CICC Announces to Acquire the Entire Equity Interest in CISC

China International Capital Corporation Limited ("CICC" or the "Company"; stock code: 3908) announced today that as approved by its board of directors, CICC entered into the Equity Transfer Agreement with Central Huijin Investment Ltd ( "Huijin"), a substantial shareholder of the Company, to acquire from Huijin the entire equity interest in China Investment Securities Company Limited ("CISC") . Based on the appraisal value of CISC as appraised by PRC Valuer and approved by the Ministry of Finance, and taking into consideration of various factors including the landscape and prospects of the securities industry, the financial performance and future development of CISC, and potential synergies, the consideration of this transaction was determined at RMB16.7 billion. The consideration will be satisfied by issuing CICC’s domestic shares to Huijin. Upon completion of this transaction, CISC will become a wholly-owned subsidiary of CICC.

Over two decades of development, CICC has built up significant edges in the fields of institutional business, cross-border services and wealth management business aiming at high-end customers. Formerly as one of the earliest securities firms in China, CISC has a strong market position in retail brokerage business. With an significantly expanded business scale post the integration, the Company is expected to join the tier-1 league in the industry by multiple dimensions. This transaction will help the Company further broaden its customer base, achieve a deeper penetration in the large, medium and small enterprises as well as institutional and individual customers, build a more balanced business structure across primary and secondary markets, strengthen its capability to weather the risks and volatility in the capital market and greatly enhance its overall competiveness.

Benefiting from the sustained economic growth in China, the domestic wealth management sector is prospering driven by rapidly growing household wealth and increasing demand for investment products and related services. CICC was the first to introduce the service-driven wealth management business model into China, and has built up industry-leading, full-scope service capabilities, and outstanding asset allocation research coverage. In line with the Company’s strategic goal of furthering the growth of its wealth management business, the transaction will drive the Company toward this goal by capturing historic opportunities in this sector. CICC and CISC will work together to integrate the franchise, knowhow, and all-round customized product and service capabilities of CICC with the nationwide branch network and extensive customer base of CISC, to bring forward the transformation and upgrading of the wealth management business, and build up a leading wealth management platform in China with long-term competiveness and growth potential.

CICC and CISC are expected to achieve considerable synergies in various respects of business expansion through a strong alliance built upon the unique strengths of each other. By applying the strengths of CICC in the areas of sophisticated products and high-end services to the extensive customer base and network of CISC, the Enlarged Group is expected to enjoy synchronized development across business lines including investment banking, equities, FICC, and investment management. With an enlarged balance sheet post the integration, the Enlarged Group will focus on balance sheet management, to improve the efficiency of financial resources utilization and cost savings. CICC and CISC have set up a joint working group to steadily bring forward integration under the principle of "stabilizing the existing business and enlarging the incremental business", in order to combine resources to maximize potential synergies, enhance financial returns, and deliver more value to shareholders.

Chinese economy is in a transitional era of deepened reform and upgrading in all respects. Development of larger-scale leading securities firms will contribute to the establishment of multi-layer capital markets and transformation of the economic structure. Since the listing of CICC, various business lines have being steadily developed. This transaction represents a major initiative by the Company to seize market opportunities and reinforce its industry position, which will contribute to its long-term sustainable development and its goal of establishing itself as a world-class investment bank with global influence.