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This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of the Company.

中遠海運發展股份有限公司 COSCO SHIPPING Development Co., Ltd.* (A joint stock limited company incorporated in the People’s Republic of with limited liability) (Stock Code: 02866)

INSIDE INFORMATION

(1) AGREEMENT OF INTENT IN RELATION TO POTENTIAL ACQUISITION AND (2) POSSIBLE APPLICATION FOR WHITEWASH WAIVER

This announcement is made by the Company pursuant to Rule 13.09(2) of the Listing Rules and Part XIVA of the SFO.

AGREEMENT OF INTENT

The Board is pleased to announce that on 13 January 2021 (after trading hours), the Company and COSCO SHIPPING Investment entered into the legally binding Agreement of Intent in relation to, among other things, the Potential Acquisition.

The principal terms of the Agreement of Intent are as follows:

Date

13 January 2021 (after trading hours)

Parties

(1) the Company, as prospective purchaser; and

(2) COSCO SHIPPING Investment, as prospective vendor.

Subject matter

Pursuant to the Agreement of Intent, the Company intends to purchase, and COSCO SHIPPING Investment intends to sell, the Target Assets, in consideration of allotment and issuance of shares by the Company to COSCO SHIPPING Investment. The final implementation plan of the Potential Acquisition is subject to the terms and conditions of the Definitive Agreement.

1 Consideration

The parties agree to engage a qualified asset appraisal agency, which is mutually recognized by the parties, to conduct a valuation on the Target Assets and issue the asset valuation report. The consideration for the Potential Acquisition will be determined by the parties based on the aforementioned asset valuation report, subject to filing with the competent state-owned assets supervision and administrative authorities.

The parties agree, in principle, the valuation benchmark date for the Potential Acquisition shall be 31 December 2020.

The Company will allot and issue new A Shares as consideration for the Potential Acquisition. The pricing benchmark date of the issuance and the issue price of the new A Shares shall be determined by the Company in accordance with the relevant laws and regulations. The number of A Shares to be issued shall be determined based on the final consideration for the Potential Acquisition divided by the issue price per A Share.

Other

The Agreement of Intent outlines the intention of the parties in relation to the Potential Acquisition. The specific rights and obligations of the parties under the Potential Acquisition shall be subject to the terms and conditions of the Definitive Agreement.

In the event that the parties fail to enter into the Definitive Agreement, the Company shall be entitled to terminate the Agreement of Intent by way of a written notice with no liability for breaches.

INFORMATION ON THE PARTIES

Information on the Group

The Company is a joint stock limited company established under the laws of the PRC with limited liability, the H Shares of which are listed on the Main Board of the and the A Shares of which are listed on the Stock Exchange.

The Group is principally engaged in shipping and industry-related leasing businesses, manufacturing of containers and provision of investment and financial services.

Information on COSCO SHIPPING Investment and COSCO SHIPPING

COSCO SHIPPING Investment is a company incorporated in Hong Kong with limited liability and an indirect wholly-owned subsidiary of COSCO SHIPPING. It is principally engaged in providing integrated financial services and investment in financial assets.

COSCO SHIPPING is a company incorporated under the laws of the PRC, and is a state-owned enterprise controlled by the State-owned Assets Supervision and Administration Commission of the State Council of the PRC. The scope of business of COSCO SHIPPING includes international shipping, ancillary business in international maritime transportation, import and export of goods and technologies, international freight agency business, leasing of self-owned vessels, sales of vessels, containers and steel and maritime engineering.

2 REASONS AND BENEFITS OF THE POTENTIAL ACQUISITION

As disclosed in the announcement of the Company dated 6 May 2019, as the Target Companies are principally engaged in design, research and development, manufacture, sales and delivery of containers and the related businesses, in order to address any potential competition between the Group and the COSCO SHIPPING Group, COSCO SHIPPING has provided an undertaking that, among other things, within three years after completion of the acquisition by COSCO SHIPPING Investment of the Target Companies, COSCO SHIPPING will transfer the equity interests in the Target Companies to the Company at a fair and reasonable market price through appropriate means and procedures in accordance with applicable laws.

The Potential Acquisition is expected to bring synergies to the container manufacturing business of the Group and is in line with the strategic development needs of the Group.

IMPLICATIONS UNDER THE LISTING RULES

It is expected that the Potential Acquisition, if materialized, will constitute a notifiable transaction of the Company under the Listing Rules.

As at the date of this announcement, 47,570,789 A Shares, representing approximately 0.41% of the total issued share capital of the Company, are held by COSCO SHIPPING, 4,410,624,386 A Shares, representing approximately 38.00% of the total issued share capital of the Company, are held by China Shipping, and 100,944,000 H Shares, representing approximately 0.87% of the total issued share capital of the Company, are held by Ocean Fortune Investment Limited, a wholly-owned subsidiary of COSCO SHIPPING Investment. Therefore, COSCO SHIPPING and its associates control or are entitled to exercise control over the voting rights in respect of 4,458,195,175 A Shares and 100,944,000 H Shares, representing approximately 39.28% of the total issued share capital of the Company. COSCO SHIPPING is an indirect controlling shareholder of the Company and therefore a connected person of the Company. COSCO SHIPPING Investment is an indirect wholly-owned subsidiary of COSCO SHIPPING and therefore an associate of COSCO SHIPPING. Accordingly, COSCO SHIPPING Investment is a connected person of the Company. Therefore, the Potential Acquisition, if materialized, will also constitute a connected transaction of the Company under the Listing Rules.

IMPLICATIONS UNDER THE TAKEOVERS CODE

As at the date of this announcement, COSCO SHIPPING (i) directly holds 47,570,789 A Shares, representing approximately 0.41% of the total issued share capital of the Company; and (ii) indirectly holds (a) through China Shipping (which is a wholly-owned subsidiary of COSCO SHIPPING), 4,410,624,386 A Shares, representing approximately 38.00% of the total issued share capital of the Company; and (b) through Ocean Fortune Investment Limited, a wholly-owned subsidiary of COSCO SHIPPING Investment (which is in turn an indirect wholly-owned subsidiary of COSCO SHIPPING) 100,944,000 H Shares, representing approximately 0.87% of the total issued share capital of the Company. Therefore, COSCO SHIPPING and parties acting in concert with it control or are entitled to exercise control over the voting rights in respect of 4,458,195,175 A Shares and 100,944,000 H Shares, representing approximately 39.28% of the total issued share capital of the Company.

3 If the Potential Acquisition materializes, it is expected that immediately after completion thereof, the voting rights held by COSCO SHIPPING and parties acting in concert with it in the Company will increase by more than 2%. Accordingly, upon completion of the Potential Acquisition, pursuant to Rule 26.1 of the Takeovers Code, COSCO SHIPPING and parties acting in concert with it will be obliged to make a mandatory general offer for all the issued Shares in the Company not already owned or agreed to be acquired by COSCO SHIPPING and parties acting in concert with it, unless the Whitewash Waiver from strict compliance with Rule 26.1 of the Takeovers Code is obtained from the Executive. As such, it is intended that the Potential Acquisition will be conditional upon the obtaining of the Whitewash Waiver and such condition will not be waivable. The Whitewash Waiver, if granted by the Executive, will be subject to the approval of the Independent Shareholders taken by way of a poll at the EGM.

On 9 November 2020, 47,570,789 A Shares, representing approximately 0.41% of the total issued share capital of the Company, were transferred from China Shipping to COSCO SHIPPING. Save as disclosed in this announcement, neither COSCO SHIPPING nor any parties acting in concert with it has acquired or disposed of any voting rights of the Company or has dealt for value in any shares, convertible securities, warrants, options or derivatives in respect of the securities in the Company in the six-month period prior to and including 13 January 2021, being the date on which the Company first made an announcement in respect of the Potential Acquisition.

SUSPENSION OF TRADING IN A SHARES

As the Potential Acquisition involves significant uncertainties, in order to ensure fair disclosure of information, safeguard the interests of the investors and avoid unusual movement in the price of the A Shares listed on the , upon application by the Company to the Shanghai Stock Exchange, the trading in the A Shares will be suspended from 14 January 2021.

The Company will undertake the Potential Acquisition in accordance with the relevant laws and regulations, and will publish an announcement in relation to the Potential Acquisition and apply to resume trading of the A Shares by 27 January 2021, being 10 trading days on the Shanghai Stock Exchange from the date of suspension of trading in the A Shares.

CONTINUATION OF TRADING IN H SHARES

Save as disclosed in this announcement, the Board confirms that it is not aware of any other inside information that needs to be disclosed under Part XIVA of the SFO. Accordingly, the Company will continue the trading of the H Shares listed on the Hong Kong Stock Exchange.

GENERAL

The Company will make monthly announcement(s) in relation to the progress of the Potential Acquisition. Further announcement(s) will be made by the Company as and when appropriate or required in accordance with the Listing Rules and the Takeovers Code.

As the Potential Acquisition is subject to the Definitive Agreement being entered into, and may or may not proceed, Shareholders and potential investors of the Company should exercise caution when dealing in the securities of the Company.

4 DEFINITIONS

Unless the context requires otherwise, capitalised terms used in this announcement shall have the meanings as follows:

“A Share(s)” the domestic share(s) in the ordinary share capital of the Company with a par value of RMB1.00 each, which are listed on the Shanghai Stock Exchange

“Agreement of Intent” the Agreement of Intent dated 13 January 2021 between the Company and COSCO SHIPPING Investment

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

“Board” the board of directors of the Company

“China Shipping” Company Limited# (中國海運集團有限 公司), a PRC state-owned enterprise, the controlling shareholder of the Company and a wholly-owned subsidiary of COSCO SHIPPING

“Company” COSCO SHIPPING Development Co., Ltd.* (中遠海運發展股 份有限公司), a joint stock limited company incorporated in the PRC with limited liability, the H Shares and A shares of which are listed on the Main Board of the Hong Kong Stock Exchange (Stock Code: 2866) and the Shanghai Stock Exchange (Stock Code: 601866), respectively

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

“COSCO SHIPPING” China COSCO Shipping Corporation Limited# (中國遠洋海運 集團有限公司), a PRC state-owned enterprise and an indirect controlling shareholder of the Company

“COSCO SHIPPING Group” COSCO SHIPPING, its subsidiaries and/or its associates (excluding the Group)

“COSCO SHIPPING COSCO SHIPPING Investment Holdings Co., Ltd. (中遠海運 Investment” 投資控股有限公司) (formerly known as COSCO SHIPPING Financial Holdings Co., Ltd. (中遠海運金融控股有限公司)), a company incorporated in Hong Kong with limited liability and an indirect wholly-owned subsidiary of COSCO SHIPPING

“Definitive Agreement” the formal agreement in relation to the Potential Acquisition

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

“Executive” the Executive Director of the Corporate Finance Division of the SFC or any delegates of the Executive Director

“Group” the Company and its subsidiaries

5 “H Share(s)” the overseas listed foreign shares in the ordinary share capital of the Company with a par value of RMB1.00 each, which are listed on Main Board of the Hong Kong Stock Exchange

“Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited

“Independent Shareholders” Shareholders other than (i) COSCO SHIPPING and parties acting in concert with it; and (ii) any other Shareholders who are interested in or involved in the Potential Acquisition and the Whitewash Waiver

“Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

“Potential Acquisition” the potential acquisition by the Company of the Target Assets

“PRC” the People’s Republic of China which, for the purpose of this announcement, excludes Hong Kong Special Administrative Region of the People’s Republic of China, the Macau Special Administrative Region of the People’s Republic of China and Taiwan

“RMB” , the lawful currency of the PRC

“SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

“Share(s)” H Share(s) and A Share(s)

“Shareholder(s)” holder(s) of the Share(s)

“Takeovers Code” the Hong Kong Code on Takeovers and Mergers

“Target Assets” 100% of the equity interests in the Target Companies

“Target Companies” collectively,

(1) Dong Fang International Container (Qidong) Co., Ltd.# ( 寰宇東方國際集裝箱（啟東）有限公司), a company established in the PRC with limited liability and a wholly- owned subsidiary of COSCO SHIPPING Investment;

(2) Dong Fang International Container (Qingdao) Co., Ltd.# ( 寰宇東方國際集裝箱（青島）有限公司), a company established in the PRC with limited liability and a wholly- owned subsidiary of COSCO SHIPPING Investment;

(3) Dong Fang International Container (Ningbo) Co., Ltd.# ( 寰宇東方國際集裝箱（寧波）有限公司), a company established in the PRC with limited liability and a wholly- owned subsidiary of COSCO SHIPPING Investment; and

6 (4) Shanghai Universal Logistics Technology Co., Ltd.# (上 海寰宇物流科技有限公司), a company established in the PRC with limited liability and a wholly-owned subsidiary of COSCO SHIPPING Investment

“Whitewash Waiver” a waiver from the Executive pursuant to Note 1 on dispensations from Rule 26 of the Takeovers Code in respect of the obligations of COSCO SHIPPING to make a mandatory general offer for all the securities of the Company not already owned or agreed to be acquired by COSCO SHIPPING and parties acting in concert with it which would otherwise arise as a result of the issue of the consideration shares under the Potential Acquisition

“%” per cent

By order of the Board COSCO SHIPPING Development Co., Ltd. Cai Lei Joint Company Secretary

Shanghai, the People’s Republic of China 13 January 2021

As at the date of this announcement, the Board comprises Mr. Wang Daxiong, Mr. Liu Chong and Mr. Xu Hui, being executive Directors, Mr. Huang Jian, Mr. Liang Yanfeng and Mr. Ip Sing Chi, being non-executive Directors, and Mr. Cai Hongping, Ms. Hai Chi Yuet, Mr. Graeme Jack, Mr. Lu Jianzhong and Ms. Zhang Weihua, being independent non-executive Directors.

The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this announcement and confirm having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement the omission of which would make any statement in this announcement misleading.

* The Company is a registered non-Hong Kong company as defined in the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) and it is registered under its Chinese name and under the English name “COSCO SHIPPING Development Co., Ltd.”.

# For identification purpose only.

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