CICC, Dongxing, Cinda Reply to Exchange Inquiries, Adjust Dissenting Shareholder Prices

On the evening of August 18, CICC, Dongxing Securities and Cinda Securities simultaneously disclosed their replies to the review inquiry letters regarding their major asset restructuring applications. The Shanghai Stock Exchange's inquiries focused on seven areas: transaction purpose and integration control, transaction pricing, investor protection measures, business revenue of the parties involved in the absorption and merger, assets, liabilities and cash flow positions of the parties, debt handling, and procedures to be fulfilled. The reply materials totaled 300 pages.

According to the announcements, the surviving company after the merger will follow the principles of "customer stability, business continuity, team integration and unified internal controls," establish an appropriate operational transition period, and promote comprehensive integration of the three parties in a phased and orderly manner. CICC will inherit and assume all assets, liabilities, businesses, personnel, contracts, qualifications and all other rights and obligations of Dongxing Securities and Cinda Securities.

At the business integration level, the surviving company will integrate by business line, achieving comprehensive integration based on CICC's strategic planning, business model, operating system and information systems. In wealth management, CICC will explore feasible ways to integrate the retail brokerage businesses of CICC Wealth, Dongxing Securities and Cinda Securities at the CICC level, and complete legal entity system integration during the operational transition period.

In terms of organizational structure, CICC will inherit the labor contracts of all employees of the two companies, with employee stability as the core and "people following business" as the guideline, coordinating employee placement. The employee placement plans involved have previously been reviewed and approved by the workers' congresses of the parties to the absorption and merger.

Both Dongxing Securities and Cinda Securities have subsidiaries in futures, public funds, private funds and alternative investments, and have each established 100%-owned Hong Kong subsidiaries through which they hold equity in other overseas subsidiaries. The surviving company will, in line with CICC's overall strategic planning, consolidate and optimize the license resources of the subsidiaries of all merging parties, achieving complementary advantages or value realization through promoting internal mergers of similar subsidiaries or external transfers, or by taking over quality resources and deregistering entities after disposing of businesses to be exited, thereby avoiding internal competition and conflicts of interest arising from overlapping businesses and teams.

The three securities firms have also revised and refined the transaction report. The repurchase request prices for CICC's A-share and H-share dissenting shareholders were adjusted to RMB34.57 per share and HK$18.60 per share, respectively; the cash election price for Dongxing Securities' dissenting shareholders was adjusted to RMB13.04 per share, and that for Cinda Securities to RMB17.75 per share. The above adjustments were all affected by the ex-rights and ex-dividend impact of the 2025 profit distribution.

The reply announcements stated that the repurchase request and cash election prices being lower than the share exchange price is conducive to encouraging more shareholders to participate in the share exchange transaction. Regarding the one-way price adjustment mechanism, if relevant indices and stock prices rise systematically during the period, dissenting shareholders can achieve effective exit through the secondary market, while the downward adjustment mechanism helps curb short-term arbitrage behavior.