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 and the enclosed form of proxy 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.

民銀資本

CMBC CAPITAL HOLDINGS LIMITED

民銀資本控股有限公司

CMBC CAPITAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1141)

(I) MAJOR AND CONTINUING CONNECTED TRANSACTIONS UNDER THE SERVICE AGREEMENT AND

(II) NOTICE OF SPECIAL GENERAL MEETING

Independent Financial Adviser to

the Independent Board Committee and the Independent Shareholders

Gram Capital Limited

嘉林資本有限公司

A notice convening the SGM to be held at 45/F, One Exchange Square, 8 Connaught Place, Central, Hong Kong on Tuesday, 31 December 2024 at 10:00 a.m. is set out on pages 60 to 62 of this circular.

Whether or not you are able to attend and vote at the SGM, you are requested to read the notice and to complete and sign the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company's branch share registrar in Hong Kong, Tricor Tengis Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as possible and in any event not less than forty-eight (48) hours before the time fixed for holding the SGM or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjourned meeting thereof should you so wish and in such event, the form of proxy shall be deemed to be revoked.

13 December 2024

CONTENTS

Pages

DEFINITIONS 1
LETTER FROM THE BOARD 5
LETTER FROM THE INDEPENDENT BOARD COMMITTEE 29
LETTER FROM GRAM CAPITAL 31
APPENDIX I - FINANCIAL INFORMATION 52
APPENDIX II - GENERAL INFORMATION 55
NOTICE OF SPECIAL GENERAL MEETING 60

DEFINITIONS

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

“2021 Service Agreement” the service agreement entered into between the Company (for itself and on behalf of other members of the Group) and China Minsheng (for itself and on behalf of other members of China Minsheng Group) on 16 December 2021, details of which was disclosed in the announcements of the Company dated 16 December 2021 and 12 January 2022 and the circular of the Company dated 22 December 2021

“AM Clients” China Minsheng Group, its associates or any third parties who are deemed to be connected with the Company under Rule 14A.20 of the Listing Rules

“AM Related Products” the equity or debt securities or funds or investment products arranged by the Group to China Minsheng Group and its associates

“associate(s)” has the meaning ascribed to it under the Listing Rules

“Board” the board of Directors

“China Minsheng” China Minsheng Banking Corp., Ltd. (中國民生銀行股份有限公司), a joint stock limited company established 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), and the ultimate controlling shareholder of the Company

“China Minsheng Group” China Minsheng and its subsidiaries, excluding the members of the Group

“CMBC HK Branch” the Hong Kong branch of China Minsheng

“Company” CMBC Capital Holdings Limited, a company incorporated in Bermuda with limited liability and the issued shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 1141)

DEFINITIONS

"connected person" has the meaning ascribed to it under the Listing Rules

"controlling shareholder" has the meaning ascribed to it under the Listing Rules

"Deposit Services" cash deposit services including current deposit, time deposit, call deposit or agreement deposit services provided or proposed to be provided by China Minsheng Group to the Group pursuant to the Service Agreement

"Director(s)" the director(s) of the Company

"Gram Capital" or "Independent Financial Adviser" Gram Capital Limited, a licensed corporation to carry out type 6 (advising on corporate finance) regulated activity under the SFO, being the independent financial adviser appointed by the Company to advise the Independent Board Committee and the Independent Shareholders on the terms of the Service Agreement and the Services to be provided thereunder

"Group" the Company and its subsidiaries

"HK$" Hong Kong dollars, the lawful currency of Hong Kong

"Hong Kong" the Hong Kong Special Administrative Region of the PRC

"Independent Board Committee" the independent committee of the Board, comprising all the independent non-executive Directors, namely Mr. Lee, Cheuk Yin Dannis, Mr. Wu Bin and Mr. Wang Lihua, which has been established to advise the Independent Shareholders on the terms of the Service Agreement and the Services to be provided thereunder

"Independent Shareholders" the Shareholders other than China Minsheng and its associates

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

DEFINITIONS

"Latest Practicable Date"
6 December 2024, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

"Listco AM Services"
the asset management services, investment advisory services and/or ancillary services to be provided by the Group to the AM Clients and the distribution services to be provided by China Minsheng Group to the Group pursuant to the Service Agreement

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

"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

"Proposed Annual Caps"
collectively, the proposed annual caps for the Services

"regulated activity(ies)"
has the meaning ascribed to it under the SFO

"RMB"
Renminbi, the lawful currency of the PRC

"securities"
has the meaning ascribed to it under the SFO

"Service Agreement"
the service agreement entered into between the Company (for itself and on behalf of other members of the Group) and China Minsheng (for itself and on behalf of other members of China Minsheng Group) in relation to the Services on 29 November 2024

"Services"
collectively, the Listco AM Services, the Underwriting Services and the Deposit Services

"SFC"
the Securities and Futures Commission

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

DEFINITIONS

"SGM"
the special general meeting of the Company to be held at 10:00 a.m. on Tuesday, 31 December 2024 at 45/F, One Exchange Square, 8 Connaught Place, Central, Hong Kong, or any adjournment thereof, for the Shareholders to consider and, if thought fit, approve the Service Agreement and the Services to be provided thereunder (including the Proposed Annual Caps)

"Share(s)"
ordinary share(s) of the Company with a nominal value of HK$0.4 each

"Shareholder(s)"
shareholder(s) of the Share(s)

"Stock Exchange"
The Stock Exchange of Hong Kong Limited

"Underwriting Services"
the underwriting services and sub-underwriting services for securities (including but not limited to securities issued by China Minsheng Group) to be provided by the Group to China Minsheng Group pursuant to the Service Agreement

"US$"
United States dollar, the lawful currency of the United States

"%"
per cent

LETTER FROM THE BOARD

民銀資本

CMBC CAPITAL HOLDINGS LIMITED

民銀資本控股有限公司

CMBC CAPITAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1141)

Executive Directors:
Mr. Li Baochen (Chairman)
Mr. Li Ming
Mr. Ng Hoi Kam

Non-executive Director:
Mr. Yang Kunpeng

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

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

Principal Place of Business:
45/F, One Exchange Square
8 Connaught Place
Central
Hong Kong

13 December 2024

To the Shareholders

Dear Sir or Madam,

(I) MAJOR AND CONTINUING CONNECTED TRANSACTIONS UNDER THE SERVICE AGREEMENT

AND

(II) NOTICE OF SPECIAL GENERAL MEETING

I. INTRODUCTION

The purpose of this circular, to which this letter forms a part of, is to provide you with all the information reasonably necessary to enable you to make an informed decision on whether to vote for or against the resolution to be proposed at the SGM regarding the Service Agreement and the Services to be provided thereunder (including the Proposed Annual Caps).

LETTER FROM THE BOARD

II. MAJOR AND CONTINUING CONNECTED TRANSACTIONS UNDER THE SERVICE AGREEMENT

1. Introduction

Reference is made to the announcement of the Company dated 29 November 2024 in respect of the major and continuing connected transactions contemplated under the Service Agreement.

On 29 November 2024, the Company (for itself and on behalf of other members of the Group) entered into the Service Agreement with China Minsheng (for itself and on behalf of other members of China Minsheng Group), pursuant to which, among other things:

(a) the Group agreed to provide asset management services, investment advisory service and/or ancillary services to the AM Clients and China Minsheng Group agreed to provide the distribution services to the Group (collectively, Listco AM Services);

(b) the Group agreed to provide the Underwriting Services to China Minsheng Group; and

The Independent Board Committee comprising all the independent non-executive Directors has been formed to advise the Independent Shareholders as to whether the terms of the Service Agreement and the Services to be provided thereunder (including the Proposed Annual Caps) are fair and reasonable, and whether the entering into of the Service Agreement and the Services are (i) on normal commercial terms and in the ordinary and usual course of business of the Group; and (ii) in the interests of the Company and the Shareholders as a whole.

Gram Capital has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Service Agreement and the Services to be provided thereunder (including the Proposed Annual Caps) are fair and reasonable, and whether the entering into of the Service Agreement and the Services are (i) on normal commercial terms and in the ordinary and usual course of business of the Group; and (ii) in the interests of the Company and the Shareholders as a whole.

Shareholders are advised to review the advice letters from the Independent Board Committee and Gram Capital as set out in this circular.

LETTER FROM THE BOARD

2. The Service Agreement

Parties

the Company (for itself and on behalf of other members of the Group); and
China Minsheng (for itself and on behalf of other members of China Minsheng Group)

Date

29 November 2024

Duration

The Service Agreement shall take effect from 1 January 2025 (subject to the approval of the Service Agreement by the Independent Shareholders at the SGM) to 31 December 2027 (both days inclusive), and is automatically renewable for successive periods of three years thereafter, subject to the compliance with the then applicable requirements of the Listing Rules.

The Service Agreement shall be automatically terminated if (i) the Company considers that it is not feasible to comply with the Listing Rules at any time; or (ii) compliance with the Listing Rules would require changes to the Service Agreement which are not acceptable to any of the parties thereto.

General Principle

The Services contemplated under the Service Agreement shall be provided by China Minsheng Group or the Group on the basis of equality and voluntariness with a view to bring mutual benefits to the parties thereto and with terms not less favourable (in terms of the interest of the Group) than those offered to or by any Independent Third Party for services of a similar kind (if any).

Individual Service Contract

Each type of Services shall be effected and governed by the respective individual service contract or service mandate to be entered into between the relevant member of the Group and the relevant member of China Minsheng Group in accordance with the terms of the Service Agreement. If there is any conflict between the terms of the respective individual service contract and the Service Agreement, the latter shall prevail.

LETTER FROM THE BOARD

(a) Listco AM Services

Pursuant to the Service Agreement, the Group agreed to provide asset management services, investment advisory service and/or ancillary services to the AM Clients.

Pursuant to the Service Agreement, China Minsheng Group agreed to provide distribution services to the Group for distributing the funds that are set up by the Group (the "Funds").

The scope of the Listco AM Services will be agreed and specified in the individual client agreement between the Group and the AM Clients and may include, inter alia, overseeing the operations of the investment portfolios, provision of investment policies and strategies and investment advisory services, making general investment decisions and monitoring the performance of the investment portfolio(s), distribution of the Funds and provision of administrative and management services to the investment portfolio(s).

Pricing Basis

The Group will charge the AM Clients management fees, advisory fees and performance fees for the AM Related Products, and China Minsheng Group will charge the Group distribution fees for distributing the Funds. The fees to be charged by the Group or China Minsheng Group for the Listco AM Services shall be in line with comparable market rates and be no less favourable to the Group than those charged to Independent Third Parties. Licensed representatives of type 9 regulated activity of the Group will make reference to at least three recent market comparables generally obtained from public sources, such as SFC's website, to assess the fees to be charged by the Group, which will be reviewed by the responsible officer (within the meaning of the SFO) (the "Responsible Officer") of type 9 regulated activity of the Group.

Details of the payment and pricing terms of the Listco AM Services will be specified in the individual service contract and will be negotiated on an arm's length basis between the Group and the relevant AM Clients and on terms no less favourable to the Group than those offered to and from Independent Third Parties.

LETTER FROM THE BOARD

Settlement Terms

Unless otherwise specified in the individual service contract, the distribution fees shall be settled by the Group at the time of the distribution of the Funds and at subsequent anniversaries. The management fees and advisory fees shall generally be settled by the AM Clients indirectly through their attributable assets managed under the Listco AM Services periodically (such as per month, quarter, semi-annual or per annum). The performance fees (if any) shall generally be settled by the AM Clients indirectly through their attributable assets managed under the Listco AM Services when the performance of the Funds that are subject to the performance fees meet the agreed performance benchmarks.

The Group considers the above settlement terms are the usual commercial terms as the Group offers the same settlement terms to its Independent Third Party clients.

Internal Control

To ensure that the terms for the Listco AM Services are conducted on normal commercial terms and in accordance with the terms of the Service Agreement and are in the interest of the Group, the Company has adopted the following measures:

the distribution fees to be charged by China Minsheng Group shall be approximately 0.05% to 2% of the amount of the Funds that are distributed by China Minsheng Group;
the management fee rate and the advisory fee rate to be charged by the Group shall be in accordance with the Group's and China Minsheng Group's pricing policies, which are determined with reference to the market range of 0.1% to 5% of the total asset value or net asset value of the assets to be managed by the Group for the AM Clients and will be decided by the relevant Responsible Officer in accordance with the Group's pricing policy applicable to all of its clients;
9 -

LETTER FROM THE BOARD

the performance fee rate to be charged by the Group shall be in accordance with the Group's and China Minsheng Group's pricing policies, which are determined with reference to approximately 20% of the appreciation in the net asset value of the assets to be managed by the Group for the AM Clients during the performance period above the hurdle rate (which is determined with reference to various factors including but not limited to the market condition, the past performance and the qualification of the fund managers, the objectives of the funds, the level of risk acceptable to the AM Clients etc.) after deducting the management fee and will be decided by the relevant Responsible Officer in accordance with the Group's pricing policy applicable to all of its clients;

the management fees, advisory fees and performance fees payable for each period are calculated based on the net asset value of the fund (i.e. total assets minus all accrued debts, liabilities and obligations of the fund) or total assets as at the end of the relevant period. The total assets will be valued based on general market practice of investment funds which includes, inter alia, valuation with reference to the market price for listed securities, or valuation with reference to brokers' quotation or valuation by the fund manager or Independent Third Party valuers for non-listed securities. The valuation will be reviewed by the auditors/administrators;

a Responsible Officer for type 9 regulated activity will, based on the pricing guidelines as described in paragraph 2 above, determine the management fees, advisory fees and performance fees to be charged for each of the Listco AM Services;
the Responsible Officer, the senior management and the finance department of the Company will review the prevailing comparable market rates, quotations or invoices issued to Independent Third Parties for comparison and as a reference to ensure that fees chargeable by the Group to the AM Clients are comparable to those transacted with Independent Third Parties;
the legal and compliance department and the finance department of the Company will monitor the accumulated fees charged for the Listco AM Services on a monthly basis to ensure that it will not exceed the Proposed Annual Caps for the Listco AM Services; and
10 -

LETTER FROM THE BOARD

the Company's external auditor and the independent non-executive Directors will conduct an annual review of the Listco AM Services and ensure that the Listco AM Services are in compliance with the Listing Rules.

(b) Underwriting Services

Pursuant to the Service Agreement, the Group also agreed to provide Underwriting Services to China Minsheng Group for securities (including but not limited to securities issued by China Minsheng Group) as contemplated under the Service Agreement, which generally involves type 1 regulated activity in Hong Kong.

Pricing basis

With respect to the Underwriting Services, the Group will charge China Minsheng Group an underwriting fee.

Details of the payment and pricing terms of the Underwriting Services will be specified in the individual underwriting agreement and will be negotiated on an arm's length basis between the Group and China Minsheng Group and on terms no less favourable to the Group than those offered to Independent Third Parties.

In deciding the underwriting fee, the Group shall take into account the prevailing market rates, the size of the securities to be issued, its complexities, the market condition, the market responses, competition from other underwriters, the number of underwriting projects provided or to be provided by China Minsheng Group and the fees chargeable by the Group to other Independent Third Party issuers of similar size as China Minsheng Group for similar services.

Since the underwriting market is highly competitive and the underwriting fees and commissions are transparent and standardized across the market, the Group can adopt a market-based pricing approach.

Settlement Terms

Unless otherwise specified in the individual agreement, the underwriting fees or commission shall be deducted from the proceeds after completion of the respective transaction of China Minsheng Group.

11 -

LETTER FROM THE BOARD

The Group considers the above settlement terms are the usual commercial terms as the Group offers the same settlement terms to its Independent Third Party clients.

Internal Control

To ensure that the terms for the Underwriting Services are conducted on normal commercial terms and in accordance with the terms of the Service Agreement and are in the interest of the Group, the Company has adopted the following measures:

the underwriting fee or commission to be charged by the Group under the Underwriting Services shall be within the range of 0.05% to 1% of the monetary value of the securities underwritten taking into account factors including but not limited to (i) the prevailing market rates of similar services charged by companies with similar size of operations and reputation of the relevant Group company at the relevant time; (ii) the size and nature of the relevant transaction; (iii) the resources to be incurred and the complexity in the provision of the Underwriting Services; (iv) fees charged by the Group for similar services to Independent Third Parties in the past; and (v) the anticipated market response to the securities to be underwritten;
the Responsible Officer, the senior management and the finance department of the Company will conduct regular checks to review the prevailing comparable market rates, quotations or invoices issued to Independent Third Parties for comparison and as a reference to assess whether the fee charged for the Underwriting Services is fair and reasonable in accordance with the aforesaid pricing policy;
the legal and compliance department and the finance department of the Company will monitor the accumulated fees charged for the Underwriting Services on a monthly basis to ensure that it will not exceed the Proposed Annual Caps for the Underwriting Services; and
the Company's external auditor and the independent non-executive Directors will conduct an annual review of the Underwriting Services and ensure that the Underwriting Services are in compliance with the Listing Rules.
12 -

LETTER FROM THE BOARD

Pursuant to the Service Agreement, China Minsheng Group agreed to provide Deposit Services to the Group as contemplated under the Service Agreement.

Pricing basis

The interest rate to be paid by China Minsheng Group for the Group's deposits with China Minsheng Group pursuant to the Services Agreement shall be determined based on the prevailing deposit interest rate promulgated by China Minsheng Group for the same period and should not be lower than the deposit interest rates offered by other major commercial banks in Hong Kong or the PRC, for deposits in similar nature.

Internal Control

To ensure that the terms for the Deposit Services are conducted on normal commercial terms and in accordance with the terms of the Service Agreement and are in the interest of the Group, the Company has adopted the following measures:

the Group shall place or maintain any deposits under the Services Agreement on a non-exclusive basis. The Group will, on a regular basis, obtain quotations (setting out, among others, the applicable interest rates) from at least two other major commercial banks in the relevant jurisdiction who are Independent Third Parties of the Group to confirm the rate(s) offered by China Minsheng Group are no less favourable to the Group, after conducting assessment taking into account several factors, including without limitation external customers' needs, efficiency of financial resources arrangement, daily operation needs and the expected cash flow before making its decision as to the bank with which the deposits are to be placed. In the event that the Group is aware the rates(s) offered by China Minsheng Group become less favourable to the Group, the Group shall arrange to transfer deposits from China Minsheng Group to other financial institutions who are Independent Third Parties of the Group within a reasonable period of time;
13 -

LETTER FROM THE BOARD

the Group will monitor the maximum balance of the deposits placed and maintained with China Minsheng Group under the Services Agreement on a daily basis to ensure that such balance does not exceed the relevant Proposed Annual Caps; where the balance is close to the relevant Proposed Annual Caps, the Group will arrange for some of the deposit placed with China Minsheng Group to be transferred to its bank accounts maintained with other financial institutions who are Independent Third Parties of the Group;
the legal and compliance department and the finance department of the Company will monitor the daily balance on a monthly basis to ensure that it will not exceed the relevant Proposed Annual Caps for the Deposit Services; and
the Company's external auditor and the independent non-executive Directors will conduct an annual review of the Deposit Services and ensure that the Deposit Services are in compliance with the Listing Rules.
14 -

LETTER FROM THE BOARD

Historical Annual Caps and Transaction Amounts

Set out below are the historical annual caps and transaction amounts in respect of the Listco AM Services, Underwriting Services and Deposit Services under the 2021 Service Agreement for the three years ended/ending 31 December 2022, 2023 and 2024:

	For the year ended/ending 31 December
	2022	2023	2024
	Historical annual caps	Historical transaction amounts (HK$ million)	Historical annual caps	Historical transaction amounts (HK$ million)	Historical annual caps	Historical transaction amounts (For the nine months ended 30 September 2024) (HK$ million)
Listco AM Services
- Distribution fees*	62	0.05	68.2	-	75.02	-
- Management fees and advisory fees	148.8	147.08	178.56	116.45	214.27	80.03
- Performance fees	74.4	12.69	89.28	2.27	107.14	-
Underwriting Services	11	-	11	-	11	-
Deposit Services* (Maximum Daily Deposit Balance)	1,000	417	1,000	374	1,000	519

Fees to be payable by the Group to China Minsheng Group

LETTER FROM THE BOARD

For the three years ended/ending 31 December 2024, as the historical transaction amounts show, certain Services under the 2021 Services Agreement has a low utilization rate of the annual caps or do not utilize the annual caps. With respect to the distribution fees and the performance fees under the Listco AM Services and the underwriting fees under the Underwriting Services, the low utilization rate of the annual caps or no utilization of the annual caps are mainly due to the change in the market conditions, investment strategies and opportunities in the market. Specifically, the performance of both the equity market and the fixed income market in Hong Kong have remained weak in the past few years which have adversely affected the performance of the Funds. Accordingly, the performance fees that the Group can receive for the years ended 31 December 2022 and 2023 has decreased dramatically. In light of the USD interest rate hike cycle started in 2022, the investors have become more cautious in Funds investment. As a result, the demand of the Funds has declined which has in turn affected the distribution of the Funds. However, as the central banks' monetary policy changed in 2024, the fixed income market outperformed, it is expected that the performance fees the Group can receive for year 2024 will be more than 2022 and 2023. It is also expected that distribution of the Funds will increase for each of the three years ended 31 December 2027. In relation to the Underwriting Services, China Minsheng issued RMB2,000,000,000 3.15% notes due 2025 in January 2023, the Group was engaged to provided underwriting services but no notes were subscribed upon the underwriting of the Group, and therefore no commission fee was received; China Minsheng issued RMB3,000,000,000 3.08% notes due 2026 in March 2024, the Group was engaged to provided underwriting services but no notes were subscribed upon the underwriting of the Group, and therefore no commission fee was received; China Minsheng issued US$300,000,000 floating rate notes due 2027 in September 2024, the Group provided underwriting services and generated commission of US$15,000 at the fee rate of 0.1%. It is understood that the issue of the bonds by China Minsheng Group is usually dependent on various factors, including but not limited to the market conditions, its corporate needs and the investors' interests. Besides, historic fee rate is not a guarantee of fee rate in future bond issuance. It is possible that the fee rate in the future may be lower than 0.1% as the underwriting market is highly competitive. Notwithstanding of the low utilization rate of the annual caps or no utilization of the annual caps for these Services, the Company considers that for the three years ending 31 December 2027, it is necessary to set the annual caps to be the Proposed Annual Caps in light of the proposed expansion of business activities, the possible improvement of the economy and the market condition in both the PRC and Hong Kong and the possible increase in demand for these Services.

16 -

LETTER FROM THE BOARD

As at the Latest Practicable Date, the annual caps for the three years ended/ending 31 December 2022, 2023 and 2024 have not been exceeded.

Proposed Annual Caps

The Proposed Annual Caps for the next three years ending 31 December 2027 are set out below:

	For the year ending 31 December
	2025	2026	2027
	(HK$ million)	(HK$ million)	(HK$ million)
Listco AM Services
- Distribution fees*	3	3	3
- Management fees and advisory fees	193	194	195
- Performance fees	45	45	45
Underwriting Services	6	6	6
Deposit Services*
(Daily Deposit Balance)	500	500	500

Fees to be payable by the Group to China Minsheng Group

Basis of the Proposed Annual Caps

1. Listco AM Services

The Proposed Annual Caps for Listco AM Services for the three years ending 31 December 2027 are determined with reference to the historical transaction amount and the expected growth of the business, the details of which are set out below.

(i) Management fee

As at 30 September 2024, the assets under management ("AUM") for the Listco AM Services was over US$1.68 billion ("Current Funds") (representing a year-on-year growth of 7% for the year ended 30 September 2024). For the six months ended 30 June 2024, the Group recognised the management fees and advisory fees for the funds that are currently managed by the Group for the AM Clients of approximately HK$48.8 million. With reference to the management fees and the advisory fees for the nine months ended 30 September 2024 (which amounts to approximately HK$80.03 million) and taking into account the adjustments of the terms of pricing of the certain Current Funds in 2024, it is estimated that for the year ending 31 December 2024, the management fees and advisory fees from the Listco AM Services will be approximately HK$137.91 million which is approximately 64.36% of the annual cap for the year ending 31 December 2024.

17 -

LETTER FROM THE BOARD

Other than the Current Funds, the Group may set up and manage with new funds with different investment scopes and strategies, with an aim to provide the Group's clients with more diversified products. It is expected that the AM Clients may switch some of their investments in the Current Funds into the new funds, but as at the Latest Practicable Date, the AM Clients is cautiously optimistic about the market and do not have a present intention to substantially further invest/redeem its assets either in the Current Funds or new funds. Besides, the AM Clients wish to maintain the AUM of certain Current Funds. With reference to the investors' preference and investment strategies of respective Funds, it is expected that the AUM of the Current Funds (except those with explicit instructions to maintain the AUM) will increase (by appreciation of the AUM) at the rate of approximately 7% for each of the three years ending 31 December 2027, and the management fees and advisory fees for the Current Funds for each of the three years ending 31 December 2027 will increase accordingly. It is therefore expected that the management fee and advisory fees will increase to HK$175.7 million, HK$176.2 million and HK$176.8 million for the three years ending 31 December 2027, respectively.

Taking into account a moderate buffer and the factors mentioned in paragraph headed "4. Other factors" below, the Company proposes to set the Proposed Annual Caps for the management fee and advisory fee for the three years ending 31 December 2027 to be HK$193.0 million, HK$194.0 million and HK$195.0 million, respectively.

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LETTER FROM THE BOARD

(ii) Performance fee

Under the Service Agreement entered into between the Group and the AM Clients, the Group may charge the AM Clients performance fees for certain funds where the net asset value of these funds rises above a hurdle rate during the performance period.

For the nine months ended 30 September 2024, no performance fee payable by China Minsheng Group is recognised. However, it is estimated that for the year ending 31 December 2024, the Group will charge China Minsheng Group approximately HK$48.18 million for the performance fee (representing approximately 45% of the annual cap for the year ending 31 December 2024), mainly because the Federal Reserve has started the rate cut cycle in September 2024, leading to the outperformance of equity and fixed income market, which affected the performance of the Funds.

As mentioned above, the AM Clients wish to maintain the AUM of certain Current Funds. These Current Funds include the funds subject to the performance fees. It is therefore expected that there will not be a material change in the AUM of such funds for the three years ending 31 December 2027. Assuming the rate of return of investment of such funds for the three years ending 31 December 2027 will be the same as that of such funds for the year ending 31 December 2024 and taking into account the expected increase in management fees of such funds for the three years ending 31 December 2027 (which will lead to the corresponding decrease in net asset value return of the funds), it is expected that the Group will charge the AM Clients performance fees of HK$40.5 million, HK$40.5 million and HK$40.5 million for the three years ending 31 December 2027, respectively.

Taking into account a moderate buffer and the factors mentioned in paragraph headed "4. Other factors", the Company proposes to set the Proposed Annual Caps for the performance fee for the three years ending 31 December 2027 to be HK$45.0 million, HK$45.0 million and HK$45.0 million, respectively.

(iii) Distribution fee

Under the Service Agreement, China Minsheng Group will charge the Group distribution fees for distributing the Funds.

LETTER FROM THE BOARD

The distribution fees to be charged by China Minsheng Group shall be approximately 0.05% to 2% of the amount of the Funds that are distributed by China Minsheng Group. In accordance with market practice, the distribution fees comprise:

(a) Subscription fee

The Group shall pay China Minsheng Group a fee on each subscription of the Funds by the investors introduced by China Minsheng Group and accepted by the Group.

(b) Switching rebate

The Group shall pay China Minsheng Group a fee on each redemption for switching of the Funds by the investors introduced by China Minsheng Group.

The Group shall pay China Minsheng Group a trail fee corresponding to an amount that is not more than 50% of the annual management fees, advisory fees and/or performance fees actually received by the Group in respect of the Funds subscribed by the investors that are introduced by China Minsheng Group.

As of 30 June 2024, there were no distribution fee is payable to China Minsheng Group for the six months ended 30 June 2024. It is also estimated that there will be no distribution fees payable to China Minsheng Group for the year ending 31 December 2024.

In addition, there are no distribution fee for the year ended 31 December 2023 and HK$0.05 million of distribution fees for the year ended 31 December 2022 payable to China Minsheng Group. Although the historical transaction amounts of the distribution fees for the three years ending 31 December 2024 are minimal, the Group cannot rule out the possibility in incurring any distribution fees, as the business volume of the distributions to be provided by China Minsheng Group may depend on the performance of the Funds, which is affected by the prevailing market conditions.

20 -

LETTER FROM THE BOARD

Taking into account (i) the factors mentioned above and in paragraph headed "4. Other factors", and (ii) the distribution services to be provided by China Minsheng Group is part of the Listco AM Services, the Company proposes to set the Proposed Annual Caps for the distribution fee for the three years ending 31 December 2027 to be HK$3 million, HK$3 million and HK$3 million, respectively, to cater the possibility in distribution of the Funds by China Minsheng Group, particularly when the market condition becomes more favourable to the performance of the Funds and new funds are introduced by the Group.

2. Underwriting Services

The Proposed Annual Caps for Underwriting Services for the three years ending 31 December 2027 were determined with reference to the historical transaction amount and the expected growth of the business, the details of which are set out below.

For the year ending 31 December 2024, as of the Latest Practicable Date, the Group participated in the underwriting of bonds of a principal amount of approximately HK$5,657.9 million issued by a member of China Minsheng Group whereby the Group was engaged to underwrite the bonds in the principal amount of approximately HK$116.558 million for a commission of approximately HK$0.116558 million.

It is expected that the respective principal amount of bonds to be issued by China Minsheng Group for the three years ending 31 December 2027 are approximately HK$10.9 billion, HK$10.9 billion and HK$10.9 billion, respectively, and that the Group will participate in the underwriting of these bonds.

It is expected the Group will be engaged to underwrite the bonds in the aggregated principal amount of approximately HK$0.55 billion, HK$0.55 billion, and HK$0.55 billion for each of the three years ending 31 December 2027, and the underwriting fee is estimated to be approximately HK$5 to 6 million for each of the years ending 31 December 2027.

Taking into account of a moderate buffer and the factors mentioned in paragraph headed "4. Other factors", the Company proposes to set the Proposed Annual Caps for the underwriting fee for the three years ending 31 December 2027 to be HK$6 million, HK$6 million and HK$6 million, respectively.

21 -

LETTER FROM THE BOARD

3. Deposit Services

The Proposed Annual Caps for Deposit Services for the three years ending 31 December 2027 were determined with reference to the historical transaction amount and the expected growth of the business, the details of which are set out below.

Under the Service Agreement entered into between the Group and China Minsheng Group, China Minsheng Group agreed to provide Deposit Services.

The maximum amount of deposit that the Group had deposited with China Minsheng Group for the two years ended 31 December 2023 amounted to approximately HK$417 million. For the nine months ended 30 September 2024, the maximum amount of deposit that the Group had deposited with China Minsheng Group amounted to approximately HK$519 million. On this basis, for each of the three years ending 31 December 2027, it is estimated that the maximum amount of deposit the Group may deposit into its bank account with China Minsheng will be approximately HK$400 to 500 million.

The Group's deposits with its banks (including China Minsheng Group) include cash of the Group itself and cash held on behalf of its customers, and the Group does not place its cash in a single bank.

As disclosed in the Company's interim report for the six months ended 30 June 2024, the cash of the Group itself and cash held on behalf of its customers as at 30 June 2024 amounted to approximately HK$307 million and HK$135 million, respectively. However, such balances fluctuate from time to time and may be higher than the balances as at the year end or period end.

The maximum amount of cash of the Group itself deposited with China Minsheng Group generally does not exceed HK$180 million during the period from 1 January 2022 to 30 September 2024, except certain occasions with short-term treasury requirements.

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LETTER FROM THE BOARD

The Group has an online securities trading system, which includes a function of bank-securities transfer through which the clients can deposit funds to their securities account from their bank accounts with China Minsheng Group directly and instantly with no bank charge. The daily upper limit for each client to deposit fund to their securities account through the bank-securities transfer is HK$100 million, and there is no time constraint for the clients to deposit funds to their securities accounts. The Group has no control over the amounts of such deposits and withdrawals, which are entirely at the discretion of clients in accordance with their own trading requirements and the Group must act upon such instruction accordingly. The Group also established institutional business department (the "Department") in May 2023. Since the establishment of the Department, the number of institutional clients has increased by approximately 160 and is expected to continue to increase. With the increase in number of institutional clients, it is expected that there is a higher possibility for the clients to make larger amount of deposits in the Group's bank accounts. Based on the Group's experience, the clients' deposit will increase substantially when the Hong Kong stock market performs strongly.

In addition, on some occasions, with respect to the Group's underwriting business, the Group's clients (i.e. the issuers) may request the Group (as the underwriter) to transfer the proceeds from the bond issuance to their bank accounts within a short period after deducting fees for the sponsors and underwriters. The amount that may be transferred to the Group's account and to the clients' accounts out of such business would depend on the deals that the Group participates as the principal underwriter and the amount that the clients may raise from the offerings under the prevailing market conditions.

In view of the above, the Group considered that there is difficulty for the Group in controlling and predicting the amount of cash held on behalf of customers deposited with China Minsheng Group. The Group noted that such amount reached approximately HK$300 to 480 million on several occasions during the period from 1 January 2022 to 30 September 2024. Therefore, it would be desirable for the Group to set the maximum daily deposit balance limit at a level, which is able to cater the internal treasury requirements and any substantial increases in clients' deposits within a short period of time.

23 -

LETTER FROM THE BOARD

Based on the above analysis, it is expected the Group may deposit as much as HK$500 million for each of the three years ending 31 December 2027. Taking into account of the factors mentioned in paragraph headed "4. Other factors", the Company proposes to set the Proposed Annual Caps for the maximum daily balance for the three years ending 31 December 2027 to be HK$500 million, HK$500 million and HK$500 million, respectively.

4. Other factors

In addition to the above factors, the Board has considered the following factors when determining the Proposed Annual Caps:

(i) China Minsheng Group's development and synergistic strategies of promoting the linkage, and effective integration of business resources, level of operation and management among the group members (including the Group), which are expected to further increase the internal cooperation within China Minsheng Group and result in growth in size and scope of connected transactions among the group members;

(ii) the expected business growth and development with China Minsheng Group in the future; and

(iii) the expected business growth and development within the Group in the future.

A Responsible Officer for type 1 regulated activity will, based on the basis for the Proposed Annual Caps disclosed above, monitor the annual caps for the Underwriting Services. A Responsible Offer for type 9 regulated activity will, based on the basis for the Proposed Annual Caps disclosed above, monitor the annual caps for Listco AM Services. The finance department will monitor the annual caps for the Deposit Services.

24 -

LETTER FROM THE BOARD

3. Reasons for and Benefits of Entering into the Service Agreement

The Board considers that the entering into of the Service Agreement will continue to contribute in building the brand and reputation of the Company, promoting the Company's reputation, strengthening its domestic and overseas publicity, and attracting more business opportunities. The Service Agreement and the transactions contemplated thereunder also allow the Group to leverage on the established network of China Minsheng Group and increase the client base of the Group. In addition, the provision of the Services by the Group will provide stable revenue source for the Group. As at the Latest Practicable Date, the Group did not have any intention to enter, and had not entered into any negotiation or agreement, arrangement or understanding to scale down and/or dispose of its business, nor does it have any concrete plan to make any acquisition.

The Board (including the independent non-executive Directors, whose opinion after taking into account the advice of Gram Capital, is included in the section headed "Letter from the Independent Board Committee" in this circular) considers that the terms of the Service Agreement have been negotiated on an arm's length basis and the transactions contemplated thereunder are on normal commercial terms in the ordinary and usual course of business of the Group. In view of the above and that the transactions contemplated under the Service Agreement are of revenue nature and will contribute positively to the Group's income, the Board (including the independent non-executive Directors, whose opinion after taking into account the advice of Gram Capital, is included in the section headed "Letter from the Independent Board Committee" in this circular) considers that the terms of the Service Agreement are fair and reasonable and the entering into of the Service Agreement is in the interests of the Company and the Shareholders as a whole.

As Mr. Li Baochen, Mr. Li Ming, Mr. Ng Hoi Kam and Mr. Yang Kunpeng, all being Directors, hold positions in China Minsheng and/or its associates, they have abstained from voting for the approval of the Service Agreement. Save for the above, no other Directors have any material interests in the Service Agreement or were otherwise required to evade or abstain from voting in respect of the relevant Board resolutions.

25 -

LETTER FROM THE BOARD

4. Listing Rules Implications

As at the Latest Practicable Date, China Minsheng is the controlling shareholder of the Company which holds 760,588,477 Shares, representing approximately 69.19% of the total number of issued Shares of the Company. Therefore, each of the members of China Minsheng Group is a connected person of the Company. As such, the Services under the Service Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

Since the highest relevant applicable percentage ratio (as defined under the Listing Rules) in respect of the Proposed Annual Caps exceeds 5%, the Services to be provided under the Service Agreement are subject to the reporting, announcement, circular, annual review and Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

In addition, the highest relevant applicable percentage ratio (as defined under the Listing Rules) in respect of the Proposed Annual Caps of Deposit Services under the Services Agreement exceeds 100%, the Deposit Services also constitute a major transaction of the Company (as the Deposit Services do not involve an acquisition or disposal of assets) and are subject to the reporting, announcement and shareholders' approval requirements under Chapter 14 of the Listing Rules.

5. General Information

As at the Latest Practicable Date, the Group is principally engaged in the securities business, investment and financing, asset management and advisory business.

With reference to the annual report of China Minsheng for the year ended 31 December 2023, China Minsheng Group mainly provides corporate and personal banking, treasury business, finance leasing, fund and asset management, investment banking and other financial services in the PRC. China Minsheng Group recorded total assets and net profit of approximately RMB7,674,965 million as at 31 December 2023 and RMB35,986 million for the year ended 31 December 2023 respectively. As at 31 December 2023, the sales network of China Minsheng had covered 138 cities in the PRC, including 146 branch-level institutions (including 41 tier-one branches (excluding Hong Kong branch), 105 tier-two branches (including remote sub-branches)), and 2,459 business outlets of sub-branches, including 1,248 general sub-branches (including business departments), 1,072 community sub-branches, and 139 small business sub-branches. According to the interim report of China Minsheng for the six months ended 30 June 2024, its single largest shareholder is Dajia Life Insurance Co., Ltd. (whose ultimate beneficial owner is China Insurance Security Fund Co., Ltd.), holding approximately 20.73% of its A shares and approximately 5.50% of its H shares.

26 -

LETTER FROM THE BOARD

III. CLOSURE OF REGISTER OF MEMBER

The SGM is scheduled to be held on Tuesday, 31 December 2024. For determining the entitlement to attend and vote at the SGM, the register of members of the Company will be closed from Tuesday, 24 December 2024 to Tuesday, 31 December 2024, both days inclusive, during which period no transfer of Shares will be registered. In order to be eligible to attend and vote at the SGM, unregistered holders of Shares should ensure that all the share transfer documents accompanied by the relevant share certificates must be lodged with the Company's branch share registrar in Hong Kong, Tricor Tengis Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong for registration not later than 4:30 p.m. on Monday, 23 December 2024.

IV. THE SGM AND VOTING AT THE SGM

The SGM will be convened and held at 45/F, One Exchange Square, 8 Connaught Place, Central, Hong Kong on Tuesday, 31 December 2024 at 10:00 a.m.. The notice of SGM is set out on pages 60 to 62 of this circular, which contains, inter alia, ordinary resolution to approve (i) the Service Agreement, (ii) the Services to be provided thereunder, and (iii) the Proposed Annual Caps.

For the purpose of compliance with Rule 13.39(4) of the Listing Rules, the Company will procure the chairman of the SGM to demand for a poll for the ordinary resolution to be put to the vote of the SGM in accordance with the bye-laws of the Company.

As at the Latest Practicable Date, China Minsheng Group was interested in, and controlled the voting right in respect of, 760,588,477 Shares, representing approximately 69.19% of the total number of issued Shares of the Company. China Minsheng Group is treated to have a material interest in the Services to be provided under the Service Agreement. Accordingly, China Minsheng Group is required to abstain from voting on the resolution to be proposed at the SGM to approve the Service Agreement and the Services to be provided thereunder (including the Proposed Annual Caps).

27 -

LETTER FROM THE BOARD

V. ACTION TO BE TAKEN

A form of proxy for use at the SGM is also enclosed. Whether or not you are able to attend and vote at the SGM, you are requested to read the notice and to complete and sign the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company's branch share registrar in Hong Kong, Tricor Tengis Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as possible and in any event not less than forty-eight (48) hours before the time appointed for holding the SGM. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM should you so wish and in such event, the form of proxy shall be deemed to be revoked.

VI. RECOMMENDATIONS

Your attention is drawn to the letter from the Independent Board Committee set out on pages 29 to 30 of this circular and the letter from Gram Capital set out on pages 31 to 51 of this circular. The Independent Shareholders are advised to read the aforesaid letters before deciding as to how to vote on the resolution regarding the Service Agreement and the transactions contemplated thereunder. The Directors (including the independent non-executive Directors) are of the view that the terms of the Service Agreement and the Services to be provided thereunder (including the Proposed Annual Caps) are fair and reasonable, and the entering into of the Service Agreement and the Services are (i) on normal commercial terms and in the ordinary and usual course of business of the Company, and (ii) in the interests of the Company and the Shareholders as a whole. The Directors (including the independent non-executive Directors) recommend the Independent Shareholders to vote in favour of the relevant resolution to be proposed at the SGM to approve the Service Agreement and the transactions contemplated thereunder (including the Proposed Annual Caps). Accordingly, the Board recommends the Shareholders to consider and vote in favour of the resolution to be proposed at the SGM in these regards.

VII. ADDITIONAL INFORMATION

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

Yours faithfully,

By order of the Board

CMBC Capital Holdings Limited

Li Baochen

Chairman

28 -

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

民銀資本

CMBC CAPITAL HOLDINGS LIMITED

民銀資本控股有限公司

CMBC CAPITAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1141)

13 December 2024

To the Independent Shareholders

Dear Sir or Madam,

MAJOR AND CONTINUING CONNECTED TRANSACTIONS UNDER THE SERVICE AGREEMENT

We refer to the circular of the Company dated 13 December 2024 (the "Circular"), of which this letter forms a part. Terms defined therein shall have the same meanings when used in this letter unless the context otherwise requires.

We have been appointed by the Board as members of the Independent Board Committee to advise the Independent Shareholders on whether the terms of the Service Agreement and the Services to be provided thereunder (including the Proposed Annual Caps) are fair and reasonable, and whether the entering into of the Service Agreement and the Services are (i) on normal commercial terms and in the ordinary and usual course of business of the Company; and (ii) in the interests of the Company and the Shareholders as a whole. Gram Capital has been appointed as the independent financial adviser to advise us and the Independent Shareholders in this respect.

29 -

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having considered the terms of the Service Agreement and the Services to be provided thereunder (including the Proposed Annual Caps), and taken into account the advice of Gram Capital, we are of the view that the terms of the Service Agreement and the Services to be provided thereunder (including the Proposed Annual Caps) are fair and reasonable, and the entering into of the Service Agreement and the Services are (i) on normal commercial terms and in the ordinary and usual course of business of the Company; and (ii) in the interests of the Company and the Shareholders as a whole. We therefore recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the SGM to approve the Service Agreement and the Services to be provided thereunder (including the Proposed Annual Caps).

Yours faithfully,

For and on behalf of

the Independent Board Committee

Mr. Lee, Cheuk Yin Dannis

Mr. Wu Bin

Mr. Wang Lihua

Independent non-executive Directors

30 -

LETTER FROM GRAM CAPITAL

Set out below is the text of a letter received from Gram Capital, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Services for the purpose of inclusion in this circular.

Gram Capital Limited
嘉林資本有限公司

Room 1209, 12/F.
Nan Fung Tower
88 Connaught Road Central/
173 Des Voeux Road Central
Hong Kong

13 December 2024

To: The independent board committee and the independent shareholders of CMBC Capital Holdings Limited

Dear Sir/Madam,

MAJOR AND CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Services, details of which are set out in the letter from the Board (the “Board Letter”) contained in the circular dated 13 December 2024 issued by the Company to the Shareholders (the “Circular”), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

LETTER FROM GRAM CAPITAL

(b) the Group agreed to provide the Underwriting Services to China Minsheng Group; and
(c) China Minsheng Group agreed to provide the Deposit Services to the Group.

With reference to the Board Letter, the Services constitute continuing connected transactions of the Company and are subject to the reporting, announcement, circular, annual review and Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules. The Deposit Services also constitute major transaction of the Company under Chapter 14 of the Listing Rules.

The Independent Board Committee comprising Mr. Lee, Cheuk Yin Dannis, Mr. Wu Bin and Mr. Wang Lihua (all being independent non-executive Directors) has been established to advise the Independent Shareholders on (i) whether the terms of the Services (including the Proposed Annual Caps) are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned; (ii) whether the Services are in the interests of the Company and the Shareholders as a whole and conducted in the ordinary and usual course of business of the Group; and (iii) how the Independent Shareholders should vote in respect of the resolution to approve the Service Agreement and the Services (including the Proposed Annual Caps) at the SGM. We, Gram Capital Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

INDEPENDENCE

As at the Latest Practicable Date, we were not aware of any relationships or interests between Gram Capital and the Company during the past two years immediately preceding the Latest Practicable Date, or any other parties that could be reasonably regarded as hindrance to Gram Capital's independence to act as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders.

Having considered the above and that none of the circumstances as set out under the Rule 13.84 of the Listing Rules existed as at the Latest Practicable Date, we are of the view that we are independent to act as the Independent Financial Adviser.

LETTER FROM GRAM CAPITAL

BASIS OF OUR OPINION

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations as provided to us by the Directors. We have assumed that all information and representations that have been provided by the Directors, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the Latest Practicable Date. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Company, its advisers and/or the Directors, which have been provided to us. Our opinion is based on the Directors' representation and confirmation that there is no undisclosed private agreement/arrangement or implied understanding with anyone concerning the Services. We consider that we have taken sufficient and necessary steps on which to form a reasonable basis and an informed view for our opinion in compliance with Rule 13.80 of the Listing Rules.

The 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 the 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 therein or the Circular misleading. We, as the Independent Financial Adviser, take no responsibility for the contents of any part of the Circular, save and except for this letter of advice.

33 -

LETTER FROM GRAM CAPITAL

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company, China Minsheng or their respective subsidiaries or associates, nor have we considered the taxation implication on the Group or the Shareholders as a result of the Services. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date. Shareholders should note that subsequent developments (including any material change in market and economic conditions) may affect and/or change our opinion and we have no obligation to update this opinion to take into account events occurring after the Latest Practicable Date or to update, revise or reaffirm our opinion. In addition, nothing contained in this letter should be construed as a recommendation to hold, sell or buy any Shares or any other securities of the Company.

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, it is the responsibility of Gram Capital to ensure that such information has been correctly extracted from the relevant sources while we are not obligated to conduct any independent in-depth investigation into the accuracy and completeness of those information.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the Services, we have taken into consideration the following principal factors and reasons:

Information on the Group

With reference to the Board Letter, the Group is principally engaged in the securities business, investment and financing, asset management and advisory business.

34 -

LETTER FROM GRAM CAPITAL

Set out below are the consolidated financial information of the Group for the two years ended 31 December 2023 and for the six months ended 30 June 2024 as extracted from the Company's annual report for the year ended 31 December 2023 (the "2023 Annual Report") and the Company's interim report for the six months ended 30 June 2024 (the "2024 Interim Report"):

	For the six months ended 30 June 2024 (unaudited) HK$'000	For the year ended 31 December 2023 (audited) HK$'000	For the year ended 31 December 2022 (audited) HK$'000	Changes from 2022 to 2023 %
Revenue	156,673	493,894	801,981	(38.42)
- Securities	14,682	33,901	29,017	16.83
- Fixed income direct investment	62,067	260,407	508,399	(48.78)
- Other investment and financing	2,643	44,131	69,082	(36.12)
- Asset management	51,498	124,425	166,093	(25.09)
- Corporate finance and advisory	25,783	31,030	29,390	5.58
Profit/(Loss) for the period/year attributable to owners of the Company	79,673	(572,306)	(436,597)	31.08

According to the above table, the Group recorded revenue of approximately HK$494 million for the year ended 31 December 2023 ("FY2023"), representing a decrease of approximately 38.42% as compared to that for the year ended 31 December 2022 ("FY2022"). With reference to the 2023 Annual Report, such decrease was mainly due to (i) extremely depressed and volatile capital market in Hong Kong; (ii) increase in loss of financial asset investment transaction and the strategic reduction in the Group's investment scale; and (iii) decrease in scale of asset management and external loans, resulting in decrease in the income from financial investment, asset management and loans and financing for FY2023.

The loss attributable to owners of the Company for FY2023 increased by approximately 31.08% as compared to that for FY2022, mainly due to (i) the aforesaid decrease in the Group's revenue; and (ii) increase in net losses on financial assets at fair value through other comprehensive income, as partially offset by decrease in impairment losses.

35 -

LETTER FROM GRAM CAPITAL

The Group recorded revenue of approximately HK$157 million for the six months ended 30 June 2024 (“1H2024”), representing a decrease of approximately 40.93% as compared to that for the six months ended 30 June 2023 (“1H2023”). Notwithstanding the decrease in revenue, profit attributable to owners of the Company for 1H2024 was approximately HK$80 million as compared to loss attributable to owners of the Company for 1H2023. With reference to the 2024 Interim Report, such turnaround was mainly attributable to (i) turnaround from net gains to net losses on financial assets/liabilities at fair value through profit or loss; and (ii) reduction in impairment losses and finance costs, as partially offset by the aforementioned decrease in revenue.

With reference to the 2024 Interim Report, as at 30 June 2024, the Group had cash held on behalf of customers of approximately HK$135 million, cash and cash equivalents of approximately HK$307 million and net assets of approximately HK$1,390 million.

With reference to the 2024 Interim Report, since 2024, the Hong Kong capital market has been impacted by repeated swings in interest rate cut expectations of the United States of America, tense geopolitical situations and volatility in elections of the United States of America, Europe and the United Kingdom, and is still facing a complex and severe situation. The Group's management actively implemented the development strategy of "One Minsheng", fully leveraged the advantages of licenses held by the Group and the role of the Group's platform, comprehensively promoted cross-border business synergy, and provided all-rounded services to China Minsheng and its customers, in particular the diversified financial services demanded by its core customers.

Information on China Minsheng

With reference to the Board Letter, China Minsheng is a controlling Shareholder. With reference to the annual report of China Minsheng for FY2023, China Minsheng Group mainly provides corporate and personal banking, treasury business, finance leasing, fund and asset management, investment banking and other financial services in the PRC.

Reasons for and benefits of entering into the Service Agreement

With reference to the Board Letter, the Board considers that the entering into of the Service Agreement will continue to contribute in building the brand and reputation of the Company, promoting the Company's reputation, strengthening its domestic and overseas publicity, and attracting more business opportunities. The Service Agreement and the transactions contemplated thereunder also allow the Group to leverage on the established network of China Minsheng Group and increase the client base of the Group. In addition, the provision of the Services by the Group will provide stable revenue source for the Group.

36 -

LETTER FROM GRAM CAPITAL

With reference to the 2023 Annual Report, the Group had built a cooperative development system with China Minsheng in a regular and efficient manner, through which it can leverage the enormous network and customer base of China Minsheng to facilitate the Group's comprehensive and steady development in the areas of securities trading and brokerage, asset management, investment and financing, etc.

As advised by the Directors, the Services will be conducted in the ordinary and usual course of business of the Group, in particular, (i) the revenue generated from the Listco AM Services (other than the Distribution Services) and the Underwriting Services will be accounted for the Group's revenue; and (ii) the Distribution Services and the Deposit Services provided to the Group will support the Group's business operation.

Having considered the above, we are of the view that the Services are conducted in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole.

Principal terms of the Services

Set out below are the summarised terms of the Services as contemplated under the Service Agreement. Details of the Service Agreement are set out under the section headed "2. The Service Agreement" of the Board Letter.

Agreement date

29 November 2024

Parties

the Company (for itself and on behalf of other members of the Group); and
China Minsheng (for itself and on behalf of other members of China Minsheng Group)

Duration

37 -

LETTER FROM GRAM CAPITAL

General principle

Individual service contract

(a) Listco AM Services

Pursuant to the Service Agreement, the Group agreed to provide asset management services, investment advisory service and/or ancillary services to the AM Clients.

Pursuant to the Service Agreement, China Minsheng Group agreed to provide distribution services to the Group for distributing the Funds.

Pricing basis

The Group will charge the AM Clients management fees, advisory fees and performance fees for the AM Related Products, and China Minsheng Group will charge the Group distribution fees for distributing the Funds. The fees to be charged by the Group or China Minsheng Group for the Listco AM Services shall be in line with comparable market rates and be no less favourable to the Group than those charged to Independent Third Parties. Licensed representatives of type 9 regulated activity of the Group will make reference to at least three recent market comparables generally obtained from public sources, such as SFC's website, to assess the fees to be charged by the Group, which will be reviewed by the Responsible Officer of type 9 regulated activity of the Group.

38 -

LETTER FROM GRAM CAPITAL

Settlement terms

Internal control

With reference to the Board Letter, to ensure that the terms for the Listco AM Services are conducted on normal commercial terms and in accordance with the terms of the Service Agreement and are in the interest of the Group, the Company has adopted the measures as set out under the sub-section headed "(a) Listco AM Services – Internal Control" of the section headed "2. The Service Agreement" in the Board Letter.

For our due diligence purpose, we obtained a list of funds managed by the Group for China Minsheng Group as at 30 September 2024. We randomly selected three funds from the list and the Company provided us (i) executed agreements for the selected funds; and (ii) executed agreements for comparable funds managed by the Group for Independent Third Parties. We noted from the aforesaid documents that the rates of management and advisory fee, and performance fee (if any) of the selected funds were not less than those of the funds managed by the Group for Independent Third Parties.

LETTER FROM GRAM CAPITAL

Based on the information provided by the Company, the historical distribution fee of the Distribution Services was approximately HK$0.05 million for FY2022 (the “FY2022 Distribution Fee”) and there was no distribution fee charged for FY2023 and the nine months ended 30 September 2024 (“9M2024”) as there was no Distribution Services provided during such periods. Upon our request, the Company provided us distribution agreement in respect of the FY2022 Distribution Fee and distribution agreement of a comparable distribution service provided by Independent Third Party. We noted from the aforesaid documents that the rate of distribution fee in respect of the FY2022 Distribution Fee was not higher than that charged by Independent Third Party.

(b) Underwriting Services

Pricing basis

With respect to the Underwriting Services, the Group will charge China Minsheng Group an underwriting fee. Details of the payment and pricing terms of the Underwriting Services will be specified in the individual underwriting agreement and will be negotiated on an arm's length basis between the Group and China Minsheng Group and on terms no less favourable to the Group than those offered to Independent Third Parties. In deciding the underwriting fee, the Group shall take into account the prevailing market rates, the size of the securities to be issued, its complexities, the market condition, the market responses, competition from other underwriters, the number of underwriting projects provided or to be provided by China Minsheng Group and the fees chargeable by the Group to other Independent Third Party issuers of similar size as China Minsheng Group for similar services. Since the underwriting market is highly competitive and the underwriting fees and commissions are transparent and standardized across the market, the Group can adopt a market-based pricing approach.

Settlement terms

Unless otherwise specified in the individual agreement, the underwriting fees or commission shall be deducted from the proceeds after completion of the respective transaction of China Minsheng Group.

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LETTER FROM GRAM CAPITAL

Internal control

With reference to the Board Letter, to ensure that the terms for the Underwriting Services are conducted on normal commercial terms and in accordance with the terms of the Service Agreement and are in the interest of the Group, the Company has adopted the measures as set out under the subsection headed “(b) Underwriting Services – Internal Control” of the section headed “2. The Service Agreement” in the Board Letter.

With reference to the Board Letter and as confirmed by the Directors, during FY2022, FY2023 and 9M2024, the Group was only engaged by China Minsheng to provide the Underwriting Services for China Minsheng’s issuance of (i) RMB2,000 million 3.15% notes due 2025 in January 2023; (ii) RMB3,000 million 3.08% notes due 2026 in March 2024; and (iii) US$300 million floating rate notes due 2027 in September 2024 (the “Historical Engagements”).

For our due diligence purpose, we requested and the Company provided appointment letters/fee letters in respect of the three Historical Engagements and three comparable underwriting engagements for underwriting services provided by the Group to Independent Third Parties. We noted from the aforesaid documents that the underwriting commission rates in respect of the three Historical Engagements were not less than those charged by the Group for underwriting services provided to Independent Third Parties.

(c) Deposit Services

Pursuant to the Service Agreement, China Minsheng Group agreed to provide Deposit Services to the Group as contemplated under the Service Agreement.

Pricing basis

The interest rate to be paid by China Minsheng Group for the Group’s deposits with China Minsheng Group pursuant to the Service Agreement shall be determined based on the prevailing deposit interest rate promulgated by China Minsheng Group for the same period and should not be lower than the deposit interest rates offered by other major commercial banks in Hong Kong or the PRC for deposits in similar nature.

Internal control

With reference to the Board Letter, to ensure that the terms for the Deposit Services are conducted on normal commercial terms and in accordance with the terms of the Service Agreement and are in the interest of the Group, the Company has adopted the measures as set out under the sub-section headed “(c) Deposit Services – Internal Control” of the section headed “2. The Service Agreement” in the Board Letter.

41 -

LETTER FROM GRAM CAPITAL

For our due diligence purpose, we obtained lists of the Group's bank accounts in China Minsheng Group as at 31 December 2022 and 31 December 2023 and 30 September 2024. We randomly selected a bank account from each of the list as at 31 December 2022 and 31 December 2023 and 30 September 2024 and the Company provided us a deposit record of such account with China Minsheng Group and the interest rate offered by independent third party banks the Group obtained before placing such deposits. We noted from the aforesaid documents that the interest rates offered by China Minsheng Group were not less than those offered by independent third party banks.

With reference to the 2023 Annual Report, in accordance with Rule 14A.56 of the Listing Rules, the Company engaged the auditors to report on the Group's continuing connected transactions (including the Listco AM Services, the Underwriting Services and the Deposit Services) for FY2023 in accordance with Hong Kong Standard on Assurance Engagement 3000 (Revised) "Assurance Engagements Other Than Audits or Reviews of Historical Financial Information" ("HKSAE 3000 (Revised)") and with reference to Practice Note 740 (Revised) "Auditor's letter on Continuing Connected Transactions under the Hong Kong Listing Rules" ("PN740 (Revised)") issued by the Hong Kong Institute of Certified Public Accountants. The auditors have reported to the Directors in accordance with HKSAE 3000 (Revised) and with reference to PN740 (Revised) that the Group's continuing connected transactions (including the Listco AM Services, the Underwriting Services and the Deposit Services): (i) have been approved by the Board; (ii) are, in all material respects, in accordance with the pricing policies of the Group for the transactions involving the provision of goods or services by the Group; (iii) have been entered into, in all material respects, in accordance with the relevant agreements governing such transactions; and (iv) have not exceeded the relevant annual caps approved by the independent Shareholders at the special general meeting of the Company.

With reference to the 2023 Annual Report, the independent non-executive Directors have reviewed and confirmed that the Group's continuing connected transactions (including the Listco AM Services, the Underwriting Services and the Deposit Services) for FY2023 were entered into: (i) in the ordinary and usual course of business of the Group; (ii) on normal commercial terms or better; and (iii) in accordance with the relevant agreements governing them on terms that are fair and reasonable and in the interests of the Shareholders of the Company as a whole.

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LETTER FROM GRAM CAPITAL

Proposed Annual Caps

(a) Listco AM Services

Set out below are (i) the existing annual caps of the Listco AM Services for the three years ending 31 December 2024; and (ii) the historical fees charged for the two years ended 31 December 2023 and 9M2024 as extracted from the Board Letter:

	For the year ended 31 December 2022			For the year ended 31 December 2023			For the year ending 31 December 2024 (FY2024)
	Historical amount HK$ million	Existing annual cap HK$ million	Utilisation rate %	Historical amount HK$ million	Existing annual cap HK$ million	Utilisation rate %	Historical amount (Note) HK$ million	Existing annual cap HK$ million	Utilisation rate %
Listco AM Services
- Distribution fees	0.05	62	0.1	-	68.2	-	-	75.02	Undetermined
- Management fees and advisory fees	147.08	148.8	98.8	116.45	178.56	65.2	80.03	214.27	Undetermined
- Performance fees	12.69	74.4	17.1	2.27	89.28	2.5	-	107.14	Undetermined

Note: The figures were for 9M2024

Set out below are the Proposed Annual Caps of the Listco AM Services, including Proposed Annual Caps of (i) distribution fee (the "Distribution Fees Cap(s)"; (ii) management fees and advisory fees (the "Mgt & Advisory Fees Cap(s)"; and (iii) performance fees (the "Performance Fees Cap(s)"), for the three years ending 31 December 2027 as extracted from the Board Letter:

| | For the year ending 31 December 2025
(“FY2025”)
HK$ million | For the year ending 31 December 2026
(“FY2026”)
HK$ million | For the year ending 31 December 2027
(“FY2027”)
HK$ million |
| --- | --- | --- | --- |
| Proposed Annual Caps | | | |
| Listco AM Services | | | |
| - Distribution fees | 3 | 3 | 3 |
| - Management fees and advisory fees | 193 | 194 | 195 |
| - Performance fees | 45 | 45 | 45 |

With reference to the Board Letter, the Proposed Annual Caps of the Listco AM Services for the three years ending 31 December 2027 were determined with reference to the factors as set out under the sub-section headed "1. Listco AM Services" of the section headed "Basis of the Proposed Annual Caps" in the Board Letter.

LETTER FROM GRAM CAPITAL

Distribution Fees Caps

As aforementioned, the historical distribution fee of the Distribution Services was approximately HK$0.05 million for FY2022 and there was no distribution fee charged for FY2023 and the 9M2024 as there was no Distribution Services provided during such periods. With reference to the Board Letter and as confirmed by the Directors, the said situation was mainly due to declined demand of funds managed by the Group as investors became more cautious in investment in light of the US$ interest rate hike cycle.

With reference to the Board Letter, despite the minimal utilisation of the existing annual caps of the distribution fee as mentioned above, the Group does not rule out the possibility in incurring any distribution fees, as the business volume of the distributions to be provided by China Minsheng Group may depend on the performance of the Funds, which is affected by the prevailing market conditions. Accordingly, the Distribution Fees Caps for the three years ending 31 December 2027 are set at HK$3 million per annum, to cater the possibility in distribution of funds by China Minsheng Group, particularly when the market condition becomes more favourable to the performance of the Funds and new funds are introduced by the Group.

Upon our enquiry, the Directors advised us that a wholly-owned subsidiary of the Company provided distribution services in respect of the funds managed by the Group during FY2022, FY2023 and 9M2024 and the distribution fees incurred were approximately HK$2.6 million for FY2022, approximately HK$1.8 million for FY2023 and approximately HK$1.6 million for 9M2024.

The aforesaid amounts of intra-group distribution fees indicated the possible distribution fees to be charged under the Distribution Services, should there be distribution conducted by China Minsheng Group. Accordingly, we are of the view that the Distribution Fees Caps of HK$3 million per annum for the three years ending 31 December 2027 are fair and reasonable.

Mgt & Advisory Fees Caps

As depicted from the above table, the management fees and advisory fees charged under the Listco AM Services were approximately HK$147.08 million for FY2022 and approximately HK$116.45 million for FY2023, representing utilisation rates of approximately 98.8% and approximately 65.2% of the existing annual caps for FY2022 and FY2023 respectively.

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LETTER FROM GRAM CAPITAL

With reference to the Board Letter, taking into account the management fees and the advisory fees of approximately HK$80.03 million for 9M2024 and the adjustments of the terms of pricing of the certain Current Funds in July 2024 (the "Pricing Adjustments"), the estimated management fees and advisory fees will be approximately HK$137.91 million for FY2024, representing an estimated existing annual cap utilisation rate of approximately 64.4%.

For our due diligence purpose, we obtained from the Company the estimated management fees and advisory fees for FY2024 based on the assumption that the Pricing Adjustments took effect from 1 January 2024 and its underlying calculation. Based on the said calculation, the estimated management fees and advisory fees for FY2024 would be approximately HK$176.1 million, based on the assumption that the Pricing Adjustments took effect from 1 January 2024.

We also obtained from the Company the calculation of estimated management fees and advisory fees of approximately HK$175.7 million for FY2025, HK$176.3 million for FY2026 and HK$176.8 million for FY2027. Based on the said calculation, such management fees and advisory fees were estimated based on (i) the estimated management fees and advisory fees for FY2024 assuming that the Pricing Adjustments took effect from 1 January 2024; (ii) stable management fees and advisory fees to be charged for most of the Current Funds which are expected to maintain their size of AUM; and (iii) annual growth of 7% in management fees and advisory fees to be charged for a small proportion of the Current Funds which may increase their AUM in future. With reference to the Board Letter and as confirmed by the Directors, AUM of the Current Funds increased by approximately 7% from 30 September 2023 to 30 September 2024. Accordingly, we consider such adopted annual growth of 7% to be justifiable.

The Company applied a buffer of 10% (the "Buffer") on the estimated management fees and advisory fees for the three years ending 31 December 2027 and set the Mgt & Advisory Fees Caps of HK$193 million for FY2025, HK$194 million for FY2026 and HK$195 million for FY2027. We noted from other Hong Kong listed companies' circulars regarding continuing connected transactions that the incorporation of buffer of 10% in determining proposed annual caps is not uncommon among Hong Kong listed companies. Accordingly, we consider the Buffer to be justifiable.

Having considered the above, we are of the view that the Mgt & Advisory Fees Caps for the three years ending 31 December 2027 are fair and reasonable.

45 -

LETTER FROM GRAM CAPITAL

Performance Fees Caps

As depicted from the above table, the performance fees charged under the Listco AM Services were approximately HK$12.69 million for FY2022 and approximately HK$2.27 million for FY2023, representing utilisation rates of approximately 17.1% and approximately 2.5% of the existing annual caps for FY2022 and FY2023 respectively. There was no performance fees charged under the Listco AM Services for 9M2024. As advised by the Directors, the above situation was mainly due to that the performance of the Funds were adversely affected by market conditions.

With reference to the Board Letter and as confirmed by the Directors, it is estimated that for FY2024, the Group will charge China Minsheng Group approximately HK$48.18 million for the performance fees, mainly because the Federal Reserve has started the rate cut cycle in September 2024, leading to the outperformance of equity and fixed income market, which improved the performance of the Funds.

For our due diligence purpose, we obtained from the Company calculation of the above estimated performance fees to be charged for FY2024 and the estimated performance fees to be charged for the three years ending 31 December 2027. According to the calculation, the performance fees to be charged for FY2024 were estimated by annualising the year-to-date yields of relevant Funds as at 31 October 2024 and predetermined performance fee rates. The performance fees to be charged for the three years ending 31 December 2027 were also estimated based on the same annualised yields of relevant Funds for FY2024 and the same predetermined performance fee rates.

The estimated performance fees to be charged for the three years ending 31 December 2027 are approximately HK$40.54 million per annum, which is lower than the estimated performance fees to be charged for FY2024. As advised by the Directors, this is mainly due to the Pricing Adjustments which are expected to increase management fees and advisory fees thus affected the net return of relevant Funds for the calculation of performance fees.

The Company applied the Buffer of 10% on the estimated performance fees for the three years ending 31 December 2027 and set the Performance Fees Caps of HK$45 million per annum. We noted from other Hong Kong listed companies' circulars regarding continuing connected transactions that the incorporation of buffer of 10% in determining proposed annual caps is not uncommon among Hong Kong listed companies. Accordingly, we consider the Buffer to be justifiable.

Having considered the above, we are of the view that the Performance Fees Caps for the three years ending 31 December 2027 are fair and reasonable.

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LETTER FROM GRAM CAPITAL

(b) Underwriting Services

Set out below are (i) the existing annual caps of the Underwriting Services for the three years ending 31 December 2024; and (ii) the historical fees charged for the two years ended 31 December 2023 and 9M2024 as extracted from the Board Letter:

	For the year ended 31 December 2022			For the year ended 31 December 2023			For the year ending 31 December 2024
	Historical amount HK$ million	Existing annual cap HK$ million	Utilisation rate %	Historical amount HK$ million	Existing annual cap HK$ million	Utilisation rate %	Historical amount (Note) HK$ million	Existing annual cap HK$ million	Utilisation rate %
Underwriting fees	-	11	-	-	11	-	-	11	Undetermined

Note: The figure was for 9M2024

Set out below are the Proposed Annual Caps for the Underwriting Services (fees) (the "Underwriting Fees Caps") for the three years ending 31 December 2027 as extracted from the Board Letter:

	For the year ending 31 December 2025 HK$ million	For the year ending 31 December 2026 HK$ million	For the year ending 31 December 2027 HK$ million
Underwriting Fees Caps	6	6	6

As aforementioned, the Group was engaged by China Minsheng to provide the Underwriting Services for China Minsheng's issuance of (i) RMB3,000 million 3.08% notes due 2026 in March 2024; and (ii) US$300 million floating rate notes due 2027 in September 2024. With reference to the Board Letter, it is expected that the respective principal amount of bonds to be issued by China Minsheng Group for the three years ending 31 December 2027 will be approximately HK$10.9 billion, HK$10.9 billion and HK$10.9 billion, respectively, and that the Group will participate in the underwriting of these bonds.

Upon our enquiry, the Directors advised us that the aforesaid expectation is based on the bonds size that China Minsheng Group registered with relevant PRC government authority for 2025. Assuming that the Group successfully underwrites approximately HK$0.55 billion of the aforesaid bonds per annum, the maximum underwriting fees to be charged will be approximately HK$5.5 million per annum (given that the underwriting fee to be charged by the Group under the Underwriting Services shall be within the range of 0.05% to 1% of the monetary value of the securities underwritten pursuant to the Group's internal control measures).

LETTER FROM GRAM CAPITAL

The Company applied the Buffer of 10% on the expected maximum underwriting fees for the three years ending 31 December 2027 and set the Underwriting Fees Caps of HK$6 million per annum. We noted from other Hong Kong listed companies' circulars regarding continuing connected transactions that the incorporation of buffer of 10% in determining proposed annual caps is not uncommon among Hong Kong listed companies. Accordingly, we consider the Buffer to be justifiable.

Having considered the above, we are of the view that the Underwriting Fees Caps for the three years ending 31 December 2027 are fair and reasonable.

Set out below are (i) the existing annual caps of the Deposit Services for the three years ending 31 December 2024; and (ii) the historical transaction amounts for the two years ended 31 December 2023 and 9M2024 as extracted from the Board Letter:

	For the year ended 31 December 2022			For the year ended 31 December 2023			For the year ending 31 December 2024
	Historical amount HK$ million	Existing annual cap HK$ million	Utilisation rate %	Historical amount HK$ million	Existing annual cap HK$ million	Utilisation rate %	Historical amount (Note) HK$ million	Existing annual cap HK$ million	Utilisation rate %
Deposit Services (Maximum daily deposit balance)	417	1,000	41.7	374	1,000	37.4	519	1,000	Undetermined

Note: The figure was for 9M2024

Set out below are the proposed annual caps for the Deposit Services (the "Deposit Caps") for the three years ending 31 December 2027 as extracted from the Board Letter:

	For the year ending 31 December 2025 HK$ million	For the year ending 31 December 2026 HK$ million	For the year ending 31 December 2027 HK$ million
Deposit Caps	500	500	500

As depicted from the above table, the maximum daily deposit balance placed by the Group with China Minsheng Group was approximately HK$417 million for FY2022, approximately HK$374 million for FY2023 and approximately HK$519 million for 9M2024.

The Deposit Caps of HK$500 million per annum for the three years ending 31 December 2027 were set slightly lower than the maximum daily deposit balance placed by the Group with China Minsheng Group for 9M2024.

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LETTER FROM GRAM CAPITAL

With reference to the Board Letter, the Group's deposits with its banks (including China Minsheng Group) include (a) cash of the Group itself ("Own Cash"); and (b) cash held on behalf of its customers ("Customers Cash").

With reference to the Board Letter and as advised by the Directors:

(i) The Group has an online securities trading system, which includes a function of bank-securities transfer through which the clients can deposit funds to their securities account from their bank accounts with China Minsheng Group directly and instantly with no bank charge.

(ii) The Group also established institutional business department in May 2023, which accumulated a substantial number of institutional clients which are expected to increase. With increase in number of institutional clients, it is expected that there is a higher possibility for the clients to make large amount of deposits in the Group's bank accounts.

(iii) On some occasions, with respect to the Group's underwriting business, the Group may receive proceeds on behalf of the clients (i.e. the issuers) and transfer to their bank accounts within a short period after deducting fees for the sponsors and underwriters.

(iv) In view of the above, the Group considered that there is difficulty for the Group in controlling and predicting the amount of Customers Cash deposited with China Minsheng Group. Therefore, it would be desirable for the Group to set the maximum daily deposit balance limit at a level which is able to cater the internal treasury requirements and any substantial increases in clients' deposits within a short period of time.

With reference to the 2024 Interim Report, as at 30 June 2024, the Group had Own Cash of approximately HK$307 million and Customers Cash of approximately HK$135 million. We noted that the Deposit Caps of HK$500 million per annum exceeds the sum of the Own Cash and Customers Cash as at 30 June 2024. Nevertheless, the Directors advised us that the Own Cash and Customers Cash have been fluctuating from time to time.

Based on the information provided by the Company:

(i) The maximum Own Cash deposited with China Minsheng Group was approximately HK$171 million for FY2022, approximately HK$67 million for FY2023, and approximately HK$86 million for 9M2024.

(ii) The maximum Customers Cash deposited with China Minsheng Group was approximately HK$354 million for FY2022, approximately HK$339 million for FY2023, and approximately HK$475 million for 9M2024.

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LETTER FROM GRAM CAPITAL

(iii) The maximum daily deposit balance placed by the Group with China Minsheng Group of approximately HK$519 million for 9M2024 comprises Own Cash of approximately HK$45 million and Customers Cash of approximately HK$475 million.

The above figures indicated the possible need for the Deposit Caps. Having considered the above, we are of the view that the Deposit Caps for the three years ending 31 December 2027 are fair and reasonable.

Shareholders should note that as the Proposed Annual Caps are relating to future events and were estimated based on assumptions which may or may not remain valid for the entire period up to 31 December 2027, and they do not represent forecasts of fees to be received/charged in respect of the Listco AM Services/the Underwriting Services or deposit amount under the Deposit Services. Consequently, we express no opinion as to how closely the actual fees to be received/charged in respect of the Listco AM Services/the Underwriting Services/deposit amount under the Deposit Services will correspond with the Proposed Annual Caps.

Listing Rules implication

The Directors confirmed that the Company shall comply with the requirements of Rules 14A.53 to 14A.59 of the Listing Rules pursuant to which (i) the fees to be received/charged in respect of the Listco AM Services/the Underwriting Services or deposit amount under the Deposit Services must be restricted by the Proposed Annual Caps; (ii) the terms of the Services (including the Proposed Annual Caps) must be reviewed by the independent non-executive Directors annually; and (iii) details of independent non-executive Directors' annual review on the terms of the Services must be included in the Company's subsequent published annual reports and financial accounts. Furthermore, it is also required by the Listing Rules that the auditors of the Company must provide a letter to the Board confirming, among other things, whether anything has come to their attention that causes them to believe that the Services (i) have not been approved by the Board; (ii) were not, in all material respects, in accordance with the pricing policies of the Group if the transactions involve the provision of goods or services by the Group; and (iii) were not entered into, in all material respects, in accordance with the relevant agreement governing the Services; and (iv) have exceeded the Proposed Annual Caps. In the event that the fees to be received/charged in respect of the Listco AM Services/the Underwriting Services or deposit amount under the Deposit Services are anticipated to exceed the Proposed Annual Caps, or that there is any proposed material amendment to the terms of the Services, as confirmed by the Directors, the Company shall comply with the applicable provisions of the Listing Rules governing continuing connected transaction.

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LETTER FROM GRAM CAPITAL

Given the above stipulated requirements for continuing connected transactions pursuant to the Listing Rules, we are of the view that there are adequate measures in place to monitor the Services and thus the interest of the Independent Shareholders would be safeguarded.

RECOMMENDATION

Having taken into consideration the factors and reasons as stated above, we are of the opinion that (i) the terms of the Services (including the Proposed Annual Caps) are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned; and (ii) the Services are conducted in the ordinary and usual course of business of the Group and are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the resolution to be proposed at the SGM to approve the Service Agreement and the Services (including the Proposed Annual Caps) and we recommend the Independent Shareholders to vote in favour of the resolution in this regard.

Yours faithfully,
For and on behalf of
Gram Capital Limited
Graham Lam
Managing Director

Notes: Mr. Graham Lam is a licensed person registered with the Securities and Futures Commission and a responsible officer of Gram Capital Limited to carry out Type 6 (advising on corporate finance) regulated activity under the SFO. He has around 30 years of experience in investment banking industry.

51 -

APPENDIX I

FINANCIAL INFORMATION

1. FINANCIAL INFORMATION OF THE GROUP

Details of the financial information of the Group for each of the years ended 31 December 2021, 2022 and 2023 and for the six months ended 30 June 2024 are disclosed in the annual reports of the Company for the years ended 31 December 2021, 2022 and 2023 and interim report of the Company for the six months ended 30 June 2024, respectively. These annual reports and interim report are published on the website of the Stock Exchange (www.hkexnews.hk) and the website of the Company (www.cmbccap.com):

annual report of the Company for the year ended 31 December 2021 published on 29 April 2022, pages 95 to 206;
annual report of the Company for the year ended 31 December 2022 published on 27 April 2023, pages 104 to 215;
annual report of the Company for the year ended 31 December 2023 published on 30 April 2024, pages 101 to 213; and
interim report of the Company for the six months ended 30 June 2024 published on 27 September 2024, pages 25 to 60.

2. INDEBTEDNESS

As at the close of business on 31 October 2024, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group had the following credit borrowings and lease liabilities of approximately HK$2,256.9 million, details of which are as follows:

| | At 31
October 2024
HK$ million
(unaudited) |
| --- | --- |
| Loan from intermediate holding company,
unsecured and unguaranteed | 1,219.0 |
| Financial assets sold under repurchase agreements,
secured and guaranteed | 993.4 |
| Lease liabilities, unsecured and unguaranteed | 44.5 |
| Total | 2,256.9 |

APPENDIX I

FINANCIAL INFORMATION

Pledged Assets

As at 31 October 2024, borrowings under financial assets sold under repurchase agreements are 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, financial assets at fair value through other comprehensive income and financial assets at amortised cost with total carrying amounts of approximately HK$1,174.7 million.

Save as aforesaid, and apart from intra-group liabilities, at the close of business on 31 October 2024, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group did not have any other debt securities, any outstanding loan capital, any borrowings or indebtedness in the nature of borrowings including bank overdrafts and liabilities under acceptances (other than normal trade bills) or other similar indebtedness, debentures, mortgages, charges, finance leases or hire purchase commitments, guarantees or other material contingent liabilities.

3. WORKING CAPITAL

The Directors are of the opinion that, after taking into account of the Group's internal resources, cash flow from operations, the present facilities available and the effect of the transactions under the Service Agreement, the working capital available to the Group is sufficient for the Group's requirements for at least 12 months from the date of this circular.

4. EFFECT OF THE DEPOSIT SERVICES UNDER THE SERVICE AGREEMENT ON THE EARNINGS AND ASSETS AND LIABILITIES OF THE GROUP

As a result of the Deposit Services provided to the Group, it is expected that the Group's assets will increase by the interest income received and there will not be any material financial effects on the Group's liabilities. Given these financial effects, the Directors are of the view that there will be no significant adverse impact on the net asset value of the Group. Since the interest income will be received by the Group for its deposits with China Minsheng Group, the earnings of the Group will increase by an amount equivalent to such interest income deriving from such deposits. Given these financial effects, the Directors expect that there will be no significant adverse impact on the Group's consolidated profit or loss account.

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

During the year ended 31 December 2023, the Group's total revenue (including net gains or losses from investment) was approximately HK$155.7 million, representing a decrease of approximately 70.0% from approximately HK$519.9 million for the year ended 31 December 2022, the net loss for the year ended 31 December 2023 was approximately HK$572.3 million, representing an increase of approximately 31.1% from approximately HK$436.6 million for the year ended 31 December 2022.

53 -

APPENDIX I

FINANCIAL INFORMATION

Looking ahead, the global economy is expected to maintain solid growth in 2025. Global market liquidity will improve as inflation tends to decline and policy rates in major countries and regions turn downward. Technological revolutions such as artificial intelligence and commercial aerospace will continue to drive the development of a vibrant new economy, bringing with them a wide range of capital market opportunities. However, geopolitical tensions remain an uncertain factor affecting regional economies and financial markets. With a series of over-expected growth stabilisation policies being rolled out around the National Day in 2024, it is expected that the traditional economy, including the real estate sector, will gradually stabilise, while technology and consumerism will become the new drivers of economic growth.

6. MATERIAL ADVERSE CHANGE

The Directors confirm that there are no material adverse change in the financial or trading position of the Group since 31 December 2023, being the date to which the latest published audited accounts of the Group were made up to, up to and including the Latest Practicable Date.

54 -

APPENDIX II
GENERAL INFORMATION

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. DISCLOSURE OF INTERESTS

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 C3 to the Listing Rules, to be notified to the Company and the Stock Exchange.

55 -

APPENDIX II

GENERAL INFORMATION

Interests and Short Positions of Substantial Shareholders

As at the Latest Practicable Date, according to the register kept by the Company pursuant to Section 336 of the SFO and, so far as is known to the Directors or chief executive of the Company, the following Shareholders (other than a Director or chief executive of the Company) had interests or short positions in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who was, directly or indirectly, interested in 10% or more of the issued voting shares of any other member of the Group:

Name of Shareholder	Capacity/nature of interest	Number of Shares held	Approximate percentage of the issued Shares of the Company	Long position/Short position
China Minsheng	Interest of controlled corporations	760,588,477 (Note)	69.19%	Long position
CMBC International Holdings Limited (“CMBCI”)	Interest of controlled corporation	758,166,477 (Note)	68.97%	Long position
	Beneficial owner	2,422,000 (Note)	0.22%	Long position
		760,588,477	69.19%
CMBC International Investment (HK) Limited	Interest of controlled corporation	758,166,477 (Note)	68.97%	Long position
CMBC International Investment Limited	Beneficial owner	758,166,477 (Note)	68.97%	Long position

Note: CMBC International Investment Limited is beneficially and wholly-owned by CMBC International Investment (HK) Limited, which is in turn beneficially and wholly-owned by CMBCI. CMBCI is beneficially and wholly-owned by China Minsheng. As such, each of CMBC International Investment (HK) Limited, CMBCI and China Minsheng is deemed to be interested in the Shares held by CMBC International Investment Limited and China Minsheng is deemed to be interested in the Shares held by CMBCI.

APPENDIX II

GENERAL INFORMATION

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or the chief executive of the Company was aware of any other person, other than a Director or the chief executive of the Company, who had interests or short positions in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 10% or more of the issued voting shares of any other member of the Group, or which was recorded in the register required to be kept by the Company pursuant to section 336 of the SFO.

3. DIRECTORS' INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors or any of their respective close associates (as defined in the Listing Rules) was interested in any business (apart from the Group's business) which competes or is likely to compete, either directly or indirectly, with the Group's business.

4. DIRECTORS' INTERESTS IN THE GROUP'S ASSETS OR CONTRACTS OR ARRANGEMENTS

As at the Latest Practicable Date, none of the Directors had any interest in any assets which have been, since 31 December 2023 (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, there was no contract or arrangement subsisting in which any of the Directors was materially interested and was significant in relation to the business of the Group.

5. LITIGATION

As at the Latest Practicable Date, neither the Company nor any member of the Group was engaged in any litigation or arbitration of material importance and, so far as the Directors were aware, there was no litigation or claim of material importance pending or threatened by or against the Company or any member of the Group.

APPENDIX II

GENERAL INFORMATION

6. QUALIFICATION AND CONSENT OF EXPERT

(a) The following is the qualification of the expert who has given an opinion or advice which is contained in this circular:

Name	Qualification
Gram Capital Limited	A licensed corporation to carry out type 6 (advising on corporate finance) regulated activity under the SFO

(b) As at the Latest Practicable Date, Gram Capital:

i. did not have any shareholding directly or indirectly in any member of the Group;

ii. did not have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group; and

iii. did not have any interest, either directly or indirectly, in any assets which have been, since 31 December 2023 (being the date to which the latest published audited accounts of the Company were made up), acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

(c) As at the Latest Practicable Date, Gram Capital has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter and reference to its name and letter, where applicable, in the form and context in which it appears.

7. 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 a year without payment of any compensation (other than statutory compensation)).

APPENDIX II

GENERAL INFORMATION

8. MATERIAL CONTRACTS

The following material contracts, not being contracts entered into in the ordinary course of business of the Group, have been entered into by members of the Group within two years immediately preceding the Latest Practicable Date and are or may be material:

an office sharing agreement dated 9 December 2022 entered into between the Company and CMBCI (a controlling Shareholder of the Company and a wholly owned subsidiary of China Minsheng), in relation to the Company's grant to CMBCI a non-exclusive right to use an area of approximately 2,000 square feet of an office share space, of which the Company is the tenant, at a sharing fees of HK$740,000 per month payable by CMBCI to the Company; and
the Service Agreement.

9. DOCUMENTS ON DISPLAY

Copies of the following documents will be available on (i) the website of the Company (www.cmbccap.com) and (ii) the website of the Stock Exchange (www.hkexnews.com) during the period of 14 days from the date of this circular:

(a) the written consent of the expert referred to under the section headed "Qualification and Consent of Expert" in this appendix; and
(b) the material contacts referred to in the paragraph headed "Material Contracts" in this appendix.

10. MISCELLANEOUS

(a) The registered office of the Company is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.
(b) The company secretary of the Company is Mr. Wong Tin Yu, an associate of The Hong Kong Chartered Governance Institute.
(c) The Company's head office and principal place of business in Hong Kong is at 45/F, One Exchange Square, 8 Connaught Place, Central, Hong Kong.
(d) The branch share registrar of the Company is, Tricor Tengis Limited, 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong.
(e) The English texts of this circular shall prevail over the Chinese texts.

59 -

NOTICE OF SPECIAL GENERAL MEETING

民銀資本控股有限公司

CMBC CAPITAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1141)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT a special general meeting (the "SGM") of CMBC Capital Holdings Limited (the "Company") will be held at 45/F, One Exchange Square, 8 Connaught Place, Central, Hong Kong, on Tuesday, 31 December 2024 at 10:00 a.m. for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolution of the Company.

ORDINARY RESOLUTION

"THAT

(i) the service agreement (the "Service Agreement") dated 29 November 2024 entered into between the Company and China Minsheng Banking Corp., Ltd. in relation to the provision and acceptance of certain services (the "Services") by the Company and its subsidiaries (a copy of the Service Agreement which marked "A" has been tabled before the meeting and initialed by the chairman of the meeting for identification purpose), and the transactions contemplated thereunder, be and are hereby approved, confirmed and ratified;

(ii) the proposed annual caps for each of the three years ending 31 December 2027, respectively, for the Services to be provided under the Service Agreement, be and are hereby approved, confirmed and ratified;

(iii) any one director of the Company (the "Director") be and is hereby authorised, for and on behalf of the Company, to take all steps necessary or expedient in his opinion to implement and/or give effect to the terms of the Service Agreement; and

60 -

NOTICE OF SPECIAL GENERAL MEETING

(iv) any one Director be and is hereby authorised, for and on behalf of the Company, to execute all such other documents, instruments and agreements and to do all such acts or things deemed by them to be incidental to, ancillary to or in connection with the matters contemplated under the Service Agreement and to agree to any amendment to any of the terms of the Service Agreement which in the opinion of the Directors is not of a material nature and is in the interests of the Company."

By Order of the Board
CMBC Capital Holdings Limited
Li Baochen
Chairman

Hong Kong, 13 December 2024

Notes:

Any member of the Company entitled to attend and vote at the SGM is entitled to appoint another person as his/her proxy to attend and vote instead of him/her. A member of the Company who is the holder of two or more shares may appoint more than one proxy to represent him/her and vote on his/her behalf at the SGM. A proxy need not be a member of the Company. In addition, a proxy or proxies representing either a member of the Company who is an individual or a member of the Company which is a corporation is entitled to exercise the same powers on behalf of the member of the Company which he/she or they represent as such member of the Company could exercise.
The form of proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorised in writing or, if the appointor is a corporation, either under its common seal or under the hand of an officer, attorney or other person authorised to sign the same. In the case of a form of proxy purporting to be signed on behalf of a corporation by an officer thereof it shall be assumed, unless the contrary appears, that such officer was duly authorised to sign such form of proxy on behalf of the corporation without further evidence of the fact.
For determining the entitlement to attend and vote at the SGM, the register of members of the Company will be closed from Tuesday, 24 December 2024 to Tuesday, 31 December 2024, both days inclusive, during which period no transfer of shares will be registered. In order to be eligible to attend and vote at the SGM, unregistered holders of shares should ensure that all the share transfer documents accompanied by the relevant share certificates must be lodged with the Company's branch share registrar in Hong Kong, Tricor Tengis Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong for registration not later than 4:30 p.m. on Monday, 23 December 2024.
The form of proxy and (if required by the Board of Directors of the Company) the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power or authority, shall be delivered to the Company's branch share registrar in Hong Kong, Tricor Tengis Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as possible and in any event not less than forty-eight (48) hours before the time fixed for holding the SGM or adjourned meeting thereof at which the person named in the form of proxy proposes to vote, and in default the form of proxy shall not be treated as valid.
61 -

NOTICE OF SPECIAL GENERAL MEETING

Delivery of a form of proxy shall not preclude a member of the Company from attending and voting in person at the SGM convened and in such event, the form of proxy shall be deemed to be revoked.
Where there are joint holders of any share, any one of such joint holders may vote at the SGM, either in person or by proxy, in respect of such share as if he/she were solely entitled thereto, but if more than one of such joint holders be present at the SGM the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

As at the date hereof, the executive Directors are Mr. Li Baochen, Mr. Li Ming and Mr. Ng Hoi Kam, the non-executive Director is Mr. Yang Kunpeng, and the independent non-executive Directors are Mr. Lee, Cheuk Yin Dannis, Mr. Wu Bin and Mr. Wang Lihua.

62 -

AI assistant

PegBio Co., Ltd. — Proxy Solicitation & Information Statement 2024

50676_rns_2024-12-12_d0544aa0-a2c1-45c8-a808-c90712f9fec9.pdf

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

民銀資本

CMBC CAPITAL HOLDINGS LIMITED

(I) MAJOR AND CONTINUING CONNECTED TRANSACTIONS UNDER THE SERVICE AGREEMENT

(II) NOTICE OF SPECIAL GENERAL MEETING

I. INTRODUCTION

II. MAJOR AND CONTINUING CONNECTED TRANSACTIONS UNDER THE SERVICE AGREEMENT

1. Introduction

2. The Service Agreement

Parties

Date

Duration

General Principle

Individual Service Contract

Settlement Terms

Internal Control

Historical Annual Caps and Transaction Amounts

Proposed Annual Caps

Basis of the Proposed Annual Caps

1. Listco AM Services

(i) Management fee

2. Underwriting Services

3. Deposit Services

4. Other factors

3. Reasons for and Benefits of Entering into the Service Agreement

4. Listing Rules Implications

5. General Information

III. CLOSURE OF REGISTER OF MEMBER

IV. THE SGM AND VOTING AT THE SGM

V. ACTION TO BE TAKEN

VI. RECOMMENDATIONS

VII. ADDITIONAL INFORMATION

民銀資本

CMBC CAPITAL HOLDINGS LIMITED

MAJOR AND CONTINUING CONNECTED TRANSACTIONS UNDER THE SERVICE AGREEMENT

MAJOR AND CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

BASIS OF OUR OPINION

PRINCIPAL FACTORS AND REASONS CONSIDERED

Information on the Group

Information on China Minsheng

Reasons for and benefits of entering into the Service Agreement

Principal terms of the Services

Agreement date

Parties

Duration

General principle

Individual service contract

(a) Listco AM Services

Pricing basis

Settlement terms

Internal control

Internal control

(c) Deposit Services

Pricing basis

Internal control

Proposed Annual Caps

(a) Listco AM Services

Distribution Fees Caps

Mgt & Advisory Fees Caps

Performance Fees Caps

(b) Underwriting Services

Listing Rules implication

RECOMMENDATION

1. FINANCIAL INFORMATION OF THE GROUP

2. INDEBTEDNESS

Pledged Assets

3. WORKING CAPITAL

4. EFFECT OF THE DEPOSIT SERVICES UNDER THE SERVICE AGREEMENT ON THE EARNINGS AND ASSETS AND LIABILITIES OF THE GROUP

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

6. MATERIAL ADVERSE CHANGE

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

Interests and Short Positions of Directors and Chief Executive

PegBio Co., Ltd. Proxy Solicitation & Information Statement 2024