GUOTAI JUNAN INTERNATIONAL HOLDINGS LIMITED (incorporated in Hong Kong with limited liability) (Stock Code: 1788)

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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. GUOTAI JUNAN INTERNATIONAL HOLDINGS LIMITED (incorporated in Hong Kong with limited liability) (Stock Code: 1788) CONNECTED TRANSACTION PROVISION OF FINANCIAL SERVICES PURSUANT TO THE SPONSOR APPOINTMENT AGREEMENT On 4 November 2016 (after trading hours of the Hong Kong Stock Exchange), GTJA Capital (an indirect wholly-owned subsidiary of the Company) and Guotai Junan Securities, among others, entered into the Sponsor Appointment Agreement, pursuant to which Guotai Junan Securities agreed to engage GTJA Capital, and GTJA Capital agreed to act, as one of the joint sponsors in connection with the Proposed Offering. LISTING RULES IMPLICATIONS As at the date of this announcement, Guotai Junan Securities is a controlling Shareholder of the Company indirectly holding approximately 65.05% of the total number of issued Shares and is therefore a connected person of the Company. Accordingly, the transaction contemplated under the Sponsor Appointment Agreement constitutes a connected transaction for the Company under the Listing Rules. As the applicable percentage ratios in respect of the Sponsor Appointment Agreement are more than 0.1% but less than 5%, the entering into of the Sponsor Appointment Agreement is subject to the reporting and announcement requirements but is exempt from the circular (including independent financial advice) and the independent Shareholders approval requirement under Chapter 14A of the Listing Rules. 1

2 BACKGROUND On 4 November 2016 (after trading hours of the Hong Kong Stock Exchange), GTJA Capital (an indirect wholly-owned subsidiary of the Company) and Guotai Junan Securities, among others, entered into the Sponsor Appointment Agreement, pursuant to which Guotai Junan Securities agreed to engage GTJA Capital, and GTJA Capital agreed to act, as one of the joint sponsors in connection with the Proposed Offering. SPONSOR APPOINTMENT AGREEMENT The principal terms of the Sponsor Appointment Agreement are set out as follows: Date 4 November 2016 (after trading hours of the Hong Kong Stock Exchange) Parties (i) GTJA Capital; (ii) Guotai Junan Securities; and (iii) other joint sponsors. As at the date of this announcement, to the best of the Directors knowledge, information and belief having made all reasonable enquiries, other joint sponsors (save for GTJA Capital) are Independent Third Parties of the Company and connected persons of the Company. Subject Matter Pursuant to the Sponsor Appointment Agreement, Guotai Junan Securities agreed to engage GTJA Capital, and GTJA Capital agreed to act, as one of the joint sponsors in connection with the Proposed Offering. The Sponsor Appointment Agreement shall take effect as of the commencement of provision of services by GTJA Capital and other joint sponsors as sponsors for the Proposed Offering. 2

3 Consideration GTJA Capital will receive a fee of US$500,000 (or HK$3,877,550) (the Sponsor Fee ) to act as one of the joint sponsors to Guotai Junan Securities in the Proposed Offering. The Sponsor Fee shall be payable by Guotai Junan Securities (and/or a nominee acting on its behalf) to GTJA Capital in the following manner: (i) 30% of the Sponsor Fee shall be payable within 30 days after the date of the submission of the listing application by Guotai Junan Securities to the Hong Kong Stock Exchange; (ii) 30% of the Sponsor Fee shall be payable within 30 days after the date of the listing hearing; and (iii) 40% or the remaining balance of the Sponsor Fee shall be payable within 30 days after the listing date of Guotai Junan Securities, and in any event by 31 December 2017 or promptly after the termination of the Sponsor Appointment Agreement if the Sponsor Appointment Agreement is terminated prior to 31 December The Sponsor Fee was determined after arm s length negotiations between GTJA Capital and Guotai Junan Securities, taking into consideration, among others, the prevailing market conditions, size of the Proposed Offering and industry practice for comparable transactions. The Directors (including the independent non-executive Directors) consider that the Sponsor Fee is fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole. Termination The Sponsor Appointment Agreement may be terminated at any time by Guotai Junan Securities or GTJA Capital or any other joint sponsors by written notice. If the engagement of one of the joint sponsors is terminated but not all is terminated, the Sponsor Appointment Agreement shall continue in full force and effect as between Guotai Junan Securities and the remaining joint sponsors which did not terminate its engagement or whose engagement was not terminated by Guotai Junan Securities. Unless previously terminated or extended in writing, the Sponsor Appointment Agreement will expire on the earlier of (i) the commencement of trading of the H shares of Guotai Junan Securities on the Hong Kong Stock Exchange; and (ii) 24 months from the date of the Sponsor Appointment Agreement. 3

4 REASONS FOR ENTERING INTO THE SPONSOR APPOINTMENT AGREEMENT The Company is an investment holding company and its subsidiaries are principally engaged in brokerage, corporate finance, asset management, loans and financing, financial products, market making and investments. GTJA Capital is an indirect wholly-owned subsidiary of the Company incorporated in Hong Kong and is licensed under the SFO to carry out Type 6 (advising on corporate finance) regulated activity. It is principally engaged in the provision of corporate finance advisory services, including but not limited to sponsorship service for initial public offerings, financial advisory service in relation to takeovers, mergers and acquisitions and compliance advisory service in Hong Kong. Guotai Junan Securities is a joint stock limited company incorporated in the PRC and is principally engaged in securities and futures brokerage, proprietary trading, securities underwriting and sponsoring, asset management, direct investment, fund management, securities investment consultancy, securities dealing and securities investment related financial advisory services, margin financing and securities lending, sales of securities investment funds and financial products, market making and other businesses in the PRC as approved by the China Securities Regulatory Commission, as well as the provision of securities products and services overseas. The Sponsor Appointment Agreement was entered into in the ordinary course of business of GTJA Capital. The Directors consider that the Group will benefit from the revenue and profits to be generated from the provision of services by GTJA Capital under the Sponsor Appointment Agreement. Further, the provision of the services by GTJA Capital to Guotai Junan Securities is effective in enhancing the capacities of GTJA Capital in providing professional and comprehensive services, which is in line with the Group s business development needs. In view of the above, the Directors (including the independent non-executive Directors) are of the view that the transaction contemplated under the Sponsor Appointment Agreement is conducted in the ordinary and usual course of business of the Group and the terms are fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole. As at the date of this announcement, none of the Directors have a material interest in the Sponsor Appointment Agreement. As such, no Director is required to abstain from voting on the relevant board resolutions to approve the Sponsor Appointment Agreement and the transaction contemplated thereunder. 4

5 LISTING RULES IMPLICATIONS As at the date of this announcement, Guotai Junan Securities is a controlling shareholder indirectly holding approximately 65.05% of the total number of issued Shares in the Company and is therefore a connected person of the Company. Accordingly, the transaction contemplated under the Sponsor Appointment Agreement constitutes a connected transaction for the Company under the Listing Rules. As the applicable percentage ratios in respect of the Sponsor Appointment Agreement are more than 0.1% but less than 5%, the entering into of the Sponsor Appointment Agreement is subject to the reporting and announcement requirements but exempt from the circular (including independent financial advice) and the independent Shareholders approval requirement under Chapter 14A of the Listing Rules. DEFINITIONS In this announcement, the following expressions shall have the meanings set out below unless the context requires otherwise: A Share(s) domestic share(s) of Guotai Junan Securities with a nominal value of RMB1.00 each, which are subscribed for or credited as paid up in Renminbi and are listed for trading on the Shanghai Stock Exchange; Board Company connected person(s) controlling shareholder Director(s) Group the board of Directors of the Company; Guotai Junan International Holdings Limited, a company incorporated in Hong Kong with limited liability, whose Shares are listed on the Main Board of the Hong Kong Stock Exchange; has the meaning ascribed to it under the Listing Rules; has the meaning ascribed to it under the Listing Rules; the director(s) of the Company; the Company and its subsidiaries; 5

6 GTJA Capital Guotai Junan Securities Guotai Junan Capital Limited, an indirect wholly-owned subsidiary of the Company; Guotai Junan Securities Co., Ltd, a joint stock limited company incorporated under the laws of the PRC and the controlling shareholder of the Company, the A Shares of which are listed on the Shanghai Stock Exchange (stock code: ); H Share(s) overseas-listed foreign share(s) in the share capital of Guotai Junan Securities with a nominal value of RMB1.00 each, which are to be subscribed for and traded in Hong Kong dollars; HK$ Hong Kong Hong Kong Stock Exchange Independent Third Party(ies) Listing Rules Proposed Offering PRC RMB or Renminbi SFO Shareholder(s) Hong Kong dollar, the lawful currency of Hong Kong; the Hong Kong Special Administrative Region of the People s Republic of China; The Stock Exchange of Hong Kong Limited; party(ies) who is/are independent of the Company and its connected person(s) the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange; the proposed offering of the H Shares of Guotai Junan Securities on the Hong Kong Stock Exchange, details of which are set out in the announcement dated 26 September 2016 as published by Guotai Junan Securities on the Shanghai Stock Exchange; the People s Republic of China; Renminbi, the lawful currency of the PRC; Securities and Future Ordinance (Chapter 571, Laws of Hong Kong); shareholder(s) of the Company; 6

7 Share(s) Sponsor Appointment Agreement US$ ordinary share(s) of the Company; the agreement entered into between, among others, GTJA Capital and Guotai Junan Securities on 4 November 2016 with respect to the Proposed Offering; and United States dollars, the lawful currency of the United States. By order of the Board Guotai Junan International Holdings Limited FENG Zheng Yao Helen Company Secretary Hong Kong, 4 November 2016 As at the date of this announcement, the Board comprises four executive Directors, being Dr. YIM Fung, Mr. WONG Tung Ching, Ms. QI Haiying and Mr. LI Guangjie; and three independent non-executive Directors, being Dr. FU Tingmei, Dr. SONG Ming and Mr. TSANG Yiu Keung. 7