PICC Property and Casualty : CONTINUING CONNECTED TRANSACTION AUTO PARTS PROCUREMENT CONTRACT WITH BANGBANG AUTO SALES & SERVICES

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(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 2328)

CONTINUING CONNECTED TRANSACTION

AUTO PARTS PROCUREMENT CONTRACT

WITH BANGBANG AUTO SALES & SERVICES

On 29 April 2021, the Company entered into an Auto Parts Procurement Contract with Bangbang Auto Sales & Services, pursuant to which, the Company shall purchase auto spare parts from Bangbang Auto Sales & Services for the maintenance of insured vehicles damaged in accidents, and Bangbang Auto Sales & Services shall supply the goods ordered under the Contract, undertake the responsibility of delivery, installment and adjustment of goods, and provide the Company with services including warranty, maintenance, consultation and training. The Company shall pay the cost of the auto spare parts to Bangbang Auto Sales & Services.

Pursuant to the relevant provisions of the Listing Rules, the Auto Parts Procurement Contract with Bangbang Auto Sales & Services constitutes a continuing connected transaction of the Company. As the highest applicable percentage ratio for annual caps of the payment to Bangbang Auto Sales & Services for the auto spare parts by the Company under the Contract exceeds 0.1% but is less than 5%, the Transaction is only subject to the reporting, annual review and announcement requirements and is exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

INTRODUCTION

Reference is made to the announcement dated on 29 May 2019 in relation to the Goods Procurement Contract entered into between the Company and Bangbang Auto Sales & Services. On 29 April 2021, the Company entered into an Auto Parts Procurement Contract with Bangbang Auto Sales & Services again, pursuant to which, the Company shall purchase auto spare parts from Bangbang Auto Sales & Services for the maintenance of insured vehicles damaged in accidents, and Bangbang Auto Sales & Services shall supply the goods ordered under the Contract, undertake the responsibility of delivery, installment, adjustment of goods, and provide the Company with services including warranty, maintenance, consultation and training. The Company shall pay the cost of the auto spare parts to Bangbang Auto Sales & Services.

AUTO PARTS PROCUREMENT CONTRACT

1. Date of Signing

1. April 2021

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2. Parties

1. the Company
2. Bangbang Auto Sales & Services

3. Term

Commencing from 1 April 2021 and expiring on 31 March 2023

4. Collaboration

The Company shall purchase auto spare parts from Bangbang Auto Sales & Services for the maintenance of insured vehicles damaged in accidents, and Bangbang Auto Sales & Services shall supply the goods ordered under the Contract, undertake the responsibility of delivery, installment, adjustment of goods, and provide the Company with services including warranty, maintenance, consultation and training. The Company shall pay the cost of the auto spare parts to Bangbang Auto Sales & Services.

5. Payment for auto spare parts

The Company or its branch offices may obtain the quotations from multiple suppliers on the "Jia'anpei" platform of Bangbang Auto Sales & Services in the Company's claim system and such suppliers include the spare parts suppliers who were bid winners of or recommended by the Company as well as those selected by Bangbang Auto Sales & Services. The Company or its branch offices shall determine the final price of the spare parts after comparing the price offered by the suppliers with the original price rate in the claim system of the Company to ensure that the price of the auto spare parts is fair and does not deviate from the price or the charging standard offered by independent third parties in the market.

After making price enquiry and comparison on the "Jia'anpei" platform of Bangbang Auto Sales & Services, the Company or its branch offices can order auto spare parts on the "Jia'anpei" platform. The branch offices of the Company and Bangbang Auto Sales & Services can enter into separate cooperation contracts for specific collaboration terms. Bangbang Auto Sales & Services shall deliver the auto spare parts specified in the order to the agreed location. The Company or its branch offices will make a full lump sum payment of the order to Bangbang Auto Sales & Services within 15 working days after the Company or its branch offices receiving the goods and effective special VAT invoice with full amount. The Company shall settle the payment via bank transfer.

PROPOSED ANNUAL CAPS

During the term of the Contract, the proposed annual caps for the payment for auto spare parts to be paid by the Company to Bangbang Auto Sales & Services are as follows:

Period	Proposed Annual Caps
	RMB million
1 April 2021 to 31 December 2021	1,500
Year ending 31 December 2022	2,500
1 January 2023 to 31 March 2023	1,000
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The proposed annual caps set out above are determined based on the actual procurement amounts during the term of the Goods Procurement contract and the estimated overall claim payment cost for auto spare parts of the Company and estimated percentage of auto spare parts to purchase from Bangbang Auto Sales & Services during the term of the Auto Parts Procurement Contract. There was a significant year-on-year increase in the historical transaction amount between the Company and Bangbang Auto Sales & Services in 2020. With strengthened mutual cooperation, the transaction amount is expected to achieve a more substantial increase in 2021 and the subsequent years. As such, the above proposed annual caps for each period are determined after taking into account the historical transaction amounts and the sound cooperation between the Company and Bangbang Auto Sales & Services.

HISTORICAL AMOUNT

For the two years ended 31 December 2019 and 2020 and during the period from 1 January 2021 to 31 March 2021, the Company paid Bangbang Auto Sales & Services approximately RMB388 million, RMB470 million and RMB101 million respectively for auto spare parts.

GENERAL INFORMATION

Information of the Company

The Company is a joint stock limited company incorporated in the PRC with limited liability, whose H shares are listed on the Hong Kong Stock Exchange. The Company is principally engaged in property loss insurance, liability insurance, credit insurance, accidental injury insurance, short-term health insurance, surety insurance and the related reinsurance business as well as investment and funds application business in the PRC. As at the date of this announcement, PICC Group is the controlling shareholder of the Company, holding 68.98% of the total share capital of the Company.

Information of Bangbang Auto Sales & Services

Bangbang Auto Sales & Services is a limited liability company incorporated in the PRC and is jointly established by the Company and PICC Financial Services together with external capital. By focusing on the auto services sector, its principal business activities include developing multiple business modes such as M2b and B2b (where auto spare parts manufacturers are referred to as "M", auto spare parts suppliers are referred to as "B" and auto repair enterprises are referred to as "b"), which are complemented with direct warehousing and distribution system and low interest-bearing financial products. It gradually opens and optimises the supply chain of auto spare parts to bring products and services with high quality and favourable price to auto owners and b-end repair enterprises, achieving a win-win situation among the auto owners, repair enterprises, suppliers, manufacturers, insurance companies and platform operators.

As at the date of this announcement, PICC Group, the controlling shareholder of the Company, indirectly holds 49% of the registered capital in Bangbang Auto Sales & Services, among which 24.5% is held by the Company and the other 24.5% is held by PICC Financial Services, a wholly-owned subsidiary of PICC Group.

To the best knowledge and belief of the Company, and having made all reasonable enquiries, as at the date of this announcement, the remaining 51% of the registered capital in Bangbang Auto Sales & Services is held by Chetai Investment. The general partner of Chetai Investment is Chehe Investment and the other limited partners holding 10% (inclusive) or more of its interests are Chechuang Investment Management, Grey Tile Wealth Investment, Shuishan Yongchang Investment and YTO Express Group Co., Ltd..

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As to Chehe Investment, shareholders holding 10% (inclusive) or more of its shares are Chechuang Investment Management, Grey Tile Wealth Investment, Rongyu Investment Management and YTO Express Group Co., Ltd., among which Chechuang Investment Management holds 51% of the shares of Chehe Investment. The general partner and ultimate beneficial owner of Chechuang Investment Management is Mr. Gong Tuo (an Independent Third Party). Information of other shareholders holding 10% (inclusive) or more of the shares of Chehe Investment is set out as below:

As to Grey Tile Wealth Investment, its general partner is Xiamen Grey Tile Investment Management Co., Ltd. and the other limited partners holding 10% (inclusive) or more of its interests are Beijing Fenghua Xinyuan Consulting Co., Ltd. and Mr. Chen Weijie (an Independent Third Party).

As to Xiamen Grey Tile Investment Management Co., Ltd., shareholders holding 10% (inclusive) or more of its shares are Mr. Liu Jianfeng (an Independent Third Party) and Xiamen Guangyao Tianxiang Equity Investment Partnership (L.P.) and the ultimate beneficial owner is Mr. Liu Jianfeng. As to Xiamen Guangyao Tianxiang Equity Investment Partnership (L.P.), its general partner is Xiamen Guangyao Tianxiang Investment Co., Ltd. (its ultimate beneficial owner is Mr. Liu Zhen, an Independent Third Party) and the other limited partners holding 10% (inclusive) or more of its interests are Mr. Liu Zhen (an Independent Third Party) and Mr. Zheng Feng (an Independent Third Party).

As to Beijing Fenghua Xinyuan Consulting Co., Ltd., its ultimate beneficial owner is Mr. Zhang Wei (an Independent Third Party).

As to Rongyu Investment Management, its general partner is Shanghai Rongyu Enterprise Management Co., Ltd. (it is ultimately held by a number of dispersed Independent Third Party individuals) and the other limited partners holding 10% (inclusive) or more of its interests are Shanghai Hongyu Enterprise Management Center (L.P.) (its ultimate beneficial owner is Mr. Zhou Yong, an Independent Third Party), Hangzhou Xinyu Investment Management Partnership (L.P.) (its ultimate beneficial owner is Inner Mongolia Yitai Coal Co., Ltd., a joint stock company with limited liabilities incorporated in the PRC whose shares are listed on the Shanghai Stock Exchange (stock code: 900948) and Hong Kong Stock Exchange (stock code: 03948)), Beijing Panyu Enterprise Management Center (L.P.) (its ultimate beneficial owner is Huawen Media Group, a joint stock company with limited liabilities incorporated in the PRC whose shares are listed on the Shenzhen Stock Exchange (stock code: 000793)) and Shanghai Yulong Enterprise Management Center (L.P.) (its ultimate beneficial owner is State-owned Assets Management Committee of Hebei Province).

YTO Express Group Co., Ltd. is a joint stock company with limited liability incorporated in the PRC whose shares are listed on the Shanghai Stock Exchange (Stock code: 600233).

As to Shuishan Yongchang Investment, its general partner is Chenglian Holdings (Xiamen) Co., Ltd. and the other limited partners holding 10% (inclusive) or more of its interests are Rongyu Investment Management, Chenglian (Xiamen) Supply Chain Management Co., Ltd. and Fengbang Finance Lease (Shanghai) Co., Ltd..

As to Chenglian Holdings (Xiamen) Co., Ltd., shareholders holding 10% (inclusive) or more of its shares are Panxin (Shanghai) Equity Investment Center (L.P.) (it is ultimately held by a number of dispersed partners), Orange Connex (HK) Holdings Limited and

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Xiamen Chengxin Operation and Management Partnership (L.P.) (its ultimate beneficial owner is Mr. Song Pengfei, an Independent Third Party).

As to Chenglian (Xiamen) Supply Chain Management Co., Ltd., it is wholly owned by Chenglian Holdings (Xiamen) Co., Ltd..

As to Fengbang Finance Lease (Shanghai) Co., Ltd., shareholders holding 10% (inclusive) or more of its shares are VIBRANT CREEK LIMITED, Shanghai Panxin Heyao Investment Management Center (L.P.) (it is ultimately held by a number of dispersed partners) and CPEChina Leasing Investment (BVI) Limited.

Information of PICC Group

PICC Group is a joint stock limited company incorporated in the PRC with limited liability, whose shares are listed on the Hong Kong Stock Exchange (Stock code: 01339) and the Shanghai Stock Exchange (Stock code: 601339) respectively. PICC Group mainly invests in and holds shares in listed companies, insurance agencies and other financial institutions, supervises and manages various domestic and international businesses of its invested companies and policy-oriented insurance businesses authorised or entrusted by the government, etc. As at the date of this announcement, the Ministry of Finance is the controlling shareholder and the ultimate beneficial owner of PICC Group, holding 60.84% of the total share capital of PICC Group.

REASONS FOR AND BENEFITS OF ENTERING INTO THE CONTRACT

On 29 May 2019, the Company entered into the Goods Procurement Contract with Bangbang Auto Sales & Services, under which the Company purchased auto spare parts from Bangbang Auto Sales & Services for maintenance of insured vehicles damaged in accidents. Through sound cooperation between the Company and Bangbang Auto Sales & Services, the Company has improved pricing power during the claim settlement of motor vehicle insurance, further optimised the classification management system of repair enterprises cooperating with the Company, improved cost management and control of motor vehicle insurance, accelerated the processing of claim cases and continuously enhanced the customer satisfaction. In order to continuously provide quality claim services to customers, share resources and meet the business cooperation needs between the Company and Bangbang Auto Sales & Services, the Company and Bangbang Auto Sales & Services entered into the Contract and expressly set out the cooperation policy guidance for the branch offices, which will be conducive to the loss reduction of claim settlement at the branch level.

The Board, including all independent Non-executive Directors, is of the view that the Contract is entered into in the ordinary and usual course of business of the Company and on normal commercial terms, and the terms of the Contract and the proposed annual caps are fair and reasonable and in the interests of the Company and its shareholders as a whole.

LISTING RULES IMPLICATIONS

As at the date of this announcement, PICC Group holds approximately 68.98% of the issued capital of the Company and is the controlling shareholder of the Company. The Company and PICC Financial Services, a wholly-owned subsidiary of PICC Group, each holds 24.5% of the registered capital in Bangbang Auto Sales & Services. Therefore, PICC Group indirectly holds 49% of the registered capital in Bangbang Auto Sales & Services. Pursuant to the relevant provisions of the Listing Rules, Bangbang Auto Sales & Services is a connected person of the Company, and the Auto Parts Procurement Contract with Bangbang Auto Sales

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• Services constitutes a continuing connected transaction of the Company. As among the Directors of the Company, Mr. Luo Xi and Mr. Xie Yiqun hold positions in PICC Group, and Mr. Li Tao holds a position in PICC Life, a subsidiary of PICC Group, they all abstained from voting on the Board resolution for considering and approving the Contract. Save as disclosed above, no other Directors were required to abstain from voting on the Board resolution for considering and approving the Contract or are regarded as having a material interest in the Contract.

As the highest applicable percentage ratio for annual caps of the payment to Bangbang Auto Sales & Services for the auto spare parts by the Company under the Auto Parts Procurement Contract exceeds 0.1% but is less than 5%, the Transaction is only subject to the reporting, annual review and announcement requirements and is exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

DEFINITIONS

In this announcement, the following expressions shall have the following meanings unless the context otherwise requires:

"Auto Parts Procurement	the "Auto Parts Procurement Contract" entered into between
Contract" or "Contract"	the Company and Bangbang Auto Sales & Services on 29
	April 2021
"Bangbang Auto Sales &	Bangbang Auto Sales & Service (Beijing) Co., Ltd.
Services"
"Board"	the board of directors of the Company
"Chechuang Investment	Gongqingcheng Chechuang Investment Management
Management"	Partnership (L.P.)
"Chehe Investment"	Gongqingcheng Chehe Investment Co., Ltd.
"Chetai Investment"	Gongqingcheng Chetai Investment Management L.P.
"Company"	PICC Property and Casualty Company Limited
"connected person"	has the meaning as defined in the Listing Rules
"Director(s)"	director(s) of the Company
"Goods Procurement	the "Goods Procurement Contract" entered into between the
Contract"	Company and Bangbang Auto Sales & Services on 29 May
	2019
"Grey Tile Wealth	Xiamen Grey Tile Wealth Investment Partnership (L.P.)
Investment"
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"Hong Kong Stock	The Stock Exchange of Hong Kong Limited
Exchange"
"Independent Third Party"	has the meaning as defined in the Listing Rules
"Listing Rules"	the Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited
"Ministry of Finance"	The Ministry of Finance of the PRC
"PICC Financial Services"	PICC Financial Services Company Limited, a limited liability
	company incorporated in the PRC
"PICC Group"	The People's Insurance Company (Group) of China Limited
"PICC Life"	PICC Life Insurance Company Limited, a joint stock limited
	company incorporated in the PRC, whose total share capital is
	held 8.615% by the Company and 80.0%, directly and
	indirectly, by PICC Group, the Company's controlling
	shareholder

"PRC"

"RMB"

"Rongyu Investment Management"

"Shuishan Yongchang Investment"

"Transaction"

the People's Republic of China

Renminbi, the lawful currency of the PRC

Zhuhai Rongyu Investment Management Center (L.P.)

Shenzhen Shuishan Yongchang Investment Center (L.P.)

Under the Contract, the Company shall purchase auto spare parts for the maintenance of insured accident-damaged vehicles from Bangbang Auto Sales & Services, Bangbang Auto Sales & Services shall supply the goods ordered under the Contract, be responsible for delivery, installment, adjustment of goods, and provide the Company with services including warranty, maintenance, consultation and training, and the Company shall pay the cost of the auto spare parts to Bangbang Auto Sales & Services

"%"percentage

By Order of the Board

PICC Property and Casualty Company Limited

Zou Zhihong

Secretary of the Board

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Beijing, the PRC, 29 April 2021

As at the date of this announcement, the Chairman of the Board is Mr. Luo Xi (Non-executive Director), the Executive Directors are Mr. Xie Yiqun and Mr. Jiang Caishi, Mr. Li Tao is a Non-executive director, and the Independent Non-executive Directors are Mr. Lin Hanchuan, Mr. Lo Chung Hing, Mr. Ma Yusheng, Mr. Chu Bende and Ms. Qu Xiaohui.

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