China Canada Xing (00899) announced that the group entered into an acquisition agreement on February 28, 2017, to purchase the office properties and underground parking lot (Beijing property) of the third phase of the supporting facilities project of the Beijing International Exhibition Port. The group has paid RMB 0.2 billion as a deposit. The Beijing property was initially expected to be completed by December 2023 and delivered to the group by June 2024. However, as of the end of the fiscal year on March 31, 2024, the group observed that the development progress of the Beijing property was getting slower. Due to financial difficulties faced by many property developers in China this year, the group is also concerned that the seller of the Beijing property may not be able to complete its construction. In order to protect the interests of the company and its shareholders as much as possible, the group quickly met and negotiated with the seller. The seller indicated that there may be difficulties in completing and delivering the Beijing property according to the agreed timeline.

The group has appointed Chinese lawyers to contact the seller regarding the transfer and refund of the property.

The seller has proposed to transfer a total of 10 properties and 106 parking spaces to the group as a refundable deposit. These properties and parking spaces are commercial properties located in Longxiangyu Jinghuayuan, Yufeng Road, Shunyi District, Beijing, with a total construction area ranging from 177 square meters to 793 square meters. As of the date of this announcement, the group has received 4 properties, while the remaining 6 properties and 106 parking spaces (remaining refundable properties) are still pending delivery to the group.

In the current unfavorable market environment, especially in the Chinese property market, the company's primary task is to protect its assets as much as possible. In the case of the Beijing property, the group has paid a deposit of RMB 0.2 billion, and ensuring the refund of the deposit is of utmost importance to the group. If the group decides to insist on its contractual rights under the acquisition agreement and takes legal action against the seller, it will inevitably incur significant legal costs and time, and there is no guarantee that even if the group wins the lawsuit against the seller, it will be able to recover the full amount of the deposit and other compensation. From a business and practical perspective, as a first step, the group has adopted a strategy to mitigate its losses and recover funds from the seller through negotiations as much as possible and as soon as possible. In fact, this strategy has been proven effective, and the group has already quickly received RMB 8 million in cash compensation and 4 properties with a total value of approximately RMB 44.4 million from the seller, totaling approximately RMB 52.4 million. With regard to the refund and compensation received, the group can immediately proceed with other business plans and reduce the opportunity cost in this regard. It can also minimize the legal costs and time of recovering losses and compensation, as well as the need to compete with other creditors of the seller. Although the combination of the refundable properties and the Beijing property is different, the refundable properties are also commercial properties designated for commercial use, located in Beijing just like the Beijing property, and still have significant value based on the experience and expertise of the group's management. The group does not intend to hold the refundable properties in the long term, but is prepared to divest the Beijing property in the short term when market conditions permit and suitable buyers are identified.