China Galaxy Securities Co., Ltd. — Proxy Solicitation & Information Statement 2025

Jan 23, 2025

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your Shares in China Galaxy Securities Co., Ltd., you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer 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.

中国银河证券股份有限公司
CHINA GALAXY SECURITIES CO., LTD.
(Incorporated in the People's Republic of China with limited liability)
(Stock Code: 06881)

AMENDMENTS TO THE PLAN ON AUTHORIZATION
GRANTED BY THE GENERAL MEETING TO THE BOARD OF DIRECTORS
AND
NOTICE OF THE FIRST EXTRAORDINARY
GENERAL MEETING OF 2025

The EGM of China Galaxy Securities Co., Ltd. will be held at Conference Room M1919, Qinghai Finance Building, Building No. 1, No. 8 Xiying Street, Fengtai District, Beijing, the PRC on Monday, 17 February 2025 at 10:00 a.m. The notice convening the EGM is set out on pages 6 to 7 of this circular.

If you intend to appoint a proxy to attend the EGM, please complete the form of proxy in accordance with the instructions printed thereon and return the same to Computershare Hong Kong Investor Services Limited (for H Shareholders) and the Office of the Board of Directors of the Company (for A Shareholders) not less than 24 hours before the time appointed for holding the EGM (i.e. not later than Sunday, 16 February 2025 at 10:00 a.m.) or any adjournment thereof in person or by post. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

23 January 2025

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CONTENTS

Page

DEFINITIONS ... 1
LETTER FROM THE BOARD ... 3
NOTICE OF THE FIRST EXTRAORDINARY
GENERAL MEETING OF 2025 ... 6
APPENDIX I THE AMENDED PLAN ON AUTHORIZATION GRANTED
BY THE GENERAL MEETING TO THE BOARD OF
DIRECTORS ... 8

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DEFINITIONS

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

“A Share(s)”
domestic share(s) in the share capital of the Company with a nominal value of RMB1.00 each, which is (are) listed on the Shanghai Stock Exchange and traded in RMB

“A Shareholder(s)”
holder(s) of A Shares

“Articles of Association”
the articles of association of the Company, as amended from time to time

“Board” or “Board of Directors”
the board of Directors

“Company”
China Galaxy Securities Co., Ltd. (中國銀河證券股份有限公司), a joint stock company with limited liability incorporated in the PRC on 26 January 2007, whose H Shares are listed on the Stock Exchange (Stock Code: 06881) and A Shares are listed on the Shanghai Stock Exchange (Stock Code: 601881)

“Director(s)”
director(s) of the Company

“EGM”
the first extraordinary general meeting of 2025 of the Company to be held at Conference Room M1919, Qinghai Finance Building, Building No. 1, No. 8 Xiying Street, Fengtai District, Beijing, the PRC on Monday, 17 February 2025 at 10:00 a.m.

“H Share(s)”
overseas listed foreign share(s) in the share capital of the Company with a nominal value of RMB1.00 each, which is (are) listed on the Stock Exchange and traded in Hong Kong dollars

“H Shareholder(s)”
holder(s) of H Shares

“Hong Kong”
the Hong Kong Special Administrative Region of the PRC

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

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DEFINITIONS
“PRC” or “China”	the People’s Republic of China, but for the purposes of this circular only, excluding Hong Kong, Macau Special Administrative Region and Taiwan region
“RMB” or “Renminbi”	Renminbi, the lawful currency of the PRC
“Share(s)”	ordinary share(s) of the Company, including A Share(s) and H Share(s)
“Shareholder(s)”	holder(s) of the Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited

In case of any discrepancy between the English and Chinese versions of this circular, the Chinese version shall prevail.

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LETTER FROM THE BOARD

中国银河证券股份有限公司
CHINA GALAXY SECURITIES CO., LTD.
(Incorporated in the People's Republic of China with limited liability)
(Stock Code: 06881)

The Board of Directors:
Executive Directors:
Mr. WANG Sheng (Chairman)
Mr. XUE Jun (Vice Chairman and President)

Non-executive Directors:
Mr. YANG Tijun
Ms. LI Hui
Ms. HUANG Yan
Mr. SONG Weigang

Registered Office in the PRC:
No. 101, 7/F-18/F,
Building No. 1, No. 8 Xiying Street,
Fengtai District, Beijing, the PRC

Principal Place of Business
in Hong Kong:
20th Floor, Wing On Centre,
111 Connaught Road Central,
Sheung Wan, Hong Kong

Independent Non-executive Directors:
Ms. LIU Chun
Mr. LAW Cheuk Kin Stephen
Mr. LIU Li
Mr. MA Zhiming

23 January 2025

To the Shareholders

Dear Sir or Madam,

AMENDMENTS TO THE PLAN ON AUTHORIZATION
GRANTED BY THE GENERAL MEETING TO THE BOARD OF DIRECTORS

INTRODUCTION

On behalf of the Board of Directors, I invite you to attend the EGM to be held at Conference Room M1919, Qinghai Finance Building, Building No. 1, No. 8 Xiying Street, Fengtai District, Beijing, the PRC on Monday, 17 February 2025 at 10:00 a.m.

The purpose of this circular is to provide you with information reasonably necessary to enable you to make an informed decision on whether to vote for or against or abstain from voting on the resolution to be proposed at the EGM.

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LETTER FROM THE BOARD

AMENDMENTS TO THE PLAN ON AUTHORIZATION GRANTED BY THE GENERAL MEETING TO THE BOARD OF DIRECTORS

To further improve its corporate governance mechanism and clearly define the scope of authorization granted by the general meeting to the Board of Directors, with reference to market precedents and in consideration of the actual situation of the Company, the Company intends to amend the Plan on Authorization Granted by the General Meeting to the Board of Directors, the principal amendments of which relate to various aspects such as the establishment of legal entities, external guarantees, issuance of debt financing instruments, external donations, asset write-offs and business authorization. The full text of the amended Plan on Authorization Granted by the General Meeting to the Board of Directors is set out in Appendix I to this circular.

The amended Plan on Authorization Granted by the General Meeting to the Board of Directors was considered and approved by the Board on 23 January 2025, and is hereby proposed at the EGM for Shareholders' consideration and approval through a special resolution. The amended Plan on Authorization Granted by the General Meeting to the Board of Directors will become effective from the date of being considered and approved at the EGM.

THE EGM

The notice and form of proxy of the EGM are published on the Company's website at www.chinastock.com.cn and the HKExnews website of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk.

If you intend to appoint a proxy to attend the EGM, please complete the form of proxy in accordance with the instructions printed thereon and return the same to Computershare Hong Kong Investor Services Limited (for H Shareholders) and the Office of the Board of Directors of the Company (for A Shareholders) not less than 24 hours before the time appointed for holding the EGM (i.e. not later than Sunday, 16 February 2025 at 10:00 a.m.) or any adjournment thereof in person or by post. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

VOTING BY POLL

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. As such, the chairman of the EGM will exercise his power under the Articles of Association to demand a poll for the resolution proposed at the EGM.

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LETTER FROM THE BOARD

RECOMMENDATION

The Board considers that the resolution proposed at the EGM is in the interests of the Company and its Shareholders as a whole. As such, the Board recommends you to vote in favour of the resolution proposed at the EGM.

Yours faithfully,

By order of the Board

China Galaxy Securities Co., Ltd.

WANG Sheng

Chairman and Executive Director

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NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING OF 2025

中国银河证券股份有限公司
CHINA GALAXY SECURITIES CO., LTD.
(Incorporated in the People's Republic of China with limited liability)
(Stock Code: 06881)

NOTICE OF

THE FIRST EXTRAORDINARY GENERAL MEETING OF 2025

NOTICE IS HEREBY GIVEN that the first extraordinary general meeting of 2025 (the "EGM") of China Galaxy Securities Co., Ltd. (the "Company") will be held at Conference Room M1919, Qinghai Finance Building, Building No. 1, No. 8 Xiying Street, Fengtai District, Beijing, the PRC on Monday, 17 February 2025 at 10:00 a.m. for the following purposes:

SPECIAL RESOLUTION

1. To consider and approve the amendments to the Plan on Authorization Granted by the General Meeting to the Board of Directors.

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

Beijing, the PRC, 23 January 2025

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NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING OF 2025

Notes:

1. Pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, any vote of shareholders at a general meeting must be taken by poll. As such, each of the resolutions set out in the notice of EGM will be voted by poll. Results of the poll voting will be published on the Company's website at www.chinastock.com.cn and the HKExnews website of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk after the EGM.

2. Any shareholder entitled to attend and vote at the EGM convened by the above notice is entitled to appoint one or more proxies to attend and vote instead of him/her. A proxy needs not be a shareholder of the Company.

3. In order to be valid, the form of proxy together with the notarized power of attorney or other documents of authorization, if any, must be completed and returned to the Office of the Board of Directors of the Company (for A Shareholders) or the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited (for H Shareholders), not less than 24 hours before the time appointed for holding the EGM (i.e. not later than Sunday, 16 February 2025 at 10:00 a.m.) or any adjournment thereof. Computershare Hong Kong Investor Services Limited is located at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong. Completion and return of the form of proxy will not preclude a shareholder from attending and voting in person at the EGM or any adjournment thereof should he/she so wish.

4. For the purpose of determining the entitlement of H Shareholders to attend the EGM, the H Share register of members of the Company will be closed from Wednesday, 12 February 2025 to Monday, 17 February 2025 (both days inclusive), during which period no transfer of H Shares will be registered. In order to attend the EGM, all share certificates, together with the instruments of transfers, must be lodged for registration with the Company's H Share registrar, Computershare Hong Kong Investor Services Limited (for H Shareholders) at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong, not later than 4:30 p.m. on Tuesday, 11 February 2025. The Company will announce separately on the Shanghai Stock Exchange details of A Shareholders' eligibility for attending the EGM.

5. Where there are joint holders of any shares, the one whose name stands first in the register of members shall be entitled to attend and vote at the EGM in respect of such shares.

6. Shareholder or his/her proxy shall produce proof of identity when attending the EGM:

(a) Legal representatives of legal person shareholders who attend the meeting shall produce their own identity cards and effective proof of their capacity as legal representatives. Proxies of legal person shareholders shall produce their own identity cards and the form of proxy duly signed by the legal representatives or the board of directors or other governing body of the legal person shareholders according to laws; and

(b) Individual shareholders who attend the meeting in person shall produce their identity cards or other effective document or proof of identity and stock account cards. Proxies of individual shareholders shall produce effective proof of identity and form of proxy.

1. The EGM is expected to be held for less than half a day. Shareholders who attend the meeting in person or by proxy shall bear their own travelling and accommodation expenses.

2. The Office of the Board of Directors of the Company is located at Qinghai Finance Building, Building No. 1, No. 8 Xiying Street, Fengtai District, Beijing, the PRC

Tel: 86 (10) 8092 9800

Fax: 86 (10) 8092 6725

As at the date of this notice, the executive directors of the Company are Mr. WANG Sheng (Chairman) and Mr. XUE Jun (Vice Chairman and President); the non-executive directors are Mr. YANG Tijun, Ms. LI Hui, Ms. HUANG Yan and Mr. SONG Weigang; and the independent non-executive directors are Ms. LIU Chun, Mr. LAW Cheuk Kin Stephen, Mr. LIU Li and Mr. MA Zhiming.

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APPENDIX I

THE AMENDED PLAN ON AUTHORIZATION GRANTED BY THE GENERAL MEETING TO THE BOARD OF DIRECTORS

PLAN ON AUTHORIZATION GRANTED BY THE GENERAL MEETING TO THE BOARD OF DIRECTORS

To enhance the operational and managerial efficiency of the Company, the Board is granted the authority by the general meeting of the Company, in accordance with the Company Law of the People's Republic of China and other relevant laws and regulations, as well as the Articles of Association, to exercise the following powers within the authorized period:

I. Authorized Matters and Powers

(I) Management authorization

1. General long-term equity investments and divestitures

(1) The total annual asset amount for equity investments and divestitures shall not exceed 30% of the latest audited net assets of the Company;

(2) The asset amount for any single equity investment or divestiture shall not exceed 10% of the latest audited net assets of the Company;

(3) Where both the book value and appraised value of an asset are available, the higher value shall be used; and

(4) The term "general long-term equity investments" as used in this section includes the establishment of new entities, acquisition of controlling interests, capital increases in subsidiaries at all levels, strategic investments and other equity investments intended for long-term holding. This does not include private equity fund-type or financial direct investment-type equity investments, nor does it include investments in self-operated and market-making activities on platforms such as the National Equities Exchange and Quotations.

2. Acquisition and disposal of fixed assets and intangible assets, etc.

(1) The cumulative annual total amount for acquiring and disposing of fixed assets, intangible assets and other capital expenditures shall not exceed 10% of the latest audited net assets of the Company;

(2) The amount for any single acquisition or disposal of the aforementioned types of assets shall not exceed 5% of the latest audited net assets of the Company; and

(3) Where both the book value and appraised value of an asset are available, the higher value shall be used.

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APPENDIX I

THE AMENDED PLAN ON AUTHORIZATION GRANTED BY THE GENERAL MEETING TO THE BOARD OF DIRECTORS

3. Asset write-offs

(1) The total annual write-off for debt and equity assets shall not exceed 3% of the latest audited net assets of the Company;

(2) The total annual write-off for other assets shall not exceed 1% of the latest audited net assets of the Company;

(3) The term “write-off” as used in this section refers to the accounting treatment method of offsetting assets that meet the criteria for bad debt recognition against the previously recorded asset impairment provision, directly adjusting the profit and loss or other comprehensive income, and removing the assets from the balance sheet. Debt and equity assets are those that involve risk and loss and meet the bad debt criteria outlined in the “Measures for the Administration of the Write-off of Bad Debts of Financial Enterprises (2017 Version) (《金融企業呆賬核銷管理辦法(2017年版)》)” issued by the Ministry of Finance of the PRC. Write-offs of assets other than debt and equity assets that meet the criteria of the Measures, such as the write-off of fixed assets and intangible assets, are categorized as write-offs of other assets;

(4) In the disposal of debt or equity through market means such as bundled sales, public auctions, transfers, debt forgiveness, debt-to-equity conversions or credit asset securitization, the difference between the proceeds recovered from such disposals, as stipulated in the transfer or debt forgiveness agreements, and the balance of the debt or equity (comprising the remaining investment costs and accrued interest as recognized in the financial statements) shall be accounted for within the scope of bad debt write-offs; and

(5) The term “write-off” as used in this section excludes losses resulting from market value fluctuations of financial assets that are held for day-to-day business operations, have a public trading market and are capable of normal trading.

4. Establishment and adjustment of entities

The Board shall decide on the establishment and adjustment of domestic and overseas entities of the Company.

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APPENDIX I

THE AMENDED PLAN ON AUTHORIZATION GRANTED BY THE GENERAL MEETING TO THE BOARD OF DIRECTORS

5. External guarantees

The Board is authorized to provide guarantees for and only for its holding subsidiaries, within the scope permitted by laws and regulations, provided that the following conditions are met:

(1) The amount of any single guarantee does not exceed 10% of the latest audited net assets of the Company;

(2) The aggregate amount of external guarantees by the Company and its holding subsidiaries does not exceed 50% of the latest audited net assets of the Company;

(3) Guarantees are provided only for entities with a gearing ratio not exceeding 70%;

(4) The cumulative amount of guarantees provided by the Company and its holding subsidiaries over twelve consecutive months does not exceed 30% of the latest audited total assets of the Company;

(5) The cumulative amount of guarantees provided by the Company and its holding subsidiaries over twelve consecutive months does not exceed 50% of the latest audited net assets of the Company; and

(6) Guarantees do not exceed the shareholding percentage of the Company.

When issuing letters of liquidity support, commitment letters, comfort letters or keepwell agreements to external parties, any matters that effectively involve assuming guarantee responsibilities shall be managed in accordance with the authorization for guarantee matters. The term “external guarantee” as used in this section excludes guarantees arising from the day-to-day business operations of the Company.

6. External donations

(1) The total annual amount for external donations (on a consolidated basis) shall not exceed the sum of the basic amount and 0.03% of the audited net profit (on a consolidated basis) from the previous year. In particular, the basic amount is determined as 0.01% of the audited net assets (on a consolidated basis) from the previous year, with a cap of RMB25 million.

(2) Any assistance to regions affected by significant emergencies that exceeds the above total amount is subject to approval by the Board (requiring a vote of more than two-thirds of the directors).

(3) If the Ministry of Finance of the PRC or regulatory authorities have other provisions regarding donations, such provisions shall take precedence.

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APPENDIX I

THE AMENDED PLAN ON AUTHORIZATION GRANTED BY THE GENERAL MEETING TO THE BOARD OF DIRECTORS

7. Issuance of debt financing instruments

(1) The Board is authorized to determine all aspects of issuing debt financing instruments both domestically and internationally, based on the Company’s funding requirements and market conditions, and in line with the principle of maximizing the interests of the Company, within the limits permitted or approved by regulatory authorities.

(2) The term “debt financing instruments” as used in this section excludes any share conversion clauses and includes, but is not limited to, corporate bonds, financial bonds, subordinated bonds (including perpetual subordinated bonds), subordinated debt, short-term corporate bonds of securities companies, short-term financing bonds, asset-backed securities (notes), income certificate, renewable bonds and exchangeable bonds issued domestically, and US dollar, offshore RMB or other foreign currency bonds (including subordinated bonds and perpetual bonds), subordinated debt, the medium-term note programs, financing notes, exchangeable bonds and asset securitization certificates issued internationally, as well as other debt financing instruments that may be issued domestically and internationally according to relevant laws and regulations, the Articles of Association and regulatory requirements, by the Company and its holding subsidiaries.

(3) Provided that the Company’s various risk control indicators comply with relevant requirements and the issuance of debt financing instruments adheres to the legal and regulatory caps on issuance, the total issuance size of debt financing instruments by the Company and its holding subsidiaries, both domestically and internationally, shall not exceed 350% of the latest audited net assets of the Company, and the total amount of interest-bearing liabilities and perpetual subordinated debts on a consolidated basis shall not exceed 500% of the latest audited net assets of the Company, both calculated based on the total outstanding amount after issuance (including the currently outstanding debt financing size); the net assets under this sub-section exclude perpetual debts; for foreign currency issuance, the exchange rate is based on the central parity rate published by the People’s Bank of China on the issuance date.

(4) If the issuance of debt financing instruments involves guarantees and support letters (comfort letters) and/or keepwell agreement arrangements that effectively assume guarantee responsibilities, it must comply with the relevant authorization requirements for external guarantees outlined in section 5 of the Authorization Plan.

8. Expense expenditure

The Board is authorized to approve all expense expenditures.

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APPENDIX I

THE AMENDED PLAN ON AUTHORIZATION GRANTED BY THE GENERAL MEETING TO THE BOARD OF DIRECTORS

9. Civil case expenditure

The Board is authorized to approve all expenditures related to civil cases.

(II) Business authorization

The Board is authorized to make decisions regarding the conduct of various business activities within the Company’s business scope, as well as investment, financing and guarantee within the realm of day-to-day business operations (including but not limited to proprietary investments, alternative investments, market-making activities, entrusted wealth management, securities investments arising from sponsoring and underwriting activities, direct equity investments, private equity investment fund activities, over-the-counter derivatives, structured products, and other investments, financing and guarantees within the scope of day-to-day business operations), in accordance with laws, regulations and regulatory provisions, and based on changes in the market environment, the actual status of self-owned funds and business development, while ensuring effective risk management throughout the business development process.

For the avoidance of ambiguity, the above investments and financing activities within the business scope of the Company are not subject to the relevant authorizations in section 1 for the general long-term equity investments, section 2 for the acquisition and disposal of fixed assets and intangible assets, etc., and section 7 for the issuance of debt financing instruments.

II. Miscellaneous

(I) Unless otherwise specified, the figures contained in the Authorization Plan are calculated on consolidated basis.

(II) The currency used in the Authorization Plan is Renminbi (RMB), and foreign currencies shall be converted into equivalent RMB at the central parity rate published by the People’s Bank of China on the first working day of the month in which the review occurs. In this Authorization Plan, with respect to the amounts or percentages, the term “less than” excludes the number itself, whereas the term “not exceed/not exceeding” includes the number itself, and the term “more than” includes the number itself.

(III) The term “annual” as used in the Authorization Plan refers to a fiscal year.

(IV) The holding subsidiaries covered by the Authorization Plan refer to companies in which the Company holds more than 50% of the shares, or can determine the election of more than half of the Board members, or can effectively control through agreements or other arrangements.

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APPENDIX I

THE AMENDED PLAN ON AUTHORIZATION GRANTED BY THE GENERAL MEETING TO THE BOARD OF DIRECTORS

(V) The single investment covered by the Authorization Plan includes the cumulative value of multiple investments made by the Company and its holding subsidiaries in the same entity within a single fiscal year.

(VI) The Board shall vote on the authorized matters in the Authorization Plan by an ordinary resolution (i.e., a resolution that requires approval by more than half of the directors), except where the Articles of Association stipulate a special resolution (i.e., a resolution that requires approval by more than two-thirds of the directors).

The Board may delegate part of the powers under the Authorization Plan, within the scope permitted by laws and regulations, regulatory policies and the Articles of Association.

(VII) The Board shall report annually to the general meeting on its implementation of the authorizations granted by the general meeting. Such report may be included in the annual report of the Company and shall mainly include, but not be limited to: the actual frequency, amount and approval procedures of the authorized matters covered by the Authorization Plan during the reporting period. The Supervisory Committee shall oversee, inspect and evaluate the Board's implementation of the authorizations granted by the general meeting and report its findings to the general meeting.

(VIII) The formulation and modification of the Authorization Plan shall be implemented following approval by the general meeting through a special resolution (i.e., a resolution that requires approval by more than two-thirds of the voting rights held by shareholders present at the general meeting). The Authorization Plan shall be effective from the date of approval by the general meeting until a new authorization is made by the general meeting. In the absence of a new authorization by the general meeting, the Authorization Plan shall remain in effect.

(IX) In cases where relevant laws, regulations or regulatory provisions provide otherwise, such provisions shall take precedence.