Fanhua announces details of Di

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GUANGZHOU, China, June 10, 2022 (GLOBE NEWSWIRE) — Fanhua Inc. (the “Company” or “Fanhua”) (FANH), a leading independent financial services provider in China, today announced details of its previously announced distribution of shares of CNFinance Holdings Limited (“CNFinance”), whose ADSs are currently trading on the New York Stock Exchange (:CNF).

Based on 1,074,291,784 Fanhua common shares outstanding as of June 9, 2022 or the record date, Fanhua will distribute 252,995,600 CNFinance common shares to Fanhua shareholders on a pro rata basis. Fanhua shareholders will receive 4.71 CNFinance common shares for every 20 outstanding Fanhua common shares held on the record date, or 0.2355 CNFinance ADSs for each Fanhua ADS, held as of the close of business on the record date. registration period set by Fanhua’s ADS custodian. . The CNFinance ordinary shares and the CNFinance ADSs (each CNFinance ADS represents 20 CNFinance ordinary shares) are collectively referred to as the CNFinance Shares. The distribution date is expected to be on or about June 28, 2022 (the “Distribution Date”). Following the distribution of CNFinance Shares, Fanhua’s ownership interest in CNFinance will decrease from approximately 18.5% currently to approximately 0.01%.

The Company will not distribute any fractional CNFinance shares. The number of fractional CNFinance Shares that would be distributable to each Fanhua shareholder in the form of ordinary shares will be rounded down to the nearest whole number and further rounded to the nearest whole multiple of 20.

As the depositary of the Company’s ADSs is treated as a holder on the books of the Company, the number of common shares of CNFinance distributed to the depositary will be rounded down to the nearest whole number and will then be rounded down to the whole multiple of 20 nearest, rather than rounding occurring on an ADS level holder. No fraction of CNFinance ADS will be distributed. Any fractional CNFinance ADSs will be aggregated and sold on behalf of Fanhua ADS holders who would otherwise be entitled to receive a fractional CNFinance ADS. Following the distribution and such sale, it is expected that each eligible holder of Fanhua ADSs will receive a cash payment in an amount equal to their pro rata share of the total net proceeds from the sale of fractional ADSs, if any. , less applicable fees. and expenses.

No action or payment is required by Fanhua shareholders to receive CNFinance Shares. A newsletter containing details regarding the distribution of CNFinance shares will be provided to Fanhua shareholders prior to the distribution date. Investors are encouraged to consult their financial advisors regarding the specific implications of buying or selling Fanhua common stock after the June 8, 2022 ex-dividend date.

The gross amount of the distribution of CNFinance stock or cash in lieu will be considered a taxable dividend for US federal income tax purposes to the extent it is paid out of our current or accrued income and profits. , as determined under US federal income tax principles. Since we do not intend to determine our income and profits based on US federal income tax principles, any distributions paid will generally be declared as a “dividend” for tax purposes. on US federal income. The amount of the dividend for these tax purposes will be equal to the sum of (x) the fair market value of CNFinance Shares received by a US holder and (y) any cash payment in lieu of fractional CNFinance ADSs paid to a US holder. . You should consider the June 28, 2022 distribution date as the dividend date. Fanhua stockholders should consult their tax advisors regarding the U.S. federal, state, local and foreign tax consequences of the distribution.

About Fanhua Inc.

Fanhua Inc. is a leading independent financial services provider. Through our online platforms and offline sales and service network, we offer a wide variety of retail financial products and services, including life and property and casualty insurance products. We also provide claims adjustment services, such as damage appraisals, investigations, authentications and loss estimates, as well as value-added services, such as emergency vehicle roadside assistance.

Our online platforms include: (1) Lan Zhanggui, an all-in-one platform that allows our agents to access and purchase a wide variety of insurance products, including life insurance, car insurance, accident insurance, travel insurance and standard health insurance products from several insurance companies on their mobile devices; (2) Baowang (www.baoxian.com), an online entry portal for comparing and purchasing short-term health, accident, travel and home insurance products; and (3) eHuzhu (www.ehuzhu.com), an online non-profit self-help platform in China.

As of March 31, 2022, our distribution and service network is composed of 734 sales outlets covering 23 provinces, autonomous regions and municipalities under central administration and 109 service outlets covering 31 provinces.

For more information about Fanhua Inc., please visit http://ir.Fanhuaholdings.com/.

Forward-looking statements

This press release contains forward-looking statements. These statements, including statements relating to the future financial and operating results of the Company, are made pursuant to the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. You may identify these statements forward-looking by terminology such as “”, “expects”, “believes”, “anticipates”, “intends”, “estimates” and similar statements. Among other things, the Management Quotes and the Business Outlook section contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about Fanhua and the industry. Potential risks and uncertainties include, but are not limited to, those related to its ability to attract and retain productive agents, particularly entrepreneurial agents, its ability to maintain and develop new business relationships with insurance company, its ability to execute its growth strategy, its ability to adapt to changes in the regulatory environment in the Chinese insurance industry, its ability to compete effectively with its competitors, quarterly variations in its operating results caused by factors beyond its control and macroeconomic conditions in China, the future development of the COVID-19 outbreak and their potential impact on sales of insurance products. All information provided in this press release is as of the date hereof, and Fanhua undertakes no obligation to update any forward-looking statements to reflect subsequent events or circumstances, or changes in its expectations, unless the law requires it. Although Fanhua believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will prove to be correct, and investors are cautioned that actual results may differ materially from anticipated results. Further information regarding the risks and uncertainties facing Fanhua is included in Fanhua’s filings with the United States Securities and Exchange Commission, including its Annual Report on Form 20-F.

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