China Eastern Airlines : Overseas Regulatory Announcement Announcement on the Provision of Guarantee for Some Subsidiaries

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 incorporated in the People's Republic of China with limited liability)

(Stock code: 00670)

OVERSEAS REGULATORY ANNOUNCEMENT

ANNOUNCEMENT ON THE PROVISION OF GUARANTEE FOR

SOME SUBSIDIARIES

This overseas regulatory announcement is made pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The Company and all members of the Board warrant that the information set out in this announcement is true, accurate and complete and no false information, misleading statements or material omissions are contained herein.

IMPORTANT NOTICE

			Balance of
			guarantee	Availability
Name of	Debt asset	Amount of	actually	of counter
guaranteed party	ratio (%)	guarantee	provided	guarantee	Guarantor
China United Airlines	64.54%		Guarantee
Co., Ltd. ("China			not provided
United Airlines")			previously		China
Shanghai Eastern	32.29%	The aggregate	Guarantee
	Eastern
Flight Training Co.,		maximum	not provided		Airlines
Ltd. ("Shanghai		previously	No
	limit being	Corporation
Flight Training")
	RMB1 billion			Limited (the
China Eastern	45.33%	Guarantee
		"Company")
Airlines Technology			not provided
Co., Ltd. ("Eastern			previously
Technology")

• Aggregate amount of overdue external guarantee: nil

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1. OVERVIEW OF THE GUARANTEE

On 31 December 2019, the resolution regarding the provision of guarantee by the Company for some of its wholly-owned subsidiaries was considered and approved at the first ordinary meeting of the ninth session of the board of directors of the Company (the "Board"), pursuant to which it was agreed that the Company shall provide guarantee in the total amount of up to RMB1 billion to its three wholly-owned subsidiaries, namely China United Airlines, Shanghai Flight Training and Eastern Technology, or their respective wholly-owned subsidiaries.

1. BASIC INFORMATION OF THE GUARANTEED PARTIES
2. 1. China United Airlines Co., Ltd.
   2. 1. Registered address: Court 1, Western Zone, 6 Jingbei East Road, Fengtai District, Beijing;
      2. Legal representative: Feng Dehua;
      3. Registered capital: RMB1,320 million;
      4. Business scope: domestic (including Hong Kong, Macau and Taiwan) air passenger and cargo transportation business; international air passenger and cargo transportation business to the nearby countries; agency services among airlines companies; the service business in relation to air transportation operations; sales of pre-packaged food (including refrigerated and frozen food); retail of souvenir and items for aviation services; to place both domestic and overseas advertisements on its own media and the agency of advertising business of its branches; ticketing services; warehousing services; corporate management consulting; investment management and asset management; design, production, agency advertising; sales of art pieces, cosmetics, hygiene products, clothing, footwear and bags, cultural items, computers, software and auxiliary equipment, electronic products, household appliances, and jewelry; automobile rental (excluding passenger vehicles with more than 9 seats);
      5. 100% equity interests in China United Airlines are held by the Company;
      6. Financial position of the most recent year and period:

		Unit: RMB
As of	31 December 2018	30 September 2019
Total assets	12,473,699,168	15,846,176,507
Net assets	4,133,664,838	4,845,435,310
Total liabilities	8,340,034,330	11,290,334,262
Current liabilities	4,545,172,746	3,531,934,388

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	January to	January to
For the period from	December 2018	September 2019
Revenue	5,659,583,567	4,579,487,642
Net profit	882,480,661	631,201,853

1. Shanghai Eastern Flight Training Co., Ltd.
2. 1. Registered address: No. 518, Fasai Road, China (Shanghai) Pilot Free Trade Zone;
   2. Legal representative: Shi Fukang;
   3. Registered capital: RMB693.80 million;
   4. Business scope: provision of training for pilots and other flight-related crew, import and export of cargo and technology, leasing of self-owned properties as well as maintenance and research and development of aviation equipment, consultation of aviation industry knowhow (other than training), development and sales of computer software, conference services, leasing of self-owned equipment (other than financial leasing), and sales of flight simulator and components;
   5. 100% equity interests in Shanghai Flight Training are held by the Company;
   6. Financial position of the most recent year and period:

		Unit: RMB
As of	31 December 2018	30 September 2019
Total assets	2,237,260,794	2,196,334,848
Net assets	1,249,836,589	1,461,331,985
Total liabilities	987,424,205	735,002,863
Current liabilities	641,235,387	405,808,886
	January to	January to
For the period from	December 2018	September 2019
Revenue	874,570,390	514,248,345
Net profit	396,713,095	211,495,396

1. China Eastern Airlines Technology Co., Ltd.
2. 1. Registered address: No. 277, Kong Gang San Road, Hongqiao Airport, Changning District, Shanghai;
   2. Legal representative: Feng Liang;
   3. Registered capital: RMB4,300 million;

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1. Business scope: Engineering services, aviation parts supply chain management, consultation, agency and investment business related to maintenance of aircraft, measurement services, product characteristic and property inspection services, maintenance and repair of aircraft/airframe, power devices, and aircraft components other than complete engine/propeller, as well as special-purpose operations; provision of training on civil aviation aircraft and repairing of civil aviation aircraft components, real estate leasing operation, and import and export of cargo and technology;
2. 100% equity interests in Eastern Technology are held by the Company;
3. Financial position of the most recent year and period:

		Unit: RMB
As of	31 December 2018	30 September 2019
Total assets	5,702,287,880	7,892,067,174
Net assets	3,938,928,878	4,088,990,143
Total liabilities	1,763,359,001	3,803,077,031
Current liabilities	1,341,921,001	3,303,570,341
	January to	January to
For the period from	December 2018	September 2019
Revenue	770,763,072	6,170,515,850
Net profit	-62,484,600	150,061,265

III. PARTICULARS OF THE GUARANTEE

Name of	Amount of	Type of	Method of	Term of
guaranteed party	guarantee	guarantee	guarantee	guarantee	Use
China United	The	Credit	Joint liability	Same as the	Capital
Airlines	aggregate	guarantee	guarantee	period of	requirements
	maximum			the subject	in daily
Shanghai Flight
limit being			obligations of	operations,
Training
RMB1			the respective	transformation
Eastern Technology
billion			guaranteed	and
				parties and	development
				shall not
				exceed 10
				years

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IV. OPINION OF THE BOARD

In recent years, as there has been an expansion in the business scale of the Company's subsidiaries, transformation of China United Airlines to becoming a low-cost airline, and the innovation in asset management approach by Eastern Technology which promoted the transformation of protective assets to operational assets, the capital expenditure of each of the Company's subsidiaries has increased. Given the Company's thorough understanding of the operating status, credit standing and debt servicing capability of its subsidiaries, and recognition that their financial risk is under control, the guarantee provided by the Company for its subsidiaries would further enhance the credit standing of its subsidiaries, reduce the finance cost and also secure the facilities required for their production and operation, reform and transformation to facilitate their sustainable and healthy development, thereby uplifting the overall operating level of the Company.

In view of the above, the Board agreed that: the Company shall provide, within the period from the effective date of the resolution to 31 December 2020, guarantee in the total amount of up to RMB1 billion to three wholly-owned subsidiaries, namely China United Airlines, Shanghai Flight Training and Eastern Technology, or their respective wholly- owned subsidiaries. Where the subject obligations are denominated in foreign currencies, the amounts shall be translated into Renminbi at the exchange rates prevailing at the time of provision of the guarantee. The period of guarantee shall be the same as the period of the subject obligations of the respective guaranteed parties and shall not exceed 10 years. The president of the Company shall be authorized to take charge of the detailed implementation thereof, and the implementation progress shall be reported to the Board.

After prior review, the independent non-executive directors of the Company agreed to the Company's provision of guarantee for its subsidiaries and to putting forward the relevant resolution to the Board for its consideration and approval. The independent opinions issued by the independent non-executive directors are as follows: the Company's provision of guarantee for its subsidiaries would be beneficial in enhancing the credit standing of the guaranteed parties and securing the facilities required for their production and operation to facilitate their sustainable and healthy development, and therefore be in the interest of the Company and its shareholders as a whole.

The Board's resolution regarding the provision of guarantee by the Company for some of its subsidiaries has been approved by more than two-thirds of the directors of the Company present in the meeting, in addition to the consent granted by more than half of all directors of the Company. The voting procedures of the meeting complied with laws and regulations, the articles of association of the Company and the rules for procedures of meeting of the Board.

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1. AGGREGATE AMOUNT OF EXTERNAL GUARANTEES AND OVERDUE GUARANTEES

As of the date of this announcement, the Company's external guarantees are for its wholly-owned subsidiaries, including SGD0.5 billion (being a guarantee for the issuance of SGD-denominated bonds), KRW300 billion (being a guarantee for the issuance of KRW-denominated bonds) and RMB2.2 billion, and the aforesaid are in aggregate equivalent to approximately RMB6.527 billion. Such amount in aggregate represents 11% of the latest audited net assets of the Company. There is no overdue guarantee of the Company.

By order of the Board

CHINA EASTERN AIRLINES CORPORATION LIMITED

Wang Jian

Company Secretary

Shanghai, the People's Republic of China

31 December 2019

As at the date of this announcement, the directors of the Company include Liu Shaoyong (Chairman), Li Yangmin (Vice Chairman), Tang Bing (Director), Wang Junjin (Director), Lin Wanli (Independent non-executive Director), Shao Ruiqing (Independent non-executive Director), Cai Hongping (Independent non-executive Director), Dong Xuebo (Independent non- executive Director) and Yuan Jun (Employee Representative Director).

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