Supplemental circular for the 2020 first extraordinary general meeting, determination of the price of purchasing the repurchased shares under and the expected scale of the employee stock ownership scheme and supplemental notice of the 2020 first extraordinary general meeting

THIS SUPPLEMENTAL CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of the Supplemental Circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of the Supplemental Circular.

If you are in any doubt as to any aspect of the Supplemental Circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant, independent adviser or other professional adviser.

If you have sold or otherwise transferred all your shares in China Merchants Securities Co., Ltd., you should at once hand the Supplemental Circular and the enclosed Second Proxy Form to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

(A joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 6099)

SUPPLEMENTAL CIRCULAR

FOR THE 2020 FIRST EXTRAORDINARY GENERAL MEETING,

DETERMINATION OF THE PRICE OF PURCHASING

THE REPURCHASED SHARES UNDER AND THE EXPECTED SCALE OF

THE EMPLOYEE STOCK OWNERSHIP SCHEME

AND

SUPPLEMENTAL NOTICE OF THE

2020 FIRST EXTRAORDINARY GENERAL MEETING

Pursuant to the Articles of Association, Shareholders who individually or jointly hold 3% or more of the total number of the Company's voting shares for a consecutive of 180 days or more shall be entitled to propose motions in writing to the Company no later than 10 days before the holding of the general meeting of the Company. China Merchants Finance Investment Holdings Co., Ltd. (directly holding approximately 23.51% of the issued Shares of the Company) has submitted a supplemental proposal to the Company in relation to the determination of the price of purchasing the repurchased Shares under and the expected scale of the Employee Stock Ownership Scheme as an ordinary resolution at the EGM for consideration and approval, details of which are set forth in this supplemental circular (the "Supplemental Circular").

The Supplemental Circular shall be read in conjunction with the circular of the EGM dated November 29, 2019 (the "First Circular") and the announcement of the Company dated December 24, 2019 in relation to the change of venue of the EGM.

A notice convening the EGM to be held on Wednesday, January 15, 2020 at 10:00 a.m. was despatched on November 29, 2019 (the "First Notice"). A supplemental notice notifying the EGM to be held at Shenzhen Ming Wah International Convention Centre, No. 8 Gui Shan Road, Shekou Industrial Zone, Nanshan District, Shenzhen on Wednesday, January 15, 2020 at 10:00 a.m. and containing an additional proposed resolution is set out on pages N-1 to N-2 of the Supplemental Circular. A second proxy form (the "Second Proxy Form") containing the original proposed resolutions and the additional proposed resolution is also enclosed herewith.

If you are not able to attend the EGM, please complete and return the Second Proxy Form in accordance with the instructions printed thereon as soon as practicable and in any event not less than 24 hours before the time stipulated for the holding of the EGM or any adjournment thereof and deposit it together with the notarised power of attorney or other document of authorization with the Company's H Share registrar, Computershare Hong Kong Investor Services Limited (for holders of H Shares). Completion and return of the Second Proxy Form will not preclude you from attending and voting at the EGM in person.

December 27, 2019

- i -

DEFINITIONS

In this Supplemental Circular, the following expressions shall have the following meanings

unless the context otherwise requires:

- 1 -

- 2 -

LETTER FROM THE BOARD

(A joint stock company incorporated in the People's Republic of China with limited liability)

SUPPLEMENTAL CIRCULAR

FOR THE 2020 FIRST EXTRAORDINARY GENERAL MEETING,

DETERMINATION OF THE PRICE OF PURCHASING

THE REPURCHASED SHARES UNDER AND THE EXPECTED SCALE OF

THE EMPLOYEE STOCK OWNERSHIP SCHEME

AND

SUPPLEMENTAL NOTICE OF THE

2020 FIRST EXTRAORDINARY GENERAL MEETING

INTRODUCTION

References are made to (i) the announcement of the Company dated December 26, 2019 in relation to the determination of the price of purchasing the repurchased Shares under and the expected scale of the Employee Stock Ownership Scheme; (ii) the announcement of the Company dated December 24, 2019 in relation to the change of venue of the EGM; (iii) the First Circular; and (iv) the First Notice, which contain, among others, the original proposed resolutions to be submitted at the EGM for Shareholders' approval. This Supplemental Circular should be read together with the First Circular and the announcement of the Company dated December 24, 2019 in relation to the change of venue of the EGM.

- 3 -

LETTER FROM THE BOARD

Pursuant to the Articles of Association, Shareholders who individually or jointly hold 3% or more of the total number of the Company's voting shares for a consecutive of 180 days or more shall be entitled to propose motions in writing to the Company no later than 10 days before the holding of the general meeting of the Company. China Merchants Finance Investment Holdings Co., Ltd. (directly holding approximately 23.51% of the issued Shares of the Company) has submitted a supplemental proposal to the Company in relation to the determination of the price of purchasing the repurchased Shares under and the expected scale of the Employee Stock Ownership Scheme as an ordinary resolution at the EGM for consideration and approval, details of which are set forth in the Supplemental Circular.

DETERMINATION OF THE PRICE OF PURCHASING THE REPURCHASED SHARES UNDER AND THE EXPECTED SCALE OF THE EMPLOYEE STOCK OWNERSHIP SCHEME

References are made to the announcement of the Company in relation to the proposed adoption of the Employee Stock Ownership Scheme, the overseas regulatory announcements in relation to the Announcement on Resolutions of the 25th Meeting of the Sixth Session of the Board of China Merchants Securities Co., Ltd. 《( 招商證券股份有限公司第 六屆董事會第二十五次會議決議公告》) and the Employee Stock Ownership Scheme of China Merchants Securities Co., Ltd. (Draft) 《( 招商證券股份有限公司員工持股計劃（草案）》) all dated October 15, 2019 (the "Overseas Regulatory Announcements") and the First Circular.

Pursuant to the relevant resolutions approved on the 2019 first extraordinary general meeting, the 2019 first A Shareholders class meeting and the 2019 first H Shareholders class meeting held on May 20, 2019 by the Company, the Company will repurchase A Shares using its own funds through the centralized bidding (the "Repurchase") for the implementation of the Employee Stock Ownership Scheme. As of December 19, 2019, the aggregated amount of A Shares repurchased by the Company through the centralized bidding is 40,020,780 A Shares, representing approximately 0.5974% of the total Shares of the Company. The highest concluded price is RMB18.45/A Share and the lowest concluded price is RMB16.14/A Share. The average repurchasing price is RMB16.5888/A Share (excluding transaction fees) and the Company paid in aggregate RMB663,895,568.36 (excluding transaction fees).

The price of repurchased A Shares to be purchased under the Employee Stock Ownership Scheme is in principle equal to the average price of the Repurchase (including transaction fees) according to the Overseas Regulatory Announcements. The aggregated amount of transaction fees of the Repurchase and the relevant fees of establishing the Employee Stock Ownership Scheme is RMB98,904.98.

At the 28th meeting of the sixth session of the Board held on December 26, 2019, the Company considered and approved, among others, the resolution in relation to determining the price of purchasing repurchased Shares under and the expected scale of the Employee Stock Ownership Scheme of the Company 《( 關於明確公司員工持股計劃購買 回購股票的價格及計劃規模的議案》) (the "Resolution"). Pursuant to the actual conditions of the Repurchase and the relevant requirement of the Employee Stock Ownership Scheme of China Merchants Securities Co., Ltd. (Draft), the Board confirmed that the price of the Subject A Shares to be purchased under the Employee Stock Ownership Scheme shall be RMB16.5912/A Share. The number of Subject A Shares available for subscription under the Employee Stock Ownership Scheme shall not exceed 40,020,780 A Shares. The total subscription amount of the participants shall not exceed RMB664 million. The final number of Subject A Shares to be purchased and the subscription amount under the Employee Stock Ownership Scheme shall be determined according to the capital scale of employees participating in the Employee Stock Ownership Scheme.

- 4 -

LETTER FROM THE BOARD

Effect of the Shareholding Structure of the Company

For illustrative purpose only, the following table sets out the Company's shareholding structure as at the Latest Practicable Date and immediately after completion of the Employee Stock Ownership Scheme (assuming (1) the number of A Shares repurchased by the Company is not more than 40,020,780 A Shares; (2) the Employee Stock Ownership Scheme takes all 40,020,780 A Shares; and (3) there are no other changes to the shareholding structure of the Company from the Latest Practicable Date up to the date of the completion of the Employee Stock Ownership Scheme):

- 5 -

LETTER FROM THE BOARD

Notes:

1. The Shares repurchased by the Company but not yet cancelled were held by the Company as treasury shares.
2. The total number of participants of the Scheme shall not exceed 1,157. The participants of the Scheme are Directors, Supervisors, senior management, employees at D Level or above and other core cadres who have entered into labour contracts with the Company and its wholly-owned subsidiaries. The entitlements in the Employee Stock Ownership Scheme subscribed by the participants of the Scheme and the amount of corresponding entitlements shall be subject to the actual implementation at that time.
3. Numbers in percentage may not add up to a total figure due to rounding.

EGM

A notice convening the EGM to be held on Wednesday, January 15, 2020 at 10:00 a.m. was despatched on November 29, 2019. A supplemental notice notifying the EGM to be held at Shenzhen Ming Wah International Convention Centre, No. 8 Gui Shan Road, Shekou Industrial Zone, Nanshan District, Shenzhen on Wednesday, January 15, 2020 at 10:00 a.m. and containing an additional proposed resolution is set out on pages N-1 to N-2 of the Supplemental Circular. The Second Proxy Form containing the original proposed resolutions and the additional proposed resolution is also enclosed herewith.

If you are not able to attend the EGM, please complete and return the Second Proxy Form in accordance with the instructions printed thereon as soon as practicable and in any event not less than 24 hours before the time stipulated for the holding of the EGM or any adjournment thereof and deposit it together with the notarised power of attorney or other document of authorization with the Company's H Share registrar, Computershare Hong Kong Investor Services Limited (for holders of H Shares). Completion and return of the Second Proxy Form will not preclude you from attending and voting at the EGM in person.

RECOMMENDATION

The Directors consider that the proposed resolution are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends that all Shareholders vote in favour of the resolution to be proposed at the EGM.

Yours faithfully,

By order of the Board

China Merchants Securities Co., Ltd.

HUO Da

Chairman

- 6 -

SUPPLEMENTAL NOTICE OF THE EGM

(A joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 6099)

SUPPLEMENTAL NOTICE OF THE

2020 FIRST EXTRAORDINARY GENERAL MEETING

References are made to (i) the notice (the "First Notice") and the circular (the "First Circular") both dated November 29, 2019 of China Merchants Securities Co., Ltd. (the "Company"), which set out, among others, the time for convening the 2020 first extraordinary general meeting (the "EGM") of the Company and the resolutions to be proposed at the EGM for consideration and approval by Shareholders; and (ii) the announcement of the Company dated December 24, 2019 in relation to the change of venue of the EGM.

Supplemental notice is hereby given that the EGM will be held at Shenzhen Ming Wah International Convention Centre, No. 8 Gui Shan Road, Shekou Industrial Zone, Nanshan District, Shenzhen on Wednesday, January 15, 2020 at 10:00 a.m., for the purpose of considering and approving the following supplemental resolution, in addition to the resolutions set out in the First Notice:

ORDINARY RESOLUTION

1. To consider and approve the resolution in relation to determining the price of purchasing repurchased Shares under and the expected scale of the Employee Stock Ownership Scheme of the Company

By order of the Board

China Merchants Securities Co., Ltd.

HUO Da

Chairman

Shenzhen, the PRC

December 27, 2019

- N-1 -

SUPPLEMENTAL NOTICE OF THE EGM

Notes:

1. Save for the above supplemental resolution, there are no other changes to the resolutions set out in the First Notice. For details of other resolutions to be considered and approved at the EGM, eligibility for attending the EGM, registration procedures, arrangements for closure of register of members and other relevant matters, please refer to the First Notice and the First Circular both dated November 29, 2019.
2. Proxy
   The proxy form (the "First Proxy Form") despatched along with the First Notice did not contain the additional resolution No. (4) as set out in this supplemental notice. As such, a second proxy form (the "Second Proxy Form") has been prepared by the Company and is enclosed with this supplemental notice. Holders of H Shares shall deliver the Second Proxy Form to Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong by a designated person or by post in any event not less than 24 hours before the time appointed for holding the EGM or any adjournment thereof. Arrangements in relation to proxies of shareholders of A Shares of the Company will be determined and announced separately in the PRC by the Company.
   To be valid, the Second Proxy Form shall be delivered in person or by post by the holders of H Shares of the Company to the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong not less than 24 hours before the time for holding the EGM or any adjournment thereof or the time appointed for voting by poll. If the Second Proxy Form is signed by a person under a power of attorney or other authority, a notarial copy of that power of attorney or authority shall be deposited at the same time as mentioned in the Second Proxy Form. Completion and return of the Second Proxy Form will not preclude shareholders from attending and voting in person at the EGM or any adjournment thereof should they so wish.
   Shareholders who had returned the First Proxy Form to the Company's H Share registrar should note that:
3. 1. if a shareholder did not return the Second Proxy Form to the Company's H Share registrar, the First Proxy Form, if correctly completed, will be deemed as a valid proxy form lodged by him/her. The proxy appointed by the shareholder will be entitled to cast the vote at his/her discretion or to abstain from voting on any resolution properly put to the EGM (except for those resolutions to which the shareholders has indicated his/her voting direction in the First Proxy Form), including the additional resolution No. (4) set out in this supplemental notice of the EGM.
   2. if a shareholder delivered the Second Proxy Form to the Company's H Share registrar not less than 24 hours before the time appointed for holding the EGM or any adjournment thereof, the First Proxy Form previously lodged by him/her will be revoked and superseded by the Second Proxy Form. The Second Proxy Form, if correctly completed, will be deemed as a valid proxy form lodged by such shareholder.
   3. if a shareholder delivered the Second Proxy Form to the Company's H Share registrar later than 24 hours before the time appointed for holding the EGM or any adjournment thereof, the Second Proxy Form will be invalid and the First Proxy Form previously delivered by the shareholder will be revoked. The vote of proxy appointed by the shareholder, either by the First Proxy Form or the Second Proxy Form, by the invalid or revoked form of proxy will not be counted for the voting of the resolutions. Therefore, shareholders are recommended to deliver the Second Proxy Form no later than the closing time. Shareholder shall be present in person if he/she intended to vote at the EGM.

As at the date of this notice, the executive directors of the Company are Mr. HUO Da and Mr. XIONG Jiantao; the non-executive directors of the Company are Ms. SU Min, Mr. SU Jian, Mr. XIONG Xianliang, Ms. PENG Lei, Mr. HUANG Jian, Mr. WANG Daxiong and Mr. WANG Wen; and the independent non-executive directors of the Company are Mr. XIANG Hua, Mr. XIAO Houfa, Mr. XIONG Wei, Mr. HU Honggao and Mr. WONG Ti.

- N-2 -