Guodian Technology & Environment : CONNECTED TRANSACTION - FORMATION OF A JOINT VENTURE COMPANY

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.

਷ཥ߅Ҧᐑڭණྠٰ΅Ϟࠢʮ̡

GUODIAN TECHNOLOGY & ENVIRONMENT GROUP CORPORATION LIMITED* (a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock code: 01296)

CONNECTED TRANSACTION

FORMATION OF A JOINT VENTURE COMPANY

The Board is pleased to announce that, on 18 March 2021 (after trading hours), Xinjiang Energy, Derun Economic Construction, Xinjiang Electric Power, Longyuan Environmental (being a wholly-owned subsidiary of the Company) and TBEA Xinjiang entered into the JV Agreement, pursuant to which the JV Company will be jointly established. Pursuant to the JV Agreement, the registered capital of the JV Company shall be RMB200,010,000. Longyuan Environmental will contribute RMB30,001,500 in cash towards the JV Company, accounting for 15% of the total registered capital of the JV Company.

As at the date of this announcement, China Energy directly and indirectly holds approximately 78.4% of the issued share capital of the Company and is a controlling shareholder of the Company. As Xinjiang Energy is a wholly-owned subsidiary of China Energy, Xinjiang Energy is a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the JV Agreement and the transactions contemplated thereunder constitute a connected transaction of the Company under Chapter 14A of the Listing Rules. Since the highest applicable percentage ratio in respect of the Group's capital contribution to the JV Company pursuant to the JV Agreement is more than 0.1% but less than 5%, the JV Agreement is subject to the reporting and announcement requirements but is exempt from the circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.

• 1. INTRODUCTION

  The Board is pleased to announce that, on 18 March 2021 (after trading hours), Xinjiang Energy, Derun Economic Construction, Xinjiang Electric Power, Longyuan Environmental (being a wholly-owned subsidiary of the Company) and TBEA Xinjiang entered into the JV Agreement, pursuant to which the JV Company will be jointly established. Pursuant to the JV Agreement, the registered capital of the JV Company shall be RMB200,010,000. Longyuan Environmental will contribute RMB30,001,500 in cash towards the JV Company, accounting for 15% of the total registered capital of the JV Company.

• 2. JV AGREEMENT

  Details of the JV Agreement are set out below:

  Date

  18 March 2021

  Parties

  • (1) Xinjiang Energy;

  • (2) Derun Economic Construction;

  • (3) Xinjiang Electric Power;

  • (4) Longyuan Environmental; and

  • (5) TBEA Xinjiang.

  Please refer to the section headed "4. Information of the Parties" in this announcement for further details of the parties to the JV Agreement.

  Principal Terms

  Business Activities

  Pursuant to the JV Agreement, the JV Company will be engaged in (i) the generation, sale and purchase of electricity; (ii) the development, operation and management of cooling, heating, water, steam and gas supply projects; (iii) the installation, testing and maintenance of power and heating facilities; (iv) logistics services; (v) renewable energy, integrated energy and energy conservation, and environmental protection technology development and services; (vi) contract energy management; and (vii) technology development, services, consulting and training relating to power business.

Name of the JV Company

China Energy Xinjiang Ganquanpu Integrated Energy Co., Ltd.* ( ਷ঐอᖛ ͚ݰఝၝΥঐ๕Ϟࠢʮ̡ ) (tentative name only and subject to the final approval of the industrial and commercial registration authority)

Capital Structure

The registered capital of the JV Company shall be RMB200,010,000, which shall be contributed in cash by the parties in the following proportion:

Amount of	Shareholding
Capital	Percentage in
Name of Shareholder	Contribution	the JV Company
(RMB)
Xinjiang Energy	72,003,600	36%
Derun Economic Construction	44,002,200	22%
Xinjiang Electric Power	34,001,700	17%
Longyuan Environmental	30,001,500	15%
TBEA Xinjiang	20,001,000	10%
Total	200,010,000	100%

Xinjiang Energy, Xinjiang Electric Power, Longyuan Environmental and TBEA Xinjiang shall make their respective capital contribution by 31 May 2021, whereas Derun Economic Construction shall make its capital contribution by 31 May 2024.

Composition of the Board of Directors

The board of directors of the JV Company shall consist of seven directors. Xinjiang Energy shall have the right to nominate two directors, whereas each of Derun Economic Construction, Xinjiang Electric Power, Longyuan Environmental and TBEA Xinjiang shall have the right to nominate one director. In addition, the board of directors of the JV Company shall include an employee representative director elected in an employee representative meeting. The directors of the JV Company shall be elected by the shareholders of the JV Company in a general meeting. The chairman of the JV Company shall be nominated by Xinjiang Energy and elected by the board of directors of the JV Company.

Composition of the Board of Supervisors

The board of supervisors of the JV Company shall consist of five supervisors. Each of Xinjiang Energy, Xinjiang Electric Power and TBEA Xinjiang shall have the right to nominate one supervisor. In addition, the board of supervisors of the JV Company shall include two employee representative supervisors elected in an employee representative meeting. The supervisors of the JV Company shall be elected by the shareholders of the JV Company in a general meeting. The chairman of the board of supervisors of the JV Company shall be nominated by Xinjiang Electric Power and elected by the board of supervisors of the JV Company.

Senior Management

The JV Company shall have one general manager, five deputy general managers and one chief financial officer. Xinjiang Energy shall nominate three persons, and each of Derun Economic Construction, Xinjiang Electric Power, Longyuan Environmental and TBEA Xinjiang shall nominate one person. The general manager shall be nominated by the chairman of the JV Company and elected by the board of directors of the JV Company, whereas the deputy general mangers and the chief financial officer shall be nominated by the general manager of the JV Company and elected by the board of directors of the JV Company.

Profit Distribution

During the operation of the JV Company, at the end of each fiscal year, the JV Company shall, in accordance with the Company Law of the PRC ( ʕശɛ͏ ΍ձ਷ʮ̡ج ) and after making up for losses and withdrawing the amount of provident fund, distribute the remaining after-tax profits to the shareholders of the JV Company in accordance with the proportion of their actual capital contribution. The amount of profit distribution shall not be less than 50% of the after-tax distributable profits.

Transfer of Equity Interest

The shareholders of the JV Company may transfer their respective equity interest in the JV Company in accordance with the law.

Each party of the JV Agreement has undertaken that it will not, within one year from the date of incorporation of the JV Company, transfer its equity interest in the JV Company to transferee(s) other than the shareholder(s).

Where a shareholder agrees to transfer its equity interest, the other shareholders shall, under the same conditions, enjoy the right of first refusal. If more than two shareholders intend to exercise their right of first refusal, they shall negotiate their respective purchase proportion, failing which they shall exercise their right of first refusal in accordance with their respective capital contribution at the time of transfer.

• 3. REASONS FOR AND BENEFITS OF ENTERING INTO THE JV AGREEMENT

  Incremental distribution network is one of the key reforms in the electric power system encouraged by the PRC. The Company's investment in the Ganquanpu incremental distribution network project is in line with the development strategy of China Energy on the construction of a world-class energy group with global competitiveness, and can facilitate the Group's breakthrough in incremental distribution network, which is of leading and exemplary significance. The implementation of this investment project is beneficial to the Group's transformation and development, and can enhance the Group's profitability, expand its business scope and improve its competitiveness and brand reputation.

  The Directors (including the independent non-executive Directors) consider that the terms of the JV Agreement are on normal commercial terms, fair and reasonable, and the transactions contemplated thereunder were entered into in the ordinary and usual course of the Group's business and are in the interest of the Group and the Shareholders as a whole.

  Mr. Wang Zhongqu, Mr. Zhang Wenjian and Mr. Gu Yuchun, being the directors connected with China Energy or its subsidiaries, have abstained from voting on the resolution(s) in relation to the transactions contemplated under the JV Agreement. Save as disclosed hereinabove, none of the Directors has any material interest in the transactions contemplated under the JV Agreement.

• 4. INFORMATION OF THE PARTIES

  Information of the Group

  The Group is primarily engaged in the provision of integrated clean technology solutions and services within the PRC through its two main business segments, with established market leading or dominant positions in the environmental protection, energy conservation and renewable energy equipment manufacturing and related services industries in the PRC.

  Information of Xinjiang Energy

  Xinjiang Energy is a company incorporated under the laws of the PRC with limited liability, and is principally engaged in the mining and sale of coal, power generation, as well as the manufacturing and sale of chemical products. Xinjiang Energy is a wholly-owned subsidiary of China Energy, being a controlling shareholder of the Company. Xinjiang Energy is therefore a connected person of the Company pursuant to Chapter 14A of the Listing Rules.

Information of Derun Economic Construction

Derun Economic Construction is a company incorporated under the laws of the PRC with limited liability, and is principally engaged in the investment, management and operation of state-owned assets, the management of public infrastructure projects, as well as land consolidation, development and management. Derun Economic Construction is ultimately owned by the Finance Bureau (State-owned Assets Supervision and Administration Commission) of

Urumqi Ganquanpu Economic Development Zone (Industrial Zone)* ( ढኁ˝ᄁ ͚ݰఝ຾᏶Ҧஔක೯ਜ€ʈุਜৌ݁҅€਷Ϟ༟ପ္ຖ၍ଣ։ࡰึ )).

To the best of the Directors' knowledge, information and belief and having made all reasonable enquiries, Derun Economic Construction is an Independent Third Party.

Information of Longyuan Environmental

Longyuan Environmental is a company incorporated under the laws of the PRC with limited liability, and is a wholly-owned subsidiary of the Company. Longyuan Environmental is a leading enterprise in the desulfurization and denitrification business of the PRC thermal power industry, and is mainly engaged in businesses including desulfurization and denitrification engineering, procurement and construction, franchising, environmental protection equipment manufacturing, environmental engineering, water environment treatment and solid waste treatment.

Information of Xinjiang Electric Power

Xinjiang Electric Power is a company incorporated under the laws of the PRC with limited liability, and is principally engaged in the transmission and supply of electricity, as well as the maintenance and technological transformation of power generation and supply equipment. Xinjiang Electric Power is ultimately owned by the State Grid Corporation of China. To the best of the Directors' knowledge, information and belief and having made all reasonable enquiries, Xinjiang Electric Power is an Independent Third Party.

Information of TBEA Xinjiang

TBEA Xinjiang is a joint stock company incorporated under the laws of the PRC with limited liability, and is principally engaged in the development, production, installation and sale of new energy equipment, the construction and installation of new energy projects, as well as the investment operation of solar and wind energy and related technical services. TBEA Xinjiang is a subsidiary of Xinte Energy Co., Ltd. (the H shares of which are listed on the Main Board of the Stock Exchange (stock code: 1799)), which is in turn a subsidiary of TBEA Co., Ltd. (the A shares of which are listed on the Shanghai Stock Exchange (stock code: 600089)). To the best of the Directors' knowledge, information and belief and having made all reasonable enquiries, TBEA Xinjiang is an Independent Third Party.

• 5. LISTING RULES IMPLICATIONS

  As at the date of this announcement, China Energy directly and indirectly holds approximately 78.4% of the issued share capital of the Company and is a controlling shareholder of the Company. As Xinjiang Energy is a wholly-owned subsidiary of China Energy, Xinjiang Energy is a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the JV Agreement and the transactions contemplated thereunder constitute a connected transaction of the Company under Chapter 14A of the Listing Rules. Since the highest applicable percentage ratio in respect of the Group's capital contribution to the JV Company pursuant to the JV Agreement is more than 0.1% but less than 5%, the JV Agreement is subject to the reporting and announcement requirements but is exempt from the circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.

• 6. DEFINITIONS

  In this announcement, unless the context requires otherwise, the following expressions shall have the following meanings:

"Board"	the board of directors of the Company
"China Energy"	China Energy Investment Group Co., Ltd.* ( ਷࢕ঐ๕
ҳ༟ණྠϞࠢʮ̡ ), a company incorporated in the
PRC with limited liability, and a controlling shareholder
of the Company
"Company"	Guodian Technology & Environment Group Corporation
Limited* ( ਷ཥ߅Ҧᐑڭණྠٰ΅Ϟࠢʮ̡ ),
a joint stock company incorporated in the PRC with
limited liability, the H Shares of which is listed on the
Stock Exchange (stock code: 1296)
"controlling	has the meaning ascribed thereto under the Listing Rules
shareholder(s)"
"Derun Economic	Xinjiang Derun Economic Construction Development
Construction"	Co., Ltd.* ( อᖛᅃᆗ຾᏶ܔண೯࢝Ϟࠢʮ̡ ), a
company incorporated in the PRC with limited liability
"Director(s)"	the director(s) of the Company
"Group"	the Company and its subsidiaries

"H Share(s)"

the overseas-listed foreign shares in the ordinary share capital of the Company, with a RMB denominated par value of RMB1.0 each, which are subscribed for and traded in Hong Kong dollars and listed on the Stock Exchange

"Independent Third

Party"

any entity or person who, as far as the Directors are aware after having made all reasonable enquiries, is not a connected person of the Company within the meaning under the Listing Rules

"JV Agreement"

the joint venture agreement dated 18 March 2021 and entered into by Xinjiang Energy, Derun Economic Construction, Xinjiang Electric Power, Longyuan Environmental and TBEA Xinjiang relating to the establishment of the JV Company

"JV Company"

"Listing Rules"

China Energy Xinjiang Ganquanpu Integrated Energy

Co., Ltd.* ( ਷ঐอᖛ͚ݰఝၝΥঐ๕Ϟࠢʮ̡)

(tentative name only and subject to the final approval of the industrial and commercial registration authority), a company to be incorporated in the PRC with limited liability pursuant to the JV Agreement

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended, supplemented or otherwise modified from time to time

"Longyuan

Environmental"

Beijing Longyuan Environmental Environmental Engineering Co., Ltd.* ( ̏ԯ਷ཥᎲ๕ᐑڭʈ೻ Ϟࠢʮ̡ ), a company incorporated in the PRC with limited liability and a wholly-owned subsidiary of the Company

"PRC"

People's Republic of China

"RMB"

"Shareholder(s)"

Renminbi, the lawful currency of the PRC holder(s) of the H Share(s)

"Stock Exchange"

The Stock Exchange of Hong Kong Limited

"TBEA Xinjiang"

TBEA Xinjiang Sunoasis Co., Ltd.* ( तᜊཥʈอ ᖛอঐ๕ٰ΅Ϟࠢʮ̡ ), a joint stock company incorporated in the PRC with limited liability

"Xinjiang Electric	State Grid Xinjiang Electric Power Co., Ltd.* ( ਷ၣ
Power"	อᖛཥɢϞࠢʮ̡ ), a company incorporated in the
PRC with limited liability
"Xinjiang Energy"	China Energy Group Xinjiang Energy Co., Ltd.* ( ਷࢕
ঐ๕ණྠอᖛঐ๕Ϟࠢப΂ʮ̡ ), a company
incorporated in the PRC with limited liability
"%"	per cent

By order of the Board

Guodian Technology & Environment Group Corporation Limited*

Mr. CHEN Dongqing

Chairman

Beijing, PRC, 18 March 2021

As at the date of this announcement, the executive Directors of the Company are Mr. Chen Dongqing, Mr. Zhang Jun and Mr. Tang Chaoxiong; the non-executive Directors are Mr. Wang Zhongqu, Mr. Zhang Wenjian, Mr. Gu Yuchun and Ms. Ge Xiaojing; and the independent non-executive Directors are Mr. Shen Xiaoliu, Mr. Qu Jiuhui, Mr. Xie Qiuye and Mr. Yeung Chi Tat.

* For identification purpose only