CWT International : MAJOR TRANSACTION IN RELATION TO THE DISPOSAL OF GOLF COURSES IN THE US THROUGH THE DISPOSAL OF A SUBSIDIARY

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this Circular or as to the action to be taken, you should consult your stockbroker, or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your securities in CWT International Limited, you should at once hand this Circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

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

CWT INTERNATIONAL LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code: 521)

MAJOR TRANSACTION

IN RELATION TO

THE DISPOSAL OF GOLF COURSES IN THE US THROUGH

THE DISPOSAL OF A SUBSIDIARY

28 November 2019

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DEFINITIONS

In this Circular, the following expressions shall have the following meanings unless the context requires otherwise:

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Unless otherwise stated, the exchange rate adopted in this Circular for illustration purposes only is HK$7.80 = US$1.00.

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LETTER FROM THE BOARD

CWT INTERNATIONAL LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code: 521)

MAJOR TRANSACTION

IN RELATION TO

THE DISPOSAL OF GOLF COURSES IN THE US THROUGH

THE DISPOSAL OF A SUBSIDIARY

INTRODUCTION

References are made to (i) the Announcement in which the Board announced that, on 1 November 2019 (after trading hours), the Seller (a direct wholly-owned subsidiary of the Company) has entered into the Sale and Purchase Agreement with the Purchaser, pursuant to which the Seller has conditionally agreed to sell and assign, and the Purchaser has conditionally agreed to purchase and acquire, the Sale Share and the Sale Loan (which represents the entire amount of the outstanding shareholder's loan owed by the Target Company to the Seller as at 31 August 2019) at a total consideration of US$86,500,000 (equivalent to approximately HK$674,700,000); and (ii) the Completion Announcement in which the Board announced that on 15 November 2019, all the conditions precedent stated in the Sale and Purchase Agreement had been satisfied and Completion took place on 15 November 2019. Upon Completion, the Purchaser had acquired the entire issued share capital of the Target Company and the benefit of the full amount of Sale Loan, and the Target Company ceased to be a subsidiary of the Company.

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LETTER FROM THE BOARD

The purpose of this Circular is to provide the Shareholders with, among other things, (i) a letter from the Board setting out details of the Disposal and the Sale and Purchase Agreement; (ii) the financial information of the Group; (iii) the valuation report on the US Properties; and (iv) other information required under the Listing Rules.

PRINCIPAL TERMS OF THE SALE AND PURCHASE AGREEMENT

The Sale Share which represented the entire issued share capital of the Target Company as at the date of the Sale and Purchase Agreement and the Sale Loan which represented the entire amount of the outstanding shareholder's loan owed by the Target Company to the Seller as at 31 August 2019.

As at the date of the Sale and Purchase Agreement, the Target Company held the US Properties through indirectly owning the entire equity interests in the US Project Companies.

Earnest Money Deposit

Pursuant to the Project Earnest Money Agreements, the Purchaser paid to the Seller an aggregate amount of US$3,000,000 as earnest money deposit (the "Earnest Money Deposit"), which had been applied towards part payment of the Consideration on the Completion Date.

Consideration

The total consideration for the Disposal is US$86,500,000 (equivalent to approximately HK$674,700,000) (the "Consideration").

Under the Sale and Purchase Agreement, the Consideration is payable by the Purchaser as follows:

1. within five days from the Confirmation Date, the Purchaser is required to pay to the Seller an amount of US$5,650,000 (equivalent to approximately HK$44,070,000) (the "First Installment") by depositing such amount into the Seller's account. The First Installment was paid by the Purchaser to the Seller within five days from the Confirmation Date;

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LETTER FROM THE BOARD

1. if the Escrow Account has been set up within three weeks from the Confirmation Date, the Purchaser is required to, at the Seller's election, (i) pay an amount of US$77,850,000 (equivalent to approximately HK$607,230,000) (the "Second Installment") into the Escrow Account in the name of the escrow agent within six weeks from the Confirmation Date and give an instruction to the escrow agent to release and transfer the Second Installment to the Seller's account or its designated account on Completion, or (ii) pay the full amount of the Second Installment into the Seller's account or its designated account on the Completion Date; and if the Escrow Account has not been set up within three weeks from the Confirmation Date, on Completion, the Purchaser is required to pay the full amount of the Second Installment into the Seller's account or its designated account. As the Escrow Account had not been set up within three weeks from the Confirmation Date, on the Completion Date, the full amount of the Second Installment was paid by the Purchaser to the Seller; and
2. on the Completion Date, the Earnest Money Deposit was automatically applied towards part payment of the Consideration.

The Consideration was determined after arm's length negotiations between the Seller and the Purchaser with reference to various relevant factors, including the latest valuation report prepared in respect of the US Properties for the purposes of the preparation of the 2019 interim report of the Company and the matters stated under the heading "Reasons for and Benefits of the Disposal" in this "Letter from the Board".

While the Consideration represented a discount to the market value in existing state as at 14 November 2019 as set out in the valuation report dated 14 November 2019 in respect of the US Properties, the Board believes that the Consideration and the other terms and conditions of the Sale and Purchase Agreement were fair and reasonable and in the interests of the Company and its Shareholders as a whole, taking into account the market conditions, geopolitical uncertainties and the Company's specific circumstances. The Group had been searching for interested buyers for quite some time and had been negotiating terms relating to the disposal of the US Properties with such parties. Given the negative market circumstances which had affected interest in the US Properties, including increasing China-US trade tensions, macroeconomic downward pressures and the slow development of the US golf industry, it had been a challenge for the Company to identify suitable buyers.

In light of the difficult market conditions and given the lack of significant improvement in the average operational performance of the US Properties and the need of the Company to dispose of non-core assets to increase its liquidity and cash position, as further set out under the heading "Reasons for and Benefits of the Disposal" in this "Letter from the Board", the Company believes the Consideration reflected a relative fair value of the US Properties and the Purchaser was the best possible purchaser after months of searching under the circumstances. The Disposal also allowed the Company to liquidate its assets and generate cash efficiently to repay outstanding debts of the Company under the Facility Agreement and enhance the general working capital of the Company.

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LETTER FROM THE BOARD

Conditions Precedent

Purchaser Closing Conditions

The Seller's obligation to proceed to Completion was conditional upon the satisfaction of the following conditions with respect to the Purchaser, unless waived in writing by the Seller (the "Purchaser Closing Conditions"):

1. all representations and warranties made by the Purchaser as at the date of the Sale and Purchase Agreement and the Completion Date are in all material respects true, accurate and not misleading;
2. the Purchaser having paid the First Installment to the Seller; and
3. if applicable, the Purchaser having paid the Second Installment into the Escrow Account within six weeks from the Confirmation Date.

Items (a) and (b) of the Purchaser Closing Conditions had been satisfied and Completion took place on 15 November 2019. No part of the Earnest Money Deposit and the First Installment was forfeited.

Seller Closing Conditions

The Purchaser's obligation to proceed to Completion was conditional upon the satisfaction of the following conditions with respect to the Seller, unless waived in writing by the Purchaser (the "Seller Closing Conditions"):

1. the Company having obtained the approval from its Shareholders in the general meeting approving the Disposal as required under the Listing Rules, or if permitted under the Listing Rules, the written approval from a Shareholder or closely allied group of Shareholders who together holds more than 50% of the voting rights at the general meeting which, but for such written approval, would be convened to consider the Disposal;
2. the Company having obtained the Lender Group Consent; and
3. all warranties made by the Seller as at the date of the Sale and Purchase Agreement and the Completion Date are in all material respects true, accurate and not misleading.

All items of the Seller Closing Conditions had been satisfied and Completion took place on 15 November 2019. No part of the Earnest Money Deposit and the First Installment was returned and both of them were applied towards part payment of the Consideration.

Completion

As disclosed in the Completion Announcement, all the conditions precedent contained in the Sale and Purchase Agreement had been satisfied, and Completion took place on the Completion Date. Upon Completion, the Purchaser had acquired the entire issued share capital of the Target Company and the benefit of the full amount of Sale Loan, and the Target Company ceased to be a subsidiary of the Company.

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LETTER FROM THE BOARD

INFORMATION ON THE TARGET GROUP

Overview

The Target Group was principally engaged in investment in the US Properties.

As at the date of the Sale and Purchase Agreement, the Target Company held the US Properties through indirectly owning the entire equity interests in the US Project Companies. The US Properties comprised eight golf courses, which were owned by each of the respective US Project Companies as follows:

As at 14 November 2019, based on the latest valuation report prepared by an independent property valuer engaged to value the US Properties as set out in Appendix II to this Circular, the market value of the US Properties was US$101,700,000 (equivalent to approximately HK$793,260,000).

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LETTER FROM THE BOARD

Financial Information

Set forth below is certain unaudited consolidated financial information of the Target Group for the two years ended 31 December 2017 and 31 December 2018:

As at 30 June 2019, the unaudited carrying amount of consolidated net assets attributable to the owners of the Target Group, after adding back the Target Group's amount due to other entities of the Group, was approximately US$113,519,967 (equivalent to approximately HK$885,456,000).

INFORMATION ON THE PARTIES

The Seller is a direct wholly-owned subsidiary of the Company and is an investment holding company. The Company is a Hong Kong-based investment holding company principally engaged in commodity marketing, financial services and logistic services. The Company is also engaged in the affiliated business of operation of sports and leisure-related facilities, property investment, management & development, and engineering services.

The Purchaser is a privately-held company and is engaged in real estate investment, acquisition and management. The Company understands that the ultimate beneficial owner of the Purchaser is Elaine Bai, who holds the entire issued share capital of the Purchaser.

As at the date of the Sale and Purchase Agreement, to the best knowledge, information and belief of the Directors and having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner were third parties independent of the Company or its connected persons.

FINANCIAL EFFECTS OF THE DISPOSAL

Earnings

The estimated indicative net loss arising from the Disposal is expected to be approximately US$30.2 million, and such loss has been determined with reference to the difference between the Consideration and the unaudited carrying amount of consolidated net assets attributable to the owners of the Target Group as at 30 June 2019, after adding back the Target Group's amount due to other entities of the Group and estimated tax implications and transaction cost to be approximately US$3.3 million.

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LETTER FROM THE BOARD

Assets and liabilities

Upon Completion, the Target Company ceased to be a subsidiary of the Company and the financial results, assets and liabilities of the Target Group will no longer be included in the consolidated financial statements of the Group. Accordingly, apart from the increase in total assets by the amount of the Consideration in cash, the total assets and liabilities of the Group were reduced by the assets and liabilities attributable to the Target Group.

Shareholders should note that the financial impact set out above is for illustrative purpose only, and the actual gain or loss from the Disposal will have to be ascertained at the time of preparation of the Group's consolidated financial statement for the year ending 31 December 2019 with reference to, among other things, the carrying value of the Sale Share and the Sale Loan and the actual costs and expenses associated with the Disposal.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Board considers that the Disposal was an appropriate opportunity to dispose of the Company's interests in the US Properties, after taking into consideration negative market circumstances including increasing China-US trade tensions, macroeconomic downward pressures and the slow development of the US golf industry, the lack of significant improvement in the average operational performance of the US Properties and the need of the Company to dispose of non-core assets to increase its liquidity and cash position to enable the Company to repay part of the loan in the total amount of approximately HK$1,630,000,000 granted under the Facility Agreement and related interest payments (please refer to the announcements of the Company dated 16, 22 and 30 April 2019, and 6, 12 and 27 June 2019, 9 and 19 July 2019, 5 August 2019 and 9 October 2019 for further details). In addition, the Company believes that the US Properties did not bring significant improvements to the Company's financial performance and business strength and did not have significant investment appeal. In view of the continuing, or even growing, market uncertainties affecting the US Properties, the Company had been searching for interested buyers for some time and it would be beneficial for the Company to undertake the Disposal. The net proceeds of the Disposal will mainly be used to partly repay the outstanding debt of the Company under the Facility Agreement and enhance the general working capital of the Company.

In view of the above, especially considering the market conditions, geopolitical uncertainties and the Company's specific circumstances, and having considered the terms of the Sale and Purchase Agreement, the Directors believe that the terms of the Disposal were fair and reasonable and in the interests of the Company and its Shareholders as a whole.

LISTING RULES IMPLICATIONS

As one or more of the relevant percentage ratios of the Disposal for the Company exceeded 25% but are less than 75%, the Disposal constituted a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to the reporting, announcement and shareholders' approval requirements under Chapter 14 of the Listing Rules.

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LETTER FROM THE BOARD

As at the date of the Announcement, HNA Group (International) Company Limited ("HNA Group (International)", which held 1,109,244,000 shares of the Company, representing approximately 9.73% of the issued share capital of the Company) and Hong Kong HNA Holding Group Co. Limited ("Hong Kong HNA", which held 4,734,008,489 shares of the Company, represented approximately 41.53% of the issued share capital of the Company) are direct shareholders of the Company which are ultimately controlled by HNA Group Co., Ltd. Accordingly, HNA Group (International) and Hong Kong HNA were a closely allied group of Shareholders which held approximately 51.26% of the issued share capital of the Company. To the best knowledge, information and belief of the Directors and having made all reasonable enquiries, no Shareholder would be required to abstain from voting at a general meeting of the Company if such meeting were to be convened for the approval of the Sale and Purchase Agreement and the transaction(s) contemplated thereunder. Accordingly, the Company has obtained a written shareholder's approval from each of HNA Group (International) and Hong Kong HNA on 30 and 29 September 2019 respectively for approving the Disposal in lieu of holding a general meeting of the Company to approve the Disposal according to Rule 14.44 of the Listing Rules.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this Circular.

Yours faithfully,

By order of the Board

CWT International Limited

Ding Lei

Executive Director

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APPENDIX I FINANCIAL INFORMATION OF THE GROUP

1. FINANCIAL SUMMARY OF THE GROUP

The audited consolidated financial statements of the Group for each of the three years ended 31 December 2016, 2017 and 2018 are respectively disclosed in the following documents which have been published on the website of the Company (www.cwtinternational.com/c/ir_reports.php) and the website of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk):

• the annual report of the Company for the year ended 31 December 2016 published on 26 April 2017 (pages 80 to 260);
• the annual report of the Company for the year ended 31 December 2017 published on 27 April 2018 (pages 78 to 296); and
• the annual report of the Company for the year ended 31 December 2018 published on 6 June 2019 (pages 85 to 312).

2. STATEMENT OF INDEBTEDNESS

As at the close of business on 30 September 2019, being the latest practicable date for the purpose of

this statement of indebtedness of the Group prior to the printing of this Circular, the Group had the following indebtedness:

Some of the bank borrowings of the Group were secured by charges over its land use rights, an investment property, property, plant and equipment, inventories, trade and other receivables, warrantable LME commodities and deposits.

Included in the unsecured indebtedness of the Group is a tranche of bond (S$100,000,000, equivalent to approximately HK$567,000,000). The bonds bear fixed coupon rates of 4.8% per annum, payable semi- annually. The maturity date of the bond is 18 March 2020.

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APPENDIX I FINANCIAL INFORMATION OF THE GROUP

Included in the secured indebtedness are (i) revolving short-term trade facilities of S$516,000,000 (equivalent to approximately HK$2,929,000,000) which are self-liquidating facilities used to finance the Group's commodity marketing business; (ii) perpetual notes with principal amount of US$46,000,000 (equivalent to approximately HK$361,000,000), guaranteed by HNA Group (International) Company Limited; and (iii) borrowings with the principal amount of HK$1,630,000,000 and secured with equity interests of the Company's subsidiaries that hold vast majority of the Group's total assets.

Save as aforesaid or as otherwise disclosed herein, and apart from intragroup liabilities, at the close of business on 30 September 2019, the Group did not have any loan capital issued and outstanding, agreed to be issued, or authorised or otherwise created by unissued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptance credits, debentures, mortgages, charges, hire purchase commitments, guarantees or other material contingent liabilities.

3. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

On 19 July 2019 and 5 August 2019, the Company announced that the Company and the original lenders have reached an agreement to enter into a supplemental agreement to amend and supplement the Facility Agreement (the "Supplemental Agreement"). Pursuant to the Supplemental Agreement, additional securities (including but not limited to corporate guarantees and working capital support) were provided by the immediate Shareholders, and affiliates of the controlling Shareholder (as security providers) to secure the performance obligations of the Company under the Facility Agreement, and the Company has granted a debenture in favour of the original lenders over the assets of the Company covering all present and future assets, undertaking, property and rights of the Company of whatsoever nature and wherever situate, including but not limited to land, investments, plant and machinery, credit balances, book debts, insurances, contracts and receivables, and intellectual property.

The Group is aware of the short term challenges it faces in relation to its liquidity and financial performance. The Group will explore all possible measures to optimize its capital structure, including various disposals of assets under the Group. The Disposal is a helpful beginning of a comprehensive plan to optimize the capital structure and facilitate the liquidity status of the Group.

The Group is currently evaluating the potential disposals of certain investment properties of the Group located in the United Kingdom and certain golf courses of the Group located in the PRC to partly repay the amount due under the Facility Agreement, and is in discussion with some potential buyers in the markets at the current stage.

In addition, the Group is committed to focus on the provision of logistics services to optimise the capital structure of the Group and maintain a stable operation. As a result, the Group also intends to dispose certain operations engaged in business activities other than those related to logistics services. The Group has received a number of letters of intent or expressions of interest from potential buyers with respect to the disposals of such operations and the management has been actively negotiating with such potential buyers.

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APPENDIX I FINANCIAL INFORMATION OF THE GROUP

4. STATEMENT OF WORKING CAPITAL SUFFICIENCY

The Directors are of the opinion that, if in the event that the Group is unable to complete the disposal proposals set out below and unable to obtain sufficient cash sources through other alternative measures or sources, based on the current assessment, the Group may not have sufficient working capital for its present requirements for at least the next 12 months from the date of this Circular. In addition, the Group will not be able to repay its outstanding debt and interests unless the disposal proposals set out below and other financing measures are implemented successfully. These conditions and circumstances indicate the existence of the material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern.

During the year ended 31 December 2018, the Directors have repaid certain borrowings totaling US$561,000,000 (carrying amount as at 31 December 2017 of approximately HK$4,325,222,000) raised in connection with the acquisition of CWT Pte. Limited in full with the funds raised through various refinancing measures, including proceeds from: (i) disposal of certain of the Group's warehouse properties located in Singapore at a consideration of S$730,000,000 (equivalent to approximately HK$4,240,716,000); and (ii) a new borrowing with principal amount of HK$1,400,000,000 (the "New Borrowing").

On 3 April 2019, the Group defaulted payment of interest and fees totalling approximately HK$63,000,000 in relation to the New Borrowing. The Group negotiated with the lenders and the New Borrowing restructured into an approximately HK$1,630,000,000 loan which is due in August 2020 and secured with, among other things, equity interests of the Company's subsidiaries that hold vast majority of the Group's total assets. Other than the New Borrowing, the Group also has other borrowings that are due for repayment within twelve months from the date of this Circular, which include medium term notes of S$100,000,000 (equivalent to approximately HK$567,000,000) due in March 2020.

In view of these circumstances, the Directors intends to dispose its investment property in the United Kingdom ("UK") (the "UK Property"), sports and leisure-related business in the PRC (the "PRC Golf Operation"), and certain operations engaging in business activities other than those related to logistics services so as to improve the Group's liquidity and solvency position. The Group has entered into certain non-binding term sheets with respect to the disposals.

Assuming the success of the disposals of the UK Property, the PRC Golf Operation and certain operations engaging in business activities other than those related to logistics services in time as anticipated so that the proceeds could be used to meet the Group's liabilities as they fall due, and after taking into account the internal resources of the Group and the present and expected available financing facilities, the Directors expect the Group to have sufficient working capital for its present requirements for at least the next 12 months from the date of this Circular.

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APPENDIX I FINANCIAL INFORMATION OF THE GROUP

5. RECONCILIATION STATEMENT FOR THE US PROPERTIES PURSUANT TO RULE 5.07 OF THE LISTING RULES

The statement below shows the reconciliation of the value of the US Properties as reflected in the unaudited financial information of the Group as at 30 June 2019 with the valuation of the US Properties as of 14 November 2019 as set out in the valuation report contained in Appendix II to this Circular:

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APPENDIX II VALUATION REPORT ON THE US PROPERTIES

The following is the text of a letter, and valuation certificate, prepared for the purpose of incorporation in this circular received from Jones Lang LaSalle Corporate Appraisal and Advisory Limited, an independent valuer, in connection with its valuation as at 14 November 2019 of the property held by CWT International Limited.

28 November 2019

The Board of Directors

CWT International Limited

10/F., Everbright Centre,

108 Gloucester Road,

Wan Chai,

Hong Kong

Dear Sirs,

In accordance with the instructions of CWT International Limited (the "Company") to value the property, we confirm that we have carried out inspections, made relevant enquiries and searches and obtained such further information as we consider necessary for the purpose of providing our opinion of the market value of the property interests as at 14 November 2019 (the "Valuation Date").

Our valuation is carried out on a market value basis. Market value is defined as "the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion".

Our valuation has been made on the assumption that the seller sells the property interests in the market without the benefit of a deferred term contract, leaseback, joint venture, management agreement or any similar arrangement, which could serve to affect the value of the property interests.

No allowance has been made in our report for any charge, mortgage or amount owing on any of the property interests valued nor for any expense or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the property is free from encumbrances, restrictions and outgoings of an onerous nature, which could affect their values.

In valuing the property interests, we have complied with all requirements contained in Chapter 5 of the Rules Governing the Listing of Securities on issued by The Stock Exchange of Hong Kong Limited; the RICS Valuation - Professional Standards published by the Royal Institution of Chartered Surveyors; the HKIS Valuation Standards published by the Hong Kong Institute of Surveyors; and the International Valuation Standards published by the International Valuation Standards Council.

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APPENDIX II VALUATION REPORT ON THE US PROPERTIES

We have adopted the market approach in the valuation of property by making reference to comparable market transactions in our assessment of the market value of the property interests. This approach rests on the wide acceptance of the market transactions as the best indicator and pre-supposes that evidence of relevant transactions in the market place can be extrapolated to similar property, subject to allowances for variable factors. We have also taken into account planning and design cost relevant to the proposed development in our valuation.

We have relied to a very considerable extent on the information given by the owner of the property and have accepted advice given to us on such matters as tenure, planning approvals, statutory notices, easements, particulars of occupancy, lettings, and all other relevant matters.

We have been provided with copies of title documents and lease agreements relating to the property and have made relevant enquiries. However, we have not searched the original documents to verify the ownership or to ascertain any amendment.

We have had no reason to doubt the truth and accuracy of the information provided to us by the Company. We have also sought confirmation from the Company that no material factors have been omitted from the information supplied. We consider that we have been provided with sufficient information to arrive an informed view, and we have no reason to suspect that any material information has been withheld.

We have not carried out detailed measurements to verify the correctness of the area in respect of the property interests but have assumed that the area shown on the title documents and official site plans handed to us are correct. All documents and contracts have been used as reference only and all dimensions, measurements and areas are approximations. No on-site measurement has been taken.

We have inspected the exterior and, where possible, the interior of the property. However, we have not carried out investigation to determine the suitability of the ground conditions and services for any development thereon. Our valuation has been prepared on the assumption that these aspects are satisfactory. Moreover, no structural survey has been made, but in the course of our inspection, we did not note any serious defect. We are not, however, able to report whether the property are free of rot, infestation or any other structural defect. No tests were carried out on any of the services.

Inspection of the property was carried out in 14 November 2019 by Matt Gleason. Matt Gleason is an MAI and has more than 8 years' experience in the valuation of property in United States.

Unless otherwise stated, all monetary figures stated in this report are in the United States Dollar (USD).

Our valuation certificate is hereby enclosed for your attention.

Yours faithfully,

for and on behalf of

Jones Lang LaSalle Corporate Appraisal and Advisory Limited

Gilbert C.H. Chan

MRICS MHKIS RPS(GP)

Director

Note: Gilbert C.H. Chan is a Chartered Surveyor who has 26 years' experience in the valuation of property in Hong Kong and 25 years of property valuation experience worldwide, including United States. He has been working with Jones Lang LaSalle Corporate Appraisal and Advisory Limited since 2008.

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APPENDIX II VALUATION REPORT ON THE US PROPERTIES

VALUATION CERTIFICATE

Property held by the Company for investment

Notes:

1. The addresses and registered owners of the property, which are indirect wholly-owned subsidiary of the Company are:

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APPENDIX II VALUATION REPORT ON THE US PROPERTIES

2. Information of the property:

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APPENDIX II VALUATION REPORT ON THE US PROPERTIES

1. Pursuant to 8 golf course lease agreements made between the registered owners in Note 1 (the "Lessors") and Oki Management LLC (the "Lessee") respectively, we noted that the leases have a term of 5 years commencing on 17 December 2016, with two options for the Lessee to extend the term, each option for 5 year periods, which shall be exercised by the Lessee between 6 and 18 months prior to the end of the then existing term. The term shall continue to extend for additional 5 year periods unless either party gives the other notice of termination at least 10 months prior to the end of the then existing term.
2. The Lessee shall pay to the Lessor an annual fixed rent of USD7,100,000 and annualized profit share rent calculated as follows:-

Rent shall be paid to the Lessor net of costs and expenses incurred by the Lessee in connection with Lessee's golf course operations except that the Lessor pays all real property taxes and assessments.

1. Pursuant to the sale and purchase agreement entered into between the Company and Magic Radiance Limited on 1 November 2019, the property will be disposed by the Company with a total consideration of USD86,500,000.
2. A general description and market information of the property is summarized as below:

7. In our valuation, we have identified and analyzed various relevant market transactions in United States from 2017 till 31 October 2019 which have similar characteristics as the subject property. These comparables range from approximately USD23,000 to USD154,000 per acres with average unit price of approximately USD54,420 per acres. The overall unit price adopted is USD53,890 per acres which is consistent with the relevant comparable after due adjustments. Due adjustments to the unit price on site area of those transactions have been made to reflect these factors including but not limited to time, transaction status, location and size in arriving at the key assumption.

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RESPONSIBILITY STATEMENT

This Circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this Circular is accurate and complete in all material aspects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this Circular misleading.

DISCLOSURE OF INTERESTS

Interest of Directors and Chief Executive in the Company

As at the Latest Practicable Date, the interests and short positions, if any, of each Director and chief executive of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which the Directors and chief executive of the Company were deemed or taken to have under such provisions of the SFO), or which were required to be and are recorded in the register required to be kept by the Company pursuant to section 352 of the SFO, or as otherwise required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") set out in Appendix 10 to the Listing Rules were as follows:

Long positions in the shares and underlying shares of the Company

Save as disclosed above, as at the Latest Practicable Date, none of the Company's Directors, chief executives or their respective associates had any other personal, family, corporate and other interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept under Section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

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Interest of substantial Shareholders in the Company

So far as is known to the Directors or chief executive of the Company, as at the Latest Practicable Date, companies and persons who had interests or short positions in the shares and underlying shares of the Company which would fall to be disclosed to the Company under Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company pursuant to section 336 of the SFO were as follows:

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Note:

1. As at the Latest Practicable Date, HNA Group is a company established in the PRC with limited liability which directly owns approximately 91.09% of HNA Group (International) and directly owns more than 95% of HNA Holding Group. HNA Holding Group and HNA Group directly owns approximately 51.38% and approximately 21.61% respectively of HNA Logistics. HNA Logistics directly owns 100% of HNA Holding International Limited, which in turn directly owns 100% of Hong Kong HNA.

HNA Group is held as to 70% by Hainan Traffic Administration, which is in turn held as to 50% by Sheng Tang (Yangpu). Sheng Tang (Yangpu) is held as to 65% and 35% respectively by Hainan Province Cihang Foundation and Tang Dynasty Development, and Tang Dynasty Development is in turn 98% held by Pan-American Aviation Holding Company, which is wholly held by Cihang Sino-Western.

LITIGATION

As at the Latest Practicable Date, the Group is subject to various litigation, regulatory, and arbitration matters in the normal course of business. The Group vigorously defends against these claims and, in the opinion of management, the resolution of these matters will not have a material effect on the financial position of the Group.

SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors has any existing or proposed service contract with any member of the Group which is not expiring or terminable by the Group within one year without payment of compensation (other than statutory compensation).

COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors or their respective close associates (as if each of them was treated as a controlling shareholder under Rule 8.10 of the Listing Rules) was interested in any business apart from the businesses of the Group, which competes or is likely to compete, either directly or indirectly, with the businesses of the Group.

DIRECTOR'S INTERESTS IN ASSETS/CONTRACTS

Interests in assets

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which have been acquired or disposed of by, or leased, or which were proposed to be acquired or disposed of by, or leased to any member of the Group since 31 December 2018 (the date to which the latest published audited consolidated financial statements of the Company was made up).

Interests in contracts

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement subsisting and which was significant in relation to the businesses of the Group.

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MATERIAL CONTRACTS

The following material contracts, not being contracts entered into in the ordinary course of business of the Group, have been entered into by members of the Group within two years immediately preceding the date of this Circular and up to the Latest Practicable Date and are or may be material:

1. the share purchase agreement dated 22 June 2018 entered into between CWT Pte. Limited and ARA Cache (Holdings) Pte. Ltd. in relation to the sale of all the shares held legally and beneficially by CWT Pte. Limited in ARA-CWT Trust Management (Cache) Limited to ARA Cache (Holdings) Pte. Ltd.;
2. the share purchase agreement dated 22 June 2018 entered into between CWT Engineering Pte. Ltd. and APM (Holdings) Pte. Ltd. in relation to the sale of all the shares held legally and beneficially by CWT Engineering Pte. Ltd. in Cache Property Management Pte. Ltd. to APM (Holdings) Pte. Ltd.;
3. the sale and purchase agreements each dated 4 July 2018 between:
4. 1. HSBC Institutional Trust Services (Singapore) Limited (in its capacity as trustee of Mapletree Logistics Trust) and CWT Pte. Limited in relation to the disposal of the 6 Fishery Port Road Property;
   2. HSBC Institutional Trust Services (Singapore) Limited (in its capacity as trustee of Mapletree Logistics Trust) and SM Integrated Transware Pte Ltd in relation to the disposal of the 52 Tanjong Penjuru Property;
   3. HSBC Institutional Trust Services (Singapore) Limited (in its capacity as trustee of Mapletree Logistics Trust) and CWT Project Logistics Pte. Ltd. in relation to the disposal of the 4 Pandan Avenue Property;
   4. HSBC Institutional Trust Services (Singapore) Limited (in its capacity as trustee of Mapletree Logistics Trust) and CWT Logistics (S) Pte. Ltd. in relation to the disposal of the 5A Toh Guan Road East Property; and
   5. HSBC Institutional Trust Services (Singapore) Limited (in its capacity as trustee of Mapletree Logistics Trust) and CWT Pte. Limited in relation to the disposal of the 38 Tanjong Penjuru Property;
5. the Facility Agreement; and
6. the Sale and Purchase Agreement.

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QUALIFICATIONS AND CONSENTS OF EXPERTS

The following is the qualification of the expert who has given opinion or advice contained in this Circular:

Jones Lang LaSalle Corporate Appraisal and Advisory Limited has given and has not withdrawn its written consent to the issue of this Circular with the inclusion herein of its letter and report and references to its name in the form and context in which it appears.

As at the Latest Practicable Date, Jones Lang LaSalle Corporate Appraisal and Advisory Limited did not have any interest, either direct or indirect, in any assets which have been, since 31 December 2018, being the date to which the latest published audited consolidated financial statements of the Group were made up, acquired or disposed of by or leased to or were proposed to be acquired or disposed of by or leased to any member of the Group nor had any shareholding in any member of the Group nor any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection by Shareholders at 10th Floor, Everbright Centre, 108 Gloucester Road, Wanchai, Hong Kong from the date of this Circular up to and including the date which is 14 days from the date of this Circular:

1. the articles of association of the Company;
2. the letter from the Board, the text of which is set out in the section under the heading "Letter from the Board" on pages 4 to 11 of this Circular;
3. the annual reports of the Company for each of the two years ended 31 December 2017 and 2018;
4. the interim report of the Company for the six months ended 30 June 2019;
5. the valuation report from Jones Lang LaSalle Corporate Appraisal and Advisory Limited, the text of which is set out in Appendix II to this Circular;
6. the written consent referred to in the paragraph under the heading "Qualifications and Consents of Experts" in this Appendix to this Circular;
7. the material contracts referred to in the paragraph under the heading "Material Contracts" in this Appendix to this Circular; and
8. this Circular.

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MISCELLANEOUS

1. The registered office of the Company is situated at 10th Floor, Everbright Centre, 108 Gloucester Road, Wanchai, Hong Kong.
2. The company secretary of the Company is Mr. Cheung Kwok Kuen, Alan, who is admitted as a solicitor in Hong Kong.
3. The share registrar of the Company is Tricor Tengis Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong.
4. The English names of the Chinese entities marked with "*" are translations of their Chinese names and are included in this Circular for identification purposes only; such translations should not be regarded as their official English names. The English text of this Circular shall prevail over the respective Chinese text in the event of inconsistency.

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