FINELAND REAL ESTATE SERVICES GROUP LIMITED …360storage.hkej.com/ipo/08376.pdf · If you are in any doubtabout any of the contents of this prospectus, you should obtain independent

SOLE SPONSOR SOLE BOOKRUNNER AND SOLE LEAD MANAGER

FINELAND REAL ESTATE SERVICES GROUP LIMITED

方圓房地產服務集團有限公司(incorporated in the Cayman Islands with limited liability)

Stock Code: 8376

If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.

Fineland Real Estate Services Group Limited方圓房地產服務集團有限公司

(Incorporated in the Cayman Islands with limited liability)

LISTING ON THE GROWTH ENTERPRISE MARKETOF THE STOCK EXCHANGE OF HONG KONG LIMITED

BY WAY OF SHARE OFFER

Number of Offer Shares : 100,000,000 SharesNumber of Public Offer Shares : 10,000,000 Shares (subject to reallocation)

Number of Placing Shares : 90,000,000 Shares (subject to reallocation)Offer Price : Not more than HK$0.80 per Offer Share and

not less than HK$0.55 per Offer Share(payable in full on application in Hong Kongdollars) plus brokerage fee of 1%, SFCtransaction levy of 0.0027% and StockExchange trading fee of 0.005%, subject torefund

Nominal value : HK$0.01 per ShareStock code : 8376

Sole Sponsor

Sole Bookrunner and Sole Lead Manager

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing CompanyLimited take no responsibility for the contents of this prospectus, make no representation as to its accuracy or completeness and expresslydisclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of thisprospectus.

A copy of this prospectus, having attached thereto the documents specified in the paragraph headed ‘‘Documents delivered to the Registrarof Companies in Hong Kong’’ in Appendix V to this prospectus, has been registered by the Registrar of Companies in Hong Kong asrequired by section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of HongKong). The Securities and Futures Commission and the Registrar of Companies in Hong Kong take no responsibility for the contents ofthis prospectus or any other document referred to above.

The Offer Price is expected to be fixed by the Price Determination Agreement to be entered into between our Company and the SoleBookrunner (for itself and on behalf of the Underwriters) on the Price Determination Date, which is expected to be on or around Tuesday,7 November 2017 or such later date as may be agreed between our Company and the Sole Bookrunner (for itself and on behalf of theUnderwriters). The Offer Price will not be more than HK$0.80 per Offer Share and is expected to be not less than HK$0.55 per OfferShare unless otherwise announced. If our Company and the Sole Bookrunner (for itself and on behalf of the Underwriters) are unable toreach an agreement on the Offer Price by Monday, 13 November 2017, the Share Offer will not become unconditional and will lapse.

The Sole Bookrunner (for itself and on behalf of the Underwriters) may, with the consent of our Company, reduce the Offer Price rangeand/or the number of Offer Shares below to that stated in this prospectus at any time prior to the morning of the last day for lodgingapplications under the Public Offer. If this occurs, notice of reduction of the indicative Offer Price range and/or the number of OfferShares will be published on the Stock Exchange’s website at www.hkexnews.hk and the website of our Company atwww.finelandassets.com.

The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities law of the United States ofAmerica and may not be offered, sold, pledged, or transferred within the United States of America, except pursuant to an exemption from,or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in accordance with any applicable U.S.securities law.

Prior to making any investment decision, prospective investors should consider carefully all the information set out in this prospectus,including the risk factors set out in the section headed ‘‘Risk Factors’’ in this prospectus.

The obligations of the Underwriters under the Underwriting Agreements in respect of the Offer Shares, are subject to termination by theSole Bookrunner (for itself and on behalf of the Underwriters) if certain circumstances arise prior to 8:00 a.m. on the Listing Date. Suchcircumstances are set out in the section headed ‘‘Underwriting — Underwriting arrangements and expenses — Grounds for termination’’ inthis prospectus. It is important that you carefully read that section for further details.

IMPORTANT

31 October 2017

GEM has been positioned as a market designed to accommodate companies to which ahigher investment risk may be attached than other companies listed on the StockExchange. Prospective investors should be aware of the potential risks of investing in suchcompanies and should make the decision to invest only after due and careful consideration.The greater risk profile and other characteristics of GEM mean that it is a market moresuited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securitiestraded on GEM may be more susceptible to high market volatility than securities tradedon the Main Board of the Stock Exchange and no assurance is given that there will be aliquid market in the securities traded on GEM.

The principal means of information dissemination on GEM is publication on theinternet website operated by the Stock Exchange. Listed companies are not generallyrequired to issue paid announcements in gazetted newspapers. Accordingly, prospectiveinvestors should note that they need to have access to the website of the Stock Exchange atwww.hkexnews.hk in order to obtain up-to-date information on GEM listed issuers.

CHARACTERISTICS OF GEM

– i –

If there is any change in the following expected timetable, we will issue an announcement onthe website of the Stock Exchange at www.hkexnews.hk and the website of our Company atwww.finelandassets.com.

Latest time to complete electronic applications underthe White Form eIPO service throughthe designated website at www.eipo.com.hk(2). . . . . . . 11:30 a.m. on Tuesday, 7 November 2017

Application lists of the Public Offer open(3) . . . . . . . . . . . 11:45 a.m. on Tuesday, 7 November 2017

Latest time to lodge WHITE and YELLOW Application Formsand to give electronic application instructionto HKSCC(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon on Tuesday, 7 November 2017

Latest time to complete payment of White Form eIPOapplications by effecting internet banking transfer(s)or PPS payment transfer(s). . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon on Tuesday, 7 November 2017

Application lists of the Public Offer close(3) . . . . . . . . . . 12:00 noon on Tuesday, 7 November 2017

Expected Price Determination Date(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 7 November 2017

Announcement of the final Offer Price, the level ofindication of interest in the Placing, the level ofapplications in the Public Offer, and the basis of allocationof the Public Offer Shares to be published (a) in The Standard(in English) and the Hong Kong Economic Journal (in Chinese);(b) on the website of our Company at www.finelandassets.com and(c) the website of the Stock Exchange at www.hkexnews.hkon or before . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 14 November 2017

Results of allocations in the Public Offer (with successfulapplicants’ identification document numbers, where applicable)to be available through a variety of channels as describedin the section headed ‘‘How to apply for Public Offer Shares— 11. Publication of Results’’ in this prospectus from . . . . . . . . . . . Tuesday, 14 November 2017

Results of allocations in the Public Offer will be available atwww.iporesults.com.hk with a ‘‘search by ID number/BusinessRegistration Number’’ function from. . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 14 November 2017

Despatch/Collection of share certificates in respect ofwholly or partially successful applications pursuantto the Public Offer on or before(6)(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 14 November 2017

EXPECTED TIMETABLE(1)

– ii –

Despatch/Collection of e-Refundpayment instructions/refund cheques inrespect of wholly successful applications ifthe final Offer Price is less than the price payableon application (if applicable) and wholly orpartially unsuccessful applicationspursuant to the Public Offer on or before(7)(8) . . . . . . . . . . . . . . . . . . . Tuesday, 14 November 2017

Dealings in the Shares on GEM to commence at 9:00 a.m. on . . . . Wednesday, 15 November 2017

Notes:

1. In this prospectus, unless otherwise stated, all times and dates refer to Hong Kong local times and dates.

2. You will not be permitted to submit your application through the designated website at www.eipo.com.hk after

11:30 a.m. on the last day for submitting applications. If you have already submitted your application and obtained

a payment reference number from the designated website prior to 11:30 a.m., you will be permitted to continue the

application process (by completing payment of application money) until 12:00 noon on the last day for submitting

applications, when the application lists close.

3. If there is a ‘‘black’’ rainstorm warning signal or a tropical cyclone warning signal number 8 or above is in force in

Hong Kong at any time between 9:00 a.m. and 12:00 noon on Tuesday, 7 November 2017, the application lists will

not open on that day. For further information, see ‘‘How to Apply for Public Offer Shares — 10. Effect of Bad

Weather on the Opening of the Application Lists’’.

4. Applicants who apply by giving electronic application instructions to HKSCC should refer to ‘‘How to Apply for

Public Offer Shares — 6. Applying by giving electronic application instructions to HKSCC via CCASS’’.

5. The Price Determination Date is scheduled on Tuesday, 7 November 2017 (or such later date as agreed between our

Company and the Sole Bookrunner (for itself and on behalf of the Underwriters)). If the Sole Bookrunner (for itself

and on behalf of the Underwriters) and our Company are unable to reach an agreement on the Offer Price by

Monday, 13 November 2017, the Share Offer will not become unconditional and will lapse.

6. Share certificates for the Offer Shares are expected to be issued on or before Tuesday, 14 November 2017 but will

only become valid certificates of title provided that the Share Offer becomes unconditional in all respects and

neither of the Underwriting Agreements has been terminated in accordance with its terms before 8:00 a.m. on the

Listing Date. Investors who trade the Shares on the basis of publicly available allocation details prior to the receipt

of share certificates or prior to the share certificates becoming valid certificates of title do so entirely at their own

risk.

7. Applicants who have applied on WHITE Application Forms or through White Form eIPO service for 1,000,000 or

more Public Offer Shares under the Public Offer may collect their refund cheques and share certificates (as

applicable) in person from our Hong Kong Share Registrar, Computershare Hong Kong Investor Services Limited at

Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong from 9:00 a.m. to

1:00 p.m. on Tuesday, 14 November 2017. Applicants being individuals who opt for personal collection must not

authorise any other person to make collection on their behalf. Applicants being corporations who opt for personal

collection must attend by their authorised representatives bearing a letter of authorisation from their corporation

stamped with the corporation’s chop. Both individuals and authorised representatives of corporations must produce,

at the time of collection, identification and (where applicable) documents acceptable to our Hong Kong Share

Registrar.


– iii –

Applicants who apply with YELLOW Application Forms for 1,000,000 or more Public Offer Shares under the

Public Offer may collect their refund cheques (where relevant) in person but may not collect their share certificates,

which will be deposited into CCASS for credit to their designated CCASS Participants’ stock accounts or CCASS

Investor Participant stock accounts, as appropriate. The procedures for collection of refund cheques for YELLOWApplication Form applicants are the same as those for WHITE Application Form applicants.

Uncollected share certificates (if applicable) and refund cheques (if applicable) will be despatched by ordinary post

and at the own risk of the applicants shortly after the expiry of the time for collection at the date of despatch of

refund cheque as described in ‘‘How to Apply for Public Offer Shares — 14. Despatch/Collection of share

certificates and refund monies’’.

8. e-Refund payment instructions/refund cheques will be issued in respect of wholly or partially unsuccessful

application and also in respect of successful applications in the event that the final Offer Price is less than the price

per Public Offer Share payable on application. Part of your Hong Kong identity card number/passport number or if

you are joint applicants, part of the Hong Kong identity card number/passport number of the first-named applicant,

provided by you may be printed on your refund cheque, if any. Such data would also be transferred to a third party

for refund purpose. Your banker may require verification of your Hong Kong identity card number/passport number

before encashment of your refund cheque. Inaccurate completion of your Hong Kong identity card number/passport

number may lead to delay in encashment of or may invalidate your refund cheque.

Investors may obtain a printed copy of this prospectus, free of charge, during normal businesshours from any of the designated branches of the receiving banks and the designated offices of theSole Sponsor as set out in ‘‘How to apply for the Public Offer Shares’’. An electronic version ofthis prospectus (which is identical to the printed prospectus) can be accessed and downloaded fromthe websites of our Company at www.finelandassets.com and the Stock Exchange atwww.hkexnews.hk under the section headed ‘‘HKExnews > Listed Company Information > LatestListed Company Information’’.

Distribution of this prospectus into any jurisdiction other than Hong Kong may be restrictedby law. Persons into whose possession this prospectus come (including, without limitation, agents,custodians, nominees and trustees) should inform themselves of, and observe, any suchrestrictions. Any failure to comply with such restrictions may constitute a violation of thesecurities laws of any such jurisdiction.

For details of the structure of the Share Offer, including the conditions of the Share Offer,and the procedures for application for the Public Offer Shares, you should read ‘‘Structure andConditions of the Share Offer’’ and ‘‘How to apply for Public Offer Shares’’, respectively.

If the Public Offer does not become unconditional or is terminated in accordance with itsterms, the Public Offer will not proceed. In such case, our Company will make an announcementas soon as practicable thereafter.


– iv –

You should rely only on the information contained in this prospectus to make yourinvestment decision. The Company, the Sole Sponsor, the Sole Bookrunner, the Sole LeadManager and the Underwriters have not authorised any persons to provide you with informationthat is different from what is contained in this prospectus. Any information or representationnot made nor contained in this prospectus must not be relied on by you as having beenauthorised by the Company, the Sole Sponsor, the Sole Bookrunner, the Sole Lead Manager, theUnderwriters, any of their respective directors or affiliates of any of them, or any other personsor parties involved in the Share Offer. The contents on the Company’s website atwww.finelandassets.com do not form part of this prospectus.

Page

Characteristics of GEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Forward-looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Information about this Prospectus and the Share Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Directors and Parties Involved in the Share Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Waivers from Strict Compliance with the GEM Listing Rules . . . . . . . . . . . . . . . . . . . . . . 49

Industry Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Regulatory Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

History, Reorganisation and Corporate Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Connected Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

Directors, Senior Management and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145

Relationship with Controlling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

CONTENTS

– v –

Substantial Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174

Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179

Future Plans and Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215

Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225

Structure and Conditions of the Share Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235

How to Apply for Public Offer Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241

Appendix I — Accountant’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Appendix II — Unaudited Pro Forma Financial Information . . . . . . . . . . . . . . . . . . . . II-1

Appendix III — Summary of the Constitution of the Companyand Cayman Islands Company Law . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1

Appendix IV — Statutory and General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

Appendix V — Documents Delivered to the Registrar ofCompanies and Available for Inspection . . . . . . . . . . . . . . . . . . . . . . . V-1

CONTENTS

– vi –

OVERVIEW

We are an established real estate agent in Guangzhou. We offer services covering differentstages of the life cycle of a property development project, from the planning phase, to promotionand sales, to after-sales services. We provide our property intermediary services through threemain business segments, namely (i) property research and consultancy services, (ii) comprehensivereal estate agency services in the primary and secondary property markets, and (iii) integratedbusiness services.

. Our property research and consultancy services generally include macroeconomicanalysis of the market, analysis on investment return, market environment analysis,studies on project conditions, development and positioning, formulation of planning anddevelopment strategies for the project, recommendations on construction and mix ofproperties, and recommendations on sales and marketing strategies. We are typicallyengaged directly by property developers for our property research and consultancyservices, and we charge a fixed fee in exchange for these services based on factorsincluding the scope of work and the scale and expected time span of the project.

. Our real estate agency services include the provision of property market information andagency services to our customers.

o For primary market agency services, we facilitate sales of properties in propertydevelopment projects by property developers to potential purchasers, and wereceive a commission directly from the property developer based on the successfulcompletion of sales. For 2015, 2016, and the four months ended 30 April 2017, theaverage commission rates charged by our Group for primary market agencyservices were approximately 1.0%, 1.1%, and 1.0% of the property price,respectively.

o For secondary market agency services, we provide services to owners looking tosell or lease their properties and to potential buyers or tenants looking to buy orrent properties, and we receive a commission from the owner and the buyer ortenant based on the purchase price or the rent. During the Track Record Period, thecommission rates charged by our Group for secondary market agency services weregenerally approximately 1.0% to 3.0% of the property price in the case of sales andgenerally approximately 0.5 to 1.0 time the monthly rent in the case of tenancies.

. Our Integrated Services include Fangyuanbao, Zhaoshangyi and One-stop ServiceCentre offerings. These services aim to add value for our customers, including propertydevelopers, individual customers and companies.

o Our Fangyuanbao platform serves as a referral business and online platform forproperty developers to reach out to a greater number of real estate agents withoutthe individual agents directly entering into business relationships with the propertydeveloper. Where the Fangyuanbao platform is used, we split the commission withany real estate agent that introduces a potential buyer who actually completes onthe purchase of a property. Although Fangyuanbao business contributed revenue ofRMB7.4 million to our Group in 2016, it only generated operating cash flowbefore working capital changes of RMB249,000 because (i) it had to split 51.5% ofthe commission income received from the property developers with the other realestate agents that brought in the buyers; and (ii) it was still at the ramp-up stage ofits development, and therefore incurred considerable expenses (mainly staff costsand advertising expenses of RMB3.2 million) to market the platform to other realestate agents. For example, employees are needed to call on smaller-sized realestate agencies to introduce and market the Fangyuanbao platform since thestrength of the Fangyuanbao platform lies in its database, which will determine thereach and exposure for property developers who engage the Fangyuanbao platformto sell their properties.

o Our Zhaoshangyi business focuses on the leasing of commercial units in primarymarket development projects. Developers pay us a fee based on a multiplier of themonthly rent for commercial units, generally ranging between 0.5 and 2.5 timesduring the Track Record Period.

SUMMARY

– 1 –

o Our One-stop Service Centre business offers a range of value-added services suchas rent collection services, property repair and maintenance services and designand furnishing services, as well as assisting purchasers to obtain ownershipcertificates and apply for mortgages from banks. For the services provided throughour One-stop Service Centre, we generally charge our customers monthly feesbased on a percentage of the rental income from the property. The percentagevaries with the type of service provided. In addition to the fees, we are generallyreimbursed by our customers for any costs incurred by us on their behalf.

For 2015, 2016, and the four months ended 30 April 2017, we provided (i) property researchand consultancy services for 17, 28, and 15 projects, respectively, (ii) primary market real estateagency services for 35, 51, and 42 projects, respectively, and (iii) Fangyuanbao services (whichwe acquired in 2016) for nil, 19, and 9 projects, respectively.

In providing our services, we focus on Guangzhou, as well as elsewhere in the Pearl RiverDelta. According to the DTZ C&W Report, the real estate business in Guangzhou is fragmented,with 485 real estate agencies in Guangzhou at the end of March 2016 and all but two of the top 10agencies, including us, having a less than 4% share of the primary residential market. However,among the 485 real estate agencies, only 185 has outlets and conduct secondary market real estateagency services, among which only 16, including our Group, have more than 10 outlets in themarket. Our customers generally include property developers, property owners, property buyersand tenants. Most of our customers are located in Guangzhou and elsewhere in the Pearl RiverDelta. We have maintained stable relationships with property developers, which may engage us forall three categories of our services.

The following table sets out a breakdown of our revenue by our three business segmentsduring the Track Record Period:

For the year ended 31 December For the four months ended 30 April2015 2016 2016 2017

RMB’000% of

revenue RMB’000% of



revenue(unaudited)

Property research and consultancy 3,133 3.5 3,193 3.0 273 0.8 318 0.7

Real estate agency servicesPrimary 66,485 73.9 70,822 66.6 26,293 78.4 28,213 65.2Secondary 19,121 21.2 22,977 21.6 6,583 19.6 10,400 24.0

Sub-total 85,606 95.1 93,799 88.2 32,876 98.0 38,613 89.2

Integrated ServicesFangyuanbao —

(1)— 7,441 7.0 — — 3,364 7.8

Zhaoshangyi 827 0.9 731 0.7 284 0.9 901 2.1One-stop Service Centre 493 0.5 1,181 1.1 115 0.3 75 0.2

Sub-total 1,320 1.4 9,353 8.8 399 1.2 4,340 10.1

Total revenue of the Group 90,059 100 106,345 100 33,548 100 43,271 100

Note:

(1) No revenue was recorded for fangyuanbao services in 2015 or the four months ended 30 April 2016 becausewe did not acquire the platform until May 2016.

From 2015 to 2016, our revenue increased by RMB16.3 million, or 18.1%, from RMB90.1million to RMB106.3 million, respectively. From 2015 to 2016, our net profit increased byRMB2.4 million, or 18.9%, from RMB12.9 million to RMB15.3 million, respectively. Our netprofit margin remained stable at 14.3% for 2015 and 14.4% for 2016. Our revenue increased by29.0% from RMB33.5 million for the four months ended 30 April 2016 to RMB43.3 million forthe four months ended 30 April 2017. Our net profit decreased by RMB7.7 million, or 109.7%,

SUMMARY

– 2 –

from RMB7.0 million to a net loss of RMB0.7 million over the same period. Excluding the non-recurring listing expenses, we would have recorded a net profit of RMB7.5 million for the fourmonths ended 30 April 2017.

The following table sets out a breakdown of commission received for real estate sales andleasing transactions for our real estate agency services during the Track Record Period:

For the year ended 31 December For the four months ended 30 April2015 2016 2016 2017

RMB’000 % RMB’000 % RMB’000 % RMB’000 %(unaudited)

Commission from sale of properties 79,287 92.6 86,967 92.7 30,906 94.0 35,922 93.0Commission from leasing of

properties 6,319 7.4 6,832 7.3 1,970 6.0 2,691 7.0

Total revenue from real estateagency services 85,606 100 93,799 100 32,876 100 38,613 100

COMPETITIVE STRENGTHS — HIGHLIGHTS

. Broad range of services, catering to different types of customers across different stagesof the real estate development and investment chain

Unlike most real estate agents in Guangzhou and elsewhere in the Pearl River Delta, thebroad range of our services cater to different types of customers across different stages of the realestate development and investment chain, which can avoid the need for our customers to retainseparate providers for these services. Our three main business lines cover customers’ needs fromthe development planning stage of a real estate project to real estate agency services when theproject is completed, as well as value-added after-sales services.

We consider our in-house expertise enabling us to provide property research and consultancyservices for the development planning stage to be a particular benefit. Not only does this providean additional revenue stream, it also helps to deepen our relationships with developers and raiseour profile, enabling us to capture business in other areas, such as primary market real estateagency services.

. Well-recognised brand name in the real estate agency industry

We have a 20-year history in Guangzhou and additionally benefit from the brand recognitionof the Fineland Group. We believe the numerous accolades and recognitions we have garneredover the years — including citations for business integrity and for quality of service —demonstrate our commitment to the industry and show that we are perceived as a reputable andhigh quality service provider. We believe that reputation is critical to the success of real estateagencies and related businesses and that the strength of our reputation will help us to capturefuture growth.

. Experienced management and sales team with expertise in the PRC property market

Our management and sales team has extensive experience in, and in-depth knowledge of, thePRC property market. For example, our chief executive officer and executive Director, Ms. Rong,has worked with us and our related companies for more than 18 years. Unlike many chiefexecutive officers, ours has spent much of her career ‘‘on the front lines’’, beginning in the salesand marketing department in 1999 and progressing through a variety of other departments of theFineland Group before joining our Board in 2014 and rising to chief executive in 2016. Ms.Rong’s knowledge and insight gained throughout her tenure with the Fineland Group has beeninvaluable to the development of our business. In addition to Ms. Rong, some of our Directors,such as Mr. Fong and Ms. Tse, also have extensive experience in the real estate agency servicesbusiness.

SUMMARY

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BUSINESS STRATEGIES — HIGHLIGHTS

. Expand our secondary property real estate agency services by opening more outlets andemploying more sales staff in Guangzhou

To capture the potential growth in sales of secondary properties and to capitalise on thehigher commission rate available for secondary sales, we plan to open more outlets in districts inGuangzhou where new and prestigious residential properties with facilities and supportinginfrastructure are located and to employ more licensed agents to provide secondary property realestate agency services. As at the Latest Practicable Date, we had 39 outlets and 173 qualifiedagents in Guangzhou. Up to 31 December 2019, we aim to open an additional 77 to 117 outlets inGuangzhou and employ 538 to 818 additional employees for these outlets. We expect to fund thisinitiative with the net proceeds from the Share Offer and internal resources.

. Continue to expand our primary property real estate agency services by enhancing ourrelationship with property developers

To continue to expand our primary property real estate agency services, we plan to enhanceour relationship with property developers other than the Fineland Group, in particular by (i)seeking further opportunities with property developers for which we have previously providedprimary market real estate agency services and (ii) promoting our capabilities and experience toother developers in regions where we have provided primary market real estate agency services tocompetitors. We also plan to enhance our market research efforts to enable us to better preparecompetitive tender proposals.

. Further enhance our Group’s brand recognition

To further enhance our brand recognition and emphasise the services we provideindependently of the Fineland Group, we intend to continue lowering the proportion of servicesprovided to the Fineland Group, to launch a range of advertising and promotion campaigns(including on the internet, through social media, and with physical brochures, as well as byparticipating in press conferences for real estate projects we have handled). We expect to focus ongeographical areas where we have provided agency services for development projects, as we willthen be able to leverage our expertise in the area as well as the database of potential purchasersfrom prior transactions or with interest in the area previously gathered.

. Expand our Integrated Services business segment

Because we believe that developers will continue to want to identify commercial tenants earlyin the development process in order to make the commercial units easier to sell and thedevelopment more attractive overall, we intend to expand our Zhaoshangyi offering with greaterin-depth market analysis and enhanced discussion with customers to better understand their needsand focus our marketing efforts on potential tenants most likely to be interested in leasing theproperties in question. We also intend to further develop our One-stop Service Centre business byfocusing our marketing efforts on customers who purchase properties for investment purposes andmay be particularly receptive to services which can save them time and effort in managing theproperties.

SELECTED HISTORICAL FINANCIAL INFORMATION

Selected line items of Consolidated Statements of Comprehensive Income

For the year ended31 December

For the four months ended30 April

2015 2016 2016 2017RMB’000 RMB’000 RMB’000 RMB’000

(unaudited)

Revenue 90,059 106,345 33,548 43,271Profit before income tax 19,005 20,890 10,283 2,270Profit/(loss) and total comprehensive

income for the year/period 12,893 15,327 6,992 (678)

SUMMARY

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Selected line items of Consolidated Statements of Financial Position

As at 31 December As at 30 April2015 2016 2017

RMB’000 RMB’000 RMB’000

Current assets 71,846 80,737 78,710Current liabilities 43,855 49,821 48,834Net current assets 27,991 30,916 29,876Net assets 26,961 30,412 29,734Total assets 72,509 82,264 81,296

Selected line items of Consolidated Statements of Cash Flow

For the year ended31 December

For the four months ended30 April

2015 2016 2016 2017RMB’000 RMB’000 RMB’000 RMB’000

(unaudited)

Operating profit before working capitalchanges 19,349 21,090 10,459 2,308

Changes in working capital (4,715) 12,506 (9,099) 1,051Income tax paid (1,097) (7,287) (741) (1,271)

Net cash generated from operatingactivities 13,537 26,309 619 2,088

Net cash generated from/(used in)investing activities 68 19,746 286 (1,092)

Net cash generated from/(used in)financing activities 5,983 (15,128) (1,312) (4,479)

Net increase/(decrease) in cash and cashequivalents 19,588 30,927 (407) (3,483)

Cash and cash equivalents at beginningof year/period 7,652 27,240 27,240 58,167

Cash and cash equivalents at end ofyear/period,representing bank balances and cash 27,240 58,167 26,833 54,684

Even after excluding the cash flows generated from the transactions with the ControllingShareholders and the cash flows generated from the Fangyuanbao business, the cash flowgenerated from our operating activities in the ordinary and usual course of our business beforechanges in working capital and taxes paid amounted to approximately RMB20.2 million (orapproximately HK$23.1 million) in aggregate for the two years ended 31 December 2016, whichstill exceeds the minimum cash flow requirement under Rule 11.12A of the GEM Listing Rules.

Key financial ratios

The following table sets forth certain key financial ratios for the dates indicated:

As at 31 DecemberFour months

ended30 April 20172015 2016

Return on total assets(1)(4) 18% 19% N/AReturn on equity(2)(4) 48% 50% N/ACurrent ratio(3) 164% 162% 161%

SUMMARY

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Notes:

(1) Return on total assets is derived by dividing net profit for the period by the ending balance of total assets forthe given period.

(2) Return on equity is derived by dividing net profit for the period by the ending balance of total equity for agiven period.

(3) Current ratio is derived by dividing current assets by current liabilities as at the end of the given period.(4) Return on total assets and return on equity for the four months ended 30 April 2017 are not comparable to

those for the years ended 31 December 2015 and 2016.

Return on total assets

Our return on total assets was 18% and 19% in 2015 and 2016, respectively. The slightincrease in return on total assets from 2015 to 2016 was primarily due to the increase in our netprofit as at 31 December 2016 compared with 31 December 2015.

Return on equity

Our return on equity was 48% and 50% in 2015 and 2016, respectively. The increase inreturn on equity from 2015 to 2016 reflected an increase in our net profit, driven by the increasein our revenue.

Current ratio

Our current ratio was 164%, 162%, and 161% as at 31 December 2015 and 2016, and 30April 2017, respectively, reflecting primarily our stable working capital position.

SHAREHOLDER INFORMATION AND RELATIONSHIP WITH OUR CONTROLLINGSHAREHOLDERS

Immediately following the completion of the Capitalisation Issue and the Share Offer(without taking into account any Shares to be issued upon the exercise of options that may begranted under the Share Option Scheme), Mansion Green will directly own approximately 54% ofthe issued share capital of our Company. Mr. Fong, Ms. Tse, Stand Smooth, Mr. Fong’s HoldingCompanies, Mansion Green and Aspiring Vision, will together form a group of ControllingShareholders within the meaning of the GEM Listing Rules and will together controlapproximately 54% of the issued share capital of our Company. For further details, see the sectionheaded ‘‘Relationship with Controlling Shareholders’’. Mansion Green, Stand Smooth, Mr. Fong’sHolding Companies and Aspiring Vision are investment-holding companies and did not have anysubstantive business activities as at the Latest Practicable Date. Mr. Fong is the chairman of ourGroup and one of our non-executive Directors, and Ms. Tse is one of our executive Directors. Fordetails of the biographies of Mr. Fong and Ms. Tse, see ‘‘Directors, Senior Management andEmployees — Directors’’.

During the Track Record Period, we entered into certain transactions with entities controlledby our Controlling Shareholders, namely the Fineland Group, in the ordinary course of ourbusiness and on normal commercial terms, amounting to approximately 58.3%, 42.0%, and 51.4%of our total revenue for 2015, 2016, and the four months ended 30 April 2017, respectively. Suchtransactions, including the provision of pre-sales marketing services, sales agency services, leasingagency services and Integrated Services by our Group to the Fineland Group, will constitutecontinuing connected transactions of our Company under the GEM Listing Rules. Despite thesetransactions with the Fineland Group, our Directors are of the view that there is no operational orfinancial dependence by us on our Controlling Shareholders. For details, see ‘‘ConnectedTransactions — Continuing Connected Transactions Subject to the Reporting, Announcement,Circular and Independent Shareholders’ Approval Requirements’’ and ‘‘Relationship withControlling Shareholders — Independence from our Controlling Shareholders and their respectiveclose associates’’.

The Pre-IPO Investors, including some of our Directors and employees and employees of theFineland Group, have acquired certain Shares from Mansion Green, representing in aggregateapproximately 28% of the total issued share capital of our Company at the time of acquisition.

OFFERING STATISTICS

Market capitalisation at Listing : HK$220 million to HK$320 million

Offer size : 25.0%

SUMMARY

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Offer Price per Share : HK$0.55 to HK$0.80 per Share

Board lot : 4,000

Net proceeds to the Company : HK$34.8 million, assuming an Offer Price of HK$0.675 perOffer Share (being the mid-point of the indicative Offer Pricerange)

Use of proceeds:

. Approximately 80% of the net proceeds, or approximately HK$27.8 million, will be used forexpansion of our secondary and primary market real estate agency services by opening moreoutlets, enhancing our relationships with property developers and employing more sales staffin Guangzhou;

. approximately 6% of the net proceeds, or approximately HK$2.1 million, will be used forexpansion of our Integrated Services business segment, in particular Zhaoshangyi and One-stop Service Centre; and

. approximately 4% of the net proceeds, or approximately HK$1.4 million, will be used forenhancing our Group’s brand recognition;

. the remaining balance of approximately HK$3.5 million, representing approximately 10% ofthe net proceeds, will be used as general working capital and for general corporate purposes.

The implementation plans of the business strategies to achieve our business objectives foreach of the six-month periods from the Latest Practicable Date up to the six months ending 31December 2019 will be funded primarily by the net proceeds from the Share Offer and achieved bythe following means:

Business Objectives Implementation Plan

. Expansion of our secondary andprimary market real estate agencyservices by opening more outlets,enhancing our relationship withproperty developers and employingmore sales staff in Guangzhou

. Open 7–30 additional outlets

. Engage in direct marketing targeted at propertydevelopers

. Employ 48–210 additional employees

. Expansion of our IntegratedServices business segment

. Enhance our marketing effort to promote ourIntegrated Services with the aim of engagingmore customers

. Employ 4–14 additional employees for our One-stop Service Centre and Zhaoshangyi services

. Enhancement of our Group’s brandrecognition

. Engage in various marketing strategies such asinternet keyword search functions on searchengines, official promotional activities on ourWeChat public account, and production ofmerchandise bearing the image of our brandmascot

For details of our future plans and use of proceeds, see ‘‘Future Plans and Use of Proceeds’’.

SUMMARY

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UNAUDITED PRO FORMA ADJUSTED CONSOLIDATED NET TANGIBLE ASSETSATTRIBUTABLE TO THE OWNERS OF THE COMPANY

Unaudited pro forma adjusted consolidated net tangible assets attributable to the owners ofthe Company per Share(1):

Based on an Offer Price of HK$0.55 per Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$0.16

Based on an Offer Price of HK$0.80 per Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$0.22

Notes:

(1) See ‘‘Financial Information — Unaudited Pro Forma Adjusted Net Tangible Assets’’ for further detailsregarding the assumptions used and the calculation method.

(2) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of theGroup attributable to owners of the Company to reflect any trading results or other transactions of the Groupentered into subsequent to 30 April 2017.

(3) The settlement of dividend payable amounting to RMB14.6 million included in the consolidated net tangibleassets of the Group as at 30 April 2017 has no impact on the unaudited pro forma adjusted consolidated nettangible assets attributable to the owners of the Company per Share.

DIVIDENDS

An interim dividend of RMB11.9 million was declared in 2016 by a group company to itsequity holders at the time, out of which RMB4.4 million was paid in the same year. In 2016, wealso paid RMB9.2 million of dividends which were declared for previous years. A total ofRMB14.6 million declared but unpaid dividends, comprising the outstanding RMB7.5 millionportion of the RMB11.9 million declared dividends in 2016 and the remaining outstandingRMB7.1 million declared dividends for previous years, will be paid out of our distributable profitbefore the Listing and will be financed by our cash flow from operations or available internal cashresources.

The declaration of future dividends is subject to the discretion of our Board of Directors andthe approval of our Shareholders, which we expect will take into account a range of factors,including our financial results, our Shareholders’ interests, general business condition andstrategies, our capital requirements, contractual restrictions on the payment of dividends by us toour Shareholders or by our subsidiaries to us, taxation considerations, possible effects on ourcreditworthiness, statutory and regulatory restrictions and any other factors our Board of Directorsmay deem relevant. Our Board currently has not formulated a specific dividend payment plan for2017 or any year thereafter; however, we will re-evaluate our dividend policy annually. For furtherdetails, see ‘‘Financial Information — Dividends’’.

LISTING EXPENSES

Assuming an Offer Price of HK$0.675 per Share (being the mid-point of the indicative OfferPrice range), the total underwriting commission (exclusive of any discretionary incentive fee) andlisting expenses which are payable by us are estimated to be approximately RMB29.0 million inaggregate. We incurred approximately RMB10.9 million of listing expenses during the TrackRecord Period, of which RMB2.7 million was recorded as prepayments and RMB8.2 million wascharged as expenses to our consolidated statements of comprehensive income. Prior to the Listing,we expect to further charge RMB12.5 million of estimated listing expenses to our consolidatedstatements of comprehensive income and to record RMB5.6 million of the estimated listingexpense as prepayment. We expect that RMB8.3 million will be accounted for as a deduction fromequity following the Listing under the relevant accounting standards. These figures are subject toadjustments based on the actual amount incurred or to be incurred. For further details, see‘‘Financial Information — Listing Expenses’’.

SUMMARY

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RECENT DEVELOPMENTS

Over the past ten years, various government departments have introduced policies andmeasures from time to time to encourage or restrict the housing supply and housing prices. Thesepolicies and measures may affect the transaction volume and prevailing prices in the propertymarket, which may in turn affect our business performance to a certain extent. For example, inMarch 2017, the Guangzhou government issued notices which, among other things, restricted theability of certain unqualified non-Guangzhou residents to purchase a property and imposed aholding period before a new property buyer could transfer or sell the property, with the aim ofslowing the rapid increase in housing prices and to prevent volatility and excess speculation. In theshort term, the Guangzhou market experienced a drop in total transaction volume of approximately27.9% in the first nine months of 2017 compared to the first nine months of 2016. However, theaverage selling price of primary commodity residential properties in Guangzhou for the first ninemonths of 2017 increased slightly by 2.2% from the average selling price of primary commodityresidential properties in Guangzhou for 2016. In general, we believe that despite the potentialshort-term negative impact on the property market created by those policies and measures, they areunlikely to have a long-term material adverse effect on the property market. Based on ourobservations of the effects of the various restrictive measures and control policies on Guangzhouproperty market in the past few years, such measures and policies may result in a slight dip intransaction figures, such as volume and price, for a temporary period. However, as many otherfactors play a role, the market generally recovers and continues to trend upwards. For details, see‘‘Regulatory Overview — Policies and measures on controlling and adjusting on the housingmarket’’ and ‘‘Industry Overview — Analysis of the Property Market in Pearl River DeltaIncluding Guangzhou — Overview of property market in Guangzhou’’. These measures have nothad a significant impact on our latest business and financial performance. Since 30 April 2017 andup to the date of this prospectus, there has been no industry, market or regulatory development orany other event that our Directors expect would materially affect our operating results andfinancial conditions.

Potential investors should note that our financial results for 2017 will be negatively impacteddue to the non-recurring listing expenses to be charged to our consolidated statement ofcomprehensive income in 2017 described in the section headed ‘‘Listing Expenses’’ above, andmay not be comparable to the financial performance of our Group in the past. We may even recorda net loss for the year, driven in large part by these listing expenses (coupled with the maintenanceand compliance costs to be incurred after the Listing).

Subsequent to the Track Record Period and up to the Latest Practicable Date, there was nomaterial change to our principal business, which continued to include the provision of real estateagency services. Save as disclosed in the preceding paragraph, our Directors confirm that there hasbeen no material adverse change in our financial or trading position or prospects since 30 April2017, being the date of our latest audited financial statements, up to the date of this prospectus.

Based on the unaudited financial information of our Group, our revenue for the first eightmonths ended 31 August 2017 was higher than that for the corresponding period in 2016, whichwas mainly attributable to an increase in our revenue from provision of (i) Integrated Services, and(ii) primary and secondary real estate agency services. Subsequent to the Track Record Period andup to 31 August 2017, we were engaged for primary market real estate agency services for over 39new projects, and we opened seven new outlets in Guangzhou.

NON-COMPLIANCE

During the Track Record Period, we had not made full contributions to the social insuranceand housing provident funds. During the Track Record Period, our total unpaid contributions forthe social insurance and housing provident funds amounted to RMB7.5 million and RMB1.4

SUMMARY

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million, respectively, and the applicable late payment fee which we may be ordered by the relevantgovernment authorities to pay amounted to RMB1.2 million. For further details, see ‘‘Business —

Non-Compliance’’.

RISK FACTORS

There are risks associated with any investment. Some of the particular risks of investing inthe Shares are set out in the section headed ‘‘Risk Factors’’. You should read that entire sectioncarefully before deciding to invest in the Shares. Without limiting that section, some of the risksrelating to an investment in the Shares include the following:

. Our business is heavily dependent on the state of the real estate market inGuangzhou and elsewhere in the Pearl River Delta.

As all of our current projects are located in Guangzhou and elsewhere in the Pearl RiverDelta, and as one of our business strategies is to strengthen our established position in thisarea, any adverse movements in the supply of, or demand for, properties in this area, or inprices paid for such properties, may have a material adverse effect on our business, results ofoperations, and financial position. These property markets may be affected by local, regional,national, and global factors. We expect that demand for properties and property prices inGuangzhou and elsewhere in the Pearl River Delta will continue to be affected bymacroeconomic control measures and restrictive measures implemented by the PRCgovernment from time to time, which may have a dampening effect on property markets and,in turn, could have a material adverse effect on our business, results of operations, andfinancial position.

. Competition in the real estate agency business is intense.

The real estate agency business in Guangzhou and elsewhere in the Pearl River Delta isfragmented. Some of our competitors may be better positioned than us, with greater resourcesand longer standing relationships. The intensity of the competition may result in a shortage ofquality real estate agents and other employees, increased compensation costs for agents andemployees in order to retain them, and lower commission rates in both the primary andsecondary markets, any of which could materially and adversely affect our business, resultsof operations, and financial position.

In addition, the real estate market in Guangzhou and elsewhere in the Pearl River Deltais always evolving, and some property developers, for example, have been conducting self-marketing for their own projects without engaging real estate agencies. If we are unable torespond to changes in market conditions more quickly or more effectively than ourcompetitors or otherwise to maintain or enhance our competitiveness, our business, results ofoperations and financial position could be adversely affected.

Also, in light of the intense competition, we may not be able to find appropriate sitesfor new outlets or to hire quality real estate agents and other employees to implement ourstrategies to capture the potential growth in the secondary property market in Guangzhou.

. Our largest customer is our parent, the Fineland Group, and any disruption in theflow of business from them would have a material adverse effect on our business.

During the Track Record Period, our largest customer was our parent, the FinelandGroup, which accounted for 58.3%, 42.0%, and 51.4% of our total revenue for 2015, 2016and the four months ended 30 April 2017, respectively. Should there be a disruption in theflow of business from the Fineland Group — because of a deterioration in their business or asouring of our business relationship, or for any other reason — and should we fail to findalternative property developers to engage us to provide primary market real estate agencyservices in respect of a similar number of real estate development projects, our business,results of operations, and financial position would be materially and adversely affected.

SUMMARY

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In this prospectus, unless the context otherwise requires, the following expressions havethe following meanings.

‘‘Application Form(s)’’ WHITE Application Form(s), YELLOW application Form(s)and GREEN Applicat ion Form(s) , individual ly andcollectively, as the context may require

‘‘Articles’’ or ‘‘Articles ofAssociation’’

the articles of association of our Company (as amended fromtime to time), a summary of which is set out in ‘‘Appendix III— Summary of the Constitution of the Company and CaymanIslands Company Law’’ to this prospectus

‘‘Aspiring Vision’’ Aspiring Vision Holdings Limited, a company incorporatedwith limited liability on 15 February 2017 in the BVI, whichis wholly-owned by Ms. Tse, and one of our ControllingShareholders

‘‘Board’’ or ‘‘Board of Directors’’ the board of Directors of our Company

‘‘Business Day’’ or ‘businessday’

a day on which banks in Hong Kong are generally open to thepublic for normal banking business and which is not aSaturday, Sunday or public holiday in Hong Kong

‘‘BVI’’ the British Virgin Islands

‘‘CAGR’’ compound annual growth rate, a method of assessing theaverage growth of a value over time

‘‘Capitalisation Issue’’ the allotment and issue of 299,999,800 Shares to be madeupon the capitalisation of certain sums standing to the creditof the share premium account of our Company as furtherdescribed in the paragraph headed ‘‘A. Further Informationabout our Company and our Subsidiaries — 3. Writtenresolutions of our Shareholders passed on 23 October 2017’’in Appendix IV to this prospectus

‘‘CCASS’’ the Central Clearing and Settlement System established andoperated by HKSCC

‘‘CCASS Clearing Participant’’ a person admitted to participate in CCASS as a direct clearingparticipant or general clearing participant

‘‘CCASS Custodian Participant’’ a person admitted to participate in CCASS as a custodianparticipant

DEFINITIONS

– 11 –

‘‘CCASS Investor Participant’’ a person admitted to participate in CCASS as an investorparticipant who may be an individual or joint individuals or acorporation

‘‘CCASS Participant’’ a CCASS Clearing Participant, a CCASS CustodianParticipant or a CCASS Investor Participant

‘‘Companies Law’’ or ‘‘CaymanCompanies Law’’

the Companies Law (as revised) of the Cayman Islands, asamended or supplemented or otherwise modified from time totime

‘‘Companies (Winding up andMiscellaneous Provisions)Ordinance’’

the Companies (Winding up and Miscellaneous Provisions)Ordinance (Chapter 32 of the Laws of Hong Kong), asamended, supplemented or otherwise modified from time totime

‘‘Companies Ordinance’’ the Companies Ordinance (Chapter 622 of the Laws of HongKong), as amended, supplemented or otherwise modified fromtime to time

‘‘Company’’, ‘‘our Company’’ Fineland Real Estate Services Group Limited (方圓房地產服

務集團有限公司), formerly known as Fineland AssetsManagement Holdings Group Limited (方圓資產管理控股集

團有限公司), the holding company of our Group after theReorganisation and the listing vehicle for the Listing, which isan exempted company incorporated in the Cayman Islandswith limited liability on 16 February 2017

‘‘Controlling Shareholders’’ the group of controlling shareholder(s) (having the meaningascribed to it under the GEM Listing Rules) of our Company,namely, Mr. Fong, Ms. Tse, Mr. Fong’s Holding Companies,Stand Smooth, Aspiring Vision and Mansion Green

‘‘Deed of Concert Parties’’ a deed of confirmation dated 31 March 2017 executed by Mr.Fong and Ms. Tse to confirm, agree and acknowledge, amongother things, that they have been parties acting in concert inrelation to our Group since 28 March 2001, details of whichare set out in ‘‘Relationship with Controlling Shareholders —

Our Controlling Shareholders’’

‘‘Deed of Indemnity’’ the deed of indemnity dated 23 October 2017 and executed byour Controlling Shareholders in favour of our Company,particulars of which are set out in the paragraph headed ‘‘E.Other information — 1. Estate duty, tax and otherindemnities’’ in Appendix IV to this prospectus

DEFINITIONS

– 12 –

‘‘Deed of Non-competition’’ the deed of non-competition dated 23 October 2017 andexecuted by our Controlling Shareholders in favour of ourCompany, particulars of which are set out in the sectionheaded ‘‘Relationship with Controlling Shareholders — Non-competition undertaking’’ in this prospectus

‘‘Director(s)’’ or ‘‘our Directors’’ the director(s) of our Company

‘‘DTZ C&W’’ DTZ Cushman & Wakefield Limited (戴德梁行有限公司), anindependent research and consulting firm that provides marketresearch and analysis, which was engaged by our Company toprepare the DTZ C&W Report

‘‘DTZ C&W Report’’ an industry report commissioned by us and independentlyprepared by DTZ C&W in connection with the Share Offer

‘‘Fang Yuan Bao’’ Guangzhou Fang Yuan Bao Network and TechnologyLimited* (廣州房緣寶網絡科技有限公司 ) , a companyestablished under the laws of the PRC with limited liabilityon 17 June 2015 and an indirect wholly-owned subsidiary ofour Company after the Reorganisation

‘‘Fineland Real Estate Services’’ Fineland Real Estate Services Limited (方圓房地產服務有限

公司), formerly known as Fineland Assets ManagementCompany Limited (方圓資產管理有限公司), a companyestablished under the laws of Hong Kong with limitedliability on 16 June 2016 and an indirect wholly-ownedsubsidiary of our Company after the Reorganisation

‘‘Fineland Holdings’’ Fineland Property Services Holdings Limited, formerly knownas Fineland Assets Management Holdings Limited, a companyincorporated in the BVI on 16 February 2017 with limitedliability and is wholly-owned by our Company after theReorganisation

‘‘Fineland Real Estate’’ Fineland Real Estate Holdings Company Limited, anexempted company incorporated in the Cayman Islands withlimited liability on 22 June 2006 which is a wholly-ownedsubsidiary of Widethrive Investments, and one of ourControlling Shareholders

‘‘Fineland Group’’ Fineland Real Estate and its subsidiaries, being our parentgroup

DEFINITIONS

– 13 –

‘‘GD Fineland PropertyDevelopment’’ or ‘‘GD GloryTrade’’

Guangdong Fineland Property Development Limited* (廣東方

圓置業發展有限公司), a company established under the lawsof the PRC with limited liability on 22 June 1995, andsubsequently changed its name to Guangdong Glory TradeCompany Limited* (廣東榮光貿易有限公司), which was heldas to 99% and 1% by Mr. Fong and Mr. Han Shuguang at thetime of establishment

‘‘GEM’’ Growth Enterprise Market of the Stock Exchange

‘‘GEM Listing Rules’’ the Rules Governing the Listing of Securities on GEM, asamended, supplemented or otherwise modified from time totime

‘‘GREEN Application Form(s)’’ the application form(s) to be completed by White Form eIPOService Provider, Computershare Hong Kong InvestorServices Limited

‘‘Group’’, ‘‘our Group’’,‘‘we’’,’’our’’ or ‘‘us’’

our Company and our subsidiaries at the relevant time or,where the context refers to any time prior to our Companybecoming the holding company of our present subsidiaries andbranches, such subsidiaries and branches and the businesscarried on by such subsidiaries and branches or (as the casemay be) our predecessors, and ‘‘we’’, ‘‘our’’ or ‘‘us’’ shall beconstrued accordingly

‘‘Guangzhou Fineland PropertyConsultancy’’

Guangzhou Fineland Property Consultancy Limited* (廣州方

圓地產顧問有限公司), a company established under the lawsof the PRC with limited liability on 17 March 1997, whichwas known as Guangzhou Fineland Sino Property ConsultancyLimited* (廣州方圓中粵物業顧問有限公司) prior to 29September 1997, and an indirect wholly-owned subsidiary ofour Company pursuant to the Reorganisation

‘‘Guangzhou Lexian’’ Guangzhou Lexian Investment Company Limited* (廣州市樂

賢投資有限公司), a company established under the laws ofthe PRC with limited liability on 13 June 2011, theshareholder of which is an Independent Third Party

‘‘GZ Fineland PropertyManagement’’

GZ Fineland Commercial Property Management Limited* (廣州市方圓商業物業經營有限公司), a company established inthe PRC and is a member of the Fineland Group, and aconnected person of our Group upon Listing

DEFINITIONS

– 14 –

‘‘Hai Yuan Bao’’ Guangzhou Hai Yuan Bao Investment Consultancy Limited*(廣州海緣寶投資諮詢有限公司), a company established underthe laws of the PRC with limited liability on 13 May 2016and an indirect wholly-owned subsidiary of our Companyafter the Reorganisation.

‘‘Hero Dragon’’ Hero Dragon Management Limited, a company incorporatedin the BVI on 12 April 2006 with limited liability, which is awholly-owned subsidiary of Fineland Real Estate, and one ofour Controlling Shareholders

‘‘HK$’’ or ‘‘Hong Kong dollars’’ Hong Kong dollar(s), the lawful currency of Hong Kong

‘‘HKFRS’’ Hong Kong Financial Reporting Standards

‘‘HKSCC’’ Hong Kong Securities Clearing Company Limited, a whollyowned subsidiary of Hong Kong Exchanges and ClearingLimited

‘‘Hong Kong’’ or ‘‘HK’’ the Hong Kong Special Administrative Region of the PRC

‘‘Hong Kong Share Registrar’’ Computershare Hong Kong Investor Services Limited

‘‘housing stock’’ residential and commercial units in a property developmentthat were previously unsold (but have the required licences forsale and occupation), units that were pledged to banks by thedeveloper as security, units belonging to creditors, or unitswhich have been purchased from property developers but havenot been lived in or occupied

‘‘Independent Third Party(ies)’’ an individual(s) or a company(ies) who or which is/are notconnected with (within the meaning of the GEM ListingRules) any Directors, chief executive or substantialshareholders (within the meaning of the GEM Listing Rules),of our Company, our subsidiaries or any of their respectiveassociates

‘‘Integrated Services’’ the business segment of our Company that provides value-added services to our customers, including through ourFangyuanbao platform, our Zhaoshangyi business and ourOne-stop Service Centre business

‘‘Latest Practicable Date’’ 23 October 2017, being the latest practicable date prior to theprinting of this prospectus for the purpose of ascertainingcertain information contained in this prospectus prior to itspublication

‘‘Listing’’ listing of the Shares on GEM

DEFINITIONS

– 15 –

‘‘Listing Date’’ the date on which dealings of our Shares on GEM firstcommence, which is expected to be 15 November 2017

‘‘Listing Division’’ the Listing Division of the Stock Exchange

‘‘Luck Health’’ Luck Health Investments Limited (易方投資有限公司), acompany established under the laws of Hong Kong withlimited liability on 24 April 2008

‘‘Mansion Green’’ Mansion Green Holdings Limited, a company incorporated inthe BVI on 15 February 2017 with limited liability, whoseshares are owned as to 70% by Stand Smooth and 30% byAspiring Vision immediately after the Reorganisation, and oneof our Controlling Shareholders

‘‘Memorandum of Association’’ the memorandum of association of our Company (as amendedfrom time to time), a summary of which is set forth inAppendix III to this prospectus

‘‘Metropolitan Dawn’’ Metropol i t an Dawn Hold ings Limi ted , a companyincorporated in the BVI on 27 January 2017 with limitedliability and is wholly-owned by Ms. Rong

‘‘mixed-use’’ in relation to projects the Company is involved with,developments that are primarily residential with a smallportion of retail spaces, sometimes along with parking lots,on the lower or ground levels

‘‘Mr. Fong’’ Mr. Fong Ming (方明), one of our Controlling Shareholdersand our non-executive Director

‘‘Mr. Yi’’ Mr. Yi Ruofeng* (易若峰), one of our executive Directors andthe ultimate beneficial owner of one of our Pre-IPO Investors

‘‘Mr. Fong’s HoldingCompanies’’

includes Hero Dragon, Fineland Real Estate and WidethriveInvestments

‘‘Ms. Rong’’ Ms. Rong Haiming* (容海明), one of our executive Directorsand the ultimate beneficial owner of Metropolitan Dawn, oneof our Pre-IPO Investors

‘‘Ms. Tse’’ Ms. Tse Lai Wa (謝麗華), one of our Controll ingShareholders and our executive Director

‘‘Offer Shares’’ the Public Offer Shares and the Placing Shares

DEFINITIONS

– 16 –

‘‘Offer Price’’ the final offer price per Offer Share in Hong Kong dollars(exclusive of any brokerage fee, SFC transaction levy andStock Exchange trading fee) of being not more than HK$0.80and expected to be not less than HK$0.55, such price to bedetermined on or before the Price Determination Date, asdescribed in the section headed ‘‘Structure and Conditions ofthe Share Offer — Offer Price’’ in this prospectus

‘‘Pearl River Delta’’ the economic zone in Guangdong Province comprisingGuangzhou, Shenzhen, Dongguan, Foshan, Jiangmen,Zhongshan, Zhuhai, and the urban areas of Huizhou andZhaoqing

‘‘Peggo International’’ Peggo International Investment Consultancy Limited, acompany incorporated in Hong Kong with limited liability on23 March 1995, which was held by Independent Third Parties,during the period that it held equity interest in GuangzhouFineland Property Consultancy

‘‘Placing’’ the conditional placing of the Placing Shares by the PlacingUnderwriters on behalf of our Company at the Offer Price asfurther described in ‘‘Structure and Conditions of the ShareOffer — Placing’’

‘‘Placing Shares’’ the 90,000,000 new shares being offered by the Company forsubscription at the Offer Price under the Placing

‘‘Placing Underwriter(s)’’ the group of underwriter(s) led by the Sole Bookrunner, whoare expected to enter into the Placing Agreement

‘‘Placing Agreement’’ the conditional placing agreement relating to the Placing andexpected to be entered into by, among others, our Company,the Controlling Shareholders, the executive Directors, the SoleSponsor, the Sole Bookrunner and the Placing Underwriter(s),as further described in “Underwriting — Placing”

‘‘PRC’’ or ‘‘China’’ the People’s Republic of China, excluding, for the purpose ofthis prospectus, Hong Kong, Macau Special AdministrativeRegion and Taiwan

‘‘Pre-IPO Investments’’ the transact ions as fur ther descr ibed in ‘‘History,Reorganisation and Corporate Structure — Pre-IPOInvestments’’

‘‘Pre-IPO InvestmentAgreements’’

the sale and purchase agreements entered into betweenMansion Green (as vendor) and each of the Pre-IPO Investors(as purchaser), and a ‘‘Pre-IPO Investment Agreement’’ meansany one of them

DEFINITIONS

– 17 –

‘‘Pre-IPO Investors’’ Metropolitan Dawn, Totoro, Kaffir Holding Limited, KingsonPine Holdings Limited, Moxie Holding Limited, KingsonOrient Holdings Limited, Beaming Light Holdings Limited,Meanvalue Holding Limited, Prudent Vision HoldingsLimited, Curassow Holding Limited, Refined StandardHoldings Limited, Akari International Holdings Limited,Thriving International Holdings Limited, Tiffany OrientHoldings Limited, and Adwan Orient Holdings Limited, and a‘‘Pre-IPO Investor’’ means any one of them, further details ofwhich are described in ‘‘History, Reorganisation andCorporate Structure — Pre-IPO Investments — Informationregarding the Pre-IPO Investors’’

‘‘Price DeterminationAgreement’’

the agreement to be entered into by the Sole Bookrunner (foritself and on behalf of the Underwriters) and our Company onthe Price Determination Date to record and fix the Offer Price

‘‘Price Determination Date’’ the date on which the Offer Price is expected to be fixed,which is expected to be on Tuesday, 7 November 2017

‘‘Public Offer’’ the offer by our Company of the Public Offer Shares forsubscription to the public in Hong Kong at the Offer Price(plus brokerage of 1%, SFC transaction levy of 0.0027% andStock Exchange trading fee of 0.005%) as described in‘‘Structure and Conditions of the Share Offer’’ and on andsubject to the terms and conditions stated herein and in theApplication Forms relating thereto

‘‘Public Offer Shares’’ the 10,000,000 new Shares offered by our Company forsubscription at the Offer Price pursuant to the Public Offer (asdescribed in ‘‘Structure and Conditions of the Share Offer’’)

‘‘Public Offer Underwriter(s)’’ the underwriter(s) of the Public Offer named in ‘‘Underwriting— Underwriters — Public Offer Underwriter(s)’’

‘‘Public Offer UnderwritingAgreement’’

the public offer underwriting agreement relating to a publicoffering in Hong Kong of initially 10,000,000 Shares ofHK$0.01 nominal value each in the capital of Fineland RealEstate Services Group Limited, being part of the Share Offerof 100,000,000 Shares, entered into, among others, ourCompany, the Controlling Shareholders, the executiveDirectors, the Sole Sponsor, the Sole Bookrunner and thePublic Offer Underwriter(s) on 30 October 2017, as furtherdescribed in ‘‘Underwriting — Underwriting Arrangementsand Expenses’’

DEFINITIONS

– 18 –

‘‘Reorganisation’’ the corporate reorganisation of our Group prior to the issue ofthis prospectus, details of which are set out in the sectionheaded ‘‘History, Reorganisation and Corporate Structure —

Reorganisation’’ in this prospectus

‘‘RMB’’ Renminbi, the lawful currency of the PRC

‘‘SAFE’’ the State Administration of Foreign Exchange of the PRC

‘‘SAFE Circular No. 13’’ the Notice on the State Administration of Foreign Exchangeon Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies (國家外匯

管理局關於進一步簡化和改進直接投資外匯管理政策的通知)

‘‘SAFE Circular No. 37’’ the Notice on Relevant Issues Concerning Foreign ExchangeAdministration for PRC Residents to Engage in OverseasInvestment and Financing and Round-trip Investment viaSpecial Purpose Vehicles (國家外匯管理局關於境內居民通過

特殊目的公司境外投融資外匯管理有關問題的通知)

‘‘SFC’’ the Securities and Futures Commission of Hong Kong

‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of theLaws of Hong Kong), as amended, supplemented or otherwisemodified from time to time

‘‘Share(s)’’ ordinary share(s) with nominal value of HK0.01 each in theshare capital of our Company

‘‘Shareholder(s)’’ holder(s) of the Share(s)

‘‘Share Offer’’ the Public Offer and the Placing

‘‘Share Option(s)’’ the options which may be granted under the Share OptionScheme

‘‘Share Option Scheme’’ the share option scheme conditionally adopted by ourCompany on 23 October 2017, a summary of the principalterms which is set out in the section headed ‘‘Appendix IV-statutory and General Information’’‘‘D. Share OptionScheme’’ in this prospectus

‘‘Sinoland’’ Sinoland Properties Consultants Limited, a companyincorporated in Hong Kong with limited liability on 25 May1993, which was held by an Independent Third Party duringthe period it held equity interest in Guangzhou PropertyConsultancy

DEFINITIONS

– 19 –

‘‘Sole Bookrunner’’ or‘‘Sole Lead Manager’’

RaffAello Securities (HK) Limited, being a licensedcorporation under the SFO to carry on type 1 (dealing insecurities) and type 4 (advising on securities) regulatedactivities, which has been appointed as the sole bookrunnerand the sole lead manager for the Share Offer

‘‘Sole Sponsor’’ RaffAello Capital Limited, a corporation licensed to carry outtype 6 (advising on corporate finance) regulated activitiesunder the SFO, being the sole sponsor for the Share Offer

‘‘Stand Smooth’’ Stand Smooth Group Limited (立順集團有限公司), a companyincorporated in the BVI on 22 June 2006, which is indirectlywholly-owned by Mr. Fong, and one of our ControllingShareholders

‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

‘‘subsidiary(ies)’’ has the meaning ascribed to it under the Companies Ordinance

‘‘Totoro’’ Totoro Holding Limited, a company incorporated in the BVIon 27 January 2017 with limited liability and is wholly-ownedby Mr. Yi

‘‘Track Record Period’’ the two financial years ended 31 December 2016 and the fourmonths ended 30 April 2017

‘‘Underwriters’’ t he Pub l i c Of fe r Underwr i t e r ( s ) and the P lac ingUnderwriter(s)

‘‘Underwriting Agreements’’ the Public Offer Underwriting Agreement and the PlacingAgreement

‘‘White Form eIPO’’ the application for the Public Offer Shares to be issued in theapplicant’s own name by submitting application onlinethrough the designated website of White Form eIPO ServiceProvider, Computershare Hong Kong Investor ServicesLimited at www.eipo.com.hk

‘‘White Form eIPO ServiceProvider’’

Computershare Hong Kong Investor Services Limited

‘‘Widethrive Investments’’ Widethrive Investments Limited, a company incorporated inthe BVI on 29 March 2006 with limited liability which iswholly-owned by Mr. Fong, and one of our ControllingShareholders

‘‘sq.m.’’ or ‘‘m2’’ square metres

DEFINITIONS

– 20 –

‘‘%’’ per cent

In this prospectus, the terms ‘‘associate’’, ‘‘close associate’’, ‘‘connected person’’, ‘‘coreconnected person’’, ‘‘connected transaction’’ and ‘‘substantial shareholder’’ shall have themeanings given to such terms in the GEM Listing Rules, unless the context otherwise requires.

Certain amounts and percentage figures included in this prospectus have been subject torounding adjustments. Accordingly, figures shown as totals in certain tables may not be anarithmetic aggregation of the figures preceding them.

If there is any inconsistency between the Chinese names of entities or enterprises establishedin China and their English translations, the Chinese names shall prevail. The English translationof company names in Chinese or another language which are marked with ‘‘*’’ and the Chinesetranslation of company names in English which are marked ‘‘*’’ are for identification purposesonly.

DEFINITIONS

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Our Company has included in this prospectus forward-looking statements that are nothistorical facts, but relate to the Group’s intentions, beliefs, expectations or predictions for futureevent and conditions which may not occur. These forward-looking statements are containedprincipally in the sections entitled ‘‘Summary’’, ‘‘Risk factors’’, ‘‘Industry overview’’, ‘‘Business’’,and ‘‘Financial information’’, which are, by their nature, subject to risks and uncertainties.

In some cases, you can identify these forward-looking statements by words such as ‘‘aim’’,‘‘anticipate’’, ‘‘believe’’, ‘‘continue’’, ‘‘could’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘might’’, ‘‘plan’’,‘‘potential’’, ‘‘predict’’, ‘‘project’’, ‘‘propose’’, ‘‘seek’’, ‘‘should’’, ‘‘will’’, ‘‘would’’ or similarexpressions or their negatives. These forward-looking statements include, without limitation,statements relating to:

. our Group’s business objectives, implementation plans and use of proceeds;

. the amount and nature of, potential for, future development of our Group’s business;

. our Group’s operation and business prospects;

. our Group’s dividend payout;

. the regulatory environment of our Group’s industry in general;

. the future development and trends in our Group’s industry; and

. risks identified under the section headed ‘‘Risk factors’’ in this prospectus.

Our Directors confirm that these forward-looking statements are made after due and carefulconsideration.

These forward-looking statements are subject to risks, uncertainties and assumptions, some ofwhich are beyond our Group’s control. In addition, these forward-looking statements reflect theGroup’s current views with respect to future events and are not a guarantee of future performance.

Additional factors that could cause actual performance or achievements to differ materiallyinclude, without limitation, those discussed under the section headed ‘‘Risk factors’’ in thisprospectus.

These forward-looking statements are based on current plans and estimates, and speak only asof the date they are made. Our Company undertakes no obligations to update or revise anyforward-looking statement in light of new information, future events or otherwise. Forward-looking statements involve inherent risks and uncertainties and are subject to assumptions, some ofwhich are beyond our Group’s control. Our Company cautions you that a number of importantfactors could cause actual outcomes to differ, or to differ materially, from those expressed in anyforward-looking statements.

FORWARD‐LOOKING STATEMENTS

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Due to these risks, uncertainties and assumptions, the forward-looking events andcircumstances discussed in this prospectus might not occur in the way our Company expects, or atall. Accordingly, you should not place undue reliance on any forward-looking information. Allforward-looking statements contained in this prospectus are qualified by reference to thesecautionary statements.

FORWARD‐LOOKING STATEMENTS

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You should carefully consider all of the information in this prospectus, including the risksand uncertainties described below, before making an investment in our Shares. These riskscould materially and adversely affect our business, financial condition and results ofoperations. The trading price of our Shares could significantly decrease due to any of theserisks, and you may lose all or part of your investment. You should seek professional advice fromrelevant advisers regarding your prospective investment in the context of your particularcircumstances.

The risks related to our business and operations and the Share Offer can be categorised intothree broad areas, namely (i) risks relating to our business, (ii) risks relating to doing business inthe PRC and (iii) risks relating to the Share Offer.

RISKS RELATING TO OUR BUSINESS

Our business is heavily dependent on the state of the real estate market in Guangzhou andelsewhere in the Pearl River Delta.

We are an established real estate agent in Guangzhou and elsewhere in the Pearl River Deltaand are heavily dependent on the growth of the real estate market in this area. As at the LatestPracticable Date, we had a total of 28 on-going property projects for which we were providingprimary market real estate agency services and three other separate projects for which we wereproviding property research and consultancy services. Nearly all of these projects are located inGuangzhou and elsewhere in the Pearl River Delta. As one of our business strategies is tostrengthen our established position in Guangzhou and elsewhere in the Pearl River Delta, anyadverse movements in the supply of, or demand for, properties in this area, or in prices paid forsuch properties, may have a material adverse effect on our business, results of operations, andfinancial position. These property markets may be affected by local, regional, national, and globalfactors, including economic and financial conditions, speculative activities in local markets, thedemand for and supply of properties, the availability of alternative investment choices for propertybuyers, inflation, government policies, interest rates, and the availability of capital. Demand forproperties and property prices in Guangzhou and elsewhere in the Pearl River Delta havefluctuated significantly in recent years and are expected to continue to be affected bymacroeconomic control measures implemented by the PRC government from time to time. Furtherrestrictive measures adopted by the PRC government on bank loans and property purchases havehad, and may continue to have, a dampening effect on property markets in many areas of the PRC,including Guangzhou and elsewhere in the Pearl River Delta. This, in turn, could have a materialadverse effect on our business, results of operations, and financial position. For details of the risksrelating to regulatory measures, see ‘‘Risk Factors — Our business is subject to various regulationsimposed by the PRC government, as the real estate industry as a whole is highly regulated.’’.

Competition in the real estate agency business is intense.

The real estate agency business in Guangzhou and elsewhere in the Pearl River Delta isfragmented. According to the DTZ C&W Report, there were 485 real estate agencies operating inGuangzhou as at 31 March 2016, and all but two of the top 10 agencies, including us, have lessthan a 4% share of the primary residential market. A number of these competitors also offer

RISK FACTORS

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property research and consultancy services. Some of our competitors are bigger than us, with moreagents, a greater market share, and greater financial resources. Some may also have longerstanding relationships with a number of key developers in the area. The intensity of thecompetition among real estate agencies in Guangzhou and elsewhere in the Pearl River Delta mayresult in a shortage of quality real estate agents and other employees, increased compensation costsfor agents and employees in order to retain them, and lower commission rates in both the primaryand secondary markets, any of which could materially and adversely affect our business, results ofoperations, and financial position. In addition, the real estate market in Guangzhou and elsewherein the Pearl River Delta is always evolving, and some property developers have been conductingself-marketing for their own projects without engaging real estate agencies. If we are unable torespond to changes in market conditions more quickly or more effectively than our competitors orotherwise to maintain or enhance our competitiveness, our business, results of operations andfinancial position could be adversely affected.

Our failure to implement our strategy to expand our secondary market real estate agencyservices by opening more outlets and employing more sales staff in Guangzhou maymaterially and adversely affect our further plans, profitability and growth.

According to the DTZ C&W Report, the proportion of real estate sales in the secondarymarket in terms of GFA has grown in the past few years. This trend is likely due to the decreasingsupply of urban land which has led to a lower supply of new property units. In view of thesemarket developments, one of our strategies is to open more outlets in various districts inGuangzhou and to employ more licensed agents to provide secondary market real estate agencyservices. We cannot assure you that we will be able to find appropriate sites for new outlets or tohire quality real estate agents and other employees to implement this strategy. In addition, we willcompete with other companies that also provide secondary market real estate agency services andwill be susceptible to the local market competition dynamics. According to the DTZ C&W Report,Guangzhou currently has 185 secondary market real estate agency companies with outlets, andthere are no clear leaders yet in this secondary residential market according to their respectiveshare of secondary residential market transactions in Guangzhou. For details, see ‘‘IndustryOverview — Overview of the Property Consultancy and Agency Industry in the PRC — Secondaryresidential market’’. We cannot assure you that we will be successful in capturing future businessopportunities in the secondary property market or successfully compete against new or existingcompetitors. Changes in the competitive landscape may result in lowered prices, reducedprofitability, or loss of market share. If we fail to implement our strategy successfully, our futureplans, profitability and growth may be adversely affected.

Our largest customer is our parent, the Fineland Group, and any disruption in the flow ofbusiness from them would have a material adverse effect on our business.

During the Track Record Period, our largest customer was our parent, the Fineland Group, forwhom we principally provided primary market real estate agency services. Revenue from theFineland Group accounted for 58.3%, 42.0%, and 51.4% of our total revenue for 2015, 2016 andfour months ended 30 April 2017, respectively. We cannot assure you that the Fineland Group willcontinue to engage our services in the future at all or at the same level as during the Track RecordPeriod. Should there be a disruption in the flow of business from the Fineland Group — becauseof a deterioration in their business or a souring of our business relationship, or for any other

RISK FACTORS

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reason — and should we fail to find alternative property developers to engage us to provideprimary market real estate agency services in respect of a similar number of real estatedevelopment projects, our business, results of operations, and financial position would bematerially and adversely affected.

Any deterioration in our Fineland brand image and any third party’s inappropriate use ofthe trademarks and service marks of ‘‘Fineland’’ may damage our reputation and materiallyand adversely affect our business, results of operations, and financial position.

We have the right to use the ‘‘Fineland’’ trademark in connection with the provision ofservices in our three business segments, including the provision of real estate agency services. Werely to a certain extent on the ‘‘Fineland’’ brand name and image to attract potential customers toour outlets. Any negative incident or negative publicity concerning us or our properties maymaterially and adversely affect our reputation, business, results of operations, and financialposition. Brand value is based largely on consumer perceptions with a variety of subjectivequalities and can be damaged even by isolated business incidents that degrade consumer trust.Consumer demand for our services and our brand value could diminish significantly if we fail todeliver a consistently positive customer experience or if we are perceived to act in an unethical orsocially irresponsible manner. Our brand value could also diminish as a result of actions by, ornegative perceptions of, our parent group, which licenses the name to us. Any negative publicityand the resulting decline in brand value may have a material adverse effect on our business, resultsof operations, and financial position.

Our brand name may be used by third parties without our consent or the consent of ourparent group. If a third party uses ‘‘Fineland’’ in its operations and conducts its businesses in anegligent or reckless manner, our brand and reputation may be materially and adversely affected.This may in turn have a negative impact on our business, results of operations, and financialposition. The misappropriation of the name by a third party, even where not used negligently orrecklessly, could dilute the brand and damage the reputation of the brand among the public. Theoutcome of any legal proceedings to defend our intellectual property rights would be uncertain,and the litigation could be costly and consume vital resources, which could have a negative impacton our business, results of operations, and financial condition.

Furthermore, we could lose our right to use the ‘‘Fineland’’ brand. On 11 October 2017,Fineland Real Estate entered into the Trademark License Agreements with us, pursuant to whichwe were granted a license to use the ‘‘Fineland’’ brand and trademark at nil consideration. Failureto renew the trademark by the Fineland Group would likely have a material adverse effect on ourbusiness, results of operations, and financial position. For details of the Trademark LicenseAgreements, see ‘‘Connected Transactions — Continuing Connected Transactions Fully Exemptfrom the Reporting, Annual Review, Announcement and Independent Shareholders’ ApprovalRequirements — Trademark License Agreements’’ and ‘‘Statutory and General Information — B.Further Information about the Business of our Group — 2. Summary of intellectual property rightsof our Group’’.

RISK FACTORS

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Our business is subject to various regulations imposed by the PRC government, as the realestate industry as a whole is highly regulated.

Our business is subject to extensive laws, governmental regulations and policies, and we aresusceptible to policy changes in the PRC property industry. We must comply with variousrequirements mandated by PRC laws and regulations, including the policies and proceduresestablished by local authorities designed to implement such laws and regulations. In addition, weare impacted indirectly by laws and regulations designed to influence the wider PRC propertysector.

For a detailed overview of regulations directly impacting us, see ‘‘Regulatory Overview’’.Further restrictions in this area could have a material adverse effect on our business, results ofoperations, and performance.

Regulations impacting us indirectly include those that aim to affect the real estate marketmore broadly, including property development and property investment. Property developers arethe principal clients for our property research and consultancy services and our primary marketreal estate agency services. Property investors are a vital source of business both as buyers inrelation to our primary market real estate agency services and as clients in relation to oursecondary real estate agency services. As such, regulations impacting property development andproperty investment will indirectly impact our business.

The PRC government exerts considerable influence over the growth and development of thePRC property market through policies and other economic measures, for example, by settinginterest rates, controlling the supply of credit by changing bank reserve ratios and implementinglending restrictions, increasing tax and duty on property transfers, and imposing restrictions onforeign investment and currency exchange. The PRC government has also acted to control thesupply of land for property development, which could impact directly on our property research andconsultancy business. Recent government measures along these lines have generally been designedto result in downward pricing pressure on the PRC property market and have impacted thebuoyancy of the primary and secondary real estate markets in which we operate.

In recent years, the PRC government has implemented a series of regulations and policiesdesigned to ensure healthy growth in the property market and to slow the increase in propertyprices. Some of these have been aimed at curbing speculation in the property market, while othershave had broader applicability.

For example, the Guangzhou municipal government issued a ‘‘Notice on further perfectingthe policy on the healthy and steady development of the Real Estate Market in Guangzhou’’ (廣州

市人民政府辦公廳關於進一步完善我市房地產市場健康發展政策的通知) and Notice on FurtherStrengthening the Control and Adjustment on Real Estate Market (廣州市人民政府辦公廳關於進

一步加強房地產市場調控的通知) on 17 March 2017 and 30 March 2017, respectively, pursuant towhich the Guangzhou municipal government implemented policies with the aim of further slowingthe increase in property prices. For details, see ‘‘Regulatory Overview — Laws and regulationsrelating to our operations — Regulation of Real Estate Agency Companies and Agents’’. Thesepolicies and measures may affect the transaction volume and prevailing prices in the propertymarket, which may in turn affect our business performance. They correlated with a short-term dropin total transaction volume of approximately 27.9% in the Guangzhou primary market in the first

RISK FACTORS

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nine months of 2017 compared to the first nine months of 2016, and a stable average primarycommodity residential price for the same period. We cannot assure you that our financial conditionand results of operations will not be affected by these or additional restrictive measures orregulations on the real estate industry.

We cannot assure you that the PRC government will not implement further tighteningmeasures to restrain the PRC property market at the national, provincial, municipal, or local levels,in which case transaction volume and selling prices of properties in the PRC could decline. Fewernew property developments could mean less revenue from our property research and consultancybusiness and less revenue from our primary market real estate agency services, while lowertransaction volume and selling prices could mean less revenue from our primary and secondaryreal estate agency services and our Integrated Services. As a result, our business, results ofoperations, and financial position may be materially and adversely affected.

Our non-compliance with certain laws and regulations regarding social insurance and thehousing provident fund in the PRC could lead to the imposition of fines and penalties on us.

In accordance with relevant PRC laws and regulations, we are required to contribute tocertain employee social welfare schemes, including social insurance and the housing providentfund. For more details, see ‘‘Regulatory Overview — Social Insurance and Housing ProvidentFund’’. However, during the Track Record Period, we were not in strict compliance with thecontribution requirements for some of our PRC employees. The aggregate outstanding amountpayable by us as at 30 April 2017 in relation to social insurance contributions was RMB7.5million, while the maximum aggregate outstanding amount of housing provident fund contributionspayable by us was approximately RMB1.4 million. For more details, see ‘‘Business — Non-Compliance’’.

In addition to the aggregate outstanding amount of RMB7.5 million, the maximum amount oflate charges which may potentially be imposed on us as a result of non-compliance with therequirements of social insurance contributions in connection with our outstanding payments as at30 April 2017 is estimated to be RMB1.2 million.

For 2015, 2016 and four months ended 30 April 2017, we have made provisions in the sum ofapproximately RMB8.7 million and RMB1.4 million for the underpaid social insurance fundcontributions (inclusive of late charge) and housing provident fund contributions, respectively.However, we cannot assure you that we will not be subject to penalties by the relevant PRCauthorities for our past non-compliance. Any penalties imposed on us could have an adverseimpact on our cash flow, business operations, and reputation.

We may be unable to renew our real estate agency agreements with property developers upontheir expiry.

The real estate agency agreements which we enter into with property developers usuallycover a relatively short period of time, and some of them are renewable upon expiry. As at theLatest Practicable Date, we had 28 active real estate agency agreements for the provision ofprimary market real estate agency services. These agreements usually expire upon completion ofthe sale of units in the relevant real estate projects or a certain period (usually one year) after the

RISK FACTORS

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commencement of the sale of units in the projects. If we are unable to renew these agencyagreements upon their expiry or to procure new business with property developers, our business,results of operations, and financial position may be adversely affected.

If we are unable to retain our existing senior management and other key personnel and tohire, train, and retain senior management or key personnel, our ability to maintain anddevelop our business could be harmed.

Our operations and long-term success depend upon the continued service of members of oursenior management team and our ability to attract and retain qualified staff. Our chief executiveofficer and executive director, Ms. Rong, has over 18 years of experience in the PRC real estateindustry, progressing through a variety of areas within the Fineland Group. Some of our Directors,such as Mr. Fong and Ms. Tse, have been involved in the real estate agency services businesssince the establishment of our Group. In addition, several other members of our seniormanagement team, such as Ms. Zhu Xiaoming and Mr. Deng Haozhi, have worked for us for asignificant length of time and have played key roles in major business decisions. As competition inChina for quality, experienced senior management and key personnel is intense, we may not beable to retain the services of our senior executives or key personnel, or attract, retain, or replacequality senior executives or key personnel in the future. If any of our senior management team orother key personnel is unable or unwilling to continue in their present position with us and we areunable to replace them in a timely manner, our business operations may be disrupted and ourbusiness, results of operations, and financial position may be materially and adversely affected. Ifany member of our senior management team or key personnel joins a competitor or carries on acompeting business, we may lose customers and other key staff members, which could materiallyand adversely affect our business and expansion prospects.

In addition, we may be unable to retain a sufficient number of suitable employees or agentsor recruit additional qualified employees or agents for our daily operations and business expansion,in which case our business, results of operations, growth, and business prospects could bematerially and adversely affected.

Risks associated with the operation of our business may not be sufficiently covered byinsurance.

Certain risks associated with the operation of our business could not be covered fully byinsurance as such insurance is either not available or not available on commercially reasonableterms. For example, we do not maintain insurance for litigation risks or business termination risks.For further information on our insurance coverage, see ‘‘Business — Insurance’’. Furthermore, ourreputation may be damaged or we may be exposed to liability in excess of our insurance coverageor suffer loss depending on the severity and frequency of various events, such as accidents andother mishaps, business interruption, personal injuries, labour disputes, and acts of God, as well asrisks relating to our provision of services to customers. We cannot assure you that the loss arisingfrom these or any other events would be sufficiently covered by insurance or that we will be ableto renew existing insurance cover on commercially reasonable terms, if at all.

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We may be liable for financial obligations relating to impacted people or property if anincident occurs in relation to which we have inadequate insurance cover or have no insurancecover. Any payment we make to cover any loss, damage, or liability could have a material adverseeffect on our business, results of operations, and financial condition. If we fail to make suchpayment, our assets could be subject to attachment, confiscation, or restraint under various judicialprocedures. Our business, results of operations, and financial condition could be adversely andmaterially affected by any of these occurrences.

We may be liable for the actions of our sales agents and other agents and employees despitehaving limited control over them.

We cannot assure you that all the actions by our employees and sales agents will meet ourown standards, applicable legal standards, and customers’ expectations, especially since it isdifficult for us to effectively monitor the actions of our employees and agents at all times. Wecould be held financially liable for any inappropriate actions of our employees and agents in thesales process or otherwise, and our reputation could be materially and adversely affected by theiractions, which could have a material adverse effect on our business, results of operations, andfinancial condition.

We may be exposed in the future to legal proceedings which could subject us to significantliability to third parties and could adversely affect our business operations.

We may be involved in disputes or legal proceedings arising in the ordinary course of ourbusiness. The defence of legal proceedings filed against us could be both costly and time-consuming and could significantly divert the efforts of our management personnel and ourfinancial resources. Furthermore, an adverse determination in legal proceedings could compel us topay damage awards or seek licences from third parties or could restrict us through injunctions.These factors could prevent us from pursuing some or all of our business operations, which couldhave a material and adverse effect on our business, results of operations, and financial condition.

We are subject to potential adverse consequences due to defective titles of certain propertieswe leased in the PRC.

As at the Latest Practicable Date, for three out of 39 outlets with an aggregate GFA ofapproximately 173.5 sq.m., representing approximately 4.5% of the total GFA of the propertiesleased by our Group, we have not been provided by the lessors with the relevant buildingownership certificates, the planning approvals or other documents proving the relevant title of theproperties. As a result, it is possible that third parties could seek to assert ownership rights againstthe landlords, and we may not be able to continue occupying the relevant properties if any of theseleased areas are challenged by the relevant authorities.

Since we are not able to confirm the ownership of some of the properties we occupy due tothe lack of property ownership certificates, in the event that any party claims a right to suchproperties, we may need to find an alternative location to which to relocate. However, we cannotassure you that we will be able to find a suitable replacement in a timely manner, or at all. Anyrelocation of our operations, or failure to find a suitable replacement location, may result insignificant costs to us or cause a disruption to our operations.

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Your interests may not always align with those of other Shareholders, including ourControlling Shareholders.

Your interests may not always align with those of other Shareholders, including ourControlling Shareholders: Mr. Fong, Ms. Tse, Mr. Fong’s Holding Companies, Stand Smooth,Aspiring Vision and Mansion Green. Immediately following the Share Offer, the ControllingShareholders will beneficially own approximately 54% of our issued share capital. Our ControllingShareholders could have significant influence in determining the outcome of any corporatetransactions or other matters submitted to our Shareholders for approval, including mergers,consolidations, the sale of all or substantially all of our assets, the election of directors, and othersignificant corporate actions. Without the consent of our Controlling Shareholders, we may not beallowed to enter into transactions or effect a change in control. We cannot assure you that actionstaken by our Controlling Shareholders will align with your interests or that any conflicts ofinterest will be resolved in a way beneficial to you.

We are subject to credit risks in relation to trade receivables and property developers coulddefault on their obligations to pay our fees.

In general, property developers, our major customers, are required to pay our fees within aperiod ranging from one to three months after they have confirmed the billing summary issued byus. However, there is no guarantee that all our customers will settle payment in full as it falls due.If any of our customers refuses to confirm the summary, becomes insolvent or delays its paymentof our fees, our cash flow, as well as our business, results of operations, and financial positioncould be adversely affected. As at 31 December 2015 and 2016, and 30 April 2017 we hadRMB12.8 million, RMB7.0 million and RMB0.8 million of our trade-nature receivables owed for91 days or more, respectively. For 2015, 2016, and 30 April 2017 we recognised RMB0.9 million,RMB1.3 million, and RMB1.3 million respectively, impairment loss on receivables. We are alsoexposed to the credit risks of our customers. Any financial difficulties experienced by our majorcustomers may result in a reduction in their engagement of our services and expose us to highercredit risks, which could in turn materially and adversely affect our financial condition and resultsof operations.

The application of HKFRS 16 may affect our financial position and results of operations dueto our operating lease arrangements.

We are a lessee of office and shop premises under which the relevant leases are classified asoperating leases. As set out in Note 22(a) of the Accountant’s Report, the total future minimumlease payments under non-cancellable operating leases of our Group in respect of office and shoppremises as at 30 April 2017 amounted to approximately RMB26.4 million. HKFRS 16 providesnew provisions for the accounting treatment of leases and its application in the future means thatall non-current leases must be recognised in the form of right-of-use assets and as a financialliability for payment obligations. As we are planning to expand our secondary market real estateagency services by opening more outlets in Guangzhou, these new provisions for accountingtreatment of leases are potentially relevant to our financial statements. It is expected that we willhave to separately recognise the interest expense on the lease liabilities and the depreciationexpense on the right-of-use assets, and that a certain portion of the future minimum lease paymentsunder our Group’s operating leases will be required to be recognised in our Group’s consolidated

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statements of financial position as right-of-use assets and lease liabilities. We will also be requiredto remeasure the lease liabilities upon the occurrence of certain events, such as a change in thelease term, and recognise the amount of the remeasurement of the lease liabilities as an adjustmentto the right-of-use assets. In addition, payments for the principal portion of the lease liabilities willbe presented within financing activities in our Group’s consolidated statements of cash flow.

RISKS RELATING TO DOING BUSINESS IN THE PRC

Changes in economic, political, and social conditions in the PRC may have a material adverseeffect on our business, results of operations, and financial condition.

All of our assets are located in the PRC, and our business operation is solely located in thePRC. Accordingly, our business, results of operations, and financial condition are, to a significantdegree, subject to economic, political, and social developments in the PRC. The Chinese economydiffers from the economies of most developed countries in many respects, including the extent ofgovernment involvement, level of development, growth rate, control of foreign exchange, andallocation of resources. The PRC government continues to exercise significant control in regulatingindustry developments, allocating resources, controlling payment of foreign currency-denominatedobligations, setting monetary policy, and providing preferential treatment to particular industries orcompanies.

While the economy of the PRC has experienced significant growth over the past decade,growth has been uneven, both geographically and among various sectors of the economy. The PRCgovernment has implemented various measures to guide the allocation of resources. While some ofthese measures may benefit the overall economy of the PRC, they may have a negative effect onus. For example, our financial results may be adversely affected by government control over realestate investment or changes in tax regulations that are applicable to us. Any changes in the PRC’seconomic, political, and social conditions may have a material adverse effect on our present andfuture operations and thus on our business, results of operations, and financial position.

The PRC’s legal system is still evolving, and the uncertainties as to the interpretation andenforcement of PRC laws could have a material adverse effect on us.

All of our business and operations are conducted in the PRC, and we are therefore subject toPRC laws and regulations. The PRC legal system is a civil law system based on written statutes,and past court decisions have limited precedential value and are cited for reference only. The lawsand regulations are still evolving and because of the limited number of published cases and thenon-binding nature of prior court decisions, there exist uncertainties about the interpretation andenforcement of the laws and regulations. For this reason, any legal protections available to usunder these laws and regulations may be limited and temporary, and any litigation or regulatoryenforcement action in the PRC may be protracted and could result in substantial cost and diversionof resources and management attention.

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It may be difficult to effect service of process against or enforce judgments upon us or ourmanagement.

Substantially all of our assets and the assets of our directors are located in the PRC.Therefore, it may not be possible for investors to effect service of process upon us or thosepersons inside the PRC, including our directors and senior management. The PRC has not enteredinto treaties or arrangements providing for the recognition and enforcement of judgments made bythe courts of most other jurisdictions. On 14 July 2006, the Supreme People’s Court of the PRCand the Hong Kong government signed the Arrangement on Reciprocal Recognition andEnforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and ofthe Hong Kong Special Administrative Region Pursuant to Choice-of-Court Agreements betweenParties Concerned (最高人民法院關於內地與香港特別行政區法院相互認可和執行當事人協議管

轄的民商事案件判決的安排). Under this arrangement, where any designated people’s court of thePRC or any designated Hong Kong court has made an enforceable final judgment requiringpayment of money in a civil and commercial case pursuant to a written choice-of-court agreement,any party concerned may apply to the relevant people’s court of the PRC or Hong Kong court forrecognition and enforcement of the judgment. The arrangement came into effect on 1 August 2008,but the outcome and enforceability of actions brought under the arrangement are still uncertain.The PRC is not a party to any treaties providing for the reciprocal recognition and enforcement ofjudgments of courts with the United States, the United Kingdom, most other Western countries, orJapan, and therefore enforcement in the PRC of a judgment of a court in any of these jurisdictionsmay be difficult or impossible.

Fluctuations in exchange rates may negatively impact our profitability and our ability to paydividends.

During the Track Record Period, all of our revenue was denominated in Renminbi. Becausedividends on our Shares will be paid to Shareholders in Hong Kong dollars, any appreciation ofthe Hong Kong dollar against Renminbi would have a negative effect on the amount available tous when converted into Hong Kong dollars and would result in lower dividend payments.

The PRC government’s control over the conversion of foreign exchange may have a materialadverse effect on your investment.

The PRC government imposes controls on the convertibility of Renminbi into foreigncurrencies and, in certain cases, the remittance of currency out of the PRC. Under existing PRCforeign exchange regulations, payments of current account items, including profit distributions andinterest payments, can be made in foreign currencies without prior approval from SAFE bycomplying with certain procedural requirements. However, approval from SAFE or its local branchis required where Renminbi is to be converted into foreign currency and transferred out of thePRC to pay capital expenses, such as the repayment of loans denominated in foreign currencies.The PRC government may also, at its discretion, restrict access in the future to foreign currenciesfor current account transactions.

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Under our current corporate structure, our income is primarily derived from dividendpayments from our PRC subsidiaries. The unavailability of sufficient foreign currency or aninability to transfer sufficient funds from the PRC may restrict the ability of our PRC subsidiariesto pay sufficient dividends or make other payments to us or to otherwise satisfy their foreigncurrency-denominated obligations. As a result, we may not be able to pay dividends to ourShareholders.

We may be deemed a PRC resident enterprise under the PRC Corporate Income Tax Lawand be subject to PRC taxation on our worldwide income.

Under the PRC Corporate Income Tax Law that came into effect on 1 January 2008,enterprises established outside China whose ‘‘de facto management bodies’’ are located in Chinaare considered ‘‘resident enterprises’’ and will generally be subject to a uniform 25% corporateincome tax on their global income. Under the implementation regulations of the PRC CorporateIncome Tax Law, ‘‘de facto management bodies’’ is defined as the bodies that have material andoverall management control over the business, personnel, accounts, and properties of an enterprise.Substantially all of our management is currently based in China and is likely to remain in China.We may therefore be treated as a PRC resident enterprise for PRC corporate income tax purposes.The tax consequences of such treatment are unclear, as they will depend on how local taxauthorities apply or enforce the PRC Corporate Income Tax Law and the implementationregulations. For further possible implications of the PRC Corporate Income Tax Law, see ‘‘—

Risks Relating to Doing Business in the PRC — Dividends paid to our Hong Kong subsidiarymight not qualify for the reduced PRC withholding tax rate under the special arrangement betweenHong Kong and the PRC’’ below.

Dividends paid to our Hong Kong subsidiary might not qualify for the reduced PRCwithholding tax rate under the special arrangement between Hong Kong and the PRC.

Under the PRC Corporate Income Tax Law and its implementation regulations, PRC-sourcedincome of foreign enterprises that are ‘‘non-PRC resident enterprises’’ and do not have anestablishment or place of business in the PRC or, despite the existence of an establishment orplace of business in the PRC, have income that is not actually connected with the establishment orplace of business in the PRC, such as dividends paid by a PRC subsidiary to its overseas parent, isgenerally subject to a 10% withholding tax unless the jurisdiction of the foreign enterprise has atax treaty with the PRC that provides a different withholding arrangement.

Pursuant to a special arrangement between Hong Kong and the PRC, the withholding tax rateis lowered to 5% if a Hong Kong resident enterprise is qualified as the beneficial owner and ownsmore than 25% of a PRC company distributing the dividends. However, according to the Circularof the State Administration of Taxation on Printing and Issuing the Administrative Measures forNon-resident Individuals and Enterprises Regarding Favourable Treatment Under Taxation Treaties(for Trial Implementation) (國家稅務總局關於印發《非居民享受稅收協定待遇管理辦法（試行）》的通知), which was issued by the State Administration of Taxation on 24 August 2009 and becameeffective on 1 October 2009, the 5% withholding tax rate does not automatically apply, andapprovals from competent local tax authorities are required before an enterprise can enjoy anybenefits under the relevant taxation agreements or treaties. Moreover, according to the Notice ofthe State Administration of Taxation on the Issues Concerning the Application of the Dividend

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Clauses of Tax Agreements (國家稅務總局關於執行稅收協定股息條款有關問題的通知) issued bythe State Administration of Taxation on 20 February 2009, if the main purpose of an offshorearrangement is to obtain preferential tax treatment, the PRC tax authorities have the discretion toadjust the preferential tax rate for which an offshore entity would otherwise be eligible. Inaddition, on 27 August 2015, the State Administration of Taxation promulgated the Announcementon Promulgating the Administrative Measures for Non-resident Taxpayer to Enjoy Treatmentsunder Tax Treaties (國家稅務總局關於發布非居民納稅人享受稅收協定待遇管理辦法的公告),which became effective on 1 November 2015 and replaced the Administrative Measures for Non-resident Individuals and Enterprises Regarding Favourable Treatment Under Taxation Treaties (forTrial Implementation) (國家稅務總局關於印發《非居民享受稅收協定待遇管理辦法(試行)的通

知》). Under the Announcement on Promulgating the Administrative Measures for Tax ConventionTreatment for Non-resident Taxpayers, any qualifying non-resident taxpayer meeting specifiedconditions may be entitled to the convention treatment when it files a tax return or makes awithholding declaration through a withholding agent. However, there is no assurance that the PRCtax authorities will determine that our subsidiaries are non-resident taxpayers, and our subsidiariesmay therefore not be entitled to the convention treatment.

If we are required under the PRC Corporate Income Tax Law to withhold PRC income tax ondividends payable to foreign shareholders, the value of your investment in our Shares may bematerially and adversely affected.

We may be subject to penalties, including restrictions on our ability to inject capital into ourPRC subsidiaries and our PRC subsidiaries’ ability to distribute profit to us, if our PRCresident shareholders or beneficial owners fail to comply with relevant PRC foreign exchangeregulations, which could have a material adverse impact on our business and financialcondition.

SAFE issued SAFE Circular No. 37 which became effective on 4 July 2014 and replacedCircular No. 75. SAFE Circular No. 37 requires ‘‘PRC residents’’, including PRC individuals andenterprises, to register with SAFE or its local branch in relation to their direct establishment orindirect control of any offshore special purpose vehicle. An offshore special purpose vehicle is anentity outside the PRC used for the purpose of investment and financing outside the PRC of a PRCresident’s legally owned assets or equity interests in domestic enterprises or offshore assets orinterests. In addition, PRC residents must update their foreign exchange registrations with SAFEwhen there is any material change to an offshore special purpose vehicle, such as a change ofbasic information (including change of the PRC citizens or residents controlling the vehicle, aswell change to the name and term of operation of the vehicle), any increase or decrease in theinvestment amount, any share transfers or exchanges, or any mergers or divisions. According toSAFE Circular No. 13, the above registration should be filed with a qualified bank starting from 1June 2015.

If any shareholder holding an interest in an offshore special purpose vehicle who is a ‘‘PRCresident’’ within the meaning of SAFE Circular No. 37 fails to fulfil the required foreign exchangeregistration, the PRC subsidiaries of that offshore special purpose vehicle may be prohibited fromdistributing profit and dividends to their offshore parent company or from carrying out other cross-border foreign exchange activities, and the offshore special purpose vehicle may be restricted in its

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ability to contribute additional capital to its PRC subsidiaries. Moreover, failure to comply withthe SAFE registration described above could result in liability under PRC law for evasion ofapplicable foreign exchange restrictions.

We may not be fully informed of the identities of all of our Shareholders or beneficialowners who are ‘‘PRC residents’’, and we cannot provide any assurance that all of ourShareholders and beneficial owners who are ‘‘PRC residents’’ will comply with our request tomake, obtain or update any applicable registrations or comply with other requirements under SAFECircular No. 37 and its related rules in a timely manner. If any of our Shareholders who is a ‘‘PRCresident’’ within the meaning of SAFE Circular No. 37 fails to fulfil the required foreign exchangeregistration, our PRC subsidiaries may be prohibited from distributing profit and dividends to us orfrom carrying out other cross-border foreign exchange activities. We may also be restricted in ourability to contribute additional capital to our PRC subsidiaries, which may adversely affect ourbusiness and have a material adverse effect on our financial condition.

Heightened scrutiny of acquisitions from the PRC tax authorities may have an adverseimpact on our business, acquisition, or restructuring strategies or on the value of yourinvestment in us.

On 3 February 2015, the PRC State Administration of Taxation issued the PublicAnnouncement on Several Issues Concerning Corporate Income Tax for Indirect Transfer ofAssets by Non-Resident Enterprises (關於非居民企業間接轉讓財產企業所得稅若干問題的公告)(‘‘Circular 7’’), which abolished certain provisions in the Notice on Strengthening theAdministration of Corporate Income Tax on Non-Resident Enterprises (關於加強非居民企業股權

轉讓企業所得稅管理的通知) (‘‘Circular 698’’), which had been previously issued by the StateAdministration of Taxation on 10 December 2009, as well as certain other rules providingclarification of Circular 698. Circular 7 provided comprehensive guidelines relating to, and alsoheightened the PRC tax authorities’ scrutiny over, indirect transfers by a non-resident enterprise ofassets (including equity interests) of a PRC resident enterprise (‘‘PRC Taxable Assets’’). Forexample, Circular 7 specifies that the PRC tax authorities are entitled to reclassify the nature of anindirect transfer of PRC Taxable Assets, when a non-resident enterprise transfers PRC TaxableAssets indirectly by disposing of an equity interest in an overseas holding company which directlyor indirectly holds the PRC Taxable Assets, by disregarding the existence of the overseas holdingcompany and considering the transaction to be a direct transfer of PRC Taxable Assets, if suchtransfer is deemed to have been made for the purpose of avoiding PRC corporate income tax andwithout any other reasonable commercial purpose. Circular 7 contains a number of exemptions,including, for example, (i) where a non-resident enterprise derives income from the indirecttransfer of PRC Taxable Assets by acquiring and selling shares of a listed overseas holdingcompany which holds the PRC Taxable Assets on a public market and (ii) where the income froman indirect transfer of PRC Taxable Assets would have been exempt from corporate income tax inthe PRC under an applicable tax treaty or arrangement if the non-resident enterprise had directlyheld and disposed of the PRC Taxable Assets. Nonetheless, it remains unclear whether anyexemptions under Circular 7 will be applicable to the transfer of our Shares or to any futureacquisition by us outside of the PRC involving PRC Taxable Assets, or whether the PRC taxauthorities will instead reclassify any such transaction by applying Circular 7. The PRC taxauthorities may deem any transfer of our Shares by our Shareholders that are non-resident

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enterprises, or any future acquisition by us outside of the PRC involving PRC Taxable Assets, tobe subject to these regulations, which may subject our Shareholders or us to additional PRC taxreporting obligations or tax liabilities.

RISKS RELATING TO THE SHARE OFFER

There has been no public market for our Shares prior to the Share Offer, and the liquidity,market price and trading volume of our Shares may be volatile.

There has been no public market for our Shares prior to the Share Offer. We have applied forthe listing of and permission to deal in our Shares on the Stock Exchange. However, even ifapproved, we cannot assure you that an active trading market for our Shares will develop or besustained following the Share Offer or that our Shares will always be listed and traded on theStock Exchange.

The Offer Price for our Offer Shares will be determined by us and the Sole Bookrunner (foritself and on behalf of the Underwriters) and may differ significantly from the market price of ourShares following the Share Offer. We cannot assure you that the market price of our Shares willnot decline below the Offer Price.

The price and trading volume of our Shares may be highly volatile. Factors such as variationsin our revenue, earnings, and cash flow; announcements of new investments, strategic alliances, oracquisitions; fluctuations in market prices for our products and services; and fluctuations in marketprices for comparable companies could result in large and sudden changes in the trading volumeand market price of our Shares.

In addition, the stock market and the shares of some listed companies in Hong Kong haveexperienced substantial price and volume fluctuations from time to time that are not related to theoperating performance of any particular company. These fluctuations may also materially andadversely affect the market price of our Shares.

Investors in our Shares may face difficulties in protecting their interests under CaymanIslands law, which may provide remedies to minority shareholders that differ from theremedies available under the laws of Hong Kong or other jurisdictions.

Our corporate affairs are governed by, among other things, the Articles of Association, theCompanies Law and the common law of the Cayman Islands. The rights of Shareholders to takeaction against our directors, actions by minority shareholders, and the fiduciary responsibilities ofour directors to us under Cayman Islands law are to a large extent governed by the common law ofthe Cayman Islands and the Articles of Association. The laws of the Cayman Islands relating tothe protection of the interests of minority shareholders may differ in some respects from those inHong Kong and other jurisdictions. These differences mean that the remedies available to ourminority Shareholders may be different from those that minority shareholders would have underthe laws of Hong Kong or other jurisdictions. For further information, see ‘‘Appendix III —

Summary of the Constitution of the Company and Cayman Islands Company Law’’.

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Our historical dividend payments should not be taken as an indication of our future dividendpolicy or our payment of dividends in the future.

We may distribute dividends by way of cash or by other means that we consider appropriate.A decision to declare and pay any dividends would require the approval of the Board and will beat its discretion. In addition, any final dividend for a financial year will be subject toShareholders’ approval. In 2016, RMB11.9 million of dividends were declared; however, anyhistorical dividend payment should not be regarded as an indication of future dividend policy orour payment of dividends in the future.

Since there will be a gap of several days between pricing and trading of our Shares, holdersof our Shares are subject to the risk that the price of our Shares could fall during the periodbefore trading of our Shares begins.

The Offer Price of our Offer Shares is expected to be determined on the Price DeterminationDate. However, our Shares will not commence trading on the Stock Exchange until they aredelivered and become effective, which is expected to be a few business days after the PriceDetermination Date. As a result, investors may not be able to sell or deal in our Shares during thatperiod. Accordingly, holders of our Shares are subject to the risk that the price of our Shares couldfall before trading begins as a result of adverse market conditions or other adverse developments,that could occur between the time of sale and the time trading begins.

Any future issuance of our Shares will dilute investors’ shareholdings in us.

Any future capital issuance, to expand our business or otherwise, will lead to the dilution ofinvestors’ shareholdings in us. We may also issue additional Shares pursuant to our Share OptionScheme. We may need to raise additional funds in the future to finance the expansion of or newdevelopments relating to our existing operations or new acquisitions. If additional funds are raisedthrough the issuance of new equity or equity-linked securities other than on a pro-rata basis toexisting Shareholders, the percentage ownership of our existing Shareholders will be reduced.Furthermore, such new securities may confer rights and privileges that take priority over thoseconferred by our Shares. Purchasers of our Shares will experience dilution in the net tangible assetbook value per share of their Shares if we issue additional Shares or securities convertible intoShares in the future at a price which is lower than the net tangible asset book value per Share.

Any future offerings or sales of our Shares could materially and adversely affect theirprevailing market price.

Any future offerings or sales of our Shares by us or other Shareholders in the public market,or the perception that such offerings or sales could occur, could negatively impact the market priceof our Shares and our ability to raise equity capital in the future at a time and price that we deemappropriate. See the section headed ‘‘Underwriting’’ for details of restrictions that may apply tofuture sales of our Shares, including certain lock-up undertakings by us and our ControllingShareholders. Following the expiry of any lock-up periods, the market price of our Shares maydecline as a result of sales of a substantial number of our Shares, or of other securities relating toour Shares (including the issuance of new Shares pursuant to the exercise of share options granted

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by us) or the perception that such sales or issuances may occur. We cannot predict what effect, ifany, any significant future sales, or any perception of the possibility of significant future sales,will have on the market price of our Shares.

Certain facts and other statistics in this prospectus with respect to China, the PRC economy,and the PRC real estate industry are derived from various official government sources andthird-party sources and may not be reliable.

Certain facts and other statistics in this prospectus relating to China, the PRC economy, andthe PRC real estate industry have been derived from various official government publications andcommissioned research reports. We cannot guarantee the quality or reliability of these sources.They have not been prepared or independently verified by us or any of our affiliates or advisersand we therefore make no representation as to the accuracy of such facts and statistics. Due topossibly flawed or ineffective collection methods or discrepancies between published informationand market practice and other problems, the facts and statistics herein may be inaccurate or maynot be comparable to facts and statistics produced for other economies. As a result, prospectiveinvestors should consider carefully how much weight or importance they should attach to or placeon such facts or statistics.

You should read the entire prospectus carefully (including the risks disclosed), and westrongly caution you not to place any reliance on any information in press articles, othermedia, or research analyst reports regarding us, our business, our industry, or the ShareOffer.

You should read the entire prospectus carefully and rely solely on the information in thisprospectus in making your investment decision regarding the Shares. As set out in the sectionheaded ‘‘Forward-looking Statements’’, undue reliance should not be placed on any forward-looking statements contained in this prospectus since developments may not occur in the way weexpect or may not materialise at all. There has been prior to the publication of this prospectus, andthere may be subsequent to the date of this prospectus but prior to the completion of the ShareOffer, press, media, or research analyst coverage regarding us, our business, our industry, or theShare Offer. We do not accept any responsibility for the accuracy or completeness of theinformation in such press articles, other media, or research analyst reports, nor the fairness orappropriateness of any forecasts, views, or opinions expressed by the press, other media, orresearch analysts regarding the Shares, the Share Offer, our business, our industry, or us. We makeno representation as to the appropriateness, accuracy, completeness, or reliability of any suchinformation, forecasts, views, or opinions expressed or any such publications. To the extent thatsuch statements, forecasts, views, or opinions are inconsistent or conflict with the information inthis prospectus, we disclaim them. Accordingly, prospective investors are cautioned to make theirinvestment decisions only on the basis of the information in this prospectus and should not rely onany other information.

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DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS

This prospectus, for which our Directors collectively and individually accept fullresponsibility, includes particulars given in compliance with the Companies (Winding Up andMiscellaneous Provisions) Ordinance, the Securities and Futures (Stock Market Listing) Rules(subsidiary legislation 571V of the Laws of Hong Kong) and the GEM Listing Rules for thepurpose of giving information with regard to the Group. Our Directors, having made all reasonableenquiries, confirm that to the best of their knowledge and belief, the information contained in thisprospectus is accurate and complete in all material respects and not misleading or deceptive, thereare no other matters the omission of which would make any statement herein or this prospectusmisleading, and all opinions expressed in this prospectus have been arrived at after due and carefulconsideration and are founded on bases and assumptions that are considered fair and reasonable.

INFORMATION ON THE SHARE OFFER

The Offer Shares are offered solely on the basis of the information contained and therepresentations made in this prospectus. So far as the Share Offer is concerned, no person isauthorised to give any information or to make any representation not contained in this prospectus,and any information or representation not contained herein must not replied upon as having beenauthorised by our Company, the Sole Sponsor, the Sole Bookrunner, the Sole Lead Manager, theUnderwriters, any of their respective directors (where applicable) or any other parties involved inthe Share Offer.

OFFER SHARES ARE FULLY UNDERWRITTEN

This prospectus is published in connection with the Share Offer for which RaffAello CapitalLimited is the sole sponsor. The Offer Shares are fully underwritten by the Underwriters pursuantto the Underwriting Agreements. For further information about the Underwriters and the ShareOffer and underwriting arrangements, see the section headed ‘‘Underwriting’’.

RESTRICTIONS ON SUBSCRIPTION OF OFFER SHARES

Each person acquiring the Offer Shares will be required to, or be deemed by his, her or itsacquisition of the Offer Shares to, confirm that he, she or it is aware of the restrictions on offersand sales of the Offer Shares described in this prospectus.

No action has been taken in any jurisdiction other than Hong Kong to permit the offering ofthe Offer Shares or the distribution of this prospectus. This prospectus is not an offer or invitationin any jurisdiction in which it is not authorised, and is not an offer or invitation to any person towhom it is unlawful to make an unauthorised offer or invitation.

The Offer Shares are offered for subscription and purchase solely on the basis of theinformation contained and representations made in this prospectus. No person is authorised inconnection with the Share Offer to give any information, or to make any representation, notcontained in this prospectus and any information or representation not contained in this prospectusmust not be relied upon as having been authorised by our Company, the Sole Sponsor, the Sole

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Lead Manager, the Sole Bookrunner, the Underwriters, any of their respective directors, officers,employees, agents, affiliates or representatives of any of them or any other persons or partiesinvolved in the Share Offer.

It is expected that, pursuant to the Share Offer, the Underwriters will conditionally place theOffer Shares on behalf of the Company with investors.

APPLICATION FOR LISTING ON GEM

Our Company has applied to the Listing Division for the listing of, and permission to deal in,the Shares in issue and which are to be issued or may be issued pursuant to the CapitalisationIssue and the Share Offer (including any Shares which may be issued pursuant to the exercise ofany options which may be granted under the Share Option Scheme) and as otherwise describedherein on GEM.

No part of the share or loan capital of our Company is listed, traded or dealt in on any stockexchange and save as disclosed herein, no such listing or permission to deal is being or proposedto be sought.

Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)Ordinance, if the permission for the Shares offered under this prospectus to be listed on GEM hasbeen refused before the expiration of three weeks from the date of the closing of the Share Offeror such longer period not exceeding six weeks as may, within the said three weeks, be notified toour Company for permission by or on behalf of the Listing Division, then any allotment made onan application in pursuance of this prospectus shall, whenever made, be void.

Pursuant to Rule 11.23(7) of the GEM Listing Rules, at the time of listing and at all timesthereafter, our Company must maintain the minimum prescribed percentage of at least 25% of theissued share capital of the Company in the hands of the public. A total of 100,000,000 Sharesrepresenting approximately 25% of the enlarged issued share capital of the Company immediatelyfollowing completion of the Capitalisation Issue and the Share Offer (without taking into accountany Shares which may be allotted and issued pursuant to the exercise of any options which may begranted under the Share Option Scheme) will be made available under the Share Offer.

Only securities registered on the register of members of our Company kept in Hong Kongmay be traded on GEM unless the Stock Exchange otherwise agrees.

PROFESSIONAL TAX ADVICE RECOMMENDED

Potential applicants for the Offer Shares are recommended to consult their professionaladvisers if they are in doubt as to the taxation implications of the subscription for, holding,purchase, disposal of or dealing in the Shares or exercising their rights thereunder. It isemphasised that none of our Company, the Directors, the Sole Sponsor, the Sole Bookrunner, theSole Lead Manager, the Underwriters, their respective directors or any other person involved in theShare Offer accepts responsibility for any tax effects on, or liabilities of, holders of Sharesresulting from the subscription for, holding, purchase, disposal of or dealing in the Shares or theexercise of their rights thereunder.


– 41 –

REGISTRATION AND STAMP DUTY

Our fully-paid Shares are freely transferable. All the Offer Shares will be registered on thebranch register of members of the Company to be maintained in Hong Kong by the Company’sHong Kong Share Registrar in Hong Kong, Computershare Hong Kong Investor Services Limitedat Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.Dealings in the Shares registered on the Company’s Hong Kong branch register of membersmaintained in Hong Kong will be subject to Hong Kong stamp duty.

STRUCTURE AND CONDITIONS OF THE SHARE OFFER

Details of the structure of the Share Offer, including its conditions, are set out in the sectionheaded ‘‘Structure and Conditions of the Share Offer’’ in this prospectus.

SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS

Subject to the approval of the listing of, and permission to deal in, the Shares on GEM andthe compliance with the stock admission requirements of HKSCC, the Shares will be accepted aseligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from theListing Date or, under contingent situation, any other date as determined by HKSCC. Settlement oftransactions between participants of the Stock Exchange is required to take place in CCASS on thesecond business day after any trading day.

All activities under CCASS are subject to the General Rules of CCASS and CCASSOperational Procedures in effect from time to time. All necessary arrangements have been madefor the Shares to be admitted into CCASS.

If you are unsure about the details of CCASS settlement arrangement and how sucharrangements will affect your rights and interests, you should seek the advice of your stockbrokeror other professional advisers.

COMMENCEMENT OF DEALING IN THE SHARES

Dealings in the Shares on GEM are expected to commence on or about Wednesday, 15November 2017. Shares will be traded in board lots of 4,000 Shares each.

CURRENCY TRANSLATIONS

Unless otherwise specified, translations of RMB into HK$ in this prospectus are based on theexchange rates set out below (for the purpose of illustration only):

RMB0.89451: HK$1.00 as at 30 December 2016

RMB0.8858: HK$1.00 as at 28 April 2017

No representation is made that any amounts in RMB and HK$ can be or could have beenconverted at the relevant dates at the above exchange rate or any other rates.


– 42 –

LANGUAGE

If there is any inconsistency between the English version of this prospectus and the Chinesetranslation of this prospectus, the English version of this prospectus shall prevail.

ROUNDING

Certain amounts and percentage figures included in this prospectus have been subject torounding adjustments. Accordingly, totals of rows or columns of numbers in tables may not beequal to the apparent total individual items. When information is presented in thousands ormillions of units, amounts may have been rounded up or down.


– 43 –

Name Address Nationality

Executive Directors

Ms. Rong Haiming (容海明)(Chief Executive Officer)

Room 906No. 1 Mingquan StreetHaizhu DistrictGuangzhouPRC

Chinese

Mr. Yi Ruofeng (易若峰) Room 1401No. 16 Dongyuandong StreetHuangpu DistrictGuangzhou PRC

Chinese

Ms. Tse Lai Wa (謝麗華) Flat B, 7/FBlock 6, Provident Centre33 Wharf Road, North PointHong Kong

Chinese

Non-executive Director

Mr. Fong Ming (方明)(Chairman)

Room 2102No. 33 Donghu RoadYuexiu DistrictGuangzhouPRC

Chinese

Independent non-executive Directors

Mr. Leung Wai Hung (梁偉雄) Flat A, 12/FThe Java, 98 Java Road, North PointHong Kong

Chinese

Mr. Liao Junping (廖俊平) Room 404, Block 1No. 747 Zhong Da Yuan Xi QuHaizhu District, GuangzhouPRC

Chinese

Mr. Tian Qiusheng (田秋生) Room 104, Block 3Chemical Engineering DepartmentStaff DormitorySouth China University of TechnologyNo. 381 Wushan Road, Tianhe DistrictGuangzhouPRC

Chinese

Mr. Du Chenhua (杜稱華) Room 2401, Block 1No. 746 Dongfeng East RoadYuexiu District, GuangzhouPRC

Chinese

Please refer to the section headed ‘‘Directors, Senior Management and Employees’’ in thisprospectus for further information of the Directors.

DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER

– 44 –

Sole Sponsor RaffAello Capital LimitedA licensed corporation under SFO to carry out type 6(advising on corporate finance) regulated activitiesRoom 2002, 20/FTower Two, Lippo Centre89 Queensway, AdmiraltyHong Kong

Sole Bookrunnerand Sole Lead Manager

RaffAello Securities (HK) LimitedA licensed corporation under the SFO to carry out type 1(dealing in securities) and type 4 (advising on securities)regulated activitiesRoom 2002 and 2002B, 20/FTower Two, Lippo Centre89 Queensway, AdmiraltyHong Kong

Legal advisers to our Company as to Hong Kong lawP. C. Woo & Co.Room 1225, 12/FPrince’s BuildingNo. 10 Chater RoadCentralHong Kong

as to PRC lawBeijing Jingtian & Gongcheng Law Firm34/F, Tower 3China Central Place77 Jianguo roadBeijingPRC

as to Cayman Islands lawAppleby2206–19 Jardine House1 Connaught PlaceCentralHong Kong

Legal advisers to the SoleSponsor and Underwriters

as to Hong Kong lawHogan Lovells11/F, One Pacific Place88 QueenswayHong Kong


– 45 –

as to PRC lawGrandall Law Firm (Shenzhen)24/F, Shenzhen Special Zone Press Tower6008 Shennan AvenueShenzhen 518009China

Reporting accountantand Auditors

BDO LimitedCertified Public Accountants25th Floor, Wing On Centre111 Connaught Road CentralHong Kong

Receiving bank Bank of China (Hong Kong) LimitedBank of China Tower1 Garden RoadCentralHong Kong

Compliance Adviser RaffAello Capital LimitedRoom 2002, 20/FTower Two, Lippo Centre89 Queensway, AdmiraltyHong Kong


– 46 –

Registered office P.O. Box 1350Clifton House75 Fort StreetGrand CaymanKY1-1108Cayman Islands

Headquarters in the PRC No. 28 Tiyu East RoadTianhe DistrictGuangzhouPRC

Principal place of businessin Hong Kong

9/F, Wah Yuen Building149 Queen’s Road CentralCentralHong Kong

Company’s website address www.finelandassets.com(the contents of the website do not form part of thisprospectus)

Company secretary Mr. Tso Ping Cheong, BrianFCPA, FCCA, FCIS, FCS

Authorised representatives Mr. Tso Ping Cheong, Brian9/F, Wah Yuen Building149 Queen’s Road CentralCentralHong Kong

Mr. Yi RuofengRoom 1401, No. 16 Dongyuandong StreetHuangpu DistrictGuangzhouPRC

Compliance officer Mr. Yi Ruofeng

Audit committee Mr. Leung Wai Hung (Chairman)Mr. Tian QiushengMr. Du Chenhua

Remuneration committee Mr. Tian Qiusheng (Chairman)Mr. Leung Wai HungMr. Yi Ruofeng

CORPORATE INFORMATION

– 47 –

Nomination committee Ms. Rong Haiming (Chairman)Mr. Liao JunpingMr. Tian Qiusheng

Principal share registrar andtransfer office

Estera Trust (Cayman) LimitedP.O. Box 1350Clifton House75 Fort StreetGrand CaymanKY1-1108Cayman Islands

Hong Kong Share Registrar Computershare Hong Kong Investor Services LimitedShops 1712–171617th Floor, Hopewell Centre183 Queen’s Road EastWan ChaiHong Kong

Principal bankers Guangzhou Tianhe branch,Industrial Bank Company Limited

G/F, Fengxing Plaza33 Tianhe Nan Er RoadTianhe DistrictGuangzhouPRC

Guangzhou Liuhua branch,Industrial and Commercial Bank of China

237 Zhan Qian roadGuangzhouPRC

Guangzhou Tiyu East Road branch,China Construction Bank

G/F, 28 Tiyu East RoadTianhe DistrictGuangzhouPRC

CORPORATE INFORMATION

– 48 –

WAIVER FROM STRICT COMPLIANCE WITH CHAPTER 20 OF THE GEM LISTINGRULES

We have entered into certain transactions which would constitute non-exempt continuingconnected transactions for our Company under the GEM Listing Rules after the Listing. We haveapplied to the Stock Exchange for, and the Stock Exchange has agreed to grant, a waiver fromstrict compliance with the relevant announcement, circular and independent shareholders’ approvalrequirements under Chapter 20 of the GEM Listing Rules. For details of the continuing connectedtransactions and the waiver, see the section headed ‘‘Connected Transactions’’.

WAIVERS FROM STRICT COMPLIANCE WITH THE GEM LISTING RULES

– 49 –

This section contains certain information, statistics and data relating to the economy ofthe PRC and the industry in which the Group operates. The Company has extracted and derivedthe information in the section below, in part, from the DTZ C&W Report, a commissionedreport from DTZ C&W. Please see the paragraph ‘‘— Sources of Information’’ below. TheCompany believes that such sources of the information in this section are appropriate sourcesfor the information and statistics below, and has taken reasonable care in extracting andreproducing such information. The Company has no reason to believe that such information isfalse or misleading or that any fact has been omitted that would render such information falseor misleading. The information has not been independently verified by the Company, the SoleSponsor, any of their respective affiliates or advisers, or any party involved in the Share Offerand no representation is given as to its accuracy.

SOURCES OF INFORMATION

In connection with the Listing, the Company commissioned the DTZ C&W Report from DTZC&W for use in this prospectus to provide Shareholders with information relating to the economyof the PRC, the residential and commercial property market in Pearl River Delta includingGuangzhou, and the industry in which the Group operates. DTZ C&W has charged a total fee ofRMB400,000 for the preparation of the DTZ C&W Report. DTZ C&W is a global real estateadviser, which offers a range of services including investment agency, leasing agency, propertyand facilities management, project and building consultancy, investment and asset management,market research and forecasting and valuation. DTZ C&W has 300 offices in 60 countries.

The DTZ C&W Report was prepared primarily by the designated market research team ofDTZ C&W based on data from the PRC government, renowned research institutions and theproprietary databases of DTZ C&W. In the course of research, DTZ C&W also conductedinterviews with local marketing agents in the residential property sector in the PRC.

The following sets out the main reasons DTZ C&W adopted the above sources of informationand considered them as reliable:

. It is general market practice to adopt official data and announcements from variousChinese government agencies; and

. DTZ C&W understands the data collection methodology and source of the subscribeddatabase from China Real Estate Index System.

While preparing the DTZ C&W Report, DTZ C&W has relied on the major assumptionslisted below:

. The macro-economic environment of each of the PRC and Pearl River Delta includingGuangzhou is expected to grow at a steady rate;

. The political environment of the PRC remains stable; and

INDUSTRY OVERVIEW

– 50 –

. The real estate industry of each of the PRC and Pearl River Delta including Guangzhouis expected to grow at a steady rate.

Based on the review and analysis under the above bases and assumptions, nothing has cometo the attention of the Directors and the Sole Sponsor to indicate that such information ismisleading. As at the Latest Practicable Date, the Directors confirmed that to the best of theirknowledge and information and taking reasonable care, there was no adverse change in the marketinformation since the date of the Market Research Report, which would qualify, contradict or havean impact on the information in this section.

OVERVIEW OF THE PRC ECONOMY

Over the past five years, the PRC’s economy experienced a steady growth with a softeningtrend. Under the influence of various macro-economic policies, the PRC’s GDP growth hasremained healthy, with nominal GDP value increasing from approximately RMB47,310 billion in2011 to approximately RMB74,413 billion in 2016, representing a CAGR of approximately 9.5%.According to the National Bureau of Statistics of China, the PRC has been the world’s secondlargest economy in terms of nominal GDP since 2010. Investment in fixed assets has maintained asteady growth. The total investment in fixed assets in the PRC has increased from approximatelyRMB31,149 billion in 2011 to approximately RMB60,647 billion in 2016, representing a CAGR ofapproximately 14.3%. The urban resident disposable income per capita has increased fromapproximately RMB21,810 in 2011 to approximately RMB33,610 in 2016, representing a CAGR ofapproximately 9.0%. This growth shows that the willingness of urban residents to consume hasincreased, with their purchasing power raised.

The PRC’s economic outlook and government policies established for economic growth andurbanisation

The PRC’s economic development had boosted the pace of urbanisation. Over the past 10years, the rate of urbanisation in the PRC has increased by approximately 1.0% to 1.5% everyyear, reaching 57.4% in 2016. An increase of 1.0% represents an increase of approximately 13million rural people migrating into urban cities, which will no doubt bring in large housing andconsumption demand to the urban cities in the PRC. According to the ‘‘National Plan on NewUrbanisation (2014-2020)’’ (國家新型城鎮化規劃 (2014-2020)), released by the PRC StateCouncil, certain measures such as emphasizing small town development, improving integratedtransportation network, enhancing public service level etc. will be carried out to increase the leveland quality of China’s urbanisation in the future, aiming at having the urbanisation rate to reach60.0% by 2020.

OVERVIEW OF THE PRC PROPERTY MARKET

The economic growth, urbanisation and rising standards of living in the PRC have been themain driving forces behind the increasing market demand for properties. The real estate industry inthe PRC is dependent on the PRC’s overall economic growth, including the increase in thepurchasing power of residents in the PRC and the resulting demand for residential properties.

INDUSTRY OVERVIEW

– 51 –

The PRC government has put in place certain policies which are intended to stabilise theproperty prices and to control the mortgage loan in the PRC. These policies primarily relate to,among others, control over purchasing properties for speculation and adjustment of the minimumcapital ratio of fixed asset investment projects according to the economic situations and thenecessity of macro-economic control.

Under the effects of the growth of domestic investment, consumption and the PRC economy,the PRC property market has been growing rapidly. The total investment in real estatedevelopment projects increased from approximately RMB6,180 billion in 2011 to approximatelyRMB10,258 billion in 2016, representing a CAGR of approximately 10.7%.

According to the National Bureau of Statistics of China, the total GFA of commodityresidential properties completed increased from approximately 743 million sq.m. in 2011 toapproximately 772 million sq.m. in 2016. The total GFA of commodity residential properties soldincreased from approximately 965 million sq.m. in 2011 to approximately 1,157 million sq.m. in2013 after the two downward adjustments on the official borrowing and saving rates made by thePeople’s Bank of China in 2012 which had stimulated the demand for residential properties andresulted in a boost of the total GFA of residential properties sold in 2013. Although the total GFAof residential properties sold witnessed a drop from approximately 1,157 million sq.m. in 2013 toapproximately 1,052 million sq.m. in 2014, there was a rebound to approximately 1,124 millionsq.m. in 2015 due to the relaxation of the restriction policy on purchases of residential properties.Although the purchase restriction policy was reactivated in the fourth quarter of 2016, the totalGFA of residential properties sold still had an overall increase to approximately 1,375 millionsq.m. in 2016. The average selling price of residential properties in the PRC also experienced asurge between 2011 and 2015 at a CAGR of 9.6%.

OVERVIEW OF PEARL RIVER DELTA INCLUDING GUANGZHOU ECONOMY

Overview of Pearl River Delta economy

According to the ‘‘Pearl River Delta Reform and Development Plan (2008–2020)’’ (珠江三角

洲地區改革發展規劃綱要) (2008–2020年)) promulgated by the National Development and ReformCommission in December 2008, there are 9 cities located at the Pearl River Delta includingGuangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing,with the total area of approximately 24,437 sq.km., accounting for approximately 14% of the landarea in the Guangdong Province. The GDP of the Pearl River Delta increased from approximately

INDUSTRY OVERVIEW

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RMB4,397 billion in 2011 to approximately RMB6,791 billion in 2016, which accounted forapproximately 79.3% of the total GDP in Guangdong Province. The key economic indicators ofPearl River Delta are as follows:

2011 2012 2013 2014 2015 2016

2011–2016

CAGR

Pearl River Delta GDP

(RMB billion) 4,397 4,790 5,306 5,780 6,227 6,791 9.1%

Pearl River Delta GDP Growth

(%) 8.1 8.9 10.8 8.9 7.7 8.3 N/A

Note: N/A means not applicable or not available

Sources: Guangdong Province Statistical Yearbook, DTZ C&W

Overview of Guangzhou economy

Guangzhou’s GDP went up year-over-year at a steady growth from 2011 to 2016. The city’sregional GDP in 2016 was approximately RMB1,961 billion, with an increase of approximately8.3% over that of 2015. GDP per capita in Guangzhou in 2016 reached approximatelyRMB139,644 with an increase of approximately 2.5% over that of 2015. Urban disposable incomeper capita in Guangzhou increased from approximately RMB34,438 in 2011 to RMB50,941 in2016. Fixed asset investment grew at a CAGR of 10.9% from approximately RMB341 billion toapproximately RMB571 billion during 2011 to 2016. The regional urbanisation rate was atapproximately 86.0% in 2016.

According to the ‘‘Guangzhou City National Economic and Social Development ThirteenthFive-year Plan (2016–2020)’’, Guangzhou’s GDP is expected to reach RMB2.8 trillion with anannual growth rate of above 7.5% in 2020. Guangzhou is expected to promote a moderatepopulation density with a balanced distribution. In 2020, the regional population will be controlledat approximately 15.5 million residents. It is expected that target of doubling the urban disposableincome per capita in 2020, compared with that in 2010, will be achieved.

ANALYSIS OF THE PROPERTY MARKET IN PEARL RIVER DELTA INCLUDINGGUANGZHOU

Overview of the property market in Pearl River Delta

The property market in Pearl River Delta experienced a stable growth in the recent years.According to China Real Estate Index System (CREIS), real estate investment in Pearl River Deltarose from approximately RMB414.0 billion in 2011 to approximately RMB806.1 billion in 2016 ata CAGR of 15.7%. According to China Index Academy, in 2016, the 9 cities of Pearl River Deltasold a total of approximately 82.2 million sq.m. of primary commodity residential properties,which has increased at a CAGR of 10.4% from 2011 to 2016. Guangzhou, Foshan, Dongguan, andHuizhou were the cities with relatively higher sales, as each of them recorded sales of more than 7million sq.m. Since there are differences in terms of economic strength and the real estate marketdevelopment among the cities in Pearl River Delta, the demand for new commodity residential

INDUSTRY OVERVIEW

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properties in Guangzhou, Shenzhen, and Zhuhai have a mix of fundamental and investmentdemand while Jiangmen, Zhongshan, and Zhaoqing were basically dominated by fundamentaldemand. Overall, the property market in other cities in Pearl River Delta is stable and healthy.

Major real estate indicators in Pearl River Delta

2011 2012 2013 2014 2015 2016

2011–2016

CAGR

Real estate investment

(RMB billion) 414.0 448.4 538.9 629.4 707.6 860.1 15.7%

Total GFA of primary

commodity residential

properties sold

(million sq.m.) 50.1 51.7 63.4 57.5 77.2 82.2 10.4%

Source: CREIS (China Real Estate Index System), China Index Academy

The major factors of driving the property market in Pearl River Delta

The China (Guangdong) Pilot Free-Trade Zone (中國(廣東)自由貿易試驗區) formallyapproved by the State Council on 31 December 2014 covers the three areas in Pearl River Deltaincluding Nansha of Guangzhou, Qianhai and Shekou of Shenzhen, and Hengqin of Zhuhai. Thefree trade zone aims at creating an international, market-oriented and regulated businessenvironment based on pilot reforms implemented over a period of three to five years. The freetrade zones provide a new driving force for Pearl River Delta economic development and willoffer more investment opportunities and trade facilitation. Therefore, it is anticipated that therewill be a boost in the demand of residential and commercial properties in the Pearl River Delta.

With the estimated completion of Hong Kong-Zhuhai-Macao Bridge by the end of 2017, thetransportation network among cities within Pearl River Delta will be improved. The shortenedtravel time between the eastern and western banks of the Pearl River Delta facilitates the flow ofcommuters, and hence the cities in the western banks such as Zhuhai and Zhongshan and theperipheral cities surrounding are expected to benefit from the economic development andeventually to drive the residential and commercial market.

Besides, according to the ‘‘Three-year action plan for major infrastructure constructionprojects’’ (the ‘‘Action Plan’’) (交通基礎設施重大工程建設三年行動計畫) (簡稱‘‘行動計畫’’)jointly issued by National Development and Reform Commission and Ministry of Transport inMay 2016, Pearl River Delta region will focus on promoting various projects of railways,highways, waterways, airports, and urban rail transit involving a total investment of about RMB4.7trillion during 2016 to 2018. After the completion of these projects, there will be closer ties amongcities in Pearl River Delta and in the long term will stimulate the demand of residential andcommercial properties in the regions.

INDUSTRY OVERVIEW

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Overview of property market in Guangzhou

From 2014 to 2016, the major supply of land in the central urban area of Guangzhou mainlycame from urban renewal plots. Most of the land supply plots were captured by the large propertydevelopers with state-owned background and strong capital strength. Residential lands were soldby auction with increasing land prices. According to the Guangzhou Municipal Land Resourcesand Housing Administrative Bureau, the land supply for commodity residential properties in thenext three years will be approximately 11.6 million sq.m. on site area, equivalent to an average of3.9 million sq.m. per annum.

Guangzhou Commodity Residential Property Market 2012–2016

0

2

4

6

8

10

12

14

16

0.0

0.5

1.0

1.5

2.0

7.7

4.9

1.6

7.7 8.1

7.7

1.1

7.98.4

4.9

1.7

12.2

10.8

7.0

1.6

10.0

14.6

11.5

1.37.9

Primary commodity residential property transaction volume (million sq.m.)

Secondary commodity residential property transaction volume (million sq.m.)

GFA of housing stock (million sq.m.)

Ratio of primary to secondary commodity residential property transaction volume

2012 2013 2014 2015 2016

GFA

(m

illi

on

sq

.m.)

Ratio

Sources: CREIS (China Real Estate Index System), CRIC (China Real Estate Information Corp), DTZ C&W

In major developed cities including Beijing, Shanghai and Shenzhen, urban land supply isusually in shortage and therefore the market is more dependent on the secondary market.According to CREIS, in 2016, the transaction value in the secondary property market accountedfor 77% and 64% of the total property transaction amounts in Beijing and Shanghai, respectively.However, between 2012 and 2016, the real estate market in Guangzhou was still dominated byprimary commodity residential properties where the transaction value of secondary markettransactions as a percentage of total property transaction amounts was only 42% in 2016. In thesame year, according to Yang Guang Jia Yuan* (陽光家緣), an official real estate informationwebsite maintained by the Guangzhou Housing and Urban-Rural Construction Committee (廣州市

住房和城鄉建設委員會), the number of registrations of secondary commodity residential propertytransactions in the nine main areas of Guangzhou (excluding Zengcheng and Zonghua districts)was more than that of primary commodity residential property transactions. In Guangzhou the totalGFA of primary commodity residential property sold has increased from approximately 7.7 millionsq.m. in 2012 to approximately 14.6 million sq.m. in 2016 while total GFA of secondarycommodity residential property sold increased from approximately 4.9 million sq.m. in 2012 toapproximately 11.5 million sq.m. in 2016. The ratio of primary to secondary commodity residentialproperty sold in Guangzhou was generally over 1.0 since 2012. The ratio reached a short termpeak of 1.7 in 2014 and gradually decreased to 1.3 in 2016, indicating a growing secondary

INDUSTRY OVERVIEW

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commodity residential market. The ratio is expected to follow the trend of other major cities inChina such as Shenzhen, Beijing and Shanghai, where the ratio is less than 1, indicating anexpanding secondary commodity residential property market in the medium to long run.

The total GFA of the unsold housing stock of primary commodity residential properties inGuangzhou surged from approximately 7.7 million sq.m. in 2012 to 12.2 million sq.m. in 2014 dueto the effect of the purchase restriction policy imposed in 2013. When the purchase restrictionpolicy was relaxed in 2015, there was a rebound of the residential GFA sold, and hence a drop inunsold housing stock from approximately 10.0 million sq.m. in 2015 to approximately 7.9 millionsq.m. in 2016 and a further drop to 7.5 million sq.m. in September 2017.

After the implementation of the purchase restriction and differentiated housing credit lendingpolicies in October 2016 and the two new measures on purchase restrictions in March 2017 as setout in the section headed ‘‘Regulatory Overview’’, according to CREIS, the transaction volume ofprimary commodity residential properties was approximately 4.1 million sq.m. in the fourth quarterof 2016 and approximately 7.5 million sq.m. in the first nine months of 2017. The total transactionvolume in the first nine months of 2017 decreased by 27.9% as compared to the first nine monthsof 2016, while the average selling price of primary commodity residential properties in Guangzhoufor the first nine months of 2017 increased slightly by 2.2% from the average selling price ofprimary commodity residential properties in Guangzhou for 2016.

The purpose of the purchase restrictions is generally to promote a healthy development of theresidential property market, to cool down excessive speculation, whilst meeting fundamentaldemand. In response to newly announced measures, purchasers may take a wait and see attitudeand postpone their purchase decisions in the short run. As a result, the transaction volume of theremaining period of 2017 is estimated to soften and thus the transaction volume of the whole yearis unlikely to exceed that of 2016. The unsold housing stock level of primary commodityresidential properties in Guangzhou will also remain low. Based on our observations of the effectsof the various restrictive measures and control policies on the Guangzhou property market in thepast few years, such measures and policies may result in a slight dip in transaction figures, such asvolume and price, for a temporary period. However, as many other factors play a role, the marketgenerally recovers and continues to trend upwards. Once these restrictive measures have beendigested by the market, and if there are no significant changes in macroeconomic environment andnew policies, the transaction volume is expected to have a steady growth in 2018 and 2019.

INDUSTRY OVERVIEW

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Average level of price and rent in the property markets in Guangzhou

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

124.6

10,92612,000

13,95414,739 14,083

127.1 129.9134.5

122.7122.4

133.8

39.8 39.939.2

16,346 16,458

123.2

16,691 16,983

0

20

40

60

80

100

120

140

160

Average selling price of primary commodity residential properties (RMB per sq. m.)

Average rent of commodity residential properties (RMB per sq. m. per month)

Prime retail rental index (Base Value = 100)

2011 2012 2013 2014 2016 2017 Q1 2017 Q2 2017 Q32015

RM

B p

er s

q.m

.

RM

B p

er s

q.m

./In

dex

Note: There is no official data for the price level of secondary commodity residential properties. There is no

official data for the average rent of commodity residential properties for the period between 2011 and 2013

and the official data available is only for yearly figures.

Sources: Statistical Bulletin of National Economics and Social Development of Guangzhou, Guangzhou

Association of Real Estate Agents, DTZ C&W.

According to Statistical Bulletin of National Economics and Social Development ofGuangzhou, there was a general increase in average selling price of primary commodityresidential properties from RMB10,926 in 2011 to RMB16,346 in 2016 at a CAGR of 8.4% from2011 to 2016. Guangzhou market was dominated by primary commodity residential propertyduring the period, and the average price trend of secondary commodity residential propertygenerally followed the same of primary commodity residential property. In the last few years, theGuangzhou residential market has been cyclical and driven by the various government policies asset out in ‘‘Regulatory Overview — Policies and Measures on Controlling and Adjusting on theHousing Market’’. The only negative adjustment of average primary commodity residential pricewas noted in 2015 at -4.5%. Despite the tightening policies in the fourth quarter of 2016 and inMarch 2017, the average primary commodity residential price continuously remained stable in thefirst nine months of 2017. It is expected that the average primary commodity residential price willcontinue to be stable, and grow by a single-digit percentage in the coming few years.

According to Guangzhou Association of Real Estate Agents, the average rent level ofcommodity residential properties was stable from 2014 to 2016 at a level of slightly aboveRMB39.0 per sq.m. per month. Looking to the near future, it is anticipated that the average rentlevel will remain stable in Guangzhou.

According to the Notice No. (2017) 29 (穗府辦〔2017〕29號) issued by the Office of thePeople’s Government of Guangzhou (廣州市人民政府辦公廳) on 30 June 2017 and printed on 10July 2017, the ‘‘Working plan on accelerating the development of the housing leasing market inGuangzhou’’ (廣州市加快發展住房租賃市場工作方案) was issued in order to establish atransparent, comprehensive, and regulated residential leasing market by 2020 through theprotection of the leasing interests of the lessor and lessee, increasing the supply of residentialunits for leasing purposes and strengthening the leasing market. Key suggestions include allowing

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qualified children of the lessee to apply for admission to nearby schools, reduction of VAT forindividual lessor, a new bidding mechanism for increasing the leasing residential gross floor areain competitive land bidding process, and allowing commercial properties to be converted intoleasable residential properties. As a result, the residential leasing market may become more activeand transparent. However, the working plan and key suggestions above are subject to furtherdetails to be released by the relevant local government authorities and thus the impact has yet tobe revealed or studied.

According to DTZ C&W prime retail rental index, which covers the average rent in indexform of prime retail market of Guangzhou, it experienced a stable increase from 2011 to 2014while a drop from 2014 to 2016. In the first half of 2017, the index exhibited a slight increase.Looking to the near future, it is anticipated that the prime rental index will remain stable in theprime retail locations of Guangzhou.

The major factors of driving the property market in Guangzhou

The enforcement of ‘‘Universal Two-child Policy’’ is expected to stimulate the demand onhousing in Guangzhou, especially the properties with bigger flat size, in order to improve theliving standard and environment.

The China (Guangdong) Pilot Free-Trade Zone (中國(廣東)自由貿易試驗區) in Nansha wasformally approved by the State Council on 31 December 2014 to form a new competitive edge ininternational economic cooperation, to strive for being a pilot free trade zone with legal system inline with high international standards, and to facilitate investment and trade. Nansha isadministered by Guangzhou and this project will eventually enhance the trade and economicactivities in the surrounding area and Guangzhou will reinforce its economic position throughdevelopment of the free trade zone.

In 2016, urban disposable income per capita in Guangzhou reached RMB50,941, with anincrease of approximately 9.0% over the previous year. The demand for residential properties as aresult grew with the surge of the purchasing power.

OVERVIEW OF THE PROPERTY CONSULTANCY AND AGENCY INDUSTRY IN THEPRC

Development of property consultancy and agency industry

Property consultancy services refer to the provision of consultancy services on laws,regulations, policies, market information and relevant technologies to parties involved in theproperty market whilst the property agency services refer to the provision of property marketinformation and agency services. Property consultancy, property agency and property valuationservices are collectively known as property intermediary services.

In 1998, the PRC government reformed the housing system and deepened the monetizationreform of housing distribution. The developed property market in the coastal cities such asGuangzhou, Shenzhen and Shanghai started becoming dominant in the PRC, and the relevantproperty intermediary service industry also entered into the local development stage, althoughsome overseas competitors had already stood in advantageous market positions in 1990s. During

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this period, property agency and consultancy services gradually laid the foundation of transformingfrom simple property sales agents into one stop integrated real estate consultancy planning andconsultancy sales agents.

Since 2001, property consultancy and agency industry has entered a period of rapid growth.There was a general trend of rise in revenue and profit of companies within the industry, so thatthe strength of property consultancy and agency companies become consolidated and their businessscales had a remarkable expansion.

The development characteristics of the industry

According to the Thirteenth Five-Year Plan for the National Economic and SocialDevelopment of the People’s Republic of China (‘‘the Thirteenth Five-Year Plan’’) (中華人民共和

國國民經濟和社會發展第十三個五年規劃綱要) (簡稱「十三五」), the macro-economic policyaims at optimizing the structure of residential housing supply, striking a balance between marketdemand and supply, and maintaining the stable growth in the property market. The property marketin Pearl River Delta experienced a stable growth in the recent years. Guangzhou, Foshan,Dongguan, and Huizhou were the cities with relatively higher sales, as each of them recorded salesof more than 7 million sq.m. Property agency and consultancy companies are extending theirservice lines in these cities as well as other key cities in the Pearl River Delta so as to capture themarket opportunities.

Currently, the real estate market in Guangzhou was still dominated by primary commodityresidential properties. In the short run, primary commodity residential market will still beimportant for all property agency and consultancy companies. In the long run, Guangzhou will besimilar to other major developed cities including Beijing, Shanghai and Shenzhen with shortage ofurban land supply and therefore the market will be more dependent on secondary commodityresidential property. Therefore, property consultancy and agency companies in Guangzhou tend tofocus on the primary commodity residential market while establishing their number of outlets so asto expand their market coverage in secondary residential market.

Property agency and consultancy companies traditionally approach client through outlets.Nowadays, they also make use of the online platform such as website or other communicationtools to connect with customers and also launch promotion campaign. It can raise public awarenessand brand recognition in a more effective and efficient way. Moreover, the agency companies can,via online platforms, send marketing materials such as periodicals and sales brochures, realty titlecertificates, information of properties available for sale and lease, assistance with mortgages, etc.The ultimate aim is providing a one stop solution to the client.

According to DTZ C&W, there were 11 new large scale retail developments launched withinthe 6 core districts in Guangzhou during 2015 and 2016. Due to the complexity of the consumerretail market in Guangzhou, along with the recent development of e-commerce, the strategy onretail marketing and operation has become more and more important. For example, the consumerretail market is mainly dominated by fashion flagship stores, personal care and beauty shops,chained restaurants, and boutique with personalized designer brand in recent years.

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Major selling, administrative and other expenses

The major cost involved in property consultancy and agency companies generally refers tothe agent staff cost, which is subject to market fluctuation and volatility. According to GuangzhouStatistical Bureau, the average annual salary level in Guangzhou increased from RMB57,473 percapita in 2011 to RMB89,096 per capita in 2016, equivalent to a CAGR of 9.2%. The growth is inline with the GDP growth of Guangzhou.

2011 2012 2013 2014 2015 2016 CAGR

Average annual salary level 57,473 63,752 69,692 74,245 81,171 89,096 9.2%

Sources: Guangzhou Statistical Bureau, DTZ C&W

Competitive landscape in the property consultancy and agency industry

The entry barrier of the property consultancy and agency industry is relatively low, whichresulted in a large number of players in the market while most of them are small in scale and thecompetition is keen. However, whether a company can effectively compete in the market dependson a series of factors including its brand recognition, its experience in the property consultancyand agency industry and market coverage by number of shops and staffs.

The gradual shift from the domination of primary market to secondary market also plays anintegral role in the transformation within the real estate industry. According to the analysis of theprimary market of the property agency industry from the Top 100 Enterprises Research Report2015 and the China Index Academy, the primary market agency fee rate of the Top 100 companieswas approximately 1.01% in 2016, showing a slight downward trend from 2011 which thenstabilised in 2015 and 2016.

Top 100 Enterprises Average Agency Fee inPrimary Property Market (%) 2010–2016(Note)

0.8

0.9

1.0

1.1

1.2

1.3

1.4

0.80%

0.90%

1.00%

1.10%

1.20%

1.30%

1.40%

1.03%

1.14%

1.08%

1.04% 1.03%1.01% 1.01%

Top 100 Enterprises Average Agency Fee

in Primary Property Market (%)

2010 2014 2015 2016201320122011

Source: PRC Real Estate Consultancy and Agency Top 100 Enterprises Research Report 2015, China Index

Academy

Note: There is no data for the average agency fee in secondary property market.

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Nowadays, property consultancy and agency companies tend to engage in businessesinvolving both primary and secondary residential properties and utilize their client resources andmarket knowledge to enhance integrated businesses by forming alliance with property developersand even other competitors. Through well-comprehensive training system and selecting recognizedsales partners, both the primary and secondary market players could complement each other toachieve unique advantages, which make an important contribution to the market transformation.

Competitive landscape in the property consultancy and agency industry in Guangzhouprimary residential market

As one of the first-tier cities, the property consultancy and agency industry in Guangzhou isrelatively mature because of its higher degree of market-orientation. In 2016, the top 10 propertyconsultancy and agency companies had a total market share of 51.4% by primary commodityresidential area sold, where our Group has a market share of 1.9% and ranks eighth. Among thetop 10 companies in primary residential market, eight of them are nationwide companies in China,and which were established for more than 10 years. Two of them are currently listed companiesand four of them are related to property developers. The following list shows the ranking ofproperty consultancy and agency companies in the primary residential market in Guangzhou interms of the approximate GFA sold in 2016:

Ranking

(by approximate area sold) Agency name

Approximate

GFA sold in

2016

Market share of

total area sold

(sq.m.) (%)

1 Company A 3,132,900 21.5

2 Company B 1,615,900 11.1

3 Company C 528,700 3.6

4 Company D 512,500 3.5

5 Company E 402,700 2.8

6 Company F 338,300 2.3

7 Company G 311,200 2.1

8 Our Group 279,900 1.9

9 Company H 246,500 1.7

10 Company I 125,100 0.9

Source: DTZ C&W

Note: Companies A, B, C, F, G, H, I and Our Group are nationwide companies. Companies A and C are currently

listed companies. Companies E, F, I and Our Group are related to property developers.

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In 2016, the top 10 property consultancy and agency companies in Guangzhou had a totalmarket share of 56.1% by total transaction amount of primary commodity residential properties,where the Group has a market share of 1.9% and ranks ninth. The following list shows the rankingof property consultancy and agency companies in the primary residential market in Guangzhou interms of the approximate total transaction amount in 2016:

Ranking

(by approximate total transaction

amount) Agency name

Approximate

total transaction

amount in

Guangzhou in

2016

Market share of

total transaction

amount

(RMB million) (%)

1 Company A 57,500 24.3%

2 Company B 27,200 11.5%

3 Company C 9,900 4.2%

4 Company D 7,800 3.3%

5 Company F 7,400 3.1%

6 Company E 6,900 2.9%

7 Company G 5,300 2.2%

8 Company H 5,100 2.2%

9 Our Group 4,600 1.9%

10 Company I 1,400 0.6%

Source: DTZ C&W

Note: Other than Companies A and C which are currently listed companies, the companies above are private

companies and the actual percentage of agency fee for each project cannot be verified. The most reliable

data or statistics available is the total transaction amount of each agency company.

Secondary residential market

According to the Guangzhou Association of Real Estate Agents (廣州市房地產中介協會), bythe end of March 2016, Guangzhou has a total of 485 real estate agency companies, including 185secondary market real estate agency companies with outlets. As the secondary market real estateagency market becomes increasingly mature in Guangzhou, there are 16 large companies runningwith at least 10 outlets in the market. Among the top 10 companies in the secondary residentialmarket, four of them are nationwide companies in China while six of them only cover the marketin Guangdong Province. Only one of the top 10 companies is a listed company and two of them

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are related to property developers. Below is the list ranking the top 10 companies by number ofsales agents in 2016 where the Group ranked fifth in terms of the number of sales agents andseventh in terms of the number of outlets in Guangzhou:

Ranking

(by No. of Staff) Agency name

No. of

sales agents

in Guangzhou

in 2016

No. of outlets in

Guangzhou in

2016

Market share

(by no. of

outlets)

(%)

1 Company J 3,247 431 15.4

2 Company A 1,431 481 17.2

3 Company K 1,020 240 8.6

4 Company B 692 399 14.3

5 Our Group 117 25 1.0

6 Company E 111 98 3.5

7 Company L 68 24 0.9

8 Company M 59 16 0.6

9 Company N 51 30 1.1

10 Company P 39 23 0.8

Source: DTZ C&W

Note: Companies J, A, B and our Group are nationwide companies. Company A is a listed company. Company E

and our Group are related to property developers. There is no reliable data or statistics in relation to area

transacted and revenue of the top 10 property consultancy and agency companies for the secondary

residential market from the Guangzhou Association of Real Estate Agents or other government bodies, and

therefore the information in relation to revenue generated from the secondary market for the companies

above is not available.

For ranking of companies in the secondary residential market, the number of outlets of eachagency company is used as a parameter as the number of outlets represents market penetration. Incontrast to primary residential market transactions, which primarily take place through channelssuch as agents stationed at open sales exhibitions or booths organized by the property developers,secondary residential market transactions take place through the channels of physical agencyoutlets.

According to the 2017 Report on Housing Consumption in Guangzhou* (廣州市住房消費大

數據報告2017年) prepared by L+ Research Institute, a related company of Lianjia, which is one ofthe key real estate agency companies in Guangzhou, a ranking of market players by the number ofsecondary market online registrations (二手網簽) in 2016 was published. Online registration (網簽) is the process of registering a property transaction via offices of Guangzhou Association ofReal Estate Agents (‘‘GZREA’’). This ranking covers the secondary market online registrations (二手網簽) in the 11 administrative districts of Guangzhou, including Yuexiu District, Liwan District,Haizhu District, Tianhe District, Baiyun District, Huangpu District, Panyu District, Huadu District,Nansha District, Zengcheng District and Conghua District. It covered approximately 82% of thesecondary residential market transactions in Guangzhou in 2016 and is considered as one of thekey indicators of secondary residential market activity.

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There are no clear leaders yet in this secondary residential market, with the largest playerwhen ranked by number of outlets, Company A, accounting for only approximately 6.1% of themarket share based on secondary market online registrations (二手網簽) and the second largestplayer when ranked by number of outlets, Company J, accounting for only approximately 11.2% ofthe market share based on secondary market online registrations (二手網簽). The other top twoplayers when ranked by number of outlets, Company B and Company K, each accounted for evenless of the market share. These players have been in the Guangzhou market for many years, andyet have not managed to gain a dominant position in the secondary real estate market.

Competitive analysis in the residential market

According to comparable analyses performed and provided by the Company of the currentlylisted companies above, it was noted that Company C has a much larger market capitalisation thanthat of our Group, and as such, financial performance of Company C is not reasonably comparableto our Group.

Our Group’s revenue growth in 2016 underperformed that of Company A’s in agencyconsulting business as Company A (i) has a more diversified geographical scope and marketpresence in other regions in the PRC than our Group; and (ii) experienced a rapid growth insecondary property real estate agency business mainly attributable to the increase in its secondarybranches.

In 2016, our Group outperformed Company A in terms of net profit margin mainly because(i) unlike Company A, our Group did not have any interest-bearing borrowings and thus no interestor finance cost was incurred in 2016; and (ii) our Group’s administration and managementstructure is relatively simpler than Company A’s due to our Group’s key geographic focus being inGuangzhou and Pearl River Delta only.

The above analysis was made by comparing our financial performance to that of Company Abased solely on the annual report published by Company A which was obtained in the publicdomain.

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Retail market

The table below sets out certain data of the historical GFA of retail properties underconstruction, GFA of retail properties newly constructed, GFA of retail properties completed, GFAof retail properties sold, and the average selling price of retail properties in the Guangzhou retailmarket from the China Index Academy during the period indicated.

Guangzhou Retail Market 2011–2015

0

2

4

6

8

10

12

0

5,000

10,000

15,000

20,000

25,000

8.3

1.3

19,791

1.2

8.8

2.0

18,058

1.5

9.6

2.4

23,575

0.8

11.3

2.9

20,445

2.6

18,943

11.2

2.41.6

0.6 0.8 1.0 1.3 1.0

GFA of Retail Properties Under Construction (million sq.m.)

GFA of Retail Properties Newly Constructed (million sq.m.)

GFA of Retail Properties Completed (million sq.m.)

GFA of Retail Properties Sold (million sq.m.)

Average Selling Price of Retail Properties (RMB/sq.m.)

2011 2012 2013 2014 2015

GFA

(m

illi

on s

q.m

.)

RM

B p

er s

q.m

.

Source: China Index Academy

The GFA of retail properties under construction in Guangzhou grew from approximately 8.3million sq.m. in 2011 to approximately 11.2 million sq.m. in 2015. The GFA of retail propertiesnewly constructed in Guangzhou also maintained overall steady growth in the past few years. Itgrew from approximately 1.3 million sq.m. in 2011 to approximately 2.4 million sq.m. in 2015. In2014, the figure even increased to approximately 2.9 million sq.m., with a year-on-year increase ofapproximately 19.5%. The GFA of retail properties completed in Guangzhou fluctuated in the pastfew years. The figure decreased from approximately 2.6 million sq.m. in 2014 to approximately1.6 million sq m. in 2015, sharply down by approximately 37.9%. The GFA of retail propertiessold in Guangzhou maintained at an overall steady growth trend from approximately 0.6 millionsq.m. in 2011 to approximately 1.3 million sq.m. in 2014. In 2015, the figure decreased back to alevel similar to the level in 2013 at approximately 1.0 million sq.m. The average selling price ofretail properties in Guangzhou fluctuated from 2011 to 2015. In 2015, the figure came down toapproximately RMB18,943 per sq.m., which was similar to its level in 2012.

It is expected that the supply, demand and price in the Guangzhou retail market will becomemore stabilised in the near future. The suburbs outside the six core districts in Guangzhou willbecome an important source of new retail shop supply and those retail development outside the sixcore districts will take time to become mature and be digested by the market.

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Future Opportunities

Pearl River Delta economy is transforming and expanding through the establishment ofvarious free trade zones. The real estate market would also be benefited by the development of thefree trade zones. With its experience and history, our Group has the capability to expand itsservices lines in key cities of the Pearl River Delta.

In other major developed cities including Beijing, Shanghai and Shenzhen, urban land supplyis in shortage and therefore the market is more dependent on secondary commodity property.Currently, the primary residential property is still dominant in Guangzhou market. It will beessential to maintain the market share of primary residential market in the short term. In the longrun, the potential room of expansion will be in the secondary market and the key is to expand thenumber of staffs and shops so as to increase the market coverage and capture the growth insecondary residential market. Our Group currently has 39 retail outlets in Guangzhou to competewith other competitors in secondary residential market. An increase in outlets and staff memberswill help expand the business volume of the Company in both primary and secondary market.

With the advancement of technology and the previous experience of the Company, theintegration of client resources is easier through the one-stop shop integrated platform. In theprocess of service flow, apart from traditional property consultancy and agency services, ourGroup has also offered additional integrated services such as online platform allowing otheragencies to participate in property agency projects, assisting customers to obtain relevant propertycertificates and procuring corporate client to lease commercial space. The adoption of onlineplatform also lower the pressure on operation cost and provide a more efficient service.

Threats and Challenges

Undeveloped land in Guangzhou is becoming increasingly scarce and the cost of acquiringsuitable land for property development has been increasing. Therefore, the supply of newresidential properties is expected to decrease slightly in the coming years. To meet the residentialneeds, people will switch the attention to secondary market.

In the past decade, the rapid real estate development in PRC has also been accompanied bymacroeconomic control measures regularly. Therefore, the fluctuations in the supply of, or demandfor, and the prices of residential properties in Guangzhou and other regions in the Pearl RiverDelta may have an impact on business performance of the property agency and consultancycompanies. Meanwhile, further restrictive measures adopted by the PRC government on bank loansand property purchases may depress the property market in many areas of the PRC, includingGuangzhou and elsewhere in the Pearl River Delta, where the business of our Group locates.

Brand management is also important to the survival of property agency and consultancycompanies within the industry. As most of the property agency and consultancy companiessignificantly rely on their brand reputation and images to attract potential customers, any negativeincident or negative publicity concerning our businesses and projects would adversely affect ourGroup’s reputation, business performance, and market positions. Thus, without a good internalmanagement system, the brand recognition can be easily ruined.

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Although there is improvement of the regulatory regimes, the entry barrier is still relativelylow in Guangzhou and other regions in Pearl River Delta. For example, most of the secondaryproperty agency companies in Guangzhou are small in scale with less than 10 outlets. Thecompetition could be regarded as fragmented in the market. As the property market in the PearlRiver Delta is still evolving, there is always a need for the property agency and consultancycompanies to respond to changes in market conditions more quickly and increase the market sharethrough opening up more outlets in order to maintain or enhance their competitiveness.

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Our business operations are mainly based in Guangzhou, China and are subject to regulationsby the PRC government. Pursuant to the Foreign Investment Industry Guidance Catalogue (外商投

資產業指導目錄), which took effect on 10 April 2015 and was recently amended on 28 July 2017,there are no restrictions on foreign investment in the real estate service industry in China. Thissection summarizes the main laws and regulations which impact the key aspects of our business.

LAWS AND REGULATIONS RELATING TO OUR OPERATIONS

Regulation of the Real Estate Services Industry

The principal regulations governing the real estate service industry in China include the Lawon Administration of the Urban Real Estate (城市房地產管理法), which took effect on 1 January1995 and was lastly amended on 27 August 2009, and the Provisions on the Administration ofReal Estate Brokerage (房地產經紀管理辦法), which took effect on 1 April 2011 and wassubsequently amended on 1 April 2016. Along with the Regulation on Guangzhou Real EstateAgency Services Administration (廣州市房地產中介服務管理條例), which took effect on 1January 2003 and was subsequently amended on 23 December 2015, it governs the real estateservice industry in Guangzhou. We have met and are in compliance with all the materialregistration and license requirements (including social insurance and housing provident fundregistration requirements) for conducting our business, as summarised below. During the TrackRecord Period, we were not in strict compliance with the contribution requirements for the socialinsurance and housing provident funds for some of our employees in the PRC. For details, seesection headed ‘‘Business — Non-compliance’’. Despite such historical non-compliance, our PRClegal advisers are of the view that the effectiveness of our registrations and licenses would not benegatively affected.

Regulation on the Establishment of Real Estate Services Companies

According to the Law on Administration of the Urban Real Estate, real estate services referto real estate consulting services, real estate appraisal services, and real estate brokerage servicesetc. Under the PRC laws, a company is required to obtain a business license from the StateAdministration for Industry and Commerce (the ‘‘SAIC’’), before it can commence business.According to the Regulation on Guangzhou Real Estate Agency Services Administration, we arerequired to file with the city real estate regulatory authorities within one month after effecting theSAIC registration for our company and each of our outlets. Order for rectification with prescribedperiod will be made for non-compliance, and failure to obey the order will result in a fine. Tocontinue its existence as a real estate service company in Guangzhou, a real estate agent shall havea registered capital of at least RMB300,000 and employ at least three qualified real estate brokers,and shall have a fixed avenue of at least 15 square meters. It shall keep proper records and complywith prescribed procedures in delivering its services. It shall also satisfy other requirements setforth in the Law on Administration of the Urban Real Estate. The city real estate regulatoryauthorities will examine the real estate agents for their qualification of both its professionals andbusiness.

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Regulation of Real Estate Agency Companies and Agents

Pursuant to Provisions on the Administration of Real Estate Brokerage and the Provision onthe Sale of Commercial Houses (商品房銷售管理辦法), which took effect on 1 June 2001, a realestate developer may entrust a real estate service organization as a broker to pre-sell or sellprimary residential housing. The real estate broker shall make public prescribed information, suchas its business certificate, content of services and fee charges, shall present clients with relevanttitle certificates or sale permits of the properties and the related letters of authorization. The realestate broker is not permitted to (a) act as agents to sell primary residential housing for whichrequisite certificates, permits or authorization letters have not been obtained, (b) provide falsestatements on the conditions of any property in any advertisement, (c) charge items and fees whichdo not inform the client in advance, or (d) violate any PRC advertisement rules. The real estateagent professional shall not engage in real estate brokerage business and charge fee on his ownbehalf.

According to the Guangzhou Land and Housing Bureau’s Notice on Implementing the Policyof Guangzhou City Regarding the Control of Real Estate Market and Enhancing the Supervision ofReal Estate Market (廣州市國土房管局關於落實廣州市房地產市場調控政策加強房地產市場監管

的通知), which took effect on 12 April 2013, the real estate developer shall register its sell andpre-sell price with the real estate administration authority and accept its instructions. According toGuangzhou Provision on Real Estate Transaction Supervision and Administration (廣州房屋交易監

督管理辦法), which took effect on 1 November 2014, real estate agents and its employees areprohibited from receiving or keeping the real estate transaction payment, and they shall inform theclient of the transaction account opened by the real estate administration authority. The real estateagent can only make public the information of the house for sale or for rent only after obtainingthe written consent of the client. The real estate agent shall make public the registered price of thenew house, and charge fees as disclosed. For secondary house, the real estate agent shall informthe client of the relevant information regarding the houses and relevant rules. Informationregarding the third party rights, the rent registration, the rights and identities of the sellers orlandlords, and any interest it may have in the transaction shall be informed to the client in writing.The real estate agent and its employees shall sign written contract with the client, and keep recordswithin the effective period of the contract.

Pursuant to the Notice on Strengthening the Administration on Real Estate Agents andPromoting the Healthy Development of the Industry (關於加強房地產中介管理促進行業健康發展

的意見) which took effect on 29 July 2016, the government authorities have imposed a stricterrequirement on real estate agents. It requires the real estate agent to verify the propertyinformation in the real estate brokerage agreement and prohibits provision of agency service toproperties which have not fulfilled the requirement for transaction. The real estate agent shallprepare the specification of property condition for client, and all property information be madepublic through different channels shall be consistent with each other, which shall be real, completeand accurate. Property information shall be removed within 2 working days upon its sale or rent.The real estate agent shall inform the client of the tax rules and any preferential policies he mayenjoy. The real estate agent shall not in any form force client to take service of any financialinstitution it appointed. The employees of the real estate agent shall make public the houseinformation in their real name through internet or other means. For real estate agent who provideservice through internet, it should register with the provincial communication authority and

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register with the local real estate administration authority where it provides service. We haveregistered with the Guangdong communication authority, and have registered with the Guangzhoureal estate administration authority as required.

According to Notice on Further Promoting the Stable and Healthy Development of the RealEstate Market from the People’s Government Office in Guangzhou (廣州市人民政府辦公廳關於進

一步促進我市房地產市場平穩健康發展的意見), which took effect on 4 October 2016, thegovernment will provide guidelines on the property price. The real estate projects which haveobtained the permit for pre-sale or have been completed for sale shall make public such projectsand put all these properties on sale. All these properties shall be sold at the expressly markedprice, and shall only have one price as registered with the real estate administration authority. Realestate projects which have not yet obtained permits for pre-sale shall not be put on sale. The realestate agent shall not take advantage of any false information and shall not force clients to pay forother services and charge other fees than as permitted.

According to the Notice on Further Strengthen Control and Adjustment of the Real EstateMarket (關於進一步加強房地產市場調控的通知) issued by Guangzhou Government on 30 March2017, the real estate agent shall inform the client of the real estate control and adjustmentmeasures in writing and ask the client to sign an acknowledgement of receipt before engaging inthe property transaction.

In accordance with the Provisional Regulation on the Credit Administration of Real EstateAgent in Guangzhou (廣州市房地產中介信用管理暫行規定) which took effect on 24 July 2017, acredit administration system was specifically established for real estate agencies and theiremployees. A real estate agency and its branches shall display the Credit Information Card clearlyvisible in their fixed business place, and a real estate agency participant shall wear his CreditInformation Card when providing intermediary services.

Regulation of Broker Qualification

According to the Provision on Management of Brokers (經紀人管理辦法), which took effecton 28 August 2004, brokers include individuals, legal persons and other entities that act asintermediary brokers or agents in economic transactions for the purpose of obtaining commissions.The local offices of the SAIC are the administrative bodies for brokers, responsible for handlingregistrations of brokers and supervising their activities. Different types of brokerages are requiredto obtain corresponding qualification licenses applicable to their respective businesses. Within 20days after a brokerage employs or dismisses any broker, it shall file the broker’s information andthe related contracts with the local offices of SAIC. The provision became invalid from 29 April2016, and the SAIC filing is no longer a prerequisite for a brokerage to employ or dismiss anybroker.

Pursuant to Provisions on the Administration of Real Estate Brokerage, Regulation onGuangzhou Real Estate Agency Services Administration and the Interim Regulation onProfessional Qualification for Real Estate Brokers (房地產經紀專業人員職業資格制度暫行規定)and the Implementing Measures on the Examinations of Professional Qualification for Real EstateBrokers (房地產經紀專業人員職業資格考試實施辦法) both took effect on 25 June 2015, topractice as a qualified real estate broker, an individual may first pass the professional examination

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and obtain the Professional Qualification for real estate brokers. The Real Estate Brokeragecontract shall be signed by one qualified real estate broker or two qualified real estate brokerassistants who engage in such business.

Pursuant to the Notice on Initiating the Professional Level Certification of Guangzhou RealEstate Agency Service (關於正式啟動廣州市房地產中介服務職業水準認證工作通知) andGuangzhou Real Estate Agent Services Professional Level Certification Management Measures (廣州市房地產中介服務職業水準認證管理辦法) which took effect on 18 September 2016, theGuangzhou Real Estate Agent Association had initiated a certification system to strengthenprofessional training of real estate brokers, the real estate brokers shall take the examination oflocal qualification and continuous education for obtaining the Professional Qualification for realestate brokers.

Regulation of Real Estate Intermediary Service Charges

According to Notice on Opening of Charges for Real Estate Consultation and Delegating theCharges Administration for Real Estate Brokerage (關於放開房地產諮詢收費和下放房地產經紀收

費管理的通知), which took effect on 1 July 2014, the governmental guideline on charges for realestate consultation had been removed, and the administration for charges on real estate brokeragehad been delegated to the provincial government. According to the Circular of Forwarding theNotice of the National Development and Reform Commission and Ministry of Housing and Urban-Rural Development regarding the Opening of Charges for Real Estate Consultation and Delegatingthe Charges Administration for Real Estate Brokerage (轉發國家發展改革委、住房城鄉建設部關

於放開房地產諮詢收費和下放房地產經紀收費管理的通知), which took effect on 29 August 2014,the guideline on charges for real estate brokerages in Guangdong had been removed, and chargesfor both real estate consultation and real estate brokerage in Guangdong can be market priced. Thereal estate agent is to make all its fee charges public information, including the price for each ofits service provided, and shall not charge any unspecified item and fee.

Labour Protection

In accordance with the Labour Law of the People’s Republic of China (中華人民共和國勞動

法), which took effect on 1 January 1995 and was subsequently amended on 27 August 2009, theLabour Contract Law of the People’s Republic of China (中華人民共和國勞動合同法), which tookeffect on 1 January 2008, subsequently amended on 28 December 2012 and came into effect on 1July 2013, and the Implementation Rule of the Labour Contract Law of the PRC (中華人民共和國

勞動合同法實施條例) which took effect on 18 September 2008, labour contracts in written formshall be executed to establish labour relationships between employers and employees. Employersshall establish and develop labour rules, regulations and systems according to PRC laws to protectthe rights and ensure the performance of duties of employees, and career development and trainingsystems shall be formed. Employers shall also set up and develop the labour safety and healthsystem in strict compliance with the regulations and standards of labour safety and sanitation ofthe PRC and provide education on labour safety and sanitation for the employees to prevent work-related accidents and occupational harm. Necessary articles for labour protection in compliancewith the labour safety and health requirements shall be provided to employees and regular healthexamination for employees engaged in work with occupational hazards shall be conducted.

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Social Insurance and Housing Provident Fund

In accordance with the Law of Social Insurance of the People’s Republic of China (中華人民

共和國社會保險法) which took effect on 1 July 2011, the Interim Regulation on the Collectionand Payment of Social Insurance Premiums (社會保險費征繳暫行條例) which took effect on 22January 1999, the Decision of the State Council on the Establishment of Basic Medical InsuranceSystem for Urban Workers (國務院關於建立城鎮職工基本醫療保險制度的決定) which took effecton 14 December 1998, the Decisions of the State Council on the Establishment of Unified Systemof Basic Retirement Insurance Fund for the Employees of Enterprises (國務院關於建立統一的企業

職工基本養老保險制度的決定) which took effect on 16 July 1997, the Regulations of Insurancefor Work-Related Injury (工傷保險條例) which took effect on 1 January 2004, subsequentlyamended on 1 January 2011, the Regulations of Insurance for Unemployment (失業保險條例)which took effect on 22 January 1999, the Provisional Insurance Measures for Maternity ofEmployees (企業職工生育保險試行辦法) which took effect on 1 January 1995, and theRegulations on Management of Housing Provident Fund (住房公積金管理條例) which took effecton 3 April 1999 and was subsequently amended on 24 March 2002, employers shall makepayments of the basic medical insurance, basic retirement insurance, insurance for work-relatedinjury, unemployment insurance, maternity insurance and housing provident fund for theemployees.

If the employer fails to go through the formalities for social insurance registration, the socialinsurance administration department shall order it to make rectification within the stipulatedperiod. If rectification is not made within the stipulated period, the employer shall be imposedwith a fine. If the employer does not pay the full amount of the Social Insurance premiums asscheduled, the social insurance premium collection institution shall order it to pay within thestipulated period together with an overdue fine. If the payment is not settled by the prescribed timelimit, the employer shall be imposed a fine. If the employer fails to go through the formalities forhousing provident fund, the housing provident fund management centre shall order it to makerectification within a period; where it fails to do so as scheduled, a fine shall be imposed. If theemployer is overdue in the payment or underpays, the housing provident fund administrationcentre shall order the employer to pay up in the prescribed time limit, if the employer still fails topay up as scheduled, the fund administration centre may apply to the court for enforcement of theunpaid amount. For non-compliance relating to social insurance and housing provident fund duringthe Track Record Period, see ‘‘Business — Non-Compliance’’.

Trademark Law

Pursuant to the Trademark Law of the PRC (中華人民共和國商標法), which took effect on 1March 1983, and was last amended on 1 May 2014, and the Implementation Rules of the PRCTrademark Law (中華人民共和國商標法實施條例) which took effect on 15 September 2002 andwas subsequently amended on 1 May 2014, a registered trademark means a trademark that hasbeen approved by and registered with the trademark office, including goods marks, service marks,collective marks and certification marks. A registered trademark is valid for 10 years commencingon the date of registration approval. For licensed use of a registered trademark, a licensor shall filerecord of the licensing of the said trademark with the trademark bureau, and the licensing shall begazetted by the trademark bureau, non–filing of the licensing of a trademark shall not be contestedagainst a good faith third party. The following acts shall constitute an infringement of the

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exclusive right to use a registered trademark: (1) using a trademark that is identical or similar to aregistered trademark of the same type of commodities or similar commodities without a licensefrom the registrant of that trademark; (2) selling commodities that infringe upon the exclusiveright to use a registered trademark; (3) forging or manufacturing without authorization the marksof a registered trademark, or selling marks of a registered trademark that are forged ormanufactured without authorization; (4) changing another party’s registered trademark and puttingthe commodities with the changed trademark into the market without the consent of the registrantof that trademark; or (5) other conduct that would hinder another party’s exclusive right to use itsregistered trademark.

In the event that disputes arise from any of the above acts, the parties shall negotiate towarda resolution. If any party refuses to negotiate or if the negotiation proves futile, the registrant ofthat trademark or the interested persons may file a lawsuit before a People’s Court or refer the caseto the administrative department of industry and commerce. If the administrative department ofindustry and commerce concludes that an infringement is constituted, it may order an immediateend to the infringement, and may confiscate or destroy the infringing commodities and the toolsused especially for the manufacturing of those commodities and the forging of marks of theregistered trademark, and may impose a fine.

LAWS AND REGULATIONS RELATING TO TAXATION

Corporate Income Tax

In accordance with the Corporate Income Tax Law of the PRC (中華人民共和國企業所得稅

法), which took effect on 1 January 2008 and last amended on 24 February 2017, and theImplementation Rules for the Corporate Income Tax Law of the PRC (中華人民共和國企業所得稅

法實施條例) which took effect on 1 January 2008 (collectively, the ‘‘CIT Law’’), taxpayers consistof resident enterprises and non-resident enterprises. Resident enterprises are defined as enterprisesthat are established in China in accordance with PRC laws, or that are established in accordancewith the laws of foreign countries (region) but whose actual or de facto control entity is within thePRC. Non-resident enterprises are defined as enterprises that are set up in accordance with thelaws of foreign countries (region) and whose actual administration is conducted outside the PRC,but (i) have entities or premises in China, or (ii) have no entities or premises but have incomegenerated from China. According to the CIT Law, foreign invested enterprises in the PRC aresubject to corporate income tax at a uniform rate of 25%. A non-resident enterprise that has anestablishment or premises within the PRC shall pay corporate income tax at a rate of 25% on itsincome that is derived from such establishment or premises inside the PRC and that is sourcedoutside the PRC but is actually connected with the said establishment or premises. A non-residententerprise that has no establishment or premises within the PRC but has income from the PRC, anda non-resident enterprise that has establishment or premises in the PRC but its income has noactual connection to such establishment or premises in the PRC, shall be subject to PRCwithholding tax at the rate of 10% on its income sourced from the PRC.

Pursuant to the PRC CIT Law, income from equity investment between qualified residententerprises such as dividends and bonuses, which refers to investment income derived by a residententerprise from direct investment in another resident enterprise, is tax-exempt income.

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In addition, pursuant to the Arrangement between Mainland China and the Hong KongSpecial Administrative Region for the Avoidance of Double Taxation and the Prevention of FiscalEvasion with respect to Taxes on income (內地和香港特別行政區關於對所得避免雙重徵稅和防止

偷漏稅的安排) which took effect in mainland PRC on 1 January 2007, a PRC resident enterprisewhich distributes dividends to its Hong Kong shareholders should pay income tax according toPRC law, however, if the beneficiary of the dividends is a Hong Kong resident enterprise, whichdirectly holds no less than 25% equity interests of the aforesaid enterprise (i.e. the dividenddistributor), the tax levied shall be 5% of the distributed dividends. If the beneficiary is a HongKong resident enterprise, which directly holds less than 25% equity interests of the aforesaidenterprise, the tax levied shall be 10% of the distributed dividends. Meanwhile, Circular of theState Administration of Taxation on the Interpretation and the Determination of the ‘‘BeneficialOwners’’ in the Tax Treaties (國家稅務總局關於如何理解和認定稅收協定中‘‘受益所有人’’的通

知) has stipulated some factors that are unfavourable to the determination of ‘‘beneficial owner’’.

Dividend Tax

Pursuant to the Circular of the State Administration of Taxation on Relevant Issues relatingto the Implementation of Dividend Clauses in Tax Agreements (國家稅務總局關於執行稅收協定

股息條款有關問題的通知) which took effect on 20 February 2009, all of the followingrequirements shall be satisfied in order to enjoy the preferential tax rates provided under the taxagreements: (i) the tax resident that receives dividends should be a company as provided in the taxagreement; (ii) the equity interests and voting shares of the PRC resident company directly ownedby the tax resident reaches the percentages specified in the tax agreement; and (iii) the equityinterests of the Chinese resident company directly owned by such tax resident at any time duringthe twelve months prior to receiving the dividends reach a percentage specified in the taxagreement.

Pursuant to the Administrative Measures for Non-resident Enterprises to Enjoy Treatmentsunder Tax Treaties (非居民納稅人享受稅收協定待遇管理辦法) which took effect on 1 November2015, a non-resident taxpayer qualified to enjoy the treatment under the tax treaties could enjoythe treatment automatically when filing tax return or making withholding declaration bywithholding agents, and will be subject to the follow up administration of the tax authoritiesthereafter.

Value-added Tax

According to the Provisional Regulations on Value-added Tax of the PRC (中華人民共和國

增值稅暫行條例) which took effect on 1 January 2009, and last amended on 6 February 2016, andthe Detailed Rules for the Implementation of the Provisional Regulations on Value-added Tax ofthe PRC (中華人民共和國增值稅暫行條例實施細則) which took effect on 1 January 2009 andsubsequently amended on 1 November 2011, all enterprises and individuals that engage in the saleof goods, the provision of processing, repair and replacement services, and the importation ofgoods within the territory of the PRC shall pay value-added tax.

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Urban Maintenance and Construction Tax as well as Education Surtax

The foreign-invested enterprises, foreign enterprises and individual foreigners are governedby the Circular of the State Council on Unifying the System of Urban Maintenance andConstruction Tax and Education Surtax Paid by Domestic and Foreign-invested Enterprises andIndividuals (國務院關於統一內外資企業和個人城市維護建設稅和教育費附加制度的通知), whichtook effect on 1 December 2010, the Tentative Regulations on Urban Maintenance andConstruction Tax of the PRC (中華人民共和國城市維護建設稅暫行條例) which took effect on 1January 1985 and subsequently amended on 8 January 2011 and the Tentative Provisions on theCollection of Educational Surtax (徵收教育費附加的暫行規定) which took effect on 1 July 1986and last amended on 8 January 2011.

Pursuant to Tentative Provisions on the Collection of Educational Surtax, all units andindividuals who pay consumption tax, value-added tax and business tax shall also be required topay educational surtax in accordance with these Provisions. The educational surtax rate is 3% ofthe amount of value-added tax, business tax and consumption tax actually paid by each unit orindividual, and the educational surtax shall be paid simultaneously with value-added tax, businesstax and consumption tax.

Pursuant to Tentative Regulations of the PRC on Urban Maintenance and Construction Taxand Circular of the State Administration of Taxation on Issues Concerning the Collection of theUrban Maintenance and Construction Tax (國家稅務總局關於城市維護建設稅徵收問題的通知),which took effect on 12 March 1994, any unit or individual liable to consumption tax, value-addedtax and business tax shall also be required to pay urban maintenance and construction tax.Payment of urban maintenance and construction tax shall be based on the consumption tax, value-added tax and business tax which a taxpayer actually pays and shall be made simultaneously whenthe latter are paid. Furthermore, the rates of urban maintenance and construction tax shall be 7%,5% and 1% for a taxpayer in a city, in a county town or town and in a place other than a city,county town or town respectively.

LAWS AND REGULATIONS RELATING TO FOREIGN EXCHANGE

Foreign Exchange Administration

In accordance with the Foreign Exchange Administrative Regulations of the PRC (中華人民

共和國外匯管理條例) which took effect on 1 April 1996 and lastly amended on 5 August 2008,Renminbi is generally freely convertible for payments of current account items, such as trade andservice-related foreign exchange transactions and dividend payments, but not freely convertible forcapital account items, such as capital transfer, direct investment, investment in securities,derivative products or loans unless prior approval of the State Administration of Foreign Exchangeis obtained.

Pursuant to the Regulation of Settlement, Sale and Payment of Foreign Exchange (結匯、售

匯及付匯管理規定), promulgated by the People’s Bank of China and took effect on 1 July 1996,the Foreign-Invested Enterprises, may only buy, sell or remit foreign currencies at those banksauthorized to conduct foreign exchange business after providing valid commercial supportingdocuments and, in the case of capital account item transactions, obtaining approvals from the StateAdministration of Foreign Exchange.

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According to the Circular on Reforming the Management Approach regarding the Settlementof Foreign Exchange Capital of Foreign-invested Enterprises (關於改革外商投資企業外匯資本金

結匯管理方式的通知), which took effect on 1 June 2015 and Circular on Reforming andRegulating the Management Policy Regarding the Settlement of Capital Account (關於改革和規範

資本項目結匯管理政策的通知) which took effect on 9 June 2016, equity investments within Chinaby a foreign-invested enterprise, whose main business is investment, of any Renminbi fundsconverted from its registered capital are allowed. Meanwhile, the use of such Renminbi cannot be:

. directly or indirectly used for the payment beyond the business scope of the enterprisesor the payment prohibited by national laws and regulations;

. unless otherwise explicitly provided by laws and regulations, directly or indirectly usedfor investment in securities or other financial products investment, except the bankcapital-protection products;

. granting loans to non-related enterprises unless explicitly permitted under the scope ofbusiness; or

. for construction or purchase of real estate not for self-use, save for real estateenterprises.

Furthermore, foreign-invested enterprises are allowed to settle foreign exchange capitals on adiscretionary basis; the foreign-invested enterprises may, according to its actual business needs,settle with a bank the portion of the foreign exchange capital in its capital account for which therelevant foreign exchange bureau has confirmed monetary contribution rights and interests (or forwhich the bank has registered the account-crediting of monetary contribution). For the time being,foreign-invested enterprises are allowed to settle 100% of their foreign exchange capitals on adiscretionary basis. SAFE may adjust the foregoing percentage as appropriate based on prevailinginternational balance of payments.

In accordance with the SAFE Circular No. 37, a ‘‘special purpose vehicle’’ means an overseasenterprise directly established or indirectly controlled by a domestic resident (including domesticinstitutions and domestic individual residents) for the purpose of engaging in investment andfinancing with the domestic enterprise assets or interests he legally holds, or with the overseasassets or interests he legally holds. Domestic residents establishing or taking control of a specialpurpose vehicle abroad which engages in overseas investment and financing or makes round-tripinvestments in China are required to effect foreign exchange registration with the local foreignexchange bureau. Pursuant to the SAFE Circular No.13, the initial foreign exchange registrationfor establishing or taking control of a special purpose company by domestic residents can be filedwith a qualified bank, instead of the local foreign exchange bureau.

Dividend Distribution

The principal laws governing dividend distributions by our PRC Subsidiaries include the PRCCompany Law (中華人民共和國公司法), the dividend distribution by wholly foreign-ownedenterprises (‘‘WFOE’’) and Sino-foreign equity joint ventures (‘‘EJV’’) are further governed by thePRC Law on Wholly Foreign-owned Enterprises (中華人民共和國外資企業法) and its

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Implementation Regulations (中華人民共和國外資企業法實施細則), the PRC Law on Sino-foreignEquity Joint Ventures (中華人民共和國中外合資經營企業法) and its Implementation Regulations(中華人民共和國中外合資經營企業法實施條例).

Under these laws and regulations, PRC companies, including WFOEs and EJVs, may paydividends only out of their accumulated profits, if any, determined in accordance with PRCaccounting principles. In addition, PRC companies, including domestic companies, WFOEs andEJVs are required to set aside each year at least 10% of their after-tax profit based on PRCaccounting principles to their statutory general reserves funds until the cumulative amount of suchreserve fund reaches 50% of their registered capital. These reserves are not distributable as cashdividends. Furthermore, EJVs and WFOEs in the PRC may also be required to set aside individualfunds for employee welfare, bonuses and development, at the discretion of such PRC companiesand as stipulated in their articles of association. These reserves or funds are not distributable asdividends.

POLICIES AND MEASURES ON CONTROLLING AND ADJUSTING ON THE HOUSINGMARKET

The property market in China revealed different growth patterns in different periods of time.In the recent decade, it has also experienced a number of highs and lows. Relevant governmentdepartments have introduced policies and measures from time to time to encourage or restrictcontrol over housing supply and housing prices.

These policies and measures have included:

. raising the benchmark interest rates of commercial banks, which tends to dampenproperty development by raising the cost of financing projects and to dampen propertypurchases by raising the costs of mortgages;

. placing additional limitations on the ability of commercial banks to make loans toproperty developers and property purchasers, for example, by requiring that developersmeet more stringent financial standards and requiring higher down payments bypurchasers (particularly those not buying their first home);

. increasing minimum down payments for the purchase of a second residential property ofa household;

. imposing additional taxes and levies on property sales, which tends to reduce demand bymaking purchases more expensive;

. limiting the availability of individual housing provident fund loans for the purchase of asecond residential property;

. tightening the availability of individual housing loans in the property market toindividuals and their family members with more than one residential property;

. restricting foreign investment in the PRC property sector, which reduces the financingoptions of property developers and the pool of potential property purchasers;

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. restricting the supply of land for property development, which reduces the volume oftransactions in the market and potentially the construction of housing that will remainempty after purchase for speculative purposes; and

. restricting the purchase of properties by certain individuals and sale of properties duringa holding period.

Encouraged or restricted controls of relevant government departments may affect thetransaction volume and price of property market, which may in turn affect our businessperformance to a certain extent. In general, we believe that despite the potential short-termnegative impact on the property market created by those policies and measures, they are unlikelyto have long-term material adverse effect on the property market.

From 2003 to 2005, due to the rapid increase in general housing prices, the State Councilissued a number of documents including the Circular on Strongly Stabilizing Housing Price (關於

切實穩定住房價格的通知) in 2005 to impose measures to curb the soaring of housing prices. On24 May 2006, the Ministry of Construction and relevant government authorities jointly issued theOpinions on Adjusting the Housing Supply Structure and Stabilizing the Housing Prices (關於調整

住房供應結構穩定住房價格的意見) to encourage the development of low-to-medium price andsmall-to-medium size housing and economically affordable housing where at least 70% of the totalconstruction area must be used in the construction of building with unit floor area of 90 sq.m. orbelow.

In early 2008, the commodity housing transaction nationwide saw a shrinkage. Pursuant tothe Opinion on Promoting the Healthy Development of Real Estate Market (關於促進房地產市場

健康發展的若干意見) promulgated by the General Office of the State Council, the business taxlevied on property transfer was significantly reduced to support the purchase of ordinary housing.

By the end of 2009, the property market experienced rapid growth again. Since the beginningof 2010, the State Council has issued documents including the Notice on Resolutely Curbing theSoaring of Property Price in Certain Cites (關於堅決遏制部分城市房價過快上漲的通知) and theNotice on Issues Relating to Further Regulating the Control of Property Market (關於進一步做好

房地產市場調控工作有關問題的通知) to curb the soaring of property price in certain citiesthrough increasing the minimum amount of down payment, controlling banking credit lines,increasing housing supply and imposing purchase restriction. Based on the requirements of thesedocuments, various cities in China have implemented the ‘‘purchase restriction’’ measure. InGuangzhou, the government issued the Implementation of the Content of Notice on ResolutelyCurbing the Soaring of Property Price in Certain Cites and Endeavoring to Let Everyone HasHome to Live (關於貫徹落實國務院關於堅決遏制部分城市房價過快上漲的通知精神努力實現住

有所居的意見) and the Implementing Opinions on Implementation on the Notice on IssuesRelating to Further Regulating the Control of Property Market (關於貫徹國務院辦公廳關於進一步

做好房地產市場調控工作有關問題的通知的實施意見) to implement the above notices andimposed controlling measures including purchase restriction, which provided that sale of houseswill be suspended for residential family with 2 or more houses, non-residential family with 1 ormore house and non-residential family who cannot provide one-year or more payment proof ofindividual income Tax or social insurance during the past two years.

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On 26 February 2013, in response to rising expectation of increasing house price, GeneralOffice of the State Council issued the Notice of the General Office of the State Council onContinuing to Effectively Regulate the Real Estate Market (關於繼續做好房地產市場調控工作的

通知) and required local governments to come up with price control targets and continue toenforce purchase restriction. In order to enforce the above requirement, Guangzhou governmenthas issued the Opinions on Further Regulating the Control of Property Market (關於進一步做好房

地產市場調控工作的意見). To further strengthen the purchase restriction, and require banks tofurther improve the down payment of loan for second house. The opinion prohibited those non-residents who cannot provide payment proof of individual income tax or social insurance for 3consecutive years during the last 5 years from the purchase of house.

In 2014, the property market in China began to hit its trough. To boost the property market,in March 2015, the Notice on Issues concerning the Policies for Individual Housing ProvidentLoans (關於個人住房貸款政策有關問題的通知) was jointly issued by the People’s Bank of China,the Ministry of Housing and Urban Rural Development and the China Banking RegulatoryCommission, and the Notice on Adjusting Policies of Business Tax on Individual Transfer ofResidential Properties (關於調整個人住房轉讓營業稅政策的通知) was issued by the StateAdministration of Taxation and Ministry of Finance to reduce the down-payment for second homepurchase to no less than 40% and the holding time requirement for enjoying business tax holidayfor disposal of ordinary housing by individuals is shortened from five years to two years.

In October 2016, in order to curb the rapid growth of house price, ten cities issued controland adjustment policies for real estate market. In Guangzhou, the Government issued the Opinionon Further Promotion of Healthy and Stable Development of Real Estate Market in Guangzhou (關於進一步促進我市房地產市場平穩健康發展的意見) on 4 October 2016, and continue to strictlyenforce the purchase restriction and differentiated housing credit lending policies. On 17 March2017, the Guangzhou government issued the Notice on Further Completion of Stable and HealthyDevelopment (關於進一步完善我市房地產市場平穩健康發展政策的通知), which provided that,except for Zengcheng and Conghua Districts, the purchase restriction policies have beenstrengthened, and suspended the purchase of house for non-Guangzhou resident, who cannotprovide payment proof of 5 consecutive years or more of individual income tax or socialinsurance. In addition, more differentiated housing credit policies will be implemented. On 30March 2017, the Guangzhou government issued the Notice on Further Strengthen Control andAdjustment of the Real Estate Market (廣州市人民政府辦公廳關於進一步加強房地產市場調控的

通知) to further strengthen the control and adjustment over real estate market in Guangzhou. Thenotice provides, among others, that (i) new house purchased by household can only be transferredor be divided after two years from the date of property certificate; (ii) for house newly purchasedby legal entities, it can only be transferred after three years since the date of property certificate;(iii) non-Guangzhou household can only purchase or be granted one house in Zengcheng andConghua; and (iv) the commercial property can only be sold to legal entities and such propertyheld by legal entities cannot be used for residence.

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BUSINESS DEVELOPMENT

Overview

Our Group primarily comprises our Company and our principal operating subsidiary,Guangzhou Fineland Property Consultancy. Our Company was incorporated in the Cayman Islandswith limited liability on 16 February 2017 and became the holding company of our Group as partof the Reorganisation. We are an established real estate agent with our main operators inGuangzhou, the PRC, and we principally provide comprehensive real estate agency services inboth the primary and secondary property markets.

History

The history of our Group can be traced back to March 1997 for the establishment of ourprincipal operating subsidiary, Guangzhou Fineland Property Consultancy (which was known asGuangzhou Fineland Sino Property Consultancy Limited* (廣州方圓中粵物業顧問有限公司) at thetime of incorporation) as a sino-foreign joint venture in the PRC with a registered share capital ofHK$500,000, by (i) GD Fineland Property Development and (ii) Sinoland, which held 60% and40% of equity interest in Guangzhou Fineland Property Consultancy, respectively. At the time ofthe establishment of Guangzhou Fineland Property Consultancy, GD Fineland PropertyDevelopment was held as to 99% and 1% by Mr. Fong and Mr. Han Shuguang (韓曙光),respectively, and Sinoland was wholly-owned by Mr. Liu Yuhong (劉宇宏).

Mr. Fong, one of our Controlling Shareholders and our non-executive Director, began hisinvolvement in the real estate industry in 1993 when he established Guangzhou FinelandEnterprises Company Limited* (廣州方圓企業有限公司) and Guangzhou Fineland Real EstateDevelopment Company Limited* (廣州市方圓房地產發展有限公司). For further details of Mr.Fong’s biography, see ‘‘Directors, Senior Management and Employees — Directors — Non-executive Directors’’. Mr. Fong foresaw great potential in the real estate agency industry and in1997, invited Mr. Liu Yuhong, who Mr. Fong met in Sun Yat-Sen University while receiving histertiary education, to invest into the real estate agency industry by establishing GuangzhouFineland Property Consultancy through their personal savings.

In September 1997, as Mr. Liu Yuhong immigrated from the PRC and shifted in his businessand investment focus, Mr. Liu Yuhong directed Sinoland to transfer all of its equity interest inGuangzhou Fineland Property Consultancy to Peggo International, which ultimate shareholderswere friends of Mr. Liu Yuhong. Peggo International acquired the equity interest in GuangzhouFineland Property Consultancy with the personal savings of its then shareholders. After theaforesaid equity transfer, Guangzhou Fineland Property Consultancy was owned as to 60% and40% by GD Fineland Property Development and Peggo International respectively, and changed toits current name and commenced the provision of real estate agency services.

In March 2001, Ms. Tse, who had then been working with Guangzhou Fineland PropertyConsultancy as a director since April 1997, was confident in the prospects of the real estate agencyindustry and intended to further her engagement with Guangzhou Fineland Property Consultancy.Ms. Tse therefore acquired 30% equity interest in Guangzhou Fineland Property Consultancy fromPeggo International with her personal savings whereas GD Fineland Property Developmentacquired the remaining 10% equity interest in Guangzhou Fineland Property Consultancy then held

HISTORY, REORGANISATION AND CORPORATE STRUCTURE

– 80 –

by Peggo International. After the aforesaid equity transfer, Guangzhou Fineland PropertyConsultancy was owned as to 70% and 30% by GD Fineland Property Development and Ms. Tserespectively.

In August 2006, due to reorganisation of the corporate structure of the companies beneficiallyheld by Mr. Fong, Mr. Fong directed GD Glory Trade (formerly known as GD Fineland PropertyDevelopment) to transfer the 70% equity interest in Guangzhou Fineland Property Consultancy itheld to Stand Smooth. After the aforesaid equity transfer, Guangzhou Fineland PropertyConsultancy was owned as to 70% and 30% by Stand Smooth and Ms. Tse respectively.

In March 2009, as Mr. Fong intended to further reorganise the corporate structure of thecompanies beneficially held by him, Mr. Fong directed Stand Smooth to transfer the 70% equityinterest in Guangzhou Fineland Property Consultancy it held to Luck Health. After the aforesaidequity transfer, Guangzhou Fineland Property Consultancy was owned as to 70% and 30% by LuckHealth and Ms. Tse respectively.

In May 2016, as we intended to expand our business into the referral of property developersto other real estate agents through utilising online or electronic platforms, Guangzhou FinelandProperty Consultancy acquired the entire equity interest in Fang Yuan Bao from Ms. Tse andGuangzhou Lexian Investment, with the financial resources of Guangzhou Fineland PropertyConsultancy accumulated from its business operations. In addition, Guangzhou Fineland PropertyConsultancy established Hai Yuan Bao as the sole shareholder with the financial resources ofGuangzhou Fineland Property Consultancy accumulated from its business operations. As at theLatest Practicable Date, Hai Yuen Bao has not commenced its business operations. Accordingly,Fang Yuan Bao and Hai Yuan Bao became an indirect wholly-owned subsidiary of our Group.

In September 2016, Luck Health and Ms. Tse transferred all their respective 70% and 30%equity interest in Guangzhou Fineland Property Consultancy to Fineland Real Estate Services, ourindirect wholly-owned subsidiary, after which Guangzhou Fineland Property Consultancy becamean indirect wholly-owned subsidiary of our Group.

For further details, please refer to the paragraph headed ‘‘Corporate Development’’ in thissection.

Business Milestones

The following table summarises the significant business developments and milestones of ourGroup’s business:

1997 Guangzhou Fineland Property Consultancy was established in Guangzhou andcommenced providing real estate agency services.

2000 Our Group was awarded as a Top Tier Agency* (廣州市地產中介‘‘一級代理

公司’’).

2011–2013 Our Group was awarded the Most Influential Brand Award* (最具品牌影響力

獎) by Fang.com (搜房網).


– 81 –

2014 Our Group was recognised as the vice-president unit* (副會長單位) of thesecond members’ meeting of the Guangzhou Property Agency Association (廣州市房地產中介協會第二屆會員代表大會).

2015 Our Group was named as a Five-Star Service Association in the GuangzhouProperty Agency Industry* (廣州市房地產中介行業星級服務機構 — (5星)星級服務機構) by the Guangzhou Real Estate Intermediary Association* (廣州

市房地產中介協會).

2016 Our Group was awarded The Innovative Real Estate Agency Company in theSouth China for the year 2016 Award* (2016華南房地產創新經紀企業) byGuangzhou ZhuTianXia Internet Joint Stock Limited Company* (廣州住天下

網絡有限公司).

CORPORATE DEVELOPMENT

Our Company

Our Company was incorporated in the Cayman Islands on 16 February 2017 as an exemptedcompany under the Companies Law in anticipation of the Listing. Upon completion of theReorganisation, our Company became the holding company of our Group which comprises thefollowing subsidiaries and their respective corporate history is set out below. All of oursubsidiaries are private companies.

Fineland Real Estate Services

Fineland Real Estate Services was incorporated in Hong Kong with limited liability on 16June 2016 by Luck Health as its sole shareholder holding its one issued share. On 30 June 2016,pursuant to an equity transfer agreement, Fineland Real Estate Services agreed to acquire 70% and30% of equity interest in Guangzhou Fineland Property Consultancy from Luck Health and Ms.Tse respectively. In consideration of the aforesaid acquisition, on 21 September 2016, six sharesand three shares in Fineland Real Estate Services were allotted and issued to Luck Health and Ms.Tse respectively, credited as fully paid. After the allotment and issue, Fineland Real EstateServices was owned as to 70% and 30% by Luck Health and Ms. Tse respectively. Uponcompletion of the Reorganisation, Fineland Real Estate Services became a wholly-ownedsubsidiary of our Group, further details of which is described in ‘‘— Reorganisation’’ below.

Guangzhou Fineland Property Consultancy

Guangzhou Fineland Property Consultancy, our principal operating subsidiary, wasestablished in Guangzhou as a sino-foreign joint venture enterprise with limited liability by GDFineland Property Development and Sinoland on 17 March 1997. At the time of its establishment,it was known as Guangzhou Fineland Sino Property Consultancy Limited* (廣州方圓中粵物業顧

問有限公司) and its registered share capital was HK$500,000 and contributed by GD FinelandProperty Development and Sinoland as to HK$300,000 and HK$200,000 respectively, which wasfully settled on 17 March 1997. At the time of incorporation, Guangzhou Fineland Property


– 82 –

Consultancy was held as to 60% and 40% by GD Fineland Property Development and Sinolandrespectively. It principally provides real estate consultation, agency, market analysis and marketingservices.

On 8 July 1997, Sinoland entered into an equity transfer agreement with Peggo International,pursuant to which Sinoland agreed to transfer all its 40% equity interest in Guangzhou FinelandProperty Consultancy to Peggo International for a consideration of HK$200,000, which had beenfully settled. After the completion of the equity transfer and obtaining the relevant approvals fromthe respective governmental and regulatory bodies, as at 29 September 1997, Guangzhou FinelandProperty Consultancy was owned as to 60% by GD Fineland Property Development and 40% byPeggo International.

On 9 June 2000, Peggo International entered into an equity transfer agreement with GDFineland Property Development and Ms. Tse, pursuant to which Peggo International agreed totransfer its 10% and 30% equity interest in Guangzhou Fineland Property Consultancy to GDFineland Property Development and Ms. Tse for a consideration of HK$50,000 and HK$150,000,respectively, which had been fully settled. After completion of the equity transfer and obtainingthe relevant approvals from the respective governmental and regulatory bodies, as at 28 March2001, Guangzhou Fineland Property Consultancy was owned as to 70% by GD Fineland PropertyDevelopment and 30% by Ms. Tse.

On 8 March 2004, Guangzhou Fineland Property Consultancy increased its registered capitalfrom HK$500,000 to HK$3,000,000, which was subscribed by GD Fineland Property Developmentand Ms. Tse for HK$1,750,000 and HK$750,000 respectively, which had been fully settled. Therespective shareholding of the shareholders of Guangzhou Fineland Property Consultancy remainedunchanged immediately after the aforesaid capital increase.

On 10 August 2006, GD Glory Trade entered into an equity transfer agreement with StandSmooth pursuant to which GD Glory Trade agreed to transfer all its 70% equity interest inGuangzhou Fineland Property Consultancy to Stand Smooth for a consideration of HK$2,500,000,which had been fully settled. After completion of the equity transfer and obtaining the relevantapprovals from the respective governmental and regulatory bodies, as at 10 October 2006,Guangzhou Fineland Property Consultancy was owned as to 70% by Stand Smooth and 30% byMs. Tse.

On 29 February 2008, Guangzhou Fineland Property Consultancy increased its registeredcapital from HK$3,000,000 to HK$6,000,000, which was subscribed by GD Glory Trade and Ms.Tse for HK$2,100,000 and HK$900,000 respectively, and had been fully settled. The respectiveshareholding of the shareholders of Guangzhou Fineland Property consultancy remained unchangedimmediately after the aforesaid capital increase.

On 22 September 2008, Stand Smooth entered into an equity transfer agreement with LuckHealth, pursuant to which Stand Smooth agreed to transfer all its 70% equity interest inGuangzhou Fineland Property Consultancy to Luck Health for a consideration of HK$4,200,000,which had been fully settled. After the completion of the equity transfer and obtaining the relevantapprovals from the respective governmental and regulatory bodies, as at 2 March 2009, GuangzhouFineland Property Consultancy was owned as to 70% by Luck Health and 30% by Ms. Tse.


– 83 –

On 30 June 2016, Luck Health and Ms. Tse entered into an equity transfer agreement withFineland Real Estate Services, pursuant to which Luck Health and Ms. Tse agreed to transfer alltheir respective 70% and 30% equity interest in Guangzhou Fineland Property Consultancy toFineland Real Estate Services at a consideration of HK$4,200,000 and HK$1,800,000,respectively. In consideration of the aforesaid acquisition, on 21 September 2016, six shares andthree shares in Fineland Real Estate Services were allotted and issued to Luck Health and Ms. Tserespectively, credited as fully paid. After completion of the equity transfer and obtaining therelevant approvals from the respective governmental and regulatory bodies, as at 21 September2016, Guangzhou Fineland Property Consultancy was owned as to 100% by Fineland Real EstateServices and became a wholly foreign-owned enterprise.

Fang Yuan Bao

Fang Yuan Bao was established by Ms. Tse on 17 June 2015 in the PRC and was wholly-owned by Ms. Tse. Upon its establishment, Fang Yuan Bao had a registered capital ofRMB300,000 and commenced its business in providing online property referral and agencyservices in or around November 2015. For further details of the business operations of Fang YuanBao, see ‘‘Business — Integrated Services — Fangyuanbao’’.

On 30 July 2015, Fang Yuan Bao increased its registered capital from RMB300,000 toRMB1,000,000, which was subscribed by Guangzhou Lexian for RMB700,000 and was fullysettled on 20 August 2015. After the aforesaid capital increase, Fang Yaun Bao was owned as to70% and 30% by Guangzhou Lexian and Ms. Tse respectively.

On 24 May 2016, Guangzhou Lexian and Ms. Tse entered into an equity transfer agreement,pursuant to which Guangzhou Lexian and Ms. Tse agreed to transfer all their 70% and 30% equityinterest in Fang Yuan Bao to Guangzhou Fineland Property Consultancy at a consideration ofRMB700,000 and RMB300,000, respectively, which was determined based on the then issuedshare capital of Fang Yuan Bao and was fully settled on 14 June 2016. Since 26 May 2016, afterobtaining the relevant approvals from the respective governmental and regulatory bodies, FangYuan Bao had been a wholly-owned subsidiary of our Group.

Hai Yuan Bao

Hai Yuan Bao was established by Guangzhou Fineland Property Consultancy on 13 May 2016in the PRC and was wholly-owned by Guangzhou Fineland Property Consultancy. Upon itsestablishment, Hai Yuan Bao had a registered capital of RMB300,000, which was fully settled on21 July 2016. As at the Latest Practicable Date, Hai Yuan Bao has not commenced its businessoperations.

As advised by our PRC Legal Advisers, the transfers or subscriptions of equity interests inour subsidiaries as detailed in the paragraph headed ‘‘Corporate Development’’ in this sectionabove were properly and legally completed.


– 84 –

DEED OF CONCERT PARTIES

Since 28 March 2001, being the date when Ms. Tse acquired 30% equity interest inGuangzhou Fineland Property Consultancy from Peggo International, Mr. Fong and Ms. Tse havebeen acting in concert with each other in exercising and implementing the management andoperations of our subsidiaries. As we were a group of private entities in the past, thesearrangements were not formalised in writing and each of Mr. Fong and Ms. Tse was content withsuch arrangements based on their long term business relationship, as well as the trust andconfidence they have in each other. In preparation of the Listing, Mr. Fong and Ms. Tse executedthe Deed of Concert Parties on 31 March 2017, details of which are set out in ‘‘Relationship withControlling Shareholders — Our Controlling Shareholders’’.

PRE-IPO INVESTMENTS

Overview

On 1 March 2017, Mansion Green (as vendor), and the Pre-IPO Investors (as purchasers),entered into the Pre-IPO Investment Agreements, pursuant to which Mansion Green agreed to sell,and the Pre-IPO Investors agreed to acquire Shares in our Company, representing in aggregateapproximately 28% of the then total issued share capital of our Company, for an aggregateconsideration of HK$42,000,000. Each of the Pre-IPO Investors financed the Pre-IPO Investmentswith his or her personal resources, and none of the Pre-IPO Investors acquired the Sharesaccording to the instructions of the Group or its connected persons.


– 85 –

Information regarding the pre-IPO Investors

Name of Pre-IPO InvestorsPlace of

Incorporation Business nature

Direct shareholderand ultimate

beneficial owner

Relationship between theFineland Group/the Group and the

ultimate beneficial owner

Metropolitan Dawn BVI Investment holding Ms. Rong director of Fineland Real Estate and

executive Director of our Group

Totoro BVI Investment holding Mr. Yi executive Director of our Group

Kaffir Holding Limited BVI Investment holding Mr. Xu Jun

(徐珺先生)

employee of the Fineland Group

Kingson Pine Holdings Limited BVI Investment holding Mr. Zhou Song

(周松先生)


Moxie Holding Limited BVI Investment holding Mr. Luo Xiaoyong

(羅小勇先生)


Kingson Orient Holdings Limited BVI Investment holding Mr. Lin Tingfang

(林庭芳先生)


Beaming Light Holdings Limited BVI Investment holding Mr. Chen Xi

(陳曦先生)


Meanvalue Holding Limited BVI Investment holding Mr. Xie Junhua

(謝均華先生)


Prudent Vision Holdings Limited BVI Investment holding Ms. Zhang Lili

(張莉麗女士)

employee of our Group

Curassow Holding Limited BVI Investment holding Mr. Xu Peng

(徐鵬先生)

senior management of our Group

Refined Standard Holdings Limited BVI Investment holding Ms. Xu Feng

(徐奉女士)


Akari International Holdings Limited BVI Investment holding Ms. Zhu Xiaoming

(朱曉明女士)


Thriving International Holdings

Limited

BVI Investment holding Mr. Deng Haozhi

(鄧浩志先生)


Tiffany Orient Holdings Limited BVI Investment holding Ms. Xie Dan

(謝丹女士)


Adwan Orient Holdings Limited BVI Investment holding Mr. Han Shuguang

(韓曙光先生)

director of Fineland Real Estate and a

director of an operating subsidiary

of our Group


– 86 –

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– 87 –

Notes:

(1)

Calcu

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dividing

thetotalco

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stors.


– 88 –

Sole Sponsor’s Confirmation

The Sole Sponsor is of the view that the Pre-IPO investments mentioned above complies withthe requirements set out in the Guidance Letters HKEx-GL29–12 and HKEx-GL43–12, to theextent applicable based on the review of the relevant documents.

REORGANISATION

The following chart sets out the shareholding and corporate structure of our Groupimmediately before the Reorganisation:

100%

100%

100%

70% 30%

100% 100%

100%

100%

100%

Stand Smooth

Hero Dragon

Fineland Real Estate

WidethriveInvestment

Fang Yuan Bao Hai Yuan Bao

Luck Health

Guangzhou Fineland Property Consultancy

Fineland Real Estate Services

Ms. Tse

Off-shore

On-shore

Mr. Fong


– 89 –

In preparation for the Listing, we have carried out the Reorganisation which involved thefollowing steps:

(A) Incorporation of our Company and Fineland Holdings

Our Company was incorporated in the Cayman Islands on 16 February 2017 with anauthorised share capital of HK$380,000 divided into 38,000,000 Shares of HK$0.01 each.One nil-paid Share was allotted and issued to the subscriber to the Memorandum andArticles, which was transferred to Mansion Green on the same date.

Fineland Holdings was incorporated in the BVI on 16 February 2017 with an authorisedshare capital of US$50,000 divided into 50,000 shares of US$1.00 each. On the same date,one share in Fineland Holdings was allotted and issued to our Company at par, pursuant towhich Fineland Holdings became a direct wholly-owned subsidiary of our Company.

(B) Acquisition of Fineland Real Estate Services by our Group

On 1 March 2017, Mr. Fong, Luck Health, Ms. Tse, Fineland Holdings, Mansion Greenand our Company entered into a share swap agreement, pursuant to which Fineland Holdingsacquired the entire issued share capital of Fineland Real Estate Services and as consideration,as directed by Luck Health and Ms. Tse, (i) 199 shares in Fineland Holdings were allottedand issued to our Company, credited as fully paid; (ii) one nil-paid Share held by MansionGreen was credited as fully paid and 199 Shares were allotted and issued to Mansion Green,credited as fully paid; and (iii) 63 shares and 27 shares in Mansion Green were allotted andissued to Stand Smooth and Aspiring Vision, credited as fully-paid, respectively. Uponcompletion of the aforesaid acquisition, Fineland Real Estate Services became an indirectwholly-owned subsidiary of our Company and our Company was owned as to 100% byMansion Green. The consideration in the form of Shares was determined with reference to thethen shareholding of Luck Health and Ms. Tse in Fineland Real Estate Services.

(C) Acquisition of approximately 28% of Shares in our Company by the Pre-IPOInvestors

On 1 March 2017, Mansion Green (as vendor) and the Pre-IPO Investors (as purchaser)entered into the Pre-IPO Investment Agreements, pursuant to which Mansion Green agreed tosell, and the Pre-IPO Investors agreed to acquire, approximately an aggregate of 28% ofequity interest in our Company at an aggregate consideration of HK$42,000,000. Theconsideration was determined with reference to the net asset value of Fineland Real EstateServices as at 31 December 2016 and was fully settled on 2 March 2017. After completion ofthe Pre-IPO Investments, our Company was owned as to approximately 28% by the Pre-IPOInvestors and approximately 72% by Mansion Green.


– 90 –

The following chart sets out the shareholding and corporate structure of our Groupimmediately after the Reorganisation but before the Share Offer:

100%

100%

100%

70%

100%

30%

100% 100%

100%

100%

100%

72% 28%

100%

Mr. Fong

Ms. Tse


Stand Smooth

Guangzhou Fineland

Property Consultancy

Our Company

Fineland Holdings

The Pre-IPO Investors

Aspiring Vision

Off-shore

On-shore

Fineland Real

Estate Services

Mansion Green

Hero Dragon



CAPITALISATION ISSUE AND SHARE OFFER

Our Company will issue certain new Shares under the Share Offer, and certain new Shares tothe existing Shareholders pursuant to the Capitalisation Issue, resulting in not less than 25% of theenlarged issued share capital of our Company being offered under the Share Offer and theremaining 75% held by Mansion Green and the Pre-IPO Investors.


– 91 –

The following chart sets out the shareholding and corporate structure of our Groupimmediately after completion of the Capitalisation Issue and the Share Offer (without taking intoaccount any Shares to be issued upon the exercise of the options that have been or may be grantedunder the Share Option Scheme):

70% 30%

100% 100%

100%

100%

100%

21%54% 25%

100%

100%

100%

100%

100%


Guangzhou Fineland

Property Consultancy

Our Company

Fineland Holdings

The Pre-IPO Investors (Note)

Off-shore

On-shore

Fineland Real

Estate Services

Mansion Green Public

Mr. Fong

Ms. Tse

Stand Smooth Aspiring Vision

Hero Dragon



Note: The relevant Shares held by the Pre-IPO Investors (excluding Metropolitan Dawn, Totoro and Adwan Orient

Holdings Limited), being approximately 11.625% of the entire issued share capital of our Company, will be

counted as part of the public float under Rule 11.23 of the GEM Listing Rules.

COMPLIANCE WITH PRC LAWS

Our PRC Legal Advisers have confirmed that all relevant approvals and permits in respect ofthe equity transfers of our PRC operating subsidiary as described above have been obtained andthe procedures and steps involved are in compliance with relevant laws and regulations in thePRC.


– 92 –

THE M&A RULES

The PRC Legal Adviser has advised that Guangzhou Fineland Property Consultancy wasestablished before the effective date of the Provisions on Merger and Acquisition of DomesticEnterprises by Foreign Investors (關於外國投資者併購境內企業的規定) (the ‘‘M&A Rules’’) andhas been a sino-foreign joint venture enterprise or a wholly foreign-owned enterprise since then.Accordingly, the M&A Rules are not applicable to the Reorganisation and the Listing is notsubject to the approval from the China Securities Regulatory Commission (中國證券監督管理委員

會).

According to SAFE Circular No. 37 and SAFE Circular No.13, before a domestic residentcontributes its legally owned onshore or offshore assets and equity into an overseas specialpurpose vehicle, the domestic resident shall apply for foreign exchange registration for offshoreinvestment with a qualified bank. The PRC Legal Adviser confirmed that all the necessary foreignexchange registration with local foreign exchange authority under SAFE Circular No. 37 have beencompleted.


– 93 –

OVERVIEW

We are an established real estate agent in Guangzhou. We offer services covering differentstages of the life cycle of a property development project, from the planning phase, to promotionand sales, to after-sales services. We provide our property intermediary services through threemain business segments, namely (i) property research and consultancy services, (ii) comprehensivereal estate agency services in the primary and secondary property market, and (iii) integratedbusiness services.

. Our property research and consultancy services generally include macroeconomic analysis ofthe market, analysis on investment return, market environment analysis, studies on projectconditions, development and positioning, formulating planning and development strategies ofthe project, recommendations on construction and mix of properties, and recommendations onsales and marketing strategies.

. Our real estate agency services include the provision of property market information andagency services to our customers.

o For primary market agency services, we facilitate sales of properties in propertydevelopment projects by property developers to potential purchasers, and receive acommission directly from the property developer based on the successful completion ofsales.

o For secondary market agency services, we provide services to owners looking to sell orlease their properties and to potential buyers or tenants looking to buy or rent propertiesin Guangzhou, and receive a commission from the owner and/or the buyer or tenantbased on the purchase price or the rent.

. Our Integrated Services include Fangyuanbao, Zhaoshangyi and One-stop Service Centre.These services aim to add value to our customers, including property developers, individualcustomers, and companies.

o Our Fangyuanbao platform serves as a referral business and online platform for propertydevelopers to reach out to a greater number of real estate agents without the individualagents directly entering into business relationships with the property developer.

o Our Zhaoshangyi business focuses on the leasing of commercial units in primary marketdevelopment projects.

o Our One-stop Service Centre business offers a range of value-added services such astenancy rent collection services, property repair and maintenance services, and designand furnishing services, as well as assisting purchasers to obtain ownership certificatesand apply for mortgages from banks.

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We acquired our Fangyuanbao services in 2016. For 2015, 2016, and the four months ended30 April 2017, we provided (i) property research and consultancy services for 17, 28, and 11projects, respectively, (ii) primary market real estate agency services for 35, 51, and 41 projects,respectively, and (iii) Fangyuanbao services for nil, 19, and 9 projects, respectively.

We provide our services to our customers with a focus on Guangzhou, as well as elsewherein the Pearl River Delta. According to the DTZ C&W Report, real estate business is fragmented inGuangzhou, with 485 real estate agencies in Guangzhou by the end of March 2016 and all but twoof the top 10 agencies, including us, having a less than 4% share of the primary residential market.However, among the 485 real estate agencies, only 185 have outlets and conduct secondary marketreal estate agency services, among which, only 16 including our Group have more than 10 outletsin the market. Our customers generally include property developers, property owners, propertybuyers, and tenants. Most of the customers are located in Guangzhou and elsewhere in the PearlRiver Delta. We have maintained stable relationships with property developers, which may engageus for all three categories of our services.

From 2015 to 2016, our revenue increased by RMB16.3 million, or 18.1%, from RMB90.1million to RMB106.3 million, respectively. From 2015 to 2016, our net profit increased byRMB2.4 million, or 18.9%, from RMB12.9 million to RMB15.3 million, respectively. Our netprofit margin remained stable at 14.3% for 2015 and 14.4% for 2016. Our revenue increased by29.0% from RMB33.5 million for the four months ended 30 April 2016 to RMB43.3 million forthe four months ended 30 April 2017, with real estate agency services contributing 89.2% of ourrevenue for the four months ended 30 April 2017. Our net profit decreased by RMB7.7 million, or109.7%, from RMB7.0 million to a net loss of RMB0.7 million over the same period. Excludingthe non-recurring listing expenses, we would have recorded a net profit of RMB7.5 million for thefour months ended 30 April 2017.

OUR COMPETITIVE STRENGTHS

Our Directors believe that the following competitive strengths have contributed to our successand enabled us to compete effectively in the property intermediary services industry in the PRC:

Broad range of services, catering to different types of customers across different stages of thereal estate development and investment chain

We are engaged in, and have accumulated expertise in, three main lines of business: (i)property research and consultancy; (ii) real estate agency services; and (iii) Integrated Services.With these three business lines, we are able to provide our customers with a one-stop shop ofcomprehensive service covering their needs from the development planning stage of a real estateproject, to real estate agency services when the project is completed, as well as Integrated Servicessuch as offering an online platform allowing other agencies to participate in the sales of propertydevelopment projects, assisting customers to obtain relevant property certificates, and procuringbusinesses to lease commercial space in real estate projects. We believe that the broad range of ourservices cater to different types of customers across different stages of the real estate developmentand investment chain, avoiding the need for our customers to retain separate providers for theseservices. Our Directors believe that this helps us to maintain our competitiveness over other realestate agents in Guangzhou, as only a limited number of real estate agents provide similar services.

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Real estate agent with in-house expertise to provide property research and consultancyservices

Our Group is an established real estate agent in Guangzhou, being in operation since 1997and one of the top 16 established real estate agencies among 185 which have 10 or more outletsoperating in Guangzhou. We have the expertise in-house to provide property research andconsultancy services, including advice in relation to real estate investment strategy and thepreparation of feasibility analyses for property development projects. Our Directors believe thatthe additional services we are able to provide with our in-house expertise have enabled us tocapture added business opportunities in the primary property market in Guangzhou, in the area ofconsultancy services and beyond. We may be directly engaged by the property developers toprovide primary market real estate agency services after providing them with property research andconsultancy services. During the Track Record Period, we were appointed the primary real estateagents for the sale of units at 53 developments on which we (i) had earlier provided propertyresearch and consultancy services, or (ii) provide property research and consultancy services as anancillary service to property developers, accounting for approximately 41.4% of the total realestate projects we handled during the Track Record Period. We expect that this relationship willcontinue, with our property research and consultancy services deepening our relationships withdevelopers, raising our profile, and positioning us well to capture business opportunities in thefuture.

Well-recognised brand name in the real estate agency industry

We are a reputable property consultancy and agency company in Guangzhou, benefitting fromthe recognition of the ‘‘Fineland’’ brand as a result of our relationship with the Fineland Group.The recognition of the ‘‘Fineland Asset Management’’ brand is further enhanced by our focus inGuangzhou since our establishment in 1997, evidenced by the awards received by our Group suchas an Agency with Business Integrity in 2013, 2014 and 2016 by Guangzhou Daily. During theTrack Record Period, we were also recognised as an AAA Grade enterprise in the EnterpriseCredit Evaluation by the China Association of Small and Medium Enterprise, as a five-star serviceprovider by the Guangzhou Association of Real Estate Agency, as a Cornerstone Real Estate Brandof Guangdong Province by the Guangdong Real Estate Chamber of Commerce, as the MostValuable Real Estate Agency by fang.58.com, and as an Innovative Real Estate Agency in SouthChina by the Guangzhou ZhuTianXia Internet Joint Stock Limited Company* (廣州住天下網絡有

限公司). We believe these recognitions demonstrate our commitment and efforts in the real estateagency business, which will continue to be a main factor driving our future success. With ourcommitment and drive, and the recognition we have gained in the industry, we believe we arewell-positioned to leverage our strength in the real estate agency industry to capture future growth.

Experienced management and sales team with expertise in the PRC property market

Our management and sales team has extensive experience in, and in-depth knowledge of, thePRC property market. Ms. Rong, our chief executive officer and executive Director, has more than18 years of experience working in PRC property-related businesses. Ms. Rong has risen throughthe ranks of the Fineland Group, gaining on-the-ground experience in a number of business areas.She began her career in the sales and marketing department of the Fineland Group in 1999 andprogressed through a variety of other departments of the Fineland Group before joining our Board

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in 2014. In 2016, she became our chief executive officer and executive Director. In this position,Ms. Rong has been able to apply the knowledge and insight gained throughout her tenure with theFineland Group, which we believe will be invaluable to the further development of our business.Ms. Rong has already been instrumental in developing and driving our business strategies and inidentifying growth opportunities in Guangzhou and in the Pearl River Delta area. Other than Ms.Rong, Mr. Xu Peng and Mr. Deng Haozhi of our senior management team also had experience inthe property development industry, and therefore can contribute to the development of our businessleveraging on their past experience.

In addition to Ms. Rong, some of our Directors also have extensive experience in the realestate agency services business, with Mr. Fong and Ms. Tse being involved in the real estateagency services business since the establishment of our Group. Members of our management teamgenerally have over 15 years of work experience in real estate-related industries, and, togetherwith Ms. Rong, they have led, and will continue to lead, the development of our business. Severalhave been with our Group for significant lengths of time, deepening their relationship with ourGroup and providing management stability. For example, each of Ms. Zhu Xiaoming and Mr. DengHaozhi have been with our Group for over five years. We also have an experienced and stablesales team which contributes to our business development. More than 48 members of our salesteam have been employed by us for more than five years. These sales team members haveaccumulated extensive knowledge and experience of the real estate agency services businessthrough their tenure with our Group, which enables them to better understand and implement ourbusiness strategies. We believe that our Directors, management and sales team will continue toeffectively implement our business strategies, to maintain our competitiveness over other realestate agencies, and enable us to achieve our goals.

OUR BUSINESS STRATEGIES

We aim to continue to grow our business, with the goal of becoming a leading real estateagent in the Pearl River Delta. We plan to implement the following strategies to achieve our goal:

Expand our secondary market real estate agency services by opening more outlets andemploying more sales staff in Guangzhou

According to the DTZ C&W Report, the proportion of real estate sales in the secondarymarket in terms of GFA has grown from 39% in 2012 to 44% in 2016. This trend is likely due tothe decreasing supply of urban land supply which results in a decreasing supply of new propertyunits. We expect that the proportion of real estate sales in the secondary market will continue toincrease in relation to sales in the primary market. We also expect that the commission rate inrespect of sales in the secondary market will continue to generally exceed that in the primarymarket. To capture the potential growth in sales of secondary properties and to capitalise on thehigher commission rate available for secondary sales, we plan to open more outlets in districts inGuangzhou where new and prestigious residential properties with facilities and supportinginfrastructure are located and to employ more licensed agents to provide secondary market realestate agency services. We expect that approximately RMB26 million will be required toimplement this strategy, which will be funded by part of the net proceeds from the Share Offer andinternal resources. For more details on the implementation plan, see ‘‘Future Plans and Use ofProceeds — Implementation Plans’’.

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The Company expects an increase in staff cost and rental payments due to the anticipatedopening of new outlets and employment of additional employees. For existing outlets that wereopened during the Track Record Period, the historical breakeven period ranged betweenapproximately one to four months and the investment payback period ranged betweenapproximately three to six months.

As at the Latest Practicable Date, we had 39 outlets and 173 qualified agents in Guangzhou.Up to 31 December 2019, we aim to open an additional 77 to 117 outlets in Guangzhou, andemploy 538 to 818 additional employees for these outlets.

Continue to expand our primary market real estate agency services by enhancing ourrelationship with property developers

For 2015, 2016, and the four months ended 30 April 2017, 73.8%, 66.6% and 65.2% of ourrevenue were generated from the provision of primary market real estate agency services,respectively. We typically assist property developers in selling properties in their newly developedprojects to potential buyers, and the property developers pay us commission based on thesuccessful completion of sales. While the proportion of real estate sales in the secondary marketshas grown in the recent years and is expected to continue to increase, we still expect our primarymarket real estate agency services to continue to contribute towards a large proportion of ourrevenue. To continue to expand our primary market real estate agency services, we plan toleverage on our experience in providing primary market real estate agency services and enhanceour relationship with property developers other than the Fineland Group, in particular by (i)liaising with property developers which we had provided primary market real estate agencyservices before seeking further opportunities to provide the same services for their new projects,and (ii) enhancing our marketing efforts in promoting our capabilities and experiences in particularregions where we had provided primary market real estate agency services to other propertydevelopers, and to actively seek to be engaged to provide the same services in new projects in thesame region by other property developers. We also plan to enhance our efforts in our marketresearch in order to be able to prepare tender proposals which are more competitive than ourcompetitors. On 11 January 2017, we entered into a strategic cooperation agreement with acompany which operates a leading nation-wide online platform for property transactions in thePRC. Pursuant to the agreement, each of the parties would introduce property developers to theother party and receive a split of the commission if the other party concluded property transactionswith the customers introduced by it. Our Directors believe that the strategic cooperation agreementwill provide our Group with more business opportunities with property developers, which in turnincreases the chance of our Group being engaged to provide primary market real estate agencyservices.

Further enhance our Group’s brand recognition

Since the establishment of our Group, we had been providing property agency services to theFineland Group. To enhance the brand recognition of ‘‘Fineland Asset Management’’, we havelowered the proportion of services provided to the Fineland Group from 58.3% of our total revenuein 2015 to 42.0% of our total revenue in 2016, and it fluctuated to 51.4% of our total revenue inthe four months ended 30 April 2017 and 41.7% of our total revenue in the eight months ended 31August 2017 based on unaudited financial information of our Group. We intend to further lower

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this proportion in the future. We have also enhanced, and intend to continue to enhance, our brandname in Guangzhou through advertising and promotion in a number of ways, including internetadvertisements (on portal websites or online property trading platforms), setting up our ownwebsite and WeChat public accounts, and participating in press conferences relating to the realestate projects handled by our Group. Many of these efforts will emphasise the services weprovide independently of the Fineland Group. We also intend to continue to improve our marketingefforts in promoting properties by delivering brochures to potential property buyers, which weexpect will further serve to dispel any perception that our services are provided only in respect ofproperties developed by the Fineland Group. We expect to focus on geographical areas where wehad provided agency services for development projects, as we will then be able to leverage ourexpertise in the area as well as the database of potential purchasers from prior transactions or withinterest in the area previously gathered.

Expand our Integrated Services business segment, in particular our Zhaoshangyi (招商易)and One-stop Service Centre offering

Our Integrated Services segment includes Fangyuanbao, by which we provide an onlineplatform expanding the number of agents working to sell a property; One-stop Service Centre, bywhich we provide various property-related services to individual property buyers, such asassistance with obtaining ownership certificates and bank mortgages, as well as value-addedservices, such as designing and fitting out properties with furniture and appliances, collectingrental payment on behalf of customers, and arranging for the cleaning and maintenance ofproperties purchased by customers for investment purposes; and Zhaoshangyi, by which weprocure tenants for commercial spaces in property developments.

We launched our Zhaoshangyi business in 2015 and expanded our One-stop Service Centrebusiness in January 2017. We intend to expand our Zhaoshangyi by performing in-depth marketanalysis for, and enhancing the discussion with, our customers to better understand their needs andfocus our marketing efforts on procuring potential tenants which are most likely to be interested inleasing the properties. We intend to further develop our One-stop Service Centre business byfocusing our marketing efforts, such as participating in press conferences, and advertising on thirdparty websites and on our WeChat public account, and on customers who purchase properties forinvestment purposes and providing them with one-stop services which aim to save their time andeffort in managing the properties.

During the Track Record Period, the revenue generated from our Zhaoshangyi business wasRMB0.8 million for 2015, RMB0.7 million for 2016, and RMB0.9 million for the four monthsended 30 April 2017, representing 0.9%, 0.7%, and 2.1% of our total revenue for these periods,respectively, and the revenue generated from our One-Stop Service Centre business was RMB0.5million, RMB1.2 million, and RMB75,000, respectively. According to the DTZ C&W Report, thecapability of our Group to provide a wide range of services can cater to the need for our customersto refrain from retaining separate service providers for these services. We expect that demand willcontinue to increase as developers prefer to find commercial tenants early in the developmentprocess in order to make the commercial units easier to sell and the development more attractiveoverall.

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OUR BUSINESS MODEL

Government

Property developers

Property research

and consultancy

Primary market

real estate

agency services

Integrated Services

Secondary market

real estate

agency services

Integrated Services

Property developers/

potential buyers/tenants

Property owners/

potential buyers/tenants

Stakeholders

of the property

market

Our customers

Services provided

Property

developerCustomer

Primary

Property

Secondary

Property

Customer

We offer services covering different stages of the life cycle of a property developmentproject, from the planning phase, to promotion and sales, to after-sales services. We provide ourproperty intermediary services through three main business segments, namely (i) property researchand consultancy services, (ii) comprehensive real estate agency services in the primary andsecondary property market, and (iii) integrated business services. We are mainly focused onGuangzhou and elsewhere in the Pearl River Delta. During the Track Record Period, we had alsooperated in Sanya, Hainan for primary market real estate agency services.

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The following table sets out a breakdown of our projects from independent customers andconnected customers by our three business segments during the Track Record Period:

Number of projects(1)

2015 2016

For the

four months

ended 30 April

2017

Property research and consultancy

Independent customers 12 5 0

Connected customers 5 23 15

Sub-total 17 28 15

Real estate agency services

Primary real estate agency services

Independent customers 25 40 33

Connected customers 10 11 9

Sub-total 35 51 42

Secondary real estate agency services(2) n/a n/a n/a

Integrated Services

Fangyuanbao (房緣寶)(3)

Independent customers n/a 15 7

Connected customers n/a 4 2

Sub-total n/a 19 9

Zhaoshangyi (招商易)(2) n/a n/a n/a

One-stop Service Centre

(一站式服務中心)(2) n/a n/a n/a

Notes:

(1) The number of projects for a given period represents projects that were in effect during that period.

(2) Our secondary real estate agency, Zhaoshangyi, and One-stop Service Centre services are provided to many

different customers and such services are generally not provided on a development project basis.

(3) We acquired our Fangyuanbao services in 2016. Therefore, no projects were in effect in 2015. For details of

the acquisition of our Fangyuanbao services, see ‘‘History, Reorganisation and Corporate Structure —

Corporate Development — Fang Yuan Bao’’.

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The following table sets out a breakdown of our revenue from our independent customers andconnected customers by our three business segments during the Track Record Period:

For the year ended 31 DecemberFor the four months

ended 30 April

2015 2016 2017

RMB’000% of



revenue


Independent customers 1,986 2.2 2,665 2.5 318 0.7

Connected customers 1,147 1.3 528 0.5 nil nil

Sub-total 3,133 3.5 3,193 3.0 318 0.7


Primary real estate agency services

Independent customers 15,280 17.0 29,723 28.0 6,421 14.8

Connected customers 51,205 56.9 41,099 38.6 21,792 50.4

Sub-total 66,485 73.9 70,822 66.6 28,213 65.2

Secondary real estate agency services 19,121 21.2 22,977 21.6 10,400 24.0

Sub-total 85,606 95.1 93,799 88.2 38,613 89.2

Integrated Services

Fangyuanbao (房緣寶)(1)

Independent customers n/a n/a 4,549 4.3 2,897 6.7

Connected customers n/a n/a 2,892 2.7 467 1.1

Sub-total n/a n/a 7,441 7.0 3,364 7.8

Zhaoshangyi (招商易)

Independent customers 827 0.9 634 0.6 75 0.2

Connected customers nil nil 97 0.1 nil nil

Sub-total 827 0.9 731 0.7 75 0.2

One-stop Service Centre (一站式服務中心)

Independent customers 379 0.4 1,165 1.1 901 2.1

Connected customers 114 0.1 16 nil nil nil

Sub-total 493 0.5 1,181 1.1 901 2.1

Sub-total 1,320 1.4 9,353 8.8 4,340 10.1

Total revenue of the Group 90,059 100 106,345 100 43,271 100

Note:

(1) We acquired our Fangyuanbao services in 2016. Therefore, no revenue was recorded in 2015. For details of

the acquisition of our Fangyuanbao services, see ‘‘History, Reorganisation and Corporate Structure —

Corporate Development — Fang Yuan Bao’’.

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The following table sets out a breakdown of commission received for real estate sales andleasing transactions for our real estate agency services during the Track Record Period:

For the year ended

31 December

For the four months ended

30 April

2015 2016 2016 2017

RMB’000 % RMB’000 % RMB’000 % RMB’000 %

(unaudited)

Commission from sale of properties 79,287 92.6 86,967 92.7 30,906 94.0 35,922 93.0

Commission from leasing of

properties 6,319 7.4 6,832 7.3 1,970 6.0 2,691 7.0

Total revenue from real estate

agency services 85,606 100 93,799 100 32,876 100 38,613 100


We provide property research and consultancy services for the primary property market witha focus on Guangzhou, as well as elsewhere in the Pearl River Delta. Property consultancyservices generally include macroeconomic analysis of the market, analysis on investment return,market environment analysis, studies on project conditions, development and positioning,formulating planning and development strategies of the project, recommendations on constructionand mix of properties, and recommendations on sales and marketing strategies.

Our property research and consultancy services are mainly provided to property developersand divided into three categories, generally based on the natural progression of a propertydevelopment project: (i) early stage feasibility analysis; (ii) property development consultancy;and, to a lesser extent, (iii) sales and marketing planning.

We are typically engaged directly by property developers for our property research andconsultancy services and we charge a fixed fee in exchange for these services based on theprojects. The fees are generally determined based on factors including the scope of work and thescale and the expected time span of the project. In 2015, 2016, and the four months ended 30 April2017, we were engaged to provide property research and consultancy services for 17, 28, and 15projects, respectively. For these periods, our property research and consultancy services generatedrevenue of RMB3.1 million, RMB3.2 million, and RMB0.3 million, respectively. As at the LatestPracticable Date, we have 3 on-going property research and consultancy projects.

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Details of our services provided within this business segment are as follows:

Early-stage feasibility analysis

Preparation of

tender proposal

by our Company

Direct contact

by property

developer

Engagement

by

property

developer

Project

and

market

research

Delivery

of

report

We offer feasibility analysis services to property developers which are considering whether toprepare a tender proposal.

Once a specific site has been identified, we typically work with the property developers toprepare a feasibility analysis of the project that takes into account their specific requirements andeconomic considerations. We generally analyse the supply and demand of real estate properties inthe same area for the past three to five years, project the sales of properties within the area andcalculate the expected margin based on the potential cost and selling price of the properties to bebuilt. Our project analysis report provides the property developer with an assessment of theopportunities and risks associated with the potential development project, as well asrecommendations on market positioning and the optimal combination of units, such as apartments,houses and retail outlets, as well as pricing strategy.

We also provide trend analysis of the local property markets, including the consumerconsumption patterns of local residents.

We are able to offer these research capabilities based on our database and first-handknowledge of the property market, as well as the extensive experience of our research and projectsteams.

Property development consultancy

Property developer

planning real

estate project

Engagement

by property

developer

Market research

and

analysis

Recommendations

made to

property developers

For property developers planning a real estate project, such as a residential complex or amixed-use development, we provide comprehensive consultancy services, which includeconducting market research and data analysis, recommending market positioning, and providingsuggestions for the overall design of the project and its supporting facilities such as therecommended proportions of different types of residential properties in a residential complex, orthe recommended mix and proportions of residential and commercial properties for a mixed-usedevelopment. Based on our analysis of macroeconomic data and our access to the latest

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information on the property market, as well as factors specific to each project, we makerecommendations as to the appropriate sales and marketing initiatives, including pricing analysisand strategy, and provide consultant reports tailored to each property developer’s specifications.

We are also able to advise on property management requirements and provide propertymanagement service recommendations. Moreover, we provide ideas and themes for each project,produce comprehensive marketing plans tailored to different property developers’ requirements,and assist in the selection of design and promotion companies and subcontractors. Finally, wemake recommendations to our customers about the implementation of advertising plans, with anaim to optimise the effectiveness of promotional campaigns.

Sales and marketing planning

We generally provide sales and marketing planning recommendations to property developerswhich engage us to provide primary market real estate agency services. We will generally includethese services as part of the sales agency agreement signed with a property developer and will notcharge a separate fee for this service.

We may, to a lesser extent, also offer services that relate to sales and marketing planning of aproject only, such as the overall sales execution plan, to property developer which has not engagedus to provide agency services.


We provide comprehensive real estate agency services in both the primary and secondaryproperty markets, with a focus on Guangzhou, as well as a presence elsewhere in the Pearl RiverDelta and Hainan. Real estate agency services include the provision of property marketinformation and agency services to clients. We categorise our real estate agency services intothose for the primary market, which we define as arrangements under which we will receivecommission directly from a property developer, and those for the secondary market, which wedefine as situations where we receive commission from a third party (typically another propertyagency, an individual seller or an individual purchaser).

Details of our services provided within this business segment are as follows:

Primary market real estate agency services

Preparation of

tender proposal

by our Company

Direct contact

by property

developer

Engagement

by

property

developer

Site visit and

formulation of

sales and

marketing

strategies

On-site

sales and

promotion

of properties

Entering into

of agency

agreement

Property

developer pays

commission

to our Group

Customers

purchase

primary

properties

from property

developer

We are engaged in the provision of real estate agency services for the primary market, with afocus on residential and mixed-use developments. In 2015, 2016, and the four months ended 30April 2017, we were engaged for the provision of real estate agency services for 35, 51, and 42projects, respectively, including projects sold in different phases and also single buildings.

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To win a mandate to provide real estate agency services for a project, we are either engageddirectly by property developers or we submit tenders to the property developer for the project.

The following table sets out the breakdown of projects handled by our Group by region andrevenue generated by region:

Region 2015 2016

Four months ended

30 April 2017

Number of

projects(1)Revenue

RMB’000

Number of

projects(1)Revenue

RMB’000

Number of

projects(1)Revenue

RMB’000

Guangzhou 23 49,144 26 54,801 20 19,676

Elsewhere in Pearl River Delta 11 10,885 24 9,380 21 6,901

Other 1 6,456 1 6,641 1 1,635

Total 35 66,485 51 70,822 42 28,213

Note:


The following table sets out a breakdown of the number of projects and our revenue byproperty type for our primary market real estate agency services during the Track Record Period:

2015 2016

Four months ended

30 April 2017

Number of

projects(1) RMB’000

Number of


Number of


Primary market real estate

agency services

Property type — residential and

mixed-use 33 66,071 48 64,735 41 28,213

Property type — commercial 2 414 3 6,087 1 nil

Sub-total 35 66,485 51 70,822 42 28,213

Note:


A property developer may engage us directly if we have provided property research andconsultancy services to it for the project. We may also be engaged by property developers withwhich we have worked before. During the Track Record Period, we were able to renew about one-third of our real estate agency agreements with property developers upon expiry.

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For tender offers, if a property developer is interested in engaging us as the real estateagency for a certain project, it will provide us with specifications and data in relation to thedevelopment. After reviewing the relevant data and visiting the site, we will prepare a marketingand sales plan for the property developer and agree on our commission rates for the project. If thisis approved by both parties, an agency agreement will be signed and we will execute the marketingand sales plan.

If we are engaged by a property developer, an agreement will be signed with the developer.These agreements may stipulate an exclusive or non-exclusive agency engagement, and may be fora specific period or for the lifetime of the project. A separate agreement may be signed if theproperty developer would like to make use of our Fangyuanbao platform. For details of ourFangyuanbao platform, see ‘‘— Integrated Services — Fangyuanbao (房緣寶)’’ below.

During the Track Record Period, more than a third of our engagements to provide real estateagency services for the primary market were exclusive. See ‘‘— Our Customers’’ below for keyterms and arrangements under our agency agreements.

Depending on the requirements of the property developer, we will station a team of salespersonnel on-site to assist potential purchasers and to follow up on these potential buyers. We arealso able to capitalise on our database of potential purchasers gathered from prior transactions forthe marketing of new primary development projects.

Property developers pay us commission for primary market transactions based on thesuccessful completion of sales. The commission rates, which are normally based on a fixedpercentage or a progressive scale percentage, are determined after an arm’s-length negotiationbetween us and the respective property developer for each project. Factors taken into considerationin determining the commission rate include (i) the scale and location of the project and (ii) the sizeof the sales team required to be stationed on-site. In the primary market, commission rates aregenerally higher for projects that are harder to sell, and larger projects tend to be easier to sell asthe developer often has a larger budget for sales and promotion. For 2015, 2016, and the fourmonths ended 30 April 2017, the average commission rates charged by our Group wereapproximately 1.0%, 1.1%, and 1.0% of the property price, respectively.

In 2015 and 2016, revenue generated from commissions for primary market transactions wasRMB66.5 million and RMB70.8 million, respectively, which accounted for 73.8% and 66.6%,respectively, of our total revenue for these years. For the four months ended 30 April 2017,revenue generated from commissions for primary market transactions was RMB28.2 million, whichaccounted for 65.2% of our total revenue during this period. As at the Latest Practicable Date, wehad 28 on-going projects for which we are providing primary market real estate agency services.

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During the Track Record Period, we acted as a primary market real estate agent in respect ofover 90 property development projects. The properties transacted through our Group had anaggregate value of RMB14,807.7 million. The following table summarises the number of projectsfor which we provided primary market real estate agency services in 2015, 2016, and the fourmonths ended 30 April 2017:

For the year ended 31 December

For the four

months ended

30 April

2015 2016 2017

Number of projects brought forward 19 19 15

New projects entered into 16 32 27

Total number of projects 35 51 42

Number of projects to be carried forward 19 15 32

Secondary market real estate agency services

Potential buyer/tenant/property owner

approaches our outletsOur agents arrange

for property visit

and negotiate

with parties

on priceOur agents approach property

owners/potential buyer/tenant

Arrangement

for execution

of agreement

Owner and

buyer/tenant

pay commission

to our Group

We also provide secondary market real estate agency services, which we define as situationswhere we do not enter into an agreement directly with a property developer and instead receivecommission from a third party (typically another property agency or an individual purchaser).These transactions often involve housing stock.

We provide secondary market real estate agency services to owners looking to sell or leasetheir properties and to potential buyers or tenants looking to buy or rent properties in Guangzhou.

For secondary market transactions on behalf of owners, there is no bidding process. We willpromote their units both in our outlets and on our different platforms, including postingadvertisements on third-party websites, in order to reach a large group of potential buyers ortenants. We will also review our database to search for possible matches with a potential buyer ortenant.

For secondary market transactions on behalf of potential buyers or tenants, our sales agentsmay actively approach or be contacted by a potential buyer or tenant and will assist the individualto identify suitable properties based on his or her criteria. Our sales agents will generally arrangeand accompany the potential buyer or tenant on a property visit and will negotiate on behalf of thepotential buyer or tenant with the property owner in respect of the price and other terms relating to

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the sale or lease of the property. If the parties reach an agreement on the purchase or lease of theproperty, we will arrange for execution of an agreement recording the terms, as well as an agencyagreement between us and the buyer or tenant. We will generally charge the owner and the buyeror tenant a commission based on the purchase price or the rent.

The table below sets out the number of outlets as at the dates indicated:

As at 1 January As at

2015 2016 2017

30 April

2017

Latest

Practicable

Date

Number of outlets 25 25 24 29 39

As at the Latest Practicable Date, we had 39 outlets and 173 qualified agents in Guangzhou.The table below sets out the historical breakeven and investment payback periods for our existingoutlets that were opened during the Track Record Period, and the expected breakeven andinvestment payback periods for new outlets to be opened:

Outlets opened during the Track Record Period

Breakeven period: Approximately one to four months

Investment payback period: Approximately three to six months

New outlets to be opened

Breakeven period: Approximately three months

Investment payback period: Approximately 6.8 months

Note: The breakeven periods and investment payback periods are different because their respective methods of

calculation focus on different components. Breakeven period is the number of months it takes from

commencement of operations of an outlet for its monthly revenue to be at least equal to its monthly

expenses. Investment payback period is the number of months from commencement of operations of an

outlet for its cash flows to cover the amount of investment required for opening the outlet.

The estimations for the new outlets are based on conservative assumptions, such as (i) new outlets only

generating income in the third month after establishment, and (ii) estimation of revenue of new outlets

based on average revenue derived from secondary real estate agency services divided by the weighted-

average number of outlets during 2016.

During the Track Record Period, the average commission rates charged by our Group wereapproximately 1.0% to 3.0% of the property price, or approximately 0.5 to 1.0 time of the monthlyrental.

In 2015, 2016, and the four months ended 30 April 2017, revenue generated fromcommissions for the provision of secondary market real estate agency services was RMB19.1million, RMB23.0 million and RMB10.4 million, respectively, which accounted for 21.2%, 21.6%and 24.0%, respectively, of our total revenue for these years.

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Integrated Services

As part of our integrated services offering, we provide a wide range of services that addvalue to our customers, including property developers, individual customers and companies, withthe aim to enhance customer satisfaction and maintain long term relationships with our customers.

Fangyuanbao (房緣寶)

Property developers

want to sell properties

which may have

a lower level of

market interest

Property developers

engage us for the

Fangyuanbao platform

Other real estate agents

bring in customers to

purchase the properties

Commission split

between us and

the real estate agent

We acquired our Fangyuanbao business in 2016. For details of the acquisition, see ‘‘History,Reorganisation and Corporate Structure — Corporate Development — Fang Yuan Bao’’. OurFangyuanbao platform serves as a referral business and online platform providing us with theability to reach a larger group of potential buyers for our developer customers. The platform servesas a bridge between property developers and other real estate agents so that properties in adeveloper’s project are promoted by a greater number of real estate agents without the individualagents directly entering into business relationships with the property developer. The Fangyuanbaoplatform is used only for primary property development projects.

Our Fangyuanbao platform tends to be used for projects that may have a lower level ofmarket interest, such as developments in non-prime locations, or projects that the developers wantto expedite sales, as developers typically are willing to pay a higher commission for these projects.Where the Fangyuanbao platform is used, we will split the commission with any real estate agentthat brings in a potential buyer who actually completes on the purchase of a property. During theTrack Record Period, we successfully utilised our Fangyuanbao platform for 24 developmentprojects such as Zengcheng Yunshan Shiyi (增城雲山詩意) and Huayu Shui’an (花語水岸), aswell as other projects in Foshan and outer Guangzhou.

When a property developer engages us for our Fangyuanbao platform, we will upload therelevant property information onto our Fangyuanbao platform, which is accessible to other realestate agents. If a real estate agent has a potential buyer who is interested in buying the property,the real estate agent will register the potential buyer’s information on the Fangyuanbao platformand accompany the potential buyer on a property visit. If the potential buyer purchases theproperty, the property developer will pay us the commission for the transaction, and we will splitthe commission with the real estate agent that brings in the buyer. For 2016 and the four monthsended 30 April 2017, we split approximately 51.5% and 42.4%, respectively, of the commissionwe received from property developers with the real estate agents that brought in buyers.

In 2016 and the four months ended 30 April 2017, revenue generated from projects transactedthrough our Fangyuanbao platform was RMB7.4 million and RMB3.4 million, respectively, whichaccounted for 7.0% and 7.8%, respectively, of our total revenue for these periods. In 2016, therevenue generated from the Fangyuanbao platform of RMB7.4 million refers to its revenuecontribution, after its acquisition by us in May 2016, to the Group’s revenue for the full year of2016. From its revenue, the Fangyuanbao platform split approximately 51.5% of the commission

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received from property developers to real estate agents that had brought in the buyers and recordedit as commission expense. For 2016, after deducting expenses and adjustments for non-cash items,the operating profit before working capital changes for the Fangyuanbao business amounted toRMB0.2 million. Other expenses incurred included employee benefit expenses, advertising andrelated expenses, and operating lease charges in respect of office premises. As the Fangyuanbaobusiness is in the ramp-up stage of its development, employees are needed to call on smaller-sizedreal estate agencies to introduce and market the Fangyuanbao platform. The strength of theFangyuanbao platform lies in its database, which will determine the reach and exposure forproperty developers who engage the Fangyuanbao platform to sell their properties. TheFangyuanbao business also incurred advertising expenses for promotion of its business in 2016.

One-stop Service Centre (一站式服務中心)

We provide a range of ancillary services for customers through our One-stop Service Centrebusiness, as we aim to be a one-stop shop for all our customers. In addition to acting as an agentin their property search, as well as in the negotiation of, and the signing arrangements for, sale andpurchase agreements, we will assist them in relation to the sale, including after the sale occurs. Forexample, for developers that may not have an in-house team to manage and handle all theindividual purchasers, we will assist purchasers to obtain the relevant ownership certificates, toapply for mortgages from banks, and in relation to other administrative matters. We charge a fixedfee per transaction for assisting in obtaining ownership certificates, and we charge a fee based onthe amount of mortgage the purchasers obtain from banks. As our sales agents would often havebuilt rapport with the individual purchasers by the time these services are required, we aregenerally well-placed to provide these value-added services.

In early 2017, we also began to provide value-added services through our One-stop ServiceCentre to our customers. As part of our One-stop Service Centre offering, we are also able toprovide our customers with rent collection services; property repair and maintenance services,including interior maintenance and renovation; and design and furnishing services, includinginterior design of properties and fitting them out with furniture and appliances. Our One-stopService Centre, together with our secondary market real estate agency services, enables us toprovide a full range of services that our customers may require when they buy properties forinvestment purposes. For these services provided through our One-stop Service Centre, we chargeour customers monthly fees based on a percentage of the rental income from the property. We willbe reimbursed by our customers for any costs incurred by us on their behalf.

In 2015, 2016, and the four months ended 2017, revenue generated from our One-stopService Centre services was RMB0.5 million, RMB1.2 million, and RMB75,000, respectively,which accounted for 0.5%, 1.1%, and 0.2%, respectively, of our total revenue for these periods.

Zhaoshangyi (招商易)

For commercial units which are part of primary market development projects, ourZhaoshangyi business assist property developers to identify and approach prospective lessees.Property developers may not have an in-house team that can deal effectively with prospectivecommercial tenants, or may otherwise prefer to engage an external property agency to do so inorder to reach a wider pool of potential tenants. Developers generally value finding commercialtenants for development projects early in the development process because this tends to make the

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development more attractive overall and because commercial units are usually easier to sell ifthere is an existing tenant for the unit. Developers pay us a one-off fee based on a percentage ofthe rental for commercial units. During the Track Record Period, the fee percentage charged byour Group generally ranged between 0.5 to 2.5 times of the monthly rental for commercial unitsleased.

In 2015, 2016, and the four months ended 30 April 2017, revenue generated from ourZhaoshangyi services was RMB0.8 million, RMB0.7 million, and RMB0.9 million, respectively,which accounted for 0.9%, 0.7% and 2.1%, respectively, of our total revenue for these periods.

MAJOR REAL ESTATE PROJECTS HANDLED BY OUR GROUP

The table below sets out the 10 largest real estate projects by revenue generated in respect ofwhich we provided services during the Track Record Period, from which we generated incomefrom the provision of (i) property research and consultancy services, (ii) primary real estate agencyservices and (iii) Integrated Services:

Name of Project Location

Type ofservicesprovided1

Revenue for

Total revenuegeneratedduring the

Track RecordPeriod

Year ended 31 December

Fourmonthsended

30 April

2015 2016 2017

RMB‘000 RMB‘000 RMB‘000 RMB‘000

花語水岸 (Huayu Shui’an)2 Guangzhou 1,2,3 28,411 14,401 865 43,677

增城雲山詩意 (Zengcheng

Yunshan Shiyi)2 Guangzhou 1,2,3 7,036 13,149 10,922 31,107

海棠福灣一號 (No.1 Haitangfu

Bay)2 Sanya 1,2 6,710 6,756 1,646 15,112

鶴山十里方圓 (Heshan Shili

Fangyuan)2 Jiangmen 1,2,3 4,914 2,971 4,490 12,375

科城山莊 (Kecheng Village) Guangzhou 1,2,3 3,724 6,966 832 11,522

Project A Guangzhou 1,2,3 1,417 6,670 2,557 10,644

越秀時光 (Yuexiu Shiguang)2 Guangzhou 1,2,3 649 4,548 1,971 7,168

天倫花園 (Tianlun Garden) Guangzhou 1,2 — 5,943 — 5,943

Project B Guangzhou 1,2 — 4,368 666 5,034

Project C Guangzhou 2 871 2,024 434 3,329

Notes:

(1) Type 1 services refers to property research and consultancy services.

Type 2 services refers to primary real estate agency services.

Type 3 services refers to Integrated Services.

(2) These projects were awarded by connected customers.

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For 2015, 2016, and the four months ended 30 April 2017, the total value of properties in theprimary market transacted through our Group were approximately RMB6,454.1 million,RMB5,613.0 million, and RMB2,740.6 million, respectively. The total value of properties in theprimary market in Guangzhou transacted through our Group were approximately RMB5,290.9million, RMB4,433.1 million, and RMB1,811.8 million, respectively, for these periods.

OUR CUSTOMERS

Our major customers for our property research and consultancy business are propertydevelopers. Our major customers for our real estate agency services are property developers,property owners, property buyers, and tenants. Our major customers for our Integrated Services areproperty developers and property buyers.

We have established an extensive customer base in Pearl River Delta, primarily through oursales personnel. For 2015, 2016 and the four months ended 30 April 2017, we had been engagedby 47, 72 and 47 corporate customers, respectively after removing duplicates of customers thatused our services in different business segments. The table below sets out the number of ourcorporate customers by business segments during the Track Record Period:


For months

ended

30 April

2015 2016 2017

Property Research and Consultancy Services 12 9 3

Primary Market Real Estate Agency Services 38 56 39

Integrated Services(1) 6 25 9

Total (after removing duplicate customers in more

than one segment) 47 72 47

Note:

(1) Our customers of Integrated Services in 2015 did not include any customers for Fangyuanbao services,

which we did not acquire until 2016.

Property Research and Consultancy Services

For our property research and consultancy business, we generally enter into a research andconsultancy agreement with our customers for every development project. Major terms of theseagreements include the scope of services and deliverables to be provided by our Group to thecustomers, such as market research and a feasibility report; fee structure which may be settled by aone-off payment or in instalments; and the report is generally due for delivery within 10 to 45days from the date of the agreement.

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Primary Market Real Estate Agency Services

For our primary market real estate agency services, we generally enter into planning andagency agreements with the property developers. Key terms of these agreements generally includethe following:

. Information of the project. Such information would include the name of the developer,the name of the agent, description of the services to be provided, key dates relating tothe sales of the property, and other key facts such as property location, size and nature.

. Term. The term under the planning and agency agreements is generally within one year,subject to renewal upon negotiation between the two parties, whereby a new agreementwill be entered into.

. Commission. Our customer pays us commission for any property sold through us, andcommission is based on the successful completion of sales. The commission rates arenormally based on a fixed percentage or a progressive scale percentage.

. Services. We are generally required to station a team of sales personnel on-site to assistpotential purchasers and to follow up on the potential buyers. We may also be requiredto assist in organising various events in relation to the promotion of the projects.

. Incentive payments. Our customer may pay us a discretionary incentive payment basedon the market conditions and sales of the properties.

. Billing and payment. We issue bills to our customers on a monthly basis. During theTrack Record Period, there was generally no specific credit term granted to ourcustomers, but our customers usually took under 90 days from the issuance of bills tosettle our receivables. The payment from our customer to us is through bank wiretransfer or cheque.

Secondary Market Real Estate Agency Services

For our secondary market real estate agency services, we generally enter into standardtripartite agreements with the property owner (as seller) and property buyer (as buyer). Key termsof these agreements generally include the following:

. Details of the property. Information including but not limited to the address, certificatenumber, size, nature and any encumbrances on the property are included to clearlyidentify the property for sale.

. Consideration and payment terms. The consideration of the property and the method ofsettlement are set out in the agreement. The consideration may be settled by (i) a one-off payment, (ii) payment by instalments, or (iii) payment with mortgage.

. Completion. Arrangements as to how the transaction will be completed, such ascompletion date and mechanisms, are included in the agreements.

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. Commission. A commission based on the property price or rental is payable by each ofthe buyer or tenant and the seller or landlord in respect of the transaction. The amountof the commission may vary and will be negotiated among the parties.

. Late payment charge. Interest will be accrued for any delay in payment of theconsideration by the buyer to the seller, and of the commission by the buyer and/or theseller.

Integrated Services

For our Fangyuanbao services, we generally enter into cooperation agreements with propertydevelopers. Key terms of the cooperation agreements generally include the following:

. Scope of cooperation. Details of the cooperation will be included, such as informationon the property project, the duration and a general description of the services to beprovided to our customers, such as stationing a team of staff on-site to assist potentialpurchasers and provide customer service, as well as liaising with other real estate agentswho may introduce potential customers and accompany them on property visits.

. Fees. We generally charge a fee based on a fixed percentage of the total transactionamount of the properties. We will then split the fees with the real estate agent thatbrings in the buyer.

For our Zhaoshangyi services, we generally enter into commercial agency agreements withproperty developers. Key terms of the commercial agency agreements generally include thefollowing:

. Scope of service. We introduce potential lessees to property developers for theircommercial properties. If the potential lessee leases the commercial property from theproperty developer as evidenced by signing of the lease agreement, we will receive acommission based on a fixed percentage of the total monthly rent.

. Bills and payments. We issue bills to our customers on a monthly basis. The customersare required to settle our bills within seven business days.

For our One-stop Service Centre services, we generally enter into agreements with propertydevelopers and individual customers. Key terms of the agreements generally include the following:

. Scope of service. For primary market properties, we generally station a team of staff on-site to assist purchasers in completing registration and obtaining the relevant ownershipcertificates. For individual customers buying secondary market properties, we generallyassist them in obtaining mortgage and completing registration.

. Fees. We generally charge property developers for services we provide in respect ofprimary market properties, and charge individuals in respect of secondary marketproperties.

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For 2015, 2016, and the four months ended 30 April 2017, sales to our largest customeraccounted for 31.5%, 13.4%, and 24.8 %, respectively, of our total revenue. For 2015, 2016, andthe four months ended 30 April 2017, revenue generated from our five largest customers inaggregate was 56.0%, 43.3%, and 48.6%, respectively, of our total revenue. Among our fivelargest customers in 2015, 2016, and the four months ended 30 April 2017, members of theFineland Group contributed to 52.3%, 31.9%, and 43.4% of our total revenue, respectively. Otherthan the Fineland Group, all our major customers are Independent Third Parties. For details of thetransactions with the Fineland Group, see ‘‘Connected Transactions — Continuing ConnectedTransactions subject to the reporting, announcement, circular and independent shareholdersapproval requirement — Master Agency Service Agreements’’. As at 30 April 2017, none of ourmajor customers were our suppliers.

Although a significant portion of our revenue was generated from the Fineland Group, webelieve that we are able to expand our customer base which is evidenced by the decreasingpercentage of revenue generated from the Fineland Group in 2016 compared to 2015 and in thefour months ended 30 April 2017 compared to the same period in 2016. For details of ourrelationship with the Fineland Group, see ‘‘Relationship with our Controlling Shareholders’’.

Five largest customers

The year/period forwhich the customer wasone of the Group’s fivelargest customers and

its approximatepercentage of sales Business activities

Years ofbusiness

relationship

Connectedperson

(if so, equityinterest heldwithin the

Fineland Group)

Guangzhou Huizhao CommercialServices Co., Ltd.(廣州市輝兆商務服務有限公司)1

FY2015: 31.5%FY2016: 13.4%

Property development 3 years Yes (50%)

Guangzhou Huipeng Real EstateDevelopment Co., Ltd.(廣州市輝鵬房地產開發有限公司)1

FY2015: 7.8%FY2016: 12.1%4M2017: 24.8%

Property development 3 years Yes (85%-100%)2

Hainan Wantong Real Estate Co., Ltd.(海南萬通房地產有限公司)1

FY2015: 7.5%FY2016: 6.4%4M2017: 3.8%


Heshan City Fineland Real EstateDevelopment Co., Ltd.(鶴山市方圓房地產發展有限公司)1

FY2015: 5.5%4M2017: 10.2%


Guangzhou Junsen InvestmentCo., Ltd.(廣州峻森投資有限公司)

FY2015: 3.7%FY2016: 5.8%

Property development 2 years No

Customer F FY2016: 5.6% Property development 1 year No

Customer G 4M2017: 5.2% Property development 3 years No

Guangzhou Hehe Investment Co., Ltd.(廣州合禾投資有限公司)1

4M2017: 4.6% Property development 6 years Yes (51%)

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Notes:

(1) These customers are connected customers as they are subsidiaries of the Fineland Group. For 2015, 2016,

and the four months ended 30 April 2017, sales to the connected customers within our five largest customers

in aggregate amounted to RMB47.1 million, RMB33.9 million, and RMB18.8 million, which represented

52.3%, 31.9%, and 43.4% of our total revenue for each of these periods, respectively.

(2) Guangzhou Huipeng Real Estate Development Co., Ltd became a wholly-owned subsidiary of the Fineland

Group in March 2017 when the independent minority shareholder sold his remaining equity interest to the

Fineland Group.

Save for Mr. Fong, none of our Directors or their associates, or any Shareholders, who ownsmore than 5% of our issued share capital, has any interest in any of our five largest customers for2015, 2016 and the four months ended 30 April 2017.

SALES AND MARKETING

We promote our services through a wide range of marketing initiatives including advertisingthrough traditional and new media, introducing incentive schemes for our employees, and rewardschemes for referrals of new customers by existing customers. For primary property projects, wecollaborate with property developers in organising promotional events in order to raise the profileof the project and to attract more customers.

We also work on maintaining good relationships with property developers throughparticipating in tender bidding of new projects, establishing cooperative partnerships andcontacting potential customers. We also place an emphasis on leveraging our capabilities in abroad range of services by acting as a ‘‘one-stop shop’’ for our different types of customers, inorder to enhance their loyalty.

Our operation management personnel are responsible for our marketing activities. For 2015,2016 and the four months ended 30 April 2017, we incurred expenses of RMB2.8 million, RMB6.8million and RMB1.3 million, respectively, in connection with our marketing campaign.

OUR SUPPLIERS

Due to the nature of our principal business activities, we have no major suppliers. We haveentered into agreements with various suppliers mainly in relation to the provision of marketing andadvertising services. Also, we may split commission received from property developers under ourFangyuanbao business with real estate agents that bring in buyers.

None of our Directors or their associates, or any Shareholders, who owns more than 5% ofour issued share capital, has any interests in any of our suppliers during the Track Record Period.

COMPETITION

Real estate business is fragmented in Guangzhou, as well as generally in the PRC. Accordingto the Guangzhou Association of Real Estate Agent (廣州市房地產中介協會), there wereapproximately 485 real estate agencies in Guangzhou by the end of March 2016.

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According to the DTZ C&W Report, the competitive situation of the property intermediaryservices is considered fragmented, with many real estate agencies in the market due to therelatively low entry barrier of the property consultancy and agency industry. Most of the marketplayers are small in scale, as evidenced by the fact that among the 485 real estate agencies inGuangzhou, only 185 have outlets to conduct secondary market real estate agency services, amongwhich only 16, including our Group, have more than 10 outlets in the market. All but two of thetop 10 agencies, including us, have less than a 4% share of the primary residential market. Ascompetition is keen, companies focus on several key factors to remain competitive in the market,including its brand recognition, experience and market coverage which is measured by the numberof outlets and staff.

Due to the shortage of urban land supply, it is expected that the property market inGuangzhou will be more dependent on secondary properties. The gradual shift from the dominationof the primary market to secondary market plays an integral role in the transformation within thereal estate industry. In light of this change, our Directors believe that the demand for secondarymarket real estate agency services will increase. In order to capture the increasing demand, weexpect to expand our secondary property real estate agency services by opening more outlets andhiring more employees in Guangzhou. Our Directors also believe that we are well-positioned tocapture the opportunity.

Recently, some of the market players begin to adopt new marketing channels such asintroducing online platforms to improve the efficiency of services. To cope with the marketdevelopment, our Group has developed our Integrated Services offerings, and our Directors are ofthe view that our Group’s ability to offer a broad range of value-added services to propertydevelopers will enable our Group to continue to maintain its competitiveness in the primary realestate market.

For further details of the competitive landscape and our competitive edge over othercompetitors, see ‘‘Industry Overview — Competitive landscape in the property consultancy andagency industry in Guangzhou primary residential market’’ and ‘‘Business — Our CompetitiveStrengths’’.

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EMPLOYEES

The table below sets out the number of employees within our different business segments asat the dates indicated:

As at 1 January As at

2015 2016

31 December

2016

30 April

2017

Latest

Practicable

Date

Management and

administration(1) 6 6 9 6 6

Property research and

consultancy services 34 34 67 49 49

Real estate agency services(2) 444 435 667 520 682

Integrated business services 32 25 41 55 57

Total 516 500 784 630 794

Notes:

(1) There are a number of employees that perform administration and management functions for all business

segments, and they have not been split among the different business segments in this table.

(2) During the fourth quarter of 2016, new employees were hired for our sales department as it was a busy

season with a number of active projects. In the first quarter of 2017, our number of employees dropped as

the spring festival period is generally a peak season for employee turnover. During the second and third

quarters of 2017, we hired more employees for our increasing business needs and to replace some of the

employees that had left during the first quarter of 2017.

As at 30 April 2017, we had 630 employees, all of whom were based in Guangdong, andHainan. For 2015, 2016, and the four months ended 30 April 2017, our total employee benefitexpenses were approximately RMB59.1 million, RMB70.2 million, and RMB27.5 millionrespectively.

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The table below sets out the aggregate number of employees, categorised by function, and thepercentage of each category of our total employees as at 30 April 2017.

Function

Number of

Employees

Percentage of

Total Employees

Administration and management 6 1.0%

Market research and business support 49 7.8%

Sales Department

Primary properties division 120 19.1%

Secondary properties division 400 63.4%

Commercial properties division 21 3.3%

Customer services 34 5.4%

Total 630 100%

We recruit our employees based on our business needs. Our human resources departmentrecruits employees based on our needs according to our annual business development plan orspecific requests from other departments. We seek candidates through various channels, includingonline recruitment platforms such as 51job.com, zhaopin.com and Liepin.com, and participating inrecruitment fairs. We also encourage internal transfer of employees where appropriate.

We emphasise on the development of our employees and have implemented a trainingprogramme for our employees. We provide in-house training to our employees and from time totime engage external service providers, with the aim of providing training appropriate for ouremployees based on our annual employee development plan.

We enter into individual employment agreements with our employees, specifying termsregarding, among other things, salary, benefits, working hours, workplace safety, and insurance.The remuneration package of our employees includes salary and overtime allowances. We alsoprovide our employees with benefits such as medical care, health check, birthday and festival cashallowance, as well as social insurance and housing provident fund.

We have not adopted a labour union for our employees in the PRC. As at the LatestPracticable Date, we had not been subject to any major labour dispute or other labour disturbancethat had interfered with our operations.

WELFARE CONTRIBUTIONS

We must comply with PRC laws and regulations relating to social welfare. In accordancewith applicable PRC laws and regulations, we currently participate in social insurance contributionplan organised by the relevant local governments. We currently provide employees with a pensioninsurance programme, medical insurance programme, unemployment insurance programme,individual work injury programme, maternity insurance contributions, and employee publichousing reserve contributions. For 2015, 2016, and the four months ended 30 April 2017, the total

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amount of our contribution amounted to approximately RMB4.2 million, RMB5.1 million, andRMB3.5 million, respectively. During the Track Record Period, we did not pay social welfare forall of our employees. For details, see the section headed ‘‘— Non-Compliance’’.

Save as disclosed in the section headed ‘‘— Non-Compliance’’, as at the Latest PracticableDate, we believe we had complied with all applicable national and local laws and regulationsrelating to social welfare and have paid in full the social security premiums and contributionspayable as required by PRC laws and regulations.

HEALTH, WORK SAFETY, SOCIAL AND ENVIRONMENT MATTERS

We are subject to PRC laws in relation to labour, safety and environment protection matters.In addition, we have established occupational safety and sanitation systems, implemented thenational occupational safety and sanitation rules and standards, and provided employees withworkplace safety trainings on a regular basis to increase their awareness of work safety issues. Asadvised by our PRC legal advisers, from the start of the Track Record Period to the LatestPracticable Date, we have complied with PRC laws in relation to workplace safety in all materialrespects and have not had any incidents which have materially and adversely affected ouroperations.

Given the nature of our operations, we do not believe we are subject to materialenvironmental liability risk or compliance costs. From the start of the Track Record Period to theLatest Practicable Date, no fines or penalties for non-compliance of PRC environmental laws hadbeen imposed on us. Our PRC legal advisers are of the view that we are not subject to anymaterial administrative penalties due to violation of environmental laws in the PRC.

PROPERTIES

As at the Latest Practicable Date, we did not own any properties and we leased 40 premisesin various locations in the PRC for use as offices and outlets, with an aggregated GFA ofapproximately 3,833.63 sq.m. The GFA of each property ranges from approximately 17.6 sq.m. to978.2 sq.m. The landlords of certain leases are connected persons of our Group. For further detailsof these connected transactions, please see the section headed ‘‘Continuing ConnectedTransactions’’ in this prospectus.

Defective leased area

As at the Latest Practicable Date, for an area with an aggregate GFA of approximately 173.5sq.m., representing approximately 4.5% of the total GFA of the properties leased by our Group, wehave not been provided by the lessors with the relevant building ownership certificates, theplanning approvals or other documents proving the relevant title of the properties. As a result, wemay not be able to continue occupying the relevant properties if any of these leased areas arechallenged by the relevant authorities or if third parties seek to assert ownership rights against thelandlords.

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Our Directors believe that the properties set out above (‘‘Defective Leased Area’’) are notcrucial to, and will not have a material adverse effect on, our business, financial condition andresults of operations primarily because (i) they represent approximately 4.5% of the total GFA ofproperties leased by the Company only; (ii) our Group, as the lessees, will not be penalised for thelessors’ failure to provide the building ownership certificates; (iii) as at the Latest PracticableDate, the Group’s usage of the Defective Leased Area had never been challenged by the relevantauthorities; and (iv) we can easily lease other properties with valid building ownership certificatesin the event that we can no longer use any of the Defective Leased Area and the estimated timeand cost for relocation (expected not to exceed RMB0.8 million) would not be material.

So far as the Directors are aware, there is no difference in terms of rental for the DefectiveLeased Area. In addition, our Controlling Shareholders and the relevant lessors have undertaken toindemnify us for any loss arising from the Defective Leased Area.

Lease Registration

As at the Latest Practicable Date, 6 leases where we were the lessee had not been registeredwith the relevant PRC government authorities. Pursuant to the relevant PRC laws and regulations,parties to a property lease or a sub-lease shall register the respective lease with the relevantauthorities within the prescribed time limit from executing the lease.

As advised by our PRC Legal Advisers, the relevant PRC government authorities may orderus to, within a prescribed time limit, register and file the lease. Failure to do so may subject us toa fine up to RMB10,000 for each non-registration of lease. As confirmed by our Directors, theleases or sub-leases which are in force are in the process of being registered with the relevant PRCauthorities. We were advised by our PRC Legal Advisers that the relevant PRC governmentauthorities will not impose penalties on us if we complete the registration and filing procedurewithin the prescribed time limit once ordered by the relevant authority and the failure ofregistration of the leases or sub-leases does not affect the legality of these leases or sub-leases.

So far as our Directors are aware, there is no difference in terms of rental for the unregisteredleases and the sub-leases.

For details in relation to the risks associated with the leased properties, see ‘‘Risk Factors —

Risks relating to our business — We are subject to potential adverse consequences due to defectivetitles of certain properties we leased in the PRC’’.

As of the Latest Practicable Date, as we have no single property with a carrying amount of15% or more of our total assets, on this basis, we are not required by Rule 8.01A of the GEMListing Rules to include in this prospectus any valuation report. Pursuant to section 6(2) of theCompanies (Exemption of Companies and Prospectuses from Compliance with Provisions) Notice(Chapter 32L of the Laws of Hong Kong), this prospectus is exempted from compliance with therequirements of section 342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions)Ordinance in relation to paragraph 34(2) of the Third Schedule to the Companies (Winding Up andMiscellaneous Provisions) Ordinance, which requires a valuation report with respect to all of ourinterests in land or buildings.

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LICENSES, PERMITS AND CERTIFICATES

Our Directors, as advised by our PRC legal advisers, confirm that, as at the Latest PracticableDate, we had obtained all material licenses, approvals and permits from relevant PRC authoritiesfor our operations in the PRC and all of them are valid and in force. The following table sets outdetails of our material licenses, permits and certificates for our operations.

Licence/Permit/Certificate Issuing Authority Grant Date

Expiry

Date(1)

Filing Certificate of Guangzhou Real

Estate Agency (廣州市房地產中介服

務機構備案證書) granted to

Guangzhou Fineland Property

Consultancy (廣州方圓地產顧問有限

公司)

Guangzhou Housing and

Urban-Rural Construction

Committee (廣州市住房和

城鄉建設委員會)

1 January

2017

31 December

2017



務機構備案證書) granted to Fang

Yuan Bao (廣州房緣寶網絡科技有限

公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Yun Shan

Shi Yi Branch (雲山詩意分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Yun Shan

Shi Yi Second Branch (雲山詩意第二

分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Xing Guo

Road Branch (興國路分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Yin Yue

Branch (印月分公司)





1 January

2017

31 December

2017

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Expiry

Date(1)



務機構備案證書) granted to Second

Times Meiguiyuan Branch (時代玫瑰

園第二分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Zilin

Branch (紫林分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Gui Hua

Gang Branch (桂花崗分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Bai Yun

Branch (白雲分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to the Times

Meiguiyuan Branch (時代玫瑰園分公

司)





1 January

2017

31 December

2017



務機構備案證書) granted to the

Second Bai Yun Branch (白雲第二分

公司)





1 January

2017

31 December

2017



務機構備案證書) granted to the Fourth

Bai Yun Branch (白雲第四分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Bai Shun

Branch (百順分公司)





1 January

2017

31 December

2017

BUSINESS

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Expiry

Date(1)



務機構備案證書) granted to Fangcun

Garden Branch (芳村花園分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Jiefang

North Road Branch (解放北路分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Jin Bi Ya

Yuan Branch (金碧雅苑分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Jin Sui

Branch (金穗分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Ji Jun

Branch (集俊分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Bai Yun

Golf Branch (白雲高爾夫分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Huang Shi

East Road Branch (黃石東路分公司)





1 January

2017

31 December

2017




North Road Branch (黃石北路分公司)





1 January

2017

31 December

2017

BUSINESS

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Expiry

Date(1)




Garden Branch (黃石花園分公司)





1 January

2017

31 December

2017




Road Branch (黃石路分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Long Xi

Branch (龍溪分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to the First

Panyu Branch (番禺第一分公司)





1 January

2017

31 December

2017



務機構備案證書) granted to Kecheng

Branch (科城分公司)


Urban-Ruarl Construction



27 February

2017

31 December

2017



務機構備案證書) granted to Huaxia

Branch (華夏分公司)





24 April 2017 31 December

2017



務機構備案證書) granted to Xinglin

Branch (杏霖分公司)





5 May 2017 31 December

2017



務機構備案證書) granted to Guyi

branch (谷詒分公司)






2017

BUSINESS

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Expiry

Date(1)



務機構備案證書) granted to Yi Lan

Branch (憶瀾分公司)






2017



務機構備案證書) granted to Xingmin

Branch (興民分公司)






2017



務機構備案證書) granted to East

Tianhe Branch (天河東分公司)





3 July 2017 31 December

2017



務機構備案證書) granted to North

Tianhe Branch (天河北分公司)






2017



務機構備案證書) granted to Juanlong

Branch (雋瀧分公司)






2017


Estate Agency(廣州市房地產中介服務

機構備案證書) granted to Yuexiu

Branch (越秀分公司)






2017




Branch (悅雲分公司)





3 August

2017

31 December

2017




Branch (華夏第二分公司)





7 September

2017

31 December

2017

BUSINESS

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Expiry

Date(1)




Branch (金道花園分公司)





11 October

2017

31 December

2018

Note:

(1) Validity of the filing certificates for each branch is generally until the end of the year in which it is granted.

The Company will apply for renewal of the filing certificates towards the end of each year in accordance

with the notices set out by the Guangzhou real estate regulatory authority. As required by the Regulation on

Guangzhou Real Estate Agency Services Administration (廣州市房地產中介服務管理條例), the Guangzhou

real estate regulatory authority will examine the real estate agents for their qualification of both its

professionals and business every year. The Company has not encountered any difficulties in renewing such

filing certificates during the Track Record Period and up to the Latest Practicable Date, and does not

anticipate any upcoming difficulties in connection with their renewal.

As at the Latest Practicable Date, we have 173 qualified agents among our employeeswho hold the Licences of Guangzhou Real Estate Agents (廣州市房地產中介服務人員資格證書)granted by Guangzhou Association of Real Estate Agents (廣州市房地產中介協會).

AWARDS AND RECOGNITION

We have received numerous awards in recognition of the quality and popularity of ourservices. We are also the Vice President of the Guangzhou Association of Real Estate Agents (廣州市房地產中介協會), and a member of the Guangzhou Association of Enterprises with ForeignInvestment (廣州外商投資企業協會). The following table sets out a selection of the major awardswe have received in the past:

Year of grant Award/Accreditation Awarding Body

2017 AAA Grade in the Enterprise Credit Evaluation

企業信用評價AAA級信用企業

China Association of Small and Medium

Enterprises (中國中小企業協會)

2016 The Agency with Business Integrity in

Guangzhou China* ((中國廣州)誠信經營中介

公司)

Guangzhou Daily (廣州日報)

2016 The Public Trusted Agency China ((中國廣州)

市民信賴中介)


2016 Innovative Real Estate Agency in South China

(華南房地產創新經紀企業)

Guangzhou ZhuTianXia Internet Joint Stock

Limited Company* (廣州住天下網絡有限公司)

2015 Most Valuable Agency on the China Real Estate

Billboard (中國房產風雲榜最具價值經紀公司)

www.fang.58.cn (58安居客)

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Year of grant Award/Accreditation Awarding Body

2015 Cornerstone Real Estate Brand of Guangdong

Province* (廣東省地產支柱品牌) in the

Summit of the Real Estate Industry Leaders of

Guangdong Province* (廣州省地產全行業領袖

峰會)

Guangdong Real Estate Chambers of Commerce

(廣東省地產商會) and the committee of

Summit of the Real Estate Industry Leaders of

Guangdong Province* (廣東省地產全行業領袖

峰會組委會)

2015 Five-Star Service Association in the Guangzhou

Property Agency Industry*

(廣州市房地產中介行業五星級服務機構)

Guangzhou Association of Real Estate Agents

(廣州市房地產中介協會)



公司)




公司)


2013 The Most Influential Brand in the Guangzhou

Property Agency Industry (廣州地產經紀行業

— 最具品牌影響力品牌)

www.SouFun.com (搜房網)


Property Agency Industry* (廣州地產經紀行業



2012 The Industry Model Property Agency in the past

Ten Years* (十年行業楷模地產中介公司)



Property Agency Industry (廣州地產經紀行業



2011 The Most Trustworthy Property Agency Property

Agency in Guangzhou China ((中國·廣州)最值

得信賴地產中介公司)


INTELLECTUAL PROPERTY

As at the Latest Practicable Date, we did not hold any registered trademark in Hong Kong orthe PRC and held four registered domain names that are material to our business. For moreinformation, see ‘‘Statutory and General Information — B. Further Information about the Businessof our Group — 2. Summary of intellectual property rights of our Group’’.

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We entered into the Trademark License Agreements on 11 October 2017 with Fineland RealEstate, pursuant to which Fineland Real Estate agreed to grant to our Group licenses to use certaintrademarks registered by Fineland Real Estate in the PRC and in Hong Kong at nil considerationfrom the date of the Trademark License Agreements until the expiration dates of the licensedtrademarks. For details of the Trademark License Agreements, see ‘‘Connected Transactions -Continuing Connected Transactions Fully Exempt from the Reporting, Annual Review,Announcement and Independent Shareholders’ Approval Requirements - Trademark LicenseAgreements’’ and ‘‘Statutory and General Information - B. Further Information about the Businessof our Group — 2. Summary of intellectual property rights of our Group’’.

From the start of the Track Record Period to the Latest Practicable Date, we had not beeninvolved in any material intellectual property rights dispute, infringement claims or litigation.

INSURANCE

We have purchased the integrated insurance for enterprises for all our outlets in Guangzhouwhich provides insurance coverage against major risks arising from our business operations,primarily including property loss and damage, loss and damage resulting from theft and robberyand cash loss. We believe that our insurance coverage is adequate and in line with industrypractice in the PRC.

During the Track Record Period, we did not make any material claim under our insurancepolicies.

LEGAL PROCEEDINGS

We may from time to time be involved in disputes or legal proceedings arising from theordinary course of our business. As at the Latest Practicable Date, there were no litigation orarbitration proceedings pending or threatened against us or any of our Directors which could havea material adverse effect on our business, financial condition, and results of operations.

NON-COMPLIANCE

During the Track Record Period, we had not made full contributions to the social insuranceand housing provident funds. During the Track Record Period, our total unpaid contributions forthe social insurance and housing provident funds amounted to RMB7.5 million and RMB1.4million, respectively, and the applicable late payment fee which we may be ordered by the relevantgovernment authorities to pay amounted to RMB1.2 million. The non-compliance was mainlycaused by the inconsistent implementation or interpretation of the relevant regulations by localauthorities in connection with the applicable contribution base of social insurance and housingprovident funds in the PRC. In addition, some employees were reluctant to make full contributionaccording to their actual wages as they consider that the full contribution creates heavy financialburden to them.

In order to mitigate the risks of this incident, our internal policy and guidelines have beenrevised to include (i) the designation of general manager office to process matters relating to socialinsurance fund and housing provident fund contribution matters; and (ii) the calculation to bereviewed by our finance department.

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From March 2017 onwards, we have been paying adequate contributions to the socialinsurance fund and housing provided fund for our employees. Furthermore, we have madeprovisions for the underpaid social insurance fund contributions (inclusive of late charge) andhousing provident fund contributions of approximately RMB8.7 million and RMB1.4 million,respectively.

During the Track Record Period and up to the Latest Practicable Date, we had not receivedany complaints from our employees for insufficient contributions by us to any social insurance orhousing provident fund nor had we received any order or notice from the relevant governmentauthorities requesting contributions to any social insurance and housing provident funds. OurDirectors confirmed that we would make contributions to the unpaid amounts in relation to thesocial insurance and housing provident funds upon receiving any order or notice from the relevantgovernment authorities requesting such additional contributions.

Based on the interviews with and written confirmations from the relevant competentgovernment authorities, we were not involved in any investigation or subject to any administrativepenalty imposed by the relevant government authorities in connection with social insurance andhousing provident funds contributions.

In view of the above, our Controlling Shareholders, undertook in the event that we arerequired to pay any of the abovementioned underpaid contributions, overdue charges or penaltiesimposed by the relevant regulators, our Controlling Shareholders would indemnify all of itsobligations, losses and liabilities in relation to the above.

From the start of the Track Record Period to the Latest Practicable Date, save as disclosedabove in this section, we had been in compliance in all material aspects with the applicable lawsand regulations in the PRC and obtained all necessary approvals, permits, licences and certificatesthat are material to our business operations from the relevant government authorities.

INTERNAL CONTROL AND RISK MANAGEMENT

Review by internal control consultant

Our Directors are responsible for formulating and overseeing the on-going implementation ofour internal control measures and effectiveness of our risk management system and qualitymanagement system.

Our Group engaged an independent external consulting firm as our independent internalcontrol consultant in December 2016. Pursuant to such engagement, the internal control consultanthas conducted a review of the internal control measures relating to our business operations with aview to identifying irregularities and furnishing internal control recommendations on remedialactions in order to enhance our internal control system generally.

The initial review process took place in December 2016 with findings identified andrecommendations provided by the internal control consultant. The internal control consultantcarried out a follow-up review in March 2017 and confirmed that our Group has adopted themeasures recommended by it to rectify all the previous findings identified.

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We have established an internal control department and each of our outlets has designated therelevant personnel who will be responsible for monitoring our on-going compliance with therelevant PRC laws and regulations that govern our business operations and overseeing theimplementation of any necessary measures. In addition, we plan to provide our Directors, seniormanagement and employees involved with continuing training programmes and/or updatesregarding the relevant PRC laws and regulations on a regular basis with a view to proactivelyidentify any concerns and issues relating to potential non-compliance. Our executive Director andcompliance officer, Mr. Yi Ruofeng, is responsible for ensuring our overall on-going compliance.

We have also appointed RaffAello Capital Limited as our compliance adviser to provide uswith services including providing guidance and advice in compliance with requirements under theGEM Listing Rules.

We have implemented the following internal control measures to ensure our compliance withrelevant social insurance and housing provident fund laws and regulations:

. the manager of the human resources departments of our Group will review the reportingand contributions of social insurance and housing provident fund for the employees ofour Group regularly;

. our human resources department will also consult Beijing Jingtian & Gongcheng LawFirm, our PRC legal adviser, on the requirements under the relevant PRC laws andregulations in relation to social insurance and housing provident fund;

. training on relevant social security and housing provident fund laws and regulations willbe arranged for our management from time to time to keep them abreast of these areas;

. our human resources department will organise information sessions for our employeesand urge them to make contributions/payments in accordance with relevant socialinsurance and housing provident fund laws and regulations; and

. the manager of the human resources department will report to Mr. Yi Ruofeng, ourexecutive Director and compliance officer, on legal and regulatory compliance andprovide improvement recommendations when required.

In view of the above, our Directors and the Sole Sponsor are of the view that (i) our Group’sinternal control measures are adequate and effective under Rule 6A.15(5) of the GEM ListingRules; (ii) our Directors meet the suitability requirements under Rule 5.01 and 5.2 of the GEMListing Rules; and (iii) our Group is suitable for listing under Rule 11.06 of the GEM ListingRules.

Risk management measures

We are exposed to various risks in the operations of our business and we believe that riskmanagement is important to our success. Key operational risks faced by us include, among others,changes in general property market conditions, changes in the regulatory environment in the PRCreal estate industry, our ability to retain employees, our potential expansion in the secondarymarket real estate agency services, availability of financing to fund our expansion and business

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operations and competition from other property agency service providers that offer similar types ofservices and have similar scale. See ‘‘Risk Factors’’ in this prospectus for disclosures on variousrisks we face. In addition, we also face different market risks, such as currency, credit andliquidity risks that arise in the normal course of our business. For a discussion on these financialrisks, see ‘‘Financial Information — Qualitative and Quantitative Disclosures about FinancialRisk’’.

To properly manage these risks, we have devised a comprehensive risk management systemto monitor the possible risks that we may encounter in our operations. Through our riskmanagement system, we seek to minimize and prevent losses that the risks may cause to ourbusiness. Our Board is responsible for overseeing our overall risk management system and isresponsible for considering, reviewing and approving risk assessment reports prepared annually bythe audit management centre, which is responsible for monitoring our Group’s exposure to risks,and preparing corresponding risk management measures from time to time. The Chief ExecutiveOfficer’s office is also responsible for holding meetings on a half-yearly basis to discuss the latestmarket risks, and to make recommendations to the audit management centre to facilitate itspreparation of the risk assessment report. We also maintain insurance coverage, which we believeis in line with customary practice in the PRC real estate agency services industry.

We have also established corporate governance measures in safeguarding the interests of ourShareholders and enhancing Shareholders’ value. For details of the corporate governance measures,see ‘‘Relationship with our Controlling Shareholders — Corporate Governance Measures’’.

We derive substantially all of our revenue and profits from our PRC subsidiaries. Our PRCsubsidiaries’ ability to distribute profits to us may be subject to restrictions if our Shareholderswho are PRC residents fail to comply with the relevant PRC foreign exchange regulations,including registration with SAFE regarding their investment in our Company or filing an update totheir registration with SAFE when we undergo a change of basic information or a material changesuch as mergers or divisions, or when there is a change in their investment amount or sharetransfer. For details of the risks involved, see ‘‘Risk Factors — Risks Relating to Doing Businessin the PRC’’. Although we may not be fully informed of the identities of all of our Shareholderswho are PRC residents, and we may not be able to compel them to comply with the relevantrequirements, we have implemented the following measures to mitigate the associated risks:

(i) a notice will be included on our Company’s website warning potential investors aboutthe relevant registration requirements;

(ii) we request our share registrar to provide us with an update of our register of memberson a regular basis to enable us to identify the Shareholders who may be PRC residents;

(iii) based on the information obtained above, we will contact the Shareholders who webelieve are PRC residents, remind them regarding their obligations under the relevantregulations and seek confirmation that they have complied with the relevant registrationrequirements; and

BUSINESS

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(iv) if we conduct any corporate actions or are aware of any circumstances which willtrigger an obligation on those Shareholders who are required to make a filing to SAFE,we will inform those Shareholders and urge them to comply with the relevantrequirements.

BUSINESS

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OVERVIEW

We have entered into the following transactions with parties who will, upon Listing, becomeour connected person (as defined under Chapter 20 of the GEM Listing Rules), and suchtransactions are expected to continue after the Listing Date. As such, upon Listing, thesetransactions will constitute continuing connected transactions of the Company under Chapter 20 ofthe GEM Listing Rules which include (i) continuing connected transactions subject to thereporting, announcement, circular and independent shareholders’ approval requirements; and (ii)continuing connected transactions exempt from the reporting, annual review, announcement andindependent shareholders’ approval requirements.

CONNECTED PERSONS

Following the Listing, the following parties, which have entered into the followingtransactions with our Group, will be connected persons of our Group:

— Mr. Fong: Mr. Fong is one of our Controlling Shareholders and a non-executive Directorof our Company and will therefore be a connected person of our Company upon Listing.

— Ms. Tse: Ms. Tse is one of our Controlling Shareholders and an executive Director ofour Company and will therefore be a connected person of our Company upon Listing.

— Ms. Zheng Xin (鄭欣) (‘‘Ms. Zheng’’): Ms. Zheng is the daughter of Ms. Tse.Therefore, Ms. Zheng will be an associate of Ms. Tse and thereby a connected person ofour Company upon Listing.

— Fineland Real Estate: Fineland Real Estate is one of our Controlling Shareholders andwill therefore be a connected person upon Listing.

— Members of the Fineland Group: As Fineland Real Estate is one of our ControllingShareholders, members of the Fineland Group (other than members of our Group) willbe our connected persons upon Listing.

— GZ Fineland Property Management: GZ Fineland Property Management is a member ofthe Fineland Group. As such, GZ Fineland Property Management will be our connectedperson upon Listing.

CONNECTED TRANSACTIONS

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CONTINUING CONNECTED TRANSACTIONS FULLY EXEMPT FROM THEREPORTING, ANNUAL REVIEW, ANNOUNCEMENT AND INDEPENDENTSHAREHOLDERS’ APPROVAL REQUIREMENTS

Trademark License Agreements

On 11 October 2017, Fineland Real Estate (as the licensor) and our Company (as thelicensee) entered into trademark license agreements (the ‘‘Trademark License Agreements’’),pursuant to which Fineland Real Estate agreed to grant to our Group an exclusive license to usecertain trademarks registered by Fineland Real Estate in Hong Kong and the PRC (the ‘‘LicensedTrademarks’’) at nil consideration. For details of the Licensed Trademarks, see ‘‘Appendix IV —

B. Further Information about the Business of our Group — 2. Summary of intellectual propertyrights of our Group’’.

The term of the Trademark License Agreements commences on the date thereof until theexpiration date of the Licensed Trademarks, which in effect can be considered as a perpetual termas (i) pursuant to the Trademark License Agreements, Fineland Real Estate unconditionally andirrevocably undertakes to apply for the renewal of the registrations of the Trademarks prior to theirrespective expiration dates and (ii) under the relevant laws and regulations in Hong Kong and thePRC, there are no limitations to the number of times a registration of trademark can be renewed.The Trademark License Agreements includes irrevocable provisions on the part of Fineland RealEstate and therefore, Fineland Real Estate cannot terminate the rights granted in our favour underthe Trademark License Agreements without our prior written consent.

We have been using the Licensed Trademarks in the business of our Group over the years inrelation to the services which are marketed and provided by our Group. We intend to continue touse, after the Listing, the Licensed Trademarks in such connection. The Sole Sponsor and ourDirectors are of the view that entering into the Trademark License Agreements for a period longerthan three years is a normal business practice for agreements of this type and beneficial to ourShareholders as a whole as (i) the Licensed Trademarks have benefitted our Group from the well-recognised ‘‘Fineland’’ brand, which aligns with our brand image and/or promotes our services and(ii) a longer duration of the license term will promote stability in our operations.

Historical transaction amounts

We have not paid any fees in connection with the aforesaid trademark licensing during theTrack Record Period and accordingly no fees shall be paid in the same respect.

GEM Listing Rules requirements

As no consideration is payable by us in respect of the Trademark License Agreements andour Directors (including the independent non-executive Directors) are of the opinion that theTrademark License Agreements are on normal commercial terms or better, the transactionscontemplated thereunder constitute de minimis continuing connected transactions, which areexempted from the reporting, annual review, announcement and independent shareholders’approval requirements under Chapter 20 of the GEM Listing Rules.


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Tianhe Office Tenancy Agreements

During the Track Record Period, we leased our office premises located at Unit 701, No.28Tiyu East Road, Tianhe District, Guangzhou, PRC (the ‘‘Tianhe Office Premises’’) from GZFineland Property Management and we intend to continue leasing the Tianhe Office Premises uponListing.

On 1 January 2017, GZ Fineland Property Management (as the landlord) entered into tenancyagreements with Fang Yuan Bao and Guangzhou Fineland Property Consultancy (as the tenants),respectively (the ‘‘Tianhe Office Tenancy Agreements’’), which were amended by supplementalagreements dated 29 March 2017 (the ‘‘Tianhe Office Supplemental Agreements’’). Pursuant tothe Tianhe Office Tenancy Agreements, GZ Fineland Property Management agreed to lease certainportions of the Tianhe Office Premises with an aggregate floor area of approximately 147.8 squaremeters and 978.2 square meters to Fang Yuan Bao and Guangzhou Fineland Property Consultancyfor use as offices, respectively. The term of the each of the Tianhe Office Tenancy Agreementscommences from 1 January 2017 and ends on 31 December 2017. The rental payable by FangYuan Bao and Guangzhou Fineland Property Consultancy under the Tianhe Office TenancyAgreements (as amended and supplemented by the Tianhe Office Supplemental Agreements) isRMB19,214.0 and RMB127,160.8 per month, respectively.

The above-mentioned rental rates were determined after arm’s length negotiations anddetermined with reference to the prevailing market rates, namely the rental payable for similarproperties to be leased from Independent Third Parties at similar location. DTZ C&W, our industryconsultant, has reviewed the Tianhe office Tenancy Agreements (as amended supplemented by theTianhe office Supplemental Agreements) and confirmed that the terms therein are fair andreasonable and on normal commercial terms and reflects the prevailing market rates of comparableproperties in similar location.

Our Directors consider that the transactions contemplated under the Tianhe Office TenancyAgreements are on normal commercial terms which are fair and reasonable and the entering into ofthe Tianhe Office Tenancy Agreements is in the ordinary and usual course of business of ourGroup and in the interests of our Company and our Shareholders as a whole.


The historical figures for the two years ended 31 December 2016 and the four months ended30 April 2017 incurred by our Group in relation to the renting of the Tianhe Office Premises wereapproximately RMB1.5 million, RMB1.6 million, and RMB0.5 million, respectively.


As all of the applicable percentage ratios in respect of the annual rent payable by the Groupunder the Tianhe Office Tenancy Agreements (as amended and supplemented by the supplementalAgreements) are less than 5% and the total annual consideration is less than HK$3.0 million, thetransactions contemplated thereunder constitute de minimis continuing connected transactions,which are exempted from the reporting, annual review, announcement and independentshareholders’ approval requirements under Chapter 20 of the GEM Listing Rules.


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Baiyun Outlet Tenancy Agreements

On 1 January 2015, Ms. Tse and Ms. Zheng (as the landlords) entered into tenancyagreements with Guangzhou Fineland Property Consultancy (as the tenant) (the ‘‘Baiyun OutletTenancy Agreements’’), which were amended by supplemental agreements dated 29 March 2017(the ‘‘Baiyun Outlet Supplemental Agreements’’). Pursuant to the Baiyun Outlet TenancyAgreements, Ms. Tse agreed to lease the premises located at Unit 06, LG1, Cao Nuan Ge,Jinguiyuan, 1000 Jiefang North Road, Baiyun District, Guangzhou, the PRC* (中國廣州白雲區解

放北路1000號金桂園草暖閣負一層06號鋪) (the ‘‘First Baiyun Outlet’’) with an aggregate floorarea of approximately 75.9 square meters, and Ms. Zheng agreed to lease the premises located at1/F, Ying Yueju, Baiyun Golf Garden,118 Huangshi East Road, Baiyun District, the PRC* (中國廣

州白雲區黃石東路118號白雲高爾夫花園盈月居首層商鋪) (the ‘‘Second Baiyun Outlet’’) with anaggregate floor area of approximately 52.5 square meters, to Guangzhou Fineland PropertyConsultancy for use as outlets, respectively.

The term of the each of the Baiyun Outlet Tenancy Agreements commences from 1 January2015 and ends on 31 December 2020. Set down below is the rental payable by GuangzhouFineland Property Consultancy to Ms. Tse and Ms. Zheng, respectively, under the Baiyun OutletTenancy Agreements (as amended and supplemented by the Baiyun Outlet SupplementalAgreements) from 1 January 2015 to 31 December 2020:

Rental period

Rental payable

to Ms. Tse

per month

Rental payable

to Ms. Zheng

per month

(RMB) (RMB)

1 January 2015 to 31 December 2015 19,723.6 18,109.05






The above-mentioned rental rates were determined after arm’s length negotiations anddetermined with reference to the prevailing market rates, namely the rental payable for similarproperties to be leased from Independent Third Parties at similar location. DTZ C&W, our industryconsultant, has reviewed the Baiyun Outlet Tenancy Agreements (as amended and supplementedby the Baiyun Outlet supplemental Agreements) and confirmed that the terms are fair andreasonable and on normal commercial terms and reflects the prevailing market rates of comparableproperties in similar location.

The Sole Sponsor and our Directors are of the view that entering into the Baiyun OutletTenancy Agreements for a period longer than three years is a normal business practice andbeneficial to our Shareholders as a whole as a longer duration of the rental period will promotestability in our operations.


– 138 –


The historical figures for the two years ended 31 December 2016 and the four months ended30 April 2017 incurred by our Group in relation to the renting of each of the First Baiyun Outletand the Second Baiyun Outlet were approximately RMB0.2 million, RMB0.2 million, and RMB0.1million, respectively.


As all of the applicable percentage ratios in respect of the annual rent payable by the Groupunder the Baiyun Outlet Tenancy Agreements (as amended and supplemented by the Baiyun OutletSupplemental Agreements) are less than 5% and the total annual consideration is less than HK$3.0million, the transactions contemplated thereunder constitute de minimis continuing connectedtransactions, which are exempted from the reporting, annual review, announcement andindependent shareholders’ approval requirements under Chapter 20 of the GEM Listing Rules.

CONTINUING CONNECTED TRANSACTIONS SUBJECT TO THE REPORTING,ANNOUNCEMENT, CIRCULAR AND INDEPENDENT SHAREHOLDERS’ APPROVALREQUIREMENTS

Master Agency Service Agreement

Nature of and reasons for the transactions

We are a property consultancy and agency company in Guangzhou, the PRC, and we havethree main service segments, namely (i) property research and consultancy services, (ii)comprehensive real estate agency services in the primary and secondary property market, and (iii)integrated business services. The Fineland Group principally develops properties. In their ordinarycourse of business, the Fineland Group receives our Group’s comprehensive real estate agencyservices in the primary property market, including the formulation of pre-sales marketingstrategies, the promotion of primary properties to prospective purchasers and tenants, and theprovision of related customer services. As our Group understands the business needs of theFineland Group, it is expected that our Group will, after the Listing, in its ordinary course ofbusiness, continue to provide such services to the Fineland Group.

Description of the transactions

On 11 October 2017, our Company (for itself and on behalf of its subsidiaries, as serviceproviders) and Fineland Real Estate (for itself and on behalf of its subsidiaries, as the receivingparties) entered into a master agency service agreement (the ‘‘Master Agency ServiceAgreement’’), pursuant to which our Group agreed to provide real estate agency services in theprimary property market to members of the Fineland Group for a term commencing from the datethereof to 31 December 2019.


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Pursuant to the Master Agency Service Agreement, the services our Group will provide tomembers of the Fineland Group include:

(i) pre-sales marketing services — including (a) formulating the overall sales andmarketing strategies; (b) overseeing the preparation of marketing materials such aspromotional leaflets and letter of intent to purchase real estate; and (c) providing regularreports in relation to the market conditions and the corresponding sales and marketingstrategies;

(ii) sales agency services — including (a) conducting on-site promotion and distributing thepromotional materials to prospective purchasers; and (b) entering into sale and purchaseagreements for and on behalf of members of the Fineland Group in respect of the sale ofprimary properties;

(iii) leasing agency services — including (a) conducting relevant market research andanalysis and formulating the corresponding marketing strategies; (b) preparingmarketing materials; (c) promoting the properties to prospective tenants; and (d)assisting in the negotiation of leasing terms and conditions with prospective tenants; and

(iv) integrated services — including providing customer services to the purchasers such asassisting the purchasers with obtaining the relevant ownership certificates and applyingfor mortgages from banks.

With respect to each project, the relevant members of our Group and the Fineland Group willfurther enter into individual agreement(s) that prescribe specific terms and conditions of eachproject, including our scope of service, consideration, length of services and service fees.


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Pricing policy

The services provided by our Group to members of the Fineland Group are also offered toother Independent Third Parties. To ensure that the fees received by us are no less favourable thanthose available from Independent Third Parties, the fees payable to our Group shall be determinedby our Group and the Fineland Group on arm’s length basis. The pricing policy applicable to thecontinuing connected transactions contemplated under the Master Agency Service Agreement issimilar to that applicable to similar services rendered to Independent Third Parties. Such pricingpolicy is explained in greater details below:

Pricing policy

Pre-Sale

marketing

services

Sale agency

services

Leasing

agency

services

Integrated

Services

Factors to be considered for different types of services:

Scale and location of the projects and the

required level of resources and time costs

involved for providing such services √ √ √ √

Gross floor area of the properties for sale/

rent and the expected gross transaction

amount of the properties for sale/

expected monthly rent of the properties

for rent x √ √ x

Historical costs of services and the fees

received by us in providing similar

services to members of the Fineland

Group √ √ √ √

Fees received by us for providing services

of a similar scale and quality to

Independent Third Party customers,

taking into account not less than two

transactions entered into with such

customers √ √ √ √


For each of the years ended 31 December 2015 and 2016, and the four months ended 30April 2017, the Fineland Group launched for sale 13, 13, and 11 projects (representingapproximately 315,000 sq.m., 287,000 sq.m., and 135,000 sq.m. of GFA sold) respectively. OurGroup was engaged by the Fineland Group for the provision of real estate agency services in theprimary property market for 10, 11, and 9 projects respectively. During the Track Record Period,the total fees charged by our Group in relation to the provision of services to the Fineland Groupamounted to approximately RMB52.5 million, RMB44.6 million, and RMB22.3 million,respectively, representing approximately 58.3%, 42.0%, and 51.4% of our total revenue,


– 141 –

respectively. Based on the unaudited financial information of our Group, the revenue generatedfrom the Fineland Group amounted to approximately RMB39.0 million, or approximately 41.7% ofour total revenue, for the eight months ended 31 August 2017.

Proposed annual caps on future transaction amounts

The demand for our Group’s services from the Fineland Group for each year is subject to (i)the number of projects the Fineland Group launches for sale; (ii) the respective GFA of theprojects the Fineland Group launches for sale; and (iii) the public demand for such projects.

Our Directors estimate that the maximum annual fees charged by our Group in relation to theservices to be provided under the Master Agency Service Agreement for each of the three yearsending 31 December 2019 will not exceed RMB48.0 million, RMB53.0 million and RMB59.0million, respectively, representing a 10.4% and 11.3% year-on-year increase for 2017 to 2018 and2018 to 2019, respectively.

In arriving at the proposed annual caps, our Directors have considered (i) the historicaltransaction amount between the Fineland Group and our Group; (ii) the historical sales amount ofthe Fineland Group; (iii) the historical average commission rate charged by us; and (iv) theexpected increase in sales amount of the properties developed and launched for sale by theFineland Group for the years ending 31 December 2017, 2018, and 2019 resulting in the possibleincrease in demand of our services.

The proposed annual caps increase year-on-year during 2017 to 2019, which is primarilyattributable to the possible increase in demand for our services due to the expected increase insales amounts of the properties developed by the Fineland Group. To the best knowledge of theDirectors, the Fineland Group currently plans to launch for sale 11, 16, and 17 projects in 2017,2018, and 2019 (representing approximately 301,000 sq.m., 363,000 sq.m., and 389,000 sq.m. ofGFA), respectively. In addition, the Fineland Group has obtained land use rights certificates orentered into land transfer agreements for land amounting to approximately 1.8 million sq.m. ofGFA. Taking into account the land reserves and the development and sales plan of the FinelandGroup for the years up to 2019, our Directors believe that the demand for our services by theFineland Group would increase from 2017 to 2019 and the transaction amount under the MasterAgency Service Agreement will in turn increase year-on-year during the corresponding periods.Our Directors also believe that the listing status of our Group upon the Listing will enhance ourmarket presence and our competitiveness and in turn attract further demand for our services fromthe Fineland Group. In addition, the proposed annual caps are set to accommodate the potentialhighest level of business transactions to be conducted with the Fineland Group and, accordingly, abuffer for the estimated transaction amount under the Master Agency Service Agreement has beenincluded to accommodate any unexpected increase in such amount (for example, when there is anunexpected increase in market demand for the properties developed by the Fineland Group or anunexpected increase in the cost of provision of services as contemplated under the Master AgencyService Agreement). Based on the above reasons, the Directors believe, and the Sole Sponsorconcurs, that the proposed annual caps and its year-on-year increase from 2017 to 2019, rangingfrom approximately 10.4% to 11.3%, is fair, reasonable, and justified.


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Nevertheless, our Directors expect that the percentage of revenue generated from the FinelandGroup will decrease year-on-year during the corresponding periods as our Group will continue toexpand our customer base by, among others, (i) capturing the potential growth in sales ofsecondary properties and capitalising on the higher commission rate available for secondary salesand (ii) developing our One-stop Service Centre business. For details, see ‘‘Business — OurBusiness Strategies’’. Our Directors are confident that an effective and efficient internal controlprocedures have been adopted to monitor the utilisation of the annual caps and the Group’sinterests will be safeguarded. Against such background, the proposed annual caps are set toaccommodate the highest level of business transactions to be conducted with the Fineland Group.


As one or more of the applicable percentage ratios (as defined under Chapter 19 of the GEMListing Rules) in respect of the proposed annual caps for the transactions contemplated under theMaster Agency Service Agreement is, on an annual basis, expected to be more than 5%, thetransactions contemplated under the Master Agency Service Agreement will, upon Listing, besubject to the annual review, reporting, announcement and independent shareholders’ approvalrequirements under Chapter 20 of the GEM Listing Rules.

APPLICATION FOR WAIVER

The non-exempt continuing connected transactions contemplated under the Master AgencyService Agreement are expected to continue on a recurring basis after the Listing. As the MasterAgency Service Agreement was entered into prior to the Listing Date and details of which havebeen fully disclosed in this prospectus and potential investors will participate in the Share Offer onthe basis of such disclosure, our Directors consider that it would be impractical, undulyburdensome and would add unnecessary administrative costs and workload for us to makedisclosure of the transactions in compliance with the requirements under Chapter 20 of the GEMListing Rules.

Accordingly, pursuant to Rule 20.103 of the GEM Listing Rules, we have applied to theStock Exchange for, and the Stock Exchange has granted, a waiver from strict compliance with theannouncement, circular and independent shareholders’ approval requirements under Chapter 20 ofthe GEM Listing Rules relating to the abovementioned non-exempt continuing connectedtransactions.

CONFIRMATION FROM OUR DIRECTORS

Our Directors (including our independent non-executive Directors) are of the view that thenon-exempt continuing connected transactions entered into during the Track Record Period and theMaster Agency Service Agreement have been and will be entered into in the ordinary and usualcourse of business of our Group, on normal commercial terms that are fair and reasonable and inthe interests of our Shareholders as a whole. The proposed annual caps disclosed above in respectof the non-exempt continuing connected transactions are also fair and reasonable and in theinterest of our Company and our Shareholders as a whole.


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CONFIRMATION FROM THE SOLE SPONSOR

The Sole Sponsor has reviewed the relevant documents, information and historical figuresprovided by our Group and has participated in the due diligence and discussions with themanagement teams and our PRC Legal Adviser in connection with the Listing. It has obtainednecessary representations and confirmations from our Company and our Directors. Based on theabove, the Sole Sponsor is of the view that the non-exempt continuing connected transactionsentered into during the Track Record Period and the Master Agency Service Agreement (includingthe relevant annual caps and pricing terms which form part of the terms of such transactions) havebeen and will be entered into in the ordinary and usual course of business of our Group, and areon normal commercial terms, fair and reasonable and in the interests of our Company and theShareholders as a whole.


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DIRECTORS

Our Board currently consists of eight Directors, comprising three executive Directors, onenon-executive Director and four independent non-executive Directors:

Name Age

Date ofappointmentas Director

Date ofjoining our

Group Roles and responsibilities

Relationshipwith otherDirectorsand seniormanagement

Executive Directors

Rong Haiming

(容海明)

40 16 February

2017

January 2016 Providing strategic plans and

general management of our

Group

none

Yi Ruofeng

(易若峰)

40 16 February

2017

January 2016 Overseeing the daily

operations, administrative, andfinance matters of our Group

none

Tse Lai Wa

(謝麗華)

61 16 February

2017

April 1997 Providing strategic plans and

overseeing matters relating to

our secondary market real

estate agency services

none

Non-executive Director

Fong Ming

(方明)

51 16 February

2017

March 1997 Providing strategic advice to

our Group

none


Leung Wai Hung

(梁偉雄)

50 23 October

2017

23 October

2017

Supervising and providing

independent judgement to our

Board

none

Liao Junping(廖俊平)

54 23 October2017

23 October2017

Supervising and providingindependent judgement to our

Board

none

Tian Qiusheng

(田秋生)

61 23 October

2017

23 October

2017



Board

none

Du Chenhua

(杜稱華)

48 23 October

2017

23 October

2017



Board

none

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

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Executive Directors

Ms. Rong Haiming (容海明), aged 40, is our chief executive officer and was appointed asour executive Director on 16 February 2017 and is primarily responsible for strategic planning andgeneral management of our Group.

In August 1999, Ms. Rong joined the Fineland Group as a deputy manager in the marketingand sales management department and was promoted to the manager and general manager of thesame department in January 2004 and May 2005 respectively. She stayed with the samedepartment until December 2009 and throughout such period she was mainly responsible forplanning of sales and marketing. In between December 2009 and June 2010, Ms. Rong was thegeneral manager of the commercial property management department of the Fineland Group andwas mainly responsible for property management. Ms. Rong was given the title of vice-presidentof the Fineland Group in June 2010 and subsequently the title of director of the Fineland Group inNovember 2014, and held such title until December 2015, throughout which she was mainlyresponsible for the strategic planning and general management of the Fineland Group. In January2016, Ms. Rong joined Guangzhou Fineland Property Consultancy as a general manager, beingprimarily responsible for providing strategic advice, overseeing the management andadministration of the company, and has held the same position since then. Mr. Rong is alsocurrently a director of Fineland Real Estate.

Ms. Rong obtained her bachelor’s degree in marketing from Sun Yat-Sen University in thePRC in June 1999 and her master’s degree in corporate management from the Sun Yat-SenUniversity in the PRC in December 2007.

Mr. Yi Ruofeng (易若峰), aged 40, was appointed as our executive Director on 16 February2017 and is primarily responsible for overseeing the daily operations, administration and financematters of our Group.

From July 1999 to April 2007, Mr. Yi worked at Guangdong Yangcheng Certified PublicAccountants Company Limited, his last position held was a business manager and was responsiblefor handling audit work. Mr. Yi joined the Fineland Group in April 2007 as the deputy generalmanager of the audit centre of the Fineland Group and was mainly responsible for handling auditwork. He was subsequently promoted to the position of deputy general manager of the regulatoryand audit monitoring control centre of the Fineland Group in June 2010, a position he held untilDecember 2015, and he was responsible for handling compliance and audit work of the company.In January 2016, Mr. Yi joined Guangzhou Fineland Property Consultancy as a deputy generalmanager, being primarily responsible for overseeing the daily operations, administration andfinance of the company.

Mr. Yi obtained his bachelor’s degree in Finance from Jinan University in the PRC in June1999. He has been a registered accountant of the Ministry of Finance of the PRC since December2002, obtained the Intermediate Accounting Certification from the Ministry of Finance of the PRCin May 2005 and was admitted as a registered accountant of CPA Australia in November 2015.


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Ms. Tse Lai Wa (謝麗華), aged 61, was appointed as an executive Director on 16 February2017. She joined our Group in April 1997 as a director of Guangzhou Fineland PropertyConsultancy, a position which she has been holding since then and has been responsible forproviding strategic plans and overseeing matters relating to our secondary market real estateagency services.

Prior to joining our Group, Ms. Tse worked as an administrative manager in NanfangHospital* (南方醫科大學南方醫院) from October 1976 to October 1992, primarily responsible fordaily administrative and logistics management. From March 1996 to March 1997, Ms. Tse workedas a manager of the Fineland Group, and was mainly responsible for administrative work.

Ms. Tse completed an intensive course on executive masters in business administration fromthe Hong Kong Sino-Australia Management College in June 2001.

Non-Executive Director

Mr. Fong Ming (方明), aged 51, is our chairman and was appointed as our non-executiveDirector on 16 February 2017. He is one of the founders of our Group and one of our ControllingShareholders. Mr. Fong is primarily responsible for providing strategic advice to our Group.

Mr. Fong has approximately 20 years of experience in property development, propertyconsultancy and business management. He was the chairman and general manager of GuangzhouFineland Enterprises Company Limited* (廣州方圓企業有限公司) and Guangzhou Fineland RealEstate Development Company Limited* (廣州市方圓房地產發展有限公司) from 1994 to 1997, inwhich he was primarily responsible for overseeing the management of the companies . He was alsothe chairman and president of Guangdong Fineland Group Co., Ltd* (廣東方圓集團有限公司)from 1997 to 2006 in which he was primarily responsible for overseeing the operations of thecompany. Since 2006, he has been the chairman and the president of the Fineland Group and hasbeen primarily responsible for making investment decisions, providing overall strategic planningand supervising property development projects of the Fineland Group.

Mr. Fong obtained his bachelor’s degree in law from the Sun Yat-Sen University in the PRCin July 1987 and was qualified as a lawyer by Department of Justice in the Guangdong Province inApril 2007.


Mr. Leung Wai Hung (梁偉雄), aged 50, was appointed as our independent non-executiveDirector on 23 October 2017 and is primarily responsible for supervising and providingindependent judgement to our Board. Mr. Leung is also the chairman of our audit committee anda member of our remuneration committee.

Mr. Leung has over 20 years of experience in accounting and finance and working asexecutives for listed companies mainly engaged in property development. From August 1989 toSeptember 1992, Mr. Leung worked at Protech Property Management Limited and his last positionheld was accountant. From October 1992 to May 1994, Mr. Leung worked as an accountant inSeapower Consortium Company Limited, a wholly-owned subsidiary of a company listed on theStock Exchange. From May 1994 to June 2005, he worked as an accountant in Cheung Kong


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(Holdings) Limited (now known as CK Hutchison Holdings Limited), a company listed on theMain Board (stock code: 001), where he was primarily responsible for accounting works. FromSeptember 2005 to September 2006, Mr. Leung worked as a finance manager in ARA AssetManagement (Prosperity) Limited, the manager of Prosperity Real Estate Investment Trust, whichis listed on the Stock Exchange (stock code: 808), and was primarily responsible for handling thelisting, accounting and finance matters of the company. In between December 2006 and December2010, Mr. Leung worked at Fineland Real Estate and last served as a vice president and the chieffinancial officer where he was primarily responsible for accounting, finances and compliancematter of the Company. In between February 2011 and July 2012, Mr. Leung worked as a financedirector of ARA Asset Management (Fortune) Limited, the manager of Fortune Real EstateInvestment Trust, which is listed on the Stock Exchange (stock code: 778) and the Stock Exchangeof Singapore, where he was primarily responsible for overseeing the functions on all accounting,finance and treasury matters. Since January 2013, Mr. Leung has been the financial controller ofShougang Concord International Enterprises Company Limited, a company listed on the MainBoard (stock code: 697), primarily responsible for handling finance matters. Since 22 September2017, Mr. Leung has been an independent non-executive director of Beaver Group (Holding)Company Limited, a company listed on GEM (stock code: 8275).

Mr. Leung obtained his bachelor’s degree in business administration from the ChineseUniversity of Hong Kong in December 1989. He has been a fellow member of Association ofChartered Certified Accountants since May 1999 and a member of the Certified Public Accountantof Hong Kong Institute of Certified Public Accountants since February 1996.

Dr. Liao Junping (廖俊平), aged 54, was appointed as our independent non-executiveDirector on 23 October 2017 and is primarily responsible for supervising and providingindependent judgement to our Board. Mr. Liao is also a member of our nomination committee.

Dr. Liao has more than 33 years of experiences in providing property-related tertiaryeducation. From July 1983 to November 1984, Dr. Liao was a supervision engineer in theinfrastructure department of Wuhan Urban Construction Institute* (武漢城市建設學院) and wasresponsible for overseeing building projects. From December 1984 to October 1992, Dr. Liao wasa teacher in the urban management department of Wuhan Urban Construction Institute andparticipated in founding the urban management and real estate management tertiary educationcourses of the institute. From October 1992 to May 1995, Dr. Liao was a lecturer in theconstruction management department of Wuhan Urban Construction Institute. From May 1995 toApril 1998, Dr. Liao was a lecturer and then associate professor of the property operations andmanagement courses in the department of economics in Lingnan (University) College, Sun Yat-SenUniversity* (中山大學嶺南學院). From April 1998 to January 2002, Dr. Liao was an associateprofessor and deputy head of the business management department of Lingnan (University)College, Sun Yat-Sen University. Since January 2002, Dr. Liao has been serving as an associateprofessor and afterward, a professor in the business management department of Lingnan(University) College, Sun Yat-Sen University. He is also currently the director of the Centre ofReal Estate Studies in Lingnan (University) College, Sun Yat-Sen University.


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Dr. Liao is also currently the vice-president of the China Institute of Real Estate Appraisersand Agents* (中國房地產估價師與房地產經紀人學會), the founding member of the ChinaAssociation of Real Estate Academicians* (中國高等院校房地產學者聯誼會), the foundingpresident of the Guangzhou Association of Real Estate Agents* (廣州市房地產中介協會), thefounding member of the council of directors of the Global Chinese Real Estate Congress* (世界華

人不動產學會), the chairman of the Sun Yat-Sen University Branch of China Democratic NationalConstruction Association* (民建中山大學支部), a member of the National Property Developmentand Management for Tertiary Education Institutes Committee (全國高等學校房地產開發與管理和

物業管理學科專業指導委員會), and a member of the Eleventh Guangdong Provincial Committeeof the Chinese People’s Political Consultative Conference. Dr. Liao had previously served as thepresident of the Guangzhou Real Estate Appraisal Association* (廣州市房地產評估專業人員協會)in between 2004 and 2010.

Dr. Liao obtained his bachelor’s degree in civil engineering from Zhejiang University* (浙江

大學) in 1983, his master’s degree in engineering management from Tongji University in July1989, and his doctorate degree in world economics from Lingnan (University) College, Sun Yat-Sen University in June 2007. Dr. Liao was certified as a national property valuer in September1994.

Mr. Tian Qiusheng (田秋生), aged 61, was appointed as our independent non-executivedirector on 23 October 2017 and is primarily responsible for supervising and providingindependent judgement to our Board. Mr. Tian is also the chairman of our remunerationcommittee and a member of our audit committee and nomination committee.

Mr. Tian has more than 24 years of experiences in providing business and finance relatedtertiary education. From July 1982 to July 2005, Mr. Tian held different positions in the businessand business administration department of Lanzhou University, including being the deputy head ofthe department. Since July 2005, Mr. Tian has held various positions in South China University ofTechnology, including being the deputy head of the economics and trade department, the generalmanager of the finance department, and the director of the regional business research centre of theuniversity.

Mr. Tian is also currently a member of the Guangdong Chinese People’s PoliticalConsultative Conference and its economics committee, a consultant to the Guangdong ProvinceGovernment, a committee member of the Guangdong Province Government Strategy ConsultantBranch* (廣東省人民政府決策諮詢顧問), a member of the professional consultant committee ofthe Guangdong Province Market Regulation Society* (廣東省市場監管體系建設工作專家諮詢委

員會), a committee member of the National Self-Learning Tertiary Education Exam DirectionBoard* (全國高等教育自學考試指導委員會), a researcher and committee member of theGuangdong Industrial Finance Research Centre* (廣東產業金融研究院) and Guangdong ProvinceSociety Research Centre* (廣東省省情調查研究中心), a researcher of the Guangdong ProvinceReform and Development Research Centre* (廣東省綜合改革發展研究院), a consultant of theDongguan Songshanhu National Technology Industrial Development Zone* (東莞松山湖國家高新

技術產業開發區), a member of the academia committee of the Shenzhen University ChinaEconomy Research Centre* (深圳大學中國經濟特區研究中心), a member of the academiacommittee of the Guangdong Finance Society* (廣東省金融學會), a counsellor of the Chinese


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Consumer Economics Society* (中國消費經濟學會), a general manager of the GuangdongProvince Pricing Association* (廣東省價格協會), and the general counsel of the ChinaInternational Finance Society.

Mr. Tian is also currently an independent non-executive director of Wanlian Securities SharesLimited* (萬聯證券股份有限公司) and Zhuhai Port Holdings Group Limited, a company listed onthe Shenzhen Stock Exchange (stock code: 507).

Mr. Tian obtained his bachelor’s degree in Economics from the Lanzhou University in June1982 and his doctorate degree in Economics from the Northwest University in the PRC* (西北大

學) in June 2001.

Mr. Du Chenhua (杜稱華), aged 48, was appointed as our independent non-executiveDirector on 23 October 2017 and is primarily responsible for supervising and providingindependent judgement to our Board. Mr. Du is also a member of our audit committee.

Previously, from February 1997 to December 2003, Mr. Du was the manager of the legaldepartment of Guangdong Guangkong Group Limited* (廣東廣控集團有限公司) which was then awholly-owned subsidiary of China Guangfa Bank. From January 2004 to December 2014, Mr. Duwas a senior partner of Guangdong Guardian Law Firm and was mainly responsible for providinglegal services. Since February 2015, Mr. Du has been a director of Guangdong Yingdu Law Firm*(廣東瀛杜律師事務所).

Mr. Du is currently the deputy general manager of the Guangzhou Law Society Civil LawCommittee* (廣州市法學會民法專業委員會), a manager of the Guangzhou Law Society DistressedAssets Committee* (廣州市律師協會不良資產專業委員會), a representative of the GuangdongProvince Lawyer’s Congress* (廣東省律師代表大會), and a committee member of the GuangzhouArbitration Commission.

Mr. Du obtained his bachelor’s degree in law from Wuhan Institute of Water Transportation*(武漢水運工程學院) in June 1992, his bachelor’s degree in finance from the Nanjing UniversityInternational Business School in July 1996, his master’s degree in law from Jinan University inJune 2002, and his doctorate degree in law from Wuhan University in December 2012. Mr. Du wasqualified as a lawyer by the Department of Justice in the Guangdong Province in April 2015.

Disclosure required under Rule 17.50(2) of the GEM Listing Rules

Save as disclosed in this section, each of our Directors confirms with respect to him/her that:(a) he/she has not held directorships in the last three years in other public companies the securitiesof which are listed on any securities market in Hong Kong or overseas; (b) he/she did not holdother positions in our Company or other members of our Group as at the Latest Practicable Date;(c) he/she did not have any relationship with any other Directors, senior management, substantialshareholder or Controlling Shareholder of our Company as at the Latest Practicable Date; (d) he/she does not have any interests in our Shares within the meaning of Part XV of the SFO, save asdisclosed in ‘‘Appendix IV — Statutory and General Information — C. Further Information aboutour Directors and substantial Shareholders — 1. Interests and short positions of Directors and thechief executives of our Company in the Shares, underlying Shares or debentures of our Companyand its associated corporations’’; (e) he/she does not have any interest in any business which


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competes or is likely to compete, directly or indirectly, with us, which is discloseable under GEMListing Rules; and (f) to the best of the knowledge, information and belief of our Directors havingmade all reasonable enquiries, there was no additional information relating to our Directors orsenior management that was required to be disclosed pursuant to Rule 17.50(2) of the GEMListing Rules and no other matter with respect to their appointments that needed to be brought tothe attention of our Shareholders as at the Latest Practicable Date.

SENIOR MANAGEMENT

The following table set forth the information concerning our senior management:

Name Age Position

Date of

appointment of

current

position

Date of joining

our Group

Roles and

responsibilities

Relationship

with others

Directors and

senior

management

Xu Peng (徐鵬) 37 deputy general

manager

January 2016 January 2016 Sales and

marketing of

properties

none

Zhu Xiaoming

(朱曉明)

32 deputy general

manager

January 2016 March 2012 Sales of primary

property projects

none

Deng Haozhi

(鄧浩志)

39 deputy general

manager

January 2016 March 2012 Sales of primary

property projects

none

Mr. Xu Peng (徐鵬), aged 37, joined our Group in January 2016 as a deputy generalmanager and is currently primarily responsible for the sales of first-hand property projects of ourGroup.

Prior to joining our Group, Mr. Xu was a sales director at Guangdong Nonghao GroupYantang Property Development Limited* (廣東農墾集團燕塘地產開發公司) in between July 2001and March 2007, and was primarily responsible for sales. In between March 2007 and May 2009,Mr. Xu was a deputy sales director at Guangzhou Qintian Property Group Limited* (廣州市勤天地

產集團有限公司), and was primarily responsible for sales. In between May 2009 and March 2010,Mr. Xu was a deputy general manager at Guangzhou Jiuru Real Estate Consultancy Limited* (廣州

九如房地產諮詢有限公司), and was responsible for providing real estate consultancy services. Inbetween March 2010 and March 2011, Mr. Xu was a project director at Guangzhou WorldUnionProperty Consultancy Company Limited* (廣州市世聯房地產咨詢有限公司), and was primarilyresponsible for sales. In between March 2011 and July 2011, Mr. Xu was a sales director at CineseGroup* (富盈地產集團), and was primarily responsible for sales. From August 2011 to December2015, Mr. Xu worked for the Fineland Group as a senior manager of the marketing department andwas mainly responsible for the sales and marketing of properties.


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Mr. Xu obtained his bachelor’s degree in real estate operations and management fromHuazhong University of Science and Technology in June 2001 and his master’s degree in law fromSun Yat-Sen University in June 2006.

Ms. Zhu Xiaoming (朱曉明), aged 32, joined our Group in March 2012 as a manager of theprimary property sales department of Guangzhou Fineland Property Consultancy and was primarilyresponsible for project management and sales, and was eventually promoted to be the deputygeneral manager of Guangzhou Fineland Property Consultancy in January 2016. Ms. Zhu iscurrently primarily responsible for the sales of primary property projects of our Group.

Prior to joining our Group, Ms. Zhu was a senior planning manager at Jingboheng PropertyConsultancy Limited* (景博行地產諮詢有限公司) in between January 2005 and March 2011, andwas primarily responsible for sales planning. In between April 2011 and March 2012, Ms. Zhuworked for Guangdong Chuanghong Investment Company Limited* (廣東創鴻投資有限公司) andGuangzhou Wanye Property Development Company Limited* (廣州萬業房地產開發有限公司),and was primarily responsible for sales planning.

Ms. Zhu completed a higher education course in journalism from Sun Yat-Sen University inJanuary 2013.

Mr. Deng Haozhi (鄧浩志), aged 39, has been a deputy general manager of our Group sincehe joined our Group in March 2012. Mr. Deng is primarily responsible for the sales of primaryproperty projects of our Group. Mr. Deng is also currently a deputy general manager ofGuangzhou Fineland Property Consultancy.

Prior to joining our Group, in between April 2001 and October 2001, Mr. Deng was amarketing manager at Guangzhou TianBiGao Property Consultancy Company Limited* (廣州天比

高物業顧問有限公司), primarily responsible for devising marketing strategies. In between October2001 and January 2004, Mr. Deng was a marketing manager at Guangzhou Dongxun Real EstateDevelopment Limited* (廣州市東迅房地產發展有限公司), and was responsible for marketing. Inbetween July 2004 and October 2005, Mr. Deng was a sales manager at Guangdong XinhengjiReal Estate Development Limited* (廣東新恒基房地產開發有限公司), and was responsible formarketing. In between November 2005 and July 2007, Mr. Deng was a strategy and promotionmanager at Guangzhou Lixun Investment Limited* (廣州力迅投資有限公司), and was responsiblefor sales. In between August 2007 and July 2010, Mr. Deng was a sales manager of ZhongtaiInternational Group Limited* (中泰國際集團), and was primarily responsible for sales. In betweenAugust 2010 and February 2012, Mr. Deng was a deputy general manager of Guangdong RuntaiInvestment Group Limited* (廣東潤鈦投資集團有限公司), and was primarily responsible forcorporate governance and sales.

Mr. Deng completed online higher education courses in finance and Chinese Literature fromPeking University in July 2004, and July 2007 respectively.

Mr. Xu Peng, Ms. Zhu Xiaoming and Mr. Deng Haozhi do not have any current or pastdirectorships in any listed companies in the three years immediately preceding the LatestPracticable Date.


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COMPANY SECRETARY

Mr. Tso Ping Cheong, Brian (曹炳昌), aged 36, was appointed as the company secretary ofour Company on 21 March 2017.

Mr. Tso has more than 13 years of experiences in accounting. From September 2003 toDecember 2008, he worked at Ernst & Young and the last position he held was manager. FromDecember 2008 to May 2010, Mr. Tso served as the financial controller of Greenheart GroupLimited (formerly known as Omnicorp Limited), a company listed on the Stock Exchange (stockcode: 94). From May 2010 to August 2012, Mr. Tso was a senior vice president of a privatecompany and was mainly responsible for handling merger and acquisition transactions in thenatural resources industry in the Central and South America region. In January 2013, Mr. Tsofounded Teton CPA Company, an accounting firm as a sole proprietor.

Mr. Tso has been serving as an independent non-executive director of GreaterchinaProfessional Services Limited, a company listed on the Stock Exchange (stock code: 8193) sinceJuly 2014, Larry Jewellery International Company Limited, a company listed on the StockExchange (stock code: 8351) since October 2014, Newtree Group Holdings Limited, a companylisted on the Stock Exchange (stock code: 1323) since February 2015 and Guru Online (Holdings)Limited, a company listed on the Stock Exchange (stock code: 8121) since May 2015,respectively. Mr. Tso has also been serving as a company secretary of China InfrastructureInvestment Limited, a company listed on the Stock Exchange (stock code: 600) since March 2015and a joint company secretary of China Yu Tian Holdings Limited, a company listed on the StockExchange (stock code: 8230) since January 2014, respectively. From July 2014 to February 2015,Mr. Tso served as a non-executive director of Kong Shum Union Property Management (Holdings)Limited, a company listed on the Stock Exchange (stock code: 8181).

Mr. Tso obtained his bachelor’s degree in accountancy in November 2003 and master’sdegree in corporate governance in October 2013, both from the Hong Kong PolytechnicUniversity. Mr. Tso has been a member and a fellow of the Hong Kong Institute of CertifiedPublic Accountants since September 2008 and October 2015, respectively, a fellow of theAssociation of Chartered Certified Accountants since October 2011, an associate and fellow of TheHong Kong Institute of Chartered Secretaries since January 2014 and November 2015 respectively,an associate and fellow of The Institute of Chartered Secretaries and Administrators since January2014 and November 2015, respectively.

While Mr. Tso is the independent non-executive director of four other listed companies andthe company secretary of two other listed companies, Mr. Tso is supported by a team of corporatesecretarial personnel led by him in carrying out his duties. Including himself, Mr. Tso’s teamcomprises two chartered secretaries, two chartered accountants and five supporting staff. UnderMr. Tso’s supervision, Mr. Tso’s team has assisted Mr. Tso in preparing regular statutory filingsand reviewing relevant announcements and financial reports to ensure compliance with the ListingRules and the GEM Listing Rules.


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In addition, Mr. Tso has gained extensive experience during his tenure as independent non-executive directors and company secretaries of other listed companies. In particular, Mr. Tso isresponsible for providing advice from corporate governance and company secretarial perspectivesto the board of directors of such listed companies to ensure their compliance with the applicablelaws and regulations as and when necessary.

Mr. Tso has undertaken to review from time to time the amount of resources available to himto ensure he receives adequate professional support to enable him to perform his duties ascompany secretary of the Group and to strengthen his supporting team (including hiring additionalstaff) as and when necessary.

Based on (i) Mr. Tso’s qualifications and experience in the company secretarial professionand (ii) the company secretarial resources available to him, the Directors are of the view that Mr.Tso has sufficient time, resources and capacity to act as the Group’s company secretary and toproperly discharge his duties thereof after the Listing.

BOARD COMMITTEES

Audit Committee

Our Company has established an audit committee on 23 October 2017 with written terms ofreference in compliance with Rules 5.28 of the GEM Listing Rules. The primary duties of theaudit committee are, among other things, to review and supervise the financial reporting processand internal control system of the Group. The audit committee has three members comprising Mr.Leung Wai Hung, Mr. Tian Qiusheng and Mr. Du Chenhua, of whom Mr. Leung Wai Hung hasbeen appointed as the chairman of the audit committee.

Remuneration Committee

Our Company has established a remuneration committee on 23 October 2017 with writtenterms of reference in compliance with Rules 5.34 of the GEM Listing Rules. The remunerationcommittee has three members comprising Mr. Yi Ruofeng, Mr. Leung Wai Hung and Mr. TianQiusheng, of whom Mr. Tian Qiusheng has been appointed as the chairman of the remunerationcommittee. The primary duties of the remuneration committee are, amongst other things, to reviewand determine the terms of remuneration packages, bonuses and other compensation payable to theDirectors and senior management and to make recommendation to the Board on the Group’s policyand structure for all remuneration of the Directors and senior management.

Nomination Committee

Our Company has established a nomination committee on 23 October 2017 with written termsof reference in compliance with the Corporate Governance Code in Appendix 15 to the GEMListing Rules. The nomination committee has three members comprising Ms. Rong Haiming, Mr.Liao Junping and Mr. Tian Qiusheng, of whom Ms. Rong Haiming has been appointed as thechairman of the nomination committee. The nomination committee is mainly responsible forreviewing the structure, size, composition and diversity of the Board and make recommendationsto the Board on the appointment of our Directors and management of Board succession.


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COMPLIANCE OFFICER

Mr. Yi Ruofeng was appointed as the compliance officer pursuant to the requirements underRule 5.19 of the GEM Listing Rules of our Company on 16 March 2017. Please refer to theparagraph headed ‘‘Executive Directors’’ of this section for details of the qualification andexperience of Mr. Yi Ruofeng.

REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT

During the two financial years ended 31 December 2016 and the four months ended 30 April2017, total remuneration (including salaries and bonus, allowances, and pension costs) paid by usto our Directors amounted to approximately RMB1.3 million, RMB1.5 million, and RMB0.5million respectively.

Total remuneration (including salaries and bonus, and pension costs) paid to the five highestpaid individuals of our Group, excluding our Directors, during the two financial year ended 31December 2016 and the four months ended 30 April 2017 was approximately RMB3.1 million,RMB4.0 million, and RMB1.2 million respectively.

Under the arrangements currently in force, the aggregate remuneration and benefits in kind ofour Directors payable (excluding any commission or discretionary bonus) in respect of the yearending 31 December 2017 is estimated to be approximately RMB3.0 million.

We did not pay to our Directors or the five highest paid individuals any inducement fees tojoin us or as compensation for loss of office for each of the years ended 31 December 2015 and2016 and the four months ended 30 April 2017. Furthermore, none of our Directors waived anycompensation for the same period.

Save as disclosed in the paragraph headed ‘‘Appendix IV — C. Further Information AboutOur Directors and Substantial Shareholders — 4. Directors’ remuneration’’ and this section, noother payments have been paid or are payable in respect of the two financial years ended 31December 2016 and the four months ended 30 April 2017 by us or any of our subsidiaries to ourDirectors.

REMUNERATION POLICY

Our Directors and senior management receive compensation in the form of director fees,salaries, benefits in kind and/or discretionary bonuses with reference to those paid by comparablecompanies, time commitment and the performance of our Group. Our Group also reimburses ourDirectors and senior management for expenses which are necessarily and reasonably incurred forthe provision of services to our Group or executing their functions in relation to the operations ofour Group. We regularly review and determine the remuneration and compensation packages ofour Directors and senior management, by reference to, among other things, market level ofremuneration and compensation paid by comparable companies, the respective responsibilities ofour Directors and the performance of our Group.


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COMPLIANCE ADVISER

We have appointed RaffAello Capital Limited as our compliance adviser in accordance withRule 6A.19 of the GEM Listing Rules to provide us with services including providing guidanceand advice in connection with compliance with requirements under the GEM Listing Rules. Theterm of appointment shall commence on the Listing Date and shall end on the publication date ofour financial results for the second full financial year after the Listing in compliance with Rule18.03 of the GEM Listing Rules. Our Company will pay to RaffAello Capital Limited an agreedfee for its provision of services with the scope required under the GEM Listing Rules.

Pursuant to Rule 6A.23 of the GEM Listing Rules, we will consult with and, if necessary,seek advice from the compliance adviser in the following circumstances:

(i) before the publication of any regulatory announcement, circular or financial report;

(ii) where a transaction, which might be a notifiable or connected transaction, iscontemplated, including share issues or share repurchase;

(iii) where we propose to use the net proceeds from the Share Offer in a manner differentfrom that detailed in this prospectus or where our business activities, developments orresults deviate from any forecast, estimate, or other information in this prospectus; and

(iv) where the Stock Exchange makes an inquiry to our Company concerning unusualmovements in the price and trading volume of our shares and/or any other matters.

CORPORATE GOVERNANCE

Our Company will comply with the Corporate Governance Code in Appendix 15 to the GEMListing Rules after the Listing.

Our Directors will review our corporate governance policies and compliance with theCorporate Governance Code each financial year and comply with the ‘‘comply or explain’’principle in our corporate governance report, which will be included in our annual reportssubsequent to the Listing.


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OUR CONTROLLING SHAREHOLDERS

Immediately following the completion of the Capitalisation Issue and the Share Offer is notexercised and without taking into account any Shares to be issued upon the exercise of the optionsthat have been or may be granted under the Share Option Scheme, Mansion Green will directlyown approximately 54% of the issued share capital of our Company, and Mr. Fong, Ms. Tse, StandSmooth, Mr. Fong’s Holding Companies, Mansion Green and Aspiring Vision will together form agroup of Controlling Shareholders within the meaning of the GEM Listing Rules and togethercontrol approximately 54% of the issued share capital of our Company (without taking intoaccount any Shares to be issued upon the exercise of options that have been or may be grantedunder the Share Option Scheme). For details of the shareholding of the Controlling Shareholders ineach of the companies in our Group, see ‘‘History, Reorganisation and Corporate Structure’’.

Since 28 March 2001, being the date when Ms. Tse acquired 30% equity interest inGuangzhou Fineland Property Consultancy from Peggo International, Mr. Fong and Ms. Tse havebeen acting in concert with each other in exercising and implementing the management andoperations of our subsidiaries. As we were a group of private entities in the past, thesearrangements were not formalised in writing and each of Mr. Fong and Ms. Tse was content withsuch arrangements based on their long term business relationship, as well as the trust andconfidence they have in each other.

On 31 March 2017, in preparation for the Listing, among others, Mr. Fong and Ms. Tseexecuted the Deed of Concert Parties, whereby they have confirmed their acting in concertarrangement in the past, as well as their intention to continue to act in the above manner uponListing to consolidate their control over our Group until the Deed of Concert Parties is terminatedby them in writing.

The Deed of Concert Parties covers our Company and all of our subsidiaries (‘‘RelevantCompanies’’). Pursuant to the Deed of Concert Parties, Mr. Fong and Ms. Tse have confirmed,agree and acknowledge, among others, they have agreed to, and shall continue until thetermination of the Deed of Concert Parties to:

(a) reach unanimous decisions among themselves on all management matters (including butnot limited to the operations and financial matters) of the Relevant Companies;

(b) reach unanimous decisions among themselves on all material matters relating to thebusiness of the Relevant Companies;

(c) cast unanimous vote collectively for or against all board resolutions or shareholders’resolutions to be passed at any board meetings or shareholders’ meetings of the RelevantCompanies; and

(d) maintain and centralise the ultimate control and management with respect to theRelevant Companies by way of mutual cooperation.

RELATIONSHIP WITH CONTROLLING SHAREHOLDERS

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Therefore, Mr. Fong and Ms. Tse, together through Mansion Green, will be entitled to controlapproximately 54% of the issued share capital of our Company immediately upon the completionof the Capitalisation Issue and the Share Offer (without taking into account any Shares to beissued upon the exercise of options that have been or may be granted under the Share OptionScheme).

Mansion Green, Stand Smooth, Mr. Fong’s Holding Companies and Aspiring Vision areinvestment-holding companies and have not commenced any substantive business activities as atthe Latest Practicable Date. Mr. Fong is the chairman of our Group and our non-executiveDirector, as well as the chairman, president and controlling shareholder of the Fineland Group. Ms.Tse is one of our executive Directors. For details of the biographies of Mr. Fong and Ms. Tse, see‘‘Directors and Senior Management’’.

As at the Latest Practicable Date, our Controlling Shareholders and their respective closeassociates had been conducting other businesses or holding interest directly or indirectly in certaincompanies, in particular the Fineland Group, which are engaged in businesses not in competitionwith the businesses of our Group. These major other businesses conducted or owned directly orindirectly by our Controlling Shareholders and their respective close associates (the ‘‘ExcludedBusinesses’’) include:

(a) property development — certain members of the Fineland Group are property developersin the PRC which focus primarily on the development and sale of residential properties,and the development of business and commercial properties, hotels and servicedapartments in the PRC. Customer base of these companies mainly comprises (i)individuals who purchase the residential properties with the eventual aim of becomingoccupants of the properties; (ii) corporate customers who purchase or rent the businessand commercial properties; and (iii) travel agencies, corporate customers and guests atthe hotels and serviced apartments;

During the Track Record Period, the Fineland Group was our major customer, for whomwe principally provided primary market real estate agency services. Revenue from theFineland Group accounted for 58.3%, 42.0% and 51.4% of our total revenue for the twoyears ended 31 December 2016 and the four months ended 30 April 2017, respectively.Based on the unaudited financial information of our Group, the revenue generated fromthe Fineland Group amounted to approximately 41.7% of our total revenue for the eightmonths ended 31 August 2017. Going forward, we will continue to provide our propertyconsultancy, agency and integrated services to members of the Fineland Group and suchtransactions will constitute continuing connected transactions under Chapter 20 of theGEM Listing Rules upon Listing. For further details, see ‘‘Operational Independence’’ inthis section and ‘‘Connected Transactions’’;


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(b) property management — certain members of the Fineland Group and certain indirectnon-wholly owned subsidiaries of Guangdong Fineland Investment Limited* (廣東方圓

投資有限公司) (‘‘GD Fineland Investment’’), which is owned as to 49% by Mr. Fong,principally provide post-sale property management services to residential complex and/or commercial buildings developed by the Fineland Group. Services provided by thesecompanies include maintenance and management of public areas, public facilities,property data and archives, management of green areas, vehicle parking and interiordesign to property developers, dredging of water emission pipes and assisting themanagement of public order;

(c) hotel management — certain members of the Fineland Group together with establishedhotel operators provide hotel management services in the PRC. These companies mainlyprovide hotel management services to hotels that are developed by the Fineland Group.Services provided by these companies include maintenance and management of hotelrooms, public areas and hotel facilities and development of marketing strategies;

(d) public infrastructure construction — certain direct non-wholly owned subsidiaries ofGuangdong Fineland Group Limited* (廣東方圓集團有限公司) (‘‘GD FinelandGroup’’), which is owned as to 99% by Mr. Fong, principally provide publicinfrastructure construction services in the PRC. Services provided by these companiesinclude construction and maintenance of highways and bridges;

(e) engineering — an indirect non-wholly owned subsidiary of GD Fineland Investment, adirect wholly owned subsidiary of the GD Fineland Group and certain members of theFineland Group principally provide engineering services to members of the FinelandGroup which are property developers. Services provided by these companies includelandscaping design and interior design;

(f) fund management — certain members of the Fineland Group and certain subsidiaries ofGD Fineland Investment mainly provide fund management services to individual andcorporate customers in the PRC;

(g) education — an indirect non-wholly owned subsidiary of GD Fineland Investmentmainly provides education services, including setting up and managing kindergartensand primary schools;

(h) other businesses including provision of investment and immigration consultancy servicesand catering services in the PRC.


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A company controlled by Mr. Fong within the property management division of the ExcludedBusinesses was previously listed on the National Equities Exchange and Quotations (‘‘NEEQ’’) inNovember 2015 as Guangzhou Fineland Modern Life Services Company Limited (‘‘FinelandModern’’). Shortly after its listing on the NEEQ, Fineland Modern made several non-tradeadvances in an aggregate amount of approximately RMB13.7 million to related companies alsocontrolled by Mr. Fong without complying with certain announcement and internal approvalrequirements (the ‘‘Non-compliances’’). This occurred because its management was not familiarwith the relevant disclosure and internal approval requirements applicable to non-trade advances toconnected parties as a newly-listed company at the time. These Non-compliances weresubsequently discovered upon Fineland Modern’s internal review, and immediate rectificationmeasures were taken. These included confirming that all such non-trade advances were fullyrepaid, self-reporting the Non-compliances to the China Securities Regulatory Commission,publishing announcements, obtaining an undertaking from its controlling shareholder, actualcontroller, shareholders, directors, supervisors, and senior management in which they guaranteednot to obtain any non-trade advance from Fineland Modern, passing a special policy to remedy anyinadequacy of its internal control system in this aspect, and having its management and directorsparticipate in trainings to familiarise themselves with the relevant obligations as a public companylisted on NEEQ.

Fineland Modern has confirmed that no investigation or other action was conducted or takenby any PRC regulatory authority against itself or Mr. Fong in relation to the Non-compliances, andit did not incur any loss as a result of the Non-compliances. Mr. Fong was not involved inapproving the making of the non-trade advances at the relevant time, as Fineland Group comprisesover a hundred member companies and it was impractical for him to get involved in dailymanagement of each member company including Fineland Modern. He, however, along with theother directors of Fineland Modern, took responsibility for the occurrence of the Non-compliancesand have taken a series of remedial measures and participated in relevant trainings to avoid futurenon-compliance. Taking into account all relevant circumstances, the Sole Sponsor is of the viewthat the Non-compliances should not affect Mr. Fong’s suitability to act as a director under GEMListing Rules 5.01 and 5.02.


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INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS AND THEIRRESPECTIVE CLOSE ASSOCIATES

Having considered the following factors, our Directors consider that we are capable ofcarrying on our businesses independently of, and do not place undue reliance on, our ControllingShareholders and their respective close associates following Listing:

Clear delineation of our businesses

Since we are a property consultancy and agency company with three main servicesegments, namely (i) property research and consultancy services, (ii) comprehensive realestate agency services in the primary and secondary property market, and (iii) integratedbusiness services, our Directors consider that our businesses are distinctly different from theExcluded Businesses and do not compete with each other for the following reasons:

Excluded Businesses Our Group’s businesses

Property development Property intermediary services — Comprehensive real estateagency services in the primary and secondary propertymarkets

Members of the Fineland Group which

are property developers mainly

focus on developing residential

properties, business and commercial

properties, hotels and serviced

apartments and their businesses

concentrate on the primary property

market.

Instead of developing properties, we focus on providing

comprehensive agency services in both the primary and

secondary property markets, such as (i) for primary property

market, facilitating sales of properties in property development

projects by property developers to potential purchasers, and (ii)

for secondary property market, providing services to owners

looking to sell or lease their properties and to potential buyers

or tenants looking to buy or rent properties.

Members of the Fineland Group which

are property developers mainly

generate their revenue through

receiving the purchase price from

the purchasers of the properties

developed by it.

Our revenue is generated through (i) for primary property market,

receiving commissions from the property developers based on

the successful completion of sales, and (ii) for secondary

property market, receiving commissions from the owner and the

buyer or tenant based on the purchase price or the rent.

During the Track Record Period, we did not conduct any property

development business and we do not intend to conduct such

business in the future.

Property management Property intermediary services — Integrated Services

The Fineland Group provides property

management services covering

overall maintenance, management

and operation of the residential

complex and commercial buildings.

Our One-stop Service Centre mainly offers services to individual

customers who are/intend to be landlords and provides a range

of value-added services such as rent collection services,

maintenance of their properties on an individual basis, as well as

assisting them in completing sale and purchase transactions by,

among others, assisting them in obtaining ownership certificates

and applying for mortgages from banks.


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Excluded Businesses Our Group’s businesses

The companies which engage in

property management business

mainly derived their revenue from

fixed monthly management fees

received from the owners of the

properties. Such fixed monthly

management fees are payable by the

owners as long as they remain as

owners of the properties, regardless

of whether or not (i) the relevant

properties are being occupied and/

or rented out or (ii) the owners

make use of the services provided

by such companies.

Our revenue is generated by charging either (i) a fee per

transaction for services such as obtaining ownership certificates;

or (ii) monthly fees based on a percentage of the rental income

from the property, and the percentage varies with the type of

service provided.

During the Track Record Period, we did not provide any property

management services to any residential complex or commercial

buildings, and we do not intend to conduct such business in the

future.

Hotel management, publicinfrastructure construction,engineering, fund management,education and other businessesincluding provision of investmentconsultancy services and cateringservices

Property intermediary services — Property research andconsultancy services, comprehensive real estate agencyservices and Integrated Services

The nature of business, business model and target customers are

different.

During the Track Record Period, we did not provide any such

services and we do not intend to conduct such businesses in the

future.

As (i) the Excluded Businesses comprise a collection of diversified businesses spanningvarious industries as detailed above; (ii) the Excluded Businesses are not within the businessscope of our Group nor in line with our business strategies; (iii) the Excluded Businesses areat different stages of development and vary in their attractiveness to investors in the PRC andabroad, for instance, the property management division of the Fineland Group has been listedon the NEEQ as Fineland Modern since November 2015; (iv) the Excluded Businesses arepursuing various funding channels, such as issuing bonds in the PRC domestic market, out oftheir own commercial reasons; and (v) we currently do not intend to engage in the ExcludedBusinesses, we consider it is not in the best interests of our Company and our Shareholdersas a whole to include any of the Excluded Businesses into our Group. The ControllingShareholders also confirmed that they have no intention to inject any of the ExcludedBusinesses into our Group.

None of our Controlling Shareholders and their respective close associates has anyinterests in any business which directly or indirectly competes or is likely to compete withour principal businesses, which would require disclosure under Rule 11.04 of the GEMListing Rules. To ensure that competition will not exist in the future, our ControllingShareholders have entered into the Deed of Non-competition with us to the effect that each ofthem will not, and will procure each of their respective close associates not to, directly orindirectly participate in, or hold any right or interest or otherwise be involved in, anybusiness which may be in competition with our businesses. Please refer to the paragraphheaded ‘‘Non-compete Undertakings’’ in this section for details.


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Operational independence

We are operating our businesses independently from our Controlling Shareholders andtheir respective close associate since:

(a) our operating subsidiaries have obtained all material licences that are necessary fortheir operations in their own names;

(b) our management team is independent from our Controlling Shareholders. Fordetails, see ‘‘Independence from our Controlling Shareholders and their RespectiveClose Associates — Management Independence’’ in this section;

(c) we have our own divisional and functional teams and facilities for each of ouroperating business segments, and each division has a clean delineation of dutiesand functions as determined by our Board to promote efficiency, effectiveness andquality in the development of our businesses;

(d) saved as disclosed below and in the section headed ‘‘Business — Our Customers’’,we have independent access to our suppliers and customers and none of ourControlling Shareholders and their respective close associates are suppliers orcustomers of our Group. During the Track Record Period, the Fineland Group didnot refer any customer to our Group; and

(e) our Company has established corporate governance procedures in safeguarding theinterests of our Shareholders and preventing the Directors from furthering theirown interests at the expense of our Group’s interests. For details, see ‘‘CorporateGovernance Measures’’ in this section.

During the Track Record Period, we entered into certain transactions with entitiescontrolled by our Controlling Shareholders, namely the Fineland Group, in the ordinarycourse of our business and on normal commercial terms. Such transactions, if continued afterListing, will constitute continuing connected transactions of our Company under the GEMListing Rules. For details, see ‘‘Connected Transactions — Continuing ConnectedTransactions Subject to the Reporting, Announcement, Circular and IndependentShareholders’ Approval Requirements’’.

In spite of the entering into of the abovementioned transactions with the FinelandGroup, our Directors are of the view that there is no operational or financial dependence byus on our Controlling Shareholders as:

(a) we are an established real estate agents in Guangzhou, the PRC, being in operationsince 1997 and one of the 16 secondary real estate agencies among 185 which have10 or more outlets operating in Guangzhou, the PRC. Hence, our Directors believethat it is our Group’s reputation for quality service and goodwill in the real estateagency services industry, rather than our relationship with the Fineland Group, thatenable us to capture business opportunities;


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(b) our Group would still be able to meet the cash flow requirement under Rule11.12A(1) of the GEM Listing Rules without taking into account the cash flowgenerated from the Fineland Group during the Track Record Period, as illustratedby the following table which sets out the breakdown of our Group’s cash flow bynature of the transactions during the Track Record Period:

For the year ended 31 December For the four months ended 30 April

2015 2016 2017

RMB’000 HK$’000(1)% to total

cash flow RMB’000 HK$’000(1)% to total

cash flow RMB’000 HK$’000(1)% to total

cash flow

Cash flow generated from the

Fineland Group(2) 11,280 13,464 58.3% 8,858 9,902 42.0% 1,186 1,339 51.4%

Cash flow generated from

customers who are

Independent Third Parties 8,069 9,631 41.7% 12,232 13,675 58.0% 1,122 1,267 48.6%

Total 19,349 23,095 100% 21,090 23,577 100% 2,308(3) 2,606 100%

Notes:

(1) The conversion of RMB into HK$ is based on the approximately exchange rate of RMB0.8378

to HK$1 as at 31 December 2015, RMB0.8945 to HK$1 as at 30 December 2016 and

RMB0.8858 to HK$1 as at 28 April 2017.

(2) As the Fineland Group and customers who are Independent Third Parties are served by the same

employees of the Group and the sales efforts are supported by the same outlets, it is

impracticable to segregate operating costs attributable to the Fineland Group from operating

costs attributable to Independent Third Parties. Also, our Group deals with connected customers

from the Fineland Group and independent customers in the same way and on similar terms. As

such, the cash flows generated from the Fineland Group are calculated by multiplying the

operating profit before working capital changes by the percentage of revenue generated from the

Fineland Group to total revenue of the Group. There is no accounting policy or standard

governing the calculation of the allocation. Based on the above, the Reporting Accountant is of

the view that our Group’s basis for the above calculation of allocation has not violated any

accounting policy or standard nor should it be considered unreasonable, and the calculation is

arithmetically accurate in all material respects.

(3) Inclusive of one-off listing expenses of approximately RMB8.2 million for the four months

ended 30 April 2017.


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(c) although a significant portion of our revenue was generated from the FinelandGroup during the Track Record Period, we are able to expand our customer base,diversify our business focus and provide agency and marketing services to anincreasing number of property developers who are Independent Third Parties,which is evidenced by the decreasing percentage of revenue generated from theFineland Group during the Track Record Period. The following table sets out thebreakdown of our Group’s total revenue by nature of the transactions during theTrack Record Period:


For the four months

ended 30 April

2015 2016 2017

RMB’000

% to total

revenue RMB’000

% to total

revenue RMB’000

% to total

revenue

Revenue generated from

the Fineland Group 52,466 58.3% 44,632 42.0% 22,259 51.4%(1)(2)

Revenue generated from

customers who are

Independent Third

Parties 37,593 41.7% 61,713 58.0% 21,012 48.6%

Total 90,059 100% 106,345 100% 43,271 100%

Notes:

(1) Based on the unaudited financial information of our Group, the revenue generated from the

Fineland Group amounted to approximately RMB19.8 million, or 59.0% of our total revenue, for

the four months ended 30 April 2016.

(2) Based on the unaudited financial information of our Group, the revenue generated from the

Fineland Group amounted to approximately RMB39.0 million, or approximately 41.7% of our

total revenue, for the eight months ended 31 August 2017.


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(d) other than the Fineland Group, our Group has a well-established network andbusiness relationship with a diversified client base of property developers who areIndependent Third Parties, as illustrated by the increasing number of IndependentThird Parties customers during the Track Record Period. During the Track RecordPeriod, five out of the 10 largest real estate projects by revenue generated inrespect of which we provided services were independent from the Fineland Group,including (i) 科城山莊 (Kecheng Village) and (ii) 天倫花園 (Tianlun Garden). Setdown below is the breakdown of the number of our Group’s customers in theprimary property market by customers type during the Track Record Period:


For the four months

ended

30 April

2015 2016 2017

% to total

number of

customers

% to total

number of

customers

% to total

number of

customers

Number of customers

who are members of

the Fineland Group 15 31.9% 16 25.0% 9 19.1%

Number of customers

who are Independent

Third Parties 32 68.1% 48 75.0% 38 80.9%

Total 47 100% 64 100% 47 100%

(e) going forward, our Group will continue to expand our customer base and webelieve that our reliance on Fineland Group will continue to reduce gradually andthe percentage of revenue generated from the Fineland Group will further decreaseand become less significant after Listing. In particular, we intend to (i) capture thepotential growth in sales of secondary properties and to capitalise on the highercommission rate available for secondary sales by opening more outlets in variousdistricts in Guangzhou where new and prestigious residential properties withfacilities and infrastructure are located and to employ more licensed agents toprovide secondary market real estate agency services; and (ii) further develop ourOne-stop Service Centre business by focusing our marketing efforts, such asparticipating in press conference, advertising on third party websites and on ourWeChat public account, on customers who purchase properties for investmentpurposes. For details, see ‘‘Business — Our Business Strategies’’. Our Directorsestimate that the maximum annual fees charged by our Group to the FinelandGroup for each of the three years ending 31 December 2019 will not exceedRMB48.0 million, RMB53.0 million and RMB59.0 million, respectively;


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(f) while the Company has aggregated the revenue derived from transactions with theFineland Group during the Track Record Period, there were actually 19 differentlegal entities under the Fineland Group umbrella who were our customers. Eachmember of the Fineland Group selects its agents independently by going throughits own internal evaluation and bidding procedures. Furthermore, we are not anexclusive agent of the Fineland Group and in order to secure a mandate to providereal estate agency services to the Fineland Group, we have to submit tenders toeach member of the Fineland Group and go through the same bidding process asother competitors in the market. In addition, the terms of the continuing connectedtransactions with the Fineland Group are fair and reasonable and are comparable tothose of similar transactions entered into with Independent Third Parties customers;and

(g) the fees payable by the Fineland Group to our Group and other terms of theagreements entered or to be entered into with the Fineland Group are and will beconsidered and assessed by the Directors independently based on, among others, (i)the scale of the relevant projects and the required level of resources involved forproviding such services; (ii) the fees received by us for providing services of asimilar scale and quality to Independent Third Party customers; and (iii) theprevailing market rates of local property agencies (which are Independent ThirdParties) in the neighbourhood with a similar scale and quality. For details, see‘‘Connected Transactions — Continuing Connected Transactions subject to theReporting, Announcement, Circular and Independent Shareholders’ ApprovalRequirements — Master Agency Service Agreement — Pricing policy’’.

Financial independence

Our Board believe that we are able to operate financially independently from ourControlling Shareholders and their respective close associates as:

(a) we have our own accounting and financial department and an independent financialsystem and we make financial decisions independently according to our Group’sown business and operation needs;

(b) we have sufficient capital to operate our business independently, and haveadequate internal resources and credit profile to support our daily operations;

(c) all loans, advances and balances due to and from our Controlling Shareholders andtheir respective close associates will be fully settled upon Listing;

(d) we have our own treasury function and we have independent access to third partyfinancing on market terms and conditions for our business operations as and whenrequired; and

(e) we have independent bank accounts and do not share any of our bank accounts,loan facilities or credit facilities with our Controlling Shareholders or theirrespective close associates.


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Management independence

The table below sets out the directorships which our Directors have in our ControllingShareholders and their respective close associates immediately following the Listing:

Our Directors

Mansion

Green

Aspiring

Vision

Stand

Smooth

Mr. Fong’s

Holding

Companies

Other companies

controlled by

Mr. Fong

(including the

Fineland Group)

Mr. Fong √ x √ √ √

Ms. Tse √ √ x x x

Ms. Rong √ x √ √(Note) √

Note: As at the Latest Practicable Date, Ms. Rong was one of the directors of Hero Dragon and Fineland Real

Estate.

Saved as disclosed above, our Directors and senior management do not hold any directorshipsor positions in our Controlling Shareholders or their respective associates.

In spite of the above, our Directors consider that we have management independence fromour Controlling Shareholders and their respective close associates due to the following reasons:

(a) our Board comprises eight Directors, of whom three are executive Directors, one is anon-executive Director and four are independent non-executive Directors. With theappointment of four independent non-executive Directors to our Board, a strongindependent element is present to effectively exercise independent judgment on thecorporate actions of our Company and our Board is able to make decisions after dueconsideration of the independent and impartial opinions and views of our independentnon-executive Directors;

(b) Ms. Tse, being one of our executive Directors and the director of Mansion Green andAspiring Vision, is in charge of providing strategic plans and overseeing mattersrelating to our secondary market real estate agency services but not the daily operationsof our Group. She does not hold any position within the Fineland Group;

(c) Mr. Fong being the non-executive Director of our Company, is primarily responsible forproviding strategic advice to our Group and he would not participate in the dailymanagement and operations of our Group;

(d) the daily operations of our Group are principally managed by Mr. Yi, being one of ourexecutive Director, who is independent from our Controlling Shareholders. Furthermore,our Board is assisted and supported by our senior management who are all independentfrom our Controlling Shareholders and their respective close associates in the dischargeof its role, and they are responsible for the daily management and operations of ourGroup and the implementation of our business plan and strategy as laid down by our


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Board. As such, the day-to-day management and operations of our Group are managedand operated independently from our Controlling Shareholders and their respective closeassociates;

(e) the management, operation and affairs of our Group are headed, managed andsupervised by our Board as a whole and not by any individual Directors. According tothe Articles, our Board must act collectively by a majority decision, and no individualDirector is allowed to transact or make any decision for and on behalf of our Companyalone unless he/she is authorised by our Board or in accordance with the provisions ofthe Articles and the Companies Law. Any view of a Director will be checked andbalanced by the view of other Board members;

(f) each of the Directors is aware of his/her fiduciary duties as a Director to act for thebenefit and in the best interests of our Company and does not allow an conflict betweenhis/her duties as a Director and his/her personal interest;

(g) instances of actual or potential conflict have been identified (please refer to the sectionheaded ‘‘Connected Transactions’’ in this prospectus for details) and minimized byvirtue of the Deed of Non-competition;

(h) in the event that there is a potential conflict of interest arising out of any transaction tobe entered into between our Group and our Directors or their respective close associates,the interested Director(s) shall abstain from voting at the relevant meetings of the Boardin respect of such transactions and shall not be counted in the quorum, unless otherwisepermitted under the Articles and/or the GEM Listing Rules. Hence, the independence ofthe Board’s decisions in respect of any matters in which any of our Directors has apotential conflict of interest can be ensured;

(i) connected transactions between our Company and companies controlled by ourControlling Shareholders are subject to the rules and regulations under the GEM ListingRules including the announcement, circular and independent shareholders’ approvalrequirements under Chapter 20 of the GEM Listing Rules (where applicable);

(j) all of the businesses that are related to the property consultancy and agency servicesheld by our Controlling Shareholders have been consolidated into our Group as part ofour Reorganisation. Thus, there is no competition that would adversely affect themanagement independence of our Group; and

(k) our Company has established corporate governance procedures in safeguarding theinterests of our Shareholders and enhancing Shareholders’ value. Please refer to theparagraph headed ‘‘Corporate Governance Measures’’ in this section for details.


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NON-COMPETE UNDERTAKINGS

Our Controlling Shareholders, Mr. Fong, Ms. Tse, Mansion Green, Mr. Fong’s HoldingCompanies, Stand Smooth and Aspiring Vision (each the ‘‘Obligor’’ and collectively the‘‘Obligors’’) entered the Deed of Non-competition. Pursuant to the Deed of Non-competition, eachof the Obligors has irrevocably and unconditionally undertaken to our Company (for ourselves andas trustee for our subsidiaries) that, save and except as disclosed in this prospectus, during theperiod that the Deed of Non-competition remains effective, he/she/it shall not, and shall procurethat his/her/its close associates (other than any member of our Group) not to carry on or beengaged, concerned or interested, or otherwise be involved, directly or indirectly, in any businessin competition with or likely to be in competition with the existing business activity of anymember of our Group and any business of our Group may engage in from time to time within thePRC, Hong Kong and such other parts of the world where any member of our Group may operatefrom time to time, save for the holding of not more than 5% shareholding interests (individually orwith his/her/its close associates) in any company listed on a recognised stock exchange and at anytime the relevant listed company shall have at least one shareholder (individually or with his/her/its close associates, if applicable) whose shareholding interests in the relevant listed company ishigher than that of the relevant Obligor (individually or with his/her/its close associates).

Each of the Obligors further undertakes that if he/she/it or his/her/its close associates otherthan any member of our Group is offered or becomes aware of any business opportunity whichmay compete with the business of our Group, he/she/it shall procure that his/her/its closeassociates to promptly notify our Group in writing and our Group shall have a right of first refusalto take up such opportunity. Our Group shall, within 30 days after receipt of the written notice (orsuch longer period if our Group is required to complete any approval procedures as set out underthe GEM Listing Rules from time to time), notify the Obligor(s) whether our Group will exercisethe right of first refusal.

Our Group shall only exercise the right of first refusal upon the approval of all independentnon-executive Directors who do not have any interest in such opportunity. The relevant Obligor(s)and the other conflicting Directors (if any) shall abstain from participating in and voting at andshall not be counted as quorum at all meetings of the Board where there is a conflict of interest orpotential conflict of interest including but not limited to the relevant meeting of our independentnon-executive Directors for considering whether or not to exercise the right of first refusal.

Our Company will adopt the following procedures to monitor that the Deed of Non-competition is being observed:

(a) our independent non-executive Directors shall review on an annual basis the aboveundertakings from the Obligors and to evaluate the effective implementation of the Deedof Non-competition;

(b) each of the Obligors undertakes to provide any information as is reasonably required byour Group or our independent non-executive Directors, as a basis to decide whether toexercise the right of first refusal by our Company from time to time;


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(c) each of the Obligors undertakes to provide all information necessary for the annualreview by our independent non-executive Directors and the enforcement of the Deed ofNon-competition, and to provide an annual confirmation on the compliance of the non-competition undertaking for inclusion in the annual report of our Company; and

(d) our Company shall disclose the decisions on those matters reviewed by our independentnon-executive Directors relating to the compliance of the Deed of Non-competition inthe annual report of the Company.

The undertakings contained in the Deed of Non-competition are conditional upon the ListingDivision granting approval for the Listing of and permission to deal in the Shares on the StockExchange and all conditions precedent under the Underwriting Agreement having been fulfilled (orwhere applicable, waived) and the Underwriting Agreements not having been terminated inaccordance with its terms. If any such condition is not fulfilled on or before the date specified inthe Underwriting Agreements (unless such conditions are waived on or before such date) or in anyevent on or before the date falling 30 days after the date of this prospectus, the Deed of Non-competition shall lapse and cease to have any effect whatsoever and no party shall have any claimagainst the other under the Deed of Non-competition.

The Deed of Non-competition shall terminate on the date on which (i) in relation to anyObligors, when he/she/it together with his/her/its close associates, whether individually or takentogether, ceases to be interested in 30% (or such other amount as may from time to time bespecified in the GEM Listing Rules as being the threshold for determining a controllingshareholder of a company) or more of the entire issued share capital of our Company provided thatthe Deed of Non-competition shall continue to be in full force and effect as against the otherCovenantors; or (ii) our Shares cease to be listed and traded on the Stock Exchange (except fortemporary trading halt or suspension of trading of the Shares on the Stock Exchange due to anyreason).

As our Controlling Shareholders have given non-competition undertakings in favour of ourCompany, and other than members of our Group, none of them have interests in other businessesthat compete or are likely to compete with the business of our Group, our Directors are of theview that we are capable of carrying on our business independently of our ControllingShareholders following the Listing.


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CORPORATE GOVERNANCE MEASURES

Our Company will adopt the following measures to strengthen its corporate governancepractice and to safeguard the interests of our Shareholders:

(a) the Articles provide that a Director shall not be counted in the quorum or vote on anyresolution of the Board approving any contract or arrangement or other proposal inwhich he/she or any of his/her close associates is materially interested unless in certaincircumstances as expressly stated in the Articles, namely:

(i) the giving of any security or indemnity either:

(a) to the Director or his/her close associate(s) in respect of money lent orobligations incurred or undertaken by him/her or any of them at the request ofor for the benefit of the Company or any of its subsidiaries; or

(b) to a third party in respect of a debt or obligation of the Company or any of itssubsidiaries for which the Director or his/her close associate(s) has himself/herself/themselves assumed responsibility in whole or in part and whetheralone or jointly under a guarantee or indemnity or by the giving of security;

(ii) any proposal concerning an offer of shares or debentures or other securities of orby the Company or any other company which the Company may promote or beinterested in for subscription or purchase where the Director or his/her closeassociate(s) is/are or is/are to be interested as a participant in the underwriting orsub-underwriting of the offer;

(iii) any proposal or arrangement concerning the benefit of employees of the Companyor its subsidiaries including:

(a) the adoption, modification or operation of any employees’ share scheme orany share incentive or share option scheme under which the Director or his/her close associate(s) may benefit; or

(b) the adoption, modification or operation of a pension fund or retirement, deathor disability benefits scheme which relates both to Directors, his/her closeassociates and employees of the Company or any of its subsidiaries and doesnot provide in respect of any Director or his/her close associate(s), as suchany privilege or advantage not generally accorded to the class of persons towhich such scheme or fund relates; and

(iv) any contract or arrangement in which the Director or his/her close associate(s) is/are interested in the same manner as other holders of shares or debentures or othersecurities of the Company by virtue only of his/her/their interest in shares ordebentures or other securities of the Company;

(b) our independent non-executive Directors will review, on an annual basis, compliancewith the Deed of Non-competition given by our Controlling Shareholders;


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(c) our Company will obtain (i) an annual written confirmation in respect of our ControllingShareholders’ compliance with the terms of the Deed of Non-competition, (ii) consent(from each of our Controlling Shareholders) to refer to the said confirmation in ourannual reports, and (iii) all information as may reasonably be requested by us and/or ourindependent non-executive Directors for our review and enforcement of the Deed ofNon-competition;

(d) our Company will disclose decisions on matters reviewed by our independent non-executive Directors relating to compliance and enforcement of the Deed of Non-competition of our Controlling Shareholders in the annual reports of our Company;

(e) our independent non-executive Directors may appoint independent financial advisers andother professional advisers as they consider appropriate to advise them on any matterrelating to the non-competition undertaking or connected transaction(s) at the cost of ourCompany;

(f) our independent non-executive Directors will be responsible for deciding whether or notto allow any Controlling Shareholder and/or his/its close associates to be involved in orparticipate in any business in competition with or likely to be in competition with theexisting business activity of any members of our Group within the PRC, Hong Kong andsuch other parts of the world where any members of our Group may operate from timeto time and if so, specifying any condition to be imposed; and

(g) our Company has appointed RaffAello Capital Limited as the compliance adviser whichshall provide our Company with professional advice and guidance in respect ofcompliance with the GEM Listing Rules and applicable laws.

Further, any transaction that is proposed between our Group and our Controlling Shareholdersand their respective associates will be required to comply with the requirements of the GEMListing Rules, including, where appropriate, the reporting, annual review, announcement andindependent shareholders’ approval requirements.

None of the members of our Group has experienced any dispute with its shareholders oramong its shareholders themselves and our Directors believe that each member of our Group hasmaintained positive relationship with its shareholders. With the corporate governance measuresincluding the measures set out above, our Directors believe that the interest of our Shareholderswill be protected.


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SUBSTANTIAL SHAREHOLDERS

Immediately following completion of the Share Offer and the Capitalisation Issue, thefollowing persons/entities will have an interest or a short position in the Shares or underlyingShares which would be required to be disclosed to our Company under the provisions of Divisions2 and 3 of Part XV of the SFO, or, directly or indirectly, be interested in 10% or more of thenominal value of any class of share capital carrying rights to vote in all circumstances at generalmeetings of any member of our Group:

Shares held immediatelybefore the CapitalisationIssue and the Share Offer

Shares held immediatelyfollowing the CapitalisationIssue and completion of theShare Offer (without takinginto account any Shares to beissued upon the exercise of theoptions that have been or may

be granted under theShare Option Scheme)

Name of Shareholder Nature of interest NumberApproximatepercentage Number

Approximatepercentage

Mr. Fong Interested in a controlled

corporation

144 72% 216,000,000 54%

Ms. Tse Interested in a controlled

corporation

144 72% 216,000,000 54%

Ms. Rong Interested in a controlled

corporation

16 8% 24,000,000 6%

He Kangkang

(何康康)(1)Interest of spouse 144 72% 216,000,000 54%

Zheng Muming

(鄭木明)(2)Interest of spouse 144 72% 216,000,000 54%

Wang Haihui

(王海暉)(3)Interest of spouse 16 8% 24,000,000 6%

Mansion Green(4) Legal and beneficial

owner

144 72% 216,000,000 54%

Widethrive Investments Interested in a controlled

corporation

144 72% 216,000,000 54%

Fineland Real Estate Interested in a controlled

corporation

144 72% 216,000,000 54%

Hero Dragon Interested in a controlled

corporation

144 72% 216,000,000 54%

Stand Smooth Interested in a controlled

corporation

144 72% 216,000,000 54%

Aspiring Vision Interested in a controlled

corporation

144 72% 216,000,000 54%

Metropolitan Dawn(5) Legal and beneficial

owner

16 8% 24,000,000 6%


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Notes:

(1) Ms. He Kangkang (何康康) is the spouse of Mr. Fong. Under the SFO, Ms. He Kangkang (何康康) is deemed to be

interested in the same number of Shares in which Mr. Fong is interested in.

(2) Mr. Zheng Muming (鄭木明) is the spouse of Ms. Tse. Under the SFO, Mr. Zheng Muming (鄭木明) is deemed to

be interested in the same number of Shares in which Ms. Tse is interested in.

(3) Mr. Wang Haihui (王海暉) is the spouse of Ms. Rong. Under the SFO, Mr. Wang Haihui (王海暉) is deemed to be

interested in the same number of Shares in which Ms. Rong is interested in.

(4) Mansion Green is the registered owner of 216,000,000 Shares, representing 54% of our issued share capital

immediately upon completion of the Share Offer and Capitalisation Issue (without taking into any account any

Shares will may be issued upon exercise of any option which may be granted under the Share Option Scheme).

Mansion Green is owned as to 30% by Aspiring Vision, which is in turn direct wholly-owned by Ms. Tse, and as to

70% by Stand Smooth. Stand Smooth is wholly-owned by Hero Dragon, which is wholly-owned by Fineland Real

Estate, which in turn is wholly-owned by Widethrive Investments, and ultimately wholly-owned by Mr. Fong.

Accordingly, Widethrive Investments, Fineland Real Estate, Hero Dragon, Stand Smooth, Aspiring Vision, Mr.

Fong and Ms. Tse are therefore deemed to be interested in the same number of Shares as to which Mansion Green

is interested under the SFO.

(5) Metropolitan Dawn is the registered owner of 24,000,000 Shares, representing 6% of our issued share capital

immediately upon completion of the Share Offer and Capitalisation Issue (without taking into any account any

Shares will may be issued upon exercise of any option which may be granted under the Share Option Scheme).

Metropolitan Dawn is wholly-owned by Ms. Rong. Ms. Rong is therefore deemed to be interested in the same

number of Shares as to which Metropolitan Dawn is interested under the SFO.

Save as disclosed above, our Directors are not aware of any person who will, immediatelyfollowing the Share Offer and the Capitalisation Issue, have an interest or short position in theShares or underlying Shares which would be required to be disclosed to our Company under theprovisions of Divisions 2 and 3 of Part XV of the SFO, or, directly or indirectly, be interested in10% or more of the nominal value of any class of share capital carrying rights to vote in allcircumstances at general meetings of any member of our Group.

UNDERTAKINGS

Each of the Controlling Shareholders has given certain undertakings in respect of the Sharesheld by them to our Company, the Sole Sponsor, the Sole Bookrunner, the Sole Lead Manager andthe Underwriters, details of which are set out under ‘‘Underwriting — Underwriting arrangementsand expenses — Undertakings pursuant to the Public Offer Underwriting Agreement’’. Each of theControlling Shareholders has also given undertakings in respect of the Shares to our Company andthe Stock Exchange as required by Rules 13.16A(1) and 13.19 of the GEM Listing Rules.


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SHARE CAPITAL OF OUR COMPANY

The authorised share capital of our Company is as follows:

Authorised share capital HK$

10,000,000,000 Shares of par value HK$0.01 each 100,000,000

The share capital immediately following the Capitalisation Issue and the Share Offer will beas follows:

HK$

200 Shares in issue immediately prior to the Share Offer 2.0299,999,800 Shares to be issued under the Capitalisation Issue 2,999,998100,000,000 Shares to be issued under the Share Offer 1,000,000

400,000,000 Total 4,000,000

RANKING

The Offer Shares will rank pari passu in all respects with all the Shares now in issue or to beissued as mentioned in this prospectus, and, in particular, will qualify in full for all dividends orother distributions declared, made or paid on the Shares in respect of a record date which fallsafter the date of Listing other than participation in the Capitalisation Issue.

MINIMUM PUBLIC FLOAT

Pursuant to Rule 11.23(7) of the GEM Listing Rules, at the time of the Listing and at alltimes thereafter, our Company must maintain the minimum prescribed percentage of 25% of ourissued share capital in the hands of the public (as defined in the GEM Listing Rules).

Our Group did not have any outstanding share options, warrants, convertible instruments, orsimilar rights convertible into our Shares as at the Latest Practicable Date.

SHARE OPTION SCHEME

Our Company has conditionally adopted the Share Option Scheme, a summary of its principalterms is set out in ‘‘Appendix IV — Statutory and General Information — D. Share OptionScheme’’.

SHARE CAPITAL

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GENERAL MANDATE TO ISSUE SHARES

Conditional on the fulfilment or waiver (as applicable) of the conditions set out in the sectionheaded ‘‘Structure and Conditions of the Share Offer — Conditions of the Share Offer’’ in thisprospectus, our Directors have been granted a general unconditional mandate to allot, issue anddeal with Shares with an aggregate nominal value of not more than the sum of:

a. 20% of the aggregate nominal value of the share capital of our Company in issueimmediately following the completion of the Capitalisation Issue and the Share Offer;and

b. the aggregate nominal value of the share capital of our Company repurchased by ourCompany, if any under the general mandate to repurchase Shares referred to in theparagraph headed ‘‘General mandate to repurchase Shares’’ below.

The allotment and issue of Shares under a rights issue, scrip dividend scheme or similararrangement in accordance with the Articles do not generally require the approval of theShareholders in general meeting and the aggregate nominal value of the Shares which ourDirectors are authorised to allot and issue under this mandate will not be reduced by the allotmentand issue of such Shares.

This general mandate will expire at the earliest of:

a. the conclusion of our Company’s next annual general meeting;

b. the expiration of the period within which our Company is required by applicable laws orthe Articles to hold its next annual general meeting; and

c. when varied, revoked or renewed by an ordinary resolution of our Shareholders ingeneral meeting.

For further details of this general mandate, see ‘‘Appendix IV — Statutory and GeneralInformation — A. Further Information about our Company and our subsidiaries — 3. Writtenresolutions of our Shareholders passed on 23 October 2017’’.

GENERAL MANDATE TO REPURCHASE SHARES

Conditional on the fulfilment or waiver (as applicable) of the conditions set out in ‘‘Structureand Conditions of the Share Offer — Conditions of the Share Offer’’, our Directors have beengranted a general unconditional mandate to exercise all the powers of our Company to repurchaseShares with an aggregate nominal value of not more than 10% of the aggregate nominal value ofthe share capital of our Company in issue following completion of the Capitalisation Issue and theShare Offer.

SHARE CAPITAL

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This mandate only relates to repurchases made on the Stock Exchange, or any other stockexchange on which the Shares may be listed (and which is recognised by the SFC and the StockExchange for this purpose), which are made in accordance with all applicable laws andrequirements of the GEM Listing Rules. Further information required by the Stock Exchange to beincluded in this prospectus regarding the repurchase of Shares is set out in ‘‘Appendix IV —

Statutory and General Information — A. Further information about our Company and oursubsidiaries — 6. Repurchase by our Company of its own securities’’.

This general mandate will expire at the earliest of:

a. the conclusion of our Company’s next annual general meeting;

b. the expiration of the period within which our Company is required by applicable laws orthe Articles to hold its next annual general meeting; and

c. when varied, revoked or renewed by an ordinary resolution of our Shareholders ingeneral meeting.

For further details of this general mandate, see ‘‘Appendix IV — Statutory and GeneralInformation — A. Further Information about our Company and our subsidiaries — 3. Writtenresolutions of our Shareholders passed on 23 October 2017’’.

CIRCUMSTANCES UNDER WHICH GENERAL MEETING AND CLASS MEETING AREREQUIRED

The circumstances under which general meeting and class meeting are required are providedin the Articles of our Company. For details, see ‘‘Appendix III — Summary of the constitution ofthe Company and Cayman Islands Company Law’’.

SHARE CAPITAL

– 178 –

The following discussion and analysis should be read in conjunction with our consolidatedfinancial statements as at and for each of the years ended 31 December 2015 and 2016 andfour months ended 30 April 2017, including the notes thereto, as set forth in ‘‘Appendix I —

Accountant’s Report’’ and other financial information appearing elsewhere in this prospectus,which have been prepared in accordance with HKFRS.

This discussion contains forward-looking statements that involve risks and uncertainties.We caution you that our business and financial performance are subject to substantial risks anduncertainties including, but not limited to, those factors included in the section headed ‘‘RiskFactors’’ in this prospectus. Our future results could differ materially from those projected inthe forward-looking statements

OVERVIEW

We are an established real estate agent in Guangzhou offering services covering differentstages of the life cycle of a property development project, from the planning phase, to promotionand sales, to after-sales services. We classify our business into three segments for financialreporting purposes, namely (i) property research and consultancy, (ii) real estate agency services,and (iii) Integrated Services.

. In our property research and consultancy segment, we provide services relating to theplanning and development stages of projects. We are typically engaged directly byproperty developers and are paid a fixed fee based on factors including the scope ofwork and the scale and expected time span of the project.

. In our real estate agency services segment, we provide services in both the primary andsecondary property markets. For primary market agency services, we are typicallyengaged directly by property developers and receive a commission based on thesuccessful completion of sales of units in their developments. For secondary marketagency services, our customers can be owners looking to sell or lease their properties orcan be potential buyers or tenants looking to buy or rent properties. For our secondarymarket agency services, we receive a commission from the owner and the buyer ortenant based on the purchase price or the rent.

. Our Integrated Services business comprises our Fangyuanbao, Zhaoshangyi and One-stop Service Centre divisions, all of which aim to add value for our customers, be theyproperty developers, individual customers or companies. In our Fangyuanbao division,we operate a referral business in the form of an online platform that provides propertydevelopers with a greater number of real estate agents to market their properties. Wherethis platform is used, we split the commission with any real estate agent that introducesa potential buyer who actually completes on the purchase of a property. AlthoughFangyuanbao business contributed revenue of RMB7.4 million to our Group in 2016, itonly generated operating cash flow before working capital changes of RMB249,000because (i) it had to split 51.5% of the commission income received from the propertydevelopers with the other real estate agents that brought in the buyers; and (ii) it wasstill at the ramp-up stage of its development, and therefore incurred considerable

FINANCIAL INFORMATION

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expenses (mainly staff costs and advertising expenses of RMB3.2 million) to market theplatform to other real estate agents. For example, employees are needed to call onsmaller-sized real estate agencies to introduce and market the Fangyuanbao platformsince the strength of the Fangyuanbao platform lies in its database, which willdetermine the reach and exposure for property developers who engage the Fangyuanbaoplatform to sell their properties. Our Zhaoshangyi business focuses on the leasing ofcommercial units in primary market development projects, for which developers pay usa fee based on the rent for the units. Our One-stop Service Centre business offers arange of value-added services, such as tenancy management services, property repairand maintenance services and design and furnishing services, as well as assistingpurchasers to obtain ownership certificates and apply for mortgages from banks. Formost of these services, we charge our customers monthly fees based on a percentage ofthe rental income from the property.

During the Track Record Period, our revenue increased by RMB16.3 million, or 18.1%, fromRMB90.1 million in 2015 to RMB106.3 million in 2016, respectively, with real estate agencyservices contributing 95.1% of our revenue in 2015 and 88.2% in 2016. Our net profit increased byRMB2.4 million, or 18.9%, from RMB12.9 million to RMB15.3 million over the same period. Ournet profit margin remained stable at 14.3% for 2015 and 14.4% for 2016. Our revenue increasedby 29.0% from RMB33.5 million for the four months ended 30 April 2016 to RMB43.3 million forthe four months ended 30 April 2017, with real estate agency services contributing 89.2% of ourrevenue for the four months ended 30 April 2017. Our net profit decreased by RMB7.7 million, or109.7%, from RMB7.0 million to a net loss of RMB0.7 million over the same period in 2016.Excluding the non-recurring listing expenses, we would have recorded a net profit of RMB7.5million for the four months ended 30 April 2017.

BASIS OF PRESENTATION

Our Company was incorporated in the Cayman Islands on 16 February 2017 as an exemptedcompany with limited liability under the Companies Law. In preparation for the Share Offer, ourGroup underwent the Reorganisation. For the details of the Reorganisation, see ‘‘History,Reorganisation and Corporate Structure — Reorganisation’’. As a result of the Reorganisation, ourCompany became the holding company of the subsidiaries now comprising our Group by way ofshare swaps, through Fineland Holdings, with the then existing shareholders of Fineland AssetsManagement. The share swaps have no substance and do not form a business combination, andaccordingly, the financial information of the Company and Fineland Holdings was consolidatedwith that of Fineland Assets Management using the predecessor carrying amounts. Our Companyhas not carried on any business since the date of its incorporation except for the Reorganisation.

For more information on the basis of preparation of the financial information included in thisprospectus, see Note 2 of the Accountant’s Report set out in Appendix I to this prospectus.


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CRITICAL ACCOUNTING POLICIES

We have identified certain accounting policies that we believe are most significant to thepreparation of our consolidated financial statements. Some of our significant accounting policiesinvolve subjective assumption and estimates, as well as complex judgments by our managementrelating to accounting items. Our significant accounting policies are set forth in detail in Note 4 ofthe Accountant’s Report set out in Appendix I to this prospectus.

The estimates and associated assumptions are based on our historical experience and variousother relevant factors that we believe are reasonable under the circumstances, the results of whichform the basis of making judgments about matters that are not readily apparent from other sources.When reviewing our financial results, you should consider: (i) our selection of significantaccounting policies; (ii) the judgment and other uncertainties affecting the application of suchpolicies; and (iii) the sensitivity of reported results to changes in conditions and assumptions. Thedetermination of these items requires management judgments based on information and financialdata that may change in future periods, and as a result, actual results could differ from thoseestimates.

Revenue recognition

Revenue comprises the fair value of the rendering of services. Provided it is probable that theeconomic benefits will flow to the Group and the revenue and costs, if applicable, can bemeasured reliably, revenue is recognised as follows:

. Real estate agency service fees are recognised when a developer confirms in writing theaccuracy of our calculations of amounts they owe in respect of properties for which abuyer and seller have executed a legally binding sale agreement.

. Property research and consultancy service fees and Integrated Services income arerecognised when the services are rendered.

. Interest income is recognised on a time-proportion basis using the effective interestmethod.

Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation andany accumulated impairment losses.

Historical cost of an asset comprises its purchase price and any directly attributable costs ofbringing the asset to its present working condition and location for its intended use. Expenditureincurred after the asset has been put into operation, such as repairs and maintenance and overhaulcosts, is charged to profit or loss in the period in which it is incurred. In situations where it isprobable that future economic benefits of the expenditure will flow to the entity, and the cost canbe measured reliably, the expenditure is capitalised as an additional cost of the asset or a separateasset.


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Depreciation is charged so as to write off the cost of items of property, plant and equipmentover their estimated useful lives after taking into account their estimated residual value using thestraight-line method. The estimated useful lives, residual value and depreciation method arereviewed at the end of each reporting period, with the effect of any changes in estimate accountedfor on a prospective basis. The principal annual rates are as follows:

Furniture, fixtures and equipment 20% to 33%Motor vehicles 25%Computer equipment and software 20% to 33%Leasehold improvements Annual rates as determined by shorter of expected

useful lives of 5 years and the unexpired period ofthe leases

An asset is written down immediately to its recoverable amount if its carrying amount ishigher than the asset’s estimated recoverable amount.

The gain or loss on disposal of an item of property, plant and equipment is the differencebetween the net sale proceeds and its carrying amount, and is recognised in profit or loss ondisposal.

Impairment loss on financial assets

The Group assesses, at the end of each reporting period, whether there is any objectiveevidence that a financial asset is impaired. A financial asset is impaired if there is objectiveevidence of impairment as a result of one or more events that has occurred after the initialrecognition of the asset and that event has an impact on the estimated future cash flow of thefinancial asset that can be reliably estimated. Evidence of impairment may include:

. significant financial difficulty of the debtors;

. a breach of contract, such as a default or delinquency in interest or principal payments;

. the granting of a concession to a debtor because of the debtor’s financial difficulty; and

. it becoming probable that the debtor will enter bankruptcy or other financialreorganisation.

An impairment loss is recognised in profit or loss when there is objective evidence that theasset is impaired, and such loss is measured as the difference between the asset’s carrying amountand the present value of the estimated future cash flow discounted at the original effective interestrate. The carrying amount of a financial asset is reduced through the use of an allowance account.When any part of a financial asset is determined to be uncollectible, it is written off against theallowance account for the relevant financial asset.


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Impairment losses are reversed in subsequent periods when an increase in the asset’srecoverable amount can be related objectively to an event occurring after the impairment wasrecognised, subject to a restriction that the carrying amount of the asset at the date the impairmentis reversed does not exceed what the amortised cost would have been had the impairment not beenrecognised.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease canbe related objectively to an event occurring after the impairment was recognised (such as animprovement in the debtor’s credit rating), the reversal of the previously recognised impairmentloss is recognised in profit or loss.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year or period. Taxable profitdiffers from profit as reported in the consolidated statements of comprehensive income because itexcludes items of income that are taxable, or expenses that are deductible, in other years, and italso excludes items that are not taxable or deductible in any year. The Group’s liability for currenttax is calculated using tax rates that have been enacted or substantively enacted by the end ofreporting period.

Deferred tax is recognised in respect of temporary differences between the carrying amountsof assets and liabilities for financial reporting purposes and the corresponding amounts used fortax purposes. Except for recognised assets and liabilities that affect neither accounting nor taxableprofit, deferred tax liabilities are recognised for all taxable temporary differences. Deferred taxassets are recognised to the extent that it is probable that taxable profit will be available againstwhich deductible temporary differences can be utilised. Deferred tax is measured at the tax ratesappropriate to the expected manner in which the carrying amount of the asset or liability isrealised or settled and that have been enacted or substantively enacted at the end of reportingperiod.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to setoff current tax assets against current tax liabilities and when they relate to income taxes levied bythe same taxation authority and the Group intends to settle its current tax assets and liabilities on anet basis.

Leases

A new standard in relation to accounting treatment for leases, known as HKFRS 16, has beenissued, but it has not yet come into effect, nor are we an early adopter. For lessee accounting, thisnew standard introduces a single accounting model and requires a lessee to recognise assets andliabilities for all leases with a term of more than 12 months, unless the underlying asset is of lowvalue. A lessee is required to recognise a right-of-use asset representing its right to use theunderlying leased asset and a lease liability representing its obligation to make lease payments.


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As we are currently, and will continue to be, a lessee of certain office premises which areclassified as operating leases, these new provisions for accounting treatment of leases is potentiallyrelevant to our financial statements. This new standard is not expected to apply until the financialyear beginning on 1 January 2019. For further details, see Note 3 of the Accountant’s Report setout in Appendix I to this prospectus.

Application of HKFRS 16 will result in the Group’s recognition of right-of-use assets andcorresponding liabilities in respect of its operating lease arrangements. These assets and liabilitiesare currently not required to be recognised but certain relevant information is disclosed in Note22(a) of the Accountant’s Report.

As set out in Note 22(a) of the Accountant’s Report, the total future minimum lease paymentsunder non-cancellable operating leases of the Group in respect of office and shop premises as at 30April 2017 amounted to approximately RMB26.4 million. The Directors do not expect the adoptionof HKFRS 16 as compared with the current accounting policy to result in a significant impact onthe Group’s financial performance but it is expected that the Group will have to separatelyrecognise the interest expense on the lease liabilities and the depreciation expense on the right-of-use assets, and that certain portion of the future minimum lease payments under the Group’soperating leases will be required to be recognised in the Group’s consolidated statements offinancial position as right-of-use assets and lease liabilities. The Group will also be required toremeasure the lease liabilities upon the occurrence of certain events, such as a change in the leaseterm, and recognise the amount of the remeasurement of the lease liabilities as an adjustment tothe right-of-use assets. In addition, payments for the principal portion of the lease liabilities willbe presented within financing activities in the Group’s consolidated statements of cash flow.

KEY FACTORS AFFECTING OUR BUSINESS, RESULTS OF OPERATIONS ANDFINANCIAL POSITION

Our business, results of operations and financial position have been, and will continue to be,affected by a number of factors, many of which are beyond our control. For further details, see thesection headed ‘‘Risk Factors’’. Such factors include, without limitation, the following:

Economic conditions and the state of the real estate market in Guangzhou and elsewhere inthe Pearl River Delta

The property market in Guangzhou and elsewhere in the Pearl River Delta has experiencedstable growth in recent years. Economic growth, urbanisation and rising living standards in Chinahave been the key drivers behind increasing market demand for residential properties. As weprovide property research and consultancy services, real estate agency services, and integratedservices in relation to the property market in Guangzhou and elsewhere in the Pearl River Delta,any adverse movements in the supply of, or demand for, properties in this area, or in theprevailing prices of such properties, may have a significant impact on our business, results ofoperations, and financial position.

These property markets may be affected by local, regional, national, and global factors,including economic and financial conditions, speculative activities in local markets, the demandfor and supply of properties, the availability of alternative investment choices for property buyers,inflation or deflation, government policies, interest rates, and the availability of capital. Demand


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for properties and property prices in Guangzhou and elsewhere in the Pearl River Delta havefluctuated significantly in recent years and are expected to continue to be affected bymacroeconomic measures implemented by the PRC government from time to time. Furtherrestrictive measures adopted by the PRC government on mortgage loans and property purchaseshave had, and may continue to have, a dampening effect on property markets in many areas of thePRC, including Guangzhou and elsewhere in the Pearl River Delta. Any general economicdownturn or downturn in the real estate market in Guangzhou and the Pearl River Delta couldadversely affect our business, results of operations, and financial position. See the section entitled‘‘Risk Factors — Risks Relating to Our Business — Our business is heavily dependent on the stateof the real estate market in Guangzhou and elsewhere in the Pearl River Delta.’’.

Regulatory measures in the real estate industry in China

Policies and measures relating to the PRC real estate industry implemented by the PRCgovernment have a direct impact on our business and results of operations. These includegovernmental regulations and policies in relation to property research and consultancy services,real estate agency services, and integrated services. For example, regulations directly impactingour business include the Law on Administration of the Urban Real Estate (城市房地產管理法), theProvisions on the Administration of Real Estate Brokerage (房地產經紀管理辦法), the Regulationon Guangzhou Real Estate Agency Services Administration (廣州市房地產中介服務管理條例), theProvision on the Sale of Commercial Houses (商品房銷售管理辦法) and the Provision onManagement of Brokers (經紀人管理辦法). For further details, see the sections headed‘‘Regulatory Overview’’ and ‘‘Risk Factors — Risks Relating to Our Business — Our business issubject to various regulations imposed by the PRC government, as the real estate industry as awhole is highly regulated.’’.

We are also indirectly impacted by regulations such as those that aim to affect the real estatemarket more broadly, including property development and property investment. From time to time,the PRC government adjusts its macroeconomic policies to encourage or restrict development andsales in the property sector, both to avoid overheating and to achieve a more balanced andsustainable economic growth. Property developers are the principal clients for our propertyresearch and consultancy services and our primary market real estate agency services. Propertyinvestors are a vital source of business both as buyers in relation to our primary market real estateagency services and as clients in relation to our secondary market real estate agency services. Assuch, regulations impacting property development and property investment will indirectly impactour business.

The PRC government exerts considerable influence over the growth and development of thePRC property market through policies and other economic measures, for example, by adjustinginterest rates, controlling the supply of credit by changing bank reserve ratios and implementinglending restrictions, increasing tax and duty on property transfers, and imposing restrictions onforeign investment and currency exchange. The PRC government has also acted to control thesupply of land for property development, which could impact our property research andconsultancy business. Recent government measures along these lines have generally aimed toresult in downward pricing pressure on the PRC property market and have impacted the buoyancyof the primary and secondary real estate markets in which we operate.


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For 2015, 2016, and the four months ended 30 April 2017, approximately 95.1%, 88.2%, and89.2% of the Group’s total revenue, respectively, was derived from primary and secondary realestate agency services, which mainly represented commission from the sale of residentialproperties. For a breakdown of the commission received by real estate sales and leasingtransaction, see the section headed ‘‘— Principal components of Our Consolidated Statements ofComprehensive Income — Revenue’’.

According to the DTZ C&W Report, quoting the Statistical Bulletin of National Economicsand Social Development of Guangzhou, the average selling price of primary commodity residentialproperties in Guangzhou grew at a CAGR of 8.4% in the period from 2011 to 2016. While there isno official data for the average price level of secondary commodity residential properties inGuangzhou, it generally follows the same market trends as primary commodity residentialproperties.

The table below sets forth a sensitivity analysis illustrating the impact on our profit beforeincome tax for the Track Record Period based on the changes in the average price level ofcommodity residential properties, with all other variables held constant. This sensitivity analysis isfor illustrative purposes only in Guangzhou.

Percentage

increase/

(decrease)

Increase/(decrease) in profit before income tax

Year ended

31 December

Four months ended

30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

Real estate agency service fee

4.2% 3,595 3,940 1,381 1,622

(4.2)% (3,595) (3,940) (1,381) (1,622)

8.4% 7,191 7,879 2,762 3,243

(8.4)% (7,191) (7,879) (2,762) (3,243)

Operating expenses and effective cost control measures

Our results of operations are affected by employee benefit expenses, advertising, promotionand other commission expenses, and operating lease charges in respect of our office and shoppremises, among which, employee benefit expenses and operating lease charges are generallysensitive to the overall economy and to general fluctuations in the average salary and retail rentlevel, respectively. Our property research and consultancy services and real estate agency servicesare provided primarily through the work carried out by our employees. For 2015, 2016, and thefour months ended 30 April 2017, our employee benefit expenses were approximately RMB59.1million, RMB70.2 million, and RMB27.5 million respectively, which was approximately 65.6%,66.0%, and 63.5% of our revenue, respectively. The increase from 2015 to 2016 represented ayear-on-year growth of 18.8% and the increase from the four months ended 30 April 2016 to thefour months ended 30 April 2017 represented a period-on-period growth of 38.0%.

During the Track Record Period, our results of operations were also affected, to a smallerextent, by our expenses in relation to the operating lease expenses paid for our office and shoppremises. Although our operating lease charges in respect of office and shop premises as a


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percentage of revenue decreased from 5.4% for 2015 to 4.9% for 2016, the absolute amount ofthese charges increased by 6.6% year-on-year. For the four months ended 30 April 2017, ouroperating lease charges in respect of office and shop premises as a percentage of revenue was5.7%, which had increased from 4.4% for the same period in 2016.

According to the DTZ C&W Report and the Guangzhou Statistical Bureau, the averageannual salary level in Guangzhou increased from RMB57,473 per capita in 2011 to RMB89,096per capita in 2016, representing a CAGR of 9.2%. According to DTZ C&W, the prime retail rentalindex has shown a year-on-year fluctuation between approximately 0.5% and 8.5% in the periodfrom the fourth quarter of 2011 to the second quarter of 2017.

The table below sets forth a sensitivity analysis illustrating the impact on our profit beforeincome tax for the Track Record Period based on hypothetical changes in our employee benefitexpenses and our operating lease charges in respect of office and shop premises, with all othervariables held constant. The hypothetical changes for our employee benefit expenses and ouroperating lease charges are the upper limits of the ranges cited in the preceding paragraph and halfof these limits. This sensitivity analysis is for illustrative purposes only.

Percentage

increase/

(decrease)

Increase/(decrease) in profit before income tax

Year ended

31 December

Four months ended

30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

Employee benefit expenses 4.6% (2,717) (3,229) (916) (1,264)

(4.6)% 2,717 3,229 916 1,264

9.2% (5,433) (6,457) (1,832) (2,528)

(9.2)% 5,433 6,457 1,832 2,528

Operating lease charges 4.25% (206) (220) (63) (105)

(4.25)% 206 220 63 105

8.5% (412) (440) (126) (211)

(8.5)% 412 440 126 211

Our operating results are directly affected by the effectiveness and efficiency of our costcontrol measures. We intend to implement measures to control the cost of employee benefits andother items which may have a direct and significant effect on our results of operations.


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SUMMARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

The following table sets forth a summary of our consolidated statements of comprehensiveincome derived from our consolidated financial information for the periods indicated:


2015 2016 2016 2017

RMB’000 % RMB’000 % RMB’000 % RMB’000 %

(unaudited)

Revenue 90,059 100.0% 106,345 100.0% 33,548 100.0% 43,271 100.0%

Other income and gain 121 0.1% 565 0.5% 295 0.9% 130 0.3%

Employee benefit expenses (59,059) 65.6% (70,186) 66.0% (19,913) 59.4% (27,482) 63.5%

Advertising, promotion and other

commission expenses (2,795) 3.1% (6,776) 6.4% (893) 2.7% (1,279) 3.0%

Operating lease charges in respect

of office and shop premises (4,852) 5.4% (5,173) 4.9% (1,485) 4.4% (2,482) 5.7%

Depreciation of property, plant and

equipment (404) 0.4% (393) 0.4% (99) 0.3% (163) 0.4%

Other operating expenses (4,065) 4.5% (3,492) 3.3% (1,170) 3.5% (1,559) 3.6%

Listing expenses — — — — — — (8,166) 18.9%

Profit before income tax 19,005 21.1% 20,890 19.6% 10,283 30.6% 2,270 5.2%

Income tax (6,112) 6.8% (5,563) 5.2% (3,291) 9.8% (2,948) 6.8%

Profit/(loss) and total

comprehensive income for

the year 12,893 14.3% 15,327 14.4% 6,992 20.8% (678) (1.6)%

PRINCIPAL COMPONENTS OF OUR CONSOLIDATED STATEMENTS OFCOMPREHENSIVE INCOME

Revenue

Our revenue consists of (i) property research and consultancy service fees, (ii) real estateagency service fees generated from the provision of property market information and agencyservices to clients in both the primary and secondary property markets, and (iii) integrated servicesincome, which includes our Fangyuanbao platform for referrals, our Zhaoshangyi services to assistproperty developers in sourcing prospective lessees for commercial units and our One-stop ServiceCentre business, which provides customers with ancillary services.


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For 2015, 2016, and the four months ended 30 April 2017, our revenue was RMB90.1million, RMB106.3 million, and RMB43.3 million, respectively. The major source of our revenueduring the Track Record Period was from real estate agency service fees, which mainlyrepresented commission from the sale or leasing of properties. The following table sets out abreakdown of commission received for real estate sales and leasing transactions for our real estateagency services during the Track Record Period:


2015 2016 2016 2017

RMB’000 % RMB’000 % RMB’000 % RMB’000 %

(unaudited)

Commission from sale of properties 79,287 92.6 86,967 92.7 30,906 94.0 35,922 93.0

Commission from leasing of

properties 6,319 7.4 6,832 7.3 1,970 6.0 2,691 7.0

Total revenue from real estate

agency services 85,606 100 93,799 100 32,876 100 38,613 100

During the Track Record Period, all of our revenue was derived from the provision ofservices in the PRC.

The following table sets forth a breakdown of our revenue for the periods indicated:


Four months ended

30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(unaudited)

Real estate agency service fees 85,606 93,799 32,876 38,613


service fees 3,133 3,193 273 318

Integrated Services income 1,320 9,353 399 4,340

Total revenue 90,059 106,345 33,548 43,271

For 2015, 2016, and the four months ended 30 April 2017, our revenue from real estateagency service fees was RMB85.6 million, RMB93.8 million, and RMB38.6 million, respectively,accounting for approximately 95.1%, 88.2%, and 89.2% of our total revenue for these periods,respectively.


– 189 –

Other income and gain

Our other income primarily consists of interest income. For 2015, 2016, and the four monthsended 30 April 2017, we received interest income of approximately RMB0.1 million, RMB0.5million, and RMB34,000, respectively, accounting for 100%, approximately 94.3%, and 26.2%,respectively, of our other income and gain. In the four months ended 30 April 2017, we disposedof a motor vehicle which resulted in an approximately RMB96,000 gain on disposal of property,plant and equipment. In 2016, we acquired a 100% equity interest in Fang Yuan Bao forconsideration that was slightly less than the fair value of the net assets acquired, which resulted inan approximately RMB32,000 gain on bargain purchase from the business combination. Thediscount was agreed to by the former owners of Fang Yuan Bao due to the lack of a stable trackrecord of the business, as it had only been in operation for a short period. For further details, seeNote 21 of the Accountant’s Report set out in Appendix I to this prospectus.

The following table sets forth a breakdown of our other income and gain for the periodsindicated:


Four months ended

30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(unaudited)

Interest income 121 533 295 34

Gain on disposal of property, plant and

equipment — — — 96

Gain on bargain purchase — 32 — —

121 565 295 130

Employee benefit expenses

Employee benefit expenses primarily consist of salaries, allowances and other benefits, andcontributions and charges to retirement benefits schemes for employees. For 2015, 2016, and the fourmonths ended 30 April 2017, our employee benefit expenses amounted to RMB59.1 million, RMB70.2million, and RMB27.5 million, respectively. These amounts also included remuneration for ourdirectors. For further details on directors’ remuneration, see ‘‘Directors, Senior Management andEmployees — Remuneration of Directors and Senior Management’’ and Note 11 of theAccountant’s Report set out in Appendix I.


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The following table sets forth a breakdown of our employee benefit expenses for the periodsindicated:


Four months ended

30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(unaudited)

Salaries, allowances and other benefits 54,904 65,061 18,434 24,009

Contributions and charges to retirement

benefits scheme 4,155 5,125 1,479 3,473

59,059 70,186 19,913 27,482

Advertising, promotion and other commission expenses

Our advertising, promotion and other commission expenses primarily consist of (i)advertising and promotion expenses incurred in relation to certain real estate projects where wewere engaged to provide property research and consultancy services or real estate agency services,(ii) various expenses incurred by our outlets, such as for signage and the printing of marketingmaterials, and (iii) referral rewards and commission fees paid out for successful introductions tobuyers for certain real estate projects under the Fangyuanbao platform. To encourage referrals ofnew customers, we use incentive schemes for our employees and reward schemes for existingcustomers. For 2015, 2016, and the four months ended 30 April 2017, our advertising, promotionand other commission expenses amounted to approximately RMB2.8 million, RMB6.8 million, andRMB1.3 million, respectively.

Operating lease charges in respect of office and shop premises

Our operating lease charges in respect of office and shop premises primarily consist of rentalfees for our office equipment, such as a photocopier, and leases for our office premises and realestate agency outlets. For 2015, 2016, and the four months ended 30 April 2017, our operatinglease charges in respect of office and shop premises amounted to RMB4.9 million, RMB5.2million, and RMB2.5 million, respectively.

Depreciation of property, plant and equipment

Our depreciation of property, plant and equipment consists of depreciation in relation tofurniture, fixtures and equipment; motor vehicles; computer equipment and software; and leaseholdimprovements such as renovations of our real estate agency outlets.


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The following table sets forth a breakdown of the cost, accumulated depreciation, andcarrying amounts as at 31 December 2015 and 2016, and 30 April 2017 for each category of ourproperty, plant and equipment:

Furniture,fixtures andequipment

Motorvehicles

Computerequipment

and softwareLeasehold

improvements Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

COST

As at 1 January 2015 453 1,907 1,381 1,172 4,913Additions — — 41 48 89Disposals — (736) — (18) (754)

As at 31 December 2015and 1 January 2016 453 1,171 1,422 1,202 4,248

Additions 18 — 208 953 1,179Business combination — — 91 — 91Disposals — (261) — (109) (370)

As at 31 December 2016and 1 January 2017 471 910 1,721 2,046 5,148

Additions — — 76 362 438Disposals — (910) — (105) (1,015)

As at 30 April 2017 471 — 1,797 2,303 4,571

ACCUMULATED DEPRECIATION

As at 1 January 2015 (263) (1,711) (1,165) (718) (3,857)Depreciation for the year (86) (77) (96) (145) (404)Eliminated on disposal — 675 — 1 676

As at 31 December 2015 and1 January 2016 (349) (1,113) (1,261) (862) (3,585)

Depreciation for the year (68) — (141) (184) (393)Eliminated on disposals — 248 — 109 357

As at 31 December 2016 and1 January 2017 (417) (865) (1,402) (937) (3,621)

Depreciation for the period (4) — (54) (105) (163)Eliminated on disposals — 865 — 70 935

As at 30 April 2017 (421) — (1,456) (972) (2,849)

CARRYING AMOUNTS

As at 31 December 2015 104 58 161 340 663

As at 31 December 2016 54 45 319 1,109 1,527

As at 30 April 2017 50 — 341 1,331 1,722


– 192 –

Other operating expenses and Listing expenses

Our other operating expenses primarily consist of office expenses, motor vehicle expenses,travel expenses and other miscellaneous expenses such as property insurance. Our listing expensesconsist of non-recurring expenses relating to the Listing and the Share Offer. For further details,see ‘‘Listing Expenses’’ in this section.

Income tax

We are subject to income tax on an entity basis on the profit arising in or derived from thetax jurisdictions in which we are domiciled and those in which we operate. Under the rules andregulations of the Cayman Islands and British Virgin Islands, the Group’s entities incorporated inthe Cayman Islands and British Virgin Islands are not subject to any income tax.

No provision for Hong Kong profit tax has been made in the financial information, as we hadno estimated assessable profit arising in Hong Kong during the Track Record Period.

The statutory corporate income tax rate is 25% of an enterprise’s profit before income tax, asreported in its statutory accounts which are prepared in accordance with the relevant PRCaccounting standards, as adjusted for income items which are not assessable and expense itemswhich are not deductible for income tax purposes.

Our Directors confirm that we had made all required tax filings under the relevant tax lawsand regulations in the relevant jurisdictions where we conducted our business and had fully paidall outstanding tax liabilities, and that we were not subject to any administrative penalties, disputeor potential dispute with the tax authorities, during the Track Record Period and as at the LatestPracticable Date.

Our effective income tax rate for 2015, 2016, and the four months ended 30 April 2017 was32.2%, 26.6%, and 129.9%, respectively. The increase in our effective income tax rate for the fourmonths ended 30 April 2017 was primarily due to an increase in certain listing expenses that werenot deductible for tax purposes. For 2015, 2016, and the four months ended 30 April 2017, ourincome tax expenses were RMB6.1 million, RMB5.6 million, and RMB2.9 million, respectively.For further details, see Note 12(a) of the Accountant’s Report set out in Appendix I to thisprospectus.

Deferred tax assets and liabilities generally arise from temporary differences between thecarrying amounts of assets and liabilities and the corresponding tax bases used in the computationof taxable profit.


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The following table sets forth a breakdown of our income tax expenses between current taxand deferred tax for the periods indicated:


Four months ended

30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(unaudited)

Current tax (corporate income tax)

— provision for the year/period 4,680 5,225 2,514 2,280

— over provision in respect of prior

year — — — (29)

4,680 5,225 2,514 2,251

Deferred tax 1,432 338 777 697

6,112 5,563 3,291 2,948

As at 31 December 2015 and 2016, and 30 April 2017, we did not have any other materialunrecognised deferred tax assets or liabilities.

RESULTS OF OPERATIONS

Four months ended 30 April 2017 compared to the four months ended 30 April 2016

Revenue

Our revenue increased by RMB9.7 million, or 29.0%, from RMB33.5 million for the fourmonths ended 30 April 2016 to RMB43.3 million for four months ended 30 April 2017, which wasprimarily due to increases in revenue from real estate agency services and Integrated Services.

We recorded a RMB5.7 million, or 17.5%, increase in fees from real estate agency services,from RMB32.9 million for the four months ended 30 April 2016 to RMB38.6 million for the fourmonths ended 30 April 2017, which was mainly attributable to an increase in our revenuegenerated from primary market agency services and our revenue generated from the additionaloutlets that were open in the four months ended 30 April 2017. We recorded a RMB3.9 millionincrease in fees from Integrated Services, which rose from RMB0.4 million for the four monthsended 30 April 2016 to RMB4.3 million for the four months ended 30 April 2017. This increasewas primarily attributable to the acquisition of Fang Yuan Bao in May 2016, which contributedapproximately RMB3.4 million to our revenue in the four months ended 30 April 2017. Our feesfrom property research and consultancy services remained steady at approximately RMB0.3million for the four months ended 30 April 2016 and RMB0.3 million for the four months ended30 April 2017.


– 194 –


Our other income and gain decreased by RMB0.2 million, from RMB0.3 million for the fourmonths ended 30 April 2016 to RMB0.1 million for the four months ended 30 April 2017, whichprimarily reflected a decrease of RMB261,000 in interest income from financial products we held,which was partially offset by a gain of RMB96,000 from the disposal of a motor vehicle in 2017.


Our employee benefit expenses increased by RMB7.6 million, or 38.0%, from RMB19.9million for the four months ended 30 April 2016 to RMB27.5 million for the four months ended 30April 2017, which was primarily due to increases in employee salaries and in the number of ouremployees as part of our expansion, from 535 as at 30 April 2016 to 630 as at 30 April 2017.


Our advertising, promotion and other commission expenses increased by RMB0.4 million, or43.2%, from RMB0.9 million for the four months ended 30 April 2016 to RMB1.3 million for thefour months ended 30 April 2017, which was primarily due to commission expenses relating to ourfangyuanbao platform, which we acquired in May 2016. With the launch of the fangyuanbaoplatform, we began paying commission to third-party real estate agents that introduced successfulbuyers for properties displayed on the platform.


Our operating lease charges in respect of office and shop premises increased by RMB1.0million, or 67.1%, from RMB1.5 million for the four months ended 30 April 2016 to RMB2.5million for the four months ended 30 April 2017, primarily due to the number of new real estateagency outlets that we leased during the four months ended 30 April 2017.


Depreciation of property, plant and equipment increased by approximately RMB64,000, or64.6%, from RMB99,000 for the four months ended 30 April 2016 to RMB163,000 for the fourmonths ended 30 April 2017, primarily due to the additions of computer equipment and softwareand leasehold improvements such as renovations of our real estate agency outlets which waspartially offset by the disposals of motor vehicles.

Other operating expenses and Listing expenses

Our other operating expenses increased by RMB0.4 million, or 33.2%, from approximatelyRMB1.2 million for the four months ended 30 April 2016 to RMB1.6 million for the four monthsended 30 April 2017, primarily due to the increase in office and related miscellaneous expenses asa result of operating the additional real estate agency outlets we opened in 2017.

Listing expenses of RMB8.2 million were recognised for the four months ended 30 April2017. No such expenses were incurred for 2015, 2016, including the four months ended 30 April2016.


– 195 –

Profit before income tax

As a result of the factors described above, our profit before income tax decreased by RMB8.0million, or 77.9%, from RMB10.3 million for the four months ended 30 April 2016 to RMB2.3million for the four months ended 30 April 2017. Excluding the non-recurring listing expenses ofRMB8.2 million incurred during the four months ended 30 April 2017, we would have recorded aprofit before income tax of RMB10.4 million for the four months ended 30 April 2017.

Income tax

Our income tax expense decreased by RMB0.3 million, or 10.4%, from RMB3.3 million forthe four months ended 30 April 2016 to RMB2.9 million for the four months ended 30 April 2017.This change was primarily due to a decrease in our profit before income tax between these twoperiods and an increase in certain listing expenses that were not deductible for tax purposes.

Profit/(loss) and total comprehensive income for the period

As a result of the foregoing, we changed from a profit of RMB7.0 million for the fourmonths ended 30 April 2016 to a loss of RMB0.7 million for the four months ended 30 April2017. Excluding the non-recurring listing expenses of RMB8.2 million incurred during the fourmonths ended 30 April 2017, we would have recorded a profit of RMB7.5 million for the fourmonths ended 30 April 2017.

For the four months ended 30 April 2016 and 2017, excluding the non-recurring listingexpenses incurred, our net profit margins were 20.8% and 17.3%, respectively. The lower netprofit margin for the four months ended 30 April 2017 was mainly due to higher operatingexpenses incurred for the new outlets opened in the four months ended 30 April 2017 as comparedto the four months ended 30 April 2016, resulting in a lower profit before income tax.

2016 compared with 2015

Revenue

Our revenue increased by RMB16.3 million, or 18.1%, from RMB90.1 million for 2015 toRMB106.3 million for 2016, primarily due to increases in revenue from real estate agency servicesand Integrated Services.

We recorded an RMB8.2 million, or 9.6%, increase in fees from real estate agency services,from RMB85.6 million for 2015 to RMB93.8 million for 2016, which was mainly attributable toincreases in both the transaction volume and the transaction amounts of our real estate agencyprojects. We recorded an RMB8.0 million increase in fees from Integrated Services, which rosefrom RMB1.3 million for 2015 to RMB9.4 million for 2016. This increase was primarilyattributable to the acquisition of Fang Yuan Bao in May 2016, which contributed approximatelyRMB7.4 million to our revenue in 2016. Our fees from property research and consultancy servicesremained steady at RMB3.1 million for 2015 and RMB3.2 million for 2016.


– 196 –


Our other income and gain increased by RMB0.4 million, from RMB0.1 million for 2015 toRMB0.6 million for 2016, which was mainly attributable to interest received on financial productswe held in 2016. Also contributing to the increase for 2016 was our acquisition of Fang Yuan Baofor consideration that was less than the fair value of the net assets acquired, resulting in aRMB32,000 gain on bargain purchase, representing the difference between the net value of theacquired assets and the purchase price for the company.


Our employee benefit expenses increased by RMB11.1 million, or 18.8%, from RMB59.1million for 2015 to RMB70.2 million for 2016, primarily due to increases in employee salaries andin the number of our employees, which rose from 500 at the beginning of 2016 to 784 at the endof 2016.


Our advertising, promotion and other commission expenses increased by RMB4.0 million,from RMB2.8 million for 2015 to RMB6.8 million for 2016, primarily due to the commissionexpenses relating to our Fangyuanbao platform, which was launched in 2016. With the launch ofthe Fangyuanbao platform, we began paying commission to third-party real estate agents thatintroduced successful buyers for properties displayed on the platform.


Our operating lease charges in respect of office and shop premises increased by RMB0.3million, or 6.6%, from RMB4.9 million for 2015 to RMB5.2 million for 2016, primarily due to thenumber of new real estate agency outlets that we leased in 2016.


Depreciation of property, plant and equipment decreased by approximately RMB11,000, or2.7%, from RMB404,000 for 2015 to RMB393,000 for 2016, primarily due to disposals of motorvehicles, which offset additions of computer equipment and software and leasehold improvementssuch as renovations of our real estate agency outlets.

Other operating expenses

Our other operating expenses decreased by RMB0.6 million, or 14.1%, from approximatelyRMB4.1 million for 2015 to approximately RMB3.5 million for 2016, primarily as a result of thecessation at the end of 2015 of a programme providing employee transport with company motorvehicles and because the Group employed local staff for the primary market property agencyprojects in Hainan and Zhanjiang in 2016 instead of deploying staff from Guangzhou, which wasthe case in 2015, thus reducing travel expenses in 2016.


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Profit before income tax

As a result of the factors described above, our profit before income tax increased by RMB1.9million, or 9.9%, from RMB19.0 million for 2015 to RMB20.9 million for 2016.

Income tax

Our income tax expense decreased by RMB0.5 million, or 9.0%, from RMB6.1 million for2015 to RMB5.6 million for 2016. The current tax portion of our income tax expense increased byRMB0.5 million, or 11.6%, from RMB4.7 million for 2015 to RMB5.2 million for 2016, primarilydue to an increase in our profit before income tax. Our effective tax rate in 2015 and 2016 was32.2% and 26.6%, respectively.

Profit and total comprehensive income for the year

As a result of the foregoing, our profit increased by RMB2.4 million, or 18.9%, fromRMB12.9 million for 2015 to RMB15.3 million for 2016. Our net profit margin remained steady at14.3% for 2015 and 14.4% for 2016.

LIQUIDITY AND CAPITAL RESOURCES

We have historically financed our operations primarily through cash flow from operations andinternal resources. We require cash for our working capital requirements, such as the provision ofour services, the payment of employee benefit expenses, advertising, promotion and othercommission expenses, operating lease charges for office and shop premises, and other operatingexpenses. Any significant decrease in demand for, or the pricing of, our services may adverselyimpact our liquidity. Going forward, we expect that our working capital and other liquidityrequirements will be satisfied through a combination of cash generated from our operatingactivities and the proceeds from the Share Offer.


– 198 –

Cash flow

Our Group’s cash and cash equivalents were RMB27.2 million, RMB58.2 million, andRMB54.7 million as at 31 December 2015 and 2016, and 30 April 2017, respectively. Thefollowing table sets forth our cash flow for the periods indicated:


Four months ended

30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(unaudited)

Net cash generated from operating

activities 13,537 26,309 619 2,088

Net cash generated from/(used in)

investing activities 68 19,746 286 (1,092)

Net cash generated from/(used in)

financing activities 5,983 (15,128) (1,312) (4,479)

Net increase/(decrease) in cash and

cash equivalents 19,588 30,927 (407) (3,483)

Cash and cash equivalents at

beginning of year 7,652 27,240 27,240 58,167

Cash and cash equivalents at end of

year 27,240 58,167 26,833 54,684

Even after excluding the cash flows generated from the transactions with the ControllingShareholders and the cash flows generated from the Fangyuanbao business, the cash flowgenerated from our operating activities in the ordinary and usual course of our business beforechanges in working capital and taxes paid amounted to approximately RMB20.2 million (orapproximately HK$23.1 million) in aggregate for the two years ended 31 December 2016, whichstill exceeds the minimum cash flow requirement under Rule 11.12A of the GEM Listing Rules.

Net cash generated from operating activities

For the four months ended 30 April 2017, our net cash generated from operating activitieswas RMB2.1 million, primarily reflecting cash generated from operations of RMB3.4 million, netof income tax payments of RMB1.3 million during this period.

For 2016, our net cash generated from operating activities was RMB26.3 million, primarilyreflecting cash generated from operations of RMB33.6 million, net of income tax payments ofRMB7.3 million during the year.

While our cash generated from operations for the four months ended 30 April 2017 wasRMB3.4 million, our profit before income tax was RMB2.3 million. The difference of RMB1.1million represents adjustments for profit or loss items with non-cash effects of RMB72,000, an


– 199 –

adjustment for interest income of RMB34,000, and overall positive working capital adjustments ofRMB1.1 million. Within working capital, a RMB3.1 million decrease in trade receivables was duein part to our increased efforts to recover such amounts, a RMB4.6 million increase in accrualsand other payables was primarily driven by higher employee compensation, and a RMB3.1 millionincrease in deposits, prepayments and other receivables was principally driven by deposits paid fornew real estate agency outlets we began leasing in 2017 as well as certain prepaid listing expenses.

While our cash generated from operations for 2016 was RMB33.6 million, our profit beforeincome tax was RMB20.9 million. The difference of RMB12.7 million represents adjustments forprofit or loss items with non-cash effects of RMB0.7 million, an adjustment for interest income ofRMB0.5 million, and overall positive working capital adjustments of RMB12.5 million. Withinworking capital, a RMB9.1 million decrease in amounts due from fellow subsidiaries wasprimarily due to our increased efforts to recover such amounts in 2016, a RMB7.7 million increasein accruals and other payables was primarily driven by higher employee compensation andadditional accrual for underpaid social insurance fund contributions, and a RMB5.1 millionincrease in trade receivables was principally driven by an increase in proceeds from our primarymarket real estate agency services.

For 2015, our net cash generated from operating activities was RMB13.5 million, primarilyreflecting cash generated from operations of RMB14.6 million, net of income tax payments ofRMB1.1 million during the year.

While our cash generated from operations in 2015 was RMB14.6 million, our profit beforeincome tax was RMB19.0 million. The difference of RMB4.4 million represents adjustments forprofit or loss items with non-cash effects of RMB0.5 million, and adjustment for interest incomeof RMB0.1 million, and overall negative working capital adjustments of RMB4.7 million. Withinworking capital, a RMB4.6 million increase in trade receivables was principally driven by anincrease in proceeds from our primary market real estate agency services, a RMB2.6 millionincrease in amounts due from fellow subsidiaries was principally driven by an increase in thetransaction amounts of the projects for which we were engaged by related parties to provideprimary market real estate agency services, and a RMB2.3 million increase in accruals and otherpayables was driven by a higher level of bonuses owed to employees.

Net cash generated from investing activities

During the Track Record Period, our cash outflow for investing activities was principallyused for additions of property, plant and equipment, including office furniture, computerequipment and software, which were partially offset by interest income received from financialproducts and bank deposits.

For the four months ended 30 April 2017, our net cash used in investing activities wasRMB1.1 million, which primarily consisted of RMB0.9 million in deposits paid for acquisition ofproperty, plant and equipment, including deposits for a motor vehicle and for renovations tocertain real estate agency outlets, and RMB0.4 million in purchases of property, plant andequipment, including purchase of computer equipment and air conditioning units.


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For 2016, our net cash generated from investing activities was RMB19.7 million, which wasprimarily due to a RMB20.0 million decrease in amounts due from a fellow subsidiary reflectingrepayment of an intra-group loan. This cash inflow was partially offset by purchases of property,plant and equipment in an amount of RMB1.2 million for renovations of our real estate agencyoutlets.

For 2015, our net cash generated from investing activities was RMB68,000, which primarilyconsisted of interest income of RMB0.1 million and RMB36,000 of proceeds from the disposal ofcompany motor vehicles which were no longer required. This cash inflow was partially offset by aRMB89,000 purchase of property, plant and equipment, including computer equipment andsoftware and leasehold improvements.

Net cash flow used in financing activities

During the Track Record Period, our financing cash outflow was principally due to thepayment of dividends and repayments to fellow subsidiaries.

For the four months ended 30 April 2017, our net cash used in financing activities wasRMB4.5 million, which reflected a decrease of RMB4.5 million in the amount due to a fellowsubsidiary for a loan used primarily to finance our listing expenses.

For 2016, our net cash used in financing activities amounted to RMB15.1 million, whichreflected a dividend payment of RMB13.6 million to former equity holders of a group companyand a decrease of RMB1.5 million in the amount due to a fellow subsidiary for a loan usedprimarily to finance our listing expenses.

For 2015, our net cash generated from financing activities was RMB6.0 million, which wasattributable to an increase in amounts due to fellow subsidiaries in relation to an intra-group loan.


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NET CURRENT ASSETS

The following table sets forth our current assets and liabilities as at the dates indicated:

As at 31 DecemberAs at

30 April

2017

As at

31 August

20172015 2016

RMB’000 RMB’000 RMB’000 RMB’000

(unaudited)

Current assets

Trade receivables 4,963 9,804 6,697 9,451

Deposits, prepayments and other

receivables 1,146 3,375 6,480 6,445

Amounts due from fellow subsidiaries 38,497 9,391 10,849 5,415

Bank balances and cash 27,240 58,167 54,684 47,070

Total current assets 71,846 80,737 78,710 68,381

Current liabilities

Trade payables — 3,169 1,073 1,377

Accruals and other payables 17,891 26,002 30,610 19,131

Dividend payable 16,385 14,637 14,637 14,637

Amounts due to fellow subsidiaries 5,983 4,479 — —

Tax payable 3,596 1,534 2,514 2,199

Total current liabilities 43,855 49,821 48,834 37,344

Net current assets 27,991 30,916 29,876 31,037

As at 31 December 2015 and 2016, we had net current assets of RMB28.0 million andRMB30.9 million, respectively. The 10.4% increase in our net current assets between these twodates was primarily attributable to a net increase in cash and cash equivalents driven by our cashgenerated from operating activities.

As at 30 April 2017, our net current assets were RMB29.9 million, consisting of currentassets of RMB78.7 million and current liabilities of RMB48.8 million. This was largely similar toour net current assets as at 31 December 2016, reflecting a slight decrease of RMB1.0 million, or3.4%, and was primarily attributable to an approximately RMB3.5 million decrease in our bankbalances and cash, which in part was reflected in (and was partially offset by) an approximatelyRMB2.1 million decrease in trade payables, and an approximately RMB4.6 million increase inaccruals and other payables due to an increase in business through the Fangyuanbao platform,which was partially offset by an approximately RMB4.5 million decrease in amounts due to fellowsubsidiaries following our repayment of intra-group loans.


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As at 31 August 2017, our net current assets were RMB31.0 million, consisting of currentassets of RMB68.3 million and current liabilities of RMB37.3 million. The 3.9% increase in ournet current assets from 30 April 2017 was primarily attributable to an approximately RMB11.5million decrease in our accruals and other payables, which was partially offset by a RMB5.4million decrease in our amounts due from fellow subsidiaries and a RMB7.6 million decrease inbank balances and cash.

DISCUSSION OF CERTAIN ITEMS OF CONSOLIDATED STATEMENTS OF FINANCIALPOSITION

Amounts due from fellow subsidiaries

As at 31 December 2015 and 2016, and 30 April 2017, our amounts due from fellowsubsidiaries were RMB38.5 million, RMB9.4 million, and RMB10.8 million, respectively.RMB18.5 million, RMB9.4 million, and RMB10.8 million of these amounts, respectively, weretrade in nature, unsecured and interest-free. The fellow subsidiaries are obliged to settle theseamounts upon delivery of the relevant services or pursuant to the terms and conditions of therelevant agreements, usually on the date invoiced. The balance of the amounts due from fellowsubsidiaries as at 31 December 2015 consisted primarily of intra-group loans that were unsecured,interest free and repayable on demand, and was fully settled during 2016. As at 31 December 2016and 30 April 2017, there were no outstanding non-trade amounts due from fellow subsidiaries.

Trade-nature receivables

Our trade receivables as stated in the Accountant’s Report set out in Appendix I to thisprospectus mainly represent real estate agency service fees receivable from independent customerswhere no general credit terms are granted. A portion of amounts owed from fellow subsidiaries istrade in nature, mainly representing real estate agency service fees receivable from the fellowsubsidiaries. These independent customers and fellow subsidiaries are obliged to settle the amountsdue upon delivery of the relevant services, or pursuant to the terms and conditions of the relevantagreements, usually on the date invoiced.

As at 31 December 2015 and 2016, and 30 April 2017, our trade receivables fromindependent customers amounted to RMB5.0 million, RMB9.8 million, and RMB6.7 million,respectively, while the amounts owed from fellow subsidiaries that are trade in nature amounted toRMB18.5 million, RMB9.4 million, and RMB10.8 million, respectively. Together, our trade-naturereceivables — being our trade receivables from independent customers and the amounts owed fromfellow subsidiaries that are trade in nature — amounted to RMB23.5 million, RMB19.2 million,and RMB17.5 million, respectively. This represented a decrease of RMB4.3 million, or 18.2%,from 31 December 2015 to 31 December 2016, and a further decrease of RMB1.7 million or 8.6%,mainly due to faster collection of amounts owed to us.


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The following table sets forth our trade-nature receivables as at the dates indicated:


30 April

20172015 2016

RMB’000 RMB’000 RMB’000

Trade-nature amounts due from fellow subsidiaries 18,497 9,391 10,849

Trade receivables 5,865 11,075 7,973

Less: Impairment losses for trade receivables (902) (1,271) (1,276)

Total trade-nature receivables 23,460 19,195 17,546

The following table sets forth an ageing analysis of our trade-nature receivables (net ofimpairment loss) based on invoice date, which is also the due date, as at the dates indicated:


30 April

20172015 2016

RMB’000 RMB’000 RMB’000

Within 3 months 10,661 12,167 16,795

4 to 6 months 4,020 5,140 749

7 to 12 months 3,537 1,888 2

Over 1 year 5,242 — —

23,460 19,195 17,546

Given that we generally do not specify credit terms on our invoices or in our agreements withcustomers, substantially all of our trade-nature receivables as at 31 December 2015 and 2016, and30 April 2017 technically were past due. Trade-nature receivables that were past due but notimpaired relate to a number of independent customers that have a good track record with theGroup as well as fellow subsidiaries. Based on past experience, our management believes that noimpairment allowance is necessary in respect of these balances, as there has not been a significantchange in credit quality and the balances are still considered fully recoverable. We do not hold anycollateral over these balances.


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The following table sets forth the movement in impairment loss on our trade-naturereceivables during the years indicated:


30 April

20172015 2016

RMB’000 RMB’000 RMB’000

At beginning of the year (883) (902) (1,271)

Impairment loss recognised (19) (369) (5)

At end of the year (902) (1,271) (1,276)

The following table sets forth our average trade-nature receivables turnover days during theTrack Record Period:


Four months

ended

30 April

20172015 2016

Average trade-nature receivables turnover days(1) 81 73 51

Note:

(1) The average trade-nature receivables turnover days for a given period is the average of the opening and

closing balances of trade receivables plus the average of the opening and closing balances of amounts due

from fellow subsidiaries that are trade in nature for that period divided by the corresponding revenue for that

period and multiplied by 365 days for a year (or 120 days for the four-month period).

Our average trade-nature receivables turnover days decreased from 81 days for 2015 to 73days for 2016 and further to 51 for the four months ended 30 April 2017 principally as a result ofincreased efforts to follow up on outstanding amounts due from customers.

As at 23 October 2017, we had collected RMB14.7 million, or 83.6%, of the trade-naturereceivables outstanding as at 30 April 2017.

Deposits, prepayments and other receivables

Our deposits, prepayments and other receivables during the Track Record Period mainlycomprised prepayments for listing expenses and deposits for our real estate agency outlet leases.

Our deposits, prepayments and other receivables increased by RMB2.2 million, from RMB1.1million as at 31 December 2015 to RMB3.4 million as at 31 December 2016, primarily due toRMB1.6 million of prepaid listing expenses and an increase of approximately RMB0.4 million indeposits paid for new outlets that we began leasing in 2016. As at 30 April 2017, our deposits,


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prepayments and other receivables further increased to RMB6.5 million, primarily due to depositsand other start up costs paid for additional outlets that we began leasing in the first four months of2017.

Amounts due to fellow subsidiaries

Amounts due to fellow subsidiaries primarily reflect intra-group loans. These amounts areunsecured, interest-free and repayable on demand.

As at 31 December 2015 and 2016, and 30 April 2017, the amounts due from us to fellowsubsidiaries were RMB6.0 million, RMB4.5 million, and nil, respectively. The amountsoutstanding as at 31 December 2016 had been fully settled by 30 April 2017.

Trade payables

Our trade payables mainly represent the commissions payable to the real estate agents withwhich we co-operate via the Fangyuanbao platform that we launched in 2016.

As at 31 December 2015 and 2016, and 30 April 2017 our trade payables amounted to nil,RMB3.2 million, and RMB1.1 million, respectively. The following table sets forth an ageinganalysis of trade payables based on invoice date as at the dates indicated:


30 April

20172015 2016

RMB’000 RMB’000 RMB’000

Within 3 months — 3,169 1,073

Our Directors have confirmed that our Group has not had any material delay or default in thepayment of trade payables during the Track Record Period.

As at 23 October 2017, we had paid RMB0.9 million, or 83.9%, of the trade payablesoutstanding as at 30 April 2017.

NON-CURRENT ASSETS AND LIABILITIES

Our non-current assets consist of property, plant and equipment in our offices and real estateagency outlets such as computer equipment and furniture, fixtures and equipment as well ascompany motor vehicles, and deposits paid for acquisition of property, plant and equipment. As at31 December 2015 and 2016, and 30 April 2017 we had non-current assets of RMB0.7 million,RMB1.5 million, and RMB2.6 million, respectively.

Our non-current liabilities primarily consist of deferred income tax liabilities. As at 31December 2015 and 2016, and 30 April 2017 we had non-current liabilities of RMB1.7 million,RMB2.0 million, and RMB2.7 million, respectively.


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INDEBTEDNESS

Except as disclosed in the paragraphs headed ‘‘Net Current Assets’’ and ‘‘Non-current Assetsand Liabilities’’, as at 31 August 2017, our Group did not have any outstanding mortgages,charges, debentures, loan capital, bank overdrafts, loans, debt securities or other similarindebtedness, finance leases or hire-purchase commitments, liabilities under acceptances orguarantees.

As at the Latest Practicable Date, our Group did not have any unutilised banking facilities.

CONTINGENT LIABILITIES

As at the end of each reporting period during the Track Record Period and as at 31 August2017, our Group had no material contingent liabilities. Our Group is not involved in any currentmaterial legal proceedings, nor are we aware of any pending or potential material legalproceedings involving our Group. If our Group were involved in material legal proceedings, wewould record any loss contingencies when, based on information then available, it was probablethat a loss had been incurred and the amount of the loss could be reasonably estimated.

WORKING CAPITAL CONFIRMATION

Taking into account our cash generated from operating activities and the net proceeds of theShare Offer, we are satisfied that our Group will have available sufficient working capital for theGroup’s present requirements and for at least 12 months following the date of this prospectus.

KEY FINANCIAL RATIOS

The following table sets forth certain key financial ratios for the dates indicated:


Four

months

ended

30 April

20172015 2016

Return on total assets(1)(4) 18% 19% N/A

Return on equity(2)(4) 48% 50% N/A

Current ratio(3) 164% 162% 161%

Notes:

(1) Return on total assets is derived by dividing net profit for the year by the ending balance of total assets for

the given year.

(2) Return on equity is derived by dividing net profit for the year by the ending balance of total equity for a

given year.

(3) Current ratio is derived by dividing current assets by current liabilities as at the end of the given year/

period.


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(4) Return on total assets and return on equity for the four months ended 30 April 2017 are not comparable to

those for the years ended 31 December 2015 and 2016.

Return on total assets

Our return on total assets was 18% and 19% in 2015 and 2016, respectively. The slightincrease in return on total assets from 2015 to 2016 was primarily due to the increase in our netprofit as at 31 December 2016 compared with 31 December 2015.

Return on equity

Our return on equity was 48% and 50% in 2015 and 2016, respectively. The increase inreturn on equity from 2015 to 2016 reflected an increase in our net profit, driven by the increasein our revenue.

Current ratio

Our current ratio was 164%, 162%, and 161% as at 31 December 2015 and 2016, and for thefour months ended 30 April 2017, respectively, primarily reflecting our stable working capitalposition.

RELATED-PARTY TRANSACTIONS

Our Group has entered into the following related-party transactions during the Track RecordPeriod that will not continue after the Listing.

During the Track Record Period, we owed fellow subsidiaries management fees in connectionwith utilities such as water and electricity and for consultancy fees for the provision of a trainingprogramme to our sales agents in connection with the marketing plan for real estate developmentsof certain fellow subsidiaries. The following table sets forth the value of these transactions:


Four months ended

30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(unaudited)

Management fee (for utilities) owed to

a fellow subsidiary 349 — — —

Consultancy fee owed to a fellow

subsidiary 245 314 — 89


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Our Group has entered into the following related-party transactions that were in effect duringthe Track Record Period and will continue after the Listing:


Four months ended

30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(unaudited)

Real estate agency service fee from

fellow subsidiaries 51,205 41,099 19,807 21,792


service fee from fellow subsidiaries 1,147 528 — —

Integrated Services income from fellow

subsidiaries 114 3,005 — 467

Operating lease charges to a fellow

subsidiary 1,545 1,560 509 531

Operating lease charges to a director 237 247 85 106

Operating lease charges to a related

party (1) 217 223 77 95

The above transactions were conducted on normal commercial terms.

Note:

(1) The related party is a daughter of Ms. Tse, an executive Director.

For more information in relation to these continuing related-party transactions, see the sectionheaded ‘‘Connected Transactions’’.

Our Directors confirm that the related-party transactions of our Group were conducted in thenormal course of business and on normal commercial terms. For more information on our related-party transactions, see Note 23 of the Accountant’s Report set out in Appendix I to this prospectus.

OFF-BALANCE-SHEET ARRANGEMENTS

As at 30 April 2017, being the date of our most recent financial statements, we did not haveany off-balance-sheet arrangements.

QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT FINANCIAL RISKS

We are exposed to various types of market risk in the ordinary course of business, includingcredit risk, liquidity risk and currency risk. As our exposure to these risks is kept low, we have notused any derivatives or other instruments for hedging purposes. We do not hold or issue derivativefinancial instruments for trading purposes. The board reviews and approves policies for managingeach of these risks, and they are summarised below.


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Credit risk

Credit risk is the risk that a counterparty to whom we extend credit will not be able to repayits debt. Our credit risk is primarily attributable to our trade receivables and amounts due fromfellow subsidiaries which are trade in nature. Our management has a credit policy in place, and ourexposure to credit risk is monitored on an ongoing basis.

In respect of trade receivables and amounts due from fellow subsidiaries which are trade innature, individual credit evaluations are performed on all customers requiring credit over a certainamount. These evaluations focus on the customers’ past history of making payments when due andtheir current ability to pay, and also take into account information specific to the customers as wellas pertaining to the economic environment in which the customers operate. Ongoing creditevaluation is performed on the financial condition of our customers. Normally, we do not obtaincollateral from customers.

Our exposure to credit risk is influenced mainly by the individual characteristics of eachcustomer. The default risk of the industry in which customers operate also has an influence oncredit risk but to a lesser extent. As at 31 December 2015 and 2016, and 30 April 2017, we hadconcentration of credit risk on amounts due from fellow subsidiaries as the debtors were groupentities under the Fineland Group.

The maximum exposure to credit risk is represented by the carrying amount of each financialasset in the consolidated statements of financial position after deducting any impairmentallowance. We do not provide any other guarantees which would expose us to credit risk.

Liquidity risk

Liquidity risk is the risk that we will not be able to meet the obligations associated with ourfinancial liabilities. To manage this, our policy is to regularly monitor current and expectedliquidity requirements to ensure that we maintain sufficient reserves of cash to meet our liquidityrequirements in the short and longer term. We maintain a reasonable level of cash and cashequivalents. We finance our working capital requirements mainly through funds generated fromoperations.

Our financial liabilities comprise trade payables, accruals and other payables, dividendspayable and amounts due to fellow subsidiaries maturing in less than one year. Their contractualundiscounted payments approximate their carrying amounts as shown in the consolidatedstatements of financial position.

Currency risk

Currency risk is the risk of loss due to changes in foreign exchange rates. We operate in thePRC, and our functional currency and the currency in which we denominate and settlesubstantially all of our transactions is Renminbi. As such, our exposure to currency risk isminimal, and we currently do not engage in hedging activities designed or intended to managecurrency risk.


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DIVIDENDS

An interim dividend of RMB11.9 million was declared in 2016 by a group company to itsequity holders at the time, out of which RMB4.4 million was paid in the same year. In 2016, wealso paid RMB9.2 million of dividends which were declared for previous years. A total ofRMB14.6 million declared but unpaid dividends, comprising the outstanding RMB7.5 millionportion of the RMB11.9 million declared dividends in 2016 and the remaining outstandingRMB7.1 million declared dividends for previous years, will be paid out of our distributable profitbefore the Listing and will be financed by our cash flow from operations or available internal cashresources.

We cannot guarantee that dividends will be paid in the future. After the completion of theShare Offer, we will declare dividends, if any, denominated in Renminbi with respect to the Shareson a per Share basis and will pay such dividends in Hong Kong dollars. In addition to cash,dividends may be distributed in the form of Shares. Any distribution of Shares, however, must beapproved by special resolution of the Shareholders in accordance with our Articles of Association.

The declaration of dividends is subject to the discretion of our Board of Directors and theapproval of our Shareholders, which we expect will take into account factors such as thefollowing:

. our financial results;

. our Shareholders’ interests;

. general business condition and strategies;

. our capital requirements;

. contractual restrictions on the payment of dividends by us to our Shareholders or by oursubsidiaries to us;

. taxation considerations;

. possible effects on our creditworthiness;

. statutory and regulatory restrictions; and

. any other factors our Board of Directors may deem relevant.

Our Board currently has not formulated a specific dividend payment plan for 2017 or anyyear thereafter; however, we will re-evaluate our dividend policy annually. Under Cayman Islandslaw, dividends may be paid out of profit or out of the share premium account of a Company butmay not be paid out of a Company’s capital.

DISTRIBUTABLE RESERVES

As at 30 April 2017, our Company had RMB29.7 million of reserves available fordistribution.


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UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS

The following table of our unaudited pro forma adjusted consolidated net tangible assets wasprepared in accordance with Rule 7.31 of the GEM Listing Rules and is set out below to illustratethe effect of the Share Offer on our net tangible assets as at 30 April 2017 as if it had taken placeon that date. The table of unaudited pro forma adjusted consolidated net tangible assets of ourGroup has been prepared for illustrative purpose only and, because of its hypothetical nature, maynot give a true picture of our net tangible assets had the Share Offer been completed as at 30 April2017 or any subsequent date.

The unaudited pro forma adjusted consolidated net tangible assets set out below arecalculated based on our audited consolidated net assets attributable to owners of our Company asat 30 April 2017, as shown in the Accountant’s Report set out in Appendix I to this prospectus,and is adjusted as described below:

Audited

consolidated

net tangible

assets of our

Group

attributable

to owners of

the Company

as at

30 April 2017

Estimated net

proceeds from

the Share

Offer

Unaudited

pro forma

adjusted

consolidated

net tangible

assets of our

Group

attributable

to owners of

the Company

Unaudited pro forma adjusted

consolidated net tangible

assets per Share

RMB’000 RMB’000 RMB’000 RMB HK$

(Note 1) (Note 2) (Note 3) (Note 4)

Based on an Offer Price of

HK$0.55 per Offer Share 29,734 28,282 58,016 0.15 0.16

Based on an Offer Price of

HK$0.80 per Offer Share 29,734 49,652 79,386 0.20 0.22

Notes:

(1) The consolidated net tangible assets of the Group attributable to owners of the Company as at 30 April 2017

are based on the audited consolidated net assets of the Group attributable to owners of the Company as at 30

April 2017 of RMB29.7 million as shown in the Accountant’s Report set out in Appendix I to this

prospectus.

(2) The estimated net proceeds from the Share Offer are based on 100,000,000 Offer Shares and an Offer Price

of HK$0.55 (being the lower limit of the Indicative Offer Price Range) or HK$0.80 (being the upper limit)

per Offer Share, after deduction of the underwriting fees and related expenses payable and borne by the

Company which have not been reflected in the consolidated net tangible assets of the Group as at 30 April

2017. No account has been taken of any Shares which may be issued upon the exercise of any option that

may be granted under the Share Option Scheme. The estimated net proceeds from the Share Offer are

converted from Hong Kong dollars to Renminbi at an exchange rate of HK$1.00 to RMB0.8858.


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(3) The unaudited pro forma adjusted consolidated net tangible assets per Share is calculated based on

400,000,000 Shares in issue immediately following the completion of the Share Offer and the Capitalisation

Issue, without taking into account any Shares which may be issued pursuant to the exercise of any option

that may be granted under the Share Option Scheme or any Shares which may be allotted and issued or

repurchased by the Company pursuant to the general mandates for the allotment and issue or repurchases of

Shares referred to in Appendix IV to this prospectus.

(4) The unaudited pro forma adjusted consolidated net tangible assets per Share amount is converted to Hong

Kong dollars at an exchange rate of HK$1.00 to RMB0.8858. No representation is made that the Renminbi

amounts have been, could have been or may be converted to Hong Kong dollars, or vice versa, at that date.

(5) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of the

Group attributable to owners of the Company to reflect any trading results or other transactions of the Group

entered into subsequent to 30 April 2017.

(6) The settlement of dividend payable amounting to RMB14.6 million included in the consolidated net tangible

assets of the Group as at 30 April 2017 has no impact on the unaudited pro forma adjusted consolidated net

tangible assets attributable to the owners of the Company per Share.

LISTING EXPENSES

Our listing expenses mainly consist of the aggregate underwriting commissions and fees paidto the Sole Sponsor, the Stock Exchange listing fee, the SFC transaction levy, the Stock Exchangetrading fee, legal and other professional fees, and printing and other expenses relating to theListing and the Share Offer. Assuming an Offer Price of HK$0.675 per Share (being the mid-pointof the indicative offer price range stated in this prospectus), listing expenses which are payable byus are estimated to be approximately RMB29.0 million in aggregate. We incurred approximatelyRMB10.9 million of listing expenses during the Track Record Period, of which RMB2.7 millionwas recorded as prepayments and RMB8.2 million was charged as expenses to our consolidatedstatements of comprehensive income. Prior to the Listing, we expect to further charge RMB12.5million of estimated listing expenses to our consolidated statements of comprehensive income andto record RMB5.6 million of the estimated listing expense as prepayment. We expect that RMB8.3million will be accounted for as a deduction from equity following the Listing under the relevantaccounting standards. The listing expenses are subject to adjustment based on the actual amountincurred or to be incurred.

RECENT DEVELOPMENTS

Due to the incurrence of the non-recurring listing expenses of approximately RMB20.7million to be charged to our consolidated statement of comprehensive income in 2017, we expectthat our financial results for 2017, including our net profit and net profit margin, will benegatively impacted. We may even record a net loss for the year, driven in large part by theselisting expenses (coupled with the maintenance and compliance costs to be incurred after theListing).

Subsequent to the Track Record Period and up to the Latest Practicable Date, there was nomaterial change to our principal business, which continued to include the provision of real estateagency services. Save as disclosed in ‘‘— Listing Expenses’’ above, our Directors confirm thatthere has been no material adverse change in our financial or trading position or prospects since 30April 2017, being the date of our latest audited financial statements, up to the date of this


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prospectus. There have also been no industry, market or regulatory development or other eventssince 30 April 2017 up to the date of this prospectus that our Directors expect would materiallyaffect our operating results and financial conditions.

Based on the unaudited financial information of our Group, our revenue for the first eightmonths ended 31 August 2017 was higher than that for the corresponding period in 2016, whichwas mainly attributable to an increase in our revenue from provision of (i) Integrated Services, and(ii) primary and secondary real estate agency services. Subsequent to the Track Record Period andup to 31 August 2017, we were engaged for primary market real estate agency services for over 39new projects, and we opened seven new outlets in Guangzhou.

DISCLOSURE REQUIRED UNDER THE LISTING RULES

Our Directors confirm that, as at the Latest Practicable Date, there had been no circumstanceswhich would give rise to the disclosure requirements under Rules 17.15 to 17.21 of the GEMListing Rules had the Shares been listed on the Stock Exchange on that date.


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BUSINESS OBJECTIVES AND STRATEGIES

Please refer to the section headed ‘‘Business — Our Business Strategies’’ in this prospectusfor the Group’s business objectives and strategies.

In particular, with respect to our secondary market real estate agency services, our Groupdeveloped an expansion plan (that is, we aim to open an additional 77 to 117 outlets in Guangzhouand employ 538 to 818 additional employees for these outlets from the Latest Practicable Date upto 31 December 2019) to achieve our business objectives based on our experience in, and analysesof, the Guangzhou property market and relevant trends and projections. We also conductedfeasibility studies which examined the property market in the PRC and its top tier cities, includingBeijing, Shanghai, and Guangzhou.

Growth of overall commodity property market

The property market in the Pearl River Delta, including Guangzhou, has experienced stablegrowth in recent years. Real estate investment has increased from RMB414.0 billion in 2011 toRMB806.1 billion in 2016, representing a CAGR of 15.7%. Total GFA of primary commodityresidential properties sold increased from 50.1 million sq.m. in 2011 to 82.2 million sq.m. in 2016,representing a CAGR of 10.4%.

The demand for new commodity residential properties in Guangzhou is driven by a mix offundamental and investment demand, and residential lands being sold at auctions are transactingfor ever-increasing land prices. In Guangzhou, the total GFA of primary commodity residentialproperty sold has increased from 7.7 million sq.m. in 2012 to 14.6 million sq.m. in 2016. The totalGFA of secondary commodity residential property sold in Guangzhou has increased from 4.9million sq.m. in 2012 to 11.5 million sq.m. in 2016.

With the enforcement of the ‘‘Universal Two-child Policy’’, the approval of the ‘‘China(Guangdong) Pilot Free Trade Zone’’ in Nansha, and continued increase in purchasing power, ourDirectors expect that the demand for residential properties in Guangzhou will continue to grow inthe future.

Growth of secondary commodity property market

One of the trends that has become apparent is that due to a shortage in urban land supply inmajor developed cities in the PRC, the secondary commodity property market is gainingmomentum and is of increasing significance. According to the DTZ C&W Report, the proportionof real estate sales in Guangzhou in the secondary market in terms of GFA has grown from 39% in2012 to 44% in 2016. While this trend is more established in Beijing and Shanghai, withtransaction value in the secondary property market accounting for 77% and 64%, respectively, ofthe total property transaction amounts in 2016, there is greater room for growth of the secondaryproperty market in Guangzhou, as its transaction value as a percentage of total property transactionamounts was only 42%. In Guangzhou, both the secondary property transaction volume and totalsecondary property transaction amount has been increasing each year since 2014. This trend hasalso been reflected in our business during the Track Record Period, with the revenue generatedfrom providing secondary market real estate agency services increasing by approximately 20.2%,from RMB19.1 million for 2015 to RMB 23.0 million for 2016.

FUTURE PLANS AND USE OF PROCEEDS

– 215 –

To capture this growing market and increasing customer demand, we developed the expansionplan to strategically open more outlets in Guangzhou and employ more employees. We expect anincrease in staff cost and rental payments due to the anticipated opening of new outlets andemployment of additional employees. For existing outlets that were opened during the TrackRecord Period, the historical breakeven period ranged between approximately one to four monthsand the investment payback period ranged between approximately three to six months. A furthercompelling reason for this focus is that we also expect the commission rate for sales in thesecondary market to continue to generally exceed that in the primary market. Although the primarypurpose of the expansion plan is to capture the expected growth in secondary property market, theincrease in number of outlets and sales staff also means that there will be an expansion of oursales network and improvement of brand recognition which in turn will benefit sales in primaryproperty market.

Competitive landscape

The secondary residential market is not currently dominated by any one player or group ofplayers, and is expected to grow and become of greater significance in Guangzhou. We intend toleverage our capabilities gained from extensive experience in the Guangzhou property market tostrengthen our market position. We also intend to actively seize additional market share againstour competitors by increasing our scale of operations and market presence through expansion ofour network of outlets and increase of our number of sales staff.

For details on the competitive landscape in the secondary residential market for real estateagents in Guangzhou, please refer to the section headed ‘‘Industry Overview — Overview of theProperty Consultancy and Agency Industry in the PRC — Secondary residential market’’.

IMPLEMENTATION PLANS

In order to implement the business objectives and strategies as described above, set forthbelow are the implementation plans of our Group for each of the six-month periods from the LatestPracticable Date until 31 December 2019. It should be noted that the implementation plans areformulated on the bases and assumptions referred to in the paragraph headed ‘‘Bases andassumptions’’ below. These bases and assumptions are subject to many uncertainties andunpredictable factors, in particular the risk factors set out in ‘‘Risk factors’’. The Group’s actualcourse of business may vary from the business objective set out in this prospectus. There can beno assurance that the plans of the Group will materialise in accordance with the expected timeframe or that the objective of the Group will be accomplished at all.


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Business Objectives Use of proceeds Implementation Plan

From the Latest Practicable Date to 31 December 2017:

Continue to expand our secondary and

primary market real estate agency

services

HK$2.91 million Open 7–12 new outlets, engage in direct

marketing targeted at property

developers, with plans specific to

whether we have provided primary

market real estate agency services to

them in the past, and employ 48–83

additional employees

Expand our Integrated Services

business segment

HK$0.26 million Enhance our marketing effort to promote

our Integrated Services with the aim to

engage more customers, and to employ

4–7 additional employees for our One-

stop Service Centre and Zhaoshangyi

services

Further enhance our brand recognition HK$0.18 million Engage in various marketing strategies

such as internet keyword search

functions on search engines, official

promotional activities on our WeChat

public account, and production of

merchandise bearing the image of our

brand mascot


For the six months ending 30 June 2018:



services






them in the past, and employ 140 to

210 additional employees


business segment




9–14 additional employees for our

One-stop Service Centre and

Zhaoshangyi services


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brand mascot


For the six months ending 31 December 2018:



services









business segment













brand mascot


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For the six months ending 30 June 2019:



services









business segment













brand mascot


For the six months ending 31 December 2019:



services






them in the past, and employ 70–105

additional employees


business segment




4–7 additional employees for our One-

stop Service Centre and Zhaoshangyi

services


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brand mascot

BASES AND ASSUMPTIONS

The Directors have adopted the following principal assumptions in the preparation of theimplementation plan up to 31 December 2019.

(a) there will be no material changes in the existing laws and regulations, or othergovernmental policies relating to our Group; or in the political, economic or marketconditions in which our Group operates;

(b) there will be no material changes in the bases or rates of taxation in the PRC or in anyother places in which any member of our Group operates or will operate or isincorporated;

(c) the Share Offer will be completed in accordance with and as described in the sectionheaded ‘‘Structure and Conditions of the Share Offer’’ in this prospectus;

(d) our Group is able to retain its customers and suppliers;

(e) our Group will be able to retain key staff in the management and the main operationaldepartments;

(f) our Group will not be materially affected by any risk factors set out in the sectionheaded ‘‘Risk factors’’ in this prospectus; and

(g) our Group will be able to continue its operations in substantially the same manner asour Group has been operating during the Track Record Period and our Group will beable to carry out the development plans without disruptions adversely affecting itsoperations or business objectives in any way.

REASONS FOR THE LISTING

The Directors believe that the commercial rationale of the Listing is as follow:

. Implementation of the business strategies

After nearly 20 years of business development into an established real estate agent inGuangzhou offering a wide range of property intermediary services throughout the life cycleof a property development project, the Directors are of the view that it is an appropriate time


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to take the Group to the next stage by way of the Listing, in order to remain competitive andgrow continuously in this fast-changing economic environment and the increasing pace ofglobalisation.

As an important part of our business strategies, in light of the trends in the propertymarket, we plan to open more outlets in Guangzhou and employ more licensed agents toprovide secondary market real estate agency services to capture the anticipated growth insales of secondary properties and to capitalise on the higher commission rate available forsecondary sales. Furthermore, we also plan to continue to expand our primary market realestate agency services, which remains to be our core revenue contributor, by enhancing ourrelationship with property developers, enhance our Group’s brand recognition and expand ourIntegrated Services business segment. For further details, see ‘‘Business — Our BusinessStrategies’’ in this prospectus.

As at 31 August 2017, we had cash balance of approximately RMB47.1 million, out ofwhich RMB14.6 million will used to pay dividends to the Shareholders prior to the Listing.Therefore, our cash balance will be reduced to a level which is insufficient to fullyimplement our business strategies without the net proceeds from the Listing. In addition, inour ordinary course of business, we had a monthly cash outflow of approximately RMB5.7million, RMB6.2 million, and RMB7.6 million for our normal business operations for 2015,2016, and the four months ended 30 April 2017, respectively. We expect that the cashoutflow for our business operation will further increase correspondingly when the number ofoutlets and additional sales staff increases along with our expansion plan. If there is noadditional funding from the Share Offer while the expansion plan proceeds, our cash balancewill be lowered to a level which may not enable us to weather any material and unexpectedadversities such as possible economic downturn, material adverse change in property marketor severe disasters, or capture any good business opportunities such as further expansion oracquisition if such opportunities arise in the future. Based on the above, we have a genuineneed for equity fund-raising in order to fully implement our expansion plan and businessstrategies, while at the same time maintaining a sufficient level of cash balance for its day-to-day operations, and a reasonable buffer for emergency situations or potential businessopportunities.

. Enhanced brand profile, visibility and market presence

A number of our competitors within the same industry are listed companies or havesought listing on the Stock Exchange or in other exchanges, including the Shenzhen StockExchange. We believe that the Listing can generate a better corporate profile, create greaterassurance to our customers and thus enhance our competitiveness within this industry.

In addition, the enhanced corporate profile can potentially lead to more businessopportunities to the Group as our brand will be more visible to potential customers. This is ofsignificant importance since we intend to expand our primary and secondary market realestate agency services in Guangzhou. As we obtain most of our business through propertydevelopers, reputation and brand profile are often one of the selection criteria in the scoringsystem of our customers. We therefore consider an enhanced brand profile and visibility areimportant factors to succeed in the property intermediary services industry.


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. Increased competitiveness supported by better corporate governance and greaterefficiency

As a listed company, we will strive to maintain high standards of corporate governanceand continually improve our internal control, management efficiency and risk management.By improving the efficiency of the Group, we believe we can give better assurance andconfidence to our customers and business partners and hence attract more businessopportunities and potential customers.

. Stronger ability to attract talent and retain existing staff

We believe the Listing will allow us to enhance our market profile and recognition sothat we will be more successful in attracting talent. In addition, we believe our businessdevelopment plan and the Listing will potentially give rise to more career advancementopportunities and will allow us to attract and retain our employees more successfully. TheListing will also enable us to offer an equity-based incentive program to our employees toreward their loyalty to the long-term development of our Group. As a result, we can motivateour employees with incentive programs that are more closely aligned with the objective ofcreating value for our Shareholders.

. Access to capital market for future growth and other commercial benefits arisingfrom a public listing status

Being a private company, the financial resources available to us rely largely on thefinancial strength of our Shareholders which is limited and bank borrowings which involverecurring interest expenses. This substantially hinders the development and expansion of ourbusiness. The listing status will provide a platform for our Group to access the capitalmarkets for future secondary fund raising through the issuance of Shares and for debtsecurities, which could involve lower financing cost as opposed to interest-bearing bankloans, and which can also provide funding sources to cater for our Group’s any furtherexpansion plans as and when necessary. Furthermore, the ability to obtain bank financing isgenerally easier and cheaper with a listed entity as compared to a private entity. Through thelisting platform in Hong Kong, we expect to stay current with the new developments in theglobal capital market, improve interactions with new business associates and thereforeincrease the opportunities for new business development or strategic cooperation.

USE OF PROCEEDS

As set out in the section headed ‘‘Business — Our business strategies’’, the Group plans toimplement the following strategies: (i) expand our secondary and primary market real estateagency services by opening more outlets, enhancing our relationship with property developers andemploying more sales staff in Guangzhou; (ii) further enhance our Group’s brand recognition; and(iii) expand our Integrated Services business segment, in particular Zhaoshangyi (招商易) andOne-stop Service Centre.


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The net proceeds from the Share Offer, after deducting the related expenses, are estimated tobe approximately HK$34.8 million based on an Offer Price of HK$0.675 per Offer Share (beingthe mid-point of the indicative Offer Price range). The Directors intend that the net proceeds willbe applied as follows:

— approximately 80% of the net proceeds, or approximately HK$27.8 million, forexpansion of our secondary and primary market real estate agency services by openingmore outlets, enhancing relationship with property developers and employing more salesstaff in Guangzhou;

— approximately 6% of the net proceeds, or approximately HK$2.1 million, for expansionof our Integrated Services business segment, in particular Zhaoshangyi (招商易) andOne-stop Service Centre; and

— approximately 4% of the net proceeds, or approximately HK$1.4 million, for enhancingour Group’s brand recognition;

— the remaining balance of approximately HK$3.5 million, representing approximately10% of the net proceeds will be used as our general working capital and for generalcorporate purposes.

In summary, the implementation of the Group’s business objectives and strategies from theLatest Practicable Date to 31 December 2019 will be funded by the net proceeds from the ShareOffer as follows:

From theLatest

PracticableDate to

31 December2017

For the six months ending

30 June 201831 December

2018 30 June 201931 December

2019 Total

HK$ million HK$ million HK$ million HK$ million HK$ million HK$ million

Continue to expand oursecondary and primarymarket real estateagency services 2.91 6.95 6.95 6.95 4.03 27.8

Expand our IntegratedServices segment 0.26 0.53 0.53 0.53 0.26 2.1

Further enhance our brandrecognition 0.18 0.35 0.35 0.35 0.18 1.4

The Directors consider that the net proceeds from the Share Offer and the Group’s internalresources available to the Group will be sufficient to finance the Group’s business plans up to thesix months ending 31 December 2019.


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If the final Offer Price is set at the highest or lowest point of the indicative Offer Pricerange, the gross proceeds to be received by us from the Share Offer will increase or decrease byapproximately HK$12.5 million, respectively. In such event, the net proceeds will be used in thesame proportions as disclosed above irrespective of whether the Offer Price is determined at thehighest or lowest of the indicative Offer Price range.

To the extent that the net proceeds from the Share Offer are not immediately required for theabove purposes, it is the present intention of the Directors that such net proceeds be placed inshort-term interest bearing deposit accounts held with authorised financial institutions. Should ourDirectors decide to allocate the net proceeds from the Share Offer to business plans and/or newprojects of our Group other than those disclosed in this prospectus after the Listing, we will makean announcement to notify our Shareholders and investors of the changes in compliance with theGEM Listing Rules.


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UNDERWRITERS

Public Offer Underwriter(s)

RaffAello Securities (HK) Limited

UNDERWRITING ARRANGEMENTS AND EXPENSES

Public Offer Underwriting Agreement

Pursuant to the Public Offer, our Company is offering the Public Offer Shares (subject toreallocation) for subscription by the public in Hong Kong on and subject to the terms andconditions of this prospectus and the Application Forms.

Subject to, among other matters, the Listing Division granting the listing of, and permissionto deal in, the Shares in issue and to be issued as mentioned in this prospectus and to thesatisfaction of certain other conditions set out in the Public Offer Underwriting Agreement, thePublic Offer Underwriter(s) have agreed to subscribe or procure subscribers for their respectiveapplicable proportions of the Public Offer Shares now being offered which are not taken up underthe Public Offer on the terms and conditions of this prospectus, the Application Forms and thePublic Offer Underwriting Agreement.

The Public Offer Underwriting Agreement is conditional on and subject to the PlacingAgreement having been signed and becoming unconditional and not having been terminated inaccordance with its terms.

Grounds for termination

The obligations of the Public Offer Underwriters to subscribe or procure subscribers for thePublic Offer Shares under the Public Offer Underwriting Agreement are subject to termination bynotice in writing from the Sole Bookrunner (for itself and on behalf of the Public OfferUnderwriter(s)) to our Company at any time prior to 8:00 a.m. on the Listing Date:

(a) there shall develop, occur, exist or come into effect:

(i) any local, national, regional or international event or circumstance in the nature offorce majeure (including, without limitation, any acts of government, declaration ofa national or international emergency or war, calamity, crisis, epidemic, pandemic,outbreak of infectious disease, economic sanctions, strikes, lock-outs, fire,explosion, flooding, earthquake, volcanic eruption, civil commotion, riots, publicdisorder, acts of war, outbreak or escalation of hostilities (whether or not war isdeclared), acts of God or acts of terrorism); or

(ii) any change, or any development involving a prospective change, or any event orcircumstance likely to result in any change or development involving a prospectivechange, in any local, national, regional or international financial, economic,political, military, industrial, fiscal, regulatory, currency, credit or marketconditions (including, without limitation, conditions in the stock and bond

UNDERWRITING

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markets, money and foreign exchange markets, the interbank markets and creditmarkets) in or affecting Hong Kong, the PRC, the British Virgins Islands, theCayman Islands or any other jurisdiction relevant to any member of the Group (the‘‘Relevant Jurisdictions’’); or

(iii) any moratorium, suspension or restriction (including, without limitation, anyimposition of or requirement for any minimum or maximum price limit or pricerange) in or on trading in securities generally on the Stock Exchange, the NewYork Stock Exchange, the American Stock Exchange, the NASDAQ GlobalMarket, the London Stock Exchange, the Tokyo Stock Exchange, the SingaporeStock Exchange or the Shanghai Stock Exchange; or

(iv) any moratorium, suspension or restriction (including, without limitation, anyimposition of or requirement for any minimum or maximum price limit or pricerange) in or on trading in any securities of our Company or of any other memberof the Group listed or quoted on a stock exchange or an over-the-counter market;or

(v) any general moratorium on commercial banking activities in any of the RelevantJurisdictions, or any disruption in commercial banking or foreign exchange tradingor securities settlement or clearance services, procedures or matters in any of thoseplaces or jurisdictions; or

(vi) any new law, or any change or any development involving a prospective change orany event or circumstance likely to result in a change or a development involving aprospective change in (or in the interpretation, implementation or application byany court or other competent authority of) existing laws, in each case, in oraffecting any of the Relevant Jurisdictions; or

(vii) the imposition of economic sanctions, in whatever form, directly or indirectly, by,or on, any of the Relevant Jurisdictions; or

(viii) a change or development involving a prospective change in or affecting taxation orexchange control, currency exchange rates or foreign investment regulations(including, without limitation, a material devaluation of the Hong Kong dollar orRMB against any foreign currencies), or the implementation of any exchangecontrol, in any of the Relevant Jurisdictions; or

(ix) any litigation or claim of any third party being threatened or instigated against anymember of the Group, the Executive Directors or the Controlling Shareholders; or

(x) any change or development involving a prospective change or materialisation of,any of the risks set out in the section headed ‘‘Risk Factors’’ in this prospectus;

(xi) a Director being charged with an indictable offence or prohibited by operation oflaw or otherwise disqualified from taking part in the management of a company; or

UNDERWRITING

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(xii) the managing director and chief executive officer of our Company vacating his orher office; or

(xiii) an authority or a political body or organisation in any of the Relevant Jurisdictionscommencing any investigation or other action, or announcing an intention toinvestigate or take other action, against any Director; or

(xiv) save as disclosed in this prospectus, a contravention by any member of the Groupof the GEM Listing Rules or applicable laws; or

(xv) a prohibition on our Company for whatever reason from offering, allotting, issuingor selling any of the Shares pursuant to the terms of the Share Offer; or

(xvi) non-compliance of this prospectus (or any other documents used in connection withthe contemplated offer and sale of the Shares) or any aspect of the Share Offerwith the GEM Listing Rules or any other applicable laws; or

(xvii) other than with the approval of the Sole Sponsor and/or the Sole Bookrunner, theissue or requirement to issue by our Company of any supplement or amendment tothis prospectus (or to any other documents used in connection with thecontemplated offer and sale of the Shares) pursuant to the Companies Ordinanceor the Companies (Winding Up and Miscellaneous Provisions) Ordinance or theGEM Listing Rules or any requirement or request of the Stock Exchange and/or theSFC; or

(xviii) an order or petition for the winding up of any member of the Group or anycomposition or arrangement made by any member of the Group with its creditorsor a scheme of arrangement entered into by any member of the Group or anyresolution for the winding-up of any member of the Group or the appointment of aprovisional liquidator, receiver or manager over all or part of the material assets orundertaking of any member of the Group or anything analogous thereto occurringin respect of any member of the Group,

which, individually or in the aggregate, in the sole opinion of the Sole Bookrunner (1)has or will have or may have a material adverse effect on the assets, liabilities, business,general affairs, management, prospects, shareholders’ equity, profits, losses, results ofoperations, position or condition, financial or otherwise, or performance of the Group asa whole; or (2) has or will have or may have a material adverse effect on the success ofthe Share Offer or the level of applications under the Public Offer or the level ofinterest under the Placing; or (3) makes or will make or may make it inappropriate orinadvisable or inexpedient or impracticable for the Share Offer to proceed or to marketthe Share Offer; or (4) has or will have or may have the effect of making any part of thePublic Offer Underwriting Agreement (including underwriting) incapable ofperformance in accordance with its terms or preventing the processing of applicationsand/or payments pursuant to the Share Offer or pursuant to the underwriting thereof; or

UNDERWRITING

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(b) there has come to the notice of the Sole Bookrunner:

(i) that any statement contained in any of this prospectus and the Application Forms,the Formal Notice and/or in any notices, announcements, advertisements,communications or other documents issued or used by or on behalf of ourCompany in connection with the Public Offer (including any supplement oramendment thereto) was, when it was issued, or has become, untrue, incorrect ormisleading in any material respect, or that any forecast, estimate, expression ofopinion, intention or expectation contained in any of this prospectus and theApplication Forms, the Formal Notice and/or any notices, announcements,advertisements, communications or other documents issued or used by or on behalfof our Company in connection with the Public Offer (including any supplement oramendment thereto) is not fair and honest and based on reasonable assumptions; or

(ii) that any matter has arisen or has been discovered which would, had it arisen orbeen discovered immediately before the date of this prospectus, constitute amaterial omission from any of this prospectus and the Application Forms, theFormal Notice and/or in any notices, announcements, advertisements,communications or other documents issued or used by or on behalf of ourCompany in connection with the Public Offer (including any supplement oramendment thereto); or

(iii) any breach of any of the obligations imposed upon any party to the Public OfferUnderwriting Agreement or the Placing Agreement (other than upon any of theSole Sponsor, the Sole Bookrunner, the Sole Lead Manager, the Public OfferUnderwriter(s) or the Placing Underwriter(s)); or

(iv) any event, act or omission which gives or is likely to give rise to any liability ofany indemnifying parties under the Public Offer Underwriting Agreement; or

(v) any material adverse change, or any development involving a prospective materialadverse change, in the assets, liabilities, business, general affairs, management,prospects, shareholders’ equity, profits, losses, results of operations, position orcondition, financial or otherwise, or performance of the Group taken as a whole; or

(vi) any breach of, or any event or circumstance rendering untrue or incorrect in anyrespect, any of the representations, warranties, agreements and undertakings of ourCompany, the Controlling Shareholders and the Executive Directors under thePublic Offer Underwriting Agreement; or

(vii) that approval by the Listing Division of the listing of, and permission to deal in,the Shares to be issued or sold under the Share Offer is refused or not granted,other than subject to customary conditions, on or before the Listing Date, or ifgranted, the approval is subsequently withdrawn, qualified (other than bycustomary conditions) or withheld; or

(viii) our Company withdraws this prospectus (and/or any other documents issued orused in connection with the Share Offer) or the Share Offer; or

UNDERWRITING

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(ix) any person (other than the Sole Sponsor, the Sole Bookrunner and the Public OfferUnderwriter(s)) has withdrawn or sought to withdraw its consent to being named inthis prospectus as expert or to the issue of this prospectus.

Undertakings to the Stock Exchange pursuant to the GEM Listing Rules

By our Company

Pursuant to Rule 17.29 of the GEM Listing Rules, we have undertaken to the Stock Exchangethat, no further Shares or securities convertible into our equity securities (whether or not of a classalready listed) may be issued by us or form the subject of any agreement to such an issue by uswithin six months from the Listing Date (whether or not such issue of Shares or securities will becompleted within six months from the Listing Date), except pursuant to the Capitalisation Issue,the Share Offer, the exercise of the Share Options which may be granted under the Share OptionScheme or for the circumstances as prescribed under Rule 17.29 of the GEM Listing Rules.

By our Controlling Shareholders

Pursuant to Rule 13.16A(1) of the GEM Listing Rules, each of our Controlling Shareholdershas undertaken to the Stock Exchange and our Company respectively that, except pursuant to theShare Offer, it/he/she shall not and shall procure that the relevant registered shareholder(s) shallnot:

(a) in the period commencing on the date by reference to which disclosure of its/his/hershareholding in our Company is made in this prospectus and ending on the date which issix months from the Listing Date, dispose of, nor enter into any agreement to dispose ofor otherwise create any options, rights, interests or encumbrances in respect of, any ofthose Shares in respect of which it/he/she is shown by this prospectus to be thebeneficial owners; or

(b) in the period of six months commencing on the date on which the period referred to inparagraph (a) above expires, dispose of, nor enter into any agreement to dispose of orotherwise create any options, rights, interests or encumbrances in respect of, any of theShares referred to in paragraph (a) above if, immediately following such disposal orupon the exercise or enforcement of such options, rights, interests or encumbrances, theControlling Shareholders would cease to be controlling shareholders (as defined in theGEM Listing Rules).

Pursuant to Rule 13.19 of the GEM Listing Rules, each of the Controlling Shareholders hasalso undertaken to the Stock Exchange and our Company that, within the period commencing onthe date by reference to which disclosure of its/his/her shareholding in our Company is made inthis prospectus and ending on the date which is 12 months from the Listing Date, it/he/she will:

(a) when it/he/she pledges or charges any direct or indirect interest in the relevant Shares infavour of an authorized institution (as defined in the Banking Ordinance (Chapter 155 ofthe Laws of Hong Kong)), as security for a bona fide commercial loan under Rule13.18(1) of the GEM Listing Rules or pursuant to any right or waiver granted by the

UNDERWRITING

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Stock Exchange pursuant to Rule 13.18(4) of the GEM Listing Rules, inform ourCompany immediately thereafter, disclosing the details specified in Rules 17.43(1) to(4) of the GEM Listing Rules; and

(b) inform our Company immediately in the event that it/he/she becomes aware that thepledgee or chargee has disposed of or intends to dispose of such interest and of thenumber of Shares affected.

Our Company shall inform the Stock Exchange in writing as soon as we have been informedof any of the matters referred to above (if any) by our Controlling Shareholders and disclose suchmatters by way of an announcement to be published in accordance with the GEM Listing Rules assoon as possible.

Undertakings pursuant to the Public Offer Underwriting Agreement

By our Company

Pursuant to the Public Offer Underwriting Agreement, we have undertaken to each of theSole Bookrunner, the Sole Lead Manager, the Sole Sponsor and the Public Offer Underwriters that,except pursuant to the Share Offer, the Capitalisation Issue and the exercise of the share optionsthat may be granted under the Share Option Scheme, at any time from the date of the Public OfferUnderwriting Agreement and ending on, and including, the date that is six months after the ListingDate (the ‘‘First Six-Month Period’’), we will not, and to procure each other member of theGroup not to, without the prior written consent of the Sole Sponsor and the Sole Bookrunner (onbehalf of the Public Offer Underwriter(s)) and unless in compliance with the requirements of theListing Rules:

(i) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree toallot, issue or sell, mortgage, charge, pledge, hypothecate, lend, grant or sell any option,warrant, contract or right to subscribe for or purchase, grant or purchase any option,warrant, contract or right to allot, issue or sell, or otherwise transfer or dispose of orcreate an encumbrance over, or agree to transfer or dispose of or create an encumbranceover, either directly or indirectly, conditionally or unconditionally, any Shares or othersecurities of our Company or any shares or other securities of such other member of theGroup, as applicable, or any interest in any of the foregoing (including, withoutlimitation, any securities convertible into or exchangeable or exercisable for or thatrepresent the right to receive, or any warrants or other rights to purchase, any Shares orany shares of such other member of the Group, as applicable), or deposit any Shares orother securities of our Company or any shares or other securities of such other memberof the Group, as applicable, with a depositary in connection with the issue of depositaryreceipts; or

(ii) enter into any swap or other arrangement that transfers to another, in whole or in part,any of the economic consequences of ownership of any Shares or other securities of ourCompany or any shares or other securities of such other member of the Group, asapplicable, or any interest in any of the foregoing (including, without limitation, any

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securities convertible into or exchangeable or exercisable for or that represent the rightto receive, or any warrants or other rights to purchase, any Shares or any shares of suchother member of the Group, as applicable); or

(iii) enter into any transaction with the same economic effect as any transaction specified in(i) or (ii) above

(iv) offer or agree to or announce any intention to effect any transaction specified in (i), (ii)or (iii) above,

in each case, whether any of the transactions specified in (i), (ii) or (iii) above is to be settledby delivery of Shares or other securities of our Company or shares or other securities of suchother member of the Group, as applicable, or in cash or otherwise (whether or not the issueof such Shares or other shares or securities will be completed within the First Six-monthPeriod). In the event that, during the period of six months commencing on the date on whichthe First Six-month Period expires (the ‘‘Second Six-Month Period’’), our Company entersinto any of the transactions specified in (i), (ii) or (iii) above or offers to or agrees to orannounces any intention to effect any such transaction, our Company shall take all reasonablesteps to ensure that it will not create a disorderly or false market in the securities of ourCompany. Each of the Controlling Shareholders undertakes to each of the Sole Sponsor, theSole Bookrunner, the Sole Lead Manager and the Public Offer Underwriter(s) to procure ourCompany to comply with the above undertakings.

By our Controlling Shareholders

Pursuant to the Public Offer Underwriting Agreement, each of the Controlling Shareholdershereby undertakes to each of us, the Sole Bookrunner, the Sole Lead Manager, the Public OfferUnderwriter(s) and the Sole Sponsor that, without the prior written consent of the Sole Sponsorand the Sole Bookrunner (on behalf of the Public Offer Underwriter(s)) and unless in compliancewith the requirements of the Listing Rules:

(i) he/she/it will not, at any time during the First Six-Month Period, (i) sell, offer to sell,contract or agree to sell, mortgage, charge, pledge, hypothecate, lend, grant or sell anyoption, warrant, contract or right to purchase, grant or purchase any option, warrant,contract or right to sell, or otherwise transfer or dispose of or create an encumbranceover, or agree to transfer or dispose of or create an encumbrance over, either directly orindirectly, conditionally or unconditionally, any Shares or other securities of ourCompany or any interest therein (including, without limitation, any securitiesconvertible into or exchangeable or exercisable for or that represent the right to receive,or any warrants or other rights to purchase, any Shares), or deposit any Shares or othersecurities of our Company with a depositary in connection with the issue of depositaryreceipts, or (ii) enter into any swap or other arrangement that transfers to another, inwhole or in part, any of the economic consequences of ownership of any Shares or othersecurities of our Company or any interest therein (including, without limitation, anysecurities convertible into or exchangeable or exercisable for or that represent the rightto receive, or any warrants or other rights to purchase, any Shares), or (iii) enter intoany transaction with the same economic effect as any transaction specified in (i) or (ii)above, or (iv) offer or agree to or announce any intention to effect any transaction

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specified in (i), (ii) or (iii) above, in each case, whether any of the transactions specifiedin (i), (ii) or (iii) above is to be settled by delivery of Shares or other securities of ourCompany or in cash or otherwise (whether or not the issue of such Shares or othersecurities will be completed within the First Six-Month Period);

(ii) he/she/it will not, during the Second Six-Month Period, enter into any of thetransactions specified in (i), (ii) or (iii) above or offer to or agree to or announce anyintention to effect any such transaction if, immediately following any sale, transfer ordisposal or upon the exercise or enforcement of any option, right, interest orencumbrance pursuant to such transaction, he/she/it will cease to be a ‘‘controllingshareholder’’ (as the term is defined in the Listing Rules) of our Company; and

(iii) until the expiry of the Second Six-Month period, in the event that he/she/it enters intoany of the transactions specified in (i), (ii) or (iii) above or offer to or agrees to orannounce any intention to effect any such transaction, he/she/it will take all reasonablesteps to ensure that it will not create a disorderly or false market in the securities of ourCompany.

Each of the Controlling Shareholders further undertakes to us, the Sole Sponsor, the SoleBookrunner, the Sole Lead Manager and the Public Offer Underwriter(s) that he/she/it will, at anytime within the period commencing on the date of the Public Offer Underwriting Agreement andending on the date which is 12 months after the Listing Date, he/she/it will immediately inform us,the Sole Bookrunner and the Sole Sponsor in writing upon:

(i) any pledge or charge in favour of an authorised institution (as defined in the BankingOrdinance (Chapter 155 of the Laws of Hong Kong)) of any Shares or securities orinterests in the Shares or securities of our Company beneficially owned by him/her/it fora bona fide commercial loan and the number of Shares or securities so pledged orcharged; and

(ii) any indication received by him/her/it, either verbal or written, from any pledgee orchargee that any of the pledged or charged Shares or securities or interests in the Sharesor securities of our Company will be disposed of.

Indemnity

We, our Controlling Shareholders and our Executive Directors have jointly and severallyagreed to indemnify the Sole Sponsor, the Sole Bookrunner, Sole Lead Manager and the PublicOffer Underwriter(s) for certain losses which they may suffer, including losses incurred arisingfrom their performance of their obligations under the Public Offer Underwriting Agreement andany breach by us or any of our Executive Directors or our Controlling Shareholders of the PublicOffer Underwriting Agreement.

Placing Agreement

In connection with the Placing, it is expected that our Company will enter into the PlacingAgreement with, among others, the Placing Underwriter(s), on terms and conditions that aresubstantially similar to the Public Offer Underwriting Agreement as described above and on the

UNDERWRITING

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additional terms described below. Under the Placing Agreement, the Placing Underwriter(s) willseverally (and not jointly or jointly and severally) agree to subscribe or procure subscribers for thePlacing Shares being offered pursuant to the Placing.

It is expected that the Placing Agreement may be terminated on similar grounds as the PublicOffer Underwriting Agreement. Potential investors shall be reminded that in the event that thePlacing Agreement is not entered into, the Share Offer will not proceed. The Placing Agreement isconditional on and subject to the Public Offer Underwriting Agreement having been executed,becoming unconditional and not having been terminated.

It is expected that, pursuant to the Placing Agreement, our Company and each of ourControlling Shareholders will give undertakings similar to those given pursuant to the Public OfferUnderwriting Agreement, as described in ‘‘Underwriting arrangements and expenses — PublicOffer Underwriting Agreement — Undertakings pursuant to the Public Offer UnderwritingAgreement’’.

It is expected that each of our Controlling Shareholders will undertake to the PlacingUnderwriter(s) not to dispose of, or enter into any agreement to dispose of, or otherwise create anyoptions, rights, interest or encumbrances in respect of any of our Shares held by him/her/it in ourCompany for a period similar to that given by them pursuant to the Public Offer UnderwritingAgreement as described in the section headed ‘‘Underwriting arrangements and expenses — PublicOffer Underwriting Agreement — Undertakings pursuant to the Public Offer UnderwritingAgreement’’.

Commission and expenses

The Underwriters will receive a gross commission of 4.8% on the aggregate Offer Price of allthe Offer Shares now being offered, out of which the Underwriters will pay all (if any) sub-underwriting commissions. In addition, our Company agreed, at its sole and absolute discretion, topay an incentive fee (if any) to the Sole Bookrunner for its own account. The underwritingcommission (exclusive of any discretionary incentive fee), Stock Exchange listing fees, brokerage,Stock Exchange trading fee, SFC transaction levy, legal and other professional fees together withapplicable printing and other expense relating to the Share Offer are estimated to be approximatelyHK$32.7 million in aggregate (based on an Offer Price of HK$0.675 per Offer Share, being themid point of the indicative Offer Price range) and is payable by our Company.

Underwriters’ interests in our Company

Save for its interests and obligations under the Underwriting Agreements, none of theUnderwriters or any of its respective associates is interested beneficially or non-beneficially in anyshares in any member of our Group nor has any right (whether legally enforceable or not) oroption to subscribe for or to nominate persons to subscribe for any shares of any member of ourGroup.

UNDERWRITING

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Compliance Adviser’s agreement

Under a compliance adviser’s agreement dated 3 April 2017 made between RaffAello CapitalLimited and our Company (the ‘‘Compliance Adviser’s Agreement’’), our Company appointsRaffAello Capital Limited and RaffAello Capital Limited agrees to act as the compliance adviserto our Company for the purpose of the GEM Listing Rules for a period from the Listing Date andending on the date on which our Company complies with Rule 18.03 of the GEM Listing Rules inrespect of its financial results for the second full financial year commencing after the Listing Date,i.e. the year ending 31 December 2019, or until the agreement is terminated, whichever is earlier.

Sole Sponsor’s interest in our Company

RaffAello Capital Limited, being the Sole Sponsor, has declared its independence pursuant toRule 6A.07 of the GEM Listing Rules. Save for the sponsor’s fees to be paid to RaffAello CapitalLimited as the Sole Sponsor to the Listing, its obligations under the Underwriting Agreements andthe Compliance Adviser’s Agreement or as otherwise disclosed in this prospectus, neitherRaffAello Capital Limited nor any of its associates has or may, as a result of the Share Offer, haveany interest in any class of securities of our Company or any other company in our Group(including options or rights to subscribe for such securities).

No director or employee of RaffAello Capital Limited who is involved in providing advice toour Company has or may, as a result of the Share Offer, have any interest in any class of securitiesof our Company or other company in our Group (including options or rights to subscribe for suchsecurities but, for the avoidance of doubt, excluding interests in securities that may be subscribedfor or purchased by any such director or employee pursuant to the Share Offer).

No director or employee of RaffAello Capital Limited has a directorship in our Company orany other company in our Group.

UNDERWRITING

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STRUCTURE OF THE SHARE OFFER

The Share Offer comprises:

(i) the Public Offer of an aggregate of 10,000,000 Public Offer Shares (subject toreallocation as mentioned below) in Hong Kong; and

(ii) the Placing of 90,000,000 Placing Shares (subject to reallocation as mentioned below).

Investors may apply for the Offer Shares under the Public Offer or, if qualified to do so,apply for or indicate an interest for the Offer Shares under the Placing, but may not do both. TheOffer Shares will represent approximately 25% of the enlarged issued share capital of ourCompany immediately after completion of the Share Offer and the Capitalisation Issue (butwithout taking into account any Shares which may be issued pursuant to any options which may begranted under the Share Option Scheme). The number of Offer Shares to be offered under thePublic Offer and the Placing, respectively, may be subject to reallocation as mentioned below.

In particular, the Offer Shares will be allocated pursuant to Rule 11.23(8) of the GEM ListingRules and no more than 50% of the Offer Shares in public hands at the time of Listing will beowned by the three largest public Shareholders.

CONDITIONS OF THE SHARE OFFER

The Share Offer is conditional upon, among other things:

(i) the Listing Division of the Stock Exchange granting the approval of the listing of, andpermission to deal in, the Shares in issue or may be issued pursuant to the CapitalisationIssue and the Share Offer (including any Shares which may be issued pursuant to theexercise of any options which may be granted under the Share Option Scheme), andsuch listing and permission not subsequently having been revoked prior to thecommencement of dealings in the Shares on the Stock Exchange;

(ii) the Offer Price having been duly determined on or around the Price Determination Date;

(iii) the execution and delivery of the Placing Agreement on or around the PriceDetermination Date; and

(iv) the obligations of the Underwriters under the Underwriting Agreements becomingunconditional (including, if relevant, as a result of the waiver of any condition(s) by theSole Bookrunner (for itself and on behalf of the Underwriters)) and the UnderwritingAgreements not being terminated in accordance with their respective terms,

in each case, on or before the dates and times specified in the Underwriting Agreements(unless and to the extent such conditions are validly waived on or before such dates andtimes) and in any event not later than the 30th day after the date of this prospectus.

The consummation of each of the Public Offer and the Placing is conditional upon, amongother things, the other becoming unconditional and not having been terminated in accordance withits terms.


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If such conditions have not been fulfilled or waived prior to the times and dates specified, theShare Offer will lapse and the Stock Exchange will be notified immediately. Notice of the lapse ofthe Share Offer will be published by our Company on the Stock Exchange’s website atwww.hkexnews.hk and our Company’s website at www.finelandassets.com on the next businessday following such lapse.

THE PUBLIC OFFER

Number of Shares initially offered

We are initially offering 10,000,000 Public Offer Shares at the Offer Price, representing 10%of the Shares initially available under the Share Offer, for subscription by the public in HongKong. Subject to reallocation of Offer Shares between the Placing and the Public Offer, thenumber of Shares initially offered under the Public Offer will represent approximately 2.5% of ourCompany’s enlarged issued share capital immediately after completion of the Share Offer and theCapitalisation Issue, and without taking into account Shares which may be issued upon exercise ofoptions as may be granted under the Share Option Scheme. The Public Offer is open to membersof the public in Hong Kong as well as to institutional, professional and other investors.Professional investors generally include brokers, dealers, companies (including fund managers)whose ordinary business involves dealing shares and other securities and corporate entities whichregularly invest in shares and other securities. Completion of the Public Offer is subject to theconditions as set out in the paragraph headed ‘‘Conditions of the Share Offer’’ in this section.

Allocation

Allocation of the Public Offer Shares to investors under the Public Offer will be based solelyon the level of valid applications received under the Public Offer. The basis of allocation mayvary, depending on the number of the Public Offer Shares validly applied for by applicants.Allocation of the Public Offer Shares could, where appropriate, consist of balloting, which wouldmean that some applicants may receive a higher allocation than others who have applied for thesame number of the Public Offer Shares, and those applicants who are not successful in the ballotmay not receive any Public Offer Shares.

Multiple or suspected multiple applications under the Public Offer and any application formore than 10,000,000 Public Offer Shares initially available for subscription will be rejected. Eachapplicant under the Public Offer will also be required to give an undertaking and confirmation inthe Application Form submitted by him that he and any person(s) for whose benefit he is makingthe application have not received any Shares under the Placing, and such applicant’s application isliable to be rejected if the said undertaking and/or confirmation is breached and/or untrue (as thecase may be).

The final Offer Price, the level of indication of interest in the Placing, level of applications inthe Public Offer and the basis of allocation of the Public Offer Shares are expected to beannounced on Tuesday, 14 November 2017 through a variety of channels as described in paragraphheaded ‘‘How to Apply for Public Offer Shares — 11. Publication of Results’’.


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Reallocation

Allocation of the Offer Shares between the Public Offer and the Placing is subject toadjustment which would have the effect of increasing the number of Offer Shares under the PublicOffer to a certain percentage of the total number of Offer Shares offered under the Share Offer ifcertain prescribed total demand levels are reached. In the event of over-applications in the PublicOffer, the Sole Bookrunner shall apply a clawback mechanism following the closing of theapplication lists on the following basis:

. if the number of Offer Shares validly applied for under the Public Offer represents 15times or more but less than 50 times of the number of Offer Shares initially availablefor subscription under the Public Offer, then 20,000,000 Offer Shares will be reallocatedto the Public Offer from the Placing so that the total number of Offer Shares availableunder the Public Offer will be 30,000,000 Offer Shares, representing 30% of the OfferShares initially available under the Share Offer;

. if the number of Offer Shares validly applied for under the Public Offer represents 50times or more but less than 100 times of the number of Offer Shares initially availablefor subscription under the Public Offer, then 30,000,000 Offer Shares will be reallocatedto the Public Offer from the Placing so that the total number of Offer Shares availableunder the Public Offer will be 40,000,000 Offer Shares, representing 40% of the OfferShares initially available under the Share Offer; and

. if the number of Offer Shares validly applied for under the Public Offer represents 100times or more of the number of Offer Shares initially available for subscription underthe Public Offer, then 40,000,000 Offer Shares will be reallocated to the Public Offerfrom the Placing so that the total number of Offer Shares available under the PublicOffer will be 50,000,000 Offer Shares, representing 50% of the Offer Shares initiallyavailable under the Share Offer.

In each case, based on the additional Offer Shares reallocated to the Public Offer, the numberof Offer Shares allocated to the Placing will be correspondingly reduced, in such manner as theSole Bookrunner (for itself and on behalf of the Public Offer Underwriter(s)) deems appropriate.In addition, the Sole Bookrunner may in their sole and absolute discretion reallocate Offer Sharesfrom the Placing to the Public Offer to satisfy valid applications under the Public Offer.

If the Public Offer is not fully subscribed, the Sole Bookrunner (for itself and on behalf ofthe Public Offer Underwriter(s)) will have the discretion (but shall not be under any obligation) toreallocate all or any unsubscribed Public Offer Shares in such amount as the Sole Bookrunnerdeems appropriate.

Applications

The Sole Bookrunner (for itself and on behalf of the Underwriters) may require any investorwho has been offered Shares under the Placing, and who has made an application under the PublicOffer to provide sufficient information to the Sole Bookrunner so as to allow it to identify therelevant applications under the Public Offer and to ensure that is excluded from any application forShares under the Public Offer.


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Each applicant under the Public Offer will also be required to give an undertaking andconfirmation in the application submitted by him/her/it that he/she/it and any person for whosebenefit he/she/it is making the application have not applied for or taken up or indicated an interestfor, and will not apply for or take up, or indicate an interest for, any Offer Shares under thePlacing and such applicant’s application is liable to be rejected if the said undertaking orconfirmation is breached or untrue (as the case may be) or it has been or will be placed orallocated Offer Shares under the Placing.

References in this prospectus to applications, Application Forms, application monies or theprocedure for application relate solely to the Public Offer.

THE PLACING

Number of the Offer Shares initially offered

Subject to the reallocation as described above, the number of Offer Shares to be initiallyoffered under the Placing will be 90,000,000 Shares, representing 90% of the total number of theOffer Shares initially available under the Share Offer. Subject to the reallocation of the OfferShares between the Placing and the Public Offer, the number of Shares initially offered under thePlacing will represent approximately 22.5% of our Company’s enlarged issue share capitalimmediately after the completion of the Share Offer and the Capitalisation Issue, but withouttaking into account Shares which may be issued upon exercise of options granted under the ShareOption Scheme.

Allocation

Pursuant to the Placing, the Placing Shares will be conditionally placed by the PlacingUnderwriter(s). The Placing Shares will be selectively placed to certain professional andinstitutional and other investors anticipated to have a sizeable demand for such Placing Shares inHong Kong. The Placing is subject to the Public Offer being unconditional.

Allocation of Offer Shares pursuant to the Placing will be based on a number of factors,including the level and timing of demand, the total size of the relevant investor’s invested assets orequity assets in the relevant sector and whether or not it is expected that the relevant investor islikely to buy further Shares, and/or hold or sell its Offer Shares, after the listing of the Shares onthe Stock Exchange. Such allocation is intended to result in a distribution of the Shares on a basiswhich would lead to the establishment of a solid professional and institutional shareholder base tothe benefit of our Company and our Shareholders as a whole.

The Sole Bookrunner (for itself and on behalf of the Placing Underwriter(s)) may require anyinvestor who has been offered Placing Shares under the Placing, and who has made an applicationunder the Public Offer, to provide sufficient information to the Sole Bookrunner so as to allowthem to identify the relevant applications under the Public Offer and to ensure that they areexcluded from any application of Offer Shares under the Public Offer.


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OFFER PRICE

Determination of the Offer Price

The Placing Underwriter(s) will be soliciting from prospective investors’ indications ofinterest in acquiring Offer Shares in the Placing. Prospective investors will be required to specifythe number of the Placing Shares under the Placing they would be prepared to acquire either atdifferent prices or at a particular price. This process, known as ‘‘book-building’’, is expected tocontinue up to, and to cease on or around, the last day for lodging applications under the PublicOffer.

The Offer Price will be fixed by the Price Determination Agreement on the PriceDetermination Date, which is expected to be on or around Tuesday, 7 November 2017. If the SoleBookrunner (for themselves and on behalf of the other Underwriters) and our Company are unableto reach an agreement on the Offer Price on or before Monday, 13 November 2017, the ShareOffer will not become unconditional and will not proceed.

The Sole Bookrunner (for itself and on behalf of the other Underwriters) may, with theconsent of our Company, reduce the number of Offer Shares offered in the Share Offer and/or theindicative Offer Price range to below that stated in this prospectus at any time not later than themorning of the last day for loading applications under the Public Offer. In such a case, ourCompany will, as soon as practicable following the decision to make such reduction, and in anyevent not later than the morning of the last day for lodging applications under the Public Offer,cause to be published on the website of the Stock Exchange at www.hkexnews.hk and ourCompany’s website at www.finelandassets.com an announcement of such change. Prospectiveinvestors of the Offer Shares should be aware that the Offer Price to be determined on the PriceDetermination Date may be, but is currently not expected to be, lower than the indicative OfferPrice range stated in this prospectus. Applicants should have regard to the possibility that anyannouncement of reduction in the number of Offer Shares and/or the indicative Offer Price rangemay not be made until the day which is the last day for lodging applications under the PublicOffer. Applicants who have submitted their applications for Public Offer Shares before such anannouncement is made may subsequently withdraw their applications if such an announcement ismade.

If for any reason the Price Determination Date is changed, our Company will as soon aspracticable cause to be published on the website of the Stock Exchange at www.hkexnews.hk andour Company’s website at www.finelandassets.com a notice of the change and if applicable therevised date.

Offer Price range

The Offer Price will not be more than HK$0.80 per Offer Share and is expected to be not lessthan HK$0.55 per Offer Share. The Offer Price will fall within the indicative Offer Price range asstated in this prospectus unless otherwise announced.


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Price payable on application

The Offer Price will not be more than HK$0.80 per Offer Share and is expected to be not lessthan HK$0.55 per Offer Share. Applicants under the Public Offer should pay, on application, themaximum Offer Price of HK$0.80 per Offer Share plus 1% brokerage, 0.005% Stock Exchangetrading fee and 0.0027% SFC transaction levy, amounting to a total of approximately HK$3,232.25per board lot of 4,000 Offer Shares. If the Offer Price, as finally determined in the mannerdescribed above, is lower than the maximum Offer Price of HK$0.80 per Offer Share, appropriaterefund payments (including the related brokerage, the Stock Exchange trading fee and the SFCtransaction levy attributable to the excess application monies) will be made to successfulapplicants, without interest.

ANNOUNCEMENT OF OFFER PRICE AND BASIS OF ALLOCATION

Announcement of the final Offer Price, together with the level of indication of interest in thePlacing, the level of applications in the Public Offer and the basis of allocation of the Public OfferShares is expected to be published on the website of the Stock Exchange at www.hkexnews.hkand our Company’s website at www.finelandassets.com on Tuesday, 14 November 2017.

COMMENCEMENT OF DEALINGS IN THE SHARES

Dealings in the Shares on GEM are expected to commence on Wednesday, 15 November2017. The Shares will be traded in board lots of 4,000 Shares each. The GEM stock code for theShares is 8376.

SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS

Application has been made to the Stock Exchange for the listing of and permission to deal inthe Shares in issue and to be issued as mentioned in this prospectus. If the Stock Exchange grantsthe listing of and permission to deal in the Shares and our Company complies with the stockadmission requirements of HKSCC, the Shares will be accepted as eligible securities by HKSCCfor deposit, clearance and settlement in CCASS with effect from the date of commencement ofdealings in the Shares on the Stock Exchange or, under contingent situation, any other dateHKSCC chooses. Settlement of transactions between Exchange Participants (as defined in theGEM Listing Rules) is required to take place in CCASS on the second Business Day after anytrading day.

All necessary arrangements have been made for the Shares to be admitted into CCASS.

All activities under CCASS are subject to the General Rules of CCASS and CCASSOperational Procedures in effect from time to time. Investors should seek the advice of theirstockbrokers or other professional advisers for details of those settlement arrangements and howsuch arrangements will affect their rights and interest.


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1. HOW TO APPLY

If you apply for Public Offer Shares, then you may not apply for or indicate an interest forPlacing Shares.

To apply for Public Offer Shares, you may:

. use a WHITE or YELLOW Application Form;

. apply online via the White Form eIPO service at www.eipo.com.hk; or

. electronically cause HKSCC Nominees to apply on your behalf.

None of you or your joint applicant(s) may make more than one application, except whereyou are a nominee and provide the required information in your application.

Our Company, the Sole Bookrunner, the White Form eIPO Service Provider and theirrespective agents may reject or accept any application in full or in part for any reason at theirdiscretion.

2. WHO CAN APPLY

You can apply for Public Offer Shares on a WHITE or YELLOW Application Form if youor the person(s) for whose benefit you are applying:

. are 18 years of age or older;

. have a Hong Kong address;

. are outside the United States, and are not a United States Person (as defined inRegulation S under the U.S. Securities Act); and

. are not a legal or natural person of the PRC.

If you apply online through the White Form eIPO service, in addition to the above, youmust also: (i) have a valid Hong Kong identity card number; and (ii) provide a valid e-mailaddress and a contact telephone number.

If you are a firm, the application must be in the individual members’ names. If you are abody corporate, the application form must be signed by a duly authorised officer, who must statehis representative capacity, and stamped with your corporation’s chop.

If an application is made by a person under a power of attorney, our Company and the SoleBookrunner may accept it at their discretion and on any conditions they think fit, includingevidence of the attorney’s authority.

The number of joint applicants may not exceed four and may not apply by means of WhiteForm eIPO service for the Public Offer Shares.

HOW TO APPLY FOR PUBLIC OFFER SHARES

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Unless permitted by the GEM Listing Rules, you cannot apply for any Public Offer Shares ifyou are:

. an existing beneficial owner of shares in our Company and/or any of our subsidiaries;

. a director or chief executive officer of our Company and/or any of our subsidiaries;

. an associate (as defined in the GEM Listing Rules) of any of the above;

. a connected person of our Company or will become a connected person of our Companyimmediately upon completion of the Share Offer; or

. have been allocated or have applied for or indicated an interest in any Placing Shares orotherwise participate in the Placing.

3. APPLYING FOR PUBLIC OFFER SHARES WHICH APPLICATION CHANNEL TOUSE

Which Application Channel to Use

For Public Offer Shares to be issued in your own name, use a WHITE ApplicationForm or online through the White Form eIPO service at www.eipo.com.hk.

For Public Offer Shares to be issued in the name of HKSCC Nominees and depositeddirectly into CCASS to be credited to your or a designated CCASS Participant’s stockaccount, use a YELLOW Application Form or electronically instruct HKSCC via CCASS tocause HKSCC Nominees to apply for you.

Where to collect the Application Forms

You can collect a WHITE Application Form and a prospectus during normal businesshours from 9:00 a.m. on Tuesday, 31 October 2017 to 12:00 noon on Tuesday, 7 November2017 from:

(i) the following office of the Public Offer Underwriter(s):

RaffAello Securities (HK) LimitedRooms 2002 and 2002B, 20/FTower Two, Lippo Centre89 Queensway, AdmiraltyHong Kong

(ii) the following office of the Sole Sponsor:

RaffAello Capital LimitedRooms 2002, 20/FTower Two, Lippo Centre89 Queensway, AdmiraltyHong Kong


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(iii) any of the following branches of Bank of China (Hong Kong) Limited:

Branch Address

Hong Kong Island Shek Tong Tsui Branch 534 Queen’s Road West,Shek Tong Tsui

409 Hennessy RoadBranch

409–415 Hennessy Road,Wan Chai

Kowloon Mei Foo Mount SterlingMall Branch

Shop N47–49Mount Sterling Mall,Mei Foo Sun Chuen

Ma Tau Kok RoadBranch

39–45 Ma Tau Kok Road,To Kwa Wan

Tseung Kwan O PlazaBranch

Shop 112–125, Level 1,Tseung Kwan O Plaza,Tseung Kwan O

New Territories Citywalk Branch Shop 65, G/F, Citywalk,1 Yeung Uk Road,Tsuen Wan

You can collect a YELLOW Application Form and a prospectus during normal businesshours from 9:00 a.m. on Tuesday, 31 October 2017 until 12:00 noon on Tuesday, 7November 2017 from the Depository Counter of HKSCC at 1/F, One & Two ExchangeSquare, 8 Connaught Place, Central, Hong Kong or from your stockbroker.

Time for Lodging Application Forms

Your completed WHITE or YELLOW Application Form, together with a cheque or abanker’s cashier order attached and marked payable to ‘‘Bank of China (Hong Kong)Nominees Limited — Fineland Group Public Offer’’ for the payment, should be deposited inthe special collection boxes provided at any of the branches of the receiving bank listedabove, at the following times:

Tuesday, 31 October 2017 — 9:00 a.m. to 5:00 p.m.Wednesday, 1 November 2017 — 9:00 a.m. to 5:00 p.m.Thursday, 2 November 2017 — 9:00 a.m. to 5:00 p.m.

Friday, 3 November 2017 — 9:00 a.m. to 5:00 p.m.Saturday, 4 November 2017 — 9:00 a.m. to 1:00 p.m.Monday, 6 November 2017 — 9:00 a.m. to 5:00 p.m.Tuesday, 7 November 2017 — 9:00 a.m. to 12:00 noon

The application lists will be open from 11:45 a.m. to 12:00 noon on Tuesday, 7November 2017, the last application day or such later time as described in the paragraphheaded ‘‘10. Effect of bad weather on the opening of the applications lists’’ in this section.


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4. TERMS AND CONDITIONS OF AN APPLICATION

Follow the detailed instructions in the Application Form carefully; otherwise, yourapplication may be rejected.

By submitting an Application Form or applying through White Form eIPO service, amongother things, (and if you are joint applicants, each of you jointly and severally) for yourself or asan agent or a nominee on behalf of each person of whom you act:

(i) undertake to execute all relevant documents and instruct and authorise our Companyand/or the Sole Bookrunner (or its agents or nominees), as agents of our Company, toexecute any documents for you and to do on your behalf all things necessary to registerany Public Offer Shares allocated to you in your name or in the name of HKSCCNominees as required by the Articles of Association;

(ii) agree to comply with the Companies Law, the Companies (Winding Up andMiscellaneous Provisions) Ordinance, the Companies Ordinance, and the Articles ofAssociation;

(iii) confirm that you have read the terms and conditions and application procedures set outin this prospectus and in the Application Form and agree to be bound by them;

(iv) confirm that you have received and read this prospectus and have only relied on theinformation and representations contained in this prospectus in making your applicationand will not rely on any other information or representations except those in anysupplement to this prospectus;

(v) confirm that you are aware of the restrictions on the Share Offer in this prospectus;

(vi) agree that none of our Company, the Sole Sponsor, the Sole Bookrunner, the Sole LeadManager, the Underwriters, their respective directors, officers, employees, partners,agents, advisers and any other parties involved in the Share Offer is or will be liable forany information and representations not in this prospectus (and any supplement to it);

(vii) undertake and confirm that you or the person(s) for whose benefit you have made theapplication have not applied for or taken up, or indicated an interest for, and will notapply for or take up, or indicate an interest for, any Offer Shares under the Placing norparticipated in the Placing;

(viii) agree to disclose to our Company, our Hong Kong Share Registrar, receiving bank, theSole Sponsor, the Sole Bookrunner, the Sole Lead Manager, the Underwriters and/ortheir respective advisers and agents any personal data which they may require about youand the person(s) for whose benefit you have made the application;

(ix) if the laws of any place outside Hong Kong apply to your application, agree and warrantthat you have complied with all such laws and none of our Company, the Sole Sponsor,the Sole Bookrunner, the Sole Lead Manager, and the Underwriters nor any of theirrespective officers or advisers will breach any law outside Hong Kong as a result of the


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acceptance of your offer to purchase, or any action arising from your rights andobligations under the terms and conditions contained in this prospectus and theApplication Form;

(x) agree that once your application has been accepted, you may not rescind it because ofan innocent misrepresentation;

(xi) agree that your application will be governed by the laws of Hong Kong;

(xii) represent, warrant and undertake that (i) you understand that the Public Offer Shareshave not been and will not be registered under the U.S. Securities Act; and (ii) you andany person for whose benefit you are applying for the Public Offer Shares are outsidethe United States (as defined in Regulation S) or are a person described in paragraph(h)(3) of Rule 902 of Regulation S;

(xiii) warrant that the information you have provided is true and accurate;

(xiv) agree to accept the Public Offer Shares applied for, or any lesser number allocated toyou under the application;

(xv) authorise our Company to place your name(s) or the name of the HKSCC Nominees, onour Company’s register of members as the holder(s) of any Public Offer Shares allocatedto you, and our Company and/or its agents to send any share certificate(s) and/or any e-Refund payment instructions and/or any refund cheque(s) to you or the first-namedapplicant for joint application by ordinary post at your own risk to the address stated onthe application, unless you are eligible to collect the share certificate(s) and/or refundcheque(s) in person;

(xvi) declare and represent that this is the only application made and the only applicationintended by you to be made to benefit you or the person for whose benefit you areapplying;

(xvii) understand that our Company, the Sole Sponsor, the Sole Bookrunner, the Sole LeadManager and the Underwriters will rely on your declarations and representations indeciding whether or not to make any allotment of any of the Public Offer Shares to youand that you may be prosecuted for making a false declaration;

(xviii) (if the application is made for your own benefit) warrant that no other application hasbeen or will be made for your benefit on a WHITE or YELLOW Application Form orby giving electronic application instructions to HKSCC or to the White Form eIPOService Provider by you or by any one as your agent or by any other person; and

(xix) (if you are making the application as an agent for the benefit of another person) warrantthat (i) no other application has been or will be made by you as agent for or for thebenefit of that person or by that person or by any other person as agent for that personon a WHITE or YELLOW Application Form or by giving electronic applicationinstructions to HKSCC; and (ii) you have due authority to sign the Application Form orgive electronic application instructions on behalf of that other person as their agent.


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Additional Instructions for YELLOW Application Form

You may refer to the YELLOW Application Form for details.

5. APPLYING THROUGH WHITE FORM eIPO SERVICE

General

Individuals who meet the criteria in the ‘‘— 2. Who can apply’’ section, may applythrough the White Form eIPO service for the Offer Shares to be allotted and registered intheir own names through the designated website at www.eipo.com.hk.

Detailed instructions for application through the White Form eIPO service are on thedesignated website. If you do not follow the instructions, your application may be rejectedand may not be submitted to the Company. If you apply through the designated website, youauthorise the White Form eIPO Service Provider to apply on the terms and conditions in thisprospectus, as supplemented and amended by the terms and conditions of the White FormeIPO service.

Time for Submitting Applications under the White Form eIPO Service

You may submit your application to the White Form eIPO Service Provider atwww.eipo.com.hk (24 hours daily, except on the last application day) from 9:00 am onTuesday, 31 October 2017 until 11:30 a.m. on Tuesday, 7 November 2017 and the latest timefor completing full payment of application monies in respect of such applications will be12:00 noon on Tuesday, 7 November 2017 or such later time specified under ‘‘— 10. Effectsof Bad Weather on the Opening of the Applications Lists’’ in this section.

No Multiple Applications

If you apply by means of White Form eIPO service, once you complete payment inrespect of any electronic application instruction given by you or for your benefit through theWhite Form eIPO service to make an application for Public Offer Shares, an actualapplication shall be deemed to have been made. For the avoidance of doubt, giving anelectronic application instruction under White Form eIPO service more than once andobtaining different application reference numbers without effecting full payment in respect ofa particular reference number will not constitute an actual application.

If you are suspected of submitting more than one application through the White FormeIPO service or by any other means, all of your applications are liable to be rejected.

Section 40 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance

For the avoidance of doubt, the Company and all other parties involved in thepreparation of this prospectus acknowledge that each applicant who gives or causes to giveelectronic application instructions is a person who may be entitled to compensation under


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Section 40 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (asapplied by Section 342E of the Companies (Winding Up and Miscellaneous Provisions)Ordinance).

Environmental Protection

The obvious advantage of White Form eIPO is to save the use of papers via the self-serviced and electronic application process. Computershare Hong Kong Investor ServicesLimited, being the White Form eIPO Service Provider, will contribute HK$2.00 for each‘‘Fineland Real Estate Services Group Limited’’ White Form eIPO application submitted viawww.eipo.com.hk to support the funding of ‘‘Source of Dong Jiang — Hong Kong Forest’’project initiated by Friends of the Earth (HK).

6. APPLYING BY GIVING ELECTRONIC APPLICATION INSTRUCTIONS TO HKSCCVIA CCASS

General

CCASS Participants may give electronic application instructions to apply for thePublic Offer Shares and to arrange payment of the money due on application and payment ofrefunds under their participant agreements with HKSCC and the General Rules of CCASSand the CCASS Operational Procedures.

If you are a CCASS Investor Participant, you may give these electronic applicationinstructions through the CCASS Phone System by calling +852 2979 7888 or through theCCASS Internet System (https://ip.ccass.com) (using the procedures in HKSCC’s ‘‘AnOperating Guide for Investor Participants’’ in effect from time to time).

HKSCC can also input electronic application instructions for you if you go to:

Hong Kong Securities Clearing Company LimitedCustomer Service Centre

1/F, One & Two Exchange Square,8 Connaught Place, Central,

Hong Kong

and complete an input request form.

You can also collect a prospectus from this address.

If you are not a CCASS Investor Participant, you may instruct your broker orcustodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to giveelectronic application instructions via CCASS terminals to apply for the Public OfferShares on your behalf.

You will be deemed to have authorised HKSCC and/or HKSCC Nominees to transferthe details of your application to our Company, the Sole Bookrunner, the Sole Lead Managerand our Hong Kong Share Registrar.


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Giving electronic application instructions to HKSCC via CCASS

Where you have given electronic application instructions to apply for the Public OfferShares and a WHITE Application Form is signed by HKSCC Nominees on your behalf:

(i) HKSCC Nominees will only be acting as a nominee for you and is not liable forany breach of the terms and conditions of the WHITE Application Form or thisprospectus;

(ii) HKSCC Nominees will do the following things on your behalf:

. agree that the Public Offer Shares to be allotted shall be issued in the name ofHKSCC Nominees and deposited directly into CCASS for the credit of theCCASS Participant’s stock account on your behalf or your CCASS InvestorParticipant’s stock account;

. agree to accept the Public Offer Shares applied for or any lesser numberallocated;

. undertake and confirm that you have not applied for or taken up, will notapply for or take up, or indicate an interest for, any Placing Shares under thePlacing;

. (if the electronic application instructions are given for your benefit) declarethat only one set of electronic application instructions has been given foryour benefit;

. (if you are an agent for another person) declare that you have only given oneset of electronic application instructions for the other person’s benefit andare duly authorised to give those instructions as their agent;

. confirm that you understand that our Company, our Directors, the SoleBookrunner and the Sole Lead Manager will rely on your declarations andrepresentations in deciding whether or not to make any allotment of any ofthe Public Offer Shares to you and that you may be prosecuted if you make afalse declaration;

. authorise our Company to place HKSCC Nominees’ name on our Company’sregister of members as the holder of the Public Offer Shares allocated to youand to send share certificate(s) and/or refund monies under the arrangementsseparately agreed between us and HKSCC;

. confirm that you have read the terms and conditions and applicationprocedures set out in this prospectus and agree to be bound by them;


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. confirm that you have received and/or read a copy of this prospectus and haverelied only on the information and representations in this prospectus incausing the application to be made, save as set out in any supplement to thisprospectus;

. agree that none of our Company, the Sole Sponsor, the Sole Bookrunner, theSole Lead Manager, the Underwriters, their respective directors, officers,employees, partners, agents, advisers and any other parties involved in theShare Offer, is or will be liable for any information and representations notcontained in this prospectus (and any supplement to it);

. agree to disclose your personal data to our Company, our Hong Kong ShareRegistrar, receiving bank, the Sole Bookrunner, the Sole Lead Manager, theUnderwriters and/or its respective advisers and agents;

. agree (without prejudice to any other rights which you may have) that onceHKSCC Nominees’ application has been accepted, it cannot be rescinded forinnocent misrepresentation;

. agree that any application made by HKSCC Nominees on your behalf isirrevocable before the fifth day after the time of the opening of theapplication lists (excluding any day which is Saturday, Sunday or publicholiday in Hong Kong), such agreement to take effect as a collateral contractwith us and to become binding when you give the instructions and suchcollateral contract to be in consideration of our Company agreeing that it willnot offer any Public Offer Shares to any person before the fifth day after thetime of the opening of the application lists (excluding any day which isSaturday, Sunday or public holiday in Hong Kong), except by means of oneof the procedures referred to in this prospectus. However, HKSCC Nomineesmay revoke the application before the fifth day after the time of the openingof the application lists (excluding for this purpose any day which is aSaturday, Sunday or public holiday in Hong Kong) if a person responsible forthis prospectus under Section 40 of the Companies (Winding Up andMiscellaneous Provisions) Ordinance gives a public notice under that sectionwhich excludes or limits that person’s responsibility for this prospectus;

. agree that once HKSCC Nominees’ application is accepted, neither thatapplication nor your electronic application instructions can be revoked, andthat acceptance of that application will be evidenced by our Company’sannouncement of the Public Offer results;

. agree to the arrangements, undertakings and warranties under the participantagreement between you and HKSCC, read with the General Rules of CCASSand the CCASS Operational Procedures, for the giving electronic applicationinstructions to apply for Public Offer Shares;


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. agree with our Company, for itself and for the benefit of each Shareholder(and so that our Company will be deemed by its acceptance in whole or inpart of the application by HKSCC Nominees to have agreed, for itself and onbehalf of each of the Shareholders, with each CCASS Participant givingelectronic application instructions) to observe and comply with theCompanies Law, the Companies (Winding Up and Miscellaneous Provisions)Ordinance, the Companies Ordinance and the Articles of Association; and

. agree that your application, any acceptance of it and the resulting contractwill be governed by the Laws of Hong Kong.

Effect of Giving electronic application instructions to HKSCC via CCASS

By giving electronic application instructions to HKSCC or instructing your broker orcustodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to givesuch instructions to HKSCC, you (and, if you are joint applicants, each of you jointly andseverally) are deemed to have done the following things. Neither HKSCC nor HKSCCNominees shall be liable to our Company or any other person in respect of the thingsmentioned below:

. instructed and authorised HKSCC to cause HKSCC Nominees (acting as nomineefor the relevant CCASS Participants) to apply for the Public Offer Shares on yourbehalf;

. instructed and authorised HKSCC to arrange payment of the maximum Offer Price,brokerage, SFC transaction levy and the Stock Exchange trading fee by debitingyour designated bank account and, in the case of a wholly or partially unsuccessfulapplication and/or if the Offer Price is less than the maximum Offer Price perOffer Share initially paid on application, refund of the application monies(including brokerage, SFC transaction levy and the Stock Exchange trading fee) bycrediting your designated bank account; and

. instructed and authorised HKSCC to cause HKSCC Nominees to do on your behalfall the things stated in the WHITE Application Form and in this prospectus.

Minimum Purchase Amount and Permitted Numbers

You may give or cause your broker or custodian who is a CCASS Clearing Participantor a CCASS Custodian Participant to give electronic application instructions for aminimum of 4,000 Public Offer Shares. Instructions for more than 4,000 Public Offer Sharesmust be in one of the numbers set out in the table in the Application Forms. No applicationfor any other number of Public Offer Shares will be considered and any such application isliable to be rejected.


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Time for Inputting Electronic Application Instructions

CCASS Clearing/Custodian Participants can input electronic application instructions atthe following times on the following dates:

Tuesday, 31 October 2017 — 9:00 a.m. to 8:30 p.m.(1)

Wednesday, 1 November 2017 — 8:00 a.m. to 8:30 p.m.(1)

Thursday, 2 November 2017 — 8:00 a.m. to 8:30 p.m.(1)

Friday, 3 November 2017 — 8:00 a.m. to 8:30 p.m.(1)

Monday, 6 November 2017 — 8:00 a.m. to 8:30 p.m.(1)

Tuesday, 7 November 2017 — 8:00 a.m.(1) to 12:00 noon

Note:

(1) These times are subject to change as HKSCC may determine from time to time with prior notification

to CCASS Clearing/Custodian Participants.

CCASS Investor Participants can input electronic application instructions from 9:00a.m. on Tuesday, 31 October 2017 until 12:00 noon on Tuesday, 7 November 2017 (24 hoursdaily, except on the last application day).

The latest time for inputting your electronic application instructions will be 12:00noon on Tuesday, 7 November 2017, the last application day or such later time as describedin the paragraph headed ‘‘10. Effect of bad weather on the opening of the application lists’’in this section.

No Multiple Applications

If you are suspected of having made multiple applications or if more than oneapplication is made for your benefit, the number of Public Offer Shares applied for byHKSCC Nominees will be automatically reduced by the number of Public Offer Shares forwhich you have given such instructions and/or for which such instructions have been givenfor your benefit. Any electronic application instructions to make an application for thePublic Offer Shares given by you or for your benefit to HKSCC shall be deemed to be anactual application for the purposes of considering whether multiple applications have beenmade.

Section 40 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance

For the avoidance of doubt, our Company and all other parties involved in thepreparation of this prospectus acknowledge that each CCASS Participant who gives or causesto give electronic application instructions is a person who may be entitled to compensationunder Section 40 (as applied by Section 342E of the Companies (Winding Up andMiscellaneous Provisions) Ordinance).


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Personal Data

The section of the Application Form headed ‘‘Personal Data’’ applies to any personaldata held by our Company, the Hong Kong Share Registrar, the receiving bank, the SoleBookrunner, the Underwriters and any of their respective advisers and agents about you inthe same way as it applies to personal data about applicants other than HKSCC Nominees.

7. WARNING FOR ELECTRONIC APPLICATIONS

The subscription of the Public Offer Shares by giving electronic application instructions toHKSCC is only a facility provided to CCASS Participants. Similarly, the application for PublicOffer Shares through the White Form eIPO service is also only a facility provided by the WhiteForm eIPO Service Provider to public investors. Such facilities are subject to capacity limitationsand potential service interruptions and you are advised not to wait until the last application day inmaking your electronic applications. Our Company, our Directors, the Sole Sponsor, the SoleBookrunner, the Sole Lead Manager and the Underwriters take no responsibility for suchapplications and provide no assurance that any CCASS Participant or persons applying through theWhite Form eIPO service will be allotted any Public Offer Shares.

To ensure that CCASS Investor Participants can give their electronic applicationinstructions, they are advised not to wait until the last minute to input their instructions to thesystems. In the event that CCASS Investor Participants have problems in the connection to CCASSPhone System/CCASS Internet System for submission of electronic application instructions, theyshould either (i) submit a WHITE or YELLOW Application Form, or (ii) go to HKSCC’sCustomer Service Centre to complete an input request form for electronic applicationinstructions before 12:00 noon on Tuesday, 7 November 2017.

8. HOW MANY APPLICATIONS CAN YOU MAKE

Multiple applications for the Public Offer Shares are not allowed except by nominees. If youare a nominee, in the box on the Application Form marked ‘‘For nominees’’ you must include:

. an account number; or

. some other identification code,

for each beneficial owner or, in the case of joint beneficial owners, for each joint beneficial owner.If you do not include this information, the application will be treated as being made for yourbenefit.

All of your applications will be rejected if more than one application on a WHITE or YELLOWApplication Form or by giving electronic application instructions to HKSCC or through WhiteForm eIPO service, is made for your benefit (including the part of the application made byHKSCC Nominees acting on electronic application instructions). If an application is made by anunlisted company and:

. the principal business of that company is dealing in securities; and


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. you exercise statutory control over that company,

then the application will be treated as being for your benefit.

‘‘Unlisted company’’ means a company with no equity securities listed on the StockExchange.

‘‘Statutory control’’ means you:

. control the composition of the board of directors of the company;

. control more than half of the voting power of the company; or

. hold more than half of the issued share capital of the company (not counting any part ofit which carries no right to participate beyond a specified amount in a distribution ofeither profits or capital).

9. HOW MUCH ARE THE PUBLIC OFFER SHARES

The WHITE and YELLOW Application Forms have tables showing the exact amountpayable for Shares.

You must pay the maximum Offer Price, brokerage, SFC transaction levy and the StockExchange trading fee in full upon application for the Public Offer Shares under the terms set out inthe Application Forms.

You may submit an application using a WHITE or YELLOW Application Form or throughWhite Form eIPO service in respect of a minimum of 4,000 Public Offer Shares. Each applicationor electronic application instruction in respect of more than 4,000 Public Offer Shares must bein one of the numbers set out in the table in the Application Form.

If your application is successful, brokerage will be paid to the Exchange Participants, and theSFC transaction levy and the Stock Exchange trading fee are paid to the Stock Exchange (in thecase of the SFC transaction levy, collected by the Stock Exchange on behalf of the SFC).

For further details on the Offer Price, see the section headed ‘‘Structure and Conditions of theShare Offer — Offer Price’’.

10. EFFECT OF BAD WEATHER ON THE OPENING OF THE APPLICATION LISTS

The application lists will not open if there is:

. a tropical cyclone warning signal number 8 or above; or

. a ‘‘black’’ rainstorm warning,

in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Tuesday, 7 November2017.


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Instead they will open between 11:45 a.m. and 12:00 noon on the next Business Day whichdoes not have either of those warnings in Hong Kong in force at any time between 9:00 a.m. and12:00 noon.

If the application lists do not open and close on Tuesday, 7 November 2017 or if there is atropical cyclone warning signal number 8 or above or a ‘‘black’’ rainstorm warning signal in forcein Hong Kong that may affect the dates mentioned in the section headed ‘‘Expected timetable’’ ofthis prospectus, an announcement will be made in such event.

11. PUBLICATION OF RESULTS

Our Company expects to announce the final Offer Price, the level of indication of interestin the Placing, the level of applications in the Public Offer and the basis of allocation ofthe Public Offer Shares on Tuesday, 14 November 2017 on our Company’s website atwww.finelandassets.com and the Stock Exchange’s website at www.hkexnews.hk.

The results of allocations and the Hong Kong identity card/passport/Hong Kong businessregistration numbers of successful applicants under the Public Offer will be available at the timesand date and in the manner specified below:

. i n t h e a n no u n c emen t t o b e po s t e d on o u r Company ’s w eb s i t e a twww.finelandassets.com and the Stock Exchange’s website at www.hkexnews.hk byno later than 8:00 a.m. on Tuesday, 14 November 2017;

. from the designated results of allocations website at www.iporesults.com.hk with a‘‘search by ID’’ function on a 24-hour basis from 8:00 a.m. on Tuesday, 14 November2017 to 12:00 midnight on Monday, 20 November 2017;

. by telephone enquiry line by calling +852 2862 8669 between 9:00 a.m. and 10:00 p.m.from Tuesday, 14 November 2017 to Friday, 17 November 2017;

. in the special allocation results booklets which will be available for inspection duringopening hours from Tuesday, 14 November 2017 to Thursday, 16 November 2017 at thedesignated receiving bank branches.

If our Company accepts your offer to purchase (in whole or in part), which it may do byannouncing the basis of allocations and/or making available the results of allocations publicly,there will be a binding contract under which you will be required to purchase the Public OfferShares if the conditions of the Share Offer are satisfied and the Share Offer is not otherwiseterminated. Further details are contained in the section headed ‘‘Structure and Conditions of theShare Offer’’.

You will not be entitled to exercise any remedy of rescission for innocent misrepresentationat any time after acceptance of your application. This does not affect any other right you mayhave.


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12. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOTTED PUBLIC OFFERSHARES

You should note the following situations in which the Public Offer shares will not be allottedto you:

(i) If your application is revoked:

By completing and submitting an Application Form or giving electronic applicationinstructions to HKSCC or to the White Form eIPO Service Provider, you agree that yourapplication or the application made by HKSCC Nominees on your behalf cannot be revokedon or before the fifth day after the time of the opening of the application lists (excluding forthis purpose any day which is Saturday, Sunday or public holiday in Hong Kong). Thisagreement will take effect as a collateral contract with our Company.

Your application or the application made by HKSCC Nominees on your behalf may onlybe revoked on or before such fifth day if a person responsible for this prospectus underSection 40 (as applied by Section 342E) of the Companies (Winding Up and MiscellaneousProvisions) Ordinance gives a public notice under that section which excludes or limits thatperson’s responsibility for this prospectus.

If any supplement to this prospectus is issued, applicants who have already submitted anapplication will be notified that they are required to confirm their applications. If applicantshave been so notified but have not confirmed their applications in accordance with theprocedure to be notified, all unconfirmed applications will be deemed revoked.

If your application or the application made by HKSCC Nominees on your behalf hasbeen accepted, it cannot be revoked. For this purpose, acceptance of applications which arenot rejected will be constituted by notification in the press of the results of allocation, andwhere such basis of allocation is subject to certain conditions or provides for allocation byballot, such acceptance will be subject to the satisfaction of such conditions or results of theballot respectively.

(ii) If our Company or our agents exercise their discretion to reject your application:

Our Company, the Sole Bookrunner, the White Form eIPO Service Provider and theirrespective agents and nominees have full discretion to reject or accept any application, or toaccept only part of any application, without giving any reasons.

(iii) If the allotment of Public Offer Shares is void:

The allotment of Public Offer Shares will be void if the Listing Division of the StockExchange does not grant permission to list the Shares either:

. within three weeks from the closing date of the application lists; or


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. within a longer period of up to six weeks if the Listing Division of the StockExchange notifies our Company of that longer period within three weeks of theclosing date of the application lists.

(iv) If:

. you make multiple applications or suspected multiple applications;

. you or the person for whose benefit you are applying have applied for or taken up,or indicated an interest for, or have been or will be placed or allocated (includingconditionally and/or provisionally) Public Offer Shares and Placing Shares;

. your Application Form is not completed in accordance with the stated instructions;

. your electronic application instructions through the White Form eIPO serviceare not completed in accordance with the instructions, terms and conditions on thedesignated website;

. your payment is not made correctly or the cheque or banker’s cashier order paid byyou is dishonoured upon its first presentation;

. the Underwriting Agreements do not become unconditional or are terminated;

. our Company, the Sole Bookrunner or the Sole Lead Manager believe that byaccepting your application, it would violate applicable securities or other laws,rules or regulations; or

. your application is for more than 100% of the Public Offer Shares initially offeredunder the Public Offer.

13. REFUND OF APPLICATION MONIES

If an application is rejected, not accepted or accepted in part only, or if the Offer Price asfinally determined is less than the maximum Offer Price of HK$0.80 per Offer Share (excludingbrokerage, SFC transaction levy and the Stock Exchange trading fee thereon), or if the conditionsof the Public Offer are not fulfilled in accordance with ‘‘Structure and Conditions of the ShareOffer — Conditions of the Share Offer’’ of this prospectus or if any application is revoked, theapplication monies, or the appropriate portion thereof, together with the related brokerage, SFCtransaction levy and the Stock Exchange trading fee, will be refunded, without interest or thecheque or banker’s cashier order will not be cleared.

Any refund of your application monies will be made on or before Tuesday, 14 November2017.


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14. DESPATCH/COLLECTION OF SHARE CERTIFICATES AND REFUND MONIES

You will receive one share certificate for all Public Offer Shares allotted to you under thePublic Offer (except pursuant to applications made on YELLOW Application Forms or byelectronic application instructions to HKSCC via CCASS where the share certificates will bedeposited into CCASS as described below).

No temporary document of title will be issued in respect of the Shares. No receipt will beissued for sums paid on application. If you apply by WHITE or YELLOW Application Form,subject to personal collection as mentioned below, the following will be sent to you (or, in thecase of joint applicants, to the first-named applicant) by ordinary post, at your own risk, to theaddress specified on the Application Form:

. share certificate(s) for all the Public Offer Shares allotted to you (for YELLOWApplication Forms, share certificates will be deposited into CCASS as described below);and

. refund cheque(s) crossed ‘‘Account Payee Only’’ in favour of the applicant (or, in thecase of joint applicants, the first-named applicant) for (i) all or the surplus applicationmonies for the Public Offer Shares, wholly or partially unsuccessfully applied for; and/or (ii) the difference between the Offer Price and the maximum Offer Price per OfferShare paid on application in the event that the Offer Price is less than the maximumOffer Price (including brokerage, SFC transaction levy and the Stock Exchange tradingfee but without interest).

Part of the Hong Kong identity card number/passport number, provided by you or the first-named applicant (if you are joint applicants), may be printed on your refund cheque, if any. Yourbanker may require verification of your Hong Kong identity card number/passport number beforeencashment of your refund cheque(s). Inaccurate completion of your Hong Kong identity cardnumber/passport number may invalidate or delay encashment of your refund cheque(s).

Subject to arrangement on dispatch/collection of share certificates and refund monies asmentioned below, any refund cheques and share certificates are expected to be posted on or beforeTuesday, 14 November 2017. The right is reserved to retain any share certificate(s) and anysurplus application monies pending clearance of cheque(s) or banker’s cashier’s order(s).

Share certificates will only become valid at 8:00 a.m. on Wednesday, 15 November 2017provided that the Share Offer has become unconditional and the right of termination described inthe section headed ‘‘Underwriting’’ of this prospectus has not been exercised. Investors who tradeshares prior to the receipt of Share certificates or the Share certificates becoming valid do so attheir own risk.


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Personal Collection

(i) If you apply using a WHITE Application Form

If you apply for 1,000,000 or more Public Offer Shares and have provided allinformation required by your Application Form, you may collect your refund cheque(s) and/or share certificate(s) from the Hong Kong Share Registrar at Shops 1712–1716, 17th Floor,Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, from 9:00 a.m. to 1:00 p.m.on Tuesday, 14 November 2017 or such other date as notified by us in the newspapers.

If you are an individual who is eligible for personal collection, you must not authoriseany other person to collect for you. If you are a corporate applicant which is eligible forpersonal collection, your authorised representative must bear a letter of authorisation fromyour corporation stamped with your corporation’s chop. Both individuals and authorisedrepresentatives must produce, at the time of collection, evidence of identity acceptable to theHong Kong Share Registrar.

If you do not collect your refund cheque(s) and/or share certificate(s) personally withinthe time specified for collection, they will be despatched promptly to the address specified inyour Application Form by ordinary post at your own risk.

If you apply for fewer than 1,000,000 Public Offer Shares, your refund cheque(s) and/orshare certificate(s) will be sent to the address on the relevant Application Form on or beforeTuesday, 14 November 2017, by ordinary post and at your own risk.

(ii) If you apply using a YELLOW Application Form

If you apply for 1,000,000 Public Offer Shares or more, please follow the sameinstructions as described above for collection of refund cheque(s). If you have applied forless than 1,000,000 Public Offer Shares, your refund cheque(s) will be sent to the address onthe relevant Application Form on or before Tuesday, 14 November 2017, by ordinary postand at your own risk.

If you apply by using a YELLOW Application Form and your application is wholly orpartially successful, your share certificate(s) will be issued in the name of HKSCC Nomineesand deposited into CCASS for credit to your or the designated CCASS Participant’s stockaccount as stated in your Application Form on Tuesday, 14 November 2017, or uponcontingency, on any other date determined by HKSCC or HKSCC Nominees.

. If you apply through a designated CCASS participant (other than a CCASSinvestor participant)

For Public Offer Shares credited to your designated CCASS participant’s stockaccount (other than CCASS Investor Participant), you can check the number of PublicOffer Shares allotted to you with that CCASS participant.


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. If you are applying as a CCASS investor participant

Our Company will publish the results of CCASS Investor Participants’ applicationstogether with the results of the Public Offer in the manner described in ‘‘— 11.Publication of Results’’ above. You should check the announcement published by ourCompany and report any discrepancies to HKSCC before 5:00 p.m. on Tuesday, 14November 2017 or any other date as determined by HKSCC or HKSCC Nominees.Immediately after the credit of the Public Offer Shares to your stock account, you cancheck your new account balance via the CCASS Phone System and CCASS InternetSystem.

(iii) If you apply through White Form eIPO Service

If you apply for 1,000,000 Public Offer Shares or more and your application is whollyor partially successful, you may collect your Share certificate(s) from Computershare HongKong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183Queen’s Road East, Wanchai, Hong Kong, from 9:00 a.m. to 1:00 p.m. on Tuesday, 14November 2017, or such other date as is notified by the Company in the newspapers as thedate of despatch/collection of Share certificates/e-Refund payment instructions/refundcheques.

If you do not collect your Share certificate(s) personally within the time specified forcollection, they will be sent to the address specified in your application instructions byordinary post at your own risk.

If you apply for fewer than 1,000,000 Public Offer Shares, your Share certificate(s)(where applicable) will be sent to the address specified in your application instructions on orbefore Tuesday, 14 November 2017 by ordinary post at your own risk.

If you apply and pay the application monies from a single bank account, any refundmonies will be despatched to that bank account in the form of e-Refund payment instructions.If you apply and pay the application monies from multiple bank accounts, any refund monieswill be despatched to the address as specified in your application instructions in the form ofrefund cheque(s) by ordinary post at your own risk.

(iv) If you apply via electronic application instructions to HKSCC

Allocation of Public Offer Shares

For the purposes of allocating Public Offer Shares, HKSCC Nominees will not betreated as an applicant. Instead, each CCASS Participant who gives electronicapplication instructions or each person for whose benefit instructions are given will betreated as an applicant.


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Deposit of Share Certificates into CCASS and Refund of Application Monies

. If your application is wholly or partially successful, your share certificate(s) willbe issued in the name of HKSCC Nominees and deposited into CCASS for thecredit of your designated CCASS Participant’s stock account or your CCASSInvestor Participant stock account on Tuesday, 14 November 2017, or, on anyother date determined by HKSCC or HKSCC Nominees.

. Our Company expects to publish the application results of CCASS Participants(and where the CCASS Participant is a broker or custodian, our Company willinclude information relating to the relevant beneficial owner), your Hong Kongidentity card number/passport number or other identification code (Hong Kongbusiness registration number for corporations) and the basis of allotment of thePublic Offer in the manner specified in ‘‘— 11. Publication of Results’’ above onTuesday, 14 November 2017. You should check the announcement published byour Company and report any discrepancies to HKSCC before 5:00 p.m. onTuesday, 14 November 2017 or such other date as determined by HKSCC orHKSCC Nominees.

. If you have instructed your broker or custodian to give electronic applicationinstructions on your behalf, you can also check the number of Public Offer Sharesallotted to you and the amount of refund monies (if any) payable to you with thatbroker or custodian.

. If you have applied as a CCASS Investor Participant, you can also check thenumber of Public Offer Shares allotted to you and the amount of refund monies (ifany) payable to you via the CCASS Phone System and the CCASS Internet System(under the procedures contained in HKSCC’s ‘‘An Operating Guide for InvestorParticipants’’ in effect from time to time) on Tuesday, 14 November 2017.Immediately following the credit of the Public Offer Shares to your stock accountand the credit of refund monies to your bank account, HKSCC will also makeavailable to you an activity statement showing the number of Public Offer Sharescredited to your CCASS Investor Participant stock account and the amount ofrefund monies (if any) credited to your designated bank account.

. Refund of your application monies (if any) in respect of wholly and partiallyunsuccessful applications and/or difference between the Offer Price and themaximum Offer Price per Offer Share initially paid on application (includingbrokerage, SFC transaction levy and the Stock Exchange trading fee but withoutinterest) will be credited to your designated bank account or the designated bankaccount of your broker or custodian on Tuesday, 14 November 2017.


– 260 –

15. ADMISSION OF THE SHARES INTO CCASS

If the Stock Exchange grants the listing of, and permission to deal in, the Shares and wecomply with the stock admission requirements of HKSCC, the Shares will be accepted as eligiblesecurities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date ofcommencement of dealings in the Shares or any other date HKSCC chooses. Settlement oftransactions between Exchange Participants (as defined in the GEM Listing Rules) is required totake place in CCASS on the second Business Day after any trading day.

All activities under CCASS are subject to the General Rules of CCASS and CCASSOperational Procedures in effect from time to time.

Investors should seek the advice of their stockbroker or other professional adviser for detailsof the settlement arrangement as such arrangements may affect their rights and interests.

All necessary arrangements have been made enabling the Shares to be admitted into CCASS.


– 261 –

The following is the text of a report set out on pages I-1 to I-35, received from theCompany’s reporting accountant, BDO Limited, Certified Public Accountants, Hong Kong, for thepurpose of incorporation in this prospectus.

ACCOUNTANT’S REPORT ON HISTORICAL FINANCIAL INFORMATIONTO THE DIRECTORS OF FINELAND REAL ESTATE SERVICES GROUP LIMITED(FORMERLY KNOWN AS FINELAND ASSETS MANAGEMENT HOLDINGS GROUPLIMITED) AND RAFFAELLO CAPITAL LIMITED

Introduction

We report on the historical financial information of Fineland Real Estate Services GroupLimited (formerly known as Fineland Assets Management Holdings Group Limited) (the‘‘Company’’) and its subsidiaries (together the ‘‘Group’’) set out on pages I-1 to I-35, whichcomprises the consolidated statements of financial position as at 31 December 2015, 31 December2016 and 30 April 2017 and the statement of financial position of the Company as at 30 April2017, and the consolidated statements of comprehensive income, the consolidated statements ofchanges in equity and the consolidated statements of cash flows for each of the two years ended 31December 2015 and 2016 and the four months ended 30 April 2017 (the ‘‘Relevant Periods’’) anda summary of significant accounting policies and other explanatory information (together the‘‘Historical Financial Information’’). The Historical Financial Information set out on pages I-4 toI-35 forms an integral part of this report, which has been prepared for inclusion in the prospectusof the Company dated 31 October 2017 (the ‘‘Prospectus’’) in connection with the initial listing ofshares of the Company on the Growth Enterprise Market (the ‘‘GEM’’) of The Stock Exchange ofHong Kong Limited (the ‘‘Stock Exchange’’).

Directors’ responsibility for the Historical Financial Information

The directors of the Company are responsible for the preparation of the Historical FinancialInformation that gives a true and fair view in accordance with the basis of presentation andpreparation set out in Notes 2 and 4(a) to the Historical Financial Information respectively, and forsuch internal control as the directors determine is necessary to enable the preparation of theHistorical Financial Information that is free from material misstatement, whether due to fraud orerror.

APPENDIX I ACCOUNTANT’S REPORT

– I-1 –

Reporting Accountant’s Responsibility

Our responsibility is to express an opinion on the Historical Financial Information and toreport our opinion to you. We conducted our work in accordance with Hong Kong Standard onInvestment Circular Reporting Engagements 200 ‘‘Accountants’ Reports on Historical FinancialInformation in Investment Circulars’’ issued by the Hong Kong Institute of Certified PublicAccountants (the ‘‘HKICPA’’). This standard requires that we comply with ethical standards andplan and perform our work to obtain reasonable assurance about whether the Historical FinancialInformation is free from material misstatement.

Our work involved performing procedures to obtain evidence about the amounts anddisclosures in the Historical Financial Information. The procedures selected depend on thereporting accountant’s judgement, including the assessment of risks of material misstatement of theHistorical Financial Information, whether due to fraud or error. In making those risk assessments,the reporting accountant considers internal control relevant to the entity’s preparation of theHistorical Financial Information that gives a true and fair view in accordance with the basis ofpresentation and preparation set out in Notes 2 and 4(a) to the Historical Financial Informationrespectively in order to design procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the entity’s internal control. Our workalso included evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by the directors, as well as evaluating the overall presentation of theHistorical Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Opinion

In our opinion the Historical Financial Information gives, for the purposes of the accountant’sreport, a true and fair view of the Company’s financial position as at 30 April 2017, the Group’sfinancial position as at 31 December 2015, 31 December 2016 and 30 April 2017 and of theGroup’s financial performance and cash flows for the Relevant Periods in accordance with thebasis of presentation and preparation set out in Notes 2 and 4(a) to the Historical FinancialInformation respectively.

Review of Stub Period Comparative Historical Financial Information

We have reviewed the stub period comparative historical financial information of the Groupwhich comprises the consolidated statement of comprehensive income, the consolidated statementof changes in equity and the consolidated statement of cash flows for the four months ended 30April 2016 and other explanatory information (together the ‘‘Stub Period Comparative HistoricalFinancial Information’’). The directors of the Company are responsible for the preparation andpresentation of the Stub Period Comparative Historical Financial Information in accordance withthe basis of presentation and preparation set out in Notes 2 and 4(a) to the Historical FinancialInformation respectively. Our responsibility is to express a conclusion on the Stub PeriodComparative Historical Financial Information based on our review. We conducted our review inaccordance with Hong Kong Standard on Review Engagements 2410 ‘‘Review of Interim FinancialInformation Performed by the Independent Auditor of the Entity’’ issued by the HKICPA. A


– I-2 –

review consists of making inquiries, primarily of persons responsible for financial and accountingmatters, and applying analytical and other review procedures. A review is substantially less inscope than an audit conducted in accordance with Hong Kong Standards on Auditing andconsequently does not enable us to obtain assurance that we would become aware of all significantmatters that might be identified in an audit. Accordingly, we do not express an audit opinion.Based on our review, nothing has come to our attention that causes us to believe that the StubPeriod Comparative Historical Financial Information, for the purposes of the accountant’s report, isnot prepared, in all material respects, in accordance with the basis of presentation and preparationset out in Notes 2 and 4(a) to the Historical Financial Information respectively.

Report on matters under the Rules Governing the Listing of Securities on the GEM of theStock Exchange and the Companies (Winding Up and Miscellaneous Provisions) Ordinance

Adjustments

In preparing the Historical Financial Information and the Stub Period Comparative HistoricalFinancial Information, no adjustments to the Underlying Financial Statements as defined on pageI-4 have been made.

Dividends

We refer to Note 13 to the Historical Financial Information which contains information aboutthe dividend declared by a subsidiary of the Company in respect of the Relevant Periods.

No financial statements for the Company

No financial statements have been prepared for the Company since its date of incorporation.

BDO LimitedCertified Public AccountantsLam Siu FungPractising Certificate no.: P05308

Hong Kong

31 October 2017


– I-3 –

I. HISTORICAL FINANCIAL INFORMATION

Set out below is the Historical Financial Information which forms an integral part of thisaccountant’s report.

The financial statements of the Group for the Relevant Periods, on which the HistoricalFinancial Information is based, were audited by BDO Limited in accordance with Hong KongStandards on Auditing issued by the HKICPA (the ‘‘Underlying Financial Statements’’).

1. Consolidated Statements of Comprehensive Income


Four months ended

30 April

2015 2016 2016 2017

Notes RMB’000 RMB’000 RMB’000 RMB’000

(Unaudited)

Revenue 7 90,059 106,345 33,548 43,271

Other income and gains 8 121 565 295 130

Employee benefit expenses 10 (59,059) (70,186) (19,913) (27,482)

Advertising, promotion and other

commission expenses (2,795) (6,776) (893) (1,279)

Operating lease charges in respect of

office and shop premises (4,852) (5,173) (1,485) (2,482)

Depreciation of property, plant and

equipment 15 (404) (393) (99) (163)

Other operating expenses (4,065) (3,492) (1,170) (1,559)

Listing expenses — — — (8,166)

Profit before income tax 9 19,005 20,890 10,283 2,270

Income tax 12(a) (6,112) (5,563) (3,291) (2,948)

Profit/(loss) and total

comprehensive income for the

year/period 12,893 15,327 6,992 (678)


– I-4 –

2. Consolidated Statements of Financial Position


30 April20172015 2016

Notes RMB’000 RMB’000 RMB’000

Non-current assetsProperty, plant and equipment 15 663 1,527 1,722

Deposits paid for acquisition of property,plant and equipment — — 864

Total non-current assets 663 1,527 2,586

Current assetsTrade receivables 16 4,963 9,804 6,697Deposits, prepayments and other receivables 1,146 3,375 6,480

Amounts due from fellow subsidiaries 17 38,497 9,391 10,849

Bank balances and cash 18 27,240 58,167 54,684

Total current assets 71,846 80,737 78,710

Current liabilitiesTrade payables 19 — 3,169 1,073

Accruals and other payables 17,891 26,002 30,610

Dividend payable 16,385 14,637 14,637

Amounts due to fellow subsidiaries 17 5,983 4,479 —

Tax payable 3,596 1,534 2,514

Total current liabilities 43,855 49,821 48,834

Net current assets 27,991 30,916 29,876

Total assets less current liabilities 28,654 32,443 32,462

Non-current liabilityDeferred tax liabilities 12(b) 1,693 2,031 2,728

Net assets 26,961 30,412 29,734

Capital and reservesShare capital 20(a) — — —*

Reserves 26,961 30,412 29,734

Total equity 26,961 30,412 29,734

* The balance represents amount less than RMB1,000.


– I-5 –

3. Statement of Financial Position of the Company

As at

30 April

2017

Notes RMB’000

Non-current asset

Investment in a subsidiary 2 922

Capital and reserves

Share capital 20(a) —*

Reserves 20(b) 922

922



– I-6 –

4. Consolidated Statements of Changes in Equity

Share

capital

Capital

reserve

Statutory

reserve

Retained

profits

Total

equity


(Note 20) (Note (i)) (Note (ii))

As at 1 January 2015 — 5,987 5,736 2,345 14,068

Profit and total comprehensive

income for the year — — — 12,893 12,893

As at 31 December 2015 and 1

January 2016 — 5,987 5,736 15,238 26,961


income for the year — — — 15,327 15,327

Dividend declared (Note 13) — — — (11,876) (11,876)

As at 31 December 2016 and

1 January 2017 — 5,987 5,736 18,689 30,412

Loss and total comprehensive

income for the period — — — (678) (678)

As at 30 April 2017 —* 5,987 5,736 18,011 29,734

As at 1 January 2016 — 5,987 5,736 15,238 26,961


income for the period

(unaudited) — — — 6,992 6,992

As at 30 April 2016 (unaudited) — 5,987 5,736 22,230 33,953


Notes:

(i) Capital reserve represents the difference between the fair value of the consideration paid and the carrying

value of the subsidiaries acquired and was recorded in the equity.

(ii) In accordance with the relevant laws and regulations in the People’s Republic of China (the ‘‘PRC’’) and

Articles of Association of the PRC subsidiaries, it is required to appropriate 10% of the annual net profits of

the PRC subsidiaries, after offsetting any prior years’ losses as determined under the relevant PRC

accounting standards, to their respective statutory reserves before distributing any net profit. When the

balances of the statutory reserves reach 50% of their respective registered capital, any further appropriation

is at the discretion of shareholders.


– I-7 –

5. Consolidated Statements of Cash Flows

Year ended 31 DecemberFour months ended

30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000(Unaudited)

Cash flows from operating activitiesProfit before income tax 19,005 20,890 10,283 2,270

Adjustments for:Interest income (121) (533) (295) (34)Gain on bargain purchase — (32) — —

Depreciation of property, plant andequipment 404 393 99 163

Impairment loss on trade receivables 19 369 369 5Loss/(gain) on disposal of property, plant

and equipment 42 3 3 (96)

Operating profit before working capitalchanges 19,349 21,090 10,459 2,308(Increase)/decrease in trade receivables (4,563) (5,133) 100 3,102Decrease/(increase) in deposits,

prepayments and other receivables 114 (2,226) (852) (3,105)(Increase)/decrease in amounts due from

fellow subsidiaries (2,561) 9,106 (8,977) (1,458)Increase/(decrease) in trade payables — 3,097 — (2,096)Increase in accruals and other payables 2,295 7,662 630 4,608

Cash generated from operations 14,634 33,596 1,360 3,359

Income tax paid (1,097) (7,287) (741) (1,271)

Net cash generated from operatingactivities 13,537 26,309 619 2,088

Cash flows from investing activitiesInterest income received 121 533 295 34Purchases of property, plant and equipment (89) (1,179) (19) (438)Deposits paid for acquisition of property,

plant and equipment — — — (864)Proceeds from disposal of property, plant

and equipment 36 10 10 176Decrease in amount due from a fellow

subsidiary — 20,000 — —

Net cash inflow on business combination — 382 — —

Net cash generated from/(used in)investing activities 68 19,746 286 (1,092)


– I-8 –


30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000(Unaudited)

Cash flows from financing activitiesDividend paid — (13,624) — —

Increase/(decrease) in amounts due tofellow subsidiaries 5,983 (1,504) (1,312) (4,479)

Net cash generated from/(used in)financing activities 5,983 (15,128) (1,312) (4,479)

Net increase/(decrease) in cash and cashequivalents 19,588 30,927 (407) (3,483)

Cash and cash equivalents at beginningof year/period 7,652 27,240 27,240 58,167

Cash and cash equivalents at end of year/period 27,240 58,167 26,833 54,684

Analysis of balances of cash and cashequivalents

Bank balances and cash 27,240 58,167 26,833 54,684


– I-9 –

II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION

1. GENERAL INFORMATION

The Company was incorporated as an exempted company in the Cayman Islands with limited liability on 16

February 2017 under the name of Fineland Assets Management Holdings Group Limited. Pursuant to the issuance of

Certificate of Incorporation on Change of Name by the Registrar of Companies in the Cayman Islands on 4 August 2017,

the name of the Company changed from ‘‘Fineland Assets Management Holdings Group Limited’’ to ‘‘Fineland Real

Estate Services Group Limited’’. The address of its registered office is P.O. Box 1350, Clifton House, 75 Fort Street,

Grand Cayman KY1–1108, Cayman Islands. Its principal place of business is located at 9/F, Wah Yuen Building, 149

Queen’s Road Central, Central, Hong Kong. The Group, comprising the Company and its subsidiaries, is principally

engaged in the provision of real estate agency services, property research and consultancy; and integrated services in the

PRC.

2. REORGANISATION AND BASIS OF PRESENTATION

Pursuant to the Reorganisation completed on 1 March 2017, as detailed in the subsection headed ‘‘Reorganisation’’

in the section headed ‘‘History, Reorganisation and Corporate Structure’’ in the Prospectus, the Company became the

holding company of the subsidiaries now comprising the Group by way of share swaps, through Fineland Holdings

(defined below), with the then existing shareholders of Fineland Real Estate Services (defined below). The share swaps

have no substance and do not form a business combination, and accordingly, the Historical Financial Information of the

Company and Fineland Holdings was consolidated with that of Fineland Real Estate Services using the predecessor

carrying amounts.

Upon completion of the Reorganisation and as of the date of this report, the Company has direct or indirect

interests in the following subsidiaries:

Name of subsidiary

Place and date ofincorporation/

establishment andtype of legal entity

Place ofoperations

Issued andpaid-up

capital/paid-upregisteredcapital

Effective interestheld by the Company

Principal activitiesDirectly Indirectly

Fineland Property Services Holdings

Limited (formerly known as

Fineland Assets Management

Holdings Limited) (‘‘Fineland

Holdings’’)

The British Virgin

Islands (the ‘‘BVI’’)

16 February 2017

Limited liability

company

The PRC 200 shares of

US$200

100% — Investment holding

Fineland Real Estate Services Limited

(formerly known as Fineland Assets

Management Company Limited)

(‘‘Fineland Real Estate Services’’)

Hong Kong 16 June

2016 Limited

liability company

The PRC 10 shares of

HK$10

— 100% Investment holding

Guangzhou Fineland Property

Consultancy Limited (‘‘Guangzhou

Fineland Property Consultancy’’)*

廣州方圓地產顧問有限公司

The PRC 17 March

1997 Limited

liability company

The PRC HK$6,000,000 — 100% Provision of real

estate

consultation,

agency, market

analysis and

marketing

services


– I-10 –

Name of subsidiary

Place and date ofincorporation/

establishment andtype of legal entity

Place ofoperations

Issued andpaid-up

capital/paid-upregisteredcapital

Effective interestheld by the Company

Principal activitiesDirectly Indirectly

Guangzhou Fang Yuan Bao Network

and Technology Limited (‘‘Fang

Yuan Bao’’)*

廣州房緣寶網絡科技有限公司

The PRC 17 June 2015

Limited liability

company

The PRC RMB1,000,000 — 100% Provision of online

property referral

and agency

services

Guangzhou Hai Yuan Bao Investment

Consultancy Limited (‘‘Hai Yuan

Bao’’)*

廣州海緣寶投資諮詢有限公司

The PRC 13 May 2016

Limited liability

company

The PRC RMB300,000 — 100% Inactive

* The English translated names are for identification purpose only

All companies now comprising the Group have adopted 31 December as their financial year end date.

As at the date of this report, no audited financial statements have been prepared for the Company and FinelandHoldings as they are not subject to statutory audit requirements under the relevant jurisdictions.

The statutory financial statements of Guangzhou Fineland Property Consultancy and Fang Yuan Bao for the yearsended 31 December 2015 and 2016 were audited by Guangzhou Huaxin Certified Public Accountants Co. Ltd, a firm ofcertified public accountants registered in the PRC. These statutory financial statements were prepared in accordance withthe relevant accounting principles and financial regulations applicable to the PRC enterprises.

No audited financial statements have been prepared for Fineland Real Estate Services and Hai Yuan Bao since theirrespective dates of incorporation and establishment where appropriate.

3. NEW OR REVISED HONG KONG FINANCIAL REPORTING STANDARDS (‘‘HKFRSs’’) THAT HAVEBEEN ISSUED BUT ARE NOT YET EFFECTIVE

As at the date of this report, the following new or revised HKFRSs are issued, but are not yet effective and havenot been early adopted by the Group in the preparation of the Historical Financial Information.

HKFRS 9 (2014) Financial Instruments1

HKFRS 15 Revenue from Contracts with Customers1

Amendments to HKFRS 15 Clarifications to HKFRS 15 Revenue from Contracts with Customers1

HKFRS 16 Leases2

HKFRS 17 Insurance Contracts3

Amendments to HKFRSs Annual Improvements to HKFRSs 2014–2016 Cycle1

Amendments to HKFRS 2 Classification and Measurement of Share-based Payment Transactions1

Amendments to HKFRS 4 Applying HKFRS 9 Financial Instruments with HKFRS 4 InsuranceContracts1

Amendments to HKFRS 10and HKAS 28

Sale or Contribution of Assets between an Investor and its Associate orJoint Venture4

Amendments to HKAS 40 Transfers of Investment Property1

HK(IFRIC)-Int 22 Foreign Currency Transactions and Advance Consideration1

HK(IFRIC)-Int 23 Uncertainty over Income Tax Treatments2

1 Effective for annual periods beginning on or after 1 January 20182 Effective for annual periods beginning on or after 1 January 20193 Effective for annual periods beginning on or after 1 January 20214 No mandatory effective date yet determined but is available for early adoption


– I-11 –

HKFRS 9 (2014) — Financial Instruments

HKFRS 9 introduces new requirements for the classification and measurement of financial assets. Debt

instruments that are held within a business model whose objective is to hold assets in order to collect contractual

cash flows (the business model test) and that have contractual terms that give rise to cash flows that are solely

payments of principal and interest on the principal amount outstanding (the contractual cash flow characteristics

test) are generally measured at amortised cost. Debt instruments that meet the contractual cash flow characteristics

test are measured at fair value through other comprehensive income (‘‘FVTOCI’’) if the objective of the entity’s

business model is both to hold and collect the contractual cash flows and to sell the financial assets. Entities may

make an irrevocable election at initial recognition to measure equity instruments that are not held for trading at

FVTOCI. All other debt and equity instruments are measured at fair value through profit or loss (‘‘FVTPL’’).

HKFRS 9 includes a new expected loss impairment model for all financial assets not measured at FVTPL

replacing the incurred loss model in HKAS 39 and new general hedge accounting requirements to allow entities to

better reflect their risk management activities in the financial statements.

HKFRS 9 carries forward the recognition, classification and measurement requirements for financial

liabilities from HKAS 39, except for financial liabilities designated at FVTPL, where the amount of change in fair

value attributable to change in credit risk of the liability is recognised in other comprehensive income unless that

would create or enlarge an accounting mismatch. In addition, HKFRS 9 retains the requirements in HKAS 39 for

derecognition of financial assets and financial liabilities.

The initial adoption of HKFRS 9 would not have a significant impact on the Group’s financial performance

and position.

HKFRS 15 — Revenue from Contracts with Customers

The new standard establishes a single revenue recognition framework. The core principle of the framework is

that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an

amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and

services. HKFRS 15 supersedes existing revenue recognition guidance including HKAS 18 Revenue, HKAS 11

Construction Contracts and related interpretations.

HKFRS 15 requires the application of a 5-step approach to revenue recognition:

Step 1: Identify the contract(s) with a customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to each performance obligation

Step 5: Recognise revenue when each performance obligation is satisfied

HKFRS 15 includes specific guidance on particular revenue related topics that may change the current

approach taken under HKFRSs. The standard also significantly enhances the qualitative and quantitative disclosures

related to revenue.

The initial adoption of HKFRS 15 would not have a significant impact on the Group’s financial performance

and position.

Amendments to HKFRS 15 — Clarification to HKFRS 15 Revenue from Contracts with Customers

The amendments to HKFRS 15 included clarifications on identification of performance obligations;

application of principal versus agent; licenses of intellectual property; and transition requirements.


– I-12 –

HKFRS 16 — Leases

For lessee accounting, HKFRS 16 introduces a single accounting model and requires a lessee to recognise

assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value.

A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a

lease liability representing its obligation to make lease payments. For lessor accounting, HKFRS 16 substantially

carries forward the lessor accounting requirements in HKAS 17. Accordingly, a lessor continues to classify its

leases as operating leases or finance leases, and to account for those two types of leases differently.

Application of HKFRS 16 will result in the Group’s recognition of right-of-use assets and corresponding

liabilities in respect of its operating lease arrangements. These assets and liabilities are currently not required to be

recognised but certain relevant information is disclosed in Note 22(a) below.

As set out in Note 22(a) below, the total future minimum lease payments under non-cancellable operating

leases of the Group in respect of office and shop premises as at 30 April 2017 amounted to approximately

RMB26,366,000. The directors of the Company do not expect the adoption of HKFRS 16 as compared with the

current accounting policy would result in significant impact on the Group’s financial performance but it is expected

that the Group has to separately recognise the interest expense on the lease liabilities and the depreciation expense

on the right-of-use assets, and that certain portion of the future minimum lease payments under the Group’s

operating leases will be required to be recognised in the Group’s consolidated statement of financial position as

right-of-use assets and lease liabilities. The Group will also be required to remeasure the lease liabilities upon the

occurrence of certain events (e.g. a change in the lease term) and recognise the amount of the remeasurement of the

lease liabilities as an adjustment to the right-of-use assets. In addition, payments for the principal portion of the

lease liabilities will be presented within financing activities in the Group’s consolidated statement of cash flows.

Except as described above, the Group preliminarily considers that these new or revised HKFRSs would not

have a significant impact on the Group’s financial performance and position.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The Historical Financial Information has been prepared in accordance with the basis of presentation set out

in Note 2 and the significant accounting policies set out below, which conform to HKFRSs which in collective term

includes Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (‘‘HKASs’’) and

Interpretations issued by the HKICPA. The Historical Financial Information also complies with the applicable

disclosure requirements of the Hong Kong Companies Ordinance and the Rules Governing the Listing of Securities

on the GEM of the Stock Exchange.

The HKICPA has issued a number of new or revised HKFRSs which are relevant to the Group and became

effective during the Relevant Periods. All HKFRSs effective for accounting period commencing from 1 January

2017 together with the relevant transactional provisions have been early adopted by the Group in the preparation of

the Historical Financial Information throughout the Relevant Periods.

At the date of this report, certain new or revised HKFRSs have been issued by the HKICPA but are not yet

effective and have not been early adopted by the Group, details of which are set out in Note 3.

The Historical Financial Information has been prepared under the historical cost basis.

The Historical Financial Information is presented in Renminbi (‘‘RMB’’), which is the same as the functional

currency of the Company and its subsidiaries. All values are rounded to the nearest thousand (‘‘RMB’000’’) except

when otherwise indicated.


– I-13 –

It should be noted that accounting estimates and assumptions are used in the preparation of the Historical

Financial Information. Although these estimates are based on management’s best knowledge and judgement of

current events and actions, actual results may ultimately differ from those estimates and assumptions. The areas

involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to

the Historical Financial Information are disclosed in Note 5.

(b) Business combination and basis of consolidation

The Historical Financial Information incorporates the financial statements of the Company and its

subsidiaries comprising the Group for the Relevant Periods. As explained in Note 2 above, the Reorganisation is

accounted for using the predecessor carrying amounts.

Inter-company transactions and balances between group companies together with unrealised profits are

eliminated in full in preparing the Historical Financial Information. Unrealised losses are also eliminated unless the

transaction provides evidence of impairment on the asset transferred, in which case the loss is recognised in profit

or loss.

The results of subsidiaries acquired during the Relevant Periods are included in the consolidated statement of

comprehensive income from the dates of acquisition. Where necessary, adjustments are made to the financial

statements of subsidiaries to bring their accounting policies into line with those used by other members of the

Group.

Acquisition of subsidiaries or businesses is accounted for using the acquisition method. The cost of an

acquisition is measured at the aggregate of the acquisition-date fair value of assets transferred, liabilities incurred

and equity interests issued by the Group, as the acquirer. The identifiable assets acquired and liabilities assumed

are principally measured at acquisition-date fair value. The Group’s previously held equity interest in the acquiree

is re-measured at acquisition-date fair value and the resulting gains or losses are recognised in profit or loss.

Acquisition-related costs incurred are expensed unless they are incurred in issuing equity instruments in which case

the costs are deducted from equity.

(c) Subsidiary

A subsidiary is an investee over which the Company is able to exercise control. The Company controls an

investee if all three of the following elements are present: power over the investee, exposure, or rights to, variable

returns from the investee, and the ability to use its power to affect those variable returns. Control is reassessed

whenever facts and circumstances indicate that there may be a change in any of these elements of control.

(d) Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and any accumulated

impairment losses.

Historical cost of an asset comprises its purchase price and any directly attributable costs of bringing the

asset to its present working condition and location for its intended use. Expenditure incurred after the asset has

been put into operation, such as repairs and maintenance and overhaul costs, is charged to profit or loss in the

period in which it is incurred. In situations where it is probable that future economic benefits of the expenditure

will flow to the entity, and the cost of which can be measured reliably, the expenditure is capitalised as an

additional cost of the asset or a separate asset.


– I-14 –

Depreciation is charged so as to write off the cost of items of property, plant and equipment over their

estimated useful lives and after taking into account their estimated residual value, using the straight-line method.

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting

period, with the effect of any changes in estimate accounted for on a prospective basis. The principal annual rates

are as follows:

Furniture, fixtures and equipment 20% to 33%

Motor vehicles 25%

Computer equipment and software 20% to 33%

Leasehold improvements Annual rates as determined by shorter of expected useful lives of 5

years and the unexpired period of the leases

An asset is written down immediately to its recoverable amount if its carrying amount is higher than the

asset’s estimated recoverable amount.

The gain or loss on disposal of an item of property, plant and equipment is the difference between the net

sale proceeds and its carrying amount, and is recognised in profit or loss on disposal.

(e) Impairment of non-financial assets

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and

equipment to determine whether there is any indication that those assets have suffered an impairment loss or an

impairment loss previously recognised no longer exists or may have decreased. If any such indication exists, the

recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where

it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable

amount of the cash-generating unit (‘‘CGU’’) to which the asset belongs. Recoverable amount is the higher of fair

value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are

discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time

value of money and the risks specific to the asset for which the estimates of future cash flows have not been

adjusted.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying

amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised immediately

in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or CGU) is increased to

the revised estimate of its recoverable amount to the extent that the increased carrying amount does not exceed the

carrying amount that would have been determined had no impairment loss been recognised for the asset (or CGU)

in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

(f) Financial instruments

(i) Financial assets

The Group classifies its financial assets at initial recognition, depending on the purpose for which the

asset was acquired. Financial assets are initially measured at fair value plus transaction costs that are directly

attributable to the acquisition of the financial assets. Regular way purchases or sales of financial assets are

recognised and derecognised on a trade date basis. A regular way purchase or sale is a purchase or sale of a

financial asset under a contract whose terms require delivery of the asset within the time frame established

generally by regulation or convention in the marketplace concerned.

The Group’s financial assets are loans and receivables. These assets are non-derivative financial assets

with fixed or determinable payments that are not quoted in an active market. They arise principally through

the provision of services to customers, and also incorporate other types of contractual monetary asset. They


– I-15 –

are initially measured at fair value plus transaction costs that are directly attributable to the acquisition of the

financial assets. Subsequent to initial recognition, they are carried at amortised cost using the effective

interest method, less any identified impairment losses.

(ii) Impairment loss on financial assets

The Group assesses, at the end of each reporting period, whether there is any objective evidence that

financial asset is impaired. Financial asset is impaired if there is objective evidence of impairment as a result

of one or more events that has occurred after the initial recognition of the asset and that event has an impact

on the estimated future cash flows of the financial asset that can be reliably estimated. Evidence of

impairment may include:

— significant financial difficulty of the debtors;

— a breach of contract, such as a default or delinquency in interest or principal payments;

— granting concession to a debtor because of debtor’s financial difficulty; and

— it becoming probable that the debtor will enter bankruptcy or other financial reorganisation.

An impairment loss is recognised in profit or loss when there is objective evidence that the asset is

impaired, and is measured as the difference between the asset’s carrying amount and the present value of the

estimated future cash flows discounted at the original effective interest rate. The carrying amount of financial

asset is reduced through the use of an allowance account. When any part of financial asset is determined as

uncollectible, it is written off against the allowance account for the relevant financial asset.

Impairment losses are reversed in subsequent periods when an increase in the asset’s recoverable

amount can be related objectively to an event occurring after the impairment was recognised, subject to a

restriction that the carrying amount of the asset at the date the impairment is reversed does not exceed what

the amortised cost would have been had the impairment not been recognised.

(iii) Financial liabilities

The Group classifies its financial liabilities depending on the purpose for which the liabilities were

incurred.

Financial liabilities at amortised cost are initially recognised at fair value, net of directly attributable

costs incurred, and are subsequently measured at amortised cost, using effective interest method. The related

interest expense is recognised in profit or loss.

Gains or losses are recognised in profit or loss when the liabilities are derecognised as well as through

the amortisation process.

(iv) Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset or

financial liability and of allocating interest income or interest expense over the relevant period. The effective

interest rate is the rate that exactly discounts estimated future cash receipts or payments through the expected

life of the financial asset or liability, or where appropriate, a shorter period.

(v) Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue

costs.


– I-16 –

(vi) Derecognition

The Group derecognises a financial asset when the contractual rights to the future cash flows in

relation to the financial asset expire or when the financial asset has been transferred and the transfer meets

the criteria for derecognition in accordance with HKAS 39.

Financial liabilities are derecognised when the obligation specified in the relevant contract is

discharged, cancelled or expires.

(g) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and deposits held at call with banks, and other short-term

highly liquid investments with original maturities of three months or less that are readily convertible into a known

amount of cash and which are subject to an insignificant risk of changes in value.

(h) Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and

rewards of ownership of the assets concerned to the lessees. All other leases are classified as operating leases.

The Group as lessee

The total rentals payable under the operating leases are recognised in profit or loss on a straight-line

basis over the lease term. Lease incentives received are recognised as an integrated part of the total rental

expense, over the term of the lease.

(i) Provisions and contingent liabilities

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past

event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable

estimate can be made.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be

estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of

economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or

non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of

outflow of economic benefits is remote.

(j) Taxation

Income tax represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year/period. Taxable profit differs from profit as

reported in the consolidated statements of comprehensive income because it excludes items of income or expense

that are taxable or deductible in other years respectively and it further excludes items that are never taxable or

deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively

enacted by the end of reporting period.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and

liabilities for financial reporting purposes and the corresponding amounts used for tax purposes. Except for

recognised assets and liabilities that affect neither accounting nor taxable profits, deferred tax liabilities are

recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable

that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is

measured at the tax rates appropriate to the expected manner in which the carrying amount of the asset or liability

is realised or settled and that have been enacted or substantively enacted at the end of reporting period.


– I-17 –

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax

assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and

the Group intends to settle its current tax assets and liabilities on a net basis.

(k) Translation of foreign currencies

Transactions entered into by group entities in currencies other than the currency of the primary economic

environment in which they operate (the ‘‘functional currency’’) are recorded at the rates ruling when the

transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the end of

reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are not

retranslated.

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items,

are recognised in profit or loss in the period in which they arise.

(l) Employee benefits

(i) Short-term benefits

Short-term employee benefits are employee benefits (other than termination benefits) that are expected

to be settled wholly before twelve months after the end of the annual reporting period in which the

employees render the related service. Short-term employee benefits are recognised in the year/period when

the employees rendered the related service.

(ii) Retirement benefit scheme

The Group’s contributions to the defined contribution retirement scheme are expensed as incurred and

are reduced by contributions forfeited by those employees who leave the scheme prior to vesting fully in the

contributions, if any.

(iii) Termination benefits

Termination benefits are recognised on the earlier of when the Group can no longer withdraw the offer

of those benefits and when the Group recognises restructuring costs involving the payment of termination

benefits.

(m) Related parties

(a) A person or a close member of that person’s family is related to the Group if that person:

(i) has control or joint control over the Group;

(ii) has significant influence over the Group; or

(iii) is a member of key management personnel of the Group or the Company’s parent.

(b) An entity is related to the Group if any of the following conditions apply:

(i) The entity and the Group are members of the same group (which means that each parent,

subsidiary and fellow subsidiary is related to the others).

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of

a member of a group of which the other entity is a member).

(iii) Both entities are joint ventures of the same third party.


– I-18 –

(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third

entity.

(v) The entity is a post-employment benefit plan for the benefit of the employees of the Group or

an entity related to the Group.

(vi) The entity is controlled or jointly controlled by a person identified in (a).

(vii) A person identified in (a)(i) has significant influence over the entity or is a member of key

management personnel of the entity (or of a parent of the entity).

(viii) The entity, or any member of a group of which it is a part, provides key management personnel

services to the Group or to the Group’s parents.

Close members of the family of a person are those family members who may be expected to influence, or be

influenced by, that person in their dealings with the entity and include:

(i) that person’s children and spouse or domestic partner;

(ii) children of that person’s spouse or domestic partner; and

(iii) dependents of that person or that person’s spouse or domestic partner.

(n) Revenue recognition

Revenue comprises the fair value for rendering of services. Provided it is probable that the economic benefits

will flow to the Group and the revenue and costs, if applicable, can be measured reliably, revenue is recognised as

follows:

(i) Real estate agency service fee is recognised when a buyer and seller execute a legally binding sale

agreement and when the relevant agreement becomes unconditional and irrevocable.

(ii) Property research and consultancy service fee and integrated services income are recognised when the

services are rendered.

(iii) Interest income is recognised on a time-proportion basis using the effective interest method.

5. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, the directors are required to make judgement, estimates and

assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The

estimates and associated assumptions are based on historical experience and other factors that are considered to be

relevant. Actual results differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are

recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the

revision and future periods if the revision affects both current and future periods.


– I-19 –

The judgements in applying the Group’s accounting policies, and estimates and assumptions that have a significantrisk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year arediscussed below.

(i) Impairment of trade receivables

The Group makes allowance for impairment of trade receivables, if any, based on an estimate of therecoverability of these receivables. Allowances are applied to trade receivables where events of changes incircumstances indicate that the balances may not be collectible. The identification of impairment of tradereceivables requires the use of judgement and estimates. Where the expectation is different from the originalestimates, such difference will impact carrying value of receivables and allowance for impairment losses in theperiod in which such estimate had been changed.

(ii) Deferred tax liabilities

Deferred tax liabilities have been accrued at a tax rate of 10% on the undistributed earnings of a subsidiaryof the Company in the PRC after taking into consideration of the historical dividend records of the relevantsubsidiary of the Company, details of which are set out in Note 12(b).

The dividend policy of the relevant subsidiary is subject to the financial and market conditions, theavailability of funding and reserves available for distribution of relevant subsidiary. If the dividend policy of therelevant subsidiary of the Company has changed, the deferred tax in relation to withholding tax of undistributedearnings would be changed accordingly.

6. SEGMENT REPORTING

The executive directors of the Company, who are the chief operating decision-makers of the Group, review theGroup’s internal reporting in order to assess performance and allocate resources. Management has determined theoperating segments based on reports reviewed by the executive directors of the Company that are used to make strategicdecisions.

Management regularly reviews the financial information of the Group as a whole as reported under HKFRSs. Thereportable operating segments derive their revenue primarily from provision of real estate agency services. Businesssegment information is not considered necessary.

As the executive directors consider the Group’s revenue and results are all derived from provision of services in thePRC and no significant consolidated assets of the Group are located outside the PRC, geographical segment information isnot considered necessary.

Information about major customers

During each of the Relevant Periods, revenue from the following customer with whom transactions haveexceeded 10% of the Group’s revenue, is as follows:


30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(Unaudited)

Fineland Real Estate Holdings CompanyLimited (‘‘Fineland Real Estate’’) and itssubsidiaries (collectively the ‘‘FinelandGroup’’) 52,466 44,632 19,807 22,259


– I-20 –

7. REVENUE


30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(Unaudited)

Real estate agency service fee 85,606 93,799 32,876 38,613

Property research and consultancy service fee 3,133 3,193 273 318

Integrated services income 1,320 9,353 399 4,340

90,059 106,345 33,548 43,271

8. OTHER INCOME AND GAINS


30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(Unaudited)

Interest income 121 533 295 34

Gain on disposal of property, plant and equipment — — — 96

Gain on bargain purchase (Note 21) — 32 — —

121 565 295 130

9. PROFIT BEFORE INCOME TAX

This is arrived at after charging/(crediting):


30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(Unaudited)

Auditor’s remuneration 33 53 8 9

Loss/(gain) on disposal of property, plant and

equipment 42 3 3 (96)

Impairment loss on trade receivables 19 369 369 5


– I-21 –

10. EMPLOYEE BENEFIT EXPENSES

Employee benefit expenses (including directors’ remuneration (Note 11)) comprise:


30 April

2015 2016 2016 2017

RMB’000 RMB$’000 RMB’000 RMB’000

(Unaudited)


Contributions and charges to retirement

benefits scheme 4,155 5,125 1,479 3,473

59,059 70,186 19,913 27,482

11. DIRECTORS’ REMUNERATION AND FIVE HIGHEST PAID EMPLOYEES

Directors’ remuneration

The directors’ remuneration is analysed as follows:


30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(Unaudited)

Directors’ fee — — — —

Other emoluments:

Salaries, allowances and other benefits 840 877 47 403

Discretionary bonuses 500 461 — —

Contributions to retirement benefits scheme — 114 10 54

1,340 1,452 57 457


– I-22 –

Details of executive directors’ remuneration are as follows:


30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(Unaudited)

Rong Haiming

Salaries, allowances and other benefits — 452 — 221

Discretionary bonuses — 54 — —

Contributions to retirement benefits

scheme — 54 — 27

— 560 — 248

Yi Ruofeng

Salaries, allowances and other benefits — 417 47 182

Discretionary bonuses — 407 — —

Contributions to retirement benefits

scheme — 60 10 27

— 884 57 209

Ms. Tse Lai Wa (‘‘Ms. Tse’’)

Salaries, allowances and other benefits 840 8 — —

Discretionary bonuses 500 — — —

1,340 8 — —

No remuneration was paid or payable to the non-executive director and independent non-executive directors

during the Relevant Periods.

During the Relevant Periods, no remuneration was paid by the Group to the directors as an inducement to

join or upon joining the Group or as compensation for loss of office. In addition, none of the directors waived or

agreed to waive any remuneration during the Relevant Periods.

The discretionary bonuses are determined by reference to the financial performance of the Group and the

performance of the individual director in each of the Relevant Periods.


– I-23 –

Five highest paid employees

Of the five individuals with the highest emoluments in the Group, one was a director of the Company during

each of the two years ended 31 December 2015 and 2016, whose emoluments are included in the analysis presented

above. The five individuals with the highest emoluments in the Group were not directors of the Company for the

four months ended 30 April 2016 and 2017. The emoluments of the non-director, highest paid individuals for each

of the Relevant Periods, are as follows:


30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(Unaudited)


Contributions to retirement benefits scheme 64 63 37 47

3,108 3,996 1,059 1,194

The number of non-director, highest paid individuals whose emoluments fell within the following bands:


30 April

2015 2016 2016 2017

(Unaudited)

Nil to HK$1,000,000 3 — 5 5

HK$1,000,001 to HK$1,500,000 1 4 — —

4 4 5 5

12. INCOME TAX

(a) The amounts of income tax in the consolidated statements of comprehensive income represent:


30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(Unaudited)

Current tax — PRC Enterprise Income Tax

(‘‘EIT’’)

— provision for the year/period 4,680 5,225 2,514 2,280

— over-provision in respect of prior year — — — (29)

4,680 5,225 2,514 2,251

Deferred tax (Note 12(b)) 1,432 338 777 697

6,112 5,563 3,291 2,948


– I-24 –

(i) No Hong Kong profits tax has been provided as the Group has no estimated assessable profits arising

in Hong Kong for each of the Relevant Periods.

(ii) Provision for the PRC EIT is calculated at a statutory tax rate of 25% of the estimated assessable

profit as determined in accordance with the relevant EIT law in the PRC.

Income tax for each of the Relevant Periods can be reconciled to profit before income tax per the

consolidated statements of comprehensive income as follows:


30 April

2015 2016 2016 2017

RMB’000 RMB$’000 RMB’000 RMB’000

(Unaudited)

Profit before income tax 19,005 20,890 10,283 2,270

Taxation calculated at PRC EIT rate of 25% 4,751 5,223 2,571 568

Effect of different tax rates of subsidiaries

operating in other jurisdiction — — — 597

Non-taxable income — (8) — —

Expenses not deductible for tax 102 225 8 1,175

Over-provision in respect of prior year — — — (29)

Tax allowances granted to a PRC subsidiary (173) (215) (65) (60)

Deferred tax on undistributed earnings of a

PRC subsidiary 1,432 338 777 697

Income tax for the year/period 6,112 5,563 3,291 2,948

(b) Deferred tax liabilities

The movements in deferred tax liabilities during each of the Relevant Periods are as follows:

Undistributed earningsof a subsidiaryin the PRC

RMB’000

At 1 January 2015 261

Charged to profit or loss for the year 1,432

At 31 December 2015 and 1 January 2016 1,693

Charged to profit or loss for the year 338

At 31 December 2016 and 1 January 2017 2,031

Charged to profit or loss for the period 697

At 30 April 2017 2,728


– I-25 –

Pursuant to the PRC EIT Law, a 10% withholding tax is levied on dividends declared to foreign investors

from the foreign investment enterprises established in the PRC. The requirement is effective from 1 January 2008

and applies to earnings after 31 December 2007. A lower withholding tax rate may be applied if there is a tax

treaty between the PRC and the jurisdiction of the foreign investors. For the Group, the applicable rate is 10% for

the unremitted earnings of a PRC subsidiary. The Group is therefore liable for withholding taxes on dividends

distributed by the subsidiary established in the PRC in respect of earnings generated from 1 January 2008.

As at 31 December 2015, 31 December 2016 and 30 April 2017, the Group did not have other material

unrecognised deferred tax.

13. DIVIDEND


30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(Unaudited)

Interim dividend — 11,876 — —

No dividend has been paid or declared by the Company since its incorporation. For the purpose of this report, the

interim dividend for the year ended 31 December 2016 represented interim dividend declared by a group entity to its then

equity owners.

The rates of dividend and the number of shares ranking for dividends are not presented as such information is not

meaningful having regard to the purpose of this Historical Financial Information.

14. EARNINGS PER SHARE

No earnings per share information is presented as its inclusion, for the purpose of this report, is not considered

meaningful due to the Reorganisation as set out in Note 2 above.


– I-26 –

15. PROPERTY, PLANT AND EQUIPMENT

Furniture,fixtures andequipment

Motorvehicles

Computerequipment

and softwareLeasehold

improvements Total


COST

As at 1 January 2015 453 1,907 1,381 1,172 4,913Additions — — 41 48 89Disposals — (736) — (18) (754)

As at 31 December 2015 and 1 January2016 453 1,171 1,422 1,202 4,248

Additions 18 — 208 953 1,179Business combination

(Note 21) — — 91 — 91Disposals — (261) — (109) (370)

As at 31 December 2016 and1 January 2017 471 910 1,721 2,046 5,148

Additions — — 76 362 438Disposals — (910) — (105) (1,015)

As at 30 April 2017 471 — 1,797 2,303 4,571

ACCUMULATED DEPRECIATION

As at 1 January 2015 (263) (1,711) (1,165) (718) (3,857)Depreciation for the year (86) (77) (96) (145) (404)Eliminated on disposals — 675 — 1 676

As at 31 December 2015 and1 January 2016 (349) (1,113) (1,261) (862) (3,585)

Depreciation for the year (68) — (141) (184) (393)Eliminated on disposals — 248 — 109 357

As at 31 December 2016 and1 January 2017 (417) (865) (1,402) (937) (3,621)

Depreciation for the period (4) — (54) (105) (163)Eliminated on disposals — 865 — 70 935

As at 30 April 2017 (421) — (1,456) (972) (2,849)

CARRYING AMOUNTS

As at 31 December 2015 104 58 161 340 663

As at 31 December 2016 54 45 319 1,109 1,527

As at 30 April 2017 50 — 341 1,331 1,722


– I-27 –

16. TRADE RECEIVABLES


30 April20172015 2016

RMB’000 RMB’000 RMB’000

Trade receivables 5,865 11,075 7,973

Less: Impairment losses (902) (1,271) (1,276)

4,963 9,804 6,697

Trade receivables mainly represent real estate agency service fee receivables from customers whereby no general

credit terms are granted. The customers are obliged to settle the amounts due upon completion of or pursuant to the terms

and conditions of the relevant agreements. The aging analysis of trade receivables (net of impairment loss) based on

invoice date (which is also the due date) as of the end of each of the Relevant Periods is as follows:


30 April20172015 2016

RMB’000 RMB’000 RMB’000

Within 3 months 4,209 8,275 5,946

4 to 6 months 369 729 749

7 to 12 months 325 800 2

Over 1 year 60 — —

4,963 9,804 6,697

The directors of the Company consider that the carrying amount of trade receivables approximates their fair values.

No interest is charged on trade receivables.

In determining the recoverability of the trade receivables, the Group monitors any change in the credit quality of

the trade receivables.

Trade receivables that were past due but not impaired relate to a number of independent customers that have a good

track record with the Group. Based on past experience, management believes that no impairment allowance is necessary in

respect of these balances as there has not been a significant change in credit quality and the balances are still considered

fully recoverable. The Group does not hold any collateral over these balances.

The movement in impairment loss on trade receivables during the year/period is as follows:


30 April20172015 2016

RMB’000 RMB’000 RMB’000

At beginning of the year/period (883) (902) (1,271)

Impairment loss recognised (19) (369) (5)

At end of the year/period (902) (1,271) (1,276)


– I-28 –

17. AMOUNTS DUE WITH FELLOW SUBSIDIARIES

Except for an amount of RMB20,000,000 due from a fellow subsidiary as at 31 December 2015 which is unsecured,

interest-free and repayable on demand, amounts due from fellow subsidiaries as at 31 December 2015, 31 December 2016

and 30 April 2017 are trade in nature, unsecured and interest-free and the fellow subsidiaries are obliged to settle the

amounts due upon completion of or pursuant to the terms and conditions of the relevant agreements.

The amounts due to fellow subsidiaries are non-trade in nature as at 31 December 2015 and 2016, and are

unsecured, interest-free and repayable on demand.

18. BANK BALANCES AND CASH

As at 31 December 2015, 31 December 2016 and 30 April 2017, bank balances carry interest at prevailing deposit

rates.

As at 31 December 2015, 31 December 2016 and 30 April 2017, included in the Group’s bank balances is an

amount of approximately RMB27,190,000, RMB58,145,000 and RMB54,673,000 respectively, which are deposits with

banks in the PRC and denominated in RMB, and RMB is not a freely convertible currency.

19. TRADE PAYABLES

The amount mainly represented the commissions payable to co-operative real estate agents. The ageing analysis of

trade payables based on invoice date as of the end of each of the Relevant Periods is as follows:


30 April20172015 2016

RMB’000 RMB’000 RMB’000

Within 3 months — 3,169 1,073

The directors of the Company consider that the carrying amounts of trade payables approximate their fair values as

at the end of each of the Relevant Periods.

20. SHARE CAPITAL AND RESERVES

(a) Share capital

The Company was incorporated as an exempted company in the Cayman Islands with limited liability on 16

February 2017 with an authorised share capital of HK$380,000 divided into 38,000,000 ordinary shares of par value

HK$0.01 each. As at 30 April 2017, 200 ordinary shares of HK$2 were issued and fully paid. Further details of the

Company’s share capital are set out in the section headed ‘‘Statutory and General Information’’ in Appendix IV to

the Prospectus.


– I-29 –

(b) Reserves

The Company

Sharepremium

RMB’000

At the date of incorporation —

Issue of shares pursuant to the Reorganisation 922

As at 30 April 2017 922

21. BUSINESS COMBINATION

In May 2016, the Group acquired 100% equity interest in Fang Yuan Bao for a total consideration of

RMB1,000,000 in cash. Fang Yuan Bao is engaged in the provision of online property referral and agency services in the

PRC. The acquisition of Fang Yuan Bao was made by the Group with the aim of expanding the Group’s business.

Details of the fair value of identifiable assets and liabilities and contingent liabilities, acquisition consideration and

gain on bargain purchase from business combination at the date of acquisition are as follows:

Notes RMB’000

Property, plant and equipment 15 91

Trade receivables (Note (ii)) 77

Deposits, prepayments and other receivables 3

Bank balances and cash 1,382

Trade payables (72)

Accruals and other payables (449)

1,032

Gain on bargain purchase 8 (32)

Total consideration 1,000

Satisfied by:

Cash consideration 1,000

Analysis of cash flows on business combination:Cash paid (1,000)

Net cash acquired 1,382

Net cash inflow on business combination 382

Notes:

(i) The acquisition costs of approximately RMB1,000 were expensed and included in other operating expenses in

the consolidated statement of comprehensive income for the year ended 31 December 2016.

(ii) The fair value of trade receivables amounted to RMB77,000, which was the same as the gross amount of

trade receivables as no trade receivables were expected to be uncollectible.


– I-30 –

(iii) The former equity owners of Fang Yuan Bao were willing to accept the acquisition consideration which was

slightly less than the fair value of Fang Yuan Bao’s net assets due to lack of stable track records of business

as Fang Yuan Bao only operated for a short period after its establishment, resulting in a gain on bargain

purchase from business combination.

(iv) Since the acquisition date, Fang Yuan Bao has contributed RMB7,441,000 and a profit of RMB141,000 to

the Group’s revenue and net profit respectively for the year ended 31 December 2016.

(v) Had the acquisition occurred on 1 January 2016, the Group’s revenue and profit for the year ended 31

December 2016 would have been RMB110,332,000 and RMB15,253,000 respectively.

22. COMMITMENTS AND CONTINGENT LIABILITIES

(a) Operating lease commitments

As at the end of each of the Relevant Periods, the Group had future aggregate minimum lease payments

under non-cancellable operating leases in respect of office and shop premises as follows:


30 April20172015 2016

RMB’000 RMB’000 RMB’000

Not later than one year 2,283 4,197 7,891

Later than one year and not later than five years 4,719 9,794 18,475

7,002 13,991 26,366

Leases for the Group’s office and shop premises are negotiated for range of two to five years at fixed rental.

(b) Capital commitment


30 April20172015 2016

RMB’000 RMB’000 RMB’000

Capital expenditure, contracted for but not provided for,

in respect of:

Acquisition of property, plant and equipment — — 1,050

(c) Contingent liability

At the end of each of the Relevant Periods, the Group did not have any significant contingent liability.


– I-31 –

23. RELATED PARTY TRANSACTIONS

(a) In addition to the transactions detailed elsewhere in the Historical Financial Information, the Group entered

into the following transactions with related parties:


30 April

2015 2016 2016 2017

RMB’000 RMB’000 RMB’000 RMB’000

(Unaudited)

Real estate agency service fee from fellow

subsidiaries 51,205 41,099 19,807 21,792

Property research and consultancy service

fee from fellow subsidiaries 1,147 528 — —

Integrated services income from fellow

subsidiaries 114 3,005 — 467

Operating lease charges to a fellow

subsidiary 1,545 1,560 509 531

Operating lease charges to a director 237 247 85 106

Operating lease charges to a related party

(Note) 217 223 77 95

Management fee to a fellow subsidiary 349 — — —

Consultancy fee to a fellow subsidiary 245 314 — 89

The above transactions were conducted on mutually agreed terms.

Note: The related party is a daughter of Ms. Tse, a director of the Company.

(b) As at the end of each of the Relevant Periods, the Group had future aggregate minimum lease payments to a

fellow subsidiary, a director, and a related party under non-cancellable operating leases in respect of office

and shop premises as follows:


30 April20172015 2016

RMB’000 RMB’000 RMB’000

Not later than one year 462 491 1,567

Later than one year and not later than five years 2,140 1,649 1,465

2,602 2,140 3,032

(c) In May 2016, the Group has acquired 30% and 70% equity interests of Fang Yuan Bao from Ms. Tse, a

director of the Company, and an independent third party corporate respectively, at a total consideration of

RMB1,000,000. Further details of the acquisition were set out in Note 21.

(d) On 1 March 2012, the Group and Fineland Real Estate, an intermediate holding company of the Company,

entered into two trademark license agreements (the ‘‘PRC Trademark License Agreements’’), pursuant to

which Fineland Real Estate agreed to grant to the Group non-exclusive licenses to use certain trademark

registered by Fineland Real Estate in the PRC (the ‘‘PRC Licensed Trademarks’’) at nil consideration. The

term of each of the PRC Trademark License Agreements commenced on the date thereof until the expiration

date of the PRC Licensed Trademarks.


– I-32 –

On 11 October 2017, Fineland Real Estate and the Group entered into trademark license agreements (the

‘‘Trademark License Agreements’’), pursuant to which Fineland Real Estate agreed to grant to the Group an

exclusive license to use certain trademarks registered by Fineland Real Estate (‘‘Licensed Trademarks’’) in

Hong Kong and the PRC at nil consideration. The term of the Trademark License Agreements commences on

the date thereof until the expiration date of the Licensed Trademarks.

(e) Compensation of key management personnel

Remuneration of key management personnel, who are executive directors of the Company, during the

Relevant Periods is disclosed in Note 11.

24. CAPITAL MANAGEMENT

The Group’s objective of managing capital is to safeguard the Group’s ability to continue as a going concern in

order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to

reduce cost of capital.

The Group actively and regularly reviews and manages its capital structure to maintain a balance between the

higher shareholders’ returns that might be possible with higher levels of borrowings and the advantages and security

afforded by a sound capital position, and makes adjustments to the capital structure in light of changes in economic

conditions.

As consistent with industry practice, the Group monitors its capital structure on the basis of the gearing ratio. This

ratio is calculated as total liabilities divided by total assets.

The gearing ratio as at the end of each reporting period was as follows:


30 April20172015 2016

RMB’000 RMB’000 RMB’000

Total liabilities 45,548 51,852 51,562

Total assets 72,509 82,264 81,296

Gearing ratio 63% 63% 63%

25. FINANCIAL RISK MANAGEMENT

The main risks arising from the Group’s financial instruments in the normal course of the Group’s business are

credit risk, liquidity risk and currency risk.

(a) Credit risk

The Group’s credit risk is primarily attributable to its trade receivables and amounts due from fellow

subsidiaries which are trade in nature . Management has a credit policy in place and the exposures to these credit

risks are monitored on an ongoing basis.

In respect of trade receivables and amounts due from fellow subsidiaries which are trade in nature, individual

credit evaluations are performed on all customers requiring credit over a certain amount. These evaluations focus

on the customers’ past history of making payments when due and current ability to pay, and take into account


– I-33 –

information specific to the customers as well as pertaining to the economic environment in which the customers

operate. Ongoing credit evaluation is performed on the financial condition of customers. Normally, the Group does

not obtain collateral from customers.

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.

The default risk of the industry in which customers operate also has an influence on credit risk but to a lesser

extent. As at 31 December 2015, 31 December 2016 and 30 April 2017, the Group has concentration of credit risk

on amounts due from fellow subsidiaries as the debtors were group entities under the Fineland Group.

The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the

consolidated statements of financial position after deducting any impairment allowance. The Group does not

provide any other guarantee which would expose the Group to credit risk.

Further quantitative disclosures in respect of the Group’s exposure to credit risk arising from trade

receivables are set out in Note 16.

(b) Liquidity risk

The Group’s policy is to regularly monitor current and expected liquidity requirements to ensure that it

maintains sufficient reserves of cash to meet its liquidity requirements in the short and longer term. The Group

maintains a reasonable level of cash and cash equivalents. The Group finances its working capital requirements

mainly through funds generated from operations.

The Group’s financial liabilities comprise trade payables, accruals and other payables, dividend payable and

amounts due to fellow subsidiaries maturing in less than one year and their contractual undiscounted payments

approximate their carrying amounts as shown in the consolidated statements of financial position.

(c) Currency risk

Currency risk to the Group is minimal as most of the Group’s transactions are carried out in the respective

functional currencies of the group entities.

(d) Fair value estimation

All financial instruments are carried at amounts not materially different from their fair values at 31

December 2015, 31 December 2016 and 30 April 2017.

26. SUMMARY OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES BY CATEGORY

The carrying amounts of the Group’s financial assets and financial liabilities as recognised as at 31 December 2015,

31 December 2016 and 30 April 2017 may be categorised as follows:


30 April20172015 2016

RMB’000 RMB’000 RMB’000

Financial assets:Loans and receivables (including bank balances and cash)

measured at amortised cost 71,816 79,180 75,358

Financial liabilities:Financial liabilities measured at amortised cost 37,477 43,106 35,083


– I-34 –

27. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES

Dividendpayable

Amounts dueto fellow

subsidiaries

Totalliabilitiesfrom

financingactivities

RMB’000 RMB’000 RMB’000

As at 1 January 2015 16,385 — 16,385

Cash flows — 5,983 5,983

As at 31 December 2015 and 1 January 2016 16,385 5,983 22,368

Cash flows (13,624) (1,504) (15,128)

Non-cash changes

— Dividend declared (Note 13) 11,876 — 11,876

As at 31 December 2016 and 1 January 2017 14,637 4,479 19,116

Cash flows — (4,479) (4,479)

As at 30 April 2017 14,637 — 14,637

As at 1 January 2016 16,385 5,983 22,368

Cash flows (unaudited) — (1,312) (1,312)

As at 30 April 2016 (unaudited) 16,385 4,671 21,056

28. RETIREMENT BENEFIT SCHEME

The employees of the Group in the PRC are members of state-managed retirement benefit schemes operated by the

local governments in the PRC. The Group is required to contribute a specified percentage of the qualifying payroll costs

to the retirement benefit schemes to fund the benefits. The only obligation of the Group with respect to the retirement

benefit schemes is to make the specified contributions.

29. SIGNIFICANT EVENTS AFTER END OF REPORTING PERIOD

Pursuant to the written resolution of the shareholders of the Company on 23 October 2017 as detailed in the

subsection headed ‘‘Written resolutions of our Shareholders passed on 23 October 2017’’ in the section headed ‘‘Statutory

and General Information’’ in the Prospectus, the authorised share capital of the Company has been increased from

HK$380,000 to HK$100,000,000 by the creation of additional 9,962,000,000 shares of HK$0.01 each.

30. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Company and its subsidiaries in respect of any period

subsequent to 30 April 2017.


– I-35 –

The information set forth in this appendix does not form part of the Accountant’s Reportprepared by BDO Limited, Certified Public Accountants, Hong Kong, the reporting accountant ofthe Company, as set forth in Appendix 1 to this prospectus, and is included herein for illustrativepurpose only. The unaudited pro forma financial information should be read in conjunction withthe section headed ‘‘Financial Information’’ in this prospectus and the Accountant’s Report setforth in Appendix I to this prospectus.

(A) UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NETTANGIBLE ASSETS OF THE GROUP

The following unaudited pro forma statement of adjusted consolidated net tangible assets ofthe Group prepared in accordance with paragraph 7.31 of the GEM Rules and AccountingGuideline 7 ‘‘Preparation of Pro Forma Financial Information for Inclusion in InvestmentCirculars’’ issued by the Hong Kong Institute of Certified Public Accountants is for illustrativepurpose only, and is set out herein to provide the prospective investors with further illustrativefinancial information about how the Share Offer might have affected the consolidated net tangibleassets of the Group attributable to owners of the Company after the completion of the Share Offeras if the Share Offer had taken place on 30 April 2017. Because of its hypothetical nature, thisunaudited pro forma statement of adjusted consolidated net tangible assets of the Group may notgive a true picture of the financial position of the Group had the Share Offer been completed on30 April 2017 or at any future dates.

Consolidated

net tangible

assets of the

Group

attributable

to owners of

the Company

as at

30 April 2017

Estimated net

proceeds from

the Share

Offer

Unaudited

pro forma

adjusted

consolidated

net tangible

assets of the

Group

attributable

to owners of

the Company

Unaudited

pro forma

adjusted

consolidated

net tangible

assets per

Share

Unaudited

pro forma

adjusted

consolidated

net tangible

assets per

Share

RMB’000 RMB’000 RMB’000 RMB HK$

(Note 1) (Note 2) (Note 3) (Note 4)

Based on Offer Price of HK$0.55

per Offer Share 29,734 28,282 58,016 0.15 0.16

Based on Offer Price of HK$0.80

per Offer Share 29,734 49,652 79,386 0.20 0.22

Notes:

1. The consolidated net tangible assets of the Group attributable to owners of the Company as at 30 April 2017

are based on the consolidated net assets of the Group attributable to owners of the Company as at 30 April

2017 of RMB29,734,000 as shown in the Accountant’s Report set out in Appendix I to this prospectus.

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

– II-1 –

2. The estimated net proceeds from the Share Offer are based on 100,000,000 Offer Shares and the Offer Price

of lower limit and upper limit of HK$0.55 and HK$0.80 per Offer Share, respectively, after deduction of the

underwriting fees and related expenses payable and borne by the Company which have not been reflected in

consolidated net tangible assets of the Group as at 30 April 2017. No account has been taken of any Share

which may be issued upon the exercise of any option that may be granted under the Share Option Scheme.

The estimated net proceeds from the Share Offer are converted from Hong Kong dollars to Renminbi

(‘‘RMB’’) at an exchange rate of HK$1.00 to RMB0.8858.

3. The unaudited pro forma adjusted consolidated net tangible assets per Share is calculated based on

400,000,000 Shares in issue immediately following the completion of the Share Offer and the Capitalisation

Issue, without taking into account of any Share which may be issued pursuant to the exercise of any option

that may be granted under the Share Option Scheme or any Share which may be allotted and issued or

repurchased by the Company pursuant to the general mandates for the allotment and issue or repurchases of

Shares referred to in Appendix IV to this prospectus.

4. The unaudited pro forma adjusted consolidated net tangible assets per Share amount is converted to Hong

Kong dollars at an exchange rate of HK$1.00 to RMB0.8858. No representation is made that the RMB

amounts have been, could have been or may be converted to Hong Kong dollars, or vice versa, at that date.

5. No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of the

Group attributable to owners of the Company to reflect any trading results or other transactions of the Group

entered into subsequent to 30 April 2017.

6. The settlement of dividend payable amounting to approximately RMB14,637,000 included in the consolidated

net tangible assets of the Group as at 30 April 2017 has no impact on the unaudited pro forma adjusted

consolidated net tangible assets of the Group.


– II-2 –

(B) REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is the text of a report, prepared for inclusion in this prospectus, received fromthe reporting accountant of the Company, BDO Limited, Certified Public Accountants, Hong Kong,in relation to the Group’s unaudited pro forma financial information.

INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THECOMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION

To the directors of Fineland Real Estate Services Group Limited (formerly known as FinelandAssets Management Holdings Group Limited)

We have completed our assurance engagement to report on the compilation of unaudited proforma financial information of Fineland Real Estate Services Group Limited (formerly known asFineland Assets Management Holdings Group Limited) (the ‘‘Company’’) and its subsidiaries(hereinafter collectively referred to as the ‘‘Group’’) by the directors of the Company forillustrative purposes only. The unaudited pro forma financial information consists of the unauditedpro forma statement of adjusted consolidated net tangible assets of the Group as at 30 April 2017and related notes as set out in Section (A) of Appendix II to the Company’s prospectus dated 31October 2017 (the ‘‘Prospectus’’) in connection with the proposed initial public offering of theshares of the Company on the Growth Enterprise Market of The Stock Exchange of Hong KongLimited (the ‘‘Share Offer’’). The applicable criteria on the basis of which the directors of theCompany have compiled the unaudited pro forma financial information are described in Section(A) of Appendix II to the Prospectus.

The unaudited pro forma financial information has been compiled by the directors of theCompany to illustrate the impact of the Share Offer on the Group’s consolidated financial positionas at 30 April 2017 as if the Share Offer had taken place on the same date. As part of this process,information about the Group’s consolidated financial position as at 30 April 2017 has beenextracted by the directors of the Company from the Group’s historical financial information for thefour months ended 30 April 2017, on which an accountant’s report set out in Appendix I to theProspectus has been published.

Directors’ Responsibilities for the Unaudited Pro Forma Financial Information

The directors of the Company are responsible for compiling the unaudited pro forma financialinformation in accordance with paragraph 7.31 of the Rules Governing the Listing of Securities onthe Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the ‘‘GEM Rules’’)and with reference to Accounting Guideline 7 ‘‘Preparation of Pro Forma Financial Information forInclusion in Investment Circulars’’ (‘‘AG 7’’) issued by the Hong Kong Institute of CertifiedPublic Accountants (the ‘‘HKICPA’’).


– II-3 –

Our Independence and Quality Control

We have complied with the independence and other ethical requirements of the ‘‘Code ofEthics for Professional Accountants’’ issued by the HKICPA, which is founded on fundamentalprinciples of integrity, objectivity, professional competence and due care, confidentiality andprofessional behavior.

Our firm applies Hong Kong Standard on Quality Control 1 ‘‘Quality Control for Firms thatPerform Audits and Reviews of Financial Statements, and Other Assurance and Related ServicesEngagements’’ issued by the HKICPA and accordingly maintains a comprehensive system ofquality control including documented policies and procedures regarding compliance with ethicalrequirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountant’s Responsibilities

Our responsibility is to express an opinion, as required by paragraph 7.31(7) of the GEMRules, on the unaudited pro forma financial information and to report our opinion to you. We donot accept any responsibility for any reports previously given by us on any financial informationused in the compilation of the unaudited pro forma financial information beyond that owed tothose to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on AssuranceEngagements 3420 ‘‘Assurance Engagements to Report on the Compilation of Pro Forma FinancialInformation Included in a Prospectus’’ issued by the HKICPA. This standard requires that thereporting accountants plan and perform procedures to obtain reasonable assurance about whetherthe directors of the Company have compiled the unaudited pro forma financial information inaccordance with paragraph 7.31 of the GEM Rules and with reference to AG 7 issued by theHKICPA.

For purposes of this engagement, we are not responsible for updating or reissuing any reportsor opinions on any historical financial information used in compiling the unaudited pro formafinancial information, nor have we, in the course of this engagement, performed an audit or reviewof the financial information used in compiling the unaudited pro forma financial information.

The purpose of unaudited pro forma financial information included in a prospectus is solelyto illustrate the impact of a significant event or transaction on unadjusted financial information ofthe entity as if the event had occurred or the transaction had been undertaken at an earlier dateselected for purposes of the illustration. Accordingly, we do not provide any assurance that theactual outcome of the Share Offer at 30 April 2017 would have been as presented.


– II-4 –

A reasonable assurance engagement to report on whether the unaudited pro forma financialinformation has been properly compiled on the basis of the applicable criteria involves performingprocedures to assess whether the applicable criteria used by the directors in the compilation of theunaudited pro forma financial information provide a reasonable basis for presenting the significanteffects directly attributable to the event or transaction, and to obtain sufficient appropriateevidence about whether:

— The related unaudited pro forma adjustments give appropriate effect to those criteria;and

— The unaudited pro forma financial information reflects the proper application of thoseadjustments to the unadjusted financial information.

The procedures selected depend on the reporting accountant’s judgement, having regard to thereporting accountant’s understanding of the nature of the entity, the event or transaction, in respectof which the unaudited pro forma financial information has been compiled, and other relevantengagement circumstances.

The engagement also involves evaluating the overall presentation of the unaudited pro formafinancial information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Opinion

In our opinion:

(a) the unaudited pro forma financial information has been properly compiled by thedirectors of the Company on the basis stated;

(b) such basis is consistent with the accounting policies of the Group; and

(c) the adjustments are appropriate for the purposes of the unaudited pro forma financialinformation as disclosed pursuant to paragraph 7.31(1) of the GEM Rules.

BDO LimitedCertified Public AccountantsHong Kong

31 October 2017


– II-5 –

SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDSCOMPANY LAW

Set out below is a summary of certain provisions of the Memorandum and Articles ofAssociation of the Company and of certain aspects of Cayman Islands company law.

The Company was incorporated in the Cayman Islands as an exempted company with limitedliability on 16 February 2017 under the Cayman Companies Law. The Company’s constitutionaldocuments consist of its Amended and Restated Memorandum of Association (Memorandum) andits Amended and Restated Articles of Association (Articles).

1. MEMORANDUM OF ASSOCIATION

(a) The Memorandum provides, inter alia, that the liability of members of the Company islimited and that the objects for which the Company is established are unrestricted (andtherefore include acting as an investment company), and that the Company shall haveand be capable of exercising any and all of the powers at any time or from time to timeexercisable by a natural person or body corporate whether as principal, agent, contractoror otherwise and, since the Company is an exempted company, that the Company willnot trade in the Cayman Islands with any person, firm or corporation except infurtherance of the business of the Company carried on outside the Cayman Islands.

(b) By special resolution the Company may alter the Memorandum with respect to anyobjects, powers or other matters specified in it.

2. ARTICLES OF ASSOCIATION

The Articles were adopted on 23 October 2017. A summary of certain provisions of theArticles is set out below.

(a) Shares

(i) Classes of shares

The share capital of the Company consists of ordinary shares.

(ii) Variation of rights of existing shares or classes of shares

Subject to the Cayman Companies Law, if at any time the share capital of theCompany is divided into different classes of shares, all or any of the special rightsattached to any class of shares may (unless otherwise provided for by the terms of issueof the shares of that class) be varied, modified or abrogated either with the consent inwriting of the holders of not less than three-fourths in nominal value of the issuedshares of that class or with the sanction of a special resolution passed at a separategeneral meeting of the holders of the shares of that class. The provisions of the Articlesrelating to general meetings shall mutatis mutandis apply to every such separate generalmeeting, but so that the necessary quorum (other than at an adjourned meeting) shall be

APPENDIX III SUMMARY OF THE CONSTITUTION OF THE COMPANYAND CAYMAN ISLANDS COMPANY LAW

– III-1 –

not less than two persons together holding (or, in the case of a shareholder being acorporation, by its duly authorized representative) or representing by proxy not less thanone-third in nominal value of the issued shares of that class. Every holder of shares ofthe class shall be entitled on a poll to one vote for every such share held by him, andany holder of shares of the class present in person or by proxy may demand a poll.

Any special rights conferred upon the holders of any shares or class of shares shallnot, unless otherwise expressly provided in the rights attaching to the terms of issue ofsuch shares, be deemed to be varied by the creation or issue of further shares rankingpari passu therewith.

(iii) Alteration of capital

The Company may, by an ordinary resolution of its members: (a) increase its sharecapital by the creation of new shares of such amount as it thinks expedient; (b)consolidate or divide all or any of its share capital into shares of larger or smalleramount than its existing shares; (c) divide its unissued shares into several classes andattach to such shares any preferential, deferred, qualified or special rights, privileges orconditions; (d) subdivide its shares or any of them into shares of an amount smaller thanthat fixed by the Memorandum; (e) cancel any shares which, at the date of theresolution, have not been taken or agreed to be taken by any person and diminish theamount of its share capital by the amount of the shares so cancelled; (f) make provisionfor the allotment and issue of shares which do not carry any voting rights; (g) changethe currency of denomination of its share capital; and (h) reduce its share premiumaccount in any manner authorised and subject to any conditions prescribed by law.

(iv) Transfer of shares

Subject to the Cayman Companies Law and the requirements of The StockExchange of Hong Kong Limited (the ‘‘Stock Exchange’’), all transfers of shares shallbe effected by an instrument of transfer in the usual or common form or in such otherform as the Board may approve and may be under hand or, if the transferor or transfereeis a Clearing House or its nominee(s), under hand or by machine imprinted signature, orby such other manner of execution as the Board may approve from time to time.

Execution of the instrument of transfer shall be by or on behalf of the transferorand the transferee, provided that the Board may dispense with the execution of theinstrument of transfer by the transferor or transferee or accept mechanically executedtransfers. The transferor shall be deemed to remain the holder of a share until the nameof the transferee is entered in the register of members of the Company in respect of thatshare.

The Board may, in its absolute discretion, at any time and from time to timeremove any share on the principal register to any branch register or any share on anybranch register to the principal register or any other branch register. Unless the Boardotherwise agrees, no shares on the principal register shall be removed to any branchregister nor shall shares on any branch register be removed to the principal register or


– III-2 –

any other branch register. All removals and other documents of title shall be lodged forregistration and registered, in the case of shares on any branch register, at the relevantregistration office and, in the case of shares on the principal register, at the place atwhich the principal register is located.

The Board may, in its absolute discretion, decline to register a transfer of anyshare (not being a fully paid up share) to a person of whom it does not approve or onwhich the Company has a lien. It may also decline to register a transfer of any shareissued under any share option scheme upon which a restriction on transfer subsists or atransfer of any share to more than four joint holders.

The Board may decline to recognise any instrument of transfer unless a certain fee,up to such maximum sum as the Stock Exchange may determine to be payable, is paidto the Company, the instrument of transfer is properly stamped (if applicable), is inrespect of only one class of share and is lodged at the relevant registration office or theplace at which the principal register is located accompanied by the relevant sharecertificate(s) and such other evidence as the Board may reasonably require is providedto show the right of the transferor to make the transfer (and if the instrument of transferis executed by some other person on his behalf, the authority of that person so to do).

The register of members may, subject to the Listing Rules, be closed at such timeor for such period not exceeding in the whole 30 days in each year as the Board maydetermine.

Fully paid shares shall be free from any restriction on transfer (except whenpermitted by the Stock Exchange) and shall also be free from all liens.

(v) Power of the Company to purchase its own shares

The Company may purchase its own shares subject to certain restrictions and theBoard may only exercise this power on behalf of the Company subject to any applicablerequirement imposed from time to time by the Articles or any, code, rules or regulationsissued from time to time by the Stock Exchange and/or the Securities and FuturesCommission of Hong Kong.

Where the Company purchases for redemption a redeemable Share, purchases notmade through the market or by tender shall be limited to a maximum price and, ifpurchases are by tender, tenders shall be available to all members alike.

(vi) Power of any subsidiary of the Company to own shares in the Company

There are no provisions in the Articles relating to the ownership of shares in theCompany by a subsidiary.


– III-3 –

(vii) Calls on shares and forfeiture of shares

The Board may, from time to time, make such calls as it thinks fit upon themembers in respect of any monies unpaid on the shares held by them respectively(whether on account of the nominal value of the shares or by way of premium) and notby the conditions of allotment of such shares made payable at fixed times. A call maybe made payable either in one sum or by instalments. If the sum payable in respect ofany call or instalment is not paid on or before the day appointed for payment thereof,the person or persons from whom the sum is due shall pay interest on the same at suchrate not exceeding 20% per annum as the Board shall fix from the day appointed forpayment to the time of actual payment, but the Board may waive payment of suchinterest wholly or in part. The Board may, if it thinks fit, receive from any memberwilling to advance the same, either in money or money’s worth, all or any part of themoney uncalled and unpaid or instalments payable upon any shares held by him, and inrespect of all or any of the monies so advanced the Company may pay interest at suchrate (if any) not exceeding 20% per annum as the Board may decide.

If a member fails to pay any call or instalment of a call on the day appointed forpayment, the Board may, for so long as any part of the call or instalment remainsunpaid, serve not less than 14 days’ notice on the member requiring payment of somuch of the call or instalment as is unpaid, together with any interest which may haveaccrued and which may still accrue up to the date of actual payment. The notice shallname a further day (not earlier than the expiration of 14 days from the date of thenotice) on or before which the payment required by the notice is to be made, and shallalso name the place where payment is to be made. The notice shall also state that, in theevent of non-payment at or before the appointed time, the shares in respect of which thecall was made will be liable to be forfeited.

If the requirements of any such notice are not complied with, any share in respectof which the notice has been given may at any time thereafter, before the paymentrequired by the notice has been made, be forfeited by a resolution of the Board to thateffect. Such forfeiture will include all dividends and bonuses declared in respect of theforfeited share and not actually paid before the forfeiture.

A person whose shares have been forfeited shall cease to be a member in respectof the forfeited shares but shall, nevertheless, remain liable to pay to the Company allmonies which, at the date of forfeiture, were payable by him to the Company in respectof the shares together with (if the Board shall in its discretion so require) interestthereon from the date of forfeiture until payment at such rate not exceeding 20% perannum as the Board may prescribe.


– III-4 –

(b) Directors

(i) Appointment, retirement and removal

At any time or from time to time, the Board shall have the power to appoint anyperson as a Director either to fill a casual vacancy on the Board or as an additionalDirector to the existing Board subject to any maximum number of Directors, if any, asmay be determined by the members in general meeting. Any Director so appointed tofill a casual vacancy shall hold office only until the first general meeting of theCompany after his appointment and be subject to re-election at such meeting. AnyDirector so appointed as an addition to the existing Board shall hold office only untilthe first annual general meeting of the Company after his appointment and be eligiblefor re-election at such meeting. Any Director so appointed by the Board shall not betaken into account in determining the Directors or the number of Directors who are toretire by rotation at an annual general meeting.

At each annual general meeting, one third of the Directors for the time being shallretire from office by rotation. However, if the number of Directors is not a multiple ofthree, then the number nearest to but not less than one third shall be the number ofretiring Directors. The Directors to retire in each year shall be those who have been inoffice longest since their last re-election or appointment but, as between persons whobecame or were last re-elected Directors on the same day, those to retire shall (unlessthey otherwise agree among themselves) be determined by lot.

No person, other than a retiring Director, shall, unless recommended by the Boardfor election, be eligible for election to the office of Director at any general meeting,unless notice in writing of the intention to propose that person for election as a Directorand notice in writing by that person of his willingness to be elected has been lodged atthe head office or at the registration office of the Company. The period for lodgment ofsuch notices shall commence no earlier than the day after despatch of the notice of therelevant meeting and end no later than seven days before the date of such meeting andthe minimum length of the period during which such notices may be lodged must be atleast seven days.

A Director is not required to hold any shares in the Company by way ofqualification nor is there any specified upper or lower age limit for Directors either foraccession to or retirement from the Board.

A Director may be removed by an ordinary resolution of the Company before theexpiration of his term of office (but without prejudice to any claim which such Directormay have for damages for any breach of any contract between him and the Company)and the Company may by ordinary resolution appoint another in his place. Any Directorso appointed shall be subject to the ‘‘retirement by rotation’’ provisions. The number ofDirectors shall not be less than two.


– III-5 –

The office of a Director shall be vacated if he:

(aa) resign;

(bb) dies;

(cc) is declared to be of unsound mind and the Board resolves that his office bevacated;

(dd) becomes bankrupt or has a receiving order made against him or suspendspayment or compounds with his creditors generally;

(ee) he is prohibited from being or ceases to be a director by operation of law;

(ff) without special leave, is absent from meetings of the Board for sixconsecutive months, and the Board resolves that his office is vacated;

(gg) has been required by the stock exchange of the Relevant Territory (as definedin the Articles) to cease to be a Director; or

(hh) is removed from office by the requisite majority of the Directors or otherwisepursuant to the Articles.

From time to time the Board may appoint one or more of its body to be managingdirector, joint managing director or deputy managing director or to hold any otheremployment or executive office with the Company for such period and upon such termsas the Board may determine, and the Board may revoke or terminate any of suchappointments. The Board may also delegate any of its powers to committees consistingof such Director(s) or other person(s) as the Board thinks fit, and from time to time itmay also revoke such delegation or revoke the appointment of and discharge any suchcommittees either wholly or in part, and either as to persons or purposes, but everycommittee so formed shall, in the exercise of the powers so delegated, conform to anyregulations that may from time to time be imposed upon it by the Board.

(ii) Power to allot and issue shares and warrants

Subject to the provisions of the Cayman Companies Law, the Memorandum andArticles and without prejudice to any special rights conferred on the holders of anyshares or class of shares, any share may be issued with or have attached to it suchrights, or such restrictions, whether with regard to dividend, voting, return of capital orotherwise, as the Company may by ordinary resolution determine (or, in the absence ofany such determination or so far as the same may not make specific provision, as theBoard may determine). Any share may be issued on terms that, upon the happening of aspecified event or upon a given date and either at the option of the Company or theholder of the share, it is liable to be redeemed.


– III-6 –

The Board may issue warrants to subscribe for any class of shares or othersecurities of the Company on such terms as it may from time to time determine.

Where warrants are issued to bearer, no certificate in respect of such warrants shallbe issued to replace one that has been lost unless the Board is satisfied beyondreasonable doubt that the original certificate has been destroyed and the Company hasreceived an indemnity in such form as the Board thinks fit with regard to the issue ofany such replacement certificate.

Subject to the provisions of the Cayman Companies Law, the Articles and, whereapplicable, the rules of any stock exchange of the Relevant Territory (as defined in theArticles) and without prejudice to any special rights or restrictions for the time beingattached to any shares or any class of shares, all unissued shares in the Company shallbe at the disposal of the Board, which may offer, allot, grant options over or otherwisedispose of them to such persons, at such times, for such consideration and on such termsand conditions as it in its absolute discretion thinks fit, but so that no shares shall beissued at a discount.

Neither the Company nor the Board shall be obliged, when making or granting anyallotment of, offer of, option over or disposal of shares, to make, or make available, anysuch allotment, offer, option or shares to members or others whose registered addressesare in any particular territory or territories where, in the absence of a registrationstatement or other special formalities, this is or may, in the opinion of the Board, beunlawful or impracticable. However, no member affected as a result of the foregoingshall be, or be deemed to be, a separate class of members for any purpose whatsoever.

(iii) Power to dispose of the assets of the Company or any of its subsidiaries

While there are no specific provisions in the Articles relating to the disposal of theassets of the Company or any of its subsidiaries, the Board may exercise all powers anddo all acts and things which may be exercised or done or approved by the Company andwhich are not required by the Articles or the Cayman Companies Law to be exercised ordone by the Company in general meeting, but if such power or act is regulated by theCompany in general meeting, such regulation shall not invalidate any prior act of theBoard which would have been valid if such regulation had not been made.

(iv) Borrowing powers

The Board may exercise all the powers of the Company to raise or borrow money,to mortgage or charge all or any part of the undertaking, property and uncalled capitalof the Company and, subject to the Cayman Companies Law, to issue debentures,debenture stock, bonds and other securities of the Company, whether outright or ascollateral security for any debt, liability or obligation of the Company or of any thirdparty.


– III-7 –

(v) Remuneration

The Directors shall be entitled to receive, as ordinary remuneration for theirservices, such sums as shall from time to time be determined by the Board or theCompany in general meeting, as the case may be, such sum (unless otherwise directedby the resolution by which it is determined) to be divided among the Directors in suchproportions and in such manner as they may agree or, failing agreement, either equallyor, in the case of any Director holding office for only a portion of the period in respectof which the remuneration is payable, pro rata. The Directors shall also be entitled to berepaid all expenses reasonably incurred by them in attending any Board meetings,committee meetings or general meetings or otherwise in connection with the dischargeof their duties as Directors. Such remuneration shall be in addition to any otherremuneration to which a Director who holds any salaried employment or office in theCompany may be entitled by reason of such employment or office.

Any Director who, at the request of the Company, performs services which in theopinion of the Board go beyond the ordinary duties of a Director may be paid suchspecial or extra remuneration as the Board may determine, in addition to or insubstitution for any ordinary remuneration as a Director. An executive Directorappointed to be a managing director, joint managing director, deputy managing directoror other executive officer shall receive such remuneration and such other benefits andallowances as the Board may from time to time decide. Such remuneration shall be inaddition to his ordinary remuneration as a Director.

The Board may establish, either on its own or jointly in concurrence or agreementwith subsidiaries of the Company or companies with which the Company is associatedin business, or may make contributions out of the Company’s monies to, any schemes orfunds for providing pensions, sickness or compassionate allowances, life assurance orother benefits for employees (which expression as used in this and the followingparagraph shall include any Director or former Director who may hold or have held anyexecutive office or any office of profit with the Company or any of its subsidiaries) andformer employees of the Company and their dependents or any class or classes of suchpersons.

The Board may also pay, enter into agreements to pay or make grants of revocableor irrevocable, whether or not subject to any terms or conditions, pensions or otherbenefits to employees and former employees and their dependents, or to any of suchpersons, including pensions or benefits additional to those, if any, to which suchemployees or former employees or their dependents are or may become entitled underany such scheme or fund as mentioned above. Such pension or benefit may, if deemeddesirable by the Board, be granted to an employee either before and in anticipation of,or upon or at any time after, his actual retirement.


– III-8 –

(vi) Compensation or payments for loss of office

Payments to any present Director or past Director of any sum by way ofcompensation for loss of office or as consideration for or in connection with hisretirement from office (not being a payment to which the Director is contractually orstatutorily entitled) must be approved by the Company in general meeting.

(vii) Loans and provision of security for loans to Directors

The Company shall not directly or indirectly make a loan to a Director or adirector of any holding company of the Company or any of their respective closeassociates, enter into any guarantee or provide any security in connection with a loanmade by any person to a Director or a director of any holding company of the Companyor any of their respective close associates, or, if any one or more of the Directorshold(s) (jointly or severally or directly or indirectly) a controlling interest in anothercompany, make a loan to that other company or enter into any guarantee or provide anysecurity in connection with a loan made by any person to that other company.

(viii) Disclosure of interest in contracts with the Company or any of its subsidiaries

With the exception of the office of auditor of the Company, a Director may holdany other office or place of profit with the Company in conjunction with his office ofDirector for such period and upon such terms as the Board may determine, and may bepaid such extra remuneration for that other office or place of profit, in whatever form,in addition to any remuneration provided for by or pursuant to any other Articles. ADirector may be or become a director, officer or member of any other company in whichthe Company may be interested, and shall not be liable to account to the Company orthe members for any remuneration or other benefits received by him as a director,officer or member of such other company. The Board may also cause the voting powerconferred by the shares in any other company held or owned by the Company to beexercised in such manner in all respects as it thinks fit, including the exercise in favourof any resolution appointing the Directors or any of them to be directors or officers ofsuch other company.

No Director or intended Director shall be disqualified by his office fromcontracting with the Company, nor shall any such contract or any other contract orarrangement in which any Director is in any way interested be liable to be avoided, norshall any Director so contracting or being so interested be liable to account to theCompany for any profit realised by any such contract or arrangement by reason only ofsuch Director holding that office or the fiduciary relationship established by it. ADirector who is, in any way, materially interested in a contract or arrangement orproposed contract or arrangement with the Company shall declare the nature of hisinterest at the earliest meeting of the Board at which he may practically do so.

There is no power to freeze or otherwise impair any of the rights attaching to anyshare by reason that the person or persons who are interested directly or indirectly inthat share have failed to disclose their interests to the Company.


– III-9 –

A Director shall not vote or be counted in the quorum on any resolution of theBoard in respect of any contract or arrangement or proposal in which he or any of hisclose associate(s) has/have a material interest, and if he shall do so his vote shall not becounted nor shall he be counted in the quorum for that resolution, but this prohibitionshall not apply to any of the following matters:

(aa) the giving of any security or indemnity to the Director or his closeassociate(s) in respect of money lent or obligations incurred or undertaken byhim or any of them at the request of or for the benefit of the Company or anyof its subsidiaries;

(bb) the giving of any security or indemnity to a third party in respect of a debt orobligation of the Company or any of its subsidiaries for which the Director orhis close associate(s) has/have himself/themselves assumed responsibility inwhole or in part whether alone or jointly under a guarantee or indemnity orby the giving of security;

(cc) any proposal concerning an offer of shares, debentures or other securities ofor by the Company or any other company which the Company may promoteor be interested in for subscription or purchase, where the Director or hisclose associate(s) is/are or is/are to be interested as a participant in theunderwriting or sub-underwriting of the offer;

(dd) any proposal or arrangement concerning the benefit of employees of theCompany or any of its subsidiaries, including the adoption, modification oroperation of either: (i) any employees’ share scheme or any share incentive orshare option scheme under which the Director or his close associate(s) maybenefit; or (ii) any of a pension fund or retirement, death or disability benefitsscheme which relates to Directors, their close associates and employees of theCompany or any of its subsidiaries and does not provide in respect of anyDirector or his close associate(s) any privilege or advantage not generallyaccorded to the class of persons to which such scheme or fund relates; and

(ee) any contract or arrangement in which the Director or his close associate(s) is/are interested in the same manner as other holders of shares, debentures orother securities of the Company by virtue only of his/their interest in thoseshares, debentures or other securities.

(ix) Proceedings of the Board

The Board may meet anywhere in the world for the despatch of business and mayadjourn and otherwise regulate its meetings as it thinks fit. Questions arising at anymeeting shall be determined by a majority of votes. In the case of an equality of votes,the chairman of the meeting shall have a second or casting vote.


– III-10 –

(c) Alterations to the constitutional documents and the Company’s name

To the extent that the same is permissible under Cayman Islands law and subject to theArticles, the Memorandum and Articles of the Company may only be altered or amended, andthe name of the Company may only be changed, with the sanction of a special resolution ofthe Company.

(d) Meetings of member

(i) Special and ordinary resolutions

A special resolution of the Company must be passed by a majority of not less thanthree-fourths of the votes cast by such members as, being entitled so to do, vote inperson or by proxy or, in the case of members which are corporations, by their dulyauthorised representatives or, where proxies are allowed, by proxy at a general meetingof which notice specifying the intention to propose the resolution as a special resolutionhas been duly given.

Under Cayman Companies Law, a copy of any special resolution must beforwarded to the Registrar of Companies in the Cayman Islands within 15 days of beingpassed.

An ‘‘ordinary resolution’’, by contrast, is a resolution passed by a simple majorityof the votes of such members of the Company as, being entitled to do so, vote in personor, in the case of members which are corporations, by their duly authorisedrepresentatives or, where proxies are allowed, by proxy at a general meeting of whichnotice has been duly given.

A resolution in writing signed by or on behalf of all members shall be treated as anordinary resolution duly passed at a general meeting of the Company duly convened andheld, and where relevant as a special resolution so passed.

(ii) Voting rights and right to demand a poll

Subject to any special rights, restrictions or privileges as to voting for the timebeing attached to any class or classes of shares at any general meeting: (a) on a pollevery member present in person or by proxy or, in the case of a member being acorporation, by its duly authorised representative shall have one vote for every sharewhich is fully paid or credited as fully paid registered in his name in the register ofmembers of the Company but so that no amount paid up or credited as paid up on ashare in advance of calls or instalments is treated for this purpose as paid up on theshare; and (b) on a show of hands every member who is present in person (or, in thecase of a member being a corporation, by its duly authorised representative) or by proxyshall have one vote. Where more than one proxy is appointed by a member which is aClearing House (as defined in the Articles) or its nominee(s), each such proxy shallhave one vote on a show of hands. On a poll, a member entitled to more than one voteneed not use all his votes or cast all the votes he does use in the same way.


– III-11 –

At any general meeting a resolution put to the vote of the meeting is to be decidedby poll save that the chairman of the meeting may, pursuant to the Listing Rules, allowa resolution to be voted on by a show of hands. Where a show of hands is allowed,before or on the declaration of the result of the show of hands, a poll may be demandedby (in each case by members present in person or by proxy or by a duly authorisedcorporate representative):

(A) at least two members;

(B) any member or members representing not less than one-tenth of the totalvoting rights of all the members having the right to vote at the meeting; or

(C) a member or members holding shares in the Company conferring a right tovote at the meeting on which an aggregate sum has been paid equal to notless than one-tenth of the total sum paid up on all the shares conferring thatright.

Should a Clearing House or its nominee(s) be a member of the Company, suchperson or persons may be authorised as it thinks fit to act as its representative(s) at anymeeting of the Company or at any meeting of any class of members of the Companyprovided that, if more than one person is so authorised, the authorisation shall specifythe number and class of shares in respect of which each such person is so authorised. Aperson authorised in accordance with this provision shall be deemed to have been dulyauthorised without further evidence of the facts and be entitled to exercise the samerights and powers on behalf of the Clearing House or its nominee(s) as if such personwere an individual member including the right to vote individually on a show of hands.

Where the Company has knowledge that any member is, under the Listing Rules,required to abstain from voting on any particular resolution or restricted to voting onlyfor or only against any particular resolution, any votes cast by or on behalf of suchmember in contravention of such requirement or restriction shall not be counted.

(iii) Annual general meetings

The Company must hold an annual general meeting each year other than the yearof the Company’s adoption of the Articles. Such meeting must be held not more than 15months after the holding of the last preceding annual general meeting, or such longerperiod as may be authorised by the Stock Exchange at such time and place as may bedetermined by the Board.

(iv) Notices of meetings and business to be conducted

An annual general meeting of the Company shall be called by at least 21 days’notice in writing, and any other general meeting of the Company shall be called by atleast 14 days’ notice in writing. The notice shall be exclusive of the day on which it isserved or deemed to be served and of the day for which it is given, and must specify the


– III-12 –

time, place and agenda of the meeting and particulars of the resolution(s) to beconsidered at that meeting and, in the case of special business, the general nature of thatbusiness.

Except where otherwise expressly stated, any notice or document (including ashare certificate) to be given or issued under the Articles shall be in writing, and may beserved by the Company on any member personally, by post to such member’s registeredaddress or (in the case of a notice) by advertisement in the newspapers. Any memberwhose registered address is outside Hong Kong may notify the Company in writing ofan address in Hong Kong which shall be deemed to be his registered address for thispurpose. Subject to the Cayman Companies Law and the Listing Rules, a notice ordocument may also be served or delivered by the Company to any member by electronicmeans.

Although a meeting of the Company may be called by shorter notice than asspecified above, such meeting may be deemed to have been duly called if it is soagreed:

(i) in the case of an annual general meeting, by all members of the Companyentitled to attend and vote thereat; and

(ii) in the case of any other meeting, by a majority in number of the membershaving a right to attend and vote at the meeting holding not less than 95% ofthe total voting rights in the Company.

All business transacted at an extraordinary general meeting shall be deemed specialbusiness. All business shall also be deemed special business where it is transacted at anannual general meeting, with the exception of certain routine matters which shall bedeemed ordinary business.

(v) Quorum for meetings and separate class meetings

No business shall be transacted at any general meeting unless a quorum is presentwhen the meeting proceeds to business, and continues to be present until the conclusionof the meeting.

The quorum for a general meeting shall be two members present in person (or inthe case of a member being a corporation, by its duly authorised representative) or byproxy and entitled to vote. In respect of a separate class meeting (other than anadjourned meeting) convened to sanction the modification of class rights the necessaryquorum shall be two persons holding or representing by proxy not less than one-third innominal value of the issued shares of that class.


– III-13 –

(vi) Proxies

Any member of the Company entitled to attend and vote at a meeting of theCompany is entitled to appoint another person as his proxy to attend and vote instead ofhim. A member who is the holder of two or more shares may appoint more than oneproxy to represent him and vote on his behalf at a general meeting of the Company or ata class meeting. A proxy need not be a member of the Company and shall be entitled toexercise the same powers on behalf of a member who is an individual and for whom heacts as proxy as such member could exercise. In addition, a proxy shall be entitled toexercise the same powers on behalf of a member which is a corporation and for whichhe acts as proxy as such member could exercise if it were an individual member. On apoll or on a show of hands, votes may be given either personally (or, in the case of amember being a corporation, by its duly authorized representative) or by proxy.

The instrument appointing a proxy shall be in writing under the hand of theappointor or of his attorney duly authorised in writing, or if the appointor is acorporation, either under seal or under the hand of a duly authorised officer or attorney.Every instrument of proxy, whether for a specified meeting or otherwise, shall be insuch form as the Board may from time to time approve, provided that it shall notpreclude the use of the two-way form. Any form issued to a member for appointing aproxy to attend and vote at an extraordinary general meeting or at an annual generalmeeting at which any business is to be transacted shall be such as to enable the member,according to his intentions, to instruct the proxy to vote in favour of or against (or, indefault of instructions, to exercise his discretion in respect of) each resolution dealingwith any such business.

(e) Accounts and audit

The Board shall cause proper books of account to be kept of the sums of moneyreceived and expended by the Company, and of the assets and liabilities of the Company andof all other matters required by the Cayman Companies Law (which include all sales andpurchases of goods by the company) necessary to give a true and fair view of the state of theCompany’s affairs and to show and explain its transactions.

The books of accounts of the Company shall be kept at the head office of the Companyor at such other place or places as the Board decides and shall always be open to inspectionby any Director. No member (other than a Director) shall have any right to inspect anyaccount, book or document of the Company except as conferred by the Cayman CompaniesLaw or ordered by a court of competent jurisdiction or authorised by the Board or theCompany in general meeting.

The Board shall from time to time cause to be prepared and laid before the Company atits annual general meeting balance sheets and profit and loss accounts (including everydocument required by law to be annexed thereto), together with a copy of the Directors’report and a copy of the auditors’ report, not less than 21 days before the date of the annual


– III-14 –

general meeting. Copies of these documents shall be sent to every person entitled to receivenotices of general meetings of the Company under the provisions of the Articles together withthe notice of annual general meeting, not less than 21 days before the date of the meeting.

Subject to the rules of the stock exchange of the Relevant Territory (as defined in theArticles), the Company may send summarized financial statements to shareholders who have,in accordance with the rules of the stock exchange of the Relevant Territory, consented andelected to receive summarized financial statements instead of the full financial statements.The summarized financial statements must be accompanied by any other documents as maybe required under the rules of the stock exchange of the Relevant Territory, and must be sentto those shareholders that have consented and elected to receive the summarised financialstatements not less than 21 days before the general meeting.

The Company shall appoint auditor(s) to hold office until the conclusion of the nextannual general meeting on such terms and with such duties as may be agreed with the Board.The auditors’ remuneration shall be fixed by the Company in general meeting or by theBoard if authority is so delegated by the members.

The auditors shall audit the financial statements of the Company in accordance withgenerally accepted accounting principles of Hong Kong, the International AccountingStandards or such other standards as may be permitted by the Stock Exchange.

(f) Dividends and other methods of distribution

The Company in general meeting may declare dividends in any currency to be paid tothe members but no dividend shall be declared in excess of the amount recommended by theBoard.

Except in so far as the rights attaching to, or the terms of issue of, any share mayotherwise provide:

(i) all dividends shall be declared and paid according to the amounts paid up on theshares in respect of which the dividend is paid, although no amount paid up on ashare in advance of calls shall for this purpose be treated as paid up on the share;

(ii) all dividends shall be apportioned and paid pro rata in accordance with the amountpaid up on the shares during any portion(s) of the period in respect of which thedividend is paid; and

(iii) the Board may deduct from any dividend or other monies payable to any memberall sums of money (if any) presently payable by him to the Company on account ofcalls, instalments or otherwise.


– III-15 –

Where the Board or the Company in general meeting has resolved that a dividendshould be paid or declared, the Board may resolve:

(aa) that such dividend be satisfied wholly or in part in the form of an allotmentof shares credited as fully paid up, provided that the members entitled to suchdividend will be entitled to elect to receive such dividend (or part thereof) incash in lieu of such allotment; or

(bb) that the members entitled to such dividend will be entitled to elect to receivean allotment of shares credited as fully paid up in lieu of the whole or suchpart of the dividend as the Board may think fit.

Upon the recommendation of the Board, the Company may by ordinary resolution inrespect of any one particular dividend of the Company determine that it may be satisfiedwholly in the form of an allotment of shares credited as fully paid up without offering anyright to members to elect to receive such dividend in cash in lieu of such allotment.

Any dividend, bonus or other sum payable in cash to the holder of shares may be paidby cheque or warrant sent through the post. Every such cheque or warrant shall be madepayable to the order of the person to whom it is sent and shall be sent at the holder’s or jointholders’ risk and payment of the cheque or warrant by the bank on which it is drawn shallconstitute a good discharge to the Company. Any one of two or more joint holders may giveeffectual receipts for any dividends or other monies payable or property distributable inrespect of the shares held by such joint holders.

Whenever the Board or the Company in general meeting has resolved that a dividend bepaid or declared, the Board may further resolve that such dividend be satisfied wholly or inpart by the distribution of specific assets of any kind.

The Board may, if it thinks fit, receive from any member willing to advance the same,and either in money or money’s worth, all or any part of the money uncalled and unpaid orinstalments payable upon any shares held by him, and in respect of all or any of the moniesso advanced may pay interest at such rate (if any) not exceeding 20% per annum, as theBoard may decide, but a payment in advance of a call shall not entitle the member to receiveany dividend or to exercise any other rights or privileges as a member in respect of the shareor the due portion of the shares upon which payment has been advanced by such memberbefore it is called up.

All dividends, bonuses or other distributions unclaimed for one year after having beendeclared may be invested or otherwise used by the Board for the benefit of the Companyuntil claimed and the Company shall not be constituted a trustee in respect thereof. Alldividends, bonuses or other distributions unclaimed for six years after having been declaredmay be forfeited by the Board and, upon such forfeiture, shall revert to the Company.

No dividend or other monies payable by the Company on or in respect of any shareshall bear interest against the Company.


– III-16 –

The Company may exercise the power to cease sending cheques for dividendentitlements or dividend warrants by post if such cheques or warrants remain uncashed ontwo consecutive occasions or after the first occasion on which such a cheque or warrant isreturned undelivered.

(g) Inspection of corporate records

For so long as any part of the share capital of the Company is listed on the StockExchange, any member may inspect any register of members of the Company maintained inHong Kong (except when the register of members is closed) without charge and require theprovision to him of copies or extracts of such register in all respects as if the Company wereincorporated under and were subject to the Hong Kong Companies Ordinance.

(h) Rights of minorities in relation to fraud or oppression

There are no provisions in the Articles concerning the rights of minority members inrelation to fraud or oppression. However, certain remedies may be available to members ofthe Company under Cayman Islands law, as summarized in paragraph 3(f) of this Appendix.

(i) Procedures on liquidation

A resolution that the Company be wound up by the court or be wound up voluntarilyshall be a special resolution.

Subject to any special rights, privileges or restrictions as to the distribution of availablesurplus assets on liquidation for the time being attached to any class or classes of shares:

(i) if the Company is wound up and the assets available for distribution among themembers of the Company are more than sufficient to repay the whole of the capitalpaid up at the commencement of the winding up, then the excess shall bedistributed pari passu among such members in proportion to the amount paid up onthe shares held by them respectively; and

(ii) if the Company is wound up and the assets available for distribution among themembers as such are insufficient to repay the whole of the paid-up capital, suchassets shall be distributed so that, as nearly as may be, the losses shall be borne bythe members in proportion to the capital paid up on the shares held by them,respectively.

If the Company is wound up (whether the liquidation is voluntary or compelled by thecourt), the liquidator may, with the sanction of a special resolution and any other sanctionrequired by the Cayman Companies Law, divide among the members in specie or kind thewhole or any part of the assets of the Company, whether the assets consist of property of onekind or different kinds, and the liquidator may, for such purpose, set such value as he deemsfair upon any one or more class or classes of property to be so divided and may determinehow such division shall be carried out as between the members or different classes ofmembers and the members within each class. The liquidator may, with the like sanction, vest


– III-17 –

any part of the assets in trustees upon such trusts for the benefit of members as the liquidatorthinks fit, but so that no member shall be compelled to accept any shares or other propertyupon which there is a liability.

(j) Subscription rights reserve

Provided that it is not prohibited by and is otherwise in compliance with the CaymanCompanies Law, if warrants to subscribe for shares have been issued by the Company and theCompany does any act or engages in any transaction which would result in the subscriptionprice of such warrants being reduced below the par value of the shares to be issued on theexercise of such warrants, a subscription rights reserve shall be established and applied inpaying up the difference between the subscription price and the par value of such shares.

3. CAYMAN ISLANDS COMPANY LAW

The Company was incorporated in the Cayman Islands as an exempted company on 16February 2017 subject to the Cayman Companies Law. Certain provisions of Cayman Islandscompany law are set out below but this section does not purport to contain all applicablequalifications and exceptions or to be a complete review of all matters of the Cayman CompaniesLaw and taxation, which may differ from equivalent provisions in jurisdictions with whichinterested parties may be more familiar.

(a) Company operations

An exempted company such as the Company must conduct its operations mainly outsidethe Cayman Islands. An exempted company is also required to file an annual return each yearwith the Registrar of Companies of the Cayman Islands and pay a fee which is based on theamount of its authorised share capital.

(b) Share capital

Under Cayman Companies Law, a Cayman Islands company may issue ordinary,preference or redeemable shares or any combination thereof. Where a company issues sharesat a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value ofthe premiums on those shares shall be transferred to an account, to be called the ‘‘sharepremium account’’. At the option of a company, these provisions may not apply to premiumson shares of that company allotted pursuant to any arrangements in consideration of theacquisition or cancellation of shares in any other company and issued at a premium. Theshare premium account may be applied by the company subject to the provisions, if any, ofits memorandum and articles of association, in such manner as the company may from timeto time determine including, but without limitation, the following:

(i) paying distributions or dividends to members;

(ii) paying up unissued shares of the company to be issued to members as fully paidbonus shares;


– III-18 –

(iii) any manner provided in section 37 of the Cayman Companies Law;

(iv) writing-off the preliminary expenses of the company; and

(v) writing-off the expenses of, or the commission paid or discount allowed on, anyissue of shares or debentures of the company.

Notwithstanding the foregoing, no distribution or dividend may be paid to members outof the share premium account unless, immediately following the date on which thedistribution or dividend is proposed to be paid, the company will be able to pay its debts asthey fall due in the ordinary course of business.

Subject to confirmation by the court, a company limited by shares or a company limitedby guarantee and having a share capital may, if authorised to do so by its articles ofassociation, by special resolution reduce its share capital in any way.

(c) Financial assistance to purchase shares of a company or its holding company

There are no statutory prohibitions in the Cayman Islands on the granting of financialassistance by a company to another person for the purchase of, or subscription for, its own,its holding company’s or a subsidiary’s shares. Therefore, a company may provide financialassistance provided the directors of the company, when proposing to grant such financialassistance, discharge their duties of care and act in good faith, for a proper purpose and inthe interests of the company. Such assistance should be on an arm’s-length basis.

(d) Purchase of shares and warrants by a company and its subsidiaries

A company limited by shares or a company limited by guarantee and having a sharecapital may, if so authorised by its articles of association, issue shares which are to beredeemed or are liable to be redeemed at the option of the company or a member and, for theavoidance of doubt, it shall be lawful for the rights attaching to any shares to be varied,subject to the provisions of the company’s articles of association, so as to provide that suchshares are to be or are liable to be so redeemed. In addition, such a company may, ifauthorised to do so by its articles of association, purchase its own shares, including anyredeemable shares; an ordinary resolution of the company approving the manner and terms ofthe purchase will be required if the articles of association do not authorise the manner andterms of such purchase. A company may not redeem or purchase its shares unless they arefully paid. Furthermore, a company may not redeem or purchase any of its shares if, as aresult of the redemption or purchase, there would no longer be any issued shares of thecompany other than shares held as treasury shares. In addition, a payment out of capital by acompany for the redemption or purchase of its own shares is not lawful unless, immediatelyfollowing the date on which the payment is proposed to be made, the company shall be ableto pay its debts as they fall due in the ordinary course of business.


– III-19 –

Shares that have been purchased or redeemed by a company or surrendered to thecompany shall not be treated as cancelled but shall be classified as treasury shares if held incompliance with the requirements of Section 37A(1) of the Cayman Companies Law. Anysuch shares shall continue to be classified as treasury shares until such shares are eithercancelled or transferred pursuant to the Cayman Companies Law.

A Cayman Islands company may be able to purchase its own warrants subject to and inaccordance with the terms and conditions of the relevant warrant instrument or certificate.Thus there is no requirement under Cayman Islands law that a company’s memorandum orarticles of association contain a specific provision enabling such purchases. The directors of acompany may under the general power contained in its memorandum of association be able tobuy, sell and deal in personal property of all kinds.

A subsidiary may hold shares in its holding company and, in certain circumstances, mayacquire such shares.

(e) Dividends and distributions

Subject to a solvency test, as prescribed in the Cayman Companies Law, and theprovisions, if any, of the company’s memorandum and articles of association, a company maypay dividends and distributions out of its share premium account. In addition, based uponEnglish case law which is likely to be persuasive in the Cayman Islands, dividends may bepaid out of profits.

For so long as a company holds treasury shares, no dividend may be declared or paid,and no other distribution (whether in cash or otherwise) of the company’s assets (includingany distribution of assets to members on a winding up) may be made, in respect of a treasuryshare.

(f) Protection of minorities and shareholders’ suits

It can be expected that the Cayman Islands courts will ordinarily follow English caselaw precedents (particularly the rule in the case of Foss v. Harbottle and the exceptions tothat rule) which permit a minority member to commence a representative action against orderivative actions in the name of the company to challenge acts which are ultra vires, illegal,fraudulent (and performed by those in control of the Company) against the minority, orrepresent an irregularity in the passing of a resolution which requires a qualified (or special)majority which has not been obtained.

Where a company (not being a bank) is one which has a share capital divided intoshares, the court may, on the application of members holding not less than one-fifth of theshares of the company in issue, appoint an inspector to examine the affairs of the companyand, at the direction of the court, to report on such affairs. In addition, any member of acompany may petition the court, which may make a winding up order if the court is of theopinion that it is just and equitable that the company should be wound up.


– III-20 –

In general, claims against a company by its members must be based on the general lawsof contract or tort applicable in the Cayman Islands or be based on potential violation of theirindividual rights as members as established by a company’s memorandum and articles ofassociation.

(g) Disposal of assets

There are no specific restrictions on the power of directors to dispose of assets of acompany, however, the directors are expected to exercise certain duties of care, diligence andskill to the standard that a reasonably prudent person would exercise in comparablecircumstances, in addition to fiduciary duties to act in good faith, for proper purpose and inthe best interests of the company under English common law (which the Cayman Islandscourts will ordinarily follow).

(h) Accounting and auditing requirements

A company must cause proper records of accounts to be kept with respect to: (i) allsums of money received and expended by it; (ii) all sales and purchases of goods by it and(iii) its assets and liabilities.

Proper books of account shall not be deemed to be kept if there are not kept such booksas are necessary to give a true and fair view of the state of the company’s affairs and toexplain its transactions.

If a company keeps its books of account at any place other than at its registered officeor any other place within the Cayman Islands, it shall, upon service of an order or notice bythe Tax Information Authority pursuant to the Tax Information Authority Law (2013Revision) of the Cayman Islands, make available, in electronic form or any other medium, atits registered office copies of its books of account, or any part or parts thereof, as arespecified in such order or notice.

(i) Exchange control

There are no exchange control regulations or currency restrictions in effect in theCayman Islands.

(j) Taxation

Pursuant to section 6 of the Tax Concessions Law (2011 Revision) of the CaymanIslands, the Company has obtained an undertaking from the Governor-in-Cabinet that:

(i) no law which is enacted in the Cayman Islands imposing any tax to be levied onprofits or income or gains or appreciation shall apply to the Company or itsoperations; and


– III-21 –

(ii) no tax be levied on profits, income, gains or appreciations or which is in the natureof estate duty or inheritance tax shall be payable by the Company:

(aa) on or in respect of the shares, debentures or other obligations of theCompany; or

(bb) by way of withholding in whole or in part of any relevant payment as definedin section 6(3) of the Tax Concessions Law (2011 Revision).

The undertaking for the Company is for a period of 20 years from 14 March 2017.

The Cayman Islands currently levy no taxes on individuals or corporations basedupon profits, income, gains or appreciations and there is no taxation in the natureof inheritance tax or estate duty. There are no other taxes likely to be material tothe Company levied by the Government of the Cayman Islands save for certainstamp duties which may be applicable, from time to time, on certain instruments.

(k) Stamp duty on transfers

No stamp duty is payable in the Cayman Islands on transfers of shares of CaymanIslands companies save for those which hold interests in land in the Cayman Islands.

(l) Loans to directors

There is no express provision prohibiting the making of loans by a company to any ofits directors. However, the company’s articles of association may provide for the prohibitionof such loans under specific circumstances.

(m) Inspection of corporate records

The members of a company have no general right to inspect or obtain copies of theregister of members or corporate records of the company. They will, however, have suchrights as may be set out in the company’s articles of association.

(n) Register of members

A Cayman Islands exempted company may maintain its principal register of membersand any branch registers in any country or territory, whether within or outside the CaymanIslands, as the company may determine from time to time. There is no requirement for anexempted company to make any returns of members to the Registrar of Companies in theCayman Islands. The names and addresses of the members are, accordingly, not a matter ofpublic record and are not available for public inspection. However, an exempted companyshall make available at its registered office, in electronic form or any other medium, suchregister of members, including any branch register of member, as may be required of it uponservice of an order or notice by the Tax Information Authority pursuant to the TaxInformation Authority Law (2013 Revision) of the Cayman Islands.


– III-22 –

(o) Register of Directors and officers

Pursuant to the Cayman Companies Law, the Company is required to maintain at itsregistered office a register of directors, alternate directors and officers which is not availablefor inspection by the public. A copy of such register must be filed with the Registrar ofCompanies in the Cayman Islands and any change must be notified to the Registrar within 60days of any change in such directors or officers, including a change of the name of suchdirectors or officers.

(p) Winding up

A Cayman Islands company may be wound up by: (i) an order of the court; (ii)voluntarily by its members; or (iii) under the supervision of the court.

The court has authority to order winding up in a number of specified circumstancesincluding where, in the opinion of the court, it is just and equitable that such company be sowound up.

A voluntary winding up of a company (other than a limited duration company, for whichspecific rules apply) occurs where the company resolves by special resolution that it bewound up voluntarily or where the company in general meeting resolves that it be wound upvoluntarily because it is unable to pay its debt as they fall due. In the case of a voluntarywinding up, the company is obliged to cease to carry on its business from the commencementof its winding up except so far as it may be beneficial for its winding up. Upon appointmentof a voluntary liquidator, all the powers of the directors cease, except so far as the companyin general meeting or the liquidator sanctions their continuance.

In the case of a members’ voluntary winding up of a company, one or more liquidatorsare appointed for the purpose of winding up the affairs of the company and distributing itsassets.

As soon as the affairs of a company are fully wound up, the liquidator must make areport and an account of the winding up, showing how the winding up has been conductedand the property of the company disposed of, and call a general meeting of the company forthe purposes of laying before it the account and giving an explanation of that account.

When a resolution has been passed by a company to wind up voluntarily, the liquidatoror any contributory or creditor may apply to the court for an order for the continuation of thewinding up under the supervision of the court, on the grounds that: (i) the company is or islikely to become insolvent; or (ii) the supervision of the court will facilitate a more effective,economic or expeditious liquidation of the company in the interests of the contributories andcreditors. A supervision order takes effect for all purposes as if it was an order that thecompany be wound up by the court except that a commenced voluntary winding up and theprior actions of the voluntary liquidator shall be valid and binding upon the company and itsofficial liquidator.


– III-23 –

For the purpose of conducting the proceedings in winding up a company and assistingthe court, one or more persons may be appointed to be called an official liquidator(s).Thecourt may appoint to such office such person or persons, either provisionally or otherwise, asit thinks fit, and if more than one person is appointed to such office, the court shall declarewhether any act required or authorized to be done by the official liquidator is to be done byall or any one or more of such persons. The court may also determine whether any and whatsecurity is to be given by an official liquidator on his appointment; if no official liquidator isappointed, or during any vacancy in such office, all the property of the company shall be inthe custody of the court.

(q) Reconstructions

Reconstructions and amalgamations may be approved by a majority in numberrepresenting 75% in value of the members or creditors, depending on the circumstances, asare present at a meeting called for such purpose and thereafter sanctioned by the courts.Whilst a dissenting member has the right to express to the court his view that the transactionfor which approval is being sought would not provide the members with a fair value for theirshares, the courts are unlikely to disapprove the transaction on that ground alone in theabsence of evidence of fraud or bad faith on behalf of management, and if the transactionwere approved and consummated the dissenting member would have no rights comparable tothe appraisal rights (i.e. the right to receive payment in cash for the judicially determinedvalue of their shares) ordinarily available, for example, to dissenting members of a UnitedStates corporation.

(r) Take-overs

Where an offer is made by a company for the shares of another company and, withinfour months of the offer, the holders of not less than 90% of the shares which are the subjectof the offer accept, the offeror may, at any time within two months after the expiration ofthat four-month period, by notice require the dissenting members to transfer their shares onthe terms of the offer. A dissenting member may apply to the Cayman Islands courts withinone month of the notice objecting to the transfer. The burden is on the dissenting member toshow that the court should exercise its discretion, which it will be unlikely to do unless thereis evidence of fraud or bad faith or collusion as between the offeror and the holders of theshares who have accepted the offer as a means of unfairly forcing out minority members.

(s) Indemnification

Cayman Islands law does not limit the extent to which a company’s articles ofassociation may provide for indemnification of officers and directors, save to the extent anysuch provision may be held by the court to be contrary to public policy, for example, where aprovision purports to provide indemnification against the consequences of committing acrime.


– III-24 –

4. GENERAL

The Company’s legal adviser on Cayman Islands law, has sent to the Company a letter ofadvice which summarises certain aspects of the Cayman Islands company law. This letter, togetherwith a copy of the Cayman Companies Law, is available for inspection as referred to in theparagraph headed ‘‘Documents Available for Inspection’’ in Appendix V. Any person wishing tohave a detailed summary of Cayman Islands company law or advice on the differences between itand the laws of any jurisdiction with which he is more familiar is recommended to seekindependent legal advice.


– III-25 –

A. FURTHER INFORMATION ABOUT OUR COMPANY AND OUR SUBSIDIARIES

1. Incorporation of our Company

Our Company was incorporated in the Cayman Islands under the Companies Law as anexempted company with limited liability on 16 February 2017. Our Company’s registeredoffice is at P.O. Box 1350, Clifton House, 75 Fort Street, Grand Cayman, KY1-1108,Cayman Islands. Our Company has established a principal place of business at 9/F Wah YuenBuilding, 149 Queen’s Road Central, Central, Hong Kong and was registered as a non-HongKong company in Hong Kong under Part 16 of the Companies Ordinance on 20 April 2017with Mr. Tso Ping Cheong, Brian appointed as the Hong Kong authorised representative ofour Company on 21 March 2017 for acceptance on behalf of our Company of service ofprocess and any notices required to be served on our Company in Hong Kong.

As our Company is incorporated in the Cayman Islands, it is subject to the CaymanIslands Law and its constitution documents, which comprises the Memorandum and theArticles. A summary of certain provisions of the Memorandum, the Articles and certainaspects of the Companies Law are set out in the section headed ‘‘Appendix III — Summaryof the constitution of the Company and Cayman Islands Company Law’’ in this prospectus.

2. Changes in share capital of our Company

As at the date of incorporation of our Company, the authorised share capital of ourCompany was HK$380,000 divided into 38,000,000 shares of par value HK$0.01 each. Thefollowing sets out the changes in the authorised and issued share capital of our Companysince its date of incorporation up to the date of this prospectus:

(i) on 16 February 2017, the initial subscriber subscribed for one nil-paid Share. Onthe same date, the initial subscriber transferred one Share to Mansion Green;

(ii) On 23 October 2017, the authorised share capital of our Company increased fromHK$380,000 to HK$100,000,000;

(iii) immediately following completion of the Share Offer and the Capitalisation Issue(without taking into account any Shares to be issued upon the exercise of theoptions that have been or may be granted under the Share Option Scheme),400,000,000 Shares will be issued fully paid or credited as fully paid, and600,000,000 Shares will remain unissued;

(iv) Immediately following completion of the Capitalisation Issue and the Share Offer,the issued share capital of our Company will be HK$4,000,000 divided into400,000,000 Shares of par value HK$0.01 fully paid or credited as fully paid. OurCompany will be owned as to 75% by Mansion Green and the Pre-IPO Investorsupon completion of the Capitalisation Issue and the Share Offer.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

– IV-1 –

Other than pursuant to the general mandate to issue Shares referred to in the paragraphheaded ‘‘A. Further Information about our Company and our subsidiaries — 3. Writtenresolutions of our Shareholders passed on 23 October 2017’’ in this section, our Companydoes not have any present intention to issue any of the authorised but unissued share capitalof our Company and, without prior approval of the Shareholders in general meeting, no issueof Shares will be made which would effectively alter the control of our Company; and

Saved as disclosed in the section headed ‘‘Share Capital’’ in this prospectus, there hasbeen no alteration in our Company’s share capital since its incorporation.

3. Written resolutions of our Shareholders passed on 23 October 2017

Pursuant to the written resolutions of the Shareholders of our Company passed on 23October 2017, the following resolutions were passed by the Shareholders, pursuant to which,among other things:

(a) conditional upon Listing, the Memorandum and Articles were approved andadopted;

(b) the authorised share capital of our Company was changed from HK$380,000divided into 38,000,000 Shares of HK$0.01 per Share to HK$100,000,000 dividedinto 10,000,000,000 Shares of HK$0.01 per Share by the creation of an additional9,962,000,000 Shares of HK$0.01 per Share;

(c) conditional upon the fulfilment or waiver of the conditions set out in the sectionheaded ‘‘Structure and Conditions of the Share Offer’’ in this prospectus, the ShareOffer was approved and our Directors were authorised to allot and issue the OfferShares; and

(d) conditional upon the share premium account of our Company having sufficientbalance, or otherwise being credited as a result of the issue of the new Sharesunder the Share Offer, our Directors were authorised to capitalise HK$2,999,998standing to the credit of the share premium account of our Company by applyingsuch sum in paying up in full at par 299,999,800 Shares for allotment and issue toShareholder(s) whose name(s) appear(s) on the register of members of ourCompany at the close of business on 23 October 2017 in proportion (as nearly aspossible without involving fractions) to their then existing shareholdings in ourCompany;

(e) a general unconditional mandate was given to our Directors to exercise all powersof our Company to allot (including the power to make and grant offers, agreementsand options which would or might require Shares to be allotted and issued),otherwise than pursuant to, or in consequence of a rights issue or pursuant to anyscrip dividend schemes or similar arrangements providing for the allotment andissue of Shares in lieu of the whole or part of a dividend on Shares in accordancewith the Articles or other similar arrangement or pursuant to a specific authoritygranted by the Shareholders in general meeting, Shares with a total nominal valuenot exceeding (aa) 20% of the aggregate nominal value of the share capital of our


– IV-2 –

Company in issue immediately following the completion of the Share Offer and theCapitalisation Issue; and (bb) the aggregate nominal value of the share capital ofour Company which may be purchased by our Company pursuant to the authoritygranted to our Directors as referred to in paragraph (f) below, such mandate toremain in effect until whichever is the earliest of (i) the conclusion of the nextannual general meeting of our Company, (ii) the expiration of the period withinwhich the next annual general meeting of our Company is required by the Articlesor any applicable laws to be held, or (iii) the passing of an ordinary resolution byour Shareholders at a general meeting revoking, varying or renewing such mandate;

(f) a general unconditional mandate (the ‘‘Repurchase Mandate’’) was given to ourDirectors to exercise all powers of our Company to repurchase on the StockExchange, Shares with an aggregate nominal value not exceeding 10% of theaggregate nominal value of the share capital of our Company in issue immediatelyfollowing completion of the Share Offer and the Capitalisation Issue, such mandateto remain in effect until whichever is the earliest of (i) the conclusion of the nextannual general meeting of our Company, (ii) the expiration of the period withinwhich the next annual general meeting of our Company is required by the Articlesor any applicable laws to be held, or (iii) the passing of an ordinary resolution byour Shareholders at a general meeting revoking, varying or renewing such mandate;and

(g) the general mandate as stated in paragraph (e) above shall be extended by theaddition to the aggregate nominal value of the share capital in issue of ourCompany which may be allotted or agreed conditionally or unconditionally to beallotted by our Directors pursuant to such general mandate of an amountrepresenting the aggregate nominal value of the share capital of our Companyrepurchased by our Company pursuant to and in accordance with the authoritygranted under paragraph (f) provided that such extended amount shall not exceed10% of the aggregate nominal value of the share capital of our Company in issueimmediately following the completion of the Share Offer.

(h) the Share Option Scheme, the principal terms of which are set out in the paragraphheaded ‘‘D. Share Option Scheme’’ below in this section, were approved andadopted and the Directors or any committee established by our Board wereauthorised, at their sole discretion, to (aa) administer the Share Option Scheme;(bb) modify/amend the Share Option Scheme from time to time as required by theStock Exchange; (cc) grant Share Options to subscribe for Shares under the ShareOption Scheme up to the limits referred to in the Share Option Scheme; (dd) allot,issue and deal with the Shares pursuant to the exercise of any of the Share Optionswhich may be granted under the Share Option Scheme; (ee) make application at theappropriate time or times to the Stock Exchange for the listing of, and permissionto deal in, any Shares or any part thereof that may hereafter from time to time beissued and allotted pursuant to the exercise of the Share Options which may begranted under the Share Option Scheme; and (ff) take all such actions as theyconsider necessary, desirable or expedient to implement or give effect to the ShareOption Scheme; and


– IV-3 –

4. Reorganisation

The companies comprising our Group underwent the Reorganisation in preparation forthe Listing. For further information relating to the Reorganisation, please refer to the sectionheaded ‘‘History, Reorganisation and Corporate Development — Reorganisation’’ in thisprospectus.

5. Changes in share capital of subsidiaries in our Company

Subsidiaries of our Company are listed in the Accountant’s Report set out in Appendix Ito this prospectus.

Save as disclosed in the section headed ‘‘History, Reorganisation and CorporateDevelopment’’ in this prospectus, there has been no alteration in the share capital of any ofthe subsidiaries of our Company within the two years immediately preceding the date of thisprospectus.

6. Repurchase by our Company of its own securities

This paragraph contains information required by the Stock Exchange to be included inthis prospectus concerning the repurchase by our Company of our own securities.

(a) Provision of the GEM Listing Rules

Subject to certain restrictions, the GEM Listing Rules permit companies whoseprimary listings are on the Stock Exchange to repurchase their own securities on theStock Exchange, the most important of which are summarised below.

(i) Shareholders’ approval

The GEM Listing Rules provide that all proposed repurchases of securities bya company with its primary listing on the Stock Exchange must be approved inadvance by an ordinary resolution of the shareholders in general meeting, either byway of a specific approval of a specific transaction, or by way of a generalmandate.

A share repurchase mandate (the ‘‘Share Repurchase Mandate’’) wasgranted to our Directors by our Shareholder pursuant to a written resolution of theShareholders of our Company dated 23 October 2017 authorising them to exerciseall powers of our Company to purchase Shares with an aggregate nominal amountof not exceeding 10% of the aggregate nominal amount of the share capital of ourCompany in issue immediately following completion of the Share Offer andCapitalisation Issue until the conclusion of the next annual general meeting of ourCompany, or the date by which the next annual general meeting of our Company isrequired by the Articles or any applicable law to be held, or the passing of anordinary resolution by our Shareholders in general meeting revoking or varying theauthority given to our Directors, whichever is the earliest.


– IV-4 –

(ii) Source of funds

Any repurchases of securities of our Company must be financed out of fundslegally available for the purpose in accordance with the GEM Listing Rules, theArticles and the applicable laws and regulations. A listed company may notrepurchase its own securities on the Stock Exchange for a consideration other thancash or for settlement otherwise than in accordance with the trading rules of theStock Exchange.

(1) Reasons for repurchases

Our Directors believe that it is in the best interests of our Company andthe Shareholders for our Directors to have general authority from theShareholders to enable our Company to repurchase Shares in the market. Suchrepurchases may, depending on the market conditions and fundingarrangements at the time, lead to an enhancement of the net asset value perShare and/or the earnings per Share. Repurchases of Shares will only be madeif our Directors believe that such repurchases will benefit our Company andthe Shareholders.

(2) Funding of repurchase

Under the Cayman Companies Law, any repurchases by our Companymay be made either (1) out of profits of our Company; (2) out of the sharepremium account of our Company; (3) out of the proceeds of a fresh issue ofShares made for the purpose of the repurchase; or (4) out of capital, if soauthorised by the Articles and subject to the provisions of the CaymanCompanies Laws. In the case of any premium payable over the par value ofthe Shares to be repurchased on the repurchase, such premium must beprovided out of either or both of the profits of our Company or the sharepremium account of our Company, or out of capital, if so authorised by theArticles and subject to the provisions of the Cayman Companies Laws.

Our Directors do not propose to exercise the Share Repurchase Mandateto such an extent that would have a material adverse effect on the workingcapital position of our Company or the gearing levels which, in the opinion ofour Directors, are appropriate for our Company from time to time.

(iii) Trading restrictions

Our Company may repurchase up to 10% of the aggregate nominal amount ofthe share capital of our Company in issue immediately following completion of theShare Offer and Capitalisation Issue. Our Company may not issue or announce aproposed issue of Shares for a period of 30 days immediately following arepurchase of Shares, without the prior approval of the Stock Exchange. OurCompany is also prohibited from repurchasing Shares on the Stock Exchange if therepurchase would result in the number of Shares which are in the hands of thepublic falling below the relevant prescribed minimum percentage as required by


– IV-5 –

the Stock Exchange. Our Company is required to procure that the broker appointedby it to effect a repurchase of Shares discloses to the Stock Exchange suchinformation with respect to the repurchases as the Stock Exchange may request.Our Company also shall not purchase our Shares on the Stock Exchange if thepurchase price is higher by 5% or more than the average closing market price forthe five preceding trading days on which the Shares were traded on the StockExchange.

(iv) Status of repurchased shares

All repurchased Shares (whether effected on the Stock Exchange orotherwise) will be automatically delisted and the certificates for those Shares willbe cancelled and destroyed. Under the Cayman Companies Law, our Company’srepurchased Shares shall be treated as cancelled on repurchase and the amount ofour Company’s issued share capital shall be diminished by the aggregate nominalvalue of the repurchased Shares (although the authorised share capital of ourCompany will not be reduced as a result of the repurchase).

(v) Suspension of repurchases

Pursuant to the GEM Listing Rules, our Company may not make anyrepurchases of Shares after inside information has come to its knowledge until theinformation has been made publicly available. In particular, under the requirementsof the GEM Listing Rules in force as of the date hereof, during the period of onemonth immediately preceding the earlier of: (i) the date of the Board meeting (assuch date is first notified to the Stock Exchange in accordance with the GEMListing Rules) for the approval of our Company’s results for any year, half year,quarter-year period or any other interim period (whether or not required by theGEM Listing Rules); and (ii) the deadline for our Company to publish anannouncement of its results for any year, or half-year or quarter-year period underthe GEM Listing Rules, or any other interim period (whether or not required underthe GEM Listing Rules), and in each case ending on the date of the resultsannouncement, our Company may not repurchase Shares on the Stock Exchangeunless the circumstances are exceptional. In addition, the Stock Exchange mayprohibit a repurchase of the Shares on the Stock Exchange if our Company hasbreached the GEM Listing Rules.

(vi) Procedural and reporting requirements

As required by the GEM Listing Rules, repurchases of Shares on the StockExchange or otherwise must be reported to the Stock Exchange no later than 30minutes before the earlier of the commencement of the morning trading session orany pre-opening session on the Stock Exchange business day following any day onwhich our Company may make a purchase of Shares, reporting the total number ofShares purchased the previous day, the purchase price per Share or the highest andlowest prices paid for such purchases, where relevant. In addition, our Company’sannual report is required to disclose details regarding repurchases of Shares madeduring the year, including the number of Shares repurchased each month, the


– IV-6 –

purchase price per Share or the highest and lowest price paid for all suchpurchases, where relevant, and the aggregate price paid. The directors’ report shallcontain reference to the purchases made during the year and the directors reasonsfor making such purchases.

(vii) Core connected persons

The GEM Listing Rules prohibit our Company from knowingly repurchasingthe Shares on the Stock Exchange from a ‘‘core connected person’’ which includesa Director, chief executive or substantial Shareholder of our Company or any ofthe subsidiaries or a close associate of any of them and a core connected personshall not knowingly sell Shares to our Company.

(b) Reasons for repurchases

Our Directors believe that it is in our and our Shareholders’ best interests for ourDirectors to have general authority from the Shareholders to enable our Company toexecute repurchases of the Shares in the market. Such repurchases may, depending onmarket conditions and funding arrangements at the time, lead to an enhancement of thenet asset value per Share and/or earnings per Share and will only be made where ourDirectors believe that such repurchases will benefit us and our Shareholders.

(c) Funding of repurchases

In repurchasing securities, our Company may only apply funds lawfully availablefor such purpose in accordance with the Memorandum, the Articles, the GEM ListingRules and the applicable laws and regulations of the Cayman Islands.

On the basis of our Company’s current financial position as disclosed in thisprospectus and taking into account our Company’s current working capital position, ourDirectors consider that, if the repurchase mandate were to be exercised in full, it mighthave a material adverse effect on our Company’s working capital and/or our Company’sgearing position as compared with the position disclosed in this prospectus. However,our Directors do not propose to exercise the repurchase mandate to such an extent aswould, in the circumstances, have a material adverse effect on our Company’s workingcapital requirements or the gearing levels which in the opinion of our Directors are fromtime to time appropriate for our Company.

(d) General

The exercise in full of the repurchase mandate, on the basis of 400,000,000 Sharesin issue immediately following the completion of the Capitalisation Issue and the ShareOffer (without taking into account any shares which may be issued pursuant to theexercise of any options which may be granted under the Shares Option Scheme), couldaccordingly result in up to approximately 40,000,000 Shares being repurchased by ourCompany during the period prior to:

(i) the conclusion of our next annual general meeting of our Company; or


– IV-7 –

(ii) the end of the period within which we are required by any applicable law orour Articles to hold our next annual general meeting; or

(iii) when varied or revoked by an ordinary resolution of our Shareholders ingeneral meeting, whichever is the earliest.

None of our Directors, to the best of their knowledge and having made allreasonable enquiries, nor any of their close associates (as defined in the GEM ListingRules), have any present intention, if the Share Repurchase Mandate is exercised, to sellany Shares to our Company or our subsidiaries.

Our Directors have undertaken to the Stock Exchange that, so far as the same maybe applicable, they will exercise the Share Repurchase Mandate in accordance with theGEM Listing Rules, the Articles and the applicable laws and regulations.

If, as a result of any repurchase of Shares, a Shareholder’s proportionate interest inthe voting rights of our Company is increased, such increase will be treated as anacquisition of voting rights for the purpose of the Takeovers Code. Accordingly, aShareholder, or a group of Shareholders acting in concert (as defined in the TakeoversCode), depending on the level of increase of the Shareholder’s interest, could obtain orconsolidate control of our Company and become obliged to make a mandatory offer inaccordance with Rule 26 of the Takeovers Code. Save as aforesaid, our Directors are notaware of any other consequences which would arise under the Takeovers Code as aconsequence of any repurchases of Shares pursuant to the Share Repurchase Mandate.

Our Company is prohibited from knowingly purchasing securities on the StockExchange from a core connected person (as defined in the GEM Listing Rules) and suchperson is prohibited from knowingly selling his/her securities to our Company.

No core connected persons (as defined in the GEM Listing Rules) of our Companyhave notified us of intention to sell securities to our Company and such persons haveundertaken not to sell any such securities to our Company, if the Share RepurchaseMandate is exercised.

B. FURTHER INFORMATION ABOUT THE BUSINESS OF OUR GROUP

1. Summary of material contracts

The following material contracts (not being contracts in the ordinary course of business)have been entered into by members of our Group within the two years immediately precedingthe date of this prospectus, and are or may be material:

(a) a share swap agreement dated 1 March 2017 entered into between Luck HealthInvestments Limited (易方投資有限公司), Fineland Assets Management HoldingsLimited, Fineland Assets Management Holdings Group Limited, Mansion GreenHoldings Limited, Mr. Fong Ming (方明) and Ms. Tse Lai Wa (謝麗華), pursuantto which Luck Health Investments Limited and Ms. Tse Lai Wa transferred theirrespective seven shares and three shares in Fineland Assets Management Company


– IV-8 –

Limited to Fineland Assets Management Holdings Limited in consideration of andexchange for (i) the allotment and issue by Fineland Assets Management HoldingsLimited of 199 paid ordinary shares in Fineland Assets Management HoldingsLimited credited as fully paid to Fineland Assets Management Holdings GroupLimited; (ii) the allotment and issue by Fineland Assets Management HoldingsGroup Limited of 199 paid ordinary shares in Fineland Assets ManagementHoldings Group Limited credited as fully paid to Mansion Green Holdings Limitedand credit as fully paid at par value one nil paid ordinary share in Fineland AssetsManagement Holdings Group Limited registered in the name of Mansion GreenHoldings Limited; and (iii) the allotment and issue of 63 ordinary shares and 27ordinary shares in Mansion Green Holdings Limited by Mansion Green HoldingsLimited credited as fully paid to Stand Smooth Group Limited (as nominee of LuckHealth Investments Limited (易方投資有限公司)) and Aspiring Vision HoldingsLimited (as nominee of Ms. Tse Lai Wa (謝麗華)), respectively;

(b) a trademark licence deed (商標使用許可契據) dated 11 October 2017 entered intobetween 方圓地產控股有限公司 (Fineland Real Estate Holdings CompanyLimited) as licensor and 方圓房地產服務集團有限公司 (Fineland Real EstateServices Group Limited) as licensee, pursuant to which 方圓地產控股有限公司

(Fineland Real Estate Holdings Company Limited) irrevocably granted anexclusive license to 方圓房地產服務集團有限公司 (Fineland Real Estate ServicesGroup Limited) at nil consideration to use certain trademarks registered in HongKong as specified therein;

(c) a trademark licence agreement (商標使用許可協議) dated 11 October 2017 enteredinto between 方圓地產控股有限公司 (Fineland Real Estate Holdings CompanyLimited) as licensor and 方圓房地產服務集團有限公司 (Fineland Real EstateServices Group Limited) as licensee, pursuant to which 方圓地產控股有限公司

(Fineland Real Estate Holdings Company Limited) irrevocably granted anexclusive license to 方圓房地產服務集團有限公司 (Fineland Real Estate ServicesGroup Limited) at nil consideration to use certain trademarks registered in thePeople’s Republic of China as specified therein;

(d) a deed of non-competition dated 23 October 2017 and executed by Fong Ming (方明), Tse Lai Wa (謝麗華), Mansion Green Holdings Limited, Stand Smooth GroupLimited, Aspiring Vision Holdings Limited, Hero Dragon Management Limited,Fineland Real Estate Holdings Company Limited and Widethrive InvestmentsLimited in favor of Fineland Real Estate Services Group Limited (方圓房地產服務

集團有限公司) (for itself and as trustee for its subsidiaries), particulars of whichare set out in the section headed ‘‘Relationship with Controlling Shareholders —

Non-compete Undertakings’’;

(e) a deed of indemnity dated 23 October 2017 and executed by Fong Ming (方明),Tse Lai Wa (謝麗華), Mansion Green Holdings Limited, Stand Smooth GroupLimited, Aspiring Vision Holdings Limited, Hero Dragon Management Limited,Fineland Real Estate Holdings Company Limited and Widethrive InvestmentsLimited in favor of Fineland Real Estate Services Group Limited (方圓房地產服務

集團有限公司) (for itself and as trustee for its subsidiaries), particulars of whichare set out in the paragraph headed ‘‘E. Other information — 1. Estate duty, taxand other indemnities’’ in this section of the prospectus; and


– IV-9 –

(f) the Public Offer Underwriting Agreement.

2. Summary of intellectual property rights of our Group

(a) Trademarks

As at the Latest Practicable Date, our Group have been granted a license under theTrademark License Agreements dated 11 October 2017 to the use of the followingtrademarks which we consider to be or may be material to our business:

TrademarkPlace of

RegistrationRegistrationNumber Registrant Licensee Class

RegistrationDate Expiry Date

Hong Kong 301026927(A) Fineland Real

Estate

Our Company 35, 36, 37,

42, 45

8 January 2008 7 January 2018

Hong Kong 301026927(B) Fineland Real

Estate


42, 45

8 January 2008 7 January 2018

Hong Kong 301068345(A) Fineland Real

Estate


42, 45

10 March 2008 9 March 2018

Hong Kong 301068345(B) Fineland Real

Estate


42, 45

10 March 2008 9 March 2018

Hong Kong 301068381AB(B) Fineland Real

Estate


42, 45

10 March 2008 9 March 2018

PRC 5958407 Fineland Real

Estate

Our Company 36 21 February

2010

20 February

2020

PRC 6611216 Fineland Real

Estate

Our Company 36 14 April 2010 13 April 2020

(b) Domain names

As at the Latest Practicable Date, our Group has registered the following domainnames which, in the opinion of our Directors, are material to our business:

Domain name Registrant Term/Expiry Date

www.fangyb.cn Fang Yuan Bao 11 November 2024

www.fydc.cn Guangzhou Fineland Property

Consultancy

19 August 2019

www.fy15.com.cn Guangzhou Fineland Property

Consultancy

20 May 2021

www.finelandassets.com Guangzhou Fineland Property

Consultancy

2 December 2021


– IV-10 –

C. FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIALSHAREHOLDERS

1. Interests and short positions of Directors and the chief executives of our Companyin the Shares, underlying Shares or debentures of our Company and its associatedcorporations

Immediately following completion of the Capitalisation Issue and the Share Offer (butwithout taking into account any shares to be issued upon exercise of the options that havebeen or may be granted under the Share Option Scheme), the interests or short positions ofeach of our Directors and our chief executive in the Shares, underlying Shares and debenturesof our Company or our associated corporations (within the meaning of Part XV of the SFO)which will have to be notified to our Company and the Stock Exchange pursuant to Divisions7 and 8 of Part XV of the SFO (including interests and short positions which they were takenor deemed to have taken under such provisions of the SFO) or which will be required,pursuant to section 352 of the SFO, to be entered in the register referred to therein, or whichwill be required to be notified to our Company and the Stock Exchange pursuant to the Rules5.46 to 5.67 of the GEM Listing Rules, will be as follows:

Name Nature of Interest

Number of

Shares held

Approximate

percentage of

shareholding

Mr. Fong Ming(2) Interest in controlled

corporation

216,000,000 (L)(1) 54%

Ms. Tse Lai Wa(2) Interest in controlled

corporation

216,000,000 (L)(1) 54%

Ms. Rong Haiming(3) Interest in controlled

corporation

24,000,000 (L)(1) 6%

Notes:

1. The letter ‘‘L’’ denotes long position (as defined under part XV of the SFO) in such Shares.

2. Mansion Green is the registered owner of 216,000,000 Shares, representing 54% of our issued sharecapital immediately upon completion of the Share Offer and Capitalisation Issue (without taking intoany account any Shares will may be issued upon exercise of any option which may be granted underthe Share Option Scheme). Mansion Green is owned as to 30% by Aspiring Vision, which is in turndirect wholly-owned by Ms. Tse, and as to 70% by Stand Smooth. Stand Smooth is wholly owned byHero Dragon, which is wholly-owned by Fineland Real Estate, which in turn is wholly owned byWidethrive Investments, and ultimately wholly-owned by Mr. Fong. Accordingly, WidethriveInvestments, Fineland Real Estate, Hero Dragon, Stand Smooth, Aspiring Vision, Mr. Fong and Ms.Tse is therefore deemed to be interested in the same number of Shares as to which Mansion Green isinterested under the SFO.

3. Metropolitan Dawn is the registered owner of 24,000,000 Shares, representing 6% of our issued sharecapital immediately upon completion of the Share Offer and Capitalisation Issue (without taking intoany account any Shares will may be issued upon exercise of any option which may be granted underthe Share Option Scheme). Metropolitan Dawn is wholly-owned by Ms. Rong. Ms. Rong is thereforedeemed to be interested in the same number of Shares as to which Metropolitan Dawn is interestedunder the SFO.


– IV-11 –

2. Interests and/or short positions of substantial shareholders in the Shares, andunderlying Shares of our Company and its associated corporations

So far as our Directors are aware, immediately following completion of theCapitalisation Issue and the Share Offer (but without taking into account any shares to beissued upon exercise of the options that have been or may be granted under the Share OptionScheme), the following persons will have an interest or a short position in the Shares orunderlying Shares which would fall to be disclosed to our Company and the Stock Exchangeunder the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who are, directly orindirectly, interested in 10% or more of the nominal value of any class of share capitalcarrying rights to vote in all circumstances at general meetings of any other member of ourGroup:


Number of

Shares held

Approximate

percentage of

shareholding

Mr. Fong Interested in a controlled

corporation

216,000,000 54%

He Kangkang (何康康)(1) Interest of spouse 216,000,000 54%

Ms. Tse Interested in a controlled

corporation

216,000,000 54%

Zheng Muming (鄭木明)(2) Interest of spouse 216,000,000 54%

Ms. Rong Interested in a controlled

corporation

24,000,000 6%

Wang Haihui (王海暉)(3) Interest of spouse 24,000,000 6%

Mansion Green(4) Legal and beneficial owner 216,000,000 54%

Widethrive Investments Interested in a controlled

corporation

216,000,000 54%

Fineland Real Estate Interested in a controlled

corporation

216,000,000 54%

Hero Dragon Interested in a controlled

corporation

216,000,000 54%

Stand Smooth Interested in a controlled

corporation

24,000,000 54%

Aspiring Vision Interested in a controlled

corporation

216,000,000 54%


– IV-12 –


Number of

Shares held

Approximate

percentage of

shareholding

Metropolitan Dawn(5) Legal and beneficial owner 24,000,000 6%

Notes:

(1) Ms. He Kangkang (何康康) is the spouse of Mr. Fong. Under the SFO, Ms. He Kangkang (何康康) is

deemed to be interested in the same number of Shares in which Mr. Fong is interested in.

(2) Mr. Zheng Muming (鄭木明) is the spouse of Ms. Tse. Under the SFO, Mr. Zheng Muming (鄭木明)

is deemed to be interested in the same number of Shares in which Ms. Tse is interested in.

(3) Mr. Wang Haihui (王海暉) is the spouse of Ms. Rong. Under the SFO, Mr. Wang Haihui (王海暉) is

deemed to be interested in the same number of Shares in which Ms. Tse is interested in.

(4) Mansion Green is the registered owner of 216,000,000 Shares, representing 54% of our issued share

capital immediately upon completion of the Share Offer and Capitalisation Issue (without taking into

any account any Shares will may be issued upon exercise of any option which may be granted under

the Share Option Scheme). Mansion Green is owned as to 30% by Aspiring Vision, which is in turn

direct wholly-owned by Ms. Tse, and as to 70% by Stand Smooth. Stand Smooth is wholly owned by

Hero Dragon, which is wholly-owned by Fineland Real Estate, which in turn is wholly owned by

Widethrive Investments, and ultimately wholly-owned by Mr. Fong. Accordingly, Widethrive

Investments, Fineland Real Estate, Hero Dragon, Stand Smooth, Aspiring Vision, Mr. Fong and Ms.

Tse is therefore deemed to be interested in the same number of Shares as to which Mansion Green is

interested under the SFO.

(5) Metropolitan Dawn is the registered owner of 24,000,000 Shares, representing 6% of our issued share

capital immediately upon completion of the Share Offer and Capitalisation Issue (without taking into

any account any Shares will may be issued upon exercise of any option which may be granted under

the Share Option Scheme). Metropolitan Dawn is wholly-owned by Ms. Rong. Ms. Rong is therefore

deemed to be interested in the same number of Shares as to which Metropolitan Dawn is interested

under the SFO.


– IV-13 –

3. Particulars of Directors’ service agreements and letters of appointment

(a) Executive Directors

Each of our executive Director Ms. Rong, Mr. Yi and Ms. Tse has on 23 October2017 entered into a service agreement with our Company regarding their appointment asexecutive Directors for an initial term of three years commencing from the Listing Dateunless terminated by not less than six months prior written notice or otherwise inaccordance with the service agreement. According to the terms of the serviceagreements entered into between our Company and the executive Directors, the annualremuneration (excluding discretionary and performance bonuses) of our executiveDirectors is as follows:

Name

Salaries and

allowances

(RMB)

Rong Haiming 540,000

Yi Ruofeng 504,000

Tse Lai Wa 120,000

The basic monthly salary payable by our Company to our relevant executiveDirector is subject to annual review by our Board and the remuneration committee ofour Company.

Our executive Director will be entitled to a discretionary bonus and a performancebonus as may be determined by the remuneration committee of our Company from timeto time by reference to the financial performance of our Company as well as theindividual performance of the relevant executive Director.

(b) Non-executive Director and independent non-executive Directors

Each of our non-executive Director has signed a letter of appointment dated 23October 2017 with our Company for an initial term of three years. Each of ourindependent non-executive Directors has signed a letter of appointment dated 23October 2017 with our Company for an initial term of one year.

The annual director’s fees payable by our Company to each of our non-executiveDirector is RMB120,000. The annual directors’ fees payable by our Company to ourindependent non-executive Directors are an aggregate amount of approximatelyHK$540,000 according to the letters of appointment.

Save as disclosed in this section, none of our Directors has entered or is proposedto enter into a service agreement with any member of our Group (excluding contractsexpiring or determinable by the employer within one year without payment ofcompensation (other than statutory compensation)).


– IV-14 –

4. Directors’ remuneration

Our Company’s policies concerning remuneration of executive Directors are (i) theamount of remuneration is determined on the basis of the relevant Directors’ experience,responsibility, workload and the time devoted to our Company; and (ii) non-cash benefitsmay be provided to the Directors under their remuneration package.

For the two years ended 31 December 2016 and the four months ended 30 April 2017,the total remuneration (including salaries and allowances, discretionary bonus andcontributions to pension scheme) paid to our Directors by our Group was approximatelyRMB1.3 million, RMB1.5 million, and RMB0.5 million, respectively.

For the two years ended 31 December 2016 and the four months ended 30 April 2017,the total remuneration (including salaries and bonus, allowances, and pension schemecontributions) paid to our Group’s five highest paid individuals, excluding our Directors, wasapproximately RMB3.1 million, RMB4.0 million, and RMB1.2 million, respectively.

During the Track Record Period, no remuneration was paid by us to, or receivable by,our Directors or the five highest paid individuals as an inducement to join or upon joiningour Company. No compensation was paid by us to, or receivable by, our Directors or formerDirectors or the five highest paid individuals for each of the years during the Track RecordPeriod for the loss of any office in connection with the management of the affairs of anysubsidiary of our Company.

There was no arrangement under which a director waived or agreed to waive anyemoluments for the Track Record Period.

Save as disclosed in the paragraph headed ‘‘Directors, Senior Management andEmployees — remuneration of Directors and Senior Management’’ and this section, no otherpayments has been made or are payable in respect of the Track Record Period by any memberof our Group to any of our Directors.

Pursuant to the current arrangements in force, it is anticipated that, for the year ending31 December 2017, an aggregate amount of approximately RMB3.0 million will be payable toour Directors as remuneration and benefits in kind (excluding any commission ordiscretionary bonus) by our Group.

5. Agency fees or commissions received

Save as disclosed in the paragraph headed ‘‘Underwriting — Underwriting arrangementand expenses — Commission and expenses’’ in this prospectus, within the two yearsimmediately preceding the date of this prospectus, no commissions, discounts, brokerages orother special terms have been granted in connection with the issue or sale of any share orloan capital of our Company or any of our subsidiaries.


– IV-15 –

6. Related party transaction

Save as disclosed in Note 23 to the Accountant’s Report set out in Appendix I to thisprospectus, for the two years ended 31 December 2016 and the four months ended 30 April2017, our Group has not engaged in any other material related party transactions.

7. Disclaimers

Save as disclosed in this appendix and the section head ‘‘Connected transactions’’ in thisprospectus:

(a) our Directors are not aware of any person (other than our Directors or the chiefexecutive of our Company) who will, immediately following completion of theShare Offer (but without taking into account any shares to be issued upon exerciseof the options that have been or may be granted under the Share Option Scheme),have an interest and/or a short position in the Shares or underlying Shares whichwould fall to be disclosed to our Company under the provisions of Divisions 2 and3 of Part XV of the SFO (including interests and/or short positions which they aredeemed to have under such provisions of the SFO) or who will, either directly orindirectly, be expected to be interested in 10% or more of nominal value of anyclass of share capital carrying rights to vote in all circumstances at generalmeetings of our Company or any other member of our Group;

(b) none of our Directors or the chief executives of our Company had any interest orshort position in any of the Shares, underlying Shares or debentures of ourCompany or any of its associated corporations (within the meaning of Part XV ofthe SFO) which will have to be notified to our Company and the Stock Exchangepursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and shortpositions which they are deemed to have under such provisions of the SFO), orwhich will be required, pursuant to section 352 of the SFO, to be entered in theregister referred to therein, or which will be required to be notified to us and theStock Exchange pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules, in eachcase once the Shares are listed;

(c) none of our Directors nor any of the persons whose names are listed in theparagraph headed ‘‘E. Other information — 9. Qualifications of experts’’ in thissection was directly or indirectly interested in the promotion of our Company, orhas any direct or indirect interest in any assets which have been acquired ordisposed of by or leased to our Company or any of its subsidiaries, within the twoyears immediately preceding the date of this prospectus, or were proposed to beacquired or disposed of by or leased to our Company or any of its subsidiaries norwill any Director apply for Offer Shares either in his own name or in the name of anominee;

(d) none of the persons whose names are listed in the paragraph headed ‘‘E. Otherinformation — 9. Qualifications of experts’’ in this section is materially interestedin any contract or arrangement subsisting at the date of this prospectus which wassignificant in relation to the business of our Group;


– IV-16 –

(e) none of our Directors nor any of the persons whose names are listed in theparagraph headed ‘‘E. Other information — 9. Qualifications of experts’’ in thissection has received any agency fee, commissions, discounts, brokerage or otherspecial terms from our Group within the two years immediately preceding the dateof this prospectus in connection with the issue or sale of any capital of anymember of our Group;

(f) save as disclosed in the section headed ‘‘Connected Transactions’’ in thisprospectus, none of our Directors is materially interested in any contract orarrangement subsisting at the date of this prospectus which is significant in relationto the business of our Group taken; and

(g) none of the parties listed in the paragraph headed ‘‘E. Other information — 9.Qualifications of experts’’ in this section:

(i) are interested legally or beneficially in any securities of any member of ourGroup; and

(ii) has any right (whether legally enforceable or not) to subscribe for or tonominate persons to subscribe for securities of any member of our Group.

D. SHARE OPTION SCHEME

Application has been made to the Listing Committee for the listing of and permission to dealin 40,000,000 Shares, representing 10% of our Company’s issued share capital as at the ListingDate, which may fall to be issued pursuant to the exercise of the Share Options granted under theShare Option Scheme. As at the date of this prospectus, no Share Option has been granted oragreed to be granted under the Share Option Scheme.

The following is a summary of the principal terms of the Share Option Scheme adoptedpursuant to the resolutions of our Shareholders passed on 23 October 2017 and adopted by a Boardmeeting on 23 October 2017. The terms of the Share Option Scheme are in compliance with theprovisions of the GEM Listing Rules:

1. Purpose of the Share Option Scheme

The purpose of the Share Option Scheme is to enable our Group to grant Share Optionsto the eligible persons as incentives or rewards for their contribution to our Group and/or toenable our Group to recruit and retain high-calibre employees and attract human resourcesthat are valuable to our Group or any entity in which any member of our Group holds anyequity interest (the ‘‘Invested Entity’’). As at the Latest Practicable Date, there was noInvested Entity other than members of our Group, and our Group has not identified anypotential Invested Entity for investment.


– IV-17 –

2. Who may join and basis for determining eligibility

The Board may, at its absolute discretion, offer eligible persons (being any director oremployee (whether full time or part time), consultant or adviser of our Group who in the solediscretion of the Board has contributed to and/or will contribute to our Group) (the ‘‘EligiblePersons’’) to subscribe for such number of Shares in accordance with the terms of the ShareOption Scheme.

3. Grant of options

(a) On and subject to the terms of the Share Option Scheme, our Board shall beentitled at any time on a business day within ten years commencing on theeffective date of the Share Option Scheme to offer the grant of a Share Option toany Eligible Person as our Board may in its absolute discretion select inaccordance with the eligibility criteria set out in the Share Option Scheme. Anoffer shall be accepted when we receive the duly signed offer letter together with anon-refundable payment of HK$1.00 (or such other sum in any currency as ourBoard may determine).

(b) Subject to the provisions of the Share Option Scheme, the GEM Listing Rules andany relevant laws and regulations, our Board may, on a case by case basis and atits discretion when offering the grant of a Share Option, impose any conditions,restrictions or limitations in relation thereto additional to those expressly set forthin the Share Option Scheme as it may think fit (which shall be stated in the lettercontaining the offer of the grant of the Share Option) including (without prejudiceto the generality of the foregoing):

(i) the continuing eligibility of the grantee under the Share Option Scheme, andin particular, where our Board resolves that the grantee has failed orotherwise is or has been unable to meet the continuing eligibility criteria, theoption (to the extent it has not already been exercised) shall lapse, subject tothe requirements in paragraph 9 below;

(ii) the continuing compliance of any such terms and conditions that may beattached to the grant of the option, failing which the option (to the extent thatit has not already been exercised) shall lapse unless otherwise resolved to thecontrary by our Board, subject to the requirements in paragraph 9 below;

(iii) in the event that the Eligible Person is a corporation, that any change of themanagement and/or shareholding of the Eligible Person shall constitute afailure to meet the continuing eligibility criteria under the Share OptionScheme;

(iv) in the event that the Eligible Person is a trust, that any change of thebeneficiary of the Eligible Person shall constitute a failure to meet thecontinuing eligibility criteria under the Share Option Scheme.


– IV-18 –

(c) Our Board shall not offer the grant of a Share Option to any Eligible Person:

(i) after a price sensitive development has occurred or a price sensitive matterhas been the subject of a decision, until such price sensitive information hasbeen announced pursuant to the relevant requirements of the GEM ListingRules; or

(ii) within the period commencing one month immediately preceding the earlierof:

(1) the date of the Board meeting (as such date is first notified to the StockExchange in accordance with the GEM Listing Rules for the approval ofour Company’s results for any year, half-year, quarterly or any otherinterim period (whether or not required under the GEM Listing Rules);and

(2) deadline for our Company to publish an announcement of its result forany year, half-year under the GEM Listing Rules, or quarterly or anyother interim period (whether or not required under the GEM ListingRules), and ending on the date of the results announcement. The periodduring which no Share Option may be granted will cover any period ofdelay in the publication of a results announcement.

(d) Any grant of Share Options to any Director, substantial Shareholder, chiefexecutive of our Company or their respective associates must be approved by all ofour Company’s independent non-executive Directors (excluding any independentnon-executive Director who is a proposed grantee).

4. Exercise Price

The exercise price for any Share under the Share Option Scheme shall be a pricedetermined by our Board and notified to each grantee and shall be not less than the highest of(i) the closing price of a Share as stated in the Stock Exchange’s daily quotations sheet on thedate of grant of the relevant option, which must be a business day, (ii) an amount equivalentto the average closing price of a Share as stated in the Stock Exchange’s daily quotationsheets for the five business days immediately preceding the date of grant of the relevantoption and (iii) the nominal value of a Share on the date of grant. The exercise price shallalso be subject to any adjustments made in a situation contemplated under paragraph 10below.

5. Maximum number of Shares

(a) The maximum aggregate number of Shares which may be issued upon exercise ofall outstanding Share Options granted and yet to be exercised under the ShareOption Scheme and any other share option schemes of our Company, must not, inaggregate, exceed 10% of the total number of Shares in issue from time to time.


– IV-19 –

No Share Options may be granted under the Share Option Scheme and any othershare option schemes of our Company if this will result in such limit beingexceeded.

(b) The maximum number of Shares in respect of which options may be granted underthe Share Option Scheme and any other share option schemes involving the issueor grant of options or similar rights over Shares or other securities by ourCompany shall not, in aggregate, exceed 10% of the issued share capital of ourCompany as at the Listing Date (without taking into account the Shares which maybe issued and allotted pursuant to the exercise of the options which may be grantedunder the Share Option Scheme) (the ‘‘Scheme Mandate Limit’’) unlessShareholders’ approval has been obtained pursuant to sub-paragraph (d) below.

(c) The Scheme Mandate Limit may be renewed by the Shareholders of our Companyin general meeting from time to time provided always that the Scheme MandateLimit so renewed must not exceed 10% of the issued share capital of our Companyas at the date of the approval of such renewal by the shareholders of our Companyin general meeting. Upon such renewal, all Share Options granted under the ShareOption Scheme and any other share options schemes of our Company (includingthose exercised, outstanding, cancelled, lapsed in accordance with the Share OptionScheme or any other share options of our Company) prior to the approval of suchrenewal shall not be counted for the purpose of calculating the Scheme MandateLimit. A circular must be sent to the Shareholders of our Company containing suchrelevant information from time to time as required by the GEM Listing Rules.

(d) Our Board may seek separate Shareholders’ approval in general meeting to grantoptions beyond the Scheme Mandate Limit provided that the Share Options inexcess of the Scheme Mandate Limit are granted only to the Eligible Personsspecifically identified by our Company before such approval is sought and ourCompany must issue a circular to the Shareholders of our Company containingsuch relevant information from time to time as required by the GEM Listing Rulesin relation to any such proposed grant to such Eligible Persons.

(e) No Share Option may be granted to any Eligible Person which, if exercised in full,would result in the total number of Shares issued and to be issued upon exercise ofthe options already granted or to be granted to such Eligible Person under theShare Option Scheme (including exercised, cancelled and outstanding shareoptions) in the twelve-month period up to and including the date of such newgrant exceeding 1% in aggregate of the issued share capital of our Company as atthe date of such grant. Any grant of further share options above this limit shall besubject to certain requirements provided under the GEM Listing Rules.

(f) The maximum number of Shares referred to in sub-paragraph (a) shall be adjusted,in such manner as our Company’s auditors or our Company’s independent financialadviser shall confirm in writing that the adjustments satisfy the requirements setforth in paragraph 10.


– IV-20 –

6. Time of exercise of option

(a) Subject to certain restrictions contained in the Share Option Scheme, a ShareOption may be exercised in accordance with the terms of the Share Option Schemeand the terms of grant thereof at any time during the applicable option period,which is not more than ten years from the date of grant of option.

(b) There is no general requirement on the minimum period for which a Share Optionmust be held or the performance targets which must be achieved before a ShareOption can be exercised under the terms of the Share Option Scheme. However, atthe time of granting any Share Option, our Board may, on a case by case basis,make such grant subject to such conditions, restrictions or limitations including(without limitation) those in relation to the minimum period of the Share Optionsto be held and/or the performance targets to be achieved as our Board maydetermine in its absolute discretion.

7. Rights are personal to grantee

A Share Option shall be personal to the grantee and shall not be assignable and nograntee shall in any way sell, transfer, charge, mortgage, encumber or create any interest infavour of any third party over or in relation to any Share Option.

8. Rights on ceasing to be an Eligible Person

Should our Board resolve that a grantee fails/has failed or otherwise is/has been unableto meet the continuing eligibility criteria under the Share Option Scheme, our Companywould (subject to any relevant laws and regulations) be entitled to deem any outstandingoption or part thereof, granted to such grantee and to the extent not already exercised, aslapsed, subject to the requirements of paragraph 9 below.

9. Rights on death/ceasing employment

(a) If the grantee (being an individual) dies before exercising the Share Option in full,his or her legal personal representative(s) may exercise the Share Option up to thegrantee’s entitlement (to the extent exercisable as at the date of his death and notexercised) within a period of twelve months following his death or such longerperiod as our Board may determine.

(b) Subject to sub-paragraphs (c) and (d), if the grantee who is an employee ceases tobe an employee for any reason other than his death, disability or the termination ofhis employment on one or more of the following grounds that:

(i) any liquidator, provisional liquidator, receiver or any person carrying out anysimilar function has been appointed anywhere in the world in respect of thewhole or any part of the asset or undertaking of the grantee (being acorporation);


– IV-21 –

(ii) the grantee (being a corporation) has ceased or suspended payment of itsdebts, become unable to pay its debts (within a meaning of section 178 of theCompanies (WUMP) Ordinance or any similar provisions under theCompanies Law) or otherwise become insolvent;

(iii) there is unsatisfied judgement, order or award outstanding against the granteeor our Company has reason to believe that the grantee is unable to pay or tohave no reasonable prospect of being able to pay his debts;

(iv) there are circumstances which entitle any person to take any action, appointany person, commence proceedings or obtain any order of the type mentionedin sub-paragraph (i) above;

(v) a bankruptcy order has been made against the grantee in any jurisdiction; or

(vi) a petition for bankruptcy has been presented against the grantee in anyjurisdiction; the grantee may exercise the Share Option (to the extentexercisable as at the date of the relevant event and not exercised) within 60days following the date of such cessation.

(c) If the grantee is an employee, director, consultant, professional, agent, partner,advisor of or contractor to our Group or its affiliate at the time of the grant of therelevant option(s) and his employment or service to our Company is terminated onthe ground of disability, the grantee may exercise the option (to the extentexercisable as at the date on which such grantee ceases to be an employee,director, consultant, professional, agent, partner, advisor of or contractor to ourGroup or its affiliate and not exercised) within six months following such cessationor such longer period as our Board may determine.

(d) If the grantee is an employee at the time of the grant of the relevant ShareOption(s), in the event that such grantee shall cease to be an employee butbecomes, or continues to be, a consultant, professional, customer, supplier, agent,partner or adviser of or contractor to our Group or an affiliate, then the option (tothe extent exercisable as at the date on which such grantee ceases to be anemployee and not exercised) shall be exercised within three months following thedate of such cessation or such longer period as our Board may determine.

(e) If the grantee is an employee at the time of the grant of the relevant ShareOption(s), in the event that such grantee shall cease to be an employee butbecomes, or continues to be, a director of our Group or an affiliate, then the ShareOption(s) (to the extent exercisable as at the date on which such grantee ceases tobe an employee and not exercised) granted prior to the date of his becoming adirector of our Group or its affiliate shall remain exercisable until its expiry inaccordance with the provisions of the Share Option Scheme and the terms andconditions upon which such Share Option(s) is granted unless our Board shalldetermine to the contrary.


– IV-22 –

(f) If the grantee, who is a director, consultant, professional, customer, supplier, agent,partner or adviser of or contractor to our Group or an affiliate but not an employee,ceasing to be a director, consultant, customer, supplier, agent, partner or adviser ofor contractor to our Group or an affiliate (as the case may be) for any reason otherthan his death (in the case of a grantee being an individual) or disability (in thecase of a grantee being a director or consultant of our Group or its affiliate), theoption (to the extent exercisable as at the date of such cessation and not exercised)shall be exercised within 30 days following the date of such cessation or suchlonger period as the Board may determine.

10. Effects of alterations to capital

In the event of any alteration in our capital structure while a Share Option remainsexercisable, and such event arises from, including a capitalisation of our Company profits orreserves, rights issue, consolidation, reclassification, subdivision or reduction of the sharecapital of our Company, such corresponding alterations (if any) shall be made to the numberor nominal amount of Shares subject to the Share Options so far as unexercised; and/or theexercise price; and/or the method of exercise of the Share Options; and/or the maximumnumber of Shares subject to the Share Option Scheme. Any adjustments required under thisparagraph must give a grantee the same proportion of the equity capital as that to which thatgrantee was previously entitled, but no such adjustments may be made to the extent thatShares would be issued at less than their nominal value or (unless with the prior approvalfrom our shareholders in general meeting) to the extent that such adjustments are made to theadvantage of the grantee. For the avoidance of doubt, the issue of securities as considerationin a transaction may not be regarded as a circumstance requiring adjustment. In respect ofany such adjustments, other than any made on a capitalisation issue, independent financialadviser appointed by our Company or our Company’s auditors must confirm to the Directorsin writing that the adjustments satisfy the requirements set out in this paragraph.

11. Rights on a Takeover

If a general offer (whether by way of takeover offer or scheme of arrangement orotherwise in like manner) is made to all the holders of Shares (or all such holders other thanthe offeror and/or any person controlled by the offeror and/or any person acting in concertwith the offeror) and such offer becomes or is declared unconditional (within the meaning ofthe Takeovers Code), the grantee shall be entitled to exercise the option (to the extentexercisable as at the date on which the general offer becomes or is declared unconditionaland not exercised) in full or in part at any time within one month after the date on which theoffer becomes or is declared unconditional (within the meaning of the Takeovers Code).

12. Rights on a Scheme of Arrangement

In the event of a compromise or arrangement between us and our members or creditorsbeing proposed in connection with a scheme for reconstruction or amalgamation of ourCompany (other than any relocation schemes as contemplated in Rule 10.18(3) of the GEMListing Rules), we shall give notice thereof to all grantees on the same date as it gives noticeof the meeting to our members or creditors to consider such a scheme of arrangement, andthereupon the grantee may, by notice in writing to our Company accompanied by the


– IV-23 –

remittance for the total exercise price payable in respect of the exercise of the relevant option(such notice to be received by our Company not later than two business days (excluding anyperiod(s) of closure of our share registers) prior to the proposed meeting) exercise the ShareOption (to the extent exercisable as at the date of the notice to the grantee and not exercised)either in full or in part and we shall, as soon as possible and in any event no later than thebusiness day (excluding any period(s) of closure of our share registers) immediately prior tothe date of the proposed meeting, allot and issue such number of Shares to the grantee whichfalls to be issued on such exercise credited as fully paid and registered the grantee as holderthereof.

13. Rights on a Voluntary Winding up

In the event notice is given by us to our Shareholders to convene a Shareholders’meeting for the purpose of considering and, if thought fit, approving a resolution tovoluntarily wind up us, we shall forthwith give notice thereof to the grantee and the granteemay, by notice in writing to our Company accompanied by the remittance for the totalexercise price payable in respect of the exercise of the relevant option (such notice to bereceived by our Company not later than two business days (excluding any period(s) ofclosure of our share registers) prior to the proposed meeting) exercise the Share Option (tothe extent exercisable as at the date of the notice to the grantee and not exercised) either infull or in part and we shall, as soon as possible and in any event no later than the businessday (excluding any period(s) of closure of our share registers) immediately prior to the dateof the proposed shareholders’ meeting, allot and issue such number of Shares to the granteewhich falls to be issued on such exercise.

14. Rights attaching to Shares upon exercise of an option

Shares allotted upon the exercise of a Share Option shall rank pari passu in all respectswith the existing fully paid Shares in issue at the date of allotment.

15. Lapse of options

A Share Option (to the extent such option has not already been exercised) shall lapseand not be exercisable on the earliest of:

(a) the expiry of the exercise period; the expiry of the periods referred to in paragraph9;

(b) the date of commencement of our Company’s winding-up in respect of the situationcontemplated in paragraph 13;

(c) the date when the proposed compromise or arrangement becomes effective inrespect of the situation contemplated in paragraph 12;

(d) the date of which the grantee who is an employee ceases to be an employee byreason of the termination of his employment on the grounds that he has been guiltyof serious misconduct or has been convicted of any criminal offence involving hisintegrity or honesty;


– IV-24 –

(e) the happening of any of the following events, unless otherwise waived by ourBoard:

(i) any liquidator, provisional liquidator, receiver or any person carrying out anysimilar function has been appointed anywhere in the world in respect of thewhole or any part of the asset or undertaking of the grantee (being acorporation);

(ii) the grantee (being a corporation) has ceased or suspended payment of itsdebts, become unable to pay its debts (within a meaning of section 178 of theCompanies (WUMP) Ordinance or any similar provisions under theCompanies Law) or otherwise become insolvent;

(iii) there is unsatisfied judgement, order or award outstanding against the granteeor our Company has reason to believe that the grantee is unable to pay or tohave no reasonable prospect of being able to pay his/her/its debts;

(iv) there are circumstances which entitle any person to take any action, appointany person, commence proceedings or obtain any order of the type mentionedin sub-paragraphs (i), (ii) and (iii) above;

(v) a bankruptcy order has been made against the grantee or any director of thegrantee (being a corporation) in any jurisdiction; or

(vi) a petition for bankruptcy has been presented against the grantee or anydirector of the grantee (being a corporation) in any jurisdiction;

(f) the date on which a situation as contemplated under paragraph 7 arises;

(g) the date on which the grantee commits a breach of any terms or conditionsattached to the grant of the Share Option, unless otherwise resolved to the contraryby our Board; or

(h) the date on which our Board resolves that the grantee has failed or otherwise is orhas been unable to meet the continuing eligibility criteria as may be prescribedpursuant to paragraph 8.

16. Cancellation of options granted

Our Board shall have the absolute discretion to cancel any options granted at any time ifthe grantee so agreed provided that where a Share Option is cancelled and a new option isproposed to be issued to the same grantee, the issue of such new Share Option may only bemade with available but unissued Shares in the authorised share capital of our Company, andavailable ungranted Share Options (excluding for this purpose all the cancelled ShareOptions) within the limits referred to in paragraph 5.


– IV-25 –

17. Period of the Share Option Scheme

Share Options may be granted to Eligible Persons under the Share Option Schemeduring the period of ten years commencing on the effective date of the Share Option Scheme.

18. Alteration to Share Option Scheme and Termination

(a) The Share Option Scheme may be altered in any respect by resolution of our Boardexcept those specific provisions relating to matters in Rule 23.03 of the GEMListing Rules (or any other relevant provisions of the GEM Listing Rules fromtime to time applicable) be altered to the advantage of grantees or prospectivegrantees except with the prior approval of the Shareholders of our Company ingeneral meeting.

(b) Any alterations to the terms and conditions of the Share Option Scheme which areof a material nature must be approved by the Shareholders of our Company ingeneral meeting, except where such alterations take effect automatically under theexisting terms of the Share Option Scheme.

(c) We by resolution in general meeting or our Board may at any time terminate theoperation of the Share Option Scheme and in such event, no further Share Optionswill be offered but the provisions of the Share Option Scheme shall remain in forcein all other respects.

(d) Any such adjustments shall be made in accordance with the provisions asstipulated under Chapter 23 of the GEM Listing Rules and supplementary guidanceon the interpretation of the GEM Listing Rules issued by the Stock Exchange fromtime to time (including the supplemental guidance attached to the letter from theStock Exchange dated September 5, 2005 to all issuers relating to Share OptionSchemes).

19. Conditions of the Share Option Scheme

The Share Option Scheme shall take effect subject to the passing of the necessaryresolution to adopt the Share Option Scheme by our Shareholders in a special generalmeeting of our Company and is conditional upon the Listing Committee of the StockExchange granting approval for the listing of, and permission to deal in, any Shares to beissued and allotted by our Company pursuant to the exercise of options in accordance withthe terms and conditions of the Share Option Scheme.

20. Administration of the Share Option Scheme

The Share Option Scheme shall be subject to the administration of our Board or anycommittee established by our Board from time to time, whose decision (save as otherwiseprovided in the Share Option Scheme) shall be final and binding on all parties.

As at the Latest Practicable Date, no other options have been granted or agreed to begranted by our Company under the Share Option Scheme as at the date of this prospectus.


– IV-26 –

The terms of the Share Option Scheme are in compliance with Chapter 23 of the GEMListing Rules.

E. OTHER INFORMATION

1. Estate duty, tax and other indemnities

Estate Duty

Our Directors have been advised that no material liability for estate duty is likelyto fall on our Company or any of our subsidiaries in the Cayman Islands or the BVI orHong Kong in which the companies comprising our Group are incorporated. There arecurrently no taxes in the form of estate duties under Cayman Islands law, and no estatetax is currently payable by persons who are not resident in the BVI with respect of anyshares, debt obligations or other securities of a BVI company.

Stamp Duty

Dealings in the Shares will be subject to Hong Kong stamp duty. The current advalorem rate of Hong Kong stamp duty is 0.1% on the higher of the consideration for orthe market value of the Shares and it is charged on the purchaser on every purchase andon the seller on every sale of the Shares. A total stamp duty of 0.2% is currentlypayable on a typical sale and purchase transaction involving the Shares.

Deed of Indemnity

The Controlling Shareholders (the ‘‘Indemnifiers’’) have entered into the deed ofindemnity with and in favour of our Company (for ourselves and as trustee for oursubsidiaries) to provide indemnities in respect of, among other matters:

(a) any taxation (including estate duty) falling on any member of our Groupresulting from or by reference to any income, profits, gains, transactions,events, matters or things earned, accrued, received, entered into (or deemed tobe so earned, accrued, received or entered into) or occurring on or before thedate on which the Share Offer becomes unconditional; and

(b) all costs which any member of our Group may incur, suffer or accrue, directlyor indirectly, from or on the basis of or in connection with any alleged oractual violation or non-compliance by any member of our Group with anylaws, regulations or administrative orders or measures in Hong Kong and PRCon or before the Listing Date, if any.

The Indemnifiers will, however, not be liable under the Deed of Indemnity to theextent that, among others:

— in relation to items (a) and (b) above, provision has been made for suchliability in the audited consolidated accounts of our Company or any memberof our Group for the Track Record Period;


– IV-27 –

— in relation to item (a) above, the taxation liability arises or is incurred as aresult of a retrospective change in law or a retrospective increase in tax ratescoming into force after the Listing Date; or

— in relation to item (a) above, the taxation liability arises in the ordinarycourse of acquiring and disposing of capital assets after the Listing Date

2. Litigation

Save as disclosed in the section headed ‘‘Business — Non-Compliance’’ in thisprospectus, as at the Latest Practicable Date, no member of our Group is engaged in anylitigation or arbitration of material importance and no litigation or claim of materialimportance is known to our Directors to be pending or threatened against any member of ourGroup, that would have a material adverse effect on our business, results of operations orfinancial condition.

3. Sole Sponsor

RaffAello Capital Limited has made an application on behalf of our Company to theStock Exchange for listing of, and permission to deal in, the Shares in issue and the Shares tobe issued as described in this prospectus.

The Sole Sponsor satisfies the independence criteria applicable to sponsor as set out inRule 6A.07 of the GEM Listing Rules.

The sponsor’s fee in relation to the Listing is approximately HK$5.5 million.

4. Promoter

Our Company has no promoter for the purpose of the GEM Listing Rules. Save asdisclosed in this prospectus, within the two years preceding the date of this prospectus, nocash, securities or other benefit had been paid, allotted or given, nor are any such cash,securities or other benefit intended to be paid, allotted or given, to the promoter of ourCompany in connection with the Share Offer or the related transactions described in thisprospectus.

5. Agency fees or commissions received

Within the two years immediately preceding the date of this prospectus, no commission,discounts, brokerages or other special terms have been granted in connection with the issue orsale of any capital of our Company or any of its subsidiaries.

6. Preliminary expenses

The preliminary expenses payable by our Company are estimated to be aboutHK$33,540.


– IV-28 –

7. Registration procedures

The register of members of our Company will be maintained in the Cayman Islands byEstera Trust (Cayman) Limited and a Hong Kong branch register of members of ourCompany will be maintained in Hong Kong by Computershare Hong Kong Investor ServicesLimited. Save where our Directors otherwise agree, all transfers and other documents of titleto Shares must be lodged for registration with, and registered by, our Company’s Hong Kongbranch share registrar in Hong Kong and may not be lodged in the Cayman Islands.

8. Taxation of holders of Shares

Dealings in Shares will be subject to Hong Kong stamp duty. The sale, purchase andtransfer of Shares are subject to Hong Kong stamp duty, the current rate of which is 0.2% ofthe consideration or, if higher, the value of the Shares being sold or transferred. Profits fromdealings in the Shares arising in or derived from Hong Kong may also be subject to HongKong profits tax.

Potential holders of Shares are recommended to consult their professional advisers ifthey are in any doubt as to the taxation implications of subscribing for, purchasing, holdingor disposing of or dealing in Shares.

None of our Company, our Directors or other parties involved in the Listing can acceptresponsibility for any tax effect on, or liabilities of, holders of Shares resulting from theirsubscription for, purchase, holding or disposal of or dealing in Shares.

9. Qualifications of experts

The following are the respective qualifications of the experts who have given opinion oradvice which are included in this prospectus:

Name Qualification

RaffAello Capital Limited A corporation licensed to carry on for type 6

(advising on corporate finance) regulated activities

under the SFO

BDO Limited Certified Public Accountants

Beijing Jingtian & Gongcheng Law Firm PRC legal adviser

Appleby Legal advisor as to Cayman Islands law

Knight Frank Asset Appraisal Limited Business valuer

DTZ Cushman & Wakefield Limited Industry consultant


– IV-29 –

10. Compliance adviser

In accordance with the requirements of the GEM Listing Rules, our Company hasappointed RaffAello Capital Limited as our compliance adviser to provide advisory servicesto our Company to ensure compliance with the GEM Listing Rules for a period commencingon the Listing Date and ending on the date on which our Company complies with the GEMListing Rules in respect of our financial results for the second full financial year commencingafter the Listing Date, or until the compliance adviser agreement is otherwise terminatedupon the terms and conditions set out therein.

11. Consents of experts

Each of the experts named in the paragraph headed ‘‘E. Other Information — 9.Qualifications of experts’’ in this section has given and has not withdrawn its written consentto the issue of this prospectus with the inclusion of its report and/or letter and/or certificatesand/or opinions and/or references to its name (as the case may be) included in the form andcontext in which they are respectively included. Each of the experts’ statements have beenmade on the date of this prospectus and were made by such expert for incorporation in thisprospectus.

12. Binding effect

This prospectus shall have the effect, if an application is made in pursuance of it, ofrendering all persons concerned bound by all of the provisions (other than the penalprovisions) of sections 44A and 44B of the Companies (Winding up and MiscellaneousProvisions) Ordinance so far as applicable.

13. Bilingual prospectus

The English language and Chinese language versions of this prospectus are beingpublished separately in reliance upon the exemption provided by section 4 of the Companies(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice(Chapter 32L of the Laws of Hong Kong) and Rule 14.25 of the GEM Listing Rules. In caseof any discrepancies between the English language version and the Chinese language version,the English language version shall prevail.

14. Miscellaneous

Save as disclosed in this prospectus:

(a) within the two years immediately preceding the date of this prospectus:

(i) no share or loan capital of our Company or of any of our subsidiaries hasbeen issued, agreed to be issued or is proposed to be issued fully or partlypaid either for cash or for a consideration other than cash; and


– IV-30 –

(ii) no commissions, discounts, brokerages or other special terms have beengranted in connection with the issue or sale of any capital of our Company orany of our subsidiaries;

(b) no share, warrant or loan capital of our Company or any of our subsidiaries isunder option or is agreed conditionally or unconditionally to be put under option;

(c) none of the equity and debt securities of our Company is listed or dealt with in anyother stock exchange nor is any listing or permission to deal being or proposed tobe sought;

(d) all necessary arrangements have been made enabling the Shares to be admitted intoCCASS;

(e) our Company had not issued any debentures nor did it have any outstandingdebentures or convertible debt securities;

(f) neither our Company nor any of our subsidiaries has issued or agreed to issue anyfounder shares or management shares or deferred shares or any debentures;

(g) our Directors confirm that none of them shall be required to hold any shares byway of qualification and none of them has any interest in the promotion of ourCompany;

(h) our Directors confirm that there has been no material adverse change in thefinancial or trading position or prospects of our Group since 30 April 2017 (beingthe date to which the latest audited consolidated financial statements of our Groupwere made up);

(i) there has not been any interruption in the business of our Group which may haveor have had a significant effect on the financial position of our Group in the 24months immediately preceding the date of this prospectus; and

(j) there is no arrangement under which further dividends are waived or agreed to bewaived.


– IV-31 –

DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG

A copy of this prospectus, together with copies of the written consents referred to the sectionheaded ‘‘Appendix IV — Statutory and General Information — E. Other Information — 11.Consents of experts’’ in this prospectus, and copies of material contracts referred to in paragraphheaded ‘‘Appendix IV — Statutory and General Information — B. Further Information about thebusiness of our Group — 1. Summary of material contracts’’ in this prospectus have beendelivered to the Registrar of Companies in Hong Kong for registration.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the offices of P. C.Woo & Co. at Room 1225, 12/F, Prince’s Building, 10 Chater Road, Central, Hong Kong duringnormal business hours up to and including the date which is 14 days from the date of thisprospectus:

(a) the Memorandum and the Articles;

(b) the Accountant’s Report of our Company from BDO Limited, the text of which is setout in Appendix I to this prospectus;

(c) the consolidated audited financial statements of our Group for each of the two yearsended 31 December 2016 and the four months ended 30 April 2017;

(d) the report from BDO Limited relating to the unaudited pro forma financial information,the text of which is set out in Appendix II to this prospectus;

(e) the letter of advice prepared by Appleby, legal advisers to our Company as to CaymanIslands law, summarising certain aspects of the Cayman Companies Law referred to inAppendix III to this prospectus;

(f) the Companies Law;

(g) the material contracts referred to in the section headed ‘‘Appendix IV — Statutory andGeneral Information — B. Further information about the business of our Group — 1.Summary of material contracts’’ in this prospectus;

(h) the PRC legal opinions prepared by Beijing Jingtian & Gongcheng Law Firm, our legaladvisers as to PRC law, in respect of certain aspects of our Group and our propertyinterests;

(i) the written consents referred to in the paragraph headed ‘‘Appendix IV — E. Otherinformation — 11. Consents of experts’’ in this prospectus;

(j) the service agreements and letters of appointment referred to in the paragraph headed‘‘Appendix IV — C. Further information about our Directors and substantialShareholders — 4. Directors’ remuneration’’ in this prospectus; and

(k) the industry report prepared by DTZ Cushman & Wakefield Limited referred to in thesection headed ‘‘Industry Overview’’ in this prospectus.

APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OFCOMPANIES AND AVAILABLE FOR INSPECTION

– V-1 –

FINELAND REAL ESTATE SERVICES GROUP LIMITED方圓房地產服務集團有限公司