China Galaxy Securities Co., Ltd. — Capital/Financing Update 2018

Jul 26, 2018

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

==> picture [246 x 31] intentionally omitted <==

(A joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock code: 06881)

INDICATIVE ANNOUNCEMENT PROPOSED ACQUISITION OF 12% EQUITY INTEREST IN GALAXY DERIVATIVES

China Galaxy Securities Co., Ltd. (the “ Company ”) has been informed that China Galaxy Financial Holdings Company Limited ( 中國銀河金融控股有限責任公司 , the controlling shareholder of the Company, “ Galaxy Financial Holdings ”) intends to dispose of its 12% equity interest (the “ Target Equity Interest ”) in Galaxy Derivatives Capital Management Company Limited ( 銀河德睿資本管理有 限公司 , “ Galaxy Derivatives ”). The Target Equity Interest has been publicly listed for sale at a listing price of RMB66.673 million on the Beijing Financial Assets Exchange on 29 June 2018 for a listing period up to 26 July 2018.

The board of directors of the Company (the “ Board ”) announces that Galaxy Futures Company Limited ( 銀河期貨有限公司 , a non-wholly owned subsidiary of the Company, “ Galaxy Futures ”) intends to exercise the right of first refusal to acquire the Target Equity Interest at a consideration of no more than RMB66.673 million in the public listing-for-sale (the “ Proposed Acquisition ”).

As at the date of this announcement, Galaxy Derivatives is a non-wholly owned subsidiary of Galaxy Futures, held as to 88% by Galaxy Futures and 12% by Galaxy Financial Holdings. Based on the valuation of the entire equity interest of Galaxy Derivatives as at 30 June 2017 conducted by an independent valuer (being RMB498.4712 million), the value of the Target Equity Interest amounts to RMB59.8165 million. Based on the financial statements of Galaxy Derivatives prepared in accordance with the China Accounting Standards for Business Enterprises, its key financial data are set out below:

Unit: RMB

Item As at 31 December 2017 As at 30 June 2018 (Audited) (Unaudited) Total assets 525,306,373.11 770,646,856.48 Net assets 499,754,320.08 506,209,472.56 Item For the year of 2017 For the six months from January to June 2018 (Audited) (Unaudited) Operating income 11,521,371.79 25,636,366.15 Net profit -3,928,866.13 6,455,152.48

1

As at the date of this announcement, the transferee of the Target Equity Interest and the final consideration for the Proposed Acquisition have not been confirmed, and no binding agreement has been entered into in respect of the Proposed Acquisition. If Galaxy Futures is confirmed to be the transferee of the Target Equity Interest, Galaxy Futures and Galaxy Financial Holdings will enter into an equity transfer agreement, in which case, the Proposed Acquisition will constitute a connected transaction of the Company under Chapter 14A of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”), and the Company will comply with the relevant requirements of the Listing Rules in this regard in a timely manner.

Shareholders of the Company and potential investors are advised to exercise caution when dealing in securities of the Company.

By order of the Board China Galaxy Securities Co., Ltd. Chen Gongyan Chairman and Executive Director

Beijing, the PRC 26 July 2018

As at the date of this announcement, the executive Directors of the Company are Mr. CHEN Gongyan (Chairman), Mr. GU Weiguo (Vice Chairman) and Mr. WU Chengming; the non-executive Directors are Mr. DU Ping, Mr. SHI Xun, Mr. LIU Dingping and Mr. LI Chaoyang; and the independent non-executive Directors are Mr. WANG Zhenjun, Mr. LUO Lin, Mr. WU Yuwu and Mr. LIU Ruizhong.

2