Very Substantial Disposal and Connected Transaction

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 all your shares in AVIC International Holdings Limited, you should at once hand this circular with the enclosed form of proxy and confirmation slip to the purchaser or transferee, or to the bank, stockbroker 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. ((formerly known as CATIC Shenzhen Holdings Limited (ଉέʕঘණྠٰ΅Ϟࠢʮ̡) (a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock code: 00161) VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION: CAPITAL INCREASE AGREEMENT AND DEEMED DISPOSAL OF INTEREST IN AVIC VANKE Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders A letter from the Independent Board Committee is set out on pages 17 to 18 of this circular. A letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 19 to 34 of this circular. Notice convening the EGM to be held on Friday, 12 April 2013 at 10:00 a.m. at Level 25, Hangdu Building, CATIC Zone, Shennan Road Central, Futian District, Shenzhen, the PRC is set out on pages EGM-1 to EGM-2 of this circular. The form of proxy for use by the Shareholders at the EGM (or any adjournment thereof) is enclosed with this circular. Whether or not you intend to attend the EGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the legal address of the Company at Level 25, Hangdu Building, CATIC Zone, Shennan Road Central, Futian District, Shenzhen, the PRC (for holders of Domestic Shares) or to the H share registrar of the Company, Hong Kong Registrars Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for holders of H Shares) as soon as possible and in any event not less than 24 hours before the time appointed for the holding of the EGM. Completion and return of the form of proxy will not prevent the Shareholders from attending and voting in person at the EGM (or any adjournment thereof) should they so wish. 25 February 2013 CONTENTS Page DEFINITIONS ................................................... 1 LETTER FROM THE BOARD ....................................... 5 LETTER FROM THE INDEPENDENT BOARD COMMITTEE ............. 17 LETTER FROM THE INDEPENDENT FINANCIAL ADVISER ............. 19 APPENDIX I — FINANCIAL INFORMATION OF THE GROUP ........ I-1 APPENDIX II — FINANCIAL INFORMATION OF AVIC VANKE ........ II-1 APPENDIX III — UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP ...... III-1 APPENDIX IV — MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP .................... IV-1 APPENDIX V — PROPERTY VALUATION REPORT OF AVIC VANKE . V-1 APPENDIX VI — GENERAL INFORMATION ........................ VI-1 NOTICE OF THE EGM ............................................ EGM-1 DEFINITIONS In this circular, the following expressions have the following meanings unless the context requires otherwise: “2010Acquisition” acquisition of equity interests in certain PRC companies by the Company pursuant to three acquisition agreements all dated 30 November 2010, details of which are set out in the circular of the Company dated 31 December 2010 “associate(s)” has the same meaning as ascribed thereto in the Listing Rules AviationIndustry” Aviation Industry Corporation of China (ʕ਷ঘ٤ʈ“ ุණྠʮ̡), as enterprise owned by the whole people ϞՓΆุ) established in the PRC and heldהΌ͏) 76.83% of the equity interest in AVIC International and 60% of the equity interest in Beijing Raise as at the Latest Practicable Date AVICInternational” AVIC International Holding Corporation (ʕ਷ঘ٤Ҧ“ ஔ਷ყછٰϞࠢʮ̡), a limited liability company established in the PRC, and a controlling shareholder of the Company “AVICShenzhen” AVICInternationalShenzhenCompanyLimited (ʕ਷ ঘ٤ҦஔଉέϞࠢʮ̡), a limited liability company established in the PRC, a controlling shareholder of the Company, and as at the Latest Practicable Date, its entire equity interest was owned by AVIC International “AVICVanke” AVICInternationalVankeCompanyLimited(ʕঘຬ ߅Ϟࠢʮ̡), a limited liability company established in the PRC, and as at the Latest Practicable Date and prior to Completion, its equity interest was owned as to 60% by the Company and 40% by Vanke Enterprise, respectively “BeijingRaise” BeijingRaiseScienceCompanyLimited(̏ԯ๿ᒄ߅Ҧ Ϟࠢʮ̡), a limited liability company established in the PRC “Board” theboardofDirectors – 1 – DEFINITIONS “Capital Increase Agreement” a capital increase agreement dated 27 December 2012 entered into among the Company, Vanke Enterprise, AVIC International and AVIC Vanke in relation to the Proposed Capital Increase Company” AVICInternationalHoldingsLimited(ʕঘ਷ყછٰٰ“ ΅Ϟࠢʮ̡) (formerly known as CATIC Shenzhen Holdings Limited (ଉέʕঘණྠٰ΅Ϟࠢʮ̡)), a joint stock limited company incorporated in the PRC with limited liability, whose H Shares are listed on the Stock Exchange “Completion” completionoftheProposedCapitalIncrease “connectedperson(s)” has the same meaning as ascribed thereto in the Listing Rules “controllingshareholder(s)” has the same meaning as ascribed thereto in the Listing Rules “CSRC” ChinaSecuritiesRegulatoryCommission(ʕ਷ᗇՎ္ ຖ၍ଣ։ࡰึ) “Director(s)” thedirectorsoftheCompany “DomesticShare(s)” ordinary domestic share(s) of nominal value of RMB1.00 each in the capital of the Company which are subscribed for and traded in RMB “EGM” theextraordinarygeneralmeetingoftheCompanyto be convened and held on 12 April 2013 for the purpose of considering and, if thought fit, approving the Proposed Capital Increase and the transactions contemplated under the Capital Increase Agreement “Group” theCompanyanditssubsidiaries “HShare(s)” overseas listed foreign invested share(s) of the nominal value of RMB1.00 each in the capital of the Company, which are listed on the Stock Exchange and subscribed for and traded in HK$ “HK$” HongKongdollars,thelawfulcurrencyofHong Kong “HongKong” theHongKongSpecialAdministrativeRegionofthe People’s Republic of China – 2 – DEFINITIONS “Independent Board an independent committee of the Board comprising Committee” all independent non-executive Directors, namely, Ms. Wong Wai Ling, Mr. Wu Wei and Mr. Zhang Ping, to advise the Independent Shareholders in respect of the Proposed Capital Increase and the transactions contemplated under the Capital Increase Agreement “Independent Financial Anglo Chinese Corporate Finance, Limited, a licensed Adviser” or “Anglo Chinese” corporation to carry out type 1 (dealing in securities), type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities as defined under the SFO “Independent Shareholders” Shareholders other than AVIC International, Vanke Enterprise and their respective associates “LatestPracticableDate” 22 February 2013, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular “ListingRules” theRulesGoverningtheListingofSecurities on the Stock Exchange “PRC” ThePeople’sRepublicofChina,andforthepurpose of this circular only, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan “ProposedCapitalIncrease” the proposed capital contribution by AVIC International and Vanke Enterprise in the amount of RM600,000,000 and RMB400,000,000, respectively, to the registered capital and the capital reserve of AVIC Vanke pursuant to the Capital Increase Agreement “PSCS” theperpetualsubordinatedconvertiblesecurities in an aggregate principal amount of RMB2,781,672,739 issued by the Company to AVIC International, AVIC Shenzhen and Beijing Raise on 5 September 2012, convertible into 801,634,795 Domestic Shares at an initial conversion price of RMB3.47 (subject to adjustment pursuant to its terms) “RemainingGroup” the Group after Completion (excluding AVIC Vanke and its subsidiaries) “RMB” Renminbi,thelawfulcurrencyofthePRC – 3 – DEFINITIONS “SASAC” theState-ownedAssetsSupervisionandAdministration Commission of the State Council (਷ਕ৫਷Ϟ༟ପ္ຖ ၍ଣ։ࡰึ) “SFO” SecuritiesandFuturesOrdinance(Chapter571ofthe Laws of Hong Kong) “Share(s)” share(s)oftheCompany,includingDomesticShare(s) and H Share(s) “Shareholder(s)” holder(s)ofShare(s) “StockExchange” TheStockExchangeofHongKongLimited VankeEnterprise” Vanke Enterprise Company Limited (ຬ߅Άٰุ΅Ϟ“ ࠢʮ̡), a joint stock limited company established in the PRC, the Ashares and B shares of which are listed on the Shenzhen Stock Exchange “%” percent. In this circular, the English names of the PRC entities are translation of their Chinese names, and are included herein for identification purpose only. In the event of any inconsistency, the Chinese names shall prevail. Unless otherwise specified in this circular, amounts denominated in RMB have been converted

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