Revaluation losses

Dear Directors of China Motor Bus Company, Limited (“CMB”),

We note the CMB’s announcement on 22 July, 2020 regarding the revaluation losses of CMB’s investment properties.

The announcement correctly identifies COVID-19 as the primary cause of the revaluation losses. We believe that COVID-19 has far-reaching impact on how people work: the demand for office space cities will drastically (and perhaps irreversibly) decline, as white-collar workers have proved that they can work from home as efficiently as they do at their offices.

We thus recommend CMB to:
• Sell its entire portfolio of office buildings (alternatively, the company itself) to a strategic investor
• Expedite the redevelopment of the Chai Wan headquarters
• Pay excess cash as dividends

We remain keen to join the board of CMB to assist the Chairman to maximize value for all shareholders.

Yours sincerely,
Kin Chan
Argyle Street Management Limited