HISTORY, RESTRUCTURING AND CORPORATE STRUCTURE

Transcription

1 HISTORY AND DEVELOPMENT Overview Our Group s history can be traced back to the year of 1938 when Liow & Company ( ), the predecessor of our controlling shareholder, China Resources Holdings, commenced its business in Hong Kong and started to export medicines and medical devices to mainland China in Through restructuring of state-owned pharmaceutical enterprises engaged by our controlling shareholder and strategic acquisitions conducted by our Group, we have developed into a leading integrated pharmaceutical company in China, engaging in the research and development, manufacturing, distribution and retail of a broad range of pharmaceutical and healthcare. China Resources Co., Limited ( CRC ) was commissioned by the SASAC in the 2000s to engage in the restructuring of state-owned pharmaceutical enterprises in China, thereby forming a solid foundation for our core businesses. In 2006, CRC was engaged in the restructuring of China Worldbest Life Industry Co., Ltd. ( ) ( China Worldbest ), a state-owned pharmaceutical enterprise, through which CRC acquired 50% interest in Beijing, which was at the time a subsidiary of China Worldbest. Such interest held by CRC was injected into our Group in Our Company was incorporated in Hong Kong with limited liability on May 10, 2007 and was then wholly owned by CRH (). In 2007, our Company participated in the restructuring of Sanjiu Enterprise ( ) ( Sanjiu Enterprise ) through which, our Company acquired interest in New Sanjiu Holdings Co., Ltd. ( ), the predecessor of CR Holdings, in November In July 2008, we acquired from CRC 56.62% interest in CR Dong-E, a joint venture established by CRC and Liaocheng SASAC, through which we controlled 23.14% interest in Dong-E-E-Jiao, a company listed on the Shenzhen Stock Exchange since July 1996 and principally engaged in the manufacturing of E Jiao (donkey-hide gelatin). As of the Latest Practicable Date, we controlled 27.80% interest in Dong-E-E-Jiao. In November 2008, CR Holdings completed the acquisition of 66.98% interest in CR Sanjiu, a company listed on the Shenzhen Stock Exchange since March 2000 and principally engaged in the manufacturing and sale of OTC drugs and Chinese prescription medicines, from Sanjiu Enterprise. As of the Latest Practicable Date, we held 63.59% interest in CR Sanjiu. In 2011, we further acquired 49% and 1% interest in Beijing from Beijing Holdings and China Resources National Corporation ( CRNC ), respectively, upon completion of which, Beijing became our wholly-owned subsidiary and Beijing Investment became our Shareholder shortly thereafter. See Restructuring with Beijing Investment and Issue of Shares to BEID Fund. 133

2 Following the completion of the acquisition of Beijing, CR Double-Crane, which was at the time a 49.12% owned subsidiary of Beijing and a company listed on the Shanghai Stock Exchange since May 1997 and principally engaged in the manufacturing of chemical drugs and other pharmaceutical, became our non-wholly owned subsidiary in As of the Latest Practicable Date, we held 59.99% interest in CR Double-Crane. Through the acquisition of Beijing, we also acquired 82.48% interest in CR Commercial, which was then a subsidiary of Beijing. In December 2010 and September 2011, Beijing further injected capital in CR Commercial, upon completion of which, its interest in CR Commercial increased to 88.67%. In December 2011, we further completed the acquisition of 2.31% interest in CR Commercial from CR Double-Crane, and in December 2012, we completed the acquisition of 9.02% interest in CR Commercial from Xie Yong ( ), Chen Jisheng ( ) (who were at the time the directors of CR Commercial) and two other individual shareholders and Beijing Zhongjisheng Healthcare Products Co., Ltd. ( ). Save as disclosed above, to the best knowledge and information of the Directors, the transferors in the above acquisitions, are Independent Third Parties. Upon completion of the above acquisitions, CR Commercial, a company principally engaged in the sale and distribution of pharmaceutical, became our wholly-owned subsidiary in Through the acquisition of Beijing, we acquired 47.28% interest in CR Zizhu, which was then a subsidiary of Beijing, and in 2012, we further completed the acquisition of the remaining 42.28% and 10.44% interest in CR Zizhu from China Cinda Asset Management Co., Ltd. ( ) and from Yin Xuying ( ), Sun Ye ( ), Kong Lingan ( ) (who were at the time the directors of CR Zizhu) and 27 other individual shareholders, respectively. Save as disclosed above, to the best knowledge and information of the Directors, the transferors in the above acquisitions, are Independent Third Parties. Upon completion of the above acquisitions, CR Zizhu became our wholly-owned subsidiary. Through the acquisition of Beijing, we also acquired 74.65% interest in R&D Center, which was then a subsidiary of Beijing, and in 2013, we further completed the acquisition of the remaining 20.28%, 4.06% and 1.01% interest in R&D Center from Beijing Industrial Development Investment Management Co., Ltd. ( ), CR Zizhu (which was at the time a subsidiary of Beijing ) and Beijing Co., Ltd. ( ) (which was at the time a subsidiary of CR Commercial), respectively. Save as disclosed above, to the best knowledge and information of the Directors, the transferors in the above acquisitions, are Independent Third Parties. Upon completion of the above acquisitions, R&D Center became our wholly-owned subsidiary. In 2016, we completed the acquisition of interest in CR Retail Group, which wholly owns CR Care, from CR Retail Group to further broaden our pharmaceutical retail network in China and Hong Kong. 134

3 Milestones of Development Set out below are the key milestones in our history to date: 1938 Liow & Company ( ), the predecessor of China Resources Holdings, our controlling shareholder, was founded Liow & Company ( ) was renamed as China Resources Company ( ) China Resources Company ( ) started to export medicines and medical devices to mainland China Our controlling shareholder, China Resources Holdings, was incorporated in Hong Kong CRC set up CR Dong-E with Liaocheng SASAC CRC was engaged in the restructuring of China Worldbest, and acquired 50% interest in Beijing Our Company was incorporated in Hong Kong We acquired 56.62% interest in CR Dong-E from CRC, thereby controlling 23.14% interest in Dong-E-E-Jiao, a company listed on the Shenzhen Stock Exchange and principally engaged in the manufacturing of E Jiao (donkey-hide gelatin). We completed the acquisition of 66.98% interest in CR Sanjiu, a company listed on the Shenzhen Stock Exchange and principally engaged in the manufacturing and sale of OTC drugs and Chinese prescription medicines Our Company entered into a strategic cooperation agreement with the China Academy of Medical Sciences ( ) to strengthen the research and development capabilities of our Group. We acquired 50% interest in Beijing from CRC. CR Double-Crane became our non-wholly owned subsidiary following the completion of acquisition of 50% interest in Beijing We acquired the remaining 50% interest in Beijing, and thereafter Beijing became a wholly-owned subsidiary of our Company. Beijing Investment became a Shareholder of our Company. 135

4 We successfully completed 11 mergers and acquisitions in Beijing, Jiangsu, Henan and other provinces, which further developed our core businesses and enhanced our presence in the pharmaceutical market in China CR Commercial became a wholly-owned subsidiary of our Company. We acquired the remaining 52.72% interest in CR Zizhu to further develop our product portfolio and enhance our market penetration. R&D Center became our wholly-owned subsidiary. We established the Health Institute of China Resources University ( ) in June BEID Fund became a Shareholder of our Company. The total assets and revenue of our Group for the year respectively exceeded HK$100 billion for the first time Our Company ranked no. 4 among the Top 100 Enterprises in the PRC Industry of 2013 (2013 ). CR Holdings was awarded the Top 10 PRC Group of 2014 (2014 ) at the ChemPharm Annual Summit 2014 (2014 ). The Beijing Group Industry-University-Research Alliance ( ) led by our Company under the Eleventh-Five Year Plan was successfully completed and accepted CR Holdings was awarded the Top 10 PRC Group of 2015 (2015 ) at the ChemPharm Annual Summit 2015 (2015 ) We completed the acquisition of interest in CR Retail Group which wholly owned CR Care, a company principally engaged in pharmacy businesses in China and Hong Kong. RESTRUCTURING WITH BEIJING PHARMACEUTICAL INVESTMENT AND ISSUE OF SHARES TO BEID FUND On July 30, 2010, our Company, CRC, China Resources Holdings, CR Holdings, Beijing and BSCOMC entered into the Restructuring Agreement, pursuant to which the parties agreed to conduct restructuring of our Company and Beijing. Pursuant to the Restructuring Agreement, CRC transferred its 50% interest in Beijing to CR Investment, a wholly-owned subsidiary of our Company, at a RMB1,828,665,218.47, which was determined with reference to the book value of Beijing as of December 31,

5 On May 10, 2011, CRNC and BSCOMC entered into a transfer agreement, pursuant to which BSCOMC agreed to transfer 1% interest in Beijing to CRNC at nil consideration. CRNC subsequently transferred such 1% interest in Beijing to CR Investment, a wholly-owned subsidiary of our Company, at a RMB40,450,032.58, which was determined with reference to the book value of Beijing as of December 31, On October 10, 2011, our Company entered into the 2011 Share Subscription Agreement with, among others, Beijing Investment, pursuant to which our Company agreed to purchase interest in Beijing Investment & Management (BVI), which indirectly held 49% interest in Beijing, in exchange for the issuance and allotment of 1,094,800,000 Shares to Beijing Investment. The interest in Beijing Investment & Management (BVI), being the consideration for the Share allotment to Beijing Investment, was valued at RMB1,869,918,491.03, which was determined with reference to the book value of Beijing as of March 31, Subsequent to the aforementioned transfers, Beijing became our wholly-owned subsidiary. Beijing Investment is an indirect wholly-owned subsidiary of BSCOMC, which is a state-owned enterprise established as the platform for capital maintenance and appreciation of state-owned assets as well as to support the Beijing Municipality Government s strategic adjustments to state-owned assets and reorganization of state-owned enterprises. Upon the above allotment to Beijing Investment, our Shares were owned as to 72% and 28% by CRH () and Beijing Investment, respectively. On November 6, 2013, our Company entered into the 2013 Share Subscription Agreement with BEID Fund, pursuant to which our Company issued 201,438,849 Shares to BEID Fund in December 2013 for a total cash HK$1,682,014, In December 2013, our Company also issued 517,985,612 Shares to CRH () at a HK$3,600,000,003. The these subscriptions was determined with reference to the book value of our Company as of December 31, BEID Fund is an offshore investment fund controlled by BEIDMCI Limited, which is a joint venture owned by Beijing SASAC and JP Morgan Asset Management Private Equity (China) Co., Ltd. ( ). Upon the above allotments to BEID Fund and CRH (), our Shares were continued to be owned as to 72% by CRH (), and the remainder was owned as to 23.65% and 4.35% by Beijing Investment and BEID Fund, respectively. 137

6 MAJOR ACQUISITIONS AND DISPOSALS Major Acquisitions during the Track Record Period Our Group conducted a total of 10 major acquisitions during the Track Record Period in furtherance of our growth strategy: Acquisitions Counterparties Consideration Principal Business of the Target Company Reasons for the Acquisitions 1. In December 2012, CR Suzhou Li an entered into an agreement in relation to the acquisition of interest in CR Nantong. The change in industrial and completed on January 11, Gu Jianchu ( ), Wang Yongxin ( ), Xu Jie ( ), Dai Zhengzhong ( ), Gu Dazhi ( ) and Zhang Weidong ( ) (Independent Third Parties) RMB20.0 million distribution business, sale of medical devices, drug information consultation services To expand our Group s pharmaceutical distribution businesses in and around Nantong, Jiangsu province 2. In January 2013, CR Sanjiu entered into an agreement in relation to the acquisition of a total of 97.18% in Guilin CR Tianhe. The change in industrial and commercial registration was completed on February 18, individuals (Independent Third Parties) approximately RMB583.1 million manufacturing To implement the growth strategy and diversify the product portfolio of our Group (Note: CR Sanjiu subsequently acquired 1.36% interest in Guilin CR Tianhe from six individuals (Independent Third Parties), upon completion of which, it became a 98.54% owned subsidiary of CR Sanjiu.) 3. In April 2013, CR Commercial entered into an agreement in relation to the acquisition of 51% interest in CR Hunan Ruige. The change in industrial and completed on April 28, Xiao Hongqi ( ) (a director of CR Hunan Ruige ) approximately RMB279.2 million distribution business, and drug information consultation services To expand our Group s pharmaceutical distribution businesses in Hunan province 138

7 Acquisitions Counterparties Consideration Principal Business of the Target Company Reasons for the Acquisitions 4. In August 2014, CR Sanjiu entered into an agreement in relation to the acquisition of interest in Jilin China Resources Heshan Tang Ginseng Co., Ltd. ( ), formerly known as Jilin Hongjiu Heshan Tang Ginseng Co., Ltd. ( ). The change in industrial and completed on August 19, Jilin Hongjiu Bio-technology Co., Ltd. ( ) (an Independent Third Party) RMB120.0 million Plantation, processing and sale of ginseng To implement the growth strategy of our Group and expand into the procurement of Chinese herbs 5. In November 2014, CR Sanjiu entered into an agreement in relation to the acquisition of interest in Hangzhou Laotongjun Manufacturing Co., Ltd. ( ). The change in industrial and completed on November 12, Shangyu Qiming Investment Co., Ltd. ( ), Ningbo Meishan Bao Shui Port Shengrong Equity Investment (General Partnership) ( ( )) and Ningbo Meishan Bao Shui Port Xianjian Equity Investment (General Partnership) ( ( )) and six individuals (Independent Third Parties) RMB99.0 million manufacturing To implement the growth strategy and diversify the product portfolio of our Group 6. In August 2015, Shenzhen CR Jiuxin entered into an agreement in relation to the acquisition of 62.9% interest in Zhejiang Zhongyi. The change in industrial and completed on August 31, Zhou Yicheng ( ), Wang Wanqin ( ), Lishui Zhongcheng Investment (Limited Partnership) ( ( )), Zhu Juhong ( ) and Wang Xiaodong ( ) (Independent Third Parties) RMB817.7 million manufacturing To implement the growth strategy and diversify the product portfolio of our Group 139

8 Acquisitions Counterparties Consideration Principal Business of the Target Company Reasons for the Acquisitions 7. In August 2015, Shenzhen CR Jiuxin entered into an agreement in relation to the acquisition of interest in Beijing Bai Ao Te Biotech Engineering Co., Ltd. ( ), which owned the remaining 37.1% interest in Zhejiang Zhongyi. The change in industrial and completed on August 31, Zhou Yicheng ( ), Wang Yaping ( ) and Wang Liping ( ) (Independent Third Parties) RMB482.3 million manufacturing To implement the growth strategy and diversify the product portfolio of our Group 8. In September 2015, CR Sanjiu entered into an agreement in relation to the acquisition of 90.09% interest in Ya an Yuhe Co., Ltd. ( ). The change in industrial and completed on September 28, individuals (Independent Third Parties) approximately RMB197.5 million manufacturing To optimize the shareholding structure of the target company, and enhance its management efficiency 9. In September 2015, our Company entered into an agreement in relation to the acquisition of interest in CR Retail Group. The acquisition was completed on January 4, CR Retail Group (an indirect wholly-owned subsidiary of China Resources Holdings) A total US$1 in cash and RMB395.0 million in shareholders loan Pharmacy and operation of healthcare stores To acquire CR Care s healthcare stores and to strengthen our Group s pharmacy businesses in Hong Kong and China 10. In November 2015, CR Double-Crane entered into an agreement in relation to the acquisition of a total of 60% interest in Jinan Limin. The change in industrial and completed on November 16, individuals (Independent Third Parties) RMB713.4 million Manufacturing and sale of Western medicine, small volume injections (including hormones), tablets, capsules and active pharmaceutical ingredients To implement the business deployment of CR Double-Crane, diversify our product portfolio, and strengthen our sales and distributorship network The each of the above acquisitions was determined based on arm s length negotiation among the parties, with reference to, among others, the past financial performance of the target companies, the growth potential of the target companies, and/or the appraised value of the assets and businesses acquired. As of the Latest Practicable Date, each of the acquisitions as set out above had been properly and legally completed and settled, and all applicable regulatory approvals had been obtained. 140

9 Major Disposals during the Track Record Period Our Group conducted the following disposals of major subsidiaries during the Track Record Period to optimize our resource allocation and to streamline our core businesses: Principal Business Disposals Counterparties Consideration and its Basis of the Target Company Reasons for the Disposals In September 2014, CR Investment entered into an agreement in relation to the disposal of its interest in Shanghai Medical Instruments. The change in industrial and completed on April 2, Jiangsu Yu Yue Technological Development Company Limited ( ) (an Independent Third Party) approximately RMB691.5 million, which was determined with reference to the appraised value of the target company Manufacturing and sale of medical appliances To focus on our core businesses in pharmaceutical manufacturing and distribution In September 2014, Beijing entered into an agreement in relation to the disposal of its 51.51% interest in CR Wandong Medical Equipment. The change in industrial and completed on June 8, Jiangsu Yu Yue Technological Development Company Limited ( ) (an Independent Third Party) approximately RMB1,142.2 million, representing 90% of the daily weighted average price during the 30-day period preceding the date of announcement of the transaction Manufacturing and sale of medical equipment To focus on our core businesses in pharmaceutical manufacturing and distribution The each of the above disposals was determined based on arm s length negotiation among the parties. As of the Latest Practicable Date, each of the disposals as set out above had been properly and legally completed and settled, and all applicable regulatory approvals had been obtained. Other than the major disposals during the Track Record Period as disclosed above, Beijing (as transferor) and China Kanglike Export & Import Co., Ltd. ( ) (as transferee) entered into an equity transfer agreement on May 31, 2016, pursuant to which Beijing agreed to transfer interest in China Resources Industrial Development (Beijing) Co., Ltd. ( ), whose major assets comprised a plot of land located in Beijing (which had not been developed), at approximately RMB360.5 million as consideration for equity plus assignment of credit rights to be determined at completion of the agreement. 141

10 OUR PRINCIPAL SUBSIDIARIES CO 3rd Sch 29 As of the Latest Practicable Date, we had 29 principal subsidiaries operating our core businesses. The table below sets forth the details of our 29 principal subsidiaries: App1A-29(1) Attributable No. Name of the Principal Subsidiaries Date of Incorporation Fully Paid Registered Capital as of the Latest Practicable Date Interest to our Groupasofthe Latest Practicable Date Principal Business 1. CR Holdings March 22, 2007 RMB5,385,000,000 Investment holding 2. CR Investment July 4, 2003 RMB500,000,000 Investment holding 3. CR Sanjiu (Note 1) April 21, 1999 RMB978,900, % Manufacturing of pharmaceutical 4. CR Dong-E (Note 2) December 9, 2004 RMB422,771, % Investment holding 5. Dong-E-E-Jiao (Note 3) June 4, 1994 RMB654,021, % Manufacturing of pharmaceutical 6. Beijing March 28, 1987 RMB2,320,000,000 Investment holding 7. CR Double-Crane (Note 4) May 16, 1997 RMB724,470, % Manufacturing of pharmaceutical 8. CR Commercial December 27, 2000 RMB1,191,703,356 Trading of pharmaceutical Major subsidiaries of CR Sanjiu 9. Shenzhen China Resources Sanjiu Trading Co., Ltd. ( ) (Note 5) July 17, 1996 RMB60,000, % Sale of pharmaceutical 10. Shenzhen CR Jiuxin (Note 5) January 27, 1992 RMB500,000, % Manufacturing of pharmaceutical Major subsidiaries of CR Double-Crane 11. Anhui Double-Crane Co., Ltd. ( ) (Note 6) September 13, 2000 RMB82,608, % Manufacturing of pharmaceutical 142

11 Attributable No. Name of the Principal Subsidiaries Date of Incorporation Fully Paid Registered Capital as of the Latest Practicable Date Interest to our Groupasofthe Latest Practicable Date Principal Business 12. Beijing Double-Crane Management Co., Ltd. ( ) (Note 6) July 21, 1988 RMB59,327, % Sale of pharmaceutical 13. Beijing Saike Changsheng Co., Ltd. ( ) (Note 6) April 7, 1995 RMB2,800, % Sale of pharmaceutical Major subsidiaries of CR Commercial 14. China Resources Shandong Co., Ltd. ( ) February 28, 2000 RMB200,000,000 Sale of pharmaceutical 15. China Resources Liaoning Co., Ltd. ( ) March 7, 2011 RMB150,000,000 Sale of pharmaceutical 16. China Resources Henan Co., Ltd. ( ) May 25, 2009 RMB245,146,800 Sale of pharmaceutical 17. CR Nantong April 16, 1995 RMB30,000,000 Sale of pharmaceutical 18. China Resources Hebei Co., Ltd. ( ) June 23, 2011 RMB330,000,000 Sale of pharmaceutical 19. CR Suzhou Li an January 1, 1980 RMB200,000,000 Sale of pharmaceutical 20. CR Purenhong (Note 7) November 3, 2000 RMB16,000, % Sale of pharmaceutical 143

12 Attributable Fully Paid Interest to our Name of the Registered Capital Groupasofthe Principal Date of as of the Latest Latest Practicable No. Subsidiaries Incorporation Practicable Date Date Principal Business 21. CR Tianjin (Note 8) March 10, 2003 RMB200,000,000 70% Sale of pharmaceutical 22. CR Xinlong (Note 9) October 21, 1999 RMB352,000,000 60% Sale of pharmaceutical 23. China Resources Xinlong (Shanxi) Co., Ltd. ( ( ) ) (Note 9) August 10, 1999 RMB51,000,000 60% Sale of pharmaceutical 24. CR Hunan Shuangzhou (Note 10) December 1, 2011 RMB50,000,000 51% Sale of pharmaceutical 25. CR Guangdong (Note 11) December 25, 1993 RMB405,755,000 70% Sale of pharmaceutical 26. China Resources (Shanghai) Co., Ltd. ( ( ) ) (Note 12) January 20, 1999 RMB50,000,000 70% Sale of pharmaceutical 27. CR Hunan Ruige (Note 13) January 10, 2013 RMB100,000,000 51% Sale of pharmaceutical 28. China Resources Qingdao Company Limited ( ) March 26, 2007 RMB10,000,000 Sale of pharmaceutical 29. China Resources Jilin Co., Ltd. ( ) September 6, 2010 RMB200,000,000 Sale of pharmaceutical Notes: (1) Shares of CR Sanjiu are listed on the Shenzhen Stock Exchange (stock code: ). 144

13 (2) CR Dong-E is owned as to 56.62% by CR Investment, and the remaining 25.38% and 18% by ChangRun Investment & Group Co., Ltd. ( ) and Liaochengshi Dongyuan Assets Management Co., Ltd. ( ) (both of which are substantial shareholders of CR Dong-E), respectively. (3) Shares of Dong-E-E-Jiao are listed on the Shenzhen Stock Exchange (stock code: ). Dong-E-E-Jiao is a subsidiary of our Company, as CR Dong-E, a 56.62% owned subsidiary of our Company, controls a 23.14% interest in Dong-E-E-Jiao, being the single largest shareholder and is able to control the board of directors of Dong-E-E-Jiao. CR Investment also directly holds 4.66% interest in Dong-E-E-Jiao. See Financial Information Critical Accounting Policies Control over Dong-E-E-Jiao for further details of the basis of consolidation of Dong-E-E-Jiao. (4) Shares of CR Double-Crane are listed on the Shanghai Stock Exchange (stock code: ). Beijing, a wholly-owned subsidiary of our Company, holds a 59.99% interest in CR Double-Crane. (5) Each of Shenzhen China Resources Sanjiu Trading Co., Ltd. ( ) and Shenzhen CR Jiuxin is a wholly-owned subsidiary of CR Sanjiu (a 63.59% owned subsidiary of our Company). (6) Each of Anhui Double-Crane Co., Ltd. ( ), Beijing Double-Crane Management Co., Ltd. ( ) and Beijing Saike Changsheng Co., Ltd. ( ) is a wholly-owned subsidiary of CR Double-Crane (a 59.99% owned subsidiary of our Company). (7) CR Purenhong is owned as to 55.65% by CR Commercial, 20% by Beijing Double Heron Co., Ltd. ( ) (a substantial shareholder of CR Purenhong ), 15.5% by Zhang Zhichao ( ) (a substantial shareholder of CR Purenhong ), and the remaining 4.5%, 2.7% and 1.65% by Xu Jinxia ( ), Yu Yan ( ) and Xie Dongfang ( ) (all of whom are Independent Third Parties), respectively. (8) CR Tianjin is owned as to 70% by CR Commercial, and the remaining 15% and 15% by Tianjin Tianshili Import & Export Trading Co., Ltd. ( ) and Caterpillar Fungus (Tianjin) Bio-technology Co., Ltd. ( ( ) ) (both of which are substantial shareholders of CR Tianjin ), respectively. (9) CR Xinlong is owned as to 60% by CR Commercial, and the remaining 35% and 5% by Xinlong Co., Ltd. ( ) (a controlling shareholder of CR Xinlong ) and Hubei Huayi Jinghao Commerce & Trading Co., Ltd. ( ) (an Independent Third Party), respectively. China Resources Xinlong (Shanxi) Co., Ltd. ( ( ) ) is a wholly-owned subsidiary of CR Xinlong. (10) CR Hunan Shuangzhou is owned as to 51% and 49% by CR Commercial and Zhou Liping ( ) (a controlling shareholder and the general manager of CR Hunan Shuangzhou ), respectively. (11) CR Guangdong is owned as to 70% by CR Commercial, and the remaining 29.75% and 0.25% by Chen Weilian ( ) (a substantial shareholder and a director of CR Guangdong ) and Zhou Mu ( ) (an Independent Third Party), respectively. (12) China Resources (Shanghai) Co., Ltd. ( ( ) ) is a wholly-owned subsidiary of Shanghai Shenwei, which is owned as to 70% by CR Commercial and 30% by Shanghai Xinshengyuan (Group) Co., Ltd. ( ( ) ) (a controlling shareholder of Shanghai Shenwei). (13) CR Hunan Ruige is owned as to 51% and 49% by CR Commercial and Xiao Hongqi ( ) (a controlling shareholder and a director of CR Hunan Ruige ), respectively. See Appendix I Accountants Report for details of the subsidiaries which principally affect the results, assets or liabilities of our Group during the Track Record Period. 145

14 CORPORATE STRUCTURE CO 3rd Sch 29 The following diagram sets forth a simplified corporate structure of our Company and major subsidiaries immediately before the [REDACTED]: App1A-28(2) CRNC CRC CRC Bluesky Limited China Resources Holdings [HK] CRH () Beijing SASAC BSCOMC Beijing Holdings Beijing Investment BEID Fund [Cayman Islands] Note % Note % Note % Our Company CR Holdings Beijing Investment & Management (BVI) CR Investment Beijing Investment & Management (HK) [HK] 63.59% Note % Note % 49.00% CR Sanjiu CR Dong-E Beijing Note % Note % Note 4 Major subsidiaries of CR Sanjiu Dong-E-E-Jiao 11.33% 88.67% 59.99% Note 5 CR Commercial CR Double-Crane Note 6 Major subsidiaries of CR Commercial Note 6 Major subsidiaries of CR Double-Crane 146

15 The following diagram sets forth a simplified corporate structure of our Company and major subsidiaries immediately after the [REDACTED] (assuming the [REDACTED] is not exercised): CRNC CRC Beijing SASAC CRC Bluesky Limited BSCOMC China Resources Holdings [HK] Beijing Holdings CRH () Beijing Investment BEID Fund [Cayman Islands] Public Note 1 [REDACTED] Note 1 [REDACTED] Note 1 [REDACTED] [REDACTED] Our Company CR Holdings Beijing Investment & Management (BVI) CR Investment Beijing Investment & Management (HK) [HK] 63.59% 56.62% Note 2 Note % 49.00% CR Sanjiu CR Dong-E Beijing 4.66% Note 6 Note % Note 4 Major subsidiaries of CR Sanjiu Dong-E-E-Jiao 11.33% 88.67% 59.99% Note 5 CR Commercial CR Double-Crane Note 6 Major subsidiaries of CR Commercial Note 6 Major subsidiaries of CR Double-Crane Notes: (1) See Controlling and Substantial Shareholders in this document for further details. (2) Shares of CR Sanjiu are listed on the Shenzhen Stock Exchange (stock code: ) % interest in CR Sanjiu is held by CR Holdings, being its controlling shareholder, and the remaining 36.41% interest is held by the public shareholders who, to the best knowledge and information of the Directors, are Independent Third Parties. 147

16 (3) CR Dong-E is owned as to 56.62% by CR Investment, and the remaining 25.38% and 18% by ChangRun Investment & Group Co., Ltd. ( ) and Liaochengshi Dongyuan Assets Management Co., Ltd. ( ) (both of which are substantial shareholders of CR Dong-E), respectively. (4) Shares of Dong-E-E-Jiao are listed on the Shenzhen Stock Exchange (stock code: ). Dong-E-E-Jiao is a subsidiary of our Company, as CR Dong-E, a 56.62% owned subsidiary of our Company, controls a 23.14% interest in Dong-E-E-Jiao, being the single largest shareholder and is able to control the board of directors of Dong-E-E-Jiao. CR Investment also directly holds 4.66% interest in Dong-E-E-Jiao. The remaining 72.20% interest in Dong-E-E-Jiao is held by the public shareholders who, to the best knowledge and information of the Directors, are Independent Third Parties. (5) Shares of CR Double-Crane are listed on the Shanghai Stock Exchange (stock code: ). Beijing, a wholly-owned subsidiary of our Company, holds a 59.99% interest in CR Double-Crane. The remaining 40.01% interest in CR Double-Crane is held by the public shareholders who, to the best knowledge and information of the Directors, are Independent Third Parties. (6) See Our Principal Subsidiaries for details of the major subsidiaries of CR Sanjiu, CR Double-Crane and CR Commercial. (7) We have a complex group structure due to our historical developments, strategic business developments, and geographical coverage of our business operations. 148