A Living Services : VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE ACQUISITION OF 60% EQUITY INTEREST IN CMIG PM AND NOTICE OF THE 2020 SECOND EXTRAORDINARY GENERAL MEETING

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional advisers.

If you have sold or transferred all your shares in A-Living Services Co., Ltd., you should at once hand this circular together with the enclosed proxy form to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

A-LIVING SERVICES CO., LTD.*

雅居樂雅生活服務股份有限公司

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 3319)

VERY SUBSTANTIAL ACQUISITION

IN RELATION TO THE ACQUISITION OF

60% EQUITY INTEREST IN CMIG PM AND

NOTICE OF THE 2020 SECOND EXTRAORDINARY GENERAL

MEETING

Financial Adviser to A-Living

Capitalised terms used on this cover shall have the same meanings as those defined in the section headed "Definitions" in this circular, unless the context requires otherwise.

A letter from the Board is set out on pages 9 to 29 of this circular.

A notice convening the A-Living EGM to be held at Conference Room, 33/F, Agile Center, 26 Huaxia Road, Zhujiang New Town, Tianhe District, Guangzhou, Guangdong Province, PRC on Tuesday, 17 March 2020 at 10:00 a.m. is set out on pages EGM-1 to EGM-3 of this circular. A proxy form for use at the A-Living EGM is also enclosed in this circular. Such proxy form is also published on the websites of the Stock Exchange (http://www.hkexnews.hk) and A-Living (http://www.agileliving.com.cn).

Shareholders who intend to appoint a proxy to attend the A-Living EGM shall complete and return the enclosed proxy form in accordance with the instructions printed thereon not less than 24 hours before the time fixed for holding the A-Living EGM or any adjournment thereof (as the case may be). Completion and return of the proxy form will not preclude Shareholders from attending and voting in person at the A-Living EGM or any adjourned meeting thereof if they so wish.

* For identification purposes only

24 February 2020

		CONTENTS
			Page
Definitions . .	. . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Appendix I	- Financial Information of the A-Living Group . . . . . . . . . .	I-1
Appendix II	- Accountant's Report on the CMIG PM Group . . . . . . . . . .	II-1
Appendix III -	Unaudited Pro Forma Financial Information of the
		Enlarged Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	III-1
Appendix IV -	Management Discussion and Analysis of the CMIG PM
		Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	IV-1
Appendix V	-	General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	V-1
Notice of A-LivingEGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

- i -

DEFINITIONS

In this circular, the following expressions shall have the meanings set out below unless the

context requires otherwise:

"2019 Audited Net Profit"

"Acquisitions"

"A-Living"

"A-Living Board"

"A-Living Director(s)"

"A-Living Group"

"A-Living EGM"

"A-Living Shareholder(s)"

"A-Living Supervisor(s)"

"Announcements"

"associate"

the aggregated audited net profit after taxation and excluding extraordinary items attributable to CMIG PM of Entity C to Entity J, Entity L to Entity N and Shenzhen Longcheng (all of which are principally engaged in property management) for the year ended 31 December 2019

the CMIG PM Acquisition and the New CMIG PM Acquisition

A-Living Services Co., Ltd.* (雅居樂雅生活服務股份有 限公司), a joint stock company incorporated in the PRC with limited liability, the H shares of which are listed on the main board of the Stock Exchange

board of directors of A-Living

the director(s) of A-Living

A-Living and its subsidiaries

the 2020 second extraordinary general meeting of A-Living to be held and convened at Conference Room, 33/F, Agile Center, 26 Huaxia Road, Zhujiang New Town, Tianhe District, Guangzhou, Guangdong Province, PRC on Tuesday, 17 March 2020 at 10:00 a.m. or any adjournment thereof (as the case may be) to consider and, if thought fit, approve the CMIG PM Agreement and the transactions contemplated thereunder

holder(s) of the shares of A-Living

the supervisor(s) of A-Living

the announcements of A-Living dated 25 September 2019 in relation to the CMIG PM Acquisition and 12 December 2019 in relation to the New CMIG PM Acquisition

has the meaning as ascribed to it under the Listing Rules

- 1 -

	DEFINITIONS
"Chongqing Xindong"	重慶信東投資管理有限公司 (Chongqing Xindong
	Investment Management Company Limited*), a
	company established in the PRC with limited liability
	and is wholly-owned by CMIG PM
"CMIG Investment"	中民物業投資有限公司 (CMIG Property Investment
	Company Limited*), a company established in the
	PRC with limited liability and is wholly-owned by the
	Remaining Shareholder
"CMIG PM"	中民未來物業服務有限公司 (CMIG Futurelife Property
	Management Limited*), a limited liability company
	established in the PRC and is owned as to 60% by the
	Vendor and as to 40% by the Remaining Shareholder
"CMIG PM Acquisition"	the acquisition of the CMIG PM Interests as
	contemplated under the CMIG PM Agreement
"CMIG PM Agreement"	the equity transfer agreement dated 25 September
	2019 entered into between the Purchaser and the
	Vendor in relation to the sale and purchase of (i) the
	CMIG PM Interests; and (ii) the New CMIG PM
	Interests, the particulars of which are set out in the
	section headed "(1) THE CMIG PM AGREEMENT"
	in the Announcement dated 25 September 2019
"CMIG PM Completion"	completion of the acquisition of the CMIG PM
	Interests
"CMIG PM Group"	CMIG PM and its subsidiaries
"CMIG PM Interests"	the 60% equity interest in CMIG PM held by the
	Vendor
"CMIG Youjia"	中民優家物業投資有限公司 (CMIG Youjia Property
	Investment Co., Ltd.*), a company established in the
	PRC with limited liability and is wholly-owned by
	CMIG Investment
"connected person"	has the meaning ascribed to it under the Listing Rules
"Enlarged Group"	the A-Living Group as enlarged by the CMIG PM
	Group

- 2 -

	DEFINITIONS
"Entity A"	上海鉑贏物業管理有限公司 (Shanghai Boying Property
	Management Company Limited*), a company
	established in the PRC with limited liability and is a
	wholly-owned subsidiary of CMIG PM
"Entity B"	重慶皓吉物業管理有限公司 (Chongqing Haoji Property
	Management Company Limited*), a company
	established in the PRC with limited liability and is a
	wholly-owned subsidiary of CMIG PM
"Entity C"	上海明華物業管理有限公司 (Shanghai Minghua Property
	Management Company Limited*), a company
	established in the PRC with limited liability and is
	owned as to 90.33% by Entity A
"Entity D"	重慶天驕愛生活服務股份有限公司 (Chongqing Tianjiaoai
	Lifestyle Services Company Limited*), a company
	established in the PRC with limited liability and is
	owned as to 24.17% by Entity B
"Entity E"	常州中房物業有限公司 (Changzhou Zhongfang Property
	Company Limited*), a company established in the
	PRC with limited liability and is owned as to 70% by
	CMIG PM
"Entity F"	上海銳翔上房物業管理有限公司 (Shanghai	Ruixiang
	Shangfang Property Management	Company
	Limited*), a company established in the PRC with
	limited liability and is owned as to 67% by CMIG PM
"Entity G"	山東宏泰物業發展有限公司 (Shandong Hongtai Property
	Development Company Limited*), a company
	established in the PRC with limited liability and is
	owned as to 35% by CMIG PM
"Entity H"	大連意美企業管理服務有限公司 (Dalian Yimei Corporate
	Management Services Company Limited*), a
	company established in the PRC with limited liability
	and is owned as to 35% by CMIG PM
"Entity I"	重慶衛士物業管理有限公司 (Chongqing Weishi Property
	Management Company Limited*), a company
	established in the PRC with limited liability and is
	owned as to 26.01% by CMIG PM

- 3 -

	DEFINITIONS
"Entity J"	陝西誠悅物業管理有限責任公司 (Shanxi Chengyue
	Property Management Company Limited*), a
	company established in the PRC with limited liability
	and is owned as to 25% by CMIG PM
"Entity K"	中民未來海泰工業服務有限公司 (CMIG Haitai Industrial
	Services Company Limited*), a company established
	in the PRC with limited liability and is owned as to
	51% by Chongqing Xindong
"Entity L"	重慶海泰管理服務有限公司 (Chongqing Haitai
	Management Services Company Limited*), a
	company established in the PRC with limited liability
	and is owned as to 51% by Chongqing Xindong
"Entity M"	萬聯生活服務集團股份有限公司 (Wonder-Life Service
	Group Co., Ltd.*), a company established in the PRC
	with limited liability and is listed on the National
	Equities Exchange and Quotations ( 全國中小企業股份
	轉讓系統)(stock code: 835800). Entity M is owned as to
	9.3% by CMIG PM
"Entity N"	西安錦天物業管理服務有限公司 (Xi'an Jintian Property
	Management Services Company Limited*), a
	company established in the PRC with limited liability
	and is owned as to 51% by CMIG PM
"Excluded Entity"	中民未來易創科技 (上海) 有限公司 (CMIG Futurelife
	Yichuang Technology (Shanghai) Company Limited*),
	a company established in the PRC with limited
	liability and ceased to be a member of CMIG PM
	Group
"Fixed Consideration"	the consideration for the acquisition of the CMIG PM
	Interests, being RMB1,560,000,000
"Formula"	the formula adopted to determine the Variable
	Consideration, being the Kerui Guaranteed Profit x
	P/E Ratio of 12.5 x 60%
"GFA"	gross floor area
"HK$"	Hong Kong dollar, the lawful currency of Hong Kong
"Hong Kong"	the Hong Kong Special Administrative Region of the
	People's Republic of China

- 4 -

	DEFINITIONS
"Independent Third Party"	a person, or in the case of a company, such company
	or its ultimate beneficial owner(s), who is/are
	independent of and not connected with A-Living and
	its subsidiaries and their respective connected
	persons and their respective ultimate beneficial
	owner(s) or their respective associates
"Kerui Guaranteed Profit"	the estimated amount of profit of the New CMIG PM
	Group for the Relevant Year which shall be the basis
	for determining the Variable Consideration in
	accordance with the Formula, and which when
	determined will be warranted and guaranteed by the
	Vendor to the Purchaser to be no less than the Kerui
	PM Audited Net Profit
"Kerui PM"	上海科瑞物業管理發展有限公司 (Shanghai Kerui
	Property Management Development Co., Ltd.*), a
	company established in the PRC with limited liability
	and is owned as to 51% by New CMIG PM
"Kerui PM Audited Net Profit"	the audited net profit after taxation and excluding
	extraordinary items attributable to New CMIG PM for
	the Relevant Year
"Latest Practicable Date"	21 February 2020, being the latest practicable date
	prior to the printing of this circular for the purpose of
	ascertaining certain information contained in this
	circular
"Listing Rules"	the Rules Governing the Listing of Securities on The
	Stock Exchange of Hong Kong Limited
"New CMIG PM"	民瑞物業服務（上海）有限公司 ( M i n ru i P ro p e r t y
	Management (Shanghai) Co., Ltd.), a company
	established in the PRC with limited liability and is
	owned as to 60% by the Vendor and as to 40% by the
	Remaining Shareholder
"New CMIG PM Acquisition"	the acquisition of the New CMIG PM Interests as
	contemplated under the New CMIG PM Agreement
"New CMIG PM Agreement"	the equity transfer agreement dated 12 December
	2019 entered into between the Purchaser and the
	Vendor in relation to the sale and purchase of the New
	CMIG PM Interests

- 5 -

	DEFINITIONS
"New CMIG PM Group"	New CMIG PM and Kerui PM
"New CMIG PM Interests"	the 60% equity interest in New CMIG PM held by the
	Vendor
"P/E Ratio"	price to earnings ratio
"Pledge"	the equity pledge executed by Chongqing Xindong in
	favour of a bank in the PRC over the 51% equity
	interest in Entity L held by Chongqing Xindong to
	secure the obligations owed by Chongqing Xindong
	to such bank under the relevant facility agreement
"PRC"	the People's Republic of China, for the purpose of this
	circular, shall exclude Hong Kong, the Macau Special
	Administrative Region of the People's Republic of
	China and Taiwan
"Purchaser"	天津雅潮企業管理諮詢有限公司 (Tianjin Yachao
	Enterprise Management Consulting Co., Ltd.*), a
	company established in the PRC with limited liability
	and is an indirect wholly-owned subsidiary of
	A-Living
"Relevant Year"	the financial year in which the conditions precedent
	to the payment of the Variable Consideration are
	fulfilled
"Remaining Shareholder"	中民未來控股集團有限公司 (CMIG Futurelife Holdings
	Group Company Limited*), a company established in
	the PRC with limited liability
"Reorganisation"	the corporate reorganisation of the CMIG PM Group
	and the New CMIG PM Group pursuant to the terms
	of the CMIG PM Agreement, as disclosed in the
	Announcements
"RMB"	Renminbi, the lawful currency of the PRC
"Ruipei Enterprise"	芮沛實業 (上海) 有限公司 (Ruipei Enterprise (Shanghai)
	Company Limited*), a company established in the
	PRC with limited liability and is wholly-owned by the
	Remaining Shareholder
"Sale Interests"	the CMIG PM Interests and the New CMIG PM
	Interests

- 6 -

	DEFINITIONS
"Securities Dealing Codes"	a code for securities transactions by the A-Living
	Directors and a code for securities transactions by the
	A-Living Supervisors adopted by A-Living as its own
	codes of conduct governing A-Living Directors' and
	A-Living Supervisors' dealings in A-Living's
	securities on terms no less exacting than the Model
	Code for Securities Transactions by Directors of
	Listed Issuers as set out in Appendix 10 to the Listing
	Rules
"SFO"	the Securities and Futures Ordinance (Cap. 571 of the
	Laws of Hong Kong)
"Shenzhen Longcheng"	深圳市龍城物業管理有限公司 (Shenzhen Longcheng
	Property Management Company Limited*), a
	company established in the PRC with limited liability
	and is owned as to 63% by CMIG PM
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"subsidiary"	has the meaning as ascribed to it under the
	Companies Ordinance (Chapter 622 of the Laws of
	Hong Kong)
"Transactional Documents"	the CMIG PM Agreement and all other documents
	and agreements necessary for the acquisition of the
	CMIG PM Interests (including but not limited to the
	constitutional documents of CMIG PM)
"Valuation Report"	a valuation report prepared by Jones Lang LaSalle
	Corporate Appraisal and Advisory Limited (JLL), an
	independent professional valuer, in relation to the
	P/E Ratio of 12.5 as of 30 August 2019
"Variable Consideration"	the consideration for the acquisition of the New
	CMIG PM Interests to be determined in accordance
	with the Formula subject to the maximum amount of
	RMB500,000,000
"Vendor"	廣東豐信盈隆股權投資合夥企業 (有限合夥) (Guangdong
	Fengxin Yinglong Equity Investment Partnership
	(Limited Partnership)*), a limited partnership
	established in accordance with the Partnership Laws
	of the PRC

- 7 -

	DEFINITIONS
"Waiver Letter"	a letter executed or to be executed by the Remaining
	Shareholder to waive the pre-emptive right of the
	Remaining Shareholder to purchase the CMIG PM
	Interests and/or the New CMIG PM Interests (as the
	case may be) from the Vendor
"Working Day"	any day which banks in the PRC are open for
	business, except Saturdays, Sundays and statutory
	holidays as announced by the PRC government
"%"	per cent.
"sq. m."	square meter

- 8 -

LETTER FROM THE BOARD

A-LIVING SERVICES CO., LTD.*

雅居樂雅生活服務股份有限公司

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 3319)

Executive Directors:	Registered office in the PRC:
Mr. Chan Cheuk Hung (Co-chairman)	Management Building, Xingye Road
Mr. Huang Fengchao (Co-chairman,	Agile Garden, Sanxiang Town
Chief Executive Officer and General Manager)	Zhongshan
Mr. Feng Xin (Vice President)	Guangdong Province, PRC
Non-executive Directors:	Principal place of office in the PRC:
Mr. Wei Xianzhong	35/F, Agile Center
Ms. Yue Yuan	26 Huaxia Road
	Zhujiang New Town
Independent non-executive Directors:	Tianhe District, Guangzhou
Mr. Wan Kam To	Guangdong Province, PRC
Mr. Wan Sai Cheong, Joseph
Mr. Wang Peng	Principal place of business in Hong Kong:
	Level 54, Hopewell Centre
	183 Queen's Road East
	Hong Kong
	24 February 2020
To the A-Living Shareholders
Dear Sir or Madam,

VERY SUBSTANTIAL ACQUISITION

IN RELATION TO THE ACQUISITION OF

60% EQUITY INTEREST IN CMIG PM AND

NOTICE OF THE 2020 SECOND EXTRAORDINARY GENERAL

MEETING

THE CMIG PM ACQUISITION

Reference is made to the Announcements. As disclosed in the announcement of A-Living dated 12 December 2019, on 12 December 2019, the Purchaser entered into the New CMIG PM Agreement with the Vendor pursuant to which the Purchaser has conditionally agreed to acquire, and the Vendor has conditionally agreed to dispose of, 60% of the equity interest in New CMIG PM at the Variable Consideration, subject to the maximum amount of RMB500,000,000. Accordingly, the terms in relation to the New CMIG PM Acquisition originally set out in the CMIG PM Agreement have been superseded by the New CMIG PM Agreement and references made to the New CMIG PM

- 9 -

LETTER FROM THE BOARD

Acquisition and the Variable Consideration in the section headed "(1) The CMIG PM AGREEMENT" below shall be read in conjunction with the announcement of A-Living dated 12 December 2019.

The purpose of this circular is to provide you with, among others, (i) further details of the CMIG PM Acquisition; (ii) financial information of the A-Living Group; (iii) the accountant's report on the financial information of the CMIG PM Group; (iv) the unaudited pro forma financial information of the Enlarged Group; (v) management discussion and analysis of the CMIG PM Group; and (vi) the notice of the A-Living EGM.

The circular containing, among others, (i) further details of the New CMIG PM Acquisition; (ii) the accountant's report on the financial information of the New CMIG PM Group; (iii) the unaudited pro forma financial information; (iv) management discussion and analysis of the New CMIG PM Group; and (v) the relevant notice of extraordinary general meeting of A-Living will be separately despatched to the A-Living Shareholders.

1. THE CMIG PM AGREEMENT
   The principal terms of the CMIG PM Agreement are as follows:
   Date
   25 September 2019
   Parties
2. 1. 天津雅潮企業管理諮詢有限公司 (Tianjin Yachao Enterprise Management Consulting Co., Ltd.*), as the Purchaser; and
   2. 廣東豐信盈隆股權投資合夥企業 ( 有限合夥 ) (Guangdong Fengxin Yinglong Equity Investment Partnership (Limited Partnership)*), as the Vendor.

To the best of the knowledge, information and belief of the A-Living Board, after making all reasonable enquiries, the Vendor, its limited partners, its general partners and their respective ultimate beneficial owners are Independent Third Parties.

Assets to be acquired

Pursuant to the CMIG PM Agreement, the Purchaser has conditionally agreed to acquire, and the Vendor has conditionally agreed to dispose of, the Sale Interests, being (i) the 60% equity interest in CMIG PM at the Fixed Consideration; and (ii) the 60% equity interest in New CMIG PM at the Variable Consideration.

The Fixed Consideration

The Fixed Consideration is RMB1,560,000,000, which has been determined in accordance with the formula of "the CMIG PM Guaranteed Profit (as defined in the

- 10 -

LETTER FROM THE BOARD

paragraph headed "PROFIT GUARANTEE" below) x P/E Ratio of 12.5 x 60%", the details of which are particularised in the paragraph headed "PROFIT GUARANTEE" below, and shall be paid in the following manner:

1. Deposit - RMB468,000,000

The deposit shall be payable by the Purchaser to the Vendor within ten

1. Working Days upon fulfillment of all the conditions precedent in relation to the payment of the deposit set out in the CMIG PM Agreement which are particularised in the paragraph headed "Deposit conditions precedent" below.

1. First instalment - RMB892,000,000

The first instalment shall be payable by the Purchaser to the Vendor within ten (10) Working Days upon fulfillment of all the conditions precedent in relation to the payment of the first instalment set out in the CMIG PM Agreement which are particularised in the paragraph headed "First instalment conditions precedent" below.

1. Second instalment - RMB200,000,000

The second instalment shall be payable by the Purchaser to the Vendor within ten (10) Working Days upon fulfillment of all the conditions precedent in relation to the payment of the second instalment set out in the CMIG PM Agreement which are particularised in the paragraph headed "Second instalment conditions precedent" below.

The Variable Consideration

The Variable Consideration is to be determined in accordance with the Formula, being the Kerui Guaranteed Profit x P/E Ratio of 12.5 x 60%.

The maximum amount of the Variable Consideration shall not exceed RMB500,000,000 and shall be payable by the Purchaser to the Vendor in full.

Deposit conditions precedent

Payment of the deposit of the Fixed Consideration is conditional upon:

1. the Transactional Documents having been executed and delivered by all parties under the CMIG PM Agreement;
2. all resolutions in relation to the acquisition of the CMIG PM Interests and the Transactional Documents having been passed by CMIG PM;
3. all resolutions in relation to the Acquisitions having been passed by the Vendor;

- 11 -

LETTER FROM THE BOARD

1. all board resolutions in relation to the Acquisitions having been passed by the Purchaser;
2. the Purchaser having received the Waiver Letter;
3. all representations and warranties made by the Vendor remaining true, complete, accurate, not misleading and with no material omission since the date of the CMIG PM Agreement;
4. all obligations as set out in the CMIG PM Agreement having been duly observed and performed in all respects by the Vendor since the date of the CMIG PM Agreement;
5. there having been no judgment, order, decision or prohibition which would prohibit, restrict or cancel the acquisition of the CMIG PM Interests and there having been no judgment, order, decision or prohibition that is existing but not determined or pending and which have or will have a material adverse effect on CMIG PM or the acquisition of the CMIG PM Interests since the date of the CMIG PM Agreement; and
6. there having been no material adverse change to the business, assets and financial conditions of the CMIG PM Group since the date of the CMIG PM Agreement (this condition precedent together with conditions precedent (f) to (h) above, the "Customary Conditions Precedent").

The deposit shall be deposited into the escrow accounts opened by the Vendor with joint signatories of the Vendor and the Purchaser and maintained with a licensed bank in the PRC and shall only be released to the Vendor upon fulfillment of all the conditions precedent to the payment of the deposit of the Fixed Consideration.

As at the Latest Practicable Date, all of the above conditions have been fulfilled and the deposit has been released to the Vendor.

First instalment conditions precedent

Payment of the first instalment of the Fixed Consideration is conditional

upon:

1. all conditions precedent for the payment of the deposit of the Fixed Consideration having been fulfilled;
2. the passing by the A-Living Shareholders who are entitled to vote and not required to be abstained from voting under the Listing Rules at the A-Living EGM to be convened and held, of the necessary special

- 12 -

LETTER FROM THE BOARD

resolution to approve, among other things, the CMIG PM Agreement and the transactions contemplated thereunder;

1. subject to the fulfillment of conditions precedent (b) and (d), all necessary legal procedures required for the transfer of the CMIG PM Interests to the Purchaser and its registration having been completed;
2. the Reorganisation having been completed and all necessary legal procedures required for the Reorganisation and its registration having been completed; and
3. the Customary Conditions Precedent remaining fulfilled.

If condition precedent (b) is not fulfilled, the Purchaser may terminate the CMIG PM Agreement and the Vendor shall refund the deposit paid to the Purchaser within five Working Days after notice of refund has been served by the Purchaser to the Vendor and thereafter neither party to the CMIG PM Agreement shall have any obligations and liabilities thereunder.

If conditions precedent (c) or (d) is not fulfilled due to the default of the Vendor and/or CMIG PM, the Purchaser may terminate the CMIG PM Agreement and the Vendor shall refund the deposit of the Fixed Consideration paid and pay an additional sum equivalent to the deposit of the Fixed Consideration to the Purchaser within five Working Days after notice of refund has been served by the Purchaser to the Vendor and thereafter neither party to the CMIG PM Agreement shall have any obligations and liabilities thereunder.

If conditions precedent (c) or (d) is not fulfilled due to the default of the Purchaser, the Vendor may terminate the CMIG PM Agreement and the Purchaser shall forfeit the deposit of the Fixed Consideration and thereafter neither party to the CMIG PM Agreement shall have any obligations and liabilities thereunder. For the avoidance of doubt, the non-fulfillment of condition precedent (b) would not constitute or lead to the Purchaser 's default resulting in non-fulfillment of condition precedent (c).

CMIG PM Completion takes place upon fulfillment of condition precedent (c) above and issuance of the new business licence by the relevant governmental authority in the PRC.

As at the Latest Practicable Date, conditions precedent (a) and (d) have been fulfilled.

Second instalment conditions precedent

Payment of the second instalment of the Fixed Consideration is conditional

upon:

1. all conditions precedent for the payment of (i) the deposit of the Fixed Consideration; and (ii) the first instalment of the Fixed Consideration having been fulfilled;

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LETTER FROM THE BOARD

1. the Pledge having been released; and
2. the Customary Conditions Precedent having been fulfilled.

No long stop date is set out in the CMIG PM Agreement for each set of the conditions precedent as there are certain approvals that need to be obtained and no reliable estimation of the time required to obtain such approvals can be made as at the Latest Practicable Date. However, the Vendor and the Purchaser are committed to use their best efforts to proceed to CMIG PM Completion as soon as possible.

As at the Latest Practicable Date, none of the above conditions has been fulfilled.

The payment of the Fixed Consideration will be financed by the A-Living Group's internal resources.

1. BASIS OF THE FIXED CONSIDERATION

The Fixed Consideration had been determined after arm's length negotiations between the Purchaser and the Vendor on normal commercial terms with reference to (i) the CMIG PM Guaranteed Profit; (ii) the CMIG PM Interests; and (iii) the PE ratio of 12.5. The P/E ratio of 12.5 within the formula for the calculation of the Fixed Consideration had been determined after arm's length negotiations between the Purchaser and the Vendor on normal commercial terms with reference to, among other things, (i) the Valuation Report;

1. the future business prospect of the CMIG PM Group and the industry in which the CMIG PM Group operates; and (iii) other reasons and benefits of the CMIG PM Acquisition as stated under the paragraph headed "REASONS FOR AND BENEFITS OF THE CMIG PM ACQUISITION" below. In view of the above, the A-Living Directors consider that the P/E Ratio of 12.5 applied in the formula for the calculation of the Fixed Consideration is fair and reasonable.

With reference to the Valuation Report, the indicated P/E ratio as of 30 August 2019 (the "Reference Date") was around 14.67. The indicated P/E ratio was derived through the selection and investigation of comparable companies, which (a) have been actively traded on the Stock Exchange for no less than six months preceding the Reference Date, (b) are mainly engaged in provision of property management services in the PRC, and (c) are with sufficient market and financial data. The calculation also takes into consideration (a) the control premium (being 10.02%), with reference to public transactions which were completed within five years preceding the Reference Date, by comparing the observed prices paid for controlling interests in publicly-traded securities to the publicly-traded price before such a transaction is announced (often referred to as market participant acquisition premiums, or MPAPs), and (b) the liquidity discount (being 27.7%), based on the analysis of Jones Lang LaSalle Corporate Appraisal and Advisory Limited (JLL) with reference to the Job Aid issued by Internal Revenue Service for valuation professionals (for reference only: https://www.irs.gov/businesses/valuation-of-assets).

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LETTER FROM THE BOARD

1. COMPLETION

CMIG PM Completion will take place upon fulfillment of condition precedent (c) in the section headed "First instalment conditions precedent" above and the issuance of the new business licence of CMIG PM by the relevant governmental authority in the PRC.

Upon CMIG PM Completion, the A-Living Group will be interested in 60% equity interest in CMIG PM; and CMIG PM will become a non-wholly-owned subsidiary of A-Living. The financial results of CMIG PM will be consolidated into the A-Living Group's financial statements.

PROFIT GUARANTEE

Pursuant to the CMIG PM Agreement, the Vendor has irrevocably warranted and guaranteed to the Purchaser that the 2019 Audited Net Profit will not be less than RMB208,000,000 (the "CMIG PM Guaranteed Profit").

If the 2019 Audited Net Profit is less than the CMIG PM Guaranteed Profit, the Vendor shall pay a compensation amount to the Purchaser calculated as follows:

A = (the CMIG PM Guaranteed Profit - the 2019 Audited Net Profit) x 12.5 x 60% x (1 + R x N/360) where:

R = Benchmark interest rate for loans for the corresponding period stipulated by the People's Bank of China

N = Number of days lapsed since the date of the payment of the deposit of the Fixed Consideration

Should the CMIG PM Group record an actual consolidated loss for the year ended 31 December 2019, the 2019 Audited Net Profit shall be deemed to be zero.

The Purchaser shall nominate auditors to complete the consolidated audited accounts of the CMIG PM Group for the year ended 31 December 2019 on or before 30 June 2020.

In such event, the Vendor shall pay the compensation amount equivalent to "A" above to the Purchaser within five Working Days after notice of compensation has been served by the Purchaser to the Vendor.

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LETTER FROM THE BOARD

REORGANISATION

As at the Latest Practicable Date, the Reorganisation has been completed. The chart below sets forth the shareholding and simplified corporate structure of the CMIG PM Group immediately before the Reorganisation:

Remaining

Vendor

Shareholder

100%

100%

40%

60%

Ruipei

CMIG

Enterprise

Investment

CMIG PM

63%

100%

100%

51%

40%

Shenzhen

Chongqing

CMIG Youjia

Entity A to

Kerui PM

Longcheng

Xindong

Entity J#

Entity K to

Excluded

Entity

Entity L#

9.3%

51%

Entity M

Entity N

• for simplification purpose only

The chart below sets forth the shareholding and simplified corporate structure of the CMIG PM Group and the New CMIG PM Group immediately after completion of the Reorganisation:

Remaining

Vendor

Shareholder

	40%				60%

CMIG PM

New

CMIG PM

51%

Kerui PM

		63%	100%		51%	9.3%
Entity A to		Shenzhen		Chongqing		Entity N^		Entity M
Entity J#		Longcheng		Xindong

Entity K to

Entity L#

• for simplification purpose only

• As disclosed in the Announcements, the New Entity will be established to hold the 51% equity interest in Entity N as part of the Reorganisation. As at the Latest Practicable Date, for simple corporate structure purpose, the 51% equity interest in Entity N had been transferred to CMIG PM directly.

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LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE CMIG PM ACQUISITION

Through the CMIG PM Acquisition, the current business portfolio and geographic layout of the A-Living Group will be complemented effectively, while consolidating the existing leading position of the A-Living Group and creating synergies. In addition, the CMIG PM Acquisition can largely improve the management scale, profitability and brand competitiveness of the A-Living Group, thereby strengthening the A-Living Group's position as a leading property management services enterprise with nationwide layout, comprehensive business portfolios and reputable brands.

Rapid growth in GFA under management and leap-frog growth in profitability

The CMIG PM Group is one of the largest property management companies in the PRC. For the year ended 31 December 2018, the total GFA under management of the subsidiaries of the CMIG PM Group was approximately 154 million sq.m. and that of their associates was approximately 100 million sq.m., with approximately 1,771 projects in total. Upon CMIG PM Completion, the total GFA under management of the A-Living Group (including the GFA under management of its associates) will approach approximately 500 million sq.m. with approximately 2,800 projects. In addition, the CMIG PM Group has significant track record results with a high contract renewal rate of 95%. For the year ended 31 December 2018, the CMIG PM Group excluding Kerui PM recorded a total revenue of RMB3.1 billion and a total net profit after taxation of RMB199.7 million, on the pro forma basis that the Reorganisation had taken place as at 1 January 2018. Excluding the adjusting items in the reconciliations as disclosed in the section headed "Financial information of the CMIG PM Group" in this circular, the CMIG PM Group recorded net profit after tax of approximately RMB267.2 million for the financial year ended 31 December 2018. Upon CMIG PM Completion, the revenue and profit level of the A-Living Group is expected to achieve leap-frog growth. The established first mover advantage of the CMIG PM Group in city clusters and its various business portfolios and existing presence are expected to complement and create synergies with the current business and profitability of the A-Living Group.

Consolidating strengths in existing regions and complementing blanks in geographic layout

The CMIG PM Group has a nationwide presence in well-developed city clusters, which is expected to enable the A-Living Group to rapidly complete its national presence. Through the CMIG PM Acquisition, the A-Living Group can further strengthen its leading position in several regions in the PRC including the Guangdong-HongKong-Macao Greater Bay Area and the Yangtze River Delta. Meanwhile, the CMIG PM Acquisition is also expected to complement the A-Living Group's existing geographic coverage in major regions such as the Shandong Peninsula, Sichuan and Chongqing. Upon CMIG PM Completion, the GFA under management of the A-Living Group in four major city clusters, including the Yangtze River Delta Area, the Guangdong-HongKong-Macao Greater Bay Area, the Shandong Peninsula and Sichuan and Chongqing, will exceed 40 million sq.m., which will result in a greater market share for A-Living and is expected to lead to better economies of scale on a regional basis.

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LETTER FROM THE BOARD

Diversified business portfolios, coverage of the entire industrial chain and entry to niche markets

The CMIG PM Group has under its management a diversified business portfolio, including public buildings, commercial and office buildings, and residential buildings. The CMIG PM Group has a leading market share with high brand recognition in the public buildings and niche property markets in the PRC. As at the Latest Practicable Date, the principal management portfolio of the A-Living Group consists of mid- to high- end residential properties. Through the CMIG PM Acquisition, the A-Living Group's portfolio of properties under management will be enhanced, especially in the segments of public buildings, commercial buildings and office buildings, which traditionally have higher entry barrier and have promising prospects. These developments will further enhance the A-Living Group's ability to establish itself as a national comprehensive property management services group with a diversified portfolio comprising residential properties, public buildings and commercial and office buildings under management.

Ownership of well-established quality brands and enhancement of brand competitiveness

The CMIG PM Group positions itself as provider of mid- to high- end services and has high brand awareness in different regions nationwide. It owns eight renowned brands ranked among the "2018 TOP100 property management companies in terms of comprehensive strengths" by the China Property Management Association. Its brands also have great influence in various niche markets such as commercial buildings, cultural facilities, government office buildings, industrial parks, and transportation infrastructure. The CMIG PM Group manages numerous city landmark projects and has experience in managing large-scale public building projects and serving international conventions. Leveraging on the CMIG PM Group's well-known brands and rich management experience, the brand competitiveness of the A-Living Group will be largely enhanced, and the A-Living Group will be able to enter into niche markets of property management with high entry barriers, which will serve as a solid foundation for the obtaining of new high-end and large-scale property management projects in the future.

Efficient sharing of market resources and continuous improvement in market share

Upon CMIG PM Completion, the A-Living Group and the CMIG PM Group can benefit from the efficiency brought by the sharing of resources and marketing network, which is expected to improve the management and financial performance of the A-Living Group. The CMIG PM Group is one of the largest property management companies in the PRC with strong expansion capability, which can enable the A-Living Group to further increase the proportion of management projects from third-party property developers and increase its market share.

The A-Living Group will complete its national and multi-business portfolio layout, becoming a leading company in terms of market share in different regions and business portfolios. Benefiting from mutual strengths of brands and regional edges, the A-Living Group and the CMIG PM Group are able to consolidate the leading positions in various regions and niche markets, especially in public building portfolio. The scale and overall market share of the A-Living Group will be further enhanced as well.

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LETTER FROM THE BOARD

Improvements in operational and management efficiency

Upon CMIG PM Completion, the operation level of the CMIG PM Group will be strengthened through management team appointments by the A-Living Group, communications in business operations, alignment of quality benchmarks and sharing of information systems, thus achieving comprehensive integration. In addition, for the purpose of integration, the same financial and operation systems will be shared, resulting in standardised and centralised management capability. Through refined management for the purpose of reducing costs and enhancing efficiency, as well as the benefits to be generated from economies of scale, the profitability of the CMIG PM Group is expected to be further enhanced.

Output its management experience in value-added services and explore great potential in value-added services

Through the CMIG PM Acquisition, which will bring about expansion of management scale in the industry, the A-Living Group will become one of the largest platforms for developing community value-added services as well as value-added services for commercial and office buildings. The CMIG PM Group has a significant GFA under management, and the community-value added services of the CMIG PM Group are under rapid development though the current penetration rate of community value-added services is still relatively low. Upon CMIG PM Completion, the A-Living Group will, through the collection and rearrangement of the contents and resources of the value-added services of the CMIG PM Group, as well as its experience in the area, focus on exploring and developing the potential for community value-added services. It is expected that the A-Living Group and the CMIG PM Group can jointly explore new opportunities in community value-added services. The outstanding public building and commercial and office building value-added services brands of the CMIG PM Group could also serve as a prototype for the other existing public building projects of the A-Living Group.

INFORMATION ON A-LIVING AND THE PURCHASER

A-Living

A-Living is a reputable property management services provider focusing on mid- to high-end properties, offering a comprehensive portfolio of services. It has three business lines, namely property management services, community value-added services and extended value-added services, and has expanded its business coverage into the whole industry chain with a diversified business portfolio, and has formed the synergetic development of four major business segments, namely "property management services", "asset management services", "public services" and "community commercial services".

The Purchaser

The Purchaser is a company established in the PRC with limited liability and is principally engaged in business management advisory. The Purchaser is an indirect wholly-owned subsidiary of A-Living.

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LETTER FROM THE BOARD

INFORMATION ON THE VENDOR AND THE REMAINING SHAREHOLDER

The Vendor

The Vendor is a limited partnership established in accordance with the Partnership Laws of the PRC with the business scope of equity investment and related consulting services.

The Vendor is ultimately and beneficially owned by Mr. Chen Xiaofeng, Mr. Lu Jinghui, Mr. Wei Lidong and Mr. Wang Ping.

To the best of the knowledge, information and belief of the A-Living Board, after making all reasonable enquiries, the Vendor, its limited partners and its general partners and their respective ultimate beneficial owners are Independent Third Parties.

The Remaining Shareholder

The Remaining Shareholder is a company established in the PRC with limited liability and is principally engaged in investment management.

The Remaining Shareholder is ultimately and beneficially owned by Mr. Luo Xijian, Mr. Luo Guangxi, Mr. Luo Xianwu, Ms. Cai Shaomin, Ms. He Nini and China Minsheng Investment Corp., Ltd.

To the best of the knowledge, information and belief of the A-Living Board after making all reasonable enquiries, China Minsheng Investment Corp., Ltd. is a leading international private investment group founded in Shanghai which was initiated by the All-China Federation of Industry and Commerce in China and launched by 59 large-scale private enterprises in the PRC, some of which are among the PRC's top 500 companies. China Minsheng Investment Corp., Ltd. is a conglomerate with a wide variety of businesses including equity investment, equity investment management, business consulting, financial consulting, industrial investment, asset management, and investment consulting.

To the best of the knowledge, information and belief of the A-Living Board after making all reasonable enquiries, the Remaining Shareholder and its ultimate beneficial owners are Independent Third Parties.

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LETTER FROM THE BOARD

INFORMATION OF THE CMIG PM GROUP

CMIG PM is a company established in the PRC with limited liability and is principally engaged in property management services.

The chart below sets forth the simplified corporate structure of the CMIG PM Group as at the Latest Practicable Date:

Remaining		Vendor
Shareholder

														40%										60%
																						CMIG PM
		100%																				67%
	9.3%			51%		100%			100%					70%				63%		35%		35%		26.01%		25%
Entity	Chonqing		Entity N	Entity A		Entity B		Entity E		Entity F	Shenzhen	Entity G	Entity H		Entity I	Entity J
Xindong					Longcheng
M
									90.33%				24.17%
									Entity			Entity
		51% 51%							C				D

Entity Entity

• L

Shenzhen Longcheng is a company established in the PRC with limited liability and is principally engaged in property management. Shenzhen Longcheng is owned as to 63% by CMIG PM.

Chongqing Xindong is a company established in the PRC with limited liability and is principally engaged in investment management. Chongqing Xindong is a direct wholly-owned subsidiary of CMIG PM.

Entity A is a company established in the PRC with limited liability and is principally engaged in investment management. Entity A is a direct wholly-owned subsidiary of

CMIG PM.

Entity B is a company established in the PRC with limited liability and is principally engaged in investment holding. Entity B is a direct wholly-owned subsidiary of CMIG PM.

Entity C is a company established in the PRC with limited liability and is principally engaged in property management. Entity C is owned as to 90.33% by Entity A.

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LETTER FROM THE BOARD

Entity D is a company established in the PRC with limited liability and is principally engaged in property management. Entity D is owned as to 24.17% by Entity B.

Entity E is a company established in the PRC with limited liability and is principally engaged in property management. Entity E is owned as to 70% by CMIG PM.

Entity F is a company established in the PRC with limited liability and is principally engaged in property management. Entity F is owned as to 67% by CMIG PM.

Entity G is a company established in the PRC with limited liability and is principally engaged in property management. Entity G is owned as to 35% by CMIG PM.

Entity H is a company established in the PRC with limited liability and is principally engaged in property management. Entity H is owned as to 35% by CMIG PM.

Entity I is a company established in the PRC with limited liability and is principally engaged in property management. Entity I is owned as to 26.01% by CMIG PM. Pursuant to an acting-in-concert agreement dated 13 March 2019 and entered into between CMIG PM and Mr. Wei Bing (the remaining shareholder of Entity I), Mr. Wei Bing agreed to vote on any resolution to be passed at any shareholders' meeting of Entity I in the same manner as CMIG PM and the financial results of Entity I shall be consolidated into CMIG PM. Given such acting-in-concert agreement will remain effective at the time of CMIG PM Completion, Entity I will become a non-wholly owned subsidiary of A-Living upon CMIG PM Completion.

Entity J is a company established in the PRC with limited liability and is principally engaged in property management. Entity J is owned as to 25% by CMIG PM.

Entity K is a company established in the PRC with limited liability and has not yet commenced operation. Entity K is owned as to 51% by Chongqing Xindong.

Entity L is a company established in the PRC with limited liability and is principally engaged in property management. Entity L is owned as to 51% by Chongqing Xindong.

Entity M is a company established in the PRC with limited liability and is principally engaged in property management. Entity M is owned as to 9.3% by CMIG PM.

Entity N is a company established in the PRC with limited liability and is principally engaged in property management. Entity N is owned as to 51% by CMIG PM.

- 22 -

LETTER FROM THE BOARD

FINANCIAL INFORMATION OF THE CMIG PM GROUP

Set out below is the audited combined financial information of the pre-reorganised CMIG PM Group for the three years ended 31 December 2018 and the nine months ended 30 September 2019 respectively (the "Track Record Period") as extracted from Appendix II to this circular:

				For the
				nine
				months
				ended 30
	For the year ended 31 December	September
	2016	2017	2018	2019
	RMB'000	RMB'000	RMB'000	RMB'000
Revenue	809,814	3,190,745	4,069,769	3,124,718
Net profit before
taxation	84,660	272,091	345,214	286,646
Net profit after
taxation	63,528	211,486	259,525	218,758

Based on the audited combined financial information of the pre-reorganised CMIG PM Group, the net asset value of the CMIG PM Group was approximately RMB2,357.9 million as at 30 September 2019.

As part of the Reorganisation, the pre-reorganised CMIG PM Group disposed of its entire 51% equity interest in Kerui PM to the New CMIG PM Group on 11 December 2019. Set out below is the pro forma combined financial information of the CMIG PM Group for the Track Record Period prepared on the assumption that such disposal had taken effect at the beginning of the Track Record Period, as extracted from the section headed "events after the balance sheet date" of Appendix II to this circular:

				For the nine
				months ended
	For the year ended 31 December		30 September
	2016	2017	2018	2019
	RMB'000	RMB'000	RMB'000	RMB'000
Revenue	620,963	2,383,559	3,125,762	2,377,191
Net profit before taxation	67,453	211,797	263,720	228,121
Net profit after taxation	50,597	165,953	199,745	175,380

Based on the pro forma combined financial information of the CMIG PM Group, the net asset value of the CMIG PM Group was approximately RMB2,037.2 million as at 30 September 2019.

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LETTER FROM THE BOARD

Reconciliation of financial information of the CMIG PM Group

Set out below is a reconciliation of revenue of the CMIG PM Group between the pro forma combined financial information of the CMIG PM Group for the Track Record Period as disclosed in the section headed "events after the balance sheet date" of Appendix II to this circular and the unaudited combined financial information of the CMIG PM Group as disclosed in the Announcements, which was prepared based on simple aggregation of the full year revenue of each of the subsidiaries of the CMIG PM Group:

				For the nine
				months ended
	For the year ended 31 December	30 September
	2016	2017	2018	2019
	RMB'000	RMB'000	RMB'000	RMB'000
Revenue per pro forma combined financial
information as extracted from the section
headed "events after the balance sheet date"
of Appendix II to this circular	620,963	2,383,559	3,125,762	2,377,191
Add back/(minus):
Adjustment taking into account of the
respective dates of acquisition/
disposal (Note 1)	1,695,157	153,001	(124,697)	nil
Other adjustments (Note 2)	(265)	37	753	nil
Revenue per unaudited combined financial
information as disclosed in the
Announcements/ prepared on the same
basis as disclosed in the Announcements	2,315,855	2,536,597	3,001,818	2,377,191(Note 3)

Notes:

1. The adjustment represents (i) the pre-acquisition revenue of the subsidiaries of the CMIG PM Group from the beginning of the Track Record Period up to the respective dates of the historical acquisition; and (ii) the revenue of Entity G from 1 October 2017 to 31 May 2018, when the CMIG PM Group had obtained control of Entity G through an acting in concert arrangement.
2. The adjustment arose primarily due to differences in materiality levels used in the preparation of the pro forma combined financial statements and that for the standalone financial statements which is prepared in accordance with the Accounting Standards for Business Enterprises of the People's Republic of China issued by the China Ministry of Finance.
3. Such amount has not been included in the Announcements. For illustrative purpose, such amount represents the revenue of the CMIG PM Group for the nine months ended 30 September 2019 prepared based on the same basis as those disclosed in the Announcements, which is based on the simple aggregate of revenue of each subsidiaries of CMIG PM Group.

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LETTER FROM THE BOARD

Set out below is a reconciliation of net profit after taxation of the CMIG PM Group between the pro forma combined financial information of the CMIG PM Group for the Track Record Period as disclosed in the section headed "events after the balance sheet date" of Appendix II to this circular and the unaudited combined financial information of the CMIG PM Group as disclosed in the Announcements, which was prepared based on simple aggregation of the full year profit or loss of each of the subsidiaries in the CMIG PM Group:

Net profit after taxation per pro forma combined financial information as extracted from the section headed "events after the balance sheet date" of Appendix II to this circular

Add back:

Adjustment taking into account the respective dates of acquisition/

disposal (Note 1)

Amortisation of the intangible assets (Note 2) Unallocated and non-recurring corporate

expenses

Other adjustments(Note 3)

Net profit after taxation and excluding extraordinary items per unaudited combined financial information as disclosed in the Announcements/ prepared on the same basis as disclosed in the Announcements

Notes:

			For the nine
			months ended
For the year ended 31 December	30 September
2016	2017	2018	2019
RMB'000	RMB'000	RMB'000	RMB'000

50,597

165,953

199,745

175,380

140,185	38,837	11,795	4,158
8,899	29,095	35,936	27,577
4,131	5,049	15,862	10,254
3,111	4,392	3,834	(296)

206,923

243,326

267,172

217,073(Note 4)

1. The adjustment represents (i) the pre-acquisition profit of the subsidiaries of the CMIG PM Group from the beginning of the Track Record Period to the respective dates of the historical acquisition; and (ii) the profit of the Entity G from 1 October 2017 to 31 May 2018, when the CMIG PM Group had obtained control of Entity G through an acting in concert arrangement.
2. Such amount arose from recognition of intangible assets upon the purchase price allocation as a result of the historical acquisition of the relevant subsidiaries.
3. Other adjustments primarily include extraordinary items such as interest expenses attributable to Remaining Shareholder, non-recurringshare-based payments and one-off tax relief.
4. Such amount has not been included in the Announcements. For illustrative purpose, such amount represents the net profit after taxation and excluding extraordinary items of the CMIG PM Group for the nine months ended 30 September 2019 prepared based on the same basis as those disclosed in the Announcements, which is based on the simple aggregate of the net profit of each of the subsidiaries of CMIG PM Group and the respective share of the relevant profit of each of the associated companies of the CMIG PM Group.

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LETTER FROM THE BOARD

As disclosed in Note 21 to the section headed "APPENDIX II - ACCOUNTANT'S REPORT ON THE CMIG PM GROUP" to this circular, Kerui PM had loans and interests receivables from the Remaining Shareholder amounting to RMB1,933 million, RMB1,693 million and RMB1,379 million as at 31 December 2017 and 2018 and 30 September 2019, respectively. Kerui PM's loan and interest receivables due from the Remaining Shareholder amounting to RMB1,379 million as at 30 September 2019, together with other assets attributable to Kerui PM, were classified as "assets classified as held for disposal" as at 30 September 2019 as a result of the CMIG PM's subsequent disposal of Kerui PM to New CMIG PM at a fixed consideration in December 2019.

The management of A-Living and the CMIG PM Group performed an assessment of the recoverability of Kerui PM's receivables from the Remaining Shareholder with reference to a settlement plan provided and committed by the Remaining Shareholder, which includes cash of RMB588 million subsequently received and held in an escrow bank account held and controlled by CMIG PM that is attributable to these receivables, estimate proceeds from future dividends from the CMIG PM Group, and net proceeds from future disposals of certain assets of the Remaining Shareholder in excess of the liabilities to other creditors for which such assets are pledged. It was concluded that no impairment provision was required against Kerui PM's receivables from Remaining Shareholder as at 31 December 2017 and 2018 and the relevant amount included in "assets classified as held for disposal" as at 30 September 2019.

Despite the settlement plan provided by the Remaining Shareholder and the above cash subsequently received in December 2019 and kept in an escrow account held by CMIG PM, management of the CMIG PM Group was not able to provide sufficient and appropriate evidence to support their assessment of the recoverability of Kerui PM's receivables from the Remaining Shareholder, including but not limited to, evidence with respect to (i) the financial situation of the Remaining Shareholder to honour its settlement obligation, especially given that the Remaining Shareholder is a private company which is ultimately controlled by a group of companies that is under significant financial stress; (ii) whether the remaining cash of RMB588 million held in the escrow account that is attributable to Kerui PM's receivables from the Remaining Shareholder and the entitlement to future dividend from the CMIG PM Group can be enforced to settle Kerui PM's receivables as and when they fall due; and (iii) the availability, realisable value and timing of disposals of the Remaining Shareholder 's assets and the net disposal proceeds available after settling the relevant liabilities to other creditors to which the assets are pledged.

As a result of the aforesaid, the auditor of the CMIG PM Group has issued a qualified opinion on the pre-reorganised CMIG PM Group's combined financial statements for the year ended 31 December 2017 and 2018 and for the nine months ended 30 September 2019 and a qualified conclusion for the nine months ended 30 September 2018.

However, as part of the Reorganisation and as one of the first instalment conditions precedent, the pre-reorganised CMIG PM Group disposed of its entire 51% equity interest in Kerui PM to the New CMIG PM Group on 11 December 2019. For the purpose of the unaudited pro forma financial information of the Enlarged Group as set out in Appendix

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LETTER FROM THE BOARD

1. to this circular and in consideration of the fact that the disposal of Kerui PM is a pre-condition to the CMIG PM Completion, the assets (including Kerui PM's loans and interest receivables due from the Remaining Shareholder, which is the subject matter of the qualified audit opinion as mentioned above), liabilities and financial results of Kerui PM had been excluded from the pre-reorganised CMIG PM Group's combined financial statements through pro forma adjustments, and the aforementioned audit qualification does not have impact on the unaudited pro forma financial information of the Enlarged Group as disclosed in the section headed "UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP", which has been properly compiled in accordance with Rule 4.29 of the Listing Rules, and with reference to Accounting Guideline 7 Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants.

FINANCIAL EFFECTS OF THE CMIG PM ACQUISITION ON THE A-LIVING GROUP

Earnings

The audited net profit after tax of the A-Living Group for the financial year ended 31 December 2018, as disclosed in 2018 annual report of A-Living, was approximately RMB811 million.

As set out in the section headed "events after the balance sheet date" of Appendix II to this circular, the CMIG PM Group recorded an unaudited net profit after tax of approximately RMB199.7 million for the financial year ended 31 December 2018 and approximately RMB175.4 million for the nine months ended 30 September 2019.

Excluding the adjusting items in the reconciliations, the CMIG PM Group recorded net profit after tax of approximately RMB267.2 million for the financial year ended 31 December 2018 and approximately RMB217.1 million for the nine months ended 30 September 2019.

The Directors consider that the CMIG PM Acquisition will bring positive contribution to the earnings of the Enlarged Group but the quantification of such contribution will depend on the respective future performance of the CMIG PM Group.

Assets and liabilities

As set out in the unaudited pro forma financial information of the Enlarged Group in Appendix III to this circular, if the CMIG PM Acquisition had been taken place as at 30 June 2019, the A-Living Group's total assets would increase from approximately RMB8.69 billion to approximately RMB12.33 billion and total liabilities would increase from approximately RMB2.92 billion to approximately RMB5.69 billion, representing a total consolidated net assets position of approximately RMB6.64 billion upon CMIG PM Completion.

Further details of the financial effect of the CMIG PM Acquisition together with the bases and assumptions taken into account in preparing the unaudited pro forma financial information of the Enlarged Group are set out, for illustration purpose only, in Appendix III to this circular.

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LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the Acquisitions on an aggregated basis, exceed(s) 100%, the Acquisitions constitute a very substantial acquisition for A-Living under Chapter 14 of the Listing Rules subject to the reporting, announcement, circular requirements and shareholders' approval requirements under Chapter 14 of the Listing Rules.

A-LIVING EGM

A notice convening the A-Living EGM is set out on pages EGM-1 to EGM-3 of this circular. The A-Living EGM will be convened and held at Conference Room, 33/F, Agile Center, 26 Huaxia Road, Zhujiang New Town, Tianhe District, Guangzhou, Guangdong Province, PRC on Tuesday, 17 March 2020 at 10:00 a.m. to consider and, if thought fit, approve the special resolution in relation to, among other things, the CMIG PM Agreement and the transaction contemplated thereunder by the A-Living Shareholders who are entitled to vote and not required to be abstained from voting under the Listing Rules.

The proxy form of the A-Living EGM is also enclosed in this circular.

If you intend to appoint a proxy to attend the A-Living EGM, you are required to complete and return the accompanying proxy form in accordance with the instructions printed thereon. For shareholders of H Shares, the proxy form should be returned to A-Living's H Share Registrar, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong. For shareholders of Domestic Shares and Unlisted Foreign Shares, the proxy form should be returned to A-Living's principal place of office in the PRC at 35th Floor, Agile Center, 26 Huaxia Road, Zhujiang New Town, Tianhe District, Guangzhou, Guangdong Province, PRC by personal delivery or by post not less than 24 hours before the time fixed for holding the A-Living EGM or any adjourned meeting thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the A-Living EGM or at any other adjourned meeting should you so wish.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of A-Living Shareholders at a general meeting must be taken by poll. Therefore, voting on all resolutions set out in the notice of A-Living EGM shall be taken by way of poll. Any A-Living Shareholders who are involved in or interested in the CMIG PM Acquisition are required to abstain from voting on the relevant special resolution(s) approving the CMIG PM Acquisition.

As at the Latest Practicable Date, to the best of A-Living Directors' knowledge, information and belief after having made all reasonable enquiries, no A-Living Shareholder has a material interest in the CMIG PM Acquisition and is required to abstain from voting on the relevant resolution(s) to be proposed at the A-Living EGM.

- 28 -

LETTER FROM THE BOARD

Closure of register of members

The A-Living EGM will be held on Tuesday, 17 March 2020. For the purpose of determining the entitlement of the A-Living Shareholders to attend and vote at the A-Living EGM, the register of members of A-Living has been closed from Monday, 17 February 2020 to Tuesday, 17 March 2020, both days inclusive, during which period no transfer of A-Living Shares will be registered. In order to qualify for attending and voting at the A-Living EGM, all share transfer documents, together with the relevant share certificates, must be lodged with A-Living's H Share Registrar, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong not later than 4:30 p.m. on Friday, 14 February 2020.

RECOMMENDATION

The A-Living Directors consider that the CMIG PM Acquisition is made on normal commercial terms, fair and reasonable and in the interests of A-Living and the A-Living Shareholders as a whole. Accordingly, the A-Living Directors recommend the A-Living Shareholders to vote in favour of the resolution to be proposed at the A-Living EGM to approve the CMIG PM Acquisition.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this circular.

Yours faithfully,

On behalf of the Board of

A-Living Services Co., Ltd.

LI Dalong

Company Secretary

- 29 -

APPENDIX I

FINANCIAL INFORMATION OF THE A-LIVING GROUP

1. SUMMARY OF FINANCIAL INFORMATION

The consolidated financial information of the A-Living Group for the year ended 31 December 2016, 2017 and 2018 and for the six months ended 30 June 2019 are disclosed in the following documents which have been published on the respective websites of the Stock Exchange (www.hkexnews.hk) and A-Living (www.agileliving.com.cn) and are incorporated by reference into this circular:

1. annual report of A-Living for the year ended 31 December 2016 and 2017
   published on 11 April 2018 (pages 78 to 148) (https://www1.hkexnews.hk/listedco/listconews/sehk/2018/0411/ltn20180411571.pdf);
2. annual report of A-Living for the year ended 31 December 2018 published on
   9 April 2019 (pages 91 to 172) (https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0409/ltn20190409485.pdf); and
3. interim report of A-Living for the six months ended 30 June 2019 published on
   9 September 2019 (pages 31 to 72) (https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0909/ltn20190909485.pdf).

2. INDEBTEDNESS

As at the close of business on 31 December 2019, being the most recent practicable date for the purpose of the statement of indebtedness prior to the printing of this circular, the Enlarged Group had outstanding borrowings and lease liabilities of RMB522,506,000, details of which are set out as follows:

		CMIG PM
	The	Group
	A-Living	(excluding
	Group	Kerui PM)	Total
	RMB'000	RMB'000	RMB'000
Borrowings	36,300	459,832	496,132
Bank borrowings
- Secured	21,300	24,832	46,132
Asset-backed securities
- Secured	-	435,000	435,000
Non-controlling shareholder
loan
- Unsecured	15,000	-	15,000
Lease liabilities	15,200	11,174	26,374
Total	51,500	471,006	522,506

- I-1 -

APPENDIX I

FINANCIAL INFORMATION OF THE A-LIVING GROUP

The A-Living Directors confirm that, save as aforesaid and apart from intra-group liabilities and normal trade payables in the ordinary course of business, as at the close of business on 31 December 2019, the Enlarged Group did not have any material debt securities issued and outstanding, and authorised or otherwise created but unissued, or term loans or other borrowings or indebtedness in the nature of borrowing of the Enlarged Group including bank overdrafts and liabilities under acceptances or acceptance credits or hire purchase commitments or outstanding mortgages and charges or guarantees or other material contingent liabilities.

3. WORKING CAPITAL

The A-Living Directors are of the opinion that, after taking into account of the financial resources available to the Enlarged Group, including internally generated funds, existing bank and other borrowings, in the absence of unforeseen circumstances, the Enlarged Group has sufficient working capital for its requirements for the next twelve (12) months from the date of this circular.

4. FINANCIAL AND TRADING PROSPECTS OF THE A-LIVING GROUP

The A-Living Group is a reputable property management service provider focusing on mid- to high-end properties. It offers a comprehensive portfolio of services and has developed three business lines, namely property management services, community value-added services and extended value-added services. The A-Living Group has expanded its business coverage into whole industry chain with diversified business portfolio, and has formed the synergetic development of four major business segments, namely "property management services", "asset management services", "public services" and "community commercial services".

The CMIG PM Group is one of the largest property management companies in the PRC, which have a diversified business portfolio coverage, including residential, public, commercial and office buildings. They are mid- to high-end property management services providers with a nationwide presence in well-developed city clusters and high brand awareness in in different regions nationwide. For the year ended 31 December 2018, the total GFA under management of the subsidiaries of the CMIG PM Group was approximately 154 million sq.m. and that of the associates was approximately 100 million sq.m., with approximately 1,771 projects in total. The service projects are broadly located in the country, especially in some well-developed city clusters, including the Yangtze River Delta Area, the Guangdong-HongKong-Macao Greater Bay Area, the Shandong Peninsula and Sichuan and Chongqing.

Upon CMIG PM Completion, the current business portfolio and geographic layout of A-Living will be complemented effectively, while consolidating the existing leading position of A-Living and creating synergies. In addition, the CMIG PM Acquisition can largely improve the management scale, profitability and brand competitiveness of A-Living, thereby strengthening A-Living's position as a leading property management services enterprise with nationwide layout, comprehensive business portfolios and reputable brands.

Looking forward, adhering to the development strategy of 'consolidating footholds in Beijing, Shanghai and Guangzhou, and serving the whole nation of China', A-Living

- I-2 -

APPENDIX I

FINANCIAL INFORMATION OF THE A-LIVING GROUP

will continuously pursue the balanced layout with national geographic coverages and diversified business portfolio. Following the CMIG PM Acquisition, A-Living will focus on the consolidation with CMIG PM, solidifying its leading position and creating synergies. A-Living will further expand market shares in property management service segment of residential, public, commercial and office buildings, exploring the potential of community value-added services, improving operating efficiency, so as to create better and longer-term returns for A-Living Shareholders.

5. MATERIAL ADVERSE CHANGE

The A-Living Directors confirm that there had been no material adverse change in the financial or trading position of the A-Living Group since 31 December 2018, being the date to which the latest published audited financial statements of A-Living were made up, up to the Latest Practicable Date.

6. COMPANIES ACQUIRED AFTER THE DATE TO WHICH THE LATEST PUBLISHED AUDITED ACCOUNTS WERE MADE UP

Acquisitions conducted on 23 January 2019 and 21 February 2019

Reference is made to the announcements of A-Living dated 23 January 2019 and 21 February 2019 respectively (the "First Previous Announcements"). Capitalised terms used in this sub-paragraph shall have the same meanings as those defined in the First Previous Announcements unless otherwise indicated.

On 23 January 2019, A-Living entered into two Share Transfer Agreements, pursuant to which A-Living agreed to acquire, and the Vendors agreed to dispose of, in aggregate, 89.6643% shares in the Target Company at a total consideration of RMB133,580,565.32.

The Target Company was established in 1994 and the shares of the Target Company were listed on NEEQ in April 2015. As of 31 December 2018, a total number of 38 projects is managed by the Target Company with a total managed gross floor area of approximately 5.7 million square meters. As disclosed in the First Previous Announcements, the Target Company is principally engaged in the provision of property management services to residential properties, commercial properties and other municipal properties in Shandong Province. The Target Company is an executive council member of China Property Management Institute and a governing unit of Qingdao Property Management Institute.

- I-3 -

APPENDIX I

FINANCIAL INFORMATION OF THE A-LIVING GROUP

As at the Latest Practicable Date, the Acquisition has been completed. There will be no variation in the aggregate of the remuneration payable to and benefits in kind receivable by the directors of the acquiring company in consequence of such acquisition.

Acquisition conducted on 23 January 2019 and 26 February 2019

Reference is made to the announcements of A-Living dated 23 January 2019 and 26 February 2019 respectively (the "Second Previous Announcements"). Capitalised terms used in this sub-paragraph shall have the same meanings as those defined in the Second Previous Announcements unless otherwise indicated.

On 26 February 2019, A-Living, the Vendors and the Target Company entered into the Formal Agreement, pursuant to which the Company agreed to acquire, and the Vendors agreed to dispose of, an aggregate of 60% equity interest in the Target Company at a total consideration of RMB113,881,542.

The Target Company was founded in 1999. The Target Company is a property management enterprise with National Level I qualification and standing director unit of China Property Management Institute. As of 31 December 2018, the Target Company had 56 projects under management, with a total managed gross floor area of approximately 9.78 million square meters. As disclosed in the Second Previous Announcements, the Target Company is committed to providing property management services for mid- to high-end residential properties, commercial properties, office buildings and other projects within Heilongjiang Province. The Target Company is the leading property management enterprise in Heilongjiang Province, which has strong brand influence in Harbin and with high project renewal rate.

As at the Latest Practicable Date, the Acquisition has been completed. There will be no variation in the aggregate of the remuneration payable to and benefits in kind receivable by the directors of the acquiring company in consequence of such acquisition.

- I-4 -

APPENDIX I

FINANCIAL INFORMATION OF THE A-LIVING GROUP

Acquisition conducted on 28 March 2019

Reference is made to the announcement of A-Living dated 28 March 2019 (the "Third Previous Announcement"). Capitalised terms used in this sub-paragraph shall have the same meanings as those defined in the Third Previous Announcement unless otherwise indicated.

On 28 March 2019, the Purchaser (an indirect wholly-owned subsidiary of the Company), the Vendor, the Target Company and Other Shareholders entered into the Agreement, pursuant to which the Purchaser agreed to acquire, and the Vendor agreed to dispose of, 51% equity interest in the Target Company at a consideration of RMB195,344,575.

The Target Company was established in 1994 and is a regional leading property management enterprise majorly serving public buildings with National Level I qualification. It is one of Top 100 property management companies in the PRC and serves as vice president unit of China Property Management Institute. As of 31 December 2018, the Target Company had a total number of 257 projects under management, with a total managed gross floor areas of approximately 30 million square meters. As disclosed in the Third Previous Announcement, the Target Company is committed to providing property management services for mainly public building projects in Guangzhou and other regions in Guangdong Province, Eastern China and Central China.

As at the Latest Practicable Date, the Acquisition has been completed. There will be no variation in the aggregate of the remuneration payable to and benefits in kind receivable by the directors of the acquiring company in consequence of such acquisition.

- I-5 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

The following is the text of a report set out on pages II-1 to II-5, received from the Company's reporting accountant, PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this circular.

ACCOUNTANT'S REPORT ON HISTORICAL FINANCIAL INFORMATION OF CMIG FUTURELIFE PROPERTY MANAGEMENT LIMITED TO THE DIRECTORS OF A-LIVING SERVICES CO., LTD.

Introduction

We report on the historical financial information of CMIG Futurelife Property Management Limited ("CMIG PM") and its subsidiaries (together, the "CMIG PM Group") set out on pages II-6 to II-113, which comprises the CMIG PM Group's combined statements of financial position as at 31 December 2016, 2017 and 2018 and 30 September 2019, CMIG PM's statements of financial position as at 31 December 2018 and 30 September 2019, and the CMIG PM Group's combined statements of comprehensive income, the combined statements of changes in equity and the combined statements of cash flows for each of the years/periods then ended (the "Track Record Period") and a summary of significant accounting policies and other explanatory information (together, the "Historical Financial Information"). The Historical Financial Information set out on pages II-6 to II-113 forms an integral part of this report, which has been prepared for inclusion in the circular of A-Living Services Co., Ltd. (the "Company") dated 24 February 2020 (the "Circular") in connection with the proposed acquisition of 60% equity interest in CMIG PM by the Company.

Directors' responsibility for the Historical Financial Information

The directors of the Company and CMIG PM are responsible for the preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of presentation and preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information, and for such internal control as the directors determine is necessary to enable the preparation of Historical Financial Information that is free from material misstatement, whether due to fraud or error.

- II-1 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

Reporting accountant's responsibility

Our responsibility is to express an opinion on the Historical Financial Information and to report our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 200, Accountants' Reports on Historical Financial Information in Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"). This standard requires that we comply with ethical standards and plan and perform our work to obtain reasonable assurance about whether the Historical Financial Information is free from material misstatement.

Our work involved performing procedures to obtain evidence about the amounts and disclosures in the Historical Financial Information. The procedures selected depend on the reporting accountant's judgement, including the assessment of risks of material misstatement of the Historical Financial Information, whether due to fraud or error. In making those risk assessments, the reporting accountant considers internal control relevant to the entity's preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of presentation and preparation set out in Notes

1.3 and 2.1 to the Historical Financial Information in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Our work also included evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the Historical Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion for the year ended 31 December 2016 and our qualified opinions for the years ended 31 December 2017 and 2018 and the nine months ended 30 September 2019.

Opinion for the year ended 31 December 2016

In our opinion, the Historical Financial Information for the year ended 31 December

2016 gives, for the purposes of the accountant's report, a true and fair view of the combined financial position of the CMIG PM Group as at 31 December 2016 and of its combined financial performance and its combined cash flows for the year then ended in accordance with the basis of presentation and preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information.

Basis for qualified opinions for the years ended 31 December 2017 and 2018 and the nine months ended 30 September 2019

As described in Note 21 to the Historical Financial Information, the CMIG PM Group's subsidiary, Shanghai Kerui Property Management Development Co., Ltd. ("Kerui PM"), had loan and interest receivables due from CMIG Futurelife Holdings Group Company Limited (the "Remaining Shareholder") amounting to RMB1,932.8 million, RMB1,693.4 million and RMB1,379.1 million as at 31 December 2017 and 2018 and 30 September 2019, respectively. Kerui PM's loan and interest receivables due from the Remaining Shareholder amounting to RMB1,379.1 million as at 30 September 2019,

- II-2 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

together with other assets attributable to Kerui PM, were classified as "assets classified as held for disposal" as at 30 September 2019 as a result of CMIG PM's subsequent disposal of Kerui PM to Minrui Property Management (Shanghai) Co., Ltd. at a fixed consideration in December 2019. Further details of the disposal are set out in Notes 31 and 34 to the Historical Financial Information.

The Management of the Company and the CMIG PM Group performed an assessment of the recoverability of Kerui PM's receivables from the Remaining Shareholder with reference to a settlement plan provided and committed by the Remaining Shareholder, which included cash of RMB588.0 million subsequently received in December 2019 and held in an escrow bank account held and controlled by CMIG PM that is attributable to these receivables, estimated proceeds from future dividends from the CMIG PM Group, and net proceeds from future disposals of certain assets of the Remaining Shareholder in excess of the liabilities to other creditors for which such assets are pledged. It was concluded that no impairment provision was required against Kerui PM's receivables from the Remaining Shareholder as at 31 December 2017 and 2018 and the relevant amount included in "assets classified as held for disposal" as at 30 September 2019.

Despite the settlement plan provided by the Remaining Shareholder and the above cash subsequently received in December 2019 and kept in an escrow bank account held by CMIG PM, the Management of the CMIG PM Group was not able to provide us sufficient and appropriate evidence to support their assessment of the recoverability of Kerui PM's receivables from the Remaining Shareholder, including but not limited to, evidence with respect to i) the financial situation of the Remaining Shareholder to honor its settlement obligation, especially given that the Remaining Shareholder is a private company which is ultimately controlled by a group of companies that are under significant financial stress;

1. whether the remaining cash of RMB588.0 million held in the escrow bank account that is attributable to Kerui PM's receivables from the Remaining Shareholder and the entitlement to future dividend from the CMIG PM Group can be enforced to settle Kerui PM's receivables as and when they fall due; and iii) the availability, realisable value and timing of disposals of the Remaining Shareholder 's assets and the net disposal proceeds available after settling the relevant liabilities to other creditors to which the assets are pledged. There were no alternative audit procedures we could perform to satisfy ourselves with respect to the recoverability of Kerui PM's receivables. Consequently, we were unable to determine whether any adjustment to "loans and interests receivables due from the Remaining Shareholder" on the statements of combined financial position as at 31 December 2017 and 2018 with respect to Kerui PM's receivables due from the Remaining Shareholder amounting to RMB1,392.8 million and RMB1,693.4 million, respectively, and to "assets classified as held for disposal" on the statement of combined financial position as at 30 September 2019 where Kerui PM's receivables due from the Remaining Shareholder amounting to RMB1,379.1 million were included, and the consequential impact to the combined statements of comprehensive income for the respective year/period then ended, was necessary.

- II-3 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

Qualified opinions for the years ended 31 December 2017 and 2018 and the nine months

ended 30 September 2019

In our opinion, except for the possible effects of the matters described in the "Basis

for qualified opinions for the years ended 31 December 2017 and 2018 and the nine months ended

30 September 2019" section above, the Historical Financial Information gives, for the purposes of the accountant's report, a true and fair view of the financial position of CMIG PM as at 31 December 2018 and 30 September 2019, and a true and fair view of the combined financial position of the CMIG PM Group as at 31 December 2017 and 2018 and 30 September 2019, and of its combined financial performance and its combined cash flows for the years ended 31 December 2017 and 2018 and the nine months ended 30 September 2019, in accordance with the basis of presentation and preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information.

Review of stub period comparative financial information

We have reviewed the stub period comparative financial information of the CMIG PM Group which comprises the combined statements of comprehensive income, changes in equity and cash flows for the nine months ended 30 September 2018 and other explanatory information (together, the "Stub Period Comparative Financial Information"). The directors of the Company and CMIG PM are responsible for the preparation and presentation of the Stub Period Comparative Financial Information in accordance with the basis of presentation and preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information. Our responsibility is to express a conclusion on the Stub Period Comparative Financial Information based on our review. We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the HKICPA. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for qualified conclusion for the nine months ended 30 September 2018

Kerui PM's loan and interest receivables due from the Remaining Shareholder as at 30 September 2018 amounted to RMB1,670.3 million.

The Management of the CMIG PM Group performed an assessment of the recoverability of Kerui PM's loan and interest receivables due from the Remaining Shareholder as at 30 September 2018 with reference to the loan settlement plan provided by the Remaining Shareholder as mentioned in the "Basis for qualified opinions for the years ended 31 December 2017 and 2018 and the nine months ended 30 September 2019" section above, and reached the same conclusion that no impairment provision was required against Kerui PM' receivables from the Remaining Shareholder as at 30 September 2018.

- II-4 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

Despite the settlement plan provided by the Remaining Shareholder and certain cash settlement subsequently received in December 2019 and kept in an escrow bank account held by CMIG PM, the Management of the CMIG PM Group was not able to provide us sufficient and appropriate evidence to support their assessment of the recoverability of Kerui PM's receivables from the Remaining Shareholder, including but not limited to, information about i) the financial situation of the Remaining Shareholder to honor its settlement obligation, especially given that the Remaining Shareholder is a private company which is ultimately controlled by a group of companies that are under significant financial stress; ii) whether the remaining cash of RMB588.0 million held in the escrow bank account that is attributable to Kerui PM's receivables from the Remaining Shareholder and the entitlement to future dividend from the CMIG PM Group can be enforced to settle Kerui PM's receivables as and when they fall due; and iii) the availability, realisable value and timing of disposals of the Remaining Shareholder 's assets and the net disposal proceeds available after settling the relevant liabilities to other creditors to which the assets are pledged. There were no alternative procedures we could perform to satisfy ourselves with respect to the recoverability of Kerui PM's receivables as at 30 September 2018. Consequently, we were unable to determine whether any adjustment to "loans and interests receivables due from the controlling shareholder" on the combined statement of financial position as at 30 September 2018 with respect to Kerui PM's receivables from Remaining Shareholder amounting to RMB1,670.3 million, and the consequential impact to the combined statement of comprehensive income for the period then ended, was necessary.

Qualified conclusion for the nine months ended 30 September 2018

Based on our review, except for the possible effects of the matters described in the "Basis for qualified conclusion for the nine months ended 30 September 2018" section above, nothing has come to our attention that causes us to believe that the Stub Period Comparative Financial Information, for the purposes of the accountant's report, is not prepared, in all material respects, in accordance with the basis of presentation and preparation set out in Notes 1.3 and 2.1 to the Historical Financial Information.

Report on matters under the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited

Adjustments

In preparing the Historical Financial Information, no adjustments to the financial statements of the CMIG PM Group for the Track Record Period on which the Historical Financial Information is based ("Underlying Financial Statements") have been made.

PricewaterhouseCoopers

Certified Public Accountants

Hong Kong, 24 February 2020

- II-5 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

• HISTORICAL FINANCIAL INFORMATION OF THE CMIG PM GROUP

Set out below is the Historical Financial Information which forms an integral part of this accountant's report.

The Underlying Financial Statements of the CMIG PM Group for the Track Record Period, on which the Historical Financial Information is based, were audited by PricewaterhouseCoopers in accordance with Hong Kong Standards on Auditing issued by Hong Kong Institute of Certified Public Accountants.

The Historical Financial Information is presented in Renminbi ("RMB") and all values are rounded to the nearest thousand (RMB'000) except when otherwise indicated.

1. Combined statements of comprehensive income

										Nine months ended
		Year ended 31 December			30 September
	Note	2016		2017		2018		2018		2019
		RMB'000	RMB'000	RMB'000			RMB'000	RMB'000
								(Unaudited)
Revenue	6	809,814		3,190,745		4,069,769		2,984,510		3,124,718
Cost of sales	7	(680,561)	(2,693,958)	(3,409,758)	(2,469,994)	(2,623,520)
Gross profit		129,253		496,787		660,011			514,516		501,198
Selling and marketing expenses	7	(1,289)	(16,308)	(15,725)	(12,404)	(8,593)
Administrative expenses	7	(63,799)	(235,188)	(318,350)	(236,266)	(251,129)
Reversal of impairment
losses /(Impairment
losses) on financial assets		416		(12,304)	(15,747)	(20,762)	(12,625)
Other income	9	10,622		21,178		15,396		11,298		22,842
Other gains - net	9	1,612		4,704		4,701			3,621		12,775
Operating profit		76,815		258,869		330,286		260,003		264,468
Finance income		26,640		108,613		168,435		119,030		105,629
Finance costs		(29,442)	(110,179)	(175,215)	(124,084)	(109,228)
Finance costs - net	10	(2,802)	(1,566)	(6,780)	(5,054)	(3,599)
Share of profits of investments
accounted for using the equity
method	17	10,647		14,788		21,708			17,155		25,777
Profit before income tax		84,660		272,091		345,214		272,104		286,646
Income tax expense	11	(21,132)	(60,605)	(85,689)	(66,486)	(67,888)
Profit and total comprehensive		63,528		211,486		259,525			205,618		218,758
income for the year/period
Profit and total comprehensive
income for the year/period
attributable to:
- Owners of CMIG PM		51,485		142,555		157,705		127,125		147,936
- Non-controlling interests		12,043		68,931		101,820			78,493		70,822
		63,528		211,486		259,525		205,618		218,758

- II-6 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Combined statements of financial position

									As at
				As at 31 December			30 September
	Note	2016	2017	2018		2019
		RMB'000		RMB'000	RMB'000	RMB'000
ASSETS
Non-current assets
Property, plant and equipment	13	59,025		172,147		136,438		83,599
Right-of-use assets	14	756		11,146		7,095		3,941
Investment properties	15	81,832		113,373		115,925		56
Intangible assets	16	879,467		1,639,405		1,459,760		1,141,488
Investments accounted for
using the equity method	17	105,687		138,562		257,452		352,765
Financial assets at fair value
through other
comprehensive income	18	128		15,700		15,875		10,850
Deferred income tax assets	27	4,776		11,367		16,615		14,354
Loans and interests receivables
due from the Remaining
Shareholder	21	840,000		2,268,800		1,362,800		-
Prepayments, deposits and
other receivables	20	46,837		77,373		96,536		6,949
Total non-current assets		2,018,508		4,447,873		3,468,496		1,614,002
Current assets
Inventories		808		2,051		2,359		3,260
Trade receivables	19	357,144		774,648		894,193		792,368
Prepayments, deposits and
other receivables	20	209,093		572,014		428,789		346,619
Loans and interests receivables
due from the Remaining
Shareholder	21	216,208		493,547		919,358		464,092
Financial assets at fair value
through profit or loss	22	123,200		190,656		156,104		152,194
Cash and cash equivalents	23	165,859		544,302		619,190		248,092
Restricted cash	23	2,069			2,748		1,970		10,679
		1,074,381		2,579,966		3,021,963		2,017,304
Assets classified as held for
disposal	31	-		-	-	2,395,066
Total current assets		1,074,381		2,579,966		3,021,963		4,412,370
Total assets		3,092,889		7,027,839		6,490,459		6,026,372

- II-7 -

APPENDIX II		ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
												As at
						As at 31 December			30 September
	Note	2016	2017	2018		2019
				RMB'000			RMB'000	RMB'000	RMB'000
EQUITY
Equity attributable to
owners of CMIG PM
Paid-in capital	1			-			-	-	1,400,000
Reserves	24	986,817		1,672,583		1,698,904		382,601
Retained earnings		55,069		170,929		291,664		229,487
		1,041,886		1,843,512		1,990,568		2,012,088
Non-controlling interests		103,884		453,519		401,091		345,819
Total equity		1,145,770		2,297,031		2,391,659		2,357,907
LIABILITIES
Non-current liabilities
Long-term borrowings	26	962,300		2,497,761		1,893,920		207,806
Deferred income tax liabilities	27	74,736		151,750		110,832		75,559
Lease liabilities	14	575		7,406		3,930		2,874
Total non-current liabilities		1,037,611		2,656,917		2,008,682		286,239
Current liabilities
Trade and other payables	25	641,030		1,290,452		1,348,108		840,037
Borrowings	26	94,900		383,061		442,641		267,617
Dividend payable	28	26,772		107,730		23,556		54,664
Contract liabilities	6	106,071		223,764		227,559		102,502
Lease liabilities	14	227		3,908		3,476		1,308
Current income tax liabilities		40,508		64,976		44,778		40,136
		909,508		2,073,891		2,090,118		1,306,264
Liabilities directly
associated with assets
classified for disposal	31			-			-	-	2,075,962
Total current liabilities		909,508		2,073,891		2,090,118		3,382,226
Total liabilities		1,947,119		4,730,808		4,098,800		3,668,465
Total equity and liabilities		3,092,889		7,027,839		6,490,459		6,026,372
Net current assets		164,873		506,075		931,845		1,030,144
Total assets less current
liabilities		2,183,381		4,953,948		4,400,341		2,644,146

- II-8 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Statements of financial position of CMIG PM

		As at	As at
		31 December	30 September
	Note	2018		2019
		RMB'000	RMB'000
ASSETS
Non-current asset
Investments in subsidiaries	12	-	1,250,312
Investments accounted for using the
equity method		-		168,913
Total non-current assets		-	1,419,225
Current assets
Prepayments, deposits and other
receivables	20	-	6,566
Cash and cash equivalents		-	1,497
Assets classified as held for disposal	12&31	-		235,138
Total current assets		-	243,201
Total assets		-	1,662,426
EQUITY
Equity attributable to owners of
CMIG PM
Paid-in capital	1	-	1,400,000
Reserves	24	-	251,671
Accumulated losses		-	(10,456)
Total equity		-	1,641,215
LIABILITIES
Current liabilities
Trade and other payables	25	-	21,211
Total equity and liabilities		-	1,662,426

- II-9 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Combined statements of changes in equity

		Attributable to owners of CMIG PM
											Non-
		Paid-in	Other	Retained			controlling	Total
	Note	capital	reserves	earnings	Total	interests	equity
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
Balance at 1 January
2016		-	358,109		11,154			369,263		-	369,263
Comprehensive
income
Profit for the year		-	-	51,485			51,485		12,043		63,528
Transactions with
owners in their
capacity as owners
Appropriation of
statutory reserves	24	-	7,570		(7,570)		-	-	-
Deemed contribution
from the owner in
relation to
acquisitions of
subsidiaries	24	-	556,354		-	556,354		-	556,354
Capital contribution
from the owner	24	-	55,018		-	55,018		-	55,018
Deemed contribution
from the owner	24	-	4,131		-	4,131		-	4,131
Non-controlling
interests on
acquisition of
subsidiaries	30	-	-	-	-	89,674		89,674
Capital contribution
from
non-controlling
shareholders		-	-	-	-	2,167		2,167
Share-based
compensation		-	5,635		-	5,635		-	5,635
Balance at 31
December 2016		-	986,817		55,069			1,041,886		103,884		1,145,770
Balance at 1 January
2017		-	986,817		55,069			1,041,886		103,884		1,145,770

- II-10 -

APPENDIX II		ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
		Attributable to owners of CMIG PM
											Non-
		Paid-in	Other	Retained			controlling	Total
	Note	capital	reserves	earnings	Total	interests	equity
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
Comprehensive
income
Profit for the year		-	-	142,555			142,555		68,931		211,486
Transactions with
owners in their
capacity as owners
Appropriation of
statutory reserves	24	-	13,328		(13,328)		-	-	-
Deemed contribution
from the owner in
relation to
acquisitions of
subsidiaries	24	-	661,868		-	661,868		-	661,868
Deemed contribution
from the owner	24	-	5,048		-	5,048		-	5,048
Non-controlling
interests on
acquisition of
subsidiaries	30	-	-	-	-	283,768		283,768
Capital contribution
from
non-controlling
interests		-	-	-	-	5,131		5,131
Dividends declared	28	-	-	(13,367)		(13,367)	(8,195)	(21,562)
Share-based
compensation		-	5,522		-	5,522		-	5,522
Balance at 31
December 2017		-	1,672,583		170,929			1,843,512		453,519		2,297,031

- II-11 -

APPENDIX II		ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
		Attributable to owners of CMIG PM
											Non-
		Paid-in	Other	Retained			controlling	Total
	Note	capital	reserves	earnings	Total	interests	equity
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
Balance at 1 January
2018		-	1,672,583		170,929			1,843,512		453,519		2,297,031
Comprehensive
income
Profit for the year		-	-	157,705			157,705		101,820		259,525
Transactions with
owners in their
capacity as owners
Appropriation of
statutory reserves	24	-	7,880		(7,880)		-	-	-
Deemed contribution
from the owner	24	-	12,863		-	12,863		-	12,863
Capital contribution
from
non-controlling
shareholders		-	-	-	-	5,636		5,636
Non-controlling
interests on
acquisition of
subsidiaries	30	-	-	-	-	11,975		11,975
Non-controlling
interests on
reclassification of
subsidiaries to
associate	12(vi)	-	-	-	-	(151,559)	(151,559)
Dividends declared	28	-	-	(29,090)		(29,090)	(20,300)	(49,390)
Share-based
compensation		-	5,578		-	5,578		-	5,578
Balance at 31
December 2018		-	1,698,904		291,664			1,990,568		401,091		2,391,659

- II-12 -

APPENDIX II		ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
		Attributable to owners of CMIG PM
											Non-
		Paid-in	Other	Retained			controlling	Total
	Note	capital	reserves	earnings	Total	interests	equity
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
Balance at 1 January
2019		-	1,698,904		291,664			1,990,568		401,091		2,391,659
Comprehensive
income
Profit for the period		-	-	147,936			147,936		70,822		218,758
Transactions with
owners in their
capacity as owners
Capital contribution
from the owner		1,400,000		251,671		-	1,651,671		-	1,651,671
Deemed distribution
to the owner in
relation to
acquisitions of
subsidiaries	24	-	(1,569,325)	-	(1,569,325)	-	(1,569,325)
Non-controlling
interests on
acquisition of
subsidiaries	30	-	-	-	-	6,066		6,066
Dividends declared	28	-	-	(208,744)		(208,744)	(138,352)	(347,096)
Transaction with
non-controlling
interest	24	-	1,351		(1,369)		(18)	6,192		6,174
Balance at 30
September 2019		1,400,000		382,601		229,487			2,012,088		345,819		2,357,907

- II-13 -

APPENDIX II		ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
		Attributable to owners of CMIG PM
											Non-
		Paid-in	Other	Retained			controlling	Total
	Note	capital	reserves	earnings	Total	interests	equity
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
(Unaudited)
Balance at 1 January
2018		-	1,672,583		170,929			1,843,512		453,519		2,297,031
Comprehensive
income
Profit for the period		-	-	127,125			127,125		78,493		205,618
Transactions with
owners in their
capacity as owners
Deemed contribution
from the owner	24	-	9,558		-	9,558		-	9,558
Capital contribution
from
non-controlling
shareholders		-	-	-	-	5,340		5,340
Non-controlling
interests on
acquisition of
subsidiaries	30	-	-	-	-	11,975		11,975
Non-controlling
interests on
reclassification of
subsidiaries to
associate	12	-	-	-	-	(151,559)	(151,559)
Dividends declared	28	-	-	(13,158)		(13,158)	(10,109)	(23,267)
Share-based
compensation		-	4,184		-	4,184		-	4,184
Balance at 30
September
2018(Unaudited)		-	1,686,325		284,896			1,971,221		387,659		2,358,880

- II-14 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Combined statements of cash flows

									Nine months ended
		Year ended 31 December			30 September
	Note	2016		2017		2018		2018		2019
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
									(Unaudited)
Cash flows from operating
activities
Cash generated from/(used
in) operations	29(a)	200,933		505,797			316,242		(60,690)	203,081
Income tax paid		(16,980)	(79,947)		(131,673)	(107,166)	(88,464)
Net cash generated
from/(used in) operating
activities		183,953		425,850			184,569		(167,856)	114,617
Cash flows from investing
activities
Payments for acquisition of
subsidiaries, net of cash
acquired	30	(413,894)	(435,003)		(14,856)	(14,855)	(7,215)
Payments for property,
plant and equipment and
other long term
properties		(1,585)	(54,855)		(24,022)	(16,578)	(37,557)
Payments for intangible
assets other than
goodwill		(357)	(399)		(3,058)	(1,194)	(150)
Payment for acquisition of
associates		-	-	(490)	(490)	(69,536)
Payments for financial
assets at fair value
through profit or loss		(1,061,200)	(825,516)		(1,571,132)	(1,164,091)	(887,367)
Payments for financial
assets at fair value
through other
comprehensive income		-	(15,572)		(175)	-	-
Payments for financial
instruments with
guaranteed principal and
return		(41,552)	(130,000)		-	-	-
Payments related to
amounts due from
related parties		(1,035,200)	(1,731,046)		(58,636)	(29,945)	(102,628)
Repayments of the amounts
due from related parties		11,535		5,317			560,091		359,364		861,164

- II-15 -

APPENDIX II		ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
									Nine months ended
		Year ended 31 December			30 September
	Note	2016		2017		2018	2018		2019
		RMB'000	RMB'000	RMB'000		RMB'000	RMB'000
									(Unaudited)
Proceeds from sale of
property, plant and
equipment, investment
properties and intangible
assets other than
goodwill	29(b)	256		6,084			20,367	20,015		46,248
Proceeds from sale of
financial assets at fair
value through profit or
loss		1,017,000		768,060			1,550,685	1,110,744		847,277
Proceeds from financial
instruments with
guaranteed principal and
return		-	122,268			50,000	50,000		-
(Increase)/decrease in cash
pool		(100,000)	(170,228)		72,871	117,301		(557,821)
Interest received from the
amounts due from
related parties		26,141		104,972			160,704	105,690		102,211
Interest received from
financial assets at fair
value through profit or
loss		1,183		4,411			6,002	3,138		3,459
Interest received from
financial assets at
amortised cost		1,476		711			1,339	1,339		2,469
Others		-	2,125			-		-	3,192
Net cash (used in)/
generated from
investing activities		(1,596,197)	(2,348,671)		749,690	540,438		203,746

- II-16 -

APPENDIX II		ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
									Nine months ended
		Year ended 31 December			30 September
	Note	2016		2017		2018		2018		2019
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
									(Unaudited)
Cash flows from financing
activities
Capital contribution from
the owner	24	55,018		-	-	-	1,651,671
Deemed contribution from
the owner in relation to
acquisitions of
subsidiaries	24	556,354		661,868			-	-	-
Deemed distribution to the
owner in relation to
acquisitions of
subsidiaries	24	-	-	-	-	(1,569,325)
Capital contribution from
non-controlling
shareholders		2,167		5,131			5,636		5,340		-
Proceeds from borrowings		1,150,000		2,000,000			28,000		18,000		-
Repayments of borrowings		(141,200)	(272,043)		(572,261)	(368,924)	(401,579)
Principal elements of lease
payments		(1,116)	(1,618)		(3,908)	(2,909)	(3,089)
Payments for leases
liabilities - interest		(66)	(325)		(577)	(455)	(275)
Dividends paid to the then
shareholders of
subsidiaries		-	(5,327)		(20,640)	(20,640)	(46,988)
Dividends paid to
non-controlling interests
in subsidiaries		(71,744)	(31,805)		(112,924)	(108,912)	(82,857)
Interest paid for
borrowings		(29,376)	(54,617)		(182,697)	(96,533)	(134,964)
Net cash generated from/
(used in) financing
activities		1,520,037		2,301,264			(859,371)	(575,033)	(587,406)
Net increase/(decrease) in
cash and cash
equivalents		107,793		378,443			74,888		(202,451)	(269,043)
Cash and cash equivalents
at beginning of the
year/period		58,066		165,859			544,302		544,302		619,190
Cash and cash equivalents
at end of year/period		165,859		544,302			619,190		341,851		350,147

- II-17 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

II NOTES TO THE HISTORICAL FINANCIAL INFORMATION

• GENERAL INFORMATION, REORGANIZATION AND BASIS OF PRESENTATION
• 1. General information
     CMIG Futurelife Property Management Limited ("CMIG PM") was established in the People's Republic of China (the "PRC") on 30 November 2018 with a registered capital of RMB1,000,000,000, and the registered capital was increased to RMB1,400,000,000 on 3 January 2019. The address of CMIG PM's registered office is Room 1005, No. 8088 Jinda Road, Jinhui Town, Fengxian District, Shanghai, PRC.
     CMIG PM is owned by CMIG Futurelife Holdings Group Company Limited (the "Remaining Shareholder"), an investment holding company established in PRC, as to 40%, and Guangdong Fengxin Yinglong Equity Investment Partnership (Limited Partnership) (the "Vendor"), a limited partnership ultimately and beneficially owned by four individuals, as to 60% as at the date of this report. The directors of CMIG PM regard the Remaining Shareholder as CMIG PM's immediate holding company, and China Minsheng Investment Corp., Ltd. ("CMIG"), a company incorporated in PRC, as the ultimate holding company. CMIG PM and its subsidiaries (together the "CMIG PM Group") are principally engaged in the provision of property management services and related value-added services in the PRC (the "CMIG PM Business").
     On 25 September 2019, pursuant to an agreement entered into by the Vendor and a wholly owned subsidiary of A-Living Services Co., Ltd., a company listed on the Stocks Exchange of Hong Kong Limited (the "Purchaser" or the "Company"), the Purchaser conditionally agreed to acquire, and the Vendor conditionally agreed to dispose, (i) the 60% equity interest in CMIG PM after a restructuring comprising the transfer in and transfer out of certain entities (Note 1.2 below), at a fixed consideration of RMB1.56 billion, and (ii) the 60% equity interest in a new entity to be set up to hold the equity interest in Shanghai Kerui Property Management Development Co., Ltd. ("Kerui PM"), a subsidiary of CMIG PM during the Track Record Period and subsequently disposed of on 11 December 2019, at a variable consideration of up to RMB500 million. The acquisitions are regarded as very substantial acquisition ("VSA") of the Purchaser according to The Rules Governing the Listing of Companies on the Hong Kong Stocks Exchange Limited (the "Proposed VSA Transaction").
     These financial statements are presented in Renminbi, unless otherwise stated.
  2. Reorganizations
     CMIG PM is an investment holding company. Prior to the incorporation of CMIG PM and the completion of the reorganizations as described below, CMIG PM Business was carried out by the companies controlled by the Remaining Shareholder (collectively, the "Operating Companies") in the PRC. These Operating Companies were historically acquired by the Remaining Shareholder from other parties prior to and during the Track Record Period. Details of the historical acquisitions of some of the Operating Companies during the Track Period Record are set out in Note 30.
     CMIG PM was set up in the PRC on 30 November 2018 with a registered capital of RMB1,000,000,000, which was increased to RMB1,400,000,000 and fully paid up before end of September 2019. Subsequently, a reorganization was undertaken pursuant to which the Operating Companies were transferred from the Remaining Shareholder to CMIG PM as follows:
  3. 1. On 29 March 2019, CMIG PM acquired 100% equity interests in Shanghai Boying Property Management Company Limited ("Shanghai Boying") from a subsidiary of the Remaining Shareholder, at a cash consideration of RMB323,126,785. Shanghai Boying is an investment holding company and it holds 100% equity interests in Shanghai Minghua Property Management Company Limited ("Shanghai Minghua") through acquisition from a third party in October 2015;

- II-18 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. On 1 April 2019, CMIG PM acquired 70% equity interests in Changzhou Zhongfang Property Company Limited ("Changzhou Zhongfang") from the Remaining Shareholder at a cash consideration of RMB69,216,000;
2. On 10 April 2019, CMIG PM acquired 51% equity interests in Kerui PM from a subsidiary of the Remaining Shareholder, at cash considerations of RMB235,138,000;
3. On 11 April 2019, CMIG PM acquired 35% equity interests in Shandong Hongtai Property Development Company Limited ("Shandong Honest") from a subsidiary of Remaining Shareholder, at cash considerations of RMB94,480,000;
4. On 16 April 2019, CMIG PM acquired 26.01% equity interests in Chongqing Weishi Property Management Company Limited ("Chongqing Weishi") from Chongqing Haitai Management Service Company Limited ("Chongqing Haitai"), a subsidiary of the Remaining Shareholder, at a cash consideration of RMB10,605,840. In addition, the CMIG PM Group entered into an acting in concert agreement with the non-controlling shareholder of Chongqing Weishi, who held 49% equity interest of Chongqing Weishi after the acquisition. As a result, the CMIG PM Group controlled 75.01% voting rights of Chongqing Weishi.
5. On 19 April 2019, CMIG PM acquired 100% equity interests in Chongqing Haoji Property Management Company Limited ("Chongqing Haoji") from a subsidiary of the Remaining Shareholder, at a cash consideration of RMB90,000,000;
6. On 23 April 2019, CMIG PM acquired 67% equity interests in Shanghai Ruixiang Shangfang Property Management Company Limited ("Shanghai Richtech") from a subsidiary of the Remaining Shareholder, at cash considerations of RMB252,000,000;

In connection with the Proposed VSA Transaction, further reorganisation was carried out by CMIG PM, as follows:

1. On 20 November 2019, CMIG PM acquired 100% equity interests in Chongqing Xindong Investment Management Company Limited ("Chongqing Xindong") from a subsidiary of the Remaining Shareholder, at a cash consideration of RMB158,262,000. Chongqing Xindong is an investment holding company and it holds 51% equity interests in Chongqing Haitai through acquisition from a third party in October 2015;
2. On 4 December 2019, CMIG PM acquired 63% equity interests in Shenzhen Longcheng Property Management Company Limited ("Shenzhen Longcheng") from a subsidiary of the Remaining Shareholder, at a cash consideration of RMB325,634,000;
3. On 5 December 2019, CMIG PM acquired 51% equity interests in Xi'an Jintian Property Management Service Company Limited ("Xi'an Jintian") from a subsidiary of the Remaining Shareholder, at a cash consideration of RMB49,268,000;
4. On 11 December 2019, CMIG PM disposed its 51% equity interests in Kerui PM to Minrui Property Management (Shanghai) Co., Ltd., ("New CMIG PM"), an entity newly set up by the Remaining Shareholder and the Vendor, being the existing shareholders of CMIG PM, at a cash consideration of RMB235,138,000. Further details of the impact of disposal of Kerui PM to the combined financial statements of the CMIG PM Group for the Track Record Period are set out in Note 31.

Upon the completion of the above reorganizations, CMIG PM became the holding company of the companies now comprising the CMIG PM Group.

The principle subsidiaries in which CMIG PM held direct or indirect interest upon completion of the Reorganization and as at the date of this report are set out in Note 12.

- II-19 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1.3 Basis of presentation

Immediately prior to the Reorganizations as mentioned in Note 1.2 above, the CMIG PM Business was carried out by the Operating Companies which were controlled by the Remaining Shareholder and ultimately controlled by CMIG, from the dates they were acquired by the Remaining Shareholder from third parties. Pursuant to the Reorganization, the CMIG PM Business was transferred to and held by CMIG PM, which is controlled by the Remaining Shareholder and ultimately controlled by CMIG.

CMIG PM has not been involved in any other business prior to the Reorganizations and its operations do not meet the definition of a business. The Reorganization is merely a reorganization of CMIG PM Business and does not result in any changes in business substance, nor in any management or ultimate controlling shareholders of the CMIG PM Business. Accordingly, the historical financial information of the companies now comprising the CMIG PM Group is presented using the carrying value of the CMIG PM Business for all years/periods presented as if the current group structure had been in existence throughout the years/periods presented, or from the date the respective entity had been acquired by the Remaining Shareholder from third parties, whichever is a shorter period.

For companies historically acquired by the Remaining Shareholder from third parties, or disposed off to a third party or a related party during the Track Record Period, they were included in or excluded from the combined financial statements of the CMIG PM Group from the respective dates of acquisitions and disposals, where appropriate, in the Historical Financial Information.

Inter-company transactions, balances and the unrealised gains/losses on transactions between the group companies are eliminated on combination.

• SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  The principal accounting policies applied in the preparation of the Historical Financial Information are set out below. These policies have been consistently applied throughout the Track Record Period, unless otherwise stated.
  2.1 Basis of preparation
  The Historical Financial Information of the CMIG PM Group has been prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRSs") issued by the HKICPA. The Historical Financial Information has been prepared under the historical cost convention, as modified by the revaluation of financial assets at fair value through profit or loss (or through other comprehensive income), which are carried at fair value.
  The preparation of the Historical Financial Information in conformity with HKFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the CMIG PM Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the Historical Financial Information are disclosed in Note 4.
  Application of HKFRS 9, HKFRS 15 and HKFRS 16
  HKFRS 9 "Financial Instruments" addresses the classification, measurement and recognition of financial assets and financial liabilities, and introduces new rules of hedge accounting and a new impairment model for financial assets. The standard is effective for annual periods beginning on or after 1 January 2018 and earlier application is permitted.
  HKFRS 15 "Revenue from contracts with customers" replaces the previous revenue standards HKAS 18 'Revenue' and HKAS 11 'Construction Contracts' and related interpretations. The standard is effective for annual periods beginning on or after 1 January 2018 and earlier application is permitted.

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HKFRS 16 "Leases" addresses the definition of a lease, recognition and measurement of leases. The standard replaces HKAS 17 "Leases" and related interpretations. Under HKAS 17, operating lease commitments are disclosed separately in a note to the combined financial statement and are recognised outside of the combined statement of financial position. Under HKFRS 16, all leases (except for those with lease term of less than 12 months or of low value) must be recognised in the form of an asset (being the right-of-use assets) and a financial liability (being the lease liabilities), and accordingly, each lease will be mapped in the CMIG PM Group's combined statements of financial position. The standard is effective for annual periods beginning on or after 1 January 2019 and earlier application is permitted.

The CMIG PM Group has elected to apply HKFRS 9, HKFRS 15 and HKFRS 16 consistently throughout the Track Record Period.

The following standards and interpretations had been issued but were not mandatory for the financial year beginning before 1 January 2020 and have not been early adopted.

	New standards,
	amendments and
	interpretations	Effective date
HKFRS 17	Insurance contracts	Annual periods beginning on
		or after 1 January 2021
HKFRS 3 (Amendments)	Definition of a Business	Annual periods beginning on
		or after 1 January 2020
HKAS 1 and HKAS 8	Definition of Material	Annual periods beginning on
(Amendments)		or after 1 January 2020
HKFRS 10 and HKAS 28	Sale or Contribution of
(Amendments)	Assets between an Investor
	and its Associate or Joint
	Venture

The CMIG PM Group has already commenced an assessment of the impact of these new or revised standards, interpretations, and amendments, certain of which are relevant to the CMIG PM Group's operations. According to the preliminary assessment made by the Directors, no significant impact on the financial performance and positions of the CMIG PM Group is expected when they become effective.

2.2 Subsidiaries

2.2.1 Consolidation

Subsidiaries are all entities (including structured entities) over which the CMIG PM Group has control. The CMIG PM Group controls an entity when the CMIG PM Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the CMIG PM Group. They are deconsolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between the CMIG PM Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the CMIG PM Group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the combined statement of comprehensive income, statement of changes in equity and statement of financial position respectively.

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2.2.2 Business combinations

Except for the Reorganizations where CMIG PM acquired the companies in CMIG PM Business from the Remaining Shareholder the acquisitions are regarded as business combinations under common control, the acquisition method of accounting is used to account for all other business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

• fair values of the assets transferred,
• liabilities incurred to the former owners of the acquired business,
• equity interests issued by the CMIG PM Group,
• fair value of any asset or liability resulting from a contingent consideration arrangement, and
• fair value of any pre-existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The CMIG PM Group recognises any non-controlling interest in the acquired entity on an acquisition-by- acquisition basis either at fair value or at the non-controlling interest's proportionate share of the acquired entity's net identifiable assets.

Acquisition-related costs are expensed as incurred. The excess of the

• consideration transferred;
• amount of any non-controlling interest in the acquired entity; and
• acquisition-datefair value of any previous equity interest in the acquired entity;

over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently re-measured to fair value with changes in fair value recognised in profit or loss.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer 's previously held equity interest in the acquiree is re-measured to fair value at the acquisition date. Any gains or losses arising from such re-measurement are recognised in profit or loss.

2.2.3 Separate financial statements

Investments in subsidiaries are accounted for at cost less impairment. Cost includes direct attributable costs of investment. The results of subsidiaries are accounted for by CMIG PM on the basis of dividend received and receivable.

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Impairment testing of the investments in subsidiaries is required upon receiving a dividend from these investments if the dividend exceeds the total comprehensive income of the subsidiary in the period the dividend is declared or if the carrying amount of the investment in the separate financial statements exceeds the carrying amount in the combined financial statements of the investee's net assets including goodwill.

1. Associates
   Associates are all entities over which the CMIG PM Group has significant influence but not control or joint control. This is generally the case where the CMIG PM Group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting (see Note 2.4 below), after initially being recognised at cost.
2. Equity method
   Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the CMIG PM Group's share of the post-acquisition profits or losses of the investee in profit or loss, and the CMIG PM Group's share of movements in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates are recognised as a reduction in the carrying amount of the investment.
   When the CMIG PM Group's share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-term receivables, the CMIG PM Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity.
   Unrealised gains on transactions between the CMIG PM Group and its associates are eliminated to the extent of the CMIG PM Group's interest in these entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency with the policies adopted by the CMIG PM Group.
   The carrying amount of equity-accounted investments is tested for impairment in accordance with the policy described in Note 2.11.
3. Changes in ownership interests
   The CMIG PM Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the CMIG PM Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to owners of the Company.
   When the CMIG PM Group ceases to consolidate or equity account for an investment because of a loss of control, joint control or significant influence, any retained interest in the entity is re-measured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the CMIG PM Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
   If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.
4. Segment reporting
   Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker ("CODM"). The CODM, who is responsible for allocating

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resources and assessing performance of the operating segments, has been identified as the directors that makes strategic decisions.

1. Foreign currency translation
2. 1. Functional and presentation currency
      Items included in the financial statements of each of the CMIG PM Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The combined financial statements are presented in RMB, which is CMIG PM's functional and the CMIG PM Group's presentation currency.
   2. Transactions and balances
      Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised within "Other gains - net " in the combined statements of comprehensive income.
3. Property, plant and equipment
   Property, plant and equipment are stated at historical cost or acquisition less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
   Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the CMIG PM Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
   Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives as follows:

	Estimated
	useful lives
Buildings	10-30 years
Machineries	2-7 years
Transportation equipment	4-10 years
Office and other equipment	2-5 years

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount and are recognised within "Other gains - net" in the combined statements of comprehensive income.

2.9 Investment properties

Properties that are held for long-term rental yields or for capital appreciation or both, and that are not occupied by the CMIG PM Group, are classified as investment properties.

The CMIG PM Group's investment properties comprise buildings located in the PRC, which are measured initially at their costs, including the related transaction costs.

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After initial recognition, investment property is measured at cost less accumulated depreciation and any provision for impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the properties. The building portion of investment properties is depreciated over their estimated useful lives of 20 to 30 years.

Subsequent expenditure is capitalized to the asset's carrying amount or recognised as a separate asset only when it is probable that future economic benefits associated with the item will flow to the CMIG PM Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance costs are expensed in the combined statements of comprehensive income during the financial period in which they are incurred.

An investment property shall be derecognized on disposal or when investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. Gains or losses arising from the retirement or disposal of investment property shall be determined as the difference between the net disposal proceeds and the carrying amount of the asset and shall be recognised in the combined statements of comprehensive income in the period of the retirement or disposal.

1. Intangible assets
2. 1. Goodwill
      Goodwill arising on the acquisition of subsidiaries represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identified net assets acquired.
      For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units ("CGUs"), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.
      Goodwill is not amortised but its impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of the CGU containing goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs of disposal. Any impairment is recognised immediately as an expense and is not subsequently reversed.
   2. Customer relationships
      Customer relationships acquired in a business combination are recognised at fair value at the acquisition date. The customer relationships have finite useful lives and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method over the expected life of 4 to 10 years for the customer relationships.
   3. Computer software
      Acquired software licences are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives of 5 to 10 years.
3. Impairment of non-financial assets
   Goodwill or intangible assets not ready to use are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be

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recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

2.12 Financial assets

2.12.1 Classification

The CMIG PM Group classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other comprehensive income ("OCI") or through profit or loss), and
• those to be measured at amortised cost.
  The classification depends on the entity's business model for managing the financial assets and the contractual terms of the cash flows.
  For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the CMIG PM Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income ("FVOCI").

The CMIG PM Group reclassifies debt investments when and only when its business model for managing those assets changes.

2.12.2 Recognition, derecognition and measurement

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the CMIG PM Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the CMIG PM Group has transferred substantially all the risks and rewards of ownership.

At initial recognition, the CMIG PM Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss ("FVPL"), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Debt instruments

Subsequent measurement of debt instruments depends on the CMIG PM Group's business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the CMIG PM Group classifies its debt instruments:

• Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in the combined statements of comprehensive income when the asset is derecognised or impaired. Interest income from these financial assets is included

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in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains - net, together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the combined income statement.

• FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI.

Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to the combined statements of comprehensive income and recognised in "other (losses)/gains - net". Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains - net and impairment expenses are presented as separate line item in combined income statement.

FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL and is not part of a hedging relationship is recognised in profit or loss and presented net within other gains - net in the period in which it arises.

Equity instruments

The CMIG PM Group subsequently measures all equity investments at fair value. Where the CMIG PM Group's management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when the CMIG PM Group's right to receive payments is established.

Changes in the fair value of financial assets at FVPL are recognised in "other gains - net" as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at financial assets at FVOCI are not reported separately from other changes in fair value.

1. Impairment of financial assets
   The CMIG PM Group assesses on a forward looking basis the expected credit losses associated with its debt instrument carried at amortised cost and financial assets at FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. Note 3.1.2 details how the CMIG PM Group determines whether there has been a significant increase in credit risk.
   For trade receivables, the CMIG PM Group applies the simplified approach permitted by HKFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
2. Non-currentassets held for disposal
   Non-current assets (or disposal groups) are classified as held for disposal if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and investment property that are carried at fair value and contractual rights under insurance contracts, which are specifically exempt from this requirement.
   An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in

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fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of derecognition.

Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for disposal. Interest and other expenses attributable to the liabilities of a disposal group classified as held for disposal continue to be recognised.

Non-current assets classified as held for disposal and the assets of a disposal group classified as held for disposal are presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for disposal are presented separately from other liabilities in the balance sheet.

1. Offsetting financial instruments
   Financial assets and liabilities are offset and the net amount is reported in the combined statements of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the assets and settle the liabilities simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the CMIG PM Group or the counterparty.
2. Inventories
   Inventories are stated at the lower of cost and net realizable value. Cost is determined using the First-in-First-out method. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
3. Trade receivables
   Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due for settlement within 12 months and therefore are classified as current. If not, they are presented as non-current assets.
   Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing components, when they are recognised at fair value. The CMIG PM Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.
4. Cash and cash equivalents, restricted cash
   In the combined statement of cash flows, cash and cash equivalents include cash on hand and deposits held at call with banks. Bank deposits which are restricted to use are included in "restricted cash" of the combined financial position.
5. Share capital
   Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
6. Trade and other payables
   Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
7. Borrowings
   Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of

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transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

2.22 Current and deferred income tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the combined statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

The income tax expense or credit for the period is the tax payable on the current period's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Current income tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company's subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the combined financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where CMIG PM is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Offsetting

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

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2.23 Employee benefits

1. Pension obligations
   The CMIG PM Group only operates defined contribution pension plans. In accordance with the rules and regulations in the PRC, the PRC based employees of the CMIG PM Group participate in various defined contribution retirement benefit plans organized by the relevant municipal and provincial governments in the PRC under which the CMIG PM Group and the PRC based employees are required to make monthly contributions to these plans calculated as a percentage of the employees' salaries. The municipal and provincial governments undertake to assume the retirement benefit obligations of all existing and future retired PRC based employees' payable under the plans described above. Other than the monthly contributions, the CMIG PM Group has no further obligation for the payment of retirement and other post-retirement benefits of its employees. The assets of these plans are held separately from those of the CMIG PM Group in independently administrated funds managed by the governments.
   The CMIG PM Group's contributions to the defined contribution retirement scheme are expensed as incurred.
2. Housing funds, medical insurances and other social insurances
   Employees of the CMIG PM Group in the PRC are entitled to participate in various government-supervised housing funds, medical insurances and other social insurance plan. The CMIG PM Group contributes on a monthly basis to these funds based on certain percentages of the salaries of the employees, subject to certain ceiling. The CMIG PM Group's liability in respect of these funds is limited to the contributions payable in each year. Contributions to the housing funds, medical insurances and other social insurances are expensed as incurred.
3. Short-termobligations
   Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
4. Employee leave entitlements
   Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date. Employee entitlements to sick leave and maternity leave are not recognised until the time of leave.
5. Share-basedcompensation benefits
   One subsidiary of the CMIG PM Group operates an equity-settled,share-based compensation plan, under which the entity receives services from employees as consideration for equity instruments of the subsidiary. The fair value of the employee services received in exchange for the grant of equity instruments (options) is recognised as an expense on the combined financial statements. The total amount to be expensed is determined by reference to the fair value of the equity instruments (options) granted:
6. • including any market performance conditions;
   • excluding the impact of any service and non-market performance vesting conditions and

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• including the impact of any non-vesting conditions (for example, the requirement for employees to serve).

Non-market performance and service conditions are included in assumptions about the number of equity instruments that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.

At the end of each reporting period, the subsidiary revises its estimates of the number of options that are expected to vest based on the non-marketing performance and service conditions. It recognises the impact of the revision to original estimates, if any, in the combined income statements, with a corresponding adjustment to equity.

In addition, in some circumstances employees may provide services in advance of the grant date and therefore the grant date fair value is estimated for the purposes of recognising the expense during the period between service commencement date and grant date.

Where there is any modification of terms and conditions which increases the fair value of the equity instruments granted, the subsidiary includes the incremental fair value granted in the measurement of the amount recognised for the services received over the remainder of the vesting period. The incremental fair value is the difference between the fair value of the modified equity instrument and that of the original equity instrument, both estimated as at the date of the modification. An expense based on the incremental fair value is recognised over the period from the modification date to the date when the modified equity instruments vest in addition to any amount in respect of the original instrument, which should continue to be recognised over the remainder of the original vesting period.

1. Provisions
   Provisions for legal claims are recognised when the CMIG PM Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.
   Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
   Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.
2. Revenue recognition
   The CMIG PM Group is primarily engaged in the provision of property management services, property developer-related services, community-related services and professional services. Revenue from providing services is recognised in the accounting period in which the services are rendered as the customer simultaneously receives and consumes the benefits provided by the CMIG PM Group's performance when the CMIG PM Group performs.
   For property management services, the CMIG PM Group bills a fixed amount for service provided on a monthly basis and recognises as revenue in the amount to which the CMIG PM Group has a right to invoice and corresponds directly with the value of performance completed.
   For property management projects where the services income is on a lump sum basis, the CMIG PM Group acts as principal and is primary responsible for providing the property management services to the property owners/units, the CMIG PM Group recognises the service fee received or

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ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

receivable from property owners as its revenue and all related property management costs as its cost of services. For property management projects where the services income is on commission basis, the CMIG PM Group recognises the commission, which is calculated at certain percentage of the total property management fee received or receivable from the property owners/units, as its revenue for arranging and monitoring the services provided by other suppliers to the property owners/units.

For property developer related services, revenue is recognised when the related services are rendered. Payment of the transaction is due immediately when the services are rendered to the customer.

Community related services include mainly i ) commission from public resources management services, which is recognised on a net basis over the time when such services are rendered; ii) revenue from other community convenience services, which are charged for each of the services provided and recognised when the relevant services are rendered. Community related services are normally billable immediately upon delivery of the services.

Professional services mainly include engineering and maintenance services of elevator and intelligent security equipment. Revenue from professional services are recognised when the contracts have been approved and the services are rendered. Professional services are normally billable immediately upon the delivery of the services.

If contracts involve the sale of multiple services, the transaction price will be allocated to each performance obligation based on their relative stand-alone selling prices. If the standard-alone selling prices are not directly observable, they are estimated based on expected cost plus a margin or adjusted market assessment approach, depending on the availability of observable information.

When either party to a contract has performed, the CMIG PM Group presents the contract in the balance sheet as a contract asset or a contract liability, depending on the relationship between the CMIG PM Group's performance and the customer 's payment.

A contract asset is the CMIG PM Group's right to consideration in exchange for services that the CMIG PM Group has transferred to a customer.

If a customer pays consideration or the CMIG PM Group has a right to an amount of consideration that is unconditional, before the CMIG PM Group transfers services to the customer, the CMIG PM Group presents the contract as a contract liability when the payment is received or a receivable is recorded (whichever is earlier). A contract liability is the CMIG PM Group's obligation to transfer services to a customer for which the CMIG PM Group has received consideration (or an amount of consideration is due) from the customer.

A receivable is recorded when the CMIG PM Group has an unconditional right to consideration. A right to consideration is unconditional if only the passage of time is required before payment of that consideration is due.

1. Interest income
   Interest income is recognised on a time-proportion basis using the effective interest method.
2. Dividend distribution
   Dividend distribution to CMIG PM's shareholders is recognised as a liability in CMIG PM Group's and CMIG PM's financial statements in the period in which the dividends are approved by CMIG PM's shareholders or directors, where appropriate.
3. Leases as leasee
   The CMIG PM Group leases various properties. Rental contracts are typically made for fixed periods of 2 to 5 years. Lease terms are negotiated on an individual basis and contain a wide range

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ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.

Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the CMIG PM Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to combined statements of comprehensive loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

• fixed payments (including in-substance fixed payments), less any lease incentives receivable
• variable lease payment that are based on an index or a rate
• amounts expected to be payable by the lessee under residual value guarantees
• the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The lease payments are discounted using the interest rate implied in the lease, if that rate can be determined, or the respective incremental borrowing rate.

Right-of-use assets are measured at cost comprising the following:

• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement date less any lease incentives received
• any initial direct costs, and
• restoration costs.

Payments associated with short-term leases are recognised on a straight-line basis as an expense in combined statements of comprehensive loss. Short-term leases are leases with a lease term of 12 months or less.

2.29 Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the CMIG PM Group will comply with all attached conditions.

Government grants related to assets refer to government grants which are obtained by the CMIG PM Group for the purposes of purchase, construction or acquisition of the long-term assets. Government grants related to income refer to the government grants other than those related to assets.

Government grants related to assets are either deducted against the carrying amount of the assets, or recorded as deferred income and recognised in profit or loss on a systemic basis over the useful lives of the assets. Government grants related to income that compensate the future costs, expenses or losses are recorded as deferred income and recognised in profit or loss, or deducted against related costs, expenses or losses in reporting the related expenses; government grants

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APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

related to income that compensate the incurred costs, expenses or losses are recognised in profit or loss, or deducted against related costs, expenses or losses directly in current period. The CMIG PM Group applies the presentation method consistently to the similar government grants in the financial statements.

• FINANCIAL RISK MANAGEMENT
  3.1 Financial risk factors
  The CMIG PM Group's activities expose it to a variety of financial risks: interest rate risk, credit risk and liquidity risk. As all of the CMIG PM Group's activities are in the PRC, the CMIG PM Group's exposure to foreign currency risk is minimal and therefore no analysis of foreign currency risk is presented. The CMIG PM Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the CMIG PM Group's financial performance.
  3.1.1 Interest rate risk
  The CMIG PM Group's interest rate risk arises from borrowings and receivables due from related parties. Borrowings and receivables due from related parties at variable interest rates expose the CMIG PM Group to cash flow interest rate risk. Borrowings and receivables due from related parties at fixed interest rates expose the CMIG PM Group to fair value interest rate risk. The CMIG PM Group closely monitors trend of interest rate and its impact on the CMIG PM Group's interest rate risk exposure. The CMIG PM Group currently has not used any interest rate swap arrangements but will consider hedging interest rate risk should the need arise.
  As at 31 December 2016, 2017 and 2018 and 30 September 2019, if interest rates on borrowings had been 50 basis points higher or lower with all other variables held constant, the CMIG PM Group's profit before income tax for the years/period then ended would decrease or increase as set out below, mainly as a result of higher or lower interest expenses on floating rate borrowings.

				Nine months
				ended
	Year ended 31 December	30 September
	2016	2017	2018	2019
	RMB'000	RMB'000	RMB'000	RMB'000
Profit before income
tax - higher/(lower)	(651)/651	(664)/664	(113)/113	(77)/77

3.1.2 Credit risk

The CMIG PM Group is exposed to credit risk in relation to its trade receivables, deposits and other receivables, and cash and cash equivalents. The carrying amounts of trade receivables, deposits and other receivables, and cash and cash equivalents represent the CMIG PM Group's maximum exposure to credit risk in relation to financial assets.

1. Cash in banks
   The CMIG PM Group expects that there is no significant credit risk associated with cash deposits at banks since they are substantially deposited in state-owned banks and other medium or large size listed banks. Management does not expect that there will be any significant losses from non-performance by these counterparties.
2. Trade receivables
   The CMIG PM Group applies the simplified approach to providing for expected credit losses prescribed by HKFRS9, which permits the use of the lifetime expected

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APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

loss provision for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. The expected credit loss also incorporates forward looking information.

1. Other receivables due from related parties
   The CMIG PM Group expects that the credit risk associated with other receivables due from related parties is low, since the majority of the related parties have a strong capacity to meet its contractual cash flow obligations in the near term, except for the loans and interests receivables due from the Remaining Shareholder. The impairment provision recognised in respect of other receivables due from related parties other then the Remaining Shareholder during the period was limited to 12 months expected losses, which was 0% allowance rate.
   For the assessment of the loans and interests receivables due from the Remaining Shareholder is set out in Note 21.
2. Deposits and other receivables other than those from related parties
   The CMIG PM Group pays deposits to property owners and has a large number of counter parties for its other receivables other than those from related parties. There was no concentration of credit risk. The CMIG PM Group has monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the CMIG PM Group reviews the recoverability of these receivables at the end of each reporting period to ensure that adequate impairment losses are made for irrecoverable amounts. The CMIG PM Group considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the CMIG PM Group compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition.
   Forward-looking information incorporated in the expected credit loss model
   The CMIG PM Group has performed historical analysis and identified the key economic variables impacting credit risk and expected credit loss. It considers available reasonable and supportive forwarding-looking information. Especially the following indicators are incorporated:
3. • internal credit rating
   • external credit rating
   • actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the borrower 's ability to meet its obligations
   • actual or expected significant changes in the operating results of individual property owner or the borrower

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ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

• significant increases in credit risk on other financial instruments of the individual property owner or the same borrower
• significant changes in the expected performance and behaviour of the borrower, including changes in the payment status of borrowers in the CMIG PM Group and changes in the operating results of the borrower.

CMIG PM accounts for its credit risk by appropriately providing for expected credit losses on a timely basis. In calculating the expected credit loss rates, CMIG PM considers historical loss rates for each category of receivables and adjusts for forward looking macroeconomic data. Since the actual loss rates for trade receivables and other receivables and adjustments for forward looking macroeconomic data did not have significant change during the Track Record Period, the directors of CMIG PM consider that the change in the expected loss rate for the provision matrix is insignificant throughout the Track Record Period.

As at 31 December 2016, 2017 and 2018 and 30 September 2019, the loss allowance provision for trade receivables was determined as follow.

														As at
				As at 31 December					30 September
			2016		2017		2018		2019
				RMB'000			RMB'000			RMB'000			RMB'000
		Gross		Loss	Gross		Loss	Gross		Loss	Gross		Loss
	Expected	carrying		allowance	carrying		allowance	carrying		allowance	carrying		allowance
	loss rate	amount		provision	amount		provision	amount		provision	amount		provision
Trade receivables
Related parties		13,288		-	9,003		-	14,780		-	5,730		-
Non-residential		211,044		-	505,871	(2,191)	567,281	(3,337)	503,353		-
Residential
- Within 1 year	2%	121,325	(2,304)	190,812	(3,826)	202,612	(4,072)	176,984	(3,539)
- 1 to 2 years	10%	12,530	(1,253)	64,129	(6,413)	77,348	(7,735)	68,958	(6,896)
- 2 to 3 years	20%	610	(122)	9,754	(1,951)	40,496	(8,099)	23,247	(4,649)
- Over 3 years	50%	2,051	(1,025)	10,049	(5,024)	16,901	(8,451)	33,859	(15,769)
		360,848	(4,704)	789,618	(19,405)	919,418	(31,694)	812,131	(30,853)

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APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

As at 31 December 2016, 2017 and 2018 and 30 September 2018 and 2019, the loss allowance provision for trade and other receivables (excluding prepayments) reconciles to the opening loss allowance for that provision as follows:

			Prepayments,
				deposits
				and other
				receivables
	Trade		(excluding
	receivables	prepayments)	Total
	RMB'000		RMB'000	RMB'000
At 1 January 2016	-		-	-
Addition from acquisition of
subsidiaries	5,128		8,753		13,881
Provision for loss allowance
recognised in profit or loss	(424)	8		(416)
At 31 December 2016	4,704		8,761		13,465
Addition from acquisition of
subsidiaries	5,019		2,071		7,090
Provision for loss allowance
recognised in profit or loss	9,682		2,622		12,304
At 31 December 2017	19,405		13,454		32,859
Provision for loss allowance
recognised in profit or loss	12,289		3,458		15,747
At 31 December 2018	31,694		16,912		48,606
Provision for loss allowance
recognised in profit or loss	10,297		2,328		12,625
Reclassify to assets classified
as held for disposal	(11,138)	(8,968)	(20,106)
At 30 September 2019	30,853		10,272		41,125
At 1 January 2018	19,405		13,454		32,859
Provision for loss allowance
recognised in profit or loss	19,588		1,174		20,762
At 30 September
2018(Unaudited)	38,993		14,628		53,621

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APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

3.1.3 Liquidity risk

Management aims to maintain sufficient cash and cash equivalents or have available funding through an adequate amount of available financing to meet its daily operation working capital requirements.

The table below set out the CMIG PM Group's financial liabilities by relevant maturity grouping at each balance sheet date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months from the balance sheet date equal to their carrying amounts in the statements of financial position, as the impact of discount is not significant.

	Less	Between	Between
	than 1	1 and 2	2 and 5	Over 5
	year	years	years	years	Total
	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
As at 31 December
2016
Trade and other
payables	570,717		-	-	-	570,717
Dividends payable	26,772		-	-	-	26,772
Lease liabilities	296		296		395		-	987
Borrowings	94,900		197,200		763,600		1,500		1,057,200
Interest payable	31,999		49,437		70,934		23		152,393
	724,684		246,933		834,929		1,523		1,808,069
As at 31 December
2017
Trade and other
payables	1,055,936		-	-	-	1,055,936
Dividends payable	107,730		-	-	-	107,730
Lease liabilities	4,692		3,988		2,951		1,983		13,614
Borrowings	383,061		528,841		1,640,920		328,000		2,880,822
Interest payable	184,641		154,449		182,570		19,413		541,073
	1,736,060		687,278		1,826,441		349,396		4,599,175
As at 31 December
2018
Trade and other
payables	1,110,782		-	-	-	1,110,782
Dividends payable	23,556		-	-	-	23,556
Lease liabilities	3,988		1,680		1,656		1,598		8,922
Borrowings	442,641		1,356,560		537,360		-	2,336,561
Interest payable	132,613		118,378		80,167		-	331,158
	1,713,580		1,476,618		619,183		1,598		3,810,979

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APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
		Less	Between	Between
		than 1	1 and 2	2 and 5	Over 5
		year	years	years	years	Total
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
As at 30 September
2019
Trade and other
payables	660,934		-	-	-	660,934
Dividends payable	54,664		-	-	-	54,664
Lease liabilities	1,752		883		1,244		1,296		5,175
Borrowings	267,617		206,227		1,579		-	475,423
Interest payable	21,168		7,924		-	-	29,092
	1,006,135		215,034		2,823		1,296		1,225,288

3.2 Capital management

The CMIG PM Group's objectives when managing capital are to safeguard the CMIG PM Group's ability to continue as a going concern in order to provide returns for owners and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the CMIG PM Group may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debt.

The CMIG PM Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total equity as shown in the combined statement of financial position. Net debt is calculated as total borrowings less cash and cash equivalents and restricted cash.

								As at
			As at 31 December			30 September
	2016	2017		2018		2019
	RMB'000		RMB'000	RMB'000	RMB'000
Total borrowings
(Note 25)	1,057,200		2,880,822		2,336,561		475,423
Less: cash and cash
equivalents
(Note 23)	(165,859)	(544,302)	(619,190)	(248,092)
restricted cash
(Note 23)	(2,069)	(2,748)	(1,970)	(10,679)
Net debt	889,272		2,333,772		1,715,401		216,652
Total equity	1,145,770		2,297,031		2,391,659		2,357,907
Gearing ratio	78%		102%		72%		9%

The decrease in gearing ratio as at 30 September 2019 was mainly caused by the reclassification of some borrowings to liabilities directly associated with assets classified as held for disposal (Note 31).

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APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

3.3 Fair value estimation

Fair value hierarchy of financial assets

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value in the combined financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the CMIG PM Group has classified its financial instruments into the three levels prescribed under the accounting standards.

								As at 30
			As at 31 December			September
	2016	2017		2018	2019
	RMB'000		RMB'000	RMB'000		RMB'000
Assets - Level 3:
- Financial assets at
fair value through
other
comprehensive
income (Note 18)	128		15,700		15,875	10,850
- Financial assets at
fair value through
profit or loss
(Note 22)	123,200		190,656		156,104	152,194
	123,328		206,356		171,979	163,044

The CMIG PM Group's policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.

Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and financial assets at fair value through other comprehensive income) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the CMIG PM Group is the current bid price. These instruments are included in level 1.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities and wealth management products.

The investment in unlisted equity securities represent the investment in certain privately owned companies. The fair value of the investments is approximate to the cost and relevant fair value gain/loss are minimal because these companies were in the early stage of operation and it has not been a long time since the CMIG PM Group's investments in them.

The investment in wealth management products mainly represent the investments in wealth management products issued by banks in the PRC with non-guaranteed principal and floating return of investment. The CMIG PM Group used discounted cash flows approach to value the fair value of the financial product as at period end. Due to the short period and low expected return rate ranging from 1.15% to 7.20% per annum, the CMIG PM Group considered the fair value of financial product approximately to the cost.

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APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

• CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
  The CMIG PM Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.
• 1. Impairment of intangible assets
     The CMIG PM Group tests annually whether goodwill has suffered any impairment. The recoverable amount of a CGU is determined based on value-in-use calculations which require the use of assumptions. The calculations use cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates. These growth rates are consistent with forecasts included in industry reports specific to the industry in which each CGU operates. Details of impairment charge, key assumptions and impact of possible changes in key assumptions are disclosed in Note 16.
     Customers relationships intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The recoverable amounts have been determined based on value-in-use calculations. These calculations require the use of judgments and estimates.
     Judgement is required to determine key assumptions adopted in the valuation models for impairment review purpose. Changing the assumptions selected by management in assessing impairment could materially affect the result of the impairment test and as a result affect the CMIG PM Group's financial condition and results of operations. If there is a significant adverse change in the key assumptions applied, it may be necessary to take additional impairment charge to the combined statement of comprehensive income.
  2. Business combinations
     Business combinations are accounted for under acquisition method. The determination and allocation of fair values to the identifiable assets acquired and liabilities assumed, which mainly include customer relationship is based on various assumptions and valuation methodologies requiring considerable management judgment. The most significant variables in these valuations are discount rates, terminal values, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The CMIG PM Group determines discount rates to be used based on the risk inherent in the related activity's current business model and industry comparisons. Terminal values are based on the expected life of assets and forecasted life cycle and forecasted cash flows over that period. Although the CMIG PM Group believes that the assumptions applied in the determination are reasonable based on information available at the date of acquisition, actual results may differ from the forecasted amounts and the difference could be material.
  3. Allowance on doubtful receivables
     The CMIG PM Group makes allowances on receivables, including loans to and receivables from related parties, based on assumptions about risk of default and expected loss rates. The CMIG PM Group used judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the CMIG PM Group's past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
     Where the expectation is different from the original estimate, such difference will impact the carrying amount of trade and other receivables and doubtful debt expenses in the periods in which such estimate has been changed. For details of the key assumption and inputs used, see Note 3.1.2 above.

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APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Current and deferred income tax
   The CMIG PM Group is subject to corporate income taxes in the PRC. Judgement is required in determining the amount of the provision for taxation and the timing of payment of the related taxations. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
   Deferred tax assets relating to certain temporary differences and tax losses are recognised when management considers to be probable that future taxable profit will be available against which the temporary differences or tax losses can be utilized. The outcome of their actual utilisation may be different.

• SEGMENT INFORMATION
  Management has determined the operating segments based on the reports reviewed by CODM. The CODM, who is responsible for allocating resources and assessing performance of the operating segment, has been identified as the directors.
  During the Track Record Period, the CMIG PM Group is principally engaged in the provision of property management services and value-added services, including property developer-related services, community-related services and professional services in the PRC. The directors review the operating results of the business as one operating segment to make decisions about resources to be allocated. Therefore, the CODM of CMIG PM regards that there is only one segment which is used to make strategic decisions.
  The principal operating entity of the CMIG PM Group is domiciled in the PRC. Accordingly, all of the CMIG PM Group's revenue were derived in the PRC during the Track Record Period.

As at 31 December 2016, 2017 and 2018 and 30 September 2019, all of the non-current assets of the CMIG PM Group were located in the PRC.

• REVENUE
  Revenue mainly comprises of proceeds from property management services and related value added services including property developer related services, community related services and professional services such as engineering and maintenance services. An analysis of the CMIG PM Group's revenue by category for the Track Record Period is as follows:

								Nine months ended
	Year ended 31 December		30 September
	2016	2017	2018	2018		2019
	RMB'000		RMB'000	RMB'000		RMB'000	RMB'000
							(Unaudited)
Revenue from customer and
recognised over time:
Property management services	731,700	2,609,001		3,373,392		2,502,967		2,703,434
Value added services:
- Property developer-related
services	28,650	68,798		76,226		37,074		59,745
- Community-related services	37,213	245,906		275,140		247,846		215,210
- Professional services	7,714	237,250		189,720		156,742		128,390
- Others	4,537	29,790		155,291		39,881		17,939
	809,814	3,190,745		4,069,769		2,984,510		3,124,718

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APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

The CMIG PM Group had a large number of customers and none of whom individually contributed 10% or more of the CMIG PM Group's revenue during the Track Record Period.

1. Contract liabilities
   The CMIG PM Group had recognised the following revenue-related contract liabilities:

								As at
	As at 31 December			30 September
	2016	2017			2018	2019
	RMB'000	RMB'000	RMB'000	RMB'000
Contract liabilities	106,071		223,764			227,559		102,502

1. Significant change in contract liabilities
   Contract liabilities of the CMIG PM Group mainly arise from the advance payments made by customers while the underlying services are yet to be provided. Such liabilities increased as a result of the growth of the CMIG PM Group's business.
2. Revenue recognised in relation to contract liabilities
   The following table shows how much of the revenue recognised in the current reporting period relates to carried-forward contract liabilities:

								Nine months Ended
	Year ended 31 December		30 September
	2016	2017	2018	2018		2019
	RMB'000		RMB'000	RMB'000		RMB'000	RMB'000
							(Unaudited)
Revenue recognised that was
included in the contract
liability balance at the
beginning of the year
Property management services	5,377	97,207		211,383		188,929		143,611
Others	120	8,864		12,381		5,586		5,425
	5,497	106,071		223,764		194,515		149,036

1. Unsatisfied performance obligations
   For property management services and property developer-related services, the CMIG PM Group recognises revenue in the amount that equals to the right to invoice which corresponds directly with the value to the customer of the CMIG PM Group's performance to date, on a monthly or quarterly basis. The CMIG PM Group has elected the practical expedient for not to disclose the remaining performance obligation for these types of contracts.
   For community-related services and professional services, they are rendered in short period of time and there is no material unsatisfied performance obligation at the end of respective periods.
2. Assets recognised from incremental costs to obtain a contract
   During the Track Record Period, there were no significant incremental costs to obtain or fulfil a contract.

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APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
7	EXPENSES BY NATURE
										Nine months Ended
			Year ended 31 December		30 September
			2016	2017	2018	2018		2019
			RMB'000		RMB'000	RMB'000		RMB'000	RMB'000
									(Unaudited)
	Employee benefit expenses (Note 8)	393,784	1,419,389		1,661,520		1,287,564		1,334,005
	Outsourcing costs		174,230	826,985		1,216,405		829,836		883,567
	Cost of consumables		47,055	165,041		175,994		127,901		137,919
	Maintenance cost		37,291	132,568		218,129		134,591		179,776
	Utilities		30,698	173,304		200,775		136,289		136,095
	Depreciation of property, plant and
	equipment (Note 13)		2,340	21,465		32,580		22,206		17,971
	Amortisation of right-of-use assets
	(Note 14)		233	1,740		4,051		3,038		3,038
	Depreciation of investment properties
	(Note 15)		841	3,928		5,328		3,956		3,840
	Amortisation of intangible asset
	(Note 16)		15,051	56,700		66,421		51,227		47,184
	Taxes and other levies		11,463	15,231		19,784		13,941		12,985
	Travelling and entertainment expenses	6,260	37,811		48,129		32,584		29,593
	Auditors' remuneration		281	858		2,729		2,423		2,243
	Office expenses		17,457	45,903		45,367		31,817		29,063
	Consulting fees		790	1,944		13,877		11,064		10,247
	Others		7,875	42,587		32,744		30,227		55,716
	Total of cost of sales, selling and
	marketing and administrative
	expenses		745,649	2,945,454		3,743,833		2,718,664		2,883,242

Cost of sales mainly include employee benefit expenses, outsourced security, greening and cleaning costs, costs of consumables including raw material and components used in professional services and community related services, maintenance and repair fees and utilities.

8	EMPLOYEE BENEFIT EXPENSE
									Nine months ended
		Year ended 31 December		30 September
		2016	2017	2018	2018		2019
		RMB'000		RMB'000	RMB'000		RMB'000	RMB'000
								(Unaudited)
	Wages, salaries and bonuses	315,288	1,232,817		1,393,775		1,092,299		1,138,719
	Pension costs	28,817	74,334		106,635		78,603		63,692
	Housing funds, medical insurances
	and other social insurances (a)	25,825	49,671		71,140		54,839		42,445
	Share-based compensation
	expenses (b)	5,635	5,522		5,578		4,184		-
	Other employee benefits (c)	18,219	57,045		84,392		57,639		89,149
		393,784	1,419,389		1,661,520		1,287,564		1,334,005

- II-44 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Employees in the CMIG PM Group's PRC entities are required to participate in defined contribution retirement schemes administered and operated by the local municipal government. The CMIG PM Group's PRC entities contribute funds which are calculated based on certain percentages of the average employee salary as agreed by local municipal government to the scheme to fund the retirement benefits of the employees.
2. In January 2016, Shanghai Minghua adopted an equity incentive plan using its own shares to award senior management members. According to the relevant terms of the plan, the vesting period is 3 years ended in December 2018. For the years ended 31 December 2016, 2017 and 2018 and the nine months ended 30 September 2018 and 2019, Shanghai Minghua recognised share-based compensation expenses of RMB5,635,000, RMB5,522,000, RMB5,578,000 RMB4,184,000 and nil respectively.
3. Other employee benefits mainly include meal, travelling and festival allowances.
4. Five highest paid individuals
   The five individuals whose emoluments were the highest in the CMIG PM Group include 1 director for the years ended 31 December 2016, 2017 and 2018 and the nine months ended 30 September 2018, whose emoluments are reflected in the analysis shown in Note 33. For the nine months ended 30 September 2019, the five individuals whose emoluments were the highest does not include any director. The emoluments payable to these individuals for the Track Record Period are as follows:

								Nine months ended
	Year ended 31 December		30 September
	2016	2017	2018	2018		2019
	RMB'000		RMB'000	RMB'000		RMB'000	RMB'000
							(Unaudited)
Wages, salaries, bonuses,
housing funds and other
employees benefits	5,954	5,954		7,510		4,703		5,705

The emoluments fell within the following bands:

			Number of individuals
								Nine months ended
	Year ended 31 December			30 September
	2016	2017		2018	2018		2019
Emolument bands
(in HK dollar)
HK$1,000,001 - HK$1,500,000	3	3			3		3		3
HK$1,500,001 - HK$2,000,000	-		-	-	1		2
HK$2,000,001 - HK$2,500,000	1	1			1		-	-
	4	4			4		4		5

- II-45 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

• OTHER INCOME AND OTHER GAINS - NET

								Nine months ended
	Year ended 31 December		30 September
	2016		2017	2018	2018		2019
	RMB'000	RMB'000	RMB'000		RMB'000	RMB'000
							(Unaudited)
Other income
Government grants (a)	8,753		16,609		11,822		8,699		18,370
Income from financial instruments
with guaranteed principal and
return	1,476		2,834		1,339		1,339		2,469
Others	393		1,735		2,235		1,260		2,003
	10,622		21,178		15,396		11,298		22,842
Other gains - net
Gain from financial assets at fair value
through profit or loss (Note 22)	1,620		4,662		5,230		3,712		4,418
Gain on disposal of investment
properties (b)	-	77		-		-	8,301
(Loss)/Gain on disposal of property,
plant and equipment and intangible
assets other than goodwill	(8)	(611)	(161)	834		439
Others	-	576		(368)	(925)	(383)
	1,612		4,704		4,701		3,621		12,775

1. The government grants mainly represented financial support funds from local government without attached conditions.
2. During the nine months ended 30 September 2019, the CMIG PM Group's subsidiary, Kerui PM, disposed of an investment property to a company controlled by its non-controlling interest shareholder at a cash consideration of RMB39,705,000, derived a gain of RMB8,301,000.

- II-46 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
10	FINANCE (COSTS)/INCOME - NET
										Nine months ended
			Year ended 31 December		30 September
			2016		2017	2018	2018	2019
			RMB'000	RMB'000	RMB'000 RMB'000	RMB'000
									(Unaudited)
	Finance costs:
	- Interest expense on bank and other
	borrowings		(3,818)	(6,414)	(7,973)	(4,926)	(1,821)
	- Interest expense on asset-backed
	securities		(25,558)	(103,440)	(166,665)	(118,703)	(107,132)
	- Interest expense on lease liabilities	(66)	(325)	(577)	(455)	(275)
			(29,442)	(110,179)	(175,215)	(124,084)	(109,228)

Finance income:

• Interest income on amounts due from related companies

	(Note 32(b))	26,140		105,894		167,062		116,899		103,782
	- Bank interests	500		2,719		1,373		2,131		1,847
		26,640		108,613		168,435		119,030		105,629
	Finance costs - net	(2,802)	(1,566)	(6,780)	(5,054)	(3,599)
11	INCOME TAX EXPENSE
										Nine months ended
		Year ended 31 December			30 September
		2016		2017	2018	2018		2019
		RMB'000	RMB'000	RMB'000			RMB'000	RMB'000
								(Unaudited)
	Current income tax
	- PRC CIT	25,235		80,072		106,521		84,747		83,214
	Deferred income tax (Note 27)
	- PRC CIT	(4,103)	(19,467)	(20,832)	(18,261)	(15,326)
		21,132		60,605		85,689		66,486		67,888

1. PRC Corporate Income Tax ("CIT")
   Income tax provision of the CMIG PM Group in respect of operations in Mainland China has been calculated at the applicable tax rate on the estimated assessable profits for the years/periods, based on the existing legislation, interpretations and practices in respect thereof. The statutory tax rate was 25% for the Track Record Period.

- II-47 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

According to Caishui [2011] No. 58 issued by the authorities on 27 July 2011, "Notice of Taxation on In-depth Implementation of the Strategy for Western Region Development" and relevant regulations of the State Administration of Taxation, from 1 January 2011 to 31 December 2020, enterprises in the encouraged industries located in the western region are entitled to a preferential corporate income tax rate of 15%. Some subsidiaries of the CMIG PM Group are qualified to enjoy such preferential corporate income tax rate during the Track Record Period.

1. The reconciliation from income tax calculated based on the applicable tax rates and total profit presented in the combined statements of comprehensive income to the income tax expenses is listed below:

											Nine months ended
			Year ended 31 December			30 September
			2016		2017	2018	2018		2019
			RMB'000	RMB'000	RMB'000		RMB'000		RMB'000
										(Unaudited)
	Profit before income tax	84,660		272,091		345,214		272,104		286,646
	Tax calculated at applicable
	corporate income tax rate of
	25%		21,165		68,023		86,304		68,026		71,662
	Tax effects of:
	- Undeductible expense	6,553		3,270		5,743		4,910		1,783
	- Income not subject to tax	(8,963)	(364)		-				-		-
	- Preferential difference in
	income tax for subsidiaries	-	-	(4,080)	(3,696)	(3,006)
	- Under/(over) provision of
	income tax	233		(7,480)	(392)	(392)	430
	- Effect of exclusion of share
	of profit tax of associates	(73)	(3,662)	(4,044)	(3,813)	(3,648)
	- Impact of deferred income
	tax assets on tax losses	2,217		818		2,158		1,451		667
			21,132		60,605		85,689		66,486		67,888
12	SUBSIDIARIES - CMIG PM
								As at 31		As at 30
								December	September
										2018				2019
								RMB'000		RMB'000
	Investments in subsidiaries									-	1,250,312

- II-48 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

The CMIG PM Group's principal subsidiaries at 31 December 2016, 2017, 2018 and 30 September 2019 are

set out below:

							Attributable
							equity
							interest of
							the CMIG
			Attributable effective equity interest	PM Group
			of the CMIG PM Group		as at the
	Place and date of	Issued and				30	date of this	Directly/		Name of statutory
Names of the	incorporation /	paid-up	31 December	September	report	indirectly	Principal activities	auditors and periods
subsidiaries	establishment	capital	2016	2017	2018	2019	%	held	/ place of operation	covered
Chongqing	Chongqing,	RMB62,199,850	100%	100%	100%	100%	100%	Directly	Holding Company	N/A
Haoji (i)	the PRC 4 July
	2014
Shanghai	Shanghai,	RMB333,000,000	100%	100%	100%	100%	100%	Directly	Holding Company	Note 1
Boying (ii)	the PRC 16
	October 2015
Shanghai Minghua	Shanghai,	RMB70,000,000	100%	100%	100%	100%	99%	Indirectly	Property	PricewaterhouseCoopers
(ii)	the PRC 16 June								management	Zhong Tian LLP for
	1992								services in	the years ended 31
									Shanghai	December 2016 and
										2017; Pan-China
										Certified Public
										Accountants for the
										year ended 31
										December 2018
Shanghai Mingya	Shanghai, the PRC	RMB500,000	91%	91%	91%	91%	91%	Indirectly	Catering	N/A
Catering	07 January 2014								management in
Management									Shanghai
Company Limited
Shanghai Dongya	Shanghai, the PRC	RMB3,000,000	91%	91%	91%	91%	91%	Indirectly	Property	N/A
Minghua Property	19 October 2005								management
Management									services in
Company Limited									Shanghai
Hainiu (Shanghai)	Shanghai, the PRC	RMB10,000,000	47%	47%	47%	47%	47%	Indirectly	E-commerce in	Shunzheng Certified
E-commerce	25 August 2015								Shanghai	Public Accountants
Company Limited										LLP ended 31
										December 2016;
										Shanghai Heli
										Certified Public
										Accountants LLP for
										the year ended 31
										December 2017 and
										2018
Dandong Minghua	Dandong, the PRC	RMB1,000,000	N/a	47%	47%	46%	46%	Indirectly	Property	N/A
World Trade	13 September								management
Property Services	2017								services in
Company Limited									Dandong

- II-49 -

APPENDIX II		ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
							Attributable
							equity
							interest of
							the CMIG
			Attributable effective equity interest	PM Group
			of the CMIG PM Group		as at the
	Place and date of	Issued and				30	date of this	Directly/		Name of statutory
Names of the	incorporation /	paid-up	31 December	September	report	indirectly	Principal activities	auditors and periods
subsidiaries	establishment	capital	2016	2017	2018	2019	%	held	/ place of operation	covered
Shanghai Shanfa	Shanghai, the PRC	RMB10,000,000	N/a	47%	47%	46%	46%	Indirectly	Property	N/A
Minghua Property	10 October 2017								management
Management									services in
Company Limited									Shanghai
Shanghai Richtech	Shanghai, the PRC	RMB12,000,000	67%	67%	67%	67%	67%	Directly	Property	PricewaterhouseCoopers
(iii)	15 December 1992								management	Zhong Tian LLP for
									services in	the years ended 31
									Shanghai	December 2016 and
										2018; Ruihua
										Certified Public
										Accountants LLP for
										the year ended 31
										December 2017
Shanghai New	Shanghai, the PRC	RMB3,000,000	67%	67%	67%	67%	67%	Indirectly	Property	N/A
Jinxiang Property	29 April 2006								management
Management									services in
Company Limited									Shanghai
Shanghai Shangkai	Shanghai, the PRC	RMB1,000,000	67%	67%	67%	67%	67%	Indirectly	Information	N/A
Information	27 February 1997								Technology in
Technology									Shanghai
Company Limited
Shanghai	Shanghai, the PRC	RMB5,681,818	N/A	41%	41%	41%	41%	Indirectly	Property	N/A
Shenheping	27 May 2003								management
Property									services in
Management									Shanghai
Company Limited
(ix)
Changzhou Jiafeng	Changzhou, the	RMB5,000,000	N/A	N/A	N/A	47%	47%	Indirectly	Property	N/A
Property Services	PRC 20								management
Company Limited	November 1996								services in
(xiii)									Changzhou
Changzhou	Changzhou, the	RMB10,800,000	70%	70%	70%	70%	70%	Directly	Property	PricewaterhouseCoopers
Zhongfang (iv)	PRC 19 August								management	Zhong Tian LLP for
	1993								services in	the years ended 31
									Changzhou	December 2016 and
										2018; Ruihua
										Certified Public

Accountants LLP for the year ended 31 December 2017

- II-50 -

APPENDIX II		ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
							Attributable
							equity
							interest of
							the CMIG
			Attributable effective equity interest	PM Group
			of the CMIG PM Group		as at the
	Place and date of	Issued and				30	date of this	Directly/		Name of statutory
Names of the	incorporation /	paid-up	31 December	September	report	indirectly	Principal activities	auditors and periods
subsidiaries	establishment	capital	2016	2017	2018	2019	%	held	/ place of operation	covered
Changzhou Lixin	Changzhou, the	RMB500,000	70%	70%	70%	70%	70%	Indirectly	Property	N/A
Property Company	PRC 17 January								management
Limited	2014								services in
									Changzhou
Changzhou	Changzhou, the	RMB500,000	70%	70%	70%	70%	70%	Indirectly	Catering	N/A
Zhongfang	PRC 25 March								management in
Huiyuan Catering	2014								Changzhou
Management
Company Limited
Bengbu Zhonglian	Bengbu, the PRC 21	RMB2,000,000	N/A	70%	70%	70%	70%	Indirectly	Property	N/A
Property	July 2017								management
Management									services in
Company Limited									Bengbu
Kerui PM (v)	Shanghai, the PRC	RMB20,000,000	51%	51%	51%	51%	51%	Directly	Property	PricewaterhouseCoopers
	05 February 2002								management	Zhong Tian LLP for
									services in	the years ended 31
									Shanghai	December 2016 and
										2017; Pan-China
										Certified Public
										Accountants for ye
										year ended 31
										December 2018
Nanjing Kerui	Nanjing, the PRC 27	RMB3,000,000	51%	51%	51%	51%	51%	Indirectly	Property	Jiangsu Zhongtian
	July 2006								management	Huaxia Certified
									services in	Public Accountants
									Nanjing	LLP ended 31
										December 2016,2017
										and 2018;
Jiangxi Kerui	Jiangxi, the PRC 19	RMB500,000	58%	58%	58%	58%	58%	Indirectly	Property	Jiangxi Zhongrui
	September 2003								management	Certified Public
									services in Jiangxi	Accountants LLP
										ended 31 December
										2016,2017 and 2018;
Huhehaote Kerui	Huhehaote, the	RMB500,000	58%	58%	58%	58%	58%	Indirectly	Property	N/A
	PRC 07								management
	November 2008								services in
									Huhehaote

- II-51 -

APPENDIX II		ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
							Attributable
							equity
							interest of
							the CMIG
			Attributable effective equity interest	PM Group
			of the CMIG PM Group		as at the
	Place and date of	Issued and				30	date of this	Directly/		Name of statutory
Names of the	incorporation /	paid-up	31 December	September	report	indirectly	Principal activities	auditors and periods
subsidiaries	establishment	capital	2016	2017	2018	2019	%	held	/ place of operation	covered
Da'anShanghai	Shanghai, the PRC	RMB730,000	N/A	46%	46%	51%	51%	Indirectly	Property	Shanghai Jiuxin
Da'an Property	19 May 1995								management	Certified Public
Management									services in	Accountants LLP
Company Limited									Shanghai	ended 31 December
(x)										2017 and 2018;
Changchun Kerui	Changchun, the	RMB3,000,000	52%	52%	52%	52%	52%	Indirectly	Property	Jilin Zhongxin
	PRC 16 July 2004								management	Huacheng Certified
									services in	Public Accountants
									Changchun	LLP ended 31
										December 2016,2017
										and 2018;
Shandong Honest	Shandong, the PRC	RMB74,000,000	N/A	35%	N/A	N/A	N/A	Directly	Property	Ruihua Certified Public
(viii)	13 September								management	Accountants LLP for
	1997								services in	the year ended 31
									Shandong	December 2017
Jinan Zongbao	Jinan, the PRC 21	RMB1,250,000	N/A	21%	N/A	N/A	N/A	Indirectly	Property	N/A
Taihang Property	October 2013								management
Management									services in Jinan
Company Limited
Jinan Hongkun	Jinan, the PRC 24	RMB1,000,000	N/A	35%	N/A	N/A	N/A	Indirectly	Internet	N/A
Information	February 2016								Information
Technology									Services,
Company Limited									Software
									Development in
									Jinan
Jinan Hongkun	Jinan, the PRC 17	RMB1,500,000	N/A	14%	N/A	N/A	N/A	Indirectly	Property	N/A
Property	February 2017								management
Management									services in Jinan
Company Limited
CMIG Hongtai	Weihai, the PRC 12	RMB50,000,000	N/A	N/A	N/A	N/A	N/A	Indirectly	Property	N/A
Business	March 2018								management
Management									services in Weihai
Company Limited

- II-52 -

APPENDIX II		ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
							Attributable
							equity
							interest of
							the CMIG
			Attributable effective equity interest	PM Group
			of the CMIG PM Group		as at the
	Place and date of	Issued and				30	date of this	Directly/		Name of statutory
Names of the	incorporation /	paid-up	31 December	September	report	indirectly	Principal activities	auditors and periods
subsidiaries	establishment	capital	2016	2017	2018	2019	%	held	/ place of operation	covered
Shenzhen Longcheng	Shenzhen, the PRC	RMB73,840,000	N/A	70%	70%	63%	63%	Directly	Property	Shenzhen Royal
(vi)	14 June 1994								management	Certified Ruihua
									services in	Certified Public
									Shenzhen	Accountants LLP for
										the year ended 31
										December 2017;
										PricewaterhouseCoopers
										Zhong Tian LLP for
										the year ended 31
										December 2018
Hainan Longcheng	Qionghai, the PRC	RMB1,000,000	N/A	49%	49%	44%	44%	Indirectly	Hotel property	N/A
Property	28 September								management,
Management	2009								entertainment,
Company Limited									housekeeping
									services in
									Hainan
Suzhou	Wujiang, the PRC	RMB3,000,000	N/A	42%	42%	38%	38%	Indirectly	Property	Ruihua Certified Public
Shenlongcheng	15 November								management,	Accountants LLP
Property	2007								hotel	ended 31 December
Management									management,	2017; Shanghai
Company Limited									cleaning services	Dingli Certified
									in Suzhou	Public Accountants
										LLP for the year
										ended 31 December
										2018
Shenzhen Longcheng	Shenzhen, the PRC	RMB10,000,000	N/A	67%	0%	0%	0%	Indirectly	Landscaping in	N/A
Landscaping	09 May 2003								Shenzhen
Company Limited
Jiangyin Longteng	Jiangyin, the PRC	RMB10,000,000	N/A	42%	42%	38%	38%	Indirectly	Property	N/A
Property	29 October 2019								management,
Management									sanitary cleaning,
Company Limited									motor vehicle
									parking services
									in Jiangyin
Shenzhen Yingfeng	Shenzhen, the PRC	RMB10,000,000	N/A	39%	39%	35%	35%	Indirectly	Consultation of	N/A
Yutong	09 August 2012								intelligent
Communication									building and
Technology									home installation
Company Limited									in Shenzhen

- II-53 -

APPENDIX II		ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
							Attributable
							equity
							interest of
							the CMIG
			Attributable effective equity interest	PM Group
			of the CMIG PM Group		as at the
	Place and date of	Issued and				30	date of this	Directly/		Name of statutory
Names of the	incorporation /	paid-up	31 December	September	report	indirectly	Principal activities	auditors and periods
subsidiaries	establishment	capital	2016	2017	2018	2019	%	held	/ place of operation	covered
Shenzhen Shenlong	Shenzhen, the PRC	RMB5,000,000	N/A	36%	36%	32%	32%	Indirectly	Property	Shenzhen Deyong
Zhihui Property	24 April 2015								management,	Certified Public
Management									sanitary cleaning,	Accountants LLP
Company Limited									motor vehicle	ended 31 December
									parking services	2017 and 2018;
									in Shenzhen
Shenzhen Longcheng	Shenzhen, the PRC	RMB1,000,000	N/A	69%	69%	62%	62%	Indirectly	Catering services in	N/A
Yibai Catering	03 September								Shenzhen
Service Company	2014
Limited
Shenzhen Longcheng	Shenzhen, the PRC	RMB5,000,000	N/A	70%	70%	63%	63%	Indirectly	Installation and	N/A
Mechanical and	20 July 2006								maintenance of
Electrical									electrical
Installation									equipment),
Engineering									central
Company Limited									air-conditioning
									system, etc. in
									Shenzhen
Shenzhen Longcheng	Shenzhen, the PRC	RMB5,000,000	N/A	70%	70%	63%	63%	Indirectly	Security services in	N/A
Security Service	08 September								Shenzhen
Company Limited	2016
Suzhou Shenlong	Suzhou, the PRC 16	RMB5,000,000	N/A	36%	36%	32%	32%	Indirectly	Property services,	N/A
City Management	August 2017								air-conditioning
Company Limited									maintenance and
									repairs, cleaning
									services in
									Suzhou
Xi'an Jintian (xi)	Xi'an, the PRC 18	RMB13,500,000	N/A	51%	51%	51%	51%	Directly	Property	Ruihua Certified Public
	April 2008								management	Accountants LLP for
									services in Xi'an	the year ended 31
										December 2017;
										PricewaterhouseCoopers
										Zhong Tian LLP for
										the year ended 31
										December 2018
Xi'an Bozhi Catering	Xi'an, the PRC 16	RMB2,000,000	N/A	51%	51%	51%	51%	Indirectly	Catering	N/A
Service Company	November 2015								management in
Limited									Xi'an
Baoji Jintian	Baoji, the PRC 04	RMB1,000,000	N/a	N/a	N/a	51%	51%	Indirectly	Property	N/A
Property	September 2019								management
Management									services in Baoji
Company Limited

- II-54 -

APPENDIX II		ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
							Attributable
							equity
							interest of
							the CMIG
			Attributable effective equity interest	PM Group
			of the CMIG PM Group		as at the
	Place and date of	Issued and				30	date of this	Directly/		Name of statutory
Names of the	incorporation /	paid-up	31 December	September	report	indirectly	Principal activities	auditors and periods
subsidiaries	establishment	capital	2016	2017	2018	2019	%	held	/ place of operation	covered
Xi'an Jintian Puyu	Xi'an, the PRC 07	RMB1,000,000	N/A	N/A	N/A	0.51	51%	Indirectly	Property	N/A
Property	August 2019								management
Management									services in Xian
Services Company
Limited
Chongqing Weishi	Chongqing, the	RMB20,795,760	N/A	N/A	26%	26%	26%	Directly	Property	PricewaterhouseCoopers
(xii)	PRC 24								management	Zhong Tian LLP for
	September 2001								services in	the year ended 31
									Chongqing	December 2018
Chongqing Weishi	Chongqing, the	RMB500,000	N/A	N/A	26%	26%	26%	Indirectly	Property	N/A
Meijie Company	PRC 10 December								management
Limited	2007								services in
									Chongqing
Chongqing Weishi	Chongqing, the	RMB2,000,000	N/A	N/A	26%	26%	26%	Indirectly	Property	N/A
Landscaping	PRC 05 February								management
Engineering	2016								services in
Company Limited									Chongqing
Chongqing Haitai	Chongqing, the	RMB5,000,000	N/A	51%	51%	51%	51%	Directly	Property	Ruihua Certified Public
(vii)	PRC 24								management	Accountants LLP for
	September 2009								services in	the year ended 31
									Chongqing	December 2017;
										PricewaterhouseCoopers
										Zhong Tian LLP for
										the year ended 31
										December 2018
Chongqing Haitai	Chongqing, the	RMB10,000,000	N/A	51%	51%	51%	51%	Indirectly	Car leasing services	N/A
Car Rental	PRC 22								In Chongqing
Company Limited	November 2005
Chongqing Haijia	Chongqing, the	RMB31,000,000	N/A	51%	51%	51%	51%	Indirectly	Catering	N/A
Food Culture	PRC 27 January								management in
Company Limited	2010								Chongqing
Chongqing Haitai	Chongqing, the	RMB3,000,000	N/A	51%	51%	51%	51%	Indirectly	Environmental	N/A
Environmental	PRC 14 March								improvement in
Engineering	2008								Chongqing
Company Limited
Chongqing	Chongqing, the	RMB1,000,000	N/A	51%	51%	51%	51%	Indirectly	Technology	N/A
Cornerstone	PRC 27 February								development,
Technology	2015								consulting in
Company Limited									Chongqing

- II-55 -

APPENDIX II		ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
							Attributable
							equity
							interest of
							the CMIG
			Attributable effective equity interest	PM Group
			of the CMIG PM Group		as at the
	Place and date of	Issued and				30	date of this	Directly/		Name of statutory
Names of the	incorporation /	paid-up	31 December	September	report	indirectly	Principal activities	auditors and periods
subsidiaries	establishment	capital	2016	2017	2018	2019	%	held	/ place of operation	covered
Chongqing Haitai	Chongqing, the	RMB10,000,000	N/A	51%	51%	51%	51%	Indirectly	Security services in	N/A
Security Service	PRC 13 July 2015								Chongqing
Company Limited
Chongqing	Chongqing, the	RMB6,000,000	N/A	51%	51%	51%	51%	Indirectly	Construction	N/A
Tongyuan	PRC 09 March								related business
Construction	2012								in Chongqing
Engineering
Company Limited
Chongqing	Chongqing, the	RMB3,000,000	N/A	51%	51%	51%	51%	Indirectly	Property	N/A
Cornerstone	PRC 15 October								management and
Logistics	2010								consulting
Management									services in
Company Limited									Chongqing
Sichuan Haitai	Chengdu, the PRC	RMB5,000,000	N/A	36%	36%	36%	36%	Indirectly	Logistics	N/A
Logistics	12 May 2015								Management
Management									Services in
Service Company									Sichuan
Limited

Note 1:

No statutory audited financial statements have been prepared for the company as it is an investment holding company and no statutory audit was required during the Track Record Period.

Note 2:

The companies of the CMIG PM Group in the property management business were historically acquired by the Remaining Shareholder, being the immediate holding company of the CMIG PM Group, from third parties, and were transferred to CMIG PM pursuant to the Reorganizations as mentioned in Note 1.2 above. Details of the acquisitions of subsidiaries are set out below and in Note 30 Business combinations.

1. On 9 September 2015, the CMIG PM Group acquired 100% equity interest of Chongqing Haoji from a third party at a cash consideration of RMB90,000,000.
2. On 13 November 2015, Shanghai Boying, which was set up by the Remaining Shareholder on 16 October 2015 as an investment holding company to acquire 100% equity interest of Shanghai Minghua from a third party at a cash consideration of RMB263,358,000.
3. On 4 August 2016, the CMIG PM Group acquired 67% equity interest of Shanghai Richtech from a third party at a cash consideration of RMB252,000,000.
4. On 12 September 2016, the CMIG PM Group acquired 70% equity interest of Changzhou Zhongfang from a third party at a cash consideration of RMB69,216,000.
5. On 30 September 2016, the CMIG PM Group acquired 51% equity interest of Kerui PM, from a third party at a cash consideration of RMB235,138,000. On 11 December 2019, CMIG PM disposed of its 51% equity interests in Kerui PM to New CMIG PM, an entity newly set up by Remaining

- II-56 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

Shareholder and the Vendor, being the existing shareholders of CMIG PM, at a cash consideration of RMB235,138,000. Further details of the impact of disposal of Kerui PM are set out in Note 31.

1. On 1 January 2017, the CMIG PM Group acquired 70% equity interest of Shenzhen Longcheng from a third party at a cash consideration of RMB361,816,000.
2. On 30 April 2017, the CMIG PM Group acquired 51% equity interest of Chongqing Haitai from a third party at a cash consideration of RMB168,946,000.
3. On 30 September 2017, the CMIG PM Group acquired 35% equity interest of Shandong Honest from a third party at a cash consideration of RMB94,480,000. In addition, the CMIG PM Group entered into an acting in concert agreement with the original controlling shareholder of Shandong Honest, who held 31.78% equity interest of Shandong Honest after the acquisition. As a result, the CMIG PM Group was able to control 66.78% voting rights and controlled Shandong Honest since the acquisition date.
   On 31 May 2018, the acting in concert agreement was terminated by the parties and as a result the CMIG PM Group lost control over Shandong Honest which became an associate of the CMIG PM Group from 31 May 2018. Shandong Honest was therefore deconsolidated and its net book value as at 31 May 2018 amounting to RMB96,692,000 was classified to investment accounted for using equity method (Note 17). No gain or loss was resulted from the deconsolidation.
4. On 31 October 2017, Shanghai Richtech acquired 61.6% equity interest of Shanghai Shenheping Property Management Company Limited ("Shenheping") from a third party at a cash consideration of RMB51,100,000. Since the CMIG PM Group holds 67% equity interest of Shanghai Richtech, the percentage of effective equity interest of Shenheping held by the CMIG PM Group is 41.3%.
5. On 30 November 2017, Kerui PM acquired 90% equity interest of Shanghai Da'an Property Management Company Limited ("Da'an") from a third party at a cash consideration of RMB18,000,000 and obtained control of Da'an. Since the CMIG PM Group holds 51% equity interest of Kerui PM, the percentage of equity interest of Da'an held by the CMIG PM Group is 45.9%.
6. On 6 December 2017, the CMIG PM Group acquired 51% equity interest of Xi'an Jintian from a third party at a cash consideration of RMB36,626,000.
7. On 1 January 2018, Chongqing Haitai acquired 51% equity interest of Chongqing Weishi from a third party at a cash consideration of RMB20,796,000. Since the CMIG PM Group holds 51% equity interest of Chongqing Haitai, the percentage of effective equity interest of Chongqing Weishi held by the CMIG PM Group is 26%.
8. On 31 January 2019, Shanghai Richtech acquired 70% equity interest of Changzhou Jiafeng from a third party at a cash consideration of RMB19,600,000. Since the CMIG PM Group holds 67% equity interest of Shanghai Richtech, the percentage of effective equity interest of Changzhou Jiafeng held by the CMIG PM Group is 46.90%.
   Material non-controlling interests
   Set out below are the summarised financial information for each subsidiary, together with their subsidiaries, which has non-controlling interests that are material to the CMIG PM Group.

- II-57 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Chongqing Haitai
   Summarised statements of financial position

																				As at 30
					As at 31 December					September
				2016				2017			2018			2019
			RMB'000	RMB'000	RMB'000		RMB'000
Current
Assets				N/A	179,101			235,162			197,634
Liabilities				N/A	136,645			144,189			107,784
Total current net assets				N/A	42,456			90,973			89,850
Non-current
Assets				N/A	147,335			121,846			97,587
Liabilities				N/A	60,173			44,984			31,143
Total non-current net assets				N/A	87,162			76,862			66,444
Net assets				N/A	129,618			167,835			156,294
Accumulated non-controlling
interests				N/A	2,077			16,398			1,564
Summarised statements of comprehensive income
																Nine months ended
	Year ended 31 December		30 September
	2016	2017	2018	2018	2019
	RMB'000		RMB'000		RMB'000		RMB'000		RMB'000
															(Unaudited)
Revenue	N/A	295,682		475,451		364,050		296,046
Profit for the year/period	N/A	19,392		26,888		29,613		7,220
Total comprehensive income	N/A	19,392		26,888		29,613		7,220
Profit allocated to
non-controlling interests	N/A	13		2,992		1,936		29

- II-58 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
Summarised statements of cash flows
									Nine months ended
		Year ended 31 December		30 September
	2016	2017	2018	2018		2019
		RMB'000		RMB'000	RMB'000		RMB'000	RMB'000
								(Unaudited)
Net cash generated/(used in)
from operating activities		N/A	36,653		16,191		17,977		4,153
Net cash (used in)/generated
from investing activities		N/A	(16,764)	9,307		(25,500)	(11,875)
Net cash generated from/(used
in) financing activities		N/A	(33,396)	(4,586)	13,999		(21,843)
Net (decrease)/increase in cash
and cash equivalents		N/A	(13,507)	20,912		6,476		(29,565)
Cash and cash equivalents at
beginning of year/period		N/A	54,264		40,757		40,757		61,669
Cash and cash equivalents at
end of year/period		N/A	40,757		61,669		47,233		32,104

The CMIG PM Group acquired 51% of equity interests of Chongqing Haitai on 30 April 2017. The summarised statements of comprehensive income and cash flows represented the amounts after the acquisition.

1. Kerui PM
   Summarised statements of financial position

								As at 30
	As at 31 December			September
	2016	2017			2018		2019
	RMB'000	RMB'000	RMB'000	RMB'000
Current
Assets	357,881		804,821			871,016		1,411,952
Liabilities	488,064		851,350			920,264		2,047,149
Total current net assets	(130,183)	(46,529)		(49,248)	(635,197)
Non-current
Assets	488,200		2,173,801			1,928,693		984,741
Liabilities	55,644		1,780,245			1,486,211		28,813
Total non-current net assets	432,556		393,556			442,482		955,928
Net assets	302,373		347,027			393,234		320,731
Accumulated non-controlling
interests	60,559		86,239			110,815		75,976

- II-59 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
Summarised statements of comprehensive income
											Nine months ended
			Year ended 31 December		30 September
			2016		2017	2018	2018		2019
			RMB'000		RMB'000	RMB'000		RMB'000	RMB'000
										(Unaudited)
Revenue			188,851		807,464		946,465		666,636		748,608
Profit for the year/period			12,931		45,533		59,780		37,161		43,378
Total comprehensive income	12,931		45,533		59,780		37,161		43,378
Profit allocated to
non-controlling interests			6,255		25,207		33,049		20,291		22,268
Summarised statements of cash flows
											Nine months ended
			Year ended 31 December		30 September
			2016		2017	2018	2018		2019
			RMB'000		RMB'000	RMB'000		RMB'000	RMB'000
										(Unaudited)
Net cash generated/(used in)
from operating activities			12,130		72,016		70,623		7,414		13,712
Net cash (used in)/generated
from investing activities			(146,893)	(1,945,082)	349,803		348,493		411,147
Net cash generated from/(used
in) financing activities			216,114		1,937,159		(408,331)	(402,592)	(480,343)
Net (decrease)/increase in cash
and cash equivalents			81,351		64,093		12,095		(46,685)	(55,484)
Cash and cash equivalents at
beginning of year/period			-	81,351		145,444		145,444		157,539
Cash and cash equivalents at
end of year/period			81,351		145,444		157,539		98,759		102,055

The CMIG PM Group acquired 51% of equity interests of Kerui PM on 30 September 2016. The summarised statements of comprehensive income and cash flows represented the amounts after the acquisition.

- II-60 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
13	PROPERTY, PLANT AND EQUIPMENT
										Office and
						Transportation	other
			Buildings	Machineries	equipment	equipment	Total
			RMB'000		RMB'000	RMB'000	RMB'000	RMB'000
	As at 1 January 2016
	Cost	-	92		1,798		4,359		6,249
	Accumulated depreciation	-	(39)	(1,400)	(3,079)	(4,518)
	Net book amount	-	53		398		1,280		1,731
	Year ended 31 December
	2016
	Opening net book amount	-	53		398		1,280		1,731
	Additions from acquisition
	of subsidiaries (Note 30)	50,633		135		3,283		5,017		59,068
	Other additions	204		15		564		46		829
	Disposals	-	(3)	(90)	(170)	(263)
	Depreciation charge	(679)	(36)	(653)	(972)	(2,340)
	Closing net book amount	50,158		164		3,502		5,201		59,025
	As at 31 December 2016
	Cost	52,922		309		8,362		18,648		80,241
	Accumulated depreciation	(2,764)	(145)	(4,860)	(13,447)	(21,216)
	Net book amount	50,158		164		3,502		5,201		59,025
	Year ended 31 December
	2017
	Opening net book amount	50,158		164		3,502		5,201		59,025
	Additions from acquisition
	of subsidiaries (Note 30)	18,421		6,827		89,606		6,385		121,239
	Other additions	-	6,766		4,685		8,024		19,475
	Disposals	(1,183)	(1,126)	(2,501)	(1,317)	(6,127)
	Depreciation charge	(4,258)	(1,265)	(11,236)	(4,706)	(21,465)
	Closing net book amount	63,138		11,366		84,056		13,587		172,147
	As at 31 December 2017
	Cost	72,761		21,214		166,116		41,716		301,807
	Accumulated depreciation	(9,623)	(9,848)	(82,060)	(28,129)	(129,660)
	Net book amount	63,138		11,366		84,056		13,587		172,147

- II-61 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
									Office and
					Transportation	other
		Buildings	Machineries	equipment	equipment	Total
		RMB'000		RMB'000	RMB'000	RMB'000	RMB'000
Year ended 31 December
2018
Opening net book amount	63,138		11,366		84,056		13,587		172,147
Additions from acquisition
of a subsidiary (Note 30)	-	227		332		-	559
Other additions	1,113		4,386		8,066		9,897		23,462
Decrease from disposal of a
subsidiary	-	(4,521)	(785)	(1,316)	(6,622)
Disposals	(78)	(1,292)	(18,816)	(342)	(20,528)
Depreciation charge	(4,624)	(3,660)	(15,194)	(9,102)	(32,580)
Closing net book amount	59,549		6,506		57,659		12,724		136,438
As at 31 December 2018
Cost	73,578		12,920		129,172		45,266		260,936
Accumulated depreciation	(14,029)	(6,414)	(71,513)	(32,542)	(124,498)
Net book amount	59,549		6,506		57,659		12,724		136,438
Nine months ended 30
September 2019
Opening net book amount	59,549		6,506		57,659		12,724		136,438
Additions from acquisition
of a subsidiary (Note 30)	840			-	-	481		1,321
Other additions	650		2,782		11,234		7,474		22,140
Disposals	-	(468)	(4,203)	(1,457)	(6,128)
Depreciation charge	(3,747)	(1,755)	(7,862)	(4,607)	(17,971)
Reclassify to assets classified
as held for disposal
(Note 31)	(43,505)	(3,740)	(4,609)	(347)	(52,201)
Closing net book amount	13,787		3,325		52,219		14,268		83,599
As at 30 September 2019
Cost	25,968		4,114		122,918		46,598		199,598
Accumulated depreciation	(12,181)	(789)	(70,699)	(32,330)	(115,999)
Net book amount	13,787		3,325		52,219		14,268		83,599
As at 1 January 2018
Cost	72,761		21,214		166,116		41,716		301,807
Accumulated depreciation	(9,623)	(9,848)	(82,060)	(28,129)	(129,660)
Net book amount	63,138		11,366		84,056		13,587		172,147

- II-62 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
								Office and
				Transportation	other
	Buildings	Machineries	equipment	equipment	Total
	RMB'000		RMB'000	RMB'000	RMB'000	RMB'000
(Unaudited)
Nine months ended 30
September 2018
Opening net book amount	63,138		11,366		84,056		13,587		172,147
Additions from acquisition
of a subsidiary (Note 30)	-	227		332		-	559
Other additions	1,100		2,935		6,499		5,485		16,019
Decrease from disposal of a
subsidiary	-	(4,521)	(785)	(1,316)	(6,622)
Disposals	(78)	(587)	(18,070)	(446)	(19,181)
Depreciation charge	(3,463)	(3,043)	(11,414)	(4,286)	(22,206)
Closing net book amount	60,697		6,377		60,618		13,024		140,716
As at 30 September 2018
Cost	73,565		12,602		129,817		41,264		257,248
Accumulated depreciation	(12,868)	(6,225)	(69,199)	(28,240)	(116,532)
Net book amount	60,697		6,377		60,618		13,024		140,716

As at 31 December 2016, 2017 and 2018, certain property, plant and equipment of the CMIG PM Group with net book value of RMB32,305,000, RMB31,246,000, and RMB32,682,000, have been pledged as security for the secured bank loans (Note 26), respectively.

Depreciation expenses were charged to the following categories in the combined statements of comprehensive income:

								Nine months ended
	Year ended 31 December		30 September
	2016	2017	2018	2018		2019
	RMB'000		RMB'000	RMB'000		RMB'000	RMB'000
							(Unaudited)
Cost of sales	1,071	17,664		19,103		13,979		11,243
Selling and marketing expenses	8	134		73		58		30
Administrative expenses	1,261	3,667		13,404		8,169		6,698
	2,340	21,465		32,580		22,206		17,971

- II-63 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

14 LEASES

1. Amounts recognised in the combined statements of financial position

									As at 30
		As at 31 December			September
		2016	2017			2018		2019
		RMB'000	RMB'000	RMB'000	RMB'000
Right-of-use assets
- Buildings	756		11,146			7,095		3,941
Lease liabilities
- Current	227		3,908			3,476		1,308
- Non-current	575		7,406			3,930		2,874
		802		11,314			7,406		4,182

1. Amounts recognised in the combined statements of comprehensive income

								Nine months ended
	Year ended 31 December		30 September
	2016	2017	2018	2018		2019
	RMB'000		RMB'000	RMB'000		RMB'000	RMB'000
							(Unaudited)
Depreciation charge of
right-of-use assets
- Buildings (Note 7)	233	1,740		4,051		3,038		3,038
Interest expense (Note 10)	66	325		577		455		275

- II-64 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
15	INVESTMENT PROPERTIES
											Nine months
											ended
				Year ended 31 December			30 September
		2016		2017			2018	2019
				RMB'000	RMB'000	RMB'000	RMB'000
	As at 1 January
	Cost	82,673		118,142			126,010		10,141
	Accumulated depreciation	(841)	(4,769)		(10,085)	(10,085)
	Net book amount	81,832		113,373			115,925		56
	During the year/period
	Opening net book amount			-	81,832			113,373		115,925
	Additions from acquisition of a
	subsidiary (Note 30)	82,673		-	-	-
	Additions			-	35,960			7,880		15,263
	Disposal			-	(491)		-	(31,380)
	Depreciation charge	(841)	(3,928)		(5,328)	(3,840)
	Reclassify to assets classified as
	held for disposal (Note 31)			-	-	-	(95,912)
	Closing net book amount	81,832		113,373			115,925		56

The CMIG PM Group leases certain residential properties to third parties. The CMIG PM Group's investment properties are stated at historical cost at the end of each reporting period.

As at 31 December 2018, investment properties with net book value amounting to RMB66,000 was pledged to secure borrowings of the CMIG PM Group as disclosed in Notes 26.

During the Track Record Period, the amounts recognised in profit or loss for investment properties other than depreciation charges are as follows:

								Nine months ended
	Year ended 31 December		30 September
	2016	2017	2018	2018		2019
	RMB'000		RMB'000	RMB'000		RMB'000	RMB'000
							(Unaudited)
Rental income	-	6,274		6,905		5,674		3,532
Direct operating expenses from
property that generated rental
income	-	(1,346)	(1,530)	(912)	(724)

- II-65 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
16	INTANGIBLE ASSETS
			Computer		Customer
			software	relationships	Goodwill	Total
			RMB'000		RMB'000	RMB'000	RMB'000
	As at 1 January 2016
	Cost		-	76,044		163,289		239,333
	Accumulated amortisation		-	(1,267)	-	(1,267)
	Net book amount		-	74,777		163,289		238,066
	Year ended 31 December 2016
	Opening net book amount		-	74,777		163,289		238,066
	Additions from acquisition of subsidiaries
	(Note 30)	3,655		222,823		429,620		656,098
	Other additions	355			-	-	355
	Disposals	(1)		-	-	(1)
	Amortisation	(172)	(14,879)	-	(15,051)
	Closing net book amount	3,837		282,721		592,909		879,467
	As at 31 December 2016
	Cost	4,426		298,868		592,909		896,203
	Accumulated amortisation	(589)	(16,147)	-	(16,736)
	Net book amount	3,837		282,721		592,909		879,467
	Year ended 31 December 2017
	Opening net book amount	3,837		282,721		592,909		879,467
	Additions from acquisition of subsidiaries
	(Note 30)	32		359,850		456,356		816,238
	Other additions	400			-	-	400
	Amortisation	(553)	(56,147)	-	(56,700)
	Closing net book amount	3,716		586,424		1,049,265		1,639,405
	As at 31 December 2017
	Cost	4,941		658,718		1,049,265		1,712,924
	Accumulated amortisation	(1,225)	(72,294)	-	(73,519)
	Net book amount	3,716		586,424		1,049,265		1,639,405

- II-66 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
			Computer		Customer
			software	relationship	Goodwill	Total
			RMB'000		RMB'000	RMB'000	RMB'000
Year ended 31 December 2018
Opening net book amount			3,716		586,424		1,049,265		1,639,405
Additions from acquisition of a subsidiary
(Note 30)			-	6,147		8,458		14,605
Other additions			3,070			-	-	3,070
Decrease from disposal of a subsidiary	(872)	(100,824)	(29,203)	(130,899)
Amortisation			(804)	(65,617)	-	(66,421)
Closing net book amount			5,110		426,130		1,028,520		1,459,760
As at 31 December 2018
Cost			6,851		555,108		1,028,520		1,590,479
Accumulated amortisation			(1,741)	(128,978)	-	(130,719)
Net book amount			5,110		426,130		1,028,520		1,459,760
Nine months ended 30 September 2019
Opening net book amount			5,110		426,130		1,028,520		1,459,760
Additions from acquisition of a subsidiary
(Note 30)			-	7,333		5,447		12,780
Other additions			137			-	-	137
Amortisation			(678)	(46,506)	-	(47,184)
Reclassify to assets classified as held for
disposal (Note 31)			(2,794)	(87,021)	(194,190)	(284,005)
Closing net book amount			1,775		299,936		839,777		1,141,488
As at 30 September 2019
Cost			2,483		438,661		839,777		1,280,921
Accumulated amortisation			(708)	(138,725)	-	(139,433)
Net book amount			1,775		299,936		839,777		1,141,488
As at 1 January 2018
Cost			4,941		658,718		1,049,265		1,712,924
Accumulated amortisation			(1,225)	(72,294)	-	(73,519)
Net book amount			3,716		586,424		1,049,265		1,639,405

- II-67 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
		Computer		Customer
		software	relationship	Goodwill	Total
		RMB'000		RMB'000	RMB'000	RMB'000
(Unaudited)
Nine months ended 30 September 2018
Opening net book amount		3,716		586,424		1,049,265		1,639,405
Additions from acquisition of a subsidiary
(Note 30)		-	6,147		8,458		14,605
Other additions		1,209			-	-	1,209
Decrease from disposal of a subsidiary	(872)	(100,824)	(29,203)	(130,899)
Amortisation		(617)	(50,610)	-	(51,227)
Closing net book amount		3,436		441,137		1,028,520		1,473,093
As at 30 September 2018 (Unaudited)
Cost		5,020		555,108		1,028,520		1,588,648
Accumulated amortisation		(1,584)	(113,971)	-	(115,555)
Net book amount		3,436		441,137		1,028,520		1,473,093

Amortisation has been charged to cost of sales and administrative expenses for each of the years ended 31 December 2016, 2017 and 2018 and each of the nine months ended 30 September 2018 and 2019 as follows:

								Nine months ended
	Year ended 31 December		30 September
	2016	2017	2018	2018		2019
	RMB'000		RMB'000	RMB'000		RMB'000	RMB'000
							(Unaudited)
Cost of sales	14,879	56,147		65,617		50,610		46,506
Administrative expenses	172	553		804		617		678
	15,051	56,700		66,421		51,227		47,184

- II-68 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Goodwill
   The breakdown of goodwill by companies acquired is set out below:

								As at 30
	As at 31 December			September
	2016	2017			2018		2019
	RMB'000	RMB'000	RMB'000	RMB'000
Acquisition of Shanghai Minghua	163,289		163,289			163,289		163,289
Acquisition of Shanghai Richtech	201,409		201,409			201,409		201,409
Acquisition of Changzhou
Zhongfang	44,826		44,826			44,826		44,826
Acquisition of Kerui PM
(Note 1.2&31)	183,385		183,385			183,385		-
Acquisition of Shenzhen Longcheng	-	244,968			244,968		244,968
Acquisition of Chongqing Haitai	-	113,783			113,783		113,783
Acquisition of Shandong Honest	-	29,203			29,203		-
Reclassification of Shandong Honest
to associate (Note 12(viii))	-	-	(29,203)	-
Acquisition of Xi'an Jintian	-	16,971			16,971		16,971
Acquisition of Shenheping	-	40,626			40,626		40,626
Acquisition of Da'an (Note 1.2&31)			10,805			10,805		-
Acquisition of Chongqing Weishi	-	-	8,458		8,458
Acquisition of Changzhou Jiafeng	-	-	-	5,447
Total	592,909		1,049,265			1,028,520		839,777

The details of the acquisitions of the above subsidiaries are set out in Note 30 below. Goodwill is attributable to the business prospects of the acquired businesses and will not be deductible for tax purpose.

Impairment review on the goodwill of the CMIG PM Group has been conducted by the management as at 31 December 2016, 2017 and 2018 and 30 September 2019, the balance sheet dates during the Track Record Period. For the purpose of impairment review, the recoverable amount of CGUs is determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets prepared by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated terminal growth rates stated below.

The range of key parameters used for value-in-use calculations are as follows:

			Growth rate	Terminal
			of the first	growth
		Gross margin	five years	rate	Discount rate
As at 31	December 2016	15% to 20%	10% to 15%	3%	15%
As at 31	December 2017	15% to 22%	5% to 15%	3%	15%
As at 31	December 2018	15% to 21%	5% to 15%	3%	15%
As at 30	September 2019	13% to 25%	3% to 20%	3%	15% to 16%

The growth rates used do not exceed the industry growth forecast for the market in which the CMIG PM Group operates. The discount rate used is pre-tax and reflects market assessments of the time value and the specific risks relating to the industry. The budgeted gross margin was determined by the management based on past performance and its expectation for market development.

- II-69 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

Based on the result of the goodwill impairment testing, the estimated recoverable amount of the CGUs far exceeded their carrying amount as at 31 December 2016, 2017 and 2018 and 30 September 2019. The management of the CMIG PM Group has not identified that a reasonable possible change in any of the key assumptions that could cause the carrying amount to exceed the recoverable amount.

Based on the result of the goodwill impairment testing, the headroom of the CGUs, as presented as the % over the respective goodwill amounts, were as following as at 31 December 2016, 2017 and 2018 and 30 September 2019, respectively.

				As at 30
		As at 31 December		September
	2016	2017	2018	2019
	RMB'000	RMB'000	RMB'000	RMB'000
Headroom %	15% to 54%	10% to 76%	14% to 112%	6% to 148%

The CMIG PM Group performs the sensitivity analysis based on the assumptions that revenue amount or terminal value or the discount rate have been changed. Had the estimated key assumptions during the forecast period been changed as below, the headroom % would be decreased to as below:

	As at 30
	September
	2019
	RMB'000
Revenue amount decreases by 10%	5% to 123%
Terminal value decreases by 10%	7% to 134%
Discount rate increases by 5%	7% to 134%

With reference to the recoverable amount assessed as at 31 December 2016, 2017, 2018 and 30 September 2019, the directors of CMIG PM determined that there was no provision for impairment of goodwill for the Track Record Period.

- II-70 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
17 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
									As at 30
		As at 31 December			September
		2016	2017			2018		2019
		RMB'000	RMB'000	RMB'000	RMB'000
Unlisted investments in associate	105,687		138,562			257,452		352,765

The movements in the CMIG PM Group's investments in associates accounted for using the equity method, and including goodwill, are as follows:

							Nine
							months
							ended 30
	Year ended 31 December	September
	2016	2017		2018		2019
	RMB'000	RMB'000	RMB'000	RMB'000
At the beginning of the year/period	95,040		105,687		138,562		257,452
Dividends declared	-	(1,968)	-	-
Reclassified from subsidiaries
(Note 12(viii))	-	-	96,692		-
Acquisition of associates	-	-	490		69,536
Acquisition of subsidiaries (Note 30)	-	20,055		-	-
Share of profits	10,647		14,788		21,708		25,777
At the end of the year/period	105,687		138,562		257,452		352,765

Set out below are the associates of the CMIG PM Group as at 31 December 2016, 2017 and 2018 and as at 30 September 2019. In the opinion of the directors of CMIG PM, none of the associates was individually significant to the CMIG PM Group. The associates as listed below have capital consisting solely of ordinary shares, which are held directly by the CMIG PM Group according to the CMIG PM Group's percentage holding. The country of incorporation or registration is also the principal place of business, and the proportion of ownership interest is the same as the proportion of voting rights held.

			Percentage of ownership interest
			attributable to the CMIG PM Group
		Registered				As at 30	Principal activities
	Date of	capital	As at 31 December	September	and place of
Company name	incorporation	(RMB'000)	2016	2017	2018	2019	operation
Shanghai Yide Minghua	03/06/2014	5,000	49.00%	49.00%	49.00%	49.00%	The PRC; Property
Property Management							management
Company Limited
("Yide Minghua")
Chongqing Tianjiao	22/01/1999	5,000	24.17%	24.17%	24.17%	24.17%	The PRC; Property
Joyful Life Service							management and
Company Limited							real estate
("Chongqing							brokerage
Tianjiao")

- II-71 -

APPENDIX II		ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
			Percentage of ownership interest
			attributable to the CMIG PM Group
		Registered				As at 30 Principal activities
	Date of	capital	As at 31 December	September	and place of
Company name	incorporation	(RMB'000)	2016	2017	2018	2019	operation
Kunming	01/06/2010	10,000	N/A	30.00%	30.00%	30.00%	The PRC; Property
Shenlongcheng							management and
Property Management							real estate
Company Limited							brokerage
("Kunming
Shenlongcheng")
Shenzhen Huilongcheng	12/11/2015	8,000	N/A	49.00%	49.00%	49.00%	The PRC; Property
Property Management							management
Company Limited
("Shenzhen
Huilongcheng")
Suzhou Zhonglu	20/06/2014	1,000	N/A	49.00%	49.00%	49.00%	The PRC; Property
Shenlongcheng							management, hotel
Property Management							management and
Company Limited							real estate
("Suzhou Zhonglu")							brokerage
Shandong Honest	31/05/2018	7,400	N/A	N/A	35.00%	35.00%	The PRC; Property
Property							management
Development
Company Limited
("Shangdong
Honest")
Luzhou Gaoxin Haitai	20/06/2018	1,000	N/A	N/A	49.00%	49.00%	The PRC; Property
Logistics Management							management
Company Limited
("Luzhou Gaoxin
Haitai")
Shanghai Zunrong	22/04/2019	100,000	N/A	N/A	N/A	10.00%	The PRC; Property
Security Service Co.,							management
Ltd. ("Shanghai
Zunrong")
Shanxi Chengyue	17/04/2019	6,000	N/A	N/A	N/A	25.00%	The PRC; Property
Property Management							management
Company Limited
("Shanxi Chengyue")
Dalian Yimei Corporate	01/04/2019	10,000	N/A	N/A	N/A	35.00%	The PRC; Property
Management Service							management
Company Limited
("Dalian Yimei)

The English names of the associates represent the best effort by the management of the CMIG PM Group in translating their Chinese names as they do not have official English names.

- II-72 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

The CMIG PM Group determined that it does not have controlling interest in the above companies, but rather possesses significant influence. The associates as listed above are private companies and there are no quoted market prices available for their shares. There are no contingent liabilities relating to the CMIG PM Group's interest in the associates.

Set out below is the summarized financial information of the major associates including goodwill.

For the year ended 31 December 2016
	As at 31 December 2016
	Chongqing
	Tianjiao	Other entity	Total
	RMB'000	RMB'000	RMB'000
Reconciliation to carrying amounts:
Opening net assets as at 1 January 2016	97,526		5,389				102,915
Capital injection	14,080		-	14,080
Profits for the year	42,850		593				43,443
Closing net assets as at 31 December 2016	154,456		5,982				160,438
The CMIG PM Group's share:
Percentage of interest	24.17%		49.00%
Interest in the associates	37,332		2,931				40,263
Goodwill	65,424		-	65,424
Carrying amounts	102,756		2,931				105,687
	For the year ended 31 December 2016
Revenue	483,455		23,168				506,623
Profit from continuing operations	42,850		593				43,443
The CMIG PM Group's share:
Percentage of interest	24.17%		49.00%
Share of profit for the year	10,356		291				10,647

- II-73 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
For the year ended 31 December 2017
							As at 31 December 2017
				Chongqing	Other
						Tianjiao	entities	Total
						RMB'000	RMB'000	RMB'000
Reconciliation to carrying amounts:
Opening net assets as at 1 January 2017					154,456				5,982						160,438
Additions							-	17,925						17,925
Dividends declared						(4,088)			(1,999)				(6,087)
Profits for the year						55,441				2,834						58,275
Closing net assets as at 31 December 2017					205,809				24,742						230,551
The CMIG PM Group's share:
Percentage of interest						24.17%
Interest in the associates						49,744				10,288						60,032
Goodwill						65,424				13,106						78,530
Carrying amounts						115,168				23,394						138,562
						For the year ended 31 December 2017
Revenue						574,835				44,172						619,007
Profit from continuing operations						55,441				2,834						58,275
The CMIG PM Group's share:
Percentage of interest						24.17%
Share of profit for the year						13,399				1,389						14,788
For the year ended 31 December 2018
							As at 31 December 2018
		Chongqing		Shandong	Other
			Tianjiao		Honest	entities	Total
			RMB'000		RMB'000	RMB'000	RMB'000
Reconciliation to carrying amounts:
Opening net assets as at 1 January 2018	205,809				-	24,742				230,551
Additions				-	192,827			1,000				193,827
Profits for the year		69,789		9,753			2,911				82,453
Closing net assets as at 31 December 2018	275,598		202,580			28,653				506,831
The CMIG PM Group's share:
Percentage of interest		24.17%		35.00%
Interest in the associates		66,612		70,903			12,204				149,719
Goodwill		65,424		29,203			13,106				107,733
Carrying amounts		132,036		100,106			25,310				257,452

- II-74 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
							For the year ended 31 December 2018
Revenue				715,260			223,518				57,087					995,865
Profit from continuing operations				69,789						9,753				2,911					82,453
The CMIG PM Group's share:
Percentage of interest				24.17%			35.00%
Share of profit for the year				16,868						3,414				1,426					21,708
For the nine months ended 30 September 2019
							As at 30 September 2019
	Chongqing	Shandong	Shanxi			Dalian			Other
		Tianjiao			Honest Chengyue				Yimei			entities	Total
		RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Reconciliation to carrying
amounts:
Opening net assets as at
1 January 2019	275,598		202,580					-					-	28,653				506,831
Additions		-			-	128,269		99,050		28,000				255,319
Profits for the period	68,247		9,038				11,181		4,967		3,091				96,524
Closing net assets as at
30 September 2019	343,845		211,618				139,450		104,017		59,744				858,674
The CMIG PM Group's share:
Percentage of interest	24.17%		35.00%				25.00%		35.00%
Interest in the associates	83,107		74,066				34,863		36,406		16,590				245,032
Goodwill	65,424		29,203					-					-	13,106				107,733
Carrying amounts	148,531		103,269				34,863		36,406		29,696				352,765
					For the nine months ended 30 September 2019
Revenue	617,881		273,553				130,075		57,252		49,043				1,127,804
Profit from continuing operations	68,247		9,038				11,181		4,967		3,091				96,524
The CMIG PM Group's share:
Percentage of interest	24.17%		35.00%				25.00%		35.00%
Share of profit for the period	16,495		3,163				2,795		1,738		1,586				25,777

For associates acquired during the years/periods, the share of the profit is calculated based on the post-acquisition profit of the entity.

- II-75 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
18	FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
										As at 30
			As at 31 December			September
			2016	2017			2018		2019
			RMB'000	RMB'000	RMB'000	RMB'000
	At the beginning of the year/period	128		128			15,700		15,875
	Additions		-	15,572			175		-
	Reclassify to assets classified as held for
	disposal (Note 31)		-	-	-	(5,025)
	At the end of the year/period		128		15,700			15,875		10,850

Financial assets at fair value through other comprehensive income as at 31 December 2016, 2017 and 2018 and 30 September 2019 represented equity investments in certain unlisted companies in the PRC.

19	TRADE RECEIVABLES
									As at 30
		As at 31 December			September
		2016	2017			2018		2019
		RMB'000	RMB'000	RMB'000	RMB'000
	Trade receivables
	- Third parties	347,560		780,615			904,638		806,401
	- Related parties (Note 32(c))	13,288		9,003			14,780		5,730
	Subtotal of gross trade receivables	360,848		789,618			919,418		812,131
	Less: provision for impairment of trade
	receivables	(4,704)	(19,405)		(31,694)	(30,853)
	Notes receivable	1,000		4,435			6,469		11,090
	Trade receivables - net	357,144		774,648			894,193		792,368

Trade receivables mainly arise from property management services managed under lump sum basis and value-added services. Property management services revenue under lump sum basis is received in accordance with the term of the relevant property service agreements. Service income is due for payment by the property owners upon rendering of services. Property management services income and value-added services income are received in accordance with the terms of the relevant services agreements, and due for payment upon the issuance of invoice.

- II-76 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

As at 31 December 2016, 2017 and 2018 and 30 September 2019, the ageing analysis of the trade receivables based on invoice date were as follows:

								As at 30
	As at 31 December			September
	2016	2017			2018		2019
	RMB'000	RMB'000	RMB'000	RMB'000
Within 1 year	317,791		634,530			683,657		703,103
1 to 2 years	33,099		110,577			125,153		69,944
2 to 3 years	5,531		30,283			70,510		23,247
Over 3 years	4,427		14,228			40,098		15,837
	360,848		789,618			919,418		812,131

As at 31 December 2016, 2017 and 2018 and 30 September 2019, trade receivables were denominated in RMB. Property management services income and value-added services income are received in accordance with the terms of the relevant services agreements, and due for payment upon the issuance of invoice.

The CMIG PM Group applies the simplified approach to providing for expected credit losses prescribed by HKFRS 9, which permits the use of the lifetime expected loss provision for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. Movements on the provision for impairment of trade receivables are shown in Note 3.1.2. As at 31 December 2016, 2017 and 2018 and 30 September 2019, provisions amounting to RMB4,704,000, RMB19,405,000, RMB31,694,000 and RMB30,853,000 was made against the gross amounts of trade receivables as at the balance sheet date, respectively (Note 3.1.2).

The carrying value of the trade receivables approximated their fair values as at the balance sheet dates and were denominated in RMB.

20 PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES

1. The CMIG PM Group

								As at 30
	As at 31 December			September
	2016	2017			2018		2019
	RMB'000	RMB'000	RMB'000	RMB'000
Non-current:
Prepayment for purchase of
properties	46,612		74,562			93,547		-
Others	225		2,811			2,989		6,949
Total of non-current	46,837		77,373			96,536		6,949

- II-77 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
								As at 30
				As at 31 December	September
		2016	2017	2018		2019
		RMB'000	RMB'000		RMB'000	RMB'000
(Continued)
Current:
Prepayment for operations
- Utilities		10,179		11,275	9,939		4,112
- Prepayment for raw materials	295		2,131	2,001		6,400
- Prepayment for service fee	1,012		10,891	18,127		10,871
Subtotal		11,486		24,297	30,067		21,383
Deposits (a)		15,365		92,564	106,456		81,466
Other receivables
- Related parties (Note 32(c), b)	78,992		273,437	159,293		128,246
- Petty cash (c)		-	18,894	38,605		44,851
- Payments on behalf of property
owners (d)		49,494		100,633	86,980		70,443

• Financial instruments with guaranteed principal and return

(Note 32(c))	41,552		50,000		-	-
- Others	20,965		25,643		24,300		10,502
Subtotal	191,003		468,607		309,178		254,042
Less: allowance for impairment of
other receivables and
deposits	(8,761)	(13,454)	(16,912)	(10,272)
Total of current	209,093		572,014		428,789		346,619
Total of current and non-current	255,930		649,387		525,325		353,568

1. The deposits represented the performance guarantees and bidding guarantees paid to the customers.
2. Other receivables due from related parties represented mainly the amounts due from the Remaining Shareholder though a cash pooling arrangement setup by the Remaining Shareholder. In connection with the Proposed VSA Transaction, the CMIG PM Group's subsidiaries involved in the cash pooling arrangement have stopped making deposits into the relevant bank accounts and the amounts have been gradually settled subsequent to the Track Record Period.
3. Petty cash represented the advance payments made to project managers as reimbursement for daily purchase or travel expenses.
4. The payments on behalf of property owners represented the payments on behalf of property owners mainly in respect of utilities and maintenance costs of the properties.

Movements on the allowance for impairment of prepayments, deposits and other receivables are shown in Note 3.1.2. The provision for impairment increased during the Track Record Period due to the increase in balance of prepayments, deposits and other receivables.

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APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

As at 31 December 2016, 2017, 2018 and 30 September 2019, prepayments, deposits and other receivables were denominated in RMB. The carrying values of other receivables approximated their fair value as at the balance sheet dates.

1. CMIG PM

							As at		As at
					31 December	30 September
						2018				2019
						RMB'000		RMB'000
	Prepayments
	- Others						-	845
	Other receivables
	- Related parties (Note 32)						-	5,721
	Total						-	6,566
21	LOANS AND INTERESTS RECEIVABLES DUE FROM THE REMAINING SHAREHOLDER
												As at 30
		As at 31 December		September
		2016	2017	2018			2019
		RMB'000	RMB'000		RMB'000		RMB'000
	Loans and interests receivables due from
	the Remaining Shareholder
	Non-current:
	Shanghai Minghua	840,000		648,000			-		-
	Kerui PM	-	1,620,800	1,362,800				-
		840,000		2,268,800	1,362,800				-
	Current:
	Shanghai Minghua	216,208		181,499	588,807			464,092
	Kerui PM	-	312,048	330,551				-
		216,208		493,547	919,358			464,092
	Total:	1,056,208		2,762,347	2,282,158			464,092
	Loan and interest receivables
	included in assets classified as held for
	disposal (Note 31)	-		-			-	1,379,105

On 15 July 2016 and 9 August 2017, the CMIG PM Group's two subsidiaries, Shanghai Minghua and Kerui PM, entered into asset-backed securitisation arrangements with a third party assets management company, whereby Shanghai Minghua and Kerui PM issued asset-backed securities to investors ("ABS investors") and obtained proceeds ("ABS borrowings") amounting to RMB1 billion and RMB2 billion, respectively (Note 26). Further details of the ABS borrowings are set out in Note 26.

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APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

The proceeds from the ABS borrowings were onward lent to the Remaining Shareholder, being the immediate controlling shareholder of the CMIG PM Group. According to the respective loan agreements with the Remaining Shareholder, the loans to the Remaining Shareholder are unsecured, interest bearing at 3.8% to 5.5% per annum and fully repayable by 7 August 2019 for Shanghai Minghua, and interest bearing at 6.1% to 6.7% per annum and fully repayable by 9 August 2023 for Kerui PM. The Remaining Shareholder had been settling Shanghai Minghua's and Kerui PM's receivables by instalments according to the two companies' ABS borrowings' repayment schedules during 2016 to 2018. However, the remaining balance of Shanghai Minghua's receivables due on 7 August 2019 amounting to RMB464.1 million was not settled by the Remaining Shareholder as at 30 September 2019.

The entire balance of Kerui PM's loan and interest receivables from the Remaining Shareholder as at 30 September 2019 of RMB1,379.1 million became current assets since the Remaining Shareholder is required to repay the whole amount to Kerui PM so as to enable Kerui PM to settle its ABS borrowings to be fully payable in August 2020 should the ABS investors opt to exercise an early redemption option (Note 26). In addition, pursuant to the agreements in connection with the Proposed VSA Transaction entered into on 25 September 2019 (Note 1.1), the CMIG PM Group disposed of its entire 51% equity interest in Kerui PM to a new entity set up by the existing shareholders of CMIG PM on 11 December 2019. As such, the assets attributable to Kerui PM, including the loan and interest receivables from the Remaining Shareholder amounting to RMB1,379.1 million as at 30 September 2019, were reclassified from the respective assets' financial line items to "assets classified as held for disposal" on the combined financial position of the CMIG PM Group (Note 31) according to HKFRS 5 "Non-current assets held for sale and discontinued operations", while the measurement method for Kerui PM's loan and interest receivables from the Remaining Shareholder shall continue to follow the credit loss assessment in accordance with HKFRS 9 "Financial instruments".

For the purpose of this Historical Financial Information, management of the Company and the CMIG PM Group performed an assessment of the recoverability of the receivables from the Remaining Shareholder with reference to a settlement plan provided by the Remaining Shareholder. In accordance with the settlement plan, the Remaining Shareholder is committed to utilize its entitlement to future dividends from the CMIG PM Group, the net proceeds from future disposals of certain of its assets in excess of the liabilities to other creditors to which such assets are pledged, together with a cash settlement arrangement, to settle the outstanding balances due to Shanghai Minghua and Kerui PM as at 30 September 2019. The proceeds for the said cash settlement arrangement, in the amount of RMB930 million were remitted in December 2019, majority of which was from Guangdong Fengxi Yinglong Equity Investment Partnership (Limited Partnership), the Vendor of this Proposed VSA Transaction (Note 1.1), which has confirmed that this was made on behalf of the Remaining Shareholder. The cash proceeds are kept in an escrow bank account held and controlled by CMIG PM, and are restricted to be used for the future repayments of the ABS borrowings of Shanghai Minghua and Kerui PM as and when they fall due.

In respect of Shanghai Minghua's overdue receivables from Remaining Shareholder of RMB464.1 million as at 30 September 2019, RMB122 million was repaid by the Remaining Shareholder in December 2019 while the remaining RMB342 million was settled by the fund held in the above-mentioned escrow bank account and this settlement is irrevocable according to a PRC legal opinion.

In respect of Kerui PM's receivables from the Remaining Shareholder, the Management of the CMIG PM Group performed an assessment of the recoverability of Kerui PM's receivables due from the Remaining Shareholder. Taking into consideration of the remaining RMB588 million of cash held in the escrow account (despite that, unlike the settlement against Shanghai Minghua's overdue receivables from the Remaining Shareholder, successful settlement using this cash balance against Kerui PM's receivables from the Remaining Shareholder depends on certain future conditions according to the same PRC legal opinion), and the estimated future proceeds from other sources in the settlement plan. It was concluded by the management that no impairment provision was needed against Kerui PM's receivables from the Remaining Shareholder as at 31 December 2017 and 2018 and the relevant amount included in "assets classified as held for disposal" as at 30 September 2019.

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APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
22 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
									As at 30
		As at 31 December			September
		2016	2017			2018		2019
		RMB'000	RMB'000	RMB'000	RMB'000
Investment in wealth management products	123,200		190,656			156,104		152,194

Movements in investment in wealth management products are as follows:

							Nine
							months
							ended 30
	Year ended 31 December	September
	2016	2017		2018		2019
	RMB'000	RMB'000	RMB'000	RMB'000
At the beginning of the year/period	73,000		123,200		190,656		156,104
Acquisition of subsidiaries (Note 30)	6,000		10,000		-	-
Additions	1,061,200		825,516		1,561,133		887,367
Reclassified of subsidiaries to associates
(Note 12(viii))	-	-	(55,000)	-
Disposals	(1,017,000)	(768,060)	(1,540,685)	(847,277)
Reclass as assets held for disposal	-	-	-	(44,000)
At the end of the year/period	123,200		190,656		156,104		152,194

The financial assets at fair value through profit or loss are wealth management products, denominated in RMB, with expected rates of return ranging from 1.80% to 4.40% per annum during the Track Record Period. They had initial terms ranging from 91 days to 289 days. The returns on all of these wealth management products are not guaranteed, hence their contractual cash flows do not qualify for solely payments of principal and interest. Therefore they are measured at fair value through profit or loss.

23	CASH AND CASH EQUIVALENTS
									As at 30
		As at 31 December			September
		2016	2017			2018		2019
		RMB'000	RMB'000	RMB'000	RMB'000
	Cash at bank	165,677		542,557			617,706		257,689
	Cash on hand	2,251		4,493			3,454		1,082
	Less: restricted cash	(2,069)	(2,748)		(1,970)	(10,679)
	Cash and cash equivalents	165,859		544,302			619,190		248,092

The carrying amount of cash and cash equivalents balances are denominated in RMB.

The restricted cash represented primarily the subsidiaries' cash deposits in the bank as performance security for property management services according to the requirement of local government authority.

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APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
24	RESERVES
	(a)	The CMIG PM Group
								Share-based
				Capital	Statutory		payment	Other
				reserves	reserves		reserves	reserves	Total
				RMB'000	RMB'000		RMB'000	RMB'000	RMB'000
		Balance at 1 January 2016		358,109		-		-	-	358,109
		Deemed contribution from the owner in
		relation to acquisitions of subsidiaries ((a)
		and Note 30)		556,354		-		-	-	556,354
		Deemed contribution from the owner (a)	-	-		-	4,131		4,131
		Capital contribution from the
		owner (b)		55,018		-		-	-	55,018
		Share-based compensation (Note 8)	-	-	5,635		-	5,635
		Appropriation of statutory reserves (c)	-	7,570			-	-	7,570
		Balance at 31 December 2016		969,481		7,570		5,635		4,131		986,817
		Balance at 1 January 2017		969,481		7,570		5,635		4,131		986,817
		Deemed contribution from the owner in
		relation to acquisitions of subsidiaries ((a)
		and Note 30)		661,868		-		-	-	661,868
		Deemed contribution from the owner (a)	-	-		-	5,048		5,048
		Share-based compensation (Note 8)	-	-	5,522		-	5,522
		Appropriation of statutory reserves (c)	-	13,328			-	-	13,328
		Balance at 31 December 2017		1,631,349		20,898		11,157		9,179		1,672,583
		Balance at 1 January 2018		1,631,349		20,898		11,157		9,179		1,672,583
		Deemed contribution from the
		owner (a)		-	-		-	12,863		12,863
		Share-based compensation (Note 8)	-	-	5,578		-	5,578
		Appropriation of statutory reserves (c)	-	7,880			-	-	7,880
		Balance at 31 December 2018		1,631,349		28,778		16,735		22,042		1,698,904
		Balance at 1 January 2019		1,631,349		28,778		16,735		22,042		1,698,904
		Capital contribution from the owner (b)	251,671		-		-	-	251,671
		Deemed distribution to the owner
		in relation to acquisitions of
		subsidiaries (a)		(1,569,325)	-		-	-	(1,569,325)
		Transaction with non-controlling interest	-	-		-	1,351		1,351
		Balance at 30 September 2019		313,695		28,778		16,735		23,393		382,601

- II-82 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
						Share-based
		Capital	Statutory		payment	Other
		reserves	reserves		reserves	reserves	Total
		RMB'000	RMB'000		RMB'000	RMB'000	RMB'000
(Continued)
(Unaudited)
Balance at 1 January 2018		1,631,349		20,898		11,157		9,179		1,672,583
Deemed contribution from the owner (a)	-	-		-	9,558		9,558
Share-based compensation (Note 8)	-	-	4,184		-	4,184
Balance at 30 September 2018		1,631,349		20,898		15,341		18,737		1,686,325

1. Deemed contributions from and distributions to the owner
   As mentioned in Note 1.2, the Operating Companies now comprising the CMIG PM Group were acquired by the Remaining Shareholder, being the immediate holding company, from third parties before and during the Track Record Period prior to the transfer of the Operating Companies to CMIG PM pursuant to the Reorganization. Assets and liabilities of those acquired companies were included in the combined financial statements of the CMIG PM Group from the respective dates of acquisitions from third parties by the Remaining Shareholder. The considerations paid by the Remaining Shareholder to the original owners were treated as deemed contributions from the owner.
   Other deemed contribution from the owner represented certain expenses paid by the Remaining Shareholder, and other related parties controlled by the Remaining Shareholder or CMIG during the Track Record Period, which were not charged to the CMIG PM Group and therefore deemed as contribution from then shareholders and recorded directly in equity.
   The deemed distributions to owners during the nine months ended 30 September 2019 represented the consideration payments made by the CMIG PM Group to the Remaining Shareholder for the transfer of the Operating Companies from the Remaining Shareholder to CMIG PM pursuant to the Reorganisation (Note 1.2). The consideration payments were treated as deemed distributions to the owners.
2. Capital contribution from owner
   For the year ended 31 December 2016, the capital contribution from owner represented the capital injection to one of the subsidiaries paid by the then shareholder.
   For the nine months ended 30 September 2019, the capital contribution from owner represented capital contribution to CMIG PM in excess of the registered capital of CMIG PM.
3. Statutory reserves
   Statutory reserves comprise statutory surplus reserve and discretionary surplus reserves.
   Pursuant to the Company Law of the PRC and the articles of association of PRC subsidiaries, the subsidiaries in the PRC are required to appropriate 10% of each year 's net profit (after offsetting previous years' losses) to statutory surplus reserve until the fund aggregates to 50% of their registered capital. After the appropriation to statutory surplus reserve, the subsidiaries in the PRC can appropriate profit, subject to respective equity holders' approval, to discretionary surplus reserve.
   The appropriation to statutory and discretionary surplus reserves must be made before distribution of dividends to equity holders. These reserves shall only be used to make up

- II-83 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

for previous years' losses, to expand production operations, or to increase the capital of the respective company. The entities in the PRC may transfer their respective statutory surplus reserves into paid-in capital, provided that the balance of the statutory surplus reserve after such transfer is not less than 25% of the registered capital.

The balance of statutory reserves of the CMIG PM Group represented the cumulative balance of the appropriation to and usage of the reserves subsequent to the dates of acquisitions by the CMIG PM Group of the respective companies.

1. CMIG PM

							As at		As at
					31 December	30 September
						2018				2019
						RMB'000		RMB'000
	Capital contribution from the owner ((b) above)				-	251,671
25	TRADE AND OTHER PAYABLES
												As at 30
		As at 31 December		September
		2016	2017	2018			2019
		RMB'000	RMB'000		RMB'000		RMB'000
	Trade payables:
	- Third parties	119,022		330,809	436,124			347,273
	- elated parties (Note 32(c))	2,584		2,939	2,074			12
		121,606		333,748	438,198			347,285
	Other payables:
	- Related parties (Note 32(c))	99,631		76,888	61,719			2,388
	- Amounts collected on behalf of property
	owners (a)	132,805		233,719	272,201			141,696
	- Deposit received (b)	76,984		132,725	123,207			79,552
	- Staff salaries and welfare payables	57,260		210,816	208,560			155,934
	- Accrued taxes other than income tax	13,053		23,700	28,766			23,168
	- Others	139,691		278,856	215,457			90,014
		519,424		956,704	909,910			492,752
		641,030		1,290,452	1,348,108			840,037

1. The amounts collected on behalf of property owners represented mainly the fees collected for operating income from public areas, such as advertising and parking income, on behalf of property owners.
2. The deposit received represented the deposit received from service providers for performance guarantee and cash received from property owners as decoration guarantees or utilities guarantees.

At 31 December 2016, 2017 and 2018 and 30 September 2019, trade and other payables were denominated in RMB, and their carrying amounts approximated their fair values as at the balance sheet date.

- II-84 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
26	BORROWINGS
														As at 30
				As at 31 December				September
				2016	2017				2018			2019
				RMB'000	RMB'000	RMB'000	RMB'000
	Non-current
	Secured long term bank loan (a)			30,200			11,040				8,480			-
	Unsecured long term bank loans (b)	100,000			100,000				-	-
	Unsecured other borrowings (d)			-	21,782				14,081			15,423
	Asset-backed securities borrowings (e)	927,000			2,748,000				2,286,000			435,000
	Less:
	- current portion of long term bank loans
	and other borrowings			(7,900)	(24,061)		(16,641)	(13,617)
	- current portion of asset-backed securities
	borrowings			(87,000)	(359,000)		(398,000)	(229,000)
				962,300			2,497,761				1,893,920			207,806
	Current
	Secured short term bank loans (c)			-	-	18,000			25,000
	Unsecured other borrowings (d)			-	-	10,000			-
	Current portion of long term bank loans
	and other borrowings			7,900			24,061				16,641			13,617
	Current portion of asset-backed securities
	borrowings			87,000			359,000				398,000			229,000
				94,900			383,061				442,641			267,617
	Total borrowings			1,057,200			2,880,822				2,336,561			475,423
	Included in liabilities directly associated
	with assets classified as held for disposal
	- Asset-backed securities borrowings	-	-	-	1,453,000
	- Secured long term bank loan			-	-	-	4,000
				-	-	-	1,457,000

1. Secured long term bank loans
   The secured long term bank loan amounting to RMB30,200,000, RMB11,040,000 and RMB8,480,000 as at 31 December 2016, 2017 and 2018 was borrowed by Kerui PM in June 2015 for a 7 years term and secured by properties of Kerui PM. The loan was interest bearing at the benchmark interest rate of People's Bank of China ("PBOC") plus 25% margin per annum. The principal and interest were repayable quarterly at a fixed repayment amount. As at 30 September 2019, the remaining balance of the bank loan of RMB4,000,000 was classified to liabilities directly associated with assets classified as held for disposal (Note 31).

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APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Unsecured long term bank loans
   The unsecured long term bank loan amounting to RMB100,000,000 as at 31 December 2016 and 2017 was borrowed by Shanghai Boying in May 2016 for a 5 years term and guaranteed by the Remaining Shareholder. The loan was interest bearing at the benchmark interest rate of the PBOC plus 10% margin per annum. The principal was repayable every half year and the interest was repayable quarterly. Shanghai Boying made early repayment in full in December 2018.
2. Short term secured bank loans
3. 1. In April 2018, Chongqing Haitai borrowed a short term bank loan amounting to RMB18,000,000. The bank loan was interest bearing at a rate of 6% per annum and secured by certain buildings with carrying amount of RMB2,495,000 and investment properties with carrying amount of RMB66,000 as at 31 December 2018. The loan was fully repaid in April 2019.
   2. In September 2019, Shenzhen Longcheng borrowed a short term bank loan amounting to RMB25,000,000. The bank loan is interest bearing at a rate of 5.66% per annum and secured by certain property, plant and equipment held by non-controlling shareholders.
4. Unsecured other borrowings
5. 1. Long term loans amounting to RMB21,782,000, RMB14,081,000 and RMB15,423,000 as at 31 December 2017 and 2018 and 30 September 2019 were borrowed from third party individuals by Chongqing Haitai. These loans are interest bearing at the benchmark interest rate of the PBOC plus 30% margin per annum. The principal is repayable by 30 November 2021.
   2. A short term loan amounting to RMB10,000,000 was borrowed from Shanghai Minsheng Investment Microfinance Company Limited, a company controlled by CMIG, in December 2018. The loan was interest bearing at a rate of 12% per annum and at a fixed term of 12 months.
6. Asset-backedsecurities borrowings

								As at 30
	As at 31 December			September
	2016	2017			2018		2019
	RMB'000	RMB'000	RMB'000	RMB'000
ABS of Shanghai Minghua	927,000		748,000			545,000		435,000
ABS of Kerui PM	-	2,000,000			1,741,000		-
	927,000		2,748,000			2,286,000		435,000
Asset-backed securities borrowings
included in liabilities directly
associated with assets classified
as held for disposal	-	-	-	1,453,000

- II-86 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

The asset-backed securities ("ABS") borrowings of the CMIG PM Group comprised two ABS borrowings issued by two subsidiaries of the CMIG PM Group, Shanghai Minghua in July 2016 and Kerui PM in August 2017. The details are set out below:

1. ABS of Shanghai Minghua
   On 15 July 2016, Shanghai Minghua entered into an asset-backed securitisation arrangement with a third party assets management company whereby Shanghai Minghua issued ABS to investors and obtained proceeds amounting to RMB1,050 million, amongst which RMB50 million was subordinated securities purchased by Shanghai Minghua itself. The ABS were secured by Shanghai Minghua's pledge of its future 5 years' right of receiving management fees from the property management contracts in respect of certain properties under Shanghai Minghua's management, and supported by a guarantee provided by the immediate holding company, the Remaining Shareholder. The ABS carry interest rate ranging from 3.8% to 5.5% per annum, and repayable in ten half-annual instalments from 3 January 2017 to 3 Jul 2021.
   According to Shanghai Minghua's ABS agreement, Shanghai Minghua is eligible to exercise an early-redemption option to redeem the remaining ABS on the sixth repayment date on 2 July 2019. There was no early-redemption made by Shanghai Minghua.
2. ABS of Kerui PM
   On 9 August 2017, Kerui PM entered into another asset-backed securitisation arrangement with a third party assets management company whereby Kerui PM issued ABS to investors and obtained proceeds amounting to RMB2,020 million, amongst which RMB20 million was subordinated securities purchased by Kerui PM itself. The ABS were secured by Kerui PM's pledge of its future 6 years' right of receiving management fees from the property management contracts in respect of certain properties under Kerui PM's management, and supported by a guarantee provided by the immediate holding company, Remaining Shareholder. The ABS carry nominal interest rate ranging from 6.1% to 6.7% per annum, and repayable in twelve half-annual instalments from 9 February 2018 to 9 August 2023.
   Among the ABS issued by Kerui PM, RMB778,000,000 was acquired by a fellow subsidiary controlled by the Remaining Shareholder. The ABS borrowings payable to the fellow subsidiary amounted to RMB624,000,000, RMB499,000,000 and RMB499,000,000 as at 31 December 2017 and 2018 and 30 September 2019, respectively.
   According to Kerui PM's ABS agreement, the investors are eligible to exercise an early-redemption option to demand Kerui PM to redeem the remaining ABS held by the investors during the registration period of early redemption, which is from 18 to 20 days in advance to the sixth repayment date on 9 August 2020. Kerui PM is obliged to redeem all the remaining ABS if the investors exercised the early redemption option. Accordingly, the whole balance of Kerui PM's ABS borrowings at 9 August 2019 including interest accrued thereon totalling RMB1,453 million was reclassified from non-current liabilities to current liabilities.
   As mentioned in Notes 1.2 and 31, pursuant to the agreement entered into on 25 September 2019 by the Vendor and the Purchaser in respect of the acquisition of the 60% equity interest in the CMIG PM Group, it was agreed that Kerui PM would be transferred out of the CMIG PM Group to a company newly set up by the existing shareholders of CMIG PM. The disposal was completed on 11 December 2019. As such, the assets and liabilities of Kerui PM, were reclassified to "assets classified as held for disposal" and "liabilities directly associated with assets classified as held for disposal" (included the ABS borrowings) on the statement of combined financial position of the CMIG PM Group as at 30 September 2019.

- II-87 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. As at 31 December 2016, 2017 and 2018 and 30 September 2019, the CMIG PM Group's borrowings were repayable as follows:
   Bank borrowings

								As at 30
	As at 31 December			September
	2016	2017			2018		2019
	RMB'000	RMB'000	RMB'000	RMB'000
Within 1 year	7,900		2,560			20,560		25,000
Between 1 and 2 years	5,200		27,560			2,560		-
Between 2 and 5 years	115,600		80,920			3,360		-
Over 5 years	1,500		-	-	-
	130,200		111,040			26,480		25,000
Other borrowings
								As at 30
	As at 31 December			September
	2016	2017			2018		2019
	RMB'000	RMB'000	RMB'000	RMB'000
Within 1 year	87,000		380,501			422,081		242,617
Between 1 and 2 years	192,000		501,281			548,000		207,806
Between 2 and 5 years	648,000		1,489,000			1,340,000		-
Over 5 years	-	399,000			-	-
	927,000		2,769,782			2,310,081		450,423

1. All of the CMIG PM Group's borrowings are denominated in RMB. The carrying amounts of the borrowings approximated their fair values as at the balance sheet dates, as the impact of discounting is not significant.
2. There is no undrawn banking facilities of the CMIG PM Group as at the balance sheet dates.

27 DEFERRED INCOME TAX

The analysis of deferred tax assets and liabilities in the combined statements of financial position was as follows:

								As at 30
	As at 31 December			September
	2016	2017			2018		2019
	RMB'000	RMB'000	RMB'000	RMB'000
Deferred tax assets:
- Deferred tax asset to be settled after
more than 12 months	1,409		3,375			4,774		4,446
- Deferred tax asset to be settled within
12 months	3,367		7,992			11,841		9,908
	4,776		11,367			16,615		14,354

- II-88 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
									As at 30
		As at 31 December			September
	2016	2017			2018		2019
		RMB'000	RMB'000	RMB'000	RMB'000
Deferred tax liabilities:
- Deferred tax liabilities to be recovered
after more than 12 months	(58,629)	(136,166)		(98,275)	(63,002)
- Deferred tax liabilities to be recovered
within 12 months	(16,107)	(15,584)		(12,557)	(12,557)
	(74,736)	(151,750)		(110,832)	(75,559)
	(69,960)	(140,383)		(94,217)	(61,205)

The movement in deferred income tax assets and liabilities during the Track Record Period, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:

	Differences between
	the fair value of
	identifiable net
	assets and book
	value arising from
	business
	combinations not				Provision
	under common				for
	control	impairments	Others	Total
	RMB'000				RMB'000	RMB'000	RMB'000
As at 1 January 2016	(18,693)				-	-	(18,693)
Acquisition of subsidiaries	(59,858)	4,488		-	(55,370)
Credited/(charged) to the
combined statements of
comprehensive income	3,815		(1,121)	1,409		4,103
At 31 December 2016	(74,736)	3,367		1,409		(69,960)
Acquisition of subsidiaries	(93,121)	2,645		586		(89,890)
Credited to the combined
statements of comprehensive
income	16,107		1,980		1,380		19,467
At 31 December 2017	(151,750)	7,992		3,375		(140,383)
Acquisition of subsidiaries	(1,266)				-	-	(1,266)
Credited to the combined
statements of comprehensive
income	15,584		3,849		1,399		20,832
Disposal of subsidiaries	26,600					-	-	26,600
At 31 December 2018	(110,832)	11,841		4,774		(94,217)

- II-89 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
			Differences between
			the fair value of
			identifiable net
			assets and book
			value arising from
				business
			combinations not		Provision
			under common		for
				control	impairments	Others	Total
				RMB'000		RMB'000	RMB'000	RMB'000
	(Continued)
	As at 1 January 2019	(110,832)	11,841		4,774		(94,217)
	Acquisition of subsidiaries	(2,097)		-	-	(2,097)
	Credited/(charged) to the
	combined statements of
	comprehensive income	12,557		3,097		(328)	15,326
	Reclass to the asset held for
	disposal	24,813		(5,030)	-	19,783
	At 30 September 2019	(75,559)	9,908		4,446		(61,205)
	(Unaudited)
	As at 1 January 2018	(151,750)	7,992		3,375		(140,383)
	Acquisition of subsidiaries	(1,266)		-	-	(1,266)
	Credited to the combined
	statements of comprehensive
	income	11,688		5,157		1,416		18,261
	Disposal of subsidiaries	26,600			-	-	26,600
	At 30 September 2018	(114,728)	13,149		4,791		(96,788)
28	DIVIDENDS DECLARED AND PAYABLE
											Nine
											months
											ended 30
				Year ended 31 December	September
		2016	2017		2018		2019
				RMB'000		RMB'000	RMB'000	RMB'000
	Dividends declared:
	The Remaining Shareholder			-	13,367		29,090		208,744
	Non-controlling shareholders of
	subsidiaries			-	8,195		20,300		138,352
				-	21,562		49,390		347,096
	Dividend payable:
	The Remaining Shareholder			-		-	1,657		28,758
	Non-controlling shareholders of
	subsidiaries	26,772		107,730		21,899		25,906
		26,772		107,730		23,556		54,664

- II-90 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

Dividends declared during the Track Record Period represented dividends declared by the subsidiaries of CMIG PM to the then shareholders of the subsidiaries prior to them becoming the subsidiaries of the CMIG PM Group pursuant to the Reorganization (Note 1.2).

No dividend has been declared or paid by CMIG PM since incorporation.

Dividend payable represented the balances of dividends declared by CMIG PM's subsidiaries to the equity holders of the subsidiaries.

29 CASH FLOW INFORMATION

1. Net cash generated from/(used in) operating activities

								Nine months ended
	Year ended 31 December		30 September
	2016		2017	2018	2018	2019
	RMB'000	RMB'000	RMB'000		RMB'000	RMB'000
							(Unaudited)
Profit before income tax	84,660		272,091		345,214		272,104		286,646
Adjustments for:
- Depreciation of property,
plant and equipment	2,340		21,465		32,580		22,206		17,971
- Amortisation of
right-of-use assets	233		1,740		4,051		3,038		3,038
- Depreciation of investment
properties	841		3,928		5,328		3,956		3,840
- Amortisation of intangible
assets	15,051		56,700		66,421		51,227		47,184
- Allowance for impairment
of trade receivables and
other receivables	(416)	12,304		15,747		20,762		12,625
- Income from financial
assets at fair value
through profit or loss	(1,620)	(4,662)	(5,230)	(3,712)	(4,418)
- Net (gains)/losses on
disposal of non-current
assets	2		(43)	633		124		(8,119)
- Share based payment
expense	5,635		5,522		5,578		4,184		-
- Net finance expenses	3,302		4,285		8,153		7,185		5,446

Changes in operating assets and liabilities, net of effects of business combination:

- Restricted cash	701		(679)	778		926		(8,708)
- Trade and other debtor	(1,047)	(85,987)	(327,138)	(525,275)	(123,668)
- Inventories	(11,700)	35		(356)	(1,062)	(852)
- Trade and other creditors	102,951		219,098		164,483		83,647		(27,904)
Net cash generated from/
(used in) from operating
activities	200,933		505,797		316,242		(60,690)	203,081

- II-91 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Proceeds from sale of property, plant and equipment, investment properties and intangible assets other than goodwill comprise:

								Nine months ended
	Year ended 31 December		30 September
	2016		2017	2018	2018		2019
	RMB'000	RMB'000	RMB'000		RMB'000	RMB'000
							(Unaudited)
Net book value of:
- Property, plant and
equipment (Note 13)	263		6,127		20,528		19,181		6,128
- Investment properties
(Note 15)	-	491		-		-	31,380
- Intangible assets other than
goodwill (Note 16)	1		-	-		-	-
	264		6,618		20,528		19,181		37,508
Gain/(loss) on disposal of
assets (Note 9)	(8)	(534)	(161)	834		8,740
Proceeds from sale of property,
plant and equipment and
investment properties,
intangible assets other than
goodwill	256		6,084		20,367		20,015		46,248

- II-92 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. The reconciliation of liabilities arising from financing activities is as follows:

			Borrowings
	Lease	and interest
	liabilities	payable	Total
	RMB'000	RMB'000	RMB'000
At 1 January 2016	-	-	-
Cash flows	(66)	(979,424)	(979,490)
Non-cash changes	69		(29,376)	(29,307)
- Acquisition of subsidiaries	(805)	(48,400)	(49,205)
At 31 December 2016	(802)	(1,057,200)	(1,058,002)
Cash flows	(325)	(1,673,340)	(1,673,665)
Non-cash changes	1,943		(109,854)	(107,911)
- Acquisition of subsidiaries	(12,130)	(95,665)	(107,795)
At 31 December 2017	(11,314)	(2,936,059)	(2,947,373)
Cash flows	(577)	726,957		726,380
Non-cash changes	4,485		(175,647)	(171,162)
At 31 December 2018	(7,406)	(2,384,749)	(2,392,155)
Cash flows	(275)	498,112		497,837
Non-cash changes	3,364		(48,346)	(44,982)
- Liabilities classified as held for disposal	135		1,459,560		1,459,695
At 30 September 2019	(4,182)	(475,423)	(479,605)
(Unaudited)
At 1 January 2018	(11,314)	(2,936,059)	(2,947,373)
Cash flows	(455)	485,888		485,433
Non-cash changes	3,363		(153,313)	(149,950)
At 30 September 2018	(8,406)	(2,603,484)	(2,611,890)

30 BUSINESS COMBINATIONS

The companies of the CMIG PM Group in the property management business were historically acquired by the Remaining Shareholder, the immediate holding company of the CMIG PM Group, from third parties, and were transferred to CMIG PM pursuant to the Reorganizations as mentioned in Note 1.2 above.

- II-93 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

Prior to the Track Record Period, on 9 September 2015, the CMIG PM Group acquired 100% equity interest of Chongqing Haoji from a third party at a cash consideration of RMB90,000,000, and on 13 November 2015, the CMIG PM Group acquired 100% equity interest of Shanghai Minghua from a third party at a cash consideration of RMB263,357,900. Goodwill amounting to RMB163,289,000 was derived during the year ended 31 December 2015. Details of the acquisitions during the Track Record Period are set out below:

1. For the year ended 31 December 2016

	Shanghai	Changzhou
	Richtech	Zhongfang	Kerui PM
	RMB'000		RMB'000	RMB'000
	(a)		(b)	(c)
Purchase consideration in cash	252,000		69,216		235,138
Recognised amounts of identifiable assets acquired and liabilities assumed
Cash and cash equivalents	27,804		16,481		98,175
Trade receivables	104,438		44,657		140,222
Financial assets at fair value through
profit or loss	-		-	6,000
Prepayments, deposits and other
receivables	68,857		7,560		86,898
Inventories	-	278		210
Investment properties (Note 15)	-		-	82,673
Property, plant and equipment (Note
14)	1,846		4,685		52,537
Intangible assets (Note 16)	70,866		31,390		124,222
Trade and other payables	(148,059)	(44,399)	(404,237)
Borrowings	-		-	(48,400)
Dividend payable	(33,238)	(17,227)	(1,445)
Deferred income tax liabilities	(17,005)	(8,582)	(30,799)
Net identifiable assets acquired	75,509		34,843		106,056
Non-controlling interests	(24,918)	(10,453)	(54,303)
Goodwill (Note 16)	201,409		44,826		183,385
Net assets acquired	252,000		69,216		235,138
Outflow of cash to acquire subsidiaries, net of cash acquired
Cash consideration
- Paid by the Remaining
Shareholder	252,000		69,216		235,138
Less: Cash and cash equivalents
acquired	(27,804)	(16,481)	(98,175)
Net outflow of cash - investing
activities	224,196		52,735		136,963

Total

RMB'000

556,354

142,460

289,317

6,000

163,315

488

82,673

59,068

226,478

(596,695)

(48,400)

(51,910)

(56,386)

216,408

(89,674)

429,620

556,354

556,354

(142,460)

413,894

- II-94 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Acquisition of Shanghai Richtech
   On 4 August 2016, the CMIG PM Group acquired 67% equity interest of Shanghai Richtech and its subsidiaries from a third party at a cash consideration of RMB252,000,000 and obtained control of Shanghai Richtech.
   The acquired business contributed revenue of RMB91,554,000 and net profit of RMB9,632,000 to the CMIG PM Group for the period from the acquisition date to 31 December 2016.
   If the acquisition had occurred on 1 January 2016, combined pro-forma revenue and net profit for the year ended 31 December 2016 would have been increased by RMB129,059,000 and RMB10,030,000 respectively. These amounts have been calculated using the subsidiary's results.
2. Acquisition of Changzhou Zhongfang
   On 12 September 2016, the CMIG PM Group acquired 70% equity interest of Changzhou Zhongfang and its subsidiaries from a third party at a cash consideration of RMB69,216,000 and obtained control of Changzhou Zhongfang.
   The acquired business contributed revenue of RMB39,470,000 and net profit of RMB3,800,000 to the CMIG PM Group for the period from the acquisition date to 31 December 2016.
   If the acquisition had occurred on 1 January 2016, combined pro-forma revenue and net profit for the year ended 31 December 2016 would have been increased by RMB78,939,000 and RMB6,774,000 respectively. These amounts have been calculated using the subsidiary's results.
3. Acquisition of Kerui PM
   On 30 September 2016, the CMIG PM Group acquired 51% equity interest of Kerui PM from a third party at a cash consideration of RMB235,138,000 and at that time obtained control of Kerui PM.
   The acquired business contributed revenue of RMB96,313,872 and net profit of RMB6,675,521 to the CMIG PM Group for the period from the acquisition date to 31 December 2016.
   If the acquisition had occurred on 1 January 2016, combined pro-forma revenue and net profit for the year ended 31 December 2016 would have been increased by RMB217,105,331 and RMB16,482,656 respectively. These amounts have been calculated using the subsidiary's results.

- II-95 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. For the year ended 31 December 2017

		Shenzhen	Chongqing	Shandong
		Longcheng	Haitai	Honest	Shenheping	Da'an	Xi'an Jintian	Total
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
		(a)	(b)	(c)	(d)	(e)	(f)
Purchase consideration in cash	361,816			168,946				94,480		51,100		18,000		36,626		18,000
Recognised amounts of identifiable assets acquired and liabilities assumed
Cash and cash equivalents	176,794			54,264				35,134		8,248		12,996		8,529		295,965
Trade receivables	134,276			94,546				70,793		3,538		386		23,301		326,840
Prepayments, deposits and other
receivables	56,699			16,708				100,870		25,619		2,059		30,937		232,892
Financial assets at fair value through profit
or loss	-	-	10,000		-	-	-	10,000
Inventories	116			686				90		3		158		224		1,277
Property, plant and equipment (Note 14)	9,424			104,112				4,984		1,074		271		1,374		121,239
Intangible assets (Note 16)	158,467			54,100				109,743		22,036		3,213		12,323		359,882
Investments accounted for using the equity
method (Note 17)	20,055			-	-	-	-	-	20,055
Trade and other payables	(255,030)		(103,789)			(96,229)	(38,006)	(9,442)	(25,230)	(527,726)
Dividend payable	(86,681)		-	-	-	-	(9,846)	(96,527)
Borrowings	-	(95,665)			-	-	-	-	(95,665)
Deferred income tax liabilities	(37,652)		(15,378)			(27,436)	(5,509)	(803)	(3,074)	(89,852)
Net identifiable assets acquired	176,468			109,584				207,949		17,003		8,838		38,538		558,380
Non-controlling interests	(59,620)		(54,421)			(142,672)	(6,529)	(1,643)	(18,883)	(283,768)
Goodwill (Note 16)	244,968			113,783				29,203		40,626		10,805		16,971		456,356
Net assets acquired	361,816			168,946				94,480		51,100		18,000		36,626		730,968
Outflow of cash to acquire subsidiaries, net of cash acquired
		Shenzhen	Chongqing	Shandong
		Longcheng	Haitai	Honest	Shenheping	Da'an	Xi'an Jintian	Total
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
		(a)	(b)	(c)	(d)	(e)	(f)
Cash consideration
- Paid by the Remaining Shareholder	361,816			168,946				94,480		-	-	36,626		661,868
- Paid by the CMIG PM Group	-	-	-	51,100		18,000		-	69,100
Less: Cash and cash equivalents acquired	(176,794)		(54,264)			(35,134)	(8,248)	(12,996)	(8,529)	(295,965)
Net outflow of cash - investing activities	185,022			114,682				59,346		42,852		5,004		28,097		435,003

- II-96 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Acquisition of Shenzhen Longcheng
   On 1 January 2017, the CMIG PM Group acquired 70% equity interest of Shenzhen Longcheng and its subsidiaries from a third party at a cash consideration of RMB361,816,000 and obtained control of Shenzhen Longcheng.
   The acquired business contributed revenue of RMB692,242,000 and net profit of RMB41,297,000 to the CMIG PM Group for the period from the acquisition date to 31 December 2017.
2. Acquisition of Chongqing Haitai
   On 30 April 2017, the CMIG PM Group acquired 51% equity interest of Chongqing Haitai from a third party at a cash consideration of RMB168,946,000 and obtained control of Chongqing Haitai.
   The acquired business contributed revenue of RMB150,798,000 and net profit of RMB11,776,000 to the CMIG PM Group for the period from the acquisition date to 31 December 2017.
   If the acquisition had occurred on 1 January 2017, combined pro-forma revenue and net profit for the year ended 31 December 2017 would have been increased by RMB65,937,000 and RMB3,733,000 respectively. These amounts have been calculated using the subsidiary's results.
3. Acquisition of Shandong Honest
   On 30 September 2017, the CMIG PM Group acquired 35% equity interest of Shandong Honest from a third party at a cash consideration of RMB94,480,477. The CMIG PM Group entered into an acting in concert agreement with the other shareholders who agreed to align their votes with the CMIG PM Group's in the shareholders' meeting of the subsidiary.
   The acquired business contributed revenue of RMB29,072,000 and net loss of RMB853,000 to the CMIG PM Group for the period from the acquisition date to 31 December 2017.
   If the acquisition had occurred on 1 January 2017, combined pro-forma revenue and net profit for the year ended 31 December 2017 would have been increased by RMB78,091,000 and RMB8,765,000 respectively. These amounts have been calculated using the subsidiary's results.
   On 31 May 2018, the acting in concert agreement was terminated by the parties, and the CMIG PM Group lost control over Shandong Honest. Therefore after Shandong Honest became an associate of the CMIG PM Group, and was reclassified to investment accounted for using equity method (Note 17).
4. Acquisition of Shenheping
   On 31 October 2017, Shanghai Richtech acquired 61.6% equity interest of Shenheping from a third party at a cash consideration of RMB51,100,000 and obtained control of Shenheping.
   The acquired business contributed revenue of RMB9,459,000 and net profit of RMB463,000 to the CMIG PM Group for the period from the acquisition date to 31 December 2017.
   If the acquisition had occurred on 1 January 2017, combined pro-forma revenue and net profit for the year ended 31 December 2017 would have been increased by RMB27,667,000 and RMB1,670,000 respectively. These amounts have been calculated using the subsidiary's results.

- II-97 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Acquisition of Da'an
   On 30 November 2017, Kerui PM acquired 90% equity interest of Da'an from a third party at a cash consideration of RMB18,000,000 and obtained control of Da'an.
   The acquired business contributed revenue of RMB2,265,000 and net profit of RMB525,000 to the CMIG PM Group for the period from the acquisition date to 31 December 2017.
   If the acquisition had occurred on 1 January 2017, combined pro-forma revenue and net profit for the year ended 31 December 2017 would have been increased by RMB26,432,000 and RMB5,545,000 respectively. These amounts have been calculated using the subsidiary's results.
2. Acquisition of Xi'an Jintian
   On 6 December 2017, the CMIG PM Group acquired 51% equity interest of Xi'an Jintian from a third party at a cash consideration of RMB36,625,948 and obtained control of Xi'an Jintian.
   The acquired business contributed revenue of RMB5,607,000 and net profit of RMB366,000 to the CMIG PM Group for the period from the acquisition date to 31 December 2017.
   If the acquisition had occurred on 1 January 2017, combined pro-forma revenue and net profit for the year ended 31 December 2017 would have been increased by RMB38,525,000 and RMB5,087,000 respectively. These amounts have been calculated using the subsidiary's results.

1. For the year ended 31 December 2018
   Purchase consideration in cash
   Recognised amounts of identifiable assets acquired and liabilities assumed
   Cash and cash equivalents Trade receivables Inventories
   Property, plant and equipment (Note 14) Intangible assets (Note 16)
   Trade and other payables Deferred income tax liabilities
   Net identifiable assets acquired Non-controlling interests Goodwill (Note 16)
   Net assets acquired
   Outflow of cash to acquire subsidiary, net of cash acquired
   Cash consideration

- Paid by the CMIG PM Group

Less: Cash and cash equivalent acquired

Chongqing Weishi

RMB'000

20,796

5,940

18,161

102

559

6,147

(5,330)

(1,266)

24,313

(11,975)

8,458

20,796

20,796

(5,940)

Net outflow of cash - investing activities	14,856

- II-98 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Acquisition of Chongqing Weishi
   On 1 January 2018, Chongqing Haitai acquired 51% equity interest of Chongqing Weishi from a third party at a cash consideration of RMB20,796,000. Since the CMIG PM Group holds 51% equity interest of Chongqing Haitai, the percentage of equity interest of Chongqing Weishi held by the CMIG PM Group is 26%.
   The acquired business contributed revenue of RMB8,809,000 and net profit of RMB1,597,000 to the CMIG PM Group for the period from the acquisition date to 31 December 2018.

1. For the nine months ended 30 September 2019

Purchase consideration in cash

Recognised amounts of identifiable assets acquired and liabilities assumed

Cash and cash equivalents

Trade receivables

Prepayments, deposits and other receivables

Inventory

Property, plant and equipment (Note 14)

Intangible assets (Note 16)

Trade and other payables

Deferred income tax liabilities

Net identifiable assets acquired

Non-controlling interests

Goodwill (Note 16)

Net assets acquired

Outflow of cash to acquire subsidiary, net of cash acquired

Cash consideration

- Paid by the CMIG PM Group

Less: Cash and cash equivalent acquired

Net outflow of cash - investing activities

1. Acquisition of Changzhou Jiafeng

Changzhou Jiafeng

RMB'000

19,600

12,385

1,285

6,653

62

1,321

7,333

(6,815)

(2,005)

20,219

(6,066)

5,447

19,600

19,600

(12,385)

7,215

On 31 January 2019, Shanghai Richtech acquired 70% equity interest of Changzhou Jiafeng from a third party at a cash consideration of RMB19,600,000. Since the CMIG PM Group holds 67% equity interest of Shanghai Richtech, the percentage of equity interest of Changzhou Jiafeng held by the CMIG PM Group is 46.9%.

The acquired business contributed revenue of RMB12,276,000 and net profit of RMB1,279,000 to the CMIG PM Group for the period from the acquisition date to 30 September 2019.

- II-99 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

The goodwill recognised on each of the acquisitions of the CMIG PM Group during the Track Record Period represented the excess of the purchase consideration over the fair value of the net identifiable assets acquired of CMIG PM acquisition companies at the date of acquisition, and was attributable to the acquired market shares and economies of scale expected to be derived from combining with the operations of the CMIG PM Group. None of the goodwill recognised is expected to be deductible for income tax purposes.

31 ASSETS CLASSIFIED AS HELD FOR DISPOSAL

As mentioned in Notes 1.2 (11) and 34, pursuant to the agreement for the Proposed VSA Transaction entered into on 25 September 2019, on 11 December 2019, the CMIG PM Group disposed of its entire 51% equity interest in Kerui PM to New CMIG PM, a company newly set up by the Remaining Shareholder and the Vendor. Accordingly, the assets and liabilities attributable to Kerui PM as at 30 September 2019, as set out below, were classified to assets classified as held for disposal and liabilities directly associated with assets classified as hold for disposal on the combined financial position of the CMIG PM Group as at 30 September 2019.

Assets classified as held for disposal

Property, plant and equipment Right-of-use assets Investment properties Intangible assets

Financial assets at fair value through other comprehensive income Deferred income tax assets

Prepayments - non-current Inventories

Trade receivables

Prepayments, deposits and other receivables

Loan and interest receivables due from the controlling shareholder Financial assets at fair value through profit or loss

Cash and cash equivalents

Total assets of the disposal group

Liabilities directly associated with assets classified as held for disposal

Long-term borrowing

Deferred income tax liabilities

Trade and other payables

Dividend payable

Contract liabilities

Short-term borrowing

Lease liabilities - current

Current income tax liabilities

Total liabilities of the disposal group

Non-controlling interest

Net assets of the CMIG PM Group attributable to the disposal group

As at

30 September 2019

RMB'000

52,201

116

95,912

284,005

5,025

5,030

113,452

13

245,650

68,502

1,379,105

44,000

102,055

2,395,066

(4,000)

(24,813)

(439,074)

(108,072)

(42,828)

(1,455,560)

(136)

(1,479)

(2,075,962)

(75,976)

243,128

- II-100 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

32 RELATED PARTY TRANSACTIONS

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control, common significant influence or joint control.

The owners, members of key management and their close family members of the CMIG PM Group are also considered as related parties. In the opinion of the Directors, the related party transactions were carried out in the normal course of business and at terms negotiated between the CMIG PM Group and the respective related parties.

The property management services were provided to related companies based on mutually agreed terms which are comparable to the terms granted to other third parties.

The interests 3.7% to 6.7% were charged based on the interest rates as agreed with related parties. The details of the terms on balances with related parties are set out in Note 21.

Save as disclosed in Note 21 in the combined financial information, the following are the related parties and their transactions and balances with the CMIG PM Group during the Track Record Period.

(a)	Names and relationship with related parties
	Name	Relationship
	China Minsheng Investment Corp., Ltd.	Ultimate controlling shareholder
	("CMIG") 中國民生投資集團有限責任公司
	CMIG Futurelife Holdings Group Company	Immediate controlling shareholder of the
	Limited (the "Remaining Shareholder")	Company
	中民未來控股集團有限公司
	Subsidiaries and affiliated companies of CMIG	Beneficially owned by the same ultimate
		controlling shareholder
	Non-controlling shareholders of subsidiaries	Non-controlling shareholders of subsidiaries
		that have significant influence on significant
		subsidiaries of the CMIG PM Group

- II-101 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Transactions with related parties

							Nine months ended
	Year ended 31 December		30 September
	2016		2017		2018	2018		2019
	RMB'000	RMB'000	RMB'000		RMB'000	RMB'000
						(Unaudited)
Ultimate controlling
shareholder
- Revenue from provision of
property management
service (i)	13,835		3,530		5,092	4,166		12,812
Immediate controlling
shareholder of the company
- Revenue from provision of
property management
service (i)	3,334		5,006		7,894	5,055		3,201
- Interest income on loans
(ii)	25,471		100,758		160,369	112,353		98,849
- Interest income from cash
pool	669		5,136		6,693	4,546		4,933
- Grant of loans (ii)	(1,000,000)	(1,994,800)	-		-	-
- Repayments of loans (ii)	73,000		179,000		462,000	359,000		398,000

Companies beneficially owned by the same ultimate controlling shareholder

• Revenue from provision of property management

service (i)	1,411	10,553	12,968		8,790	12,802
- Issue of ABS (ii)	-	778,000		-	-		-
- Repayments of ABS (ii)	-		-	(279,000)	-		-
- Purchase of outsourcing
services (i)	5,284	12,878	21,175		16,079	6,836

- II-102 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. Balances with related parties

								As at
			As At 31 December			30 September
	2016		2017		2018	2019
	RMB'000		RMB'000	RMB'000		RMB'000
Ultimate controlling
shareholder
- Trade receivables	9,075		1,202		4,760	365
Immediate controlling
shareholder of the
company
- Trade receivables	1,816		90		2,833	4,515
- Other receivables	78,992		268,937		156,567	123,746
- Loans and interests
receivables due from the
Remaining Shareholder	1,056,208		2,762,347		2,282,158	464,092
Companies beneficially
owned by the same
ultimate controlling
shareholder
- Trade Receivables	2,397		7,711		7,187	850
- Financial instruments
with guaranteed
principal and return	33,000		50,000		-		-
- Prepayments	-	347		64		-
- Trade payable	2,584		2,939		2,074	12
- Other payable	89		1,274		2,727	2,388
Non-controlling shareholders
of subsidiaries
- Other receivables	-	4,500		2,726	4,500
- Other payable	99,542		75,614		58,992		-
Presented on balance sheet
as:
Trade receivables (Note 19)	13,288		9,003		14,780	5,730
Other receivables (Note 20)	78,992		273,437		159,293	128,246
Loans and interests
receivables due from the
Remaining Shareholder
(Note 21)	1,056,208		2,762,347		2,282,158	464,092
Trade payables (Note 25)	2,584		2,939		2,074	12
Other payable (Note 25)	99,631		76,888		61,719	2,388

The provision of services, sales and purchases were made with the related parties during the ordinary course of business of the CMIG PM Group and on mutually agreed commercial terms.

- II-103 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

33 DIRECTORS' BENEFITS AND INTERESTS

Until 30 September 2019, the following directors and senior managements were appointed as directors of

CMIG PM:

Directors

Mr. Xu Zhigang Mr. Liu Hanbin Mr. Zhanglinhui Mrs. Zhanghua

1. Directors' emoluments
   The directors of CMIG PM received emoluments from the CMIG PM Group (in their role as senior management and employee before their appointment as directors of CMIG PM) during the Track Record Period are as follows:

								Housing
							allowances
								and
					contributions
								to a
							retirement
	Fees		Salaries	Bonus		scheme	Total
	RMB'000		RMB'000	RMB'000		RMB'000	RMB'000
Year ended 31 December 2016	-	823		818		352		1,993
Year ended 31 December 2017	-	890		675		206		1,771
Year ended 31 December 2018	-	1,227		1,653		333		3,213
Nine months ended
30 September 2019	-	1,006		930		275		2,211
Nine months ended 30
September 2018 (Unaudited):	-	897		670		241		1,808

34 EVENTS AFTER THE BALANCE SHEET DATE

As mentioned in Note 1.2, in connection with the Proposal VSA Transaction, on 11 December 2019, the CMIG PM Group disposed of its entire 51% equity interest in Kerui PM to New CMIG PM, a company newly set up by the Remaining Shareholder and the Vendor, being the existing shareholders of CMIG PM, at a cash consideration of RMB235,138,000. Further details of the impact of disposal of Kerui PM to the combined financial statements for the Track Record Period are set out in Note 31. The effect of the disposal to the financial information of the CMIG PM Group, on a pro forma basis, assuming the disposal had taken effect at the beginning of the Track Record Period is set out in section III. Additional Financial Information of the Disposal of Kerui PM.

- II-104 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. ADDITIONAL FINANCIAL INFORMATION IN CONNECTION WITH THE DISPOSAL OF KERUI PM

The effect of the disposal of Kerui PM (Note 34) to the financial information of the CMIG PM Group, on a pro forma basis, assuming the disposal of Kerui PM (Notes 31 and 34) had taken effect at the beginning of the Track Record Period is set out below.

1. For the year ended 31 December 2016
   Comprehensive income for the year ended 31 December 2016

					The CMIG
					PM Group
	The CMIG			excluding
	PM Group	Kerui PM	Kerui PM
	RMB'000	RMB'000	RMB'000
Revenue	809,814		188,851		620,963
Cost of sales	(680,561)	(159,044)	(521,517)
Gross profit	129,253		29,807		99,446
Selling and marketing expenses	(1,289)	-	(1,289)
Administrative expenses and
impairment losses/reversal of
losses on financial assets	(63,383)	(12,096)	(51,287)
Other income - net	12,234		286		11,948
Finance costs - net	(2,802)	(790)	(2,012)
Share of profits of investments
accounted for using the equity
method	10,647		-	10,647
Profit before income tax	84,660		17,207		67,453
Income tax expense	(21,132)	(4,276)	(16,856)
Profit and total comprehensive
income for the year	63,528		12,931		50,597
Profit and total comprehensive
income attributable to:
- Owners of CMIG PM	51,485		6,676		44,809
- Non-controlling interests	12,043		6,255		5,788
	63,528		12,931		50,597

- II-105 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
Financial position as at 31 December 2016
						The CMIG
						PM Group
		The CMIG				excluding
		PM Group		Kerui PM		Kerui PM
		RMB'000		RMB'000		RMB'000
Assets
Non-current assets
Intangible assets		879,467	304,490	574,977
Loans and interests receivables due
from the controlling shareholder	840,000		-	840,000
Prepayments, deposits and other
receivables		46,837	46,624	213
Other non-current assets		252,204		137,086		115,118
Total non-current assets		2,018,508	488,200	1,530,308
Current assets
Cash and cash equivalents		165,859	81,351	84,508
Loans and interests receivables due
from the controlling shareholder	216,208		-	216,208
Trade receivables, prepayments,
deposits and other receivables	566,237	262,334	303,903
Other current assets		126,077	14,196	111,881
Total current assets		1,074,381	357,881	716,500
Total assets		3,092,889	846,081	2,246,808
Liabilities
Non-current liabilities
Long-term borrowings		962,300	22,300	940,000
Other non-current liabilities		75,311	33,344	41,967
Total non-current liabilities	1,037,611	55,644	981,967
Current liabilities
Trade and other payables		641,030	381,574	259,456
Borrowings		94,900	7,900	87,000
Other current liabilities		173,578	98,590	74,988
Total current liabilities		909,508		488,064		421,444
Total liabilities		1,947,119	543,708	1,403,411
Total equity		1,145,770	302,373	843,397

- II-106 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. For the year ended 31 December 2017
   Comprehensive income for the year ended 31 December 2017

										The CMIG
										PM Group
		The CMIG							excluding
		PM Group	Kerui PM	Adjustment	Kerui PM
		RMB'000	RMB'000	RMB'000	RMB'000
Revenue	3,190,745		807,464		278				2,383,559
Cost of sales	(2,693,958)	(687,383)	-	(2,006,575)
Gross profit	496,787		120,081		278				376,984
Selling and marketing expenses	(16,308)	-	-	(16,308)
Administrative expenses and
impairment losses/reversal
of losses on financial assets	(247,492)	(58,972)	(278)		(188,798)
Other income - net	25,882		1,786		-	24,096
Finance (costs)/income - net	(1,566)	(2,601)	-	1,035
Share of profits of investments
accounted for using the
equity method		14,788		-		-			14,788
Profit before income tax	272,091		60,294		-	211,797
Income tax expense		(60,605)	(14,761)	-	(45,844)
Profit and total comprehensive
income for the year/period	211,486		45,533		-	165,953
Profit and total comprehensive
income attributable to:
- Owners of the Company	142,555		20,326		-	122,229
- Non-controlling interests	68,931		25,207		-		43,724
		211,486		45,533		-	165,953

Note: Adjustments are intercompany transactions and balances eliminated between Kerui PM and the

CMIG PM Group.

- II-107 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
Financial position as at 31 December 2017
										The CMIG
										PM Group
		The CMIG							excluding
		PM Group	Kerui PM	Adjustment	Kerui PM
		RMB'000	RMB'000	RMB'000	RMB'000
Assets
Non-current assets
Intangible assets		1,639,405		305,990		-	1,333,415
Loans and interests receivables
due from the controlling
shareholder		2,268,800		1,620,800		-	648,000
Prepayments, deposits and other
receivables		77,373		74,608		-	2,765
Other non-current assets		462,295		172,403		-		289,892
Total non-current assets		4,447,873		2,173,801		-	2,274,072
Current assets
Cash and cash equivalents		544,302		145,444		-	398,858
Loans and interests receivables
due from the controlling
shareholder		493,547		312,048		-	181,499
Trade receivables, prepayments,
deposits and other receivables	1,346,662		311,959		104				1,034,807
Other current assets		195,455		35,370		-	160,085
Total current assets		2,579,966		804,821		104				1,775,249
Total assets		7,027,839		2,978,622		104				4,049,321
Liabilities
Non-current liabilities
Long-term Borrowings		2,497,761		1,749,480		-	748,281
Other non-current liabilities		159,156		30,765		-		128,391
Total non-current liabilities		2,656,917		1,780,245		-	876,672
Current liabilities
Trade and other payables		1,290,452		486,749		104				803,807
Borrowings		383,061		261,560		-	121,501
Other current liabilities		400,378		103,041		-	297,337
Total current liabilities		2,073,891		851,350		104				1,222,645
Total liabilities		4,730,808		2,631,595		104				2,099,317
Total equity		2,297,031		347,027		-	1,950,004

Note: Adjustments are intercompany transactions and balances eliminated between Kerui PM and the

CMIG PM Group.

- II-108 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. For the year ended 31 December 2018
   Comprehensive income for the year ended 31 December 2018

										The CMIG
										PM Group
		The CMIG							excluding
		PM Group	Kerui PM	Adjustment	Kerui PM
		RMB'000	RMB'000	RMB'000	RMB'000
Revenue	4,069,769		946,465		2,458				3,125,762
Cost of sales	(3,409,758)	(792,960)	(1,632)		(2,618,430)
Gross profit	660,011		153,505		826				507,332
Selling and marketing expenses	(15,725)	-	-	(15,725)
Administrative expenses and
impairment losses/reversal
of losses on financial assets	(334,097)	(68,493)	(826)		(266,430)
Other income - net	20,097		3,101		-	16,996
Finance costs - net	(6,780)	(6,619)	-	(161)
Share of profits of investments
accounted for using the
equity method		21,708		-		-			21,708
Profit before income tax	345,214		81,494		-	263,720
Income tax expense		(85,689)	(21,714)	-	(63,975)
Profit and total comprehensive
income for the year	259,525		59,780		-	199,745
Profit and total comprehensive
income attributable to:
- Owners of the Company	157,705		26,731		-	130,974
- Non-controlling interests	101,820		33,049		-		68,771
		259,525		59,780		-	199,745

Note: Adjustments are intercompany transactions and balances eliminated between Kerui PM and the

CMIG PM Group.

- II-109 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
Financial position as at 31 December 2018
										The CMIG
										PM Group
		The CMIG							excluding
		PM Group	Kerui PM	Adjustment	Kerui PM
		RMB'000	RMB'000	RMB'000	RMB'000
Assets
Non-current assets
Intangible assets		1,459,760		293,628		-	1,166,132
Loans and interests receivables
due from the controlling
shareholder		1,362,800		1,362,800		-	-
Prepayments, deposits and other
receivables		96,536		93,547		-	2,989
Other non-current assets		549,400		178,718		-		370,682
Total non-current assets		3,468,496		1,928,693		-	1,539,803
Current assets
Cash and cash equivalents		619,190		157,539		-	461,651
Loans and interests receivables
due from the controlling
shareholder		919,358		330,551		-	588,807
Trade receivables, prepayments,
deposits and other receivables	1,322,982		348,912		4,975				979,045
Other current assets		160,433		34,014		-	126,419
Total current assets		3,021,963		871,016		4,975				2,155,922
Total assets		6,490,459		2,799,709		4,975				3,695,725
Liabilities
Non-current liabilities
Long-term borrowings		1,893,920		1,458,920		-	435,000
Other non-current liabilities		114,762		27,291		-		87,471
Total non-current liabilities		2,008,682		1,486,211		-	522,471
Current liabilities
Trade and other payables		1,348,108		517,838		4,975				835,245
Borrowings		442,641		290,560		-	152,081
Other current liabilities		299,369		111,866		-	187,503
Total current liabilities		2,090,118		920,264		4,975				1,174,829
Total liabilities		4,098,800		2,406,475		4,975				1,697,300
Total equity		2,391,659		393,234		-	1,998,425

Note: Adjustments are intercompany transactions and balances eliminated between Kerui PM and the

CMIG PM Group.

- II-110 -

APPENDIX II

ACCOUNTANT'S REPORT ON THE CMIG PM GROUP

1. For the nine months ended 30 September 2019
   Comprehensive income for the nine months ended 30 September 2019

										The CMIG
										PM Group
		The CMIG							excluding
		PM Group	Kerui PM	Adjustment	Kerui PM
		RMB'000	RMB'000	RMB'000	RMB'000
Revenue	3,124,718		748,608		1,081				2,377,191
Cost of sales	(2,623,520)	(628,597)	(1,081)		(1,996,004)
Gross profit	501,198		120,011		-		381,187
Selling and marketing expenses	(8,593)	-	-	(8,593)
Administrative expenses and
impairment losses/reversal
of losses on financial assets	(263,754)	(66,467)	-	(197,287)
Other income - net	35,617		12,407		-	23,210
Finance (costs)/income - net	(3,599)	(7,426)	-	3,827
Share of profits of investments
accounted for using the
equity method		25,777		-		-			25,777
Profit before income tax	286,646		58,525		-	228,121
Income tax expense		(67,888)	(15,147)	-	(52,741)
Profit and total comprehensive
income for the period	218,758		43,378		-	175,380
Profit and total comprehensive
income attributable to:
- Owners of the Company	147,936		21,110		-	126,826
- Non-controlling interests	70,822		22,268		-		48,554
		218,758		43,378		-	175,380

Note: Adjustments are intercompany transactions and balances eliminated between Kerui PM and the

CMIG PM Group.

- II-111 -

APPENDIX II	ACCOUNTANT'S REPORT ON THE CMIG PM GROUP
Financial position as at 30 September 2019
							The CMIG
							PM Group
			The CMIG			excluding
			PM Group	Adjustment	Kerui PM
			RMB'000	RMB'000	RMB'000
Assets
Non-current assets			1,141,488		-	1,141,488
Intangible assets
Prepayments, deposits and other
receivables			6,949		-	6,949
Other non-current assets			465,565		-		465,565
Total non-current assets			1,614,002		-		1,614,002
Current assets			248,092		-	248,092
Cash and cash equivalents
Loans and interests receivables due from
the controlling shareholder			464,092		-	464,092
Trade receivables, prepayments, deposits
and other receivables			1,138,987		-	1,138,987
Other current assets			166,133		-		166,133
			2,017,304		-	2,017,304
Assets classified as held for disposal	2,395,066		(2,395,066)	-
Total current assets			4,412,370		(2,395,066)	2,017,304
Total assets			6,026,372		(2,395,066)	3,631,306
Liabilities
Non-current liabilities			207,806		-	207,806
Long-term borrowings
Other non-current liabilities			78,433		-		78,433
Total non-current liabilities			286,239		-	286,239
Current liabilities			840,037		1,627		841,664
Trade and other payables
Borrowings			267,617		-	267,617
Other current liabilities			198,610		-	198,610
			1,306,264		1,627		1,307,891
Liabilities directly associated with assets
classified as held for disposal		2,075,962		(2,075,962)	-
Total current liabilities			3,382,226		(2,074,335)	1,307,891
Total liabilities			3,668,465		(2,074,335)	1,594,130
Total equity			2,357,907		(320,731)	2,037,176

Note: Adjustments are the held for disposal assets and liabilities attributable to Kerui PM, as well as intercompany transactions and balances eliminated between Kerui PM and the CMIG PM Group.

- II-112 -

APPENDIX IIACCOUNTANT'S REPORT ON THE CMIG PM GROUP

IV SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by CMIG PM or any of its subsidiaries in respect of any period subsequent to 30 September 2019 and up to the date of this report.

No dividend or distribution has been declared or made by CMIG PM or any of the companies now comprising the CMIG PM Group in respect of any period subsequent to 30 September 2019.

- II-113 -

APPENDIX III	UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE ENLARGED GROUP

1. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

Pursuant to the CMIG PM Agreement, the Purchaser has conditionally agreed to acquire, and the Vendor has conditionally agreed to dispose of the 60% equity interest in

CMIG PM.

The accompanying unaudited pro forma financial information of the Enlarged Group (the "Unaudited Pro Forma Financial Information") has been prepared to illustrate the effect of the CMIG PM Completion on the financial information of the Group as if the CMIG PM Completion had taken place on 30 June 2019 for the unaudited pro forma consolidated balance sheet and 1 January 2018 for the unaudited pro forma consolidated statement of comprehensive income and the unaudited pro forma consolidated statement of cash flows, respectively.

The Unaudited Pro Forma Financial Information has been prepared by the Directors for illustrative purposes only and, because of its hypothetical nature, it may not give a true picture of the financial position, net tangible assets, financial performance and cash flows of the Enlarged Group had the CMIG PM Completion taken place as at 30 June 2019 or 1 January 2018, where applicable, or any future date.

The Unaudited Pro Forma Financial Information should be read in conjunction with other financial information included elsewhere in this circular.

- III-1 -

APPENDIX III	UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE ENLARGED GROUP

THE UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET OF THE

ENLARGED GROUP AS AT 30 JUNE 2019

					Pro forma adjustments
					Exclusion								The
	The	CMIG PM	of Kerui								Enlarged
	Group	Group	PM	Other adjustments			Group
	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
	Note 1	Note 2(a)	Note 2(b)	Note 6	Note 3	Note 5
Assets
Non-current assets
Property, plant and
equipment	162,159		83,599		-	-	10,516			-	256,274
Right-of-use assets	23,628		3,941		-	-	-	-	27,569
Investment properties	-	56		-	-	1,129			-	1,185
Other intangible assets	412,069		301,711		-	-	301,820			-	1,015,600
Goodwill	1,361,906		839,777		-	-	(152,689)		-	2,048,994
Deferred income tax
assets	56,017		14,354		-	-	-	-	70,371
Investments accounted
for using the equity
method	254,658		352,765		-	-	78,245			-	685,668
Financial assets at fair
value through other
comprehensive income	-	10,850		-	-	-	-	10,850
Financial assets at fair
value through profit or
loss	411		-	-	-	-	-	411
Prepayments, deposits
and other receivables	-		6,949		-		-		-			-		6,949
Total non-current assets	2,270,848		1,614,002		-	-	239,021			-	4,123,871

- III-2 -

APPENDIX III			UNAUDITED PRO FORMA FINANCIAL
		INFORMATION OF THE ENLARGED GROUP
					Pro forma adjustments
					Exclusion								The
	The		CMIG PM	of Kerui								Enlarged
	Group		Group	PM	Other adjustments			Group
	RMB'000		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
	Note 1		Note 2(a)	Note 2(b)	Note 6	Note 3	Note 5
Current assets
Inventories	18,182	3,260		-	-	-	-	21,442
Trade and other
receivables	1,808,165	1,138,987		235,138		-	-	-	3,182,290
Loans and interests
receivables due from
the Remaining
shareholder	-	464,092		-	-	-	-	464,092
Financial assets at fair
value through profit or
loss	238,466	152,194		-	-	-	-	390,660
Cash and cash
equivalents	4,349,720	248,092		-	-	(468,000)		-	4,129,812
Restricted cash	4,247		10,679		-		-		-			-		14,926
	6,418,780	2,017,304		235,138		-	(468,000)		-	8,203,222
Asset classified as held
for disposal	-		2,395,066		(2,396,693)	1,627		-	-	-
Total current assets	6,418,780		4,412,370		(2,161,555)	1,627		(468,000)		-	8,203,222
Total assets	8,689,628		6,026,372		(2,161,555)	1,627		(228,979)		-	12,327,093
Equity
Share capital	1,333,334	1,400,000		-	-	(1,400,000)		-	1,333,334
Reserves	3,248,271	382,601		-	-	(382,601)		-	3,248,271
Retained earnings	919,870		229,487		(9,617)	-	(219,870)		(3,886)	915,984
	5,501,475		2,012,088		(9,617)	-	(2,002,471)		(3,886)	5,497,589
Non-controlling interests	271,208		345,819		(75,976)	-	603,115			-	1,144,166
Total equity	5,772,683		2,357,907		(85,593)	-	(1,399,356)		(3,886)	6,641,755

- III-3 -

APPENDIX III			UNAUDITED PRO FORMA FINANCIAL
		INFORMATION OF THE ENLARGED GROUP
					Pro forma adjustments
					Exclusion								The
	The		CMIG PM	of Kerui								Enlarged
	Group		Group	PM	Other adjustments			Group
	RMB'000		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
	Note 1		Note 2(a)	Note 2(b)	Note 6	Note 3	Note 5
Liabilities
Non-current liabilities
Borrowings	6,600	207,806		-	-	-	-	214,406
Lease liabilities	10,849	2,874		-	-	-	-	13,723
Financial liabilities at fair
value through profit or
loss	62,179		-	-	-	-	-	62,179
Deferred income tax
liabilities	90,444	75,559		-	-	78,377			-	244,380
Other payables	19,045		-	-	-	-	-	19,045
Total non-current
liabilities	189,117	286,239		-	-	78,377			-	553,733
Current liabilities
Trade and other payables	1,860,062	894,701		-	1,627		1,092,000			5,181		3,853,571
Contract liabilities	515,346	102,502		-	-	-	-	617,848
Current income tax
liabilities	298,334	40,136		-	-	-	(1,295)	337,175
Borrowings	40,150	267,617		-	-	-	-	307,767
Lease liabilities	13,936	1,308		-	-	-	-	15,244
	2,727,828	1,306,264		-	1,627		1,092,000			3,886		5,131,605
Liabilities directly
associated with assets
classified as held for
disposal	-		2,075,962		(2,075,962)	-	-	-	-
Total current liabilities	2,727,828		3,382,226		(2,075,962)	1,627		1,092,000			3,886		5,131,605
Total liabilities	2,916,945	3,668,465		(2,075,962)	1,627		1,170,377			3,886		5,685,338
Total equity and
8,689,628	6,026,372		(2,161,555)	1,627		(228,979)		-	12,327,093
liabilities

- III-4 -

APPENDIX III	UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE ENLARGED GROUP

THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME OF THE ENLARGED GROUP FOR THE YEAR ENDED 31 DECEMBER 2018

							Pro forma adjustments
			CMIG	Exclusion											The
	The	PM	of Kerui											Enlarged
	Group	Group	PM				Other adjustments				Group
	RMB'000	RMB'000	RMB'000		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
	Note 1	Note 2(a)	Note 2(c)		Note 7	Note 4	Note 5	Note 8
Revenue	3,376,749		4,069,769		(946,465)	2,458		-	-	-	6,502,511
Cost of sales	(2,086,808)	(3,409,758)	792,960		(1,632)	(8,578)	-	-	(4,713,816)
Gross profit	1,289,941		660,011		(153,505)	826		(8,578)	-	-	1,788,695
Selling and marketing
expenses	(45,951)	(15,725)	-		-	-	-	-	(61,676)
Administrative expenses	(302,246)	(318,350)	63,075		(826)	(1,916)	(5,181)	-	(565,444)
Net impairment losses on
financial assets	2,750		(15,747)	5,418			-	-	-	-	(7,579)
Other income	102,297		15,396		(1,639)		-	-	-	-	116,054
Other expenses	(1,828)	-	-		-	-	-	-	(1,828)
Other gains/(losses) - net	31,317		4,701		(1,462)		-	-	-	-	34,556
Operating profit	1,076,280		330,286		(88,113)		-	(10,494)	(5,181)	-	1,302,778
Finance income	-	168,435		(122,978)		-	-	-	-	45,457
Finance costs	(917)	(175,215)	129,597			-	-	-	-	(46,535)
Finance (expenses)/
income - net	(917)	(6,780)	6,619			-	-	-	-	(1,078)
Share of profits of
investments accounted for
using the equity method	-	21,708		-		-	-	-	-	21,708
Profit before income tax	1,075,363		345,214		(81,494)		-	(10,494)	(5,181)	-	1,323,408
Income tax expense	(264,484)	(85,689)	21,714			-	2,464		1,295		-	(324,700)
Profit and total
comprehensive income
for the year	810,879		259,525		(59,780)		-	(8,030)	(3,886)	-	998,708
Profit and total
comprehensive income
attributable to:
Shareholders of the
Company	801,045		157,705		(26,731)		-	(4,410)	(3,886)	(52,390)	871,333
Non-controlling interests	9,834		101,820		(33,049)		-	(3,620)	-	52,390			127,375
	810,879		259,525		(59,780)		-	(8,030)	(3,886)	-	998,708

- III-5 -

APPENDIX III	UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE ENLARGED GROUP

THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF CASH FLOWS OF THE ENLARGED GROUP FOR THE YEAR ENDED 31 DECEMBER 2018

			Pro forma adjustments
			CMIG PM	Exclusion of	Other	The Enlarged
	The Group	Group	Kerui PM	adjustment	Group
	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
	Note 1	Note 2(a)	Note 2(c)	Note 3
Cash flows from operating activities
Cash generated from operations	1,026,488		316,242		(127,500)		-	1,215,230
Income tax paid	(143,323)	(131,673)	56,877			-	(218,119)
Net cash generated from operating
activities	883,165		184,569		(70,623)		-	997,111
Cash flows from investing activities
Payments for property, plant and
equipment and other long term
properties	(19,234)	(24,022)	5,627			-	(37,629)
Payments for intangible assets other
than goodwill	(1,891)	(3,058)	-	-	(4,949)
Proceeds from sale of property, plant
and equipment and intangible
assets other than goodwill	1,242		20,367		(358)		-	21,251
Payments related to amounts due
from related parties	-	(58,636)	-	-	(58,636)
Repayments of the amounts due from
related parties	13,248		560,091		(229,000)		-	344,339
Cash advances to related parties	(3,643)	-	-	-	(3,643)
Acquisition of subsidiaries (net of
cash and cash equivalent acquired)	(116,402)	(14,856)	-	(69,142)	(200,400)
Increase in restricted bank deposits	(202)	-	-	-	(202)
Gains on forward foreign exchange
contracts	14,641		-	-	-	14,641
Payments for financial assets at fair
value through profit or loss	-	(1,571,132)	48,025			-	(1,523,107)
Proceeds from financial instruments
with guaranteed principal and
return	-	50,000		-	-	50,000
Payments for financial assets at fair
value through other comprehensive
income	-	(175)	-	-	(175)
Payment for acquisition of associates	-	(490)	-	-	(490)

- III-6 -

APPENDIX III	UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE ENLARGED GROUP
			Pro forma adjustments
			CMIG PM	Exclusion of	Other	The Enlarged
	The Group	Group	Kerui PM	adjustment	Group
	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
	Note 1	Note 2(a)	Note 2(c)	Note 3
Proceeds from sale of financial assets
at fair value through profit or loss	-	1,550,685		(49,000)		-	1,501,685
Decrease in cash pool	-	72,871		-	-	72,871
Interest received from the amounts
due from related parties	-	160,704		(123,687)		-	37,017
Interest received from financial assets
at fair value through profit or loss	-	6,002		(1,410)		-	4,592
Interest received from financial assets
at amortised cost	-	1,339		-	-	1,339
Net cash (used in)/generated from
investing activities	(112,241)	749,690		(349,803)		(69,142)	218,504
Cash flows from financing activities
Capital contribution from the
shareholders	1,072		-	-	-	1,072
Capital contribution from
non-controlling shareholders	-	5,636		-	-	5,636
Proceeds from issue of
ordinary shares	3,313,422		-	-	-	3,313,422
Proceeds from borrowings	-	28,000		-	-	28,000
Repayments of borrowings	(12,000)	(572,261)	261,560			-	(322,701)
Interest paid	(376)	(182,697)	137,657			-	(45,416)
Repayment of cash advances from
related parties	(19,549)	-	-	-	(19,549)
Principal elements of lease payments	-	(3,908)	245			-	(3,663)
Payments for leases liabilities -
interest	-	(577)	33			-	(544)
Dividends paid to the then
shareholders	(50,000)	-	-	-	(50,000)
Dividends paid to the then
shareholders in subsidiaries	-	(20,640)	-	-	(20,640)
Dividends paid to non-controlling
interests in subsidiaries	-	(112,924)	8,836			-	(104,088)
Listing expenses paid	(90,166)	-	-	-	(90,166)
Net cash generated from/(used in)
financing activities	3,142,403		(859,371)	408,331			-	2,691,363

- III-7 -

APPENDIX III	UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE ENLARGED GROUP
			Pro forma adjustments
			CMIG PM	Exclusion of	Other	The Enlarged
	The Group	Group	Kerui PM	adjustment	Group
	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
	Note 1	Note 2(a)	Note 2(c)	Note 3
Net increase / (decrease) in cash and
cash equivalents	3,913,327		74,888		(12,095)		(69,142)	3,906,978
Cash and cash equivalents at
beginning of year/period	879,771		544,302		(145,444)		(398,858)	879,771
Effect of exchange rate changes on
cash and cash equivalents	14,895		-	-	-	14,895
Cash and cash equivalents at end of
year/period	4,807,993		619,190		(157,539)		(468,000)	4,801,644

- III-8 -

APPENDIX III	UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE ENLARGED GROUP

Notes to the Unaudited Pro Forma Financial Information of the Enlarged Group

1. The amounts have been extracted from the unaudited consolidated balance sheet of the Group as at 30 June 2019 included in the published unaudited interim report of the Company for the six months ended 30 June 2019, and the audited consolidated statement of comprehensive income and the audited consolidated statement of cash flows of the Group for the year ended 31 December 2018 included in the published annual report of the Company for the year ended 31 December 2018.
2. (a) The amounts have been extracted from the audited combined statements of financial position of the CMIG PM Group as at 30 September 2019, and the audited combined statements of comprehensive income and the audited combined statements of cash flows of the CMIG PM Group for the year ended 31 December 2018, as set out in Appendix II of this circular, on which a qualified opinion has been issued. The audit opinions were qualified because the reporting accountant was unable to obtain sufficient and appropriate evidence and was unable to perform alternative procedures to satisfy themselves with respect to the recoverability of Kerui PM's loan and interest receivables due from the Remaining Shareholder as at 31 December 2018 and 30 September 2019. Consequently, the reporting accountant was unable to determine whether any adjustment to "loans and interests receivables from the controlling shareholder" on the combined statement of financial position of the CMIG PM Group as at 31 December 2018 with respect to Kerui PM's receivables from the Remaining Shareholder, and to "assets classified as held for disposal" on the combined statement of financial position of the CMIG PM Group as at 30 September 2019 where Kerui PM's receivables from the Remaining Shareholder were included, and the consequential impact to the combined statements of comprehensive income for the respective year/period then ended of the CMIG PM Group, was necessary. For details of the audit qualification, please refer to pages II-1 to II-5 of this circular. In consideration that the disposal of Kerui PM was completed at a fixed consideration of RMB235,138,000 on 11 December 2019, which is a pre-condition to the CMIG PM Completion, and thus the assets (including Kerui PM's loans and interest receivables due from the Remaining Shareholder, which is the subject matter of the qualified audit opinion as mentioned above), liabilities and financial results of Kerui PM had been excluded through the pro forma adjustments as described in 2(b) and 2(c) below, the Directors are of the opinion that the audit qualification does not have impact on the Unaudited Pro Forma Financial Information and the Unaudited Pro Forma Financial Information has been properly compiled in accordance with paragraph 4.29 of the Listing Rules, and with reference to Accounting Guideline 7 Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants.
3. 1. The assets and liabilities of Kerui PM had been accounted for as assets classified as held for disposal and liabilities directly associated with assets classified as held for disposal in the audited combined statements of financial position of the CMIG PM Group as at 30 September 2019, as set out in Appendix I to this circular. Pursuant to the terms of the CMIG PM Agreement, Kerui PM has been disposed of to New CMIG PM before the CMIG PM Completion as part of the Reorganisation. The adjustment represents the consideration receivable for the disposal of Kerui PM of RMB235,138,000 and the exclusion of the assets and liabilities of Kerui PM as included in the audited combined statement of financial position of the CMIG PM Group as at 30 September 2019.
   2. Pursuant to the terms of the CMIG PM Agreement, Kerui PM has been disposed of to New CMIG PM before the CMIG PM Completion as part of the Reorganisation. The adjustment represents the exclusion of the financial results and cash flows of Kerui PM which were included in the audited combined statement of comprehensive income and the audited combined statement of cash flows of the CMIG PM Group for the year ended 31 December 2018.
4. Upon the CMIG PM Completion, the CMIG PM will become a non-wholly-owned subsidiary of the Company, and the identifiable assets and liabilities of the CMIG PM Group (excluding Kerui PM) will be accounted for by the Group at their fair value in accordance with Hong Kong Financial Reporting Standard 3 (Revised) "Business Combination".
5. 1. For the purpose of preparing the Unaudited Pro Forma Financial Information, the Directors have estimated the fair values of the identifiable assets and liabilities of the CMIG PM Group

- III-9 -

APPENDIX III	UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE ENLARGED GROUP

(excluding Kerui PM) as at 30 September 2019 based on a valuation report dated 23 January 2020 prepared by Jones Lang LaSalle Corporate Appraisal and Advisory Limited (the "JLL").

	Note	RMB'000
Carrying amount of net assets of the CMIG PM Group		2,357,907
Consideration on disposal of Kerui PM	iii	235,138
Net assets of Kerui PM	iii	(320,731)
Less: goodwill recorded by the CMIG PM Group		(839,777)
Carrying amount of identifiable net assets of the CMIG
PM Group (excluding Kerui PM)		1,432,537
Fair value adjustments on
Property, plant and equipment		10,516
Investment properties		1,129
Customer relationship		301,820
Investments accounted for using the equity method		78,245
Recognition of deferred income tax liabilities arising from
the fair value adjustments		(78,377)
Total fair value of identifiable net assets of the CMIG
PM Group (excluding Kerui PM)	i	1,745,870
Non-controlling interests	ii	(872,958)
Total fair value of identifiable net assets of the CMIG
PM Group (excluding Kerui PM) attributable to the
60% equity interest acquired		872,912

1. The fair value of the identifiable net assets of the CMIG PM Group (excluding Kerui PM) is composed of the carrying amount of identifiable net assets of the CMIG PM Group (excluding Kerui PM) as at 30 September 2019, and the fair value adjustments on property, plant and equipment, investment properties, investments accounted for using the equity method and customer relationship arising from the business combination. The corresponding deferred income tax liabilities of RMB78,377,000 is measured at the tax rates that are expected to apply when the related taxable temporary difference are settled, which ranges from 15% to 25%, as applicable to the companies comprising the CMIG PM Group (excluding Kerui PM).
   The fair value of the identifiable assets and liabilities of the CMIG PM Group (excluding Kerui PM) as at 30 September 2019 was valued by JLL. With reference to the valuation report, the Directors estimate that: (i) the fair value adjustment on customer relationship is RMB301,820,000 which is based on multi-period excess earnings method; (ii) the fair value adjustment on property, plant and equipment is RMB10,516,000 which is based on the direct comparison method under the market approach; (iii) the fair value adjustment on investment properties is RMB1,129,000 which is based on the direct comparison method under the market approach and (iv) the fair value adjustment on investments accounted for using equity method is RMB78,245,000 which is based on the guideline public company method under market approach.
   The multi-period excess earnings method is a commonly adopted valuation method to value intangible assets including customer relationship that is considered as one of the core competence of business and contribute to cash flows in combination with other assets in a group. The direct comparison under the market approach is a commonly adopted valuation method to value property, plant and equipment and investment properties. The guideline public company method under market approach utilizes information on publicly-traded comparables that are the same or similar to the subject asset to arrive at an indication of value of investments accounted for using equity method.

- III-10 -

APPENDIX III	UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE ENLARGED GROUP

Since the fair values and the carrying amounts of the identifiable net assets of the CMIG PM Group (excluding Kerui PM) as at the CMIG PM Completion may be materially different from their respective values used in the preparation of the Unaudited Pro Forma Financial Information, the actual amounts of the assets and liabilities to be recorded in the consolidated financial statements of the Group upon CMIG PM Completion may be materially different from the amounts presented above and the differences may be significant.

1. The amount of non-controlling interests of RMB872,958,000 represents 40% of the total fair value of identifiable net assets of the CMIG PM Group (excluding Kerui PM) attributable to owners of the CMIG PM and respective non-controlling interests of the subsidiaries of CMIG PM (excluding Kerui PM). A reconciliation of the non-controlling interests of the CMIG PM Group (excluding Kerui PM) calculated as follows:

Total fair value of identifiable net assets of the CMIG PM Group (excluding Kerui PM)

Less: non-controlling interest of subsidiaries of the CMIG PM Group (excluding Kerui PM)

Fair value of identifiable net assets of the CMIG PM

Non-controlling interest of the CMIG PM

Non-controlling interest of subsidiaries of the CMIG PM Group (excluding Kerui PM)

Non-controlling interest of the CMIG PM Group (excluding Kerui PM)

RMB'000

1,745,870

(291,017)

1,454,853

*40%

581,941

291,017

872,958

A reconciliation of the non-controlling interests of the CMIG PM Group (excluding Kerui PM) is as follows:

	RMB'000
Non-controlling interest of the CMIG PM Group	345,819
Less: Non-controlling interest of Kerui PM	(75,976)
Pro forma adjustment	603,115
Non-controlling interest of the CMIG PM Group (excluding
Kerui PM)	872,958

1. The estimated loss on disposal of RMB9,617,000 assuming that the disposal of Kerui PM had taken place on 30 September 2019 is calculated as follows:

	RMB'000
Consideration receivable	235,138
Less: net assets of Kerui PM as at 30 September 2019	(320,731)
Non-controlling interest of Kerui PM as at 30 September 2019	75,976
Estimated loss on disposal of Kerui PM	(9,617)

The actual effect of the disposal of Kerui PM is to be determined based on the consideration and the carrying amount of net assets of Kerui PM at the completion date and therefore subject to change upon actual completion of the disposal of Kerui PM.

- III-11 -

APPENDIX III	UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE ENLARGED GROUP

1. Goodwill arising from the CMIG PM Acquisition is calculated as follows:

	Note	RMB'000
Prepayment made by cash		468,000
Consideration payable - the first instalment		892,000
Consideration payable - the second instalment		200,000
Fair value of total consideration	i	1,560,000
Fair value of identifiable net assets of the CMIG PM Group
(excluding Kerui PM) attributable to the 60% equity
interest acquired	3(a)	872,912
Goodwill arising from the CMIG PM Acquisition	ii	687,088

1. Pursuant to the CMIG PM Agreement, the Fixed Consideration for the CMIG PM Acquisition is RMB1,560,000,000. As set out in the CMIG PM Agreement, (i) the deposit in the amount of RMB468,000,000 shall be payable by the Purchaser to the Vendor within 10 Working Days upon fulfillment of all the conditions precedent in relation to the payment of the deposit set out in the CMIG PM Agreement; (ii) the first instalment in the amount of RMB892,000,000 shall be payable by the Purchaser to the Vendor within 10 Working Days upon fulfillment of all the conditions precedent in relation to the payment of the first instalment set out in the CMIG PM Agreement; (iii) the second instalment in the amount of RMB200,000,000 shall be payable by the Purchaser to the Vendor within 10 Working Days upon fulfillment of all the conditions precedent in relation to the payment of the second instalment set out in the CMIG PM Agreement.

For the purposes of the Unaudited Pro Forma Financial Information, it is assumed that the deposit of RMB468,000,000 has been paid at CMIG PM Completion while the first and second instalment of RMB1,092,000,000 will be paid after the CMIG PM Completion and were recorded as other payables in the unaudited pro forma consolidated balance sheet.

The adjustment for the purpose of the unaudited pro forma consolidated statement of cash flows represents the cash outflows for the CMIG PM Acquisition, net of cash acquired of the CMIG PM Group (excluding Kerui PM), as if the CMIG PM Completion had taken place on 1 January 2018, calculated as follows:

	RMB'000
Prepayment made by cash	468,000
Cash and cash equivalents of the CMIG PM Group as at 1 January 2018	544,302
Cash and cash equivalents of Kerui PM as at 1 January 2018	(145,444)
Less: Cash and cash equivalents of the CMIG PM Group (excluding
Kerui PM) as at 1 January 2018	398,858
Cash outflows for CMIG PM Acquisition, net of cash acquired of the
CMIG PM Group (excluding Kerui PM)	69,142

This pro forma adjustment is not expected to have a continuing effect on the unaudited pro forma statement of cash flows.

- III-12 -

APPENDIX III	UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE ENLARGED GROUP

1. Goodwill arising from the CMIG PM Acquisition of approximately RMB687,088,000 is derived from the difference between the fair value of total consideration of approximately RMB1,560,000,000 and the fair value of the identifiable net assets of the CMIG PM Group (excluding Kerui PM) attributable to the 60% equity interest acquired of approximately RMB872,912,000. Since the fair values of the identifiable net assets of the CMIG PM Group (excluding Kerui PM) at the CMIG PM Completion may substantially be different from the fair values used in the preparation of the Unaudited Pro Forma Financial Information, the final amount of the goodwill to be recognised in connection with the CMIG PM Acquisition may be different from the amounts presented above and the differences could be significant. A reconciliation of the goodwill arising from the CMIG PM Acquisition is as follows:

	RMB'000
Goodwill of the CMIG PM Group	839,777
Pro forma adjustment	(152,689)
Goodwill arising from the CMIG PM Acquisition	687,088

For the purpose of preparing the Unaudited Pro Forma Financial Information, the Directors have made an assessment on whether there is any impairment in respect of goodwill arising from the CMIG PM Acquisition with reference to HKAS 36 ''Impairment of Assets''. They have taken into consideration the historical financial performance of the CMIG PM Group (excluding Kerui PM), the price-to-earnings ratio of companies in similar industries and synergy effect to the business of the Enlarged Group as key parameters for the assessment. Based on the assessment results, the Directors concluded that there is no impairment in the value of goodwill. The Company will adopt consistent accounting policies, principal assumptions and methodology of impairment assessment (as used in the Unaudited Pro Forma Financial Information) to assess the impairment of the Enlarged Group's goodwill in the future.

1. The adjustment represents: (a) difference of depreciation of RMB1,916,000 arising due to the fair value adjustments to property, plant and equipment and difference of amortisation of RMB8,578,000 arising due to the fair value adjustments to customer relationship from the business combination of the CMIG PM Group (excluding Kerui PM), based on the respective fair values as set out in the valuation report of the CMIG PM Group as at 30 September 2019 dated 23 January 2020 prepared by JLL. The adjustment of RMB8,578,000 had been accounted for in the cost of sales in consideration that the customer relationship was directly related to the property management business; and (b) the related deferred income tax impact of RMB2,464,000. For the purpose of this Unaudited Pro Forma Financial Information, the Directors consider that there are no significant changes on the fair values of property, plant and equipment and customer relationship between 30 September 2019 and 1 January 2018 and no separate valuation report as at 1 January 2018 was prepared. Had this report been prepared, the amounts of the additional amortisation/depreciation expenses for the compilation of the Unaudited Pro Forma Financial Information of the Enlarged Group may be different from the amounts presented in this appendix.
   For the purpose of the unaudited pro forma statement of comprehensive income, (i) the customer relationship are amortised based on the timing of projected cash flows of the contracts over their estimated useful lives (5 to 10 years) on a straight-line basis; and (ii) the depreciation of property, plant and equipment and investment properties is calculated using the straight-line method to allocate the fair value over their estimated residual lives (1 to 15 years).
   This pro forma adjustment is expected to have a continuing effect on the unaudited pro forma statement of comprehensive income.
2. The adjustment represents the estimated professional fees and transaction costs of approximately RMB5,181,000 in connection with the CMIG PM Acquisition, which are assumed to be settled after CMIG PM Completion, and the related income tax impact of RMB1,295,000. This pro forma adjustment is not expected to have a continuing effect on the unaudited pro forma statement of comprehensive income.

- III-13 -

APPENDIX III	UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE ENLARGED GROUP

1. Pursuant to the terms of the CMIG PM Agreement, Kerui PM has been disposed of to New CMIG PM before the CMIG PM Completion as part of the Reorganisation. The adjustment represents the reversal of the elimination of trade and other payables of RMB1,627,000 due to Kerui PM from CMIG PM Group (excluding Kerui PM), which had been eliminated in the audited combined statement of financial position of the CMIG PM Group as at 30 September 2019.
2. Pursuant to the terms of the CMIG PM Agreement, Kerui PM has been disposed of to New CMIG PM before the CMIG PM Completion as part of the Reorganisation. The adjustment represents the reversal of the elimination of revenue of RMB2,458,000 and cost of sales of RMB1,632,000 between the CMIG PM Group (excluding Kerui PM) and Kerui PM, which had been eliminated in the audited combined statement of comprehensive income for the year ended 31 December 2018.
3. The amount represent the adjustments to the share of profit and total comprehensive income attributable to non-controlling interest in the CMIG PM Group (excluding Kerui PM) for the year ended 31 December 2018 assuming that the CMIG PM Completion of 60% equity interest in the CMIG PM Group (excluding Kerui PM) takes place on 1 January 2018 for the purpose of the Unaudited Pro Forma Financial Information.
4. Apart from the above, no other adjustment has been made to the Unaudited Pro Forma Financial Information of the Enlarged Group to reflect any trading results or other transactions entered or proposed to enter into by the Group subsequent to 30 June 2019, or the CMIG PM Group (excluding Kerui PM) subsequent to 30 September 2019.

- III-14 -

APPENDIX III	UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE ENLARGED GROUP

1. REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is the text of a report received from PricewaterhouseCoopers, Certified Public

Accountants, Hong Kong, for the purpose of incorporation in this circular.

INDEPENDENT REPORTING ACCOUNTANT'S ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION

To the Directors of A-Living Services Co., Ltd.

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of A-Living Services Co., Ltd. (the "Company") and its subsidiaries (collectively the "Group") and CMIG Futurelife Property Management Limited and its subsidiaries (the "Target Group") by the directors for illustrative purposes only. The unaudited pro forma financial information consists of the unaudited pro forma consolidated balance sheet as at 30 June 2019, the unaudited pro forma consolidated statement of comprehensive income for the year ended 31 December 2018, the pro forma consolidated statement of cash flows for the year ended 31 December 2018 and related notes (the "Unaudited Pro Forma Financial Information") as set out on pages III-1 to III-14 of the Company's circular dated 24 February 2020, in connection with the proposed acquisition of the Target Group (the "Transaction") by the Company. The applicable criteria on the basis of which the directors have compiled the Unaudited Pro Forma Financial Information are described on pages III-1 to III-14.

The Unaudited Pro Forma Financial Information has been compiled by the directors to illustrate the impact of the Transaction on the Group's financial position as at 30 June 2019 and its financial performance and cash flows for the year ended 31 December 2018 as if the Transaction had taken place at 30 June 2019 and 1 January 2018 respectively. As part of this process, (i) information about the Group's financial position has been extracted by the directors from the Group's financial statements for the period ended 30 June 2019, on which no review report has been published and (ii) information about the Group's financial performance and cash flows has been extracted by the directors from the Group's financial statements for the year ended 31 December 2018, on which an audit report has been published.

- III-15 -

APPENDIX III	UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE ENLARGED GROUP

Directors' Responsibility for the Unaudited Pro Forma Financial Information

The directors are responsible for compiling the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and with reference to Accounting Guideline 7 Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars ("AG 7") issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA").

Our Independence and Quality Control

We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

Our firm applies Hong Kong Standard on Quality Control 1 issued by the HKICPA and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountant's Responsibilities

Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus, issued by the HKICPA. This standard requires that the reporting accountant plans and performs procedures to obtain reasonable assurance about whether the directors have compiled the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the Unaudited Pro Forma Financial Information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the Unaudited Pro Forma Financial Information.

The purpose of unaudited pro forma financial information included in a circular is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the entity as if the event had occurred or the transaction had been

- III-16 -

APPENDIX III	UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE ENLARGED GROUP

undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the Transaction at 30 June 2019 and 1 January 2018 would have been as presented.

A reasonable assurance engagement to report on whether the unaudited pro forma financial information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the directors in the compilation of the unaudited pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether:

• The related pro forma adjustments give appropriate effect to those criteria; and
• The unaudited pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information.

The procedures selected depend on the reporting accountant's judgment, having regard to the reporting accountant's understanding of the nature of the company, the event or transaction in respect of which the unaudited pro forma financial information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the unaudited pro forma financial information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion:

1. the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated;
2. such basis is consistent with the accounting policies of the Group; and
3. the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

PricewaterhouseCoopers

Certified Public Accountants

Hong Kong, 24 February 2020

- III-17 -

APPENDIX IV	MANAGEMENT DISCUSSION AND ANALYSIS
	OF THE CMIG PM GROUP

Set out below is the management discussion and analysis on the CMIG PM Group for the three years ended 31 December 2018 and the nine months ended 30 September 2019 (the "Track Record Period"). The following financial information is based on the pro forma financial information as disclosed in the section headed "events after the balance sheet date" to the audited financial information of the CMIG PM Group as set out in Appendix II to this circular, on the assumption that the disposal of Kerui PM had taken effect at the beginning of the Track Record Period.

BUSINESS REVIEW

The CMIG PM Group is a property management service provider in the PRC which has a diversified business portfolio coverage, including residential, public and commercial buildings. It aims to provide quality property management service to mid- to high-end property projects and to enhance market value of the properties managed by it. As at 30 September 2019, the CMIG PM Group has seven renowned brands awarded as Top100 property management companies, all of which are leading brands in different niche property markets. In particular, the CMIG PM Group has a strong presence in public building property management market, which has high entry barriers, serving properties including iconic cultural facilities, government office buildings, transportation infrastructure, financial and education institutions, resorts and scenic spots, and industrial parks. The CMIG PM manages numerous city landmark projects, including World EXPO-China Pavilion (中華藝術宮), Shanghai F1 International Circuit (上海F1國際 賽車場), Shenzhen Civic Center (深圳市民中心), Jiangxi Provincial Administrative Center (江西省行政中心), Data Processing Center of Agricultural Bank of China (中國農業銀行資 料中心), Shanghai Hongqiao Comprehensive Transportation Hub (虹橋樞紐), Shanghai Jiao Tong University (上海交通大學), Xi'an-Dayan Pagoda (西安大雁塔) and Nanjing-China Nanjing Software Valley (南京軟體谷).

FINANCIAL REVIEW

Revenue

During the Track Record Period, the CMIG PM Group derived its revenue mainly from property management services and other value-added services including property developer-related services, community-related services, professional services and others. For the years ended 31 December 2016, 2017 and 2018 and the nine months ended 30 September 2018 and 2019, CMIG PM Group's revenue amounted to approximately RMB621.0 million, RMB2,383.6 million, RMB3,125.8 million, RMB2,318.5 million and RMB2,377.2 million, respectively. The overall increase in the CMIG PM Group's revenue was primarily due to (i) the expansion of its property management services as a result of the acquisition of property management service companies during the Track Record Period and the introduction of new projects of its existing subsidiaries, which led to the increase in GFA under management; (ii) the increase in property management service fees;

1. increased share of the public properties in the its property management business portfolio; and (iv) the expansion of its value-added services as a result of increase in number of property projects.

- IV-1 -

APPENDIX IV	MANAGEMENT DISCUSSION AND ANALYSIS
	OF THE CMIG PM GROUP

The following table sets forth a breakdown of the CMIG PM Group's revenue by category for the periods indicated:

				For the year ended 31 December			For the nine months ended 30 September
	2016		2017		2018		2018		2019
	RMB'000	%		RMB'000	%		RMB'000	%		RMB'000	%		RMB'000	%
Property
management
services	590,740			95.1	1,969,673			82.6	2,569,099			82.2	1,945,340			83.9	2,095,358			88.1
Value-added
services	30,223			4.9	413,886			17.4	556,663			17.8	373,143			16.1	281,833			11.9
Total	620,963			100.0	2,383,559			100.0	3,125,762			100.0	2,318,483			100.0	2,377,191			100.0

Cost of sales

For the years ended 31 December 2016, 2017 and 2018 and the nine months ended 30 September 2018 and 2019, the CMIG PM Group's cost of sales amounted to approximately RMB521.5 million, RMB2,006.6 million, RMB2,618.4 million, RMB1,909.6 million and RMB1,996.0 million, respectively. The overall increase in the CMIG PM Group's cost of sales was mainly due to the scale-up of the CMIG PM Group's business and was generally in line with the increase in the CMIG PM Group's revenue during the Track Record Period.

Gross profit

For the years ended 31 December 2016, 2017 and 2018 and the nine months ended 30 September 2018 and 2019, the CMIG PM Group's gross profit amounted to approximately RMB99.4 million, RMB377.0 million, RMB507.3 million, RMB408.9 million and RMB381.2 million, respectively; and the overall gross profit margin amounted to approximately 16.0%, 15.8%, 16.2%, 17.6% and 16.0%, respectively. The higher gross profit margin for the nine months ended 30 September 2018 was primarily due to certain education institution projects located in Shandong which had a higher gross profit margin. Excluding the amortisation of the intangible assets upon the purchase price allocation as a result of the historical acquisition of relevant subsidiaries, the gross profit margin amounted to approximately 21.2%, 18.4%, 18.5%, 20.2% and 18.2%, respectively, which was primarily due to the change in property mix upon the acquisitions of subsidiaries.

Selling and marketing expenses

For the years ended 31 December 2016, 2017 and 2018 and the nine months ended 30 September 2018 and 2019, the CMIG PM Group incurred selling and marketing expenses of approximately RMB1.3 million, RMB16.3 million, RMB15.7 million, RMB12.4 million and RMB8.6 million, respectively. The increase in the CMIG PM Group's selling

- IV-2 -

APPENDIX IV	MANAGEMENT DISCUSSION AND ANALYSIS
	OF THE CMIG PM GROUP

and marketing expenses for the year ended 31 December 2017 was mainly due to the increase in staff costs incurred by the subsidiaries acquired during the same year. The decrease in the CMIG PM Group's selling and marketing expenses for the year ended 31 December 2018 was mainly due to the cost savings from the restructuring of the sales department and the decrease in staff costs resulting from the decrease in selling headcount.

Administrative expenses

For the years ended 31 December 2016, 2017 and 2018 and the nine months ended 30 September 2018 and 2019, CMIG PM Group incurred administrative expenses of approximately RMB51.3 million, RMB188.8 million, RMB266.4 million, RMB206.2 million and RMB197.3 million, respectively. The increase in the CMIG PM Group's administrative expenses for the year ended 31 December 2017 was mainly due to the increase in staff costs as a result of the acquisition of subsidiaries during the same year. The increase in the CMIG PM Group's administrative expenses for the year ended 31 December 2018 was mainly due to (i) the increase in staff costs resulting from the increase in administrative headcount; (ii) costs incurred for implementation of new computer systems; and (iii) the increase in travelling and commission expenses. The decrease in the CMIG PM Group's administrative expenses for the nine months ended 30 September 2019 was primarily due to the decrease in staff costs as a result of the decrease in administrative headcount and decrease in general corporate expenses resulting from cost saving initiatives.

Other income and gains, net

For the years ended 31 December 2016, 2017 and 2018 and the nine months ended 30 September 2018 and 2019, the CMIG PM Group's other income and gains, net amounted to approximately RMB11.9 million, RMB24.1 million, RMB17.0 million, RMB13.4 million and RMB23.2 million, respectively. Other income of the CMIG PM Group primarily consisted of government grants, income from financial instruments with guaranteed principle and return and others. The fluctuation in other income during the Track Record Period was primarily due to the fluctuation in government grants received by the CMIG PM Group, which were mainly tax subsidies, in the corresponding periods.

Finance income/(cost), net

Finance income

For the years ended 31 December 2016, 2017 and 2018 and the nine months ended 30 September 2018 and 2019, the CMIG PM Group's gross finance income amounted to approximately RMB26.6 million, RMB55.2 million, RMB45.5 million, RMB35.4 million and RMB27.1 million, respectively, which arose primarily from the loans due from related parties.

Finance costs

For the years ended 31 December 2016, 2017 and 2018 and the nine months ended 30 September 2018 and 2019, the CMIG PM Group's gross finance costs amounted to

- IV-3 -

APPENDIX IV	MANAGEMENT DISCUSSION AND ANALYSIS
	OF THE CMIG PM GROUP

approximately RMB28.6 million, RMB54.2 million, RMB45.6 million, RMB35.0 million and RMB23.3 million, respectively, which arose primarily from assets-back securities borrowings and bank loans. The overall increase in gross finance costs for the three years ended 31 December 2018 was primarily due to the increase in interest expenses of asset-backed securities.

Income tax expense

Income tax expense of CMIG PM Group comprised PRC corporate income tax, net of deferred tax. For the years ended 31 December 2016, 2017 and 2018 and the nine months ended 30 September 2018 and 2019, the CMIG PM Group's income tax expense amounted to approximately RMB16.9 million, RMB45.8 million, RMB64.0 million, RMB52.7 million and RMB52.7 million, respectively. The effective tax rate, being the income tax expense divided by the profit before taxation, of CMIG PM Group was approximately 25.0%, 21.6%, 24.3%, 23.8% and 23.1% for the years ended 31 December 2016, 2017 and 2018 and the nine months ended 30 September 2018 and 2019, respectively.

Profit for the year/period attributable to the owners of the CMIG PM Group

The CMIG PM Group recorded profit for the year/period attributable to its owners amounted to approximately RMB44.8 million, RMB122.2 million, RMB131.0 million, RMB110.3 million and RMB126.8 million for the years ended 31 December 2016, 2017 and 2018 and the nine months ended 30 September 2018 and 2019, respectively, representing a constant upward trend.

Intangible assets

Intangible assets of the CMIG PM Group primarily represented customer relationship and goodwill arising from the acquisition of subsidiaries. As at 31 December 2016, 2017 and 2018 and 30 September 2019, intangible assets of the CMIG PM Group amounted to approximately RMB575.0 million, RMB1,333.4 million, RMB1,166.1 million and RMB1,141.5 million, respectively.

The CMIG PM Group's intangible assets increased to approximately RMB1,333.4 million as at 31 December 2017 primarily as a result of the acquisition of five subsidiaries during the same year. The CMIG PM Group's intangible assets decreased to approximately RMB1,166.1 million as at 31 December 2018 primarily due to the decrease in customer relationship and goodwill as a result of the disposal of a subsidiary during the same year.

Loans and interest receivables from a related party

Loans to and interest receivables from a related party of the CMIG PM Group represented the proceeds obtained from the asset-back securities arrangements that were loaned to a related party, the Remaining Shareholder, which were unsecured and carried interest rates at 3.8% to 5.5% per annum. As at 31 December 2016, 2017 and 2018 and 30 September 2019, loans to and interest receivables from a related party of the CMIG PM

- IV-4 -

APPENDIX IV	MANAGEMENT DISCUSSION AND ANALYSIS
	OF THE CMIG PM GROUP

Group amounted to approximately RMB1,056.2 million RMB829.5 million, RMB588.8 million and RMB464.1 million, respectively.

Prepayments, deposits and other receivables

As at 31 December 2016, 2017 and 2018 and 30 September 2019, the CMIG PM Group had non-current prepayments, deposits and other receivables amounted to approximately RMB0.2 million, RMB2.8 million, RMB3.0 million and RMB6.9 million, respectively.

The CMIG PM Group's current other receivables and prepayments mainly represented (i) payments made on behalf of property owners; (ii) prepayments for utilities; and (iii) others. As at 31 December 2016, 2017 and 2018 and 30 September 2019, the CMIG PM Group had current prepayments, deposits and other receivables amounted to approximately RMB135.7 million, RMB429.7 million, RMB360.5 million and RMB346.6 million, respectively. The overall increase in the CMIG PM Group's current other receivables and prepayments throughout the Track Record Period was primarily due to increase in payments on behalf of property owners as a result of the expansion of CMIG PM Group's business.

Gearing ratio and the basis of calculation

As at 31 December 2016, 2017 and 2018 and 30 September 2019, the gearing ratio of the CMIG PM Group was approximately 111.7%, 24.1%, 6.3% and 11.2%, respectively. The gearing ratio is the net debt divided by total equity, which net debt is the total borrowings less cash and cash equivalents.

The CMIG PM Group's gearing ratio decreased from approximately 111.7% as at 31 December 2016 to approximately 24.1% as at 31 December 2017, primarily due to (i) the decrease in net debt as a result of the decrease in borrowings and increase in cash and cash equivalents; and (ii) the increase in total equity as a result of the acquisition of subsidiaries. Its gearing ratio further decreased to approximately 6.3% as at 31 December 2018 primarily as a result of the decrease in borrowings.

Liquidity, financial resources and capital structure

During the Track Record Period, the CMIG PM Group's principal use of cash was working capital, which was primarily funded from cash flows generated from operations and borrowings. It is expected that cash flow generated from operations and borrowings will continue to be the principal source of liquidity.

As at 31 December 2016, 2017 and 2018 and 30 September 2019, the CMIG PM Group's cash and cash equivalents were mainly denominated in RMB and its borrowings were denominated in RMB.

The CMIG PM Group's borrowings comprised bank loans, other borrowings and asset-backed securities borrowings. As at 31 December 2016, 2017 and 2018 and 30 September 2019, the bank loans of the CMIG PM Group amounted to approximately

- IV-5 -

APPENDIX IV	MANAGEMENT DISCUSSION AND ANALYSIS
	OF THE CMIG PM GROUP

RMB100.0 million, RMB100.0 million, RMB18.0 million and RMB25.0 million, respectively of which nil, nil, RMB18.0 million and RMB25.0 million were at fixed rate. As at 31 December 2016, 2017 and 2018 and 30 September 2019, the others borrowings of CMIG PM Group amounted to nil, approximately RMB21.8 million, RMB24.1 million and RMB15.4 million, respectively. As at 31 December 2016, 2017 and 2018 and 30 September 2019, the asset-backed security borrowings of CMIG PM Group amounted to approximately RMB927.0 million, RMB748.0 million, RMB545.0 million and RMB435.0 million, respectively.

The maturity profile of the CMIG PM Group's borrowings is set out as follows:

								As at 30
	As at 31 December			September
	2016	2017			2018	2019
	RMB'000	RMB'000	RMB'000		RMB'000
Bank loans
Within 1 year	-		-			18,000	25,000
Between 1 and 2 years	-		25,000			-	-
Between 2 and 5 years	100,000		75,000			-	-
	100,000		100,000			18,000	25,000
Other borrowings
Within 1 year	-		21,501			24,081	13,617
Between 1 and 2 years	-		281			-	1,806
	-		21,782			24,081	15,423
Asset-backed security
borrowings
Within 1 year	87,000		100,000			110,000	229,000
Between 1 and 2 years	192,000		213,000			229,000	206,000
Between 2 and 5 years	648,000		435,000			206,000		-
	927,000		748,000			545,000	435,000

As at 31 December 2016, 2017 and 2018 and 30 September 2019, the net current assets of the CMIG PM Group amounted to approximately RMB295.1 million, RMB552.6 million, RMB981.1 million and RMB709.4 million, respectively.

As at 31 December 2016, 2017 and 2018 and 30 September 2019, the CMIG PM Group did not have any capital commitments.

- IV-6 -

APPENDIX IV	MANAGEMENT DISCUSSION AND ANALYSIS
	OF THE CMIG PM GROUP

Pledge of assets

As at 31 December 2016, 2017 and 2018 and 30 September 2019, certain properties of the CMIG PM Group amounted to approximately nil, nil, RMB2.5 million and nil were pledged as security for the secured bank loans.

Significant investments, material acquisitions and disposals

During the Track Record Period, the CMIG PM Group acquired certain subsidiaries in the PRC, details of which are set out in note 30 in Appendix II to this circular. Save as disclosed, the CMIG PM Group had not made any other material acquisitions or disposals of subsidiaries or associated companies.

During the Track Record Period, the CMIG PM Group held certain investments in associates in the property management industry as part of the CMIG PM Group's strategy to expand its operations. Details of which are set out as follows:

		Carrying			Percentage of ownership interest	Particulars of
		amounts as at			attributable to the CMIG PM Group	ownership
		30 September	Investment Registered				As at 30	interest held as	Place of operation and
	Date of	2019	cost	capital	As at 31 December		September	at 30 September	principal activities
Company name(Note 1)	incorporation	(RMB'000)	(RMB'000)	(RMB'000)	2016	2017	2018	2019	2019
Shanghai Yide Minghua	03/06/2014	5,398	2,450	5,000	49.00%	49.00%	49.00%	49.00%	Registered	The PRC; Property
Property Management									capital of	management
Company Limited									RMB2,450,000
Chongqing Tianjiao Joyful	22/01/1999	148,531	90,000	5,000	24.17%	24.17%	24.17%	24.17%	Registered	The PRC; Property
Life Service Company									capital of	management and real
Limited									RMB1,209,000	estate brokerage
Kunming Shenlongcheng	01/06/2010	2,897	3,000	10,000	N/A	30.00%	30.00%	30.00%	Registered	The PRC; Property
Property Management									capital of	management and real
Company Limited									RMB3,000,000	estate brokerage
Shenzhen Huilongcheng	12/11/2015	17,580	2,450	8,000	N/A	49.00%	49.00%	49.00%	Registered	The PRC; Property
Property Management									capital of	management
Company Limited									RMB3,920,000
Suzhou Zhonglu	20/06/2014	490	490	1,000	N/A	49.00%	49.00%	49.00%	Registered	The PRC; Property
Shenlongcheng Property									capital of	management, hotel
Management Company									RMB490,000	management and real
Limited										estate brokerage
Shandong Honest Property	31/05/2018	103,269	96,692	7,400	N/A	N/A	35.00%	35.00%	Registered	The PRC; Property
Development Company									capital of	management
Limited									RMB2,590,000
Luzhou Gaoxin Haitai	20/06/2018	549	490	1,000	N/A	N/A	49.00%	49.00%	Registered	The PRC; Property
Logistics Management									capital of	management
Company Limited									RMB490,000
Shanghai Zunrong	22/04/2019	2,782	2,800	100,000	N/A	N/A	N/A	10.00%	Registered	The PRC; Property
Security Service Co.,									capital of	management
Ltd.									RMB10,000,000

- IV-7 -

APPENDIX IV	MANAGEMENT DISCUSSION AND ANALYSIS
						OF THE CMIG PM GROUP
		Carrying			Percentage of ownership interest	Particulars of
		amounts as at			attributable to the CMIG PM Group	ownership
		30 September	Investment Registered				As at 30	interest held as	Place of operation and
	Date of	2019	cost	capital	As at 31 December		September	at 30 September	principal activities
Company name(Note 1)	incorporation	(RMB'000)	(RMB'000)	(RMB'000)	2016	2017	2018	2019	2019
Shanxi Chengyue Property	17/04/2019	34,863	32,067	6,000	N/A	N/A	N/A	25.00%	Registered	The PRC; Property
Management Company									capital of	management
Limited									RMB1,500,000
Dalian Yimei Corporate	01/04/2019	36,406	34,668	10,000	N/A	N/A	N/A	35.00%	Registered	The PRC; Property
Management Service									capital of	management
Company Limited									RMB3,500,000

Notes:

1. The English names of the associates represent the best effort by the management of the CMIG PM Group in translating their Chinese names as they do not have official English names.
2. The associates as listed above are private companies and there are no quoted market prices available for their shares. There are no contingent liabilities relating to the CMIG PM Group's interest in the associates.
3. During the year ended 31 December 2017, Chongqing Tianjiao Joyful Life Service Company Limited and Shenzhen Huilongcheng Property Management Company Limited declared dividends of RMB4.1 million and RMB2.0 million. The amount of dividend attributable to the CMIG PM Group on a pro-rata basis was recognised as a reduction in the carrying amount of the corresponding investments. No other associates declared dividends during the Track Record Period.

Save as the aforementioned investments in associates, certain owner-occupied buildings as disclosed in note 13 and investment properties as disclosed in note 15 in Appendix II to this circular, the CMIG PM Group had not held any other significant investments during the Track Record Period.

Future plans for material investments and acquisition of capital assets

The CMIG PM Group has no future plans for material investments and acquisition of material capital assets as at 30 September 2019.

Contingent liabilities

As at 31 December 2016, 2017 and 2018 and 30 September 2019, the CMIG PM Group did not have any material contingent liabilities.

Foreign exchange exposure

During the Track Record Period, the principal activities of the CMIG PM Group were conducted in the PRC and its income and expenses were denominated in RMB. In light of this, the CMIG PM Group was not exposed to material risks in relation to foreign exchange rate fluctuation and has not entered into any contracts to hedge its exposure to foreign currency risks.

- IV-8 -

APPENDIX IV	MANAGEMENT DISCUSSION AND ANALYSIS
	OF THE CMIG PM GROUP

Employees and remuneration policy

The CMIG PM Group adopts remuneration policies which are similar to its peer in the industry and reviews such policies on a regular basis. The remuneration payable to its staff is fixed by reference to the duties and prevailing market rates in the region. Discretionary bonuses are paid to employees to reward their contributions based on the annual assessment of performance. The CMIG PM Group also participates in different social welfare plans for its employees in compliance with the applicable statutory requirements in the PRC and local governments.

As at 31 December 2016, 2017 and 2018 and 30 September 2019, the CMIG PM Group had approximately 18,000, 19,000, 18,000 and 17,000 employees, respectively; and the total remuneration including the contribution in pension, social insurance and other employee benefits amounted to approximately RMB327.2 million, RMB1,203.3 million, RMB1,422.1 million and RMB1,145.3 million for the years ended 31 December 2016, 2017 and 2018 and the nine months ended 30 September 2019, respectively.

- IV-9 -

APPENDIX V

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the A-Living Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the A-Living Group. The A-Living Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

1. Directors', Supervisors' and the Chief Executives' interest in the securities of A-Living and its associated corporations

As at the Latest Practicable Date, save as disclosed below, none of the A-Living Directors, the A-Living Supervisors or the chief executive of A-Living had or was deemed to have any interests or short positions in the shares, underlying shares or debentures of A-Living or any associated corporation (within the meaning of Part XV of the SFO) which were required (i) to be notified to A-Living and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) pursuant to section 352 of the SFO to be entered in the register referred to therein; or (iii) to be notified to A-Living and the Stock Exchange pursuant to the Securities Dealing Codes:

(i)	Interest in the shares of A-Living
				Approximate	Approximate
				Percentage	Percentage
				of the	of
				Relevant	A-Living's
	Capacity and			Class of	Issued
	Nature of	Class of	Number of	Shares in	Share
Name of Director	Interest	Shares(1)	Shares(2)	Issue	Capital
Mr. Chan Cheuk	Beneficiary of a	Unlisted shares	720,000,000(L)	80.00%	54.00%
Hung(3)	trust
Mr. Huang	Interest of a	Unlisted shares	39,920,000(L)	4.44%	2.99%
Fengchao(4)	controlled
	corporation

Notes:

1. Unlisted shares of A-Living include domestic shares and unlisted foreign shares of A-Living.
2. The letter "L" denotes the person's long position in the shares.

- V-1 -

APPENDIX V

GENERAL INFORMATION

1. Mr. Chan Cheuk Hung is the beneficiary of a family trust (the "Chen's Family Trust", which is deemed to be interested in 720,000,000 unlisted shares of A-Living), therefore, Mr. Chan Cheuk Hung is deemed under the SFO to be interested in the shares of A-Living held by Chen's Family Trust.
2. Mr. Huang Fengchao is a limited partner of 共青城雅生活投資管理合夥企業（有限合夥）
   (Gongqingcheng A-Living Investment Management Limited Partnership*) (holding 80,000,000 unlisted shares of A-Living), which 49.9% of interests is owned by Mr. Huang.
3. 1. Interest in the shares of associated corporation of A-Living

				Approximate
		Capacity		Percentage of
	Name of Associated	and Nature	Number of	Shareholding
Name of Director	Corporation	of Interest	Shares	Interest
Mr. Chan Cheuk	Agile Group	Beneficiary	2,453,096,250(L)	62.63%
Hung	Holdings Limited	of a trust
Mr. Huang	Agile Group	Beneficial	1,400,000(L)	0.04%
Fengchao	Holdings Limited	owner
Ms. Yue Yuan	Agile Group	Beneficial	22,000(L)	0.00%
	Holdings Limited	owner

1. Substantial shareholders' long, short and lending pool position(s) in shares or underlying shares of A-Living

As at the Latest Practicable Date, other than the interests disclosed above in respect of certain A-Living Directors, the interests and short positions of persons in the shares and underlying shares of A-Living as recorded in the register required to be kept by A-Living under Section 336 of the SFO were as follows:

				Approximate	Approximate
				Percentage of	Percentage of
				the Relevant	A-Living's
	Capacity and Nature of	Class of	Number of	Class of Shares	Issued Share
Name of Shareholder	Interest	Shares(1)	Shares(2)	in Issue	Capital
Zhongshan A-Living Enterprises	Beneficial owner	Unlisted shares	712,800,000(L)	79.20%	53.46%
Management Services Co., Ltd.*
(中山雅生活企業管理服務有限公司)
Deluxe Star International Limited(3)	Interest of a controlled	Unlisted shares	712,800,000(L)	79.20%	53.46%
	corporation
	Beneficial owner	Unlisted shares	7,200,000(L)	0.80%	0.54%
Makel International (BVI) Limited(4)	Interest of a controlled	Unlisted shares	720,000,000(L)	80.00%	54.00%
	corporation
Genesis Global Development (BVI)	Interest of a controlled	Unlisted shares	720,000,000(L)	80.00%	54.00%
Limited(5)	corporation

- V-2 -

APPENDIX V		GENERAL INFORMATION
				Approximate	Approximate
				Percentage of	Percentage of
				the Relevant	A-Living's
	Capacity and Nature of	Class of	Number of	Class of Shares	Issued Share
Name of Shareholder	Interest	Shares(1)	Shares(2)	in Issue	Capital
Eastern Supreme Group Holdings	Interest of a controlled	Unlisted shares	720,000,000(L)	80.00%	54.00%
Limited(6)	corporation
Agile Group Holdings Limited(7)	Interest of a controlled	Unlisted shares	720,000,000(L)	80.00%	54.00%
	corporation
Full Choice Investments Limited(8)	Trustee of a trust	Unlisted shares	720,000,000(L)	80.00%	54.00%
Top Coast Investment Limited(9)	Interest of a controlled	Unlisted shares	720,000,000(L)	80.00%	54.00%
	corporation
Mr. Chen Zhuo Lin(10)	Beneficiary of a trust	Unlisted shares	720,000,000(L)	80.00%	54.00%
Mr. Chan Cheuk Yin(10)	Beneficiary of a trust	Unlisted shares	720,000,000(L)	80.00%	54.00%
Ms. Luk Sin Fong, Fion(10)	Beneficiary of a trust	Unlisted shares	720,000,000(L)	80.00%	54.00%
Mr. Chan Cheuk Hei(10)	Beneficiary of a trust	Unlisted shares	720,000,000(L)	80.00%	54.00%
Mr. Chan Cheuk Nam(10)	Beneficiary of a trust	Unlisted shares	720,000,000(L)	80.00%	54.00%
Ms. Zheng Huiqiong(11)	Spouse	Unlisted shares	720,000,000(L)	80.00%	54.00%
Ms. Lu Liqing(12)	Spouse	Unlisted shares	720,000,000(L)	80.00%	54.00%
Ms. Lu Yanping(13)	Spouse	Unlisted shares	720,000,000(L)	80.00%	54.00%
Ms. Chan Siu Na(14)	Spouse	Unlisted shares	720,000,000(L)	80.00%	54.00%
Ningbo Lvjin Investment	Beneficial owner	Unlisted shares	100,000,000(L)	11.11%	7.50%
Management Co., Ltd.*
(寧波綠璡投資管理有限公司)
Greenland Financial Holdings	Interest of a controlled	Unlisted shares	100,000,000(L)	11.11%	7.50%
Group Co., Ltd.* (綠地金融投資控	corporation
股集團有限公司) (15)
Greenland Holding Group* (綠地控	Interest of a controlled	Unlisted shares	100,000,000(L)	11.11%	7.50%
股集團有限公司) (16)	corporation
Greenland Holdings Group	Interest of a controlled	Unlisted shares	100,000,000(L)	11.11%	7.50%
Company Limited* (綠地控股集團	corporation
股份有限公司) ("Greenland
Holdings") (17)
Gongqingcheng A-Living	Beneficial owner	Unlisted shares	80,000,000(L)	8.89%	6.00%
Investment Management Limited
Partnership* (共青城雅生活投資管
理合夥企業（有限合夥）)
("Gongqingcheng Investment")
Gongqingcheng Yagao Investment	Interest of a controlled	Unlisted shares	80,000,000(L)	8.89%	6.00%
Management Co., Ltd.* (共青城雅	corporation
高投資管理有限公司) (18)
Pan Zhiyong(19)	Interest of a controlled	Unlisted shares	80,000,000(L)	8.89%	6.00%
	corporation

- V-3 -

APPENDIX V		GENERAL INFORMATION
				Approximate	Approximate
				Percentage of	Percentage of
				the Relevant	A-Living's
	Capacity and Nature of	Class of	Number of	Class of Shares	Issued Share
Name of Shareholder	Interest	Shares(1)	Shares(2)	in Issue	Capital
State Street Bank &	Approved lending agent	Others	36,574,256(P)	8.44%	2.74%
Trust Company
Van Eck Associates Corporation	Investment manager	Overseas listed	25,350,000(L)	5.85%	1.90%
		foreign shares
CITIC Securities	Underwriter	Overseas listed	25,000,000(L)	5.77%	1.87%
Company Limited(20)		foreign shares	25,000,000(S)	5.77%	1.87%
	Interest of a controlled		912,750(L)	0.21%	0.07%
	corporation		912,750(S)	0.21%	0.07%
Citigroup Inc.(21)	Person having a security	Overseas listed	3,232,750(L)	0.75%	0.24%
	interest in shares	foreign shares
	Interest of a controlled		6,328,230(L)	1.46%	0.47%
	corporation		5,820,731(S)	1.34%	0.44%
	Approved lending agent		12,126,611(P)	2.80%	0.91%

Notes:

1. Unlisted shares of A-Living include domestic shares and unlisted foreign shares of A-Living.
2. The letters "L", "S" and "P" respectively denote the person's/corporation's long position, short position and lending pool position in the shares.
3. Zhongshan A-Living Enterprises Management Services Co., Ltd.* is wholly-owned by Deluxe Star International Limited and Deluxe Star International Limited is deemed under the SFO to be interested in the shares of A-Living held by Zhongshan A-Living Enterprises Management Services Co., Ltd.*
4. Deluxe Star International Limited is wholly-owned by Makel International (BVI) Limited and Makel International (BVI) Limited is deemed under the SFO to be interested in the shares of A-Living held by Deluxe Star International Limited.
5. Makel International (BVI) Limited is wholly-owned by Genesis Global Development (BVI) Limited and Genesis Global Development (BVI) Limited is deemed under the SFO to be interested in the shares of A-Living held by Makel International (BVI) Limited.
6. Genesis Global Development (BVI) Limited is wholly-owned by Eastern Supreme Group Holdings Limited and Eastern Supreme Group Holdings Limited is deemed under the SFO to be interested in the shares of A-Living held by Genesis Global Development (BVI) Limited.
7. Eastern Supreme Group Holdings Limited is wholly-owned by Agile Group Holdings Limited and Agile Group Holdings Limited is deemed under the SFO to be interested in the shares of A-Living held by Eastern Supreme Group Holdings Limited.
8. Full Choice Investments Limited is the trustee of Chen's Family Trust, therefore, Full Choice Investments Limited is deemed under the SFO to be interested in the shares of A-Living held by Chen's Family Trust.

- V-4 -

APPENDIX V

GENERAL INFORMATION

1. Top Coast Investment Limited is the settlor of Chen's Family Trust, therefore, Top Coast Investment Limited is deemed under the SFO to be interested in the shares of A-Living held by Chen's Family Trust.
2. Each of Mr. Chen Zhuo Lin, Mr. Chan Cheuk Yin, Ms. Luk Sin Fong, Fion, Mr. Chan Cheuk Hung, Mr. Chan Cheuk Hei and Mr. Chan Cheuk Nam is the beneficiary of Chen's Family Trust, therefore, Mr. Chen Zhuo Lin, Mr. Chan Cheuk Yin, Ms. Luk Sin Fong, Fion, Mr. Chan Cheuk Hung, Mr. Chan Cheuk Hei and Mr. Chan Cheuk Nam are deemed under the SFO to be interested in the shares of A-Living held by Chen's Family Trust. In addition, by virtue of the SFO, Ms. Luk Sin Fong, Fion is deemed to be interested in the shares of A-Living held by her spouse, Mr. Chen Zhuo Lin.
3. By virtue of the SFO, Ms. Zheng Huiqiong is deemed to be interested in the shares of A-Living held by her spouse, Mr. Chan Cheuk Yin.
4. By virtue of the SFO, Ms. Lu Liqing is deemed to be interested in the shares of A-Living held by her spouse, Mr. Chan Cheuk Hung.
5. By virtue of the SFO, Ms. Lu Yanping is deemed to be interested in the shares of A-Living held by her spouse, Mr. Chan Cheuk Hei.
6. By virtue of the SFO, Ms. Chan Siu Na is deemed to be interested in the shares of A-Living held by her spouse, Mr. Chan Cheuk Nam.
7. Ningbo Lvjin Investment Management Co., Ltd.* is wholly-owned by Greenland Financial Holdings Group Co., Ltd., and Greenland Financial Holdings Group Co., Ltd. is deemed under the SFO to be interested in the shares of A-Living held by Ningbo Lvjin Investment Management Co., Ltd.*.
8. Greenland Financial Holdings Group Co., Ltd. is wholly-owned by Greenland Holding Group* and Greenland Holding Group* is deemed to be interested in the shares of A-Living held by Greenland Financial Holdings Group Co., Ltd.
9. Greenland Holding Group* is wholly-owned by Greenland Holdings, and Greenland Holdings is deemed under the SFO to be interested in the shares held by Greenland Holding Group*.
10. Gongqingcheng Yagao Investment Management Co., Ltd.* is a general partner of and has full control over Gongqingcheng Investment. Gongqingcheng Yagao Investment Management Co., Ltd.* is deemed to be interested in the shares of A-Living held by Gongqingcheng Investment.
11. Gongqingcheng Yagao Investment Management Co., Ltd.* is wholly-owned by Mr. Pan Zhiyong, and Mr. Pan Zhiyong is a senior management member of Agile Group Holdings Limited. Mr. Pan Zhiyong is deemed under the SFO to be interested in the shares of A-Living held by Gongqingcheng Yagao Investment Management Co., Ltd.*
12. CLSA Limited and CSI Capital Management Limited are wholly-owned by CITIC Securities Company Limited and CITIC Securities Company Limited is deemed under the SFO to be interested in the shares of A-Living held by CLSA Limited and CSI Capital Management Limited.
13. Citibank, N.A. and Citigroup Global Markets Hong Kong Limited are wholly-owned by Citigroup Inc, while Citigroup Global Markets Limited is a subsidiary of Citigroup Inc. Hence, Citigroup Inc. is deemed under the SFO to be interested in the shares of A-Living held by Citibank, N.A., Citigroup Global Markets Hong Kong Limited and Citigroup Global Markets Limited.

- V-5 -

APPENDIX V

GENERAL INFORMATION

1. A-LIVINGDIRECTORS' AND A-LIVING SUPERVISORS' INTEREST IN CONTRACTS AND ASSETS
2. 1. As at the Latest Practicable Date, none of the A-Living Directors nor A-Living Supervisors had any interest, direct or indirect, in any assets which had been acquired or disposed of by, or leased to, any member of the Enlarged Group or were proposed to be acquired or disposed of by, or leased to, any member of the Enlarged Group since 31 December 2018, being the date to which the latest published audited consolidated financial statements of A-Living were made up.
   2. Other than those disclosed in the section headed "Continuing Connected Transactions" in the annual report of A-Living for the year ended 31 December 2018 and the announcement in respect of continuing connected transactions published on 15 August 2019, none of the A-Living Directors nor A-Living Supervisors was materially interested in any contract or arrangement as at the Latest Practicable Date which was significant in relation to the business of the Enlarged Group.
3. A-LIVINGDIRECTORS' AND A-LIVING SUPERVISORS' SERVICE CONTRACTS

As at the Latest Practicable Date, none of the A-Living Directors nor A-Living Supervisors had any existing or proposed service contracts with any member of the Enlarged Group which is not expiring or determinable by such member of the A-Living Group within one year without payment of compensation (other than statutory compensation).

5. A-LIVING DIRECTORS' AND A-LIVING SUPERVISORS' INTEREST IN COMPETING BUSINESS

As at the Latest Practicable Date, none of the A-Living Directors nor A-Living Supervisors or their respective close associates was interested in any business which competes or is likely to compete, either directly or indirectly, with the businesses of the Enlarged Group.

6. LITIGATION

As at the Latest Practicable Date, there were no litigation or claims of material importance known to the A-Living Directors to be pending or threatened against any member of the Enlarged Group.

- V-6 -

APPENDIX V

GENERAL INFORMATION

7. MATERIAL CONTRACTS

The following contracts (being contracts entered into outside the ordinary course of business carried on by the A-Living Group) have been entered into by members of the A-Living Group within the two years immediately preceding the Latest Practicable Date and are or may be material:

1. the CMIG PM Agreement;
2. the New CMIG PM Agreement;
3. the agreement entered into between Tianjin Lexianghui Community Services Co., Ltd.* (天津樂享薈社區服務有限公司) (an indirect wholly-ownedsubsidiary of A-Living)("Tianjin Lexianghui"), Guangdong Yingmei Yihao Equity Investment Partnership (Limited Partnership)* (廣東盈美壹號股權投資 合夥企業（有限合夥）) ("Guangdong Yingmei Yihao"), Guangzhou Yuehua Property Co., Ltd.* (廣州粵華物業有限公司) ("Guangzhou Yuehua") and the shareholders holding an aggregate of 49% equity interest in Guangzhou Yuehua as at the date of the relevant agreement on 28 March 2019 and pursuant to which Tianjin Lexianghui agreed to acquire, and Guangdong Yingmei Yihao agreed to dispose of, 51% equity interest in Guangzhou Yuehua at a consideration of RMB195,344,575;
4. the formal agreement entered into between A-Living, Mr. Song Guodong, Ms. Li Liguang and Harbin Jingyang Property Management Co., Ltd.* (哈爾濱景陽 物業管理有限公司) ("Harbin Jingyang") on 26 February 2019 and pursuant to which A-Living agreed to acquire, and Mr. Song Guodong and Ms. Li Liguang agreed to dispose of, an aggregate of 60% equity interest in Harbin Jingyang at a total consideration of RMB113,881,542;
5. the share transfer agreement entered into between A-Living, Mr. Liang Fudong, Ms. Chang Qiaoe, Ms. Xu Meng, Qingdao Huaren Property Co., Ltd.* (青島華仁物業股份有限公司) ("Qingdao Huaren") and the shareholders holding an aggregate of 8.04% shares in Qingdao Huaren as at the date of the share transfer agreements on 23 January 2019 and pursuant to which A-Living agreed to acquire, and Mr. Liang Fudong, Ms. Chang Qiaoe and Ms. Xu Meng agreed to dispose of, in aggregate, 69.6643% shares in Qingdao Huaren at a total consideration of RMB103,784,857.26;
6. the share transfer agreement entered into between A-Living, CMIG Youjia and Qingdao Huaren on 23 January 2019 and pursuant to which A-Living agreed to acquire, and CMIG Youjia agreed to dispose of 20% shares in Qingdao Huaren at a total consideration of RMB29,795,708.06;
7. the equity transfer agreement entered into between A-Living, Mr. Yang Minzhao, Mr. Yang Jialin and Lanzhou Chengguan Property Services Group Co., Ltd.* (蘭州城關物業服務集團有限公司)("Lanzhou Chengguan") on 11 July

- V-7 -

APPENDIX V

GENERAL INFORMATION

2018 and pursuant to which A-Living agreed to acquire, and the Vendors agreed to dispose of, in aggregate, 51% equity interest in Lanzhou Chengguan at a total consideration of RMB147,900,000; and

1. the equity transfer agreement entered into between A-Living as the purchaser, Mr. Zhang Sheng, Ms. Liu Juan, Mr. Wu Ji, Nanjing Zizhu Asset Management Company Limited* (南京紫竹資產管理有限公司), Nanjing Gucang Agricultural Development Company Limited* (南京穀倉農業發展有限公司) and Mr. Zhang Zeyu as the vendors and Nanjing ZiZhu Property Management Co., Ltd.* (南 京紫竹物業管理股份有限公司)("Nanjing Zizhu") on 9 April 2018 and pursuant to which A-Living agreed to acquire, and the vendors agreed to dispose of, in aggregate, 51% equity interest in Nanjing Zizhu at a total consideration of RMB204,812,325.

8. EXPERT AND CONSENT

The following is the qualification of the expert who has given opinion or advice

which is contained in this circular:

Name	Qualification
PricewaterhouseCoopers	Certified Public Accountants
Jones Lang LaSalle	Independent professional valuer
Corporate Appraisal
and Advisory Limited
(JLL)

As at the Latest Practicable Date, each of the experts named above:

1. had no shareholding in any member of the A-Living Group and did not have any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in any member of the A-Living Group;
2. had no direct or indirect interest in any assets which had been, since 31 December 2018 (being the date to which the latest published audited consolidated financial statements of the A-Living Group were made up), acquired, disposed of by, or leased to any member of the A-Living Group, or were proposed to be acquired, disposed of by, or leased to any member of the A-Living Group; and
3. had given and had not withdrawn its written consent to the issue of this circular with the inclusion of its letter/report and the reference to its name included herein in the form and context in which it appears.

- V-8 -

APPENDIX V

GENERAL INFORMATION

1. MISCELLANEOUS INFORMATION
2. 1. The registered office of A-Living is at Management Building, Xingye Road, Agile Garden, Sanxiang Town, Zhongshan, Guangdong Province, PRC.
   2. The principal place of business of A-Living in Hong Kong is at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong.
   3. The H share registrar and transfer office of A-Living is Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong.
   4. The joint company secretaries of A-Living are Mr. Li Dalong and Ms. Choy Yee Man.
3. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at 18th Floor, Three Pacific Place, 1 Queen's Road East, Hong Kong during normal business hours from the date of this circular up to and including the date of the A-Living EGM:

1. the articles of association of A-Living;
2. the prospectus of A-Living;
3. the annual reports of A-Living for the years ended 31 December 2017 and 2018;
4. the interim report of A-Living for the six months ended 30 June 2019;
5. the letter from the Board, the text of which is set out in the section headed "Letter from the Board" in this circular;
6. the accountant's report on the CMIG PM Group issued by PricewaterhouseCoopers set out in Appendix II to this circular;
7. the report on the unaudited pro forma financial information of the Enlarged Group issued by PricewaterhouseCoopers as set out in Appendix III to this circular;
8. the material contracts referred to in the paragraph headed "7. Material Contracts" in this appendix;
9. the written consents referred to in the paragraph headed "8. Expert and Consent" in this appendix;
10. the valuation report issued by Jones Lang LaSalle Corporate Appraisal and Advisory Limited (JLL) for the purpose of preparing the unaudited pro forma financial information of the Enlarged Group as set out in Appendix III to this circular;
11. the Valuation Report;
12. this circular.

- V-9 -

NOTICE OF A-LIVING EGM

A-LIVING SERVICES CO., LTD.*

雅居樂雅生活服務股份有限公司

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 3319)

NOTICE OF THE 2020 SECOND EXTRAORDINARY GENERAL

MEETING TO BE HELD ON 17 MARCH 2020

NOTICE IS HEREBY GIVEN THAT the 2020 second extraordinary general meeting (the "EGM") of the shareholders of A-Living Services Co., Ltd. ("A-Living") will be held at Conference Room, 33/F, Agile Center, 26 Huaxia Road, Zhujiang New Town, Tianhe District, Guangzhou, Guangdong Province, PRC, at 10:00 a.m. on Tuesday, 17 March 2020 for the purpose of considering and, if thought fit, passing (with or without amendments) the following resolution as a special resolution of A-Living:

SPECIAL RESOLUTION

1. "THAT:

1. the acquisition agreement (the "CMIG PM Agreement") dated 25 September 2019 entered into between 天津雅潮企業管理諮詢有限公司 (Tianjin Yachao Enterprise Management Consulting Co., Ltd.*) (the "Purchaser") and 廣東豐信盈隆股權投資合夥企業（有限合夥）
   (Guangdong Fengxin Yinglong Equity Investment Partnership (Limited Partnership*) (the "Vendor") (a copy of which has been produced to the EGM marked "A" for the purpose of identification), pursuant to which the Purchaser has conditionally agreed to acquire, and the Vendor has conditionally agreed to dispose of the 60% equity interest in 中民未來物 業服務有限公司 (CMIG Futurelife Property Management Limited*) at the total consideration of RMB1,560,000,000 and the transactions contemplated thereby be and are hereby approved, confirmed and ratified;
2. the directors of A-Living be and are hereby authorised to do all such acts, deeds and things and to sign, execute and deliver all such documents as they may, in their absolute discretion, consider necessary, desirable or expedient to give effect, determine, revise, supplement or complete any matters relating to or in connection with the CMIG PM Agreement and the transactions contemplated thereunder."

Yours faithfully,

On behalf of the Board of

A-Living Services Co., Ltd.

LI Dalong

Company Secretary

Hong Kong, 24 February 2020

- EGM-1 -

NOTICE OF A-LIVING EGM

Registered office in the PRC:	Principal place of office in the PRC:
Management Building, Xingye Road	35/F, Agile Center
Agile Garden, Sanxiang Town	26 Huaxia Road
Zhongshan	Zhujiang New Town
Guangdong Province, PRC	Tianhe District, Guangzhou
	Guangdong Province, PRC

Principal place of business in Hong Kong:

Level 54, Hopewell Centre

183 Queen's Road East

Hong Kong

Notes:

1. The resolution at the EGM will be taken by poll pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules"). The results of the poll will be published on the websites of The Stock Exchange of Hong Kong Limited (http://www.hkexnews.hk) and A-Living (http://www.agileliving.com.cn) in accordance with the Listing Rules.
2. All shareholders of A-Living are eligible for attending the EGM. Any shareholder of A-Living entitled to attend and vote at the EGM convened by the above notice is entitled to appoint a proxy or more than one proxy to attend the EGM and to cast a vote for him/her. A proxy need not be a shareholder of A-Living. If more than one proxy is appointed, the number of shares in respect of which each such proxy so appointed must be specified in the relevant proxy form. Every shareholder of A-Living present in person or by proxy shall be entitled to one vote for each share held by him/her.
3. In order to be valid, the proxy form together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy thereof, must be completed and returned to (i) A-Living's principal place of office in the People's Republic of China (the "PRC") at 35th Floor, Agile Center, 26 Huaxia Road, Zhujiang New Town, Tianhe District, Guangzhou, Guangdong Province, PRC (for shareholders of Domestic Shares and Unlisted Foreign Shares) or (ii) A-Living's H Share Registrar, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong (for shareholders of H Shares) not less than 24 hours before the time scheduled for the EGM. Completion and return of the proxy form will not preclude a shareholder of A-Living from attending and voting at the EGM or any adjourned meeting thereof should he/she so wish.
4. For determining the entitlement to attend and vote at the EGM, the register of members of A-Living has been closed from Monday, 17 February 2020 to Tuesday, 17 March 2020, both dates inclusive, during which period no transfer of shares will be registered. In order to qualify for attending and voting at the EGM, shareholders of H Shares whose transfer documents have not been registered are required to submit the share certificates together with the properly completed share transfer forms to A-Living's H Share Registrar, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong not later than 4:30 p.m. on Friday, 14 February 2020 for registration. Shareholders of H Shares who are registered with Tricor Investor Services Limited on or before the aforementioned date are entitled to attend the EGM.
5. The EGM is expected to take no more than half a day. Shareholders of A-Living who attend the EGM (in person or by proxy) shall bear their own travelling and accommodation expenses. Shareholders of A-Living may contact the Investor Relations Department of A-Living at (852) 2740 8921 (telephone number) and [e-mail] for any enquires in respect of the EGM.

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NOTICE OF A-LIVING EGM

As at the date of this circular, the board of directors of A-Living Services Co., Ltd.* comprises eight members, being Mr. Chan Cheuk Hung^ (Co-chairman), Mr. Huang Fengchao^ (Co-chairman, Chief Executive Officer and General Manager), Mr. Feng Xin^, Mr. Wei Xianzhong^^, Ms. Yue Yuan^^, Mr. Wan Kam To^^^, Mr. Wan Sai Cheong, Joseph^^^ and Mr. Wang Peng^^^.

• Executive Directors

• Non-executiveDirectors

• Independent Non-executive Directors
  * for identification purposes only

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