China New Town Development : INSIDE INFORMATION Cooperation Agreement in relation to the Luodian New Town Project

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CHINA NEW TOWN DEVELOPMENT COMPANY LIMITED 中 國 新 城 鎮 發 展 有 限 公 司

(Incorporated as a business company limited by shares under the laws of the British Virgin Islands)

Hong Kong Stock Code: 1278

INSIDE INFORMATION

Cooperation Agreement in relation to the Luodian New Town Project

This announcement is made pursuant to Rule 13.09 of the Listing Rules of The Stock Exchange of Hong Kong Limited and Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Reference is made to the announcements of China New Town Development Company Limited (the ''Company'', collectively with its subsidiaries, the ''Group'') dated 20 June 2017 and 11 March 2018 (the ''Announcements''). Capitalized terms used in this announcement shall have the same meanings as defined in the Announcements, unless the context requires otherwise.

The Board of Directors (the ''Board'') of the Company is pleased to announce that on 29 December 2018, Shanghai Golden Luodian Development Co., Limited (''Jinluodian''), a non-wholly owned subsidiary of the Company entered into an agreement (the ''Cooperation Agreement'') in relation to the continued cooperation on the Luodian New Town Project (''Project'') with the People's Government of Luodian Town, Baoshan District, Shanghai, the PRC (''Local Government'').

BACKGROUND

Shanghai Estates Co., Ltd. previously entered into an agreement dated 21 August 2002 (the ''Initial Agreement'') with Shanghai Luodian Asset Management Investment Co., Ltd. (''Luodian Investment''), which is an affiliate of the Local Government, in relation to the establishment as a joint venture of Jinluodian, which became a non-wholly owned subsidiary of the Company, for the Project. The Group was subsequently assigned therights and obligations of the Initial Agreement by way of a supplemental agreement dated 31 December 2010 between the Group and Luodian Investment (together with the Initial Agreement, the ''Original Agreements'').

Jinluodian had almost completed the land development in the Western Zone, as well as the demolition and relocation works and other pre-construction works in the planned development area of the Eastern Zone prior to the expiration of the Original Agreements on 20 August 2017. Since then, the Group had been negotiating with the Local Government to continue the cooperation with new revenue model on the Project based on the newly promulgated land policies of the PRC, as the previous mode of cooperation under the Original Agreements was rendered unfeasible due to such change of land policies.

MAJOR TERMS OF THE COOPERATION AGREEMENT

The new agreed term for cooperation in respect of the Project shall be from 21 August 2017 to 20 August 2023, and the area of Luodian New Town for development shall remain the same as the Original Agreements. Jinluodian shall continue to complete the outstanding construction works and cooperate with the Local Government in the handover of the municipal infrastructure and public facilities in the Western Zone by 20 August 2023. The Local Government shall be responsible for certain outstanding demolition and relocation works in the area and Jinluodian will not be required to bear any further costs in such respect.

The Local Government has agreed to reimburse Jinluodian the fees of the demolition and relocation works in the Eastern Zone in the total amount of RMB1,522,580,000.

Further, the Local Government has also entrusted Jinluodian as the agent for the primary land development in the Eastern Zone, to be responsible for the construction and management works therein. The parties will enter into a separate agreement regarding such construction and entrusted management works,

REASONS FOR ENTERING INTO THE COOPERATION AGREEMENT

The Original Agreements expired on 20 August 2017 and there has been relatively material changes to the land policies. As a result of the Group's relentless efforts, the Group entered into the Cooperation Agreement with the Local Government after rounds of negotiation. Pursuant to the Cooperation Agreement, there would be changes to the Group's revenue model in the Project. Under the Original Agreements, the Group is entitled to a portion of the sale proceeds of the land. On the other hand, under the Cooperation Agreement, the Local Government entrusted Jinluodian as the agent for theprimary land development in the Eastern Zone, to be responsible for the construction and management works therein, and therefore the Group shall be entitled to the management fee which shall be determined by a separate agreement to be entered into.

The Project is a symbol of the ''one city and nine towns'' project in Shanghai with an excellent geographical location and convenient transportation, aimed to have a series of high-quality ancillary facilities and residential properties. Pursuant to the Cooperation Agreement, strong support from the Local Government is expected for Jinluodian and its affiliates to be the responsible entities for further introducing various high-quality industries and resources into Luodian New Town, including high-quality industrial companies such as integrated circuits and chips companies, high-quality education resources and high-quality cultural and recreational projects. Pursuant to the Cooperation Agreement, the Group is entitled to receive approximately RMB1,523 million, out of which approximately RMB649 million had already been recognized as the Group's revenue in the year ended 31 December 2017, whilst the remaining will be used for relevant construction and development and/or improving the Group's cashflow. The impact on the Group's financial statement will be subject to the audit by the Company's auditors. Further, the entering into the Cooperation Agreement will allow the Group to continue its involvement in the land development and construction works of the Project under the Original Agreements, as well as to create potential opportunities for the Company in future developments of the Luodian New Town.

None of the Directors of the Company has any interest, direct or indirect, in the above matters.

Shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of the Company.

By Order of the Board

China New Town Development Company Limited

Liu Heqiang

Chief Executive Officer

Hong Kong, 30 December 2018

As at the date of this announcement, the executive directors of the Company Mr. Liu Heqiang (Chief Executive Officer), Ms. Yang Meiyu, Mr. Ren Xiaowei and Mr. Shi Janson Bing; the non-executive directors of the Company are Mr. Li Huachang (Chairman), Mr. Zuo Kun (Vice Chairman), Mr. Li Yao Min (Vice Chairman) and Mr. Xie Zhen; and the independent non-executive directors of the Company are Mr. Henry Tan Song Kok, Mr. Kong Siu Chee, Mr. Zhang Hao and Mr. E Hock Yap.