年報 ANNUAL REPORT

年報 ANNUAL REPORT

Contents 2 6 8 9 16 44 62 72 94 108 119 120 121 124 126 130 328 Corporate Information Awards & Honors Award-Winning Projects Chairman s Statement Management Discussion and Analysis Land Bank Biographies of the Directors and Senior Management Directors Report Corporate Governance Report Independent Auditor s Report Consolidated Statement of Profit or Loss Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Five Years Financial Summary

Corporate Information BOARD OF DIRECTORS Executive Directors Mr. HUANG Xianzhi (Chairman of the Board) Mr. LIU Weiliang (Vice chairman of the Board) (appointed as vice chairman of the Board with effect from 26 March 2021) Mr. LI Yang (appointed with effect from 26 March 2021) Mr. CHAN Wai Kin Non-executive Director Mr. OU Guowei Independent Non-executive Directors Dr. LOKE Yu (alias LOKE Hoi Lam) Mr. WANG Chuanxu Mr. LIN Hua AUDIT COMMITTEE Dr. LOKE Yu (alias LOKE Hoi Lam) (Chairman) Mr. OU Guowei Mr. WANG Chuanxu NOMINATION COMMITTEE Mr. HUANG Xianzhi (Chairman) Mr. WANG Chuanxu Mr. LIN Hua 2 Zhenro Properties Group Limited

Corporate Information (FCG, HKFCG) 979 27 REMUNERATION COMMITTEE Mr. WANG Chuanxu (Chairman) Mr. HUANG Xianzhi Mr. LIN Hua JOINT COMPANY SECRETARIES Mr. CHEN Jian Ms. KWONG Yin Ping, Yvonne (FCG, HKFCG) AUTHORIZED REPRESENTATIVES Mr. HUANG Xianzhi Mr. CHAN Wai Kin AUDITOR Ernst & Young Certified Public Accountants Registered Public Interest Entity Auditor 27/F, One Taikoo Place 979 King s Road Quarry Bay, Hong Kong Annual Report 2021 3

Corporate Information www.zhenrodc.com 06158 Walkers Corporate Limited 190 Elgin Avenue George Town Grand Cayman KY1-9008 Cayman Islands PRINCIPAL BANKS Bank of China Fujian Province Branch Bank of China (Hong Kong) Limited Bank of China Shanghai Branch BNP Paribas China Citic Bank International Limited China Minsheng Banking Corp., Ltd. Hong Kong Branch Chiyu Banking Corporation Limited CMB International CMB Wing Lung Bank Limited Deutsche Bank Goldman Sachs (Asia) L.L.C. Hang Seng Bank Limited Industrial Bank Hong Kong Branch Industrial and Commercial Bank of China Shanghai Branch Standard Chartered Bank (Hong Kong) Limited The Bank of East Asia, Limited The Hongkong and Shanghai Banking Corporation Limited COMPANY S WEBSITE www.zhenrodc.com STOCK CODE 06158 CAYMAN ISLANDS PRINCIPAL SHARE REGISTRAR AND TRANSFER AGENT Walkers Corporate Limited 190 Elgin Avenue George Town Grand Cayman KY1-9008 Cayman Islands 4 Zhenro Properties Group Limited

Corporate Information 183 17 1712-1716 Walkers Corporate Limited 190 Elgin Avenue George Town Grand Cayman KY1-9008 Cayman Islands 666 73 1 62 HONG KONG SHARE REGISTRAR Computershare Hong Kong Investor Services Limited Shops 1712-1716, 17th Floor Hopewell Centre 183 Queen s Road East Wanchai Hong Kong REGISTERED OFFICE IN CAYMAN ISLANDS Walkers Corporate Limited 190 Elgin Avenue George Town Grand Cayman KY1-9008 Cayman Islands HEAD OFFICE IN THE PRC 3/F, Building 7, Hongqiao Zhenro Center 666 Shenhong Road Minhang District Shanghai, PRC PRINCIPAL PLACE OF BUSINESS IN HONG KONG 62/F, BOC Tower 1 Garden Road Central Hong Kong Annual Report 2021 5

Awards & Honors Organizer Awards & Honors IR China IR IR IRESG The 4th China Excellent IR Best Innovation Award The 5th China Excellent IR Best ESG Award The Asset AAA 2020 AAA 2020 Triple A Sustainable Capital Markets Regional Awards 2020 Best Green Bond (Real Estate) Triple A Sustainable Capital Markets Regional Awards 2020 Corporate Issuer of the Year Institutional Investor China Tonghai IR Best Investor Relations Investment Grade & High Yield Best Use of Debt Investment Grade & High Yield 2021 2021 All-Asia Executive Team (Small & Midcap Property) Best ESG 3rd Overall 2021 2021 All-Asia Executive Team (Small & Midcap Property) Best IR Program 3rd Overall 2021 2021 All-Asia Executive Team (Small & Midcap Property) Best CFO 3rd Overall 2021 2021 All-Asia Executive Team (Small & Midcap 2021 2020 Quam IR Awards 2020 Property) Best IR Professional 2nd Overall 2021 All-Asia Executive Team (Mainland China & Property) Best IR Professional 3rd Overall Hong Kong Investor Relations Association Best IR Company Best ESG (Environment) Best IR Team Best Investor Meeting Best Investor Presentation Material Corporate Governance Asia Asia s Best CEO (Investor Relations) Best Environmental Responsibility Best Corporate Communications Best Investor Relations Company (China) China Real Estate Association, Shanghai E-House Real Estate Research Institute, China Real Estate Appraisal TOP10 China Real Estate Top 10 Research, China Index Academy, China Index Holdings Ltd 2021 20 2021 China Real Estate Developers Top 20 2021 10 2021 China Real Estate Developers Top 10 by Efficiency 2021 2021 China Real Estate Developers Excellent Product Series 2021 2021 China Real Estate Developers Typical Projects 2021 20 2021 China Real Estate Developers Top 20 by Comprehensive Strength 2021 5 2021 China Real Estate Developers Top 5 by Business Performance 2021 TOP20 2021 China Top 100 Real Estate Developers Top 20 2021TOP10 2021 China Real Estate Product Excellence Enterprise Top 10 China Real Estate Model Enterprise of the Year by Poverty Alleviation 2021 2021 China Mainland Top 10 Real Estate Company TOP10 Listed in Hong Kong by Comprehensive Strength 2021 2021 China Mainland Top 10 Real Estate Company TOP10 Listed in Hong Kong by EVA ESG China Real Estate Excellent Enterprise by ESG Development 6 Zhenro Properties Group Limited

Awards & Honors Organizer Awards & Honors Zhitong Caijing, Tonghuashun Finance Best Real Estate Company Chinalou, China Urban Agglomeration Research Center Golden Building Award The Most Influential Real Estate Developer China Real Estate Association, Shanghai E-House Real Estate Research Institute, China Real Estate Appraisal 202110 2021 China Real Estate Developers Top 10 (Shanghai) TOP30 China Real Estate Human Capital Value Top 30 2021 20 2021 China Real Estate Developers Top 20 by Brand Value China Real Estate Developers Excellent Brand Project China Index Academy CRIC TOP100 TOP10 TOP100 China Top 100 Real Estate Company by Brand Value China Real Estate Product Excellence Brand China Top 10 Residential Real Estate Brand Value China Real Estate Developers Product Competitiveness Top 100 EH Consulting 2021TOP20 2021TOP20 TOP20 202110 20 10 TOP100 10 2021 China Property Developer Top 20 by Comprehensive Strength 2021 China Property Developer Top 20 by Brand Value China Top 20 Listed Real Estate Developer 2021 China Property Developer Top 10 by Corporate Social Responsibility China Top 20 Real Estate Developer with Steady Operation China Top 10 Real Estate Developer with Brand Innovation Capability China Property Developer Top 100 by Project Quality China Top 10 Real Estate Developer Architectural Craftsmanship Power Kincentric 2021 Best Employer China 2021 China Real Estate Business Guandian Property Kinpan.com/Times House National Business Daily China Real Estate Developer by Brand Value Influential Real Estate Developer of the Year Best Sales Space Award of the Year Valuable Listed Real Estate Companies of the Year China Civil Engineering Society Tien-yow Jeme Civil Engineering Prize Outstanding Residential District Gold Award Jiemian News Innovative Enterprises of the Year Annual Report 2021 7

Award-Winning Projects 8 Zhenro Properties Group Limited

Chairman s Statement

Chairman s Statement Dear shareholders, On behalf on the board (the Board ) of directors (the Director(s) ), I hereby present to you the results and business review of Zhenro Properties Group Limited ( Zhenro Properties or the Company ) and its subsidiaries (collectively the Group ) for the year ended and its outlook for 2022. 2.4% 36,992.466.4% 1,195.5 30.9%2,284.1 69.5%809.0 0.15 2019-2021 RESULTS For the year ended, the revenue of the Group increased by 2.4% year-on-year to RMB36,992.4 million; the profit decreased by 66.4% year-on-year to RMB1,195.5 million; the core profit (exclude changes in fair values of investment properties and financial assets, exchange gain or loss, gains or losses on disposal of financial assets, impairment loss and the relevant deferred taxes) decreased by 30.9% year-on-year to RMB2,284.1 million; and the profit attributable to owners of the parent decreased by 69.5% year-on-year to RMB809.0 million. The Board does not recommend the payment of a final dividend for the year 2021 (for the year ended 31 December 2020: HK$0.15 per share). MARKET AND BUSINESS REVIEW 2021 is a year in which the real estate industry suffered unprecedented challenges and profound changes, and it is also the closing year of the Group s 2019-2021 Three-year Strategy. Zhenro Properties has insisted on consolidating its foundation during development, accelerated sales and cash collection based on the cash flow oriented principle, and reduced land expenditure to cope with the difficulties faced by the industry. As the government intensively launched property-related policies in various fields such as finance, land and market supervision, and the local governments kept on tightening regulation in accordance with the requirements of the long-term effective mechanism, the real estate industry showed a trend of high-to-low sales. On the other hand, the centralized land supply policy has also changed the pattern of land acquisition of real estate companies. After the land market remained at high levels in the first half of the year, the overall land market began to cool down significantly in the second half of the year. The real estate companies suffered increasing pressure of cash crunch, leading to the weak enthusiasm of major real estate companies to acquire land. The Group has also sought after the optimal development strategy through multiple channels under difficult circumstances and tried its best to maintain a safe and stable financial situation. 10 Zhenro Properties Group Limited

Chairman s Statement Sales Target Basically Achieved In 2021, the Group has established a special task force to tackle the problems of aged inventory and idle assets (parking spaces and shops), which focused on solving aged inventory problems, pushed the sales of idle properties and assets (parking spaces and shops), relieved the inventory burden and optimized the asset structure. 1,456 2.6% 97.1% 14 294.3 90% In terms of contracted sales performance, the Group, together with its joint ventures and associated companies, recorded an aggregate contracted sales of RMB145.6 billion in 2021, representing a year-on-year increase of 2.6%, and achieving 97.1% of the annual sales target, which was better than the average of the Group s industry peers despite under the pressure that the overall sales target completion rate of large-scale real estate enterprises was far below their yearly historical records. Deep Penetration of First- and Second-Tier Regions and Solid Fundamentals In 2021, the Group acquired 29 parcels of land with a total estimated GFA of approximately 4.3 million sq.m. in 14 cities. Pursuing to the strategy of regional penetration, the Group expanded its business in the core metropolises. In terms of the tiers of cities, 90% of the newly acquired land bank was located in first- and second-tier cities with solid fundamentals. Facing the centralized land supply policy and the ever-changing operating environment, the Group has deepened its strategic cooperation with its industry peers to achieve a win-win cooperation by leveraging their respective management, capital and resource advantages, reducing the project development costs and enhancing project competitiveness. 3425.95 82% As at, the Group had a land bank with an aggregate GFA of 25.95 million sq.m. in 34 cities in the PRC, which is sufficient to support sales in 2022. 82% of the land bank was located in first- and second-tier cities, which is conducive to sales. Annual Report 2021 11

Chairman s Statement 40 17.5 13.2 15.1 11.0 Continuously Deepening Product Strategy Having positioned itself as Home Upgrade Master, the Group has focused on the market demand for home purchases aiming at securing a better living environment, committed to creating high-quality residential housing products, and gradually developed and presented four product lines, including Zhenro Mansion, Zhenro Runchen, Zhenro Pinnacle and Zhenro Yuandi. In addition, the product concept of Future Oasis of Zhenro Properties has fully covered the new projects. During the year, Zhenro Properties has ingeniously developed a smart living system, and a multi-functional and scenario-based smart community by using modern technology. While driving sales revenue, the Group s high quality products have also been recognized by various professional institutions in the industry. The Group won more than 40 honors by authoritative professional institutions such as Kinpan Award and Aesthetics Vogue Award during the year. Tough Environment for Financing and Tightening Cash Policies In 2021, the three red lines policy has continuously restrained the expansion of real estate enterprises in terms of financing, while the centralized real estate loan management policies controlled the flow of funds into the real estate sector from the bank side. During the first three quarters, the Group successfully seized several opportunities of financing under such pressure, and issued green senior notes with an aggregate amount equivalent to approximately US$1.75 billion and corporate bond of RMB1.32 billion. At the same time, the Group repaid and redeemed senior notes with an aggregate amount equivalent to approximately US$1.51 billion and corporate bond of RMB1.10 billion. However, in the second half of 2021, the external business environment of the real estate industry suffered significant changes. Against the backdrop of the increasingly tightening financing environment, many real estate enterprises have encountered liquidity problems. Zhenro Properties has taken active measures to fight against difficulties in the industry, such as accelerating sales and cash collection, reducing land expenditure and streamlining corporate organization. However, the Group encountered difficulties in refinancing its indebtedness in the capital markets since the fourth quarter of 2021 and the proportion of restricted cash has further increased, imposing pressure on the Company s cash flow. 85.5% 64.7%1.1 2.2 74.9% 76.6% As at, the Group s net debt-to-total equity ratio was 85.5% (end of 2020: 64.7%), its cash-to-short term debt ratio was approximately 1.1 times (end of 2020: 2.2 times) and its liabilities to asset ratio (excluding advanced sales proceeds) was 74.9% (end of 2020: 76.6%). 12 Zhenro Properties Group Limited

Chairman s Statement ESG ESG ESG ESG ESG ESG Promoting Green Development and Exploration of ESG Practice Zhenro Properties upholds the core value of prosperity from integrity and has established a diversified environmental, social, and governance ( ESG ) development system, it has formed a clear management structure covering the Board, the senior management and the ESG working committee comprising various functional departments, thus effectively reducing governance risks, which lays a solid foundation for sustainable development in the future. As a pioneer in implementing ESG philosophy in the real estate industry, the Group has incorporated ESG objectives into its strategic plan for long-term development and invested more resources in enhancing ESG work and relevant information disclosure. In addition, the Group attaches importance to twoway communication with different stakeholders and is committed to enhancing corporate transparency and building long-term relationships with stakeholders. 22 240 17.5 ESGBB BBB ESG ESG BBB E1/86 E1 In response to the green and low-carbon construction in urban areas proposed by the Ministry of Housing and Urban-Rural Development, the Group has set the construction of environment-friendly and green buildings as the focus of its internal environmental protection policy. The Group has invested capital in supporting innovative building design to effectively utilize materials, energy resources and space, etc., thus protecting the environment from the sources. As at, a total of 22 projects of Zhenro Properties were granted China 2- or 3-star green building certificates, with a total GFA of 2.4 million sq.m. In terms of green financing, the Group issued green senior notes with an aggregated amount of US$1.75 billion to support the refinancing of its green projects during the year. During the year, MSCI upgraded the ESG rating of Zhenro Properties from BB to BBB, which was the second time for MSCI to upgrade its ESG rating since December 2020. Moreover, China Chengxin Lvjin (Beijing) Co., Ltd. ( ) granted a BBB ESG rating to the Group, which was the highest rating given among the real estate enterprises assessed in the year. In addition, during the year, the Post-issuance Stage Certificate from Hong Kong Quality Assurance Agency and a green evaluation score of E1/86 (where E1 was the highest rating) from Standard and Poor s were granted for two green senior notes issued in September and November 2020, respectively, which showed the significant environmental benefits reaped from the green projects of the Group. Annual Report 2021 13

Chairman s Statement OUTLOOK Looking ahead to 2022, the Company anticipates that the market condition in the real estate sector remains under pressure. The PRC government will be focusing on the implementation of a long-term effective mechanism in the real estate industry, persisting in not using real estate as a tool and means to stimulate the economy in the short term, and strengthening the expectation management with the policies of houses are for living in, not for speculation and stabilizing land prices, property prices and expectations as the core. In consideration of the city-specific policies, it is expected to prolong the continuity and stability of regulatory policies; enhance the coordination and accuracy of regulatory policies; resolutely and effectively deal with the risks of overdue home delivery arising from debt defaults of some real estate companies; and keep on rectifying and standardizing the order of the real estate market. In addition, the policy is expected to moderately accelerate the development of the long-term rental housing market and further facilitate the construction of affordable housing. Although the financing channels of real estate companies have limited room for relaxation in the foreseeable future, the role of the real estate industry in supporting the overall stability of an economy cannot be ignored under the current downward pressure of the macro-economy. However, the first- and second-tier cities deeply penetrated by the Group will still release the demand for first-time house purchase and home purchases aiming at securing a better living environment, so the reasonable capital needs of individuals and enterprises are expected to be supported. In this new stage of industry development, the high-growth model arising from high leverage and high inventory of the real estate sector is bound to be unsustainable, and the core competitiveness of real estate companies will further originate from their own strengths. Year 2022 marks the ground-breaking year of the Group s new threeyear high-quality development and growth period. The Company will adhere to the business philosophy of stability first and try its best to ensure the stability of cash flow and to generate sufficient cash flow to meet its operation and financial commitments, including to explore the possibility to dispose certain assets to improve its overall liquidity. Based on the product philosophy of Home Upgrade Master and Ingenious Zhenro, the Group will continue to strive to operate and manage its business well amid the current crisis, consolidate the risk prevention and control system, manage the compliance risks in various respects amid the ever changing market, and guarantee the Company s cash flow, thereby achieving a stable and sustainable operation and development, and creating the maximum values for its shareholders and investors. 14 Zhenro Properties Group Limited

Chairman s Statement APPRECIATION Finally, on behalf of the Board, I would like to express our sincere appreciation to all shareholders, investors, business partners and customers for their support, and all employees for their dedication and hard work. We will continue to uphold our core value of prosperity from integrity and achieve sustainable and high-quality growth while bringing returns to shareholders and investors. We aim at developing the Company into a respectable enterprise with sustainable competitiveness. Zhenro Properties Group Limited HUANG Xianzhi Chairman of the Board Shanghai, China 31 March 2022 Annual Report 2021 15

Management Discussion and Analysis

Management Discussion and Analysis 145,643.0 2.6% 8.8 8.9 1.1% 16,545 15,949 PROPERTY DEVELOPMENT Contracted Sales For the year ended, the Group recorded contracted sales of RMB145,643.0 million, representing a 2.6% year-over-year increase from 2020; total contracted GFA sold amounted to approximately 8.8 million sq.m., representing a decrease of approximately 1.1% from approximately 8.9 million sq.m. for the year ended 31 December 2020. Contracted average selling price ( ASP ) for the year ended was approximately RMB16,545 per sq.m., compared with RMB15,949 per sq.m. for the year ended 31 December 2020. The following table sets forth the geographic breakdown of the Group s contracted sales in 2021. % of Contracted Contracted Contracted Sales ASP Sales % sq.m. RMB 000 RMB/sq.m. % Contracted GFA Sold Yangtze River Delta Region 4,026,511 78,283,194 19,442 53.8 Western Taiwan Straits Region 2,540,603 36,150,481 14,229 24.8 Bohai Rim Region 524,032 8,816,020 16,823 6.0 Central China Region 1,076,147 13,054,625 12,131 9.0 Western China Region 388,050 5,173,613 13,332 3.5 Pearl River Delta Region 247,299 4,164,949 38,816 2.9 Total 8,802,642 145,642,882 16,545 100.0 Annual Report 2021 17

Management Discussion and Analysis 36,518.8 35,601.42.6% 98.7% 11,614 12,295 5.5% Revenue Recognized from Sales of Properties Revenue recognized from sales of properties increased by approximately 2.6% from RMB35,601.4 million for the year ended 31 December 2020 to RMB36,518.8 million for the year ended, accounting for 98.7% of the Group s total revenue. The Group s recognized ASP from sales of properties was approximately RMB11,614 per sq.m. in 2021, representing a 5.5% decrease from RMB12,295 per sq.m. in 2020, primarily due to the increase in the proportion of GFA with a relatively lower ASP among total delivered GFA in 2021. The increase in revenue recognized from sales of properties was primarily due to more GFA completed and delivered as a result of the Group s continuing expansion. During the year of 2021, the properties delivered by the Group included Nanjing Zhenro Center, Nanjing Zhenro River Mansion, Foshan Zhenro Mansion, Wuxi Lake Heavens, Hefei Zhenro Mansion, Changsha Zhenro Fortune Center, Wuhan Zhenro Pinnacle and others. The following table sets forth the details of the revenue recognized from sales of properties of the Group by geographical location for the periods indicated. Recognized Revenue from Sales of Properties % of Recognized Revenue from Sale of Properties Total GFA Delivered Recognized ASP 2021 2020 2021 2020 2021 2020 2021 2020 % % RMB 000 RMB 000 % % sq.m. sq.m. RMB/Sq.m. RMB/Sq.m. Yangtze River Delta Region 11,011,393 13,990,535 30.2 39.3 834,997 935,718 13,187 14,952 Western Taiwan Straits Region 16,889,638 17,152,971 46.3 48.2 1,534,664 1,561,596 11,005 10,984 Bohai Rim Region 742,632 32,670 2.0 0.1 79,891 1,908 9,296 17,119 Central China Region 5,776,197 3,394,473 15.8 9.5 557,075 317,363 10,369 10,696 Western China Region 226,524 1,030,722 0.6 2.9 17,169 78,911 13,194 13,062 Pearl River Delta Region 1,872,380 5.1 120,600 15,526 Total 36,518,764 35,601,372 100.0 100.0 3,144,396 2,895,496 11,614 12,295 18 Zhenro Properties Group Limited

Management Discussion and Analysis 11,554.6 7,870.9 46.8% 131,073.2 117,686.7 11.4% Completed Properties Held for Sale Properties held for sale represent completed properties remaining unsold at the end of each financial period and are stated at the lower of cost and net realizable value. Cost of properties held for sale is determined by an apportionment of related costs incurred attributable to the unsold properties. As at, the Group had completed properties held for sale of RMB11,554.6 million, representing a 46.8% increase from RMB7,870.9 million as at 31 December 2020. The increase was primarily due to the increase in GFA completed. The Group has obtained the construction completion certificates in respect of all completed properties held for sale. Properties Under Development Properties under development are intended to be held for sale after completion. Properties under development are stated at the lower of cost comprising land costs, construction costs, capitalized interests and other costs directly attributable to such properties incurred during the development period and net realizable value. Upon completion, the properties are transferred to completed properties held for sale. As at, the Group had properties under development of RMB131,073.2 million, representing an 11.4% increase from RMB117,686.7 million as at 31 December 2020. The increase was primarily due to an increase in the number of projects developed by the Group in 2021. Annual Report 2021 19

Management Discussion and Analysis 111.1 118.9 6.6% COVID-19 12 788,051 7496,928 29 1.3 4.3 39,044.3 9,083 PROPERTY INVESTMENT Rental Income The Group s rental income for the year ended was approximately RMB111.1 million, representing a 6.6% decrease from RMB118.9 million for the year ended 31 December 2020. Rental income fell due to the impact of novel coronavirus ( COVID-19 ) pandemic. Investment Properties As at, the Group had 12 investment properties with a total GFA of approximately 788,051 sq.m. Out of such investment properties portfolio of the Group, 7 investment properties with a total GFA of approximately 496,928 sq.m. had commenced leasing. LAND BANK In 2021, the Group continued its deep penetration in the extended regions and cities. The Group acquired a total of 29 new land parcels with a total site area of approximately 1.3 million sq.m., an aggregate estimated GFA of approximately 4.3 million sq.m., a total contractual land premium of approximately RMB39,044.3 million and an average cost of approximately RMB9,083 per sq.m.. The following table sets forth details of the Group s newly acquired land parcels during the year ended. 20 Zhenro Properties Group Limited

Management Discussion and Analysis Properties Developed by the Group s Subsidiaries Average Land Cost (Based on the Estimated City Land Parcel/Project Name Site Area Estimated Total GFA Land Premium Total GFA) sq.m. sq.m. RMB million RMB/sq.m. Attributable Interest G32 31,902 122,873 3,230 26,287 31% Nanjing Nanjing South New Town Project G32 30,764 81,664 894 10,949 83% Hangzhou Hangzhou Heting Xiqing Mansion 103,259 341,460 2,405 7,043 50% Suzhou Suzhou Kunshan Kaifa District Parcel 34,012 118,011 445 3,768 100% Wuhan Wuhan Caidian Yuelong Mansion East A 53,117 187,139 858 4,586 34% Xi an Xi an Jinghe Lehuacheng A Parcel B 41,900 148,748 680 4,571 34% Xi an Xi an Jinghe Lehuacheng B Parcel 20,165 53,669 341 6,354 51% Quanzhou Quanzhou Jindong Zhenro Mansion 19,895 65,985 285 4,319 100% Putian Putian Hanjiang Zhenro Mansion 19,978 86,479 1,880 21,739 95% Xiamen Xiamen Zhenro Zhongliang Tianzhu Run Mansion 19,209 78,170 1,570 20,084 51% Xiamen Xiamen Lianfa Zhenro Mansion 46,429 118,173 740 6,262 100% Fuzhou Fuzhou Begonia Mansion 24,964 54,148 332 6,131 100% Fuzhou Fuzhou Jingxiu Mansion 19,515 57,895 325 5,614 51% Fuzhou Fuzhou Guanlan Mansion 58,507 190,917 2,091 10,952 51% Guangzhou Guangzhou Zhenro Seazen Yunxi Run Mansion 50,673 215,383 1,490 6,918 100% Guangzhou Guangzhou Zengcheng Parcel 12,679 72,580 1,021 14,072 50% Guangzhou Guangzhou Nansha Parcel 586,968 1,993,292 18,587 9,325 Subtotal Annual Report 2021 21

Management Discussion and Analysis Properties Developed by the Group s Joint Ventures and Associated Companies Average Land Cost (Based on the Estimated City Land Parcel/Project Name Site Area Estimated Total GFA Land Premium Total GFA) sq.m. sq.m. RMB million RMB/sq.m. Attributable Interest 32,844 98,429 1,640 16,662 45% Nanjing Nanjing Zhenro Runqi Mansion 48,786 166,679 1,210 7,259 40% Nanjing Nanjing Zhenro Runhe Mansion 52,122 219,040 2,841 12,969 43% Hangzhou Hangzhou Hangyao City 78,590 210,345 1,901 9,038 50% Wuxi Wuxi Zhenro Jade Yue 90,017 247,463 2,804 11,331 49% Hefei Hefei Binyu Riverside Garden 101,718 309,517 861 2,780 50% Fuyang Fuyang Qinghe Garden 64,921 219,254 392 1,788 25% Quanzhou Quanzhou Forest Garden 76,375 241,515 1,276 5,284 15% Nanchang Nanchang Zhenro Dongrun Mansion 46,551 142,883 2,660 18,617 49% Xiamen Xiamen Lianfa Zhenro Zhenhua Mansion 22,877 78,818 600 7,612 37% Putian Putian Lianfa Zhenro Yuhu Sky Land 51,714 111,924 1,037 9,265 49% Foshan Foshan Redco Guanshan Mansion 48,797 169,257 2,581 15,246 44% Guangzhou Guangzhou Liwan Parcel 32,702 90,278 655 7,255 50% Tianjin Tianjin Yunxi Run Mansion 748,014 2,305,402 20,457 8,874 Subtotal 1,334,983 4,298,694 39,044 9,083 Total 22 Zhenro Properties Group Limited

Management Discussion and Analysis 36,126.1 2.4% 36,992.4 FINANCIAL REVIEW Revenue The Group s revenue increased by approximately 2.4% from RMB36,126.1 million for the year ended 31 December 2020 to RMB36,992.4 million for the year ended. The following table sets forth the Group s revenue for each of the components, the percentage of total revenue represented and the relevant changes for the periods indicated. 2021 2020 Revenue % of Total Revenue Revenue % of Total Revenue Year-over- Year Change RMB 000 % RMB 000 % % Sales of properties 36,518,764 98.7 35,601,372 98.6 2.6 Property lease 111,101 0.3 118,916 0.3 (6.6) (1) Management consulting services (1) 167,047 0.5 239,980 0.7 (30.4) Property management services 67,666 0.2 88,118 0.2 (23.2) Sales of goods 127,790 0.3 77,703 0.2 64.5 Total 36,992,368 100.0 36,126,089 100.0 2.4 (1) 29,222.2 8.2% 31,610.0 Note: (1) Primarily includes revenue generated from provision of design consultation services to joint ventures and associated companies and third parties. Cost of Sales The Group s cost of sales primarily represents the costs directly incurred for the property development activities as well as commercial property management and leasing operations. The principal components of cost of sales for property development include cost of properties sold, which represents direct construction costs, land use right costs and capitalized interest costs on related borrowings for the purpose of property development during the period of construction. The Group s cost of sales increased by approximately 8.2% from RMB29,222.2 million for the year ended 31 December 2020 to RMB31,610.0 million for the year ended, primarily due to the increase in the number of properties completed and delivered by the Group during the year ended 31 December 2021. Annual Report 2021 23

Management Discussion and Analysis 6,903.922.0% 5,382.4 COVID-19 19.1% 4.5 14.6% 1,026.9 51.8% 1,559.3 1,159.7 7.2% 1,243.3 (i) (ii) Gross Profit and Gross Profit Margin As a result of the foregoing, the Group s gross profit decreased by approximately 22.0% from RMB6,903.9 million for the year ended 31 December 2020 to approximately RMB5,382.4 million for the year ended. Under the impact of the unfavourable macro market environment and the COVID-19 pandemic, selling prices of the projects were lowered. As a result, gross profit margin for the year ended decreased by 4.5 percentage points to 14.6% from 19.1% for the year ended 31 December 2020. Other Income and Gains The Group s other income and gains primarily consist of interest income, commercial compensation, gain on disposal of subsidiaries and others. Interest income primarily consists of interest income on bank deposits. Commercial compensation primarily represents forfeited deposits received from certain potential customers who did not subsequently enter into sales contracts with the Group and penalties received from certain customers due to their breach of sales or pre-sales contracts. Other income and gains increased by approximately 51.8% from RMB1,026.9 million for the year ended 31 December 2020 to RMB1,559.3 million for the year ended, primarily due to gain on disposal of subsidiaries in 2021. Selling and Distribution Expenses Selling and distribution expenses primarily consist of advertising, marketing and business development expenses, sales and marketing staff cost, office expenses, fees paid to third-party sales agents, rental and other expenses relating to sales of properties and property leasing services. The Group s selling and distribution expenses increased by approximately 7.2% from RMB1,159.7 million for the year ended 31 December 2020 to RMB1,243.3 million for the year ended, primarily due to (i) the strengthened selling and marketing efforts in promoting property projects in new cities and regions in which the Group operates; and (ii) the expansion of the Group s in-house sales and marketing team to support its business expansion in 2021. 24 Zhenro Properties Group Limited

Management Discussion and Analysis 1,138.3 4.6% 1,190.2 161.5 846.9% 1,528.8 COVID-19 201.2 324.0 Administrative Expenses Administrative expenses primarily consist of management and administrative staff costs, entertainment expenses, office and meeting expenses, stamped duties and other taxes, rental costs, depreciation of property, plant and equipment, professional fees, travelling expenses, bank charges and other general office expenses and miscellaneous expenses. The Group s administrative expenses increased by approximately 4.6% from RMB1,138.3 million for the year ended 31 December 2020 to RMB1,190.2 million for the year ended, primarily due to the increase in the number of projects developed by the Group. Other Expenses Other expenses increased by 846.9% from RMB161.5 million for the year ended 31 December 2020 to RMB1,528.8 million for the year ended 31 December 2021, primarily due to impairment losses recognised for properties under development, the expense for redemption of senior notes at premium, net loss on disposal of financial assets and donation expense. Fair Value Gains/Losses on Investment Properties The Group develops and holds certain commercial properties on a longterm basis for rental income or capital appreciation. Under the impact of the unfavourable macro market environment and the COVID-19 pandemic, there was a decrease in the fair value of investment properties as a result of the decline in demand for commercial property. For the year ended, the Group recorded a fair value losses on investment properties of RMB201.2 million, as compared with the fair value gains on investment properties of RMB324.0 million for the year ended 31 December 2020. Finance Costs Finance costs primarily consist of interest expenses for bank and other borrowings net of capitalized interest relating to properties under development. Annual Report 2021 25

Management Discussion and Analysis 504.8 27.8% 645.1 7.4 33.9 The Group s finance costs increased by approximately 27.8% from RMB504.8 million for the year ended 31 December 2020 to RMB645.1 million for the year ended, primarily due to an increase in the scale of total interest-bearing borrowings in 2021. Share of Profits of Joint Ventures and Associated Companies The Group s share of profits of joint ventures was approximately RMB7.4 million for the year ended, compared with the share of profits of RMB33.9 million for the year ended 31 December 2020, primarily due to the decrease in the number of properties delivered and the decline in profit margin for joint ventures. 263.2 545.3 The Group s share of profits of associated companies was approximately RMB263.2 million for the year ended, compared with the share of profits of RMB545.3 million for the year ended 31 December 2020, primarily due to the decrease in the number of properties delivered and the decline in profit margin for associated companies. Income Tax Expenses Income tax expenses represent corporate income tax and land appreciation tax ( LAT ) payable by the Group s subsidiaries in the PRC. 2,268.0 50.1% 1,130.9 37.6% 26.1% 3,558.966.4% 1,195.5 The Group s income tax expenses decreased by approximately 50.1% from RMB2,268.0 million for the year ended 31 December 2020 to RMB1,130.9 million for the year ended, primarily due to a decrease in the Group s profit before tax. The effective corporate income tax rate was 37.6% for the year ended, compared with 26.1% for the year ended 31 December 2020. Profit for the Year As a result of the foregoing, the Group s profit for the year decreased by approximately 66.4% from RMB3,558.9 million for the year ended 31 December 2020 to RMB1,195.5 million for the year ended. 26 Zhenro Properties Group Limited

Management Discussion and Analysis 14,727.1 35,477.9 8,132.4 609.6 16,261.0 6,885.0 47,959.5 41,761.3 4,438.9 4,555.0 21,740.2 20,968.1 LIQUIDITY, FINANCIAL AND CAPITAL RESOURCES The industry in which the Group engages is a capital-intensive industry. The Group has met, and expects to continue meeting, its operating capital, capital expenditure and other capital needs with proceeds from pre-sale and sale of properties, loans from commercial banks, proceeds from corporate debts or other securities offerings, and capital injections from shareholders. The Group s need for short-term liquid capital is mainly associated with loan repayments and capital needs for operation, and the Group s short-term liquid capital comes from cash balance, proceeds from pre-sale and sale of properties and new bank loans. The Group s need for long-term liquid capital is associated with capital allocated for new property development projects and repayment of long-term loan. Cash Positions As at, the Group had cash and cash equivalents of approximately RMB14,727.1 million (31 December 2020: RMB35,477.9 million), pledged deposits of approximately RMB8,132.4 million (31 December 2020: RMB609.6 million) and restricted cash of approximately RMB16,261.0 million (31 December 2020: RMB6,885.0 million). Indebtedness As at, the Group had total outstanding bank and other borrowings of approximately RMB47,959.5 million (31 December 2020: RMB41,761.3 million), corporate bond with carrying amounts of approximately RMB4,438.9 million (31 December 2020: RMB4,555.0 million) and senior notes with carrying amounts of approximately RMB21,740.2 million (31 December 2020: RMB20,968.1 million). The Group s borrowings are denominated in Renminbi, Hong Kong dollars and US dollars. Annual Report 2021 27

Management Discussion and Analysis The following table sets forth the Group s total borrowings as at the dates indicated: As at 31 December 2021 2020 RMB 000 RMB 000 Current borrowings: Bank borrowings secured 434,240 219,615 Bank borrowings unsecured 478,727 131,474 Other borrowings secured 6,869,986 Other borrowings unsecured 63,757 Plus: current portion of non-current borrowings Bank borrowings secured 13,197,495 9,785,574 Bank borrowings unsecured 3,389,358 570,990 Other borrowings secured 1,431,667 1,078,200 Other borrowings unsecured 1,105,719 Senior notes and Corporate bonds 8,564,529 6,656,983 Total current borrowings 34,429,759 19,548,555 Non-current borrowings: Bank borrowings secured 18,573,989 23,862,894 Bank borrowings unsecured 980,310 3,203,029 Other borrowings secured 2,540,000 1,207,800 Other borrowings unsecured 596,000 Senior notes and Corporate bonds 17,614,485 18,866,091 Total non-current borrowings 39,708,784 47,735,814 Total 74,138,543 67,284,369 The following table sets forth the maturity profiles of the Group s total borrowings as at the dates indicated: As at 31 December 2021 2020 RMB 000 RMB 000 Repayable within one year 34,429,759 19,548,555 Repayable in the second year 17,314,850 22,230,132 Repayable within third to fifth years 21,701,354 24,453,188 Repayable more than five years 692,580 1,052,494 Total 74,138,543 67,284,369 28 Zhenro Properties Group Limited

Management Discussion and Analysis 6.8% 6.5% 959.6 183.5 6,317.7 9,092.9 66,855.6 63,105.01,898.1 1,293.5 168.6 493.1 6,049.4 4,167.7 Additionally, for the year ended, the Group has issued a variety of corporate bonds and unsecured senior notes. Please refer to the section headed OFFERINGS, REPURCHASES AND REDEMPTIONS OF BONDS AND SENIOR NOTES below for more details. Borrowing Costs The Group s weighted average financing cost of debt was 6.8% for the year ended, compared with 6.5% for the year ended 31 December 2020. The increase was primarily due to the increase in the proportion of other borrowings which bear higher borrowing costs. Charge on Assets As at, the Group s asset portfolio included property, plant and equipment with carrying value of RMB959.6 million (31 December 2020: Nil), right-of-use assets with carrying value of RMB183.5 million (31 December 2020: Nil), investment properties with carrying value of approximately RMB6,317.7 million (31 December 2020: RMB9,092.9 million), properties under development with carrying value of RMB66,855.6 million (31 December 2020: RMB63,105.0 million), completed properties held for sale with carrying value of RMB1,898.1 million (31 December 2020: RMB1,293.5 million) and financial assets at fair value through profit or loss with carrying value of RMB168.6 million (31 December 2020: RMB493.1 million) were pledged as security for the Group s secured borrowings. OFF-BALANCE SHEET EQUITY DATA For the year ended, revenue attributable to the Group in proportion to the equity in joint ventures and associated companies was approximately RMB6,049.4 million. As at, cash and bank balances attributable to the Group in proportion to the equity in joint ventures and associated companies was approximately RMB4,167.7 million. Annual Report 2021 29

Management Discussion and Analysis 1.3 1.5 100 85.5% 64.7% FINANCIAL RISKS The Group primarily operates its business in the PRC. The currency in which the Group denominates and settles substantially all of its transactions is Renminbi. Any depreciation of Renminbi would adversely affect the value of any dividends the Group pays to shareholders outside of the PRC. The Group had cash at banks denominated in foreign currencies, which exposed the Group to foreign exchange risk. The Group currently does not engage in hedging activities designed or intended to manage foreign exchange rate risk. The Group will continue to monitor foreign exchange changes to best preserve the Group s cash value. Since the second half of 2021, Chinese property developers and the capital markets that have funded growth and development of the sector have experienced an inflection point characterized by a number of adverse developments, which have adversely impacted the Group s ability to obtain financing from the capital markets and other sources, and significantly curtailed the funding available to the Group to address its upcoming debt maturities. The Group will continue to work on generating sufficient cash flow to meet its financial commitments. KEY FINANCIAL RATIOS The Group s current ratio was 1.3 as at (31 December 2020: 1.5). The Group s net gearing ratio (defined as total borrowings less cash and bank balances divided by total equity as at the end of the year and multiplied by 100) was 85.5% as at (31 December 2020: 64.7%). 30 Zhenro Properties Group Limited

Management Discussion and Analysis (i) (ii) 34,711.3 32,161.3 12,981.9 2,604.5 35,880.8 28,716.1 CONTINGENT LIABILITIES Mortgage Guarantees The Group provides mortgage guarantees to banks in respect of the mortgage loans they provided to the Group s customers in order to secure the repayment obligations of such customers. The mortgage guarantees are issued from the date of grant of the relevant mortgage loans and released upon the earlier of (i) the transfer of the relevant real estate ownership certificates to the customers, or (ii) the settlement of mortgage loans by the customers. If a purchaser defaults on the mortgage loan, the Group is typically required to repurchase the underlying property by paying off the mortgage loan. If it fails to do so, the mortgagee banks will auction the underlying property and recover the balance from the Group if the outstanding loan amount exceeds the net foreclosure sale proceeds. As at, the material contingent liabilities incurred for the Group s provision of guarantees to financial institutions in respect of the mortgage loans they provided to the Group s customers were approximately RMB34,711.3 million (31 December 2020: RMB32,161.3 million). The Directors confirm that the Group has not encountered defaults by purchasers in which it provided mortgage guarantees that, in aggregate, had a material adverse effect on the financial condition and results of operations of the Group. Other Financial Guarantees As at, the guarantees given to banks and other institutions in connection with borrowings made to the related companies and third parties were approximately RMB12,981.9 million (31 December 2020: RMB2,604.5 million). Legal Contingents The Group may be involved in lawsuits and other proceedings in its ordinary course of business from time to time. The Group believes that no liabilities resulting from these proceedings will have a material adverse effect on business, financial condition or results of operations of the Group. Commitments As at, the Group s capital commitment it had contracted but yet provided for was RMB35,880.8 million (31 December 2020: RMB28,716.1 million). Annual Report 2021 31

Management Discussion and Analysis 400.0 6.63% I 300.0 6.70% II 220.0 5.98% I 340.0 7.10% OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS Except for the contingent liabilities disclosed above, as at, the Group did not have any outstanding loan capital issued or agreed to be issued, bank overdrafts, loans, debt securities, borrowings or other similar indebtedness, liabilities under acceptances (other than normal trade bills), acceptance credits, debentures, mortgages, charges, finance leases or hire purchase commitments, guarantees or other material contingent liabilities. OFFERINGS, REPURCHASES AND REDEMPTIONS OF BONDS AND SENIOR NOTES The Group continuously looks for financing opportunities to support its business development. These opportunities include raising funds through senior notes and corporate bonds offering plans. Offerings In January 2021, the Company issued green senior notes due January 2026 with an aggregate principal amount of US$400.0 million bearing interest at a rate of 6.63% per annum and listed on The Stock Exchange of Hong Kong Limited (the Stock Exchange ) (the 2026 Notes I ). In February 2021, the Company issued green senior notes due August 2026 with an aggregate principal amount of US$300.0 million bearing interest at a rate of 6.70% per annum and listed on the Stock Exchange (the 2026 Notes II ). In April 2021, the Company issued green senior notes due April 2022 with an aggregate principal amount of US$220.0 million bearing interest at a rate of 5.98% per annum and listed on the Stock Exchange (the 2022 Notes I ). In June 2021, the Company issued green senior notes due September 2024 with an aggregate principal amount of US$340.0 million bearing interest at a rate of 7.10% per annum and listed on the Stock Exchange. 32 Zhenro Properties Group Limited

Management Discussion and Analysis 1,300.0 300.0 1,600.0 7.125% In July 2021, the Company issued green senior notes due June 2022 in the principal amount of RMB1,300.0 million and RMB300.0 million, respectively, totalling an aggregate principal amount of RMB1,600.0 million bearing interest at a rate of 7.125% per annum and listed on the Stock Exchange. 1,320.0 6.3% In July 2021, Zhenro Properties Holdings Company Limited* ( ) ( Zhenro Properties Holdings, a wholly-owned subsidiary of the Company) issued corporate bonds due July 2025 with an aggregate principal amount of RMB1,320.0 million bearing interest at a rate of 6.3% per annum and listed on the Shanghai Stock Exchange. 250.0 6.50% II 310.0 310.09.15% 102.5% In September 2021, the Company issued green senior notes due September 2022 with an aggregate principal amount of US$250.0 million bearing interest at a rate of 6.50% per annum and listed on the Stock Exchange (the 2022 Notes II ). The Group intends to use the proceeds from these bonds and senior notes offerings to repay external borrowings and may also consider other financing plans in the future. Repurchases and Redemptions In March 2021, the Company redeemed an aggregate principal amount of US$310.0 million of all outstanding senior notes due March 2022, originally issued with an aggregate principal amount of US$310.0 million bearing interest at a rate of 9.15% per annum and listed on the Stock Exchange. The redemption was made at a price equal to 102.5% of the principal amount of the outstanding senior notes, plus accrued and unpaid interest, to (but not including) the redemption date. All such redeemed senior notes were cancelled in March 2021. 1,000.0 1,000.0 7.40% 100% In June 2021, the Company redeemed an aggregate principal amount of RMB1,000.0 million of all outstanding senior notes due August 2021, originally issued with an aggregate principal amount of RMB1,000.0 million bearing interest at a rate of 7.40% per annum and listed on the Stock Exchange. The redemption was made at a price equal to 100% of the principal amount of the outstanding senior notes, plus accrued and unpaid interest, to (but not including) the redemption date. All such redeemed senior notes were cancelled in June 2021. Annual Report 2021 33