China Railway Construction : ANNOUNCEMENT - LATEST UPDATE ON THE PROPOSED SPIN-OFF AND LISTING OF CRCHI ON SCIENCE AND TECHNOLOGY INNOVATION BOARD OF SSE

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ANNOUNCEMENT

LATEST UPDATE ON THE PROPOSED SPIN-OFF AND LISTING OF CRCHI ON SCIENCE AND TECHNOLOGY INNOVATION BOARD OF SSE

Reference is made to the announcement of China Railway Construction Corporation Limited (the "Company") dated 18 December 2019 (the "Announcement"), in relation to the proposed spin-off (the "Proposed Spin-off") and the listing on the Science and Technology Innovation Board (the "Science and Technology Innovation Board") of the Shanghai Stock Exchange (the "SSE") of China Railway Construction Heavy Industry Corporation Limited* ("CRCHI"). Unless otherwise defined, the terms used herein shall have the same meaning as those defined in the Announcement. The Board hereby provides the latest update on the Proposed Spin-off to the shareholders of the Company.

APPROVAL IN RESPECT OF THE PROPOSED SPIN-OFF

The Company has applied for, and The Stock Exchange of Hong Kong Limited (the "Stock Exchange") has confirmed, that the Company may proceed with the Proposed Spin-off under Practice Note 15 of the Rules Governing the Listing of Securities on The Stock Exchange (the "Listing Rules").

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In connection with the Proposed Spin-off, it is intended that CRCHI will issue new shares and proceed with the listing on the Science and Technology Innovation Board of the SSE. The Proposed Spin-off will result in a reduction of the Company's equity interest in CRCHI and, if materialised, the Proposed Spin-off will constitute a deemed disposal of the Company's equity interest in CRCHI, and may constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules. In such event, the Company will comply with the relevant requirements under Chapter 14 of the Listing Rules.

In addition, the Proposed Spin-off is subject to the approval from the general meeting of the Company, and is also subject to, among other things, the approval(s) from the CSRC and the SSE.

WAIVER IN RESPECT OF ASSURED ENTITLEMENT

Paragraph 3(f) of Practice Note 15 of the Listing Rules requires a listed company contemplating a spin-off to have due regard to the interests of its existing shareholders by providing them with an assured entitlement to shares in the spun-off entity, either by way of a distribution in specie of existing shares in the spun-off entity or by way of preferred application in any offering of existing or new shares in the spun-off entity.

However, as advised by the PRC counsel of CRCHI, according to the relevant laws and regulations of the PRC, the following parties (collectively referred to as ("Qualified Investors") are entitled to open A-share accounts and invest in the shares of A-share listed companies: (i) PRC citizens; (ii) residents of Hong Kong, Taiwan and Macao working and residing in the PRC; (iii) investors and other special institutions qualified as PRC legal persons, such as securities companies, insurance companies, securities investment funds, social security funds, etc.; (iv) qualified foreign institutional investors approved by the CSRC (i.e., QFII); or (v) foreign strategic investors approved by or registered with the Ministry of Commerce of the PRC. As for Qualified Investors who are existing shareholders of the Company, there is currently no legal basis and operational rules for the distribution of shares directly by CRCHI to the shareholders of the Company. Further, according to the Securities Law of the People's Republic of China 《( 中 華 人 民 共 和 國 證 券 法》), Measures for the Registration and

Administration of the Initial Public Offering of Shares on the Science and Technology Innovation Board (Trial) 《( 科 創 板 首 次 公 開 發 行 股 票 註 冊 管 理 辦 法（試

行)》), Measures for the Administration of the Offering and Underwriting of Shares

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《( 證 券 發 行 與 承 銷 管 理 辦 法》), Measures for the Implementation of Offering

and Underwriting of Shares on the Science and Technology Innovation Board of the Shanghai Stock Exchange 《( 上海證券交易所科創板股票發行與承銷實施辦法》)

and other relevant laws and regulations, save as special circumstances (i.e. not less than 50% of shares offered under the placing tranche shall be first placed with publicly offered funds, social security funds, pension, enterprise annuity funds established in accordance with the Measures for the Administration of Enterprise Annuity Funds 《( 企 業 年 金 基 金 管 理 辦 法》) and insurance funds that satisfy the provisions of the Measures for the Administration of the Utilization of Insurance Funds 《( 保 險 資 金 運 用 管 理 辦 法》)and other relevant provisions), no preferential allocations of the shares shall be made to any specific persons on the ground that all investors shall be treated equally.

Given the above PRC legal impediments, it is not feasible for the Company to comply with Paragraph 3(f) of Practice Note 15 of the Listing Rules in connection with the Proposed Spin-off. In addition, the Company expected the highest applicable percentage ratio in respect of the Proposed Spin-off will be less than 25%. As such, the Proposed Spin-off is not a material transaction and does not require shareholders' approval under the Listing Rules. Accordingly, the Company has applied for, and the Stock Exchange has granted, a waiver from strict compliance with the requirement of Paragraph 3(f) of Practice Note 15 of the Listing Rules.

REASONS FOR AND BENEFIT OF THE PROPOSED SPIN-OFF

The Board is of view that the Proposed Spin-off and the listing of CRCHI on the Science and Technology Innovation Board contribute to promoting its leap-forward development, making the equipment manufacturing segment of the Company bigger and stronger and further achieving the business concentration, the improvement of science and technology innovation ability and specialized operating level of the Company. CRCHI is a subsidiary of the Company and mainly engaged in the design, research and development, manufacturing and sale of tunneling machine equipment, rail transit equipment and special professional equipment and has achieved highly market-oriented and professional operating by focusing on product research and development and leveraging on automatic and intelligent technology to constantly enrich its product category, optimize and upgrade its product capability and enhance its research and development ability and market competitiveness. As a result, the Proposed Spin-off of CRCHI provides a relatively strong business reasonableness. As a subsidiary of the Company engaging specially in high-end equipment manufacturing, CRCHI keeps high business independency from other business sectors of the Company. As a leading enterprise in domestic high-end equipment manufacturing, the listing of CRCHI contributes to its continuous enhancement of production and R&D ability, the improvement of technology and innovation ability, the retention and attraction of excellent talents to satisfy the future strategic layout and development. As a result,

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it is necessary for the Company to spin off CRCHI to the Science and Technology Innovation Board of SSE to further consolidate the core competitiveness of CRCHI in high-end equipment manufacturing area and promote the sustainable development of the Company.

After taking the above reasons into account, the Board is of view that the Proposed Spin-off and the non-provision of an assured entitlement in relation to the Proposed Spin-off are fair and reasonable, and in the interest of the Company and its shareholders as a whole.

The Company will make further announcement(s) in respect of the Proposed Spin-off in due course or in accordance with the applicable requirements of the Listing Rules.

Shareholders of the Company and potential investors should note that, the Proposed Spin-off is subject to, among other things, obtaining approval(s) from the relevant PRC regulatory authorities in accordance with all applicable regulations and suitable market conditions, thus may or may not materialise. Shareholders and potential investors are therefore advised to exercise caution when dealing in the shares of the Company.

By order of the Board

China Railway Construction Corporation Limited

CHEN Fenjian

Chairman

Beijing, the PRC

17 February 2020

As at the date of this announcement, the board of directors comprises Mr. CHEN Fenjian (Chairman and Executive Director), Mr. ZHUANG Shangbiao (President and Executive Director), Mr. CHEN Dayang (Executive Director), Mr. LIU Ruchen (Executive Director), Mr. WANG Huacheng (Independent Non-executive Director), Mr. Patrick SUN (Independent Non-executive Director), Mr. CHENG Wen (Independent Non-executive Director) and Ms. Amanda Xiao Qiang LU (Independent Non-executive Director).

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