China Logistics Property : PROPOSED ISSUE OF US$100,000,000 CONVERTIBLE BONDS DUE 2025 UNDER SPECIFIC MANDATE AND NOTICE OF EXTRAORDINARY GENERAL MEETING

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in China Logistics Property Holdings Co., Ltd, you should at once hand this circular, together with the enclosed proxy form, to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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.

China Logistics Property Holdings Co., Ltd

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1589)

PROPOSED ISSUE OF

US$100,000,000 6.95% CONVERTIBLE BONDS DUE 2025

UNDER SPECIFIC MANDATE

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

A letter from the Board is set out on pages 9 to 35 of this circular. A notice convening the EGM to be held at Meeting Room, 8/F, Block A, No. 1899 Shenkun Road, Minhang District, Shanghai, China on Friday, 14 August 2020 at 2:00 p.m. is set out on pages EGM-1 to EGM-2 of this circular. A proxy form for use at the EGM is enclosed with this circular. Such form of proxy is also published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.cnlpholdings.com) respectively.

Whether or not you are able to attend the EGM, you are requested to complete the accompanying proxy form in accordance with the instructions printed thereon and return the same to the share registrar of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the appointed time for holding of the EGM (i.e. not later than 2:00 p.m. on Wednesday, 12 August 2020 (Hong Kong Time)) or any adjourned meeting. Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

27 July 2020

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Appendix I - General Information . . . . . . . . . . . . . . . . . . . . . . . .	I-1
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . .	EGM-1

- i -

DEFINITIONS

In this circular, the following expressions have the following meanings unless the context otherwise requires:

"2015 SYPI Group	the non-exempt continuing connected transactions between the Group and
	Transactions"	the SYPI Group, as disclosed in the Prospectus
"2017 Property Lease	the continuing connected transactions between the Group and the SYPI
	Transactions"	Group, as disclosed in the announcement and circular of the Company
		dated 19 April 2017 and 11 May 2017, respectively, and as approved by
		the Independent Shareholders at the extraordinary general meeting of the
		Company held on 8 June 2017
"Adjusted Treasury Rate"	with respect to any redemption date, (i) the yield, under the heading
		which represents the average for immediately preceding week, appearing
		in the most recently published statistical release designated "H.15(519)"
		or any successor publication which is published weekly by the Board
		of Governors of the Federal Reserve System and which establishes
		yields on actively traded United States Treasury securities adjusted to
		constant maturity under the caption "Treasury Constant Maturities", for
		the maturity corresponding to the comparable U.S. Treasury security
		(if no maturity is within three (3) months before or after the Maturity
		Date, yields for the two published maturities most closely corresponding
		to the comparable U.S. Treasury security shall be determined and the
		Adjusted Treasury Rate shall be interpolated or extrapolated from such
		yields on a straight line basis, rounding to the nearest month) or (ii) if
		such release (or any successor release) is not published during the week
		preceding the calculation date or does not contain such yields, the rate
		per year equal to the semi-annual equivalent yield to maturity of the
		comparable U.S. Treasury security, assuming a price for the comparable
		U.S. Treasury security (expressed as a percentage of its principal amount)
		equal to the comparable treasury price for such redemption date, in each
		case calculated on the third business day immediately preceding the
		redemption date
"Affiliate"	with respect to any Person, any other Person (1) directly or indirectly
		controlling, controlled by, or under direct or indirect common control
		with, such Person; (2) who is a director or officer of such Person or any
		Subsidiary of such Person or of any Person referred to in clause (1) of this
		definition; or (3) who is a spouse or any person cohabiting as a spouse,
		child or step-child, parent or step-parent, brother, sister, step-brother or
		step-sister,parent-in-law, grandchild, grandparent, uncle, aunt, nephew
		and niece of a Person described in clause (1) or (2). For purposes of this
		definition, "control" (including, with correlative meanings, the terms
		"controlling," "controlled by" and "under common control with"), as
		applied to any Person, means the possession, directly or indirectly, of the

power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise

- 1 -

	DEFINITIONS
"Agency Agreement"	an agency agreement to be dated on or about the CP Satisfaction Date
	between the Company, the Subsidiary Guarantors, the Trustee and the
	agents named therein
"Agreed Rate"	the rate of exchange between US$ and HK$ at the rate of US$1 to
	HK$7.7505
"Alternative Stock Exchange"	means, at any time, in the case of the Shares, if they are not at that time
	listed and traded on the Stock Exchange, such other internationally
	recognised stock exchange which is the principal stock exchange or
	securities market on which the Shares are then listed or quoted or dealt in
"Announcements"	the announcements made by the Company dated 29 June 2020 and 7 July
	2020
"Applicable Premium"	with respect to any Bond at any redemption date, the greater of (1) 1.00%
	of the principal amount of such Bond and (2) the excess of (i) the present
	value at such redemption date of (a) the principal amount of such Bond,
	plus (b) all required remaining scheduled interest payments due on such
	Bond through the Maturity Date (but excluding accrued and unpaid
	interest to the redemption date), computed using a discount rate equal
	the Adjusted Treasury Rate plus 100 basis points commencing on the
	applicable redemption date and ending on the Maturity Date, over (ii) the
	principal amount of such Bond on such redemption date
"August 2020 Notes"	the U.S. dollar-denominated senior secured notes due 8 August 2020
	issued by the Company in the outstanding principal amount of
	US$139,200,000
"Board"	the board of Directors
"Bondholders"	holders of the Bonds
"Bonds"	6.95% convertible bonds due 2025 with an aggregate principal amount of
	US$100,000,000 to be issued by the Company
"Bond Issue"	the issue of the Bonds by the Company
"Capital Stock"	with respect to any Person, any and all shares, interests, participations or
	other equivalents (however designated, whether voting or non-voting) in
	equity of such Person, whether outstanding on the Closing Date or issued
	thereafter

- 2 -

		DEFINITIONS
"Change of Control"	the occurrence of any of the following events:
	(i)	the Company consolidates with or merges into, or directly or indirectly
		sells, transfers, conveys or otherwise disposes (other than by way of
		merger or consolidation) in one or a series of related transactions,
		all or substantially all of the assets or properties of the Company and
		its Restricted Subsidiaries, taken as a whole, to any other Person or
		Persons (other than one or more Permitted Holders), acting together,
		unless the consolidation, merger, sale, transfer, conveyance or
		disposal will not result in the other Person or Persons, acting together,
		acquiring Control over the Company or its successor entity;
	(ii)	the Permitted Holders being the beneficial owners of less than
		20.0% of the total voting power of the voting stock of the Company;
	(iii)	any "person" or "group" (as such terms are used in Sections 13(d)
		and 14(d) of the Exchange Act) (other than RRJ Capital) being or
		becoming the "beneficial owner" (as such term is used in Rule 13d-
		3 of the Exchange Act), directly or indirectly, of total voting power
		of the voting stock of the Company greater than such total voting
		power held beneficially by the Permitted Holders;
	(iv)	the individuals who on the Closing Date constituted the Board,
		together with any new directors whose election by the board of
		directors was approved by a vote of at least a majority of the
		directors then still in office who were either directors or whose
		election was previously so approved, ceasing for any reason to
		constitute a majority of the Board then in office; or
	(v)	the adoption of a plan relating to the liquidation or dissolution of the
		Company.
	For the avoidance of doubt for purposes of this "Change of Control"
	definition, a sale of shares of Capital Stock of a PRC Restricted
	Subsidiary which holds all or substantially all properties and assets of
	the Company and its Restricted Subsidiaries to independent third parties
	in an initial public offering and listing on a stock exchange of the share
	of Capital Stock of such PRC Restricted Subsidiary where such PRC
	Restricted Subsidiary (i) remains a Restricted Subsidiary immediately
	after such sale and (ii) the Company, immediately after such sale, owns,
	directly or indirectly, at least 30.0 per cent of the Voting Stock of such
	PRC Restricted Subsidiary shall not constitute a sale of substantially all
	properties and assets of the Company and its Restricted Subsidiaries
"Closing Date"	the closing date for the issue of the Bonds, which is expected to be on
	23 November 2020 or such other date as shall be agreed between the
	Company and the Purchaser
"Company"	China Logistics Property Holdings Co., Ltd (中國物流資產控股有限公

司), a company incorporated in the Cayman Islands with limited liability, whose Shares are listed on the Main Board of the Stock Exchange

- 3 -

	DEFINITIONS
"Conditions"	the terms and conditions of the Bonds
"connected person"	has the meaning ascribed to it under the Listing Rules
"Control"	the acquisition or control of more than 50.0 per cent. of the voting rights
	of the issued share capital of the Company or the right to appoint and/
	or remove all or the majority of the members of the Company's board
	of directors or similar governing body, whether obtained directly or
	indirectly, and whether obtained by ownership of share capital, the
	possession of voting rights, contract or otherwise
"Conversion Shares"	Shares to be allotted and issued by the Company upon exercise of the
	conversion right attaching to the Bonds
"CP Satisfaction Date"	16 November 2020 or such other date as may be agreed between the
	Company, the Subsidiary Guarantors and the Purchaser
"Current Market Price"	in respect of a Share on a particular date, the average of the daily closing
	prices of one Share on each of the 10 consecutive trading days ending on
	and including (i) the trading day immediately preceding such date or (ii)
	if the relevant announcement was made after the close of trading on such
	date (being a trading day), such date of announcement
"Directors"	the directors of the Company
"EGM"	the general meeting of the Company to be convened for the purpose
	of considering and if thought fit, approving the Subscription and the
	transactions contemplated thereunder, including the grant of Specific
	Mandate to allot and issue the Conversion Shares
"Exchange Act"	the United States Securities Exchange Act of 1934, as amended
"Existing Bonds"	the 6.95% convertible bonds due 2024 in the principal amount of
	HK$1,109,000,000 issued by the Company on 25 June 2019
"Fair Market Value"	the price that would be paid in an arm's-length transaction between an
	informed and willing seller under no compulsion to sell and an informed
	and willing buyer under no compulsion to buy, as determined in good
	faith by the Board, whose determination shall be conclusive if evidenced
	by a Board resolution
"Group"	the Company and its subsidiaries
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"Hong Kong"	the Hong Kong Special Administrative Region of the People's Republic
	of China
"Initial Conversion Price"	HK$3.19 per Conversion Share subject to adjustment in the manner
	provided in the Conditions

- 4 -

	DEFINITIONS
"Initial Floor Conversion	HK$2.552 per Share, being the lowest conversion price which may be
Price"	adjusted and reset as a result of the conversion price resets in accordance
	with the Conditions (assuming no other adjustment to the conversion
	price having occurred prior to the relevant Reset Date)
"Latest Practicable Date"	24 July 2020, being the latest practicable date prior to the printing of this
	circular for ascertaining certain information contained herein
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock Exchange
"Material Adverse Effect"	a material adverse effect on the business, properties, rights, assets,
	management, position or condition (financial or otherwise), results of
	operations or prospects of the Company and its subsidiaries taken as
	a whole or on the performance by the Company and the Subsidiary
	Guarantors of their obligations under the Bonds or any of the transaction
	documents in relation thereto
"Maturity Date"	5 years from the Closing Date
"NDRC"	the National Development and Reform Commission of the PRC
"November 2020 Notes"	the U.S. dollar-denominated senior secured notes due 30 November
	2020 issued by the Company in the outstanding principal amount of
	US$84,000,000
"Permitted Holders"	(1) Mr. Li Shifa and Ms. Ma Xiaocui;
	(2) any Affiliate (other than an Affiliate as defined in clause (2) or (3)
	of the definition of Affiliate) or the estate trust and any immediate
	family members of any of the Persons specified in clause (1) or the
	legal representatives of any of the foregoing; and
	(3) any Person both the Capital Stock and Voting Stock of which (or in
	the case of a trust, the beneficial Interests in which) are owned 80%
	or more by one or more of the persons specified in clauses (1) and
	(2)
"Person"	any individual, corporation, partnership, limited liability company, joint
	venture, trust, unincorporated organization or government or any agency
	or political subdivision thereof
"PRC"	the People's Republic of China
"PRC Restricted Subsidiary"	a Restricted Subsidiary organized under the laws of the PRC
"Publication Date"	31 July 2020 or such other date as may be agreed between the Company,
	the Subsidiary Guarantors and the Purchaser, being the publication date of
	the information memorandum of the Bonds
"Purchaser"	BCC Leap Holdco, L.P.

- 5 -

	DEFINITIONS
"Relevant Securities"	any participation certificates and any depositary or other receipt,
	instrument, rights or entitlement representing interest in the Bonds, the
	Shares or other securities of the same class as them
"Relevant Shares"	916,488,000 Shares that Mr. Li Shifa holds as of the date of the
	undertaking provided by Mr. Li Shifa in relation to Subscription
	Agreement
"Reset Dates"	26 June 2021 and 26 June 2022
"Restricted Subsidiary"	any subsidiary of the Company other than an Unrestricted Subsidiary
"RRJ Capital"	RRJ Capital Master Fund II, L.P. (a limited partnership incorporated in
	the Cayman Islands) and is a substantial shareholder of the Company,
	Seatown Master Fund Moussedragon L.P. and their Affiliates
"September 2021 Notes"	the U.S. dollar-denominated senior secured notes due 25 September 2021
	issued by the	Company	in the	outstanding	principal	amount	of
	US$162,475,000
"SFO"	Securities and Futures Ordinance (Chapter 571 of the laws of Hong
	Kong), as amended from time to time
"Shareholders"	holders of Shares from time to time
"Shares"	ordinary shares of US$0.0000625 each in the capital of the Company
"Specific Mandate"	the specific mandate to be sought from the Shareholders at the EGM
	to grant the authority to the Board for the allotment and issue of the
	Conversion Shares as a result of the exercise of the conversion right
	attaching to the Bonds
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Subscription"	the subscription	of the	Bonds	in the total	principal	amount	of
	US$100,000,000 by the Purchaser pursuant to the Conditions
"Subscription Agreement"	the conditional placing and subscription agreement dated 29 June 2020
	entered into between the Company, the Subsidiary Guarantors and the
	Purchaser in relation to the issue of the Bonds
"Subsidiary Guarantees"	the guarantees provided by the Subsidiary Guarantors in respect of the
	obligations of the Company under the Trust Deed and the Bonds

- 6 -

	DEFINITIONS
"Subsidiary Guarantors"	certain subsidiaries of the Company which guarantee the payment of the
	Bonds pursuant to the Trust Deed and the Bonds, which as of the Latest
	Practicable Date include Yupei Sichuan Logistics Property Development
	Co., Limited, Yupei Harbin Logistics Properly Development Co.,
	Limited, Yupei Zhejiang Logistics Properly Development Co. Limited,
	Yupei Nantong Logistics Property Development Co., Limited, Yupei
	Jiangsu Logistics Property Development Co., Limited, Yupei Logistics
	Property Development 3 Co., Limited, Yupei Guangzhou Logistics
	Property Development Co., Limited, Hongkong Yupei Logistics Property
	Development Co., Limited, Yupei Logistics Property Development 6
	Co., Limited, Yupei Global Development Co., Limited, Yupei Southwest
	China Logistics Property Development Co., Limited, Yupei Logistics
	Property Development 8 Co., Limited, Yupei Logistics Property
	Development 1 Co., Limited, Yupei Zhujiang Logistics Property
	Development Co., Limited, Yupei North China Logistics Property
	Development Co., Limited, Yupei Logistics	Property	Development 7
	Co., Limited, Yupei Logistics Property Development 9 Co., Limited,
	Yupei Logistics Property Development 2 Co., Limited, Yupei Logistics
	Property Development 4 Co., Limited, Yupei Central China Logistics
	Property Development Co., Limited, Yupei Xianyang Logistics Property
	Development Co., Limited, Yupei Logistics	Property Development
	11 Co., Limited, Yupei Anhui Logistics Property Development Co.
	Limited, Yupei Logistics Property Development 5 Co., Limited, Yupei
	Fujian Logistics Property Development Co., Limited,	Yupei Logistics

Property Development 13 Co., Limited, Yupei Logistics Property Development 16 Co., Limited, Yupei Logistics Property Development 17 Co., Limited, Yupei Logistics Property Development 18 Co., Limited, Yupei Logistics Property Development 19 Co., Limited, Yupei Logistics Property Development 20 Co., Limited, Yupei (China) Logistics Property Development Co., Limited, Yupei Sichuan Logistics Property Management Co., Ltd, Yupei Harbin Logistics Property Management Co., Ltd, Yupei Zhejiang Logistics Property Management Co., Ltd, Yupei Nantong Logistics Property Management Co., Ltd, Yupei Jiangsu Logistics Property Management Co., Ltd, Yupei Logistics Property Management 3 Co., Ltd, Yupei Guangzhou Logistics Property Management Co., Ltd, Yupei Hefei Logistics Property Management Co., Ltd, Yupei Global Investment Management Co., Ltd 宇培環 球投資管理有限公司, Yupei Southwest China Logistics Property Management Co., Ltd, Yupei North East China Logistics Property Management Co., Ltd, Yupei Logistics Property Management 1 Co., Ltd, Yupei Zhujiang Logistics Property Management Co., Ltd, Yupei North China Logistics Property Management Co., Ltd, Yupei Jiaxing Logistics Property Management Co., Ltd, Yupei South China Logistics Property Management Co., Ltd, Yupei Logistics Property Management 2 Co., Ltd, Yupei Logistics Property Management 4 Co., Ltd, Yupei Central China Logistics Property Management Co., Ltd, Yupei Xianyang Logistics Property Management Co., Ltd, Yupei Logistics Property Management 11 Co., Ltd, Yupei Anhui Logistics Property Management Co., Ltd, Yupei Huating Logistics Property Management Co., Ltd, Yupei Fujian Logistics Property Management Co., Ltd, Yupei Logistics Property Management 13 Co., Ltd, Yupei Logistics Property

- 7 -

DEFINITIONS

	Management 16 Co., Ltd, Yupei Logistics Property Management 17 Co.,
	Ltd, Yupei Logistics Property Management 18 Co., Ltd, Yupei Logistics
	Property Management 19 Co., Ltd, Yupei Logistics Property Management
	20 Co., Ltd, China Yupei Logistics Property Development Co., Ltd 中國
	宇培物流資產發展有限公司, Yupei International Logistics Property
	Management Co., Ltd 宇培國際物流資產管理有限公司, China Logistics
	Property Investment Management Co., Ltd 中國物流資產投資管理有限
	公司, Seed Beijing Company Limited, Seed Chuzhou Company Limited,
	Seed Wuhan Company Limited, Seed Changchun Company Limited,
	Seed Kunshan Company Limited, Seed Shenbei Company Limited,
	Seed Wuhu Company Limited, Seed Feidong Company Limited, Seed
	Tianjin Binhai Company Limited, Seed Holding Company II, Limited,
	Seed Jiaxing Company Limited, Seed Suzhou Company Limited, Seed
	Zhaoqing Company Limited, Seed Nantong Company Limited, Seed
	Harbin Company Limited and Seed Chengdu Company Limited, and any
	other Restricted Subsidiary which shall guarantee the payment of the Bonds
	pursuant to the Trust and the Bonds
"Trust Deed"	the trust deed (as amended or supplemented from time to time) between,
	among others, the Company, the Subsidiary Guarantors and the Trustee
	to set out the rights and obligations between the Company, the Subsidiary
	Guarantors and the Trustee in relation to the Bonds. Save for certain
	trustee-related and administrative provisions, there will be no conflict
	between the Trust Deed and the Conditions, and the Conditions are
	included in the Trust Deed as a schedule
"Trustee"	Citicorp International Limited
"U.S. Securities Act"	the United States Securities Act of 1933, as amended
"Unrestricted Subsidiary"	(1) as of the Closing Date, BG Management Hong Kong Limited, Yupei
	Logistics Property Fund I Limited Partnership, Yupei Logistics Property
	Management 22 Co., Ltd and Yupei Logistics Property Fund Management
	I Co., Ltd and their respective subsidiaries; (2) any subsidiary of the
	Company that at the time of determination shall be designated an
	Unrestricted Subsidiary by the Board in the manner provided in the Trust
	Deed; and (3) any subsidiary of an Unrestricted Subsidiary
"US$"	United States dollars, the lawful currency of the United States of America
"Voting Stock"	with respect to any Person, Capital Stock of any class or kind ordinarily
	having the power to vote for the election of directors, managers or other
	voting members of the governing body of such Person
"VWAP"	volume weighted average prices
"%"	per cent.

References to times and dates in this circular are to Hong Kong times and dates.

- 8 -

LETTER FROM THE BOARD

China Logistics Property Holdings Co., Ltd

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1589)

Executive Directors:	Registered Office:
Mr. Li Shifa (Chairman)	4th Floor, Harbour Place
Mr. Wu Guolin	103 South Church Street
Ms. Li Huifang	P.O. Box 10240
Mr. Chen Runfu	Grand Cayman KY1-1002
Mr. Cheuk Shun Wah	Cayman Islands
Ms. Shi Lianghua
Mr. Xie Xiangdong	Principal Place of Business in
	Hong Kong:
Non-Executive Directors:	Unit 3213, Cosco Tower
Mr. Huang Xufeng	183 Queen's Road Central
Ms. Li Qing	Sheung Wan
Mr. Fu Bing	Hong Kong
Independent Non-Executive Directors:	27 July 2020
Mr. Guo Jingbin
Mr. Fung Ching Simon
Mr. Wang Tianye
Mr. Leung Chi Ching Frederick
Mr. Chen Yaomin
To the Shareholders
Dear Sir/Madam,

PROPOSED ISSUE OF

US$100,000,000 6.95% CONVERTIBLE BONDS DUE 2025

UNDER SPECIFIC MANDATE

INTRODUCTION

Reference is made to the Announcements in relation to the proposed issue of the Bonds under the Specific Mandate.

- 9 -

LETTER FROM THE BOARD

The purpose of this circular is to provide you with information in respect of, among other things, (i) further details of the Subscription Agreement and the transactions contemplated thereunder (including the issue of the Bonds under the Specific Mandate); and (ii) the notice of the EGM.

On 29 June 2020, the Company, the Subsidiary Guarantors and the Purchaser entered into the Subscription Agreement in relation to the issue of the Bonds.

Details of the Subscription Agreement are set out below:

THE SUBSCRIPTION AGREEMENT

Date

29 June 2020

Parties to the Subscription Agreement

1. the Company;
2. the Subsidiary Guarantors; and
3. the Purchaser.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Purchaser (including its ultimate beneficial owners) is an independent third party and not a connected person of the Company.

Subscription of the Bonds

Subject to fulfilment of the conditions under the section headed "Conditions to the Subscription Agreement" below, (i) the Company agreed to issue the Bonds; (ii) the Subsidiary Guarantors agreed to provide Subsidiary Guarantees; and (iii) the Purchaser agreed to subscribe the Bonds.

Completion of the issue of the Bonds (including the delivery of the Bonds) will take place at the same time upon the payment of the subscription monies by the Purchaser to the Company as provided in the Subscription Agreement.

The Bonds will not be offered to the public in Hong Kong. The Bonds and the Subsidiary Guarantees have not been and will not be registered under the U.S. Securities Act, or the securities laws of any state of the United States or other jurisdiction, and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and any applicable state or local securities law in the United States.

- 10 -

LETTER FROM THE BOARD

Conditions to the Bond Issue

The obligation of the Purchaser to purchase the Bonds on the Closing Date is subject to the performance by the Company and each of the Subsidiary Guarantors of their respective covenants and other obligations hereunder and to the following additional conditions to be satisfied on or before the CP Satisfaction Date unless otherwise set out below:

1. Representations and Warranties. The representations and warranties of the Company and the Subsidiary Guarantors contained in the Subscription Agreement shall be true and correct on the date of the Subscription Agreement, the CP Satisfaction Date, the Publication Date and the Closing Date;
2. No Material Adverse Change and an Officer's Certificate. The Purchaser shall have received on and as of the CP Satisfaction Date a confirmation of the Company that there is no material adverse change in the condition (financial or otherwise), results of operations, business or prospectus of the Company and its subsidiaries taken as a whole;
3. Opinion of U.S. Counsel for the Company and the Subsidiary Guarantors. A U.S legal opinion having been delivered from the counsel to the Company and the Subsidiary Guarantors to the Purchaser in form and substance reasonably satisfactory to the Purchaser;
4. Opinion of Hong Kong Counsel for the Company and the Subsidiary Guarantors. A Hong Kong legal opinion having been delivered from the counsel to the Company and the Subsidiary Guarantors to the Purchaser in form and substance reasonably satisfactory to the Purchaser;
5. Opinion of Cayman Islands Counsel for the Company and the Subsidiary Guarantors. A Cayman legal opinion having been delivered from the counsel to the Company and the Subsidiary Guarantors to the Purchaser in form and substance reasonably satisfactory to the Purchaser;
6. Opinion of British Virgin Islands Counsel for the Company and the Subsidiary Guarantors. A British Virgin Islands legal opinion having been delivered from the counsel to the Company and the Subsidiary Guarantors to the Purchaser in form and substance reasonably satisfactory to the Purchaser;
7. Opinion of English Counsel for the Purchaser. An English legal opinion having been delivered from the counsel for the Purchaser to the Purchaser in form and substance reasonably satisfactory to the Purchaser;
8. Opinion of PRC Counsel for the Purchaser. A PRC legal opinion having been delivered from the counsel for the Purchaser to the Purchaser in form and substance reasonably satisfactory to the Purchaser;
9. Depositary. The Bonds shall have been declared eligible for clearance and settlement through Euroclear and Clearstream;

- 11 -

LETTER FROM THE BOARD

1. Approval of Issuance and Sale of Bonds. The Company shall have provided to the Purchaser copies of the resolutions of the board of directors of the Company, authorising the execution and delivery of the Subscription Agreement, the other relevant transaction documents and the Bonds, the issue and allotment of the Conversion Shares, and performance of the Company's obligations thereby, and extracts of the resolutions of the Shareholders approving the allotment and issue of the Conversion Shares; each Subsidiary Guarantor shall have provided to the Purchaser copies of resolutions of the board of directors and shareholders (to the extent required) of such Subsidiary Guarantor, authorising the execution and delivery of the Subscription Agreement and the respective Subsidiary Guarantee, and performance of the Subsidiary Guarantor's obligations thereby;
2. No Legal Impediment to Issuance. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental or regulatory authority or stock exchange that would prevent the issuance or sale of the Bonds or the issuance of the Subsidiary Guarantees; and no injunction or order of any court shall have been issued that would prevent the issuance or sale of the Bonds or the issuance of the Subsidiary Guarantees, as confirmed by a certificate of an executive officer of the Company;
3. Trust Deed, Agency Agreement and Bonds. The Trust Deed and the Agency Agreement shall have been duly executed and delivered by a duly authorised officer of the Company, each of the Subsidiary Guarantors, the Trustee and the agents named therein (as the case may be) by no later than the CP Satisfaction Date, and the Bonds shall have been duly executed and delivered by a duly authorised officer of the Company and duly authenticated in the manner provided for in the Trust Deed on the Closing Date;
4. Exchange Listing. The Bonds shall have been approved for listing on the Stock Exchange, subject to official notice of issuance and the Stock Exchange shall have agreed to list the Conversion Shares upon the exercise of the conversion rights attaching to the Bonds; and
5. NDRC Approval. The Company shall have delivered to the Purchaser a certificate signed by an executive officer of the Company confirming the NDRC approval after having made a reasonable assessment.

To the extent that any of the foregoing conditions precedent is not satisfied on or prior to the CP Satisfaction Date despite the good faith efforts of the Company and the Subsidiary Guarantors, the Company shall provide to the Purchaser all relevant information as to why such conditions precedent cannot be satisfied. The Purchaser may at its sole discretion waive in writing the satisfaction by the Company or any of the Subsidiary Guarantors of any of the foregoing conditions precedent or extend the time for such satisfaction.

Save for condition (j), none of the foregoing conditions precedent have been satisfied as at the Latest Practicable Date.

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LETTER FROM THE BOARD

Shareholders' Lock-up Undertaking

Mr. Li Shifa has agreed to undertake that, for a period from the date of the Subscription Agreement until 30 days from the Closing Date, neither he nor his nominee nor any person acting on his behalf will (except with the prior written approval of the Purchaser) (i) issue, offer, sell, contract to sell, pledge, encumber or otherwise dispose of, or grant options or contracts, issue warrants or offer rights entitling persons to subscribe or purchase, directly or indirectly, any interest in any of the Relevant Shares or securities of the same class as the Relevant Shares, or any securities exchangeable for or convertible into or exercisable for the Relevant Shares or securities of the same class as the Relevant Shares, the Relevant Securities, or warrants or other rights to purchase the Relevant Shares or any security or financial product whose value is determined directly or indirectly by reference to the price of the Relevant Shares, including equity swaps, forward sales and options representing the right to receive any Relevant Shares; (ii) enter into any swap or other arrangement that transfers to others, in whole or in part, directly or indirectly, any of the economic consequences of ownership of the Relevant Shares or the Relevant Securities; (iii) enter into any transaction with the same economic effect as, or which is designed to, or which may reasonably be expected to result in, or agree to do, any of the foregoing, whether any such swap or transaction of the kind described in (i), (ii) or (iii) is to be settled by delivery of Relevant Shares, Relevant Securities or other securities, in cash or otherwise or (iv) announce or otherwise make public an intention to do any of the foregoing.

Voting Undertaking

The Company has procured Mr. Li Shifa to execute and deliver to the Purchaser a letter of irrevocable voting undertaking dated 29 June 2020 to vote in favour of such relevant resolutions as may be required for the issue of the Convertible Bonds at the EGM in respect of all relevant Shares being held by him.

Termination

The Subscription Agreement may be terminated in the absolute discretion of the Purchaser, by notice to the Company, if after the execution and delivery of the Subscription Agreement and on or prior to the CP Satisfaction Date any of the conditions precedent is not satisfied or waived.

PRINCIPAL TERMS OF THE BONDS

The principal terms of the Bonds are summarized below:

Status of the Bonds:	The Bonds will constitute direct, unconditional, unsubordinated and
	unsecured obligations of the Company and shall at all times rank
	pari passu and without any preference or priority among themselves
Denomination:	US$200,000 each and integral multiples of US$1,000 in excess
	thereof

Principal amount of the Bonds: US$100,000,000, convertible into fully paid ordinary shares with a par value of US$0.0000625 each in the issued and paid up capital of

	the Company
Maturity:	Unless previously redeemed, converted or purchased and cancelled
	as provided in the Conditions, the Company shall redeem each Bond
	at its principal amount together with accrued and unpaid interest
	thereon on the Maturity Date

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	LETTER FROM THE BOARD
Maturity Date:	5 years from the Closing Date
Guarantees:	The Bonds will be guaranteed by the Subsidiary Guarantors whose
	obligations are direct, unconditional and unsubordinated
Bondholder Put Date:	3 years from the Closing Date
Issue Price:	100% of the principal amount
Coupon:	6.95% per annum, payable semi-annually in arrear
Put Price:	100.00% of the principal amount
Redemption Price:	100.00% of the principal amount
Initial Conversion Price:	The Initial Conversion Price of HK$3.19 per Share represents:
	(a)	a premium of approximately 2.68% over the arithmetic average
		of the daily VWAP of each Share on each of the 20 consecutive
		trading days immediately prior to the date of the Subscription
		Agreement in the amount of HK$3.1066;
	(b)	a discount of 5.06% to the closing price of the Shares of
		HK$3.36 as quoted on the Stock Exchange on 29 June 2020,
		which was the date of the Subscription Agreement; and
	(c)	a discount of 3.27% to the average closing price of the Shares
		of HK$3.298 as quoted on the Stock Exchange for the five (5)
		consecutive trading days prior to the date of the Subscription
		Agreement.

The Initial Conversion Price was determined based on (i) a small premium over the arithmetic average of the daily VWAP of each Share on each of the 20 consecutive trading days immediately prior to the date of the Subscription Agreement; and (ii) an arm's length negotiation between the Company and the Purchaser in May 2020 during which the Initial Conversion Price was preliminarily determined to be close to the average closing price of the Shares which was in the range of HK$2.8 to HK$2.9. The Initial Conversion Price of HK$3.19 is also the same as that of the Existing Bonds. Given it took time for finalising the relevant legal documentation and for the Purchaser to conduct due diligence on the Group, the Company and the Purchaser agreed on the detailed terms and executed the Subscription Agreement in late June 2020. However, the Share price moved up by the time when the Subscription Agreement was entered into. The Initial Conversion Price therefore represented a discount to the closing price of the Shares as quoted on the Stock Exchange on the date of the Subscription Agreement, and/or against the average closing price of the Shares quoted on the Stock Exchange for the five (5) consecutive trading

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LETTER FROM THE BOARD

days prior to the Subscription Agreement. Given that the Bond Issue would broaden the investor profile by introducing the Purchaser whose ultimate controller is a reputable global credit specialist as a strategic Shareholder and the Company has imminent funding needs to repay the November 2020 Notes by using the net proceeds from the Subscription, and it is intended that the investment in the Bonds (with a terms of five years) will be a long term investment and the Purchaser will be a long-term strategic investor of the Company, the Company considered that the arithmetic average of the daily VWAP of each Share on each of the 20 consecutive trading days immediately prior to the date of the Subscription Agreement, is more representative of the then current market value of the Shares than the closing price of the Shares of a short period of time before the date of the Subscription Agreement which is easily affected by fluctuation of the relevant time. Therefore, the Company is of the view that although the Initial Conversion Price represents a slight discount to the relevant closing prices, it is still fair and reasonable and in the interest of the Company and the Shareholders as a whole.

The Initial Conversion Price is subject to adjustment upon the occurrence of certain prescribed events namely, consolidation, subdivision, redesignation or reclassification of Shares, capitalization of profits or reserves, distributions, rights issues of Shares or options over Shares, rights issues of other securities, issues at less than current market price, other issues at less than current market price, modification of rights of conversion, other offers to the Shareholders under the circumstances which the Company or any of its subsidiaries issues, sells or distributes any securities in connection with which an offer pursuant to which the Shareholders generally are entitled to participate in arrangements whereby such securities may be acquired by them (provided that the Board considers that the adjustment as a result of such offers to the Shareholders will be fair and reasonable to the Company as such adjustment events are determined and within the control of the Company), adjustment upon the occurrence of a Change of Control (details of which are set out below), and other events determined by the Company that an adjustment should be made to the conversion price as a result of one or more events or circumstances not referred to in the above after consulting an independent investment bank that such adjustment would be fair and reasonable to take provided that the per Share value of such adjustment shall not exceed the per Share value of the dilution in the Shareholders' interest in the Company's equity caused by such event.

- 15 -

LETTER FROM THE BOARD

Details of the adjustment events to the conversion price of the Bonds are set out as follows:

1. Consolidation, Subdivision, Redesignation or Reclassification: If and whenever there shall be an alteration to the nominal value of the Shares as a result of consolidation, subdivision, redesignation or reclassification, the conversion price shall be adjusted by multiplying the conversion price in force immediately before such alteration by the following fraction:

A

B

Where:

1. is the nominal amount of one Share immediately after such alteration; and
2. is the nominal amount of one Share immediately before such alteration.

Such adjustment shall become effective on the date such consolidation, subdivision, redesignation or reclassification takes effect.

1. Capitalisation of Profits or Reserves:
2. 1. If and whenever the Company shall issue any Shares credited as fully paid to the Shareholders by way of capitalisation of profits or reserves (including any share premium account) including Shares paid up out of distributable profits or reserves and/or share premium account (except any scrip dividend) and which would not have constituted a distribution, the conversion price shall be adjusted by multiplying the conversion price in force immediately before such issue by the following fraction:

A

B

Where:

1. is the aggregate nominal amount of the issued Shares immediately before such issue; and
2. is the aggregate nominal amount of the issued Shares immediately after such issue.

Such adjustment shall become effective on the date of issue of such Shares or if a record date is fixed therefor, immediately after such record date.

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LETTER FROM THE BOARD

1. In the case of an issue of Shares by way of a scrip dividend where the aggregate value of such Shares issued by way of scrip dividend as determined by reference to the Current Market Price per Share exceeds the amount of the relevant cash dividend or the relevant part thereof and which would not have constituted a distribution, the conversion price shall be adjusted by multiplying the conversion price in force immediately before the issue of such Shares by the following fraction:

A + B

A + C

Where:

1. is the aggregate nominal amount of the issued Shares immediately before such issue;
2. is the aggregate nominal amount of Shares issued by way of such scrip dividend multiplied by a fraction of which (i) the numerator is the amount of the whole, or the relevant part, of the relevant cash dividend for which Shareholders have elected to receive as Shares issued by way of scrip dividend and (ii) the denominator is the aggregate value of such Shares issued by way of scrip dividend as determined by reference to the Current Market Price per Share; and
3. is the aggregate nominal amount of Shares issued by way of such scrip dividend,

or by making such other adjustment as an Independent investment bank shall certify in writing to the Trustee is fair and reasonable.

Such adjustment shall become effective on the date of issue of such Shares issued by way of scrip dividend or if a record date is fixed therefor, immediately after such record date.

- 17 -

LETTER FROM THE BOARD

1. Distributions: If and whenever the Company shall pay or make any distribution to the Shareholders (except to the extent that the conversion price falls to be adjusted under Condition (b) above), the conversion price shall be adjusted by multiplying the conversion price in force immediately before such distribution by the following fraction:

A - B

A

Where:

1. is the Current Market Price per Share on the date on which the distribution is first publicly announced; and
2. is the Fair Market Value per Share.

Such adjustment shall become effective on the date that such distribution is actually made or paid or if a record date is fixed therefor, immediately after such record date. For the purpose of the above, Fair Market Value shall be determined as at the date on which the distribution is first publicly announced or, if later, the first date on which the Fair Market Value of the relevant distribution is capable of being determined as provided herein.

In making any calculation pursuant to this Condition (c), such adjustments (if any) shall be made as an Independent investment bank may consider appropriate to reflect (i) any consolidation or subdivision of the Shares, (ii) issues of Shares by way of capitalisation of profits or reserves, or any like or similar event, (iii) the modification of any rights to dividends of Shares or (iv) any change in the fiscal year of the Company.

- 18 -

LETTER FROM THE BOARD

1. Rights Issues of Shares or Options over Shares: If and whenever the Company shall issue Shares to all or substantially all Shareholders as a class by way of rights, or issue or grant to all or substantially all Shareholders as a class by way of rights, options, warrants or other rights to subscribe for, purchase or otherwise acquire any Shares, in each case at less than the Current Market Price per Share on the date of the first public announcement of the terms of the issue or grant, the conversion price shall be adjusted by multiplying the conversion price in force immediately before such issue or grant by the following fraction:

A + B

A + C

Where:

1. is the aggregate number of Shares in issue immediately before such announcement;
2. is the number of Shares which the aggregate consideration receivable for the Shares issued by way of rights or for the options or warrants or other rights issued or granted by way of rights and for the total number of Shares comprised therein would subscribe for, purchase or otherwise acquire at such Current Market Price per Share; and
3. is the aggregate number of Shares issued or, as the case may be, comprised in the issue or grant.

Such adjustment shall become effective on the date of issue of such Shares or issue or grant of such options, warrants or other rights (as the case may be) or where a record date is set, the first date on which the Shares are traded ex-rights,ex-options or ex-warrants, as the case may be.

- 19 -

LETTER FROM THE BOARD

1. Rights Issues of Other Securities: If and whenever the Company shall issue any securities (other than Shares or options, warrants or other rights to subscribe for, purchase or otherwise acquire Shares) to all or substantially all Shareholders as a class by way of rights or grant to all or substantially all Shareholders as a class by way of rights, options, warrants or other rights to subscribe for, purchase or otherwise acquire any securities (other than Shares or options, warrants or other rights to subscribe for, purchase or otherwise acquire Shares), the conversion price shall be adjusted by multiplying the conversion price in force immediately before such issue or grant by the following fraction:

A - B

A

Where:

1. is the Current Market Price per Share on the date on which such issue or grant is publicly announced; and
2. is the Fair Market Value per Share on the date of such announcement of the portion of the rights attributable to one Share.

Such adjustment shall become effective on the date of issue of the securities or the grant of such rights, options or warrants (as the case may be) or where a record date is set, the first date on which the Shares are traded ex-rights,ex-options or ex- warrants, as the case may be. For the purpose of the above, Fair Market Value shall be determined as at the date on which the terms of such issue or grant are publicly announced or, if later, the first date on which the Fair Market Value of the aggregate rights attributable to the Shares in relation to such issue or grant is capable of being determined as provided herein.

- 20 -

LETTER FROM THE BOARD

1. Issues at less than Current Market Price: If and whenever the Company shall issue (otherwise than as mentioned in Condition (d) above) any Shares (other than Shares issued on the exercise of Conversion Rights or on the exercise of any other rights of conversion into, or exchange or subscription for, Shares) or shall issue or grant (otherwise than as mentioned in Condition (d) above) any options, warrants or other rights to subscribe for, purchase or otherwise acquire Shares, in each case at a price per Share which is less than the Current Market Price on the date of the first public announcement of the terms of such issue, the conversion price shall be adjusted by multiplying the conversion price in force immediately before such issue by the following fraction:

A + B

 C

Where:

1. is the aggregate number of Shares in issue immediately before the issue of such additional Shares or the grant of such options, warrants or other rights to subscribe for, purchase or otherwise acquire any Shares;
2. is the number of Shares which the aggregate consideration receivable for the issue of the maximum number of Shares to be issued or the exercise of such options, warrants or other rights would purchase at such Current Market Price per Share; and
3. is the aggregate number of Shares in issue immediately after the issue of such additional Shares.

References to additional Shares in the above formula shall, in the case of an issue by the Company of options, warrants or other rights to subscribe for, purchase or otherwise acquire Shares, mean such Shares to be issued assuming that such options, warrants or other rights are exercised in full at the initial exercise price on the date of issue of such options, warrants or other rights.

Such adjustment shall become effective on the date of issue of such additional Shares or, as the case may be, the issue of such options, warrants or other rights.

- 21 -

LETTER FROM THE BOARD

1. Other Issues at less than Current Market Price: Save in the case of an issue of securities arising from a conversion or exchange of other securities in accordance with the terms applicable to such securities themselves falling within this Condition (g), if and whenever the Company or any of its subsidiaries (otherwise than as mentioned in Conditions (d),
2. 1. or (f)), or (at the direction or request of or pursuant to any arrangements with the Company or any of its Subsidiaries) any other company, person or entity shall issue any securities (other than the Bonds) which by their terms of issue carry rights of conversion into, or exchange or subscription for, Shares to be issued by the Company upon conversion, exchange or subscription at a consideration per Share which is less than the Current Market Price on the date of the first public announcement of the terms of issue of such securities, the conversion price shall be adjusted by multiplying the conversion price in force immediately before such issue by the following fraction:

A + B

A + C

Where:

1. is the aggregate number of Shares in issue immediately before such issue;
2. is the number of Shares which the aggregate consideration receivable by the Company for the Shares to be issued on conversion or exchange or on exercise of the right of subscription attached to such securities would purchase at such Current Market Price per Share; and
3. is the maximum number of Shares to be issued on conversion or exchange of such securities or on the exercise of such rights of subscription attached thereto at the initial conversion, exchange or subscription price or rate on the issue date of such securities.

Such adjustment shall become effective on the date of issue of such securities.

- 22 -

LETTER FROM THE BOARD

1. Modification of Rights of Conversion etc.: If and whenever there shall be any modification of the rights of conversion, exchange or subscription attaching to any such securities as are mentioned in Condition (g) (other than in accordance with the terms of such securities) so that the consideration per Share (for the number of Shares available on conversion, exchange or subscription following the modification) is reduced below the Current Market Price on the date of announcement of the proposals for such modification, the conversion price shall be adjusted by multiplying the conversion price in force immediately before such modification by the following fraction:

A + B

A + C

Where:

1. is the aggregate number of Shares in issue immediately before such modification;
2. is the maximum number of Shares which the aggregate consideration receivable by the Company for the Shares to be issued on conversion or exchange or on exercise of the right of subscription attached to the securities so modified would purchase at such Current Market Price per Share or, if lower, the existing conversion, exchange or subscription price of such securities; and
3. is the maximum number of Shares to be issued on conversion or exchange of such securities or on the exercise of such rights of subscription attached thereto at the modified conversion, exchange or subscription price or rate but giving credit in such manner as an Independent investment bank considers appropriate (if at all) for any previous adjustment under this Condition (h) or Condition (g).

Such adjustment shall become effective on the date of modification of the rights of conversion, exchange or subscription attaching to such securities.

- 23 -

LETTER FROM THE BOARD

1. Other Offers to Shareholders: If and whenever the Company or any of its Subsidiaries or (at the direction or request of or pursuant to any arrangements with the Company or any of its subsidiaries) any other company, person or entity issues, sells or distributes any securities in connection with an offer pursuant to which the Shareholders generally are entitled to participate in arrangements whereby such securities may be acquired by them (except where the conversion price falls to be adjusted under Condition (d), Condition (e), Condition (f) or Condition (g)), the conversion price shall be adjusted by multiplying the conversion price in force immediately before such issue, sale or distribution by the following fraction:

		A - B
		A
Where:
A	is the Current Market Price per Share on the date
	on which such issue, sale or distribution is publicly
	announced; and

1. is the Fair Market Value of the portion of the rights attributable to one Share.

Such adjustment shall become effective on the date of issue, sale or distribution of the securities. For the purpose of the above, Fair Market Value shall be determined as at the date on which the terms of such issue, sale or distribution of securities are first publicly announced or, if later, the first date on which the Fair Market Value of the portion of the aggregate rights attributable to the Shares is capable of being determined as provided  herein.  The  Board  considers  that  the  adjustment as a result of such offers to the Shareholders is fair and reasonable to the Company because such adjustment events are determined and within the control of the Company.

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LETTER FROM THE BOARD

1. Adjustment upon Change of Control: If a Change of Control shall occur, the Company shall give notice of that fact to the Trustee and the Bondholders (the "Change of Control Notice") within 7 days of the occurrence of such Change of Control. Following the giving of a Change of Control Notice, upon any exercise of conversion rights such that the relevant conversion date falls within 30 days following a Change of Control, or, if later, 30 days following the date on which the Change of Control Notice is given to the Trustee and the Bondholders, the conversion price shall be adjusted in accordance with the following formula:

NCP =	OCP
1+(CP x	c	)
	t

Where:

"NCP" means the new conversion price after such adjustment (which, in any event, shall not be below HK$2.90 but for any other adjustments that may be made under the Conditions, except in the event of a Conversion Price Reset, in which case, the new conversion price after such adjustment shall not be below 85% of the Initial Conversion Price). The "NCP" of HK$2.90 was approximate to the average prevailing market price that the Shares were traded in May 2020 during which the Purchaser and the Company negotiated and preliminarily agreed on the initial terms of the Bond Issue in May 2020.

"OCP" means the conversion price before such adjustment. For the avoidance of doubt, OCP shall be the conversion price in effect on the relevant conversion date.

"CP" means the conversion premium of 2.68% expressed as a fraction.

"c" means the number of days from and including the date the Change of Control occurs to but excluding the Maturity Date.

"t" means the number of days from and including the Closing Date to but excluding the Maturity Date.

The Bonds are freely transferrable subject to the Conditions and the rules of the relevant clearing systems where applicable.

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LETTER FROM THE BOARD

	(k) Other Events: If the Company determines that an adjustment
	should be made to the conversion price as a result of one or
	more events or circumstances not referred to in the above
	(including but not limited to, any possible upward adjustment
	to the conversion price), the Company shall, at its own
	expense, consult an independent investment bank to determine
	as soon as practicable what adjustment (if any) to the
	conversion price is fair and reasonable to take account thereof,
	provided that the per Share value of such adjustment shall not
	exceed the per Share value of the dilution in the Shareholders'
	interest in the Company's equity caused by such event.
Number of Conversion Shares	Based on the principal amount of US$100,000,000 of the Bonds (to
issuable:	be converted into HK$ at the Agreed Rate), 242,962,382 Conversion
	Shares will be issued upon exercise of the conversion right attaching
	to the Bonds in full based on the Initial Conversion Price

The 242,962,382 Conversion Shares, having an aggregate nominal value of US$15,185.14888 based on a par value of US$0.0000625 per Share, represent (i) approximately 7.51% of the total number of Shares of the Company in issue as at Latest Practicable Date; and

1. approximately 6.98% of the enlarged total number of issued Shares of the Company upon allotment and issue of such Conversion Shares, assuming that there is no other change to the issued share capital of the Company

	Based on the proceeds from the issue of the Bonds	of
	US$100,000,000 and 242,962,382 Conversion Shares,	the
	proceeds per Conversion Share is estimated to be approximately
	HK$3.19. Based on the estimated net proceeds of approximately
	US$97,000,000 from the issue of the Bonds and 242,962,382
	Conversion Shares, the net price per Conversion Share is estimated
	to be approximately HK$3.09.
Ranking of the Conversion	The Conversion Shares to be issued upon exercise of the conversion
Shares:	right attaching to the Bonds will be fully paid and rank pari passu
	in all respects with the Shares then in issue on the date on which
	the name of the exercising Bondholder is registered as holder of
	the relevant Conversion Shares in the register of members of the
	Company
Conversion Period:	Convertible into the Shares at the election of the Bondholders at
	any time on or after the Closing Date to 10 days before the Maturity
	Date, unless previously redeemed, repurchased and canceled or
	converted (except during the closed periods as provided in the
	Conditions)
Conversion Price Reset:	Conversion price reset to the relevant Reset Reference Share Price
	on each of the Reset Dates, in the event that the Reset Reference
	Share Price on the Reset Date is at least 10% lower than the then
	conversion price, subject to an 80.0% adjustment floor of the Initial
	Conversion Price (as adjusted to reflect any adjustments which may
	have occurred prior to the relevant Reset Date).
	- 26 -

LETTER FROM THE BOARD

Based on the principal amount of US$100,000,000 of the Bonds (to be converted into HK$ at the Agreed Rate), a maximum of 303,702,978 Conversion Shares will be allotted and issued by the Company as a result of the Bondholders exercising the conversion rights attaching to the Bonds based on the Initial Floor Conversion Price, representing (i) approximately 9.38% of the total number of Shares of the Company in issue as at the Latest Practicable Date; and (ii) approximately 8.58% of the enlarged total number of issued Shares of the Company upon allotment and issue of such Conversion Shares, assuming that there is no other change to the issued share capital of the Company.

Reset Reference Share Price:	the arithmetic average of the daily VWAP of each Share on each of
	the 20 consecutive trading days immediately prior to the relevant
	Reset Date
Reset Dates:	26 June 2021 or 26 June 2022 (each, a "Reset Date")
Redemption at the Option of	(a)	Company Call - callable on giving not less than 30 nor more
the Company:		than 60 days' notice at anytime after the expiry of three years
		from the Closing Date in whole but not in part at 100% of the
		principal amount plus any accrued but unpaid interest if the
		closing price of the Shares for any 20 out of 30 consecutive
		trading days prior to the date upon which of such redemption
		notice was given, is at least 130% of the Initial Conversion
		Price
	(b)	Tax Call - callable anytime on giving not less than 30 nor
		more than 60 days' notice in whole but not in part, at 100%
		of the principal amount, together with accrued but unpaid
		interest, as a result of (i) changes relating to tax laws or
		regulations in Hong Kong, the Cayman Islands, the PRC or
		the relevant jurisdiction of incorporation of each relevant
		Subsidiary Guarantor which become effective on or after 29
		June 2020 and the Company has or will become obliged to
		pay additional tax amounts and (ii) such obligation cannot be
		avoided by the Company taking reasonable measures available
		to it. Bondholders have the right to elect for the Bonds not
		to be redeemed but with no entitlement to any additional tax
		amounts
	(c)	Clean Up Call - callable anytime on giving not less than
		30 nor more than 60 days' notice, in whole but not in part,
		at 100% of the principal amount, together with accrued but
		unpaid interest, if prior to the date the relevant notice is given,

conversion rights shall have been exercised and/or purchases (and corresponding cancelations) and/or redemptions effected in respect of 90% or more in aggregate principal amount of the Bonds originally issued

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LETTER FROM THE BOARD

Redemption at the Option of	(a)	Bondholder's Put - a Bondholder may require the Company
	Bondholders:		to redeem all or some only of such Bondholder's Bonds at
			100% of the principal amount of the Bonds, together with
			accrued but unpaid interest if any, on the Bondholder Put Date
		(b)	Change of Control Put - a Bondholder may require the
			Company to redeem all or some only of such Bondholder's
			Bonds at 100% of the principal amount of the Bonds, together
			with accrued but unpaid interest if any, following the
			occurrence of a Change of Control
		(c)	Delisting or Suspension of Trading Put - a Bondholder
			may require the Company to redeem all or some only of such
			Bondholder's Bonds at 100% of the principal amount of the
			Bonds, together with accrued but unpaid interest if any, if
			the Shares cease to be listed or admitted to trading or are
			suspended for a period equal to or exceeding 30 consecutive
			trading days on the Stock Exchange or, if applicable, the
			Alternative Stock Exchange
		(d)	Voluntary Delisting Put - a Bondholder may require the
			Company to redeem all but not some of such Bondholder's
			Bonds at 100% of the principal amount of the Bonds plus
			Applicable Premium, together with accrued but unpaid interest
			if any, if there is a voluntary cancellation of the listing of
			Shares on the Stock Exchange or applicable Alternative Stock
			Exchange (i) as a result of a Person or Persons, acting together,
			acquiring Control over the Company or its successor entity;
			or (ii) within six months from the date a Person or Persons,
			acting together, has acquired Control over the Company or its
			successor entity
Transferability:	The Bonds are freely transferrable subject to the Conditions and the
		rules of the relevant clearing systems where applicable
Covenants under the Conditions	There are certain covenants applicable to the Company and any of
applicable to the Company	the Restricted Subsidiaries, which restrict their ability to:
	and the Restricted
	Subsidiaries:	1)	incur or guarantee additional indebtedness and issue
			disqualified or preferred stock;
		2)	make investments or other specified restricted payments;
		3)	pay dividends on its capital stock or purchase or redeem capital
			stock;
		4)	issue or sell capital stock of any of the Restricted Subsidiaries;
		5)	guarantee indebtedness by the Restricted Subsidiaries;

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LETTER FROM THE BOARD

1. enter into transactions with certain shareholders and affiliates of the Company;
2. create liens;
3. enter into sale and leaseback transactions;
4. sell assets; and
5. engage in any business other than permitted businesses

Unrestricted Subsidiaries are generally not subject to the foregoing covenants

The foregoing covenants are in line with the covenants given by the Company in its other standard US$ high-yield senior notes issued. The Company considers these covenants would provide a reasonable level of protection to offshore credit investors, without adversely affecting the Company's operation and financing capability, and ensuring the Company to operate in a consistent manner

SPECIFIC MANDATE

The Company will seek the approval of the Shareholders at the EGM to grant the Specific Mandate to the Board to allot and issue the Conversion Shares upon the exercise of the conversion rights attaching to the Bonds.

APPLICATION FOR LISTING

The Company has applied to the Stock Exchange for the listing of the Bonds by way of debt issues to professional investors (as defined in Chapter 37 of the Listing Rules and in the SFO) only and for the listing of and permission to deal in the Conversion Shares.

INFORMATION ON THE PURCHASER

The principal business of the Purchaser is investment holding. The Purchaser is wholly-owned by an investment fund, Bain Capital Distressed and Special Situations 2019 (A), L.P. (the "Fund") , managed and advised by Bain Capital Credit, LP ("BCC") and affiliates. The limited partners who hold more than 5% economic interest in the Fund are as follows: Bain Capital employee coinvest vehicle, a US State Public Pension, a US Indian Tribe (a federally recognized tribe) and a US Consultant (a pooled investment fund managed by a US consultant for clients of the consultant) (the "Substantial Limited Partners"). To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Purchaser, the Fund and each of the Substantial Limited Partners are independent third parties and not connected persons of the Company. BCC is one of the largest and most established debt investors globally. A leading global credit specialist, BCC is an affiliate of Bain Capital, LP ("Bain Capital"), one of the world's foremost alternative investment firms with US$100 billion in assets under management as of 31 March 2020. BCC is a limited partnership formed under the laws of Delaware, United States of America. With approximately US$40 billion in assets under management as of 1 April 2020, BCC invests across the full spectrum of credit strategies, including leveraged loans, high-yield bonds, distressed debt, direct lending, structured products, non-performing loans and equities. BCC's ultimate owner is Bain Capital Holdings, LP, which is a fully distributed private partnership. The limited partners of Bain Capital

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LETTER FROM THE BOARD

Holdings, LP are its Managing Directors. BCC advises or manages funds, separately managed accounts and other collective investment schemes that invest in a wide variety of securities and investments, including leverage loans, high-yield bonds, distressed/stressed debt, mezzanine debt, structured products and equities. Headquartered in Boston and has offices in London, New York, Melbourne, Sydney, Hong Kong and Chicago, BCC has 324 employees, including 152 investment professionals as of 1 January 2020. The Purchaser meets the definition of "professional investors" as defined in Chapter 37 of the Listing Rules and in the SFO. Given the Purchaser's strong global reputation and track record, the Company believes that the Purchaser will bring in more global investment expertise, and further broaden the Company's funding access and business network in the international capital markets.

INFORMATION ON THE COMPANY

The Company is incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange. The Company is an investment holding company. The Group is principally engaged in the leasing of storage facilities and the related management services in the PRC.

REASON FOR THE ISSUE OF THE BONDS AND USE OF PROCEEDS

The issue of Bonds will raise net proceeds of approximately US$97 million which will be used for the following purposes:

1. approximately US$90 million will be used for the repayment in full of the outstanding principal amount and accrued interests of the November 2020 Notes; and
2. approximately US$7 million will be used for the Company's general corporate purposes, such as development of new projects.

The issue price of the Bonds, the Initial Conversion Price were arrived at after arm's length negotiations between the parties to the Subscription Agreement with reference to the prevailing trading prices of the Shares in May 2020 during which the parties negotiated and contemplated the Bond Issue, the initial conversion price of the Existing Bonds and the financial conditions of the Company. The Company has immediate funding need to repay in full of the November 2020 Notes. The Directors are of the view that the issue of the Bonds can provide the Company with additional funds at lower funding cost for the said purposes. This also strengthens the Company's cash position, enabling the Company to better allocate its existing financial resources to further develop its business.

The Board considers the Bonds with an interest rate below 7% an effective financing solution to reduce the Company's interest expenses. In addition, the Board considers the current interest expenses level to be comparatively high, so the issue of the Bonds can significantly lower interest payments once it is converted into common equity.

The August 2020 Notes are trading at 8% yield and the September 2021 Notes are trading at 8.75% yield, so the Bondholders are receiving an interest rate materially lower than a straight bond. The Bonds are also different from the other convertible bonds in the market with an underlying stock having sufficient liquidity, as the liquidity of the Company's stocks is comparatively low and no stock borrowing arrangements have been agreed with the controlling shareholders. In order to compensate the economic difference, the Company agrees to offer certain standard convertible bonds features, including the conversion price reset and the change of control conversion price adjustment. The conversion price reset mechanism serves as a protection to the Purchaser in exchange for a lower interest rate for the Bonds. The

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LETTER FROM THE BOARD

conversion price resets will only apply on two specified Reset Dates in the event that the Reset Reference Share Price on the relevant Reset Date is at least 10% lower than the then conversion price and are subject to an 80.0% adjustment floor of the Initial Conversion Price (as adjusted to reflect any adjustments which may have occurred prior to the relevant Reset Date). Nevertheless, the then conversion price after reset shall not be lower than the Initial Floor Conversion Price, which represents a discount of approximately 24.05% to the closing price of HK$3.36 per Share as quoted on the Stock Exchange on the date of the Subscription Agreement.

The Company set the Initial Floor Conversion Price at 80% adjustment floor of the Initial Conversion Price, which is within a typical reset floor range of 80-85% for convertible bonds in the market (such as the 7.5% convertible bonds due 2019 issued by China LotSynergy Holdings Limited which had terms that the adjusted conversion price shall not fall below 80% of the initial conversion price; and the 6.5% convertible bonds due 2022 issued by New Concepts Holdings Limited which has terms that the reset conversion price shall not be lower than 80% of initial conversion price). The Company would be able to estimate the maximum number of Conversion Shares to be issued based on the Initial Floor Conversion Price. This could also avoid the scenario that the Company needs to allot and issue more Conversion Shares in the event that the Shares price drops significantly under the current volatility stock market resulting in a greater dilution of the existing shareholding of the Company.

The Company has considered other financing options, including refinancing the existing indebtedness with the existing lenders or a new senior bond issuance, but the expected funding cost is significantly higher than the Bonds taking into account the interest rate of the existing indebtedness and the current market conditions. In addition, the Company does not prefer pure debt financing at this point, due to the aforementioned EBITDA interest coverage ratio. The Company is however still open to various equity financing options, and is actively exploring the potential of other possible equity financing solutions.

The Company is of the view that the benefit of the Subscription would outweigh the possible dilution to the Shareholders on the following basis:

1. the Subscription provides an opportunity for the Company to raise additional funds to strengthen its financial position for future business development;
2. the Subscription has broadened the Company's investor profile, as the Purchaser is ultimately controlled by Bain Capital Credit, LP which is a credit specialist with a global coverage of sizable assets under management; and
3. the repayment of the November 2020 Notes by using the net proceeds from the Subscription would reduce the Group's financing costs given the Bonds carry an interest rate below 7% compared to the other senior notes issued by the Company and the debt financing options available to the Company in the market.

Having considered the above and the fact that the possible dilution to the Shareholders is not significant, the Company is of the view that the Subscription and the Bond Issue are in the interest of the Company and the Shareholders.

In case the Shareholders vote down the proposal of the issue of the Bonds, the Company can look for alternative financing solutions, such as refinancing the existing private loans by issuing a new senior bond, utilizing the cash on hand or disposing assets to core logistics funds to realize more cash for the repayment of the existing indebtedness. However, those solutions will likely either increase the Company's debt funding cost or reduce the pace of growth of the Company.

Given the "Change of Control" events are customary change of control events for similar convertible bond deals in the market which would provide assurance to the Bondholders and ensure the Company operates in a consistent manner, the Board considers that the "Change of Control" events as set out in

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LETTER FROM THE BOARD

the Conditions are not extensive and are in the interest of the Company and its Shareholders as a whole. Although a change in the majority board members may constitute a "Change of Control", the Board considers that it will not affect the Board and the Shareholders' rights as to change or election of the Directors given none of the "Change of Control" events impose any restriction to the composition of the Board or influence the Shareholders' right to cast vote for or against the proposed resolutions for election of directors at a general meeting of the Company. In addition, the Board considers that the adjustment mechanisms, including but not limited to the conversion price reset, the Change of Control adjustment, other possible adjustments to the conversion price, the redemption at the option of the Bondholders, are fair and reasonable and in the interest of the Company and its Shareholders given (i) the Initial Conversion Price is set at a premium over the arithmetic average of the daily VWAP of each Share on the 20 consecutive trading days immediately prior to the date of the Subscription Agreement; (ii) the conversion price resets will only apply on two specified Reset Dates in the event that the Reset Reference Share Price on the relevant Reset Date is at least 10% lower than the then conversion price and are subject to an 80.0% adjustment floor of the Initial Conversion Price (as adjusted to reflect any adjustments which may have occurred prior to the relevant Reset Date); (iii) all of the other adjustment events to the conversion price (except the "Change of Control" adjustment) are within the control of the Company and subject to the Board's discretion; and (iv) these terms are customary provisions for similar convertible bond deals in the market.

The Permitted Holders are currently the largest Shareholders of the Company and are responsible for overseeing the operation of the Company. The Board does not expect any significant shareholding percentage change by Permitted Holders in the foreseeable future. On the other hand, the Company's treasury is fully aware of the relevant "Change of Control" events as described in the Bonds (as the case may be) and also in other securities issued by the Company, and will ensure the Company has sufficient capital to redeem the relevant securities in the events that will trigger the "Change of Control" events.

In view of the above, the Directors (including the independent non-executive Directors) therefore consider that the terms and conditions of the Subscription Agreement and the issue of the Bonds are fair and reasonable, on normal commercial terms and in the interests of the Company and its Shareholders as a whole.

EQUITY FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

The Company has not conducted any other equity fund raising activities during the past twelve months immediately preceding the Latest Practicable Date.

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LETTER FROM THE BOARD

EFFECTS ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

The table below sets out the Company's shareholding structure (i) as at the Latest Practicable Date;

1. upon full exercise of the conversion right attaching to the Bonds at the Initial Conversion Price; and (iii) upon full exercise of the conversion right attaching to the Bonds at the Initial Floor Conversion Price.

					Assuming the Bonds are
			Assuming the Bonds are	fully issued and converted
			fully issued and converted	into Shares at the Initial Floor
	Shareholding as at the	into Shares at	Conversion Price on each
	Latest Practicable Date	the Initial Conversion Price	Reset Date respectively
		Approximate		Approximate		Approximate
		% of issued		% of issued		% of issued
	Number of	share capital of	Number of	share capital of	Number of	share capital of
	Shares	the Company	Shares	the Company	Shares	the Company
The Purchaser (Note 5)	-	-	242,962,382	6.98%	303,702,978	8.58%
Existing Shareholders (Note 1)
Mr. Li Shifa (Note 2)	916,488,000	28.32%	916,488,000	26.34%	916,488,000	25.89%
RRJ Capital (Note 3)	753,133,000	23.27%	753,133,000	21.64%	753,133,000	21.27%
ESR Cayman Limited
(Note 4)	443,148,000	13.69%	443,148,000	12.74%	443,148,000	12.52%
Other Existing
Shareholders	1,123,779,917	34.72%	1,123,779,917	32.30%	1,123,779,917	31.74%
Total	3,236,548,917	100%	3,479,511,299	100%	3,540,251,895	100%

Notes:

1. Existing Shareholders represent those Shareholders who did not subscribe for the Bonds or participate in the Subscription.
2. Mr. Li Shifa, who is the chairman and an executive Director of the Company, holds the entire issued share capital of Lee International Investment Management Co., Ltd, which in turn holds 90% interest in Yupei International Investment Management Co., Ltd. Ms. Ma Xiaocui is the wife of Mr. Li Shifa and is deemed to be interested in the Shares which are interested by Mr. Li under the SFO. Save for the lock-up undertaking provided by Mr. Li as disclosed, as at the Latest Practicable Date, the Company has not obtained any agreement from the Permitted Holders on the maintenance of their shareholdings.
3. RRJ Capital holds the entire issued share capital of Berkeley Asset Holding Ltd, which holds 740,173,000 Shares and 184,639,498 underlying Shares of the Existing Bonds and 208,749,000 Shares underlying the Company's unlisted physically settled derivatives in short position. RRJ Capital also wholly-owns Travis Asset Holding Ltd ("Travis Asset") which in turn holds the entire issued share capital of Sherlock Asset Holding Ltd ("Sherlock Asset") which holds 12,960,000 Shares. Accordingly, RRJ Capital is deemed to be interested in 740,173,000 Shares and 184,639,498 underlying Shares of the Existing Bonds and 208,749,000 Shares underlying the Company's unlisted physically settled derivatives in short position held by Berkeley Asset Holding Ltd, and each of RRJ Capital and Travis Asset is deemed to be interested in the 12,960,000 Shares held by Sherlock Asset.

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LETTER FROM THE BOARD

1. ESR Cayman Limited holds the entire issued share capital of ESR HK Management Limited, which holds 390,151,000 Shares. ESR Cayman Limited holds 52,997,000 Shares. As a result, ESR Cayman Limited is a beneficial owner as to 52,997,000 Shares and is deemed to be interested in 390,151,000 Shares held by ESR HK Management Limited. ESR Cayman Limited is indirectly owned as to 38.35% by WP X Investment VI Ltd, which is in turn indirectly owned as to 96.90% by Warburg Pincus & Co. Accordingly, each of Warburg Pincus & Co. and WP X Investment VI Ltd is deemed to be interested in 443,148,000 Shares.
2. The Company does not expect the Purchaser would become a connected person of the Company due to the exercise of the conversion rights attaching to the Bonds.

Assuming the Bonds are fully issued and converted into Shares at the Initial Floor Conversion Price, the Company will still be able to meet the public float requirement under the Listing Rules. There is no public float restriction clause in the Conditions.

EGM

The EGM will be held at Meeting Room, 8/F, Block A, No. 1899 Shenkun Road, Minhang District, Shanghai, China on Friday, 14 August 2020 at 2:00 p.m. to consider and, if thought fit, approve, by way of poll, the Subscription Agreement and the transactions contemplated thereunder (including the issue of the Bonds under the Specific Mandate).

The Subscription Agreement and the transactions contemplated thereunder (including the Bond Issue and the Subscription) will be presented to the EGM as one ordinary resolution for the Shareholders to approve. Therefore, there will not be a circumstance that the Shareholders would not agree on the Subscription but wish the Company to proceed with the Bond Issue.

To the best knowledge of the Directors after having made all reasonable enquiries, no Shareholder would be required to abstain from voting to approve the Subscription Agreement and the transactions contemplated thereunder.

The notice of EGM is set out on pages EGM-1 to EGM-2 of this circular. Whether or not you are able to attend the EGM, please complete and return the accompanying proxy form in accordance with the instructions printed thereon and return it to the Company's share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time fixed for the holding of the EGM or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting at the EGM or any adjournment thereof should you so wish.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. Accordingly, the resolution set out in the notice of the EGM will be put to vote by way of poll at the EGM. An announcement on the poll vote results will be made by the Company after the EGM in the manner prescribed under Rule 13.39(5) of the Listing Rules.

- 34 -

LETTER FROM THE BOARD

RECOMMENDATIONS

The Shareholders are advised to read the aforesaid letters before deciding as to how to vote at the EGM.

FURTHER INFORMATION

Your attention is drawn to the information set out in the appendix to this circular.

Yours faithfully,

By Order of the Board

China Logistics Property Holdings Co., Ltd

Li Shifa

Chairman

- 35 -

APPENDIX I	GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the 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 Group. The 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. SHARE CAPITAL

The number of issued Shares (i) as at the Latest Practicable Date; and (ii) upon full exercise of the conversion rights attaching to the Bonds (assuming there will be no other change in the number of issued Shares after the Latest Practicable Date) as follows:

(i) Number of issued Shares as at the Latest Practicable Date

3,236,548,917

1. Number of issued Shares immediately upon full exercise of the conversion rights attaching to the Bonds

Conversion Shares to be allotted and issued upon full exercise of the conversion	242,962,382
rights attaching to the Bonds (based on the Initial Conversion Price)
Shares in issue upon full exercise of the conversion rights attaching to the	3,479,511,299
Bonds (based on the Initial Conversion Price)

All issued Shares rank pari passu in all respects with each other, including, in particular, as to dividends, voting rights and return of capital.

The Conversion Shares to be allotted and issued will, when issued, rank pari passu in all respects with the Shares then in issue. The Bondholders will be entitled to receive all dividends and distributions which may be declared, made or paid on or after the date of issue of Conversion Shares. As at the Latest Practicable Date, there was no arrangement under which future dividends are waived or agreed to be waived.

The issued Shares are listed on the Stock Exchange. Save for the August 2020 Notes, the September

2021 Notes, the Existing Bonds and the Bonds, none of the securities of the Company is listed or dealt in, and no listing or permission to deal in the securities of the Company is being or is proposed to be sought on any other stock exchange.

Save as disclosed above, the Company did not have any outstanding convertible securities, options or warrants in issue or similar rights which confer any right to subscribe for, convert or exchange into the Shares or any agreement or arrangement to issue Shares.

- I-1 -

APPENDIX I	GENERAL INFORMATION

3. DISCLOSURE OF INTERESTS

1. Interests and Short Positions of the Directors and the Chief Executive in the Shares, Underlying Shares and Debentures

As at the Latest Practicable Date, the interests and short positions of the Directors or the chief executive of the Company in the Shares, underlying Shares or debentures of the Company and its associated corporations (pursuant to the Divisions 7 and 8 of Part XV of the SFO) as recorded in the register required to be kept by the Company under section 352 of the SFO or as otherwise be notified to the Company and the Stock Exchange pursuant to the Model Code were as follows:

		Number of Shares/	Approximate
	Capacity/Nature	underlying Shares	percentage of
Name of Director	of interest	interested(1)	shareholding(2)
Li Shifa(3)	Interest of controlled	916,488,000	28.32%
	corporation
Wu Guolin(4)	Beneficial Owner	1,872,000	0.06%
Li Qing(5)	Beneficial Owner	1,872,000	0.06%
Shi Lianghua(6)	Beneficial Owner	1,648,000	0.05%
Li Huifang(7)	Beneficial Owner	504,000	0.02%
Xie Xiangdong(8)	Beneficial Owner	544,000	0.02%

Notes:

1. All interests stated are long positions.
2. As at the Latest Practicable Date, the Company had 3,236,548,917 issued Shares.
3. Mr. Li holds the entire issued share capital of Lee International Investment Management Co., Ltd, which in turn holds 90% interest in Yupei International Investment Management Co., Ltd. Accordingly, Mr. Li is deemed to be interested in the 916,488,000 Shares held by Yupei International Investment Management Co., Ltd.
4. Mr. Wu Guolin is interested in 1,872,000 options granted to him under the pre-IPO share option scheme of the Company, representing 1,872,000 underlying Shares.
5. Ms. Li Qing is interested in 1,872,000 options granted to her under the pre-IPO share option scheme of the Company, representing 1,872,000 underlying Shares.
6. Ms. Shi Lianghua is interested in 1,648,000 options granted to her under the pre-IPO share option scheme of the Company, representing 1,648,000 underlying Shares.
7. Ms. Li Huifang is interested in 504,000 options granted to her under the pre-IPO share option scheme of the Company, representing 504,000 underlying Shares.
8. Mr. Xie Xiangdong is interested in 544,000 options granted to him under the pre-IPO share option scheme of the Company, representing 544,000 underlying Shares.

- I-2 -

APPENDIX I	GENERAL INFORMATION

1. Interests of the Directors and the Chief Executive in Associated Corporations

		Capacity/	Number	Approximate
	Name of associated	Nature of	of shares	percentage of
Name of Director	corporation	interest	interested(1)	shareholding
Li Shifa	Lee International	Beneficial	50,000	100%
	Investment		owner
	Management Co., Ltd(2)
	Yupei International	Interest of	50,000	100%
	Investment		controlled
	Management Co., Ltd (2)		corporation
			and interest
			of spouse

1. All interests stated are long positions.
2. Mr. Li holds the entire issued share capital of Lee International Investment Management Co., Ltd, which in turn holds 45,000 shares in Yupei International Investment Management Co., Ltd. The remaining 5,000 shares in Yupei International Investment Management Co., Ltd are held by Ms. Ma Xiaocui, the wife of Mr. Li. Accordingly, Mr. Li is deemed to be interested in the 50,000 shares in Yupei International Investment Management Co., Ltd.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company had any interests or short positions in any of the Shares, underlying Shares or debentures of the Company or any of its associated corporations (pursuant to the Divisions 7 and 8 of Part XV of the SFO) as recorded in the register required to be kept by the Company pursuant to section 352 of the SFO or as notified to the Company and the Stock Exchange pursuant to the Model Code.

1. Directors' Positions in Other Companies

As at the Latest Practicable Date, as far as the Company is aware, the following Directors are employed by the following companies which have interests or short positions in the Shares or underlying Shares of the Company which are required to be notified to the Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO:

Name of Director	Position Held in the Specific Company
Li Shifa	The sole director of Yupei International Investment Management
		Co., Ltd and the sole director of Lee International Investment
		Management Co., Ltd
Chen Runfu	The senior vice president of Sino-Ocean Group Holding Limited

- I-3 -

APPENDIX I	GENERAL INFORMATION

1. Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares

As at the Latest Practicable Date, the following persons (other than the Directors or the chief executive of the Company) have interests or short positions in the Shares or underlying Shares as recorded in the register required to be kept by the Company under section 336 of the SFO:

				Number	Approximate
		Capacity/Nature	of Shares	percentage of
Name of Shareholder	of interest	interested(1)	shareholding(1) (2)
Lee International Investment	Interest of controlled	916,488,000(L)	28.32%(L)
	Management Co., Ltd(3)		corporation
Yupei International	Beneficial owner	916,488,000(L)	28.32%(L)
	Investment Management
	Co., Ltd(3)
Ma Xiaocui(4)	Interest of spouse	916,488,000(L)	28.32%(L)
RRJ Capital Master	Interest of controlled	937,772,498(L)	28.97%(L)
	Fund II, L.P.(5)		corporation	208,749,000(S)	6.45%(S)
ESR HK Management	Beneficial owner	390,151,000(L)	12.05%(L)
	Limited(6)
ESR Cayman Limited(6)	Interest of controlled	390,151,000(L)	12.05%(L)
			corporation
		Beneficial owner	52,997,000(L)	1.64%(L)
Warburg Pincus & Co.(6)	Interest of controlled	443,148,000(L)	13.69%(L)
			corporation
WP X Investment VI Ltd.(6)	Interest of controlled	443,148,000(L)	13.69%(L)
			corporation
JD.com, Inc.(7)	Interest of controlled	321,068,999(L)	9.92%(L)
			corporation
Jingdong Logistics Group	Beneficial owner	321,068,999(L)	9.92%(L)
	Corporation(7)
Max Smart Limited(7)	Interest of controlled	321,068,999(L)	9.92%(L)
			corporation
劉強東(7)	Beneficiary of a trust	321,068,999(L)	9.92%(L)
			(other than a
			discretionary interest)
Sino-Ocean Group Holding	Interest of controlled	287,741,000(L)	8.89%(L)
	Limited(8)		corporation

Notes:

1. The letter "S" denotes the person's short position in such Shares. The letter "L" denotes the person's long position in such Shares.
2. As at the Latest Practicable Date, the Company had 3,236,548,917 issued Shares.

- I-4 -

APPENDIX I	GENERAL INFORMATION

1. Mr. Li Shifa holds the entire issued share capital of Lee International Investment Management Co., Ltd, which in turn holds 90% interest in Yupei International Investment Management Co., Ltd. Such interests are also disclosed as the interests of Mr. Li in the section headed "Interests and Short Positions of the Directors and the Chief Executive in the Shares, Underlying Shares and Debentures" above.
2. Ms. Ma Xiaocui is the wife of Mr. Li Shifa and is deemed to be interested in the Shares which are interested by Mr. Li under the SFO.
3. RRJ Capital holds the entire issued share capital of Berkeley Asset Holding Ltd, which holds 740,173,000 Shares and 184,639,498 underlying Shares of the Existing Bonds and 208,749,000 Shares underlying the Company's unlisted physically settled derivatives in short position. RRJ Capital also wholly-owns Travis Asset Holding Ltd ("Travis Asset") which in turn holds the entire issued share capital of Sherlock Asset Holding Ltd ("Sherlock Asset") which holds 12,960,000 Shares. Accordingly, RRJ Capital is deemed to be interested in 740,173,000 Shares and 184,639,498 underlying Shares of the Existing Bonds and 208,749,000 Shares underlying the Company's unlisted physically settled derivatives in short position held by Berkeley Asset Holding Ltd, and each of RRJ Capital and Travis Asset is deemed to be interested in the 12,960,000 Shares held by Sherlock Asset.
4. ESR Cayman Limited holds the entire issued share capital of ESR HK Management Limited, which holds 390,151,000 Shares. ESR Cayman Limited holds 52,997,000 Shares. As a result, ESR Cayman Limited is a beneficial owner as to 52,997,000 Shares and is deemed to be interested in 390,151,000 Shares held by ESR HK Management Limited. ESR Cayman Limited is indirectly owned as to 38.35% by WP X Investment VI Ltd, which is in turn indirectly owned as to 96.90% by Warburg Pincus & Co.. Accordingly, each of Warburg Pincus & Co. and WP X Investment VI Ltd is deemed to be interested in 443,148,000 Shares.
5. 劉強東 (Mr. Richard Qiangdong Liu) controls 100% of Max Smart Limited, which in turn controls 72.63% of issued share capital of JD.com, Inc.. JD.com, Inc. holds the entire issued share capital of Jingdong Logistics Group Corporation. Accordingly, each of 劉強東, Max Smart Limited and JD.com, Inc. is deemed to be interested in the 321,068,999 Shares held by Jingdong Logistics Group Corporation.
6. Sino-OceanGroup Holding Limited is deemed to be interested in the 287,741,000 Shares through a series of controlled corporations, including, among others, Shine Wind Development Limited, Faith Ocean International Limited, Sino-Ocean Land (Hong Kong) Limited and Joy Orient Investments Limited.

Save as disclosed above, as at the Latest Practicable Date, the Directors or chief executive of the Company are not aware of any other person, not being a Director or chief executive of the Company, who has an interest or short position in the Shares or the underlying Shares as recorded in the register required to be kept by the Company under section 336 of the SFO.

4. DIRECTORS' SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with any member of the Group or any associated company of the Company (excluding contracts expiring or determinable within one year without payment of compensation, other than statutory compensation).

- I-5 -

APPENDIX I	GENERAL INFORMATION

5. COMPETING BUSINESS INTEREST OF DIRECTORS

As at the Latest Practicable Date, none of the Directors or their respective close associates had engaged in or had any interest in any business which competes or may compete, either directly or indirectly, with the businesses of the Group except for Mr. Li, who is a director and the ultimate controlling shareholder of Shanghai Yupei Industry (Group) Company Limited (上海宇培實業(集團)有限公司). Shanghai Yupei Industry (Group) Company Limited operates Yupei Shanghai Northwest Logistics Park. Further details of the logistics park are set out in the prospectus of the Company dated 30 June 2016.

6. DIRECTORS' INTERESTS IN THE GROUP'S ASSETS OR CONTRACTS OR ARRANGEMENTS SIGNIFICANT TO THE GROUP

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had since 31 December 2019, being the date to which the latest published audited accounts of the Group were made up, been acquired or disposed of by or leased to any member of the Group or is proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, save for each of the 2015 SYPI Group Transactions, the 2017 Property Lease Transactions and the Continuing Connected Transactions in which Mr. Li is interested, none of the Directors was materially interested, either directly or indirectly, in any contract or arrangement entered into by any member of the Group which was subsisting at the Latest Practicable Date and was significant to the business of the Group.

7. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2019, the date to which the latest published audited accounts of the Company are made up.

8. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries were engaged in any litigation or arbitration proceedings of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened by or against any member of the Group.

9. GENERAL

1. The registered office of the Company is at 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands.
2. The headquarters and principal place of business of the Company in the PRC is No. 1899 Shenkun Road, Minhang District, Shanghai, China (201106).
3. The principal place of business of the Company in Hong Kong is situated at Unit 3213, Cosco Tower, 183 Queen's Road Central, Sheung Wan, Hong Kong.

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APPENDIX I	GENERAL INFORMATION

1. The company secretary of the Company is Ms. So Ka Man. Ms. So Ka Man is a chartered secretary and a fellow of both The Hong Kong Institute of Chartered Secretaries ("HKICS") and The Institute of Chartered Secretaries and Administrators in the United Kingdom. She is a holder of the Practitioner's Endorsement from HKICS.
2. The Company's share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, is situated at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong.
3. The English text of this circular shall prevail over the Chinese text in the event of inconsistency.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at Unit 3213, Cosco Tower, 183 Queen's Road Central, Sheung Wan, Hong Kong during normal business hours on any weekdays (except public holidays), from the date of this circular up to and including the date of the EGM:

1. the Subscription Agreement;
2. the articles of association of the Company;
3. the audited consolidated accounts of the Group for the years ended 31 December 2018 and 31 December 2019; and
4. this circular.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

China Logistics Property Holdings Co., Ltd

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1589)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT an extraordinary general meeting (the "Meeting") of China Logistics Property Holdings Co., Ltd (the "Company") will be held at Meeting Room, 8/F, Block A, No. 1899 Shenkun Road, Minhang District, Shanghai, China on Friday, 14 August 2020 at 2:00 p.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolution as an ordinary resolution of the Company:

Unless otherwise defined, capitalised terms used herein shall have the same meanings as ascribed to them in the circular of the Company dated 27 July 2020 .

ORDINARY RESOLUTION

"THAT:

1. the Subscription Agreement entered into between the Company, the Subsidiary Guarantors and the Purchaser in relation to the subscription for the Bonds in the principal amount of US$100,000,000, a copy of the Subscription Agreement having been produced to the Meeting marked "A" and signed by the chairman of the Meeting for identification purpose, and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified;
2. the issue by the Company of the Bonds in the principal amount of US$100,000,000 at an initial Conversion Price of HK$3.19 per Share (subject to adjustments) pursuant to the Subscription Agreement be and are hereby approved;
3. the Directors be and are hereby granted a specific mandate to allot and issue the Conversion Shares upon the exercise of the conversion rights attaching to the Bonds; and
4. each of the Directors be and is hereby authorised to do all such acts and things and sign, ratify or execute all such documents and take all such steps as the Director in his/her discretion may consider necessary, appropriate, desirable and expedient to implement, give effect to or in connection with the Subscription Agreement, the issue of the Bonds, the allotment and issue of the Conversion Shares and any of the transactions contemplated thereunder."

On behalf of the Board

China Logistics Property Holdings Co., Ltd

Li Shifa

Chairman

Hong Kong, 27 July 2020

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

1. Any Shareholder entitled to attend and vote at the Meeting is entitled to appoint another person as his proxy to attend and vote instead of him. Any Shareholder who is the holder of two or more Shares may appoint more than one proxy to represent him and vote on his behalf at the Meeting. A proxy need not be a Shareholder. To be valid, the proxy form, together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy thereof, must be lodged with the Company's share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong not less than forty-eight (48) hours before the time appointed for holding the Meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude a member from attending and voting in person at the meeting.
2. Where there are joint holders of any Share, any one of such joint holder may vote, either in person or by proxy, in respect of such Share as if he were solely entitled thereto, but if more than one of such joint holders be present at the Meeting, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members of the Company in respect of the joint holding.
3. The register of members of the Company will be closed from Tuesday, 11 August 2020 to Friday, 14 August 2020 (both days inclusive), during which period no transfer of shares of the Company will be registered. In order to be eligible to attend and vote at the above meeting, unregistered holders of shares of the Company should ensure that all share transfer documents accompanied by the relevant share certificates must be lodged with the Company's share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong for registration not later than 4:30 p.m on Monday, 10 August 2020.
4. If Typhoon Signal No. 8 or above, or a "black" rainstorm warning is in effect at the time of the Meeting, the Meeting will be held as scheduled unless further notice posted on the websites of the Company and the Stock Exchange to notify Shareholders of the date, time and place of the rescheduled meeting.
   Shareholders should make their own decision as to whether they would attend the Meeting under bad weather conditions bearing in mind their own situation and if they should choose to do so, they are advised to exercise care and caution.
5. As at the date of this notice, the Board comprises Mr. Li Shifa, Mr. Wu Guolin, Ms. Li Huifang, Mr. Chen Runfu, Mr. Cheuk Shun Wah, Ms. Shi Lianghua and Mr. Xie Xiangdong as the executive directors; Mr. Huang Xufeng, Ms. Li Qing and Mr. Fu Bing as the non-executive directors; and Mr. Guo Jingbin, Mr. Fung Ching Simon, Mr. Wang Tianye, Mr. Leung Chi Ching Frederick and Mr. Chen Yaomin as the independent non-executive directors of the Company.
6. References to time and dates in this notice are to Hong Kong time and dates.

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