CONNECTED TRANSACTION DISPOSAL OF 1.325% EQUITY INTEREST IN CITIC REAL ESTATE BY GOLDSTONE INVESTMENT

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1 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. (A joint stock limited company incorporated in the People s Republic of China with limited liability) (Stock Code: 6030) CONNECTED TRANSACTION DISPOSAL OF 1.325% EQUITY INTEREST IN CITIC REAL ESTATE BY GOLDSTONE INVESTMENT On 8 January 2016, GoldStone Investment, a wholly-owned subsidiary of the Company, entered into the Equity Transfer Agreement with CITIC Corporation Limited, a substantial shareholder of the Company. Pursuant to the Equity Transfer Agreement, GoldStone Investment has agreed to transfer, subject to certain conditions, 90,000,000 shares of CITIC Real Estate, representing approximately 1.325% equity interest in CITIC Real Estate, held by it to CITIC Corporation Limited, at a consideration of RMB344,965, to be paid by CITIC Corporation Limited in cash. Upon the completion of the Equity Transfer, GoldStone Investment will no longer hold any equity interest in CITIC Real Estate. As at the date of this announcement, CITIC Corporation Limited holds 15.59% equity interest in the Company, being the largest shareholder and a connected person of the Company. Accordingly, the entering into of the Equity Transfer Agreement between GoldStone Investment, a wholly-owned subsidiary of the Company, and CITIC Corporation Limited, constitutes a connected transaction of the Company. As the highest of the applicable size test percentage ratios in respect of the Equity Transfer is more than 0.1% but less than 5%, pursuant to Chapter 14A of the Hong Kong Listing Rules, the entering into of the Equity Transfer Agreement between GoldStone Investment and CITIC Corporation Limited is subject to the reporting and announcement requirements, but is exempt from the Company s independent shareholders approval requirement. I. EQIUTY TRANSFER On 8 January 2016, GoldStone Investment, a wholly-owned subsidiary of the Company, entered into the Equity Transfer Agreement with CITIC Corporation Limited, a substantial shareholder of the Company. Pursuant to the Equity Transfer Agreement, GoldStone Investment has agreed to transfer, subject to 1

2 certain conditions, 90,000,000 shares of CITIC Real Estate, representing approximately 1.325% equity interest in CITIC Real Estate, held by it to CITIC Corporation Limited, at a consideration of RMB344,965, to be paid by CITIC Corporation Limited in cash. Upon the completion of the Equity Transfer, GoldStone Investment will no longer hold any equity interest in CITIC Real Estate. II. EQUITY TRANSFER AGREEMENT 1. Date 8 January Parties Transferor: GoldStone Investment Transferee: CITIC Corporation Limited 3. Target equity 90,000,000 shares of CITIC Real Estate held by GoldStone Investment, representing approximately 1.325% equity interest in CITIC Real Estate. 4. Consideration and terms of payment The consideration for the Equity Transfer, being RMB344,965,586.55, was agreed upon arm s length negotiations between GoldStone Investment and CITIC Corporation Limited after taking into account various factors including, but not limited to, other comparable transaction prices, the market condition and the valuation of CITIC Real Estate as at the Base Date. The consideration shall be satisfied by CITIC Corporation Limited in cash in an one-off payment. 5. Conditions precedent to the Equity Transfer (1) In respect of the transfer of the target equity by GoldStone Investment under the Equity Transfer Agreement, GoldStone Investment has completed the approval or authorisation procedures according to the relevant laws and its articles of association; and (2) In respect of the acquisition of the target equity by CITIC Corporation Limited under the Equity Transfer Agreement, CITIC Corporation Limited has completedthe approval or authorisation procedures according to the relevant laws and its articles of association. 2

3 III. CONSEQUENCE OF THE EQUITY TRANSFER AND ITS IMPACTS ON FINANCIAL STATUS Upon the completion of the Equity Transfer, GoldStone Investment will no longer hold any equity interest in CITIC Real Estate. The loss arising from the Equity Transfer is approximately RMB78,245,900, representing the difference between the consideration paid and the carrying value of the 1.325% equity interest held by GoldStone Investment in CITIC Real Estate. The sale proceeds from the Equity Transfer will be used to supplement the working capital of GoldStone Investment. IV. REASONS FOR AND BENEFITS OF THE EQUITY TRANSFER The original main purpose of the investment by GoldStone Investment in the shares of CITIC Real Estate was to obtain returns through exit after the listing of CITIC Real Estate. However, upon the listing of CITIC Limited on the Hong Kong Stock Exchange in September 2014, and according to the relevant requirements of the Hong Kong Listing Rules, CITIC Real Estate, as an indirect subsidiary of CITIC Limited, will have difficulties to be spun-off and separately listed within a short term. In addition, having considered factors from the perspectives of investment income, opportunity cost of capital, and increasing the efficiency in the use of capital of GoldStone Investment etc., it is proposed that the investment made by GoldStone Investment in the shares of CITIC Real Estate should be withdrawn through the Equity Transfer and the capital recovered therefrom should be invested in other projects of GoldStone Investment. Having considered the above, and prior to the Equity Transfer having been submitted to the Board for approval, the independent non-executvie Directors had preliminarily reviewed, approved and issued an independent opinion. The independent non-executive Directors of the Company were all of the view that: (1) the Equity Transfer relating to the equity interest in CITIC Real Estate has been appraised by an asset evaluation institution with securities and futures related qualification, which has no interest relationship with the Company that may affect its services provided to the Company and has sufficient independence; (2) the evaluation method adopted is appropriate, the assumptions given are reasonable and the evaluation results are fair; (3) the price is determined based on the appraisal results as approved by/filed with the state-owned asset management authority; (4) there is no prejudice to the interests of the Company and other shareholders and the transaction is in the interests of the Company and its shareholders as a whole; therefore, have no objection to the Equity Transfer. 3

4 V. HONG KONG LISTING RULES IMPLICATIONS As at the date of this announcement, CITIC Corporation Limited holds 15.59% equity interest in the Company, being the largest shareholder and a connected person of the Company. Accordingly, the entering into of the Equity Transfer Agreement between GoldStone Investment, a wholly-owned subsidiary of the Company, and CITIC Corporation Limited, constitutes a connected transaction of the Company. As the highest of the applicable size test percentage ratios in respect of the Equity Transfer is more than 0.1% but less than 5%, pursuant to Chapter 14A of the Hong Kong Listing Rules, the entering into of the Equity Transfer Agreement between GoldStone Investment and CITIC Corporation Limited is subject to the reporting and announcement requirements, but is exempt from the Company s independent shareholders approval requirement. None of the Directors has any material interest in the transaction contemplated under the Equity Transfer Agreement, and none of the Directors is required to abstain from voting on the relevant Board resolution approving the Equity Transfer Agreement. VI. GENERAL INFORMATION Information on the Company The principal businesses of the Company include securities brokerage; securities investment consulting; financial advisory services in relation to securities trading and securities investment activities; securities underwriting and sponsorship; securities proprietary business; securities assets management; margin financing and securities lending; securities investment fund sales agency; provision of brokerage services to futures companies; distribution of financial products; and stock options market making business. Information on GoldStone Investment GoldStone Investment is a wholly-owned subsidiary of the Company with a registered capital of RMB7.2 billion, whose principal businesses include direct investment, investment advisory and management. Information on CITIC Corporation Limited The principal businesses of CITIC Corporation Limited include but not limited to investment in and management of financial sector, including investment in and management of domestic and foreign banks, securities, insurance, trust, asset management, futures, leasing, funds, credit cards and other financial enterprises and related industries; investment in and management of non-financial sectors, 4

5 including energy, transport and other infrastructure; mining, forestry resources development and raw materials industry; machinery manufacturing, real estate development; information industry; commerce and trade services and other industries. Information on CITIC Real Estate CITIC Real Estate has a registered capital of RMB6.79 billion, and its principal businesses include but not limited to real estate development and operation, and rental housing; property management; development of golf courses, shopping malls and clubs; architectural engineering design, construction and equipment installation; and infrastructure construction. As at the date of this announcement, CITIC Corporation Limited holds % equity interest in CITIC Real Estate, and GoldStone holds 1.325% equity interest in CITIC Real Estate. Based on the audited financial statement of CITIC Real Estate as at 31 December 2014, the net assets of CITIC Real Estate were RMB12,342,642, As shown in the assets valuation report prepared by a qualified valuer, the appraised value of the net assets of CITIC Real Estate as at the Base Date was RMB26,025,737, For the year ended 31 December 2013, the audited net profits before and after tax of CITIC Real Estate were RMB1,775,599, and RMB1,189,325,570.59, respectively. For the year ended 31 December 2014, the audited net profits before and after tax of CITIC Real Estate were RMB1,842,526, and RMB943,857,589.16, respectively. VII.DEFINITIONS Board CITIC Corporation Limited CITIC Limited CITIC Real Estate the board of directors of the Company CITIC Corporation Limited, being the largest shareholder of the Company, which holds 15.59% equity interest in the Company and is a wholly-owned subsidiary of CITIC Limited CITIC Limited, whose shares are listed and traded on the Hong Kong Stock Exchange CITIC Real Estate Co., Ltd., a joint stock company established in China with limited liability Company CITIC Securities Company Limited, a joint stock company established in China with limited liability, whose H shares and A shares are listed on the Hong Kong Stock Exchange and Shanghai Stock Exchange, respectively 5

6 Director(s) the director(s) of the Company GoldStone Investment GoldStone Investment Co., Ltd., a wholly-owned subsidiary of the Company Hong Kong Hong Kong Listing Rules Hong Kong Stock Exchange Equity Transfer Equity Transfer Agreement the Hong Kong Special Administrative Region of China the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited The Stock Exchange of Hong Kong Limited pursuant to the Equity Transfer Agreement, GoldStone Investment has agreed to transfer, subject to certain conditions, 90,000,000 shares held by GoldStone Investment in CITIC Real Estate, representing approximately 1.325% equity interest in CITIC Real Estate, to CITIC Corporation Limited the agreement dated 8 January 2016 between GoldStone Investment and CITIC Corporation Limited in relation to the Equity Transfer Base Date 31 December 2014 By order of the Board CITIC Securities Company Limited WANG Dongming Chairman Beijing, the PRC 8 January 2016 As at the date of this announcement, the executive directors of the Company are Mr. WANG Dongming, Mr. CHENG Boming, Mr. YIN Ke and Mr. LIU Lefei; the non-executive director is Mr. FANG Jun; and the independent non-executive directors are Mr. WU Xiaoqiu, Mr. LEE Kong Wai, Conway and Mr. RAO Geping. 6