CITIC Limited — Capital/Financing Update 2017

Jul 21, 2017

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.

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VOLUNTARY ANNOUNCEMENT

PUBLISHING OFFERING CIRCULAR OF CORPORATE BONDS ON THE SHANGHAI STOCK EXCHANGE BY CITIC CORPORATION LIMITED,A WHOLLY-OWNED SUBSIDIARY OF CITIC LIMITED

CITIC Corporation Limited (“ CITIC Corporation ”), a wholly-owned subsidiary of CITIC Limited (the “ Company ”, together with its subsidiaries, the “ Group ”), proposes to issue domestic corporate bonds (the “ Corporate Bonds ”). CITIC Corporation has published the application proof of the Offering Circular of 2017 Corporate Bonds (the “ Offering Circular ”) on the Shanghai Stock Exchange (“ SSE ”).

I. Relevant Information of the Corporate Bonds

Key Terms: the Corporate Bonds will be issued at par value with a fixed interest rate which shall be determined based on the book-building result. The Corporate Bonds will be issued with an amount not exceeding RMB50 billion. The first tranche of the Corporate Bonds to be issued will not exceed RMB10 billion and will be issued within 12 months from the date on which China Securities Regulatory Commission (“ CSRC ”) approved the issue of the Corporate Bonds. The remaining tranches of the Corporate Bonds will be issued within 24 months from the date on which the CSRC approved the issue of the Corporate Bonds.

Information Disclosure: according to the related guidelines and regulations of SSE, the Offering Circular has been disclosed on SSE. The Offering Circular contains certain information on the Company, CITIC Corporation, and the subsidiaries and investee

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companies of CITIC Corporation which had not been previously disclosed. The Company is issuing this voluntary announcement to keep its shareholders and potential investors informed of such information.

II. Initially Disclosed Information of the Corporate Bonds

1. The Financial Information of the Subsidiaries and Investee Companies of CITIC Corporation

As of March 31, 2017, the total assets, total liabilities and net assets of CITIC Urban Development & OperationCo., Ltd. (“ CITIC Urban Development ”) were RMB20.189 billion, RMB13.743 billion and RMB6.446 billion respectively. Its operating income, profit before tax and net profit for the three months ended March 31, 2017 were RMB0.052 billion, RMB0.052 billion and RMB0.055 billion respectively.

As of March 31, 2017, the total assets, total liabilities and net assets of CITIC Industrial Investment Group Co., Ltd. (“ CITIC Industrial Investment ”) were RMB46.375 billion, RMB27.955 billion and RMB18.420 billion respectively. Its operating income, profit before tax and net profit for the three months ended March 31, 2017 were RMB6.420 billion, RMB0.652 billion and RMB0.560 billion respectively.

As of March 31, 2017, the total assets, total liabilities and net assets of CITIC Construction Co., Ltd. (“ CITIC Construction ”) were RMB32.240 billion, RMB22.968 billion and RMB9.271 billion respectively. Its operating income, profit before tax and net profit for the three months ended March 31, 2017 were RMB1.094 billion, RMB0.139 billion and RMB0.098 billion respectively.

As of March 31, 2017, the total assets, total liabilities and net assets of CITIC Metal Group Limited (“ CITIC Metal ”) were HK$36.623 billion, HK$23.003 billion and HK$13.620 billion respectively. Its operating income, profit before tax and net profit for the three months ended March 31, 2017 were HK$12.777 billion, HK$0.528 billion and HK$0.472 billion respectively.

2. Information of CITIC Corporation

(1) Business segments

Revenue, cost and gross margin of CITIC Corporation for the three months ended March 31, 2017 (Unit: hundred million)

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		Revenue	Operating Cost	Operating Cost	Gross Margin of Main Business	Gross Margin of Main Business	Gross Margin of Main Business
Business
Segments	Amount	Percentage （%）	Amount	Percentage （%）	Amount		Operating Gross Margin
Financial	387.02	62.66	-	-	-		-
Resources and	119.13	19.29	113.35	56.64	5.78		4.85
Energy
Manufacturing	69.03	11.18	58.42	29.19	10.61		15.37
Project	17.96	2.91	16.09	8.04	1.87		10.41
Contracting
Real Estate	1.52	0.25	1.09	0.54	0.43		28.29
Other Industries	21.04	3.41	15.51	7.75	5.53		26.28
Operation and	26.98	4.37	-	-	-		-
Management
Inter-division	-25.1	-4.07	-4.35	-2.17	-		-
offsetting
Total	617.58	100.00	200.11	100.00	-		-

(2) Main businesses

(a) Insurance Business

By the end of March 31, 2017, the total assets, total liabilities and net assets of CITIC Prudential Life Insurance Co., Ltd. were RMB57.922 billion, RMB53.772 billion and RMB4.150 billion respectively. For the first three months in 2017, its operating income, profit before tax and net profit were RMB4.391 billion, RMB0.394 billion and RMB0.305 billion respectively.

(b) Manufacturing Business

The operating income and net profit of CITIC Dicastal Co., Ltd. for the three months ended March 31, 2017 were RMB5.806 billion and RMB0.235 billion respectively.

(c)Real Estate Business

Information on the main real estate business of CITIC Urban Development for the three months ended March 31,2017[1] :

d March 31,2017	1:
	Items	January-March, 2017
Newly developed area （ten thousand		0
square meter）
Completed area	（ten thousand square	0
meter）

1 Data contained in this table are on an operation and management basis, not on a financial statement basis.

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Items	January-March, 2017
Constructed area（ten thousand square	0
meter）
Sold construction area （ten thousand	0.8556
square meter）
Property sales income（RMB hundred	0.9243
million）
Average sales agreement price（RMB ten	1.0803
thousand/per square meter）
Carried forwarded sales income（RMB	-
hundred million）
Collection rate	-

3. Creditworthiness

(1) Credit facilities from principal lending banks

The principal bank credit facilities granted to CITIC Corporation as of 31 March, 2017 was RMB107.2 billion[2] , of which RMB91.1 billion has not yet been used, accounting for 84.98% of the total facilities. CITIC Corporation strictly complies with banking settlement disciplines and repays bank loans and interests on time. The loan repayment ratio and interest payment ratio of CITIC Corporation and its major subsidiaries in the most recent three years and first quarter are 100%, there is no overdue and outstanding debt.

(2) Accumulative balance of corporate bonds after the proposed issuance and the percentage represented by it in the latest net assets of CITIC Corporation

As of March 31, 2017, if the proposed issuance has been approved and completed in full, the total amount of outstanding corporate bonds and enterprise bonds publicly issued by CITIC Corporation in the PRC as calculated on a consolidated basis would be RMB55.600 billion, representing 10.52% of the owners’ equity as shown in the consolidated balance sheet of the Company as at the end of March, 2017.

4. Management Discussion and Analysis

2Of these facilities, the credit facilities of RMB23.70 billion and RMB4.40 billion in foreign currency provided by Bank of China are to be shared by CITIC Corporation and CITIC Group, the credit facility of RMB12.00 billion provided by China Merchants Bank is to be shared by CITIC Corporation and CITIC Group, and the credit facility of RMB14.00 billion provided by the Agricultural Bank is to be shared by CITIC Corporation and CITIC Group, the credit facility of RMB10.00 billion provided by the Bank of Communications is to be shared by CITIC Corporation and CITIC Group, the credit facility of RMB17.10 billion is provided by ICBC, the credit facility of RMB24.00 billion is provided by CCB, and the credit facility of RMB2.00 billion is provided by CITIC Bank.

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(1) Analysis of the structure and changes of assets

(i) Financial assets at fair value through profit or loss

The financial assets at fair value through profit and loss of CITIC Corporation as at the end of 2016 increased substantially as compared with the end of 2014 and 2015, which was mainly due to an increase in the bond investment and interbank deposit certificate business of China CITIC Bank Corporation Limited (“ CITIC Bank ”).

(ii) Inventory

As at the end of 2016, CITIC Corporation’s inventory balance decreased by RMB63.901 billion (76.76%) as compared with the end of 2015, which was mainly due to the fact that CITIC Corporation sold a lot of equity interests in real estate development projects in the PRC to China Overseas Land & Investment Limited through its parent company, CITIC Limited, resulting in a substantial drop in its real estate inventory.

(iii) Financial assets held under resale agreements

The financial assets held by CITIC Corporation under resale agreements as at the end of March, 2017 decreased by RMB140.529 billion (81.14%) as compared with the end of 2016, which was mainly due to the substantial decrease in the bonds purchased by CITIC Bank under resale agreements.

(iv) Investments properties

The investment properties held by CITIC Corporation as at the end of 2016 decreased by RMB1.083 billion (21.29%) as compared with the end of 2015, which was mainly due to the reduce of investment real estate of CITIC Corporation by disposing its real estate subsidiary in mainland China.

(v) Construction in progress

The construction in progress of CITIC Corporation as at the end of 2016 increased by RMB2.719 billion (42.95%) as compared with the end of the previous year, which was mainly due to an increase in newly-added construction projects (as a result of newly added construction in progress for China Zun by its subsidiary CITIC Heye Investment with a value of RMB1.6 billion) and a decrease in completed projects carried over.

(2) Analysis of the structure and changes of debts

(i) Notes and accounts payable

As at the end of 2016, the notes and accounts payable of CITIC Corporation decreased by RMB30.158 billion (16.84%) as compared with the end of 2015, which was mainly due to the decrease in prepayments from CITIC Construction and the sale of CITIC Real Estate .

(ii) Financial assets sold under repurchase agreements

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As at the end of 2016, CITIC Corporation’s financial assets sold under repurchase agreements increased by RMB49.174 billion (69.10%) as compared with the end of 2015, which was mainly due to a substantial increase in the bonds sold by its subsidiary CITIC Bank to the People’s Bank of China under repurchase agreement. As at the end of March, 2017, CITIC Corporation’s financial assets sold under repurchase agreements decreased by RMB79.538 billion (66.09%) as compared with the end of 2016, which was mainly due to its subsidiary CITIC Bank.

(iii) Borrowings

From 2014 to the end of 2016, the percentages and size of borrowings of CITIC Corporation continued to decrease, which was mainly due to that fact that its sale of real estate business reduced its borrowings by a net amount of RMB30.6 billion. CITIC Corporation enjoys a relatively good creditworthiness and its borrowings are obtained mainly by credit.

Shareholders and investors are reminded that certain financial information included in this announcement is prepared in accordance with the generally accepted accounting principles of the PRC, which may require adjustment during the course of auditing. In addition, the information contained therein is limited solely to the consolidated operation of CITIC Corporation, which does not provide a full picture of the operation status of the Group.

Potential investors and shareholders of the Company are reminded that certain financial information mentioned above has not been reviewed or audited by the Company’s independent auditors. Differences may arise between such financial information and the data disclosed in audited reports due to review and auditing adjustment. Potential investors and shareholders of the Company should exercise caution when dealing with the securities of the Company and should not rely solely on such information.

By Order of the Board

CITIC Limited

Ricky Choy Wing Kay Wang Kang

Joint Company Secretaries

Hong Kong, July 21, 2017

As at the date of this announcement, the executive directors of the Company are Mr Chang Zhenming (Chairman), Mr Wang Jiong, Ms Li Qingping and Mr Pu Jian; the non-executive directors of the Company are Mr Liu Yeqiao, Mr Song Kangle, Ms Yan Shuqin, Mr Liu Zhongyuan and Mr Yang Xiaoping; and the independent non-executive directors of the Company are Mr Francis Siu Wai Keung, Dr Xu Jinwu, Mr Anthony Francis Neoh, Ms Lee Boo Jin, Mr Noriharu Fujita and Mr Paul Chow Man Yiu.

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