MicroPort Scientific : Disposal Transactions -Proposed Transfer of Equity Interest in MP CardioFlow and Proposed Capital Increase of MP CardioFlow

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.

(Incorporated in the Cayman Islands with limited liability)

The Board is pleased to announce that on 20 October 2017, the Original Shareholders and the Target Company, after independent negotiations with the Subsequent Investor at an arm's length basis, entered into the share transfer and capital increase agreement with the Subsequent Investor, pursuant to which, the Subsequent Investor agreed to subscribe for 1.6928% of the enlarged share capital of the Target Company upon the completion of the Transfer and Investment Transactions at an aggregate consideration of RMB28,881,530 and to purchase 1.1897% equity interest in the Target Company held by Chenxue Investment and Jianyi Xinghe at an aggregate consideration of RMB21,118,470. The Initial Investors have agreed to waive their pre-emptive rights in respect of the Subsequent Transactions. As the Subsequent Investor was introduced as an additional member of the Investors, the Original Shareholders, the Target Company, the Initial Investors and the Subsequent Investor entered into the shareholders' agreement on 20 October 2017.

Through introducing the Subsequent Investor and after entering into the Subsequent Transactions, the Company is able to optimise its financial structure and support its ongoing development of various business sectors. Meanwhile, it will enable MP Cardioflow to bring in multiple well-known strategic investors in the market as well as the corresponding market resources, which will provide MP CardioFlow with the supplemented working capital required for its product research and development, manufacturing and marketing activities, and effectively promote the development of MP Cardioflow as well as enhance its market competitiveness.

The Target Company, MP CardioFlow, was incorporated in the PRC with limited liability, and is a leading company in China engaged in the research, development and manufacturing of high- end cardiac valve intervention medical device. It has an extensive research and development layout of innovation in the cardiac valve intervention business. As at the date of this announcement, the Company controls 68.7072% of its equity interest through MicroPort Shanghai.

The Subsequent Transactions will be carried out through three steps, among which the issues of new capital under Subsequent Step I Investment and Step III Investment are essentially disposals by the Company, while the transfers of equity interests by Chenxue Investment and Jianyi Xinghe to the Subsequent Investor are not transactions of the Company because they are transactions among the shareholders of the Target Company, instead of transactions between the Company and the Subsequent Investor. As such, pursuant to Rules 14.22 and 14.23 of the Listing Rules, the issues of new capital under Subsequent Step I Investment and Step III Investment shall be aggregated.

In addition, as stated in the Announcements, the Original Shareholders, the Target Company and the Initial Investors entered into the Share Transfer and Capital Increase Agreement on 22 August 2017 in relation to the transfer of equity interest in and capital increase of the Target Company. Pursuant to Rules 14.22 and 14.23 of the Listing Rules, the Subsequent Transactions and the transactions contemplated under the Share Transfer and Capital Increase Agreement shall be aggregated as if they were one transaction since they are all entered into within a 12-month period and involve the disposal of equity interest in the same company.

Pursuant to Rule 14.74(1) of the Listing Rules, as the Investors' Put Options are not exercisable at the Company's discretion, the Investors' Put Options will be classified as if they had been exercised at the time of grant. As the highest applicable percentage ratio applied in accordance with Rule 14.07 of Listing Rules in respect of the Investors' Put Options is more than 5% but less than 25%, the granting of Investors' Put Options is subject to announcement and reporting requirements, but exempt from independent shareholders' approval requirement under Chapter 14 of the Listing Rules.

As the highest applicable percentage ratios applied (after aggregation) in accordance with Rule 14.07 of Listing Rules in respect of the transactions mentioned above are more than 5% but less than 25%, the Subsequent Transactions are subject to announcement and reporting requirements, but exempt from independent shareholders' approval requirement under Chapter 14 of the Listing Rules.

We refer to the announcements of the Company dated 22 August 2017 and 4 September 2017 in respect of certain investors' (the "Initial Investors") investments in MP Cardioflow (the "Announcements"). Unless otherwise stated, capitalized terms used herein have the same meanings as those defined in the Announcements.

As stated in the Announcements, pursuant to the Share Transfer and Capital Increase Agreement entered by the Original Shareholders, the Target Company and the Initial Investors on 22 August 2017, the Target Company and the Original Shareholders have the right to introduce additional investors to the Target Company (the "Subsequent Investor(s)", together with the Initial Investors, the "Investors") under the price and terms (except the nomination rights) of the Share Transfer and Capital Increase Agreement and Shareholders' Agreement within 60 days upon the completion of Step I Investment and no later than the beginning of Step II Investment, with a total consideration of up to RMB50,000,000. The Subsequent Investors will enter into the share transfer and capital increase agreement, shareholder's agreement and the other agreements the Initial Investors have entered into with the Target Company in respect of its investment in the Target Company. After entering the new share transfer and capital increase agreement, the Subsequent Investors will have the rights and obligations thereunder as additional members of the Investors. The Initial Investors agreed to waive their pre-emptive rights in respect of the equity acquisition and capital increase of the Target Company by the Subsequent Investors, except for any additional investment made by any of the Initial Investors under the amount of RMB50,000,000 mentioned above.

The Board is pleased to announce that on 20 October 2017, the Original Shareholders and the Target Company, after independent negotiations with the Subsequent Investor at an arm's length basis, entered into the share transfer and capital increase agreement (the "Subsequent Share Transfer and Capital Increase Agreement") with the Subsequent Investor, pursuant to which, the Subsequent Investor agreed to subscribe for 1.6928% of the enlarged share capital of the Target Company upon the completion of the Transfer and Investment Transactions at an aggregate consideration of RMB28,881,530 and to purchase 1.1897% equity interest in the Target Company held by Chenxue Investment and Jianyi Xinghe at an aggregate consideration of RMB21,118,470. The Initial Investors have agreed to waive their pre-emptive rights in respect of the Subsequent Transactions. As the Subsequent Investor was introduced as an additional member of the Investors, the Original Shareholders, the Target Company, the Initial Investors and the Subsequent Investor entered into the shareholders' agreement (the "Subsequent Shareholders' Agreement") on 20 October 2017.

As at the date of this announcement, the Step I Investment under the Share Transfer and Capital Increase Agreement has been completed. The share capital of the Target Company has increased from RMB11,231,000 to RMB12,631,121, and the Company's interest in the Target Company has decreased from 77.2727% to 68.7072%.

Upon completion of the Subsequent Step I Investment, Step II Investment and Step III Investment, the share capital of the Target Company will further increase from RMB12,631,121 to RMB13,410,316, the Initial Investors and the Subsequent Investor will hold 24.7888% and 2.8825% equity interest in the Target Company, respectively, and the Company's interest in the Target Company will further decrease from 68.7072% to 64.7151%. Besides, the Subsequent Investor will also be granted the Investors' Put Options under the Subsequent Shareholders' Agreement.

Pursuant to the Subsequent Share Transfer and Capital Increase Agreement, the Subsequent Transactions with the Subsequent Investor will be carried out through the following three steps, among which, step II and step III of the Subsequent Transactions will be consolidated into the Step II Investment and the Step III Investment contemplated under the Share Transfer and Capital Increase Agreement.

The step I under the Subsequent Share Transfer and Capital Increase Agreement ("Subsequent Step I Investment") will be carried out through the following two phases:

1. Chenxue Investment agreed to transfer 0.4210% equity interest in the Target Company to the Subsequent Investor at a consideration of RMB6,155,303 ("Subsequent Step I Investment(i)"). The Original Shareholders agreed to waive their pre-emptive rights to such transfer.

2. the Subsequent Investor agreed to subscribe in cash for, and the Target Company agreed to issue 1.2725% equity interest in the enlarged share capital of the Target Company at a consideration of RMB18,844,697 ("Subsequent Step I Investment(ii)"). The Original Shareholders agreed to waive their pre-emptive rights to the subscription of such newly issued shares of the Target Company.

The Subsequent Investor will participate in the Step II Investment as an additional member in addition to the Initial Investors. Under the Step II Investment, Jianyi Xinghe agreed to transfer 0.8313% equity interest to the Subsequent Investor at a consideration of RMB14,963,167. The Original Shareholders agreed to waive their pre-emptive rights to such transfer. Upon the completion of the Step II Investment, Jianyi Xinghe will cease to be a shareholder of the Target Company.

The Subsequent Investor will participate in the Step III Investment as an additional member in addition to the Initial Investors. Under the Step III Investment, the Subsequent Investor agreed to subscribe in cash for, and the Target Company agreed to issue 0.4788% equity interest in the enlarged share capital of the Target Company at a consideration of RMB10,036,833. The Original Shareholders agreed to waive their pre-emptive rights to the subscription of such newly issued shares.