02255 海昌海洋公园展示文件：(015) 通函(英文版)

Ifyouareinanydoubtastoanyaspectofthiscircularorastotheactiontobetaken,youshouldconsultyourstockbrokerorother

registeredealerinsecurities,bankmanager,solicitor,profesionalacountantorotherprofesionaladviser.

IfyouhavesoldortransferedalyoursharesinHaichangOceanParkHoldingsLtd.(the“Company”),youshouldatoncehand

thiscircularandtheacompanyingformofproxytothepurchaserorthetransfereortothebank,stockbrokerorotheragenthrough

whomthesaleortransferwasefectedfortransmisiontothepurchaserorthetransfere.

HongKongExchangesandClearingLimitedandTheStockExchangeofHongKongLimitedtakenoresponsibilityforthecontents

ofthiscircular,makenorepresentationastoitsacuracyorcompletenesandexpreslydisclaimanyliabilitywhatsoeverforany

loshowsoeverarisingfromorinrelianceuponthewholeoranypartofthecontentsofthiscircular.

Thiscircularapearsforinformationpurposesonlyandoesnotconstituteaninvitationorofertoacquire,purchaseorsubscribe

forthesecuritiesoftheCompany.

HAICHANGOCEANPARKHOLDINGSLTD.

海昌海洋公园控股有限公司

(IncorporatedintheCaymanIslandswithlimitedliability)

(StockCode:2255)

(1)SUBSCRIPTIONOFNEWSHARESUNDERSPECIFICMANDATE;

(2)APLICATIONFORWHITEWASHWAIVER;

(3)PROPOSEDINCREASEINAUTHORISEDSHARECAPITAL;AND

(4)NOTICEOFEXTRAORDINARYGENERALMETING

FinancialadvisertotheCompanyFinancialadvisertotheSubscriber

IndependentFinancialAdviserto

theIndependentBoardComite

SOMERLEY CAPITAL LIMITED

Capitalisedtermsusedhereinshalhavethemeaningsetoutinthesectionheaded“Definitions”ofthiscircular.

Anoticeconveninganextraordinarygeneralmeting(the“EGM”)oftheCompanytobeheldatLargeMetingRom,31stFlor,

BuildingA,ForeshoreBeachWorldTradeCentrePhase1,No.4,Lane255,DongyuRoad,PudongNewDistrict,Shanghai,thePRC

onTuesday,19August2025at3:00p.m.isetoutonpages93to95ofthiscircular.AformofproxyforuseforyourShareholders

atheEGMisenclosedwiththiscircular.

WhetherornotyouareabletoatendtheEGM,youarerequestedtocompletetheacompanyingformofproxyinacordancewith

theinstructionsprintedthereonandeposithesameatheoficeoftheCompany’sbranchshareregistrarinHongKong,Tricor

InvestorServicesLimitedlocatedat17/F,FarEastFinanceCentre16HarcourtRoad,HongKongasonasposibleandinany

eventnotlesthan48hoursbeforethetimeapointedfortheholdingoftheEGMoranyadjournmenthereof.Completionandreturn

oftheformofproxywilnotprecludeyoufromatendingandvotinginpersonatheEGMoranyadjournmenthereofshouldyou

sowish.

ThiscirculartogetherwiththeformofproxywilbepublishedonthewebsitesofTheStockExchangeofHongKongLimited

(w.hkexnews.hk)andtheCompany(w.haichangoceanpark.com).

THISCIRCULARISIMPORTANTANDREQUIRESYOURIMEDIATEATENTION

31July2025

Page

1.DEFINITIONS.1

2.EXPECTEDTIMETABLE.7

3.LETERFROMTHEBOARD.9

4.LETERFROMTHEINDEPENDENTBOARDCOMITE.37

5.LETERFROMTHEINDEPENDENTFINANCIALADVISER.39

6.APENDIXI–FINANCIALINFORMATIONOFTHEGROUP.74

7.APENDIXI–GENERALINFORMATION.79

8.NOTICEOFEXTRAORDINARYGENERALMETING.93

CONTENTS

–i–

Inthiscircular,unlesthecontextotherwiserequires,thefolowingexpresionshal

havethefolowingmeanings:

“actinginconcert”hasthesamemeaningasascribedtoitunderthe

TakeoversCode

“AnhuiXianghuiyuan”AnhuiXianghuiyuanEnterpriseManagementCo.,Ltd.*

(安徽祥卉源企业管理有限公司),acompanyestablished

underthelawsofthePRCwithlimitedliabilityandone

oftheshareholdersofShanghaiSunriverYuancun

“AnhuiYuanyinxiang

Partnership”

AnhuiYuanyinxiangEnterpriseManagementConsulting

Partnership(LimitedPartnership)*(安徽源胤祥企业管理

咨询合伙企业(有限合伙),alimitedpartnership

establishedunderthelawsofthePRCwithlimited

liability,andoneoftheshareholdersofSHSunriver

Xinghai

“Anouncement”theanouncementoftheCompanydated2June2025in

relationto,amongotherthings,theSubscription,the

SpecificMandate,theWhitewashWaiver,theIncreasein

AuthorisedShareCapitalandtherespectivetransactions

contemplatedthereunder

“asociate”hasthesamemeaningasascribedtoitunderthe

TakeoversCode

“Board”theboardofDirectors

“BusinesDay”adayonwhichbanksinHongKongaregeneralyopen

forbusinesandtheStockExchangeisopenfortrading

insecurities(excludingSaturdays)

“CITICSecurities”CITICSecurities(HongKong)Limited(中信证券(香港)

有限公司),thefinancialadvisertotheCompany

“Company”HaichangOceanParkHoldingsLimited海昌海洋公园控

股有限公司,acompanyincorporatedintheCayman

Islandswithlimitedliability,theisuedsharesofwhich

arelistedontheMainBoardoftheStockExchange

(stockcode:2255)

“Completion”completionoftheSubscriptioninacordancewiththe

termsandconditionsoftheSubscriptionAgrement

DEFINITIONS

“conectedperson(s)”hasthesamemeaningasascribedtoitundertheListing

Rules

“controlingshareholder”hasthesamemeaningasascribedtoitundertheListing

Rules

“Director(s)”director(s)oftheCompany

“EGM”thextraordinarygeneralmetingtobeconvenedand

heldatLargeMetingRom,31stFlor,BuildingA,

ForeshoreBeachWorldTradeCentrePhase1,No.4,

Lane255,DongyuRoad,PudongNewDistrict,Shanghai,

thePRConTuesday,19August2025at3:00p.m.forthe

IndependentShareholderstoconsiderand,ifthoughtfit,

aprovetheSubscription,theSpecificMandate,the

WhitewashWaiver,theIncreaseinAuthorisedShare

Capitalandtherespectivetransactionscontemplated

thereunder

“Executive”theExecutiveDirectoroftheCorporateFinanceDivision

oftheSecuritiesandFuturesComisionoranydelegate

oftheExecutiveDirector

“FY2022”financialyearended31December2022

“FY2023”financialyearended31December2023

“FY2024”financialyearended31December2024

“Group”theCompanyanditsubsidiaries

“HefeiKunyou”HefeiKunyouEnterpriseManagementConsultingCo.,

Ltd.*(合肥堃佑企业管理咨询有限公司),acompany

establishedunderthelawsofthePRCwithlimited

liability,andthegeneralpartnerofAnhuiYuanyinxiang

Partnership

“HK$”HongKongdolars,thelawfulcurencyofHongKong

“HongKong”theHongKongSpecialAdministrativeRegionofthe

PRC

DEFINITIONS

“Huatai”HuataiFinancialHoldings(HongKong)Limited,

financialadvisertotheSubscriber,awholy-owned

subsidiaryofHuataiSecuritiesCo.,Ltd.(华泰证券股份

有限公司;Stockcode:6886.HK)

“Huatai-PineBridge”Huatai-PineBridgeFundManagementCo.,Ltd(华泰柏瑞

基金管理有限公司),whichisownedasto49%byHuatai

SecuritiesCo.,Ltd.(华泰证券股份有限公司;Stockcode:

6886.HK)

“IncreaseinAuthorisedShare

Capital”

hasthemeaningascribedtoitintheparagrapheaded

“ProposedIncreaseinAuthorisedShareCapital”inthe

LeterfromtheBoardofthiscircular

“IndependentBoardComite”anindependentboardcomite,comprisesMr.Yuan

BingandMr.GoToutou,whoarenon-executive

Directors,andaltheindependentnon-executive

Directors,namelyMr.WangJun,Mr.ZhuYuchenand

Ms.ShenHan,toadvisetheIndependentShareholdersas

tothefairnesandreasonablenesoftheSubscription

AgrementandtheWhitewashWaiverandastovoting

“IndependentFinancialAdviser”

or“SomerleyCapital”

SomerleyCapitalLimited,acorporationlicensedtocary

outType1(dealinginsecurities)andType6(advisingon

corporatefinance)regulatedactivitiesundertheSFO

“IndependentShareholders”Shareholdersotherthan(i)theSubscriber,itsultimate

beneficialowneranditsasociates;anypartiesactingin

concertwiththeSubscriberoritsultimatebeneficial

owner;and(i)theShareholdersinvolvedorinterestedin

theSubscription,theSpecificMandate,theWhitewash

Waiverandtherespectivetransactionscontemplated

thereunderatheEGM

“IP(s)”intelectualproperty(ies)

“LatestPracticableDate”28July2025,beingthelatestpracticabledatepriortothe

printingofthiscircularforthepurposeofascertaining

certaininformationcontainedherein

“ListingComite”hasthemeaningascribedtoitundertheListingRules

“ListingRules”theRulesGoverningtheListingofSecuritiesonthe

StockExchange

DEFINITIONS

“LongStopDate”31December2025orsuchothertimeordateasthe

CompanyandtheSubscribershalagreinwriting

“Mr.Wang”Mr.WangXuguang,anexistingnon-executiveDirector

“Mr.Yu”Mr.YuFa-xiang(俞发祥),theultimatelargestbeneficial

ownerandcontroleroftheSubscriber

“PRC”thePeople’sRepublicofChina(whichforthepurposeof

thiscircular,excludesHongKong,theMacauSpecial

AdministrativeRegionandTaiwan)

“RelevantPeriod”theperiodcomencingon2December2024,beingsix

monthsbefore2June2025(i.e.thedateofthe

Anouncement),uptotheLatestPracticableDate(both

datesinclusive)

“RMB”Renminbi,thelawfulcurencyofthePRC

“SFO”theSecuritiesandFuturesOrdinance(Chapter571ofthe

LawsofHongKong)

“SHSunriverXinghai”ShanghaiSunriverXinghaiTourismDevelopmentCo.,

Ltd.*(上海祥源星海旅游发展有限公司),acompany

establishedunderthelawsofthePRCwithlimited

liability,whichisindirectlyinterestedinthentireshare

capitaloftheSubscriberthroughitswholy-owned

subsidiaryandisownedastoaproximately85.71%by

ShengzhouSunriverPartnershipand14.29%byAnhui

YuanyinxiangPartnership

“ShanghaiSunriverYuancun”ShanghaiSunriverYuancunEconomicDevelopmentCo.,

Ltd.*(上海祥源原村经济发展有限公司),acompany

establishedunderthelawsofthePRCwithlimited

liabilityandoneofthelimitedpartnersofShengzhou

SunriverPartnership

“Share(s)”ordinaryshare(s)ofUS$0.00005eachinthesharecapital

oftheCompany

“Shareholder(s)”holder(s)oftheShare(s)

DEFINITIONS

“ShengzhouSunriver

Partnership”

ShengzhouSunriverEquityInvestmentPartnership

(LimitedPartnership)*(嵊州市祥源股权投资合伙企业(有

限合伙),alimitedpartnershipestablishedunderthelaws

ofthePRCandoneoftheshareholdersofSHSunriver

Xinghai

“ShengzhouYishengPartnership”ShengzhouYishengEnterpriseManagementConsulting

Partnership(LimitedPartnership)*(嵊州艺嵊企业管理咨

询合伙企业(有限合伙),alimitedpartnershipestablished

underthelawsofthePRCandoneofthelimitedpartners

ofShengzhouSunriverPartnership

“SpecificMandate”thespecificmandatetobegrantedtotheDirectorsbythe

IndependentShareholderstoalotandisuethe

SubscriptionSharesatheEGM

“StockExchange”TheStockExchangeofHongKongLimited

“Subscriber”SunriverStaryseaTourism(Cayman)Co.,Ltd.,an

exemptedcompanyincorporatedintheCaymanIslands

withlimitedliability,whichisindirectlywholy

controledbySunriver

“Subscription”thesubscriptionoftheSubscriptionSharespursuanto

theSubscriptionAgrement

“SubscriptionAgrement”thesubscriptionagremententeredintoamongthe

Company,theSunriverandtheSubscriberdated2June

“SubscriptionPrice”HK$0.45perSubscriptionShare

“SubscriptionShares”5,100,000,000newSharestobesubscribedforbythe

SubscriberundertheSubscriptionAgrement

“Sunriver”SunriverHoldingGroupCo.,Ltd.*(祥源控股集团有限责

任公司),acompanyincorporatedinthePRCwithlimited

liability

“SunriverOriginalInformation”ShanghaiSunriverOriginalInformationConsulting

Co.,Ltd.(上海祥源原信息咨询有限公司),acompany

incorporatedinthePRCwithlimitedliabilityanda

shareholderofSunriver,ofwhichMr.Yuwasthesole

shareholderandirectorasatheLatestPracticableDate

DEFINITIONS

“SunriverStaryseaHK”SunriverStaryseaTourism(HongKong)Co.,Limited

(祥源星海旅游(香港)有限公司),acompanyincorporated

underthelawsofHongKongwithlimitedliabilityand

thedirectsoleshareholderoftheSubscriber

“TakeoversCode”theCodeonTakeoversandMergersisuedbythe

SecuritiesandFuturesComisioninHongKongas

amendedfromtimetotime

“US$”UnitedStatesdolars,thelawfulcurencyofUnited

StatesofAmerica

“WhitewashWaiver”awaiverfromtheExecutiveoftherequirementunder

Rule26.1oftheTakeoversCodeinrespectofany

obligationoftheSubscribertomakeageneraloferfor

altheSharesnotalreadyownedoragredtobeacquired

bytheSubscriberuponcompletionoftheSubscription

“%”percentage

*Inthiscircular,theEnglishnamesofthePRCentitiesaretranslationoftheirChinesenames,andareincluded

hereinforidentificationpurposeonly.Intheventofanyinconsistency,theChinesenameshalprevail.

DEFINITIONS

ThexpectedtimetableforimplementationoftheSubscriptionisetoutbelow:

EventTimeandDate

DespatchofcircularwithnoticeandformofproxyoftheEGM.31July2025

Latestimeforlodgingtransferdocumentsand

relevantsharecertificatestobeligibleto

atendandvoteatheEGM.4:30p.m.on

Wednesday,13August2025

Closureofregisterofmembersforthepurpose

ofascertainingtheShareholder’seligibilityto

atendandvoteatheEGM.Thursday,14August2025to

Tuesday,19August2025

(bothdaysinclusive)

Latestimeforlodgingtheformsof

proxyfortheEGM.3:00p.m.on

Sunday,17August2025

RecordatefordeterminingShareholders’eligibility

toatendandvoteatheEGM.Tuesday,19August2025

DateandtimeoftheEGM.3:00p.m.on

Tuesday,19August2025

Publicationofanouncementonresults

oftheEGM.Tuesday,19August2025

Registerofmembersre-opens.Wednesday,20August2025

ThefolowingeventsareconditionalontheresultsoftheEGM

IncreaseinAuthorisedShareCapital

becomingefective.Tuesday,19August2025

EXPECTEDTIMETABLE

Thefolowingeventsareconditionalon(i)theresultsoftheEGM;(i)thefulfilment

oftheconditionsfortheimplementationoftheSubscription;and(i)completionofthe

Subscription

CompletionoftheSubscriptionandisuance

oftheSharesandespatchofcertificates

fortheSharestotheSubscriber.Adatetobefixedafterthefulfilmentof

theconditionsprecedent,whichis

tentativelyexpectedtobenotlaterthan

30September2025

AltimesandatespecifiedinthetimetableaboverefertoHongKongtimesandates.

Thetimetableistentativeonly.Anysubsequentchangetothexpectedtimetablewilbe

anouncedbytheCompanyasandwhenapropriate.

Note:Furtheranouncement(s)wilbemadebytheCompanytoinformtheShareholdersofthetimetableofthe

tradingarangementinrespectoftheSharesasandwhenapropriate

EXPECTEDTIMETABLE

HAICHANGOCEANPARKHOLDINGSLTD.

海昌海洋公园控股有限公司

(IncorporatedintheCaymanIslandswithlimitedliability)

(StockCode:2255)

ExecutiveDirectors:

Mr.QuNaijie(Chairman)

Mr.QuCheng

Mr.LiKehui

Non-executiveDirectors:

Mr.WangXuguang

Mr.GoToutou(FormernameWuTongtong)

Mr.YuanBing

Independentnon-executiveDirectors:

Mr.ZhuYuchen

Mr.WangJun

Ms.ShenHan

Registeredofice:

POBox309

UglandHouse

GrandCayman

KY1-1104

CaymanIslands

HeadoficeinthePRC:

31stFlor,BuildingA

ForeshoreBeach

WorldTradeCentrePhase1

No.4,Lane255,DongyuRoad

PudongNewDistrict

Shanghai,thePRC

Principalplaceofbusines

inHongKong:

Unit804,8thFlor

K11ATELIER

VictoriaDockside

18SalisburyRoad

TsimShaTsui,Kowlon

HongKong

31July2025

TotheShareholders

DearSirorMadam,

(1)SUBSCRIPTIONOFNEWSHARESUNDERSPECIFICMANDATE;

(2)APLICATIONFORWHITEWASHWAIVER;

(3)PROPOSEDINCREASEINAUTHORISEDSHARECAPITAL;AND

(4)NOTICEOFEXTRAORDINARYGENERALMETING

1.INTRODUCTION

ReferenceismadetotheAnouncementinrelationto,amongothers,theSubscription,

theSpecificMandate,theWhitewashWaiverandtheIncreaseinAuthorisedShareCapital.

LETERFROMTHEBOARD

ThepurposeofthiscircularistoprovidetheShareholderswith,amongotherthings,(i)

detailsoftheSubscription,theWhitewashWaiverandtheIncreaseinAuthorisedShare

Capital;(i)therecomendationoftheIndependentBoardComitetotheIndependent

Shareholders;(i)theleterofadvicefromtheIndependentFinancialAdvisertothe

IndependentBoardComiteinrelationtotheSubscriptionandtheWhitewashWaiver;(iv)

anoticeconveningtheEGM;and(v)otherinformationasrequiredundertheListingRulesand

theTakeoversCode.

On2June2025(aftertradinghours),theCompanyenteredintotheSubscription

AgrementwiththeSubscriberandSunriver,pursuantowhichtheSubscriberhas

conditionalyagredtosubscribefor,andtheCompanyhasconditionalyagredtoalotand

isue,5,100,000,000newSharesatheSubscriptionPriceundertheSpecificMandate.

2.THESUBSCRIPTIONAGREMENT

Date

2June2025(aftertradinghours)

Parties

Isuer:TheCompany

Subscriber:SunriverStaryseaTourism(Cayman)Co.,Ltd.

Sunriver:SunriverHoldingGroupCo.,Ltd.*(祥源控股集团有限责任公司)

TheSubscriberanditsultimatebeneficialownerareindependenthirdpartiesnot

conectedwiththeCompanyanditsconectedpersons(asdefinedintheListingRules).

TheSubscriptionShares

TheSubscriberhasconditionalyagredtosubscribeforandtheCompanyhas

conditionalyagredtoalotandisue5,100,000,000newSharesatheSubscriptionPriceof

HK$0.45perSubscriptionSharetotheSubscriber,withanagregateconsiderationof

HK$2,295,000,000payablebytheSubscribertotheCompanyuponCompletion.The

SubscriptionShareshalbealotedandisuedpursuantotheSpecificMandatetobe

obtainedfromtheIndependentShareholdersatheEGM.TheSubscriptionShareswilrank

paripasuinalrespectswiththeSharesinisueasathedateofalotmentandisueofthe

SubscriptionShares.

TheSubscriptionSharesrepresents(i)aproximately62.85%ofthexistingisuedshare

capitaloftheCompanyasathedateoftheSubscriptionAgrement;and(i)38.60%ofthe

isuedsharecapitaloftheCompanyasenlargedbythealotmentandisueoftheSubscription

Shares.TheagregatenominalvalueoftheSubscriptionSharesisUS$255,000.

LETERFROMTHEBOARD

TheSubscriptionPrice

TheSubscriptionPriceofHK$0.45perSubscriptionSharerepresents:

(i)adiscountofaproximately44.44%overtheclosingpriceofHK$0.8100perShare

asquotedontheStockExchangeontheLatestPracticableDate;

(i)adiscountofaproximately46.43%totheclosingpriceofHK$0.8400perShareas

quotedontheStockExchangeon2June2025,beingthedateoftheSubscription

Agrement(the“LastTradingDay”);

(i)adiscountofaproximately45.12%totheaverageclosingpriceofHK$0.8200per

ShareasquotedontheStockExchangeforthelastfive(5)tradingdaysuptoand

includingtheLastTradingDay;

(iv)adiscountofaproximately45.32%totheaverageclosingpriceofHK$0.823per

ShareasquotedontheStockExchangeforthelasten(10)tradingdaysuptoand

includingtheLastTradingDay;

(v)adiscountofaproximately41.23%totheaverageclosingpriceofHK$0.7657per

ShareasquotedontheStockExchangeforthelast30consecutivetradingdays

imediatelypriortothedateoftheSubscriptionAgrement;

(vi)adiscountofaproximately36.26%totheaverageclosingpriceofHK$0.7060per

ShareasquotedontheStockExchangeforthelast60consecutivetradingdays

imediatelypriortothedateoftheSubscriptionAgrement;

(vi)atheoreticaldilutionefect(asdefinedunderRule7.27BoftheListingRules)ofa

discountofaproximately17.9167%,representedbythetheoreticaldilutedpriceof

aproximatelyHK$0.6895perSharetothebenchmarkedpriceofaproximately

HK$0.8400perShare(asdefinedunderRule7.27BoftheListingRules,takinginto

acounthehigherof(i)theclosingpriceoftheSharesasquotedontheStock

ExchangeonthedateoftheSubscriptionAgrementofHK$0.8400perShare;and

(i)theaverageclosingpriceoftheSharesasquotedontheStockExchangeforthe

fiveconsecutivetradingdaysimediatelypriortothedateoftheSubscription

AgrementofHK$0.8220perShare);

(vi)apremiumofaproximately99.95%totheauditedconsolidatednetasetvalueper

ShareatributabletotheShareholdersofaproximatelyHK$0.2251(basedon

thelatestpublishedauditedconsolidatednetasetsatributabletotheShareholders

ofaproximatelyRMB1,722,760,000(equivalentoaproximately

HK$1,826,126,000)asdisclosedintheanualresultsoftheCompanyasat31

December2024and8,114,002,000isuedSharesasathedateoftheSubscription

Agrement).

LETERFROMTHEBOARD

TheSubscriptionPricewasarivedatafterarm’slengthnegotiationsbetwenthe

CompanyandtheSubscriberaftertakingintoacountheprevailingmarketpriceoftheShares

andthefinancialconditionoftheGroup.

PrevailingmarketpriceoftheShares

Duringtheperiodfrom1June2024totheLatestPracticableDate(the“ReviewPeriod”),

thehighestandlowestclosingpricesoftheSharesasquotedontheStockExchangewere

HK$1.01recordedon7October2024andHK$0.40recordedon28November2024

respectively,andtheaverageclosingpriceoftheShareswasaproximatelyHK$0.68.

TheclosingpriceoftheSharesfluctuatedbetwenHK$0.68andHK$0.77sincethestart

oftheReviewPeriodfrom3June2024to23September2024.Afterthat,theclosingpriceof

Sharesincreasedsharply,reachingthepeakatHK$1.01on7October2024.From7October

2024to28November2024,theclosingpriceoftheShareswasonageneraldecreasingtrend,

reachingthelowatHK0.40on28November2024.TheCompanyisoftheviewthathe

aforesaidmovementoftheclosingpriceoftheSharesfromlateSeptember2024tolate

November2024isgeneralyinlinewiththeoveralstockmarketperformanceinHongKong.

Sincethen,theclosingpriceoftheShareshowedageneralincreasingtrendagain,reaching

HK$0.88on17April2025.Duringtheperiodfrom22April2025to2June2025,beingthe

dateoftheSubscriptionAgrement,theclosingpriceoftheSharesfluctuatedbetwen

HK$0.65andHK$0.85.

FinancialconditionoftheGroup

Asetsandliabilities

ThefinancialperformanceoftheGrouphadbenafectedbytheCOVID-19pandemic

andthecomplexexternalmarketenvironmentinrecentyears(includingbutnotlimitedto

positivefactorofthepostpandemicreboundoftheconsumermarketinearly2023ascompared

to2022folowingtheasingofpandemicpreventionandcontrolmeasures;andthenegative

factorsincluding(i)thecontinuedslugishstockandpropertymarketin2024whichafected

consumers’desiretospend;(i)tighterfinancingenvironmentwhichincreasedthedificultyin

financingandcausedsurgingfinancecosts,creatingfinancialpresuretotheGroupinproject

developmentandtransformationandoperationimprovement;and(i)theimpactbroughtby

platformeconomyandtraficmechanisms,includingtheshiftofconsumers’focustosocial

mediaplatformandtheincreaseininfluenceinsocialmediaplatformindrivingsales,forcing

theGrouptocontinuetoinvestinonlinemarketingandprivatedomainondiferentsocial

mediaplatforms(e.g.,buildingupofdiferentoficialchanels,andoperatingandpromoting

oficialminiprogramsorlivestreamroms)toadaptothetrendoftraficfragmentation,

whichincreasedmarketingandmanagementcosts),theGroup’sliquiditypositiondeteriorated,

withadebtdefaultsforRMB50milionprincipalplusRMB13.8milioninterestinNovember

2024.Suchdebthadbenrepaidinfulsubsequently.

LETERFROMTHEBOARD

TheGrouprecordedtotalasetsofaproximatelyRMB10.34bilionasat31December

2024,majorityofwhichrepresentedthemeparksrelatednon-curentasetsoftheGroup’s

principalbusines.TheGrouprecordedtotaliabilitiesofaproximatelyRMB8.52bilionas

at31December2024,majorityofwhichrepresentedinterest-bearingbankandother

borowings.

Asat31December2024,theGrouphadcashandcashequivalents,interest-bearingbank

andotherborowingsandleaseliabilitiesofaproximatelyRMB64.74milion,RMB5.90

bilionandRMB295.35milionrespectively.Asat31December2024,theGroup’scashand

cashequivalents,inparticular,representedasubstantialdecreaseofaproximately96.20%as

comparedtothatasat31December2023andasubstantialdecreaseofaproximately94.80%

ascomparedtothatasat31December2022.SuchdecreaseintheGroup’scashandcash

equivalentswasmainlyatributabletothenetcashflowusedintheinvestingactivitiesfor

developmentofitsprojectsandfinancingactivitiesforepaymentofbankandotherloansof

theGroup.

TheGrouprecordedreceivables(including(i)long-termprepayments,receivablesand

depositsand(i)prepaymentsandothereceivables)andpayables(including(i)tradeandbil

payables,(i)otherpayablesandacrualsand(i)long-termpayables)ofaproximately

RMB1.10bilionandaproximatelyRMB1.81bilionrespectivelyasat31December2024.

TheGrouphadnetdebtoequityratio(beinginterest-bearingbankandotherborowings,

andleaseliabilities,lescashandcashequivalents,dividedbynetasets)ofaproximately

150.32%,182.53%and337.63%respectivelyasat31December2022,31December2023and

31December2024.Thenetdebtoequityratiowasonadeterioratingtrendfrom2022to2024,

especialyfromendof2023toendof2024.Theaforesaidincreaseinetdebtoequityratio

wasmainlyduetothedecreaseincashandcashequivalentsduringFY2024andtheincrease

intheinterest-bearingbankandotherborowingsduringFY2023,indicatingahigherlevelof

leverageandrelianceondebtfinancing.

Profitandlos

DuringFY2023,theGrouprecordedrevenueofaproximatelyRMB1.82bilion,

representingasubstantialincreaseofaproximately129.11%ascomparedtothatforFY2022.

Asdisclosedinthe2023anualreportoftheCompany,suchincreaseinrevenuewasmainly

atributabletotheincreaseinrevenueoftheparkoperationbusinesandoperationasaservice

(“OAS”)businesasaresultofthereboundoftourism&leisuremarket,aswelasthe

openingoftheZhengzhouParkin2023.TheGrouprecordedgrosprofitofaproximately

RMB457.46milionforFY2023,ascomparedtogroslosofaproximatelyRMB278.73

milionrecordedforFY2022.Suchturnaroundfromgroslostogrosprofitwasatributable

tothesubstantialincreaseinrevenuepost-pandemic.

LETERFROMTHEBOARD

TheGrouprecordedlosatributabletownersoftheGroupofaproximately

RMB197.26milionforFY2023,representingasubstantialdecreaseofaproximately85.87%

ascomparedtothatforFY2022.Suchdecreaseinloswasmainlyatributabletotheaforesaid

increaseinrevenuewithagrosprofitfortheyear,theincreaseinotherincomeandgains,the

decreaseinadministrationexpensesandthedecreaseinotherexpenses.

DuringFY2024,theGrouprecordedrevenueofaproximatelyRMB1.82bilion,which

wasmaintainedatasimilarlevelascomparedtothatforFY2023.Despitea16.1%

year-on-yearincreaseinparkentriesto10.79milionvisitors,asignificant13.8%declinein

per-capitaspendingandweaksecondaryconsumptionoftheGroup’scustomersocuredue

totheaforesaidchalengingexternalmarketenvironment.Per-capitaspendingrepresentsthe

totalamountofspendingbythevisitors(includingticketsandsecondaryconsumptionwithin

thethemeparks)dividedbythenumberofvisitors,whilesecondaryconsumptionrepresents

thespendingbythevisitorswithinthethemeparks(suchascatering,souvenirsandspecial

experienceprojects)butexcludingtheticketcosts.TheGrouprecordedgrosprofitof

aproximatelyRMB418.97milionforFY2024,representingadecreaseofaproximately

8.41%ascomparedtothatforFY2023.

Asdisclosedinthe2024anualreportoftheCompany,suchdecreaseingrosprofitwas

atributabletotheincreaseincostasaresultofthenewlyopenedZhengzhouPark

experiencingitsfirstcompleteoperatingyearinFY2024.

TourismandleisureindustryinChinawasafectedinrecentyearsasaresultofthe

COVID-19pandemicandrecoveredfolowingtheasingofepidemicpreventionandcontrol

measuresin2023.Themarketstilfacesuncertaintiesundercomplicatedexternaleconomic

environment.Ontheotherhand,Chinesegovernmentheighteneditsfocusonculturaland

tourismconsumption.TheGroup’srevenueoverthepasthreyearsisfromtwomainsources:

(1)parkoperations;and(2)culturaltourismservicesandsolutions,bothofwhichareinthe

culturalandtourismconsumptionsector.Therefore,despitefacingshort-termliquidity

constraintsandprofitabilitypresures,theGroupmaintainsasteadfaststrategiconfidencein

thefuturedevelopmentprospectsofChina’stourismindustry.Toseizethecurentwindowof

oportunity,facilitatingimediatecapitalinflowthroughtheisuanceofnewsharesto

introduceanewcontrolingshareholderisrequired.

TheDirectors(includingmembersoftheIndependentBoardComite,after

consideringtheadviceoftheIndependentFinancialAdviser)considerthatheSubscription

PriceandtheSubscriptionAgrementarefairandreasonableandareintheinterestsofthe

CompanyandtheShareholdersasawhole.ThefactorsconsideredbytheDirectorsaresetout

below:

PremiumtoNetAsetValue:TheSubscriptionPriceofHK$0.45perSharerepresents

apremiumofaproximately99.95%totheauditedconsolidatednetasetvalueperShare

atributabletoShareholders(HK$0.2251asat31December2024).Thisindicatesthathe

SubscriptionPriceisnearlydoubletheCompany’sbokvalueperShare,whichisapositive

indicatorfromanasetperspective.Asareference,ChinaTravelInternationalInvestment

LETERFROMTHEBOARD

HongKongLimited(stockcode:308)(“ChinaTravel”),acompanylistedonthemainboard

oftheStockExchangewithabusinesmodelcomparabletothatoftheCompany–generating

50%ormoreofitsrevenuefromtheoperationofamusementparksand/orarcade-related

facilitiesinthePRC–hadaprice-to-bokratiofaproximately0.51asatheLatest

PracticableDate.TheCompanyhadaprice-to-bokratiofaproximately3.58asatheLatest

PracticableDate.

ExceptforChinaTravel,theDirectorsidentifiedfourlistedcompanies,namely,SixFlags

Entertainment(NYSE:FUN),CoastEntertainmentHoldingsLtd.(ASX:CEH),UnitedParks&

ResortsInc.(NYSE:PRKS),andSimLeisureGroupLtd.(SP:SLGL),whoserevenuefrom

amusementparksand/orthemepark-relatedfacilityoperationsacountsfor50%ormoreof

theirtotalrevenue.TogetherwithChinaTravel,theabovementionedcompaniescanbe

regardedascomparablecompaniesbasedonthefolowingconsiderations:(i)thesecompanies

arengaginginthesameindustrywithsimilarbusinesmodeloftheCompany;and(i)these

companiesarelistedonotherdevelopedmarketsandthathetradingmultipleswouldbeable

todemonstratethepricingbypublicinvestorsinsuchdevelopedmarketsoncompanies

comparabletotheCompany.Amongthesecomparablecompanies,exceptforUnitedParks&

ResortsInc.(NYSE:PRKS)whoseprice-to-bokratioisnotaplicableasitrecordednet

liabilitiesbasedonthelatestpublishedfinancialreportasatheLatestPracticableDate,the

price-to-bokratiosoftheothersrangefrom0.64to3.02times,withanaverageofabout1.51

times.Theimpliedprice-to-bokratiofthecurentsubscriptionisaproximately1.99times,

whichfalswithintherangeofthecomparablecompanies’price-to-bokratiosandishigher

thanboththeaverageofthecomparablecompaniesandthatofChinaTravel.

MarketPracticeandNegotiation:TheSubscriptionPricewasdeterminedafterarm’s

lengthnegotiationsbetwentheCompanyandtheSubscriber,astrategicnewinvestortothe

Company,withreferencetotheprevailingmarketpriceoftheSharesandtheCompany’s

overalcircumstances.Areviewhasbenconductedofanouncementsisuedsince1January

2025,bycompanieslistedontheStockExchangeregardingtheintroductionofinvestors

throughtheisuanceofnewsharesforcashsubscriptionunderspecificmandates.

Whenselectingcomparabletransactionsforpricingreference,placementstoconected

partiesarexcludedbecausethecomercialcontextandynamicsofsuchtransactionscan

diferfromthoseinvolvingindependenthirdparties.Conectedpartytransactionsmaybe

influencedbyfactorsuniquetotherelationshipbetwentheparties,whichcouldafecthe

comparabilityofpricingoutcomes.Acomontypeofrelationshipbetwenthepartiesiswhen

aninvestoralreadyholdsasignificantproportionofequityinthelistedcompany,orwhenthe

investorholdsanimportantpositionwithinthecompany,whichmayleadtheinvestorto

considerfactorsinevaluatingthetransactionthatwouldiferfromthosewhentheyhadno

priorconectionwiththelistedcompany.

LETERFROMTHEBOARD

Excludingsuchtransactions,therearefivesuchcasesthatmetheabovecriteria:

Stock

CodeCompanyName

Anouncement

DateTransactionType

(Discount)/Premium

toPreviousClosing

Price

1611.HKSinoTechnology

HoldingsLimited

2025/6/29(1)Subscriptionsofnewsharesunder

specificmandate(2)Conected

transactioninrelationtosubscriptionsof

newsharesunderspecificmandate

(3)Proposedincreaseinauthorised

sharesand(4)Proposedamendmentsto

memorandumandarticles

(29.66%)

0673.HKChinaHealthGroup

Limited(“China

HealthGroup”)

2025/5/22(i)Subscriptionsofnewsharesunder

specificmandate;(i)Proposedrights

isueonthebasisofthre(3)rights

sharesforeveryten(10)sharesheldon

therecordate;(i)Conected

transactionandspecialdealinrelationto

theunderwritingagrement;(iv)Special

dealinrelationtotheplacingagent

agrement;(v)Aplicationfor

whitewashwaiver;(vi)Apointmentof

independentfinancialadviser;and(vi)

Resumptionoftrading

(28.60%)

2211.HKUniversalHealth

InternationalGroup

HoldingLimited

2025/5/13Subscriptionofnewsharesunderspecific

mandate

(1.23%)

1870.HKAcmeInternational

HoldingsLimited

2025/3/17(1)Placingofnewsharesundergeneral

mandate(2)Subscriptionofnewshares

underspecificmandate

(19.77%)

0515.HKChinaSilver

Technology

HoldingsLimited

2025/3/7Subscriptionofnewsharesunderspecific

mandate

23.46%

Amongthesefivetransactions,fourwereconductedatadiscountotheclosingpriceon

thetradingdaypriortotheanouncement,acountingfor80%ofthecases.

Giventhenatureofthesetransactions,whicharesimilartothecurentcase–namely,the

isuanceofalargenumberofnewsharesandtheintroductionofnewstrategicinvestors–it

isnotuncomonforsharesubscriptionsofthisnaturetobepricedatadiscountomarket

price.

LETERFROMTHEBOARD

Furthermore,theperformancedisclosedbytheabove-mentionedcompaniesintheirmost

recentresultsanouncementsindicatesthatheyarealunderacertaindegreofinancial

presure,suchasfacingasignificantdeclineinrevenueorasubstantialdropin

profits/continuedlosesandotheradversesituations.Thefinancialperformanceofthe

above-mentionedcompaniesasdisclosedintheirlatestpublishedfinancialstatementsare

sumarisedasfolows:

StockCodeCompanyNameReportingPeriod

Year-over-year

(“YoY”)

Revenue

Change

YoYChangein

Profit/Los

Atributableto

Owners

1611.HKSinoTechnology

HoldingsLimited

Sixmonthsended

31March2025

(Interim)

+427.1%Turnedfromaprofitof

HK$99.8miliontoa

losofHK$12.3

milion

0673.HKChinaHealthGroupYearended31March

2025(Anual)

-35.0%Loswidenedfrom

HK$40.2milionto

HK$67.8milion

2211.HKUniversalHealth

InternationalGroup

HoldingLimited

Sixmonthsended

31December2024

(Interim)

-25.4%Losnarowedfrom

RMB20.9milionto

RMB8.0milion

1870.HKAcmeInternational

HoldingsLimited

Yearended

31December2024

(Anual)

+4.3%Profitdecreasedfrom

HK$20.0milionto

HK$4.4milion

0515.HKChinaSilver

Technology

HoldingsLimited

Twelvemonthsended

31December2024

(SecondInterim)

-84.6%Loswidenedfrom

HK$21.9milionto

HK$51.4milion

Asdisclosedabove,duetotheimpactoftheCOVID-19pandemicandthecomplex

externalmarketenvironmentinrecentyears,theCompany’sbusinesrecoveryhasbenslower

thanexpected,resultingincontinuedoperatinglosesand,consequently,periodicliquidity

presures.Therefore,fromafinancialperspective,theCompanyandthefivecompanies

involvedintheabovecasesarealfacingacertaindegreofpresureandsharesome

similarities.

Amongthecasesmentionedabove,onlyChinaHealthGroupinvolvedawhitewash

transaction,withitsplacementpricerepresentinga28.60%discountothemostrecentrading

day.TheDirectorshavechosentofocusontransactionsinvolvinglistedcompaniesthatwere

undercertainfinancialpresureandisuedasignificantnumberofnewsharespursuanto

specificmandates.Theprimaryobjectiveinthesecaseswastointroducenewinvestorsinorder

toimprovethefinancialandbusinesconditionsofthelistedcompanies.TheDirectorsbelieve

thathesecircumstancescloselymirorthecurentsituationoftheCompany,makingsuch

transactionsthemostrelevantbenchmarksforcomparison.

LETERFROMTHEBOARD

TheDirectorshaveprioritizedtheunderlyingfinancialmotivationandthestructural

featuresofthetransactions–namely,thenedtoraisecapitaltoadresfinancialchalenges

andtheuseofshareisuancestobringinewinvestors.Thisaproachisconsideredmore

pertinenthanfocusingonwhetherawhitewashwaiverwasinvolvedinthetransaction.Inthe

meantime,theDirectorshavenotcategoricalyexcludedtransactionsthatinvolveda

whitewashwaiver.Instead,theyhavetakenapragmaticview,recognizingthathepresenceor

absenceofawhitewashwaiverdoesnotfundamentalyalterthecomparabilityofthe

transactionifthecorecircumstances–financialpresureandthenedforcapitalinjection–

arealignedwiththoseoftheCompany.

CertaintyandTimelinesofCapitalInjection:TheSubscriptionwilprovidethe

CompanywithasignificantandimediatecapitalinflowofaproximatelyHK$2,295milion.

ThiscapitalisintendedtosuportheCompany’songoingoperations,businesdevelopment,

andfinancialflexibility.Thecertaintyandtimelinesofthiscapitalraiseareimportant

considerations,especialyinthecontextoftheCompany’sfinancialpositionanditsplansfor

futuregrowthandbusinesdevelopment.

StrategicandLong-TermBenefits:TheintroductionofanewcontrolingShareholder

withrelevantindustryexperienceandresourcesisexpectedtobringaditionalstrategicvalue

totheCompany.ThisisanticipatedtosuportheCompany’slong-termdevelopmentand

enhanceitscompetitivenes.

Conditionsprecedent

CompletionoftheSubscriptionshalbeconditionaluponsatisfaction(orwaiver)(if

aplicable)ofthefolowingconditions:

(a)theListingComiteoftheStockExchangegrantingthelistingof,andpermision

todealin,theSubscriptionShares(eitherunconditionalyorsubjectoconditions

whichareaceptabletobothparties);

(b)theExecutivegrantingtheWhitewashWaiver,andtheWhitewashWaivernotbeing

revokedorwithdrawn;

(c)theSubscriberandtheCompanyhavingcompletedinternaldecision-making

proceduresandobtainedinternalaprovals(includingbutnotlimitedtoboard

aprovalsandthepasingofthenecesaryresolutionsathedulyconvenedEGMby

(i)theIndependentShareholderstoaprovetheSubscriptionAgrementandthe

transactionscontemplatedthereunderandtheWhitewashWaiver;and(i)the

ShareholderstoaprovetheIncreaseinAuthorisedShareCapital),inacordance

withaplicablelaws,regulations,andinternalrulesfortheSubscription,the

WhitewashWaiverandtheIncreaseinAuthorisedShareCapital;

LETERFROMTHEBOARD

(d)theSubscriberandtheCompanyhavingobtainedalrelevantregulatoryaprovals

fortheSubscription,i.e.,theclearancefromtheExecutiveandtheStockExchange

inrespectoftheshareholders’circulartobedespatchedforthepurposeof,interalia,

theSubscription;

(e)theSubscriberhavingcompletedthenecesaryexternalaprovalproceduresforthe

fundsrequiredfortheSubscriptionandmadearangementsforthedeliveryofthe

SubscriptionSharesinHongKong,includingbutnotlimitedtocompletingthe

necesaryODI(OverseasDirectInvestment)aprovals/filingswiththeComision

ofComerce,theDevelopment&ReformComisionandtheStateAdministration

ofForeignExchange(asaplicable)inthePRC;

(f)theCompanyhavingobtainedconsentfrombanksandothermajorfinancial

institutions,aswelasrelevantgovernmentdepartments,orhavingfulfiled

notificationobligations(ifaplicable)regardingtheSubscription;andtheCompany

havingobtainedwritenwaiversfromrelevantparties(ifaplicable)toensurethat

thenormalconductoftheCompany’sexistingbusineswilnotbeafected,

includingbutnotlimitedtoconsentsandwaiverstobeobtainedfrombanks,

financialinstitutions,andgovernmentauthoritiestopreventabreachofchange-of-

controlprovisionsundercertainloanagrementsandprojectagrements,aswelas

notificationtotheCompany’sbusinespartnersundercertainoperatingcontractsin

respectofthechange-of-control;and

(g)theSubscriberhavingcompletedthefilingoftheconcentrationsofundertakingsof

thePRCundertheSubscriptionAgrementotheStateAdministrationforMarket

Regulation(ifrequired),andtheCompanyhavingconfirmedthatitwilprovide

asistance.

Conditions(a)to(e)and(g)canotbewaivedand(f)canbewaivedbySunriverandthe

Subscriber.Iftheaboveconditionsprecedentarenotsatisfiedorwaived(ifaplicable)onor

beforetheLongStopDateorsuchlaterdateasmaybeagredamongthepartiesinwriting,

theSubscriptionAgrementwilterminateandneitherpartytotheSubscriptionAgrement

mayhaveanyclaimagainsteachothersaveforantecedentbreaches.Therefore,amongother

things,iftheWhitewashWaiverisnotgrantedbytheExecutiveoraprovedbythe

IndependentShareholdersatheEGM,theSubscriptionwilnotproced.

AsatheLatestPracticableDate,condition(d)andtheboardaprovalsrequirement

undercondition(c),andtheconcentrationofundertakingsfilingrequirementundercondition

(g)havebensatisfied,whileconditions(a)and(b),aswelastheIndependentShareholders’

andShareholders’aprovalsundercondition(c),havenotyetbensatisfied.TheODI

aprovals/filingsundercondition(e)arebeingreviewedbytherelevantPRCauthorities.The

SubscriberhasbeninregularcontactwiththerelevantPRCauthoritiestofolowuponthe

aprovalstatus.AsatheLatestPracticableDate,theSubscriberisintheprocesofpreparing

suplementaldocumentsbasedonthefedbackreceivedandwilarangetosubmithemas

sonasposible.Baringanyunforesencircumstances,theSubscriberdoesnotexpectany

impedimentinobtainingtheseODIaprovals/filings.Basedonitscomunicationwiththe

relevantPRCauthorities,itisexpectedthatcondition(e)wilbefulfiledbythendofAugust.

LETERFROMTHEBOARD

In relation to condition (f), the Subscription aims to improve liquidity and pursue high- quality, sustainable development, which will benefit the Company’s future stable operations and performance growth. The interests of banks and government institutions have been fully safeguarded. As at the Latest Practicable Date, the Company had requested and continued to communicate with the relevant parties to obtain all necessary consents and waivers. Currently, the Company is not aware of any legal impediments or other circumstances that would prevent it from obtaining such consents or waiver. Completion Completion shall take place on the third Business Day after satisfaction or waiver (if applicable)ofthelastoftheconditionsprecedentoftheSubscriptionAgreementoratsuchdate and time as agreed by the Company and the Subscriber (the “Completion Date”). At Completion, among other things, (i) the Subscriber shall make full payment of the consideration of HK$2,295,000,000 in immediately available funds by direct transfer to the Company’s designated bank account; and (ii) the Company shall allot and issue the Subscription Shares to the Subscriber. Immediately after Completion, the Subscriber will be interested in 38.60% of the issued sharecapitaloftheCompanyasenlargedbytheallotmentandissueoftheSubscriptionShares, assuming no other change in the share capital of the Company before Completion. 3. INFORMATION ON SUNRIVER AND THE SUBSCRIBER
Sunriver is a company established under the laws of the PRC. Its primary business focuses on investing in and operating multiple companies within the cultural tourism sector. It is the actual controller of Zhejiang Sunriver Culture Tourism Co., Ltd.* 浙江祥源文旅股份有限公司(stock code: 600576.SH) andAnhui Gourgen Traffic Construction Co., Ltd.* 安徽省交通建设股份有限公司 (stock code: 603815.SH).

In relation to condition (f), the Subscription aims to improve liquidity and pursue high- quality, sustainable development, which will benefit the Company’s future stable operations and performance growth. The interests of banks and government institutions have been fully safeguarded. As at the Latest Practicable Date, the Company had requested and continued to communicate with the relevant parties to obtain all necessary consents and waivers. Currently, the Company is not aware of any legal impediments or other circumstances that would prevent it from obtaining such consents or waiver. Completion Completion shall take place on the third Business Day after satisfaction or waiver (if applicable)ofthelastoftheconditionsprecedentoftheSubscriptionAgreementoratsuchdate and time as agreed by the Company and the Subscriber (the “Completion Date”). At Completion, among other things, (i) the Subscriber shall make full payment of the consideration of HK$2,295,000,000 in immediately available funds by direct transfer to the Company’s designated bank account; and (ii) the Company shall allot and issue the Subscription Shares to the Subscriber. Immediately after Completion, the Subscriber will be interested in 38.60% of the issued sharecapitaloftheCompanyasenlargedbytheallotmentandissueoftheSubscriptionShares, assuming no other change in the share capital of the Company before Completion. 3. INFORMATION ON SUNRIVER AND THE SUBSCRIBER

Sunriver is a company established under the laws of the PRC. Its primary business focuses on investing in and operating multiple companies within the cultural tourism sector. It is the actual controller of Zhejiang Sunriver Culture Tourism Co., Ltd.* 浙江祥源文旅股份有限公司(stock code: 600576.SH) andAnhui Gourgen Traffic Construction Co., Ltd.* 安徽省交通建设股份有限公司 (stock code: 603815.SH).

Huang Hua (cid:28267)(cid:14818)	Gan Yong (cid:11802)(cid:8815)

Shen Tong-yan (cid:15408)(cid:9140)(cid:12045)	Yu Fang-sheng (cid:7937)(cid:13665)(cid:17607)

–

有

交

ThefolowingdiagramsetsforththeshareholdingstructureofSunriverasatheLatest

PracticableDate:

Yu Shui-xiang

(cid:8070)(cid:15324)(cid:18701)

Yu Hong-hua

(cid:8070)(cid:19629)(cid:21399)

Hu Xian-kuan

(cid:20617)(cid:8432)(cid:11156)

Chang Yu

(cid:11744)(cid:11055)

Mr. Yu

71.2%6.4%5.4%4%4%3.2%0.8%0.8%0.2%

100%

Sunriver Original InformationAnhui Sunriver EMC

60.75%4.5%3.75%3%3%

Sunriver

25%

Lai Zhi-lin

(cid:23708)(cid:12159)(cid:14143)

Shen Bao-shan

(cid:15408)(cid:8069)(cid:11289)

Yu Shui-xiang

(cid:8070)(cid:15324)(cid:18701)

Mr. Yu

Ouyang Ming

(cid:15096)(cid:26149)(cid:13750)

Mr. Yu

LETERFROMTHEBOARD

Limited 49.9	Partner 996%

Limited 49.99	Partner 96%

General 0.00	Partner 08%

10	0%

5.7	1%

4.2	9%

10	0%

10	0%

AsatheLatestPracticableDate,Sunriverisownedastoaproximately(i)60.75%by

SunriverOriginalInformation,(i)25.00%byAnhuiXiangyuEnterpriseManagement

ConsultingCo.,Ltd.*(安徽祥誉企业管理咨询有限公司)(“AnhuiSunriverEMC”),(i)

4.50%byMr.Yu,(iv)3.75%byMr.YuShui-xiang(俞水祥)(brotherofMr.Yu),(v)3.00%by

Mr.ShenBao-shan(沈保山),and(vi)3.00%byMr.LaiZhi-lin(赖志林).SunriverOriginal

InformationiswholyownedbyMr.Yu.AnhuiSunriverEMCisinturnownedasto

aproximately(i)71.2%byMr.YuShui-xiang(俞水祥),(i)6.4%byHuangHua(黄桦),(i)

5.4%byGanYong(干勇),(iv)4.0%byeachofMs.YuHong-hua(俞红华),OuyangMing(欧

阳明)andHuXian-kuan(胡先宽),(v)3.2%byShenTong-yan(沈同彦),(vi)0.8%byeachof

YuFang-sheng(余方生)andChangYu(常宇),and(vi)0.2%byMr.Yu.Sunriveristherefore

ultimatelycontroledasto65.3%byMr.Yu.

AsatheLatestPracticableDate,theboardofdirectorsofSunrivercomprisedMr.Yu,

Mr.LaiZhi-lin(赖志林),Ms.YuHong-hua(俞红华)andMr.GanYong(干勇).

ThefolowingdiagramsetsforththeshareholdingstructureoftheSubscriberasathe

LatestPracticableDate:

Shanghai Sunriver Yuancun

SH Sunriver Xinghai

Sunriver Starysea HK

Shengzhou Sunriver Partnership

Shengzhou Yisheng Partnership

8%1%

Sunriver

Anhui Yuanyinxiang Partnership

100%

The Subscriber

The Company

Onshore

Ofshore

100%

LETERFROMTHEBOARD

TheSubscriberisacompanyincorporatedunderthelawsofCaymanIslandswithlimited

liability,whichisindirectlywholycontroledbySunriver.Itisaspecialpurposevehicle

incorporatedforthepurposeofsubscribingfortheSubscriptionSharesandasumesthe

relevantobligationsundertheSubscriptionAgrement.

TheSubscriberiswholy-ownedbySunriverStaryseaTourism(HongKong)Co.,

Limited,whichisinturnwholyownedbySHSunriverXinghai.SHSunriverXinghais

ownedastoaproximately85.71%byShengzhouSunriverPartnershipand14.29%byAnhui

YuanyinxiangPartnership.ShengzhouSunriverPartnershipandAnhuiYuanyinxiang

PartnershipwilcontributeaproximatelyRMB1.2bilionandRMB0.2bilion,respectively,

towardsthesharecapitalofSHSunriverXinghai.

ShengzhouSunriverPartnershipisalimitedpartnershipestablishedinthePRC.Sunriver

isthegeneralpartner,andShanghaiSunriverYuancunandShengzhouYishengPartnershipare

thelimitedpartnersofShengzhouSunriverPartnership.EachofShanghaiSunriverYuancun

andShengzhouYishengPartnershipwilprovidecapitalcontributionofRMB0.6biliontothe

partnership.ShanghaiSunriverYuancunisanindirectwholy-ownedsubsidiaryofSunriver.

ThefolowingdiagramsetsforththeshareholdingstructureofShanghaiSunriver

YuancunasatheLatestPracticableDate:

95%

Sunriver

HefeiKunyou

Anhui Xianghuiyuan

Shanghai SunriverYuancun

95%

100%

LETERFROMTHEBOARD

100%

10	0%

10	0%

10	0%

10	0%

99.99%, L	imited Partner

0.01%, Gen	eral Partner

ShanghaiSunriverYuancunisownedastoaproximately95%bySunriverand5%by

AnhuiXianghuiyuan.AnhuiXianghuiyuanisinturnownedastoaproximately95%by

Sunriverand5%byHefeiKunyou,whichisinturnwholy-ownedbySunriver.Acordingly,

ShanghaiSunriverYuancunisindirectlywholyownedbySunriver.

ThefolowingdiagramsetsforththeshareholdingstructureofShengzhouYisheng

PartnershipasatheLatestPracticableDate:

100%

90% 10%

Shengzhou Municipal Finance Bureau*

(cid:11506)(cid:11654)(cid:11690)(cid:23625)(cid:13543)(cid:11240)(cid:11506)(cid:11654)(cid:11690)(cid:7778)(cid:15289)(cid:13543)(cid:11844)(cid:9907)(cid:14001)(cid:23663)(cid:17610)

(cid:18059)(cid:18187)(cid:19273)(cid:17326)(cid:24398)(cid:8468)(cid:11084)

Shengzhou Industrial Development Co., Ltd.*

(cid:11506)(cid:11654)(cid:11690)(cid:17610)(cid:14613)(cid:17956)(cid:11261)(cid:14001)(cid:26104)(cid:8468)(cid:9120)(cid:289)

Shengzhou Cultural and Tourism

Development Group Co., Ltd.*

(cid:11506)(cid:11654)(cid:11690)(cid:13615)(cid:13677)(cid:17956)(cid:11261)(cid:26222)(cid:9920)(cid:14001)(cid:26104)(cid:8468)(cid:9120)(cid:289)

Shengzhou Shanshui Yueju Tourism

Development Co., Ltd.*

(cid:11506)(cid:11654)(cid:11690)(cid:11289)(cid:15324)(cid:13615)(cid:8894)(cid:13677)(cid:24562)(cid:14001)(cid:26104)(cid:8468)(cid:9120)(cid:289)

Shengzhou State-Owned Asets

Management Co., Ltd.*

(cid:11506)(cid:11654)(cid:11690)(cid:9907)(cid:14001)(cid:23663)(cid:17610)(cid:19771)(cid:16775)(cid:19273)(cid:17326)(cid:14001)(cid:26104)(cid:8468)(cid:9120)(cid:289)

Shengzhou Wenyue Trading Co., Ltd.*

(cid:11506)(cid:11654)(cid:11690)(cid:13615)(cid:23858)(cid:9454)(cid:23655)(cid:14001)(cid:26104)(cid:8468)(cid:9120)(cid:289)

Shengzhou Shunwen Industrial Development

Management Co., Ltd.*

(cid:11506)(cid:11654)(cid:11690)(cid:20932)(cid:13615)(cid:17610)(cid:14613)(cid:17956)(cid:11261)(cid:19273)(cid:17326)(cid:14001)(cid:26104)(cid:8468)(cid:9120)(cid:289)

Shengzhou Yisheng Partnership

Basedonthepublicinformationavailable,ShengzhouYishengPartnershipisalimited

partnershipwhichisultimatelywholy-ownedbytheShengzhouMunicipalFinanceBureau(嵊

州市财政局).Sunriverasthegeneralpartnerisresponsibleforthedailymanagementand

operationsofShengzhouSunriverPartnership,includingbutnotlimitedtodecisionsrelating

toinvestment,useofprocedsandexpensesandailyoperations.

LETERFROMTHEBOARD

10	0%

0.01%, General Partner

99.99%, Limited Partner

ThefolowingdiagramsetsforththeshareholdingstructureofAnhuiYuanyinxiang

PartnershipasatheLatestPracticableDate:

0.01%, General Partner99.99%, Limited Partner

Sunriver

Hefei KunyouSunriver

Anhui Yuanyinxiang Partnership

100%

AnhuiYuanyinxiangPartnershipisalimitedpartnershipestablishedinthePRC.Hefei

Kunyou,adirectwholy-ownedsubsidiaryofSunriver,isthegeneralpartner,andSunriveris

thelimitedpartnerofAnhuiYuanyinxiangPartnership.Itisownedastoaproximately99.99%

bySunriverand0.01%byHefeiKunyou.

AsatheLatestPracticableDate,theultimatelargestbeneficialownerandcontrolerof

theSubscriberisMr.Yu.

SourceofundsfortheSubscription

SunriverwilfunditsportionofcapitalcontributionsofShengzhouSunriverPartnership

andAnhuiYuanyinxiangPartnershipthroughitsinternalfunds.Inaditiontothecapital

contributionsofaproximatelyRMB1.2bilionfromShengzhouSunriverPartnershipand

RMB0.2bilionfromAnhuiYuanyinxiangPartnershipwhichwilcontributetowardsthetotal

considerationfortheSubscription,theremainingRMB0.8bilionofthetotalconsiderationfor

theSubscriptionwilbefinancedthroughborowingfromfinancialinstitutionsbythe

Subscriberoritsdirectorindirectcontrolingshareholders.

AsatheLatestPracticableDate,Sunriverisnegotiatingtheborowingtermswith

severalbanks,oneofwhichasisuedaleterofintentinrelationtotheprovisionofRMB0.8

bilionloan.Therelevantbankisundergoingitsinternalprocedures,whichincludereviewing

thenecesarydocuments.Baringanyunforesencircumstances,therelevantbank’sinternal

proceduresarexpectedtobecompletedbythendofAugust.

LETERFROMTHEBOARD

4.INFORMATIONONTHEGROUP

TheGroupisprincipalyengagedin(i)thedevelopment,constructionandoperationof

themeparks,managementoftheGroup’sdevelopedandoperatingpropertiesuroundingthe

themeparksforentalincome,hoteloperationandtheprovisionofservicestovisitors;(i)the

deliveryofentireprocesofplaning,designing,construction,animalconservation,and

operationandmanagementoexternaltourismandleisureprojects,and(i)theintegrationof

world-clasintelectualproperties(IP)intothemeparks,scenicspots,lifestylehotels,

comercialbuildingsandotheron-groundconsumption,inthePRC.

5.REASONSFORANDBENEFITSOFTHESUBSCRIPTIONANDUSEOF

PROCEDS

ReasonsforandBenefitsoftheSubscription

DuetothecontinuedimpactoftheCOVID-19pandemicandthecomplexexternalmarket

environmentinrecentyears,theCompany’sbusinesrecoveryhaslagedbehindexpectations,

resultinginsustainedoperatinglosesandphasedliquiditypresure.AsChinaplaces

“vigoroustimulationofconsumption”athetopofitsagendandrolsoutaseriesof

consumption-stimulatingpolicies,thesepoliciesnotonlyhelprestoreconsumerconfidence

andspendingpower,butalsoinvigoratetourismconsumption,furtherunderscoretheimportant

roleofcultural-tourismconsumptionindrivinghigh-qualityeconomicdevelopment,and

provideasolidpolicyfoundationandvastmarketspaceforthefuturegrowthofthe

cultural-tourismindustry.Againsthispolicyandindustrybackdrop,theCompanyhasactively

evaluatedandpromotedvariousfinancingtolsandcapitalstructureoptimisationplansto

improveitsaset-liabilitystructureandsuportlong-termbusinesdevelopment.Despite

makingin-depthatemptsinthefolowingareas,thesefortshavenotbensucesfuly

implementeduetobjectiveconditions:

(a)Syndicatedloanrestructuringnegotiations:Throughout2024,theCompany

engagedinmultipleroundsofcomunicationandrestructuringnegotiationswith

thememberbanksoftheoriginalShanghaiprojectsyndicateregardingexistingloan

arangements.However,duetotheCompany’shighoveraldebtratio,thesyndicate

remainedcautiousaboutheloanriskexposurepost-restructuringfornon-state-

ownedenterprises;

(b)ExplorationofpublicREITsisuance:TheCompanyalsoexploredthefeasibilityof

isuinginfrastructureREITsforcertainmatureculturalandtourismasets,aiming

torevitalisequalityasetsandbroadenfinancingchanels.Duringthevaluation

proces,itwasfoundthatherelevantsuportingpoliciesarestilbeingrefined,and

theculturalandtourismprojectshavenotyetestablishedamarket-recognised

valuationsystemintermsofasetpricing,leasestability,andcashflow

predictability.TheCompanyconcludedthathecurentconditionsarenotmature

enoughandultimatelydecidednotoprocedwiththepublicisuance;

LETERFROMTHEBOARD

(c)Equitytransfer:TheCompany’scontrolingshareholderengagedinpreliminary

negotiationstotransfercontrolingrightstoawel-knowndomesticulturaland

tourismgroup,intendingtoleverageitsbrand,capital,andresourceadvantagesto

enhancetheCompany’soveralcompetitivenes.However,afteranin-depth

asesmentoftheCompany’soperatingconditionsandcapitalneds,thepotential

investordeterminedthatmerelytransferingequitywouldnotprovidesubstantial

incrementalcapitalsuportandwouldnotfundamentalyresolvetheCompany’s

curentcapitaldificulties;

(d)Introductionofstrategicinvestorsthroughconvertiblebonds:TheCompanyalso

discusedstructuralfinancingplansforisuingconvertiblebondswithsome

potentialinvestors,aimingtointroducemedium-tolong-termstrategic

shareholders.However,aftermultipleroundsofevaluationandnegotiations,the

relevantpartiesconcludedthathescaleoftheconvertiblebondswouldnotsuport

theCompany’sustainabledevelopmentforthenextfewyears;and

(e)Rightsisue/openofer:Arightsisueoropenofer,bothofwhichrequirexisting

shareholderstoinjectaditionalcapital,maynotbesucesfulifshareholdersare

unwilingorunabletosubscribefornewShares.TheCompanyrecognizedthat,

givenitshighoveraldebtratioandrecentfinancialperformance,therewasa

significantriskthatarightsisueoropenoferwouldnotbefulysubscribed,

potentialyleavingtheCompanywithinsuficientnewcapitalandaweakenedshare

price.

TheSubscription,ifproceded,wilintroduceanewcontrolingShareholder,whichwil

efectivelyprovidetheCompanywithaditionalstrategicdevelopmentresources,aswelas

helpreplenishtheCompany’sworkingcapital,reducefinancialcostsandsuportheCompany

incontinuingtoadvancetheupgradingandtransformationofitsexistingprojectsand

enhancingparkoperatingeficiencies.TheCompanywilutilisethisfinancingoportunityto,

whilefocusingonthedevelopmentofitscorethemeparkbusines,furtherstrengthenthe

expansionofitscultural-tourismoperationasaservice(OAS)andIPoperationsbusines,

therebybuildinganewengineforfuturegrowthandestablishinganinternational

comprehensivetourismandleisuregroupwithoceanicultureasitscore.Theprocedsfrom

theSubscriptionwilalsoprovidetheCompanywithmuch-nededliquiditytosuportdaily

operations,replenishworkingcapital,promotethedevelopmentofitscorebusines,andrepay

partofitsexistingdebts.Thisimediatecapitalinjectioniscriticalforstabilizingthe

Company’sfinancialpositionandsuportingitsongoingbusinesdevelopment.

Duetosustainedoperatinglosesandliquiditypresure,theCompanyrequiresfurther

stabilizationofinancialposition.AlthoughtheCompanymaintainedstablerevenuelevelsin

FY2024,itsnetlosincreasedbyaproximately312.04%fromaproximatelyRMB181.9

milioninFY2023toaproximatelyRMB749.5milioninFY2024.TheCompany’snet

debt-to-equityratioalsosharplyincreasedfromaproximately182.53%asof31December

2023,toaproximately337.63%asof31December2024.

LETERFROMTHEBOARD

TheCompanyhasmadeatemptstoimproveitsfinancialpositionthroughmeasuresuch

asyndicateloanrestructuringnegotiations,explorationofpublicREITsisuance,equity

transfers,introductionofstrategicinvestorsthroughconvertiblebonds,rightsisues/public

oferings,etc.However,duetobjectivexternalconstraints,thesefortshavenotben

sucesfulyimplementedpriortotheSubscription.IntroducingtheSubscriberasthe

Company’snewcontrolingshareholderiscrucial,asthecertaintyandtimelinesofthe

fundraisingwilsuportheCompany’scontinuedoperations,businesdevelopment,and

financialflexibility,providingurgentlynededliquidityfortheCompany.

UseofProceds

ThegrosprocedsandnetprocedsfromtheSubscriptionarexpectedtobe

aproximatelyHK$2,295milionandHK$2,284milionrespectively.TheCompanyintendsto

aplythenetprocedsfromtheSubscriptionasfolows:

(i)20%wilbeusedtosuporthedailyoperationsoftheGroupandreplenishworking

capital;

(i)40%wilbeusedtopromotethedevelopmentoftheCompany’scorebusines

(includingthemeparkoperations,OASandIP),withsuchinitiativesexpectedto

becompletedwithin1to2years;and

(i)40%wilbeusedtorepaypartoftheGroup’sexistingdebts,ofwhich30%wilbe

apliedtowardrepaymentofprincipalandinterestobanksandfinancial

institutions,and10%wilbeusedtosetlepayablestosupliersandproject-related

debts.NoneofthesexistingdebtstoberepaidareowedtotheShareholders.This

repaymentisexpectedtobecompletedwithin1to2years.

TheCompany’sbusinesplanforthedevelopmentofitscorebusinesisumarizedas

folows:

ThemeParkOperations:

TheCompanyintendstocontinuethedevelopmentofPhaseIoftheZhengzhouproject,

whichisexpectedtocomenceoperationsin2026,aswelastheupgradeandrenovationof

otherprojectsundertheGroup.Theseupgradeswilincludetheintroductionofvariousleading

domesticandinternationalIPsintoimersivein-parkentertainment,therenovationoftheme

hotels,upgradestofodandbeverageandretailfacilitiesbothinsideandoutsidetheparks,

enhancementstosuportingservicefacilities,theintroductionoflargesignatureridesand

atractions,andthedevelopmentofsmartparksystems.

LETERFROMTHEBOARD

OAS:

Underthisbusinesmodel,theCompany’sbusinespartnersareresponsibleformajor

capitalexpenditures,suchaslandacquisitionandpropertydevelopment,whiletheCompany

isresponsibleforoperationsandmanagement.Toensuretheatractivenesofitsprojectsand

maintainlong-termcoperativerelationshipswithpartners,theCompanynedstoinvestin

pre-openingpreparationsandoperations.ThePhaseIprojectinShanghaihascompletedits

mainstructuralcapingandischeduledtopenin2026.TheBeijingprojecthascomenced

constructionandischeduledtopenin2027.Fuzhou,Nanjing,Ningbo,SaudiArabiand

otherprojectsarealsoundercontinuousplaningandreservexpansion.

IPOperation:

Inaditiontoitself-operatedparks,theCompanyhasucesfulyintroducedUltraman

IP-themedpavilionstothird-partydestinations,suchastheDalianForestZo,andhasalready

launchedIP-themedstoresinshopingmals.TheCompanyplanstoselecthigh-quality

comercialpropertiesandsceniclocationsnationwidetorapidlydeploycorespondingIP

products.TheseproductformatsincludeIPhotels,IP-themedpavilionsandstores.Thegoalis

tocontinuouslyexpandbrandinfluenceandscaleuptheIPbusines.

UponCompletion,thenetprocedsfromtheSubscriptionwilberecognisedascashand

cashequivalents.Thus,theGroup’sworkingcapitalandliquiditypositionswilbeimproved

asthecashandcashequivalentswilbeincreasedbythenetprocedsfromtheSubscription

ofaproximatelyHK$2,295milion.

TheGrouphadnetdebtoequityratiofaproximately337.63%asat31December

2024.AsaresultoftheSubscription,asumingtheSubscriptionhadbencompletedon31

December2024,theGroup’snetasetswouldincreasebytheamountofnetprocedsofthe

Subscription,andhencethenetdebtoequityratiowouldecreasetoaproximately100.56%.

Takingintoacountheaboveconsiderations,theDirectors(includingmembersofthe

IndependentBoardComite,afterconsideringtheadviceoftheIndependentFinancial

Adviser)considerthathetermsoftheSubscriptionAgrementarefairandreasonableandthe

SubscriptionisintheinterestsoftheCompanyandtheShareholdersasawhole.

6.FUNDRAISINGACTIVITIESINTHEPASTWELVEMONTHS

TheCompanyhadnotconductedanyequityfundraisingactivityinthepastwelve

monthsimediatelybeforetheLatestPracticableDate.

AfterCompletion,theCompanyisexpectedtohavesuficientfundstometitsfinancial

nedsforthenextwelvemonthsandcurentlyhasnoplansforaditionalequityfinancing.

ThesecondphaseofconstructionatZhengzhouHaichangOceanParkisanticipatedtoresult

inewbankloans,whicharecurentlybeingarangedwiththebank.

LETERFROMTHEBOARD

7.EFECTONTHESHAREHOLDINGSTRUCTUREOFTHECOMPANY

AsatheLatestPracticableDate,theCompanyhad8,114,002,000Sharesinisue.The

folowingtablesumarisestheshareholdingstructureoftheCompanyasatheLatest

PracticableDateandimediatelyuponalotmentandisueoftheSubscriptionShares

(asumingthathereisnotherchangeinthesharecapitaloftheCompanypriorto

Completion):

AsatheLatest

PracticableDate

Imediatelyupon

alotmentandisueofthe

SubscriptionShares

Numberof

Aproximate

Numberof

Aproximate

TheSubscriber–5,100,000,00038.60

Directors

Mr.QuCheng24,332,5920.3024,332,5920.18

Mr.WangXuguang20,780,0000.2520,780,0000.16

SubstantialShareholders

ZeqiaoHoldingsLimited

(formerlyknownasHaichang

GroupLimited)(Note1)3,837,231,04847.293,837,231,04829.04

MountainTaiApolo

InvestmentLimited(Note2)786,768,0009.70–

ORIXAsiaCapitalLimited

(Note2)400,000,0004.93–

PublicShareholders

MountainTaiApolo

InvestmentLimited(Note2)–786,768,0005.95

ORIXAsiaCapitalLimited

(Note2)–400,000,0003.03

OtherpublicShareholders3,044,890,36037.533,044,890,36023.04

Total8,114,002,000100.0013,214,002,000100.00

Notes:

1.ZeqiaoHoldingsLimitediswholyownedbyZeqiaoInternational(BVI)Limited,whichisinturn

wholyownedbyCantrust(FarEast)Limited,thetrusteofGenerationQuTrust,whichisa

discretionarytrustsetupbyMr.QuChengasetlorforthebenefitofhimselfandhisfamily.

2.MountainTaiApoloInvestmentLimitedholds786,768,000Shares.MountainTaiApoloInvestment

LimitediswholyownedbyORIX(China)InvestmentCompanyLimited,whichisinturnwholy

ownedbyORIXCorporation.ORIXAsiaCapitalLimitedholds400,000,000Sharesandiswholy

ownedbyORIXCorporation.Acordingly,ORIXCorporationisdemedtobeinterestedinthe

786,768,000SharesheldbyMountainTaiApoloInvestmentLimitedandthe400,000,000Sharesheld

byORIXAsiaCapitalLimited.

LETERFROMTHEBOARD

Saveasdisclosedabove,theCompanyhasnotheroutstandingsecurities,optionsor

warantsinisuewhichconferanyrightosubscribefor,convertorexchangeintoSharesas

atheLatestPracticableDate.

8.APLICATIONFORWHITEWASHWAIVER

HuataisthesolefinancialadvisertotheSubscriberinrespectoftheSubscription.

Acordingly,Huataiandpersonscontroling,controledbyorunderthesamecontrolasHuatai

arepresumedtobeactinginconcertwiththeSubscriberinacordancewithclas(5)ofthe

definitionof“actinginconcert”undertheTakeoversCode.

AsatheLatestPracticableDate,neithertheSubscribernoranypartyactinginconcert

withitowns,controlsordirectsanySharesorconvertiblesecurities,warantsoroptions(or

outstandingderivatives)inrespectofShares.

AsumingthereisnotherchangeinthesharecapitaloftheCompanyfromtheLatest

PracticableDateuptoandincludingthedateofCompletion,theSubscriberwilhold

5,100,000,000SharesuponCompletion,representing38.60%oftheisuedsharecapitalofthe

CompanyasenlargedbythealotmentandisueoftheSubscriptionShares.UnderRule26.1

oftheTakeoversCode,theSubscriberwouldbeobligedtomakeamandatorygeneraloferto

theShareholdersforaltheisuedSharesandothersecuritiesoftheCompanynotalready

ownedoragredtobeacquiredbyitorpartiesactinginconcertwithitunlestheWhitewash

WaiverisobtainedfromtheExecutive.Inthisregard,anaplicationhasbenmadebythe

SubscribertotheExecutiveforthegrantingoftheWhitewashWaiverpursuantoNote1on

DispensationsfromRule26oftheTakeoversCodeinrespectofthealotmentandisueofthe

SubscriptionShares.

TheWhitewashWaiver,ifgrantedbytheExecutive,wilbesubjecto,amongother

things,(i)theaprovalbyatleast75%ofthevotescastbytheIndependentShareholderseither

inpersonorbyproxyinrespectoftheWhitewashWaiveratheEGM;and(i)theaproval

bymorethan50%ofthevotescastbytheIndependentShareholdersinrespectofthe

Subscription(includingtheSpecificMandate)thatarecasteitherinpersonorbyproxyathe

EGM.AsobtainingtheWhitewashWaiverisoneoftheconditionsprecedentothe

SubscriptionAgrementandsuchconditionisnotwaivable,theSubscriptionwilnotproced

iftheWhitewashWaiverisnotgrantedbytheExecutive,orisnotaprovedbytheIndependent

Shareholders.

AsathedateoftheLatestPracticableDate,theCompanydidnotbelievethathe

Subscription,theSpecificMandateandtheWhitewashWaiverandtherespectivetransactions

contemplatedthereunderwouldgiverisetoanyconcernsinrelationtocompliancewithother

aplicablerulesoregulations(includingtheListingRules).TheCompanynotesthathe

ExecutivemaynotgrantheWhitewashWaiveriftheSubscription,theSpecificMandateorthe

WhitewashWaiverdoesnotcomplywithotheraplicablerulesandregulations.Shouldany

concernsberaisedregardingtheSubscription,theSpecificMandate,ortheWhitewashWaiver

notbeingincompliancewithotheraplicablerulesandregulations,theCompanywil

endeavortoadresandresolvesuchisues.

LETERFROMTHEBOARD

9.FUTUREINTENTIONSOFTHESUBSCRIBEREGARDINGTHEGROUPAND

REASONSFORTHESUBSCRIBER’SUBSCRIPTION

AsatheLatestPracticableDate,theCompany(i)hadnointention,arangement,

agrement,understandingornegotiation(concludedorotherwise)todownsizeordisposeof

thexistingbusines;and(i)didnotexpectoenterintoanyotherarangementortransaction

withtheSubscriberandoritsasociateapartfromtheSubscription.UponCompletion,the

Subscriberwilbecomeacontrolingshareholder(asdefinedundertheListingRules)ofthe

Company.TheSubscriberintendstocontinuethexistingprincipalbusinesesoftheGroup.

Saveforthepersonelchangesdisclosedinthesectionheaded“ProposedChangeinBoard

Composition”below,theSubscriberhasnointentiontointroduceanymajorchangestothe

existingoperationandbusinesoftheCompany,includingto(i)discontinuethemployment

ofanyemployesoftheGroupotherthanintheordinarycourseofbusines;or(i)redeploy

thefixedasetsoftheCompanyotherthanthoseinitsordinaryandusualcourseofbusines.

Intermsofthelong-termcomercialjustificationfortheSubscription,theSubscribershares

theviewoftheDirectorsasdisclosedintheparagrapheaded“Reasonsforandbenefitsofthe

Subscriptionanduseofproceds”above,andwishestoemphasisethefolowingaditional

considerations:

TheCompanyposesesireplaceableuniqueadvantagesintheindustry

TheCompanyownsandoperatesevenculturaltourismprojectsthemedaroundmarine

cultureinmajorcentralandtouristcitiesacrosChina.Itisalsoplaningtolaunchanew

large-scalemarinethemeparkinBeijing,givingitsasetportfolioadistinctivenationwide

presence.TheCompanyistheworld’sfirsthemeparkoperatortobringtheinternationalIP

“Ultraman”tolifeinareal-worldentertainmentseting,demonstratingoutstandingproduct

inovationcapabilities.Aditionaly,oportunitiesforthetransferorsaleofcontrolingstakes

inlargethemeparkgroupsarerareinthemarket.

Curentmarketcapitalizationisatalowpoint,withighcertaintyofinvestmentreturns

Duetopreviousdebtburdensandtheimpactofthepandemic,theCompany’smarket

capitalizationhaslongbenatahistoricalow.However,theSubscriberhastrongconfidence

initsasetquality–especialyincoreparksuchasShanghai,anditscashflowisrecovering

rapidly,indicatingstrongpotentialforswiftprofitabilityrestoration.

ToilustratethehighqualityofthecoreparksoftheCompany,theShanghaiparkofthe

CompanyislocatedinShanghaiLingangandformsanindustrialclusterwithsurounding

culturaltourismdevelopments.Asararelarge-scalemarine-themedparkintheYangtzeRiver

Deltaregion,itcoversChina’smosteconomicalydynamicurbanclustersandhigh-spending

customergroups,enjoyingfirst-moveradvantagesandstrongrowthpotential.Aditionaly,

servingastheGroup’sflagshiprojectwithanoceanculturetheme,itfeaturesixthemed

pavilions–includingtheVolcanoSharkPavilionandArcticIcebergPavilion–threanimal

performancevenuesuchastheOrcaTheater,twothemedhotels,andmorethantenlargeand

medium-sizedamusementfacilities,oferingarichandiversifiedproductmix.Furthermore,

LETERFROMTHEBOARD

asaleaderinmarinewildlifeconservation,thecoreteamboastsnearly20yearsofexperience

inmarineparkoperationsandmarinelifepreservation.Moreover,since2022,globaly

renownedIPslikeUltramanandOnePiecehavebenintroducedtoexpandofline

entertainmentoferings,withnewUltraman-themedentertainmentzones(includingexhibition

areas,theaters,themedrestaurants,shops,amusementcenters,andanelectronicmusicplaza),

themedhotels,andOnePiece-themedstoresalreadyopened,morerenownedIPsareplaned

forfutureintegrationtofurtherenhancevisitorapeal.Theparkalsocaterstovariouscustomer

groupsincludingfamilies,couples,andchildren,theparkcombinesmarine-themed

exploration,amusementfacilities,imersiveIPexperiences,themedshowsandanimal

interactions,aswelasdining,retail,andleisurentertainment,creatinganal-day,ful-cycle

recreationalexperience.

TheSubscriptionPricecariesacertainpremiumovertheCompany’snetasets,

reflectingtheSubscriber’srecognitionoftheCompany’sintrinsicvalue.Nevertheles,the

overalinvestmentcost(i.e.theagregateconsiderationofHK$2,295,000,000payablebythe

SubscribertotheCompanyuponCompletion)ismorecost-efectivecomparedtobuilding

culturaltourismcontentandprojectsfromscratch,basedonthefolowingconsiderations:

–Strategicnationwidepresence:TheCompany’sprojectshavebenestablishedin

centralcitiesandtouristdestinationsuchasShanghai,Zhengzhou,Sanya,and

Dalian,achievinganationwidechainlayoutwithighentrybariersforcompetitors.

–Buildingacompletebusinesecosystemisextremelycostly;theSubscription

enablesone-stopacestoful-chaincapabilities:TheCompanyintegratesocean

culture,polaranimals,performingartscontent,amusementfacilities,hoteland

catering,comercialentertainment,andIPoperationsintoanintegratedsolution,

formingacomprehensiveful-chainoperationplatform.Buildingthisfromscratch

wouldrequirecrosingmultipleprofesionalthresholds,yearsofacumulation,and

multipleroundsoftrialanderor,makingshort-termreplicationdificult.

–Establishedhighanualvisitortraficandbrandrecognition:TheCompany’sparks

haveahighanualvisitortrafic,highindustrybrandrecognitionandstrong

customerloyalty.

–Drivingrowththroughcomprehensivetourismandleisuresolutions:The

Company’stourismandleisureservicesandsolutionsbusinesofersafulrangeof

early-stageservices–includingdesignplaningandconstructionconsulting–to

third-partyclients,inaditiontomanagingtheoperationsofcompletedprojects.

Thisbusinesmodeleveragestheadvantagesofplatformexpansionandeconomies

ofscale,creatingasecondaryengineforprofitablegrowth.

LETERFROMTHEBOARD

Provideshigh-qualityindustryoperationsandmanagementcapabilities

Comprehensiveoperationalcapabilityiscrucialforthesustainabledevelopmentof

companiesinthethemeparkindustry.TheCompanyhasover20yearsofexperienceinthe

developmentandoperationoftheculturaltourismindustry,withitscoremanagementeam

eachavingmorethan10yearsofindustryexperience.TheCompanyposesesdepindustry

insightandexperienceinthemeparkinvestmentcoperation,overalplaning,design,

developmentandconstruction,IPcustomizationandaplication,animalcare,andongoing

operationalmanagement.

SynergyefectsbetwentheGroupandSunriver

Sunriverfocuseson“culturalcontent+ecologicaltourism+leisurevacation,”with

resource-basedscenicareasmainlyfeaturingmountainousregions,coveringareasuchas

GreaterWesternHunan,GreaterHuangshan,andtheYangtzeRiverDelta.Itscustomerbaseis

widelydistributedandrelativelybalanced.TheCompany,ontheotherhand,isdeplyengaged

in“marineIP+technologicalexperience+imersiveinteraction,”withflagshiprojectsin

citieslikeDalian,Sanya,andShanghai,targetingfamiliesandyoungurbangroups.Thetwo

companiesdiferinproductypes,regionalayoutsofbusinesoperations,customerstructures,

andbusinesmodels,alowingformutualearningandresourceintegration.Basedontheir

sharedunderstanding,afterCompletionoftheSubscription,theCompany’seriesofbrands,

developmentstrategy,corebusines,andcoreteamwilremainunchanged,andbothparties

wilworktogethertoempowerandpromotetheCompany’sustainabledevelopment.

TheSubscriberandtheCompanyalsointendtomaintainthelistingoftheSharesonthe

StockExchangefolowingtheCompletion.TheBoardisawareoftheSubscriber’sfuture

intentionsonthebusinesandoperationoftheGroupandconsidersthatherewilbeno

materialchangetothexistingbusinesandemploymentofthexistingemployesofthe

GroupasaresultoftheSubscription,saveforthepersonelchangesdisclosedinthesection

headed“ProposedChangeinBoardComposition”sectionbelow.

10.PROPOSEDCHANGEINBOARDCOMPOSITION

TheBoardiscurentlymadeupofnineDirectors,comprisingthrexecutiveDirectors,

beingMr.QuNaijie(Chairman),Mr.QuChengandMr.LiKehui,threnon-executive

Directors,beingMr.WangXuguang,Mr.GoToutouandMr.YuanBing,andthreindependent

non-executiveDirectors,beingMr.ZhuYuchen,Mr.WangJunandMs.ShenHan.

ItisexpectedthatherewilbeachangeincompositionoftheBoard.Astatedunderthe

SubscriptionAgrement,afterCompletion,theCompanyshalcoperateincompletingthe

changeinthecompositionoftheBoardandthereplacementofseniormanagementpersonel

oftheCompany.AsatheLatestPracticableDate,theSubscriberandtheCompanyhavenot

decidedonthechangestobemade.AnychangetotheBoardcompositionwilbemadein

compliancewiththeTakeoversCodeandtheListingRules.

LETERFROMTHEBOARD

11.FORMATIONOFTHEINDEPENDENTBOARDCOMITE

TheIndependentBoardComitecomprisingMr.YuanBingandMr.GoToutou,who

arenon-executiveDirectors,andaltheindependentnon-executiveDirectors,hasbenformed

underRule2.1oftheTakeoversCodetoadvisetheIndependentShareholdersinrespectofthe

Subscription,theWhitewashWaiverandtherespectivetransactionscontemplatedthereunder.

AsMr.WangwasinvolvedinthenegotiationsoftheSubscription,whichmaycompromisehis

abilitytoprovideanimpartialasesmentotheShareholdersasamemberoftheIndependent

BoardComite,hewilnotserveasamemberoftheIndependentBoardComite.

NoneofthemembersoftheIndependentBoardComitehasanyinterestor

involvementintheSubscriptionAgrement,theSpecificMandate,theWhitewashWaiver

and/ortheIncreaseinAuthorisedShareCapital.

12.APOINTMENTOFINDEPENDENTFINANCIALADVISER

SomerleyCapitalLimitedhasbenapointedastheIndependentFinancialAdviserwith

theaprovaloftheIndependentBoardComiteincompliancewithRule2.1ofthe

TakeoversCode,toadvisetheIndependentBoardComiteandtheIndependent

ShareholdersontheSubscription,theWhitewashWaiverandtherespectivetransactions

contemplatedthereunder.

13.PROPOSEDINCREASEINAUTHORISEDSHARECAPITAL

ThexistingauthorisedsharecapitaloftheCompanyisUS$500,000dividedinto

10,000,000,000SharesofnominalvalueofUS$0.00005each,ofwhich8,114,002,000Shares

areinisue.

ToensurethatheCompanyhasadequatesharecapitaltofacilitatetheSubscriptionand

tosuportitsongoingandfuturebusinesexpansion,theBoardproposestoincreasethe

authorisedsharecapitaloftheCompanytoUS$750,000dividedinto15,000,000,000Sharesby

thecreationofaditional5,000,000,000newShares(the“IncreaseinAuthorisedShare

Capital”).SuchnewShares,uponisue,shalrankparipasuinalrespectswiththexisting

Shares.

TheproposedIncreaseinAuthorisedShareCapitalisubjectotheaprovalofthe

ShareholdersbywayofpasinganordinaryresolutionatheEGM.

TheDirectorsareoftheviewthatheIncreaseinAuthorisedShareCapitalisinthe

interestoftheCompanyanditsShareholdersasawhole.

LETERFROMTHEBOARD

14.EGM

TheEGMwilbeheldtoconsiderand,ifthoughtfit,pasresolutionstoaprove,among

othermaters,theSubscriptionAgrement,theSpecificMandate,theWhitewashWaiver,the

IncreaseinAuthorisedShareCapitalandtherespectivetransactionscontemplatedthereunder.

InacordancewiththeListingRulesandtheTakeoversCode,(i)Mr.Yu,theSubscriber

anditsasociates;(i)anypartiesactinginconcertwithMr.YuortheSubscriber;and(i)the

ShareholdersinvolvedorinterestedintheSubscriptionortheWhitewashWaiver,wilbe

requiredtoabstainfromvotingontheresolution(s)toaprovetheSubscription,theSpecific

Mandate,theWhitewashWaiverandtherespectivetransactionscontemplatedthereunderathe

EGM.Mr.Wang,anon-executiveDirector,wasinvolvedinthenegotiationsofthe

Subscriptionandwilthereforeabstainfromvotingontheresolution(s)toaprovethe

Subscription,theSpecificMandate,theWhitewashWaiverandtherespectivetransactions

contemplatedthereunderatheEGM.

Mr.Wangwilalsovoluntarilyabstainfromvotingontheresolutiontoaprovethe

IncreaseinAuthorisedShareCapitalatheEGM.

Saveasdisclosedabove,asatheLatestPracticableDate,notherShareholderhadany

materialinterestintheSubscription,theSpecificMandate,theWhitewashWaiverandthe

IncreaseinAuthorisedShareCapital,andnotherShareholderwasrequiredtoabstainfrom

votingatheEGMontheresolutionsaprovingtheSubscription,theSpecificMandate,the

WhitewashWaiverandtheIncreaseinAuthorisedShareCapital.

AnoticeconveningtheEGMtobeheldatLargeMetingRom,31stFlor,BuildingA,

ForeshoreBeachWorldTradeCentrePhase1,No.4,Lane255,DongyuRoad,PudongNew

District,Shanghai,thePRConTuesday,19August2025at3:00p.m.isetoutonpages93

to95ofthiscircular.

AformofproxyforuseatheEGMisenclosedwiththiscircular.Whetherornotyouare

abletoatendtheEGM,youarerequestedtocompletetheformofproxyinacordancewith

theinstructionsprintedthereonandreturnitothebranchshareregistraroftheCompanyin

HongKong,TricorInvestorServicesLimited,at17/F,FarEastFinanceCentre,16Harcourt

Road,HongKong,asonasposiblebutinanyeventnotlesthan48hoursbeforethetime

apointedfortheholdingoftheEGMoranyadjournmenthereof.Completionandreturnof

theformofproxywilnotprecludeShareholdersfromatendingandvotingatheEGMorany

adjournmenthereofshouldyousowish.Ananouncementontheresultsofthevotebypol

wilbemadebytheCompanyaftertheEGMinacordancewiththeListingRulesandthe

TakeoversCode.

FordeterminingeligibilitytoatendandvoteatheEGM,theregisterofmembersofthe

CompanywilbeclosedfromThursday,14August2025toTuesday,19August2025,bothdays

inclusive,duringwhichperiodnotransferoftheShareswilberegistered.Inordertobe

eligibletoatendandvoteatheEGM,altransferoftheShares,acompaniedbytherelevant

LETERFROMTHEBOARD

sharecertificates,mustbelodgedwiththeCompany’sHongKongshareregistrar,Tricor

InvestorServicesLimited,at17/F,FarEastFinanceCentre,16HarcourtRoad,HongKong,for

registrationolaterthan4:30p.m.onWednesday,13August2025.

TheSubscriptionisubjectothesatisfaction(orwaiver)(asthecasemaybe)ofa

numberofconditionsprecedentsetoutunderthesectionheaded“Conditionsprecedent”inthis

circular,includingaprovalbytheIndependentShareholdersatheEGMfortheSubscription

andtheWhitewashWaiver,andthegrantingoftheWhitewashWaiverbytheExecutive.

Asuch,theSubscriptionmayormaynotproced.Shareholdersandpotentialinvestors

areadvisedtoexercisecautionwhendealingintheShares,andarerecomendedtoconsult

theirprofesionaladvisersiftheyareinanydoubtaboutheirpositionandastoactionsthat

theyshouldtake.

15.RECOMENDATION

Youratentionisdrawnto(i)theleterfromtheIndependentBoardComite,which

containstherecomendationoftheIndependentBoardComitetotheIndependent

Shareholdersconcerning,amongotherthings,theSubscriptionandtheWhitewashWaiverand

astovoting;and(i)theleterofadvicefromtheIndependentFinancialAdvisertothe

IndependentBoardComiteandtheIndependentShareholdersinrelationtotheSubscription

andtheWhitewashWaiver.TheDirectors(includingtheIndependentBoardComite,after

consideringtheadviceoftheIndependentFinancialAdviser)considerthatheSubscription

andtheWhitewashWaiverarefairandreasonableandintheinterestoftheCompanyandthe

Shareholdersasawhole.

Acordingly,theDirectorsrecomendtheIndependentShareholderstovoteinfavourof

theresolution(s)toaprovetheSubscription,theSpecificMandate,theWhitewashWaiverand

theIncreaseinAuthorisedShareCapitaltobeproposedatheEGM.

16.ADITIONALINFORMATION

Youratentionisdrawntotheaditionalinformationsetoutintheapendicestothis

circularandthenoticeoftheEGM.

ByorderoftheBoard

HaichangOceanParkHoldingsLtd.

QuNaijie

ExecutiveDirector,ChairmanoftheBoard

andChiefExecutiveOficer

LETERFROMTHEBOARD

ThefolowingisthefultextofaleterfromtheIndependentBoardComitesetingout

itsrecomendationforthepurposeofinclusioninthiscircular.

HAICHANGOCEANPARKHOLDINGSLTD.

海昌海洋公园控股有限公司

(IncorporatedintheCaymanIslandswithlimitedliability)

(StockCode:2255)

31July2025

TotheIndependentShareholders

DearSirsorMadams,

(1)SUBSCRIPTIONOFNEWSHARESUNDERSPECIFICMANDATE;AND

(2)APLICATIONFORWHITEWASHWAIVER

WerefertothecircularoftheCompanydated31July2025(the“Circular”)ofwhichthis

leterformspart.Termsusedinthisletershalhavethesamemeaningsasdefinedinthe

Circularunlesthecontextotherwiserequires.

WehavebenapointedasmembersoftheIndependentBoardComitetoadvisethe

IndependentShareholdersastowhetherthetermsoftheSubscriptionandthetransactions

contemplatedthereunderandtheWhitewashWaiverarefairandreasonablesofarasthe

IndependentShareholdersareconcernedandtoadvisetheIndependentShareholdershowto

voteatheEGM.

SomerleyCapitalLimitedhasbenapointedastheIndependentFinancialAdviserto

adviseusandtheIndependentShareholdersinthisrespect.DetailsoftheadviceofSomerley

CapitalLimitedarecontainedinitsletersetoutonpages39to73oftheCircular.Your

atentionisalsodrawntotheleterfromtheBoardandtheaditionalinformationsetoutin

theapendicestotheCircular.

HavingtakenintoacounthetermsoftheSubscriptionandtheadvicefromthe

IndependentFinancialAdviser,weconsiderthatheSubscriptionandthetransactions

contemplatedthereunder(includingbutnotlimitedtotheSpecificMandate)andthe

WhitewashWaiverarefairandreasonablesofarastheIndependentShareholdersare

concerned,andareintheinterestsoftheCompanyandtheShareholdersasawhole.

LETERFROMTHEINDEPENDENTBOARDCOMITE

Acordingly,werecomendtheIndependentShareholderstovoteinfavouroftheordinary

resolutiontobeproposedatheEGMtoaprovetheSubscriptionandthetransactions

contemplatedthereunderandthespecialresolutiontobeproposedatheEGMtoaprovethe

WhitewashWaiver.

Yoursfaithfuly

IndependentBoardComite

Mr.GoToutou

Non-executiveDirector

Mr.YuanBing

Non-executiveDirector

Mr.ZhuYuchen

Independentnon-executive

Director

Mr.WangJun

Independentnon-executive

Director

Ms.ShenHan

Independentnon-executive

Director

LETERFROMTHEINDEPENDENTBOARDCOMITE

ThefolowingistheleterofadvicefromSomerleyCapitalLimited,theIndependent

FinancialAdviser,totheIndependentBoardComite,whichasbenpreparedforthe

purposeofinclusioninthiscircular.

SOMERLEYCAPITALIMITED

20thFlor

ChinaBuilding

29Quen’sRoadCentral

HongKong

31July2025

To:theIndependentBoardComite

DearSirorMadam,

(1)SUBSCRIPTIONOFNEWSHARESUNDERSPECIFICMANDATE;AND

(2)APLICATIONFORWHITEWASHWAIVER

INTRODUCTION

Werefertourapointmentastheindependentfinancialadvisertoadvisethe

independentboardcomiteofHaichangOceanParkHoldingsLimited(the“Company”)in

relationtotheproposedsubscriptionofnewsharesoftheCompanybySunriverStarysea

Tourism(Cayman)Co.,Ltd.andtheaplicationforwhitewashwaiver(the“Transactions”).

DetailsoftheTransactionsaresetoutinthe“LeterfromtheBoard”(the“BoardLeter”)

containedinthecircularoftheCompanytotheShareholdersdated31July2025(the

“Circular”),ofwhichthisleterformspart.Capitalisedtermsusedinthisletershalhavethe

samemeaningsasthosedefinedintheCircularunlesotherwisedefinedherein.

On2June2025(aftertradinghours),theCompanyenteredintotheSubscription

AgrementwiththeSubscriberandSunriver,pursuantowhichtheSubscriberhas

conditionalyagredtosubscribefor,andtheCompanyhasconditionalyagredtoalotand

isuetheSubscriptionShares,being5,100,000,000newShares,atheSubscriptionPriceunder

theSpecificMandate.

AsathedateoftheAnouncementandasatheLatestPracticableDate,neitherthe

Subscribernoranypartyactinginconcertwithitowns,controlsordirectsanySharesor

convertiblesecurities,warantsoroptions(oroutstandingderivatives)inrespectofShares.

AsumingthereisnotherchangeinthesharecapitaloftheCompanyfromtheLatest

PracticableDateuptoandincludingthedateofCompletion,theSubscriberwilhold

5,100,000,000SharesuponCompletion,representingaproximately38.60%oftheisued

sharecapitaloftheCompanyasenlargedbythealotmentandisueoftheSubscriptionShares.

UnderRule26.1oftheTakeoversCode,theSubscriberwouldbeobligedtomakeamandatory

generalofertotheShareholdersforaltheisuedSharesandothersecuritiesoftheCompany

notalreadyownedoragredtobeacquiredbyitorpartiesactinginconcertwithitunlesthe

LETERFROMTHEINDEPENDENTFINANCIALADVISER

WhitewashWaiverisobtainedfromtheExecutive.Inthisregard,anaplicationhasbenmade

bytheSubscribertotheExecutiveforthegrantingoftheWhitewashWaiverpursuantoNote

1onDispensationsfromRule26oftheTakeoversCodeinrespectofthealotmentandisue

oftheSubscriptionShares.TheWhitewashWaiver,ifgrantedbytheExecutive,wilbesubject

to,amongotherthings,(i)theaprovalbyatleast75%ofthevotescastbytheIndependent

ShareholderseitherinpersonorbyproxyinrespectoftheWhitewashWaiveratheEGM;and

(i)theaprovalbymorethan50%ofthevotescastbytheIndependentShareholdersinrespect

oftheSubscription(includingtheSpecificMandate)thatarecasteitherinpersonorbyproxy

atheEGM.

TheIndependentBoardComite,comprisingMr.YuanBingandMr.GoToutou,who

arenon-executiveDirectors,andaltheindependentnon-executiveDirectorsincluding

Mr.ZhuYuchen,Mr.WangJunandMs.ShenHan,hasbenformedunderRule2.1ofthe

TakeoversCodetoadvisetheIndependentShareholdersinrespectoftheSubscription,the

WhitewashWaiverandtherespectivetransactionscontemplatedthereunder.AsMr.Wang

XuguangwasinvolvedinthenegotiationsoftheSubscription,whichmaycompromisehis

abilitytoprovideanimpartialasesmentotheShareholdersasamemberoftheIndependent

BoardComite,hewilnotserveasamemberoftheIndependentBoardComite.We,

SomerleyCapitalLimited,havebenapointedwiththeaprovaloftheIndependentBoard

ComiteastheIndependentFinancialAdvisertoadvisetheIndependentBoardComite

inthisregard(the“Engagement”).

WearenotasociatedwiththeCompany,theSubscriberoranypartyacting,orpresumed

tobeacting,inconcertwithanyofthemand,acordingly,areconsideredeligibletogive

independentadviceontheSubscriptionandtheWhitewashWaiver.Duringthepastwoyears

priortotheLatestPracticableDate,therehavebenoengagementsbetwenSomerleyCapital

LimitedandtheCompanyortheSubscriberandpartiesactinginconcertwithit.Apartfrom

normalprofesionalfespaidorpayabletousinconectionwiththeEngagement,no

arangementexistswherebywewilreceiveanypaymentorbenefitsfromtheCompany,the

Subscriberoranypartyacting,orpresumedtobeacting,inconcertwithanyofthem.

Informulatingouropinion,wehavereliedontheinformationandfactsuplied,andthe

opinionsexpresed,bythexecutiveDirectorsandmanagementoftheCompany(the

“Management”)andwehaveasumedthatheinformationandfactsprovidedandopinions

expresedtousaretrue,acurateandcompleteinalmaterialaspects.Shouldtherebeany

materialchangestouropinionorinformationprovidedinthisleteraftertheLatest

PracticableDate,theIndependentShareholderswouldbenotifiedasonasposiblein

acordancewithRule9.1oftheTakeoversCode.Wehavealsosoughtandreceived

confirmationfromtheDirectorsthatalmaterialrelevantinformationhasbensupliedtous

andthatnomaterialfactshavebenomitedfromtheinformationsupliedandopinions

expresedtous.Wehavenoreasontodoubthetruthoracuracyoftheinformationprovided

tous,ortobelievethatanymaterialinformationhasbenomitedorwitheld.Wehaverelied

onsuchinformationandconsiderthatheinformationwehavereceivedisuficientforusto

reachouradviceandrecomendationasetoutinthisleter.However,wehavenotconducted

anyindependentinvestigationintothebusinesandafairsoftheGrouportheSubscriber,nor

havewecariedoutanyindependentverificationoftheinformationsuplied.

LETERFROMTHEINDEPENDENTFINANCIALADVISER

PRINCIPALFACTORSANDREASONSCONSIDERED

InarivingatouropinionwithrespectotheSubscriptionandtheWhitewashWaiver,we

havetakenintoacountheprincipalfactorsandreasonsetoutbelow.

A.TheShareSubscription

1.InformationontheGroup

1.1.Busines

TheGroupmainlycariesoutitsoperationsinthePRCandisprincipalyengaged

in(i)thedevelopment,constructionandoperationofthemeparks,managementofthe

Group’sdevelopedandoperatingpropertiesuroundingthethemeparksforental

income,hoteloperationandtheprovisionofservicestovisitors;(i)thedeliveryofentire

procesofplaning,designing,construction,animalconservation,andoperationand

managementoexternaltourismandleisureprojects,and(i)theintegrationof

world-clasintelectualproperties(IP)intothemeparks,scenicspots,lifestylehotels,

comercialbuildingsandotheron-groundconsumption.

Wehavereviewedthe2024anualreportoftheCompany(the“2024Anual

Report”),andbasedonwhichtheGroupownedandoperatedseventourismandleisure

projectsasat31December2024withdetailsetoutasfolows:

Park

Yearof

opening

Sitearea

(inaproximate

squaremetre)

ShanghaiHaichangOceanPark2018297,000

ZhengzhouHaichangOceanPark2023425,000

DalianHaichangDiscoverylandThemePark2006467,000

SanyaHaichangFantasyTown2019233,000

DalianLaohutanOceanPark200223,000

ChongqingHaichangCaribeanWaterPark2009240,000

YantaiHaichangOceanPark2011157,000

LETERFROMTHEINDEPENDENTFINANCIALADVISER

1.2.Financialinformation

Wehavereviewedthe2023anualreportoftheCompany(the“2023Anual

Report”)andthe2024AnualReport.Basedontheaforesaidanualreportsofthe

Company,wehavesetoutbelowasumaryoftheconsolidatedfinancialinformationof

theGroupforeachofthethreyearsofFY2022,FY2023andFY2024:

Fortheyearended31December

RMB’000RMB’000RMB’000

Revenue1,818,3581,816,842792,988

–Parkoperation1,685,2421,687,376748,941

–Operationasaservice133,116129,46644,047

Grosprofit/(los)418,965457,455(278,728)

Otherincomeandgains103,829306,497181,525

Selingandistributionexpenses(170,225)(139,222)(85,029)

Administrativexpenses(719,290)(469,794)(606,375)

Reversalofimpairment

loses/(impairmentloses)on

financialasets4508,091(76,362)

Otherexpenses(48,151)(26,551)(238,556)

Financecosts(346,497)(322,580)(314,864)

Incometaxcredit11,4084,1979,531

(Los)atributabletownersof

theCompany(739,719)(197,259)(1,395,911)

Asat31December

RMB’000RMB’000RMB’000

Cashandcashequivalents64,7381,702,2641,244,633

PledgedepositsNil5,9125,075

Property,plantandequipment6,237,3906,523,0875,166,069

Right-of-useasets1,592,2071,484,5151,476,716

Investmentproperties745,500257,349122,477

Propertiesunderdevelopment299,996299,849299,789

Completedpropertiesheldforsale7,08622,49822,498

Investmentpropertiesclasifiedas

heldforsaleNil374,897387,836

Receivables(including(i)long-

termprepayments,receivables

andepositsand(i)

prepaymentsandother

receivables)1,099,665542,3171,208,546

LETERFROMTHEINDEPENDENTFINANCIALADVISER

Asat31December

RMB’000RMB’000RMB’000

Interest-bearingbankandother

borowings(5,898,417)(6,142,868)(5,149,167)

–Curent(1,560,983)(1,403,535)(1,461,220)

–Non-curent(4,337,434)(4,739,333)(3,687,947)

Leaseliabilities(295,348)(156,104)(118,563)

–Curent(27,353)(35,087)(25,833)

–Non-curent(267,995)(121,017)(92,730)

Payables(including(i)tradeand

bilpayables,(i)otherpayables

andacrualsand(i)long-term

payables)(1,814,057)(2,188,167)(1,761,052)

Totalasets10,339,55311,522,74410,210,925

Totaliabilities(8,524,253)(9,004,382)(7,534,598)

Netasets1,815,3002,518,3622,676,327

Netasetsatributableto

ownersoftheCompany1,722,7602,416,0302,623,757

1.2.1.Financialperformance

FY2023vsFY2022

DuringFY2023,theGrouprecordedrevenueofaproximatelyRMB1.82

bilion,representingasubstantialincreaseofaproximatelyRMB1.02bilionor

129.11%ascomparedtothatforFY2022.Acordingtothe2023AnualReport,

suchincreaseinrevenuewasmainlyatributabletotheincreaseinrevenueofthe

parkoperationbusinesandoperationasaservice(“OAS”)busines(beingthe

provisionofconsultancy,managementandrecreationservicesforfulcycleof

operationoftourismandleisureprojectscoveringthentireprocesofplaning,

designing,construction,animalconservation,andoperationandmanagement)asa

resultofthereboundoftourism&leisuremarket,aswelasthenewlyopeningof

theZhengzhouParkin2023.TheGrouprecordedgrosprofitofaproximately

RMB457.46milionforFY2023,ascomparedtogroslosofaproximately

RMB278.73milionrecordedforFY2022.Acordingtothe2023AnualReport,

suchturnaroundfromgroslostogrosprofitwasatributabletothesubstantial

increaseinrevenueposthepandemic.

LETERFROMTHEINDEPENDENTFINANCIALADVISER

TheGrouprecorded(i)otherincomeandgainsofaproximatelyRMB306.50

milionforFY2023(representinganincreaseofaproximately68.85%ascompared

tothatforFY2022,which,acordingtothe2023AnualReport,wasprimarilydue

tothefairvaluegainsoninvestmentproperties,gainondisposalofanasociateand

dividendincomefromfinancialasets);(i)selingandmarketingexpensesof

aproximatelyRMB139.22milionforFY2023(representinganincreaseof

aproximately63.73%ascomparedtothatforFY2022,which,acordingtothe

2023AnualReport,wasprimarilyatributabletothestrengthenedmarketing

efortspostpandemicandincreasedselingandmarketingexpensesincuredasa

resultoftheopeningofZhengzhouPark);(i)administrativexpensesof

aproximatelyRMB469.79milionforFY2023(representingadecreaseof

aproximately22.52%ascomparedtothatforFY2022,which,asadvisedbythe

Management,wasprimarilyatributabletotheabsenceofsignificantlong-term

asetsimpairmentduringFY2023ascomparedtoaproximatelyRMB148milion

recordedinFY2022);and(iv)financecostsofaproximatelyRMB322.58milion

forFY2023(representinganincreaseofaproximately2.45%ascomparedtothat

forFY2022,which,acordingtothe2023AnualReport,wasprimarilyduetothe

increaseininterest-bearingdebtinFY2023inordertosuportZhengzhouPark).

TheGroup’sgrosprofitabilityimprovedsignificantlyinFY2023ascompared

toFY2022,despitestilrecordinganetlosposition.TheGrouprecordedlos

atributabletownersoftheCompanyofaproximatelyRMB197.26milionfor

FY2023,representingasubstantialdecreaseofaproximatelyRMB1.20bilionor

85.87%ascomparedtothatforFY2022.AsadvisedbytheManagement,such

decreaseinlosatributabletownersoftheCompanywasmainlyatributableto(i)

theaforesaidincreaseinrevenueresultinginagrosprofitforFY2023,(i)the

increaseinotherincomeandgains,(i)thedecreaseinadministrationexpensesand

(iv)thedecreaseinotherexpenses.

FY2024vsFY2023

DuringFY2024,theGrouprecordedrevenueofaproximatelyRMB1.82

bilion,representingaslightincreaseof0.08%ascomparedtothatforFY2023.As

setoutintheBoardLeter,despitea16.1%year-on-yearincreaseinparkentriesto

10.79milionvisitors,asignificant13.8%declineinper-capitaspendingandweak

secondaryconsumptionoftheGroup’svisitorsocureduetothechalenging

externalmarketenvironment.Per-capitaspendingrepresentsthetotalamountof

spendingbythevisitors(includingticketsandsecondaryconsumptionwithinthe

themeparks)dividedbythenumberofvisitors,whilesecondaryconsumption

representsthespendingbythevisitorswithinthethemeparks(suchascatering,

souvenirsandspecialexperienceprojects)butexcludingtheticketcosts.Asuch,

thedeclineinper-capitaspendingandtheweaksecondaryconsumptionafectedthe

Group’grosprofitduringFY2024.TheGrouprecordedgrosprofitof

aproximatelyRMB418.97milionforFY2024,representingadecreaseof

aproximately8.41%ascomparedtothatforFY2023.Acordingtothe2024

LETERFROMTHEINDEPENDENTFINANCIALADVISER

AnualReport,suchdecreaseingrosprofitwasatributabletotheincreaseincost

asaresultofthenewlyopenedZhengzhouParkexperiencingitsfirstcomplete

operatingyearinFY2024.AsadvisedbytheManagement,despitetheyear-on-year

(“YOY”)increaseinthenumberofdomestictouristsandoveralspendingof

domestictouristsofthePRCin2024,theoveralperformanceofthethemepark

segmentdeclinedtoacertainextentcomparedtothatof2023.Basedonthe

knowledgeoftheManagementonthemarketandtheindustrytrend,the

Managementnotedthathethemeparksegmentgeneralyfacedsimilarchalenges,

andtheManagementconsidersthatheoperatingperformanceoftheGroupin

FY2024wasafectedbytheindustrytrend.Basedontheknowledgeofthe

Managementabouthemarketandtheindustrytrend,theManagementnotedthathe

numberoftouristsofthethemeparksegmenthasdeclinedincertainareasinthe

PRC,mainlyduetomorerationalconsumerspendingandlowerfrequencyofvisits

tothemeparksduetoextremeweather.BasedontheknowledgeoftheManagement

abouthemarketandtheindustrytrend,theManagementalsonotedthatsecondary

consumptioninthemeparks(suchascatering,souvenirsandspecialexperience

projects)hasalsodeclinedgeneraly,withadeclineof10%to30%ascomparedto

previousyearinthemarket,reflectingthatouristsaremoreconservativein

consumptionandleswilingtoacepthigher-premiumservicesandentertainment.

TheManagementconsidersthatheoperatingperformanceoftheGroupinFY2024

reflectstheaboveindustrytrends.WeacknowledgetheManagement’sviewonthe

industrytrendsandconsiderthatsuchtrendshadimpactedthefinancialperformance

oftheGroupinFY2024.

TheGrouprecorded(i)otherincomeandgainsofaproximatelyRMB103.83

milionforFY2024(representingadecreaseofaproximately66.12%ascompared

tothatforFY2023,which,acordingtothe2024AnualReport,wasprimarilydue

totheabsenceofgainondisposalofarelatedcompanyandividendincomefrom

financialasetsduringFY2024);(i)selingandmarketingexpensesof

aproximatelyRMB170.23milionforFY2024(representinganincreaseof

aproximately22.27%ascomparedtothatforFY2023,which,acordingtothe

2024AnualReport,wasprimarilyatributabletothecorespondingincreasein

selingandmarketingexpensesasaresultofthenewlyopenedZhengzhouPark

experiencingitsfirstcompleteoperatingyearin2024);(i)administrativexpenses

ofaproximatelyRMB719.29milionforFY2024(representinganincreaseof

aproximately53.11%ascomparedtothatforFY2023,which,acordingtothe

2024AnualReport,wasprimarilyduetotheincreaseinadministrativexpensesin

ZhengzhouParkandone-ofimpairmentofaproximatelyRMB190.4milion

recordedinFY2024);and(iv)financecostsofaproximatelyRMB346.50milion

forFY2024(representinganincreaseofaproximately7.41%ascomparedtothat

forFY2023,which,acordingtothe2024AnualReport,wasprimarilyduetothe

higheramountofinterestcapitalizedinFY2023).

LETERFROMTHEINDEPENDENTFINANCIALADVISER

TheGrouprecordedlosatributabletownersoftheCompanyof

aproximatelyRMB739.72milionforFY2024,representinganincreaseof

aproximately275.00%ascomparedtothatforFY2023.Asadvisedbythe

Management,suchincreaseinlosatributabletownersoftheCompanywas

mainlyatributabletothedecreaseinotherincomeandgains(primarilyduetothe

absenceofgainondisposalofarelatedcompanyandividendincomefrom

financialasetsduringFY2024)andtheincreaseinadministrationexpenses

(primarilyduetotheincreaseinadministrativexpensesinZhengzhouParkand

one-ofimpairmentofaproximatelyRMB190.36milionrelatingtoproperty,plant

andequipment).

1.2.2.Financialposition

TheGrouprecordedtotalasetsofaproximatelyRMB10.34bilionasat31

December2024,majorityofwhichrepresentedthemeparksrelatednon-curentasetsof

theGroup’sprincipalbusines.TheGrouprecordedtotaliabilitiesofaproximately

RMB8.52bilionasat31December2024,majorityofwhichrepresentedinterest-bearing

bankandotherborowings.Otherthantheaforesaidnon-curentasetsandbankand

otherborowings,theGroupalsorecordedreceivables(including(i)long-term

prepayments,receivablesandepositsand(i)prepaymentsandothereceivables)and

payables(including(i)tradeandbilpayables,(i)otherpayablesandacrualsand(i)

long-termpayables)ofaproximatelyRMB1.10bilionandaproximatelyRMB1.81

bilionrespectivelyasat31December2024.

WehavefurthereviewedtheliquiditypositionoftheGroup.Asat31December

2024,theGrouphadcashandcashequivalents,interest-bearingbankandother

borowingsandleaseliabilitiesofaproximatelyRMB64.74milion,RMB5.90bilion

andRMB295.35milionrespectively.Asat31December2024,wenotedthatheGroup’s

cashandcashequivalents,inparticular,representedasubstantialdecreaseof

aproximatelyRMB1.64bilionor96.20%ascomparedtothatasat31December2023

andasubstantialdecreaseofaproximately94.80%ascomparedtothatasat31

December2022.AsadvisedbytheManagement,suchdecreaseintheGroup’scashand

cashequivalentswasmainlyatributabletothenetcashflowusedintheinvesting

activitiesfordevelopmentofitsprojectsandfinancingactivitiesforepaymentofbank

andotherloansoftheGroup(whichmainlyincluded(i)thepaymentfordevelopmentof

theGroup’sprojects(includingthepurchasesofitemsofpropertyandprepaymentand

deposits)inacordancewiththedevelopmentplansoftheGroup’sprojects,resultingin

anetcashoutflowofaproximatelyRMB1.30bilionandRMB1.21bilioninFY2023

andFY2024respectivelyand(i)repaymentofbankandotherloansofaproximately

RMB1.91bilionandRMB1.05bilionduringFY2023andFY2024respectively).

LETERFROMTHEINDEPENDENTFINANCIALADVISER

TheGrouphadnetdebtoequityratio(beinginterest-bearingbankandother

borowings,andleaseliabilities,lescashandcashequivalents,dividedbynetasets)of

aproximately150.32%,182.53%and337.63%respectivelyasat31December2022,31

December2023and31December2024.Thenetdebtoequityratiowasona

deterioratingtrendfrom2022to2024,especialyfromendof2023toendof2024.As

advisedbytheManagement,theaforesaidincreaseinetdebtoequityratiowasmainly

duetothedecreaseincashandcashequivalentsduringFY2024andtheincreaseinthe

interest-bearingbankandotherborowingsduringFY2023.

1.2.3.Ourview

Basedontheaboveanalysis,wenotedthatheGrouphadrecoveredfromthe

pandemicwithasignificantincreaseinrevenueinFY2023andastablerevenuein

FY2024.However,theGroupfacedchalengesasaresultofthechangesinthecustomers’

spendingandchalengingmarketenvironment,evidencedbythedeclineinper-capita

spendingandweaksecondaryconsumptionoftheGroup’scustomersascomparedtoyear

2019beforethepandemic.TheimprovementinthetourismindustryofthePRCas

evidencedbytheincreaseinumberandspendingofdomestictouristsalsodidnot

translateintoacorespondingincreaseintheGroup’srevenueduringFY2024asaresult

ofthedeteriorationinliquiditypositionoftheGroupandtheloweraveragefelevelof

theZhengzhouParkinthearlystageofoperation.ThefinancialpositionoftheGroup

deterioratedinFY2024ascomparedtoFY2023.TheGrouprecordedanincreasedlos

atributabletownersoftheCompanyinFY2024whichequalstoaround3.75timesof

losatributabletownersoftheCompanyinFY2023.LiquiditypositionoftheGroup

alsodeterioratedinFY2024,withasignificantincreaseinetdebtoequityratiof

aproximately155.10percentagepointsandasignificantdecreaseincashandcash

equivalentsofaproximatelyRMB1.64bilionathendoftheyear,ascomparedto

FY2023.

LETERFROMTHEINDEPENDENTFINANCIALADVISER

Limited 49.99	Partner 96%

Limited 49.99	Partner 96%

General 0.00	Partner 08%

10	0%

5.7	1%

4.2	9%

10	0%

10	0%

2.InformationontheSubscriberandSunriver

2.1.TheSubscriber

Asetoutinthesectionheaded“3.INFORMATIONONSUNRIVERANDTHE

SUBSCRIBER”oftheBoardLeter,theSubscriberisacompanyincorporatedunderthe

lawsofCaymanIslandswithlimitedliability,whichisindirectlywholycontroledby

Sunriver.Itisaspecialpurposevehicleincorporatedforthepurposeofsubscribingfor

theSubscriptionSharesandasumestherelevantobligationsundertheSubscription

Agrement.TheshareholdingstructureoftheSubscriberasatheLatestPracticableDate

isilustratedinthediagrambelow:

Shanghai Sunriver Yuancun

SH Sunriver Xinghai

Sunriver Starysea HK

Shengzhou Sunriver Partnership

Shengzhou Yisheng Partnership

8%1%

Sunriver

Anhui Yuanyinxiang Partnership

100%

The Subscriber

The Company

Onshore

Ofshore

100%

TheSubscriberiswholy-ownedbySunriverStaryseaHK,whichisinturn

wholy-ownedbySHSunriverXinghai.SHSunriverXinghaisownedasto

aproximately85.71%byShengzhouSunriverPartnershipand14.29%byAnhui

YuanyinxiangPartnership.

ShengzhouSunriverPartnershipisalimitedpartnershipestablishedinthePRC.

Sunriveristhegeneralpartner,andShanghaiSunriverYuancunandShengzhouYisheng

PartnershiparethelimitedpartnersofShengzhouSunriverPartnership.Sunriverasthe

generalpartnerisresponsibleforthedailymanagementandoperationsofShengzhou

SunriverPartnership,includingbutnotlimitedtodecisionsrelatingtoinvestment,useof

procedsandexpensesandailyoperations.RegardingShanghaiSunriverYuancun,itis

anindirectwholy-ownedsubsidiaryofSunriver.Ontheotherhand,basedonthepublic

informationavailable,ShengzhouYishengPartnershipisalimitedpartnershipwhichis

ultimatelywholy-ownedbytheShengzhouMunicipalFinanceBureau(嵊州市财政局).

LETERFROMTHEINDEPENDENTFINANCIALADVISER

Huang Hua (cid:28267)(cid:14818)	Gan Yong (cid:11802)(cid:8815)

Shen Tong-yan (cid:15408)(cid:9140)(cid:12045)	Yu Fang-sheng (cid:7937)(cid:13665)(cid:17607)

AnhuiYuanyinxiangPartnershipisalimitedpartnershipestablishedinthePRC.

HefeiKunyou,adirectwholy-ownedsubsidiaryofSunriver,isthegeneralpartner,and

SunriveristhelimitedpartnerofAnhuiYuanyinxiangPartnership.Itisownedasto

aproximately99.99%bySunriverand0.01%byHefeiKunyou.

Forfurtherdetailsofthestructure,capitalcontributionamountandinformationof

partnersofShengzhouSunriverPartnershipandAnhuiYuanyinxiangPartnership,please

refertothesectionheaded“3.INFORMATIONONSUNRIVERANDTHE

SUBSCRIBER”oftheBoardLeter.

2.2.Sunriver

Asetoutinthesectionheaded“3.INFORMATIONONSUNRIVERANDTHE

SUBSCRIBER”oftheBoardLeter,Sunriverisacompanyestablishedunderthelawsof

thePRCanditsprimarybusinesfocusesoninvestinginandoperatingmultiple

companieswithintheculturaltourismsector.ItistheactualcontrolerofZhejiang

SunriverCultureTourismCo.,Ltd浙江祥源文旅股份有限公司(stockcode:600576.SH)

(“ZhejiangSunriver”)andAnhuiGourgenTraficConstructionCo.,Ltd.安徽省交通建

设股份有限公司(stockcode:603815.SH)(“AnhuiGourgen”).Theshareholding

structureofSunriverasatheLatestPracticableDateisilustratedinthediagrambelow:

Yu Shui-xiang

(cid:8070)(cid:15324)(cid:18701)

Yu Hong-hua

(cid:8070)(cid:19629)(cid:21399)

Hu Xian-kuan

(cid:20617)(cid:8432)(cid:11156)

Chang Yu

(cid:11744)(cid:11055)

Mr. Yu

71.2%6.4%5.4%4%4%3.2%0.8%0.8%0.2%

100%

Sunriver Original InformationAnhui Sunriver EMC

60.75%4.5%3.75%3%3%

Sunriver

25%

Lai Zhi-lin

(cid:23708)(cid:12159)(cid:14143)

Shen Bao-shan

(cid:15408)(cid:8069)(cid:11289)

Yu Shui-xiang

(cid:8070)(cid:15324)(cid:18701)

Mr. Yu

Ouyang Ming

(cid:15096)(cid:26149)(cid:13750)

Mr. Yu

AsatheLatestPracticableDate,Sunriveristhereforeultimatelycontroledasto

65.3%byMr.Yu(Mr.YuFa-xiang(俞发祥).

LETERFROMTHEINDEPENDENTFINANCIALADVISER

2.3.ZhejiangSunriverandAnhuiGourgen

Asmentionedabove,SunriveristheactualcontrolerofZhejiangSunriverand

AnhuiGourgen.Wehavereviewedthe2024anualreportsofeachofZhejiangSunriver

andAnhuiGourgenandnotedthat(i)Sunriverwasinterestedinanagregateof

aproximately58%interestinZhejiangSunriverasat31December2024;and(i)

Sunriverdirectlyheldaproximately44%ofthetotalisuedsharesinAnhuiGourgenas

at31December2024.ZhejiangSunriverisprincipalyengagedintourismservicesand

recordedarevenueofaproximatelyRMB864milionandanetprofitatributableto

ownerofthecompanyofaproximatelyRMB147milionforFY2024.AnhuiGourgenis

principalyengagedinconstructionservicesandrecordedarevenueofaproximately

RMB4bilionandanetprofitatributabletownerofthecompanyofaproximately

RMB130milionforFY2024.

2.4.FutureintentionsoftheSubscriberegardingtheGroup

Asetoutinthesectionheaded“9.FUTUREINTENTIONSOFTHE

SUBSCRIBEREGARDINGTHEGROUPANDREASONSFORTHE

SUBSCRIBER’SUBSCRIPTION”oftheBoardLeter,asatheLatestPracticableDate,

theCompany(i)hadnointention,arangement,agrement,understandingornegotiation

(concludedorotherwise)todownsizeordisposeofthexistingbusines;and(i)didnot

expectoenterintoanyotherarangementortransactionwiththeSubscriberandorits

asociateapartfromtheSubscription.UponCompletion,theSubscriberwilbecomea

controlingshareholder(asdefinedundertheListingRules)oftheCompany.The

SubscriberintendstocontinuethexistingprincipalbusinesesoftheGroup.Saveforthe

personelchangesdisclosedbelow,theSubscriberhasnointentiontointroduceany

majorchangestothexistingoperationandbusinesoftheCompany,includingto(i)

discontinuethemploymentofanyemployesoftheGroupotherthanintheordinary

courseofbusines;or(i)redeploythefixedasetsoftheCompanyotherthanthosein

itsordinaryandusualcourseofbusines.

ItisexpectedthatherewilbeachangeincompositionoftheBoardafter

CompletionandtheCompanyshalcoperateincompletingthechangeinthe

compositionoftheBoardandthereplacementofseniormanagementpersonelofthe

Company.AsatheLatestPracticableDate,theSubscriberandtheCompanyhavenot

decidedonthechangestobemade.

LETERFROMTHEINDEPENDENTFINANCIALADVISER

3.ReasonsforandbenefitsoftheSubscriptionanduseofproceds

Wehavereviewedthesectionsheaded“5.REASONSFORANDBENEFITSOFTHE

SUBSCRIPTIONANDUSEOFPROCEDS”and“9.FUTUREINTENTIONSOFTHE

SUBSCRIBEREGARDINGTHEGROUPANDREASONSFORTHESUBSCRIBER’S

SUBSCRIPTION”oftheBoardLeter,andhavealsodiscusedwiththeManagement

regardingthereasonsforandbenefitsoftheSubscription.Furtherdetailsaresetoutinthis

sectionbelow:

(i)FundraisingnedsoftheGroup

WehavereviewedthefundraisingnedsoftheGroupintermsof(a)financial

performanceoftheGroup,(b)businesdevelopmentoftheGroup,and(c)marketand

industrydevelopment,detailsofwhicharesetoutbelow.

a.FinancialperformanceoftheGroup

ThefinancialperformanceoftheGrouphadbenafectedbytheCOVID-19

pandemicandthecomplexexternalmarketenvironmentinrecentyears(including

butnotlimitedtopositivefactorofthepostpandemicreboundoftheconsumer

marketinearly2023ascomparedto2022folowingtheasingofpandemic

preventionandcontrolmeasures;andthenegativefactorsincluding(i)the

continuedslugishstockandpropertymarketin2024whichafectedconsumers’

desiretospend;(i)tighterfinancingenvironmentwhichincreasedthedificultyin

financingandcausedsurgingfinancecosts,creatingfinancialpresuretotheGroup

inprojectdevelopmentandtransformationandoperationimprovement;and(i)the

impactbroughtbyplatformeconomyandtraficmechanisms,includingtheshiftof

consumers’focustosocialmediaplatformandtheincreaseininfluenceinsocial

mediaplatformindrivingsales,forcingtheGrouptocontinuetoinvestinonline

marketingandprivatedomainondiferentsocialmediaplatforms(e.g.buildingup

ofdiferentoficialchanels,andoperatingandpromotingoficialminiprogramsor

livestreamroms)toadaptothetrendoftraficfragmentation,whichincreased

marketingandmanagementcosts).Asaresult,theCompany’sbusinesrecoveryhas

lagedbehindexpectations,resultinginsustainedoperatinglosesandphased

liquiditypresure.Asdiscusedinthesectionheaded“1.InformationontheGroup”

ofthisleterabove,theGroupfacedadownturninitsoperationandfinancial

performanceinFY2022asaresultoftheresurgenceoftheCOVID-19pandemic.

BusinesoftheGroupreboundedinFY2023asaresultofrecoveryofthetourism

andleisuremarketinthePRC,andtheGrouprecordedsignificantincreasein

revenue.TheGrouphadrecordedasubstantialreductioninetlosduringFY2023

despitestilrecordinganetlosposition.However,theGroupfacedchalengesas

aresultofthechangesinthecustomers’spendingandchalengingmarket

environment,evidencedbythedeclineinper-capitaspendingandweaksecondary

consumptionoftheGroup’scustomers.TheGroupmaintainedastablelevelof

revenueduringFY2024;however,thenetlosoftheGroupincreasedfrom

LETERFROMTHEINDEPENDENTFINANCIALADVISER

aproximatelyRMB181.9milioninFY2023toaproximatelyRMB749.5milion

inFY2024.TherewasalsoasignificantincreaseintheGroup’snetdebtoequity

ratiofromaproximately182.53%asat31December2023toaproximately

337.63%asat31December2024.WealsonotedthatheGroup’slevelofcashand

cashequivalentsdecreasedfromaproximatelyRMB1.7bilionasat31December

2023toaproximatelyRMB64.7milionasat31December2024,representinga

morethan90%decrease.Furtherdetailsofouranalysisonthefinancialinformation

oftheGrouparesetoutinthesectionheaded“1.2Financialinformation”ofthis

leterabove.

Asilustratedinthesectionheaded“6.FinancialefectsoftheSubscription”

ofthisleterbelow,theSubscriptionisexpectedtoimprovethefinancialpositionof

theGroup.Inparticular,thenetdebtoequityratioisexpectedtodecreasefrom

aproximately337.63%asat31December2024toaproximately100.56%asifthe

Subscriptionhadbencompletedon31December2024.

b.BusinesdevelopmentoftheGroup

TheGroupisengagedinthemeparkbusines.Aflagshiproject,Zhengzhou

HaichangOceanPark,openedinthesecondhalfof2023andtheGroupownedand

operatedseventourismandleisureprojectsasathendof2024.TheGroupisalso

developingitsOASbusinesandIP(s)operations(beingtheoperationand

comercializationofIPproduct),whichelpstheGrouptobuildanaset-light

operationthroughOASandevelopitsbusinesmodelof“IP+tourism&leisure”

(beingtheintegrationofhigh-qualityIPsintoleisureactivities,usingthemeparks

astrafichubstoenhancevisitorexperiencesandriverevenuethroughdiverse

consumptionoptions).Thesetwonewbusinesegmentswilbethenewenginefor

theGroup’sfuturedevelopment.TheGroupwilcontinuetodevelopitstheme

parks,andwilalsoworktowardsadvancingitsOASbusinesandintroducing

internationalyrenownedIPstoempowertheoperationofthemeparksandOAS

busines.Forexample,theGroupisworkingonthedevelopmentof,amongothers,

itsBeijingHaichangOceanParkProject(curentlyatconstructionstage,expected

completioninthesecondhalfof2027),FuzhouHaichangOceanParkProject

(curentlyatplaningstage,expectedcompletionin2028),NingboandSaudi

ArabiaHaichangOceanParkProject(bothcurentlyatearlyplaningstage).Under

suchprojects,theGroupiscoperatingwithitsbusinespartners,whowilmake

necesarycapitalinvestment,suchaslandacquisitionandpropertydevelopment,

whiletheGroupisresponsibleforoperationsandmanagementoftheprojects.

Acordingly,theManagementexpectsthatheinvestmentsintheaforesaidnew

projectswouldbesignificantlylowerthanGroup’spreviousaset-heavymodel

projects.ApartfromtheuseofnetprocedsfromtheSubscription(detailsofwhich

aresetoutinthesub-sectionheaded“(iv)useofproceds”below),asadvisedby

theManagement,thereisnoaditionalfinancingdemandbasedoncurent

estimation.TheGroupwilonlyagretojointlycomencethedesignand

developmentoftheprojectwithitsbusinespartnersafterenteringintolegaly

LETERFROMTHEINDEPENDENTFINANCIALADVISER

bindingcoperationagrementswhichclearlystipulatetheGroup’sexclusive

operatingrights,andobtainserviceincomeintheproces.Asadvisedbythe

Management,thebusinespartnerschosetocoperatewiththeGroupmainlydueto

itsbrandandoperationalcapabilities,andacordinglyagredtoensurethathe

Groupwilbecomethexclusiveoperatorinthefuturethroughthexecutionof

suchagrements.

AsadvisedbytheManagement,thepartnershipbetwentheCompanyand

Sunriver(beingtheparentcompanyoftheSubscriber)aimstocreateasynergistic

efectbycomplementingproductforms,cordinatingregionalayouts,sharing

customeradvantages,anditeratingbusinesmodels.ThecombinationoftheGroup’s

marinecontentandIPoperationandSunriver’sleisurevacationexperienceswil

facilitatecros-conversionofoflinecustomergroupsandcovervisitorsofalages

andiferentconsumptionscenarios.

c.Marketandindustrydevelopment

TourismandleisureindustryinChinawasafectedinrecentyearsasaresult

oftheCOVID-19pandemicandrecoveredfolowingtheasingofepidemic

preventionandcontrolmeasuresin2023.Themarketstilfacesuncertaintiesunder

theaforesaidcomplicatedexternalmarketenvironment.Ontheotherhand,Chinese

governmentheighteneditsfocusonculturalandtourismconsumption.Asadvised

bytheManagement,since2024,fromtheSmartTourismInovationand

DevelopmentActionPlan(《智慧旅游创新发展行动计划》)totheOpinionson

PromotingHigh-QualityDevelopmentofServiceConsumption(《关于促进服务消

费高质量发展的意见》)aspublishedbythePRCgovernment,aseriesofpolicies

haveformedamulti-prongedstrategyof“bostingdemand+inovatingsuply+

optimizingenvironments”whichencouragesupgradeoftourismfacilities,

developmentofsmartourismenterprisesandthespendingintourism.Asetoutin

thesectionheaded“5.REASONSFORANDBENEFITSOFTHESUBSCRIPTION

ANDUSEOFPROCEDS”oftheBoardLeter,asthePRCgovernmentplaces

“vigoroustimulationofconsumption”athetopofitsagendandrolsoutaseries

ofconsumption-stimulatingpoliciesin2023to2025suchastheNoticefor

RestoringandExpandingConsumption*《关于恢复和扩大消费的措施》,Opinions

onPromotingHigh-QualityDevelopmentofServiceConsumption*(《关于促进服

务消费高品质发展的意见》),NoticeoftheSeveralMeasuresforFurtherFostering

NewGrowthPointsandPromotingCulturalandTourismConsumption*《关于进一

步培育新增长点繁荣文化和旅游消费的若干措施》andSpecialInitiativestoBost

Consumption*(《提振消费专项行动方案》),thesepoliciesnotonlyhelprestore

consumerconfidenceandspendingpower,butalsoinvigoratetourismconsumption,

furtherunderscoretheimportantroleofcultural-tourismconsumptionindriving

high-qualityeconomicdevelopment,andprovideasolidpolicyfoundationandvast

marketspaceforthefuturegrowthofthecultural-tourismindustry,theindustryin

whichtheGroupoperates.

LETERFROMTHEINDEPENDENTFINANCIALADVISER

WehavealsoperformedresearchonChinesetourismrelatedata.Basedon

informationanouncedbytheMinistryofCultureAndTourismofthePRC(中华人

民共和国文化和旅游部),thenumberofdomestictouristsin2024reached5.615

bilion,aYOYincreaseof14.8%overthesameperiodlastyear.Thetotalspending

ofdomestictouristswasRMB5.75trilion,ayear-on-yearincreaseof17.1%over

thepreviousyear.SetoutbelowisdataofdomestictouristsinthePRCindiferent

holidayperiodsin2025:

Numberof

domestictourists

Spendingof

domestictourists

Number

YOY

increaseAmount

YOY

increase

SpringFestival501milion5.9%RMB677.0bilion7.0%

ChingMing

Festival126milion6.3%RMB57.5bilion6.7%

LabourDay314milion6.4%RMB180.3bilion8.0%

TuenNgFestival119milion5.7%RMB42.7bilion5.9%

Source:MinistryofCultureAndTourismofthePRC(中华人民共和国文化和旅游部)

Ourview

Againsthebackdropoftheabovefactors,includingbutnotlimitedto(i)the

deteriorationintheGroup’sprofitabilityinFY2024;and(i)thesignificantincrease

intheGroup’snetdebtoequityratioandsignificantdecreaseintheGroup’slevel

ofcashandcashequivalentsinFY2024,theManagementconsidersthatheGroup

nededtoraisefundstoimproveitsliquiditypositionandtosuporthefuture

developmentofitsbusineses.WhiletheGrouphasalreadytakeninitiativesto

improveitsbusinesandoperations,includingbutnotlimitedtothedevelopmentof

OASbusinesandIP-operations,suchinitiativeswiltaketimetoimplementand

bringinefects.Ontheotherhand,withtheintroductionofdiferentpoliciesbythe

Chinesegovernmentandtheimprovementindomestictourism,theCompany

considersthathereisasolidpolicyfoundationwhileunlockingvastmarket

potentialfortheGroup’sfuturedevelopment.Wealsonotedthathetourismarket

ofthePRChadimprovedinFY2024asevidencedbytheincreaseinumberand

spendingofdomestictourists.However,suchincreasesdidnotranslateintoa

corespondingincreaseintheGroup’srevenueduringFY2024asaresultofthe

deteriorationinliquiditypositionoftheGroupandtheloweraveragefelevelofthe

ZhengzhouParkinthearlystageofoperation.Despitefacingshort-termliquidity

constraintsandprofitabilitypresures,theGroupmaintainsasteadfaststrategic

confidenceinthefuturedevelopmentprospectsofChina’stourismindustry.The

Companyisalsoftheviewthatoseizethecurentwindowofoportunity,

facilitatingimediatecapitalinflowthroughtheisuanceofnewsharestointroduce

LETERFROMTHEINDEPENDENTFINANCIALADVISER

anewcontrolingshareholderisrequired.Havingtakenintoacountourabove

analysis,wearealsofaviewthatheGroupwasinanedtoraisefundstoimprove

itsfinancialpositionandtocapturetheindustrytrendtofurtherdevelopits

busineses.

(i)BackgroundoftheSubscriberandSunriver

Asetoutinthesectionheaded“2.InformationontheSubscriberandSunriver”of

thisleterabove,theSubscriberiscontroledbySunriverwhichfocusesoninvestingin

andoperatingmultiplecompanieswithintheculturaltourismsector.Wenotedthat

SunriveristheactualcontroleroftwolistedcompaniesontheShanghaiStockExchange,

namelyZhejiangSunriverandAnhuiGourgen.BothZhejiangSunriverandAnhui

GourgenrecordednetprofitforFY2024,andZhejiangSunriverisprincipalyengagedin

tourismserviceswhileAnhuiGourgenisprincipalyengagedinconstructionservices.We

havediscusedwiththeManagementandtheybelievethatwiththextensivexperience

andresourcesofSunriverintheindustry,theSubscriptionwouldenabletheCompanyto

furtherleverageitscoreadvantagesinoceaniculturalresourcesandmatureoperation

management,andcontinuetostrengthenitsbusinesesuchasthemeparkoperation,so

astodevelopintoamorecomprehensivetourism-culturalenterprise.

(i)FutureintentionsoftheSubscriberegardingtheGroupandreasonsforthe

Subscriber’sSubscription

Asetoutinthesectionheaded“2.4FutureintentionsoftheSubscriberegarding

theGroup”ofthisleterabove,theSubscriberintendstocontinuethexistingprincipal

businesesoftheGroup,andsaveforthepersonelchangesdisclosedinthesection

headed“10.ProposedChangeinBoardComposition”oftheBoardLeter,theSubscriber

hasnointentiontointroduceanymajorchangestothexistingoperationandbusinesof

theCompany.Wealsonotedfromthesectionheaded“9.FUTUREINTENTIONSOF

THESUBSCRIBEREGARDINGTHEGROUPANDREASONSFORTHE

SUBSCRIBER’SUBSCRIPTION”oftheBoardleterthatheSubscribersharesthe

viewoftheDirectorsregardingthereasonsforandbenefitsoftheSubscription.The

Subscriberalsohaseveraladitionalconsiderationsincluding(a)ireplaceableunique

advantagesposesedbytheCompanyintheindustry,suchasthesevenculturaltourism

projectsthemedaroundmarinecultureinmajorcentralandtouristcitiesandthathe

Companywastheworld’sfirsthemeparkoperatortobringtheinternationalIP

“Ultraman”tolifeinareal-worldentertainmentseting,demonstratingoutstanding

productinovationcapabilities;(b)curentvaluationoftheCompanyisatalowpoint

withighcertaintyofinvestmentreturns;(c)high-qualityindustryoperationsand

managementcapabilities;and(d)synergyefectsbetwentheGroupandSunriver.

LETERFROMTHEINDEPENDENTFINANCIALADVISER

(iv)Useofproceds

ThegrosprocedsandnetprocedsfromtheSubscriptionarexpectedtobe

aproximatelyHK$2,295milionandHK$2,284milionrespectively.TheDirectors

considerthecertaintyandtimelinesofthiscapitalraisetobeimportantandthiscapital

isintendedtosuportheCompany’songoingoperations,businesdevelopment,and

financialflexibility.TheprocedsfromtheSubscriptionwilalsoprovidetheCompany

withmuch-nededliquiditytosuportdailyoperations,replenishworkingcapital,

promotethedevelopmentofitscorebusines,andrepaypartofitsexistingdebts.This

imediatecapitalinjectioniscriticalforstabilizingtheCompany’sfinancialpositionand

suportingitsongoingbusinesdevelopment.

TheBoardintendstoaplythenetprocedsfromtheSubscriptionasfolows:(i)

20%wilbeusedtosuporthedailyoperationsoftheGroupandreplenishworking

capital,(i)40%wilbeusedtopromotethedevelopmentoftheCompany’scorebusines

(includingthemeparkoperations,OASandIP),withsuchinitiativesexpectedtobe

completedwithin1to2years,and(i)40%wilbeusedtorepaypartofthexisting

debts,ofwhich30%wilbeapliedtowardsrepaymentofprincipalandinterestobanks

andfinancialinstitutions,and10%wilbeusedtosetlepayablestosupliersand

project-relatedebts.Thisrepaymentisexpectedtobecompletedwithin1to2years.

WehavediscusedwiththeManagementandunderstandthatheCompany’s

developmentofthecorebusineseswilinclude.

ThemeParkOperations:

TheCompanyintendstocontinuethedevelopmentofPhaseIofthe

Zhengzhouproject,whichisexpectedtocomenceoperationsin2026,aswelas

theupgradeandrenovationofotherprojectsundertheGroup.Theseupgradeswil

includetheintroductionofvariousleadingdomesticandinternationalIPsinto

imersivein-parkentertainment,therenovationofthemehotels,upgradestofod

andbeverageandretailfacilitiesbothinsideandoutsidetheparks,enhancementsto

suportingservicefacilities,theintroductionoflargesignatureridesandatractions,

andthedevelopmentofsmartparksystems.

OAS:

Underthisbusinesmodel,theCompany’sbusinespartnersareresponsible

formajorcapitalexpenditures,suchaslandacquisitionandpropertydevelopment,

whiletheCompanyisresponsibleforoperationsandmanagement.Toensurethe

atractivenesofitsprojectsandmaintainlong-termcoperativerelationshipswith

partners,theCompanynedstoinvestinpre-openingpreparationsandoperations.

ThePhaseIprojectinShanghaihascompleteditsmainstructuralcapingandis

scheduledtopenin2026.TheBeijingprojecthascomencedconstructionandis

scheduledtopenin2027.Fuzhou,Nanjing,Ningbo,SaudiArabiandother

projectsarealsoundercontinuousplaningandreservexpansion.

LETERFROMTHEINDEPENDENTFINANCIALADVISER

IPOperation:

Inaditiontoitself-operatedparks,theCompanyhasucesfulyintroduced

UltramanIP-themedpavilionstothird-partydestinations,suchastheDalianForest

Zo,andhasalreadylaunchedIP-themedstoresinshopingmals.TheCompany

planstoselecthigh-qualitycomercialpropertiesandsceniclocationsnationwide

torapidlydeploycorespondingIPproducts.TheseproductformatsincludeIP

hotels,IP-themedpavilionsandstores.Thegoalistocontinuouslyexpandbrand

influenceandscaleuptheIPbusinesinthePRC.

Ourview

Asetoutabove,thenetprocedsfromtheSubscriptionwilbeusedasto20%

forsuportingtheGroup’sdailyoperation,40%forbusinesdevelopmentofthe

Groupand40%forepaymentofdebts.Asdiscusedinthesectionheaded“1.2.

Financialinformation”above,theGroupfacedeteriorationinprofitabilityliquidity

inFY2024,inparticular,theGrouphadrecordedanincreaseofaproximately

275.00%inlosatributabletownersoftheCompanyinFY2024anda

deterioratingnetdebtoequityratiofaproximately337.63%asat31December

2024.WeagrewiththeManagementhatnetprocedshavetobeusedtosuport

theGroup’sdailyoperationsandtorepaydebtstoimprovetheGroup’sfinancial

position.Also,asmentionedinthesub-sectionheaded“(i)Fundraisingnedsofthe

Group”above,theGroupalsonedsfundstocapturetheindustrytrendtofurther

developitsbusineses.BasedonourdiscusionwiththeManagementandthe

analysisontheuseofprocedsasetoutabove,wealsoconcurwiththe

ManagementhatitisapropriatefortheGrouptoutilisepartofthenetproceds

fromtheSubscriptioninbusinesdevelopmentoftheGroupasmentionedabove.

(v)Otherwaysofinancing

WehavealsodiscusedwiththeManagementandunderstandthatheyhave

consideredotherwaysofinancingbeforearivingatheSubscription.Asetoutinthe

sectionheaded“5.REASONSFORANDBENEFITSOFTHESUBSCRIPTIONAND

USEOFPROCEDS”oftheBoardLeter,despitemakingin-depthatemptsinthe

folowingareas,thesefortshavenotbensucesfulyimplementedpriortothe

Subscriptionduetobjectiveconditions:

a.Syndicatedloanrestructuringnegotiations:Throughout2024,theCompany

engagedinmultipleroundsofcomunicationandrestructuringnegotiations

withthememberbanksoftheoriginalShanghaiprojectsyndicateregarding

existingloanarangements.However,duetotheCompany’shighoveraldebt

ratio,thesyndicateremainedcautiousaboutheloanriskexposurepost-

restructuringfornon-state-ownedenterprises;

LETERFROMTHEINDEPENDENTFINANCIALADVISER

b.ExplorationofpublicREITsisuance:TheCompanyalsoexploredthe

feasibilityofisuinginfrastructureREITsforcertainmatureculturaland

tourismasets,aimingtorevitalisequalityasetsandbroadenfinancing

chanels.Duringthevaluationproces,itwasfoundthatherelevant

suportingpoliciesarestilbeingrefined,andtheculturalandtourismprojects

havenotyetestablishedamarket-recognisedvaluationsystemintermsofaset

pricing,leasestability,andcashflowpredictability.TheCompanyconcluded

thathecurentconditionsarenotmaturenoughandultimatelydecidednot

toprocedwiththepublicisuance;

c.Equitytransfer:TheCompany’scontrolingshareholderengagedin

preliminarynegotiationstotransfercontrolingrightstoawel-known

domesticulturalandtourismgroup,intendingtoleverageitsbrand,capital,

andresourceadvantagestoenhancetheCompany’soveralcompetitivenes.

However,afteranin-depthasesmentoftheCompany’soperatingconditions

andcapitalneds,thepotentialinvestordeterminedthatmerelytransfering

equitywouldnotprovidesubstantialincrementalcapitalsuportandwouldnot

fundamentalyresolvetheCompany’scurentcapitaldificulties;

d.Introductionofstrategicinvestorsthroughconvertiblebonds:TheCompany

alsodiscusedstructuralfinancingplansforisuingconvertiblebondswith

somepotentialinvestors,aimingtointroducemedium-tolong-termstrategic

shareholders.However,aftermultipleroundsofevaluationandnegotiations,

therelevantpartiesconcludedthathescaleoftheconvertiblebondswouldnot

suportheCompany’sustainabledevelopmentforthenextfewyears;and

e.Rightsisue/openofer:Arightsisueoropenofer,bothofwhichrequire

existingshareholderstoinjectaditionalcapital,maynotbesucesfulif

shareholdersareunwilingorunabletosubscribefornewShares.The

Companyrecognizedthat,givenitshighoveraldebtratioandrecentfinancial

performance,therewasasignificantriskthatarightsisueoropenoferwould

notbefulysubscribed,potentialyleavingtheCompanywithinsuficientnew

capitalandaweakenedshareprice.

OurviewonthereasonsforandbenefitsoftheSubscription

Takingintoacountheabove,inparticularthat(1)theSubscriptionwilbringin

fundingsfortheGrouptoimproveitsworkingcapital,reducefinancialcostsandsuport

theCompanyincontinuingtoadvancetheupgradingandtransformationofitsexisting

projectsandenhancingparkoperatingeficiencies;(2)theSubscription,wilintroducea

newcontrolingShareholder,whichwilefectivelyprovidetheCompanywithaditional

strategicdevelopmentresources;(3)thebenefitstobebroughtintotheGroupwiththe

expectedusageofprocedsasdiscusedabove,weconsiderthatalthoughthe

SubscriptionisnotintheordinaryandusualcourseofbusinesoftheGroup,itisinthe

interestsoftheCompanyandtheShareholdersasawhole.

LETERFROMTHEINDEPENDENTFINANCIALADVISER

4.PrincipaltermsoftheSubscription

SetoutbelowaretheprincipaltermsandconditionsoftheSubscriptionAgrement,

detailsofwhicharesetoutinthesectionheaded“2.THESUBSCRIPTIONAGREMENT”

oftheBoardLeter:

Date

2June2025

Parties

(1)Isuer:TheCompany;and

(2)Subscriber:SunriverStaryseaTourism(Cayman)Co.,Ltd.

(3)Sunriver:SunriverHoldingGroupCo.,Ltd.(祥源控股集团有限责任公司)

TheSubscriberanditsultimatebeneficialownerareindependenthirdpartiesnot

conectedwiththeCompanyanditsconectedpersons(asdefinedintheListingRules).

TheSubscriptionShares

TheSubscriberhasconditionalyagredtosubscribeforandtheCompanyhas

conditionalyagredtoalotandisue5,100,000,000newSharesatheSubscriptionPrice

ofHK$0.45perSubscriptionSharetotheSubscriber,withanagregateconsiderationof

HK$2,295,000,000payablebytheSubscribertotheCompanyuponCompletion.The

SubscriptionShareshalbealotedandisuedpursuantotheSpecificMandatetobe

obtainedfromtheIndependentShareholdersatheEGM.TheSubscriptionShareswil

rankparipasuinalrespectswiththeSharesinisueasathedateofalotmentandisue

oftheSubscriptionShares.

TheSubscriptionSharesrepresents(i)aproximately62.85%ofthexistingisued

sharecapitaloftheCompanyasathedateoftheSubscriptionAgrement;and(i)

38.60%oftheisuedsharecapitaloftheCompanyasenlargedbythealotmentandisue

oftheSubscriptionShares.TheagregatenominalvalueoftheSubscriptionSharesis

US$255,000.

TheSubscriptionPrice

TheSubscriptionPriceisHK$0.45perSubscriptionShare.Furtherdetailsofour

analysisoftheSubscriptionPrice,includingbutnotlimitedtocomparisonbetwenthe

SubscriptionPriceandmarketprice,aresetoutinthesectionheaded“5.Analysisofthe

SubscriptionPrice”ofthisleterbelow.

LETERFROMTHEINDEPENDENTFINANCIALADVISER

Conditionsprecedent

CompletionoftheSubscriptionshalbeconditionaluponsatisfaction(orwaiver)(if

aplicable)ofthefolowingconditions:

(a)theListingComiteoftheStockExchangegrantingthelistingof,and

permisiontodealin,theSubscriptionShares(eitherunconditionalyor

subjectoconditionswhichareaceptabletobothparties);

(b)theExecutivegrantingtheWhitewashWaiver,andtheWhitewashWaivernot

beingrevokedorwithdrawn;

(c)theSubscriberandtheCompanyhavingcompletedinternaldecision-making

proceduresandobtainedinternalaprovals(includingbutnotlimitedtoboard

aprovalsandthepasingofthenecesaryresolutionsathedulyconvened

EGMby(i)theIndependentShareholderstoaprovetheSubscription

AgrementandthetransactionscontemplatedthereunderandtheWhitewash

Waiver;and(i)theShareholderstoaprovetheIncreaseinAuthorisedShare

Capital),inacordancewithaplicablelaws,regulations,andinternalrulesfor

theSubscription,theWhitewashWaiverandtheIncreaseinAuthorisedShare

Capital;

(d)theSubscriberandtheCompanyhavingobtainedalrelevantregulatory

aprovalsfortheSubscription,i.e.,theclearancefromtheExecutiveandthe

StockExchangeinrespectoftheshareholders’circulartobedespatchedforthe

purposeof,interalia,theSubscription;

(e)theSubscriberhavingcompletedthenecesaryexternalaprovalprocedures

forthefundsrequiredfortheSubscriptionandmadearangementsforthe

deliveryoftheSubscriptionSharesinHongKong,includingbutnotlimitedto

completingthenecesaryODI(OverseasDirectInvestment)aprovals/filings

withtheComisionofComerce,theDevelopment&ReformComision

andtheStateAdministrationofForeignExchange(asaplicable)inthePRC;

(f)theCompanyhavingobtainedconsentfrombanksandothermajorfinancial

institutions,aswelasrelevantgovernmentdepartments,orhavingfulfiled

notificationobligations(ifaplicable)regardingtheSubscription;andthe

Companyhavingobtainedwritenwaiversfromrelevantparties(ifaplicable)

toensurethathenormalconductoftheCompany’sexistingbusineswilnot

beafected,includingbutnotlimitedtoconsentsandwaiverstobeobtained

frombanks,financialinstitutions,andgovernmentauthoritiestopreventa

breachofchange-of-controlprovisionsundercertainloanagrementsand

projectagrements,aswelasnotificationtotheCompany’sbusinespartners

undercertainoperatingcontractsinrespectofthechange-of-control;and

LETERFROMTHEINDEPENDENTFINANCIALADVISER

(g)theSubscriberhavingcompletedthefilingoftheconcentrationsof

undertakingsofthePRCundertheSubscriptionAgrementotheState

AdministrationforMarketRegulation(ifrequired),andtheCompanyhaving

confirmedthatitwilprovideasistance.

Conditions(a)to(e)and(g)canotbewaivedandcondition(f)canbewaivedby

SunriverandtheSubscriber.Iftheaboveconditionsprecedentarenotsatisfiedorwaived

(ifaplicable)onorbeforetheLongStopDateorsuchlaterdateasmaybeagredamong

thepartiesinwriting,theSubscriptionAgrementwilbeterminatedandneitherpartyto

theSubscriptionAgrementmayhaveanyclaimagainsteachothersaveforantecedent

breaches.Therefore,amongotherthings,iftheWhitewashWaiverisnotgrantedbythe

ExecutiveoraprovedbytheIndependentShareholdersatheEGM,theSubscriptionwil

notproced.

AsatheLatestPracticableDate,condition(d)andtheboardaprovalsrequirement

undercondition(c),andtheconcentrationofundertakingsfilingrequirementunder

condition(g)havebensatisfied,whileconditions(a)and(b),aswelastheIndependent

Shareholders’andShareholders’aprovalsundercondition(c),havenotyetben

satisfied.TheODIaprovals/filingsundercondition(e)arebeingreviewedbythe

relevantPRCauthorities.TheSubscriberhasbeninregularcontactwiththerelevant

PRCauthoritiestofolowupontheaprovalstatus.AsatheLatestPracticableDate,the

Subscriberisintheprocesofpreparingsuplementaldocumentsbasedonthefedback

receivedandwilarangetosubmithemasonasposible.Baringanyunforesen

circumstances,theSubscriberdoesnotexpectanyimpedimentinobtainingtheseODI

aprovals/filings.BasedonitscomunicationwiththerelevantPRCauthorities,itis

expectedthatcondition(e)wilbefulfiledbythendofAugust.

Inrelationtocondition(f),theSubscriptionaimstoimproveliquidityandpursue

high-quality,sustainabledevelopment,whichwilbenefitheCompany’sfuturestable

operationsandperformancegrowth.Theinterestsofbanksandgovernmentinstitutions

havebenfulysafeguarded.AsatheLatestPracticableDate,theCompanyhad

requestedandcontinuedtocomunicatewiththerelevantpartiestobtainalnecesary

consentsandwaivers.Curently,theCompanyisnotawareofanylegalimpedimentsor

othercircumstancesthatwouldpreventitfromobtainingsuchconsentsorwaiver.

Completion

CompletionshaltakeplaceonthethirdBusinesDayaftersatisfactionorwaiver

(ifaplicable)ofthelastoftheconditionsprecedentotheSubscriptionAgrementorat

suchdateandtimeasagredbytheCompanyandtheSubscriber(the“Completion

Date”).AtCompletion,amongotherthings,(i)theSubscribershalmakefulpaymentof

theconsiderationofHK$2,295,000,000inimediatelyavailablefundsbydirectransfer

totheCompany’sdesignatedbankacount;and(i)theCompanyshalalotandisuethe

SubscriptionSharestotheSubscriber.

LETERFROMTHEINDEPENDENTFINANCIALADVISER

Post-CompletionManagement

AfterCompletion,theCompanyshalcoperateincompletingthechangeinthe

compositionoftheBoardandthereplacementofseniormanagementpersonelofthe

Company.

5.AnalysisoftheSubscriptionPrice

WehaveperformediferentanalysesontheSubscriptionPrice,detailsofwhichareset

outinthisectionbelow.FordetailsofourviewontheSubscription,includingbutnotlimited

totheSubscriptionPrice,pleaserefertothesectionheaded“8.OurviewontheSubscription”

ofthisleter.

5.1.ComparisonoftheSubscriptionPricetomarketprice

AsetoutintheBoardLeter,theSubscriptionPricewasarivedatafterarm’s

lengthnegotiationsbetwentheCompanyandtheSubscriberaftertakingintoacounthe

prevailingmarketpriceoftheSharesandthefinancialconditionoftheGroup.

TheSubscriptionPriceofHK$0.45perSubscriptionSharerepresents:

(i)adiscountofaproximately44.44%totheclosingpriceofHK$0.8100per

ShareasquotedontheStockExchangeontheLatestPracticableDate;

(i)adiscountofaproximately46.43%totheclosingpriceofHK$0.8400per

ShareasquotedontheStockExchangeon2June2025,beingthedateofthe

SubscriptionAgrement(the“LastTradingDay”);

(i)adiscountofaproximately45.12%totheaverageclosingpriceof

aproximatelyHK$0.8200perShareasquotedontheStockExchangeforthe

lastfiveconsecutivetradingdaysuptoandincludingtheLastTradingDay;

(iv)adiscountofaproximately45.32%totheaverageclosingpriceof

aproximatelyHK$0.823perShareasquotedontheStockExchangeforthe

lastenconsecutivetradingdaysuptoandincludingtheLastTradingDay;

(v)adiscountofaproximately41.23%totheaverageclosingpriceof

aproximatelyHK$0.7657perShareasquotedontheStockExchangeforthe

last30consecutivetradingdaysimediatelypriortotheLastTradingDay;

(vi)adiscountofaproximately36.26%totheaverageclosingpriceof

aproximatelyHK$0.7060perShareasquotedontheStockExchangeforthe

last60consecutivetradingdaysimediatelypriortotheLastTradingDay;

LETERFROMTHEINDEPENDENTFINANCIALADVISER

(vi)atheoreticaldilutionefect(asdefinedunderRule7.27BoftheListingRules)

ofadiscountofaproximately17.9167%,representedbythetheoretical

dilutedpriceofaproximatelyHK$0.6895perSharetothebenchmarkedprice

ofaproximatelyHK$0.8400perShare(asdefinedunderRule7.27Bofthe

ListingRules,takingintoacounthehigherof(i)theclosingpriceofthe

SharesasquotedontheStockExchangeonthedateoftheSubscription

AgrementofHK$0.8400perShare;and(i)theaverageclosingpriceofthe

SharesasquotedontheStockExchangeforthefiveconsecutivetradingdays

imediatelypriortothedateoftheSubscriptionAgrementofHK$0.8220per

Share);and

(vi)apremiumofaproximately99.95%totheauditedconsolidatednetasetvalue

perShareatributabletotheShareholdersofaproximatelyHK$0.2251(based

onthelatestpublishedauditedconsolidatednetasetsatributabletothe

ShareholdersofaproximatelyRMB1,722,760,000(equivalento

aproximatelyHK$1,826,126,000)asdisclosedintheanualresultsofthe

Companyasat31December2024and8,114,002,000isuedSharesasathe

dateoftheSubscriptionAgrement).

5.2.Sharepriceperformance

WehavereviewedthedailyclosingpriceoftheSharesasquotedontheStock

Exchangefrom1June2024,beingaproximatelyoneyearpriortothedateofthe

SubscriptionAgrement,uptoandincludingtheLatestPracticableDate(the“Review

Period”).Inperformingouranalysis,weconsiderapropriatetoreviewtheperformance

oftheSharesoveraperiodoftimetoreflectherecentmarketperformance,andathe

sametimeavoidingatolongperiodwhichmaynotbemeaningfulforarivingatour

conclusionasathedateofthisleter.WeconsiderthatheReviewPeriodof

aproximatelyoneyearepresentsanapropriateperiodoftimetoprovideageneral

overviewontherecentmarketperformanceoftheShares,andisuficientoprovidea

meaningfulanalysis.ThecomparisonofdailyclosingpriceoftheSharesandthe

SubscriptionPriceisilustratedasfolows

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.1

Jun-24Jul-24Aug-24Sep-24Oct-24Nov-24Dec-24Jan-25Feb-25Mar-25Apr-25May-25Jun-25Jul-25

Historical daily closing price per Share

Closing price of the SharesSubscription Price

Subscription Price = HK$0.45

28 March 2025: Date of 2024 anual

results anouncement

2 June 2025: Date of Anouncement30 August 2024: Date of 2024 interim

results anouncement

Source:TheStockExchange’swebsite

LETERFROMTHEINDEPENDENTFINANCIALADVISER

DuringtheReviewPeriod,thehighestandlowestclosingpricesoftheSharesas

quotedontheStockExchangewereHK$1.01recordedon7October2024andHK$0.40

recordedon28November2024respectively,andtheaverageclosingpriceoftheShares

wasaproximatelyHK$0.69.

TheclosingpriceoftheSharesfluctuatedbetwenHK$0.68andHK$0.77sincethe

startoftheReviewPeriodfrom3June2024to23September2024.Afterthat,theclosing

priceofSharesincreasedsharply,reachingthepeakatHK$1.01on7October2024.From

8October2024to28November2024,theclosingpriceofShareswasonageneral

decreasingtrend,reachingthelowatHK0.40on28November2024.Asadvisedbythe

Management,theaforesaidmovementoftheclosingpriceoftheSharesfromlate

September2024tolateNovember2024isgeneralyinlinewiththeoveralstockmarket

performanceinHongKong.Sincethen,theclosingpriceoftheShareshowedageneral

increasingtrendagain,reachingHK$0.88on17April2024.Duringtheperiodfrom22

April2025to2June2025,beingthedateoftheSubscriptionAgrement,theclosingprice

oftheSharesfluctuatedbetwenHK$0.65andHK$0.85.

Duringthe283tradingdaysintheReviewPeriod,theSubscriptionPricewaslower

thantheclosingpriceoftheSharesin274tradingdays.

5.3.Comparisonwithothercomparabletransactionsandcomparablecompanies

Comparabletransactions

Aspartofouranalysis,wehavesearchedonthewebsiteoftheStockExchange

toidentifytransactionsinvolvingsubscriptionofnewsharesbynewinvestor(s)

underspecificmandateforcashwithwhitewashwaiveraplication(excluding

transactionswhichwereterminated/lapsed,transactionsbyprolongedsuspension

companywithtradingsuspendedformorethanthremonthsathetimeofthe

subscriptionagrement,andtransactionsinvolvingnon-StockExchangelisted

securities)whichwereanouncedbycompanieslistedontheStockExchange(the

“ComparableIsues”)duringtheperiodfrom3June2024upto2June2025,being

aperiodofoneyearpriortoandincludingthedateoftheSubscriptionAgrement.

Weconsiderthatheselectionperiodofoneyearisfairandreasonabletoidentify

ComparableIsuesconductedbyothercompaniesundersimilarmarketconditions.

Nevertheles,wecouldonlyidentifytwotransactionswhichmethesaidcriteria.

Giventhesamplesize,weconsiderthathecomparabletransactionsanalysisis

impracticableinthiscase.

LETERFROMTHEINDEPENDENTFINANCIALADVISER

Comparablecompanies

Asmentionedearlier,theCompanyisprincipalyengagedinthethemepark

busines.WeconsiderthatananalysisoftheSubscriptionPricebasedoncompanies

comparabletotheCompanywilbemeaningfultotheIndependentShareholdersas

suchanalysiswildemonstratehowtheSubscriptionPricecomparedtothepricing

ofothercompaniescomparabletotheCompany.

Inviewoftheabove,weconductedaresearchtoidentifycompanieswhich(a)

arelistedontheStockExchange;and(b)generated50%ormoreoftheirevenue

fromtheoperationofamusementparkand/orthemeparkrelatedfacilitiesinthe

PRCbasedoninformationavailablefromtheirlatestpublishedanualreport.For

thepurposeofouranalysis,wehavexcludedcompanieswhicharesubjectofer

and/orunderestructuringandprolongedsuspensioncompanieswithtrading

suspendedformorethanthremonthsasatheLatestPracticableDateasthetrading

pricesofsuchcompanieswouldhavebenafectedbythexistenceofaposible

transactionormaynotrepresenthelatestsharepricesofsuchcompaniesunder

regulartradingbythepublic.Basedontheabovecriteria,wehaveidentifiedone

comparablecompany(the“DirectlyComparableCompany”),namelyChina

TravelInternationalInvestmentHongKongLimited(stockcode:308).Detailsof

thecomparisonoftheSubscriptionPricewiththetradingmultiplesoftheDirectly

ComparableCompanyaresetoutinthisectionbelow.

InaditiontotheDirectlyComparableCompany,weconsiderthatitisalso

meaningfultoperformouranalysisontheSubscriptionPricewithlistedcompanies

thatarelistedonotherdevelopedmarketsotherthantheStockExchange.Inthis

regard,wehavextendedourabovementionedsearchcriteriatocoverlisted

companiesindevelopedmarketswhichgenerated50%ormoreoftheirevenue

fromtheoperationofamusementparkand/orthemeparkrelatedfacilitieswithout

limitationonthegeographicsegmentation,andwehaveidentifiedfouraditional

comparablecompanies(the“IndirectlyComparableCompanies”,togetherwith

theDirectlyComparableCompanies,the“ComparableCompanies”).Althoughthe

IndirectlyComparableCompaniesarelistedondiferentstockmarketsandmay

havediferentprincipalplacesofbusineseswithdiferentclientbase,weconsider

suchanalysistobemeaningfulfortheIndependentShareholdersas(a)theIndirectly

ComparableCompaniesarengaginginthesameindustrywithsimilarbusines

modeloftheCompany;(b)theIndirectlyComparableCompaniesarelistedonother

developedmarketsandthathetradingmultipleswouldbeabletodemonstratethe

pricingbypublicinvestorsinsuchdevelopedmarketsoncompaniescomparableto

theCompany;and(c)itwilbeabletoprovidetheIndependentShareholderswith

informationabouthowtheSubscriptionPricecomparestothepricingofcompanies

engaginginthesameindustryandsharingsimilarbusinesmodels.

LETERFROMTHEINDEPENDENTFINANCIALADVISER

TheComparableCompanieslistedinthisectionbelowisanexhaustivelist

basedonourabovementionedselectioncriteriandrepresentafairand

representativelistofComparableCompaniesforthepurposeofouranalysis.We

considerthatouranalysisontheSubscriptionPricebasedontheComparable

CompaniesisapropriatetoprovidetheIndependentShareholderswithapropriate

informationfortheasesmentontheSubscriptionPrice,havingconsideredthat(a)

comparisonwiththeDirectlyComparableCompanyprovidesthebasisforthe

IndependentShareholderstoasestheSubscriptionPricewithreferencetopricing

ofcompanythatisdirectlycomparabletotheCompany,withoperationandplaceof

listingthesameasthoseoftheCompany;and(b)inclusionoftheIndirectly

ComparableCompaniesalowstheanalysistobemorecomprehensivewithout

placingtomuchweightonjustonesingleDirectlyComparableCompany,while

thetradingmultiplesoftheIndirectlyComparableCompanieswouldprovidethe

IndependentShareholderswithinformationabouthepricingofcompaniesengaging

inthesameindustrywithsimilarbusinesmodelbypublicinvestorsinother

developedmarkets.

InasesingthefairnesandreasonablenesoftheSubscriptionPrice,wedid

notconsidertheprice-to-earningsratioastheGrouprecordednetlosatributable

townersoftheCompanyforthepasthreyearsinFY2022toFY2024.Instead,

wehavecomparedbetwentheprice-to-bokratio(“P/BRatio”)andtheprice-to-

salesratio(“P/SRatio”),whicharecomonlyadoptedtradingmultiplesfor

analysis,oftheGroupimpliedbytheSubscriptionPriceagainsthoseofthe

ComparableCompanies.ThecomparisonoftheP/BRatioandtheP/SRatiofthe

Company(asimpliedbytheSubscriptionPrice)withthoseoftheComparable

Companiesisetoutbelow.

ComparableCompanies

(stockcode)Principalbusines

Locationof

principal

businesP/BRatioP/SRatio

(Note1)(Note1)(Note2)(Note2)

ChinaTravelInternational

InvestmentHongKong

Limited(308)

Operationoftourism

atractionandrelated

busines

HongKong

and

Mainland

China

0.632.18

UnitedParks&ResortsInc.

(NYSE:PRKS)

Themeparkand

entertainmentbusines

UnitedStates

ofAmerica

N/A

(note3)

1.70

SixFlagsEntertainment

Corporation(NYSE:

FUN)

Themeandwaterpark

operation

UnitedStates

ofAmerica

1.730.93

CoastEntertainment

HoldingsLtd.(ASX:

CEH)

Operationofleisureand

entertainmentfacilities

Australia0.671.80

LETERFROMTHEINDEPENDENTFINANCIALADVISER

ComparableCompanies

(stockcode)Principalbusines

Locationof

principal

businesP/BRatioP/SRatio

(Note1)(Note1)(Note2)(Note2)

SimLeisureGroupLtd.

(SP:UR)

Design,contracting,

management,planingand

operationofthemeand

waterparks

Malaysiand

SaudiArabia

3.012.09

Maximum3.012.18

Minimum0.630.93

Average1.511.74

TheSubscription1.99

(Note4)

1.89

(Note5)

Notes:

1.BasedoninformationfromtheStockExchange’swebsite,Blombergandanualreports

oftheComparableCompanies

2.TheP/BRatioandP/SRatioftheComparableCompaniesaresourcedfromBlomberg

asatheLatestPracticableDate

3UnitedParks&ResortsInc.recordednetliabilitiesbasedonthelatestpublishedfinancial

reportasatheLatestPracticableDate

4.TheimpliedP/BRatioftheSubscriptioniscalculatedbydividingtheSubscriptionPrice

withtheGroup’snetasetsvalueperShare(ascalculatedbytheGroup’snetasets

atributabletotheownersoftheCompanydividedbythetotalisuedSharesasat31

December2024)

5.TheimpliedP/SRatioftheSubscriptioniscalculatedbydividingtheSubscriptionPrice

withtheGroup’srevenueperShare(ascalculatedbytheGroup’srevenueforFY2024

dividedbythetotalisuedSharesasat31December2024)

6.Figuresaresubjectorounding

TheP/BRatioftheDirectlyComparableCompanyis0.63times,andtogether

withtheIndirectlyComparableCompanies,theP/BRatiosofaltheComparable

Companiesrangefromaproximately0.63timestoaproximately3.01times,with

anaverageofaproximately1.51times.TheimpliedP/BRatioftheSubscription

ofaproximately1.99timesiswithintherangeofP/BRatiosoftheComparable

CompaniesandishigherthantheaverageP/BRatiofthethatoftheComparable

CompaniesandtheP/BRatioftheDirectlyComparableCompany.

TheP/SRatioftheDirectlyComparableCompanyis2.18times,andtogether

withtheIndirectlyComparableCompanies,theP/SRatiosoftheComparable

Companiesrangefromaproximately0.93timestoaproximately2.18times,with

anaverageofaproximately1.74times.TheimpliedP/SRatioftheSubscription

LETERFROMTHEINDEPENDENTFINANCIALADVISER

ofaproximately1.89timesiswithintherangeofP/SRatiosoftheComparable

CompaniesandishigherthantheaverageP/SRatioftheComparableCompanies

butlowerthantheP/SRatioftheDirectlyComparableCompany.

Asetoutabove,theimpliedP/BRatioftheSubscriptionishigherthanthe

P/ERatioftheDirectlyComparableCompanybutheimpliedP/SRatiofthe

SubscriptionislowerthantheP/SRatioftheDirectlyComparableCompany.This

maysugesthatheSubscriptionPricecomparesbeterthanthecurentpricingof

theDirectlyComparableCompanyintermsofP/BRatiobutnotsointermsofP/S

Ratio.WethereforecomparetheimpliedP/BRatioandtheP/SRatiofthe

SubscriptiontotheP/BRatiosandP/SRatiosofaltheComparableCompaniesfor

furtheranalysis.

IntermsofthecomparablewithaltheComparableCompanies,i.e.including

alsotheIndirectlyComparableCompanies,wenotethatheimpliedP/BRatioand

theimpliedP/SRatioftheSubscriptionarealsowithintherangesofthoseofthe

ComparableCompaniesandarehigherthantheaverageP/BRatioandP/SRatiof

theComparableCompaniesrespectively.ThesesugesthatheSubscriptionisnot

underpriced.Asetoutinthesectionabove,weconsiderthatheanalysisincluding

theIndirectlyComparableCompaniesismeaningfulfortheIndependent

Shareholders.WewouldalsoliketodrawtotheatentionoftheIndependent

ShareholdersthatheIndirectlyComparableCompaniesarelistedontheNewYork

StockExchange,theAustralianSecuritiesExchangeandtheSingaporeExchange,

whereinvestorsmayhavediferentatitudestowardsvaluationofcompanies.Inthis

regard,wehavecomparedtheprice-to-earningsratio(“P/ERatio”)ofthemain

indexofthestockexchangeonwhichtheIndirectlyComparableCompaniesare

listedandtheStockExchange,detailsaresetoutbelow:

StockexchangeIndex

P/ERatio

(Note)

TheStockExchangeHangSengIndex12.19

NewYorkStockExchangeNewYorkStockExchange

CompositeIndex

20.17

AustralianSecuritiesExchangeS&P/ASX20021.33

SingaporeExchangeStraitsTimesIndex13.01

Note:TheP/ERatiosaresourcedfromBlombergasatheLatestPracticableDate.

Asetoutinthetableabove,wenotethatheP/ERatiofHangSengIndex

islowerthantheP/ERatiosofalthemainindexoftheotherstockexchangesthat

theIndirectlyComparableCompaniesarelistedon.Webelievethatouranalysison

theSubscriptionPriceagainstheIndirectlyComparableCompanieswouldprovide

amoreprudentresults,andwemaintainourviewthatheSubscriptionisnot

underpricedsincetheimpliedP/BRatioandtheimpliedP/Sratiofthe

LETERFROMTHEINDEPENDENTFINANCIALADVISER

SubscriptionarehigherthantheaverageP/BRatioandP/SRatioftheComparable

Companies(whichincludeboththeDirectlyComparableCompanyandthe

IndirectlyComparableCompanies).OurviewontheSubscription,includingbutnot

limitedtotheSubscriptionPrice,isetoutinthesectionheaded“8.Ourviewon

theSubscriptionPrice”ofthisleter.

6.FinancialefectsoftheSubscription

UponCompletion,thenetprocedsfromthesubscriptionwilberecognisedascashand

cashequivalents.SharecapitaloftheCompanywilalsoincreasebasedonthenumberof

SubscriptionSharesandthenominalvalueoftheSubscriptionShares.Thediferencebetwen

thesubscriptionamountandtheincreaseinsharecapitalwilberecognisedasharepremium

oftheCompany.

(i)Liquidity

UpontheCompletion,theGroup’sworkingcapitalandliquiditypositionswilbe

improvedasthecashandcashequivalentswilbeincreasedbythenetprocedsofthe

SubscriptionofaproximatelyHK$2,295milion(equivalentoaproximately

RMB2,284milion).

(i)Netasetvalue

Acordingtothe2024AnualReport,theGrouphadnetasetsatributabletothe

ownersoftheCompanyofaproximatelyRMB1.72bilionandtotalisuedsharesof

8,114,002,000asat31December2024,representingaperShareamountofaproximately

RMB0.21.AsiftheSubscriptionhadbencompletedon31December2024,thenetasets

atributabletotheownersoftheCompanywouldincreasebytheamountofnetproceds

oftheSubscription,andthenetasetsatributabletotheownersoftheCompanywould

increasetoaproximatelyRMB3.87bilionasat31December2024.Hence,thenetasets

atributabletotheownersoftheCompanyperSharewouldincreasetoaproximately

RMB0.29,basedon13,214,002,000SharesinisueduponCompletion.

(i)Netdebtoequityratio

Asmentionedinthesub-sectionheaded“1.2.2.Financialposition”above,theGroup

hadnetdebtoequityratiofaproximately337.63%asat31December2024.Asifthe

Subscriptionhadbencompletedon31December2024,theGroup’snetasetswould

increasebytheamountofnetprocedsoftheSubscription,andhencethenetdebto

equityratiowouldecreasetoaproximately100.56%.

LETERFROMTHEINDEPENDENTFINANCIALADVISER

7.EfectontheshareholdinginterestsofthepublicShareholders

ThefectsoftheSubscriptionontheshareholdingstructureoftheCompanyaresetout

inthesectionheaded“7.EFECTONTHESHAREHOLDINGSTRUCTUREOFTHE

COMPANY”oftheBoardLeter.AsetoutintheaforesaidsectionoftheBoardLeter,the

Subscriberwilbeinterestedinaproximately38.60%oftheinterestsoftheCompanyupon

completionoftheSubscription.Athesametime,theshareholdinginterestsofthexisting

publicShareholderswouldbedilutedfromaproximately37.53%to23.04%,representinga

dilutionofaproximately14.49percentagepoints,asaresultoftheSubscription.Weareof

theviewthatadilutioninshareholdingofexistingshareholdersisinevitableinequityfund

raising.Inthiscase,theSubscriberisintroducedasanewcontrolingShareholderwhichwil

providetheCompanywithaditionalstrategicdevelopmentresources.Furthermore,the

liquiditypositionoftheGroupdeterioratedasat31December2024withasignificantdecrease

inlevelofcashandcashequivalents.TheamountsraisedintheSubscriptionwilbeutilised

bytheGroupto,amongotherthings,improveitsworkingcapital.Considering(i)theamount

ofundingnededbytheGroup;(i)thatheSubscriberisbeingintroducedasanew

controlingShareholder;and(i)thereasonsforandbenefitsoftheSubscriptionasetoutin

thesectionheaded“3.ReasonsforandbenefitsoftheSubscriptionanduseofproceds”ofthis

leterabove,weareoftheviewthathesaidlevelofdilutiontotheshareholdinginterestsof

thepublicShareholdersasaresultoftheSubscriptionisaceptable

8.OurviewontheSubscriptionPrice

FactorsconsideredbytheBoardwhendeterminingtheSubscriptionPrice

WewouldliketodrawtheIndependentShareholders’atentiontothebasisand

factorsconsideredbytheBoardwhendeterminingtheSubscriptionPrice.Asetoutin

thesub-sectionheaded“TheSubscriptionPrice”ofthesectionheaded“2.THE

SUBSCRIPTIONAGREMENT”oftheBoardLeter,theSubscriptionPricewas

determinedafterarm’slengthnegotiationsbetwentheCompanyandtheSubscriber,with

referencetotheprevailingmarketpriceoftheSharesandtheCompany’soveral

circumstances.ItisalsostatedintheaforesaidsectionthatheDirectorshavealso

consideredotherfactors,including(a)theSubscriptionPricerepresentsapremiumof

aproximately99.95%totheauditedconsolidatednetasetvalueperShareatributable

toShareholdersasat31December2024;(b)theDirectors’viewthatitisnotuncomon

forsharesubscriptionsofthisnaturetobepricedatadiscountomarketprice;(c)the

Subscriptionwilprovidecertaintyandtimelinesofcapitalraise;and(d)the

introductionofanewcontrolingShareholderwithrelevantindustryexperienceand

resourcesisexpectedtobringaditionalstrategicvaluetotheCompany.

Ourview

Bearingtheabovefactorsinmind,wehavealsoreviewedandanalysedthefinancial

informationoftheGroup,thereasonsforandbenefitsoftheSubscription,the

SubscriptionPriceandthefectoftheSubscription,detailsofwhicharesetoutinthis

LETERFROMTHEINDEPENDENTFINANCIALADVISER

leterabove.Basedonoureviewandanalyses,wenotethatheSubscriptionPrice

generalyrepresentsadiscountotheclosingpriceoftheSharesduringtheReview

Period(i.e.theSubscriptionPricewaslowerthantheclosingpriceoftheSharesinmost

ofthetradingdaysduringtheReviewPeriod(274outof283days).Ontheotherhand,

wealsonotethat:

(i)TheSubscriptionPricerepresentsignificantpremiumofaproximately

99.95%overtheauditedconsolidatednetasetvalueperShareatributableto

ownersoftheCompanyasat31December2024;

(i)theSubscriptionisnotunderpricedascomparedtotheComparableCompanies

fromP/BRatioandP/SRatioperspectivehavingconsideredthatalthoughthe

impliedP/SRatioftheSubscriptionislowerthantheP/SRatiofthe

DirectlyComparableCompany,(a)theimpliedP/BRatioftheSubscription

ishigherthantheP/BRatioftheDirectlyComparableCompany;and(b)both

theimpliedP/BRatioandtheimpliedP/SRatioftheSubscriptionarewithin

therangesofthoseoftheComparableCompaniesandhigherthantheaverage

P/BRatioandP/SRatioftheComparableCompaniesrespectively);

(i)TheCompany’sbusinesrecoveryhaslagedbehindexpectations,resultingin

sustainedoperatinglosesandphasedliquiditypresure.TheSubscriptionwil

bringinfundingsfortheGrouptoimproveitsworkingcapital,reducefinancial

costsandsuportheCompanyincontinuingtoadvancetheupgradingand

transformationofitsexistingprojectsandenhancingparkoperating

eficiencies;

(iv)TheManagementhadconsideredotherwaysofinancingbeforearivingathe

Subscription,butwerenotabletosucesfulyimplementsuchfinancing

exercisesduetobjectiveconditions;

(v)TheSubscriptionwilintroduceanewcontrolingShareholder,whichwil

efectivelyprovidetheCompanywithaditionalstrategicdevelopment

resources;

(vi)TheSubscriptionwilprovidetheCompanywithasignificantandimediate

capitalinflowofaproximatelyHK$2,295milion.Thecertaintyand

timelinesofthefundsareimportant,especialyinthecontextofthe

Company’sfinancialpositionanditsplansforfuturegrowthandbusines

development;and

(vi)Asilustratedinthesectionheaded“6.FinancialefectsoftheSubscription”

above,thenetasetsatributabletotheownersoftheCompanyperShareand

netdebtoequityratioftheGrouparexpectedtoimproveasaresultofthe

Subscription.

LETERFROMTHEINDEPENDENTFINANCIALADVISER

Havingconsideredtheabove,weareoftheviewthatheSubscriptionPriceisfairand

reasonable.

B.TheWhitewashWaiver