Zhongyu Gas : GENERAL MANDATES FOR THE ISSUE OF NEW SHARES AND THE REPURCHASE OF SHARES AND RE-ELECTION OF DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about this circular or as to the action to be taken, you should consult your stockbroker, bank manager, solicitors, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Zhongyu Gas Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

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

GENERAL MANDATES FOR THE ISSUE OF NEW SHARES

AND THE REPURCHASE OF SHARES

AND

RE-ELECTION OF DIRECTORS

AND

NOTICE OF ANNUAL GENERAL MEETING

A notice convening the AGM (as defined herein) to be held at Units 04-06, 28th Floor, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong on Thursday, 3 June 2021 at 11:00 a.m. is set out on pages 18 to 22 of this circular.

A form of proxy for use at the AGM is enclosed herewith. Whether or not you propose to attend the AGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the branch share registrar of the Company (as defined herein) in Hong Kong, Tricor Secretaries Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the AGM. Completion and return of the form of proxy will not preclude you from attending and voting at the AGM should you so wish.

26 April 2021

	CONTENTS
		Page
Definitions .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
1	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
2	General mandate for the issue of new Shares . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
3	General mandate for the repurchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . .	6
4	Re-electionof retiring Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
5	AGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
6	Voting by poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
7	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
8	Closure of register of members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
9	General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Appendix I	- Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Appendix II	- Repurchase Mandate Explanatory Statement . . . . . . . . . . . . . . . . . . . . . .	14
Notice of the AGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18

- i -

DEFINITIONS

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

"AGM"	the annual general meeting of the Company to be held at Units 04-
	06, 28th Floor, China Merchants Tower, Shun Tak Centre, 168-200
	Connaught Road Central, Hong Kong on Thursday, 3 June 2021 at
	11:00 a.m. at which, among other matters, the Annual Report will
	be adopted
"Annual Report"	the audited consolidated financial statements of the Company and
	the reports of the directors and independent auditor of the Company
	for the year ended 31 December 2020
"Articles of Association"	the articles of association of the Company as may be amended from
	time to time
"Board"	the board of Directors
"Business Day"	any day (excluding a Saturday and Sunday or public holiday in
	Hong Kong) on which banks in Hong Kong are generally open for
	business
"BVI"	the British Virgin Islands
"China Gas"	means China Gas Holdings Limited, an exempted company
	incorporated in Bermuda with limited liability, the shares of
	which are listed on the Main Board (Stock Code: 384). As at the
	Latest Practicable Date, China Gas holds approximately 39.99% of
	the issued share capital of the Company
"close associates"	has the same meaning ascribed to it in the Listing Rules
"Company"	Zhongyu Gas Holdings Limited, a company incorporated in the
	Cayman Islands with limited liability, the issued Shares of which
	are listed on Main Board
"core connected person"	has the same meaning ascribed to it in the Listing Rules
"Director(s)"	the director(s) of the Company
"General Mandates"	the New Issue Mandate and the Repurchase Mandate
"Group"	the Company and its subsidiaries

- 1 -

	DEFINITIONS
"Hezhong"	Hezhong Investment Holding Company Limited, an investment
	holding company incorporated in the BVI with limited liability and
	is wholly owned by Mr. Wang Wenliang as at the Latest
	Practicable Date. Mr. Wang Wenliang is a director of the
	Company. As at the Latest Practicable Date, Hezhong holds
	approximately 27.66% of the issued share capital of the Company
"Hong Kong"	the Hong Kong Special Administrative Region of People's Republic
	of China
"Latest Practicable Date"	21 April 2021, being the latest practicable date prior to the printing
	of this circular for the purpose of ascertaining certain information
	in this circular
"Listing Rules"	Rules Governing the Listing of Securities on the Stock Exchange
"Main Board"	the Main Board of the Stock Exchange
"New Issue Mandate"	a general and unconditional mandate proposed to be granted to the
	Directors to allot, issue and deal with new Shares not exceeding
	20% of the total number of issued Shares of the Company as at the
	date of passing of the resolution approving the New Issue Mandate
	at the AGM
"PRC"	People's Republic of China
"Repurchase Mandate"	a general and unconditional mandate proposed to be granted to the
	Directors to exercise the powers of the Company to repurchase
	Shares not exceeding 10% of the total number of issued Shares of
	the Company as at the date of passing of the resolution approving
	the Repurchase Mandate at the AGM
"SFC"	Securities and Futures Commission
"SFO"	the Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
"Share(s)"	share(s) of nominal value of HK$0.01 each in the share capital of
	the Company
"Shareholder(s)"	holder(s) of the Share(s)
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Takeovers Code"	the Code on Takeovers and Mergers of Hong Kong

- 2 -

DEFINITIONS

"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"%"	per cent.

- 3 -

LETTER FROM THE BOARD

Executive Directors:	Registered office:
Mr. Wang Wenliang (Chairman)	Cricket Square
Mr. Lui Siu Keung (Chief Executive Officer)	Hutchins Drive
Mr. Lu Zhaoheng	P.O. Box 2681
Mr. Li Yan	Grand Cayman KY1-1111
Mr. Jia Kun	Cayman Islands
Non-executive Director:	Head office and principal place of
Mr. Xu Yongxuan (Vice Chairman)	business in Hong Kong:
	Units 04-06, 28th Floor
Independent non-executive Directors:	China Merchants Tower
Mr. Li Chunyan	Shun Tak Centre
Dr. Luo Yongtai	168-200 Connaught Road Central,
Ms. Liu Yu Jie	Hong Kong
	26 April 2021
To the Shareholders
Dear Sir or Madam,

GENERAL MANDATES FOR THE ISSUE OF NEW SHARES

AND THE REPURCHASE OF SHARES

AND

RE-ELECTION OF DIRECTORS

AND

NOTICE OF ANNUAL GENERAL MEETING

1 INTRODUCTION

The purpose of this circular is to provide you with information regarding the resolutions to be proposed at the AGM to enable the Shareholders to make an informed decision on whether to vote for or against the resolutions and to give you notice of the AGM. Resolutions to be proposed at the AGM include ordinary resolutions relating to, among other things, (i) the re-election of Directors, (ii) the New Issue Mandate, and (iii) the Repurchase Mandate.

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LETTER FROM THE BOARD

At the annual general meeting of the Company held on 3 June 2020, the Directors were granted general and unconditional mandates to:

1. allot, issue and deal with unissued Shares not exceeding 20% of the total number of Shares in issue as at the date of passing such resolution;
2. repurchase Shares not exceeding 10% of the total number of the Shares in issue at the date of passing such resolution; and
3. extend the issue mandate set out in (i) above by an amount equal to the number of Shares repurchased pursuant to the repurchase mandate set out in (ii) above.

The above general mandates will expire at the conclusion of the AGM and the purpose of this circular, among other things, is to request your support to approve the General Mandates at the AGM.

Appendix II to this circular contains an explanatory statement, as required by Rule 10.06(1)(b) and other relevant provisions of the Listing Rules, to provide the requisite information to the Shareholders to enable the Shareholders to make an informed decision on whether to vote for or against the resolution to grant the Repurchase Mandate.

The Board also proposes to re-elect Directors retiring at the AGM.

2 GENERAL MANDATE FOR THE ISSUE OF NEW SHARES

At the AGM, an ordinary resolution will be proposed which, if passed, will grant the Directors the New Issue Mandate to allot, issue and deal with up to 20% of the total number of issued Shares of the Company as at the date of passing of the relevant resolution. As at the Latest Practicable Date, a total of 2,645,132,157 Shares were in issue. Subject to the passing of the relevant resolution granting the New Issue Mandate to the Directors and on the basis that no Shares will be issued or repurchased by the Company between the Latest Practicable Date and prior to the AGM, the Directors will be allowed under the New Issue Mandate to issue a maximum of 529,026,431 Shares. If the share capital of the Company changes as a result of a share consolidation or subdivision after the approval of the New Issue Mandate, the maximum number of Shares that can be issued will be adjusted accordingly such that the maximum percentage of shares which may be issued under the New Issue Mandate immediately before and after such share capital change shall be the same. In addition, approval of the Shareholders is proposed to be sought at the AGM to extend the New Issue Mandate by adding to it the number of Shares repurchased by the Company under the Repurchase Mandate subsequent to the passing of the relevant resolutions. The above mandates, if granted, will be valid until whichever is the earliest of (i) the conclusion of the next annual general meeting of the Company after the AGM, (ii) the expiration of the period within which the next annual general meeting of the Company after the AGM is required by the Articles of Association or any applicable laws to be held, and (iii) the passing of an ordinary resolution by the Shareholders in general meeting revoking or varying or renewing the authority given to the Directors, in order to provide flexibility for issuing new Shares when it is in the interests of the Company.

Details of the aforesaid ordinary resolutions are set out in ordinary resolutions numbered 5 and 7 in the notice of AGM set out on pages 18 to 22 to this circular.

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LETTER FROM THE BOARD

As at the Latest Practicable Date, the Listing Rules provide that, unless the Stock Exchange agrees otherwise, in the event the New Issue Mandate is exercised and Shares are placed for cash consideration under the New Issue Mandate, the issue price of the Shares may not be at a price which represents a discount of 20% or more to the benchmarked price of the Shares, such benchmarked price being the higher of:

1. the closing price of the Shares as quoted on the Stock Exchange on the date of the relevant placing agreement or other agreement involving the proposed issue of securities under the New Issue Mandate; and
2. the average closing price of the Shares as quoted on the Stock Exchange in the 5 trading days immediately prior to the earlier of:
3. 1. the date of announcement of the placing or the proposed transaction or arrangement involving the proposed issue of Shares under the New Issue Mandate;
   2. the date of the placing agreement or other agreement involving the proposed issue of Shares under the New Issue Mandate; and
   3. the date on which the placing or subscription price is fixed.

In terms of the price at which Shares may be issued at time of exercise of the New Issue Mandate, the Company will comply with the then prevailing requirements under the Listing Rules.

3 GENERAL MANDATE FOR THE REPURCHASE OF SHARES

An ordinary resolution will be proposed at the AGM to grant to the Directors the Repurchase Mandate. The Shares which may be repurchased pursuant to the Repurchase Mandate is limited to a maximum of 10% of the total number of issued Shares of the Company at the date of passing of the relevant resolution. Subject to the passing of the relevant resolution granting the Repurchase Mandate to the Directors and on the basis that no Shares will be issued or repurchased by the Company between the Latest Practicable Date and prior to the AGM, the Directors will be allowed under the Repurchase Mandate to repurchase a maximum of 264,513,215 Shares. The Repurchase Mandate, if granted, will be valid until whichever is the earliest of (i) the conclusion of the next annual general meeting of the Company after the AGM, (ii) the expiration of the period within which the next annual general meeting of the Company after the AGM is required by the Articles of Association or any applicable laws to be held, or (iii) the passing of an ordinary resolution by the Shareholders in general meeting revoking or varying or renewing the authority given to the Directors. If the share capital of the Company changes as a result of a share consolidation or subdivision after the approval of the Repurchase Mandate, the maximum number of Shares that can be purchased will be adjusted accordingly such that the maximum percentage of Shares which may be purchased under the Repurchase Mandate immediately before and after such share capital change shall be the same.

Details of the aforesaid ordinary resolution are set out in ordinary resolution numbered 6 in the notice of AGM set out on pages 18 to 22 to this circular.

- 6 -

LETTER FROM THE BOARD

4 RE-ELECTION OF RETIRING DIRECTORS

In accordance with Article 87(1) and (2) of the Articles of Association, Mr. Wang Wenliang ("Mr. Wang"), Mr. Li Yan ("Mr. Li") and Dr. Luo Yongtai ("Dr. Luo") will retire from office as Directors by rotation at the AGM and being eligible, offer themselves for re-election at the AGM.

The Nomination Committee of the Company has reviewed the structure and composition of the Board, the confirmations and disclosures given by the Directors, the qualifications, skills and experience, time commitment and contribution of the retiring Directors with reference to the nomination principles and criteria, defined process of selection and performance evaluation set out in the Company's Board Diversity Policy and Director Nomination Policy and the Company's corporate strategy and the independence of Dr. Luo as an independent non-executive Director. The Nomination Committee has established and implemented processes including taking into consideration the attendance records at the meetings of the Board and the relevant Board Committees for monitoring and evaluating the contribution of the retiring Directors.

The Nomination Committee and the Board considered that Dr. Luo, the retiring independent non- executive Director, continues to be independent as he has satisfied the criteria for independence as set out in Rule 3.13 of the Listing Rules and has provided a written annual confirmation regarding his independence. Dr. Luo has served as an independent non-executive Director for more than 9 years. Notwithstanding Dr. Luo's years of service as an independent non-executive Director, he continues to demonstrate the ability to provide an independent, balanced and objective view to the Company's matters.

In addition, the Nomination Committee and the Board believed that the knowledge and experience of Dr. Luo in management will continue to make contribution and offer insights and diverse views to the Board and as such, they are satisfied with all the retiring Directors' contribution to the Company, which will continue to bring valuable knowledge and professionalism to the Board for its efficient and effective functioning and diversity. The Nomination Committee and the Board therefore recommended the re-election of all the retiring Directors, including Dr. Luo who is due to retire at the AGM.

Set out below are the details of the retiring Directors proposed to be re-elected:

Mr. Wang Wenliang, aged 50, is the Chairman of the Company. He was appointed as an executive Director on 10 July 2003 and is responsible for the overall strategic development of the Group. Mr. Wang also serves as a director of certain other subsidiaries within the Group. Mr. Wang has held investments in various industries in the PRC including aluminium, property, and information technology. Mr. Wang was a deputy general manager of a company in Zhengzhou, the PRC (whose principal business is the manufacture and sale of aluminium products) between 1996 and 1999 and was a deputy general manager of a company in Henan Province, the PRC (whose principal business is property management and rental) between 1997 and 2000. Mr. Wang was also a president of a company in Henan Province, the PRC between 2000 and 2005, the principal business of which is the provision of software development, networking engineering services, sale of computer and peripheral products, and provision of Internet services. Mr. Wang was an executive director of China Gas between 17 January 2003 and 10 June 2003. Mr. Wang completed his postgraduate course in Finance in the Graduate School of Chinese Academy of Social Sciences in the PRC in June 2001. Mr. Wang is the sole shareholder, a chairman and director of Hezhong, which is a substantial shareholder (as defined in the Listing Rules) of the Company.

- 7 -

LETTER FROM THE BOARD

As at the Latest Practicable Date, Mr. Wang is interested in an aggregate of 761,399,206 Shares, 19,324,616 Shares of which is beneficially owned by him, 10,438,301 Shares of which is beneficially owned by his wife, Ms. Feng Haiyan and 731,636,289 Shares of which is beneficially owned by Hezhong, a company wholly-owned by Mr. Wang. Under Part XV of the SFO, Mr. Wang is deemed to be interested in the Shares held by his spouse and company controlled by him. Save as disclosed above, Mr. Wang does not have any other interest in the Shares within the meaning of Part XV of the SFO.

Save as disclosed above, as at the Latest Practicable Date, Mr. Wang did not hold any directorships in any other public companies the securities of which are listed on any securities market in Hong Kong or overseas in the last three years and did not hold any other positions with the Company or other members of the Group.

Save as disclosed above, as at the Latest Practicable Date, Mr. Wang did not have any relationships with any of the Directors, senior management or substantial shareholders (within the meaning of the Listing Rules) or controlling shareholders (within the meaning of the Listing Rules) of the Company.

Pursuant to the service agreement entered into between Mr. Wang and the Company, the term of appointment for Mr. Wang is three years commencing on 11 July 2018 and shall determine upon expiry subject to renewal by mutual agreement between Mr. Wang and the Company prior thereto and in compliance with the Listing Rules. Mr. Wang's directorship is subject to retirement by rotation and reelection at the annual general meeting of the Company in accordance with the Articles of Association. Under the service agreement, Mr. Wang is entitled to an annual emolument of HK$7,140,000 for acting as the Chairman of the Company and an executive Director and a bonus for each financial year of the Company at the discretion of the Board. The annual emolument of Mr. Wang and his discretionary bonus would be determined with reference to various factors such as duties and level of responsibilities of Mr. Wang within the Group, the available information in respect of companies of comparable business or scale, the performance of Mr. Wang and the Group's performance for the financial year concerned and the prevailing market conditions and based on the recommendation from the Remuneration Committee of the Company.

Save as disclosed in this circular, Mr. Wang is not aware of any other matters that need to be brought to the attention of the Shareholders nor is there any information that needs to be disclosed by the Company pursuant to any of the requirements under rule 13.51(2)(h) to (v) of the Listing Rules.

Mr. Li Yan, aged 57, is an executive Director of the Company. He was appointed as an executive Director on 25 February 2019. Mr. Li also serves as a director of certain other subsidiaries within the Group. Mr. Li holds a bachelor's degree from Henan University of Economics and Law (河南財經政法大學) (formerly known as Henan University of Economics (河南財經學院)) and an EMBA degree from The Guanghua School of Management of Peking University (北京大學光華管理學院). Mr. Li taught accounting, finance and economics at Henan Province Supply and Marketing School (河南省供銷學校) from July 1988 to February 1992 and served as assistant to the general manager of China Commercial Resources Zhengzhou Company (中國商業物資鄭州公司) from March 1992 to 2002. Mr. Li joined the Group in 2003 and is currently the executive vice president (執行副總裁) of the Company. In December 2005, Mr. Li obtained the title of senior economist.

As at the Latest Practicable Date, Mr. Li holds 14,013,063 Shares beneficially. Save as disclosed above, Mr. Li does not have any other interest in the Shares within the meaning of Part XV of the SFO.

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LETTER FROM THE BOARD

Save as disclosed above, as at the Latest Practicable Date, Mr. Li did not hold any directorships in any other public companies the securities of which are listed on any securities market in Hong Kong or overseas in the last three years and did not hold any other positions with the Company or other members of the Group.

As at the Latest Practicable Date, Mr. Li did not have any relationships with any of the Directors, senior management or substantial shareholders (within the meaning of the Listing Rules) or controlling shareholders (within the meaning of the Listing Rules) of the Company.

Pursuant to the service agreement entered into between Mr. Li and the Company, the term of appointment for Mr. Li is three years commencing on 25 February 2019 and shall determine upon expiry subject to renewal by mutual agreement between Mr. Li and the Company prior thereto and in compliance with the Listing Rules. Mr. Li's directorship is subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Articles of Association. Under the service agreement, Mr. Li is entitled to an annual emolument of HK$1,540,000 for acting as an executive director and a bonus for each financial year of the Company at the discretion of the Board. The annual emolument of Mr. Li and his discretionary bonus would be determined with reference to various factors such as duties and level of responsibilities of Mr. Li within the Group, the available information in respect of companies of comparable business or scale, the performance of Mr. Li and the Group's performance for the financial year concerned and the prevailing market conditions and based on the recommendation from the Remuneration Committee of the Company.

Save as disclosed in this circular, Mr. Li is not aware of any other matters that need to be brought to the attention of the Shareholders nor is there any information that needs to be disclosed by the Company pursuant to any of the requirements under rule 13.51(2)(h) to (v) of the Listing Rules.

Dr. Luo Yongtai, aged 74, is an independent non-executive Director, a member of the Audit Committee, Remuneration Committee and Nomination Committee of the Company. He was appointed as an independent non-executive Director on 31 July 2003. He is a professor and a doctoral tutor in management of Tianjin University of Finance and Economics, the committee member of Tianjin Historical Building Protection Expert Consultation Committee, a Director of Coordinated Innovation Development Research Institute of the Beijing, Tianjin and Hebei region, the committee member of Coordinated Development Research Center Expert Consultation Committee of the Northeastern region and the Beijing, Tianjin and Hebei region, and an expert of Thinking Tank in Tianjin Science and Technology Commission, as well as a beneficiary of the Expert Special Subsidy granted by the State Council of the PRC. Dr. Luo had been an independent director of Tianjin Tianbao Infrastructure Co., Ltd. (a company listed on the Shenzhen Stock Exchange, stock code: 000965) for the period from December 2014 to June 2017. He was an independent director of Tianjin Guifaxiang 18th Street Mahua Food Co., Ltd. (a company listed on the Shenzhen Stock Exchange, stock code: 002820) during the period between December 2012 and September 2018. He was also an external director of Tianjin Ringpu Bio-Technology Co., Ltd. (a company listed on the Shenzhen Stock Exchange, stock code: 300119) during the period between January 2015 and December 2018.

As at the Latest Practicable Date, Dr. Luo holds 1,005,800 Shares and 502,900 share options of the Company, the exercise of which in full will result in the issue of 502,900 Shares. Accordingly, Mr. Luo is beneficially interested in 1,508,700 Shares/underlying Shares. Save as disclosed above, Dr. Luo does not have any other interest in the Shares within the meaning of Part XV of the SFO.

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LETTER FROM THE BOARD

Pursuant to the service agreement entered into between Dr. Luo and the Company, the term of appointment for Dr. Luo is three years commencing on 11 July 2018 and shall determine upon expiry subject to renewal by mutual agreement between Dr. Luo and the Company prior thereto and in compliance with the Listing Rules. Dr. Luo's directorship is subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Articles of Association. Under the service agreement, Dr. Luo is entitled to an annual emolument of HK$250,000 for acting as an independent non- executive Director, and a member of the Audit Committee, Remuneration Committee and Nomination Committee of the Company and a bonus for each financial year of the Company at the discretion of the Board. The annual emolument of Dr. Luo and his discretionary bonus would be determined with reference to various factors such as duties and level of responsibilities of Dr. Luo within the Group, the available information in respect of companies of comparable business or scale, the performance of Dr. Luo and the Group's performance for the financial year concerned and the prevailing market conditions and based on the recommendation from the Remuneration Committee of the Company.

According to Appendix 14 to the Listing Rules, (i) serving more than nine years could be relevant to the determination of a non-executive director's independence, and (ii) if an independent non-executive director serves more than nine years, any further appointment of such independent non-executive director should be subject to a separate resolution to be approved by shareholders. Dr. Luo has been appointed as an independent non-executive Director since 31 July 2003 and should he be re-elected at the AGM, he may continue to serve the Company for more than nine years. Dr. Luo has always emphasised high standards of corporate governance to the Company and contributed objectively in advising as well as constructively monitoring and mentoring the management team in his capacity as an independent non-executive Director. Being familiar with the corporate values of the Company, the presence of Dr. Luo has enhanced these values by his development of a strong relationship with the management. The Board and Dr. Luo agreed that his long service would not affect his exercise of independent judgment and the Board is satisfied that Dr. Luo has the required character, integrity, experience and knowledge to continue fulfilling the role of independent non-executive Director effectively. Taking into consideration of the above factors as well as the Company having received from Dr. Luo a confirmation of independence according to Rule 3.13 of the Listing Rules, and his independent scope of work in the past years, the Board considers Dr. Luo to be independent under the Listing Rules despite the fact that he has served the Company for more than nine years. The Board believes that Dr. Luo's continued tenure brings considerable stability as he has over time gained valuable insight into the operations and management of the Group. Accordingly, Dr. Luo shall offer himself for reelection by way of a separate resolution to be approved by the Shareholders at the AGM.

Save as disclosed in this circular, Dr. Luo is not aware of any other matters that need to be brought to the attention of the Shareholders nor is there any information that needs to be disclosed by the Company pursuant to any requirements under rule 13.51(2)(h) to (v) of the Listing Rules.

5 AGM

The AGM will be held at Units 04-06, 28th Floor, China Merchants Tower, Shun Tak Centre, 168- 200 Connaught Road Central, Hong Kong at 11:00 a.m. on Thursday, 3 June 2021, at which, inter alia, ordinary resolutions will be proposed to Shareholders to consider the re-election of Directors and the grant to the Directors of the General Mandates. A notice of the AGM is set out on pages 17 to 22 of this circular.

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LETTER FROM THE BOARD

A form of proxy for use by the Shareholders at the AGM is enclosed herewith. Whether or not you propose to attend the AGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the branch share registrar of the Company in Hong Kong, Tricor Secretaries Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the AGM. Completion and return of the form of proxy will not preclude you from attending and voting at the AGM should you so wish.

6 VOTING BY POLL

Under Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll. Accordingly, the ordinary resolutions proposed at the AGM will also be taken by poll. A poll results announcement will be published on the websites of the Company and the Stock Exchange after the AGM in accordance with Rule 13.39(5) of the Listing Rules. As at the Latest Practicable Date, to the knowledge of Directors, no Shareholder is required to abstain from voting under the Listing Rules in respect of any of the ordinary resolutions proposed at the AGM.

7 RECOMMENDATION

The Directors are of the opinion that the resolutions to be proposed at the AGM set out in the notice of the AGM set out on pages 18 to 22 of this circular, including the re-election of the retiring Directors, the grant of the New Issue Mandate and the Repurchase Mandate, are in the best interests of the Company and the Shareholders as a whole and recommend the Shareholders to vote in favour of all the resolutions to be proposed in the AGM.

8 CLOSURE OF REGISTER OF MEMBERS

Shareholders whose names appear on the Company's register of members on Thursday, 3 June 2021 will be eligible to attend and vote at the AGM. The transfer books and register of members of the Company will be closed from Monday, 31 May 2021 to Thursday, 3 June 2021 (both days inclusive) during which period no transfer of Shares will be registered. In order to determine the identity of Shareholders who are entitled to attend and vote at the AGM, all transfers accompanied by the relevant share certificates must be lodged with the Company's branch share registrar and transfer office in Hong Kong, Tricor Secretaries Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong not later than 4:30 p.m. on Friday, 28 May 2021.

Shareholders whose names appear on the Company's register of members on Wednesday, 14 July 2021 will qualify for the proposed final dividend. The Company's transfer books and register of members will be closed from Tuesday, 13 July 2021 to Wednesday, 14 July 2021 (both days inclusive) for the purpose of ascertaining shareholders' entitlement to the proposed final dividend. In order to qualify for the proposed final dividend, all transfer forms accompanied by the relevant share certificates must be lodged with the Company's branch share registrar and transfer office in Hong Kong, Tricor Secretaries Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong before 4:30 p.m. on Monday, 12 July 2021. The proposed final dividend (the payment of which is subject to the Shareholders' approval at the forthcoming annual general meeting) is expected to be paid on Tuesday, 3 August 2021 to Shareholders whose names appear on the register of members of the Company on Wednesday, 14 July 2021.

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LETTER FROM THE BOARD

9 GENERAL

Your attention is also drawn to the additional information set out in Appendix I (Responsibility Statement) and Appendix II (Repurchase Mandate Explanatory Statement) to this circular.

Yours faithfully,

By Order of the Board of

ZHONGYU GAS HOLDINGS LIMITED

Wang Wenliang

Chairman

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APPENDIX I

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

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APPENDIX II REPURCHASE MANDATE EXPLANATORY STATEMENT

This appendix is an explanatory statement given to all Shareholders relating to the resolution to be proposed at the AGM in relation to the Repurchase Mandate, which contains all the information required pursuant to Rule 10.06(1)(b) and other relevant provisions of the Listing Rules:

1 SHARE CAPITAL

As at the Latest Practicable Date, the Company has 2,645,132,157 Shares in issue.

Subject to the passing of ordinary resolution numbered 6 as set out in the notice of AGM set out on pages 18 to 22 of this circular and on the basis that no further Shares are issued or repurchased after the Latest Practicable Date and prior to the AGM, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 264,513,215 Shares representing slightly less than 10% of the number of issued Shares of the Company, during the period from the passing of the resolution until (i) the conclusion of the next annual general meeting of the Company after the AGM; (ii) the expiration of the period within which the next annual general meeting of the Company after the AGM is required by the Articles of Association or any applicable laws to be held; or (iii) the date of the revocation, variation or renewal of the Repurchase Mandate by ordinary resolution of the Shareholders in general meeting, whichever occurs first.

As at the Latest Practicable Date, the Directors do not propose to exercise the Repurchase Mandate to repurchase any Shares.

2 REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and the Shareholders for the Directors to have general authority from Shareholders to enable the Company to repurchase Shares on the Stock Exchange. Repurchases of Shares will only be made when the Directors believe that such repurchase will benefit the Company and the Shareholders as a whole. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value of the Company and/or the earnings per Share.

3 FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with the memorandum and articles of association of the Company, the Listing Rules and the applicable laws of the Cayman Islands. The Company may not repurchase its own Shares on Main Board for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange from time to time.

4 GENERAL

There might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited consolidated financial statements of the Group contained in the Annual Report) in the event that the Repurchase Mandate is exercised in full. However, the

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APPENDIX II REPURCHASE MANDATE EXPLANATORY STATEMENT

Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have any material adverse effect on the working capital requirements of the Company or on the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

5 SHARE PRICES

The highest and lowest prices at which the Shares had been traded on the Main Board in each of the twelve calendar months immediately preceding the Latest Practicable Date, and the current month up to the Latest Practicable Date were as follows:

		Prices per Share
		Highest	Lowest
		HK$	HK$
	April 2020	6.61	5.46
	May 2020	7.24	6.19
	June 2020	7.60	6.74
	July 2020	7.54	6.59
	August 2020	7.34	7.10
	September 2020	7.56	7.04
	October 2020	7.31	6.39
	November 2020	7.24	6.32
	December 2020	7.13	6.74
	January 2021	7.20	6.64
	February 2021	7.10	6.72
	March 2021	6.97	6.61
	April 2021 (up to the Latest Practicable Date)	7.01	6.68
6	DIRECTORS' UNDERTAKING

The Directors have undertaken to the Stock Exchange that they will exercise the power of the Company to make purchases pursuant to the Repurchase Mandate in accordance with the Listing Rules, the memorandum and articles of association of the Company and the applicable laws of the Cayman Islands.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their close associates has notified the Company of any present intention, if the Repurchase Mandate is approved by the Shareholders, to sell Shares to the Company.

No core connected person has notified the Company that it has a present intention to sell Shares to the Company, or has undertaken not to do so, in the event that the Repurchase Mandate is approved by the Shareholders.

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APPENDIX II REPURCHASE MANDATE EXPLANATORY STATEMENT

7 TAKEOVERS CODE CONSEQUENCE

If as a result of a repurchase of Shares, a Shareholder's proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of the Takeovers Code. As a result, a Shareholder, or a group of Shareholders acting in concert (within the meaning under the Takeovers Code), depending on the level of increase in the Shareholder's interests, could obtain or consolidate control of the Company and become(s) obliged to make a mandatory general offer in accordance with Rule 26 of the Takeovers Code.

In the event that the Directors exercise the Repurchase Mandate in full and on the basis that the number of issued Shares and the Shares held by each substantial Shareholder as set out below remain the same, the total interests of the following substantial shareholders (within the meaning under the Listing Rules) of the Company in the Shares immediately before and after the repurchase of Shares would be as follows:

				Approximate
			Approximate	percentage of interest
Name of		Number of shares	percentage of interest	after the exercise in
substantial		and/or underlying	as at the Latest	full of the Repurchase
shareholders	Notes	Shares (Note 5)	Practicable Date	Mandate
China Gas	1	1,057,905,071	39.99%	44.43%
Rich Legend
International
Limited	1	1,057,905,071	39.99%	44.43%
Hezhong	2	731,636,289	27.66%	30.73%
Mr. Wang Wenliang	3	761,399,206	28.78%	31.98%

Notes:

1. According to the disclosure of interests pages as shown on the website of the Stock Exchange as at the Latest Practicable Date, China Gas controlled 100% of Rich Legend International Limited. Apart from the information ascertained in the disclosure of interest pages as shown on the website of the Stock Exchange, the Company has no further information.
2. Hezhong is beneficially interested in 731,636,289 Shares. Mr. Wang Wenliang is beneficially interested in 100% of the issued share capital of Hezhong.
3. Among these Shares, 731,636,289 Shares are held by Hezhong, a company wholly-owned by Mr. Wang Wenliang, and the remaining 19,324,616 Shares and 10,438,301 Shares are directly held by Mr. Wang Wenliang and his spouse Ms. Feng Haiyan, respectively.
4. All figures in the above table are rounded up to two decimal places.
5. Based on the shareholding as at the Latest Practicable Date.

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APPENDIX II REPURCHASE MANDATE EXPLANATORY STATEMENT

As such, the increase in shareholding as a result of exercising the Repurchase Mandate in full may give rise to an obligation for (i) Rich Legend International Limited and China Gas; and (ii) Hezhong and Mr. Wang Wenliang to make a mandatory offer under Rule 26 of the Takeover Code. The Directors do not have any present intention to exercise the Repurchase Mandate to such an extent as could give rise to such an obligation.

Save as aforesaid in this circular, the Directors are not aware of any consequence which may arise under the Takeovers Code as a consequence of any purchase made under the Repurchase Mandate. Further, the Company may not repurchase Shares which would result in the amount of Shares held by the public being reduced to less than 25% being the minimum prescribed percentage for the Company as required by the Stock Exchange.

8 SHARES REPURCHASE MADE BY THE COMPANY

The Company did not make any repurchase of Shares on the Stock Exchange during the six calendar months immediately preceding the Latest Practicable Date.

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NOTICE OF THE AGM

NOTICE IS HEREBY GIVEN that the annual general meeting (the "AGM") of Zhongyu Gas Holdings Limited (the "Company") will be held at Units 04-06, 28th Floor, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong on Thursday, 3 June 2021 at 11:00 a.m. for the following purposes:

1. To receive and consider the audited consolidated financial statements, the report of the directors and independent auditor's report of the Company for the year ended 31 December 2020.
2. To declare a final dividend of HK$0.07 per share for the year ended 31 December 2020 ("Final Dividend").

3(a). To re-elect Mr. Wang Wenliang as an executive director of the Company ("Director").

3(b). To re-elect Mr. Li Yan as an executive Director.

3(c). To re-elect Dr. Luo Yongtai (who has served the Company for more than nine years as an independent non-executive Director) as an independent non-executive Director.

3(d). To authorise the Board or the Remuneration Committee of the Company to fix the remuneration of the Directors.

4. To re-appoint Messrs. Deloitte Touche Tohmatsu as the Company's auditor and authorise the board of directors of the Company (the "Board") to fix its remuneration.

And, as special business, to consider and, if thought fit, to pass the following resolutions as ordinary resolutions of the Company:

5. "THAT

1. subject to paragraph (iii) of this resolution, pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("Listing Rules"), the exercise by the Directors during the Relevant Period (as defined hereinafter) of all the powers of the Company to allot, issue and deal with additional shares of nominal value of HK$0.01 each in the share capital of the Company ("Shares") and to make or grant

- 18 -

NOTICE OF THE AGM

offers, agreements and options (including bonds, warrants and debentures convertible into shares) which might require the exercise of such powers be and is hereby generally and unconditionally approved;

1. the approval in paragraph (i) of this resolution shall authorise the Directors during the Relevant Period (as defined hereafter) to make or grant offers, agreements and options which might require the exercise of such powers after the end of the Relevant Period (as defined hereinafter);
2. the aggregate number of Shares allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors pursuant to the approval in paragraph (i) of this resolution, otherwise than pursuant to:
3. 1. a Rights Issue (as defined hereinafter);
   2. the exercise of warrants to subscribe for Shares or the exercise of options granted under any ordinary share option scheme adopted by the Company; or
   3. an issue of Shares in lieu of whole or part of a dividend on Shares in accordance with the articles of association of the Company,

shall not exceed 20% of the aggregate number of the Shares in issue as at the date of the passing of this resolution (or such number of Shares as adjusted to the extent there is a change to the number of the total issued Shares after the date of passing this resolution as a result of sub-division or consolidation of Shares) and this approval shall be limited accordingly; and

1. for the purpose of this resolution:
   "Relevant Period" means the period from the date of this resolution until whichever is the earliest of:
2. 1. the conclusion of the next annual general meeting of the Company;
   2. the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company ("Articles") or any applicable laws to be held; and
   3. the date on which the revocation, variation or renewal of the issue mandate by an ordinary resolution of the shareholders of the Company in general meeting.

"Rights Issue" means offer of Shares open for a period fixed by the Directors to holders of Shares on the register of members of the Company on a fixed record date in proportion to their then holdings of such Shares as at that date (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in

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NOTICE OF THE AGM

relation to overseas shareholders or fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of, any recognised regulatory body or any stock exchange in any territory outside Hong Kong)."

1. "THAT
2. 1. subject to paragraph (ii) of this resolution, the exercise by the Directors during the Relevant Period (as defined hereinafter) of all powers of the Company to repurchase issued Shares on The Stock Exchange of Hong Kong Limited or any other stock exchange on which the securities of the Company may be listed and recognised by the Securities and Futures Commission of Hong Kong and The Stock Exchange of Hong Kong Limited for such purpose, subject to and in connection with all applicable laws and/or the requirements of the Listing Rules or of any other stock exchange as may be amended from time to time, be and the same is hereby generally and unconditionally approved;
   2. the aggregate number of Shares which the Company is authorised to repurchase pursuant to the approval in paragraph (i) of this resolution shall not exceed 10% of the aggregate number of the Shares in issue as at the date of the passing of this resolution (or such number of Shares as adjusted to the extent there is a change to the number of the total issued Shares after the date of passing this resolution as a result of sub-division or consolidation of Shares), and this approval shall be limited accordingly; and
   3. for the purpose of this resolution:
      "Relevant Period" means the period from the passing of this resolution until whichever is the earliest of:
   4. 1. the conclusion of the next annual general meeting of the Company;
      2. the expiration of the period within which the next annual general meeting of the Company is required by the Articles or any applicable laws to be held; and
      3. the date on which the revocation, variation or renewal of the repurchase mandate by an ordinary resolution of the shareholders of the Company in general meeting."
3. "THAT conditional upon ordinary resolutions numbered 5 and 6 set out above being passed, the aggregate number of Shares which are repurchased by the Company under the authority granted to the Directors as mentioned in ordinary resolution numbered 6 above shall be added

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NOTICE OF THE AGM

to the aggregate number of the Shares that may be allotted or agreed conditionally or unconditionally to be allotted by the Directors pursuant to ordinary resolution numbered 5 set out above."

By Order of the Board of

ZHONGYU GAS HOLDINGS LIMITED

Wang Wenliang

Chairman

Hong Kong

26 April 2021

Registered Office:

Cricket Square

Hutchins Drive

P.O. Box 2681

Grand Cayman KY1-1111

Cayman Islands

Head Office and Principal Place of Business:

Units 04-06, 28th Floor

China Merchants Tower

Shun Tak Centre

168-200 Connaught Road Central

Hong Kong

Notes:

1. A member of the Company entitled to attend and vote at the meeting convened by the above notice is entitled to appoint another person as his proxy to attend and vote instead of such member. A member of the Company who is the holder of two or more shares of the Company may appoint more than one proxy to represent him and vote on his behalf at the meeting convened by the above notice. A proxy need not be a member of the Company.
2. Where there are joint holders of any share of the Company, any one of such holders may vote at the meeting either personally or by proxy in respect of such share as if he were solely entitled thereto, but if more than one of such holders be present at the meeting personally or by proxy, then the one of such holders whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof. Several executors or administrators of a deceased member of the Company in whose name any share stands shall for this purpose be deemed joint holders thereof.
3. In order to be valid, the proxy form together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power or authority, must be deposited at the Company's branch share registrar and transfer office in Hong Kong, Tricor Secretaries Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong not less than 48 hours before the time appointed for the meeting or any adjourned meeting.
4. For the purposes of determining member's eligibility to attend, speak and vote at the AGM, the register of members of Company will be closed as set out below:

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NOTICE OF THE AGM

Latest time to lodge transfer documents for	No later than 4:30 p.m. on Friday, 28 May 2021
registration with the Company's branch share
registrar and transfer office in Hong Kong
Closure of register of members	Monday, 31 May 2021 to Thursday, 3 June 2021
	(both days inclusive)
Record date to establish the identity of the members	Thursday, 3 June 2021
of the Company who are entitled to attend and vote
at the AGM

During the above closure periods, no transfer of shares will be registered. To be eligible to attend, speak and vote at the AGM, all properly completed transfer forms accompanied by the relevant share certificates must be lodged for registration with the Company's branch share registrar and transfer office in Hong Kong, Tricor Secretaries Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong no later than the aforementioned latest time.

1. For the purposes of establishing the identity of the members of the Company who are entitled to qualify for the Final Dividend, the register of members of the Company will be closed as set out below:

Latest time to lodge transfer documents for	No later than 4:30 p.m. on Monday, 12 July 2021
registration with the Company's branch share
registrar and transfer office in Hong Kong
Closure of register of members	Tuesday, 13 July 2021 to Wednesday, 14 July 2021
	(both days inclusive)
Record date to establish the identity of the members	Wednesday, 14 July 2021
of the Company who are entitled to qualify for the
Final Dividend

During the above closure periods, no transfer of shares will be registered. To be eligible to qualify for the Final Dividend, all properly completed transfer forms accompanied by the relevant share certificates must be lodged for registration with the Company's branch share registrar and transfer office in Hong Kong, Tricor Secretaries Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong no later than the aforementioned latest time.

1. Pursuant to Rule 13.39(4) of the Listing Rules, all resolutions set out in this notice will be decided by poll at the above meeting.
2. The registration for attending the AGM will start at 10:00 a.m. on Thursday, 3 June 2021.
3. The Chinese translation of this notice is for reference only, and in case of any inconsistency, the English version shall prevail.
4. If a Typhoon Signal No. 8 or above is hoisted or a Black Rainstorm Warning Signal is in force at or at any time after 9:00 a.m. on the date of the AGM, the AGM will be postponed or adjourned. The Company will post an announcement on the Company's website (www.zhongyugas.com) and HKEXnews website (www.hkexnews.hk) to notify shareholders of the date, time and place of the rescheduled AGM.
   The AGM will be held as scheduled when an Amber or a Red Rainstorm Warning Signal is in force. Shareholders should decide on their own whether they would attend the AGM under bad weather condition bearing in mind their own situations.
5. All references to times and dates in this notice are to Hong Kong times and dates.

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