Cosco Shipping Intrntl Hongkong : Subscription of Equity Interest in Nasurfar Biomaterial Technology (Changshu) Co., Ltd.

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.

(Incorporated in Bermuda with limited liability)

(Stock Code: 00517)

SUBSCRIPTION OF EQUITY INTEREST IN NASURFAR BIOMATERIAL

TECHNOLOGY (CHANGSHU) CO., LTD.*

On 28 May 2018, the Company entered into the Capital Increase and Subscription Agreement pursuant to which the Company conditionally agreed to subscribe for 33% equity interest in the Target Company by way of capital injection into the Target Company in the sum of RMB89,830,000 (equivalent to approximately HK$110,490,900). Upon completion of the Transaction, the Company will hold 33% of the enlarged registered capital of the Target Company.

On 28 May 2018, the Company entered into the Capital Increase and Subscription Agreement with, among others, the Target Company and the Existing Shareholders. Pursuant to the Capital Increase and Subscription Agreement, the Company conditionally agreed to subscribe for 33% equity interest (represented by RMB60,359,600 (equivalent to approximately HK$74,242,300) as registered capital of the Target Company) in the Target Company by way of capital injection into the Target Company in the sum of RMB89,830,000 (equivalent to approximately HK$110,490,900). Upon completion of the Transaction, the Company will hold 33% of the enlarged registered capital of the Target Company. The Existing Shareholders would not participate in this capital increase in the Target Company.

To the best of the Directors'knowledge, information and belief, having made all reasonable enquiries, the Target Company and its ultimate beneficial owners are third parties independent of the Company and its connected persons (as defined in the Listing Rules).

The consideration for the Transaction amounted to RMB89,830,000 (equivalent to approximately HK$110,490,900) was determined by the parties after arm's length negotiation and will be satisfied by the Company in cash in United States dollar equivalent to the consideration amount by internal resources of the Company.

Completion of the Transaction will be conditional upon satisfaction of certain conditions precedent specified in the Capital Increase and Subscription Agreement.

The Target Company is principally engaged in the research and development, production and sales of biochemical products and has been developing a number of product lines principally based on cashew nut shell oil. The Target Company has a production plant in江蘇常熟新材料產業園區(Jiangsu Changshu New Material Industrial Park*) for the production of plant-type surfactants withcashew nut shell oil as the raw material. Such products are environmentally friendly and highly degradable, with little waste water discharge and waste gas emission during the usage, thus featuring special advantages over traditional synthetic-based surfactants like nonylphenol types or other by-products of petroleum industry. Other products of the Target Company include epoxy resins additives for coating production and resin modifiers, etc.

Marine coatings and heavy-duty anti-corrosion coatings are currently among the major business segments of the Company. With the aim of strengthening and enhancing the shipping services industrial cluster, accelerating the consolidation progress of various resources, upgrading the standards of shipping-related industry services, the Company actively seeks for the expansion and development of the upstream and downstream of the current industrial chain. The Target Company is one of the raw material suppliers for marine coatings and heavy-duty anti-corrosion coatings. The Transaction is considered by the Company as an expansion to the upstream for the coatings segment and thereby strengthening the current segment industrial chain of the Company.

Since the applicable ratios set out in Rule 14.07 of the Listing Rules in respect of the Transaction exceed 0.1% but are below 5%, the Transaction does not constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules.

DEFINITIONS

Unless the context requires otherwise, capitalised terms used in this announcement shall have the meanings as follow:-

"Board"	the board of directors of the Company
"Capital Increase and	the capital increase and subscription agreement dated 28 May 2018
Subscription Agreement"	entered into between, among others, the Company, the Target
Company and the Existing Shareholders in relation to the capital
increase and subscription by the Company of 33% equity interest of
the Target Company
"Company	COSCO SHIPPING International (Hong Kong) Co., Ltd., a company
incorporated in Bermuda with limited liability, the shares of which
are listed on the Main Board of the Stock Exchange
"Director(s)"	director(s) of the Company
"Existing Shareholders"	the existing shareholders of the Target Company as at the date of the
Capital Increase and Subscription Agreement, which are third parties
independent of and not connected with the Company
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"Hong Kong"	the Hong Kong Special Administrative Region of the People's
Republic of China
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
Exchange

"PRC"	the People's Republic of China excluding, for the purpose of this
announcement, Hong Kong, the Macau Special Administrative
Region and Taiwan
"RMB"	Renminbi, the lawful currency of the PRC
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Transaction"	the subscription and capital injection to the Target Company by the
Company pursuant to the Capital Increase and Subscription
Agreement
"Target Company"	常熟耐素生物材料科技有限公司(Nasurfar Biomaterial Technology
(Changshu) Co., Ltd.*), a company incorporated in the PRC
"%"	per cent

Unless otherwise defined, for the purpose of this announcement and for the purpose of illustration only, RMB amounts have been translated using the following rates, RMB1.00:HK$1.23. Such translations should not be construed as a representation that the amounts in question have been, could have been or could be converted at any particular rate or at all.

By Order of the Board

COSCO SHIPPING International (Hong Kong) Co., Ltd.

Zhu Jianhui

Vice Chairman and Managing Director

28 May 2018

As at the date of this announcement, the Board comprises nine directors with Mr. Wang Yuhang (Chairman), Mr. Zhu Jianhui (Vice Chairman and Managing Director) and Mr. Liu Gang as executive directors; Mr. Feng Boming, Mr. Chen Dong and Mr. Ren Yongqiang as non-executive directors and Mr. Tsui Yiu Wa, Alec, Mr. Jiang, Simon X. and Mr. Alexander Reid Hamilton as independent non-executive directors.

* For identification purposes only