Common use of REASONS FOR AND BENEFITS OF THE DISPOSAL Clause in Contracts

REASONS FOR AND BENEFITS OF THE DISPOSAL. The Company is principally engaged in investment holding and the Group is principally engaged in the property development of properties for sale in the PRC, the investment of commercial and residential properties located in the PRC for rental income potential and/or for capital appreciation, the provision of project management services in the PRC and the provision of investment services in relation to investment in and sale of property development and old village land redevelopment projects in the PRC. The Disposal Company was in a net liability position as at 31 March 2023 and this position is expected to remain at the same level upon settlement of the legal case amounted to RMB296,304,000 (equivalent to approximately HK$323,920,000), when Hengxiang Real Estate will transfer the properties held under the Anshan Coastal Xintiandi Project for settlement purposes as disclosed under the section headed “Information on the Disposal Company” in this announcement. The net liability position of the Disposal Company is mainly attributable to the trade and other payables in the amount of approximately HK$368 million and tax payable in the amount of approximately HK$37.6 million as at 31 March 2023. As the Disposal Company will not have any operations subsequent to the transfer of the Anshan Coastal Xintiandi Project for settlement of the legal case and the completion of the title transfer process of the Beijing Bay Project, its net liability position is expected to worsen when it continues to incur day-to-day expenses. Given the current financial position and the future prospects of the Disposal Company, the Board is of the view that the Disposal will enable the Group to realise its investment in the Disposal Company and improve the balance sheet of the Group as the Disposal Company will cease to be a subsidiary of the Group and the assets and liabilities of the Disposal Company will no longer be consolidated into the consolidated financial statements of the Group. Following Completion, the Group will continue to operate the following projects in terms of its operations in the property development segment: Project Use Market value as at 31 March 2023 Development stage GFA of the development Total revenue expected to be recognised for the whole project Timeline of revenue recognition Whether the revenue will be consolidated into the Company’s financial statements (RMB’000) (sq.m.) (RMB’000) Shahekou District, Dalian Mixed 50,700 Completed for sale 217,200 55,620 Starting from fourth quarter of 2024 Yes Jinzhou District, Dalian Medical and hygiene 172,000 To be developed 123,046 250,000 Starting from fourth quarter of 2025 Yes Sujiatun District, Shenyang Mixed 598,000 To be developed 1,914,900 5,000,000 Starting from third quarter of 2027 Yes Chaoyang District, Beijing* Commercial No commercial value as no relevant State- owned Land Use Rights Certificate was granted To be developed 45,000 6,800,000 Starting from 2030 Yes Remaining parts of the Chongqing Silo City Project# Residential 29,085 Completed for sale 12,291 35,333 Starting from second quarter of 2024 Yes Remaining parts of the Dalian Jianzhu Project# Residential 73,800 Completed for sale 4,697 62,233 Starting from first quarter of 2025 Yes * The Group intends to develop the project for the investment purpose and it is expected that the property will generate aggregate rental income in the estimated amount of RMB6.8 billion over the course of 35 years starting from 2030. # As disclosed under the section headed “Information of the Disposal Company” of this announcement, approximately 29.8% of the Chongqing Silo City Project and approximately 24.05% of the Dalian Jianzhu Project will be transferred by the Group in settlement of a legal case and the remaining parts of the Chongqing Silo City Project and the Xxxxxx Xxxxxxx Project will continue to be operated by the Group. As such, the figures stated herein represent the value for the projects remaining after such transfer. The Group is expected to continue to generate its revenue mainly from its property development segment, which involves the sale of completed properties, and property investment segment, which involves the investment of the Group in commercial and residential properties located in the PRC for rental income potential and/or capital appreciation. The Group develops quality residential estates for upper to middle class domestic market for its property development segment. For its property investment segment, the Group holds some of its properties, including commercial and residential properties located in the PRC, for investment purposes. In managing its investment property portfolio, the Group takes into account the long-term growth potential and overall market conditions of the properties and the Group may sell some of the investment properties when it is in its interests to do so. For the six months ended 30 September 2023, the revenue derived from its property development segment represented approximately 5.2% of the total revenue of the Company for the period, whereas the revenue derived from its property investment segment represented approximately 94.8% of the total revenue of the Company for the period. The revenue derived from the Group’s property development segment contracted for the six months ended 30 September 2023 in view of current down cycle of the PRC real estate industry, such that the Group has adopted a more conservative approach in investing in new development projects. However, the Group continues to look for opportunities to realise its investment in its development projects as part of the Group’s business activities in the property development segment in order to reduce its debts. As illustrated in the table above, Shahekou District Dalian project, the remaining parts of Chongqing Silo City Project and the Dalian Jianzhu Project are expected to generate revenue for the Group for the financial year ending 31 March 2025. It is estimated that for the financial year ending 31 March 2025

REASONS FOR AND BENEFITS OF THE DISPOSAL. The Company Board considers that the online media advertising agency business operated by Xxxx Media is principally engaged in investment holding and not the core business that the Group is principally engaged focusing on. The disposal of Xxxx Media will allow the Group to concentrate its financial and management resources on its core business, hence would effectively reduce the Group’s operating risks outside its main business. The Directors (including the independent non-executive Directors but excluding Xx. Xxx who has abstained from voting in the property development of properties for sale in the PRC, the investment of commercial and residential properties located in the PRC for rental income potential and/or for capital appreciation, the provision of project management services in the PRC and the provision of investment services in relation to investment in and sale of property development and old village land redevelopment projects in the PRC. The Disposal Company was in a net liability position as at 31 March 2023 and this position is expected to remain at the same level upon settlement of the legal case amounted to RMB296,304,000 (equivalent to approximately HK$323,920,000Board), when Hengxiang Real Estate will transfer the properties held under the Anshan Coastal Xintiandi Project for settlement purposes as disclosed under the section headed “Information on the Disposal Company” in this announcement. The net liability position of the Disposal Company is mainly attributable to the trade and other payables in the amount of approximately HK$368 million and tax payable in the amount of approximately HK$37.6 million as at 31 March 2023. As the Disposal Company will not have any operations subsequent to the transfer of the Anshan Coastal Xintiandi Project for settlement of the legal case and the completion of the title transfer process of the Beijing Bay Project, its net liability position is expected to worsen when it continues to incur day-to-day expenses. Given the current financial position and the future prospects of the Disposal Company, the Board is are of the view that the Disposal will enable terms of the Group to realise its investment Equity Transfer Agreement are fair and reasonable and the transaction contemplated thereunder is on normal commercial terms or better and is in the Disposal interests of the Company and improve the balance sheet its shareholders as a whole. FINANCIAL EFFECTS OF THE DISPOSAL AND USE OF PROCEEDS Upon completion of the Group as the Disposal Company Disposal, Xxxx Media will cease to be a subsidiary of the Group Company and the assets and liabilities Group will cease to have any interest in Xxxx Media. The financial results of the Disposal Company Xxxx Media will no longer be consolidated into the consolidated financial statements of the Group. Following CompletionWith reference to the net assets of Xxxx Media of approximately RMB57.9 million as at 30 April 2021, the Group will continue to operate the following projects in terms of its operations in the property development segment: Project Use Market value as at 31 March 2023 Development stage GFA of the development Total revenue is expected to record a net gain of approximately RMB10.3 million from the Disposal after deducting expenses in relation to the Disposal. The actual gain or loss from the Disposal may be recognised for different from the whole project Timeline of revenue recognition Whether above and subject to the revenue will be consolidated into review and final audit by the Company’s financial statements (RMB’000) (sq.m.) (RMB’000) Shahekou District, Dalian Mixed 50,700 Completed for sale 217,200 55,620 Starting from fourth quarter of 2024 Yes Jinzhou District, Dalian Medical and hygiene 172,000 To be developed 123,046 250,000 Starting from fourth quarter of 2025 Yes Sujiatun District, Shenyang Mixed 598,000 To be developed 1,914,900 5,000,000 Starting from third quarter of 2027 Yes Chaoyang District, Beijing* Commercial No commercial value as no relevant State- owned Land Use Rights Certificate was granted To be developed 45,000 6,800,000 Starting from 2030 Yes Remaining parts of the Chongqing Silo City Project# Residential 29,085 Completed for sale 12,291 35,333 Starting from second quarter of 2024 Yes Remaining parts of the Dalian Jianzhu Project# Residential 73,800 Completed for sale 4,697 62,233 Starting from first quarter of 2025 Yes * The Group intends to develop the project for the investment purpose and it auditor. It is expected that the property net proceeds from the Disposal will generate aggregate rental income be used for re-investment for other potential investments and/or business opportunities that may arise and as general working capital of the Group. INFORMATION OF THE PARTIES The Group The Company is a company incorporated in the estimated amount Cayman Islands with limited liability, and the shares of RMB6.8 billion over which are listed on the course Main Board of 35 years starting from 2030the Stock Exchange. # As disclosed The Group is principally engaged in (i) the construction and operation of B2B e-commerce platforms for the trading of, among others, consumer goods, agricultural products, chemicals, plastic raw materials, and black and non-ferrous metals; and (ii) the provision of related services such as finance, logistics, cross-border trading, warehousing and supply chain management in the PRC. The Group is also engaged in the development and operation of large-scale, consumer product-focused wholesale shopping malls in the PRC. The Purchaser Xxxx Venture is a company established under the section headed “Information laws of the Disposal Company” PRC with limited liability and principally engages in the provision of venture capital consulting services and venture management services for venture enterprises. As at the date of this announcement, approximately 29.8the Purchaser is held as to 99.95% by Xx. Xxx, who is the ultimate beneficial owner of the Chongqing Silo City Project and approximately 24.05% of the Dalian Jianzhu Project will be transferred by the Group in settlement of Purchaser. Xxxx Media Xxxx Media is a legal case and the remaining parts of the Chongqing Silo City Project and the Xxxxxx Xxxxxxx Project will continue to be operated by the Group. As such, the figures stated herein represent the value for the projects remaining after such transfer. The Group is expected to continue to generate its revenue mainly from its property development segment, which involves the sale of completed properties, and property investment segment, which involves the investment of the Group in commercial and residential properties located company established in the PRC for rental income potential and/or capital appreciationwith limited liability and is an indirect non- wholly-owned subsidiary of the Company. The Group develops quality residential estates for upper to middle class domestic market for its property development segment. For its property investment segment, Xxxx Media principally engages in the Group holds some provision of its properties, including commercial online advertising and residential properties located integrated marketing solutions consulting services in the PRC. As at the date of this announcement, Xxxx Media is owned as to 86%, 3.6324%, 3.6324%, 3.6317%, 1.7414% and 1.3621% by the Company, Xxx Xxx (劉焱), Xxxx Xxxxxxxxx (趙向東), Xxxx Xxxxxx (陳作濤), Xxxx Xxxxx (陳程) and Xx Xxxxxxx (齊志平), respectively. Set out below is the unaudited financial information of Xxxx Media for investment purposes. In managing its investment property portfolio, the Group takes into account the long-term growth potential and overall market conditions of the properties year ended 31 December 2019 and the Group may sell some financial information of the investment properties when it is in its interests to do so. For the six months ended 30 September 2023, the revenue derived from its property development segment represented approximately 5.2% of the total revenue of the Company Xxxx Media for the period, whereas the revenue derived from its property investment segment represented approximately 94.8% of the total revenue of the Company for the period. The revenue derived year ended 31 December 2020 which is obtained from the Group’s property development segment contracted for audited consolidated financial statements: For the six months year ended 31 December 2020 2019 RMB’000 RMB’000 Revenue 32,486 10,711 Net profit before taxation 8,334 2,050 Net profit after taxation 6,210 1,967 The net asset value of Xxxx Media as at 30 September 2023 April 2021 was approximately RMB57,871,000. LISTING RULE IMPLICATIONS As at the date of this announcement, Xx. Xxx holds 99.95% equity interest in view of current down cycle the Purchaser. Xx. Xxx is an executive Director, co-chairman of the PRC real estate industryBoard, such that co-chief executive officer and a controlling shareholder (as defined under the Group has adopted a more conservative approach in investing in new development projectsListing Rules) of the Company. HoweverAccordingly, the Group continues to look for opportunities to realise its investment in its development projects as part Purchaser is a connected person of the Group’s business activities in Company and the property development segment in order to reduce its debtsDisposal constitutes a connected transaction of the Company. As illustrated one or more of the applicable percentage ratios in respect of the table above, Shahekou District Dalian projectDisposal is higher than 0.1% but less than 5%, the remaining parts Disposal is subject to the reporting and announcement requirements and is exempt from the circular, independent financial advice and independent shareholders’ approval requirements under Chapter 14A of Chongqing Silo City Project and the Dalian Jianzhu Project are expected to generate revenue for the Group for the financial year ending 31 March 2025. It is estimated that for the financial year ending 31 March 2025Listing Rules.

REASONS FOR AND BENEFITS OF THE DISPOSAL. The principal activities of the Group comprise the distribution and maintenance of a wide range of machine tools, precision measuring instruments, cutting tools, electronics equipment, professional tools and other machinery for the manufacturing industry in Hong Kong, the PRC and Southeast Asia. The Purchaser was established in 1934 and is one of the leading manufacturers for measuring instruments in the world, and has a long-standing relationship with the Group for over 50 years. The Company, through the Vendor, established the Target Company is principally engaged with the Purchaser in investment holding 2003 to provide a complete range of precision measuring instruments and related equipment to its customers in Hong Kong and the PRC. The Target Company has been an authorised distributor of the products of the Purchaser in Southern China. To the best knowledge, information and belief of the Directors having made all reasonable enquiries, due to the keen competition in the measuring equipment market in Southern China in recent years, the Purchaser has decided to restructure its business in Southern China by, among others, consolidating its interests in the Target Group. As an incentive for the Group to dispose of its interests in the Target Company, the Purchaser has also agreed to appoint the Group as its preferred distributor in Southern China after the Disposal. Given that the Group is principally engaged already the authorised distributor for the Purchaser’s products in the property development of properties for sale in the PRCCentral and Northern China, the investment of commercial and residential properties located in aforesaid preferential treatment would enable the PRC for rental income potential and/or for capital appreciation, the provision of project management services in the PRC and the provision of investment services in relation Group to investment in and sale of property development and old village land redevelopment projects expand its distribution business in the PRC. The Disposal Company was in a net liability position as at 31 March 2023 and this position is expected to remain at the same level upon settlement Furthermore, after cessation of the legal case amounted cooperation arrangement with the Purchaser in the Target Company upon Completion, the Group would be able to RMB296,304,000 (equivalent develop and expand its own measuring instrument business in the PRC without any contractual restriction. In addition, the proceeds generated from the Disposal would allow the Group to approximately HK$323,920,000)reduce its indebtedness level, when Hengxiang Real Estate will transfer explore and pursue new business opportunities and allocate its resources to expand its existing business. The intended use of proceeds from the properties held under the Anshan Coastal Xintiandi Project for settlement purposes as disclosed under Disposal is set out in the section headed “Information Intended Use of Proceeds” below. Based on the Disposal Company” in this announcement. The net liability position of the Disposal Company is mainly attributable to the trade and other payables in the amount of approximately HK$368 million and tax payable in the amount of approximately HK$37.6 million as at 31 March 2023. As the Disposal Company will not have any operations subsequent to the transfer of the Anshan Coastal Xintiandi Project for settlement of the legal case and the completion of the title transfer process of the Beijing Bay Project, its net liability position is expected to worsen when it continues to incur day-to-day expenses. Given the current financial position and the future prospects of the Disposal Companyabove, the Board is of the view Directors consider that the Disposal will enable contemplated by the Group to realise its investment Sale and Purchase Agreement is on normal commercial terms and the terms of the Sale and Purchase Agreement are fair and reasonable and are in the Disposal Company and improve the balance sheet of the Group as the Disposal Company will cease to be a subsidiary of the Group and the assets and liabilities of the Disposal Company will no longer be consolidated into the consolidated financial statements of the Group. Following Completion, the Group will continue to operate the following projects in terms of its operations in the property development segment: Project Use Market value as at 31 March 2023 Development stage GFA of the development Total revenue expected to be recognised for the whole project Timeline of revenue recognition Whether the revenue will be consolidated into the Company’s financial statements (RMB’000) (sq.m.) (RMB’000) Shahekou District, Dalian Mixed 50,700 Completed for sale 217,200 55,620 Starting from fourth quarter of 2024 Yes Jinzhou District, Dalian Medical and hygiene 172,000 To be developed 123,046 250,000 Starting from fourth quarter of 2025 Yes Sujiatun District, Shenyang Mixed 598,000 To be developed 1,914,900 5,000,000 Starting from third quarter of 2027 Yes Chaoyang District, Beijing* Commercial No commercial value as no relevant State- owned Land Use Rights Certificate was granted To be developed 45,000 6,800,000 Starting from 2030 Yes Remaining parts of the Chongqing Silo City Project# Residential 29,085 Completed for sale 12,291 35,333 Starting from second quarter of 2024 Yes Remaining parts of the Dalian Jianzhu Project# Residential 73,800 Completed for sale 4,697 62,233 Starting from first quarter of 2025 Yes * The Group intends to develop the project for the investment purpose and it is expected that the property will generate aggregate rental income in the estimated amount of RMB6.8 billion over the course of 35 years starting from 2030. # As disclosed under the section headed “Information of the Disposal Company” of this announcement, approximately 29.8% of the Chongqing Silo City Project and approximately 24.05% of the Dalian Jianzhu Project will be transferred by the Group in settlement of a legal case and the remaining parts of the Chongqing Silo City Project and the Xxxxxx Xxxxxxx Project will continue to be operated by the Group. As such, the figures stated herein represent the value for the projects remaining after such transfer. The Group is expected to continue to generate its revenue mainly from its property development segment, which involves the sale of completed properties, and property investment segment, which involves the investment of the Group in commercial and residential properties located in the PRC for rental income potential and/or capital appreciation. The Group develops quality residential estates for upper to middle class domestic market for its property development segment. For its property investment segment, the Group holds some of its properties, including commercial and residential properties located in the PRC, for investment purposes. In managing its investment property portfolio, the Group takes into account the long-term growth potential and overall market conditions of the properties and the Group may sell some of the investment properties when it is in its interests to do so. For the six months ended 30 September 2023, the revenue derived from its property development segment represented approximately 5.2% of the total revenue of the Company for the period, whereas the revenue derived from its property investment segment represented approximately 94.8% of the total revenue of the Company for the period. The revenue derived from the Group’s property development segment contracted for the six months ended 30 September 2023 in view of current down cycle of the PRC real estate industry, such that the Group has adopted a more conservative approach in investing in new development projects. However, the Group continues to look for opportunities to realise its investment in its development projects as part of the Group’s business activities in the property development segment in order to reduce its debts. As illustrated in the table above, Shahekou District Dalian project, the remaining parts of Chongqing Silo City Project and the Dalian Jianzhu Project are expected to generate revenue for the Group for the financial year ending 31 March 2025. It is estimated that for the financial year ending 31 March 2025Shareholders as a whole.

REASONS FOR AND BENEFITS OF THE DISPOSAL. The Company is principally engaged in investment holding and the Group is principally engaged in the property software development of properties for sale in the PRC, the investment of commercial and residential properties located in the PRC for rental income potential and/or for capital appreciation, the provision of project management services in the PRC and the provision of investment systems integration services relating to the media and non-media industries including financial institutions, enterprises and government departments. EC-Founder Group is principally engaged in relation to investment distribution of information products in Hong Kong and sale of property development and old village land redevelopment projects in the PRC. As the profit margin attributable to the software development business of the Group is higher than the profit margin attributable to the distribution of information products business of EC- Founder Group, the Directors consider that the Group should focus on its expertise in software development and provision of systems integration services relating to the media and non- media industries whereas EC-Founder Group should continue to focus on its distribution of information products in Hong Kong and the PRC. The Directors believe that the current market price of the Company’s shares does not fully reflect the intrinsic value of the Group’s interest in EC-Founder and that EC-Founder’s financial results may have an adverse effect on the Group’s financial results due to the existing vertical corporate shareholding structure. By unlocking this existing structure, the undesirable effect on the Company’s share price will be eliminated. More importantly, the Board believe that the simplified horizontal corporate shareholding structure will provide greater clarity to the shareholders and the market with regard to the principal business of each of the Company and EC-Founder and will potentially enhance investors’ interest in the Company and/or EC-Founder and as a result, may improve liquidity in the Company’s shares. Through reorganizing the existing vertical shareholding structure, the Directors believe that the Company may find it easier to attract strategic investors’ attention in the Group’s business. As a result of the Disposal, the Directors expect that the Group will record an unaudited gain from the Disposal Company was of approximately HK$7.7 million. The gain from the Disposal is calculated by taking into account the net asset value of EC-Founder and goodwill on acquisition of EC- Founder in a net liability position the Company’s audited financial statements as at 31 March 2023 and this position is expected to remain at the same level upon settlement of the legal case amounted to RMB296,304,000 (equivalent to approximately HK$323,920,000), when Hengxiang Real Estate will transfer the properties held under the Anshan Coastal Xintiandi Project for settlement purposes as disclosed under the section headed “Information on the Disposal Company” in this announcementDecember 2010. The net liability position of the Disposal Company is mainly attributable to the trade and other payables in the amount of approximately HK$368 million and tax payable in the amount of approximately HK$37.6 million as at 31 March 2023. As the Disposal Company will not have any operations subsequent to the transfer of the Anshan Coastal Xintiandi Project for settlement of the legal case and the completion of the title transfer process of the Beijing Bay Project, its net liability position is expected to worsen when it continues to incur day-to-day expenses. Given the current financial position and the future prospects of the Disposal Company, the Board is of the view that Proceeds from the Disposal will enable be used by the Group to realise its investment for the general working capital purposes. Currently, the Company owns 363,265,000 shares in the Disposal Company and improve the balance sheet EC-Founder, representing approximately 32.84% of the Group as total issued shares of EC-Founder. After Completion, the Disposal Company will cease to be a subsidiary of the Group and the assets and liabilities of the Disposal Company will no longer have any shareholding interests in EC-Founder. In view of the above and having considered the terms of the Disposal Agreement, the Directors (excluding the Independent Director whose view will be consolidated into based on the consolidated opinion of an independent financial statements adviser) consider that the Disposal is (i) in the ordinary and usual course of business of the Group. Following Completion; (ii) on normal commercial terms; and (iii) fair and reasonable so far as the Independent Shareholders are concerned, the Group will continue to operate the following projects in terms of its operations and in the property development segment: Project Use Market value as at 31 March 2023 Development stage GFA of the development Total revenue expected to be recognised for the whole project Timeline of revenue recognition Whether the revenue will be consolidated into the Company’s financial statements (RMB’000) (sq.m.) (RMB’000) Shahekou District, Dalian Mixed 50,700 Completed for sale 217,200 55,620 Starting from fourth quarter of 2024 Yes Jinzhou District, Dalian Medical and hygiene 172,000 To be developed 123,046 250,000 Starting from fourth quarter of 2025 Yes Sujiatun District, Shenyang Mixed 598,000 To be developed 1,914,900 5,000,000 Starting from third quarter of 2027 Yes Chaoyang District, Beijing* Commercial No commercial value as no relevant State- owned Land Use Rights Certificate was granted To be developed 45,000 6,800,000 Starting from 2030 Yes Remaining parts of the Chongqing Silo City Project# Residential 29,085 Completed for sale 12,291 35,333 Starting from second quarter of 2024 Yes Remaining parts of the Dalian Jianzhu Project# Residential 73,800 Completed for sale 4,697 62,233 Starting from first quarter of 2025 Yes * The Group intends to develop the project for the investment purpose and it is expected that the property will generate aggregate rental income in the estimated amount of RMB6.8 billion over the course of 35 years starting from 2030. # As disclosed under the section headed “Information of the Disposal Company” of this announcement, approximately 29.8% of the Chongqing Silo City Project and approximately 24.05% of the Dalian Jianzhu Project will be transferred by the Group in settlement of a legal case and the remaining parts of the Chongqing Silo City Project and the Xxxxxx Xxxxxxx Project will continue to be operated by the Group. As such, the figures stated herein represent the value for the projects remaining after such transfer. The Group is expected to continue to generate its revenue mainly from its property development segment, which involves the sale of completed properties, and property investment segment, which involves the investment of the Group in commercial and residential properties located in the PRC for rental income potential and/or capital appreciation. The Group develops quality residential estates for upper to middle class domestic market for its property development segment. For its property investment segment, the Group holds some of its properties, including commercial and residential properties located in the PRC, for investment purposes. In managing its investment property portfolio, the Group takes into account the long-term growth potential and overall market conditions of the properties and the Group may sell some of the investment properties when it is in its interests to do so. For the six months ended 30 September 2023, the revenue derived from its property development segment represented approximately 5.2% of the total revenue of the Company for the period, whereas the revenue derived from and its property investment segment represented approximately 94.8% of the total revenue of the Company for the period. The revenue derived from the Group’s property development segment contracted for the six months ended 30 September 2023 in view of current down cycle of the PRC real estate industry, such that the Group has adopted shareholders as a more conservative approach in investing in new development projects. However, the Group continues to look for opportunities to realise its investment in its development projects as part of the Group’s business activities in the property development segment in order to reduce its debts. As illustrated in the table above, Shahekou District Dalian project, the remaining parts of Chongqing Silo City Project and the Dalian Jianzhu Project are expected to generate revenue for the Group for the financial year ending 31 March 2025. It is estimated that for the financial year ending 31 March 2025whole.

REASONS FOR AND BENEFITS OF THE DISPOSAL. The Company is principally engaged Against the backdrop of the outbreak of Coronavirus Disease 2019 in investment holding the PRC at the beginning of 2020, demand for hydraulic press products has been further affected by the conditions and growth of the industries in which Tianjin Tianduan’s customers operate, particularly the cyclical industries, which are influenced by macroeconomic factors within the PRC, such as government policy initiatives and the Group is principally engaged levels of fixed asset investment. Although the sector showed signs of fast resumption in industrial activities after the coronavirus pandemic was contained in the property PRC, it is expected that the growth of hydraulic press demand will be decelerated due to lingering economic uncertainty. Furthermore, the hydraulic press industry in the PRC is still intensely competitive and price sensitive. Tianjin Tianduan reported operating losses in last two years and has faced pricing and margin pressure from the impact of higher raw material costs and the sustained keen competition among local companies and domestic-based multinationals in the markets where it currently operates. Meanwhile, the volatility of relevant industries will expose Xxxxxxx Xxxxxxxx to uncertainty and potential instability with respect to its business performance and results of operations. It has been one of the Company’s business development strategies to make appropriate business decisions and adjustments according to the overall business environment. Considering the impact of properties for sale cyclicality and market conditions in the hydraulic press industry in the PRC, the investment of commercial and residential properties located in the PRC for rental income potential and/or for capital appreciation, the provision of project management services in the PRC and the provision of investment services in relation to investment in and sale of property development and old village land redevelopment projects in the PRC. The Disposal Company was in a net liability position as at 31 March 2023 and this position is expected to remain at the same level upon settlement of the legal case amounted to RMB296,304,000 (equivalent to approximately HK$323,920,000), when Hengxiang Real Estate will transfer the properties held under the Anshan Coastal Xintiandi Project for settlement purposes as disclosed under the section headed “Information on the Disposal Company” in this announcement. The net liability position of the Disposal Company is mainly attributable to the trade and other payables in the amount of approximately HK$368 million and tax payable in the amount of approximately HK$37.6 million as at 31 March 2023. As the Disposal Company will not have any operations subsequent to the transfer of the Anshan Coastal Xintiandi Project for settlement of the legal case and the completion of the title transfer process of the Beijing Bay Project, its net liability position is expected to worsen when it continues to incur day-to-day expenses. Given the current financial position and the future prospects of the Disposal Company, the Board is of the view Directors believe that the Disposal will enable may allow the Group Company to realise its investment in Tianjin Tianduan and further apply its resources for maintaining the Disposal Company and improve the balance sheet of the Group as the Disposal Company will cease to be a subsidiary of the Group and the assets and liabilities of the Disposal Company will no longer be consolidated into the consolidated financial statements existing businesses of the Group. Following CompletionAs Xx. Xxxxxx Wing Yui, Xxxxxx, non-executive Director, is a consultant of Messrs. Xxx Xxxx Xxx & Lo which provides legal and professional services to the Company in respect of the Disposal, he has voluntarily abstained from voting on the resolutions of the Board approving the Equity Transfer Agreement and the Disposal. The Directors consider that, although the Equity Transfer Agreement and the Disposal are not in the ordinary and usual course of business of the Group, the Group will continue to operate the following projects in terms of its operations the Equity Transfer Agreement are fair and reasonable, and that the Disposal is on normal commercial terms and in the property development segment: Project Use Market value as at 31 March 2023 Development stage GFA of the development Total revenue expected to be recognised for the whole project Timeline of revenue recognition Whether the revenue will be consolidated into the Company’s financial statements (RMB’000) (sq.m.) (RMB’000) Shahekou District, Dalian Mixed 50,700 Completed for sale 217,200 55,620 Starting from fourth quarter of 2024 Yes Jinzhou District, Dalian Medical and hygiene 172,000 To be developed 123,046 250,000 Starting from fourth quarter of 2025 Yes Sujiatun District, Shenyang Mixed 598,000 To be developed 1,914,900 5,000,000 Starting from third quarter of 2027 Yes Chaoyang District, Beijing* Commercial No commercial value as no relevant State- owned Land Use Rights Certificate was granted To be developed 45,000 6,800,000 Starting from 2030 Yes Remaining parts of the Chongqing Silo City Project# Residential 29,085 Completed for sale 12,291 35,333 Starting from second quarter of 2024 Yes Remaining parts of the Dalian Jianzhu Project# Residential 73,800 Completed for sale 4,697 62,233 Starting from first quarter of 2025 Yes * The Group intends to develop the project for the investment purpose and it is expected that the property will generate aggregate rental income in the estimated amount of RMB6.8 billion over the course of 35 years starting from 2030. # As disclosed under the section headed “Information of the Disposal Company” of this announcement, approximately 29.8% of the Chongqing Silo City Project and approximately 24.05% of the Dalian Jianzhu Project will be transferred by the Group in settlement of a legal case and the remaining parts of the Chongqing Silo City Project and the Xxxxxx Xxxxxxx Project will continue to be operated by the Group. As such, the figures stated herein represent the value for the projects remaining after such transfer. The Group is expected to continue to generate its revenue mainly from its property development segment, which involves the sale of completed properties, and property investment segment, which involves the investment of the Group in commercial and residential properties located in the PRC for rental income potential and/or capital appreciation. The Group develops quality residential estates for upper to middle class domestic market for its property development segment. For its property investment segment, the Group holds some of its properties, including commercial and residential properties located in the PRC, for investment purposes. In managing its investment property portfolio, the Group takes into account the long-term growth potential and overall market conditions of the properties and the Group may sell some of the investment properties when it is in its interests to do so. For the six months ended 30 September 2023, the revenue derived from its property development segment represented approximately 5.2% of the total revenue of the Company for the period, whereas the revenue derived from its property investment segment represented approximately 94.8% of the total revenue of the Company for the period. The revenue derived from the Group’s property development segment contracted for the six months ended 30 September 2023 in view of current down cycle of the PRC real estate industry, such that the Group has adopted a more conservative approach in investing in new development projects. However, the Group continues to look for opportunities to realise its investment in its development projects as part of the Group’s business activities in the property development segment in order to reduce its debts. As illustrated in the table above, Shahekou District Dalian project, the remaining parts of Chongqing Silo City Project and the Dalian Jianzhu Project are expected to generate revenue for the Group for the financial year ending 31 March 2025. It is estimated that for the financial year ending 31 March 2025Shareholders as a whole.