Beijing Capital International Airport : ANNOUNCEMENT CONTINUING CONNECTED TRANSACTIONS 2019 TRADEMARK LICENSE AGREEMENT

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ANNOUNCEMENT

CONTINUING CONNECTED TRANSACTIONS 2019 TRADEMARK LICENSE AGREEMENT

2019 TRADEMARK LICENSE AGREEMENT

Reference is made to the announcement of the Company dated 30 November 2016 in respect of the 2016 Trademark License Agreement. The 2016 Trademark License Agreement has expired on 30 November 2019. As the parties intend to continue to carry out transactions of a similar nature from time to time after 30 November 2019, the Company entered into the 2019 Trademark License Agreement as a renewal agreement.

The Board announces that, on 29 November 2019, the Company and the Parent Company entered into the 2019 Trademark License Agreement, pursuant to which the Parent Company agreed to grant the Company the right to use the Trademarks in the PRC for a term commencing from 1 December 2019 to 30 November 2022.

LISTING RULES IMPLICATIONS

The Parent Company is the controlling shareholder of the Company, holding approximately 58.96% of the issued share capital of the Company as at the date of this announcement. The Parent Company is therefore a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the transactions contemplated under the 2019 Trademark License Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As the highest of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the transactions contemplated under the 2019 Trademark License Agreement is more than 0.1% but less than 5%, the transactions contemplated under the 2019 Trademark

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License Agreement are therefore subject to the reporting, announcement and annual review requirements, but exempt from the Independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.

BACKGROUND

Reference is made to the announcement of the Company dated 30 November 2016 in respect of the 2016 Trademark License Agreement. The 2016 Trademark License Agreement has expired on 30 November 2019. As the parties intend to continue to carry out transactions of a similar nature from time to time after 30 November 2019, the Company entered into the 2019 Trademark License Agreement as a renewal agreement.

2019 TRADEMARK LICENSE AGREEMENT

Date

29 November 2019

Parties

1. The Company as licensee; and
2. The Parent Company as licensor.

Use of the Trademarks

Pursuant to the 2019 Trademark License Agreement, the Parent Company agreed to grant the Company the non-exclusive right to use the Trademarks in the PRC in the goods or services under the registered classes of the Trademarks.

Term

The term of the 2019 Trademark License Agreement commences from 1 December 2019 and ends on 30 November 2022.

Consideration

The usage fee payable by the Company to the Parent Company for the right of use of Trademarks is as follows:

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Period	Consideration
From 1 December 2019 to 31 December 2019	1% of the audited total annual operating revenue
	of the Company for the financial year ending
	31 December 2019 x 1/12
For the year ending 31 December 2020	1% of the audited total annual operating revenue
	of the Company for the financial year ending
	31 December 2020
For the year ending 31 December 2021	1% of the audited total annual operating revenue
	of the Company for the financial year ending
	31 December 2021
For the eleven months ending 30 November	1% of the audited total annual operating revenue
2022	of the Company for the financial year ending
	31 December 2022 x 11/12
Payment

The usage fee for the Trademarks for the one month ending 31 December 2019 shall be paid within seven business days after the publication of the 2019 annual audit report of the Company. For each of the two years ending 31 December 2020 and 31 December 2021, the Company shall pay the usage fee for the Trademarks within the first seven business days of each quarter, with the amount of usage fee to be tentatively calculated based on the revenue of the Company as recorded in its accounts for the preceding quarter, subject to adjustment after the relevant data has been published in the annual audit report of the Company. The usage fee for the Trademarks for the eleven months ending 30 November 2022 shall be paid within seven business days after the publication of the 2022 annual audit report of the Company.

Historical Figures

The usage fees paid or payable by the Company for the transactions contemplated under the 2016 Trademark License Agreement in respect of each of the three financial years ended 31 December 2016, 31 December 2017 and 31 December 2018, and in respect of the ten months ended 31 October 2019 were approximately RMB81,668,000 (audited), RMB83,601,000 (audited), RMB90,326,000 (audited) and RMB93,854,000 (unaudited), respectively.

Annual Caps

It is expected that the maximum aggregate annual usage fee payable by the Company to the Parent Company under the 2019 Trademark License Agreement will be as follows:

RMB

For the one month ending 31 December 2019

10,000,000

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			RMB
For the year ending	31	December 2020	105,000,000
For the year ending	31	December 2021	95,000,000
For the eleven months ending 30 November 2022	95,000,000

The above annual caps are based on the anticipated annual revenue from the principal business of the Company for the financial years between 2019 and 2022.

Shareholders are reminded that the above annual caps are best estimates made by the Company on the maximum transaction amount based on currently available information. The above annual caps have not and shall not be deemed to have any direct correlation with the financial performance or potential financial performance of the Company.

Pricing Policy

The basis for the calculation of usage fee under the 2019 Trademark License Agreement as set out in the above section headed "Consideration" is arrived at after arm's length negotiation between the parties with reference to (i) the usage fee charged by other licensors for similar transactions; and (ii) the pricing model for the provision of similar services in the market.

The Company assessed the reasonableness and fairness of the consideration with reference to analysis of the pricing model for the provision of similar services in the market. Under the current market practice, the pricing model for granting the right of use of trademarks to listed companies is mainly by payment of usage fee by the licensee, which is calculated based on certain percentage (ranging from 1% to 3%) of the total revenue from the principal business of the licensee for the current year or the preceding financial year.

In view of the above market practice of the pricing model for the provision of similar services, the Company considers that the basis of determining the consideration under the 2019 Trademark License Agreement is within normal business practice and is fair and reasonable.

REASONS FOR AND BENEFITS OF ENTERING INTO THE 2019 TRADEMARK LICENSE AGREEMENT

Since about December 2010, the Company has been adopting the Trademarks for all its aviation businesses, non-aviation businesses, corporate promotions and other business activities at the Beijing Airport. As the Trademarks have been widely adopted in all businesses and activities managed and operated by the Company and are generally known and recognized by the public, the Trademarks have become an important means of promoting the Company's brand and image as well as a key icon in all of the Company's external promotion and marketing activities. The continual use of the Trademarks will ensure the continuity of the brand and image of the Company and the Beijing

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Airport, thereby ensuring that the services and businesses of the Company will be well recognized by the market. This will also be an important guarantee of the Company's competitiveness and efficiency.

Further, as the Parent Company has established its brand and international image, and the ranking of the Beijing Airport has been continuously improving, the Beijing Airport has considerable brand value in the global airport industry.

In view of the above, the Company entered into the 2019 Trademark License Agreement with the Parent Company to continue to use the Trademarks.

In light of the above, the Directors (including the independent non-executive Directors) are of the view that the terms of the 2019 Trademark License Agreement are normal commercial terms, fair and reasonable and entered into in the ordinary and usual course of business of the Company, and the transactions contemplated under the 2019 Trademark License Agreement are in the interest of the Shareholders as a whole and on terms not less favourable to the Company than the terms available from or to other independent third parties.

BOARD'S APPROVAL

The 2019 Trademark License Agreement was approved by the Board. Since no Director has material interest in the transactions contemplated under the 2019 Trademark License Agreement, none of the Directors has abstained from voting at the Board meeting to approve the 2019 Trademark License Agreement and the transactions contemplated thereunder.

GENERAL

The Company is principally engaged in the operation of the Beijing Airport.

The Parent Company is principally engaged in the provision of ground handling services for domestic and international aviation enterprises, including supply of water, electricity, steam and energy, airport management services and counter services. It is a state-owned enterprise under CAAC.

LISTING RULES IMPLICATIONS

The Parent Company is the controlling shareholder of the Company, holding approximately 58.96% of the issued share capital of the Company as at the date of this announcement. The Parent Company is therefore a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the transactions contemplated under the 2019 Trademark License Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

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As the highest of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the transactions contemplated under the 2019 Trademark License Agreement is more than 0.1% but less than 5%, the transactions contemplated under the 2019 Trademark License Agreement are subject to the reporting, announcement and annual review requirements, but exempt from the Independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.

DEFINITIONS

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

"2016 Trademark License	the trademark license agreement entered into between the Company
Agreement"	and the Parent Company on 30 November 2016 in relation to the
	grant of right by the Parent Company to the Company to use the
	Trademarks in the PRC from 1 December 2016 to 30 November
	2019, details of which are set out in the announcement of the
	Company dated 30 November 2016
"2019 Trademark License	the trademark license agreement dated 29 November 2019 entered
Agreement"	into between the Company and the Parent Company in relation to
	the grant of right by the Parent Company to the Company to use the
	Trademarks in the PRC from 1 December 2019 to 30 November
	2022
"associate(s)"	has the meaning ascribed to it under the Listing Rules
"Beijing Airport"	Beijing Capital International Airport
"Board"	the board of Directors
"CAAC"	Civil Aviation Administration of China
"Company"	Beijing Capital International Airport Company Limited, a sino-
	foreign joint stock limited company incorporated in the PRC with
	limited liability, and the H Shares of which are listed on the Stock
	Exchange
"connected person"	has the meaning ascribed to it under the Listing Rules
"connected transaction(s)"	has the meaning ascribed to it under the Listing Rules
"controlling shareholder"	has the meaning ascribed to it under the Listing Rules
"Director(s)"	the director(s) of the Company

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"H Share(s)"	overseas listed foreign shares of nominal value of RMB1.00 each in
	the registered capital of the Company
"Independent Shareholders"	the Shareholders other than the Parent Company, its associates and
	any other Shareholder who has a material interest in the
	transactions contemplated under the 2019 Trademark License
	Agreement
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange
"Parent Company"	Capital Airports Holding Company* (首都機場集團公司), an
	enterprise established in the PRC and the controlling shareholder
	of the Company
"Parties"	the parties to the 2019 Trademark License Agreement
"PRC"	the People's Republic of China
"RMB"	Renminbi, the lawful currency of the PRC
"Share(s)"	share(s) of RMB1.00 each in the capital of the Company
"Shareholders"	holders of the Shares
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Trademarks"	the trademarks which are registered with the Trademark Office of
	the State Administration for Industry and Commerce of the PRC
	(中國國家工商行政管理總局商標局) in nine classes under the
	name of and are beneficially owned by the Parent Company
"%"	per cent
	By order of the Board
	Meng Xianwei
	Secretary to the Board
Beijing, the PRC
29 November 2019

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As at the date of this announcement, the Directors of the Company are:

Executive Directors:	Mr. Liu Xuesong, Mr. Han Zhiliang and Ms. Gao
	Lijia
Non-executive Directors:	Mr. Gao Shiqing, Mr. Yao Yabo and Mr. Ma Zheng
Independent Non-executive Directors:	Mr. Japhet Sebastian Law, Mr. Jiang Ruiming, Mr.
	Liu Guibin and Mr. Zhang Jiali

An announcement containing details of the matter is available for viewing on the website of Hong Kong Exchanges and Clearing Limited at http://www.hkexnews.hk "Latest Listed Company Information", the website of the Company at http://www.bcia.com.cn and the website of Irasia.com at http://www.irasia.com/listco/hk/bcia.

* For identification purpose only

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