This Circular Is Important and Requires Your Immediate Attention

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THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in CITIC Securities Company Limited, you should at once hand this circular together with the enclosed proxy form and reply slip for the Extraordinary General Meeting to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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

(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 6030)

PROPOSED ACQUISITION OF ASSETS BY ISSUANCE OF SHARES;

PROPOSED CHANGE OF INDEPENDENT NON-EXECUTIVE DIRECTOR;

AND

NOTICE OF THE 2019 FIRST EXTRAORDINARY GENERAL MEETING

A notice of the Extraordinary General Meeting of the Company to be held at Qing Room, 5th Floor, Beijing Ruicheng Four Seasons Hotel, No. 48 Liangmaqiao Road, Chaoyang District, Beijing, the PRC at 9:30 a.m. on Friday, 3 May 2019 is set out on pages 23 to 26 of this circular.

Whether or not you are able to attend the Extraordinary General Meeting, you are requested to read the notice of Extraordinary General Meeting carefully and complete the enclosed proxy form in accordance with the instructions printed thereon and return it as soon as possible. H Shareholders are required to return the proxy form to the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited; while A Shareholders are required to return the proxy form to the Board’s office, but in any event the proxy form shall be returned in person or by mail not less than 24 hours before the time appointed for the Extraordinary General Meeting or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting at the Extraordinary General Meeting or any adjournment thereof in person if you so wish.

If you wish to attend the Extraordinary General Meeting either in person or by proxy, you are required to complete and return the reply slip for the meeting to the Board Office on or before Friday, 12 April 2019.

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CONTENTS

Page

Definitions ...... 1

Letter from the Board ...... 5

Notice of the 2019 First Extraordinary General Meeting ...... 23

Appendix I Summary of the Report on the Acquisition of Assets by Issuance of Shares and Related Party Transaction of CITIC Securities Company Limited (Draft) ...... I-1

Appendix II Summary of the Pro Forma Financial Statements and Audit Report of Guangzhou Securities ...... II-1

Appendix III Summary of the Pro Forma Consolidated Financial Statements and Review Report of the Company ...... III-1

Appendix IV Summary of the Asset Valuation Report ...... IV-1

Appendix V Remedial Measures Taken in Relation to the Dilution of Immediate Return . . V-1

Appendix VI Letter of Undertaking from Directors and Senior Management of CITIC Securities Company Limited on the Remedial Measures taken in relation to the Dilution of Immediate Return under the Asset Acquisition ...... VI-1

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DEFINITIONS

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

“A Share(s)” means the domestic share(s) in the ordinary share capital of the Company with a nominal value of RMB1.00 each, which are listed on the Shanghai Stock Exchange (stock code: 600030)

“A Shareholder(s)” means holder(s) of A Shares

“Allied Appraisal” means Allied Appraisal Co., Ltd. (中聯國際評估諮詢有限公司)

“Asset Acquisition” or means the acquisition of the Target Assets by the Company and CITIC “Acquisition of Assets Securities Investment from Yuexiu Financial Holdings and Financial by Issuance of Shares” or Holdings Limited by issuance of the Consideration Shares of Company “Transaction”

“Asset Acquisition Agreement” the Agreement on Asset Acquisition by Issuance of Shares entered into among the Company, CITIC Securities Investment, Yuexiu Financial Holdings and Financial Holdings Limited on 4 March 2019

“Asset Acquisition Framework means the Framework Agreement on Asset Acquisition by Issuance of Agreement” Shares entered into among the Company, Yuexiu Financial Holdings and Financial Holdings Limited on 9 January 2019

“Asset Security Agreement” means the Asset Security Agreement entered into among the Company, Yuexiu Financial Holdings and the Target Company on 4 March 2019, as the appendix to the Asset Acquisition Agreement

“Asset Transfer Agreement” means in light of the transfer of Excluded Assets by Guangzhou Securities, the Agreement in relation to the Transfer of Equity Interest in Guangzhou Futures Co., Ltd. between Guangzhou Yuexiu Financial Holdings Group Co., Ltd. and Guangzhou Securities Company Limited and the Agreement in relation to the Transfer of Equity Interest in Golden Eagle Fund Management Co., Ltd. between Guangzhou Yuexiu Financial Holdings Group Co., Ltd. and Guangzhou Securities Company Limited entered into between the Target Company and Yuexiu Financial Holdings on 4 March 2019

“Audit/Valuation Benchmark means 30 November 2018 Date”

“Board” means the board of directors of the Company

“CITIC Securities Investment” means CITIC Securities Investment Limited (中信証券投資有限公司), a wholly-owned subsidiary of the Company

“Closing Date” means the date of completion of (i) the transfer of the Target Assets by Yuexiu Financial Holdings and Financial Holdings Limited to the Company and CITIC Securities Investment; and (ii) the registration of such equity transfer

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DEFINITIONS

“Closing Impairment Test” means the audit/review conducted by the accounting firm engaged by the purchasers to determine the net assets value of the Target Company as at the Impairment Test Benchmark Date

“Closing Impairment Test means the audit report issued by the accounting firm engaged by the Report” purchasers in relation to the Closing Impairment Test

“Company” CITIC Securities Company Limited

“Company Law” means the Company Law of the People’s Republic of China (as amended from time to time)

“connected persons” has the same meaning ascribed thereto under the Hong Kong Listing Rules

“Consideration Share(s)” means the new A Shares to be issued privately by the Company to Yuexiu Financial Holdings and Financial Holdings Limited under the Asset Acquisition

“CSDCC Shanghai Branch” means Shanghai Branch of China Securities Depository and Clearing Corporation Limited

“CSRC” means China Securities Regulatory Commission

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

“Extraordinary General means the 2019 first Extraordinary General Meeting of the Company to be Meeting” or “EGM” held at Qing Room, 5th Floor, Beijing Ruicheng Four Seasons Hotel, No. 48 Liangmaqiao Road, Chaoyang District, Beijing, the PRC at 9:30 a.m. on Friday, 3 May 2019

“Excluded Assets” means the 99.03% equity interest in Guangzhou Futures and 24.01% equity interest in Golden Eagle held by the Target Company to be transferred to Yuexiu Financial Holdings

“Financial Holdings Limited” means Guangzhou Yuexiu Financial Holdings Group Limited (廣州越秀金融控股集團有限公司)

“General Mandate” means the general and unconditional mandate granted to the Board at the 2017 annual general meeting of the Company to issue, allot or otherwise deal with additional Shares (whether A Shares or H Shares) representing up to the limit of 20% of the respective aggregate nominal values of the A Shares and/or H Shares in issue as at the date of passing the relevant resolution at the 2017 annual general meeting of the Company

“Golden Eagle” means Golden Eagle Fund Management Co., Ltd. (金鷹基金管理有限公司)

“Guangzhou Futures” means Guangzhou Futures Co., Ltd. (廣州期貨股份有限公司)

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DEFINITIONS

“Guangzhou SASAC” means State-owned Assets Supervision and Administration Commission of Guangzhou Municipal Government

“H Share(s)” means the overseas listed foreign share(s) in the ordinary share capital of the Company with a nominal value of RMB1.00 each, which are listed on the Hong Kong Stock Exchange (stock code: 6030)

“H Shareholder(s)” means holder(s) of H Shares

“Hong Kong” means the Hong Kong Special Administrative Region of the PRC

“Hong Kong Listing Rules” means the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (as amended from time to time)

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

“Impairment Test Benchmark means the second last date at the end of the month of the Closing Date Date”

“Issuance” means the issuance of new A Shares by the Company to Yuexiu Financial Holdings and Financial Holdings Limited under the Asset Acquisition

“Issuance Completion Date” means the date on which the Consideration Shares to be issued under the Asset Acquisition is registered under the name of Yuexiu Financial Holdings and Financial Holdings Limited

“Latest Practicable Date” means 15 March 2019, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining the relevant information contained in this circular

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

“Pricing Benchmark Date” means the date of the announcement on the relevant resolutions regarding the Asset Acquisition passed at the 34th meeting of the Sixth Session of the Board of Directors of the Company (i.e. 9 January 2019)

“Reference Value” means the sum of the audited book value of the net assets of Guangzhou Securities as at 30 November 2018 as set out in the audit report (XYZH/2019GZA10012) issued by ShineWing Certified Public Accountants LLP and the increased scale of the net assets of Guangzhou Securities by the transaction price of the Excluded Assets to be transferred by Guangzhou Securities

“Related Party Transaction” for the purpose of the Proposal in relation to the Acquisition of Assets by Issuance of Shares and Related Party Transaction and the Updated Proposal in relation to the Acquisition of Assets by Issuance of Shares and Related Party Transaction only, has the meaning ascribed to it under the Rules Governing the Listing of Stocks on Shanghai Stock Exchange currently in effect and as amended from time to time

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DEFINITIONS

“Report” means Report on the Asset Acquisition by Issuance of Shares and Related Party Transaction of CITIC Securities Company Limited (Draft)

“RMB” means Renminbi, the lawful currency of the PRC

“Share(s)” means the ordinary share(s) of the Company with a nominal value of RMB1.00 each, including A Share(s) and H Share(s)

“Shareholder(s)” means the registered holder(s) of the Shares of the Company

“SSE” means Shanghai Stock Exchange

“Target Assets” means 100% equity interest in the Target Company held by Yuexiu Financial Holdings and Financial Holdings Limited in aggregate (excluding the Excluded Assets)

“Target Company” or Guangzhou Securities Company Limited (廣州證券股份有限公司), and “Guangzhou Securities” its consolidated subsidiaries (excluding the Excluded Assets)

“Yuexiu Financial Holdings” Guangzhou Yuexiu Financial Holdings Group Co., Ltd. (廣州越秀金融控股集團股份有限公司)

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LETTER FROM THE BOARD

(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 6030)

Directors: Registered Office: Mr. ZHANG Youjun (Executive Director) North Tower, Excellence Times Plaza II Mr. YANG Minghui (Executive Director) No. 8 Zhong Xin San Road Futian District Mr. KUANG Tao (Non-executive Director) Shenzhen, Guangdong Province PRC Mr. LIU Ke (Independent Non-executive Director) Mr. HE Jia (Independent Non-executive Director) Principal place of business Mr. CHAN, Charles Sheung Wai in Hong Kong: (Independent Non-executive Director) 26th Floor, CITIC Tower 1 Tim Mei Avenue Central Hong Kong

18 March 2019

To the H Shareholders

PROPOSED ACQUISITION OF ASSETS BY ISSUANCE OF SHARES;

PROPOSED CHANGE OF INDEPENDENT NON-EXECUTIVE DIRECTOR;

AND

NOTICE OF THE 2019 FIRST EXTRAORDINARY GENERAL MEETING

I. INTRODUCTION

The purpose of this circular is to provide you with detailed information regarding, among others, (i) the Asset Acquisition Agreement and other resolutions in relation to proposed Acquisition of Assets by Issuance of Shares; (ii) the resolution in relation to the proposed change of independent non-executive Director; and (iii) a notice convening the EGM to enable you to make an informed decision on whether to vote for or against the proposed resolutions at the EGM.

II. PROPOSED ACQUISITION OF ASSETS BY ISSUANCE OF SHARES

1. BACKGROUND

References are made to the announcements of the Company dated 9 January 2019 and 4 March 2019 in relation to the proposed Acquisition of Assets by Issuance of Shares.

The Board considered and approved the Proposal in relation to the Acquisition of Assets by Issuance of Shares and Related Party Transaction at a meeting held on 9 January 2019, and the Company, Yuexiu Financial Holdings and Financial Holdings Limited entered into the Asset

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Acquisition Framework Agreement on the same date. The Board further considered and approved the Updated Proposal in relation to the Acquisition of Assets by Issuance of Shares and Related Party Transaction and other relevant resolutions at a meeting held on 4 March 2019. On 4 March 2019, the Company, CITIC Securities Investment (a wholly-owned subsidiary of the Company), Yuexiu Financial Holdings and Financial Holdings Limited entered into the Asset Acquisition Agreement, pursuant to which, the Company and CITIC Securities Investment agreed to acquire, and Yuexiu Financial Holdings and Financial Holdings Limited agreed to sell 100% equity interest in Guangzhou Securities (excluding the Excluded Assets) at a consideration of RMB13.46 billion, which will be satisfied by issuance of A Shares of the Company at the issue price of RMB16.97 per Consideration Share. The Asset Acquisition Agreement will replace the Asset Acquisition Framework Agreement to be the definitive agreement of the Transaction. On the Closing Date, 0.1% equity interest in the Target Company held by Yuexiu Financial Holdings will be transferred and registered under the name of CITIC Securities Investment, and the rest 99.9% equity interest in the Target Company held by Yuexiu Financial Holdings and Financial Holdings Limited will be transferred and registered under the name of the Company. Upon completion of the Transaction, the Target Company will become a wholly-owned subsidiary of the Company.

2. ASSET ACQUISITION AGREEMENT

Date: 4 March 2019

Parties: (i) the Company and CITIC Securities Investment (as the purchasers); and

(ii) Yuexiu Financial Holdings and Financial Holdings Limited (as the sellers)

Target Assets: 100% equity interest in Guangzhou Securities Company Limited (the Target Company), which is held as to 32.765% and 67.235% by Yuexiu Financial Holdings and Financial Holdings Limited, respectively.

As a pre-condition of the Asset Acquisition, the Target Company shall transfer the Excluded Assets, being 99.03% equity interest in Guangzhou Futures and 24.01% equity interest in Golden Eagle held by the Target Company, to Yuexiu Financial Holdings. According to the asset valuation report (Zhong Lian Guo Ji Ping Zi (2019) No. VIGQA0018) issued by Allied Appraisal and filed by Guangzhou Yuexiu Group Company Limited, the appraisal value of the entire equity interest in Guangzhou Futures as at the valuation benchmark date (i.e. 30 November 2018) is RMB1,026,373,800, thus the appraisal value of 99.03% equity interest in Guangzhou Futures held by the Target Company is RMB1,016,418,000. According to the asset valuation report (Zhong Lian Guo Ji Ping Zi (2019) No. VIGQA0016) issued by Allied Appraisal and filed by Guangzhou Yuexiu Group Company Limited, the appraisal value of the entire equity interest in Golden Eagle as at the valuation benchmark date

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(i.e. 30 November 2018) is RMB1,031,946,400, thus the appraisal value of 24.01% equity interest in Golden Eagle held by the Target Company is RMB247,770,300. Therefore, the appraisal value of the Excluded Assets as of the Audit/ Valuation Benchmark Date is RMB1,264,188,300. Based on the Asset Transfer Agreement entered into between the Target Company and Yuexiu Financial Holdings on 4 March 2019, the transaction price of the Excluded Assets is RMB1,264,188,300, which will be paid by Yuexiu Financial Holdings in cash.

The sellers undertook that, the Target Company did not sign any documents or make any undertakings or arrangements in relation to the transfer of the Excluded Assets, other than those agreed in the Asset Transfer Agreement.

According to the Asset Transfer Agreement and as agreed among all parties, the consideration for the transfer of the Excluded Assets by the Target Company will not be adjusted based on its profit or loss, or any increase or decrease in the net assets of the Excluded Assets during the period from the valuation benchmark date to the closing date.

The sellers shall ensure to initiate the closing of transfer of the Excluded Assets (i.e. the relevant filing or change of registration with the relevant industrial and commercial administrations) from the next working day of satisfaction of the following conditions: (i) consideration and approval of the shareholder’s qualification of Yuexiu Financial Holdings by the CSRC; and (ii) consideration and approval of the Transaction by the Listed Companies Merger and Reorganisation Vetting Committee of the CSRC, and shall ensure to complete the closing of transfer of the Excluded Assets (i.e. completion of the filing and registration procedures in respect of the transfer of the Excluded Assets with relevant industrial and commercial authorities) within 30 days upon satisfaction of all the abovementioned conditions, which may be postponed if the failure of completion of the closing within the abovementioned period by the sellers is due to regulatory reasons or reasons related to the filing or change of registration procedures with the relevant industrial and commercial administrations.

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LETTER FROM THE BOARD

Transaction Price: The transaction price of the Target Assets under the Asset Acquisition is RMB13.46 billion, which was determined by all parties after arm’s length negotiations with reference to (i) the appraisal value of 100% equity interest in the Target Company (excluding Excluded Assets) as at the valuation benchmark date (i.e. 30 November 2018), being RMB12,195,683,100, as set out in the asset valuation report (Zhong Lian Guo Ji Ping Zi (2019) No. VYGQA0033) issued by Allied Appraisal on 26 February 2019 based on market approach and approved by the Guangzhou SASAC, and (ii) the transaction price of the Excluded Assets as mentioned above, being RMB1,264,188,300. As confirmed by the parties, the abovementioned transaction price of the Target Assets includes the cash consideration to be paid to the Target Company upon completion of delivery of the Excluded Assets.

Payment & Consideration The consideration of the Transaction will be satisfied by non- Shares: public issuance of A Shares by the Company on a one-off basis at the completion date of the Issuance.

Details of the Consideration Shares are set out in “3. ISSUANCE OF CONSIDERATION SHARES”.

Conditions precedent: The implementation of the Asset Acquisition is subject to the accomplishment and satisfaction of the following conditions precedent:

(i) consideration and approval of the Transaction by the Board and the shareholders’ general meeting of the Company;

(ii) consideration and/or approval of the Transaction by the board of directors and the shareholders’ general meeting of Yuexiu Financial Holdings, as well as by the shareholders of Financial Holdings Limited;

(iii) approval of the Transaction by the relevant State-owned Assets Supervision and Administration Authority, as well as filing the valuation report regarding the Asset Acquisition with the relevant State-owned Assets Supervision and Administration Authority and obtaining its approval on such valuation report;

(iv) approval of the Transaction, the changes in the shareholders of the Target Company and the Company and other related matters by the relevant departments of the CSRC; and

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(v) in respect of the transfer of the Excluded Assets of the Target Company, the completion of filing the amendments to the articles of association of Guangzhou Futures regarding the transfer of 99.03% equity interest in Guangzhou Futures and the change of registration regarding the transfer of 24.01% equity interest in Golden Eagle with the relevant industrial and commercial administrations, as well as the full payment of the consideration for the transfer of equity interest in the Excluded Assets by Yuexiu Financial Holdings.

Closing: The sellers shall procure the Target Company to issue its share register with each of the Company and CITIC Securities Investment being registered as a shareholder of the Target Company, as well as to proceed with the filing of the articles of association of the Target Company and the change of registration of the shareholders of the Target Company with the relevant industrial and commercial administration (if required within 30 days upon satisfaction of all the abovementioned conditions precedent, which may be postponed if the failure of completion of the abovementioned procedures within the abovementioned period by the sellers is due to regulatory reasons or reasons related to the filing or change of registration procedures with the relevant industrial and commercial administrations. All risks, benefits and burden of the Target Assets will be shifted from the sellers to the purchasers commencing from the Closing Date (including the Closing Date).

After the Closing Date, the Company shall proceed with the application to the SSE and CSDCC Shanghai Branch in relation to the registration of the Consideration Shares under the name of the sellers at an early date, which shall be within the effective period of the approval granted by the CSRC. The sellers shall provide necessary documents and assistance as required by the Company.

Closing Impairment Test: Due to the differences in the accounting policy, accounting estimation standard and management judgment implemented by the purchasers, the sellers and the Target Company as at the Audit/Valuation Benchmark Date, the Company, Yuexiu Financial Holdings and the Target Company entered into the Asset Security Agreement (as the appendix to the Asset Acquisition Agreement) on 4 March 2019 in relation to, among others, the specific standards and compensation arrangements regarding the Closing Impairment Test, the impairment compensation arrangements for certain assets on the Target Company’s balance sheet after the Impairment Test Benchmark Date and the risk management and control of the off-balance-sheet assets of the Target Company.

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Upon completion of delivery of the Target Assets, the Company shall engage an accounting firm to conduct the Closing Impairment Test on the Target Company to determine the net assets value of the Target Company as at the Impairment Test Benchmark Date and issue the Closing Impairment Test Report in this respect.

If the net assets of the Target Company as set out in the Closing Impairment Test Report is lower than the Reference Value by no more than RMB100 million (including RMB100 million), such difference shall be borne by the purchasers and Yuexiu Financial Holdings has no obligation to compensate for such difference. However, if the net assets of the Target Company as set out in the Closing Impairment Test Report is lower than the Reference Value by more than RMB100 million, Yuexiu Financial Holdings shall compensate the full amount of such difference after deducting RMB100 million to the Target Company in cash, by provision of guarantee or any other forms as agreed by the Company within 30 working days from the date of issuing the Closing Impairment Test Report or within the date next to the Issuance Completion Date (whichever is later).

Profit or loss during Any increase or decrease in the net assets of the Target the transitional period: Company arising from its profit or loss or other reasons during the period from the Audit/Valuation Benchmark Date (not including the Audit/Valuation Benchmark Date) to the Closing Date (including the Closing Date) shall be enjoyed or borne by the purchasers, unless otherwise provided in the Asset Acquisition Agreement or the Asset Security Agreement.

Effectiveness: The Asset Acquisition Agreement shall be formed upon being signed by the legal representatives or authorized representatives of the parties and chopped with the official chop of each party, and shall take effect and become legally binding to the parties upon the satisfaction of the abovementioned conditions precedent (i) to (iv).

3. ISSUANCE OF CONSIDERATION SHARES

(1) Way of Issuance

The Issuance will be made to specific target subscribers in a non-public way.

(2) Type and nominal value of the Consideration Shares

RMB denominated ordinary shares (A Shares) with a nominal value of RMB1.00 per share.

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(3) Targets of the Issuance and Way of Subscription

The targets of the Issuance are Yuexiu Financial Holdings and Financial Holdings Limited, both of which will subscribe the newly issued A Shares at a consideration of their equity interests in the Target Assets with equal value to the additional A Shares.

(4) The Pricing Benchmark Date and the Issue Price

The Pricing Benchmark Date of the Issuance is the date of the announcement on the relevant resolutions passed at the 34th meeting of the sixth session of the Board convened by the Company.

The issue price of the Issuance is fixed at RMB16.97 per share, which is not less than 90% of the average trading price of A Shares of the Company for the last 60 trading days prior to the Pricing Benchmark Date.

During the period from the Pricing Benchmark Date to the Issuance Completion Date, in case of any ex-rights or ex-dividends events including distribution of dividends, bonus shares, rights issue and conversion of capital reserve into share capital, etc., the issue price will be adjusted in accordance with the relevant regulations of the SSE.

(5) Number of Shares to be issued

Based on the abovementioned transaction price of the Target Assets and the issue price, the number of Consideration Shares to be issued by the Company to Yuexiu Financial Holdings and Financial Holdings Limited is 259,880,188 shares and 533,284,219 shares, respectively, being 793,164,407 shares in aggregate. The number of shares to be issued under the Issuance will be rounded down to the nearest unit, with the fractional portion being renounced voluntarily by the sellers. The ultimate number of A Shares to be issued is subject to the approval by the CSRC.

(6) Lock-up period

The sellers undertook that they will not transfer the Consideration Shares subscribed under the Issuance within 48 months from the Issuance Completion Date, unless the CSRC or other regulatory authorities requires longer lock-up period.

Upon completion of the Asset Acquisition, the abovementioned lock-up period arrangement shall also apply to the additional A Shares to be issued to the sellers due to distribution of dividends, bonus shares, rights issue and conversion of capital reserve into share capital, etc..

(7) Accumulated Undistributed Profits

Upon completion of the Issuance, the accumulated undistributed profits of the Company prior to the Issuance will be shared among the new and existing Shareholders of the Company in accordance with the law.

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LETTER FROM THE BOARD

(8) Listing Arrangement

The additional A Shares to be issued by the Company under the Asset Acquisition will be applied for listing and trading on the SSE.

(9) General Mandate

The Consideration Shares will be issued pursuant to the General Mandate.

4. INFORMATION ON THE TARGET COMPANY

The Target Company is a joint stock company incorporated in the PRC with limited liability. It is principally engaged in margin trading, securities proprietary investment services for institutions, securities investment fund distribution services, commission on financial instruments, securities asset management, referral services for futures companies (limited to securities companies), securities brokerage, securities underwriting and sponsorship, financial advising in relation to securities trading and investment activities, securities investment consultation.

The audited consolidated total assets and net assets of the Target Company as at 30 November 2018 were approximately RMB47,810,843,300 and RMB9,888,756,900, respectively. The audited consolidated net profits (both before and after taxation) of the Target Company for the two financial years ended 31 December 2017 were as follows:

For the year ended For the year ended 31 December 2016 31 December 2017 RMB RMB

Net profit (before taxation) 1,217,652,700 225,644,600

Net profit (after taxation) 917,606,800 171,089,300

Note: the abovementioned financial data of the Target Company does not include the Excluded Assets.

5. REASONS FOR AND BENEFITS OF ENTERING INTO THE ASSET ACQUISITION AGREEMENT

By taking advantage of the Company’s capital, professional, talent and risk management advantages, the Transaction will help the Target Company to rapidly grow bigger and stronger, remarkably enhance its comprehensive capacity in serving the real economy of Guangdong Province and surrounding areas, and continuously improve its service quality, so as to avoid inefficient utilization of resources causing by homogeneous competition. Upon completion of the Transaction, Yuexiu Financial Holdings and Financial Holdings Limited will become major Shareholders of the Company, and will help build a business driven financial holding conglomerate with strategic cooperation and market leadership by strategic investment in high quality stake in financial enterprises and focusing on the change of growth drivers of the Guangdong-Hong Kong-Macao Greater Bay Area economy. Given that the Company is a leading securities company in China and Yuexiu Financial Holdings has significant regional marketing advantages in Guangdong-Hong Kong- Macao Greater Bay Area, the strategic cooperation between the parties will achieve strong synergy effect. The Company can further expand the market in Guangdong area by seizing the historic opportunity in building the Guangdong-Hong Kong-Macao Greater Bay Area. In addition, the Target

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Company is one of the earliest established securities companies in China. It has obtained certain regional brand awareness based on its long existence in Guangdong area. Upon completion of the Transaction, the number of staff of the Company located in Guangdong Province and surrounding areas will significantly increase. By leveraging on the existing outlets and customer resources of the Target Company, the Company can achieve leapfrog development in Guangdong Province or even the whole South China Region. As such, the Directors are of the view that the proposed Transaction under the Asset Acquisition Agreement was entered into after arm’s length negotiation and on normal commercial terms, and the terms and conditions therein are fair and reasonable and in the interests of the Company and its Shareholders as a whole.

6. HONG KONG LISTING RULES IMPLICATIONS

As the applicable percentage ratios relating to the Transaction exceed 5% but are all less than 25%, the Transaction constitutes a discloseable transaction for the Company under Chapter 14 of the Hong Kong Listing Rules and is subject to the reporting and announcement requirements under Chapter 14 of the Hong Kong Listing Rules, but exempt from the shareholders’ approval requirement.

In accordance with the PRC regulatory requirements, the Asset Acquisition is subject to the approval by the Shareholders’ general meeting of the Company.

7. GENERAL INFORMATION ON THE PARTIES

(1) Information on the Company

The Company is principally engaged in securities brokerage (for areas other than Shandong Province, Henan Province, Tiantai and Cangnan Counties of Zhejiang Province); securities investment consulting; financial advisory services related to securities trading and securities investment activities; securities underwriting and sponsorship; securities proprietary business; securities asset 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.

(2) Information on CITIC Securities Investment

CITIC Securities Investment is a limited liability company incorporated in the PRC, and is a wholly-owned subsidiary of the Company. CITIC Securities Investment is principally engaged in financial products investment, securities investment and equity investment.

(3) Information on Yuexiu Financial Holdings

Yuexiu Financial Holdings is a joint stock company incorporated in the PRC with limited liability, whose A shares are listed on the Shenzhen Stock Exchange (stock code: 000987). It is principally engaged in financial business and department store business.

(4) Information on Financial Holdings Limited

Financial Holdings Limited is a limited liability company incorporated in the PRC. Financial Holdings Limited is the principal financial shareholding platform of Yuexiu Financial Holdings. It is principally engaged in financial business, mainly including securities, financial leasing, private equity investment, financing guarantee, financial technology, etc..

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LETTER FROM THE BOARD

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, Yuexiu Financial Holdings and Financial Holdings Limited and their ultimate beneficial owners are third parties independent of the Company and connected persons of the Company.

III. RESOLUTION ON THE UPDATED PLAN IN RELATION TO THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION

For details of this resolution, please refer to the section headed “II. PROPOSED ACQUISITION OF ASSETS BY ISSUANCE OF SHARES” of this circular.

Relevant resolution will be put forward at the EGM for Shareholders’ approval as a special resolution.

IV. RESOLUTION ON THE TRANSACTION CONSTITUTING A RELATED PARTY TRANSACTION

In accordance with the transaction price and the number of shares to be issued under the Issuance which were negotiated and determined among the parties after the appraisal, the total shareholdings of Yuexiu Financial Holdings and its wholly-owned subsidiary, Financial Holdings Limited, in the Company will be more than 5% upon completion of the Transaction. Pursuant to Article 10.1.3 and 10.1.6 of the Listing Rules of the Shanghai Stock Exchange, Yuexiu Financial Holdings and Financial Holdings Limited will be related parties of the Company, therefore the Transaction constitutes a Related Party Transaction.

Relevant resolution will be put forward at the EGM for Shareholders’ approval as a special resolution.

V. RESOLUTION ON THE REPORT ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF CITIC SECURITIES COMPANY LIMITED (DRAFT) AND ITS SUMMARY

In accordance with the requirements of the Administrative Measures for the Significant Asset Restructurings of Listed Companies and other relevant laws and regulations, the Company prepared the Report on the Acquisition of Assets by Issuance of Shares and Related Party Transaction of CITIC Securities Company Limited (Draft) and its summary in relation to the Asset Acquisition.

Relevant resolution will be put forward at the EGM for Shareholders’ approval as a special resolution. Major contents of the Report have been set out in Appendix I of this circular. For full text of the Report and its summary, please refer to the relevant information published by the Company on the website of the SSE on 5 March 2019.

VI. RESOLUTION ON ENTERING INTO THE AGREEMENT ON ASSET ACQUISITION BY ISSUANCE OF SHARES AND ITS APPENDIX AMONG THE COMPANY, ITS WHOLLY-OWNED SUBSIDIARY AND SPECIFIC PARTIES SUBJECT TO CONDITIONS PRECEDENT

The Company, CITIC Securities Investment Limited, a wholly-owned subsidiary of the Company, Yuexiu Financial Holdings and Financial Holdings Limited entered into the Agreement on Asset Acquisition by Issuance of Shares and its appendix, the Asset Security Agreement, as the formal agreements of the Transaction subject to conditions precedent on 4 March 2019, pursuant to which, the parties have agreed on the overall plan for the Acquisition of Assets by Issuance of Shares, the transaction

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LETTER FROM THE BOARD price and payment methods of the Target Assets, issuance and subscription of shares under the Asset Acquisition, transfer of the Excluded Assets by Guangzhou Securities, debt and personnel arrangements, the closing, profit or loss during the transitional period, the Closing Impairment Test and the relevant compensation arrangements, the balance-sheet assets security arrangements after the Closing Date, risk management and control on off balance-sheet assets, arrangements during the transitional period, conditions precedent, representations and undertakings by parties, taxation, effectiveness, modification and rescission of the agreement, liability for breach, confidentiality, applicable laws and dispute resolutions, and other relevant matters. Major contents of the Asset Acquisition Agreement have been set out in the section headed “II. PROPOSED ACQUISITION OF ASSETS BY ISSUANCE OF SHARES” of this circular.

Relevant resolution will be put forward at the EGM for Shareholders’ approval as a special resolution.

VII. RESOLUTION ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES NOT CONSTITUTING A BACKDOOR LISTING AS STIPULATED IN ARTICLE 13 OF THE ADMINISTRATIVE MEASURES FOR THE SIGNIFICANT ASSET RESTRUCTURINGS OF LISTED COMPANIES

The Company intends to make following prudent judgment regarding whether or not the Asset Acquisition constitutes a backdoor listing as stipulated in Article 13 of the Administrative Measures for the Significant Asset Restructurings of Listed Companies:

As of the Latest Practicable Date, the largest Shareholder of the Company is CITIC Corporation Limited, and the Company has no controlling Shareholder or de facto controller.

In accordance with the transaction price and the number of shares to be issued under the Issuance which were negotiated and determined among the parties after the appraisal, CITIC Corporation Limited will remain to be the largest Shareholder of the Company upon completion of the Transaction with a shareholding percentage of approximately 9.35% higher than that of Yuexiu Financial Holdings and Financial Holdings Limited in aggregate. The Company will remain to have no controlling Shareholder or de facto controller.

The implementation of the Transaction by the Company would not result in any change of control of the Company and therefore would not constitute a backdoor listing as stipulated in Article 13 of the Administrative Measures for the Significant Asset Restructurings of Listed Companies.

Relevant resolution will be put forward at the EGM for Shareholders’ approval as a special resolution.

VIII. RESOLUTION ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF THE COMPANY COMPLYING WITH RELEVANT LAWS AND REGULATIONS

The Company intends to make following prudent judgement regarding whether or not the Acquisition of Assets by Issuance of Shares and Related Party Transaction of the Company complies with relevant laws and regulations:

In accordance with the requirement of the Company Law, the Securities Law of the People’s Republic of China, the Administrative Measures for the Significant Asset Restructurings of Listed Companies, the Provisions on Several Issues concerning Regulating the Significant Asset Restructurings of Listed Companies, the Administrative Measures for the Issuance of Securities by Listed Companies and other

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LETTER FROM THE BOARD laws, administrative regulations, departmental rules and statutory documents, the Board considered that the Transaction has fulfilled the substantive conditions as set out in the abovementioned rules including Articles 11 and 43 of the Administrative Measures for the Significant Asset Restructurings of Listed Companies and Articles 37, 38 and 39 of the Administrative Measures for the Issuance of Securities by Listed Companies after prudent self-inspection and review on the actual conditions of the Company and the updated plan in relation to the Transaction.

Relevant resolution will be put forward at the EGM for Shareholders’ approval as a special resolution.

IX. RESOLUTION ON THE TRANSACTION COMPLYING WITH ARTICLE 4 OF THE PROVISIONS ON SEVERAL ISSUES CONCERNING REGULATING THE SIGNIFICANT ASSET RESTRUCTURINGS OF LISTED COMPANIES

The Company intends to make following prudent judgment regarding whether or not the Acquisition of Assets by Issuance of Shares satisfies Article 4 of the Provisions on Several Issues concerning Regulating the Significant Asset Restructurings of Listed Companies, the Company intended to make careful judgement as follows:

1. Guangzhou Securities has obtained relevant qualifications and permits for conducting its principal businesses, and the updates and procedures in relation to the approvals to be obtained under the Transaction have been disclosed in the proposal and the Report in relation to the Transaction. Moreover, a special warning has been made on the risk that such approvals may or may not be obtained.

2. The Target Assets of the Transaction is 100% equity interest in Guangzhou Securities held by Yuexiu Financial Holdings and Financial Holdings Limited, the ownership of which is legally held by Yuexiu Financial Holdings and Financial Holdings Limited. Except for the pledge on the 1,403,108,629 shares of Guangzhou Securities held by Financial Holdings Limited, which Financial Holdings Limited undertook to release through performing payment obligations, offering other guarantees or other measures and complete the change of registration with the relevant industrial and commercial administrations before the Listed Companies Merger and Reorganisation Vetting Committee of the CSRC starts the review process of the Transaction (Financial Holdings Limited had repaid its loans, but the relevant procedures for releasing the share pledge have not been completed), there is no mortgage, pledge, seizure, freezing or other restrictions or prohibitions on the transfer of the shares of Guangzhou Securities. In addition, Guangzhou Securities has no falsified capital contribution by shareholders or other conditions affecting its legally valid existence. With clear ownership of the Target Assets, there is no legal impediment to the transfer of the Target Assets subject to fulfilment of relevant legal procedures and conditions precedent.

3. Upon completion of the Transaction, Guangzhou Securities will become a direct/indirect wholly- owned subsidiary of the Company. The Transaction is conducive to improve the integrity of the Company’s assets, and is beneficial for the Company to remain its independence in terms of operations, assets, financial conditions, personnel and institutions.

4. The transaction will facilitate the business development of the Company in Guangdong area. Guangzhou Securities has obtained certain regional brand awareness based on its long existence in Guangdong area. Upon completion of the Transaction, the number of customers of the Company located in Guangdong and surrounding areas will be significantly increased. By leveraging on the existing outlets and customer resources of Guangzhou Securities, the Company

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LETTER FROM THE BOARD

can achieve leapfrog development in Guangdong Province or even the whole South China Region, thereby enhancing the profitability and competitiveness of the Company. Therefore, the Transaction can help the Company to improve its financial position and its sustainable profitability, and to highlight its main business and enhance its risk resistance capacity. CITIC Corporation Limited, the largest Shareholder of the Company, and the counterparties, namely Yuexiu Financial Holdings and Financial Holdings Limited, have issued several undertakings, including the Letter of Undertaking on Maintaining the Independence of CITIC Securities Co., Ltd., the Letter of Undertaking on Reducing and Regulating Related Party Transactions and the Letter of Undertaking on Regulating Related Party Transactions. The fulfilment of such undertakings by the relevant parties in compliance with relevant laws and regulations will help to enhance the independence of the Company, regulate Related Party Transactions and avoid horizontal competition.

In view of the above, the Board considers that the Transaction fulfils all the conditions provided by Article 4 of the Provisions on Several Issues concerning Regulating the Significant Asset Restructurings of Listed Companies.

Relevant resolution will be put forward at the EGM for Shareholders’ approval as a special resolution.

X. RESOLUTION ON THE AUDIT REPORT, THE PRO FORMA REVIEW REPORT AND THE ASSET VALUATION REPORT IN RELATION TO THE TRANSACTION

Upon review, the Company intends to make following prudent judgement:

It is agreed upon the Pro Forma Financial Statements and Audit Report of Guangzhou Securities Company Limited (Excluding Equity Interests in Guangzhou Futures and Golden Eagle) for the Years of 2016, 2017 and the Eleven Months Ended 30 November 2018 (PwC Zhong Tian Te Shen Zi [2019] No. 0974) (the “Pro Forma Financial Statements and Audit Report of Guangzhou Securities”) and the Pro Forma Consolidated Financial Statements and Review Report of CITIC Securities Co., Ltd. for the Year of 2017 and the Eleven Months Ended 30 November 2018 (PwC Zhong Tian Yue Zi [2019] No.0007) (the “Pro Forma Consolidated Financial Statements and Review Report of the Company”) issued by PricewaterhouseCoopers Zhong Tian LLP (Special General Partnership), and the Asset Valuation Report on the 100% Equity Interest in Guangzhou Securities Company Limited (Excluding 99.03% Equity Interest in Guangzhou Futures Co., Ltd. and 24.01% Equity Interests in Golden Eagle Fund Management Co., Ltd.) Held as to 32.765% and 67.235% by Guangzhou Yuexiu Financial Holdings Group Co., Ltd. and Guangzhou Yuexiu Financial Holdings Group Limited respectively to be Acquired by CITIC Securities Co., Ltd. by Issuance of Shares (ZLGJPZ [2019] No. VYGQA0033) (the “Asset Valuation Report”) issued by Allied Appraisal in relation to the Asset Acquisition by the Company.

Relevant resolution will be put forward at the EGM for Shareholders’ approval as a special resolution. Major contents of (i) the Pro Forma Financial Statements and Audit Report of Guangzhou Securities, (ii) the Pro Forma Consolidated Financial Statements and Review Report of the Company, and (iii) the Asset Valuation Report have been set out in Appendix II, Appendix III and Appendix IV of this circular, and the full text of which have been published by the Company on the website of the SSE on 5 March 2019.

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LETTER FROM THE BOARD

XI. RESOLUTION ON THE INDEPENDENCE OF THE APPRAISAL INSTITUTION, REASONABLENESS OF THE APPRAISAL ASSUMPTIONS, THE RELEVANCE OF APPRAISAL METHOD SELECTED TO APPRAISAL OBJECTIVES AND STATUS OF ASSETS UNDER APPRAISAL AND THE FAIRNESS OF THE APPRAISAL PRICE

The Company intends to make following prudent judgement in relation to the appraisal on the Target Assets by Allied Appraisal and the valuation report issued in this respect:

Allied Appraisal, the appraisal institution for the Transaction, is qualified to carry out securities and futures business. Allied Appraisal and its appraisers in charge of this appraisal do not have any relationship other than business relationship with the Company and the counterparties, or any actual or expected interest other than professional charges. Therefore, it meets the independence requirement for carrying out the relevant appraisal on the Transaction.

The appraisal assumptions and limitations set by Allied Appraisal and its appraisers are in accordance with the relevant national laws and regulations, the common practices or standards in the market and the actual situation of the target under appraisal. The assumptions are reasonable.

The purpose of this appraisal is to provide reasonable reference for determining the consideration of the Transaction. The scope of assets actually appraised by the appraisal institution is consistent with the scope of assets to be appraised under the engagement. During the course of appraisal, the appraisal institution implemented the relevant appraisal procedures, followed the principles such as independence, objectivity, scientificity and impartiality, used legitimate appraisal methods that are suitable for the actual situation of the Target Assets under the Transaction, and referred to reliable reference data and information. The appraisal value of the assets is fair and accurate. The appraisal methods adopted are appropriate. The conclusions of appraisal are reasonable. The appraisal methods are in line with the relevance of the appraisal objectives.

The principles for value analysis, the model adopted, the discount rate and other key parameters selected are in line with the actual conditions of the Target Assets under the Transaction. The appraisal basis and conclusions are reasonable. The final transaction price of the Target Assets under the Transaction was determined by all parties after arm’s length negotiations with reference to the appraisal results issued by the appraisal institution with qualification to carry out securities and futures business and approved by the Guangzhou SASAC, which is fair.

Relevant resolution will be put forward at the EGM for Shareholders’ approval as a special resolution.

XII. RESOLUTION ON THE RISK WARNING ON DILUTION OF IMMEDIATE RETURN AND REMEDIAL MEASURES TAKEN IN THIS RESPECT UNDER THE TRANSACTION

Upon completion of the Transaction, Guangzhou Securities will become a direct or indirect wholly- owned subsidiary of the Company and the net assets attributable to the owners of the parent company will increase. However, the Asset Acquisition will increase the total share capital of the Company, which may result in dilution of the immediate return of the Company.

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LETTER FROM THE BOARD

In accordance with the relevant requirements of the Opinions of the General Office of the State Council on Further Strengthening the Protection of the Legal Rights and Interests of Minority Investors in the Capital Market (Guo Ban Fa [2013] No. 110) issued by the General Office of the State Council, and the Guidance on Matters regarding Dilution of Immediate Return by IPO, Refinancing and Significant Asset Restructuring (CSRC Announcement [2015] No. 31), the Company intended to carry out forecast and analysis on the impact of the Transaction on dilution of immediate return, and to develop and issue measures to prevent and compensate dilution of immediate return. The relevant parties would also issue their undertakings and explanations accordingly.

Relevant resolution will be put forward at the EGM for Shareholders’ approval as a special resolution. The full text of the Remedial Measures Taken in Relation to the Dilution of Immediate Return and the Letter of Undertaking from Directors and Senior Management of CITIC Securities Company Limited on the Remedial Measures taken in relation to the Dilution of Immediate Return under the Asset Acquisition have been set out in Appendix V and VI of this circular.

XIII. RESOLUTION ON THE PROVISION OF GUARANTEE FOR GUANGZHOU SECURITIES BY THE COMPANY

Guangzhou Yuexiu Group Company Limited currently provides joint and several liability guarantee for the subordinated bonds issued by the Target Company with the total amount of no more than RMB4 billion and a term of no more than 7 years. The scope of guarantee is the principal of the guaranteed bonds and the interests payable, default penalty, damages, expenses incurred for realizing the creditor’s rights and other fees payable.

As Guangzhou Securities will become a direct/indirect wholly-owned subsidiary of the Company after the closing of transfer of the Target Assets, the Company intended to sign the relevant documents to take over the above-mentioned guarantee within 60 days from the Closing Date of the Transaction, subject to the consent of the guarantee right holder under such guarantee. In case the Company fails to take over due to circumstances such as the dissent given by the bondholders’ meeting or the guarantee right holder does not agree to the abovementioned taking over, the deadline for the taking over will be postponed accordingly, and the parties concerned will negotiate to resolve the problem.

Relevant resolution will be put forward at the EGM for Shareholders’ approval as an ordinary resolution.

XIV. RESOLUTION ON THE AUTHORIZATION TO THE BOARD TO DEAL WITH MATTERS RELATING TO THE TRANSACTION AT ITS DISCRETION

In order to legally and efficiently complete the relevant works in relation to the Transaction, it is proposed by the Board to the Shareholders’ general meeting to authorize the Board and any person it legally authorized to deal with all relevant matters in relation to the Transaction at its full discretion, including:

1. to develop and implement specific plans for the Transaction in accordance with the provisions of the laws, regulations and regulatory documents and the resolutions of the Shareholders’ general meeting, including but not limited to negotiate with financial advisers to determine or adjust the timing of issuance, number of shares to be issued, starting and ending dates of issuance, issue price, issuance targets and other details according to the specific circumstances;

2. to amend, supplement, sign, submit, file and implement all agreements, contracts and documents in relation to the Transaction, and to make all filings in relation to the Transaction;

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LETTER FROM THE BOARD

3. to make corresponding adjustments to the plans of the Transaction as requested by the relevant examination and approval authority, to approve and sign the corresponding amendments to the relevant audit reports and other application documents;

4. in case there is any new provision or requirement by the relevant regulatory authorities on the Asset Acquisition, to make adjustments to the specific plans of the Transaction according to these new provisions;

5. upon completion of the Transaction, to make amendments to the Articles of Association according to the implementation results, and to proceed with the application for government approval and the change of registration with the relevant industrial and commercial administrations, including signing relevant legal documents;

6. to proceed with the closing of the transfer of assets and adjustments after the closing; around or during the closing of transfer of assets, to determine or authorize the management to plan, deploy, transfer or make other internal adjustments to the organizational structure, governance structure, management level, etc. of the Target Assets based on the operation and management need, business development need or other actual needs, in accordance with the relevant provisions of laws and regulations as well as regulatory requirements;

7. to proceed with the registration, lock-up, listing and other relevant matters for the newly issued shares of the Company with the SSE and the CSDCC Shanghai Branch; and

8. to authorize the Board and any person it legally authorized to deal with any other matters in relation to the Transaction.

The authorization shall be valid for 12 months from the date of approval by the EGM.

Relevant resolution will be put forward at the EGM for Shareholders’ approval as a special resolution.

XV. RESOLUTION ON THE CHANGE OF INDEPENDENT NON-EXECUTIVE DIRECTOR

Reference is made to the announcement of the Company dated 4 March 2019 in relation to the proposed change of independent non-executive Director.

Mr. CHAN, Charles Sheung Wai has tendered his resignation to the Company from the positions as an independent non-executive Director of the Company, the chairman of the Audit Committee, and a member of each of the Remuneration and Appraisal Committee, the Nomination Committee, the Risk Management Committee and the Related Party Transactions Control Committee under the Board due to other work arrangements. The resignation of Mr. CHAN, Charles Sheung Wai from his positions as an independent non-executive Director of the Company and the chairman or a member of each of the aforesaid relevant specialized committees under the Board shall take effect when the appointment of the new independent non-executive Director to fill the vacancy arising from Mr. CHAN, Charles Sheung Wai’s resignation being approved by the EGM and the qualification of the new independent non-executive Director being approved by the local branch of the CSRC, prior to which, Mr. CHAN, Charles Sheung Wai will continue to perform his duties as the independent non-executive Director of the Company and the chairman or a member of each of the aforesaid relevant specialized committees under the Board.

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LETTER FROM THE BOARD

Mr. CHAN, Charles Sheung Wai has confirmed that there was no disagreement between him and the Board, and there was no any other matter in relation to his resignation that should be brought to the attention of the Shareholders.

Upon the consideration and approval by the Board, Mr. ZHOU Zhonghui has been nominated as the independent non-executive Director candidate of the Company to fill the vacancy arising from the resignation of Mr. CHAN, Charles Sheung Wai. The appointment of Mr. ZHOU Zhonghui is still subject to the approval by the EGM and the approval by the local branch of the CSRC on his qualification for serving as an independent director of a securities company. In addition, as considered and approved by the Board, from the date when the appointment of Mr. ZHOU Zhonghui as an independent non-executive director takes effect, he shall also serve as the chairman of the Audit Committee, and a member of each of the Remuneration and Appraisal Committee, the Nomination Committee, the Risk Management Committee and the Related Party Transactions Control Committee under the Board.

The biographical details of Mr. ZHOU Zhonghui are set out below:

ZHOU Zhonghui (周忠惠), male, born in August 1947 with Chinese nationality. Mr. ZHOU has been a senior member of the Chinese Institute of Certified Public Accountants (中國註冊會計師協會), a member of the Finance Director Specialized Committee of the China Association for Public Companies (中國上市公司協會) and a member of the Advisory Committee of the China Appraisal Society (中國評估師協會) since November 2010. Mr. ZHOU also serves as an independent director of each of Shanghai Fudan- Zhangjiang Bio-Pharmaceutical Co., Ltd. (a company listed on the Hong Kong Stock Exchange), China Pacific Insurance (Group) Co., Ltd. (a company listed on the SSE and the Hong Kong Stock Exchange), S.F. Holding Co., Ltd. (a company listed on the Shenzhen Stock Exchange) and COSCO SHIPPING Holdings Co., Ltd. (a company listed on the SSE and the Hong Kong Stock Exchange). Mr. ZHOU was one of the founders of PricewaterhouseCoopers Zhong Tian CPAs Limited Company, and used to serve as its general manager and chief accountant. He also served as a senior partner of PricewaterhouseCoopers, a lecturer, an associate professor and a professor of Accounting of Shanghai University of Finance and Economics and the chief financial officer of Xinlong Hong Kong Co., Ltd.. Mr. ZHOU served as the chief accountant of the CSRC from May 2007 to April 2011, a member of the International Advisory Council of the CSRC from September 2011 to September 2016 and a senior advisor of PricewaterhouseCoopers from June 2011 to May 2014. Mr. ZHOU obtained a master’s degree in Economics (majoring in accounting) in 1983 and a Ph.D. degree in Economics (majoring in accounting) in 1993 from Shanghai University of Finance and Economics. He was qualified as a Chinese CPA in 1995.

Mr. ZHOU Zhonghui has confirmed that, saved as disclosed above: (1) he does not hold any other position with the Company or any of its subsidiaries and has not been a director in any other listed companies during the past three years; (2) he has no relationship with any other Directors, senior management or substantial or controlling shareholders of the Company or any of its subsidiaries; and (3) as at the Latest Practicable Date, he does not have any interest in the Shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Mr. ZHOU Zhonghui has also confirmed that there was no other information in relation to his appointment that is discloseable pursuant to the requirements of Rules 13.51(2)(h) to (v) of the Hong Kong Listing Rules, and there was no other matter in relation to his appointment as an independent non-executive Director of the Company that should be brought to the attention of the Shareholders.

If Mr. ZHOU Zhonghui is appointed as an independent non-executive Director of the Sixth Session of the Board, his term of service will commence on the date when his appointment takes effect and end on the expiration date of the term of the Sixth Session of the Board. Mr. ZHOU Zhonghui will be entitled

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LETTER FROM THE BOARD to an allowance of RMB150,000 per year (tax inclusive), which is determined strictly in accordance with the Remuneration Management System of the Company, and will be provided with relevant allowance for attending on-site meetings of the specialized committees under the Board. As at the Latest Practicable Date, the Company has not entered into any service contract with Mr. ZHOU Zhonghui.

Relevant resolution will be put forward at the EGM for Shareholders’ approval as an ordinary resolution.

XVI. EXTRAORDINARY GENERAL MEETING

A proxy form and a reply slip for the Extraordinary General Meeting are also enclosed herewith. If you wish to attend the Extraordinary General Meeting by proxy, you are requested to complete the proxy form in accordance with the instructions printed thereon and return it as soon as possible. H Shareholders are required to return the proxy form to the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited; while A Shareholders are required to return the proxy form to the Board Office, but in any event the proxy form shall be returned in person or by mail not less than 24 hours before the time appointed for the Extraordinary General Meeting or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting at the Extraordinary General Meeting or any adjournment thereof in person if you so wish.

The address of the Board Office is at CITIC Securities Tower, No. 48 Liangmaqiao Road, Chaoyang District, Beijing, the PRC, Postal code: 100026 (Tel: (8610) 6083 6030, Fax: (8610) 6083 6031). The address of the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited, is at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong (Tel: (852) 2862 8555).

XVII. VOTES BY WAY OF POLL

Pursuant to the requirements of the Hong Kong Listing Rules, all votes of Shareholders at a general meeting must be taken by poll. As such, the resolutions set out in the notice of the Extraordinary General Meeting shall be voted by way of poll. Relevant poll results will be published on the HKExnews website of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk and on the website of the Company at www.cs.ecitic.com upon the conclusion of the Extraordinary General Meeting.

XVIII. RECOMMENDATION

The Directors consider that all the resolutions set out in the notice of the Extraordinary General Meeting are in the interest of the Company and its Shareholders as a whole and accordingly recommend you to vote in favor of the relevant resolutions mentioned above.

Yours faithfully, By order of the Board CITIC Securities Company Limited ZHANG Youjun Chairman

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NOTICE OF THE 2019 FIRST EXTRAORDINARY GENERAL MEETING

(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 6030)

NOTICE OF THE 2019 FIRST EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2019 first extraordinary general meeting (the “Extraordinary General Meeting”) of CITIC Securities Company Limited (the “Company”) will be held at Qing Room, 5th Floor, Beijing Ruicheng Four Seasons Hotel, No. 48 Liangmaqiao Road, Chaoyang District, Beijing, the PRC at 9:30 a.m. on Friday, 3 May 2019 for the purposes of considering and, if thought fit, approving the following resolutions. Unless the context otherwise specified, capitalized terms used in this notice shall have the same meaning as those defined in the circular of the Company dated 18 March 2019 (the “Circular”).

SPECIAL RESOLUTIONS

1. To consider and approve the resolution on the updated plan in relation to the Acquisition of Assets by Issuance of Shares and Related Party Transaction.

1.01 To consider and approve the overall plan of the Transaction.

1.02 To consider and approve the Target Assets and the counterparties of the Transaction.

1.03 To consider and approve the pricing basis of the Target Asset and the consideration of the Transaction.

1.04 To consider and approve the payment methods of the consideration.

1.05 To consider and approve the term of payment.

1.06 To consider and approve the contractual obligations regarding the transfer of the Target Assets and the liability for breach of the relevant obligations.

1.07 To consider and approve the profit and loss distribution.

1.08 To consider and approve the transfer of the Excluded Assets by Guangzhou Securities.

1.09 To consider and approve debt and personnel arrangements.

1.10 To consider and approve the preliminary integration arrangements upon completion of the Transaction.

1.11 To consider and approve the effective period of the resolution.

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NOTICE OF THE 2019 FIRST EXTRAORDINARY GENERAL MEETING

1.12 To consider and approve the way of Issuance.

1.13 To consider and approve the type and the nominal value of Shares to be issued.

1.14 To consider and approve the targets of Issuance and the way of subscription.

1.15 To consider and approve the Pricing Benchmark Date and the issue price.

1.16 To consider and approve the number of Shares to be issued.

1.17 To consider and approve the lock-up period.

1.18 To consider and approve the arrangement in relation to the accumulated undistributed profits of the Company prior to the Issuance.

1.19 To consider and approve the listing arrangement.

1.20 To consider and approve the effective period of the resolution.

2. To consider and approve the resolution on the Transaction constituting a Related Party Transaction.

3. To consider and approve the resolution on the Report on the Acquisition of Assets by Issuance of Shares and Related Party Transaction of CITIC Securities Company Limited (Draft) and its summary.

4. To consider and approve the resolution on entering into the Agreement on Acquisition of Assets by Issuance of Shares and its appendix among the Company, its wholly-owned subsidiary and specific parties subject to conditions precedent.

5. To consider and approve the resolution on the Acquisition of Assets by Issuance of Shares not constituting a backdoor listing as stipulated in Article 13 of the Administrative Measures for the Significant Asset Restructurings of Listed Companies.

6. To consider and approve the resolution on the Acquisition of Assets by Issuance of Shares and Related Party Transaction of the Company complying with relevant laws and regulations.

7. To consider and approve the resolution on the Transaction complying with Article 4 of the Provisions on Several Issues concerning Regulating the Significant Asset Restructurings of Listed Companies.

8. To consider and approve the resolution on the Audit Report, the Pro Forma Review Report and the Asset Valuation Report in relation to the Transaction.

9. To consider and approve the resolution on the independence of the appraisal institution, reasonableness of the appraisal assumptions, the relevance of appraisal method selected to appraisal objectives and status of assets under appraisal and the fairness of the appraisal price.

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NOTICE OF THE 2019 FIRST EXTRAORDINARY GENERAL MEETING

10. To consider and approve the resolution on the risk warning on dilution of immediate return and remedial measures taken in this respect under the Transaction.

12. To consider and approve the resolution on the proposed authorization to the Board to deal with relevant matters in relation to the Transaction at its discretion.

ORDINARY RESOLUTIONS

11. To consider and approve the resolution on the provision of guarantee for Guangzhou Securities by the Company.

13. To consider and approve the resolution on the change of independent non-executive Director of the Company.

By order of the Board CITIC Securities Company Limited ZHANG Youjun Chairman

Beijing, the PRC 18 March 2019

Notes:

1. Details of the above resolutions are set out in the Circular. Other proposals considered at the 37th meeting of the Sixth Session of the Board of the Company will be submitted to the Shareholders’ general meeting of the Company for consideration in due course.

2. Pursuant to the requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong, all votes of shareholders at a general meeting must be taken by poll. As such, the resolutions set out in the notice of the Extraordinary General Meeting shall be voted by way of poll. Relevant poll results will be published on the HKExnews website of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk and on the website of the Company at www.cs.ecitic.com after the Extraordinary General Meeting.

3. Any Shareholder entitled to attend and vote at the Extraordinary General Meeting convened by the above notice is entitled to appoint one or more proxies to attend and vote on his/her behalf at the meeting. A proxy needs not be a Shareholder of the Company.

4. To be valid, the instrument appointing a proxy together with the power of attorney or other authority, if any, under which it is signed or a notarial certified copy of that power of attorney or authority, must be completed and returned to the Board’s office (for A Shareholders) or the Company’s H Shares registrar, Computershare Hong Kong Investor Services Limited (for H Shareholders) not less than 24 hours before the time appointed for convening the Extraordinary General Meeting or any adjourned meeting thereof. The address of the Board’s office is at CITIC Securities Tower, No. 48 Liangmaqiao Road, Chaoyang District, Beijing, the PRC, Postal code: 100026 (Tel: (8610) 6083 6030, Fax: (8610) 6083 6031). The address of the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited, is at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong (Tel: (852) 2862 8555). Completion and return of the proxy form will not preclude Shareholders from attending and voting at the Extraordinary General Meeting or any adjournment thereof in person if he/she so wishes.

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NOTICE OF THE 2019 FIRST EXTRAORDINARY GENERAL MEETING

5. In order to determine H Shareholders’ entitlement to attend the Extraordinary General Meeting, the H Share register of members of the Company will be closed from Wednesday, 3 April 2019 to Friday, 3 May 2019 (both days inclusive), during which period no share transfer will be registered. In order for H Shareholders to be qualified for attending the Extraordinary General Meeting, all share certificates together with the share transfer documents must be lodged with the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited, at Rooms 1712– 1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong, at or before 4:30 p.m. on Tuesday, 2 April 2019 at the latest. H Shareholders who are registered with Computershare Hong Kong Investor Services Limited on or before the above date are entitled to attend the Extraordinary General Meeting.

6. In case of joint Shareholders, if more than one of them are presented at the meeting, either in person or by proxy, the vote of the senior holder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of other joint Shareholders. For this purpose, seniority shall be determined by the order in which the names of the joint Shareholders stand in the register of members of the Company in respect of the relevant Shares.

7. Shareholders who wish to attend the Extraordinary General Meeting, whether in person or by proxy, shall return the reply slip for the meeting to the Board’s office in person, by mail or fax on or before Friday, 12 April 2019. The address of the Board’s office is at CITIC Securities Tower, No. 48 Liangmaqiao Road, Chaoyang District, Beijing, the PRC, Postal code: 100026 (Tel: (8610) 6083 6030, Fax: (8610) 6083 6031).

8. The Extraordinary General Meeting is expected to last for half a day. Shareholders or their proxies attending the meeting shall be responsible for their own travelling and accommodation expenses. Shareholders or their proxies shall produce their identity documents when attending the Extraordinary General Meeting.

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APPENDIX I SUMMARY OF THE REPORT ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF CITIC SECURITIES COMPANY LIMITED (DRAFT)

I. Background and objectives of the Transaction

1. The background of the transaction

(1) Under the new normal stage of “three-stage interwoven period”, the macroeconomic development of the PRC has remained steady with a rising trend, the financial industry has shouldered great economic responsibility to serve the real economy.

Upon entering the 21st century, the overall macro-economy of China enjoyed a fast growth that its GDP continuously increased from RMB9,977.6 billion in 2000 to RMB82,712.2 billion in 2017 with a CAGR of 13.25%. Nevertheless, since the outbreak of the global financial crisis in 2008, in particular from 2014 till now, the PRC economy has entered into “the shifting period for growth rate”, “the period of structural adjustment” and “the assimilation period of previous policies”. The deepening of economic structural reform, the implementation of supply-side reform and the shifting in driving force for development have become the important initiatives for the transition of PRC macroeconomy towards high-quality development. For the first three quarters of 2018, despite the particularly complex and harsh external and domestic environment, China’s GDP still grew by 6.7% as compared to the corresponding period of last year, which was an outstanding achievement showing an overall steady and upward development trend of the macroeconomic environment of PRC.

The 2017 National Financial Work Conference stated that finance is the core of real economy and serving real economy is the inherent function and objective of finance and the fundamental measure for preventing financial risks. It is emphasized that top priority should be given to the development of direct financing, and a multi-level capital market should be formed with complete financing functions, solid fundamental system, effective market supervision and protection of investors’ legitimate rights and interests. Against this backdrop, securities firms, serving an important part in the provision of direct financing services and construction of multi- layered capital market, are bound to assume greater economic responsibility for serving the real economy and in turn will obtain greater space for development.

(2) The increase in individual income level and investment awareness has facilitated the demand for diversified securities products and professional customised services

From 2000 to 2017, China’s per capita urban household disposable income grew from RMB6,280 to RMB36,396, with a CAGR of 10.89%. The per capita net income of rural households in the PRC increased from RMB2,253 to RMB13,432, with a CAGR of 11.07%. The increase in individual income level and wealth accumulation has boosted the investment sentiment of the society, which brought a growing demand for the diversified asset allocation. Meanwhile, as the PRC capital market has developed for more than 20 years, individual investment awareness was gradually enhanced with more rational investment decisions. The percentage of the financial assets, such as stock, bonds and fund, in the individual assets has continuously increased. Therefore, the securities firms have faced higher requirements for their ability in providing diversified securities products and professional customised services.

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APPENDIX I SUMMARY OF THE REPORT ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF CITIC SECURITIES COMPANY LIMITED (DRAFT)

(3) The securities industry of China has developed into a new stage of enhancing industry concentration and emerging lead effect

For long, the securities industry of PRC has been experiencing intense homogeneous competition. Since 2018, due to the tightening regulation policy, the less active trading of the capital market and intensified exposure of certain credit risk, securities firm has faced greater pressure in their operations. In the first half of 2018, 131 securities firm in China has recorded a year-on-year drop of 11.9% in their operating revenue and a year-on-year decrease of 40.5% in their net profit. 25 securities firm recorded a loss. Meanwhile, the industry concentration of the PRC securities industry has shown a significant upwards trend. From 2012 to 2017, the proportion of operating revenue from the top 10 securities firms to the total revenue of the industry has increased from 51.8% to 63.8%. Capitalising on their comprehensive strengths in capital, expertise, human resources, risk control and management skills, the leading comprehensive securities firms have developed a significant lead effect. Considering the continuously accelerated opening up of the financial sector in the PRC, the extensive entry of foreign competitors into the PRC market will further intensify the competition in the PRC securities industry. The small to medium-sized PRC securities firms are expected to face greater operating pressure for a long period in the future, and it is the best time for them to integrate with large comprehensive securities firms.

2. The objective of the Transaction

(1) Implementing “supply-side reform” in the securities industry to improve the efficiency in serving real economy

Under the Transaction, the entire equity interest of Guangzhou Securities will be transferred to the Company, hence Guangzhou Securities will become a direct and indirect wholly-owned subsidiary of the Company. By taking advantage of the Company’s capital, professional, talent and risk management advantages, the Transaction will help Guangzhou Securities to rapidly grow bigger and stronger, remarkably enhance its comprehensive capacity in serving the real economy of Guangdong Province and surrounding areas, and continuously improve its service quality, so as to avoid inefficient utilization of resources causing by homogeneous competition.

(2) Seizing the historic opportunity brought by the national strategy of “One Belt One Road” and “Guangdong-Hong Kong-Macao Greater Bay Area”

The planning of “Guangdong-Hong Kong-Macao Greater Bay Area” is one of the important tools for implementing the major initiative of “One Belt One Road”. In 2015, the building of “Guangdong-Hong Kong-Macao Greater Bay Area” was officially written into Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road of the PRC. In 2017, “Guangdong-Hong Kong-Macao Greater Bay Area” was written into the work report of the government, upgrading to the level of national strategy. In-depth cooperation and exchanges in trade, technology and finance between Guangdong, Hong Kong and Macau is entering a comprehensive and in-depth cooperation stage. On 18 February 2019, the CPC Central Committee and the State Council formally released the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, proposed to consolidate and improve the central status of Hong Kong in international finance, navigation and trade, advance the

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APPENDIX I SUMMARY OF THE REPORT ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF CITIC SECURITIES COMPANY LIMITED (DRAFT)

construction of “Guangzhou-Shenzhen-Hong Kong-Macao” technology innovation corridor, vigorously develop direct financing channels, build the finance support platform of technology innovation based on regional equity transaction market.

Upon completion of the Transaction, Yuexiu Financial Holdings along with the person acting in concert with Yuexiu Financial Holdings, namely Financial Holdings Limited, will become major shareholders of the Company and will focus on serving the shifting in driving force of the economy of “Guangdong-Hong Kong-Macao Greater Bay Area” on the basis of strategic investment in high-quality financial equity, so as to build a business-driven, strategy- synergistic, regional-leading financial holding group. The strategic cooperation between the Company, a leading securities company in PRC, and Yuexiu Financial Holdings, which has significant regional market advantages in Greater Bay Area, will achieve strong synergy effect and will help the Company to further develop a market in Guangdong area by seizing the historic opportunity in building the “Guangdong-Hong Kong-Macao Greater Bay Area”.

(3) Further improving the business layout of the Company in the South China Region

i. Guangdong Province provides a good foundation for the development of securities business

Located in the centre of South China Region, Guangdong Province is one of the most developed provinces in the PRC with relatively vast-sized economy. Since 1989, the GDP of Guangdong Province has ranked first in the PRC for 29 consecutive years, reaching RMB8,987.923 billion in 2017.

In terms of the scale of newly increased social financing, in the first half of 2018, the scale of newly increased social financing of Guangdong Province was RMB1,126.9 billion, accounting for 12.4% of that of the whole country. For the same period, various economic and social indicators of Guangdong Province, such as total import and export volume and residential population, ranked first in the PRC.

In terms of securities brokerage business, the total volume of securities brokerage business in Guangdong Province is also outstanding in the PRC. Good environment for economic development, strong policy support and large scale of securities brokerage business have laid a good foundation for the development of integrated securities business and wealth management business in Guangdong Province. Therefore, Guangdong Province has always been a key area for the Company to seek for breakthroughs and further development.

ii. The business outlets of Guangzhou Securities in Guangdong Province have certain competitive advantages

The competition of securities brokerage business in Guangdong Province is very fierce. Many securities companies in and around the province have formed certain competitive advantages by virtue of a relatively comprehensive layout of outlets in the province and long-term accumulation of customer resources.

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APPENDIX I SUMMARY OF THE REPORT ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF CITIC SECURITIES COMPANY LIMITED (DRAFT)

Guangzhou Securities, one of the earliest securities companies established in the PRC, has long been rooted in Guangdong Province and has certain regional brand awareness. The background of its controlling shareholders, Yuexiu Financial Holdings and Financial Holdings Limited, is strong, both of which are under the supervision of Guangzhou State-owned Assets Supervision and Administration Commission. Currently, Guangzhou Securities has 32 business outlets in Guangdong Province (excluding Shenzhen) in total, the layout, customer channels and market resources of which are of high-quality.

As a leading securities company in the PRC, the Company still has a large room for improvement in the securities brokerage business in Guangdong Province. Currently, the Company has 18 business outlets in Guangdong Province (excluding Shenzhen) in total. The business outlets can be further expanded and penetrated into some economically developed counties and cities, and the density of outlets can be further increased.

iii. Competitiveness of the Company in Guangdong Province and South China Region will be significantly improved upon completion of the Transaction

The Company’s development vision is “to become a domestically leading and internationally first-class Chinese investment bank most trusted by clients around the world”. In order to realize this vision, the Company has been striving to improve its market competitiveness, influence and leadership in key regions such as Guangdong, Zhejiang, Jiangsu, Beijing and Shanghai. By leveraging on the leading strength of each business line in the industry, the Company expands customer coverage in key areas, deepens and refines customer service, with the aim to maintain the continuous increase of the Company’s profitability.

Upon completion of the Transaction, the total number of business outlets of the Company in Guangdong Province (excluding Shenzhen) will increase from 18 to 50, and it is expected to enter the first tier of securities brokerage business in Guangdong. Compared to establishing business outlets one by one, the business outlets of Guangzhou Securities can be acquired through the Transaction in one time, which can significantly reduce time and operating costs, rapidly increase the number of business outlets and customer channels of the Company in Guangdong Province, and will help to enhance the Company’s market share in Guangdong Province and strengthen its regional competitiveness.

Upon completion of the Transaction, the Company will optimize and integrate Guangzhou Securities by virtue of its advantages in management capability, market reputation and comprehensive business. With the synergistic effect arising from the integration of the customer network, regional brand reputation and market resources that Guangzhou Securities has formed, it is expected that the Company’s overall performance in Guangdong Province will be further improved.

In conclusion, after completing the business optimization layout in Guangdong Province, the Company can make full use of the core economic status of Guangdong Province in South China Region and give play to the regional radiation role of Guangdong Province in South China Region, so as to help the Company to expand business in South China Region and enhance its competitive advantages and profitability.

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APPENDIX I SUMMARY OF THE REPORT ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF CITIC SECURITIES COMPANY LIMITED (DRAFT)

II. Summary of the Transaction

The Valuation Reference Date of the Transaction is 30 November 2018. The Company intended to purchase an aggregate of 100% equity interest in Guangzhou Securities held by Yuexiu Financial Holdings and Financial Holdings Limited by issuance of shares. CITIC Securities Investment shall be designated as the holder of 0.10% equity interest in Guangzhou Securities.

Before the completion of the Transaction, Guangzhou Securities intended to transfer its 99.03% equity interest in Guangzhou Futures and 24.01% equity interest in Golden Eagle to Yuexiu Financial Holdings, the consideration of which is determined based on the valuation result on 99.03% equity interest in Guangzhou Futures and 24.01% equity interest in Golden Eagle which has been filed by Guangzhou Yuexiu Group Company Limited. The Transaction is subject to transfer of Excluded Assets by Guangzhou Securities. In the event that the transfer of Excluded Assets by Guangzhou Securities is not granted or approved by the regulatory authorities, the Transaction will not proceed.

The total shareholders’ equity of Guangzhou Securities (excluding 99.03% equity interest in Guangzhou Futures and 24.01% equity interest in Golden Eagle) as at the valuation benchmark date (i.e. 30 November 2018) amounted to RMB12,195.6831 million, representing an increase of RMB2,006.2879 million or by 19.69% from the carrying amount of the net assets of RMB10,189.3952 million reflected in the audited financial statement of the parent company of Guangzhou Securities. The valuation of 99.03% equity interest in Guangzhou Futures and 24.01% equity interest in Golden Eagle amounted to RMB1,016.4180 million and RMB247.7703 million respectively, therefore the aggregate valuation amount of the Excluded Assets shall be RMB1,264.1883 million. With arm’s length negotiation among the parties, the consideration of the Target Assets under the Transaction shall be RMB13.460 billion, including the consideration which should be paid to Guangzhou Securities for the proposed transfer of 99.03% equity interest in Guangzhou Futures and 24.01% equity interest in Golden Eagle.

Under the Transaction, the Pricing Benchmark Date of the Acquisition of Assets by Issuance of Shares of the Company shall be the date of the announcement on the resolutions passed at the first Board meeting convened by the Company (being the date of the announcement on the relevant resolutions passed at the 34th meeting of the sixth session of the Board). The issue price of the Issuance is the average trading price of the shares for the last 60 trading days prior to the Pricing Benchmark Date, being RMB16.97 per share. Details of the Issuance are as following:

Amount of the Acquisition Shareholding of Assets Number of held by by Issuance Shares counterparties in of Shares to be issued Counterparties the Target Assets (RMB0’000) (Shares)

Yuexiu Financial Holdings 32.765% 441,016.90 259,880,188 Financial Holdings Limited 67.235% 904,983.10 533,284,219

Total 100.000% 1,346,000.00 793,164,407

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APPENDIX I SUMMARY OF THE REPORT ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF CITIC SECURITIES COMPANY LIMITED (DRAFT)

Upon completion of the Transaction, the total shareholdings of Yuexiu Financial Holdings and its wholly-owned subsidiary, Financial Holdings Limited, in the Company will be more than 5%. Pursuant to the Administrative Measures on the Takeover of Listed Companies, the Administrative Measures for the Disclosure of Information of Listed Companies and the Rules Governing the Listing of Stocks on Shanghai Stock Exchange and other relevant provisions, Yuexiu Financial Holdings and the party acting in concert with it, Financial Holdings Limited, are related parties of the Company, therefore the Transaction constitutes a Related Party Transaction.

Upon completion of the Transaction, Guangzhou Securities will become a direct and indirect wholly- owned subsidiary of the Company. CITIC Corporation Limited remained to be the largest shareholder of the Company. The Company has a dispersed shareholding structure and will remain to have no controlling shareholder or de facto controller. The Transaction would not result in any change of control and de facto controller of the Company.

III. Impact of the Transaction on the Company

The specific impact of the Transaction on the Company are as follows:

1. Impact of the Transaction on the Principal Businesses of the Company

(1) Impact of the Transaction on the Principal Businesses of the Company

Upon completion of the Transaction, there will be no alteration to the principal businesses of the Company, which remains as securities brokerage, securities underwriting and sponsorship, securities asset management and securities proprietary businesses. The Target Company has obtained certain regional brand awareness based on its long existence in Guangdong area. Upon completion of the Transaction, the number of customers of the Company located in Guangdong Province and surrounding areas will be significantly increased. By leveraging on the existing outlets and customer resources of the Target Company, the Company can achieve leapfrog development in Guangdong Province or even the whole South China Region, thereby enhancing the profitability and competitiveness of the Company.

(2) Impact of the Transaction on the Securities Business Model of the Company

With the approval of CSRC, the Company has successively acquired CITIC Wantong Securities Co., Ltd. (which has later proceeded with the change of name and adjustment to the business scope, now known as CITIC Securities (Shandong) Co., Ltd.) and Kington Securities Co., Ltd. (which has later proceeded with the change of name, separation and adjustment to the business scope, now known as Kington Securities Limited Liability Company) in 2004 and 2006, respectively.

According to the Trial Regulations for the Establishment of Subsidiaries of Securities Companies (took effect from 1 January 2008 and revised in October 2012), securities company and its subsidiaries or subsidiaries under the control of the same securities company are not allowed to operate the same kind of business that has potential conflict of interest or may result in competitive relationship.

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APPENDIX I SUMMARY OF THE REPORT ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF CITIC SECURITIES COMPANY LIMITED (DRAFT)

To avoid competition with CITIC Securities (Shandong) Co., Ltd. and Kington Securities Limited Liability Company, the Company has delineated the operations of the parent company and the subsidiaries and, with the approval from the CSRC, made corresponding adjustments to the operation scope. The two subsidiaries will be positioned as subsidiaries carrying out specific businesses within specific regions, while the Company will carry out other businesses within other regions.

Upon completion of the Transaction, the Company intends to adjust the business positioning of Guangzhou Securities and the business scope of each of the Company and Guangzhou Securities as soon as possible and within the transition period allowed by the CSRC in accordance with the Trial Regulations for the Establishment of Subsidiaries of Securities Companies and other regulations with reference to the abovementioned model, and to avoid potential conflicts of interest or horizontal competition. According to the preliminary business integration plan, Guangzhou Securities will be positioned as a subsidiary carrying out specific businesses in specific areas in the future, and will conduct business in Guangdong Province (excluding Shenzhen), Guangxi Zhuang Autonomous Region, Hainan Province, Yunnan Province and Guizhou Province. At the same time, the Company will also make corresponding adjustments to its business scope and implement effective measures to avoid horizontal competition based on the regulatory requirements. The specific arrangements for the above changes in business scope shall be subject to the final approval of the CSRC.

2. Impact of the Transaction on the financial position and profitability of the Company

The major financial data and financial indicators of the consolidated statements of the Company before and after the Transaction are as follows:

In RMB ten thousand 30 November 2018 Before the After the Transaction Transaction Items (actual figure) (proforma figure) Change

Total assets 66,661,859.37 71,742,249.39 7.62% Total liabilities 50,873,251.55 54,665,460.19 7.45% Aggregate interest of shareholders 15,788,607.82 17,076,789.20 8.16% Net assets attributable to shareholders of the parent company 15,424,103.22 16,709,361.13 8.33% Net assets per share (RMB/share) 12.73 12.94 1.65% Gearing ratio 76.32% 76.20% -0.12%

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APPENDIX I SUMMARY OF THE REPORT ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF CITIC SECURITIES COMPANY LIMITED (DRAFT)

January to November 2018 Before the After the Transaction Transaction Items (actual figure) (proforma figure) Change

Operating revenue 3,316,789.60 3,421,545.10 3.16% Operating profit 1,106,616.69 1,034,405.33 -6.53% Total profit 1,150,369.88 1,076,632.15 -6.41% Net profit 920,230.70 866,654.91 -5.82% Net profit attributable to shareholders of the parent company 876,642.36 822,922.57 -6.13% Basic earnings per share (RMB/share) 0.72 0.64 -11.11%

31 December 2017 Before the After the Transaction Transaction Items (actual figure) (proforma figure) Change

Total assets 62,557,464.39 66,839,300.79 6.84% Total liabilities 47,243,208.51 50,173,533.28 6.20% Aggregate interest of shareholders 15,314,255.88 16,665,767.50 8.83% Net assets attributable to shareholders of the parent company 14,979,904.61 16,328,636.77 9.00% Net assets per share (RMB/share) 12.36 12.65 2.35% Gearing ratio 75.52% 75.07% -0.45%

2017 Before the After the Transaction Transaction Items (actual figure) (proforma figure) Change

Operating revenue 4,329,163.41 4,474,335.27 3.35% Operating profit 1,624,833.07 1,645,710.95 1.28% Total profit 1,617,378.06 1,639,942.52 1.40% Net profit 1,197,746.97 1,214,855.89 1.43% Net profit attributable to shareholders of the parent company 1,143,326.45 1,160,314.64 1.49% Basic earnings per share (RMB/share) 0.94 0.90 -4.26%

Note: Basic earnings rate per share from January to November 2018 in above tables is not annualised.

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APPENDIX I SUMMARY OF THE REPORT ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF CITIC SECURITIES COMPANY LIMITED (DRAFT)

Upon completion of the Acquisition of Assets by Issuance of Shares, Guangzhou Securities will become a direct and indirect wholly-owned subsidiary of the Company and the Company will hold 100% equity interest of Guangzhou Securities. As shown in the above table, upon completion of the Transaction, total assets of the Company, net assets attributable to shareholders of the parent company and net assets per share will all increase whilst the gearing ratio will decrease. Meanwhile, the operating revenue of the Company will also increase, however, due to the operating loss of Guangzhou Securities during the period from January to November 2018, the operating profit, total profit, net profit attributable to shareholders of the parent company and basic earnings per share will all decrease upon completion of the Transaction. The Company obtained control of Guangzhou Securities through the Transaction, which helps to improve the Company’s competitiveness in Guangdong and South China Region, increase the market share of its securities brokerage business, so as to increase the long-term profitability of the Company.

3. Impact of the Transaction on the share capital structure of the Company

Before the Transaction, total share capital of the Company was 12,116,908,400 shares and it is expected that 793,164,407 new A Shares will be issued under the Transaction, of which 259,880,188 shares will be issued to Yuexiu Financial Holdings and 533,284,219 shares will be issued to Financial Holdings Limited, representing 6.14% of the total share capital of the Company upon completion of the Transaction. The share capital structure of the Company before and after the Transaction is as follows:

Before the Transaction After the Transaction Number of Shareholding Number of Shareholding Shares held ratio Shares held ratio Shareholders (shares) (%) (shares) (%)

HKSCC Nominees Limited 2,277,361,267 18.79 2,277,361,267 17.64 CITIC Corporation Limited 1,999,695,746 16.50 1,999,695,746 15.49 China Securities Finance Corporation Limited 362,296,197 2.99 362,296,197 2.81 Hong Kong Securities Clearing Company Limited 254,836,807 2.10 254,836,807 1.97 Central Huijin Asset Management Corporation Limited 198,709,100 1.64 198,709,100 1.54 Da Cheng Fund — Agricultural Bank — Da Cheng China Securities and Financial Assets Management Program 153,726,217 1.27 153,726,217 1.19

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APPENDIX I SUMMARY OF THE REPORT ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF CITIC SECURITIES COMPANY LIMITED (DRAFT)

Before the Transaction After the Transaction Number of Shareholding Number of Shareholding Shares held ratio Shares held ratio Shareholders (shares) (%) (shares) (%)

China AMC Fund — Agricultural Bank — China AMC China Securities and Financial Assets Management Program 144,472,197 1.19 144,472,197 1.12 Zhong Ou Fund — Agricultural Bank — Zhong Ou China Securities and Financial Assets Management Program 140,178,900 1.16 140,178,900 1.09 GF Fund — Agricultural Bank — GF China Securities and Financial Assets Management Program 140,049,999 1.16 140,049,999 1.08 China Southern Fund — Agricultural Bank — China Southern China Securities and Financial Assets Management Program 139,589,061 1.15 139,589,061 1.08 Yuexiu Financial Holdings — — 259,880,188 2.01 Financial Holdings Limited — — 533,284,219 4.13 Other Shareholders 6,305,992,909 52.04 6,305,992,909 48.85

Total share capital 12,116,908,400 100.00 12,910,072,807 100.00

Note: the share capital structure before the Transaction is based on data as of 28 February 2019.

The final share capital structure upon completion of the Transaction will be determined based on the actual number of shares issued. The largest shareholder of the Company both before and after the Transaction is CITIC Corporation Limited. The shareholding structure will remain to be dispersed and the Company will remain to have no controlling shareholder or de facto controller. The Transaction will not lead to a change in control of the Company and does not constitute a backdoor listing according to the relevant requirements under the Administrative Measures for the Significant Asset Restructurings.

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APPENDIX I SUMMARY OF THE REPORT ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF CITIC SECURITIES COMPANY LIMITED (DRAFT)

IV. Approvals obtained and to be obtained under the Transaction

1. Authorization and approval obtained under the Transaction

(1) Consideration and approval of the Transaction at the 34th meeting and 37th meeting of the Sixth Session of the Board of the Company;

(2) Consideration and approval of the Transaction at the 23rd meeting and 26th meeting of the eighth session of the Board of Yuexiu Financial Holdings;

(3) Approval of the asset valuation report on the Target Assets by Guangzhou SASAC;

(4) Approval of the Transaction by Guangzhou SASAC;

(5) Filing of valuation results for the Excluded Assets with Guangzhou Yuexiu Group Company Limited;

(6) Approval of transfer of the Excluded Assets by Guangzhou Yuexiu Group Company Limited.

2. Approvals to be obtained under the Transaction

The approval procedures to be completed for the Transaction include but are not limited to:

(1) Consideration and approval of the Transaction by the shareholders’ general meetings of the Company and Yuexiu Financial Holdings and the shareholders of Financial Holdings Limited;

(2) Approval of shareholder qualifications of securities, futures and fund companies and changes in shareholders by relevant departments of the CSRC;

(3) Approval of the Transaction by relevant departments of the CSRC.

3. Description on creditor-related issues in the Transaction

As at the Latest Practicable Date, Yuexiu Financial Holdings and Financial Holdings Limited have issued notices to financial institutions involving or possibly involving the sale of their assets subject to written consent of financial institutions with creditor’s right/security right, and have obtained the letters of consent issued by the above financial institutions concerning the asset sale. In addition, Yuexiu Financial Holdings has issued a notice to the trustee of medium-term notes in accordance with its medium-term note prospectus, and has obtained a reply issued by the trustee specifying that there is no need to convene a holder meeting.

Guangzhou Securities has issued a notice to the relevant bond trustee in accordance with its bond prospectus, and has obtained a reply from the relevant bond trustee specifying that there is no need to convene a bond holder meeting for the moment.

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APPENDIX I SUMMARY OF THE REPORT ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF CITIC SECURITIES COMPANY LIMITED (DRAFT)

V. Information on Guangzhou Securities

As a comprehensive securities company, business scope of Guangzhou Securities covers all traditional business types of a securities company, including securities brokerage, investment banking, securities proprietary, assets management, research and consultation, etc. Guangzhou Securities Innovation Investment Management Company Limited, a wholly-owned subsidiary of Guangzhou Securities, is mainly engaged in management of private equity funds and equity investment. GZS Lingxiu Investment Co., Ltd. (廣證領秀投資有限公司), a wholly-owned subsidiary of Guangzhou Securities, is mainly engaged in industrial project investment, equity investment, investment management, investment consultation, financial advising consultation and financial information consultation. Guangzhou Guangzheng Hang Seng Securities Research Co., Ltd. (廣州廣證恒生證券研究所有限公司), a subsidiary of Guangzhou Securities, is mainly engaged in securities investment consultation.

According to the Pro Forma Financial Statements and Audit Report of Guangzhou Securities Company Limited (Excluding Equity Interest in Guangzhou Futures and Golden Eagle) for the Years of 2016 and 2017 and the 11 Months Ended 30 November 2018 (PwC Zhong Tian Te Shen Zi (2019) No. 0974) issued by PricewaterhouseCoopers Zhong Tian LLP (Special General Partnership), key financial data of Guangzhou Securities for the years of 2016 and 2017 and the 11 months ended 30 November 2018 are as follows:

1. Key financial data of the balance sheet

In RMB ten thousand Items 30 November 2018 31 December 2017 31 December 2016

Total assets 4,781,084.33 3,982,530.71 4,019,815.04 Total liabilities 3,792,208.64 2,930,324.78 2,970,368.40 Aggregate interest of shareholders 988,875.69 1,052,205.93 1,049,446.64 Of which: aggregate interest attributable to shareholders of the parent company 985,952.22 1,049,426.46 1,046,694.31

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APPENDIX I SUMMARY OF THE REPORT ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF CITIC SECURITIES COMPANY LIMITED (DRAFT)

2. Key financial data of the income statement

In RMB ten thousand January to Items November 2018 2017 2016

Operating profit 104,755.50 145,171.86 279,744.17 Operating revenue -72,211.36 20,877.88 121,210.90 Total profit -73,737.73 22,564.46 121,765.27 Net profit -53,575.79 17,108.93 91,760.68 Net profit attributable to shareholders of the parent company -53,719.79 16,988.19 91,639.32 Net profit attributable to shareholders of the parent company, net of non-recurring gains and losses -52,617.22 14,267.63 90,766.43

VI. Information on the Counterparties

1. Yuexiu Financial Holdings

Yuexiu Financial Holdings is mainly engaged in financial business and department store business, which are mainly operated through two wholly-owned subsidiaries, namely Financial Holdings Limited and Guangzhou Friendship Group Co., Ltd..

(1) Financial business

Securities business: mainly includes brokerage business, credit business, assets management, securities proprietary, investment banking and other securities business.

Financial leasing: mainly includes financial leasing services such as leaseback and direct leasing.

Private equity investment: mainly includes private equity investment, industrial consolidation, industrial development fund etc.

Financing guarantee: mainly includes direct financing guarantee, indirect financing guarantee, non-financing guarantee and capital business.

Financial technology: mainly includes the construction of business systems and risks systems of Yuexiu Financial Holdings and its subsidiaries engaging in financial business.

In addition, Yuexiu Financial Holdings, the largest shareholder of Guangzhou Asset Management Company Limited, also holds interest in micro-credit companies through Financial Holdings Limited, of which, non-performing assets management business mainly includes batch purchase and disposal of non-performing assets of financial enterprises within the Guangdong Province; and the microcredit business mainly includes loan business centred on personal spending credit and supply chain finance.

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APPENDIX I SUMMARY OF THE REPORT ON THE ACQUISITION OF ASSETS BY ISSUANCE OF SHARES AND RELATED PARTY TRANSACTION OF CITIC SECURITIES COMPANY LIMITED (DRAFT)

(2) Department store business

Yuexiu Financial Holdings is positioned as high-end department store, engaging in retail chain operations. It adopts a business model of a combination of various channels to provide customers with personalized, experiential and intelligent solutions for high-quality lifestyle.

2. Financial Holdings Limited

Financial Holdings Limited is the principal financial shareholding platform of Yuexiu Financial Holdings, is mainly engaged in financial business, including securities, financial leasing, private equity investment, financing guarantee, finance technology, etc.

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APPENDIX II SUMMARY OF THE PRO FORMA FINANCIAL STATEMENTS AND AUDIT REPORT OF GUANGZHOU SECURITIES

Pro Forma Financial Statements and Audit Report of Guangzhou Securities Company Limited (Excluding Equity Interests in Guangzhou Futures Co., Ltd. and Golden Eagle Fund Management Co., Ltd.) for the Years of 2016, 2017 and Eleven Months Ended 30 November 2018

Summary

I. Preparation Assumptions

In order to reflect the financial position and operating results of Guangzhou Securities Company Limited after the sale of the equity interest of Guangzhou Futures and Golden Eagle during the Reporting Period, the Management of Guangzhou Securities assumed that the sale of shares of Guangzhou Futures and Golden Eagle by Guangzhou Securities was completed on 1 January 2016. Namely, since 1 January 2016, Guangzhou Securities no longer holds the equity interest of Guangzhou Futures and Golden Eagle, and the pro forma consolidated financial statements no longer combine the financial statements of Guangzhou Futures or long-term equity investments in the Golden Eagle based on the equity approach. The pro forma separate financial statements also no longer confirm and measure the long-term equity investments in Guangzhou Futures and Golden Eagle, and the capital reserve is offset against the book value of the original relevant long-term equity investments. The dividends received by Guangzhou Securities from Golden Eagle are treated the same as capital injections from Shareholders of the Company and included in the capital reserve account of the pro forma financial statements.

II. Financial Information of Guangzhou Securities in the Last Two Years and One Period

The audited simulated financial statements of Guangzhou Securities in the most recent two years and one period are as follows:

(I) Consolidated Balance Sheet

In RMB ten thousand Items 30 November 2018 31 December 2017 31 December 2016

Assets: Funds 692,801.92 721,582.72 993,326.06 Including: Client deposits 595,585.81 475,771.82 609,996.66 Clearing settlement funds 127,103.18 126,368.22 160,819.57 Including: Client reserve 93,423.67 97,121.53 98,357.86 Margin accounts 336,519.03 378,401.58 328,329.23 Derivative financial assets 25,159.12 7,431.57 7,592.89 Refundable deposits 32,884.33 19,548.97 25,375.61 Receivables 25,904.11 19,175.00 32,394.97 Interest receivable N/A 56,652.81 46,974.49 Financial assets under repurchase agreements 423,775.77 883,795.53 999,396.04

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APPENDIX II SUMMARY OF THE PRO FORMA FINANCIAL STATEMENTS AND AUDIT REPORT OF GUANGZHOU SECURITIES

Items 30 November 2018 31 December 2017 31 December 2016

Financial Investment: Financial assets measured at fair value through profit or loss N/A 722,469.68 371,923.82 Held for trading financial assets 2,970,151.13 N/A N/A Available-for-sale financial assets N/A 985,945.57 998,789.97 Debt securities 64,378.81 N/A N/A Other equity investments 3,020.00 N/A N/A Fixed assets 4,826.64 6,018.93 7,565.30 Intangible assets 4,592.78 5,371.56 5,052.94 Goodwill 2,454.38 4,622.59 4,622.59 Deferred income tax assets 37,234.94 17,674.94 13,488.99 Other assets 30,278.18 27,471.03 24,162.57

Total assets 4,781,084.33 3,982,530.71 4,019,815.04

Liabilities: Short-term financing instruments payable 75,011.87 175,860.00 6,753.00 Due to banks and other financial institutions 185,781.41 80,000.00 50,000.00 Financial liabilities measured at fair value through profit or loss N/A 117,068.82 217,253.93 Held for trading financial liabilities 348,922.90 N/A N/A Derivative financial liabilities 18,674.94 1,511.17 — Financial assets sold under repurchase agreements 1,016,838.77 820,418.79 751,449.39 Customer brokerage deposits 672,668.79 547,283.89 670,874.12 Funds payable to securities issuers — 89,730.00 — Salaries, bonuses and allowances payable 32,037.54 38,460.85 64,835.51 Taxes payable 4,761.39 3,937.60 16,002.25 Payables 6,534.72 16,780.48 31,090.82 Interest payable — 40,706.55 36,968.16 Accrued liabilities 2,633.13 669.78 51.00 Bonds payable 1,126,133.05 700,980.84 807,096.71 Deferred income tax liabilities 1,905.70 2,437.58 6,697.81 Other liabilities 300,304.44 294,478.43 311,295.71

Total liabilities 3,792,208.64 2,930,324.78 2,970,368.40

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APPENDIX II SUMMARY OF THE PRO FORMA FINANCIAL STATEMENTS AND AUDIT REPORT OF GUANGZHOU SECURITIES

Items 30 November 2018 31 December 2017 31 December 2016

Owners’ equity: Share capital 536,045.69 536,045.69 536,045.69 Capital reserve 303,196.47 301,324.71 301,324.71 Other comprehensive income — 165.40 14,421.43 Surplus reserve 24,964.30 24,964.30 23,348.28 General risk provisions 78,405.91 78,405.91 75,173.87 Retained earnings 43,339.85 108,520.45 96,380.33 Total equity attributable to owners of the parent Company 985,952.22 1,049,426.46 1,046,694.31 Minority shareholders’ equity 2,923.47 2,779.47 2,752.33 Total shareholders’ equity 988,875.69 1,052,205.93 1,049,446.64

Total liabilities and shareholders’ equity 4,781,084.33 3,982,530.71 4,019,815.04

(II) Consolidated Statement of Profit or Loss

In RMB ten thousand January– Items November 2018 2017 2016

I. Operating income 104,755.50 145,171.86 279,744.17 Net fee and commission income 48,215.14 76,587.04 199,223.57 Including: Net income from brokerage business fee 22,915.62 32,628.64 41,348.48 Net income from investment banking services fee 18,752.86 27,931.24 78,795.74 Net income from asset management business fee 5,563.41 11,538.72 70,862.53 Net interest income (expenditure denoted by “-”) -43,652.02 4,769.85 10,644.54 Including: Interest income 83,091.98 98,640.19 85,226.10 Interest expense -126,744.00 -93,870.34 -74,581.55 Investment income (loss denoted by “-”) 84,976.19 61,465.66 73,137.41 Other income 56.27 394.01 640.99 Changes in fair value gains and losses (losses listed by “-”) 14,842.91 738.97 -4,219.17 Exchange gains and losses (losses listed by “-”) 316.66 -334.22 344.52 Other operating income 0.34 0.65 0.50 Gains from disposal of assets (loss denoted by “-”) — 1,549.89 -28.20

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APPENDIX II SUMMARY OF THE PRO FORMA FINANCIAL STATEMENTS AND AUDIT REPORT OF GUANGZHOU SECURITIES

January– Items November 2018 2017 2016

II. Operating expenses 176,966.86 124,293.98 158,533.27 Taxes and surcharges 1,244.71 1,196.51 8,371.06 Business and management fees 119,859.13 119,238.82 147,953.78 Credit impairment losses 53,694.81 N/A N/A Asset impairment losses 2,168.21 3,858.65 2,208.43

III. Operating profit -72,211.36 20,877.88 121,210.90 Add: Non-operating income 1,304.13 2,845.70 852.83 Less: Non-operating expenses 2,830.50 1,159.12 298.46

IV. Profit before income tax -73,737.73 22,564.46 121,765.27 Less: Income tax expense -20,161.94 5,455.53 30,004.59

V. Net profit -53,575.79 17,108.93 91,760.68

(I) By continuity of operations: 1. Net profit from continuing operations (net loss listed by “-”) -53,575.79 17,108.93 91,760.68 2. Net profit from discontinuing operations (net loss listed by “-”) — — —

(II) By ownership: 1. Net profit attributable to owners of the parent Company -53,719.79 16,988.19 91,639.32 2. Minority shareholder gains 144.00 120.74 121.36

(III) Consolidated Cash Flow Statement and Statement of Changes in Equity

In this transaction, the information reflected in cash flow statement and statement of changes in equity does not have a significant impact on the special purpose and use of the simulated financial statements. Therefore, the simulated financial statements do not include the simulated cash flow statement and its corresponding notes and the simulated statement of changes in equity.

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APPENDIX III SUMMARY OF THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF THE COMPANY

CITIC Securities Company Limited Pro Forma Consolidated Financial Statements and Review Report For the Year of 2017 and the Eleven Months Ended 30 November 2018

Summary

I. PREPARATION ASSUMPTIONS

Assuming that the company structure upon completion of the Transaction had already existed on 1 January 2017, and relevant business had been operated continuously during period from 1 January 2017 to 30 November 2018, according to the financial statements for the period in relation to proposed Asset Acquisition by the CITIC Securities Company Limited (hereinafter referred to as the “Company”), the management of CITIC Securities prepared the pro forma financial statements for the most recent year and period after the simulated implementation of the Transaction in accordance with the requirements of the Accounting Standards for Enterprises. PwC reviewed the pro forma financial statements and issued the Pro Forma Review Report (PwC Zhong Tian Yue Zi (2019) No. 0007).

According to the requirements of Notice 26 issued by the CSRC, the Company prepared the pro forma consolidated financial statements for the special purpose of declaring the Transaction to the CSRC and the SSE.

Assuming that had the transfer of 99.03% shares of Guangzhou Futures and 24.01% equity interest of Golden Eagle as well as the acquisition of 100% of the equity interest of Guangzhou Securities by issuance of Shares of the Company been completed on 1 January 2017, the pro forma consolidated financial statements was prepared based on the shareholding structure upon the completion of the Transaction (including CITIC securities and its subsidiaries, and Guangzhou Securities after the completion of transfer of Excluded Assets) and according to the following assumptions under the premise of going-concern.

The assumptions of preparation of the pro forma consolidated financial statements are as follows:

1. Assume that the transfer of Excluded Assets of Guangzhou Securities had been completed on 1 January 2017.

2. Assume that the Company had issued 793,164,407 new ordinary shares in total (par value of RMB1 per share) at the price of RMB16.97 per share for this acquisition on 1 January 2017, which amounted to RMB13,459,999,986.79 in aggregation, and the amount in excess of nominal value (RMB12,666,835,579.79) is recognized as capital reserve. The transaction fees and taxes in this acquisition were not considered in the preparation for the pro forma consolidated financial statements.

3. Assume that Guangzhou securities had already completed the sales of 99.03% shares of Guangzhou Futures and 24.01% equity interest of Golden Eagle to Yuexiu Financial Holdings or its related parties on 1 January 2017 with consideration of RMB1,264,188,348.12 which was recognized as identifiable assets on the hypothetical acquisition day (i.e. 1 January 2017), considering that CITIC Securities intended to issue the 793,164,407 shares as the acquisition consideration, which included the consideration acquired from the transfer of 99.03% shares of Guangzhou Futures and 24.01% equity interest of Golden Eagle from Guangzhou Securities, and the sales consideration was listed as other assets in this pro forma consolidated financial statements from 1 January 2017 without any bad debts provision for the year of 2017 and the eleven months ended 30 November 2018. — III-1 — 709429 \ (CITICS) \ 16/03/2019 \ M71

APPENDIX III SUMMARY OF THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF THE COMPANY

4. Assume that the difference between total value of the issued shares and the fair value of the identifiable net assets of Guangzhou Securities attributable to the proposed shares to be acquired by the Company on 1 January 2017, including the consideration for the transfer of 99.03% shares of Guangzhou Futures and 24.01% equity interest of Golden Eagle, was all deemed to be goodwill, because the Company considered that the amortization of identifiable intangible assets arising from the licenses, brands, customer relationships and contractual interests of Guangzhou Securities had no materially impact on the financial statements in the preparation of the pro forma consolidated financial statements.

5. In the Agreement on Asset Acquisition by Issuance of Shares signed by the Company and Yuexiu Financial Holdings and its related parties, Yuexiu Financial Holdings and its related parties promised to compensate Guangzhou Securities for the difference of its net assets below the Reference Value (the sum of the audited book value of the net assets of Guangzhou Securities as of 30 November 2018 as set out in the audit report (XYZH/2019GZA10012) issued by ShineWing Certified Public Accountants LLP and the increased scale of the net assets of Guangzhou Securities by the transaction price of the Excluded Assets to be transferred by Guangzhou Securities) after deducting RMB100 million on the Impairment Test Benchmark Date (the second last date at the end of the month of the Closing Date) in cash, by bearing profit or loss during the transitional period, by provision of guarantee or any other forms as agreed by the Company. As at 1 January 2017, the net assets of Guangzhou Securities were higher than the Reference Value. Therefore, the pro forma consolidated financial statement no longer considers the compensation of Yuexiu Financial Holdings for CITIC Securities in the event that the difference between the net assets of Guangzhou Securities and the Reference Value exceeds RMB100 million when the 100% equity of Guangzhou Securities is actually transferred.

6. Compensation undertakings to the Company in relation to excluded and impaired assets of Guangzhou Securities by Yuexiu Financial Holdings and its related parties in the Agreement on Asset Acquisition by Issuance of Shares were not considered in the pro forma consolidated financial statements

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APPENDIX III SUMMARY OF THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF THE COMPANY

II. PRO FORMA FINANCIAL STATEMENTS

1. Pro forma financial position of the listed company for most recent year and period

The data of the pro forma consolidated balance sheet of the listed company for most recent year and period after the simulated implementation of the Transaction is set out as below:

In RMB ten thousand 30 November 31 December Items 2018 2017

ASSETS: Cash and bank balances 12,963,649.02 10,603,211.09 Including: cash held on behalf of customers 8,394,742.64 7,423,519.34 Settlement Reserve Fund 2,735,260.00 2,913,687.69 Including: deposits held on behalf of customers 2,027,592.29 2,388,007.76 Margin accounts 6,184,264.17 7,776,662.64 Financial assets measured at fair value through profit or loss N/A 18,537,820.02 Derivative financial assets 1,170,800.69 597,511.04 Reverse repurchase agreements 6,246,169.12 12,342,998.50 Accounts receivables 4,524,042.74 2,185,338.45 Refundable deposits 138,752.18 116,789.98 Available-for-sale financial assets N/A 6,908,638.77 Financial investments: Financial assets held for trading 27,940,119.94 N/A Debt instruments investments 64,378.81 N/A Other debt instruments investments 3,462,558.17 N/A Other equity instruments investments 1,744,536.77 N/A Long-term equity investments 912,495.30 858,554.84 Investment properties 84,656.70 87,155.36 Fixed asset 780,935.66 796,315.70 Construction in progress 38,750.37 36,159.12 Intangible assets 327,796.88 350,104.71 Goodwill 1,231,392.38 1,205,603.15 Deferred income tax assets 428,983.92 356,170.09 Other assets 762,706.58 1,166,579.63

Total assets 71,742,249.39 66,839,300.79

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APPENDIX III SUMMARY OF THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF THE COMPANY

30 November 31 December Items 2018 2017

LIABILITIES: Short-term loans 468,889.48 599,145.12 Short-term financing instruments payable 1,932,982.78 3,529,643.91 Due to banks and other financial institutions 1,938,628.03 1,063,500.00 Financial liabilities measured at fair value through profit or loss N/A 4,762,245.82 Financial liabilities held for trading 5,153,480.21 N/A Derivative financial liabilities 1,023,627.76 1,331,634.31 Repurchase agreements 12,942,789.92 11,982,411.51 Customer brokerage deposits 12,487,223.30 10,532,772.98 Funds payable to securities issuers 13,927.02 95,798.65 Salaries, bonuses and allowances payable 1,206,157.28 1,198,387.22 Taxes payable 204,354.53 183,275.17 Accounts payables 3,465,561.61 2,159,938.77 Accrued liabilities 3,281.68 44,884.99 Long-term loans 109,483.59 112,218.77 Debt instruments issued 12,679,516.98 11,322,947.19 Deferred Income Tax Liabilities 277,678.57 265,658.65 Other liabilities 719,310.80 989,070.20 Contract liabilities 38,566.65 N/A

Total liabilities 54,665,460.19 50,173,533.28

Equity: Share capital 1,291,007.28 1,291,007.28 Capital reserve 6,710,834.21 6,711,236.79 Other comprehensive income 176,042.68 209,555.97 Surplus reserves 850,319.97 841,421.34 General reserve 2,180,287.73 2,161,098.71 Retained earnings 5,500,869.26 5,114,316.67

Total equity attributable to owners of the parent 16,709,361.13 16,328,636.77

Non-controlling interests 367,428.07 337,130.74

Total equity 17,076,789.20 16,665,767.50

Total liabilities and shareholders’ equity 71,742,249.39 66,839,300.79

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APPENDIX III SUMMARY OF THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF THE COMPANY

2. Pro forma operational performance of the listed company for last year and period

The data of the pro forma consolidated income statement for the most recent year and period of the listed company after the simulated implementation of the Transaction is set out below:

In RMB ten thousand January– Items November 2018 2017

1. Operating revenue 3,421,545.10 4,474,335.27 Net fee and commission income 1,619,744.21 1,972,290.55 Including: Net fee income from brokerage business 730,691.35 837,152.50 Net fee income from investment banking business 328,775.96 468,508.86 Net fee income from asset management business 509,223.73 581,077.66 Net interest income(expenses listed by “-”) 166,856.07 245,230.07 Including: Interest income 1,302,241.03 1,379,306.70 Finance costs 1,135,384.96 1,134,076.63 Other income 6,492.12 13,167.79 Investment income (loss listed by “-”) 405,997.58 1,308,918.51 Including: Investment income from associates and joint ventures 43,181.08 60,404.88 Gains arising from changes in the fair value (loss listed by “-”) 440,498.80 85,010.61 Gains from disposal of assets(loss listed by “-”) -79.92 1,623.57 Foreign exchange gains(loss listed by “-”) 99,259.38 -5,420.23 Other operating income 682,776.86 853,514.39

2. Operating expenses 2,387,139.78 2,828,624.32 Tax and surcharges 24,764.64 26,800.02 Business and administrative expenses 1,486,992.37 1,818,508.80 Impairment on assets N/A 175,934.65 Impairment on other assets 3,871.10 N/A Expected credit losses 214,474.57 N/A Other operating expenses and costs 657,037.09 807,380.85

3. Operating profit 1,034,405.33 1,645,710.95 Add: Non-operating income 48,246.20 19,091.32 Less: non-operating expenses 6,019.38 24,859.75

4. Profit before income tax 1,076,632.15 1,639,942.52 Less: income tax expense 209,977.23 425,086.62

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APPENDIX III SUMMARY OF THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF THE COMPANY

January– Items November 2018 2017

5. Net profit 866,654.91 1,214,855.89

(i) By continuing operations: 1. Net profit from continuing operations 866,654.91 1,214,855.89 2. Net profit from discontinued operations — —

(ii) By ownership: 1. Net profit attributable to owners of the parent company 822,922.57 1,160,314.64 2. Non-controlling interests 43,732.34 54,541.25

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APPENDIX IV SUMMARY OF THE ASSET VALUATION REPORT

Proposed Issuance of Shares by CITIC Securities Company Limited to Guangzhou Yuexiu Financial Holdings Group Co., Ltd. and Guangzhou Yuexiu Financial Holdings Group Limited to Acquire 100% Equity Interest in Guangzhou Securities Company Limited, which is held as to 32.765% and 67.235% by Guangzhou Yuexiu Financial Holdings Group Co., Ltd. and Guangzhou Yuexiu Financial Holdings Group Limited respectively (excluding 99.03% Equity Interest in Guangzhou Futures Co., Ltd. and 24.01% Equity Interest in Golden Eagle Fund Management Co., Ltd.) Asset Valuation Report ZLGJPZ [2019] No. VYGQA0033

Summary

Upon the engagement, subject to laws, administrative regulations and asset valuation standards, and on the principles of independence, objectivity and impartiality, Allied Appraisal Co., Ltd. conducted an appraisal on the valuation target under the economic action, based on appropriate valuation approach and necessary valuation process. The summary of the asset valuation results is as follows:

The entrusting parties: CITIC Securities Company Limited, Guangzhou Yuexiu Financial Holdings Group Co., Ltd. and Guangzhou Yuexiu Financial Holdings Group Limited

The Target Company: Guangzhou Securities Company Limited

The valuation target: 100% equity interest in Guangzhou Securities Company Limited (excluding 99.03% equity interest in Guangzhou Futures Co., Ltd. and 24.01% equity interest in Golden Eagle Fund Management Co., Ltd.)

Scope of valuation: Total assets and liabilities of Guangzhou Securities Company Limited (excluding 99.03% equity interest in Guangzhou Futures Co., Ltd. and 24.01% equity interest in Golden Eagle Fund Management Co., Ltd.) as at the asset valuation benchmark date.

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APPENDIX IV SUMMARY OF THE ASSET VALUATION REPORT

The balance sheet of the parent company as at the valuation benchmark date is as follows:

In RMB Assets 30/11/2018 Liabilities and equity 30/11/2018 Monetary funds 6,797,086,303.53 Short-term borrowing — Including: client funds deposit 5,916,793,390.01 Including: pledge loan — Short-term financing Deposit reservation for balance 1,142,727,577.88 773,900,000.00 instruments payable Borrowings from banks and Including: clients’ reserves 805,932,437.49 1,850,000,000.00 other financial institutions Lendings to banks and other Financial liabilities at fair value — 1,093,013,410.00 financial institutions through profit or loss Margin accounts 3,339,109,523.44 Derivative financial liabilities 1,149,617.60 Financial assets designated as Financial liabilities sold for at fair value through profit or 9,647,406,848.61 8,282,344,152.74 repurchase loss Receivings from vicariously Derivative financial assets 64,994,142.63 6,725,399,016.91 traded securities Receivings from vicariously Reverse repurchase financial 4,370,044,567.12 traded securities by credit — assets transactions Receivings from vicariously Receivables 219,276,981.94 — sold securities Interest receivable 785,023,792.95 Payroll payable 300,805,633.07 Refundable deposits 326,925,186.07 Taxes payable 39,078,414.54 Classified as available for sale — Payables 55,156,346.23 assets Available-for-sale financial 13,106,457,997.66 Accrued interest payable 440,930,845.65 assets Held-to-maturity investment 1,298,252,186.41 Estimated liabilities 26,331,300.00 Classified as available for sale Long-term equity investment 2,079,935,600.00 — liabilities Investment property — Long-term loans — Fixed assets 47,889,950.66 Long-term payroll payable — Construction in progress — Bonds payable 11,102,099,432.42 Disposal of fixed assets — Deferred income tax liabilities 19,056,971.56 Intangible assets 45,830,954.97 Other liabilities 2,921,296,029.84 Development expenditure — Total liabilities 33,630,561,170.56

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APPENDIX IV SUMMARY OF THE ASSET VALUATION REPORT

Assets 30/11/2018 Liabilities and equity 30/11/2018 Goodwill 24,543,792.13 Equity Deferred income tax assets 238,962,339.79 Share capital 5,360,456,852.00 Other assets 285,488,669.24 Capital reserve 3,024,765,119.54 Other comprehensive income -75,422,584.89 Surplus reserve 249,643,010.99 General risk reserve 395,997,725.52 Transaction risk reserve 388,061,403.24 Undistributed profit 845,893,718.07 Total equity 10,189,395,244.47 Total liabilities and Total assets 43,819,956,415.03 43,819,956,415.03 shareholders’ equity

Type of value: market value. Valuation benchmark date: 30 November 2018. Valuation approaches: market approach, income approach.

Valuation conclusion: Considering the applicability of the valuation approaches to valuation purpose and valuation target, the valuation conclusion is drawn from the valuation results based on the market approach. The appraisal results of 100% equity interest in Guangzhou Securities Company Limited (excluding 99.03% equity interest in Guangzhou Futures Co., Ltd. and the 24.01% equity interest in Golden Eagle Fund Management Co., Ltd.) as at the valuation benchmark date is as follows:

Under the premise of going-concern, the audited book value of total assets is RMB Forty-three Billion Eight Hundred and Nineteen Million Nine Hundred and Fifty-six Thousand Four Hundred (RMB43,819,956,400), the audited book value of total liabilities is RMB Thirty-three Billion Six Hundred and Thirty Million Five Hundred and Sixty-one Thousand Two Hundred (RMB33,630,561,200), and the audited book value of net assets is RMB Ten Billion One Hundred and Eighty-nine Million Three Hundred and Ninety-five Thousand Two Hundred (RMB10,189,395,200), as set out in the parent company financial statement of Guangzhou Securities Company Limited (excluding 99.03% equity interest in Guangzhou Futures Co., Ltd. and 24.01% equity interest in Golden Eagle Fund Management Co., Ltd.) on the valuation benchmark date (i.e. 30 November 2018).

Based on the market approach, the 100% equity interest in Guangzhou Securities Company Limited (excluding 99.03% equity interest in Guangzhou Futures Co., Ltd. and 24.01% equity interest in Golden Eagle Fund Management Co., Ltd.) is RMB Twelve Billion One Hundred and Ninety-five Million Six Hundred and Eighty-three Thousand One Hundred (RMB12,195,683,100). The increment by valuation is RMB Two Billion and Six Million Two Hundred and Eighty-seven Thousand Nine Hundred (RMB2,006,287,900), with an increment ratio of 19.69%.

Effective period of the valuation conclusion: In accordance with relevant laws and regulations on asset valuation, the asset valuation report involving statutory valuation business shall not be used until the entrusting parties have performed the supervision and management procedures of asset valuation as required by relevant laws and regulations. The valuation conclusion is valid for one year, i.e. from 30 November 2018 to 29 November 2019.

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APPENDIX IV SUMMARY OF THE ASSET VALUATION REPORT

Subsequent events: The influence of the following events, which occurred after the valuation benchmark date and prior to the submission date of this valuation report, on the valuation conclusion is not considered in this valuation report. Users of this valuation report shall pay attention to such influence when using the valuation conclusion of this report.

(1) Guangzhou Yuexiu Financial Holdings Group Co., Ltd. acquired 99.03% equity interest in Guangzhou Futures Co., Ltd. and 24.01% equity interest in Golden Eagle Fund Management Co., Ltd. held by Guangzhou Securities Company Limited in cash with 30 November 2018 being the valuation benchmark date. The appraisal value of 100% equity interest in Guangzhou Futures Co., Ltd. and 100% equity interest in Golden Eagle Fund Management Co., Ltd. is RMB1,026,373,800 and RMB1,031,946,400, respectively, as appraised by Allied Valuation Co., Ltd. (see ZLGJPZ [2019] No. VIGQA0018 and ZLGJPZ [2019] No. VIGQA0016 for details). Accordingly, the appraised value of 99.03% equity interest in Guangzhou Futures Co., Ltd. and 24.01% equity interest in Golden Eagle Fund Management Co., Ltd. is RMB1,016,418,000 and RMB247,770,300, respectively. The consideration is determined by the counterparties based on the valuation results filed with Guangzhou Yuexiu Group Company Limited. The valuation results for 100% equity interest in Guangzhou Securities Company Limited does not include the amount of RMB1,264,188,300 paid in cash by Guangzhou Yuexiu Financial Holdings Group Co., Ltd. to Guangzhou Securities Company Limited after the valuation benchmark date as stated above.

(2) The share price changes after the valuation benchmark date of comparable companies under the market approach are as follows:

Average Closing transaction price on 26 price in February November 2019, the used in this Change Comparable companies report date valuation Changes ratios (1) (2) (3)=(1)-(2) (4)=(3)/(2)

Sealand Securities 5.88 4.78 1.10 23.12% First Capital 7.47 5.55 1.92 34.49% Western Securities 10.67 8.71 1.96 22.48% Southwest Securities 5.41 4.04 1.37 33.83% Pacific Securities 3.70 2.91 0.79 26.96%

Except for the events that may influence the valuation conclusion and occurred between the valuation benchmark date and the valuation report date as disclosed in this report, other events that may influence the valuation conclusion and occurred after the valuation benchmark date cannot be predicted by the appraisers. We shall not be held liable for the influence on the valuation conclusion by the subsequent events occurred after the valuation benchmark date.

Application of the valuation conclusion: The valuation conclusion disclosed in the summary of the valuation report serves as a reference basis for the entrusting parties to carry out relevant economic actions, but it does not guarantee the feasibility of such actions. It is only used by the entrusting parties and other report users for valuation purpose as set out in this report within the effective period.

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APPENDIX IV SUMMARY OF THE ASSET VALUATION REPORT

When using the valuation conclusion, users of the valuation report shall pay attention to the valuation assumption, special notes, limits and the influence of major subsequent events on the valuation conclusion stated in the report, and shall use this valuation report properly.

Except as otherwise provided by laws and regulations, the contents of this summary shall not be extracted, quoted or disclosed in the public media without the written consent of the valuation institution and the appraiser with signature.

In accordance with the relevant laws and regulations on asset valuation, the asset valuation report involving statutory valuation business shall not be used until the entrusting parties have performed the supervision and management procedures of asset valuation as required by relevant laws and regulations.

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APPENDIX V REMEDIAL MEASURES TAKEN IN RELATION TO THE DILUTION OF IMMEDIATE RETURN

I. The influence of the Transaction on the earnings per share

According to the relevant requirements of Opinions of the State Council on Further Promoting the Sound Development of Capital Markets (GF [2014] No.17) issued by the State Council, Opinions of the General Office of the State Council on Further Strengthening the Protection of the Legitimate Rights and Interests of Minority Investors in the Capital Markets (Guo Ban Fa [2013] No.110) issued by the General Office of the State Council, and the Guiding Opinions on Matters Concerning the Dilution of Immediate Return in Initial Public Offering, Refinancing and Material Asset Restructuring (CSRC Notice [2015] No.31) issued by the CSRC, the Company analyzes the influence of the Transaction on the dilution of immediate return. According to the Pro Forma Review Report of PricewaterhouseCoopers and the calculations of the Company, before and after the completion of the Transaction, changes in the net profit, basic earnings per share and diluted earnings per share of the Company after deducting non-recurring gains and losses attributable to ordinary shareholders of the parent are as follows:

January to November 2018 2017 Before the After the Before the After the Items Transaction Transaction Transaction Transaction

Net profit after deducting non- recurring gains and losses attributable to ordinary shareholders of the parent (RMB10,000) 838,941.48 786,324.26 1,144,955.16 1,159,222.79 Basic earnings per share after deducting non-recurring gains and losses (RMB/share) 0.69 0.61 0.94 0.90 Diluted earnings per share after deducting non-recurring gains and losses (RMB/share) 0.69 0.61 0.94 0.90

Note: The earnings per share in January to November 2018 are not annualized.

After the completion of the Transaction, the basic earnings per share after deducting non-recurring gains and losses in the pro forma statements in January to November 2018 and in 2017 are RMB0.61 per share and RMB0.90 per share, respectively, both of which are lower than those of RMB0.69 per share and RMB0.94 per share after deducting non-recurring gains and losses before the completion of the Transaction. This is mainly due to the weaker profitability of Guangzhou Securities than the Company during the relevant period, especially due to the operating losses of Guangzhou Securities in January to November 2018. After the completion of the Transaction, the net profit of the Company attributable to shareholders of the parent company decreases, but the total amount of share capital increases, resulting in a corresponding decline in the earnings per share.

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APPENDIX V REMEDIAL MEASURES TAKEN IN RELATION TO THE DILUTION OF IMMEDIATE RETURN

II. The reasonableness and necessity of the Transaction

1. The Transaction can improve the Company’s competitiveness in Guangdong Province and South China Region

(1) Guangdong Province provides a good foundation for the development of securities business

(2) The business outlets of Guangzhou Securities in Guangdong Province have certain competitive advantages

Guangzhou Securities, one of the earliest securities companies established in the PRC, has long been rooted in Guangdong Province and has certain regional brand awareness. The background of its controlling shareholders, Yuexiu Financial Holdings and Financial Holdings Limited, is strong, both of which are under the supervision of Guangzhou State-owned Assets Supervision and Administration Commission. As of the signing date of the Report on the Acquisition of Assets by Issuance of Shares and Related Party Transactions (Draft) of CITIC Securities Company Limited, Guangzhou Securities has 32 business outlets in Guangdong Province (excluding Shenzhen) in total, the layout, customer channels and market resources of which are of high-quality.

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APPENDIX V REMEDIAL MEASURES TAKEN IN RELATION TO THE DILUTION OF IMMEDIATE RETURN

As a leading securities company in the PRC, the Company still has a large room for improvement in the securities brokerage business in Guangdong Province. As of the signing date of the Report on the Acquisition of Assets by Issuance of Shares and Related Party Transactions (Draft) of CITIC Securities Company Limited, the Company has 18 business outlets in Guangdong Province (excluding Shenzhen) in total, with a low market share. The business outlets can be further expanded and penetrated into some economically developed counties and cities, and the density of outlets can be further increased.

(3) Upon completion of the Transaction, the Company’s competitiveness in Guangdong Province and South China Region will be significantly improved

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APPENDIX V REMEDIAL MEASURES TAKEN IN RELATION TO THE DILUTION OF IMMEDIATE RETURN

2. The Transaction can realize advantageous complementarities with Guangzhou Securities and generate good synergistic effect

During the reporting period, Guangzhou Securities experienced significant fluctuations in operating income and recorded decrease of net profit or even suffered losses, which is mainly due to, among others, the macroeconomic policies in China, the trend of the securities market, the lack of its own project reserves and weak risk control. Upon completion of the Transaction, Guangzhou Securities will be positioned as a subsidiary of the Company engaged in specific business in specific region, and will make full use of the Company’s experience and advantages in securities research, product development, information technology, compliance management, risk control and other areas to make up for the shortcomings of Guangzhou Securities in dealing with macroeconomic situation, secondary market research and risk control, improve customer service capabilities, and further consolidate its business competitiveness in South China Region. The Company will optimize and integrate Guangzhou Securities by virtue of its advantages in management capability, market reputation and comprehensive business. With the synergistic effect arising from integration of the customer network, regional brand reputation and market resources that Guangzhou Securities has formed, it is expected that the Company’s overall performance in Guangdong Province will be further improved.

Upon completion of the Transaction, the Company will become a controlling shareholder of Guangzhou Securities. At the same time, Yuexiu Financial Holdings and Financial Holdings Limited will become major shareholders holding more than 5% of the shares of the Company in aggregate. The Company will have strategic cooperation with Yuexiu Financial Holdings and Guangzhou Yuexiu Group Company Limited. In the future, the Company is expected to leverage on the customer network of major shareholders and Guangzhou Securities in South China Region to fully explore business resources and enhance the Company’s core competitiveness in South China Region or even the Guangdong-Hong Kong-Macao Greater Bay Area.

In conclusion, the Transaction can give full play to the respective advantages of the Company and Guangzhou Securities, make up for their own shortcomings, and create synergistic effects in marketing, management and strategy. The Transaction is necessary and reasonable.

III. Remedial arrangement for the current earnings per share diluted after the Transaction

After the completion of the Transaction, the Company’s earnings per share and other immediate return indicators will face the risk of being diluted. In view of this, if the immediate return is diluted, the Company intends to adopt the following remedial measures to enhance the Company’s ability to make a continuous return:

1. Optimize and integrate Target Assets to enhance the Company’s profitability

Upon completion of the Transaction, the Company will optimize and integrate Guangzhou Securities by virtue of its advantages in management capability, market reputation and comprehensive business. With the synergistic effect arising from the customer network, regional brand reputation and market resources that Guangzhou Securities has formed, the Company will make full use of the core economic status of Guangdong Province in South China Region and give play to the regional radiation role of Guangdong Province in South China Region, so as to help the Company to expand business in South China Region and enhance its competitive advantages and profitability.

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APPENDIX V REMEDIAL MEASURES TAKEN IN RELATION TO THE DILUTION OF IMMEDIATE RETURN

2. Further improve corporate governance and internal control to provide institutional guarantee for the development of the Company

The Company will strictly follow the requirements of laws, regulations and regulatory documents, such as the Company Law, Securities Law, Corporate Governance Standards for Listed Companies and Rules Governing the Listing of Stocks on Shanghai Stock Exchange, continuously perfect corporate governance, and ensure that the Board exercise its authorities in accordance with the laws, regulations and the Company’s articles of association, that independent Directors earnestly perform their duties, that shareholders fully exercise their rights, and that the shareholders meeting, the Board and the board of supervisors regulate their operations, so as to safeguard the overall interests of the Company, especially the legitimate rights and interests of minority shareholders, and provide institutional guarantee for the development of the Company. The Company will further strengthen personnel and cost control, improve the daily operating efficiency, comprehensively and effectively control operating risks of the Company, and improve business performance.

3. Improve the Company’s profit distribution system and strengthen the return on investment

Upon the completion of the Transaction, Guangzhou Securities will become a wholly owned subsidiary of the Company directly and indirectly. The Company will continue to implement the sustainable, stable and positive profit distribution policy in strict accordance with the Articles of Association of CITIC Securities Company Limited. Combined with the actual situation of the Company, and according to the requirements of CSRC, SSE and relevant laws and regulations, the Company will widely listen to the opinions and suggestions of investors, especially independent Directors and minority shareholders, strengthen the returns to investors, improve the profit distribution policy, increase the transparency of distribution policy implementation, and safeguard the interests of all shareholders.

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APPENDIX VI LETTER OF UNDERTAKING FROM DIRECTORS AND SENIOR MANAGEMENT OF CITIC SECURITIES COMPANY LIMITED ON THE REMEDIAL MEASURES TAKEN IN RELATION TO THE DILUTION OF IMMEDIATE RETURN UNDER THE ASSET ACQUISITION

The Company proposed to issue shares to purchase 100% equity interest in Guangzhou Securities Company Limited. According to requirements of Opinions of the State Council on Further Promoting the Sound Development of Capital Markets (Guo Fa [2014] No.17), Opinions of the General Office of the State Council on Further Strengthening the Protection of the Legitimate Rights and Interests of Minority Investors in the Capital Market (Guo Ban Fa [2013] No.110), Guiding Opinions on Matters Concerning the Dilution of Immediate Return in Initial Public Offering, Refinancing and Material Asset Restructuring (CSRC Announcement [2015] No.31) and other laws, regulations and regulatory documents, Directors and senior management of the Company hereby undertake as follows:

1. I undertake not to illegally convey benefit to other companies or individuals free of charge or under unfair conditions, nor to damage the interests of the Company in other ways.

2. I undertake to restrain my position-related consumption.

3. I undertake not to use the assets of the Company to engage in investment and consumption activities not related to my duty.

4. I undertake that the salary system developed by the Board or the remuneration and appraisal committee will be tied to the implementation of the remedial measures taken by the Company.

5. I undertake that the proposed conditions for exercise of share incentive of the Company will be tied to the implementation of the remedial measures taken by the Company if the share incentive scheme is introduced afterwards.

6. After the date of issuance of this Letter of Undertaking and before the completion of the restructurings, if CSRC issues new regulations on remedial measures and related undertakings, which the abovementioned undertakings fail to meet, I undertake to issue a supplementary undertaking in accordance with the then latest regulations of the CSRC.

Hereby the commitment.

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