Company Update

AUHUA CLEAN ENERGY PLC

("Auhua" or "the Group")

Company Update

Auhua Clean Energy plc, the AIM quoted (AIM: ACE) environmental technology group based in the Shandong Province of China, is pleased to announce the following:

·; Establishment and implementation of industry standards for the split-unit solar water heater industry in Shandong, China, which Auhua has been a key adviser to.

·; Signed memorandums of understanding with four large conglomerates for use of the Group's split-unit solar water heaters for their property projects.

·; Awarded "Official Recommended Building and Engineering Product" by the Building Materials Department from the China Association for Engineering Construction Standardisation.

Implementation of industry standards for split-unit solar water heaters

As announced in June 2012, as a technological leader in the industry, Auhua has been closely involved in forming industry standards for split-unit solar water heaters together with the Shandong government (the "Standards").

The Shandong government announced the official implementation of these Standards on 22 August 2012, during Auhua's listing celebrations in Rushan District, Weihai City, Shandong. The event was attended by the Mayor of Rushan District, Mr Sui Jian Bo, the Chairman of China Association for Engineering Construction Standardisation, Mr Gu and the Deputy Director of the National Energy Administration, Mr Jiang, to celebrate Auhua's successful listing on AIM earlier this year.

The Standards are a collaborative effort by several bodies including the Shandong Solar Energy Industry Association, Shandong Product Quality Supervision and Inspection Research Institute, Shandong Provincial Department of Construction, Shandong Auhua New Energy Co. Ltd and Weihai Auhua New Energy Co. Ltd (both wholly owned subsidiaries of the Group) and Linuo Paradigma Co. Ltd and Shandong Redsun Co. Ltd, two other companies operating in the industry. The Standards will take effect immediately and have been established to ensure quality control is maintained in the manufacture of split-unit solar water heaters and to regulate the industry. Importantly, the Standards will form professional guidelines for industry players to adhere to and implement a three to five star grading system to rate the quality of a product. This will also assist property developers and government agencies in evaluating which product to purchase and promote respectively.

Mr Wang Yu Gang, the Chief of the Shandong Renewal Energy Department and the Secretary General of the Shandong Solar Industry Association said: "Auhua is well-respected by the industry as the leader in split-unit solar water heater systems and by choosing them to help draft and advise the Standards will ensure that a high standard is set and there is a benchmark for fellow industry players to emulate."

Memorandums of understanding with property conglomerates

The technology of split-unit systems has been developed and pioneered by Auhua, which holds more than 10 patents in this field, and is increasingly gaining support and popularity with property developers and government planning bodies. In recognition of Auhua's leadership in split-unit solar water heater technology, several large conglomerates have signed memorandums of understanding with the Group to work in partnership to promote solar energy products. Significantly for the Group, the conglomerates will exclusively choose Auhua's products in all their property development projects and in return Auhua will provide highly competitive prices. The conglomerates include YanKuang Group, China Construction Eighth Engineering Division Corp Ltd and China Railway Tenth Group Co Ltd. The Company also signed a memorandum of understanding with the Shandong Building University for joint research and development projects.

The Award

 The building materials department of the China Association for Engineering Construction Standardisation has awarded the Group "Official Recommended Building and Engineering Product" in recognition for its split-unit solar water heater system products. The China Association for Engineering Construction Standardisation is a national level association under the umbrella of the Ministry of Housing and Urban-Rural Development. Auhua is currently the only official recommended supplier of split-unit solar water heaters in the whole of China. Management believes that this recognition will further enhance the Group's sales and marketing efforts going forward.

Trading update

Trading for the first half year has been in line with expectations and the Group plan to release its results in mid September.

Mr Chen Anxiang, CEO of Auhua said: "While we are a relatively small business, these achievements reiterate our dominance and recognised competence in the area of split-unit solar water heaters. Our existing and potential customers will see this as an implicit government endorsement and will only benefit our market expansion moving ahead."

Raphael Tham, Chairman of Auhua said: "It is particularly pleasing to see the implementation of the Standards and Auhua's agreement with large property conglomerates which were objectives we set out 12 months ago and importantly we are confident these events will help us in securing large projects going forward.

Auhua is already advising Xi'an city and Shandong Province which has a combined population of c.102.5 million people. Auhua's role in forming their classification systems for solar water heater products is a further endorsement of the Group's technology superiority and commitment to quality. Since the Shandong province is a leading solar technology centre in China, we believe other provinces are likely to adopt Shandong's Standards which will drive our expansion to other provinces."

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Notes to Editors:

Auhua Clean Energy is an environmental technology group based in the Shandong Province of Eastern China specialising in the development and application of green energy and energy efficient solar water heating solutions. In particular, the Group is focused on the manufacture and sale of solar energy water heating systems.

Auhua Clean Energy operates through its wholly owned subsidiaries Shandong Auhua New Energy Co., Ltd and Weihua Auhua New Energy Co., Ltd., of which Auhua Holdings Pte Ltd is the intermediate holding company.