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Date*:Hainan Airlines (Hong Kong) Co., Limited (the “Issuer”)Issue of RMB 3,000,000,000 6.25 per cent.Fixed Rate Notes due May 2017Guaranteed by Hainan Airlines Co., Ltd.(the “Guarantor”)Important Risk Warning: This is an investment product. The investment decision is yours but you should notinvest in this product unless the intermediary who sells it to you has explained to youthat the product is suitable for you having regard to your financial situation,investment experience and investment objectives. The Notes are NOT equivalent to a time deposit. Issuer’s/Guarantor’s risk - The Notes are subject to both the actual and perceivedmeasures of credit worthiness of the Issuer and the Guarantor. There is no assuranceof protection against a default by the Issuer and Guarantor in respect of the repaymentobligations. In the worst case scenario, you might not be able to recover the principaland any coupon if the Issuer and Guarantor default on the Notes. Additional risks are disclosed in the section of “Risk Factors” below and in therelevant offering documentation of the Notes (which is available upon request).Please refer to it for details.WARNINGThe contents of this Term Sheet have not been reviewed by any regulatory authorityin Hong Kong. You are advised to exercise caution in relation to the offer. If you arein any doubt about any of the contents of this document, you should obtainindependent professional advice.IMPORTANTIf you are in doubt as to any aspect of this offer, you should consult a licensedsecurities dealer, bank manager, solicitor, certified public accountant or otherprofessional adviser.Unless otherwise specified in this Term Sheet, any capitalised terms used but notdefined in this Term Sheet shall have their meanings as set out in the offeringdocumentation of the Notes (which is available upon request).1
No offer or sale will be made in Hong Kong, by means of any document, of anyNotes in respect of which the minimum principal amount to be subscribed orpurchased is less than HK 500,000 or its equivalent in another currency. Further, noperson shall issue or have in its possession for the purposes of issue, whether inHong Kong or elsewhere, any advertisement, invitation or document relating to theNotes, which is directed at, or the contents of which are likely to be accessed or readby, the public of Hong Kong (except if permitted to do so under the securities laws ofHong Kong).* If you receive this Term Sheet via email, the date of the Term Sheet is the date asstated on the email to which it is attached. If you receive this Term Sheet via fax, thedate of the Term Sheet is the date as stated on the document header or on the coverletter which accompanies the Term Sheet. If you are viewing this Term Sheet overthe internet, the date of the Term Sheet is the date as stated on the webpage to whichit is shown.2
Term SheetIssuerGuarantorTypeRating(A rating is not arecommendation to buy, sell orhold notes and may be subjectto suspension, change orwithdrawal at any time by theassigning rating agency. Pleasecontact HSBC staff if you wishto obtain (if any) updatedratings information prior tomaking your investment.)Issue DateMaturity DateCouponCoupon frequencyRedemption for Tax ReasonsRedemption Upon Change ofControlHainan Airlines (Hong Kong) Co., LimitedSeries No: N/AHainan Airlines Co.,Tranche No: N/ALtd.ISIN Code: SG6QD4000001Fixed Rate Senior Unsecured NotesIssuer’s rating: N/AGuarantor’s rating: N/AThe Notes’ rating: N/A (Moody’s) / N/A (S&P), as at 11 July2014(Source: Bloomberg)22/05/2014 (DD/MM/YYYY)22/05/2017 (DD/MM/YYYY)6.25 per cent. per annumSemi-AnnualThe Notes may be redeemed at the option of the Issuer inwhole, but not in part, at their principal amount togetherwith accrued interest, in the event that the Issuer or theGuarantor would be required to pay Additional Amounts asprovided or referred to in Condition 5(b) of the offeringdocumentation in respect of the Notes as a result of anychange in, or amendment to, the laws or regulations of HongKong or the PRC or any political subdivision or anyauthority thereof or therein having power to tax, or anychange in the application or official interpretation thereof.See “Terms and Conditions of the Bonds – Redemption andPurchase – Redemption for tax reasons” of the offeringdocumentation.A Noteholder shall have the right, at such Noteholder’soption, to require the Issuer to redeem all but not some onlyof its Notes at 101% of their principal amount, together withaccrued interest, upon the occurrence of a Change ofControl with respect to the Guarantor.See “Terms and Conditions of the Bonds – Redemption andPurchase – Redemption for Change of Control” of theoffering documentation.3
Status of the NotesThe Notes constitute direct, general, unconditional,unsubordinated and unsecured obligations of the Issuerwhich will at all times rank pari passu without anypreference or priority among themselves and at least paripassu with all other present and future unsecured andunsubordinated obligations of the Issuer, save for suchobligations as may be preferred by provisions of law that areboth mandatory and of general applicationStatus of the Notes andGuaranteeOffering DocumentationCurrency & Amount of theissueInterest Commencement DateDenominationMinimum InvestmentAmountRedemption at maturityInterest Payment Date(s)Listing and Pricing(Please contact HSBC staff for(if any) updated pricinginformation prior to makingyour investment.)Status of the GuaranteeThe Guarantor has in the Trust Deed unconditionally andirrevocably guaranteed the due and punctual payment of allsums from time to time payable by the Issuer in respect ofthe Notes. This guarantee (the “Guarantee of the Notes”)constitutes direct, general and unconditional obligations ofthe Guarantor which will at all times rank at least pari passuwith all other present and future unsecured obligations of theGuarantor, save as provided under Condition 3 (Covenants)of the offering documentation and save for such obligationsas may be preferred by provisions of law that are bothmandatory and of general application.The Offering Circular dated 15 May 2014 (the “OfferingCircular”)RMB 3,000,000,00022/05/2014 (DD/MM/YYYY)RMB 1,000,000 and integral multiples of RMB 10,000 inexcess thereofPer investor: RMB 1,000,000At par (100%)22 May and 22 November in each yearcommencing on 22 November 2014 up to and including theMaturity DateThe Notes are listed on the Singapore Exchange (the “Exchange”).Certain information with regards to the price and turnover (ifany) of the Notes may be available on the Exchange websiteat http://www.sgx.comThe information with regards to the last closing price andhistorical prices of the Notes, which is required by theSecurities and Futures Ordinance Schedule 7 Part 2 –Section 1(b), (c), (d) and (e), are not included in this TermSheet because: there is no record of any trading activity ofthe Notes on the Exchange; the historical prices includingbut not limited to the closing price on the last trading dayimmediately preceding (a) this offer, (b) the public4
Description of the Issuer(from page 66 of the OfferingCircular)Description of the Guarantor(from page 1 of the OfferingCircular)Contact Information of theIssuerContact Information of theGuarantorannouncement in relation to this offer, and (c) each of the 6months immediately preceding this offer, as well as thehighest and the lowest closing prices during the period oflast 6 months, are not available publicly through theExchange and/or other public sources and there has been nopublic announcement in relation to this offer.The Issuer is an “existing company” (CR No. 1611211)under the Companies Ordinance (Chapter 622 of the Laws ofHong Kong) and was incorporated in Hong Kong on 2 June2011 as a limited liability non-private company under theCompanies Ordinance (Chapter 32 of the Laws of HongKong) as in force before 3 March 2014. Its registered officeis Rooms 1105-12, 11th Floor, Nan Fung Tower, 173 DesVoeux Road Central, Hong Kong. The Issuer is a whollyowned subsidiary of the Guarantor.The Group, which refers to the Issuer, the Guarantor and itssubsidiaries, is a leading provider of air passenger, air cargoand airline-related services in China. It is the fourth-largestairline in China in terms of fleet size, number of passengerscarried and revenue in 2013. The Group provides scheduleddomestic, regional and international services using a hub andspoke strategy on 622 routes to 89 cities in 10 countries as of31 December 2013. In addition to its main route bases inHaikou and Beijing, the Group has established seven routebases in Xi’an, Taiyuan, Urumqi, Guangzhou, Lanzhou,Dalian, and Shenzhen, as well as an extensive networkacross China, and connecting Asia-Pacific, Europe andNorth America.The Group is one of seven airlines in the world ranked as a 5Star airline by the independent airline benchmarking firmSkytrax in 2013. The first and only PRC airline to receivethis rating, the Group received the rating for a thirdconsecutive year. The Group is well-recognised for itsoutstanding service quality by independent awards andsurveys of air travellers as a result of its highly trainedemployees, advance seat assignments, expedited check-in,attention to customer needs, frequent flyer programme, wellmaintained aircraft and other amenities.Registered Office Address:Rooms 1105-12, 11th Floor,Nan Fung Tower,173 Des Voeux Road CentralHong KongRegistered Office Address:HNA PlazaNo.7 Guoxing RoadHaikou City,Hainan Province, 570203,P.R. China5
Fees & ChargesSafe CustodyWaivedInterest CollectionWaivedStamp DutyRedemption at MaturityWaivedNo Hong Kong stamp duty is payable on the purchase of theNotes6
Risk FactorsThere are investment risks involved in buying the Notes (including the risks set out in the “RiskFactors” below and the risks disclosed in the relevant offering documentation of the Notes, whichis available upon request). Before applying for any of the Notes, you should consider the risksinvolved in investing in the Notes and consider whether the Notes are suitable for you in light ofyour own financial circumstances and investment objectives. If you are in any doubt, you shouldget independent professional advice.Risk factors relating to the Notes in general The Notes are mainly for medium to long term investment, not for short term speculation.You should be prepared to invest your funds in the Notes for the full investment tenor; youcould lose part or all of your investment if you choose to sell the Notes prior to maturity. The Notes are not equivalent to, nor should they be treated as a substitute for, time deposit.They are NOT protected deposits and are NOT protected by the Deposit ProtectionScheme in Hong Kong. Receipt of any interest and principal amount at maturity of the Notes is subject to the creditrisk and default risk of the Issuer and the Guarantor. In case of default, the holder of theNotes may not be able to receive back the principal amount invested or any interestpayable on the Notes. The holder of the Notes bears the credit risk and the default risk ofthe Issuer and the Guarantor and has no recourse to HSBC unless HSBC is the Issuer or theGuarantor itself. One or more independent credit rating agencies may assign credit ratings to an issue of theNotes, the Issuer and the Guarantor. Credit ratings may not reflect all of the risks relatedto the Notes, the Issuer, the Guarantor and other factors that may affect the value of theNotes. Credit ratings do not guarantee the creditworthiness of the Issuer and theGuarantor. A credit rating by the rating agency is not a recommendation to buy, sell or hold securitiesand may be subject to revision, suspension or withdrawal at any time. A suspension,reduction or withdrawal at any time of any rating assigned to the Notes may adverselyaffect the market price of the Notes. The market price of the Notes may fluctuate with market changes. Factors affecting themarket price of the Notes include, but are not limited to, fluctuations in interest rates, creditspreads, and liquidity premiums. In particular, investment in the Notes is susceptible tofluctuations in interest rates which may adversely affect the value of the Notes. The priceof the Notes may generally fall when the interest rates rise. The fluctuation in yieldgenerally has a greater effect on prices of longer tenor notes. There is an inherent risk thatlosses may be incurred rather than profit made as a result of buying and selling the Notes. The Issuer may have the right (but not the obligation) to early redeem the Notes prior tomaturity date upon occurrence of certain events (please refer to the offering documentationof the Notes for details). If the Issuer exercises its right to redeem the Notes before theymature, you may suffer a substantial loss under the Notes and you may not be able to enjoythe same rates of return when you re-invest the amount received under such earlyredemption in other investments with similar risk parameters.7
If you wish to sell the Notes, HSBC may but is not obliged to repurchase them based onthe prevailing market price under normal market circumstances, but the selling price maydiffer from the original buying price due to changes in market conditions.There may be exchange rate risks if you choose to convert payments made on the Notes toyour home currency. Notes may have no established trading market when issued, and one may never develop.Even if a secondary market does develop, the secondary market for the Notes may notprovide significant liquidity or may trade at prices based on the prevailing marketconditions and may not be in line with your expectations. Therefore, you may not be ableto sell the Notes easily before maturity or at prices that will provide you with a yieldcomparable to similar investments that have a developed secondary market. Please refer to the offering documentation of the Notes for other risk factors relating to theIssuer, the Guarantor and the Notes. Notes subject to redemption for tax reasons / redemption upon change of control- The Issuer may not have enough available funds at the time of the occurrence of anyredemption for tax reasons to make purchases of outstanding Notes, and the Issuer'sfailure to repurchase will constitute an event of default under the Notes and mayconstitute an event of default under other indebtedness of the Issuer. For furtherdetails, please refer to “Terms and Conditions of the Bonds – Redemption andPurchase – Redemption for tax reasons” and “Terms and Conditions of the Bonds –Redemption and Purchase – Redemption for Change of Control” of the offeringdocumentation of the Notes.RMB currency risk-RMB is currently not freely convertible and is subject to certain conversion restrictions.-For personal customers who are Hong Kong residents (i.e. holders of Hong KongIdentity Card), conversion of RMB is subject to a daily limit. Conversions conductedthrough RMB deposit accounts with banks in Hong Kong are subject to the limit of upto RMB20,000 per person per day. If you intend to convert an amount of RMBfrom/to another currency exceeding such daily limit, you should allow sufficientperiod for the conversion.-You should note that the value of RMB against other foreign currencies fluctuates andwill be affected by, amongst other things, the PRC government’s control (for example,the PRC government regulates conversion between RMB and foreign currencies),which may adversely affect your return under the RMB products when you convertRMB into your home currency.Interest rate risk-The value of RMB denominated Notes are subject to interest rate fluctuations, whichmay adversely affect the return and performance of the RMB products.8
Liquidity risk- Limited availability of underlying investments denominated in RMB- The secondary market for the RMB denominated Notes may not provide significantliquidity or trade at prices based on the prevailing market conditions, which may causethe holders to suffer significant loss especially where their prices have large bid/offerspreads, and may not be in line with the expectations of the holders.The RMB denominated Notes may not have access to invest directly in MainlandChina, which means that its choice of underlying investments denominated in RMBoutside Mainland China may be limited. As such, there may be adverse effects on thereturn and performance of RMB denominated Notes.Possibility of not receiving RMB upon redemption-The RMB denominated Notes may have a significant portion of non-RMBdenominated underlying investments. There is a possibility that you will not receivethe full amount in RMB upon redemption. This may be the case if the issuer is notable to obtain sufficient amount of RMB in a timely manner due to the exchangecontrols and restrictions applicable to the currency.9
Investor’s Commitment and AcknowledgementsWhen you place your order for the Notes, you are deemed to make a series of confirmations andacknowledgements, including that you:(i)have read and understood this Term Sheet, including the risks of investing in the Notes asexplained in the section “Risk Factors” before making any investment decision;(ii)understand that you should refer to the relevant offering documentation of the Notes,which is available upon request, for further details on the terms of the Notes and risksinvolved before making any investment decision;(iii)confirm that you are prepared to invest your funds in the Notes for the full investmenttenor; you could also lose part or all of your investment if you choose to sell your Notesprior to maturity;(iv)understand that this document is not intended to provide and should not be relied upon fortax, legal or accounting advice, investment recommendations or credit worthiness or otherevaluation of the Issuer and the Guarantor; prospective investors should consult their tax,legal, accounting and/or other advisors; and(v)understand that you should avoid excessive investment in a single type investment, withregard to its total proportion of your overall portfolio, in order to guard againstoverexposure to any single investment.How to find out the current market value of your investment after purchase?The current market value of your investment will be available upon request. Please contact ourstaff at any HSBC branch in Hong Kong.Note: If you have any feedback or complaint about any aspect of the service you have received,please contact our Hong Kong branches, call (852) 2233 3322 for HSBC Premier customers, (852)2748 8333 for HSBC Advance customers or (852) 2233 3000 for Other Personal Bankingcustomers, or write to the Customer Relations Department at P.O. Box No. 71169 KowloonCentral Post Office, or send an email to feedback@hsbc.com.hk. We will respond to a complaintwithin a reasonable period of time normally not exceeding 30 days in general circumstances. If youare not satisfied with the outcome of your complaint, you have the right to refer the matter to theEnforcement Department of Hong Kong Monetary Authority at 55th Floor Two InternationalFinance Centre, 8 Finance Street, Central, Hong Kong. For monetary dispute, you have the right torefer the matter to the Financial Dispute Resolution Centre at 15/F, Stanhope House, 734 King’sRoad, Quarry Bay, Hong Kong.References to websitesReferences to the websites stated in this document where further information may be obtainedare intended as guides for you to access further public information on the securities. Informationappearing on such websites is not part of the offering documents. HSBC accept no responsibilitywhatsoever that such other information, if available, is accurate and/or up-to-date, and noresponsibility is accepted in relation to any such information by us and our respective affiliates.10
DisclaimerThe Hongkong and Shanghai Banking Corporation Limited (“HSBC”) has issued this document. Theinformation contained in this termsheet is derived from sources HSBC believes to be reliable, but whichHSBC has not independently verified. HSBC makes no representation or warranty (express or implied) ofany nature nor is any responsibility of any kind accepted with respect to the completeness or accuracy of anyinformation, projection, representation or warranty (expressed or implied) in, or omission from, thisdocument. Any opinions expressed therein are given in good faith, but are subject to change without notice.No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of thisdocument. Please note that the above rates or prices are for indicative purposes only and may vary inaccordance with changes in market condition. Distribution of this document may be restricted by law incertain jurisdictions and the information contained herein is to the recipients and may not be reproduced orotherwise disseminated. HSBC and its affiliates and/or officers, directors and employees may have positionsin any instruments or currencies mentioned in this document and may from time to time add to or dispose ofsuch instruments or currencies. User of the information is advised to make independent judgment withrespect to any matter contained herein.Issued by The Hongkong and Shanghai Banking Corporation Limited (“HSBC”) registered at 1Queen’s Road Central, Hong KongThe Hongkong and Shanghai Banking Corporation Limited is the distributor which is a whollyowned subsidiary of HSBC Holdings plc, the holding company of the HSBC Group.The Hongkong and Shanghai Banking Corporation LimitedAuthorised and Regulated by Hong Kong Monetary AuthorityA registered institution under the Securities and Futures Ordinance, with CentralEntity Identity Number AAA523Registered Office: 1 Queen’s Road Central, Hong KongTel: 852 2996 6730, Member HSBC Group11
日期*:海南航空(香港)有限公司 ��。發行人／擔保人風險 – �載日期。12
，則條款表的日期為網頁所示日期。13
��保人評級: �件 – 發售文件「本債券的條款及條件 – ��未來的所有其他無抵14
�通函」）人民幣 3,000,000,000元22/05/2014 �資者: �佈及 � �卓越的服務而獲得高度認可。15
�免購買本票據無須支付香港印花稅16
��存款保障計劃之保障 ��風險。17
�款及條件 – �本債券的條款及條件 – ��可能會受到不 �款項18
- ��出現這種情況。19
�在香港的任何分行、致電(852) 2233 3322（滙豐卓越理財客戶），(852) 2748 8333（運籌理財客戶）或 間（通常30 香港中環金融街8 號國際金融中心2 期55 � ��不承擔責任。20
��權及監管根據 證券及期貨條例 3註冊辦事處： 香港皇后大道中1 號電話： 852 2996 6730，滙豐集團成員21
Issuer Hainan Airlines (Hong Kong) Co., Limited Guarantor Hainan Airlines Co., Ltd. Series No: N/A Tranche No: N/A ISIN Code: SG6QD4000001 Type Fixed Rate Senior Unsecured Notes Rating (A rating is not a recommendation to buy, sell or hold notes and may be subject to suspension, change or withdrawal at any time by the assigning rating agency .
