PegBio Co., Ltd. — Proxy Solicitation & Information Statement 2018

May 25, 2018

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 licensed securities dealer, registered institution in securities, bank manager, solicitor, certified public accountant or other professional adviser.

If you have sold or transferred all your shares in CMBC Capital Holdings Limited, you should at once hand this circular to the purchaser or the transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the 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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CMBC CAPITAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1141)

MAJOR TRANSACTION IN RELATION TO SUBSCRIPTION OF SHARES IN SEGREGATED PORTFOLIO OF SEGREGATED PORTFOLIO COMPANY

Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed “Definition” in this circular. A letter from the Board is set out on pages 5 to 14 of this circular.

25 May 2018

CONTENTS

Pages	Pages
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
APPENDIX I – FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . .	15
APPENDIX II – GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .	19

– i –

DEFINITIONS

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

• “associate”

• has the meaning ascribed to it under the Listing Rules

• “Board” the board of Directors

• “Borrower” Delta Link Holdings Limited, an international business company incorporated in the British Virgin Islands with limited liability

• “China Minsheng”

• China Minsheng Banking Corp., Ltd. (中國民生銀行 股份有限公司), a joint stock limited company incorporated in the PRC with limited liability, the H shares of which are listed on the Stock Exchange (stock code: 1988) and the A shares of which are listed on the Shanghai Stock Exchange (stock code: 600016)

• “China Minsheng Group” China Minsheng and its subsidiaries, other than the members of CMBCI Group and the Group

• “CMBC Investment”

• CMBC International Investment Limited (民銀國際 投資有限公司), a company incorporated in the British Virgin Islands, and a controlling shareholder of the Company

• “CMBCI”

• CMBC International Holdings Limited (民生商銀國 際控股有限公司), a company incorporated in Hong Kong with limited liability and a controlling shareholder of the Company

• “CMBCI Group”

• CMBCI and its subsidiaries, including CMBC Investment and excluding the members of the Group

• “Company”

• CMBC Capital Holdings Limited (民銀資本控股有限 公司), a company incorporated in Bermuda with limited liability, the issued shares of which are listed on the Stock Exchange (stock code: 1141)

– 1 –

DEFINITIONS

• “connected person(s)” has the meaning ascribed to it under the Listing Rules

• “controlling shareholder” has the meaning ascribed to it under the Listing Rules

• “Director(s)” the directors of the Company

• “Group” the Company and its subsidiaries

• “Guarantor” an individual who, at the date of this circular, is the sole shareholder of the Borrower

• “HK Listco” a company incorporated in the Cayman Islands with limited liability whose shares are listed on the Stock Exchange. To the best of the knowledge of the Directors, the HK Listco is principally engaged in the real estate business in the PRC

• “HK$” Hong Kong Dollars(s), the lawful currency of Hong Kong

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

• “Independent Third Party(ies)” any person(s) who is/are not connected person(s) of the Company

• “Investment”

• the investment made by the Company under the Subscription Agreement

• “Latest Practicable Date” 23 May 2018, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange, as amended, supplemented or otherwise modified from time to time

• “Loan”

• the term loan facility in the sum of HK$400,000,000 made available under the Loan Agreement

– 2 –

DEFINITIONS

• “Loan Agreement” the loan agreement entered into between the Segregated Portfolio Company and the Borrower on 15 March 2018 for a loan facility of HK$400,000,000

• “Manager” China Urbanization Capital Limited, a company incorporated under the laws of the Cayman Islands with limited liability

• “PPM” the private placement memorandum of the Segregated Portfolio Company dated 3 November 2017 (as supplemented by an appendix in respect of the Segregated Portfolio Company dated 15 March 2018 and amended by a side letter agreement dated 15 March 2018)

• “PRC” the People’s Republic of China, for the purpose of this circular only, excluding Hong Kong, Macau Special Administrative Region of the PRC and Taiwan

• “regulated activity(ies)”

• has the meaning ascribed to it under the SFO

• “Securing Party”

• “Segregated Portfolio”

• the Borrower, the Guarantor, or any other person providing the relevant type of security or guarantee in favour of the Segregated Portfolio Company as security for the obligations under the Loan Agreement, and collectively the “ Securing Parties ” New China OCT Fund 2 Segregated Portfolio of the Segregated Portfolio Company

• “Segregated Portfolio Company” or “Lender”

• New China OCT Fund SPC, an exempted company incorporated with limited liability and registered as a segregated portfolio company under the laws of Cayman Islands

• “SFO”

• the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time

– 3 –

DEFINITIONS

“Share(s)” ordinary share(s) of the Company with a nominal value of HK$0.01 each “Shareholder(s)” holders of the Share(s) “Stock Exchange” The Stock Exchange of Hong Kong Limited “Subscription Agreement” the subscription agreement dated 15 March 2018 entered into between the Company and the Segregated Portfolio Company in relation to the subscription of certain Class A shares of the Segregated Portfolio “%” per cent.

– 4 –

LETTER FROM THE BOARD

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CMBC CAPITAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1141)

Executive Directors : Mr. Li Jinze Mr. Ding Zhisuo Mr. Ng Hoi Kam

Registered Office : Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Non-executive Directors :

Mr. Ren Hailong Mr. Liao Zhaohui

Independent non-executive Directors : Mr. Lee, Cheuk Yin Dannis Mr. Wu Bin Mr. Wang Lihua

Head Office and Principal Place of Business Units 6601A and 6607-6608 Level 66 International Commerce Centre 1 Austin Road West Kowloon Hong Kong

25 May 2018

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION IN RELATION TO SUBSCRIPTION OF SHARES IN SEGREGATED PORTFOLIO OF SEGREGATED PORTFOLIO COMPANY

I. INTRODUCTION

Reference is made to the announcement of the Company dated 15 March 2018 in relation to the Investment.

On 15 March 2018, the Company entered into the Subscription Agreement with the Segregated Portfolio Company, pursuant to which the Company has agreed to subscribe for 300,000 Class A shares in the Segregated Portfolio at a total consideration of HK$300,000,000. The Segregated Portfolio is managed by the Manager. The investment objectives of the Segregated Portfolio are set out in the section headed “Investment Objectives and Strategies” of this circular.

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LETTER FROM THE BOARD

As one or more of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the Investment exceed(s) 25% but are less than 100%, the entering into of the Subscription Agreement and the transactions contemplated thereunder constitute a major transaction for the Company under Chapter 14 of the Listing Rules and are subject to the reporting, announcement, circular and shareholders’ approval requirements.

The Company has obtained written Shareholders’ approval for the Investment in accordance with Rule 14.44 of the Listing Rules from CMBC Investment, which is a controlling shareholder of the Company beneficially interested in approximately 60.22% of issued share capital of the Company as at the date of this circular. Pursuant to Rule 14.44 of the Listing Rules, the written approval from CMBC Investment is accepted in lieu of holding a general meeting for approval of the Subscription Agreement and the transactions contemplated thereunder.

The purpose of this circular is to provide the Shareholders with the information in relation to the Investment and other information prescribed by the Listing Rules.

II. THE SUBSCRIPTION AGREEMENT

On 15 March 2018, the Company entered into the Subscription Agreement with the Segregated Portfolio Company. The principal terms of the Investment are set out below.

Principal Amount of the Investment

Pursuant to the Subscription Agreement, the Company has agreed to subscribe for 300,000 Class A shares in the Segregated Portfolio at a total consideration of HK$300,000,000. The Company is not entitled to appoint any director to the board of the Segregated Portfolio Company.

Source of Funding

The amount of the Investment has been determined upon commercial negotiation between the parties to the Subscription Agreement. The Investment will be satisfied by the internal resources of the Group.

Terms of the Segregated Portfolio

The principal terms of the Segregated Portfolio under the PPM are set out below.

Name of the Segregated New China OCT Fund SPC Portfolio Company:

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LETTER FROM THE BOARD

• Name of the Segregated Portfolio:

• New China OCT Fund 2 Segregated Portfolio

• Investment Objective and Strategy:

• The Segregated Portfolio has been established with the objective of investing in the investment project as described below.

Investment Project:

• The Segregated Portfolio plans to provide the Loan to the Borrower to partially repay its existing debts.

• Term of the Segregated Portfolio:

• The Segregated Portfolio will commence from the closing date of the Investment and shall end at the earlier of (i) twelve (12) months from the drawdown date of the Loan and (ii) when the outstanding Loan and any interest payable thereunder are fully paid by the Borrower to the Segregated Portfolio Company and the proceeds from such payment have been fully distributed to the Company in accordance with the PPM, and the term may not be extended without the Company’s prior written consent. The Segregated Portfolio Company shall redeem all Class A shares held by the Company upon the expiry of the term. Prior to the expiry of the term, the Segregated Portfolio Company shall not compulsorily redeem the Class A shares.

• Termination of the Segregated Portfolio:

• In the event the Loan cannot be made available to the Borrower, the directors of the Segregated Portfolio Company may terminate the Segregated Portfolio or compulsorily redeem all outstanding shares of the Segregated Portfolio based on the ground it becomes impractical and inadvisable to continue to manage the Segregated Portfolio.

Investment Restrictions:

• The investments in the Segregated Portfolio shall be subject to the following investment restrictions:

• (i) subscription monies of the Segregated Portfolio shall only be used for the purposes of investment described in the paragraph headed “Investment Project”; and

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LETTER FROM THE BOARD

• (ii) the Segregated Portfolio shall not create any guarantee or be involved in the lending or borrowing with any other parties or investment projects.

Class(es) of Shares:

• The Segregated Portfolio currently offers two classes of shares being Class A shares and Class B shares in the Segregated Portfolio.

Class A shares have priority over Class B shares in relation to the distribution of the dividends of the Segregated Portfolio.

• Expected Return for the 7.5% per annum holders of Class A Shares:

• Transferability of Class A Shares:

• The Segregated Portfolio Company has given its consent to the transfer of Class A shares in the Segregated Portfolio by the Company to any person.

Terms of the Loan Agreement

Date: 15 March 2018 Parties: the Segregated Portfolio Company as lender; and the Borrower as borrower.

Principal Amount: HK$400,000,000

Conditions Precedent: The Loan will be made available to the Borrower on the utilisation date upon satisfaction, among others, of the following conditions precedent:

• i. the Lender has received all documents as required under the Loan Agreement;

• ii. there is no event of default or prospective event of default occurred, is likely to occur, be continuing or would result from the proposed drawdown; and

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LETTER FROM THE BOARD

• iii. the representations and warranties made in the finance documents are true and correct as at the drawdown date with reference to the facts and circumstances then subsisting.

• As advised by the Segregated Portfolio Company, all conditions precedent set out in the Loan Agreement have been satisfied or waived (if applicable) in accordance with the Loan Agreement.

• Drawdown: subject to the satisfaction of the conditions precedent as set out in the Loan Agreement, the Borrower may utilise the Loan from and including 15 March 2018.

Purpose:

• The Loan shall be applied and used by the Borrower for repaying part of the existing debts and shall not be used in any way to facilitate the acquisition of securities listed on any stock exchange and/or the continued holding of those securities, whether or not those or other securities are pledged as security for the Loan and/or applied in such way so as to render the provision of the Loan by the Lender to the Borrower to be within the definition of “securities margin financing” under the SFO.

• Interest rate:

• 9.5% per annum

Repayment:

the Borrower shall repay the indebtedness under the Loan Agreement and the finance documents in full on the date falling 12 months from the drawdown date.

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LETTER FROM THE BOARD

Voluntary Repayment:

• the Borrower may not prepay the Loan or any part thereof during the first nine (9) months from the drawdown date. Thereafter the Borrower shall, with at least three (3) business days’ prior irrevocable written notice to the Lender, be entitled to prepay the outstanding principal of the Loan in whole or in part (but in part, being an amount that reduces the amount of the outstanding principal by a minimum amount of HK$50,000,000 and an integral multiple thereof) together with all interest accrued thereon. Any sum repaid or prepaid by the Borrower herein will not be available for reborrowing under the Loan Agreement.

Event of default:

There shall be an event of default if, among others, any of the following events shall have occurred or is continuing:

• i. any event or circumstance occurs which has or is likely to have a material adverse effect on, inter alia , the business, operations, property, condition (financial or otherwise) or prospects of any of the Securing Parties and the ability of any Securing Party to perform any of its/his obligations under any finance document;

• ii. any of the Securing Parties fails to pay on the due date any amount payable by it pursuant to any of the finance documents;

• iii. any of the undertakings and the covenants in the finance documents is not complied with;

• iv. any corporate action or legal proceedings or other procedure or step is taken for:

• (a) any of the Securing Parties to be adjudicated or found insolvent or bankrupt; or

• (b) the winding-up, liquidation, dissolution, individual voluntary arrangement or bankruptcy of any of the Securing Parties; or

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LETTER FROM THE BOARD

• (c) the appointment of a liquidator, trustee in bankruptcy, receiver, administrator, administrative receiver or similar officer of any of the Securing Parties or of the whole or any part of any of its/his business, undertaking, properties, assets, rights or revenues;

• v. any of the Securing Parties changes or threatens to change the nature or scope of its/his business or suspends or ceases or threatens to suspend or cease to carry on its/his business or, in the reasonable opinion of the Segregated Portfolio Company, a material part thereof;

• vi. the whole or, in the opinion of the Segregated Portfolio Company, a material part of the business, management, undertaking, properties, assets, rights or revenues of, or any share or other ownership interest in, any of the Securing Parties is seized, nationalised, expropriated, compulsorily acquired, taken over, confiscated, forfeited, requisitioned or sequestered or is sold, transferred or otherwise disposed of by or under the authority of any government or governmental body or agency;

• vii. any of the Securing Parties repudiates, or does or causes or permits to be done any act or thing evidencing an intention to repudiate the finance documents;

• viii. there occurs, in the reasonable opinion of the Segregated Portfolio Company, a material adverse change in the financial or operating condition of any of the Securing Parties;

• ix. the trading of the shares of the HK Listco on the Stock Exchange has been suspended for more than ten (10) consecutive trading days without the prior written approval of the Segregated Portfolio Company;

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LETTER FROM THE BOARD

• x. the shares in the HK Listco cease to be listed on the main board of the Stock Exchange for any reason whatsoever;

• xi. the Guarantor dies or becomes of unsound mind.

Security:

the Loan will be secured by, inter alia , the following:

1. a personal guarantee provided by the Guarantor; and

2. charge of certain shares of the HK Listco.

III. REASONS FOR AND BENEFITS OF THE INVESTMENT

The amount of Investment was determined after arm’s length negotiation between the Segregated Portfolio Company and the Company after taking into account of, inter alia , the Group’s available financial resources and business plan. In addition, the Directors consider that the security provided to secure the repayment of the Loan was sufficient to mitigate the risk of default, after taking into consideration, inter alia , that the value of the shares in the HK Listco pledged to the Segregated Portfolio Company exceeded HK$990 million (or more than two times of the Loan), determined with reference to the closing price of the shares of HK Listco as at the date of the Loan Agreement.

Taking into account the principal activities of the Group, the Directors consider that entering into the Subscription Agreement and the transactions contemplated thereunder are in the ordinary and usual course of business of the Group.

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LETTER FROM THE BOARD

The Subscription Agreement has been entered into based on the Company’s development strategy. Taking into account the return from the participation of the Segregated Portfolio, the management team of the Segregated Portfolio Company and based on the result of the credit assessments made on the financial strength and repayment ability of the Borrower and Guarantor and the securities provided to secure the repayment of the Loan, the Directors consider that the terms of the Subscription Agreement are fair and reasonable, the entering into the Subscription Agreement and the transactions contemplated hereunder are in the interests of the Company and its Shareholders as a whole.

IV. INFORMATION OF THE GROUP

As at the date of this circular, the Group is principally engaged in the securities business, investment and financing and asset management and advisory business.

V. INFORMATION OF THE SEGREGATED PORTFOLIO COMPANY, THE BORROWER, THE MANAGER AND THE GUARANTOR

To the best of the knowledge, information and belief of the Directors, as at the date of this circular:

1. The Borrower is an international business company incorporated with limited liability in the British Virgin Islands. It is a holding company principally engaged in the hotel and property development industry through its subsidiaries via a joint venture arrangement with operations primarily based in the People’s Republic of China;

2. The Segregated Portfolio Company is an exempted company incorporated with limited liability and registered as a segregated portfolio company under the laws of Cayman Islands on 3 November 2017;

3. The Manager is a company incorporated under the laws of the Cayman Islands with limited liability; and

4. The Guarantor, an individual, is the sole shareholder of the Borrower.

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, each of the Borrower, the Segregated Portfolio Company, the Manager, the Guarantor and their respective ultimate beneficial owners is an Independent Third Party as at the date of this circular.

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LETTER FROM THE BOARD

VI. LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the Investment exceed(s) 25% but are less than 100%, the entering into of the Subscription Agreement and the transactions contemplated thereunder constitute a major transaction for the Company under Chapter 14 of the Listing Rules and are subject to the reporting, announcement, circular and shareholders’ approval requirements.

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, no Shareholder has a material interest in the Subscription Agreement and the transactions contemplated thereunder and accordingly, no Shareholder or its/his associate(s) is required to abstain from voting if the Company were to convene a general meeting for approving the Subscription Agreement and the transactions contemplated thereunder.

The Company has obtained written Shareholders’ approval for the Investment in accordance with Rule 14.44 of the Listing Rules from CMBC Investment, which is a controlling shareholder of the Company beneficially interested in approximately 60.22% of issued share capital of the Company as at the date of this circular. Pursuant to Rule 14.44 of the Listing Rules, the written approval from CMBC Investment is accepted in lieu of holding a general meeting for approval of the Subscription Agreement and the transactions contemplated thereunder.

VII. RECOMMENDATION

Although no general meeting will be convened, the Board considers that the Investment was entered into on normal commercial terms and the terms of the Investment are fair and reasonable and are in the best interests of the Company and the Shareholders as a whole. Accordingly, if a general meeting were convened for approving the Investment thereunder, the Board would have recommended the Shareholders to vote in favour of the Investment.

VIII. ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices I and II to this circular.

Yours faithfully, By order of the Board CMBC Capital Holdings Limited Li Jinze Chairman

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FINANCIAL INFORMATION

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

The Company is required to set out in this circular the financial information for each of the last three financial years ended 31 December 2017 with respect to the profits and losses, financial record and position, set out as a comparative table and the latest published audited statement of financial position together with the notes on the annual accounts for the last financial year for the Group.

The audited consolidated financial statements of the Group for the nine months ended 31 December 2017 are set out in pages 68 to 179 of the annual report 2017 of the Company which was posted on 27 April 2018 on the Stock Exchange’s website (www.hkexnews.hk) and the Company’s website (http://www.cmbccap.com). It can be accessed at: http://www.hkexnews.hk/listedco/listconews/SEHK/2018/0427/LTN201804272082.pdf

The audited consolidated financial statements of the Group for the year ended 31 March 2017 are set out in pages 54 to 145 of the annual report 2017 of the Company which was posted on 28 June 2017 on the Stock Exchange’s website (www.hkexnews.hk) and the Company’s website (http://www.cmbccap.com). It can be accessed at: http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0628/LTN20170628021.pdf

The audited consolidated financial statements of the Group for the year ended 31 March 2016 are set out in pages 37 to 119 of the annual report 2016 of the Company which was posted on 21 July 2016 on the Stock Exchange’s website (www.hkexnews.hk) and the Company’s website (http://www.cmbccap.com). It can be accessed at: http://www.hkexnews.hk/listedco/listconews/SEHK/2016/0721/LTN20160721497.pdf

2. INDEBTEDNESS

As at the close of business on 31 March 2018 being the latest practicable date for the purpose of ascertaining the indebtedness of the Group prior to the printing of this circular, the Group had outstanding credit borrowings of approximately HK$5,798.0 million, details of which are as follows:

Borrowings:

Notes payable with nominal value of HK$150.0 million, unsecured and unguaranteed Bank loan from a branch of the ultimate holding company, unsecured and unguaranteed Loan from intermediate holding company, unsecured and unguaranteed Financial assets sold under repurchase agreements, secured and guaranteed Total	At 31 March 2018 HK$ million (unaudited) 148.6 494.5 4,149.5 1,005.4
	5,798.0

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FINANCIAL INFORMATION

APPENDIX I

Pledged Assets

As at 31 March 2018, borrowings under financial assets sold under repurchase agreements are fully guaranteed by the Company and secured by the underlying assets that consist of certain of the Group’s financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income with total carrying amounts of HK$1,709.7 million.

Save as aforesaid or as otherwise disclosed herein, and apart from intra-group liabilities, as at the close of business on 31 March 2018, the Group did not have any issued and outstanding, or committed, loan capital, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptable credits, debentures, mortgages, charges, hire purchase commitments, guarantees or other material contingent liabilities.

3. WORKING CAPITAL

Taking into account the effect of the participation in the Investment and the financial resources available to the Group and in the absence of unforeseen circumstances, the Directors are of the opinion that the Group will have sufficient working capital for at least twelve months from the date of this circular.

4. FINANCIAL AND TRADING PROSPECTS

The Company intends to continuously enhance profitability by offering a one-stop securities and investment banking solution encompassing cross-border and innovative financial products and services. In particular, the Group intends to, inter alia :

• (1) further expand its loan and financing business by offering more diversified structured finance services mainly targeting on high-profile private enterprise customers in the comprehensive health, mass consumption, emerging technology and featured manufacturing industry (the “Target Clients”) thereby generating stable revenue stream, as well as facilitating the rapid development of the Group’s merger and acquisition advisory and sponsor services, debt and equity underwriting business as well as asset management business;

• (2) further strengthen its brokerage service capability. In particular, the Group intends to steadily develop its brokerage services by further optimising the related IT system as well as leveraging on the established sales network and massive client base of China Minsheng;

• (3) commence and expand the corporate finance advisory business. In particular, the Group intends to establish its own client base for its sponsor business by assisting the Target Clients to go listing on the Stock Exchange. In addition, surrounding “One Belt and One Road Initiatives”, the Group also intends to provide the all-round investment banking services to those PRC domestic enterprises which plan to expand its business into those “One Belt and One Road” countries or jurisdictions;

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APPENDIX I

FINANCIAL INFORMATION

• (4) further develop its asset management business. Leveraging on the extensive client base of the Group and China Minsheng, the Group intends to enrich its asset management product portfolio by offering diversified asset management services, as well as to attract higher net worth clients including listed companies and their senior management; and

• (5) consider to further develop the Group’s business through investment in or acquisition of suitable companies and business, when opportunities arise. As at the date of this circular, the Group did not have any concrete plan to make any acquisition. The Group intends to strengthen its profitability and optimise its asset structure, through pre-IPO investments in high profile enterprises in Great China area. The Company also considers to acquire the companies and business which may create synergy with the Group and China Minsheng’s business. Although the Group currently does not have any specific acquisition plan, the Group will closely monitor the development trend in different markets such as Hong Kong, Europe and North-East Asia for its future globalised development. The Group will also look for potential acquisition targets with team advantage, profitability and sustainable growth.

On the whole, the Group will continue to implement the “one-body two-wings” strategy. “One-body” refers to the structural financing services provided by the Group. Benefiting from its bank-owned background, the Group is able to provide full-spectrum services (such as corporate advisory and consultation services) and one-stop solutions to clients with different funding requirements. “Two-wings” refers to the Group’s security business and asset management services. Leveraging on the development of “one-body” structural financing services, the Group is expected to achieve mutual growth in its security business and asset management business.

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FINANCIAL INFORMATION

APPENDIX I

5. EFFECT OF THE PARTICIPATION IN THE INVESTMENT ON THE EARNINGS AND ASSETS AND LIABILITIES OF THE GROUP

Assets and liabilities

As a result of the Investment made by the Company, it is expected that the “Loans and advances through subscription of the Segregated Porfolio Company” will increase, while the corresponding financial effects will be reflected by way of a decrease in “cash and cash equivalents” and/or an increase in “borrowings”. Given these financial effects, the Directors are of the view that the Company’s Investment will not have any material financial effects on the net asset value of the Group.

Earnings

Since the interest income will be received by the Company for its subscription of the Segregated Portfolio Company, the earnings of the Group will increase by an amount equivalent to such income arising from such subscription in the relevant period. On the other hand, interest expenses and other fees are to be paid by the Company for its subscription, which will decrease the earnings of the Group by an amount equivalent to such expenses. Given these financial effects, the Directors expect that there will be no significant adverse impact on the Group’s consolidated profit or loss account.

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GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. INTERESTS AND SHORT POSITIONS OF DIRECTORS AND CHIEF EXECUTIVE

As at the Latest Practicable Date, none of the Directors or chief executive of the Company (and their respective associate(s)) had or was deemed to have any interests or short positions in the Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are deemed or taken to have under such provisions of the SFO) or which were required, pursuant to section 352 of the SFO to be entered into the register referred to therein or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules, to be notified to the Company and the Stock Exchange.

3. COMPETING INTERESTS

China Minsheng is principally engaged in commercial and retail banking business providing corporate and personal banking, treasury business, finance leasing, asset management and other financial services but holds licenses to carry out type 1 (dealing in securities) and type 4 (advising on securities) regulated activities through its Hong Kong Branch. Neither the Company nor its subsidiaries are licensed to carry out commercial banking activities and hence China Minsheng does not compete with the Company in respect of commercial banking activities. As such, the Directors expect immaterial competition from China Minsheng Hong Kong Branch, and even if there is competition, it will be normal market competition and will not affect the interest of the Shareholders as a whole, as (i) the Company will be the principal platform for China Minsheng to conduct securities and investment banking businesses in Hong Kong; (ii) the principal business of China Minsheng Hong Kong Branch is commercial banking; (iii) the management of China Minsheng Hong Kong Branch is not involved in the management of the Company or its subsidiaries, nor is it involved in the management of CMBCI Group; (iv) the Company will have an independent and separate team conducting its type 1 (dealing in securities) and type 4 (advising on securities) regulated activities; and (v) China Minsheng Hong Kong Branch has no securities brokerage, futures or asset management businesses.

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APPENDIX II

GENERAL INFORMATION

CMBCI Group is principally engaged in investments and investment holding. It is expected that CMBCI Group will not principally engage in securities and investment banking businesses with Independent Third Party which will be the principal businesses of the Group. Therefore, all businesses involving regulated activities will principally be undertaken by the Group.

As such, the Directors are of the view that there is immaterial competition from CMBCI Group, and even if there is competition, it will be on normal market competition and will not affect the interest of the Shareholders.

4. DIRECTORS’ COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors nor his close associates is and was interested in any business which competes or may compete, either directly or indirectly, with the business of the Group.

5. INTERESTS IN THE GROUP’S ASSETS OR CONTRACTS OR ARRANGEMENTS SIGNIFICANT TO THE GROUP

As at the Latest Practicable Date, none of the Directors had any interest in any assets which have been, since 31 December 2017 (being the date to which the latest published audited accounts of the Company were made up), acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement, subsisting at the date of this circular, which is significant in relation to the business of the Group.

6. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

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7. MATERIAL ADVERSE CHANGE

As the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2017, the date to which the latest published audited consolidated financial statements of the Group were made up.

8. MATERIAL CONTRACTS

The following contracts, not being contracts entered into in ordinary course of business of the Group, have been entered into by the members of the Group within two years preceding the date of the this circular which are, or maybe, material:

• (a) the conditional placing agreement entered into between the Company and Skyway Securities Investment Limited dated 3 May 2016 in relation to placing of up to 2,550,000,000 placing shares at the placing price of HK$0.18 per placing Share in a best effort basis and subsequently terminated on 31 July 2016.

• (b) the conditional agreement dated 3 May 2016 and entered into between the Company and Capital Union Inc., in respect of the subscription of 1,450,000,000 new shares of the Company at consideration of HK$261,000,000 settle by way of set off against the total outstanding principal amount of the promissory notes of HK$285,000,000.

• (c) the conditional agreement dated 28 November 2016 and entered into between Celestial Lodge Limited and Gold Mission Limited in respect of the disposal of the entire equity interests of Sky Eagle Global Limited by Gold Mission Limited to Celestial Lodge Limited, together with the supplemental agreement dated 7 March 2017.

• (d) the conditional subscription agreement dated 7 March 2017 and entered into between the Company as issuer and CMBC International Investment Limited and Brilliant Decent Limited as subscribers in relation to the subscription for a total of 26,950,000,000 new Shares issued by the Company.

• (e) the acquisition agreement dated 27 July 2017 entered into between the Company and CMBCI for the entire issued share capital of CMBC Capital Finance Limited.

• (f) the acquisition agreement dated 27 July 2017 entered into between the Company and CMBCI for the entire issued share capital of CMBC International Capital Limited.

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9. LITIGATION

As at the Latest Practicable Date, none of the members of the Group was engaged in any litigation, or claim of material importance, and no litigation or claim of material importance was known to the Directors to be pending or threatened against any member of the Group.

10. MISCELLANEOUS

• (a) The registered office of the Company is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

• (b) The head office and principal place of business of the Company is located at Units 6601A and 6607-6608, Level 66, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong.

• (c) The company secretary of the Company is Mr. Dong Qizhen, a solicitor qualified in Hong Kong.

• (d) The principal share registrar of the Company and transfer office is MUFG Fund Services (Bermuda) Limited, which is located at 26 Burnaby Street, Hamilton HM11, Bermuda.

• (e) The branch share registrar of the Company in Hong Kong is Tricor Tengis Limited situated at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (f) The English text of this circular shall prevail over the Chinese text for the purpose of interpretation.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours from 9:00 a.m. to 5:00 p.m., at the Company’s principal place of business in Hong Kong at Units 6601A and 6607-6608, Level 66, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong for a period of 14 days (other than Saturdays, Sundays and public holidays) from the date of this circular:

• (a) the memorandum of association and bye-laws of the Company;

• (b) the material contracts referred to under the paragraph headed “Material Contracts” in this Appendix;

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• (c) the annual reports of the Company for the year ended 31 March 2017 and the nine months ended 31 December 2017 together with all notes, certificates or information required by the Companies Ordinance (Chapter 622 of the Laws of Hong Kong), as amended from time to time;

• (d) this circular;

• (e) a circular of the Company dated 10 October 2017; and

• (f) a circular of the Company dated 21 October 2017.

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