Zhejiang Expressway : Connected Transaction Agreements in relation to the Proposed Listing of Zhejiang Oceanking

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

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock code: 0576)

CONNECTED TRANSACTION

AGREEMENTS IN RELATION TO

THE PROPOSED LISTING OF ZHEJIANG OCEANKING

AGREEMENTS IN CONNECTION WITH THE PROPOSED LISTING OF ZHEJIANG OCEANKING

The Board announces that on July 31, 2020 (after trading hours), Zheshang Securities, a non-wholly owned subsidiary of the Company, entered into the Agreements with, among others, Zhejiang Oceanking, a non - wholly owned subsidiary of Communications Group, in relation to the proposed Listing of Zhejiang Oceanking on Shanghai Stock Exchange.

Pursuant to the Agreements, Zheshang Securities was engaged by Zhejiang Oceanking as a sponsor and a lead underwriter in respect of the proposed Listing in accordance with the terms and conditions of the Agreements to provide securities sponsorship and underwriting services. Pursuant to the Sponsorship Agreement, the total amount of sponsorship fees payable by Zhejiang Oceanking to the sponsors is RMB500,000. Pursuant to the Underwriting Agreement, the aggregate underwriting fees that Zhejiang Oceanking has agreed to pay to the lead underwriters are 4% of the actual amount of capital raised from the proposed Listing with a minimum amount of RMB22 million.

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LISTING RULES IMPLICATIONS

As at the date of this announcement, Communications Group is a controlling shareholder of the Company. Zhejiang Oceanking, being an approximately 65.44% owned subsidiary of Communications Group, is a connected person of the Company. Zheshang Securities is a non-wholly owned subsidiary of the Company. As a result, the transactions contemplated under the Agreements constitute connected transactions of the Group.

As one or more of the applicable percentage ratios (other than the profits ratio) as calculated with reference to the minimum underwriting fees payable under the Underwriting Agreement in accordance with the Listing Rules are more than 0.1% but all of them are less than 5%, the transactions contemplated under the Agreements are therefore subject to the reporting and announcement requirements but exempted from the independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

In the event that Zheshang Securities will receive an amount of underwriting fee that renders any one of the applicable ratios exceeds 5% or it will be required to underwrite the A Shares offered in the Listing by way of standby commitment underwriting, the Company will comply with the then applicable requirements under the Listing Rules as appropriate, including but not limited to publishing a further announcement and/or obtaining approval from the Shareholders where applicable.

The Agreements are conditional upon the satisfaction of various conditions precedent set out therein and accordingly, the completion of the Agreements and the transactions contemplated thereunder may or may not proceed. Shareholders and potential investors are reminded to exercise caution in dealing in the securities of the Company.

AGREEMENTS IN RELATION TO THE PROPOSED LISTING OF ZHEJIANG OCEANKING

The Board announces that on July 31, 2020 (after trading hours), Zheshang Securities, a non-wholly owned subsidiary of the Company, entered into the Agreements with, amongst others, Zhejiang Oceanking, a non-wholly owned subsidiary of the Communications Group in relation to proposed Listing of Zhejiang Oceanking on Shanghai Stock Exchange.

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THE SPONSORSHIP AGREEMENT

The principal terms of the Sponsorship Agreement are as follows:

Date:	July 31, 2020
Parties:	(1)	Zhejiang Oceanking as issuer;
	(2)	Zheshang Securities as a sponsor; and
	(3)	Zhongtai Securities as a sponsor.
Subject:	Pursuant to the Sponsorship Agreement, Zheshang Securities,
	among others, has been engaged as a sponsor to provide
	securities sponsorship services for the proposed Listing.
Service Fees	Total amount of sponsorship fees payable by Zhejiang
	Oceanking to the sponsors under the Sponsorship Agreement is
	RMB500,000.
	RMB250,000 of the total sponsorship fees will be paid upon
	application filing of the Listing with the CSRC. The remaining
	RMB250,000 of the total sponsorship fees will be paid upon
	completion of the Listing to be deducted from the proceeds
	raised from the Listing.
Conditions Precedent:	The sponsorship obligations of Zheshang Securities under the
	Sponsorship Agreement are subject to the following conditions
	precedent:
	(1)	obtaining approval from the shareholders of Zhejiang
		Oceanking in connection with the Listing;
	(2)	obtaining Zheshang Securities' internal approval in
		connection with the Listing;
	(3)	obtaining the approval of Ningbo Regulatory Bureau of
		the CSRC in respect of the Listing;
	(4)	satisfaction of all relevant requirements and regulations
		for the Listing in particular with sustainable profitability;
	(5)	maintenance of business, asset, personnel, organisational
		and financial independence between the promotor,
		substantial shareholders and controlling shareholders of
		Zhejiang Oceanking;

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	(6)	there being no material deficiency in the corporate
		governance, financial and accounting systems of the
		company that would hinder the operation of Zhejiang
		Oceanking;
	(7)	sufficient training to have the company's directors,
		supervisors, senior management, shareholders with more
		than 5% interests and the controlling shareholder or its
		legal representative of Zhejiang Oceanking fully aware of
		the relevant laws and regulations, and their roles and
		responsibilities for the Listing; and
	(8)	other requirements from the CSRC in relation to the
		Listing.
Termination:	Prior to the publication of any offering documents in relation to
	the Listing, the Sponsorship Agreement can terminated by any
	party in writing, with consent of the other parties (other than
	sub-clause (1) below), in the event:
	(1)	of non-performance or any material breach of the terms of
		t h e S p o n s o r s h i p A g r e e m e n t w h i c h r e n d e r s t h e
		Sponsorship Agreement unenforceable and which would
		result in a foreseeable material loss to the other party;
	(2)	that it is impossible to continue the performance of the
		Sponsorship Agreement caused by untrue, inaccurate or
		misleading representations, warranties and undertakings
		provided by the other party;
	(3)	any breach of the confidentiality obligations contained in
		the Sponsorship Agreement.

Other principal terms: The Sponsorship Agreement shall be read and construed in conjunction with the Underwriting Agreement.

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THE UNDERWRITING AGREEMENT

The principal terms of the Underwriting Agreement are as follows:

Date:	July 31, 2020
Parties:	(1)	Zhejiang Oceanking as issuer;
	(2)	Zheshang Securities as a lead underwriter; and
	(3)	Zhongtai Securities as a lead underwriter.
Subject:	Pursuant to the Underwriting Agreement, Zheshang Securities
	has been engaged as one of the lead underwriters to provide
	securities underwriting services for the proposed Listing.

Conditions Precedent: The obligation of Zheshang Securities to perform as a lead underwriter in relation to the proposed Listing is subject to the fulfillment and continuous satisfaction on the date of the Listing of the relevant conditions precedent under the Underwriting Agreement, which include:

(1) the issuance of legal opinions by the legal counsel of Zhejiang Oceanking, the format and context of which is in compliance with the requirements under relevant laws, regulations and regulatory documents;

(2) the issuance of audit report and other necessary financial statements by auditor of Zhejiang Oceanking, the format and context of which is in compliance with the requirements under relevant laws, regulations and regulatory documents;

(3) obtaining approvals from the board of directors and the shareholders of Zhejiang Oceanking and filing with the CSRC for the proposed Listing;

(4) o btaining ap proval from the CSR C on Zhe jian g Oceanking's application for the proposed Listing and the proposed issue of offering shares;

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(5) obtaining confirmation from Zhejiang Oceanking that from the date of the Underwriting Agreement to the date of the proposed Listing, there is no material breach of the law; no change in its financial position, equity structure, major properties owned, major business; no change in its personnel which has a material impact on the management and operation of Zhejiang Oceanking; no material litigation, arbitration and equity disputes relating to Zhejiang Oceanking and its chairman, general manager and major shareholders; no incident in which Zhejiang Oceanking reasonably believes would lead to adverse

	effects in its foreseeable future;
	(6) publication of the relevant documents for the proposed
	Listing on the website of Zhejiang Oceanking and in the
	press designated by the CSRC; and
	(7) with sufficient proof to the lead underwriters, the
	obtaining of all of the necessary permit(s) and approval(s),
	completion of all procedures, compliance with all
	applicable rules and regulations for the proposed Listing.
Underwriting	The A Shares to be offered in the Listing will be issued at par
Commitment:	with a nominal value of RMB1.00 each. The number of A
	Shares to be issued in the proposed Listing is subject to (i) the
	determination of Zhejiang Oceanking and the lead underwriters,
	(ii) the market conditions and (iii) the approval of the CSRC.
	The insufficient portion of the subscription amount of the
	p r o p o s e d L i s t i n g w i l l b e u n d e r w r i t t e n b y t h e l e a d
	underwriter(s).
	Upon satisfaction of the conditions precedent of the
	Underwriting Agreement, Zheshang Securities, together with
	other lead underwriters, shall underwrite the A Shares to be
	offered at the proposed Listing by way of standby commitment
	underwriting in accordance with the terms of the Underwriting
	Agreement.
Underwriting	The aggregate underwriting fees that Zhejiang Oceanking has
Service Fees:	agreed to pay to the lead underwriters are 4% of the actual
	amount of capital raised from the proposed Listing with a
	minimum amount of RMB22 million.

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	The underwriting commission rate is determined based on the
	arm's length negotiation between the parties and is consistent
	with market rates. The underwriting fees will be deducted from
	the proceeds of the proposed Listing.
Termination:	The Underwriting Agreement can be terminated by a party,
	upon the occurrence of any of the following events:
	(1) the non-performance or any material breach of the terms
	of the Sponsorship Agreement which renders the
	Sponsorship Agreement unenforceable and which would
	result in a foreseeable material loss to the other party;
	(2) that it is impossible to continue the performance of the
	Sponsorship Agreement caused by untrue, inaccurate or
	misleading representations, warranties and undertakings
	provided by the other party; or
	(3) any breach of the confidentiality obligations contained in
	the Underwriting Agreement.

Other principal terms: The Underwriting Agreement shall be read and construed in conjunction with the Sponsorship Agreement.

R E A S O N S F O R A N D T H E B E N E F I T S O F E N T E R I N G I N T O T H E AGREEMENTS

One of the principal businesses of Zheshang Securities is securities underwriting and securities sponsorship. The transactions contemplated under the Agreements fall within the principal business activities of Zheshang Securities. Zheshang Securities and Zhongtai Securities were finally determined by Zhejiang Oceanking through procedures of competitive negotiations by invitation to carry out the role of sponsor and underwriter in the proposed Listing of Zhejiang Oceanking. Other than Zheshang Securities and Zhongtai Securities, the other two participants in the competitive negotiations are independent third party service providers. Zhejiang Oceanking considered various factors including but not limited to the pass rate of IPO review, team members' credentials, working proposal and past performance on IPO projects. The Directors consider that such transactions will have a positive income contribution to the Group and are financially beneficial to the Group and the Shareholders as a whole. The Directors consider that the terms of the Agreements were reached on an arm's length basis between the parties and not less favourable than those provided by other financial institutions under similar agreements.

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The Directors (including the independent non-executive Directors) are of the view that the Agreements are entered into in the ordinary and usual course of business of the Group and the terms contained therein are normal commercial terms and the Agreements are fair and reasonable and in the interests of the Group and the Shareholders as a whole.

Mr. Yu Zhihong, Mr. Dai Benmeng, Mr. Yuan Yingjie and Mr. Yu Ji (as at the time when the Board considered the Agreements), being Directors, are deemed to have material interests in the Agreements as they are currently also employed by the Group and have abstained from voting on the relevant Board resolutions. Other than those Directors mentioned above, none of the Directors have a material interest in the transactions contemplated under the Agreements, and none are required to abstain from voting on the relevant resolutions of the Board.

INFORMATION ON THE PARTIES

The Company is a joint stock company established under the laws of the PRC with limited liability on March 1, 1997, the H Shares of which are listed on the Main Board of the Hong Kong Stock Exchange (Stock Code: 0576), principally engaged in investing in, developing and operating high-grade roads in the PRC. The Group also carries on certain other businesses such as securities brokerage, investment banking, asset management, margin financing and securities lending through Zheshang Securities.

Zheshang Securities is a joint stock limited company established under the laws of the PRC, the shares of which are listed on the Shanghai Stock Exchange (Stock Code: 601878). It is a non-wholly owned subsidiary owned as to approximately 62.61% by Shangsan Co, a company owned as to approximately 73.63% by the Company. Zheshang Securities is principally engaged in the provision of security brokerage, securities margin trading, security lending, security underwriting, asset management, advisory services and security trading.

Zhejiang Oceanking is a joint stock limited company established under the laws of the PRC. It is a non-wholly owned subsidiary owned as to approximately 65.44% by Communications Group. Zhejiang Oceanking is primarily engaged in the production of organic chemicals and chemicals materials.

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LISTING RULES IMPLICATIONS

As at the date of this announcement, Communications Group is a controlling shareholder of the Company. Zhejiang Oceanking, as an approximately 65.44% owned subsidiary of Communications Group, is a connected person of the Company. Zheshang Securities is a non-wholly owned subsidiary of the Company. As a result, the transactions contemplated under the Agreements constitute connected transactions of the Group.

As one or more of the applicable percentage ratios (other than the profits ratio) as calculated with reference to the minimum underwriting fees payable under the Underwriting Agreement in accordance with the Listing Rules are more than 0.1% but all of them are less than 5%, the transactions contemplated under the Agreements are therefore subject to the reporting and announcement requirements but exempted from the independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

In the event that Zheshang Securities will receive an amount of underwriting fee that renders any one of the applicable ratios exceeds 5% or it will be required to underwrite the A Shares offered in the Listing by way of standby commitment underwriting, the Company will comply with the then applicable requirements under the Listing Rules as appropriate, including but not limited to publishing a further announcement and/or obtaining approval from the Shareholders where applicable.

The Agreements are conditional upon the satisfaction of various conditions precedent set out therein and accordingly, the completion of the Agreements and the transactions contemplated thereunder may or may not proceed. Shareholders and potential investors are reminded to exercise caution in dealing in the securities of the Company.

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DEFINITIONS

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

"A Share(s)"	A share(s) of Zhejiang Oceanking, which is(are)
	proposed to be listed on the Shanghai Stock Exchange
"Agreements"	collectively the Sponsorship Agreement and the
	Underwriting Agreement, which shall be read and
	construed in conjunction with each other
"Board"	the board of Directors
"Communications Group"	Zhejiang Communications Investment Group Go., Ltd. *
	(浙江省交通投資集團有限公司), a wholly State-owned
	enterprise established in the PRC and the controlling
	shareholder of the Company and Zhejiang Oceanking
"Company"	Zhejiang Expressway Co., Ltd. (浙江滬杭甬高速公路
	股份有限公司) , a j o i n t s t o c k l i m i t e d c o m p a n y
	incorporated in the PRC with limited liability
"connected person(s)"	has the same meaning ascribed to it under the Listing
	Rules
"controlling shareholder(s)"	has the same meaning ascribed to it under the Listing
	Rules
"CSRC"	China Securities Regulatory Commission
"Director(s)"	the director(s) of the Company, including the
	independent non-executive directors
"Group"	the Company and its subsidiaries
"H Share(s)"	the overseas listed foreign ordinary share(s) in the
	share capital of the Company with a nominal value of
	RMB1.00 each, which are listed on the Main Board of
	the Hong Kong Stock Exchange
"Hong Kong"	the Hong Kong Special Administrative Region of the
	PRC

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"Listing"	the listing of A Shares of Zhejiang Oceanking on the
	Shanghai Stock Exchange
"Listing Rules "	the Rules Governing the Listing of Securities on The
	Stock Exchange of Hong Kong Limited
"PRC"	the People's Republic of China which, for the purpose
	of this announcement, excluding Hong Kong, the
	Macau Special Administrative Region of the PRC and
	Taiwan
"RMB"	Renminbi, the lawful currency of the PRC
"Shangsan Co"	Zhejiang Shangsan Expressway Co., Ltd. * (浙江上三
	高速公路有限公司), an approximately 73.63% owned
	subsidiary of the Company
"Shareholder(s)"	the shareholder(s) of the Company
"Shanghai Stock Exchange"	The Shanghai Stock Exchange
"Sponsor Agreement"	the agreement dated July 31, 2020 entered into between
	Zhejiang Oceanking and, among others, Zheshang
	Securities, pursuant to which Zhejiang Oceanking has
	engaged Zheshang Securities as a sponsor in respect of
	the proposed Listing
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Underwriting Agreement"	the agreement dated July 31, 2020 entered into between
	Zhejiang Oceanking and, among others, Zheshang
	Securities, pursuant to which Zhejiang Oceanking has
	engaged Zheshang Securities as a lead underwriter in
	respect of the proposed Listing
"Zhejiang Oceanking"	Zhejiang Oceanking Development Co., Ltd (浙江鎮洋
	發展股份有限公司), a limited liability company
	established under the laws of the PRC and an
	approximately 65.44% owned subsidiary of the
	Communications Group

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"Zheshang Securities"	Zheshang Securities Co., Ltd. (浙商證券股份有限公
	司), a limited liability company established under the
	laws of the PRC in May 2002 and an approximately
	62.61% owned subsidiary of Shangsan Co
"Zhongtai Securities"	Zhongtai Securities Company Limited (中泰證券股份
	有限公司), a limited liability company established
	under the laws of the PRC in 2001
"%"	per cent

• For identification purpose only.

By Order of the Board

Zhejiang Expressway Co., Ltd.

Tony Zheng

Company Secretary

Hangzhou, the PRC, July 31, 2020

As at the date of this announcement, the Chairman of the Company is Mr. YU Zhihong; the executive Directors of the Company are: Mr. CHEN Ninghui and Ms. LUO Jianhu; the other non - executive Directors of the Company are: Mr . DAI Benmeng, Mr. YUAN Yingjie and Mr. FAN Ye; and the independent non-executive Directors of the Company are: Mr. PEI Ker-Wei, Ms. LEE Wai Tsang, Rosa and Mr. CHEN Bin.

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