CIFI : CONTINUING CONNECTED TRANSACTIONS IN RELATION TO THE PREFABRICATED CONSTRUCTION MATERIALS SUPPLY MASTER AGREEMENT

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CIFI Holdings (Group) Co. Ltd.

旭 輝 控 股（ 集 團 ）有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 00884) CONTINUING CONNECTED TRANSACTIONS IN RELATION TO THE PREFABRICATED CONSTRUCTION MATERIALS SUPPLY MASTER AGREEMENT THE PREFABRICATED CONSTRUCTION MATERIALS SUPPLY MASTER AGREEMENT

Reference is made to the announcement of the Company dated 15 July 2016 in relation to the formation of the JV Company in the PRC. On 18 January 2017 (after trading hours), CIFI (PRC), an indirect wholly-owned subsidiary of the Company (for itself and on behalf of the other members of the Group), and the JV Company entered into the Prefabricated Construction Materials Supply Master Agreement, pursuant to which the JV Company has agreed to supply prefabricated construction materials and provide related installation and technical services to the Group for a term of 3 years from 1 January 2017 to 31 December 2019 (both days inclusive).

LISTING RULES IMPLICATIONS

The JV Company is being held by CIFI (PRC), an indirect wholly-owned subsidiary of the Company, as to 30% and the associates of Mr. LIN Zhong, Mr. LIN Wei and Mr. LIN Feng as to 70%. Mr. LIN Zhong, Mr. LIN Wei and Mr. LIN Feng are executive Directors and controlling shareholders of the Company. The JV Company is therefore a connected person of the Company and the transactions contemplated under the Prefabricated Construction Materials Supply Master Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As all of the applicable percentage ratios in respect of the Annual Caps are above 0.1% but below 5%, the Continuing Connected Transactions are only subject to the reporting, announcement and annual review requirements but are exempt from the independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

BACKGROUND

Reference is made to the announcement of the Company dated 15 July 2016 in relation to the formation of the JV Company in the PRC. Shanghai Yipixi is a joint venture company being held by CIFI (PRC), an indirect wholly-owned subsidiary of the Company, as to 30% and the associates of Mr. LIN Zhong, Mr. LIN Wei and Mr. LIN Feng as to 70%. Mr. LIN Zhong, Mr. LIN Wei and Mr. LIN Feng are the executive Directors and controlling shareholders of the Company. Shanghai Yipixi is therefore a connected person of the Company and the transactions between Shanghai Yipixi and any member of the Group constitute connected transactions of the Company under Chapter 14A of the Listing Rules.

THE PREFABRICATED CONSTRUCTION MATERIALS SUPPLY MASTER AGREEMENT

The Group has engaged Shanghai Yipixi to supply prefabricated construction materials and provide related installation and technical services to the Group for a term of 3 years from 1 January 2017 to 31 December 2019 (both days inclusive) pursuant to the terms of the Prefabricated Construction Materials Supply Master Agreement. Pursuant to the Prefabricated Construction Materials Supply Master Agreement, members of the Group and Shanghai Yipixi may enter into the Specific Agreements from time to time.

The principal terms of the Prefabricated Construction Materials Supply Master Agreement are set out below:

Date : 18 January 2017

Parties : (1) CIFI (PRC) (for itself and on behalf of the other members of the Group)

(2) Shanghai Yipixi

Term : Effective from 1 January 2017 to 31 December 2019 (both days inclusive)

Materials and services being supplied and provided

: Shanghai Yipixi shall:

1. supply to the Group prefabricated construction materials; and

2. provide to the Group related installation and technical services.

   Pricing and other terms : The parties to the Prefabricated Construction Materials

   Supply Master Agreement have agreed as follows:

3. supply of materials and provision of services to the Group by Shanghai Yipixi shall be on normal commercial terms and determined after arm's length negotiations;

4. the detailed terms and conditions, manner of payment, specification, price, quantity and delivery date in relation to the supply of prefabricated construction materials and the provision of related installation and technical services shall be determined in the Specific Agreements;

5. prices of the prefabricated construction materials and fees for the installation and technical services to be provided to the Group by Shanghai Yipixi shall be determined with reference to the market price and shall not be higher than those charged by the Independent Third Parties on the Group for provision of the same or comparable goods and services; and

6. the terms and conditions of the Specific Agreements shall be not less favourable than those being offered to the Group by the Independent Third Parties for provision of the same or comparable goods and services.

The Annual Caps and their basis

The Annual Caps are as follows:

Year ending 31 December 2017 Year ending 31 December 2018 Year ending 31 December 2019

(RMB'000) (RMB'000) (RMB'000)

200,000 400,000 500,000

The Annual Caps have been determined with reference to the prevailing market prices for the comparable goods and services and the expected scale of development projects undertaken by the Group in 2017, 2018 and 2019. The payments under the Prefabricated Construction Materials Supply Master Agreement are expected to be financed by the internal resources of the Group.

INFORMATION ON THE GROUP AND SHANGHAI YIPIXI

CIFI (PRC) is an indirect wholly-owned subsidiary of the Company and it is an intermediate holding vehicle within the Group holding interest in subsidiaries and associated companies of the Company incorporated in the PRC. The principal activities of the Group (comprising CIFI (PRC)) are property development and property investment in the PRC.

Shanghai Yipixi positions itself as a provider of industrialized construction services and is principally engaged in the design, manufacture and supply of prefabricated construction materials as well as the provision of related installation and technical services.

REASONS FOR AND BENEFITS OF ENTERING INTO THE PREFABRICATED CONSTRUCTION MATERIALS SUPPLY MASTER AGREEMENT

The Board is of the view that the Group, as a major real estate developer in the PRC, will be able to derive benefits from the Continuing Connected Transactions by meeting its demand for prefabricated construction materials and related installation and technical services in support of its project development plan and capturing the synergic advantages of both the Group and Shanghai Yipixi.

LISTING RULES IMPLICATIONS

Shanghai Yipixi is a joint venture company being held by CIFI (PRC), an indirect wholly- owned subsidiary of the Company, as to 30% and the associates of Mr. LIN Zhong, Mr. LIN Wei and Mr. LIN Feng as to 70%. Mr. LIN Zhong, Mr. LIN Wei and Mr. LIN Feng are executive Directors and controlling shareholders of the Company. Shanghai Yipixi is therefore a connected person of the Company and the transactions contemplated under the Prefabricated Construction Materials Supply Master Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As all of the applicable percentage ratios in respect of the Annual Caps are above 0.1% but below 5%, the Continuing Connected Transactions are only subject to the reporting, announcement and annual review requirements but are exempt from the independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

Mr. LIN Zhong, Mr. LIN Wei and Mr. LIN Feng, being executive Directors, are considered to have a material interest in the Prefabricated Construction Materials Supply Master Agreement and therefore have abstained from voting on the Board resolutions of the Company approving the Prefabricated Construction Materials Supply Master Agreement and the transactions contemplated thereunder. Save as disclosed above, none of the Directors have any material interest in the transactions under the Prefabricated Construction Materials Supply Master Agreement nor is any of them required to abstain from voting in respect of the relevant Board resolutions.

All the independent non-executive Directors and the executive Directors (in respect of the executive Directors, they have expressed their views although they have abstained from voting) are of the opinion that the Prefabricated Construction Materials Supply Master Agreement is on normal commercial terms and in the ordinary and usual course of business of the Group, and the terms of the Prefabricated Construction Materials Supply Master Agreement and the Annual Caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole.