Guolian Securities : CONNECTED TRANSACTION UNDERWRITING OF THE ISSUE OF BONDS OF JIANGSU ASSET

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.

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

(Stock Code: 01456)

CONNECTED TRANSACTION

UNDERWRITING OF THE ISSUE OF BONDS OF

JIANGSU ASSET

UNDERWRITING OF THE ISSUE OF BONDS OF JIANGSU ASSET

The Board announces that on 18 December 2019, Jiangsu Asset entered into the Underwriting Agreement with Hua Ying Securities, a wholly-owned subsidiary of the Company. Pursuant to the Underwriting Agreement, Jiangsu Asset has engaged Hua Ying Securities as the lead underwriter in respect of the issuance of Bonds to underwrite the corporate bonds issued by Jiangsu Asset.

LISTING RULES IMPLICATIONS

Guolian Group is the controlling shareholder of the Company and is therefore a connected person of the Company. Jiangsu Asset is a subsidiary held, directly and indirectly, as to 90% by Guolian Group, and is therefore a connected person of the Company. Hua Ying Securities is a wholly-owned subsidiary of the Company. Accordingly, the Transaction under the Underwriting Agreement constitutes a connected transaction of the Group.

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Pursuant to Rule 14A.81 of the Listing Rules, a series of connected transactions will be aggregated and treated as if they were one transaction if they were all completed within a 12-month period or were otherwise related. Reference is made to the announcement of the Company dated 21 December 2018 in relation to, among other things, the underwriting agreement entered into between Guolian Group and Hua Ying Securities. The counterparties of Hua Ying Securities under such agreement and the agreement entered into on this occasion are Guolian Group or its subsidiaries, and the nature of the transactions is the same. Accordingly, such transactions shall be aggregated. As each of the applicable percentage ratios (other than the profits ratio) upon aggregation as calculated in accordance with Chapter 14 of the Listing Rules in respect of such transactions is more than 0.1% but less than 5%, the Underwriting Agreement is subject to the reporting and announcement requirements, but is exempted from the circular and independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

UNDERWRITING OF THE ISSUE OF BONDS OF JIANGSU ASSET

The Board announces that on 18 December 2019, Jiangsu Asset entered into the Underwriting Agreement with Hua Ying Securities, a wholly-owned subsidiary of the Company. Pursuant to the Underwriting Agreement, Jiangsu Asset has engaged Hua Ying Securities as the lead underwriter in respect of the issuance of Bonds to underwrite the corporate bonds issued by Jiangsu Asset.

Further details of the Underwriting Agreement are as follows:

Underwriting Agreement

Date:	18 December 2019
Parties:	(1)	Jiangsu Asset; and
	(2)	Hua Ying Securities
Nature of Transaction:	Jiangsu Asset has engaged Hua Ying Securities as the lead
	underwriter in respect of the issuance of corporate bonds.

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Underwriting	The	issuance size of the Bonds of Jiangsu Asset is not more
Commitment:	than RMB3,000,000,000. Hua Ying Securities is responsible for
	organizing the underwriting syndicate to underwrite the Bonds
	by way of agency sales and will receive a service fee of not
	exceeding RMB18,000,000, which is not more than 0.6% of the
	total issuance size.
Term of the Bonds:	Not exceeding three years
Primary services provided	(1)	Provide the proposal to Jiangsu Asset regarding the overall
by Hua Ying Securities:		plan of the issuance of Bonds, cooperate in the completion
		of the drafting of the prospectus and its summary together
		with other documents related to the issuance of Bonds;
	(2)	Assist Jiangsu Asset in carrying out the filing of the issuance
		of Bonds, custody registration and its listing;
	(3)	Issue the Bonds with no excessive amount nor exceeding
		the time limit, supervise the underwriting activities of each
		member in the underwriting syndicate;
	(4)	Assist Jiangsu Asset in performing its obligations of paying
		interests and redemption to the holders of the Bonds;
	(5)	Underwrite the Bonds issued by Jiangsu Asset by way of
		agency sales.
Conditions Precedent:	The	issuance of Bonds is subject to the approval of relevant
	regulatory authorities and the fulfillment of the relevant conditions
	precedent under the Underwriting Agreement.

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Underwriting Commission

The underwriting fees that Jiangsu Asset agreed to pay to Hua Ying Securities are 0.5% of the actual amount of funds raised from the Bonds plus floating underwriting fee rates, not exceeding 0.6% in total. The Bonds are issued in tranches, and the underwriting fees of each tranche will be received by installments. Based on the maximum underwriting commitment of Hua Ying Securities of RMB3,000,000,000, it is estimated that Hua Ying Securities shall receive a maximum underwriting commission of up to RMB18,000,000 from Jiangsu Asset. The underwriting commission rate is determined after the arm's length negotiation between the parties with reference to the overall market standard.

REASONS FOR AND THE BENEFITS OF ENTERING INTO THE UNDERWRITING AGREEMENT

One of the principal businesses of Hua Ying Securities is underwriting and sponsorship of stocks and bonds in the PRC. The Transaction under the Underwriting Agreement falls within the principal business activities of Hua Ying Securities. The Board considers that such Transaction will have positive income contribution to the Group and is financially beneficial to the Group and the Shareholders as a whole.

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

As the Transaction under the Underwriting Agreement constitutes a connected transaction of the Company, Mr. Hua Weirong and Mr. Yao Zhiyong (being the Directors of the Company) shall abstain from voting in relation to the relevant resolution of the Board due to their positions as the president and vice president of Guolian Group respectively, and Mr. Zhou Weiping (being the Director of the Company) shall abstain from voting in relation to the relevant resolution of the Board due to his position as the chairman of Guolian Trust, a subsidiary of Guolian Group.

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Save as disclosed above, no other Director has a material interest in the Underwriting Agreement and none of the Directors is required to abstain from voting on the relevant Board resolution approving the Underwriting Agreement.

LISTING RULES IMPLICATIONS

Guolian Group is the controlling shareholder of the Company and is therefore a connected person of the Company. Jiangsu Asset is a subsidiary held, directly and indirectly, as to 90% by Guolian Group, and is therefore a connected person of the Company. Hua Ying Securities is a wholly-owned subsidiary of the Company. Accordingly, the Transaction constitutes a connected transaction of the Group.

Pursuant to Rule 14A.81 of the Listing Rules, a series of connected transactions will be aggregated and treated as if they were one transaction if they were all completed within a 12-month period or were otherwise related. Reference is made to the announcement of the Company dated 21 December 2018 in relation to, among other things, the underwriting agreement entered into between Guolian Group and Hua Ying Securities. The counterparties of Hua Ying Securities under such agreement and the agreement entered into on this occasion are Guolian Group or its subsidiaries, and the nature of the transactions is the same. Accordingly, such transactions shall be aggregated. As each of the applicable percentage ratios (other than the profits ratio) upon aggregation as calculated in accordance with Chapter 14 of the Listing Rules in respect of such transactions is more than 0.1% but less than 5%, the Underwriting Agreement is subject to the reporting and announcement requirements, but is exempted from the circular and independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

INFORMATION OF THE GROUP, JIANGSU ASSET AND HUA YING SECURITIES

The Group is engaged in the following principal activities: securities brokerage, securities investment consultancy, financial advisory in relation to securities trading and securities investment activities, proprietary securities trading, securities asset management, agency sale of securities investment fund, margin financing and securities lending, introducing broker for futures companies, agency sale of financial products, underwriting and sponsorship of stocks and bonds, investment management, etc.

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Jiangsu Asset is a company established in the PRC with limited liability, 90% of the shares of which is directly and indirectly held by Guolian Group. Jiangsu Asset is principally engaged in the businesses including bulk transfer of financial non-performing assets in Jiangsu Province.

Hua Ying Securities is a company established in the PRC with limited liability, and is a wholly-owned subsidiary of the Company. Hua Ying Securities is principally engaged in the underwriting and sponsorship of stocks and bonds, etc.

DEFINITIONS

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

"Board"

"Bonds"

"Company"

the board of Directors of the Company

the corporate bonds to be issued by Jiangsu Asset, with an aggregate principal amount not exceeding RMB3,000,000,000

Guolian Securities Co., Ltd.（國聯證券股份有限公司）, a joint stock company incorporated in the PRC with limited liability, the H Shares of which are listed on the main board of the Stock Exchange

"connected person(s)"	has the same meaning ascribed to it under the Listing Rules
"controlling	has the same meaning ascribed to it under the Listing Rules
shareholder(s)"
"Director(s)"	the director(s) of the Company
"Group"	the Company and its subsidiaries

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"Guolian Group"

"Guolian Trust"

"H Share(s)"

"Hong Kong"

"Hua Ying Securities"

"Jiangsu Asset"

"Listing Rules"

"PRC"

Wuxi Guolian Development (Group) Co., Ltd.*（無錫市國 聯發展（集團）有限公司）, a company established in the PRC with limited liability, being the controlling shareholder of the Company

Guolian Trust Co., Ltd.*（國聯信託股份有限公司）, 91.87% of the shares of which is directly and indirectly held by Guolian Group and it directly holds 20.51% of the shares of the Company

overseas listed foreign ordinary share(s) in the share capital of the Company with a nominal value of RMB1.00 each, which is (are) listed on the main board of the Stock Exchange

Hong Kong Special Administrative Region of the PRC

Hua Ying Securities Co., Ltd.*（華英證券有限責任公司）, a company established in the PRC with limited liability, and is a wholly-owned subsidiary of the Company

Jiangsu Asset Management Co., Ltd.*（江蘇資產管理 有限公司）, a company established in the PRC with limited liability, 90% of the shares of which is directly and indirectly held by Guolian Group

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

the People's Republic of China, for the purposes of this announcement, excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

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"RMB"

"Shareholder(s)"

"Stock Exchange"

"Transaction"

"Underwriting Agreement"

Renminbi, the lawful currency of the PRC

the shareholder(s) of the Company

The Stock Exchange of Hong Kong Limited

the transaction conducted under the Underwriting Agreement

the agreement dated 18 December 2019 entered into between Jiangsu Asset and Hua Ying Securities, pursuant to which, Jiangsu Asset has engaged Hua Ying Securities as the lead underwriter in respect of the issuance of corporate bonds

"%"

per cent

• For identification purpose only

By order of the Board

Guolian Securities Co., Ltd.

Yao Zhiyong

Chairman

Wuxi, Jiangsu Province, the PRC

18 December 2019

As of the date of this announcement, the executive director of the Company is Mr. Ge Xiaobo; the non-executive directors of the Company are Mr. Yao Zhiyong, Mr. Hua Weirong, Mr. Zhou Weiping, Mr. Liu Hailin and Mr. Zhang Weigang; and the independent non-executive directors of the Company are Mr. Lu Yuanzhu, Mr. Wu Xingyu and Mr. Chu, Howard Ho Hwa.

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