DFZQ — Capital/Financing Update 2019

Mar 28, 2019

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company 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.

(A joint stock company incorporated in the People’s Republic of China with limited liability under the Chinese corporate name “ 東方證券股份有限公司 ” and carrying on business in Hong Kong as “ 東方證券 ” (in Chinese) and “DFZQ” (in English))

(Stock Code: 03958)

PROPOSED GENERAL MANDATE TO ISSUE OFFSHORE DEBT FINANCING INSTRUMENTS

The board of directors (the “ Board ”) of 東方證券股份有限公司 (the “ Company ”) has considered and agreed to propose a resolution regarding granting general mandate to issue offshore debt financing instruments at the shareholders’ general meeting of the Company, whereby the Company is approved to issue offshore debt financing instruments (the “ Offshore Financing Instruments ”), through public or non-public offering, on a one-off or multiple issuances or multi-tranche issuances basis, details of which are as follows:

1. ISSUE METHODS

Offshore Debt Financing Instruments will be issued through public or non-public offering, on a one-off or multiple issuances or multi-tranche issuances basis.

2. ISSUE TYPE

According to the actual conditions, the issuance will be in the form of bonds, subordinated bonds or structural notes, including but not limited to USD bonds, offshore RMB or bonds or subordinated bonds in other foreign currencies, foreign currency notes (including but not limited to commercial notes), medium term note programme and etc.

3. ISSUE SIZE

The maximum balance of the outstanding balance after the issuance of the Offshore Debt Financing Instruments does not exceed RMB20 billion. For instrument denominated in foreign currency, it shall be based on the median exchange rate published by the People’s Bank of China on the date of issuance and shall be in compliance with the requirements prescribed in the relevant laws and regulations on the maximum amount of the specific debt financing instruments to be issued.

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4. ISSUER

The Issuer of Offshore Debt Financing Instruments can be one of the following entities according to the needs of the issuance:

• (1) the Company;

• (2) offshore wholly-owned subsidiaries of the Company;

• (3) on the premise of fulfilling the following conditions 1, 2 and 3, a directly or indirectly wholly-owned offshore subsidiary established overseas by the Company can be the issuer of Offshore Debt Financing Instruments to issue, on a one-off or multiple issuances or multi-tranche issuances basis, Offshore Debt Financing Instruments overseas.

• 1 Those wholly-owned offshore subsidiaries are established in Hong Kong or other appropriate offshore jurisdictions while the Company directly or indirectly holds 100% interest of those wholly-owned offshore subsidiaries.

• 2 The registered capital of the proposed directly or indirectly wholly-owned offshore subsidiaries shall not be higher than US$10,000 or the equivalent amount in other currencies. The name of the entity will be subject to the final version approved by the approving and registering authorities.

• 3 The mandate will be granted at the general meeting and all necessary approval processes required by the regulatory authorities will have been fulfilled. Issuer will be determined in accordance with relevant laws and regulations as well as the advice and recommendations of regulatory authorities, the Company’s actual needs for funding and the then prevailing market conditions at the time of issuance.

5. ISSUE TERM

The term of the Offshore Debt Financing Instruments shall be no longer than 10 years (inclusive). It may have single or multiple combined maturities.

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6. ISSUE INTEREST RATE, WAY OF PAYMENT AND ISSUE PRICE

The interest rate and payment methods of the issuance of Offshore Debt Financing Instruments will be determined by the issuer and sponsor or lead underwriter (if any) in accordance with the then prevailing market conditions at the time of issuance and relevant provisions.

Issue price will be determined in accordance with the then prevailing market conditions at the time of issuance and relevant laws and regulations.

7. SECURITY AND OTHER ARRANGEMENTS

The Company, the wholly-owned subsidiary and/or third party will provide security or issue letter of support and/or keepwell agreement, standby letter of credit or other credit enhancements, according to the structure of each issuance.

8. USE OF PROCEEDS

The proceeds raised from the issuance of Offshore Debt Financing Instruments shall be used to fund business operation needs of the Company, improve the debt structure of the Company, supplement working capital of the Company and/or make project investment.

9. ISSUE TARGET

The issue target of the Offshore Debt Financing Instruments shall be the onshore and offshore investors whom meet the conditions for subscription.

10. LISTING OF DEBT FINANCING INSTRUMENTS

A resolution regarding to the application of listing of the Offshore Debt Financing Instruments will be proposed at the general meeting to authorise the Board, and agree the Board in turn to authorise the chairman and general manager of the Company (“ Authorized Representatives ”) to jointly or individually determine in accordance with the actual conditions of the Company and then prevailing market conditions at the time of issuance.

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11. AUTHORISATION MATTERS OF ISSUANCE OF OFFSHORE DEBT FINANCING INSTRUMENTS

To ensure effective coordination for the issuance of Offshore Debt Financing Instruments and other matters in connection with the issuance, a resolution will be proposed at the general meeting to authorise the Board, and agree the Board in turn to further authorise the executive directors to deal with, at its/their sole discretion, all matters in connection with the issuance of Offshore Debt Financing Instruments in accordance with the relevant laws and regulations as well as the advice and recommendations from regulatory authorities, within the framework and under the principles approved at the general meeting, in order to maximise the interest of the Company, including but not limited to:

• 1 formulation and adjustment of the details of the proposal for issuance of Offshore Debt Financing Instruments in accordance with the applicable laws, regulations and relevant provisions from regulatory authorities as well as resolutions passed at the general meeting of the Company, and based on the actual conditions of the Company and the specific conditions of the relevant debt market, including without limitation, the determination of the suitable issuer(s), timing of issue, details of issue size and method, terms of issue, issue targets, maturity, whether to issue on a one-off, multiple issuances, multi-tranche issuances or multiple-category issuances basis and, if on multiple issuances, multi-tranche issuances or multiple-category issuances basis, the issue size and term of each issuance, tranche and category, the methods in which the nominal value and interest rate are determined, currency (including offshore RMB), pricing method, issuance arrangements, credit enhancement arrangements including letter of guarantee or letter of support, rating arrangement, details of subscription method, whether to incorporate terms of repurchase or redemption, details of placement arrangements, use of proceeds, registration, listing of Offshore Debt Financing Instruments and place of listing, measures to mitigate repayment risks, measures to ensure debt repayment (if applicable), etc. and all matters in connection with the issuance of Offshore Debt Financing Instruments;

• 2 handling, at its/their sole discretion, the establishment of directly or indirectly wholly-owned offshore subsidiaries and all related matters, including but not limited to procedures at home or abroad such as approval, filing and registration, in relation to the issuance of Off-shore Debt Financing Instruments according to relevant provisions;

• 3 determining and engaging intermediary agency, signing, implementing, amending and completing all agreements and documents relating to the issuance of Offshore Debt Financing Instruments, including without limitation, the sponsor agreement, underwriting agreement, credit enhancement agreements such as guarantee agreement or letter of support, bond indenture, engagement letter with intermediary agency, trust agreement, settlement management agreement, registration and custody agreement, listing agreement and other legal documents, etc., and disclosing the relevant information in accordance with the relevant laws, regulations and the listing rules of the stock exchanges on which the Company’s securities are listed (including without limitation, the preliminary and final offering memoranda of the debt financing instruments, and all announcements and etc. in relation to the issuance of Offshore Debt Financing Instruments);

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• 4 selecting and engaging trustee manager(s) and settlement manager(s) for the issuance of Offshore Debt Financing Instruments, signing the trustee agreement(s) and settlement management agreement(s) and (if applicable), formulating rules for meetings of the holders of the debt financing instruments;

• 5 undertaking all applications and filings as well as listing matters (if applicable) in connection with the issuance of Offshore Debt Financing Instruments, including without limitation, preparing, revising and submitting relevant application and filing materials relating to the issuance and listing of the Offshore Debt Financing Instruments and application and filing materials in respect of credit enhancement agreements such as guarantee or letter of support to be provided by the Company, the issuer and/or third party, and signing the relevant application and filing documents and other legal documents;

• 6 making relevant adjustments to matters relating to the issuance of Offshore Debt Financing Instruments according to the advice of and changes in the policies of regulatory authorities or the changes in market conditions, or determining whether to continue with all or part of the work in respect of the issuance of Offshore Debt Financing Instruments in accordance with the actual conditions, unless re-approval by the shareholders at the general meeting is otherwise required pursuant to the relevant laws, regulations and the articles of association of the Company;

• 7 dealing with other relevant matters in connection with the issuance of Offshore Debt Financing Instruments;

• 8 subject to approval of the above authorisation at the general meeting, a resolution will be proposed to the Board to authorise its Authorized Representatives for the issuance of Offshore Debt Financing Instruments to jointly or individually deal with all matters in connection with the issuance of Offshore Debt Financing Instruments on behalf of the Company pursuant to the resolutions passed at the general meeting and the authorisation granted by the Board.

12. VALIDITY PERIOD OF RESOLUTION

The shareholder’s resolutions regarding the issuance of Offshore Debt Financing Instruments shall be valid for a period of 36 months from the date of passing of the resolutions at the general meeting. Where the Board and/or its Authorized Representatives have, during the term of the authorisation, decided the issuance or partial issuance of Offshore Debt Financing Instruments, and provided that the Company has also, during the term of the authorisation, obtained the approval or license from or completed filing or registration (if applicable) with regulatory authorities on the issuance, the Company may, during the validity period of such approval, license, filing or registration, complete the issuance or relevant partial issuance of Offshore Debt Financing Instruments.

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The Company will allocate resources reasonably according to the annual asset-liability allocation plan. At the same time, the Company will promote the implementation of comprehensive risk management, implement total risk control, monitor liquidity risk indicators in real time, conduct stress tests, and establish emergency plans to ensure the Company’s liquidity safety, and ensure that all businesses are carried out in an orderly manner while the use of funds has achieved good results.

The above proposal still needs to be considered and approved by the shareholders of the Company at the shareholders’ general meeting, and will come into effect after being considered and approved at the shareholders’ general meeting. A circular containing, among other things, details of the above resolution, together with the notice of the shareholders’ general meeting, will be despatched to the shareholders in due course.

By order of the Board of Directors PAN Xinjun Chairman

Shanghai, PRC March 28, 2019

As at the date of this announcement, the Board of Directors comprises Mr. PAN Xinjun and Mr. JIN Wenzhong as executive Directors; Mr. LIU Wei, Mr. WU Junhao, Mr. CHEN Bin, Mr. LI Xiang, Ms. XIA Jinghan, Mr. XU Jianguo and Mr. DU Weihua as non-executive Directors; and Mr. XU Guoxiang, Mr. TAO Xiuming, Mr. WEI Anning, Mr. XU Zhiming and Mr. JIN Qinglu as independent non-executive Directors.

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