Announcement on Issuance of Additional Shares of

China Guangfa Bank Co., Ltd. in 2020

According to the Resolutions Passed At the fourth Meeting of the 9th Board of Directors of China Guangfa Bank Co., Ltd. made by the Board of Directors on 23 December 2020, and the Resolutions Passed At 2021 First Extraordinary General Meeting of China Guangfa Bank Co., Ltd. made by the Meeting of Shareholders on 20 January 2021, China Guangfa Bank Co., Ltd. (hereinafter referred to as the "Bank") will issue additional shares (the “Issuance”) not exceeding the equivalent of RMB40 billion, so as to maintain the sustainable and stable development of the business, be up to the mustard of the supervisory institutions and raise the capital adequacy ratio.

Ⅰ.Important Notice

1. The Issuing Plan of Additional Shares (the “Issuing Plan”) has been approved and passed at 2021 First Extraordinary General Meeting of the Bank on 20 January 2021. But the Issuing Plan remains to be submitted to the supervisory institutions such as China Banking Regulatory Commission (the “CBRC”) for approval

2. The contents of this announcement may be changed by the requirement from supervisory institutions such as CERC etc, and(or) by the authorization from the Meeting of Shareholders of the Bank.

Ⅱ. Issuing Plan of Additional Shares

     The details of the Issuing Plan are as follows:

1.Class of Issuing Shares and Par Value: the RMB ordinary shares, and the par value is RMB1 Yuan per share;

2.Target Subscribers: Additional shares of the Issuance will be subscribed by the shareholders whose name appears on the register of shareholders of the Bank at the Registration Date, and meeting the requirement of supervisory institutions. If the additional shares will not be fully subscribed, the Board of Directors, according to authorization of the Meeting of Shareholders, can find shareholders of the Bank or new investors to subscribe the rest shares;

3.Registration Date of the Issuance: 23 December 2020;

4.Issue Size and Use of Proceeds: not exceeding the equivalent of RMB40 billion. After deducting the expenses of the issuance, the proceeds from the Issuance will be used to replenish the capital of the Bank so as to raise the capital adequacy ratio, maintain the sustainable and stable development of the business.;

5.Issue Price: the price benchmark date of the Issuance is 31 December 2020. The issue price of the Issuance shall be adjusted and determined by the Board of Directors of the Bank in accordance with the authorization from the Meeting of Shareholders and the record price of the results of state-owned assets valuation. The issue price shall be not lower than the net asset per share (RMB6.88 Yuan per share) of the Bank as at 31 December 2020 and the record price of the results of state-owned assets valuation;

6.Amount of Shares: In the case of the issue size not exceeding the equivalent RMB40 billion

7.Implementation of the Issuance of Additional Shares:

(1) Preemption of Shareholders: the Shareholders of the Bank can subscribe the shares in the Issuance on the basis of proportion of the shares that have been holed by themselves before the Issuance;

(2) Disposal of the Rest Shares: If the shares in the Issuance will not be fully subscribed by the Shareholders of the Bank, the Board of Directors can find shareholders of the Bank or new investors to subscribe the rest shares in accordance with the authorization from the Meeting of Shareholders;

(3) Arrangement of Payment: According to the progress of the Issuance Plan, the Bank will send the Notice of Payment to the shareholders who have presented the aspiration of subscribing. The shareholders will take one-off payment during the period recorded in the Notice of Payment. If the shareholders won’t take payment on time, the shareholders will give up the subscription right without protest.

. Procedures of the Issuance

The procedures of the Issuance Plan are as follows:

1. Asking for the Subscribing Intention of Shareholders of the Bank

(1) The shareholders of the Bank should finish the Confirmation of Shares Subscribing (The documents can be received form the contact person of the Bank) in the required format, return the Confirmation of Shares Subscribing to the Bank by mail or fax before 17:00 5 March 2021, and notify the Bank by telephone. The shareholders of the Bank should also send the original copy of the Confirmation of Shares Subscribing to the Bank before 17:00, 8 March 2021. If the Confirmation of Shares Subscribing won’t be sent on the basis of aforementioned requirement or on the set time, it will be void except to be the approved by the Bank.

If the Confirmation of Shares Subscribing will not sent to the Bank through the aforementioned contact information, it will be void except to be the approved by the Bank.

(2) The amount of subscribing in the Confirmation of Shares Subscribing should be no more than the Issue Size (RMB40 billion) multiples by proportion of the shares held by the shareholder to total issued shares of the Bank.

2. Confirmation and(or) Adjustment of the Issue Size and the Amount of Subscribing

According to the authorization of the Meeting of Shareholders, the Board of Directors of the Bank (or proxy authorized by the Board of Directors) has the right to adjust the Issue Size and the practical amount of subscribing of each shareholder, etc. on the basis of the comment form supervisory institutions and the practical situation of the Issuance. More specifically, the practical situations (including but not limited to) are as follow:

(1) If the sum of the amount of shares in the Confirmation of Shares Subscribing of every qualified shareholder (the “Total Allotment of Shares”), who has presented intention of subscribing, will equal to the total amount of shares of the Issuance, then the qualified shareholders subscribe the total shares of the Issuance effectively.

(2) If the Total Allotment of Shares will be lower than the total shares of the Issuance, then the Bank has its discretionary power to appoint the investors (new investors or shareholders of the Bank) to subscribe the rest shares.

(3) If the actual amount of shares will be lower than the aforementioned amount of shares on the basis of the comment form supervisory institutions and the practical situation of the Issuance, the Board of Directors of the Bank (or proxy authorized by the Board of Directors) has the right to adjust the practical amount of subscribing, and does not have to get the approval of shareholders in advance.

3. The Approval of the Issuance Plan by Supervisory Institutions

The Board of Directors of the Bank has got the authorization of the Issuance by the Meeting of Shareholders, to handle the matters about finding investors to subscribe the shares, signing the contracts and submitting to a higher authority for approval, and so on. But the final confirmation and implementation of the Issuance Plan is still waiting for the approval by supervisory institutions such as CBRC.

4. Sending the Notice of Payment

The Bank will send the Notice of Payment to the qualified shareholders who has presented the intention of subscribing. If the Bank will not receive the payment of the subscribed shares in the Notice of Payment from the qualified shareholders, the qualified shareholders will abandon the right of subscribing shares by their own volition.

If the Board of Directors of the Bank (or proxy authorized by the Board of Directors) will adjust the final subscribing amount of shareholders because of the situation that the actual amount of issuing shares will be lower than the Issuance Plan caused by the actual implementation of the Issuance Plan, then the partial amount in payment of shareholders will not be allotted. The Bank will return the amount not allotted in payment, bearing interest at one-year term deposit rate from the payment date to the returning date, to shareholders.

5. Procedures of Capital Verification and Industrial and Commercial Registration Change

After receiving all payment of subscribing, the Bank will authorize a qualified accounting firm to accomplish the Report of Capital Verification and handle the matters about Industrial and Commercial Registration Change according to law.

. Contact Information of the Bank

Contact person: Miss Li, ,Mr Yan, Miss Su;

Tel: 020-38322433/2552/27687;

Fax: 020-87311722

Address: Room 3010, 30/F, Guangfa Bank Building, No.713 Dongfengdong Rd., Yue Xiu District, Guangzhou, Guangdong Province..

. Other Matters

The Bank reserves the right to interpret the Announcement

 

Hereby Noticed.

 

The Board of Directors of China Guangfa Bank Co., Ltd.

20 January 2021