Termination of continuing connected transactions and continuing connected transactions under rule 14a.60 of the listing rules

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 this announcement.

廣東粵運交通股份有限公司

Guangdong Yueyun Transportation Company Limited*

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

(Stock Code: 03399)

TERMINATION OF CONTINUING CONNECTED TRANSACTIONS

AND

CONTINUING CONNECTED TRANSACTIONS UNDER

RULE 14A.60 OF THE LISTING RULES

TERMINATION OF CONTINUING CONNECTED TRANSACTIONS

Pursuant to the transactions contemplated under the Chaozhou Yueyun Equity Transfer Agreement and the Zhuhai Gongyun Equity Transfer Agreement as described in the Circular and the approval thereof at the EGM, the passenger transportation business of Kee Kwan Motor Road and Gongbei Transportation have been transferred to Zhuhai Gongyun, and 100% of the equity interest in each of Chaozhou Yueyun and Zhuhai Gongyun will be transferred to the Company.

Therefore, the Board hereby announces that on 20 November 2019, the following agreements were entered into by the Company:

1. The Company, Yueyun Investment Management and Chaozhou Yueyun entered into a termination agreement to terminate the Chaozhou Yueyun Entrusted Management Agreement with effect from the completion of the industrial and commercial registration procedures in respect of the transfer of 100% of the equity interest in Chaozhou Yueyun, and the parties shall no longer have any rights and obligations under the Chaozhou Yueyun Entrusted Management Agreement.
2. The Company, GCGC and Kee Kwan Motor Road entered into a termination agreement to terminate the Kee Kwan Motor Road Entrusted Management Agreement with effect from the completion of the industrial and commercial registration procedures in respect of the transfer of 100% of the equity interest in Zhuhai Gongyun, and the parties shall no longer have any rights and obligations under the Kee Kwan Motor Road Entrusted Management Agreement.
3. The Company, GCGC and Gongbei Transportation entered into a termination agreement to terminate the Gongbei Transportation Entrusted Management Agreement with effect from the completion of the industrial and commercial registration procedures in respect of the transfer of 100% of the equity interest in Zhuhai Gongyun, and the parties shall no longer have any rights and obligations under the Gongbei Transportation Entrusted Management Agreement.

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CONTINUING CONNECTED TRANSACTIONS UNDER RULE 14A.60 OF THE LISTING RULES

Upon completion of the Zhuhai Gongyun Equity Transfer Agreement as described in the Circular and the poll results announcement of the Company dated 20 November 2019, Zhuhai Gongyun will become a wholly-owned subsidiary of the Company.

The transactions contemplated under the Chartered Vehicle Operation Agreement, the Kee Kwan Lease Agreement, the Kee Kwan Zhuhai Lease Agreement and the Gongbei Lease Agreement will constitute continuing connected transactions of the Company upon completion of the transfer of 100% of the equity interest in Zhuhai Gongyun to the Company.

IMPLICATIONS UNDER THE LISTING RULES

Pursuant to Rule 14A.60(1) of the Listing Rules, the Company is required to comply with the annual review and disclosure requirements under Chapter 14A of the Listing Rules, including publication of an announcement and annual reporting, in respect of the continuing connected transactions under the Chartered Vehicle Operation Agreement, the Kee Kwan Lease Agreement, the Kee Kwan Zhuhai Lease Agreement and the Gongbei Lease Agreement, each of which is an agreement for a fixed period with fixed terms. The Company will comply in full with all applicable requirements under Chapter 14A of the Listing Rules upon any variation or renewal of any of the Chartered Vehicle Operation Agreement, the Kee Kwan Lease Agreement, the Kee Kwan Zhuhai Lease Agreement and the Gongbei Lease Agreement.

Reference is made to (i) the circular of Guangdong Yueyun Transportation Company Limited* (the "Company") dated 4 October 2019 in relation to the discloseable and connected transaction (the "Circular"), (ii) the poll results announcement of the Company dated 20 November 2019, and (iii) the continuing connected transactions announcement of the Company dated 31 August 2018 (the "Continuing Connected Transactions Announcement"). Unless otherwise defined, capitalized terms used in this announcement shall have the same meanings as those defined in the Continuing Connected Transactions Announcement and the Circular.

TERMINATION OF CONTINUING CONNECTED TRANSACTIONS

As disclosed in the Continuing Connected Transactions Announcement,

1. the Chaozhou Yueyun Entrusted Management Agreement was entered into between the Company, Yueyun Investment Management and Chaozhou Yueyun, pursuant to which Yueyun Investment Management shall entrust its 100% equity interests in Chaozhou Yueyun and its business operations to the Company for a term from 1 September 2018 to 31 December 2020;
2. the Kee Kwan Motor Road Entrusted Management Agreement was entered into between the Company, GCGC and Kee Kwan Motor Road, pursuant to which GCGC shall entrust its 100% equity interests in Kee Kwan Motor Road and its business operations to the Company for a term from 1 September 2018 to 31 December 2020; and

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1. the Gongbei Transportation Entrusted Management Agreement was entered into between the Company, GCGC and Gongbei Transportation, pursuant to which GCGC shall entrust its 100% equity interests in Gongbei Transportation and its business operations to the Company for a term from 1 September 2018 to 31 December 2020.

Pursuant to the transactions contemplated under the Chaozhou Yueyun Equity Transfer Agreement and the Zhuhai Gongyun Equity Transfer Agreement as described in the Circular and the approval thereof at the EGM, the passenger transportation business of Kee Kwan Motor Road and Gongbei Transportation have been transferred to Zhuhai Gongyun, and 100% of the equity interest in each of Chaozhou Yueyun and Zhuhai Gongyun will be transferred to the Company.

Therefore, the Board hereby announces that on 20 November 2019, the following agreements were entered into by the Company (collectively, the "Termination Agreements"):

1. The Company, Yueyun Investment Management and Chaozhou Yueyun entered into a termination agreement to terminate the Chaozhou Yueyun Entrusted Management Agreement with effect from the completion of the industrial and commercial registration procedures in respect of the transfer of 100% of the equity interest in Chaozhou Yueyun, and the parties shall no longer have any rights and obligations under the Chaozhou Yueyun Entrusted Management Agreement.
2. The Company, GCGC and Kee Kwan Motor Road entered into a termination agreement to terminate the Kee Kwan Motor Road Entrusted Management Agreement with effect from the completion of the industrial and commercial registration procedures in respect of the transfer of 100% of the equity interest in Zhuhai Gongyun, and the parties shall no longer have any rights and obligations under the Kee Kwan Motor Road Entrusted Management Agreement.
3. The Company, GCGC and Gongbei Transportation entered into a termination agreement to terminate the Gongbei Transportation Entrusted Management Agreement with effect from the completion of the industrial and commercial registration procedures in respect of the transfer of 100% of the equity interest in Zhuhai Gongyun, and the parties shall no longer have any rights and obligations under the Gongbei Transportation Entrusted Management Agreement.

The Directors (including the independent non-executive Directors) are of the view that the terms of the Termination Agreements and the transactions contemplated thereunder are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

As Mr. Chen Chuxuan and Mr. Chen Min, non-executive Directors, are the deputy chief accountant and the head of strategic development department and the head of legal affairs department of GCGC, respectively, they are considered to have a material interest in, and they have abstained from voting on, the resolutions passed by the Board to approve the Termination Agreements. Save as disclosed, none of the Directors has a material interest in, or is required to abstain from voting on, the Board resolutions in relation to the Termination Agreements and the transactions contemplated thereunder.

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CONTINUING CONNECTED TRANSACTIONS UNDER RULE 14A.60 OF THE LISTING RULES

Upon completion of the Zhuhai Gongyun Equity Transfer Agreement as described in the Circular and the poll results announcement of the Company dated 20 November 2019, Zhuhai Gongyun will become a wholly-owned subsidiary of the Company. Prior to the date of the Zhuhai Gongyun Equity Transfer Agreement, Zhuhai Gongyun had entered into the following agreements with

Gongbei Transportation, Kee Kwan Motor Road and Kee Kwan Motor Road Company Limited Zhuhai Company* (岐關車路有限公司珠海公司) ("Kee Kwan Zhuhai"), each being a wholly-

owned subsidiary of GCGC (a controlling shareholder of the Company) and therefore a connected person of the Company under the Listing Rules:

1. the chartered vehicle operation agreement dated 1 July 2019 between Zhuhai Gongyun and Kee Kwan Motor Road (the "Chartered Vehicle Operation Agreement");
2. the property lease agreement dated 1 July 2019 between Zhuhai Gongyun and Kee Kwan Motor Road (the "Kee Kwan Lease Agreement");
3. the property lease agreement dated 1 July 2019 between Zhuhai Gongyun and Kee Kwan Zhuhai (the "Kee Kwan Zhuhai Lease Agreement"); and
4. the property lease agreement dated 1 July 2019 between Zhuhai Gongyun and Gongbei Transportation (the "Gongbei Lease Agreement").

The transactions contemplated under the Chartered Vehicle Operation Agreement, the Kee Kwan Lease Agreement, the Kee Kwan Zhuhai Lease Agreement and the Gongbei Lease Agreement will constitute continuing connected transactions of the Company upon completion of the transfer of 100% of the equity interest in Zhuhai Gongyun to the Company.

Chartered Vehicle Operation Agreement

The principal terms of the Chartered Vehicle Operation Agreement are as follows:

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Pricing:The aggregate monthly chartering fee in respect of the 27 coaches payable by Zhuhai Gongyun is RMB676,000, which shall be payable on a monthly basis.

The chartering fee payable under the Chartered Vehicle Operation Agreement was determined by the parties after the arm's length negotiations and with reference to the prevailing market rate for comparable charter arrangements in the same or nearby geographical regions.

For the period between 1 July 2019 to 31 October 2019, the actual transaction amount of the continuing transactions under the Chartered Vehicle Operation Agreement was approximately RMB2,650,000. The estimated annual caps of the transactions under the Chartered Vehicle Operation Agreement for the period from the date of this announcement to 31 December 2019 and for the year ending 31 December 2020 are approximately RMB1,352,000 and approximately RMB4,056,000, respectively, which were calculated based on the agreed chartering fee under the Chartered Vehicle Operation Agreement.

Kee Kwan Lease Agreement

The principal terms of the Kee Kwan Lease Agreement are as follows:

The rent payable under the Kee Kwan Lease Agreement was determined by the parties after the arm's length negotiations and with reference to the prevailing market rate for comparable leased premises at the same or nearby locations.

For the period between 1 July 2019 to 31 October 2019, the actual transaction amount of the continuing transactions under the Kee Kwan Lease Agreement was approximately RMB294,800. The estimated annual caps of the transactions under the Kee Kwan Lease Agreement for the period from the date of this announcement to 31 December 2019 and for the year ending 31 December 2020 are approximately RMB147,400 and approximately RMB442,200, respectively, which were calculated based on the agreed rent under the Kee Kwan Lease Agreement.

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Kee Kwan Zhuhai Lease Agreement

The principal terms of the Kee Kwan Zhuhai Lease Agreement are as follows:

The rent payable under the Kee Kwan Zhuhai Lease Agreement was determined by the parties after the arm's length negotiations and with reference to prevailing market rate for comparable leased premises.

For the period between 1 July 2019 to 31 October 2019, the actual transaction amount of the continuing transactions under the Kee Kwan Zhuhai Lease Agreement was approximately RMB678,000. The estimated annual caps of the transactions under the Kee Kwan Zhuhai Lease Agreement for the period from the date of this announcement to 31 December 2019 and for the year ending 31 December 2020 are approximately RMB339,000 and approximately RMB1,017,000, respectively, which were calculated based on the agreed rent under the Kee Kwan Zhuhai Lease Agreement.

Gongbei Lease Agreement

The principal terms of the Gongbei Lease Agreement are as follows:

The rent payable under the Gongbei Lease Agreement was determined by the parties after the arm's length negotiations and with reference to the prevailing market rate for comparable leased premises at the same or nearby locations.

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For the period between 1 July 2019 to 31 October 2019, the actual transaction amount of the continuing transactions under the Gongbei Lease Agreement was approximately RMB1,238,400. The estimated annual caps of the transactions under the Gongbei Lease Agreement for the period from the date of this announcement to 31 December 2019 and for the year ending 31 December 2020 are approximately RMB619,200 and approximately RMB1,857,600, respectively, which were calculated based on the agreed rent under the Gongbei Lease Agreement.

INFORMATION ON THE GROUP AND THE PARTIES INVOLVED

The Group

The Company was established under the laws of the PRC as a joint stock limited company with limited liability and its H shares are listed on the Stock Exchange. The Group is principally engaged in the provision of travel service, material logistics business and other services.

Zhuhai Gongyun

Zhuhai Gongyun is a company established under the laws of the PRC with limited liability. Zhuhai Gongyun and its subsidiaries are principally engaged in passenger transportation service, charter coach, operation of bus terminals and tourist transportation service.

The GCGC Group

GCGC is a wholly state-owned enterprise under the supervision of the Guangdong State-owned Assets Commission. The GCGC Group is principally responsible for the investment, construction and management of the expressways in the Guangdong Province.

Kee Kwan Motor Road

Kee Kwan Motor Road is a company established in the PRC with limited liability and a wholly- owned subsidiary of GCGC. It is principally engaged in passenger transportation service.

Kee Kwan Zhuhai

Kee Kwan Zhuhai is an enterprise owned by the whole people* (全民所有制企業) and established under the laws of the PRC and a wholly-owned subsidiary of Kee Kwan Motor Road. It is principally engaged in passenger transportation service.

Gongbei Transportation

Gongbei Transportation is a company established under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of GCGC. It is principally engaged in passenger transportation service, passenger transportation taxi service, charter coach, cargo transportation and bus terminal service.

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REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS

The Chartered Vehicle Operation Agreement, the Kee Kwan Lease Agreement, the Kee Kwan Zhuhai Lease Agreement and the Gongbei Lease Agreement allow the GCGC Group to provide ancillary services and lease premises to Zhuhai Gongyun which enable Zhuhai Gongyun to engage in its principal businesses of passenger transportation service, charter coach, operation of bus terminals and tourist transportation service. The Board considers that it would be beneficial for the Group to continue the aforementioned agreements following its acquisition of Zhuhai Gongyun.

The Directors (including the independent non-executive Directors) are of the view that each of the Chartered Vehicle Operation Agreement, the Kee Kwan Lease Agreement, the Kee Kwan Zhuhai Lease Agreement and the Gongbei Lease Agreement was entered into in the ordinary and usual course of business of the Group, and the transactions contemplated thereunder are on normal commercial terms, which are fair and reasonable and in the interest of the Company and the Shareholders as a whole.

IMPLICATIONS UNDER THE LISTING RULES

Pursuant to Rule 14A.60(1) of the Listing Rules, the Company is required to comply with the annual review and disclosure requirements under Chapter 14A of the Listing Rules, including publication of an announcement and annual reporting, in respect of the continuing connected transactions under the Chartered Vehicle Operation Agreement, the Kee Kwan Lease Agreement, the Kee Kwan Zhuhai Lease Agreement and the Gongbei Lease Agreement, each of which is an agreement for a fixed period with fixed terms. The Company will comply in full with all applicable requirements under Chapter 14A of the Listing Rules upon any variation or renewal of any of the Chartered Vehicle Operation Agreement, the Kee Kwan Lease Agreement, the Kee Kwan Zhuhai Lease Agreement and the Gongbei Lease Agreement.

INTERNAL CONTROL AND RISK MANAGEMENT MEASURES

In addition to compliance with the requirements on annual review by external auditors and independent non-executive Directors under the Listing Rules in respect of the Group's continuing connected transactions, the Company has set up the supervision and audit department and the securities and legal department of the Company in charge of internal control and risk management to perform internal review and control over the continuing connected transactions of the Group, including reviewing contracts signed between the Group and connected persons, supervising the performance of procedures prior to signing of contracts as well as the fulfilment of transactions thereunder, regularly inspecting specific terms of the Group's transactions with connected persons and comparing with the terms of the same or similar type transactions of the Group entered into with non-connected persons, to ensure that the pricing and other contract terms for the Group's continuing connected transactions are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders and that the continuing connected transactions are conducted as agreed in the contracts and in compliance with the laws and regulations.

In particular, for the kind of transactions where comparable offers by independent third parties are available in the market (including, among other things, supplies and purchases of standardized products and services and leasing of properties) prior to entering into of any individual contracts pursuant to the relevant continuing connected transaction framework agreements, the relevant executive personnel of the relevant business department responsible for handling such kind of transactions will conduct a price inquiry exercise so as to determine the prevailing market prices and other relevant terms offered by at least two independent third parties operating at the vicinity

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for the same or similar type of transactions, so as to ensure that the terms offered by the relevant connected persons are fair and reasonable and comparable to those offered by independent third parties. If the offers made by independent third parties are more favorable to the Group, the Group would take up those offers of the independent third parties.

Following the entering into of the individual contracts pursuant to the relevant continuing connected transaction framework agreements, the Group will regularly examine the pricing of the transactions under the relevant continuing connected transaction framework agreements to ensure that they are conducted in accordance with the pricing policies thereof. For the kind of transactions where comparable offers by independent third parties are available in the market, the relevant executive personnel of the relevant business department responsible for handling the kind of transactions will also periodically (typically every three months) conduct the aforementioned price inquiry exercise with independent third parties to ensure that the terms of the existing continuing connected transactions are fair and reasonable and no less favourable than those offered by independent third parties. The securities and legal department of the Company will also periodically conduct internal review of the terms and transaction records of the continuing connected transactions against the terms and transaction records the same or similar type transactions entered into with non-connected persons.

The supervisory committee of the Company operates independently of the Board and performs supervisory duties over the Board, senior management and the Company. It conducts annual review over the Group's connected transactions and expresses its opinions in the annual supervisors' report regarding whether such connected transactions would damage the interests of the Shareholders and the Company.

The audit and corporate governance committee of the Company holds interim and annual meetings with its external auditors to, among other things, review and discuss the Group's connected transactions and make recommendations and provide advices to the Company in respect of matters discovered.

To ensure the continuing connected transactions do not exceed the annual caps, the relevant business departments of the Company and its subsidiaries shall fill in and submit a monthly statistical chart for continuing connected transactions to the securities and legal department and the financial department of the Company for summary, analysis and follow-up. In the event that the amount of the continuing connected transactions incurred and to be incurred for a financial year is expected to possibly reach the annual caps, the securities and legal department of the Company will follow up forthwith by reporting and proposing a response to the management of the Company, and in case that an amendment to the annual caps is required, report particulars to the Board and hold a Board meeting for considering the matters thereabout to ensure compliance of the requirements under the Listing Rules.

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The Company arranges compliance trainings for the directors, supervisors, senior management and staff from the relevant departments of the Company and its subsidiaries from time to time, primarily focusing on the rules relating to connected transactions under Chapter 14A of the Listing Rules.

By order of the Board

Guangdong Yueyun Transportation Company Limited

Xuan Zongmin

Chairman of the Board

Guangzhou, the PRC

22 November 2019

As at the date of this announcement, the Board comprises Mr. Xuan Zongmin (Chairman), Mr. Tang Yinghai, Mr. Yao Hanxiong, Mr. Wen Wu and Mr. Zhang Xian as executive Directors, Mr. Chen Min and Mr. Chen Chuxuan as non-executive Directors, and Mr. Jin Wenzhou, Ms. Lu Zhenghua, Ms. Wen Huiying and Mr. Zhan Xiaotong as independent non-executive Directors.

• For identification purpose only

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