AVIC International : Announcements and Notices -

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(formerly known as CATIC Shenzhen Holdings Limited (深圳中航集團股份有限公司)) (a joint stock limited company incorporated in the People's Republic of China)

(Stock Code: 00161) ANNOUNCEMENT CONTINUING CONNECTED TRANSACTIONS FRAMEWORK AGREEMENTS IN RELATION TO LEASING AND MANAGEMENT OF PROPERTIES

Reference is made to the announcement dated 13 January 2014 in connection with the AVIC International Framework Agreements entered into between AVIC International and the Company.

The AVIC International Framework Agreements expired on 31 December 2016. To renew the agreements, on 13 January 2017 (after trading hours), the Company entered into the New AVIC International Framework Agreements with AVIC International, each of which for a term from the date of its execution to 31 December 2019 (subject to their respective conditions precedent).

As AVIC International (including its Associated Companies) is a connected person of the Company, the New AVIC International Framework Agreements and the transactions contemplated thereunder constitute continuing connected transaction of the Company pursuant to Chapter 14A of the Listing Rules.

As the applicable percentage ratios (as defined under the Listing Rules) for each of (i) the New AVIC International Rental Framework Agreement, (ii) the New AVIC International Tenancy Framework Agreement and (iii) the New AVIC International Property Management Framework Agreement exceed 0.1% but are less than 5%, each of (i) the New AVIC International Rental Framework Agreement, (ii) the New AVIC International Tenancy Framework Agreement and (iii) the New AVIC International Property Management Framework Agreement will be subject to the reporting and announcement requirements, but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

BACKGROUND

Reference is made to the announcement dated 13 January 2014 in connection with the AVIC International Framework Agreements entered into between AVIC International and the Company.

RENEWAL OF CONTINUING CONNECTED TRANSACTIONS

The AVIC International Framework Agreements expired on 31 December 2016. To renew the agreements, on 13 January 2017 (after trading hours), the Company entered into the New AVIC International Framework Agreements with AVIC International, each of which for a term from the date of its execution to 31 December 2019 (subject to their respective conditions precedent). The salient terms of the New AVIC International Framework Agreements are set out below:

1. NEW AVIC INTERNATIONAL RENTAL FRAMEWORK AGREEMENT Date:

   13 January 2017

   Parties:

   Landlord: the Company

   Tenant: AVIC International

   Duration:

   The term of the New AVIC International Rental Framework Agreement shall commence from the date of its execution to 31 December 2019 and is conditional upon, among other things, the Company having obtained the approval from the Board and such approval as may be required under the Listing Rules.

   Details of the transactions:

   According to the New AVIC International Rental Framework Agreement, the Group agreed to lease to AVIC International and/or its Associated Companies real estate properties during the term of the New AVIC International Rental Framework Agreement.

   Historical figures and annual caps:

   Set out below is a summary of the historical transaction amounts of the Group's leasing real estate properties to AVIC International and/or its Associated Companies for the years ended 31 December 2014, 2015 and 2016:

   For the year ended 31 December 2014 For the year ended 31 December 2015 For the year ended 31 December 2016

   RMB22,784,837 RMB28,677,846 RMB27,615,518

   Set out below are the proposed annual caps for the transactions contemplated under the New AVIC International Rental Framework Agreement during its term:

   For the year ending 31 December 2017 For the year ending 31 December 2018 For the year ending 31 December 2019

   RMB35,000,000 RMB35,000,000 RMB35,000,000

   If the proposed annual caps are exceeded, the New AVIC International Rental Framework Agreement would be suspended from implementation. Following the suspension, the agreement and annual caps may be amended and/or approved in accordance with the relevant rules and regulations including the Listing Rules.

   The proposed annual caps are determined with reference to the historical transaction amounts of leasing of real estate properties by the Group to AVIC International and/or its Associated Companies, the leaseable area in the near future, the prevailing market rents for similar properties in nearby area, and the expected growth in market rents in the near future.

   The amounts to be received by the Group from AVIC International and/or its Associated Companies under the New AVIC International Rental Framework Agreement will be determined on fair and reasonable basis and based on fair market rate, and in principle, they will not deviate from the price and terms offered to Independent Third Parties.

   Reasons for and benefits of the transactions under the New AVIC International Rental Framework Agreement:

   The Group owns various real estate properties in areas such as Shenzhen, Beijing, Guangzhou, Xiamen and other cities in the PRC, while AVIC International and/or its Associated Companies established companies or branches in these areas. Leasing the real estate properties of the Group at rent similar to the prevailing market rents and on normal commercial terms after arm's length negotiation will increase revenue of the Group as a whole.

   The Directors (including the independent non-executive Directors) are of the view that the New AVIC International Rental Framework Agreement is entered into in the ordinary and usual course of business of the Group and on normal commercial terms, and the New AVIC International Rental Framework Agreement and the transactions contemplated thereunder are fair and reasonable and in the interests of the Company and the Independent Shareholders as a whole.

2. NEW AVIC INTERNATIONAL TENANCY FRAMEWORK AGREEMENT Date:

13 January 2017

Parties:

Landlord: AVIC International Tenant: the Company

Duration:

The term of the New AVIC International Tenancy Framework Agreement shall commence from the date of its execution to 31 December 2019 and is conditional upon, among other things, the Company having obtained the approval from the Board and such approval as may be required under the Listing Rules.

Details of the transactions:

According to the New AVIC International Tenancy Framework Agreement, AVIC International and/or its Associated Companies agreed to lease to the Group real estate properties during the term of the New AVIC International Tenancy Framework Agreement.

Historical figures and annual caps:

Set out below is a summary of the historical transaction amounts of AVIC International and/or its Associated Companies' leasing real estate properties to the Group for the years ended 31 December 2014, 2015 and 2016:

For the year ended 31 December 2014 For the year ended 31 December 2015 For the year ended 31 December 2016

RMB1,945,200 RMB2,358,386 RMB1,863,873