Greenland Holding and China Eastern Air Group sign agreement, completing the 'one body, two wings' layout in the hotel and tourism industry...

- Actively responding to consumption upgrading, the first mixed-ownership reform in the mass consumption sector makes its debut

Shanghai, March 19, 2019 -- The 'Greenland model' has achieved another success in actively promoting the reform of central state-owned enterprises and key local state-owned enterprises. In response to the national strategy of consumption upgrading and leading a better life, it also strongly supports the construction of Shanghai's 'Five Centers' and 'Four Major Brands.'On March 19, Greenland Holding (600606.SH) and China Eastern Air Group held the 'Investment and Equity Acquisition of Shanghai Airlines Travel Agency' signing ceremony, announcing that Greenland successfully acquired a 65% stake in Shanghai Airlines International Travel (Group) Co., Ltd. (referred to as 'Shanghai Airlines Travel Agency'), a wholly-owned subsidiary of China Eastern Airlines Co., Ltd. (600115.SH), for 251 million yuan through competitive bidding, while China Eastern Airlines retained a 35% stake. According to the restructuring plan, Greenland will further promote the mixed-ownership reform of Shanghai Airlines Travel Agency, planning to gradually release up to 25% of its equity to the management team of Shanghai Airlines Travel Agency over the years, forming the 'Greenland model' of a 'tripartite equity structure' with Greenland, China Eastern, and the management team.This marks another collaboration between Greenland and China Eastern following their joint participation in the mixed-ownership reform of China Eastern Logistics. In recent years, Greenland Holding and China Eastern Air Group have partnered multiple times at both the group and subsidiary levels, becoming a typical example of active interaction between central and local state-owned enterprises, fully leveraging and combining their resource and brand advantages to achieve complementary businesses and synergistic development.Greenland actively responds to the national strategy of consumption upgrading, and this marks the first time the 'Greenland mixed-ownership reform' model has entered the mass consumption industry sector.This move is conducive to further expanding and strengthening Greenland’s mass consumption-related industries and better promoting consumption upgrading and leading a better life for the people.

Photo shows the scene of the signing ceremony

Shanghai Airlines Travel Agency was formerly known as 'Shanghai Flying Crane Travel Company,' established in September 1986, restructured into a group company in 2006, and became a wholly-owned direct subsidiary of China Eastern Airlines Co., Ltd. after the joint restructuring of China Eastern and Shanghai Airlines in 2010. Currently,Shanghai Airlines Travel Agency is a large travel service enterprise with three main business areas: tourism, business travel, and exhibitions.Its business scope covers inbound tourism, domestic tourism, business exhibitions, domestic and international charter flights and ticket agency services, tourist transportation, and overseas employment services. China Eastern Air Group actively responds to the national push for mixed-ownership reform of central state-owned enterprises, leading the way among central enterprises in terms of reform progress. By vigorously promoting reforms at both the group and subsidiary levels, it has achieved remarkable results,making China Eastern Air Group a benchmark for the new round of mixed-ownership reform among central state-owned enterprises.The signing of the agreement between Greenland and China Eastern to take control of Shanghai Airlines Travel Agency is also the second collaboration between the two parties in the reform of a key subsidiary under China Eastern Air Group, following Greenland’s participation in the mixed-ownership reform of China Eastern Logistics in 2017. At the same time, China Eastern Air Group is one of China’s three major state-owned backbone air transport groups, with an extensive global route network and long-term steady global rankings in passenger traffic. Greenland Holding has a global presence and diversified development with real estate as its core business,demonstrating strong business synergy and complementary strengths between the two parties.The two sides will comprehensively drive mutual industrial complementarity and fully explore business synergy potential in comprehensive real estate development, logistics operations, hotel management, as well as commercial trade, travel ticketing, media advertising, and other fields, achieving a '1+1>2' effect and advancing together.

Achieving control over Shanghai Airlines Travel Agency also marks the second successful mixed-ownership reform implemented by Greenland this year,following the acquisition of a 70% stake in Henan Provincial Highway Engineering Bureau Group, which fired the starting gun for accelerating state-owned enterprise mixed-ownership reform in 2019. Greenland has successfully achieved a synergistic 'one body, two wings' layout in the hotel, tourism, and exhibition industry.Going forward, Greenland will leverage Shanghai Airlines Travel Agency’s deep accumulation in aviation travel resources, industry qualifications, and store networks, while fully utilizing its overall brand, resources, and industrial synergy advantages to further enhance the core competitiveness and comprehensive industrial chain advantages of the hotel, tourism, and exhibition industry.Greenland will actively develop the global tourism market, building a smart tourism resource operator with core businesses in specialty tourism services and business travel services, integrating 'food, accommodation, transportation, sightseeing, shopping, and entertainment,' significantly expanding the market scale and influence of its tourism business.

Photo shows the Plaza Premium Hotel Shanghai Hongqiao Greenland

In the future, Greenland’s tourism business will adopt a big tourism mindset, integrate industrial resources, strengthen industrial synergy, and build an industrial ecosystem closed loop covering upstream and downstream segments such as tourism destinations, channel traffic, visitor expansion, and data development. It will gradually cultivate the Greenland tourism brand, establish a number of high-standard tourism destinations, create a series of integrated 'Greenland Lifestyle Experience Centers,' build a powerful visitor resource operation channel, and aim to achieve asset securitization of its tourism business by 2021.

At the end of last year, Greenland signed a strategic cooperation agreement with Barcelona International Convention Centre, an international exhibition giant, and established Greenland Barcelona Convention Centre. With the acquisition of Shanghai Airlines Travel Agency, the 'one body, two wings' layout of Greenland’s hotel, tourism, and exhibition industry is now basically formed. Zhang Yuliang, Chairman and President of Greenland Holding, stated,Greenland proceeds from its own industrial characteristics and resource advantages to implement the national strategy of boosting the economy through consumption.The hotel, tourism, and exhibition industry is an important part of Greenland’s mass consumption industry and a key pillar supporting its high-quality development under the new circumstances. According to Greenland’sThree-Year High-Quality Development Plan for the Hotel, Tourism, and Exhibition Industry,the company aims to build a globally competitive hotel and tourism group with hotels as the core business and tourism and exhibitions as the two engine wings, establishing a number of market-influential hotel, tourism, and exhibition brands under the Greenland name. It will become a leading enterprise in the national industry, a crucial support for Greenland’s mass consumption, a significant force for industrial synergy, and an important vehicle for capital operations.

Photo shows the signing of a strategic cooperation agreement between Greenland and Barcelona International Convention Centre, an international exhibition giant, and the establishment of Greenland Barcelona Convention Centre in December 2018