3SBio Inc. - AGM Information 2022

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about this circular or as to the action to be taken, you should consult your stockbroker, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in 3SBio Inc. , you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 1530)

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, RE-ELECTION OF DIRECTORS, DECLARATION OF FINAL DIVIDEND,

PROPOSED AMENDMENTS TO THE MEMORANDUM AND ARTICLES OF ASSOCIATION AND THE ADOPTION OF THE SECOND AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF ASSOCIATION

AND NOTICE OF ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting of 3SBio Inc. to be held at No. 3 A1, Road 10, Shenyang Economy and Technology Development Zone, Shenyang, People’s Republic of China on 22 June 2022 at 10:00 a.m. is set out on pages 87 to 92 of this circular. A form of proxy for use at the Annual General Meeting is also enclosed. Such form of proxy is also published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.3sbio.com). Whether or not you are able to attend the Annual General Meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the Hong Kong share registrar of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the Annual General Meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude Shareholders from attending and voting in person at the Annual General Meeting (or any adjournment thereof) if they so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked. The Company strongly recommends you closely monitor the development of the situation with the novel coronavirus pneumonia (COVID-19) pandemic and to assess, based on the social distancing policies, the necessity for attending the Annual General Meeting in person.

20 May 2022

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
LETTER FROM THE BOARD
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
General Mandate to Issue Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Repurchase Mandate to Repurchase Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Proposed Declaration of Final Dividend and Closure of Register of Members. . . . . . . . . . . . . . . 5
Proposed Amendments to the Memorandum and Articles of Association
and the Adoption of the Second Amended and Restated Memorandum
and Articles of Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Notice of Annual General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Form of Proxy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Voting by Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Precautionary Measures for the Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Recommendation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
APPENDIX I — DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION. . . . . . . . . . 9
APPENDIX II — EXPLANATORY STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
APPENDIX III — COMPARATIVE TABLE OF THE AMENDMENTS TO THE
MEMORANDUM AND ARTICLES OF ASSOCIATION. . . . . . . . . . . . . . 15
NOTICE OF ANNUAL GENERAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

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DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:

“Annual General Meeting” the annual general meeting of the Company to be held at No. 3 A1, Road 10, Shenyang Economy and Technology Development Zone, Shenyang, People’s Republic of China on 22 June 2022 at 10:00 a.m. (or any adjournment thereof) and notice of which is set out on pages 87 to 92 of this circular
“Articles of Association” the amended and restated articles of association of the Company adopted on 23 May 2015 and effective on 11 June 2015
“Board” the board of Directors
“CITIC PE” has the meaning ascribed to it under Appendix I to this circular
“Company” 3SBio Inc. (三生製藥), an exempted company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the main board of the Stock Exchange
“Companies Act” the Companies Act, Cap. 22 (Act 3 of 1961, as consolidated and revised) of the Cayman Islands
“CS Sunshine” CS Sunshine Investment Limited, a business company incorporated in the British Virgin Islands and a substantial shareholder (as defined in the Listing Rules) of the Company
“Director(s)” the director(s) of the Company
“General Mandate” a general mandate proposed to be granted to the Directors at the Annual General Meeting to allot, issue and/or deal with Shares not exceeding 20% of the number of issued Shares as at the date of passing of the relevant resolution granting the General Mandate
“Group” the Company and its subsidiaries
“HK$” Hong Kong dollar, the lawful currency of Hong Kong
“Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China
“Latest Practicable Date” 13 May 2022, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange, as amended from time to time

“Memorandum and Articles of Memorandum of Association and Articles of Association Association”

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DEFINITIONS

“Memorandum of Association”

the amended and restated memorandum of association of the Company adopted on 23 May 2015 and effective on 11 June 2015

“Proposed Amendments”
the proposed amendments to the existing Memorandum and Articles of Association as set out in Appendix III to this circular

“Repurchase Mandate”

a general mandate proposed to be granted to the Directors at the Annual General Meeting to repurchase Shares not exceeding 10% of the number of the issued Shares as at the date of passing of the relevant resolution granting the Repurchase Mandate
“Second Amended and Restated Memorandum and Articles of Association”
the second amended and restated memorandum and articles of association of the Company incorporating all the Proposed Amendments proposed to be adopted by way of a special resolution at the Annual General Meeting
“Securities and Futures Ordinance” Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong, as amended from time to time
“Share(s)”
ordinary share(s) of nominal value of US$0.00001 each in the capital of the Company
“Shareholder(s)”

the holder(s) of the Share(s)

“Single Largest Shareholder’s Group”
refers to, collectively, Dr. LOU Jing (as the single largest shareholder of the Company), Ms. SU Dongmei, Mr. HUANG Bin, and certain trusts established by some of them as settlors, and their respective controlled corporations, including Lambda International Limited, Century Sunshine Limited, Decade Sunshine Limited, Hero Grand Management Limited, Honor Success Holdings Limited, Triple Talent Enterprises Limited, Joint Palace Group Limited, Known Virtue International Limited, Universal Vintage Limited, Medical Recovery Limited and a relevant former director who form a group of substantial shareholders (as defined in the Listing Rules)
“Stock Exchange”

The Stock Exchange of Hong Kong Limited

“Sunshine Guojian”
Sunshine Guojian Pharmaceutical (Shanghai) Co., Ltd. (三生國健藥業 (上海) 股份有限公司) (formerly known as Shanghai CP Guojian Pharmaceutical Co., Ltd. (上海中信國健藥業股份有限公司))
“Takeovers Code” the Code on Takeovers and Mergers and Share Buy-backs issued by the Securities and Futures Commission of Hong Kong, as amended from time to time
“US$”
United States dollars, the lawful currency of the United States
“%”
per cent

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LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1530)

Registered office (in the Cayman Islands): Cricket Square, Hutchins Drive PO Box 2681 Grand Cayman, KY1-1111 Cayman Islands

Executive Directors: Dr. LOU Jing (Chairman) Ms. SU Dongmei

Non-executive Directors: Mr. HUANG Bin Mr. TANG Ke

Mr. TANG Ke Head Office: No. 3 A1, Road 10 Independent non-executive Directors: Shenyang Economy and Technology Mr. PU Tianruo Development Zone Ms. YANG, Hoi Ti Heidi Shenyang Mr. NG, Joo Yeow Gerry People’s Republic of China Principal place of business in Hong Kong: 5/F, Manulife Place 348 Kwun Tong Road Kowloon Hong Kong

20 May 2022

To the Shareholders

Dear Sir or Madam,

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, RE-ELECTION OF DIRECTORS, DECLARATION OF FINAL DIVIDEND,

PROPOSED AMENDMENTS TO THE MEMORANDUM AND ARTICLES OF ASSOCIATION AND THE ADOPTION OF THE SECOND AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF ASSOCIATION AND

NOTICE OF ANNUAL GENERAL MEETING

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LETTER FROM THE BOARD

INTRODUCTION

The purpose of this circular is to give you notice of the Annual General Meeting and the following proposals to be put forward at the Annual General Meeting: (a) granting of the General Mandate to issue Shares; (b) granting of the Repurchase Mandate to repurchase Shares; (c) the re-election of Directors; (d) the proposed declaration of final dividend for the year ended 31 December 2021; and (e) the Proposed Amendments and the adoption of the Second Amended and Restated Memorandum and Articles of Association.

GENERAL MANDATE TO ISSUE SHARES

In order to ensure flexibility and give discretion to the Directors, in the event that it becomes desirable for the Company to issue any new Shares, approval is to be sought from the Shareholders, pursuant to the Listing Rules, for the General Mandate to issue Shares. At the Annual General Meeting, an ordinary resolution numbered 5(A) will be proposed to grant the General Mandate to the Directors to exercise the powers of the Company to allot, issue and deal with additional Shares not exceeding 20% of the number of issued Shares as at the date of passing of the resolution in relation to the General Mandate.

As at the Latest Practicable Date, 2,438,845,412 Shares had been issued and are fully paid. Subject to the passing of the ordinary resolution numbered 5(A) and on the basis that no further Shares are issued or repurchased after the Latest Practicable Date and up to the date of the Annual General Meeting, the Company will be allowed to issue a maximum of 487,769,082 Shares.

In addition, subject to separate approval of the ordinary resolution numbered 5(C), the number of Shares purchased by the Company under ordinary resolution numbered 5(B) will also be added to extend the General Mandate as mentioned in ordinary resolution numbered 5(A) provided that such additional number of Shares shall represent up to 10% of the number of issued Shares as at the date of passing of the resolutions in relation to the General Mandate and the Repurchase Mandate.

The Directors confirmed that, as at the Latest Practicable Date, they had no immediate plans to exercise the General Mandate.

REPURCHASE MANDATE TO REPURCHASE SHARES

In addition, an ordinary resolution will be proposed at the Annual General Meeting to approve the granting of the Repurchase Mandate to the Directors to exercise the powers of the Company to repurchase Shares representing up to 10% of the number of issued Shares as at the date of passing of the resolution in relation to the Repurchase Mandate.

An explanatory statement required by the Listing Rules to be sent to the Shareholders in connection with the proposed Repurchase Mandate is set out in Appendix II to this circular. This explanatory statement contains all information reasonably necessary to enable the Shareholders to make an informed decision on whether to vote for or against the relevant resolution at the Annual General Meeting.

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LETTER FROM THE BOARD

RE-ELECTION OF DIRECTORS

In accordance with article 84(1) of the Articles of Association, one-third of the Directors for the time being (or if their number is not a multiple of three, the number nearest to but not less than one-third) will retire from office by rotation and will be eligible for re-election and re-appointment at every annual general meeting, provided that every Director shall be subject to retirement by rotation at least once every three years. Accordingly, Ms. SU Dongmei and Mr. HUANG Bin shall retire by rotation as Directors at the Annual General Meeting. All retiring Directors, being eligible, will offer themselves for re-election at the Annual General Meeting.

In accordance with article 83(3) of the Articles of Association, any Director appointed by the Board either to fill a casual vacancy or as an addition to the Board will hold office until the first general meeting or the next following annual general meeting of the Company after his/her appointment. Accordingly, Mr. NG, Joo Yeow Gerry, who was appointed by the Board, will hold office as an independent non-executive Director until the Annual General Meeting and are subject to re-election.

Mr. NG, Joo Yeow Gerry, being an independent non-executive Director eligible for re-election at the Annual General Meeting, has substantial knowledge and experience in the industry which the Board believes will bring valuable perspectives and contribute to the diversity of the Board. The recommendation of Mr. NG, Joo Yeow Gerry to the Board was made in accordance with the Nomination Policy of Directors and objective criteria (including integrity, age, gender, skills, knowledge, experience, expertise, professional and educational qualifications, background, the board’s composition and diversity, availability of service to the Company, expected contribution, independence, conflicts of interest, and any other relevant factors), with due regard for the benefits of diversity, as set out under the Board Diversity Policy. The Board is satisfied that through exercising the scrutinising and monitoring function of an independent non-executive Director, Mr. NG, Joo Yeow Gerry has continued to provide independent and objective judgment and advice to the Board to safeguard the interests of the Company and the Shareholders as a whole and has been continuously demonstrating firm commitment to his role. The Board is also satisfied with his independence having regard to the independence criteria as set out in Rule 3.13 of the Listing Rules.

Details of the above retiring and recently appointed Directors who are subject to re-election at the Annual General Meeting are set out in Appendix I to this circular in accordance with the relevant requirements of the Listing Rules.

PROPOSED DECLARATION OF FINAL DIVIDEND AND CLOSURE OF REGISTER

OF MEMBERS

The Board has recommended the payment of a final dividend of HK$20 cents per ordinary share for the year ended 31 December 2021. The final dividend, if approved, will be payable to the Shareholders whose names appear on the register of members of the Company on Monday, 4 July 2022 on or around Monday, 11 July 2022 and is subject to the approval of the Shareholders at the Annual General Meeting.

For determining the entitlement to the proposed final dividend, the register of members of the Company will be closed from Wednesday, 29 June 2022 to Monday, 4 July 2022, both days inclusive, during which period no transfer of shares of the Company will be registered. In order to entitled to the final dividend, all transfer of shares of the Company, accompanied by the relevant share certificates, must be lodged with the Company’s Hong Kong share registrars, Computershare Hong Kong Investor Services Limited, at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, for registration no later than 4:30 p.m. on Tuesday, 28 June 2022.

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LETTER FROM THE BOARD

PROPOSED AMENDMENTS TO THE MEMORANDUM AND ARTICLES OF ASSOCIATION AND THE ADOPTION OF THE SECOND AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF ASSOCIATION

The Stock Exchange has recently announced various amendments to the Listing Rules to implement the proposals under the “Consultation Conclusion Paper on Listing Regime for Overseas Issuers” published on 19 November 2021. The amendments to the Listing Rules have already taken effect from 1 January 2022 and include the introduction of the Core Shareholder Protection Standards that will apply to all listed issuers to provide the same level of protection to all investors.

The Board proposes to make certain amendments to the Memorandum and Articles of Association to reflect the Core Shareholder Protection Standards introduced by the Stock Exchange, to provide flexibility to the Company in relation to the conduct of general meetings and to incorporate certain housekeeping changes.

The Board proposes that the Company adopts the Second Amended and Restated Memorandum and Articles of Association in substitution for, and to the exclusion of, the existing Memorandum and Articles of Association. Details of the Proposed Amendments are set out in Appendix III to this circular.

The legal advisers to the Company as to Hong Kong laws, Baker & McKenzie, have confirmed that the Proposed Amendments conform with the requirements of the Listing Rules and the legal advisers to the Company as to the laws of the Cayman Islands, have confirmed that the Proposed Amendments do not violate the laws of the Cayman Islands. The Company confirms that there is nothing unusual about the Proposed Amendments for a company listed on the Stock Exchange.

The Proposed Amendments are prepared in the English language and the Chinese translation is for reference only. In case there are any inconsistencies between the English version and the Chinese version of the Proposed Amendments, the English version shall prevail. The proposed adoption of the Second Amended and Restated Memorandum and Articles of Association is subject to the approval of the Shareholders by way of a special resolution at the Annual General Meeting.

NOTICE OF ANNUAL GENERAL MEETING

Set out on pages 87 to 92 of this circular is the notice of the Annual General Meeting at which, inter alia, ordinary resolutions will be proposed to Shareholders to consider and, if thought fit, approve the granting of the General Mandate to issue Shares, the Repurchase Mandate to repurchase Shares, the re-election of Directors, the proposed declaration of final dividend for the year ended 31 December 2021 and a special resolution will be proposed to shareholders to consider and, if thought fit, approve the Proposed Amendments and the adoption of the Second Amended and Restated Memorandum and Articles of Association.

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LETTER FROM THE BOARD

FORM OF PROXY

A form of proxy is enclosed for use at the Annual General Meeting. Such form of proxy is also published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.3sbio.com). Whether or not you intend to attend the Annual General Meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the Hong Kong share registrar of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding the Annual General Meeting or any adjournment thereof. Completion and delivery of the form of proxy shall not preclude a Shareholder from attending and voting in person at the Annual General Meeting if he/she so wishes and in such event the form of proxy shall be deemed to be revoked. The Company strongly recommends you closely monitor the development of the situation with the COVID-19 pandemic and to assess, based on the social distancing policies, the necessity for attending the Annual General Meeting in person.

VOTING BY POLL

There is no Shareholder who has any material interest in the proposed resolutions regarding the General Mandate and Repurchase Mandate, therefore none of the Shareholders is required to abstain from voting on such resolutions.

Pursuant to Rule 13.39(4) of the Listing Rules and article 66(1) of the Articles of Association, any resolution put to the vote of the Shareholders at a general meeting shall be decided on a poll except where the chairman of the Annual General Meeting, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Accordingly, each of the resolutions set out in the notice of the Annual General Meeting will be taken by way of poll.

On a poll, every Shareholder present in person or by proxy or, in the case of a Shareholder being a corporation, by its duly authorized representative, shall have one vote for every fully paid Share of which he/she is the holder. A Shareholder entitled to more than one vote needs not use all his/her votes or cast all the votes he/she uses in the same way.

PRECAUTIONARY MEASURES FOR THE ANNUAL GENERAL MEETING

Taking into account of the recent development of the epidemic caused by the COVID-19 pandemic, the Company will implement the following prevention and control measures at the Annual General Meeting against the epidemic to protect the Shareholders from the risk of infection:

(i) compulsory body temperature check will be conducted for every Shareholder or proxy at the entrance of the venue. Any person with a body temperature of over 37.3 degrees Celsius will not be permitted to access to the meeting venue;
(ii) every Shareholder or proxy is required to wear surgical face mask throughout the meeting;
(iii) no souvenirs will be provided; and
(iv) no refreshments will be served.

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LETTER FROM THE BOARD

RECOMMENDATION

The Directors consider that the proposed resolutions for the granting of the General Mandate to issue Shares, the Repurchase Mandate to repurchase Shares, the re-election of Directors, the proposed declaration of final dividend for the year ended 31 December 2021 and the Proposed Amendments and adoption of the Second Amended and Restated Memorandum and Articles of Association are in the interests of the Group and the Shareholders as a whole. The Directors therefore recommend the Shareholders vote in favor of all the resolutions to be proposed at the Annual General Meeting.

Yours faithfully By order of the Board 3SBio Inc. Dr. LOU Jing Chairman

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APPENDIX I DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

The following are the particulars of the Directors (as required by the Listing Rules) proposed to be re-elected at the Annual General Meeting.

As at the Latest Practicable Date, save as disclosed herein, none of the following Directors held (i) any other position with the Company or other members of the Group; (ii) any directorship in any other public companies with securities of which are listed on any securities market in Hong Kong or overseas in the last three years; and (iii) any other major appointments and professional qualifications.

As at the Latest Practicable Date, save as disclosed herein, none of the following Directors had any relationship with any other Director, senior management or substantial Shareholder of the Company, or any interest in Shares within the meaning of Part XV of the Securities and Futures Ordinance.

As at the Latest Practicable Date, save as disclosed herein, there was no other information relating to the following Directors which is required to be disclosed pursuant to Rule 13.51(2) of the Listing Rules. There is no other matter which needs to be brought to the attention of the Shareholders in respect of the reelection of Directors.

EXECUTIVE DIRECTOR

Ms. SU Dongmei (蘇冬梅) (“Ms. Su”) , aged 52, was appointed as a Director on 11 June 2012 and was re-designated as an executive Director on 27 November 2014. Ms. Su is also the Company’s senior vice president and the general manager of Shenyang Sunshine Pharmaceutical Company Limited (“ Shenyang Sunshine ”). She is responsible for strategic direction of the Group. Ms. Su joined Shenyang Sunshine as a scientist of the research and development (“ R&D ”) department in January 1993, and served as a director of the R&D department from 1997 to 2006. She subsequently served as the chief technology officer responsible for R&D and manufacturing process engineering of Shenyang Sunshine from 2006 to 2008. Ms. Su was promoted to vice president of Shenyang Sunshine in April 2008. Ms. Su served as a director of Shenyang Sunshine from August 2007 to June 2013, and was re-appointed on 18 June 2016. She also served as a director of Hongkong Sansheng Medical Limited (香港三生醫藥有限公司) from November 2009 to November 2014.

Ms. Su also holds the following positions with other members of the Group:
(i) senior vice president and general manager of Shenyang Sunshine;
(ii) supervisor of Liaoning Sunshine Bio-Pharmaceutical Company Limited;
(iii) director of Shenzhen Sciprogen Bio-pharmaceutical Co., Ltd. (深圳賽保爾生物藥業有限公司);
(iv) director of Guangdong Sciprogen Bio-pharmaceutical Technology Co., Ltd. (廣東賽保爾生物醫藥技術有限公司);
(v) director of Guangdong Sunshine Pharmaceutical Co., Ltd. (廣東三生製藥有限公司); and
(vi) director of Strategic International Group Limited.

Ms. Su obtained a Bachelor’s degree in Biochemistry from Jilin University (吉林大學) in July 1992 and a Master’s and a Doctorate degree in Microbiology and Pharmacology from Shenyang Pharmaceutical University (瀋陽藥科大學) in June 2001 and July 2010, respectively. She has published in a number of academic journals on microbiology and medicinal biotechnology.

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DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX I

As at the Latest Practicable Date, Ms. Su had entered into a service contract with the Company for an extended term of three years commencing from 30 June 2021 until the date of the annual general meeting of the Company in the year 2024 (or, in case there is no annual general meeting in such year, until 22 June 2024), until termination in accordance with the terms and conditions of the service contract, or by either party giving to the other prior notice in writing. Under the terms of the service contract, Ms. Su is entitled to a fixed director’s fee payable per annum. The fees payable to the executive Directors are determined by the Board with reference to market trends. Ms. Su receives a director’s fee of US$75,000 per annum under her current service contract.

As at the Latest Practicable Date, Ms. Su was interested in 24,824,630 (0.98%) Shares within the meaning of Part XV of the Securities and Futures Ordinance, of which 24,384,630 Shares were deemed interests held through a controlled corporation, 440,000 share options were granted to a trust and held for the benefit of Ms. Su pursuant to a share option scheme. 200,000 shares in Sunshine Guojian, an associated corporation of the Company, were held by a fund for employees share ownership plan purposes for the ultimate benefit of Ms. Su.

NON-EXECUTIVE DIRECTOR

Mr. HUANG Bin (黃斌) (“Mr. Huang”) , aged 61, was first appointed as a Director on 5 September 2006 and ceased to be a Director on 29 May 2013. Mr. Huang was re-appointed as an executive Director on 27 November 2014, and was re-designated as a non-executive Director on 20 June 2019. Mr. Huang joined Shenyang Sunshine in 1993 as a manager of the human resources department.

Mr. Huang also holds the following positions (in a non-executive capacity) with other members of the Group:

(i) director and vice president of Shenyang Sunshine; and
(ii) director and general manager of Taizhou Huan Sheng Consulting Management Company Limited (泰州環晟諮詢管理有限公司) .

Mr. Huang received a diploma in Engineering from Northeast University (東北大學) in July 1987. He attended a one-year training program in business management in Tsinghua University (清華大學) from April 2000 to April 2001.

Mr. Huang has entered into an appointment letter with the Company for a term commencing from 20 June 2019 until, hereafter, the date of the Annual General Meeting of the Company (subject to retirement and re-election as and when required under the Articles of Association), which shall be automatically renewed for further three (3) years, unless otherwise terminated in accordance with the terms and conditions of the appointment letter.

As at the Latest Practicable Date, Mr. Huang was interested in 32,197,350 (1.28%) Shares within the meaning of Part XV of the Securities and Futures Ordinance, which were deemed interests held through a controlled corporation.

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APPENDIX I DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

INDEPENDENT NON-EXECUTIVE DIRECTOR

Mr. NG, Joo Yeow Gerry (黃祖耀) (“Mr. Ng”) , aged 57, was appointed as an independent nonexecutive Director on 21 January 2022. He has substantial experience in corporate planning, business expansion and development as well as cross-border management, particular in the investment management business in the Asian region. Mr. Ng has been an Independent Non-executive Director of AIA Company (Trustee) Limited, a subsidiary of AIA Group Limited (HK Stock Code: 1299), since August 2021, for its pension fund business in Hong Kong. He had served as the Chief Executive Officer, Asia ex Japan of Baring Asset Management (Asia) Limited (“ Baring Asset Management ”) up to December 2019, having been appointed as Managing Director of Baring Asset Management in December 2004. During his time at Baring Asset Management, Mr. Ng managed and had oversight of different offices in the Asian region including those in Shanghai, Hong Kong, Taipei and Seoul, and was responsible for the business management of a substantial book of business in retail mutual funds and institutional client assets. Mr. Ng has also had ample and broad range of experience working with key sovereign wealth funds, large institutions and regulators in the region. Prior to joining Baring Asset Management, Mr. Ng was employed by JF Asset Management Limited (now JP Morgan Asset Management (Asia Pacific) Limited) from May 1992 to November 2004. During this period, he held various positions including Head of Asian Institutional Clients and Finance Director (JF Unit Trusts), and had focused on sales, business development and client servicing in the Asian region. Mr. Ng had also worked at Price Waterhouse (now PricewaterhouseCoopers) in both London and Hong Kong from September 1986 to April 1992 with his last role serving as an Audit Manager in the Hong Kong office.

Mr. Ng is a Senior Fellow of the Hong Kong Securities and Investment Institute and has also previously held many respectable and prestigious positions in different professional and regulatory bodies, including formerly being a Member of the Securities and Futures Appeals Tribunal, the Chairman and Executive Committee Member of Hong Kong Investment Funds Association, a Panel Member of the Mandatory Provident Fund Schemes Appeal Board, and a Member of Hong Kong Trade Development Council Financial Services Advisory Committee.

Mr. Ng holds a Bachelor of Science degree (with first class honours) majoring in civil engineering from Imperial College, London. He is also a Chartered Accountant (England and Wales) and Certified Public Accountant (Hong Kong).

Mr. Ng has entered into a letter of appointment with the Company in respect of the appointment as an independent non-executive Director for a term of one year commencing from 21 January 2022. Pursuant to the letter of appointment, Mr. Ng is entitled to a director’s fee of HK$300,000 per annum, which was determined by the Board on the recommendation of the remuneration committee of the Company, having considered Mr. Ng’s expected contribution to the Company in terms of time, effort and his expertise, and with reference to the level of remuneration of the other independent non-executive Directors. Pursuant to the Articles of Association, Mr. Ng shall hold office until the date of the Annual General Meeting and shall then be eligible for re-election at the Annual General Meeting. Therefore, Mr. Ng shall be subject to retirement by rotation at the annual general meetings of the Company at least once every three years.

* The English translation is for identification purposes only

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EXPLANATORY STATEMENT

APPENDIX II

The following is an explanatory statement required to be sent to the Shareholders under the Listing Rules in connection with the proposed Repurchase Mandate.

SHARE CAPITAL

As at the Latest Practicable Date, the number of issued Shares was 2,438,845,412 Shares of nominal value of US$0.00001 each, which have been fully paid. Subject to the passing of the resolution granting the Repurchase Mandate and on the basis that no further Shares are issued or repurchased before the Annual General Meeting, the Company will be allowed to repurchase a maximum of 243,884,541 Shares which represent 10% of the issued Shares during the period ending on the earlier of (i) the conclusion of the next annual general meeting of the Company following the Annual General Meeting; or (ii) the expiry of the period within which the next annual general meeting of the Company following the Annual General Meeting is required by any applicable laws or the Articles of Association to be held; or (iii) the passing of an ordinary resolution by Shareholders in general meeting of the Company revoking or varying such mandate.

REASONS FOR AND FUNDING OF REPURCHASES

The Directors believe that it is in the best interests of the Company and the Shareholders to have a general authority from the Shareholders to enable the Company to repurchase its Shares in the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the Company’s net asset value and/or its earnings per Share and will only be made when the Directors believe that such repurchases will benefit the Company and the Shareholders as a whole.

Repurchase of the Shares must be funded out of funds legally available for such purpose in accordance with the Articles of Association and the applicable laws of the Cayman Islands. The Directors may not repurchase the Shares on the Stock Exchange for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange. Subject to the foregoing, the Directors may make repurchases with profits of the Company or out of a new issuance of shares made for the purpose of the repurchase or, if authorized by the Articles of Association and subject to the Companies Act, out of capital and, in the case of any premium payable on the repurchase, out of profits of the Company or from sums standing to the credit of the share premium account of the Company or, if authorized by the Articles of Association and subject to the Companies Act, out of capital.

The Directors have no present intention to repurchase any Shares under the Repurchase Mandate and they would only exercise the power to repurchase under the Repurchase Mandate in circumstances where they consider that the repurchase would be in the best interests of the Company. The Directors believe that if the Repurchase Mandate is exercised in full, it may have a material adverse impact on the working capital or gearing position of the Company, as compared with the positions disclosed in the audited consolidated financial statements of the Company as at 31 December 2021, being the date to which the latest published audited consolidated financial statements of the Company were made up. The Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or its gearing levels which, in the opinion of the Directors, are from time to time appropriate for the Company.

GENERAL

None of the Directors nor, to the best of their knowledge, having made all reasonable enquiries, their respective close associates (as defined in the Listing Rules), have any present intention, if the Repurchase Mandate is approved by the Shareholders, to sell any Shares to the Company.

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EXPLANATORY STATEMENT

APPENDIX II

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate in accordance with the Listing Rules, the Articles of Association and the applicable laws of the Cayman Islands.

No core connected person (as defined in the Listing Rules) has notified the Company that he or she has a present intention to sell any Shares to the Company, or has undertaken not to do so, if the Repurchase Mandate is approved by the Shareholders.

TAKEOVERS CODE

If as a result of a repurchase of Shares pursuant to the Repurchase Mandate, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition of voting rights for the purposes of the Takeovers Code. Accordingly, a Shareholder, or a group of Shareholders acting in concert (within the meaning under the Takeovers Code), depending on the level of increase in the Shareholder’s interest, could obtain or consolidate control of the Company and thereby become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code. Save as aforesaid, the Directors are not aware of any consequences which would arise under the Takeovers Code as a result of any repurchase of Shares pursuant to the Repurchase Mandate.

As at the Latest Practicable Date, to the best knowledge and belief of the Directors: (a) the Single Largest Shareholder’s Group was deemed to be interested in 700,969,211 Shares, representing approximately 28.74% in the aggregate number of issued Shares; and (b) CS Sunshine was interested in 267,293,585 Shares, representing approximately 10.96% in the aggregate number of issued Shares.

In the event that the Directors should exercise the Repurchase Mandate in full, the shareholdings of the Single Largest Shareholder’s Group and CS Sunshine in the Company will increase to approximately 31.9% and 12.2%, respectively of the issued Shares. To the best knowledge and belief of the Directors, such increase will give rise to an obligation to make a mandatory offer under Rule 26 of the Takeovers Code on the part of the Single Largest Shareholder’s Group. The Directors have no present intention to repurchase the Shares under the Repurchase Mandate to the extent that it will trigger any obligation under the Takeovers Code for the Single Largest Shareholder’s Group to make a mandatory offer. The Directors are not aware of any other consequences that may arise under the Takeovers Code as a result of any share repurchase under the Repurchase Mandate made by the Company of its Shares.

The Listing Rules prohibit a company from making any repurchase on the Stock Exchange if the result of the repurchase would be that less than 25% (or such other prescribed minimum percentage as determined by the Stock Exchange) of the total number of issued shares of the Company would be in public hands. The Directors do not propose to repurchase Shares which would result in less than the prescribed minimum percentage of Shares in public hands.

REPURCHASES MADE BY THE COMPANY

During the six months prior to the Latest Practicable Date, the Company has bought back 85,760,087 Shares (representing approximately 3.4% of the then total issued Shares) from CS Sunshine Investment Limited, for a total consideration of HKD581,453,389.86, equivalent to HKD6.78 per Share on 13 January 2022 through an off-market repurchase. All such 85,760,087 repurchased Shares had been cancelled by the Company on 25 January 2022.

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EXPLANATORY STATEMENT

APPENDIX II

Save as disclosed above, no repurchase of Shares or Bonds have been made by the Company in the six months prior to the Latest Practicable Date (whether on the Stock Exchange or otherwise).

SHARE PRICES

The highest and lowest prices at which the Shares have traded on the Stock Exchange during each of the previous twelve months were as follows:

	Highest prices	Lowest prices
Month	HK$	HK$
2021
May	9.440	6.780
June	12.300	8.830
July	9.800	6.160
August	8.690	6.210
September	8.920	7.200
October	7.850	7.000
November	7.300	6.500
December	7.200	6.280
2022
January	6.900	5.700
February	6.840	6.040
March	6.480	4.720
April	6.720	5.090
May (up to the Latest Practicable Date)	5.700	5.130

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