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.

SHANGHAI ZENDAI PROPERTY LIMITED 上海証大房地產有限公司 (Incorporated in Bermuda with limited liability)

(Stock code: 755)

MAJOR TRANSACTION IN RELATION TO THE DISPOSAL OF EQUITY INTERESTS IN SUBSIDIARIES AND SALE LOANS THE DISPOSAL On 25 January 2017, the Vendors (collectively, the Company and Zendai Real Estate (an indirect wholly-owned subsidiary of the Company)) and the Purchaser entered into the Sale and Purchase Agreement pursuant to which the Purchaser has conditionally agreed to acquire and the Vendors have conditionally agreed to sell the Sale Shares and the Sale Loans at the Consideration of approximately HK$813.89 million.

LISTING RULES IMPLICATIONS As one of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules in respect of the Disposal is more than 25% but less than 75%, the Disposal constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and is subject to the reporting, announcement and shareholders’ approval requirements under the Listing Rules.

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A circular containing, among other things, (i) details of the Disposal; (ii) financial information of the Group; (iii) the valuation report on the Properties issued by an independent valuer; and (iv) other information as required under the Listing Rules, is expected to be despatched to the Shareholders on or before 23 February 2017 as additional time is required for the Company to prepare relevant information for inclusion in the circular.

INTRODUCTION On 25 January 2017, the Vendors (collectively, the Company and Zendai Real Estate (an indirect wholly-owned subsidiary of the Company)) and the Purchaser, entered into the Sale and Purchase Agreement pursuant to which the Purchaser has conditionally agreed to acquire and the Vendors have conditionally agreed to sell the Sale Shares and the Sale Loans at the Consideration of approximately HK$813.89 million.

THE SALE AND PURCHASE AGREEMENT Set out below are the principal terms of the Sale and Purchase Agreement: Date 25 January 2017 Parties Purchaser

:

欣樂房地產集團有限公司 (Xinle Real Estate Group Co. Limited*)

Vendors

:

(i)

the Company; and

(ii)

Zendai Real Estate

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Assets to be disposed of (i)

the Sales Shares comprising (a) the Myway Developments Sale Shares, being the entire equity interest in Myway Developments which was held by the Company as at the date of the Sale and Purchase Agreement; and (b) the Haimen Property Sale Shares, being approximately 9.09% equity interest in Haimen Property which was held by Zendai Real Estate as at the date of the Sale and Purchase Agreement; and

(ii)

the Sale Loans comprising (a) the Myway Developments Loan owed by Myway Developments to the Company; and (b) the Haimen Property Loan owed by Haimen Property to Zendai Real Estate and its affiliated companies.

Consideration and payment terms The Consideration for the Disposal is approximately HK$813.89 million, which comprises (i) the consideration for the Myway Developments Sale Shares of USD2.00 (equivalent to approximately HK$15.52); (ii) the consideration for the Haimen Property Sale Shares of RMB1.00 (equivalent to approximately HK$1.16); and (iii) the consideration for the Sale Loans of RMB700.00 million (equivalent to approximately HK$813.89 million), and had been/shall be settled in the following manner: (i)

as to RMB150.00 million (equivalent to approximately HK$174.41 million) as the earnest money for the Sale and Purchase Agreement paid by the Purchaser to a nominated account of the Vendors on 2 December 2016, which shall be, following the completion of the procedures as described in paragraphs (ii) and (iii) below, repaid by the Vendors to the Purchaser and subsequently be transferred into the account of Haimen Property and repaid to the Vendors before 30 March 2017 (or such other date as may be agreed between the Parties);

(ii)

as to USD2.00 (equivalent to approximately HK$15.52) and RMB1.00 (equivalent to approximately HK$1.16) to be paid by the Purchaser to the Vendors or the nominated account of the Vendors before 30 March 2017 (or such other date as may be agreed between the Parties); and

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(iii) as to the remaining portion of the Consideration in the amount of RMB550.00 million (equivalent to approximately HK$639.49 million) to be paid by Haimen Property to the Vendors before 30 March 2017 (or such other date as may be agreed between the Parties), which shall be obtained through application for loans with either the Purchaser or Haimen Property as the main financing body or other financing methods, and then be injected into Haimen Property. The Consideration was determined after arm’s length negotiations between the Parties and by making reference to, among others, (i) the unaudited net liabilities of the Disposal Group as at 30 September 2016 of approximately RMB110.92 million (equivalent to approximately HK$128.97 million); (ii) the adjusted unaudited net liabilities of the Disposal Group as at 30 September 2016 (after taking into account, among others, the appraised value of the Properties as of 30 November 2016 of approximately RMB1,180.40 million (equivalent to approximately HK$1,372.45 million as prepared by an independent valuer) of approximately RMB235.48 million (equivalent to approximately HK$273.79 million); (iii) the outstanding amount of the Sale Loans (adjusted for the portion owed by the Excluded Companies) as at 30 September 2016 in the amount of approximately RMB967.64 million (equivalent to approximately HK$1,125.07 million); and (iv) the recent financial performance of the Disposal Group. Conditions Precedent to completion of the Disposal Completion of the Disposal shall be conditional upon the fulfilment of the following conditions precedent: (i)

the spin-off of the Excluded Sale Assets from Haimen Property having been completed before 30 March 2017 (or such other date as may be agreed between the Parties) in accordance with the relevant laws in the PRC; and

(ii)

the resolution(s) approving the Sale and Purchase Agreement and the transactions contemplated thereunder having been passed by the Shareholders at the SGM by way of poll before 30 March 2017 (or such other date as may be agreed between the Parties).

None of the above conditions precedent is capable of being waived.

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In the event that the Company fails to obtain the Shareholders’ approval on the transactions contemplated under the Sale and Purchase Agreement before 30 March 2017 (or such other date as may be agreed between the Parties), the Sale and Purchase Agreement shall terminate and all rights and obligations of the Parties shall cease and no party shall be liable for the penalty for breach of contract, details of which are set out in the section below headed “Completion”. Completion Completion of the Disposal shall take place before 30 March 2017 (or such other date as may be agreed by the Parties) after the full payment of the Consideration as described in the section above headed “Consideration and payment terms” and the transfer of the title and ownership of the Disposal Group from the Vendors to the Purchaser. In the event that the Disposal fails to be completed before 30 March 2017 due to the Vendors’ responsibility, the Purchaser shall have the right to request the Vendors to pay a penalty amounting to 12% per annum of the earnest money in the amount of RMB150 million (equivalent to approximately HK$174.41 million) paid by the Purchaser for the period commencing from the date of payment of such earnest money and up to the date of the Vendors’ repayment of such earnest money. In the event that the Disposal fails be completed before 30 June 2017 due to the Vendors’ responsibility, the Vendors shall repay to the Purchaser the earnest money and the Sale and Purchase Agreement shall terminate. In the event that the Disposal fails to be completed before 30 March 2017 due to the Purchaser’s responsibility, the Vendors shall have the right to request the Purchaser to pay a penalty amounting to 12% per annum of the amount of RMB550.00 million (equivalent to approximately HK$639.49 million) payable by the Purchaser for the period commencing from 30 March 2017 up to the date of payment of such RMB550.00 million (equivalent to approximately HK$639.49 million) by the Purchaser. In the event that the Disposal fails to be completed before 30 June 2017 due to the Purchaser’s responsibility, the Vendors shall repay to the Purchaser the earnest money on interest-free basis and the Sale and Purchase Agreement shall terminate.

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INFORMATION ON THE DISPOSAL GROUP Myway Developments is an investment holding company incorporated in the British Virgin Islands with limited liability. As at the date of this announcement, Myway Developments is a direct wholly-owned subsidiary of the Company holding approximately 90.91% equity interest in Haimen Property. Haimen Property is a company incorporated in the PRC in 2003 with limited liability. As at the date of this announcement, Haimen Property is an indirect wholly-owned subsidiary of the Company being owned as to approximately 90.91% by Myway Developments and approximately 9.09% by Zendai Real Estate. The Disposal Group is principally engaged in the investment in the Project which involves the development of the Properties. The Properties are located in the Haimen Riverside New City District of Haimen city, the PRC, being in the south of Yangtze River, north of Haining Temple and east of the new administrative centre and central business district in Haimen city. The Properties comprise undeveloped land parcels with a total site area of approximately 449,799 square metres, and properties under development and properties for sale with a total gross floor area of approximately 292,799 square metres. The following table sets out the consolidated financial information of the Disposal Group for the two financial years ended 31 December 2014 and 2015: For the year ended 31 December 2015 2014 RMB ’000 RMB ’000 (approximately) (approximately) Loss before taxation

(142,735)

(4,519)

Loss after taxation

(144,981)

(18,837)

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The unaudited net liabilities of the Disposal Group as at 30 September 2016 amount to approximately RMB110.92 million (equivalent to approximately HK$128.97) million. The adjusted unaudited net liabilities of the Disposal Group as at 30 September 2016, after taking into account the valuation loss based on the valuation on the Properties as of 30 November 2016, as prepared by an independent valuer, in the appraised value of approximately RMB1,180.40 million (equivalent to approximately HK$1,372.45 million) and net of deferred taxation, amounts to approximately RMB235.48 million (equivalent to approximately HK$273.79 million). Accordingly, the aggregate of the adjusted unaudited net liabilities of the Disposal Group and the outstanding amount of the Sale Loans (adjusted for the portion owed by the Excluded Companies) as at 30 September 2016 amounts to approximately RMB732.20 million (equivalent to approximately HK$851.33 million).

INFORMATION ON THE PURCHASER The Purchaser is a company incorporated in the PRC in 1999 with limited liability with a registered capital of RMB300 million and is principally engaged in, among others, real estate development, construction consultancy and property management. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, each of the Purchaser and its ultimate beneficial owner(s) is a third party independent of the Company and its connected persons.

INFORMATION ON THE GROUP AND THE REASONS FOR THE DISPOSAL AND INTENDED USE OF PROCEEDS The Group is principally engaged in the development of commercial and residential properties for sale and ownership, investment and operation of hotel business, leasing, management and agency of commercial and residential properties in the PRC. The Group currently has development projects in various cities in the PRC which are in the Yangtze River Delta Economic Region as dominated by Shanghai and Nanjing cities.

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In recent years, the Group has been gradually withdrawing its business from the third and fourth tier cities in the PRC. It is the intention of the Group to continue such business strategy and focus its business development in the first and second tier cities in the PRC, in particular those in the Yangtze River Delta Economic Region, in the future. The Properties, which comprise certain undeveloped land parcels with a total site area of approximately 449,799 square metres and properties under development and properties for sale with a total gross floor area of approximately 292,799 square metres, are located in Haimen city, a city outside the first and second tiers in the PRC, and were initially planned to be developed for, among others, residential, commercial and recreational use. The development of the real estate market in Haimen city has been slow in the past ten years. As at the date of this announcement, the initial investment spent by the Group on Haimen Property since its establishment in 2003 has not been recovered. Further, as stated in the section above headed “Information on the Disposal Group”, the Disposal Group has continuously been loss making over the last few years and was in a net liabilities position as at 30 September 2016. Taking into account the above, the Directors are of the view that the future outlook of the real estate market in Haimen city would be uncertain and the Disposal represents a good opportunity for the Group to unlock the value in its investment in the Properties, the location of which is outside the future key development areas, and reallocate its resources to restructure its asset portfolio. It is intended that the net proceeds from the Disposal in the amount of approximately RMB699.57 million (equivalent to approximately HK$813.39 million) will be applied as to approximately RMB559.66 million (equivalent to approximately HK$650.71 million) for repayment of bank loans and as to approximately RMB139.91 million (equivalent to approximately HK$162.68 million) for general working capital of the Group. Based on the above, the Directors consider that the terms of the Disposal are fair and reasonable, on normal commercial terms, and in the interests of the Company and the Shareholders as a whole.

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FINANCIAL EFFECT OF THE DISPOSAL Upon completion of the Disposal, each member of the Disposal Group will cease to be a subsidiary of the Company and each of their respective financial results, assets and liabilities will no longer be included in the consolidated financial statements of the Group. The Group expects to record a loss from the Disposal of approximately HK$125.39 million (subject to audit), which is calculated with reference to (i) the difference between (a) the adjusted Consideration (net of the amount of repayment of the Sale Loans received during the period between 1 September 2016 and 30 September 2016) of approximately RMB679.85 million (equivalent to approximately HK$790.43 million); and (b) the aggregate of the unaudited consolidated net liabilities of the Disposal Group of approximately HK$128.96 million and the outstanding amount of the Sale Loans (adjusted for the portion owed by the Excluded Companies) as at 30 September 2016 of approximately HK$1,125.07 million; and (ii) the exchange gain to be released from the foreign exchange reserve of the Group as at 30 September 2016 of approximately HK$80.29 million. Shareholders should note that the actual amount of the loss from the Disposal to be recognised in the consolidated financial statements of the Company depends on, among others, the net asset value of the Disposal Group and the then exchange rate for converting the amount of the Sale Loans dominated in RMB into HK$ on the date of completion of the Disposal, and therefore will be subject to final audit.

LISTING RULES IMPLICATIONS As one of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules in respect of the Disposal is more than 25% but less than 75%, the Disposal constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and is subject to the reporting, announcement and shareholders’ approval requirements under the Listing Rules. To the best of the Directors ’ knowledge, information and belief and having made all reasonable enquiries, no Shareholders or any of their respective associates have any material interest in the Disposal and the transactions contemplated under the Sale and Purchase Agreement. As such, no Shareholders are required to abstain from voting on the resolution to approve the Sale and Purchase Agreement and the transactions contemplated thereunder at the SGM.

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A circular containing, among other things, (i) details of the Disposal; (ii) financial information of the Group; (iii) the valuation report on the Properties issued by an independent valuer; and (iv) other information as required under the Listing Rules, is expected to be despatched to the Shareholders on or before 23 February 2017 as additional time is required for the Company to prepare relevant information for inclusion in the circular.

DEFINITIONS In this announcement, the following expressions shall, unless the context requires otherwise, have the following meanings: “Board”

the board of Directors

“Company”

Shanghai Zendai Property Limited, an exempt company incorporated in Bermuda, the Shares of which are listed on the Stock Exchange

“connected person(s)”

has the meaning ascribed to it under the Listing Rules

“Consideration”

the consideration for the Disposal

“Director(s)”

the director(s) of the Company

“Disposal”

the disposal of the Sale Shares and the Sale Loans pursuant to the terms and conditions of the Sale and Purchase Agreement

“Disposal Group”

collectively, Myway Developments, Haimen Property and their respective subsidiaries (excluding the Excluded Companies)

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“Excluded Companies”

collectively, 廊坊市証合泰房地產有限公司 (Langfang City Zhenghetai Real Estate Co., Ltd.*), 煙台証大大拇指置業有 限公司 (Yantai Zendai Thumb Property Co., Ltd.*) and 江蘇 証大商業文化發展有限公司 (Jiangsu Zendai Commercial Culture Development Co., Ltd.*)

“Excluded Sale Assets”

certain assets owned by Haimen Property as at the date of the Sale and Purchase Agreement including (i) 27% equity interest in 廊坊市証合泰房地產有限公司 (Langfang City Zhenghetai Real Estate Co., Ltd.*); (ii) 70% equity interest in 煙台証大大拇指置業有限公司 (Yantai Zendai Thumb Property Co., Ltd.*); (iii) the entire equity interest in 江蘇 証大商業文化發展有限公司 (Jiangsu Zendai Commercial Culture Development Co., Ltd.*); and (iv) a prepayment item

“Haimen Property”

海門証大濱江置業有限公司 (Haimen Zendai Binjiang Real Estate Co. Ltd.*), a company incorporated in the PRC and an indirect wholly-owned subsidiary of the Company being owned as to approximately 90.91% by Myway Developments and approximately 9.09% by Zendai Real Estate as at the date of this announcement

“Haimen Property Loan”

the loan owed by Haimen Property to Zendai Real Estate and its affiliated companies

“Haimen Property Sale Shares”

approximately 9.09% equity interest in Haimen Property which was held by Zendai Real Estate as at the date of the Sale and Purchase Agreement

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“HK$”

Hong Kong dollars, the lawful currency of Hong Kong

“Listing Rules”

Rules Governing the Listing of Securities on the Stock Exchange

“Myway Developments”

Myway Developments Limited, a company incorporated in the British Virgin Islands with limited liability and a direct wholly-owned subsidiary of the Company as at the date of this announcement

“Myway Developments Loan”

the loan owed by Myway Developments to the Company

“Myway Developments Sale Shares”

the entire equity interest in Myway Developments which was

“Parties”

collectively, the Purchaser and the Vendors

“PRC”

the People’s Republic of China which, for the purpose of this announcement, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

“Project”

the property development project of the Disposal Group which primarily involves the development of the Properties

“Properties”

the land parcels, properties under development and properties for sale of Haimen Property

“Purchaser”

欣樂房地產集團有限公司 (Xinle Real Estate Group Co. Limited*), a company incorporated in the PRC with limited liability

“RMB”

Renminbi, the lawful currency of the PRC

held by the Company as at the date of the Sale and Purchase Agreement

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“Sale and Purchase Agreement”

the sale and purchase agreement dated 25 January 2017 entered into between the Vendors and the Purchaser in relation to the Disposal

“Sale Loans”

collectively, the Myway Developments Loan and the Haimen Property Loan

“Sale Shares”

collectively, the Myway Developments Sale Shares and the Haimen Property Sale Shares (excluding the Excluded Sale Assets)

“SGM”

the special general meeting of the Company to be convened to approve, among other things, the Sale and Purchase Agreement and the transactions contemplated thereunder

“Shareholder(s)”

holder(s) of the Shares

“Share(s)”

share(s) of HK$0.02 each in the share capital of the Company

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

“United States”

The United States of America

“USD”

US dollars, the lawful currency of the United States

“Vendors”

collectively, the Company and Zendai Real Estate

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“Zendai Real Estate”

上海証大置業有限公司 (Shanghai Zendai Real Estate Co., Ltd.*), an indirect wholly-owned subsidiary of the Company

“%”

per cent. By Order of the Board Shanghai Zendai Property Limited Li Li Hua

Executive Director Hong Kong, 25 January 2017

As at the date of this announcement, the executive Directors are Mr. Zhang Chenguang, Mr. Zhong Guoxing, Dr. Wang Hao and Ms. Li Li Hua. The non-executive Directors are Mr. Gong Ping and Mr. Pan Wen. The independent non-executive Directors are Mr. Lai Chik Fan, Mr. Li Man Wai, Mr. Chow, Alexander Yue Nong and Dr. Xu Changsheng. For the purpose of this announcement, unless otherwise specified, (i) conversion of RMB into Hong Kong dollars is based on the approximate exchange rate of RMB1.00=HK$1.1627; and (ii) conversion of USD into Hong Kong dollars is based on the approximate exchange rate of USD1.00=HK$7.7576. The above exchange rates are for the purpose of illustration only and do not constitute any representations that any amounts in HK$, RMB and USD have been, could have been or may be converted at such rates or any other exchange rate. *

For identification purpose only

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