Hailan : ANNOUNCEMENT OF INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2019

October 18, 2019 at 10:56 am

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.

Hailan Holdings Limited

海藍控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2278)

ANNOUNCEMENT OF INTERIM RESULTS

FOR THE SIX MONTHS ENDED 30 JUNE 2019

The board (the "Board") of directors (the "Director(s)") of Hailan Holdings Limited (the "Company") is pleased to present the unaudited interim condensed consolidated results of the Company and its subsidiaries (collectively known as the "Group") for the six months ended 30 June 2019 (the "Period"), together with the comparative figures for the corresponding period in 2018.

- 1 -

INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended 30 June 2019 (Expressed in Renminbi)

		For the six months
		ended 30 June
		2019			2018
	Notes	RMB'000	RMB'000
		(Unaudited)	(Unaudited)
Revenue	4	78,810		898,413
Cost of sales		(36,948)	(441,185)

Gross profit		41,862			457,228
Other income		630		903
Realised gain arising from financial assets at FVPL		9,414		-
Selling and distribution expenses		(8,106)	(60,296)
Administrative expenses		(63,329)	(22,980)
Other operating expenses		-	(14,996)

Operating (loss) profit		(19,529)	359,859

Finance income		9,590			21,917
Finance costs		(16)	(3,552)

Finance income, net	6	9,574			18,365

(Loss) Profit before taxation		(9,955)	378,224
Income tax expenses	7	(9,832)	(279,458)

(Loss) Profit for the period	8	(19,787)	98,766

- 2 -

INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONTINUED)

For the six months ended 30 June 2019 (Expressed in Renminbi)

	For the six months
	ended 30 June
	2019		2018
Notes	RMB'000	RMB'000
	(Unaudited)	(Unaudited)
Other comprehensive (loss) income:
Items that will not be reclassified
subsequently to profit or loss:
Exchange differences on translation of
financial statements to presentation currency	(81)	1,975
Other comprehensive (loss) income

for the period, net of tax	(81)	1,975

Total comprehensive (loss) income for the period	(19,868)	100,741
(Loss) Profit for the period attributable to:

Owners of the Company	(8,591)	120,466
Non-controlling interests	(11,196)	(21,700)

	(19,787)	98,766
Total comprehensive (loss) income

for the period attributable to:
Owners of the Company	(8,672)	122,441
Non-controlling interests	(11,196)	(21,700)

	(19,868)	100,741

(Loss) Earnings per share attributable to

owners of the Company during the period
(expressed in RMB per share)

- Basic and diluted	9	(0.03)	0.40

- 3 -

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 30 June 2019

(Expressed in Renminbi)

		At	At
		30 June	31 December
		2019		2018
	Notes	RMB'000	RMB'000
		(Unaudited)	(Audited)
Non-current assets
Property, plant and equipment		40,576	42,058
Rights-of-use assets		5,043	-
Investment properties	11	130,058	130,058
Intangible assets		467	504
Interests in an associate	10	24,500	-
Trade and other receivables	13	21,859	22,717
Financial assets at fair value through profit or loss	12	1,726	1,726
Deferred tax assets		95,890	198,484

		320,119		395,547
Current assets

Properties under development		2,643,244		2,428,600
Completed properties held for sale		443,764	485,562
Contract costs		20,803	14,117
Trade and other receivables	13	108,568	105,224
Deposits paid for acquisitions of land		161,760	13,760
Current tax assets	14	30,312	27,127
Financial assets at fair value through profit or loss	12	-	806,694
Restricted cash		134,397	83,412
Cash and cash equivalents		1,047,355	683,197

		4,590,203		4,647,693
Current liabilities

Trade and other payables	15	1,213,378		1,205,485
Contract liabilities		672,931	345,146
Lease liabilities		1,666	-
Current tax liabilities	14	294,779	820,245

		2,182,754		2,370,876

Net current assets		2,407,449		2,276,817

Total assets less current liabilities		2,727,568		2,672,364

- 4 -

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)

At 30 June 2019

(Expressed in Renminbi)

		At	At
		30 June	31 December
		2019		2018
	Notes	RMB'000	RMB'000
		(Unaudited)	(Audited)
Non-current liabilities
Bank borrowings	16	70,000	-
Lease liabilities		3,385	-
Deferred tax liabilities		522,377	522,940

		595,762		522,940

NET ASSETS		2,131,806		2,149,424
Capital and reserves

Share capital	17	2,585		2,585
Reserves		1,800,000	1,808,672

Equity attributable to owners of the Company		1,802,585		1,811,257
Non-controlling interests		329,221	338,167

TOTAL EQUITY		2,131,806		2,149,424

- 5 -

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the six months ended 30 June 2019

(Expressed in Renminbi)

										Attributable to owners of the Company

															Changes
															in fair
															value of
															available-
															for-sale
													Statutory		financial											Non-
			Share	Share			Other				surplus		assets	Accumulated	Exchange	Total				controlling	Total
			capital	premium			reserve				reserve		reserve			losses	reserve	reserves	Sub-total			interests	equity
			RMB'000	RMB'000			RMB'000				RMB'000		RMB'000			RMB'000	RMB'000	RMB'000	RMB'000			RMB'000	RMB'000
	(Note 17(b))
Balance as at 1 January 2018 (audited)	2,585		236,791	1,391,582		162,395	1,749		(181,874)	(6,657)	1,603,986		1,606,571		328,950		1,935,521
Impact on initial application of HKFRS 9			-	-			-				-	(1,749)	1,749		-	-		-			-	-
Impact on initial application of HKFRS 15			-	-			-				-		-	16,478		-	16,478		16,478		510		16,988
Adjusted balance at 1 January 2018
2,585		236,791	1,391,582	162,395		-	(163,647)	(6,657)	1,620,464		1,623,049		329,460		1,952,509
Profit for the period			-	-			-				-		-	120,466		-	120,466		120,466		(21,700)	98,766
Other comprehensive income for the period:

Exchange differences on translation of
financial statements to presentation currency			-	-			-				-		-			-	1,975		1,975		1,975			-	1,975

Total comprehensive income for the period			-	-			-				-		-	120,466		1,975		122,441		122,441		(21,700)	100,741
Transactions with owners:

Contributions and distributions
Equity settled share-based transactions			-	-			-				-		-			-	-	-		-	2,493		2,493
Balance as at 30 June 2018 (unaudited)
2,585		236,791	1,391,582	162,395		-	(43,181)	(4,682)	1,742,905		1,745,490		310,253		2,055,743

Balance as at 1 January 2019 (audited)	2,585		236,791	1,391,582	182,986		-	(4,700)	2,013		1,808,672		1,811,257		338,167		2,149,424

Loss for the period			-	-			-				-		-	(8,591)	-	(8,591)	(8,591)	(11,196)	(19,787)
Other comprehensive loss for the period:

Exchange differences on translation of
financial statements to presentation currency			-	-			-				-		-			-	(81)	(81)	(81)			-	(81)

Total comprehensive loss for the period			-	-			-				-		-	(8,591)	(81)	(8,672)	(8,672)	(11,196)	(19,868)
Transactions with owners:

Changes in ownership interest
Contribution from non-controlling interests			-	-			-				-		-			-	-	-		-	2,250		2,250

Balance as at 30 June 2019 (unaudited)	2,585		236,791	1,391,582	182,986		-	(13,291)	1,932		1,800,000		1,802,585		329,221		2,131,806

- 6 -

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2019 (Expressed in Renminbi)

		For the six months
		ended 30 June
		2019		2018
		RMB'000	RMB'000
		(Unaudited)	(Unaudited)
Cash flows (used in) from operating activities
Cash (used in) generated from operations	(69,120)	871,472
Income tax paid	(436,452)	(216,356)

Net cash (used in) generated from operating activities	(505,572)	655,116
Cash flow from investing activities

Purchase of property, plant and equipment	-	(62)
Proceeds from disposal of property, plant and equipment	105	-
Purchase of financial assets at fair value
through profit or loss	(1,548,600)	-
Proceeds from sale of financial assets at fair value
through profit or loss	2,364,708	209,830
Interest received	9,590	-
Loan to an associate	(24,500)	-
Loan to non-controlling shareholders	(3,592)	-
Other cash flow arising from investing activities	-	23,666

Net cash generated from investing activities	797,711		233,434

Cash flow from financing activities
New bank borrowings	70,000		-
Net cash borrowed from Nanjing San Long	-	3,000
Increase in restricted cash pledged for bank loans	-	(4,535)
Capital contribution from non-controlling interests	2,250	-
Repayment of lease liabilities	(150)	-

Net cash generated from (used in) financing activities	72,100		(1,535)

Net increase in cash and cash equivalents	364,239		887,015
Cash and cash equivalents as at 1 January	683,197	896,833
Effect of foreign exchange rate changes	(81)	1,975

Cash and cash equivalents at end of the period,
represented by cash and bank balances	1,047,355		1,785,823

- 7 -

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

For the six months ended 30 June 2019

(Expressed in Renminbi thousands unless otherwise indicated)

GENERAL INFORMATION
Hailan Holdings Limited (the "Company") was incorporated in the Cayman Islands on 31 August 2015 as an exempted company with limited liability under the Company Law Chapter 22, (Law 3 of 1961, as consolidated and revised) of the Cayman Islands. The Company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited (the "Stock Exchange"). The address of registered office of the Company is PO Box 1350, Clifton House, 75 Fort Street, Grand Cayman KY1-1108, the Cayman Islands. The principal place of business of the Company in the People's Republic of China (the "PRC") and Hong Kong are 2/F, No. 1 Building Hampton by Hilton, No. 169 Yu Lin Road, Tianya District, Sanya, the Hainan Province, the PRC and Room 2212, 22/F, The Center, 99 Queen's Road Central, Central, Hong Kong respectively.
The Company is an investment holding company. Its subsidiaries are principally engaged in investment holding, property development, sale and rental of developed properties. The Company and its subsidiaries are collectively referred to as the "Group".
BASIS OF PREPARATION
This interim condensed consolidated financial information for the six months ended 30 June 2019 has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on the Stock Exchange, including compliance with Hong Kong Accounting Standard ("HKAS") 34, Interim financial reporting, issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA").
The preparation of this interim condensed consolidated financial information in conformity with HKAS 34 requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates.
This interim condensed consolidated financial information contains interim condensed consolidated financial statements of the Group and selected explanatory notes. The notes include an explanation of events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the 2018 annual consolidated financial statements. The interim condensed consolidated financial information and notes thereon do not include all of the information required for full set of financial statements prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRSs"), and should be read in conjunction with the Company's annual consolidated financial statements for the year ended 31 December 2018.

- 8 -

3. CHANGES IN ACCOUNTING POLICIES

The accounting policies adopted in the Company's consolidated financial statements for the year ended 31 December 2018 have been applied consistently to these interim condensed consolidated financial statements, except for the adoption of the following new/revised HKFRSs that are effective from 1 January 2019.

The Group has applied, for the first time, the following new/revised HKFRSs that are relevant to the Group:

Annual Improvements to HKFRSs	2015-2017 Cycle
HKFRS 16	Leases
HK(IFRIC)-Int 23	Uncertainty over Income Tax Treatments
Amendments to HKAS 19	Employee benefits
Amendments to HKAS 28	Investments in Associates and Joint Ventures
Amendments to HKFRS 9	Prepayment Features with Negative Compensation

Except for HKFRS 16 as described below, the adoption of the above new/revised HKFRSs does not have any significant impacts on the interim condensed consolidated financial statements of the Group.

HKFRS 16 "Leases"

HKFRS 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than twelve months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying lease asset and a lease liability representing its obligation to make lease payments. A lessee measures right-of-use assets similarly to other non-financial assets (such as property, plant and equipment) and lease liabilities similarly to other financial liabilities. As a consequence, a lessee recognises depreciation (and, if applicable, impairment loss) of the right-of-use asset and interest on the lease liability, and also classifies cash repayments of the lease liability into a principal portion and an interest portion and presents them in the interim condensed consolidated statement of cash flows applying HKAS 7 Statement of Cash Flows.

HKFRS 16 substantially carries forward the lessor accounting requirements of the superseded HKAS 17 Leases. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently.

The Group has reviewed the impact of HKFRS 16 on all its contracts that are, or that contain, leases with effect from 1 January 2019. Based on the practical expedients under HKFRS 16, the Group has elected not to apply the requirements of HKFRS 16 in respect of recognition of lease liability and right-of-use asset to leases for which the lease term ends within twelve months of the date of initial application.

The reconciliation of operating lease commitments to lease liabilities is set out below:
	At
	1 January
	2019
	RMB'000
	(Unaudited)
Operating lease commitments	152
Less: Short-term leases recognised on a straight-line basis as expenses	(152)

Total lease liabilities	-

- 9 -

4. REVENUE AND SEGMENT INFORMATION

4.1. Revenue

The principal activities of the Group are development, sales and lease of properties in the PRC.

Revenue mainly represented income from sales and rental of properties after deduction of any trade discounts.

The amount of each significant category of revenue is as follows:

	For the six months
	ended 30 June
	2019		2018
	RMB'000	RMB'000
	(Unaudited)	(Unaudited)
Sales of properties:
- Development projects (excluding Danzhou Phase I)	76,854		861,423
- Danzhou Phase I	-	31,299
Rental income from investment properties:
- Development projects (excluding Danzhou Phase I)	1,610		3,157
- Danzhou Phase I	346		-
Changes in fair value of investment properties	-	2,534

	78,810	898,413
(a) Disaggregation of revenue


	For the six months
	ended 30 June
	2019	2018
	RMB'000	RMB'000
	(Unaudited)	(Unaudited)
Other sources of revenue:
Rental income from investment properties	1,956	3,157
Changes in fair value of investment properties	-	2,534

Under the scope of HKFRS 15, Revenue from

contracts with customers: Timing of revenue recognition

- At a point in time	76,854	892,722

	78,810	898,413

- 10 -

4.2. Segment Reporting Business segments

In accordance with the Group's internal financial reporting system, the Group has chosen business segment information as the reporting format for the purposes of these interim condensed consolidated financial statements of the Group.

No geographical segment information is separately presented as the Group's business segments are mainly managed and operated in the Hainan Province of the PRC. The major market of the Group's business segments is the Hainan Province of the PRC.

For management purposes, the Group is organised into business units based on the line of reporting, and has two reportable operating segments as follows:

I. Development projects (excluded Danzhou Phase I but including Danzhou Phase II)

All the Group's development projects refer to the development and sales of residential property units conducted in Hainan Province.

Danzhou Phase I
Danzhou Phase I project ("Danzhou Phase I") refers to the development and sales of residential property units under phase I developed by Danzhou Shuang Lian Property Development Company Limited ("Danzhou Shuang Lian") in Hainan Province, the PRC.

The executive directors of the Company, being the chief operating decision makers, monitor the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment.

Income taxes are managed on a group basis and are not allocated to operating segments.

Segment results, assets and liabilities

Segment assets and liabilities include all assets and liabilities of the Group, which are managed directly by the segments.

Revenue and expenses are allocated to the reportable segments with reference to sales generated by those segments and the expenses incurred by those segments or which otherwise arise from the depreciation or amortisation of assets attributable to those segments.

The measure used for reporting segment (loss) profit is "adjusted EBIT" i.e. "adjusted earnings before interest and taxes", where "interest" is regarded as including investment income. To arrive at adjusted EBIT the Group's earning are further adjusted for items not specifically attributed to individual segments.

- 11 -

Information regarding the Group's reportable segments for the periods ended 30 June 2019 and 2018 is set out below.

		Development Projects	Danzhou Phase I		Total
For the six months ended	2019	2018	2019	2018	2019	2018
30 June (unaudited)		RMB'000		RMB'000	RMB'000		RMB'000		RMB'000	RMB'000
Revenue from external customers	78,464	867,114	346	31,299	78,810	898,413
Inter-segment revenue		-		-	-		-		-	-

Reportable segment revenue	78,464		867,114	346		31,299	78,810	898,413

Reportable segment gross profit	41,516		471,136	346		(13,908)	41,862	457,228
Reportable segment (loss) profit
(adjusted EBIT)	(28,884)	381,817	(689)	(22,861)	(29,573)	358,956


		At		At	At		At		At	At
		30 June	31 December	30 June	31 December		30 June	31 December
	2019		2018	2019		2018		2019		2018
		RMB'000		RMB'000	RMB'000		RMB'000		RMB'000	RMB'000
	(Unaudited)		(Audited)	(Unaudited)		(Audited)	(Unaudited)		(Audited)
Reportable segment assets	4,523,083		4,653,886		387,239		389,354		4,910,322		5,043,240
Including:
Cash and cash equivalents	1,045,594		682,750		1,761		447		1,047,355		683,197
Properties under development	2,643,244		2,428,600		-		-	2,643,244		2,428,600
Completed properties held
for sale	346,493		388,326		97,271		97,236		443,764		485,562

Reportable segment liabilities	2,654,141		2,769,539	124,375		124,277		2,778,516		2,893,816
Including:
Trade and other payables	1,147,913		1,138,530		65,465		66,955		1,213,378		1,205,485
Contract liabilities	672,931		345,146		-		-	672,931		345,146

- 12 -

Reconciliation of reportable segment profit or loss
	For the six months
	ended 30 June
	2019		2018
	RMB'000	RMB'000
	(Unaudited)	(Unaudited)
Reportable segment (loss) profit (adjusted EBIT)	(29,573)	358,956
Elimination of inter-segment profits	-	-
Reportable segment (loss) profit derived from

the Group's external customers	(29,573)	358,956
Other income	630	903
Realised gain arising from financial assets at FVPL	9,414	-
Finance income	9,590	21,917
Finance costs	(16)	(3,552)

Consolidated (loss) profit before taxation	(9,955)	378,224

SEASONABILITY OF OPERATION
The Group's results of operations tend to fluctuate from period to period. The number of properties that the Group develops, completes or delivers during any particular period is limited due to the substantial amount of capital required for land/project acquisition, preparation and resettlement in advance of actual development because of the lengthy development cycle during which the development itself takes place. Seasonal variations have, in addition, caused significant fluctuations in pre-sales and sales.
As the result of these and other factors, the Group's cash flow, revenue, and profit will fluctuate from period to period and the results of operations for any interim period may not be indicative of the Group's actual annual results or results of the Group's development projects.
FINANCE INCOME, NET

	For the six months
	ended 30 June
	2019		2018
	RMB'000	RMB'000
	(Unaudited)	(Unaudited)
Finance income
Bank interest income	9,590		21,917
Finance costs

Interest on lease liabilities	(16)	-
Others	-	(3,552)

	(16)	(3,552)

Finance income, net	9,574		18,365

- 13 -

7. INCOME TAX EXPENSES

For the six months

ended 30 June

2019 2018

RMB'000 RMB'000 (Unaudited) (Unaudited)

PRC Corporate Income Tax ("CIT") (Note)	(101,152)	125,739
PRC Land Appreciation Tax ("LAT")	8,953	205,765
Deferred income tax (Note)	102,031	(52,046)

	9,832		279,458

Note: During the six months ended 30 June 2019, the Group has paid the LAT amounting to RMB426,537,000 which are deductible under CIT when they are paid. As a result, CIT payable of RMB106,634,000 recognised in prior years was derecognised and the respective temporary difference arising from LAT provision of RMB106,634,000 was charged to profit or loss during the period.

The Company was incorporated in the Cayman Islands as an exempted company with limited liability under the Company Law of Cayman Islands and, accordingly, is exempted from payment of Cayman Islands income tax. The Group companies in the British Virgin Islands ("BVI") were incorporated under the International Business Companies Act of the British Virgin Islands and, accordingly, exempted from BVI income tax.

Hong Kong profits tax

No Hong Kong profits tax has been provided for the periods ended 30 June 2019 and 2018 as the Group's entities has no assessable profits arising in or derived from Hong Kong for the periods.

CIT

CIT has been provided on the estimated assessable profits of subsidiaries operating in the PRC at 25% (six months ended 30 June 2018: 25%).

LAT

LAT is levied at progressive rates ranging from 30% to 60% on the appreciation of land value, being the proceeds of sales of properties less deductible expenditures including cost of land use rights and all property development expenditures.

- 14 -

8. (LOSS) PROFIT FOR THE PERIOD

(Loss) Profit for the period is arrived at after charging:

For the six months

ended 30 June

2019 2018

RMB'000 RMB'000 (Unaudited) (Unaudited)

Total staff costs (including directors' emoluments and
share-based payments expenses)	5,647	5,362
Deprecation of property, plant and equipment	1,461	1,765
Depreciation of rights-of-use assets	142		-
Amortisation of intangible assets (included in administrative expenses)	37	68

9. (LOSS) EARNINGS PER SHARE

The calculation of basic (loss) earnings per share is based on the (loss) profit attributable to owners of the Company and the weighted average number of ordinary shares in issue during the period.

For the six months

ended 30 June

2019 2018 (Unaudited) (Unaudited)

(Loss) Profit attributable to owners of the Company (RMB)	(8,591,000)	120,466,000
Weighted average number of ordinary shares in issue	300,000,000	300,000,000
Basic (loss) earnings per share (RMB)	(0.03)	0.40

There were no dilutive potential ordinary shares during the periods ended 30 June 2019 and 2018 and, therefore, the diluted (loss) earnings per share were the same as the basic (loss) earnings per share.

10. INTERESTS IN AN ASSOCIATE

As at 30 June 2019, the Group held 49% equity interest in 深圳奧藍置業有限公司 (Shenzhen Aolan Estate Co., Ltd., "Shenzhen Aolan"). The registered share capital of Shenzhen Aolan is RMB10,000,000, both shareholders have not injected any capital contribution up to date of this interim condensed consolidated financial statements.

	At	At
	30 June	31 December
	2019		2018
	RMB'000	RMB'000
	(Unaudited)	(Audited)
Unlisted shares, at cost	-	-
Loan to an associate (Note)	24,500	-

	24,500		-

Note: The loan to an associate is unsecured, interest-free and the settlement of which is neither planned nor likely to occur in the foreseeable future.

- 15 -

INVESTMENT PROPERTIES
As at 30 June 2019 and 31 December 2018, the Group's investment properties represent the car parks held by the Group for rental purpose.
The fair value of investment properties is categorised as a Level 3 measurement in accordance with HKFRS 13 Fair Value Measurement. There were no transfers between Level 1 and Level 2 fair value measurements or transfers into or out of Level 3 fair value measurements.
The valuations of the leased car parks were carried out at 31 December 2018 by the Group's independent valuer and the directors using the income capitalisation approach. As management believes that there is no material change of fair value per car park from 31 December 2018 to 30 June 2019, accordingly, no independent valuation of investment properties was performed on 30 June 2019.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS Financial assets at fair value through profit or loss include the following:

	At	At
	30 June	31 December
	2019		2018
	RMB'000	RMB'000
	(Unaudited)	(Audited)
Unlisted securities:
Equity securities - outside Hong Kong (Note b)	1,726	1,726
Structured deposits - outside Hong Kong (Note a)	-	806,694

	1,726		808,420
Classified as:

Non-current assets	1,726		1,726
Current assets	-	806,694

	1,726		808,420

Note a: The structured deposits were matured and fully redeemed during the period.

Note b: The fair value of unlisted equity securities is categorised as a Level 2 measurement in accordance with HKFRS 13 Fair Value Measurement. There were no transfers between Level 1 and Level 2 fair value measurements or transfers into or out of Level 3 fair value measurements. The fair value of the unlisted equity securities is evaluated by the directors with reference to latest financial statements of the investee.

- 16 -

13. TRADE AND OTHER RECEIVABLES
	At	At
	30 June	31 December
	2019		2018
	RMB'000	RMB'000
	(Unaudited)	(Audited)
Trade receivables - third parties (note i)
- Non-current	18,267	22,717
- Current	3,198	3,726

	21,465		26,443
Less: Loss allowance	(19)	(19)

	21,446		26,424

Other receivables - third parties	29,605		19,747
Less: Loss allowance	(13,676)	(13,676)

	15,929		6,071

Amounts due from related parties	284		194
Amount due from a non-controlling shareholder	-	1,413
Advance payments to contractors	3,863	4,746
Community facilities deposits	11,227	9,242
Interest receivables on financial assets at FVPL	-	6,914
Expenditures incurred for construction of community facilities	30,004	30,004
Prepaid utilities expenses	3,534	3,479
Prepaid business tax and other taxes	40,548	39,454

	105,389		101,517

Loan to non-controlling shareholders- Non-current(note ii)	3,592		-

Total	130,427		127,941
Classified as:


Non-current assets	21,859		22,717
Current assets	108,568	105,224

	130,427		127,941
Notes:

Trade receivables comprise receivables due from customers in relation to sales of properties and rental income. Proceeds from the sale of properties are made in lump-sum payments or paid by instalments in accordance with the terms of the corresponding sale and purchase agreements. Receivables to be recovered more than one year are reclassified to long-term receivables. The remaining balance of trade receivables are expected to be recovered within one year.
Loan to non-controlling shareholders of a subsidiary is secured by an equity interest in the subsidiary of the Company, interest-free and repayable on 26 February 2029.

- 17 -

As at 30 June 2019 and 31 December 2018, the carrying amounts of trade and other receivables approximates their fair values.

As at 30 June 2019 and 31 December 2018, the ageing analysis of trade receivables based on the invoice date that trade receivables were recognised, is as follows:

	At	At
	30 June	31 December
	2019		2018
	RMB'000	RMB'000
	(Unaudited)	(Audited)
Within 1 year	20,779	23,719
Over 1 year but less than 2 years	128	2,178
Over 2 years but less than 3 years	12	4
Over 3 years	546	542

	21,465		26,443
14. CURRENT TAX ASSETS (LIABILITIES)


	At	At
	30 June	31 December
	2019		2018
	RMB'000	RMB'000
	(Unaudited)	(Audited)
Prepaid CIT	11,818	11,818
Prepaid LAT	18,494	15,309
Current tax assets recognised in the interim condensed consolidated

statement of financial position	30,312		27,127


Current CIT payable	(135,656)	(240,553)
Current LAT payable	(159,123)	(579,692)
Current tax liabilities recognised in the interim condensed consolidated

statement of financial position	(294,779)	(820,245)

Provision for LAT has been made pursuant to applicable tax laws in the PRC. The Group considers the timing of settlement is dependent on the practice of local tax bureaus. As a result of the uncertainty of timing of payment of LAT, the provisions have been recorded as current liabilities as at 30 June 2019 and 31 December 2018.

- 18 -

15. TRADE AND OTHER PAYABLES
		At	At
		30 June	31 December
		2019		2018
		RMB'000	RMB'000
		(Unaudited)	(Audited)
Trade payables (Note a)
	- Third parties	397,890	339,730
	- Related parties	222,530	241,581

		620,420		581,311

Amounts due to related parties	321		13,131
Amounts due to a non-controlling shareholder	18,544	11,181
Receipt in advance for rental income	57,038	58,878
Accrued audit fees	5,090	5,009
Accrued payroll	1,461	2,002
Other payables and accruals	40,654	25,511
Temporary receipts from customers	63,093	76,710
Tender deposits receipts from contractors	4,743	4,313
Other tax payables	10,659	12,941
Guarantee deposits	391,355	414,498

		592,958		624,174

		1,213,378		1,205,485

Trade payables
Trade payables mainly represent amounts due to contractors. Payment to contractors is by instalments according to progress and agreed milestones. The Group normally retains 5% as retention payment.
As at 30 June 2019 and 31 December 2018, the ageing analysis of trade payables based on the date the trade payables were recognised, is as follows:

	At		At
	30 June		31 December
	2019	2018
	RMB'000		RMB'000
	(Unaudited)		(Audited)
Within 3 months	278,454	220,852
Over 3 months but less than 6 months	44,227	4,436
Over 6 months but less than 12 months	188,614	98,925
Over 12 months	109,125	257,098

	620,420	581,311

- 19 -

BANK BORROWINGS
As at 30 June 2019, the bank borrowings were secured by certain properties under development with carrying amount of RMB161,198,000, interest bearing at rates of RMB Loan rates of 3-5 years (including 5 years) times 115% per annum, repayable between 20 October 2020 and 5 June 2023 and guaranteed by a subsidiary of the Company.
The directors estimate the fair value of the Group's borrowings at 30 June 2019 approximate to their carrying amounts (31 December 2018: Nil).
SHARE CAPITAL AND DIVIDENDS
1. Dividends
  The Board does not recommend the distribution of a final dividend in respect of the previous financial year or any interim dividend for the six months ended 30 June 2019 (six month ended 30 June 2018: Nil).
2. Share capital

	At 30 June 2019	At 31 December 2018

	Number of				Number of
	shares		RMB'000	shares	RMB'000
	(Unaudited)		(Unaudited)	(Audited)	(Audited)
Issued and fully paid:
At beginning of the reporting period and
at end of the reporting period	300,000,000	2,585	300,000,000	2,585

18. CAPITAL EXPENDITURE COMMITMENTS

Capital commitments outstanding at 30 June 2019 and 31 December 2018 not provided for in interim condensed consolidated financial statements were as follows:

	At		At
	30 June		31 December
	2019	2018
	RMB'000		RMB'000
	(Unaudited)		(Audited)
Contracted but not provided for	1,033,740	828,885

- 20 -

19. CONTINGENT LIABILITIES/GUARANTEES ISSUED

Guarantees in respect of mortgage facilities
The maximum amount of guarantees given to banks for mortgage facilities granted to the purchasers of the Group's properties at 30 June 2019 and 31 December 2018 was as follows:

	At		At
	30 June		31 December
	2019	2018
	RMB'000		RMB'000
	(Unaudited)		(Audited)
Guarantees given to banks for mortgage facilities granted to
purchasers of the Group's properties	103,372	189,840

The Group has not recognised any deferred income in respect of these guarantees as its fair value is considered to be minimal by the directors.

Land use right
1. Haikou Phoenix Aqua City Phase II
  On 17 January 2018, a subsidiary of the Company, Hainan Nanhai Xiang Long Properties Development Limited ("Hainan Nanhai Xiang Long") received a decision from Haikou People's Government in relation to its confiscating of the state-owned construction land use right of a parcel of land owned by Hainan Nanhai Xiang Long located to the north of Bin Hai Xi Lu in Haikou, with a total site area of approximately 88,209.07 square meters (the land certificate number being Hai Kou Shi Guo Yong (2008) No. 001431) (Haikou Phoenix Aqua City Phase II (the "Phase II")) (the "Haikou Decision") for the reason that the land parcel has not been developed and constructed on schedule.
  On 15 June 2018, the Group has formally instituted an application of administrative proceeding on the Haikou Decision to the Intermediate People's Court of Haikou City ("Haikou Court"). On 28 December 2018, Haikou Court issued its administrative judgment (the "Haikou Administrative Judgment") on the administrative proceeding in relation to Phase II. Haikou Court ruled that the Group succeeded in its administrative proceeding against Haikou People's Government and dismissed the Haikou Decision in relation to the recovery of the land use right of Haikou project without compensation by the Haikou People's Government for the reasons that Haikou Decision was made without sufficient evidence and was not applied with the applicable laws. On 13 February 2019, Hainan Nanhai Xiang Long received an appeal notice (the "Appeal Notice") from Higher People's Court of Hainan Province that the Haikou People's Government has made an application to appeal against the Haikou Administrative Judgment. On 4 March 2019, Hainan Nanhai Xiang Long filed a defence in respect of the Appeal Notice to the Haikou Court.
  The directors of the Company consider that the Group, after consulted the Group's external counsels, has reasonable grounds to justify that the Haikou Administrative Judgment is still valid and has a view of that it is not more likely than not that a present obligation to surrender the land without compensation exists at the end of the reporting period. At the end of reporting period, no impairment has been made in respect of the investment cost on the land use right of Phase II. On 16 October 2019, the Higher People's Court of Hainan Province issued its administrative judgment on the Haikou Decision and revoked the Haikou Decision issued by Haikou People's Government in relation to the confiscation of the land parcel. The administrative judgment issued by the Higher People's Court of Hainan Province was final.

- 21 -

Danzhou Phoenix Aqua City
A subsidiary of the Company, Danzhou Shuang Lian, received state-owned construction land use right decisions (the "Danzhou Decisions") issued by the Danzhou People's Government in May 2018, which state that on 30 December 2017, 13 February 2018 and 2 March 2018, total five land parcels in relation to a property development project of Danzhou Shuang Lian, namely Danzhou Phoenix Aqua City ("Danzhou Phoenix Aqua City") located on the section of Binhai Avenue, Southern Area, Baimajing Town (the land certificate number being Dan Guo Yong (2010) Nos. 710, 711, 712, 713 and 714), with a total site area of approximately 385,395.83 square meters (the "Lands") were confiscated without compensation for the reason that the Lands was unable to be developed and constructed on schedule.
The Group had lodged legal proceedings to against the Danzhou Decisions. On 22 April 2019, the Higher People's Court of Hainan Province issued its administrative judgments on the Danzhou Decisions and revoked the Danzhou Decisions issued by Danzhou People's Government in relation to the confiscation of the Lands. The administrative judgments issued by the Higher People's Court of Hainan Province were final.
The Group is undergoing a study on redevelopment of the project of Danzhou Phoenix Aqua City and negotiating with the local government for obtaining necessary licenses/certificates for the project of Danzhou Phoenix Aqua City.

20. MATERIAL RELATED PARTY TRANSACTIONS AND CONNECTED TRANSACTIONS

In addition to the related party information disclosed elsewhere in the interim condensed consolidated financial statements of the Group, the Group entered into the following significant related party transactions during the period ended 30 June 2019.

Name and relationship with related parties/connected parties
During the period, transactions with the following parties were considered as related party transactions:

Name of party	Relationship with the Group
Yeung Man	Ultimate Controlling Shareholder
Nanjing Huizhi Construction Installation Engineering Co., Ltd.	Entity controlled by the Ultimate
	("Nanjing Huizhi")		Controlling Shareholder
Nanjing Zhonghui Construction Engineering Co., Ltd.	Entity controlled by the Ultimate
	("Nanjing Zhonghui Construction")		Controlling Shareholder
Zhonghui (Nanjing) Property Development Co., Ltd.	Entity controlled by the Ultimate
	("Zhong Hui Nanjing")		Controlling Shareholder
Nanjing Diken Engineering Design Consultancy Co., Ltd.	Entity controlled by the Ultimate
	("Nanjing Diken")		Controlling Shareholder
Nanjing Hengjida Engineering Design Consultancy	Entity controlled by the Ultimate
Company Limited ("Nanjing Hengjida")		Controlling Shareholder
Lianyungang Hui Neng Foundation Construction Engineering	Entity controlled by the Ultimate
Co., Ltd. ("Lianyungang Hui Neng")		Controlling Shareholder

- 22 -

Name of party	Relationship with the Group
Nanjing Maoheng Engineering Design Consultancy	Entity controlled by the Ultimate
Company Limited ("Nanjing Maoheng")		Controlling Shareholder
Hainan Zhonghuan Property Development Company Limited	Entity controlled by the Ultimate
("Hainan Zhonghuan")		Controlling Shareholder
Nanjing Boken Corporate Planning Consultation	Entity controlled by the Ultimate
Company Limited ("Nanjing Boken")		Controlling Shareholder
Nanjing Huiyao Decoration Construction Co., Ltd.	Associate of a group controlled by
("Nanjing Huiyao")	the Ultimate Controlling Shareholder
Leshan Huizhi Technology Development Co., Ltd.	Entity controlled by the Ultimate
("Leshan Huizhi")		Controlling Shareholder
Chung Wai (Jiangsu) Decoration Park Project	Entity controlled by the Ultimate
Company Limited ("Chung Wai (Jiangsu)")		Controlling Shareholder
Nanjing Tianhui ATongda Corporate Planning Consultation	Entity controlled by the Ultimate
Co., Ltd. ("Nanjing Tianhui")		Controlling Shareholder
Nanjing San Long, Cement Company Limited	Non-controlling shareholder of
("Nanjing San Long")		a subsidiary
Di Geng (Hong Kong) Investment Development	Entity controlled by the Ultimate
Company Limited ("Di Geng")		Controlling Shareholder
Huang Heng	Non-controlling shareholder
		of a subsidiary
Han Yurong	Non-controlling shareholder
		of a subsidiary
Shenzhen Aolan	Associate
Chung Wai (Hong Kong) Investment Construction	Entity controlled by the Ultimate
Company Limited ("Chung Wai (Hong Kong)")		Controlling Shareholder
Zhou Li	Executive director and Chief
	executive office of the Group

- 23 -

(b) Transactions with related parties/connected parties

For the six months

ended 30 June

2019 2018

RMB'000 RMB'000 (Unaudited) (Unaudited)

Construction and consultancy services (Note (i))	83,234	14,109
Repayment of lease liabilities (Note (ii))	150		-
Management fee income (Note (iii))	73		-

Construction and consultancy services
During the period, the Group received construction services from the following related party:

For the six months

ended 30 June

2019 2018

RMB'000 RMB'000 (Unaudited) (Unaudited)

Nanjing Huizhi	83,234	14,109

The above transactions between the Group and its related parties mainly comprised construction services in relation to earthmoving, scenery design and engineering on the Group's properties under development from construction companies, which are controlled by the Ultimate Controlling Shareholder.

Repayment of lease liabilities
During the period, the Group rented a premise from the following related party:

For the six months

ended 30 June

2019 2018

RMB'000 RMB'000 (Unaudited) (Unaudited)

Chung Wai (Hong Kong)	150	-

- 24 -

Management fee income
During the period, the Group provided management services to the following related party:

For the six months

ended 30 June

2019 2018

RMB'000 RMB'000 (Unaudited) (Unaudited)

Chung Wai (Hong Kong)	73	-

Balances with related parties/connected parties
1. Amounts due from related parties

	At		At
	30 June		31 December
	2019	2018
	RMB'000		RMB'000
	(Unaudited)		(Audited)
Non-trade related:
Nanjing San Long	-	1,413
Nanjing Huizhi	-	20
Di Geng	174	174
Huang Heng	171		-
Han Yurong	3,421		-
Shenzhen Aolan	24,500		-
Chung Wai (Hong Kong)	110		-

	28,376	1,607

The amounts due from related parties are unsecured, interest-free and have no fixed terms of repayment except for the amounts due from Huang Heng and Han Yurong are secured by an equity interest in the subsidiary of the Company, interest-free and repayable on 26 February 2029.

- 25 -

(ii) Amounts due to related parties
		At		At
		30 June		31 December
		2019	2018
		RMB'000		RMB'000
		(Unaudited)		(Audited)
Trade related:
	Nanjing Huizhi	139,441	157,459
	Lianyungang Hui Neng	21,221	21,221
	Chung Wai (Jiangsu)	1,426	1,426
	Leshan Huizhi	50	50
	Nanjing Zhonghui Construction	53,214	54,167
	Nanjing Hengjida	516	516
	Nanjing Diken	4,351	4,351
	Nanjing Huiyao	2,311	2,391

		222,530	241,581
Non-trade related:


Other payables due to:
	Nanjing San Long	18,544	11,181
Chung Wai (Hong Kong) Property Company Limited	2	2
Zhong Jia (Hong Kong) Investment Limited	166	166
	中惠（中國）投資有限公司	-	5
	Zhou Li	-	12,958
Chung Wai (Hong Kong)	153		-

		18,865	24,312

The amounts due to related parties are unsecured, interest-free and have no fixed terms of repayment.

21. EVENTS AFTER THE REPORTING PERIOD

Acquisition of land use rights in Zhanjiang, the PRC
On 28 June 2019, Guangzhou Hailan Property Development Limited (廣州海藍房地產開發有限公司) ("Guangzhou Hailan") an indirect non wholly-owned subsidiary of the Company incorporated in the PRC in 2019, entered into a confirmation letter (the "Confirmation Letter") with the Zhanjiang Public Resources Trading Centre to confirm that Guangzhou Hailan has successfully won the bid for
the auction for the land use rights of the Land which is located at the southwest of Binhe New District Section (濱河新區路段), Yingbin Avenue (迎賓大道), Suicheng Town (遂城鎮), Suixi County (遂溪縣), Zhanjiang City (湛江市), Guangdong Province, the PRC at a consideration of RMB357,390,000.
As a result of successfully winning the bid for the auction, the Land Use Rights Assignment Contract is entered into by Guangzhou Hailan and the Suixi County Natural Resources Bureau (遂溪縣自然資源局) on 9 July 2019.

- 26 -

Provision of shareholder loan to a joint venture company
On 15 July 2019, Nanjing Hailan Estate Co., Ltd. ("Nanjing Hailan") entered into the shareholder
loan agreement (the "Shareholder Loan Agreement") with the Shenzhen Aolan, a company established in the PRC with limited liability, which is owned as to 51% by 奧園集團(梅州)有限公司 (Aoyuan Group (Meizhou) Company Limited) ("Aoyuan Meizhou"), a company established in the
PRC with limited liability and 49% by Nanjing Hailan. Aoyuan Meizhou is an indirect wholly-owned subsidiary of China Aoyuan Group Limited (中國奧園集團股份有限公司), a company incorporated under the laws of the Cayman Islands with limited liability, the shares of which are listed on the Main Board of The Stock Exchange of Hong Kong Limited (stock code: 3883).
Shenzhen Aolan is solely engaged in the holding of 50% equity interest in 梅州市奧創置業有限公司
(Meizhou Aochuang Estate Co., Ltd.), a company established in the PRC with limited liability which is solely engaged in development of a land parcel at Meijiang District (梅江區), Meizhou City (梅州市), Guangdong Province.
Pursuant to the Shareholder Loan Agreement, Nanjing Hailan, as lender, agreed to provide a shareholder loan of up to RMB150.0 million (equivalent to approximately HK$169.9 million) at an interest rate of 12% per annum to Shenzhen Aolan. The first drawdown in the principal amount of approximately RMB66.1 million (equivalent to approximately HK$74.9 million) was made on 15 July 2019, and the amounts drawn and outstanding under the Shareholder Loan Agreement do not have a fixed term of repayment.
The details of the Shareholder Loan Agreement are detailed in the Company's announcement dated 16 July 2019.
Acquisitions of minority interests in Sanya Huixin Trading Company Limited ("Sanya Huixin")
On 9 October 2019, Lianyungang Long Ji Properties Co., Ltd. ("Lianyungang Long Ji Properties"), an indirect wholly-owned subsidiary of the Company entered into a share transfer agreement A and a share transfer agreement B (the "Share Transfer Agreements") with Mr. Fang Jing and Mr. Yang Jinhe (the "Vendors") pursuant to which the Lianyungang Longji Properties has agreed to acquire and the Vendors have agreed to dispose of in aggregate of 17.5% equity interests in Sanya Huixin for an aggregate consideration of RMB8.47 million (the "Acquisitions").
Upon completion of the Acquisitions, Sanya Huixin will become an indirect wholly-owned subsidiary of the Company.
The principal terms of the Share Transfer Agreements and details of the Acquisitions are summarised in the Company's announcement dated 9 October 2019.

- 27 -

CHAIRMAN'S STATEMENT

Dear Shareholders,

On behalf of the board (the "Board") of directors (the "Director(s)") of Hailan Holdings Limited (the "Company" or "Hailan Holdings", together with its subsidiaries, collectively the "Group"), I hereby present the unaudited financial results for the six months ended 30 June 2019 (the "Period").

During the Period, given the implementation of restrictive policy in Hainan Province since last year, and the slow approval process for residential projects by the government, the overall sales and supply of properties in Hainan Province dropped significantly in the first half of 2019. Under such business environment, the result of Hailan Holdings inevitably suffered.

During the Period, contracted sales of the Group amounted to RMB234.0 million, representing a reduction of 72.0% as compared to the corresponding period in 2018. Contracted saleable gross floor area ("GFA") was approximately 7,282.0 square meters, representing a regression of approximately 75.3% over the corresponding period last year. The contracted average selling price ("ASP") was about RMB32,134.0 per square meter, representing an increase of about 13.0% over the corresponding period last year. The significant decrease in sales amount was mainly attributable to Hainan Province government's restriction on housing planning and approval, control over construction and investment of residential properties and the impact of restrictive policy.

To further facilitate the continuing development of the Group, we have been exploring different exciting investment opportunities. In the first half of 2019, the Group started to expand to other regions other than Hainan Province and invested and developed in Meizhou and Zhanjiang. Meanwhile, the Group also actively looked for new opportunity in the US and Hong Kong by planning small projects in order to gain experience and slowly increase its overseas investment. Although these investment projects could not generate net cash inflow in the second half of 2019, it is anticipated that such projects will contribute to the Group to a certain extent in the coming 2 years.

- 28 -

Looking ahead, the global economy will remain unstable under the Sino-US trade disputes. The real estate market in Hainan Province will be affected by the restrictive policy. The Chinese government thoroughly implements real estate regulations, which may constrain the development of the Group. The supply of inventory in Hainan Province for the year is affected due to slow approval process for residential housing planning. In long run, however, by virtue of Hainan Island's premium climate and environment as well as the state policies, which support the business and development in Hainan Province, we remain optimistic about the long-term development of real estate operation in Hainan Province. We believe that the location of our valued assets, excellent track record of property management and property construction execution in Hainan Province, the PRC, and the highly supportive industry development policy in Hainan Province, will help sustain the Group's business development and property development in Hainan Province in future.

To materialise international development, the Group has been seeking development opportunity in foreign regions, mainly in Hong Kong and the US. The Group actively identifies real estate investment and development opportunity in the US, especially in Silicon Valley, one of the important engines of the US's economy with constantly high housing demand, which may be a new income source for the Group's future development.

The management has formulated the future development plan. By basing in Hong Kong, delving into the Mainland, expanding the market in North America and spreading global footprints, it will further promote the development of the Group's business and create the best return for shareholders.

Finally, I would like to express my sincere gratitude on behalf of the Board to all our staff for their hard work, and my heartfelt thanks to investors, customers and business partners for their strong and continuous support to the Group.

Zhou Li

Chairperson

18 October 2019

- 29 -

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS REVIEW

Overall Performance

For the Period, the revenue and gross profit of the Group were approximately RMB78.8 million and approximately RMB41.9 million respectively, representing an decrease of approximately 91.2% and 90.8% as compared with the corresponding period of 2018, respectively. Loss for the Period attributable to owners of the Company was approximately RMB8.6 million, representing an decrease of approximately 107.1% as compared with the corresponding period of 2018. Basic loss per share were RMB3 cents (the corresponding period of 2018: Basic earnings per share RMB40 cents).

		For the six months ended 30 June
Performance Highlights	2019	2018	Changes
Contracted sales (RMB million)3	234.0	836.9	-72.0%
Contracted saleable gross floor area
	("GFA") (sq.m.)2,3	7,282.0	29,440.0	-75.3%
Contracted average selling price
	("ASP") (RMB/sq.m.)2,3	32,134.0	28,427.3	13.0%
Revenue1 (RMB million)	78.8	898.4	-91.2%
Among which: sales of properties
- Revenue from properties
	delivered (RMB million)1	76.9	892.7	-91.4%
- GFA of properties delivered
	(sq.m.)	2,892.0	30,347.0	-90.5%
- ASP of properties delivered
	(RMB/sq.m.)	26,590.6	29,416.4	-9.6%
Rental income (RMB million)1	1.9	3.2	-40.6%
Gain on changes in fair value
	investment properties
	(RMB million)1	-	2.5	-100.0%
Gross profit (RMB million)	41.9	457.2	-90.8%
(Loss) Profit for the Period
- Attributable to owners
	(RMB million)	(8.6)	120.5	-107.1%
- Attributable to non-controlling
	interests (RMB million)	(11.2)	(21.7)	48.4%

- 30 -

	At	At
	30 June	31 December
	2019		2018	Changes
Total assets (RMB million)	4,910.3		5,043.2	-2.6%
Cash and bank balances (including
cash and cash equivalents and
restricted cash) (RMB million)	1,181.8	766.6	54.2%
Total equity (RMB million)	2,131.8	2,149.4	-0.8%
Key financial ratios


Gross profit margin4	53.1%		50.9%	2.2 p.p.
Net debt to equity ratio5	N/A	N/A	N/A
Gearing ratio6	3.3%		-	3.3 p.p.

Notes:

Representing the amount of income after deduction of business tax and other sales related taxes.
Excluding the GFA of car parking spaces.
Pursuant to the agreement between the shareholders of Danzhou Shuang Lian Properties Development Company Limited ("Danzhou Shuang Lian"), one of the shareholders of Danzhou Shuang Lian shall continue to manage, develop and undertakes fully the risk and reward of phase I of the development project located at Danzhou ("Danzhou Phase I"). The acquisition of Danzhou Shuang Lian has been accounted for as a business combination with Danzhou Shuang Lian fully combined into the Group's combined financial statements from the date of acquisition. As the Group does not share any risks and rewards relating to Danzhou Phase I pursuant to the abovementioned agreement, the net profit or loss, net assets or liabilities arising from Danzhou Phase I are wholly attributable to the non-controlling interests in the Group's combined statements of profit or loss and other comprehensive income and the combined statements of changes in equity. Contracted sales of Danzhou Phase I is excluded in this analysis for discussion purpose.
Gross profit margin: Gross profit ÷ Revenue × 100%
Net debt to equity ratio: (Total bank and other borrowings - cash and bank balances) ÷ Total equity × 100%
Gearing ratio: Total bank and other borrowing ÷ Total equity x 100%

- 31 -

PROPERTY DEVELOPMENT

Contracted sales

For the Period, the Group recorded contracted sales of approximately RMB234.0 million, representing a significant decrease of approximately 72.0% as compared with approximately RMB836.9 million in the corresponding period of 2018. The contracted saleable GFA was 7,282.0 sq.m. in the first half of 2019, representing a decrease of approximately 75.3% as compared with 29,440.0 sq.m. in the corresponding period of 2018. The ASP of contracted sales for the Period was RMB32,134.0 per sq.m., representing an increase of approximately 13.0% as compared with RMB28,427.3 per sq.m. in the corresponding period of 2018.

The decrease in contracted sales and contracted saleable gross floor area were mainly due to the strict limitations on purchasing commodity housing and making mortgage loan in Hainan. Since in 2018, Hainan Province (the "Province") roll out the country's strictest restrictions on house purchases. The provincial government has barred non-locals from buying houses unless they can prove they have paid the local social security fund for at least two years. In the Province's hotspot cities like Sanya and Haikou the aforesaid requirement goes up to 60 months and in other areas, non-local buyers are banned completely.

The ASP of contracted sales increased by 13.0% was mainly due to the increase in contracted sales in the project of Sanya Phoenix Aqua City South Shore Phase II for the Period, which has a higher unit selling price.

Contract liabilities

As at 30 June 2019, the balance of contract liabilities increased by 95.0% or approximately RMB327.8 million as compared with balance as at 31 December 2018, which was primarily contributed by the contracted sales in the project of Sanya Phoenix Aqua City South Shore Phase II for the Period.

REVENUE FROM SALES OF PROPERTIES

For the Period, the revenue from sales of properties amounted to approximately RMB76.9 million, representing an decrease of approximately 91.4% as compared with approximately RMB892.7 million in the corresponding period of 2018 and accounting for 97.6% of the total revenue. GFA of properties delivered decreased by approximately 90.5% to 2,892.0 sq.m. for the Period from 30,347.0 sq.m. in the corresponding period of 2018. It was primarily attributable to Hainan Province governments restriction on housing planning and approval, control over construction and investment of residential properties and the impact of restrictive policy. The ASP of properties delivered for the Period was RMB26,590.6 per sq.m., representing an decrease of 9.6% as compared with the corresponding period of 2018.

Completed projects held for sale

During the Period, the Group has not registered any newly completed properties.

- 32 -

Projects held for future development and projects under development

At 30 June 2019, the Group had a total of three projects or project phases held for future development with a total planned GFA of approximately 1.4 million sq.m. (31 December 2018: 1.4 million sq.m.).

Land bank

No new project was acquired by the Group during the Period.

As at 30 June 2019, the total GFA of the land bank of the Group amounted to approximately

1.4 million sq.m. Among the total land bank of the Group, 43.0% is located in Sanya City, 53.4% is located in Danzhou City and 3.6% is located in Haikou City of the Province.

Deposit paid for acquisition of land

As at 30 June 2019, the deposit paid for acquisitions of land of the Group was approximately RMB161.8 million (31 December 2018: approximately RMB13.8 million), mainly representing the deposit paid for acquisition of land use rights in Zhanjiang.

PROPERTY INVESTMENTS

Rental income

The rental income of the Group for the Period amounted to approximately RMB1.9 million, deriving from the rental income of the leasing car parking spaces located at Sanya Phoenix Aqua City Left Shore and the shops located at Danzhou Phase I, representing an decrease of approximately 40.6% or RMB1.3 million as compared with the corresponding period of 2018, by an decrease of rental income from the leasing of serviced apartment located at Sanya Phoenix Aqua City Left Shore.

Investment properties

As at 30 June 2019, the investment properties of the Group represent the car parking spaces held by the Group for rental purpose.

Financial Review

Revenue
Revenue of the Group for the Period amounted to approximately RMB78.8 million, representing an decrease of approximately RMB819.6 million, or approximately 91.2%, as compared with the corresponding period of 2018, primarily due to the implementation of restrictive policy in Hainan Province since last year, and the slow approval process for residential projects by the government.

- 33 -

Details of the revenue from sales of properties by project are as follows:

Project			For the six months ended
	30 June 2019	30 June 2018
	GFA				GFA
	delivered		Revenue	delivered	Revenue
	Sq.m.		RMB			RMB
		in Million	Sq.m.	in Million
Sanya Phoenix Aqua City	530	26.6
Left Shore	89	2.7
Sanya Phoenix Aqua City	267	7.8
South Shore Phase I & II	25,677	858.5
Haikou Phoenix Aqua City Phase I	2,095		42.5		-	-
Danzhou Phase I	-		-	4,581	31.5

	2,892		76.9		30,347	892.7

Cost of sales and gross profit margin
For the Period, the cost of sales of the Group decreased by approximately RMB404.2 million, or approximately 91.6%, as compared with the corresponding period of 2018. The decrease was attributable to the 90.5% decrease in total GFA of properties delivered in the first half of 2019 (i.e. 2,892.0 sq.m.) when compared to the first half of 2018 (i.e. 30,347.0 sq.m.).

Gross profit margin increased from 50.9% for the six months ended 30 June 2018 to 53.1% for the Period primarily attributable to the fact that the delivered properties of Haikou Phoenix Aqua City Phase I was a project with higher gross profit margin in the first half of 2019.

Selling and distribution expenses and administrative expenses
The selling and distribution expenses for the Period amounted to approximately RMB8.1 million representing an decrease of 86.6% from approximately RMB60.3 million in the same period of 2018, which was mainly due to the decrease in sale commission expenses as a result of decrease in revenue from sale of properties. The sales commission amounts to 94.5% (2018: 98.9%) of the total selling and distribution expenses for the Period.
Administrative expenses increased by 175.2% from RMB23.0 million in the same period of 2018 to approximately RMB63.3 million which mainly due to the increase in legal and professional cost on the legal proceedings in Haikou Province.

- 34 -

(IV)Finance income, net

The net finance income of the Group for the Period amounted to approximately RMB9.6 million (the corresponding period of 2018: approximately RMB18.4 million). The finance cost of the Group has been significantly reduced RMB3.5 million while the finance income has also been significantly decreased RMB12.3 million as compared to the corresponding period in 2018, which due to the income of amounting approximately RMB9.4 million generated from the structural products during the Period was recognised in profit and loss under realised gain arising from financial assets at FVPL.

Income tax expenses
The income tax expenses of the Group decreased by 96.5% to approximately RMB9.8 million for the Period from approximately RMB279.5 million for the six months ended 30 June 2018. The significant decrease of current corporate income tax expense and the land appreciation tax for the Period were mainly contributed by the decrease of revenue from sale of properties and taxable profit for the Period.

(VI)Loss attributable to owners of the Company

The loss attributable to owners of the Company for the Period amounted to approximately RMB8.6 million, representing an decrease of approximately RMB129.1 million as compared with the corresponding period of 2018. The decrease was mainly attributable to the decrease of gross profit, net finance income, selling and distribution expenses and income tax expenses, and increase of realised gain arising from financial assets at FVPL and administrative expenses.

(VII) Liquidity and financial resources

As at 30 June 2019, total assets of the Group amounted to approximately RMB4,910.3 million (31 December 2018: approximately RMB5,043.2 million), of which current assets amounted to approximately RMB4,590.2 million (31 December 2018: approximately RMB4,647.7 million). Total liabilities amounted to approximately RMB2,778.5 million (31 December 2018: approximately RMB2,893.8 million), of which non-current liabilities amounted to approximately RMB595.8 million (31 December 2018: approximately RMB522.9 million). Total equity amounted to approximately RMB2,131.8 million (31 December 2018: approximately RMB2,149.4 million). Total equity attributable to owners of the Company amounted to RMB1,802.6 million (31 December 2018: approximately RMB1,811.3 million).

As at 30 June 2019, the Group had cash and bank balances (including restricted cash) of approximately RMB1,181.8 million (31 December 2018: approximately RMB766.6 million). The Group had bank borrowing of RMB70 million (31 December 2018: Nil).

(VIII)Commitments

As at 30 June 2019, the Group had capital commitments outstanding but not provided for amounting to approximatively RMB1,033.7 million (31 December 2018: approximately RMB828.9 million).

- 35 -

(IX)Contingent liabilities

Guarantees in respect of mortgage facilities

As at 30 June 2019, the Group provided guarantees (the "Guarantees") of approximately RMB103.4 million (31 December 2018: approximately RMB189.8 million) to bank in respect of the mortgage loans granted to purchasers of the properties of the Group. Pursuant to the terms of the Guarantees, if there is any default of the mortgage payments by these purchasers, the Group is responsible to repay the outstanding mortgage loans together with any accrued interest and penalty owned by the defaulted purchasers to the banks. The Group's guarantee period commences from the dates of grant of the relevant mortgage loans and ends upon the earlier of the bank receiving the required evidence of mortgage over the relevant property in favour of the bank and the full settlement of mortgage loans by the buyer.

The Directors consider that it is not probable that the Group will sustain a loss under these Guarantees as during the periods under guarantees, the Group can take over the ownerships of the related properties and sell the properties to recover any amounts paid by the Group to the banks. The Directors also consider that the fair market value of the underlying properties is able to cover the outstanding mortgage loans guaranteed by the Group in the event the purchasers default payments to the banks.

The Group has not recognised any deferred income in respect of these guarantees as its fair value is considered to be minimal by the directors.

Legal Proceedings
Haikou Phoenix Aqua City Phase II
On 17 January 2018, Hainan Nanhai Xiang Long Properties Development Limited ("Hainan Nanhai Xiang Long"), a subsidiary of the Group, received a decision from Haikou People's Government in relation to its confiscation of the state-owned
construction land use right of a parcel of land owned by Hainan Nanhai Xiang Long located to the north of Bin Hai Xi Lu* (濱海西路), Haikou, with a total site area of
approximately 88,209.07 square meters (the land certificate number being Hai Kou Shi Guo Yong (2008) No. 001431* (海口市國用(2008)第001431號)) (Haikou Phoenix Aqua City Phase II (the "Phase II")) without compensation (the "Haikou Decision") for the reason that the land parcel has not been developed and constructed on schedule.
Reference is made to the Section headed "Business - Description of our property development projects - Haikou" in the prospectus of the Company dated 30 June 2016 (the "Prospectus"), for the Phase II, according to the notice issued by the Haikou Planning Bureau on 2 July 2013, the planned site area of the Phase II was decreased from 88,209.07 square meters to 61,761.00 square meters, and the plot ratio was increased from
0.5 to 0.78, for which compensation was to be made to the Group for the land being expropriated, and the nature of land use right was changed to "tourism". As at the date of this announcement, the government still has not determined the valuation and compensation proposal for the Phase II and the Group has not obtained the updated land use right certificate for the Phase II hence making the Group unable to further proceed with the developments under the Phase II.
- 36 -

However, the Haikou Decision deemed that pursuant to the provisions under the Regulations over Management of idle Land* (閒置土地處置辦法) and the Regulations

over the Identification and Management of idle Land in Hainan District* (海南省閒置土地認定與處置規定), since such land parcel has failed to be developed in accordance with

the original time schedule and has been delayed for more than two years, it has become idle land and its land use right shall be confiscated. Hainan Nanhai Xiang Long shall be entitled to apply for administrative appeal to the Hainan People's Government within 60 days upon the receipt of the Haikou Decision, or commence administrative proceedings to the Haikou Intermediate People's Court within six months.

The Group considered that the basis for which the Haikou Decision was made by the Haikou People's Government to confiscate the land use right is not fully consistent with the actual circumstances of the Phase II. The Group was of the view that the changes in governmental planning and coastline protection policies as well as the delay in updating the change of land use right certificate have objectively resulted in the impediment on the development of the Phase II, the consequence being that the land parcel was unable to be developed and constructed on schedule. In addition, it was objectively inconsistent with actual circumstances of the Phase II for the government to determine land vacancy by considering the Phase II and Haikou Phoenix Aqua City Phase I land parcel, which has been completed, inspected and put into record, to be two separate land parcels.

The Group also continued its discussions with the Haikou Planning Bureau indicating its willingness to develop the Phase II subject to the Bureau's approval of its design plans. The Directors considered that the Group has reasonable grounds to challenge the Haikou Decision and that therefore, taking account of all available evidence, it was unlikely that an obligation to surrender the land without compensation existed. On 15 June 2018, the Group formally instituted an application of administrative proceeding on the Haikou Decision (the "Administrative Proceeding") to the Intermediate People's Court of Haikou City* (海口市中級人民法院) (the "Haikou Court"). On 28 December 2018, the Haikou Court issued its administrative judgment on the Administrative Proceeding in relation to Phase

Haikou Court ruled that the Group succeeded in its Administrative Proceeding against Haikou People's Government and dismissed the Haikou Decision in relation to the recovery of the land use right of Haikou project without compensation by the Haikou People's Government for the reasons (among others) that the Haikou Decision was made without sufficient evidence and was not applied with the applicable laws.

On 13 February 2019, Nanhai Xiang Long has received a notice of appeal from the Haikou Court, notifying Nanhai Xiang Long that the Haikou People's Government has submitted an application for appeal against the administrative judgment made by the Haikou Court regarding the administrative proceedings of the Phase II on 28 December 2018.

On 16 October 2019, the Higher People's Court of Hainan Province* (海南省高級人民法院) issued its administrative judgment on the Haikou Decision and revoked the Haikou Decision issued by Haikou People's Government in relation to the confiscation of the land parcel. The administrative judgment issued by the Higher People's Court of Hainan Province was final. For details of the Haikou Decision, please refer to the announcements of the Company date 25 January 2018, 31 January 2018, 26 June 2018, 9 January 2019, 26 February 2019 and 18 October 2019 respectively.

- 37 -

Danzhou Phoenix Aqua City

A subsidiary of the Group, Danzhou Shuang Lian Properties Development Company Limited ("Danzhou Shuang Lian"), collected the state-owned construction land use right decisions issued by the Danzhou People's Government in May 2018 (the "Danzhou Decisions"), which state that on 30 December 2017, 13 February 2018 and 2 March 2018, Danzhou Phoenix Aqua City, the five land parcels developed by Danzhou Shuang Lian located on the section of Binhai Avenue, Southern Area, Baimajing Town (the land certificate number being Dan Guo Yong (2010) Nos. 710, 711, 712, 713 and 714* (儋國

用(2010)第710、711、712、713及714號)), with a total site area of approximately 385,395.83 square meters (the "Lands") was recovered without compensation for the reason that the Lands was unable to be developed and constructed on schedule.

Reference is made to the section headed "Business - Description of our property development projects - Danzhou" in the Prospectus, Danzhou Phoenix Aqua City occupies an aggregate site area of approximately 399,657.2 square meters and has an expected aggregate GFA (including saleable and non-saleable GFA) of approximately 704,312.8 square meters. As at the date of this announcement, the relevant government authorities have not yet granted the relevant planning and construction permits, hence making the Group unable to proceed with the development of Danzhou Phoenix Aqua City.

However, the Danzhou Decisions deemed that pursuant to the provisions under the Management of Idle Land* (閒置土地處置辦法) and the Regulations over the Identification and Management of Idle Land in Hainan District* (海南省閒置土地認定與

處置規定), since the Lands have failed to be developed in accordance with the original time schedule and relevant construction work has been delayed for more than two years, they have become idle lands and their land use rights shall be recovered without compensation. Danzhou Shuang Lian shall be entitled to apply for administrative review to Hainan People's Government within 60 days upon receipt of the Danzhou Decisions or initiate administrative proceedings with the Second Intermediate People's Court of Hainan Province (the "Hainan Court") within six months.

The Board considered that the basis on which the Danzhou Decisions were made by Danzhou People's Government to recover the land use rights without compensation is not fully consistent with actual circumstances of the Danzhou Phoenix Aqua City. The Board was of the view that the changes in governmental planning and the delay in processing relevant procedures have objectively resulted in the impediment to the development of the Danzhou Phoenix Aqua City, the consequence of which was that the Lands are unable to be developed and constructed on schedule.

On 20 July 2018, the Group formally instituted an application of administrative proceeding on the Danzhou Decisions to the Hainan Court and the case was accepted on 24 July 2018.

* for identification purpose only

- 38 -

On 25 December 2018, the Group submitted an application of appeal against the administrative judgment made by the Hainan Court regarding two land parcels of the above five land parcels with a total site area of approximately 113,349.30 square meters. In addition, the Company has received a summons from the Higher People's Court of Hainan Province on 15 February 2019, stating that the Danzhou People's Government has submitted an application of appeal against the administrative judgment regarding the other three land parcels with a total site area of approximately 272,046.53 square meters.

On 22 April 2019, the Higher People's Court of Hainan Province issued its administrative judgments on the Decisions issued by Danzhou People's Government in relation to the recovery of the Lands. The Higher People's Court of Hainan Province ruled that the appeals lodged by the Group against the administrative judgments made by the Hainan Court were succeeded and the appeals lodged by Danzhou People's Government against the administrative judgments made by the Hainan Court were not succeeded, and revoke the Decisions issued by Danzhou People's Government in relation to the recovery of the Lands. The administrative judgments issued by the Higher People's Court of Hainan Province were final.

For details of the Danzhou Decisions, please refer to the announcements of the Company dated 11 May 2018, 24 July 2018, 21 December 2018, 26 February 2019 and 26 April 2019, respectively.

MATERIAL ACQUISITION AND DISPOSALS AND SIGNIFICANT INVESTMENTS

For the Period, the Group fully redeemed the investment of structured deposits and the redemption proceeds were amounted to approximately RMB 2,364.8 million, generating a profit of approximately RMB9.4 million, while the Group made additional investment with amount of approximately RMB1,548.6 million.

Save as disclosed above, the Group had no significant investments, material acquisition or disposal of subsidiaries and affiliated companies during the Period.

GEARING RATIO

As at 30 June 2019, the Group's gearing ratio was 3.3%. As at 31 December 2018, the gearing ratio was not applicable as a result of the Group had no borrowings and loans.

EVENTS AFTER THE PERIOD

Save as disclosed in the note 21 of Notes to the Interim Condensed Consolidated Financial Information, there was no significant events occurring after the end of the Period up to the date of this announcement.

- 39 -

FUTURE PLAN FOR MATERIAL INVESTMENTS

The Group will continue to invest in property development projects and acquire suitable land parcels in the PRC, Hong Kong and the USA, if it thinks fit. It is expected that internal resources and bank borrowings will be sufficient to meet the necessary funding requirements. Save as disclosed in this announcement, the Group did not have any future plans for material investments as of the date of this announcement.

EMPLOYEES AND REMUNERATION POLICIES

As at 30 June 2019, taking into account of Danzhou phase I, the Group had approximately 47 employees (as at 31 December 2018: 25 employees). For the Period, the Group incurred employee costs of approximately RMB6.1 million, and was fully recognised as expenses. The remuneration of the employees generally includes salary and performance-based bonuses. According to the applicable PRC laws and regulations, the Group participates in various employee benefit plans of the municipal and provincial governments, including housing provident funds, pension, medical, maternity, occupational injury and unemployment benefit plans. Employee costs of the Group also included the amortisation cost of the share incentive granted.

NET DEBT TO EQUITY RATIO

As at 30 June 2019, the net debt to equity ratio (calculated by total bank and other borrowings less cash and bank balance divided by total equity) was Nil (31 December 2018: Nil).

PLEDGE OF ASSETS

As at 30 June 2019, the Group had certain properties under development with carrying amount of approximately RMB161.2 million (31 December 2018: Nil) were pledged for the bank borrowings and the restricted cash with carrying amount of approximately RMB96.7 million (31 December 2018: 45.8 million) for properties under development.

FOREIGN CURRENCY RISKS

The Group mainly operates in the PRC. The Group's functional currency and the currency in which the Group denominates and settles substantially all of its transactions are Renminbi. Any depreciation of the Renminbi would affect the value of any dividends that the Group pays to the shareholders of the Company (the "Shareholders") outside the PRC. The Group currently does not engage in any hedging activities designed or intended to manage foreign exchange rate risk.

INTERIM DIVIDEND

The Board does not recommend to declare any interim dividend for the Period (six months ended 30 June 2018: Nil).

- 40 -

USE OF PROCEEDS

The net proceeds from the Listing was approximately HK$249 million. As at the date of this announcement, the net proceeds from the Listing were applied as follows:

		Use of
		proceeds
		adjusted
		according to
		actual gross
		proceeds less		Change of
		estimated		use of	Utilisation of	Unutilised
	listing expense		proceeds	proceeds	Amount
		HK$ million		HK$ million	HK$ million	HK$ million
Finance the development of
Sanya Phoenix Aqua City
South Shore Phase II	224.1	(224.1)	-	-
Working capital and other
general corporate use	24.9		-	(16.4)	8.5
Finance the property
development in
Hong Kong and USA		-	224.1		(43.9)	180.2

Total	249.0		-	(60.3)	188.7

The use of proceeds has not yet been applied to the development of Sanya Phoenix Aqua City South Shore Phase II, as the project is at the preliminary stage of applying for the construction planning permit. The Company expects that the proceeds from the sale of Company's properties will be able to provide sufficient cash flow for the development of Sanya Phoenix Aqua City South Shore Phase II. The Company has changed the use of proceeds to include the investment in property development in Hong Kong and USA, and general working capital of the Group. For further details, please refer to the announcement of the Company dated 3 June 2019.

The Board will continue to implement the established strategy of the Group prudently with a focus on high-end property development in tourist areas. To this end, it will act as an excellent developer with the view of era's development, expanding its presence in the property markets in Hong Kong and USA. The development of the properties project could be financed by the proceeds from the sales of aforesaid properties.

The Board is of the view that the expansion in the use of the net proceeds will facilitate the allocation of financial resources and diversify the business of the Group, which in turn shall further enhance the revenue of the Company, increase the income stream of the Group and pursue better investment return to the Company and the shareholder as a whole.

As at the date of this announcement, the net proceeds of approximately HK$188.7 million have not been used.

- 41 -

CORPORATE GOVERNANCE PRACTICES

The Company is committed to maintain high standards of corporate governance with a view to assure the conduct of management of the Company and protect the interests of all Shareholders. The Company is fully aware that transparency and accountability in corporate governance are crucially important to the Shareholders and the Board considers that sound corporate governance can maximize the Shareholders' interest.

The Company has adopted the Corporate Governance Code (the "CG Code") as set out in Appendix 14 to the Rules Governing the Listing of Securities on the Stock Exchange (the "Listing Rules") as its own code of conduct of corporate governance.

The Board consists of five executive Directors, one non-executive Director and three independent non-executive Directors. The Board is responsible for the operation and coordination of the development of the Company and oversees the Company's businesses, strategic decisions and performance, and has full and timely access to all relevant information in relation to the Company's businesses and affairs, but the day-to-day management is delegated to the management of the Company. The independent non-executive Directors possess professional qualifications and related management experience in the areas of, among others, financial accounting and corporate governance, and have contributed to the Board with their professional opinions.

During the Period, the Company has applied the principles and has complied with code provisions of the CG Code (the "Code Provision(s)") as contained in Appendix 14 to the Listing Rules, except for certain deviations as specified and explained below with considered reasons for such deviation.

Under Code Provision A.2.1 of the CG Code as set out in Appendix 14 of the Listing Rules, the roles of chairman and chief executive officer should be separate and should not be performed by the same individual. Under the current organisation structure of the Group, the function of chief executive officer is performed by Ms. Zhou Li. The Board is of the opinion that vesting the roles of both chairman and chief executive officer in Ms. Zhou Li has the benefit of ensuring consistent leadership within the Group thus enabling more effective and efficient strategic planning for the Group.

Under this arrangement, the Board also believes that the balance of power and authority will not be compromised and is adequately ensured by the existing Board which comprises experienced and competent individuals with more than one-third of the Board being independent non-executive directors.

To ensure compliance with the CG Code, the Company will continue to strengthen its corporate governance practices and, with the assistance of legal advisors in the PRC and Hong Kong and compliance advisor, enhance its internal control.

- 42 -

CHANGE OF DIRECTORS AND CHIEF EXECUTIVES

As at the date of this announcement, pursuant to Rule 13.51B(1) of the Listing Rules, the changes in the information of Directors of the Company are as follows:

Mr. Chen Zhonghua has been appointed as an executive Director with effect from 26 September 2019.

Save as disclosed above, the Directors are not aware of any other change in the Information of Directors and chief executives of the Company required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules as at the date of this announcement.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

For the Period, neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company's listed securities on the Stock Exchange.

PRE-IPO SHARE INCENTIVE SCHEME

The Company had adopted a pre-IPO share incentive scheme on 5 January 2016 (the "Pre-IPOShare Incentive Scheme") to recognize and reward the contribution of certain directors and senior management(the "Target Participant(s)") who have or may have made to the growth and development of the business(es) of the Group.

As no Target Participant had satisfied the achievement targets, the Company has terminated the Pre-IPO Share Incentive Scheme on 9 October 2019.

Save as disclosed above, no further Incentive Equity Interest has been offered under the Pre- IPO Share Incentive Scheme and no further Incentive Equity Interest will be offered thereunder on or after the Listing Date.

None of the Directors waived any emoluments during the Period.

PRE-EMPTIVE RIGHTS

There are no provisions for pre-emptive rights under the Articles of Association or the laws of Cayman Islands which would oblige the Company to offer new shares on a pro-rata basis to existing shareholders.

COMPLIANCE WITH THE MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted the Model Code as set out in Appendix 10 of the Listing Rules as its own code of conduct regarding Directors' securities transactions. Having made specific enquiries with all the Directors, each of the Directors has confirmed that he/she has complied with the Model Code for the Period.

- 43 -

SUFFICIENCY OF PUBLIC FLOAT

Based on information that is publicly available to the Company and within knowledge of the Directors, the Company has maintained a sufficient public float as required under the Listing Rules as at the date of this announcement.

AUDIT COMMITTEE

The Company has established an audit committee (the "Audit Committee") with written terms of reference in compliance with Rule 3.21 of the Listing Rules and paragraph C.3 of the CG Code. The Audit Committee consists of three independent non-executive Directors, namely Dr. Zhao Guoqing, Mr. Li Yong and Mr. E Junyu. The Audit Committee is chaired by Dr. Zhao Guoqing.

The Audit Committee has reviewed with the Company's management, the accounting principles and practices adopted by the Group and discussed auditing, internal control and financial reporting matters including a review of the unaudited interim condensed consolidated financial statements of the Group for the Period.

PUBLICATION OF INTERIM RESULTS ANNOUNCEMENT AND INTERIM REPORT

This interim results announcement is published on the websites of the Company (http://www.hailanholdings.com) and the Stock Exchange (http://www.hkexnews.hk). The interim report of the Company for the six months ended 30 June 2019 will be despatched to the Shareholders and made available for review on the above websites in due course.

By order of the Board

Hailan Holdings Limited

Chairperson

Zhou Li

The PRC, 18 October 2019

As at the date of this announcement, the executive Directors are Ms. Zhou Li, Mr. Chen Xiang, Ms. Fan Wenyi, Ms. Chan Si Yu and Mr. Chen Zhonghua; the non-executive Director is Ms. Yao Yu; and the independent non-executive Directors are Mr. Li Yong, Mr. E Junyu and Dr. Zhao Guoqing.

- 44 -

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Hailan Holdings Ltd. published this content on 18 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 October 2019 14:54:03 UTC

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