CHINASINOSTAR (00485) announced that during the year ended March 31, 2020, the group acquired land use rights through the acquisition of a subsidiary in China to develop Bagua City Project II. According to the directors' knowledge, the Huanren Manchu Autonomous County Natural Resources Bureau (the Bureau) is obligated under the land grant contract to deliver vacant possession of the land to the group, and has been negotiating relocation arrangements with affected original occupants for years.

The remaining two holdout households have demanded excessively high relocation compensation from the Bureau, and as of the announcement date, negotiations with these households are still ongoing. After multiple requests and demands for the Bureau to deliver vacant possession of the land, according to recent discussions with the Bureau, the authority has recently obtained forced demolition orders against these remaining two holdout households. Vacant possession of the land is expected to be delivered to the group by the end of September 2025.

Additionally, the group has applied to the Bureau to expand the total construction area of the properties to be built on the land. Currently, the Bureau has agreed in principle to expand the total construction area from 14,700 square meters to 19,700 square meters, although formal approval has not yet been obtained as of the announcement date.

Assuming the Bureau delivers vacant possession of the land to the group by the end of September 2025, Bagua City Project II is expected to commence construction in October 2025, with a target completion date by the end of December 2026. The completed units will begin marketing and sales in early 2027.

The group plans to finance the construction of Bagua City Project II through a combination of internal cash flow, secured loans, equity financing, government subsidies, and proceeds from pre-sales.