DreamEast : INSIDE INFORMATION AND ENFORCEMENT ACTION AGAINST THE SECURITY OF A LOAN

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DREAMEAST GROUP LIMITED ྫྷ؇˙ණྠϞࠢʮ̡

(Incorporated in Bermuda with limited liability and carrying on business in Hong Kong as "DreamEast Cultural Entertainment")

(Stock Code: 593)

INSIDE INFORMATION

AND

ENFORCEMENT ACTION AGAINST THE SECURITY OF A LOAN

This announcement is made by DreamEast Group Limited (the "Company", together with its subsidiaries, the "Group") pursuant to Rule 13.09(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

A loan agreement (the "Loan Agreement") dated 10 January 2017 was entered into between ̏ԯ˂ݱਿุҳ༟Ϟࠢʮ̡ (Beijing SkyOcean Foundation Investments Co., Ltd.*) (the "Borrower"), an indirect wholly-owned subsidiary of the Company, as borrower, and 㛬 ᔮვБٰ΅Ϟࠢʮ̡̏ԯʱБ (Hengfeng Bank Securities Co., Ltd. Beijing Branch*) ("Hengfeng Bank"), as lender, pursuant to which Hengfeng Bank granted a term loan (the "Loan") in the amount of RMB2,800 million (equivalent to approximately HK3,327 million) to the Borrower for a term of 5 years for the purpose of financing the development and construction cost of a parcel of land in Fangshan District, Beijing, the PRC (the "Fangshan Land") owned by the Borrower. The Fangshan Land was charged to Hengfeng Bank as one of the securities for the repayment of the Loan. On 28 February 2020, all rights under the Loan and the relevant securities were transferred from Hengfeng Bank to ʆ؇ ޲ږፄ༟ପ၍ଣٰ΅Ϟࠢʮ̡ (Shandong Financial Assets Management Securities Co., Ltd.*) ("Shandong Assets").

As at the date of this announcement, the Borrower was in default of an outstanding principal of approximately RMB2,510 million (equivalent to approximately HK$2,982 million) and the accrued interest of approximately RMB128.2 million (equivalent to approximately HK$152.3 million).

On 13 August 2020, ̏ԯ̹ୋɚʕॴɛ͏ج৫ (Second Intermediate People's Court of Beijing*) (the "Court") issued an enforcement judgment (2020) ԯ02ੂ764໮ (the "Enforcement Judgment"), pursuant to which it made an order that, amongst other things, Shandong Assets has the right to enforce the security of the Loan by auctioning or selling the Fangshan Land and enjoy priority to the proceeds of the auction or the sale (as the case may be). ˂ݱછٰණྠϞࠢʮ̡ (SkyOcean Holding Group Co., Ltd.*) (the "Guarantor"), being one of the guarantors of the Loan and a related company of the Company, applied to the Court for an order that the Enforcement Judgment not to be enforced, which was rejected by the Court on 13 November 2020.

In December 2020, the Borrower was informed by Shandong Assets that (i) it intended to enforce the security over the Fangshan Land by putting it on an public auction (the "Auction") in satisfaction of the Loan (the "Enforcement Action"); and (ii) an application has been made to the Court for a valuation of the Fangshan Land, which shall be relied upon by Shandong Assets as the base price of the Auction. Based on the valuation report dated 2 December 2020 prepared by an independent valuer, the valuation of the Fangshan Land as at 23 October 2020 was approximately RMB2,798.7 million (equivalent to approximately HK$3,325.3 million) (the "Valuation").

On 13 January 2021, the Guarantor filed an application to the Court to object to the Valuation (the "Application"), and as informed by the Court in early March 2021, the Court has appointed ̏ԯגήପПᄆࢪձɺήПᄆࢪၾʔਗପ೮া˾ଣɛ՘ึ (Beijing Real Estate Valuer and Land Valuer and Immovable Asset Registration Agency Association*) to provide a professional technical assessment (ਖ਼ุҦஔ൙ᄲʈЪ) (the "Assessment") on the merits of the Application. As at the date of this announcement, the result of the Assessment has not been released.

The Company will make further announcement(s) to update the status of the Enforcement Action as and when appropriate.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the shares of the Company.

By order of the Board of

DreamEast Group Limited

Chan Tak Kwong Company Secretary

Hong Kong, 11 March 2021

For the purpose of this announcement, translations of Renminbi into Hong Kong dollars or vice versa have been calculated by using an exchange rate of HK$1.00 equal to RMB0.84164. Such exchange rate has been used, where applicable, for the purpose of illustration only and does not constitute a representation that any amounts were, may have been or will be exchanged at such rate or any other rates or at all.

As at the date of this announcement, the Board comprises Ms. Zhou Jin (Chairman) and Mr. Yang Lei being the executive Directors, and Dr. Chen Guanglei, Dr. Meng Xiaosu, Mr. Yang Buting and Mr. Zhao Daxin being the independent non-executive Directors.

*The English translation of the Chinese name of the relevant entity included in this announcement is for identification and reference only, and such translation may not be accurate and such entity may not have an official English translation/version of its Chinese name.