[Caihua News] Suncity Group (01383-HK) announced that Shenzhen Liantian Real Estate (the company's indirect wholly-owned subsidiary, buyer) has successfully acquired 100% of Dongyang Xinguang Pacific Industrial (target company) in a judicial auction at a bid price of RMB 26.5 million (equivalent to about HK$31.05 million) and registered as the registered owner of 100% of the target company's shares on November 19, 2020. The target company is mainly engaged in shopping mall management and operation business in China.

The target company (as the lessee) and Zhejiang Xinguang Building Materials Decoration City Development Co., Ltd. (002147-CN, as the owner) entered into a lease agreement (revised and supplementary) for a period of 20 years from January 1, 2015 to December 31, 2034. The shopping plaza includes 620 units with a total floor area of about 65,200 square meters. It is located in Xinguangtiandi, No. 51, South Street, Wuning Street, Dongyang City, Zhejiang Province. According to public information, the shopping mall is currently divided into two separate periods (namely Phase I Shopping Plaza and Phase II Life Plaza) and leased to a number of independent third parties, while the occupancy rates of Phase I Shopping Plaza and Phase II Life Plaza for the six months ending June 30, 2020 were about 76.96% and 56.04% respectively.

Given that (i) the acquisition will expand the Group's revenue sources and diversify its business portfolio; (ii) the expertise of the target company's management team and potential synergies with the Group's leasing business; and (iii) the quality of shopping malls and the potential for further improvement, directors (including independent non-executive directors) believe that the acquisition is in the overall interests of the company and shareholders, and that its terms are based on general commercial terms, which is fair and reasonable.