Annual Report (A4cvZB 6B s1)

ANNUAL REPORT 年報

(Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立之有限公司)

Stock Code 股份代號: 813

CONTENTS

Hui Sai Tan, Jason (Chairman and President)

Xie Kun Zhao Jun

Hui Mei Mei, Carol Shao Liang

Lyu Hong Bing Lam Ching Kam Fung Tze Wa

Fung Tze Wa (Committee Chairman)

Lyu Hong Bing Lam Ching Kam

Lyu Hong Bing (Committee Chairman)

Lam Ching Kam Fung Tze Wa

Lam Ching Kam (Committee Chairman)

Lyu Hong Bing Fung Tze Wa

Lam Yee Mei, Katherine

ZHONGHUI ANDA CPA Limited

38th Floor, Tower One Lippo Centre

89 Queensway Hong Kong

Telephone: (852) 2511 9968

Facsimile: (852) 2511 0287 Website: https://www.shimaogroup.hk

Cricket Square Hutchins Drive

P.O. Box 2681

Grand Cayman KY1-1111 Cayman Islands

Tricor Investor Services Limited 17/F, Far East Finance Centre 16 Harcourt Road

Hong Kong

Conyers Trust Company (Cayman) Limited Cricket Square

Hutchins Drive

P.O. Box 2681

Grand Cayman KY1-1111 Cayman Islands

The Stock Exchange of Hong Kong Limited Stock code: 813

Investor Relations Department Email: ir@shimaogroup.com

3

Dear shareholders,

I hereby represent Shimao Group Holdings Limited ("Shimao Group", "Shimao" or the "Company") and its subsidiaries (collectively, the "Group") to present the annual results of the Group for the year ended 31 December 2024.

In 2024, the property market of China continued to undergo adjustments. According to the National Bureau of Statistics of China, nationwide investment in property development in 2024 amounted to RMB10,028 billion, representing a year-on-year decrease of 10.6%, of which investment in residential property amounted to RMB7,604 billion, representing a year-on-year decrease of 10.5%. The gross floor area under construction by property developers reached 7,332.47 million sq.m., representing a year-on-year decrease of 12.7%, of which the area under construction for residential properties amounted to 5,133.30 million sq.m., representing a year-on-year decrease of 13.1%. The sales area of newly-built commodity properties stood at 973.85 million sq.m., representing a year-on-year decrease of 12.9%, of which the sales area of residential properties amounted to 814.50 million sq.m., representing a year-on-year decrease of 14.1%.

With respect to policies, in the first half of 2024, relaxation continued in the real estate market, the Central Bank and the National Financial Regulatory Administration put in place various additional financial initiatives and the focus was shifted from the supply side to the demand side. In the second half of 2024, the efficacy and frequency of the central government's policies increased significantly. The all-round financial support from the Central Bank and the tone "reverse the downturn and stabilize the market" set at the Central Political Bureau Meeting marked a turning point for the industry. At the end of 2024, the Central Economic Work Conference again emphasized "sustained efforts to reverse the downturn in real estate market and stabilize it", setting the tone for the property market in 2025 and reiterated its stance on stabilizing the property market.

In March 2025, the government work report upheld the main thread of "seeking progress while maintaining stability", in particular "stabilizing the property market" and "sustained efforts to reverse the downturn in real estate market and stabilize it", and elaborated that relevant basic systems will be set up in an orderly manner and that a new development model for real estate will be fostered at a faster pace. For the year ahead, the policy reinforcement is expected to effect a recovery of expectations. The Company will revitalize the internal resources, rebuild its competitiveness, and enable quality delivery under the guidance of the national real estate policy, so as to move forward steadily under the development model of "One Core with Two Wings".

In the face of the transformative industrial adjustments and market challenges, the Group will align itself with the market trend and national policies, solidify operating fundamentals, focus on customer needs, endeavor for improvement in key areas, and build up new growth drivers with enhanced underlying expertise under the development model of "One Core with Two Wings".

In 2024, through the effective establishment of a survey and feedback mechanism for customer needs, the Group managed to build a closed-loop system from demands to product delivery, putting more attention to customers. Meanwhile, based on its actual operating conditions and upcoming development plan, the Group did not acquire any land during the year. In order to accelerate sales, the Group formulated detailed task schedules for each aspect of project sales and implemented them with concerted efforts to break through the obstacles and improve efficiency. The Group's contracted sales for 2024 amounted to RMB34.002 billion; the aggregate contracted sold area was 2.675 million sq.m.. The average selling price for the year was RMB12,710 per sq.m..

CHAIRMAN'S STATEMENT

With respect to production and operation, the Group continued to focus on quality delivery and championed its customer-oriented philosophy throughout while ensuring quality delivery and product competitiveness. In 2024, the Group achieved cumulative delivery of 136 batches of units for 73 projects across 49 cities in China, thus performing its corporate responsibility with actions. In its pursuit of both punctuality and quality of the delivery, the Group stays committed to its essential aspiration for quality with consistency with balanced emphasis on high standards and quantity, thus performing its deliver responsibility by actions.

With respect to financial management, the Group has taken coordinated measures to meet the challenges and fulfill its social responsibilities, fixing a guard rail for safe operation. At the same time, the Company has maintained constructive dialogues with various groups of creditors to advance the related work, and has made significant progress in debt restructuring: the Company's restructuring scheme of the US$-denominated senior notes issued by the Company and certain offshore credit facilities (involving total principal amounts of approximately US$11.5 billion) was ultimately approved by up to 98.75% of the presented and voted creditors under the restructuring scheme at the scheme meeting, and was sanctioned by an order made by the High Court of Hong Kong on 13 March 2025.

In 2024, Shimao promoted the effective linkage and collaborative development of all business segments under the development model of "One Core with Two Wings". The Company has been strengthening its basic essentials, creating new growth areas, and seeking breakthroughs and innovations, with the aim to focus on building customer-oriented core competitiveness in the new landscape.

In respect of property management business, Shimao Services Holdings Limited ("Shimao Services") was confident of achieving full-year revenue of RMB7,895.5 million, gross profit of RMB1,564.3 million and core net profit attributable to equity holders of RMB492.4 million. Gross floor area (GFA) under management was 218.4 million sq.m. and contracted GFA was 314.3 million sq.m.. In 2025, Shimao Services will focus on healthy operations as its core business objective. Shimao Services will endeavor to adjust the existing operating structure and allocate resources in a more reasonable manner; actively open up a new track for third-party bidding to expand the market, closely follow the industry trend and market demand, and grasp the business opportunities in emerging areas; vigorously explore new resources, deeply tap the potential resources in various projects, closely surround the living scenes and actual needs of owners in small districts, and provide convenient services through innovative service modes and methods to achieve revenue generation.

In terms of hotel business, Shimao Hotels adhered to the development strategy of striking balance between asset-light and asset-heavy, so as to continue the improvement in product quality and boost the spending. In terms of project expansion, it welcomed the opening of Yuluxe Hotel Baoji (寶雞如意茵香茂御酒店), the soft opening of Yuluxe Hotel Dali (大理鑫鶴茂御酒店), and the development of agent-construction management business on a brand new deluxe hotel project in Sanya. In the new year, Shimao Hotels will keep up with the changing needs of consumers and investors and continue to enhance its competitiveness by focusing on digital marketing innovations and the research and development of top-selling products in food and beverage segment.

CHAIRMAN'S STATEMENT

In terms of commercial and entertainment business, Shimao's commercial properties operation remained stable. During the reporting period, for commercial projects under management of Shanghai Shimao Co., Ltd., the foot traffic increased 6% as compared with the same period last year, but cumulative sales recorded a year-on-year decrease of 5%. In terms of commercial projects under management, its overall occupancy rate was close to 90%, which was approximate to that at the end of the previous year. The Company's office buildings under management are all located in the core districts of cities in which they are situated. Although the Company managed to stabilize leasing levels through various means such as flexible leasing policies and customer relationship consolidation, the overall occupancy rate has still declined due to macroeconomy and the cost reduction by and the relocation of tenants. During the reporting period, the overall occupancy rate of office buildings was 70%. In the future, the Company will seize the opportunities from favorable policies, revitalize the internal resources, rebuild its competitiveness to further promote the diversified business layout, and form a synergy through internal resource integration, business collaboration, and mutual sharing of resources, so as to facilitate the operation transformation.

Shimao Group has been actively responding to the national policy to promote the high-quality development of green buildings, conserve resources, protect the environment and meet the growing needs of the people for a better life.

In response to the national goal of "Peak Carbon by 2030 and Carbon Neutral by 2060", Shimao added 171,800 sq.m. of basic level, 111,300 sq.m. of one-star, and 182,000 sq.m. of two-star green building area in 2024. Adhering to the concept of sustainable green and low-carbon construction, Shimao will continue to explore the innovative path of green building and strive to become a facilitator and leader in this field. At the same time, Shimao will strictly comply with the relevant national standards to ensure the green performance and comprehensive benefits of the buildings, and make positive contributions to the sustainable development of the society.

On behalf of the Board, I would like to thank our shareholders, customers, partners and governments at all levels for their tremendous support. I would also like to extend my heartfelt gratitude and deepest respect to our directors, management and staff for all their understanding and assistance and walking with Shimao. A sound foundation is the key to success and prosperity. In 2025, Shimao Group will set clear goals and take practical measures to make breakthroughs while committing to its corporate culture of "Together we fulfill responsibility, make breakthroughs and attain achievements". For property development, the Group will focus on customer needs and concentrate on product quality; for property services, the Group will focus on quality enhancement and capture the niche; for commercial properties and hotels, the Group will improve the quality of asset operation and customer experience, and enhance the output of its light assets. In the new year, Shimao people will write a new chapter of progress with countless vigor and tenacity.

Hui Sai Tan, Jason

Chairman and President

Hong Kong, 28 March 2025

In 2024, the property market of China continued to undergo adjustments. Policywise, easing policies remained as the major tone in the real estate market, as the Central Government rolled out much stronger measures with increasing frequency to maintain stable development. The all-round financial support from the Central Bank and the tone "reverse the downturn and stabilize the market" set at the Political Bureau Meeting will mark a turning point for the industry. At the meetings of the Political Bureau of the Central Committee and the Economic Work Conference in December, emphasis was again placed on the real estate market direction for 2025, indicating that the policy tone has shifted to mitigating risk, stabilizing entities and the market.

1. Recognized Sales Revenue

   Shimao Group Holdings Limited ("Shimao Group", "Shimao" or the "Company") and its subsidiaries (collectively the "Group") generates its revenue primarily from sales of properties, hotel operation, commercial properties operation and property management business. For the year ended 31 December 2024, revenue of the Group reached RMB59.975 billion. During the year, revenue from property sales amounted to RMB47.911 billion, accounting for 79.9% of the total revenue. The recognized sales area was 3.579 million sq.m..

2. Contracted Sales Performance

   As the real estate market sales continued to contract, more and more customers tended to "shorten the replacement cycle and seek for better living experience". The industry transformation will focus on "deleveraging, concentrating efforts to focus on product quality and developing integrated business". Through the effective establishment of a survey and feedback mechanism for customer needs, the Group managed to build a closed-loop system from demands to product delivery, putting more attention to customers. The Group formulated detailed task schedules for each aspect of project sales and implemented them with concerted efforts to break through the obstacles and improve efficiency. The Group's contracted sales for 2024 amounted to RMB34.002 billion; the aggregate contracted sold area was 2.675 million sq.m.. The average selling price for the year was RMB12,710 per sq.m..

3. Ensuring delivery with equal emphasis on quality and quantity, making prudent judgment and coordinating resources

   In response to the market downturn and the pressure on resources, the Group classified projects into different levels and types for management and control made precise and effective resource allocation according to needs. By the end of 2024, the Group had an area under construction of approximately 23.28 million sq.m. and an area completed of approximately 4.58 million sq.m. for the year. As of 31 December 2024, the Group had about 246 projects and a total area of approximately 43.61 million sq.m. (before interests) land bank, which provided the necessary support for the Group's future sales and development. In 2024, Shimao continued to focus on quality delivery. The Group achieved cumulative delivery of 136 batches of units for 73 projects across 49 cities in China, thus performing its corporate responsibility with actions. Looking forward to 2025, the Group's floor area under construction and floor area completed are planned to be approximately 20.89 million sq.m. and approximately 2.39 million sq.m., respectively. After comprehensive assessment of the land market supply and the Group's current land bank, the Group did not acquire any land during the year.

4. Under the development model of "One Core with Two Wings", strengthening basic essentials and creating new growth areas

In 2024, Shimao promoted the collaborative development of all business segments under the development model of "One Core with Two Wings". The Group maintained its competitiveness in property development, focused on customer needs and concentrated on product quality. For property services, the Group focused on quality enhancement and captured the niche; for commercial properties and hotels, the Group improved the quality of its operations, asset operation and customer experience, and enhanced the output of its asset-lights. The Group has been strengthening its basic essentials, creating new growth areas, and seeking breakthroughs and innovations, with the aim to focus on building customer-oriented core competitiveness in the new landscape.

MANAGEMENT DISCUSSION AND ANALYSIS

In respect of property management business, Shimao Group engaged in property management business through its subsidiary, Shimao Services Holdings Limited ("Shimao Services"). In 2024, China's property industry as a whole continued to show a bearish trend of adjustment, and the property market entered a new cycle of de-stocking. The revenue growth path of the property management services industry has also changed significantly, with the previous growth model driven by new projects facing challenges. More large property management service companies are looking at the stock market and non-residential market for in-depth expansion. The importance of basic property management services has been re-emphasised and has become a key driver of the industry's growth.

In 2024, Shimao Services was confident of achieving full-year revenue of RMB7,895.5 million, gross profit of RMB1,564.3 million and core net profit attributable to equity holders of RMB492.4 million. Gross floor area (GFA) under management was 218.4 million sq.m. and contracted GFA was 314.3 million sq.m..

In 2025, Shimao Services will focus on healthy operations as its core business objective. Shimao Services will endeavour to adjust the existing operating structure and allocate resources in a more reasonable manner; actively open up a new track for third-party bidding to expand the market, closely follow the industry trend and market demand, and grasp the business opportunities in emerging areas; vigorously explore new resources, deeply tap the potential resources in various projects, closely surround the living scenes and actual needs of owners in small districts, and provide convenient services through innovative service modes and methods to achieve revenue generation.

As of 31 December 2024, the Group had a total of 23 hotels in operation, including Conrad Shanghai, InterContinental Shanghai Wonderland, Sheraton Hong Kong Tung Chung Hotel, Conrad Xiamen, Hilton Wuhan Riverside, The Yuluxe Sheshan, Shanghai, a Tribute Portfolio Hotel, InterContinental Fuzhou, Hilton Nanjing Riverside, Hilton Shenyang, Hilton Changsha Riverside and Yuluxe Hotel Chengdu. Currently, the Group has nearly 8,000 hotel guest rooms. In addition, the Group has four directly managed leased hotels, including, MiniMax Hotel Shanghai Songjiang, MiniMax Premier Hotel Shanghai Hongqiao, MiniMax Premier Hotel Chengdu Center and ETHOS Hotel Wuhan Riverside, offering nearly 800 hotel guest rooms.

With respect to revenue from guest rooms, the performance of the hotel industry in Mainland China in 2024 diminished as compared to 2023, especially the luxury hotels had been lowering price for higher occupancy, as evidenced by the decline of 6% in average room rate on a year-on-year basis and high-end hotels experiencing a drop in revenue per available room (RevPAR) of as much as 7%. Against this backdrop, Shimao Hotels maintained stable operating fundamentals through flexible adjustment of pricing strategy and product innovation. For the full year, the Group achieved total revenue of RMB2.225 billion, representing a year-on-year decrease of 3.1%; and the revenue per available room (RevPAR) basically unchanged from 2023.

In 2024, Shimao Hotels adhered to the development strategy of striking balance between asset-light and asset-heavy, so as to continue the improvement in product quality and boost the spending. In terms of project expansion, it welcomed the opening of Yuluxe Hotel Baoji (寶雞如意茵香茂御酒店), the soft opening of Yuluxe Hotel Dali (大理鑫鶴茂御酒店), and the development of agent-construction management business on a brand new deluxe hotel project in Sanya. In terms of hotel operation, to celebrate the 20th anniversary of Shimao Hotels, hotels of the Group across 21 cities broke the barriers among different groups in hotel management to reward customers by innovatively launching sought-after products that were redeemable nationwide for a limited period, with cumulative sales exceeding RMB100 million.

MANAGEMENT DISCUSSION AND ANALYSIS

In 2025, Shimao Hotels will keep up with the changing needs of consumers and investors and continue to enhance its competitiveness by focusing on digital marketing innovations and the research and development of top-selling products in food and beverage segment.

In respect of commercial properties operation, Shimao Group is principally engaged in the development of commercial properties through its subsidiary, Shanghai Shimao Co., Ltd. ("Shanghai Shimao"). Shanghai Shimao is determined to develop premium commercial complexes, and regards fulfilling the growing public demand for a better life as its impetus for development.

In 2024, Shimao's commercial properties operation remained stable. The Company's offline retail business was characterized by a larger recovery in foot traffic over sales, since short-term forecasts for disposable income and marginal propensity to consume remained cautious. During the reporting period, for commercial projects under management, the foot traffic increased 6% as compared with the same period last year, but cumulative sales recorded a year-on-year decrease of 5%. Among them, regional commercial segment and community-based commercial segment both showed trends of increased foot traffic but decreased sales. In addition, the overall occupancy rate of commercial projects under management was close to 90%, which was approximate to that at the end of the previous year. The Company's office buildings under management are all located in the core districts of cities in which they are situated. Although the Company managed to stabilize leasing levels through various means such as flexible leasing policies and customer relationship consolidation, the overall occupancy rate has still declined due to macroeconomy and the cost reduction by and the relocation of tenants. During the reporting period, the overall occupancy rate of office buildings was 70%, which was lower than the occupancy rate at the end of the previous year by approximately 7 percentage points.

In the government's work report delivered in 2025, it emphasized "vigorously boosting consumption, increasing return on investment, and expanding domestic demand on all fronts" for domestic demand to become the main driving force and a stable anchor for economic growth. The Company will seize the opportunities from favorable policies, revitalize the internal resources, rebuild its competitiveness to further promote the diversified business layout, and form a synergy through internal resource integration, business collaboration, and mutual sharing of resources, so as to facilitate the operation transformation.

Looking ahead to 2025, the government's work report emphasizes the need to "stabilize the property market", stating that relevant basic systems will be set up in an orderly manner, and that a new development model for real estate will be fostered at a faster pace. The Group will return to the fundamentals of its operations, focus on customer needs and increase efforts in improving key areas. Under the development model of "One Core with Two Wings", the Group will follow the market trend and national policies direction, maintain its fundamental base, strengthen its basic essentials as well as create new growth areas, so as to promote healthy growth.

MANAGEMENT DISCUSSION AND ANALYSIS

Key consolidated statement of profit or loss figures are set out below:

For the year ended 31 December 2024, the revenue of the Group was approximately RMB59,975 million (2023: RMB59,464 million), representing an increase of 0.9% over 2023. 79.9% (2023: 79.0%) of the revenue was generated from the sales of properties and 20.1% (2023: 21.0%) from hotel operation, commercial properties operation, property management and others.

The components of the revenue are set out as follows:

* The income does not include revenue from the Group.

1. Sales of Properties

   Sales of properties for the years ended 31 December 2024 and 2023 are set out below:

   	2024 Area (sq.m.)	RMB million	2023 Area (sq.m.)	RMB million
   Midwest Region	1,460,324	13,593	1,060,320	10,789
   Northern Region	537,055	12,714	169,552	1,771
   Jiangsu, Zhejiang and Shanghai Region	671,048	11,462	1,490,506	21,074
   Southeast Region	910,834	10,142	920,963	13,352
   Total	3,579,261	47,911	3,641,341	46,986

   MANAGEMENT DISCUSSION AND ANALYSIS

2. Hotel Income

   Hotel operation income decreased by approximately 3.1% to RMB2,225 million in 2024 from RMB2,295 million in 2023.

   Hotel operation income is set out as follows:

   Date of Commencement		2024 RMB million	2023 RMB million
   Conrad Shanghai	September 2006	334	310
   Four Points by Sheraton Hong Kong	January 2021	264	196
   Tung Chung
   Sheraton Hong Kong Tung Chung Hotel	December 2020	210	190
   InterContinental Shanghai Wonderland	November 2018	138	179
   Conrad Xiamen	August 2016	131	139
   Hilton Wuhan Riverside	July 2016	106	130
   The Yuluxe Sheshan, Shanghai,	November 2005	103	129
   A Tribute Portfolio Hotel
   Hilton Changsha Riverside	July 2021	102	120
   InterContinental Fuzhou	January 2014	92	92
   Hilton Nanjing Riverside	December 2011	92	101
   Hilton Shenyang	January 2018	87	98
   Crowne Plaza Shaoxing	March 2014	77	87
   Hilton Yantai	August 2017	75	82
   Yuluxe Hotel Chengdu	August 2018	60	63
   Le Méridien Hangzhou Binjiang	September 2018	53	63
   DoubleTree by Hilton Ningbo Beilun	December 2016	50	57
   Yuluxe Hotel Taizhou	August 2014	26	27
   DoubleTree by Hilton Ningbo Chunxiao	December 2015	25	28
   Holiday Inn Mudanjiang	December 2010	25	23
   Minimax Hotel Chengdu Longquanyi	October 2021	13	12
   Others		162	169
   Total		2,225	2,295

   MANAGEMENT DISCUSSION AND ANALYSIS

3. Commercial Properties Operation Income

   Commercial properties operation income decreased by approximately 4.2% to RMB1,667 million in 2024 from RMB1,740 million in 2023. Rental income decreased by 4.5% which was mainly due to market weakness, resulting in a decrease rental rates of commercial properties, especially that of the office buildings.

   Commercial properties operation income is analysed as follows:

   Date of Commencement	2024 RMB million	2023 RMB million
   Rental Income Shanghai Shimao Festival City December 2004 Jinan Shimao Festival City May 2014 Beijing Shimao Tower July 2009 Chengdu Shimao Festival City April 2021 Shenzhen Shimao Qianhai Center July 2020 Shanghai Shimao Tower December 2018 Changsha Shimao Global Financial September 2020 Center Kunshan Shimao Plaza April 2012 Nanjing Yuhua Shimao (Commercial) December 2018 Shaoxing Shimao Dear Town May 2010 (Commercial) Nanjing Straits City (Commercial) December 2014 Xiamen Shimao Straits Mansion January 2017 Xiamen Jimei Shimao Festival City April 2021 Suzhou Shimao Canal Scene June 2010 (Commercial) Quanzhou Shishi Shimao Skyscraper City January 2017 Qingdao Shimao 52+ August 2020 Wuhu Shimao Riviera Garden September 2009 (Commercial) Miscellaneous rental income	245 146 132 132 101 91 72 59 51 51 50 38 36 25 23 11 8 35	238 142 134 121 112 92 67 59 59 59 56 40 33 25 22 13 10 85
   Rental income sub-total Commercial properties operation related service income	1,306 361	1,367 373
   Total	1,667	1,740

4. Property Management Income, and Others

Property management income, and others decreased by approximately 3.2% to RMB8,172 million in 2024 from RMB8,443 million in 2023, which were mainly due to decrease in revenue from city services.

MANAGEMENT DISCUSSION AND ANALYSIS

Cost of sales increased by 22.8% to approximately RMB65,844 million in 2024 from RMB53,616 million in 2023, which was mainly due to the increase in provision for impairment losses on properties.

For the year ended 31 December 2024, the Group's gross profit margin was approximately -9.8% (2023 gross profit margin: 9.8%). The decrease in gross profit margin was due to the following reasons: higher average costs were recognised such as land cost and construction cost; provision for impairment losses on properties increased, which was affected by the continuous downturn in the real estate industry.

For the year ended 31 December 2024, the Group recorded aggregate fair value losses of approximately RMB2,813 million (2023: RMB5,878 million), mainly caused by the decrease in fair value of most investment properties due to the sustained slump in the commercial property market. Aggregate net fair value losses after deferred income tax of approximately RMB703 million (2023: RMB1,470 million) recognized was RMB2,110 million (2023: RMB4,408 million).

For the year ended 31 December 2024, the Group recognized net other losses of approximately RMB13,609 million (2023: net other losses of RMB3,849 million), which mainly comprised of loss of approximately RMB12,103 million on settlement of indebtedness and restructuring of certain PRC on-shore debts, loss of approximately RMB557 million on the disposal of subsidiaries, and loss of approximately RMB431 million from the liquidation of several subsidiaries which were adjudged bankrupt and under receivership procedures.

For the year ended 31 December 2024, the Group's selling and marketing costs decreased by 36.5% to approximately RMB901 million from approximately RMB1,420 million for the year ended 31 December 2023, which was in line with the decline in the Group's contracted sales.

For the year ended 31 December 2024, the Group's administrative expenses decreased by 16.6% to approximately RMB3,922 million from approximately RMB4,703 million for the year ended 31 December 2023. The Group's administrative expenses were mainly personnel costs, depreciation and amortization.

Given the combined impact of multiple unfavourable factors in macroeconomic, industry and financing environments, the Group made further provisions for expected credit losses of approximately RMB1,109 million during the year ended 31 December 2024.

For the year ended 31 December 2024, impairment losses on intangible assets were RMB46 million (2023: RMB121 million).

The impairment losses was mainly due to Shimao Services' impairment losses on goodwill arising from business combinations in prior years. Shimao Services' management built an impairment test model to monitor the operating performance of the acquired companies. Based on prudence principle, Shimao Services provided for certain impairment on goodwill of the acquired companies with lower-than-expected operating performance.

MANAGEMENT DISCUSSION AND ANALYSIS

For the year ended 31 December 2024, net finance costs increased by 51.5% to approximately RMB12,075 million (2023: RMB7,972 million), which was mainly due to the decrease in proportion of capitalized interest in total interest expenses compared to the year ended 31 December 2023, as the construction area of the Group's property development projects decreased.

For the year ended 31 December 2024, share of results of associated companies and joint ventures was losses of approximately RMB634 million, representing a decrease in loss of approximately RMB388 million compared with the year ended 31 December 2023, which was mainly due to the losses of recognized sales of properties of the Group's associated companies and joint ventures have narrowed in 2024 compared to that in 2023.

The Group's tax provisions amounted to approximately RMB1,648 million for the year ended 31 December 2024, in which PRC land appreciation tax ("LAT") was RMB990 million (2023: RMB1,355 million, in which LAT was RMB665 million). The increase in LAT was mainly due to the decrease in tax reimbursement.

Loss attributable to equity holders of the Company for the year ended 31 December 2024 increased to approximately RMB35.905 billion from approximately RMB21.030 billion for the year ended 31 December 2023. The increase in loss was mainly due to the decrease in the Group's gross profit and the increase in other losses.

As at 31 December 2024, the Group had aggregate cash and bank balances (including restricted cash) of approximately RMB15,752 million, representing a decrease of approximately RMB5,680 million as compared to approximately RMB21,432 million at 31 December 2023, of which restricted cash of approximately RMB4,399 million (31 December 2023: RMB6,246 million) and guarantee deposits for construction of pre-sale properties with an amount of approximately RMB5,318 million (31 December 2023: RMB7,535 million) were included.

As at 31 December 2024, the total amount of borrowings was approximately RMB252.051 billion, representing a decrease of approximately RMB11.912 billion as compared to approximately RMB263.963 billion at 31 December 2023.

The Group's borrowings-to-assets ratio (total borrowings divided by total assets) was approximately 57.8% as at 31 December 2024 (31 December 2023: 48.6%). The Group's current ratio (current assets divided by current liabilities) was approximately 0.9 as at 31 December 2024 (31 December 2023: 1.0).

MANAGEMENT DISCUSSION AND ANALYSIS

The Group's foreign exchange exposure is mainly derived from the borrowings denominated in USD and HKD.

The Group has been paying closely attention to the fluctuation of the foreign exchange rate and will be taking measures to mitigate the risk of exchange rate fluctuation if necessary.

As at 31 December 2024, the Group's total secured borrowings of approximately RMB218.051 billion were secured by its property and equipment, investment properties, land use rights, properties under development, completed properties held for sale and restricted cash (with a total carrying amount of RMB152.189 billion), and/or secured by the pledge of the shares of certain subsidiaries of the Group.

As of 31 December 2024, the Group had contracted capital and property development expenditure but not provided for amounted to RMB27.613 billion.

As of 31 December 2024, the Group employed a total of 41,481 employees, among whom 924 were engaged in property development. Total remuneration for the year amounted to approximately RMB4.858 billion. The Group has adopted a performance-based rewarding system to motivate its staff. The board of directors of the Company (the "Board") adopted two share award schemes (the "Share Award Schemes") of the Company on 30 December 2011 and 3 May 2021 respectively. The board of directors of Shimao Services also adopted a share award scheme (the "Shimao Services Share Award Scheme") of Shimao Services on 28 June 2021. The purpose of the Share Award Schemes and the Shimao Services Share Award Scheme is to recognize the contributions by certain selected employees of the Group and to provide them with incentives in order to retain them for the continual operation and development of the Group and to attract suitable personnel for further development of the Group. In relation to staff training, the Group also provides different types of programs for its staff to improve their skills and develop their respective expertise.

MANAGEMENT DISCUSSION AND ANALYSIS

1. Disclaimer of Opinion - Scope limitation relating to the assessment on the appropriateness of the going concern basis of preparing the Consolidated Financial Statements

   1. Details of audit modification

      Because of the details described in the section headed "Basis for Disclaimer of Opinion" in the "Independent Auditor's Report" on page 51 to 52 of this annual report, the Company's independent auditor, ZHONGHUI ANDA CPA Limited (the "Auditor"), do not express an opinion on the consolidated financial statements of the Group. The potential impact on the Group's financial position were described in the same section.

   2. Management's position and basis on major judgmental areas

      The management considered the going concern basis was appropriate due to the following reasons:

      1. Breakthroughs have been achieved in the offshore debt restructuring. The scheme of arrangement proposed by the Company achieved widespread engagement with a total of 2,079 scheme creditors, representing approximately US$11.5 billion of voting scheme claims, attending the scheme meeting on 24 February 2025. An overwhelming majority representing 98.75% of the total number of scheme creditors present and voting at the scheme meeting supported the scheme. The scheme was sanctioned and approved by the Hong Kong High Court on 13 March 2025.

      2. In 2024, the Company delivered approximately 51,000 housing units. From 2022 to 2024, nearly 90% of targeted deliveries were completed. Afterwards, the burden of housing delivery will be significantly alleviated.

      3. Since 2021, the Company's contracted sales have decreased year by year due to the domestic real estate market conditions, but the rate of decrease has progressively moderated. The Group achieved contracted sales of RMB34.0 billion for 2024, ranked 30th in domestic property companies in PRC.

         Since the major debt restructuring is yet to be completed, and the overall economic environment has not resumed, the Auditor expressed a disclaimer of opinion on the going concern basis of the Group.

   3. Audit committee's view towards the modification

      The audit committee understood from the Auditor that they could not form an opinion on the Company's consolidated financial statements due to the significance of multiple uncertainties relating to the going concern basis. After careful consideration, the audit committee was of the view that the management has been actively implementing a number of plans and actions in order to mitigate the liquidity pressure and improve the Group's financial position. Notably, the offshore restructuring is in final stage and expected completion in the first half of 2025. The audit committee has no objection to the management's position while the audit committee also understood that the Auditor might have a different view on the Group's going concern basis.

   4. Management's plans to address the modification

      The Company is taking the following actions to improve its operation and financial conditions:

      1. The Company is currently finalizing the closing procedures of its offshore debt restructuring. Completion is expected to become effective by the first half of 2025. Upon completion, defaulted offshore debt in the principal amount of approximately US$11.5 billion with accrued interest will be fully discharged by the relevant scheme creditors in exchange for:

         • short term instruments (with a tenor of 6 years)

         • long term instruments (with a tenor of 7 to 8.5 years)

         • mandatory convertible bonds (convertible into new shares of the Company within 1 year)

           MANAGEMENT DISCUSSION AND ANALYSIS

           The restructuring will reduce the overall debt size and debt pressure of the Group and improve its overall financial position. As the restructuring will be implemented through the scheme sanctioned by the court, all the claims under the relevant debt will be discharged in accordance with the law and the creditors will be prohibited from making further claim against the Company, which provides sufficient runway for the Company to stabilize its business.

      2. The delivery pressure will be significantly reduced since year 2025, with the planned delivery volume of housing units for 2025 being less than half of that for 2024, and the funding requirements for delivery will also be greatly reduced. At the same time, various projects are actively seeking local governments' whitelist financing. Up to the date of these consolidated financial statements, a total of approximately RMB399 million new loans was drawn for the Group's projects under the local governments' whitelists.

      3. The Company is accelerating sales of its existing inventory of properties. In the first two months of 2025, the Company has achieved contracted sales of RMB4.06 billion, representing significantly narrowed year-on-year decrease. The sales team of the Company has refocused on customer demand, and realigned product strategies with market trends to enhance competitiveness, in a bid to create products that cater to customers' needs. This approach has stabilized average selling prices while sustaining and improving sales performance.

      4. The Company is actively engaged in discussions with the PRC onshore lenders and creditors on the extension or restructuring of existing borrowings. Due to the diverse lender base and changing market conditions, the Company requires more time to negotiate the extension or restructuring plans with the lenders on a case-by-case basis. However, the successful offshore debt restructuring will release favorable signals to the PRC lenders and creditors of the Company. Management anticipates the Company will be able to finalize and execute the relevant extension or restructuring agreements progressively.

2. Limitation of scope on the valuation of assets relating to a property project

   1. Details of audit modification

      1. As a result of the matters described in the section headed "Other Matters" in the "Independent Auditor's Report" on page 52 of this annual report, the Auditor would otherwise have qualified opinion regarding the scope limitations on audit relating to limitation of scope on the valuation of assets relating to a property project, because the Auditor concluded that the opening balances of underlying properties of the relevant property project (the "Subject Assets") as of 31 December 2023 contain potential misstatements due to scope limitation in verifying the valuation of the carrying amounts of the Subject Assets. Therefore any subsequent changes in the valuation of the carrying amounts of the Subject Assets may be affected by the brought-forward effect of the potential misstatements.

         Due to the above constraints, the Auditor could not obtain sufficient audit evidence to justify whether additional fair value changes or impairment provisions on the Subject Assets (which may or may not correspond to the loss of approximately RMB9.7 billion recognised in the current year), should have been made in last reporting period, despite the disposal occurred in year 2024.

      2. Regarding the loss of approximately RMB9.7 billion recognised in the profit or loss for the current year, the Auditor have requested the Company to provide the basis for determining the loss and the supporting documents related to the disposal. The Company has provided the Auditor with the management's rationales for the recognised loss, along with relevant supporting documents including court judgement and asset auction details, during audit process. However, the Auditor were unable to justify whether the whole or a part of the recognised loss should be recognised in the current year or prior year due to the considerations mentioned in (i) above.

         MANAGEMENT DISCUSSION AND ANALYSIS

   2. Management's position and basis on major judgmental areas

      1. The management opines that, despite two rounds of unsuccessful court-ordered auctions took place before the approval of the Company's consolidated financial statements for the year ended 31 December 2023, the Subject Assets remained under Company's control and there was no active buyer participation or formal tender offers. Therefore, the Company engaged a third-party valuer to conduct a fair value assessment of the Subject Assets. Management considers that the Company has given due consideration to the Subject Assets' status and made impairment provision in the preparation of financial statements for 2023 and disclosed all relevant information to the Auditor during the audit process.

      2. In June 2024, the Subject Assets were transferred to its creditor pursuant to the court order, constituting a compulsory "debt-for-asset" settlement rather than a voluntary disposal. Consequently, the Company recognized a settlement loss of approximately RMB9.7 billion in its 2024 interim financial statements. Management confirms that this court-ruled transaction, occurring in post-2023 reporting period, does not retroactively impact the Subject Assets' valuation or impairment conclusions in the 2023 financial statements.

      3. The management has thoroughly considered and confirms that the financial statements for both 2023 and 2024 properly accounted for the Subject Assets' value based on events and information available up to the end of each reporting period, including post-balance-sheet-date adjustments where applicable. The recognition of the RMB9.7 billion loss in 2024 - attributable solely to the court-mandated transfer -reflects a distinct triggering event unrelated to prior-period valuations. Therefore, there is no prior-period misstatement as impairment assessments and loss recognition properly reflect timing of the material developments and comply with relevant financial reporting requirements.

   3. Audit committee's view towards the modification

      The audit committee has reviewed the relevant information provided by the Company's management concerning the above audit issue. Given the complexity of the valuation methodologies and unforeseeable consecutive events, after careful consideration, the audit committee agrees that the fair value assessment relating to the Subject Assets reflects the best knowledge of the management. The audit committee has no objection to the management's position.

   4. Management's plans to address the modification

The above audit issue was actually resolved with the Subject Assets transferred to the creditor. Therefore, there is no modified audit opinion toward the consolidated statement of financial position for the year ended 31 December 2024. However, having considered the brought-forward effect of the opening balances of the Subject Assets, the Auditor is preliminarily of the view that there is uncertainty with respect to the aforesaid loss recognised in the profit or loss for the year. As such, there is a modified audit opinion toward the opening balances of the Subject Assets and the respective loss recognised for the year ended 31 December 2024.

The directors (the "Directors") of Shimao Group Holdings Limited (the "Company") present their report and the audited consolidated financial statements of the Company and its subsidiaries (together the "Group") for the year ended 31 December 2024.

The Company is an investment holding company. The Group is principally engaged in the development and investment of residential and commercial properties, property management, commercial properties operation and hotel operation in the People's Republic of China (the "PRC"). The principal activities of its principal subsidiaries are set out in note 36 to the consolidated financial statements.

The results of the Group for the year ended 31 December 2024 are set out on pages 54 to 152 of this annual report.

The board of Directors (the "Board") did not recommend the payment of any final dividend for the year ended 31 December 2024 (2023: Nil).

A business review of the Group for the year ended 31 December 2024, a discussion of the Group's future business development and principal risks and uncertainties that the Group may encounter are provided in the Chairman's Statement on pages 4 to 6 and the Management Discussion and Analysis on pages 7 to 18 of this annual report. The financial risk management objectives and policies of the Group are shown in note 5 to the consolidated financial statements. An analysis of the Group's performance during the year using key financial performance indicators is set out in the Five Years Financial Summary on page 3 of this annual report. Particulars of important events affecting the Group that have occurred after the reporting period are set out in the Corporate Governance Report on 46 and note 41 to the consolidated financial statements on page 150 of this annual report. Discussions on the Group's environmental policies and performance and compliance with the relevant laws and regulations and an account of the Group's key relationships with its employees, suppliers and customers that have a significant impact on the Group are shown in the "Sustainability Report" published on the Company's website. The above discussions form part of this Report of the Directors.

Details of movements in the reserves of the Company and the Group during the year are set out in notes 43 and 22 to the consolidated financial statements.

The aggregate sales and purchases attributable to the Group's five largest customers and suppliers were less than 30% of the Group's total revenue and 30% of the Group's total purchases respectively during the year.

None of the Directors, their close associates or any shareholders (which to the knowledge of the Directors owns more than 5% of the number of shares of the Company (the "Shimao Group Shares") in issue had any interest in the major suppliers noted above.

Particulars of bank and other borrowings of the Group as at 31 December 2024 are set out in note 24 to the consolidated financial statements. The net proceeds are for refinancing the indebtedness, business development and other general corporate requirements of the Group.

Charitable and other donations made by the Group during the year amounted to RMB5,135,000 (2023: RMB1,306,000).

REPORT OF THE DIRECTORS

Details of property and equipment of the Group are set out in note 7 to the consolidated financial statements.

Details of movements in the share capital of the Company for the year ended 31 December 2024 are set out in note 21 to the consolidated financial statements.

A summary of the results and of the assets and liabilities of the Group for the last five financial years is set out on page 3 of this annual report.

There are no provisions for pre-emptive rights over the Shimao Group Shares under the Company's articles of association (the "Articles of Association") or the laws of the Cayman Islands where the Company is incorporated.

The Directors during the year and up to the date of this report are as follows:

Executive Directors

Mr. Hui Sai Tan, Jason (Chairman and President)

(appointed as Chairman on 1 September 2024) Mr. Xie Kun

Mr. Zhao Jun (appointed on 1 September 2024) Mr. Hui Wing Mau (Chairman)

(retired on 1 September 2024)

Ms. Tang Fei (resigned on 1 September 2024)

Non-executive Directors

Ms. Hui Mei Mei, Carol (appointed on 5 December 2024) Mr. Shao Liang (appointed on 26 April 2024)

Mr. Ye Mingjie (resigned on 26 April 2024)

Independent Non-executive Directors

Mr. Lyu Hong Bing Mr. Lam Ching Kam Mr. Fung Tze Wa

In accordance with Article 83(3) of the Articles of Association, Mr. Zhao Jun and Ms. Hui Mei Mei, Carol who were appointed as Directors after the last annual general meeting of the Company (the "AGM"), will hold office until the forthcoming AGM and, being eligible, have offered themselves for re-election as Directors at the forthcoming AGM.

In accordance with Article 84 of the Articles of Association, two Directors, namely, Mr. Xie Kun and Mr. Fung Tze Wah shall retire from office by rotation respectively at the forthcoming AGM and, all being eligible, have offered themselves for re-election as Directors at the forthcoming AGM.

None of the Directors, including Directors being proposed for re-election at the forthcoming AGM, has a service contract with the Company or any of its subsidiaries which is not determinable by the Group within one year without payment of compensation other than statutory compensation.

The Company has received, from each of the Independent Non-executive Directors, a confirmation of his independence pursuant to Rule 3.13 of the Rules Governing the Listing of Securities (the "Listing Rules") on The Stock Exchange of Hong Kong Limited (the "HKEx"). The Company considers that all the Independent Non-executive Directors are independent.

REPORT OF THE DIRECTORS

Save as disclosed in this report, no transactions, arrangements and contracts of significance in relation to the Group's business to which the Company, any of its subsidiaries or its holding company was a party and in which a Director or his/ her connected entity had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the year.

No contracts concerning the management and administration of the whole or any substantial part of the business of the Company were entered into or subsisted during the year.

The Group and Shimao Services Holdings Limited ("Shimao Services", together with its subsidiaries, the "Shimao Services Group"), a subsidiary of the Company, have adopted three share award schemes. The purpose of the share award schemes is to recognize the contributions by certain selected employees of the Group and Shimao Services Group and to provide them with incentives in order to retain them for the continual operation and development of the Group and Shimao Services Group and to attract suitable personnel for further development of the Group and Shimao Services Group.

No acceptance price of awarded shares will be payable upon acceptance of the said award and no purchase price is payable by the selected employees upon acceptance of awards granted under each share award scheme.

Details of each of the share award schemes are set out below:

1. 2011 Shimao Group Share Award Scheme

   A share award scheme of the Company (the "2011 Shimao Group Share Award Scheme") was initially adopted by the Board on 30 December 2011 (the "Adoption Date I"), with subsequent amendments thereafter. On 26 March 2019, the Board approved the 2011 Shimao Group Share Award Scheme to be valid and effective until 30 December 2027. The participants of the 2011 Shimao Group Share Award Scheme include an employee (including directors, supervisors or senior management) of any member of the Group.

   The maximum number of shares which can be awarded under the 2011 Shimao Group Share Award Scheme is 2% of the Shimao Group Shares in issue as at the Adoption Date I (i.e. 69,319,016 Shimao Group Shares). The maximum number of Shimao Group Shares which may be subject to an award or awards to a selected employee under the 2011 Shimao Group Share Award Scheme must not exceed 1% of the total number of issued Shimao Group Shares as at the Adoption Date I (i.e. 34,659,508 Shimao Group Shares).

   The number of Shimao Group Shares granted is determined based on the grantee's position, experience, years of service, performance and contribution to the Group. The Shimao Group Shares granted will automatically lapse if the grantee, among other things, terminates his/her service or employment relationship with the Group and other circumstances as provided in accordance with the rules of the 2011 Shimao Group Share Award Scheme.

   REPORT OF THE DIRECTORS

   During the year ended 31 December 2024, no Shimao Group Share was granted, vested or cancelled under the 2011 Shimao Group Share Award Scheme. Details of the movement of Shimao Group Shares granted under the 2011 Shimao Group Share Award Scheme during the year ended 31 December 2024 are set out below:

   Number of Shimao Group Shares

   Name of grantees Date of grant	Outstanding as at 1 January 2024	Granted during the year	Vested during the year	Lapsed/ cancelled during the year	Outstanding as at 31 December 2024
   Directors (Note 1) Hui Sai Tan, Jason 15 April 2020 (Note 2)	64,168	-	-	-	64,168
   15 April 2021 (Note 3)	55,325	-	-	-	55,325
   	119,493	-	-	-	119,493
   Xie Kun 15 April 2020 (Note 2)	48,445	-	-	-	48,445
   15 April 2021 (Note 3)	208,059	-	-	-	208,059
   	256,504	-	-	-	256,504
   Shao Liang 15 April 2020 (Note 2)	32,680	-	-	-	32,680
   15 April 2021 (Note 3)	28,708	-	-	-	28,708
   	61,388	-	-	-	61,388
   Ye Mingjie (resigned on 15 April 2020 (Note 2) 26 April 2024)	41,518	-	-	(41,518)	-
   Tang Fei (resigned on 15 April 2020 (Note 2)	72,272	-	-	(72,272)	-
   1 September 2024) 15 April 2021 (Note 3)	51,731	-	-	(51,731)	-
   	124,003	-	-	(124,003)	-
   Sub-total	602,906	-	-	(165,521)	437,385
   One highest paid 15 April 2020 (Note 2)	8,650	-	-	-	8,650
   individual (excluding 15 April 2021 (Note 3) Directors as disclosed above) (Note 1) Other Employees of 15 April 2020 (Note 2)	28,863 791,483	- -	- -	- (454,193)	28,863 337,290
   the Group 15 April 2021 (Note 3)	2,785,944	-	-	(1,085,042)	1,700,902
   Sub-total	3,614,940	-	-	(1,539,235)	2,075,705

   Total 4,217,846 - - (1,704,756) (Note 4) 2,513,090

   Notes:

   1. The five highest paid individuals of the Group for the year include four Directors and one individual. For details, please refer to notes 30(c) and 31 to the consolidated financial statements. Therefore, the Shimao Group Shares granted under the 2011 Shimao Group Share Award Scheme to the five highest paid individuals in aggregate are not disclosed separately.

   2. Subject to the satisfaction of the vesting criteria and conditions of the 2011 Shimao Group Share Award Scheme, 60% of awarded Shimao Group Shares will be vested after 12 months from the date of grant and 40% of awarded Shimao Group Shares will be vested after 24 months from the date of grant. The closing price of the Shimao Group Shares immediately before the date on which the awards were granted was HK$30.00 per share. The fair value of the awards at the date of grant was HK$29.56 per share, based on the closing price of the Shimao Group Shares on that date.

   3. Subject to the satisfaction of the vesting criteria and conditions of the 2011 Shimao Group Share Award Scheme, 60% of awarded Shimao Group Shares will be vested after 12 months from the date of grant and 40% of awarded Shimao Group Shares will be vested after 24 months from the date of grant. The closing price of the Shimao Group Shares immediately before the date on which the awards were granted was HK$23.10 per share. The fair value of the awards at the date of grant was HK$23.35 per share, based on the closing price of the Shimao Group Shares on that date.

   4. 1,704,756 Shimao Group Shares were lapsed during the year.

      REPORT OF THE DIRECTORS

      Since the Adoption Date I and up to the date of this report, a total of 48,751,338 Shimao Group Shares had been granted under the 2011 Shimao Group Share Award Scheme, representing approximately 1.41% of the total number of issued Shimao Group Shares as at Adoption Date I. The number of Shimao Group Shares available for future grant under the 2011 Shimao Group Share Award Scheme was 20,567,678 Shimao Group Shares, representing approximately 0.54% of the total number of issued Shimao Group Shares as at the date of this report.

2. 2021 Shimao Group Share Award Scheme

   Another share award scheme of the Company (the "2021 Shimao Group Share Award Scheme") was adopted by the Board on 3 May 2021 (the "Adoption Date II"). Unless terminated earlier by the Board, the 2021 Shimao Group Share Award Scheme is valid and effective for a term of three years commencing on the Adoption Date II. The participants of the 2021 Shimao Group Share Award Scheme include an employee (including directors, supervisors or senior management) of any member of the Group and Shimao Services Group.

   The maximum number of shares which can be awarded under the 2021 Shimao Group Share Award Scheme is 0.3% of the shares of Shimao Services (the "Shimao Services Shares") in issue as at the Adoption Date II (i.e. 7,091,919 Shimao Services Shares). The maximum number of Shimao Services Shares which may be subject to an award or awards to a selected employee under the 2021 Shimao Group Share Award Scheme must not exceed 0.3% of the total number of issued Shimao Services Shares as at the Adoption Date II (i.e. 7,091,919 Shimao Services Shares).

   The number of Shimao Services Shares granted is determined based on the grantee's position, experience, years of service, performance and contribution to the Group and Shimao Services Group. The Shimao Services Shares granted will automatically lapse if the grantee, among other things, terminates his/her service or employment relationship with the Group or Shimao Services Group and other circumstances as provided in accordance with the rules of the 2021 Shimao Group Share Award Scheme.

   REPORT OF THE DIRECTORS

   During the year ended 31 December 2024, no Shimao Services Share was granted, vested, lapsed or cancelled under the 2021 Shimao Group Share Award Scheme. Details of the movement of the Shimao Services Shares granted under the 2021 Shimao Group Share Award Scheme during the year ended 31 December 2024 are set out below:

   Number of Shimao Services Shares

   		Outstanding as at	Granted	Vested	Lapsed/ cancelled	Outstanding as at
   Name of grantees (Note 1)	Date of grant (Note 2)	1 January 2024	during the year	during the year	during the year	31 December 2024
   Employees of the Group	10 May 2021	33,381	-	-	-	33,381

   (including the employees of Shimao Services Group)

   Notes:

   1. No grantee is one of the five highest paid individuals of the Group for the year.

   2. Subject to the satisfaction of the vesting criteria and conditions of the 2021 Shimao Group Share Award Scheme, 60% of awarded Shimao Services Shares will be vested after 12 months from the date of grant and 40% of awarded Shimao Services Shares will be vested after 24 months from the date of grant. The closing price of the Shimao Services Shares immediately before the date on which the awards were granted was HK$19.74 per share. The fair value of the awards at the date of grant was HK$19.80 per share, based on the closing price of the Shimao Services Shares on that date.

      Since the Adoption Date II and up to the date of this report, a total of 6,865,821 Shimao Services Shares had been granted under the 2021 Shimao Group Share Award Scheme, representing approximately 0.29% of the total number of issued Shimao Services Shares as at Adoption Date II. As the 2021 Shimao Group Share Award Scheme was terminated on 3 May 2024, no further grant of Shimao Services Shares shall be made.

      REPORT OF THE DIRECTORS

3. Shimao Services Shares Award Scheme

   A share award scheme of Shimao Services (the "Shimao Services Share Award Scheme") was adopted by the Board of Shimao Services on 28 June 2021 (the "Adoption Date III"). The Shimao Services Share Award Scheme shall be valid and effective for a term of ten years commencing on the Adoption Date III. The participants of the Shimao Services Share Award Scheme include any employee of any member of the Shimao Services Group.

   The maximum number of Shimao Services Shares which can be awarded under the Shimao Services Share Award Scheme is 3% of the Shimao Services Shares in issue as at the Adoption Date III (i.e. 70,919,190 Shimao Services Shares). The maximum number of Shimao Services Shares which may be subject to an award or awards to a selected employee under the Shimao Services Share Award Scheme must not exceed 3% of the total number of issued Shimao Services Shares as at the Adoption Date III (i.e. 70,919,190 Shimao Services Shares).

   The number of Shimao Services Shares granted is determined based on the grantee's position, experience, years of service, performance and contribution to the Shimao Services Group. The Shimao Services Shares granted will automatically lapse if the grantee, among other things, terminates his/her service or employment relationship with the Shimao Services Group and other circumstances as provided in accordance with the rules of the Shimao Services Share Award Scheme.

   During the year ended 31 December 2024, no Shimao Services Share was granted, vested or cancelled under the Shimao Services Share Award Scheme. Details of the movement of Shimao Services Shares granted under the Shimao Services Share Award Scheme during the year ended 31 December 2024 are set out below:

   Number of Shimao Services Shares

   Name of grantees Date of grant	Outstanding as at 1 January 2024	Granted during the year	Vested during the year	Lapsed/ cancelled during the year	Outstanding as at 31 December 2024
   Directors of Shimao Services Cao Shiyang 16 November 2022 (Note 2)	96,945	-	-	-	96,945
   19 June 2023 (Note 3)	127,907	-	-	-	127,907
   	224,852	-	-	-	224,852
   Ye Mingjie (resigned on 26 April 2024) 19 June 2023 (Note 3)	374,610	-	-	(149,844)	224,766
   Sub-total	599,462	-	-	(149,844)	449,618
   Three highest paid individuals of	16 November 2022 (Note 2)	6,824	- - -		6,824
   Shimao Services Group (Note 1) (excluding Directors of Shimao Services as disclosed above) Other Employees of Shimao	19 June 2023 (Note 3) 16 November 2022 (Note 2)	26,010 1,476,514	- - (2,782) - - (235,827)		23,228 1,240,687
   Services Group	19 June 2023 (Note 3)	2,610,151	- - (704,789)		1,905,362
   Sub-total		4,119,499	- - (943,398)		3,176,101
   Total		4,718,961	- - (1,093,242) (Note 4)		3,625,719

   REPORT OF THE DIRECTORS

   Notes:

   1. The five highest paid individuals of Shimao Services Group for the year include two directors of Shimao Services.

   2. Subject to the satisfaction of the vesting criteria and conditions of the Shimao Services Share Award Scheme, 60% of awarded Shimao Services Shares will be vested after 6 months from the date of grant and 40% of awarded Shimao Services Shares will be vested after 18 months from the date of grant. The closing price of the Shimao Services Shares immediately before the date on which the awards were granted was HK$2.65 per Shimao Services Share. The fair value of the awards at the date of grant was HK$2.29 per share, based on the closing price of the Shimao Services Shares on that date.

   3. Subject to the satisfaction of the vesting criteria and conditions of the Shimao Services Share Award Scheme, 60% of awarded Shimao Services Shares will be vested after 12 months from the date of grant and 40% of awarded Shimao Services Shares will be vested after 24 months from the date of grant. The closing price of the Shimao Services Shares immediately before the date on which the awards were granted was HK$1.74 per Shimao Services Share. The fair value of the awards at the date of grant was HK$1.68 per share, based on the closing price of the Shimao Services Shares on that date.

   4. 1,093,242 Shimao Services Shares were lapsed during the year.

Since the Adoption Date III and up to the date of this report, a total of 7,542,551 Shimao Services Shares had been granted under the Shimao Services Share Award Scheme, representing approximately 0.32% of the total number of issued Shimao Services Shares as at Adoption Date III. The number of Shimao Services Shares available for future grant under the Shimao Services Share Award Scheme was 63,376,639 Shimao Services Shares, representing approximately 2.57% of the total number of issued Shimao Services Shares as at the date of this report.

Further details of the above three share award schemes are set out in note 21(b) to the consolidated financial statement.

Save as disclosed above, no equity-linked agreements that will or may result in the Company issuing shares or that require the Company to enter into any agreements that will or may result in the Company issuing shares were entered into by the Company during the year or subsisted at the end of the year.

REPORT OF THE DIRECTORS

As at 31 December 2024, the interests and short position of the Directors and the chief executive of the Company in the shares, underlying shares and debentures of the Company or its associated corporation (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the "SFO")) as recorded in the register required to be kept by the Company under section 352 of the SFO or as otherwise to be notified to the Company and the HKEx pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix C3 of the Listing Rules were as follows:

1. Long position in the shares of the Company

   Name of Directors

   Capacity/Nature of interests

   Number of ordinary shares held

   Approximate percentage of issued share capital

   Hui Sai Tan, Jason Beneficial owner 3,682,198 (Note 1) 0.097%

   Xie Kun Beneficial owner 332,804 (Note 2) 0.009%

   Shao Liang Beneficial owner 61,388 (Note 3) 0.002%

   Notes:

   1. The interests disclosed include deemed interests in 119,493 Shimao Group Shares granted under the 2011 Shimao Group Share Award Scheme.

   2. The interests disclosed include deemed interests in 256,504 Shimao Group Shares granted under the 2011 Shimao Group Share Award Scheme.

   3. The interests disclosed include deemed interests in 61,388 Shimao Group Shares granted under the 2011 Shimao Group Share Award Scheme.

2. Long position in the shares of associated corporation - Shimao Services

Save as disclosed above, no other interests or short position in the shares, underlying shares or debentures of the Company or any associated corporation (within the meaning of Part XV of the SFO) were recorded in the register.

REPORT OF THE DIRECTORS

Save as disclosed above, at no time during the year was the Company, any of its subsidiaries, or its holding company a party to any arrangement to enable the Directors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

As at 31 December 2024, the interests and short position of substantial shareholders in the shares and underlying shares of the Company as recorded in the register required to be kept by the Company under section 336 of the SFO were as follows:

Long/short position in the shares or underlying shares of the Company

Name

Nature of interests

Number of shares or underlying shares held

Approximate percentage of issued share capital

Long position

Hui Wing Mau Note 1 2,422,840,586 63.795%

Gemfair Investments Limited ("Gemfair") Beneficial owner 2,045,746,316 53.866%

Overseas Investment Group International Limited ("Overseas Investment")

Note 2 2,045,746,316 53.866%

Shiying Finance Limited ("Shiying Finance") Beneficial owner 377,094,270 9.929%

Notes:

1. The interests disclosed represent 2,045,746,316 Shimao Group Shares held by Gemfair and 377,094,270 Shimao Group Shares held by Shiying Finance. Both Gemfair and Shiying Finance are directly wholly-owned by Mr. Hui Wing Mau. By virtue of the SFO, Mr. Hui Wing Mau is deemed to be interested in Shimao Group Shares held by Gemfair and Shiying Finance.

2. The interests disclosed represent the right of Overseas Investment to vote on behalf of Gemfair as a shareholder at general meetings of the Company, pursuant to a deed dated 12 June 2006 between Gemfair and Overseas Investment, as long as Mr. Hui Wing Mau or his close associates (directly or indirectly) hold not less than 30% interest in the Company.

Save as disclosed above, no other interests and short position in the shares and underlying shares of the Company were recorded in the register.

REPORT OF THE DIRECTORS

The Articles of Association provides that the Directors, secretary or other officers of the Company shall be entitled to be indemnified out of the assets and profit of the Company from and against all actions, costs, charges, losses, damages and expenses which he or she may incur or sustain or about the execution of their duties in their respective offices.

During the year ended 31 December 2024:

1. Shanghai Shimao Co., Ltd. ("Shanghai Shimao"), a 66.18%-owned subsidiary of the Company, redeemed RMB3,408,600 of long-term bonds at a fixed interest rate of 4.15% on the Shanghai Stock Exchange ("SSE");

2. The Company increased its holdings of 102,378,663 shares of Shanghai Shimao on the SSE through its wholly-owned subsidiary, with an average share price of RMB1.07 per share; and

3. Shanghai Shimao repurchased 117,419,371 shares of Shanghai Shimao with its own funds on the SSE, with an average share price of RMB1.07 per share.

Save as disclosed above, neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of its listed securities during the year ended 31 December 2024.

Mr. Hui Wing Mau and his associates, the controlling shareholder of the Company (the "Controlling Shareholder"), holding approximately 63.8% of the issued share capital of the Company. The Controlling Shareholder, through companies wholly owned by him, provided loans in the aggregate principal amount of HK$3,963 million to the Company (including unreceived dividend), and loans in the aggregate principal amount of HK$3,839 million to subsidiaries of the Company.

Pursuant to the terms of the proposed restructuring of the offshore indebtedness of the Company, subject to the occurrence of the restructuring effective date, such shareholder loans will be exchanged as to US$600 million of the outstanding principal amount into long-term notes (the "Controlling Shareholder Notes"), and the balance of the aggregate principal amount of outstanding shareholder loans into zero coupon mandatory convertible bonds (the "Controlling Shareholder MCB").

The Controlling Shareholder Notes will have a tenor of 9.5 years and interest will be accrued and payable semi-annually in arrears on the outstanding principal amount entirely in kind at 2.0% per annum. The Controlling Shareholder Notes will share (i) the guarantees provided by certain subsidiaries of the Group on the obligations of the Company; and (ii) the collateral provided by the Company under the short term instruments and the long term instruments.

Assuming full conversion of the Controlling Shareholder MCB at the conversion price of HK$6.00 per share, 518,411,944 Shimao Group Shares will be issued at the agreed exchange rate of US$1 = HK$7.82. Such shares will be issued under a specific mandate sought from the independent shareholders of the Company (the "Independent Shareholders") at the extraordinary general meeting ("EGM").