Hua Hong Semiconductor : DISCLOSEABLE TRANSACTIONS SUBSCRIPTIONS OF STRUCTURED DEPOSIT PRODUCTS WITH CHINA CITIC BANK

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HUA HONG SEMICONDUCTOR LIMITED

華 虹 半 導 體 有 限 公 司

(Incorporated in Hong Kong with limited liability)

(Stock code: 1347)

DISCLOSEABLE TRANSACTIONS

SUBSCRIPTIONS OF STRUCTURED DEPOSIT PRODUCTS WITH

CHINA CITIC BANK

Reference is made to the announcements of the Company dated 10 June 2019, 2 July 2019 and 9 September 2019 (the "Announcements") in respect of certain subscriptions by Hua Hong Wuxi. Unless otherwise defined, capitalized terms used herein shall have the meanings ascribed to them in the Announcements stated above.

The Board is pleased to announce that on 29 September 2019 and 21 October 2019, Hua Hong Wuxi has entered into two further structured deposit product agreements (the "29 September 2019 CITIC Structured Deposit Product Agreement" and the "October 2019 CITIC Structured Deposit Product Agreement") with China CITIC Bank (Wuxi Branch).

SUBSCRIPTIONS WITH CHINA CITIC BANK (WUXI BRANCH)

A summary of the principal terms of the 29 September 2019 CITIC Structured Deposit Product Agreement is set out as follows:

Date	:	29 September 2019
Parties	: Hua Hong Wuxi, as the subscriber and China CITIC Bank (Wuxi Branch),
		as the bank
Type of return	: Principal-guaranteed with floating income
Principal amount	:	RMB500,000,000
Term	:	109 days commencing from 29 September 2019 and expiring on 16
		January 2020
Expected return	: Between 3.60%-4.10% (If the 3-month USD LIBOR is less than or equal
per annum		to 4.00% at 11 a.m. London time on 14 January 2020, the expected return
		per annum will be 3.60%. Otherwise, the expected return per annum will
		be 4.10%.)
Investment scope	: This is a structured product with the entire funds being applied into
		investing in operations through structured interest rate swap transactions.
Early termination	: Hua Hong Wuxi has no right to withdraw any of the principal before the
		maturity date.

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A summary of the principal terms of the October 2019 CITIC Structured Deposit Product Agreement is set out as follows:

Date	:	21 October 2019
Parties	: Hua Hong Wuxi, as the subscriber and China CITIC Bank (Wuxi Branch),
		as the bank
Type of return	: Principal-guaranteed with floating income
Principal amount	:	RMB500,000,000
Term	: 30 days commencing from 21 October 2019 and expiring on 20 November
		2019
Expected return	: Between 3.45%-3.95% (If the 3-month USD LIBOR is less than or equal
per annum		to 4.00% at 11 a.m. London time on 18 November 2019, the expected
		return per annum will be 3.45%. Otherwise, the expected return per
		annum will be 3.95%.)
Investment scope	: This is a structured product with the entire funds being applied into
		investing in operations through structured interest rate swap transactions.
Early termination	: Hua Hong Wuxi has no right to withdraw any of the principal before the
		maturity date.

REASONS AND BENEFITS FOR SUBSCRIPTIONS OF THE FINANCIAL PRODUCTS

The Company considers the Financial Products to be principal-protected,short-term and low-risk investment products issued by banks which offer better interest rates than prevailing fixed-term deposit interest rates offered by banks or licensed financial institutions. The Directors believe that the subscriptions of the Financial Products would efficiently utilise the cash held by Hua Hong Wuxi and obtain secure and attractive returns on cash balances of Hua Hong Wuxi before the cash is being deployed for capital and operating expenditures in the next one to two years. Accordingly, the Directors are of the view that the subscriptions for the Financial Products are on normal commercial terms and fair and reasonable and in the interests of the Group and its shareholders as a whole.

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IMPLICATIONS UNDER THE LISTING RULES

As the applicable ratios of each of the 29 September 2019 CITIC Structured Deposit Product Agreement and the October 2019 CITIC Structured Deposit Product Agreement are below 5%, these subscriptions did not constitute discloseable transactions of the Company on a standalone basis.

As the transactions are entered into with the same bank and are of similar nature, the 29 September 2019 CITIC Structured Deposit Product Agreement and the October 2019 CITIC Structured Deposit Product Agreement shall be aggregated and treated as if they were one transaction with China CITIC Bank for the purpose of computing the relevant percentage ratios pursuant to Rule

14.22 of the Listing Rules. As the applicable percentage ratios in respect of the 29 September 2019 CITIC Structured Deposit Product Agreement and the October 2019 CITIC Structured Deposit Product Agreement, on an aggregate basis, exceed 5% but are less than 25%, such transactions constitute discloseable transactions for the Company and are therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

At all relevant times, the applicable percentage ratios of all financial products purchased from China CITIC Bank have at no time exceeded 25% respectively.

INFORMATION ABOUT THE PARTIES

The Company

The Company is a manufacturer of semiconductors predominantly on 8-inch (200mm) wafers for specialty applications. The Company's technologies, in particular eNVM and power discreet, are primarily engaged in the consumer electronic, communication, computing and industrial as well as automotive industries.

Hua Hong Wuxi

Hua Hong Wuxi is currently a non-wholly owned subsidiary of the Company, and is principally engaged in the design, research, manufacturing, testing, packaging and sale of integrated circuits fabricated on 12-inch (300mm) wafers.

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China CITIC Bank

China CITIC Bank, formerly known as CITIC Industrial Bank and founded in 1987, changed its name at the end of 2005. Headquartered at Beijing, China CITIC Bank is one of the national commercial banks in the PRC, whose substantial shareholder is CITIC Limited.

To the best knowledge, information and belief of the Directors having made all reasonable enquiries, China CITIC Bank and its ultimate beneficial owners are third parties independent of the Group and its connected persons.

By Order of the Board

Hua Hong Semiconductor Limited

Mr. Suxin Zhang

Chairman and Executive Director

Shanghai, PRC, 21 October 2019

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

Executive Directors:

Suxin Zhang (Chairman)

Junjun Tang (President)

Non-Executive Directors:

Yang Du

Takayuki Morita

Jing Wang

Jun Ye

Independent Non-Executive Directors:

Stephen Tso Tung Chang

Kwai Huen Wong, JP

Long Fei Ye

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