Results of Issuance and Changes in Capital Stock

SDIC Power Holdings Co., LTD.

Announcement on the Results of Non-public Issuance of Stocks and Changes in Capital Stock 

Important notes:

1. Issuance quantity and price 

Type of stock: RMB common stock (A shares)

Issuance quantity: 488,306,450 shares

Issuance price: RMB 7.44/share

2. Subscription quantity and restricted stock trade period of the issuance object 

SDIC Power Holdings Co., LTD. (hereinafter referred to as "the Company" or "SDIC Power") privately issued A shares to State Development & Investment Corp., Ltd. (hereinafter referred to as "SDIC") this time, with a subscription number of 488,306,450 shares and a lock-up period of 36 months from the date of completing the share registration formalities.

3. Estimated time to market 

The newly issued shares have been registered in Shanghai Branch of China Securities Depository and Clearing Corporation Limited on Dec 9th, 2021. The newly added shares of the Company shall not be transferred within 36 months from the date of completing the share registration formalities, and the expected listing and circulation time shall be the next trading day after the expiration of the restricted stock trade period.

4. Transfer of assets 

All the shares issued this time are subscribed in cash, without involving the transfer of assets.

I. Basic Information of This Issuance 

1. Relevant procedures for the performance of this issuance 

(1) Deliberated and adopted by the Board of Directors

On July 19, 2021, the Company held the 30th session of the 11th Board of Directors to deliberate and adopt the relevant proposals for this non-public issuance of stocks.

(2) Deliberated and adopted by the Shareholders' Meeting

On August 4, 2021, the Company held the sixth Extraordinary Shareholders' Meeting in 2021, deliberated and adopted various proposals related to this non-public issuance of A shares, and authorized the Board of Directors to handle all matters related to this non-public issuance of A shares.

(3) The approval process of the regulatory authorities for the performance of this issuance

1) SDIC issued the Approval on Matters Concerning the Non-public Issuance of A Shares by SDIC Power Holdings Co., LTD. (GTZL [2021] No. 201) to the Company on July 24, 2021.

2) The Issuance Examination Committee of the China Securities Regulatory Commission (hereinafter referred to as the "CSRC") deliberated and adopted the application for this non-public issuance of A shares by the Company on October 18, 2021.

3) CSRC issued the Reply to SDIC Power Holdings Co., LTD. on the Approval of its Non-public Issuance of Stocks (ZJXK [2021] No. 3410) on October 29, 2021.

2. This issuance 

(1) Type of issued stock: RMB common stock (A shares)

(2) Issuance quantity: 488,306,450 shares

(3) Issuance price: RMB 7.44/share

(4) Total raised funds: RMB 3,632,999,988.00

(5) Issuance cost: RMB 2,976,232.50 (excluding tax)

(6) Net raised funds: RMB 3,629,845,181.56

(7) Joint sponsor institutions (joint lead underwriters): CITIC Securities Co., Ltd. (hereinafter referred to as "CITICS") and Essence Securities Co., Ltd. (hereinafter referred to as "Essence Securities")

3. Capital verification of raised funds and share registration 

According to the Verification Report issued by BDO China Shu Lun Pan Certified Public Accountants LLP on November 25, 2021 (XKSBZ [2021] No. ZG11947), as of November 25, 2021, CITICS had received a total of RMB 3,632,999,988.00 of subscription funds paid to the special payment account opened by CITICS for this non-public issuance of SDIC Power.

On November 26, 2021, CITICS transferred the remaining amount of the above subscription funds after deducting the sponsorship fee and underwriting fee of the sponsor institution to the account designated by the issuer. According to the Verification Report issued by BDO China Shu Lun Pan Certified Public Accountants LLP on November 26, 2021 (XKSBZ [2021] No. ZG11946), as of 13:00 on November 26, 2021, there were total raised funds of RMB 3,632,999,988.00 for SDIC Power's non-public issuance of stocks. After deducting sponsorship and underwriting fees and intermediary fees paid by SDIC Power, totaling RMB 3,154,806.44 including tax, the net amount of actually raised funds is RMB 3,629,845,181.56, plus the deductible VAT input tax of RMB 178,573.94 for this issuance fee, totaling RMB 3,630,023,755.50, including the newly added registered capital (capital stock) of RMB 488,306,450.00, which is included in the capital reserve of RMB 3,141,717,305.50.

The registration and custody procedures for the newly issued shares of the Company were completed in Shanghai Branch of China Securities Depository and Clearing Corporation Limited on Dec 9th, 2021.

4. Concluding comments of the joint sponsor institution (joint lead underwriter) and law firm on the non-public issuance process and the compliance of the subscriber 

(1) Concluding comments of the joint sponsor institution (joint lead underwriter) on the pricing process of this issuance and the compliance of the issuer

As verified, the Joint Sponsor (joint lead underwriter) concludes that: "The process of the issuer privately issuing A shares this time is completely compliant with the Company Law, Securities Law, Administrative Measures for the Issuance of Securities by Listed Companies, Measures for the Administration of Securities Issuance and Underwriting, Detailed Implementation Rules for the Non-public Issuance of Stocks by Listed Companies and other relevant laws and regulations, Reply to SDIC Power Holdings Co., LTD. on the Approval of its Non-pubic Issuance of Stocks (ZJXK [2021] No. 3410) issued by CSRC, the issuer's requirements of internal decision-making procedures and requirements specified in the Issuance Plan submitted to CSRC by the joint sponsor (joint lead underwriter) before the launch of non-public issuance."

As verified, the joint sponsor (joint lead underwriter) concludes that: "The issuer determines target subscribers in fair and just manners, consistent with the interests of the Company and all its shareholders, and in line with the Administrative Measures for the Issuance of Securities by Listed Companies, Measures for the Administration of Securities Issuance and Underwriting and other relevant laws and regulations as well as requirements specified in the Issuance Plan submitted to CSRC by the joint sponsor (joint lead underwriter) before the launch of non-public issuance." The target subscriber of this non-public issuance is not a privately offered investment fund as specified in the Securities Investment Fund Law of the People's Republic of China, Trial Measures for Fund Management Companies to Provide Asset Management Services for Specific Clients, the Interim Measures for the Supervision and Administration of Privately Offered Investment Funds and the Measures for the Registration of Privately Offered Investment Fund Management Institutions and Fund Recordation (for Trial Implementation) and thus subject to no registration procedures for privately offered investment funds. Legal self-owned or self-raised funds are used for the subscription of the non-public issuance of A shares. No leverage financing structured portfolio is involved in the final contribution. No funds come directly or indirectly from the Issuer and its related parties."

The issuer has abode by the principles of fairness and justice in the issuance process and the selection of target subscribers regarding this non-public issuance of stocks, which are in line with the interests of the listed company and all shareholders.

(2) The concluding comments of the issuer's lawyer on the compliance of the issuance process and the subscriber

Beijing Guantao Law Firm, the Issuer's Lawyer concludes that:

1. this issuance of SDIC Power has been necessarily approved and authorized, and checked and approved by CSRC. Such approval, authorization and check are legal and effective.

2. The subscriber of this issuance, the issuance price and issuance quantity are in line with Administrative Measures for the Issuance of Securities by Listed Companies, Detailed Implementation Rules for the Non-public Issuance of Stocks by Listed Companies and other relevant laws, regulations and normative documents, the relevant requirements of this issuance plan deliberated and adopted by the issuer's Shareholders' Meeting, and the approval scope of the Reply to SDIC Power Holdings Co., LTD. on the Approval of its Non-public Issuance of Stocks (ZJXK [2021] No. 3410).

3. this issuance process of SDIC Power, the Payment Notice, the Share Subscription Agreement with Entry-into-force Conditions and other legal documents are legal and valid, and comply with the relevant provisions of relevant laws, regulations and normative documents such as the Administrative Measures for the Issuance of Securities by Listed Companies and the Detailed Implementation Rules for the Non-public Issuance of Stocks by Listed Companies, with fair and just issuance results.

II. Introduction to Issuance Results and Issuer 

1. Issuance results 

this issuance price is RMB 7.44/share, with 488,306,450 shares issued and the total raised funds of RMB 3,632,999,988.00.

The Company privately issued A shares to SDIC this time.

2. Basic information of the issuer 

The number of shares subscribed this time is 488,306,450, with the restricted stock trade period of 36 months from the date of completion of share registration procedures.

III. Changes in the Top Ten Shareholders of the Company Before and After this issuance

this issuance will not lead to any change in the control rights of the Company.

1. The top ten shareholders of the Company before this issuance 

As of September 30, 2021, the shareholding of the top ten shareholders of the Company is as follows:

2. The top ten shareholders of the Company after this issuance 

After the completion of this issuance, the top ten shareholders of the Company are as follows:

IV. Changes in the Company's Capital Stock Structure Before and After this issuance 

Changes in the Company's capital stock structure before and after this issuance are as follows:

V. Management Discussion and Analysis

1. The impact on the Company's capital stock structure 

After the registration of new shares issued in this non-public issuance is completed, the Company will increase 488,306,450 tradable shares with restrictions for sale. In the meantime, this issuance will not lead to changes in the control rights of the Company. SDIC is still the controlling shareholder of the Company, while the State-owned Assets Supervision and Administration Commission of the State Council is still the actual controller of the Company. After the completion of this non-public issuance, the Company's equity distribution meets the listing conditions stipulated in the Listing Rules of Shanghai Stock Exchange.

2. The impact on the Company's asset structure 

After the funds raised in this issuance are in place, the total assets and net assets of the Company will increase at the same time, while the asset-liability ratio will decrease. After this issuance, the Company will see better overall financial strength and debt solvency, better capital structure and better assurance of further development.

3. The impact on the Company's business structure 

The funds raised in this issuance will be used to construct Lianghekou Hydropower Station Project in Yalong River, Sichuan Province and supplement working capitals, which will enhance the Company's overall strength and financial strength. As with more working capitals, the Company will have a lower asset-liability ratio and better financial structure. As a result, the Company will be confronted with less financial risks and able to assure sustainable development. After the completion of this issuance, there will be no drastic change in the Company's main business scope and business income structure.

4. The impact on corporate governance structure 

After the completion of this issuance, there will be a corresponding increase in the Company's capital stock and corresponding changes in the shareholding ratio of shareholders. There is no change in controlling shareholder and actual controller of the Company, and the directors and senior managers will remain stable, which will not affect the stability and effectiveness of the original corporate governance structure. The Company will continue to strengthen and improve the corporate governance structure of the Company.

5. The impact on the structure of the Company's executives 

this issuance will not have a significant impact on the structure of executives. Where the Company intends to adjust the structure of executives, necessary legal procedures and information disclosure obligations will be performed as per relevant regulations.

6. The impact of this issuance on horizontal competition and related party transactions 

Upon completion of this issuance, there will be no change in either the business relationship, related party relationships or horizontal competition between the Company and its controlling shareholder, actual controller and their related parties. There will be no horizontal competition between the Company and its controlling shareholder, actual controller and their related parties as a result.

In case of related party transactions required for normal operations in the future, the Company will determine the transaction price in a fair, equitable and just manner under the principles of marketization in accordance with the applicable laws and regulations and the Articles of Association, and perform necessary approval and disclosure procedures.

Board of Directors of SDIC Power Holdings Co., LTD.

December 10th, 2021