SDIC

Company Background:
(1) Introduction to the Joint Venture
In September 2016, Guangzhou SDIC Yukang Elderly Care Service Co., Ltd., under the health industry segment of Central State-owned Enterprise SDIC (State Development & Investment Corp.), and Medical Care Service Inc., a leading Japanese elderly care company, jointly established Guangzhou SDIC Yukang Medical Care Service Co., Ltd. with a registered capital of RMB 15 million. The joint venture introduces the operational experience of Medical Care Service Inc. from its over 280 facilities in Japan and several in China, along with advanced Japanese-style service concepts, management models, and nursing techniques, to cultivate professional talent and develop a first-class domestic elderly care management system and development model. The Guangzhou Zhongcheng Waijing Building project is a landmark project in Guangzhou established by the joint venture to build its brand, and its experience and operational model will serve the company's future strategic layout for chain operations.

(2) Project Introduction
a. Location: No. 29 and No. 31, Xianlie South Road, Yuexiu District, Guangzhou
b. Positioning: The project is positioned as a nursing-type elderly care institution located in the city center, of medium scale, providing high-quality Japanese-style care services. At the same time, using the institution as a carrier, it aims to build a smart elderly care integrated service platform, radiating to surrounding communities, developing day care and home-based services, and combining with small-scale community home care service centers under planning and development, forming a service pattern of "one platform, multiple outlets." The target clients are mainly elderly with disabilities, semi-disabilities, and dementia, supplemented by some self-care elderly, with long-term and short-term stays combined with community services, effectively integrating online management and offline services to achieve a "medical care, nursing, rehabilitation, day care, home-based" five-in-one intelligent professional care system radiating to the central urban areas.
c. Planning: Land area of 1971 m², renovation area of 5772 m², with 74 residential units and 144 elderly care beds

(3) Introduction to the Parent Companies of the Joint Venture
a. Introduction to Guangzhou SDIC Yukang Elderly Care Service Co., Ltd.: State Development & Investment Corp. (SDIC), established on May 5, 1995, is a state-owned investment holding company approved by the State Council and a key centrally-administered state-owned enterprise. SDIC has a registered capital of RMB 19.47 billion. As of the end of 2015, its total assets reached RMB 495.5 billion, with managed financial assets exceeding RMB 700 billion and over 70,000 employees. In 2015, it achieved total operating revenue of RMB 113.5 billion and total profit of RMB 16.5 billion. In the annual performance assessment of the State-owned Assets Supervision and Administration Commission (SASAC), it has received an A grade for 12 consecutive years and has been recognized as an "Enterprise with Excellent Performance" in four consecutive term assessments. On April 30, 2015, as an important layout in the health industry, SDIC registered a wholly-owned subsidiary, "Guangzhou SDIC Yukang Elderly Care Investment Management Co., Ltd." in Yuexiu District, Guangzhou, with a registered capital of RMB 35 million. The company is primarily responsible for the construction, operation, and management of elderly care projects in Guangzhou, as well as the business expansion and development of SDIC's health industry in the Pearl River Delta region. *

b. Introduction to Medical Care Service Inc.: Medical Care Service Company Inc. (English name), established in 1999, is wholly funded by Sanko Soflan Holdings Co., Ltd. (English name; established in 1974; business: real estate construction, leasing management, and long-term care). The business of Medical Care Service Inc. focuses on the development and operation of small-scale group homes for elderly with dementia. It operates 290 facilities in Japan, including 253 group homes for elderly with dementia, 18 nursing-type residential facilities, and 16 home-based service facilities such as small-scale multifunctional home care, home-visit nursing, and day care centers. Additionally, its subsidiaries engaged in elderly care-related businesses operate home care support, care information websites, welfare equipment sales, and meal services for the elderly. In fiscal year 2016, annual sales were approximately 25.6 billion yen (approximately RMB 1.6 billion), with an average growth rate of 17% over the past six years. The company is also actively expanding overseas, with physical facilities in Nantong (China), Xicheng District (Beijing), and Yuexiu District (Guangzhou), and has established a wholly-owned subsidiary in Shanghai for elderly care consulting and professional training, demonstrating a deep understanding of China's elderly care industry. In Southeast Asia, it is also actively operating in Malaysia, Indonesia, and the Philippines, providing facility management, consulting, and talent development. http://www.mcsg.co.jp/zh-hans/