Hailan : DISCLOSEABLE TRANSACTION IN RELATION TO ACQUISITION OF PROPERTY

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

Hailan Holdings Limited

海 藍 控 股 有 限 公 司

(incorporated in the Cayman Islands with limited liability)

(Stock code: 2278)

DISCLOSEABLE TRANSACTION

IN RELATION TO ACQUISITION OF PROPERTY

THE AGREEMENT

The Board announces that on 25 November 2019 (U.S. time), Hylan Investment, an indirect wholly-owned subsidiary of the Company, and the Vendor entered into the Agreement, pursuant to which Hylan Investment has agreed to acquire and the Vendor has agreed to sell the Property at the consideration of US$19,300,000 (equivalent to approximately HK$151,119,000).

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Acquisition is/are more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction of the Company and is therefore subject to the reporting and announcement requirements pursuant to Chapter 14 of the Listing Rules.

The Board announces that on 25 November 2019 (U.S. time), Hylan Investment, an indirect wholly-owned subsidiary of the Company, and the Vendor entered into the Agreement, pursuant to which Hylan Investment has agreed to acquire and the Vendor has agreed to sell the Property at the consideration of US$19,300,000 (equivalent to approximately HK$151,119,000).

THE AGREEMENT

Date	:	25 November 2019 (U.S. time)
Parties	:	(1)	The Vendor; and
		(2)	Hylan Investment

- 1 -

Property to be acquired

Pursuant to the Agreement, Hylan Investment has agreed to acquire and the Vendor has agreed to sell the Property, which is located at California, U.S.

Consideration and payment terms

The Consideration for the Acquisition is US$19,300,000 (equivalent to approximately HK$151,119,000), which shall be payable by Hylan Investment to the Vendor in the following manner:

1. an initial deposit of US$1,000,000 (equivalent to approximately HK$7,830,000) is payable to the Escrow Agent within three business days following the execution of the Agreement; and
2. the balance of the Consideration of US$18,300,000 (equivalent to approximately HK$143,289,000) shall be payable to the Escrow Agent no later than seven days after the end of the Due Diligence Period.

The Consideration was determined after arm's length negotiations between the Vendor and Hylan Investment, having taken into account the average market price of similar properties in the U.S.

Due Diligence

Pursuant to the Agreement, Hylan Investment is entitled to carry out due diligence in respect of the Property during the Due Diligence Period. If Hylan Investment, in its sole and absolute discretion, is not satisfied with the results of its due diligence of the Property, it shall have the right to terminate the Purchase Agreement on or before the Due Diligence Expiration Date, in which case the initial deposit in the amount of US$1,000,000 less US$100 shall be returned to Hylan Investment.

Conditions

Hylan Investment's conditions to Closing

The obligations of Hylan Investment to consummate the transactions under the Agreement are subject to the satisfaction (or waiver by Hylan Investment in writing) of the following conditions:

1. all of the documents required to be delivered by the Vendor to Hylan Investment at Closing pursuant to the terms and conditions of the Agreement shall have been delivered to Hylan Investment or deposited with the Escrow Agent in escrow in accordance with the terms thereof;
2. each of the representations and warranties of the Vendor shall be true in all material respects as of Closing;
3. the Vendor shall have performed its covenants and obligations under the Agreement in all material aspects;

- 2 -

1. subject to payment of all title insurance premiums and fees, the Escrow Agent is irrevocably committed to issue the title policy for the Property to Hylan Investment; and
2. all licences and permits shall have been issued or transferred to Hylan Investment.

Vendor's conditions to Closing

The obligations of the Vendor to consummate the transactions under the Agreement are subject to the satisfaction (or waiver by the Vendor in writing) of the following conditions:

1. Hylan Investment shall have deposited with the Escrow Agent immediate available funds in the amount of the Consideration;
2. all of the documents required to be delivered by Hylan Investment to the Vendor at Closing pursuant to the terms and conditions of the Agreement shall have been delivered to Hylan Investment or deposited with the Escrow Agent in escrow in accordance with the terms thereof;
3. each of the representations and warranties of Hylan Investment shall be true in all material respects as of Closing; and
4. Hylan Investment shall have performed its covenants and obligations under the Agreement in all material aspects.

Closing

Closing shall take place on the date which is seven days after the Due Diligence Period or such other date as agreed to in writing between the parties.

Contemplated transfer of interest in the Property

Hylan Investment contemplates to transfer no more than 40% interest in the Property to a third party in order to reduce the capital needs and risks of the Group on investment in the U.S.

The Company will publish further announcement once the contemplated transfer is materialised.

INFORMATION OF THE VENDOR AND THE ESCROW AGENT

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, (i) the Vendor is a privately held company which is principally engaged in development and investment of real estate in California, U.S.; (ii) the Escrow Agent is engaged in the provision of title insurance protection and professional settlement services for real estate transactions; and (iii) the Vendor and the Escrow Agent and their respective ultimate beneficial owner(s) are Independent Third Parties.

- 3 -

INFORMATION OF THE GROUP AND HYLAN INVESTMENT

The Group is principally engaged in development and sales and lease of residential properties in the PRC and overseas.

Hylan Investment is a corporation incorporated in accordance with the laws of California, U.S. and is an indirect wholly-owned subsidiary of the Company. Its principal activity is investment holding.

INFORMATION OF THE PROPERTY

The Property is located on a land plot at Long Beach, California, U.S. with site area of approximately 22,238 square feet. It is currently a building under construction with floor area of approximately 106,154 square feet. The existing car park will be retained and the Property will be renovated into a residential property and a clubhouse with floor area of approximately 121,731 square feet.

REASONS FOR ENTERING INTO THE AGREEMENT

The Group has been actively exploring for other business opportunities in order to diverse its business risk. The Company believes that the Acquisition will allow the Group to tap into the real estate industry in the U.S. which will provide a new source of income to the Group.

The terms of the Agreement were negotiated on an arm's length basis between the Vendor and Hylan Investment. The Company believes that the transactions contemplated under the Agreement are beneficial to the Company and the Shareholders as a whole.

The Directors, including the independent non-executive Directors, having considered the terms and conditions of the Agreement, are of the view that the terms and conditions are on normal commercial terms, which are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

IMPLICATIONS UNDER THE LISTING RULES

As one or more of the applicable percentage ratios in respect of the Acquisition is/are more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction of the Company and is therefore subject to the reporting and announcement requirements pursuant to Chapter 14 of the Listing Rules.

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context otherwise requires:

''Acquisition''	the	acquisition of the Property by Hylan Investment from
	the	Vendor pursuant to the terms and conditions of the
	Agreement

- 4 -

''Agreement''

''Board'' ''Closing''

''Company''

''connected person(s)'' ''Consideration''

''Director(s)''

''Due Diligence Expiration Date''

''Due Diligence Period''

''Escrow Agent'' ''Group'' ''HK$'' ''Hong Kong''

''Hylan Investment''

''Independent Third Party(ies)''

''Listing Rules''

the purchase and sale agreement dated 25 November 2019 (U.S. time) entered into between the Vendor and Hylan Investment in relation to the sale and purchase of the Property

the board of Directors

consummation of the Acquisition in accordance with the terms and conditions of the Agreement

Hailan Holdings Limited (海藍控股有限公司), a company incorporated under the laws of the Cayman Islands with limited liability, the shares of which are listed on the main board of the Stock Exchange (Stock code: 2278)

has the meaning ascribed under the Listing Rules

the consideration for the sale and purchase of the Property pursuant to the Agreement

the director(s) of the Company

the date which is 20 days after the date of the Agreement

the period from the date of the Agreement until the Due Diligence Expiration Date

Chicago Title Insurance Company

the Company and its subsidiaries

Hong Kong dollars, the lawful currency of Hong Kong

the Hong Kong Special Administrative Region of the PRC

Hylan Investment, Inc., a corporation incorporated in accordance with the laws of California, U.S. and is an indirect wholly-owned subsidiary of the Company

independent third party(ies) who is/are not connected person(s) of the Company and is/are independent of and not connected with the Company and Directors, chief executives, controlling shareholders and substantial shareholders of the Company or any of its subsidiaries or their respective associates

the Rules Governing the Listing of Securities on the Stock Exchange

- 5 -

''PRC''	the People's Republic of China which, for the purpose of
	this announcement, excludes Hong Kong, the Macau Special
	Administrative Region of the People's Republic of China
	and Taiwan

''Property''

''Shareholder(s)'' ''Shares'' ''Stock Exchange'' ''U.S.''

''US$''

''Vendor''

''%''

The PRC, 26 November 2019

the property located at 200 West Ocean Boulevard, Long Beach, California, U.S.

holder(s) of the Shares

the shares of the Company

the Stock Exchange of Hong Kong Limited

the United States of America

United States dollars, the lawful currency of the U.S.

A-May Investment, LLC, a limited liability Company incorporated in accordance with the laws of California, U.S.

per cent

By order of the Board

Hailan Holdings Limited

Chairperson

Zhou Li

For the purpose of this announcement, translations of US$ into HK$ or vice versa have been calculated by using an exchange rate of US$1.00 equal to HK$7.83. Such exchange rate has been used, where applicable, for the purpose of illustration only and does not constitute a representation that any amounts were, may have been or will be exchanged at such rate or any other rates or at all.

As at the date of this announcement, the executive Directors are Ms. Zhou Li, Ms. Fan Wenyi and Mr. Chen Zhonghua; the non-executive Director is Ms. Yao Yu; and the independent non-executive Directors are Mr. Li Yong, Mr. E Junyu and Dr. Zhao Guoqing.

- 6 -