LONGFOR GROUP HOLDINGS LIMITED 龍湖集團控股有限公司 (Incorporated in Cayman Islands with limited liability) （在開曼群島註冊成立之有限公司） （Hong Kong Stock Code╱香港股份代號：960） NOTIFICATION LETTER 通知信函 Dear Non-registered Shareholder (Note 1), 27 August 2025 Longfor Group Holdings Limited (the "Company") Notice of Publication of Circular for Scrip Dividend Scheme in Relation to the 2024 Final Dividend (the "Current Corporate Communication") The English and Chinese versions of the Company's Current Corporate Communication are available ...

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Core Insights - The article emphasizes the transformation of the real estate industry towards high-quality development, with a focus on the concept of "good housing" as a strategic shift from scale expansion to quality cultivation [1][3][10] - The collaboration between the China Real Estate Association, experts, and Dragon Lake Group aims to define and explore the standards and paths for "good housing" [1][3] Group 1: Industry Transformation - The "good housing" concept is defined by four key standards: safety, comfort, green, and intelligence, which serve as a framework for real estate companies [3][5] - The Secretary-General of the China Real Estate Association praised Dragon Lake's practices in "good housing" construction, suggesting that the industry should learn from their example [3][5] - Experts highlighted the need for a balanced approach in enhancing living comfort while efficiently utilizing land resources, indicating that Dragon Lake has a responsibility to lead the industry in this regard [3][5] Group 2: Product Innovation - Dragon Lake's projects, "Guancui" and "Yuhujing," have set benchmarks in Chongqing's market, achieving significant sales figures, with Yuhujing generating 620 million yuan in its first opening, setting a record for high-end projects in the region [6][8] - Approximately 60% of Yuhujing's sales came from repeat purchases or recommendations from existing owners, indicating strong brand loyalty and market acceptance [8] - The projects are recognized as national reference models for "good housing," showcasing their innovative approaches to urban living [6][10] Group 3: Urban Development - Dragon Lake's approach to "good housing" extends beyond individual projects, actively participating in urban living upgrades across over 100 cities in China [10] - The company integrates various functions such as real estate development, commercial investment, and property management to create a comprehensive ecosystem that enhances urban life [10] - The projects in Chongqing not only provide high-quality housing but also contribute to regional commercial vitality and lifestyle improvements, demonstrating a commitment to urban renewal [10]

Core Viewpoint - Longfor has successfully completed the repayment of two medium-term notes, totaling over 3.6 billion yuan, as part of its strategy to reduce debt and optimize its debt structure [1][2][3] Group 1: Debt Repayment Details - On August 26, Longfor completed payments for "22 Longfor Expansion MTN001" and "22 Longfor Expansion MTN002," with total principal and interest of 1.5495 billion yuan and 2.0523 billion yuan respectively [1] - The total issuance amount for "22 Longfor Expansion MTN001" was 1.5 billion yuan with an interest rate of 3.30%, while "22 Longfor Expansion MTN002" had an issuance amount of 2 billion yuan and an interest rate of 3.00% [1] - Longfor has now fully repaid all bonds due in 2023 [1] Group 2: Debt Management Strategy - Longfor's management has emphasized the importance of reducing overall debt levels and optimizing the debt structure, with 2025 being a critical year for debt conversion [1] - The company aims to steadily decrease its debt scale while ensuring timely bank financing and repayment [1] - Longfor has been actively repaying debts since July, including the repayment of 1.766 billion yuan for "22 Longfor 04" and 5.225 billion yuan for "20 Longfor Expansion MTN001B" [2] Group 3: Financial Health and Outlook - After the recent repayments, Longfor has cumulatively repaid approximately 14.5 billion yuan in bonds this year [3] - DBS Bank noted that optimizing the balance sheet and maintaining cash flow for debt repayment are key operational focuses for Longfor, indicating positive progress in its financial health [3] - Following the repayment of December's syndicated loans, Longfor is expected to clear its recent foreign debt [3]

Core Viewpoint - Longfor has successfully completed the repayment of two medium-term notes totaling over 3.6 billion yuan, demonstrating its commitment to debt reduction and financial stability [1][3]. Group 1: Debt Repayment Details - On August 26, Longfor completed payments for "22 Longfor Expansion MTN001" and "22 Longfor Expansion MTN002," totaling 3.6 billion yuan, with principal and interest amounts of 1.5495 billion yuan and 2.0523 billion yuan respectively [1]. - The total issuance amount for "22 Longfor Expansion MTN001" was 1.5 billion yuan with a bond rate of 3.30% and a term of 3 years; "22 Longfor Expansion MTN002" had an issuance amount of 2 billion yuan with a coupon rate of 3.00% and a maturity date of November 30 [1]. - Following these repayments, Longfor has settled all its bond maturities for the year, amounting to approximately 14.5 billion yuan in total bond principal and interest repayments [3]. Group 2: Debt Management Strategy - Longfor's management has emphasized the importance of reducing overall debt levels and optimizing the debt structure, with 2025 identified as a critical year for debt conversion [1]. - The company aims to steadily decrease its total debt while ensuring timely bank financing without delays or extensions, and to enhance its financing structure by increasing long-term debt and controlling short-term debt [1]. - Since July, Longfor has been actively working on debt reduction, including the repayment of various bonds and loans, indicating a focused strategy on financial health [2].

Core Viewpoint - Longfor Group has successfully completed the payment of two medium-term notes totaling over 3.6 billion yuan, fulfilling its debt obligations for the year [1] Group 1: Debt Payment Details - The total amount for the two payments is over 3.6 billion yuan, which includes 1.5495 billion yuan for the "22 Longfor Expansion MTN001" and 2.0523 billion yuan for the early repayment of "22 Longfor Expansion MTN002" [1] - "22 Longfor Expansion MTN001" has a total issuance amount of 1.5 billion yuan with an interest rate of 3.30% and a maturity of 3 years [1] - "22 Longfor Expansion MTN002" has a total issuance amount of 2 billion yuan with a coupon rate of 3.00% and a maturity date of November 30 [1] Group 2: Overall Debt Management - With these payments, Longfor Group has cumulatively repaid approximately 14.5 billion yuan in bond principal and interest this year [1] - All bonds due this year have now been fully repaid by Longfor Group [1]

Market Overview - In the week of August 18-24, 2025, the Kunming real estate market saw an increase in both transaction volume and prices, with a total of 4 projects supplying approximately 53,300 square meters, a 23% increase week-on-week [1] - Total transactions reached about 72,700 square meters, marking a 32% week-on-week increase, with an average transaction price of approximately 12,674 yuan per square meter, up 7% from the previous week [1] Key Projects - Longfor Tianjing achieved remarkable sales, topping the sales charts with a sales amount of approximately 131 million yuan, selling 73 units at an average price of about 15,088 yuan per square meter, and a unit price of approximately 1.79 million yuan [3] - The project recorded sales of about 410 million yuan on its opening day, featuring new unit types ranging from 89 to 235 square meters, and is noted for its high space efficiency and attractive design features [3][6] Competitive Landscape - The market remains polarized, with high-end properties like Bangtai Guanyun and Longfor Shanhai Yuanzhu continuing to perform well, achieving sales amounts of approximately 55 million yuan and 26 million yuan, with average prices around 18,836 yuan and 18,941 yuan per square meter respectively [6] - Conversely, affordable housing projects such as Bangtai Yingyue and Bangtai Huayuan City are also selling well, with average transaction prices of approximately 8,182 yuan and 4,725 yuan per square meter [6] New Supply and Demand - The newly launched Zhongtong Lian Dashushan project in Chenggong New City successfully sold 110 units with a take-up rate of 64%, offering units priced between 10,200 and 11,500 yuan per square meter [7] - The project is recognized for its high efficiency in space utilization, with some units achieving a remarkable 252% usable area ratio [7][10] Educational Infrastructure Development - The Longjie Village urban renewal project includes plans for a new primary school, with a total planned area of approximately 27,001.14 square meters [10][12] - The Guandu Ancient Town project is also set to include educational facilities, with a total land area of about 67.68 acres, aimed at enhancing local educational resources [12][14]

Investment Rating - The report maintains a "Positive" outlook for the real estate industry [6] Core Insights - The recent policy adjustments in Beijing and Shanghai align with expectations and are moderate in intensity, which will aid in regional inventory digestion. This series of "city-specific policies" strengthens confidence in the industry's long-term recovery path [1][4] - The recovery of real estate stocks does not solely depend on the timing of policy implementations; rather, the decline in risk-free interest rates and the reduction in industry risk assessments are the primary drivers of this recovery. The market has entered a new bottoming phase, where the impact of the denominator (risk-free rates) outweighs that of the numerator (real estate prices) [2] - The new policies in Shanghai, including the relaxation of purchase restrictions and adjustments to mortgage rates, are expected to stimulate demand in suburban areas, which will help reduce inventory [3] Summary by Sections Policy Developments - On August 25, Shanghai announced new housing policies, including easing purchase restrictions outside the outer ring and enhancing public housing fund support. The adjustments are expected to significantly impact the new housing market, particularly in suburban areas [3] - The report notes that the new policies are similar to those in Beijing, focusing on optimizing public housing fund policies and adjusting commercial loan rates to lower housing costs [3] Market Trends - Since Q2 of this year, the new housing market has shown signs of weakening in both volume and price, increasing the pressure for stabilization. The recent policies from Beijing and Shanghai have reinforced confidence in the industry's long-term recovery, with further policy space anticipated [4] Investment Recommendations - The report suggests focusing on specific stocks: China Merchants Shekou (001979, Buy), Poly Developments (600048, Buy), Beike-W (02423, Buy), Longfor Group (00960, Buy), and Gemdale Corporation (600383, Hold) [5]

Investment Rating - The report maintains a "Positive" outlook for the real estate industry [7] Core Viewpoints - Since Q2 of this year, real estate data has shown a continuous downward trend, yet there has been a notable hot sales performance for quality new properties in multiple regions. This contradiction is understood as a release of improvement-driven demand due to the introduction of high-efficiency residential projects, although the overall new housing market stabilization will require more time [2][4] - The recovery of the real estate industry and stock prices does not solely depend on the timing of policy implementations. The main drivers for the recovery are the decline in risk-free interest rates and the reduction in industry risk assessments. The real estate sector is currently in a bottoming phase, with the influence of the denominator (risk-free rates) surpassing that of the numerator (fundamentals), leading to a potential rebound in stock prices [3][4] Summary by Sections Market Performance - From January to July, the cumulative sales of commercial housing in China decreased by 6.5% in value and 4.0% in area year-on-year. In July alone, sales amounted to 532.5 billion, down 14.1% year-on-year, with a sales area of 57.09 million square meters, down 8.4% year-on-year [4] - The price of newly built commercial residential properties in first, second, and third-tier cities fell by 1.1%, 2.8%, and 4.2% year-on-year, respectively, with the decline narrowing compared to the previous month. Notably, Shanghai saw a price increase of 6.1% due to concentrated demand for high-end and improved housing [4] Policy Outlook - Given the weakening trend in the new housing market, there is significant room for future policy adjustments. Recent policy changes in Beijing and Shanghai include optimizing purchase restrictions and increasing support for housing funds, with expectations for Shenzhen to follow suit [5] - The year-on-year decline in new construction has been narrowing, attributed to improved cost-effectiveness of new land parcels, enhancing developers' profit outlook. From January to July, new construction area decreased by 19.4% year-on-year, but the decline has been narrowing for two consecutive months [5] Investment Recommendations - Recommended stocks to watch include China Merchants Shekou (001979, Buy), Poly Developments (600048, Buy), Beike-W (02423, Buy), Longfor Group (00960, Buy), and Gemdale Corporation (600383, Hold) [6]