LANDSEA GREEN PROPERTIES CO., LTD. 朗詩綠色地產有限公司 (Incorporated in Bermuda with limited liability) (Stock code: 106)

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1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement. LANDSEA GREEN PROPERTIES CO., LTD. 朗詩綠色地產有限公司 (Incorporated in Bermuda with limited liability) (Stock code: 106) CONTINUING CONNECTED TRANSACTIONS On 25 December 2017, the Company entered into the Project Management Services Agreement with Landsea Group, pursuant to which the Group shall provide Development and Construction Entrusted Management Services and Sales Agency Services to Landsea Group and its subsidiaries. On 25 December 2017, the Company entered into the Properties Services and Consulting Agreement with Landsea Group, pursuant to which Landsea Group and its subsidiaries shall provide Properties Services and Properties Consulting Services to the Group. Landsea Group is the controlling Shareholder of the Company, which is deemed to be interested in approximately 62% of the issued share capital of the Company as at the date of this announcement. Therefore, Landsea Group is a connected person of the Company and the transactions contemplated under the Project Management Services Agreement and Properties Services and Consulting Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules. LISTING RULES IMPLICATIONS As the applicable ratios calculated in relation to the respective annual transaction amount under the Project Management Services Agreement and Properties Services and Consulting Agreement exceed 0.1% but are less than 5%, the transactions contemplated under the Project Management Services Agreement and Properties Services and Consulting Agreement are subject to the reporting and announcement requirements but exempt from the independent shareholders approval requirement under Chapter 14A of the Listing Rules. 1

2 PROJECT MANAGEMENT SERVICES AGREEMENT Date 25 December 2017 Parties (1) the Company; and (2) Landsea Group Subject matter The Company and its subsidiaries shall provide Development and Construction Entrusted Management Services and Sales Agency Services to Landsea Group and its subsidiaries. The Development and Construction Entrusted Management Services include: (1) project management services at early stage, including customers survey, project positioning planning, planning and design management and project prophase management; (ii) sales management, including operation and planning management and customers services and supervision; (iii) construction and delivery management, including procurement management, cost control, engineering construction management, completion acceptance and delivery management, customers services and maintenance management; (iv) other management services, including administration management, human resources management, drawings and files management and financial management; and (v) financing consulting services. Sales Agency Services including acting as sales agent for Landsea Group for the sale of its projects at the price mutually agreed. Pricing and payment Pursuant to the Project Management Services Agreement, (i) the price for provision of Development and Construction Entrusted Management Services by the Group shall be based on the prevailing market price of the similar services provided by the Group, which shall be no less favourable than that offered by the Group to independent third parties; and (ii) the price for provision of Sales Agency Services for sale of projects shall be determined according to the standard price based on market practice. In order to make sure the prices actually charged are on normal commercial terms and are not less favourable than those offered by the Group to independent third parties, the Group will conduct inspection to review and assess whether the services are carried out pursuant to the relevant agreement and are not less favourable than those terms offered to independent third parties before entering into any new transaction. The payment terms of Development and Construction Entrusted Management Services will be based on normal commercial terms and common practice, and are not less favourable than those terms offered by the Group to independent third parties. 2

3 Term The fixed term of the Project Management Services Agreement is three years commencing from 25 December 2017 to 24 December Annual caps The respective annual caps for the Development and Construction Entrusted Management Services and Sales Agency Services under the Project Management Services Agreement for each of the three years commencing from 25 December 2017 to 24 December 2020 are as below: Period Annual cap RMB million 25 December 2017 to 24 December December 2018 to 24 December December 2019 to 24 December The annual caps for (i) provision of the Development and Construction Entrusted Management Services are estimated based on the expected demand for project development and management services of Landsea Group by reference to the services fee previously charged and after taking into account the prevailing market price; and (ii) the Sales Agency Services are calculated by reference to the demand for project sales agent of Landsea Group and the standard price based on market practice. PROPERTIES SERVICES AND CONSULTING AGREEMENT Date 25 December 2017 Parties (3) the Company; and (4) Landsea Group Subject matter The Company and its subsidiaries will entrust Landsea Group and its subsidiaries with the properties services and properties consulting services during the development and construction of the properties development projects of the Group. Properties Services and Properties Consulting Services include (i) marketing and associated services, including customer reception, order maintenance, cleaning and environment sanitizing, greening maintenance, comprehensive maintenance; (ii) site supervision services, including site entrance guard services, site inspection services; and (ii) other services at the 3

4 early preparation stage of project, including services before delivery, materials procurement services and prophase properties services. Pricing and payment The price for provision of Properties Services and Properties Consulting Services by Landsea Group pursuant to the Properties Services and Consulting Agreement will be determined based on the prevailing market price or on the pricing standard provided by Landsea Group to independent third parties, and will be not higher than the price provided by Landsea Group to independent third parties. The payment terms of the Properties Services and Properties Consulting Services will be on normal commercial terms and common practice, and are not higher than those terms offered by the Group to independent third parties. The pricing and payment terms are mainly based on (1) the price previously charged by Landsea Group to independent third parties; and (2) arm s length negotiation by taking into account the market price for similar services charged by Landsea Group from independent third parties. In order to make sure the service prices charged by Landsea Group are on normal commercial terms and are not less favourable than those offered to independent third parties, the Group will ask quotation from independent third parties and conduct inspection to review and assess whether the services are carried out pursuant to the relevant agreement and are not less favourable than those terms offered to independent third parties before entering into any new transaction. Term The fixed term of the Properties Services and Consulting Agreement is three years commencing from 1 January 2018 to 31 December Annual caps The annual caps for the Properties Services and Properties Consulting Services under the Properties Services and Consulting Agreement for each of the three years commencing from 1 January 2018 to 31 December 2020 are as below: Period Annual cap RMB million Year ending 31 December Year ending 31 December Year ending 31 December The annual caps are determined by reference to the estimated annual sales demand of the Group for the years ending 31 December

5 REASONS FOR ENTERING INTO THE PROJECT MANAGEMENT SERVICES AGREEMENT AND PROPERTIES SERVICES AND CONSULTING AGREEMENT The Group is principally engaged in property development in the PRC and the United States. The Company is the listed platform under Landsea Group engaging in green residential property development business. The property development business of the Group in the PRC has only commenced since the acquisition by Landsea Group in 2013 and the Group only possess the Chinese property service enterprise qualification certificate (one-year level three certificate). Property development business in certain districts requires qualification of level two or above. Landsea Group holds level one qualification and the property development projects carried out by Landsea Group have no conflict with the business of the Group and are not competing business. As disclosed in the circular of the Company dated 14 March 2014, the majority of the property development and management staff of Landsea Group has been transferred to the Group and the expertise and know-how of green residential property development of Landsea Group has also been transferred to the Group. Therefore, Landsea Group has no property development and management staff and has to outsourcing the relevant business. The Group gross profit ratio of the services fee for providing project development and management services to Landsea Group pursuant to the Project Management Services Agreement may exceed 50% which is in line with the market trend. Therefore, the Group will gain extra income and cash from such arrangement. In addition, the management and sales staff for green properties products of the sales and marketing company of the Group accounts for over 60%, who are experienced in sales and marketing of green properties products, which is a superior advantage over other sales and marketing agents. The Group is qualified to provide more efficient sales agent services to Landsea Group for its green properties development projects and can also bring return to the Group. Furthermore, as the properties company of the Group has only been incorporated in the ende of 2014, it only possesses the Chinese property service enterprise qualification certificate (oneyear level three certificate). The properties services and consulting services in certain districts requires qualification of level two or above, hence outsourcing services are required. Landsea Group holds level one qualification which can provide relevant services based on prevailing market price. Based on the foregoing, the Directors (including independent non-executive Directors but excluding Mr. Tian Ming) believe that the terms of the Project Management Services Agreement and Properties Services and Consulting Agreement are in the ordinary and usual course of the business of the Company, on normal commercial terms, the terms of which are fair and reasonable and are in the best interests of the Company and its shareholders as a whole. 5

6 GENERAL Mr. Tian Ming, executive Director, who is beneficially interested in approximately 29.06% of Landsea Group, was deemed to have interest in the transactions contemplated under the Project Management Services Agreement and Properties Services and Consulting Agreement at the Board meeting for approving the same. Therefore, Mr. Tian Ming has abstained from voting in respective of the resolutions for approving the Project Management Services Agreement and Properties Services and Consulting Agreement. LISTING RULES IMPLICATIONS As the applicable ratios calculated in relation to the respective annual transaction amount under the Project Management Services Agreement and Properties Services and Consulting Agreement exceed 0.1% but are less than 5%, the transactions contemplated under the Project Management Services Agreement and Properties Services and Consulting Agreement are subject to the reporting and announcement requirements but exempt from the independent shareholders approval requirement under Chapter 14A of the Listing Rules. DEFINITIONS In this announcement, unless the context otherwise requires, the following terms shall have the meanings as set out below: Board Company connected person(s) Development and Construction Entrusted Management Services and Sales Agency Services Director(s) Group Hong Kong the board of Directors Landsea Green Properties Co., Ltd., a company incorporated in Bermuda with limited liability, the shares of which are listed on the main board of the Stock Exchange (stock code: 106) has the meaning as defined under the Listing Rules the development and construction entrusted management services and sales agency services to be provided by the Group to Landsea Group or its subsidiaries pursuant to the terms of the Project Management Services Agreement the director(s) of the Company the Company and its subsidiaries the Hong Kong Special Administrative Region of the People s Republic of China 6

7 Landsea Group Listing Rules PRC Project Management Services Agreement Properties Services and Consulting Agreement Properties Services and Properties Consulting Services Shareholder(s) Stock Exchange 朗詩集團股份有限公司 (Landsea Group Co., Ltd.*), a company established in the PRC with limited liability, the ultimate controlling shareholder of the Company the Rules Governing the Listing of Securities on the Stock Exchange the People s Republic of China which, for the purpose of this announcement, excludes Hong Kong, the Macau Special Administrative Region of the People s Republic of China and Taiwan the framework agreement in relation to the development and construction entrusted management services and sales agency services entered into by the Company and Landsea Group on 25 December 2017 the framework agreement in relation to the properties services and properties consulting agreement entered into by the Company and Landsea Group on 25 December 2017 the Properties Services and Properties Consulting Services to be provided by Landsea Group or its subsidiaries to the Group pursuant to the terms of the Properties Services and Consulting Agreement holder(s) of the shares of the Company The Stock Exchange of Hong Kong Limited % percentage By order of the Board Landsea Green Properties Co., Ltd. Company Secretary Chan Yuen Ying, Stella Hong Kong, 25 December 2017 As at the date of this announcement, the Board comprises five executive Directors, namely Mr. Tian Ming, Mr. Xiang Jiong, Ms. Shen Leying, Mr. Xie Yuanjian and Ms. Zhou Qin, one nonexecutive Director, namely Mr. Zhou Yimin, and three independent non-executive Directors, namely Mr. Xu Xiaonian, Mr. Ding Yuan and Mr. Lee Kwan Hung. 7