Pharmaron Beijing Co., Ltd — Capital/Financing Update 2021

Jun 9, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement is for information purposes only and does not constitute an invitation or solicitation of an offer to acquire, purchase or subscribe for securities or an invitation to enter into an agreement to do any such things, nor is it calculated to invite any offer to acquire, purchase or subscribe for any securities.

This announcement is not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia). This announcement and the information herein do not constitute or form a part of any offer or solicitation to purchase, subscribe or sell securities in the United States. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the “ Securities Act ”), or the securities laws of any state of the United States or other jurisdiction. The securities referred to herein will be offered and sold outside the United States in reliance on Regulation S under the Securities Act (the “ Regulation S ”) and may not be offered or sold within the United States absent registration or an applicable exemption from registration under the Securities Act. No public offering of the securities referred to herein is being or will be made in the United States or in any other jurisdiction where such an offering is restricted or prohibited. No money, securities or other consideration is being solicited by this announcement or the information contained herein and, if sent in response to this announcement or the information contained herein, will not be accepted.

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Pharmaron Beijing Co., Ltd.* 康龍化成 ( 北京 ) 新藥技術股份有限公司 (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 3759)

PROPOSED ISSUE OF (i) US$300.0 MILLION ZERO COUPON CONVERTIBLE BONDS DUE 2026 AND (ii) RMB1,916.0 MILLION US$ SETTLED ZERO COUPON CONVERTIBLE BONDS DUE 2026

Joint Global Coordinators, Joint Lead Managers and Joint Bookrunners

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Joint Lead Managers and Joint Bookrunners

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1

This announcement is made by the Company pursuant to Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and Rule 13.09 of the Listing Rules.

Reference is made to the announcement of the Company dated June 8, 2021 in relation to the proposed issue of (i) USD-denominated convertible bonds and (ii) RMB-denominated USD-settled convertible bonds.

On June 8, 2021 (after trading hours), the Company and the Joint Lead Managers entered into the Subscription Agreement, pursuant to which and subject to certain conditions contained therein, the Company has agreed to issue, and the Joint Lead Managers have severally and not jointly agreed to subscribe and pay for, or to procure subscribers to subscribe and pay for, the Series 1 Bonds in a principal amount of US$300.0 million and Series 2 Bonds in a principal amount of RMB1,916.0 million.

The Series 1 Bonds and Series 2 Bonds are convertible in the circumstances set out in the Terms and Conditions into H Shares at an initial Series 1 Bonds Conversion Price and the Series 2 Bonds Conversion Price of HK$250.75 per H Share and HK$229.50 per H Share (subject to adjustments), respectively.

The initial Series 1 Bonds Conversion Price is HK$250.75 per H Share, which represents (i) a premium of 41.27% over the last closing price of HK$177.50 per H Share as quoted on the Hong Kong Stock Exchange on June 8, 2021 (being the trading day on which the Subscription Agreement was signed) and (ii) a premium of approximately 39.01% over the average closing price of HK$180.38 as quoted on the Hong Kong Stock Exchange for the five consecutive trading days up to and including June 8, 2021.

The initial Series 2 Bonds Conversion Price is HK$229.50 per H Share, which represents (i) a premium of 29.30% over the last closing price of HK$177.50 per H Share as quoted on the Hong Kong Stock Exchange on June 8, 2021 (being the trading day on which the Subscription Agreement was signed) and (ii) a premium of approximately 27.23% over the average closing price of HK$180.38 as quoted on the Hong Kong Stock Exchange for the five consecutive trading days up to and including June 8, 2021.

Assuming full conversion of the Series 1 Bonds at the initial Series 1 Bonds Conversion Price of HK$250.75 per H Share, the Series 1 Bonds will be convertible into approximately 9,282,711 H Shares, representing approximately 6.93% of the total issued H share capital of the Company as at the date of this announcement and approximately 6.48% of the enlarged total issued H share capital of the Company resulting from the full conversion of the Series 1 Bonds but before the conversion of the Series 2 Bonds. The Series 1 Bonds Conversion Shares will be fully-paid and rank pari passu in all respects with the H Shares then in issue on the relevant registration date.

Assuming full conversion of the Series 2 Bonds at the initial Series 2 Bonds Conversion Price of HK$229.50 per H Share, the Series 2 Bonds will be convertible into approximately 10,137,685 H Shares, representing approximately 7.56% of the total issued H share capital of the Company as at the date of this announcement and approximately 7.03% of the enlarged total issued H share capital of the Company resulting from the full conversion of the Series 2 Bonds but before the conversion of the Series 1 Bonds. The Series 2 Bonds Conversion Shares will be fully-paid and rank pari passu in all respects with the H Shares then in issue on the relevant registration date.

2

The estimated net proceeds from the Subscription of the Series 1 Bonds and the Series 2 Bonds, after deduction of commission and other related expenses, will be approximately US$587.5 million. The Company intends to use the net proceeds from the Subscription in the manner detailed in the paragraph headed “Use of Proceeds”.

The Series 1 Bonds Conversion Shares and the Series 2 Bonds Conversion Shares will be allotted and issued by the Company pursuant to the General Mandate granted to the Board by the Shareholders at the annual general meeting of the Company held on May 28, 2021. The subscription of the Bonds and the issue of the Series 1 Bonds Conversion Shares and the Series 2 Bonds Conversion Shares by the Company are not subject to further Shareholders’ approval.

The Enterprise Foreign Debt Pre-Issuance Registration Certificate from NDRC and approval from CSRC in relation to the issuance of the Bonds have been obtained.

The Company will apply to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the Bonds, the Series 1 Bonds Conversion Shares and the Series 2 Bonds Conversion Shares to be allotted and issued upon conversion of the Bonds.

Completion of the Subscription Agreement is subject to the satisfaction and/or waiver of the conditions precedent therein. In addition, the Subscription Agreement may be terminated in certain circumstances.

As the transactions envisaged under the Subscription Agreement may or may not be completed, the Bonds may or may not be issued or listed and/or the Series 1 Bonds Conversion Shares and/or the Series 2 Bonds Conversion Shares may or may not be issued or listed, Shareholders and investors are advised to exercise caution when dealing in the securities of the Company.

This announcement is made by the Company pursuant to Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and Rule 13.09 of the Listing Rules.

Reference is made to the announcement of the Company dated June 8, 2021 in relation to the proposed issue of (i) USD-denominated convertible bonds and (ii) RMB-denominated USD-settled convertible bonds.

On June 8, 2021 (after trading hours), the Company and the Joint Lead Managers entered into the Subscription Agreement, pursuant to which and subject to certain conditions contained therein, the Company has agreed to issue, and the Joint Lead Managers have severally and not jointly agreed to subscribe and pay for, or to procure subscribers to subscribe and pay for, the Series 1 Bonds in a principal amount of US$300.0 million and the Series 2 Bonds in a principal amount of RMB1,916.0 million.

3

SUBSCRIPTION AGREEMENT

Date

June 8, 2021

Parties

1. The Company as issuer; and

2. The Joint Lead Managers.

Subscription

Subject to the satisfaction of the conditions set out below in the section headed “Conditions precedent”, the Joint Lead Managers have agreed to, severally and not jointly subscribe and pay for, or procure subscribers to subscribe and pay for, the Series 1 Bonds and Series 2 Bonds in a principal amount of US$300.0 million and RMB1,916.0 million, respectively. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, and save as disclosed below each of the Joint Global Coordinators, the Joint Lead Managers and Joint Bookrunners is a third party independent of the Company and is not a connected person of the Company.

CLSA Limited is an indirect wholly-owned subsidiary of CITIC Securities Co. Ltd. (中信證券股 份有限公司), who is indirectly interested in approximately 23.37% of the Company’s entire issued share capital.

Subscribers

The Joint Bookrunners have informed the Company that the Series 1 Bonds and Series 2 Bonds will each be offered to no less than six independent placees (who will be independent individual, corporate and/or institutional investors). To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, each of the placees (and their respective ultimate beneficial owners) is a third party independent of the Company and is not a connected person of the Company.

Conditions precedent

The obligations of the Joint Lead Managers to subscribe and pay for the Bonds are conditional on, amongst others:

1. Due diligence and Offering Circular: each of the Joint Lead Managers being satisfied with the results of their due diligence investigations with respect to the Company and its subsidiaries and the Offering Circular having been prepared in form and content satisfactory to the Joint Lead Managers;

2. Other Contracts: the execution and delivery (on or before the Closing Date) of the Contracts, each in a form reasonably satisfactory to the Joint Lead Managers, by the respective parties;

3. Auditors’ letters: upon the date of the Subscription Agreement and on the Closing Date, there having been delivered to the Joint Lead Managers, in form and substance satisfactory to the Joint Lead Managers and addressed to the Joint Lead Managers from Ernst & Young, the certified public accountants of the Company;

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1. Compliance: at the Closing Date:

2. (i) the representations and warranties of the Company in the Subscription Agreement being true, accurate and correct, and as if made on such date;

3. (ii) the Company having performed all of its obligations under the Subscription Agreement to be performed on or before such date; and

4. (iii) there having been delivered to the Joint Lead Managers a certificate dated as of such date, of a duly authorized officer of the Company to such effect;

5. Material adverse change: after the date thereof or, if earlier, the dates as of which information is given in the Offering Circular up to and at the Closing Date, there shall not have occurred any change (nor any development or event involving a prospective change), in the condition (financial or other), business, prospects, results of operations or general affairs of the Company or of the Group as a whole, which, in the opinion of the Joint Lead Managers, is material and adverse in the context of the issue and offering of the Bonds;

6. Other consents: on or prior to the Closing Date there shall have been delivered to the Joint Lead Managers copies of all filings, registrations, consents and approvals required in relation to the issue of the respective Bonds and the performance of its obligations under the respective Bonds, the respective Trust Deed, the respective Agency Agreement, the Calculation Agency Agreement pertaining to the Series 1 Bonds and Series 2 Bonds, including but not limited to approval from CSRC and a certificate issued by NDRC;

7. Listing: the Hong Kong Stock Exchange having approved to listing of the New Shares upon conversion of the Bonds and the Hong Kong Stock Exchange having agreed, subject to any conditions reasonably satisfactory to the Joint Lead Managers, to list the Bonds (or, in each case, the Joint Lead Managers being reasonably satisfied that such listing will be granted);

8. Process Agent: confirmation that a process agent has been appointed to receive service of process on behalf of the Company pursuant to the Contracts and the Bonds and that the process agent has accepted its appointement;

9. Chief financial officer’s certificates: on the date of the Subscription Agreement and the Closing Date, there having been delivered to the Joint Lead Managers a certificate as of such date and signed by the chief financial officer of the Company;

10. Legal opinions: on or before the Closing Date, there having been delivered to the Joint Lead Managers opinions, in form and substance satisfactory to the Joint Lead Managers as to Hong Kong law, PRC law and English law, and such other resolutions, consents, authorities and documents relating to the issue of the Bonds, as the Joint Lead Managers may reasonably require;

11. Fee Letter: on or before the Closing Date, there having been delivered to each Joint Lead Manager, the relevant fee letter referred to in the Subscription Agreement and executed by the respective parties.

The Joint Lead Managers may, at their discretion and upon such terms as they think fit, waive compliance with the whole or any part of the conditions precedent (other than item (2) above) set out in the Subscription Agreement.

5

As at the date of this announcement, certain of the above conditions precedent to the completion of the Subscription Agreement are yet to be satisfied and/or waived (as the case may be). It is the intention of the Company to satisfy or procure the satisfaction of the conditions precedent of the Subscription Agreement before the Closing Date.

Termination

Notwithstanding anything contained in the Subscription Agreement, the Joint Lead Managers may, by notice to the Company given at any time prior to payment of the net subscription monies for the Bonds to the Company, terminate the Subscription Agreement in any of the following circumstances:

1. if there shall have come to the notice of the Joint Lead Managers any breach of, or any event rendering untrue or incorrect in any respect, any of the warranties and representations contained in the Subscription Agreement or any failure to perform any of the Company’s undertakings or agreements in the Subscription Agreement;

2. if any of the conditions precedent set out in the Subscription Agreement has not been satisfied or waived by the Joint Lead Managers on or prior to the Closing Date;

3. if in the sole and absolute opinion of the Joint Lead Managers, there shall have been, since the date of the Subscription Agreement, any change, or any development involving a prospective change, in national or international monetary, financial, political or economic conditions (including any disruption to trading generally, or trading in any securities of the Company on any stock exchange or in any over-the-counter market) or currency exchange rates or foreign exchange controls such as would in their view, be likely to prejudice materially the success of the offering and distribution of the Bonds or dealings in the Bonds in the secondary market;

4. if, in the sole and absolute opinion of the Joint Lead Managers, there shall have occurred any of the following events: (i) a suspension or a material limitation in trading in securities generally on the Shenzhen Stock Exchange, the New York Stock Exchange, the London Stock Exchange plc, the Hong Kong Stock Exchange and/or any other stock exchange on which the Company’s securities are traded; (ii) a suspension or a material limitation in trading in the Company’s securities on the Hong Kong Stock Exchange, the Shenzhen Stock Exchange and/or any other stock exchange on which the Company’s securities are traded; (iii) a general moratorium on commercial banking activities in the United States, the PRC, Hong Kong and/or the United Kingdom declared by the relevant authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States, the PRC, Hong Kong or the United Kingdom; or (iv) a change or development involving a prospective change in taxation affecting the Company, the Bonds and the H Shares to be issued upon conversion of the Bonds or the transfer thereof; or

5. if, in the sole and absolute opinion of the Joint Lead Managers, there shall have occurred any event or series of events (including the occurrence of any local, national or international outbreak or escalation of disaster, hostility, insurrection, armed conflict, act of terrorism, act of God or epidemic) as would in their view be likely to prejudice materially the success of the offering and distribution of the Bonds or dealings in the Bonds in the secondary market.

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Lock-up

Neither the Company nor any person acting on its behalf will (a) issue, offer, sell, contract to sell, pledge, encumber or otherwise dispose of or grant options, issue warrants or offer rights entitling persons to subscribe or purchase any interest in any Shares or securities of the same class as the Bonds or the Shares or any securities convertible into, exchangeable for or which carry rights to subscribe or purchase the Bonds, the Shares or securities of the same class as the Bonds, the Shares or other instruments representing interests in the Bonds, the Shares or other securities of the same class as them, (b) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of the ownership of the Shares, (c) enter into any transaction with the same economic effect as, or which is designed to, or which may reasonably be expected to result in, or agree to do, any of the foregoing, whether any such transaction of the kind described in (a), (b) or (c) is to be settled by delivery of Shares or other securities, in cash or otherwise or (d) announce or otherwise make public an intention to do any of the foregoing, in any such case without the prior written consent of the Joint Lead Managers between the date of the Subscription Agreement and the date which is 90 days after the Closing Date (both dates inclusive); except for (i) the Bonds and the New Shares issued on conversion of the Bonds, or (ii) any Shares or other securities (including rights or options) which are issued, offered, exercised, allotted, appropriated, modified or granted to, or for the benefit of employees (including Directors) of the Company or any of its subsidiaries pursuant to any employee share scheme or plan of the Company which is in compliance with the Listing Rules.

PRINCIPAL TERMS OF THE BONDS

The principal terms of the Series 1 Bonds and Series 2 Bonds are summarized as follows:

Issuer: The Company Maturity Date: June 18, 2026 Issue Price: 100.00% of the principal amount of the Bonds Bonds: (i) US$300.0 million zero coupon convertible bonds due 2026 and (ii) RMB1,916.0 million USD settled zero coupon convertible bonds due 2026, each convertible at the option of the holder thereof into fully paid ordinary H shares of the Company of RMB1.00 each at the initial Series 1 Bonds Conversion Price and Series 2 Bonds Conversion Price of HK$250.75 per H Share and HK$229.50 per H Share. Interest: The Bonds are zero coupon and do not bear any interest unless, upon due presentation thereof, payment of principal and premium (if any) is improperly withheld or refused. In such event, such unpaid amount shall bear interest at the rate of 2 per cent. per annum (both before and after judgment) in respect of the Series 1 Bonds and 2 per cent. per annum over the yield to maturity (both before and after judgment) in respect of the Series 2 Bonds until the earlier of (a) the day on which all sums due in respect of such Bond up to that day are received by or on behalf of the relevant holder and (b) the day falling seven days after the Trustee or the Principal Agent has notified Bondholders of receipt of all sums due in respect of all the Bonds up to that seventh day (except to the extent that there is failure in the subsequent payment to the relevant holders under the Terms and Conditions). If interest is required to be calculated for a period of less than one year, it will be determined on the basis of a 360-day year consisting of 12 months of 30 days each and, in the case of an incomplete month, the number of days elapsed.

7

Status:

The Bonds will constitute direct, unconditional, unsubordinated and (subject to negative pledge) unsecured obligations of the Company and shall rank at all times pari passu and without any preference or priority among themselves. The payment obligations of the Company under the Bonds shall, save for such exceptions as may be provided by mandatory provisions of applicable law and subject to negative pledge, at all times rank at least equally with all of its other present and future direct, unsubordinated, unconditional and unsecured obligations.

• Form and denomination:

• The Series 1 Bonds will be issued in registered form in denominations of US$200,000 each and integral multiples of US$100,000 in excess thereof and the Series 2 Bonds will be issued in registered form in denominations of RMB2,000,000 and integral multiples of RMB1,000,000 in excess thereof.

• Conversion period: Subject to and upon compliance with the Terms and Conditions, the Conversion Right attaching to any Bond may be exercised, at the option of the Bondholder, at any time on or after 41st day after the Issue Date up to the close of business (at the place where the certificate evidencing such Bond is deposited for conversion) on the date falling 10 working days prior to the Maturity Date (both days inclusive), or if such Bond shall have been called for redemption by the Company before the Maturity Date, then up to and including the close of business (at the place aforesaid) on a date no later than 10 working days (both dates inclusive and at the place aforesaid) prior to the date fixed for redemption thereof provided that (i) no Conversion Right may be exercised in respect of a Bond where the holder shall have exercised its right to require the Company to redeem or repurchase such Bond pursuant to the Terms and Conditions or during a Restricted Conversion Period (both dates inclusive) and (ii) the Conversion Right is exercised subject to any applicable fiscal or other laws or regulations or as provided in the Terms and Conditions.

• Conversion Price:

The price at which H Shares will be issued upon conversion will initially be HK$250.75 per H Share for the Series 1 Bonds and HK$229.50 per H Share for the Series 2 Bonds, but will be subject to adjustments for, among other things, consolidation, subdivision or re-classification, capitalization of profits or reserves, capital distributions, rights issues of Shares or options over Shares, rights issues of other securities, issues at less than current market price and Change of Control.

Additionally, if a Change of Control shall have occurred the Company shall give notice of that fact to the Bondholders (the “ Change of Control Notice ”) and to the Trustee and the agents appointed under the Agency Agreement in writing not later than seven days after becoming aware of such Change of Control. Following the giving of a Change of Control Notice, upon any exercise of Conversion Rights such that the relevant conversion date in respect of a Bond (the “ Conversion Date ”) falls within the period of 30 days following the later of (i) the relevant Change of Control and (ii) the date on which the Change of Control Notice is given to Bondholders (such period, the “ Change of Control Conversion Period ”), the Conversion Price (the “ Change of Control Conversion Price ”) applicable solely for the purposes of such exercise of Conversion Rights shall be the Conversion Price in effect on the Conversion Date adjusted in accordance with the following formula:

8

NCP = OCP/(1 + (CP x c/t))

Where:

“NCP” = the Change of Control Conversion Price;

“OCP” = the Conversion Price in effect on the relevant Conversion Date;

“CP” = 47.5 per cent. in respect of the Series 1 Bonds and 35.0 per cent. in respect of the Series 2 Bonds, expressed as a fraction;

“c” = the number of days from and including the date on which the Change of Control has occurred; and

“t” = the number of days from and including the Issue Date to but excluding the Maturity Date,

provided that if the Change of Control Conversion Price determined would (but for the operation of the provision in the Terms and Conditions) otherwise be below the level permitted by applicable laws and regulations from time to time (if any) it shall instead be equal to such aforesaid level.

• Ranking of Conversion Shares:

Redemption at maturity:

• Redemption at the option of the Bondholders:

• The H Shares issued upon exercise of the Conversion Rights will be fully paid up and will in all respects rank pari passu with, and within the same class as, the H Shares in issue on the relevant registration date except for any right excluded by mandatory provisions of applicable law.

• Unless previously redeemed, converted or purchased and cancelled as provided in the Terms and Conditions, the Company will redeem each Series 1 Bond at 100.00 per cent. of its outstanding principal amount and each Series 2 Bond at the US Dollar equivalent of 107.76 per cent. of its outstanding principal amount, each on the Maturity Date.

• The Company will, at the option of the holder of any Bond, redeem all or some of that holder’s Series 1 Bonds on June 18, 2024 (the “ Put Option Date ”) at 100.00 per cent. of their outstanding principal amount and the Series 2 Bonds on the Put Option Date at the US Dollar equivalent of 104.59 per cent. of its outstanding principal amount.

9

Redemption for taxation reasons:

The Bonds may be redeemed, at the option of the Company in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days’ notice to the Trustee, the Principal Agent and the Bondholders (which notice shall be irrevocable), at their principal amount in respect of the Series 1 Bonds and at the US Dollar equivalent of the Early Redemption Amount in respect of the Series 2 Bonds as at the relevant date of redemption if the Company satisfies the Trustee immediately prior to the giving of such notice that (i) the Company has or will become obliged to pay additional tax amounts as provided or referred to in the Terms and Conditions as a result of any change in, or amendment to, the laws or regulations of the PRC or Hong Kong or any, in each case, political subdivision or any authority thereof or therein having power to tax, or any change in the general application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after June 8, 2021, and (ii) such obligation cannot be avoided by the Company taking reasonable measures available to it, provided that no such notice of redemption shall be given earlier than 90 day prior to the earliest date on which the Company would be obliged to pay such additional tax amounts were a payment in respect of the Bonds then due. If the Company exercises its tax redemption right, each Bondholder shall have the right to elect that its Bonds shall not be redeemed. Upon a Bondholder electing not to have its Bonds redeemed in such circumstances, any payments due after the relevant date of redemption shall be made subject to any deduction or withholding of any taxation required to be deducted or withheld.

• Redemption of the Series 1 On giving not less than 30 nor more than 60 days’ notice to the Bonds at the option Bondholders, the Trustee and the Principal Agent (which notice will be of the Company: irrevocable), the Series 1 Bonds which are outstanding may be redeemed by the Company in whole, but not in part, at the US Dollar equivalent of the Early Redemption Amount on the date specified in the optional redemption notice (i) at any time after June 18, 2024 but prior to the Maturity Date, subject to certain conditions including that, the the closing price of an H Share translated into US Dollars at the exchange rate set forth in the Terms and Conditions, for any 20 out of 30 consecutive H Share Stock Exchange Business Days, the last of which shall occur not more than 10 days prior to the date upon which notice of such redemption is given, was at least 130 per cent. of the Series 1 Bonds Conversion Price then in effect on each such H Share Stock Exchange Business Day (converted into US Dollars at a fixed exchange rate set forth in the Terms and Conditions), or (ii) at any time if, the aggregate principal amount of the Series 1 Bonds outstanding is less than 10 per cent. of the aggregate principal amount originally issued (including any further Series 1 Bonds issued pursuant to the Terms and Conditions).

• Redemption of the Series 2 On giving not less than 30 nor more than 60 days’ notice to the Bonds at the option Bondholders, the Trustee and the Principal Agent (which notice will be of the Company: irrevocable), the Series 2 Bonds which are outstanding may be redeemed by the Company in whole, but not in part, at the US Dollar equivalent of the Early Redemption Amount (for the Series 2 Bonds) on the date specified in the optional redemption notice at any time if, the aggregate principal amount of the Series 2 Bonds outstanding is less than 10 per cent. of the aggregate principal amount originally issued (including any further Series 2 Bonds issued pursuant to the Terms and Conditions).

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Redemption for Relevant Events:

Following the occurrence of a Relevant Event (as defined below), the holder of each Bond will have the right at such holder’s option, to require the Company to redeem all or some only of such holder’s Bonds on the Relevant Event put date at their principal amount in respect of the Series 1 Bonds and at the US Dollar equivalent of the Early Redemption Amount in respect of the Series 2 Bonds.

“Relevant Event” means the occurrence of any of:

• (i) a Change of Control in the Company;

• (ii) a Delisting; or

• (iii) an H Share Suspension in Trading.

Early Redemption Amount (in respect of Series 2 Bonds only) :

The applicable Early Redemption Amount for each RMB1,000,000 principal amount of Series 2 Bonds is calculated in accordance with the following formula:

Previous Redemption Amount x (1 + r/2)[d/p]

Where:

Previous Redemption Amount = the Early Redemption Amount for each RMB1,000,000 principal amount on the Semi-annual date immediately preceding the date fixed for redemption as set out below (or if the Bonds are to be redeemed prior to December 18, 2021, RMB1,000,000):

	Early
	Redemption
Semi-annual date	Amount
	(RMB)
December 18, 2021	1,007,500.00
June 18, 2022	1,015,056.26
December 18, 2022	1,022,669.17
June 18, 2023	1,030,339.19
December 18, 2023	1,038,066.73
June 18, 2024	1,045,852.24
December 18, 2024	1,053,696.13
June 18, 2025	1,061,598.85
December 18, 2025	1,069,560.84

• r = 1.50 per cent. expressed as a fraction;

• d = number of days from and including the immediately preceding Semi-annual Date (or if the Bonds are to be redeemed on or before December 18, 2021, from and including the Issue Date) to, but excluding, the date fixed for redemption, calculated on the basis of a 360-day year consisting of 12 months of 30 days each and, in the case of an incomplete month, the number of days elapsed;

p =

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Cash Settlement (in respect of Series 1 Bonds only):

Notwithstanding the Conversion Right of each Bondholder in respect of each of the Series 1 Bond, in lieu of delivery of some or all of the H Shares required to be delivered upon exercise of a Conversion Right, the Company shall have the option (in its sole discretion) to pay to the relevant Bondholder holding the Series 1 Bonds an amount of cash in USD to a Bondholder in accordance to the calculation below (the “ Cash Settlement Amount ”):

N 1 CSA = ∑ N[×][ CSS×Pn] n=1

Where:

• CSA = the Cash Settlement Amount;

• CSS = such number of H Shares (which shall be rounded down to the nearest whole number) as determined by the Company for which the Conversion Rights is exercised and the Company has elected to pay the relevant Bondholder in an amount of cash in USD;

• Pn = the volume weighted average price of one H Share on the n-th Trading Date of the 20 consecutive H Share Stock Exchange Business Day period commencing on the seventh H Share Stock Exchange Business Day following the Cash Settlement Notice Date(“ Cash Settlement Calculation Period ”, where the “ Cash Settlement Notice Date ” is the fifth H Share Stock Exchange Business Day follow the date of the relevant conversion); and

• N = 20, being the number of H Share Stock Exchange Business Days in the Cash Settlement Calculation Period,

Negative Pledge:

So long as any Bond remains outstanding, the Company will not create or permit to subsist, and the Company will procure that none of its subsidiaries will create, or have outstanding, any mortgage, charge, pledge, lien or other form of encumbrance or security interest upon the whole or any part of its undertaking, assets or revenues (including any uncalled capital), present or future, to secure any investment securities or to secure any guarantee of or indemnity in respect of any investment securities unless, at the same time or prior thereto according to the Bonds the same security as is created or subsisting to secure any such investment securities, guarantee or indemnity or such other security as either (i) the Trustee shall in its absolute discretion deem not materially less beneficial to the interests of the Bondholders or (ii) shall be approved by an extraordinary resolution of the Bondholders.

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Listing

Application will be made to the Hong Kong Stock Exchange for (i) the listing of, and permission to deal in, the Series 1 Bonds and the Series 2 Bonds by way of debt issues to professional investors only; and (ii) the listing of, and permission to deal in, the Series 1 Bonds Conversion Shares and the Series 2 Bonds Conversion Shares.

Clearing Systems

The Series 1 Bonds and Series 2 Bonds will each be represented by beneficial interests in a global certificate, which will be registered in the name of a nominee of, and deposited on the Closing Date with a common depositary for, Euroclear NA/NV and Clearstream Banking, S.A.

CONVERSION PRICE AND CONVERSION SHARES

The initial Series 1 Bonds Conversion Price is HK$250.75 per H Share, which represents (i) a premium of 41.27% over the last closing price of HK$177.50 per H Share as quoted on the Hong Kong Stock Exchange on June 8, 2021 (being the trading day on which the Subscription Agreement was signed) and (ii) a premium of approximately 39.01% over the average closing price of HK$180.38 as quoted on the Hong Kong Stock Exchange for the five consecutive trading days up to and including June 8, 2021.

The initial Series 2 Bonds Conversion Price is HK$229.50 per H Share, which represents (i) a premium of 29.30% over the last closing price of HK$177.50 per H Share as quoted on the Hong Kong Stock Exchange on June 8, 2021 (being the trading day on which the Subscription Agreement was signed) and (ii) a premium of approximately 27.23% over the average closing price of HK$180.38 as quoted on the Hong Kong Stock Exchange for the five consecutive trading days up to and including June 8, 2021.

The Series 1 Bonds Conversion Price and the Series 2 Bonds Conversion Price were determined with reference to the prevailing market price of the H Shares and the Terms and Conditions (including the redemption options) and was negotiated on an arm’s length basis between the Company and the Joint Lead Managers. The Directors consider that the Series 1 Bonds Conversion Price and the Series 2 Bonds Conversion Price are fair and reasonable based on the current market conditions and in the interests of the Company and the Shareholders as a whole.

Assuming full conversion of the Series 1 Bonds at the initial Series 1 Bonds Conversion Price of HK$250.75 per H Share, the Series 1 Bonds and will be convertible into approximately 9,282,711 H Shares, representing approximately 6.93% of the total issued H share capital of the Company as at the date of this announcement and approximately 6.48% of the enlarged total issued H share capital of the Company resulting from the full conversion of the Series 1 Bonds but before the conversion of the Series 2 Bonds.

Assuming full conversion of the Series 2 Bonds at the initial Series 2 Bonds Conversion Price of HK$229.50 per H Share, the Series 2 Bonds and will be convertible into approximately 10,137,685 H Shares, representing approximately 7.56% of the total issued H share capital of the Company as at the date of this announcement and approximately 7.03% of the enlarged total issued H share capital of the Company resulting from the full conversion of the Series 2 Bonds but before the conversion of the Series 1 Bonds.

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Assuming full conversion of the Series 1 Bonds and Series 2 Bonds at the initial Series 1 Bonds Conversion Price of HK$250.75 per H Share and initial Series 2 Bonds Conversion Price of HK$229.50 per H Share, the Series 1 Bonds and Series 2 Bonds will together be convertible into approximately 19,420,396 H Shares, representing approximately 14.49% of the total issued H share capital of the Company as at the date of this announcement and approximately 12.66% of the enlarged total issued H share capital of the Company resulting from the full conversion of the Series 1 Bonds and Series 2 Bonds. The Series 1 Bonds Conversion Shares and Series 2 Bonds Conversion Shares will be fully-paid and rank pari passu in all respects with the H Shares then in issue on the relevant registration date.

The aggregate nominal amount of the Series 1 Bonds Conversion Shares and Series 2 Bonds Conversion Shares is RMB9,282,711 and RMB10,137,685, respectively.

The number of H Shares that would be issued pursuant to the Series 1 Bonds and the Series 2 Bonds is therefore within the maximum number of H Shares that the Company can issue under the General Mandate

EFFECT ON SHAREHOLDINGS

The table below sets out a summary of the shareholdings in the Company (i) as at the date of this announcement and (ii) upon the exercise in full of the Conversion Rights attached to the Bonds:

Shareholders As at the date of this announcement Class of Shares Number of Shares Approximate % of the total issued share capital Founders(1) A Shares 187,423,105 23.59 Other holders of A Shares A Shares 472,947,857 59.54 Holders of H Shares H Shares 134,016,500 16.87 Bondholders holding Series 1 Bonds H Shares – – Bondholders holding Series 2 Bonds H Shares – – Total – 794,387,462 100.00	Upon full conversion of the Series 1 Bonds at the initial Series 1 Bonds Conversion Price of HK$250.75 per H Shares Number of Shares Approximate % of the total issued share capital 187,423,105 23.32 472,947,857 58.85 134,016,500 16.68 9,282,711 1.16 – – 803,670,173 100.00	Upon full conversion of the Series 2 Bonds at the initial Series 2 Bonds Conversion Price of HK$229.50 per H Shares Number of Shares Approximate % of the total issued share capital 187,423,105 23.30 472,947,857 58.79 134,016,500 16.66 － – 10,137,685 1.26 804,525,147 100.00	Upon full conversion of both Series 1 Bonds and Series 2 Bonds at the initial Series 1 Bonds Conversion Price of HK$250.75 per H Share and Series 2 Bonds Conversion Price of HK$229.50 per H Share, respectively Number of Shares Approximate % of the total issued share capital 187,423,105 23.03 472,947,857 58.12 134,016,500 16.47 9,282,711 1.14 10,137,685 1.25 813,807,858 100.00	Upon full conversion of both Series 1 Bonds and Series 2 Bonds at the initial Series 1 Bonds Conversion Price of HK$250.75 per H Share and Series 2 Bonds Conversion Price of HK$229.50 per H Share, respectively Number of Shares Approximate % of the total issued share capital 187,423,105 23.03 472,947,857 58.12 134,016,500 16.47 9,282,711 1.14 10,137,685 1.25 813,807,858 100.00
				100.00

Note 1: Dr. LOU Boliang, Mr. LOU Xiaoqiang and Ms. ZHENG Bei are regarded as our Founders and they have entered into a voting rights agreement on October 19, 2018 (which formalizes their pre-existing voting arrangement), pursuant to which they have agreed to reach consensus on any proposal presented to the Board and the general meeting of the shareholders of the Company for voting (the “ Voting Agreement ”). Pursuant to the Voting Agreement, Dr. LOU Boliang, Mr. LOU Xiaoqiang and Ms. ZHENG Bei are concert parties and they are deemed to be interested in each other’s interests in our Company under the SFO. Mr. LOU Xiaoqiang and Ms. ZHENG Bei are also spouses.

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USE OF PROCEEDS

The estimated net proceeds from the Subscription of the Series 1 Bonds and Series 2 Bonds, after deduction of commission and other related expenses, will be approximately US$587.5 million. The Company intends to use the net proceeds for, among others: (i) expanding capacities and capabilities of our pharmaceutical process development and manufacturing facilities (i.e. CMC services) for small molecule drugs, (ii) expanding our R&D and manufacturing service platform for biologics, (iii) expanding capabilities of our laboratory services, (iv) expanding capacities and capabilities of our laboratory and manufacturing facilities in the United Kingdom, and (v) working capital and general corporate purposes.

REASONS FOR AND BENEFITS OF THE ISSUE OF THE BONDS

The Board considers that the issue of the Bonds represents an opportunity to obtain a pool of readily available funds that can better support business expansion of the Company in the long run. The Board currently intends to use the funds as mentioned above and considers it will facilitate the overall development and expansion of the Group.

The Directors (including the independent non-executive Directors) consider that the terms and conditions of the Subscription Agreement and the issue of the Bonds are made on normal commercial terms and in the interests of the Company and the Shareholders as a whole.

GENERAL MANDATE FOR THE ISSUE OF THE BONDS AND THE CONVERSION SHARES

A special resolution was also passed on the Company’s second extraordinary general meeting of 2020 held on July 23, 2020 to grant authorization to the Board to issue onshore and offshore debt financing instruments.

At the 2020 annual general meeting of the Company held on May 28, 2021, a special resolution was passed to grant a general mandate (the “ General Mandate ”) to the Directors to issue, allot, or deal with additional H Shares not exceeding 26,803,300 H Shares, equivalent to 20% of the aggregate nominal amount of H Shares of the Company in issue as at the date of the 2020 annual general meeting, which amounted to 134,016,500 H Shares.

The Series 1 Bonds Conversion Shares and Series 2 Bonds Conversion Shares will be allotted and issued by the Company pursuant to the General Mandate. The issue of the Bonds and the Series 1 Bonds Conversion Shares and Series 2 Bonds Conversion Shares by the Company is not subject to further Shareholders’ approval.

EQUITY FUND RAISING ACTIVITIES BY THE COMPANY IN THE LAST 12 MONTHS

The Company has not raised any fund by issuing equity securities during the 12 months immediately before the date of this announcement.

GENERAL INFORMATION

The Group is a leading fully-integrated pharmaceutical research and development service platform with global operations to accelerate drug innovation for its customers.

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APPROVALS RECEIVED AND APPLICATION FOR LISTING

The Enterprise Foreign Debt Pre-Issuance Registration Certificate from NDRC and approval from CSRC in relation to the issuance of the Bonds have been obtained.

The Company will apply to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the Series 1 Bonds Conversion Shares and the Series 2 Bonds Conversion Shares to be allotted and issued upon conversion of the Series 1 Bonds and Series 2 Bonds, respectively.

Completion of the Subscription Agreement is subject to the satisfaction and/or waiver of the conditions precedent therein. In addition, the Subscription Agreement may be terminated in certain circumstances.

As the transactions envisaged under the Subscription Agreement may or may not be completed, the Bonds may or may not be issued or listed and/or the Series 1 Bonds Conversion Shares and/or the Series 2 Bonds Conversion Shares may or may not be issued or listed, Shareholders and investors are advised to exercise caution when dealing in the securities of the Company.

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context otherwise requires:

“A Share(s)” the ordinary domestic share(s) of the Company with nominal value of RMB1.00 listed on the Shenzhen Stock Exchange “Agency Agreement(s)” the respective paying, conversion and transfer agency agreements in respect of each of the Series 1 Bonds and Series 2 Bonds to be entered into between the Company, the Trustee, Citibank N.A., London Branch, as the principal paying agent, the principal conversion agent, the registrar and as transfer agent, and the other paying agents, conversion agents and transfer agents appointed thereunder on or around the Issue Date “Board” the board of Directors of the Company “Bondholder(s)” holder(s) of the Bond(s) from time to time “Bonds” the Series 1 Bonds and the Series 2 Bonds “Calculation Agency the respective calculation agency agreement in respect of each Agreement(s)” of the Series 1 Bonds and the Series 2 Bonds to be entered into between the Company, Conv-Ex Advisors Limited, as the calculation agent on or around the June 18, 2021

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“Change of Control”

means:

• (a) the Founders, collectively, together with any voting rights controlled directly or indirectly by the Founders, including through any voting proxy arrangement and/or acting-inconcert agreement, ceases to be the single largest holder of voting rights in the Company;

• (b) other than Founders, any person or persons, acting together, acquires control of the Company if such person or persons does not or do not have, and would not be deemed to have, control of the Company on the Issue Date;

• (c) the Company consolidates with or merges into or sells or transfers all or substantially all of the Company’s assets to any other person, unless the consolidation, merger, sale or transfer will not result in an event specified in (b) above with respect to the Company or the successor entity; or

• (d) one or more other persons acquires the legal or beneficial ownership of all or substantially all of the Company’s registered share capital

“Closing Date”

June 18, 2021

• “Company”

Pharmaron Beijing Co., Ltd. (康龍化成（北京）新藥技術股份有限 公司), a joint stock limited company incorporated under the laws of the PRC, the A Shares of which are listed on the Shenzhen Stock Exchange (stock code: 300759) and the H Shares of which are listed on the Main Board of the Hong Kong Stock Exchange (stock code: 3759)

• “connected person”

• has the meaning ascribed to it under the Listing Rules

• “Contracts”

the Subscription Agreement, the Calculation Agency Agreement and in relation to each of the Series 1 Bonds and Series 2 Bonds, the respective the Trust Deed and the Agency Agreement

• “Conversion Right”

the right of a Bondholder to convert any Bond into H Shares

• “CSRC”

• the China Securities Regulatory Commission

• “Delisting”

means when the H Shares cease to be listed or admitted to trading on the Hong Kong Stock Exchange

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

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“Founders”	Dr. LOU Boliang, Mr. LOU Xiaoqiang and Ms. ZHENG Bei, each
	of them an executive Director, as well as each of their affiliated
	shareholders
“Group”	the Company and its subsidiaries
“H Share(s)”	the overseas-listed foreign share(s) in the share capital of the
	Company with a nominal value of RMB1.00 each
“H Share Stock Exchange	any day (other than a Saturday or Sunday) on which the Hong
Business Day”	Kong Stock Exchange or the alternative stock exchange (as the
	case may be) is open for the business in dealing in securities
“H Share Suspension	the suspension in trading of the H Shares for a period of 20
in Trading”	consecutive H Share Stock Exchange Business Days
“HK$”	Hong Kong dollar(s), the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Hong Kong Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Issue Date”	June 18, 2021
“Joint Bookrunners”	Goldman Sachs (Asia) L.L.C., CLSA Limited and J.P. Morgan
	Securities plc
“Joint Global Coordinators”	Goldman Sachs (Asia) L.L.C. and CLSA Limited
“Joint Lead Managers”	Goldman Sachs (Asia) L.L.C., CLSA Limited and J.P. Morgan
	Securities plc
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited
“Maturity Date”	the date on which the Series 1 Bonds will be redeemed at 100.00
	per cent. of their outstanding principal amount and the Series 2
	Bonds will be redeemed at the US Dollar equivalent of 107.76
	per cent. of their outstanding principal amount, unless previously
	redeemed, converted or purchased and cancelled, which is
	expected to be on June 18, 2026
“NDRC”	the National Development and Reform Commission of the PRC
“New Shares”	the H Shares to be issued on conversion of the Bonds

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“Offering Circular”

“Offering Circular”	the offering circular to be prepared by the Company in connection
	with the issue of the Bonds and the listing of the Bonds on the
	Hong Kong Stock Exchange
“PRC”	the People’s Republic of China, excluding for the purpose of this
	announcement, Hong Kong, Macau Special Administrative Region
	and Taiwan
“Principal Agent”	Citibank N.A., London Branch
“Restricted Conversion	the period (i) commencing, for an annual general meeting of the
Period”	Shareholders, on the date falling 20 days prior to that meeting
	and ending on the date of that meeting or for an extraordinary
	general meeting of the Shareholders, on the date falling 15 days
	prior to that meeting and ending on the date of that meeting; or
	(ii) commencing the date falling five working days prior to the
	record date set by the Company for the purpose of distribution of
	any dividend and ending on such record date; or (iii) commencing
	on such date and for such period as determined by applicable
	law from time to time that the Company is required to close its
	register
“RMB”	renminbi, the lawful currency of the PRC
“Series 1 Bonds”	US$300.0 million zero coupon convertible bonds due 2026
	convertible at the option of the holder thereof into fully paid
	ordinary H Shares of the Company of par value RMB1.00 each at
	the initial Series 1 Bonds Conversion Price of HK$250.75 per H
	Share.
“Series 1 Bonds Conversion	the price per Series 1 Bonds Conversion Share (subject to
Price”	adjustments) at which the Series 1 Bonds may be converted into
	the H Shares
“Series 1 Bonds Conversion	the H Share(s) to be issued upon conversion of the Series 1 Bonds
Share(s)”	pursuant to the applicable Trust Deed and the applicable Terms
	and Conditions
“Series 2 Bonds”	RMB1,916.0 million US$ settled zero coupon convertible bonds
	due 2026 convertible at the option of the holder thereof into fully
	paid ordinary H Shares of the Company of par value RMB1.00
	each at the initial Series 2 Bonds Conversion Price of HK$229.50
	per H Share

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“Series 2 Bonds Conversion	the price per Series 2 Bonds Conversion Share (subject to
Price”	adjustments) at which the Series 2 Bonds may be converted into
	the H Shares
“Series 2 Bonds Conversion	the H Share(s) to be issued upon conversion of the Series 2 Bonds
Share(s)”	pursuant to the applicable Trust Deed and the applicable Terms
	and Conditions
“Shares”	the H Shares and the A Shares
“Shareholders”	the holders of the Shares
“Subscription”	means the issue and subscription of the Bonds pursuant to the
	Subscription Agreement
“Subscription Agreement”	the subscription agreement dated June 8, 2021 entered into
	between the Company, the Joint Lead Managers in connection
	with the issue and subscription of the Bonds
“Terms and Conditions”	the terms and conditions of the Series 1 Bonds and Series 2 Bond
“Trust Deed(s)”	the respective trust deeds constituting each of the Series 1 Bonds
	and Series 2 Bonds to be entered into between the Company and
	the Trustee on or around the Issue Date
“Trustee”	Citicorp International Limited
“United States”	the United States of America
“U.S. Securities Act”	the United States Securities Act of 1933 (as amended)
“US$”, “USD” or “US Dollar”	US dollar(s), the lawful currency of the United States
“%”	percentage

By Order of the Board Pharmaron Beijing Co., Ltd*. 康龍化成（北京）新藥技術股份有限公司 Dr. LOU Boliang Chairman

Beijing, the PRC June 9, 2021

As at the date of this announcement, the Board of Directors of the Company comprises Dr. LOU Boliang, Mr. LOU Xiaoqiang and Ms. ZHENG Bei as executive Directors, Mr. CHEN Pingjin, Mr. HU Baifeng, Mr. LI Jiaqing and Mr. ZHOU Hongbin as non-executive Directors, and Mr. DAI Lixin, Ms. CHEN Guoqin, Mr. TSANG Kwan Hung Benson and Mr. YU Jian as independent nonexecutive Directors.

• For identification purposes only

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