CITIC SEC has unveiled a connected transaction to issue new H shares worth RMB16.00 billion to its controlling shareholder CITIC Financial Holdings under a specific mandate.

The brokerage will allot an estimated 794.06 million H shares at HK$23.13 each, implying: • an 8.0% discount to the 28 May 2026 closing price (HK$25.14); • discounts of 9.9% and 10.4% to the five-day and ten-day average prices, respectively; • an 8.4% premium to the 31 December 2025 audited book value per share (HK$21.35).

Post-deal, CITIC Financial Holdings’ aggregate stake will climb from 19.84% to 23.92%, while public H-share ownership will ease from 13.35% to 12.67%. The newly issued shares will be subject to a 48-month lock-up, with transfers permitted only within wholly owned or controlled units of CITIC Group.

Net proceeds, to be retained offshore, are earmarked for expanding international operations. Up to RMB16.00 billion may be injected—either in one or multiple tranches—into wholly owned subsidiary CITIC Securities International (CSI) to support: 1. Cross-border equity, commodities and fixed-income intermediary businesses (capped at HKD-equivalent of RMB10.30 billion). 2. Capital injection into overseas licensed entities (up to RMB1.20 billion). 3. IT and compliance upgrades (up to RMB2.00 billion). 4. Liquidity replenishment (up to RMB2.50 billion).

Completion is contingent on approval at the extraordinary general meeting scheduled for 17 July 2026, consent from the Hong Kong Stock Exchange for listing the new shares, CSRC filing and other regulatory clearances. The mandate will remain valid for 12 months following shareholder approval.

CITIC SEC’s board projects a minimal theoretical dilution effect of 0.5% on the company’s H-share price. All independent non-executive directors endorse the terms; Somerley Capital Limited, acting as independent financial adviser, deems the transaction fair and reasonable.