Reclassification of interests in ying li international real estate limited

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CHINA EVERBRIGHT LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code: 165)

RECLASSIFICATION OF INTERESTS IN

YING LI INTERNATIONAL REAL ESTATE LIMITED

This announcement is made by China Everbright Limited (the "Company") pursuant to Rule

13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

As disclosed in the Company's interim report for the six months ended 30 June 2019, as at 30 June 2019, the Company and its subsidiaries (collectively the "Group") held an aggregate of 72.04% of the shares in Ying Li International Real Estate Limited ("Ying Li"), whose shares are listed on the Mainboard of Singapore Exchange Securities Trading Limited, and had classified its investment as a disposal group held for sale.

To reflect the Group's latest business plan in holding the investment in Ying Li, the board of directors of the Company (the "Board") approved the decision to cease classifying the investment in Ying Li as a disposal group held for sale and that Ying Li will be accounted for and consolidated in the financial statements of the Group as a subsidiary of the Company during the preparation of the Group's audited financial statements in respect of the year ending 31 December 2019 (the "Reclassification").

Details of the Reclassification

Prior to the Reclassification, the Company's equity interest in Ying Li met the criteria to be classified as held for sale on acquisition in accordance with HKFRS 5 "Non-currentAssets Held for Sale and Discontinued Operations". The adjusted aggregate balances of the assets and liabilities of Ying Li have been presented in the Group's condensed consolidated statement of financial position as assets classified as held for sale and liabilities classified as held for sale respectively in the Group's unaudited financial statements for the six months ended 30 June 2019 (the "2019 Interim Results").

After the Reclassification, the financial results of Ying Li will be consolidated into the Group's financial statements on a line-by-line basis.

Reasons for the Reclassification

During the preparation of the 2019 Interim Results, the Company was actively pursuing a plan to introduce strategic investors into Ying Li within the year of 2019, potentially by way of transferring a portion of shares currently held by the Company in Ying Li to the new strategic investors (the "Potential Disposal"). In light of the Potential Disposal, according to paragraph

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8A of HKFRS 5 "Non-current Assets Held for Sale and Discontinued Operations", it requires an entity that is committed to a sale plan involving loss of control of a subsidiary shall classify all the assets and liabilities of that subsidiary as held for sale when the criteria set out in paragraph 6 to 8 of HKFRS 5 are met, regardless of whether the entity will retain a non-controllinginterest in its former subsidiary after the sale. On this basis, under HKFRS 5, all the assets and liabilities of Ying Li was financially recognized as disposal group held for sale by the Company in the 2019 Interim Results and carried at the lower of the Company's carrying amount and the fair value less costs to sell.

As at the date of this announcement, the Company has not proceeded with the Potential Disposal and the Company considers that the latest business plan of continuing to hold the majority interest in Ying Li in the near future is in the interests of the shareholders of the Company. Accordingly, Ying Li will cease to be classified as a disposal group under HKFRS 5 and be accounted for and consolidated in the financial statements of the Group as a subsidiary of the Company for the year ending 31 December 2019.

Potential impact on the Reclassification

According to the preliminary calculation by the Company based on the currently available information which has not been reviewed or audited by the Company's auditors, it is expected that the Reclassification will lead to a recognition of a gain on bargain purchase with reference to fair value measurement of approximately HK$680 million for the year ending 31 December 2019. Shareholders and potential investors should note that the financial information set out herein does not represent the overall financial position or operating results of Ying Li.

Further details of the Group's performance after the Reclassification will be disclosed in its audited annual results for the year ending 31 December 2019.

The financial information set out herein is only based on the Company's preliminary calculation which has not been reviewed or audited by the Company's auditors and does not represent or provide a complete view of the operating performance or financial condition of the Company. Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Company and should not rely solely on such information.

By order of the Board

China Everbright Limited

Chan Ming Kin Desmond

Company Secretary

Hong Kong, 13 December 2019.

As at the date of this announcement, the Directors of the Company are:

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