The Board of Directors of Beijing Health (Holdings) Limited Jiangsu Ancient Canal Hotel Management Co. Ltd. have entered into a cooperative agreement on the Ancient Canal Cultural and Creative Building Health Care Project, Liangxi District, Wuxi City on 10 November 2023. Pursuant to the Cooperation Agreement, the Group will cooperate with the Cultural Tourism Group to renovate the Ancient Canal cultural and Creative Building, and apply for a 400-bed mid-to-high-end nursing care project, fully utilize the geographical location advantage of proximity of Wuxi People's Hospital, to construct an "Elderly Care and Nursing + Health for All ages" service complex.

The Ancient Canal Cultural and Creative Building is located in the center of Liangxi District, Wuxa City, close to Wuxi People's Hospital., a 17-story building with gross floor area of 18,000 square meters. The project plans to have about 400 beds, mainly double standard rooms for high-end users to meet differentiated needs with the expected average monthly income RMB 7,000 per bed. As aging further intensifies, the market demand for mid-range and high-end integrated medical and geriatric care nursing home is very large and the prospects will be broader.

Therefore, this project is positioned as a mid- range and high-end standard, which can meet a large number of mid-range market demand and also take into account the demand of high-end users. The project will introduce a modern integrated medical and geriatric care model of smart geriatric care, providing happy elder care, professional care, nutritious meals, leisure and entertainment, 24-hour medical care, nursing home pharmacy, diagnosis, treatment and rehabilitation, express channel for critical illness, body check monitoring, health records, chronic disease management and psychological comfort and other services. It has maintained in-depth deployment in Yangtze River Delta region, which has stronger economic power and greater market demand, and gradually expanded to the entire PRC for the provision of quality geriatric service.

The Group has established the "Beikang Elderly Care" geriatric service brand with strong competitive advantages in China and has broad experience in investment and operation of medical and geriatric care. At present, the Group operates a number of self-operated nursing institutions through its own team of professional geriatric care and medical personnel. The occupancy rate of beds for geriatric care is full throughout the year, representing full recognition and acknowledgment by customers, the central and local governments.

This cooperation will provide a good foundation for the accelerated development of the Group's geriatric business. The realization of the target of 10,000 beds and becoming a national benchmark geriatric enterprise is therefore accelerated. China's population aged 60 and above accounts for about 20% of the total population and has entered a medium aging stage.

It is expected that China has entered a deeper aging population development stage by 2035, and showed accelerated momentum. There are approximately 1.47 million people aged 60 and above, accounting for 19.75%, and approximately 1.09 million people aged 65 and above, accounting for 14.65%. By 2025, the elderly population aged 60 and above will reach 1.55 million, accounting for 29%.

Liiangxi District, as the core urban area of Wuxi City, currently has an elderly population of nearly 300,000. According to the relevant planning of Wuxi City, by 2025, Wuxi City will need about 70,000 beds for geriatric care. Currently, there are about 40,000 beds in Wuxi, which is far from meeting market demand.

The Board will cooperate with the Cultural tourism Group to cooperate with the Cultural Tourism Group To renovate the Ancient Canal Cultural and creative Building, and apply for a 400-bed mid-to- high-end nursing care project, full-end nursing care project.