PDF《CHINA EVERGRANDE GROUP 中 国恒大 集团》

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CHINA EVERGRANDE GROUP 中国恒大集团(Incorporated in the Cayman Islands with limited liability) (Stock Code: 3333) DISCLOSEABLE AND CONNECTED TRANSACTION FURTHER CAPITAL INCREASE TO HENGDA REAL ESTATE Reference is made to the previous disclosures of the Company in relation to the First Round Capital Increase and the Second Round Capital Increase. On

6 November 2017, Kailong Real Estate and Hengda Real Estate, both being subsidiaries of the Company, together with Mr. Hui Ka Yan, the controlling shareholder of the Company, entered into the Third Round Investment Agreements with the Third Round Investors, pursuant to which, the Third Round Investors have agreed to subscribe RMB60.0 billion for new capital in Hengda Real Estate based on a pre-capital increase consideration for Hengda Real Estate of RMB365.19 billion, representing approximately 14.11% of the enlarged equity of Hengda Real Estate. Upon completion of the Third Round Capital Increase, the Investors will have subscribed for new capital in Hengda Real Estate in an aggregated amount of RMB130.0 billion, in return for an aggregate of approximately 36.54% of the enlarged equity interest of Hengda Real Estate. Kailong Real Estate will be interested in approximately 63.46% of the equity interest in Hengda Real Estate and Hengda Real Estate will remain a subsidiary of the Group. Under the terms of the Third Round Investment Agreements, Kailong Real Estate and Hengda Real Estate have undertaken to the Third Round Investors that the net profit of Hengda Real Estate after deducting the non-recurring gains and losses for the three financial years of 2018,

2019 and

2020 will not be less than RMB50.0 billion, RMB55.0 billion and RMB60.0 billion, respectively. The successful completion of the three rounds of capital increase demonstrates the confidence of the Investors on the future prospects of Hengda Real Estate. C

1 C Earlier this year, the Company commenced its strategic transition, which proposed to firmly implement changes to the Company'

s development strategy and model. In its development strategy, the Company will shift from pursuing '

'

scale'

'

to pursuing '

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scale + profitability'

'

and in its development model, the Company will change from the past high-debt, high-leverage, high-turnover and low-cost ('

'

three-high and one-low'

'

) development model to '

'

three-low and one high'

'

model, i.e. low-debt, low-leverage, low-cost and high-turnover model. Benefiting from the three rounds of capital increase, the net debt ratio of Hengda Real Estate will be reduced significantly and its capital structure will be further improved. The capital and financial costs are expected to continue to decline. At the same time, the Company will continue to strengthen internal management and increase operation efficiencies to further reduce administrative and sales cost ratios, and continuously improve product quality and value, to deliver high quality growth, which will lay the foundation for accomplishing the performance undertaking and the continuous development of the Company. In accordance with Chapter