Notice on the Implementation of Cash Option for the Share Swap Absorption Merger of Hongyuan Securities Co., Ltd. by Shenwan Hongyuan Securities Co., Ltd.

Hongyuan Securities Co., Ltd. (Stock Code: 000562)
Announcement No.: Lin 2014-112

Notice on the Implementation of Cash Option for the Share Swap Absorption Merger of Hongyuan Securities Co., Ltd. by Shenwan Hongyuan Securities Co., Ltd.

The company and all members of the board guarantee that the content disclosed in this announcement is true, accurate, and complete, without any false records, misleading statements, or significant omissions. The company has published the "Announcement on the Distribution and Implementation of Cash Options for the Share Swap Absorption Merger of Hongyuan Securities Co., Ltd. by Shenwan Hongyuan Securities Co., Ltd." on December 9, 2014, on the Shenzhen Stock Exchange website (www.szse.cn) and the Giant Tide Information website (www.cninfo.com.cn). This notice only explains matters related to the implementation of cash options and does not constitute a recommendation for investors to exercise cash options.

Special Reminders

1. The company's stock (Stock Code: 000562) has been suspended from trading since December 10, 2014. Subsequently, Hongyuan Securities' stock will enter the cash option distribution, exercise declaration, and settlement phase, and will not be traded until it is converted into Shenwan Hongyuan stock and listed on the Shenzhen Stock Exchange.
2. On December 11, 2014, the company distributed cash options to dissenting shareholders registered after the market close on the cash option registration date (December 9, 2014). The number of cash options to be distributed is 3,111,670 units, of which 797,868 units will be distributed through the Shenzhen branch of China Securities Depository and Clearing Corporation. The remaining cash options are held in a credit guarantee account at a securities company and have not been distributed through the clearing company. Dissenting shareholders wishing to exercise their cash options must transfer their Hongyuan Securities shares from the securities company's client credit guarantee account to their regular securities account before the cash option declaration deadline and contact Hongyuan Securities for the cash option exercise declaration work.
3. Shareholders entitled to cash options can declare to exercise their cash options in full or in part during the declaration period (between December 12 and December 18, 2014) from 9:30 AM to 11:30 AM and from 1:00 PM to 3:00 PM. Successfully declared shares will be transferred to the cash option provider, Central Huijin Investment Ltd. (hereinafter referred to as "Central Huijin"), at a price of 8.12 yuan per share.
4. The reference stock price for the cash option is 23.18 yuan (the closing price on the sixth trading day before the cash option declaration, December 4, 2014), with a premium of 185.47% over the cash option exercise price, exceeding 50%. According to the "Guidelines for Cash Option Business of Listed Companies on the Shenzhen Stock Exchange (Revised 2011)," the company will implement the cash options through manual declaration. The declaration and settlement of cash options will be completed manually.
5. According to the share swap absorption merger plan, the exercise price is based on the closing price of 8.22 yuan per share on the trading day before the board resolution announcement for the share swap absorption merger, minus the profit distribution plan for 2013 that was completed on July 17, 2014, resulting in an exercise price of 8.12 yuan per share. On December 9, 2014 (the last trading day for the company's stock), the closing price of Hongyuan Securities was 30.50 yuan per share, representing a premium of 275.62% over the cash option exercise price. If investors exercise their cash options, it may result in certain losses; please pay attention to investment risks. For detailed information on the share swap absorption merger plan, please refer to the full report published by the company on December 2, 2014, on the Shenzhen Stock Exchange website (www.szse.cn) and the Giant Tide Information website (www.cninfo.com.cn).