Liaoning Port Co., Ltd. — Proxy Solicitation & Information Statement 2015

May 19, 2015

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Dalian Port (PDA) Company Limited*, you should at once hand this circular, together with the accompanying proxy forms and reply slip of the Annual General Meeting and the H Shareholders Class Meeting, to the purchaser or transferee or to the bank, licensed dealer in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

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Dalian Port (PDA) Company Limited[*] 大連港股份有限公司

(a sino-foreign joint stock limited company incorporated in the People’s Republic of China)

(Stock Code: 2880)

PROPOSED SPECIFIC MANDATE TO ISSUE NEW H SHARES AND

PROPOSED CONSEQUENTIAL AMENDMENTS TO THE ARTICLES OF ASSOCIATION

A notice convening the AGM and H Shareholders Class Meeting of the Company to be held at Room 109, PDA Group Building, No. 1 Gangwan Street, Zhongshan District, Dalian City, Liaoning Province, the PRC on Monday, 29 June 2015 at 9:00 a.m., together with the proxy form and reply slip were despatched to you on Thursday, 14 May 2015.

Whether or not you are able to attend the AGM and the H Shareholders Class Meeting, you are requested to read the respective notices of the AGM and the H Shareholders Class Meeting carefully and complete and return the proxy forms in accordance with the instructions printed thereon. The proxy forms should be returned in person or by post not less than 24 hours before the time appointed for the AGM and the H Shareholders Class Meeting or any adjournment thereof to the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited (for H Shareholders) and the Board’s office (for A Shareholders). Completion and return of the proxy forms will not preclude you from attending and voting at the AGM and the H Shareholders Class Meeting or any adjournment thereof in person if you so wish.

If you wish to attend the AGM and the H Shareholders Class Meeting either in person or by proxy, you are required to complete and return the reply slip for the respective meetings to the Board’s office on or before 3:30 p.m. on Tuesday, 9 June 2015.

• The Company is registered as Non-Hong Kong company under Part XI of the previous Companies Ordinance (equivalent to Part 16 of the Companies Ordinance with effect from 3 March 2014) under the English name “Dalian Port (PDA) Company Limited”.

20 May 2015

CONTENTS

	PAGE
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4

– i –

DEFINITIONS

In this circular, the following expressions have the following meanings unless the context requires otherwise:

• “AGM”

• the annual general meeting (including any relevant adjournments) to be convened and held at 9:00 a.m. on Monday, 29 June 2015 at Room 109, PDA Group Building, No. 1 Gangwan Street, Zhongshan District, Dalian City, Liaoning Province, the PRC for the purposes of considering and, including but not limited to, approving the grant of the Specific Mandate, the proposed New H Share Issue, and other related matters;

• “A Share(s)”

• the domestic share(s) in the ordinary share capital of the Company with a nominal value of RMB1.00 each which are listed on the Shanghai Stock Exchange (stock code: 601880);

• “A Shareholder(s)”

• holder(s) of A Shares;

• “A Shareholders Class Meeting”

• the A Shareholders Class Meeting (including any relevant adjournments) to be convened and held at Room 109, PDA Group Building, No. 1 Gangwan Street, Zhongshan District, Dalian City, Liaoning Province, the PRC in the morning immediately following the conclusion of the AGM or its adjournment on Monday, 29 June 2015 (including any relevant adjournments) for the purposes of considering, and if thought fit, approving the grant of the Specific Mandate, the proposed New H Share Issue and other related matters;

• “Announcement”

• the announcement of the Company dated 5 May 2015 relating to the Specific Mandate, the proposed New H Share Issue and other related matters;

• “Articles of Association”

• the articles of association of the Company and its appendices;

• “Board”

• the board of Directors of the Company;

• “Class Meetings”

• A Shareholders Class Meeting and H Shareholders Class Meeting;

• “Company”

• Dalian Port (PDA) Company Limited, a sino-foreign joint stock limited company incorporated in the PRC, the H Shares and A Shares of which are listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange respectively;

• “connected person”

• has the meaning ascribed to it under the Hong Kong Listing Rules;

– 1 –

DEFINITIONS

• “CSRC”

China Securities Regulatory Commission;

• “Dalian SASAC”

• State-owned Assets Supervision and Administration Commission of the People’s Government of Dalian;

• “Directors” the directors of the Company;

• “H Share(s)”

• the overseas-listed share(s) 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 (stock code: 2880);

• “H Shareholder(s)”

• holder(s) of H Shares;

• “H Shareholders Class Meeting”

• the H Shareholders Class Meeting (including any relevant adjournments) to be convened and held at Room 109, PDA Group Building, No. 1 Gangwan Street, Zhongshan District, Dalian City, Liaoning Province, the PRC in the morning immediately following the conclusion of the A Shareholders Class Meeting or its adjournments on Monday, 29 June 2015 for the purposes of considering, and if thought fit, approving the grant of the Specific Mandate, the proposed New H Share Issue and other related matters;

• “HK$”

• Hong Kong dollar, the lawful currency of Hong Kong;

• “Hong Kong” the Hong Kong Special Administrative Region of the People’s Pepublic of China;

• “Hong Kong Listing Rules”

• the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited;

• “Hong Kong Stock Exchange”

• The Stock Exchange of Hong Kong Limited;

• “Latest Practicable Date”

• 15 May 2015, being the latest practicable date before printing of this circular for the purpose of ascertaining information for inclusion in this circular;

• “Listing Committee”

• the Listing Committee of the Hong Kong Stock Exchange;

• “New H Shares” the maximum number of 1,475,400,000 H Shares proposed to be issued through exercising the Specific Mandate;

• “New H Share Issue” subject to fulfilment of certain conditions stated in this circular, the issue of the New H Shares by way of placing through exercising the Specific Mandate, if granted;

– 2 –

DEFINITIONS

• “Notice of AGM”

• the notice of AGM despatched to the Shareholders on 14 May 2015;

• “Notice of the A Shareholders Class Meeting”

• the notice of the A Shareholders Class Meeting related to the A Shareholders and published on the website of the Shanghai Stock Exchange on 14 May 2015;

• “Notice of the H Shareholders Class Meeting”

• the notice of the H Shareholders Class Meeting despatched to the H Shareholders on 14 May 2015;

• “Notices of Class Meetings”

• the Notice of the H Shareholders Class Meeting and the Notice of the A Shareholders Class Meeting;

• “PRC”

• the People’s Republic of China which, for the purposes of this circular, excludes Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and the Taiwan region;

• “RMB”

• Renminbi, the lawful currency of the PRC;

• “Shareholders” the A Shareholders and the H Shareholders;

• “Shares”

• the A Shares and H Shares of the Company;

• “Specific Mandate”

• to be proposed to grant to the Board (and the person(s) authorized by the Board) by the Shareholders on the AGM and Class Meetings, in order to issue not more than 1,475,400,000 New H Shares in any time during the validity period prescribed in the resolutions set out in the Notice of AGM and the Notices of Class Meetings, representing not more than approximately 138.85% and 33.33% of the total issued H Shares and the total issued Shares of the Company, respectively, as at the Latest Practicable Date; and

• “%”

per cent.

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LETTER FROM THE BOARD

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Dalian Port (PDA) Company Limited[*] 大連港股份有限公司

(a sino-foreign joint stock limited company incorporated in the People’s Republic of China)

(Stock Code: 2880)

Directors: Executive Directors: Hui Kai (Chairman) Xu Song Sun Benye

Registered office: Xingang Commercial Building Dayao Bay Dalian Free Trade Zone PRC

Non-executive Directors: Xu Jian Dong Yanhong Yin Shihui Independent Non-executive Directors: Wan Kam To, Peter Wang Zhifeng Sun Xiyun

Principal place of business in the PRC: Xingang Commercial Building Jingang Road Dalian International Logistic Park Zone Liaoning Province PRC

20 May 2015

To the Shareholders

Dear Sir or Madam,

PROPOSED SPECIFIC MANDATE TO ISSUE NEW H SHARES AND PROPOSED CONSEQUENTIAL AMENDMENTS TO THE ARTICLES OF ASSOCIATION

1. INTRODUCTION

On 5 May 2015, the Company resolved to convene the AGM and the Class Meetings for the grant of the Specific Mandate to the Board (and the person(s) authorized by the Board) and the proposed New H Share Issue pursuant to the Specific Mandate, if granted, and other related matters. On 5 May 2015, the Company published an announcement on the Specific Mandate and the proposed New H Share Issue. On 14 May 2015, the Company despatched the Notice of AGM, attaching a copy of the Announcement dated 5 May 2015 for the purpose of providing you with information on the Specific Mandate and the proposed New H Share Issue, and the Notice of the H Shareholders Class Meeting together with the proxy forms. The AGM and the Class Meetings are to be held at 9:00 a.m. on Monday, 29 June 2015 at Room 109, PDA Group Building, No. 1 Gangwan Street,

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LETTER FROM THE BOARD

Zhongshan District, Dalian City, Liaoning Province, the PRC. The purpose of this circular is to provide/supplement you with information on the resolutions relating to the Specific Mandate and the proposed New H Share Issue and other related matters proposed at the AGM and the H Shareholders Class Meeting.

2. PROPOSAL TO ISSUE NEW H SHARES

(1) Class of Shares to be issued

H Shares. Unless otherwise required by the applicable PRC laws and regulations and the Articles of Association, the New H Shares proposed to be issued should rank pari passu with the existing issued A Shares and H Shares in all respects. As at the Latest Practicable Date, there is no applicable PRC laws and regulations or provision under the Articles of Association to the effect that the New H Shares proposed to be issued would be affected in its pari passu ranking with the A Shares and H Shares. The Company undertakes that it will make necessary announcement and comply with the requirements under the Hong Kong Listing Rules if there is any applicable PRC laws or regulations which may alter the pari passu ranking of A Shares and H Shares.

(2) Time of issuance

The Company will select an appropriate time and issuance window within the validity period of the resolutions to be passed at the AGM and the Class Meetings to proceed the New H Share Issue, which will be determined by the Board with reference to the international capital market conditions, as well as the progress of review by the domestic and foreign administrative and/or regulatory authorities.

(3) Method of issuance

The proposed New H Share Issue will be carried out by way of private placing on a best effort basis.

The Company is currently in liaison with GF Capital (Hong Kong) Limited and GF Securities (Hong Kong) Brokerage Limited in relation to their appointment by the Company as its financial adviser and its sole placing agent, respectively for the proposed New H Share Issue. The parties are expected to sign formal agreements in due course but details such as the estimated transaction costs and commission fees are yet to be finalized. The Company undertakes that it will comply with the requirements under the Hong Kong Listing Rules upon finalizing the financial adviser, placing agent and the principal terms of the placing arrangement.

– 5 –

LETTER FROM THE BOARD

(4) Target placees

Upon the grant of the Specific Mandate, the Board may proceed to place the New H Shares to not more than 10 qualified institutional, corporate and individual and other investors, who will be independent of and not connected with any director, supervisor, chief executive or substantial shareholders of the Company or any of its subsidiaries or any of their respective associates. The Company undertakes that it will make necessary announcement and comply with the requirements under Rule 13.28 of the Hong Kong Listing Rules once the placees are finalised.

(5) Pricing mechanism

The New H Shares will be issued at a price to be determined by the Board after taking into account the interests of existing Shareholders, investors’ capabilities and the potential issuance risks, as well as the market practice and applicable regulatory requirements, and with reference to the capital market conditions and the valuations of comparable companies at the time when the Company issues the New H Shares, provided that the issue price will be not lower than 80% of the average closing price of the H Shares as quoted on the Hong Kong Stock Exchange over the last five trading days prior to the date of determining such issue price. In any event, the determination of the issue price of the New H Shares will comply with all applicable laws and regulations in the PRC and take into account the relevant market practice, including but not limited to the condition that such issue price shall not be lower than the audited net asset value per Share of the Company as at 31 December 2014, i.e. RMB3.10 (or HK$3.875, assuming an exchange rate for HK$: RMB of 1.25) per Share.

(6) Method of subscription

The New H Shares are to be subscribed by the investors in cash, and issued and allotted in accordance with the terms of the subscription agreements to be entered into between the Company and the individual investors or be placed in accordance with the terms of the placing agreement to be entered into between the Company and the sole placing agent in relation to the proposed New H Share Issue.

(7) Size of issuance

The Company will issue not more than 1,475,400,000 New H Shares, representing not more than approximately 138.85% and approximately 33.33% of the total issued H Shares and the total issued Shares of the Company, respectively, as at the Latest Practicable Date or approximately 25.00% of the total issued Shares of the Company after the issuance of the proposed New H Share Issue (assuming the maximum of 1,475,400,000 New H Shares are issued).

Before the proposed New H Share Issue, the total issued Shares of the Company is 4,426,000,000 Shares, of which the number of H Shares is 1,062,600,000 Shares; immediately following the completion of the New H Share Issue (assuming the maximum of 1,475,400,000 New H Shares are issued), the total issued Shares of the Company will be 5,901,400,000 Shares, of which the number of H Shares will be 2,538,000,000 Shares, while the number of A Shares will remain 3,363,400,000 Shares.

– 6 –

LETTER FROM THE BOARD

(8) Accumulated profits

After deducting the proposed distributable profits to be approved at the AGM of the Company by way of resolution before the issue of New H Shares, any accumulated undistributed profits of the Company shall belong to all the Shareholders of the Company, including the holder of the New H Shares upon the completion of issue of the New H Shares in proportion to their shareholding.

(9) Use of proceeds

The proceeds of the proposed New H Share Issue, after deducting relevant expenses, will be used as follows:

• (i) approximately 25% will be used for the development of the oil business of the Company;

• (ii) approximately 35% will be used for the investment in or optimization and integration of domestic and foreign ports by the Company, which is in line with the “One belt, One road” strategy, so as to accelerate the strategic layout of the hinterland of the Company and promote the internationalization of the Company;

• (iii) approximately 10% will be used for the establishment of “Internet + Port” of the Company, of which the Company will use advanced technologies, such as the internet of things, big data and cloud computing, in the application layout in each business segment of the ports, so as to promote the establishment of the intelligent port, intelligent port informationalization application system, cross-border e-commerce integrated service platform, as well as to enhance the intelligence level of the port operation management platform and the port logistics operating platform of the Company and improve the customer services capability of the Company;

• (iv) approximately 20% will be used for the construction of the logistics facilities for other professional ports of the Company; and

• (v) approximately 10% will be used for replenishing the working capital of the Company.

(10) Validity period of the resolutions

The resolutions relating to the Specific Mandate set out in the notices of AGM and H Shareholders Class Meeting will be valid for 12 months, commencing from the date of passing of the relevant resolutions at the AGM and the H Shareholders Class Meeting.

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LETTER FROM THE BOARD

3. PROPOSED SPECIFIC MANDATE TO ISSUE NEW H SHARES

On 5 May 2015, the Board resolved to convene the AGM and the Class Meetings for the grant of the proposed Specific Mandate to the Board, the approval of the proposed New H Share Issue and other relevant matters. The major terms of the proposed Specific Mandate and the New H Share Issue are as follows:

(1) Authorization of consequential amendments to the Articles of Association upon completion of the proposed New H Share Issue

The existing registered capital of the Company is set out in the Articles of Association. Upon completion of the proposed New H Share Issue, the number of H Shares in issue, the registered capital and the capital structure of the Company will change. Under the Company Law of the PRC and the Articles of Association, any increase in the registered capital and any material changes to the Articles of Association are subject to the approval of the Shareholders. The Board intends to seek the grant of an authority by the Shareholders at the AGM and the Class Meetings to make necessary consequential amendments to the Articles of Association to the registered capital and capital structure of the Company subsequent to completion of the proposed New H Share Issue and to apply for all necessary approvals and make all necessary registration and filing procedures with the relevant authorities in relation to such amendments and to deal with other matters in relation to the implementation of the Shareholders’ and the Board’s resolutions.

Following the completion of the issue of New H Shares, Article 3, 21 and 25 of the Articles of Association of the Company shall be amended based on the following:

Article	No.	Original provisions	Provisions to be amended
Article	3	On 21 March 2006, upon approval by	On 21 March 2006, upon approval by
		the China Securities Regulatory	the China Securities Regulatory
		Commission (the “CSRC”), the	Commission (the “CSRC”), the
		Company initially issued to the	Company initially issued to the
		public 966,000,000 overseas listed	public 966,000,000 overseas listed
		foreign shares (including the	foreign shares (including the
		over-allotted shares), which were	over-allotted shares), which were
		listed on The Stock Exchange of	listed on The Stock Exchange of
		Hong Kong Limited (the “SEHK”)	Hong Kong Limited (the “SEHK”)
		on 28 April 2006. On 11 November	on 28 April 2006. On 11 November
		2010, upon approval by the CSRC,	2010, upon approval by the CSRC,
		the Company initially issued	the Company initially issued
		761,820,000 RMB-denominated	761,820,000 RMB-denominated
		ordinary shares to the public and	ordinary shares to the public and
		conducted a private placement of	conducted a private placement of
		738,180,000 RMB-denominated	738,180,000 RMB-denominated
		ordinary shares to大連港集團有限公 司(Dalian Port Corporation	ordinary shares to大連港集團有限公 司(Dalian Port Corporation
		Limited), which were listed on	Limited), which were listed on
		Shanghai Stock Exchange on 6	Shanghai Stock Exchange on 6
		December 2010.	December 2010.Upon the approval
			by the CSRC, the Company issued
			[Number of shares to be issued
			upon the private placement of H
			Shares] overseas listed foreign
			shares by way of private placement
			on [●], which are listed on the
			SEHK on [●].

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LETTER FROM THE BOARD

Article No. Original provisions

• Article 21

• Upon approval by the competent securities authorities of the State Council, the Company has initially issued 966,000,000 shares (including the over-allotted shares) subsequent to its establishment, representing 33.01% of the total number of ordinary shares that may be issued by the Company.

• The structure of the Company’s share capital was as follow: 2,926,000,000 ordinary shares, in which an aggregate of 1,863,400,000 shares were held by the promoters of the Company, namely 大連港集團有限公 司 (Dalian Port Corporation Limited), 大連融達投資有限責任公司 (Dalian Rongda Investment Company Limited), 大連海泰控股有 限公司 (Dalian Haitai Holdings Company Limited), 大連德泰控股有 限公司 (Dalian Detai Holdings Company Limited) and 大連保稅正 通有限公司 (Dalian Bonded Zhengtong Company Limited), representing 63.68% of the total number of issued ordinary shares of the Company; and 1,062,600,000 shares were held by holders of the overseas listed foreign shares, representing 36.32% of the total number of issued ordinary shares of the Company.

Provisions to be amended

• Upon approval by the competent securities authorities of the State Council, the Company has initially issued 966,000,000 shares (including the over-allotted shares) subsequent to its establishment, representing 33.01% of the total number of ordinary shares that may be issued by the Company.

• The structure of the Company’s share capital was as follow: 2,926,000,000 ordinary shares, in which an aggregate of 1,863,400,000 shares were held by the promoters of the Company, namely 大連港集團有限公 司 (Dalian Port Corporation Limited), 大連融達投資有限責任公司 (Dalian Rongda Investment Company Limited), 大連海泰控股有 限公司 (Dalian Haitai Holdings Company Limited), 大連德泰控股有 限公司 (Dalian Detai Holdings Company Limited) and 大連保稅正 通有限公司 (Dalian Bonded Zhengtong Company Limited), representing 63.68% of the total number of issued ordinary shares of the Company; and 1,062,600,000 shares were held by holders of the overseas listed foreign shares, representing 36.32% of the total number of issued ordinary shares of the Company.

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LETTER FROM THE BOARD

Article No. Original provisions

Upon approval by the competent securities authorities of the State Council, the Company, subsequent to its establishment, issued initially 1,500,000,000 domestically listed domestic shares, representing 33.89% of the total number of ordinary shares that may be issued by the Company. Upon entire 1,863,400,000 outstanding domestic shares’ (not yet listed or traded) being approved for listing and trading on Shanghai Stock Exchange, the structure of the Company’s share capital is as follow: 4,426,000,000 ordinary shares, in which an aggregate of 2,451,580,000 restricted A shares are held by the promoters of the Company, namely 大連港集團有限公 司 (Dalian Port Corporation Limited), 大連融達投資有限責任公司 (Dalian Rongda Investment Company Limited), 大連海泰控股有 限公司 (Dalian Haitai Holdings Company Limited), 大連德泰控股有 限公司 (Dalian Detai Holdings Company Limited) and 大連保稅正 通有限公司 (Dalian Bonded Zhengtong Company Limited), representing 55.39% of the total number of issued ordinary shares of the Company; 492,820,000 restricted A shares and 419,000,000 unrestricted A shares are held by holders of the domestically listed domestic shares (excluding the promoters) representing 20.6% of the total number of issued ordinary shares of the Company; and 1,062,600,000 H shares are held by holders of the overseas listed foreign investor shares, representing 24.01% of the total number of issued ordinary shares of the Company.

The restricted A shares, unrestricted A shares and H shares as mentioned above shall rank pari passu in respect of entitlements to dividends and other forms of distributions without priority or seniority.

Provisions to be amended

Upon approval by the competent securities authorities of the State Council, the Company, subsequent to its establishment, issued initially 1,500,000,000 domestically listed domestic shares, representing 33.89% of the total number of ordinary shares that may be issued by the Company. Upon entire 1,863,400,000 outstanding domestic shares’ (not yet listed or traded) being approved for listing and trading on Shanghai Stock Exchange, the structure of the Company’s share capital is as follow: 4,426,000,000 ordinary shares, in which an aggregate of 2,451,580,000 restricted A shares are held by the promoters of the Company, namely 大連港集團有限公 司 (Dalian Port Corporation Limited), 大連融達投資有限責任公司 (Dalian Rongda Investment Company Limited), 大連海泰控股有 限公司 (Dalian Haitai Holdings Company Limited), 大連德泰控股有 限公司 (Dalian Detai Holdings Company Limited) and 大連保稅正 通有限公司 (Dalian Bonded Zhengtong Company Limited), representing 55.39% of the total number of issued ordinary shares of the Company; 492,820,000 restricted A shares and 419,000,000 unrestricted A shares are held by holders of the domestically listed domestic shares (excluding the promoters) representing 20.6% of the total number of issued ordinary shares of the Company; and 1,062,600,000 H shares are held by holders of the overseas listed foreign investor shares, representing 24.01% of the total number of issued ordinary shares of the Company.

Upon the approval of the securities regulatory authority under the State Council, the Company issued [Number of shares to be issued upon the private placement of H Shares] ordinary shares by way of private placement in 2015, all of which are overseas listed foreign shares.

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LETTER FROM THE BOARD

Article No. Original provisions Article 25 The registered capital of the Company shall be RMB 4,426,000,000.	Provisions to be amended Upon the private placement of H shares of the Company as stated in the preceding paragraph, the shareholding structure of the Company shall be as follows: [Number of shares upon the private placement of H Shares] ordinary shares, of which 3,363,400,000 A Shares held by domestic shareholders, representing [●]% of the total ordinary shares of the Company in issue; and [Number of overseas listed foreign shares upon the private placement of H Shares] H shares held by overseas shareholders, representing [●]% of the total ordinary shares of the Company in issue. The restricted A shares, unrestricted A shares and H shares as mentioned above shall rank_pari passu_in respect of entitlements to dividends and other forms of distributions without priority or seniority. The registered capital of the Company shall be RMB[Amount of capital based on the number of all ordinary shares upon the Private Placement of H Shares].	Provisions to be amended Upon the private placement of H shares of the Company as stated in the preceding paragraph, the shareholding structure of the Company shall be as follows: [Number of shares upon the private placement of H Shares] ordinary shares, of which 3,363,400,000 A Shares held by domestic shareholders, representing [●]% of the total ordinary shares of the Company in issue; and [Number of overseas listed foreign shares upon the private placement of H Shares] H shares held by overseas shareholders, representing [●]% of the total ordinary shares of the Company in issue. The restricted A shares, unrestricted A shares and H shares as mentioned above shall rank_pari passu_in respect of entitlements to dividends and other forms of distributions without priority or seniority. The registered capital of the Company shall be RMB[Amount of capital based on the number of all ordinary shares upon the Private Placement of H Shares].
		shares upon the Private Placement of H Shares].

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LETTER FROM THE BOARD

(2) Other relevant authorization

The Board will seek the Shareholders’ authorization at each of the AGM and the Class Meetings to authorize the Board and the persons delegated by the Board to deal with all the matters in relation to the New H Share Issue with full authority for a term of 12 months following the passing of the relevant resolution(s) at the AGM and/or the Class Meetings. Such matters include but are not limited to:

• (i) execute and submit all the relevant applications, reports and other documents to the relevant PRC and overseas authorities and deal with all the relevant approvals, registration, filing, sanction and permission;

• (ii) be responsible for determining the terms of the proposed New H Share Issue, including the determination of the actual size, issue price (including the price range and final price), timing, method and target placee(s) of the proposed New H Share Issue, the execution, implementation, modification and termination of any agreement, contract or other documents in relation to the exercise of the Specific Mandate to issue New H Shares, making adjustment to the use of proceeds of the proposed New H Share Issue, and any other relevant matter;

• (iii) be responsible for negotiating and entering into subscription agreements with investors or a placing agreement with the sole placing agent in relation to the proposed New H Share Issue, and approving any revision or amendments to such subscription agreements or placing agreement;

• (iv) be responsible for dealing with all the matters in relation to obtaining all the approvals and permissions from the Dalian SASAC, the CSRC, the Hong Kong Stock Exchange and/or any other relevant PRC and overseas authorities in relation to the proposed New H Share Issue;

• (v) depending on the requirements at the time of the issuance, to engage and appoint the financial advisor, the placing agent, PRC and overseas legal advisers and other relevant agencies in relation to the proposed New H Share Issue and enter into engagement or appointment letters and other relevant legal documents;

• (vi) make appropriate amendments to the terms of the proposed New H Share Issue in light of the specific circumstances and pursuant to the approval(s) by the relevant regulatory authorities;

• (vii) execute, implement, amend and complete any document and do any act as necessary and appropriate in relation to the proposed New H Share Issue;

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LETTER FROM THE BOARD

• (viii) approve the publication of relevant announcement(s), circular(s) and notice(s) in relation to the proposed New H Share Issue on the designated information disclosure media of the Company, the websites of the Shanghai Stock Exchange, the Hong Kong Stock Exchange and the Company, respectively, and the submission of relevant forms, files or other documents to the Hong Kong Stock Exchange; and

• (ix) obtain from the Hong Kong Stock Exchange the approval for listing of and permission to deal in all of the New H Shares to be issued and allotted pursuant to the New H Share Issue on the Main Board of the Hong Kong Stock Exchange.

Upon the authorization by the Shareholders at the AGM and the Class Meetings as mentioned above, the Board will delegate such authorization to Mr. Hui Kai (the chairman of the Board and an executive Director), Mr. Xu Song (an executive Director and the general manager) and Mr. Sun Benye (an executive Director and the deputy general manager), severally or jointly, to exercise the authorization granted by the Shareholders to the Board as mentioned above.

As at the Latest Practicable Date, the Company has not made any applications in relation to the proposed New H Share Issue to the CSRC. The Directors consider that a validity period of 12 months for the Specific Mandate is required since there is uncertainty as to the time required to obtain the CSRC approval and that a 12-month period will provide sufficient flexibility to the Directors to select the most suitable timing to determine the issue price and the time of the issuance. Depending on market conditions, the Board may or may not exercise the Specific Mandate, if granted, to issue the New H Shares. If the Board proceeds to issue the New H Shares pursuant to the Specific Mandate, a separate announcement will be made.

After Shareholders’ authorization at each of the AGM and the Class Meetings is obtained, any material change in the authorized use of proceeds or any substantial amendments to the authorized terms of the proposed New H Share Issue will require separate Shareholders’ authorization in respect of each of such change and/or amendments.

4. CONDITIONS TO THE PROPOSED NEW H SHARE ISSUE

The proposed New H Share Issue, upon exercise of the Specific Mandate, if granted, is conditional upon:

• (1) the grant of the proposed Specific Mandate by the Shareholders to the Board having been obtained at the AGM and the Class Meetings;

• (2) the approval of the proposed issue of the New H Shares by the relevant PRC administrative and/or regulatory authorities, including the Dalian SASAC and the CSRC;

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LETTER FROM THE BOARD

• (3) the entering into of subscription agreements between the Company and the individual investors or the placing agreement between the Company and the sole placing agent and such subscription agreements/placing agreement not being terminated in accordance with the terms therein; and

• (4) the Listing Committee granting listing of and permission to deal in all of the New H Shares to be issued and placed.

Under the Hong Kong Listing Rules, no Shareholders are required to abstain from voting at the AGM and the Class Meetings.

5. RANKING OF NEW H SHARES

If, upon the grant of the Specific Mandate, the Board proceeds to place the New H Shares, such New H Shares, when fully paid, will rank pari passu in all respects with the issued H Shares.

6. POSSIBLE CHANGE IN SHARE CAPITAL AND SHAREHOLDING STRUCTURE

For reference and illustrative purposes only, assuming that: (1) the proposed Specific Mandate is granted by the Shareholders at the forthcoming AGM and Class Meetings; (2) the Board exercises the proposed Specific Mandate in full to issue New H Shares; (3) all conditions for the issue and placing of New H Shares have been satisfied; and (4) the maximum of 1,475,400,000 New H Shares are issued, the possible changes in the share capital and shareholding structure of the Company will be as follows:

Class of Shares A Shares – Dalian Port Corporation Limited – Other public holders of A Shares H Shares – Dalian Port Corporation Limited – Other H Shares in issue – New H Shares Total	Before the exercise of the Specific Mandate Number of Shares Approximately (%) 3,363,400,000 75.99 2,308,806,592 52.16 1,054,593,408 23.83 1,062,600,000 24.01 53,000,000 1.20 1,009,600,000 22.81 — — 4,426,000,000 100.00	Immediately after the exercise of the Specific Mandate Number of Shares Approximately (%) 3,363,400,000 56.99 2,308,806,592 39.12 1,054,593,408 17.87 2,538,000,000 43.01 53,000,000 0.90 1,009,600,000 17.11 1,475,400,000 25.00 5,901,400,000 100.00	Immediately after the exercise of the Specific Mandate Number of Shares Approximately (%) 3,363,400,000 56.99 2,308,806,592 39.12 1,054,593,408 17.87 2,538,000,000 43.01 53,000,000 0.90 1,009,600,000 17.11 1,475,400,000 25.00 5,901,400,000 100.00
			100.00

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LETTER FROM THE BOARD

7. PURPOSES AND NECESSITY FOR THE PROPOSED NEW H SHARE ISSUE

• (1) Extend services functions, develop the modern port industry and promote the needs for transformation and upgrade

According to the statistics of the top 10 ports in terms of throughputs in the world in 2014 as published by www.chineseport.cn, the Dalian Port ranked the tenth and has become one of the major port logistics enterprises in the world.

According to the “Guidelines on the Promotion of Transformation and Upgrade of Ports of the Ministry of Transport”, the effective, efficient and convenient modern port service system with strong hub functions, eco-friendly and safe characteristics and intensive development will be basically formed by 2020, so as to meet the requirements of the development of the economy and society of the PRC. The leading role of the port informationalization will become more prominent while the standard basic function will be brought into full play.

In order to ride on the development trend of the transformation and upgrade of the port, enhance the core competencies of the Company and strengthen the sustainable profitability of the Company, the Company has an imminent need to strengthen the establishment of “Internet + Port”, accelerate the application layout of advanced technologies, such as the internet of things, big data and cloud computing, in each business segment of the ports, to promote the establishment of the intelligent port, intelligent port informationalization application system, cross-border e-commerce integrated service platform, to enhance the intelligence level of the port operation management platform and the port logistics operating platform of the Company and to improve the customer services capability of the Company, so as to enable the Company to have a stronger competitive edge in the modern port services industry.

• (2) To cope with the needs of investment in, or optimization and integration of domestic and foreign ports so as to realize the “One belt, One road” strategy

According to the “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road”, the “One Belt, One Road” strategy targets to link up Asia, Europe and Africa, in which the prosperous economy of Southeast Asia is located on one side, while the other side lays the well-developed European economy and the countries in between enjoy enormous development potentials. The economic belt of Silk Road focuses on creating unimpeded transportation from the PRC to Central Asia, Russia and Europe (the Baltic); from the PRC to Central Asia, Western Asia, the Persian Gulf and the Mediterranean; from the PRC to Southeast Asia, Southern Asia and the Indian Ocean. It also explicitly expresses the main approach of the 21st-Century Maritime Silk Road, which is reaching the Indian Ocean from the coastal ports of the PRC through South China Sea and travelling to Europe; and reaching South Pacific Ocean from the coastal ports of the PRC through South China Sea. A safe and efficient transportation route will be constructed with all key ports being used as transit points.

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LETTER FROM THE BOARD

The “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road” clearly puts forward the necessity of enhancing the construction of coastal cities and ports like Dalian in order to open up and implement profound reforms, innovate open economic systems and mechanisms as well as enhancing the efforts in technological innovation, so as to form a new advantage in participating and leading international cooperation and competition and become the pioneer and main force of “One Belt, One Road” strategy, especially in the construction of 21st-Century Maritime Silk Road. As a leading coastal port located at Liaoning Province, Dalian Port possesses the advantage to facilitate the integration of regional economic development with “One Belt, One Road” strategy. On the one hand, it will integrate the domestic port resources through merger and acquisition in order to enhance its regional edge and capitalize on its “leading” position, while on the other hand, it will extend transportation route which connects Asia Pacific, Europe and Central Asia by implementing “One Belt, One Road” strategy, conducting merger and acquisition and operation of international ports so as to ensure rapid development of its business scale.

(3) To enhance its capacity of crude oil reserve for commercial use, explore the needs for crude oil bonded business and futures settlement business

With continuously rapid development of the PRC’s economy, import of oil experiences gradual growth, while reliance on external supply is increasing. Safe oil reserve is strategically important to stable and sustainable economic development. While strategically increasing the nation’s oil reserve, the PRC has made great effort in encouraging enterprises to build up its own reserve for commercial use.

The Company has completed the bonded storage tanks under Phase I of Dalian North Petroleum Logistics Co., Ltd. and the 2,400,000 m[3] crude oil bonded tanks in the Changxing Island. Among which Changxing Island is the oil refinery base approved by China which provides support to the Xizhong Island refinery project. The existing capacity of crude oil bonded tanks of Changxing Island is almost saturated. Given the rapid increase in market demand, the Company needs to further expand the scale of the crude oil bonded tanks so as to develop its oil business. Such expansion will help enhance the Company’s capacity of crude oil reserve for commercial use on the one hand, and, on the other hand, facilitate the development of the related businesses, namely crude oil bonded business and futures settlement business, which have become new focuses of growth for the operation of the Company.

(4) To cope with the needs of higher cargo throughput and larger vessels

In recent years, Dalian Port, being an important port for container transportation along the coastal area of the PRC, has recorded continuous growth in cargo throughout and has faced obvious need for larger vessels. There is increasing demand on its capacity in terms of cargo throughout and adaption to much larger vessels. Besides, in view of the growth momentum of the automobile production and sales market in the PRC, the automobile terminal of Dalian Port has been experiencing rapid growth and results in a monopolistic advantage in the ports located in the northeastern area. Under the policy of vigorously promoting the

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LETTER FROM THE BOARD

pilots of free trade zones by China and launching the parallel import of motor vehicles, the automobile terminal business of Dalian Port is expected to maintain a good upward momentum, it is necessary to conduct further port expansion so as to develop port and logistic business for automobile transportation, especially the site construction for importing and exporting vehicle. As such, the Company intends to finance the construction of professional port and logistic facilities with the proceeds to be raised in order to strengthen the competitiveness of the Company.

(5) To replenish additional working capital of the Company

To capture opportunities for the implementation of “One belt, One road” objective, to optimize the Company’s layout strategy and to uplift the profitability of the Company, sufficient working capital is necessary. In this regard, the Company proposes to replenish its working capital with the proceeds to be raised by the New H Share Issue. It aims to improve its capital structure, strengthen its financial risk resilience, enhance its solvency and expand its financial base. Such proposal is favourable to the steady implementation of its strategies and is to the benefit of the Shareholders as a whole.

The Company is still in the process of assessing the existing and planned developments and/or projects and the timing of the use of proceeds would be subject to a number of factors, such as the timing of obtaining relevant approvals from the relevant government authorities (if required) and the progress of the projects to be undertaken in accordance with the areas of the use of proceeds as referred to in this circular.

8. APPLICATION FOR LISTING

Should the Board, upon obtaining the proposed Specific Mandate, proceed to exercise the proposed Specific Mandate to issue the New H Shares, the Company will apply to the Hong Kong Stock Exchange for the listing of and permission to deal in all of the New H Shares to be issued and placed pursuant to the proposed New H Share Issue.

9. FUND RAISING IN THE PAST TWELVE MONTHS

The Company has not conducted any fund raising activities involving the issue of equity securities within the 12 months immediately prior to the date of this circular.

10. AGM AND CLASS MEETINGS

The grant of the Specific Mandate to the Board (and the person(s) authorized by the Board) and the New H Share Issue will be considered for approval at the AGM and the Class Meetings. Notice of AGM and Notice of the H Shareholders Class Meeting, together with the proxy forms and reply slips for the AGM and the H Shareholders Class Meeting were despatched to you on 14 May 2015.

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LETTER FROM THE BOARD

You are requested to complete and return the proxy form in accordance with the instructions printed thereon, if you wish to appoint a proxy to attend the AGM or the H Shareholders Class Meeting. The proxy form should be returned in person or by post not less than 24 hours before the time appointed for the AGM and the H Shareholders Class Meeting or any adjournment thereof to the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited (for H Shareholders) and the Board’s office of the Company (for A Shareholders). Completion and return of the proxy form will not preclude you from attending and voting at the AGM and the H Shareholders Class Meeting or any adjournment thereof in person if you so wish.

In order to determine the Shareholders who are entitled to attend the AGM and the H Shareholders Class Meeting, the Share register of members of the Company will be closed from Friday, 29 May 2015 to Monday, 29 June 2015 (both dates inclusive), during which no transfer of the Shares will be registered. Shareholders whose names appear on the register of members on 29 May 2015 are entitled to attend and vote at the AGM and the H Shareholders Class Meeting. In order to qualify for attending and voting at the AGM and the H Shareholders Class Meeting, instruments of transfer accompanied by share certificates and other appropriate documents in respect of transfer of the Shares for shareholders whose share transfer has not been registered must be lodged with the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong no later than 4:30 p.m. on Thursday, 28 May 2015.

Pursuant to Rule 13.39(4) of the Hong Kong Listing Rules, the votes made by the Shareholders at the AGM and the Class Meetings will be taken by poll.

11. RECOMMENDATION

The Directors consider that the proposal of the resolutions of the Shareholders relating to the Specific Mandate and the proposed New H Share Issue is beneficial to the Company for further expanding its business in order to seek for larger strategic plans and developments, and is in the interests of the Company and its Shareholders as a whole and accordingly recommend the Shareholders to vote in favour of the resolutions.

Investors should be aware that the proposed Specific Mandate may or may not be approved by the Shareholders at the AGM and the Class Meetings, and the proposed New H Share Issue may or may not proceed. The proposed New H Share Issue is subject to the satisfaction of a number of conditions which are more particularly set out in the section headed “Conditions to the Proposed New H Share Issue” in this circular. There is no assurance that any of the conditions to the proposed New H Share Issue will be fulfilled or that it will be proceeded at all. Therefore, investors should therefore exercise caution when dealing in the H Shares.

By Order of the Board GUI Yuchan LEE Kin Yu, Arthur Joint Company Secretaries

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