Beijing North Star : CONNECTED TRANSACTION IN RELATION TO ENTERING INTO GENERAL CONSTRUCTION CONTRACT

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CONNECTED TRANSACTION IN RELATION TO

ENTERING INTO GENERAL CONSTRUCTION CONTRACT

On 7 November 2019, Changsha Central Garden, a subsidiary of the Company (as the principal) entered into the General Construction Contract with CCFEB Third Company (as the contractor) in respect of the construction of the Changsha Project, pursuant to which CCFEB Third Company agreed to undertake the construction of the Changsha Project, be responsible for the civil works, installation and construction, water supply and drainage, fire protection, electrical engineering and other works under the Changsha Project.

IMPLICATIONS UNDER THE LISTING RULES

CCFEB Third Company is an indirect wholly-owned subsidiary of CSCEC and China Construction Second Engineering Bureau Ltd., a wholly-owned subsidiary of CSCEC, is a substantial shareholder of a subsidiary of the Company. Therefore, CCFEB Third Company is a connected person at subsidiary level of the Company under Chapter 14A of the Listing Rules. Accordingly, the transactions contemplated under the General Construction Contract constitute connected transactions of the Company under Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules exceed 1% but are less than 5%, the transactions contemplated under the General Construction Contract are subject to the reporting and announcement requirements but exempt from the circular, independent financial advice and shareholders' approval requirements under Rule 14A.76 of the Listing Rules.

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1. GENERAL CONSTRUCTION CONTRACT

On 7 November 2019, Changsha Central Garden, a subsidiary of the Company, entered into the General Construction Contract with CCFEB Third Company in respect of the construction of the Changsha Project. The principal terms of the General Construction Contract are summarised as follows:

Date:	7 November 2019
Parties:	(i) Changsha Central Garden, as the principal
	(ii) CCFEB Third Company, as the contractor
Project scope:	Pursuant to the requirements under the General
	Construction Contract, CCFEB Third Company
	is responsible for the civil works, installation and
	construction, water supply and drainage, fire protection,
	electrical engineering and other works under the
	Changsha Project, with a GFA of 161,876.83 square
	meters.
Contract period:	822 days
Construction contract	The Group invited public tender for the construction
price:	works under the General Construction Contract, and
	selected CCFEB Third Company as the tender winner
	after conducting relevant evaluation procedures and
	taking consideration of various factors, including
	technical experience, professional qualifications,
	business reputation, project management abilities of all
	the tenderers, total expenses and other relevant factors.
	The total contract price under the General Construction
	Contract was approximately RMB324,329,132.55, which
	was determined on arm's length basis after considering
	(i) all services required by Changsha Central Garden in
	respect of the Changsha Project and (ii) relevant design,
	procurement and prevailing market conditions of each
	construction project. The Board is of the view that the
	total contract price is fair and reasonable.
	The total contract price will be funded by internal
	resources of the Group.

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Payment terms:	The total contract price shall be payable on a monthly
	basis based on construction progress. However, after
	the construction project is completed, accepted and
	settled, the payment made by Changsha Central Garden
	to CCFEB Third Company shall not exceed 97% of the
	total settlement amount, and the remaining 3%, as the
	quality guarantee deposit, shall be paid upon expiry of
	the defect liability period.
Performance guarantee:	Within seven days after entering into the General
	Construction Contract, CCFEB Third Company shall
	submit to Changsha Central Garden a bank performance
	guarantee in an aggregate amount equivalent to 10%
	of the contract price and in the form as required by
	Changsha Central Garden.

2. REASONS FOR AND BENEFITS OF ENTERING INTO OF THE GENERAL CONSTRUCTION CONTRACT

It is within the normal business course of the Group to advance the construction of the Changsha Project and develop properties on the Changsha Land Lot. As an indirect wholly-owned subsidiary of CSCEC (one of the top 500 enterprises in the world), CCFEB Third Company possesses special-grade qualification as general contractor for construction of housing projects issued by the Ministry of Housing and Urban-Rural Development of the People's Republic of China. After due and careful consideration and comprehensive evaluation of the tenderers in terms of project quotation, qualification, experience and project quality, the Group selected CCFEB Third Company as the general contractor of the Changsha Project in accordance with relevant laws. The Group is of the view that, entering into of the General Construction Contract is vital to the advancement of the Changsha Project and enables the Company to benefit from the development of its principal business.

The Directors, including independent non-executive Directors, have confirmed that the terms of the General Construction Contract are fair and reasonable, and the transactions contemplated thereunder are on normal commercial terms or better in the ordinary and usual course of business of the Group, and in the interests of the Company and its shareholders as a whole. No Director has any material interest in the transactions contemplated under the General Construction Contract.

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1. IMPLICATIONS UNDER THE LISTING RULES
   CCFEB Third Company is an indirect wholly-owned subsidiary of CSCEC and China Construction Second Engineering Bureau Ltd., a wholly-owned subsidiary of CSCEC, is a substantial shareholder of a subsidiary of the Company. Therefore, CCFEB Third Company is a connected person at subsidiary level of the Company under Chapter 14A of the Listing Rules. Accordingly, the transactions contemplated under the General Construction Contract constitute connected transactions of the Company under Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules exceed 1% but are less than 5%, the transactions contemplated under the General Construction Contract are subject to the reporting and announcement requirements but exempt from the circular, independent financial advice and shareholders' approval requirements under Rule 14A.76 of the Listing Rules.
2. GENERAL INFORMATION
   The Company is principally engaged in development properties and investment properties (including hotels). Changsha Century Garden is principally engaged in the development of properties in Changsha, the PRC.
   CCFEB Third Company is principally engaged in business such as general contracting of construction engineering.
3. DEFINITIONS

"Board"	the board of Directors of the Company;
"CSCEC"	China State Construction Engineering Corporation Ltd.,
	a company incorporated in the PRC, which is principally
	engaged in businesses such as survey, design,
	construction, installation and consultation of domestic
	and overseas civil and construction engineering;
"CCFEB Third	China Construction Fifth Engineering Bureau Third
Company"	Construction Co., Ltd. ( 中 建 五 局 第 三 建 設 有 限 公
	司), a company established in the PRC and an indirect
	wholly-owned subsidiary of CSCEC;
"Changsha Century	Changsha Century Garden Real Estate Co., Ltd. ( 長 沙
Garden"	世 紀 御 景 房 地 產 有 限 公 司), a subsidiary of the
	Company;

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"Changsha Land Lot"	the land lot located at Shuxiang Road, Tianxin District,
	Changsha City, Hunan Province;
"Changsha Project"	the construction works of Buildings 28#-47# in Zone
	E+F2 of Xiangfu Century Residential Community on
	the Changsha Land Lot, the commercial and supporting
	house -1 in Zone E, the commercial and supporting
	house -2 in Zone E, the basement in Zone E, the
	basement in Zone F2, and the basement and garbage
	station in Zone F2;
"Company"	Beijing North Star Company Limited ( 北 京 北 辰
	實 業 股 份 有 限 公 司), a sino-foreign joint venture
	joint stock limited company incorporated in the PRC,
	whose A shares and H shares are listed and traded on
	the Shanghai Stock Exchange and the Stock Exchange
	respectively;
"connected person(s)"	has the meaning ascribed to it under the Listing Rules;
"Director(s)"	the directors of the Company;
"General Construction	the general contraction contract on construction and
Contract"	installation works entered into between Changsha
	Century Garden (as principal) and CCFEB Third
	Company (as contractor) in respect of the Changsha
	Project on 7 November 2019, the details of which are
	set out in the section headed "General Construction
	Contract" in this announcement;
"Group"	the Company and its subsidiaries;
"Hong Kong"	the Hong Kong Special Administrative Region of the
	PRC;
"Listing Rules"	the Rules Governing the Listing of Securities on the
	Stock Exchange;
"PRC"	the People's Republic of China, which for the purpose
	of this announcement excludes Hong Kong, the Macau
	Special Administrative Region and Taiwan;

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"RMB"	Renminbi, the lawful currency of the PRC;
"Stock Exchange"	The Stock Exchange of Hong Kong Limited; and
"%"	Percentage.

By order of the Board

BEIJING NORTH STAR COMPANY LIMITED

GUO Chuan

Executive Director and Company Secretary

Beijing, the PRC, 7 November 2019

As at the date of this announcement, the Board comprises nine directors, of whom six are executive directors, namely, Mr. HE Jiang-Chuan, Mr. LI Wei-Dong, Ms. LI Yun, Mr. CHEN De-Qi, Ms. ZHANG Wen-Lei and Mr. GUO Chuan and three are independent non-executive directors, namely, Mr. FU Yiu-Man, Mr. DONG An-Sheng and Mr. WU Ge.

Should there be any differences between the Chinese and English versions of this announcement, the Chinese version shall prevail.

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