Planetree International Development : Supplemental announcement in relation to the annual report for the year ended 31 December 2019

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Planetree International Development Limited

梧 桐國 際發 展 有 限 公司

(Incorporated in Bermuda with limited liability)

(Stock code: 00613)

SUPPLEMENTAL ANNOUNCEMENT

IN RELATION TO THE ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2019

Reference is made to the annual report of Planetree International Development Limited (the "Company", together with its subsidiaries, the "Group") for the year ended 31 December 2019 (the "2019 Annual Report").

In addition to the information disclosed in the section titled "Management Discussion and Analysis" in the 2019 Annual Report, the board of directors of the Company (the "Board") would like to provide further information in respect of the significant investments held by the Group with a value of 5% or more of the Group's total assets as at 31 December 2019 as follows:

								Approximate
	Number of	% of						% to the
Name of	shares held	shareholding	Realised				Market value	Group's total
investments	as at	as at	gain/(loss)	Unrealised	Dividends		as at	assets as at
(listed shares in	31 December	31 December	for the year	gain for the	received for	Investment	31 December	31 December
Hong Kong)	2019	2019	2019	year 2019	the year 2019	cost	2019	2019
			HK$'000	HK$'000	HK$'000	HK$'000	HK$'000
China Dili Group
(stock code:
1387)	87,399,360	1.53%	Nil	13,000	Nil	202,900	214,100	10.49%
Newton Resources
Limited
(stock code:
1231)	127,198,000	3.18%	(2,800)	3.600	Nil	115,200	122,100	5.98%

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The principal businesses of the underlying companies and prospects and investment strategy of the Group's significant investments during the year 2019 were detailed as follows:

1. China Dili Group ("Dili") (Stock Code: 1387)
   Dili and its subsidiaries principally engage in the operation of agriculture wholesale markets in the People's Republic of China.
   According to Dili's annual report 2019, the year 2019 was the first year of the implementation of Dili's transformation and upgrade strategies. In the beginning of 2019, Dili affirmed the overall business strategy of transforming into an advanced fresh food distribution service provider and supplier. To support the transformation, Dili laid out a brand new group organization structure and management system, and also completed the building of a digital platform for integrated fresh food distribution services. In the second-half of 2019, Dili completed the acquisition of 19% equity interests in "Dili Fresh", the downstream fresh food retail business. The acquisition is one of the key milestones for Dili's transformation. In addition, Dili also kick-started the new project in Kunming, namely the Kunming International Agricultural Produce Logistic Park (昆明國際農產品物流園), and completed the acquisition of the relevant land site through the government open auction procedures. The new project will be an important layout within Dili's strategic position in the fresh food distribution industry. The city of Kunming is not only an important production and distribution hub of premium fruits and various special vegetables grown in the highland area, but also a key distribution center for agricultural produce imported from Southeast Asia region. It has an invaluable strategic position in both the upstream and downstream segment along the fresh food circulation industry chain. Also, Dili is accelerating the acquisition of the land and related assets of the existing 7 wholesale markets. Since the transformation, Dili has started to gain profit and recorded a net profit of RMB570 million for the year 2019 compared to a loss of RMB349 million for the year 2018. From a short to medium term perspective, Dili appears to have good prospects and the Company considers its investment in Dili has strategic investment value.
2. Newton Resources Limited ("Newton") (Stock Code: 1231)
   Newton principally engages in the mining and resources industry and carries out its trading business of iron ores. Through securing the stable and sustainable supply of quality iron ore and other commodities from reputable overseas mines on a long-term basis, Newton has been successfully transformed from a pure mine owner and operator, which essentially involves both the investment in and operation of mines and the sale of resources extracted, into a commodity supplier, specialising in the offering of a wide spectrum of iron ore products and other commodities and the distribution of resources extracted by and sourced from its own mines and/or other independent mine owners. As such, the business of Newton has evolved into a resources business (the "Resources Business").

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According to Newton's annual report 2019, Newton entered into the assignment and novation agreement with Shougang Concord International Enterprises Company Limited for the acquisition of the contractual rights and obligations to purchase hematite ore from the Hematite Mine owned by Koolan Iron Ore Pty Limited ("Koolan") in May 2019. The Hematite Mine is well known for its high grade quality hematite ore and Koolan is an established producer of high quality, direct shipping grade iron ore products in Australia. Apart from the supply from the Hematite Mine, Newton has been devoting to expanding the supplier network and building relationships with mine owners, with a view to improving the quality and reducing the per unit cost of products offered, and diversifying its product offerings. As a result, Newton also sourced new iron ore supplies from other overseas mines in Australia, South Africa and Brazil during the year ended 31 December 2019 ("FY 2019"). Newton has demonstrated its ability to engage new suppliers and will continue in its persistent drive for expansion of its supplier network. Newton sold approximately 3.0 Mt of iron ore and recognised revenue from the sales of iron ore under the Resources Business during FY 2019 of RMB1,913.2 million, representing an increase by more than five times. Through evolution of and scaling up the Resources Business, Newton has achieved an increase in overall gross profit to RMB30.2 million, representing a gross profit margin of approximately 1.6% for FY 2019. In view of Newton's improved financial performance and the strength of its substantial shareholders, the Board is still optimistic with Newton's prospects and considers its investment in Newton has strategic investment value.

Going forward, the Group will continue to pursue attractive investment and business opportunities which will have strategic investment value and is in line with the Group's corporate mission and goals. However, the Group expects that the stock markets in Hong Kong and the PRC will remain challenging for 2020, as the COVID-19 continues to haunt the world and economies across countries show signs of slowing down. Accordingly, the Group will continue to adopt prudent capital management and liquidity risk management policies and practices to preserve adequate buffer to meet the challenges ahead.

The additional information set out above does not affect other information contained in the 2019 Annual Report.

By order of the Board

Planetree International Development Limited

Man Wai Chuen

Executive Director

Hong Kong, 17 August 2020

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As at the date of this announcement, the Board comprises the following directors:

Executive Directors:	Non-Executive Director:
Dr. Leung Wing Cheung, William	Mr. Kwong Kai Sing, Benny
(Executive Chairman)
Mr. Lam Hiu Lo	Independent Non-Executive Directors
Mr. Liang Kang	Mr. Chan Sze Hung
Ms. Cheung Ka Yee	Mr. Ha Kee Choy, Eugene
Ms. Wong Sheun Fun, Estella	Mr. Zhang Shuang
Mr. Man Wai Chuen	Mr. Chung Kwok Pan

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