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

- Actively responding to consumption upgrade: First mixed-ownership reform in the mass consumption sector debuts

Shanghai, March 19, 2019 -- The 'Greenland Model' has achieved another success in actively promoting the reform of central enterprises and key local state-owned enterprises, actively responding to the national consumption upgrade strategy and leading a better life, while also strongly supporting the construction of Shanghai’s 'Five Centers' and 'Four Brands'.On March 19, Greenland Holding (600606.SH) and China Eastern Air Group held a signing ceremony for the 'investment in Shanghai Airlines Travel Agency', announcing that Greenland successfully acquired 65% equity 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, while China Eastern Airlines Co., Ltd. holds the remaining 35%. According to the restructuring plan, Greenland will further promote the mixed-ownership reform of Shanghai Airlines Travel Agency, with plans to gradually release up to 25% of the equity to the management team of Shanghai Airlines Travel Agency, forming the 'tri-equity structure' of Greenland, China Eastern, and the management team under the 'Greenland Model'.This marks another collaboration between Greenland and China Eastern following their participation in the mixed-ownership reform of China Eastern Logistics. In recent years, Greenland Holding and China Eastern Air Group have joined hands 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 developing the advantages of both parties' resources and brands, and achieving complementary businesses and synergistic development.Greenland actively responds to the national consumption upgrade strategy; this is the first time the 'Greenland Mixed-Ownership Reform' model has entered the mass consumption industry.It is conducive to further strengthening and expanding Greenland’s related mass consumption industries, better promoting consumption upgrades and leading people toward a better life.

Photo shows the scene of the signing ceremony

The predecessor of Shanghai Airlines Travel Agency was 'Shanghai Flying Crane Travel Company', established in September 1986. It was 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-scale travel service enterprise with three main business areas: tourism, business travel, and exhibitions.Its business scope covers inbound tourism, domestic tourism, business conferences and exhibitions, domestic and international charter flights and ticket agency services, tourist vehicles, and overseas employment services. China Eastern Air Group actively responds to the national push for mixed-ownership reform of central enterprises, leading the progress among central enterprises. Through extensive reforms at both the group and subsidiary levels, it has achieved remarkable results.China Eastern Air Group has become a benchmark for the new round of mixed-ownership reforms among central 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 on the reform of an important 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 airline network that spans the globe and long-term stable passenger transport volumes ranking among the top globally. Greenland Holding has a global presence, with real estate as its core business and diversified development.The two parties enjoy strong business synergy and complementary advantages.They will comprehensively drive mutual industrial advantages in comprehensive real estate development, logistics operations, hotel management, as well as commercial trade, tourism ticketing, media advertising, and other fields, fully tapping the potential for business synergy to achieve a '1+1>2' effect and advance together.

Achieving control over Shanghai Airlines Travel Agency is also the second successful mixed-ownership reform 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 the coordinated layout of the 'one body, two wings' in the hotel, tourism, and exhibition industry.Next, Greenland will combine Shanghai Airlines Travel Agency’s deep accumulation in aviation travel resources, industry qualifications, and store networks, leveraging Greenland’s overall brand, resources, and comprehensive industrial synergies to further enhance the core competitiveness and comprehensive competitive advantages of the hotel, tourism, and exhibition industry value chain.Greenland will actively layout the global tourism market, creating a smart tourism resource operator with core businesses in characteristic tourism services and business travel services, integrating 'food, accommodation, transportation, sightseeing, shopping, and entertainment', significantly expanding the market scale and influence of Greenland’s 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 industry resources, strengthen industrial synergy, and build an industrial ecosystem closed loop covering upstream and downstream segments such as tourist destinations, channel traffic, visitor expansion, and data development. It will gradually cultivate the Greenland tourism brand, establish a number of high-standard tourist destinations, build a series of integrated 'Greenland Life Experience Centers', establish a powerful visitor resource operation channel, and strive to achieve asset securitization of the tourism business by 2021.

At the end of last year, Greenland signed a strategic cooperation agreement with international exhibition giant Fira de Barcelona and established Greenland Fira de Barcelona Exhibition Company. 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 Greenland’s sound and rapid development under the new circumstances. According to Greenland’sthree-year high-quality development plan for the hotel, tourism, and exhibition industry,it 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, forming a number of market-influential Greenland-branded hotels, tourism, and exhibition brands, becoming a leading enterprise in the national industry, an important pillar of Greenland’s mass consumption, a significant force in industrial synergy, and an important vehicle for capital operations.

Photo shows the signing of a strategic cooperation agreement between Greenland and international exhibition giant Fira de Barcelona in December 2018 and the establishment of Greenland Fira de Barcelona Exhibition Company