DFZQ — Capital/Financing Update 2020

May 25, 2020

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)

VOLUNTARY ANNOUNCEMENT

INDICATIVE ANNOUNCEMENT ON PREPARATION FOR EMPLOYEE STOCK OWNERSHIP PLAN OF H SHARES

The announcement is made by 東方證券股份有限公司 (the “ Company ”) on a voluntary basis.

In order to further establish and improve the benefit sharing mechanism between employees and the Company and enhance the cohesion among employees and competitiveness of the Company, so as to promote the long-term, sustainable and healthy development of the Company, the Company proposes to launch the employee stock ownership plan of H shares (the “ ESOP ”) in accordance with the provisions of the Company Law of the People’s Republic of China (《中華人民共和國公司法》), the Securities Law of the People’s Republic of China (《中華人民共和國證券法》), the Guidance on the Pilot Implementation of Employee Stock Ownership Plan by Listed Companies (《關於上市公司實施員 工持股計劃試點的指導意見》) of the China Securities Regulatory Commission, the Guidelines on Information Disclosure of Employee Stock Ownership Plan of Listed Companies (《上市公司員工持 股計劃信息披露工作指引》) of the Shanghai Stock Exchange and relevant laws, regulations and regulatory documents. Relevant preparations are set out below:

I. SIZE OF THE ESOP

The ESOP is proposed to be financed by the employees of the Company on a voluntary basis. The total number of H shares to be purchased under the ESOP shall not exceed 2% of the total share capital of the Company and the total number of shares entitled under each unit of the ESOP held by an individual employee shall not exceed 0.1% of the total share capital of the Company. The final size shall be subject to the actual capital contribution by the employees and the purchase price of H shares of the Company.

II. SOURCE OF SHARES FOR THE PURPOSE OF THE ESOP

The H shares for the purpose of the ESOP are intended to be obtained through purchase in secondary market and other methods as permitted by laws and regulations.

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III. QUALIFICATIONS FOR THE ESOP

Directors, supervisors, senior management personnel and other employees who have entered into formal labor contracts with the Company and its wholly-owned subsidiaries shall be qualified to participate in the ESOP.

The qualified employees shall participate in the ESOP on a legal, compliance and voluntary basis at their own risks.

IV. RISK ALERT

In order to safeguard the interests of various investors, ensure fair information disclosure and prevent divulging of inside information, the board of directors of the Company will adopt a step-by-step strategy to steadily implement the ESOP.

The ESOP is still at the preparation stage and such arrangements only represent a preliminary plan. The Company will conduct sufficient demonstration on the feasibility of the ESOP and solicit opinions from employees. The commencement and implementation of the ESOP is subject to approval by the board of directors and the general meeting of the Company and it is uncertain whether the ESOP will proceed.

Subject to finalisation of relevant matters of the ESOP, the Company will disclose the draft version of the ESOP in accordance with relevant requirements, perform corresponding approval procedures and fulfill information disclosure obligations in a timely manner.

Investors are advised to keep track of announcement(s) of the Company and stay alert to investment risks.

By order of the Board PAN Xinjun Chairman

Shanghai, PRC May 25, 2020

As at the date of this announcement, the Board comprises Mr. PAN Xinjun and Mr. JIN Wenzhong as executive Directors; Mr. LIU Wei, Mr. WU Junhao, Mr. ZHOU Donghui, Mr. LI Xiang, Ms. XIA Jinghan, Mr. XU Jianguo and Mr. CHEN Xiaobo 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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