CHINA TANGSHANG (00674): The Group has paid approximately 362 million yuan to Shenzhen Huitong as a deposit.

CHINA TANGSHANG (00674) announced that on April 1, 2023, Puning Huachuangwen Industry Development Co., Ltd. ("Puning Huachuangwen"), a wholly-owned subsidiary of the company, signed a non-binding Letter of Intent ("LOI") with Shenzhen Huitongchuang Cai Co., Ltd. ("Shenzhen Huitong"). Shenzhen Huitong is the company authorized to coordinate and seek potential investors for the urban renewal project ("the Project") in Xintan Village, Liusha East Street, Puning City, Guangdong Province. According to the LOI, Puning Huachuangwen expressed interest in investing in the Project and agreed to pay a total of RMB 400 million as a deposit ("Deposit") to ensure investment and cooperation opportunities in the Project. Puning Huachuangwen is required to pay RMB 300 million (cumulative) by December 31, 2023, and RMB 400 million (cumulative) by December 31, 2024. As of March 31, 2024, approximately RMB 313 million in deposits have been paid in installments to the bank account of Shenzhen Huitong. As of the date of this announcement, a total of approximately RMB 362 million has been paid to Shenzhen Huitong as a deposit by the Group. According to the provisions of the LOI, Puning Huachuangwen has the right to further decide whether to invest. If Puning Huachuangwen decides not to invest in the Project or if the planned terms and financial data of the Project do not receive government approval within 3 years from the date of the LOI, the Deposit will be unsecured, interest-free, and repayable unconditionally upon request. If Puning Huachuangwen decides to invest in the Project, the Deposit will be converted into project investment capital and used for project development. The Project is located in Xintan Village, Liusha East Street, Puning City, Guangdong Province, China. The total area of the Project is approximately 53,000 square meters. The Project aims to develop into a comprehensive complex combining residential, commercial, community facilities, tourism, entertainment, and featuring Chaozhou culture and design after the existing buildings are demolished and existing residents relocated. The preliminary development period of the Project is from 2020 to 2035, lasting approximately 15 years. The Project has drafted preliminary urban renewal plans, terms, and financial data, but is still in communication with the government to obtain further details on the plans and terms. As of the date of this announcement, the company has not obtained government approval or entered into any legally binding agreements regarding the Project. The Group is mainly engaged in property development business in China. Due to the slowdown in the Chinese real estate market in recent years, the Group has struggled to find good and profitable property development opportunities in China. Based on discussions with Shenzhen Huitong and market information on the Project, the Group's management believes that the Project located in the central area of Puning City is a super large-scale urban renewal project strongly supported by the local government. It is expected that the Project will generate potential returns, and the Group should seize the opportunity to invest in the Project. As the Project, if implemented, will involve a significant investment amount for demolishing existing buildings, relocating existing residents, and constructing new residential areas and other buildings, a deposit is required to demonstrate the firm intention of investors to participate in the Project. As of the date of this announcement, the company is waiting for relevant data on the Project to be released by the government and has not entered into any binding agreements regarding the Project. The company will decide whether to participate in the Project after obtaining the data and government approval, considering the long development period and scale of the Project, which is expected to take a longer time. Although the Deposit has been paid by the Group, if the company decides not to participate in the Project, the Deposit will be refunded in full upon the company's request.