CStone Pharmaceuticals — Capital/Financing Update 2017

Nov 27, 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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兗州煤業股份有限公司

YANZHOU COAL MINING COMPANY LIMITED

(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 1171)

DISCLOSEABLE TRANSACTION INVESTMENT IN LINSHANG BANK CO. LTD.

BACKGROUND

The Board is pleased to announce that, on 27 November 2017, the Company entered into the Share Subscription Agreement with Linshang Bank, pursuant to which the Company will subscribe for 400 million shares privately placed by Linshang Bank atthe issue price of RMB3.00 per share.On the same date, the Company entered into the Share Transfer Agreement with the Transferors, pursuant to which the Company will acquire317,697,143 shares transferred byfiveexisting shareholders of Linshang Bank atthe price of RMB3.00 per share. Upon completion of the Transaction, the Company will hold 717,697,143 shares of Linshang Bank, representing 19.75% of the total share capital of Linshang Bank after the capital and share increase.

As the highest applicable percentage ratios in respect of the Transaction exceeds 5% but is less than 25%, the Transaction constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules but is exempt from the shareholders’ approval requirement.

Shareholders and potential investors should be aware that the completion of the Transaction is conditional upon the satisfaction of multiple conditions precedent, and those conditions precedent may or may not be satisfied. Shareholders and potential investors should exercise caution when dealing in the securities of the Company.

I. Background

The Board is pleased to announce that, on 27 November 2017, the Company entered into the Share Subscription Agreement with Linshang Bank, pursuant to which the Company will subscribe for 400 million shares privately placed by Linshang Bank atthe issue price

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of RMB3.00 per share.On the same date, the Company entered into the Share Transfer Agreement with the Transferors, pursuant to which the Company will acquire 317,697,143 shares transferred by five existing shareholders of Linshang Bank at the price of RMB3.00 per share. Upon completion of the Transaction, the Company will hold 717,697,143 shares of Linshang Bank, representing 19.75% of the total share capital of Linshang Bank after the capital and share increase. Upon completion of the Transaction, the Company and the other shareholders of Linshang Bank will enjoy their shareholders' equity interests in accordance with their respective shareholding ratio (including the undistributed profits at and after the Valuation Base Date).

II. Share Subscription Agreement and Share Transfer Agreement

The principal terms of the Share Subscription Agreement are set out below:

Date

27 November 2017

Parties

Issuer: Linshang Bank

Subscriber: the Company

To the best of the Directors’ knowledge, information and belief and after havingmade allreasonable enquiries, Linshang Bankand its ultimate beneficialowners are allthird parties independent of theCompany and its connected persons, and arenot in any way related to the Company and its connected persons.

Subjectmatter

In accordance withthe issue price of RMB3.00 pershare, the Company will subscribe for 400 million shares privately placed by Linshang Bank for a consideration of RMB1.2 billion.

Conditions precedent for the subscription

• (i) The Share Subscription Agreement has been signed and sealed by the legal representatives or authorized representatives of the parties.

• (ii) The parties have completed all necessary internal consideration and approval procedures and obtained the necessary regulatory approvals.

• (iii) The Company has completed the consideration and approval/registration procedures of the regulatory requirementsas required for the valuation report.

• (iv) The relevant banking regulatory authority has approved the additional issuing plan of Linshang Bank and examined and approved the Company’s shareholder status.

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• (v) No material adverse change has occurred in Linshang Bank’s operating or financial conditions or other aspects during the Transition Period.

• (vi) The subscription for Additional Shares and the acquisition of Stock Shares are conditional uponeach other, and the goal of this investment, which is that the Companywill become the largest shareholder of Linshang Bank severally with LinyiMunicipal Bureau of Finance,shall be realised.

Payment

The Company shall, within 5 business days after the satisfaction of all conditions precedent for the subscription, make the payment of consideration of the subscription; Linshang Bank shall, within 45 business days after the satisfaction of all conditions precedent for the subscription, complete the procedures such as the provision of shareholder’s certificate, the amendment of the articles of association and the improvement of corporate management, and complete the formalities such as share registration and business registration of change.

The principal terms of the Share Transfer Agreement are set out below:

Date

27 November 2017

Parties

Transferors:Shandong Yinfeng Investment (Group) Company Limited (山東銀豐投資集 團有限公司), Sunhover Industrial (Group) Company Limited (翔宇實業集團有限公 司 ),LinyiXinghua Trading Company Limited( 臨沂市興華商貿有限公司 ), Linyi Yuandong Import & Export Company Limited (臨沂遠東進出口有限公司) and Linyi Feida Investment Company Limited* (臨沂飛達投資有限公司).

Transferee: the Company

Confirming party: Linshang Bank

To the best of the Directors’ knowledge, information and belief and after havingmade allreasonable enquiries, the Transferors, Linshang Bankand their ultimate beneficialownersare all third parties independent of theCompany and its connected persons, and are not in any way related to the Company and its connected persons.

Subjectmatter

At the price of RMB3.00 per share, the Company will acquire317,697,143 shares transferred by fiveexisting shareholders of Linshang Bank for a total consideration of RMB953 million.

Conditions precedent for the transfer

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• (1) The Share Transfer Agreement has been signed and sealed by the legal representatives or authorized representatives of the parties.

• (2) The parties have completed all necessary internal consideration and approval procedures and obtained the necessary approvals from the relevant regulatory authorities.

• (3) The relevant banking regulatory authority has approved the transfer and examined and approved the Company’s shareholder status.

• (4) No material adverse change has occurred in Linshang Bank’s operating or financial conditions or other aspects during the Transition Period.

• (5) The subscription for Additional Shares and the acquisition of Stock Shares are conditional upon each other, and should assure the Company to acquire 317,697,143 Stock Shares. The Company does not accept share transfers from any individual party, and if the number of the Stock Shares to be transferred does not meet the above said amount, the Company has the right to refuse share transfers from any individual party.

• (6) If, due to whatever reason, the above conditions precedent for the transfer can not be fully satisfied, the Company has the right to unilaterally terminate the Share Transfer Agreement by written notice and no liability shall be imposed on the parties.The Company has the right to, by written consent, modify and waive any of the above conditions precedent for the transfer unless otherwise mandated by laws and regulations.

Payment

The Company shall, within 5 business days after the next day of the Closing Date, make the payment of consideration of the acquisition of the Subject Stock Shares to the specified bank accounts designated by the Transferors respectively.

Total consideration of the Transaction

The total consideration of the Transaction is RMB2,153 million, being the aggregation of the consideration of RMB1,200million of the Share SubscriptionTransaction and the consideration of RMB953 million of the Share Transfer Transaction.

The consideration of the Transaction has been determined after arm’s length negotiations by the parties upon normal commercial terms with reference to the valuation result of Linshang Bank’s net assetsmade by the valuation agency on the Valuation Base Date.

The consideration will be appropriated from the Company’s self-owned funds.

III. Reasons for and Benefits of the Transaction

The Transaction is beneficial for the Company to improve its profitability, increase the returns on its investments and, through a deep consolidation of industrial capital and financial capital, achieve the integration of production and finance and the synergistic

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development, thereby further establishing the new industrial distribution characterized by the trilateral support of real industry, logistics trade and financial investment, the integration of production and finance and the synergistic development.Therefore, the Directors believe that the terms of the Share Subscription Agreement and the Share Transfer Agreement are fair and reasonable and the Transaction is in the interests of the Company and the Shareholders as a whole.

IV. General Information

The Company’s seventh session of the Board approved the Transaction on its seventh boardmeeting held on 27 November 2017.

Information on the parties

The Company

The principal business of the Company includes coal mining, coal washing and processing, coal sales and coal chemical engineering. The products of the Company mainly include thermal coal which is used in large power stations, coking coal which is used for metallurgic production and high quality low-sulfur coal which is used for pulverized coal injection.

Linshang Bank

Linshang Bank is a joint-stock commercial bank registered and headquartered in Linyi, Shandong Provincewith cross-regional operations, the former entity of which,Linyi Commercial Bank, was founded on 18 February 1998,and changed its name to Linshang Bank on 22 November 2008 upon approval by the China Banking Regulatory Commission. The scope of business of Linyi Bank includes accepting public deposits, offering loans, providing domestic and foreign settlement services, issuing financial bonds, acting as an agent inbond issuing and cashing, underwriting government bonds, dealing in government bonds and financial bonds, engaging in inter-bank borrowing, dealing and acting as an agent in dealing in foreign exchanges and providing services and guarantee relating to letter of credit.

Set out below are the audited financial data of Linshang Bank for the two financial year ended 31 December 2015 and 2016, and the unaudited financial data for the six months ended 30 June 2017:

	For the year ended 31 December 2015	For the year ended 31 December 2016	For the six months ended 30 June 2017
	RMB (ten thousand)	RMB (ten thousand)	RMB (ten thousand)
Net profits before tax	60,995.50	61,036.13	32,447.67
Net profits after tax	44,381.58	44,241.85	24,294.04

As at 31 December 2016, the audited net asset value of Linshang Bank is approximately RMB6,208,502,400.As at the Valuation Base Date, the valuation of the net assets (shareholders’ equity interest) of Linshang Bank was RMB9,254,266,200.

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Shandong Yinfeng Investment (Group) Company Limited ( 山東銀豐投資集團有限公司 )

Shandong Yinfeng Investment (Group) Company Limited is principally engaged in the investment and development of high-technology products; the sales of general merchandise, rubber and plastic goods (excluding agricultural films), textile, mechano-electronic equipment, automobiles (excluding sedan cars), arts and crafts (excluding gold jewelries), construction and decoration materials, environmentally-friendly materials and equipment, heating materials and equipment, chemicals (excluding dangerous chemicals), communication equipment and flowers; the import and export services within the scope of the qualification certificate; and the provision of investment consultation service.

Sunhover Industrial (Group) Company Limited ( 翔宇實業集團有限公司 )

Sunhover (Group) Company Limited is principally engaged in the production, distribution and retail of medicine.

LinyiXinghua Trading Company Limited ( 臨沂市興華商貿有限公司 )

LinyiXinghua Trading Company Limited is principally engaged in the wholesale of coal; the sales of chemicals, metallurgic products, electromechanical devices, nonferrous metals, mechanical equipment, metallic materials, minerals, cokes, furnace burden, ferroalloy, continuous casting slabs, steel scraps, refractory materials and lubricating oil; and the import and export of goods.

Linyi Yuandong Import & Export Company Limited ( 臨沂遠東進出口有限公司 )

Linyi Yuandong Import & Export Company Limited is principally engaged in the selfsupporting and agency for the import and export of various goods and technologies; the freight forwarder business; and the wholesale and retail of prepackaged food, unpackaged food and beverages.

Linyi Feida Investment Company Limited ( 臨沂飛達投資有限公司 )

Linyi Feida Investment Company Limited is principally engaged in the investment of middle and small-sized enterprises; the investment and economic information consultation services; construction materials consultation services; business brokerage service; bidding and tendering agency; and the sales of construction materials.

V. Hong Kong Listing Rules Implications

As the highest of the applicable percentage ratios in respect of the Transaction exceeds 5% but is less than 25%, the Transaction constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules but is exempt from the shareholders’ approval requirement.

Shareholders and potential investors should be aware that the completion of the Transaction is conditional upon the satisfaction of various conditions precedent, and

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those conditions precedent may or may not be satisfied. Shareholders and potential investors should exercise caution when dealing in the securities of the Company.

VI. Definitions

In this announcement, unless the context otherwise requires, the following terms shallhave the meanings set out below:

• “AdditionalShares” the shares issued to the Company through private placement by Linshang Bank under the Share Subscription Transaction;

• “A Share(s)” domestic shares in the ordinary share capital of the Company, with a nominal value of RMB1.00 each, which are subscribed for and fully paid in RMB and are listed on the Shanghai Stock Exchange

• “Board” the board of Directors of the Company

• “Closing Date” the dateon which the Company completes the subscription of the Additional Shares and the acquisition of the Subject Stock Shares (i.e. 717,697,143 shares in total) and becomes the largest shareholder of Linshang Bank severally with LinyiMunicipal Bureau of Finance, and such shares have been fully transferred to the Company with all necessary registrations of change procedures completed

• “Company” Yanzhou Coal Mining Company Limited （兗州煤業股份有 限公司）, a joint stock limitedcompany established under the laws of PRC in 1997, and the H Shares and A Shares ofwhich are listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange,respectively

• “connected person(s)” has the meaning ascribed thereto under the Hong Kong Listing Rules

• “Directors” the directors of the Company

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

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

• “Hong Kong Listing the Rules Governing the Listing of Securities on the Hong Rules” Kong Stock Exchange

• “Hong Kong Stock The Stock Exchange of Hong Kong Limited Exchange”

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“Linshang Bank” Linshang Bank Co. Ltd.*, a joint-stock commercial bank registered and headquartered in Linyi City, Shandong Province with cross-regional operations, the former entity of which,Linyi Commercial Bank, was founded on 18 February 1998, and changed its name to Linshang Bank on 22 November 2008 upon approval by the China Banking Regulatory Commission

“percentage ratio(s)” has the meaning ascribed thereto under the Hong Kong Listing Rules

“PRC” the People’s Republic of China

• “RMB” Renminbi, the lawful currency of the PRC

“Share Subscription the share subscription agreement in respect of the Share Agreement” Subscription Transaction entered into between the Company and Linshang Bank on 27 November 2017

“Share Subscription the Company’s proposed subscription for 400 million shares Transaction” privately placed by Linshang Bank for an issue price of RMB3.00 per share

“Share Transfer the share transfer agreement in respect of the Share Transfer Agreement” Transaction entered into between the Company and the Transferors on 27 November 2017 “Share Transfer the Company’s proposed acquisition of 317,697,143 shares Transaction” transferred by fiveexisting shareholders of Linshang Bank at a price of RMB3.00 per share

“Shareholder(s)” holders of shares of the Company

“Subject StockShares” the total 317,697,143 Stock Shares of Linshang Bank to be transferred by the Transferors to the Company

• “Stock Shares” the issued shares of Linshang Bank held by its shareholders other than LinyiMunicipal Bureau of Finance

• “Transaction” the Share Subscription Transaction and the Share Transfer Transaction

• “Transition Period” the time period between the Valuation Base Date and the Closing Date

• “Transferors” Shandong Yinfeng Investment (Group) Company Limited (山東銀豐投資集團有限公司), Sunhover Industrial (Group) Company Limited (翔宇實業集團有限公司), Linyi Xinghua

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Trading Company Limited (臨沂市興華商貿有限公司), Linyi Yuandong Import & Export Company Limited (臨沂 遠東進出口有限公司) and Linyi Feida Investment Company Limited* (臨沂飛達投資有限公司)

• “Valuation Base Date”

• 31 December 2016, being the date on which the valuation agency conducted the valuation on the net assets (shareholders’ equity interest) of Linshang Bank

“%”

per cent.

By order of the Board Yanzhou Coal Mining Company Limited Li Xiyong Chairman of the Board

Zoucheng, Shandong Province, the PRC 27November2017

As at the date of this announcement, the directors of the Company are Mr. Li Xiyong, Mr. Li Wei, Mr. Wu Xiangqian, Mr. Wu Yuxiang, Mr. Guo Dechun, Mr. Zhao Qingchun and Mr. Guo Jun, and the independent non-executive directors of the Company are Mr. Kong Xiangguo, Mr. Cai Chang, Mr. Poon Chiu Kwok and Mr. Qi Anbang.

• For identification purposes only

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