Shenzhen Investment Limited : Shenzhen Investment announced first step asset injection

[For immediate release] Shenzhen Investment Limited Announced First Step Asset Injection

(22 January 2013 - Hong Kong) Shenzhen Investment Limited ("SZI" or the "Group", SEHK stock code: 604.HK), the leading mid-to-high end property developer in Shenzhen, is pleased to announce the signing of conditional agreement with Shumyip Holdings Company Limited ("Shumyip"), the parent company, on 17 January 2013 to acquire 100% of Kezhigu project for RMB4.15bn, and to issue 1.41bn new shares to Shumyip at HK$3.667 per share to pay the consideration, with 9.1% premium to the last closing price.

Asset to be injected-Kezhigu project

Kezhigu project sits in prime location of Futian district, only 5 minutes away from CBD with very convenient transportation. Surrounded by three city parks: Lotus Hill Park, Bijia Hill Park and Central Park, the site enjoys exclusive landscape.
The project has land area of 121,225 sqm and gross floor area ("GFA") of 788,910 sqm. It is complex project, with high end luxury service apartment, Grade A office tower, LOFT office space for SMEs, shopping mall and a 5-star luxury hotel. It is designed and positioned as a new landmark in Shenzhen that provides high-end business center for innovative industry and high-end service industry.
In this acquisition, our total land cost is around RMB 9.6bn including the debt of the target company and the unpaid land premium of RMB2bn, equals to around RMB12,000 per sqm.

Share issue

SZI is going to issue 1.41bn new shares to Shumyip as payment for the consideration. Share price is proposed at HK$3.667 per share, with 9.1% premium to the last closing price of HK$3.36. The whole transaction and share issue is subject to the approval by independent shareholders on EGM. By completion of this deal, Shumyip will hold 59.7% of the enlarged share capital of SZI.
Post deal, SZI will have land bank of 11m sqm, of which 16% is in Shenzhen.
The acquisition of Kezhigu is the first step of our whole asset injection story. Shumyip, our parent company owns another 2m sqm of GFA land bank in Shenzhen, and these are our potential resources. We believe that the injection will significantly enhance our land bank quality and profitability, and provide substantial growth.
SZI is bullish on Shenzhen market for long term. With the injection plan right on track, SZI may own 4 million sqm of quality land bank in Shenzhen in 3 to 4 years' time. We aim to become the leading regional developer in Shenzhen region.
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Shenzhen Investment Limited Announced First Step Asset Injection

22 January 2013, Page 2

Background:

SZI listed on the Stock of Exchange in Hong Kong as a red chip since 1997, is a mid-to-high end property developer in Southern China. It is 43.91%-owned by Shenzhen's municipal government. As of 30 June 2012, SZI had land reserves of about 11.50 million square meters in gross floor areas. The Group also holds approximately 600,000 square meters in gross floor areas of investment properties at prime locations in Shenzhen.
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