CITIC : Discloseable Transaction - Disposal of Interests in CITIC Dicastal

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.

DISCLOSEABLE TRANSACTION

DISPOSAL OF INTERESTS IN CITIC DICASTAL

On 13 December 2019, the Company's indirect wholly-owned subsidiaries CITIC Industrial and Industrial Ningbo entered into the Share Transfer Agreement with the Investors upon the completion of the public tender procedure on the CBEX. Pursuant to such agreement, CITIC Industrial and Industrial Ningbo agreed to sell and the Investors agreed to purchase the 57.89% equity interests in CITIC Dicastal at a consideration of RMB 5,500,000,000.27. Upon completion of the Disposal, the financial results of CITIC Dicastal will no longer be consolidated into the accounts of the Group.

The highest applicable ratio in respect of the Disposal is more than 5% but less than 25%. Therefore, the Disposal constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules, and is subject to the notification and announcement requirements under the Listing Rules.

INTRODUCTION

We refer to the announcements of CITIC Limited (the "Company", together with its subsidiaries, the "Group") dated 29 August 2019 and 11 November 2019, in relation to the Proposed Reorganization of CITIC Dicastal Co., Ltd. ("CITIC Dicastal"), an indirect wholly-owned subsidiary of the Company, and the public tender on China Beijing Equity Exchange ("CBEX"). Unless the context requires otherwise, capitalised terms used in this announcement shall have the same meanings as those defined in the abovementioned announcements.

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On 9 December 2019, the Tendering Period having ended and after completion of the procedures of the Tender, a consortium of Aluminum Alliances Limited ("Aluminum Alliances"), Shanghai Yunjian Enterprise Management Consulting Partnership (Limited Partnership) ("Shanghai Yunjian"), China Structural Reform Fund Corporation Limited ("China Reform Fund"), Chongqing Demao Phase I Equity Investment Fund Partnership (Limited Partnership) ("Demao Fund"), CICC Jiatai Equity Investment Fund Partnership II (Tianjin) (Limited Partnership) ("CICC Jiatai"), ITOCHU Corporation ("ITOCHU"), Anhui Transportation Holding-Goldstone M&A Fund Partnership (Limited Partnership) ("Transportation Goldstone"), and Three Gorges and Goldstone (Wuhan) Equity Investment Fund Partnership (Limited Partnership) ("Three Gorges and Goldstone") (these eight institutions collectively referred to as the "Investors", and each an "Investor") was confirmed as the only qualified transferee in accordance with the applicable rules of the CBEX.

As such, the Company's indirect wholly-owned subsidiaries CITIC Industrial Investment Group Corp., Ltd. ("CITIC Industrial") and CITIC Industrial Investment Ningbo Holding Ltd. ("Industrial Ningbo") entered into a share transfer agreement (the "Share Transfer Agreement") with the Investors in respect of the transfer of the 57.89% equity interests in CITIC Dicastal (the "Target Interest"), and pursuant to the Share Transfer Agreement, CITIC Industrial and Industrial Ningbo agreed to sell and the Investors agreed to purchase the Target Interest at a consideration of RMB5,500,000,000.27 (the "Disposal").

PRINCIPAL TERMS OF THE SHARE TRANSFER AGREEMENT

Date:

13 December 2019

Parties:(a) CITIC Industrial and Industrial Ningbo (the "Sellers"); and

1. Aluminum Alliances, Shanghai Yunjian, China Reform Fund, Demao Fund, CICC Jiatai, ITOCHU, Transportation Goldstone and Three Gorges and Goldstone (the "Investors")

Subject Matter:	the 57.89% equity interest in CITIC Dicastal
Consideration:	RMB5,500,000,000.27 (the "Consideration")
Proportion of the
Target Interest and		Equity interests in	Consideration to be
the Consideration	Name of the Investors	CITIC Dicastal to
paid (RMB)
among the Investors:		be purchased
	Aluminum Alliances	26.32%	2,499,999,999.24
	Shanghai Yunjian	7.37%	699,999,997.67
	China Reform Fund	5.37%	509,999,998.92
	Demao Fund	5.37%	509,999,998.92
	CICC Jiatai	5.26%	499,999,996.96
	ITOCHU	3.16%	299,999,996.25

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		Transportation Goldstone		2.95%		280,000,016.42
		Three Gorges and		2.11%		199,999,995.89
		Goldstone
		Total		57.89%*		5,500,000,000.27
		*Note: The percentages of equity interests in CITIC Dicastal to be purchased
		by the Investors have been rounded.
Payment:	(a) Prior to the execution of the Share Transfer Agreement, the Investors have
	paid RMB550,010,000.00 as a deposit to the CBEX according to the
		bidding procedure of the CBEX; and
	(b) Such deposit is applied as part payment of the Consideration for the
		Target Interest. Each Investor shall pay the outstanding portion of the
		Consideration payable by it to a designated settlement account of the
		CBEX in one lump sum within five business days after the execution of
		the Share Transfer Agreement.
Completion:		The transaction shall be closed on the date of the satisfaction or waiver of all
		the conditions precedent (as mentioned below) (the "Closing Date").
Conditions		The completion of the Share Transfer Agreement is conditional upon the
Precedent:		fulfilment or written waiver of the following conditions:

1. there not having occurred in respect of each of CITIC Dicastal and the Sellers any material adverse change in their respective financial conditions, results of operations, assets, regulatory status, business or prospects, and there being reasonable expectation that no event would occur which may cause any such material adverse change;
2. the PRC counsel of the Sellers having provided a formal signed and sealed legal opinion opining on the legality, the relevant approvals required for the Disposal and the enforceability of the transaction documents under the relevant PRC laws;
3. the Sellers having issued a written notice to the Investors confirming that all relevant conditions required for the payment for the Target Interest have been fulfilled;
4. the Investors having fully paid the outstanding portion of the Consideration for the purchase of the Target Interest to the CBEX; and
5. a property transaction voucher for the share transfer having been issued by the CBEX.

Among the abovementioned conditions precedent, (a) to (c) may be waived by the Investors by written notice, while (d) and (e) may be waived by the Sellers by written notice.

Long Stop Date: If the transaction fails to close within 20 business days from the date of execution of the Share Transfer Agreement or other date agreed by the parties in writing (the "Long Stop Date"), any Investor or Seller who is not in breach of any obligation before the Long Stop Date may terminate the agreement by sending written notice to the other party.

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Other Terms:	(a)	The Sellers and the Investors agreed to implement the CITIC Dicastal
	Employee Stock Ownership Plan (the "ESOP") by way of non-public
		agreement to subscribe for new shares by the employee shareholding
		vehicle(s) for the ESOP before 31 December 2019, in the amount of not
		more than 103,754,879 shares and at the same price per share as in the
		Share Transfer Agreement (corresponding to not more than 5% of the
		share capital of CITIC Dicastal as enlarged by the ESOP); and
	(b)	Save with the consent of CITIC Dicastal and the Sellers, the Investors are
		not to directly or indirectly transfer any interests in their CITIC Dicastal
		shares, within five years after the date of completion of the transaction or
		the first date of offering of a qualified initial public offering of CITIC
		Dicastal (whichever is earlier), to any automobile manufacturing or auto
		parts manufacturing enterprise, or its related parties controlling such
		enterprise, or any related parties controlled by the said enterprise, where
		such enterprise has a total consolidated income of more than RMB300
		million in the previous year, nor are the Investors to engage in any
		dealings in shares or interests which would cause any third party other
		than the Sellers, the employee shareholding vehicles, CITIC Dicastal and
		enterprises under its control to have actual control of 25% (25 per cent) or
		more of the share capital of CITIC Dicastal.

BASIS OF CONSIDERATION

The consideration under the Share Transfer Agreement, being RMB5,500,000,000.27, was determined in accordance with the bidding process of the CBEX. The listed price of the Target Interest in the Tender was RMB5,500,000,000, which was determined based on the

valuation report in respect of the 100% equity interest of CITIC Dicastal (the "Valuation Report") as at 31 December 2018 (the "Reference Date") issued by an independent valuer

China Enterprise Appraisals Co., Ltd. (the "Valuer") and filed with the Ministry of Finance of

the People's Republic of China.

The valuation of CITIC Dicastal in the Valuation Report was prepared by the Valuer based on income approach, which took into account the cash flow projection of the businesses carried on by CITIC Dicastal, and as such, constitutes a profit forecast under Rule 14.61 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the

"Listing Rules").

FINANCIAL INFORMATION OF CITIC DICASTAL

Based on the audited consolidated financial statements of CITIC Dicastal for the years ended 31 December 2017 and 2018 prepared in accordance with the PRC Generally Accepted Accounting Principles (the "PRC GAAP"), the net profits before and after taxation of CITIC Dicastal are set out below.

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	For the year ended	For the year ended
	31 December 2017	31 December 2018
	(RMB million)
Net profit before taxation	1,191.5	1,433.2
Net profit after taxation	1,021.2	1,204.9

The audited net assets of CITIC Dicastal as at 31 December 2018 was approximately RMB6,907 million in accordance with the PRC GAAP, and therefore the corresponding book value of the Target Interest was approximately RMB3,999 million. The value of 100% equity interest of CITIC Dicastal as at 31 December 2018 was approximately RMB9,481 million as set out in the Valuation Report, and correspondingly, the valuation for the Target Interest was approximately RMB5,489 million. As at 30 June 2019, the unaudited net assets of CITIC Dicastal was approximately RMB7,418 million, and therefore the corresponding book value of the Target Interest was approximately RMB4,294 million.

REASONS FOR AND BENEFITS OF THE DISPOSAL

Introduction of the Investors would bring expertise, knowledge and networks to CITIC Dicastal. The Disposal crystallises the valuation of CITIC Dicastal, and also enables the Company to realise its investment in CITIC Dicastal while remaining invested to capture CITIC Dicastal's future upside.

The directors of the Company believe that the terms of the Share Transfer Agreement and the transactions thereunder are fair and reasonable, on normal commercial terms and in the interests of the shareholders as a whole.

USE OF PROCEEDS AND FINANCIAL EFFECTS OF THE DISPOSAL

The Company intends to use the proceeds from the Disposal, for the daily operations of CITIC Industrial.

Subject to the review of the Company's auditor, it is expected that as at 31 December 2019, based on the unaudited management accounts of CITIC Industrial and Industrial Ningbo and with reference to the book value of the Target Interest, the Company currently expects to record a gain of approximately RMB1.39 billion, arising from the Disposal.

Upon completion of the Disposal, CITIC Dicastal will cease to be a subsidiary of the Company. The financial results of CITIC Dicastal will no longer be consolidated into the accounts of the Group.

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GENERAL INFORMATION

The Company

CITIC Limited is one of China's largest conglomerates. Among its diverse global businesses, CITIC Limited focuses primarily on financial services, resources and energy, manufacturing, engineering contracting and real estate. CITIC Limited enjoys leading market positions in sectors well matched to China's economy. CITIC's rich history, diverse platform and strong corporate culture across all businesses ensure that CITIC Limited is unrivalled in capturing opportunities arising in China and overseas. CITIC Limited is listed on the Stock Exchange, where it is a constituent of the Hang Seng Index.

CITIC Industrial

CITIC Industrial is a limited liability company incorporated in China and a wholly-owned subsidiary held by the Company through its direct wholly-owned subsidiary CITIC Corporation Limited. CITIC Industrial is engaged in the capital operation in production investment.

Industrial Ningbo

Industrial Ningbo is a limited liability company incorporated in China and a direct wholly- owned subsidiary of CITIC Industrial. Industrial Ningbo is engaged in the capital operation in production investment.

Aluminum Alliances

Aluminum Alliances is a limited liability company incorporated in Hong Kong, China and is primarily engaged in production investment within Asia.

Shanghai Yunjian

Shanghai Yunjian is a limited liability partnership incorporated in China for the purpose of investment in CITIC Dicastal by Kunshan Youbai Asset Management Co, Ltd, which is engaged in asset and investment management.

China Reform Fund

China Reform Fund is a limited liability company incorporated in China by the State-owned Assets Supervision and Administration Commission of the State Council of China for the investment management in relation to the structural reform of China's state-owned enterprises.

Demao Fund

Demao Fund is a limited liability partnership incorporated in China for the purpose of investment in CITIC Dicastal by China South Demao Capital Management Co, Ltd, which is engaged in asset and investment management.

CICC Jiatai

CICC Jiatai is a limited liability partnership incorporated in China for the purpose of investment in CITIC Dicastal by CICC Jiameng (Tianjin) Equity Investment Fund

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Management Co., Ltd, which is engaged in asset and investment management.

ITOCHU

ITOCHU is a limited liability corporation incorporated in Japan. Founded in 1858, it ranked 65th in the Fortune 500 in 2019. As of the date of this announcement, ITOCHU holds 50% equity interest in Chia Tai Bright Investment Company Limited, which holds 20% of the issued shares of the Company.

Transportation Goldstone

Transportation Goldstone is a limited liability partnership incorporated in China for the purpose of investment in CITIC Dicastal by Anhui Transportation Holding-Goldstone Fund Management Co., Ltd, which is engaged in asset and investment management.

Three Gorges and Goldstone

Three Gorges and Goldstone is a limited liability partnership incorporated in China for the purpose of investment in CITIC Dicastal by Three Gorges and Goldstone Investment Management Co., Ltd, which is engaged in asset and investment management.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiry, unless otherwise stated above, the Investors and their respective ultimate beneficial owners are third parties independent of the Company and connected persons (as defined in the Listing Rules) to the Company.

CITIC Dicastal

CITIC Dicastal is a limited liability company incorporated under the laws of China and is one of the world's largest aluminum automotive parts manufacturers with products including wheels and lightweight cast components for powertrains, chassis and body systems.

LISTING RULES IMPLICATIONS

The highest applicable ratio in respect of the Disposal is more than 5% but less than 25%. Therefore, the Disposal constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules, and is subject to the notification and announcement requirements under the Listing Rules.

PRINCIPAL ASSUMPTIONS OF THE VALUATION OF CITIC DICASTAL

The valuation of CITIC Dicastal was prepared based on the following principal assumptions:

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General Assumptions

1. There are no material changes in the current laws, regulations and policies of the State and the national macro economy of the PRC as well as in the political, economic and social environments of the regions where the parties to the proposed transaction are located;
2. CITIC Dicastal continues to operate in line with the actual status of the assets evaluated on the Reference Date;
3. There are no material changes after the Reference Date in the applicable interest rate, exchange rate, taxation basis and rates and policy imposed charges related to CITIC Dicastal;
4. Management of CITIC Dicastal is responsible, stable and capable of performing their duties after the Reference Date; and
5. No force majeure and unforeseen factors after the Reference Date have a significant adverse impact on CITIC Dicastal.

Specific Assumptions

1. The accounting policies to be adopted by CITIC Dicastal in the future are generally consistent in material respects with the accounting policies adopted in preparing this report after the Reference Date;
2. There is no change after the Reference Date in the current business scope and management methods of CITIC Dicastal on the basis of the existing management methods and management level;
3. The cash inflow of CITIC Dicastal is the average inflow, and the cash outflow is the average outflow after the Reference Date;
4. CITIC Dicastal continues to operate after the Reference Date based on the current operating mode, management model and product structure and continues to operate after the Reference Date;
5. The products manufactured or sold by CITIC Dicastal are within the scope of their qualifications, and there will be no major quality defects or major technical failures in the future;
6. In the future, the qualifications of CITIC Dicastal as a high-tech enterprise will be able to be extended after expiration, and it will still enjoy the preferential income tax policy, and the applicable income tax is still 15%; and
7. The valuation did not take into account the impact on the valuation result of future mortgage, guarantee, litigation and other issues that may be incurred in the future, as well as the impact of additional price imposed by any special transaction methods.

CONFIRMATIONS

PricewaterhouseCoopers, acting as the Company's reporting accountant for purposes of Rule 14.62(2) of the Listing Rules, has examined the calculations of the discounted future estimated cash flows on which the valuation of CITIC Dicastal was based.

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China Securities (International) Corporate Finance Company Limited, acting as the Company's financial advisers for purposes of Rule 14.62(3) of the Listing Rules, has confirmed that they are satisfied that the valuation of CITIC Dicastal has been made by the Directors after due and careful enquiry.

A report from PricewaterhouseCoopers dated 13 December 2019 in compliance with Rule 14.62(2) of the Listing Rules and a letter from the China Securities (International) Corporate Finance Company Limited dated 13 December 2019 in compliance with Rule 14.62(3) of the Listing Rules have been submitted to The Stock Exchange of Hong Kong Limited, the texts of which are included in Appendix I and Appendix II to this announcement, respectively.

INFORMATION ON THE EXPERTS

The following are the qualification of the experts who have given their opinion and advice included in this announcement:

Name	Qualifications

PricewaterhouseCoopers

China Securities (International)

Corporate Finance Company

Limited

Certified Public Accountants

Licensed corporation under the Securities and Futures Ordinance for type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities

As at the date of this announcement, each of the experts listed above does not have any shareholding, directly or indirectly, in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate person to subscribe for securities in any member of the Group.

Each of the experts listed above has given and has not withdrawn its consent to the publication of this announcement with inclusion of its report and/or all references to its name in the form and context in which it appears.

By Order of the Board

CITIC Limited

Chang Zhenming

Chairman

Hong Kong, 13 December 2019

As at the date of this announcement, the executive directors of CITIC Limited are Mr. Chang Zhenming (Chairman), Mr. Wang Jiong and Ms. Li Qingping; the non-executive directors of CITIC Limited are Mr. Song Kangle, Ms. Yan Shuqin, Mr. Liu Zhuyu, Mr. Peng Yanxiang, Mr. Liu Zhongyuan and Mr. Yang Xiaoping; and the independent non-executive directors of CITIC Limited are Mr. Francis Siu Wai Keung, Dr. Xu Jinwu, Mr. Anthony Francis Neoh, Mr. Shohei Harada and Mr. Gregory Lynn Curl.

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APPENDIX I INDEPENDENT REPORTING ACCOUNTANT'S ASSURANCE REPORT ON THE CALCULATIONS OF DISCOUNTED FUTURE ESTIMATED CASH FLOWS IN CONNECTION WITH THE BUSINESS VALUATION OF CITIC DICASTAL CO., LTD.

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APPENDIX II LETTER FROM CHINA SECURITIES (INTERNATIONAL) CORPORATE FINANCE COMPANY LIMITED IN RELATION TO THE PROFIT FORECAST

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