China Medical & HealthCare Group Limited announced that after a tendering and selection process, on 8 July 2022 (after trading hours), the Principal (an indirect wholly-owned subsidiary of the Company) entered into the Construction Agreement with the Contractor (as the main contractor) for the construction of the Kunming Tongren Hospital Phase II, which includes, among others, the integrated in- patient building, thyroid centre and the rehabilitation medical building at the Consideration of RMB 225,916,266 (equivalent to approximately HKD 264,322,031.22). The Consideration was determined by the parties after arm's length negotiation and based on the tender price provided by the Contractor, and the Construction Agreement was awarded to the Contractor by the Principal after a tendering and selection process conducted by the Group with the assistance from consultancy firms qualified in cost management and consultation in construction projects in the PRC. The Principal has assessed the relevant technical experience, professional qualification, reputation and capability of the Contractor, the expected scope, complexity and expected costs of the Construction Works to be undertaken, the prevailing market price of construction works with similar scale and complexity and other relevant factors.

The Directors consider that the Consideration is fair and reasonable.