Prospectus for Initial Public Offering of Shares

Issuer Information

Gansu Hongliang Leather Co., Ltd.
Location: Shueijia Village, Sanjiaji Town, Guanghe County, Linxia Hui Autonomous Prefecture, Gansu Province
Sponsor (Lead Underwriter): Hu Long Securities Co., Ltd.
Address: 21st Floor, Lanzhou Wealth Center, 638 Donggang West Road, Chengguan District, Lanzhou

Issuance Overview

Type of Shares Issued

Domestic issuance of RMB ordinary shares (A shares)

Number of Shares Issued

The company is publicly issuing 18.4 million new shares, while shareholders are publicly selling 18.7 million shares, totaling 37.1 million shares, which accounts for 25% of the total capital after issuance. The controlling shareholder will not participate in this share sale. Gansu Trust will publicly sell 4.8929 million shares, and shareholders who served as directors in the past 36 months, Zhu Zihai, Ma Dequan, and Zhang Huiyang, will publicly sell 900,600 shares, 900,600 shares, and 850,000 shares, respectively. The funds from the sale of shares by shareholders will not belong to the company. Investors should consider the factors of shareholders publicly selling shares during the subscription process.

Par Value per Share

RMB 1.00

Issue Price per Share

RMB 16.18/share

Issue Date

January 20, 2014

Planned Listing Exchange

Shenzhen Stock Exchange

Total Capital After Issuance

148.4 million shares

Lock-up Commitments

The controlling shareholder Li Chen and related shareholder Ma Dequan have committed that, except for the shares required for public sale according to the "Interim Provisions on Public Sale of Shares by Shareholders during Initial Public Offerings" and the issuance plan approved at the company's third extraordinary general meeting in 2013, they will not transfer or entrust others to manage their shares for 36 months from the date of the company's stock listing. They will also not allow the company to repurchase those shares. If they reduce their holdings within two years after the lock-up period, the selling price will not be lower than the issue price. If the company's stock price falls below the issue price for 20 consecutive trading days within six months after listing, or if the closing price at the end of six months is below the issue price, the lock-up period will automatically extend for nine months, and they will not waive their commitments due to changes in position or resignation. Other shareholders have also committed to similar lock-up terms for 12 months post-listing.

Shareholder Sale Details

The following table summarizes the shareholding and sale details of major shareholders: