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LVGEM Initially Assigned “BB-” by Lianhe Global, with “Stable” Outlook Author: CHINA LVGEM

(20th February 2020 – Hong Kong) LVGEM (China) Real Estate Investment Company Limited (“LVGEM (China)”, the “Company” or, together with its subsidiaries, the “Group”; stock code: 00095.HK) is pleased to announce that the Company was initially assigned “BB-” global scale Long-term Issuer Credit Rating with “Stable” outlook by Lianhe Ratings Global Limited (“Lianhe Global”). At the same time, the proposed senior unsecured USD notes (“the USD notes”) to be issued by Gemstones International Limited, a wholly-owned subsidiary of the Group, and unconditionally and irrevocably guaranteed by LVGEM has also been assigned “BB-” global scale Long-term Issuance Credit Rating.

According to the report of Lianhe Global, the Issuer Rating reflects LVGEM’s niche strategy and tactical arrangement with low-cost land acquisition of urban renewal projects, which results in higher than average-industry gross margins at approximately 60%, and also reflects the expectation that LVGEM would expand its operating scale in a prudent manner. The anticipated inclusion of the marque Bai Shi Zhou redevelopment project in Nanshan District of Shenzhen which will likely strengthen land bank quality and size while boosting its business scope regarding project portfolio and contracted sales. It also reflects our expectation that the company will maintain its operating metrics as well as financial leverages in the near-term.

LVGEM (China) roots in the Greater Bay Area (GBA) as a niche property developer and operator. Its residential and commercial property development businesses are primarily concentrated in Shenzhen, Zhuhai, Hong Kong, and other cities in the GBA. As the average selling price in the area is higher, it gains competitive advantages over the other property developers and competitors with higher sellable asset values. In addition, with the Company’s value-add expertise, industry know-how, and 30-year experience in the urban renewal business, it focuses on developing undervalued shantytown renewal projects in the GBA. From its business strategy to the nitty gritty details in different phases of the redevelopment timeline, the Company has unique strategy, strong ability of resource integration and cost control to drive the progress of urban renewal projects to maximize economic benefits.

The management of LVGEM (China) comments, the Company has been assigned “BB-” global scale Long-term Issuer Credit Rating that shows the capital market’s full affirmation to the Company’s asset quality and financial performance which can stabilize the investors’ confidence in the Company. In the future, the Company will focus on developing undervalued shantytown renewal projects in the GBA, and actively optimize the capital structure by creating different financing channels to create more profits so as to provide more values to shareholders and investors.

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