UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM20-F

(Mark One)

OR

For the fiscal year ended December 31, 20142017

OR

OR

Date of event requiring this shell company report

For the Transition period from    to    

Commission file number:001-12126

CHINA ENTERPRISES LIMITED

(Exact Name of Registrant as Specified in its Charter)

Bermuda

(Jurisdiction of Incorporation or Organization)

25th Floor, Paul Y. Centre, 51 Hung ToUnit 703, 7/F, 1063 King’s Road, Kwun Tong, Kowloon,Quarry Bay, Hong Kong

(Address of Principal Executive Office)

Ken Lau, Chief Financial Officer

China Enterprises Limited

Unit 703, 7/F, 1063 King’s Road, Quarry Bay, Hong Kong

Telephone: (852) 3151-0300 Fax: (852) 2542-0298

(Name, Telephone,E-mail/and/or Facsimile Number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:

Common stock, par value $0.01 per share

(Title of Class)

Securities for which there is a reporting obligation pursuant to section l5(d)15(d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the Annual Report.

Common Stock: 9,017,310 shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities

Act.    ¨☐  Yes    x☒  No

If this is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    ¨☐  Yes     x☒  No

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ¨☐  Yes    x☒  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 ofRegulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ¨☒  Yes    ¨☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a non-accelerated filer.an emerging growth company. See definition of “accelerated filer and large accelerated filer” inRule 12b-2 of the Exchange Act (checkAct. (Check one):

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.    ¨☐  Item 17    ¨☐  Item 18

If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act).    ¨☐  Yes    x☒  No

TABLE OF CONTENTS

PART I

This Annual Report for China Enterprises Limited (referred to in this report as the “Company” or “we” and which terms shall include, when the context so requires, the subsidiaries of the Company during the applicable period) should be read in conjunction with the consolidated financial statements and accompanying notes included in this report.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form20-F for the year ended December 31, 20142017 contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended.amended, or the Exchange Act. These forward-looking statements are, by their nature, subject to significant risks and uncertainties, and include, without limitation, statements relating to:

The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan”, “may” and similar expressions, as they relate to us, are intended to identify certain of such forward-looking statements. We do not intend to update these forward-looking statements except as required by the U.S. securities laws.

These forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. They are based upon various assumptions, many of which are based, in turn, upon further assumptions, including, without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyond the Company’s control, there can be no assurance that the companyCompany will achieve or accomplish these expectations or beliefs.

In addition to the factors and matters discussed elsewhere herein, there are a number of important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in the forward-looking statements, including, without limitation, the strength of world economies and currencies, general market conditions, changes in general domestic and international political conditions, and other matters described in the “Risk Factors” section included in this Annual Report or otherwise described in the reports the Company files with the U.S. Securities and Exchange Commission.Commission, or the SEC.

EXCHANGE RATE INFORMATION

Unless otherwise specified, all references in this document to “U.S. Dollars”, “Dollars”, “US$” or “$” are to United States dollars; all references to “Renminbi” or “Rmb” are to Renminbi, which is the legal tender currency of the People’s Republic of China, or the “PRC” or “China”; and all references to “HK$” are to Hong Kong dollars, which is the legal tender currency of the Hong Kong Special Administrative Region, or “Hong Kong”. Where made for the convenience of the reader, conversions of amounts from Renminbi to U.S. Dollars have been made in this document at US$1.00 to Rmb6.2046,Rmb6.5063, the noon buying rate from the Federal Reserve Bank of New York on December 31, 2014.2017. No representation is made that the Renminbi amounts could have been, or could be, converted into U.S. Dollars at that or at any other rate. See the section “Exchange Rate Information” under “Item 3. Key Information” in this Annual Report for more details on the exchange rate between Renminbi and US Dollars.

References and statements contained in this document regarding China do not apply to Taiwan or the Republic of China.

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

Not applicable.

A. SELECTED FINANCIAL DATA

The following table represents the selected consolidated financial information of the Company as of and for the years ended December 31, 2010, 2011, 2012, 2013, 2014, 2015, 2016 and 2014.2017. The Consolidated Statements of Operations Data for each of the three years in the period ended December 31, 20142017 and the Consolidated Balance Sheets Data as of December 31, 20132016 and 2014 has2017 have been derived from the audited consolidated financial statements, or the “Consolidated Financial Statements”, included in Item 17 “Financial Statements” of this Annual Report. The Consolidated Statements of Operations Data for the years ended December 31, 20102013 and 20112014 and the Consolidated Balance Sheets Data as of December 31, 2010, 20112013, 2014 and 2012,2015, as set forth below, have been derived from audited consolidated financial statements not included in this Annual Report. The Consolidated Financial Statements have been prepared in conformity with generally accepted accounting principles in the United States, or U.S. GAAP. The selected financial information should be read in conjunction with, and is qualified in its entirety by reference to, the respective consolidated financial statements and their accompanying notes.

Selected Consolidated Financial Information of the Company

(Amounts in thousands, except number of shares, their par values and per share data)

Notes:Note:

Exchange Rate Information

The Consolidated Financial Statements are published and denominated in Renminbi. Where made for the convenience of the reader, conversion of amounts from Renminbi to U.S. Dollars has been made in this document at US$1.00 to Rmb6.2046,Rmb6.5063, the noon buying rate certified by the Federal Reserve Bank of New York on December 31, 2014.2017. For the purpose of this Annual Report, the latest practicable date with respect to share and certain exchange rate information is NovemberApril 30, 2015.2018. As of NovemberApril 30, 2015,2018, the noon buying rate certified by the Federal Reserve Bank of New York was US$1.00 to Rmb6.3883.Rmb6.3325. No representation is made that the Renminbi amounts could have been, or could be, converted into U.S. Dollars at that or at any other rate.

The following table sets forth the average unified exchange rates for each of the years ended December 31, 2010, 2011, 2012, 2013, 2014, 2015, 2016 and 2014:2017:

The following table sets forth the high and low exchange rates for each month during the previous six months:

B. CAPITALIZATION AND INDEBTEDNESS

Not applicable.

C. REASONS FOR THE OFFER AND PROCEEDS

Not applicable.

D. RISK FACTORS

Investing in our shares involves various risks, including the risks described below. You should carefully consider the following risks and the other information contained in this Annual Report before investing in our shares. Additional risks not currently known to us or that we currently believe are immaterial also may impair our business operations, financial condition and our liquidity.

Risks Related to Our Business

AS A RESULT OF CHANGES IN THE COMPANY’S ASSETS AND SOURCES OF INCOME, THE COMPANY MAY BE AN INVESTMENT COMPANY FOR PURPOSES OF THE UNITED STATES INVESTMENT COMPANY ACT OF 1940

While the Company believes that in the past, through its subsidiaries and affiliates, it has actively engaged in operating businesses and did not meet the definition of an investment company for purposes of the United States Investment Company Act of 1940, or the 1940 Act, depending on the composition and valuation of the Company’s assets and the sources of the Company’s income from time to time, including after the consummation of the transactions during 2012 to 2015 described in Item 4.A., History and Development of the Company, the Company may fall within the technical definition of the term “investment company” for purposes of the 1940 Act. The Company is not registered, nor is it eligible to register under the 1940 Act. As a result, if the Company is deemed to be an investment company under the 1940 Act, the Company’s operations and results may be negatively impacted, includingimpacted. For example, among other possible effects and so long as the Company is an investment company, it would neither be able to raise capital through the offer and sale of its securities in the United States nor to conduct business in the United States. The Company may be unable to continue operating as it currently does and might need to acquire or sell assets that it would not otherwise acquire or sell in order to avoid continuing to be deemed an “investment company” as defined under the 1940 Act.

THE COMPANY MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT ITS BUSINESS STRATEGY, IN WHICH CASE ITS BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION WOULD SUFFER

In November 2011, the Company disposed of all of its interest in Hangzhou Zhongce and it ceased to be an equity method affiliate of the Company. In addition, all of the subsidiaries of the Company were inactive during fiscal years 20132016 and 2014.2017. Despite the Company’s efforts to identify new investments, it has had limited success in doing so and, if it does identify new investments, it may not be able to consummate them.their acquisition. Even if the Company successfully identifies and consummates the acquisition of new investments, the acquisition of new businesses and business lines carries substantial risk and uncertainties. Depending on the specific acquisition, there may be risks relating to the acquired business itself, risks relating to the industry in which the business operates and risks relating to the Company itself.

THE COMPANY MAY NOT BE ABLE TO FINANCE ACQUISITIONS, STRATEGIC INVESTMENTS OR OTHER EXPANSIONS OR MAY INCUR FINANCIAL OBLIGATIONS OR LIABILITIES IN CONNECTION WITH ANY ACQUISITION OR EXPANSION

Although as of December 31, 2014,2017, the Company believes it had a strong cash position, the Company may experience difficulty in funding acquisitions, investments or expansion. The Company may fund any such activities through bank loans or other debt financing and could incur an increase in debt or other liabilities in connection with any acquisitions, strategic investments or other expansions.

FUTURE ACQUISITIONS OR STRATEGIC INVESTMENTS MAY NOT BE SUCCESSFUL AND MAY HARM OUR OPERATING RESULTS

Selective acquisitions or strategic investments form a large part of our strategy to further expand our business. If we are presented with appropriate opportunities, we may acquire or invest in other companies, ventures or businesses. Future acquisitions and the subsequent integration of new companies into ours would require significant attention from our management. Potential problems encountered by each organization during mergers and acquisitions would be unique, posing additional risks to the company. Future acquisitions or investments would expose us to potential risks, including risks associated with the assimilation of new operations, and could have a material adverse effect on our business and financial results because of possible charges for purchased technology, restructuring or impairment charges related to goodwill or amortization expenses associated with intangible assets; potential increases in our expenses and working capital requirements and the incurrence of debt and contingent liabilities; diversion or our capital and management’s attention to other business concerns; risks of entering markets or geographic areas in which we have limited prior experience; or potential loss of key employees of acquired organizations or inability to hire key employees necessary for expansion.

DIVERSIFICATION MAY RESULT IN LOWERED RESPONSIVENESS TO CYCLICAL CHANGES OF DIFFERENT BUSINESSES

Any diversification of the Company’s businesses, including through any investments in other businesses, will result in assets, resources and management being committed or allocated to businesses in different fields. As a result, the Company’s flexibility in responding to seasonal changes or periodic fluctuations in the business cycle in a particular business operation may be limited.

THE COMPANY BELIEVES IT WAS CLASSIFIED AS A “PASSIVE FOREIGN INVESTMENT COMPANY” WHICH COULD HAVE A NEGATIVE IMPACT ON U.S. HOLDERS

U.S. investors in the Company’s common stock should be aware that the Company believes it was classified as a passive foreign investment company, or PFIC, during the tax year ended December 31, 2014,2017, and based on current business plans and financial expectations, the Company believes that it may be a PFIC in subsequent tax years. If the Company is a PFIC for any year during a U.S. shareholder’s holding period, then such U.S. shareholder generally will be required to treat any gain realized upon a disposition of the Company’s common stock, or anyso-called “excess distribution” received on such common stock, as ordinary income, and to pay an interest charge on a portion of such gain or distributions, unless the shareholder makes a timely and effective “qualified electing fund” election (“QEF Election”) with respect to such common stock. A U.S. shareholder who makes a QEF Election generally must report on a current basis its share of the Company’s net capital gain and ordinary earnings for any year in which the Company is a PFIC, whether or not the Company distributes any amounts to its shareholders. However, U.S. shareholders should be aware that the Company did not satisfy record keeping requirements that apply to a qualified electing fund for its tax year ended December 31, 20142017 and there can be no assurance that the Company will in the future satisfy record keeping requirements that apply to a qualified electing fund, or that the Company will supply U.S. shareholders with information that such U.S. shareholders are required to report under the QEF Election rules, in the event that the Company is a PFIC and a U.S. shareholder wishes to make a QEF Election. Thus, U.S. shareholders may not be able to make a QEF Election with respect to their Company common stock. This paragraph is qualified in its entirety by the discussion below under the heading “Taxation — Certain Material United StatesU.S. Federal Income Tax Consequences.” Each U.S. shareholder should consult its own tax advisor regarding the PFIC rules and the U.S. federal income tax consequences of the acquisition, ownership, and disposition of the Company’s common stock.

CHANGES IN ACCOUNTING STANDARDS AND TAXATION REQUIREMENTS COULD AFFECT OUR FINANCIAL RESULTS

New accounting standards or pronouncements that may become applicable to us from time to time, or changes in the interpretation of existing standards and pronouncements, could have a significant effect on our reported results for the affected periods. We also expect to become subject to income tax in jurisdictions in which we expect to commence generating revenues. Increases in income tax rates could reduce ourafter-tax income from affected jurisdictions, while increases in indirect taxes could affect our financial results.

FAILURE OF INFORMATION TECHNOLOGY COULD HAVE A NEGATIVE IMPACT ON OUR OPERATIONS

Growing standardization, more reliance on global systems, information technology services and increased regulations lead to a risk that our information technology systems may fail. This could affect the Company’s operational performance and financial position.

OUR OPERATIONS, ASSETS AND STAFF CAN BE EXPOSED TO RISKS RELATED TO EVENTS OF AN EXCEPTIONAL NATURE

The Company, including its assets and staff, could be exposed to risks related to events of an exceptional nature such as, but not limited to, severe weather, natural disasters, terrorist attacks, political unrest and accidents. Such events could have a significant effect on our financial condition, results of operations and cash flows.

FAILURE TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROLS OVER FINANCIAL REPORTING COULD HAVE A MATERIAL ADVERSE EFFECT ON THE ACCURACY IN REPORTING OUR FINANCIAL RESULTS OR PREVENTING FRAUD

Undetected internal control weaknesses or controls that function ineffectively represent a risk of loss or financial misstatement. Internal control over financial reporting may not prevent or detect misstatements because of inherent limitations, including the possibility of human error, the circumvention or overriding of controls or fraud. Therefore, even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If the Company fails to maintain the adequacy of its internal controls as it has at times in the past, including any failure to implement required new or improved controls, or if it experiences difficulties in the implementation of internal controls, the Company’s business and operating results could be harmed, and it could fail to meet its reporting obligations.

We are subject to reporting obligations under the U.S. securities laws. The Securities and Exchange Commission, or the SEC, as required by Section 404 As of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, adopted rules requiring every public company to include aDecember 31, 2014, for example, management report on such company’s internal control over financial reporting in its Annual Reportconcluded that contains management’s assessment of the effectiveness of the Company’s internal control over financial reporting.reporting was ineffective and identified a material weakness, similar to prior years, concerning the Company’s internal accounting staff’s lack of understanding of complex accounting issues related to U.S. generally accepted accounting principles, including accounting for income taxes. In response, the Company engaged external consultants to perform a number of tasks to prepare specific accounting analysis.

Moreover, effective internal controls are necessary for us to produce reliable financial reports and are important in helping prevent financial fraud. If we are not able to provide reliable financial reports on a timely basis or prevent financial fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our stock could drop significantly.

Because the Company is anon-accelerated filer, the Company is also not required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002. As a result, investors may have less confidence in the assessment of the Company’s internal controls over financial reporting performed by management, and our stock may be less attractive.

Risks Related to Doing Business in China

THE COMPANY’S BUSINESS FOCUS ON THE GREATER CHINA REGION SUBJECTS THE COMPANY AND ITS BUSINESS TO THE POLITICAL, ECONOMIC AND OTHER DEVELOPMENTS IN THE REGION

As a result of the Company’s traditional business focus on the Greater China Region, the Company’s business and its financial and operating results may be affected by significant political, economic, social and cultural developments in the region. A substantial portion of the Company’s investment opportunities, major businesses of which are located in China, these businesses are dependent in large part on the performance of the Chinese economy and Chinese government policy. As a result, the future financial condition and results of operations of the Company could be adversely affected by slowdowns in the Chinese economy, Chinese macroeconomic policies thatde-emphasize the development of industries that utilize products or services of the Company or other governmental policies, including changes in laws, regulations or the interpretation thereof; confiscatory taxation; restrictions on currency conversion, imports or sources of supplies; or the expropriation or nationalization of private enterprises. Any measures or actions taken by the Chinese government to control industries that utilize products or services of the Company could restrict their business operations and adversely affect the financial positions of the Company.

Although the Company believes that the economic reforms and macroeconomic policies and measures adopted by the Chinese government will continue to have a positive effect on economic development in China and that the Company will continue to benefit from these policies and measures, there is no assurance that the government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting China’s political, economic and social life.

In addition, the Company’s financial results are significantly dependent on the economy in the region. The economy of the Greater China Region differs significantly from the economies of the United States and Western Europe in such respects as structure, level of development, growth rate, capital reinvestment, resource allocation, self-sufficiency, rate of inflation and balance of payments position, among others. Furthermore, the recent global economic downturn has had a significant impact on the region’s economic growth as it is primarily an export-oriented economy. Future adverse economic factors or changes in the policies of the Chinese government could have a material adverse effect on the overall economic growth of China. These developments could adversely affect the financial condition, results of operations and business of the Company by reducing the demand for the products and services of the Company.

As a member of the World Trade Organization, China’s economic activity is expected to become more and more export driven and China’s internal market is expected to see more competition through imports. The expected change in economic activity in China and the Greater China Region and a greater interdependence of the Chinese economy on the general world economy as a result of such changes could also impact the Company’s financial results.

RESTRICTIONS ON FOREIGN CURRENCY EXCHANGE MAY LIMIT OUR ABILITY TO RECEIVE AND USE OUR RESOURCES EFFECTIVELY

Any future restrictions on currency exchanges may limit our ability to use resources generated in Renminbi to fund our business activities outside China or other payments in Hong Kong dollars or other foreign currencies. Although the PRC government introduced regulations in 1996 to allow greater convertibility of the Renminbi for current account transactions, significant restrictions still remain, including primarily the restriction that foreign invested enterprises may only buy, sell or remit foreign currencies at those banks authorized to conduct foreign exchange business after providing valid commercial documents. In addition, remittance of foreign currencies abroad and conversion of Renminbi for capital account items, including direct investment and loans, is subject to governmental approval in China, and companies are required to open and maintain separate foreign exchange accounts for capital account items. We cannot be certain that the Chinese regulatory authorities will not impose more stringent restrictions on the convertibility of the Renminbi, especially with respect to foreign exchange transactions.

FLUCTUATIONS IN THE VALUE OF THE RENMINBI COULD NEGATIVELY IMPACT OUR RESULTS OF OPERATIONS

Our reporting currency is the Renminbi as a substantial portion of our investments are denominated in Renminbi. Our remaining assets and liabilities and all of our operating expenses are denominated in Hong Kong dollars. As a result, we may be exposed to foreign exchange risk, and our results of operations may be negatively impacted by fluctuations in the exchange rate of Renminbi against other currencies. As our major assets and liabilities comprise a mixture of items that are denominated in Renminbi and Hong Kong dollars, our business and operating results may be materially affected in the event of a severe increase or decrease in the value of the Renminbi against other currencies.

The value of the Renminbi is subject to changes in China’s governmental policies and to international economic and political developments. Since January 1, 1994, the PRC government has used a unitary managed floating rate system. Under this system, the People’s Bank of China, or PBOC, publishes a daily basedbase exchange rate with reference primarily to the supply and demand of Renminbi against U.S. dollars and other foreign currencies in the market during the previous day. Authorized banks and financial institutions are allowed to quote buy and sell rates for Renminbi within a specified band around the central bank’sPBOC’s daily exchange rate. On March 17, 2014,August 11, 2015, the PBOC announced thatcut the RMB exchangeRenminbi exchange’s reference rate flexibility increased to 2%by a record of 1.9%, sparking the sharpest fall in the currency since the U.S. dollar peg ended a decade ago, in order to proceed further with reform of the RMBRenminbi exchange rate regime. TheseThis cut could result in a further and more significant floatation in the RMB’s value against the U.S. Dollars.Dollar. Through 2016 the RMB continued its significant depreciation. This depreciation halted in 2017, and the RMB appreciated against the U.S. dollar during thisone-year period. The exchange rate of the RMB against U.S. Dollar as of December 31, 2017 and 2016 were 6.5063 and 6.9430.With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system and there is no guarantee that the RMB will not appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future.

While the international reaction to the Renminbi revaluation has generally been positive, there remains significant international pressure on the PRC government to adopt an even more flexible currency policy, which could result in a further and more significant fluctuation of the Renminbi against the U.S. dollar and other currencies.

NATURAL DISASTERS IN THE GREATER CHINA REGION COULD CAUSE SIGNIFICANT DAMAGE TO THE COMPANY’S BUSINESS AND FINANCIAL RESULTS

The Company’s investment opportunities are primarily located in the PRC. During the past several years, the PRC has experienced natural disasters, including floods, fires and earthquakes. A disaster could cause significant damage to the facilities of potential investees, which may not be adequately covered by insurance proceeds and could materially and adversely impact the business of the Company. The disaster relief and assistance in the PRC is not well developed and there can be no assurance that adequate government assistance would be available in the absence of sufficient insurance coverage.

OUR RESULTS COULD BE HARMED IF WE HAVE TO COMPLY WITH NEW ENVIRONMENTAL REGULATIONS

The operations of the Company could create environmentally sensitive waste depending on the nature of the operations of potential investees. The general issue of the disposal of hazardous waste has received increasing attention from Chinese national and local governments and foreign governments and agencies and has been subject to increasing regulation. Currently, relevant Chinese environmental protection laws and regulations impose fines on the discharge of waste materials and empower certain environmental authorities to close any facility that causes serious environmental problems. Although it has not been alleged by Chinese government officials that the Company have violated any current environmental regulations, there is no assurance that the Chinese government will not amend its current environmental protection laws and regulations. Our financial results could be materially and adversely affected if the Company was to increase expenditures to comply with environmental regulations affecting the operations of potential investees.

LEGAL SYSTEM DIFFERENCES BETWEEN THE GREATER CHINA REGION AND THE UNITED STATES OF AMERICA COULD IMPACT INVESTORS

Unlike common law systems in certain parts of the westernWestern world, China has a civil law system based on written statutes and, therefore, decided legal cases are without binding legal effect, although they are often followed by judges as guidance. As the Chinese legal system develops, the promulgation of new laws, changes to existing laws and the preemption of local regulations by national laws may adversely affect the interests of foreign investors.

YOU MAY HAVE DIFFICULTY ENFORCING JUDGMENTS AGAINST US

We are a Bermuda holding company and all of our assets are located outside of the United States. Most of our current business is conducted in Hong Kong and in the PRC. In addition, most of our directors and officers are nationals and residents of countries other than the United States. A substantial portion of the assets of these persons is located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon these persons. It may also be difficult for you to enforce in U.S. courts judgments on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors whom are not residents in the United States.

OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S AUDIT DOCUMENTATION RELATED TO THEIR AUDIT REPORTS INCLUDED IN THIS ANNUAL REPORT MAY BE LOCATED IN THE PEOPLE’S REPUBLIC OF CHINA. THE PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD CURRENTLY CANNOT INSPECT AUDIT DOCUMENTATION LOCATED IN CHINA AND, AS SUCH, YOU MAY BE DEPRIVED OF THE BENEFITS OF SUCH INSPECTION

Our independent registered public accounting firms that issue the audit reports included in our annual reports filed with the U.S. Securities and Exchange Commission,SEC as auditors of companies that are traded publicly in the United States and a firm registered with the Public Company Accounting Oversight Board (United States) (the “PCAOB”), are required by the laws of the United States to undergo regular inspections by the PCAOB to assess their compliance with the applicable laws of the United States and professional standards. Because the audit documentation relating to our audits areis located in the People’s Republic of China, a jurisdiction where the PCAOB, notwithstanding the requirements of U.S. law, is currently unable to conduct inspections without the approval of the Chinese authorities, such auditors, like other independent registered public accounting firms operating in China, are not currently inspected by the PCAOB. In May 2013, the PCAOB announced that it had entered into a Memorandum of Understanding on Enforcement Cooperation with the Chinese Securities Regulatory Commission, or CSRC, and the PRC Ministry of Finance, which establishes a cooperative framework between the parties for the production and exchange of audit documents relevant to investigations undertaken by the PCAOB, the CSRC or the PRC Ministry of Finance in the United States and the PRC, respectively. The PCAOB continues to be in discussions with the CSRC and the PRC Ministry of Finance to permit joint inspections in the PRC of audit firms that are registered with the PCAOB and audit Chinese companies that trade on U.S. exchanges.

Inspections of other firms that the PCAOB has conducted outside of China have identified deficiencies in those firms’ audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. The inability of PCAOB to conduct inspections of independent registered public accounting firms operating in China makes it more difficult to evaluate the effectiveness of our auditors’ audit procedures or quality control procedures. As a result, investors may be deprived of the benefits of PCAOB inspections.

PROCEEDINGS INSTITUTED BY THE SEC AGAINST FIVEPRC-BASED ACCOUNTING FIRMS COULD RESULT IN ADVERSE IMPACT ON OUR BUSINESS AND PRICE OF OUR STOCK.STOCK

In late 2012, the SEC commenced administrative proceedings under Rule 102(e) of its Rules of Practice and also under the Sarbanes-Oxley Act of 2002 against thePRC-based units of five accounting firms. The Rule 102(e) proceedings initiated by the SEC relate to these firms’ failure to produce documents, including audit work papers, in response to the request of the SEC pursuant to Section 106 of the Sarbanes-Oxley Act of 2002, as the auditors located in the PRC are not in a position lawfully to produce documents directly to the SEC because of restrictions under PRC law and specific directives issued by the China Securities Regulatory Commission (“CSRC”).CSRC. The issues raised by the proceedings are not specific to our auditors or to us, but affect equally all audit firms based in China and all China-based businesses with securities listed in the United States.

In January 2014, the administrative judge reached an Initial Decision that thePRC-based units of the “big four” accounting firms should be barred from practicing before the SEC for six months. The decision is neither final nor legally effective unless and until reviewed and approved by the SEC. In February 2014, four of thesePRC-based accounting firms appealed to the SEC against this decision. In February 2015, each of the fourPRC-based accounting firms agreed to a censure and to pay a fine to the SEC to settle the dispute and avoid suspension of their ability to practice before the SEC. The settlement requires the firms to follow detailed procedures to seek to provide the SEC with access to Chinese firms’ audit documents via the CSRC. If the firms do not follow these procedures, the SEC could impose penalties such as suspensions, or it could restart the administrative proceedings.

In the event that the SEC restarts the administrative proceedings, depending upon the final outcome, public companies in the United States with major PRC operations may find it difficult or impossible to retain auditors in respect of their operations in the PRC, which may result in SEC’s revocation of the registration of their shares under the Exchange Act, including possible delisting. Moreover, although our independent registered public accounting firm was not named as a defendant in the above SEC administrative proceedings, any negative news about the proceedings against these audit firms may erode investor confidence in China-based, USU.S. public companies, including us, and the market price of our shares may be adversely affected.

WE MAY FACE UNCERTAINTIES REGARDING INDIRECT TRANSFERS OF EQUITY INTERESTS IN PRC RESIDENT ENTERPRISES BY ANON-RESIDENT ENTERPRISE. ENTERPRISE

In connection with the EIT Law, the Ministry of Finance of the PRC and the SAT jointly issued, on April 30, 2009, the Notice on Issues Concerning Process of Enterprise Income Tax in Enterprise Restructuring Business, or Circular 59. On December 10, 2009, the SAT issued the Notice on Strengthening the Management on Enterprise Income Tax forNon-resident Enterprises Equity Transfer, or Circular 698. Both Circular 59 and Circular 698 became effective retrospectively on January 1, 2008. By promulgating and implementing these circulars, the PRC tax authorities have strengthened their scrutiny over the direct or indirect transfer of equity interest in a PRC resident enterprise by anon-resident enterprise. For example, Circular 698 specifies that the SAT is entitled to redefine the nature of an equity transfer where offshore vehicles are interposed by abusing corporate structures fortax-avoidance purposes and without reasonable commercial intention. We may pursue acquisitions as one of our growth strategies, and may conduct acquisitions involving complex corporate structures. We cannot be assured that the PRC tax authorities will not, at their discretion, adjust the taxable capital gains of the seller, which may indirectly increase acquisition costs.

On February 3, 2015, the State Administration of Tax issued a Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties byNon-Tax Resident Enterprises, or Public Notice 7. Public Notice 7 has introduced a new tax regime that is significantly different from that under Circular 698. Public Notice 7 extends its tax jurisdiction to not only indirect transfers set forth under Circular 698 but also transactions involving transfer of other taxable assets, through the offshore transfer of a foreign intermediate holding company. In addition, Public Notice 7 provides clearer criteria than Circular 698 on how to assess reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. Public Notice 7 also brings challenges to both the foreign transferor and transferee (or other person who is obligated to pay for the transfer) of the taxable assets. Where anon-resident enterprise conducts an “indirect transfer” by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, thenon-resident enterprise being the transferor, or the transferee, or the PRC entity which directly owned the taxable assets, may report to the relevant tax authority such indirect transfer. Using a “substance over form” principle, the PRC tax authority mayre-characterize such indirect transfer as a direct transfer of the equity interests in the PRC tax resident enterprise and other properties in China. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of up to 10%, for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes. In addition, the transferors and transferees may be subject to the tax filing obligation, while the PRC subsidiaries or affiliates may be requested to assist in the filing.

We may face uncertainties with respect to the reporting and consequences of private equity financing transactions, share exchange or other transactions involving the transfer of shares in our company by investors that arenon-PRC resident enterprises, or sale or purchase of shares in othernon-PRC resident companies or other taxable assets by us. Our company and othernon-resident enterprises in our group may be subject to filing obligations or being taxed if our company and othernon-resident enterprises in our group are transferors in such transactions, and may be subject to withholding obligations if our company and othernon-resident enterprises in our group are transferees in such transactions, under Circular 698 and Public Notice 7. For the transfer of shares in our company by investors that arenon-PRC resident enterprises, our PRC subsidiaries or affiliates may be requested to assist in the filing under Circular 698 and Public Notice 7. As a result, we may be required to expend valuable resources to comply with Circular 698 and Public Notice 7 or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company and othernon-resident enterprises in our group should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.

The PRC tax authorities have the discretion under Circular 698 and Public Notice 7 to make adjustments to the taxable capital gains based on the difference between the fair value of the taxable assets transferred and the cost of investment. If the PRC tax authorities make adjustments to the taxable income of the transactions under Circular 698 and Public Notice 7, our income tax costs associated with such potential acquisitions will be increased, which may have an adverse effect on our financial condition and results of operations.

Risks Related to Our Capital Stock

LIMITED LIQUIDITY IN THE COMPANY’S SECURITIES MAY MAKE IT DIFFICULT TO SELL SHARES

The public trading market for our common stock is limited. Beginning in November 2002, our common stock was traded on the OTC Securities Market.Marketplace. The OTC Securities MarketMarketplace is an inter-dealer,over-the-counter market that provides significantly less liquidity than other markets. As a foreign private issuer whose business is substantially in China and other Asian markets, the Company has less exposure in the U.S. capital markets than comparable U.S. issuers. In addition, the Company has a relatively small public float of its securities. These and other general economic, industry or Company factors may result in low trading volumes or prices of the Company’s securities. Accordingly, shareholders of the Company bear risks regarding the liquidity of the Company’s shares and may not be able to sell shares in desired quantities, at desired times or desired prices, or a combination thereof.

POSSIBLE VOLATILITY OF SHARE PRICES WORLDWIDE MAY HAVE SIGNIFICANT EFFECTS ON THE COMPANY’S SHARE PRICE

The trading price of the Company’s shares has been and may continue to be subject to wide fluctuations. Capital markets worldwide have generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the listed companies themselves. There can be no assurance that trading prices and price earnings ratios previously experienced by the Company’s common shares will be matched and maintained. Broad market and industry factors may adversely affect the market price of shares in the Company, regardless of its operating performance.

A. HISTORY AND DEVELOPMENT OF THE COMPANY

The Company was incorporated as an exempted company under the laws of Bermuda on January 28, 1993. From July 15, 1993 to late 2002, the Company’s shares were listed on the New York Stock Exchange. On November 26, 2002, the Company’s shares began trading on the OTC Securities Marketplace in the United States. The legal name of the Company is “China Enterprises Limited” and the Company is registered in Hong Kong under the commercial name of “China Tire Holdings Limited” due to local company registration considerations. The Company has historically been engaged in tire manufacturing and trading and related businesses.

In 2001, the Company decided to reorganize its operations to improve its financial performance. The Company began to dispose of loss-making subsidiaries and tried to diversify its business. In early 2002, the Company acquired a substantive equity interest of approximately 35% in Rosedale Hotel Holdings Limited, or Rosedale, which allowed it to diversify its business into the travel industry. In fiscal year 2003, the Company further completed its disposals of its loss-making subsidiaries, Yinchuan CSI (Greatwall) Rubber Co., Limited, and the Company’s remaining interests in Double Happiness Tyre Industries Corporation Limited, and ceased to account for the results of operations and the assets and liabilities of these subsidiaries from their respective disposal dates.

In order to realize part of its investment, the Company entered into a contract to sell a 25% interest in its subsidiary Hangzhou Zhongce, a PRC company, on June 15, 2003. As a result, the Company reduced its interest in Hangzhou Zhongce from 51% to 26%. The sale was completed in September 2003 and Hangzhou Zhongce became an equity method affiliate of the Group.Company.

During 2006 and 2007, the Company’s interest in its affiliate Rosedale, decreased from 20.36% to 12.77% as a result of dilution caused by capital raising activities of Rosedale and the disposal of Rosedale shares by the Company in the market. As a result of its decreased ownership of Rosedale, the Company began accounting for its remaining interest in Rosedale as trading securities instead of as an interest in an affiliate company as it was in previous years.

The Company, through Manwide Holdings Limited, a then direct wholly-owned subsidiary, entered into a conditional sale and purchase agreement dated June 16, 2004 with an independent third party, Shanghai Jiu Sheng Investment Limited, or Jiu Sheng, for the acquisition and further development of Xiang Zhang Garden, a parcel of land containing a24-story building under construction located in Shanghai, PRC. In June 2005, the Company commenced legal proceedings against Jiu Sheng, among other things, to demand that Jiu Sheng meet its obligations under the two agreements related to the purchase of Xiang Zhang Garden and petitioned a PRC court for an injunction order to prevent Xiang Zhang Garden from being transferred to the secured creditors of Jiu Sheng and the main contractor. In June 2006, the People’s High Court of the City of Shanghai ruled in favor of the Company and ordered Jiu Sheng to continue fulfilling its obligations under the applicable agreements and to proceed with the transfer of legal title of Xiang Zhang Garden to the Company. The judgment also required Jiu Sheng to pay Rmb5.9 million to the Company as compensation for the breach of the sale and purchase agreements. In August 2006, the Groupwe petitioned the People’s High Court of Shanghai for a court execution order to enforce the June 2006 judgment against Jiu Sheng. In March 2008, the Groupwe entered into a settlement agreement with Jiu Sheng whereby the Company disclaimed its rights in Xiang Zhang Garden in exchange for a payment of Rmb75 million, which was received in April 2008. A gain of Rmb17 million has beenwas recognized in the consolidated statement of operations for the year ended December 31, 2008.

In March 2008, Hanny HoldingsMaster Glory Group Limited (a(“Master Glory”, a publicly listed company in Hong Kong)Kong, formerly known as Hanny Holdings Limited), or Hanny, and certain of its subsidiaries entered into conditional sale and purchase agreements with an independent third party whereby it disposed of a 29.2% interest in the Groupus for cash consideration of approximately Rmb142 million. The sale closed on May 8, 2008. Following this sale, Hanny’sMaster Glory’s interest in the Company decreased from approximately 55.3% to 26.1%28.95% and the Company ceased to be a majority-owned subsidiary of Hanny.Master Glory.

In April 2008, the Company acquired 100% of the equity interests in Cosmos Regent Ltd, Cyber Generation Limited and Whole Good Limited, all of which are engaged in securities investment, from Hanny Magnetics (B.V.I.) Limited, a wholly owned subsidiary of Hanny.Master Glory. Total consideration for the three companies was Rmb34,417,000, and the amount was settled through the cancellation of obligations from HannyMaster Glory to the Company.

In April 2008, the Company entered into a Memorandum of Understanding to acquire a certain equity interest in a property investment company for consideration of Rmb150 million. A refundable deposit of Rmb75 million was paid to the third party vendor pursuant to the Memorandum of Understanding during the year ended December 31, 2008 and recorded as a deposit paid for the acquisition of investments for the years ended December 31, 2008 and 2009. The Memorandum of Understanding lapsed in June 2011. The deposit of Rmb67.5 million was refunded to the Company and the remaining Rmb7.5 million was charged as an administrative charge in the year ended December 31, 2011.

In April 2009, X One Holdings Limited, or X One, an affiliate of the Company, was dissolved pursuant to Section 291 of the Hong Kong Companies Ordinance.

In its Report on Form6-K filed with the Securities and Exchange CommitteeSEC on November 21, 2011, the Company reported that it had entered into a definitive agreement with CZ Tire Holdings Limited, or CZ. The Agreement provided for the sale of all of the Company’s ownership interests in Hangzhou Zhongce to CZ for Rmb600 million or approximately US$95.33 million in cash. The Company reported the closing of the transaction in its Report on Form6-K filed with the Securities and Exchange CommitteeSEC on November 28, 2011.

In its Report on Form6-K filed with the Securities and Exchange CommitteeSEC on October 4, 2012, the Company reported that its wholly owned subsidiary, Wealth Faith Limited, or Wealth Faith, had entered into a definitive agreement with Fortuneasy Limited, or Fortuneasy. The agreement provides for the purchase by Wealth Faith of 40% of the shares of Million Cube Limited, or Million Cube from Fortuneasy. The total purchase price for the shares being acquired by Wealth Faith is HK$200 million or approximately US$25.6 million. The Company, through Wealth Faith, previously deposited HK$154.8 million or approximately Rmb127.3 million in earnest money with Fortuneasy, which will bewas applied toward the purchase price. As provided in the agreement, Million Cube has acquired 45% of the issued share capital and corresponding shareholder loans of Paragon Winner Company Limited, or Paragon. Paragon was formed to invest in a joint venture that has developed and operated the Sanya Sun Valley Golf Resort in Yalong Bay, Sanya City, People’s Republic of China and that is seeking to develop a related hotel and resort complex at such resort. The transaction was completed in March 2015.

Following the closing of the transaction and pursuant to the Agreement, the Company hashad appointed one director to Million Cube’s board of directors, in order to exercise influence overand was resigned during the financial and operating decisions of the golf resort business.year ended December 31, 2016. The Company has continued to seek new strategic investment opportunities in the PRC, including Hong Kong. Apart from the golf resort business, the Company is also looking at other potential investments and has a long term goal to build a platform of value-added and productive businesses under the strategic direction of the Company whereby it can exercise significant influence over the financial and operating decisions of its investees, and then have a degree of responsibility for the return on its investments.

During 2017, Orion (B.V.I.) Tire Corporation, a 60% owned subsidiary incorporated in BVI and Whole Good Limited, a 100% owned subsidiary incorporated in BVI, were dissolved and a gain of approximately Rmb6.5 million was recorded on dissolution.

The Company is a holding company and had interests in a number of subsidiaries as of December 31, 2014.2017. The principal interests of the Company were as follows:

Additional information about the Company is available through the Internet at http://www.chinaenterpriseslimited.com. The principal place of business and the executive offices of the Company are located at 25th Floor, Paul Y. Centre, 51 Hung ToUnit 703, 7/F, 1063 King’s Road, Kwun Tong, Kowloon,Quarry Bay, Hong Kong and its telephone number is (852) 3151 0300.

B. BUSINESS OVERVIEW

The financial results of the Company were previously dependent on its equity share of the results from Hangzhou Zhongce, which the Company disposed of in November 2011, as discussed above.2011. The financial results of the Company now largely are attributable to investing activities. All of the majority and wholly owned subsidiaries of the Company were inactive during fiscal years 2012, 20132015, 2016 and 2014.2017 (other than Wealth Faith’s acquisition of 40% of the shares of Million Cube). The Company is actively seeking new investment opportunities.

Hangzhou ZhongceMillion Cube

Hangzhou ZhongceMillion Cube is incorporated in the British Virgin Islands and is engaged in investment holding. Million Cube holds 45% of the issued share capital and corresponding shareholder loans of Paragon Winner Company Limited, or Paragon. Paragon was incorporated in the British Virgin Islands and formed to invest in a joint venture that has developed and operated the Sanya Sun Valley Golf Resort in Yalong Bay, Sanya City, the People’s Republic of China. Its principal subsidiaries are mainly engaged in the manufacture and sale of rubber tires, tire rubber and carbon powder. Hangzhou Zhongce established Hangzhou Sunrise Rubber Co., Ltd with three other PRC enterprises in 1998 and acquired Hangzhou Fu Chun Jiang Chemical Industrial Co., Ltd in 1999, which manufactures radial tire products and a number of raw materials including tire rubbers and carbon powder. In 2008, Hangzhou Zhongce incorporated a PRC subsidiary Zhongce Rubber Fu Yang Co., Ltd, which is engaged in the manufacture and sale of rubber tires. In September 2003, the Company disposed of a portion of its interest in Hangzhou Zhongce and ceased to consolidate the results of Hangzhou Zhongce and its subsidiaries. As a result of that disposal,the Million Cube acquisition, the Company held a 26% interest in Hangzhou Zhongce, which was treated as an equity method affiliateindirectly owns approximately 18% of the Company for the years ended December 31, 2009 and 2010 and the first eleven months of 2011. In November 2011, the Company disposed of all of its interest in Hangzhou Zhongce and it ceased to be an equity method affiliate of the Company.Paragon.

Rosedale

Rosedale is an exempted company incorporated in Bermuda with limited liability. Its shares are listed on the Hong Kong Stock Exchange, or HKSE. Its principal subsidiaries are engaged in the business of hotel operationinvestment and trading of securities.

In 2002, the Company diversified into the travel business through an investment in Rosedale. However, following the disposal of a significant portion of its equity interest during fiscal year 2007, the Company’s equity interest in Rosedale decreased to 12.77% and was subsequently reclassified as trading securities of the Company. As of December 31, 2014,2017, the equity interest had further decreased to 7.40%6.17%.

C. ORGANIZATIONAL STRUCTURE

As of December 31, 2014,2017, the principal subsidiaries of the Company were:

D. PROPERTY, PLANTPLANTS AND EQUIPMENT

The registered office of the Company is located at Clarendon House, 2 Church Street, Hamilton, HM11, Bermuda. Only corporate administrative matters are conducted at this office, through the Company’s agent, MUFG Fund Services (Bermuda) Limited (formerly known as Butterfield Fulcrum Group (Bermuda) Limited.)Limited). The Company’s principal executive office is located at 25th Floor, Paul Y. Centre, 51 Hung ToUnit 703, 7/F, 1063 King’s Road, Kwun Tong, Kowloon,Quarry Bay, Hong Kong. The Company neither owns nor leases real property in Bermuda, Hong Kong, China or elsewhere. Space for use as the Company’s executive offices in Hong Kong.Kong is provided to the Company without charge by Dr. Yap, the Company’s Chairman.

The Company did not incur any principal capital expenditures, investment and divestitures over the last three years ended December 31, 2014.2017 other than with respect to the acquisition of 40% of the shares of Million Cube.

Except for statements of historical facts, this section contains forward-looking statements involving risks and uncertainties. You can identify these statements by forward-looking words including “expect,” “anticipate,” “believe,” “seek,” “estimate,” “intends,” “should” or “may.” Forward-looking statements are not guarantees of our future performance or results and our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under the section of this Report entitled Item 3 Key Information — “Risk Factors.” This section should be read along with our Consolidated Financial Statements included as Item 17 of this Annual Report, including the accompanying notes, that are included in this Annual Report on Form20-F. The following discussion of operating results and the financial review and prospects as well as our consolidated financial statements have been presented and prepared in accordance with U.S. GAAP. The forward-looking statements in this Item 5 are not guarantees of future performance. They involve both risk and uncertainty. Several important factors could cause our actual results to differ materially from those anticipated by these statements. Many of those factors are macroeconomic in nature and are, therefore, beyond the control of our management. Please see the “Risk Factors” in this Annual Report for more details.

A. OPERATING RESULTS

Overview

After disposal of all of its interest in the tire business in 2011 discussed above in “History and Development of the Company,” the Company is still actively looking for new investments. The PRC market continues to be the focus of world industry, and the Company is confident in the PRC market and continues to explore appropriate investment projects to expand its business network in the PRC.

Critical Accounting Policies

The preparation of our financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and judgments that affect our reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On anon-going basis, we evaluate our estimates and assumptions based upon historical experience and various other factors and circumstances. Management believes that our estimates and assumptions are reasonable under the circumstances; however, actual results may vary from these estimates and assumptions under different future circumstances. The following critical accounting policies affect the more significant judgments and estimates used in the preparation of the Company’s consolidated financial statements. For further discussion of our significant accounting policies, refer to Note 2 — “Summary of Significant Accounting Policies” to the Consolidated Financial Statements included in “Item 17 — Financial Statements” of this Annual Report.

Trading Securities

Accounting Estimates

The accounting estimates inherentTrading securities refer to equity securities that are bought and held principally for the purpose of selling them in the preparationnear term, and are reported at fair value, with unrealized gains and losses included in earnings. The fair value of the consolidated financial statementsCompany’s investments in trading securities is based on the quoted market price on the last business day of the fiscal year.

Available-for-sale Securities

Available-for-sale securities consist of quoted equity securities that are not designated as trading securities. They are held at fair value with unrealized gains and losses, net of tax, reported in accumulated other comprehensive gain or losses. Any unrealized losses that are deemed other-than-temporary are included in current period earnings and removed from accumulated other comprehensive gains or losses.

Realized gains and losses on investment securities are included in current period earnings. For purposes of computing realized gains and losses, the cost basis of each investment sold is generally based on the average cost method. And the Company mainly include estimates associatedregularly evaluates whether the decline in fair value ofavailable-for-sale securities is other-than-temporary and objective evidence of impairment could include:

No such other-than-temporary decline in fair value was recognized during the years ended December 31, 2016 and 2017.

Long-term Investment

In accordance with respect to collectabilityASC325-20,Investments-Other: Cost Method Investments, for investments in an investee over which the Company does not have significant influence, the Company carries the investment at cost and only adjusts for other-than-temporary declines in fair value and distributions of receivables,earnings. The Company’s management regularly evaluates the impairment of deposits paid for acquisitionits cost method investments based on the performance and financial position of investments and available-for-sale securities and valuation allowances of deferred tax assets. The process of determining significant estimates is fact specific and takes into account factors such as historical experience,the investee as well as other evidence of estimated market values. Such evaluation includes, but is not limited to, reviewing the investee’s cash position, recent financing, projected and historical financial performance, cash flow forecasts and current and expected economic conditions. Additionally,future financing needs. An impairment loss is recognized in the Company constantly re-evaluates these significant factorsconsolidated statements of operations equal to the excess of the investment’s cost over its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value would then become the new cost basis of investment. No impairment loss had been recorded for the years ended December 31, 2016 and makes adjustments where facts and circumstances dictate.2017.

Income Taxes

The Company records a valuation allowance to reduce its deferred tax assets to the amount that the Company believes is more likely than not to be realized. In the event the Company determines that it would be able to realize its deferred tax assets in the future in excess of its recorded amount, an adjustment to the deferred tax asset would be made that would increase income in the period such determination was made. Likewise, should the Company determine that it would not be able to realize all or part of its net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the years presented. Actual results may differ from those estimates. Significant estimates in these financial statements that are susceptible to change as more information becomes available are collectability of receivables, valuation allowances for deferred tax assets and impairment with respect to i) trading securities, ii)available-for-sale securities and iii) long- term investment.

Results of Operations: Fiscal year ended December 31, 20142017 compared with fiscal year ended December 31, 20132016

For 2014,2017, the Company recorded consolidated net lossprofit of Rmb2.5Rmb6.5 million, or Rmb0.28 lossRmb0.73 per share. By comparison, the net profit and the earnings per share in 2013 was Rmb9.92016 were Rmb0.6 million and Rmb1.10,Rmb0.07, respectively.

The Rmb2.1Rmb2.2 million loss from operating activities mainly represented the administrative expenses incurred for the year ended December 31, 2014.2017. General and administrative expenses were comprised of expenditures for personnel and administrative functions, including accounting, information technology, human resources, legal and administration. The general and administrative expenses in 20132016 were Rmb1.8Rmb2.7 million.

Apart from the general and administrative expenses of Rmb2.1Rmb2.2 million, components of net lossprofit of Rmb2.5Rmb6.5 million for the year ended December 31, 20142017 were interest income of Rmb5.4 million, dividend income of Rmb3.9Rmb0.1 million and gain on dissolution of subsidiaries of Rmb6.5 million, partial offset by net realized gain recognizedloss on disposalinvestments of securities of Rmb0.9Rmb0.2 million, offset by unrealized loss recognized on trading securities of Rmb4.0Rmb2.3 million and interest expense of Rmb0.5 million and an exchange loss of Rmb0.7Rmb0.8 million.

Apart from the general and administrative expenses of Rmb1.8Rmb2.7 million, components of net profit of Rmb9.9Rmb0.6 million for the year ended December 31, 20132016 were interest income of Rmb0.1Rmb2.6 million, unrealized gain recognized on trading securities of Rmb12.2 million, offset by interest expense of Rmb0.5Rmb2.4 million and an exchange gain of Rmb0.2 million, partial offset by net realized loss on investments of Rmb0.1Rmb1.2 million and interest expense of Rmb0.7 million.

Results of Operations: Fiscal year ended December 31, 20132016 compared with fiscal year ended December 31, 20122015

For 2013,2016, the Company recorded consolidated net incomeprofit of Rmb9.9Rmb0.6 million, or Rmb1.10Rmb0.07 per share. By comparison, the net profit and the earnings per share in 20122015 were Rmb2.9Rmb4.1 million and Rmb0.33,Rmb0.45, respectively.

The Rmb1.8Rmb2.7 million loss from operating activities mainly represented the administrative expenses incurred for the year ended December 31, 2013.2016. General and administrative expenses were comprised of expenditures for personnel and administrative functions, including accounting, information technology, human resources, legal and administration. The general and administrative expenses in 20122015 were Rmb1.7 million.

Apart from the general and administrative expenses of Rmb1.8 million, components of net profit of Rmb9.9 million for the year ended December 31, 2013 were interest income of Rmb0.1 million, unrealized gain recognized on trading securities of Rmb12.2 million, offset by interest expense of Rmb0.5 million and an exchange loss of Rmb0.1Rmb2.8 million.

Apart from the general and administrative expenses of Rmb1.7Rmb2.7 million, components of net profit of Rmb2.9Rmb0.6 million for the year ended December 31, 20122016 were interest income of Rmb0.2Rmb2.6 million, realized gain recognized on disposal of securities of Rmb1.3 million and unrealized gain recognized on trading securities of Rmb4.5Rmb2.4 million and an exchange gain of Rmb0.2 million, partial offset by net realized loss on investments of Rmb1.2 million and interest expense of Rmb0.7 million.

Apart from the general and administrative expenses of Rmb2.8 million, components of net profit of Rmb4.1 million for the year ended December 31, 2015 were interest income of Rmb0.1 million, unrealized gain on trading securities of Rmb10.0 million, partial offset by interest expense of Rmb0.9Rmb0.6 million, net realized loss on investments of Rmb0.4 million and an exchange loss of Rmb0.5Rmb2.2 million.

Impact of Inflation

Inflation and deflation in the PRC and Hong Kong has not had a material effect on our past business.operating results.

Impact of Tax Regulations

For the impact of tax regulations on the Company, see Note 6 to the Consolidated Financial Statements of the Company included in “Item 17. Financial Statements”.

B. LIQUIDITY AND CAPITAL RESOURCES

For 2014,2017, cash for financing the operations of the Company was principally obtained through the disposal of trading securities. During 20132016 and 2014,2017, the Company still saw a continuation of challenging financial and economic conditions. Although some signsThe global economy continued to face uncertainties while the growths have slowed down. As such, the Company will take a judicious approach in managing the Group’s investments portfolio. Despite the tough market environment, the Company continues to revisit its business strategy and composition of improvement have started to emerge, the performance of key economies remains uncertain.its investments portfolio.

The Company’s working capital, calculated as current assets less current liabilities, remained at a similar level in 20142017 and 20132016. Working capital was Rmb460.3Rmb453.9 million as of December 31, 20142017 and was Rmb452.0Rmb483.8 million as of December 31, 2013.2016.

Over the last few years, cash flow for financing the operations of the Company was primarily obtained from the disposal of trading securities. As at December 31, 2014,2017, the Company still held approximately Rmb50.4Rmb26.4 million of marketable securities. In 2014,2017, the Company had net cash provided by operating activities wasof approximately Rmb0.2Rmb2.7 million compared to a net cash used in operating activities of approximately Rmb3.2Rmb0.4 million in 2013.2016. The operating cash outflowsinflows were mainly caused by cash used for general and administrative expense and changes in operating assets and liabilities. The net cash provided by investing activities and used in financing activities in 20142017 was approximately Rmb1.9Rmb8.5 million and Rmb0.3 million, respectively, compared with Rmb8.3approximately Rmb10.2 million provided by investing activities and Rmb70.1 million used in financing activities in 2013.2016. The investing cash inflows were mainly related to proceeds from trading securities in 2014 and advances from related and unrelated parties, investments in and proceeds from trading securities and changesincrease in payables to securities brokers in 2013. The financing cash flows were mainly related to changes in amounts due to related parties.2017.

Other than (i) the settlementacquisition of Convertible Notes receivable40% of Rosedale and accrued interest as described in Item 7the shares of this Form 20-F; (ii) the investment agreementMillion Cube as described in Item 4 of this Form 20-F; and (iii) the disposal of the Company’s interest in Hangzhou Zhongce as described in Item 4 of this Form 20-F, no transactions, arrangements or other relationships with unconsolidated entities or other persons that are reasonably likely to affect materially the liquidity or the availability of or requirement for capital resources of the Company have been entered into during 2014.2017. In management’s opinion, the Company has sufficient cash and cash equivalents, notes receivable and trading securities to support its working capital for its present requirements.

For the years ended December 31, 20132016 and 2014,2017, the Company had no expenditures for property, plant and equipment.

Cash and cash equivalents of the Company increaseddecreased to Rmb453.0Rmb474.0 million at December 31, 20142017 from approximately Rmb440.2Rmb499.9 million at December 31, 2013,2016, of which Rmb449.2Rmb468.3 million (approximately US$72.472.0 million) were U.S. dollar deposits included in cash and cash equivalents.

There are no material restrictions, including foreign exchange controls, on the ability of the Company’s subsidiaries to transfer funds to the Company in the form of cash dividends, loans, advances or product/material purchases. See “Dividend Policy” under Item 8 below for more information.

For related party information, please see “Item 7. Major Shareholders and Related Party Transactions” in this Annual Report. In the opinion of management, these related party transactions have no material effect on the Company’s liquidity or cash flows.

C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

The Company does not conduct any research and development and does not rely on any patents or licenses.

D. TREND INFORMATION

Following the disposal of its entire interest in Hangzhou Zhongce in November 2011 and the acquisition of 40% of the shares of Million Cube in 2015 (please refer to Item 4 for details), the Company continues to position itself as a conglomerate investor in China and anticipates that it will maintain its conservative and cautious investment posture in the coming year and to continue its efforts to explore new investment opportunities.opportunities with the view to magnify shareholders’ value.

E.OFF-BALANCE SHEET ARRANGEMENTS

For the year of 2014,2017, the Company did not have anyoff-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. Additionally, the Company had not undertaken any guarantees as of December 31, 2014.2017.

F. CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

As of December 31, 20132016 and 2014,2017, the Company did not have any contractual obligations and commercial commitments.

A. DIRECTORS AND SENIOR MANAGEMENT

There is no family relationship between any director or executive officer listed above and any other director or executive officer listed above. None of the directors or executive officers werewas elected or appointed pursuant to an arrangement or understanding with any third party.

Biographies of Directors and Senior Management

Dr. Allan Yap, age 60,62, is the chairman, chief executive officer and a director of the Company. He holds an honorary degree of Doctor of Laws and has over 30 years’ experience in finance, investment and banking. Dr. Yap is a substantial shareholder, the chairman and an executive director of HannyMaster Glory Group Limited. He is also the chairman and executive director of Rosedale Hotel Holdings Limited (“Rosedale”), and an alternate director of Television Broadcasts Limited, and an executive director of Meike International Holdings Limited, all of which are publicly listed companies in Hong Kong. He is also the chairman and chief executive officer of Burcon NutraScience Corporation (“Burcon”), a company whose shares are listed on the Toronto Stock Exchange in Canada, NASDAQ Stock Exchange (“Nasdaq”) in the United States and the Frankfurt Stock Exchange in Germany. Burcon has been informed by the Nasdaq on April 25, 2018 of its decision to delist Burcon’s common shares from the Nasdaq Capital Market and the trading of Burcon’s shares was suspended effective from April 27, 2018. Dr. Yap is an executive chairman of Hanwell Holdings Limited (formerly known as PSC Corporation Limited) and Tat Seng Packaging Group Limited, both are publicly listed companies in Singapore. He was also the chairman of MRI Holdings Limited, which had been deregistered on February 28, 2015. Dr. Yap had been an executive chairman of Intraco Limited, a public listed company in Singapore, and resigned on December 6, 2012. HeDr. Yap had also been an executive director of Big Media GroupSee Corporation Limited, (nowan alternate director of Television Broadcasts Limited, the chairman and an executive director of Shaw Brothers Holdings Limited (formerly known as Neo TelemediaMeike International Holdings Limited) and See Corporationthe honorary chairman and anon-executive director of SMI Holdings Group Limited, all are publicly listed companies in Hong Kong, and resigned on July 20, 2009 and June 13, 2011, December 29, 2015, October 25, 2016 and November 28, 2017 respectively. Dr. Yap was appointed as the chairman and chief executive officer of the Company on December 1, 2004.

Ms. Chan Ling, Eva, age 50,52, is a deputy chairman and a director of the Company. She has over 2529 years’ experience in auditing, accounting and finance in both international accounting firms and listed companies. Ms. Chan is a member of the Chartered Accountants in Australia and New Zealand, a fellow member of the Association of Chartered Certified Accountants and also a practicing member of the Hong Kong Institute of Certified Public Accountants. Effective from June 1, 2009, Ms. Chan is the managing director of Rosedale. She was also a director of MRI Holdings Limited. She had been an executive director of China Strategic Holdings Limited, and an independentnon-executive director of each of Well Way Group Limited (formerly known as Trasy Gold Ex Limited) and Wonson International Holdings Limited (now known as China Ocean Shipbuilding Industry GroupGlobal Mastermind Holdings Limited), both are publicly listed companies in Hong Kong, and resigned on June 1, 2014 and June 23, 2014 and August 13, 2008 respectively. Ms. Chan was appointed as deputy chairman of the Company on December 1, 2004.

Ms. Dorothy Law, age 46,48, is a director of the Company. She received her Bachelor of Commerce and Bachelor of Laws degrees from the University of British Columbia in Canada. Ms. Law is a Barrister and Solicitor licensed to practice law in British Columbia and she has also been admitted as a Solicitor of the High Court of Hong Kong(non-practicing). Ms. Law is Senior Vice President, Legal and Corporate Secretary of Burcon NutraScience Corporation. Burcon has been informed by the Nasdaq on April 25, 2018 of its decision to delist Burcon’s common shares from the Nasdaq Capital Market and the trading of Burcon’s shares was suspended effective from April 27, 2018.

Mr. Richard Whittall, age 56,59, is an independent director and the chairman of the audit committee of the Company. He is a partnerthe President of 0979146 BC Ltd, an investment holding company, based in Vancouver, British Columbia. He is also the President of Watershed Capital PartnersHoldings Inc., an investment banking firm, based in Vancouver, British Columbia, Canada. Mr. Whittall has over 23 years’ experience in investment banking, advising domestic and international companies in the areas of fund raising, mergers, acquisitions, divestitures and strategic business alliances. Mr. Whittall currently serves as a director of a number of public and private companies, including Fortress Paper Ltd, GVIC Communications Corp., Canadian General Investments Limited and Canadian World Fund Limited.

Mr. Lien Kait Long, age 67,70, is a director of the Company. Mr. Lien holds a bachelor’s degree in commerce and is a fellow member of the Institute of Singapore Chartered Accountants (ISCA) and CPA Australia. He has extensive experience in finance, corporate management and business investment. He has held a number of senior management positions as well as executive directorships in various public and private corporations in Singapore, Hong Kong and China. Mr. Lien currently serves as an independent director on the board of several Singapore and Chinese Companies listed on the Singapore Exchange Securities Trading Limited. He was also a director of MRI Holdings Limited.

Mr. Sin Chi Fai, age 56,58, is appointed an independent director and an audit committee member of the Company on June 9, 2010. Mr. Sin obtained a diploma in Banking from The Hong Kong Polytechnic (now known as The Hong Kong Polytechnic University). He has over 1719 years’ experience in banking field and has over 17 years’ sales and marketing experience in information technology industries. Mr. Sin currently serves as an independentnon-executive director of Rosedale and Hanny,Master Glory, both are publicly listed companies in Hong Kong. Mr. Sin is also currently a director and shareholder of a Singapore company engaged in the distribution of data storage media and computer-related products throughout Asia. Mr. Sin had been an independent non-executive director, member of the audit committee, and member of the remuneration committee of China Strategic Holdings Limited, and Wonson International Holdings Limited (now known as China Ocean Shipbuilding Industry Group Limited), both publicly listed companies in Hong Kong, and resigned on October 30, 2007 and May 15, 2008 respectively.

Mr. Ken Lau, aged 44,46, was appointed as the Chief Financial Officer of the Company on May 15, 2014. Mr. Lau is a member of CPA Australia and a certificate holder of American Institute of Certified Public Accountants. He has over 15about 20 years of progressive accounting experience in international accountingthrough management roles for a variety of public and financial reporting inprivate multinational corporations.

B. COMPENSATION

For the year ended December 31, 2014,2017, the aggregate amount of compensation paid by the Company and its subsidiaries to the Company’s directors, and executive officers and senior management, for service in all capacities, was approximately Rmb667,990Rmb775,603 (approximately US$107,660)119,208). The grant of bonuses is determined at the discretion of the board of directors. No bonuses were granted or paid in the year 2014 or granted with respect to the year 2014.2017.

The following table summarizes the compensation received by our executive andnon-executive directors and senior management for the year 2014.2017.

No officer or director received anynon-cash compensation in 2014.2017.

C. BOARD PRACTICES

The 20152018 annual general meeting of the Company will be held on December 22, 2015,as soon as practicable, and the shareholders of the Company will be asked tore-elect the directors in the forthcoming annual general meeting of the Company.

No director of the Company has entered into any service contract nor is entitled to any benefits upon termination of employmentservice with the Company.

The audit committee of the board of directors reviews, acts on and reports to the board of directors with respect to various auditing and accounting matters, including the selection of our auditors, the scope of the annual audits, fees to be paid to the auditors, the performance of the auditors and our accounting practices. During the year 20142017 and as of the date of this filing, the audit committee of the Company consisted of Mr. Richard Whittall and Mr. Sin Chi Fai.

D. EMPLOYEES

As of December 31, 2012, 20132015, 2016 and 2014,2017, the Company had no employees.employees other than the senior management identified above.

E. SHARE OWNERSHIP

As of December 31, 2014,2017, none of the Company’s directors, officers or their associates had any personal, family, corporate or other interests in any shares of the Company or any of its associated corporations.

A. MAJOR SHAREHOLDERS

Based on filings on Schedule 13G under the Exchange Act and public announcements/circulars/annual reports of HannyMaster Glory pursuant to the Listing Rules of HKSE, as of December 31, 2014,2017, the following persons beneficially owned shares representing 5% or more of the issued share capital of the Company:

(b) According to Amendment No. 9 to a report on Schedule 13G/A dated February 9, 2015,Neither of the 467,175 shares beneficially owned by William F. Harnisch as of December 31, 2014, representing 5.18% equity interestshareholders listed in the Company, consisting of (A) 79,800 shares beneficially owned individually by Mr. Harnisch; and (B)(i) 218,775 shares beneficially owned by Grenadier Fund; (ii) 116,100 shares beneficially owned by Triumph Fund II L.P.; and (iii) 52,500 shares beneficially owned by Peconic Partners International Fund Ltd., all of which shares Mr. Harnisch may be deemed to beneficially own by virtue of his position as President and Chief Executive Officer of Peconic Partners LLC,table above have different voting rights than the investment adviser to the above-mentioned clients.Company’s shareholders generally.

According to the shareholders list provided to the Company by its transfer agent, there were 5146 shareholders (representing all issued common stock of 9,017,310 shares) of record of the Company’s common stock as of NovemberApril 30, 2015.2018.

B. RELATED PARTY TRANSACTIONS

Convertible Notes

On March 23, 2006, Rosedale entered into a subscription agreement with the Company and other subscribers for convertible notes with an aggregate principal amount of HK$1,000 million, of which the Company agreed to subscribe for HK$300 million. The initial conversion price of the convertible notes was HK$0.79 per share, subject to anti-dilutive adjustments. In July 2008, the conversion price was reduced from HK$0.79 per share to HK$0.339 per share as a result of rights issued by Rosedale. Unless previously converted or lapsed or redeemed by Rosedale, Rosedale will redeem the convertible notes on the fifth anniversary from the date of issue of the convertible notes at a redemption amount equal to 110% of the principal amount of the convertible notes outstanding. The Company has the right to convert the whole or any part (in an amount or integral multiple of HK$1 million) of the principal amount of the convertible notes into shares of Rosedale at the then prevailing conversion price.

Subject to certain restrictions intended to facilitate compliance with relevant rules and regulations, each noteholder has the right to exchange all or part (in the amount or integral multiple of HK$10 million) of 50% of the initial principal amount of its convertible notes for shares of any company that is an affiliated company of Rosedale as defined in the Rules Governing the Listing of Securities on the HKSE or a subsidiary of Rosedale that is to be listed on a stock exchange through an initial public offering at the price, subject to anti-dilutive adjustments, at which the such shares are actually issued to the public at the time of the listing on that stock exchange. The decision on whether to list any of its affiliated company or subsidiary in the future is at the sole discretion of the directors of Rosedale. During 2007, the Company converted a total of HK$237 million of convertible notes of Rosedale into ordinary shares at a conversion price of HK$0.79 per share. The Company did not convert any convertible notes of Rosedale in 2009, 2010 and 2011.

In July 2009, Rosedale made a repurchase offer to all Convertible Notes holders to repurchase the Convertible Notes at their full value by issuing its share at HK$0.035 per share (the “Repurchase Offer I”). Rosedale has to fulfill several conditions before the completion of the offer as stated in the Repurchase Offer I agreement. As of November 11, 2009, the Board of Directors of Rosedale determined Rosedale could not fulfill certain of the conditions and the Repurchase Offer I lapsed automatically.

In December 2009, Rosedale made another repurchase offer to all Convertible Notes holders to repurchase the Convertible Notes at a price equal to 80% of the outstanding principal amount of the Convertible Notes (the “Repurchase Offer II”). The Repurchase Offer II is conditional upon fulfillment of several conditions. The Company accepted the Repurchase Offer II in full. However, Rosedale could not fulfill certain of the conditions and the Repurchase Offer II also lapsed automatically.

In February 2010, Rosedale had completed a capital reorganization which involved, among others, consolidation of every twenty (20) of its then issued shares of HK$0.01 each into 1 issued consolidated share of HK$0.20 each. Consequently, the conversion price of the Convertible Notes was adjusted from HK$0.339 to HK$6.780 with effect from February 1, 2010.

In June 2010, Rosedale announced that it proposed to make a repurchase offer to repurchase the Convertible Notes (the “Repurchase Offer III”). The Company did not accept the Repurchase Offer III.

Pursuant to the instrument constituting the Convertible Notes, the conversion price of the Convertible Notes is to be adjusted from HK$6.780 to HK$6.774 (the “Adjustment”) as a result of the issue and allotment of 111,666,000 shares pursuant to the terms of the Repurchase Offer III. Since the Adjustment when aggregated with the 2009 Adjustment is less than 3% of the prevailing conversion price of HK$6.780, pursuant to the terms and conditions of the Notes, the 2009 Adjustment and the Adjustment will not take effect but shall be carried forward and be taken into account in the next subsequent adjustment.

On June 7, 2011, the maturity date of the Convertible Notes, there were a total of HK$63 million, or approximately US$8 million, of Convertible Notes remaining outstanding. All such Convertible Notes, together with accrued interest of HK$10.8 million, or approximately US$1.4 million, have been subsequently fully settled (see Item 8 below).

Other Related Party Transactions

The Company entered into the following related party transactions:

China Strategic Holdings Limited (“CSH”), a public company listed on the HKSE was the Company’s ultimate parent company before its completion of a group reorganization in May 2006 following which the Company became a wholly-owned subsidiary of Group Dragon Investments Limited (“GDI”), a then equity method affiliate of Master Glory. In June 2006, Master Glory acquired a controlling interest in GDI and became the parent company. On December 8, 2006, Master Glory became a subsidiary of ITC Corporation Limited (“ITC”), a public company listed on HKSE and, as a result, ITC became the ultimate parent company. On May 18, 2007, Master Glory was ceased to be a subsidiary of ITC and became the ultimate parent of the Company until 2008 when Master Glory reduced its equity interest in the Company. Following the completion of the distribution of its Master Glory shares to its shareholders in November 2010, ITC’s interests in Master Glory dropped from 42% to 0.1%. As of December 31, 2017, Master Glory held a 28.95% equity interest in the Company, as disclosed in its annual report 2016-2017.

As of December 31, 20132016 and 2014,2017, the amounts due from/tofrom related parties were unsecured,non-interest bearing and had no fixed repayment terms.

In addition, as of December 31, 2016 and 2017, the Company held a 6.17% equity interest in Rosedale. Dr. Yap serves as chairman of Rosedale, Ms. Chan serves as its managing director and Mr. Sin serves as an independentnon-executive director of Rosedale.

A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

See the Consolidated Financial Statements to the Company included in “Item 17. Financial Statements” of this Annual Report.

Legal Proceedings

The Company is not currently involved in any legal or arbitration proceedings.

Dividend Policy

On July 3, 2001, the board of directors of the Company announced that the Company would suspend the declaration and payment of any quarterly dividend until the profitability of the Company and its subsidiaries reached an acceptable level. During 2012, 20132015, 2016 and 2014,2017, no dividend was declared or paid by the Company. Any future determination to pay a dividend to shareholders of the Company will depend on the Company’s results of operations and financial condition, and other factors deemed relevant by its board of directors.

Since the Company is a holding company, its ability to pay dividends depends substantially on its receipt of distributions from its subsidiaries. Applicable Chinese laws and regulations require that, before a Sino-foreign equity joint venture enterprise (such as each PRC subsidiary) distributes profits to investors, it must: (1) satisfy all tax liabilities; (2) provide for losses in previous years; and (3) make allocations, in proportions determined at the sole discretion of the board of directors, to a general reserve fund and an enterprise expansion fund. During 2012, 20132015, 2016 and 2014,2017, no distribution of dividends was made from any subsidiary to the Company.

B. SIGNIFICANT CHANGES

The Company did not convert any of the Convertible Notes of Rosedale that it held in 2011. On June 7, 2011, the maturity date of the Convertible Notes, there were a total of HK$63 million, or approximately US$8 million, of Convertible Notes remained outstanding. All such Convertible Notes, together with accrued interest of HK$10.8 million, totaled Rmb59.8 million, have been subsequently fully settled (see below).

On June 30, 2011, the Memorandum of Understanding, dated April 15, 2008, between a direct wholly owned subsidiary of the Company and a third party regarding the acquisition of a certain equity interest in a property investment company, lapsed. The deposit of Rmb67.5 million was refunded to the Company (see below).

On November 28, 2011, the Company sold all of its ownership interests in Hangzhou Zhongce Rubber Company Limited to CZ Tire Holdings Limited, an independent third-party company incorporated in the British Virgin Islands, for a purchase price of Rmb600 million or approximately US$95.3 million. The Company is required to pay an income tax of Rmb79.5 million on the disposal of Hangzhou Zhongce. According to the disposal agreement, CZ Tire Holdings Limited bore the difference of the tax payment in excess of Rmb40 million or approximately US$6.4 million.

On September 28, 2012, the Company reported that its wholly owned subsidiary, Wealth Faith Limited had entered into a definitive agreement with Fortuneasy Limited, a third party. The agreement provides for the purchase by Wealth Faith Limited of 40% of the shares of Million Cube Limited from Fortuneasy Limited. The total purchase price for the shares being acquired by Wealth Faith Limited is HK$200 million or approximately US$25.6 million. The Company, through Wealth Faith Limited, previously deposited HK$154.8 million or approximately Rmb127.3 million in earnest money with Fortuneasy Limited, which will be applied toward the purchase price. The deposits are refundable in full and were funded by the settlement of the Convertible Notes of Rosedale and accrued interest that totaled HK$73.8 million, or approximately Rmb59.8 million (see above), and a refund of deposits paid for acquisition of a property investment company of Rmb67.5 million (see above).

As provided in the agreement, effective on May 31, 2012, Million Cube Limited acquired from ITC Properties Group Limited (“ITC Properties”), a company incorporated in Bermuda and listed on The Stock Exchange of Hong Kong Limited (“HKSE”), 45% of the issued share capital and corresponding shareholder loans of Paragon Winner Company Limited, or Paragon. Paragon was incorporated in the British Virgin Islands and formed to invest in a joint venture that has developed and operated the Sanya Sun Valley Golf Resort in Yalong Bay, Sanya City, the People’s Republic of China which is seeking to develop a related hotel and resort complex at such resort. The transaction was completed in March 2015.Not applicable.

ITEM 9.

THE LISTING

Since November 26, 2002, the Company’s common stock has traded on the OTC Pink Marketplace under the stock symbol “CSHEF”. The OTC Pink Marketplace is a regulated quotation service that displays real-time quotes, last sale prices and volume information inover-the-counter equity securities for companies that are registrants with the SEC. Prior to that, the Company’s common stock traded on the New York Stock Exchange, or NYSE, under the symbol “CSH”. However, the trading was suspended on September 27, 2002 by the NYSE for the failure of the Company to meet the NYSE’s continuing listing standards. Effective December 30, 2002, the common stock of the Company was removed from listing on the NYSE.

The following table sets forth, for the periods indicated, the high and low closing sale prices of the common stock as reported by the OTC Pink Marketplace from January 1, 20102013 to December 31, 2014.2017.

The following table sets forth the high and low closing sale prices for the common stock as reported during each of the quarters in thetwo-year period ended December 31, 20142017 and each of the most recent periods.

The following table sets forth the high and low closing sale prices for the common stock as reported during each of the most recent six months.

ITEM 10.

ADDITIONAL INFORMATION

A. SHARE CAPITAL

Not Applicable

B. MEMORANDUM AND ARTICLES OF ASSOCIATION

For a summary of the Company’s Memorandum and Articles of Association, see Item 10 of the Company’s Form20-F for the year ended December 31, 2001, to which specificsummary is incorporated by reference is made.herein.

C. MATERIAL CONTRACTS

NoneSee “Item 4 - Information of the Company - A. History and Development of the Company” for a discussion of the definitive agreement between Wealth Faith and Fortuneasy relating to the acquisition of 40% of the shares of Million Cube.

D. EXCHANGE CONTROLS

Certain Foreign Issuer Considerations

The Company has been designated as anon-resident for exchange control purposes by the Bermuda Monetary Authority, Foreign Exchange Control, whose permission for the issue of shares of common stock of the Company has been obtained. The transfer of shares between persons regarded as resident outside Bermuda for exchange control purposes and the issue of shares to or by such persons may be effected without specific consent under the Exchange Control Act of 1972 and regulations thereunder. Issues and transfers of shares involving any person regarded as resident in Bermuda for exchange control purposes require specific prior approval under the Exchange Control Act of 1972.

There are no limitations on the rights ofnon-Bermuda owners of the Company’s common stock to hold or vote their shares. Because the Company has been designated as anon-resident for Bermuda exchange control purposes, there are no restrictions on its ability to transfer funds in and out of Bermuda or to pay dividends to United States residents who are holders of the Company’s common stock, other than in respect of local Bermuda currency.

In accordance with Bermuda law, share certificates are only issued in the names of corporations or individuals. In the case of an applicant acting in a special capacity (for example, as an executor or trustee), certificates may, at the request of the applicant, record the capacity in which the applicant is acting. Notwithstanding the recording of any such special capacity, the Company is not bound to investigate or incur any responsibility in respect of the proper administration of any such estate or trust. The Company will take no notice of any trust applicable to any of its shares whether or not it had notice of such trust.

As an exempted company, the Company is exempt from Bermuda laws restricting the percentage of share capital that may be held bynon-Bermudan persons, but as an exempted company the Company may not participate in certain business transactions, including: (1) the acquisition or holding of land in Bermuda (except land required for business and held by way of lease or tenancy for terms of not more than 21 years) without the express authorization of the Bermuda legislature; (2) the taking of mortgages on land in Bermuda to secure an amount in excess of US$50,000 without the consent of the Minister of Finance of Bermuda; (3) the acquisition of securities created or issued by, or any interest in, any local company or business, other than certain types of Bermuda government securities or securities of another exempted company, partnership or other corporation resident in Bermuda but incorporated abroad; or (4) the carrying on of business of any kind in Bermuda, except in furtherance of the business of the Company carried on outside Bermuda or under a license granted by the Minister of Finance of Bermuda.

The Bermuda government actively encourages foreign investment in exempted entities like the Company that are based in Bermuda but do not operate in competition with local business. In addition to having no restrictions on the degree of foreign ownership, the Company is subject neither to taxes on its income or dividends nor to any foreign controls in Bermuda. In addition, there is no capital gains tax in Bermuda, and profits can be accumulated by the Company, as required, without limitation.

E. TAXATION

The following discussion is a summary of certain tax consequences of an investment in the Company’s common stock under Bermuda tax laws, British Virgin Islands (“BVI”) tax laws and United States FederalU.S. federal income tax laws. The discussion does not deal with all possible tax consequences relating to an investment in the common stock and does not purport to deal with the tax consequences applicable to all categories of investors, some of which (such as dealers in securities, insurance companies andtax-exempt entities) may be subject to special rules. In particular, the discussion does not address the tax consequences under State,state, local and other laws (e.g.,non-Bermuda, non-United States Federalnon-BVI,non-U.S. federal tax laws). This discussion is based upon laws and relevant interpretations thereof in effect as of the date of this Annual Report, all of which are subject to change.

Bermuda Taxation

The Company is incorporated in Bermuda. Under current Bermuda law, the Company is not subject to tax on income or capital gains, and no Bermuda withholding tax will be imposed upon payments of dividends by the Company to its shareholders. Furthermore, the Company has received from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act of 1966, as amended, an undertaking that, in the event that Bermuda enacts any legislation imposing any tax computed on profits or income, including any dividend or capital gains withholding tax, or computed on any capital assets appreciation thereof, or any tax in the nature of an estate, duty or inheritance tax, the imposition of such tax will not be applicable to the Company or any of its operations, nor to the shares, debentures or other obligations of the Company, until March 28, 2016. This undertaking does not, however, prevent the imposition of property taxes on Company-owned real property or leasehold interests in Bermuda.

The United States does not have a comprehensive income tax treaty with Bermuda.

As an exempted company, the Company is required to pay to the Bermuda government an annual registration fee calculated on a sliding-scale basis by reference to its assessable capital, that is, its authorized capital plus any share premium.

British Virgin Islands (“BVI”)BVI Taxation

The Company has certain of its subsidiaries incorporated under the laws of the BVI. Pursuant to the rules and regulations of the BVI, these subsidiaries are not subject to any income tax in the BVI.

Under the International Business Companies Act of the BVI, as currently in effect, a holder of common stock who is not a resident of BVI is exempt from BVI income tax on dividends paid with respect to the common stock and all holders of common stock are not liable for BVI income tax on gains realized during that year on sale or disposal of such shares; BVI does not impose a withholding tax on dividends paid by a company incorporated under the International Business Companies Act.

There are no capital gains, gift or inheritance taxes levied by the BVI on companies incorporated under the International Business Companies Act. In addition, the common stock is not subject to transfer taxes, stamp duties or similar charges.

There is no income tax treaty or convention currently in effect between the United States and the BVI.

Certain Material United StatesU.S. Federal Income Tax Consequences

Taxation of Shareholders

The following is a summary of certain material U.S. federal income tax consequences to U.S. holders (as defined below) relating to the purchase, ownership, and disposition of the Company’s common stock. This discussion is based upon current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations promulgated thereunder, rulings, pronouncements, judicial decisions, and administrative interpretations of the Internal Revenue Service (the “IRS”), in each case as in effect and publicly available on the date hereof, all of which are subject to change and differing interpretation, possibly on a retroactive basis, at any time by legislative, judicial, or administrative action. We cannot assure you that the IRS will not challenge the conclusions stated below or that a court will not find in the IRS’s favor. No legal opinion from U.S. counsel or ruling from the IRS has been (or will be) sought on any of the matters discussed herein. The discussion set forth below is limited to U.S. holders who hold the Company’s common stock as a capital asset within the meaning of Section 1221 of the Code.

The following discussion does not purport to be a complete analysis of all the potential U.S. federal income tax effects relating to the purchase, ownership, and disposition of the Company’s common stock. Without limiting the generality of the foregoing, this discussion does not address the effect of any rules applicable to U.S. holders that are subject to special treatment under the U.S. federal income tax laws, including, without limitation: traders and dealers in securities or currencies; insurance companies; financial institutions, banks, and thrifts; regulated investment companies, real estate investment trusts, controlled foreign corporations, passive foreign investment companies, and holders of interests in such entities;tax-exempt entities; U.S. persons whose functional currency is not the U.S. dollar; U.S. expatriates; persons who hold the Company’s common stock as part of a straddle, hedge, conversion transaction, or other risk reduction or integrated investment transaction; persons subject to the alternative minimum tax; holders of securities that elect to use amark-to-market method of accounting for their securities holdings; individual retirement accounts, qualified pension plans, other retirement plans, andtax-deferred accounts; and pass-through entities, including partnerships and Subchapter S corporations, and beneficial owners of interests in such passthroughpass-through entities. Finally, this discussion does not address the effect of any: U.S. state or local tax laws, U.S. federal tax laws other than U.S. federal income tax laws, or foreign tax laws.

The following discussion of certain material U.S. federal income tax considerations is for general information only. It is not tax advice. Each prospective investor should consult its own tax advisor regarding the particular U.S. federal, state, local and foreign tax consequences of purchasing, holding, and disposing of the Company’s common stock, including the consequences of any proposed change in applicable laws.

U.S. Holder

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of the Company’s common stock that is for U.S. federal income tax purposes:

Passive Foreign Investment Company (“PFIC”)

The Company generally will be a PFIC if, for a taxable year, (a) 75% or more of the gross income of the Company for such taxable year is passive income or (b) 50% or more of the assets held by the Company either produce passive income or are held for the production of passive income. “Gross income” generally includes all sales revenues less the cost of goods sold, plus income from investments and from incidental or outside operations or sources. “Passive income” includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.

For purposes of the PFIC income and asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another foreign corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other foreign corporation and (b) received directly a proportionate share of the income of such other foreign corporation. If the Company is a PFIC, in addition to the rules discussed below, U.S. Holders generally may be required to file certain information returns with the IRS. The PFIC rules are extremely complex, and U.S. Holders should consult their own U.S. tax advisors concerning the application of the PFIC rules.

The Company believes it was classified as a PFIC during the tax year ended December 31, 2014,2017, and based on current business plans and financial expectations, the Company believes that it may be a PFIC in subsequent tax years. The determination of whether any foreign corporation was, or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether any corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such year and, as a result, cannot be predicted with certainty as of the date of this document.

In any year in which the Company is classified as a PFIC, a U.S. Holders areholder will be required to file an annual report with the IRS containing such information as Treasury Regulations and/or otherand IRS guidance may require.

Default PFIC Rules Under Section 1291 of the Code

If the Company is a PFIC, the U.S. federal income tax consequences to a U.S. holder of the acquisition, ownership, and disposition of the Company’s common stock will depend on whether such U.S. holder makes an election to treat the Company as a “qualified electing fund” under Section 1295 of the Code (a “QEF Election”), A U.S. holder that does not make a QEF Election will be referred to in this summary as a “Non-Electing“Non-Electing U.S. holder.”

ANon-Electing U.S. holder will be subject to the rules of Section 1291 of the Code with respect to any gain on the disposition of the Company’s common stock and any “excess” distribution paid on the Company’s common stock.

Under Section 1291 of the Code, any gain recognized on the sale or other disposition of the Company’s common stock, and any excess distribution paid on such common stock, must be ratably allocated to each day in aNon-Electing U.S. holder’s holding period for such common stock. The amount of any such gain or excess distribution allocated to prior years of suchNon-Electing U.S. holder’s holding period will be subject to U.S. federal income tax at the highest tax applicable to ordinary income in each such prior year. ANon-Electing U.S. holder will be required to pay interest on the resulting tax liability for each such prior year, calculated as if such tax liability had been due in each such prior year. The amount of any such gain or excess distribution allocated to the current year of suchNon-Electing U.S. holder’s holding period for the Company’s common stock will be treated as ordinary income in the current year (but will not qualify for the preferential dividend rate previously discussed), and no interest charge will be incurred with respect to the resulting tax liability for the current year.

If the Company is a PFIC for any taxable year during which aNon-Electing U.S. holder holds the Company’s common stock, the Company will continue to be treated as a PFIC with respect to suchNon-Electing U.S. holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent years. ANon-Electing U.S. holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if such common stock were sold on the last day of the last taxable year for which the Company was a PFIC.

QEF Election

A U.S. holder that makes a QEF Election generally will not be subject to the rules of Section 1291 of the Code discussed above. However, a U.S. holder that makes a QEF Election will be subject to U.S. federal income tax annually on such U.S. holder’s pro rata share of (a) “net capital gain” of the Company, which will be taxed as capital gain to such U.S. holder, and (b) the “ordinary earnings” of the Company, which will be taxed as ordinary income to such U.S. holder, regardless of whether such amounts are actually distributed to such U.S. holder by the Company. A U.S. holder that makes a QEF Election may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge. In addition, a U.S. holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of the Company’s common stock, as long as the U.S. holder always had a QEF election in effect.

Each U.S. holder should consult its own U.S. tax advisors regarding the advisability of, and procedure for making, a QEF Election. However, U.S. holders should be aware that the Company did not satisfy record keeping requirements that apply to a qualified electing fund for its tax year ended December 31, 20142017 and there can be no assurance that the Company will in future satisfy record keeping requirements that apply to a qualified electing fund, or that the Company will supply U.S. holders with information that such U.S. shareholders require to report under the QEF Election rules, in the event that the Company is a PFIC and a U.S. shareholder wishes to make a QEF Election. Thus, U.S. holders may not be able to make a QEF Election with respect to the Company’s common stock.

Distributions on the Company’s Common Stock

Generally, and subject to the discussion above concerning PFICs, a U.S. holder that receives a distribution, including a constructive distribution, with respect to the Company’s common stock will be required to include the amount of such distribution in gross income as a dividend (without reduction for any foreign income tax withheld from such distribution) to the extent of the current or accumulated “earnings and profits” of the Company (as determined under U.S. tax principles). To the extent that a distribution exceeds the current and accumulated “earnings and profits” of the Company, such distribution will be treated (a) first, as atax-free return of capital to the extent of a U.S. holder’s tax basis in the Company’s common stock and, (b) thereafter, as gain from the sale or exchange of such common stock. (See more detailed discussion at “Disposition of the Company’s Common Stock” below.) However, the Company may not maintain the calculations of earnings and profits in accordance with U.S. federal income tax principles, and each U.S. holder should therefore assume that any distribution by the Company with respect to the Company’s common stock will constitute ordinary dividend income. Dividends received on the Company’s common stock generally will not be eligible for the “dividends received deduction” or eligible for the preferential tax rates applicable to long-term capital gains for dividends received by individuals.

Disposition of the Company’s Common Stock

Subject to the discussion of the PFIC rules, above, a U.S. holder will recognize gain or loss on the sale or other taxable disposition of the Company’s common stock in an amount equal to the difference, if any, between (a) the amount of cash plus the fair market value of any property received and (b) such U.S. holder’s adjusted basis in the Company’s common stock sold or otherwise disposed of. Any such gain or loss generally will be capital gain or loss, which will be long-term capital gain or loss if the Company’s common stock is held for more than one year.

Although preferential tax rates currently apply to long-term capital gains of a U.S. holder that is an individual, estate, or trust, such preferential tax rates are not available if the Company is a PFIC, unless a “qualified electing fund” (“QEF”) election is timely made, as described above. Deductions for capital losses and net capital losses are subject to limitations.

Foreign Tax Credit

A U.S. holder who pays (whether directly or through withholding) foreign income tax with respect to the Company’s common stock may be entitled, at the election of such U.S. holder, to receive either a deduction or a credit for such foreign income tax paid. This election is made on ayear-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. holder during such year.

The foreign tax credit is subject to complex limitations, including the general limitation that the credit cannot exceed the proportionate share of a U.S. holder’s U.S. federal income tax liability that such U.S. holder’s “foreign source” taxable income bears to such U.S. holder’s worldwide taxable income. Generally, dividends paid by a foreign corporation should be treated as foreign source for this purpose, and gains recognized on the sale of stock of a foreign corporation by a U.S. holder generally should be treated as U.S. source for this purpose.

Receipt of Foreign Currency

The amount of any distribution paid to a U.S. holder in foreign currency, or on the sale, exchange or other taxable disposition of the Company’s common stock, generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time). A U.S. holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any U.S. holder who converts or otherwise disposes of the foreign currency after the date of receipt may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes.

Unearned Medicare Income Tax

For tax years beginning after December 31, 2014, certainCertain individuals, estates and trusts whose income exceeds certain thresholds will be required to pay a 3.8% Medicare surtax on “net investment income” including, among other things, dividends and net gain from dispositions of property other than property held in a trade or business.

Legislative Uncertainty

A number of items of legislation have been proposed or are expected to soon be proposed that could significantly alter certain of the U.S. federal income tax consequences of an investment in the Company. It is uncertain whether any such proposed legislation (or other legislation that would impact the Company or a U.S. holder) will be enacted. Prospective investors should consult their own tax advisors regarding proposed legislation.

Information Reporting; Backup Withholding Tax

The Foreign Account Tax Compliance Act (“FATCA”) generally requires that individuals that hold certain specified foreign financial assets worth in excess of certain thresholds of US $50,000 or more, depending on the individual’s circumstances, report such ownership to the IRS using IRS Form 8938. The definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by anon-U.S. person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person and any interest in a foreign entity. A U.S. holdersholder may be subject to thesethis reporting requirementsrequirement unless theirsuch holder’s Company common stock is held in an account at a domestic financial institution. PenaltiesThe penalty for failurefailing to file certain of these information returns areForm 8938 is substantial.

Payments of dividends made on, and proceeds arising from certain sales or other taxable dispositions of, the Company’s common stock generally will be subject to information reporting and backup withholding tax, at the rate of 28%, if a U.S. holder (a) fails to furnish such U.S. holder’s U.S. taxpayer identification number (generally on FormW-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. holder that it is subject to backup withholding tax. U.S. holders that are corporations generally are excluded from these information reporting and backup withholding tax rules. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. holder furnishes required information to the IRS.

F. DIVIDENDS AND PAYING AGENTS

Not applicable.

G. STATEMENTS BY EXPERTS

Not applicable.

H. DOCUMENTS ON DISPLAY

The Company is subject to certain of the information reporting requirements of the Exchange Act. The Company, as a “foreign private issuer,” is exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and the officers, directors and principal shareholders of the Company are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act, with respect to their purchase and sale of the Company’s shares. In addition, the Company is not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, the Company does file with the SEC an Annual Report on Form20-F containing consolidated financial statements audited by an independent accounting firm.

Documents concerning us that are referred to herein may be inspected at the Company’s offices at 25th Floor, Paul Y. Centre, 51 Hung ToUnit 703, 7/F, 1063 King’s Road, Kwun Tong, Kowloon,Quarry Bay, Hong Kong. You may read and copy any document that the Company files with the SEC at its public reference facilities at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. The SEC also maintains a web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of this web site is http://www.sec.gov. Please call the SEC at1-800-SEC-0330 for further information on the operation of the public reference facilities.

The Company is exposed to fluctuations in interest rates and currency exchange rates primarily with respect to any borrowings it may make and to our operating results. Under its current policies, the Company does not use interest rate derivative instruments to manage exposure to interest rate changes.

Equity Price Risk

The Company’s investments in equity securities expose it to changes in equity prices. The table below sets forth the Company’s exposure to equity securities as of December 31, 2016 and 2017.

Trading securities refer to equity securities that are bought and held principally for the purpose of selling them in the near term, and are reported at fair value, with unrealized gains and losses included in earnings. The fair value of the Company’s investments in trading securities is based on the quoted market price on the last business day of the fiscal year.

Available-for-sale securities consist of quoted equity securities that are not designated as trading securities. They are held at fair value with unrealized gains and losses, net of tax, reported in accumulated other comprehensive gain or losses. Any unrealized losses that are deemed other-than-temporary are included in current period earnings and removed from accumulated other comprehensive gain or losses.

Realized gains and losses on investment securities are included in current period earnings. For purposes of computing realized gains and losses, the cost basis of each investment sold is generally based on the average cost method.

The Company regularly evaluates whether the decline in fair value ofavailable-for-sale securities is other-than-temporary and objective evidence of impairment could include:

No such other-than-temporary decline in fair value was recognized during the years ended December 31, 2016 and 2017.

Exchange Rate InformationRisk

The Consolidated Financial Statements are prepared in Rmb.Renminbi. The financial statements of foreign subsidiaries are translated into Renminbi in accordance with ASC Topic 830, Foreign Currency Matters.

The Hong Kong dollar is tied to and allowed to fluctuate within a narrow range against the value of the U.S. dollar. Historically, there has been no material fluctuation in the exchange rate between the Renminbi and the U.S. dollar and restrictions were set on the flow of Renminbi between the PRC and the United States. Starting on July 21, 2005, the PRC shifted to a managed floating exchange rate regime based on market supply and demand with reference to a basket of other currencies. The Renminbi is no longer pegged to the U.S. dollar.

Fluctuations in the value of foreign currencies cause U.S. dollar translated amounts to change in comparison with previous periods. However, the fluctuation in exchange rates did not have material effect on the financial position of the Company in the past three years.

Foreign Currency Risk

As our major assets and liabilities are comprised of a mixture of items denominated in Renminbi, U.S. dollars and Hong Kong dollars, our business and operating results may be materially affected in the event of a severe increase or decrease in the value of Renminbi against other currencies. If Renminbi appreciates against U.S. dollars/Hong Kong dollars, our operating expenses and net income may be affected depending upon the then composition of our assets and liabilities.

Historically, both Hong Kong dollars and Renminbi were pegged to U.S. dollars. As a result, the exchange rate of U.S. dollars/Hong Kong dollars to Renminbi fluctuated within a narrow range. However, on July 21, 2005, the PBOC adjusted the exchange rate of U.S. dollars to Renminbi from 1:8.27 to 1:8.11, resulting in an approximately 2% appreciation in the value of Renminbi against U.S. dollars. As Hong Kong dollars are pegged to U.S. dollars, such adjustment has effectively resulted in an approximately 2% appreciation in the value of Renminbi against the Hong Kong dollar.

On June 19, 2010, the PBOC released a statement indicating that it would “proceed further with reform of the Renminbi exchange rate regime and increase the Renminbi exchange rate flexibility.” There remains significant international pressure on the PRC government to adopt a substantial liberalization of its currency policy, which could result in a further and more significant appreciation in the Renminbi’s value against the U.S. dollars. On March 17, 2014, the PBOC announced that the Renminbi exchange rate flexibility increased to 2% in order to proceed further with reform of the Renminbi exchange rate regime. These could result in a further and more significant floatation in the Renminbi’s value against the U.S. dollars.

On August 11, 2015, the PBOC has cut the RMB’sRenminbi’s reference rate by 1.9 percent, sparking the sharpest fall in the currency since the dollar peg ended a decade ago.in 2005. The move by the PBOC comes amid growing signs of a deepening slowdown in the mainland economy. The PBOC said that the reference rate move was aone-time adjustment, and it will strengthen the market’s role in the fixing of the rate and promote the convergence of the onshore and offshore rates.

Through 2016 the Renminbi continued its significant depreciation. This depreciation halted in 2017, and the Renminbi appreciated against the U.S. dollar during thisone-year period. The PBOC also said itexchange rate of the Renminbi against U.S. Dollar as of December 31, 2017 and 2016 were 6.5063 and 6.9430.With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system and there is no guarantee that the Renminbi will keepnot appreciate or depreciate significantly in value against the currency stable at a reasonable level.U.S. dollar in the future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future.

For more details, see “RISK FACTORS — FLUCTUATIONS IN THE VALUE OF THE RENMINBI COULD NEGATIVELY IMPACT OUR RESULTS OF OPERATIONS”.

As of December 31, 2014,2017, the Company had no open forward contracts or option contracts. The Company’s cash and cash equivalents as of December 31, 20142017 was Rmb453.0Rmb474.0 million of which approximately Rmb449.2Rmb468.3 million equivalents (approximately US$72.472.0 million) were held in U.S. dollar deposits.

Interest Rate FluctuationsRisk

The Company’s interest income is sensitive to changechanges in interest rates. However, the amount of interest income has been immaterial to the Company.

The Company did not have any short-term or long-term debt which bore a floating interest rate as of December 31, 20132016 or 2014.2017.

The Company will be exposed to interest rate fluctuations on its cash on hand and any new borrowings under any new loan facility and any change in interest rate could affect its results of operations and cash flows.

Credit Risk

As of December 31, 2016 and 2017, approximately 99.9% and 98.8%, respectively, of the Company’s cash is maintained with one bank within Taiwan. To protect the interest of depositors, Taiwan introduced deposit insurance which provides maximum compensation of NT$3 million ( approximately Rmb657,000 ) per depositor if a bank becomes bankrupt. The Company has not experienced any losses due to the bank failure and monitors the soundness and the credit ratings of the bank on a periodic basis. Thus, the Company believes it is currently not exposed to any material risks on its bank deposits with the bank.

Not applicable.

PART II

There has been no material default in the payment of principal or interest or other material default requiring disclosure pursuant to this item. There have been no arrears in the payment of dividends or other material delinquency requiring disclosure pursuant to this item.

There has been no material modification to the rights of security holders required to be disclosed pursuant to this item.

Evaluation of Disclosure Controls and Procedures

Management of the Company, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Exchange ActRule 13a-15(e) and15d-15(e), as of the end of the period covered by this Annual Report on Form20-F. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of December 31, 2014,2017, the Company’s disclosure controls and procedures are ineffectiveeffective as they are not sufficient to ensure that the information that the Company is required to disclose in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange CommissionSEC rules and forms. The Company is developingdevelops a set of procedures and controls that will allow it to meet such time periods specified in the Securities and Exchange CommissionSEC rules and forms and to ensure that information required to be disclosed by it in its reports is accumulated and communicated to its management, including the Issuer’sCompany’s principal executive and principal financial officers, to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

The directors and management of the Company are responsible for establishing and maintaining adequate internal control over our financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance, but not absolute assurance, regarding the reliability of financial reporting and the preparation of its published financial statements. Internal control over financial reporting includes policies and procedures that:

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurances, but not absolute assurances, with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may decline.

Our management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 20142017 based on the criteria established in the updated framework in the Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 1992 and updated in May 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. Based on the assessment, management has concluded that our internal control over financial reporting was ineffectiveeffective as of December 31, 2014. In making its assessment, management identified a material weakness, similar to prior years, concerning the Company’s internal accounting staff’s lack of understanding of complex accounting issues related to U.S. generally accepted accounting principles (“GAAP”), including accounting for income taxes. In response, external consultants were engaged to perform a number of tasks to prepare specific accounting analysis and necessary corrections were made prior to any public announcements or filings with the SEC. Additionally, as part of its ongoing efforts to address the potential weakness described above, the Company will continue retaining external consultants who have sufficient and appropriate technical skills to help the Company identify and resolve accounting and reporting issues.2017. This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting pursuant to the rules of the Securities and Exchange CommissionSEC that permit the Company to provide only management’s report in this Annual Report on Form20-F.

Except as mentioned above, thereThere have been no changes in the Company’s internal control over financial reporting during the period covered by this Annual Report on Form20-F that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

As the Company’s common stock is not currently listed on a U.S. national securities exchange, the Company is not obligated to have an audit committee of the board of directors. The Company has, however, had an Audit Committee for many years and continues to do so. As of December 31, 2014,2017, the Company’s Board of Directors has determined that the two members of the Audit Committee, Mr. Richard Whittall and Mr. Sin Chi Fai, do not qualify as “audit committee financial experts” as defined by Item 401(h) ofRegulation S-K adopted pursuant to the Exchange Act. The Company is currently in the process of seeking a qualified financial expert for the audit committee.

The Company has adopted a Code of Ethics for the Chief Executive and Senior Financial Officers, which applies to the Company’s principal executive officer and to its principal financial and accounting officers. A copy of the Code of Ethics is attachedfiled as Exhibit 14.1 to this Annual Report on Form20-F.

The following table presents the aggregate fees for services rendered by our principal external auditors, for the periodsyears indicated below:

Audit fees means the aggregate fees in each of the fiscal years listed for professional services rendered by our principal auditors for the audit of our annual consolidated financial statements or services that are normally provided by the auditors in connection with statutory and regulatory filings or engagements. Services comprising the fees disclosed under this category also involve principally limited reviews performed on our consolidated financial statements and the audits of the annual financial statements of our subsidiaries and affiliated companies.

Audit-related fees means the aggregate fees in each of the fiscal years listed for assurance and related services by our principal auditors that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit fees”.

The Audit Committee members are responsible for the review of the quality and performance of external auditors. The Audit Committee has adopted a policy regardingpre-approval of audit and permissiblenon-audit services provided by our independent auditors. Under the policy, the Audit Committeepre-approves all auditing services. The engagement of Crowe Horwath (HK)Centurion ZD CPA Limited as independent registered public accounting firm has been approved by the Audit Committee. If the Audit Committee approves an audit service within the scope of the engagement of the audit service, such audit service is deemed to have beenpre-approved.

As the Company’s common stock is not listed on a U.S. national securities exchange, the information called for by Part II, Item 16D of the Form20-F is not applicable.

The Company has not made any repurchases of its equity securities during the period covered by this report.

There were no changes to our certifying accountants for the year ended December 31, 2017.

Not applicable.

Not applicable.

PART III

See the Index to the Consolidated Financial Statements accompanying this report beginning pageF-1.

Not applicable.

CHINA ENTERPRISES LIMITED

Report of Independent Registered Public Accounting Firm

and Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

CHINA ENTERPRISES LIMITED

F - 1

Report of Independent Registered Public Accounting Firm

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF

CHINA ENTERPRISES LIMITED

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of China Enterprises Limited (“Company”) and subsidiaries as of December 31, 20142017 and 2013,2016, and the related consolidated statements of operations and comprehensive income shareholders’(loss), changes in stockholders’ equity and cash flows for each of the three years in the three-year period ended December 31, 2014. 2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on thesethe Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the auditsaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of the Company’sits internal control over financial reporting. OurAs part of our audits, included considerationwe are required to obtain an understanding of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements. An auditOur audits also includes assessingincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audits provide a reasonable basis for our opinion.

In our opinion,/s/ Centurion ZD CPA Limited

Centurion ZD CPA Limited

We have served as the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and subsidiaries as of December 31, 2014 and 2013 and the consolidated results of their operations and cash flows for each of the years in the three-year period ended December 31, 2014 in conformity with U.S. generally accepted accounting principles.

Our audits also included the translation of Renminbi (RMB) amounts into United States dollar (US$) amounts and, in our opinion, such translation, where provided, has been made in conformity with the basis stated in Note 2(g) to the consolidated financial statements. Such United States dollar amounts are presented for the convenience of the readers.

/s/ Crowe Horwath (HK) CPA LimitedCompany’s auditor since 2016.

Hong Kong, China

November 6, 2015May 15, 2018

F - 2

CHINA ENTERPRISES LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amounts in thousands, except number of shares and per share data)

See accompanying notes to consolidated financial statements.

F - 3

CHINA ENTERPRISES LIMITED

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except number of shares and their par values)