Beijing North Star : CONNECTED TRANSACTION IN RELATION TO ENTERING INTO GENERAL CONSTRUCTION CONTRACT

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CONNECTED TRANSACTION IN RELATION TO

ENTERING INTO GENERAL CONSTRUCTION CONTRACT

On 27 February 2020, Changsha North Star, a subsidiary of the Company (as the principal) entered into the General Construction Contract with CCSEB (as the contractor) in respect of the construction of the Changsha Project, pursuant to which CCSEB agreed to undertake the construction of the Changsha Project, be responsible for the civil works, installation and construction, water supply and drainage, fire protection, electrical engineering and other works under the Changsha Project.

IMPLICATIONS UNDER THE LISTING RULES

CCSEB is a substantial shareholder of Hangzhou North Star, a subsidiary of the Company. Therefore, CCSEB is a connected person at subsidiary level of the Company. Accordingly, the transactions contemplated under the General Construction Contract constitute connected transactions of the Company under Chapter 14A of the Listing Rules. One or more of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules exceed 5%. However, since the Board has approved the General Construction Contract, and the independent non-executive Directors of the Company have confirmed that the General Construction Contract was entered into on normal commercial terms and in the ordinary and usual course of business of the Group, and the terms are fair and reasonable and in the interests of the Company and the Shareholders as a whole, pursuant to Rule 14A.101 of the Listing Rules, the transactions contemplated under the General Construction Contract are exempt from the circular, independent financial advice and shareholders' approval requirements under Chapter 14A of the Listing Rules.

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1. GENERAL CONSTRUCTION CONTRACT

On 27 February 2020, Changsha North Star, a subsidiary of the Company, entered into the General Construction Contract with CCSEB in respect of the construction of the Changsha Project. The principal terms of the General Construction Contract are summarised as follows:

Date:	27 February 2020
Parties:	(i) Changsha North Star, as the principal
	(ii) CCSEB, as the contractor
Project scope:	Pursuant to the requirements under the General
	Construction Contract, CCSEB is responsible for the
	civil works, installation and construction, water supply
	and drainage, fire protection, electrical engineering and
	other works under the Changsha Project, with a GFA of
	334,675.75 square meters.
Contract period:	1,126 days
Construction contract	The Group invited public tender for the construction
price:	works under the General Construction Contract, and
	selected CCSEB as the tender winner after conducting
	relevant evaluation procedures and taking consideration
	of various factors, including technical experience,
	professional qualifications, business reputation, project
	management abilities of all the tenderers, total expenses
	and other relevant factors.
	The total contract price under the General Construction
	Contract was approximately RMB695,340,550.71,
	which was determined on arm's length basis after
	considering (i) all services required by Changsha North
	Star in terms of the Changsha Project and (ii) relevant
	design, procurement and prevailing market conditions of
	each construction project. The Board is of the view that
	the total contract price is fair and reasonable.
	The total contract price is expected to be funded by
	internal resources of the Group.

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Payment terms:	The total contract price shall be payable on a monthly
	basis based on construction progress. However, after the
	construction project is completed, accepted and settled,
	the payment made by Changsha North Star to CCSEB
	shall not exceed 97% of the total settlement amount, and
	the remaining 3%, as the quality guarantee deposit, shall
	be paid upon expiry of the defect liability period.
Performance guarantee:	Within seven days after entering into the General
	Construction Contract, CCSEB shall submit to
	Changsha North Star a bank performance guarantee in
	an aggregate amount equivalent to 10% of the contract
	price and in the form as required by Changsha North
	Star.

2. REASONS FOR AND BENEFITS OF ENTERING INTO OF THE GENERAL CONSTRUCTION CONTRACT

It is within the normal business course of the Group to advance the construction of the Changsha Project and develop properties on the Changsha Land Lot. As a wholly-owned subsidiary of China State Construction Engineering Corporation Ltd. (one of the top 500 enterprises in the world), CCSEB possesses special-grade qualification as general contractor for construction of housing projects issued by the Ministry of Housing and Urban-Rural Development of the People's Republic of China. After due and careful consideration and comprehensive evaluation of the tenderers in terms of project quotation, qualification, experience and project quality, the Group selected CCSEB as the general contractor of the Changsha Project in accordance with relevant laws. The Group is of the view that, entering into of the General Construction Contract is vital to the advancement of the Changsha Project and enables the Company to benefit from the development of its principal business.

The Directors, including independent non-executive Directors, have confirmed that the terms of the General Construction Contract are fair and reasonable, and the transactions contemplated thereunder are on normal commercial terms or better in the ordinary and usual course of business of the Group, and in the interests of the Company and its shareholders as a whole. No Director has any material interest in the transactions contemplated under the General Construction Contract.

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1. IMPLICATIONS UNDER THE LISTING RULES
   CCSEB is a substantial shareholder of Hangzhou North Star, a subsidiary of the Company. Therefore, CCSEB is a connected person at subsidiary level of the Company. Accordingly, the transactions contemplated under the General Construction Contract constitute connected transactions of the Company under Chapter 14A of the Listing Rules. One or more of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules exceed 5%. However, since the Board has approved the General Construction Contract, and the independent non-executive Directors of the Company have confirmed that the General Construction Contract was entered into on normal commercial terms and in the ordinary and usual course of business of the Group, and the terms are fair and reasonable and in the interests of the Company and the Shareholders as a whole, pursuant to Rule 14A.101 of the Listing Rules, the transactions contemplated under the General Construction Contract are exempt from the circular, independent financial advice and shareholders' approval requirements under Chapter 14A of the Listing Rules.
2. GENERAL INFORMATION
   The Company is principally engaged in development properties and investment properties (including hotels). Changsha North Star is principally engaged in the development of properties in Changsha, the PRC.
   CCSEB is principally engaged in businesses such as general contracting of housing construction, infrastructure, industrial installation and engineering design.
3. DEFINITIONS

"Board"	the board of Directors of the Company;
"CCSEB"	China Construction Second Engineering Bureau Ltd., a
	company incorporated in the PRC;
"Changsha North Star"	Changsha North Star Real Estate Development Co.,
	Limited, a subsidiary of the Company;
"Changsha Land Lot"	the land lot located at Xinhe Delta, Kaifu District,
	Changsha City, Hunan Province ( 湖 南 省 長 沙 市 開 福
	區 新 河 三 角 洲);
"Changsha Project"	the construction and installation works of North Star
	Xinhe Delta project ( 北 辰 新 河 三 角 洲 項 目) in Area
	D4 on the Changsha Land Lot;

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"Company"	Beijing North Star Company Limited ( 北 京 北 辰
	實 業 股 份 有 限 公 司), a sino-foreign joint venture
	joint stock limited company incorporated in the PRC,
	whose A shares and H shares are listed and traded on
	the Shanghai Stock Exchange and the Stock Exchange
	respectively;
"connected person(s)"	has the meaning ascribed to it under the Listing Rules;
"Director(s)"	the directors of the Company;
"General Construction	the general contraction contract on construction and
Contract"	installation works entered into between Changsha
	North Star (as principal) and CCSEB (as contractor) in
	respect of the Changsha Project on 27 February 2020,
	the details of which are set out in the section headed
	"General Construction Contract" in this announcement;
"Group"	the Company and its subsidiaries;
"Hangzhou North Star"	Hangzhou North Star Real Estate Co., Limited ( 杭 州 北
	辰 置 業 有 限 公 司), a company established in the PRC
	and a wholly-owned subsidiary of the Company;
"Hong Kong"	the Hong Kong Special Administrative Region of the
	PRC;
"Listing Rules"	the Rules Governing the Listing of Securities on the
	Stock Exchange;
"PRC"	the People's Republic of China, which for the purpose
	of this announcement excludes Hong Kong, the Macau
	Special Administrative Region and Taiwan;
"RMB"	Renminbi, the lawful currency of the PRC;
"Stock Exchange"	The Stock Exchange of Hong Kong Limited; and
"%"	Percentage.
	By order of the Board
	BEIJING NORTH STAR COMPANY LIMITED
	GUO Chuan
	Executive Director and Company Secretary

Beijing, the PRC, 27 February 2020

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As at the date of this announcement, the Board comprises nine directors, of whom six are executive directors, namely, Mr. HE Jiang-Chuan, Mr. LI Wei-Dong, Ms. LI Yun, Mr. CHEN De-Qi, Ms. ZHANG Wen-Lei and Mr. GUO Chuan and three are independent non-executive directors, namely, Mr. FU Yiu-Man, Mr. DONG An-Sheng and Mr. WU Ge.

Should there be any differences between the Chinese and English versions of this announcement, the Chinese version shall prevail.

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