Dear Shareholders,

On behalf of China New City Commercial Development Limited (the "Company") and its subsidiaries (collectively referred to as the "Group"), I am pleased to present the annual results of the Group for the year ended 31 December 2019 ("the year under review").

REVIEW OF RESULTS

During the year under review, the revenue of the Group was approximately RMB1,956 million. Our property business reported sales of nearly RMB1,535 million. The gross profit of the Group was approximately RMB778 million. The profit of the Group was approximately RMB45 million.

During the year under review, the Group recorded a profit attributable to owners of the parent of approximately RMB26 million; and the earnings per share attributable to ordinary equity holders of the parent was approximately RMB1.3 cents. The board of directors of the Company (the "Board") do not recommend the payment of any final dividend for the year under review.

MARKET AND BUSINESS REVIEW

In 2019, the Chinese economy maintained steady growth with a year-onyear gross domestic product ("GDP") growth rate of 6.1%. As affected by factors such as Sino-US trade war, accelerated aging population, and weakening domestic demand consumption, the Group continued to adhere to the consistent principle of prudent investment and sound operation. Under the key tone of national policy of "houses for habitation not for speculation", a number of policies were introduced to maintain regulation and control over real estate industry. On the one hand, the Group sought to strengthen its main real estate business and to improve its diversified industries; and on the other hand, the Group integrated various business platforms to create synergy through the coordinated development among industries. Driven by China's market policy, the Group will continue to serve the needs of human beings for a better life and promote new breakthroughs in the Group's performance in order to achieve better performance.

1. Property Sales
Located in the prime location of Qianjiang Century City, IOC• Jiarun Mansion Project ("Jiarun Mansion") is the Plot A3 project of Hangzhou International Office Center ("IOC") in the core location of Qianjiang Century City. It is a large complex comprising furnished studio flats, luxury and spacious flat floor apartments, commercial streets, hotels, international kindergartens and training centers for children.

During the year under review, Jiarun Mansion at Plot A3 recorded good sales performance by launching a tower of fine-decorated apartments with new Chinese-style show flats. The Plot A3.1#2 was currently under fine-decoration construction by the Group and was expected that centralized delivery will be made at the end of June in 2020. The Group believes that Jiarun Mansion could bring a stable revenue of property sales and higher profitability to the Group.

In addition, Xixi New City Project and Xixi Manhattan Project, which are in prime location and close proximity to Xixi Wetland and Hangzhou Future Science and Technology City, were delivered successively and became the main driving force for the growth of the Group's property sales revenue during the year under review.

2. Property Leasing
At present, the Group's revenue from the property leasing increase steadily as compared with the same period last year, mainly from Highlong Plaza in Xiaoshan, Hangzhou and Zhong An Intime City in Yuyao. During the year under review, with 24 newly-joined brands, the occupancy rate of the shopping mall of Highlong Plaza reached over 94%. The adjustments to business strategy were completed successfully, which stimulated rental performance. With the commercial elements and the theme "Happy Time", the plaza caters for children's food and beverages, living and services. By adding mainstream IP and enhancing differentiation and experience elements, it effectively increased visitor traffic and promoted the spending in the plaza. The occupancy rate of Zone B in Zhong An Times Square, Yuyao ("Zone B") was more than 90% with sound operation. During the year under review, Zone B was carried out a commercial street reconstruction plan. From street lighting and scene creation, to market launch and enhancement of amusement facilities for kids, the "Happy Time 24H Style Street" was created, where Zone B was a multifunctional and comprehensive commercial pedestrian street that integrating catering, leisure and entertainment, and living facilities. The Group believes that it will continue to contribute income to property leasing in the future.

3. Hotel Operations
During the year under review, the Group's Huaibei Bright Hotel and Hangzhou Qiandao Lake Bright Resort Hotel operated well, with revenue increased by nearly 26.9% year on year. In addition, Ningbo Bright Hotel ("Ningbo Bright") was majestically opened on 1 October 2019. Ningbo Bright is a luxury business hotel proudly presented by the Group that was built according to the five-star standard. The hotel is in an excellent location which is in proximity to Yuyao North High Speed Rail Station. It became a leading hotel in its area for conferences and dining with higher than expected occupancy rate within 3 months of the opening, bringing considerable revenue to the Group. Zhejiang Bright Hotel Management Co. Ltd. and Meituan Hotel entered into a strategic cooperation agreement. Through cooperation, Meituan Hotel will enhance its core competitiveness by means of brand building, system building and data analysis, thereby driving multi-segment revenue from hotel accommodation, catering, conferences and entertainment.

4. Emerging Business
(1) Education
For the commerce and real estate business, the Group further adjusted its business model and optimized its operating structure, and launched its new child-oriented business pattern on the basis of the traditional business model. The Group focused on serving children in cities and integrating child health, child education, child entertainment and child sports to build a diversified and intelligentized body of comprehensive functions in order to inject new impetus to the development of the child-related industry.

Maggie & Rose, the parent-child family club ("Club") carried out the IP upgrade from original graphic cartoon images to lively cartoon characters, vivid stage shows and brand derivatives in order to further create brand value. On 17 January 2020, a charity fundraising dinner, "An Enchanting Evening with Lang Lang", with the theme of "Music Changes Life, Music Changes the World" was held at The Peninsula Hong Kong. Adult guests were immersed in the beautiful music atmosphere set by Maggie & Rose. The next day, a concert named "Jaap's Beethoven 1 | Lang Lang" was successfully held at the Concert Hall of Hong Kong Cultural Centre. Maggie & Rose was the designated sponsor of this Lang Lang concert's finale, hence more guests came to know the Maggie & Rose brand.

(2) Film and Entertainment
The Group currently has 4 cinemas. Chengdu Cinema was grandly opened on 9 January 2020. It set an outstanding record as the number of customers received exceeded 10,000 and the total box office was over 240,000 in the first weekend of the opening. The film and television revenue of the Group grew by nearly 42%, and the cumulative number of customers received increased by roughly 46%, both compared to the same period last year. In the future, more cinemas will be opened to build regional layout and operational advantages, giving play to regional scale effect and brand superiority.

ENTERPRISE SUSTAINABLE DEVELOPMENT

The Group actively participated in social welfare activities and established Zhongan Charity Foundation ("Zhongan Charity") to focus on charitable activities. During the year under review, the Group co-organized a charity auction with Zhongan Charity, and all charity proceeds from the auction were donated to Zhongan Charity for the project fund under the "Flower Project – Caring and support for forsaken children" to provide the left-behind children with care and warmth from multiple aspects such as economy, life and mind. On 28 January 2020, the Group and Zhongan Charity jointly established a RMB10 million fund specialized for prevention and control of COVID-19, with an aim to support the prevention and control of the pandemic in Hubei, Zhejiang and other areas seriously affected by the COVID-19 in China. According to the actual needs in the seriously affected areas, medical supplies including masks and protective clothing will be purchased and provided, thereby offering necessary help to front line medical staff and other relevant workers combating the pandemic.

PROSPECTS AND DEVELOPMENT STRATEGIES

Looking forward to 2020, maintaining the "stability" of China's real estate market will still remain as the top priority. Specifically, maintaining the continuity and stability of policy to prevent drastic fluctuations of real estate market, and a full implementation of "Policy by City", which in turn will be conducive to achieving long-term control objectives of stabilizing land and housing prices and maintaining market expectations, thus stable and healthy development of the real estate market will be attained. The Chinese economy is under downward pressure; however, the Chinese government stepped up its efforts on the "Six Stability" policy, that is "stabilizing employment, finance, foreign trade, foreign investment, domestic investment, and expectations" over the years, which achieved significant results in the past year, and GDP has maintained steady growth throughout the year. The impact of the novel coronavirus outbreak on the real estate market in China may be short-lived. Home buyers are merely delaying purchases rather than completely putting their home purchase plans on hold. As the fight against the virus is ongoing across the country, the demand is expected to pick up when the epidemic is brought under control.

The Group remains optimistic about future prospects. Adhering to the corporate mission of "creating new urban life" and the strategic guiding principle of "focusing on the demand of the public", the Group further developed its cultural education, health care, film and entertainment, and cultural leisure tourism segments based on its existing business and sophisticated development and investment concepts, and extended their presence to the whole Yangtze River Delta region.

Among numerous developing projects, the International Office Center (the "IOC") project remained a key development project of the Group. The completed Jiarun Mansion in Lot A3 had been generating recordbreaking sales for the Group. The development of the IOC (Lot A2) was commenced at the end of 2018. The IOC project was expected to continue to drive the property sales revenue of the Group, thus to assure the steady growth in the Group's revenue from property sales in the future.

Highlong Plaza and its surroundings will be built into commercial underground space, with business elites and surrounding residential residents as the core customer group. It will integrate three functions of business center + subway hub + tourist attraction into one to create a space for stylish experiences that comprising the themes of leisure, entertainment, music and trends. The mall will comprehensively enhance the brand influence of "Happy Time", and will integrate with IP to form a theme series. The Times Square in Yuyao will connect shopping malls, commercial streets in Zone B and the Central Grand Plaza; and will introduce food trunks, street markets, outdoor decoration, and children's sports and entertainment facilities so as to create night culture at the Plaza by delicacy, beauty and fun, and thus attract more visitors. Xixi New City will be transformed into an innovative and entrepreneurial industrial park with high-end sophisticated future industries as its core. There will be four major centers, including "service center, office center, R&D center, and production center" + future incubation space in pursuit of pioneering and innovation in business sectors.

ACKNOWLEDGEMENT

Finally, on behalf of the Board, I would like to express my sincere gratitude to the continuing support and trust of the shareholders and business partners as well as the dedicated efforts of all the staff.

Hong Kong, 31 March 2020