Sino Harbour : VERY SUBSTANTIAL DISPOSAL TRANSACTION-LAND RESUMPTION

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Sino Harbour Holdings Group Limited ဏಥછٰණྠϞࠢʮ̡

(Incorporated in Bermuda with limited liability)

(Stock Code: 1663)

VERY SUBSTANTIAL DISPOSAL TRANSACTION

LAND RESUMPTION

LAND RESUMPTION

On 26 March 2021, Fenghuang Jincheng, an indirect non-wholly-owned subsidiary of the Company, entered into the Land Resumption Agreement with the Local Authority, in respect of the Land Resumption. Pursuant to the Land Resumption Agreement, Fenghuang Jincheng shall surrender the Resumed Land to the Local Authority at a consideration by way of cash compensation of RMB222,760,000.

IMPLICATIONS UNDER THE LISTING RULES

As one or more of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the Land Resumption exceed 75%, the Land Resumption constitutes a very substantial disposal transaction for the Company and is therefore subject to reporting, announcement, circular and Shareholders' approval requirements under Chapter 14 of the Listing Rules.

Pursuant to the Listing Rules, any Shareholder who has a material interest in the Land Resumption and his/her/its close associates will abstain from voting on the relevant resolutions at the SGM. To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, none of the Shareholders has any material interest in the Land Resumption as contemplated under the Land Resumption Agreement and therefore none of the Shareholders and their associates would be required to abstain from voting on the ordinary resolution to approve the Land Resumption Agreement and the transactions contemplated thereunder at the SGM.

GENERAL

A circular containing, among other things, (i) further information in relation to the Land Resumption Agreement and the Land Resumption contemplated thereunder; (ii) an independent valuation report in relation to the Resumed Land; (iii) the notice contemplated convening the SGM; and (iv) other information as required under the Listing Rules is expected to be despatched to the Shareholders on or before 21 April 2021 in accordance with the Listing Rules as more time is required by the Company to prepare the information to be included in such circular.

Completion of the Land Resumption is conditional upon the satisfaction of the conditions precedent. Accordingly, the Land Resumption may or may not proceed. Shareholders and potential investors of the Company are therefore advised to exercise caution when dealing in the Shares.

LAND RESUMPTION

The Board announces that, on 26 March 2021, Fenghuang Jincheng, an indirect non-wholly-owned subsidiary of the Company, entered into the Land Resumption Agreement with the Local Authority, in respect of the Land Resumption. Pursuant to the Land Resumption Agreement, Fenghuang Jincheng shall surrender the Resumed Land to the Local Authority at a consideration by way of cash compensation of RMB222,760,000.

LAND RESUMPTION AGREEMENT

Date

26 March 2021 (after trading hours)

Parties

• (1) Fenghuang Jincheng

• (2) Local Authority

To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, the Local Authority, a government authority in Leping City, Jiangxi Province, the PRC and its ultimate beneficial owner are Independent Third Parties.

Pursuant to the Land Resumption Agreement, Fenghuang Jincheng shall surrender, and the Local Authority shall resume, the Resumed Land.

Resumed Land

The Resumed Land comprises of three parcels of land with an aggregate site area of approximately 209,863.95 sq.m., located at Leping City, Jiangxi Province, the PRC. The Resumed Land has been approved for residential use purpose. Further to the land planning requirement of the Local Government, Fenghuang Jincheng agreed to surrender the Resumed Land to the Local Authority pursuant to the Land Resumption Agreement. As at the date of this announcement, the Resumed Land remained undeveloped and was an idle land held by Fenghuang Jincheng. Pursuant to the Land Resumption Agreement, Fenghuang Jincheng shall surrender the land use rights of the Resumed Land to the Local Authority and arrange for the de-registration of the land title under its name upon the entering of the Land Resumption Agreement.

Compensation and Payment Terms

Pursuant to the Land Resumption Agreement, the total compensation payable to Fenghuang Jincheng for the Land Resumption will be RMB222,760,000, which shall be payable in cash by the Local Authority to Fenghuang Jincheng upon the signing of the Land Resumption Agreement.

The compensation for the Land Resumption was determined after arm's length negotiations between Fenghuang Jincheng and the Local Authority with reference to the laws, regulations, and procedures applicable to resumption of state-owned lands in Leping City, Jiangxi Province, the PRC, and the preliminary indicative valuation of the Resumed Land, assessed by Jones Lang LaSalle Corporate Appraisal and Advisory Limited ("Jones Lang LaSalle"), an independent professional surveyor engaged by Fenghuang Jincheng, of RMB222,200,000 as at 31 January 2021. The Directors consider that the terms of the Land Resumption Agreement are fair and reasonable and in the interest of the Company and the Shareholders as a whole.

Conditions Precedent

Completion of the Land Resumption is subject to satisfaction of the following conditions precedent:

• (1) the passing of resolutions by the Shareholders to approve the Land Resumption Agreement and the Land Resumption contemplated thereunder at the SGM in accordance with the requirements of the Listing Rules; and

• (2) Fenghuang Jincheng having applied for and obtained all approvals, authorisations and permissions from all governmental or regulatory authorities or bodies or other persons as may be required or necessary for the signing, delivery and performance of the Land Resumption Agreement and the Land Resumption contemplated thereunder in accordance with all applicable laws and regulations.

Completion

Completion of the Land Resumption shall take place on the seventh Business Day following the date on which all the conditions precedent have been satisfied (or such other date as may be agreed by the Local Authority and Fenghuang Jincheng in writing). Upon surrender of the Resumed Land, the Resumed Land shall be in good condition without any debt, pledge and/or other encumbrances.

In the event that the conditions precedent of the Land Resumption are not fulfilled, the Land Resumption Agreement shall be terminated, and all payments received by Fenghuang Jingcheng from the Local Authority in connection with the Land Resumption will be refunded without interest to the Local Authority.

REASONS FOR AND BENEFITS OF THE LAND RESUMPTION

The Group is principally engaged in the property development in the second and third tier cities in the PRC. The property projects of the Group include residential properties, detached housing, apartments, retails as well as commercial properties.

The Resumed Land was acquired by Fenghuang Jincheng in 2004. At the time of acquisition, it was originally planned that the Resumed Land will be used for residential. As Fenghuang Jincheng has not been able to obtain a construction permit for the Resumed Land, it is not possible to commence any construction and development on the Resumed Land. The Resumed Land has been put on idle for years. As at the date of this announcement, the Resumed Land remained undeveloped. Accordingly, the Board is of the view that the Land Resumption will not have any material adverse effect on the Group's operation and principal business activities. Further, with reference to the valuation of the Resumed Land as assessed by Jones Lang LaSalle, the compensation for the Land Resumption is considered to be fair and reasonable. Accordingly, the Company is willing to cooperate with the Local Government for the Land Resumption. Furthermore, the proceeds and the estimated gain from the Land Resumption could provide additional cash flow and enhance the working capital situation of the Group.

The Directors (including the independent non-executive Directors) consider that the terms of the Land Resumption Agreement and the Land Resumption contemplated thereunder are on normal commercial terms and are fair and reasonable and in the interests of the Company and its Shareholders as a whole.

Financial Effects of the Land Resumption

Base on the latest audited financial statements as at 31 March 2020, the net book value of the Resumed Land is approximately RMB15,000,000. On account of the compensation of approximately RMB222,760,000, the Company is expected to record an estimated net gain before tax from the Land Resumption of approximately RMB207,760,000. Such estimated gain has not taken into account of any PRC enterprise income tax and other related tax expenses to be or may be charged. The actual amount of the gain from the Land Resumption to be recorded by the Group is subject to audit and will take into account any costs and expenses incurred relating to the Land Resumption, and accordingly, it may be different from the amount stated above. Before completion of the Land Resumption, the cash compensation will be booked in the Group's consolidated statement of financial position as receipt in advance under accrual and other payables. Upon completion of the Land Resumption, the cash compensation will be recognised in the Group's other income and other gains and losses.

No net profits of the Group was attributable to the Resumed Land for the two financial years immediately preceding the date of the Land Resumption Agreement.

Proposed Use of Proceeds

The net proceeds (after deducting the PRC enterprise income tax and professional fees payable in respect of the Land Resumption, in the amount of approximately RMB51,940,000 and approximately RMB400,000, respectively) arising from the Land Resumption will be of approximately RMB155,420,000.

The net proceeds will be used for the repayment of the outstanding balance of consideration for the land use right of land parcels located in Leping City, the PRC, which forms part of the usage for general working capital of the Group. Details of the land parcels were disclosed in the voluntary announcements of the Company dated 8 September and 10 November 2020, respectively.

INFORMATION OF THE PARTIES TO THE LAND RESUMPTION AGREEMENT

Fenghuang Jincheng is a property investment company incorporated in the PRC and an indirect non-wholly-owned subsidiary of the Company, which is owned indirectly as to 51% by the Company and owned directly as to 49% by Jiangxi Dongjing Real Estate Development Co., Ltd. (ϪГ؇౻גήପක೯Ϟࠢʮ̡), which is in turn owned by Mr. Chen Jun (௓ࠏ) and Mr. Chen Liming (௓ኇ׼) as to 65% and 35%, respectively, who are the Independent Third Parties.

The Local Authority is a government authority in Leping City, Jiangxi Province, the PRC and, for the purpose of the Land Resumption, is the local authority responsible for the implementation of the Land Resumption and the preliminary organization work of listing-for-sale of the Resumed Land.

IMPLICATIONS UNDER THE LISTING RULES

As one or more of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the Land Resumption exceed 75%, the Land Resumption constitutes a very substantial disposal for the Company and is therefore subject to reporting, announcement, circular and Shareholders' approval requirements under Chapter 14 of the Listing Rules.

Pursuant to the Listing Rules, any Shareholder who has a material interest in the Land Resumption and his/her/its close associates will abstain from voting on the relevant resolutions at the SGM. To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, none of the Shareholders has any material interest in the Land Resumption as contemplated under the Land Resumption Agreement and therefore none of the Shareholders and their associates would be required to abstain from voting on the ordinary resolution to approve the Land Resumption Agreement and the Land Resumption contemplated thereunder at the SGM.

GENERAL

A circular containing, among other things, (i) further information in relation to the Land Resumption Agreement and the Land Resumption thereunder; (ii) an independent valuation report in relation to the Resumed Land; (iii) the notice contemplated convening the SGM; and (iv) other information as required under the Listing Rules is expected to be despatched to the Shareholders on or before 21 April 2021 in accordance with the Listing Rules as more time is required by the Company to prepare the information to be included in such circular.

Completion of the Land Resumption is conditional upon the satisfaction of the conditions precedent. Accordingly, the Land Resumption may or may not proceed. Shareholders and potential investors of the Company are therefore advised to exercise caution when dealing in the Shares.

DEFINITIONS

"associate(s)"	has the meaning ascribed to it under the Listing Rules
"Board"	the board of Directors
"Business Day"	a day on which banks of Hong Kong are generally open for
ordinary banking business (excluding Saturdays, Sundays and
public holidays in Hong Kong)
"Company"	Sino Harbour Holdings Group Limited, a company incorporated
in Bermuda, the shares of which are listed on the Main Board
of the Stock Exchange
-6-

"connected person(s)"

"Directors(s)"

has the meaning ascribed to it under the Listing Rules the directors of the Company

"Fenghuang Jincheng"

Leping City Fenghuang Jincheng Industry Co., Ltd. (ᆀ̻ ̹ჾ਑ږ༐ྼุϞࠢʮ̡), a company incorporated in the PRC with limited liability and an indirect non-wholly-owned subsidiary of the Company

"Group"

the Company and its subsidiaries

"Independent Third Party(ies)"

a person or company who or which is, to the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, independent of and not connected with the Company and its connected persons

"Land Resumption"

the resumption of the Resumed Land by the Local Authority pursuant to the terms and conditions of the Land Resumption Agreement

"Land Resumption Agreement"

an agreement dated 26 March 2021 entered into between Fenghuang Jincheng and the Local Authority in relation to the Land Resumption

"Listing Rules"

the Rules Governing the Listing of Securities on the Stock Exchange

"Local Authority"

Leping City Natural Resources and Planning Bureau (ᆀ̻ ̹І್༟๕ձ஝ྌ҅), being a PRC government authority entrusted by the local government of Leping City to be responsible for, among others, the implementation of the Land Resumption

"Local Government"

the People's Government of Leping City, Jiangxi Province, the PRC

"PRC" or "China"

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

"Resumed Land"	the land located at the Hushan Meiyan Reclamation Farm,
Leping City, Jiangxi Province, the PRC with an aggregate site
area of approximately 209,863.95 sq.m., which is intended
to be resumed by the Local Authority pursuant to the Land
Resumption Agreement
"RMB"	Renminbi, the lawful currency of the PRC
"SGM"	a special general meeting of the Company to be convened
and held for the purpose of considering and, if thought fit,
approving the Land Resumption Agreement and the Land
Resumption contemplated thereunder
"Share(s)"	ordinary shares of the Company
"Shareholder(s)"	holders of the Shares
"sq.m."	square meter
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"%"	percent
Hong Kong, 26 March 2021

By Order of the Board

Sino Harbour Holdings Group Limited

Wong Lam Ping

Chairman, Chief Executive Officer, Executive Director and General Manager

As at the date of this announcement, the Board comprises eight Directors, including four executive Directors, namely Mr. WONG Lam Ping (Chairman, Chief Executive Officer and General Manager), Mr. SHI Feng (Deputy Chairman), Mr. WONG Lui and Ms. GAO Lan; one non-executive Director, namely Mr. CHAN Kin Sang; and three independent non-executive Directors, namely Mr. XIE Gang, Mr. HE Dingding and Mr. WONG Ping Kuen.