Chairman's Statement

Dear Shareholders,

On behalf of the board of directors (the “Board”), I am pleased to present you the operating results of the Company for the year ended 31 December 2019.

As of 31 December 2019, according to the Hong Kong Financial Reporting Standards (“HKFRS”), during the Reporting Period, as driven by the increase in the settlement area of the Company’s development properties, the Company recorded an operating revenue of RMB 20,122,314,000, representing a year-on-year increase of 12.67%. Profit before tax amounted to RMB 4,681,368,000, representing a year-on-year increase of 21.28%. Profit attributable to Ordinary Shareholders amounted to RMB 1,788,709,000, representing a year-on-year increase of 27.45%. In particular, the after-tax core operating results of the principal businesses of the Company (excluding gains arising from the changes in fair value) were RMB 1,674,967,000, representing a year-on-year increase of 26.96%. Gains (after tax) arising from the changes in fair value of investment properties were RMB 113,742,000 in the period. Earnings per share were RMB 0.53.

In retrospect of 2019, amid the continuous slowing down of the global economy and the marked escalation of risks and challenges at home and abroad, the Chinese government adhered to seeking progress while maintaining a stable performance to promote high-quality growth, thus the national economy maintaining within a reasonable range as a whole. Confronting the complicated international and domestic economic environments, the Company insisted on the three major strategies of low-cost expansion, brand expansion and capital expansion as its guideline and struggled ahead against difficulties, achieving a steady growth of operating revenue and another good performance in profit during the Reporting Period. In respect of development properties, the Company intensifies its efforts on strategic layout and improves the operation and management level in all rounds by insisting on the quick turnover principle under the guideline of “large-scale operation”. In term of investment properties, the Company has insisted on the development strategy of synergistic progress in asset-heavy investment business and asset-light service business to constantly accelerate its extension into convention and exhibition industrial chain, thereby enhancing the brand influence of the convention and exhibition of North Star on an ongoing basis.

Looking into 2020, in spite of the impact of the sudden Novel Coronavirus Pneumonia Epidemic at the beginning of the year on all sectors to some extent in the short term, the Chinese government will insist on the new development philosophy to promote continuous sound development of the economy and society, with the supply-side structural reform as the main line and the reform and opening up as the driving force, maintaining a long-term sound development of the country’s economy unchanged. Under the circumstance of opportunities and challenges coexisting, the Company will orient itself towards “operation with light asset, support by new economy, expansion at low cost and development of high-end service industry”, to propel high quality development of principal business of the Company. In particular, in terms of development properties, a solid foundation as well as focus on essence will be required to seek progress while maintaining a stable growth. Firstly, the mechanism construction should be optimized so as to promote development, construction and sales of existing projects. On the other hand, land reserves should be expanded in a sound, prudent and précised way. In terms of investment properties, the Company will capture chances and move forward under the circumstance. The Company will make great efforts on asset-light service business with incessant innovation while continuously refining and strengthening asset-heavy investment business. Furthermore, by taking advantage of comprehensive operation of the Company, multiple resources of all industries should be actively integrated and emerging opportunities from the integration of various industries should be exploited profoundly, to further enhance the core competitiveness of the Company.

I firmly believe that, all the staff members of North Star will, with strong sense of professionalism and high sense of responsibility, strive for building the nation’s top-notch brand enterprise of comprehensive real estate and the most influential brand enterprise of convention and exhibition in China, without disappointing investors who bestow trust on us.

Finally, on behalf of the Board, I would like to express our most sincere gratitude to all shareholders who have been supporting the development of the Company, and also to all the members of the Board, the supervisory committee and the management of the Company for their due diligence, and I would like to extend our heartfelt thanks to all the staff members of the Company for all the hard work they have done.

By Order of the Board

Li Wei-Dong