China Huajun : INSIDE INFORMATION UPDATE ON LEGAL PROCEEDINGS ON BREACH OF LOAN AGREEMENT

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This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company.

CHINA HUAJUN GROUP LIMITED ʕ਷ശёණྠ Ϟࠢʮ̡

(Incorporated in Bermuda with limited liability)

(Stock Code: 377)

INSIDE INFORMATION UPDATE ON LEGAL PROCEEDINGS ON BREACH OF LOAN AGREEMENT

This announcement is made by China Huajun Group Limited (the "Company", together with its subsidiaries, the "Group") pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and Rule 13.19 of the Listing Rules.

Reference is made to the previous inside information announcement of the Company dated 31 December 2020 (the "Announcement") in relation to the legal proceedings (the "Legal Proceedings") initiated by the Shanghai branch of China Great Wall Asset Management Co., Ltd.* €ʕ਷ڗ۬༟ପ၍ଣϞࠢʮ̡ɪऎʱʮ̡(the "Lender", which is an independent third party of the Company) against Baohua Real Estate (Dalian) Co., Ltd.* €ڭശήପ€ɽஹϞࠢʮ ̡(the "Subsidiary", an indirect wholly-owned subsidiary of the Company). Unless otherwise defined in this announcement, all capitalised terms used herein shall have the same meanings as those defined in the Announcement.

The Company would like to update the Shareholders and the potential investors of the Company in respect of the progress of the Legal Proceedings in this announcement.

The Shanghai Finance Court €ɪऎږፄج৫ issued a notice of execution €ੂБஷࣣٝ dated 5 February 2021 to Huajun Holdings Group Co., Ltd*€ശёછٰණྠϞࠢʮ̡, which is a private company wholly owned by Mr. Meng Guang Bao ("Mr. Meng") (executive director and chairman of the Company) and his spouse, which was received on 18 February 2021. The Company was notified about the receipt of such notice through Mr. Meng.

As the Group has not received any documents in relation to the Legal Proceedings, the Group has recently arranged its PRC lawyer to obtain directly from the Shanghai Financial Court the (i) Notice of Execution* €ੂБஷࣣٝ dated 5 February 2021 issued by The Shanghai Financial Court €ɪऎږፄج৫ against Baohua Real Estate Development (Shanghai) Co., Ltd* €ڭശ גήପක೯€ɪऎϞࠢʮ̡ ("Baohua Shanghai"), a subsidiary of the Company who is the borrower of the Loan, pursuant to which Baohua Shanghai is ordered to pay the outstanding balance of the Loan plus interests to the Lender; (ii) Asset Report Order* €జѓৌପ˿ dated 5 February 2021 issued by The Shanghai Financial Court €ɪऎږፄج৫ against the Subsidiary, Baohua Shanghai, the Company and Huajun Holdings Group Co., Ltd* €ശёછٰ ණྠϞࠢʮ̡ , who are collectively guarantors of the Loan secured by the Subsidiary (the "Guarantors"), pursuant to which the Guarantors are required to report their assets and relevant financial information to the court; and (iii) Execution Certificate*€ੂБᗇࣣdated 11 January 2021 issued by the Shanghai Huangpu Notary Public Office* €ʕശɛ͏΍ձ਷ɪऎ̹රऌ ʮ൛ஈ , pursuant to which the Lender can use the Execution Certificate for application to the relevant courts of the People's Republic of China for enforcement.

The guarantor, Huajun Holdings Group Co., Ltd. has submitted an application for non-enforcement to the Shanghai Financial Court in accordance with the law, and is waiting for the court to decide whether to terminate the enforcement. The Company is currently seeking legal advice, and will make further announcement(s) to keep its shareholders and investors informed of any significant development of the abovementioned legal proceedings as and when appropriate.

Shareholders of the Company and potential investors are advised to exercise caution when dealing in securities of the Company.

By Order of the Board

China Huajun Group Limited

Meng Guang Bao

Chairman and Executive Director

Hong Kong, 5 March 2020

As at the date of this announcement, the Board comprises Mr. Meng Guang Bao, Ms. Zhang Ye, Ms. Huang Xiumei and Mr. Bao Limin as executive Directors; and Mr. Zheng Bailin, Mr. Shen Ruolei and Mr. Pun Chi Ping as independent non-executive Directors.

If there is any inconsistency in this announcement between the Chinese and English versions, the English version shall prevail.

*For identification purpose only