Shanghai International Shanghai Growth Investment : 2020 INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2020

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

SHANGHAI INTERNATIONAL

SHANGHAI GROWTH INVESTMENT LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 770)

2020 INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2020

The Board of Directors (the "Board") of Shanghai International Shanghai Growth Investment Limited (the "Company") is pleased to announce the unaudited interim results of the Company for the six months ended 30 June 2020, along with comparative figures for the corresponding period in 2019. The unaudited interim results have been reviewed by the Company's audit committee ("Audit Committee") and the Company's external auditors.

INTERIM CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended 30 June 2020		Six months ended 30 June
		2020		2019
	Notes	US$	US$
		(Unaudited)	(Unaudited)
INCOME AND GAIN/(LOSS) ON INVESTMENTS		31
Interest income			2,741
Dividend income		9,899		6,842
Net change in unrealised gain/(loss) on fair value of		251,045
financial assets at fair value through profit or loss	6		(162,030)
Net gain on disposal of financial assets		70,913
at fair value through profit or loss	6		81,935
Exchange gain		10,121		5,284
		342,009		(65,228)
EXPENSES
	(35,774)
Investment manager's fees	14(a)	(41,932)
Administrative expenses		(241,806)	(212,858)
		(277,580)	(254,790)
Profit/(Loss) before tax	7	64,429		(320,018)
Income tax expense	8	-	-
PROFIT/(LOSS) FOR THE PERIOD		64,429		(320,018)
OTHER COMPREHENSIVE INCOME FOR THE		-
PERIOD, NET OF TAX		-
TOTAL COMPREHENSIVE INCOME/(LOSS)		64,429
FOR THE PERIOD			(320,018)
GAIN/(LOSS) PER SHARE - BASIC AND
	US0.60 cents
DILUTED	10	(US2.99 cents)

1

INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION

30 June 2020

		30 June		31 December
		2020	2019
	Notes	US$		US$
		(Unaudited)		(Audited)
NON-CURRENT ASSET
Financial assets at fair value through profit or loss	11	1,189,588	288,305
Total non-current asset		1,189,588	288,305
CURRENT ASSETS
Prepayments		16,915	37,636
Dividend receivables		380		-
Amount due from a broker		88,497		-
Cash and bank balances		2,506,619	3,419,680
Total current assets		2,612,411	3,457,316
CURRENT LIABILITIES
Payables and accruals		43,515	43,092
Amount due to the investment manager	14(b)	42,551	51,025
Total current liabilities		86,066	94,117
NET CURRENT ASSETS		2,526,345	3,363,199
NET ASSETS		3,715,933	3,651,504
EQUITY
Share capital	12	1,068,600	1,068,600
Reserves		2,647,333	2,582,904
Total equity		3,715,933	3,651,504
NET ASSET VALUE PER SHARE	13	0.35	0.34

2

INTERIM CONDENSED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2020

Capital

Share

Share

reserve

Accumulated

capital

premium

(Note a)

losses

Total

US$

US$

US$

US$

US$

At 31 December 2019 (audited)

1,068,600

12,921,815*

(5,836,550)*

(4,502,361)*

3,651,504

Total comprehensive income for the period

-

-

-

64,429

64,429

Transfer from accumulated losses (Note a):

Net change in unrealised gain on fair

value of financial assets at fair value

through profit or loss

-

-

251,045

(251,045)

-

At 30 June 2020 (unaudited)

1,068,600

12,921,815*

(5,585,505)*

(4,688,977)*

3,715,933

Capital

Share

Share

reserve

Accumulated

capital

premium

(Note a)

losses

Total

US$

US$

US$

US$

US$

At 31 December 2018 (audited)

1,068,600

12,921,815

(5,575,542)

(4,207,513)

4,207,360

Total comprehensive loss for the period

-

-

-

(320,018)

(320,018)

Transfer from accumulated losses (Note a):

Net change in unrealised loss on fair value

of financial assets at fair value through

profit or loss

-

-

(174,481)

174,481

-

At 30 June 2019 (unaudited)

1,068,600

12,921,815*

(5,750,023)*

(4,353,050)*

3,887,342

• These reserve accounts comprise the reserves of US$2,647,333 (31 December 2019 (audited): US$2,582,904; six months ended 30 June 2019 (unaudited): US$2,818,742) in the interim condensed statement of financial position.

3

Note:

1. Pursuant to the Company's Amended and Restated Memorandum and Articles of Association passed on 26 November 2019, profits arising from the realisation of investments shall be available for distribution as dividends. Profits arising from revaluation of investments may be available for distribution as dividends only at the discretion of the board of directors. As a result, a net unrealised gain/(loss) on change in fair value of financial assets at fair value through profit or loss is transferred from accumulated losses to capital reserve.
   During the six months ended 30 June 2020, net unrealised gain on change in financial assets at fair value through profit or loss of US$251,045 was transferred from accumulated losses to capital reserve.
   During the six months ended 30 June 2019, net unrealised loss on change in financial assets at fair value through profit or loss of US$174,481 was transferred from accumulated losses to capital reserve.

4

NOTES TO INTERIM CONDENSED FINANCIAL INFORMATION

30 June 2020

1. CORPORATE INFORMATION
   Shanghai International Shanghai Growth Investment Limited (the "Company") is incorporated in the Cayman Islands as an exempted company with limited liability and the Company's shares with stock code 770 are listed on The Stock Exchange of Hong Kong Limited ("Hong Kong Stock Exchange"). The registered office address of the Company is P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.
   The Company is an investment company whose principal business is to make investments in listed and unlisted equity and debt securities as well as in other financial instruments and investment vehicles which are established or have significant operations or businesses primarily in the Greater China Region.
2. BASIS OF PREPARATION
   The interim condensed financial information for the six months ended 30 June 2020 has been prepared in accordance with HKAS 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA") and with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("Listing Rules"). They have been prepared under the historical cost convention, except for financial assets at fair value through profit or loss which have been measured at fair value. This interim condensed financial information is presented in United States dollars ("US$") and all values are rounded to the nearest dollar except when otherwise indicated.
   The interim condensed financial information does not include all the information and disclosures required in the Company's annual financial statements for that year but is derived from those financial statements, and should be read in conjunction with the Company's annual financial statements for the year ended 31 December 2019, which have been prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRSs").
3. ACCOUNTING JUDGEMENTS AND ESTIMATES
   The preparation of the Company's interim condensed financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of income, expenses, assets and liabilities. Actual results may differ from these estimates.
   The significant judgements made by management in applying the Company's accounting policies and key sources of uncertainty were the same as those applied in the preparation of the annual financial statements for the year ended 31 December 2019.

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4. PRINCIPAL ACCOUNTING POLICIES

The accounting policies adopted in the preparation of the interim condensed financial information are consistent with those applied in the preparation of the Company's annual financial statements for the year ended 31 December 2019, except for the adoption of the following revised HKFRSs for the first time for the current period's financial information.

Amendments to HKFRS 9, HKAS 39 and	Interest Rate Benchmark Reform
HKFRS 7
Amendments to HKAS 1 and HKAS 8	Definition of Material

The nature and impact of the revised HKFRSs are described below:

1. Amendments to HKFRS 9, HKAS 39 and HKFRS 7 address the effects of interbank offered rate reform on financial reporting. The amendments provide temporary reliefs which enable hedge accounting to continue during the period of uncertainty before the replacement of an existing interest rate benchmark. In addition, the amendments require companies to provide additional information to investors about their hedging relationships which are directly affected by these uncertainties. The amendments did not have any impact on the financial position and performance of the Company as the Company does not have any interest rate hedge relationships.
2. Amendments to HKAS 1 and HKAS 8 provide a new definition of material. The new definition states that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments clarify that materiality will depend on the nature or magnitude of information. The amendments did not have any impact on the Company's interim condensed financial information.

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5. OPERATING SEGMENT INFORMATION

For management purposes and information used by the Company's executive directors as the chief operating decision makers, the Company is organised into business units based on the categories of investments and has two reportable operating segments as follows:

Listed securities	-	Investments in equity securities listed on relevant stock exchanges
Unlisted securities	-	Investments in unlisted equity securities

Further details of the Company's investments are included in note 11 to the interim condensed financial information.

The following is an analysis of the Company's results by operating segments:

For the six months ended 30 June 2020	Listed		Unlisted
	securities		securities	Total
	US$		US$	US$
	(Unaudited)		(Unaudited)	(Unaudited)
Segment results	331,857		-	331,857
Interest income from bank deposits					31
Exchange gain					10,121
Unallocated expenses					(277,580)
Profit before tax					64,429

For the six months ended 30 June 2020, segment results represented the net gain on disposal of listed equity securities classified as financial assets at fair value through profit or loss, and net gain on change in fair value of listed equity securities classified as financial assets at fair value through profit or loss, and the corresponding dividend income earned by each segment, without the allocation of interest income from bank deposits, administrative expenses as well as the investment manager's fees.

For the six months ended 30 June 2019	Listed		Unlisted
	securities		securities	Total
	US$		US$	US$
	(Unaudited)		(Unaudited)	(Unaudited)
Segment results	186,212	(259,465)	(73,253)
Interest income from bank deposits					2,741
Exchange gain					5,284
Unallocated expenses					(254,790)
Loss before tax					(320,018)

7

For the six months ended 30 June 2019, segment results represented the net gain on disposal of listed equity securities classified as financial assets at fair value through profit or loss and net gain on change in fair value of listed equity securities classified as financial assets at fair value through profit or loss, net loss on change in fair value of unlisted equity securities classified as financial assets at fair value through profit or loss, and the corresponding dividend income earned by each segment, without the allocation of interest income from bank deposits, administrative expenses as well as the investment manager's fees.

As management considers the Company's nature of business is investment holding, there was no information regarding major customers as determined by the Company and no segment revenue is presented.

The following tables present the asset information of the Company's operating segments as at 30 June

2020 and 31 December 2019, respectively:

30 June 2020	Listed		Unlisted
	securities		securities	Total
	US$		US$	US$
	(Unaudited)		(Unaudited)	(Unaudited)
Financial assets at fair value through profit or loss	1,189,588		-	1,189,588
Dividend receivables	380		-	380
Amount due from a broker	88,497		-	88,497
Total segment assets	1,278,465		-	1,278,465
Unallocated assets					2,523,534
Total assets					3,801,999
31 December 2019	Listed		Unlisted
	securities		securities	Total
	US$		US$	US$
	(Audited)		(Audited)	(Audited)
Financial assets at fair value through profit or loss	288,305		-	288,305
Total segment assets	288,305		-	288,305
Unallocated assets					3,457,316
Total assets					3,745,621

For the purpose of monitoring segment performance and allocating resources between segments, all assets are allocated to reportable segments other than prepayments and cash and bank balances.

All liabilities as at 30 June 2020 and 31 December 2019 are unallocated liabilities.

8

6.	GAIN OR LOSS ON INVESTMENTS
	For the six months ended 30 June 2020	Listed			Unlisted
		securities			securities	Total
		US$			US$	US$
		(Unaudited)			(Unaudited)	(Unaudited)
	Included in profit or loss:
	Realised gain:
	Financial assets at fair value through profit or loss	70,913			-	70,913
	Unrealised gain:
	Financial assets at fair value through profit or loss	251,045			-	251,045
	Total realised and unrealised gain included in profit
	or loss	321,958			-	321,958
	Total realised and unrealised gain for the period	321,958			-	321,958
	For the six months ended 30 June 2019	Listed			Unlisted
		securities			securities	Total
		US$			US$	US$
		(Unaudited)			(Unaudited)	(Unaudited)
	Included in profit or loss:
	Realised gain:
	Financial assets at fair value through profit or loss	81,935			-	81,935
	Unrealised gain/(loss):
	Financial assets at fair value through profit or loss	97,435	(259,465)	(162,030)
	Total realised and unrealised gain/(loss) included in
	profit or loss	179,370	(259,465)	(80,095)
	Total realised and unrealised gain/(loss) for the period	179,370	(259,465)	(80,095)

9

7. PROFIT/(LOSS) BEFORE TAX

The Company's profit/(loss) before tax is arrived at after charging:

	For the six months ended
	30 June
	2020	2019
	US$		US$
	(Unaudited)		(Unaudited)
Auditor's remuneration	12,483	12,515
Custodian fee	5,045	7,079
Employee benefit expense (excluding directors' remuneration)
Salaries and other benefits	82,923	79,296
Retirement benefit costs	2,319	2,296

1. TAXATION
   No provision for Hong Kong profits tax has been made in the interim condensed financial information as the Company did not generate assessable profits arising in Hong Kong for the six months ended 30 June 2020 (six months ended 30 June 2019 (unaudited): Nil).
2. DIVIDEND
   No interim dividend has been proposed by the directors for the six months ended 30 June 2020 (six months ended 30 June 2019 (unaudited): Nil).
3. GAIN/(LOSS) PER SHARE - BASIC AND DILUTED
   The calculation of the basic gain per share amount is based on the profit for the period of US$64,429 (six months ended 30 June 2019 (unaudited): loss of US$320,018) and the weighted average number of ordinary shares of 10,686,000 (six months ended 30 June 2019 (unaudited): 10,686,000) in issue during the period.
   No adjustment has been made to the basic gain per share amount for the six months ended 30 June 2020 and 2019 in respect of a dilution as the Company had no potentially dilutive ordinary shares in issue during the six months ended 30 June 2020 and 2019.
4. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

	30 June		31 December
	2020	2019
	(Unaudited)		(Audited)
	US$		US$
Non-current:
Unlisted equity investment - Ordinary shares, at fair value:
Global Market Group Limited ("GMG")	-		-
Listed equity investments, at fair value	1,189,588	288,305
Total	1,189,588	288,305

10

Unlisted equity investment - Ordinary shares, at fair value:

The above unlisted investment at 30 June 2020 is a total of 8,734,897 ordinary shares of GMG held by the Company (31 December 2019: 8,734,897 shares), representing 9.36% of GMG's total issued ordinary shares (31 December 2019: 9.36%).

As at 30 June 2020 and 31 December 2019, management considered qualitative information with limited quantitative information of GMG in assessing GMG's financial performance and ability to attract new financing in the future. During the six months ended 30 June 2020 and year ended 31 December 2019, there was no improvement in the financial performance of GMG and no clear business and capital raising plans in the future. Management assessed that there was no sufficient cash flow liquidity in the business and it is lack of future business plan that would improve the performance. Therefore, management decided to write down the investment to nil as at 30 June 2020 (31 December 2019: Nil).

Listed equity investments, at fair value:

The Company's investments in listed equity securities are designated by the Company as at fair value through profit or loss.

During the six months ended 30 June 2020, the net fair value gain in respect of the Company's Hong Kong investments recognised in profit or loss amounted to US$321,958, of which a net gain of US$70,913 was recognised upon disposal of the listed equity investments for the period.

During the six months ended 30 June 2019, the net fair value loss in respect of the Company's Hong Kong investments recognised in profit or loss amounted to US$179,370, of which a net gain of US$81,935 was recognised upon disposal of the listed equity investments for the period.

12. SHARE CAPITAL

30 June 31 December

2020 2019

US$ US$

(Unaudited) (Audited)

Authorised:
18,000,000 (2019: 18,000,000) ordinary shares of US$0.10 each	1,800,000		1,800,000
Issued and fully paid:
10,686,000 (2019: 10,686,000) ordinary shares of US$0.10 each	1,068,600		1,068,600

11

1. NET ASSET VALUE PER SHARE
   The calculation of the net asset value ("NAV") per share is based on the Company's NAV as at 30 June 2020 of US$3,715,933 (31 December 2019 (audited): US$3,651,504) and the number of ordinary shares of 10,686,000 in issue as at 30 June 2020 (31 December 2019 (audited): 10,686,000).
2. RELATED PARTY TRANSACTIONS
3. 1. In addition to the transactions detailed elsewhere in this interim condensed financial information, the Company had the following transactions with related parties during the period:

		For the six months ended
		30 June
		2020	2019
		US$		US$
	Note	(Unaudited)		(Unaudited)
Investment management and administration fees
charged by the Investment Manager	(i)	35,774	41,932

Note:

1. Shanghai International Asset Management (Hong Kong) Company Limited (the "Investment Manager") provides key management personnel services to the Company. All directors of the Investment Manager are common directors of the Company.
   In accordance with the terms of the investment management agreement and eight supplemental agreements (collectively the "Investment Management Agreements"), the management and administration fees are calculated and payable quarterly in advance at 0.5% of the NAV (calculated before deductions of the fees payable to the Investment Manager, and the custodian for that quarter) of the Company calculated on the last business day of the previous quarter.
   With effect from the year ended 31 December 2014, the Investment Manager is entitled to an incentive fee equal to 20% of the excess amount by which the NAV of the Company as at 31 December of each year exceeds the high water mark, i.e. the highest NAV as at 31 December in any year less the aggregate amount of all dividends paid by the Company during the year. As defined in the Seventh Supplemental Agreement dated 19 March 2014 to the Investment Management Agreement, the initial high water mark should be the NAV as at 31 December 2010, being US$31,048,060. With effect from 1 July 2017, as defined in the Eighth Supplemental Agreement dated 23 March 2017, the high water mark has been reset to the NAV as at 31 December 2016, being US$8,182,713.
   During the six months ended 30 June 2020, the Investment Manager was not entitled to receive any incentive fee in relation to the performance of the Company (six months ended 30 June 2019 (unaudited): Nil), in accordance with the incentive fee calculation of the Investment Management Agreements.

12

1. Outstanding balance with related party:
   The Company had an outstanding balance due to the investment manager of US$42,551 (31 December 2019 (audited): US$51,025) as at the end of the reporting period. This balance is unsecured, interest-free, and repayable on demand.
2. Compensation of key management personnel of the Company:

For the six months ended

30 June

2020 2019

US$ US$ (Unaudited) (Unaudited)

Directors' fees	25,112	23,045

13

MANAGEMENT DISCUSSION AND ANALYSIS

FINANCIAL REVIEW

The Company recorded an unaudited net profit of US$64,429 for the six months ended 30 June 2020 (six months ended 30 June 2019: unaudited loss of US$320,018). Last corresponding period's losses were mainly due to drop in fair value on the Company's unlisted investment in Global Market Group Limited, which had been fully impaired on 30 June 2019 and 30 June 2020. No gain or loss on unlisted investment was recorded for the six months ended 30 June 2020. The operating profits in the first half of 2020 were entirely derived from gains on investment in listed securities after deduction of the Company's operating expenses.

Following the broadening of the Company's investment objectives since late November 2019 which allowed more flexibility in investing a wider variety of investment products, the Company authorized the Investment Manager to focus more cash resources to invest in listed securities in 2020 in a view to deliver more returns to shareholders. For the six months ended 30 June 2020, the Company recorded a realized gain on disposal of listed securities of US$70,913 (six months ended 30 June 2019: US$81,935) and a net change in unrealised gain on listed securities of US$251,045 (six months ended 30 June 2019: US$97,435). Dividend income from listed securities of US$9,899 was recorded in the reporting period as compared to US$6,842 in the last corresponding period. As a result, the Company recorded an overall gain of US$331,857 on listed securities investment during the first half of 2020, a 78% increase as compared with that of 2019.

In view of the impact of COVID-19 pandemic, the Investment Manager constructed the Company's listed securities portfolio in phases cautiously with emphasizes on allocating a right proportion and nature of stocks along the different cycle of the market throughout the year. The stock position was extremely low at the beginning of the year 2020 given a pessimistic view on the stock market for the first quarter. As the market went into deep correction in March, the stock position in the investment portfolio was increased from around 10% to 65% in early May. Most of the stocks chosen were domestic consumption and medical related, expecting those will be the major beneficiaries when the COVID-19 pandemic started to fade away.

For the first half of 2020, the return on the Company's listed securities portfolio recorded a gain of 11% approximately, whilst the Hang Seng Index ("HSI"), closed at 24,427 points, was down by 13.4% and the Hang Seng China Enterprise Index ("HSCEI") was down by 12.6%.

As at 30 June 2020, the Company's net asset value ("NAV") per share was US$0.35 as compared with US$0.34 at the end of 2019, a 2.94% improvement mainly due to positive returns on listed securities investment. As at 30 June 2020, the Company's share price was US$0.30, reflecting a 14.29% discount to the NAV per share.

14

INVESTMENT REVIEW

Portfolio Allocation

	30 June		31 December
	2020	2019
Listed investments	32%	8%
Cash and cash equivalents	68%	92%
Unlisted investment	-		-
Total	100%	100%

LISTED INVESTMENTS REVIEW

Hong Kong Stock Market

The Hang Seng Index ("HSI") began the year 2020 with a fairly robust momentum, soaring to reach as much as 29,149 points, which was up 3.4% during the first half of January. However, the market fell severely when the news of COVID-19 virus was confirmed contagious among human beings. By around mid-March, the HSI fell to its lowest level at 21,139 points. By the end of the first quarter 2020, the index was down 16.3%.

Nonetheless, stock market started to recover in April with more liquidity-easing policies from the People's Bank of China were announced and the spread of COVID-19 virus came under control domestically. The HSI continued to climb to 24,855 points near the end of April. In May, tensions between China and the U.S. escalated, coupled with the introduction of a draft National Security Law for Hong Kong, causing the market to retreat once again. In June, stock market managed to hold up solidly above 24,000 points despite mounting political tensions between China and the U.S.. Besides, investors sentiment continued to improve gradually as China opened up its lockdown and social-distancing given COVID-19 pandemic was well under constrained. For the first half of 2020, the HSI closed at 24,427 points, which was down 13.4% and the Hang Seng China Enterprise Index was down 12.6%. The most outperforming sectors during the period were semiconductors and medical-related companies.

During the first half of 2020, the return of the Company's listed securities portfolio recorded a gain of 11% approximately. The table below showed the monthly year-to-date performance of the portfolio in order to provide a better insight for investors.

Monthly year-to-date performance of listed securities portfolio vs the Hang Seng Index

2020	January February	March	April	May	June
		Year-to-date performance (%)
Listed securities portfolio	-0.81%	0.66%	-1.46%	3.69%	5.83%	11.00%
Hang Seng Index	-6.66%	-7.31%	-16.27%	-12.58%	-18.55%	-13.35%

15

As discussed in the 2019 annual report, and in view of the impact of COVID-19 pandemic, the Investment Manager constructed the Company's listed securities portfolio in phases cautiously with emphasizes on allocating a right proportion and nature of stocks along the different cycle of the market throughout the year. The stock position was extremely low at the beginning of the year 2020 given our pessimistic outlook of the stock market for the first quarter. As the stock market went into deep correction in March, the stock position in the listed securities portfolio has been increased from around 10% to 65% in early May. Most of the stocks chosen were domestic consumption and medical related, expecting those will be the major beneficiaries when the COVID-19 pandemic started to fade away.

There are five important factors that are considered in the Investment Manager's investment process. They are called Market cycle (M); Outperforming industry cycles and related stocks (O); Drivers (D); Liquidity (L); Latest financials (L) and Shareholding structure (S). The most advanced stocks in the Company's portfolio included Meituan Dianpi (3690 HK), Tencent (700 HK) and Pharmaron (3759 HK).

Looking back to the first half of 2020, the Investment Manager believed that the sole allocation of high-tech industry is insufficient, especially underestimating the intensity of investment capitals in pursuit of the idea of domestic substitution. Although many of these companies have been underperforming in profits, the Investment Manager will continue to pay more attention to them in the future.

UNLISTED INVESTMENT REVIEW

As at 30 June 2020, the Company held one unlisted securities investment but was fully written down. No new investment was consummated in the first half of 2020 in view of the Company's limited cash resources.

PROSPECTS

For the second half of 2020, the Company considered that there are three major concerns affecting the investment market. The first and most important is the continuous outbreak of COVID-19 virus. Whether the pandemic can be under controlled or constrained in different continents is important, allowing normal economic activities to resume. Secondly, the already fragile world economy will rely heavily on the intensity of China and the U.S. trade dispute. Finally, as the U.S. election in November come closer, market participants are wary that political considerations are likely to outweigh economic factors in Washington, raising more risks in the stock markets.

On the Company's listed investment front, the Investment Manager will focus on industries that will ride on Chinese consumption upgrade, healthcare needs, infrastructure developments and technology enhancements. The Company will continue to adhere to its prudent investment strategy and be aware of any potential risks. Given the diminishing asset size of the Company, there are limited resources and opportunity to participate in new unlisted investment project. The Investment Manager will continue to follow up the fully-written down unlisted investment to strike the best exit opportunity.

16

KEY PERFORMANCE INDICATOR

The Board considers that periodic NAV of the Company is a significant financial indicator by which the development and performance of the Company's business can be measured effectively.

LIQUIDITY, FINANCIAL RESOURCES, GEARING AND CAPITAL COMMITMENT

During the first half of 2020, the Company did not participate in any new unlisted investment. The Company's bank balances as of 30 June 2020 were US$2,506,619 (31 December 2019: US$3,419,680). Apart from listed securities investments, cash were used for operating and administrative expenses. The Company did not have any bank borrowing or capital commitment on its unlisted investment as of 30 June 2020 and 31 December 2019 respectively.

EXPOSURE TO FLUCTUATIONS IN EXCHANGE RATES AND RELATED HEDGES

The Company's assets, liabilities and transactions are denominated either in Hong Kong dollars or US dollars. As long as the Hong Kong dollar continues its peg to the US dollar in the foreseeable future, the Company does not envisage any material exposure to exchange fluctuations. Accordingly, no hedging instruments were made nor transacted to cushion for such exposure. There is no hedging policy, the value of this investment and currency exposure risk are monitored closely by the Investment Manager.

EMPLOYEES

The Company has two employees and continues to delegate the day-to-day administration and its investment portfolio to the Investment Manager.

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES OF THE COMPANY

During the six months ended 30 June 2020, the Company did not purchase, sell or redeem any of the Company's listed securities.

CORPORATE GOVERNANCE

The Company is committed to maintaining sound corporate governance standards and procedures to ensure integrity, transparency and quality of disclosure to promote the ongoing development of the long term best interests of the Company and to enhance value for all its shareholders. The Board has established procedures on corporate governance that comply with the requirements of the Corporate Governance Code (the "CG Code") contained in Appendix 14 of the Listing Rules. The Board has reviewed and taken measures to adopt the CG Code as the Company's code of corporate governance practices. During the six months ended 30 June 2020, the Company has complied with the code provisions (the "Code Provisions") under the CG Code, save and except for the deviations as described below.

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Code Provisions A.2.1 to A.2.9 set out the division of responsibilities between the chairman and chief executive as well as set out key responsibilities of the chairman from a corporate governance perspective, including Code Provision A.2.7 which stipulates that the chairman should at least annually hold meetings with the independent non-executive directors without the presence of other directors.

No chairman or chief executive has been appointed or designated by the Company. However, the Board is of the view that all Directors together bring diverse experience and expertise to the Board, and are collectively responsible for the stewardship of the Company. In view of the streamlined structure of the Company, contributions to the Company are made by the Board as a whole, while the investment portfolio and daily operations of the Company are managed by the Investment Manager under the supervision of the Board. The Board considers that this existing structure will not impair the balance of power and authority between the management of the Board and the management of its business as set out in the principle of A.2 of CG Code.

Code Provision A.4.1 provides that non-executive directors should be appointed for a specific term and subject to re-election. The Company's Non-executive Directors do not have a specific term of appointment. However, they are subject to retirement by rotation once every three years pursuant to the Company's Articles of Association.

Code Provision E.1.2 provides that, among others, the chairman of the board should attend the annual general meeting of the listed issuer. As stated in the above, no chairman has been appointed or designated by the Company. Given all Directors are collectively responsible for the Company's stewardship, the Board considers that it was adequate for the Board to elect a Director to chair the annual general meeting of the Company held on 22 May 2020.

BOARD COMMITTEES

The Board has established the Audit Committee, Remuneration Committee and Nomination Committee, with respective defined terms of reference (available on the Company's and the Hong Kong Stock Exchange's websites), which are on no less exacting terms than those set out in the CG Code.

Audit Committee

The Audit Committee has been established since July 1999 and currently comprises three members, all of whom are Independent Non-executive Directors ("INEDs") of the Company, namely, Mr. YICK Wing Fat Simon (Chairman), Dr. HUA Min and Mr. ONG Ka Thai. None of the members of the Audit Committee is a former partner of the Company's existing external auditor.

The Audit Committee has reviewed the Company's unaudited interim condensed financial information for the six months ended 30 June 2020 for the Board's approval. The Audit Committee has also met with management of the Investment Manager to supervise the Company's matters on internal control, risk management and financial reporting process.

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The unaudited interim condensed financial information has also been reviewed by the Company's independent auditors, Ernst & Young, in accordance with Hong Kong Standard on Review Engagements 2410 Review of Interim Financial Information Performed by the Independent Auditors of the Entity issued by the Hong Kong Institute of Certified Public Accountants. Ernst & Young's unmodified independent review report to the Board is included in the 2020 interim report.

Remuneration Committee

The Remuneration Committee has been established since March 2005 and currently comprises all three INEDs, namely, Mr. ONG Ka Thai (Chairman), Mr. YICK Wing Fat Simon and Dr. HUA Min, and the two executive Directors, namely, Dr. WANG Ching and Mr. WU Bin.

Nomination Committee

The Nomination Committee has been established since February 2012 and currently comprises all three INEDs, namely Dr. HUA Min (Chairman), Mr. ONG Ka Thai and Mr. YICK Wing Fat Simon.

MODEL CODE FOR SECURITIES TRANSACTIONS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") as set out in Appendix 10 of the Listing Rules as its code of conduct regarding Directors' securities transactions. In response to specific enquiry by the Company, all Directors confirmed that they have complied with the Model Code throughout the six months ended 30 June 2020.

PUBLICATION OF INTERIM REPORT

This announcement is published on the websites of HKExnews (www.hkexnews.hk) and the Company (http://shanghaigrowth.etnet.com.hk).

The Company's 2020 interim report will be dispatched to shareholders of the Company as well as published on the aforesaid websites in due course.

By Order of the Board

SHANGHAI INTERNATIONAL

SHANGHAI GROWTH INVESTMENT LIMITED

WANG Ching

Executive Director

Hong Kong, 26 August 2020

As at the date of this announcement, the Board comprises Dr. WANG Ching and Mr. WU Bin as Executive Directors; Mr. FENG Huang and Mr. LU Xuefang as Non-executive Directors; Dr. HUA Min, Mr. ONG Ka Thai and Mr. YICK Wing Fat Simon as Independent Non-executive Directors.

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