Haitong International Securities : CONTINUING CONNECTED TRANSACTIONS AND MAJOR TRANSACTION

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.

HAITONG INTERNATIONAL SECURITIES GROUP LIMITED

海通國際證券集團有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 665)

CONTINUING CONNECTED TRANSACTIONS

AND

MAJOR TRANSACTION

Independent Financial Adviser to

the Independent Board Committee and the Independent Shareholders

The Board is pleased to announce that on 21 April 2021 (after trading hours), the Company and HSCL have entered into the Master Agreement, pursuant to which, among others, the Group and the HSCL Group have conditionally agreed to engage in various services, investment and financial transactions with each other for a term of three years from 1 July 2021 to 30 June 2024.

HSCL is the holding company of HTIH, a controlling shareholder of the Company, and therefore HSCL is a connected person of the Company and the Transactions constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules. As the highest of the applicable percentage ratios based on the proposed annual caps in respect of the Transactions exceeds 5%, the Transactions and the proposed annual caps in respect thereof are subject to the reporting, annual review, announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules. Further, as the highest of the applicable percentage ratios in respect of the financial assistance transactions under the Master Agreement is more than 25%, the financial assistance transactions under the Master Agreement also constitute major transactions of the Company under Chapter 14 of the Listing Rules and are therefore subject to the announcement, circular and shareholders' approval requirements thereunder.

A circular containing, among others, the particulars of the Master Agreement together with a letter from the Independent Board Committee, a letter from the Independent Financial Adviser and a notice of the SGM is expected to be despatched to the Shareholders on or before 12 May 2021.

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INTRODUCTION

Reference is made to the 2019 Announcements. Pursuant to the Previous Master Agreement, the Company and HSCL agreed that member(s) of the Group and member(s) of the HSCL Group would conduct the Previous Transactions with each other from 1 January 2019 to 30 June 2021.

On 21 April 2021 (after trading hours), the Company and HSCL have entered into the Master Agreement, pursuant to which, among others, the Group and the HSCL Group have conditionally agreed to engage in various services, investment and financial transactions with each other for a term of three years from 1 July 2021 to 30 June 2024. The Company and HSCL conditionally agreed that each of them will, and will respectively procure member(s) of the Group (to the extent practicable) and member(s) of the HSCL Group (to the extent practicable) to carry out in the ordinary course of business the Transactions with member(s) of the HSCL Group and member(s) of the Group (as the case may be). The principal terms of the Master Agreement are summarised below.

PRINCIPAL TERMS OF THE MASTER AGREEMENT

Date

21 April 2021 (after trading hours)

Parties

1. the Company; and
2. HSCL

Duration

The Master Agreement will, subject to compliance with all relevant Listing Rules requirements by each of the Company and HSCL, be effective for a term of three years from 1 July 2021 to 30 June 2024. For the avoidance of doubt, in respect of any Transactions of which the applicable percentage ratio(s) is less than 5%, they will become effective after issuance of this announcement whereas in respect of any Transactions of which the applicable percentage ratio(s) exceeds 5%, they will be subject to the Independent Shareholders' approval of the Master Agreement.

Nature of transactions

1. Service Transactions
   Brief particulars of the services transactions to be provided (a) by the Group to the HSCL Group and (b) by the HSCL Group to the Group as contemplated under the Master Agreement are summarised below:
2. 1. Brokerage transactions: brokerage services and its ancillary services, (a) provided by the Group in relation to dealing in financial products (including back-to-back transactions) in Hong Kong or overseas, and (b) provided by the HSCL Group in relation to dealing in financial products (including back-to-back transactions) that are permitted by PRC and overseas regulators, and including proprietary trading of member(s) of the counterparty's group and placing agency services.

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1. Investment management and advisory services transactions: investment management and/or advisory services, including but not limited to the provision of financial analysis, asset allocation, and various kinds of ancillary consultancy, investment management and advisory services.
2. Business and/or operational support, referral, global research and/or other miscellaneous services transactions: (I) providing business and/or operational support or referral and/or global research services etc. and other miscellaneous services including but not limited to performing as calculation agent and valuation agent, acting as collateral custodian, conducting market research, referring client and/or business between the Group and the HSCL Group for financial services, commercial and corporate finance deals etc.; (II) providing research services, including but not limited to preparing industry sector or products reports of Hong Kong, overseas and PRC listed companies, designing products, participating in roadshows, etc.
3. Corporate finance advisory and services: financial advisory services, including but not limited to advising on compliance with relevant laws, rules and regulations, acting as placing agent, listing agent, arranger, settlement lead manager, bookrunner, sponsor, global co-ordinator and financial adviser etc., excluding underwriting commitment.

The transactions described in (1)(i) to (iv) above are collectively referred to as "Category 1 Transactions" in this announcement.

1. Investment, Lending and Other Financial Transactions
   Brief particulars of the investment, lending and other financial transactions to be conducted (a) by the Group to the HSCL Group and (b) by the HSCL Group to the Group as contemplated under the Master Agreement are summarised below:
2. 1. Fund investment, financial assistance and securities lending: investment or transfer of funds in investment funds or entities in which the Group or the HSCL Group have or will have an interest in; providing secured or unsecured credits and/or facilities; acting as financial advisor, arranger, agent or lead lender of syndicated facilities; subscription of financial products (including in the nature of additional tier-1bonds or similar quasi-equityinstruments), lending of the units/shares/derivatives and payment thereof. Such lent securities will be deposited in an account of HSCL Group maintained with the Group or an account of the Group maintained with the HSCL Group (as the case may be).
      The preliminary term for securities lending transactions mentioned under this heading will be no more than 12 months, subject to extension of not exceeding 12 months each.
   2. Principal-to-principaltransactions: entering into swaps arrangements (which do not belong to any other categories of transactions) and dealing in financial and loan products (including in the nature of additional tier-1 bonds or similar quasi-equity instruments) between the Group and the HSCL Group on a principal-to-principal basis.
   3. Underwriting: underwriting involving the Group and the HSCL Group for issue of securities, financial products, rights issues and placing, etc.

The transactions described in (2)(i) to (iii) above are collectively referred to as "Category 2 Transactions" in this announcement.

The scope of the Transactions may be amended from time to time by agreement in writing between the Company and HSCL, subject to, if applicable, compliance by the Company with all relevant requirements under the Listing Rules.

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The Group and the HSCL Group shall from time to time enter into specific agreements for the Transactions. The terms and pricing mechanism of the transactions under each specific agreement shall be fair and reasonable and negotiated on an arm's length basis within their respective ordinary and usual course of business, which, (a) in respect of the services provided by the HSCL Group to the Group, shall be no more favourable to the HSCL Group than the pricing and terms provided by the HSCL Group to independent third parties for similar (including similar nature) transactions, and no less favourable to the Group than the pricing and terms provided to the Group by, or obtained by the Group from, independent third parties for similar (including similar nature) transactions; and (b) in respect of the services provided by the Group to the HSCL Group, shall be no less favourable to the Group than the pricing and terms provided by the Group to independent third parties for similar (including similar nature) transactions, and no more favourable to the HSCL Group than the pricing and terms provided to the HSCL Group by, or obtained by the HSCL Group from, independent third parties for similar (including similar nature) transactions.

Termination

The Master Agreement may be terminated before expiration of its full term upon mutual agreement in writing by both parties or in certain circumstances, including upon material default by a party.

Pricing and settlement method

Pursuant to the Master Agreement, the pricing of the Transactions are set out as follows:

Category 1 Transactions

Pricing in respect of income receivable by the Group from the HSCL Group will follow the Group's pricing standard applicable to all its clients (connected persons and independent third parties alike), accordingly the amounts to be charged by the Group against the HSCL Group will be on the same scale as those charged against independent third parties by the Group for similar transactions.

In respect of expense payable by the Group to the HSCL Group, the pricing standard will be as follows:

1. Brokerage: The commission/distribution fees will be determined with reference to prevailing market rates for distribution of similar products by banks and financial institutions estimated to be ranging from 0.01% to 1%, and for trading in the Shanghai B Share and Shenzhen B Share markets, the commission/distribution fee is normally in the region of 0.3%, on par with the overall rates and fees commonly charged by independent third party brokers.
2. Investment management and advisory services: The management, performance and/or advisory fees payable by the Group will be determined with reference to the expected setup and operation costs as a baseline plus a margin based on the overall size, scope and period of the investment to be managed, rate of return of the project, QFII/RQFII available quota, setup or operating costs, business strategy direction and future cooperation potential, and advisory scope, as is appropriate, for comparable transactions in the market.

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1. Business and/or operational support, referral, global research and/or other miscellaneous services: The relevant fees payable by the Group will be determined with reference to the business of the entity involved in the transaction, nature of services, the size and complexity of the transactions and the contracting parties' contribution to the transactions.
2. Corporate finance advisory and services: The relevant fees payable by the Group will be determined with reference to the size, complexity and duration of relevant advisory services, the expected work and resources involved, and the then prevailing market rates for comparable transactions in the market.

Payments for Category 1 Transactions will be settled in cash (i) by way of deducting from the proceeds of the relevant transactions or the portfolio assets (as the case may be), or (ii) paid separately upon the completion of the transaction or in accordance with a schedule as agreed between the parties.

Category 2 Transactions

Pricing in respect of transaction amounts receivable by the Group from the HSCL Group will follow the Group's pricing standard applicable to all its clients (connected persons and independent third parties alike), accordingly the amounts to be charged by the Group against the HSCL Group will be on the same scale as those charged against independent third parties by the Group for similar transactions.

In respect of transaction amounts payable by the Group to the HSCL Group, the pricing basis will be as follows:

1. Fund investment, financial assistance and securities lending: (1) The fees and amounts related to fund investment payable by the Group will be determined with reference to the size and structure of the investment, potential investment returns and timing and availability of funds, subject to a combination of cost based, market based and valuation based approach to achieve a positive net margin; (2) the terms of the financial assistance (not including margin financing) transactions conducted between the Group and the HSCL Group will be based on normal commercial terms, with interest rates to be paid by the Group calculated with reference to, the currency-specificHIBOR/LIBOR during the lending period plus approximately 1.25% to 1.275%, and for loans in Renminbi, with reference to the market rates offered by commercial banks, such as the Bank of China Limited, for the relevant lending period and a spread incorporating the average external funding cost of the Group on the basis of an unsecured loan; (3) the margin-financingtransactions will be conducted with the interest rates determined with reference to standard reference rates such as HSBC Prime Rate applicable for different tiers of stock collaterals; and (4) the securities lending transactions will be priced with reference to the initial value of the securities lent subject to adjustment for market fluctuations.
2. Principal-to-principaltrading: The financial and loan products, including but not limited to any over-the-counter (OTC) derivative products, expected to be acquired by the Group from HSCL Group or to be sold by the Group to the HSCL Group will be acquired/ sold through arm's length negotiations with reference to the terms which will equally apply to all independent third party purchasers of similar products.
3. Underwriting commitment: The underwriting commitment by the Group will be determined through arm's length negotiations by the parties with reference to the Group's then financial capacity and resources allocated for such purpose, size of the transaction, risk tolerance level and market conditions, where applicable.

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Payments for Category 2 Transactions will be settled in cash (i) by way of deducting from the proceeds of the relevant transactions or the portfolio assets (as the case may be), or (ii) paid upon completion of the transaction separately or in accordance with a schedule as agreed between the parties.

REASONS FOR AND BENEFITS OF ENTERING INTO THE MASTER AGREEMENT

As the Transactions are expected to be of a recurrent nature and will occur on a regular and continuing basis in the ordinary and usual course of business of the Group, the entering into of the Master Agreement will enhance the Group's ability to conduct the Transactions, some of which are time-sensitive in nature, without the need for the Company to announce and convene separate general meeting on separate occasions to seek Independent Shareholders' prior approval for entering into the Transactions. The Transactions are expected to fully utilize the existing business setup between the Group and the HSCL Group and lower the Group's operating costs and provide an additional source of revenue for the Group. In addition, it is expected that the Transactions would bring synergies to the Group and the HSCL Group. It is also considered that the Transactions would secure a long-term and reliable business association between the Group and the HSCL Group.

The Board (excluding the independent non-executive Directors whose views will be given after considering the advice to be given by the Independent Financial Adviser) is of the opinion that the Transactions are in the ordinary and usual course of business of the Company, the terms of the Master Agreement are on normal commercial terms and are fair and reasonable and the entering into of the Master Agreement is in the interests of the Group and the Shareholders as a whole.

None of the Directors has any material interest in the Master Agreement and the Transactions and hence none of them is required to abstain from voting on the relevant Board resolution(s) for approving the Master Agreement and the Transactions. Nevertheless, as each of Mr. QU Qiuping, Mr. LIN Yong, Mr. LI Jianguo, Mr. SUN Tong and Mr. ZHANG Xinjun is also a director or officer (as the case may be) of certain members of the HSCL Group, they have voluntarily abstained from voting on the relevant Board resolution(s).

HISTORICAL TRANSACTION FIGURES AND THE PROPOSED ANNUAL CAPS

Historical transaction figures in respect of continuing connected transactions carried out under the Previous Master Agreement for the two years ended 31 December 2019 and 2020 are shown below:

	Historical transaction figures
	for the year ended 31 December
	2019	2020
Previous Transactions	(HK$ million)	(HK$ million)
(1) Service transactions (Category 1 Transactions)
(a) Income received from service transactions provided to	37.06 (Note 1)	32.05 (Note 1)
member(s) of the HSCL Group (including fees and
commissions received from the HSCL Group in
respect of the underwriting by the Group)

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					Historical transaction figures
					for the year ended 31 December
					2019	2020
Previous Transactions			(HK$ million)	(HK$ million)
(b) Expenses incurred for service transactions provided by	69.70 (Note 2)	71.24 (Note 2)
	member(s) of the HSCL Group (including fees and
	commissions paid by the Group in respect of the
	underwriting by the HSCL Group)
(2) Investment and financial transactions (Category 2 Transactions, but excluding underwriting commitments
which are set out in (3) below)
(a) Sum received	from the HSCL Group attributable to	Nil	8,990.82
	fund investment, financial assistance and securities
	lending transactions
(b) Sum paid to	the HSCL Group attributable to fund	Nil	1,943.97
	investment, financial assistance and securities lending
	transactions
(c)	Transaction	amount	attributable	to	1,358.03	47.71
	principal-to-principal transactions between the Group
	and the HSCL Group
(3)	Underwriting commitments
(a) Amount of underwriting commitments provided by the	348.36	5,221.68
	Group
(b) Amount of underwriting commitments provided by the	Nil	Nil
	HSCL Group
Notes:

1. Income from (i) brokerage transactions was approximately HK$7.01 million and HK$4.45 million for the two years ended 31 December 2019 and 2020 respectively; (ii) investment management and advisory services transactions was approximately HK$19.05 million and HK$14.32 million for the two years ended 31 December 2019 and 2020 respectively; (iii) business/operational support and other services transactions was approximately HK$1.06 million and HK$5.23 million for the two years ended 31 December 2019 and 2020 respectively; and (iv) corporate finance and capital market transactions was approximately HK$9.94 million and HK$8.05 million for the two years ended 31 December 2019 and 2020 respectively. No income from referral services for the two years ended 31 December 2019 and 2020.
2. Expenses incurred from (i) brokerage transactions was approximately HK$44.61 million and HK$1.11 million for the two years ended 31 December 2019 and 2020 respectively; (ii) business/operation support and other services transactions was approximately HK$12.72 million and HK$49.70 million for the two years ended 31 December 2019 and 2020; (iii) referral services was approximately HK$1.36 million for the year ended 31 December 2020 and (iv) corporate finance and capital market transactions was approximately HK$12.37 million and HK$19.07 million for the two years ended 31 December 2019 and 2020 respectively. No expense was incurred from referral services for the year ended 31 December 2019 and no expense was incurred from investment management and advisory services transactions for the two years ended 31 December 2019 and 2020.

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Proposed annual caps

The proposed annual caps in respect of the Transactions during the term of the Master Agreement are shown below:

						Proposed annual caps (Note)
					for the six	for the year	for the year	for the six
					months ending	ending	ending	months
					31 December	31 December	31 December	ending
					2021	2022	2023	30 June 2024
Transactions					(HK$ million)	(HK$ million)	(HK$ million)	(HK$ million)
(1) Service transactions (Category 1 Transactions)
(a) Income received and/or to be received	315	665	700	365
from service transactions provided to
member(s) of the HSCL Group
(including	fees	and	commissions
received and/or to be received from the
HSCL Group in respect of the
underwriting by the Group)
(b) Expenses	incurred and/or to	be	200	330	350	230
incurred	for	service	transactions
provided by member(s) of the HSCL
Group	(including	fees	and
commissions paid and/or to be paid by
the Group in respect of the
underwriting by the HSCL Group)

(2) Investment and financial transactions (Category 2 Transactions, but excluding underwriting commitments which are set out in (3) below)

(a)	Sum received and/or to be received	20,000	36,000	37,800	20,000
	from (i) the HSCL Group attributable
	to financial assistance and securities
	lending transactions and (ii) sum
	received and/or to be received from the
	HSCL Group and/or persons connected
	with the HSCL Group in respect of
	fund investment
(b)	Sum paid and/or to be paid to the	20,000	36,000	37,800	20,000
	HSCL Group attributable to fund
	investment,	financial	assistance	and
	securities lending transactions
(c)	Transaction	amount	attributable	to	28,500	60,000	63,000	33,000
	principal-to-principal	transactions
	between the Group and the HSCL
	Group
(3) Underwriting commitments
(a)	Amount of underwriting commitments	10,000	12,000	12,500	10,000
	to be provided by the Group
(b)	Amount of underwriting commitments	9,500	10,000	10,000	9,500
	to be provided by the HSCL Group
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Note:	For the avoidance of doubt, when calculating the utilization of the annual cap, if the nature of an
	individual transaction is covered by more than one category of transaction, such transaction amount may
	be included in more than one category of the annual cap. However, if any transaction amount which has
	been included in one category of the annual caps, then such amount will not be counted towards the other
	categories.

The historical utilization of the annual caps in respect of the Previous Transactions simply serves as the starting point in setting the annual caps for the Transactions and the respective proposed annual caps were determined primarily with reference to (a) the proposed annual or annualized amount of payment in respect of the transactions to be conducted between member(s) of the Group and member(s) of the HSCL Group; (b) the cross-border merger and acquisition trends in Hong Kong and overseas and the potential impact of relevant state and cross-border policies, including the process of Renminbi internationalization, Shanghai-Hong Kong stock-connect,free-trade zones implementation, the expected boost in international trade brought by the Belt and Road Initiative and more favourable QFII, QDII and RQFII and global economic factors; and (c) for transaction flexibility, a reasonable buffer to cater for unexpected business growth, inflation and currency fluctuations and on the principal assumptions that, during the projected period, there will not be any adverse change or disruption in market conditions, operation and business environment or government policies which may materially affect the businesses of the Group and the HSCL Group.

Moreover, the annual caps (i) for the income to be received under Category 1 Transactions were determined based on, inter alia, QDII quota, the distribution of the HSCL Group's instruments by the Group, expansion of services and/or client base of both the Group and the HSCL Group, the issuance of instrument and products by the Group and the HSCL Group, the scale, operations of the businesses and the capability of the Group; and (ii) for the expenses to be incurred under Category 1 Transactions were determined based on, inter alia, QFII quota, the distribution of the Group's instruments by the HSCL Group, expansion of services and/or client base of both the Group and the HSCL Group, the issuance of instrument and products by the Group and the HSCL Group, the scale, operations of the businesses and the capability of the Group.

Further, the annual caps (i) for the sums to be received under Category 2 Transactions and (ii) for the sums to be paid under Category 2 Transactions were determined based on, inter alia, the expected increase of similar transactions between the Group and the HSCL Group due to cooperation on cross-border business development, transaction flexibility (a reasonable buffer to cater for unexpected business growth), the estimated number of transactions, the size of each transactions, the average yield of similar transactions or the average interest rates previously adopted, the Group's possible role of liquidity provider and the scale, operations of the businesses and the capability of the Group. For underwriting commitments, the annual caps were determined with reference to the possible volume of fund-raising opportunities involving the Group and/or the HSCL Group that may materialise during the period.

INTERNAL CONTROL MEASURES

In order to ensure that the Transactions contemplated under the Master Agreement are conducted on normal commercial terms or better and in accordance with the pricing policy of the Group and will not be prejudicial to the interests of the Company and its Shareholders as a whole, the Group has adopted the following measures:

1. the relevant business unit of the Group will periodically observe the market conditions and monitor the prevailing market prices including the pricings of contemporaneous transactions with independent third parties in respect of similar transactions in the same or nearby area in the ordinary course of business of the Group. In addition, the relevant personnel of the Group would compare other contemporaneous transactions or quotations for similar transactions with independent third parties and ensure that the terms offered to or by the HSCL Group are no less favourable to the Group than those available to or from independent third parties;

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1. the external auditor of the Company will conduct an annual audit each year, and issues its opinions as to the implementation of the Transactions by the Group and whether the amounts incurred by the Transactions are within the annual caps during the year pursuant to the requirements of Hong Kong Listing Rules; and
2. the internal auditor will conduct annual review of the Transactions and report its findings to the Audit Committee of the Company.

The Board is of the view that the above methods and procedures can ensure that the pricing and other contract terms for the Transactions are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole and will be conducted on terms no less favourable to the Group than the terms available to or from independent third parties for the Transactions.

LISTING RULES IMPLICATIONS

HSCL is the holding company of HTIH, a controlling shareholder of the Company, and therefore HSCL is a connected person of the Company and the Transactions constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules. As the highest of the applicable percentage ratios based on the proposed annual caps in respect of the Transactions exceeds 5%, the Transactions and the proposed annual caps in respect thereof are subject to the reporting, annual review, announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules. Further, as the highest of the applicable percentage ratios in respect of the financial assistance transactions under the Master Agreement is more than 25%, the financial assistance transactions under the Master Agreement also constitute major transactions of the Company under Chapter 14 of the Listing Rules and are therefore subject to the announcement, circular and shareholders' approval requirements thereunder.

An Independent Board Committee (comprising all independent non-executive Directors) has been appointed to advise the Independent Shareholders as to whether the terms of the Master Agreement are fair and reasonable, and whether the Transactions are on normal commercial terms or better and in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole, and to advise the Independent Shareholders on how to vote, taking into account the recommendation of the independent financial adviser. Rainbow Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

A circular containing, among others, the particulars of the Master Agreement together with a letter from the Independent Board Committee, a letter from the Independent Financial Adviser and a notice of the SGM is expected to be despatched to the Shareholders on or before 12 May 2021.

GENERAL

The principal business of the Group comprises in wealth management, corporate finance, asset management, institutional clients service and investment.

HSCL is a joint stock limited company incorporated in the PRC with limited liability which is listed on the Main Board of the Stock Exchange (stock code: 6837) and Shanghai Stock Exchange (stock code: 600837). HSCL is a renowned and major securities firm in the PRC, which is principal business lines comprise wealth management, investment banking, asset management, trading and institutional client services, and financial leasing.

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DEFINITIONS

In this announcement, unless otherwise indicated in the context, the following terms shall have the meanings set out below:

"2019 Announcements"	collectively, (i) the announcement of the Company dated
	17 February 2019 on the Previous Transactions, (ii) the
	circular of the Company dated 24 April 2019 in relation to
	the Previous Transactions and (iii) the announcement of
	the Company dated 24 May 2019 on the poll results of the
	special general meeting of the Company held on 24 May
	2019 for approving the Previous Transactions
"associates"	has the meaning ascribed to it under the Listing Rules
"Board"	the board of Directors
"Company"	Haitong International Securities Group Limited (stock
	code: 665), an exempted company incorporated in
	Bermuda with limited liability, the shares of which are
	listed on the Main Board of the Stock Exchange
"connected person"	has the meaning ascribed to it under the Listing Rules
"controlling shareholder"	has the meaning ascribed to it under the Listing Rules
"Directors"	the directors of the Company
"Group"	the Company and its subsidiaries from time to time
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"HSCL"	Haitong Securities Co., Ltd., a joint stock limited company
	incorporated in the PRC with limited liability whose
	overseas listed foreign invested shares are listed on the
	Main Board of the Stock Exchange (stock code: 6837) and
	its domestic listed shares are listed on the Shanghai Stock
	Exchange (stock code: 600837) and the holding company
	of HTIH
"HSCL Group"	HSCL, its subsidiaries and/or any associates of which
	HSCL and/or any of its subsidiaries taken together are
	directly or indirectly interested in, but excluding members
	of the Group
"HTIH"	Haitong International Holdings Limited, a company
	incorporated in Hong Kong with limited liability which is
	a wholly-owned subsidiary of HSCL and the controlling
	shareholder of the Company, holding approximately
	64.90% of the issued share capital of the Company as at
	the date of this announcement
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"Independent Board	an independent committee of the Board (which comprises
Committee"	Messrs. TSUI Hing Chuen William, LAU Wai Piu, WEI
	Kuo-chiang, WAN Kam To and Ms. LIU Yan, all being the
	independent non-executive Directors) established to advise
	the Independent Shareholders with regard to the terms of
	the Master Agreement and the transactions contemplated
	thereunder
"Independent Financial	Rainbow Capital (HK) Limited, a corporation licensed
Adviser" or "Rainbow Capital"	under the Securities and Futures Ordinance (Chapter 571
	of the Laws of Hong Kong) to conduct Type 1 (dealing in
	securities) and Type 6 (advising on corporate finance)
	regulated activities, and the independent financial adviser
	appointed by the Company to advise the Independent
	Board Committee and the Independent Shareholders on
	the terms of the Master Agreement and the transactions
	contemplated thereunder
"Independent Shareholders"	the Shareholders, other than HTIH and its associates
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange
"Master Agreement"	the master agreement entered into between the Company
	and HSCL on 21 April 2021 in relation to the Transactions,
	a summary of the principal terms of which is set out in this
	announcement
"PRC"	the People's Republic of China which, for the purpose of
	this announcement only, excludes Hong Kong, Macao
	Special Administrative Region of the PRC and Taiwan
"Previous Master Agreement"	the master agreement entered into between the Company
	and HSCL on 15 February 2019 in relation to the provision
	of services arising from three principal categories of
	transactions, which will expire on 30 June 2021, and the
	terms of which are summarised in the 2019
	Announcements
"Previous Transactions"	the provision of services arising from three principal
	categories of transactions as contemplated under the
	Previous Master Agreement
"QDII"	the qualified domestic institutional investors program, a
	program which allows either licensed domestic
	institutional investors or qualified domestic investors to
	invest in capital markets outside the PRC (for example
	Hong Kong) through institutions that have obtained QDII
	status

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"QFII"	the qualified foreign institutional investors program, a
	program which allows either licensed foreign institutional
	investors or qualified foreign investors to buy and sell
	Renminbi-denominated A shares and other financial
	instruments permitted by PRC regulators in the PRC's
	securities and/or futures markets through institutions that
	have obtained QFII status
"RQFII"	the Renminbi qualified foreign institutional investors
	scheme, a program which allows either licensed foreign
	institutional investors or qualified foreign investors to
	invest in the PRC's securities and/or futures markets
	through institutions that have obtained RQFII status
"SGM"	the special general meeting to be convened and held by the
	Company to consider and, if thought fit, approve (among
	other matters) the Master Agreement, the transactions
	contemplated thereunder and the proposed annual caps
"Shareholder(s)"	the holder(s) of the ordinary shares of HK$0.10 each in the
	share capital of the Company
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Transactions"	the transactions contemplated under the Master
	Agreement, brief particulars of which are set out in the
	section headed "Nature of transactions" of this
	announcement
"%"	per cent
	By order of the Board
	Haitong International Securities Group Limited
	LO Wai Ho
	Company Secretary
Hong Kong, 21 April 2021

As at the date of this announcement, the Board comprises Mr. QU Qiuping (Chairman)*, Mr. LIN Yong (Deputy Chairman and Chief Executive Officer), Mr. LI Jianguo (Deputy Chairman), Mr. POON Mo Yiu, Mr. SUN Jianfeng, Mr. SUN Tong, Mr. CHENG Chi Ming Brian*, Mr. ZHANG Xinjun*, Mr. William CHAN*, Mr. TSUI Hing Chuen William**, Mr. LAU Wai Piu**, Mr. WEI Kuo-chiang**, Mr. WAN Kam To** and Ms. LIU Yan** .

• Non-executiveDirectors
• Independent Non-executive Directors

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