read carefully the formal advice given to you by the Independent Board Committee and the Independent Financial Adviser set out in the Scheme Document.

Thank you again for your continuous support!

Yours faithfully,

For and on behalf of

GENESIS VENTURES LIMITED

OEI Kang, Eric

Director

- viii -

- ix -

In this Scheme Document, the following expressions have the meanings set out below unless the context requires otherwise.

- 1 -

- 2 -

- 3 -

- 4 -

- 5 -

• For identification purposes only

- 6 -

The timetable set out below is indicative only and is subject to change. Any changes to the timetable will be jointly announced by the Offeror and the Company. All references in this Scheme Document to times and dates are references to Hong Kong times and dates, other than references to the expected date of the Court Hearing and the Effective Date which are the relevant times and dates in Bermuda. For reference only, Bermuda time is 11 hours behind Hong Kong time as at the date of this Scheme Document.

Hong Kong time (unless otherwise stated)

Date of despatch of this Scheme Document . . . . . . . . . . . . . . . . Thursday, 1 April 2021

Latest time for lodging transfers of Shares to qualify for the entitlement to attend and vote

at the Court Meeting and the SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 : 30 p.m. on Monday, 19 April 2021

Closure of the register of members of the Company for

determining entitlement to attend and vote

at the Court Meeting and the SGM(1) . . . . . . . . . . . . from Tuesday, 20 April 2021 to Friday, 23 April 2021 (both days inclusive)

Latest time for lodging forms of proxy in respect of:

Court Meeting(2) . . . . . . . . . . . . . . . . . . . . . 10 : 00 a.m. on Wednesday, 21 April 2021

SGM(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 : 30 a.m. on Wednesday, 21 April 2021

Meeting Record Date for determining the entitlement to attend and vote at the Court Meeting and the

SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 23 April 2021

Court Meeting(2) & (3) . . . . . . . . . . . . . . . . . . . . . . 10 : 00 a.m. on Friday, 23 April 2021

SGM(2) & (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 : 30 a.m. on Friday, 23 April 2021 (or immediately after the conclusion or adjournment of the Court Meeting)

Announcement of the results of the Court Meeting and the SGM, published on

the website of the Stock Exchange. . . . . . . . . . . . . . . . . . . . not later than 7 : 00 p.m. on Friday, 23 April 2021

Expected latest time for trading in

the Shares on the Stock Exchange . . . . . . . . . . . 4 : 10 p.m. on Monday, 26 April 2021

- 7 -

Hong Kong time (unless otherwise stated)

Latest time for lodging transfers of Shares in order to qualify for entitlements under the Scheme and

the Second Interim Dividend . . . . . . . . . . . . . . . 4 : 30 p.m. on Thursday, 6 May 2021

Closure of the register of

members for determining the entitlements under the Scheme

and the Second Interim Dividend(4) . . . . . . . . . . . . from Friday, 7 May 2021 onwards

Scheme Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 14 May 2021

Dividend Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 14 May 2021

Court Hearing of the petition to

the sanction of the Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 14 May 2021 (Bermuda time)

Announcement of (1) the results of the Court Hearing,

1. the expected Effective Date and (3) the expected date of the withdrawal of the listing of the Shares on the Stock Exchange, published on the Stock

Exchange's website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .on or before 8 : 30 a.m. on Monday, 17 May 2021

Effective Date(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 18 May 2021

(Bermuda time)

Announcement of (1) the Effective Date and

1. the withdrawal of listing of Shares on the Stock Exchange, published on the

Stock Exchange's website . . . . . . . . . . . . . . . . . . . . . . . . . . . no later than 8 : 30 a.m. on Thursday, 20 May 2021

Expected withdrawal of listing of Shares

on the Stock Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 : 00 p.m. on Thursday, 20 May 2021

Latest date to despatch:

. Cheques for payment of the Cancellation

Price to the Disinterested Scheme

Shareholders(6) . . . . . . . . . . . . . . . . . . . . . . . . . on or before Friday, 28 May 2021

- 8 -

Hong Kong time (unless otherwise stated)

Expected date to despatch:

. Cheques for payment of the

Second Interim Dividend to

the Shareholders(7) . . . . . . . . . . . . . . . . . . . . . . on or before Friday, 28 May 2021

Notes:

1. The register of members of the Company will be closed during such period for the purpose of determining the entitlement of the Scheme Shareholders to attend and vote at the Court Meeting and of the Shareholders to attend and vote at the SGM. For the avoidance of doubt, this period of closure is not for determining entitlements under the Scheme.
2. The pink form of proxy in respect of the Court Meeting and the white form of proxy in respect of the SGM should be completed and signed in accordance with the instructions respectively printed thereon and should be lodged with the Share Registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong by the times and dates stated above. In the case of the pink form of proxy in respect of the Court Meeting, it may alternatively be handed to the Chairman of the Court Meeting at the Court Meeting (who shall have absolute discretion as to whether or not to accept it) if it is not so lodged. The white form of proxy in respect of the SGM will not be valid if it is not so lodged. If more than one proxy form for the Court Meeting is submitted by a Scheme Shareholder and the voting instructions require the proxies to vote both FOR and AGAINST the Scheme, the proxy forms will not be accepted. If more than one proxy form for the Court Meeting is submitted by a Scheme Shareholder and the voting instructions require the proxies to vote either FOR or AGAINST the Scheme but not both FOR and AGAINST the Scheme, the chairman of the Court Meeting shall have absolute discretion as to whether or not to accept those proxy forms. Completion and return of a form of proxy for the Court Meeting or the SGM will not preclude a Scheme Shareholder or a Shareholder (as the case may be) from attending and voting in person at the relevant meeting if he, she or it so wishes. In such event, the authority of your proxy will be deemed to be revoked.
3. If a tropical cyclone warning signal No.8 or above is or is expected to be hoisted or ''extreme conditions'' caused by super typhoons or a black rainstorm warning signal is or is expected to be in force at any time after 7 : 00 a.m. on the date of the Court Meeting and the SGM, the Court Meeting and the SGM will be postponed. The Company will post an announcement on the respective websites of Hong Kong Exchanges and Clearing Limited and the Company to notify the members of the date, time and venue of the rescheduled meetings.
4. The register of members of the Company will be closed during such period for the purpose of determining the Scheme Shareholders, who are qualified for entitlements under the Scheme and Shareholders, who are qualified for entitlements to the Second Interim Dividend.
5. The Scheme will become effective upon all the Conditions set out in the section headed ''3. Conditions to the Proposal and the Scheme'' in the Explanatory Statement in Part VI of this Scheme Document having been fulfilled or waived (as applicable). Shareholders will be advised by an announcement of the exact date upon which the Scheme becomes effective. The withdrawal of listing of Shares will take place following the Scheme becoming effective on the Effective Date and it is expected that the listing of Shares will be withdrawn at 4 : 00 p.m. on Thursday, 20 May 2021. All of the Conditions will have to be fulfilled or waived (as applicable) on or before 30 September 2021 (or such later date as the Offeror and the Company may agree or, to the extent applicable, as the Court may direct and, in all cases, as permitted by the Executive), failing which the Proposal and the Scheme will lapse.

- 9 -

1. Cheques for entitlements of Scheme Shareholders will be despatched by ordinary post in postage pre-paid envelopes addressed to Scheme Shareholders at their respective addresses as appearing in the register of members of the Company as at the Scheme Record Date or, in the case of joint holders, at the address appearing in the register of members of the Company as at the Scheme Record Date of the joint holder whose name then stands first in the register of members of the Company in respect of the relevant joint holding as soon as possible but in any event within 7 business days (as defined in the Takeovers Code) following the Effective Date. Cheques shall be posted at the risk of the addressees and none of the Offeror, the Company, Somerley, Anglo Chinese and the Share Registrar and their respective directors, employees, officers, agents, advisers, associates and affiliates and any other persons involved in the Proposal shall be responsible for any loss or delay in transmission.
2. The Second Interim Dividend is expected to be paid within 30 days of the Dividend Record Date to the Shareholders whose names appear on the register of members of the Company on the Dividend Record Date.

- 10 -

(Incorporated in Bermuda with limited liability)

(Stock code: 190)

(website: www.hkcholdings.com)

1. PROPOSED PRIVATISATION OF HKC (HOLDINGS) LIMITED BY

GENESIS VENTURES LIMITED

BY WAY OF A SCHEME OF ARRANGEMENT

UNDER SECTION 99 OF THE COMPANIES ACT 1981 OF BERMUDA

1. PROPOSED DECLARATION OF SECOND INTERIM DIVIDEND AND

1. PROPOSED WITHDRAWAL OF LISTING OF HKC (HOLDINGS) LIMITED

1. INTRODUCTION

On 17 January 2021, the Offeror and the Company jointly announced that on 12

January 2021, the Offeror requested the Board to put forward the Proposal to the Scheme Shareholders for the privatisation of the Company by way of a scheme of arrangement under Section 99 of the Companies Act.

• For identification purposes only

- 11 -

The purpose of this Scheme Document is to provide you with further information regarding the Proposal and the expected timetable as well as to give you notices of the Court Meeting and the SGM (together with proxy forms in relation thereto). Your attention is drawn to the following sections of this Scheme Document: (i) the letter from the Independent Board Committee set out in Part IV; (ii) the letter from Anglo Chinese set out in Part V; (iii) the Explanatory Statement set out in Part VI; and (iv) the terms of the Scheme set out in Appendix IV to this Scheme Document.

2. TERMS OF THE PROPOSAL The Scheme

If the Proposal is approved and implemented, all the Scheme Shares will be cancelled and extinguished in exchange for the Cancellation Price of HK$8.00 in cash for every Scheme Share cancelled. Under the Scheme, the total consideration payable for the Scheme Shares will be payable by the Offeror.

The Cancellation Price will not be increased, and the Offeror does not reserve the right to do so.

The Cancellation Price of HK$8.00 per Scheme Share represents:

1. a premium of approximately 120.39% over the closing price of HK$3.63 per Share or a premium of approximately 128.57% over the ex-Second Interim Dividend closing price of HK$3.50 per Share, as quoted on the Stock Exchange on the Last Trading Date;
2. a premium of approximately 122.22% over the average closing price of HK$3.60 per Share or a premium of approximately 130.55% over the ex- Second Interim Dividend average closing price of HK$3.47 per Share, based on the daily closing prices as quoted on the Stock Exchange over the 5 trading days up to and including the Last Trading Date;
3. a premium of approximately 119.78% over the average closing price of HK$3.64 per Share or a premium of approximately 127.92% over the ex- Second Interim Dividend average closing price of HK$3.51 per Share, based on the daily closing prices as quoted on the Stock Exchange over the 30 trading days up to and including the Last Trading Date;
4. a premium of approximately 109.42% over the average closing price of HK$3.82 per Share or a premium of approximately 116.80% over the ex- Second Interim Dividend average closing price of HK$3.69 per Share, based on the daily closing prices as quoted on the Stock Exchange over the 60 trading days up to and including the Last Trading Date;

- 12 -

1. a premium of approximately 78.97% over the average closing price of HK$4.47 per Share or a premium of approximately 84.33% over the ex- Second Interim Dividend average closing price of HK$4.34 per Share, based on the daily closing prices as quoted on the Stock Exchange over the 180 trading days up to and including the Last Trading Date;
2. a premium of approximately 5.12% over the closing price of HK$7.61 per Share or a premium of approximately 6.95% over the ex-Second Interim Dividend closing price of HK$7.48 per Share, as quoted on the Stock Exchange on the Latest Practicable Date; and
3. a discount of approximately 70.2% to the audited consolidated net asset value attributable to Shareholders per Share of approximately HK$26.81 as at 31 December 2020 or a discount of approximately 70.0% to the unaudited consolidated net asset value attributable to Shareholders per Share of approximately HK$26.68 as at 31 December 2020 (having excluded the Second Interim Dividend) or a discount of approximately 68.3% to the Reassessed NAV per Share (having excluded the Second Interim Dividend).

As stated in the Explanatory Statement in Part VI of this Scheme Document, the Cancellation Price has been determined after taking into account, among others, the prices and the discounts to NAV per Share at which the Shares have been traded on the Stock Exchange, and pricing premiums for privatisation transactions of companies listed on the Stock Exchange. Shareholders are advised to read the Explanatory Statement in Part VI of this Scheme Document for further details.

3. FINANCIAL RESOURCES

As at the Latest Practicable Date, the total issued share capital of the Company comprises 511,074,246 Shares. 147,149,308 Scheme Shares are currently in issue, representing approximately 28.79% of the issued share capital of the Company.

On the assumption that there is no other change in the shareholding structure of the Company before completion of the Proposal, the maximum amount of cash consideration payable to effect the Proposal on the basis described above is approximately HK$1.18 billion.

The Offeror intends to finance the cash required for the Proposal by its internal cash resources.

Somerley, the financial adviser to the Offeror, is satisfied that sufficient financial resources are available to the Offeror to satisfy the maximum amount of cash consideration required to effect the Proposal.

- 13 -

4. CONDITIONS OF THE PROPOSAL

The Proposal is, and the Scheme will become effective and binding on the Company and all Scheme Shareholders, subject to the fulfilment or waiver (as applicable) of all the Conditions on or before 30 September 2021 (or such later date as the Offeror and the Company may agree or, to the extent applicable, as the Court may direct and, in all cases, as permitted by the Executive), failing which the Proposal and the Scheme will lapse.

For details of the Conditions, your attention is drawn to the section headed ''3. Conditions to the Proposal and the Scheme'' in the Explanatory Statement in Part VI of this Scheme Document.

5. SECOND INTERIM DIVIDEND

On 13 January 2021, the Board resolved to declare the payment to the Shareholders of the Second Interim Dividend of 13 HK cents per Share in lieu of a final dividend for the year ended 31 December 2020. The Second Interim Dividend will be paid to the Shareholders whose names appear on the register of members of the Company on the Dividend Record Date. The Second Interim Dividend will be payable to the Shareholders within 30 days of the Dividend Record Date. The Second Interim Dividend is not conditional on the Proposal having become effective and will not be deducted from the Cancellation Price.

Apart from the Second Interim Dividend, the Company does not expect to declare any other dividend or other distribution on or before the Effective Date.

- 14 -

6. SHAREHOLDING STRUCTURE OF THE COMPANY

The table below sets out the shareholding structure of the Company as at the Latest Practicable Date and immediately upon the Scheme becoming effective, assuming that there are no other changes in the shareholding of the Company between the Latest Practicable Date and the Scheme Record Date:

- 15 -

Notes:

1. The Offeror is ultimately beneficially owned as to 50% by Mr. OEI and as to the remaining 50% by his wife, Mrs. OEI Valonia Lau.
2. Each of Creator Holdings Limited and Genesis Capital Group Limited is ultimately beneficially wholly-owned by Mr. OEI.
3. Mr. OEI and his wife, Mrs. OEI Valonia Lau, being the ultimate beneficial joint owners of the Offeror, are Offeror Concert Parties. Mr. OEI Tjie Goan is the father of Mr. OEI and is therefore deemed to be an Offeror Concert Party, and his Shares are held through a BVI company. The 22,989,500 Shares held by Mr. OEI and his wife, Mrs. OEI Valonia Lau, and Mr. OEI Tjie Goan will form part of the Scheme Shares and will be cancelled upon the Scheme becoming binding and effective in accordance with its terms.
4. Mr. LEE Shiu Yee, Daniel and Mr. WONG Jake Leong, Sammy are Directors and are therefore deemed to be Offeror Concert Parties. The Shares held by Mr. LEE Shiu Yee, Daniel and Mr. WONG Jake Leong, Sammy will form part of the Scheme Shares and will be cancelled upon the Scheme becoming binding and effective in accordance with its terms.
5. Due to rounding, the percentages may not add up to the total.

7. REASONS FOR AND BENEFITS OF THE PROPOSAL

Your attention is drawn to the section headed ''9. Reasons for and benefits of the

Proposal'' in the Explanatory Statement in Part VI of this Scheme Document.

8. INFORMATION ON THE COMPANY AND THE OFFEROR The Company

The Company is an exempted company incorporated in Bermuda with limited liability, the Shares of which have been listed on the Main Board of the Stock Exchange (stock code: 190). The Group is principally engaged in the business of property development and investment mainly in the PRC. It also invests, through its

56.00% owned subsidiary, China Renewable Energy Investment Limited (stock code: 987), in renewable energy projects in the PRC.

The Offeror

The Offeror is a company incorporated in the BVI and is an investment holding company. The Offeror is ultimately beneficially owned as to 50% by Mr. OEI, who is the chairman and chief executive officer of the Company, and as to the remaining 50% by his wife, Mrs. OEI Valonia Lau. The main assets of the Offeror are the Shares it holds in the Company as well as other listed investments.

The directors of the Offeror are Mr. OEI and Mrs. OEI Valonia Lau.

- 16 -

9. INTENTIONS OF THE OFFEROR AND THE GROUP

Your attention is drawn to the section headed ''10. Intentions of the Offeror with regard to the Group'' in the Explanatory Statement in Part VI of this Scheme Document.

10. INDEPENDENT BOARD COMMITTEE

The Board has established the Independent Board Committee, which comprises all the following independent non-executive Directors (except for Mr. CHENG Yuk Wo, who is also an independent non-executive director of Somerley Capital Holdings Limited (stock code: 8439), which is the holding company of Somerley, the financial adviser to the Offeror), namely, Mr. Albert Thomas DA ROSA, Junior and Mr. VOON Hian-fook, David, who are not interested in the Proposal, to make a recommendation to the Disinterested Scheme Shareholders as to whether the terms of the Proposal are, or are not, fair and reasonable and whether to vote in favour of the Scheme at the Court Meeting and whether to vote in favour of the necessary resolutions to implement the Proposal at the SGM.

The full text of the letter from the Independent Board Committee is set out in the ''Letter from the Independent Board Committee'' in Part IV of this Scheme Document.

11. INDEPENDENT FINANCIAL ADVISER

The Company has appointed Anglo Chinese as the Independent Financial Adviser to advise the Independent Board Committee in connection with the Proposal and as to voting. Such appointment has been approved by the Independent Board Committee.

The full text of the letter from the Independent Financial Adviser is set out in the ''Letter from Anglo Chinese'' in Part V of this Scheme Document.

12. WITHDRAWAL OF LISTING OF THE SHARES

Upon the Scheme becoming effective, all Scheme Shares will be cancelled and the share certificates in respect of the Scheme Shares will thereafter cease to have effect as documents or evidence of title.

The Company will make an application for the listing of the Shares to be withdrawn from the Stock Exchange in accordance with Rule 6.15(2) of the Listing Rules, subject to the Scheme becoming effective, with effect from the Effective Date.

- 17 -

13. IF THE PROPOSAL IS NOT APPROVED OR LAPSES

The Scheme will lapse if any of the Conditions has not been fulfilled or waived, as applicable, on or before the Long Stop Date. The listing of the Shares on the Stock Exchange will not be withdrawn if the Scheme does not become effective or the Proposal otherwise lapses, in which case the Board expects that the Company will continue to meet the minimum public float requirements under the Listing Rules given that there will be no cancellation of Scheme Shares and assuming there is no change in the shareholding of the Company.

If the Scheme is not approved or the Proposal otherwise lapses, there are restrictions under the Takeovers Code on making subsequent offers, to the effect that neither the Offeror nor any person who acted in concert with it in the course of the Proposal (nor any person who is subsequently acting in concert with any of them) may, within 12 months from the date on which the Scheme is not approved or the Proposal otherwise lapses, announce an offer or possible offer for the Company, except with the consent of the Executive. The Offeror has no intention to seek such consent.

If the Independent Board Committee or the Independent Financial Adviser does not recommend the Proposal, and the Scheme is not approved, all expenses incurred by the Company in connection therewith shall be borne by the Offeror in accordance with Rule 2.3 of the Takeovers Code. Since the Independent Board Committee and the Independent Financial Adviser have both recommended the Proposal, the Company and the Offeror have agreed that each party shall bear their own costs, charges and expenses of and incidental to the Scheme.

14. COURT MEETING AND SGM

Notices convening the Court Meeting and the SGM to be held at Lower Level 1, Kowloon Shangri-La, 64 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on Friday, 23 April 2021 at 10 : 00 a.m. and 10 : 30 a.m. (or immediately after the conclusion or adjournment of the Court Meeting), respectively, are set out in Appendix V and Appendix VI to this Scheme Document.

The Court has directed the Court Meeting to be convened and held for the purpose of considering and, if thought fit, approving (with or without modifications) the Scheme. The Scheme is subject to the approval by the Scheme Shareholders at the Court Meeting in the manner referred to in Conditions (a) and (b) in the section headed ''3. Conditions to the Proposal and the Scheme'' in the Explanatory Statement in Part VI of this Scheme Document. The Scheme must also be sanctioned by the Court as required by Section 99 of the Companies Act.

Immediately after the conclusion or adjournment of the Court Meeting, the SGM will be held for the purpose of considering and, if thought fit, passing a special resolution for the implementation of the Proposal in the manner referred to in Condition (c) in the section headed ''3. Conditions to the Proposal and the Scheme'' in the Explanatory Statement in Part VI of this Scheme Document.

- 18 -

An announcement will be made by the Company in relation to the results of the Court Meeting and the SGM. Such announcement will contain the information as required by Rule 19.1 of the Takeovers Code.

15. OVERSEAS SCHEME SHAREHOLDERS

Your attention is drawn to the section headed ''17. Overseas Scheme Shareholders'' in the Explanatory Statement in Part VI of this Scheme Document.

16. ACTIONS TO BE TAKEN

Your attention is drawn to the section headed ''IMPORTANT NOTICE AND ACTIONS TO BE TAKEN'' of this Scheme Document for details of the actions you should take as a Shareholder, as a Beneficial Owner whose Shares are held by a Registered Owner, or as a Beneficial Owner whose Shares are deposited in CCASS.

17. RECOMMENDATIONS

Your attention is drawn to (i) the letter from the Independent Board Committee in Part IV of this Scheme Document; and (ii) the letter from Anglo Chinese in Part V of this Scheme Document which sets out the factors and reasons taken into account by Anglo Chinese in arriving at its advice to the Independent Board Committee.

18. TAXATION AND INDEPENDENT ADVICE

Your attention is drawn to the section headed ''18. Taxation'' of the Explanatory Statement in Part VI of this Scheme Document.

It is emphasised that none of the Offeror, the Company, Somerley, Anglo Chinese nor any of their respective directors, officers or associates or any other person involved in the Proposal accepts responsibility or has any liability for any taxation effects on, or liabilities of, any persons as a result of their approval or disapproval of the Scheme. All Scheme Shareholders are recommended to consult their professional advisers if in any doubt as to the taxation implications of the Proposal.

- 19 -

19. FURTHER INFORMATION

You are urged to read the whole of this Scheme Document, in particular:

1. the letter from the Independent Board Committee in Part IV of this Scheme Document;
2. the letter from Anglo Chinese in Part V of this Scheme Document;
3. the Explanatory Statement in Part VI of this Scheme Document;
4. the Appendices to this Scheme Document;
5. the Scheme as set out in Appendix IV to this Scheme Document; and
6. the notice of Court Meeting and the notice of SGM as set out in Appendix V and Appendix VI to this Scheme Document.

In addition, a pink form of proxy for the Court Meeting and a white form of proxy for the SGM are enclosed with this Scheme Document.

Shareholders and potential investors of the Company should be aware that the Proposal is subject to the Conditions being fulfilled or waived (as applicable), and therefore the Proposal may or may not be implemented. Shareholders and potential investors of the Company should therefore exercise caution when dealing in the securities of the Company. Persons who are in doubt as to the action they should take should consult their stockbroker, bank manager, solicitor or other professional advisers.

Yours faithfully,

For and on behalf of

HKC (HOLDINGS) LIMITED

LEUNG Wing Sum, Samuel

Executive Director

- 20 -

(Incorporated in Bermuda with limited liability)

(Stock code: 190)

(website: www.hkcholdings.com)

1 April 2021

To the Disinterested Scheme Shareholders

Dear Sir or Madam,

1. PROPOSED PRIVATISATION OF HKC (HOLDINGS) LIMITED BY

GENESIS VENTURES LIMITED

BY WAY OF A SCHEME OF ARRANGEMENT

UNDER SECTION 99 OF THE COMPANIES ACT 1981 OF BERMUDA

1. PROPOSED DECLARATION OF SECOND INTERIM DIVIDEND AND

1. PROPOSED WITHDRAWAL OF LISTING OF HKC (HOLDINGS) LIMITED

We refer to the document dated 1 April 2021 jointly issued by the Offeror and the Company in relation to the Proposal (the ''Scheme Document''), of which this letter forms part. Terms defined in the Scheme Document shall have the same meanings in this letter unless the context otherwise requires.

We, being all the independent non-executive Directors who are not interested in the Proposal, have been appointed by the Board as members of the Independent Board Committee to give a recommendation to the Disinterested Scheme Shareholders in respect of the Proposal and as to voting.

Anglo Chinese Corporate Finance, Limited (''Anglo Chinese'') has been appointed, with our approval, as the Independent Financial Adviser to advise us in respect of the Proposal and as to voting. The details of its advice and the principal factors taken into consideration in arriving at its recommendations are set out in the ''Letter from Anglo Chinese'' in Part V of the Scheme Document.

• For identification purposes only

- 21 -

Having considered the terms of the Proposal and having taken into account the advice of Anglo Chinese, and in particular, the factors, reasons and recommendations set out in the letter from Anglo Chinese, we consider that the terms of the Proposal are fair and reasonable so far as the Disinterested Scheme Shareholders are concerned.

Accordingly, we recommend that:

1. the Disinterested Scheme Shareholders to vote IN FAVOUR OF the resolution to approve the Scheme at the Court Meeting; and
2. the Shareholders to vote IN FAVOUR OF the special resolution to approve the implementation of the Proposal at the SGM.

We draw the attention of the Disinterested Scheme Shareholders to (1) the letter from the Board as set out in Part III of the Scheme Document; (2) the letter from Anglo Chinese, which sets out the factors and reasons taken into account by the Independent Financial Adviser in arriving at its advice to the Independent Board Committee as set out in Part V of the Scheme Document; and (3) the Explanatory Statement as set out in Part VI of the Scheme Document.

Yours faithfully,

Independent Board Committee

- 22 -

The Independent Board Committee and

the Disinterested Scheme Shareholders of

HKC (Holdings) Limited

1 April 2021

Dear Sirs,

1. PROPOSED PRIVATISATION OF HKC (HOLDINGS) LIMITED BY GENESIS VENTURES LIMITED

BY WAY OF A SCHEME OF ARRANGEMENT

UNDER SECTION 99 OF THE COMPANIES ACT 1981 OF BERMUDA; AND

1. 1. PROPOSED WITHDRAWAL OF LISTING OF HKC (HOLDINGS) LIMITED
2. INTRODUCTION
   We refer to our appointment as the independent financial adviser to the Independent

Board Committee and the Disinterested Scheme Shareholders in relation to the Proposal, and such appointment has been approved by the Independent Board Committee in accordance with Rule 2.1 of the Takeovers Code. The terms defined in the Scheme Document of the Company dated 1 April 2021, of which this letter forms part, shall have the same meanings in this letter, unless the context otherwise requires.

The Independent Board Committee, which comprises all the following independent non-executive Directors (except for Mr. CHENG Yuk Wo, who is also an independent non- executive director of Somerley Capital Holdings Limited (stock code: 8439), which is the holding company of Somerley Capital Limited, the financial adviser to the Offeror), namely, Mr. Albert Thomas DA ROSA, Junior and Mr. VOON Hian-fook, David, who are not interested in the Proposal, has been formed to give a recommendation to the Disinterested Scheme Shareholders in respect of the Proposal and as to voting.

In formulating our opinion and recommendations, we have reviewed, amongst other things, (i) published information on the Group and China Renewable Energy Investment Limited (''CREI'') (stock code: 987), including their audited annual financial statements for the three financial years, the last of which ended on 31 December 2020; (ii) the consolidated management accounts of the Group for the one month ended 31 January 2021; (iii) the cashflow projections of the Group for the year ending 31 December 2021 and the five months ending 31 May 2022; (iv) the information in the Scheme Document; and (v) the past performance of the Shares. We consider the information we have reviewed is sufficient to

- 23 -

reach the conclusions set out in this letter and have no reason to doubt the truth, accuracy or completeness of the information provided to us by the Company, and have been advised by the Directors that, to the best of their knowledge, no material information has been omitted or withheld from the information supplied to us or the information relating to the Company referred to in the Scheme Document. We have relied on the information so provided to us and referred to in the Joint Announcement and the Scheme Document, and we have not verified it or conducted an independent investigation into the business and affairs of the Group.

Apart from normal professional fees for our services to the Company in connection with this appointment, no arrangement exists whereby we will receive any fees or benefits from the Group, CREI or any of their associates. As at the Latest Practicable Date, we did not have any relationship with, or interest in, the Company, CREI or any other parties that could reasonably be regarded as relevant to our independence. In the two years prior to the Latest Practicable Date, we have not previously acted as the independent financial adviser to the Company's and CREI's other transactions. Accordingly, we consider that we are independent pursuant to Rule 13.84 of the Listing Rules.

1. BACKGROUND OF THE PROPOSAL

On 17 January 2021, the Offeror and the Company jointly announced that on 12 January 2021, the Offeror requested the Board to put forward the Proposal to the Scheme Shareholders for the privatisation of the Company by way of a scheme of arrangement under Section 99 of the Companies Act.

Principal terms of the Proposal

If the Proposal is approved and implemented on the Effective Date:

1. all Scheme Shares held by the Scheme Shareholders will be cancelled and extinguished in exchange for the payment of the Cancellation Price of HK$8.00 in cash for each Scheme Share cancelled;
2. immediately after the cancellation and extinguishment of the Scheme Shares, the issued share capital of the Company will be increased to the amount immediately prior to the cancellation and extinguishment of the Scheme Shares by applying the credit amount arising in the books of account of the Company as a result of the aforesaid reduction of issued share capital of the Company in paying up in full at par such number of new Shares (credited as full-paid) as is equal to the number of the Scheme Shares cancelled and extinguished as aforesaid, to be allotted and issued to the Offeror; and
3. the Company will apply to the Stock Exchange for the withdrawal of listing of the Shares on the Stock Exchange pursuant to Rule 6.15(2) of the Listing Rules so that such withdrawal is to take place immediately following the Effective Date.

- 24 -

Cancellation Price

Under the Proposal, the Scheme will provide that the Scheme Shares be cancelled in exchange for the payment to the Scheme Shareholders of HK$8.00 in cash for each Scheme Share.

The Cancellation Price has been determined after taking into account, among others, the prices, and the discounts to NAV per Share at which the Shares have been traded on the Stock Exchange, and pricing premiums for recent privatisation transactions of companies listed on the Stock Exchange. Please refer to the following sections for our detailed discussion and analysis.

As at the Latest Practicable Date, there were no outstanding options, warrants, derivatives, convertible securities, or other relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) issued by the Company.

No price increase statement

As stated in the section headed ''PART III. LETTER FROM THE BOARD -

1. 2. TERMS OF THE PROPOSAL - The Scheme'' in the Scheme Document, the Cancellation Price will not be increased and the Offeror does not reserve the right to do so.

2. CONDITIONS OF THE PROPOSAL AND THE SCHEME
   The Proposal is, and the Scheme will become effective and binding on the Company

and all Scheme Shareholders, subject to the fulfilment or waiver (as applicable) of all the Conditions on or before 30 September 2021 (or such later date as the Offeror and the Company may agree or, to the extent applicable, as the Court may direct and, in all cases, as permitted by the Executive), failing which the Proposal and the Scheme will lapse.

The main Conditions include, amongst others, (i) the approval of the Scheme by the Disinterested Scheme Shareholders; (ii) the sanction of the Scheme by the Court; (iii) compliance with relevant regulatory requirements; (iv) all Authorisations having been obtained or made; (v) all Authorisations remaining in full force and effect without variation; and (vi) all necessary consents in connection with the Proposal and the withdrawal of listing of Shares which may be required are being obtained and remaining effect. Please refer to the section headed ''PART VI. EXPLANATORY STATEMENT - 3. CONDITIONS TO THE PROPOSAL AND THE SCHEME'' in the Scheme Document for further details of the Conditions.

IV. THE SECOND INTERIM DIVIDEND

On 13 January 2021, the Board resolved to declare the payment to the Shareholders a Second Interim Dividend of 13 HK cents per Share in lieu of a final dividend for the year ended 31 December 2020. The Second Interim Dividend will be paid to the Shareholders whose names appear on the register of members of the Company on the Dividend Record Date. The Second Interim Dividend will be payable to the Shareholders within 30 days of the Dividend Record Date.

- 25 -

The Second Interim Dividend is not conditional on the Proposal having become effective and will not be deducted from the Cancellation Price.

If, after the publication of Joint Announcement, any dividend or other distribution (other than the Second Interim Dividend) is made or paid in respect of the Scheme Shares, the Cancellation Price will be reduced by an amount equal to the amount of such dividend or other distribution. However, the Company does not expect to declare any dividend or other distribution (other than the Second Interim Dividend) on or before the Effective Date.

1. BACKGROUND OF THE GROUP AND THE OFFEROR

Information of the Group

The Group is principally engaged in the business of property development and investment mainly in the PRC. It has a diversified property portfolio model with investments in both residential projects for sale and commercial projects mainly for rental income. The residential projects are currently located in Tianjin, Jiangmen, and Shenyang, while the Group's commercial projects, which are primarily office buildings and retail malls, are in the prime business areas in Shanghai, Shenzhen, Beijing, and Guangzhou. The Group also has a commercial property in Nanxun city of Zhejiang province.

Set out below is a summary of the Group's key property investment and development portfolio as at 31 December 2020 :

(i) Investment properties

- 26 -

Source: Annual results announcement and information provided by the Company

The Group also invests, through its 56.00% owned subsidiary, CREI (stock code: 987), in renewable energy projects in the PRC. CREI's main business is acting as an investor-operator in China's renewable energy sector, in which it secures, develops, constructs, and operates power stations in order to provide reliable electricity to customers. As at 31 December 2020, CREI operates eight wind farms and one distributed solar project under operation, namely the Mudanjiang and Muling wind farms, Siziwang Qi Phase I and Phase II wind farms, Danjinghe wind farm, Changma wind farm, Lunaobao wind farm, Songxian wind farm, and the Nanxun distributed solar project. As at 31 December 2020, CREI recorded a total gross power generating capacity of 738 Mega-Watt (''MW''), and produced a total electricity generation of 1,354.6 Giga-Watt-hours (''GWh'') for the year ended 31 December 2020.

- 27 -

As at 31 December 2020, the PRC had an aggregate total of 282 Giga-Watt (''GW'') wind power capacity and 253 GW solar power capacity installed, with an increase of approximately 34% and 23%, respectively as compared to the capacity installed as at 31 December 2019. Total wind power output and solar power output for 2020 increased by approximately 15% and 16% as compared to 2019, to 466,500 GWh and 260,500 GWh, respectively. The total wind power output and solar power output accounted for 6% and 3% of total power generation across the PRC, respectively.

Set out below is a summary of CREI's key renewable energy projects as at 31 December 2020 :

farm. CREI has a 30% effective equity interest in the Lunaobao wind farm which started commercial operation in February 2011.

- 28 -

Sources: Annual reports, or annual results announcements of the Company and CREI

- 29 -

Business and financial performance of the Group

The tabulation below illustrates the breakdown of the Group's principal sources of revenue and profits for each of the three financial years ended 31 December 2020 :

Table 1 - Summary of the financial results of the Group for the three financial years ended 31 December 2020

Sources: Annual reports, or annual results announcement of the Company for the relevant years

- 30 -

Notes:

1. Other income includes property management fee income; rental income generated from properties held for sale; net gain or loss on disposal of property, plant and equipment; net fair value gain or loss on financial assets at fair value through profit or loss; dividend income from financial assets at fair value through profit or loss; net exchange gain; government subsidies, net gain on liquidation of subsidiaries; compensation income claimed and received from an insurance company for a project completed in prior year, and others.
2. Share of results include share of results of associates and a joint venture.

For the financial year ended 31 December 2020 compared to 2019

• Revenue

The total revenue for the Group increased by approximately 14.2% from approximately HK$1,036.9 million for the year ended 31 December 2019 to approximately HK$1,184.0 million for the year ended 31 December 2020. This was mainly due to the increase of revenue from the residential sales and renewable energy segments which were partially offset by the decrease of revenue from the property investment and leasing segment.

Property investment and leasing segment

The revenue from the property investment and leasing segment decreased by approximately 6.9% to approximately HK$333.4 million for the year ended 31 December 2020 from HK$358.0 million for the year ended 31 December 2019, which was mainly attributable to the rent concessions granted by Group and decreased lease rates and occupancy rates of the Group's commercial properties as demand for offices and retail space dropped given reduced business activity, reduced foot traffic at malls, the government's encouragement for office workers to work at home as a result of the Coronavirus Disease 2019 (''COVID-19'') and oversupply of office properties. U.S.-China tensions also adversely impacted business activity.

Properties development

The Group recorded total revenue from property development segment of HK$644.5 million for the year ended 31 December 2020, comprising of revenue from Shenyang, Tianjin and Jiangmen of approximately HK$258.6 million, HK$230.0 million and HK$155.9 million, respectively. This represented an increase of approximately 29.5% as compared to the total revenue from property development segment of HK$497.7 million for the year ended 31 December 2019, comprising of revenue from Shenyang, Tianjin and Jiangmen of approximately HK$187.2 million, HK$249.8 million and HK$60.7 million, respectively.

Owing to the overall improvement in the market environment of Shenyang during 2020, contracted sales increased by approximately 82.4% from approximately RMB142.1 million (equivalent to approximately HK$159.2

- 31 -

million) for the year ended 31 December 2019 to approximately RMB259.2 million (equivalent to approximately HK$308.6 million) for the year ended 31 December 2020.

Contracted sales in Tianjin decreased by approximately 62.3% from approximately RMB313.3 million (equivalent to approximately HK$350.9 million) for the year ended 31 December 2019 to approximately RMB118.1 million (equivalent to approximately HK$140.5 million) for the year ended 31 December 2020, as much of the Group's inventory, the Tianjin Eka Garden, in Tianjin had been sold.

Contracted sales in Jiangmen increased by approximately 65.9% from approximately RMB71.6 million (equivalent to approximately HK$80.2 million) for the year ended 31 December 2019 to approximately RMB118.8 million (equivalent to approximately HK$141.4 million) for the year ended 31 December 2020. The Group sold 33 villas compared to 21 villas in 2019. Most of the units in Jiangmen have been completely sold out, and only car parks and some commercial space are still available.

Renewable energy

CREI's revenue, being revenue from the Group's renewable energy segment, increased by approximately 13.7% to HK$206.1 million for the year ended 31 December 2020 as compared to HK$181.2 million for the year ended 31 December 2019, which was mainly due to the overall poor wind resources in the Heilongjiang region in 2020 which adversely affected the performance of CREI's Mudanjiang and Muling wind farms. However, such the negative impact was offset by new contributions from the fully operational Songxian wind farm located in Henan province.

• Gross profit

The gross profit for the Group decreased by approximately 3.0% from approximately HK$682.4 million for the year ended 31 December 2019 to approximately HK$662.2 million for the year ended 31 December 2020. Such decrease was mainly due to the decrease of revenue from the property investment and leasing segment which normally has a higher margin.

• Profit attributable to the equity holders

The profit attributable to the equity holders decreased by approximately 27.4% from approximately HK$278.7 million for the year ended 31 December 2019 to approximately HK$202.3 million for the year ended 31 December 2020. The decrease was mainly due to net effect of (i) an increase of other income to HK$235.6 million as compared to the HK$120.7 million for 2019 as a result of an increase in fair value gain and dividend income from financial assets and the differences in currency translation;

1. a revaluation loss on its investment properties of HK$98.4 million as compared to a HK$91.9 million in gains recorded for 2019; and (iii) an increase of other and general

- 32 -

expenses to HK$153.3 million as compared to the HK$66.7 million accrued for 2019. As advised by the management of the Company, the increase of other and general expenses was mainly attributable to the provision to contingent liability arising in a housing facility fund pursuant to the ''Administrative Regulations of Shenzhen Special Economic Zone on Management of Property of Residential Quarters''* (深圳經濟特區 住宅區物業管理條例).

For the financial year ended 31 December 2019 compared to 2018

• Revenue

The total revenue for the Group decreased by approximately 18.4% from approximately HK$1,270.0 million for the year ended 31 December 2018 to approximately HK$1,036.9 million for the year ended 31 December 2019. This was mainly due to the decline of revenue from the property development segment, which decreased by approximately 36.4% from approximately HK$782.5 million for the year ended 31 December 2018 to approximately HK$497.7 million for the year ended 31 December 2019, given a much smaller inventory of residential units available for sale and a tepid market environment.

Property investment and leasing segment

The revenue from the property investment and leasing segment increased by approximately 5.9% to approximately HK$358.0 million for the year ended 31 December 2019 from HK$338.0 million for the year ended 31 December 2018, which was mainly attributable to the increased leasing revenue from the newly opened Landmark Center in Shanghai.

Properties development

The Group recorded total revenue from property development segment of HK$497.7 million for the year ended 31 December 2019, comprising of revenue from Shenyang, Tianjin and Jiangmen of approximately HK$187.2 million, HK$249.8 million and HK$60.7 million, respectively. This represented an decrease of 36.4% as compared to the total revenue from property development segment of HK$782.5 million for the year ended 31 December 2018, comprising of revenue from Shenyang, Tianjin, Jiangmen and Zhejiang of approximately HK$348.0 million, HK$344.0 million, HK$87.1 million and HK$3.4 million, respectively. This was mainly due to poor market sentiment, particularly during the first half of the year given a slowing economy, turmoil from the U.S.-China trade war, and government efforts to control property speculation.

Contracted sales in Shenyang declined by approximately 40.6% from approximately RMB239.2 million (equivalent to approximately HK$272.7 million) for the year ended 31 December 2018 to approximately RMB142.1 million (equivalent to approximately HK$159.2 million) for the year ended 31 December 2019. Sales were lower primarily because most of the Group's inventory had already been sold and consisted mainly of higher-priced villas.

- 33 -

Contracted sales in Tianjin increased by approximately 47.9% from approximately RMB211.8 million (equivalent to approximately HK$241.5 million) for the year ended 31 December 2018 to approximately RMB313.3 million (equivalent to approximately HK$350.9 million) for the year ended 31 December 2019, which was mainly due to the increased sales of its service apartments.

Contracted sales in Jiangmen declined by approximately 3.6% from approximately RMB74.3 million (equivalent to approximately HK$84.7 million) for the year ended 31 December 2018 to approximately RMB71.6 million (equivalent to approximately HK$80.2 million) for the year ended 31 December 2019. Similar to Shenyang, sales were lower primarily because most of the Group's inventory had already been sold and consisted mainly of higher-priced villas.

Renewable energy

Revenue from the Group's renewable energy segment, increased by approximately 21.2% to HK$181.2 million for the year ended 31 December 2019 as compared to HK$149.5 million for the year ended 31 December 2018, which was mainly due to the lower overall curtailment and new contributions from the Henan Songxian 74 MW wind project (the Songxian wind farm).

• Gross profit

The gross profit for the Group increased by approximately 6.5% from approximately HK$640.8 million for the year ended 31 December 2018 to approximately HK$682.4 million for the year ended 31 December 2019. Such increase was mainly due to (i) the increase in revenue generated from leasing segment with higher margin; (ii) the reversal of construction cost accruals for residential properties sold in previous years of approximately HK$97.4 million which resulted after the Group negotiated the final construction costs with the main contractors of the completed residential projects; and (iii) the increased gross profit for the Group's renewable energy segment by approximately 32.2% to approximately HK$68.6 million for the year ended 31 December 2019 when compared to approximately HK$51.9 million for the year ended 31 December 2018.

• Profit attributable to the equity holders

The profit attributable to the equity holders decreased by approximately 62.0% from approximately HK$734.1 million for the year ended 31 December 2018 to approximately HK$278.7 million for the year ended 31 December 2019. The decrease was mainly due to the decrease in revaluation gains, which decreased by approximately 86.8% from approximately HK$696.5 million for the year ended 31 December 2018, primarily from the completion of the Shanghai Landmark Center, to approximately HK$91.9 million for the year ended 31 December 2019, as well as the decreased residential sales as mentioned above and increased finance costs given interest was no longer capitalised with the completion of the Group's Shanghai commercial buildings.

- 34 -

The tabulation below summarises the financial position of the Group as at 31 December 2018, 2019 and 2020 :

Table 2 - Financial positions of the Group

- 35 -

Sources: Annual reports, or annual results announcement of the Company for the relevant years

Notes:

1. Others include (i) intangible assets; (ii) financial assets at fair value through other comprehensive income; (iii) financial assets at fair value through profit or loss; (iv) prepayments and other receivables; and (v) deferred income tax assets.
2. The gearing ratio is calculated as the total borrowings plus the amount due to a Shareholder divided by total equity.

- 36 -

• Total assets

As at 31 December 2020, the Group recorded total assets of approximately HK$23,271.3 million which primarily consisted of (i) investment properties; (ii) property, plant and equipment; (iii) right-of-use assets; (iv) interests in associates and a joint venture; (v) financial assets at fair value through profit or loss; and (vi) cash and cash equivalents.

Investment properties of approximately HK$12,631.9 million as at 31 December 2020, which consisted primarily of office buildings and retail malls for lease located in prime business areas in Shanghai, Shenzhen, Beijing and Guangzhou. The Group also has a commercial property in Nanxun, Zhejiang Province. The investment properties create steady recurring income and cash flow as well as long term capital appreciation, and are relatively immune from the periodic restrictions on residential properties.

The Group's property, plant and equipment increased by approximately 3.3% from approximately HK$1,328.0 million as at 31 December 2019 to approximately HK$1,372.0 million as at 31 December 2020, mainly due to the differences in additions, the currency translation and depreciation.

The Group's right-of-use assets increased by approximately 4.8% from approximately HK$1,455.0 million as at 30 December 2019 to approximately HK$1,524.2 million as at 31 December 2020, mainly due to the differences in currency translation, and depreciation and amortisation.

The Group's interests in a joint venture and associates increased by approximately 3.0% from approximately HK$2,646.7 million as at 30 December 2019 to approximately HK$2,725.9 million as at 31 December 2020 due to the appreciation of RMB in 2020 as the joint venture and associates the Group has interests in are all based in the PRC and denominated in RMB.

The Group's interests in financial assets at fair value through profit or loss, comprising of its current portion and non-current portion, increased by approximately 658.4% from approximately HK$300.8 million as at 30 December 2019 to approximately HK$2,281.4 million as at 31 December 2020, due to the addition in and fair value gain from investments in the listed securities by the Group.

As at 31 December 2020, the cash and cash equivalents were approximately HK$1,078.7 million with no short-term bank deposits.

• Total liabilities

The Group's total liabilities of approximately HK$6,562.2 million as at 31 December 2020 were primarily represented by borrowings, deferred income tax liabilities and trade and other payables. As at 31 December 2020, the Group's total borrowings and amount due to a Shareholder consisted of debts denominated in Hong Kong dollars and Renminbi, including Hong Kong Dollar borrowings of approximately HK$813.4 million as at 31 December 2020 and Renminbi borrowings

- 37 -

that are equivalent to approximately HK$2,685.7 million. The Group's total borrowings and amount due to a Shareholder increased by approximately 10.5% from approximately HK$3,165.6 million as at 31 December 2019 to approximately HK$3,499.1 million as at 31 December 2020, of which approximately HK$1,164.0 million was repayable within one year or on demand, approximately HK$2,115.9 million within two to five years, and approximately HK$219.2 million repayable after five years. Further, the Group had charged certain assets worth approximately HK$12,168.9 million as security for bank borrowings as at 31 December 2020.

• Gearing Ratio

The Group's gearing ratio increased slightly from approximately 20.1% as at 31 December 2019 to approximately 20.9% as at 31 December 2020, while the Group's net debt to equity ratio, defined by total borrowings plus amount due to a Shareholder minus cash and divided by total equity, was approximately 14.0% as at 31 December 2020, compared with approximately 4.3% as at 31 December 2019. The increase was mainly due to the acquisition of financial assets, mainly the listed securities, which resulted in the decrease in the cash and cash equivalents.

Information of the Offeror

The Offeror is a company incorporated in the BVI and is an investment holding company. The Offeror is ultimately beneficially owned as to 50% by Mr. OEI, who is the chairman and chief executive officer of the Company, and as to the remaining 50% by his wife, Mrs. OEI Valonia Lau. The directors of the Offeror are Mr. OEI and Mrs. OEI Valonia Lau.

The main assets of the Offeror are the Shares it holds in the Company as well as other listed investments.

Shareholding structure

As at the Latest Practicable Date, (i) the Offeror held 17,267,000 Shares, representing approximately 3.38% of the issued share capital of the Company; and (ii) Creator Holdings Limited and Genesis Capital Group Limited, being Offeror Concert Parties, which are ultimately beneficially wholly-owned by Mr. OEI, held 346,657,938 Shares, representing approximately 67.83% of the issued share capital of the Company. Such Shares will not form part of the Scheme Shares.

As at the Latest Practicable Date, Mr. OEI and his wife, Mrs. OEI Valonia Lau, being the ultimate beneficial joint owners of the Offeror, are Offeror Concert Parties. Mr. OEI Tjie Goan is the father of Mr. OEI and is therefore deemed to be an Offeror Concert Party, and his Shares are held through a BVI company. Mr. LEE Shiu Yee, Daniel and Mr. WONG Jake Leong, Sammy are Directors and are therefore deemed to be Offeror Concert Parties. The Shares (i.e. 29,982,969 Shares in aggregate, representing approximately 5.87% of the issued share capital of the Company) held by Mr. OEI and his wife, Mrs. OEI Valonia Lau, Mr. OEI Tjie Goan, Mr. LEE Shiu Yee, Daniel and Mr. WONG Jake Leong, Sammy will form part of the Scheme Shares.

- 38 -

The table below sets out the shareholding structure of the Company as at the Latest Practicable Date and immediately upon the Scheme becoming effective, assuming that there are no other changes in the shareholding of the Company between the Latest Practicable Date and the Scheme Record Date:

1. The Offeror is ultimately beneficially owned as to 50% by Mr. OEI and as to the remaining 50% by his wife, Mrs. OEI Valonia Lau.
2. Each of Creator Holdings Limited and Genesis Capital Group Limited is ultimately beneficially wholly-owned by Mr. OEI.
3. Mr. OEI and his wife, Mrs. OEI Valonia Lau, being the ultimate beneficial joint owners of the Offeror, are Offeror Concert Parties. Mr. OEI Tjie Goan is the father of Mr. OEI and is therefore deemed to be an Offeror Concert Party, and his Shares are held through a BVI company. The 22,989,500 Shares held by Mr. OEI and his wife, Mrs. OEI Valonia Lau, and Mr. OEI Tjie Goan will form part of the Scheme Shares, and will be cancelled upon the Scheme becoming binding and effective in accordance with its terms.

- 39 -

1. Mr. LEE Shiu Yee, Daniel and Mr. WONG Jake Leong, Sammy are Directors, and are therefore deemed to be Offeror Concert Parties. The Shares held by Mr. LEE Shiu Yee, Daniel and Mr. WONG Jake Leong, Sammy will form part of the Scheme Shares and will be cancelled upon the Scheme becoming binding and effective in accordance with its terms.
2. Due to rounding, the percentages may not add up to the total.

VI. BASIS OF OPINION AND FACTORS TAKEN INTO CONSIDERATION

We have considered the following factors in arriving at our recommendations regarding the terms of the Proposal:

Reasons for, and benefits of, the Proposal

As stated in the section headed ''PART VI. EXPLANATORY STATEMENT -

9. REASONS FOR AND BENEFITS OF THE PROPOSAL'', the Proposal mainly aims to (i) provide the Scheme Shareholders with an attractive opportunity to monetise their investment in the Company at a price with a compelling premium; and (ii) provide the Company a proposal to facilitate flexibility in formulating long-term business development strategy and reducing costs incurred from maintaining a listing platform with a limited fund-raising function.

1. Considering the sluggish Share price and low liquidity in the absence of Share acquisitions by the Offeror and the Offeror Concert Parties or Share buybacks by the Company

As advised by the management of the Company and discussed in the section headed ''LETTER FROM THE OFFEROR'', the ultimate beneficial owners of the Offeror, being also the controlling Shareholders, have shown commitment and support to the Company through acquisition of Shares, both on market and off market, throughout the past decade. Recently, the Company has conducted the Share buybacks in the market between September 2019 and January 2020, which utilised a portion of its surplus cash resources with a view to support the Company's value as well as the Shareholders' investment. Nevertheless, owing to the constraints to maintain the minimal public float, further significant size Share buybacks by the Company or purchases in the market by the Offeror and the Offeror Concert Parties are unlikely, and therefore this might remove a significant source of liquidity for the Shares.

As a result, the Offeror considers the Proposal will provide Scheme Shareholders with an attractive opportunity to realise their investment in the Company at a premium over the prevailing price of the Shares. The Cancellation Price of HK$8.00 per Scheme Share represents:

. a premium of approximately 120.39% over the closing price of HK$3.63 per Share or a premium of approximately 128.57% over the ex-Second Interim Dividend closing price of HK$3.50 per Share, as quoted on the Stock Exchange on the Last Trading Date;

- 40 -

. a premium of approximately 122.22% over the average closing price of HK$3.60 per Share or a premium of approximately 130.55% over the ex- Second Interim Dividend average closing price of HK$3.47 per Share, based on the daily closing prices as quoted on the Stock Exchange over the 5 trading days up to and including the Last Trading Date;

. a premium of approximately 119.78% over the average closing price of HK$3.64 per Share or a premium of approximately 127.92% over the ex- Second Interim Dividend average closing price of HK$3.51 per Share, based on the daily closing prices as quoted on the Stock Exchange over the 30 trading days up to and including the Last Trading Date;

. a premium of approximately 109.42% over the average closing price of HK$3.82 per Share or a premium of approximately 116.80% over the ex- Second Interim Dividend average closing price of HK$3.69 per Share, based on the daily closing prices as quoted on the Stock Exchange over the 60 trading days up to and including the Last Trading Date;

. a premium of approximately 78.97% over the average closing price of HK$4.47 per Share or a premium of approximately 84.33% over the ex- Second Interim Dividend average closing price of HK$4.34 per Share, based on the daily closing prices as quoted on the Stock Exchange over the 180 trading days up to and including the Last Trading Date;

. a discount of approximately 70.2% to the audited consolidated net asset value attributable to Shareholders per Share of approximately HK$26.81 as at 31 December 2020 or a discount of approximately 70.0% to the unaudited consolidated net asset value attributable to Shareholders per Share of approximately HK$26.68 as at 31 December 2020 (having excluded the Second Interim Dividend) or a discount of approximately 68.3% to the Reassessed NAV per Share (having excluded the Second Interim Dividend); and

. a premium of approximately 5.12% over the closing price of HK$7.61 per Share or a premium of approximately 6.95% over the ex-Second Interim Dividend closing price of HK$7.48 per Share, as quoted on the Stock Exchange on the Latest Practicable Date.

• Historical Share price performance, Share buybacks by the Company and Share acquisition by an Offeror Concert Party

In assessing the reasonableness of the Cancellation Price, we have considered:

1. the relative historical share price performance of the Shares from 1 January 2019 to the Last Trading Date (the ''Review Period''), with the Cancellation Price, the Hang Seng Index (''HSI'') and the Hang Seng Mainland Properties Index (''HSMPI''). The Review Period, which

- 41 -

covers a period of two full financial years of the Company, is considered to represent a sufficient period of time to provide a general overview of the recent market performance of the Shares, especially under the environment before and after the onset of the COVID-19 outbreak, for the purpose of this analysis;

1. the monthly trading volume of the Shares during the Review Period; and
2. the summary of the historical Share buybacks by the Company and Share acquisition by an Offeror Concert Party.

See chart 1, and table 3 below.

- 42 -

- 43 -

Chart 1 - Relative historical share price performance of the Shares during the Review Period

Jan-19Mar-19May-19Jul-19Sep-19Nov-19Jan-20Mar-20May-20Jul-20Sep-20Nov-20Jan-21

Sources: Bloomberg and the Stock Exchange

V PART

CHINESE ANGLO FROM LETTER

Note: The prices paid by the Company for the Share buybacks represent the intra-day prices of the Shares.

As seen from Chart 1 above, the Shares have broadly underperformed both the HSI and HSMPI during the Review Period. The Share price of the Company generally followed the trend of the HSMPI closer than the trend of HSI between January 2019 and June 2020. However, the Share price of the Company started to underperform the HSI and the HSMPI during the period subsequent to June 2020 and prior to the Last Trading Date.

As seen from Chart 1 above, during the period from January 2019 to February 2020, the closing price of the Shares fluctuated between the high point of HK$7.52 per Shares on 17 January 2020 and low point of HK$4.52 per Share on 15 August 2019. As seen in Table 3 above, the Company has conducted Share buybacks in the market between September 2019 and January 2020, which utilised a portion of its surplus cash reserves with a view to support the Company's value as well as the Shareholders' investment. The closing price of the Shares showed an increasing trend between August 2019 and January 2020, which peaked at HK$7.52 on 17 January 2020 as mentioned above. It is believed that the Share buybacks conducted by the Company helped to create support for the Share price.

Nevertheless, after the closing price of Share price peaked at HK$7.52 on 17 January 2020 in the last 12 months preceding the Last Trading Date, it started to fall when the Company ceased to buy back its Shares in February and March 2020 during the blackout period. Following the publication of the profit warning by the Company on 12 March 2020, the Share price dropped substantially from HK$5.88

- 44 -

on 12 March 2020 to HK$4.40 on 19 March 2020. At the same time, the HSMPI displayed a sharp downward trend following a similar albeit less pronounced trend of the HSI, which could have been caused by the unprecedented downturn in economic activity due to the COVID-19 outbreak during this period. The Company resumed its buyback of the Shares in April 2020 and the Share price rebounded to slightly below HK$6.00. However, owing to constraints imposed by the minimum public float requirement under the Listing Rules, the number of Shares bought back by the Company in April to July 2020 was only approximately 16% of the Shares being bought back in January 2020. The Share price has been partly supported by Share buybacks by the Company from September 2019 to July 2020, with the number of Shares being bought-back contributing up to approximately 62.7% of the trading volume during this period. With a headroom of only approximately 0.24% before the minimum public float requirement is reached, the last Share buyback undertaken by the Company was on 3 July 2020 when the Share price closed at HK$4.87. The Shares reached the lowest point of HK$3.55 per Share on 8 January 2021 prior to the Last Trading Date.

In addition to Share buybacks by the Company, Mr. OEI Tjie Goan, an Offeror Concert Party, through a BVI company which is wholly-owned by him, purchased 11,834,513 Shares at HK$4.48 on 7 September 2020, which represented 93.8% of the trading volume for the month. Subsequently, the Share price continued to drop gradually and closed at HK$3.63 on the Last Trading Date, which underperformed both HSI and the HSMPI. Based on the discussion with the management of the Company, although such Share acquisition by an Offeror Concert Party contributed to the majority of the total Share volume in September 2020, such Share acquisition was a cross trade which did not provide any support to the market price of the Shares.

During the Review Period, the Shares have consistently traded below the Cancellation Price of HK$8.00 per Share, which fluctuated between HK$3.55 per Share and HK$7.52 per Share and with the average price of HK$5.47 per Share. During the six-month period preceding the Last Trading Date, the highest closing price of the Shares as quoted on the Stock Exchange was HK$4.74 per Share on 15 July 2020 and 1 September 2020, and the lowest closing price of the Shares as quoted on the Stock Exchange was HK$3.55 per Share on 8 January 2021.

Further to our detailed analysis of the Share price during the Review Period above, and taking into account the ultimate beneficial owners of the Offeror, being also the controlling Shareholders, and the Company, have acquired Shares historically, both on and off market to show the commitment and support to the Company as discussed above, we have extended our analysis to a five-year period prior to the Last Trading Date, that is since 13 January 2016, to illustrate the effect of the Proposal on long-term Shareholders. As shown in the table below, the average Share prices in 2017, 2018, 2019 and 2020, during which the Company has conducted the Share buybacks or the Offeror Concert Parties have made Share acquisitions, are higher than those in 2016 and 2021 (up to the Last Trading Date). Accordingly, we believe the Share acquisitions by the Offeror Concert

- 45 -

Parties or Share buybacks by the Company in aggregate should have provided support to the average Share price. Moreover, the highest closing price each year in the past five-year period did not exceed the Cancellation Price of HK$8.00, with the Shares traded at the highest of HK$7.89 per Share on 6 May 2018.

Table 4 - Share acquisitions by the Offeror Concert Parties and

the Share buyback by the Company in the past five years

Sources: Bloomberg and information provided by the Company

• Trading liquidity

The liquidity of the Shares has been at a relatively low level over a long period of time, even with the support provided by the Company through Share buybacks. Without continued Share buybacks, which are severely constrained by the minimum public float requirement, the liquidity of the Shares in the future can be expected to be lower than the past when Share buybacks were taking place.

- 46 -

Set out below illustrates (i) the average daily trading volumes of the Shares;

1. the percentages of the average trading volume to the total issued Shares; and
2. the public float of the Company during the Review Period, and from the Last Trading Date up to the Latest Practicable Date:

Table 5 - Trading volume during the Review Period, and from the Last Trading Date up to the Latest Practicable Date