RNS Number : 9041T
SDIC Power Holdings Co., LTD
19 November 2019
 

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.

Neither this announcement, nor anything contained herein, nor anything contained in the Registration Document referred to herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Investors should not subscribe for or purchase any securities referred to in this announcement or the Registration Document except solely on the basis of the information contained in a prospectus in its final form (together with any supplementary prospectus, if relevant, the "Prospectus"), including the risk factors set out therein, that may be published by SDIC Power Holdings CO., LTD (the "Company") in due course in connection with a possible offer of global depositary receipts ("GDRs") representing interests in the Company's A shares and the possible admission of such GDRs to the standard listing segment of the Official List of the United Kingdom Financial Conduct Authority and to trading on the Shanghai-London Stock Connect segment of the main market for listed securities of London Stock Exchange plc. A copy of any Prospectus published by the Company will, if published, be available for inspection on the Company's website at www.sdicpower.com/en, subject to certain access restrictions.

19 November 2019                                                                        

SDIC Power Holdings CO., LTD

Announcement of Potential Intention to Float on the London Stock Exchange

SDIC Power Holdings CO., LTD (the "Company" and together with its subsidiaries, the "Group"), a leading power generation company in China, announces that following the publication of its Registration Document on 29 October 2019 the Company is considering proceeding with an offering (the "Offering") of global depositary receipts (the "GDRs") representing A shares of the Company with a fully paid nominal value of RMB1.00 each (the "A Shares").

Should the Company proceed with the Offering, the GDRs are expected to be admitted to listing on the standard segment of the Official List maintained by the United Kingdom Financial Conduct Authority (the "FCA") and to trading on the Shanghai-London Stock Connect segment of the main market for listed securities of London Stock Exchange plc (the "LSE") (together the "Admission").

The Group Overview

·      The Group is a leading power generation company in China, with a diversified portfolio of projects across hydropower, coal-fired power, wind power and solar power. The Group develops, acquires and operates power projects and sells the electricity generated by them to grid companies.

·      As at 30 June 2019, the Group's consolidated installed capacity was 34.4 GW, the breakdown of the Group's consolidated installed capacity for hydropower, coal-fired power, and wind and solar power projects was 48.8%, 45.8% and 5.4%, respectively.

·      The Group has a leading hydropower business in China. Among all publicly listed PRC power generation companies, the Group was the third largest hydropower company in China in terms of consolidated hydro installed capacity of 16.7 GW as at 31 December 2018, according to Frost & Sullivan.

·      The Group has been actively optimising its coal-fired power projects by focusing on large capacity, efficient and energy-saving power units. As at 30 June 2019, all of the Group's coal-fired installed capacity of 15,756.0 MW consists of large units with a single installed capacity of at least 300.0 MW.

·      In addition, the Group is dedicated to expanding its wind and solar power portfolio, whose combined installed capacity has been growing at a CAGR of 43.9% over the past five years. Moreover, leveraging its early mover's advantage in acquiring and operating offshore wind power projects in the UK, the Group expands its international footprints by further developing overseas renewable energy projects.

·      The Group's total revenue increased steadily from RMB29,270.8 million in 2016 to RMB31,643.1 million in 2017 and further to RMB41,011.4 million in 2018, with a CAGR of 18.4%. In the same periods, the Group's net profit was RMB7,859.6 million, RMB6,559.5 million and RMB8,315.6 million, respectively, its profit attributable to owners of the Company was RMB3,916.4 million, RMB3,232.3 million and RMB4,329.2 million, and the net cash flows generated from operating activities was RMB19,009.7 million, RMB18,089.9 million and RMB19,132.9 million, respectively.

 

ZHU Jiwei, Chairman of the Company, stated:

"SDIC Power is a leading power generation company in China, with businesses in over 10 provincial-level divisions and several countries such as the UK and Indonesia, and a diversified portfolio of projects primarily across hydropower, coal-fired power, wind power and solar power. The hydropower business is our core business, and we are the single entity exclusively responsible for the development of hydropower projects on the Yalong River. The "unit gross profit" of our hydropower business in 2018 was the highest among all A-share listed power generation companies with hydropower installed capacity at the GW level in the same year.

We have achieved significant development through prudent investment decisions, sound corporate governance and effective capital operations since listing on the Shanghai Stock Exchange in 2002. With our total assets and net profit increased remarkably since listing, we believe that we have become one of the most efficient and profitable integrated energy groups in China and have brought substantial investment returns to our shareholders.

We have taken our first step towards entering the European renewable energy market through the successful acquisition of Red Rock Power Limited in 2016, and reached a new phase of development in this market with more than three years of hard work and efforts. Our decision to issue GDRs was made in response to our business needs and aims to further enhance our international profile and influence in Europe, especially in the UK, to promote our business development in these regions. Through this offering, we will gain better access to the international capital markets, reaching an important milestone for our global expansion. We strive to contribute to the development of Shanghai-London Stock Connect and the deepening of financial cooperation between China and the UK."

 

Potential Transaction Summary

Should the Company proceed with the Offering, the Offering is expected to have the following features:

·      Listing of newly issued GDRs on the standard segment of the Official List maintained by the FCA and admission to trading of the GDRs to the Shanghai-London Stock Connect segment of the main market for listed securities of London Stock Exchange plc.

·      The Company will also apply to the Shanghai Stock Exchange (the "SSE") for admission to listing of the underlying A Shares representing the GDRs, with the listing expected to be effective on the date of Admission.

·      The Offering is expected to consist solely of newly issued GDRs representing underlying A Shares of the Company (raising proceeds for expanding the Group's renewable energy business overseas and repaying the Group's offshore indebtedness). No securities are expected to be sold by existing shareholders of the Company as part of the Offering.

·      The GDRs are being offered and sold outside the United States in "offshore transactions" within the meaning of Regulation S under the Securities Act (as defined below).

·      Any additional details in relation to the potential Offering would be disclosed in an Intention to Float ("ITF") announcement and/or the Prospectus, if and when published;

·      Goldman Sachs International, UBS AG London Branch and HSBC Bank plc are acting as Joint Global Co-ordinators and Joint Bookrunners (together, the "Joint Global Co-ordinators").

A copy of the Registration Document was submitted to the National Storage Mechanism on 29 October 2019 and is available for inspection at www.morningstar.co.uk/uk/NSM. A copy of the Registration Document is also available on the Company's website at www.sdicpower.com/en, subject to certain access restrictions.

 

Investment Highlights

The Group believes the competitive strengths set out below place it at the forefront of the power generation industry in China:

Rare and premium hydropower resources with vast potential for growth

·      The Group's hydropower projects are predominantly located along the Yalong River, the Lantsang River and the Yellow River. These rivers are rich in hydrological resources and are suitable for developing cascade hydropower projects. Hydropower projects along the Yalong River are the core hydropower assets of the Group. With an exploitable capacity of over 30.0 GW, the Yalong River is the third largest hydropower base among China's 13 largest hydropower bases. Around half of the river's runoff comes from ample and steady annual discharge from underground water and meltwater, which results in low seasonal and annual variance in flow. The Group's Jinping I and Jinping II hydropower projects are among the ten largest hydropower projects in China. The Group's principal subsidiary, Yalong River Hydropower, has the exclusive right to develop hydropower resources of the Yalong River, which is the only instance where a power generation company has exclusive right to develop hydropower resources of a major hydropower base in China.

·      The Group strategically scheduled the construction of large-scale hydropower projects on the river, leveraging the scale of its hydraulics resources. As at 30 June 2019, the Group has five large-scale hydropower projects in operation on the lower reach of the Yalong River, totalling 14.7 GW in consolidated installed capacity, which have over 70 TWh of annual power generation for the past three years. The Group plans to develop seven hydropower projects on the middle reach of the Yalong River, with a total designed capacity of 11.8 GW and designed power output of approximately 49.7 TWh per year.

·      In addition, the Group's Dachaoshan Hydropower Project, with a total of 1,350.0 MW installed capacity, is located on the middle reach of the Lantsang River, and Daxia, Xiaoxia and Wujinxia (also known as Xiaosanxia) hydropower projects are located on the upper reach of the Yellow River, with an installed capacity of 709.5 MW. Both areas are among China's 13 largest hydropower bases, characterised by abundant and stable water resources.

Outstanding hydropower profitability due to sound coordination and regulating capability of hydropower projects

·      The "unit gross profit" (gross profit divided by hydro installed capacity) of the Group's hydropower business in 2018 was RMB819,600 per MW, which was the highest among all A-share listed power generation companies with hydropower installed capacity at the GW level in the same year, according to Frost & Sullivan.

·      The Group has the unique advantage of operating a multilevel cascade hydropower system consisting of five large-scale hydropower projects in operation and two under construction along the Yalong River. The combination of cascade hydropower projects and large regulating reservoirs optimises hydropower resource allocation, mitigates adverse hydrological conditions and maximises hydropower generation efficiency, which lead to higher and more stable hydropower generation. The Group's Lianghekou Hydropower Project (under construction), Jinping I Hydropower Project and Ertan Hydropower Project are equipped with large-scale regulating reservoirs. In particular, Jinping I Hydropower Project's arch dam is 305 metres in height, which is the world's highest double-curvature arch dam, according to Frost & Sullivan. These large regulating reservoirs can increase water storage during the wet season, and increase the water flow for downstream hydropower projects during the dry season, thus significantly increasing their power generation and enabling the Company to enjoy a tariff premium. When Lianghekou Hydropower Project commences operation, it is targeted to increase the theoretical multi-year average annual electricity generation of the Group's hydropower projects by over 10 TWh.

Industry-leading hydropower utilisation hours

·      Due to the preferential offtake arrangements and designated power transmission lines, together with the Group's premium hydropower resources and sound water regulating capability, the Group's average utilisation hours of hydropower projects in 2016, 2017 and 2018 was 4,822 hours, 4,965 hours and 5,048 hours, respectively, far greater than the average national hydropower utilisation hours of 3,619 hours, 3,597 hours and 3,607 hours in the same periods, respectively.

·      The PRC government has committed to supporting the development of clean energy, in particular, prioritising hydropower, wind power and solar power generation. The Group's hydropower projects have benefited, and will continue to benefit from preferential offtake arrangements and designated power transmission lines. In 2018, the amount of hydropower generated under preferential offtake arrangements under the clean energy policy accounted for more than 90.0% of the hydropower generated by the Group. In particular, most of the power generation from the Group's Jinping I, II and Guandi hydropower projects is transmitted to one of the most developed provinces in China through the designated ultra-high-voltage power transmission lines built under the state's "West-to-East" electricity transmission project. Moreover, Dachaoshan Power Project in Yunnan province and Xiaosanxia Power Project in Gansu province enjoy preferential offtake arrangements as well.

Efficient and clean coal-fired power assets

·      In addition to the premium hydropower assets, the Group has been actively optimising its coal-fired power project portfolio and investing in equipment and technology upgrades. The Group's coal-fired power projects focus on large-capacity, energy-saving power generating units, and operate in an efficient and environmentally friendly manner. As at 30 June 2019, the Group's coal-fired installed capacity reached 15,756.0 MW, consisting of units with single installed capacity of at least 300.0 MW.

·      The Group has eight units at the GW level, representing 50.8% of total installed capacity of coal-fired power, substantially higher than other A-share listed coal-fired power companies with a coal-fired installed capacity of over 5.0 GW. In addition, the Group has nine ultra-supercritical coal-fired power generating units and three supercritical coal-fired power generating units, with a total installed capacity of 10,550.0 MW. The operation of a large number of advanced coal-fired units is conducive to reducing coal consumption for power generation. Moreover, all of the coal-fired power generating units operated by the Group have desulphurisation, dedust and denitrification equipment. Over 90% of the Group's coal-fired power units in terms of installed capacity have achieved ultra-low emission levels. For example, Beijiang Coal-fired Power Project has four 1.0 GW ultra-supercritical power generating units and achieved a net standard coal consumption rate of 281.5g/kWh for the six months ended 30 June 2019, as compared to the national average rate for coal-fired power plants of 308.0g/ kWh.

Successfully acquiring, developing and operating high-quality overseas power generation assets

·      The Group has built a diversified portfolio of high-quality power generating assets in Europe and Asia. By acquiring three wind power projects in the UK, the Group has entered into the European renewable energy market. The Group is an industry leader in exploring international opportunities relating to wind power projects. In 2016, the Group acquired a 100.0% equity interest in Red Rock Power Limited, through which it owned a 25.0% equity interest in Beatrice Offshore Wind Power Project and a 100.0% equity interest in Inch Cape Offshore Wind Power Project. The Beatrice project is expected to have an installed capacity of 588.0 MW and will commence full commercial operation in the second half of 2019, with a 15-year fixed tariff of GBP140/MWh (set in 2012 and adjusted for Consumer Price Index), which is higher than the local wholesale electricity price. In 2018, the Group acquired the Afton Onshore Wind Power Project, which enjoys a 19-year ROC (Renewables Obligation Certificate) subsidy from the date of commercial operation. The Group has accumulated extensive experience in developing and managing offshore and onshore wind power projects through these acquisitions, which enables the Group to access best-in-class international operation models and advanced technology to further explore renewable energy business opportunities globally.

·      In addition, the Group acquired a 40.0% equity interest in the Banten Coal-fired Power Project in 2016. The project is located at the power load centre of Indonesia and is one of the major power plants for the Jawa-Bali grid. The project has entered into a 25-year PPA with a state-owned power grid company in Indonesia which provides a stable income. The Group has years of experience in developing, operating and managing coal-fired power projects in China and is well positioned to apply the experience to enhance the efficiency of the invested project.

Visionary and experienced management team supported by highly skilled employees

·      The Group is led by a management team consisting of highly qualified experts with in-depth knowledge and expertise in the power industry. Having deep insights and a comprehensive understanding of the development and future trends of the power industry, the management team has successfully steered the Group in growing from a coal-fired power focused company to a leading diversified power generation company in China with a focus on hydropower. In addition, the Group was among the first batch of state-owned enterprises in China to recruit executives. The Group's senior management members have an average industry experience of 20 years and have been with the Group for an average of 14 years.

·      The management team is supported by professional technicians with extensive experience in developing and operating power projects. In particular, they managed to successfully complete the construction of the Ertan Hydropower Project and Jin-guan Hydropower Project Group, and enhanced the Group's brand awareness globally. As at 30 June 2019, the Group has 9,391 employees, 73.5% of whom have a college degree or above. The Group provides employees with professional on-the-job training to ensure that they continue to stay abreast of the latest developments in the power industry.

Business Strategies

The Group is committed to strengthening its position as a leading diversified power generation company in China and increasing its international presence through the following strategies:

Continue to strengthen hydropower business

·      The Group will continue to strengthen its leading position in China's hydropower industry by developing more hydropower projects in the upper and middle reaches of the Yalong River.

·      Additionally, the Group intends to increase operation efficiency and lower development and maintenance costs with the help of a skilled technical team.

·      The Group also plans to identify quality acquisition targets of hydropower projects and to explore hydropower opportunities both in China and overseas.

Strategically expand international footprint

·      The Group intends to gradually conduct international business and further expand its international footprint, with a focus on renewable energy projects in developed countries and diversified energy projects in developing countries, thereby expanding its overseas asset portfolio.

·      The Group will also explore investment opportunities in diversified energy projects in Southeast Asia.

Further expand wind and solar power generating assets

·      The Group intends to increase investment in renewable energy assets, particularly wind power and solar power. With strong PRC government support for wind and solar power development, the Group plans to continue to develop greenfield wind and solar power projects.

·      The Group also intends to selectively acquire wind power and solar power projects, focusing on both increasing its scale and meeting its investment return expectation.

Continue to optimise coal-fired power asset structure

·      The Group will continue to improve the efficiency and cleanliness of its coal-fired power projects. Specifically, it plans to optimise its coal-fired power asset structure by increasing the proportion of large capacity power generating units, and accelerate the upgrading to improve energy efficiency and reduce emissions.

·      In addition, the Group intends to further optimise its operations to enhance efficiency and the financial performance of its coal-fired power projects.

Establish a diversified and emerging industry value chain

·      The Group is also actively developing waste-to-energy business. The Group recently acquired two waste-to-energy projects in Guizhou province, China and Bangkok, Thailand, and it intends to further explore acquisition opportunities to expand its waste-to-energy business in the future. The Group is also exploring opportunities to develop solar thermal power projects.

·      In addition, the Group intends to explore opportunities for growth across the industry value chain and to pursue vertical integration by expanding into incremental distribution network business and electricity sales business.

Dividend Policy

After completion of the Offering, the Company may distribute dividends in the form of cash or by other means that the Company considers appropriate. Any proposed distribution of dividends shall be formulated by the Board and will be subject to shareholders' approval. A decision to declare or to pay any dividends in the future, and the amount of any dividends, will depend on a number of factors, including the Group's results of operations, cash flows, financial condition, payments by its subsidiaries of cash dividends to the Company, business prospects, statutory, regulatory and contractual restrictions on its declaration and payment of dividends and other factors that the Board may consider important.

According to the applicable PRC laws and its Articles of Association, the Company will pay dividends out of its profit after tax only after it has made the following allocations:

·      recovery of accumulated losses, if any;

·      allocations to the statutory reserve equivalent to 10% of its profit after tax, and, when the statutory reserve reaches and is maintained at or above 50% of its registered capital, no further allocations to this statutory reserve will be required;

·      allocation, if any, to a discretionary common reserve fund an amount approved by the shareholders of the Company in a shareholders' meeting.

Furthermore, as set forth in its Articles of Association, if it has profits and no unrecovered losses during the year and there are no significant investment or capital expenditure plans, the Company shall distribute cash dividends. The accumulated profits for distribution in the most recent three fiscal years shall be no less than 30% of the average annual distributable profits realised in the same period. The Group distributes dividends primarily in the form of cash, but may also distribute dividends in the form of stocks or a combination of cash and stocks. Any proposed distribution of dividends is subject to the discretion of the Board and the approval of the shareholders. The Board may recommend a distribution of dividends in the future after taking into account the Group's results of operations, financial condition, operating requirements, capital requirements, shareholders' interests and any other conditions that the Board may deem relevant.

Supplemental Information for Bona-fide Unconnected Research Analysts

Certain additional information in relation to SDIC Power Holdings CO., LTD will be made available via a link to unconnected research analysts today. Please let XU Xinlan know at xuxinlan@sdicpower.com if you would like to receive access to the information.

 

Enquiries

SDIC Power Holdings CO., LTD


XU Xinlan

+86 10 8800 6327

Citigate Dewe Rogerson
(International public relations advisor to the Company)


David Westover

Caroline Merrell

Toby Moore

+44 203 926 8526

+44 203 926 8531

+44 203 926 8540

Citigate Dewe Rogerson
(Regional public relations advisor to
the Company)


Benny Liu

Kathryn Tse

+86 10 6567 5056

+86 10 6567 7550



Key Performance Indicators and Other Financial Metrics

The following table sets forth the key measurements of the Group's profitability:

(RMB in millions, except percentages)

For the year

ended 31 December

For the six
months ended 30 June

2016

2017

2018

2018

2019





(unaudited) 

Profit for the year/period

7,859.6

6,559.5

8,315.6

3,092.6

4,102.1

Net margin     

26.9%

20.7%

20.3%

17.4%

20.9%

EBITDA (unaudited)        

20,015.5

19,039.9

21,890.2

9,627.6

11,088.2

EBITDA margin (unaudited)     

68.4%

60.2%

53.4%

54.1%

56.5%

 

Non-IFRS Financial Measures

Please refer to the Registration Document, which is available in electronic form on the Company's website at www.sdicpower.com/en, subject to certain access restrictions, for further details on non-IFRS measures.

Net Margin

Net margin is calculated by dividing profit for the year/period by revenue.

EBITDA

EBITDA is defined as profit before tax from continuing operations, plus depreciation of property, plant and equipment, amortisation of intangible assets and finance costs (excluding net foreign exchange gain or loss and others).

 

EBITDA Margin

EBITDA margin is calculated by dividing EBITDA by revenue.

Board of Directors

The membership of the Board of Directors of the Company is as set out below.

Name

Age

Current Position

Since

ZHU Jiwei

49

Chairman of the Board of Directors

2019

LUO Shaoxiang

55

Vice Chairman of the Board of Directors

2016

JIANG Hua

41

Director, General Manager

2019

ZHANG Yuanling

57

Director

2017

ZHAN Pingyuan

46

Director

2019

LI Jun

56

Director

2019

YU Yingmin

52

Independent Director

2019

SHAO Lvwei

53

Independent Director

2015

ZENG Ming

61

Independent Director

2015

The biographies of the members of the Board of Directors of the Company are set out below.

ZHU Jiwei-Chairman of the Board of Directors

Mr. ZHU Jiwei is the Chairman of the Board of Directors of the Company. He holds a bachelor's degree and a title of engineer. He served as assistant general manager of Xiamen Huaxia International Power Development Co., Ltd (厦门华夏国际电力发展有限公司) from March 2004 to September 2005. He served in SDIC Qujing Power Co., Ltd. (国投曲靖发电有限公司) as chief engineer and deputy general manager from September 2005 to November 2007, and as general manager from November 2007 to July 2012. Mr. Zhu previously served as general manager of Xiamen Huaxia International Power Development Co., Ltd. (厦门华夏国际电力发展有限公司) from July 2012 to August 2016. He served as general manager and deputy party secretary of the Company from August 2016 to March 2019. Mr. Zhu has been the party secretary of the Company since March 2019, and a Director of the Company since September 2016 with a current term of office from September 2016 to September 2019. Mr. Zhu has been the Chairman of the Board of Directors since March 2019 with a current term of office from September 2019 to September 2022.

LUO Shaoxiang-Vice Chairman of the Board of Directors

Mr. LUO Shaoxiang is the Vice Chairman of the Board of Directors of the Company. He holds a master's degree and a title of senior engineer. He previously served at SDIC as deputy director and director of the strategy development department from October 2005 to December 2012 and from December 2012 to December 2014, respectively, and as director of the business management department from December 2014 to April 2016. Mr. Luo has served as department director of SDIC since April 2016 and as the director of SDIC Mining Investment Co., Ltd. (国投矿业投资有限公司) since December 2015. He has served as Vice Chairman of the Board of Directors of the Company since February 2016 with a current term of office from September 2019 to September 2022.

JIANG Hua-Director and the General Manager

Mr. JIANG Hua is a Director and the general manager of the Company. He holds a master's degree and a title of senior engineer. He previously served as deputy manager and manager of the production and operation department of the Company from December 2009 to April 2013 and from April 2013 to October 2013, respectively. He served as department manager of the Company and was seconded to serve as deputy general manager of SDIC Jinneng from October 2013 to May 2016. Mr. Jiang served as assistant general manager and was seconded to serve as general manager of SDIC Qinzhou from May 2016 to December 2016. Mr. Jiang served as deputy general manager of the Company from August 2016 to March 2019. Mr. Jiang has been the deputy party secretary of the Company since March 2019, and a Director and the general manager of the Company since March 2019 both with a current term of office from September 2019 to September 2022.

ZHANG Yuanling-Director

Mr. ZHANG Yuanling is a Director of the Company. He holds a bachelor's degree and a title of senior engineer. Mr. Zhang previously served as deputy manager of the project management department of the Company from August 2000 to August 2001, general manager of SDIC Gansu Xiaosanxia Power Co., Ltd. (国投甘肃小三峡发电有限公司) from August 2001 to January 2005, deputy general manager of the Company from January 2005 to December 2013, and general manager of SDIC Chuangyi Industry Fund Management Co., Ltd. (国投创益产业基金管理有限公司) from December 2013 to June 2017. He has served as department director of SDIC since June 2017 and director of SDIC Asset Management Co., Ltd. (国投资产管理有限公司) since July 2017. Mr. Zhang has served as Director of the Company since November 2017 with a current term of office from September 2019 to September 2022.

ZHAN Pingyuan-Director

Mr. ZHAN Pingyuan is a Director of the Company. He holds a doctor's degree and is a senior accountant and a senior international financial manager. Mr. Zhan previously served in various finance and accounting related positions in China International Water & Electric Corp. (中国水利电力对外公司) from June 2006 to August 2011, China Three Gorges Group International Investment Corp. (长江三峡集团国际投资有限公司) from August 2011 to July 2012, China Water & Electric International Investment Co., Ltd. (中水电国际投资有限公司) from July 2012 to April 2015 and China Three Gorges Group International Corp. (三峡国际能源投资集团有限公司) from April 2015 to March 2019. Mr. Zhan has been the chief financial officer of China Yangtze Power Co., Ltd. (中国长江电力股份有限公司) (Stock Code: 600900.SZ ) since March 2019. He has also been a director of the Company since September 2019 with a current term of office from September 2019 to September 2022.

LI Jun-Director

Mr. LI Jun is a Director of the Company. He holds a master's degree and a title of senior engineer of researcher level. Mr. Li served as general manager of Huaibei Guo'an Power Co., Ltd. (淮北国安电力有限公司) from July 2004 to April 2011. He served as chief engineer of the Company from April 2011 to February 2012. He served as chief engineer of the Company from February 2012 to August 2012 and deputy general manager of the Company from August 2012 to September 2017. Mr. Li has been the deputy party secretary of the Company since September 2017. Mr. Li has been a Director of the Company since April 2019 with a current term of office from September 2019 to September 2022.

YU Yingmin-Independent Director

Mr. YU Yingmin is an independent Director of the Company. He holds a doctor's degree and is a professor of the School of Accountancy of the Central University of Finance and Economics and a member of China Association of Certified Public Accountants. Mr. Yu served as an independent director of Guangdong CHJ Industry Co., Ltd. (广东潮宏基实业股份有限公司) (stock code: 002345.SZ) from September 2012 to November 2018, Northern United Publishing & Media (Group) Company Limited (北方联合出版传媒(集团)股份有限公司) (stock code: 601999.SH) from December 2015 to December 2016, Sinotrans Air Transportation Development Co., Ltd. (中外运空运发展股份有限公司) (a former listed company on SSE under the stock code 600270, delisted due to merger) from August 2017 to November 2018, and Zhuhai Sailong Pharmaceutical Co., Ltd. (珠海塞隆药业股份有限公司) (stock code: 002898.SZ) from November 2015 to November 2018. Mr. Yu has been an independent director of Genimous Technology Co., Ltd. (智度科技股份有限公司) (stock code: 000676.SZ) since January 2015, Huabao Flavours & Fragrances Co., Ltd. (华宝香精股份有限公司) (stock code: 300741.SZ) since November 2016, Sichuan Shuangma Cement Co., Ltd. (四川双马股份有限公司) (stock code: 000935.SZ) since August 2017 and Guangzhou Tech-Long Packaging Machinery Co., Ltd. (广州达意隆包装机械股份有限公司) (stock code: 002209.SZ) since December 2018. Mr. Yu has been an independent director of the Company since September 2019 with a term of office from September 2019 to September 2022.

SHAO Lvwei-Independent Director

Mr. SHAO Lvwei is an independent Director of the Company. He holds a bachelor's degree. Mr. Shao is currently a partner and director of Jiangsu Xintianlun Law Firm (江苏新天伦律师事务所). He has served as independent director of Jiangsu Yangnong Chemical Co., Ltd. (江苏扬农化工股份有限公司) since 2016, he has also served as independent director of Jiangsu Aoyang Health Industry Co., Ltd. (江苏澳洋健康产业股份有限公司) since March 2018. Mr. Shao has served as independent Director of the Company since May 2015 with a term of office from September 2019 to May 2021.

ZENG Ming-Independent Director

Mr. ZENG Ming is an independent Director of the Company. He holds a master's degree and is a professor of economics and management of electric power technology and director of research and consulting centre of energy and power economy at the North China Electric Power University. He has served as independent director of Creative Distribution Automation Co., Ltd. (北京科锐配电自动化股份有限公司), and independent director and subsequently director of Jointo Energy Investment Co., Ltd. Hebei. (河北建投能源投资股份有限公司) since 2016. From 2016 to May 2019, Mr. Zeng served as the independent director of Nari Technology Co., Ltd. (国电南瑞科技股份有限公司) Since 2017, Mr. Zeng has also served as director of Suzhou Taigu Power Mange Co., Ltd. (苏州太谷电力股份有限公司) and GCL Intelligent Energy Co., Ltd. (协鑫智慧能源股份有限公司). He has served as independent Director of the Company since July 2015 with a term of office from September 2019 to July 2021.

 

Important Legal Information

The information contained in this announcement is for background purposes only and does not purport to be full or complete nor does it constitute or form part of any invitation or inducement to engage in investment activity, nor does it constitute an offer or invitation to buy any securities in any jurisdiction including the United States, or a recommendation in respect of buying, holding or selling any securities. No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia), Australia, Canada, Japan or South Africa. This announcement does not constitute or form a part of any offering or solicitation to purchase or subscribe for, or otherwise invest in, securities in the United States, Australia, Japan or South Africa. The GDRs referred to herein have not been, and will not be, registered under the United States Securities Act of 1933 (the "Securities Act"). The GDRs are being offered and sold outside the United States in "offshore transactions" within the meaning of Regulation S under the Securities Act.

The GDRs may not be offered or sold in the United States except pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act. There will be no public offering of securities in the United States.

This announcement is only addressed to and directed at persons in Member States of the European Economic Area ("Member States") who are "qualified investors" within the meaning of Article 2(e) of the Prospectus Regulation (Regulation (EU) 2017/1129) (the "Prospectus Regulation") and related implementation measures (Qualified Investors"). In addition, in the United Kingdom, this announcement is only directed at, and being distributed to, Qualified Investors who have professional experience in matters relating to investments and who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or who fall within Article 49 of the Order or any other persons to whom it may otherwise be lawfully communicated (all such persons together being referred to as "relevant persons"). This announcement must not be acted on or relied on: (i) in the United Kingdom, by persons who are not relevant persons; and (ii) in any Member State other than the United Kingdom, by persons who are not Qualified Investors. Any investment or investment activity to which this announcement relates is available only to: (i) in the United Kingdom, relevant persons; and (ii) in any Member State other than the United Kingdom, Qualified Persons and other persons who are permitted to subscribe for the GDRs described herein pursuant to an exemption from the Prospectus Regulation and other applicable legislation, and will only be engaged in with such persons.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Group's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's business, results of operations, financial position, liquidity, prospects, growth and strategies. Forward-looking statements speak only as of the date they are made. The Company expressly disclaims any obligation or undertaking to update, review or revise the forward-looking statements contained in this announcement to reflect any change in their expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law, rules and regulations.

Each of the Company and the Joint Global Co-ordinators and their respective affiliates as defined under Rule 501(b) of Regulation D under the Securities Act, expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future development or otherwise.

Any subscription or purchase of GDRs in the possible Offering should be made solely on the basis of information contained in the Prospectus which may be issued by the Company in connection with the Offering. The information in this announcement is subject to change. Before subscribing for or purchasing any GDRs, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Prospectus if published. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. This announcement shall not form the basis of or constitute any offering or invitation to sell or issue, or any solicitation of any offering to purchase or subscribe for any GDRs or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor.

The Group may decide not to go ahead with the Offering and there is therefore no guarantee that Admission will occur. Potential investors should not base their financial decision on this announcement. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. The timing of any Offering and Admission may be influenced by a variety of factors which include market conditions. The Company may decide not to go ahead with the Offering and/or Admission and there is therefore no guarantee that a Prospectus will be published, the Offering will be made, or that Admission will occur.

Persons considering making investments should consult an authorised person specialising in advising on such investments. Neither this announcement, nor the Registration Document referred to herein, constitutes a recommendation concerning a possible offering. The value of GDRs can decrease as well as increase. Past performance is not a guide to future performance. Information in this announcement cannot be relied upon as a guide to future performance. Before purchasing any securities in the Company, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Prospectus, if published. Potential investors should consult a professional advisor as to the suitability of a possible offering for the person concerned.

None of the Joint Global Co-ordinators or any of their respective affiliates or any of their or their affiliates' directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith.

Unless otherwise indicated, market, industry and competitive position data are estimates (and accordingly, approximate) and should be treated with caution. Such information has not been audited or independently verified, nor has the Company ascertained the underlying economic assumptions relied upon therein.

Certain data in this announcement, including financial, statistical, and operating information has been rounded. As a result of the rounding, the totals of data presented in this announcement may vary slightly from the actual arithmetic totals of such data. Percentages in tables may have been rounded and accordingly may not add up to 100%.

For the avoidance of doubt, the contents of the Company's website are not incorporated by reference into, and do not form part of, this announcement.

Information to Distributors

Solely for the purposes of the product governance requirements contained within (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"), (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II, and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the GDRs have been subject to a product approval process, which has determined that such GDRs are (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the GDRs may decline and investors could lose all or part of their investment; the GDRs offer no guaranteed income and no capital protection; and an investment in the GDRs is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the possible Offering. Furthermore, it is noted that, notwithstanding the Target Market Assessment, should the offer proceed, the Joint Global Co-ordinators will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the GDRs.

Each distributor is responsible for undertaking its own target market assessment in respect of the GDRs and determining appropriate distribution channels.

 


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