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)

ANNOUNCEMENT ON PROJECTED INTRAGROUP GUARANTEES FOR THE YEAR 2019

The board of directors (the “ Board ”) of 東方證券股份有限公司 (the “ Company ”) considered and approved a resolution with respect to additional guarantees provided by the Company for its subsidiaries or among its subsidiaries (the “ Intragroup Guarantees ”) within the validity period of authorization and submitted the same to the general meeting for consideration.

I. DESCRIPTION OF GUARANTEES

In accordance with the operation plan of the Company and in order to minimize the financing costs, the Company and its subsidiaries propose to adopt various fundraising methods, including bond issuance and banking loans, which may involve guarantees provided by the Company for its subsidiaries or among its subsidiaries. To minimize the financing time cost and prepare internal approval in advance, the Board considers and approves the following matters to be submitted to the general meeting for consideration and approval in accordance with the relevant requirements of the laws and regulations, the articles of association of the Company, and the Measures to Manage External Guarantees of the Company:

1. Limitation of the guarantees: the total amount of additional Intragroup Guarantees provided by the Company and its subsidiaries within the validity period of authorization shall not exceed 20% of the latest audited net assets of the Company, and the amount of each separate Intragroup Guarantee shall not exceed 10% of the latest audited net assets of the Company.

2. Types of the guarantees: any one-time, multiple-time, or multiple-tranche onshore or offshore debt financing instrument(s) is/are issued through public or non-public issuances (including but not limited to ordinary bonds, subordinated bonds, ultra short-term financing bills, short-term financing bills, medium-term notes), or loans are granted from onshore or offshore financial institutions (including but not limited to bank credit, bank loans and syndicated loans).

3. Models of the guarantees: collateralization include guarantees, security, pledges, and other models as required under the provisions of the relevant laws and regulations.

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1. Targets of the guarantees: guarantees will be provided by the Company for its directly and indirectly holding wholly-owned subsidiaries (including those with the gearing ratio over 70%), or provided among its wholly-owned subsidiaries (including those with the gearing ratio over 70%).

2. Validity period of authorization: the aforementioned guarantees shall be valid from the date of consideration and approval of the guarantees by the 2018 annual general meeting to the date of the 2019 annual general meeting.

3. Authorization: it is proposed to the general meeting for the shareholders to authorize the Board and agree the Board in turn to further authorize the management to, at its/their sole discretion, execute all documents in connection with the aforementioned guarantees, obtain approvals from and handle filing formalities with the relevant regulatory authorities and all other relevant matters, and to fulfill the obligation of information disclosure in a timely manner in accordance with the relevant laws and regulations upon the provision of letters of guarantees or issuance of guarantee documents for the Company’s wholly-owned subsidiaries.

II. SUMMARY OF THE GUARANTEED PARTIES

The aforementioned targets of the guarantees include but not limited to the Company’s directly and indirectly holding wholly-owned subsidiaries and their respective subsidiaries as below (including those with the gearing ratio over 70%):

1. Shanghai Orient Securities Futures Co., Ltd.

Address: 14/F, Shanghai Futures Building, 500, Pudian Road, China (Shanghai) Pilot Free-Trade Zone

Date of establishment: December 8, 1995

Registered capital: RMB2.3 billion

Equity interests held by the Company: 100%

Legal representative: Lu Dayin

Principal businesses: commodities futures brokerage, financial futures brokerage, futures investment consultancy, assets management, funds sale.

As at December 31, 2018, the total assets and net assets of Shanghai Orient Securities Futures Co., Ltd. amounted to RMB20.984 billion and RMB3.038 billion, respectively. In 2018, its operating income and net profit amounted to RMB4.339 billion and RMB0.111 billion, respectively.

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2. Shanghai Orient Securities Capital Investment Co., Ltd.

Address: 36/F, Building 2, No. 318 South Zhongshan Road, Huangpu District, Shanghai, China

Date of establishment: February 8, 2010

Registered capital: RMB4.0 billion

Equity interests held by the Company: 100%

Legal representative: Jin Wenzhong

Principal businesses: establishment of direct investment funds, and equity investments to enterprises; or invest in other investment funds related to equity investments; provide clients with financial advisory services related to equity investments; other businesses approved by the China Securities Regulatory Commission.

As at December 31, 2018, the total assets and net assets of Shanghai Orient Securities Capital Investment Co., Ltd. amounted to RMB5.165 billion and RMB4.542 billion, respectively. In 2018, its operating income and net profit amounted to RMB0.951 billion and RMB0.563 billion, respectively.

3. Orient Finance Holdings (Hong Kong) Limited

Address: 28/F to 29/F, No. 100 Queen’s Road Central, Central, Hong Kong

Date of establishment: February 17, 2010

Registered capital: HKD2.1 billion

Equity interests held by the Company: 100%

Chairman: Yang Yucheng

Principal businesses: investment holdings, as well as conducting brokerage business, corporate financing, assets management businesses, and other businesses through the establishment of various subsidiaries as regulated by the Hong Kong Securities and Futures Commission in accordance with the Securities and Futures Ordinance.

As at December 31, 2018, the total assets and net assets of Orient Finance Holdings (Hong Kong) Limited amounted to HKD18.041 billion and HKD1.381 billion, respectively. In 2018, the operating income and net profit amounted to HKD-0.205 billion and HKD-0.416 billion, respectively.

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4. Offshore BVI Vehicles

The offshore BVI vehicles determined by the Company based on financing requirements.

III. OPINIONS OF THE BOARD

The independent opinions issued by the independent directors of the Company with respect to the matters are listed as below: the Company estimates the guarantees which might be provided by the Company to its subsidiaries or provided among its subsidiaries during the validity period of authorization, both due to the Company’s needs under its business plan and goal of minimizing financing costs. The aforementioned projection complies with relevant requirements of the relevant laws and regulations, the articles of association of the Company, and the measures to Manage External Guarantees of the Company, the decision-making procedures are lawful and the aforementioned intragroup guarantees are approved.

IV. ACCUMULATED AMOUNT OF INTRAGROUP GUARANTEES

As at the disclosure date of this announcement, the total intragroup guarantee amount of the Company and its holding subsidiaries is RMB7.507 billion, accounting for 14.51% of the audited net assets of the Company as of December 31, 2018.

There are no overdue guarantees of the Company and its holding subsidiaries.

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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