SUPPLEMENTAL ANNOUNCEMENT IN RELATION TO DISCLOSEABLE TRANSACTION: PURCHASE OF BOND-LINKED NOTES

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

China Minsheng Financial Holding Corporation Limited

中 國 民 生 金 融 控 股 有 限 公 司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 245)

SUPPLEMENTAL ANNOUNCEMENT IN RELATION TO

DISCLOSEABLE TRANSACTION:

PURCHASE OF BOND-LINKED NOTES

Reference is made to the announcement (the ''Announcement'') of China Minsheng Financial Holding Corporation Limited (the ''Company'') dated 21 January 2020 regarding the purchase of bond-linked notes to be issued by the Notes Issuer in the aggregate nominal amount of US$22,500,000 linked to the Reference Bond issued by the Reference Bond Issuer for a consideration of US$22,500,000 constituting a discloseable transaction of the Company.

Unless the context otherwise requires, capitalised terms in this announcement shall have the same meanings as defined in the Announcement.

This announcement is made to provide supplemental information on the Notes Purchase, among others, including the reasons for the Notes Purchase, the interest amount of the Notes, the Collateral and background and financial standing of the Notes Issuer.

PRINCIPAL TERMS OF THE NOTES

Interest amount

Regarding one of the components to determine the Residual Interest Amount of each Note, ''such Specified Denomination's pro rata share of the relevant interest amount(s) of the Reference Bond Principal Amount that is actually received by or on behalf of the Notes Issuer on the corresponding interest payment date of the Reference Bond'' refers to the coupon rate of the Reference Bond (i.e. 7.73% per annum) multiplied by US$1,000.

If there is no default payment of interests of the Reference Bond, the Series 2020-1 Notes and the Series 2020-2 Notes, (i) the Company is expected to earn an interest rate higher than the coupon rate of the Reference Bond; and (ii) the lowest effective interest rate that the Noteholder will earn is approximately 10.5% per annum.

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Comparison between the major terms of the Series 2020-1 Notes and the Series 2020-2 Notes

Save as disclosed in the Announcement, differences in major terms of the Series 2020-1 Notes and the Series 2020-2 Notes are summarised as follows:

the Series 2020-2 Notes

Major Terms

Series 2020-1 Notes

(including the Notes)

Interest

rates

per

annum

Approximately 4.6362% per

Approximately

10.5% per

(Assuming there

is no

annum

annum

default

payment

of

interests

in respect of the Reference

Bond, the Series 2020-1

Notes and the Series 2020-2

Notes)

Rights of the holders

The

holders

of

the Series

No such sanction may be

2020-1 Notes may direct the

given by an

extraordinary

Notes Issuer to exercise any

resolution of the holder of

right

in

respect

of

the

the Series 2020-2 Notes.

Reference

Bond,

including,

(i)

exercising

the

put

right

to

early

redeem

the

Reference

Bond

Principal

Amount

of

the

Reference

Bond

upon

the

occurrence

of

certain

early

redemption

events,

(ii)

accelerating

payment

of

the

Reference

Bond

Principal

Amount

of

the

Reference

Bond

following

an

event

of

default

and

making

a

demand

pursuant

to

the

relevant

deed

of

guarantee,

and

provided

that

the

requisite

majority

of

the

holders

of

the

Reference

Bond for the exercise of

such right is reached, (iii)

consenting

to

amendments

to the terms of the

Reference

Bond

and

(iv)

waiving

compliance

with

undertakings

or

obligations

of

the

Reference

Bond

Issuer

or

the

Reference

Bond Guarantor.

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COLLATERAL

Pursuant to the terms and conditions of the Series 2020-2 Notes and the Series 2020-1 Notes, (i) the Notes Issuer's obligations in respect of the aggregate amount of the Series 2020-2 Notes (with total issue of aggregated principal amount of US$80,000,000) and the Series 2020-1 Notes (with total issue of aggregated principal amount of US$80,000,000) are secured upon the same Collateral (including the Reference Bond Principal Amount); and (ii) as confirmed by PACAM, the Collateral is not applied to secure any other obligations of the Notes Issuer (other than the Series 2020-1 Notes and the Series 2020-2 Notes).

Operating mechanism of the Collateral

Citicorp International Limited is the trustee (the ''Trustee'') and Citibank, N.A., Hong Kong Branch (organized under the laws of the U.S.A. with limited liability) is the custodian (the ''Custodian'') of the Notes Issuer in relation to the issue of the Series 2020-1 Notes and Series 2020-2 Notes, in which the Custodian shall agree to hold the Collateral on behalf of and for the benefit of the Notes Issuer.

Pursuant to the terms and conditions of the Notes, (i) at any time after the Trustee is notified in writing of the occurrence of an enforcement event, it may, and among others, if so requested in writing by holders of at least 20%. in nominal amount of the Series 2020-1 Notes and the Series 2020-2 Notes then outstanding enforce the Collateral; (ii) in the enforcement of the Collateral, among others, the Trustee may sell, call in, collect and convert the Collateral into money in such manner and on such terms as it shall think fit, and the Trustee may, at its discretion, take possession of all or part of the Collateral over which the Collateral shall have become enforceable; and (iii) upon the Trustee giving an enforcement notice to the Calculation Agent following the occurrence of an enforcement event, the Calculation Agent shall cease to effect any further liquidation of any Collateral and shall take no further action to liquidate any Collateral, save that any transaction entered into in connection with the liquidation on or prior to the effective date of any such enforcement notice shall be settled and the Calculation Agent shall take any steps and actions necessary to settle such transaction and/or which is incidental thereto.

In view of above arrangement, the Company considers the Company's interests in the Notes can be safeguarded.

Purpose of setting up the Bank Account and its operating mechanism

The purpose of setting up the Bank Account is for partial payment of the interests for the benefit of the holders of Series 2020-2 Notes, including the Noteholder.

As of the date of this announcement, US$438,000 was deducted from the issue price paid by the holders of the Series 2020-2 Notes and maintained in the Bank Account operated by the Custodian. According to PACAM, the deposit in the Bank Account would only be withdrawn for the payment of interests to the holders of Series 2020-2 Notes and in addition, pursuant to the terms and conditions of the Series 2020-2 Notes, the deposit in the Bank Account would be applied in the liquidation of the Collateral.

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INFORMATION OF THE NOTES ISSUER, PACAM AND THE REFERENCE BOND ISSUER

The Notes Issuer is held by Walkers Fiduciary Limited, which is a share trustee company. The Notes Issuer is a special purpose company and its sole business is the raising of money by issuing notes or entering into any obligations for the purposes of purchasing assets and entering into related derivatives and other contracts.

To the best of the Directors' knowledge, information and belief having made all reasonable enquires, (i) the ultimate beneficial owner of PACAM is Ping An Insurance (Group) Company of China, Ltd. (2318.HK) (''Ping An''); and (ii) the ultimate beneficial owner of the Reference Bond Issuer is Mr. Yu Kin Wah, Patrick.

REASONS AND BENEFITS OF THE NOTES PURCHASE

The reasons of not directly invested the Reference Bond by the Noteholder are mainly attributable to (i) the higher potential return upon redemption of the Notes, with interest rate of approximately 10.5% per annum, compared with interest rate of approximately 7.73% per annum of the Reference Bond; and (ii) unavailability of the Reference Bond as it was issued in November 2019.

Similarly, the reason of not directly invested the Series 2020-1 Notes by the Noteholder is mainly attributable to the higher potential return upon redemption of the Notes, with interest rate of approximately 10.5% per annum, compared with interest rate of approximately 4.6362% per annum of the Series 2020-1 Notes.

In assessing the financial standing and credit risk of the Notes Issuer, the Company has considered, inter alia, (i) the historical transaction of the Notes Issuer; (ii) in case of the Notes Issuer defaults in its payment obligations under the Notes, the Company is expected to recover partial or all of its purchase price of the Notes through the enforcement of the Collateral; and (iii) the financial standing of the Reference Bond Guarantor as disclosed in the Announcement. Although the Notes Issuer is a special purpose vehicle without proven financial track record, having considered the above, the Company is of the view that the Notes Purchase is fair and reasonable and is in the interest of the Company and its shareholders as a whole.

By order of the Board

China Minsheng Financial Holding Corporation Limited

Tomohiko Watanabe

Chairman

Hong Kong, 14 February 2020

As at the date of this announcement, the Board comprises (1) Mr. Tomohiko Watanabe, Mr. Ni Xinguang and Ms. Li Wei as executive Directors; (2) Mr. Wang Dongzhi as non-executive Director; and (3) Mr. Wang Yongli, Ms. Zhou Hui and Mr. Dong Hao as independent non- executive Directors.

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